NESTOR T. GADRINAB, Petitioner, vs. NORA T. SALAMANCA, ANTONIO TALAO AND ELENA LOPEZ, Respondents. G.R. No. 194560, June 11, 2014
“x x x.
This court explained in FGU Insurance Corporation v. Regional Trial Court60 the doctrine of finality of judgment:
Under the doctrine of finality of judgment or immutability of judgment, a decision that has acquired finality becomes immutable and unalterable, and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact and law, and whether it be made by the court that rendered it or by the Highest Court of the land. Any act which violates this principle must immediately be struck down.61
This doctrine admits a few exceptions, usually applied to serve substantial justice:
1. "The correction of clerical errors;
2. the so-called nunc pro tunc entries which cause no prejudice to any party;
3. void judgments; and
4. whenever circumstances transpire after the finality of the decision rendering its execution unjust and inequitable."62
Doctrines on bar by prior judgment and immutability of judgment apply whether judgment is rendered after a full-blown trial or after the parties voluntarily execute a compromise agreement duly approved by the court.
Because a judicial compromise agreement is in the nature of both an agreement between the parties and a judgment on the merits, it is covered by the Civil Code provisions on contracts. It can be avoided on grounds that may avoid an ordinary contract, e.g., it is not in accord with the law;63 lack of consent by a party; and existence of fraud or duress. Further, the pertinent Civil Code provisions on compromise agreements provide:
Article 2038. A compromise in which there is mistake, fraud, violence, intimidation, undue influence, or falsity of documents is subject to the provisions of Article 1330 of this Code.
Article 1330. A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable.
Therefore, courts cannot entertain actions involving the same cause of action, parties, and subject matter without violating the doctrines on bar by prior judgment and immutability of judgments, unless there is evidence that the agreement was void, obtained through fraud, mistake or any vice of consent, or would disrupt substantial justice.
In this case, there was no issue as to the fact that the parties freely entered into the compromise agreement. There was also no dispute about the clarity of its terms. Some of the parties simply do not wish to abide by the compromise agreement’s terms.
This court does not see how substantial justice will be served by disturbing a previous final judgment on compromise when failure of its execution was caused by the parties themselves.
Likewise, respondents’ argument that a supervening event, i.e. disagreement among the parties, was present to justify disturbance of the final judgment on compromise fails to persuade. A supervening event may justify the disturbance of a final judgment on compromise if it "brought about a material change in [the] situation"64 between the parties. The material change contemplated must render the execution of the final judgment unjust and inequitable. Otherwise, a party to the compromise agreement has a "right to have the compromise agreement executed, according to its terms."65
The subsequent disagreement among the parties did not cause any material change in the situation or in the relations among the parties. The situation and relations among the parties remained the same as the situation and their relations prior to the compromise agreement. They remained co-owners of the property, which they desired to partition.
Moreover, the parties voluntarily agreed to the compromise agreement, which was already stamped with judicial approval. The agreement’s execution would bring about the effects desired by all parties and the most just and equitable situation for all. On the other hand, the judgment granting the second action for partition filed by respondent Salamanca was obtained with opposition.
Judges "have the ministerial and mandatory duty to implement and enforce [a compromise agreement]."66 Absent appeal or motion to set aside the judgment, courts cannot modify, impose terms different from the terms of a compromise agreement, or set aside the compromises and reciprocal concessions made in good faith by the parties without gravely abusing their discretion.67
"[They cannot] relieve parties from [their] obligations . . . simply because [the agreements are] . . . unwise."68Further, "[t]he mere fact that the Compromise Agreement favors one party does not render it invalid."69 Courts do not have power to "alter contracts in order to save [one party]
from [the effects of] adverse stipulations. . . ."70
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