FIRST DIVISION
[G.R. No. 152797. October 21, 2015.]
FIL-ESTATE PROPERTIES, INC., petitioner,vs. PAULINO REYES, ET AL., respondent.
[G.R. No. 189315. October 21, 2015.]
PAULINO REYES, ET AL., petitioner,vs. FIL-ESTATE PROPERTIES, INC., respondent.
[G.R. No. 200684. October 21, 2015.]
NOLITO G. DEL MUNDO, GABRIEL A. MAULLON, MARIA L. TENORIO, NOEL G. DEL MUNDO, ET AL., REPRESENTED BY THEIR ATTORNEY-IN-FACT NOMER G. DEL MUNDO, petitioners,vs. THE MANILA SOUTHCOAST DEVELOPMENT CORP., INC., respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution dated October 21, 2015 which reads as follows:
"G.R. No. 152797 (Fil-Estate Properties, Inc. v. Paulino Reyes, et al.); G.R. No. 189315 (Paulino Reyes, et al. v. Fil-Estate Properties, Inc.); G.R. No. 200684 (Nolito G. Del Mundo, Gabriel A. Maullon, Maria L. Tenorio, Noel G. Del Mundo, et al., represented by their attorney-in-fact Nomer G. Del Mundo v. The Manila Southcoast Development Corp., Inc.). — These three Petitions for Review under Rule 45 were separately filed assailing the Decisions of the Court of Appeals (CA) on the coverage of parcels of land located in Hacienda Looc (the Hacienda) in Nasugbu, Batangas under the Comprehensive Agrarian Reform Law (CARL).
ANTECEDENT FACTS
The Hacienda was previously owned by the Development Bank of the Philippines (DBP) and was transferred to the Government of the Philippines through the latter's trustee, the Asset Privatization Trust (APT). On 8 June 1990, the APT and the DAR entered into a Memorandum of Agreement (MoA) involving the Hacienda. Under the MoA, the APT signified its intention to sell portions of the property to DAR under the Voluntary Offer to Sell (VOS) scheme of Republic Act (R.A.) 6657, or the Comprehensive Agrarian Reform Law (CARL) of 1988, on the condition that the DAR would return to APT the portions not covered by the Comprehensive Agrarian Reform Program (CARP). 1 acEHCD
APT transferred physical possession and control over the entire property to the DAR to enable the latter to undertake field verification and coverage of the portions under the CARP. 2 Between 1991 and 1993, through various Certificates of Land Ownership Award (CLOAs), the subject parcels of land were distributed to Paulino Reyes, et al. as farmer-beneficiaries of the CARP. In December 1993, the APT offered the entire property for sale to the public despite the existence of the CLOAs. Bellevue Properties, Inc. (Bellevue) won the public bidding that ensued. It later assigned to the Manila Southcoast Development Corp. (MSDC) its right to purchase the Hacienda and subrogated to MSDC all its rights, claims, and benefits under the DAR-APT agreement. 3
In 1995, MSDC filed an adverse claim over the Hacienda before the Registry of Deeds of Nasugbu, Batangas, and was able to register 10 parcels thereof under its name. 4 Thereafter, MSDC filed a Petition to the Provincial Agrarian Reform Adjudication Board (PARAD) seeking the cancellation of CLOAs issued to the farmers. The Petition was then elevated to the Regional Agrarian Reform Adjudication Board (RARAD). 5
Before the RARAD could conduct any hearing on the case, however, several farmer-beneficiaries entered into amicable settlements with MSDC by executing waivers of their rights. On joint motion of MSDC and the farmer-beneficiaries concerned, the DAR regional adjudicator issued three Partial Summary Judgments in January and June 1996 cancelling a total of 13 CLOAs and reverting to MSDC the ownership of the lands covered therein. 6
Fil-Estate Properties, Inc. (FEPI) entered into a Memorandum of Agreement with MSDC and Carmona Realty, according to which it would develop the 10 parcels of land covered by the CLOAs that were cancelled in the First Partial Summary Judgment. 7 FEPI filed a Petition 8 to exclude the property from CARP coverage on the ground that the land was found to have an average slope of 18%, and that there was no semblance of agricultural development in the area. 9
When the DAR Region IV Director issued the Order dated 26 December 1996 granting the FEPI petition, the affected farmer-beneficiaries filed an appeal 10 to the DAR Secretary. In particular, they questioned the exclusion of Lots 5, 6, 11, 12, 13, 15, 16, and 19.
As the complaints of the farmers affected by the CLOA cancellations and exclusion Order grew, the government formed a fact-finding mission, then a task force, and lastly an inter-agency committee that separately looked into the matter. 11
After a careful study of the findings and recommendations of the investigation teams and the various motions and pleadings of the parties, the DAR Secretary issued the Order dated 25 March 1998 resolving the farmer-beneficiaries' appeal.
G.R. No. 152797
FEPI filed a Petition for Partial Review of the DAR Secretary's Order with the CA. FEPI claimed that the Secretary erred in (1) not finding that the 10 parcels of land, having been decreed to be within a tourist zone prior to 1988, were not subject to the CARL; (2) finding that there were portions of the 10 parcels subject to the CARL; (3) awarding portions of the properties to persons who did not appeal; and (4) deciding on matters not in issue and beyond modification. 12
In its Decision 13 dated 26 March 2002, the CA denied the Petition and affirmed in toto the Order of the DAR Secretary. Hence, the recourse of FEPI to this Court.
G.R. No. 189315
Paulino Reyes, et al. appealed the DAR Secretary's Order before the Office of the President (OP). When the OP denied the appeal, they filed a Petition for Review with the CA. They argued that the Executive Secretary committed an error by (1) stating that the cancellation of the 10 CLOAs was not an issue in the case; (2) stating that only 1,219.09 hectares of the Hacienda were involved in the case; (3) finding that the 10 parcels of land sought to be excluded were undeveloped for agriculture and should therefore be exempt from CARP; (4) finding that the assailed Order did not undermine the CARP; (5) finding that failure to inform the farmers affected by the proceedings at the regional level did not render the Order of the Regional Director invalid; (6) finding that the farmers were afforded due process during the appeal before the Office of the DAR Secretary; (7) not ruling that the property was agricultural in character and should therefore be covered under the CARL; and (8) ruling that a property should be covered under the CARL not only because it was agricultural in character, but also because it was agriculturally developed. 14
In its Decision 15 dated 27 February 2009, the CA affirmed in toto the Decision dated 5 July 2000 of the OP. It also denied petitioners' Motion for Reconsideration in a Resolution dated 25 August 2009. Hence, the recourse of Paulino Reyes, et al. to this Court.
G.R. No. 200684
Petitioners in this case are owners of several parcels of agricultural lands in the Hacienda covered by CLOAs cancelled in the Order dated 10 March 1998 of the RARAD, which they appealed to the DARAB. 16 When the DARAB denied the appeal 17 and the subsequent Motion for Reconsideration, petitioners brought the case to the CA. 18
The CA affirmed the Decision of the DARAB. 19 Hence, the recourse of petitioners to this Court. SDHTEC
CONSOLIDATION OF CASES
Upon Motion of Paulino Reyes, et al., the Court issued a Resolution 20 dated 15 March 2010 consolidating G.R. No. 189315 with G.R. No. 152797.
On 29 August 2012, the Court issued another Resolution 21 consolidating G.R. No. 189315 with G.R. No. 200684, as both involved the same antecedent facts and raised similar issues.
The consolidated cases were assigned to the present member-in-charge on 28 December 2012.
JOINT MOTION FOR PARTIAL JUDGMENT BASED
On 2 October 2014, the Court received the Joint Motion for Partial Judgment Based on Compromise Agreement in G.R. Nos. 152797 and 189315 22 dated 18 September 2014 filed by both parties.
The Joint Motion was executed by Paulino Reyes, et al. through their legal counsel, the Public Interest Law Center represented by Attys. Rachel F. Pastores and Amylyn B. Sato as the First Parties and FEPI as the Second Party. They sought to exclude from the litigation of the consolidated cases Lot 780-12 and Lot 780-13, which were covered by CLOA Nos. 4158 and 4159, respectively, and with a total land area of 212.948 hectares. 23
All farmer-beneficiaries named as parties in G.R. Nos. 152797 and 189315 were named as movants in the Joint Motion. Some of them were represented by their heirs, except for the following:
Party in both G.R. No. 152797 and G.R. No. 189315
1. Fresco Catapang
Respondents in G.R. No. 152797
1. Liberato De Joya
2. Rosita Catapang
3. Domingo P. Limboc
4. Virgilio A. Limboc
Petitioners in G.R. No. 189315
1. Sonny Catapang
2. Bayani Oriondo
3. Rexie Dingles
The so-called Heirs of Francisco Mendoza were included as parties in the Joint Motion, even if they were not among the original parties in the two Petitions.
Also named in the Joint Motion were Liberato De Joya, Jocelyn Mercado Reyes, Juan Bautista, Paulino M. Mercado, Teresita Dinglas, Heirs of Moses Carable, and Enriquito Dinglas. They were mentioned as parties who were not among those named in the pending Petitions, but who voluntarily submitted themselves to the jurisdiction of the Court for the limited purpose of seeking the approval of the Compromise Agreement.
It is expressed in the Joint Motion that the First Parties have themselves determined and represented to the Second Party that only the following have claims to the subject lots; and that these persons are waiving, renouncing, and ceding any and all rights thereto in favor of the Second Party for valuable and sufficient consideration, which has already been delivered and fully received: 24
For Lot 780-12 — (1) Antonio Buhay; (2) Mamerto Espineli; (3) Carmelita Granados; (4) Tirso Gulfan, Jr.; (5) Heirs of Avelino Pastor, represented by Felipe G. Pastor; (6) Heirs of Benjamin Piliin, represented by Hermie M. Piliin; (7) Felix Sobremonte; and (8) Heirs of Egliceria Sobremonte, represented by Dionisio Sobremonte.
For Lot 780-13 — (1) Adelaida S. Bayani; (2) Elmer Bayani; (3) Heirs of Jacinto Cabalag, represented by Lauriana Cabalag; (4) Heirs of Pascual Destreza, represented by Eulogia D. Sobremonte; (5) Ernesto Sobremonte; and (6) Nicasio Tinamisan.
Given this development, it is recommended that the Court take action on the Joint Motion submitted, even if the principal pleadings in these consolidated cases are not yet ripe for decision. This recommendation is being made for the purpose of enabling the parties to move on to the point at which a settlement could be reached amicably without affecting the issues in the main Petitions.
ISSUE
Whether or not the Joint Motion for Partial Judgment Based on Compromise Agreement should be granted.
DISCUSSION
A compromise agreement is a contract between two or more persons, who, for the purpose of preventing or putting an end to a lawsuit, adjust their difficulties by mutual consent in the manner that they both agree on, and that each party prefers, over the hope of gaining, which is, however, balanced by the danger of losing. 25 If not contrary to law, morals, or public policy, the agreement is valid and enforceable between them. 26
The instant Joint Motion involves a judicial compromise, as the agreement therein intends to partially resolve the herein pending litigations between the parties. To have the force and effect of a judgment, this judicial compromise must be approved by the court in which the litigation pends, and compliance with the terms of the agreement must be decreed. 27 A judicial compromise is likewise circumscribed by the rules of procedure. 28 Thus, before approving the judicial compromise, it behooves the Court to strictly scrutinize the agreement to ensure that it does not go against laws, morals, public policy, and rules. AScHCD
The Joint Motion contained the Compromise Agreement said to have been entered into by the parties. Conspicuously, it did not contain the signature of the parties themselves, but only those of their respective counsel. As the Compromise Agreement is deemed a contract, it is required to have these three essential elements: (1) consent; (2) object certain, which is the subject matter of the contract; and (3) cause of the obligation, which is established. 29 Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause that are to constitute the contract. 30 It is usually evidenced by the signature of the parties therein. The signatures of the parties, particularly of those named as First Parties, in the Compromise Agreement, are crucial considering that (1) although the rights involved pertain to only a few of them, the renunciation of these rights in favor of the other party could affect the interests of all those who remain parties in the pending Petitions; and (2) several of the names in the Joint Motion are not among the original parties to the cases. Related to the second point, there is no showing or proof of any proper manifestation or motion substituting those original parties who have already presumably died with their heirs, and the misspelling of some names could raise doubts as to the identities of the parties.
As mentioned, only the respective counsel of the parties signed the Joint Motion containing the Compromise Agreement. While lawyers may enter into a compromise agreement on behalf of their client, they may not do so, however, without a special authority from the latter. 31 In Lim Pin v. Liao Tan, 32 the Court explained:
The requirements of a special power of attorney in Article 1878 of the Civil Code and of a special authority in Rule 138 of the Rules of Court refer to the nature of the authorization and not its form. The requirements are met if there is a clear mandate from the principal specifically authorizing the performance of the act. As early as 1906, this Court in Strong v. Gutierrez-Repide (6 Phil. 680) stated that such a mandate may be either oral or written, the one vital thing being that it shall be express. And more recently, We stated that, if the special authority is not written, then it must be duly established by evidence:
. . . the Rules require, for attorneys to compromise the litigation of their clients, a special authority. And while the same does not state that the special authority be in writing the Court has every reason to expect that, if not in writing, the same be duly established by evidence other than the self-serving assertion of counsel himself that such authority was verbally given him. (Home Insurance Company vs. United States Lines Company, et al., 21 SCRA 863; 866; Vicente v. Geraldez, 52 SCRA 210; 225).
A perusal of the Joint Motion yielded no special authority — written or otherwise duly established by evidence — from the parties to their counsel with respect to the execution of the Compromise Agreement. The agreement is thus rendered unenforceable, yet capable of being ratified. 33
The last sentence of the 11th paragraph of the Compromise Agreement states that "[e]ach of the First Parties further confirms and warrants that any marital consent necessary for the execution of this Agreement and Joint Motion for Partial Judgment Based on Compromise had been secured." It would not suffice that marital consent is merely guaranteed by the parties to the Compromise Agreement as Article 124 of the Family Code requires that a spouse's disposition or encumbrance of a conjugal property must be with the authority of the court or the written consent of the other spouse; otherwise such action shall be void.
The Joint Motion by the parties, therefore, cannot be given due course until the Compromise Agreement contained therein is made fully compliant with the requirements set forth under the law and the rules.
In this regard, the Court resolves to require the parties to do as follows:
(1) Either submit a compromise agreement signed by themselves or present one executed and signed for them by their respective counsel within thirty (30) days from notice hereof, and the agreement must include a special authority — written or otherwise duly established by evidence — for their counsel to do so as required by the law and the rules;
(2) Include in the Joint Motion for Partial Judgment Based on Compromise Agreement ALL the parties to the two pending Petitions who accede to the filing of the motion, with their names correctly spelled; and if one is substituted by one's heirs or by a person authorized by the heirs, a manifestation of the substitution in court must be included;
(3) Include as attachment to the Compromise Agreement the authority from the court or the written consent of the spouses or of those married parties who are disposing of their rights to the subject lands and include, as well, all other documents mentioned therein.
SO ORDERED."PEREZ, J., on official business; VELASCO, JR., J., acting member per S.O. No. 2253 dated October 14, 2015.
Very truly yours,
(SGD.) LIBRADA C. BUENADeputy Division Clerk of Court
Footnotes
1. Rollo (G.R. No. 152797), p. 10.
2. Id.
3. Id. at 11.
4. Rollo (G.R. No. 189315), pp. 24-25.
5. Id. at 25-26.
6. Rollo (G.R. No. 152797), p. 11.
7. Rollo (G.R. No. 189315), pp. 217-233.
8. Id. at 251-254.
9. Rollo (G.R. No. 152797), p. 11.
10. Rollo (G.R. No. 189315), pp. 270-272.
11. Rollo (G.R. No. 152797), pp. 11-15.
12. Id. at 16.
13. Id. at 8-24.
14. Rollo (G.R. No. 189315), pp. 83-85.
15. Id. at 79-90.
16. Rollo (G.R. No. 200684), p. 14.
17. Id.
18. Id. at 15.
19. Id.
20. Rollo (G.R. No. 189315), p. 767.
21. Rollo (G.R. No. 200684), p. 492.
22. Id. at 837-850.
23. Id.
24. Id. at 841-842.
25. Rovero v. Amparo, 91 Phil. 228 (1952).
26. Municipal Board of Cabanatuan City v. Samahang Magsasaka, Inc., 159 Phil. 493 (1975).
27. AFP Mutual Benefit Association, Inc. v. Court of Appeals, 370 Phil. 150 (1999), citing Domingo v. Court of Appeals, 255 SCRA 189 (2001) and National Electrification Administration v. Court of Appeals, 280 SCRA 199 (1997).
28. Id.
29. Art. 1318, New Civil Code.
30. Art. 1319, New Civil Code.
31. Article 1878, Civil Code; and Rule 138, Section 23, Rules of Court.
32. 200 Phil. 685, 693 (1982).
33. Id., citing Dungo v. Lopena, 6 SCRA 1007 (1962).