FIRST DIVISION
[G.R. No. 189604. June 6, 2019.]
JIMMY TIU, ANSON GONZALO, PAUL ONG, JASON TIU AND LONG LONG MANUFACTURING CORPORATION, petitioners, vs.SAMUEL SY, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution datedJune 6, 2019which reads as follows:
"G.R. No. 189604 (Jimmy Tiu, Anson Gonzalo, Paul Ong, Jason Tiu and Long Long Manufacturing Corporation v. Samuel Sy). — We reiterate the settled rule that a criminal case cannot be the subject of a compromise agreement or a joint motion to dismiss which partakes of a nature of a compromise agreement.
This case originated from a complaint 1 filed by respondent Samuel Sy (respondent) against petitioners Jimmy Tiu, Anson Gonzalo (Gonzalo), Paul Ong (Ong), Jason Tiu and Long Long Manufacturing Corporation (collectively, petitioners) for annulment of document, accounting, determination of compensation, etc. Respondent alleged that: (1) sometime in December of 1988, he, together with petitioners Jimmy Tiu, Gonzalo and Ong, entered into the business of repacking of snack foods under the name "Longlong Repacking"; 2 (2) in 1997, they decided to register the business with the Securities and Exchange Commission; 3 (3) respondent subsequently took charge of all the operation and management aspects of the business, from securing supplies, repacking (and later manufacturing and repacking), delivery, supervision, selling and even cooking of the products; 4 (4) while there was no written agreement with regard to their compensation, the parties impliedly agreed that he will determine his own compensation for the services he rendered; 5 (5) respondent encashed checks for the compensation of his services in the same way that all the other parties did; 6 (6) sometime in 1995, he was allowed by the parties to invest an initial amount of P2 Million in the stock market, 7 which he replenished every now and then by withdrawing from the corporation's bank accounts using checks co-signed by petitioners; 8 (7) from 1995 to mid-1998, the total amount of money withdrawn were computed by petitioners to be slightly more than P3 Million; (8) petitioners confronted respondent and accused him of using the amount for his own personal purposes; (9) petitioners forced him to sign a promissory note 9 amounting to P2 Million (of which he was able to pay P1,443,241.66); 10 (10) petitioners, by threatening to take him to court, also made him sign a Deed of Assignment 11 which he was not able to read, but nevertheless signed in order to be allowed to leave petitioners' office; 12 and (11) since the purported documents were signed by mistake, occasioned by moral coercion and lack of consideration, they should be annulled/declared void and petitioners ordered to jointly and severally pay whatever is found due him under the law, including attorney's fees of P350,000.00. 13
On May 8, 2001, petitioners filed a motion to dismiss 14 on the following grounds: (1) the claim or demand has been paid, waived, abandoned or otherwise extinguished; (2) respondent has no legal capacity to sue; (3) the court has no jurisdiction over the person of the defending party; and (4) the pleading states no cause of action. 15
During the pendency of the case, petitioners discovered that respondent issued 60 checks for his own benefit, prompting petitioner Jimmy Tiu to file with the Office of the City Prosecutor of Manila a complaint for 60 counts of estafa through misappropriation. 16 The City Prosecutor of Manila, however, issued a Resolution 17 finding probable cause only with respect to four checks, and dismissed the complaint with respect to the other 56. Consequently, a criminal case for estafa docketed as Crim. Case No. 02-199518 was filed against respondent before Branch 1 of the Regional Trial Court (RTC), Manila. 18
On December 11, 2002, the parties filed with the RTC Valenzuela a Joint Motion to Dismiss 19 pursuant to a compromise agreement they allegedly arrived at. The Joint Motion to Dismiss reads:
JOINT MOTION TO DISMISS
THE PARTIES, assisted by their respective counsel, to this Honorable Court, respectfully move for the dismissal, with prejudice and without pronouncement as to costs, of the above-entitled case, particularly their respective claims/counterclaims against each other, that became the subject matter in Criminal Case No. 02-199518, pending before RTC of Manila, Branch 1 and I.S. No. 00H-39191-392508-16-00, pending before the Prosecutor's Office of Manila, on the ground that the parties hereto have already reached an amicable settlement of their differences to their mutual satisfaction. 20
On January 24, 2003, before the RTC could act on the parties' Joint Motion to Dismiss, respondent filed a motion to withdraw the joint motion. 21 According to respondent, contrary to the representation of petitioners that they will no longer pursue their claims against him, petitioners filed a petition for review with the Department of Justice (DOJ) appealing the dismissal by the Manila City Prosecutor's Office of the complaint for estafa with respect to the 56 checks. 22
On June 5, 2003, the RTC granted respondent's motion and ruled that the Joint Motion to Dismiss filed by the parties is considered withdrawn. 23 Petitioners thus filed a motion for reconsideration 24 on the following grounds: (1) the criminal complaint filed before the Manila City Prosecutor's Office and already pending before the DOJ is different and separate from the civil case in RTC; (2) the parties never intended to have the criminal cases filed before the Prosecutor's Office of Manila dismissed; and (3) the Joint Motion to Dismiss executed by the parties on December 2, 2002 partook of a perfected contract.
On May 13, 2004, the RTC reconsidered, agreeing with the petitioners that the checks subject of the petition for review with the DOJ were not included as an agreed condition of the parties in their Joint Motion to Dismiss. The RTC also agreed with petitioners that the portion of the Joint Motion to Dismiss referring to the cases which are the subject matter of the petition for review was crossed out by the parties. Respondent's complaint for annulment of documents was thus considered dismissed, terminated, and closed. 25
Aggrieved, respondent filed a motion for reconsideration of the Order dated May 13, 2004, but the same was denied. 26
On appeal, respondent contended before the Court of Appeals (CA) that he was justified in causing the withdrawal of the Joint Motion to Dismiss. He cited petitioners' bad faith in pursuing the criminal case despite the execution of an affidavit of desistance, the recantation of the complaint-affidavit and the direct testimony in open court by petitioner Jimmy Tiu. 27 Respondent explained that the crossed out portion of the Joint Motion to Dismiss was effected by petitioners' counsel (who was entrusted with the filing in court of the Joint Motion to Dismiss) without his knowledge and consent. 28 Moreover, since the Joint Motion to Dismiss has not yet been acted upon at the time he filed for its withdrawal, the same can be withdrawn on grounds of fraud, deceit, failure to comply with the terms of the agreement, error or bad faith. 29
In its Decision 30 dated April 29, 2009, the CA found that there was a meeting of the minds of the parties upon the terms and conditions of the compromise agreement in the form of a joint motion to dismiss. 31 With his filing of the motion to withdraw, however, respondent has effectively withdrawn his consent to be bound by the "compromise agreement." 32 Thus, without the element of mutual consent, there could not be a valid compromise agreement.
The CA explained that a judicial compromise, while binding between the parties upon its execution, is not executory until it is approved by the court and reduced to a judgment. 33 Since it is contrary to the mandate of the courts to insist on dismissing a case on the basis of an alleged compromise agreement when one of the parties has already signified his dissent, there is no longer any basis for the CA to dismiss, terminate, and close the case on account of a "compromise agreement" which has been repudiated by a party before approval. 34
In addition, the CA ruled that Crim. Case No. 02-199518 may not be a lawful subject of a compromise. 35
Petitioners filed a motion for reconsideration but it was denied. 36 Hence, this petition where the principal issue presented is whether the RTC Valenzuela correctly dismissed respondent's complaint for annulment of document, accounting, determination of compensation, etc.37
The RTC erred in ordering the dismissal of the case before it on the basis of the parties' Joint Motion to Dismiss.
The Joint Motion to Dismiss partook of a compromise agreement, i.e., "an agreement between two or more persons, who for preventing or putting an end to a lawsuit, adjust their difficulties by mutual consent in the manner which they agree on, and which everyone of them prefers to the hope of gaining, balanced by the danger of losing." 38 Like a compromise agreement, a Joint Motion to Dismiss must comply with the requisites and principles of contracts. Hence, it must have the concurrence of: (1) consent of the contracting parties; (2) object certain which is the subject matter of the contract; and (3) cause of the obligation which is established. 39 It must also not be contrary to law, morals, good customs, and public policy.
Here, the parties' mutual consent was shown by the signatures of respondent and petitioner Sy acting on behalf of the other petitioners. The object certain was the subject of the compromise agreement which was the dismissal of the parties' respective claims. The cause of the obligation was the parties' undertaking to withdraw their claims against each other. Respondent, however, withdrew his consent to the Joint Motion to Dismiss after its perfection. While a unilateral revocation of consent to a perfected contract is not allowed, we find that the Joint Motion to Dismiss was, in the first place, void under Article 1409 (1) of the Civil Code for having a cause or object contrary to law.
As petitioners admitted in their petition before us, the parties intended that, in exchange for respondent's dismissal of Civil Case No. 43-V-01 pending with the RTC Valenzuela, petitioners would cause the dismissal of their complaint in Crim. Case No. 02-199518 pending with the RTC Manila. 40 In Trinidad v. Office of the Ombudsman, 41 we ruled that criminal liability cannot be the subject of a compromise because a criminal case is committed against the people, and the offended party may not waive or extinguish the criminal liability that the law imposes for its commission. This explains why a compromise is not one of the grounds prescribed by the Revised Penal Code for the extinction of criminal liability. 42 Thus, regardless of whether the parties here agreed to the dismissal of Criminal Case No. 02-199518 alone or in conjunction with I.S. No. 00H-39191-392508-16-00 pending with the DOJ, such compromise of criminal liability is not allowed.
WHEREFORE, the Court of Appeals' Decision dated April 29, 2009 and Resolution dated September 23, 2009 are hereby AFFIRMED.
SO ORDERED."Carandang, J., on official leave.
Very truly yours,
(SGD.) LIBRADA C. BUENADivision Clerk of Court
Footnotes
1.Rollo, pp. 41-47.
2.Id. at 41.
3.Id. at 42.
4.Id. at 42-43.
5.Id. at 43.
6.Id.
7.Rollo, p. 44.
8.Id.
9. Records, p. 8.
10.Rollo, p. 44.
11. Records, pp. 14-15.
12.Rollo, pp. 44-45.
13.Id. at 46.
14. Records, pp. 26-31.
15.Id. at 26.
16.Id. at 74-78.
17.Rollo, pp. 362-365.
18.Id. at 366-367.
19.Id. at 48-49.
20.Id. at 48. As per the Joint Motion to Dismiss attached as Annex D of the petition, petitioners allege that the crossed-out portion was countersigned by the parties' respective counsels.
21.Id. at 54-56. The RTC Order dated June 5, 2003 states that the filing of the motion is January 24, 2003 (Id. at 57-58).
22. As noted by the Court of Appeals and based on the records, the DOJ, on November 17, 2003 initially reversed the dismissal of estafa case with respect to 56 checks and recommended that Crim. Case No. 03-221807 be filed in court (CA rollo, pp. 233-239, 240-241). However, on March 9, 2004, the said Resolution was reversed and the DOJ ordered the Prosecutor's Office of Manila to withdraw the Information (Id. at 241-244).
23.Rollo, pp. 57-58.
24. Records, pp. 170-181.
25.Rollo, pp. 59-60.
26.Id. at 61.
27. CA rollo, pp. 221-224.
28.Rollo, pp. 450-451.
29. CA rollo, p. 222.
30. Rollo, pp. 30-38.
31. Id. at 36.
32. Id. at 37.
33. Id. at 36-37, citing Abinujar v. Court of Appeals, G.R. No. 104133, April 18, 1995, 243 SCRA 531.
34. Rollo, p. 37.
35. Id.
36. Rollo, pp. 39-40.
37. Id. at 9-29.
38. Philippine National Oil Company-Energy Development Corporation (PNOC-EDC) v. Abella, G.R. No. 153904, January 17, 2005, 448 SCRA 549, 565. Italics and citation omitted.
39. Montecillo v. Reynes, G.R. No. 138018, July 26, 2002, 385 SCRA 244, 253.
40. Rollo, p. 13.
41. G.R. No. 166038, December 4, 2007, 539 SCRA 415.
42. Id. at 426.