EXECUTION OF COMPROMISE AGREEMENT; DELAY BY ONE PARTY

JUSTIFIES EXECUTION
MANILA INTERNATIONAL AIRPORT AUTHORITY VS. ALA INDUSTRIES
CORPORATION
G.R. No. 147349. February 13, 2004
Facts: The contract for the structural repair and waterproofing of the IPT and ICT
building of the NAIA airport was awarded, after a public bidding, to respondent
ALA. Respondent made the necessary repair and waterproofing.
After submission of its progress billings to the petitioner, respondent received
partial payments. Progress billing remained unpaid despite repeated demands by
the respondent. Meanwhile petitioner unilaterally rescinded the contract on the
ground that respondent failed to complete the project within the agreed completion
date.
Respondent objected to the rescission made by the petitioner and reiterated its
claims. The trial court directed the parties to proceed to arbitration. Both parties
executed a compromise agreement and jointly filed in court a motion for judgment
based on the compromise agreement. The Court a quo rendered judgment
approving the compromise agreement.
For petitioners failure to pay within the period stipulated, respondent filed a
motion for execution to enforce its claim. Petitioner filed a comment and attributed
the delays to its being a government agency. The trial court denied the respondents
motion. Reversing the trial court, the CA ordered it to issue a writ of execution to
enforce respondents claim. The appellate court ratiocinated that a judgment
rendered in accordance with a compromise agreement was immediately executory,
and that a delay was not substantial compliance therewith.
Issues: 1) Whether or not decision based on compromise agreement is final and
executory.
2) Whether or not delay by one party on a compromise justifies execution.
Held: 1) A compromise once approved by final orders of the court has the force of
res judicata between the parties and should not be disturbed except for vices of
consent or forgery. Hence, a decision on a compromise agreement is final and
executory. Such agreement has the force of law and is conclusive between the
parties. It transcends its identity as a mere contract binding only upon the parties
thereto, as it becomes a judgment that is subject to execution in accordance with the
Rules. Judges therefore have the ministerial and mandatory duty to implement and
enforce it.
2. The failure to pay on the date stipulated was clearly a violation of the Agreement.
Thus, non-fulfillment of the terms of the compromise justified execution. It is the
height of absurdity for petitioner to attribute to a fortuitous event its delayed
payment. Petitioners explanation is clearly a gratuitous assertion that borders
callousness.

BPI vs. Casa Montessori Internationale, G. R.

No. 149454 & 149507, May 28, 2004
Post under case digests, Civil Law at Tuesday, January 31, 2012 Posted by Schizophrenic Mind

Facts: CASA Montessori International opened an account

with BPI, with CASAs President as one of its authorized
signatories. It discovered that 9 of its checks had been
encashed by a certain Sonny D. Santos whose name turned
out to be fictitious, and was used by a certain Yabut, CASAs
external auditor. He voluntarily admitted that he forged the
signature and encashed the checks.
RTC granted the Complaint for Collection with Damages
against BPI ordering to reinstate the amount in the account,
with interest. CA took account of CASAs contributory
negligence and apportioned the loss between CASA and
BPI, and ordred Yabut to reimburse both.
BPI contends that the monthly statements it issues to its
clients contain a notice worded as follows: If no error is
reported in 10 days, account will be correct and as such, it
should be considered a waiver.
Issue:Whether or not waiver or estoppel results from failure
to report the error in the bank statement
Held: Such notice cannot be considered a waiver, even if
CASA failed to report the error. Neither is it estopped from
questioning the mistake after the lapse of the ten-day
period.
This notice is a simple confirmation or "circularization" -- in
accounting parlance -- that requests client-depositors to
affirm the accuracy of items recorded by the banks. Its

purpose is to obtain from the depositors a direct

corroboration of the correctness of their account balances
with their respective banks.
Every right has subjects -- active and passive. While the
active subject is entitled to demand its enforcement, the
passive one is duty-bound to suffer such enforcement. On
the one hand, BPI could not have been an active subject,
because it could not have demanded from CASA a
response to its notice. CASA, on the other hand, could not
have been a passive subject, either, because it had no
obligation to respond. It could -- as it did -- choose not to
respond.
Estoppel precludes individuals from denying or asserting, by
their own deed or representation, anything contrary to that
established as the truth, in legal contemplation. Our rules on
evidence even make a juris et de jure presumption that
whenever one has, by ones own act or omission,
intentionally and deliberately led another to believe a
particular thing to be true and to act upon that belief, one
cannot -- in any litigation arising from such act or omission -be permitted to falsify that supposed truth.
In the instant case, CASA never made any deed or
representation that misled BPI. The formers omission, if
any, may only be deemed an innocent mistake oblivious to
the procedures and consequences of periodic audits. Since
its conduct was due to such ignorance founded upon an
innocent mistake, estoppel will not arise. A person who has
no knowledge of or consent to a transaction may not be
estopped by it. "Estoppel cannot be sustained by mere
argument or doubtful inference x x x." CASA is not barred

from questioning BPIs error even after the lapse of the

period given in the notice.