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G.R. No. 137549 - Aurelio P. Alonzo, et al. v. Jaime and Perlita San Juan

G.R. No. 137549 - Aurelio P. Alonzo, et al. v. Jaime and Perlita San Juan

PHILIPPINE SUPREME COURT DECISIONS

SECOND DIVISION

[G.R. NO. 137549 : February 11, 2005]

AURELIO P. ALONZO and TERESITA A. SISON, Petitioners, v. JAIME AND PERLITA SAN JUAN, Respondents.

D E C I S I O N

CHICO-NAZARIO, J.:

A complaint for recovery of possession was filed by Aurelio P. Alonzo and Teresita A. Sison against Jaime and Perlita San Juan docketed as Civil Case No. Q-96-29415 before the Regional Trial Court (RTC) of Quezon City, Branch 77. In their Complaint, plaintiffs alleged that they are the registered owners of a parcel of land located at Lot 3, Block 11, M. Agoncillo St., Novaliches, Quezon City, with an area of four hundred twenty-five (425) square meters, more or less, evidenced by Transfer Certificate of Title (TCT) No. N-152153 issued by the Register of Deeds of Quezon City. At around June of 1996, plaintiffs discovered that a portion on the left side of the said parcel of land with an area of one hundred twenty-five (125) square meters, more or less, was occupied by the defendants for more than a year, without their prior knowledge or consent. A demand letter was sent to the defendants in August of 1996 requiring them to vacate the property but they refused to comply; hence, the filing of the Complaint. During the pendency of the case, the parties agreed to enter into a Compromise Agreement which the trial court approved in a Judgment by Compromise dated 07 May 1997.1

Alleging that they failed to abide by the provisions of the Compromise Agreement by their failure to pay the amounts due thereon, plaintiffs sent a letter demanding that the defendants vacate the premises.2 Plaintiffs subsequently filed an Amended Motion for Execution.3 Acting on the motion, the trial court4 issued its Order dated 11 August 19985 now assailed before this Court.

The Order reads:

Before the Court for resolution is the plaintiffs' "Amended Motion For Execution," dated July 7, 1998.

Records show that, on May 5, 1997, the parties herein together with spouses Elbert and Susan Manalili, assisted by Atty. Victor Rey Santos, submitted a "Compromise Agreement," which was approved by the Court on May 7, 1997. On July 9, 1998, the plaintiff, through counsel, filed an "Amended Motion For Execution," praying, pursuant to the Judgment by Compromise Agreement, dated May 7, 1997, for the issuance of a writ of execution for the ejectment of the defendants-spouses Jaime and Perlita San Juan and of the spouses Elbert and Susan Manalili from the property in question, and for the payment to the plaintiff of the sum of P50,000.00 as attorney's fees, and another sum of P50,000.00 as moral damages.

In the "Compromise Agreement," it was expressly stipulated that should any two of the installments of the purchase price be not paid by the defendants, the said agreement (Compromise Agreement) shall be considered null and void.

The plaintiffs expressly admitted in their amended motion for execution that the defendants failed to pay the installments for July 31, 1997 and August 31, 1997 on their due dates; hence, the "Compromise Agreement" submitted by the parties became null and void. The Court, therefore, has no basis to direct the issuance of a writ of execution.

WHEREFORE, premises considered, the plaintiffs' amended motion for execution should be, as it is hereby, denied.

Plaintiffs filed a motion for reconsideration6 which the defendants opposed.7 Maintaining that the trial court correctly declared that the compromise agreement has been rendered null and void, defendants likewise remonstrated that they have fully paid their obligation to the plaintiffs.

In an Order of the trial court dated 17 February 1999, plaintiffs' motion for reconsideration was denied in this wise:

After a careful consideration of the respective contentions of the parties, the Court finds no cogent reason to disturb its Order of August 11, 1998.

It is the well-considered opinion of this court that there is no need to interpret the provisions of the "Compromise Agreement" entered into by the parties, because paragraph 11 thereof clearly states that: "Should any two (2) of the subsequent amounts be not paid on the date fixed in the foregoing schedule, then this Agreement shall be considered as automatically and without any further formality null and void and the amount of P44,117.65 initially paid hereunder shall be considered as penalty as well as rentals and forfeited in favor of the plaintiffs."

The "Compromise Agreement" submitted by the parties having been rendered null and void, the Court has no basis to direct the issuance of a writ of execution.

WHEREFORE, premises considered, plaintiffs' motion for reconsideration is hereby denied.8

Understandably aggrieved, plaintiffs (petitioners) filed directly to this Court the instant Petition for Review on Certiorari to assail the Orders of the trial court dated 11 August 1998 and 17 February 1999 arguing that:

The instant petition ought to be allowed and given due course by this Honorable Court because the aforementioned Orders dated August 11, 1998 and February 17, 1999 are both grossly erroneous, invalid and unlawful as the same directly contravene and violate the express provisions of paragraph 12 of the Judgment by Compromise Agreement.9

In a resolution rendered by this Court dated 23 June 1999, defendants (respondents) were required to Comment on the petition.10 Respondents submitted their compliance on 11 October 1999.11 Per the Court's resolution dated 18 October 1999,12 petitioners were required to file their Reply which they did on 03 December 1999.13

On 14 June 2000, this Court resolved to give due course to the petition and required the parties to submit their respective memorandum within thirty days from notice.14 The petitioners and respondents submitted their memorandum on 01 September 200015 and 06 April 2001,16 respectively.

The jurisdiction of this Court in a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court is limited to reviewing only errors of law17 and factual issues are not within its province18 unless the factual findings complained of are devoid of support by the evidence on record or the assailed judgment is based on misapprehension of facts.

It is at once apparent that the determination of the correctness of the trial court's interpretation of the provisions of the Compromise Agreement involves a question of law.19 However, the claim of payments raised by the respondents entails a review of the evidences on record which is not proper in a Petition for Review under Rule 45. Be that as it may, the Court in the exercise of its discretion, may set aside procedural rules and proceed to determine and resolve factual matters20 to put all issues to rest and avoid further delay. With this, we deem it necessary to first settle the issue of payment.

The terms and conditions of the Compromise Agreement are quoted as follows:

1. The Spouses Jaime San Juan and Perlita San Juan as well as the Spouses Elbert and his wife, Susan Y. Manalili have occupied and continue to occupy a portion consisting of one hundred twenty-five (125) square meters, more or less, of that parcel of land identified as Lot 3, Block 11 of the consolidation and subdivision plan PCS-4682, located along M. Agoncillo Street, Dona Rosario Heights, Nova Proper, Novaliches, Quezon City, which is owned by and registered in the names of the plaintiffs under Transfer Certificate of Title No. N-152153 issued by the Registry of Deeds for Quezon City;

2. Spouses Jaime and Perlita San Juan are occupying the front area, while Spouses Elbert and Susan Manalili are occupying the rear area of the aforesaid 125 square meters portion of Plaintiffs' parcel of land;

3. Said parties have occupied said portion of the Plaintiffs' parcel of land without the knowledge or consent of the Plaintiffs;

4. By way of amicably settling the dispute in the instant case, the said parties have offered to purchase the said portion of Plaintiffs' parcel of land being occupied by them, to which the Plaintiffs had acceded, under the following terms and conditions:

A. The purchase price for the said portion consisting of one hundred twenty-five (125) square meters, more [or] less, shall be Two Hundred Thirty Five Thousand Two Hundred Ninety-Four Pesos (P235,294.00), Philippine Currency;

5. The aforesaid purchase price shall be paid in the following manner:

A. The sum of P44,117.65, Philippine Currency, upon the signing of this Agreement;

b. The sum of P44,117.65, Philippine Currency, on or before May 31, 1997;

c. The sum of P29,411.75, Philippine Currency, on or before June 30, 1997;

d. The sum of P58,823.50, Philippine Currency, on or before July 31, 1997;

e. The sum of P58,823.50, Philippine Currency, on or before August 31, 1997.

6. Upon full payment of the said purchase price, the herein Plaintiffs shall execute in favor of the Spouses Elbert Manalili and Susan Manalili a Deed of Absolute Sale over the aforementioned portion subject of the instant Agreement;

7. The said Spouses Elbert Manalili and Susan Manalili shall take care of all expenses and taxes corresponding to the said transaction, such as the capital gains tax, documentary stamps tax, notarial fees, registration fees and other expenses of the said Deed of Absolute Sale, the registration thereof with the Registry of Deeds and the issuance of a new certificate of title in favor of said spouses, as well [as] the expenses for the relocation and subdivision survey of the said parcel of land and the real estate taxes due on the said property starting the year 1997;

8. It is agreed that the title to the said portion of Plaintiffs' parcels of land shall remain with the Plaintiffs and shall pass to and be transferred to the Spouses Elbert Manalili and Susan Manalili only upon complete payment of the full purchase price agreed upon;

9. Before the purchase price shall have been paid in full, said Spouses Elbert Manalili and Susan Manalili hereby agree not to alienate, encumber, assign or otherwise dispose in any manner of their rights under this Agreement without the prior written consent of the Plaintiffs;

10. Should any two (2) of the subsequent amounts be not paid on the date fixed in the foregoing schedule, then this Agreement shall be considered as automatically and without any further formality null and void and the amount of P44,117.65 initially paid hereunder shall be considered as penalty as well as rentals and forfeited in favor of the Plaintiffs;

11. In the event of such non-payment, herein Defendants Jaime and Perlita San Juan and Spouses Elbert Manalili and Susan Manalili hereby agree to vacate and surrender the possession of said portion of the parcel of land being occupied by them within thirty (30) days upon demand by the Plaintiffs;

12. Should any of said parties fail and/or refuse to vacate and surrender the said parcel of land being occupied by them to the Plaintiffs, the latter shall be entitled to obtain immediately from this Honorable Court the corresponding writ of execution for the ejectment of the said party or parties, or other persons occupying said property for and on their behalf or upon their authority from the said property in question.21

Indubitably, the schedule of payments as contained in the Compromise Agreement provides that initial payment in the amount of P44,117.65 is due on 07 May 1997, the date when the agreement was signed. Respondents, to prove payment, showed Equitable Bank Check No. 1050783228 payable to Petitioner Aurelio Alonzo, in the amount of P100,000 issued by a certain Cirila C. Cruz and dated 23 September 1994.22 A perfunctory examination of the check shows that it bears a date so much earlier than the time the Compromise Agreement took place on 14 May 1997. Necessarily, in this instance, the claim of payment is inconsequential and cannot be credited in favor of the respondents.

The next payment for the same amount of P44,117.65 was due on or before 31 May 1997, a little less than a month after the date of the Compromise Agreement. To prove payment, respondents presented a check dated 30 April 1997,23 payable to Petitioner Aurelio Alonzo, again issued by a certain Cirila Cruz for the amount of P150,000. The voucher particulars state that "the same is for partial payment and/or 1st installment re: Compromise Agreements entered by Sps. Antonio and Leonor B. Lazaro and Engr. and Mrs. Elbert Manalili and Mr. And Mrs. Jaime San Juan (respondents herein) re: Lot 3, Block 11, Q. C."

The next check dated 24 June 199724 again issued by Cirila Cruz in the amount of P150,000 payable to Aurelio P. Alonzo provides in the cash voucher particulars that the same is an additional partial payment due on 31 May 1997 "Re: Compromise Agreement entered by the Sps. Lazaro, Manalili and San Juan."

Another check again issued by Cirila Cruz dated 29 July 199725 in the amount of P100,000 payable to Mr. Aurelio P. Alonzo, is accompanied by the same voucher particulars, i.e., it is an additional partial payment of the Compromise Agreement entered into by the spouses Antonio and Leonor Lazaro and Mr. and Mrs. Elbert Manalili and Mr. and Mrs. Jaime San Juan.

A subsequent check26 again issued by Cirila Cruz dated 24 December 1997, payable to Aurelio Alonzo in the amount of P50,000 is accompanied by a receipt stating that the amount "RECEIVED from Cirila C. Cruz is an additional partial payment for the account of Perlita San [Juan] and Mr. and Mrs. Lazaro."

Finally, a check27 this time unaccompanied by any voucher or receipt, again issued by Cirila Cruz, payable to cash in the amount of P25,000 was dated 25 July 1998, way past the period to make payments as specified in the Compromise Agreement for which reason it cannot be credited to the account of the respondents.

The law requires in civil cases that the party who alleges a fact has the burden of proving it.28 Section 1, Rule 131 of the Rules of Court provides that the burden of proof is the duty of a party to prove the truth of his claim or defense, or any fact in issue by the amount of evidence required by law.29 In this case, the burden of proof is on the respondents because they allege an affirmative defense, namely payment.30 As a rule, one who pleads payment has the burden of proving it.31 Even where the plaintiff must allege nonpayment, the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove nonpayment. The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment.32

In Jimenez v. NLRC,33 this Court held that where one, sued for a debt, admits that the debt was originally owed, and pleads payment in whole or in part, it is incumbent upon him to prove such payment. Indeed, though the plaintiff may admit that some payments have been made, this admission does not change the burden of proof. The defendant still has the burden of establishing payments beyond those admitted by the plaintiff.

In herein case, the respondents failed to discharge their burden of proving payment.

Apropos is the rule so well-settled that a receipt of payment is the best evidence of the fact of payment.34 In Monfort v. Aguinaldo,35 the receipts of payment, although not exclusive, were deemed to be the best evidence.

A receipt is a written and signed acknowledgment that money has or goods have been delivered,36 while a voucher is a documentary record of a business transaction.37 The references to alleged check payments in the vouchers presented do not vest them with the character of receipts.

It should be noted that a voucher is not necessarily an evidence of payment. It is merely a way or method of recording or keeping track of payments made. It must be supported by an actual payment of cash duly receipted for as is customary among businessmen or the issuance of a check subsequently encashed.38 The law provides that the delivery of mercantile documents including checks "shall produce the effect of payment only when they have been cashed."39 In this case, it was not shown that the checks were encashed by the petitioners.

Even assuming that payments were made, it has not been shown to the full satisfaction of this Court whether the payments were made specifically to satisfy respondents' obligation under the Compromise Agreement, nor were the circumstances under which the payments were made explained, taking into consideration the conditions of the Compromise Agreement. The dates, amounts and the person issuing the checks, which respondents claim were made in their behalf and were issued in satisfaction of their obligation, do not really reconcile with the dates and amount due as to convince this Court that the payments were really for the respondents' obligation under the Compromise Agreement as intended. The checks were all issued by a certain Cirila Cruz whose identity and relation to them the respondents never explained and each check reflected an amount so much greater than what was due from the respondents. Respondents never endeavored to rationalize or explain the disparity.

Verily, an obligation may be extinguished by payment.40 However, two requisites must concur: (1) identity of the prestation, and (2) its integrity. The first means that the very thing due must be delivered or released; and the second, that the prestation be fulfilled completely.41 In this case the creditor must "receive and acknowledge full payment" from the debtor.42 No such acknowledgment nor proof of full payment was shown to the satisfaction of the court. For this reason, claim of payment made by the respondents must fail. What was due from the respondents was the payment of a sum of money. Not only that, respondents must also pay the amount due in its entirety for their obligation to be considered extinguished by payment.

The issue of payment having been put to rest, we now proceed to determine the correctness of the trial court's interpretation of the compromise agreement entered into by the parties.

Compromise agreements are contracts, whereby the parties undertake reciprocal obligations to resolve their differences43 thus avoiding litigation,44 or put an end to one already commenced.45

It is a cardinal rule in contract interpretation that the ascertainment of the intention of the contracting parties is to be discharged by looking to the words they used to project that intention in their contract, that is, all the words, not just a particular word or two, and words in context, not words standing alone.46

Article 1374 of the Civil Code requires that the various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that sense which may result from all of them taken jointly.47

In this case, we find it was error on the part of the trial court to have interpreted the compromise agreement in the manner it has done so.

Applying the rule that the various stipulations of a contract should be taken together, the trial court should have interpreted paragraph 10, in relation to paragraphs 11 and 12. If we were to follow the interpretation of the trial court, the respondents would only have to default in the payment of their obligation and the contract would be rendered null and void to their benefit and advantage leaving the petitioners without any recourse at all. This surely was not what was envisioned when the parties entered into the compromise. The Court itself would not have approved the same for being contrary to law, morals and public policy. Certainly, to sustain the interpretation of the trial court would be to sanction an absurdity as it would go against the very rationale of entering into a Compromise Agreement, i.e., to put an end to litigation. If we were to follow the argument of the trial court to its logical conclusion, then it would mean that the parties would have to go back to square one and re-litigate what they had already put to rest when they entered into the subject Compromise Agreement.

This is a good time as any to re-echo the fact that reciprocal concessions are the very heart and life of every compromise agreement. By the nature of a compromise agreement, it brings the parties to agree to something which neither of them may actually want, but for the peace it will bring them without a protracted litigation. Essentially, the parties to it have to bend a little or else break in the process.48 In Raneses v. Teves,49 it was stated "it is the trial court's duty to examine and study the compromise agreement with utmost attention and caution and to assure itself that the stipulations thereof are valid and proper so as to avoid misunderstanding and controversies. A casual or superficial perusal of the compromise agreement should be eschewed." A watchful fidelity to this doctrinal yardstick has always been enjoined to arrive at a peaceful settlement of a mired justiciable issue.

In the same vein, the principle of autonomy of contracts must be respected.50 Respondents' contract with the petitioners have the force of law between them.51 Respondents are thus bound to fulfill what has been expressly stipulated therein.52 Items 11 and 12 of the Compromise Agreement provided, in clear terms, that in case of failure to pay on the part of the respondents, they shall vacate and surrender possession of the land that they are occupying and the petitioners shall be entitled to obtain immediately from the trial court the corresponding writ of execution for the ejectment of the respondents. This provision must be upheld, because the Agreement supplanted the Complaint itself. When the parties entered into a Compromise Agreement, the original action for recovery of possession was set aside and the action was changed to a monetary obligation. Once approved judicially, the Compromise Agreement can not and must not be disturbed except for vices of consent or forgery.53

Courts do not have the power to relieve parties of obligations voluntarily assumed.54

For failure of the respondents to abide by the judicial compromise, petitioners are vested with the absolute right under the law and the agreement to enforce it by asking for the issuance of the writ of execution. Doctrinally, a Compromise Agreement is immediately final and executory.55 Petitioners' course of action, asking for the issuance of a writ of execution was in accordance with the very stipulation in the agreement that the lower court could not change.

In Abinujar v. Court of Appeals,56 this Court even went further and declared that the nonfulfillment of the terms and conditions of a Compromise Agreement approved by the court justifies execution thereof and the issuance of the writ for the said purpose is the court's ministerial duty enforceable by Mandamus.

Wherefore, the Petition is GRANTED. The Orders of the Regional Trial Court, Branch 77, Quezon City, dated 11 August 1998 and 17 February 1999 are hereby declared null and void and set aside and a new one entered directing the trial court to issue the writ of execution prayed for by the Petitioners in accordance with the Compromise Agreement. With costs.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

Endnotes:


1 Annex B, Rollo, pp. 28-30.

2 Annex A, Rollo, pp. 38-39.

3 Annex C, Rollo, pp. 31-35.

4 Presided by Judge Vivencio S. Baclig.

5 Annex D, Rollo, p. 42.

6 Annex E, Rollo, pp. 43-47.

7 Annex F, Rollo, pp. 48-50.

8 Rollo, p. 71.

9 Rollo, p. 16.

10 Rollo, p. 74.

11 Rollo, pp. 82-86.

12 Rollo, p. 87.

13 Rollo, pp. 88-90.

14 Rollo, p. 91.

15 Rollo, pp. 92-101.

16 Rollo, pp. 105-109.

17 Section 1, Rule 45, Revised Rules of Court; Mirasol v. Court of Appeals, G.R. No. 128448, 01 February 2001, 351 SCRA 44.

18 Congregation of the Religious of the Virgin Mary v. Court of Appeals, G.R. No. 126363, 26 June 1998, 291 SCRA 385.

19 Korea Exchange Bank v. Filkor Business Integrated, Inc., G.R. No. 138292, 10 April 2002, 380 SCRA 381.

20 Producers Bank of the Philippines v. Court of Appeals, G.R. No. 111584, 17 September 2001, 365 SCRA326.

21 Rollo, pp. 28-30.

22 Annex B, Rollo, p. 112.

23 Rollo, p. 53.

24 Rollo, p. 54.

25 Rollo, p. 55.

26 Rollo, p. 56.

27 Rollo p. 57.

28 Trans-Pacific Industrial Supplies, Inc. v. Court of Appeals, G.R. No. 109172, 19 August 1994, 235 SCRA 494.

29 Sambar v. Levi Strauss & Co., G.R. No. 132604, 06 March 2002, 378 SCRA 364.

30 Paras, Rules of Court 448 (Third Edition, 2000); Rule 6, Section 5(b), Revised Rules of Court.

31 Pinon v. Osorio, 30 Phil. 365, cited in PNB v. Court of Appeals, G.R. No. 108630, 02 April 1996, 256 SCRA 44.

32 AUDION Electric Co., Inc. v. NLRC, G.R. No. 106648, 17 June 1999, 308 SCRA 340, citing Jimenez v. NLRC, G.R. No. 116960, 02 April 1996, 256 SCRA 84.

33 Ibid.

34 PNB v. Court of Appeals, 326 Phil. 326 (1996), cited in Towne and City Dev't . v. Court of Appeals, G.R. No. 135043, 14 July 2004.

35 G.R. No. L-4104, May 1952.

36 PNB v. Court of Appeals, 326 Phil 326.

37 Standard Rice and Corn Mill v. Dela Serna, G.R. No. 92249, 20 March 1991, 195 SCRA 475.

38 Towne and City Development Corp. v. Court of Appeals, G.R. No. 135043, 14 July 2004.

39 Article 1249, Civil Code.

40 Article 1231 of The Civil Code; CKH Industrial and Dev't . Corp v. Court of Appeals, 338 Phil. 837 (1997).

41 Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. IV, 1991 Ed., p. 275.

42 MC Engineering, Inc. v. Court of Appeals, G.R. No. 104047, 03 April 2002, 380 SCRA 116.

43 Regal Films, Inc. v. Concepcion, 09 August 2001, 414 Phil. 807, 812.

44 Mactan-Cebu International Airport Authority (MCIAA) v. Court of Appeals, G.R. No. 139495, 27 November 2000, 346 SCRA 126.

45 Sanchez v. Court of Appeals, G.R. No. 108947, 29 September 1997, 279 SCRA 647, cited in San Antonio v. Court of Appeals, G.R. No. 121810, 07 December 2001, 371 SCRA 536.

46 Limson v. Court of Appeals, G.R. No. 135929, 20 April 2001, 357 SCRA 209; China Banking Corporation v. Court of Appeals, G.R. No. 121158, 05 December 1996, 265 SCRA 327.

47 The Insular Life Assurance Company v. Court of Appeals, G.R. No. 126850, 28 April 2004.

48 Litton v. Court of Appeals, G.R. No. 102713, 09 October 1996, 263 SCRA 40, 47-48.

49 G.R. No. L-26354, 04 March 1976, 70 SCRA 4.

50 Art. 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy; Barons Marketing Corp. v. Court of Appeals, G.R. No. 126486, 09 February 1998, 349 Phil. 769.

51 Art. 1158, Civil Code.

52 Art. 1315, Civil Code.

53 Periquet, Jr. v. IAC, 05 December 1994, 238 SCRA 697.

54 Sanchez v. Court of Appeals, G.R. No. 108947, 29 September 1997, 279 SCRA 647; Esguerra v. Court of Appeals, G.R. No. 119310, 03 February 1997, 267 SCRA 380; Republic v. Sandiganbayan G.R. NOS. 108292, 108368, 108548-49, and 108550, 10 September 1993, 226 SCRA 314.

55 Vlason Enterprises v. Court of Appeals, G.R. No. 121662-64, 06 July 1999, 310 SCRA 26.

56 G.R. No. 104133, 18 April 1995, 243 SCRA 531, 535, citing Maceda, Jr. v. Moreman Builders Co., Inc., G.R. No. 100239, 28 October 1991, 203 SCRA 293.

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