On Compromise Agreement
Is a compromise agreement partitioning inherited properties valid even without the approval of the trial court hearing the intestate estate of the deceased owner?chanroblesvirtuallawlibraryThese questions are answered by the Court as it resolves the petition for review on certiorari before the court assailing the November 23, 1992 Decision 1 of the Court of Appeals 2 in CA-G.R. SP No. 28761 which annulled the decision 3 of the trial court 4 and which declared the compromise agreement among the parties valid and binding even without the said trial court’s approval.
Facts:
Rosalia S. Lugod is the only child of spouses Juan C. Sanchez and Maria Villafranca while [herein private respondents] Arturo S. Lugod, Evelyn L. Ranises and Roberto S. Lugod are the legitimate children of private respondent Rosalia.
The petitioners, Rolando, Florida Mierly, Alfredo and Myrna, all surnamed Sanchez, are the illegitimate children of Juan C. Sanchez.
Following the death of her mother, Maria Villafranca, on September 29, 1967, [herein private respondent] Rosalia filed on January 22, 1968, thru counsel, a petition for letters of administration over the estate of her mother and the estate of her father, Juan C. Sanchez, who was at the time in state of senility, but later died on October 21, 1968.
On September 30, 1968, [herein private respondent] Rosalia, as administratrix of the intestate estate of her mother, submitted an inventory and appraisal of the real and personal estate of her late mother
On October 30, 1969, however, Rosalia and the petitioners assisted by their respective counsels executed a compromise agreement wherein they agreed to divide the properties enumerated therein of the late Juan C. Sanchez.
On January 19, 1970, [herein petitioners] filed a motion to require administratrix, [herein private respondent] Rosalia, to deliver deficiency of 24 hectares and or to set aside compromise agreement. However on April 13, 1970, (herein private respondent) Rosalia and [herein petitioners] entered into and executed a memorandum of agreement which modified the compromise agreement.
On October 25, 1979, or nine years later, [herein petitioners] filed, thru counsel, a motion to require [herein private respondent] Rosalia to submit a new inventory and to render an accounting over properties not included in the compromise agreement. They likewise filed a motion to defer the approval of the compromise agreement in which they prayed for the annulment of the compromise agreement on the ground of fraud. The Memorandum of Agreement dated April 13, 1970, which the parties entered into with the assistance of their counsel, amended the above compromise.
The Court of Appeals, in a Resolution 10 dated September 4, 1992, initially dismissed private respondent’s petition. Acting, however, on a motion for reconsideration and a supplemental motion for reconsideration dated September 14, 1992 and September 25, 1992, respectively, Respondent Court thereafter reinstated private respondents’ petition in a resolution dated October 14, 1992. In due course, the Court of Appeals, as earlier stated, rendered its assailed Decision granting the petition, setting aside the trial court’s decision and declaring the modified compromise agreement valid and binding.
Issue:
Whether or not a compromise agreement partitioning inherited properties valid even without the approval of the trial court hearing?
Held;
Yes, the compromise agreement among the parties is valid and binding even without the trial court’s approval.
In the case at bar, it is ineludible that the parties knowingly and freely entered into a valid compromise agreement. Adequately assisted by their respective counsels, they each negotiated its terms and provisions for four months; in fact, said agreement was executed only after the fourth draft. As noted by the trial court itself, the first and second drafts were prepared successively in July, 1969; the third draft on September 25, 1969; and the fourth draft, which was finally signed by the parties on October 30, 1969, followed. Since this compromise agreement was the result of a long drawn out process, with all the parties ably striving to protect their respective interests and to come out with the best they could, there can be no doubt that the parties entered into it freely and voluntarily. To be valid, it is merely required under the law to be based on real claims and actually agreed upon in good faith by the parties thereto.
Indeed, compromise is a form of amicable settlement that is not only allowed but also encouraged in civil cases. Article 2029 of the Civil Code mandates that a “court shall endeavor to persuade the litigants in a civil case to agree upon some fair compromise.”cralaw virtua1aw library
Therefore the court affirm the validity of the parties’ compromise agreement/partition in this case. #aba
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