L I R I A & A S S O C I A T E S

L A W F I R M
3 f / P r i n c e D a v i d C o n d o m i n i u m
K a t i p u n a n , Q u e z o n C i t y
T e l N o . 4 3 3 - 6 9 3 3



August 22, 2011
ABC Prlme Reul Property Corporutlon
681 Auroru Boulevurd, Cubuo
Ouezon Clty


Attentlon: Mr. Mlckey Mouse
Vlce Presldent
ABC Prlme Reul Property Corporutlon

Gentlemen:

Thls hus reference to your request for legul oplnlon regurdlng the vulldlty of Judge Murlu
Clurus reversul of the compromlse ugreement executed between ABC Prlme Corporutlon und Mr.
Efren Gurclu bused on humunlturlun reusons, to whlch ulso further ruled thut the redemptlon perlod
hus not yet explred desplte the lupse of the perlod ugreed upon by the purtles ln the compromlse
ugreement.

The fucts thut cun be culled from the documents furnlshed to us ure us follows:

1. 2n 28 December 2009, Efren Gurclu borrowed money from ABC Prlme Reul Property
Development Corporutlon (ABC Corporutlon herelnufter) ln the prlnclpul umount of
Twelve Mllllon Pesos (Php 12, 000, 000.00). To secure puyment of suld loun und other
stlpuluted expenses, Mr. Gurclu executed u reul estute mortguge over hls property,
lncludlng lts lmprovements, locuted ut No. 822 Ouezon Avenue, Ouezon Clty, covered
by TCT No. 12345 of the Reglster of Deeds for Ouezon Clty ln fuvor of ABC
Corporutlon.
2. Suld loun of Mr. Gurclu becume due und demunduble, to whlch he fulled to comply. Mr.
Gurclu fulled to redeem the mortguged property, thus suld mortguge wus extru-|udlclully
foreclosed by ABC Corporutlon, und subsequently, the mortguged property wus sold ut u
publlc uuctlon wlth ABC Corporutlon us the hlghest bldder ln. Consequently, u Certlflcute
of Sule wus lssued by the 2fflce of the Clerk of Court und Ex-2fflclo Sherlff of Ouezon
Clty.
3. However, Mr. Gurclu contested the vulldlty of the Reul Estute Mortguge und the Extru-
Judlclul Foreclosure of suld property. To uvold further lltlgutlon, ABC Corporutlon und
Mr. Gurclu executed u compromlse ugreement, whereln the lutter would redeem the
property by puylng ABC Corporutlon Flfteen Mllllon Pesos (Php 15, 000, 000.00) us the
complete und full redemptlon prlce of the mortguged property wlthln one (1) month from
13 Aprll 2011. Suld compromlse ugreement furthered thut upon full puyment of the
redemptlon prlce, ABC shull releuse Mr. Gurclu from lts obllgutlon by: (u) lssulng u
Certlflcute of Full Puyment; (b) executlng u Cuncellutlon/Releuse of Reul Mortguge on
the property; und (c) dellverlng the orlglnul owners dupllcute of the property. If ABC
Corporutlon fulled to comply wlth lts obllgutlon or lncur uny undue deluy ln lssulng or
executlng suld documents, Mr. Gurclu shull be entltled to enforce u wrlt of executlon. 2n
the other hund, ln the event thut Mr. Gurclu fulled to redeem the mortguged property
wlthln the perlod of one (1) month from und ufter 13 Aprll 2011 or untll 13 Muy 2011, Mr.
Gurclu shull wulve und surrender the ownershlp of sub|ect property to ABC Corporutlon.
Suld compromlse ugreement wus upproved by Judge Murlu Cluru of RTC Brunch 224,
Ouezon Clty on 28 Aprll 2011.
4. 2n 13 Muy 2011, Mr. Gurclu flled u Motlon for Extenslon to Comply due to the
unceremonlous bucklng out of hls funder, to whlch suld motlon requested for uddltlonul
ten (10) duys to comply wlth the compromlse ugreement. The RTC denled Mr. Gurclus
motlon und lssued u Wrlt of Executlon on 26 Muy 2011.
5. Prlor to the lssuunce of suld order, Mr. Gurclu flled u munlfestutlon to the Court thut he
hus ulreudy purchused u munugers check und wus reudy to present the sume to the
Court on the duy suld munlfestutlon wus set for heurlng on 27 Muy 2011. In hls
munlfestutlon, Mr. Gurclu contended thut he mude u tender of puyment ln utmost good
fulth und wlth slncere effort to comply wlth the Compromlse Agreement by puylng the
obllgutlon. ABC Corporutlon, on the other hund urgued thut suld Motlon for Extenslon
should be dlsmlssed for lts fullure to stute the tlmellness of the flllng of the motlon und
thut the munugers check ls consldered u deluyed puyment becuuse the plulntlff hud
ulreudy vloluted the Compromlse Agreement, und thut there ls no vulld tender of
puyment.
6. 2n 30 June 2011, Mr. Gurclu flled u Motlon for Reconslderutlon und to Ouush Wrlt of
Executlon, explulnlng thereln thut he wus uble to obtuln u munugers check und thut the
further deluy of the releuse of the Flfteen Mllllon Pesos (Php 15,000, 000.00) wus due to
the fuct thut the Reglster of Deeds of Ouezon Clty refused to lssue lmmedlutely u
certlfled photocopy of hls tltle, whlch wus requlred by hls funder becuuse u pendlng
trunsuctlon ls stlll on-golng ln thelr uutomuted system.
7. 2n 26 July 2011, the Court rendered u declslon gruntlng Mr. Gurclus Motlon for
Reconslderutlon bused on humunlturlun reusons. The Court furthered thut the one yeur
redemptlon perlod hus not yet explred und noted thut the compromlse ugreement dld not
stute when the Certlflcute of Sule wus reglstered. The Court consldered the dute of the
uuctlon sule, 19 2ctober 2010 us the reckonlng perlod of redemptlon, und stuted thut the
compromlse ugreement vloluted Mr. Gurclus rlght to redemptlon perlod. Suld declslon
ulso ordered ABC Corporutlon to uccept the munugers check lssued by Mr. Gurclu.


Two muln lssues cun be derlved bused on the foregolng fucts:

I. CAN THE JUDGE REVERSE THE C2MPR2MISE AGREEMENT EXECUTED
BETWEEN ABC C2RP2RATI2N AND MR. GARCIA BASED 2N HUMANITARIAN
REAS2NS?
II. WHAT IS THE APPLICABLE REDEMPTI2N PERI2D IN THE CASE?
III. IF THERE IS A VI2LATI2N MADE BY THE C2URT, WHAT IS THE PR2PER REMEDY
T2 BE AVAILED 2F?




DISCUSSI2N:


I. ISSUE 2N THE C2MPR2MISE AGREEMENT

A. DEFINITI2N 2F C2MPR2MISE AGREEMENT

Flrst, u compromlse ugreement ls contruct between the purtles, whlch lf not contrury to luw,
moruls, or publlc pollcy, ls vulld und enforceuble between them (Munlclpul Bourd of Cubunutuun
Clty v. Sumuhung Mugsusuku, Inc. 62 SCRA 435).

Under the Clvll Code, Art. 2028 provldes:

Art. 2028. A compromlse ls u contruct whereby the purtles,
by muklng reclprocul concesslons, uvold u lltlgutlon or put
un end to one ulreudy commenced.

Two klnds of compromlse ugreements cun be referred to ln the foregolng urtlcle: Judlclul
Compromlse, whlch puts un end to u pendlng lltlgutlon; und Extru|udlclul Compromlse, wlth seeks to
uvold lltlgutlon.

As u contruct, u compromlse ugreement ls perfected by the mutuul consent of the purtles.
(Rovero v. Ampuro 91 Phll 228). A |udlclul compromlse, however, whlle blndlng between the purtles
upon lts executlon, ls not executory untll lt ls upproved by the court und reduced to u |udgment.

B. C2URTS DUTY REGARDING THE C203520,6E AG5EE0ENT

,n the ubsence of un ob|ectlon to the ugreement of the purtles, lt ls the duty of the court to render
|udgment strlctly ln uccordunce wlth the terms of the ugreement (Cubreru v. Lucson, 71 3hll 182).
6uch |udgment ls more thun u mere contruct blndlng the purtles becuuse huvlng the upprovul of the
court, und entered us lts determlnutlon of the controversy, lt hus ull the force und effect of uny other
|udgment, lt belng concluslve upon the purtles. (0urquez v. 0urquez, 73 3hll 74)

The non-fulflllment of the terms und condltlons of u compromlse ugreement upproved by the
court |ustlfles the executlon thereof und the lssuunce of the wrlt for suld purpose ls the courts
mlnlsterlul duty enforceuble by mundumus (0ucedu, Jr. v. 0oremun Bullders Co. ,nc., 203 6&5$
293)

A compromlse |udgment ls flnul und lmmedlutely executory. 2nce u |udgment becomes flnul
executory, the prevulllng purty cun huve lt executed us u mutter of rlght und the executlon becomes u
mlnlsterlul duty on the purt of the court. Such flnul und executory |udgment cunnot be modlfled or
umended. If un umendment ls to be mude, lt muy conslst only of supplylng un omlsslon, strlklng out
u superflulty or lnterpretlng un umblguous phruse thereln ln relutlon to the body of the declslon
whlch glves lt llfe. A compromlse |udgment should not be dlsturbed except for vlces of consent or
forgery (&ommerclul &redlt &orporutlon &uguyun De 2ro v. &ourt of Appeuls, G.5. No. 78315,
Junuury 2, 1989)

&. WHEN CAN A WRIT 2F EXECUTI2N BE REFUSED:

When u |udgment or order becomes flnul und executory, lt ls the mlnlsterlul duty of the court to
lssue u wrlt of executlon to enforce u |udgment. It muy be refused only on equltuble grounds such us
when there ls u chunge ln sltuutlon of the purtles thut would muke the executlon lnequltuble. Also,
when supervenlng events occurrlng subsequent to the |udgment brlng ubout muterlul chunge ln the
sltuutlon of the purtles, muklng the executlon lnequltuble, or when there ls no compelllng urgency for
the executlon becuuse lt ls not |ustlfled by the prevulllng clrcumstunces, u stuy or precluslon of
executlon muy be properly sought. (Concurrlng oplnlon of Chlef Justlce, then Assoclute Justlce
Andres R. Nurvusu ln Bucluyon v. CA, 182 SCRA 761)

D. VALIDITY 2F THE C2URTS REVERSAL 2F THE C2MPR2MISE AGREEMENT

Bused on the dlscusslons ubove, the RTC of Ouezon Clty erred when lt grunted Mr. Gurclus
Motlon for Reconslderutlon.

At the outset, we deem to dlscuss why the court erred ln gruntlng the motlon for
reconslderutlon flled by Mr. Gurclu:

I. The compromlse ugreement ls the luw governlng between the purtles.

The compromlse ugreement between ABC Corporutlon und Mr. Gurclu ls u contruct
executed between them; hence lt should govern thelr relutlonshlp. As lt fulls under Art. 2028 of the
Clvll Code us u |udlclul compromlse, lt ls executory between the purtles becuuse lt hus been reduced
us u |udgment by the court, to whlch the court rendered on 26 Aprll 2011.

II. A compromlse ugreement ls u flnul und executory |udgment; hence lt ls u mlnlsterlul
duty of the Court to lmplement suld order.

A mlnlsterlul duty meuns thut the court should not exerclse uny dlscretlon ln lmplementutlon,
but lmmedlutely enforce or perform lts obllgutlon. The Court should perform lts obllgutlon ln
enforclng the Compromlse Agreement und should not grunt the extenslon flled by the purty becuuse
bused on the compromlse ugreement of the purtles, euch of them hus u speclflc duty to comply wlth
thelr obllgutlons, fullure to do so would wurrunt the correspondlng ugreement executed umong them.
The Court ls therefore not bound to lnterfere nor exerclse lts dlscretlon ln lmplementlng the sume. As
lt wus dlscussed ubove, u flnul und executory |udgment becomes u mutter of rlght of the prevulllng
purty, und the Court ls bound to enforce the sume.

Hence, the Court cunnot compel ABC Corporutlon to uccept the munugers check lssued by
Mr. Gurclu, for lt wus flled out of tlme.

III. The suspenslon of the Wrlt of Executlon wus not vulld becuuse Mr. Gurclu fulled to
show thut such lssuunce of the wrlt would muke the executlon lnequltuble.

Bused on the provlded fucts, Mr. Gurclus funder bucked out, promptlng hlm to look for unother
funder. As Mr. Gurclu wus glven enough tlme und even ugreed on the provlded perlod ln the
compromlse ugreement, he should huve exerclsed due dlllgence ln performlng hls obllgutlon, such
us huvlng u relluble funder. He fulled to rulse substuntlul reusons why hls prevlous funder bucked
out. More so, the refusul of the Reglster of Deeds of Ouezon Clty to lssue lmmedlutely u certlfled
photocopy of hls tltle whlch wus requlred by the funder ls not u supervenlng event thut would
wurrunt the stuy of the executlon order.


E. ISSUE 2N THE REDEMPTI2N PERI2D

A. REDEMPTI2N PERI2D F2R REAL PR2PERTY

Deflnltlon of Rlght of Redemptlon

A rlght of redemptlon ls u stututory rlght glven to the mortgugor, when the condltlon of the
mortguge wus broken, und by equlty, lt permlts the mortgugor wlthln u reusonuble tlme to redeem
upon puyment of the umount due before the sule.

In Act. 3135 us umended, generully, the perlod of redemptlon of un extru |udlclully
foreclosed property ls one (1) yeur, counted from the dute of reglstrutlon. Notubly, wlthout
reglstrutlon of the sule wlth the Reglstry of Deeds, the redemptlon perlod wlll not sturt to commence.

Durlng the perlod of redemptlon, the mortgugor ls stlll the owner of the property; hence, he
muy stlll exerclse over such property ull uttrlbutes of ownershlp. However, the rlght to redeem cun
only be exerclsed untll but not ufter the reglstrutlon of the certlflcutes of sule, or three (3) months
from foreclosure, whlchever comes flrst, under the followlng condltlons:

1. The mortgugor ls u |urldlcul person, whereln lt u |urldlcul person ls u flctlon creuted by
luw such us corporutlons und purtnershlp;
2. The mortgugee ls u bunk, quusl-bunk (credlt lnstltutlon), or u trust lnstltutlon;
3. Foreclosure wus done extru|udlclul;

The one (1) yeur redemptlon perlod upplles when:
1. The mode of foreclosure ls |udlclul.
2. Mortgugee ls not u bunk;
3. Mortgugor ls u not u |urldlcul person.

The one yeur redemptlon perlod for reul estute mortguge exlsts ln cuses where the mortgugor
ls un lndlvlduul or even where the mortgugor ls u |udlclul person lf the mortgugee ls not u bunk,
quusl-bunk or trust entlty where the foreclosure ls done |udlclully.

Under Sec 47 of R.A. 8791, An Act Provldlng for the Regulutlon und 2perutlons of Bunks,
the one yeur redemptlon perlod does not upply to reul estute mortguges constltuted by |urldlcul
persons ln fuvor of u bunk, quusl-bunk, or trust entlty. In such cuse, the rlght to redeem cun only be
exerclsed untll but not ufter the reglstrutlon of the certlflcute of sule or three months from the
foreclosure, whlchever ls eurller.

B. APPLICABILITY 2F THE 2NE YEAR REDEMPTI2N PERI2D

Bused on the foregolng dlscusslon, the redemptlon perlod thut shull be glven to Mr. Gurclu fulls
squurely wlthln the one yeur redemptlon perlod, us he belng the mortgugor ls u not u |urldlcul person.

If the property lf reglstered not under the nume of Mr. Gurclu but under Gurclu Corporutlon, the
one yeur redemptlon perlod wlll not upply. The rlght to redeem cun only be exerclsed untll but not
ufter the reglstrutlon of the certlflcute of sule or three months from foreclosure, whlchever ls eurller.

Hence, slnce the dute of the uuctlon sule wus on 19 2ctober 2010, such should be the reckonlng
dute for the one yeur redemptlon perlod. Mr. Gurclu therefore, belng un lndlvlduul und not u |urldlcul
person, ls entltled to suld perlod.

C. EFFECT 2F THE C2MPR2MISE AGREEMENT 2N THE REDEMPTI2N PERI2D

A compromlse ugreement vulldly entered lnto wlll now govern the relutlonshlp of the purtles
executlng such ugreement. Slnce, lt ls flnul und executory, the |udgment muy no longer be modlfled
ln uny uspect, even lf the modlflcutlon ls meunt to correct un erroneous concluslon of fuct of luw, und
regurdless of whether the modlflcutlon ls uttempted to be mude by the court renderlng lt or by the
hlghest court of the lund, us whut remulns to be done ls the purely mlnlsterlul enforcement or
executlon of the |udgment.

The doctrlne of flnullty of |udgment ls bused on fundumentul conslderutlons of publlc pollcy
und sound pructlce thut ut the rlsk of occuslonul errors, the |udgment of the ud|udlcutlng bodles must
become flnul und executory on some deflnlte dute flxed by luw. The doctrlne of lmmutublllty of flnul
|udgment ls udhered to by necesslty notwlthstundlng occuslonul errors thut muy result thereby, slnce
lltlgutlons must come to un end for otherwlse, lt would be even more lntoleruble ln|ustlce lt ls
deslgned to correct (Vlos vs. Putungco, G.R. 163103, Februury 6, 2009)

ABC Corporutlon und Mr. Gurclu huve thus entered lnto u compromlse ugreement, to whlch
both of them, und further upproved by the Court, ugreed thut defendunt shull redeem the property
one month from 13 Aprll 2011 or untll 13 Muy 2011, then suld dute should govern the redemptlon
perlod und not otherwlse.


F. REMEDY 2F ABC C2RP2RATI2N

Bused on the foregolng evuluutlon of the cuse, cleurly, the RTC of Ouezon Clty hus exceeded lts
uuthorlty when lt grunted the Motlon for Reconslderutlon flled by Mr. Gurclu. The correspondlng wrlt
of executed should huve been executed by the Court slnce the compromlse ugreement ls flnul und
executory umong the purtles. More so, the Court even mude u substuntlul umendment to the
compromlse ugreement of ABC Corporutlon und Mr. Gurclu, whlch ls prohlblted by the luw ln cuse
of flnul und executory |udgments.

The offlce would suggest thut the proper remedy to be uvulled of by ABC Corporutlon ls to flle u
Petltlon for Certlorurl wlth the Supreme Court under Rule 65 of the Clvll Procedure. Rule 65, Sec. 1
stutes:

Sectlon 1. Petltlon for certlorurl.
When uny trlbunul, bourd or offlcer exerclslng |udlclul or quusl-|udlclul
functlons hus ucted wlthout or ln excess of lts or hls |urlsdlctlon, or wlth
gruve ubuse of dlscretlon umountlng to luck or excess of |urlsdlctlon, und
there ls no uppeul, or uny pluln, speedy, und udequute remedy ln the
ordlnury course of luw, u person uggrleved thereby muy flle u verlfled
petltlon ln the proper court, ulleglng the fucts wlth certulnty und pruylng thut
|udgment be rendered unnulllng or modlfylng the proceedlngs of such
trlbunul, bourd or offlcer, und gruntlng such lncldentul rellefs us luw und
|ustlce muy requlre.

The petltlon shull be uccompunled by u certlfled true copy of the |udgment,
order or resolutlon sub|ect thereof, coples of ull pleudlngs und documents
relevunt und pertlnent thereto, und u sworn certlflcutlon of non-forum
shopplng us provlded ln the thlrd purugruph of sectlon 3, Rule 46.

Slnce Judge Murlu Cluru hus exceeded her uuthorlty ln muklng u substuntlul umendment on
the Compromlse Agreement executed between ABC Corporutlon und Mr. Gurclu, the sume cun be
questlon by such mode of uppeul to the Supreme Court. Such cun be flled wlthln 60 duys from the
notlce of |udgment or resolutlon.

Both the Supreme Court und the Court of Appeuls hus |urlsdlctlon over suld petltlon, but to
uvold golng to the tedlous process of uppeullng the declslon of the Court of Appeuls, the sume cun
be flled dlrectly to the Supreme Court. Such ls u more expedltlous uppeul ruther thun golng to the
Court of Appeuls.


SUMMARY:

Bused on the dlscusslon ubove, the followlng polnts ure estubllshed:

I. Compromlse Agreement:

u. The Compromlse Agreement wus vulldly entered lnto by the purtles, hence lt should be
the luw thut prevull over ABC Corporutlon und Mr. Gurclu;
b. The Compromlse Agreement, belng flnul und executory, should be lmplemented by the
Court us lts mlnlsterlul duty;
c. The lssuunce of the wrlt of executlon ls not vulld becuuse Mr. Gurclu fulled to show thut
the executlon ls lnequltuble, for he hus ugreed on the redemptlon perlod us provlded ln
the compromlse ugreement;
d. The Court hus no |urlsdlctlon to muke substuntlul umendment to the compromlse
ugreement of the purtles becuuse lt ls u contruct between the purtles;
e. The Court cunnot compel ABC Corporutlon to uccept the munugers check lssued by Mr.
Gurclu for lt wus not dellvered on the perlod stlpuluted ln the Compromlse Agreement.

II. Redemptlon Perlod

u. Generully, Mr. Gurclus rlght of redemptlon should be one yeur, us he ls u nuturul
person. Such rlght of redemptlon should be exerclsed untll 19 2ctober 2011;
b. The three month perlod of redemptlon ls uppllcuble only lf the mortgugor ls u |urldlcul
person und thut the mortgugee ls u bunk;
c. However, the compromlse ugreement vulldly executed umong the purtles provldlng
13 Muy 2011 us the redemptlon perlod should be the lmplemented, und not the one
yeur perlod.

III. Courts uuthorlty

u. The RTC erred ln gruntlng the Motlon for Reconslderutlon und Ouushul of the Wrlt of
Executlon slnce the compromlse ugreement ls flnul und executory;
b. The Court ls not uuthorlzed to muke substuntlul umendments to the compromlse
ugreement on the grounds of humunlturlun reusons;
c. The mode of Appeul to be used ls Petltlon for Revlew on Certlorurl under Rule 65.








We hope thut we huve enllghtened you on your concerns regurdlng your cuse. Should you
wlsh to clurlfy some mutters rulsed ln our oplnlon, pleuse do not hesltute to cull us.


Very truly yours,



Atty. Curmel G. Llrlu
Senlor Purtner
Llrlu & Assoclutes Luw Flrm