JULIA DE LA MERCED, ET AL., PLAINTIFFS-APPELLANTS, VS. THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, ET AL., DEFENDANTS-APPELLEES.

Appeal from an order of the Court of First Instance of Manila
(in its Civil Case No. 49768) ordering execution of a judgment
based on a compromise approved by the Court.

The appellants initiated these proceedings in February, 1962, by
a complaint in a purportedly representative suit against appellees
herein, the Roman Catholic Archbishop of Manila
and Manuel Uy & Sons, Inc.  They claimed to be representing numerous
lessees of a parcel of land in Paco, Manila,
belonging to the Archbishop as corporation sole, and known as Lot 3, Block 829
of the Manila cadastre; and alleged that they had occupied the leased premises
for many years, under oral agreements for indefinite terms, and had introduced
improvements therein; that on January 18, 1962, with­out their knowledge, the
defendants had entered into a lease agree­ment “embracing the very
premises leased to plaintiffs,” and the latter had been served notices
terminating their occupancy and requiring them to vacate.  They prayed the Court to order defendants to
respect their individual leases, to fix the duration thereof, to be preferred
in the lease of the premises and, if evicted, to be indemnified for the value
of their improvements, plus damages, at­torney’s fees and costs.

After defendants had filed answers, traversing the allegations of
the complaint, the parties executed and submitted to the trial Court a
compromise agreement reading as follows:

“COMPROMISE AGREEMENT”

“COME now the parties, through their respective undersigned
counsel, and to this Honorable Court respectfully manifest that they have
compromised this case in the sense that they are submitting to the sound
discretion of this Honorable Court the determination of the length of time
within which plaintiffs may remain on the land of defendant Roman Catholic
Archbishop of Manila described in the com­plaint, after which period said
plaintiffs shall vol­untarily vacate the land and remove whatever im­provements
they may have thereon.  Failure on the
part of said plaintiffs, or any of them, to vacate the land and remove their
improvements thereon within the period so fixed by this Honorable Court, shall
authorize defendants to immediately apply for a writ of execution and an order
for the forcible ejectment of the defaulting
plaintiffs, who shall furthermore forfeit in favor of defendants the said
improvements.

“In connection with the period to be fixed, de­fendants submit
that said period should be from six (6) months to one (1) year from date of
judgment, considering that this case has already been pend­ing for a year.  Plaintiffs on their part, respectfully submit
that said period should at least be two (2) to four (4) years from date of
judgment, in view of the circumstances of having constructed in good faith their
respective improvements and of having stayed in the premises for not less than
15 to 20 years.

“Plaintiffs shall pay to defendant the rentals in arrears from
the filing of the complaint and those accruing during the period fixed by this
Honorable Court at the rate they had been paying to the heirs of the late
Justice Felicisimo Feria,
who was for­merly leasing the land from the defendant Roman Catholic Archbishop
of Manila and sub-leasing it to the plaintiffs. 
The rentals in arrears from the filing of the complaint shall be paid by
the plaintiffs to the defendants from the date of the judg­ment at double the
monthly rate until such time as the rentals in arrears shall have been paid
completely and the monthly payment has become up to date.

“The rentals in arrears, if any, corresponding to the period
before the execution of the lease agreement between the defendants Manuel Uy & Sons, Inc. and the Roman Catholic Archbishop of Manila,
shall be subject to future negotiations between the plaintiffs and the said
Roman Arch­bishop of Manila.

“Parties stipulate that this a class suit as alleged in
complaint.

“WHEREFORE, it is respectfully prayed that judgment be
rendered in accordance with this Com­promise Agreement, without pronouncement
as to costs.

“Manila, Philippines,
July 6, 1963.

“JALANDONI & JAMIR

By:

(Sgd.) Rodegelio Jalandoni

RODEGELIO JALANDONI

Counsel for the Defendants

6th Floor, Magsaysay Bldg.

San Luis, Ermita, Manila

“VILLENA & ASSOCIATES

By:

(Sgd.)
Jose D. Villena

JOSE D. VILLENA

Counsel for the Plaintiffs

213 Perez Samanillo
Bldg.

Escolta, Manila”

The Court of First Instance, on July 31, 19 63, rendered its
decision.  After quoting the compromise
submitted, it adjudged (Rec. on App., pp. 31-33) the following:

“WHEREFORE, judgment is hereby rendered as follows:

“1.  That the plaintiffs shall continue to remain
on the land of the defendant, Roman Catholic Arch­bishop of Manila, described
in the complaint, for a period of eighteen (18) months from the date of this
judgment upon the condition that should they fail to leave at the end of said
period, the corresponding writ of execution shall be issued forth­with in order
to forcibly eject any of the defaulting plaintiffs, thereby forfeiting in favor
of the defend­ants the improvements constructed by them on said land;

“2.  That the plaintiffs shall pay to the defend­ants
the rentals in arrears from February, 1962 and those accruing during the said
period of eighteen (18) months when they are allowed to continue to stay on
said land at the same rate that they had been paying to the heirs of the late
Justice Felicisimo Feria,
who was formerly leasing said land from the defendant, Roman Catholic
Archbishop of Manila, and sub-leasing it to the plaintiffs; but the rentals in
arrears from February 1, 1962, up to the date of the judgment, shall be paid by
the plaintiffs to the defendants at double the monthly rates until said rentals
in arrears shall have been fully paid and the monthly payment has become up to
date;

“3.  That the rentals in arrears, if any, corres­ponding
to the period before the execution of the lease agreement between the
defendants, Manuel Uy & Sons, Inc., and the Roman
Catholic Arch­bishop of Manila, shall be the subject of further negotiations
between the plaintiffs and the said Roman Catholic Archbishop of Manila,
without pronouncement as to costs.

“SO ORDERED.”

Almost six months thereafter, defendants moved for execution of
the Judgment, averring that plaintiffs had failed to pay the ren­tals
stipulated in the compromise.  Plaintiffs
(appellants herein) then changed counsel, and through the new attorneys opposed
the execution, claiming that the compromise had not been authorized by them and
that they would not have agreed to it had they been informed of its terms, and
prayed that the judgment be set aside, but the Court of First Instance on March
10, 1964, after considering the arguments adduced by the parties, overruled the
objection of the plaintiffs (now appellants) as without merit and ordered
execution to issue.  Whereupon,
plaintiffs appealed directly to this Court.

The appeal is squarely planted on the validity of the alleged­ly
unauthorized compromise, and whether as a result thereof, the judgment should
have been set aside.

A review of the terms of the decision, and of the parties’
agreement therein quoted, reveals that, contrary to the contention of
appellants, the decision of the Court a quo was not wholly a
result of the pretended compromise.  The
first part of the latter, concerning the length of time that the appellants
should be allowed to stay on the leased premises, was not settled by the
parties at all, but only submitted by them to the discretion of the Court.  The lessors
contended that the Court should give the les­sees appellants one year at the
most; the renters submitted that they should be permitted to remain from two to
four years.  The trial Judge adopted
neither proposal, and gave the lessees appel­lants eighteen (18) months within
which to vacate.  Obviously, this was an
independent judgment in the exercise of the Court’s power under Article 1687 of
the Civil Code and if became final for lack of appeal.  No reason is seen why it should not be
executed.  Paren­thetically, it may be
observed that, by now, the appellant lessees have managed to stay in the leased
land over four years since the original judgment, and that the period was the
maximum demanded by them.  Nowhere in the
record is it shown that the writ of execu­tion was carried out during the pendency of the present appeal.

True it is that the appellants’ counsel agreed that by their
failure to vacate and remove their improvements within the period fixed by the
court, appellants would “forfeit” their improvements in favor of
defendants.  But in effect this is what
the law provides, when Article 1678 of the Civil Code authorized a lessee to
remove the improvements he has made should the lessor
refuse to pay one-half of their value at the termination of the lease.  If, notwithstand­ing such refusal of the lessor, the lessee should fall to remove his improvements,
the only legal conclusion possible is that he aban­dons them, and the lessor may deal with them as he chooses.  Hence, neither does this portion of the
agreement constitute a concession or a compromise of the appellants’ claims in
the court below.

The same can be said of paragraph 2 of the “Compromise Agree­ment.”
That the appellants should pay the rentals since February 1962, when their
complaint was filed, is no more and no less than their legal obligation as
lessees, or sub-lessees.  Such obligation
did not originate from the compromise, but from law; it was the consideration
for the use of the land, and the filing of a complaint to fix the term of their
stay and to give them preference over appel­lee
Manuel A. Uy could not stop appellants’ obligation to
pay rent, their character as lessees being averred in their own complaint.

Further, that the appellants should pay the same rentals they
were paying to the late Justice Felicisimo Feria as his sublessees, he being
the original lessee of defendant Archbishop, was no
innova­tion either.  A comparison of the
monthly rents that appellants alleged they had been paying, as listed in
paragraph 4 of their complaint be­low, with the arrears claimed by defendants
in their motion for execu­tion, paragraph 3, shows that they are identical.

Nor can it be denied that the last portion of paragraph 2, to the
effect that the rentals in arrears shall be paid from the date of the judgment
at double the monthly rate until completely paid, is more of a concession of
the lessor than a compromise of the claims of
plaintiffs-appellants.  Normally, after
judgment, a lessee should pay all arrears in a lump sum, and may not compel the
lessor to accept payment in installments.

The last paragraph of the agreement, providing that “the
rentals in arrears, if any, corresponding to the period before the execution of
the lease agreement between the defendants Manuel Uy
& Sons, Inc. and the Roman Catholic Archbishop of Manila shall be subject
to future negotiations between plaintiffs (now appellants) and
the said Roman Catholic Archbishop of Manila” settles nothing by it­self,
and can in no way be deemed a compromise or waiver of their rights.

Thus, analysis plainly shows that the “compromise
agreement” submitted to the Court and incorporated in its decision of July 31, 1963, contained nothing more
than a recognition of the obligations of appellants lessees under the facts
disclosed in their pleadings, in conformity with existing law.  The agreement, therefore, was not a true
compromise, the essence of which resides in reciprocal concessions (Civ. Code of the Philippines,
art. 2028), since it has been shown that any
concessions here were solely on the part of the defendant lessor.  Consequently, the rules invoked by the ap­pellants
as to the necessity of special authority for an attorney to effectuate a
compromise are not opposite and are totally inapplicable.  That the stipulation was labeled
“compromise” does not make it one in fact.

We find no error in the lower Court’s refusal to set aside the
judgment, the same having become final and executory,
by lapse of the appeal period.  The order
to issue execution is, therefore, affirmed. 
Costs in this instance shall be solidarily
paid by the appellants, Julia de la Merced, Antonia B. Cervantes, Damian Chua
See, Patrocinia Lumbong, Pastora Javier, Honorata Galang, Francisco Ponseca, Librado Royo, Marcelo Ramirez,
and Chua Bing.

SO ORDERED.

Makalintal, Bengzon,
Zaldivar, Sanchez, Castro, Angeles, and Fernando, JJ., concur.

Concepcion, C.J., and Dizon, J., on official leave.