MARIA VDA. DE SOTTO, PETITIONER, VS. HON. ANDRES REYES, JUDGE OF COURT OF FIRST INSTANCE OF RIZAL, A. S. BUSTOS AND PROVINCIAL SHERIFF OF RIZAL, RESPONDENTS.

Sotto versus Reyes

The Case

This is a petition for certiorari and prohibition filed by Maria vda. de Sotto against Judge Andres Reyes of the Court of First Instance of Rizal, against Attorney A. S. Bustos as counsel for the mortgagee Leonor Gutierrez, and against the Provincial Sheriff of Rizal. The petitioner asks the Supreme Court to annul the orders of the trial court that enforced a compromise agreement and allowed the mortgaged lot to be sold at public auction, and to stop the foreclosure. The case matters because it teaches when a final and executory judgment on a compromise may no longer be reopened, and why the alleged non-existence of a mortgagee cannot be litigated in a petition for certiorari after the judgment has become final.

Procedural History

Maria vda. de Sotto sued the spouses Concepcion and Ricardo Flores and the mortgagee Leonor Gutierrez in the Court of First Instance of Rizal, asking that the deed of sale and the mortgage be declared null and void and that the land be reconveyed to her. The parties, assisted by counsel, submitted a compromise agreement, which the trial court approved and rendered as judgment. When the seven-month period lapsed without a sale or reconveyance, the petitioner moved for relief. The trial court ordered the defendant spouses to execute a deed of reconveyance subject to the mortgage, and later granted the mortgagee's countermotion for the sale of the lot at public auction. The petitioner moved to suspend that order and to reopen the case on the ground that the mortgagee was fictitious, but the trial court denied the motion, denied her motion for reconsideration, and denied her second motion. She then came to the Supreme Court by petition for certiorari and prohibition.

Facts

Maria vda. de Sotto was the registered owner of a parcel of land in Grace Park, Caloocan, covered by a transfer certificate of title in her name. In February 1959 she executed a deed of sale of the land in favor of the spouses Concepcion and Ricardo Flores for seven thousand pesos, part payable in installments and the balance by a back pay certificate assigned to the buyers and then to her. Shortly after, at her request, Concepcion Flores obtained possession of the owner's duplicate certificate of title. Without the petitioner's knowledge or consent, the buyer presented the deed of sale and surrendered the duplicate certificate for registration, and a new certificate was issued in the spouses' names. The spouses then mortgaged the land to Leonor Gutierrez to secure twenty-five hundred pesos.

Claiming fraud, the petitioner sued to annul the sale and the mortgage and to recover the land. On 6 May 1960 the parties entered into a compromise agreement: within seven months the defendant spouses would sell the land and pay her seven thousand one hundred pesos or, failing that, reconvey the property to her free from the mortgage; she would reassign the back pay certificate; and the mortgagee would hold the foreclosure in abeyance. The mortgagee agreed in writing on condition that if the spouses failed to pay her, the mortgage would subsist. The trial court approved the compromise and rendered judgment on it.

The seven months expired without a sale or reconveyance, and the mortgagee moved to foreclose. The trial court ordered the spouses to execute a deed of reconveyance subject to the mortgage, and later allowed the public auction sale of the lot. The petitioner then moved to reopen the case, asserting that Leonor Gutierrez was fictitious and inexistent, based on her own verification and police reports. The trial court denied the motion, and denied reconsideration. Hence the petition.

Issues

• Whether or not the trial court gravely abused its discretion in refusing to reopen the case to determine whether the mortgagee Leonor Gutierrez is a real or fictitious person.
• Whether or not the petitioner, having consented to the compromise that the reconveyance would be subject to the mortgage, may complain when the trial court enforces that compromise.

Applicable Provisions

The decision rests on the binding force of a judgment on a compromise, which the Court treats as final and conclusive between the parties. The governing rule is that a compromise, once approved by judgment, has the force of res judicata and may no longer be disturbed.

A compromise has upon the parties the effect and authority of res judicata.

This provision bears on the case because the trial court's judgment approving the compromise bound the petitioner to its terms, including the condition that the reconveyance would remain subject to the mortgage.

Ruling

On the first issue, the Court held that the existence or non-existence of the mortgagee cannot be threshed out in the case before the trial court, because the judgment on the compromise was already final. The refusal of the trial court to reopen the case for that purpose did not constitute a grave abuse of discretion amounting to excess of jurisdiction. Certiorari and prohibition lie only for grave abuse of discretion, and none was shown.

On the second issue, the Court held that the petitioner, having consented and agreed that the reconveyance of the land would be subject to the mortgage in favor of Leonor Gutierrez should the debt not be paid, cannot complain if the trial court enforces the compromise. The Court gave weight to the police report confirming that Leonor Gutierrez was a real person residing at the address given, which undercut the claim that she was fictitious.

Doctrine

A judgment on a compromise is final and executory and has the effect and authority of res judicata upon the parties. A party who freely entered into a compromise cannot later attack the judgment enforcing it on grounds that should have been raised before its approval. The alleged non-existence of a party to the compromise is a factual question that cannot be litigated through a petition for certiorari once the judgment has become final. Certiorari and prohibition correct only grave abuse of discretion amounting to excess of jurisdiction, not errors of fact or of judgment.

Disposition

The Supreme Court denied the petition, discharged the writ of preliminary injunction it had earlier issued, and made no pronouncement as to costs.

Remember This

Memorize this line: a compromise approved by judgment has the force of res judicata, and a party who consented to its terms cannot later complain when the court enforces them. Examiners use this case to test the finality of compromise judgments and the narrow scope of certiorari and prohibition.