FLORENCIO DEUDOR, ETC., ET AL., PLAINTIFFS AND APPELLANTS VS. J. M. TUASON & CO., INC. AND GREGORIO ARANETA, INC., DEFENDANTS AND APPELLEES.

The main facts are not disputed. On February 16, 1962, plaintiffs
filed said complaint with the aforementioned court, alleging that,
prior to 1885, one Telesforo Deudor was the sole owner and possessor of
a parcel of land of about fifty (50) quiñones—hereinafter referred to
as the property in dispute—situated in the barrios of Matalahib,
Tatalon and Masambong, formerly of the Municipality of Caloocan, Rizal,
now within the jurisdiction of Quezon City; that said land was covered
by an “informacion posesoria” registered in the office of the Register
of Deeds and Property for the then South District of Manila; that
Telesfro Deudor died in 1885, leaving a son, Tomas Deudor, who
succeeded in the peaceful, uninterrupted, public and adverse possession
of said property, until his (Tomas’) death in 1941, when his heirs,
plaintiffs Florencio, Aniana, Pedro and Maria, all surnamed Deudor and
hereinafter referred to as the Deudors, succeeded him in said
possession; that Telesforo Deudor, during his lifetime, and, after his
demise, his aforementioned heirs and successors had disposed of
portions of the property in dispute in favor of other persons, whose
heirs or successors in interest are the other plaintiffs herein,
namely, Esteban del Rosario, Blas Fajardo, Roman de la Cruz, Juliana de
la Cruz alias Juana de la Cruz, Feliciano Fulgencio, Agustin Torres,
Agripino Pascual, Apolinario Misericordia and Manuel Martinez; that,
during the year 1950, plaintiffs herein—namely the Deudors and their
aforenamed co-plaintiffs—filed with the Court of First Instance of
Rizal, Quezon City Branch, Civil Cases Q-135, Q-174, Q-177, and Q-186
of said court against J. M. Tuason & Co., Inc. (hereinafter
referred to as the Tuasons) and (in case No. Q-135) Gregorio Araneta
Inc. (hereinafter referred to as the Aranetas), for the annulment of a
certificate of title, issued way back in 1914, in favor of the Tuasons,
covering a big tract of land, including the property in dispute, as
well as for the reconveyance thereof and damages; that while said cases
were pending before said Court of First Instance of Quezon City, both
parties entered into a compromise agreement whereby, “after examining
the various documents evidencing the title” to the property in dispute,
plaintiffs recognized “the complete, absolute and indefeasible title in
fee simple” of the Tuasons over said property and renounced, ceded and
quit claimed unto and in favor of the latter “any rights, title or
interest of whatever nature” they (plaintiffs) “may have had in the
past, or may ever have in and to said property in the future”, and the
Tuasons agreed to pay to the plaintiffs the aggregate sum of
P1,201,063.00 in the manner and under the conditions set forth in said
agreement; that upon receipt of P100,000.00 on account of said sum of
P1,201,063.00, the plaintiffs turned over to the defendants the
possession of part of the property in dispute with an area of about
twenty (20) quiñiones or approximately ninety (90) hectares; that,
thereafter, the defendants failed and refused to pay to the plaintiffs
the balance of P1,101,063.00 in violation of the provisions of said
compromise agreement; that despite the promise therein made to
recognize the rights of those who bought lots from the plaintiffs, the
defendants herein have in bad faith filed and still are filing
ejectment proceedings against said buyers of lots; that plaintiffs did
not have sufficient time to understand the contents of said compromise
agreement before they consented thereto and signed the same; that said
agreement should be declared null and void ab initio because of
the “deceits, false and fraudulent representations, mistake and bad
faith perpetrated upon the herein plaintiffs by the defendants in
obtaining plaintiffs’ consent and signature to the compromise
agreement”; and that even if the same were valid, it should be
rescinded in view of defendants failure and refusal to pay said balance
of the amount stipulated in the agreement, after deducting the
P100,000.00 paid to the plaintiffs, who are willing to return this
amount, provided that the defendants in turn restore and deliver back
the twenty (20) quiñones of land delivered to them by the plaintiffs.
The latter, therefore, prayed that judgment be rendered:

“(1) Declaring that the so-called COMPROMISE
AGREEMENT is null and void and of no effect having been executed
through fraud, bad faith, deceit, and fake representations;

“(2) Declaring that the said COMPROMISE AGREEMENT (Annex ‘A’) is
rescinded because of the Defendants’ bad faith, failure and refusal to
abide by and comply with their obligations as stipulated in said
agreement;

“(3) Ordering the Defendants to return and give back
to the herein Plaintiffs the ownership and possession over the twenty
(20) quiñones of land received by the Defendants from the Plaintiffs,
the value of which is incapable of exact pecuniary estimation at
present;

“(4) Ordering the Defendants to render an
Accounting of the proceeds, benefits, fruits and promts derived by said
Defendants from the sales of lots in the Twenty (20) quiñones of land
owned and possessed by the Plaintiffs before the execution of the
COMPROMISE AGREEMENT (Annex ‘A’); the value of which is incapable of
exact pecuniary estimation at present;

“(5) Ordering the
Defendants that, after said accounting and after deducting the amount
of P100,000.00 previously received by the Plaintiff from the
Defendants, any balance in favor of the Plaintiffs be paid and turned
over to the Plaintiffs at the legal rate of interest until full and
complete possession is restored to the Plaintiffs;

“(6) Sentencing the Defendants to pay the Plaintiffs not less than Two Hundred Thousand (P200,000.00) Pesos as damages;

“(7) Sentencing the Defendants to pay the costs: and

“(8) Granting the Plaintiffs such other further relief as may be just, equitable and proper in the premises”.

Upon service of summons, the defendants filed separate motions to
dismiss for the motion that: (1) venue had been improperly laid in
Manila, the lard in question being located in Quezon City; (2) the
complaint states no cause of action; and (3) plaintiffs’ cause of
action, if any, is barred by a prior judgment and by the statute of
limitations. The Tuasons alleged, also, that, with respect to
plaintiffs Cirilo del Rosario, Donato Fajardo, Rufmo Guerrero, and
Eustaquio Alquiros, there is another action between the same parties
for the same cause of action. After due hearing, these motions wore
granted in an order dated March 24, 1962, upon the ground of improper
venue and lack of cause of action. A reconsideration of this order
having been denied, plaintiffs interposed the present appeal.

Plaintiffs maintain that venue had been properly laid in the Court
of First Instance of Manila, because the defendants are residents of
the City of Manila and the cause of action set forth in the complaint
is one for rescission of contract. This pretense is untenable, for
plaintiffs pray in their complaint that the defendants be ordered to
return and give back to herein plaintiffs the ownership and possession
over the twenty (20) quiñones of land received by the defendants from
the plaintiffs”. Pursuant to Section 3 of Rule 5 of the Rules of Court
and the decisions in Ruiz vs. Tuason (G. R. No. L-18692, January 31, 1963), Abao vs. Tuason (G. R. No. L-16796, January 30, 1962), Gavieres vs. Sanchez (94 Phil., 760), and Navarro vs.
Lucero (52 Off. Gaz., 7246), the present action should have been
instituted in the Court of First Instance of Rizal, the property in
dispute being located in Quezon City, which is within the territorial
boundaries cf the province of Rizal.

It moreover appears from Annex 1 to the Motion to Dismiss of the
Aranetas that, in G. R. No. L-13768 of this Court, between the same
parties herein, we rendered a decision, on May 30, 1961, affirming
certain orders of the Court of First Instance of Rizal in the
aforementioned Civil Cases Nos. Q-135, Q-139. Q-174, Q-177, and Q-187
thereof, rescinding the aforementioned compromise agreement, insofar as the obligation of defendants herein to make further payments to plaintiffs herein is concerned,
in view of the latter’s failure to turn over to the former, within a
reasonable time, as fixed by said court, the possession of the thirty
(30) quiñones of the property in dispute still undelivered to the
defendants. Such decision being already final, it follows that
defendants therein are no longer bound to make said payments to
plaintiffs herein; that defendants’ failure to make such payments does
not and cannot constitute a violation of said compromise agreement; and
that, accordingly, plaintiffs have no cause of action against
defendants herein.

It, likewise, appears, from the aforementioned decision in G. R.
No. L-13768, that, before approving the compromise agreement in
question and rendering a decision in conformity with the stipulations
therein, on April 10, 1953, the Judge presiding the Court of First
Instance of Rizal (Quezon City Branch), assumed himself personally that
the parties understood the contents of said agreement; that the same
was signed in the presence of the court; that the parties were then
assisted by their respective counsel; and that the parties and their
counsel even petitioned the court to implement the provisions of the
agreement. What is more, from April 10, 1953 to January 10, 1958, or a
period of approximately five (5) years, the following proceedings,
among others, took place in said court, for the implementation of said
agreement, to wit:

1. On April 6, 1956, plaintiffs filed a motion praying that the
   defendants be required to pay the balance of the first installment
   stipulated in the agreement, after deducting certain sums advanced to
   the plaintiffs prior thereto. On April 13, 1956, the defendants
   deposited in court said balance amounting to P79,800.00, and, at the
   same time filed a motion and “counter-manifestation” inviting attention
   to the constructions existing on the undelivered portion of the thirty
   (30) quiñones and praying that the plaintiffs be ordered to remove such
   constructions within fifteen (15) days, as well as to comply strictly
   with their obligation to maintain the status quo with respect
   to said portion of thirty (30) quiñiones, and to hold them liable for
   such damages as may result from their having granted permission to make
   additional constructions therein after March 16, 1953.

2. Soon later, or on April 27, 1956, the defendants filed a
   supplemental motion and “manifestation” praying that payment of said
   sum of P79,800.00 to the Deudors “be withheld until after the additional 129 illegal constructions in the 30 quiñones area shall have been removed.”

3. Subsequently, the Tuasons filed another motion and
   “manifestation”, dated August 8, 1956, to the effect that the number of
   illegal constructions on said area had increased to 165, that,
   meanwhile, several alleged purchasers from the Deudors, not mentioned
   in the annexes attached to the Compromise Agreement, had instituted
   Civil Cases Nos. Q-1889 and Q-1890 of the Court of First Instance of
   Quezon City, against the Deudors and the defendants herein, and that,
   in consequence of such cases, the amounts payable to the Deudors by the
   defendants may not be sufficient to satisfy the claims of the
   plaintiffs in said cases, and praying, therefore, that defendants’
   aforementioned “motion and counter-manifestation” and “supplemental
   motion and manifestation” of April 13, and 27, 1956, be resolved and
   that the sum of P79,800.00 be retained to answer for the claims of the
   alleged purchasers not mentioned in Annexes B and C of the Compromise
   Agreement.

   Hence, on February 28, 1957, the lower court issued an order
   requiring plaintiffs herein to clear and deliver to the defendants the
   peaceful possession of the thirty (30) quiñones in question within four
   (4) months and declaring that, in the event of failure on the part of
   the plaintiffs to comply with said order, the court shall issue such
   writs, orders and processes as may be necessary for the defendants to
   take possession of said thirty (30) quiñones.

4. On April 4, 1957, the Deudors filed a motion for reconsideration,
   stating that their failure to make delivery of the 30 “quiñones” was
   not due to their fault; that the period of four (4) months given them
   in the order of February 28, 1957, for the delivery of said portion, is
   too short; that the pendency of the other cases mentioned in
   defendants’ motion and manifestation dated August 8, 1956, rendered the
   aforementioned order premature; and that the Deudors are themselves
   entitled to an order directed to the Sheriff for the delivery to the
   defendants of the litigated property, and praying that said order of
   February 28, 1957, be so modified as to the delete therefrom all
   references to the four-month period for this delivery of the 30
   “quiñones” and to defendants’ discharge from their obligations under
   the comprcmisc agreement, and that the Sheriff be ordered “to clear the
   premises of said 30 ‘quiñones’ of all persons unlawfully squatting on
   or occupying the same or portions thereof.”

   The Aranetas in turn, filed a motion, dated August 16, 1957, alleging, inter alia,
   that the Deudors had not delivered the aforementioned portion of 30
   “quiñones”, despite the expiration of the period of four (4) months
   fixed in the order of February 28, 1957, and that, owing to the failure
   of the Deudors to make said delivery, the construction of houses by
   squatters within said area had continued so unabated that, as of August
   12, 1957, there were 341 constructions therein, and praying that an
   order be issued directing the Sheriff of Quezon City to place the
   defendants “in possession of the 30 ‘quiñones’ x x x ” now in the
   possession” of the Deudors, who were named individually in said motion.

5. On January 9, 1958, plaintiffs filed a “manifestation” in which
   they offered to deliver to the defendants those portions of the 30
   “quiñones” on which there were no actual occupants or squatters, as
   well as to cooperate with the defendants in pin-pointing the unoccupied
   and clear areas which they were ready to deliver and to join the
   defendants in the filing of appropriate suits for the ejectment of all
   persons unlawfully occupying portions of the remaining thirty (30)
   “quiñones” and/or handling negotiations directed to the same end.

By an order, dated January 10, 1958, the lower court denied the
motion for reconsideration of the Deudors and granted said motion of
the Aranetas dated August 16, 1957. This order was amended by another
one, dated January 21, 1958, which suspended the resolution of said
motion of the Aranetas in ccmpliance with a writ cf preliminary
injunction issued by the Court of Appeals.

Thus, for a period of five (5) years, plaintiffs herein failed to
assail the legality of the compromise agreement in question and even
actually induced the court to believe that the agreement had been
entered into by them freely find voluntarily, as well as with its full
knowledge of its contents. Moreover, upon plaintiffs’ motion,
defendants had to pay the first installment stipulated in the
compromise Agreement. Plaintiffs, likewise, urged the lower court to
render a decision in conformity with said agreement and to implement
the same, although the lower court refused to order the defendants to
pay the balance of the amount stipulated in the compromise agreement
and, instead, eventually relieved the defendants of the obligation to
pay said balance upon the ground that plaintiffs had not complied with
their own part of the agreement.

It is obvious from the foregoing that the question of validity of
said agreement was necessarily involved in the proceedings
aforemontioned and that the decision and orders issued in said case
G.R. No. L-13763 bar plaintiffs herein from new raising the same
question in the present case.

Wherefore, the order appealed from is hereby affirmed, with costs against plaintiffs herein. It is so ordered.

Bengzon, C. J., Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala, and Makalintal, JJ., concur.