SPS. VINCENT AND EVELYN ARDON, PETITIONERS, VS. SPS. CARLITO AND MILA G. OCAMPO, RESPONDENTS.
GALAPATE-LAGUILLES, J:
The relevant facts as culled from the records:
Sometime in 2006, Sps. Vincent and Evelyn Ardon (Sps. Ardon) were scouting for a building contractor for the construction of a two-story residential house in Olongapo City. They were later on introduced to the Sps. Carlito and Mila Ocampo (Sps. Ocampo) by a relative. The Sps. Ocampo easily won the trust of Sps. Ardon because Carlito Ocampo not only presented himself as an architect but also as a Pastor in the same church which the Sps. Ardon attended.[1]
Soon after or on March 24, 2006, the parties entered into a “Contract of Agreement” for the construction of the Sps. Ardon’s 2-story split-level residential house in the amount of three million two hundred thirty-five thousand and nine hundred pesos (P3,235, 900.00). Part of the parties’ agreement was that the workmanship on the structure must be “first class” and the same shall be turned over within four to five months[2] from the start of the construction.
Sps. Ardon religiously made periodic payments to the Sps. Ocampo based on the progressive billings submitted by the latter until the total payments reached three million three hundred and fifty four thousand six hundred fifteen and 10/100 (P3,354,615.10) pesos.
The Sps. Ocampo, unfortunately, failed to construct the house within the stipulated time for it was only on December 7, 2006 that the same was delivered to the Sps. Ardon. Also, Sps. Ocampo reneged on their commitment that the completed work will be “first class” in quality. It was also claimed that the Sps. Ocampo overcharged the Sps. Ardon by forty thousand pesos (P40,000.00) allegedly for the building permit as the actual cost thereof was merely nine thousand nine hundred fifty one and 53/100 (P9,951.53).[3]
On the other hand, Sps. Ocampo countered that their agreement with the Sps. Ardon was only for the construction of a conservative house; that they informed the Sps. Ardon of the costs of the materials and that it was only after the lapse of two months when the Sps. Ardon released the required down payment for the construction; that it was their agreement that additional amounts will be given by the Sps. Ardon in case of price adjustments; that Sps. Ardon kept on changing the details in the construction plans, thus, resulting to the delay in the completion of the construction; that on December 6, 2006, instead of paying the balance, the Sps. Ardon presented to the Sps. Ocampo for signing a Contract of Addendum stating that the balance for the construction cost will be paid only if the latter will comply with the said contract; and that there was no agreement among them as to the alleged ten (10%) retention fee.[4]
After trial on the merits, the court a quo rendered the assailed Decision dated July 4, 2012 the dispositive portion of which states:
WHEREFORE, judgment is rendered in favor of the plaintiffs and against the defendants ordering the latter to pay the plaintiffs:
- P67,494.20 as cost of the poor and unfinished work of the house;
- P100,000 as moral damages;
- P100,000 as exemplary damages; and
- P50,000.00 as attorney’s fees and litigation expenses.
Defendants counterclaims are DISMISSED
SO ORDERED.[5]
Sps. Ocampo filed the instant appeal faulting the court a quo with error in rendering the assailed decision in favor of the Sps. Ardon.
In a Resolution dated September 16, 2013, the instant case was referred to the Philippine Mediation Center- Court of Appeals (PMC-CA) unit for mediation.[6]
On January 16, 2014, Appellate Court Mediator Atty. Jack Andrew Miranda filed his Report indicating therein that the parties have settled their differences and that they have filed a Compromise Agreement[7]. The Compromise Agreement is quoted in its entirety:
COMPROMISE AGREEMENT
COME NOW the Parties and unto this Honorable Court, respectfully submit the following Compromise Agreement, to wit:
a. Parties agreed to settle the case in the amount of P25,000.00 as full settlement of the case. Respondents to pay Petitioners said amount in two years time from today.
b. Respondents likewise agreed to withdraw all the cases they have filed against Petitioners that are pending before the regular courts.
c. Both parties further agree that no further action base on the same ground be brought against each other in the future and that this agreement applies to all claims and damages or loses that either party may have against each other whether those damages or losses are known, or unknown, foreseen or unforeseen.
d. Parties voluntarily signed this Compromise Agreement, not being contrary to laws, morals and public policy.
WHEREFORE, it is respectfully prayed that the above Compromise Agreement be approved, the case be dismissed with prejudice, and this agreement be considered as the Decision in the above-entitled case.
Manila, January 16, 2014
A compromise agreement is a contract whereby the parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced.[8] It is an agreement agreement between two or more persons who, aiming to prevent or put an end to a lawsuit, adjust their respective positions by mutual consent. Reciprocal concessions are the very heart and life of every compromise agreement. Each party approximates and concedes a point in the hope of gaining, balanced by the danger of losing, its own advantage. It is, in essence, a contract. It is binding and has the force of law between the parties unless it is a void contract under Article 1409 of the Civil Code, or unless the consent of a party is vitiated (such as by mistake, fraud, violence, intimidation or undue influence) or when there is forgery, or if the terms of the settlement are so palpably unconscionable.[9]
After carefully reviewing the terms and conditions of the Compromise Agreement, We hold that the same is valid and freely entered into by the parties. Likewise, the same does not contain any provision that is contrary to law, public morals or public policy.
WHEREFORE, premises considered, the Compromise Agreement dated January 16, 2014 is hereby APPROVED and judgment is hereby rendered in accordance therewith. The Parties are enjoined to strictly abide by the terms and conditions stipulated upon in the said Compromise Agreement.
The instant appeal is now deemed CLOSED and TERMINATED.
SO ORDERED.
Punzalan Castillo, M.P., (Chairperson) and Lazaro-Javier, A.C., JJ., concur.
[1] Rollo, pp. 62-85; Appellees’ Brief, p. 2-3
[2] Supra
[3] Id at p. 3-4
[4] Rollo, pp. 25-37
[5] Id. at 50
[6] Id. at 96
[7] Id. at 99
[8] Article 2028, Civil Code
[9] Sps. Dela Cruz v. CA and Sps. Aguila, G.R. No. 151298, November 17,2004 citing Genova v. De Castro, G.R. No. 132076 & 140989, July 22, 2003