TESSIE H. AGUNAN, GEORGE HARRY, RAMIL SUENO, IMELDA SUENO AND CARMELITA SUENO, PETITIONERS, V. JUDGE CARLITO A. CORPUZ AND HON. JUDGE EDILBERTO T. CLARAVALL, PRESIDING JUDGE, RE…

Agunan versus Corpuz

The Case

This is a petition filed with the Supreme Court by Tessie Agunan, George Harry, Ramil Sueno, Imelda Sueno, and Carmelita Sueno against Judge Carlito Corpuz and Judge Edilberto Claravall, arising from a dispute over legal fees and a parcel of land in Baguio City. The petitioners challenged the orders of the respondent judges in the proceedings below. The case matters because it shows how the Supreme Court treats a compromise agreement reached through court-annexed mediation: once the parties settle, the Court will approve the agreement as the judgment itself and close the case for good.

Procedural History

The petitioners filed a petition with the Supreme Court. On February 23, 2011, the Supreme Court issued a Resolution referring the petition to the Philippine Mediation Center of the Court of Appeals for mediation. The Center assigned the case to Atty. Danilo Cunanan, who, through skillful mediation, achieved a successful settlement between the petitioners and the private respondent, Judge Carlito Corpuz. The mediator submitted a Mediator's Report, to which was attached the Compromise Agreement executed by the parties. The Supreme Court then acted on that agreement.

Facts

The petitioners were clients of the private respondent, Judge Carlito Corpuz, who had rendered legal services in their favor involving their rights over a property formerly covered by Transfer Certificate of Title Number T-17648 of the Registry of Deeds of Baguio City, then registered in the name of the Heirs of Harry Balong. The parties became embroiled in a dispute over the private respondent's fees, and the matter reached the Supreme Court by petition.

The Supreme Court referred the petition to the Philippine Mediation Center of the Court of Appeals for mediation. Through the efforts of the mediator, Atty. Danilo Cunanan, the parties reached an amicable settlement and signed a Compromise Agreement.

Under the agreement, the petitioners recognized and acknowledged the legal services rendered by the private respondent. They likewise recognized his rightful entitlement to contingent fees which, as regards the petitioners' share, amounted to 1,380 square meters, which they undertook to deliver and convey to him upon the final termination of all cases involving the subject property then pending in different courts and government agencies in Baguio City. The parties further agreed that should the petitioners fail to deliver and convey the 1,380 square meters, the private respondent would be entitled to the issuance of a writ of execution of the Compromise Agreement upon motion filed before the Regional Trial Court, Branch 60, Baguio City, in the civil case entitled Judge Carlito A. Corpuz versus Register of Deeds of Baguio City and others.

Issues

• Whether or not the Compromise Agreement executed by the parties through court-annexed mediation may be approved by the Supreme Court.
• Whether or not the terms of the Compromise Agreement are contrary to law, morals, good customs, public order, or public policy.
• Whether or not the Compromise Agreement and its terms may be adopted as the judgment in the case, warranting the closure and termination of the petition.

Applicable Provisions

The decision does not quote any statutory provision. It applies the settled rule that a compromise agreement is a contract, and that a judgment based on a compromise is valid only when its terms are not contrary to law, morals, good customs, public order, or public policy. The Court tested the agreement against that standard and found it compliant.

Ruling

On the first issue, the Court approved the Compromise Agreement. The parties had amicably settled their respective claims and counterclaims, and the Court gave effect to that settlement.

On the second issue, the Court held that the terms of the Compromise Agreement are not contrary to law, morals, good customs, public order, or public policy. The Court stated:

Such terms of the "Compromise Agreement" are shown not to be contrary to law, morals, good customs, public order or public policy.

On the third issue, the Court adopted the Compromise Agreement and its terms as the judgment in the case, and enjoined the parties to abide by the Agreement in good faith. Consequently, the Court considered the petition closed and terminated.

Doctrine

A compromise agreement reached by the parties through court-annexed mediation may be approved by the Supreme Court and adopted as the judgment in the case, provided its terms are not contrary to law, morals, good customs, public order, or public policy. Once approved, the agreement binds the parties, who are enjoined to abide by it in good faith, and the case is closed and terminated. A Bar candidate should state the rule as the Court did: the agreement is approved, its terms are adopted as the judgment, and the parties must comply in good faith.

Disposition

The Supreme Court approved the Compromise Agreement, adopted it as the judgment in the case, enjoined the parties to abide by it in good faith, and considered the petition closed and terminated.

Remember This

The single line worth memorizing is that a compromise agreement whose terms are not contrary to law, morals, good customs, public order, or public policy is approved and adopted as the judgment, and the case is closed and terminated. Examiners like to use this case to test the effect of a compromise agreement reached through court-annexed mediation and the finality it brings to litigation.