SPOUSES CRISOSTOMO MAGAT AND EDITHA A. MAGAT, PETITIONERS, VS. SPOUSES ALBERT M. DELIZO AND CARMINA H. DELIZO, REPRESENTED BY THEIR ATTORNEY-IN-FACT, EVANGELINE A. HERNANDEZ, RE…

Magat versus Delizo

The Case

This is the story of a sale of a house and lot, a compromise agreement, and a latecomer who tried to reopen a case already won. The spouses Crisostomo and Editha Magat, petitioners, sought to undo the judgment in a specific performance suit between the spouses Albert and Carmina Delizo, respondents, and the developer Slim Realty and Construction Incorporated. The Magats claimed the property had been sold to them and that the trial court never had jurisdiction because the dispute belonged to the Housing and Land Use Regulatory Board. The case matters because it settles two rules every civil procedure student must know: a motion to intervene filed after judgment is too late, and a compromise agreement approved by the court has the force of res judicata — finality of judgment — and must be executed as a matter of course.

Procedural History

The Delizo spouses filed a complaint for specific performance against Slim Realty and Simon Lim in the Regional Trial Court of Quezon City. At pre-trial, the parties entered into a compromise agreement, which the trial court approved. The court later ordered execution, the property was levied and sold to the Delizos, and a new title was issued in their favor. Years later, the Magat spouses filed a motion to intervene and a motion to declare the proceedings null and void for lack of jurisdiction. The trial court, persuaded, issued an order dismissing the case and nullifying all proceedings, including the compromise judgment. The Delizos went to the Supreme Court, which referred the matter to the Court of Appeals. The Court of Appeals granted the petition, set aside the trial court's order, and upheld the compromise. The Magats then brought a petition for review on certiorari to the Supreme Court, which affirmed the Court of Appeals.

Facts

On 9 November 1993, the Delizo spouses sued Slim Realty and Simon Lim for specific performance. They alleged that Slim Realty, through E. Lim, had sold them a piece of real property in Quezon City worth 900,000 pesos. They paid an initial 450,000 pesos, with the balance of 450,000 pesos payable at 17,653.50 pesos monthly. By 4 April 1993, only 4,543.28 pesos remained, but Simon Lim refused to accept payment until he delivered the title. Slim Realty failed to deliver the title, and the Delizos discovered the property had been mortgaged to Consolacion Coronel Maglalang.

Slim Realty answered that it was not bound to deliver the property until the Delizos settled their remaining balance. At the pre-trial on 7 April 1994, the parties entered into a compromise agreement: the Delizos would pay the balance of 4,543.28 pesos within ten days, and Slim Realty would deliver the title within forty-five days; the damages demanded were waived if the title was delivered within that period. The trial court approved the compromise and later ordered execution. The sheriff levied on the property, and it was sold to the Delizos as the only bidders. A final deed of sale was issued, and a new title was registered in their names.

Even as the compromise judgment was substantially executed, the Magat spouses filed a motion to intervene on 1 October 1997, claiming the property had been sold to them by Slim Realty on 21 March 1996. They then filed a motion to declare the proceedings null and void, arguing that the complaint involved a subdivision lot exclusively cognizable by the Housing and Land Use Regulatory Board under Presidential Decree 1344. The trial court agreed and nullified all proceedings for lack of jurisdiction. The Court of Appeals reversed, and the Magats elevated the case to the Supreme Court.

Issues

• Whether or not the subject matter of the case falls under the exclusive jurisdiction of the Housing and Land Use Regulatory Board under Presidential Decree 1344 rather than the regular courts.
• Whether or not the trial court erred in entertaining the Magats' motion for intervention filed after the compromise judgment had become final and executory and was in fact substantially executed.
• Whether or not the compromise agreement approved by the trial court should be implemented as a matter of course.

Applicable Provisions

Section 1 of Rule 19 of the 1997 Rules of Civil Procedure provides:

Section 1. Who may intervene. - A person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof may, with leave of court, be allowed to intervene in the action. The court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the intervenor's rights may be fully protected in a separate proceeding.

This provision defines who may intervene and directs the court to weigh delay and prejudice, which the Court applied against the Magats.

Section 2 of Rule 19 provides:

Section 2. Time to intervene. - The motion to intervene may be filed at any time before rendition of judgment by the trial court. A copy of the pleading-in-intervention shall be attached to the motion and served on the original parties.

This provision sets the deadline that the Magats missed, since they filed their motion long after judgment.

Ruling

On the first issue, the Court held that the subject matter did not fall under the exclusive jurisdiction of the Housing and Land Use Regulatory Board. The records showed no indication that the property was a subdivision lot or condominium unit. The complaint simply described "a piece of real estate," and the deed of sale described it as a house and lot. The controversy was therefore properly cognizable by the trial court.

On the second issue, the Court held that the motion for intervention was improperly entertained. Under Section 2 of Rule 19, it may be filed only before rendition of judgment by the trial court. The Magats filed theirs after the case had been decided and substantially executed. The intervention unduly delayed the proceedings and prejudiced the original parties, whose rights could be fully protected in a separate proceeding.

On the third issue, the Court held that the compromise agreement should have been implemented as a matter of course. A compromise approved by the court has the force of res judicata between the parties and should not be disturbed except for vices of consent or forgery. It is immediately executory and not appealable. It was therefore the ministerial duty of the trial court to enforce the compromise judgment, and any grievance of the Magats should have been ventilated in a separate proceeding.

Doctrine

A motion to intervene may be filed only before rendition of judgment by the trial court; one filed after judgment is too late and must be denied. A compromise agreement approved by the court has the force of res judicata — finality of judgment — and cannot be set aside except for vices of consent or forgery. It is immediately executory and not appealable, and its enforcement is a ministerial duty. Where the property is not shown to be a subdivision lot or condominium unit, the Housing and Land Use Regulatory Board has no exclusive jurisdiction, and the regular courts may hear the case.

Disposition

The Supreme Court affirmed the decision of the Court of Appeals, upholding the compromise judgment in favor of the Delizo spouses, with costs against the Magat spouses.

Remember This

Memorize this line: a compromise approved by the court has the force of res judicata and is immediately executory, and a motion to intervene filed after judgment is too late. Examiners use this case to test the timeliness of intervention under Rule 19 and the finality and enforceability of compromise agreements.