CANDIDA PIANO, PETITIONER, VS. GENEROSA CAYANONG, REGALADO BELLONES AND FRANCISCO PILAPIL, RESPONDENTS.

This is a petition filed by Candida Piano for certiorari to review the
decision of the Court of Appeals, affirming the order of the CFI of Leyte in
Civil Case No. R-608 entitled “>

This is a petition filed by Candida Piano for certiorari to review the decision of the court of Appeals, affirming the order of the CFI of Leyte in Civil Case No. R-608 entitled “Generoso Cayanong & Regalado Bellones, plaintiffs-appellees versus Candida Piano, defendant-appellant, with Francisco P. Pilapil, oppositor-appelle (CA-G. R. No. 15831-R).

The facts are stated in the decision of the Court of Appeals as follows:

“This is an appeal from the order of the Court of First Instance of Leyte
dated Oct. 22, 1954, denying the defendant-appellant the right to redeeni the
property under litigation.

“On March 17, 1952, the plaintiffs commenced an action to foreclose a
Mortgage executed by the defendant in favor of the plaintiffs upon a parcel of
land situated at sitio Ipil, Margen, Ormoc City.

“On July 29, 1952, the parties-litigant submitted a compromise agreement on
the strength of which the trial judge rendered the following decision:

‘Los demandantes y la demandaba ban sonetido la siguiente estipulacion:

” ‘Come now, the undersigned plaintiffs and defendant of the above entitled
case and to this Honorable Court respectfully allege:

“‘1. That the defendant
admits the debt as embodied in the contract in the amount of Two Thousand Pesos
(P2,000.00), Philippine Currency;

“‘2. That the defendant agrees to pay the amount of Four Hundred Pesos
(P400.00) as costs and attorney’s fees of this action and, expenses of
litigation;

“‘3. That the defendant promises to pay the above amount within 30 days from
promulgation of the judgment rendered by the court based on this compromise
agreement;

“‘4. That the defendant agrees that, failure to pay said amount within 30
days, places at the disposal of the court said security for the satisfaction of
the judgment.

“‘Wherefore, it is most respectfully prayed that judgment be rendered in
accordance with the above mentioned agreement without costs.”

‘En su virtud, el Juzgado dicta sentencia condenando a la demandada Candida
Piano a pagar a los demandantes Generosa Cayanong y Regalado Bellones la suma de
P2,000.00 como deuda, mas la cantidad de P400.00 como costas y honorarios de
abogado dentro del plazo de noventa (90) dias a partir desde la fecha de este
decision. Si dentro del referido plazo la demandada dejara de pagar la suma
total de P2,400.00 mencionada, el juzgado ordenara que la parcela de terreno
hipotecada, conocida como Lote No. 6272 parte del Catastro de Ormoc, ubicada en
el sitio de Ipil, barrio de Margen, Ciudad de Ormoc, colindante por el Norte con
los herederos de Cirilo Cabahug y Nemesio Maglasang; por el Sur, con Lazaro
Aying; y por el Ceste, con los herederos del finado Manuel Martinez, amillarada
a nombre de Candida Piano, se venda en subasta publica y que con el producto de
la venta se pague la cantidad de P2,400.00 a los demandantes.’

“The defendant failed to pay the obligation within the period set by the
court; so the property in question was sold at public auction on Jan. 30, 1952
(should be 1953) per order of the court, by the deputy sheriff of Maasin, Leyte,
to the plaintiffs, they being the only bidders for P2,475. The certificate of
sheriff’s sale contained the provision that the said property is subject ‘to
redemption within one year from the date hereof in the manner provided by the
law applicable to the case.’ On March 11, 1953, the plaintiffs filed a motion
for the confirmation of the sale executed by the sheriff, which was unopposed by
the defendant. The sale was confirmed by the Court on March 21, 1953.
Thereafter, the plaintiffs filed a petition for a writ of possession by virtue
of such petition the court adjudicated possession to the plaintiffs on Aug. 15,
1953. On Aug. 20, 1953, the deputy clerk issued the writ of possession prayed
for by the plaintiffs.

“On Jan. 26, 1954, the defendant deposited with the court the sum of
P2,783.93, P2,772 of which was in the concept of redemption deposit to be
delivered to Generosa Cayanong and her husband, and P11.93 for consignation
fees. On the same day, the defendant filed a motion asking the court to order,
the plaintiffs to make an accounting of all rents and/or profits of the said
property for the period of their possession. On Feb. 14, 1954, the plaintiff
filed with the court required verified accounting, and at the same time informed
the court that on Jan. 27, 1954, in Albuera, Leyte, a junior encumbrancer,
Francisco Pilapil, had redeemed the property by paying them the amount of
P2,772, one day after the defendant deposited with the court her redemption
money. The instrument of redemption is Exh. I, Redemption of a Lien Holder of a
Foreclosed Mortgage. The oppositor Francisco Pilapil, on Feb. 11, 1954 filed an
opposition to the defendants’ motion of Jan. 26, 1954, claiming that the
property, subject of foreclosure, having be&n sold at a Judicial foreclosure
sale, was not subject to redemption after the Judicial sale was confirmed, title
thereto having been fully vested and consolidated in favor of Cayamong and
Bellones, their assignees and successors-in-interest.

“A month later, the defendant filed another motion questioning the adequacy,
of the accounting, filed by the plaintiff and reiterad her prayer for the
reconveyance to her of the property in question; the oppositor and the
plaintiffs filed their respective oppositions to this motion. On Oct. 22, 1954,
the court a quo issued an order denying the defendant the right to redeem
the property in dispute.”

The first question raised in this appeal is whother the decision of the lower
court based on the compromise agreement of the parties, is a judgment Tendered
after trial within the contemplation of Section 2 of Rule 70 of the Rules of
Court and the Constitution.

Petitioner argues that a judgment in a foreclosure of mortgage under said
Section 2 of Rule 70 requires a trial on the merits before the property
foreclosed shall be disposed by sale, but since the parties at bar submitted a
compromise, agreement upon which the trial court rendered its decision, the same
does not satisfy the requirement of the Constitution for failure to state the
law and the facts of the case.

The contention is devoid of merit. The court a quo had no necessity of
making a finding of facts, the parties having entered into a compromise
agreement in order to terminate the suit between them. The agreement had upon
the parties the effect and authority of res judicata (Art. 2037, New Civil Code;
Yboleon vs. Sison, 59 Phil. 281, 290; Hernandez vs. Barcelon, 23
Phil. 599, 607; De Jesus vs. Go Quiolay, 65 Phil. 476, 482; Meneses
vs. De la Rosa, 77 Phil. 34, 38; Salazar vs. Jarabe 91 Phil., 596,
48 Off. Gaz. 2708, 2712; Morales vs. Fontanos, 64 Phil. 19, 21), and the
judgment rendered thereon had the authority of res judicata from the moment it
was rendered (Meneses vs. De la Rosa, supra; Morales vs. Fontanos,
supra). In the absence of an objection to the agreement, it was the duty of the
trial court to render judgment strictly in accordance with the terms of the
agreement (Cabrera vs. Lacson, 71 Phil. 182), and such judgment is more
than a mere contract binding the parties because having the sanction of the
court, and entered as its determination of the controversy, it has all the force
and effect of any other judgment, it being conclusive upon the parties and their
privies (Marquez, vs. Marquez, 73 Phil, 74).

Petitioner, in further support of her contention cites the case of Susaniada
vs. Mata (49 Off. Gaz., 77) where this court held that an agreement
between the parties sanctioned by the court to adjust a litigation, does not
have the effect of a final judgment or character of res judicata, because the
court’s approval of the agreement is considered mainly as an administrative
recording of what has been agreed to between the parties.

The above cited ease is not in point for the parties therein agreed “that the
land to be taken by the plaintiff shall be segregated by a duly qualified
surveyor” and this Court held that the “judgment was merely an interlocutory
order because something had yet to be done, i.e., the segregation agreed upon,
whieh’togfcther with the court’s approval, will be the ones to give it
finality”. In the case at bar the decision of the lower court sentencing the
petitioner to pay the amount she had agreed upon to pay was final and nothing
else was to be done in order to make her liable for said payment. A judgment on
a compromise is not appealable and is immediately executory unless a motion is
filed to set aside the compromise on the ground of fraud, mistake, or duress in
which event an appeal may be taken from the order denying the mption. (De los
Reyes vs. De Ugarte, 75 Phil., 505; Enriquez vs. Padilla, 77 Phil.
373; Serrano vs. Reyes, 110 Phil., 536).

There being no motion to set aside the compromise agreement, we believe, and
so hold, that inasmuch as the petitioner admitted her indebtedness and agreed to
pay the attorneys fees and the entire obligation within 30 days from the
promulgation of the judgment, and having further agreed that in case of default
the security would be at the disposal of the court for the satisfaction of the
judgment, the lower court did not have the necessity to make findings of fact,
it being sufficient that the case was decided on the agreed compromise between
the parties.

Petitioner next maintains that the decision of the trial court based upon the
compromise agreement should be enforced by execution as an ordinary judgment
under Rule 89 of the Rules of Court and not under Rule 70.^[1] It is argued that Article 2037 of the New
Civil Code on compromise agreements does not make any distinction between
ordinary civil actions and foreclosure proceedings, and since the procedure
under Rule 70 is strict, in that it grants only an equity of redemption of 90
days, whereas Rule 39 grants a one year period of redemption, the latter rule
should prevail, the intention of the law apparently being to give clemency or
leniency to the debtor who earnestly submits to a compromise and spares the
court of a lengthy trial.

The contention is untenable. An examination of the complaint filed in the
lower court will reveal that the action filed by the plaintiffs, respondents
herein, is one for foreclosure of mortgage. It is a settled rule that the
purpose of an action or suit and the law to govern it, including the period of
prescription, are to be determined not by the claim of the party filing the
action, made in his argument or brief, but rather by the complaint itself, its
argument or brief, but rather by the complaint itself, its allegations and
prayer for relief (Rone vs. Claro, 91 Phil., 250). The mere silence of
Article 2037 (supra), as to whether the compromise refers to an ordinary civil
action or a foreclosure proceeding, does not justify execution under Rule 39
when the case directly falls under Rule 70. No judgment rendered in an action
for foreclosure of mortgage can be executed, otherwise than in the manner
prescribed by the law on mortgages, for the reason that parties to an action are
not authorized to change the procedure which it prescribes. (Diaz vs.
Mendezona, 43 Phil. 472, 478).

The petitioner also maintains that the appellate court erred in not
considering the insertion made by the Sheriff in the certificate of sale
providing for a one year period of redemption, as a permissible agreement
between the parties who abide by said period, considering that the court a quo
approved and confirmed the saleand respondents did not move to have said
insertion stricken out.

The argument cannot be sustained. In a foreclosure of mortgage under Rules of
Court, there is no right of redemption after the sale is confirmed (Benedicto
vs. Yulo, 26 Phil. 160, 166), although there is an equity of redemption
in favor of the mortgagor or junior encumbrancer, consisting in the right to
redeem the mortgaged property within the 90 day period (Sun Life Assurance Co.
of Canada vs. Gonzales Diez, 52 Phil. 271), or even thereafter, but
before the confirmation of the sale (Anderson vs. Reyes, 54 Phil. 944;
Reymundo vs. Sunico, 25 Phil. 365; Griwalt vs Velasquez, 36 Phil.
936; La Urbana vs. Belando, 54, Phil. 930, 933). It is only in cases of
foreclosures of mortgages in favor of banking and credit institutions (Sec. 76,
General Banking Act [Rep. Act 337], to the Philippine National Bank (Acts No.
2747, and 2938), and in extrajudicial foreclosures (Act 3135, as amended by Act
4118), where, by express provision, the law allows redemption. In all other
foreclosure cases, there is no legal redemption. The sheriff, therefore, has no
authority to grant or insert a period of redemption in the certificate of sale,
when the same is conducted pursuant to Rule 70 and, wanting in said authority,
any insertion therein has no validity and effect. Once the judicial sale is
confirmed by the court, the rights are vested in the purchaser (Sec. 3, Rule
70). From all that appears on the record, the insertion referred to is, as the
appellate court correctly declared, “a surplusage and must be disregarded”.

The petitioner also maintains that the Court of Appeals erred in not
declaring null and void the entire certificate of sheriff’s sale upon finding
that the sheriff’ had no authority to embody in his certificate what is not in
the substance of the decision. Petitioner cites the decisions of this Court in
Silvestre vs. Torres (57 Phil. 885) and Velez vs. Martinez (63
Phil., 23) wherein we held in effect that a writ of execution not warranted by
the decision or judgment which gives life or cause to exist has no validity.

The cases cited are not in point because the writs of execution totally set
aside there were against persons not parties to the action and hence the writs’
invalidity is as a whole. The certificate of sale involved in this present
appeal is in complete accordance with the judgment of the court and the writ of
execution, the only defect being the unauthorized insertion of the period of
redemption.

It is also petitioner’s contention that the one year period of redemption in
the certificate of sale duly approved by the trial court constituted a repeated
assurance of the right of petitioner to redeem within the year and should have
been considered as a “special circumstance” to allow the redemption beyond the
period fixed by law, applying by analogy the doctrines in Lichauco vs.
Olegario (43 Phil. 540); Rivero vs. Rivera, (80 Phil. 802); Alberto
vs. De los Santos (81 Phil. 52); Facundo vs. Provincial Sheriff of
Mindoro, (CA G.R. No. 421-R, February 28, 1950); and Bautista vs. Ago
(CA-57 O.G. 4927).

The contention is untenable. The cases cited are not applicable. In Lichauco
vs. Olegario (supra), a period of redemption existed and was interrupted
when the execution debtor wanted to prevent it by executing on the right to
redeem, and this Court, considering the legal proceedings therein as special
circumstance, extended the period of redemption. In the present case, being a
judicial foreclosure of mortgage, there is no period of redemption, or legal
proceedings or interruption thereof. On the other hand, the decisions in Rivero
vs. Rivero (supra), and Alberto vs. De los Santos, (supra), far
from supporting petitioner’s case militate against it, for in these two cases,
this Court declared that the fundamental reason under lying statutes providing
for the suspension or extension of the period of limitation is the legal or
physical impossibility for the interested party to enforce or exercise in time
his right of action. In the case at bar, the one year period of redemption
erroneously included by the sheriff did not constitute a legal or physical
impossibility for herein petitioner to pay the indebtedness and redeem the
property before the confirmation of the sale, because the one year redemption
period erroneously inserted in the certificate of sale would, if proper,
commence to take only after the confirmation. Obviously this after effect could
not be said to have impeded, legally or physically, what should have been
accomplished before.

In view of the above conclusions we have arrived at, we find it unnecessary
to pass upon the other errors assigned by the parties in their brief.

Finding no error in the decision appealed from the same is hereby affirmed,
with costs against petitioner. So ordered.

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

^[1] A compromise agreement has upon
the parties the effect and authority of res judicata; but there shall be
no execution except in compliance with a judicial compromise.