ISIDORO DE SANTOS, PETITIONER, VS. ALEX. REYES, JUDGE OF THE COURT OF FIRST INSTANCE OF MANILA, AND EL HOGAR FILIPINO, RESPONDENTS.

In his petition filed under section 499 of
the Code of Civil Procedure, the petitioner prays that the respondent
judge be compelled to approve and certify to this court the bill of
exceptions presented by him in civil cases Nos. 41033 and 43373 of the
Court of First Instance of Manila in connection with his appeal from
the order of January 16, 1937, entered in both cases.

The pertinent facts which gave rise to the petition are as
follows: On August 31, 1933, judgment was rendered in the former case
ordering the petitioner, then defendant, to pay to El Hogar Filipino
the sum of P636,658.74, plus the interest on the sum of P555,904.36 at
9 per cent per annum from August 1,1933, until fully paid, and
dismissing the petitioner’s cross-complaints and counterclaims, without
special pronouncement as to costs. Inasmuch as the judgment was based
upon the compromise agreement made by the parties, it was provided
therein, in accordance with the conditions set forth in the compromise,
that it shall not be executed by selling the mortgaged properties at
public auction in conformity with sections 256 and 257 of the Code of
Civil Procedure, as long as the conditions stipulated in paragraphs 4,
6 and 7 of the compromise are complied with; that the administration by
the receiver shall be subject to clauses 5, the last part of 7, and 8
of the agreement, and that in case the judgment has to be executed
pursuant thereto, or the agreement relative to the administration by
the receiver becomes ineffective for any cause whatsoever, the
mortgaged properties described in, paragraphs VII and VIII of the
complaint shall be sold in accordance with sections 256 and 257 of the
Code of Civil Procedure and the proceeds thereof applied to the unpaid
balance of the entire judgment. In paragraph 4 of the compromise
agreement, the parties stipulated that John Gordon, one of the
creditors of the petitioner, be appointed receiver of the properties
mortgaged by the latter, which post he shall occupy until his credit
becomes less than P10,000. It was agreed in paragraph 5 that the
receiver be granted, as monthly compensation, 3 per cent of the net
income of the properties under administration, the petitioner 16 per
cent, El Hogar Filipino 65 per cent as amortization of the petitioner’s
debt, the Bank of the Philippine Islands 7 per cent in the same
concept, and John Gordon 12 per cent also as partial payment of his
credit. It was stipulated in paragraph 6 that the judgment shall, in no
case, be executed within three years and while the annual net income of
the properties, estimated at P74,920.12 by the petitioner, does not
decrease by 5 per cent. It was stipulated in paragraph 7 that if at the
expiration of three years the creditors should have collected all the
accrued interest and not less than 25 per cent of their respective
credits, the suspension of the execution of the judgment shall be
extended two years, the properties to continue under administration.

In October 1936, El Hogar Filipino filed two motions praying that a
writ of execution of the judgment be issued; that the receiver be
ordered to render a final accounting; that the properties under
administration be turned over to the sheriff and that they be sold at
public auction to apply the proceeds thereof to .the unpaid balance of
the judgment. The grounds alleged therein were that the period of three
years had already elapsed and the net income produced by the properties
had decreased by more than the amount fixed in the compromise
agreement. The petitioner vigorously opposed these motions alleging,
among other grounds, that the judgment is null and void and cannot be
executed because it was based upon a compromise the estimates of which
had subsequently turned out to be erroneous, inasmuch as, according to
the accounts presented by the receiver, the net income estimated by him
at P74,920.12 per annum had been substantially reduced to P48,942.71,
and that in justice and equity the court should fix at twenty years the
period of time during which he should pay his debts and the
administration of his properties should continue. After hearing the
parties, the court, on January 16, 1937, issued the order in question
providing: That the receiver render a final accounting of his
administration; that he turn over the mortgaged properties under
administration to the sheriff of Manila, and that the judgment rendered
in civil case No. 41033 be forthwith executed by selling the mortgaged
properties at public auction and applying the proceeds thereof to the
unpaid balance of the judgment debt, deducting therefrom the payments
made by the receiver to the creditors on account of the capital and
interest thereon. The petitioner excepted to the order, announced his
intention to appeal therefrom and presented his bill of exceptions on
January 27, 1937. The attorney for El Hogar Filipino objected to the
approval of the bill of exceptions and on March 1, 1937, the court
issued an order disapproving it on the ground that, as the appealed
order was interlocutory in character, the appeal taken was premature.
This latter order gave rise to the present petition.

Counsel for the petitioner maintains that the order of January 16,
1937, is final and appealable because it is thereby attempted to
execute a judgment which the petitioner claims to be null and void on
the ground that it was based upon a compromise the principal facts of
which were stipulated through a substantial error, since, as already
stated, the estimate made by him of the annual net income had turned
out to be erroneous as shown by the accounts rendered by the receiver.
This court is of the opinion and so holds that his contention is
untenable. Section 123 of the Code of Civil Procedure provides that
incidental orders not definitely settling or concluding the rights of
the parties or creating a legal state between them are not appealable.
(Dais vs. Garduno and Altavas, 49 Phil., 165; Mendoza vs. Parungao, 49 Phil., 271; Vicencio vs. De Borja, 50 Phil., 148; Feliciano vs. Feliciano, 50 Phil., 552; Heirs of Gregoire vs. Baker, 51 Phil., 75; Sancho vs.
Lizarraga, 55 Phil., 601.) As the action in which the judgment was
rendered was for the foreclosure of a real estate mortgage, the title
to the property cannot be understood as transferred to the purchaser at
public auction until said sale has been approved by the court, in
accordance with the provision of section 257 of said Code. Therefore,
the order directing the issuance of a writ of execution of the judgment
is neither final nor appealable and the rights of the parties relative
to said sale have not yet been conclusively determined. (Banco
Espanol-Filipino vs. Amechazurra, 11 Phil, 166.)

Assuming, however, that the order in question were appealable,
there is another reason in support of the denial of the remedy applied
for, which is that if, as claimed by the petitioner, the nullity
invoked by him is based upon the error in his estimate of the net
annual income of the mortgaged properties, he cannot now set up such
error against El Hogar Filipino as a ground for annulment of the
judgment because the latter has withdrawn from the suit already begun,
as a consequence of the compromise made by them. (Art. 1817, paragraph
2, of the Civil Code; McCarthy vs. Barber Steamship Lines, 45
Phil., 488.) It would really be unjust to El Hogar Filipino to have the
judgment annuled only because the estimate made by the petitioner
proved erroneous. Furthermore the causes of the diminution of the net
income are not imputable to the former.

For all the foregoing, the petitioner’s petition is denied, with costs. So ordered.

Avancena, C, J., Abad Santos, Diaz, and Laurel, JJ., concur.

Villa-Real and Conception, JJ., concur in the result.