MARIO V. AMARANTE, PETITIONER, VS. COURT OF APPEALS AND ANTONIO VALENCIA, RESPONDENTS.

The issue in this petition for review is the validity of the
final order of the trial court disposing of the action for consignation which
the appellate court, in affirmance, considered as a judgment on oral compromise.

Since 1971 petitioner Mario V. Amarante has been the lessee of a
residential house situated at 132 Senciego Street, Pasay City, belonging to
private respondent Antonio Valencia. Petitioner and private respondent did not have a written contract of
lease over the premises but the rentals were paid on a monthly basis and
covered by the Rent Control Law.

On 7 January 1977, private respondent asked petitioner to enter
into a written contract of lease which inter
alia limited the period of the lease to 31 December 1977. Petitioner declined to sign the contract.

As a consequence, private respondent refused to accept further
payments of rentals, prompting petitioner to file on 14 April 1977 a Petition
for Consignation of Rentals^[1]
before the then City Court of Pasay, now Metropolitan Trial Court.

On 3 May 1977, private respondent moved for the dismissal of the
petition; it was denied. Thereafter, on
22 May 1977, private respondent filed his answer.

Meanwhile, on 3 June 1977, upon motion of petitioner, the trial
court enjoined private respondent from demolishing the leased premises.

After several postponements, the case was finally set for hearing
on 28 July 1977 during which the trial judge asked petitioner if he was willing
to vacate the premises. While petitioner
maintains that he answered “yes” but only if he could find another
suitable place at the same rate of rental,^[2]
private respondent contends that the acceptance of petitioner was absolute and
not subject to any condition.^[3]

At any rate, the trial judge apparently considered the
acquiescence of petitioner as an unqualified agreement or compromise to vacate
the premises by December 1977. Consequently, on 12 August 1977, the trial judge issued his questioned
order thus –

Considering the manifestation of the petitioner that he be given
until December 1977 within which to vacate the premises, this Court finds said
manifestation to be meritorious and the same is hereby granted.

WHEREFORE, the petitioner is hereby given up to December 1977
within which to vacate the premises and the defendant is hereby ordered to
accept the rentals to be made by petitioner x x x x

On 29 August 1977, petitioner moved for reconsideration but the
motion was denied on 22 September 1977 for lack of merit. A second motion for reconsideration was
likewise denied.

On 24 November 1977, petitioner instituted a Petition for Certiorari
before the then Court of First Instance of Rizal with station in Pasay City,
now Regional Trial Court.^[4] On
motion of private respondent however, the petition was dismissed on 23 December
1977 for being filed out of time.^[5]

Petitioner elevated the order of dismissal to the Court of
Appeals which, on 28 November 1978, affirmed the dismissal by holding that the
order of 12 August 1977 was a judgment based on an oral compromise. Thus, it was a final disposition of the
action filed before it. Any error
therefrom may be rectified only by means of an appeal, not certiorari. Since certiorari cannot be a
substitute for a lost appeal and Civil Case No. 5997-P was not filed within the
reglementary period, the dismissal of the petition was proper.

On 21 December 1978, the Court of Appeals denied reconsideration
of its decision. Petitioner thus comes
to us for relief contending that the order of 12 August 1977 is null and void,
hence, cannot attain finality. While he
admits having manifested to the trial court that he was willing to vacate the
leased premises by December 1977, nevertheless, this was on the condition that
another suitable place could be found at the same amount of rental. He argues that since he gave a conditional
answer, which constituted a mere counter-offer,^[6] it
was error on the part of the trial judge to conclude that he assented to
vacating the property in dispute as the parties had yet to come to an
agreement. Petitioner concludes that
the Court of Appeals must be faulted for ruling that the order of 12 August
1977 was a judgment based on an oral compromise.

We sustain the Court of Appeals. The order of 12 August 1977 was issued on the strength of the
manifestations made by the parties during the hearing of 28 July 1977,
particularly the statement of petitioner that he was willing to vacate the
leased premises by December 1977. The
records do not disclose any condition imposed by petitioner to his assent.

Considering that private respondent agreed to accept the monthly
rentals, the action for consignation was in effect terminated. As correctly held by the appellate court,
the order of 12 August 1977 was clearly a judgment based on an oral compromise,
which is valid.^[7]

Moreover, whether the trial court correctly interpreted the
manifestation of petitioner is no longer a triable issue; it is a question of
fact which is now final and binding upon this Court. After all, the rule is that more weight should be accorded the
impressions of the trial judge, especially in instances like the case at bench
where the trial judge had the opportunity to directly observe the demeanor of
the parties during the hearing from which he got his bearings for his questioned
order. In the absence of any showing of
arbitrariness in his conclusions,
they are judiciously accepted on appeal and are even considered conclusive on
the reviewing court.^[8]

Indeed, even petitioner himself is uncertain whether the trial
judge heard his additional manifestation imposing a condition, i.e., that he
would only vacate the property if he could find another suitable place for the
same rent, assuming ex arguendo that he did make such statement. As it is, petitioner admits that he merely
murmured his condition in open court and in a rather faint manner at that. Quite obviously, if at all petitioner
imposed such condition it could not have been effective as such since it was
apparently not intended to be heard; for, otherwise, we surmise that the lessor
could not have accepted such condition that was dependent solely upon the will
of the lessee. In other words, if he
does not have any intention to leave the leased premises, he will simply not
look for another place, even if there be one available and suitable for his
purpose and for same rent. Under the
factual milieu, respondent Court cannot be faulted for rejecting the contention
of petitioner. In fact, the ruling of
the trial court categorically states that petitioner manifested in open court
that he was willing to vacate the premises by the end of December 1977 sans any
qualification or condition.

Compromises are generally to be favored and cannot be set aside
if the parties acted in good faith and made reciprocal concessions to each
other in order to terminate a case.9 This holds true even if all the gains appear
to be on one side and all the sacrifices on the other.

Under the Rent Control Law, the prohibition against the ejectment
of a lessee by his lessor is not absolute. There are exceptions expressly provided by law, which include the
expiration of a lease for a definite period. In the instant case, it was noted that the rentals were paid on a
month-to-month basis. Thus, the lease
could be validly terminated at the end of any given month upon prior notice to
that effect on the lessee.10 After all, when the rentals are paid
monthly, the lease is deemed to be for a definite period, i.e, it expires at
the end of every month.12

Private respondent could have opted to eject petitioner from the
leased premises much earlier. Yet,
private respondent allowed petitioner to stay even after expiration of the
lease. As a consequence,
petitioner-lessee has remained in the premises for more than twenty (20) years,
much longer than what could have ever been intended by the parties. Perhaps it is time indeed to write finis to
this protracted lease that must have kept private respondent suffering in
anguish for the past two (2) decades.

In fine, the trial judge did not err in issuing his questioned
order of 12 August 1977. At the time
the parties made their respective manifestations, which effectively terminated
the action for consignation, the same was done freely, voluntarily and in good
faith, which is presumed, there being not the slightest hint to the contrary.

It may be worth to note that the petitioner failed to appeal from
the order of the then City Court of Pasay City; instead, he filed a petition
for certiorari with the then Court of First Instance, which was however
dismissed for late filing. As a
consequence, the order of the City Court which approved the compromise
agreement of the parties had become final and executory, hence, can no longer
be set aside. Finality of a judgment or
order becomes a fact upon the lapse of the reglementary period to appeal if no
appeal is perfected,13 and is
conclusive as to the issues actually determined and to every matter which the
parties might have litigated and have had decided as incident to or essentially connected with the subject matter
of the litigation, and every matter coming within the legitimate purview of the
original action both in respect to matters of claim and of defense.14

WHEREFORE, there being no reversible error in
the decision of respondent Court of Appeals, which affirmed that of the trial
court, the instant petition for review is DENIED.

This decision is final and immediately executory.

SO ORDERED.

Cruz, (Chairman), Davide, Jr., Quiason, and Kapunan, JJ., concur.

^[1]
Docketed as Civil Case No. 12521; raffled to Branch 2 of the City Court of Pasay
City.

^[2]
Brief for Petitioner, p. 4.

^[3]
Brief for Private Respondent, p. 6.

^[4]
Docketed as Civil Case No. 5997-P;
raffled to Branch 28.

^[5]
Annex “N,” Petition; Rollo,
p. 67.

^[6]
Art. 1319, New Civil Code.

^[7]
Cadano v. Cadano, No. L-34998, 11 January 1973, 49 SCRA 33.

^[8]
People v. Errojo, G.R. No.
102077, 4 January 1994.

10 Asong v. Intermediate
Appellate Court, G.R. No. 74461, 12 May 1989, 173 SCRA 299.

11 Inductivo v. Court of
Appeals, G. R. No. 108196, 19 January 1994.

12 Heirs of Dimaculangan
v. Court of Appeals, G.R. No. 68021, 20 February 1989, 170 SCRA 393.

13 City of Manila v. Court of Appeals, G.R. No. 100626, 29 November
1991, 204 SCRA 362.

14 MB Finance Corporation
v. Abesamis, G.R. No. 93875, 22 March 1991, 195 SCRA 592.