Aguilar v. Masakayan
REITERATIONFacts
The Antecedents: Petitioner Federico Aguilar obtained a money judgment against respondent Rene Knecht for P10,922.50, plus interest, attorney's fees, and costs, for the unpaid balance of a tapestry. Upon a writ of execution, three polo horses belonging to respondent were levied upon. Procedural History: Respondent paid P13,511.65, leaving a balance of P1,132.55, which included sheriff's fees and expenses. Respondent questioned these fees and sought the lifting of the attachment. During a chambers conference, petitioner's counsel agreed to lift the attachment if respondent paid a reduced sum of P500.00 as a compromise settlement on the same day. Respondent's counsel did not accept the proposal. The Petition: Two days later, the respondent court issued an order declaring the case terminated upon respondent's payment of P500.00, despite the prior rejection of the offer. Petitioner moved to set aside this order, arguing that the offer was conditional and withdrawn upon non-acceptance. The respondent court denied the motion. Petitioner filed a petition for certiorari to annul the orders and enforce the remaining balance of his judgment credit.
Issue(s)
Whether a rejected or expired offer of compromise remains binding and can be enforced by a court to modify a final and executory judgment. Whether the trial court has the jurisdiction to reduce the amount due under a final judgment for the purpose of avoiding its full enforcement.
Ruling
The petition is meritorious. The writ of certiorari is granted. The respondent court's orders of April 17, 1967, and May 10, 1967, are declared null and void and set aside. Respondent is declared still indebted to petitioner under the final judgment in the sum of P1,132.55 with interests from April 17, 1967, at the rate of 12% per annum until fully paid. The respondent court is directed to issue the corresponding writ of execution.
Ratio Decidendi
On Issue 1: The Court ruled that the petitioner's proposal to accept P500.00 was strictly conditioned upon the respondent's acceptance and payment on the day of the conference (April 15, 1967). Under Article 1319 of the Civil Code, consent is manifested by the meeting of the offer and the acceptance; the offer must be certain and the acceptance absolute. Since the respondent's counsel did not choose to accept the offer within the time limit provided, the petitioner was entitled to consider the offer withdrawn. A party cannot be permitted to impose a change of mind on the offeror after the initial rejection or the lapse of the specified condition. Consequently, the respondent court erred in treating the rejected offer as a binding agreement two days after it was made. On Issue 2: The Court emphasized that once a judgment becomes final and executory, the trial court's jurisdiction is limited to its enforcement. To alter or modify such a judgment for the purpose of avoiding its full enforcement against the judgment debtor is a grave abuse of discretion and beyond the court's authority. Citing Macondray & Co., Inc. vs. Bernabe, the Court clarified that sheriff's fees and custodian's expenses incurred during the attachment are part of the costs which the prevailing party is entitled to recover as reimbursement. The respondent court could not unilaterally reduce these costs by declaring the case terminated upon payment of a lesser sum without the petitioner's express consent, especially as the petitioner had already advanced these lawful expenses to the sheriff.
Main Doctrine
A compromise settlement offer, if not accepted within the stipulated time, is deemed withdrawn and cannot be imposed upon the offeror thereafter. A court exceeds its jurisdiction in modifying or altering a final and executory judgment to avoid its full enforcement.