De Guia v. Romillo, Jr.
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns an ejectment case filed by Angeles J. Montinola and Patria G. Jalandoni against numerous lessees, including Doroteo M. de Guia and Lorenzo Bacalla, who had occupied a residential property since 1952 on a month-to-month basis. The lessors sought to eject the lessees, stating their intention to develop the property for commercial purposes, specifically a market or supermarket. The lessees had constructed their residences on the premises with the lessors' consent and had not defaulted on rent payments, even consigning payments when the lessors refused to accept them. 2. Procedural History: The ejectment case was initially filed in the Municipal Court of Paranaque on May 17, 1973. After the parties submitted stipulations of facts, the Municipal Court rendered a decision on July 7, 1976, fixing the lease period for an additional three and a half years from the complaint's filing date, ordering the lessees to vacate by October 17, 1976. The lessees appealed to the Court of First Instance of Rizal, which affirmed the Municipal Court's decision on January 26, 1979. The lessees then elevated the case to the Supreme Court. 3. The Petition: The petitioners (lessees) filed a petition for review with the Supreme Court, arguing that Presidential Decree No. 20 prohibited their judicial ejection due to their indefinite leases and consistent rent payments. They also contended that Articles 1682 and 1687 of the Civil Code, which allow courts to fix lease periods, were suspended by PD 20. The Supreme Court found the petition without merit, noting that a Second Stipulation of Facts submitted by the parties effectively converted their verbal indefinite leases into written three-year contracts ending December 31, 1975, constituting a judicial compromise with the force of res judicata, which the lower court erroneously extended.
Issue(s)
Whether the lessees' verbal indefinite leases were converted into written lease agreements for a fixed period by virtue of a Second Stipulation of Facts submitted to the trial court. Whether the trial court erred in fixing the duration of the lease for three and a half (3-1/2) years instead of adhering to the period stipulated by the parties. Whether P.D. No. 20 suspends the application of Articles 1682 and 1687 of the Civil Code.
Ruling
The petition is denied for lack of merit. The Supreme Court affirmed the decision of the Court of First Instance, but corrected the duration of the lease as stipulated by the parties. The Supreme Court held that the Second Stipulation of Facts effectively converted the verbal indefinite leases into written lease agreements for a fixed period, which had the force of a judicial compromise and was immediately executory.
Ratio Decidendi
On whether the lessees' verbal indefinite leases were converted into written lease agreements for a fixed period by virtue of a Second Stipulation of Facts submitted to the trial court: The Supreme Court held that the Second Stipulation of Facts, submitted on April 8, 1974, contained admissions that effectively converted the verbal indefinite leases into written lease agreements for a fixed period. Specifically, the stipulation stated that the plaintiffs (lessors) entered into a separate written contract with each defendant (lessee) for a period of three years starting January 1, 1963, and ending on December 31, 1975. This stipulation was considered a judicial compromise, which has the force and effect of res judicata and is immediately executory. On whether the trial court erred in fixing the duration of the lease for three and a half (3-1/2) years instead of adhering to the period stipulated by the parties: The Supreme Court found the trial court's decision to be erroneous in fixing the lease period for three and a half (3-1/2) years from the filing of the ejectment complaint. The Court emphasized that a judicial compromise, like the stipulation of facts in this case, has the force of res judicata and cannot be modified or amended by the court. The trial court's role was to approve the agreement of the parties, not to create a new contract for them. Therefore, the lease period should have been adhered to as stipulated, which was three years from January 1, 1973, ending on December 31, 1975. On whether P.D. No. 20 suspends the application of Articles 1682 and 1687 of the Civil Code: While the petitioners argued that P.D. No. 20 suspended these articles, the Supreme Court's decision did not directly rule on this point as the primary basis for its ruling was the judicial compromise entered into by the parties. However, the Court's emphasis on the binding nature of the stipulation of facts, which established a fixed lease period, rendered the applicability of P.D. No. 20 and the Civil Code articles moot in this specific instance. The compromise agreement itself superseded the general provisions on lease duration, as it was a binding contract between the parties that the court was bound to uphold. The Court reiterated that a compromise judgment should not be disturbed except for vices in consent or forgery.
Main Doctrine
A stipulation of facts submitted to the court, which contains admissions regarding the terms of a lease agreement, has the force and effect of a judicial compromise and is immediately executory, with the force of res judicata. The court cannot alter the terms agreed upon by the parties in such a compromise.