Davac v. Court of Appeals
REITERATIONFacts
1. The Antecedents: The underlying dispute originated from a Complaint for Recovery of Ownership of Real Property filed by the petitioners against the private respondents. This case was docketed as Civil Case No. 293-A in the Regional Trial Court (RTC) of Antipolo, Rizal. The parties eventually submitted a Compromise Agreement to the trial court for approval. 2. Procedural History: The RTC approved the Compromise Agreement on January 2, 1987. Subsequent orders were issued by the trial court to facilitate the implementation of the agreement, including directives for land surveys. However, a motion was filed by the private respondents' new counsel to declare the Compromise Agreement and the approving Decision null and void, alleging that Paulo Fullante lacked the power of attorney to sign for the other respondents. On March 7, 1991, the trial court declared the Decision unenforceable against Epifanio, Antonio, and Edgardo Fullante. The petitioners' subsequent motion to declare the Judgment by Compromise ratified was denied on August 6, 1991, and a motion for reconsideration was also rejected on September 24, 1991. 3. The Petition: The petitioners filed a petition for certiorari under Rule 65 with the Court of Appeals, seeking to reverse the trial court's orders and to declare the Judgment by Compromise valid and binding. The Court of Appeals dismissed the petition on April 3, 1992, holding that the March 7, 1991 order was final and appealable, not subject to certiorari, and that the petition was an improper substitute for a lost appeal. The petitioners' motion for reconsideration was denied on June 4, 1992. The present petition for review on certiorari before this Court challenges the Court of Appeals' decision, arguing that it committed grave abuse of discretion in its rulings regarding the finality of the order, the appropriateness of certiorari, and the validity of the compromise agreement.
Issue(s)
Whether the Court of Appeals erred in holding that the Order dated March 7, 1991, declaring the compromise agreement and judgment by compromise unenforceable, was a final order and not merely interlocutory, thus making appeal the proper remedy instead of certiorari. Whether the Court of Appeals erred in denying due course and dismissing the petition for certiorari pursuant to Circular No. 2-90. Whether the Court of Appeals erred in not declaring the judgment by compromise as valid and binding between the parties, and not declaring private respondents in estoppel to question the validity of said judgment.
Ruling
The Supreme Court dismissed the petition for review on certiorari, affirming the decision of the Court of Appeals. The Court held that the Order dated March 7, 1991, which declared the compromise agreement and judgment by compromise unenforceable against certain defendants, was a final order. As such, it was appealable, and since no appeal was perfected within the reglementary period, it became final and unalterable. The subsequent motion to declare the judgment ratified was correctly denied by the trial court as it was an indirect attempt to assail the final order. Furthermore, the Court reiterated that a petition for certiorari under Rule 65 is not a substitute for a lost appeal and is only available to correct errors of jurisdiction, not errors of judgment.
Ratio Decidendi
On the nature of the Order dated March 7, 1991: The Supreme Court affirmed the Court of Appeals' ruling that the Order dated March 7, 1991, declaring the compromise agreement and judgment by compromise "unenforceable against the defendants Epifanio Fullante, Antonio Fullante and Edgardo Fullante" was a final order. A final order is one that disposes of the action or leaves nothing further to be done with respect to the merits of the case in the trial court. In this instance, the order definitively settled the enforceability of the compromise agreement against specific defendants, thereby terminating the case as to them. Consequently, the proper remedy for any aggrieved party was to file an appeal within the reglementary period. The Court emphasized that the unenforceability of the decision against the other private respondents could no longer be litigated once the Order attained finality. On the propriety of certiorari as a remedy: The Supreme Court reiterated that a petition for certiorari under Rule 65 of the Rules of Court is an extraordinary remedy that lies only to correct errors of jurisdiction, committed by a lower court without or in excess of its jurisdiction, or with grave abuse of discretion amounting to lack of jurisdiction. It is not a substitute for a lost appeal, which is the proper remedy for errors of judgment. Since the Order of March 7, 1991, was a final order disposing of the case with respect to certain parties, any challenge thereto should have been through an appeal. The petitioners' resort to certiorari was therefore procedurally incorrect. The Court noted that the subsequent motion to declare the judgment by compromise ratified was an indirect attempt to assail the final order, which the trial court correctly denied for lack of jurisdiction. On the alleged ratification and estoppel: The Court found no merit in petitioners' argument that the subsequent actions of the private respondents constituted ratification of the compromise agreement or that they were estopped from questioning its validity. The trial court's Order of March 7, 1991, had already declared the agreement unenforceable against most of the defendants. This order had attained finality and could not be revisited by the trial court, nor could it be circumvented by a motion for ratification. The grounds raised in the motion for ratification were substantially the same as those raised in the opposition to the motion to declare the agreement null and void, which had already been passed upon by the trial court in its final order. Therefore, the trial court correctly denied the motion for ratification, and the Court of Appeals did not commit grave abuse of discretion in upholding this denial.
Main Doctrine
A compromise agreement and the decision approving it, once declared unenforceable by the trial court through a final order, can no longer be assailed or ratified through subsequent motions, as the proper remedy would have been an appeal. A petition for certiorari under Rule 65 is not a substitute for a lost appeal and is only proper to correct errors of jurisdiction, not errors of judgment.