Xavierville III Homeowners Association, Inc. v. Xavierville II Homeowners Association, Inc.
REITERATIONFacts
The Antecedents: The underlying dispute involved a complaint for Injunction and Damages with Prayer for Preliminary Injunction and/or Temporary Restraining Order filed by Xavierville III Homeowners Association, Inc. (petitioner) against Xavierville II Homeowners Association, Inc. (respondent). The core issue was whether the Regional Trial Court (RTC) had jurisdiction over the complaint, or if it fell under the purview of the Housing Land Use Regulatory Board (HLURB). Procedural History: The respondent initially moved to dismiss the complaint before the RTC, arguing that the HLURB had exclusive jurisdiction. The RTC denied this motion. Aggrieved, the respondent filed a Petition for Certiorari and Prohibition with Application for Temporary Restraining Order and/or Preliminary Injunction before the Court of Appeals. The appellate court, in a Decision dated August 8, 2005, set aside the RTC's order, finding a defect in the verification of the petitioner's complaint and affirming that the case was cognizable by the HLURB. After the Court of Appeals denied the petitioner's motion for reconsideration, the petitioner filed the present Petition for Review before the Supreme Court. The Petition: The petitioner filed a Petition for Review before the Supreme Court, challenging the Court of Appeals' decision that divested the RTC of jurisdiction and asserted the HLURB's authority. However, during the pendency of the petition before the Supreme Court, the parties submitted a Joint Manifestation and Motion to Dismiss based on Compromise. They informed the Court that they had entered into a Memorandum of Agreement and a Supplemental Memorandum of Agreement, rendering the issues in the petition moot. Consequently, they prayed for the dismissal of the petition.
Issue(s)
Whether the issues in the present petition have been rendered moot by the parties' compromise agreement. Whether the Regional Trial Court (RTC) or the Housing Land Use Regulatory Board (HLURB) has jurisdiction over the complaint for Injunction and Damages.
Ruling
The petition is DISMISSED.
Ratio Decidendi
On the issue of mootness due to compromise agreement: The parties filed a Joint Manifestation and Motion to Dismiss based on Compromise, informing the Court that they had entered into a Memorandum of Agreement and a Supplemental Memorandum of Agreement. They posited that these agreements rendered the issues in the present petition moot and prayed for the dismissal of the petition. The Court granted their prayer, thereby dismissing the petition. On the issue of jurisdiction: While the parties' compromise agreement led to the dismissal of the petition, the Court, en passant, reiterated the principle regarding compromise agreements. Under Article 1306 of the Civil Code, contracting parties may establish stipulations as they deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. A compromise agreement, which involves reciprocal concessions to resolve differences and end litigation, is binding on the parties. However, to acquire the force of res judicata, a compromise agreement must be approved by a final order of the court. This principle was cited in relation to the parties' submission of their compromise agreement.
Main Doctrine
A compromise agreement, to have the force of res judicata, must be approved by a final order of the court.