G.R. No. 126236, 26 January 2007
Petitioner Domingo Realty filed complaint with the against Antonio M. Acero, who conducted business under the firm name A.M. Acero Trading, David Victorio, John Doe, and Peter Doe, for recovery of possession of three (3) parcels of land. Defendants Acero and Victorio filed answer to the alleging that they merely leased the land from his co-defendant David Victorio, who, in turn, claimed to own the property on which the hollow blocks factory of Acero stood. In the Answer, Victorio assailed the validity of the TCTs of Domingo Realty, alleging that the said TCTs emanated from spurious deeds of sale, and claimed that he and his predecessors-in-interest had been in possession of the property for more than 70 years.
Mariano Yu representing Domingo Realty, Luis Recato Dy, and Antonio M. Acero, all assisted by counsels, executed a Compromise Agreement which contains the following:
- That defendants admit and recognize the ownership of the plaintiff over the property subject of this case;
- That defendant Luis Recato Dy admits and recognizes that his title has been proven not to be genuine and that the area indicated therein is inside the property of the plaintiff;
- That defendant Acero admits that the property he is presently occupying by way of lease is encroaching on a portion of the property of the plaintiff and assume[s] and undertakes to vacate, remove and clear any and all structures erected inside the property of the plaintiff by himself and other third parties, duly authorized and/or who have an existing agreement with defendant Acero, and shall deliver said portion of the property of the plaintiff free and clear of any unauthorized structures, shanties, occupants, squatters or lessees within a period of sixty (60) days from date of signing of this compromise agreement. Should defendant Acero fail in his obligation to vacate, remove and clear the structures erected inside the property of the plaintiff within the period of 60 days afore-mentioned, plaintiff shall be entitled to a writ of execution for the immediate demolition or removal of said structure to fully implement this agreement; and ejectment of all squatters and occupants and lessees, including the dependents to fully implement this agreement;
- That plaintiff admits and recognizes that defendant Luis Recato Dy bought and occupied the property in good faith and for value whereas defendant Acero leased the portion of said property likewise in good faith and for value hereby waives absolutely and unconditionally all claims including attorneys fees against both defendants in all cases pending in any court whether by virtue of any judgment or under the present complaint and undertake to withdraw and/or move to dismiss the same under the spirit of this agreement;
- That defendants likewise waive all claims for damages including attorneys fees against the plaintiff;
- That plaintiff acknowledges the benefit done by defendant Luis Recato Dy on the property by incurring expenses in protecting and preserving the property by way of construction of perimeter fence and maintaining a caretaker therein and plaintiff has agreed to pay Luis Recato Dy the amount of P100,000.00 upon approval of this agreement by this Honorable Court.
WHETHER OR NOT the judgment on compromise agreement should be set aside due to mistake.
Yes. Respondent Acero gave his consent to the Compromise Agreement in good faith that he would only vacate a portion of his lot in favor of petitioner Domingo Realty.
Prior to the execution of the Compromise Agreement, respondent Acero was already aware of the technical description of the titled lots of petitioner Domingo Realty and more so, of the boundaries and area of the lot he leased from David Victorio. Before consenting to the agreement, he could have simply hired a geodetic engineer to conduct a verification survey and determine the actual encroachment of the area he was leasing on the titled lot of petitioner Domingo Realty. Had he undertaken such a precautionary measure, he would have known that the entire area he was occupying intruded into the titled lot of petitioners and possibly, he would not have signed the agreement.
In this factual milieu, respondent Acero could have easily averted the alleged mistake in the contract; but through palpable neglect, he failed to undertake the measures expected of a person of ordinary prudence. Without doubt, this kind of mistake cannot be resorted to by respondent Acero as a ground to nullify an otherwise clear, legal, and valid agreement, even though the document may become adverse and even ruinous to his business.
Moreover, respondent failed to state in the Compromise Agreement that he intended to vacate only a portion of the property he was leasing. Such provision being beneficial to respondent, he, in the exercise of the proper diligence required, should have made sure that such matter was specified in the Compromise Agreement. Respondent Aceros failure to have the said stipulation incorporated in the Compromise Agreement is negligence on his part and insufficient to abrogate the said agreement.
* Case digest by Prince Dave C. Santiago, LLB-1, Andres Bonifacio Law School, SY 2017-2018