De los Santos vs. Yatco

A judge has jurisdiction to quash a writ of execution he has issued, particularly where it was improvidently issued, and where a breach of a compromise agreement is alleged by the opposing party, a hearing is required before execution may be decreed.

Pacita V. De los Santos and Jose V. de los Santos (plaintiffs) and Francisco Mendoñez (defendant) were parties to a sale by installment of a parcel of land in Quezon City, the subject of Civil Case No. Q-2664 before the Court of First Instance of Quezon City, presided over by respondent Judge Nicasio Yatco. The dispute centered on the enforcement of a court-approved compromise agreement governing the installment purchase and the effect of an alleged subsequent verbal modification of its terms.

Pacita V. De los Santos and Jose V. de los Santos (plaintiffs) and Francisco Mendoñez (defendant) were parties to a sale by installment of a parcel of land in Quezon City, pending before the Court of First Instance as Civil Case No. Q-2664. On December 9, 1957, the parties submitted a compromise agreement under which Mendoñez was to pay ₱1,000 on or before December 26, 1957, and ₱300 monthly installments within the first five days of every month beginning January 1958 until the balance was fully paid, with the balance bearing interest at 10% per annum. Failure to pay the ₱1,000 or any two successive monthly installments would entitle the plaintiffs to demand that Mendoñez immediately vacate the premises, with forfeiture in plaintiffs' favor of all previous payments made; if he refused to vacate voluntarily, plaintiffs could seek execution of judgment. Upon full payment, plaintiffs would execute the necessary absolute deed of sale in favor of Mendoñez. The court approved the agreement on December 10, 1957, and rendered judgment in accordance with its terms.

On March 10, 1958, plaintiffs filed a motion for execution, alleging that Mendoñez had failed to pay monthly installments since January 1958. The hearing was set for March 15, 1958, but on March 14, 1958, defendant moved for postponement to March 22, 1958 — with the conformity of plaintiffs' counsel — to allow the parties time to reach "a more just, fair and equitable agreement." The court granted the postponement. What transpired at the March 22 hearing was disputed: according to plaintiffs, Mendoñez admitted violating the agreement, was given two days to settle, but failed to do so; according to defendant, there was a misunderstanding. In any event, the court issued an order of execution on March 25, 1958.

On April 17, 1958, Mendoñez filed an urgent motion to quash the writ of execution, asserting under oath that immediately after the execution of the compromise agreement, he and plaintiff Pacita V. de los Santos had entered into a verbal agreement whereby she assured him that if he could pay the balance in full at one time through a GSIS loan — which she would facilitate — she would execute the necessary deed of sale and consider the compromise agreement's terms unenforceable against him. Mendoñez alleged that he applied for and secured the GSIS loan and advised plaintiffs on March 28, 1958, but Pacita de los Santos arbitrarily demanded ₱1,000 in attorney's fees plus the balance of ₱14,363 (excluding interest), all to be taken from the GSIS loan, and treated the ₱1,000 already paid as forfeited. After several conferences and failed settlement attempts — including a written manifestation on April 28, 1958, wherein Mendoñez offered to pay ₱13,563 as his balance indebtedness per the verbal agreement, which Pacita rebuffed by demanding ₱14,500 and refusing to credit the ₱1,000 already paid — the judge conducted a hearing on June 3, 1958. According to the judge, plaintiffs' counsel refused to attend, and Mendoñez proved the material allegations of his urgent motion. Convinced that there was no justification for the issuance of the writ of execution, Judge Nicasio Yatco quashed it by his order of June 4, 1958. Plaintiffs then filed the present petition for certiorari to revoke that order.

• Jurisdiction and Abuse of Discretion: Petitioners maintained that the respondent judge lacked jurisdiction or committed grave abuse of discretion in quashing the writ of execution, seeking certiorari to revoke the order of June 4, 1958.

• Jurisdiction to Quash: Whether the respondent judge had jurisdiction to quash the writ of execution he had previously issued.
• Grave Abuse of Discretion: Whether the respondent judge committed grave abuse of discretion in quashing the writ of execution.

• Jurisdiction to Quash: Yes. A judge has jurisdiction to quash a writ of execution issued by him, particularly where it was improvidently issued.
• Grave Abuse of Discretion: No. The judge committed no grave abuse of discretion, the defendant having alleged and proved a subsequent verbal agreement amending the compromise, which necessitated a hearing before execution could be decreed.

• Jurisdiction to Quash: Citing Dimayuga vs. Raymundo (76 Phil. 143) and Garcia vs. Muñoz (103 Phil. 628), the Court confirmed that a judge has jurisdiction to quash a writ of execution he issued, particularly where it was improvidently issued. The respondent judge therefore acted within his jurisdiction in quashing the writ.

• Grave Abuse of Discretion: There was no abuse of discretion for two reasons. First, because the defendant opposed execution and alleged and proved a subsequent verbal agreement amending the compromise, execution could not validly be decreed without a hearing. Citing Co. vs. Lucero (100 Phil. 160), when a breach of a compromise agreement is alleged, "there arises a cause of action which must be passed upon by the court requiring a hearing to determine whether such breach had really taken place." Second, the allegations proved by Mendoñez — the verbal agreement, his securing of a GSIS loan, and his consequent ability to discharge his obligation — seemingly justified the court's refusal to eject him, which would have resulted in forfeiture of more than ₱12,000 already paid as previous installments, not to mention the loss of the house and theatre erected on the land. Meanwhile, the judge's action caused no irreparable or undue harm to plaintiffs, who still held the judgment against Mendoñez, with the unpaid balance continuing to earn 10% interest.

• Jurisdiction to Quash One's Own Writ of Execution — A judge has jurisdiction to quash a writ of execution he has issued, particularly where it was improvidently issued. The Court applied this principle to uphold the respondent judge's quashal of the writ he had previously issued in the same case.

• Hearing Required When Breach of Compromise Is Disputed — When a breach of a compromise agreement is alleged by the opposing party, there arises a cause of action which must be passed upon by the court, requiring a hearing to determine whether such breach had really taken place. Execution cannot validly be decreed without such a hearing. The Court applied this rule where the defendant alleged and proved a subsequent verbal agreement amending the compromise, rendering premature the issuance of execution on the original compromise terms.

• "There is no question in this country that a judge has jurisdiction to quash a writ of execution issued by him, particularly where it was improvidently issued." — States the controlling rule on a judge's jurisdiction to quash his own writ of execution, the foundational basis for denying the petition.

• "when under similar circumstances a breach of the compromise agreement is alleged, 'there arises a cause of action which must be passed upon by the court requiring a hearing to determine whether such breach had really taken place.'" — Articulates the requirement for a hearing before execution may be decreed when breach of a compromise agreement is disputed, the ratio decidendi for finding no abuse of discretion.

• Dimayuga vs. Raymundo, 76 Phil. 143 — Controlling precedent establishing that a judge has jurisdiction to quash a writ of execution he issued, particularly where it was improvidently issued. Followed directly.

• Garcia vs. Muñoz, 103 Phil. 628 — Cited in further support of the rule on a judge's jurisdiction to quash his own writ of execution.

• Co. vs. Lucero, 100 Phil. 160 — Controlling precedent for the proposition that when a breach of a compromise agreement is alleged, a hearing is required to determine whether the breach actually occurred. Applied to justify the judge's refusal to order execution without first conducting a hearing.

Paras, C.J., Padilla, Montemayor, Bautista Angelo, Labrador, Endencia, Barrera, and Gutierrez David, JJ.