The Learning Child, Inc. vs. Lazaro

A compromise agreement that is not contrary to law, good morals, public order, or public policy shall be approved by the Court, and upon such approval, the parties are enjoined to comply with its terms and conditions, with the case being declared closed and terminated.

The case arose from a complaint for alleged illegal dismissal with a prayer for reinstatement, full backwages, and moral and exemplary damages filed by respondents Annie Lazaro and Gorgonia Ledesma against petitioners The Learning Child, Inc. and Regina Alfonso before the Labor Arbiter. The dispute concerned an employer-employee relationship that resulted in a labor adjudication against the petitioners.

Petitioners The Learning Child, Inc. and Regina Alfonso, through counsel, filed with the Supreme Court on June 16, 2000, a motion for thirty (30) days extension of time, or up to July 17, 2000, to file a petition for review on certiorari assailing the Decision dated May 24, 2000 of the Court of Appeals in CA-G.R. No. 52788. The motion was granted by the Court in a Resolution dated July 17, 2000.

On even date, petitioners, with the conformity of the respondents, filed a Manifestation With Motion (For the Approval of Attached Compromise Agreement). Attached to the Compromise Agreement were several annexes: Annex "B," a Special Power of Attorney executed by the Acting Corporate Secretary Mary Anne Alfonso of petitioner The Learning Child, Inc., appointing the law office of Zulueta, Puno, and Associates, as represented by Atty. Patricia Grace A. Gustilo, to be its attorney-in-fact to represent it at the compromise and settlement of the case; Annex "C," the Special Power of Attorney executed by petitioner Maria Regina Alfonso appointing the same law office as her attorney-in-fact; and Annex "D," a Secretary's Certificate stating that the Board of Directors of The Learning Child, Inc. resolved to appoint said law office as the corporation's attorney-in-fact.

The duly notarized Compromise Agreement provided that the case arose out of a complaint for alleged illegal dismissal with a prayer for reinstatement, full backwages, and moral and exemplary damages filed by respondents against petitioners before the Labor Arbiter. The Court of Appeals had rendered a Decision on May 24, 2000, affirming the Resolution dated January 19, 1999, rendered by the NLRC, adjudging petitioners liable to respondents in the total amount of ₱291,060.00. The parties manifested their desire to settle the case amicably.

Under the terms of the Compromise Agreement, petitioners bound themselves to pay respondents the amount of ₱260,000.00 in full and complete settlement of the amount due them. Respondents accepted this amount as full settlement and agreed to waive any and all claims which they may have now or in the future against petitioners, considering the settlement as final and executory, and undertaking not to institute any other case or suit of whatever nature against petitioners arising out of the same matter. Petitioners likewise agreed not to institute their intended Petition for Review on Certiorari with the Supreme Court and agreed to cause the dismissal of all their counter-claims against respondents with prejudice.

• Authority to Compromise: Petitioners, through their counsel and attorney-in-fact, Atty. Patricia Grace A. Gustilo of Zulueta, Puno, and Associates, were duly appointed and authorized pursuant to a Board Resolution and Special Power of Attorney to enter into a settlement of the case.
• Settlement Terms: Petitioners agreed to pay respondents the amount of ₱260,000.00 in full and complete settlement of the amount due them, and agreed not to institute their intended Petition for Review on Certiorari with the Supreme Court and to cause the dismissal of all their counter-claims against respondents with prejudice.

• Acceptance of Settlement: Respondents accepted the amount of ₱260,000.00 as full settlement of the amount due to them arising from the award adjudged them in the case.
• Waiver of Claims: Respondents agreed to waive any and all claims which they may have now or in the future against petitioners, to consider the settlement as final and executory, and undertook not to institute any other case or suit of whatever nature against petitioners in any other court or tribunal arising out of the same matter.

• Validity of Compromise Agreement: Whether the Compromise Agreement submitted by the parties should be approved by the Court.

• Validity of Compromise Agreement: Yes. The Compromise Agreement, being not contrary to law, good morals, public order, or public policy, was approved by the Court, and the parties were enjoined to comply with its terms and conditions.

• Validity of Compromise Agreement: The Court found that the Compromise Agreement was not contrary to law, good morals, public order, or public policy. The agreement was duly notarized and executed by the parties through their duly authorized representatives, with the conformity of the respondents. The terms of the agreement were voluntarily set forth by the parties, and the settlement amount of ₱260,000.00 was accepted by respondents as full settlement of the amount due them. Accordingly, the Court approved the Compromise Agreement, set aside the Resolution of the NLRC dated January 19, 1999, and the Decision of the Court of Appeals in CA-G.R. No. 52788 dated May 24, 2000, and declared the case closed and terminated.

• Compromise Agreements — A compromise agreement that is not contrary to law, good morals, public order, or public policy is valid and binding upon the parties. Upon approval by the Court, the parties are enjoined to comply with its terms and conditions, and the case is declared closed and terminated. The Court applied this principle by approving the Compromise Agreement submitted by the parties and setting aside the prior rulings of the NLRC and the Court of Appeals.

• "WHEREFORE, the aforequoted Compromise Agreement being not contrary to law, good morals, public order or public policy, is hereby APPROVED and the parties are hereby enjoined to comply with its terms and conditions." — This is the dispositive portion of the decision, stating the Court's approval of the Compromise Agreement and the directive for the parties to comply with its terms.
• "The Resolution of the NLRC dated January 19, 1999, and the Decision of the Court of Appeals in CA-G.R. No. 52788, dated May 24, 2000 are set aside; and this case is hereby declared CLOSED AND TERMINATED." — This passage states the effect of the approval of the Compromise Agreement, which superseded the prior rulings of the lower tribunals.

Bellosillo (Chairman), Mendoza, Quisumbing, and De Leon, Jr., JJ., concurred.