Cases Finals Oblicon

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G.R. No. 126236 January 26, 2007DOMINGO REALTY, INC. and AYALA STEEL MANUFACTURING CO., INC., Petitioners,vs.COURT OF APPEALS and ANTONIO M. ACERO,Respondents.D E C I S I O NVELASCO, JR., J .:

Good judgment comes from experience, and often experience comes from bad judgment.Rita Mae BrownThe CaseThis Petition for Review on Certiorari, under Rule 45 of the Revised Rules of Court, seeks thereversal of the October 31, 1995 Decision1of the Court of Appeals (CA) in CA-G.R. SP No. 33407,entitled Antonio M. Acero v. Hon. Sofronio G. Sayo, et al., which annulled the December 7, 1987Decision based on a Compromise Agreement among petitioner Domingo Realty, Inc. (DomingoRealty), respondent Antonio M. Acero, and defendant Luis Recato Dy in Civil Case No. 9581-Pbefore the Pasay City Regional Trial Court (RTC), Branch CXI; and the August 28, 1996Resolution2of the CA which denied petitioners Motion for Reconsideration of its October 31, 1995Decision.The FactsOn November 19, 1981, petitioner Domingo Realty filed its November 15, 1981 Complaint3with the

Pasay City RTC against Antonio M. Acero, who conducted business under the firm name A.M. AceroTrading,4David Victorio, John Doe, and Peter Doe, for recovery of possession of three (3) parcels ofland located in Cupang, Muntinlupa, Metro Manila, covered by (1) Transfer Certificate of Title (TCT)No. (75600) S-107639-Land Records of Rizal; (2) TCT No. (67006) S-107640-Land Records ofRizal; and (3) TCT No. (67007) S-107643-Land Records of Rizal (the "subject properties"). The saidlots have an aggregate area of 26,705 square meters, more or less, on a portion of which Acero hadconstructed a factory building for the manufacture of hollow blocks, as alleged by Domingo Realty.On January 4, 1982, defendants Acero and Victorio filed their December 21, 1981 Answer5to theComplaint in Civil Case No. 9581-P. Acero alleged that he merely leased the land from his co-defendant David Victorio, who, in turn, claimed to own the property on which the hollow blocksfactory 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 hispredecessors-in-interest had been in possession of the property for more than 70 years.On December 3, 1987, Mariano Yu representing Domingo Realty, Luis Recato Dy6,and Antonio M.

Acero, all assisted by counsels, executed a Compromise Agreement, which contained the followingstipulations, to wit:

1. That defendants admit and recognize the ownership of the plaintiff over the propertysubject of this case, covered by TCT No. S-107639 (75600), S-107643 (67007), and S-107640 (67006) with a total area of 26,705 square meters;2. That defendant Luis Recato Dy admits and recognizes that his title covered by TCT No.108027 has been proven not to be genuine and that the area indicated therein is inside theproperty of the plaintiff;3. That defendant Acero admits that the property he is presently occupying by way of leaseis encroaching on a portion of the property of the plaintiff and assume[s] and undertakes tovacate, 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 withdefendant Acero, and shall deliver said portion of the property of the plaintiff free and clear ofany unauthorized structures, shanties, occupants, squatters or lessees within a period ofsixty (60) days from date of signing of this compromise agreement. Should defendant Acerofail in his obligation to vacate, remove and clear the structures erected inside the property ofthe plaintiff within the period of 60 days afore-mentioned, plaintiff shall be entitled to a writ ofexecution for the immediate demolition or removal of said structure to fully implement thisagreement; and ejectment of all squatters and occupants and lessees, including thedependents to fully implement this agreement;
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4. That plaintiff admits and recognizes that defendant Luis Recato Dy bought and occupiedthe property in good faith and for value whereas defendant Acero leased the portion of saidproperty likewise in good faith and for value hereby waives absolutely and unconditionally allclaims including attorneys fees against both defendants in all cases pending in any courtwhether by virtue of any judgment or under the present complaint and undertake to withdrawand/or move to dismiss the same under the spirit of this agreement;

5. That defendants likewise waive all claims for damages including attorneys fees againstthe plaintiff;6. That plaintiff acknowledges the benefit done by defendant Luis Recato Dy on the propertyby incurring expenses in protecting and preserving the property by way of construction ofperimeter fence and maintaining a caretaker therein and plaintiff has agreed to pay LuisRecato Dy the amount of P100,000.00 upon approval of this agreement by this HonorableCourt.7

Acting on the Compromise Agreement, the Pasay City RTC rendered the December 7, 1987Decision which adopted the aforequoted six (6) stipulations and approved the Compromise

Agreement.To implement the said Decision, Domingo Realty filed its January 21, 1988 Motion8asking the trialcourt for permission to conduct a re-survey of the subject properties, which was granted in theJanuary 22, 1988 Order.9

On February 2, 1988, respondent Acero filed his January 29, 1988 Motion to Nullify the CompromiseAgreement,10claiming that the January 22, 1988 Order authorizing the survey plan of petitionerDomingo Realty as the basis of a resurvey would violate the Compromise Agreement since thewhole area he occupied would be adjudged as owned by the realty firm.On March 18, 1988, Acero filed a Motion to Resurvey,11whereby it was alleged that the partiesagreed to have the disputed lots re-surveyed by the Bureau of Lands. Thus, the trial court issued theMarch 21, 1988 Order12directing the Director of Lands to conduct a re-survey of the subjectproperties.In his June 9, 1989 Report, Elpidio T. De Lara, Chief of the Technical Services Division of the LandsManagement Section of the National Capital Region - Department of Environment and NaturalResources, submitted to the trial court Verification Survey Plan No. Vs-13-000135. In the saidVerification Survey Plan, petitioners TCTs covered the entire land occupied by the respondentshollow block factory.13On April 10, 1990, petitioner Ayala Steel Manufacturing Co., Inc. (Ayala Steel) filed its March 30,1990 Motion for Substitution alleging that it had purchased the subject lots, attaching to the motionTCT Nos. 152528, 152529, and 152530 all in its name, as proof of purchase.14The said motion was opposed by Acero claiming that "this case has already been terminated inaccordance with the compromise agreement of the parties, hence, substitution will no longer benecessary and justified under the circumstances."15The motion was not resolved which explains whyboth transferor Domingo Realty and transferee Ayala Steel are co-petitioners in the instant petition.In its December 28, 1990 Order,16the trial court directed Acero to conduct his own re-survey of thelots based on the technical description appearing in the TCTs of Domingo Realty and to have the re-survey plans approved by the Bureau of Lands. The Order resulted from Aceros contention that heoccupied only 2,000 square meters of petitioners property.

Acero employed the services of Engr. Eligio L. Cruz who came up with Verification Survey Plan No.

Vs-13-000185. However, when the said Verification Survey Plan was presented to the Bureau ofLands for approval, it was rejected because Engr. Cruz failed to comply with the requirements of theBureau.17On April 8, 1991, petitioners filed a Manifestation with Motion praying for the denial of respondentsMotion to Nullify the Compromise Agreement and for the approval of Verification Survey Plan No.Vs-13-000135 prepared by Engr. Lara of the Bureau of Lands. The Pasay City RTC issued theDecember 6, 1991 Order18denying respondent Aceros Motion to Nullify the Compromise

Agreement. As a consequence, petitioners filed a Motion for Execution on December 10, 1991.19
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On January 6, 1992, respondent filed an undated Manifestation20claiming, among others, that it wason record that the Compromise Agreement was only as to a portion of the land being occupied byrespondent, which is about 2,000 square meters, more or less. He reiterated the same contentionsin his December 21, 1991 Manifestation.21On January 13, 1992, respondent filed a Motion to Modify Order Dated 6 December 91,22claimingthat the said Order modified the Compromise Agreement considering that it allegedly involved only

1,357 square meters and not the entire lot;23

and if not amended, the Order would deviate from theprinciple that "no man shall enrich himself at the expense of the other."In its January 15, 1992 Order,24the trial court approved the issuance of a Writ of Execution toenforce the December 7, 1987 Decision. On February 3, 1992, respondent Acero subsequently fileda Motion for Reconsideration25of the January 15, 1992 Order arguing that the Order was prematureand that Verification Survey Plan No. Vs-13-000135 violated the Compromise Agreement.On January 18, 1992, the Pasay City Hall was gutted by fire, destroying the records of the lowercourt, including those of this case. Thus, after reconstituting the records, the trial court issued theOctober 6, 1992 Order,26reiterating its January 15, 1992 Order and ordering the issuance of a Writ ofExecution.On October 23, 1992, respondent filed a Manifestation and Compliance,27alleging that VerificationSurvey Plan No. Vs-13-000185 had been approved by the Regional Director of the DENR; thus, hemoved for the annulment of the October 6, 1992 Order granting the Writ of Execution in favor of

petitioners.Given the conflicting Verification Survey Plans of the parties, the trial court issued the October 11,1993 Order28requiring the Bureau of Lands Director to determine which of the two survey plans wascorrect.Subsequently, Regional Technical Director Eriberto V. Almazan of the Land Registration Authorityissued the November 24, 1993 Order29cancelling Verification Survey Plan No. Vs-13-000185,submitted by Engineer Eligio Cruz, who was hired by respondent Acero, and declared VerificationSurvey Plan No. Vs-13-000135, submitted by Engineer Lara of the Bureau of Lands, as the correctPlan.Thereafter, petitioners filed their January 12, 1994 Ex-parte Manifestation with Motion,30praying forthe implementation of the Writ of Execution against the disputed lands, which was granted in theJanuary 12, 1994 Order.31Respondents Motion for Reconsideration32of the January 12, 1994 Order was denied in theFebruary 1, 1994 Order33of the Pasay City RTC.

Aggrieved, respondent Acero filed before the CA his February 23, 1994 Petition for Certiorari andMandamus with Urgent Prayer for Issuance of a Temporary Restraining Order,34under Rule 65 ofthe Rules of Court, against petitioners and Judge Sofronio G. Sayo as presiding judge of the lowercourt. In the petition, respondent sought to nullify and set aside the RTC Orders dated December 6,1991, January 15, 1992, October 6, 1992, January 12, 1994, and February 1, 1994, all of whichpertain to the execution of the December 7, 1987 Decision on the Compromise Agreement.Significantly, respondent did not seek the annulment of said judgment but merely reiterated the issuethat under the Compromise Agreement, he would only be vacating a portion of the property he wasoccupying.The Ruling of the Court of AppealsOn October 31, 1995, the CA promulgated the assailed Decision, the fallo of which reads:

IN VIEW OF THE FOREGOING, the petition for certiorari is GRANTED and the Orders ofrespondent court dated December 6, 1991, January 15, 1992, October 6, 1992, and January 12,1994, and February 1, 1994 are SET ASIDE. In the interest of justice, and consistent with the viewsexpressed by this Court, the Compromise Judgment dated December 7, 1987 of respondent court islikewise SET ASIDE. Respondent Court is likewise directed to proceed with the hearing of Civil CaseNo. 9581-P on the merits and determine, once and for all, the respective proprietary rights of thelitigants thereto.SO ORDERED.35
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In discarding the December 7, 1987 Decision based on the Compromise Agreement, the appellatecourt ratiocinated that David Victorio, the alleged lessor of Acero, was not a party to the Compromise

Agreement; thus, there would always remain the probability that he might eventually resurface andassail the Compromise Agreement, giving rise to another suit. Moreover, the CA found theCompromise Agreement vague, not having stipulated a mutually agreed upon surveyor, "who wouldsurvey the properties using as a basis, survey plans acceptable to both, and to thereafter submit a

report to the court."36

Likewise, the CA sustained Aceros belief that he would only have to vacate a portion of the propertyhe was presently occupying, which was tantamount to a mistake that served as basis for thenullification of the Compromise Agreement entered into.On January 17, 1996, petitioners filed a Motion for Reconsideration37of the adverse Decision, whichwas consequently rejected in the CAs August 28, 1996 Resolution.Thus, the instant petition is in our hands.The IssuesThe issues as stated in the petition are as follows:

1. The respondent Court of Appeals erred in nullifying and setting aside judgment onCompromise Agreement and the Compromise Agreement itself as well as the subsequentorders of the court a quo though there is no motion to set aside the judgment on theCompromise Agreement before the court a quo on the ground of fraud, mistake or duress;

2. The respondent Court of Appeals erred in nullifying and setting aside the judgment onCompromise Agreement and the Compromise Agreement itself as well as the subsequentOrders of the Court of quo [sic] though in the Petition for Certiorari and Mandamus beforerespondent Court of Appeals, private respondent argued that judgment on Compromise

Agreement is final, executory, immutable and unalterable;3. The respondent Court of Appeals erred in nullifying and setting aside Judgment onCompromise Agreement and the Compromise Agreement itself as well as the subsequentOrders of the Court a quo based on fraud or mistake though said issues were not raisedbefore the Court a quo, and no evidence was introduced to substantiate fraud or mistakebefore the court a quo;4. The respondent Court of Appeals erred when it ruled that the non-inclusion of one of theparties in this case, and the vagueness of the Compromise Agreement are grounds to nullifyand set aside the Compromise Agreement; and5. The respondent Court of Appeals erred when it entertained the Petition for Certiorari andMandamus though it was filed beyond reasonable time if not barred by laches.38

Restated, the issues are:I.WHETHER THE PETITION BEFORE THE COURT OF APPEALS WAS FILED OUT OF TIME ORBARRED BY LACHES;II.WHETHER THE NON-INCLUSION OF DAVID VICTORIO WOULD NULLIFY THE COMPROMISE

AGREEMENT;III.WHETHER THE JUDGMENT ON COMPROMISE AGREEMENT SHOULD BE SET ASIDE ON THEGROUND OF VAGUENESS; AND

IV.WHETHER THE JUDGMENT ON COMPROMISE AGREEMENT SHOULD BE SET ASIDE ON THEGROUND OF MISTAKE.The Courts RulingThe petition is meritorious.The preliminary issue involves the query of what proper remedy is available to a party who believesthat his consent in a compromise agreement was vitiated by mistake upon which a judgment wasrendered by a court of law.
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There is no question that a contract where the consent is given through mistake, violence,intimidation, undue influence, or fraud is voidable under Article 1330 of the Civil Code. If the contractassumes the form of a Compromise Agreement between the parties in a civil case, then a judgmentrendered on the basis of such covenant is final, unappealable, and immediately executory. If one ofthe parties claims that his consent was obtained through fraud, mistake, or duress, he must file amotion with the trial court that approved the compromise agreement to reconsider the judgment and

nullify or set aside said contract on any of the said grounds for annulment of contract within 15 daysfrom notice of judgment. Under Rule 37, said party can either file a motion for new trial orreconsideration. A party can file a motion for new trial based on fraud, accident or mistake,excusable negligence, or newly discovered evidence.On the other hand, a party may decide to seek the recall or modification of the judgment by meansof a motion for reconsideration on the ground that "the decision or final order is contrary to law" if theconsent was procured through fraud, mistake, or duress. Thus, the motion for a new trial or motionfor reconsideration is the readily available remedy for a party to challenge a judgment if the 15-dayperiod from receipt of judgment for taking an appeal has not yet expired. This motion is the mostplain, speedy, and adequate remedy in law to assail a judgment based on a compromise agreementwhich, even if it is immediately executory, can still be annulled for vices of consent or forgery.39Prior to the effectivity of the 1997 Rules of Civil Procedure on July 1, 1997, an order denying amotion for new trial or reconsideration was not appealable since the judgment in the case is not yet

final. The remedy is to appeal from the challenged decision and the denial of the motion forreconsideration or new trial is assigned as an error in the appeal .40Under the present [1997] Rulesof Civil Procedure, the same rule was maintained that the order denying said motion is stillunappealable and the rule is still to appeal from the judgment and not from the order rejecting themotion for reconsideration/new trial.If the 15-day period for taking an appeal has lapsed, then the aggrieved party can avail of Rule 38 byfiling a petition for relief from judgment which should be done within 60 days after the petitionerlearns of the judgment, but not more than six (6) months after such judgment or final order wasentered. Prior to the effectivity of the 1997 Rules of Civil Procedure in 1997, if the court denies thepetition under Rule 38, the remedy is to appeal from the order of denial and not from the judgmentsince said decision has already become final and already unappealable.41However, in the appealfrom said order, the appellant may likewise assail the judgment. Under the 1997 Rules of CivilProcedure, the aggrieved party can no longer appeal from the order denying the petition since this isproscribed under Section 1 of Rule 41. The remedy of the party is to file a special civil action forcertiorari under Rule 65 from the order rejecting the petition for relief from judgment.The records of the case reveal the following:

1. December 3, 1987the parties signed the Compromise Agreement;2. December 7, 1987a decision/judgment was rendered based on the December 3, 1987Compromise Agreement;3. February 2, 1988Acero filed a Motion to Nullify the Compromise Agreement;4. December 6, 1991 the trial court denied Aceros Motion to Nullify the Compromise

Agreement;5. December 11, 1991 defendant Acero received the December 6, 1991 Order whichdenied said motion;426. December 26, 1991 the 15-day period to appeal to the CA expired by the failure of

defendant Acero to file an appeal with said appellate court;7. January 15, 1992the trial court issued the Order which granted petitioners motion forthe issuance of a Writ of Execution;8. October 6, 1992 the trial court reiterated its January 15, 1992 Order directing theissuance of a Writ of Execution after the records of the case were lost in a fire that gutted thePasay City Hall;9. January 12, 1994 the trial court issued the Order which directed the implementation ofthe Writ of Execution prayed for by petitioners;
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10. February 1, 1994the trial court issued the Order which denied respondents Motion forReconsideration of its January 12, 1994 Order; and11. April 4, 1994Acero filed with the CA a petition for certiorari in CA-G.R. SP No. 33407entitled Antonio M. Acero v. Domingo Realty, Inc., et al.

In his undated Manifestation, respondent Acero admitted having received a copy of the December 7,1987 Decision on December 11, 1987. However, it was only on February 2, 1988 when he filed a

Motion to Nullify the Compromise Agreement which was discarded for lack of merit by the trial courton December 6, 1991. If the Motion to Nullify the Compromise Agreement is treated as a motion forreconsideration and/or for new trial, then Acero should have filed an appeal from the December 7,1987 Decision and assigned as error the December 6, 1991 Order denying said motion pursuant tothe rules existing prior to the 1997 Rules of Civil Procedure. He failed to file such appeal but insteadfiled a petition for certiorari under Rule 65 with the CA on April 4, 1994. This is prejudicial torespondent Acero as the special civil action of certiorari is not the proper remedy. If the aggrievedparty does not interpose a timely appeal from the adverse decision, a special civil action for certiorariis not available as a substitute for a lost appeal.43What respondent Acero should have done was to file a petition for relief from judgment when hebecame aware that he lost his right of appeal on December 26, 1991. Even with this approach,defendant Acero was also remiss.In sum, the petition for certiorari instituted by respondent Acero with the CA is a wrong remedy; a

simple appeal to the CA would have sufficed. Since the certiorari action is an improper legal action,the petition should have been rejected outright by the CA.

Assuming arguendo that a petition for certiorari with the CA is the appropriate remedy, still, saidpetition was filed out of time.The petition before the CA was filed prior to the effectivity of the 1997 Rules of Court when therewas still no prescribed period within which to file said petition, unlike in the present Section 4 of Rule65 wherein a Petition for Certiorari and Mandamus must be filed within 60 days from notice of the

judgment, final order, or resolution appealed from, or of the denial of the petitioners motion for newtrial or reconsideration after notice of judgment.Section 4, Rule 65 previously read:Section 4. Where petition filed.The petition may be filed in the Supreme Court, or, if it relates tothe acts or omissions of an inferior court, or of a corporation, board or officer or person, in a Court ofFirst Instance having jurisdiction thereof. It may also be filed in the Court of Appeals if it is in aid ofits appellate jurisdiction.Petitions for certiorari under Rules 43, 44 and 45 shall be filed with the Supreme Court.Before the 1997 Rules of Civil Procedure became effective on July 1, 1997, the yardstick todetermine the timeliness of a petition for certiorari under Rule 65 was the reasonableness of the timethat had elapsed from receipt of notice of the assailed order/s of the trial court up to the filing of theappeal with the CA.44In a number of cases, the Court ruled that reasonable time can be pegged atthree (3) months.45In the present case, the Order denying the Motion to Nullify the Compromise Agreement was issuedon December 6, 1991. The petition for certiorari was filed on April 4, 1994. The period of two (2)years and four (4) months cannot be considered fair and reasonable. With respect to the January 15,1992 Order granting the writ of execution and the October 6, 1992 Order directing the issuance ofthe writ, it is evident that the petition before the CA was filed more than three (3) months after the

receipt by respondent Acero of said orders and the filing of the petition is likewise unreasonablydelayed.On the second issue, petitioners assail the ruling of the appellate court that David Victorio who isclaimed to be the lessor of Acero, and who is impleaded as a defendant in Civil Case No. 9581-P,was not made a party to the Compromise Agreement and hence, he may later "assail thecompromise agreement as not binding upon him, thereby giving rise to another suit."46We find merit in petitioners position.The CA was unable to cite a law or jurisprudence that supports the annulment of a compromiseagreement if one of the parties in a case is not included in the settlement. The only legal effect of the


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non-inclusion of a party in a compromise agreement is that said party cannot be bound by the termsof the agreement. The Compromise Agreement shall however be "valid and binding as to the partieswho signed thereto."47The issue of ownership between petitioners and David Victorio can be threshed out by the trial courtin Civil Case No. 9581-P. The proper thing to do is to remand the case for continuation of theproceedings between petitioners and defendant David Victorio but not to annul the partial judgment

between petitioners and respondent Acero which has been pending execution for 20 years.With regard to the third issue, petitioners assail the ruling of the CA that the Compromise Agreementis vague as there is still a need to determine the exact metes and bounds of the encroachment onthe petitioners lot.The object of a contract, in order to be considered as "certain," need not specify such object withabsolute certainty. It is enough that the object is determinable in order for it to be considered as"certain." Article 1349 of the Civil Code provides:

Article 1349. The object of every contract must be determinate as to its kind. The fact that thequantity is not determinate shall not be an obstacle to the existence of the contract, provided it ispossible to determine the same, without the need of a new contract between the parties.In the instant case, the title over the subject property contains a technical description that providesthe metes and bounds of the property of petitioners. Such technical description is the finaldeterminant of the extent of the property of petitioners. Thus, the area of petitioners property is

determinable based on the technical descriptions contained in the TCTs.Notably, the determination made by the Bureau of Landsthat Verification Survey Plan No. Vs-13-000135 is the correct Planis controlling and shall prevail over Verification Survey Plan No. Vs-13-000185 submitted by Acero. Findings of fact by administrative agencies, having acquired expertisein their field of specialization, must be given great weight by this Court.48Even if the exact area ofencroachment is not specified in the agreement, it can still be determined from the technicaldescription of the title of plaintiff which defendant Acero admitted to be correct. Thus, the object ofthe Compromise Agreement is considered determinate and specific.Moreover, "vagueness" is defined in Blacks Law Dictionary as: "indefinite, uncertain; not susceptibleof being understood."

A perusal of the entire Compromise Agreement will negate any contention that there is vagueness inits provisions. It must be remembered that in the interpretation of contracts, an instrument must beconstrued so as to give effect to all the provisions of these contracts.49Thus, the Compromise

Agreement must be considered as a whole.The alleged vagueness revolves around the term "portion" in paragraph three (3) of the Compromise

Agreement,50taken together with paragraph one (1) which we quote:1. That defendants admit and recognize the ownership of the plaintiff over the property subject ofthis case, covered by TCT No. S-107639 (75600), S-107643 (67007), and S-107640 (67006) with atotal area of 26,705 square meters;x x x x3. That defendant Acero admits that the property he is presently occupying by way of lease isencroaching on a portion of the property of the plaintiff and assume and undertakes to vacate,remove and clear any and all structures erected inside the property of the plaintiff by himself andother 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 ofsigning 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 60days afore-mentioned, plaintiff shall be entitled to a writ of execution for the immediate demolition orremoval of said structure to fully implement this agreement; and ejectment of all squatters andoccupants and lessees, including the dependents to fully implement this agreement. (Emphasissupplied.)Respondent harps on their contention that the term "portion" in paragraph 3 of the Compromise

Agreement refers to the property which they are occupying. Respondents interpretation of


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paragraph 3 of the Compromise Agreement is mistaken as it is anchored on his belief that theencroachment on the property of petitioners is only a portion and not the entire lot he is occupying.This is apparent from his Supplement to his Petition for Certiorari and Mandamus where heexplained:Petitioner [Acero] entered into this agreement because of his well-founded belief and convictionthat a portion of the property he is occupying encroaches only a portion of the property of private

respondent. In fine, only a portion of the property petitioner is occupying (not all of it) encroaches ona portion of the property of private respondent.51This contention is incorrect. The agreement is clear that respondent Acero admitted that "theproperty he is presently occupying by way of lease is encroaching on a portion of the property of theplaintiff." Thus, whether it is only a portion or the entire lot Acero is leasing that will be affected bythe agreement is of no importance. What controls is the encroachment on the lot of petitionerDomingo Realty regardless of whether the entire lot or only a portion occupied by Acero will becovered by the encroachment.While it may be the honest belief of respondent Acero that only a portion of the lot he is occupyingencroaches on the 26,705-square meter lot of petitioner Domingo Realty and later, Ayala Steel, theCourt finds that the true and real agreement between the parties is that any encroachment byrespondent Acero on the lot of petitioners will be surrendered to the latter. This is apparent from theundertaking in paragraph 3 that defendant Acero "undertakes to vacate, remove and clear any and

all structures erected inside the property of the plaintiff." This prestation results from the admissionagainst the interest of respondent Acero that he "admits and recognizes the ownership of the plaintiff(Domingo Realty)" over the subject lot. The controlling word therefore is "encroachment" whether itinvolves a portion of or the entire lot claimed by defendant David Victorio. To reiterate, the word"portion" refers to petitioners lot and not that of Aceros. Contrary to the disposition of the CA, werule that the terms of the Compromise Agreement are clear and leave no doubt upon the intent ofthe parties that respondent Acero will vacate, remove, and clear any and all structures erected insidepetitioners property, the ownership of which is not denied by him. The literal meaning of thestipulations in the Compromise Agreement will control under Article 1370 of the Civil Code. Thus, thealleged vagueness in the object of the agreement cannot be made an excuse for its nullification.Finally, with regard to the fourth issue, petitioners question the finding of the CA that the compromise

judgment can be set aside on the ground of mistake under Article 2038 of the Civil Code, becauserespondent Acero gave his consent to the Compromise Agreement in good faith that he would onlyvacate a portion of his lot in favor of petitioner Domingo Realty.We rule otherwise.

Articles 2038 and 1330 of the Civil Code allow a party to a contract, on the ground of mistake, tonullify a compromise agreement, viz:

Article 2038. A compromise in which there is mistake, fraud, violence, intimidation, undue influence,or falsity of documents, is subject to the provisions of Article 1330 of this Code.

Article 1330. A contract where the consent is given through mistake, violence, intimidation, undueinfluence, or fraud is voidable (emphasis supplied)."Mistake" has been defined as a "misunderstanding of the meaning or implication of something" or"a wrong action or statement proceeding from a faulty judgment x x x."52

Article 1333 of the Civil Code of the Philippines however states that "there is no mistake if the partyalleging it knew the doubt, contingency or risk affecting the object of the contract."

Under this provision of law, it is presumed that the parties to a contract know and understand theimport of their agreement. Thus, civil law expert Arturo M. Tolentino opined that:To invalidate consent, the error must be excusable. It must be real error, and not one that couldhave been avoided by the party alleging it. The error must arise from facts unknown to him. Hecannot allege an error which refers to a fact known to him, or which he should have known byordinary diligent examination of the facts. An error so patent and obvious that nobody could havemade it, or one which could have been avoided by ordinary prudence, cannot be invoked by the onewho made it in order to annul his contract. A mistake that is caused by manifest negligence cannotinvalidate a juridical act.53(Emphasis supplied.)
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Prior to the execution of the Compromise Agreement, respondent Acero was already aware of thetechnical description of the titled lots of petitioner Domingo Realty and more so, of the boundariesand area of the lot he leased from David Victorio. Before consenting to the agreement, he couldhave simply hired a geodetic engineer to conduct a verification survey and determine the actualencroachment of the area he was leasing on the titled lot of petitioner Domingo Realty. Had heundertaken 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 theagreement.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 ordinaryprudence. Without doubt, this kind of mistake cannot be resorted to by respondent Acero as aground to nullify an otherwise clear, legal, and valid agreement, even though the document maybecome adverse and even ruinous to his business.Moreover, respondent failed to state in the Compromise Agreement that he intended to vacate onlya portion of the property he was leasing. Such provision being beneficial to respondent, he, in theexercise of the proper diligence required, should have made sure that such matter was specified inthe Compromise Agreement. Respondent Aceros failure to have the said stipulation incorporated inthe Compromise Agreement is negligence on his part and insufficient to abrogate said agreement.In Torres v. Court of Appeals,54which was also cited in LL and Company Development and Agro-

Industrial Corporation v. Huang Chao Chun,55it was held that:Under Article 1315 of the Civil Code, contracts bind the parties not only to what has been expresslystipulated, but also to all necessary consequences thereof, as follows:

ART. 1315. Contracts are perfected by mere consent, and from that moment the parties are boundnot only to the fulfillment of what has been expressly stipulated but also to all the consequenceswhich, according to their nature, may be in keeping with good faith, usage and law.It is undisputed that petitioners are educated and are thus presumed to have understood the termsof the contract they voluntarily signed. If it was not in consonance with their expectations, theyshould have objected to it and insisted on the provisions they wanted.Courts are not authorized to extricate parties from the necessary consequences of their acts, andthe fact that the contractual stipulations may turn out to be financially disadvantageous will notrelieve parties thereto of their obligations. They cannot now disavow the relationship formed fromsuch agreement due to their supposed misunderstanding of its terms.The mere fact that the Compromise Agreement favors one party does not render it invalid. We ruledin Amarante v. Court of Appeals that:Compromises are generally to be favored and cannot be set aside if the parties acted in good faithand made reciprocal concessions to each other in order to terminate a case. This holds true even ifall the gains appear to be on one side and all the sacrifices on the other (emphasis supplied).56One final note. While the Court can commiserate with respondent Acero in his sad plight,nonetheless we have no power to make or alter contracts in order to save him from the adversestipulations in the Compromise Agreement. Hopefully this case will serve as a precaution toprospective parties to a contract involving titled lands for them to exercise the diligence of areasonably prudent person by undertaking measures to ensure the legality of the title and theaccurate metes and bounds of the lot embraced in the title. It is advisable that such parties (1) verifythe origin, history, authenticity, and validity of the title with the Office of the Register of Deeds and

the Land Registration Authority; (2) engage the services of a competent and reliable geodeticengineer to verify the boundary, metes, and bounds of the lot subject of said title based on thetechnical description in the said title and the approved survey plan in the Land Management Bureau;(3) conduct an actual ocular inspection of the lot; (4) inquire from the owners and possessors ofadjoining lots with respect to the true and legal ownership of the lot in question; (5) put up signs thatsaid lot is being purchased, leased, or encumbered; and (6) undertake such other measures to makethe general public aware that said lot will be subject to alienation, lease, or encumbrance by theparties. Respondent Acero, for all his woes, may have a legal recourse against lessor David Victoriowho inveigled him to lease the lot which turned out to be owned by another.
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WHEREFORE, the petition is hereby GRANTED and the assailed Decision and Resolution of the CAare REVERSED. The questioned Orders of the Pasay City RTC dated December 6, 1991, January15, 1992, October 6, 1992, January 12, 1994, and February 1, 1994, including the Decision datedDecember 7, 1987, are AFFIRMED. The case is remanded to the Pasay RTC, Branch III for furtherproceedings with respect to petitioner Domingo Realtys November 15, 1981 Complaint57againstone of the defendants, David Victorio. No costs.

SO ORDERED.AURORA FE B. CAMACHO, G.R. No. 127520

Petitioner,

Present:

YNARES-SANTIAGO,J.,- versus - Chairperson,

AUSTRIA-MARTINEZ,CALLEJO, SR., and

CHICO-NAZARIO, JJ.

COURT OF APPEALS andANGELINO BANZON,

Respondents.Promulgated:

February 9, 2007

x-----------------------------------------------------------------------------------------x

D E C I S I O N

CALLEJO, SR., J.:

This is a Petition for Review on Certiorari of the Decision[1]of the Court of Appeals (CA)in CA-G.R. CV No. 41268 affirming with modification the Decision [2]of the Regional Trial Court(RTC) of Balanga, Bataan, Branch 1.
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The Antecedents

Camacho was the owner of Lot 261, a 7.5-hectare parcel of land situated inBalanga, Bataan and covered by Transfer Certificate of Title No. T-10,185.

On July 14, 1968, Camacho and respondent Atty. Angelino Banzon entered into a

contract for legal services denominated as a Contract of Attorneys Fee.[3]The agreement isworded as follows:

KNOW ALL MEN BY THESE PRESENTS:

That we, Aurora B. Camacho, widow, of legal age and resident ofBalanga, Bataan, and Angelino M. Banzon, have agreed on the following:

That I, Aurora B. Camacho is the registered owner of Lot No. 261Balanga Cadastre, has secured the legal services of Atty. Angelino M. Banzon toperform the following:

1. To negotiate with the Municipal Government ofBalanga so that the above-mentioned lot shall be the site of theproposed Balanga Public Market;

2. To sell 1200 sq. m. for the sum of TWENTY- FOURTHOUSAND PESOS (P24,000.00) right at the Market Site;

3. And to perform all the legal phase incidental to thiswork.

That for and in consideration of this undertaking, I bind myself to pay Atty.Angelino M. Banzon FIVE THOUSAND SQUARE METERS (5000) of the said

lot, for which in no case I shall not be responsible for payment of income taxes inrelation hereto, this area located also at market site.

That I, Angelino M. Banzon, is willing to undertake the above-enumeratedundertaking.

WITNESS our hands this 14 of July, 1968, in Balanga, Bataan.

(Signed) (Signed)ANGELINO M. BANZON AURORA B. CAMACHO

Pursuant to the agreement, Atty. Banzon, on even date, sent a letter-proposal[4]

to themunicipal council offering three sites for the proposed public market which included Lot 261. Stillon the same date, Camacho executed a Special Power of Attorney[5]giving Atty. Banzon theauthority to execute and sign for her behalf a Deed of Donation transferring a17,000-sq-m portion of Lot 261 to the municipal government of Balanga, Bataan. The Deed ofDonation was executed, which was later accepted by the local government unit in MunicipalResolution No. 127.[6]
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Silvestre Tuazon had been an agricultural tenant in Lot 261 since World War II.OnAugust 22, 1968, Tuazon and Camacho entered into an Agreement with VoluntarySurrender[7]where Tuazon voluntarily surrendered his right as a tenant of thelandholding. Despite the agreement, however, Tuazon plowed a portion of the lot andplantedpalay without Camachos consent. Since Tuazon refused to vacate the premises,Camacho and the Municipality of Balanga, through then Acting Mayor Victor Y. Baluyot, filed a

complaint[8]for forcible entry on November 18, 1969 before the Municipal Trial Court (MTC) ofBalanga, Bataan. The complaint was docketed as Civil Case No. 424. The case was eventuallydecided in favor of the plaintiffs and Tuazon was ordered to vacate the lot. On appeal to theRTC, trial de novo ensued, in view of the absence of the transcript of stenographic notes of theproceedings before the MTC. The RTC issued a preliminary mandatory injunction orderingTuazon to discontinue entering the subject premises until further orders of the court.[9]

On September 1, 1973, the plaintiffs, through Atty. Banzon, and Tuazon entered into anAgreement to Stay Court Order.[10]Under the agreement, Tuazon was allowed to cultivatespecific portions of the property as indicated in a sketch plan which the parties prepared, and touse the markets water supply to irrigate his plants within the lot subject to the marketspreferential rights. The parties also contracted that the agreement shall in no way affect the

merits of Civil Case No. 3512 and CAR Case No. 520-B73; and that no part shall be construedas impliedly creating new tenancy relationship.

On December 6, 1973, Camacho filed a Manifestation [11]in Civil Case No. 3512declaring that she had terminated the services of Atty. Banzon and had retained the services ofnew counsel, Atty. Victor De La Serna.

On December 17, 1973, Atty. Banzon filed a Complaint-in-Intervention[12]in Civil Case No.3512. He alleged that Camacho had engaged his services as counsel in CAR Case No. 59 B65(where a favorable decision was rendered) and in Civil Case No. 3512. Under the Contract of

Attorneys Fee which they had both signed, Camacho would compensate him with a 5,000-sq-mportion of Lot 261 in case he succeeds in negotiating with the Municipality of Balanga in

transferring the projected new public market which had been set for construction at the DoaFrancisca Subdivision, all legal requirements having been approved by a municipal resolution,the Development Bank of the Philippines, and the National Urban Planning Commission. Atty.Banzon further claimed that as a consequence of the seven cases filed by/against Camacho,she further bound herself orally to give him a 1,000-sq-m portion ofLot 261 as attorneys fee. Hehad also acquired from Camacho by purchase an 80-sq-m portion of the subject lot asevidenced by a Provisional Deed of Sale[13]and from third parties an 800-sq-m portion. Hefurther declared that his requests for Camacho to deliver the portions of the subject lot remainedunheeded, and that of the seven cases[14]he had handled for Camacho, four had been decidedin her favor while three are pending. Atty. Banzon thus prayed for the following relief:

1. Ordering the ejectment of Defendant Silvestre Tuazon, in so far as

(6880) square meters is concerned, INTERVENORS claim over Lot 261;

2. The First Cause of Action, ordering the Plaintiff Aurora B. Camacho todeliver (5000) square meters as per Annex A; EIGHTY square meters as per

Annex C; EIGHT HUNDRED (800) square meters which theINTERVENOR purchased from third parties;

3. On the Second Cause of Action, ordering the Plaintiff Aurora B.Camacho to pay the sum of P8,820.00, corresponding to the lease rental of
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(5880) square meters a month, counted from July, 1973, until the same isdelivered to the INTERVENOR;

4. On the Third Cause of Action, ordering the Plaintiff Aurora B.Camacho to deliver (1000) square meters, as attorneys fee in handling seven (7)cases;

5. Ordering the Plaintiff Aurora B. Camacho and DefendantSilvestre Tuazon to pay jointly and severally, the sum of P5,000.00 for attorneysfee for legal services to the INTERVENOR; cost and litigation expenses ofP1,000. until the case is terminated.

6. To grant such relief, just and equitable in the premises.[15]

Camacho opposed[16]Atty. Banzons motion on the ground that the admission of thecomplaint-in-intervention would merely serve to delay the case. She also claimed that hisinterest could be fully ventilated in a separate case for recovery of property or for damages.

On April 5, 1974, the RTC granted[17]the motion and subsequently admitted thecomplaint-in-intervention.

On December 31, 1973, Atty. Banzon and Tuazon entered into the following amicablesettlement:

1. That for and in consideration of the sum of TWO THOUSAND PESOS(P2,000.00), Philippine currency, which have been received from theINTERVENOR and acknowledged to have been received by the DefendantSilvestre Tuazon, the latter hereby acknowledges, waives his defenses againstthe claim of the INTERVENOR ANGELINO M. BANZON over a portion of Lot No.

261, portion of the lot in question, to the extent of SIX THOUSAND EIGHTHUNDRED EIGHTY (6880) SQUARE METERS as claimed and contained in theCOMPLAINT IN INTERVENTION and to give effect to this AMICABLESETTLEMENT hereby surrenders the actual possession of the said portion,subject to the approval of this Hon. Court, in favor of the INTERVENOR;

2. That the herein parties to this AMICABLE SETTLEMENT waive andrenounce whatever rights or claims, including future claims that each may haveagainst each other;

3. That the parties herein bind themselves to comply with the conditionsof the foregoing settlement;

4. That the foregoing AMICABLE SETTLEMENT was realized andachieved between the herein parties, thru the prior intercession of theDefendants counsel Atty. Narciso V. Cruz, Jr.

WHEREFORE, it is respectfully prayed that the foregoing AMICABLESETTLEMENT be approved and made as the basis of this Hon. Courts decisionbetween the herein INTERVENOR and DEFENDANT Silvestre Tuazon.[18]
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In Answer[19]to the complaint-in-intervention, Camacho denied that she solicited the

services of Atty. Banzon to facilitate the transfer of the site of the proposed public market; infact, it was Atty. Banzon who approached and convinced her to donate a portion of the lot tothe municipality of Balanga. He assured her that the municipality of Balanga planned to relocatethe public market and was scouting for a new location. He also told her that her lot appeared to

be the most ideal location, and that he would take care of all the legal problems.

Camacho admitted, however, that she signed the Contract of Attorneys Fee but onlyupon the request of Atty. Banzon. He told her that the document would be shown to themunicipal councilors for formalitys sake to prove his authority to act for and in behalf ofCamacho. It was never intended to bind her to pay attorneys fees.[20] She further denied thatshe agreed to give to Atty. Banzon 1,000 sq m for handling the seven cases; they neverdiscussed attorneys fees. The cases stemmed from his assurance that he would take care ofany legal problem resulting from the donation of her property. She was not even a party in someof the cases cited by Atty. Banzon.[21]Lastly, she denied that he had made demands to deliverthe mentioned portions of the property.[22]

In his Reply,[23]Atty. Banzon countered that the Balanga Municipal Council Resolution No.128 transferring the market site to Camachos property was enacted precisely because of hisletter-proposal[24]to the municipal council.

On August 14, 1977, Camacho and Tuazon entered into a CompromiseAgreement,[25]whereby Camacho agreed to transfer a 1,000-sq-m portion of Lot 261-B in favorof Tuazon; for his part, Tuazon moved to dismiss Civil Case No. 3805 and to remove all theimprovements outside the portion of the property which Camacho had agreed to convey to him.Thus, the RTC rendered a partial decision[26]approving the compromise agreement.

On September 12, 1978, Camacho filed a Motion to Dismiss[27]the Complaint-in-Intervention filed by Atty. Banzon on the ground that the jurisdiction of the court to try the case

ceased to exist because the principal action had been terminated. The RTC denied the motionin its Order[28]dated March 16, 1979. It held that Atty. Banzon had an interest over the subjectproperty which he had to protect and that the compromise agreement between Camacho andTuazon did not include him. Moreover, the dismissal of the intervention would not achieve itspurpose of avoiding multiplicity of suits. The propriety of the denial of Camachos motion todismiss was finally settled by this Court in Camacho v. Court of Appeals[29]where this Courtaffirmed the denial of the motion.

After trial on the merits, the RTC rendered a Decision[30]on September 1, 1992 in favor ofAtty. Banzon. The falloreads:

ACCORDINGLY, judgment is hereby rendered:

1. Ordering plaintiff Aurora B. Camacho under the Contract of AttorneysFees, [to deliver] 5000 square meters of the subject landholding,Lot 261-B-1,covered by Transfer Certificate of Title No. T-76357, or any other derivativesublots of the original Lot 261-B;

2. Declaring the dismissal of said intervenor from the case at bar asunjustified;
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3. Ordering said plaintiff to pay and deliver to said intervenor 1000 squaremeters of the property in question, Lot 261-B-1 or any other derivative sublots ofthe original Lot 261-B in case of deficiency, for legal services rendered in seven(7) cases;

4. Directing said plaintiff to deliver to said intervenor, under a Provisional

Deed of Sale, 80 square meters of the subject property, Lot 261-B-1 or any otherderivative sublots of the original Lot 261 in case of deficiency, after payment ofthe balance of the purchase price;

5. Ordering said plaintiff to execute the corresponding Deed of Sale infavor of said intervenor for the aforesaid 80 square meters;

6. Condemning said plaintiff to pay moral damages to said intervenor inthe amount of P100,000.00; attorneys fees in the sum ofP30,000.00; and thecosts of the suit.

SO ORDERED.[31]

According to the RTC, Camacho had indeed read the contract and freely affixed hersignature thereon. Applying the provisions of Section 7 (now section 9), Rule 130 [32]of the Rulesof Court, it concluded that the terms of the contract were embodied in the document itself.Moreover, Camacho did not bother to pay for all the other cases being handled by Atty. Banzonbecause she knew that she had agreed already to pay attorneys fees. The court likewise foundthat applying the provisions of Sections 24[33]and 26,[34]Rule 138 of the Rules of Court, the areaof the lot agreed upon as attorneys fees appears to be a reasonable compensation for hisservices. Since Atty. Banzon handled other cases subsequent to the execution of the contractof attorneys fees, the additional 1,000-sq-m lot which the parties had orally agreed upon isproper. The RTC declared that Atty. Banzon was entitled to be compensated based

on quantum meruit since his dismissal from the present case was unjustified. It also held thatCamacho was obliged to execute the necessary public instrument covering the 80-sq-m portionof the lot which she had sold to Atty. Banzon. It went further and awarded moral damages to

Atty. Banzon on account of the mental anguish and besmirched reputation he had suffered.

On October 8, 1992, Atty. Banzon filed a Motion for Execution PendingAppeal.[35]Camacho, on the other hand, filed a Notice of Appeal. Atty. Banzon filed a motion todismiss on the ground that since the case originated from the municipal court, it should beassailed via petition for review. On November 20, 1992, the court issued an Order[36]denyingthe motion for execution pending appeal for failure to state good reasons therefor. It likewisegranted the notice of appeal on the ground that the complaint-in-intervention originated from theRTC and not from the MTC; under the factual backdrop of the case, ordinary appeal is proper.

On appeal to the CA, Camacho raised the following errors:

I.THE LOWER COURT ERRED IN ALLOWING JUDGE ABRAHAM VERA TOSIGN THE DECISION IN THE INSTANT CASE, CONSIDERING THAT JUDGEVERA HAD LONG CEASED TO BE THE JUDGE OF THAT COURT AND WASTHE PRESIDING JUDGE OF BRANCH 90 OF THE REGIONAL TRIAL COURTOF QUEZON CITY WHEN THE INSTANT DECISION WAS SIGNEDON SEPTEMBER 1, 1992.
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II.THE LOWER COURT ERRED IN UPHOLDING THE VALIDITY AND DUEEXECUTION OF CONTRACT EXH. C AND IN ORDERING PLAINTIFF TODELIVER TO INTERVENOR 5,000 SQUARE METERS OF LOT 261-B-1, T.C.T.T-76357, CONSIDERING THAT THIS LOT IS NOT SPECIFIED IN EXH. C.

III.THE LOWER COURT ERRED IN DECLARING THAT INTERVENORSDISCHARGE AS PLAINTIFFS COUNSEL IN THE CASE AT BAR WASUNJUSTIFIED, IN AWARDING INTERVENOR MORAL DAMAGES, AND INDISMISSING PLAINTIFFS COUNTERCLAIMS.

IV.THE LOWER COURT ERRED IN AWARDING INTERVENOR 1,000 SQUAREMETERS OF PLAINTIFFS LAND FOR HIS HANDLING OF ALLEGED SEVENCASES.

V.THE LOWER COURT ERRED IN ORDERING PLAINTIFF TO EXECUTE AFINAL DEED OF SALE FOR 80 SQUARE METERS OUT OF LOT 261-B-1,CONSIDERING THAT LOT 261-B-1 IS NOT SPECIFIED IN THE PROVISIONALDEED OF SALE.[37]

On October 29, 1996, the CA rendered a decision[38]affirming with modification theRTC ruling. The falloreads:

WHEREFORE, foregoing considered, the appealed decision is herebyAFFIRMED with modification requiring plaintiff Camacho to DELIVER 5,000

sq.m. and 1,000 sq. m. of Lot 261-B-1 to Intervenor as his attorneys fee and 80sq. m. also from Lot 261 subject to the conditions embodied under no. 4 of thedispositive portion of the assailed decision all within thirty (30) days from thefinality of this decision.

SO ORDERED.[39]

The CA held that all the elements of a valid contract were present: Camacho (a dentistrygraduate and an experienced businesswoman conversant in English) cannot plead that she didnot understand the undertaking she had entered into; the object of the contract is certain sincethe genus of the object was expressed although there was no determination of the individual

specie; and the cause of the obligation to negotiate and offer a site where the public marketwill be constructed is not unlawful and cannot be considered as influence peddling. As to thealleged violation of the terms of the special power of attorney, the court held that Camacho wasestopped from claiming damages by reason thereof.

The CA likewise found the award of moral damages to be in order; that the discharge ofAtty. Banzon as counsel for Camacho was not justified and his discharge does not in any waydeprive him of his right to attorneys fees. Lastly, the CA held that the RTC erred in requiring
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Camacho to deliver Lot 261-B-1, since Atty. Banzon cannot demand a portion of superior qualityin the same way that appellant cannot transfer an inferior quality.

On December 3, 1996, the CA issued a Resolution[40]instituting petitioner Aurora FeCamacho as substitute for the deceased Aurora B. Camacho.

Atty. Banzon filed a Motion for Partial Reconsideration of the CA Decision, as well as aMotion to Declare Decision Final insofar as Camacho was concerned. On the other hand,Camacho moved to cancel the notice of lis pendens. In the meantime, petitioner had filed thepetition before this Court. Thus, the CA no longer acted on the motions on the ground that it hadalready lost jurisdiction over the case.[41]

In the present petition, petitioner raises the following issues:

1. WHETHER OR NOT INTERVENOR CAN BE AWARDED A FAVORABLEJUDGMENT DESPITE ABSENCE OF ANY FINDINGS OF FACT IN THEDECISION WHICH SHOW THAT HE WAS ABLE TO PROVE THE (SIC) HIS

MATERIAL ALLEGATIONS UPON WHICH HE BASIS (SIC) HIS CLAIM UNDERCONTRACT OF ATTORNEYS FEE, EXH. C, ESPECIALLY PAR. 7 OF THECOMPLAINT-IN-INTERVENTION.

CAN THE BURDEN OF PROVING THE AND (SIC) DUE EXECUTION OFCONTRACT EXH. C BE SHIFTED TO PLAINTIFF CAMACHO WITHOUTVIOLATING SECT. 1, RULE 131, OF THE RULES OF COURT?

2. DID THE COURT OF APPEALS CORRECTLY APPLY THE PROVISION OFART. 1246 OF THE CIVIL CODE TO THE INSTANT CASE IN RULING THATCONTRACT EXH. C IS VALID AS TO OBJECT?

WILL THE DECISION REQUIRING THE DELIVERY OF 5,000 SQUAREMETERS OF LOT 261 BASED ON THE SAID ART. 1246, IN WHICHINTERVENOR CANNOT DEMAND A THING OF SUPERIOR QUALITY ANDNEITHER CAN PLAINTIFF CAMACHO DELIVER A THING OF INFERIORQUALITY, BE SUSCEPTIBLE OF IMPLEMENTATION WITHOUT NEED OF ANEW CONTRACT OR AGREEMENT BETWEEN THE PARTIES?

IF SO, WILL THAT NOT ALL THE MORE PROVE THAT TE OBJECT OFCONTRACT EXH. C IS INDETERMINATE PURSUANT [TO] ART. 1349 OFTHE CIVIL CODE?

3. WHETHER OR NOT THE COURT OF APPEALS WAS IN A POSITION TO

PROCLAIM THE LEGALITY OR ILLEGALITY OF THE ALLEGED CONTRACTWITHOUT FIRST REVEALING OR SETTING FORTH THE REAL NATURE OFTHIS OR THESE UNDERTAKINGS BASED ON THE ALLEGATIONS ANDTESTIMONIES OF INTERVENOR. HENCE, WHETHER OR NOT THE TWOUNDERTAKINGS IN CONTRACT EXH. C ARE LAWFUL.

4. WHETHER OR NOT THE COURT OF APPEALS COMMIT A GRAVE ABUSEOF DISCRETION BY TREATING LIKE A MATTER OUT OF RECORD THE

ALLEGED REASONS OF PLAINTIFF CAMACHO FOR DISMISSING
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INTERVENOR AS HER COUNSEL IN THE CASE AT BAR, WHICH WEREENUMERATED AND DISCUSSED ON PAGES 42-60 OF HER APPELLANTSBRIEF, ANNEX B, AND WHICH WERE PRINCIPALLY AND SPECIFICALLYCOVERED IN HER THIRD ASSIGNMENT OF ERRORS AND CONSIDERINGTHAT ONE OF THESE ALLEGED REASONS ALSO CONSTITUTE PLAINTIFFCAMACHOS COUNTERCLAIM FOR WHICH SHE IS SEEKING MORAL

DAMAGES OF P100,000.

DID NOT THE COURT OF APPEALS COMMIT GRAVE ABUSE OFDISCRETION IN REPRESENTING PLAINTIFF CAMACHOS THIRD

ASSIGNED ERROR AS REFERRING MERELY TO THE ISSUE OF WHETHEROR NOT THE AWARD OF MORAL DAMAGES TO INTERVENOR ISJUSTIFIED.

WAS NOT PLAINTIFF CAMACHO THEREBY DEPRIVED OF HERCONSTITUTIONAL RIGHT TO DUE PROCESS OF LAW?

5. WHETHER OR NOT THE AWARD OF 1,000 SQ. M. OF LOT 261

ATTORNEYS FEE FOR ALLEGED HANDLING OF SEVEN CASES HAS ANYLEGAL BASIS CONSIDERING THAT THERE IS NO SHOWING IN THEDECISION THAT THE ORAL CONTRACT ALLEGED BY INTERVENOR TO BETHE BASIS OF THE SAID ATTORNEYS FEE WAS DULY POROVEN (SIC).[42]

Petitioner argues that the findings of facts in the assailed decision are mere conclusions,without citation of evidence to support them. She likewise avers that consent was not clearlyproven; the conclusion of the CA was based on the presumption that the document was readprior to being signed. Petitioner insists that there is no object certain to speak of since theexact location of the subject property cannot be determined; in short, the issue is not the qualityof the property but its identity. Petitioner further asserts that the cause of the contract pirating

of the municipalitys market project and ejecting the tenant to convert the property into acommercial establishment is illegal. She further insists that respondent failed to accomplishthe twin objective of ejecting Silvestre Tuazon and converting the remaining land into acommercial area; thus, he is not entitled to the 5,000-sq-m lot. She further contends that the CAerred in awarding moral damages because respondent did not ask for it in his complaint-in-intervention. Lastly, she asserts that the CA erred in affirming the award of the 1,000-sq-m lotpursuant to a verbal contract between Camacho and respondent, especially considering theprevailing jurisprudence against a lawyers acquisition of a clients lot in litigation without thelatters consent.

In his Comment,[43]respondent counters that the elements of a valid contract are present:Camachos consent to the contract is eviden

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