Case Digest (G.R. No. 78315)
Facts:
Commercial Credit Corporation of Cagayan de Oro v. Court of Appeals and Cagayan de Oro Coliseum, Inc., G.R. No. 78315, January 02, 1989, the Supreme Court First Division, Gancayco, J., writing for the Court.Petitioner Commercial Credit Corporation of Cagayan de Oro held a promissory note for P329,852.54 executed by private respondent Cagayan de Oro Coliseum, Inc., secured by a real estate mortgage; after respondent defaulted, petitioner initiated extrajudicial foreclosure in September 1979. Five minority stockholders of the Coliseum filed Special Civil Action No. 68111 in the Court of First Instance (CFI) of Misamis Oriental questioning the corporation's authority to mortgage its property, and the parties entered into a negotiated compromise which the CFI approved by judgment dated March 11, 1980; the compromise admitted an outstanding obligation of P249,263.23, set a payment schedule of monthly P11,000 installments, and provided that failure to pay would accelerate the whole obligation, impose a 3% per month penalty and an additional 5% of the outstanding balance as attorney’s fees, and make the judgment immediately executory.
Respondent Coliseum failed to pay several installments amounting to P70,152.65 due July 13, 1982; petitioner moved ex parte for issuance of a writ of execution (filed March 4, 1983), and the trial court granted the motion (order March 10, 1983) and issued a notice of sale (March 11, 1983). The Coliseum filed a motion for reconsideration alleging payment; execution was suspended pending resolution. After pleadings and oppositions, the trial court denied the motion for reconsideration on November 26, 1986 and the writ of execution was issued December 4, 1986; a sale was set for January 23, 1987 but did not proceed because of sheriff’s office problems.
Private respondent sought relief in the Court of Appeals by a special civil action to annul the compromise judgment, alleging grave abuse by the trial court; the Court of Appeals (with Justice Gloria C. Paras as ponente) rendered a decision dated February 13, 1987 whose dispositive part initially denied due course and dismissed the petition but by subsequent resolutions (March 23, 1987 denial of petitioner’s motion for reconsideration and May 19, 1987 re-wording) effectively modified the trial court’s compromise judgment by reducing the penalty and attorney’s fees — ruling that, effective March 16, 1983, overdue and unpaid installments would earn a one-half percent (1/2%) per month penalty and two percent (2%) of the outstanding balance as attorney’s fees, and declaring inconsistent execution steps null and void insofar as not in accord with the modified judgment.
Petitioner filed a petition for review on certiorari to the Supreme Court (Rule 45), contending that the Court of Appeals gravely abused its discretion by modifying a lawful, final and e...(Subscriber-Only)
Issues:
- Did the Court of Appeals have authority to modify a final and executory compromise judgment approved by the trial court?
- Was the Court of Appeals’ reduction of the agreed penalty and attorney’s fees justified by application of Article 1229 of the Civil Code (or other law), and was the compromise provision v...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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