G.R. No. 55397 - Tai Tong Chuache and Co. vs. Insurance Commission

On March 13, 2009, petitioner Conchita A. Sonley filed a complaint for the declaration of nullity of rescission of contract and damages against Anchor Savings Bank (later changed to Equicom Savings Bank).
The complaint arose from a Contract to Sell entered on January 28, 2005, whereby petitioner agreed to purchase a real property for Php2,200,000.00, with Php200,000.00 as downpayment and the balance payable via sixty monthly installments of Php47,580.00.

Petitioner defaulted on her monthly payment obligations, prompting Anchor to rescind the Contract to Sell.
Petitioner contended that the rescission was void as she had substantially performed her payment obligations.
Anchor’s answer denied the allegations, asserting that the post-dated checks covering the monthly installments had been dishonored.

Before trial pleadings concluded, the parties agreed to an amicable settlement, formalized by a Compromise Agreement.
Under the Compromise Agreement, the petitioner agreed to repurchase the subject property for an adjusted amount (notably, Php1,469,460.66 plus 12% interest per annum).
The trial court rendered a Judgment on August 16, 2010, incorporating the terms of the Compromise Agreement and declaring it final and executory.

Anchor Savings Bank subsequently filed a Manifestation and Motion for Execution claiming that petitioner had failed to pay the installments as agreed under the Compromise Agreement.
The motion asserted that all checks issued by petitioner were dishonored, thereby justifying the issuance of a writ of execution.
The trial court, on September 8, 2011, issued an order granting the motion for execution, effectively authorizing rescission of the Contract to Sell, application of petitioner's payments as rentals, and ordering petitioner’s eviction.

Petitioner filed a Petition for Certiorari before the CA asserting that the trial court lacked power to issue a writ of execution since the Judgment did not specifically provide for such remedy.
The CA, in its August 28, 2012 Decision and January 25, 2013 Resolution, ruled against the petitioner.
The CA held that the Compromise Agreement, with the accompanying contractual stipulations regarding default, intrinsically allowed for rescission and execution even without a separate action for rescission.

Petitioner elevated the issue to the Supreme Court, challenging the issuance of the writ of execution.
The Supreme Court eventually gave due course to the petition (as seen in its August 20, 2014 Resolution), although the final resolution denied the petition.

Whether the trial court, in issuing a writ of execution for the enforcement of the Compromise Agreement, acted within its judicial power even though the Judgment did not specifically provide for such writ.
Whether the Compromise Agreement, as approved by the trial court, carried the force of res judicata and could be enforced by execution, particularly when the petitioner defaulted on her obligations.

Whether, under the terms of the Compromise Agreement and the underlying Contract to Sell, the remedy for default automatically includes rescission and subsequent execution without the need for a separate judicial declaration of rescission.
Whether respondent’s reliance on the contractual stipulations (including penalty provisions and the right to rescind upon default) justifies the issuance of a writ of execution against petitioner.

Whether the trial court (and by extension, the CA) exhibited grave abuse of discretion in allowing respondent’s motion for execution despite petitioner’s contention to the contrary.
Whether the petitioner adequately demonstrated that the issuance of the writ was improper or lacked legal basis, or if it was simply an application of the agreed contractual rights.