G.R. No. 212092 - People's General Insurance Corp. vs. Runes

Case Summary (G.R. No. 212092)

Factual Background and Underlying Civil Case

The underlying dispute originated when Col. Felix Mateo A. Runes filed an action for Sum of Money with Damages against People’s General Insurance Corporation and the Spouses Ver and Jovencia Manuzon, doing business under the name and style of Empherical Construction. In that civil case, the petitioner insurer was impleaded based on a performance bond it had issued in favor of the respondent in the amount of Php1,470,134.70. The case was docketed as Civil Case No. 01-101210 and assigned to Branch 19 of the RTC of Manila.

On 28 July 2008, the RTC rendered judgment in favor of the respondent. The dispositive portion ordered the defendants-spouses Manuzon and the petitioner insurer to be jointly and severally liable, specifically requiring payment of: (a) not less than P1,047,000.00 representing overpayments with legal interest from the filing of the case until fully paid; (b) not less than Php300,000.00 as actual damages with legal interest from the filing of the case until fully paid; (c) liquidated damages in an amount equivalent to 1/10 of 1% of the total remaining works for every day of delay; and (d) attorney’s fees equivalent to not less than 15% of the plaintiff’s total claims.

The CA later affirmed the RTC judgment but modified it by setting aside the award of attorney’s fees. In doing so, the CA categorically stated that the insurer was jointly and severally liable with the spouses Manuzon to the extent of the bond amount of Php1,470,134.70. The insurer’s subsequent petition for review in the Supreme Court—identified in the compromise as SC G.R. No. 212092—was denied by the Court on June 25, 2014, thereby affirming the CA decision by sustaining its modification and liability limitation to the bond amount.

Supreme Court Proceedings and Development Leading to Settlement

After the Supreme Court denied the petition for review on June 25, 2014 for failure to show reversible error, the opposing parties did not proceed immediately to the formal entry of judgment. Instead, before an entry of judgment could be made, the parties reached an amicable settlement. The settlement was designed to end expenses and inconvenience brought by prolonged litigation and was explicitly characterized in the agreement as not an admission of liability.

Accordingly, the parties submitted to the Supreme Court a Joint Motion for Judgment Based on Attached Compromise Agreement together with the compromise terms for approval and adoption as the Court’s decision.

The Compromise Agreement and Its Terms

The compromise agreement dated 14 January 2015 was executed between the respondent, Col. Felix Mateo A. Runes (First Party), and People’s General Insurance Corporation (Second Party), represented by its Chairman of the Board, Ernesto J. Del Rosario, assisted by Atty. Manuel N. Camacho.

The compromise expressly recalled that the respondent had filed the civil action for money and damages against the insurer and the spouses Manuzon in Civil Case No. 01-101210, anchored on the insurer’s performance bond of Php1,470,134.70. It also referenced the RTC judgment and the CA’s modification setting aside attorney’s fees, and it stated that the Supreme Court had affirmed the CA decision by denying the insurer’s petition.

Under the settlement, the Second Party agreed to pay the First Party ONE MILLION PESOS (Php1,000,000.00), payable in six monthly instalments. To cover the instalments, the insurer would issue twelve checks dated at specified intervals from January 12, 2015 through June 20, 2015, with alternating payees between FELIX MATEO A. RUNES and ATTY. MANUEL N. CAMACHO, each check in the amount of Php83,333.33, consistent with the agreed instalment structure.

The agreement further provided that upon execution, the parties would sign and execute a Joint Motion for Judgment Based on Compromise Agreement to be submitted to the Supreme Court for approval. The payment was stated to represent full and final satisfaction of all the respondent’s claims in the civil case and any other claim arising from the transactions subject of the litigation. The respondent also released, discharged, acquitted, and waived all claims against the insurer from all actions, claims, and demands, whether civil, criminal, administrative, or otherwise.

The compromise included a default clause: if the insurer defaulted in at least two instalments, the entire Php1,000,000.00 amount, or the outstanding balance if partial payments had already been made, would become due and demandable, and the respondent would be entitled to the issuance of a writ of execution for the unpaid amount.

Finally, the agreement contained declarations that the parties entered into the settlement freely, voluntarily, and without duress, force, misinterpretation, intimidation, or any other vice of consent.

The Parties’ Position on Approval

The record reflected that the insurer and the respondent jointly requested judicial action on the compromise through the filed Joint Motion for Judgment Based on Attached Compromise Agreement, invoking the Court’s approval and adoption of the compromise terms as the Court’s decision. The parties’ common intent was to terminate the litigation based on the negotiated settlement terms, subject to the compromise being found not contrary to law and public policy.

Ruling of the Supreme Court

The Court granted the Joint Motion for Judgment Based on Attached Compromise Agreement. It ruled that it was appearing that the compromise agreement was not contrary to law, morals, good customs, public policy, and public order. The Court then approved and adopted the compromise agreement and ordered the parties to faithfully comply with its terms and conditions.

The Court declared that the case was considered CLOSED and TERMINATED, while expressly stating that such closure was without prejudice to the rights, if any, of other parties. The Court imposed No Costs.

Legal Basis and Reasoning

The Court’s action rested on the recognized judicial requirement that a compromise agreement in a pending case may be approved when it is show

Case Syllabus (G.R. No. 212092)

The case involved a petition for review on certiorari filed by Peoples General Insurance Corp. (formerly People's Trans-East Asia Insurance Corp.) to challenge a Decision of the Court of Appeals.
The opposing party was Col. Felix Mateo A. Runes (Col. Runes), who had prevailed in the Regional Trial Court (RTC) and whose favorable result the Court of Appeals affirmed in relevant respects.
The controversy stemmed from a Civil Case for sum of money with damages and the enforcement of a performance bond issued by the petitioner in favor of Col. Runes.

Parties and Procedural Posture

People's General Insurance Corporation appeared as petitioner in the Supreme Court and had sought review of the Court of Appeals ruling in CA-G.R. CV No. 93649.
Col. Runes appeared as respondent and defended the Court of Appeals decision that affirmed the RTC judgment.
The Supreme Court denied the petition for review on June 25, 2014, for failure to show reversible error in the challenged Court of Appeals decision.
The Supreme Court noted that, before there could be an entry of judgment, the parties reached an amicable settlement and submitted a Joint Motion for Judgment Based on Attached Compromise Agreement.
The Supreme Court resolved the Joint Motion and treated it as seeking judicial approval and adoption of the compromise agreement as the decision.

Key Factual Allegations

Col. Runes filed an action for sum of money with damages against People's General Insurance Corporation and Spouses Ver and Jovencia Manuzon (Spouses Manuzon) doing business as Empherical Construction.
The case was docketed as Civil Case No. 01-101210 and assigned to RTC, Branch 19, Manila.
The petitioner was impleaded based on a performance bond it issued in favor of Col. Runes in the amount of Php1,470,134.70.
The RTC rendered judgment on 28 July 2008 in favor of Col. Runes, ordering the defendants—Spouses Manuzon and People's General Insurance Corporation—jointly and severally to pay specified amounts.
The RTC judgment included an order for:
- repayment of overpayments of not less than P1,047,000.00, with legal interest from filing until fully paid;
- payment of actual damages of not less than Php300,000.00, with legal interest from filing until fully paid;
- payment of liquidated damages equivalent to not less than 1/10 of 1% of the total remaining works for every day of delay;
- payment of attorney's fees equivalent to not less than 15% of plaintiff's total claims.
On appeal, the Court of Appeals affirmed the RTC judgment but modified it by setting aside the award of attorney's fees.
In affirming with modification, the Court of Appeals stated that the petitioner was jointly and severally liable with the Spouses Manuzon to the extent of the bond amount of Php1,470,34-70.
The Supreme Court thereafter affirmed the Court of Appeals decision by denying the petitioner’s petition for review in SC G.R. No. 212092, and the Supreme Court described the petition as having been denied for lack of reversible error.
After the Supreme Court’s denial, the parties executed a compromise agreement dated 14 January 2015 to end the litigation, expressly stating it was not an admission of liability and was intended to avoid expense and inconvenience of continued proceedings.

Amicable Settlement Terms

The compromise agreement identified the parties as the First Party (Col. Felix Mateo A. Runes) and the Second Party (People's General Insurance Corporation), the latter represented by its Chairman of the Board of Directors, Ernesto J. Del Rosario, with Atty. Manuel N. Camacho assisting.
The compromise agreement recognized that Civil Case No. 01-101210 had been filed by Col. Runes and decided by the RTC, with the Court of Appeals affirming with modification.
The Second Party agreed to pay Col. Runes ONE MILLION PESOS (Php1,000,000.00) in six monthly instalments.
The agreement specified payment through twelve checks issued by the Second Party in specified amounts and dates, alternating payees between Felix Mateo A. Runes and Atty. Manuel N. Camacho.
The compromise agreement provided that execution of