[ G.R. No. 133609. February 10, 1999]




Quoted hereunder, for your information, is a resolution of this Court dated FEB 10, 1999.

G.R. No. 13609 (Manila International Airport Authority vs. Arpan Tourism Industries Corporation.)

This refers to a petition for review filed by the Manila International Airport Authority (MIAA) to set aside the Decision of the Court of Appeals (penned by Justice Jorge Imperial and concurred in by Justices Versola and Tuquero), dated January 22, 1998 and Resolution dated April 28, 1998 on the sole ground that the appellate court erred "in holding that under the circumstance, there was a compromise agreement entered into between petitioner and respondent."

At the outset, we note that the assailed decision, in its dispositive portion, merely held that "the terms and conditions of the parties' aforecited compromise agreement are hereby declared not contrary to law, morals, good customs or public policy."

The disposition ruled squarely on the sole issue raised by private respondent Arpan Tourism Industries Corporation in the proceedings below, where it prayed for such declaration in regard to said compromise agreement. Petitioner is not claiming that the Court of Appeals erred in deciding a question of substance, or decided it in any way not in accordance with law or jurisprudence or that it departed from the usual course of judicial proceedings but urges resolution on a sole factual issue which is raised for the first time on appeal, an act that is jurisprudentially proscribed for being in violation of due process.

Moreover, petitioner cannot deny the existence of the compromise agreement because it was attached in the parties' "Joint Manifestation" dated December 14, 1994,1 [CA Records, pp. 381-384.] which was signed by the parties inlcuding petitioner and formally submitted to the trial court. In the proceedings in the Regional Trial Court, petitioner never assailed the existence and binding effect of such compromise. It has been uniformly ruled by this Court that a compromise agreement, being merely consensual, need not even be in writing. In Domingo v. Court of Appeals, 2 [255 SCRA 189, 199] we explained the nature of a compromise agreement as follows:

A compromise is a contract whereby the parties by making reciprocal concessions, avoid a litigation or put an end to one already commenced. Essentially, it is a conduct perfected by mere consent, the latter being manifested by a meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract.

In the present case, the compromise agreement is in writing and, we repeat, attached to a signed Joint Manifestation which was formally filed in the trial court. In Gonzales v. Gonzales,3 [81 Phil. 38.] this Court held that courts cannot deny approval of a compromise agreement except for the grounds provided by law, it partaking the nature of a contract and is thus subject to the same legal provisions affecting contracts in regard to their validity, enforcement, rescission or annulment. The petitioner's contention that the supposed signatory for MIAA, Guillermo Cunanan, is no longer MIAA general manager, is untenable. The mere change in the general managership of a government agency cannot be a reason to abrogate agreements entered into by such official. In Republic v. Sandiganbayan, 4 [226 SCRA 314, 326-330 (1993).] this Court en banc explained through Justice Jose A.R. Melo:

It is non sequitur to suggest that a contract, freely and in good faith executed between the parties thereto is susceptible to disturbance ad infinitum. A different interpretation will lead to the absurd scenario of permitting a party to unilaterally jettison a compromise agreement which is supposed to have the authority of res judicata and, like any other contract, has the force of law between the privies thereto.


More than any person or institution, the government should honor its solemn commitments. It would set a bad precedent and result in public disenchantment with government if every new head of a government agency allowed to freely disown the legitimate agreements of his predecessors x x x. Under the PCGG's theory, there would be nothing to prevent any of its future Chairman from repudiating and revoking acts of his predecessors. The vital elements of trust, honor, and stability in dealing with the government be lost.

It should be stressed that when private respondent asked the trial court for a declaration that the compromise agreement was not contrary to law or public policy, petitioner did not object to said compromise or deny its existence. It merely submitted the matter to the "sound discretion of the (trial) court." If indeed petitioner was convinced of non-existence of such compromise, it should have raised the matter at the first opportunity in the trial court. It was only after Guillermo Cunanan was replaced as MIAA general manager that petitioner decided to deny the compromise for the reason that "he is no longer MIAA general Manager." Raising a new factual matter after trial has ended is prohibited because it denied the other party of due process.

It is, therefore, obvious that petitioner has not shown any reversible error on the part of the respondent court.

IN VIEW OF THE FOREGOING, the petition is hereby DENIED for its failure to show any reversible error in the assailed Decision."

Very truly yours,


Clerk of Court

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