Miguel v. Montanez Case Digest

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RULE 5 - BRGY CRISANTA MIGUEL v. JERRY MONTANEZ GR 191336 January 25, 2012

e. FACTS:

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MONTANEZ secured a loan P 143,864 Payable in 1 year OR until Feb 1, 2002 From MIGUEL Collateral – Collateral – house  house and lot located at Caloocan Failure to pay the loan MIGUEL filed before the Lupong tagapamayapa of Brgy San Jose, Rodriguez, Rizal Entered into a KASUNDUANG PAGAAYOS Respondent agreed to pay o o Installments o 2K/month Fail – Fail – settle  settle in full o Res failed to pay Lupong issued a CERTIFICATION to file action in court in favor of MIGUEL Filed before MTC Makati – Makati  – Collection  Collection of sum of money  ANSWER: Improper venue (petitioner (petitioner was resident of Caloocan while he lived in Rizal) MTC: ordered JERRY to pay  Appeal to RTC of MAKATI o Respondent raised the same issue RTC affirmed MTC  Appeal to CA o Whether or not venue was improperly laid AND o Whether kasunduang pag-aayos e ffectively novated the loan agreement CA: Reversed and set aside RTC o No novation Merely supplemented the old agreement o o Such pagaayos has the force and effect of a court  judgment Filed with SC

ISSUES: a. Whether complaint for sum of money is the proper remedy for the petitioner, notwithstanding the Kasunduang Pagaayos b. Whether CA should have decided the case on the merits rather the case for the enforcement of the Kasunduan HELD: a.

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 j. Respondent failed to comply with the kasunduan, agreement is deemed RESCINDED (Art 2041) i. Can enforce action for collection of sum of money Cause of action arose from the loan agreement not the pagaayos. i. Compromise: effect and authority of res  judicata but there there shall be no execution execution except in compliance with a judicial compromise ii. Even if not judicially approved iii.  Akin to a judgment judgment that is subject subject to execution iv. Enforced within 6 months from date of settlement by filing an action to e nforce inappropriate city or municipal court, IF BEYOND 6 MONTH PERIOD. 1ST: Under the LOCAL GOVT CODE and KATARUNGANG PAMBARANGAY IRR i. Punong barangay is called to hear and determine solely the fact of noncompliance of the terms and settlement and to give the defaulting party another chance to VOLUNTARILY COMPLY with his obligation 2ND: proceedings are governed by the ROC

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Cause of action is the amicable settlement itself, by operation of law, has the force and effect of a final  judgment. Enforcement by execution of amicable settlement is only applicable if the contracting parties have not repudiated such settlement within 20 days from date thereon i.  Accordance with: Sec 416 of the LGC LGC or ROC ii. Considered rescinded and insist upon his original demand iii.  “Fail to abide by by the compromise, compromise, the other party may either enforce the compromise or regard it as rescinded and insist upon his original demand”  iv. 2041: consider it rescinded; authority to insits on the original demand 1. No action for rescission is required 2. Pursue suit as if there had never been any compromise 3. Without bringing an action for rescission 4. Need not ask for judicial declaration of rescission 5. Regrard compromise agreement as rescinded v. 2039: cause of annulment or rescission 2-TIERED MODE OF ENFORCEMENT OF AN AMICABLE SETTLEMENT: i. Execution by the punong barangay (quasi-judicial and summary in nature)  AND ii.  Action in regular regular form, which remedy is is  judicial Petitioner’s noncompliance paved way for application of 2041, enforce compromise i. Following the procedure of Revised Katarungang Pambarangay Law OR ii. Regard as rescinded and insist on his original demand Respondent choose the latter option when instituted the case Non-compliance considered as REPUDIATION i. Did not intend to be bound by the terms thereof ii. Petition has the option Having instituted a collection for sum of money, petitioner obviously chose to rescind the agreement CA erred when it remanded the case to the trial court i. Fact that petitioner opted it to be rescinded, CA should decide on the merits of the case ii. Kasunduang Pagaayos – Pagaayos – well  well nigh incontrovertible proof of the respondent’s indebtedness with the petitioner as it was executed precisely to give the repspndent a second chance to make good on his undertaking. PETITION GRANTED.