FIRST DIVISION Subsequently, TCT No.
T-102563 of the Registry of Deeds of Lipa City was issued to cover the
G.R. No. 182349 July 24, 2013
REMAN RECIO, Petitioner, vs.
HEIRS OF THE SPOUSES AGUEDO and MARIA ALTAMIRANO, namely: ALEJANDRO,
ADELAIDA, CATALINA, ALFREDO, FRANCISCO, all surnamed ALTAMIRANO;
VIOLETAALTAMIRANO OLFATO, and LORETAALTAMIRANO VDA. DE MARALIT and SPOUSES
LAURO and MARCELINA LAJARCA, Respondents.
DECISION
REYES, J.:
This petition for review on certiorari1 under Rule 45 of the Rules of Court seeks to modify the
Decision2 of the Court of Appeals (CA) dated November 29, 2007 in CA-G.R. CV No. 86001,
affirming with modification the Decision3dated August 23, 2005 of the Regional Trial Court
(RTC) of Lipa City, Branch 85 in Civil Case No. 97-0107. The petitioner asks this Court to
reinstate in full the said RTC decision.
The Facts
In the 1950’s, Nena Recio (Nena), the mother of Reman Recio (petitioner), leased from the
respondents Alejandro, Adelaida, Catalina, Alfredo, Francisco, all surnamed Altamirano,
Violeta Altamirano Olfato, and Loreto Altamirano Vda. De Maralit (referred to as the
Altamiranos) a parcel of land with improvements, situated at No. 39 10 de Julio Street (now
Esteban Mayo Street), Lipa City, Batangas. The said land has an area of more or less eighty-
nine square meters and fifty square decimeters (89.50 sq m), and is found at the northern
portion of two (2) parcels of land covered by Transfer Certificate of Title (TCT) Nos. 66009
and 66010 of the Registry of Deeds of Lipa City. The Altamiranos inherited the subject land
from their deceased parents, the spouses Aguedo Altamirano and Maria Valduvia.4
Nena used the ground floor of the subject property as a retail store for grains and the upper
floor as the family’s residence. The petitioner claimed that in 1988, the Altamiranos offered
to sell the subject property to Nena for Five Hundred Thousand Pesos (P500,000.00). The
latter accepted such offer, which prompted the Altamiranos to waive the rentals for the
subject property. However, the sale did not materialize at that time due to the fault of the
Altamiranos. Nonetheless, Nena continued to occupy and use the property with the consent
of the Altamiranos.5
Meanwhile, the Altamiranos consolidated the two (2) parcels of land covered by TCT Nos.
66009 and 66010. They were eventually subdivided into three (3) parcels of land which were
then denominated as Lots 1, 2, and 3 of the Consolidation-Subdivision Plan PCS-04-00367.
subject property. The petitioner and his family remained in peaceful possession of Lot No. 3.6
In the latter part of 1994, the petitioner renewed Nena’s option to buy the subject property.
The petitioner conducted a series of negotiations with respondent Alejandro who introduced
himself as representing the other heirs. After the said negotiations, the Altamiranos through
Alejandro entered into an oral contract of sale with the petitioner over the subject property.
In January 1995, in view of the said oral contract of sale, the petitioner made partial
payments to the Altamiranos in the total amount of One Hundred Ten Thousand Pesos
(P110,000.00). Alejandro duly received and acknowledged these partial payments as shown
in a receipt dated January 24, 1995. On April 14, 1995, the petitioner made another payment
in the amount of Fifty Thousand Pesos (P50,000.00), which Alejandro again received and
acknowledged through a receipt of the same date. Subsequently, the petitioner offered in
many instances to pay the remaining balance of the agreed purchase price of the subject
property in the amount of Three Hundred Forty Thousand Pesos (P340,000.00), but
Alejandro kept on avoiding the petitioner. Because of this, the petitioner demanded from the
Altamiranos, through Alejandro, the execution of a Deed of Absolute Sale in exchange for the
full payment of the agreed price.7
Thus, on February 24, 1997, the petitioner filed a complaint for Specific Performance with
Damages. On March 14, 1997, the petitioner also caused to annotate on the TCT No. T-
102563 a Notice of Lis Pendens.8
Pending the return of service of summons to the Altamiranos, the petitioner discovered that
the subject property has been subsequently sold to respondents Lauro and Marcelina Lajarca
(Spouses Lajarca). TCT No. T-102563 was cancelled and a new title, TCT No. 112727, was
issued in the name of the Spouses Lajarca by virtue of a Deed of Sale executed by the latter
and the Altamiranos on February 26, 1998. Thus, the petitioner filed an Amended Complaint
impleading the Spouses Lajarca and adding as a cause of action the annulment of the sale
between the Altamiranos and the Spouses Lajarca.9
Thereafter, trial ensued. Alejandro was called to testify at the instance of the petitioner but
after a brief testimony, he excused himself and never returned to the witness stand despite
several subpoenas. For the respondents, the Altamiranos manifested that they would no
longer present any witness while the Spouses Lajarca were considered to have waived their
right to present evidence since they failed to appear on the day set for them to do so.10
The Ruling of the RTC in Civil Case No. 97-0107
On August 23, 2005, the trial court rendered a decision,11 the dispositive portion of which
reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff and
against the defendants as follows:
1
 1. declaring as NULL AND VOID the Deed of Absolute Sale dated 26 February 1998
between the defendants Altamiranos and the defendants Lajarcas covering that
parcel of land together with all improvements thereon situated at No. 39 10 de
Julio Street (now Esteban Mayo Street), Lipa City, Batangas, containing an area of
more or less Eighty-Nine Square Meters and Fifty Square Decimeters (89.50 sq. m)
then covered by Transfer Certificate of Title No. T-102563 of the Registry of Deeds
of Lipa City;
2. ordering the Register of Deeds of Lipa City to cancel Transfer Certificate of Title
No. T-112727 of the Registry of Deeds of Lipa City in the name of the defendants
Lajarcas and to reinstate Transfer Certificate of Title No. T-102563;
3. directing the defendants Altamiranos to execute a Deed of Absolute Sale in favor
of plaintiff covering the parcel of land together with all improvements thereon
situated at No. 39 10 de Julio Street (now Esteban Mayo Street), Lipa City,
Batangas, containing an area of more or less Eighty-Nine Square Meters and Fifty
Square Decimeters (89.50 sq. m) then covered by Transfer Certificate of Title No. T-
102563 upon payment by said plaintiff of the balance of the purchase price in the
amount of THREE HUNDRED FORTY THOUSAND PESOS (P340,000.00).
4. directing the defendants Altamiranos and Lajarcas, jointly and severally, to pay
plaintiff moral damages in the amount of P100,000.00, actual and compensatory
damages in the amount of P100,000.00, P50,000.00 as exemplary damages and the
sum of P50,000.00 as attorney’s fees plus P2,500.00 for every hearing attended as
and for appearance fees, and costs of suit.
SO ORDERED.12
Aggrieved, the Spouses Lajarca filed an appeal assailing the above RTC decision.
The Ruling of the CA in CA-G.R. CV No. 86001
In its Decision13 dated November 29, 2007, the CA affirmed with modification, the dispositive
portion of which states:
WHEREFORE, premises considered, the August 23, 2005 Decision of the Regional Trial Court,
Br. 85, Fourth Judicial Region, Lipa City, in Civil Case No. 97-0107, is hereby AFFIRMED with
MODIFICATION. Concomitantly, judgment is hereby rendered, as follows:
1) The complaint, as far as Adelaida Altamirano, Catalina Altamirano, Alfredo
Altamirano, Francisco Altamirano, Violeta Altamirano Olfato and Loreta Altamirano
vda. de Maralit are concerned, is hereby DISMISSED;
2) The contract of sale between Alejandro Altamirano and Reman Recio is VALID
only with respect to the aliquot share of Alejandro Altamirano in the lot previously
covered by TCT No. T-102563 (now covered by TCT No. 112727);
3) The Deed of Sale, dated February 26, 1998, between the Altamiranos and the
Lajarca Spouses is declared NULL and VOID as far as the aliquot share of Alejandro
Altamirano is concerned;
4) Reman Recio is DECLARED a co-owner of the Spouses Lauro and Marcelina
Lajarca over the property previously covered by TCT No. T-102563 (now TCT No.
112727), his share being that which previously corresponds to the aliquot share of
Alejandro Altamirano; and
5) The damages awarded below to Reman Recio are AFFIRMED. No costs.
SO ORDERED.14
In précis, the CA found and ruled as follows:
1) That the summons to Alejandro is not summons to the other Altamiranos since
Alejandro’s authority to represent his co-heirs is disputed for lack of a written
special power of attorney (SPA). Furthermore, the CA found that the Altamiranos,
save for Alejandro and Violeta, reside abroad with unknown addresses. Thus, for
the CA, summons to the non-resident Altamiranos should have been served
extraterritorially as provided in Section 15, Rule 1415 of the Revised Rules of
Court.16
2) That there was a valid contract of sale entered into by Alejandro and the
petitioner considering that: (a) Alejandro did not make any express reservation of
ownership or title to the subject parcel of land, and that he issued receipts
precisely to acknowledge the payments made for the purchase of Lot No. 3; (b)
Alejendro actually delivered Lot No. 3 to the petitioner and waived the rental
payments thereof; (c) Alejandro did not actually refuse the petitioner’s offer to pay
the balance of the purchase price but instead, merely avoided the petitioner; and
(d) all the elements of a valid contract of sale exist in the transaction between the
petitioner and the Altamiranos.17
3) That Alejandro’s sale of Lot No. 3 did not bind his co-owners because a sale of
real property by one purporting to be an agent of the owner without any written
authority from the latter is null and void. An SPA from the co-owners pursuant to
Article 1878 of the New Civil Code is necessary.
However, the CA held that the contract of sale between Alejandro and the petitioner is valid
because under a regime of co-ownership, a co-owner can freely sell and dispose his
2
undivided interest, citing Acabal v. Acabal.18Furthermore, the Spouses Lajarca were not
buyers in good faith because they had knowledge of the prior sale to the petitioner who even
caused the annotation of the Notice of Lis Pendens on TCT No. T-102563.19
The CA, thereby, held that insofar as the verbal contract of sale between Alejandro and the
petitioner is concerned, Alejandro’s disposition affects only his pro indiviso share, such that
the transferee (the petitioner) receives only what corresponds to Alejandro’s undivided share
in the subject lot. Likewise, the CA declared the deed of absolute sale between the
Altamiranos and the Spouses Lajarca valid only insofar as the aliquot shares of the other
Altamiranos are concerned. Thus, in effect, the petitioner and the Spouses Lajarca are co-
owners of the subject property.
Not satisfied with the decision, the petitioner sought reconsideration but his motion was
denied in the CA Resolution20 dated March 18, 2008.
Issue
The petitioner filed the instant petition alleging in the main that the CA gravely and seriously
erred in modifying the RTC decision.
Our Ruling
The petition has no merit.
Under Rule 45 of the Rules of Court, jurisdiction is generally limited to the review of errors of
law committed by the appellate court. The Supreme Court is not obliged to review all over
again the evidence which the parties adduced in the court a quo. Of course, the general rule
admits of exceptions, such as where the factual findings of the CA and the trial court are
conflicting or contradictory.21 In the instant case, the findings of the trial court and its
conclusion based on the said findings contradict those of the CA. After a careful review, the
Court finds no reversible error with the decision of the CA.
At the core of the present petition is the validity of the verbal contract of sale between
Alejandro and the petitioner; and the Deed of Absolute Sale between the Altamiranos and
the Spouses Lajarca involving the subject property.
A valid contract of sale requires: (a) a meeting of minds of the parties to transfer ownership
of the thing sold in exchange for a price; (b) the subject matter, which must be a possible
thing; and (c) the price certain in money or its equivalent.22
In the instant case, all these elements are present. The records disclose that the Altamiranos
were the ones who offered to sell the property to Nena but the transaction did not push
through due to the fault of the respondents. Thereafter, the petitioner renewed Nena’s
option to purchase the property to which Alejandro, as the representative of the Altamiranos
verbally agreed. The determinate subject matter is Lot No. 3, which is covered under TCT No.
T-102563 and located at No. 39 10 de Julio Street (now Esteban Mayo Street), Lipa City,
Batangas.23 The price agreed for the sale of the property was Five Hundred Thousand Pesos
(P500,000.00).24 It cannot be denied that the oral contract of sale entered into between the
petitioner and Alejandro was valid.
However, the CA found that it was only Alejandro who agreed to the sale.1âwphi1 There is
no evidence to show that the other co-owners consented to Alejandro’s sale transaction with
the petitioner. Hence, for want of authority to sell Lot No. 3, the CA ruled that Alejandro only
sold his aliquot share of the subject property to the petitioner.
In Alcantara v. Nido,25 the Court emphasized the requirement of an SPA before an agent may
sell an immovable property. In the said case, Revelen was the owner of the subject land. Her
mother, respondent Brigida Nido accepted the petitioners’ offer to buy Revelen’s land at Two
Hundred Pesos (P200.00) per sq m. However, Nido was only authorized verbally by Revelen.
Thus, the Court declared the sale of the said land null and void under Articles 1874 and 1878
of the Civil Code.26
Articles 1874 and 1878 of the Civil Code explicitly provide:
Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the
authority of the latter shall be in writing; otherwise, the sale shall be void.
Art. 1878. Special powers of attorney are necessary in the following cases:
xxxx
(5) To enter into any contract by which the ownership of an immovable is transmitted or
acquired either gratuitously or for a valuable consideration;
The petitioner insists that the authority of Alejandro to represent his co-heirs in the contract
of sale entered into with the petitioner had been adequately proven during the trial. He
alleges that the other Altamiranos are deemed to have knowledge of the contract of sale
entered into by Alejandro with the petitioner since all of them, either personally or through
their authorized representatives participated in the sale transaction with the Spouses Lajarca
involving the same property covered by TCT No. T-102563. In fact, said TCT even contained a
notice of lis pendens which should have called their attention that there was a case involving
the property. Moreover, the petitioner points out that Alejandro represented a considerable
majority of the co-owners as can be observed from other transaction and documents, i.e.,
three (3) Deeds of Sale executed in favor of the Spouses Lajarca and the two other buyers of
the parcels of land co-owned by the Altamiranos.27
3
The petitioner’s contentions are untenable. Given the expressed requirement under the
Articles 1874 and 1878 of the Civil Code that there must be a written authority to sell an
immovable property, the petitioner’s arguments must fail. The petitioner asserts that since
TCT No. T-102563 contained a notice of lis pendens, the Altamiranos very well knew of the
earlier sale to him by Alejandro. While this may be true, it does not negate the fact that
Alejandro did not have any SPA. It was a finding that need not be disturbed that Alejandro
had no authority from his co-owners to sell the subject property.
share of respondent Alejandro is concerned. Being a co-owner, Alejandro can validly and
legally dispose of his share even without the consent of all the other co-heirs.33 Since the
balance of the full price has not yet been paid, the amount paid shall represent as payment
to his aliquot share.34 This then leaves the sale of the lot of the Altamiranos to the Spouses
Lajarca valid only insofar as their shares are concerned, exclusive of the aliquot part of
Alejandro, as ruled by the CA. The Court finds no reversible error with the decision of the CA
in all respects.

Moreover, the fact that Alejandro allegedly represented a majority of the co-owners in the WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated November
transaction with the Spouses Lajarca, is of no moment. The Court cannot just simply assume 29, 2007 in CA-G.R. CV No. 86001 is AFFIRMED.
that Alejandro had the same authority when he transacted with the petitioner.
SO ORDERED.
In Woodchild Holdings, Inc. v. Roxas Electric and Construction Company, Inc.28 the Court
stated that "persons dealing with an assumed agency, whether the assumed agency be a
general or special one, are bound at their peril, if they would hold the principal liable, to
ascertain not only the fact of agency but also the nature and extent of authority, and in case
either is controverted, the burden of proof is upon them to establish it."29 In other words,
when the petitioner relied only on the words of respondent Alejandro without securing a
copy of the SPA in favor of the latter, the petitioner is bound by the risk accompanying such
trust on the mere assurance of Alejandro.

The same Woodchild case stressed that apparent authority based on estoppel can arise from
the principal who knowingly permit the agent to hold himself out with authority and from
the principal who clothe the agent with indicia of authority that would lead a reasonably
prudent person to believe that he actually has such authority.30 Apparent authority of an
agent arises only from "acts or conduct on the part of the principal and such acts or conduct
of the principal must have been known and relied upon in good faith and as a result of the
exercise of reasonable prudence by a third person as claimant and such must have produced
a change of position to its detriment."31 In the instant case, the sale to the Spouses Lajarca
and other transactions where Alejandro allegedly represented a considerable majority of the
co-owners transpired after the sale to the petitioner; thus, the petitioner cannot rely upon
these acts or conduct to believe that Alejandro had the same authority to negotiate for the
sale of the subject property to him.

Indeed, the petitioner can only apply the principle of apparent authority if he is able to prove
the acts of the Altamiranos which justify his belief in Alejandro’s agency; that the
Altamiranos had such knowledge thereof; and if the petitioner relied upon those acts and
conduct, consistent with ordinary care and prudence.32

The instant case shows no evidence on record of specific acts which the Altamiranos made
before tile sale of the subject property to the petitioner, indicating that they fully knew of the
representation of Alejandro. All that the petitioner relied upon were acts that happened
after the sale to him. Absent the consent of Alejandro's co-owners, the Court holds that the
sale between the other Altamiranos and the petitioner is null and void. But as held by the
appellate court, the sale between the petitioner and Alejandro is valid insofar as the aliquot
4
 e) A parcel of Cogon land situated at Brgy. Labney, San Jacinto, Pangasinan, with an
area of 14133 sq. meters, more or less declared under Tax Declaration No. 14 of
the land records of San Jacinto, Pangasinan assessed at P2830.00 x x x.1
FIRST DIVISION

On January 5, 1997, an amicable settlement was reached between the parties. By reason
G.R. No. 158901 March 9, 2004
thereof, respondent Arjona executed a document denominated as "PAKNAAN"
("Agreement", in Pangasinan dialect), which reads:
PROCESO QUIROS and LEONARDA VILLEGAS, petitioners, vs.
MARCELO ARJONA, TERESITA BALARBAR, JOSEPHINE ARJONA, and CONCHITA
AGREEMENT
ARJONA, respondents.

I, MARCELO ARJONA, of legal age, resident of Barangay Sapang, Buho, Palayan City, Nueva
DECISION
Ecija, have a land consisting of more or less one (1) hectare which I gave to Proceso Quiros
and Leonarda Villegas, this land was inherited by Doza that is why I am giving the said land to
YNARES-SANTIAGO, J.: them for it is in my name, I am affixing my signature on this document for this is our
agreement besides there are witnesses on the 5th day (Sunday) of January 1997.
Assailed in this petition for review is the decision of the Court of Appeals in an action for the
execution/enforcement of amicable settlement between petitioners Proceso Quiros and Signed in the presence of:
Leonarda Villegas and respondent Marcelo Arjona. Appellate court reversed the decision of
the Regional Trial Court of Dagupan City-Branch 44 and reinstated the decision of the
(Sgd) Avelino N. De la Masa, Jr.
Municipal Trial Court of San Fabian-San Jacinto, Pangasinan.

(Sgd) Marcelo Arjona

On December 19, 1996, petitioners Proceso Quiros and Leonarda Villegas filed with the office
of the barangay captain of Labney, San Jacinto, Pangasinan, a complaint for recovery of
ownership and possession of a parcel of land located at Labney, San Jacinto, Pangasinan. Witnesses:
Petitioners sought to recover from their uncle Marcelo Arjona, one of the respondents
herein, their lawful share of the inheritance from their late grandmother Rosa Arjona Quiros 1) (Sgd.) Teresita Balarbar
alias Doza, the same to be segregated from the following parcels of land:
2) (Sgd.) Josephine Arjona
a) A parcel of land (Lot 1, plan Psu-189983, L.R. Case No. D-614, LRC Record No. N-
22630), situated in the Barrio of Labney, Torud, Municipality of San Jacinto, 3) (Sgd.) Conchita Arjona
Province of Pangasinan x x x Containing an area of Forty Four Thousand Five
Hundred and Twenty (44,520) square meters, more or less, covered by Tax Decl.
No. 607; On the same date, another "PAKNAAN" was executed by Jose Banda, as follows:

b) A parcel of Unirrig. riceland situated at Brgy. Labney, San Jacinto, San Jacinto,
Pangasinan with an area of 6450 sq. meters, more or less declared under Tax Decl.
No. 2066 of the land records of San Jacinto, Pangasinan assessed at P2390.00 x x x;
c) A parcel of Unirrig. riceland situated at Brgy. Labney, San Jacinto, Pangasinan
with an area of 6450 sq. meters, more or less, declared under Tax Declaration No.
2047 of the land records of San Jacinto, Pangasinan assessed at P1700.00 x x x
d) A parcel of Unirrig. riceland situated at Brgy. Labney, San Jacinto, Pangasinan
assessed at P5610.00 x x x;
AGREEMENT
I, JOSE BANDA, married to Cecilia L. Banda, of legal age, and resident of Sitio Torrod,
Barangay Labney, San Jacinto, Pangasinan. There is a land in which they entrusted to me and
the same land is situated in Sitio Torrod, Brgy. Labney, San Jacinto, Pangasinan, land of
Arjona family.
I am cultivating/tilling this land but if ever Leonarda Villegas and Proceso Quiros would like to
get this land, I will voluntarily surrender it to them.

5
In order to attest to the veracity and truthfulness of this agreement, I affixed (sic) my The pivotal issue is the validity and enforceability of the amicable settlement between the
signature voluntarily below this document this 5th day (Sunday) of January 1997. parties and corollary to this, whether a writ of execution may issue on the basis thereof.

(Sgd.) Jose Banda In support of their stance, petitioners rely on Section 416 of the Local Government Code
which provides that an amicable settlement shall have the force and effect of a final
Signed in the presence of: judgment upon the expiration of 10 days from the date thereof, unless repudiated or
nullified by the proper court. They argue that since no such repudiation or action to nullify
has been initiated, the municipal court has no discretion but to execute the agreement which
(Sgd) Avelino N. de la Masa, Sr.
has become final and executory.
Barangay Captain
Brgy. Labney, San Jacinto
Pangasinan Petitioners likewise contend that despite the failure of the Paknaan to describe with
certainty the object of the contract, the evidence will show that after the execution of the
agreement, respondent Marcelo Arjona accompanied them to the actual site of the
Witnesses:
properties at Sitio Torod, Labney, San Jacinto, Pangasinan and pointed to them the 1 hectare
property referred to in the said agreement.
1) Irene Banda (sgd.)
2) Jose (illegible) x x x
In their Comment, respondents insist that respondent Arjona could not have accompanied
petitioners to the subject land at Torrod, Labney because he was physically incapacitated and
Petitioners filed a complaint with the Municipal Circuit Trial Court with prayer for the there was no motorized vehicle to transport him to the said place.
issuance of a writ of execution of the compromise agreement which was denied because the
subject property cannot be determined with certainty.
The Civil Code contains salutary provisions that encourage and favor compromises and do
not even require judicial approval. Thus, under Article 2029 of the Civil Code, the courts must
The Regional Trial Court reversed the decision of the municipal court on appeal and ordered endeavor to persuade the litigants in a civil case to agree upon some fair compromise.
the issuance of the writ of execution. Pursuant to Article 2037 of the Civil Code, a compromise has upon the parties the effect and
authority of res judicata, and this is true even if the compromise is not judicially approved.
Respondents appealed to the Court of Appeals, which reversed the decision of the Regional Articles 2039 and 2031 thereof also provide for the suspension of pending actions and
Trial Court and reinstated the decision of the Municipal Circuit Trial Court.2 mitigation of damages to the losing party who has shown a sincere desire for a compromise,
in keeping with the Code’s policy of encouraging amicable settlements.3
Hence, this petition on the following errors:
Cognizant of the beneficial effects of amicable settlements, the Katarungang Pambarangay
I Law (P.D. 1508) and later the Local Government Code provide for a mechanism for
conciliation where party-litigants can enter into an agreement in the barangay level to
reduce the deterioration of the quality of justice due to indiscriminate filing of court cases.
THE PAKNAAN BEING A FINAL AND EXECUTORY JUDGMENT UNDER THE LAW IS AN Thus, under Section 416 of the said Code, an amicable settlement shall have the force and
IMMUTABLE JUDGMENT CAN NOT BE ALTERED, MODIFIED OR CHANGED BY THE COURT effect of a final judgment of the court upon the expiration of 10 days from the date thereof,
INCLUDING THE HIGHEST COURT; and unless repudiation of the settlement has been made or a petition to nullify the award has
been filed before the proper court
II
Petitioners submit that since the amicable settlement had not been repudiated or impugned
THE SECOND PAKNAAN ALLEGEDLY EXECUTED IN CONJUNCTION WITH THE FIRST PAKNAAN before the court within the 10-day prescriptive period in accordance with Section 416 of the
WAS NEVER ADDUCED AS EVIDENCE BY EITHER OF THE PARTIES, SO IT IS ERROR OF Local Government Code, the enforcement of the same must be done as a matter of course
JURISDICTION TO CONSIDER THE SAME IN THE DECISION MAKING. and a writ of execution must accordingly be issued by the court.

6
Generally, the rule is that where no repudiation was made during the 10-day period, the
amicable settlement attains the status of finality and it becomes the ministerial duty of the
court to implement and enforce it. However, such rule is not inflexible for it admits of certain
exceptions. In Santos v. Judge Isidro,4 the Court observed that special and exceptional
circumstances, the imperatives of substantial justice, or facts that may have transpired after
the finality of judgment which would render its execution unjust, may warrant the
suspension of execution of a decision that has become final and executory. In the case at bar,
the ends of justice would be frustrated if a writ of execution is issued considering the
uncertainty of the object of the agreement. To do so would open the possibility of error and
future litigations.
The Paknaan executed by respondent Marcelo Arjona purports to convey a parcel of land
consisting of more or less 1 hectare to petitioners Quiros and Villegas. Another Paknaan,
prepared on the same date, and executed by one Jose Banda who signified his intention to
vacate the parcel of land he was tilling located at Torrod, Brgy. Labney, San Jacinto,
Pangasinan, for and in behalf of the Arjona family. On ocular inspection however, the
municipal trial court found that the land referred to in the second Paknaan was different
from the land being occupied by petitioners. Hence, no writ of execution could be issued for
failure to determine with certainty what parcel of land respondent intended to convey.
In denying the issuance of the writ of execution, the appellate court ruled that the contract is
null and void for its failure to describe with certainty the object thereof. While we agree that
no writ of execution may issue, we take exception to the appellate court’s reason for its
denial.
Since an amicable settlement, which partakes of the nature of a contract, is subject to the
same legal provisions providing for the validity, enforcement, rescission or annulment of
ordinary contracts, there is a need to ascertain whether the Paknaan in question has
sufficiently complied with the requisites of validity in accordance with Article 1318 of the
Civil Code.5
There is no question that there was meeting of the minds between the contracting parties. In
executing the Paknaan, the respondent undertook to convey 1 hectare of land to petitioners
who accepted. It appears that while the Paknaan was prepared and signed by respondent
Arjona, petitioners acceded to the terms thereof by not disputing its contents and are in fact
now seeking its enforcement. The object is a 1-hectare parcel of land representing
petitioners’ inheritance from their deceased grandmother. The cause of the contract is the
delivery of petitioners’ share in the inheritance. The inability of the municipal court to
identify the exact location of the inherited property did not negate the principal object of the
contract. This is an error occasioned by the failure of the parties to describe the subject
property, which is correctible by reformation and does not indicate the absence of the
principal object as to render the contract void. It cannot be disputed that the object is
determinable as to its kind, i.e.1 hectare of land as inheritance, and can be determined
without need of a new contract or agreement.6 Clearly, the Paknaan has all the earmarks of a
valid contract.
Although both parties agreed to transfer one-hectare real property, they failed to include in
the written document a sufficient description of the property to convey. This error is not one
for nullification of the instrument but only for reformation.
Article 1359 of the Civil Code provides:
When, there having been a meeting of the minds of the parties to a contract, their true
intention is not expressed in the instrument purporting to embody the agreement by reason
of mistake, fraud, inequitable conduct or accident, one of the parties may ask for the
reformation of the instrument to the end that such true intention may be expressed.
If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the minds of
the parties, the proper remedy is not reformation of the instrument but annulment of the
contract.
Reformation is a remedy in equity whereby a written instrument is made or construed so as
to express or conform to the real intention of the parties where some error or mistake has
been committed.7 In granting reformation, the remedy in equity is not making a new contract
for the parties, but establishing and perpetuating the real contract between the parties
which, under the technical rules of law, could not be enforced but for such reformation.
In order that an action for reformation of instrument as provided in Article 1359 of the Civil
Code may prosper, the following requisites must concur: (1) there must have been a meeting
of the minds of the parties to the contract; (2) the instrument does not express the true
intention of the parties; and (3) the failure of the instrument to express the true intention of
the parties is due to mistake, fraud, inequitable conduct or accident.8
When the terms of an agreement have been reduced to writing, it is considered as containing
all the terms agreed upon and there can be, between the parties and their successors in
interest, no evidence of such terms other than the contents of the written agreement, except
when it fails to express the true intent and agreement of the parties thereto, in which case,
one of the parties may bring an action for the reformation of the instrument to the end that
such true intention may be expressed.9
Both parties acknowledge that petitioners are entitled to their inheritance, hence, the
remedy of nullification, which invalidates the Paknaan, would prejudice petitioners and
deprive them of their just share of the inheritance. Respondent can not, as an afterthought,
be allowed to renege on his legal obligation to transfer the property to its rightful heirs. A
refusal to reform the Paknaan under such circumstances would have the effect of penalizing
one party for negligent conduct, and at the same time permitting the other party to escape
the consequences of his negligence and profit thereby. No person shall be unjustly enriched
at the expense of another.
7
WHEREFORE, in view of the foregoing, the petition is DENIED. The Decision dated March 21,
2003 of the Court of Appeals, which reversed the decision of the Regional Trial Court and
reinstated the decision of the Municipal Trial Court, is AFFIRMED. This is without prejudice to
the filing by either party of an action for reformation of the Paknaan executed on January 5,
1997. SO ORDERED.