REPUBLIC OF THE PHILIPPINES

SUPREME COURT
MANILA

SILVER FILMS, INC.,

Petitioner,

- versus - G.R. No. 1234567

LORENZO GARCIA, (CA-GR CV No. 54389)

Respondent.

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PETITION FOR REVIEW ON CERTIORARI

Petitioner, by his counsel and to this Honorable Supreme Court most respectfully alleges
that:
NATURE OF THE PETITION

1. This is a petition for review under Rule 42 of the Rules of Court, a mode of appeal
from a judgment of the Court of Appeals, rendered in the exercise of its appellate
jurisdiction.
2. Final judgment or order of the Court of Appeals in an appeal from the final judgment or
order of a Regional Trial Court may be appealed to the Supreme Court through Petition for
Review under this rule, where the appeal involves pure questions of law.

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 THE PARTIES

3. Petitioner Silver Films, Inc. (Silver Films) is a domestic corporation engaged in film
production and distribution. It holds office at 10th Floor, Prime Building, Ermita, Manila,
represented by his counsel of record, Atty. Andres Rizal, with office address at 403
McKinley Village, Taguig City.
4. Respondent Lorenzo Garcia (Garcia) is a Filipino, of legal age and a resident of Manila
City. He can be served with the processes of the Court thru his counsel of record, Atty.
Maria Leila B. Penera with office address at 5/F Rivera Santos Building, 54 Antonio Luna
Street, Sta. Cruz, Manila.

MATERIAL DATES
5. This case o r i gi n a t e d from the Regional Trial Court (RTC Branch 107, Manila)
docketed as Civil Case No. 30012, from which the judge rendered an Order on 24 October
2004 approving the 17 June 2003 amendment entered by the parties as a Compromise
Agreement.
6. Petitioner filed its Motion to Dismiss on the ground that the dispute between the parties
had already been settled and amicably resolved as per amendment to the 2000 and 2002
Contract dated 17 June 2003. RTC noted that the Amendment dated 17 June 2003 was
the basis of petitioner Silver Films, Inc.’s Motion to Dismiss, it resolved to render
a compromise judgment in favor of respondent.
7. The RTC, for the resolution of motions filed by petitioner Silver Films, Inc. rendered
on its 06 March 2005 Order a judgment terminating the proceedings of the case and
denying the Motion for Reconsideration and Motion to Defer Filing of Answer for having
become moot and academic, while upholding the compromise judgment on its 24 October
2004 Order.
8. On 05 June 2005 (on the case docketed as CA-G.R. No. 54389), the Court of Appeals
affirmed the 24 October 2004 Order of the RTC which ruled that the amendment dated
17 June 2003 between Brenda Simon and petitioner Silver Films, Inc. was a compromise
agreement, and was ratified when respondent Garcia expressed his conformity through his
03 July 2004 Manifestation.

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 STATEMENT OF THE MATTERS INVOLVED

9. Actor Lorenzo Garcia and Brenda Simon – Garcia’s talent manager, sued Silver Films,
Inc. for rescission of the actor’s movie contract and for damages. Before filing an answer,
Silver Films, Inc. entered into an amendment of contracts with Simon maintaining
the contract but providing for payment of a substantial sum of money and a parcel of
land in Quezon City. Garcia claimed no authorization of the agreement for what he wanted
was for the producer to release him from the contract.
10. As the case dragged on, Garcia got involved in a film festival scandal that tainted his
image. When Silver Films, Inc. offered to release him from his contract, he suddenly had
a change of heart. He told the court that he would now accept the agreement signed by
his talent manager, on the condition that it will be considered as a compromise agreement.
11. Over the objections of Silver Films, Inc., the trial court rendered judgment on the Civil
Case No. 30012 approving the compromise agreement and directing the producer to
pay. Court of Appeals in its Decision dated 05 June 2005 affirmed the trial court’s
judgment and made the following rulings:

First. Since there was consent of all parties, there was an Amendment
or Compromise Agreement to the contract signed by Simon and Silver
Films’ representative to which amendment Garcia through his Manifestation
expressed his conformity.

Second. The compromise agreement was perfected and is binding on the parties
and may not later be disowned simply because of a change of mind of Silver Films
and/or Simon by claiming, in their Opposition/Reply to Garcia’s Manifestation, that
after the 2000 National Film Festival fiasco in which Garcia was involved, the
relationship between the parties had become bitter to render compliance with the
terms and conditions of the amendment no longer possible and consequently release
Garcia from the 2000 and 2002 contracts.

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12. Silver Films, Inc. implores the Court to rectify the above rulings for not only do they
contravene the law, they are also irrational and unjust.

THE FACTS AND THE CASE

13. Brenda Simon and Lorenzo Garcia filed with the lower court a Complaint dated 27 May
2003 which sought the rescission of the 2002 Agreement entered into with petitioner Silver
Films, Inc.
14. While the case was pending, a renegotiation between Garcia, represented by Simon, and
Silver Films, Inc. took place which resulted in an amendment dated 17 June 2003 that
superseded all terms and conditions embodied in their previous contracts.
15. Silver Films, Inc. and Simon separately filed Motions to Dismiss on the ground that the
dispute involving the parties had already been settled through said Amendment.
16. Garcia opposed the Motions to Dismiss, alleging that he did not authorize Simon to
represent him in the renegotiation of the agreements.
17. Subsequently, Garcia, in a Manifestation dated 03 July 2004, expressed his willingness to
honor the terms and conditions of the Amendment dated 17 June 2003 on the supposition
that it shall be considered a Compromise Agreement.
18. Silver Films, Inc. and Simon opposed Garcia’s proposal to treat the said Amendment as a
Compromise Agreement. Instead, Silver Films, Inc. suggested that the terms and
conditions to the Agreement reached by the parties during the preliminary conference
held on 23 June 2004 be adhered to, i.e., Silver Films, Inc. shall release Garcia from his
contractual commitments.
19. The trial court in the case docketed as Civil Case No. 30012, rendered an order dated 24
October 2004, treating the Addendum to the 2000 and 2002 Contracts dated 17 June 2003
as a Compromise Agreement and denying all pending motions, including the Motions to
Dismiss separately filed by Silver Films and Simon.

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 20. Silver Films, Inc. filed a Motion for Reconsideration of the order dated 24 October
2004. The lower court, however, rendered an Order dated 06 March 2005 which
denied the Motion for Reconsideration filed by Silver Films, Inc. and ruled in favor of
Garcia, stating that:

“A compromise agreement was entered into by the parties through the

Amendment dated 17 June 2003. xxx”.

21. Silver Films, Inc. appealed the decision to the Court of Appeals and the case was docketed
as CA-G.R. CV No. 54389. Silver Films, Inc. filed its appellant’s brief. In response, Garcia
filed his appellee’s brief.
22. On 05 June 2005 the Court of Appeals affirmed the decision of the trial court, hence,
this petition.

QUESTIONS OF LAW

Petitioner Silver Films Inc. presents the following questions of law:

1.
WHETHER OR NOT THE ADDENDUM SUBMITTED BY SILVER FILMS, INC. TO
SERVE AS BASIS FOR ITS MOTION TO DISMISS CAN BE USED IN RENDERING
JUDGMENT ON A COMPROMISE AGREEMENT.

2.
WHETHER OR NOT THERE IS A BASIS IN FACT AND IN LAW FOR A
COMPROMISE AGREEMENT THERE BEING NO SUCH AGREEMENT BETWEEN THE
PARTIES.

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 3.
WHETHER OR NOT THERE HAS BEEN MEETING OF THE MINDS BETWEEN THE
PARTIES THAT ELEVATED THE PREVIOUSLY REJECTED ADDENDUM TO THE
LEVEL OF A JUDGMENT ON A COMPROMISE.

REASONS FOR ALLOWING THE PETITION

I.
RENDERING A JUDGMENT ON COMPROMISE BASED ON THE ADDENDUM
SUBMITTED TO MERELY SERVE AS A BASIS FOR MOTION TO DISMISS IS
UNTENABLE.

If the motion to dismiss filed by Silver Films, Inc. has been denied, then the basis thereof –
addendum dated 17 June 2003, cannot be used as the basis for judgment on compromise. In fact,
the RTC stated in its 24 October 2004 Order that it agrees with Silver Films, Inc. that indeed
no formal compromise agreement was submitted by the parties for the approval of the court.
However, it was urged to believe that there was a settlement of dispute between the parties in
view of the Amendment dated 17 June 2003 which in fact was used as a basis for asking the
dismissal of the complaint.

The lower Court erred in denying the motion to dismiss filed pursuant to the Amendment and in
treating the rejected Amendment as the Compromise Agreement itself. The denial of the motion
to dismiss amounts to a rejection of the Amendment, hence, this indisputable circumstance bars
the trial court from treating the rejected Amendment as the Compromise Agreement.

II.
RENDERING JUDGMENT ON A COMPROMISE AGREEMENT WHEN THE
PARTIES DID NOT AGREE IS ERRONEOUS.

The Court of Appeals affirmed the ruling of the trial court which ruled that the agreement
entered into by Silver Films and Brenda Simon, and later on ratified by Garcia is a compromise
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agreement. This is despite the facts that Simon and Silver Films did not treat it to be a compromise,
and that defendant initially disapproved such agreement for being grossly disadvantageous to
him, and that he did not give his manager the consent to represent him in such agreement. In
its 06 March 2004 Order, the trial court held that:

“A compromise agreement was entered into by parties through the Amendment

dated 17 June 2003. A perusal of the Amendment dated 17 June 2003 shows that
it was duly signed by plaintiff Simon as agent of plaintiff Garcia and defendant
Silver Films, Inc. and their respective counsel. Though the terms thereof are
disadvantageous to him, plaintiff Garcia ratified the same. Thus, for all intents and
purposes, the subject amendment has all the attributes of a compromise agreement
though not denominated as such.”

A compromise agreement is a contract whereby the parties, by making reciprocal concessions,

avoid litigation or put an end to one already commenced. As a contract, a compromise agreement
must have the following indispensable elements: (a) consent; (b) Object certain which is the
subject matter of the contract; And (c) cause of the obligation which is established. Civil Code of
the Philippines, Art. 1318.

There are two kinds of compromise agreements, the judicial, which puts an end to a pending
litigation, and the extrajudicial, which is to avoid litigation. As a contract, a compromise
agreement is perfected by mutual consent. A judicial compromise, however, while binding
between the parties upon its execution, is not executory until it is approved by the court and reduced
to a judgment.

From the collection of facts, both parties executed an agreement dated 17 June 2003 which was to
operate as an addendum to the 2000 and 2002 contracts between them. The agreement was
signed by a representative of Silver Films, Inc. and by Simon purportedly acting for and in behalf
of respondent Garcia. This addendum was rejected by Garcia and this rejection terminated the
offer.

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In relation to this addendum prior to the rejection of Garcia, a preliminary conference was held
by the trial court but failed to produce settlement between the parties, which simply shows that
there is no agreement to begin with. Thus, when respondent later filed his Manifestation on 03
July 2004 stating that he was, in the end, willing to honor the addendum provided that it be
considered as a compromise agreement, there was nothing to still accept.

Even assuming that an extrajudicial compromise agreement existed, Silver Films, Inc. has not
given consent to such. Or even assuming that a judicial compromise existed, the approval of
the court would be untenable because it did not become binding between the parties upon
its execution, because it was not amenable to Silver Films. This makes the decision of the
courts erroneous in rendering Garcia’s offer as a valid compromise agreement.

The intent of Silver Films, Inc. to disregard all the previous agreements – including the
addendum which was not even settled in court, is clearly shown in the new 23 June 2004 contract
it entered with Simon, which seeks to release Garcia from all his contractual commitments.
Conclusively, the parties indeed did not agree to such compromise agreement.

III.
RENDERING A JUDGMENT THAT THERE HAS BEEN MEETING OF THE
MINDS BETWEEN THE PARTIES THAT ELEVATED THE PREVIOUSLY
REJECTED ADDENDUM TO THE LEVEL OF A JUDGMENT ON A COMPROMISE
AGREEMENT IS ERRONEOUS.

The Court of Appeals rendered judgment on a compromise when such compromise has not
been perfected by the acceptance of all the parties. It ruled that:

"In the instant case, there was an Amendment to the contract signed by
Simon and Silver Films' representative to which addendum Garcia
through his Manifestation expressed his conformity. There was, therefore,
consent of all the parties.”

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Consent is defined as the concurrence of the wills of the contracting parties with respect to the
object and the cause which shall constitute the contract. It is the meeting of the minds between
all the parties regarding the contract. It was stated on the facts of the case that said 17 June 2003
agreement entered by Silver Films and Brenda Simon was to be treated as an amendment to
the prior 2000 and 2002 contracts.

However, such agreement was not settled in court which means that no agreement existed. Also,
it was never meant and agreed by them to be a compromise agreement. In the first place,
respondent Garcia did not approve such agreement and he communicated his disapproval about
it. Therefore, there was no concurrence of the wills or meeting of the minds of all the parties
concerned on the assailed agreement and consequently, no compromise agreement can be
executed.

Consent is manifested by the meeting of the offer and the acceptance upon the thing and the
cause which are to constitute the contract. The offer must be certain and the acceptance absolute.
A qualified acceptance constitutes a counter-offer.

The condition that Garcia will ratify the agreement provided that it should be considered as a
compromise agreement constitutes a counter offer. Meaning, the original offer ceased to exist,
and the new qualified offer in the part of Garcia will only constitute a valid agreement if
accepted by Silver Films, Inc. It is undisputed that Silver Films did not consent to such offer
making the counter offer as good as null, and must be equally treated as that of the rejected
addendum.

We can therefore arrive that the addendum is inexistent so is the compromise agreement that is
invoked by Garcia. Hence, the court erred in treating the proposed addendum as a compromise
agreement that will enable Garcia to maintain his uphold contract.

Garcia’s contention that he did not give his manager the consent to represent him in the 17 June
2003 agreement would make the addendum unenforceable. Consequently, it would make the
compromise agreement unenforceable as well.

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Even honoring the Manifestation of Garcia will not support the erroneous ruling, because of the
absence of his consent in the addendum which is the basis of the compromise agreement he seeks
to uphold. It is a rule that consent could be given not only by the party himself but by anyone
duly authorized and acting for and in his behalf. However, by Garcia’s own admission, the
addendum was entered into without his knowledge and consent.

Provisions of the Civil Code which govern defective contracts provide that a contract entered
into in the name of another by one who ostensibly might have but who, in reality, had no
real authority or legal representation, or who, having such authority, acted beyond his powers,
would be unenforceable. Unenforceable contracts are susceptible of ratification; however it should
have been made before its revocation by the other contracting party. Silver Films, Inc. revoked
the addendum thereby invalidating Garcia’s ratification, when the producer expressed its
willingness to release respondent from all his contractual agreements during the preliminary
conference held on 23 June 2003.

PRAYER

WHEREFORE, premises considered, it is most respectfully prayed that the RTC Order dated
24 October, 2004 and the CA Decision dated 5 June 2005 appealed from be reversed and set aside
and the case be DISMISSED. Petitioner prays for cost of the suit and for other reliefs as may be
deemed just or equitable.

Taguig City for Manila, March 30, 2016

ANDRES RIZAL Counsel for Petitioner

403 McKinley Village, Taguig City
PTR No. 21453
IBP No. 02602 Roll No. 01034

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MCLE Compliance No. 16-0021563
Email: andresrizal@gmail.com
Tel and Fax

Copy furnished by registered mail due to distance and lack of material time and personnel at the
time of service.

Mayer LawOffices
Atty. Katy Mayer
9/F Victory 1 Condominium,
4520 Kalaw St. Manila

Regional TrialCourt
RTC 107
Manila

Court of Appeals
Manila

Andres Rizal

VERIFICATION AND CERTIFICATION

I, Atty Jessica Pearson, of legal age and with office address at Bridgestone Bldg, Roxas
Boulevard, Manila, after having sworn in accordance with law, depose and state that:

1. I am the General Counsel and Corporate Secretary of Silver Films, duly empowered to cause
the filing of this petition on its behalf under a board resolution, copy here attached;

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2. I have read the foregoing petition and the facts stated in it are true based on the authentic
record of the case;
3. I have not theretofore commenced any action or filed any claim involving the same issues in
any court, tribunal, or quasi-judicial agency;
4. To the best of my knowledge, no such action or claim is pending therein; and
5. If I should thereafter learn that the same or a similar action or claim has been filed or
pending, I shall report that fact within (5) days therefrom to this Court.

JESSICA
PEARSON

SUBSCRIBED AND SWORN to before me this 30th day of March 2016 in Quezon City.
Affiant exhibited to me his LTO Driver’s License No. N10-86-253798, expiring on January 1,
2020.

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