Compromise agreement

METRO MANILA SHOPPING MECCA CORP., SHOEMART, INC., SM PRIME HOLDINGS, INC., STAR APPLIANCES CENTER, SUPER VALUE, INC., ACE HARDWARE PHILIPPINES, INC., HEAL TH AND BEAUTY, INC., JOLLIMART PHILS. CORP., and SURPLUS MARKETING CORPORATION vs. MS. LIBERTY M. TOLEDO, in her official capacity as the City Treasurer of Manila, and THE CITY OF MANILA, G.R. No. 190818, November 10, 2014

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“x x x.

A compromise agreement is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.8 It contemplates mutual concessions and mutual gains to avoid the expenses of litigation; or when litigation has already begun, to end it because of the uncertainty of the result.9 Its validity is dependent upon the fulfillment of the requisites and principles of contracts dictated by law; and its terms and conditions must not be contrary to law, morals, good customs, public policy, and public order.10 When given judicial approval, a compromise agreement becomes more than a contract binding upon the parties. Having been sanctioned by the court, it is entered as a determination of a controversy and has the force and effect of a judgment. It is immediately executory and not appealable, except for vices of consent or forgery. The nonfulfillment of its terms and conditions justifies the issuance of a writ of execution; in such an instance, execution becomes a ministerial duty of the court.11

A review of the whereas clauses12 of the UCA reveals the various court cases filed by petitioners, including this case, for the refund and/or issuance of tax credit covering the local business taxes payments they paid to respondent City of Manila pursuant to Section 21 of the latter’s Revenue Code.13 Thus, contrary to the submission of respondents, the local business taxes subject of the instant case is clearly covered by the UCA since they were also paid in accordance with the same provision of the Revenue Code of Manila.

In this relation, it is observed that the present case would have been rendered moot and academic had the parties informed the Court of the UCA’s supervening execution.14 Be that as it may, and considering that: (a) the UCA appears to have been executed in accordance with the requirements of a valid compromise agreement; (b) the UCA was executed more than a year prior to the promulgation of the subject Decision; and (c) the result of both the UCA and the subject Decision are practically identical, i.e., that petitioners are not entitled to any tax refund/credit, the Court herein resolves to approve and adopt the pertinent terms and conditions of the UCA insofar as they govern the settlement of the present dispute.

X x x.”