566 Phil. 275
REYES, R.T., J.:
Appellant does not deny the existence, genuineness, and due execution of the Memorandum of Understanding (MOU) between UNION CEMENT (UCC) AND EAGLE CEMENT CORPORATION (ECC); that it is a corporation which was subsequently merged into UNION CEMENT CORPORATION, the surviving corporation and that it is bound by the MOU; that it recognizes that Rock and Ore Industries, Inc., and ECC have identical controlling interests; and that both parties have agreed to settle this case, upon the swapping contemplated under the MOU.[16]Petitioner, however, resisted the resolution of the appeal on the ground of prematurity. While admitting that it was bound by the MOU, it claims that the swapping of the claims that was at the heart of the MOU had yet to be consummated by the submission by private respondent of data that petitioner would compare with its own. Petitioner also reported that the parties agreed to prepare and submit a joint motion to dismiss to terminate the litigation. It prayed that the MAB hold in abeyance the dismissal of the appeal on the basis of the MOU until a joint motion of the parties is submitted.[17]
WHEREFORE, the foregoing premises considered, the herein Motion for Reconsideration filed by the Appellant is hereby DISMISSED.A reading of the MAB decision reveals that what was under consideration was the letter of Teng praying for the resolution of the case on the ground that the parties had already resolved the issue by virtue of the execution of the MOU. What was disposed by the MAB, however, was the motion for reconsideration filed by petitioner. At any rate, the MAB stated that after the parties failed to respond to its order for them to iron out their differences and file a joint motion, it had no other recourse but to resolve private respondent’s plea to deny the motion for reconsideration. The MAB stated:
SO ORDERED.[21]
Notwithstanding the two (2) Orders of the Chief of the MAB Secretariat, records show that the parties failed to answer the said Order, giving the MAB no other recourse but to resolve the Motion by Rock and Ore to dismiss the pending Motion for Reconsideration of Central Cement Corporation.Petitioner filed a second motion for reconsideration[23] which was denied.[24] It then appealed to the CA.[25]
A thorough examination of the MOU shows that the same is duly executed between the parties. Such genuineness and due execution was expressly recognized and admitted by the Counsel of Central Cement in his Manifestation/Comment dated July 13, 2002. The relationship of the parties to the MOU and the parties of the case is also established. Union Cement Corporation is the surviving corporation of Central Cement while Eagle Cement Corporation is duly authorized by Rock and Ore to execute the MOU. In substance, the MOU hammered out certain points of convergence that have rendered moot and academic the issues in the instant case. Although the Appellant thru Counsel prays for holding in abeyance the resolution of the case in view of some internal matters that has to be ironed out by the parties, the Board is of the position that such matters can not, in any way, affect the agreements reached under the MOU.[22]
IN VIEW OF THE FOREGOING, the MAB issuances of August 29, 2002 and December 10, 2002 are AFFIRMED, with the directive that the parties observe the terms of the MOU dated September 26, 2001 as their compromise agreement.The CA duly noted the oversight in the MAB’s disposition, thus:
SO ORDERED.[26]
On August 29, 2002, only 27 days after its order to the parties, the MAB handed down the controversial resolution, which it calls a Decision, with this cryptic disposition: Wherefore, the foregoing premises considered, the motion for reconsideration filed by the appellant is dismissed.In deciding for the validity of the MOU as a compromise agreement between petitioners and private respondent, the CA ratiocinated:
This resolution opens with the statement that for consideration was the letter dated May 14, 2002 of the respondent’s Teng praying for the resolution of the case on the ground that the parties have already resolved the issue by virtue of the execution of the MOU, and ends by denying the petitioner’s motion for reconsideration. Motion for reconsideration of what? The resolution seems to labor under the impression that the respondent’s letter was asking for the denial of the motion for reconsideration of the petitioner with respect to the MAB’s original decision of January 4, 2001 affirming the Panel of Arbitrators – an interpretation that is not borne out by its language. As the words make clear, the respondent was only seeking a resolution of the case on the ground that the parties have already resolved the issue between them by virtue of the MOU. This is not the same as saying that it wanted the denial of the motion for reconsideration of the decision of January 4, 2001. But in the context in which it looked at the May 14, 2002 letter, the MAB held that after the parties failed to respond to its order to them to iron out their differences and file a motion, it had no other recourse than to resolve the respondent’s plea to deny the motion for reconsideration.[27]
As we said, we have perceived that the MAB’s original decision on the merits of January 4, 2001 is no longer in question here. While it is true that the petitioner filed a motion for reconsideration of this decision, the parties had since then come to an amicable settlement in the form of the MOU. The dispute had funneled into the narrow question of whether the resolution of the case on the basis of the MOU should be held in abeyance until the parties ironed out their differences under the agreement. The objective of the petition for certiorari is, at root, the maintenance of the Order of August 2, 2002, in effect, allowing the parties time to dispose of the case through a joint motion.As already intimated, petitioner’s motion for reconsideration was denied with finality on July 13, 2006.[29] Hence, the present recourse.
The reasons underlying a plea for the deferment of the resolution of the case are not convincing. The petitioner claims that the MAB had acted capriciously when it resolved the case unilaterally against its earlier order to give the parties the right to file the joint motion. But as incisively observed by the Solicitor General, the fact that the MAB came out with a resolution of the motion for reconsideration only 27 days after directing the parties to resolve their differences and file a motion does not reflect an arbitrary and whimsical change of judgment. The records bear out that the MAB endeavored to have the parties resolve their differences by themselves and only when they failed to submit the motion for resolution of the case did the MAB issue its decision. The lapse of a period of 27 days before it acted was well within the range of a reasonable discretion considering that this was an administrative case that had to be resolved with dispatch. The motion that was resolved was ripe for resolution before the parties even began to set the mechanics of settlement in motion. The MAB surely had the right and duty to resolve the case at once given the failure of the parties to act promptly on its directive.
The Solicitor General has concluded that the MAB ruled for the denial of the motion for reconsideration on the ground that the parties had arrived at a resolution of their controversy through the MOU. Everybody seems to agree. The respondent said that the motion for reconsideration was denied by MAB on August 29, 2002 because the MOU rendered the dispute moot and academic. This has been the constant refrain throughout the discussion. The MAB’s intent to consider the case mooted by the MOU may be drawn from its final statement in the August 29, 2002 resolution that whatever internal matters must be ironed out by the parties, they do not affect the agreements reached under the MOU.
It is hard to ignore the logical and legal implications of this ruling. It can only mean that the original MAB decision of January 4, 2001 has become functus officio, the rights and obligations of the parties thereunder being substituted by the rights and obligations of the parties under the MOU. The MOU, in a word, was a compromise agreement. This is the view of the respondent, and we agree. A compromise agreement is a contract where the parties undertake reciprocal obligations to avoid a litigation or put an end to one already commenced. San Antonio v. Court of Appeals, 371 SCRA 536. If the MOU is to be properly understood, the two parties to the case had freely entered into it for the purpose of undertaking reciprocal obligations to put an end to a controversy between them. Once the compromise was perfected, the parties were bound to abide by it in good faith. Ramnani v. Court of Appeals, 360 SCRA 645.
Under Article 2037 of the Civil Code, a compromise has upon the parties the effect and authority of res judicata, but there will be no execution except in compliance with a judicial compromise. Although the MAB did not categorically declare the MOU as approved, it achieved this result when it denied the motion for reconsideration and held that the MOU was not affected by the fact that there were still matters to be threshed out within its framework. We only regret that the MAB could not be as articulate as the situation would demand to make clear a very important right. It is for us in the interest of justice to bridge the divide.
In coming this far, we have actually passed upon the issues raised in the second motion for reconsideration.[28]
On October 2, 2006, private respondent filed a Comment[31] on the petition. The Solicitor General also filed a comment[32] on behalf of the MAB essentially batting for the affirmance of the CA decision.I.
The Honorable Court of Appeals, it is respectfully submitted, committed reversible error when it ruled that the Mines Adjudication Board did not commit grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing the first Motion for Reconsideration of its decision on the merits dated January 4, 2001 which, in effect, reinstated the decision of the Panel of Arbitrators adjudicating MPSA-P-III-117 to respondent Rock and Ore Industries, Inc., under the guise of implementing a judgment on a compromise agreement in the form of a Memorandum of Understanding, thereby denying herein petitioner of property without due process of law in contravention of its constitutional rights.
II.
Assuming without conceding the validity of the Memorandum of Understanding which stipulates for the swapping and adjudication of mining rights as upheld by the Mines Adjudication Board, the Honorable Court of Appeals erred in not finding grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the Mines Adjudication Board when it reached a unilateral, one-sided and biased adjudication in favor of respondent Rock and Ore Industries, Inc., in violation of the letter and spirit of the Memorandum of Understanding as a contract between the parties and thereby impaired the petitioner’s constitutional guarantee of the obligations of contracts.
III.
In any event, the Honorable Court of Appeals committed reversible error when it ruled that, in effect, there was an implementation of a judgment on compromise in the form of a Memorandum of Understanding when the said agreement was conditioned upon the performance of contractual obligations by the respective parties. Besides, by its very provisions, the Memorandum of Understanding has already expired without any of its conditions having been fulfilled.[30] (Underscoring supplied)
The constitutional right to a “speedy disposition of cases” is not limited to the accused in criminal proceedings but extends to all parties in all cases, including civil and administrative cases, and in all proceedings, including judicial and quasi-judicial hearings. Hence, under the Constitution, any party to a case may demand expeditious action on all officials who are tasked with the administration of justice.The need to observe the said constitutional duty was reiterated in Republic v. Sandiganbayan,[36] thus:
The law looks with disfavor on long, protracted and expensive litigation and encourages the speedy and prompt disposition of cases. That is why the law and the rules provide for a number of devices to ensure the speedy disposition of cases.We apply the same principle here. The MAB, as a quasi-judicial body, is constitutionally required to resolve the appeal efficiently and with dispatch. We find that there is more reason that the MAB speedily resolve the appeal because the parties have already amicably settled their dispute. There is no justification why the MAB should still await a joint motion to comply with its constitutional duty. We note that the parties were given ample opportunity to submit a joint motion but they ignored the MAB order. The MAB had no other recourse but to resolve the appeal based on records and the admission of the parties.
The MAB’s August 2, 2002 Order in which it stated that it gave substance and credence to petitioner’s opposition must not be construed as a source of substantive right for petitioner.Worth quoting with Our approval is the observation of the CA along this line:
The MAB merely acknowledged petitioner’s opposition. But to say that the MAB is thereafter constrained to decide it only in petitioner’s favor is to improperly stretch one’s imagination to false insinuations.
The MAB’s resolution was only rendered after a thorough evaluation of the pertinent pleadings before them. It reasonably ruled for the dismissal of the motion for reconsideration on the ground that the parties have substantially arrived at a resolution to the pending controversy.
The fact that petitioner is apprehensive of a possibility that its agreement with private respondent will uneventfully not materialize does validate its accusation against the MAB that it committed grave abuse of discretion in rendering the questioned decision. Furthermore, the MAB must not be faulted if petitioner was taken by surprise by its rendered decision. Having submitted itself to the jurisdiction of the MAB, petitioner must respectfully abide by its ruling which was arrived at after a deliberate consideration of the issue.
Certiorari under Rule 65 of the Revised Rules of Court is not the proper remedy to contest a judgment, which is unfavorable to ones cause of action, absent any showing of grave abuse of discretion.[37]
The reasons underlying a plea for the deferment of the resolution of the case are not convincing. The petitioner claims that the MAB had acted capriciously when it resolved the case unilaterally against its earlier order to give the parties the right to file the joint motion. But as incisively observed by the Solicitor General, the fact that the MAB came out with a resolution of the motion for reconsideration only 27 days after directing the parties to resolve their differences and file a motion does not reflect an arbitrary and whimsical change of judgment. The records bear out that the MAB endeavored to have the parties resolve their differences by themselves and only when they failed to submit the motion for resolution of the case did the MAB issue its decision. The lapse of a period of 27 days before it acted was well within the range of a reasonable discretion considering that this was an administrative case that had to be resolved with dispatch. The motion that was resolved was ripe for resolution before the parties even began to set the mechanics of settlement in motion. The MAB surely had the right and duty to resolve the case at once given the failure of the parties to act promptly on its directive.[38]II. A memorandum of understanding
Appellant does not deny the existence, genuineness, and due execution of the Memorandum of Understanding (MOU) between UNION CEMENT (UCC) and EAGLE CEMENT CORPORATION (ECC); that it is a corporation which was subsequently merged into UNION CEMENT CORPORATION, the surviving corporation and that it is bound by the MOU; that it recognizes that Rock and Ore Industries, Inc., and ECC have identical controlling interests; and that both parties have agreed to settle this case, upon the swapping contemplated under the MOU.[49]The mining claims, MPSA-P-III-117 and MPSA-P-III-24, which are the subject matter of the MOU are the same claims covered by the MAB case between the parties. The pertinent portions of the MOU provide:
This Memorandum of Understanding made and entered into this 26th day of September, 2001, by and between:Third, the parties intended the MOU as a compromise agreement to amicably settle the mining dispute with the MAB. This is clear from the MOU itself, which provides:UNION CEMENT CORPORATION, a corporation duly organized and existing under and by virtue of the laws of the Philippines with principal office address at 166 Salcedo Street, Legaspi Village, Makati City, represented herein by its Senior Executive Vice-President, Dr. Francisco L. Viray, hereinafter referred to as “UCC”;WHEREAS, UCC has in its favor Mineral Production Sharing Agreement (MPSA) No. P-III-31 covering certain parcels of land located in San Ildefonso, Bulacan;
EAGLE CEMENT CORPORATION, a corporation duly organized and existing under and by virtue of the laws of the Philippines with principal office address at Ground Floor, Alegria Building, 2229 Pasong Tamo St., Makati City, represented herein by Ramon S. Ang, hereinafter referred to as “ECC.”
WHEREAS, UCC has in its favor MPSA No. 161-2000-III (previously numbered P-III-24), covering certain parcels of land also located in San Ildefonso, Bulacan;
WHEREAS, UCC and ECC have overlapping mining claims and/or surface ownership rights over certain parcels of land located in San Ildefonso, particularly on the following:
A: Land Ownership – Lot Nos. 3153 and 3977
B: Mining Claims – MPSA 161-2000-III; MPSA-P-III-31; MPSA-P-III-116[50]
WHEREAS, the parties hereto wish to amicably settle their overlapping claims in a fair and equitable manner;Fourth, both parties are bound by the terms of the MOU. Petitioner admitted this in its Manifestation and Comment.[52]
WHEREAS, the parties hereto also wish to consolidate their ownership of certain contiguous parcels of land, necessitating the transfer of certain lots or portions of lots owned by a party to the other party and vice-versa;
WHEREAS, they further wish to maintain the present access road branching from the provincial road and leading to UCC’s cement plant by donating the same to the Municipality of San Ildefonso as road lot/s.[51]
Nor are the execution of the deeds of assignment and the delivery of pertinent data conditions precedent to the validity of the MOU. This is inferable from Section 5, Part IV of the MOU which provides:
- Assignment of UCC’s Mining Rights/Claims – In order to settle the conflicting mining rights and claims of the parties, UCC shall assign in favor of ECC such portions of its various mining rights and/or claims within MPSA 161-2000-III and MPSA P-III-31 as indicated in Annex B-1, and more particularly described as that area bounded by coordinates defines in Annex B-2. UCC is amenable to allow ECC to quarry and extract shale raw materials from the lots that may still be owned by ECC but situated within MPSA 161-2000-III and MPSA P-III-31, under terms and conditions that will be defined later.
- Assignment of ECC’s Mining Rights/Claims – ECC shall reciprocally assign in favor of UCC, all its various mining rights and claims, including those named under its nominees or other entities or persons under its control, over lots or parcels of land whose areas are in conflict with or located within MPSA 161-2000-III and MPSA P-III-31, after excluding therefrom the areas of the mining rights and/or claims assigned and transferred pursuant to Part III, paragraph 1 above, as indicated in Annex C-1, and more particularly described as those areas bounded by coordinates defined in Annex C-2.
- Consolidation of Rights in Each Area – It is understood that the parties intend that surface rights and mining rights shall be both vested in a single party for each particular area. Consequently, ECC shall sell to UCC the remaining parcels of land over which the former holds ownership or other rights or interests, and which parcels are covered by the UCC’s MPSA 161-2000-III and P-III-31, excluding the shale areas mentioned in Part III, Item 1 and those earlier assigned by UCC to ECC. Reciprocally, UCC shall sell to ECC such parcels of land over which it has ownership or other rights or interests that are covered by ECC’s mining claims or agreements.[54]
The above clause requires the parties to execute deeds and perform acts that will be necessary to effectuate the agreement. They are performed after the contract is perfected. Here, the execution of the necessary Deeds of Assignment and the delivery of pertinent data are acts that go into the consummation of the MOU. They are not conditions precedent to its validity.
- The parties agree to execute and deliver such further deeds, documents, and instruments and to perform such further acts that are or may be necessary to fully implement and effectuate the transactions contemplated in this MOU.[55]
When a compromise agreement is given judicial approval, it 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.Accordingly, if the parties fail to comply with the terms of the MOU, the proper remedy is to apply for a writ of execution. Petitioner may apply for a writ to compel private respondent to perform its part of the bargain under the MOU. Private respondent, in turn, may compel petitioner to execute deeds and documents in accordance with the terms of the MOU.
It is hard to ignore the logical and legal implications of this ruling. It can only mean that the original MAB decision of January 4, 2001 has become functus officio, the rights and obligations of the parties thereunder being substituted by the rights and obligations of the parties under the MOU. The MOU, in a word, was a compromise agreement. This is the view of the respondent, and we agree. A compromise agreement is a contract where the parties undertake reciprocal obligations to avoid a litigation or put an end to one already commenced. San Antonio v. Court of Appeals, 371 SCRA 536. If the MOU is to be properly understood, the two parties to the case had freely entered into it for the purpose of undertaking reciprocal obligations to put an end to a controversy between them. Once the compromise was perfected, the parties were bound to abide by it in good faith. Ramnani v. Court of Appeals, 360 SCRA 645.WHEREFORE, the petition is hereby DENIED. The Court of Appeals Decision is AFFIRMED in full.
Under Article 2037 of the Civil Code, a compromise has upon the parties the effect and authority of res judicata, but there will be no execution except in compliance with a judicial compromise. Although the MAB did not categorically declare the MOU as approved, it achieved this result when it denied the motion for reconsideration and held that the MOU was not affected by the fact that there were still matters to be threshed out within its framework. We only regret that the MAB could not be as articulate as the situation would demand to make clear a very important right. It is for us in the interest of justice to bridge the divide.
In coming this far, we have actually passed upon the issues raised in the second motion for reconsideration.[58]