517 Phil. 529
AZCUNA, J.:
On November 11, 1980, plaintiff Security Bank & Trust Company filed a complaint for a Sum of Money with the Regional Trial Court of Pasig, Branch 158 entitled “Security Bank & Trust Company, plaintiff, - versus – Miguel F. Uy, Brigitte E. Uy and Rolando Limpo, defendants[.]” Plaintiff Bank sought to recover the outstanding balance of a promissory note executed by the defendants.At first, the Court of Appeals dismissed the appeal holding that the Compromise Agreement had superseded the promissory note executed between the payee Security Bank & Trust Company (the Bank) and the makers spouses Miguel F. Uy and Brigitte E. Uy (spouses Uy) and Rolando Limpo (Limpo). Limpo, inasmuch as he was never a party to the new agreement, was held to be not bound by its terms and, therefore, was no longer obligated to the Bank. Upon the Bank’s motion for reconsideration, however, the Court of Appeals reversed itself and ordered the continuation of proceedings in Civil Case No. 62226 against Limpo.
On February 1, 1983, defendants-spouses Miguel F. Uy and Brigitte Uy entered into a Compromise Agreement with plaintiff bank. On March 22, 1983, the trial court rendered decision, reproducing therein the pertinent provisions of the Compromise Agreement as follows:“1. Defendant spouses admit liability to the plaintiff the said amount of P38,833.44 as of January 12, 1983;When defendants failed to comply with the terms and conditions of the compromise agreement, plaintiff bank, on November 27, 1984, filed an Ex-Parte Motion for the Issuance of Writ of Execution. The motion not having been acted upon, plaintiff bank, on July 22, 1992, filed a complaint for Revival of Judgment.
2. Defendant spouses agree to pay the plaintiff the said amount of P38,833.44 with interest at the rate of 20% per annum with aforesaid interest rate computed based on declining balance, from January 12, 1983 in the following manner:a) P4,644.00 on or before March 14, 1983 of which P500.00 shall be applied as attorney’s fee; P144.00 the cost of suit, and the remaining balance to the outstanding loan obligation;3. In case of failure to pay any installment when due, the whole balance shall become due and payable, without necessity of demand and defendant spouses shall be assessed a default penalty of 3% per month until the obligation is fully paid. Moreover, plaintiff shall be entitled to a writ of execution upon ex-parte motion.” (RTC Decision, p. 1)
b) P4,000.00 each on or before the 15th day of each month commencing April 1983 until June 1, 1983;
c) P1,500.00 on or before the 15th day of each month commencing July 1983 until the balance and accruing interest thereon is fully paid.
The defendant-spouses, in their Answer, alleged as their defense laches, for failure of plaintiff bank to enforce its rights for more than eight (8) years. Defendant Limpo, on the other hand, alleged that “he is not obligated to pay any amount to plaintiff under the said compromise agreement which was entered into only by and between plaintiff and defendant spouses Miguel F. Uy and Brigitte E. Uy without his knowledge and consent.” (Records, p. 31)
On February 5, 1993, plaintiff bank filed a Motion for Judgment on the Pleadings alleging that defendants spouses’ Answer failed to tender genuine issues. On April 20, 1993, the trial court issued an order against defendants spouses ordering them to pay plaintiff bank the amount of P38,833.44 with interest at the rate of 20% per annum computed from January 12, 1983 until the amount is fully paid. Defendant-spouses appealed this decision to the Court of Appeals, but said appeal was ordered dismissed by this Court’s Special Fifth Division for defendants spouses’ abuse of the extensions of time granted them, pursuant to Section 1 (f) of Rule 50 of the Rules of Court (Rollo, p. 84).
Meanwhile, on June 30, 1993, defendant Limpo filed a Manifestation and Motion praying for the dismissal of the complaint on the ground that the judgment sought to be revived did not include defendant Limpo. After responsive pleadings were filed by the parties, the trial court issued an Order dated November 3, 1993 dismissing the complaint against defendant Limpo. This Order was reiterated by the trial court in the Order dated April 19, 1994 which likewise dismissed defendant Limpo’s compulsory counterclaim.
Not satisfied with the Order of the trial court, plaintiff bank filed the appeal at bench.
Plaintiff-appellant Security Bank & Trust Company assails the Order of the trial court on the basis of the sole assigned error, to wit:“THE LOWER COURT ERRED IN DISMISSING THE INSTANT COMPLAINT AGAINST DEFENDANT-APPELLANT ROLANDO LIMPO.” (Appellant’s Brief, p. 3)
Anent the first two issues, Limpo takes for the negative. He maintains that the Compromise Agreement was executed without his participation and so the trial court’s judgment based on compromise, by obvious consequence, did not and could not have included him as a judgment debtor. Under this circumstance, there would be no basis to include him as a defendant in a complaint for revival of judgment.
- Whether Rolando Limpo is bound under the Compromise Agreement entered into by Security Bank Corporation and defendants Miguel Uy and Brigitte Uy.
- Whether Rolando Limpo is liable to Security Bank Corporation under the trial court’s judgment dated March 22, 1983 which was based on the Compromise Agreement entered into by Security Bank and the defendants Miguel Uy and Brigitte Uy.
- Whether the action by Security Bank against Rolando Limpo, as co-maker of defendants Miguel Uy and Brigitte Uy, [was] already barred by prescription when the action for revival of judgment was filed on July 22, 1992.
x x x If the spouses Uy would become insolvent and could not pay their obligation under the Compromise Agreement, the SBTC [the Bank] could collect the whole amount of the obligation from defendant Rolando Limpo. A judgment, therefore, against Rolando Limpo would not be incompatible with the existence of the Compromise Agreement for in such a situation SBTC could exercise its option to secure execution of judgment against either or both the Uys and Limpo. The only limitation is that SBTC could not collect more than the total amount of indebtedness.The sound reasoning of the Court of Appeals as to the liabilities of a solidary debtor is correct. However, it failed to consider two important incidents that make this case distinct: 1) a judgment had been rendered excluding Limpo; and 2) such judgment had become final.
As will be seen, only Rufina Camino and Pasto Eco were adjudged to pay Alfonso Ortega the amount of P140.00 on February 28, 1951. Although they were included as party defendants, the spouses Fermin Bopis and Emilia Guadalupe were not ordered to pay Alfonso Ortega. Obviously, they were absolved from liability. Accordingly, as to them, there was nothing to execute since they have been absolved from liability.The Court, in that case, ostensibly concluded that a decision that fails to expressly mention the liability of one of the defendants will be taken to mean that he has been absolved in that case. From this pronouncement, the failure to mention Limpo in the judgment of the RTC of Pasig will correspondingly mean his absence of liability to the Bank. As this implied declaration became final with the approval of the Compromise Agreement, the Court of Appeals’ instructions to continue the proceedings against Limpo in Civil Case No. 62226 amount to an alteration of a matter that is already res judicata.