RULE 5 - BRGY e.

Enforcement by execution of amicable settlement is only

CRISANTA MIGUEL v. JERRY MONTANEZ applicable if the contracting parties have not repudiated such
GR 191336 settlement within 20 days from date thereon
January 25, 2012 i. Accordance with: Sec 416 of the LGC or
ROC
FACTS: ii. Considered rescinded and insist upon
his original demand
- MONTANEZ secured a loan P 143,864 iii. “Fail to abide by the compromise, the
- Payable in 1 year OR until Feb 1, 2002 other party may either enforce the
- From MIGUEL compromise or regard it as rescinded
- Collateral – house and lot located at Caloocan and insist upon his original demand”
- Failure to pay the loan iv. 2041: consider it rescinded; authority to
- MIGUEL filed before the Lupong tagapamayapa of Brgy San insits on the original demand
Jose, Rodriguez, Rizal 1. No action for rescission is
- Entered into a KASUNDUANG PAGAAYOS required
o Respondent agreed to pay 2. Pursue suit as if there had
o Installments never been any compromise
o 2K/month 3. Without bringing an action for
o Fail – settle in full rescission
- Res failed to pay 4. Need not ask for judicial
declaration of rescission
- Lupong issued a CERTIFICATION to file action in court in
5. Regrard compromise
favor of MIGUEL
agreement as rescinded
- Filed before MTC Makati – Collection of sum of money
v. 2039: cause of annulment or rescission
- ANSWER: Improper venue (petitioner was resident of f. 2-TIERED MODE OF ENFORCEMENT OF AN AMICABLE
Caloocan while he lived in Rizal) SETTLEMENT:
- MTC: ordered JERRY to pay i. Execution by the punong barangay
- Appeal to RTC of MAKATI (quasi-judicial and summary in nature)
o Respondent raised the same issue AND
- RTC affirmed MTC ii. Action in regular form, which remedy is
- Appeal to CA judicial
o Whether or not venue was improperly laid AND g. Petitioner’s noncompliance paved way for application of
o Whether kasunduang pag-aayos effectively 2041, enforce compromise
novated the loan agreement i. Following the procedure of Revised
- CA: Reversed and set aside RTC Katarungang Pambarangay Law OR
o No novation ii. Regard as rescinded and insist on his
o Merely supplemented the old agreement original demand
o Such pagaayos has the force and effect of a court h. Respondent choose the latter option when instituted the
judgment case
- Filed with SC i. Non-compliance considered as REPUDIATION
i. Did not intend to be bound by the terms
ISSUES: thereof
a. Whether complaint for sum of money is the proper remedy ii. Petition has the option
for the petitioner, notwithstanding the Kasunduang Pagaayos j. Having instituted a collection for sum of money, petitioner
b. Whether CA should have decided the case on the merits obviously chose to rescind the agreement
rather the case for the enforcement of the Kasunduan k. CA erred when it remanded the case to the trial court
i. Fact that petitioner opted it to be
HELD: rescinded, CA should decide on the
a. Respondent failed to comply with the kasunduan, agreement merits of the case
is deemed RESCINDED (Art 2041) ii. Kasunduang Pagaayos – well nigh
i. Can enforce action for collection of sum incontrovertible proof of the
of money respondent’s indebtedness with the
b. Cause of action arose from the loan agreement not the petitioner as it was executed precisely to
pagaayos. give the repspndent a second chance to
i. Compromise: effect and authority of res make good on his undertaking.
judicata but there shall be no execution l. PETITION GRANTED.
except in compliance with a judicial
compromise
ii. Even if not judicially approved
iii. Akin to a judgment that is subject to
execution
iv. Enforced within 6 months from date of
settlement by filing an action to enforce
inappropriate city or municipal court, IF
BEYOND 6 MONTH PERIOD.
c. 1ST: Under the LOCAL GOVT CODE and KATARUNGANG
PAMBARANGAY IRR
i. Punong barangay is called to hear and
determine solely the fact of non-
compliance of the terms and settlement
and to give the defaulting party another
chance to VOLUNTARILY COMPLY
with his obligation
d. 2ND: proceedings are governed by the ROC
i. Cause of action is the amicable
settlement itself, by operation of law,
has the force and effect of a final
judgment.