Case Doctrines

Hernando, Lauriana
Case # 1
Subject: Easement of right of way; Compromise Agreement; Contracts
Cathay Land, Inc. v. Ayala Land, Inc.,
G.R. No. 210209, August 9, 2017
Doctrine: A judgment based on compromise agreement shall be

executed/implemented based strictly on the terms agreed upon by the parties.
The Civil Code provides that "[a] compromise is a contract whereby the
parties, by making reciprocal concessions, avoid a litigation or put an end to one
already commenced." It has the effect and authority of res judicata upon the
parties, but there shall be no execution except in compliance with a judicial
compromise.
It is settled that once a compromise agreement is approved by a final order of
the court, it transcends its identity as a mere contract binding only upon the parties
thereto, as it becomes a judgment that is subject to execution in accordance with
the Rules of Court. Judges, therefore, have the ministerial and mandatory duty to
implement and enforce it.
Since the issuance of a writ of execution implementing a judicial compromise
is ministerial in nature, it cannot be viewed as a judgment on the merits as
contemplated by Section 14, Article VIII of the Constitution. To be clear, it is the
decision based on a compromise agreement that is considered as a judgment on the
merits, not the order pertaining to its execution.
Nevertheless, in implementing a compromise agreement, the "courts cannot
modify, impose terms different from the terms of [the] agreement, or set aside
the compromises and reciprocal concessions made in good faith by the
parties without gravely abusing their discretion."
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Case # 2
Subject: Easement of right of way; Just Compensation
National Power Corp. v. Spouses Zabala
G.R. No. 173520, January 30, 2013
Doctrine: Section 3A of RA No. 6395 cannot restrict the constitutional power of the
courts to determine just compensation.
In insisting that the just compensation cannot exceed 10% of the market value of the
affected property, Napocor relies heavily on Section 3A of RA No. 6395, the pertinent
portions of which read:
Sec. 3A. In acquiring private property or private property rights through
expropriation proceedings where the land or portion thereof will be
traversed by the transmission lines, only a right-of-way easement
thereon shall be acquired when the principal purpose for which such
land is actually devoted will not be impaired, and where the land itself or
portion thereof will be needed for the projects or works, such land or
portion thereof as necessary shall be acquired.
In determining the just compensation of the property or property sought
to be acquired through expropriation proceedings, the same shall:
(a) With respect to the acquired land or portion thereof, not to
exceed the market value declared by the owner or administrator
or anyone having legal interest in the property, or such market
value as determined by the assessor, whichever is lower.
(b) With respect to the acquired right-of-way easement over the
land or portion thereof, not to exceed ten percent (10%) of the
market value declared by the owner or administrator or anyone
having legal interest in the property, or such market value as
determined by the assessor whichever is lower.
This ruling was reiterated in Republic v. Lubinao, National Power

Corporation v. Tuazon and National Power Corporation v.
Saludares and continues to be the controlling doctrine. Notably,
in all these cases, Napocor likewise argued that it is liable to pay
the property owners for the easement of right-of-way only and not
the full market value of the land traversed by its transmission
lines. But we uniformly held in those cases that since the high-
tension electric current passing through the transmission lines will
perpetually deprive the property owners of the normal use of their
land, it is only just and proper to require Napocor to recompense
them for the full market value of their property.
Case # 3
Subject: Rescission of Contract; Contract to Sell
Spouses Bonrostro v. Spouses Luna
G.R. No. 172346, July 24, 2013
Doctrine:
The RTC in resolving the Complaint focused on the sole issue of whether
the failure of spouses Bonrostro to pay the installments of P300,000.00 on April
30, 1993 and P330,000.00 on July 31, 1993 is a substantial breach of their
obligation under the contract as to warrant the rescission of the same.
Clearly, the RTC arrived at the above-quoted conclusion based on its
mistaken premise that rescission is applicable to the case. Hence, its
determination of whether there was substantial breach. As may be recalled,
however, the CA, in its assailed Decision, found the contract between the
parties as a contract to sell, specifically of a real property on installment basis,
and as such categorically declared rescission to be not the proper remedy.
This is considering that in a contract to sell, payment of the price is a positive
suspensive condition, failure of which is not a breach of contract warranting
rescission under Article 1191 29 of the Civil Code but rather just an event that
prevents the supposed seller from being bound to convey title to the
supposed buyer. Also, and as correctly ruled by the CA, Article 1191 cannot
be applied to sales of real property on installment since they are governed by
the Maceda Law.
There being no breach to speak of in case of non-payment of the purchase
price in a contract to sell, as in this case, the RTC's factual finding that Lourdes
was willing and able to pay her obligation — a conclusion arrived at in connection
with the said court's determination of whether the non-payment of the purchase
price in accordance with the terms of the contract was a substantial breach
warranting rescission — therefore loses significance. The spouses Bonrostro's
reliance on the said factual finding is thus misplaced. They cannot invoke their
readiness and willingness to pay their obligation on November 24, 1993 as an
excuse from being made liable for interest beyond the said date.

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Hernando, Lauriana

Subject: Easement of right of way; Compromise Agreement; Contracts

Cathay Land, Inc. v. Ayala Land, Inc.,

G.R. No. 210209, August 9, 2017

Doctrine: A judgment based on compromise agreement shall be

This ruling was reiterated in Republic v. Lubinao, National Power

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