Case Digest: Master Tours v. CA, G.R. No. 105409, March 1, 1993

Labor Law | Bureau of Labor Relations

• Master Tours and Travel Corporation received summons and an Order of Attachment from Cathay Pacific Airways Ltd., leading to the sheriff immediately levying properties equivalent to Cathay's claim.
• Petitioner moved to set aside the attachment order due to lack of prior notice or hearing and unsatisfactory allegations in the complaint.
• While motions were pending, petitioner's counsel and vice-president were allegedly coerced into a compromise agreement by the respondent sheriff and Cathay's counsel.
• Petitioner moved to withdraw the said compromise agreement before the trial court could approve the same. 
• Trial Court: Denied petitioner's twin motions.
• Court of Appeals: Dismissed the petition. 

WoN a compromise agreement which has not been approved by the court may be withdrawn. NO

Davao Light and Power, Co., Inc. vs. Court of Appeals (G.R. No. 93262, November 29, 1991, 204 SCRA 343) lays down the rules on the issuance of writs of attachment ex-parte:

"A preliminary attachment may be defined, paraphrasing the Rules of Court, as the provisional remedy in virtue of which a plaintiff or other proper party may, at the commencement of the action or at any time thereafter, have the property of the adverse party taken into the custody of the court as security for the satisfaction of any judgment that may be recovered. It is a remedy which is purely statutory in respect of which the law requires a strict construction of the provisions granting it. Withal no principle, statutory or jurisprudential, prohibits its issuance by any court before acquisition of jurisdiction over the person of the defendant.

Rule 57 in fact speaks of the grant of the remedy 'at the commencement of the action or at any time thereafter.' The phrase, 'at the commencement of the action,' obviously refers to the date of the filing of the complaint — which, as above pointed out, is the date that marks 'the commencement of the action;' and the reference plainly is to a time before summons is served on the defendant, or even before summons issues. What the rule is saying quite clearly is that after an action is properly commenced — by the filing of the complaint and the payment of all requisite docket and other fees — the plaintiff may apply for and obtain a writ of preliminary attachment upon fulfillment of the pertinent requisites laid down by law, and that he may do so at any time, either before or after service of summons on the defendant. And this indeed, has been the immemorial practice sanctioned by the courts: for the plaintiff or other proper party to incorporate the application for attachment in the complaint or other appropriate pleading (counter-claim, cross-claim, third-party claim) and for the Trial Court to issue the writ ex-parte at the commencement of the action if it finds the application otherwise sufficient in form and substance."

" . . . The only pre-requisite is that the Court be satisfied, upon consideration of 'the affidavit of the applicant or of some other person who personally knows the facts, that a sufficient cause of action exists, that the case is one of those mentioned in Section 1 . . (Rule 57), that there is no other sufficient security for the claim sought to be enforced by the action, and that the amount due to the applicant, or the value of the property the possession of which he is entitled to recover, is as much as the sum for which the order (of attachment) is granted above all legal counterclaims.' If the court be so satisfied, the 'order of attachment shall be granted,' and the writ shall issue upon the applicant's posting of 'a bond executed to the adverse party in an amount to be fixed by the judge, not exceeding the plaintiff's claim, conditioned that the latter will pay all the costs which may be adjudged to the adverse party and all damages which he may sustain by reason of the attachment, if the court shall finally adjudge that the applicant was not entitled thereto.'"

Petitioner likewise raises the issue of the permissibility of withdrawing a compromise agreement which has not been approved by the court. The rule is that a judgment rendered in accordance with a compromise agreement is immediately executory unless a motion is filed to set aside the agreement on the ground of fraud, mistake or duress in which case an appeal may be taken against the order denying the motion. (Arkoncel, Jr. v. Lagamon, G.R. No. 50526, December 4, 1991, 204 SCRA 560).

In its order of 17 October 1991 (p. 249, Rollo), the Regional Trial Court said:

"The Court does not believe, so to speak, that the Executive Vice President, who signed the compromise agreement cannot bind the defendant for if it were otherwise, the defendant corporation's board as portrayed above, would have been on guard.

The compromise agreement, to say the least, in the contemplation of the law, is a valid document binding not only on the Executive Vice President, but also on the defendant corporation itself. It is not vitiated by what the Executive Vice President of the defendant corporation and the lawyer representing both call — lack of authority and threat and intimidation — that compelled them (Executive Vice President and counsel) to sign it. This protestation, is amply refuted in the plaintiff's opposition . . . ."

The propriety or improriety of withdrawing the compromise agreement is more a question of fact than of law in this particular case.

ACCORDINGLY, the petition is DENIED, there being no reversible error committed by respondent appellate court.