Commercial Credit Corporation Cagayan De Oro v. Court Of Appeals

GANCAYCO, J.:

In this petition for review of a decision of the Court of Appeals in CA G.R. SP No. 108881 the issue is whether or not a compromise judgment which was found by the Court of Appeals to be lawful may be modified by the same court. Sometime in 1978 private respondent Cagayan De Oro Coliseum, Inc. executed a promissory note in the amount of P329,852.54 in favor of petitioner Commercial Credit Corporation of Cagayan de Oro, payable in 36 monthly installments. The note is secured by a real estate mortgage duly executed by private respondent in favor of petitioner.

As said respondent defaulted in the payment of the monthly installments due, petitioner proceeded with the extrajudicial foreclosure of the real estate mortgage in September, 1979. Five minority stockholders of private respondent then instituted Special Civil Action No. 68111 in the then Court of First Instance (CFI) of Misamis Oriental questioning the power of the private respondent to execute the real estate mortgage without the consent of its stockholders. In due course a compromise agreement was entered into by the parties on the basis of which a compromise judgment was rendered by the trial court on March 11, 1980 which reads as follows: "JUDGMENT The parties in the above-entitled case assisted by their respective counsel, submitted for the approval of the Court the following Compromise Agreement, to wit: COMES NOW, Parties, Petitioners and Respondents, represented by their respective counsels, unto this Honorable Court, most respectfully submit for approval the following Compromise Agreement: 1.

That, Petitioners herein hereby state that they ratified and approved the loan and real estate mortgage entered into and assigned by the Cagayan de Oro Coliseum, Inc. to the Commercial Credit Corporation of Cagayan de Oro and as such therefore, the issue raised by the herein petitioners in the above entitled case has become moot and academic; 2. That, by virtue of the aforementioned, the Cagayan de Oro Coliseum, Inc. thru its Board of Directors and represented by its President, Mr. Johnny Wilson, hereby admits its total outstanding obligation to herein Respondent Commercial Credit Corporation of Cagayan de Oro in the amount of TWO HUNDRED FORTY NINE THOUSAND TWO HUNDRED SIXTY THREE & 23/100 PESOS (P 249,263.23), as of February 15, 1980, including therein the sum of P 10,000.00 representing attorney's fees for Respondent Commercial Credit Corporation of Cagayan de Oro; 3. That the Cagayan de Oro Coliseum, Inc. has agreed to pay the above obligation plus interest on diminishing balance computed yearly at sixteen (16) percent per annum, thus: Total Account....................

P 249,263.23 Total Interest...................... P 76,138.60