Pedro de Jesus v. Gonzalo C. Go Quiolay

Summary

The Supreme Court resolved a dispute over compromise agreements in a mortgage foreclosure case brought by a bank commissioner as liquidator. Defendant had proposed two different deeds: one for full debt payment (Exhibit A, unsigned) and another for partial payment of P60,000 plus attorney's fees (Exhibit B, signed). The Court held that only Exhibit B was valid, representing the true intention of parties. Since the compromise agreement had the force of res judicata under Civil Code articles 1809 and 1816, and defendant had paid only P1,000 of the P2,000 attorney's fees required, he must pay the remaining P1,000 to fulfill all conditions precedent for dismissal of the foreclosure case. The decision emphasized that compromise agreements, once properly executed, are binding and have res judicata effect between parties.