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MOBIL

OIL
PHILIPPINES,
INC., petitioner,
vs.
COURT OF FIRST INSTANCE OF RIZAL, BRANCH VI, GEMINIANO F. YABUT and AGUEDA
ENRIQUEZ YABUT, respondents.

FACTS:
On November 8, 1972, petitioner filed a complaint in the Court of First Instance of Rizal against
the partnership La Mallorca and its general partners, which included private respondents, for
collection of a sum of money arising from gasoline purchased on credit but not paid, for damages
and attorney's fees.
On December 22, 1972, petitioner, with leave of court, filed an Amended Complaint impleading the
heirs of the deceased partners as defendants. During the hearing, after petitioner had presented its
evidence, the parties agreed to submit the case for decision on the basis of the evidence on record
adduced by petitioner but "to exclude past interest in the amount of P150,000.00 and to award
nominal attorney's fees." Consequently, on July 25, 1974, a Decision was rendered in favor of the
petitioner and against defendants. Private respondents thereafter filed a Petition to Modify Decision
and/or Petition for Reconsideration, which was opposed by petitioner.
On November 20, 1974, respondent court issued its disputed Order declaring its decision null and
void insofar as private respondents were concerned on the ground that there was no evidence to
show that the counsel for the defendants had been duly authorized by their respective clients to
enter into a stipulation or facts, a compromise agreement or a confession judgment with petitioner,
a ground never raised by the parties. Petitioner filed a Motion for Reconsideration and
Clarification, seeking the reconsideration of said order or, if not reconsidered, clarification from
respondent court as to whether or not there will be further proceedings for reception of private
respondents' evidence in court. Respondent court denied the motion, as well as petitioner's Motion
for the Issuance of a Writ of Execution and Appointment of Special Sheriff, by way of the Order
dated February 20, 1975. Hence, this petition.

ISSUE: Whether or not public respondent acted with grave abuse of discretion
amounting to lack of jurisdiction in declaring null and void its earlier decision of July
25, 1974.
RULING:
We find merit in the instant petition.

The validity of a judgment or order of a court cannot be assailed collaterally unless


the ground of attack is lack of jurisdiction or irregularity in their entry apparent on the
face of the record or because it is vitiated by fraud. If the purported nullity of the
judgment lies on the party's lack of consent to the compromise agreement, the
remedy of the aggrieved party is to have it reconsidered, and if denied, to appeal
from such judgment, or if final to apply for relief under rule 38. 14 It is well settled that
a judgment on compromise is not appealable and is immediately executory unless a
motion is field to set aside the compromise on the ground of fraud, mistake or
duress, in which case an appeal may be taken from the order denying the motion.
As to respondent Geminiano Yabut's claim that he cannot be liable as a partner, he
having withdrawn as such, does not convince Us. The debt was incurred long before
his withdrawal as partner and his resignation as President of La Mallorca on
September 14, 1972. Respondent Geminiano Yabut could not just withdraw
unilaterally from the partnership to avoid his liability as a general partner to third
persons like the petitioner in the instant case.
This is likewise true with regard to the alleged non-active participation of respondent
Agueda Yabut in the partnership. Active participation in a partnership is not a
condition precedent for membership in a partnership so as to be entitled to its profits
nor be burdened with its liabilities.
WHEREFORE, the Orders of November 20, 1974 and February 20, 1975 is hereby
REVERSED and SET ASIDE and the Decision dated July 25, 1975 is reinstated and
declaring the same valid and binding against private respondents Geminiano Yabut
and Agueda Enriquez-Yabut. With costs de officio.
SO ORDERED.