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REPUBLIC OF THE

PHILIPPINES SUPREME
COURT MANILA

SILVER FILMS, INC.


Petition CA-G.R. No. 54389
er, RTC Manila B-107 Appealed
Civil Case No. 30012
--versus--

LORENZO GARCIA,
Responde
nt.

X------------------------------------------X

PETITION FOR REVIEW ON CERTIORARI

Petitioner, by counsel and unto this Honorable Supreme Court most respectfully
alleges that:

NATURE OF THE PETITION

1. This is a petition for review under Rule 45 of the Rules of Court, a mode
of appeal from a judgment of the Court of Appeals, rendered in the exercise of
its appellate jurisdiction.

2. Final judgment or order of the Court of Appeals in an appeal from the fnal
judgment or order of a Regional Trial Court may be appealed to the Supreme
Court through Petition for Review under this rule, where the appeal involves
questions of law.

THE PARTIES

3. Petitioner Silver Films, Inc. (respondent in the court a quo) is a flm


producer engaged in the business of employing actors and actresses for the
motion pictures they produce, and holds ofce in Kamuning Rd., Quezon City,
represented in this case by his counsel of records, Atty. Andres Rizal, with
ofice address at 403 McKinley Village, Taguig City.

4. Private respondent Lorenzo Garcia (petitioner in the court a quo) is an


actor, of legal age, with postal address at No. 44 Maginhawa St., Quezon City,
represented in this case by the Mayer Law Ofces, c/o Atty. Katy Mayer, with
ofce address at unit 9/F Victory 1 Condominium, 4520 Kalaw St., Manila.

5. Parties have the capacity to sue and be sued and may be served
with processes at aforementioned addresses and through counsels of records.

MATERIAL DATES

6. This originated as a case from the Regional Trial Court (RTC Branch 107,
Manila) docketed as Civil Case No. 30012, from which the judge rendered an
Order on 24 October 2004 approving the 17 June 2003 amendment entered by
the parties as a Compromise Agreement.

7. Petitioner fled its Motion to Dismiss on the ground that the dispute
between the parties had already been settled and amicably resolved as per
amendment to the 2000 and 2002 Contract dated 17 June 2003. RTC noted that
notwithstanding that the Amendment dated 17 June 2003 was the basis of
petitioner Silver Films, Inc.s Motion to Dismiss, it resolved to render a
compromise judgment in favor of respondent Garcia.
8. The RTC, for the resolution of motions fled by petitioner Silver Films, Inc.
rendered on its 06 March 2005 Order a judgment terminating the proceedings
of the case and denying the Motion for Reconsideration and Motion to Defer
Filing of Answer for having become moot and academic, while upholding the
compromise judgment on its 24 October 2004 Order.

9. On 05 June 2005 (on the case docketed as CA-G.R. No. 54389), the Court of
Appeals afirmed the 24 October 2004 Order of the RTC which ruled that the
amendment dated 17 June 2003 between Brenda Simon and petitioner Silver
Films, Inc. was a compromise agreement, and was ratifed when respondent
Garcia expressed his conformity through his 03 July 2004 Manifestation.

STATEMENT OF THE MATTERS INVOLVED

10. Actor Lorenzo Garcia and Brenda Simon Garcias talent manager, sued
Silver Films, Inc. for rescission of the actors movie contract and for payment of
damages. Before fling an answer, Silver Films, Inc. entered into an
amendment of contracts with Simon maintaining the contract but providing
for payment of a substantial sum as well as the parcel of land located in
Quezon City to the Garcia. The latter told the court, however, that he did not
authorize the agreement for what he wanted was for the producer to release him
from the contract.

11. As the case dragged on, Garcia got involved in a film festival scandal that
tainted his image. When Silver Films, Inc. offered to release him from his
contract, he suddenly had a change of heart. He told the court that he would
now accept the agreement signed by his talent manager, on the condition that
it will be considered as a compromise agreement.

12. Over the objections of Silver Films, Inc., the trial court rendered judgment
on the Civil Case No. 30012 approving the compromise agreement and
directing the producer to pay the amount mentioned in it. On appeal (CA-
G.R. No. 54389), the Court of Appeals in its Decision dated 05 June 2005
afirmed the trial courts judgment and made the following rulings:

One. Since there was consent of all parties, there was an


Amendment or Compromise Agreement to the contract signed
by Simon and Silver Films representative to which amendment
Garcia through his Manifestation expressed his conformity.

Two. The compromise agreement was perfected and is binding on


the parties and may not later be disowned simply because of a
change of mind of Silver Films and/or Simon by claiming, in their
Opposition/Reply to Garcias Manifestation, that after the 2000
National Film Festival fasco in which Garcia was involved, the
relationship between the parties had become bitter to render
compliance with the terms and conditions of the amendment no
longer possible and consequently release Garcia from the 2000 and
2002 contracts. (At page 4)

13. Silver Films, Inc. implores the Court to rectify the above rulings for not only
do they contravene the law, they are also irrational and unjust.

THE FACTS AND THE CASE


14. Brenda Simon and Lorenzo Garcia fled with the lower court a Complaint
dated 27 May 2003 which sought the rescission of the 2002 Agreement entered
into with petitioner Silver Films, Inc.
15. While the case was pending, a renegotiation between Garcia, represented
by Simon, and Silver Films, Inc. took place which resulted in an amendment
dated 17 June 2003 that superseded all terms and conditions embodied in their
previous contracts.

16. Silver Films, Inc. and Simon separately fled Motions to Dismiss on the
ground that the dispute involving the parties had already been settled through
said Amendment.

17. Garcia opposed the Motions to Dismiss, alleging that he did not authorize
Simon to represent him in the renegotiation of the agreements.

18. Subsequently, Garcia, in a Manifestation dated 03 July 2004, expressed his


willingness to honor the terms and conditions of the Amendment dated 17 June
2003 on the supposition that the same shall be considered a Compromise
Agreement.

19. Silver Films, Inc. and Simon vehemently opposed Garcias proposal to treat
the said Amendment as a Compromise Agreement. Instead, Silver Films, Inc.
suggested that the terms and conditions to the Agreement reached by the
parties during the preliminary conference held on 23 June 2004 be adhered to,
i.e., Silver Films, Inc. shall release Garcia from his contractual commitments.

20. The trial court in the case docketed as Civil Case No. 30012, rendered an
order dated 24 October 2004, treating the Addendum to the 2000 and 2002
Contracts dated 17 June 2003 as a Compromise Agreement and denying all
pending motions, including the Motions to Dismiss separately fled by Silver
Films and Simon.

21. Silver Films, Inc. fled a Motion for Reconsideration of the order dated 24
October 2004. The lower court, however, rendered an Order dated 06 March
2005 which denied the Motion for Reconsideration fled by Silver Films, Inc.
and ruled in favor of Garcia, stating that:

A compromise agreement was entered into by the parties through


the Amendment dated 17 June 2003. xxx. (At page 4)

22. Silver Films, Inc. appealed the decision to the Court of Appeals and the case
was docketed as CA-G.R. CV No. 54389. Silver Films, Inc. fled its appellants
brief. In response, Garcia fled his appellees brief.

23. On 05 June 2005 the Court of Appeals afrmed the decision of the trial
court, hence, this petition.

QUESTIONS OF LAW

Petitioner Silver Films Inc. presents the following questions of law:

1. WHETHER OR NOT THE ADDENDUM SUBMITTED BY SILVER FILMS, INC. TO


MERELY SERVE AS BASIS FOR ITS MOTION TO DISMISS CAN BE USED IN
RENDERING JUDGMENT ON A COMPROMISE AGREEMENT.

2. WHETHER OR NOT THERE IS A BASIS IN FACT AND IN LAW FOR A


COMPROMISE AGREEMENT THERE BEING NO SUCH AGREEMENT BETWEEN THE
PARTIES.
3. WHETHER OR NOT THERE HAS BEEN MEETING OF THE MINDS BETWEEN
THE PARTIES THAT ELEVATED THE PREVIOUSLY REJECTED ADDENDUM TO
THE LEVEL OF A JUDGMENT ON A COMPROMISE.

REASONS FOR ALLOWING THE PETITION

I.
RENDERING A JUDGMENT ON COMPROMISE BASED ON THE ADDENDUM
SUBMITTED TO MERELY SERVE AS A BASIS FOR MOTION TO DISMISS IS
UNTENABLE.

If the motion to dismiss filed by Silver Films, Inc. has been denied, then
the basis thereof addendum dated 17 June 2003, cannot be used as the
basis for judgment on compromise. In fact, the RTC stated in its 24 October
2004 Order that it agrees with Silver Films, Inc. that indeed no formal
compromise agreement was submitted by the parties for the approval of the
court. However, it added that it was urged to believe that there was such a
settlement of dispute between the parties in view of the Amendment dated 17
June 2003 which it in fact used as basis for asking the dismissal of the
complaint.

The lower Court erred in denying the motion to dismiss fled pursuant to the
Amendment and in treating the rejected Amendment as the Compromise
Agreement itself. The denial of the motion to dismiss amounts to a rejection of
the Amendment, hence, this indisputable circumstance bars the trial court from
treating the rejected Amendment as the Compromise Agreement.

II.

RENDERING JUDGMENT ON A COMPROMISE AGREEMENT WHEN THE PARTIES


DID NOT AGREE TO SUCH A COMPROMISE IS ERRONEOUS.

The Court of Appeals afrmed the ruling of the trial court which ruled
that the agreement entered into by Silver Films and Brenda Simon, and later
on ratifed by Garcia is a compromise agreement. This is despite the facts that
Simon and Silver Films did not treat it to be a compromise, and that defendant
initially disapproved such agreement for being grossly disadvantageous to him,
and that he did not give his manager the consent to represent him in such
agreement. In its 06 March 2004 Order, the trial court held that:

A compromise agreement was entered into by parties through the


Amendment dated 17 June 2003. A perusal of the Amendment dated
17 June 2003 shows that it was duly signed by plaintif Simon as agent
of plaintif Garcia and defendant Silver Films, Inc. and their respective
counsel. Though the terms thereof are disadvantageous to him,
plaintif Garcia ratified the same. Thus, for all intents and purposes,
the subject amendment has all the attributes of a compromise
agreement though not denominated as such.
(At page 3)

A compromise agreement is a contract whereby the parties, by making


reciprocal concessions, avoid litigation or put an end to one already
commenced. As a contract, a compromise agreement must have the following
indispensable elements: (a) consent (b) object certain which is the subject
matter of the contract and (c) cause of the obligation which is established.1
There are two kinds of compromise agreements, the judicial, which puts an
end to a pending litigation, and the extrajudicial, which is to avoid litigation.2 As
a contract, a compromise agreement

1
Civil Code of the Philippines, Art. 1318.
2
Civil Code of the Philippines, Art. 2028; Caguioa, VI Commentaries and Cases on Civil Law 292 [1970].
is perfected by mutual consent.3 A judicial compromise, however, while binding
between the parties upon its execution, is not executory until it is approved by
the court and reduced to a judgment.

From the collection of facts, both parties executed an agreement dated 17


June 2003 which was to operate as an addendum to the 2000 and 2002
contracts between them. The agreement was signed by a representative of
Silver Films, Inc. and by Simon purportedly acting for and in behalf of
respondent Garcia. This addendum was flatly rejected by Garcia and this
downright rejection of the addendum made known to the other has terminated
the offer.

In relation to this addendum prior to the rejection of Garcia, a preliminary


conference was held by the trial court but failed to produce settlement
between the parties, which simply shows that there is no agreement to begin
with. Thus, when respondent later fled his Manifestation on 03 July 2004 stating
that he was, in the end, willing to honor the addendum provided that it be
considered as a compromise agreement, there was nothing to still accept.

Even assuming that an extrajudicial compromise agreement existed, Silver


Films, Inc. has not given consent to such. Or even assuming that a judicial
compromise existed, the approval of the court would be untenable because
it did not become binding between the parties upon its execution, because
it was not amenable to Silver Films. This makes the decision of the courts
erroneous in rendering Garcias ofer as a valid compromise agreement.

The intent of Silver Films, Inc. to disregard all the previous agreements
including

the addendum which was not even settled in court, is clearly shown in the new
23 June 2004 contract it entered with Simon, which seeks to release Garcia
from all his contractual commitments. Conclusively, the parties indeed did not
agree to such compromise agreement.

III.

RENDERING A JUDGMENT THAT THERE HAS BEEN MEETING OF THE


MINDS BETWEEN THE PARTIES THAT ELEVATED THE PREVIOUSLY REJECTED
ADDENDUM TO THE LEVEL OF A JUDGMENT ON A COMPROMISE AGREEMENT IS
ERRONEOUS.

The Court of Appeals rendered judgment on a compromise when such


compromise has not been perfected by the acceptance of all the parties. It ruled
that:

"In the instant case, there was an Amendment to the contract


signed by Simon and Silver Films' representative to which
addendum Garcia through his Manifestation expressed his
conformity. There was, therefore, consent of all the parties. (At page
4)

Consent is defned as the concurrence of the wills of the contracting parties


with respect to the object and the cause which shall constitute the contract. It is
the meeting of the minds between all the parties regarding the contract. 4

It was stated on the facts of the case that said 17 June 2003 agreement
entered by Silver Films and Brenda Simon was to be treated as an
amendment to the prior 2000 and 2002 contracts. However, such agreement
was not settled in court which means that no agreement existed. Also, it was
never meant and agreed by them to be a compromise agreement. In the frst
place, respondent Garcia did not approve such agreement and he
communicated his disapproval about it. Therefore, there was no concurrence of
the wills or meeting of the minds of all the parties concerned on the assailed
agreement and consequently, no compromise agreement can be executed.

3
Rovero v. Amparo, 91 Phil. 228 [1952].
4
Jurado, IV Obligations and Contracts [2010].
Consent is manifested by the meeting of the offer and the acceptance upon
the thing and the cause which are to constitute the contract. 5 The offer must be
certain and the acceptance absolute. A qualifed acceptance constitutes a
counter-ofer.

The condition that Garcia will ratify the agreement provided that it should
be considered as a compromise agreement constitutes a counter offer.
Meaning to say, the original ofer ceased to exist, and the new qualifed ofer
in the part of Garcia will only constitute a valid agreement if accepted by
Silver Films, Inc. It is undisputed that Silver Films did not consent to such offer
making the counter ofer as good as null, and must be equally treated as that of
the rejected addendum.

We can therefore arrive that the addendum is inexistent so is the compromise


agreement that is invoked by Garcia. Hence, the court erred in treating the
proposed addendum as a compromise agreement that will enable Garcia to
maintain his uphold contract.

Garcias contention that he did not give his manager the consent to represent
him in the 17 June 2003 agreement would make the addendum
unenforceable. Consequently, it would make the compromise agreement
unenforceable as well.

Even honoring the Manifestation of Garcia will not support the erroneous
ruling, because of the absence of his consent in the addendum which is the
basis of the compromise agreement he seeks to uphold. It is a rule that consent
could be given not only by the party himself but by anyone duly authorized and
acting for and in his behalf. However, by Garcias own admission, the addendum
was entered into without his knowledge and consent.

Provisions of the Civil Code which govern defective contracts provide that a
contract entered into in the name of another by one who ostensibly might
have but who, in reality, had no real authority or legal representation, or who,
having such authority, acted beyond his powers, would be unenforceable.
Unenforceable contracts are susceptible of ratifcation; however it should have
been made before its revocation by the other contracting party.6 Silver Films,
Inc. revoked the addendum thereby invalidating Garcias ratifcation, when the
producer expressed its willingness to release respondent from all his
contractual agreements during the preliminary conference held on 23 June
2003.

PRAYERS

WHEREFORE, premises considered, it is most respectfully prayed that the


RTC Order dated 24 October, 2004 and the CA Decision dated 5 June 2005
appealed from be reversed and set aside and the case be DISMISSED. Petitioner
prays for cost of the suit and for other reliefs as may be deemed just or
equitable.

Taguig City for Manila, March 30, 2016

ANDRES RIZAL
Counsel for
Petitioner
403 McKinley Village,
Taguig City PTR No. 21453
IBP No.
02602 Roll
No. 01034
MCLE Compliance No. 16-
0021563 Email:
andresrizal@gmail.com
Tel and Fax: 4420198

5
Civil Code of the Philippines, Art. 1319.
6
Civil Code of the Philippines, Art. 1318.
Copy furnished by registered mail due to distance and lack of material time
and personnel at the time of service.

Mayer Law
Ofces Atty.
Katy Mayer
9/F Victory 1 Condominium, 4520
Kalaw St. Manila

Regional Trial
Court RTC 107
Manila

Court of
Appeals
Manila

Andres Rizal

VERIFICATION AND CERTIFICATION

I, Atty Jessica Pearson, of legal age and with offce address at


Bridgestone Bldg, Roxas Boulevard, Manila, after having sworn in accordance
with law, depose and state that:

1. I am the General Counsel and Corporate Secretary of Silver Films, duly


empowered to cause the fling of this petition on its behalf under a board
resolution, copy here attached;

2. I have read the foregoing petition and the facts stated in it are true based
on the authentic record of the case;

3. I have not theretofore commenced any action or fled any claim involving the
same issues in any court, tribunal, or quasi-judicial agency;

4. To the best of my knowledge, no such action or claim is pending therein; and

5. If I should thereafter learn that the same or a similar action or claim has
been fled or pending, I shall report that fact within (5) days therefrom to this
Court.

JESSICA PEARSON

SUBSCRIBED AND SWORN to before me this 30th day of March 2016 in


Quezon City. Afant exhibited to me his LTO Drivers License No. N10-86-
253798, expiring on January 1, 2020.
Submitted by: ARTIZUELA JAZZTINE | GAAC IAN GLENN |
REYES ALYSSA MAE In compliance with the course subject
Legal Writing under Atty. Arianne Cerezo