Locgov rOg dela Cuesta

Pasay city v. CFI of Manila (1984) ' Bu

Budg
dg6e 6ent
nt on a co co60
60""o6
o6is
ise
e is <n<nal
al an
and d
 Tuesday, cto!e" #4, $#11
 Tuesday, e>ecuto"y. 7D, e>ecution as al"eady !een
$%4& 'M
issu
issued
ed.. It is o!
o!vi
viou
ouss ttat
at  di
did
d nonott on
only
ly
  Plainti*s+   -efendants
succeed in enfo"cing te co60"o6ise !ut 
Facts: In 194,  /.-. Isi0, ons 2 'ssociates
3ants to "escind te co60"o6ise. Pa"ties to
"e0"esented !y Isi0 ente"ed into a cont"act
co60
co 60""o6o6is
ise
e 6a6ay y eieit
te"
e" 1) enenfo
fo""ce ttee
3it te City of Pasay "e0"esented !y ten
co60"o6ise
co60"o6i se $ to "escind
"escind and insist
insist u0on is
Mayo"
May o" Pa!l
a!lo
o Cu
Cunet
neta.
a. Te concont"a
t"act
ct ent
entitl
itled
ed
o"iginal de6and. 7D 3e cant allo3  to
5Cont"act and 'g"ee6ent5 3as fo"
avail
ava il of !ot
!ot.
. It can
cantt as fo" "e"esc
sciss
ission
ion of 
const"uction of a ne3 Pasay City 7all at F
co60"o6
co60 "o6ise
ise ag"
ag"ee6ent
ee6ent afte" it as al" al"eady
eady
7a""
7a ""is
ison
on t
t.,
., Pas
asay
ay cicity
ty.. Pu
Pu"s
"suauant
nt to t tee
enBo
en Boye
yed d t
tee <"
<"st
st o0o0ti
tion
on of enenfo
fo""ci
cing
ng ttee
cont"act,  0"oceeded 3it te const"uction
co60"o6ise !y asing fo" 3"it of e>ecution
of te ne3 Pas asa
ay Citity
y 7a7alll !uilild
din
ing.
g. 
"es
esul
ulti
ting
ng in ga ga""ni
nis
s6
6enentt of fu
fund
nds s of 
acco60lised va"ious stages of const"uction
de0osited 3E P= 3c eventually 3as
te a6ount of 3o" e:uivalent to P1.;6illion
delive"ed to .
of te total cont"act 0"ice of P4.96illion.
b. Pas
asaay city
cityss !und
!unds
s depo
deposisite
ted
d with
with
 0aid only te totatotall a6ou
a6ountnt of P1.1
P1.16ill
6illion
ion
P"# not e$empt !rom e$ecution.
leaving an a6ount of P1&,###.  failed to
D% 'll gove"n6ent funds de0osited 3E P=
"e6
e6itit t
te
e a6
a6ou
ountnt to  so la latt
tte"
e" <l
<led
ed fofo""
!y any agency o" inst"u6entality of te govt,
s0ec
s0eci<i<c
c 0e
0e"f
"fo"
o"6a
6ancncee 3i3it
t da
da6a6ageges.
s. T
Te e
@= !y 3ay of gene"al o" s0ecial de0osit,
0a"ties a""ived at a d"aft a6ica!le
"e6ain gove"n6ent funds and 6ay not !e
ag""ee
ag ee6e
6entnt 3
3icic
 3a
3as s su
su!6
!6ititte
tedd to t tee
su!B
!Bec
ectt to ga"a"n
nis
is6e
6ent
nt o" lev
evyy. G
GTT
Munici0al oa"d of Pasay City fo" its
inas6uc as an o"dinance as al"eady !een
conside"ation.
enacted
enac ted e>0
e>0"es
"essly
sly a00"
a00"o0"i
o0"iatin
ating
g a6ou
a6ountnt of 
P1& of 0ay6ent to te , funds 6ay !e
In 199, Munici0al oa"d enacted "dinance
ga"nised.
=o.. 1#
=o 1#1$
1$ 3c a0a00"
0"ov
oved
ed t
te
e Co
Co60
60""o6
o6is
ise
e
'g"ee6ent
'g" ee6ent . CFI a00"
a00"oved
oved te co60
co60"o6
"o6ise
ise
De0u
e0u!li
!lic
c v. Pala
alacio
cio%% Hud
Hudg6e
g6ents
nts aga
agains
instt a
ag"ee6ent. CFI issued 3"it of e>ecution. 'n
tate
ta te in ca
cases
ses 3e"e
3e"e it as consen
consentt to !e
a00li
a0 0licat
cation
ion fo" an
andd not
notice
ice of ga"
ga"nis
nis6e
6ent
nt
used, gene"ally o0e"ate to 6e"ely li:uidate
3e"e e*ected u0on te ?s funds 3it te
and esta!lis ?s clai6 in a!sence of e>0"
e>0"ess
ess
Pili00ine =atl an (P=).
0"ovison+
0"ovis on+ ote"3ise, tey cannot !e enfo"ced
!y 0"ocesses of te la3+ and it is fo"
 <led 6otion to :uas te 3"it of  
legis
legislat
latu"
u"ee to 0"
0"ovi
ovide
de fo" t
te
e 0ay
0ay6en
6entt in
e>ecution% a) e"i* as no 0o3e" to levy o"
suc 6anne" as it sees <t.
ga"n
ga"nis
is
 on e> e>ec
ecut
utio
ion
n t
te
e ge
gene
ne"a
"all fu
fund
nds,
s,
s0ecially te t"ust funds of Pasay City.
CFI co"
co""ec
"ectt in "efusing
"efusing ?s 6otion
6otion to :uas
:uas
te 3"it of e>ecution.
CFI% de
CFI% deni
nied
ed an
and
d o"
o"de
de""ed en
enfo
fo""ce
ce6e
6ent
nt of 
ga"nis6ent.
c. %ubm
%ubmis issi
sion
on o! peper! r!or
orma
manc
ncee bobond
nd
o tis suit.
by & not a condition precedent to
payment o! P'()* by +.
Issue: @= Pasay city funds de0osited 3it
Pa"ties envisioned a stage !y stage
P= a"e e>e60t f"o6 e>ecution o"
const"uction on 0a"t of  and 0ay6ent on
ga"n
ga"nis
is6e
6entA
ntA = sin
since
ce o"
o"din
dinanc
ance
e al"
al"ead
eady
y
te 0a"t of  as so3n !y te cont"act and
a00"o0"iated te a6ount.
ag"ee6en
ag"ee6ent. t. Te 0a"t
0a"ties
ies to te co60co60"o"o6ise
6ise
tus
tus cocont
nte6
e60l
0lat
ated
ed a di divi
visi
si!l
!le
e o!
o!li
liga
gati
tion
on
Held:
nec
eces
ess
sita
tati
tin
ng a 0e" e"fo
fo""6a
6ancncee !o!ond
nd 5i 5in
n
a. A compromise agreement not
0"o0o"tion5
0"o0o" tion5 to te unco60leted 3o".
contrary to law, public order, public
policy, morals or good customs is a
 Te"efo"e, su!6issio
 Te"efo"e, su!6ission
n of te !ond 3as not a
valid contract wc is the law
condition 0"ecedent to te 0ay6ent of te
between the parties themselves.
Page 1 of $
 Locgov rOg dela Cuesta

P1& to . =o3e"e in te Cont"act no" in

te Co60"o6ise 'g"ee6ent could !e found
te fact tat 0ay6ent !y s of suc a6ount
3as de0endent u0on te su!6ission !y  of 
te 0e"fo"6ance !ond. It cannot !e a"gued
tat "eci0"ocal o!ligation 3as c"eated in te
Co60"o6ise, fo" te o!ligation to 0ay on te
0a"t of  3as esta!lised seve"al yea"s ago
3en  <nised so6e of te stages of 
const"uction. 'nd tis a"gu6ent is al"eady
6oot and acade6ic, fo" te a6ount P1&
as al"eady !een collected t"oug
e>ecution and ga"nis6ent u0on te funds of 
Pasay City 3E te P=.

Page $ of $