DORMITORIO V FERNANDEZ

Facts: The Municipality of Victorias is the owner of several parcels of lands in Victorias,
Negros Occidental. In 1948, it sold lot No.1 Block 16 with an area of 230 sq.m. at 1 peso per
sq. meter to Serafin Lazalita. Payment for said lot was completed in 1958. Lazalita had been
in full and peaceful possession of the said land for eight continuous years and he introduced
permanent and invaluable improvements thereon such as fruit trees, a house of strong
materials, etc.

1955 - Agustin and Leoncia Dormitorio also purchased a land from the Municipality of
Victorias. They bought Lot No. 2, Block 16 having an area of 343 sq. meters at 1 peso per
sq.meter. They, however, have not taken actual possession of the land.

1958 - Dormitorios filed a suit for ejectment against Lazalita. The Municipal Mayor and
Council tried to settle the matter between the parties. A private surveyor was hired and it was
found out that the lot sold by the Municipality to Lazalita was converted to the Municipal
Road known as Jover Street and the lot presently occupied by him is supposed to be Lot. No.
2 bought by the Dormitorios.

1961- CFI rendered judgment in favor of the Dormitorios, ordering Lazalita to vacate the
land and to pay a monthly rental to the former at a rate of 20 pesos a month. Lazalita, with the
Dormitorios, then filed a case against the Municipality of Victorias because the value of the
improvement he made on the land have far exceeded the purchase price. The Municipality of
Victorias, is willing to amicably settle the case, by giving the plaintiff another lot, if they
could open their newly proposed subdivision, or pay back Lazalita the amount necessary and
just for him to acquire another lot for his residence and for the expenses of transferring his
present residential house thereto.

1965- The parties agreed and submitted an "Agreed Stipulation of Facts" before the court.
Accordingly, judgment was rendered based on the same. Thereafter, the Dormitorios filed a
writ of execution for the enforcement of the earlier judgment by the Court ordering Lazalita
to pay 20 pesos monthly rental and to vacate said property. The petition was granted.
However, Judge Fernandez set aside said writ of execution on the ground that it was obtained
by means of fraud, misrepresentation and concealment of the true facts of the case by making
it appear that the case was still enforceable (even if it had already been novated by a
subsequent agreement by the parties).It was found out that the said order was granted based
on a decision of the Court on Sept. 5, 1961 (prior to the Agreed Stipulation of Facts
submitted by both parties on Feb. 12, 1965)

Issue: WON the judgment of the court had been novated and thus can no longer be enforced

Held: Yes. The agreement filed by the parties created between them new rights and obligation
which naturally superseded the prior judgment. It is proper to show that there is animus
novandi between the parties for novation to properly take effect. In the case at bar, the
presence of animus novandi is undeniable.
Secondly, the decision resulting from a compromise had the effect of res judicata. The parties
therefore are bound by it. The judge therefore committed no error in setting aside the order of
execution as the same had only set maters right. It only concludes that a final executory
judgment of a trial court may be novated by subsequent agreement of the parties.