REPUBLIC OF THE PHILIPPINES

SUPREME COURT
MANILA
RTC Manila B-107

SILVER FILMS, INC. Petitioner,

--versus-- CA-G.R. No. 54389
LORENZO GARCIA, Respondent. Appealed Civil Case No. 30012

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 final 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 film producer engaged
in the business of employing actors and actresses for the motion pictures they produce,
and holds office in Kamuning Rd., Quezon City, represented in this case by his counsel
of records, Atty. Andres Rizal, with office 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 Offices, c/o Atty. Katy Mayer, with office 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 filed 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 filed 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 affirmed 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 ratified when respondent Garcia expressed
his conformity through his 03 July 2004 Manifestation.

STATEMENT OF THE MATTERS INVOLVED

10. Actor Lorenzo Garcia and Brenda Simon – Garcia’s talent manager, sued Silver
Films, Inc. for rescission of the actor’s movie contract and for payment of damages.
Before filing 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 affirmed the trial court’s 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 Garcia’s Manifestation, that after the 2000 National Film Festival fiasco
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 filed 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 filed 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 Garcia’s 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 filed by Silver Films and Simon.
21. Silver Films, Inc. filed 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 filed 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. filed its appellant’s brief. In
response, Garcia filed his appellee’s brief.
23. On 05 June 2005 the Court of Appeals affirmed 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 filed 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 affirmed the ruling of the trial court which ruled that the agreement
entered into by Silver Films and Brenda Simon, and later on ratified 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 plaintiff Simon as agent of plaintiff Garcia and defendant Silver Films, Inc. and
their respective counsel. Though the terms thereof are disadvantageous to him, plaintiff
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.”

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 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
filed 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 Garcia’s offer 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.”

Consent is defined 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 stated the facts of the case that said the 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 an 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 first 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.
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 qualified acceptance constitutes a counter-offer.
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
offer ceased to exist, and the new qualified offer 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 an offer making the counter offer 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 upheld
contract.
Garcia’s 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 on his behalf.
However, by Garcia’s 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 ratification; however it should have been made before its revocation by
the other contracting party.6 Silver Films, Inc. revoked the addendum thereby
invalidating Garcia’s ratification, 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 to be
reversed and set aside and the case be DISMISSED. Petitioner prays for the 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