G.R. No.

189102, June 7, 2017

CHIQUITA BRANDS, INC. AND CHIQUITA BRANDS INTERNATIONAL,
INC., Petitioners, v. HON. GEORGE E. OMELIO, REGIONAL TRIAL COURT, DAVAO
CITY, BRANCH 14, SHERIFF ROBERTO C. ESGUERRA, CECILIO G. ABENION.

FACTS:
On August 31, 1993, thousands of banana plantation workers from over 14 countries instituted
class suits for damages in the United States against 11 foreign corporations which includes the
petitioner. The banana plantation workers claimed to have been exposed to dibromo
chloropropane (DBCP), a pesticide used against roundworms and threadworms that thrive on and
damage tropical fruits such as bananas and pineapples as a result, these workers suffered serious
and permanent injuries to their reproductive systems. Unfortunately, the United States courts
dismissed the actions on the ground of forum non convenience and directed the claimants to file
actions in their respective home countries.
Filipino claimants filed a complaint for damages against the same foreign corporations before the
Regional Trial Court in Davao City. Before pre-trial these foreign companies entered into a
worldwide settlement in the United States with all the banana plantation workers. The parties
executed a document denominated as the "Compromise Settlement, Indemnity, and Hold
Harmless Agreement" (Compromise Agreement). The Compromise Agreement provided, among
others, that the settlement amount should be deposited in an escrow account, which should be
administered by a mediator. After the claimants execute individual releases, the mediator shall
give the checks representing the settlement amounts to the claimants' counsel, who shall then
distribute the checks to each claimant.

The RTC of Panabo approved the compromised agreement and dismissed the petition of the
claimant. Several claimants moved for the execution of the judgment on compromise but
Chiquita, Dow, Occidental, Shell, and Del Monte opposed the execution on the ground of
mootness. They argued that they had already complied with their obligation under the
Compromise Agreement by depositing the settlement amounts into an escrow account, which
was administered by the designated mediator. Hence, there was nothing left for the court to
execute.Chiquita pointed out that the claimants' execution of individual quitclaims was an
acknowledgement that they had received their respective share in the settlement amount.
After dismissal of the civil claim the claimants moved for the execution of the compromise
agreement. The petitioner opposed the execution on the ground of mootness; they argued that
they had already complied with their obligation by depositing the settlement amount into an
escrow account. However, RTC of Panabo granted the motion for execution because there was
no proof that they have fulfilled their obligation.

On May 2003 petitioner filed a motion to suspend the execution and be allowed to present
evidence on their behalf. During the hearing of the case, the claimants picketed outside the court
room and accused the RTC judge of Panabo as a corrupt official who delayed the execution.
Petitioner requested for change of venue and was granted.

The case was transferred and now under the jurisdiction of the RTC of Davao city. On July 2009,
the RTC of Davao city through Judge Omelio ordered the execution of the compromised
agreement. Aggrieved by the RTC’s decision, the petitioner filed for a petition for certiorari even
without a prior appeal to the CA.

Petitioner allege that the respondent Judge committed grave abuse of discretion in issuing the
writ of execution and ordering them to directly pay each of the claimant contrary to the
compromise agreement between petitioner and claimant.

LEGAL ISSUE/S:

1. Whether or not the hierarchy of courts was violated when the petitioner filed for certiorari to
the Supreme Court without appealing first to the CA?

2. Whether or not Judge Omelio committed grave abuse of discretion?

RULING:
 
1. No. Under the principle of hierarchy or courts, direct recourse to the Supreme Court is
improper because Supreme Court is a court of last resort and must remain to be so in order for it
to satisfactorily perform its constitutional functions. Nonetheless, the invocation of the Supreme
Court’s original jurisdiction to issue writs of certiorari has been allowed in certain instances on
the ground of special and important reasons clearly stated in the petition, such as, 1. When
dictated by public welfare and advancement of public policy, 2. When demanded by broader
interest of justice, 3. Where the challenged orders were patent nullities or 4. When analogous
exceptional and compelling circumstances called for and justified the immediate and direct
handling of the case.
The Supreme Court took cognizance of this case in the interest of judicial economy and
efficiency. The records of this case are enough for this Court to decide on the issues raised by the
parties. Any further delay would unduly prejudice the parties.

2. Yes. Courts can neither amend nor modify the terms and conditions of a compromise validly
entered into by the parties. In any case, a compromise validly entered has the authority and effect
of res judicata as between the parties. A writ of execution that varies the respective obligation of
the parties under a judicially approved compromise settlement is void. Under the judicially
approved Compromise Agreement, petitioners are obliged to deposit the settlement amount in
escrow within 10 business days after they receive a signed Compromise Agreement from the
counsel of the claimants. There was nothing in the Compromise Agreement that required
petitioners to ensure the distribution of the settlement amount to each claimant. Petitioners'
obligation under the Compromise Agreement was limited to depositing the settlement amount in
escrow. On the other hand, the actual distribution of the settlement amounts was delegated to the
chosen mediator, Mr. Mills.
Consequently, the Omnibus Order dated December 14, 2006, which directed the implementation
of the Writ of Execution, is likewise void. Ordinarily, courts have the ministerial duty to grant
the execution of a final judgment.230 The prevailing party may immediately move for execution
of the judgment, and the issuance of the writ follows as a matter of course.
A writ of execution may be stayed or quashed when "facts and circumstances transpire" after
judgment has been rendered that would make "execution impossible or unjust." the Compromise
Agreement did not impose solidary liability on the parties' subsidiaries, affiliates, controlled, and
related entities, successors, and assigns but merely allowed them to benefit from its effects. Thus,
respondent Judge Omelio gravely abused his discretion in holding that the petitioners'
subsidiaries and affiliates were solidarily liable under the Compromise Agreement. Furthermore,
there is no reason for respondent court to pierce the veil of corporate fiction. There is hardly any
evidence to shew that petitioners abused their separate juridical identity to evade their obligation
under the Compromise Agreement.
Hence Judge Omelio committed grave abuse of discretion

The Petition for Certiorari was granted. The assailed orders and writs were annulled and set aside
for having been issued with grave abuse of discretion.