G.R. No.

183965 September 18, 2009

JOANIE SURPOSA UY, Petitioner,

vs.

JOSE NGO CHUA, Respondent.

CHICO-NAZARIO, J.:

FACTS:

On October 27, 2003, petitioner Joanie Surposa Uy filed a petition with the RTC for a decree of
illegitimate filiation against the respondent. She claimed that the respondent, who was married at the
time, had an affair with Irene Surposa, resulting in petitioner and her brother Allan. Respondent denied
the allegations and claimed no relationship with petitioner. During hearings, petitioner testified about
her relationship with respondent, how he supported her education, and presented evidence of her
claim. Later, on March 27, 2008, respondent filed a Demurrer to Evidence arguing that a previous
decision in Special Proceeding No. 8830-CEB barred the present case. It came to light that before the
current case, petitioner had filed a similar petition against respondent, leading to a Compromise
Agreement approved by the court in Special Proceeding No. 8830-CEB. In this agreement, petitioner and
her brother declared no blood relation to respondent, accepted monetary settlement, and waived all
claims against him and related entities. In response to the RTC's resolution on respondent's Demurrer to
Evidence, petitioner brought her case to the higher court, primarily raising legal questions.

ISSUE:

Whether or not the Compromise Agreement approved by RTC-Branch 9 in its Decision dated 21
February 2000 in Special Proceeding No. 8830-CEB serves as res judicata in Special Proceeding

RULING:

The court's decision is in the negative. A compromise is a contract wherein parties make concessions to
avoid litigation or settle an ongoing one. In the case of Estate of the late Jesus S. Yujuico v. Republic, the
court determined that a judicial compromise holds the effect of res judicata, and a judgment based on
such agreement is a judgment on the merits. However, it's crucial to note that like any contract, a
compromise agreement must meet the requirements of Article 1318 of the Civil Code: consent of
parties, a certain object, and a lawful cause. Additionally, the terms must not contradict law, morals,
public policy, or order. A compromise agreement conflicting with these aspects is null and void, holding
no legal effect. Article 2035 of the Civil Code specifies certain matters that cannot be compromised,
including civil status, validity of marriage, legal separation, future support, court jurisdiction, and future
legitime. The Compromise Agreement between petitioner and respondent, approved in 2000, aimed to
resolve the issue of petitioner's filiation. This agreement was deemed in violation of Article 2035 due to
its attempt to compromise the status and filiation of a child. The law and legal precedent assert that the
status and filiation of a child cannot be compromised, as it is a matter that the court must establish.
Thus, the agreement is void and holds no legal effect, even if parties have fulfilled their obligations as
per the agreement.
G.R. No. L-21549 October 22, 1924

TEODORO VEGA, plaintiff-appellee,

vs.

THE SAN CARLOS MILLING CO., LTD., defendant-appellant.

Fisher, Dewitt, Perkins, & Brady, John R. McFie, Jr., Jesus Trinidad, and Powell & Hill for appellant.

R. Nolan and Feria & La O for appellee.

ROMUALDEZ, J.:

FACTS:

The defendant-appellant argues that Sections 23 of the Mill's covenant and 14 of the Planter's covenant
are valid arbitration clauses and should have been pursued as a prerequisite before seeking legal action,
which the plaintiff prematurely initiated. These sections specify that any disputes should be submitted
to arbitrators, and their decisions should be respected. Additionally, Reciprocal Covenant No. 7
designates the courts of Iloilo City as having jurisdiction over judicial proceedings related to the
contractual relations between the parties. The plaintiff initiated legal action without adhering to the
arbitration clauses, leading to the lower court's ruling in favor of the plaintiff.

ISSUE:

Whether or not the lower court made a mistake by asserting its authority to hear and make a decision in
the case.

RULING:

The court determined that the dispute should be submitted to arbitration. The disagreement between
the parties was established, and the matters in dispute fell outside the exceptions that would be
resolved by the engineer according to the contract terms. The issues concerned the computation of the
contract price and liability for alleged delay and losses due to changes in plans and specifications. The
exceptions related to the interpretation of plans and specifications, sufficiency of materials, and
methods of performing the work as specified in the contract's General Conditions.
G.R. No. 96283 February 25, 1992

CHUNG FU INDUSTRIES (PHILIPPINES) INC., its Directors and Officers namely: HUANG KUO-CHANG,
HUANG AN-CHUNG, JAMES J.R. CHEN, TRISTAN A. CATINDIG, VICENTE B. AMADOR, ROCK A.C. HUANG,
JEM S.C. HUANG, MARIA TERESA SOLIVEN and VIRGILIO M. DEL ROSARIO, petitioners,

vs.

COURT OF APPEALS, HON. FRANCISCO X. VELEZ (Presiding Judge, Regional Trail Court of Makati [Branch
57]) and ROBLECOR PHILIPPINES, INC., respondents.

ROMERO, J.:

FACTS:

Chung Fu Industries (Philippines), the petitioner, and Roblecor Philippines, Inc., the private respondent,
entered into a construction agreement in which Roblecor agreed to construct petitioner's industrial
complex. In case of disputes arising from the contract, they agreed to submit the issues to a single
arbitrator. Roblecor filed a petition for Compulsory Arbitration with a request for a Temporary
Restraining Order (TRO) to claim unpaid amounts. Chung Fu sought dismissal of the petition and the
lifting of the TRO. Negotiations led to an arbitration agreement stating the arbitrator's decision would be
final and un-appealable. The RTC approved the agreement and appointed Engr. Willardo Asuncion as
arbitrator. Asuncion ordered Chung Fu to pay Roblecor and declared the award final. Roblecor moved
for award confirmation and execution. Chung Fu requested a rehearing and reconsideration, claiming
errors by Asuncion. The motions were denied, and Chung Fu appealed via certiorari to the Court of
Appeals (CA), which upheld the RTC's decision. A motion for reconsideration by Chung Fu was also
rejected.

ISSUE:

Whether or not Petitioners are barred from challenging the arbitration award due to the provisions in
the arbitration agreement stating that the arbitrator's decision is conclusive and cannot be appealed,
and that neither party can seek additional legal action if they disagree with the arbitrator's award.

RULING:

The notion was disagreed. According to Article 2044 of the Civil Code, the finality of arbitrators' awards
is not absolute and can be challenged under specific circumstances outlined in Articles 2038, 2039, and
2040. Sections 24 and 25 of the Arbitration Law also provide grounds for modifying or annulling an
arbitrator's award. Judicial review, through certiorari under Rule 65, is the appropriate remedy in such
cases, especially when there's a clear showing of grave abuse of discretion or jurisdictional excess by the
arbitrator. Voluntary arbitrators operate in a quasi-judicial role, subject to the power of judicial review.
In this case, petitioners raised multiple grounds for challenging the arbitral award, particularly errors in
granting compensation for disputed items. Upon careful examination, it's evident that the arbitrator
failed to apply the terms of the Construction Agreement, constituting grave abuse of discretion.
Moreover, granting unjustified extra compensation exceeded his authority, falling under grounds for
vacating the award. Thus, the petition is granted, the CA's resolutions and RTC orders are overturned,
and the case is sent back for further hearing. All related matters are reverted to their previous state until
the trial court addresses the case's merits.
G.R. No. 143581 January 7, 2008

KOREA TECHNOLOGIES CO., LTD., petitioner,

vs.

HON. ALBERTO A. LERMA, in his capacity as Presiding Judge of Branch 256 of Regional Trial Court of
Muntinlupa City, and PACIFIC GENERAL STEEL MANUFACTURING CORPORATION, respondents.

VELASCO, JR., J.:

FACTS:

Petitioner Korea Technologies Co., Ltd. (KOGIES), a Korean company specializing in Liquefied Petroleum
Gas (LPG) Cylinder manufacturing plants, entered into an agreement with domestic corporation Pacific
General Steel Manufacturing Corp. (PGSMC) on March 5, 1997, to establish an LPG Cylinder
Manufacturing Plant in Carmona, Cavite. An amendment to the contract was executed in Korea on April
7, 1997, altering payment terms. The contract outlined that KOGIES would supply machinery and
facilities for LPG cylinder production, with PGSMC paying USD 1,224,000. KOGIES was responsible for
installation, and PGSMC would pay USD 306,000 upon successful plant operation. Subsequently, a lease
contract was made with Worth Properties, Inc. for a facility, and the machinery was installed. PGSMC
encountered financial issues after initial installation, leading to an agreement that KOGIES had fulfilled
the contract terms. For the remaining USD 306,000, PGSMC issued two postdated checks that bounced
due to payment stoppage. KOGIES sent a demand letter threatening legal action for nonpayment, and
PGSMC complained about discrepancies in equipment delivery in a faxed letter.

ISSUE:

Whether or not the arbitration clause in the contract of the parties should govern.

RULING:

YES.The established principle holds that the law of the place where a contract is formed governs, known
as "lex loci contractus." In this case, the contract was finalized here in the Philippines, and consequently,
our local laws should apply. However, Article 2044 of the Civil Code upholds the validity of a mutually
agreed-upon arbitration clause and the conclusive impact of an arbitration award. This article states that
any stipulation that an arbitrator's decision is final remains valid, while Articles 2038, 2039, and 2040 are
not undermined. The arbitration clause was mutually and voluntarily accepted by the involved parties,
and there is no indication of it violating any law, moral standards, good customs, public order, or public
policy. The parties have evidently engaged on equal terms. Thus, there is no reason to disregard or defy
the arbitration clause. As observed in Gonzales v. Climax Mining Ltd. and Del Monte Corporation-USA v.
Court of Appeals, the commitment to arbitration is contractual, and such a clause is an integral part of
the contract itself. Given that the current arbitration clause is not contrary to public policy, the matter
shifts to the query of how an arbitration clause specifying that disputes arising from the contract would
be resolved by an arbitral panel in a foreign jurisdiction, under the arbitration rules of that foreign
nation, with the resulting award being binding and conclusive. Hence, it becomes evident that the
concept of a final and binding arbitral award parallels judgments or decisions rendered by certain quasi-
judicial entities like the National Labor Relations Commission and Mines Adjudication Board. These
bodies also issue final and binding judgments, though not instantly enforceable, as they are subject to
potential judicial review upon a party's request. Consequently, foreign final arbitral awards share a
similar status, necessitating confirmation by the RTC before enforcement can occur.
G.R. No. 156660 August 24, 2009

ORMOC SUGARCANE PLANTERS' ASSOCIATION, INC. (OSPA), OCCIDENTAL LEYTE FARMERS MULTI-
PURPOSE COOPERATIVE, INC. (OLFAMCA), UNIFARM MULTI-PURPOSE COOPERATIVE, INC. (UNIFARM)
and ORMOC NORTH DISTRICT IRRIGATION MULTI-PURPOSE COOPERATIVE, INC. (ONDIMCO), Petitioners,

vs.

THE COURT OF APPEALS (Special Former Sixth Division), HIDECO SUGAR MILLING CO., INC., and ORMOC
SUGAR MILLING CO., INC., Respondents.

LEONARDO-DE CASTRO, J.:

FACTS:

Petitioners are associations representing individual sugar planters (Planters). Respondents are sugar
centrals, specifically Hideco Sugar Milling Co., Inc. (Hideco) and Ormoc Sugar Milling Co., Inc. (OSCO).
Article VII of the milling contracts outlines the distribution of sugar and molasses from the Planters'
sugarcane. It states that 34% belongs to the centrals as compensation, 65% goes to the Planter, and the
remaining 1% supports the Planters' association. If a Planter isn't part of an association, the 1% reverts
to the centrals. Article XIV, paragraph B restricts centrals from entering agreements with Planters that
provide better benefits without association consent, except for Planters located over 30 kilometers from
the mill. Article XX establishes a Board of Arbitration to resolve disputes. Petitioners filed arbitration
petitions against Hideco and OSCO, alleging that the centrals violated the Milling Contract by giving the
1% share to independent Planters instead of reverting it to centrals. Respondents moved to dismiss due
to lack of cause of action. They argued that the Planters, not petitioners, were parties to the milling
contracts and thus had standing to demand arbitration. The RTC initially denied the motion to dismiss
and confirmed the existence of a milling contract. The CA later ruled that petitioners lacked the legal
capacity to demand arbitration or bring action against respondents. The primary issue in petitioners'
arbitration request was the perceived breach of the milling contract clause regarding sharing proceeds.
They sought an increase in the member Planters' share to 66% to align with non-member Planters.

ISSUE:

Whether or not petitioners have the legal capacity to initiate a lawsuit against respondents or request
arbitration from them directly, without the need to involve the individual Planters in their action.

RULING:

Under Section 2 of R.A. No. 876 (the Arbitration Law), there are two modes of arbitration specified:
firstly, the anticipation of a future dispute through an agreement within a civil contract, referred to as an
agreement to submit to arbitration; secondly, an existing disagreement that is presented to arbitrators,
termed the submission agreement. In the case at hand, Article XX of the milling contract falls within the
first mode, as it was established in anticipation of potential disputes arising after the contract's
execution. The petitioners, recognized associations formed under Philippine law, possess distinct legal
identities apart from their member Planters. It is undisputed that the milling contracts presented were
signed exclusively by individual Planters and respondent sugar centrals. In effect, the petitioners were
not signatories to the milling contracts. The critical point is that the petitioners lack legal standing to
initiate arbitration proceedings directly against the respondents, given their non-participant status in the
milling contracts. The arbitration clause within the milling contracts explicitly grants the right to demand
arbitration solely to the contract parties. Moreover, even if the petitioners were seen as representatives
of the member Planters and had signed the milling contracts on their behalf, they still wouldn't have the
authority to independently initiate arbitration. Under such a representative capacity, actions should
have been undertaken on behalf of the principals, the individual Planters, who ultimately retain the right
to demand arbitration. Therefore, even if the petitioners had properly brought forward the case in the
name of their Planters with existing milling contracts, they would still be obliged to demonstrate that
they were granted authorization by these Planters to pursue legal actions on their behalf. In the event
that the milling contract is regarded as a contract pour autrui, as suggested by the petitioners, certain
prerequisites must be met, including clear intent to confer benefits upon a third party and
communication of acceptance by that third party to the obligor. These conditions are not present in the
case, and the provision in question primarily serves the benefit of the individual Planters, rather than
the petitioners. Hence, Article VI of the Milling Contract does not fulfill the criteria for stipulation pour
autrui, as it is devised to ensure just compensation to the Planters, and any purported benefit to the
associations is secondary. Furthermore, the 1% share designated for associations would not favor the
associations themselves, but rather the member Planters. It is evident that this share would revert back
to the respondent sugar centrals if the contracting Planter is not associated with any recognized group.
November 23, 2016

G.R. No. 204197

FRUEHAUF ELECTRONICS PHILIPPINES CORPORATION, Petitioner,

vs.

TECHNOLOGY ELECTRONICS ASSEMBLY AND MANAGEMENT PACIFIC CORPORATION, Respondent.

BRION, J.:

FACTS: