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    Adriatico Consortium Vs LBP GR No. 187838

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    albycadavis
    1) The parties in this case entered into a Partial Compromise Agreement to settle a litigation between Adriatico Consortium (ACI) and Land Bank regarding a loan. 2) The agreement stated that the parties would suspend all actions against each other. However, Land Bank later sold the loan receivables, which ACI argued violated the agreement. 3) The Supreme Court ruled in favor of ACI, finding that by selling the receivables, Land Bank did not cooperate as required by the agreement, and that "actions" in the agreement referred to any conduct, not just legal actions, so the sale violated the agreement.

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    Adriatico Consortium Vs LBP GR No. 187838

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    albycadavis
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    1) The parties in this case entered into a Partial Compromise Agreement to settle a litigation between Adriatico Consortium (ACI) and Land Bank regarding a loan. 2) The agreement stated that the parties would suspend all actions against each other. However, Land Bank later sold the loan receivables, which ACI argued violated the agreement. 3) The Supreme Court ruled in favor of ACI, finding that by selling the receivables, Land Bank did not cooperate as required by the agreement, and that "actions" in the agreement referred to any conduct, not just legal actions, so the sale violated the agreement.

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    75. Adriatico Consortium vs LBP GR No. 187838

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    1) The parties in this case entered into a Partial Compromise Agreement to settle a litigation between Adriatico Consortium (ACI) and Land Bank regarding a loan. 2) The agreement stated that the parties would suspend all actions against each other. However, Land Bank later sold the loan receivables, which ACI argued violated the agreement. 3) The Supreme Court ruled in favor of ACI, finding that by selling the receivables, Land Bank did not cooperate as required by the agreement, and that "actions" in the agreement referred to any conduct, not just legal actions, so the sale violated the agreement.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    50 views2 pages

    Adriatico Consortium Vs LBP GR No. 187838

    Uploaded by

    albycadavis
    1) The parties in this case entered into a Partial Compromise Agreement to settle a litigation between Adriatico Consortium (ACI) and Land Bank regarding a loan. 2) The agreement stated that the parties would suspend all actions against each other. However, Land Bank later sold the loan receivables, which ACI argued violated the agreement. 3) The Supreme Court ruled in favor of ACI, finding that by selling the receivables, Land Bank did not cooperate as required by the agreement, and that "actions" in the agreement referred to any conduct, not just legal actions, so the sale violated the agreement.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    75) Adriatico Consortium vs LBP GR No.

    187838
    Doctrine: A compromise is a contract whereby the parties, by making
    reciprocal concessions, avoid a litigation or put an end to one already
    commenced.
    A contract must be interpreted from the language of the contract itself
    according to its plain and ordinary meaning.
    Case Title: Adriatico Consortium vs LBP GR No. 187838
    Facts: Respondent Land Bank approved the application of William Siy, the
    former president of ACI, for a credit line of P200M. A Mortgage Trust
    Indenture (MTI) was created to secure the loan. The MTI was amended to
    include J.V. Williams Realty and Development Corporation (JVWRDC), a
    majority-owned corporation of Siy, as borrower. It was later discovered that
    Siy did not remit ACI’s payments of the loan. Land Bank obliged petitioners
    ACI and PRC, with Benito Cu-Uy-Gam, ACI’s new president, to pay the
    maturing obligations of JVWRDC. Petitioners then filed a Petition for
    Declaration of Nullity, Specific Performance, Injunction, and Damages with
    Prayer for a TRO against Land Bank and Siy with the RTC of Manila.
    The parties entered into a Partial Compromise Agreement wherein ACI
    agreed, among others, to pay and actually paid to Land Bank the amount of
    loan plus interests. The said Agreement was approved by the RTC. Land
    Bank, however, informed ACI that the JVWRDC loans were included in a
    sealed-bid public auction of Land Bank Non-Performing Assets under the
    Special Purpose Vehicle Act. Petitioners filed a Motion for Execution before
    the RTC stating that Land Bank violated Section 5 of the Partial
    Compromise Agreement, which provides that the parties agree “to suspend
    all actions against each other x x x”. The RTC granted petitioners’ Motions
    and issued the corresponding Writ of Execution and Writ of Preliminary
    Injunction. Land Bank filed a Petition for Certiorari and Prohibition with
    Prayer for TRO and/or Preliminary Injunction before the CA arguing that the
    sale of the MPCs is not prohibited by the Agreement. The CA granted the
    petition and found that the compromise agreement sought to prohibit only
    legal actions.
    Issue: Whether or not the act of Land Bank in selling the receivables
    violated the Partial Compromise Agreement, specifically Section 5.
    Held: Yes. A compromise is a contract whereby the parties, by making
    reciprocal concessions, avoid a litigation or put an end to one already
    commenced. In the construction or interpretation of a compromise
    agreement, the Court is guided by the fundamental and cardinal rule that
    the intention of the parties is to be ascertained from the contract and effect
    should be given to that intention. Likewise, it must be construed so as to
    give effect to all the provisions of the contract. Evidently, had the parties
    intended to limit the application of Sec. 5 to legal actions only, they would
    have written a specific word or phrase to pertain to legal actions and not
    just the word “actions” alone.
    A contract must be interpreted from the language of the contract itself
    according to its plain and ordinary meaning. In the case at bar, the word
    “action” should be defined according to its plain and ordinary meaning, i.e.,
    as the process of doing something; conduct or behavior; a thing done. It is
    not limited to actions before a court or a judicial proceeding. Therefore, the
    only logical conclusion that can be derived from the use of the word “action”
    in Sec. 5 is that the parties intentionally used it in its plain and ordinary
    sense and did not limit it to mean any specific legal term.
    Furthermore, Sec. 5 of the Partial Compromise Agreement speaks of
    cooperation between the parties to determine the person or persons
    ultimately liable. By selling the receivables, Land Bank did not cooperate
    with petitioners. Thus, it can be safely concluded that the act of Land Bank
    is a clear and patent violation of Sec. 5 of the Partial Compromise
    Agreement.
    WHEREFORE, the appeal is GRANTED. The Decision and Resolution of
    the Court of Appeals in CA-G.R. SP No. 103717 dated October 16, 2008
    and May 13, 2009, respectively are NULLIFIED and SET ASIDE. The
    Orders of the RTC dated February 29, 2008, March 17, 2008 and April 21,
    2008, together with the March 5, 2008 Writ of Execution are REINSTATED.
    No costs.
    SO ORDERED.

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