G.R. Nos. L-47381

Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION
G.R. Nos. L-47381 & L-47420(Consolidated). January 31, 1985

REPUBLIC OF THE PHILIPPINES, duly represented by the Honorable Secretary of Education and Culture, petitioner,
vs.
COURT OF APPEALS; the PRESIDING JUDGE, Court of First Instance of Manila, Branch VI; DOMINADOR Q. CACPAL, Acting Executive Sheriff, Sheriff's Office, Manila; SOLEDAD QUINTOS; and SUNRIPE COCONUT PRODUCTS, INC., respondents.

AQUINO, J.:

The Republic of the Philippines appealed in 1978 from the 1976 and 1977 decisions of the Court of Appeals regarding the auction sale of the SS Da Gama over which Soledad Quintos and Sunripe Coconut Products, Inc. had claims. The case was docketed as L-47381.

Crest Shipping Co., Inc., a New York corporation, filed on January 5, 1978 with this Court a petition for certiorari, mandamus and prohibition for the nullification of the auction sale. This was docketed as L-47420. The two cases were consolidated. Crest Shipping was ultimately excluded from these proceedings.

On January 16, 1985, the parties filed the following compromise agreement dated August 6, 1984 which is quoted in full below:

COMPROMISE AGREEMENT

COME NOW the petitioner, the Republic of the Philippines, represented by the Minister of Education and Culture, and the private respondent, Sunripe Coconut Products, Inc. (hereinafter referred to as Sunripe, for brevity), represented by Mr. Francisco Chua, President and General Manager, assisted by their respective counsel to this Honorable Court respectfully manifest:

WHEREAS, this case has been under litigation since July 1972 starting from the Court of First Instance of Manila, appealed to the Court of Appeals, and now with this Honorable Court where petitioner has questioned the validity and regularity of the public auction sale of the subject vessel the SS "DA GAMA", conducted by respondent Sheriff on July 12, 1972 upon order of the respondent Court of First Instance, and where both the latter court and respondent Court of Appeals have ruled said sale to be valid;

WHEREAS, the petitioner assailed the sale at public auction referred to before the Court of First Instance, the Court of Appeals, and now with this Honorable Court, because said sale yielded merely an awarded bid of P505,100.00 which petitioner considered to be grossly out of proportion to the actual worth of subject vessel at the time, estimated at the minimum of $210,000.00, or roughly P1,400,000.00 (Petition, pp. 14-27);

WHEREAS, because respondent Sunripe has since the beginning substituted the winning bidder, respondent Soledad Quintos, who sold and assigned her rights over the subject vessel to the former, it has defended the validity and regularity of said sale all these years, retaining counsel and attending as well to security, maintenance, and dewatering of the vessel prior to its turnover to, and scrapping by, the Iligan Integrated Steel Mills, Inc. (IISMI) pursuant to Letter of Instruction No. 131 dated September 19, 1973 (Petition, pp. 8-9); Sunripe's expenditures amounted to no less than P931,908.23 as of 1977;

WHEREAS, the IISMI has in fact accomplished such scrappling, the proceeds of which, together with the sale of non-ferrous metals as well as equipment recovered from the vessel, have been deposited in an interest bearing account with the Philippine National Bank (PNB) starting from March, 1974, and which combined amounts including interests earned total P4,712,389.26 as of February 29, 1984 (see xerox copy of PNB certification attached as Annex "A" hereof):

ANNEX A

PHILIPPINE NATIONAL BANK
Official Depository of the Republic of the Philippines
Cashier's Department

March 20, 1984

Mr. Rogelio G. Chan
Chief Accountant
Iligan Integrated Steel Mills, Inc.
NDC Compound
377 Buendia Ave. Ext.,
Makati, Metro Manila
Dear Mr. Chan,

As requested in your letter dated March 6, 1984 hereunder is the up-dated statement of balances of various certificates of time deposits of Iligan Integrated Steel Mills, Inc. as February 29, 1984 viz:

FACE

INTEREST EARNED

MATURITY

CTD #

VALUE

(Net of Tax)

VALUE

588594

P3,645,115.15

P572,920.98

P4,218,036.13

588595

270,897.02

42,578.24

313,475.26

588596

156,310.05

24,568.04

180,878.09

Very truly yours,

(SGD.) Illegible
GLORIA F. MENDOZA
Senior Asst. Manager

WHEREAS, while petitioner and respondent Sunripe would separately insist on their respective and contrary positions regarding the sale at public auction of July 12, 1972, both parties, however, agree that their respective interests may be better served if, instead of further pursuing what has already been a long and protracted litigation, a settlement which would reasonably be advantageous to both parties be arrived at;

NOW, THEREFORE, in consideration of the foregoing and of the stipulations hereunder, the parties hereby agree as follows:

1. That the totality of said PNB deposits can cover respondent Sunripe's aforementioned expenditures in the amount of P931,908.23 with a reasonable return on its investment, as assignee of the winning bidder, as well as compensate and indemnify the petitioner, to a certain degree, for damages and prejudice suffered by it in the loss of some 3,464.924 metric tons of wheat, part of the 8,300 long tons of wheat cargo then carried on board subject vessel;

2. That respondent Sunripe shall be entitled to collect its expenditures in said amount of P931,908.32 from the P4,712,389.26 deposited with the PNB;

3. That the balance of P3,780,481.10 shall be divided between the petitioner and respondent Sunripe, the former being entitled to P1,890,240.50, the latter to P1,890,240.50;

4. That interests earned or to be earned after February 29, 1984 by the said PNB deposits, prior to withdrawal, shall pertain equally to the petitioner and respondent Sunripe;

5. That once this compromise agreement is approved, the parties shall lend assistance to each other in the release of the fun amount deposited by IISMI with the PNB; provided, however, that the petitioner and respondent Sunripe, respectively, shall only withdraw, or be allowed to withdraw, such amounts as they may be entitled to pursuant to the foregoing stipulations.

WHEREFORE, it is respectfully prayed that the foregoing compromise agreement be approved, to constitute the judgment in this case, without pronouncement as to costs.

Makati, Metro Manila for the City of Manila, August 6, 1984.

SUNRISE COCONUT PRODUCTS, INC., THE REPUBLIC OF THE PHILIPPINES,

represented by: represented by:

(Sgd.) Illegible (Sgd.) Illegible

FRANCISCO CHUA JAIME C. LAYA

President & General Manager Minister of Education and Culture

ASSISTED By:

(Sgd.) Illegible (Sgd.) Estelito P. Mendoza

PEDRO S. RAVELO ESTELITO P. MENDOZA

Solicitor General

Copy furnished:

(Sgd.) Illegible

RAMON A. BARCELONA Atty. Isaac Arribas

Counsel for Petitioner-Intervenor Assistant Solicitor General

(G.R. L-47420) EULOGIA M. CUEVA
(Sgd.) Eulogia M. Cueva Metro Manila

1016 Dos Castillas, Sampaloc

Solicitor
EMCveraru

Said compromise agreement is approved. Judgment is rendered in accordance therewith. No costs.

SO ORDERED.

Makasiar (Chairman), Concepcion, Jr., Abad Santos, Escolin and Cuevas, JJ., concur.

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