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EUHILDA C. TABUADA v. J. CEDRICK O. RUIZ

FACTS:

The case involves a petition for review on certiorari of the March 2, 2005 Order and the May 20, 2005 Resolution of the Regional Trial Court (RTC) of Iloilo City, Branch 39 in Special Proceedings (Sp. Proc.) No. 5198. The issue raised in the case is the termination of the proceedings by the trial court due to the failure of the parties to submit an amicable settlement and comply with a court order. The trial court issued an order on December 6, 2004, stating that the court will no longer set the pending incidents for hearing as the parties and their counsel assured the court that they would submit a "Motion for Judgment Based On An Amicable Settlement" by December 25, 2004. However, the trial court terminated the proceedings on March 2, 2005, based on the parties' failure to comply with the court order. The petitioner, the administratrix of the estate, and the private respondents filed motions for reconsideration, arguing that the termination was premature and that they had prepared all the necessary papers for the amicable settlement. Despite the pleas for reconsideration, the trial court affirmed its order of termination. The petitioner then filed a petition for review on certiorari before the Supreme Court, which granted the petition, reversing and setting aside the trial court's order and remanding the case for further proceedings.

ISSUES:

  1. Whether the trial court erred in terminating the proceedings for the settlement of the intestate estate based on the parties' failure to submit the amicable settlement and comply with the court's order.

  2. Whether the trial court's order requiring submission of an amicable settlement is valid.

RULING:

  1. The trial court erred in terminating the proceedings for the settlement of the intestate estate based on the parties' failure to submit the amicable settlement and comply with the court's order. While a compromise agreement or an amicable settlement is encouraged, the failure to consummate one does not warrant procedural sanctions or provide authority for the court to dismiss the case. The dismissal of a special proceedings case should only be ordered in extreme cases where termination is the sole remedy consistent with equity and justice, not as a penalty for neglect of the parties.

  2. The trial court's order requiring submission of an amicable settlement is invalid. The order did not explicitly require the submission of an amicable settlement or the motion for judgment based on an amicable settlement. Furthermore, even if it did require compliance, the parties cannot be forced to comply as they are only strongly encouraged, but not obliged, to consummate a compromise. An order requiring submission of an amicable settlement is not supported by jurisprudence and reflects an erroneous interpretation and application of the law and rules.

PRINCIPLES:

  • A compromise agreement or an amicable settlement is encouraged, but the failure to consummate one does not warrant procedural sanctions or provide authority for the court to dismiss the case.

  • Special proceedings cases, which are non-contentious in nature, should only be dismissed in extreme cases where termination is the sole remedy consistent with equity and justice, not as a penalty for neglect of the parties.

  • An order requiring submission of an amicable settlement is not valid and goes against jurisprudence. Parties cannot be forced to comply as they are only strongly encouraged, but not obliged, to consummate a compromise.