GOMEZ-ESTOESTA // APPRAC-A
BAÑADERA • CADIENTE •CARIAGA • CHENG • DE LUIS • DUEÑAS • ESCASURA • GARCIA • ORQUINAZA • RUBIO • SANTOS • YU
What May Not Be Appealed
PASCO v. HEIRS OF DE GUZMAN (Cheng)
[GR. No. 165554; July 26, 2010]
Remedies when a motion to set aside judgment is denied. Remedy can
be either Rule 38 or Rule 65.
Recit-Ready:
Facts: The Heirs of De Guzman had filed a complaint for sum of money
against Pasco. Subsequently both parties allegedly agreed to enter
into a compromise agreement. However, after approving the
compromise agreement, Pasco files a motion to set aside the
compromise agreement (judgment) as he allegedly did not
understand the compromise agreement. The respondent judge
gave an order denying the motion to set aside judgment on
compromise. Thus, Pasco elevated the case to the MTC by way of
petition for certiorari under Rule 65 to the MTC. The RTC ruled that
the MTC’s decision does not fall under grave abuse of discretion
amounting to lack or excess of jurisdiction. Thus, such decision
was elevated to the CA. The CA argues that the petition under Rule
65 to the RTC. It should have been a petition for relief from
judgment under Rule 38.
Issue/s: Whether Pasco resorting to Rule 65 in questioning the motion to
set aside is the proper remedy instead of Rule 38. -- Yes
Held: SC stated that pursuant to Rule 41, the MTC’s denial of Pasco’
Motion to Set Aside Decision could not have been appealed. The
Court stated that there is more than remedy to question the order
denying the motion to set aside the compromise agreement. Thus,
Pasco has every right to file a petition under Rule 65 and not Rule
38.
Facts:
 This case originated when the heirs of de Guzman, represented by
Cresencia de Guzman-Principe filed a complaint for a sum of money and
damages against Lauro Pasco. The case was filed in MTC of Bulacan.
 Subsequently a compromise agreement was entered into by both parties
which was submitted to the MTC.
 Despite the MTC approving the compromise agreement, the petitioners
filed a verified motion to set aside the decision on the ground that “the
Agreement was written in a language not understood by them, and the
terms and conditions thereof were not fully explained to them.”
 The MTC denied such motion, prompting the petitioner to file a Petition for
Certiorari and Prohibition with Application for Temporary Restraining
Order/Preliminary Injunction before the RTC.
 The RTC ruled that “the MTC’s approval of the Compromise Agreement
was not done in a capricious, whimsical, or arbitrary manner; thus,
petitioners’ resort to certiorari under Rule 65 was improper.”
 The CA ruled the Pasco had improperly sought recourse before the RTC
through a Petition for Certiorari under Rule 65, when the proper remedy
was a Petition for Relief from Judgment under Rule 38.
Issue/s: Whether Pasco resorting to Rule 65 in questioning the motion to set
aside is the proper remedy instead of Rule 38. -- Yes
Held/Ratio:
 The SC that based on the language of Rule 41, therefore, the MTC’s
denial of petitioners’ Motion to Set Aside Decision could not have been
appealed.
o Indeed, a decision based on a compromise agreement is
immediately final and executory.
o It cannot be the subject of appeal, for when parties enter into a
compromise agreement and request a court to render a decision
on the basis of their agreement.
o It is presumed that such action constitutes a waiver of the right to
appeal said decision.
 While there may have been other remedies available to assail the
decision, Pasco were well within their rights to institute a special civil
action under Rule 65.
o *Note* the Court is saying that both Rule 38 and Rule 65 can be
both done. The petitioner has every right to file a petition under
Rule 65.