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    Chiquita Brands V RTC

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    Louis Tan
    This case involved a class suit filed by banana plantation workers against Chiquita Brands and other corporations for damages from exposure to a pesticide. The parties entered into a compromise agreement in US courts requiring the settlement amount to be deposited in an escrow account. The Philippine court approved the compromise. Later, the court issued a writ of execution ordering the petitioners to directly pay the claimants despite the compromise only requiring deposit into escrow. The Supreme Court ruled the writ was void as it modified the compromise agreement's terms. The petitioners were only obligated to deposit in escrow, not ensure direct payment. They did not prove full compliance without showing proof of deposit.

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    Chiquita Brands V RTC

    Uploaded by

    Louis Tan
    32 views2 pages
    This case involved a class suit filed by banana plantation workers against Chiquita Brands and other corporations for damages from exposure to a pesticide. The parties entered into a compromise agreement in US courts requiring the settlement amount to be deposited in an escrow account. The Philippine court approved the compromise. Later, the court issued a writ of execution ordering the petitioners to directly pay the claimants despite the compromise only requiring deposit into escrow. The Supreme Court ruled the writ was void as it modified the compromise agreement's terms. The petitioners were only obligated to deposit in escrow, not ensure direct payment. They did not prove full compliance without showing proof of deposit.

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    Chiquita Brands v RTC

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    This case involved a class suit filed by banana plantation workers against Chiquita Brands and other corporations for damages from exposure to a pesticide. The parties entered into a compromise agreement in US courts requiring the settlement amount to be deposited in an escrow account. The Philippine court approved the compromise. Later, the court issued a writ of execution ordering the petitioners to directly pay the claimants despite the compromise only requiring deposit into escrow. The Supreme Court ruled the writ was void as it modified the compromise agreement's terms. The petitioners were only obligated to deposit in escrow, not ensure direct payment. They did not prove full compliance without showing proof of deposit.

    Copyright:

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

    Chiquita Brands V RTC

    Uploaded by

    Louis Tan
    This case involved a class suit filed by banana plantation workers against Chiquita Brands and other corporations for damages from exposure to a pesticide. The parties entered into a compromise agreement in US courts requiring the settlement amount to be deposited in an escrow account. The Philippine court approved the compromise. Later, the court issued a writ of execution ordering the petitioners to directly pay the claimants despite the compromise only requiring deposit into escrow. The Supreme Court ruled the writ was void as it modified the compromise agreement's terms. The petitioners were only obligated to deposit in escrow, not ensure direct payment. They did not prove full compliance without showing proof of deposit.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Chiquita Brands v RTC

    [G.R. No. 189102; June 7, 2017] AUTHOR: Louis Tan


    TOPIC: Compromise
    PONENTE: Leonen, J.

    DOCTRINE: Courts can neither amend nor modify the terms and conditions of a compromise validly entered
    into by the parties. A writ of execution that varies the respective obligations of the parties under a judicially
    approved compromise agreement is void.

    FACTS:

     This case started from a class suit by banana plantation workers from over 14 countries for damages
    claiming that they suffered injuries to their reproductive systems due to prolonged exposure to DBCP, a
    pesticide used by plantations.
     The class suit was first filed in United States courts but was dismissed due to forum non conveniens.
     The Filipino claimants filed a complaint for damages against the same foreign corporations before the RTC.
     Before pre-trial, Chiquita Brands and the other foreign corporations entered into a worldwide settlement in
    the US with all the banana plantation workers.
     The Compromise Agreement provided, among others, that the settlement amount should be deposited in an
    escrow account, which should be administered by a mediator. After the claimants execute individual
    releases, the mediator shall give the checks representing the settlement amounts to the claimants’ counsel.
     Chiquita moved to dismiss the civil case alleging that the claimants executed quitclaims. The RTC approved
    the Compromise Agreement by way of judgment on compromise.
     Shortly thereafter, the several claimants moved for the execution of the judgment on compromise.
     Chiquita opposed the execution on the ground of mootness, arguing that they had already complied with
    their obligation under the Compromise Agreement by depositing the settlement amounts into an escrow
    account.
     The RTC directed the implementation of the Writ of Execution against Chiquita and Del Monte, on the basis
    mainly of lack of evidence supporting petitioners’ claim that they fully complied with their obligations. The
    RTC ordered the claimants to directly claim the settlement amount from Chiquita.
     Chiquita filed a Petition for Certiorari assailing the order of execution, arguing that the dismissal of the civil
    case was based on the trial court’s approval of the quitclaims executed by the claimants. Hence, “there was
    nothing left” for the trial execute.
    ISSUE/S & RATIO:
    1. WON the trial court erred in issuing the writ of execution despite the dismissal of the case based on a
    compromise agreement.
    Yes. A compromise is defined under the Civil Code as "a contract whereby the parties, by making reciprocal
    concessions, avoid a litigation or put an end to one already commenced." It may either be judicial or extrajudicial
    depending on its object or the purpose of the parties. A compromise is judicial if the parties' purpose is to terminate a
    suit already commenced. On the other hand, a compromise is extrajudicial if its object is to avoid litigation.
    In any case, a compromise validly entered into has the authority and effect of res judicata as between the parties. To
    this extent, a judicial compromise and an extrajudicial compromise are no different from each other. However, unlike
    an extrajudicial compromise, a compromise that has received judicial imprimatur "becomes more than a mere
    contract." A judicial compromise is regarded as a "determination of the controversy" between the parties and "has the
    force and effect of [a final] judgment."
    In other words, it is both a contract and "a judgment on the merits. It may neither be disturbed nor set aside except in
    cases where there is forgery or when either of the parties' consent has been vitiated. The doctrine on immutability of
    judgments applies to compromise agreements approved by the courts in the same manner that it applies to
    judgments that have been rendered on the basis of a full-blown trial. Thus, a judgment on compromise that has
    attained finality cannot be "modified in any respect, even if the modification is meant to correct erroneous
    conclusions of fact and law, and whether it be made by the court that rendered it or by the Highest Court of the
    land."
    A judgment on compromise may be executed just like any other final judgment217 in the manner provided in the
    Rules of Court. The writ of execution derives its validity from the judgment it seeks to enforce and must essentially
    conform to the judgment's terms. It can neither be wider in scope nor exceed the judgment that gives it life.
    Otherwise, it has no validity. Thus, in issuing writs of execution, courts must look at the terms of the judgment
    sought to be enforced.
    The Writ of Execution ordering the collection of the settlement amount directly from petitioners and its co-
    defendants is void. Under the judicially approved Compromise Agreement, petitioners are obliged to deposit the
    settlement amount in escrow within 10 business days after they receive a signed Compromise Agreement from the
    counsel of the claimants. There was nothing in the Compromise Agreement that required petitioners to ensure the
    distribution of the settlement amount to each claimant. Petitioners' obligation under the Compromise Agreement was
    limited to depositing the settlement amount in escrow. On the other hand, the actual distribution of the settlement
    amounts was delegated to the chosen mediator. To require proof that the settlement amounts have been withdrawn
    and delivered to each claimant would enlarge the obligation of petitioners under the Compromise Agreement.
    In this case, petitioners cannot rely on the quitclaims for the trial court to quash or recall the writ of execution. The
    quitclaims are insufficient to establish that petitioners complied with their obligation under the Compromise
    Agreement. They only prove that five (5) claimants received their respective share in the settlement amount but do
    not establish that petitioners deposited the entire settlement amount in escrow. At the very least, petitioners should
    have attached proof of actual deposit in their Opposition to the Motion for Execution.

    RULING: Petition Granted. The writ of execution was void for modifying the terms of the compromise agreement by ordering
    the claimants to directly collect from the petitioners notwithstanding the fact that their obligation under the compromise
    agreement was to deposit the settlement amount into an escrow amount. The petitioners must show proof that it has deposited
    such amount into an escrow account.

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