THIRD DIVISION

[G.R. No. 119310. February 3, 1997.]

JULIETA V. ESGUERRA, petitioner, vs. COURT OF APPEALS and

SURESTE PROPERTIES, INC., respondents.

SYLLABUS

1. CIVIL LAW; UNENFORCEABLE CONTRACT; DEFINED. — The Civil

Code provides that a contract is unenforceable when it is ". . . entered into in
the name of another person by one who has been given no authority or legal
representation, or who has acted beyond his powers." (Article 1403,
paragraph 1, Civil Code.) And that "(a) contract entered into in the name of
another by one who has no authority or legal representation, or who has
acted beyond his powers, shall be unenforceable." (Article 1317, paragraph
2, Civil Code.)
2. REMEDIAL LAW; CIVIL PROCEDURE; COMPROMISE AGREEMENT;
EFFECT THEREOF; CASE AT BAR. — As far as private respondent Sureste
Properties, Inc. is concerned, the sale to it by VECCI was completely valid
and legal because it was executed in accordance with the compromise
agreement authorized not only by the parties thereto, who became co-
principals in a contract of agency created thereby, but by the approving
court, as well. Consequently, the sale of Sureste Properties, Inc. of Esguerra
Building II cannot in any manner or guise be deemed unenforceable, as
contended by petitioner. The mere fact that petitioner Julieta Esguerra was
consulted by VECCI in a sale of Esguerra Building I did not affect nor vary the
terms of the authority to sell granted the former as expressly spelled out in
the judicially-approved compromise agreement because "a compromise once
approved by final orders of the court has the force of res judicata between
the parties and should not be disturbed except for vices of consent or
forgery." ( Republic vs. Sandiganbayan, 226 SCRA 314, 328, September 10,
1993). Hence, "a decision on a compromise agreement is final and
executory, . . . ." ( Casal vs. Concepcion, Jr., 243 SCRA 369, 372, April 6,
1995) "It is a long established doctrine that the law does not relieve a party
from the effects of an unwise, foolish, or disastrous contract, entered into
with all the required formalities and will full awareness of what he was doing.
Courts have no power to relieve parties from obligations voluntarily
assumed, simply because their contracts turned out to be disastrous deals or
unwise investments." It is a truism that "a compromise agreement entered
into by party-litigants, when not contrary to law, public order, public policy,
morals, or good custom is a valid contract which is the law, between the
parties themselves. It follows, therefore, that a compromise agreement, not
tainted with infirmity, irregularity, fraud, or illegality is the law between the
parties who are duty bound to abide by it and observe strictly its terms and
conditions" as in this case.

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 3. CIVIL LAW; PROPERTY; RIGHT OF FIRST REFUSAL; WHEN DEEMED
WAIVED. — The right of first refusal like other rights, may be waived as
petitioner did waive it upon entering into the compromise agreement.
Corollarily, the execution of the spouses' judicial compromise agreement
necessitated the sale of the spouses' co-owned properties and its proceeds
distributed fifty percent to each of them which, therefore, resulted in its
partition. (Article 496 of the Civil Code provides that: "Partition may be made
by agreement between the parties or by judicial proceedings. . . ." Article
498 of the Civil Code reads: "Whenever the thing is essentially indivisible
and the co-owners cannot agree that it be allotted to one of them who shall
indemnify the others, it shall be sold and its proceeds distributed.") If
petitioner wanted to keep such right of first refusal, she should have
expressly reserved it in the compromise agreement. For her failure to do so,
she must live with its consequences.
4. COMMERCIAL LAW; CORPORAT ION CODE; SALE OR OTHER
DISPOSITION OF ASSETS (Sec. 40); REQUIREMENTS; COMPLIED WITH IN CASE
AT BAR. — VECCI's sale of all the properties mentioned in the judicially-
approved compromise agreement was done on the basis of its Corporate
Secretary's Certification of these two resolutions. The partial decision did not
require any further board or stockholder resolutions to make VECCI's sale of
these properties valid. Being regular on its face, the Secretary's Certification
was sufficient for private respondent Sureste Properties, Inc., to rely on. It
did not have to investigate the truth of the facts contained in such
certification. Otherwise, business transactions of corporations would become
tortuously slow and unnecessarily hampered. Ineluctably, VECCI's sale of
Esguerra Building II to private respondent was not ultra vires but a valid
execution of the trial court's partial decision. Based on the foregoing, the
sale is also deemed to have satisfied the requirements of Section 40 of the
Corporation Code.
5. REMEDIAL LAW; CIVIL PROCEDURE; NOTICE OF LIS PENDENS;
EFFECT THEREOF. — "Once a notice of lis pendens has been duly registered,
any cancellation or issuance of the title of the land involved as well as any
subsequent transaction affecting the same, would have to be subject to the
outcome" of the suit. In other words, "a purchaser who buys registered land
with full notice of the fact that it is in litigation between the vendor and a
third party . . . stands in the shoes of his vendor and his title is subject to the
incidents and results of the pending litigation . . ."
6. ID.; ID.; WITHOUT JURISDICTION AND GRAVE ABUSE OF
DISCRETION; CONSTRUED. — In the case of Alafriz vs. Nable, 72 Phil. 278, p.
280 (1941), this Court defined the phrases "without jurisdiction" and "grave
abuse of discretion" as follows: 'without jurisdiction' means that the court
acted with absolute want of jurisdiction. . . . 'Grave abuse of discretion'
implies such capricious and a whimsical exercise of judgment as is
equivalent to lack of jurisdiction, or, in other words where the power is
exercised in an arbitrary or despotic manner by reason of passion or
personal hostility, and it must be so patent and gross as to amount to an
evasion of positive duty or to a virtual refusal to perform the duty enjoined
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 or to act at all in contemplation of law."
7. ID.; ID.; APPEAL; WHEN RULE 45 AVAILABLE; CASE AT BAR. — Let
it be emphasized that Rule 45 of the Rules of Court, under which the present
petition was filed, authorizes only reversible errors of the appellate court as
grounds for review, and not "grave abuse of discretion" which is provided for
by Rule 65. It is basic that where Rule 45 is available and in fact availed of as
a remedy — as in this case — recourse under Rule 65 cannot be allowed
either as an add-on or as a substitute for appeal.

DECISION

PANGANIBAN, J : p

May a co-owner contest as unenforceable a sale of a real property

listed in and sold pursuant to the terms of a judicially-approved compromise
agreement but without the knowledge of such co-owner? Is the corporate
secretary's certification of the shareholders' and directors' resolution
authorizing such sale sufficient, or does the buyer need to go behind such
certification and investigate further the truth and veracity thereof?
These questions are answered by this Court as it resolves the instant
petition challenging the Decision 1 in CA-G.R. SP No. 33307 promulgated May
31, 1994 by the respondent Court, 2 reversing the judgment of the trial
court.
The Antecedent Facts
The facts as found by the respondent Court of Appeals are as follows:
"On 29 June 1984, (now herein Petitioner) Julieta Esguerra filed
a complaint for administration of conjugal partnership or separation of
property against her husband Vicente Esguerra, Jr. before (the trial)
court. The said complaint was later amended on 31 October 1985
impleading V. Esguerra Construction Co., Inc. (VECCI for brevity) and
other family corporations as defendants (Annex 'C', p. 23, Rollo ).
The parties entered into a compromise agreement which was
submitted to the court. On the basis of the said agreement, the court
on 11 January 1990 rendered two partial judgments: one between
Vicente and (herein petitioner) and the other as between the latter
and VECCI (Annex 'F' and 'G', pp. 26-27, Rollo ). The compromise
agreement between (herein petitioner) and VECCI provides in part:
'Plaintiff Julieta V. Esguerra and defendant V. Esguerra
Construction Co., Inc., as assisted by their respective counsels,
submitted to this Court on January 11, 1990 a 'Joint Motion for
Partial Judgment Based on Compromise Agreement", pertinent
provisions of which reads as follows:

'1. Defendant V. Esguerra Construction Co., Inc.,

(VECCI) shall sell/alienate/transfer or dispose of in any lawful and
convenient manner, and under the terms and conditions recited
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 in the enabling resolutions of its Board of Directors and
stockholders, all the following properties:

* real estate and building located at 140 Amorsolo

Street, Legaspi Village, Makati, Metro Manila;

* real estate and building located at 104 Amorsolo

Street, Legaspi Village, Makati, Metro Manila:

* real estate and improvements located at Barangay

San Jose, Antipolo, Rizal;
* real estate and improvements located at Barangay
San Jose, Antipolo, Rizal;
* real estate and improvements located at Kamagong
Street, St. Anthony Subdivision, Cainta, Rizal; and
* real estate and improvements located at Barangay
Malaatis, San Mateo, Rizal.
2. After the above-mentioned properties shall have
been sold/alienated/transferred or disposed of and funds are
realized therefrom, and after all the financial obligations of
defendant VECCI (those specified in the enabling resolutions and
such other obligations determined to be due and will become
due) are completely paid and/or settled, defendant VECCI shall
cause to be paid and/or remitted to the plaintiff such
amount/sum equivalent to fifty percent (50%) of the (net)
resulting balance of such funds.'
By virtue of said agreement, Esguerra Bldg. I located at
140 Amorsolo St., Legaspi Village was sold and the net proceeds
distributed according to the agreement. The controversy arose
with respect to Esguerra Building II located at 104 Amorsolo St.,
Legaspi Village, Makati. (Herein petitioner) started claiming one-
half of the rentals of the said building which VECCI refused. Thus,
on 7 August 1990, (herein petitioner) filed a motion with
respondent court praying that VECCI be ordered to remit one-half
of the rentals to her effective January 1990 until the same be
sold (p. 28, Id.). VECCI opposed said motion (p. 31, Rollo ).
On October 30, 1990 respondent (trial) court ruled in favor of
(herein petitioner) (p. 34, Rollo ) which was affirmed by this court in a
decision dated 17 May 1991 in CA-G.R. SP. No. 2380. VECCI resorted
to the Supreme Court which on 4 May 1992 in G.R. No. 100441
affirmed this court's decision the fallo of which reads:

'The petition is without merit. As correctly found by the

respondent Court of Appeals, it can be deduced from the terms
of the Compromise Agreement and from the nature of the action
in the court a quo that the basis of the equal division of the
proceeds of any sale or disposition of any of the subject
properties is the acknowledged ownership of private respondent
over one-half of the said assets. Considering that the other
building has yet to be sold, it is but logical that pending its
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 disposition and conformably with her one-half interest therein,
private respondent should be entitled to half of its rentals which
forms part of her share in the fruits of the assets. To accord a
different interpretation of the Compromise Agreement would be
prejudicial to the established rights of private respondent.' (p.
36, Rollo ).
Meanwhile, Esguerra Bldg. II was sold to (herein private
respondent Sureste Properties, Inc.) for P150,000,000.00 (sic). On 17
June 1993, (Julieta V. Esguerra) filed a motion seeking the nullification
of the sale before respondent (trial) court on the ground that VECCI is
not the lawful and absolute owner thereof and that she has not been
notified nor consulted as to the terms and conditions of the sale (p.
37, Rollo ).
Not being a party to the civil case, (private respondent Sureste)
on 23 June 1993 filed a Manifestation concerning (herein petitioner's)
motion to declare the sale void ab initio . In its Manifestation (Sureste)
points out that in the compromise agreement executed by VECCI and
(Julieta V. Esguerra), she gave her express consent to the sale of the
said building (p. 38, Rollo ).
On 05 August 1993, respondent judge (who took over the case
from Judge Buenaventura Guerrero, now Associate Justice of this
court) issued an Omnibus Order denying among others, (Sureste's)
motion, to which a motion for reconsideration was filed. 3
After trial on the merits, the Regional Trial Court of Makati, Branch 133,
4 rendered its order, the dispositive portion of which reads:
"WHEREFORE, the Court resolves as it is resolved that:
1. The Omnibus Order of the Court issued on August 5, 1993
is hereby reconsidered and modified to the effect that:
a. The Notice of Lis Pendens is annotated at the back of
the Certificate of Title of Esguerra Bldg. II located at Amorsolo
St., Legaspi Village, Makati, Metro Manila is delivered to be valid
and subsisting, the cancellation of the same is hereby set aside;
and,
b. The sale of Esguerra Bldg. II to Sureste Properties,
Inc. is declared valid with respect to one-half of the value thereof
but ineffectual and unenforceable with respect to the other half
as the acknowledged owner of said portion was not consulted as
to the terms and conditions of the sale

The other provisions of said Omnibus Order remain

undisturbed and are now deemed final and executory.

2. Sureste Properties, Inc. is hereby enjoined from pursuing

further whatever Court action it has filed against plaintiff as well as
plaintiff's tenants at Esguerra Bldg. II;
3. Plaintiff's Urgent Ex-parte Motion dated December 14,
1993 is hereby DENIED for being moot and academic.
4. Plaintiff is hereby directed to bring to Court, personally
or through counsel, the subject shares of stocks on February 15, 1994
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 at 10:30 in the morning for the physical examination of defendant or
counsel.
SO ORDERED." 5

From the foregoing order, herein private respondent Sureste

Properties, Inc. interposed an appeal with the Court of Appeals which ruled in
its favor, viz.:
"From the foregoing, it is clear that respondent judge abused
his discretion when he rendered the sale of the property
unenforceable with respect to one-half.
WHEREFORE, the petition is hereby GRANTED. The assailed
order dated 1 February 1994 is hereby SET ASIDE. No pronouncement
as to cost.
SO ORDERED." 6

Julieta Esguerra's Motion for Reconsideration 7 dated June 15, 1994 was
denied by the respondent Court in the second assailed Resolution 8
promulgated on February 23, 1995.
Hence this petition.
The Issues
Petitioner submits the following assignment of errors:
". . . (I)n issuing the Decision (Annex 'A' of the petition) and the
Resolution (Annex 'B' of the petition), the Court of Appeals decided
questions of substance contrary to law and applicable jurisprudence
and acted without jurisdiction and/or with grave abuse of discretion
when:
It validated the sale by VECCI to Sureste of the subject property
without the knowledge and consent of the acknowledged co-owner
thereof and in contravention of the terms of the compromise
agreement as well as the Resolution of this Honorable Court in G.R.
No. 100441 wherein this Honorable Court recognized herein
petitioner's 'acknowledged ownership of — one-half of the subject
property; and,
It held that the trial court acted without jurisdiction and/or
abused its discretion when it held that the questioned sale of the
property is ineffectual and unenforceable as to herein petitioner's
one-half (1/2) ownership/interest in the property since the sale was
made without her knowledge and consent.
B E C A U S E:
A. No proper corporate action of VECCI was made to effect
such sale as required under the compromise agreement;
B. The sale of the subject property was made in violation of
the terms of the compromise agreement in that it was not made with
the approval/consent of the acknowledged owner of 1/2 of the said
asset;
C. The prior sale of another property (the Esguerra Building
I as distinguished from the subject property which is the Esguerra
Building II) included in the said compromise agreement was made
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 only after the prior approval/consent of petitioner and this procedure
established a precedent that applied in the subsequent sale of the
Esguerra Building II; and
D. Respondent Sureste as purchaser pendente lite of the
subject property covered by a notice of lis pendens was in law-
deemed to have been duly notified of the aforesaid conditions
required for a valid sale of the subject property as well as of
petitioner's 'acknowledged ownership — over one-half' of the
Esguerra Building II." 9
Simply put, petitioner (1) assails VECCI's sale of Esguerra Building II to
private respondent as unenforceable to the extent of her one-half share, and
(2) accuses the appellate court of "acting without jurisdiction or with grave
abuse of discretion" in reversing the trial court's finding to that effect.
The Court's Ruling
The petition has no merit.
First Issue: Is the Contract of Sale Unenforceable?
The Civil Code provides that a contract is unenforceable when it is ". . .
entered into in the name of another person by one who has been given no
authority or legal representation, or who has acted beyond his powers." 10
And that "(a) contract entered into in the name of another by one who has
no authority or legal representation, or who has acted beyond his powers,
shall be unenforceable, . . ." 11 After a thorough review of the case at bench,
the Court finds the sale of Esguerra Building II by VECCI to private
respondent Sureste Properties, Inc. valid. The sale was expressly and clearly
authorized under the judicially-approved compromise agreement freely
consented to and voluntarily signed by petitioner Julieta Esguerra. Thus,
petitioner's contention that the sale is unenforceable as to her share for
being unauthorized is plainly incongruous with the express authority granted
by the compromise agreement to VECCI, which specified no condition that
the latter shall first consult with the former prior to selling any of the
properties listed there. As astutely and correctly found by the appellate
Court:
"The compromise agreement entered between private
respondent (Julieta Esguerra) and VECCI, which was approved by the
court, expressly provides, among others, that the latter shall sell or
otherwise dispose of certain properties, among them, Esguerra Bldgs.
I and II, and fifty (50%) percent of the net proceeds thereof to be
given to the former. Pursuant to said agreement, VECCI sold the
buildings. . . .
xxx xxx xxx
The compromise agreement expressly authorizes VECCI to sell
the subject properties, with the only condition that the sale be in a
lawful and convenient manner and under the terms and conditions
recited in the enabling resolutions of its Board of Directors and
stockholders. There is nothing in the said agreement requiring VECCI
to consult the private respondent (Julieta Esguerra) before any sale
(can be concluded). Thus, when VECCI sold the property to (Sureste
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 Properties, Inc.) as agreed upon, it need not consult the private
respondent." 12
Moreover, petitioner's contention runs counter to Article 1900 of the
Civil Code which provides that:
"So far as third persons are concerned, an act is deemed to
have been performed within the scope of the agent's authority, if
such act is within the terms of the power of attorney, as written, even
if the agent has in fact exceeded the limits of his authority according
to an understanding between the principal and the agent."
Thus, as far as private respondent Sureste Properties, Inc. is
concerned, the sale to it by VECCI was completely valid and legal because it
was executed in accordance with the compromise agreement, authorized not
only by the parties thereto, who became co-principals in a contract of agency
created thereby, but by the approving court as well. Consequently, the sale
to Sureste Properties, Inc. of Esguerra Building II cannot in any manner or
guise be deemed unenforceable, as contended by petitioner.
Consultation in the Sale of Esguerra Building I
Not a Binding Precedent
The petitioner further argues that VECCI's consulting her on the terms
and conditions of its sale of Esguerra Building I set a binding precedent to be
followed by the latter on subsequent sales. She adds that in failing to consult
her on the sale of Esguerra Building II, VECCI "acted unfairly and unjustly" as
evidenced by (a) the sale of said building for only P160,000,000.00 instead
of P200,000,000.00, which is "the best price obtainable in the market," (b)
payment of real estate broker's commission of 5% instead of just 2% as in
the sale of Esguerra 1 building, and (c) the denial of petitioner's right of first
refusal when her offer to purchase her one-half share for P80,000,000.00 as
ordered by the trial court was totally ignored. 13
The Court is not persuaded. Petitioner's argument is debunked by the
very nature of a compromise agreement. The mere fact that petitioner
Julieta Esguerra was consulted by VECCI in the sale of Esguerra Building I did
not affect nor vary the terms of the authority to sell granted the former as
expressly spelled out in the judicially-approved compromise agreement
because "a compromise once approved by final orders of the court has the
force of res judicata between the parties and should not be disturbed except
for vices of consent or forgery." 14 Hence, "a decision on a compromise
agreement is final and executory, . . ." 15
Petitioner insists that had she been consulted in the sale of Esguerra
Building II, better terms could have been obtained. This is plainly without
legal basis since she already consented to the compromise agreement which
authorized VECCI to sell the properties without the requirement of prior
consultation with her. "It is a long established doctrine that the law does not
relieve a party from the effects of an unwise, foolish, or disastrous contract,
entered into with all the required formalities and with full awareness of what
he was doing. Courts have no power to relieve parties from obligations
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 voluntarily assumed, simply because their contracts turned out to be
disastrous deals or unwise investments." 16 It is a truism that "a compromise
agreement entered into by party-litigants, when not contrary to law, public
order, public policy, morals, or good custom is a valid contract which is the
law between the parties themselves. It follows, therefore, that a compromise
agreement, not tainted with infirmity, irregularity, fraud or illegality is the
law between the parties who are duty bound to abide by it and observe
strictly its terms and conditions" 17 as in this case. Incidentally, private
respondent Sureste Properties, Inc. submits that the petitioner offered to buy
her one-half share for only P75,000,000.00, not P80,000,000.00. 18 She
therefore valued the whole building only at P150,000,000.00 which amount
is P10,000,000.00 less than the price of P160,000,000.00 paid by private
respondent, the highest offer the market has produced in two and a half
years the building was offered for sale. Even the 5% real estate broker's
commission was not disparate with the standard practice in the real estate
industry. Thus, the respondent Court aptly stated that: cdasia

". . . In affixing her signature on the compromise agreement,

private respondent (Julieta Esguerra) has demonstrated her
agreement to all the terms and conditions therein and have (sic)
given expressly her consent to all acts that may be performed
pursuant thereto. She can not later on repudiate the effects of her
voluntary acts simply because it does not fit her. Her contention that
she was not consulted as to the terms of the sale has no leg to stand
on." 19
Parenthetically, the previous consultation can be deemed as no more
than a mere courtesy extended voluntarily by VECCI. Besides, such previous
consultation — even assuming arguendo that it was a binding precedent —
cannot bind private respondent Sureste which was not a party thereto. To
declare the sale as infirm or unenforceable is to heap unfairness upon
Sureste Properties, Inc. and to undermine public faith in court decisions
approving compromise agreements.
Right of First Refusal Waived
The argument of petitioner that she was denied her right of first refusal
is puerile. This alleged right, like other rights, may be waived 20 as petitioner
did waive it upon entering into the compromise agreement. Corollarily, the
execution of the spouses' judicial compromise agreement necessitated the
sale of the spouses' co-owned properties and its proceeds distributed fifty
percent to each of them which, therefor, resulted in its partition. 21 If
petitioner wanted to keep such right of first refusal, she should have
expressly reserved it in the compromise agreement. For her failure to do so,
she must live with its consequences.
VECCI'S Sale of Esguerra
Building II A Valid Exercise of Corporate Power
Petitioner contends that VECCI violated the condition in the
compromise agreement requiring that the sale be made "under the terms
and conditions recited in the enabling resolutions of its Board of Directors
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 and stockholders." 22 She rues that no shareholders' or directors' meeting,
wherein these resolutions were passed, was actually held. She thus bewails
this sale as improper for not having complied with the requirements
mandated by Section 40 of the Corporation Code. 23
Petitioner's contention is plainly unmeritorious. The trial court's partial
decision dated January 11, 1990 approving the compromise agreement
clearly showed that the "enabling resolutions of its (VECCI's) board of
directors and stockholders" referred to were those then already existing; to
wit: (1) "the resolution of the stockholders of VECCI dated November 9, 1989,
(where) the stockholders authorized VECCI to sell and/or disposed all or
substantially all its property and assets upon such terms and conditions and
for such consideration as the board of directors may deem expedient." 24 (2)
the "resolution dated 9 November 1989, (where) the board of directors of
VECCI authorized VECCI to sell and/or dispose all or substantially all the
property and assets of the corporation, at the highest available price/s they
could be sold or disposed of in cash, and in such manner as may be held
convenient under the circumstances, and authorized the President Vicente B.
Esguerra, Jr. to negotiate, contract, execute and sign such sale for and in
behalf of the corporation." 25 VECCI's sale of all the properties mentioned in
the judicially-approved compromise agreement was done on the basis of its
Corporate Secretary's Certification of these two resolutions. The partial
decision did not require any further board or stockholder resolutions to make
VECCI's sale of these properties valid. Being regular on its face, the
Secretary's Certification was sufficient for private respondent Sureste
Properties, Inc. to rely on. It did not have to investigate the truth of the facts
contained in such certification. Otherwise, business transactions of
corporations would become tortuously slow and unnecessarily hampered.
Ineluctably, VECCI's sale of Esguerra Building II to private respondent was
not ultra vires but a valid execution of the trial court's partial decision. Based
on the foregoing, the sale is also deemed to have satisfied the requirements
of Section 40 of the Corporation Code.
Furthermore, petitioner Julieta Esguerra is estopped from contesting
the validity of VECCI's corporate action in selling Esguerra Building II on the
basis of said resolutions and certification because she never raised this issue
in VECCI's prior sales of the other properties sold including the Esguerra
Building I. 26 The same identical resolutions and certification were used in
such prior sales.
Notice of Lis Pendens
"Once a notice of lis pendens has been duly registered, any
cancellation or issuance of the title of the land involved as well as any
subsequent transaction affecting the same, would have to be subject to the
outcome" 27 of the suit. In other words, "a purchaser who buys registered
land with full notice of the fact that it is in litigation between the vendor and
a third party . . . stands in the shoes of his vendor and his title is subject to
the incidents and result of the pending litigation . . ." 28 In the present case,
the purchase made by private respondent Sureste Properties, Inc. of the
property in controversy is subject to the notice of lis pendens annotated on
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 its title. Thus, the private respondent's purchase remains subject to our
decision in the instant case. The former is likewise deemed notified of all the
incidents of this case including the terms and conditions for the sale
contained in the compromise agreement. However, petitioner's inference
that the private respondent is also deemed to have been notified that the
manner of the sale of the properties contained in the compromise
agreement should be "made only upon prior consent/conformity of the
herein petitioner" is non sequitur. Nowhere in the compromise agreement
was this inference expressly or impliedly stated. In the final analysis, the
determination of this issue ultimately depends on this Court's disposition of
this case.
Appealed Decision Consistent with Previous
Court of Appeals and Supreme Court Decisions
Petitioner maintains that the trial court's ruling that "the sale of
Esguerra Building II to Sureste is unenforceable to the extent of one-half
share of petitioner in the property" is based on the Court of Appeals' decision
in G.R. SP No. 23780 dated May 17, 1991, and the Supreme Court's decision
in G.R. No. 100441 dated May 4, 1992 which both acknowledged petitioner's
one-half ownership of said building. 29 She reasons that "(a)s co-owner her
consent or conformity to the sale was necessary for the validity or effectivity
thereof insofar as her 1/2 share/ownership was concerned." 30 The Court
disagrees. As discussed previously, this repetitive contention is negated by
her consent to the compromise agreement that authorized VECCI to sell the
building without need of further consultation with her. Her co-ownership in
the building was not inconsistent with her authorizing another, specifically
VECCI, to sell her share in this property via an agency arrangement. As
correctly stated by the respondent Court of Appeals, the only import of this
Court's ruling in G.R. No. 100441 was as follows:
"the only issue involved is whether or not private respondent is
entitled to one-half of the rentals of the subject property pending its
sale. The rulings of the courts is (sic) therefore limited only to the
issue of rental, there being no provision in the compromise
agreement approved by the court for the rentals earned from the
building pending its sale. Nowhere in the said rulings did it question
nor assail the authority granted to VECCI to sell the said building. In
fact, the decisions affirmed the authority granted to VECCI to sell the
said building which invoked the compromise agreement of the parties
as a basis of the decision (Manifestation, p. 38,. Rollo )." 31
Second Issue: Did the Appellate Court Act Without Jurisdiction
or With Grave Abuse of Discretion?
In the case of Alafriz vs. Nable, 32 this Court defined the phrases
"without jurisdiction" and "grave abuse of discretion" as follows:
"'Without jurisdiction' means that the court acted with absolute
want of jurisdiction. . . . 'Grave abuse of discretion' implies such
capricious and whimsical exercise of judgment as is equivalent to lack
of jurisdiction, or, in other words where the power is exercised in an
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 arbitrary or despotic manner by reason of passion or personal
hostility, and it must be so patent and gross as to amount to an
evasion of positive duty or to a virtual refusal to perform the duty
enjoined or to act at all in contemplation of law."
Contrary to petitioner's asseverations, the Court finds that the
respondent Court of Appeals judiciously, correctly and certainly acted within
its jurisdiction in reversing the trial court's decision. As discussed, its
decision is consistent with law and existing jurisprudence.
Let it be emphasized that Rule 45 of the Rules of Court, under which
the present petition was filed, authorizes only reversible errors of the
appellate court as grounds for review, and not "grave abuse of discretion"
which is provided for by Rule 65. It is basic that where Rule 45 is available,
and in fact availed of as a remedy — as in this case — recourse under Rule
65 cannot be allowed either as an add-on or as a substitute for appeal.
Finally, "(c)ourts as a rule may not impose upon the parties a judgment
different from their compromise agreement. It would be an abuse of
discretion." 33 Hence, in this case, it is the trial court's decision which is
tainted with grave abuse of discretion for having injudiciously added "prior
consultation" to VECCI's authority to sell the properties, a condition not
contained in the judicially-approved compromise agreement.
WHEREFORE, the petition is hereby DENIED for lack of merit, no
reversible error having been committed by respondent Court. The assailed
Decision is AFFIRMED in toto. Costs against petitioner.
SO ORDERED.
Narvasa, C .J ., Davide, Jr., Melo and Francisco, concur.

Footnotes
1. Rollo , pp. 44-51.
2. Second Division, composed of J. Antonio M. Martinez, ponente, and JJ. Quirino
D. Abad Santos, Jr. and Godardo A. Jacinto.
3. Rollo , pp. 45-48.
4. Presided by Judge Ruben A. Mendiola.

5. Rollo , p. 117.
6. Ibid., p. 51.
7. Ibid., pp. 178-195
8. Ibid., pp. 53-55.
9. Memorandum for the Petitioner, pp. 11-12; Rollo , pp. 292-293.

10. Article 1403, paragraph 1, Civil Code.

11. Article 1317, paragraph 2, Supra.

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 12. Rollo , pp. 49-50.
13. Memorandum for the Petitioner, p. 25; Rollo , p. 306.

14. Republic vs. Sandiganbayan, 226 SCRA 314, 328, September 10, 1993;
citing Araneta vs. Perez, 7 SCRA 923, April 30, 1963.
15. Casal vs. Concepcion, Jr., 243 SCRA 369, 372, April 6, 1995; Citing Master
Tours and Travel Corporation vs. Court of Appeals, 219 SCRA 321, March 1,
1993, and Mobil Oil Philippines, Inc. vs. Court of First Instance of Rizal,
Branch VI, 208 SCRA 523, May 8, 1992.
16. Republic vs. Sandiganbayan, supra.; citing Tanda vs. Aldaya , 89 Phil. 497,
(1951), and Villacorte vs. Mariano, 89 Phil. 341, (1951).

17. Municipal Board of Cabanatuan City vs. Samahang Magsasaka, Inc., 62

SCRA 435, 438, February 25, 1975; citing Juan-Marcelo vs. Go Kim Pah , 22
SCRA 309, January 29, 1968.
18. Rollo , pp. 212 and 274; Comment, p. 8; Memorandum for Private
Respondent, p. 13.

19. Rollo , pp. 49-50.

20. Article 6, Civil Code.

21. Article 496 of the Civil Code provides that:

"Partition may be made by agreement between the parties or by judicial

proceedings. . ."

Article 498 of the Civil Code reads:

"Whenever the thing is essentially indivisible and the co-owners cannot

agree that it be allotted to one of them who shall indemnify the others, it
shall be sold and its proceeds distributed."

22. Rollo , p. 293.

23. Ibid., p. 294. Section 40 of the Corporation Code provides:
"Sale or other disposition of assets. — Subject to the provisions of existing
laws on illegal combinations and monopolies, a corporation may, by a
majority vote of its board of directors, or trustees, sell, lease, exchange,
mortgage, pledge or otherwise dispose of all or substantially all of its
property and assets, including its goodwill, upon such terms and conditions
and for such consideration, as its board of directors or trustees may deem
expedient, when authorized by the vote of the stockholders representing at
least two-thirds (2/3) of the members, in a stockholders' or members'
meeting duly called for the purpose. Written notice of the proposed action
and of the time and place of the meeting shall be addressed to each
stockholder or member at his place of residence as shown on the books of
the corporation and deposited to the addressee in the post office with
postage pre-paid, or served personally; Provided, That any dissenting
stockholder may exercise his appraisal right under the conditions provided in
this Code. . . ."

24. Ibid., p. 107.

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 25. Ibid.; Comment to the Motion for Reconsideration, dated 2 September 1993,
filed by Sureste before the trial court.
26. Ibid.
27. Peña, Registration of Land Titles and Deeds, p. 391, 1994; citing J.P. Pellicer
& Co., Inc. vs. Philippine Realty Corp., 87 Phil. 302 (1950).
28. Ibid.; citing Director of Lands vs. Reyes, 68 SCRA 177, November 28, 1975,
and Alinsunurin vs. Director of Lands, 69 SCRA 415, February 27, 1976.

29. Rollo , p. 300.

30. Ibid.
31. Rollo , p. 50.
32. 72 Phil. 278, p. 280 (1941); citing Leung Ben vs. O'Brien, 38 Phil. 182
(1918), Salvador Campos y Cia vs. Del Rosario, 41 Phil. 45 (1920), Abad
Santos vs. Province of Tarlac, 38 Off. Gaz. 830, and Tavera-Luna, Inc. vs.
Nable, 38 Off. Gaz. 62. See also San Sebastian College vs. Court of Appeals,
197 SCRA 444, 458, March 20, 1991; Sinon vs. Civil Service Commission , 215
SCRA 410, November 5, 1992; Bustamante vs. Commission on Audit, 216
SCRA 134, 136, November 27, 1992; Zarate vs. Olegario, G.R. No. 90655,
October 7, 1966.
33. Tolentino, Arturo M., Commentaries and Jurisprudence on the Civil Code of
the Philippines, p. 485, 1992; citing Municipal Board vs. Samahang
Magsasaka, Supra, International Hotel vs. Asuncion, 63 SCRA 77, March 10,
1975, and Tac-an Dano vs. Court of Appeals, 137 SCRA 803, July 29, 1985.

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