On September 12, 2015, my neighbor obtained a loan from me in the amount of P69, 000.00 to be paid on November 12, 2015. He, however, never paid me any amount, and kept on hiding every time I would ask for his whereabouts from his relatives.
I sent him a demand letter and filed a complaint against him in our barangay (village). During conciliation proceeding in the barangay, we both agreed that he would pay his obligation before December 15, 2015. We also executed a “Kasunduan” for that purpose. I tried to collect the amount from him on the date agreed upon, but it proved futile.
I asked the barangay chairman to issue a Certificate to File Action, but my neighbor opposed it. He contended that we had already an agreement; hence, I could no longer file an action against him. Is he correct?
Your neighbor is not correct. Since he failed to abide by the compromise, you have the option to either enforce the compromise or to demand payment of the whole obligation by filing a civil action for the collection of sum of money. This finds support under Article 2041 of the Civil Code, which provides., “If one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or regard it as rescinded and insist upon his original demand.”
The Supreme Court (SC) had the occasion to explain this provision of law. It ruled that Article 2041 does not require an action for rescission, and the aggrieved party, by the breach of compromise agreement, may just consider it already rescinded, to wit:
“It is worthy of notice, in this connection, that, unlike Article 2039 of the same code, which speaks of ‘a cause of annulment or rescission of the compromise” and provides that “the compromise may be annulled or rescinded’ for the cause therein specified, thus suggesting an action for annulment or rescission, said Article 2041 confers upon the party concerned, not a ‘cause’ for rescission, or the right to ‘demand’ the rescission of a compromise, but the authority, not only to ‘regard it as rescinded,’ but, also, to ‘insist upon his original demand.’” The language of this Article 2041, particularly when contrasted with that of Article 2039, denotes that no action for rescission is required in said Article 2041, and that the party aggrieved by the breach of a compromise agreement may, if he chooses, bring the suit contemplated or involved in his original demand, as if there had never been any compromise agreement, without bringing an action for rescission thereof. He need not seek a judicial declaration of rescission, for he may “regard” the compromise agreement already “rescinded” (Miguel vs Montanez,G.R. No. 191336, January 25, 2012).
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to enlighten you on the matter.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to email@example.com