Republic of the Philippines

SUPREME COURT

Manila

SILVER FILMS, INC.,

Petitioner,

- versus - Civil Case No. 30012

(CA-GR. CV 54389)

Brenda Simon and

Lorenzo Garcia,

Respondent,

X-----------------------------------x

PETITION FOR REVIEW ON CERTIORARI

Petitioner, by his counsel and to this Honorable Supreme Court most respectfully
alleges that:

NATURE OF THE PETITION

1. This is a petition for review under Rule 42 of the Rules of Court, a mode of
appeal from a judgment of the Court of Appeals, rendered in the exercise of its
appellate jurisdiction.
2. Final judgment or order of the Court of Appeals in an appeal from the final
judgment or order of a Regional Trial Court may be appealed to the Supreme
Court through Petition for Review under this rule, where the appeal involves pure
questions of law.

THE PARTIES
3. Petitioner Silver Films, Inc. (Silver Films) is a domestic corporation engaged in
film production and distribution. It holds office at 10 th Floor, Prime Building,
Ermita, Manila, represented by his counsel of record, Atty. Andres Rizal, with
office address at 403 McKinley Village, Taguig City.
4. Respondent Lorenzo Garcia (Garcia) is a Filipino, of legal age and a resident of
Manila City. He can be served with the processes of the Court thru his counsel of
 record, Atty. Maria Leila B. Penera with office address at 5/F Rivera Santos
Building, 54 Antonio Luna Street, Sta. Cruz, Manila.

MATERIAL DATES
5. This case o r i g i n a t e d from the Regional Trial Court (RTC Branch 107,
Manila) docketed as Civil Case No. 30012, from which the judge rendered an
Order on 24 October 2004 approving the 17 June 2003 amendment entered by
the parties as a Compromise Agreement.
6. Petitioner filed its Motion to Dismiss on the ground that the dispute between
the parties had already been settled and amicably resolved as per amendment
to the 2000 and 2002 Contract dated 17 June 2003. RTC noted that the
Amendment dated 17 June 2003 was the basis of petitioner Silver Films,
Inc.’s Motion to Dismiss, it resolved to render a compromise judgment in
favor of respondent.
7. The RTC, for the resolution of motions filed by petitioner Silver Films, Inc.
rendered on its 06 March 2005 Order a judgment terminating the proceedings
of the case and denying the Motion for Reconsideration and Motion to Defer
Filing of Answer for having become moot and academic, while upholding the
compromise judgment on its 24 October 2004 Order.
8. On 05 June 2005 (on the case docketed as CA-G.R. No. 54389), the Court of
Appeals affirmed the 24 October 2004 Order of the RTC which ruled that the
amendment dated 17 June 2003 between Brenda Simon and petitioner Silver
Films, Inc. was a compromise agreement, and was ratified when respondent
Garcia expressed his conformity through his 03 July 2004 Manifestation.
STATEMENT OF THE MATTERS INVOLVED
9. Actor Lorenzo Garcia and Brenda Simon – Garcia’s talent manager, sued
Silver Films, Inc. for rescission of the actor’s movie contract and for damages.
Before filing an answer, Silver Films, Inc. entered into an amendment of
contracts with Simon maintaining the contract but providing for payment of a
substantial sum of money and a parcel of land in Quezon City. Garcia claimed
no authorization of the agreement for what he wanted was for the producer to
release him from the contract.
10. As the case dragged on, Garcia got involved in a film festival scandal that
tainted his image. When Silver Films, Inc. offered to release him from his
contract, he suddenly had a change of heart. He told the court that he would
now accept the agreement signed by his talent manager, on the condition that
it will be considered as a compromise agreement.
11. Over the objections of Silver Films, Inc., the trial court rendered judgment on
the Civil Case No. 30012 approving the compromise agreement and
directing the producer to pay. Court of Appeals in its Decision dated 05 June
2005 affirmed the trial court’s judgment and made the following rulings:
 First. Since there was consent of all parties, there was an
Amendment or Compromise Agreement to the contract signed by
Simon and Silver Films’ representative to which amendment Garcia
through his Manifestation expressed his conformity.

Second. The compromise agreement was perfected and is binding on

the parties and may not later be disowned simply because of a change of
mind of Silver Films and/or Simon by claiming, in their Opposition/Reply to
Garcia’s Manifestation, that after the 2000 National Film Festival fiasco
in which Garcia was involved, the relationship between the parties had
become bitter to render compliance with the terms and conditions of the
amendment no longer possible and consequently release Garcia from the
2000 and 2002 contracts.

12. Silver Films, Inc. implores the Court to rectify the above rulings for not only do
they contravene the law, they are also irrational and unjust.

THE FACTS AND THE CASE

13. Brenda Simon and Lorenzo Garcia filed with the lower court a Complaint
dated 27 May 2003 which sought the rescission of the 2002 Agreement entered
into with petitioner Silver Films, Inc.
14. While the case was pending, a renegotiation between Garcia, represented by
Simon, and Silver Films, Inc. took place which resulted in an amendment
dated 17 June 2003 that superseded all terms and conditions embodied in their
previous contracts.
15. Silver Films, Inc. and Simon separately filed Motions to Dismiss on the ground
that the dispute involving the parties had already been settled through said
Amendment.
16. Garcia opposed the Motions to Dismiss, alleging that he did not authorize
Simon to represent him in the renegotiation of the agreements.
17. Subsequently, Garcia, in a Manifestation dated 03 July 2004, expressed his
willingness to honor the terms and conditions of the Amendment dated 17 June
2003 on the supposition that it shall be considered a Compromise Agreement.
18. Silver Films, Inc. and Simon opposed Garcia’s proposal to treat the said
Amendment as a Compromise Agreement. Instead, Silver Films, Inc. suggested
 that the terms and conditions to the Agreement reached by the parties during
the preliminary conference held on 23 June 2004 be adhered to, i.e., Silver
Films, Inc. shall release Garcia from his contractual commitments.
19. The trial court in the case docketed as Civil Case No. 30012, rendered an order
dated 24 October 2004, treating the Addendum to the 2000 and 2002 Contracts
dated 17 June 2003 as a Compromise Agreement and denying all pending
motions, including the Motions to Dismiss separately filed by Silver Films and
Simon.
20. Silver Films, Inc. filed a Motion for Reconsideration of the order dated 24
October 2004. The lower court, however, rendered an Order dated 06 March
2005 which denied the Motion for Reconsideration filed by Silver Films, Inc.
and ruled in favor of Garcia, stating that:

“A compromise agreement was entered into by the parties through

the Amendment dated 17 June 2003. xxx”.

21. Silver Films, Inc. appealed the decision to the Court of Appeals and the case was
docketed as CA-G.R. CV No. 54389. Silver Films, Inc. filed its appellant’s brief.
In response, Garcia filed his appellee’s brief.
22. On 05 June 2005 the Court of Appeals affirmed the decision of the trial
court, hence, this petition.

QUESTIONS OF LAW
Petitioner Silver Films Inc. presents the following questions of law:

1.
WHETHER OR NOT THE ADDENDUM SUBMITTED BY SILVER FILMS, INC. TO
SERVE AS BASIS FOR ITS MOTION TO DISMISS CAN BE USED IN RENDERING
JUDGMENT ON A COMPROMISE AGREEMENT.

2.
WHETHER OR NOT THERE IS A BASIS IN FACT AND IN LAW FOR A
COMPROMISE AGREEMENT THERE BEING NO SUCH AGREEMENT BETWEEN
THE PARTIES.

3.
 WHETHER OR NOT THERE HAS BEEN MEETING OF THE MINDS BETWEEN
THE PARTIES THAT ELEVATED THE PREVIOUSLY REJECTED ADDENDUM
TO THE LEVEL OF A JUDGMENT ON A COMPROMISE.

REASONS FOR ALLOWING THE PETITION

I.
RENDERING A JUDGMENT ON COMPROMISE BASED ON THE ADDENDUM
SUBMITTED TO MERELY SERVE AS A BASIS FOR MOTION TO DISMISS IS
UNTENABLE.

If the motion to dismiss filed by Silver Films, Inc. has been denied, then the basis
thereof – addendum dated 17 June 2003, cannot be used as the basis for judgment
on compromise. In fact, the RTC stated in its 24 October 2004 Order that it agrees
with Silver Films, Inc. that indeed no formal compromise agreement was submitted by
the parties for the approval of the court. However, it was urged to believe that there
was a settlement of dispute between the parties in view of the Amendment dated 17
June 2003 which in fact was used as a basis for asking the dismissal of the
complaint.

The lower Court erred in denying the motion to dismiss filed pursuant to the
Amendment and in treating the rejected Amendment as the Compromise Agreement
itself. The denial of the motion to dismiss amounts to a rejection of the Amendment,
hence, this indisputable circumstance bars the trial court from treating the rejected
Amendment as the Compromise Agreement.

II.
RENDERING JUDGMENT ON A COMPROMISE AGREEMENT WHEN THE PARTIES
DID NOT AGREE IS ERRONEOUS.

The Court of Appeals affirmed the ruling of the trial court which ruled that the
agreement entered into by Silver Films and Brenda Simon, and later on ratified by
Garcia is a compromise agreement. This is despite the facts that Simon and Silver
Films did not treat it to be a compromise, and that defendant initially disapproved such
agreement for being grossly disadvantageous to him, and that he did not give his
manager the consent to represent him in such agreement. In its 06 March 2004
Order, the trial court held that:
 “A compromise agreement was entered into by parties through the
Amendment dated 17 June 2003. A perusal of the Amendment dated 17
June 2003 shows that it was duly signed by plaintiff Simon as agent of
plaintiff Garcia and defendant Silver Films, Inc. and their respective
counsel. Though the terms thereof are disadvantageous to him, plaintiff
Garcia ratified the same. Thus, for all intents and purposes, the subject
amendment has all the attributes of a compromise agreement though not
denominated as such.”

A compromise agreement is a contract whereby the parties, by making reciprocal

concessions, avoid litigation or put an end to one already commenced. As a contract,
a compromise agreement must have the following indispensable elements: (a)
consent; (b) Object certain which is the subject matter of the contract; And (c) cause of
the obligation which is established. Civil Code of the Philippines, Art. 1318.

There are two kinds of compromise agreements, the judicial, which puts an end to a
pending litigation, and the extrajudicial, which is to avoid litigation. As a contract, a
compromise agreement is perfected by mutual consent. A judicial compromise,
however, while binding between the parties upon its execution, is not executory until it is
approved by the court and reduced to a judgment.

From the collection of facts, both parties executed an agreement dated 17 June 2003
which was to operate as an addendum to the 2000 and 2002 contracts between
them. The agreement was signed by a representative of Silver Films, Inc. and by
Simon purportedly acting for and in behalf of respondent Garcia. This addendum was
rejected by Garcia and this rejection terminated the offer.

In relation to this addendum prior to the rejection of Garcia, a preliminary conference

was held by the trial court but failed to produce settlement between the parties,
which simply shows that there is no agreement to begin with. Thus, when respondent
later filed his Manifestation on 03 July 2004 stating that he was, in the end, willing to
honor the addendum provided that it be considered as a compromise agreement, there
was nothing to still accept.

Even assuming that an extrajudicial compromise agreement existed, Silver Films,

Inc. has not given consent to such. Or even assuming that a judicial compromise
existed, the approval of the court would be untenable because it did not become
binding between the parties upon its execution, because it was not amenable to
Silver Films. This makes the decision of the courts erroneous in rendering Garcia’s
offer as a valid compromise agreement.
The intent of Silver Films, Inc. to disregard all the previous agreements –
including the addendum which was not even settled in court, is clearly shown in the
new 23 June 2004 contract it entered with Simon, which seeks to release Garcia
from all his contractual commitments. Conclusively, the parties indeed did not agree
to such compromise agreement.

III.
RENDERING A JUDGMENT THAT THERE HAS BEEN MEETING OF THE
MINDS BETWEEN THE PARTIES THAT ELEVATED THE PREVIOUSLY
REJECTED ADDENDUM TO THE LEVEL OF A JUDGMENT ON A COMPROMISE
AGREEMENT IS ERRONEOUS.

The Court of Appeals rendered judgment on a compromise when such compromise

has not been perfected by the acceptance of all the parties. It ruled that:

"In the instant case, there was an Amendment to the contract

signed by Simon and Silver Films' representative to which
addendum Garcia through his Manifestation expressed his
conformity. There was, therefore, consent of all the parties.”

Consent is defined as the concurrence of the wills of the contracting parties with
respect to the object and the cause which shall constitute the contract. It is the meeting
of the minds between all the parties regarding the contract. It was stated on the facts of
the case that said 17 June 2003 agreement entered by Silver Films and Brenda
Simon was to be treated as an amendment to the prior 2000 and 2002 contracts.

However, such agreement was not settled in court which means that no agreement
existed. Also, it was never meant and agreed by them to be a compromise agreement.
In the first place, respondent Garcia did not approve such agreement and he
communicated his disapproval about it. Therefore, there was no concurrence of the
wills or meeting of the minds of all the parties concerned on the assailed agreement
and consequently, no compromise agreement can be executed.

Consent is manifested by the meeting of the offer and the acceptance upon the thing
and the cause which are to constitute the contract. The offer must be certain and the
acceptance absolute. A qualified acceptance constitutes a counter-offer.

The condition that Garcia will ratify the agreement provided that it should be
considered as a compromise agreement constitutes a counter offer. Meaning, the
original offer ceased to exist, and the new qualified offer in the part of Garcia will
only constitute a valid agreement if accepted by Silver Films, Inc. It is undisputed that
Silver Films did not consent to such offer making the counter offer as good as null, and
must be equally treated as that of the rejected addendum.

We can therefore arrive that the addendum is inexistent so is the compromise

agreement that is invoked by Garcia. Hence, the court erred in treating the proposed
addendum as a compromise agreement that will enable Garcia to maintain his uphold
contract.

Garcia’s contention that he did not give his manager the consent to represent him in the
17 June 2003 agreement would make the addendum unenforceable. Consequently,
it would make the compromise agreement unenforceable as well.

Even honoring the Manifestation of Garcia will not support the erroneous ruling,
because of the absence of his consent in the addendum which is the basis of the
compromise agreement he seeks to uphold. It is a rule that consent could be given not
only by the party himself but by anyone duly authorized and acting for and in his
behalf. However, by Garcia’s own admission, the addendum was entered into without
his knowledge and consent.

Provisions of the Civil Code which govern defective contracts provide that a contract
entered into in the name of another by one who ostensibly might have but who, in
reality, had no real authority or legal representation, or who, having such authority,
acted beyond his powers, would be unenforceable. Unenforceable contracts are
susceptible of ratification; however it should have been made before its revocation by
the other contracting party. Silver Films, Inc. revoked the addendum thereby
invalidating Garcia’s ratification, when the producer expressed its willingness to
release respondent from all his contractual agreements during the preliminary
conference held on 23 June 2003.
 PRAYER

WHEREFORE, premises considered, it is most respectfully prayed that the RTC

Order dated 24 October, 2004 and the CA Decision dated 5 June 2005 appealed from
be reversed and set aside and the case be DISMISSED. Petitioner prays for cost of
the suit and for other reliefs as may be deemed just or equitable.

Makati City for Manila, January 9, 2021

JOSE IGNATIUS D. PEREZ

Counsel for Petitioner SILVER FILMS INC.
5th Floor, Homer Building
245 Bataan Street, Palanan, Makati City
Atty. Roll 77777
IBP No. 777777 12-25-12
PTR No. 7777777 01-02-2013
MCLE Compliance III-297
Email: joseignatius@yahoo.com
Tel. and Fax 8765432

VERIFICATION AND CERTIFICATION

I, Atty. Jose Ignatius D. Perez, of legal age and with office address at 5th Floor,
Homer Building 245 Bataan Street, Palanan, Makati City, after having sworn in
accordance with law, depose and state that:

1. I am the General Counsel and Corporate Secretary of Silver Films, duly

empowered to cause the filing of this petition on its behalf under a board resolution,
copy here attached;

2. I have read the foregoing petition and the facts stated in it are true based on
the authentic record of the case;
3. I have not theretofore commenced any action or filed any claim involving the same
issues in any court, tribunal, or quasi-judicial agency;
4. To the best of my knowledge, no such action or claim is pending therein; and
5. If I should thereafter learn that the same or a similar action or claim has been
filed or pending, I shall report that fact within (5) days therefrom to this Court.

JOSE IGNATIUS D. PEREZ

SUBSCRIBED AND SWORN to before me this 9th day of January 2021 in Manila
City. Affiant exhibited to me his LTO Driver’s License No. N10-86-253798, expiring on
September 2, 2023.

JOSE C. PEREZ, JR.

Notary Public

Attorney’s Roll 29636

Appointment No. 678

Until December 31, 2022

PTR # 56789 1-12-13 Manila

IBP # 24680 1-12-13

MCLE Compliance III- 3456

1234 Taft Avenue, Manila City

jcp_1951@yahoo.com

Doc. No. 777;

Page No. 12

Book No. I

Series of 2021
Copy Furnished:

The Court of Appeals

Ma. Orosa St., Ermita, Manila

Atty. Joselito P. Consul

Consul & Perez

2nd Floor, Standard Bldg.

Taft Avenue, Manila