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CIVIL CODE PROVISIONS ON ADR (Art.

2028-2046)
DEFINITION:
COMPROMISES - is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to
one already commenced. (Article 2028)
ESSENCE:
The element of reciprocal concessions is the very heart and life of every compromise.
CHARACTERISTICS:
(1) Consensual
(2) Reciprocal
(3) Nominate
(4) Onerous
(5) Accessory (a prior conflict is presupposed)
(6) Once accepted, it is binding on the parties, provided there is no vitiated consent
(7) Principally settlement of a controversy; Incidentally settlement of a claim.
KINDS:
(1) JUDICIAL to end a pending litigation
(2) EXTRAJUDICIAL to prevent a litigation from arising
Article 2029. The court shall endeavor to persuade the litigants in a civil case to agree upon some fair compromise.
(1) Duty of the Court to Persuade Litigants to Compromise
REASON: litigation must, if possible, be avoided or minimized.
(2) Right of Attorney to Compromise for His Client
* The Rules of Court require a special authority before a attorney can compromise in behalf of his client.
- Written Authority
- Oral Authority must be duly established by evidence other than self-serving assertion of counsel himself that such
authority had been given to him orally.
Article 2030. Every civil action or proceeding shall be suspended:
(1) If willingness to discuss a possible compromise is expressed by one or both parties; or
(2) If it appears that one of the parties, before the commencement of the action or proceeding, offered to discuss a
possible compromise but the other party refused the offer.
The duration and terms of the suspension of the civil action or proceeding and similar matters shall be governed by such
provisions of the rules of court shall likewise provide for the appointment and duties of amicable compounders.
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While postponements must be discouraged, still they can be allowed when the parties are trying to reach an
amicable settlement.

This article does not include offers to arbitrate.

It refers only to a compromise, upon terms that the court can ascertain and determine if they are reasonable.

A compromise could dispense with a trial; but an arbitration would merely prolong the case, since the arbiters
decision would remain appealable.

Article 2031. The courts may mitigate the damages to be paid by the losing party who has shown a sincere desire for
compromise.
Art. 2032. The courts approval is necessary in compromises entered into by guardians, parents, absentees
representatives, and administrators or executors of decedents estates.
OTHER RULES:
1) An agent needs a special power to compromise. (Art 1878, CC)
2) If an attorney is not authorized by the client, he cannot compromise his clients claim. Unless, the client fails to
repudiate promptly the act after knowing of it, in which case the client will be in estoppel.
3) Art 225 of the Family Code, does not give the widow the authority as the legal administratix to compromise the children
under parental authority claims for indemnity arising from the from their fathers death.
Art 2033. Juridical persons may compromise only in the form and with the requisites which may be necessary to alienate
their property.
RULES FOR COMPROMISE ENTERED INTO BY JURIDICAL PERSONS
a. A corporation may compromise thru authority granted by the Board of Directors.
b. The Municipal Council can also compromise provided that the legal requirements for the alienation of property are
complied with, and provided further that the provincial approves the compromises.
Art 2034. There may be a compromise upon the civil liability arising from an offense, but such compromise shall not
extinguish the public action for the imposition of the legal penalty.
Generally, No Compromise on Criminal Aspect
If a crime has been committed, there can be a compromise on the civil liability but not on the criminal liability. When
Compromise is allowed In some crimes, there can be a sort of compromise as in the case of crimes against chastity and
violations of the Internal Revenue Code.

In a civil case, the compromise must be entered into before or during litigation, never after final judgment.

The compromise during litigation may even be in the form of a confession of judgment.

Art 2035. No compromise upon the following questions:


(1) The civil status of persons;
(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future support
(5) The jurisdiction of courts;
(6) Future legitime.
CIVIL STATUS
Civil status is a term used mostly by government bodies or organizations to show a person's status as a citizen. These
may include your marriage, birth or death status and records.
MARRIAGE/LEGAL SEPARATION
Marriage is a special contract of permanent union between a man and a woman entered into in accordance with law for
the establishment of conjugal and family life. It is the foundation of the family and an inviolable social institution whose
nature, consequences, and incidents are governed by law and not subject to stipulation, except that marriage settlements
may fix the property relations during the marriage within the limits provided by this Code. (52a) Article 1, Family Code
Legal separation is a decree from the court permitting the husband and the wife to live separately from each other.

GROUNDS FOR LEGAL SEPARATION


(1) Repeated physical violence or grossly abusive conduct directed against the petitioner, a common child, or a child of
the petitioner;
(2) Physical violence or moral pressure to compel the petitioner to change religious or political affiliation;
(3) Attempt of respondent to corrupt or induce the petitioner, a common child, or a child of the petitioner, to engage in
prostitution, or connivance in such corruption or inducement;
(4) Final judgment sentencing the respondent to imprisonment of more than six years, even if pardoned;
(5) Drug addiction or habitual alcoholism of the respondent;
(6) Lesbianism or homosexuality of the respondent;
(7) Contracting by the respondent of a subsequent bigamous marriage, whether in the Philippines or abroad;
(8) Sexual infidelity or perversion;
(9) Attempt by the respondent against the life of the petitioner; or
(10) Abandonment of petitioner by respondent without justifiable cause for more than one year.
For purposes of this Article, the term "child" shall include a child by nature or by adoption. (9a) Article 55, Family Code
JURISDICTION OF COURTS
Refers to the power of a court to hear and determine a case. Jurisdiction of courts over the subject matter cannot be
considered by the parties. Upon the other hand, parties cannot be deprive a court of its jurisdiction.
Art. 2039. When the parties compromise generally on all differences which they might have with each other, the discovery
of documents referring to one or more but not to all of the questions settled shall not itself be a cause for annulment or
rescission of the compromise, unless said documents have been concealed by one of the parties.
But the compromise may be annulled or rescinded if it refers only to one thing to which one of the parties has no right, as
shown by the newly-discovered documents.
Effect of Discovery of Documents Referring to Matters Compromised Upon
(a) The first paragraph refers to a compromise on ALL differences; the second, to a compromise on one thing. The effect
of the discovery of the documents is set forth in the Article.
Art. 2040. If after a litigation has been decided by a final judgment, a compromise should be agreed upon, either or both
parties being unaware of the existence of the final judgment, the compromise may be rescinded.
Ignorance of a judgment which may be revoked or set aside is not a valid ground for attacking a compromise.
(1) Compromise Entered Into in Ignorance of a Final Judgment
A compromise in a case like this may be RESCINDED. The ignorance of the judgment may have been on the part of one
party or on the part of both parties.
(2) Reason for Allowing a Rescission
Here, there was no more need for the compromise in view of the existence of the fi nal judgments. (See Rovero v.
Amparo, et al., 91 Phil. 228).
(3) Effect of Appeal
If a judgment is rendered but appealed, there can in the meantime be a compromise.
Art. 2041. 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.
(1) Effect if Compromise Agreement Is Not Fulfilled
(a) enforce the compromise;

(2) No Necessity for Judicial Rescission


Under this Article, there is no necessity for a judicial declaration of rescission, for the party aggrieved may regard the
compromise agreement as already rescinded. (Leonor v. Sycip, L-14220, Apr. 29, 1961).
(3) No Rescission After Benefi ts are Enjoyed
Art. 2042. The same persons who may enter into a compromise may submit their controversies to one or more arbitrators
for decision.
Definition:
Arbitration is the process whereby by mutual agreement a third party decides a dispute between two persons.
Arbitration vs. Compromise
In Arbitration, a third party gives the solution; in compromise, the decision is arrived at by the parties concerned.
Art. 2043. The provisions of the preceding Chapter upon compromises shall also be applicable to arbitrations.
the articles on compromise (chapter I) apply to arbitration also.
Art. 2044. Any stipulation that the arbitrators award or decision shall be final, is valid, without prejudice to Articles 2038,
2039, and 2040.
Art. 2045. Any clause giving one of the parties power to choose more arbitrators than the other is void and of no effect.
Art. 2046. The appointment of arbitrators and the procedure for arbitration shall be governed by the provisions of such
rules of court as the Supreme Court shall promulgate.