G.R. No.

L-10551 March 3, 1917

IGNACIO ARROYO, plaintiff-appellant
Vs.
ALFRED BERWIN, defendant-appellee

Facts:
o Ignacio Arroyo, the plaintiff, and Alfred Berwin, the defendant, both reside in
Iloilo, Philippines.
o The defendant, Alfred Berwin, a procurador judicial in the law office of Attorney
John Bordman, represented Marcela Juaneza in the justice of peace court of
Iloilo. The latter was charged with theft, which was filed by the plaintiff, Ignacio
Arroyo. Marcela Juaneza lost in the case but appealed to the Court of First
Instance of Iloilo.
o On the day of the hearing of the appeal, with the presence of Roque Samson,
Berwin asked Arroyo to drop the case under the following conditions:
(1) That Marcela Juaneza will recognize the plaintiff’s ownership in the land
where his said client ordered the cane cut, which land and which cane cut
are referred to on the cause for theft
(2) That the plaintiff, Ignacio Arroyo, should obtain a Torrens title of the said
land
(3) That Marcela Juaneza would not oppose to the application of registration
filed buy he plaintiff, Ignacio Arroyo
(4) Provided that the plaintiff would ask the prosecuting attorney to dismiss the
case against Marcela Juaneza and Alejandro Castro
o The plaintiff, Ignacio Arroyo, complied with the agreement and the case was
dismissed. However, the defendant, Alfred Berwin, did not wish to comply with
the said agreement. Arroyo sent a written contract to Berwin to be signed by his
client, Marcela Juaneza, but the document was never returned despote of the
demands.
o The plaintiff, Ignacio Arroyo, appealed to the court that a judgment should be
rendered ordering the defendant to comply with the agreement stated in the
contract.
o The complaint was dismissed and the plaintiff lost under the grounds that the
alleged contract was illegal.

Issue:
May the defendant, Alfred Berwin, be compelled to abide by the agreement?

Held:
o No. An agreement to hinder the prosecution of a person charged with theft in
exchange for money of valuable consideration is contrary to the public policy
and due administration of justice. It is of great importance that the criminals be
prosecuted and be complied with the criminal proceedings prescribed by law. To
 permit an offender to escape the penalties for the purchase of immunity from
public individuals will result in a distortion of justice.
o Under Articles 1255 and 1275 of Civil Code, an agreement should not be in
contravention of law, morals or public order and that contracts with anything
illicit or unlawful will have no effect, respectively.
o The court favored the defendant, Alfred Berwin, with costs against the plaintiff,
Ignacio Arroyo.

Ratio Decidendi:
o The case given involves an alleged agreement stipulated between the plaintiff
and the defendant. The defendant, Alfred Berwin, serves as a court
representative for Marcela Juanez who is indicted with theft. During the day of
the hearing for the appeal, the defendant requested the plaintiff to dismiss the
case under certain conditions. The plaintiff agreed and dropped the case as per
their consensus. However, the defendant declined to agree with the contract
and did not return the written document the plaintiff sent to be signed by his
client. The latter appealed to court and seek that the court would order the
former to comply with the agreement. However, the court of justice favored the
defendant.
o Article 1306 of the New Civil Code (Article 1255 of Old Civil Code) states that:
The contracting parties may establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided they are not contrary to law,
morals, good customs, public order, or public policy.
o The act of extinguishment of criminal case in exchange for money or other
modes is considered unlawful because every offender is entitled to be
prosecuted and to undergo due process.
o Article 1352 of the New Civil Code (Article 1275 of Old Civil Code) states that:
Contracts without cause, or with unlawful cause, produce no effect whatever.
The cause is unlawful if it is contrary to law, morals, good customs, public order
or public policy.
o This means that contracts that are contradictory of the law, morals, good
customs, public order or public policy are invalid and therefore regarded as
impotent.
o