6/5/2020 E-Library - Information At Your Fingertips: Printer Friendly The primordial issue for the Court's resolution is whether or not the CA correctly dismissed the certiorari petition on the basis of the compromise agreement between the parties. Otherwise stated, the issue is whether or not the execution of the Satisfaction of Judgment between the parties rendered the certiorari proceedings before the CA moot and academic. The Court's Ruling The petition is meritorious. A compromise agreement is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.[44] To be considered valid and binding between the contracting parties, a compromise agreement must be: (a) not contrary to law, morals, good customs, public order, and public policy; (b) freely and intelligently executed by and between the parties; and (c) compliant with the requisites and principles of contracts.[45] Once entered into, it has the effect and the authority of res judicata upon the parties.[46] In other words, a valid compromise agreement may render a pending case moot and academic. However, the parties may opt to put therein clauses, conditions, and the like that would prevent a pending case from becoming moot and academic - such as when the execution of such agreement is without prejudice to the final disposition of the said case. After all, a compromise agreement is still a contract by nature, and as such, the parties are free to insert clauses to modify its legal effects, so long as such modifications are not contrary to law, morals, good customs, public order, or public policy.[47] In the instant case, it is undisputed that the parties had entered into a Satisfaction of Judgment signifying that petitioners had already given Pelagio the amount of P3,313,772.00 as full and complete satisfaction of the NLRC ruling. While this document may be properly deemed as a compromise agreement, it is conditional in nature, considering that it is without prejudice to the certiorari proceedings pending before the CA, i.e., it obliges Pelagio to return the aforesaid proceeds to petitioners should the CA ultimately rule in the latter's favor. In Leonis Navigation Co., Inc. v. Villamater[48] (Leonis Navigation), the Court held that such an agreement will not render a pending case moot and academic as it does not preclude the employer from recovering from the employee should the courts ultimately decide in favor of the former, to wit: Simply put, the execution of the final and executory decision or resolution of the NLRC shall proceed despite the pendency of a petition for certiorari, unless it is restrained by the proper court. In the present case, petitioners already paid Villamater's widow, Sonia, the amount of P3,649,800.00, representing the total and permanent disability award plus attorney's fees, pursuant to the Writ of Execution issued by the Labor Arbiter. Thereafter, an Order was issued declaring the case as "closed and terminated." However, although there was no motion for reconsideration of this last Order, Sonia was, nonetheless, estopped from claiming that the controversy had already reached its end with the issuance of the Order closing and elibrary.judiciary.gov.ph/thebookshelf/showdocsfriendly/1/61185 4/12