TRUISM: A BONA FIDE COMPROMISE AGREEMENT IS A VALID CONTRACT (G.R. No. 119310, ESGUERRA v. CA)

‘Petitioner insists that had she been consulted in the sale of Esguerra Building II, better terms could have been obtained. This is plainly without legal basis since she already consented to the compromise agreement which authorized VECCI to sell the properties without the requirement of prior consultation with her. It is a long established doctrine that the law does not relieve a party from the effects of an unwise, foolish, or disastrous contract, entered into with all the required formalities and with full awareness of what he was doing. Courts have no power to relieve parties from obligations voluntarily assumed, simply because their contracts turned out to be disastrous deals or unwise investments. It is a truism that a compromise agreement entered into by party-litigants, when not contrary to law, public order, public policy, morals, or good custom is a valid contract which is the law between the parties themselves. It follows, therefore, that a compromise agreement, not tainted with infirmity, irregularity, fraud or illegality is the law between the parties who are duty bound to abide by it and observe strictly its terms and conditions as in this case. Incidentally, private respondent Sureste Properties, Inc. submits that the petitioner offered to buy her one-half share for only P75,000,000.00, not P80,000,000.00.[18] She therefore valued the whole building only at P150,000,000.00 which amount is P10,000,000.00 less than the price of P160,000,000.00 paid by private respondent, the highest offer the market has produced in two and a half years the building was offered for sale. Even the 5% real estate brokers commission was not disparate with the standard practice in the real estate industry….’