Chiquita Brands, Inc. v. Omelio, G.R. No. 189102

June 7, 2017
G.R. No. 189102
CHIQUITA BRANDS, INC. and CHIQUITA BRANDS INTERNATIONAL, INC., Petitioners

vs.
HON. GEORGE E. OMELIO, REGIONAL TRIAL COURT, DAVAO CITY, BRANCH 14, SHERIFF ROBERTO C.
ESGUERRA, CECILIO G. ABENION, and 1,842 OTHER PLAINTIFFS IN CIVIL CASE NO. 95-45, Respondents
FACTS:
On August 31, 1993, thousands of banana plantation workers from over 14 countries instituted class suits for
damages in the United States against 11 foreign corporations which includes the petitioner. The banana
plantation workers claimed to have been exposed to dibromochloropropane (DBCP), a pesticide used against
roundworms and threadworms that thrive on and damage tropical fruits such as bananas and pineapples as a
result, these workers suffered serious and permanent injuries to their reproductive systems. Unfortunately, the
United States courts dismissed the actions on the ground of forum non conveniens and directed the claimants
to file actions in their respective home countries.
Filipino claimants filed a complaint for damages against the same foreign corporations before the Regional
Trial Court in Davao City. Before pre-trial these foreign companies entered into a worldwide settlement in the
United States with all the banana plantation workers. The parties executed a document denominated as the
"Compromise Settlement, Indemnity, and Hold Harmless Agreement" (Compromise Agreement). The
Compromise Agreement provided, among others, that the settlement amount should be deposited in an escrow
account, which should be administered by a mediator. After the claimants execute individual releases, the
mediator shall give the checks representing the settlement amounts to the claimants' counsel, who shall then
distribute the checks to each claimant.
The RTC of Panabo approved the compromised agreement and dismissed the petition of the claimant. Several
claimants moved for the execution of the judgment on compromise but Chiquita, Dow, Occidental, Shell, and
Del Monte opposed the execution on the ground of mootness. They argued that they had already complied with
their obligation under the Compromise Agreement by depositing the settlement amounts into an escrow
account, which was administered by the designated mediator. Hence, there was nothing left for the court to
execute.Chiquita pointed out that the claimants' execution of individual quitclaims was an acknowledgement
that they had received their respective share in the settlement amount.
After dismissal of the civil claim the claimants moved for the execution of the compromise agreement. The
petitioner opposed the execution on the ground of mootness; they argued that they had already complied with
their obligation by depositing the settlement amount into an escrow account. However, RTC of Panabo granted
the motion for execution because there was no proof that they have fulfilled their obligation.
On May 2003 petitioner filed a motion to suspend the execution and be allowed to present evidence on their
behalf. During the hearing of the case, the claimants picketed outside the court room and accused the RTC
judge of Panabo as a corrupt official who delayed the execution. Petitioner requested for change of venue and
was granted.
The case was transferred and now under the jurisdiction of the RTC of Davao city. On July 2009, the RTC of
Davao city through Judge Omelio ordered the execution of the compromised agreement. Aggrieved by the
RTC’s decision, the petitioner filed for a petition for certiorari even without a prior appeal to the CA.
Petitioner allege that the respondent Judge committed grave abuse of discretion in issuing the writ of execution
and ordering them to directly pay each of the claimant contrary to the compromise agreement between
petitioner and claimant.
LEAGL ISSUE:
1. Whether the hierarchy of courts was violated when the petitioner filed for certiorari to the Supreme Court
without appealing first to the CA.
2. Whether or not Judge Omelio committed grave abuse of discretion.
RULING:
1. No. Under the principle of hierarchy or courts, direct recourse to the Supreme Court is improper because
Supreme Court is a court of last resort and must remain to be so in order for it to satisfactorily perform its
constitutional functions. Nonetheless, the invocation of the Supreme Court’s original jurisdiction to issue writs
of certiorari has been allowed in certain instances on the ground of special and important reasons clearly stated
in the petition, such as, 1. When dictated by public welfare and advancement of public policy, 2. When
demanded by broader interest of justice, 3. Where the challenged orders were patent nullities or 4. When
analogous exceptional and compelling circumstances called for and justified the immediate and direct handling
of the case.
The Supreme Court took cognizance of this case in the interest of judicial economy and efficiency. The records
of this case are enough for this Court to decide on the issues raised by the parties. Any further delay would
unduly prejudice the parties.
2. Yes. Courts can neither amend nor modify the terms and conditions of a compromise validly entered into by
the parties. In any case, a compromise validly entered has the authority and effect of res judicata as between
the parties. A writ of execution that varies the respective obligation of the parties under a judicially approved
compromise settlement is void. Under the judicially approved Compromise Agreement, petitioners are obliged
to deposit the settlement amount in escrow within 10 business days after they receive a signed Compromise
Agreement from the counsel of the claimants. There was nothing in the Compromise Agreement that required
petitioners to ensure the distribution of the settlement amount to each claimant. Petitioners' obligation under
the Compromise Agreement was limited to depositing the settlement amount in escrow. On the other hand, the
actual distribution of the settlement amounts was delegated to the chosen mediator, Mr. Mills.
Consequently, the Omnibus Order dated December 14, 2006, which directed the implementation of the Writ of
Execution, is likewise void. Ordinarily, courts have the ministerial duty to grant the execution of a final
judgment.230 The prevailing party may immediately move for execution of the judgment, and the issuance of
the writ follows as a matter of course.
A writ of execution may be stayed or quashed when "facts and circumstances transpire" after judgment has
been rendered that would make "execution impossible or unjust." the Compromise Agreement did not impose
solidary liability on the parties' subsidiaries, affiliates, controlled, and related entities, successors, and assigns
but merely allowed them to benefit from its effects. Thus, respondent Judge Omelio gravely abused his
discretion in holding that the petitioners' subsidiaries and affiliates were solidarily liable under the
Compromise Agreement. Furthermore, there is no reason for respondent court to pierce the veil of corporate
fiction. There is hardly any evidence to shew that petitioners abused their separate juridical identity to evade
their obligation under the Compromise Agreement.
Hence Judge Omelio committed grave abuse of discretion.
FALLO
WHEREFORE, the Petition for Certiorari is GRANTED. The assailed orders and writs are ANNULLED and
SET ASIDE for having been issued with grave abuse of discretion

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June 7, 2017

G.R. No. 189102

CHIQUITA BRANDS, INC. and CHIQUITA BRANDS INTERNATIONAL, INC., Petitioners

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