This provision concerns proceedings initiated at a mandatory/simple conference in the initial stage of the dispute. This provision should apply to the procedure preceding the execution of the conference, for which the procedure for authorising a waiver after a final judgment is not defined. There is no reason to distinguish between mandatory/conciliation procedures and those of pre-enforcement conferences. “It is argued that the parties to a case may compromise on even a final judgment of a court, and x x x x asserts that the reassessment ordered by the Commissioner of Customs and sanctioned by the Ministry of Finance was approved by Section 1369 of the [Revised Administrative Code]. The allegation may be correct with respect to private parties who own the subject matter of the dispute and who are therefore free to do as they see fit or what is attributed to them, even to the extent that they waive the arbitral award or tolerate the obligation imposed by the judgment of the opposing party. That is not the case here. In this respect, the Commissioner of Customs is not a private party or the owner of the money who participates in the fine on the basis of the initial assessment. He is a mere agent of the government and acts as a trustee of money or property in his hands or on the basis of a favorable judgment. Unless expressly authorized by his contracting authority or by law, he is not entitled to accept anything or less than what is decided in favor of the government. `33 (Types printed in bold) The court recalls, however, that in the omnibus order of 19 May 2008, Judge Dumayas Solar Team had ordered that the amount of P2,000,000.00, which constitutes lump sum compensation for the non-withdrawal of the complaint, be filed with the Office of the Clerk of the Regional Trial Court of Makati City, who had filed it against the team image. Judge Dumayas added that the amount will only be released after [Team Image and Co]`s commitments under the compromise agreement have been finally determined and after the issue of [Solar Team`s] breach of the same agreement has been definitively resolved for its failure to [withdraw the complaint in the intervention].114 The Decision of the Court of Appeal was a serious misuse of powers for Judge Dumayas, keep the P2.000.000,00 to custodia legis. After approval, a judgment on a special agreement is enforced immediately, not even challenged.115 The order to file P2,000,000.00 in the Office of the Clerk of Court effectively suspended the enforcement of an enforceable judgment immediately.
It is very irregular. Such a deposit is not permitted anywhere in the law or in the judicial order. The benefits of a compromise agreement appear to be recognized by the NLRC in its rules of procedure. In the context of the procedure for the enforcement of a final award, the parties to the trial must participate in a pre-execution conference on matters relevant to enforcement42 In the conference, any agreement that would govern the final judgment in a certain way is necessarily a compromise. For one obligation by another to be extinguished, the law requires one of these two conditions: (1) the replacement is clearly declared or (2) the old and new obligations are incompatible in every respect.45 A compromise of a final judgment appears as a novation of the obligation to judge if one of the two conditions is met.46 In the present case, the incompatibility of the final judgment with the compromise agreement is obvious: Because the latter has just been touched to replace the former. There is no justification for banning a compromise agreement simply because it was reached following a final judgment. The validity of the contract is determined by compliance with the requirements and principles of the contracts and not by the date of conclusion of the contract. . . .