PARAISO V. CA (CIVIL, REMEDIAL)

For a writ of certiorari to issue, the applicant must show that the court or tribunal acted with grave abuse of discretion in issuing the challenged order. Grave abuse of discretion is defined as such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be grave, as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of law.

In the instant case, the appellate court gravely abused its discretion in disapproving the compromise agreement for the simple reason that respondent dis not comply with the CA's resolutions requiring it to explain the apparent formal defect in the agreement. The Court notes that the appellate court unnecessarily focused its attention on the defects in the form of the compromise agreement when these flaws in formality do not go into the validity of the parties' contract, and more importantly, when none of the parties assails its due execution.

To elucidate, the absence of a specific date does not adversely affect the agreement considering that the date of execution is not an essential element of a contract. A COMPROMISE AGREEMENT is essentially a contract perfected by mere consent, the latter being manifested by the meeting of the offer and the acceptance upon the thing and the case which are to constitute the contract. The CA should have allowed greater laxity in scrutinizing the compromise agreement, not only because the absence of a specific date is a mere formal defect, but also because the signatories to the compromise indicated the date when they signed the agreement beside their signatures. These signatories are also sufficiently authorized to enter into a compromise by the respective board of directors of the petitioner and the respondent. It is not amiss to state at this point that in National Commercial Bank of Saudi Arabia v. CA, we approved an undated compromise agreement.