THIRD DIVISION
[G.R. No. 242586. May 12, 2021.]
DENNIS CHAN, petitioner,vs. RHH CONSTRUCTION SUPPLY, REP. BY ROSITA D. CHUA, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution datedMay 12, 2021, which reads as follows:
"G.R. No. 242586 (Dennis Chan v. RHH Construction Supply, rep. by Rosita D. Chua). — This resolves the Petition for Review on Certiorari1 under Rule 45 of the Rules of Court of petitioner Dennis Chan (petitioner), seeking to reverse and set aside the Decision 2 dated November 23, 2017 and the Resolution 3 dated September 11, 2018, both of the Court of Appeals (CA) in CA-G.R. SP No. 148628.
The factual antecedents are as follows:
Private respondent Rosita D. Chua (respondent) is the registered owner of RHH Construction, a single proprietorship engaged in the construction business. RHH Construction was awarded a contract by the local government of Santiago City to install streetlights along its major thoroughfares and national road. After completion of the project, the city government issued a Land Bank of the Philippines (LBP) check with No. E-0000181189, for P2,980,406.76 payable to RHH Construction. Respondent instructed her liaison officer, Joselito De la Cruz (De la Cruz) to pick up the LBP check and deliver it to her. However, De la Cruz did not comply as instructed. Instead, he gave it to one Ronald Matawaran (Matawaran), who negotiated the same to herein petitioner. Thereafter, petitioner deposited the LBP check to his account at Metropolitan Bank and Trust Company (Metrobank) City Road Branch. 4
Alarmed by the explicable delay in the delivery of her check, respondent circulated a letter among the banks within her locality, informing them of the situation. Upon receipt of respondent's letter, Metrobank advised her of the LBP check that petitioner recently deposited and ordered the immediate freezing of the latter's account. Constrained by these circumstances, respondent filed an Action for Specific Performance with Damages and prayer for the issuance of a Writ of Preliminary Injunction and Temporary Restraining Order raffled to the sala of Judge Anastacio D. Anghad (Judge Anghad). 5
After trial on the merits, the court a quo, through Judge Anghad, rendered a Decision 6 dated April 27, 2007, the dispositive portion of which reads as follows:
WHEREFORE, JUDGMENT IS HEREBY RENDERED AS FOLLOWS:
1. Ordering defendant Metropolitan Bank and Trust Company to pay plaintiff [herein private respondent] Two Million Nine Hundred Eighty Thousand Four Hundred Six Pesos and [Seventy Six Cents] (P2,980,406.76), the money value of LBP check No. E-0000181189, with interest thereon reckoned from June 30, 2004, at 12% per annum, until fully paid;
2. Directing defendants Joselito dela Cruz, Dennis Chan (herein petitioner) and Metropolitan Bank and Trust Company, jointly and severally, to pay plaintiff the following:
2.a. Attorney's fees in the amount of Php250,000.00;
2.b. Expenses of litigation in the amount of Php300,000.00;
2.c. Moral damages in the amount of Php1,500,000.00 and
2.d. Exemplary damages in the amount of P500,000.00.
xxx xxx xxx
SO ORDERED. 7
However, in a Resolution 8 dated October 24, 2007, the court a quo modified its earlier Decision in this wise:
With these special reasons cited by the Court, it now grants plaintiff's [herein private respondent] prayer for the execution of the Decision dated April 27, 2007 pending appeal, but subject to the modifications herein shown namely:
1. Ordering Metrobank to release/deliver to Plaintiff [herein private respondent] the amount of Php2,980,406.76 representing the value of the Land Bank of the Philippines Check No. E-0000181189, with the legal rate of interest to be paid by "Chan." x x x. 9
De la Cruz and petitioner questioned the aforementioned Decision and Resolution before the CA. On December 6, 2012, the CA affirmed the assailed Decision dated April 27, 2007 and Resolution dated October 24, 2007 of the court a quo with respect to the obligation imposed on petitioner to pay interest at the rate of 12% per annum. The case was elevated to the Court, which affirmed the Decision of the CA by Resolution dated June 16, 2014. Per entry of judgment issued by the Court, the said Resolution became final and executory on January 21, 2015. 10
As a result of these antecedents, respondent filed a Motion for the issuance of a Writ of Execution to Implement the Decision and Resolution of the court a quo that the CA and the Court both affirmed. The motion included an ex-parte manifestation of the computation of the legal rate of interest awarded, which amounted to P10,819,708.82, prepared by the accountant of respondent. 11
On January 5, 2016, the court a quo, through Judge Anghad, issued an Order, 12 directing petitioner, among others, to pay the computed legal rate of interest at 12% per annum. Consequently, the court a quo issued a Writ of Execution on January 20, 2016. 13
On January 25, 2016, petitioner filed a Motion for Reconsideration, 14 contending, among others, that the 12% interest imposed by the court a quo should be computed at the rate of 6% per annum as the obligation created therein was not a loan or forbearance of money. Finding no merit in petitioner's arguments, the court a quo nevertheless modified the legal interest to 6% per annum in its Writ of Execution dated January 20, 2016 and Order dated January 5, 2016, in view of the enactment of Central Bank Circular No. 799, as mentioned in the case of ECE Realty and Dev't, Inc. v. Hernandez, 15 which petitioner cited. 16
On April 15, 2016, the Regional Trial Court (RTC), through Judge Anghad, issued a Resolution, 17 granting petitioner's Motion for Reconsideration, the penultimate portion of which reads:
Therefore, the defendant is ordered to pay the plaintiff RHH, thru its representative Rosita D. Chua, the legal rate of interest at 6% per annum to be reckoned from the filing of this complaint until fully paid.
The rest of the dispositive portion of the decision in the modification issued by the Honorable Court of Appeals (sic) and the other dispositive portions of this Court's Decision dated 27 April 2007 shall remain as is.
SO ORDERED. 18
Private respondent filed a Motion for Reconsideration. However, Judge Anghad eventually inhibited himself from further resolving pending incidents of the case. Instead, he submitted the same for resolution to the RTC of Santiago City, Branch 36. 19
Ruling of the RTC
In a Resolution 20 dated July 27, 2016, the RTC, through Assisting Judge Ester L. Piscoso-Flor (Judge Flor) ruled that the July 1, 2013 cut-off date, the date when the prevailing interest rate was reduced from 12% per annum to 6% per annum, should be recognized. The dispositive portion of which reads:
WHEREFORE, the Motion for Reconsideration xxx is PARTLY GRANTED, in that the legal rate of interest to be paid thereon by "Chan" is twelve percent (12%) per annum from June 2004 until June 30, 2013, and six percent (6%) per annum from July 1, 2013 until fully paid.
xxx xxx xxx
SO ORDERED. 21
Dissatisfied, petitioner filed a Motion for Reconsideration 22 but such was denied. 23
Ruling of the CA
In a Decision dated November 23, 2017, the CA partly granted the petition, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing, the present Petition is PARTLY GRANTED. The Orders dated July 27, 2016 and August 31, 2016 issued by public respondents in Civil Case No. 36-3242, are hereby REVERSED AND SET ASIDE. The Decision dated April 27, 2007 and Resolution dated October 24, 2007 of Hon. Anastacio D. Anghad, Presiding Judge of RTC of Santiago City, Branch 36 in Civil Case No. 36-3242, with respect to the liability of petitioner Dennis Chan to pay interest at the rate of twelve percent (12%) per annum, is hereby AFFIRMED with MODIFICATION that the amount shall earn interest at the rate of six percent (6%) per annum, from the finality of this judgment until fully paid.
SO ORDERED. 24
The CA ruled that Judge Flor acted beyond the bounds of her jurisdiction when she reduced the interest rate imposed from 12% to 6% starting July 1, 2013. It held that, in effect, Judge Flor modified the terms of a final and executory judgment, which she was duty bound to implement. 25
Petitioner filed a Motion for Reconsideration, which was denied by the CA in a Resolution dated September 11, 2018 for lack of merit. 26
Hence, this petition raising this sole argument:
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RESOLUTION DATED OCTOBER 24, 2007 OF RESPONDENT RTC (WHICH BECAME FINAL AND EXECUTORY AS AFFIRMED BY THE COURT OF APPEALS AND THE SUPREME COURT WHICH SUBSTANTIALLY MODIFIED THE APRIL 27, 2007 DECISION BY MODIFYING THE FIXED RATE OF INTEREST OF "12% PER ANNUM" TO MERELY "LEGAL RATE OF INTEREST THEREON") STILL CARRIES THE SAME "FIXED RATE OF INTEREST" OF "12% PER ANNUM" TOTALLY IGNORING THE SAID SUBSTANTIAL MODIFICATION DELETING THE PHRASE "12% PER ANNUM" WHICH WAS REPLACED BY THE PHRASE "LEGAL RATE OF INTEREST THEREON" AND WHICH PHRASE IN THE SAID LATER ORDER WAS THE ONE WHICH BECAME FINAL AND EXECUTORY. 27
Our Ruling
The fundamental issue for the Court's resolution is whether the CA erred in applying the doctrine of immutability of a final and executory judgment.
In his Petition, petitioner maintains that it is the October 24, 2007 Resolution, directing him to pay the "legal rate of interest," which became final and executory by virtue of the Entry of Judgement issued by the Court. Petitioner further argues that the "legal rate of interest" should be pegged at 6% per annum since the aforesaid Resolution did not categorically state that the obligation he incurred is considered a forbearance of money that bears an interest rate of 12% per annum. Moreover, petitioner insists that the CA committed a reversible error when it applied the doctrine of immutability of a final and executory judgment on the erroneous assumption and ruling that the dispositive portion of the April 27, 2007 Decision and October 24, 2007 Resolution was changed by the application of the jurisprudence on legal rate of interest of 6% per annum. In addition, the first paragraph of the dispositive portion of the October 24, 2007 Resolution, which became final and executory, warrants the application of 6% per annum since what was ordered and stated therein was for petitioner to pay the "legal rate of interest thereon." 28
After a careful review of the records of the instant case, the Court affirms the findings of the CA. Thus, We deny the petition.
As correctly pointed out by the CA, it should be emphasized that the Decision dated April 27, 2007 and Resolution dated October 24, 2007, which imposed upon petitioner the obligation to pay interest at the rate of 12% per annum reckoned from June 30, 2004 until fully paid, has been affirmed by the CA and the Court, and an entry of judgment has been made as of January 21, 2015. Both the Court and the CA are convinced that the obligation incurred by petitioner is one that constitutes forbearance of money when they affirmed the imposition of the 12% interest rate. To consider the arguments raised by petitioner, that the rate of interest should only be 6% per annum is tantamount to asking the Court to review the case.
In People v. Santiago, 29 We ruled that:
Under the doctrine of finality of judgment or immutability of judgment, a decision that has acquired finality becomes immutable and unalterable, and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusion of fact and law, and whether it be made by the court that rendered it or by the Highest Court of the land. Any act which violates this principle must immediately be struck down. 30
More, in Republic v. Heirs of Cirilo Gotengco, n 31 the Court further explained the doctrine of immutability of judgment:
This is the principle of immutability of judgments — to put an end to what would be an endless litigation. Interest reipublicae ut sit finis litium. In the interest of society as a whole, litigation must come to an end.
Nonetheless, this tenet admits several exceptions. These include: (1) the correction of clerical errors; (2) the so-called nunc pro tunc entries, which cause no prejudice to any party; (3) void judgments; and (4) whenever circumstances transpire after the finality of the decision rendering its execution unjust and inequitable. 32
Based on the foregoing, the case does not fall within any of the aforesaid exceptions. The surrounding circumstances of the present case do not warrant the Court's exercise of its ultimate power to abandon the long-held standing rule of immutability of judgments. Hence, the Court affirms the Decision and Resolution of the CA.
In Sunfire Trading, Inc. v. Guy, 33 the Court reiterated:
[T]he Court views with disfavor the unjustified delay in the enforcement of the final orders and decision in this case. Once a judgment, becomes final and executory, the prevailing party should not be denied the fruits of their victory by some subterfuge devised by the losing party. 34
WHEREFORE, premises considered, the instant Petition for Review on Certiorari is DENIED. The Decision dated November 23, 2017 and the Resolution dated September 11, 2018, both of the Court of Appeals in CA-G.R. SP No. 148628 are hereby AFFIRMED.
SO ORDERED."
By authority of the Court:
(SGD.) MISAEL DOMINGO C. BATTUNG IIIDivision Clerk of Court
Footnotes
1.Rollo, pp. 12-20.
2.Id. at 24-32; penned by Associate Justice Edwin D. Sorongon, with Associate Justices Ramon R. Garcia and Maria Filomena D. Singh concurring.
3.Id. at 33-36.
4.Id. at 25.
5.Id.
6.Id. at 43-53.
7.Id. at 52-53.
8.Id. at 54-67.
9.Id. at 66.
10.Id. at 26-27.
11.Id. at 27.
12.Id. at 68-73.
13.Id. at 27.
14.Id. at 74-85.
15. 740 Phil. 789 (2014).
16.Rollo, p. 27.
17.Id. at 86-92.
18.Id. at 92.
19.Id. at 27.
20.Id. at 93-98.
21.Id. at 98.
22.Id. at 99-109.
23.Id. at 111-112.
24.Id. at 31.
25.Id. at 28-31.
26.Id. at 35.
27.Id. at 16.
28.Id. at 17-18.
29. G.R. No. 228819, July 24, 2019.
30.Id.
31. 824 Phil. 568 (2018).
32.Id. at 578.
33.Sunfire Trading, Inc. v. Guy, G.R. No. 235279, March 2, 2020.
34.Id.
n Note from the Publisher: Written as "Goternco" in the official document.