Heirs of Aying v. Aznar Brothers Realty Co.

FIRST DIVISION

[G.R. Nos. 232203-04. September 29, 2021.]

HEIRS OF EMILIANO AYING REPRESENTED BY SEVERINO S. AYING and HEIRS OF SIMEON AYING REPRESENTED BY ALMA AYING-DAÑO, petitioners,vs. AZNAR BROTHERS REALTY COMPANY, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution dated September 29, 2021 which reads as follows:

"G.R. Nos. 232203-04 — Heirs of Emiliano Aying represented by Severino S. Aying and Heirs of Simeon Aying represented by Alma Aying-Daño v. Aznar Brothers Realty Company

We affirm.

Section 5, Rule 39 of the 1997 Rules of Civil Procedure provides:

Section 5. Effect of reversal of executed judgment. — Where the executed judgment is reversed totally or partially, or annulled, on appeal or otherwise, the trial court may, on motion, issue such orders of restitution or reparation of damages as equity and justice may warrant under the circumstances.

In Urban Bank, Inc. v. Peña, 1 the Court held that although execution pending appeal is sanctioned under the rules and jurisprudence, when the executed decision is reversed, the premature execution is considered to have lost its legal bases. The situation necessarily requires equitable restitution to the party prejudiced thereby.

Here, there is no dispute that due to the reversal of the trial court's Decision dated July 4, 1997, its execution pending appeal was vacated. Consequently, respondent Aznar Brothers Realty Company must return the portion of the property legally pertaining to petitioners Heirs of Emiliano Aying represented by Severino S. Aying and Heirs of Simeon Aying represented by Alma Aying-Daño. The parties though must consider that the property in the meantime had already moved to the hands of innocent third parties, in which case, physical reversion of the property is no longer possible. In lieu thereof, reparation for damages must be awarded. Thus, we focus on how much should be awarded by way of reparation for damages.

Aranda v. Court of Appeals2 instructed:

When a judgment is executed pending appeal and subsequently overturned in the appellate court, the party who moved for immediate execution should, upon return of the case to the lower court, be required to make specific restitution of such property of the prevailing party as he or any person acting in his behalf may have acquired at the execution sale. If specific restitution becomes impracticable, the losing party in the execution becomes liable for the full value of the property at the time of its seizure, with interest.3 (Emphasis supplied)

"At the time of its seizure" here means the date when execution pending appeal was granted by the trial court via Special Order dated August 4, 1997.

Notably, the trial court fixed the reparation for damages here as P25,098,824.33. First, it added the parties' respective offers: P4,466.66 per sq.m. (petitioner), P233.07 per sq.m. (Sta. Lucia), P1,000 per sq.m. (respondent), plus its own valuation of P6,000 per sq.m. The total is 11,699.73. Second, it divided this amount by four (4) to get the average which is P2,924.43. Finally, it multiplied P2,924.43 by 8,581 (representing petitioners' 2/8 share). The end product is P25,098,824.33, the valuation applied by the trial court. CAIHTE

As it was, though, the Court of Appeals rejected this valuation for lack of legal and factual basis. For there is absolutely no evidence on record showing the value of the property as of August 4, 1997 when execution pending appeal was granted by the trial court.

In Evergreen Manufacturing Corporation v. Republic, 4 the Court rejected the amount fixed as just compensation because it did not reflect the value of subject properties at the time of taking.

In that case though, the Court ruled that while remanding the case to receive evidence would enable the trial court to clearly determine the amount of just compensation at the time of taking, it would be prejudicial to both parties as it would further delay an already over two (2) decade old protracted litigation. Thus, the Court opined that making its own finding of just compensation based on available records would be most beneficial to both parties concerned. 5

We will do the same thing here "as equity and justice may warrant under the circumstances" in accordance with Section 5, Rule 39 of the Rules of Court. 6

On this score, we find the disquisition of the Court of Appeals to be in order, thus:

Since there appears to be no sufficient documentary evidence on record showing the value of the disputed property corresponding to the year 1997 when the execution pending appeal was granted, the Court is constrained to refer to the zonal values of the BIR with respect to real properties located in Dapdap, Lapu-Lapu City in August 1997.

According to the BIR's official website, Revenue District Office (RDO) No. 80 (Mandaue City) under Revenue Region No. 13 (Cebu City) is composed of several cities and municipalities including Lapu-Lapu City. The Court takes judicial notice that under Department Order (DO) No. 108-95 effective 11 October 1995, the first revised zonal values of real properties located along Dapdap Beach Road classified as residential regular are worth Php250 per square meter. Since the BIR is under the supervision and control of the Department of Finance (DOF) which belongs to the executive department of the government, official acts thereof can be taken judicial notice of under Section 1, Rule 129 of the Rules of Court. Significantly, DO No. 108-95 was effective from 11 October 1995 to 22 June 1998, thereby making it the applicable basis for the computation of the full value of the Aying heirs' share in the subject property. Hence, based on the aforesaid zonal value of Php250 per square meter, the Aying heirs are entitled to Php2,145,250 as reparation of damages for the 2/8 portion awarded to them, with interest at the rate of 6% per annum counted from the time the execution pending appeal was granted until full payment herein. 7

Undeniably, the Court of Appeals only used veritable and objective data in fixing the amount of reparation for damages here. These data refer to the zonal valuation of the property of P250.00 per sq.m. in 1997 or at the time the execution pending appeal was granted multiplied by 8,581 (petitioners' share in the property) equivalent to P2,145,250.00. This amount is both equitable and just.

Interest

Nacar v. Gallery Frames8 decrees that in the absence of express stipulation regarding the interest rate, the twelve percent (12%) interest rate per annum stated in Eastern Shipping Lines v. Mercantile Insurance Company, Inc.9 applies until June 30, 2013. From July 1, 2013, the new interest rate of six percent (6%) per annum shall apply, pursuant to BSP-MB Circular No. 799. Thus:

I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of recoverable damages.

II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:

1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages, except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.

3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2 above, shall be 6% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.

Applying Nacar, twelve percent (12%) legal interest per annum shall be imposed on Two Million One Hundred Forty-Five Thousand Two Hundred Fifty Pesos (P2,145,250.00) reckoned from August 4, 1997 when the motion for execution pending appeal was approved until June 30, 2013. Thereafter, or beginning July 1, 2013, the amount shall earn six percent (6%) legal interest per annum, until fully paid. Further, the total monetary award due shall earn six percent (6%) legal interest per annum from finality of this Resolution until fully paid. DETACa

WHEREFORE, the petition is PARTLY GRANTED. The assailed Decision dated September 30, 2016 and Resolution dated May 31, 2017 of the Court of Appeals in CA-G.R. SP Nos. 07367 and 07381 are AFFIRMED with MODIFICATION.

Respondent Aznar Brothers Realty Company is ORDERED to pay petitioners Heirs of Emiliano Aying, represented by Servando S. Aying and Heirs of Simeon Aying, represented by Alma Aying-Daño Two Million One Hundred Forty-Five Thousand Two Hundred Fifty Pesos (P2,145,250.00) as reparation for damages.

A twelve percent (12%) legal interest per annum is imposed on this amount reckoned from August 4, 1997 when execution pending appeal was granted until June 30, 2013; and from July 1, 2013, six percent (6%) legal interest per annum, until fully paid.

The total monetary award shall further earn six percent (6%) legal interest per annum from finality of this Resolution until fully paid.

SO ORDERED."

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

By:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

 

Footnotes

1. 675 Phil. 474, 578 (2011).

2. 264 Phil. 833 (1990).

3.Id. at 839.

4. 817 Phil. 1048, 1062 (2017).

5.Id. at 1063-1064.

6. Section 5. Effect of reversal of executed judgment. — Where the executed judgment is reversed totally or partially, or annulled, on appeal or otherwise, the trial court may, on motion, issue such orders of restitution or reparation of damages as equity and justice may warrant under the circumstances.

7.Rollo, p. 59.

8. 716 Phil. 267, 282-283 (2013).

9. 304 Phil. 236, 252-254 (1994).