National Power Co. v. Macabangkit

FIRST DIVISION

[G.R. No. 230054. June 23, 2021.]

NATIONAL POWER CORPORATION, petitioner,vs. CEBU, BATOWA-AN, SAYANA, NASSER, MANTA, EDGAR, PUTRI, AND AMER, ALL SURNAMED MACABANGKIT [HEIRS OF MACABANGKIT SANGKAY], respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution dated June 23, 2021which reads as follows:

"G.R. No. 230054 (NATIONAL POWER CORPORATION, petitioner, v. CEBU, BATOWA-AN, SAYANA, NASSER, MANTA, EDGAR, PUTRI, AND AMER, all surnamed MACABANGKIT [HEIRS OF MACABANGKIT SANGKAY], respondents). — Although access to courts is guaranteed, it is not an unbridled right. Every litigation must eventually come to an end. To this end, the prevailing party should not be harassed by subsequent suits. For, if endless litigations were to be encouraged, then unscrupulous litigants will multiply to the detriment of the administration of justice. 1

This is a Petition for Review 2 dated April 3, 2017 filed by National Power Corporation (NAPOCOR) assailing the Decision 3 dated July 25, 2016 and the Resolution 4 dated February 8, 2017 issued by the Court of Appeals (CA) in CA-G.R. SP No. 05707-MIN which held NAPOCOR liable to pay the amount of P4,162,865.50 representing unpaid interest in connection with the award for just compensation in favor of Cebu, Batowa-An, Sayana, Nasser, Manta, Edgar, Putri, and Amer, all surnamed Macabangkit (Heirs of Macabangkit Sangkay) (private respondents).

Notably, the instant case is an off shoot of National Power Corporation v. Heirs of Macabangkit Sangkay (National Power Corp. v. Heirs Macabangkit of Sangkay) docketed as G.R. No. 165828, 5 which this Court had already settled in its Decision dated August 24, 2011, and which became final and executory on May 10, 2012.

Antecedents

Pursuant to Republic Act No. 6935, NAPOCOR proceeded to execute the Agus Hydroelectric Power Plant Project for the generation of electricity in Mindanao. The Project included the construction of underground tunnels for the diversion of the water flow from the Agus River to the hydroelectric plants. 6

Private respondents on the other hand, are co-owners of a parcel of land located in Ditucalan, Iligan City. Without their knowledge and consent, NAPOCOR in 1979 had constructed part of its underground tunnel on the subterrain area of the property, which was only later on discovered sometime in 1996. 7 This prompted private respondents to file on November 21, 1997 a Complaint for Damages, Recovery of Possession with an Alternative Prayer for Just Compensation 8 before the Regional Trial Court (RTC) of Lanao del Norte, Branch 01-Iligan City and docketed as Civil Case No. 4094. After trial, the RTC concluded that plaintiffs therein (herein private respondents) have established and proven the condemnation of their land located in Ditucalan, Iligan City by NAPOCOR, without the benefit of expropriation proceedings or the payment of any compensation and/or reasonable rental since 1979. However, considering that the matter of removal or dismantling of NAPOCOR's tunnel will adversely affect the Project which has a public purpose, the RTC found it proper instead that private respondents be paid just compensation. 9

In its Decision dated August 13, 1999, 10 as supplemented by the Supplemental Decision dated August 18, 1999, 11 the RTC directed and ordered NAPOCOR to pay private respondents just compensation, to wit:

WHEREFORE, premises considered:

1. The prayer for the removal or dismantling of defendant's tunnel is denied. However, defendant is hereby directed and ordered:

a) To pay plaintiffs land with a total area of 227,065 square meters, at the rate of FIVE HUNDRED (P500.00) PESOS per square meter, or a total of ONE HUNDRED THIRTEEN MILLION FIVE HUNDRED THIRTY TWO THOUSAND AND FIVE HUNDRED (P113,532,500.00) PESOS, plus interest, as actual damages or just compensation; Consequently, plaintiffs' land or properties are hereby condemned in favor of defendant National Power Corporation, upon payment of the aforesaid sum;

b) To pay plaintiff a monthly rental of their land in the amount of THIRTY THOUSAND (P30,000.00) PESOS from 1979 up to July 1999 with 12% interest per annum;

c) To pay plaintiffs the sum of TWO HUNDRED THOUSAND (P200,000.00) PESOS, as moral damages;

d) To pay plaintiffs the sum of TWO HUNDRED THOUSAND (P200,000.00) PESOS, as exemplary damages;

e) To pay plaintiffs, the sum equivalent to 15% of the total amount awarded, as attorney's fees, and to pay the cost.

SO ORDERED. 12

Unperturbed, NAPOCOR questioned the foregoing RTC Decision, eventually reaching this Court in National Power Corp. v. Heirs of Macabangkit Sangkay. 13

In the foregoing case, We agreed with the findings of both the RTC and the CA that there was indeed full taking by the State through NAPOCOR of the property of private respondents and that the latter were entitled to just compensation:

We agree with both the RTC and the CA that there was a full taking on the part of NPC, notwithstanding that the owners were not completely and actually dispossessed. It is settled that the taking of private property for public use, to be compensable, need not be an actual physical taking or appropriation. Indeed, the expropriator's action may be short of acquisition of title, physical possession, or occupancy but may still amount to a taking. Compensable taking includes destruction, restriction, diminution, or interruption of the rights of ownership or of the common and necessary use and enjoyment of the property in a lawful manner, lessening or destroying its value. It is neither necessary that the owner be wholly deprived of the use of his property, nor material whether the property is removed from the possession of the owner, or in any respect changes hands.

As a result, NPC should pay just compensation for the entire land. In that regard, the RTC pegged just compensation at P500.00/square meter based on its finding on what the prevailing market value of the property was at the time of the filing of the complaint, and the CA upheld the RTC.

xxx xxx xxx

We rule that the reckoning value is the value at the time of the filing of the complaint, as the RTC provided in its decision. Compensation that is reckoned on the market value prevailing at the time either when NPC entered or when it completed the tunnel, as NPC submits, would not be just, for it would compound the gross unfairness already caused to the owners by NPC's entering without the intention of formally expropriating the land, and without the prior knowledge and consent of the Heirs of Macabangkit. NPC's entry denied elementary due process of law to the owners since then until the owners commenced the inverse condemnation proceedings. The Court is more concerned with the necessity to prevent NPC from unjustly profiting from its deliberate acts of denying due process of law to the owners. As a measure of simple justice and ordinary fairness to them, therefore, reckoning just compensation on the value at the time the owners commenced these inverse condemnation proceedings is entirely warranted. 14 (Citations omitted)

In Our Decision in National Power Corp. v. Heirs of Macabangkit Sangkay, We affirmed with modification the lower court's ruling, the dispositive portion of which reads:

WHEREFORE, the Court AFFIRMS the decision promulgated on October 5, 2004 by the Court of Appeals, subject to the following MODIFICATIONS, to wit:

(a) Interest at the rate of 12% per annum is IMPOSED on the principal amount of P113,532,500.00 as just compensation, reckoned from the filing of the complaint on November 21, 1997 until the full liability is paid;

(b) The awards of P30,000.00 as rental fee, P200,000.00 as moral damages, and P200,000.00 as exemplary damages are DELETED; and

(c) The award of 15% attorney's fees decreed to be paid by National Power Corporation to the Heirs of Macabangkit is DELETED.

The Court PARTLY GRANTS the motion to register attorney's lien filed by Atty. Macarupung Dibaratun, and FIXES Atty. Dibaratun's attorney's fees on the basis of quantum meruit at 10% of the principal award of P113,532,500.00.

The motion to register attorney's lien of Atty. Manuel D. Ballelos is PARTLY GRANTED, and Atty. Ballelos is DECLARED ENTITLED TO RECOVER from Cebu, Batowa-an, Sayana, Nasser, Manta and Edgar, all surnamed Macabangkit, the amount of P5,000.00 as attorney's fees on the basis of quantum meruit.

Costs of suit to be paid by the petitioner.

SO ORDERED. 15

This Court's Decision in National Power Corp. v. Heirs of Macabangkit Sangkay became final and executory on May 10, 2012. 16

It appears however that despite the finality 17 of the foregoing Decision as early as May 10, 2012, the full satisfaction thereof has eluded private respondents.

Given the finality of this Court's Decision in National Power Corp. v. Heirs of Macabangkit Sangkay, the RTC issued a Writ of Execution 18 dated August 1, 2012 upon Motion of private respondents, directing NAPOCOR to pay the judgment amount including interest as of July 31, 2012, the amount of which was subsequently recomputed to P313,355,920.75. 19

On August 10, 2012, NAPOCOR filed a Motion to Quash the Writ of Execution with Manifestation 20 dated August 8, 2012, praying that the Writ of Execution be recalled and set aside until the issue on the transfer of ownership of the confiscated Subject Property in favor of NAPOCOR be settled. The Motion to Quash was eventually denied by the RTC in its Order 21 dated August 28, 2012.

NAPOCOR subsequently filed a Motion for Reconsideration 22 dated October 01, 2012 and a Supplemental to the Motion for Reconsideration 23 dated October 04, 2012, again praying that the Writ of Execution be recalled. In its Motion for Reconsideration, NAPOCOR argued that before a judgment debt can be executed against public funds, a claim for payment of the judgment debt must first be filed with the Commission on Audit (COA). The RTC denied the Motion in its Order dated November 20, 2012. 24

Thus, on January 30, 2013, Atty. Oscar Moreno, Jr., tendered with the RTC a BDO Check No. 169495 dated January 28, 2013, in the amount of P315,960,947.00. The BDO Check was subsequently deposited with the Land Bank of the Philippines-Iligan City Branch and was cleared on February 4, 2013. It was only on February 6, 2013 that the funds were eventually released to private respondents. 25

Thus, Sheriff Dianalodin M. Natangcop (Sheriff Natangcop) of the RTC issued a Sheriff's Return 26 dated February 7, 2013, stating therein that the Writ of Execution is being returned duly served and the judgment fully satisfied, to wit:

WHEREAS, on January 25, 2013, the undersigned reported that MERALCO is expected to immediately comply with the express order of the court to deliver the garnished amount in open court.

WHEREAS, on January 30, 2013, Atty. Oscar Moreno Jr., counsel of MERALCO Electric Company, appeared and tendered to this Court BDO Check No. 169495 dated January 28, 2013 in the amount of P315,960,947.00 in the name of RTC-OCC Clerk of Court, Iligan City.

WHEREAS, on the same date, said check was handed to RTC-OCC, Clerk of Court, Iligan City under official receipt no. 2359533R.

WHEREAS, on the afternoon of the same date, the office of the clerk of court deposited the same to Land Bank of the Philippines, Iligan City Branch but subject for clearing.

WHEREAS, the check is cleared for sufficiency of fund on February 4, 2013, and the plaintiffs was informed that the check is of sufficient fund and ready for distribution in accordance to the distribution plan submitted and approved by this court.

WHEREAS, MERALCO Electric Company complied with the order of this court and delivered the garnished amount as stated in the second notice of garnishment.

xxx xxx xxx

WHEREFORE, the Writ of execution is hereby returned DULY SERVED and FULLY SATISFIED.

xxx xxx xxx 27

In addition, Sheriff Natangcop likewise issued a Notice of Lifting of Notice of Garnishment 28 dated February 7, 2013, lifting and cancelling the Notice of Garnishment issued and served upon the properties of NAPOCOR.

Thereafter, private respondents filed a Very Urgent Manifestation and Motion 29 dated February 26, 2013, alleging that NAPOCOR's payment was only a partial satisfaction of the judgment debt and demanded for the payment of the deficiency. Private respondents argue that the BDO Check in the amount of P315,960,947.00 only covered the principal amount of the judgment debt and its interests as of September 30, 2012. Private respondents pointed out that the BDO Check was tendered with the RTC-Office of the Clerk of Court (RTC-OCC) and deposited on January 30, 2013. Accordingly, the amount tendered and deposited by NAPOCOR did not cover the interest that accrued from October 1, 2012 until January 20, 2013, the cut-off date as agreed upon by the parties. In addition, private respondent likewise demanded for the reimbursement of the deductions made by the RTC representing costs of the suit, i.e., office commissions in the amount of P9,478,926.40 and docket and deficiency fees in the amount of P703,378.60. 30

Ruling of the RTC

In its Order 31 dated April 23, 2013, the RTC after going over the arguments of the parties, ruled that the deposit and encashment of the BDO Check was insufficient to fully satisfy the judgment debt, to wit:

Prescinding from the legal arguments propounded by the parties in support of their separate contentions, this court is of the view that plaintiffs' contentions are impressed with merit.

As already laid down by the Decision of the Supreme Court itself, there is no dispute that the costs of the suit shall be shouldered by Napocor. As indeed provided by Rule 142, Section 10 (g) of the Rules of Court where no distinctions are given, recoverable costs include all the fees paid by the aggrieved winning party as a result of filing said suit to indicate his claims. Since this court has already taxed Plaintiffs the amount of P10,182,305.00 representing filing fees and office commissions, it is thus the duty of this court to make sure that they be reimbursed by Napocor the same amount as it should be Napocor who must shoulder such amounts already advanced by Plaintiffs as provided by the Supreme Court Decision being executed.

Moreover, in accordance with the writ of execution and orders of garnishment that this court has issued in furtherance of its duty to execute said Supreme Court Decision, the interests due on the principal amount shall continue to accrue until the financial obligations of Napocor to Plaintiffs have been fully paid. As these facts are well settled, this court likewise finds that the interest being sought by Plaintiffs to be still paid by Napocor as of January 20, 2013 in the amount of P4,162,865.50 is proper and reasonable and even generous considering that Meralco delivered the check payment to this court only on February 6, 2013 and that interests should otherwise still be accruing even up to this present day.

It has likewise been settled by this court in its previous orders that in the execution stage of any decision that has attained finality, the duty of this court is purely ministerial and mandatory. For Napocor and PSALM to therefore ask this court to deny and deprive Plaintiffs of the amounts that they are still clearly entitled to in accordance with Rule 142, Section 10 (g) of the Rules of Court and in compliance with the Decision of the Supreme Court that it has been tasked to execute and implement is, in effect, asking this court to diminish the amount already awarded by the Supreme Court to Plaintiffs and therefore modify or amend said Supreme Court Decision, but which this court, even if it wants to, could not even attempt to do so as it would be violating the Rules; notwithstanding the computation of Money Judgment submitted by Plaintiffs and the deference of Napocor and PSALM to the return of Sheriff Natangcop that does not bind this court, but is subject to final approval, again in accordance with the Rules.

Accordingly, this Court orders Napocor to, upon receipt of this Order so that additional interests will not again pile up to the detriment and financial burden of the government, immediately deliver the amount of P14,345,170.50 to Plaintiffs representing the final payment of their financial obligations as mandated by the Decision of the Supreme Court that this Court is implementing.

The executing sheriff is likewise ordered to again immediately issue letters of garnishment to Napocor or any other entity holding any and all funds of Napocor.

After Napocor shall have delivered this full amount of P14,345,170.50, Plaintiffs are likewise ordered to execute the necessary documents that will effect the transfer of subject property to PSALM. 32

Aggrieved, NAPOCOR filed a Motion for Reconsideration which was eventually denied by the RTC in its Omnibus Order 33 dated June 13, 2013.

Thereafter, NAPOCOR filed a Petition for Certiorari assailing the Order dated April 23, 2013 and Omnibus Order dated June 13, 2013 issued by the RTC, with a prayer for the issuance of a Temporary Restraining Order (TRO) and Writ of Preliminary Injunction to enjoin the implementation of the assailed RTC Orders. 34

After the filing of the necessary Comment and Opposition to the issuance of a TRO, the CA issued a Resolution 35 dated January 15, 2014, finding merit in NAPOCOR's motion, issued a TRO effective for 60 days, unless sooner revoked, enjoining the execution of the Order dated April 23, 2013 and Omnibus Order dated June 13, 2013 issued by the RTC. 36

Ruling of the CA

In its Decision dated July 25, 2016, the CA affirmed the RTC Order with modification. The CA ruled that NAPOCOR's tender and encashment of the BDO Check did not fully satisfy the judgment debt, as the amount thereof did not cover the interest that accrued from October 2012 until it was fully paid, to wit:

Petitioner's contention is misplaced.

When a decision or resolution becomes final and executory, it is the ministerial duty of the court or tribunal to order its execution. After a judgment has become final, no additions can be made to it, and nothing can be done with it except its execution; otherwise, there would be no end to litigations, thus setting at naught the main role of courts of justice, which is to assist in the enforcement of the rule of law and the maintenance of peace and order, by setting justiceable controversies with finality.

After a judgment has been fully satisfied, the case is deemed terminated once and for all. But during the execution stage, it is regarded as still pending so that all proceedings on the execution are proceedings in the suit. There is no question that the court which rendered the judgment has a general supervisory control over its process of execution, and this power carries with it the right to determine every question of fact and law which may be involved in the execution. When the judgment has been satisfied, the same passes beyond review, for satisfaction thereof is the last act and end of the proceedings. Payment produces permanent and irrevocable discharge.

Now, the question is whether the payment so far made by Napocor fully satisfied their liability.

The Court rules in the negative.

Under the Writ of Execution, the monetary liability of Napocor is P313,690,297.00 inclusive of interest as of July 31, 2012, plus interest at 12% per annum until the date of full payment, and the sum of P10,051,040.00 as costs of suit. When Napocor made the payment of January 30, 2012 in the amount of P315,960,947.00, it only included interest computed as of September 30, 2012. The sum did not cover interest from October 2012 until it was fully paid. The sheriff clearly erred in declaring that there was already full satisfaction of judgment. He had no authority to determine for himself whether or not a payment by a judgment debtor in the execution proceedings indeed fully satisfied an execution where obviously the amount collected was not equivalent to the total amount of liability based on the judgment. 37 (Citations omitted)

However, with respect to private respondents' claim for reimbursement for the costs of suit which was deducted by the RTC from the payment made by NAPOCOR, the CA directed the Clerk of Court to recompute the amount of costs in accordance with the provisions of the Rules of Court.

On September 13, 2019, NAPOCOR filed its Motion for Reconsideration which was eventually denied by the CA in its Resolution 38 dated February 8, 2017. Notably, private respondents no longer questioned the CA's ruling directing the re-computation of the costs of suit, and the same has thus become final with respect to private respondents.

Hence the present petition. 39

NAPOCOR, in the main, argues that the Writ of Execution had allegedly been fully satisfied when the BDO Check was tendered, deposited and encashed in payment of the judgment debt. Consequently, NAPOCOR alleges that with the satisfaction of the judgment debt, the RTC had allegedly lost jurisdiction over the case and that the same should already be deemed terminated. NAPOCOR claims that the additional amount demanded by private respondents is not part of the judgment and to allow the latter to collect would be tantamount to altering this Court's Decision in National Power Corp. v. Heirs of Macabangkit Sangkay.

Issue

The principal issue before this Court is whether the amount of the BDO Check tendered and deposited for NAPOCOR constitutes full satisfaction of the judgment debt so as to extinguish its liability. Moreover, NAPOCOR argues that even when the government has been adjudged liable, it does not necessarily follow that the judgment can be enforced by execution against its funds and that the necessary money claim must first be filed with the COA. 40

Our Ruling

NAPOCOR's contentions are partly meritorious.

At the onset, it is the general rule that only questions of law should be raised in a petition for review on certiorari under Rule 45 and factual findings of the lower courts will generally not be disturbed. 41 Relatedly, when courts determine the total monetary award of a final and executory judgment, it does not disturb its terms but is merely an incident to its execution. In this regard, mathematical computations are factual determinations and, thus, generally beyond the province of this Court as it is not a trier of facts. Thus, when supported by substantial evidence, the mathematical computations of the appellate court and the lower court are conclusive and binding on the parties and are not reviewable by this Court. 42

In the instant case, the RTC, as affirmed by the CA found that the amount of the BDO Check tendered and deposited was insufficient to fully satisfy the judgment debt in favor of private respondents. The CA ruled that the payment made by NAPOCOR did not cover the interest that accrued from October 1, 2012 until January 20, 2013, the cut-off date as agreed upon by the parties wherein payment was made. We find no reason to disturb the CA's findings. 43

Trial Courts Retain General

NAPOCOR alleges that the RTC had already lost jurisdiction over the case due to the supposed full satisfaction of the Writ of Execution, as allegedly proven by the Sheriff's Return and Notice of Lifting of Notice of Garnishment. 44 NAPOCOR, thus posits that the RTC no longer had jurisdiction to grant private respondents' prayer for the payment of the additional award. 45

NAPOCOR's position in untenable.

It is axiomatic that after a judgment has been fully satisfied, the case is deemed terminated once and for all. It is when the judgment has been satisfied that the same passes beyond review, for satisfaction thereof is the last act and end of the proceedings. 46 Nevertheless, until a judgment has been fully satisfied, the case in which an execution has been issued is regarded as still pending so that all proceedings on the execution are proceedings in the suit. 47

The court which rendered the judgment has control over the processes of execution. The power carries with it the right to determine every question of fact and law which may be involved in the execution. 48

In Seavan Carrier v. GTI Sportswear Corp., 49 the trial court had already proceeded with the execution proceedings, and the judgment had been partially satisfied. However, the certificate of sale issued by the deputy sheriff in favor of the prevailing parties did not cover the full amount of the judgment. Accordingly, petitioner therein filed an Urgent Motion for Protective Order, praying that the respondents be made to comply with the collateral agreement and that the deputy sheriff be required to make his return itemizing the amounts due and lawful charges incident to the sale. The said Motion was eventually denied by the trial court reasoning that it no longer had jurisdiction over the case considering that the execution proceedings were already terminated. This Court, reversing the findings of the trial court directed that a hearing be conducted to determine the exact amount of the judgment debtor's liability. We ruled:

The general rule is "A case in which an execution has been issued is regarded as still pending so that all proceedings on the execution are proceedings in the suit. There is no question that the court which rendered the judgment has a general supervisory control over its process of execution, and this power carries with it the right to determine very question of fact and law which may be involved in the execution." (Vda. de Paman v. Señeris, 115 SCRA 709). Moreover, it has been stated that it is "when the judgment has been satisfied that the same passes beyond review, for satisfaction thereof is the last act and end of the proceedings. Payment produces permanent and irrevocable discharge." (Moran, Comments on the Rules of Court, 1979 ed. Vol. 11, p. 405).

Applying the foregoing principles to the case at bar, we rule that contrary to the trial court's findings, the execution proceedings of the subject judgment had not yet been terminated when the petitioners filed their urgent motion for protective order. The certificate of sale issued by the deputy sheriff in favor of the private respondents was only for the satisfaction of P462,000.00 which obviously is not a full satisfaction of the judgment. This can be gleaned from the fact that a total amount of P608,000.00 to be recovered from the petitioners by the private respondents pursuant to the judgment was arrived at by the deputy sheriff as evidenced by the "notice of sale of personal property." (Annex 2, Memorandum for private respondents) Moreover, the parties' collateral agreement itself shows that the P462,000.00 was but a partial satisfaction of the judgment.

Hence, the trial court, pursuant to its supervisory control over the execution of the judgment should have ordered a hearing on the motion to determine the actual amount to be recovered by the private respondents for the full satisfaction of the judgment. The determination of the exact liability of the petitioners in faithful compliance with the judgment of the court is vital considering that the judgment itself did not fix the exact liability due to the private respondents and that the petitioners in the motion alleged that the private respondents were asking for more than the legal rate of interest. Obviously, these are questions of fact and law which are directly involved in the execution of the judgment. 50

Accordingly, included in resolving questions of fact relative to the execution of a final and executory judgment is the determination of the total judgment debt including interest until full payment. Relatedly, the determination of whether a judgment has been fully satisfied falls squarely within the jurisdiction of the trial court and cannot be overridden by the return of the executing Sheriff if such return is found to be false or deficient.

Thus, if the officers who executed the writ of execution committed any irregularity or exceeded their authority in the enforcement of the writ, the proper recourse would be to file a motion with or an application for relief from the same court which issued the decision. 51

In the instant case, private respondents filed a Very Urgent Manifestation and Motion alleging that the payment made by NAPOCOR did not fully satisfy the Judgment as it only covered interest as of September 30, 2012 and did not include the interest that accrued from October 1, 2012 up to January 20, 2013, the cut-off date as agreed upon by the parties. 52

Considering that the issues raised by private respondents in their Motion pertain to the execution of the Decision, it was well within the jurisdiction of the RTC to resolve the same. The RTC has not been ousted of its general supervisory control over its process of execution, and this power carries with it the right to determine very question of fact and law which may be involved in the execution.

NAPOCOR's Payment Was

NAPOCOR disputes the additional amount demanded by private respondents, in particular the interest that accrued from September 30, 2012 up to January 20, 2013 and argues that the same is not part of the judgment. 53

Although NAPOCOR never questioned the imposition of interest on the principal amount as just compensation, We nevertheless find it necessary to discuss the importance of its inclusion in our Decision.

The purpose of just compensation is not to reward the owner for the property taken, but to compensate him for the loss thereof. As such, the true measure of the property, as upheld in a plethora of cases, is the market value at the time of the taking, when the loss resulted. 54 In addition, the owner's loss is not only his property, but also its income-generating potential. Thus, when property is taken, full compensation of its value must be immediately paid to achieve a fair exchange for the property and the potential income lost. 55 The value of the landholdings should be equivalent to the principal sum of the just compensation due, and interest is due and should be paid to compensate for the unpaid balance of this principal sum after taking has been completed. 56 The rationale for imposing the interest is to compensate the landowners for the income they would have made had they been properly compensated for their properties at the time of the taking. 57

The Court in Evergreen Manufacturing Corp. v. Rep. of the Phils.,58 citing Republic v. Mupas59 held that interest on the unpaid compensation becomes due if there is no full compensation for the expropriated property, in accordance with the concept of just compensation, to wit:

The reason is that just compensation would not be "just" if the State does not pay the property owner interest on the just compensation from the date of the taking of the property. Without prompt payment, the property owner suffers the immediate deprivation of both his land and its fruits or income. The owner's loss, of course, is not only his property but also its income-generating potential.

Ideally, just compensation should be immediately made available to the property owner so that he may derive income from this compensation, in the same manner that he would have derived income from his expropriated property.

However, if full compensation is not paid for the property taken, then the State must pay for the shortfall in the earning potential immediately lost due to the taking, and the absence of replacement property from which income can be derived. Interest on the unpaid compensation becomes due as compliance with the constitutional mandate on eminent domain and as a basic measure of fairness.

Thus, interest in eminent domain cases "runs as a matter of law and follows as a matter of course from the right of the landowner to be placed in as good a position as money can accomplish, as of the date of taking." 60 (Emphasis omitted)

Similarly, in Apo Fruits Corp., et al. v. Land Bank of the Phils., 61 We held that compensation for expropriated property to be "just" must also be made without delay, and the necessity of the payment of interest is to compensate for any delay computed from the time the property is taken to the time when compensation is actually paid or deposited with the court:

Apart from the requirement that compensation for expropriated land must be fair and reasonable, compensation, to be "just" must also be made without delay. Without prompt payment, compensation cannot be considered "just" if the property is immediately taken as the property owner suffers the immediate deprivation of both his land and its fruits or income.

This is the principle at the core of the present case where the petitioners were made to wait for more than a decade after the taking of their property before they actually received the full amount of the principal of the just compensation due them. What they have not received to date is the income of their landholdings corresponding to what they would have received had no uncompensated taking of these lands been immediately made. This income, in terms of the interest on the unpaid principal, is the subject of the current litigation.

We recognized in Republic v. Court of Appeals the need for prompt payment and the necessity of the payment of interest to compensate for any delay in the payment of compensation for property already taken. We ruled in this case that:

The constitutional limitation of "just compensation" is considered to be the sum equivalent to the market value of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal action and competition or the fair value of the property as between one who receives, and one who desires to sell, i[f] fixed at the time of the actual taking by the government. Thus, if property is taken for public use before compensation is deposited with the court having jurisdiction over the case, the final compensation must include interest[s] on its just value to be computed from the time the property is taken to the time when compensation is actually paid or deposited with the court. In fine, between the taking of the property and the actual payment, legal interest[s] accrue in order to place the owner in a position as good as (but not better than) the position he was in before the taking occurred.

xxx xxx xxx

The owner's loss, of course, is not only his property but also its income-generating potential. Thus, when property is taken, full compensation of its value must immediately be paid to achieve a fair exchange for the property and the potential income lost. The just compensation is made available to the property owner so that he may derive income from this compensation, in the same manner that he would have derived income from his expropriated property. If full compensation is not paid for property taken, then the State must make up for the shortfall in the earning potential immediately lost due to the taking, and the absence of replacement property from which income can be derived; interest on the unpaid compensation becomes due as compliance with the constitutional mandate on eminent domain and as a basic measure of fairness. 62 (Citations, italics and emphasis omitted)

In addition, this Court in Apo Fruits Corp., et al. v. Land Bank of the Phils., citing Republic v. Court of Appeals63 recognized and held that "just compensation due to the landowners for their expropriated property amounted to an effective forbearance on the part of the State. Applying the Eastern Shipping Lines ruling, the Court fixed the applicable interest rate at 12% per annum, computed from the time the property was taken until the full amount of just compensation was paid, in order to eliminate the issue of the constant fluctuation and inflation of the value of the currency over time." 64

Moreover, judgments that have become final and executory prior to July 1, 2013, shall not be disturbed by Our ruling in Nacar v. Gallery Frames, 65 and shall continue to be implemented applying the rate of interest fixed therein.

In the present case, it is beyond dispute that this Court's Decision in National Power Corp. v. Heirs of Macabangkit Sangkay dated August 24, 2011 became final and executory on May 10, 2012. In the said Decision we ordered NAPOCOR to pay private respondents the principal amount of P113,532,500.00 as just compensation and imposed thereat interest at the rate of 12% per annum reckoned from the filing of the complaint on November 21, 1997 until the liability is fully paid. 66

The records reveal that the BDO Check in the amount of P315,960,947.00 was tendered and deposited with the RTC-OCC on January 30, 2013, and was eventually released to private respondents only on February 6, 2013. Thus, the interest should have continued to accrue until February 6, 2013, when full payment was supposedly received by private respondents. 67 However, the parties agreed to set the cut-off date as of January 20, 2013 to avoid any overpayments by NAPOCOR. 68

As a side note, the interest on the principal amount of P113,532,500.00 representing just compensation should continue to accrue considering that the judgment debt has yet to be fully satisfied by NAPOCOR. However, as admitted by private respondents themselves in their Very Urgent Manifestation and Motion, their claim for unpaid interest was computed only up to January 20, 2013 as agreed upon by the parties. 69 Based on their pleadings and the relief prayed for, private respondents demanded only the balance of the interest payment up to January 20, 2013. 70

Accordingly, a simple mathematical computation would show that NAPOCOR's total monetary liability, including accrued interest as of January 20, 2013 should have amounted to P320,123,805.83, broken down as follows:

 

Principal Amount Representing just compensation	P113,532,500.00
Interest rate	12% per annum
Interest as of January 20, 2013	P206,591,305.83 71
Total monetary liability of NAPOCOR as of January 20, 2013	P320,123,805.83

 

Clearly, the amount paid by NAPOCOR was not in full satisfaction of its total monetary liability. As pointed out by private respondents, the amount of the BDO Check tendered and deposited with the RTC-OCC covered only the interest as of September 30, 2012 and did not include the interest that accrued until January 20, 2013, the agreed upon cut-off point for the interest. Thus, when NAPOCOR made the payment, it still had a balance of P4,162,858.83, representing accrued interest from October 1, 2012 until January 20, 2013. 72

Considering the shortfall, private respondents were well within their right to demand for the full satisfaction of the judgment debt. Corollary, considering that the judgment debt remains to be not fully satisfied by NAPOCOR, the case has not yet been terminated and the RTC retains jurisdiction over the execution proceedings. As earlier discussed, the RTC exercising general supervisory control over its process of execution, has the power to determine questions of fact relative to the execution which includes the computation of the total judgment debt.

Relatedly, it is settled general principle is that a writ of execution must conform strictly to every essential particular of the judgment promulgated, and may not vary the terms of the judgment it seeks to enforce, nor may it go beyond the terms of the judgment sought to be executed. 73 It was thus erroneous for Sheriff Natangcop to issue the Sheriffs Return dated February 7, 2013, stating therein that the Writ of Execution is being returned duly served and the judgment fully satisfied and for issuing a Notice of Lifting of Notice of Garnishment. 74

Execution is the process which carries into effect a decree or judgment whereas the satisfaction of a judgment is the payment of the amount of the writ, or a lawful tender thereof, or the conversion by sale of the debtor's property into an amount equal to that due, and, it may done otherwise, than upon an execution (Section 47, Rule 39). Execution is for the sheriff to accomplish while satisfaction of the judgment is for the creditor to achieve. 75

Accordingly, the RTC did not commit any reversible error when it issued an order to NAPOCOR for the payment of the deficiency. However, based on Our computation, the balance of the interest payment representing accrued interest from October 1, 2012 until January 20, 2013, is P4,162,858.83.

Moreover, consistent with this Court's ruling in Nacar v. Gallery Frames, 76 as modified by our ruling in Lara's Gifts & Decors, Inc. v. Midtown Industrial Sales, Inc., 77 the foregoing amount shall earn interest at the rate of twelve percent (12%) per annum from the time demand was made, i.e., NAPOCOR's receipt of the Very Urgent Manifestation and Motion filed by private respondents on March 13, 2013 until June 30, 2013 and six percent (6%) per annum from July 1, 2013 until fully paid.

Private Respondents are

Cost, in its ordinary sense, contemplates the amount spent or expenses incurred, in order to purchase or acquire a thing or service, usually in the form of either a price or a fee. 78 These are certain allowances authorized by statute to reimburse the successful party for expenses incurred in prosecuting or defending an action or special proceedings. These costs have their own legal meaning and import, for, as it was said, costs are in the nature of incidental damages allowed to the successful party to indemnify him against the expense of asserting his rights in court, when the necessity of so doing was caused by other's breach of legal duty. 79 The right to costs, although ancillary to the judgment, is a substantive right and not a mere matter of procedure; although it has been held that costs alone cannot furnish the basis for substantive judgment. 80

As such, the costs of filing a suit includes, but not limited to, those found under Sections 9, 10, and 11 of Rule 142 of the Revised Rules of Court. 81

Moreover, Section 8, Rule 142 of the Rules of Court, which states:

Section 8. Costs, how taxed. — In inferior courts, the costs shall be taxed by the justice of the peace or municipal judge and included in the judgment. In superior courts, costs shall be taxed by the clerk of the corresponding court on five days' written notice given by the prevailing party to the adverse party. With this notice shall be served a statement of the items of costs claimed by the prevailing party, verified by his oath or that of his attorney. Objections to the taxation shall be made in writing, specifying the items objected to. Either party may appeal to the court from the clerk's taxation. The costs shall be inserted in the judgment if taxed before its entry, and payment thereof shall be enforced by execution.

In Funk v. Santos Ventura Hocorma Foundation, Inc., 82 We clarified the foregoing provision:

To execute the costs of suit in superior courts (i.e., courts other than the first level courts), Section 8 of Rule 142 does not require the prevailing party to notify the adverse party within five days from the entry of judgment. What Section 8 mandates is that the adverse party must be given at least five days written notice before costs may be taxed or assessed. The obvious purpose of the notice is to give opportunity to the adverse party to object to the costs. The clerk of court will thereafter tax or assess the costs, which assessment may be appealed by either party to the court where execution is sought.

It is beyond cavil, that the Court in its Decision in National Power Corp. v. Heirs of Macabangkit Sangkay, 83 ordered NAPOCOR to pay the costs of suit, and which became final and executory on May 10, 2012.

In this regard, the Branch Clerk of Court of the RTC issued the Writ of Execution demanding, among others, the payment from NAPOCOR the amount of fees payable to the Court and the filing fee deficiency. 84 However, the records would disclose that the costs of the suit in the amount of P10,182,305.00 were deducted by the RTC from the payment made by NAPOCOR and was considered as an advance by private respondents. Accordingly, private respondents sought for the reimbursement of the costs of suit which they advanced and which should be shouldered and paid for by NAPOCOR. According to private respondents the amount deducted by the RTC representing costs of the suit, consists of the following:

P9,478,926.40 — representing office Commissions;

P703,378.60 — representing docket and deficiency fees. 85

We agree with the observation of the CA. To our mind the amount of P10,182,305.00 is unreasonable and excessive to constitute as the cost of suit. We also observe that the term "Office Commissions" is highly suspect as it does not indicate which of the recoverable cost it pertains to or what the basis for its recovery is anchored on. There is thus a need for the re-computation of the costs of suit, in accordance with the procedure and guidelines laid down in the Rules of Court.

The Filing with the COA of a

We agree with NAPOCOR's position that private respondents must file a money claim with the COA to effect payment of the balance on the interest payments.

Money claims against the government cannot be the subject of writs of execution absent any showing that they have been brought before the COA, under this Court's Administrative Circular No. 10-2000 and COA Circular No. 2001-002. 86 Trial judges should not immediately issue writs of execution or garnishment against the Government or any of its subdivisions, agencies and instrumentalities to enforce money judgments. 87 We have held that despite the existence of a final and executory judgment validating the claim against an agency or instrumentality of the Government, the settlement of the said claim is still subject to the primary jurisdiction of the COA. 88 Ineluctably, the claimant has to first seek the COA's approval of the monetary claim. 89

Section 26 of Presidential Decree No. 1445, provides that COA has jurisdiction to examine, audit and settle all debts and claims of any sort due from or owing to the Government or any of its subdivisions, agencies and instrumentalities, to wit:

Section 26. General jurisdiction. — The authority and powers of the Commission shall extend to and comprehend all matters relating to auditing procedures, systems and controls, the keeping of the general accounts of the Government, the preservation of vouchers pertaining thereto for a period of ten years, the examination and inspection of the books, records, and papers relating to those accounts; and the audit and settlement of the accounts of all persons respecting funds or property received or held by them in an accountable capacity, as well as the examination, audit, and settlement of all debts and claims of any sort due from or owing to the Government or any of its subdivisions, agencies and instrumentalities. The said jurisdiction extends to all government-owned or controlled corporations, including their subsidiaries, and other self-governing boards, commissions, or agencies of the Government, and as herein prescribed, including non-governmental entities subsidized by the government, those funded by donations through the government, those required to pay levies or government share, and those for which the government has put up a counterpart fund or those partly funded by the government.

In this regard, this Court issued Administrative Circular No. 10-2000 dated October 25, 2000 which ordered all judges of lower courts to observe utmost caution, prudence, and judiciousness in the issuance of writs of execution to satisfy money judgments against government agencies. This Court citing the case of The Commissioner of Public Highways, et al. v. Hon. San Diego, etc., et al., 90 emphasized:

The universal rule that where the State gives its consent to be sued by private parties either by general or special law, it may limit claimant's action "only up to the completion of proceedings anterior to the stage of execution" and that the power of the Courts ends when the judgment is rendered, since government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of public funds must be covered by the corresponding appropriation as required by law. The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated by law. 91

In Atty. Roxas v. Republic Real Estate Corporation, 92 this Court highlighted the necessity for filing a money claim with the COA despite the finding of liability against the government:

The case is premature. The money claim against the Republic should have been first brought before the Commission on Audit.

The Writ of Execution and Sheriff De Jesus' Notice [of Execution] violate this Court's Administrative Circular No. 10-2000 and Commission on Audit Circular No. 2001-002, which govern the issuance of writs of execution to satisfy money judgments against government.

xxx xxx xxx

For its part, Commission on Audit Circular No. 2001-002 dated July 31, 2001 requires the following to observe this Court's Administrative Circular No. 10-2000: department heads; bureau, agency, and office chiefs; managing heads of government-owned and/or controlled corporations; local chief executives; assistant commissioners, directors, officers-in-charge, and auditors of the Commission on Audit; and all others concerned.

Chapter 4, Section 11 of Executive Order No. 292 gives the Commission on Audit the power and mandate to settle all government accounts. Thus, the finding that government is liable in a suit to which it consented does not translate to enforcement of the judgment by execution.

As a rule, public funds may not be disbursed absent an appropriation of law or other specific statutory authority. Commonwealth Act No. 327, as amended by Presidential Decree No. 1445, requires that all money claims against government must first be filed before the Commission on Audit, which, in turn, must act upon them within 60 days.

Only when the Commission on Audit rejects the claim can the claimant elevate the matter to this Court on certiorari and, in effect, sue the state. Carabao, Inc. v. Agricultural Productivity Commission has settled that "claimants have to prosecute their money claims against the Government under Commonwealth Act 327 x x x and that the conditions provided in Commonwealth Act 327 for filing money claims against the Government must be strictly observed." 93 (Citations omitted)

Consequently, court-adjudicated money claims against the government must be separately brought before the COA for their satisfaction. 94

In the present case, with respect to the balance of the interest payments and the costs of suit, subject to re-computation, satisfaction thereof must comply with the procedures in filing a money claim before the COA and cannot be enforced by a Writ of Execution.

Final Note

This Court frowns upon any delay in the execution of final and executory decisions, as the immediate enforcement of the parties' rights, confirmed by a final decision, is a major component of the ideal administration of justice. 95 Public policy dictates that once a judgment becomes final, executory, and unappealable, the prevailing party should not be denied the fruits of his victory by some subterfuge devised by the losing party. Unjustified delay in the enforcement of a judgment sets at naught the role of courts in disposing justiciable controversies with finality. 96

WHEREFORE, premises considered, the Petition for Review dated April 3, 2017 is DENIED for lack of merit and the Decision dated July 25, 2016 of the Court of Appeals in CA-G.R. SP No. 05707-MIN, is AFFIRMED with MODIFICATION, as follows:

Petitioner National Power Corporation is ORDERED to PAY private respondents Cebu, Batowa-An, Sayana, Nasser, Manta, Edgar, Putri, and Amer, all surnamed Macabangkit, the following:

1. FOUR MILLION ONE HUNDRED SIXTY-TWO THOUSAND EIGHT HUNDRED FIFTY-EIGHT PESOS and 83/100 (P4,162,858.83), representing the unpaid interest on the just compensation which accrued from October 1, 2012 until January 20, 2013;

2. The foregoing amount shall earn interest at the rate of twelve percent (12%) per annum from March 13, 2013 until June 30, 2013 and six percent (6%) per annum from July 1, 2013 until the allowance of the money claim by the Commission on Audit.

With respect to the cost of suit, the Decision of the Court of Appeals stands.

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.Spouses Aguilar v. The Manila Banking Corporation, 533 Phil. 645, 669-670 (2006).

2.Rollo, pp. 12-32.

3.Id. at 40-49; penned by Associate Justice Edgardo A. Camello, with Associate Justices Ronaldo B. Martin and Perpetua T. Atal-Paño, concurring.

4.Id. at 60-61.

5. 671 Phil. 569 (2011).

6.Rollo, p. 41.

7.Id. at 71.

8.Id. at 62-66.

9.Id. at 81-89.

10.Id. at 71-91; penned by RTC Judge Mamindiara P. Mangotara.

11.Id. at 92.

12.Id. at 90-92.

13.Supra note 5.

14.Id. at 595.

15.Id. at 609.

16.Rollo, pp. 170-171.

17.Id.

18.Id. at 172-174.

19.Id. at 175.

20.Id. at 177-179.

21.Id. at 180-181.

22.Id. at 182-185.

23.Id. at 186-187.

24.Id. at 188-189.

25.Id. at 190-191.

26.Id.

27.Id.

28.Id. at 192.

29.Id. at 193-198.

30.Id. at 193-194.

31.Id. at 199-201.

32.Id. at 200-201.

33.Id. at 202-203.

34.Id. at 22.

35.Id. at 205-207; penned by Associate Justice Edgardo A. Camello, with Associate Justices Jhosep Y. Lopez and Henri Jean Paul B. Inting (now both a Member of this Court), concurring.

36.Id. at 206.

37.Id. at 46-47.

38.Id. at 60-61.

39.Id. at 12-32.

40.Id. at 23-29.

41.Sps. Plaza v. Lustiva, et al., 728 Phil. 359, 367-368 (2014), citing Calanasan v. Sps. Dolorita, 722 Phil. 1, 6-7 (2013).

42.Sps. Sy v. China Banking Corporation, 792 Phil. 101, 107 (2016).

43.Rollo, p. 47.

44.Id. at 23.

45.Id. at 23-24.

46.Sunfire Trading, Inc. v. Geraldine Guy, G.R. No. 235279, March 2, 2020.

47.Paman, et al. v. Hon. Señeris, et al., 201 Phil. 290, 296 (1982).

48.Balais v. Velasco, 322 Phil. 790, 806 (1996); Darwin, et al. v. Tokonaga, et al., 274 Phil. 726, 736 (1991); Paper Industries Corp. of the Phils. v. Intermediate Appellate Court, 235 Phil. 162, 167 (1987).

49. 222 Phil. 103 (1985).

50.Id. at 109-110.

51.Collado v. Heirs of Alejandro Triunfante, Sr., 563 Phil. 713, 721-722 (2007).

52.Rollo, p. 193.

53.Id. at 23-24.

54.Sec. of the Dep't. of Public Works and Highways, et al. v. Sps. Tecson, 758 Phil. 604, 635 (2015).

55.Rep. of the Phils. v. Macabagdal, 823 Phil. 477, 482 (2018).

56.Apo Fruits Corp., et al. v. Land Bank of the Phils., 647 Phil. 251, 285 (2010).

57.Land Bank of the Philippines v. Sps. Avanceña, 785 Phil. 755, 762 (2016).

58. 817 Phil. 1048 (2017).

59. 769 Phil. 21 (2015).

60.Evergreen Manufacturing Corp. v. Rep. of the Phils., supra at 1065.

61.Supra note 56.

62.Id. at 273-277.

63. 433 Phil. 106 (2002).

64.Supra note 56 at 274-275. Citation and emphasis omitted.

65. 716 Phil. 267 (2013).

66.Supra note 5 at 609.

67.Rollo, pp. 190-191.

68.Id. at 193.

69.Id.

70.Id.

71. [(P113,532,500.00 * 12% * 15 years) + (P113,532,500.00 * 12% * 59 days/365 days)]. For accuracy, the period from November 21, 1997 to November 21, 2012 is determined by number of years, while the period from November 22, to January 20, 2013 is determined by number of days.

72.Rollo, p. 193.

73.Tumibay, et al. v. Spouses Soro, et al., 632 Phil. 179, 186-187 (2010).

74.Rollo, pp. 190-191.

75.Philippine Airlines, Inc. v. Court of Appeals, 260 Phil. 606, 626-627 (1990).

76.Supra note 65.

77. G.R. No. 225433, August 28, 2019.

78.Norsk Hydro (Philippines), Inc. v. Premiere Development Bank, G.R. No. 226771, September 16, 2020.

79.Id.

80.Maglana Rice and Corn Mill, Inc. v. Sps. Tan, 673 Phil. 532, 543 (2011).

81.Norsk Hydro (Philippines), Inc. v. Premiere Development Bank, supra.

82. 789 Phil. 348 (2016).

83.Supra note 5.

84.Rollo, p. 170.

85.Id. at 194.

86.Republic of the Philippines v. Fetalvero, G.R. No. 198008, February 4, 2019.

87. SC Administrative Circular No. 10-2000.

88.University of the Phils. v. Judge Dizon, et al., 693 Phil. 226, 230-231 (2012).

89.Id. at 253.

90. 142 Phil. 553 (1970).

91.Id. at 526-563.

92. 786 Phil. 163 (2016).

93.Id. at 188-191.

94.Star Special Corporate Security Management, Inc. v. Commission on Audit, G.R. No. 225366, September 1, 2020.

95.Session Delights Ice Cream and Fast Foods v. Hon. CA (6th Div.), et al., 625 Phil. 612, 623 (2010).

96.Mejia-Espinoza, et al. v. Cariño, 804 Phil. 248, 259 (2017).