FIRST DIVISION
[G.R. No. 228421. March 29, 2022.]
MARIO P. VILLAMOR, petitioner,vs. ROMAN CATHOLIC BISHOP OF SURIGAO, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution datedMarch 29, 2022which reads as follows:
"G.R. No. 228421(Mario P. Villamor, Petitioner v. Roman Catholic Bishop of Surigao, Respondent).
This is a petition for review on certiorari assailing the June 7, 2016 Decision 1 and November 18, 2016 Resolution 2 of the Court of Appeals (CA) in CA-G.R. CV No. 102913. The CA reversed and set aside the June 24, 2013 Order 3 of the Regional Trial Court of Pasig City, Branch 167 (RTC), in Civil Case No. 67690, which denied the motion for execution of judgment filed by the Roman Catholic Bishop of Surigao (respondent).
Antecedents
On November 19, 1999, respondent filed before the RTC a Complaint 4 for collection of sum of money against Project Movers Realty and Development Corporation (PMRDC), docketed as Civil Case No. 67690. Respondent's cause of action sprung from its right to collect from the promissory note issued by PMRDC as security for a loan it obtained from respondent. The RTC rendered a Decision 5 dated February 20, 2001 in favor of respondent, ordering PMRDC to pay the principal obligation, interest and penalties on the promissory note.
Since PMRDC failed to lodge an appeal, the February 20, 2001 Decision of the RTC became final and executory, and respondent filed a motion for issuance of a writ of execution. The corresponding writ was issued by the RTC on June 18, 2001. Unfortunately, the writ was not implemented; hence, respondent filed a motion for the issuance of an alias writ of execution. The RTC granted respondent's motion and issued an alias writ of execution on June 26, 2006. The alias writ was returned unsatisfied, because PMRDC no longer held office at its last known address. 6
Thereafter, respondent filed a motion for payment of unpaid subscription against PMRDC's stockholders, namely: Mario P. Villamor (petitioner), Luz M. Villamor, Antonio P. Villamor, Alberto Buenviaje, and Roman Pineda (collectively, the stockholders). Respondent contended that, as PMRDC's judgment creditor, it had the right to proceed against PMRDC's stockholders to the extent of their unpaid subscriptions. 7
The stockholders filed their Entry of Appearance and Motion 8 dated November 4, 2008 and, subsequently, their Comment/Opposition 9 dated December 2, 2008. They alleged that PMRDC had previously taken out a loan from Philippine Veterans Bank (PVB) and used petitioner's real properties, appraised at P201,186,000.00, as security for said loan. Petitioner's properties were later on foreclosed and the titles thereto were consolidated in favor of PVB. According to the stockholders, they had no outstanding debt to PMRDC since they agreed among themselves that petitioner's foreclosed properties would serve as payment for their unpaid subscriptions. 10
The RTC denied respondent's motion for payment of unpaid subscription for lack of merit. The RTC gave credence to the stockholders' claim that petitioner's foreclosed properties served as payment for the unpaid subscriptions. 11
Respondent moved for reconsideration, but the same was also denied. Thus, respondent appealed to the CA and asserted that the agreement by the stockholders regarding payment for their unpaid subscriptions was unenforceable since it was not contained in a public document. Moreover, the supposed subscription payments were not authorized and approved by PMRDC's Board of Directors, in contravention of existing laws and rules. 12 The appeal was docketed as CA-G.R. CV No. 94639.
In its Decision 13 dated July 21, 2011, the CA ruled in favor of respondent and found that the stockholders failed to prove the fact that their subscriptions had already been paid, and held the latter liable for PMRDC's financial obligations to the extent of their unpaid subscriptions. The CA ordered the RTC to issue the corresponding alias writ of execution against PMRDC's stockholders' unpaid subscriptions to cover respondent's money claims in Civil Case No. 67690. Eventually, an Entry of Judgment 14 was issued certifying that the July 21, 2011 Decision had become final and executory on August 14, 2011. CAIHTE
The RTC Ruling
Respondent thus filed a motion for execution against the stockholders. The RTC, in an Order 15 dated May 29, 2012, granted the said motion and issued a writ of execution pursuant to the CA Decision dated July 21, 2011.
The stockholders filed a Motion for Reconsideration 16 asserting legal compensation. They attached documents and an agreement approved by another trial court in a different case which showed that petitioner paid for PMRDC's obligations using his own properties.
In an Order 17 dated October 18, 2012, the RTC reversed itself and granted the motion for reconsideration. Finding merit in the stockholders' contention, it ruled that petitioner made payments and dispositions in favor of PMRDC's creditors in other cases, in amounts over and above petitioner's unpaid subscriptions; and it held that these were supervening facts and circumstances which render unjust the final and executory decision of the CA. The RTC applied the principle of legal compensation and held that it took place by operation of law when petitioner paid for PMRDC's obligations to the sole benefit of PMRDC.
Aggrieved, respondent filed a motion for reconsideration. The RTC ordered the conduct of an evidentiary hearing to allow the parties to present their main or controverting documentary evidence. 18
In its June 24, 2013 Order, the RTC denied respondent's motion for reconsideration. It ruled that petitioner's payment to PMRDC's creditors offset the stockholders' unpaid subscriptions. According to the RTC, there would be unjust enrichment on the part of PMRDC if petitioner and the other stockholders would be forced to pay for PMRDC's money obligations to respondent.
Undeterred, respondent filed an appeal to the CA, which was docketed as CA-G.R. CV No. 102913.
The CA Ruling
In its assailed June 7, 2016 Decision, the CA ruled in favor of respondent and held that the RTC erred in staying the execution of the July 21, 2011 Decision in CA-G.R. CV No. 94639. According to the CA, the alleged payment by petitioner of the stockholders' unpaid subscriptions was not a supervening event which would justify the alteration of the earlier decision. In fact, it was the very question tackled in CA-G.R. CV No. 94639. Thus, the issue of whether legal compensation took place had already been ruled upon by the CA; and the recall by the RTC of the writ of execution upon the unpaid subscriptions of the stockholders amounted to the modification of a decision that had attained finality. 19
The stockholders moved for reconsideration, which the CA denied in its November 18, 2016 Resolution.
Only petitioner appealed before the Court through the instant petition for review on certiorari.
Issue
The pivotal issue before the Court is whether petitioner may challenge the CA's final and executory July 21, 2011 Decision in CA-G.R. CV No. 94639.
Petitioner contends that the judgment in Civil Case No. 67690 cannot be executed against him because the RTC did not acquire jurisdiction over his person. According to petitioner, he was not originally impleaded as a party in Civil Case No. 67690. Thus, the CA Decision dated July 21, 2011, which found that there was no legal compensation, cannot be considered final as to him. Petitioner insists that there was legal compensation, and that had he been allowed to present evidence, he would have been able to show that he had also become PMRDC's creditor to the extent of his payment of PMRDC's other financial obligations. He argues that if he pays for the unpaid subscription sought by the writ execution, there will be unjust enrichment on PMRDC's part. 20 Petitioner also faults respondent for not filing a separate action for the payment of unpaid subscription, citing the case of Lingayen Gulf Electric Power Company, Inc. v. Baltazar. 21
In its Comment 22 dated April 11, 2017, respondent avers that there is no truth to petitioner's claim that jurisdiction over his person was not acquired by the RTC. According to respondent, the RTC obtained jurisdiction over petitioner when he and the other stockholders actively participated in the case through the filing of several pleadings before the RTC and the CA. Thus, petitioner is estopped from claiming that the RTC had no jurisdiction over his person. DETACa
The Court's Ruling
The petition lacks merit.
Well-settled is the rule that where the judgment of a higher court has become final and executory and has been returned to the lower court, the only function of the lower court is the ministerial act of carrying out the decision and issuing the writ of execution. 23 Section 1, Rule 39 of the Rules of Court provides:
Section 1. Execution upon judgments or final orders. — Execution shall issue as a matter of right, on motion, upon a judgment or order that disposes of the action or proceeding upon the expiration of the period to appeal therefrom if no appeal has been duly perfected.
If the appeal has been duly perfected and finally resolved, the execution may forthwith be applied for in the court of origin, on motion of the judgment obligee, submitting therewith certified true copies of the judgment or judgments or final order or orders sought to be enforced and of the entry thereof, with notice to the adverse party.
The appellate court may, on motion in the same case, when the interest of justice so requires, direct the court of origin to issue the writ of execution.
Indeed, in the execution of a final and executory judgment rendered by a higher court, the lower court may no longer re-examine the decision for any purpose other than execution, or review any matter or error decided by the appellate court. The only duty to be performed by the lower court is to enforce the satisfaction of the final and executory judgment issued by the superior court. 24
In this case, it is undisputed that the July 21, 2011 CA Decision, where petitioner and the other stockholders were ordered to satisfy PMRDC's liabilities to the extent of their unpaid subscriptions, became final and executory on August 14, 2011. Thus, the only task left for the RTC was to execute said CA decision as part of its ministerial duty in the execution stage of the proceedings. The RTC, however, granted the stockholders' motion for reconsideration of the writ of execution and even conducted an evidentiary hearing to thresh out the issue of legal compensation.
The Court finds this erroneous and contrary to the doctrine of immutability of final judgments. This doctrine declares that once a decision has acquired finality, it becomes immutable and unalterable, and it may no longer be modified in any respect even if the modification is meant to correct erroneous conclusions of fact and law, and whether it be made by the court that rendered it or by the Highest Court of the land. 25
To emphasize, a final and executory decision is immutable and unalterable and the court which rendered judgment only has the ministerial duty to issue a writ of execution. A decision that has attained finality becomes the law of the case regardless of any claim that it is erroneous. Any amendment or alteration which substantially affects a final and executory judgment is null and void for lack of jurisdiction, including the entire proceedings held for that purpose. 26 Thus, the lower court has no other choice but to implement the final and executory decision as it is merely ministerial on its part. Execution of a judgment becomes a matter of course. 27
Nonetheless, as with any other rule, the doctrine of immutability of judgments has exceptions, namely: (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. 28
Petitioner suggests that the third exception is applicable in the case at bar. He argues that any execution against him in connection with Civil Case No. 67690 is null and void because jurisdiction over his person was not acquired by the RTC. Petitioner points out that he was not originally impleaded in the civil case filed by respondent against PMRDC, and that he merely appeared before the court a quo to resist the execution and object to the jurisdiction of the court over his person. 29
While it is true that petitioner was not an original party in Civil Case No. 67690, jurisdiction over his person and over the other stockholders was acquired by the RTC upon the filing of their Entry of Appearance and Motion dated November 4, 2008. Contrary to petitioner's claim, his appearance was not qualified. In their Entry of Appearance and Motion dated November 4, 2008, and Comment/Opposition dated December 2, 2008, petitioner and the other stockholders raised the defense that they were no longer indebted to the PMRDC for unpaid subscriptions, and they made no reservations or objections regarding the court's jurisdiction over their persons.
Recall that respondent moved for reconsideration of the RTC order denying its motion for payment of unpaid subscription, which petitioner and the other stockholders were able to file a comment to. They also participated in the proceedings in CA-G.R. CV No. 94639 as oppositors-appellees.
Thus, it cannot be said that the RTC failed to acquire jurisdiction over the person of petitioner. His voluntary appearance and active participation in the execution stage of the proceedings allowed the RTC to obtain jurisdiction over his person. There is voluntary appearance when a party, without directly assailing the court's lack of jurisdiction, seeks affirmative relief from the court, 30 which is precisely what petitioner and the other stockholders did in this case. Consequently, there is no merit in petitioner's claim that the CA Decision dated July 21, 2011 is void because the RTC did not acquire jurisdiction over his person. aDSIHc
Significantly, respondent's recourse of bringing the stockholders into the proceedings through its motion for payment of unpaid subscription finds basis in Section 37, Rule 39 of the Rules of Court, which states:
Section 37. Examination of obligor of judgment obligor. — When the return of a writ of execution against the property of a judgment obligor shows that the judgment remain unsatisfied, in whole or in part, and upon proof to the satisfaction of the court which issued the writ, that a person, corporation, or other juridical entity has property of such judgment obligor or is indebted to him, the court may, by an order, require such person, corporation, or other juridical entity, or any officer, or member thereof, to appear before the court or a commissioner appointed by it, at a time and place within the province or city where such debtor resides or is found, and be examined concerning the same. The service of the order shall bind all credits due the judgment obligor and all money and property of the judgment obligor in the possession or in the control of such person corporation, or juridical entity from the time of service; and the court may also require notice of such proceedings to be given to any party to the action in such manner as it may deem proper.
Accordingly, respondent's motion for payment of unpaid subscription was, in the case at bar, sufficient to call PMRDC's stockholders to answer for its judgment obligations. No separate action is necessary to enforce the satisfaction of the judgment on the debtor of the judgment obligor. Contrary to petitioner's claim, the Court made no categorical ruling in Lingayen Gulf Electric Power Company, Inc. v. Baltazar that a separate action is necessary to recover the stockholders' unpaid stock subscriptions.
Petitioner further invokes the fourth exception to the doctrine of immutability of judgment and contends that legal compensation occurred between him and PMRDC when he paid for PMRDC's financial obligations to its other creditors. According to petitioner, any payment to respondent in consideration of PMRDC's liabilities would constitute unjust enrichment on the part of PMRDC, which would eventually become his debtor in view of all the payments he made to PMRDC's other creditors.
The issue of legal compensation was already settled in CA-G.R. CV No. 94639. In its Decision dated July 21, 2011, the CA found that petitioner failed to discharge the burden of proving the fact of payment by him and by the other stockholders of their unpaid subscriptions. The CA gave no credence to the supposed agreement among the stockholders to extinguish their unpaid subscriptions since it was not documented by any receipt, proof of payment, minutes, board resolution, or entry in the stock and transfer book of PMRDC. There were also no certificates of stock issued in the stockholders' names, which meant that the presumption of nonpayment was still operable. The CA likewise held that the loan agreement and deed of real estate mortgage failed to prove that petitioner's properties had already been foreclosed and consolidated in the name of PVB. On the contrary, the CA found that the properties were still registered in the name of petitioner and his spouse.
Evidently, the circumstances under which petitioner claims legal compensation did not transpire after the finality of the CA Decision dated July 21, 2011 in CA-G.R. CV No. 94639. Again, the controversy on legal compensation was precisely one of the issues resolved and fully disposed of by the CA in its July 21, 2011 Decision. Thus, petitioner may not invoke unjust enrichment by arguing that he paid for PMRDC's other obligations in other cases and transactions. The fact remains that the final and executory decision of the CA found that he and the other stockholders have unpaid subscriptions with PMRDC from which respondent may collect to satisfy the latter's claim against PMRDC.
WHEREFORE, the Petition for Review on Certiorari is DENIED. The June 7, 2016 Decision and November 18, 2016 Resolution of the Court of Appeals, in CA-G.R. CV No. 102913, are hereby AFFIRMED.
SO ORDERED." Inting, J., no part due to prior participation in the proceedings before the Court of Appeals; Rosario, J., designated additional Member per Raffle dated March 23, 2022.
By authority of the Court:
(SGD.) LIBRADA C. BUENADivision Clerk of Court
By:
MARIA TERESA B. SIBULODeputy Division Clerk of Court
Footnotes
1.Rollo, pp. 10-27; penned by Associate Justice Henri Jean Paul B. Inting (now a Member of this Court) with Associate Justice Marlene Gonzales-Sison and Associate Justice Marie Christine Azcarraga-Jacob, concurring.
2.Id. at 29-30.
3. Records, pp. 734-739; penned by Judge Rolando G. Mislang.
4.Id. at 1-7.
5.Id. at 214-220; penned by Judge Alfredo G. Flores.
6.Rollo, pp. 14 and 109.
7.Id. at 14-15 and 117.
8. Records, pp. 284-285.
9.Id. at 289-291.
10.Rollo, pp. 14-15.
11.Id. at 15.
12. Records, pp. 357-383.
13.Id. at 400-407; penned by Associate Justice Estela M. Perlas-Bernabe (now a Member of this Court) with Associate Justice Bienvenido L. Reyes (a retired Member of this Court) and Associate Justice Elihu A. Ybañez, concurring; see also rollo, pp. 107-114.
14.Id. at 414.
15.Id. at 494-496.
16.Id. at 499-507.
17.Id. at 522-526.
18.Id. at 633.
19.Rollo, pp. 21-26.
20.Id. at 54-64.
21. 93 Phil. 404 (1953).
22.Rollo, pp. 415-440.
23.FGUInsurance Corp. v. Regional Trial Court of Makati City, Branch 66, 659 Phil. 117, 122-123 (2011).
24. See Tropical Homes, Inc. v. Fortun, 251 Phil. 83, 94 (1989).
25.Uy v. Del Castillo, 814 Phil. 61, 74 (2017).
26.Vargas v. Cajucom, 761 Phil. 43, 54 (2015).
27.Id. at 52.
28.FGU Insurance Corp. v. Regional Trial Court of Makati City, Branch 66, supra note 23 at 117.
29.Rollo, p. 55.
30.G.V. Florida Transport, Inc. v. Tiara Commercial Corp., 820 Phil. 235, 252 (2017).