G.R. No. 179675. June 08, 2011
SPOUSES JUANITO MAHUSAY AND FRANCISCA MAHUSAY,PETITIONERS, VS. B.E. SAN DIEGO, INC., RESPONDENT.
NACHURA, J.:
Appeals (CA), denying petitioners’ Motion to Delete and Withdraw Resolution of
October 11, 2004, which allegedly amended and modified the original Decision of
the CA promulgated on December 20, 2001.
The antecedent facts are, as follows:
Petitioner spouses Juanito and Francisca Mahusay purchased several lots in
Aurora Subdivision, Malabon, Metro Manila, owned by respondent B.E. San Diego,
Inc. The transactions were covered by two (2) contracts: Contract to Sell No.
831,[2] executed on May 14, 1973, for the
total price of P33,000.00; and Contract to Sell No. 874[3] dated August 1, 1975, for the price of
P197,040.00, plus interest of 12% per annum, payable in monthly installments.
Due to petitioners’ nonpayment of the monthly amortizations since October 1978,
respondent was constrained to file a case for cancellation of contracts. The
case was dismissed by the trial court for lack of jurisdiction. Thereafter, a
Compromise Agreement was entered into by the parties on October 13, 1989,
whereby petitioners agreed to pay respondent the remaining balance of the
purchase price of all the lots in the manner and under the terms agreed upon by
the parties. Petitioners failed to comply with the terms embodied in the
Compromise Agreement; thus, on April 18, 1990, respondent filed a Complaint for
Specific Performance with the Regional Trial Court (RTC), Branch 73, Malabon,
docketed as Civil Case No. 1433-MN. [4]On November 29, 1995, the RTC ruled in favor of respondent, ordering
petitioners to comply with the provisions of the Compromise Agreement, and to
pay the amounts of P1,000,000.00 as actual damages and P50,000.00 as attorney’s
fees. [5]Petitioners appealed the decision to the CA on two grounds: (1) it was the
Housing and Land Use Regulatory Board and not the RTC which had jurisdiction
over the subject matter of the action; and (2) the Compromise Agreement was
unenforceable because it was only Francisca Mahusay who signed the Agreement on
October 13, 1989, without the consent of her husband Juanito Mahusay.In its Decision dated December 20, 2001, the CA upheld the jurisdiction of
the RTC. The CA ratiocinated that respondent’s action was one for Specific
Performance with Damages, which is in the nature of ordinary money claims filed
by the unpaid seller against the buyer, that should be litigated in the regular
court. Besides, petitioners were estopped from questioning the court’s
jurisdiction since, by the act of filing an answer and other pleadings, they
were deemed to have submitted themselves to the jurisdiction of the court.[6] The CA, however, saw merit in the
contention that the Compromise Agreement dated October 13, 1989 was not valid
considering that it was entered into by petitioner Francisca Mahusay alone.
Since the Agreement involved the conjugal properties of petitioners, Francisca
could not bind her husband, who never gave his consent to the Agreement.
But the CA noted that petitioners never denied the execution of the contracts
to sell and they admitted the debts owing to respondent. Thus, it ruled that
petitioners should pay respondent the unpaid amortizations for the lots they
purchased from it. The dispositive portion of the CA Decision reads, as follows:
WHEREFORE, premises considered[,] the appealed Decision
dated November 29, 1995, Regional Trial Court of Malabon, Branch 73, in Civil
Case No. 1433-MN is hereby AFFIRMED with
MODIFICATION, declaring the Agreement on October 13, 1989 or
Exhibit “C” to be NULL AND VOID AB INITIO and
DELETING the award of actual damages in the amount of
P1,000,000.00. Accordingly, Appellants are hereby ordered to pay Appellee all
the unpaid amortization including amortization yet to be paid until the
expiration of the contract to sell. Costs against Appellants. [7]
The CA Decision became final and executory, and entry of judgment was made in
due course on January 19, 2002.[8]
Thereafter, in the execution of the Decision, the parties disagreed,
particularly in the computation of the amount to be paid by petitioners.
On May 6, 2004, respondent filed a Motion for Clarification of the CA
Decision. It prayed for the inclusion of the penalties and interest in the
computation of unpaid amortizations, which it claimed is customary in real
estate business and compliant with the Contracts to Sell, for the proper
execution and implementation of the CA Decision.
Petitioners opposed the motion by way of a Reply dated May 15, 2004. [9]
On October 11, 2004, the CA issued a Resolution, as follows:
Upon consideration of the Motion for Clarification[,] dated May 6, 2004, of
the plaintiff-appellee, and the Reply of the defendants-appellants dated May 15,
2004, the Court holds by way of clarification of the dispositive portion of our
Decision of December 20, 2001, which reads:“WHEREFORE, premises considered[,] the appealed Decision
dated November 29, 1995, Regional Trial Court of Malabon, Branch 73, in Civil
Case No. 1433-MN is hereby AFFIRMED with
MODIFICATION, declaring the Agreement on October 13, 1989 or
Exhibit “C” to be NULL AND VOID AB INITIO and
DELETING the award of actual damages in the amount of
P1,000,000.00. Accordingly, Appellants are hereby ordered to pay Appellee all
the unpaid amortization including amortization yet to be paid until the
expiration of the contract to sell. Costs against Appellants.SO ORDERED.”
that the said decision includes the payment of all penalties and interest due
on the unpaid amortizations, under [C]ontract to [S]ell No. 874 dated August 1,
1975 and [C]ontract to [S]ell No. 831 dated May 14, 1973, which is customary in
the real [e]state business and in accordance with the provisions of the
contracts. [10]
On November 9, 2004, petitioners filed a Motion to Delete and Withdraw the
Resolution for the Amendment and Modification of Original Decision.[11] Petitioners contended that a simple
reading of the Motion for Clarification would show that it was not intended to
clarify but to amend the Decision to include the payment of 12% interest/penalty
per annum in the payment of the amortizations. They argued that the inclusion of
12% interest per annum is a very serious and material amendment, because under
the original Decision, petitioners would be required to pay only P352,992.00,
which is the amount of the unpaid amortizations for the said lots; while in the
Amended Decision, they would be liable for P5,175,688.59, per computation made
by respondent. The motion, ostensibly for clarification, filed by respondent
more than two (2) years after the receipt of the original Decision, should not
have been granted, according to petitioners.
On July 7, 2005, the CA issued a Resolution denying the aforesaid Motion to
Delete and Withdraw the Resolution for lack of merit. The appellate court said
that the Decision promulgated on December 20, 2001 has not been amended but only
clarified in the Resolution dated October 11, 2004.[12] Undaunted, petitioners again filed an
Amended Motion to Delete and Withdraw the Resolution for the Amendment and
Modification of the Original Decision on July 14, 2005, and another motion to
delete on July 27, 2005.
Acting on the twin motions, the CA issued the assailed Resolution on
September 11, 2007, denying the same on the ground that the allegations set
forth by petitioners therein were all considered and passed upon by the court in
its Resolution dated October 11, 2004. [13]
Aggrieved, petitioners filed the instant petition.
Petitioners claim that respondent’s Motion for Clarification, which was
belatedly filed, does not really intend to clarify, but to reconsider, alter,
and amend the original Decision of the CA, in contravention of the principle of
immutability of judgments. Thus, they argue that the CA Resolution of October
11, 2004 unduly expanded and amended its final and executory Decision of
December 20, 2001, in gross violation of this principle.
We disagree.
It is a settled rule is that a judgment which has acquired finality becomes
immutable and unalterable; hence, it may no longer be modified in any respect
except only to correct clerical errors or mistakes.[14]
Clarification after final judgment is, however, allowed when what is involved
is a clerical error, or not a correction of an erroneous judgment, or
dispositive portion of the Decision.[15]
Where there is an ambiguity caused by an omission or mistake in the dispositive
portion, the court may clarify such ambiguity, mistake, or omission by an
amendment; and in so doing, it may resort to the pleadings filed by the parties,
the court’s findings of facts and conclusions of law as expressed in the body of
the decision. [16]
In the case at bar, there is no dispute that, in 1973 and 1975, petitioners
entered into two Contracts to Sell with respondent, respectively for the
purchase of several lots in Aurora Subdivision, Malabon, Metro Manila.
Petitioners’ obligation to pay the purchase price for the lots was never denied.
Accordingly, the contractual stipulation that petitioners shall pay the monthly
amortizations is binding and enforceable. It is the law between the parties.
Petitioners stopped paying the amortizations in October 1978, leaving a total
unpaid balance of P352,992.00 as of January 30, 1979.[17] Since rescission of the contracts was not
an option for petitioners, the latter negotiated with respondent for a final
chance to pay off their obligations. Thus, a settlement was arrived at and a
Compromise Agreement was executed, which, unfortunately, was signed by Francisca
Mahusay alone. The terms of the Compromise Agreement were again breached by
petitioners, prompting respondent to file an action for Specific Performance. As
it turned out, the CA nullified the Compromise Agreement, but held petitioners
liable for the payment of all the unpaid amortizations, including amortizations
yet to be paid, until the expiration of the contract. Apparently, the CA was
silent on the payment of the interest/penalty for the delay in payments, which
led to the Motion for Clarification filed by respondent.
Based on the foregoing facts and circumstances, the Court finds no reversible
error in the CA Resolution dated September 11, 2007, denying the Motion to
Withdraw the Resolution. Likewise, the CA committed no reversible error in its
Resolution dated October 11, 2004, clarifying the original Decision.
Respondent’s Motion for Clarification did not really partake of the nature of a
motion for reconsideration, as to amend the December 20, 2001 Decision. There
was nothing substantial to vary, considering that the issues between the parties
were deemed resolved and laid to rest. It is unmistakably clear that petitioners
do not deny the execution of the Contracts to Sell and, in fact, admit their
liability for the unpaid amortizations of the lots purchased. The persistent
violations of the contracts and the continuous delay in petitioners’ payments
cannot simply be overlooked. There was a compelling reason for the CA to clarify
its original Decision to include the payment of all penalties and interest due
on the unpaid amortizations, as provided in the contracts. Considering that the
validity of the contracts was never put in question, and there is nothing on
record to suggest that the same may be contrary to law, morals, public order, or
public policy, there is nothing unlawful in the stipulation requiring the
payment of interest/penalty at the rate agreed upon in the contract of the
parties. [18]
The Court further notes that petitioners are in actual/physical possession of
the properties and enjoying the beneficial use thereof, despite the payment of
only P133,872.76, as of January 30, 1979.[19] It would be grossly unfair for respondent
to be deprived of the amount it would have received from the sale of their
properties, while petitioners benefited from the use and continued possession of
the properties even if no payments were made by them since October 1978. It is a
basic rule in law that no one shall unjustly enrich oneself at the expense of
another. Indeed, to allow petitioners to keep the properties without paying for
them in full amounts to unjust enrichment on their part.[20] The fair market value of the land has
tremendously increased over the past years. It is, therefore, just, fair, and
equitable that petitioners be made to pay interest/penalty for the delay in
their payments.
Finally, the Court notes that this case has dragged on for many years since
1978. In order to writ finis to this protracted litigation between the parties,
we resolve the case in accordance with jurisprudence on the matter. Undeniably,
the instant case is a sale of real property where the purchase price is not paid
in full. The unpaid seller’s remedy is either an action to collect the balance
or to rescind the contract within the time allowed by law. Since rescission is
no longer an option considering that petitioners have been in possession of the
properties for a considerable period of time, substantial justice dictates that
respondent be entitled to receive the unpaid balance of the purchase price, plus
legal interest thereon.[21] In line with
our ruling in Eastern Shipping Lines, Inc. v. Court of Appeals,[22] the legal interest to be paid on the
amount shall be 12% per annum, which shall commence from April 18, 1990, when
respondent filed the Complaint for Specific Performance with the RTC, Branch 73,
Malabon, in Civil Case No. 1433-MN, which shall be considered as judicial
demand, until the finality of this Decision. Another 12% interest per annum
shall be paid on the amount due and owing as of and from the date of finality of
the Decision until full payment.
WHEREFORE, the petition is DENIED. The
Resolution of the Court of Appeals dated September 11, 2007 is
AFFIRMED with MODIFICATION. The trial court is
directed to compute the unpaid balance of the purchase price of each contract
(which is the unpaid amortization including amortizations yet to be paid until
the expiration of the Contracts to Sell) with dispatch. The legal interest to be
paid on said amount is TWELVE PERCENT (12%) per annum, which shall commence from
April 18, 1990, when judicial demand was made on petitioners. Another 12%
interest per annum shall be paid on the amount due and owing as and from the
date of finality of this Decision until full payment would have actually been
made.
SO ORDERED.
Carpio, (Chairperson), Peralta, Abad, and
Mendoza, JJ., concur.
[1] Rollo, pp. 33-36.
[2] Lot No. 29, Block 29, with an area
of 330 sq m; id. at 53.
[3] Lots Nos. 2, 3, 4, 5 & 6,
Block 29, with a total area of about 1,642 sq m; id. at 55.
[4] Id. at 109.
[5] Id. at 63.
[6] Id. at 115.
[7] Id. at 119.
[8] Id. at 120.
[9] Id. at 124.
[10] Id. at 126-127.
[11] Id. at 128.
[12] Id. at 47.
[13] Id. at 33.
[14] Johnson & Johnson
(Phils.),Inc. v. Court of Appeals and Alejo M. Vinluan, G.R. No. 102692,
September 23, 1996, 330 Phil. 856, 857.
[15] Department of Budget and
Management v. City Government of Cebu, G.R. No. 127301, March 14, 2007, 518
SCRA 300, 314.
[16] Ilacad v. Court of
Appeals, 168 Phil. 465, 474 (1977).
[17] Rollo, p. 130.
[18] Castelo v. CA, G.R. No. 96372, May 22, 1995, 244 SCRA 180.
[19] Rollo, p. 59.
[20] Soliva v. The Intestate Estate of Marcelo M. Villalba, G.R. No.
154017, December 8, 2003, 417 SCRA 277.
[21] Id. at 279.
[22] G.R. No. 97412, July 12, 1994, 234 SCRA 78.