JOSE ARAÑAS AND LUISA QUIJENCIO ARAÑAS, PETITIONERS, VS. HON. EDUARDO C. TUTAAN, AS JUDGE OF THE COURT OF FIRST INSTANCE OF QUEZON CITY, AND UNIVERSAL TEXTILE MILLS, INC., RESPO…

In a decision rendered on May 3, 1971 by the now defunct Court of First
Instance of Rizal, Branch V, at Quezon City, in Civil Case No. Q-4689
thereof, entitled “Jose Arañas, et al. vs. Juanito Castañeda,
et al.,” the said court declared that petitioner Luisa Quijencio as
plaintiff (assisted by her spouse co-petitioner Jose Arañas) was the
owner of 400 shares of stock of respondent Universal Textile Mills, Inc.
(UTEX) as defendant issued “in the names of its co-defendants Gene
Manuel and B.R. Castañeda, including the stock dividends that accrued to
said shares, and ordering defendant Universal Textile Mills, Inc. to
cancel said certificates and issue new ones in the name of said
plaintiff Luisa Quijencio Arañas and to deliver to her all dividends
appertaining to same, whether in cash or in stocks.”

In a motion for clarification and/or motion for reconsideration, respondent UTEX manifested, inter alia,
that “(I)f this Honorable Court by the phrase ‘to deliver to her all
dividends appertaining to same, whether in cash or in stocks,’ meant
dividends properly pertaining to plaintiffs after the court’s declaration of plaintiffs’ ownership of said 400 shares of stock, then as defendant UTEX has always maintained it would rightfully abide
by whatever decision may be rendered by this Honorable Court since such
would be the logical consequence after the declaration or ruling in
respect to the rightful ownership of the said shares of stock.” The
motion for clarification was granted by the trial court which ruled that
its judgment against UTEX was to pay to Luisa Quijencio Arañas the cash
dividends which accrued to the stocks in question after the rendition
of this decision excluding cash dividends already paid to its co-defendants Gene Manuel and B.R. Castañeda which accrued before its decision and could not be claimed by the petitioners-spouses, as follows:

“This in mind, clarification of the dispositive portion of the
decision as aforequoted is indeed necessary, and thus made as to ordain
the payment to plaintiff Luisa Quijencio Arañas of cash dividends which
accrue to the stocks in question after the rendition of this decision.
Cash dividends already paid to defendants which accrued before this
decision may not, therefore, be claimed by plaintiffs.”

Apparently satisfied with the clarification, UTEX neither moved for
reconsideration of the order nor appealed from the judgment.
Subse­quently, the trial court granted the motion for new trial of the
two co-defendants Manuel and Castañeda, and after such new trial, it
rendered under date of October 23, 1972 its decision against them which
was substantially the same as its first decision of May 3, 1971 which
had already become final and executory as against UTEX, declaring
petitioners-spouses the owners of the questioned shares of stock in the
names of aforementioned co-defendants Castañeda and Manuel and ordering
the cancellation of the certificates in their names and to issue new
ones in the names of petitioners.

Co-defendants Castañeda and Manuel appealed this judgment of October
23, 1972 against them to the Court of Appeals (now Intermediate
Appellate Court), which rendered on September 1, 1978 its judgment
affirming in toto the trial court’s judgment. Said co-defendants sought
to appeal the appellate court’s adverse judgment on a petition for
review with this Court, which rendered its Resolution of March 7, 1979
denying the petition for review for lack of merit and the judgment
against the defendants accordingly became final and executory.

At petitioners’ instance, the lower court issued a writ of execution and a specific order of December 5, 1979 directing UTEX

“1. To effect the cancellation of the certificates of stock in
question in the names of B. R. Castañeda and Gene G. Manuel and the
issuance of new ones in the names of the plaintiffs;

“2. To pay the amount of P100, 701. 45 representing the cash
dividends that accrued to the same stocks from 1972 to 1979 with
interest thereon at the rate of 12% per annum from the date of the
service of the writ of execution on October 3, 1979 until fully paid.”

Upon UTEX motion for partial reconsideration alleging that the cash
dividends of the stocks corresponding to the period from 1972 to 1979
had already been paid and delivered by it to co-defendants Castañeda and
Manuel who then still appeared as the registered owners of the said
shares, the lower court issued its order of January 4, 1980 granting
said motion of UTEX and partially reconsidered its order “to the effect
that the defendant Universal Textile Mills, Inc. is absolved from paying
the cash dividend corresponding to the stocks in question to the
plaintiffs for the period 1972 to 1979. ”

Hence, the present action for certiorari to set aside respondent judge’s questioned order of January 4, 1980 as having been issued without jurisdiction and for mandamus
to compel respondent judge to perform his ministerial duty of ordering
execution of the final and executory judgment against UTEX according to
its terms.

The Court finds merit in the petition and accordingly grants the same.

The final and executory judgment against UTEX in favor of petitioners,
declared petitioners as the owners of the questioned UTEX shares of
stock as againsts its co-defendants Castañeda and Manuel. It was
further made clear upon UTEX’ own motion for clarification that all
dividends accruing to the said shares of stock after the
rendition of the decision of August 7, 1971 which for the period from
1972 to 1979 amounted to P100, 701.45 were to be paid by UTEX to
petitioners, and UTEX, per the trial court’s order of clarification of
June 16, 1971 above quoted had expressly maintained “it would rightfully
abide by whatever decision may be rendered by this Honorable Court
since such would be the logical consequence after the declaration or ruling in respect to the rightful ownership of the said shares of stock.”

Consequently, there is no legal nor equitable basis for respondent
judge’s position “that it would indeed be most unjust and inequitable to
require the defendant Universal Textile Mills, Inc. to pay twice cash
dividends on particular shares of stocks.”^[1]
If UTEX nevertheless chose to pay the wrong parties, notwithstanding
its full knowledge and understanding of the final judgment, that it was
liable to pay all dividends after the trial court’s judgment in
1971 to petitioners as the lawfully declared owners of the questioned
shares of stock (but which could not be enforced against it pending the
outcome of the appeal filed by the co-defendants Castañeda and Manuel in
the Court of Appeals), it only had itself to blame therefor.

The burden of recovering the supposed payment of the cash dividends made
by UTEX to the wrong parties Castañeda and Manuel squarely falls upon
itself by its own action and cannot be passed by it to petitioners as
innocent parties. It is elementary that payment made by a judgment
debtor to a wrong party cannot extinguish the judgment obligation of
such debtor to its creditor. It is equally elementary that once a
judgment becomes final and executory, the court which rendered it cannot
change or modify the same in any material aspect such as what
respondent judge has without authority attempted to do with his
questioned order, which would relieve the judgment debtor UTEX of its
acknowledged judgment obligation to pay to petitioners as the lawful
owners of the questioned shares of stock, the cash dividends that
accrued after the rendition of the judgment recognizing them as the lawful owners. (Miranda vs.
Tiangco, 96 Phil. 526 [1995]). Execution of a final and executory
judgment according to its terms is a matter of right for the prevailing
party and becomes the ministerial duty of the court (De los Angeles vs. Victoriano, 109 Phil.12).

ACCORDINGLY, judgment is rendered setting aside the questioned order of January 4, 1980 of respondent judge and a writ of mandamus
is hereby issued commanding said respondent judge to order the
execution of his judgment against respondent Universal Textile Mills,
Inc., pursuant to his first order of June 16, 1971 ordering it to pay
the sum of P100, 701. 45, representing the cash dividends that accrued
to petitioners’ UTEX shares of stock from 1972 to 1979, with interest
thereon at the rate of 12% per annum from the date of service of the
writ of execution on October 3, 1979 until fully paid, as well as to pay
petitioners any subsequent cash dividends that may have been issued by
it thereafter, with interest from due date of payment until actual
payment, and directing the sheriff to satisfy such judgment out of the
properties of respondent UTEX. With costs against respondent UTEX.
This judgment is immediately executory.

Plana, Escolin, Gutierrez, Jr., and De La Fuente, JJ., concur.

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^[1] Record, p. 28.