SPOUSES CARLOS DAVID AND TERESITA DAVID, AND JESUS B. PASION, PETITIONERS, VS. HON. OSCAR C. FERNANDEZ, IN HIS CAPACITY AS PRESIDING JUDGE OF THE COURT OF FIRST INSTANCE OF BULA…

On March 7, 1980, a
gravel and sand truck driven by petitioner Jesus B. Pasion
and owned and operated by his co-petitioners, Spouses Carlos David and Teresita David, hit Paulino Mananghaya in front of Mantrade
Building, Epifanio de los
Santos Avenue, Makati, Metro Manila, resulting in the
latter’s death.  Subsequently on May 25,
1980, Paulino’s wife, Francisca Lagman
Mananghaya, in her own behalf and as natural guardian
of her minor children Noel, Nolly and Joy,
(hereinafter private respondents) filed before the then Court of First Instance
(CFI) of Bulacan an action for damages
docketed as Civil Case No.
1136-B against petitioners.

For failure to file their answer despite service of summons,
petitioners as defendants in said Civil
Case No. 1136–B were declared in default.  Private respondents as plaintiffs were
allowed to present their evidence ex–parte, after
which a decision was rendered on April 10, 1981^[1]
ordering petitioners to pay private respondents jointly and severally the amount of P100,000.00 as moral damages;
P80,000.00 as exemplary damages:  P100,000.00 as actual and compensatory
damages; P10,000.00 as attorney’s fees plus costs.  A copy of said decision was received by
petitioners on April 24, 1981.

Petitioners filed a motion for new trial, which was denied in the
lower court’s order of June 5, 1981^[2] for having been filed one day
late.  In the same Order, the court
granted private respondents’ prayer for the issuance of a writ of
execution.  A Writ of Execution^[3]
dated June 10, 1981 was
correspondingly issued directing the Provincial Sheriff of San
Fernando, Pampanga to cause
to be made of the goods and chattels of petitioners the sums awarded to private respondents in respondent court’s
decision of April 10, 1981.  Consequently, some personal properties of the
spouses David were levied upon and sold at public auction, the proceeds of
which amounting to P12,000.00 were subsequently delivered to private
respondents.

Having received a copy of the Order of June 5, 1981 only on
September 1, 1981, petitioners filed on the same day a motion for
reconsideration of the June 5, 1981 Order and a motion to quash the writ of
execution dated June 10, 1981, calling the attention of the lower court to the
fact that the 30th day of the reglementary period for
the filing of an appeal fell on a Sunday so that the filing of the motion on
the 31st day was nevertheless still within the reglementary
period for appeal.  On February 8, 1982, the lower court
issued an order^[4]
reconsidering its previous order of June
5, 1981, granting petitioners’ motion for new trial and recalling
the writ of execution dated June 10,
1981.

Resultantly, petitioners were allowed to file their Answer with
Counterclaim for damages against private respondents, who countered with a
Motion to Dismiss Counterclaim and Reply to Answer.  The latter’s motion to dismiss was denied by
the lower court.

On June 5, 1982,
petitioners filed a Motion for Restitution which was resolved by respondent
lower court in its assailed Order dated June
8, 1982,^[5]
reading thus:

O R D E R

Defendants’ properties levied in execution are hereby ordered to be
returned to them pending new trial.

In the event that this could not be done, defendants may, in the
event of favorable judgment, go after plaintiffs’ bond.

SO ORDERED.

Baliuag, Bulacan,
June 8, 1982.

OSCAR
C. FERNANDEZ

J
u d g e

In their motion for reconsideration of the aforequoted
Order, petitioners manifested that they are in accord with the first paragraph
of said order but seek a reconsideration of the second paragraph by setting the
same aside and ordering the return of the proceeds of P12,000.00 obtained from
the sale of their personal properties considering that private respondents have
not posted a bond as a condition precedent to the taking of said properties as
the same was done pursuant to a decision believed by the private respondents to
be final and executory but which later turned out not
to be so in view of the allowance of petitioners’ motion for new trial by the
respondent lower court.

Respondent court denied petitioners’ aforesaid motion for
reconsideration in its second assailed Order dated December 1, 1982 on the ground that a new trial had been
ordered as early as February 8, 1982.

Hence this petition seeking to annul and set aside the two
aforementioned Orders of respondent judge, namely:  the Order dated June 8, 1982 which required
the return of the properties of the petitioners levied upon in execution or, in
the event that this could not be done, for petitioners to go after private
respondents’ bond in case of a favorable judgment; and the Order dated December
1, 1982 denying petitioners’ motion for reconsideration of the June 8, 1982
order.  In addition, petitioners seek to
enjoin respondent court from further proceeding with Civil Case No. 1136-B
except to issue a corresponding order setting aside the herein assailed Orders
of June 8, 1982 and December 1, 1982 and ordering private respondents to return
to Spouses Carlos David and Teresita David the
proceeds of the public auction sale of their personal properties in the sum of
P12,000.00.

Petitioners submit that:

“1.  The Hon. Respondent
Court acted without or in excess of its jurisdiction and/or with grave abuse of
its discretion amounting to lack of jurisdiction when it issued the Order of
June 8, 1982 directing that in the event return of the personal properties of
Petitioners Spouses could not be done by Private Respondents, Petitioners
spouses may, in the event of a favorable judgment go after Private Respondents’
bond, because there is no bond filed by Private Respondents in said Civil Case
No. 1136-B since said personal properties of Petitioners Spouses were taken by
the Sheriff from them by virtue of a writ of execution (Annex G) and said writ
of execution was set aside and declared null and void by Hon. Respondent Court
in its Order of February 8, 1982 (Annex L).

2.  The Hon. Respondent Court
acted without or in excess of its jurisdiction and/or with grave abuse of
discretion amounting to lack of jurisdiction when it issued its order of
December 1, 1982 denying Petitioners’ Motion for Reconsideration of said Order
of June 8, 1982, for being contrary to law, established jurisprudence on the
matter and an outright denial of substantial justice to Petitioners.”^[6]

Petitioners maintain that the setting aside of the writ of
execution by the lower court naturally entitled them to recover from private
respondents their personal properties which were prematurely and improvidently
levied upon on execution, or to the reimbursement by private respondents of the
proceeds of the auction sale in the sum of P12,000.00 pending the hearing on
the merits of Civil Case No. 1136-B. 
They contend that in providing for an alternative in its assailed order
in the event restitution is not possible, the lower court unduly deprived them
of their substantial right without due process as there was no bond to speak of in the first place.

On the other hand, private respondents submit that the lower
court, under the circumstances obtaining in this case, was merely exercising
its sound judicial discretion in not ordering restitution it appearing that the
personal properties levied upon on execution were already sold at public
auction and the proceeds thereof given to them, who, due to the untimely demise
of the sole breadwinner in their family were left orphaned and destitute.  Furthermore, petitioners are barred by laches for not taking their legal option to oppose the levy
and public sale of their personal properties which took place while their
motion for new trial was still pending resolution by the lower court and it was
only on June 5, 1982 or almost a
year after the levy was made, that they moved for the return of the properties
levied upon.

We rule for the petitioners. 
Although the Court is aware of private respondents’ sad plight, having
suffered the untimely loss of the alleged sole breadwinner of the family,
nevertheless, the Court must go by the precepts of substantive as well as
procedural law in resolving the controversy at bar for to do otherwise would be
tantamount to pre-empting the lower court in its judgment in Civil Case No.
1136-B wherein a new trial had been ordered as a result of the granting of
petitioners’ motion for new trial therein.

As provided under Section 5 of Rule 37 of the Revised Rules of
Court:  “If a new trial be granted in accordance with the
provisions of this rule, the original judgment shall be vacated, and the action
shall stand for trial de novo; but the recorded evidence taken upon
the former trial so far as the same is material and competent to establish the
issues, shall be used at the new trial without retaking the same.”

The law is unmistakably clear that once a new trial is granted under aforesaid Rule, the original
judgment is vacated.  The phrase “to
vacate” applied to a judgment means “to annul, to render void.”^[7]

As petitioners’ motion for new trial was subsequently granted by
the respondent court, this resulted in the nullification of its judgment by
default dated April 10, 1981 against petitioners in said civil case, including all the
consequential effects thereof, to wit: 
the Writ of Execution, the corresponding levy on the personal properties
of petitioners and the public auction
sale.

The Court thus finds validity and strength in petitioners’ claim
for restitution of the P12,000.00 proceeds of the sale on execution of
petitioners’ personal properties levied upon pursuant to a writ of execution
which was subsequently recalled due to the granting of a new trial in the subject civil case.  Considering that the motion for restitution
was filed while the subject civil case was still undergoing trial, a stage
wherein the rights and obligations of the parties have not yet been determined,
it would be unfairly enriching the private respondents, even temporarily, if
they are allowed to keep possession of the proceeds of the sale of petitioners’
personal properties in the amount of P12,000.00.  As Civil Case No. 1136-B then stood, there
has yet been no adjudication of rights and obligations between the parties.  Furthermore, there was never a plaintiff’s
bond to speak of in the first place against which petitioners may proceed in
case of a favorable judgment since the writ of execution was issued pursuant to
a judgment then thought to be
final and executory.

WHEREFORE, in view of the foregoing considerations, the second
paragraph of the Order of
respondent court dated June 8, 1982 allowing petitioners as defendants therein
in case of a favorable judgment to go after the plaintiffs’ bond if restitution
was not effected; and the Order of December 1, 1982 are hereby SET ASIDE.  Private respondents are hereby ORDERED to
return to petitioners Spouses Carlos David and Teresita
David the proceeds of the public auction sale of their personal properties in
the sum of P12,000.00.

SO ORDERED.

Gutierrez, Jr., Feliciano, Bidin, and Cortes, JJ., concur.

^[1]
Rollo, p. 29.

^[2]
Rollo, p. 45.

^[3]
Rollo, p. 46.

^[4]
Rollo, p.
61.

^[5]
Rollo, p. 74.

^[6]
Rollo, p. 17.

^[7]
Castillo vs. Filtex International Corporation,
124 SCRA 900, 903; Bautista vs. Johnson, 2 PHIL 230.