SANCHO R. JACINTO, SUBSTITUTED BY HIS HEIRS, NAMELY ERNESTO AND RUBEN JACINTO, AND DOMINGO C. BASCARA, PETITIONERS, VS. INTERMEDIATE APPELLATE COURT, PILAR T. DEL ROSARIO AND MA…

Jacinto versus Del Rosario

The Case

This is a petition for review on certiorari of a decision of the Intermediate Appellate Court, now the Court of Appeals, which affirmed an order of the Court of First Instance of Rizal, now a Regional Trial Court, denying a motion for a second alias writ of execution. The petitioners, Sancho Jacinto, later substituted by his heirs Ernesto and Ruben Jacinto, and Domingo Bascara, were the prevailing plaintiffs in an action for forcible entry and detainer. The private respondents, Pilar del Rosario and Mariano del Rosario, were the defendants who lost that case. The dispute is not about who won the ejectment suit. It is about whether a judgment based on a compromise agreement may still be executed by mere motion after the lapse of the five-year period fixed by the Rules of Court, when the parties had agreed to defer enforcement and the debtor had repeatedly asked for time to pay. The case matters because it teaches how the five-year period for execution by motion is counted, and when equity and the debtor's own delay will extend it.

Procedural History

The action for forcible entry and detainer was filed before the Municipal Trial Court, later the City Court and now the Metropolitan Trial Court, Branch Three of Quezon City. The plaintiffs prevailed. The defendants appealed to the Court of First Instance of Rizal, Branch Four. To abbreviate the proceedings, the parties entered into an amicable settlement, and on March 17, 1971, the Court of First Instance rendered a judgment approving the compromise agreement. When the defendants defaulted, the trial court granted execution in an order dated August 26, 1972. The parties then agreed to continue the installment payments, which stalled enforcement. Upon a second default, the trial court again granted an alias writ of execution in an order dated January 2, 1973, and an alias writ issued on March 26, 1973, which the sheriff's return of February 26, 1974 showed as only partially satisfied. On September 20, 1980, the petitioners filed a motion for a second alias writ of execution. The trial court denied it, and denied reconsideration, on the ground that the judgment had become final and executory for more than five years and could be enforced only by a separate action. The petitioners elevated the matter to the Intermediate Appellate Court, which affirmed. They then came to the Supreme Court by petition for review on certiorari.

Facts

The compromise agreement had two parts. Under its first section, the defendants bound themselves, jointly and severally, to pay the plaintiffs one hundred thousand pesos plus five thousand pesos as attorney's fees, in installments: four thousand pesos upon signing, ten thousand pesos on or before March 1971, and two thousand pesos on the first of each month thereafter until fully paid. Under its second section, the parties agreed that in case of any default, immediate execution would follow without need of a separate action, and the original amount awarded, one hundred seventeen thousand nine hundred thirty-six pesos and fifty-four centavos plus five thousand pesos as attorney's fees, would automatically be revived as the basis of payment, with interest at eight percent per annum on the effective balance.

The defendants defaulted more than once. The petitioners obtained a writ of execution in 1972, but the respondents pleaded for a chance to keep paying by installments, and the petitioners compassionately allowed them to resume, which they did. When they defaulted again, the petitioners obtained an alias writ in 1973, which was only partially satisfied. Payments continued, but on August 10, 1979, the balance due was thirty-five thousand four hundred seventy-two pesos and forty-five centavos, and from that date the respondents stopped paying altogether despite repeated reminders, the last sent by registered mail on August 12, 1980.

On September 20, 1980, the petitioners moved for a second alias writ of execution. The trial court denied the motion, holding that the judgment had been final for more than five years and could be enforced only by a separate action. The appellate court affirmed, citing the rule that a writ of execution issued after five years is void and that failure to object does not validate it, because jurisdiction is conferred by law and not by the will of the parties.

Issues

• Whether or not the motion for an alias writ of execution filed on September 20, 1980 was filed within the five-year period for execution of a judgment by mere motion under Section 6 of Rule 39.
• Whether or not the agreement of the parties to defer or suspend enforcement, granted at the debtor's request and for the debtor's benefit, tolled or suspended the running of that five-year period.

Applicable Provisions

Section 6 of Rule 39 of the Revised Rules of Court provides:

A judgment may be executed on motion within five (5) years from the date of its entry or from the date it becomes final and executory. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action.

This is the provision whose five-year period the petitioners are accused of having exceeded, and which the Court must apply to the compromise judgment.

Article 1144 of the Civil Code provides:

The following actions must be brought within ten years from the time the right of action accrues: (1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a judgment.

This fixes the ten-year period within which a judgment may be enforced by ordinary action after the five-year period for execution by motion has lapsed.

Ruling

On the first issue, the Court held that the reckoning point depends on the terms of the compromise agreement. As a general rule, a judgment based on a compromise is by its nature final and immediately executory, so prescription tolls not from its entry but from its rendition. But the Court found that the two sections of this agreement are not identical in enforceability. The first section, on the manner of payment, was immediately executory. The second section, the acceleration clause, was not, because its enforceability depended on the occurrence of a default which might or might not happen. Since the motion sought to enforce precisely that second section, the issue of enforceability is limited to it.

On the second issue, the Court held that while there is no default, the acceleration clause remains dormant, and the prescriptive period does not begin to run until the activating factor of default occurs. The Court acknowledged several prior defaults, but held they became immaterial when the petitioners, moved by the respondents' pleas, allowed them to resume paying by installments. It was as though no default had previously occurred, leaving the clause still dormant and stalling the five-year period. The Court also invoked equity, noting that the delay of more than eight years benefited the respondents, and that the counting should commence only after August 10, 1979, when the respondents totally stopped paying. It stated the governing principle:

In computing the time limited for suing out an execution, the time during which execution is stayed should be excluded, and the time will be extended by any delay occasioned by the debtor.

The Court added that the statute of limitations was not devised against those who wish to act but cannot do so for causes beyond their control, and found no indication that the petitioners had slept on their rights.

Doctrine

A judgment based on a compromise is final and immediately executory, and the period for its execution by motion is generally counted from its rendition, not its entry. But where the compromise contains an acceleration clause whose operation depends on a future default, that clause remains dormant until default occurs, and the five-year period under Section 6 of Rule 39 does not begin to run until then. A prior default that the creditor condones by allowing the debtor to resume paying installments becomes immaterial, as though no default had occurred. In computing the time for suing out execution, the time during which execution is stayed is excluded, and the period is extended by any delay occasioned by the debtor. After the five-year period, and before the ten-year period under Article 1144 of the Civil Code bars the judgment, enforcement must be by ordinary action.

Disposition

The Court reversed and set aside the decision of the appellate court and ordered the proper Regional Trial Court of Quezon City to issue an alias writ of execution to enforce the judgment in the civil case. The petitioners won.

Remember This

Memorize the line that the time during which execution is stayed is excluded, and the period is extended by any delay occasioned by the debtor. Examiners use this case to test the reckoning of the five-year period for execution by motion, the dormant acceleration clause in a compromise judgment, and the equitable tolling of that period when the delay benefits the debtor.