SPOUSES JOVITO REBULDELA AND CRISTINA MAPUE, PETITIONERS, VS. HON. INTERMEDIATE APPELLATE COURT, RICARDO P. TENSUAN, JUDGE, RTC BR. 83, QUEZON CITY, MM, ATTY. JULIAN R. VITUG, R…

Rebuldelas versus Intermediate Appellate Court

The Case

This is a petition for review on certiorari brought by the spouses Jovito Rebuldela and Cristina Mapue against the Intermediate Appellate Court, the trial judge who rendered the challenged orders, and the mortgagee and his counsel. The petitioners were the mortgagors who lost below; they ask the Supreme Court to set aside the appellate decision that dismissed their petition for certiorari and prohibition, and to undo the trial court's order correcting its own judgment and the writ of execution issued afterward. The case matters for two reasons: it fixes the metes and bounds of a court's power to amend its judgment before finality, and it restates the weight owed to notarized contracts against bare oral testimony.

Procedural History

The petitioners filed an action in the Regional Trial Court of Quezon City to set aside an extrajudicial foreclosure and sheriff's sale, and for redemption with consignation, on the ground of alleged fraud. Judgment was rendered on October 22, 1982. On motion of the private respondent, the trial court issued an order on November 12, 1982 correcting the first lines of the dispositive portion so that the plaintiffs, not the defendants, were ordered to pay. The private respondents then moved for execution; the petitioners moved to quash; the trial court denied the motion to quash in its order of September 2, 1983.

The petitioners then went up to the Intermediate Appellate Court on a petition for review by certiorari with prohibition or preliminary injunction, arguing that the trial judge gravely abused his discretion in correcting the decision ex parte, that is, without notice to them. The appellate court dismissed the petition in a decision promulgated on September 26, 1984, and denied reconsideration in a resolution promulgated on April 5, 1985. Hence the petition for review on certiorari before the Supreme Court, which gave due course and issued a temporary restraining order enjoining enforcement of the judgment.

Facts

On February 16, 1981, the petitioners obtained a loan of 19,500 pesos from the private respondents and, as security, executed a real estate mortgage over a parcel of land covered by a transfer certificate of title. On December 22, 1981, the loan was increased to 32,000 pesos by an amendment to the mortgage. The petitioners failed to pay within the stipulated period, so the private respondents asked the Sheriff of Quezon City to foreclose the mortgage extrajudicially. Notice of the sheriff's sale was issued and duly published in a newspaper. At the auction there were no other bidders; the private respondents submitted a bid of 46,835 pesos and the corresponding sheriff's certificate of sale was issued in their favor and annotated on the title.

On February 12, 1982, the petitioners sued to set aside the foreclosure and sale, and to redeem, consigning 24,000 pesos. Before filing his answer, the private respondent moved to withdraw the deposit, and the court granted the motion. On October 22, 1982, the trial court rendered judgment, but its dispositive portion mistakenly ordered the defendants, the mortgagees, to pay the plaintiffs, the mortgagors.

On November 8, 1982, the private respondent filed a manifestation with motion to correct the dispositive portion, pointing out that the plaintiffs should be the ones adjudged to pay. Before the decision became final, the trial court issued its order of November 12, 1982 correcting the first three lines of the dispositive portion to read in favor of the defendants and against the plaintiffs, and correcting a line in the body of the decision, with all other respects standing. Execution followed, the motion to quash was denied, and the appellate court refused to interfere.

Issues

• Whether or not the trial court gravely abused its discretion, amounting to lack of jurisdiction, when it amended its decision ex parte, without giving the petitioners their day in court.
• Whether or not the trial court should have reversed itself because the petitioners had allegedly paid the obligation in full by consigning 24,000 pesos, which the private respondent then withdrew.
• Whether or not the private respondent misrepresented the amount of the obligation as 46,835 pesos when the true obligation was only 24,000 pesos.

Applicable Provisions

The Court anchors the power to amend on the inherent power of courts over their own process, found in paragraph g of Section 5 of Rule 124 of the Rules of Court, which provides:

A court may amend its process and orders so as to make them conformable to law and justice.

This is the textual basis for the correction of the judgment before it became final.

The Court also applies the parol evidence rule, as stated in Rule 130 of the Rules of Court:

When the terms of an agreement have been reduced to writing, it is to be considered as containing all such terms, and, therefore, there can be, between the parties and their successors in interest, no evidence of the terms of the agreement other than the contents of the writing, except in the following cases: (a) Where a mistake or imperfection of the writing is put in issue by the pleadings; (b) Where the validity of the agreement is the fact in dispute. But this rule does not exclude other evidence of the surrounding circumstances to establish a mistake, fraud, or other vice in the contract.

This rule bars the petitioners from adding to or contradicting the clear terms of the notarized mortgage contracts by oral testimony.

Ruling

On the first issue, the Court held that the assertion of grave abuse is untenable. A court has the inherent power to amend and control its process and orders so as to make them conformable to law and justice, and when it finds that the ends of justice would be better served, it may disregard technicalities and amend an order or process that has not become final. Even after finality, clerical errors or mistakes or omissions plainly due to inadvertence or negligence may be corrected or supplied after judgment has been entered. Here the trial court corrected the designation of the parties in the dispositive portion to make it conform with the body of the decision, which was not yet final. The correction rectified clerical errors that interchanged the mortgagors and the mortgagee, and that is beyond dispute within the power of the court.

On the second and third issues, discussed together, the Court held that the records refute the petitioners. The loan of 19,500 pesos was evidenced by a promissory note and secured by an original real estate mortgage, duly notarized. A subsequent additional loan of 12,500 pesos increased the loan to 32,000 pesos, resulting in an amended real estate mortgage, likewise notarized. Under the law, notarial documents are entitled to full faith and credit upon their face; a public document attested through the intervention of a notary public is evidence of the facts therein expressed, enjoys the presumption of regularity, and may be contradicted only by evidence that is clear, convincing and more than merely preponderant. The Court applied the parol evidence rule:

The parol evidence rule forbids any addition to or contradiction of the terms of a written instrument.

Oral testimony cannot prevail over a written agreement, the purpose of the rule being to give stability to written agreements and to remove the temptation and possibility of perjury. The terms of the mortgage contracts were clear and unambiguous, and there was no showing of fraud, mistake, or failure to express the true agreement. As to the alleged misrepresentation, the private respondents convincingly explained that the principal obligation was 32,000 pesos, but with the expenses of the extrajudicial foreclosure, publication costs, interest and attorney's fees, the amount summed up to 46,835 pesos. Finally, the factual findings of the trial court, adopted by the appellate court, are binding on the Supreme Court when supported by substantial evidence.

Doctrine

A court has the inherent power to amend and control its process and orders so as to make them conformable to law and justice, and it may correct clerical errors or mistakes plainly due to inadvertence even after judgment has been entered. Before finality, the court may amend its judgment to make the dispositive portion conform to the body of the decision. A notarized contract is a public document entitled to full faith and credit, and its evidentiary value must be sustained unless impugned by strong, complete and conclusive proof. The parol evidence rule forbids any addition to or contradiction of the terms of a written instrument, and oral testimony cannot prevail over a written agreement. Findings of fact of the trial court, especially when affirmed by the appellate court, are binding on the Supreme Court absent strong and cogent reasons.

Disposition

The petition was denied for lack of merit, and the decision of the Intermediate Appellate Court was affirmed.

Remember This

The one line to memorize: a court may correct a clerical error in its judgment before finality, and a notarized contract stands against mere oral contradiction. Examiners use this case for the extent of a court's power to amend its own judgment and for the parol evidence rule applied to notarized mortgage contracts.