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DSM Construction and Development Corp. V.
DSM Construction and Development Corp. V.
SYLLABUS
DECISION
TINGA , J : p
This case springs from this Court's Decision dated 2 March 2004 in G.R. No.
153310, Megaworld Globus Asia Inc. v. DSM Construction and Development Corp.
(Megaworld), decided in favor of herein petitioner DSM Construction. Said Decision
having become nal and executory, the corresponding entry of judgment was made on
12 August 2004. This petition centers on attempts, regrettably entertained by
respondent Court of Appeals, to thwart the execution of a nal and executory decision
of this Court.
The Petition for Certiorari 1 assails the Resolution 2 dated 21 February 2005 of
the Court of Appeals in CA-G.R. SP No. 88314. 3 Said Resolution ordered the issuance
of a temporary restraining order (TRO) 4 enjoining the enforcement of an Alias Writ of
Execution 5 issued by the Construction Industry Arbitration Commission (CIAC) 6 in
CIAC Case No. 22-2000 and ordering them to cease and desist from proceeding with
the scheduled execution sale on 1 March 2005 of levied condominium units of the
Salcedo Park condominium project owned by Megaworld Globus Asia, Inc.
(respondent).
The antecedent facts follow.
As can be gleaned from Megaworld, petitioner and respondent entered into
agreements for the construction of a condominium project owned by respondent
called "The Salcedo Park", with petitioner as contractor. In the course of the project's
construction, differences with respect to billings arose between the parties. Petitioner
thus led a complaint for compulsory arbitration before the CIAC claiming payment for
approximately P97 Million as the outstanding balance due from respondent pursuant to
the agreements. On 19 October 2001, the CIAC rendered a decision partially granting
both petitioner's and respondent's claims, with a net award of Sixty Two Million Seven
Hundred Sixty Thousand Five Hundred Fifty Eight Pesos and Forty Nine Centavos
(P62,760,558.49) in favor of petitioner.
This award was a rmed by the Court of Appeals, which however permanently
enjoined petitioner from registering its contractor's lien on all except six (6) units of the
condominium project. 7 This step was in line with respondent's manifestation that the
principal award of P62,760,558.49 in petitioner's favor can be covered by the value of
six (6) condominium units. Seven (7) condominium units, however, were eventually
levied upon as a result of respondent's act of substituting two (2) units for the one
already paid for by the buyer-spouses, Shaul and Rina Golan. 8 The execution sale of the
levied properties did not push through after this Court issued a TRO dated 12 July 2002
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upon respondent's filing of a petition in G.R. No. 153310. HIESTA
Thereafter, the Court promulgated its Decision 9 dated 2 March 2004 a rming
the judgment of the Court of Appeals and lifting the TRO that was then still in effect.
Finding no merit in respondent's motions for reconsideration, 1 0 the Court subsequently
issued an entry of judgment dated 12 August 2004.
Its judgment having become nal and executory, the CIAC issued an Order 1 1
dated 3 November 2004 giving the parties ten (10) working days within which to agree
on the satisfaction of the arbitral award, otherwise a writ of execution will be issued. As
the parties could not come to terms, the CIAC issued an alias writ of execution on 22
November 2004. The alias writ of execution provides in part:
You are hereby commanded, that of the goods and chattels of the
MEGAWORLD GLOBUS ASIA, INC., Respondent, you cause to be made the amount
o f P62,760,558.49 with interest of 6% due on any balance remaining
until the award becomes executory. Thereafter, interest of 12% per
annum shall be applied on any balance remaining until the full amount
is paid ; which Claimant recovered pursuant to the Award promulgated by this
Arbitral Tribunal on 19 October 2001 in Case No. 22-2000 of the Construction
Instrusty Arbitration Commission, together with your lawful fees for the services
of this execution, all in Philippine currency, and that you render the same to said
Claimant, aside from your own fees on this execution, and that you likewise return
this Writ unto this Commission within fteen (15) days from date of receipt
hereof, with your proceedings endorsed thereon. But if su cient personal
property cannot be found whereof to satisfy this execution and lawful fees
thereon, then you are commanded that of the lands and buildings of the said
Respondent you make the said sum of money in the manner required by the Rules
of Court, and make return of your proceedings with this Writ within thirty (30)
days from receipt hereof. 1 2 (Emphasis in the original.)
From the outset, it bears stressing that the subject of petitioner and
respondent's petitions is the execution of a nal judgment a rmed by no less than this
Court. This being so, the appellate court should have been doubly careful about
entertaining an obviously dilatory petition intended merely to delay the satisfaction of
the judgment. Any lower court or tribunal that tri es with the execution of a nal and
executory judgment of the Supreme Court irts with insulting the highest court of the
land. While we do not diminish the availability of judicial remedies to the execution of
nal judgments of this Court, as may be sanctioned under the Rules of Court, such
actions could only prosper if they have basis in fact and in law. Any court or tribunal that
entertains such baseless actions designed to thwart the execution of nal judgments
acts with grave abuse of discretion tantamount to lack of jurisdiction. 2 8 It is the
positive duty of every court of the land to give full recognition and effect to nal and
executory decisions, much less those rendered by the Supreme Court.
The abuse of discretion amounting to lack or excess of jurisdiction in this case
was made manifest by the fact that the appellate court not only took cognizance of the
case and issued the assailed restraining order. It eventually decided the case in
petitioner's (respondent herein) favor as well notwithstanding the dearth of any basis
for doing so.
We rst examine the Alias Writ of Execution dated 22 November 2004. As stated
earlier, the said writ made no quali cation as to speci c classes of property, such as
condominium units, which should be executed upon, much less any denominated
quantity of properties. For this, respondent imputed grave abuse of discretion on the
part of the CIAC. It contends that the Decision dated 14 February 2004 of the Court of
Appeals as a rmed by this Court limited petitioner to six condominium units for the
purpose of satisfying the arbitral award rendered by the CIAC. The CIAC, in issuing the
alias writ which enabled the sheriffs to levy upon three additional units, was said to
have committed grave abuse of discretion it varied its own judgment as against that
affirmed by the Court of Appeals.
Respondent's argument is absurd. It anchors its proposition on the last sentence
of the Decision dated 14 February 2002 of the Court of Appeals which provides:
WHEREFORE , the herein petition is DISMISSED for lack of merit and the
appealed decision of the Construction Industry Arbitration Commission is hereby
AFFIRMED . The writ of preliminary injunction issued against the enforcement of
the September 28, 2001 decision of the Construction Industry Arbitration
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Commission (CIAC) is hereby LIFTED . The writ of preliminary mandatory
injunction ordering private respondent to withdraw its contractor's lien on all,
except six of private respondent's condominium units is hereby made
permanent . 2 9 (Emphasis supplied.)
By concentrating on the last sentence of the above dispositive portion,
respondent ignored the paragraph which precedes it where the Court of Appeals
stated:
However, justice and fair play dictate that the annotation of private
respondent's lien should be limited to six (6) units of its choice and not to all of
the condominium units. As we noted in our January 17, 2002 Resolution, as
clari ed by the January 18, 2002 Resolution, private respondent's claim against
petitioner in the amount of P62 Million can be covered by the value of six (6) units
of the condominium project. 3 0
The reason for the imposition of the six unit limit can be better understood when
viewed in the context of the circumstances which led the Court of Appeals to make
such pronouncement. In fact, respondent itself supplied the rationale when it narrated
in its Comment, 3 1 thus:
DSM, through its counsel, caused the publication in the November 20, 2001
issue of the Philippine Daily Inquirer a paid advertisement announcing that all
units of the Salcedo Park Towers Condominium are subject to its contractor's
lien.
In addition, DSM also caused to be annotated on all condominium
certi cates of title of the Salcedo Park Towers Condominium Entry No. 62921/T
denominated as a "contractor's lien."
Reacting on this adverse and damaging publicity, causes (sic) by DSM,
private respondent led a Supplemental Petition with the Court of Appeals for the
cancellation of said entry.
One of petitioner's [respondent herein] argument in the Supplemental
Petition was that the price range of its units is from P11 million to P13 million.
Thus, just ve or six units would su ce to cover payment of the P62.7 million
award.
The Court of Appeals granted the application for preliminary mandatory
injunction and noted in its Resolution dated January 17, 2002 that:
The validity of the alias writ of execution hinges on its conformity to Section 8(e),
Rule 39 of the Revised Rules of Civil Procedure which states, relative to the amount that
should be specified in the writ of execution:
Sec. 8 (e). In all cases, the writ of execution shall speci cally state the
amount of the interest, costs, damages, rents or pro ts due as of the date of the
issuance of the writ, aside from the principal obligation under the judgment. For
this purpose, the motion for execution shall specify the amounts of the foregoing
reliefs sought by the movant.
A perusal of the alias writ convinces this Court that it complies substantially with
the requirements of law. It states the principal award sought to be satis ed, as well as
the percentage to be imposed thereon as interest. It even speci es the lawful fees that
are due to the sheriffs for the satisfaction of the judgment. 3 6 Respondent makes much
of the fact that petitioner made its own computation of the amount to be satis ed
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which the sheriffs allegedly followed.
Rule 39, Sec. 8(e) cited above precisely requires the movant to specify the
amount sought to be satis ed so the Court fails to see why petitioner should be faulted
for doing so. If the objection hinges on the fact that the exact mathematical
computation did not appear in the alias writ itself, respondent could easily have moved
that said computation be incorporated by the CIAC thereon. Such perceived de ciency
is certainly not sufficient to justify recourse to a special civil action for certiorari to have
the alias writ declared null and void in its entirety.
As to the controversy on the application of the 6% rate of interest, the proper
forum for clarifying the same is the CIAC, not the Court of Appeals. After all, the CIAC
imposed said rate so it puzzles this Court why respondent did not seek enlightenment
therefrom when it led its Motion for Clari cation relative to the purported six-unit limit.
Be that as it may, this Court herein notes that nowhere in any of its jurisprudence had a
legal rate of interest been imposed as a flat rate rather than on a per annum basis.
Our conclusions on the validity of the Alias Writ of Execution stand utterly apart
from those propounded by the Court of Appeals in its 19 April 2005 Decision. Its
rationale, brie y explained in 4 pages, does not appear to consider the ip side of the
arguments raised by respondent. It does not even bother to cite, much less contest, the
arguments raised therein by respondents.
The 19 April 2005 Decision did not dwell on the other arguments posited by
respondent in support of its petition before the Court of Appeals relative to the acts of
the sheriffs in levying particular condominium units in preparation to the auction sale.
To give full resolution to this case, these arguments should be disposed with at this
juncture.
Respondents claimed before the Court of Appeals is that the sheriffs exceeded
their authority when they included ve condominium units fully paid for by buyers in the
notice of execution sale. 3 7 According to respondent, the unrecorded contracts to buy
and sell take precedence over the recorded levy of execution by virtue of the
Subdivision and Condominium Buyers' Protective Decree (PD 957).
The Court is ba ed why respondent is raising this issue and not the purported
buyers themselves. Rule 39, Section 16 3 8 of the Revised Rules of Civil Procedure lays
down the procedure in cases where properties levied upon are claimed by third
persons. It is the third person claiming the property who has to make an a davit of his
title or right to possession thereof. Nowhere is it stated in said section that the
judgment obligor (respondent in this case) has to make the claim on the third person's
behalf. It is peculiar that respondent is belaboring the point when the supposed buyers
themselves did not even appear to lay claim to the levied properties. IESAac
Moreover, respondent's contention that the unregistered buyers' right over the
property is superior to that of the judgment obligor has no basis. The fact that the
contracts to buy and sell are unregistered and the properties in question are still in the
name of respondent underlines the fact that the sales are not absolute. The units are
clearly still owned by respondent and not by the alleged buyers. Under Section 51 of the
Property Registration Decree (PD 1529), the act of registration is the operative act
which conveys or affects the land in so far as third persons are concerned. As provided
by said law:
Sec. 51. . . . no deed, mortgage, lease or other voluntary instrument,
except a will purporting to convey or affect registered land, shall take effect as a
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conveyance or bind the land but shall operate only as a contract between the
parties and as evidence of authority to the Register of Deeds to make registration.
xxx xxx xxx
SO ORDERED.
Puno, Austria-Martinez, Callejo, Sr. and Chico-Nazario, JJ., concur.
Footnotes
1. The relief prayed for included an Extremely Urgent Application for a Temporary
Restraining Order (TRO) and/or Writ of Preliminary Injunction; dated 23 February 2005;
Rollo, pp. 3-23.
2. Penned by Associate Justice Vicente S.E. Veloso, concurred in by Associate Justices
Roberto A. Barrios and Amelita G. Tolentino; Id. at 118-121.
3. Megaworld Globus Asia Inc., v. Construction Industry Arbitration Commission, et al.
4. Effective for sixty days unless sooner lifted by the Court of Appeals.
5. Dated 22 November 2004; Rollo, pp. 74-75.
6. The Arbitral Tribunal composed of Ernesto S. De Castro as Chairman with Regulus E.
Cabote and Lauro M. Cruz as members.
7. Rollo, p. 42.
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8. Id. at 6, 45.
9. Rollo, pp. 47-71.
10. Respondent's rst motion for reconsideration was denied with nality by this Court's
Second Division in a Resolution dated 19 May 2004. Its second motion for
reconsideration denominated as a "Motion to Suspend Procedural Rules in the Higher
Interest of Substantial Justice and to Refer the Case En Banc" was again denied in a
Resolution dated 2 August 2004. Its third motion for reconsideration dated 7 August
2004 was "Note[d] Without Action" in view of the resolution dated 2 August 2004 which
ordered that the entry of judgment be made forthwith.
11. Rollo, pp. 72-73.
12. Id. at 74.
13. Id. at 76-77.
14. Supra note 8.
15. Docketed as CA-G.R. SP. No. 88314; the complaint is denominated as a Petition for
certiorari and prohibition with prayer for preliminary injunction and temporary restraining
order.
16. The orders of the CIAC sought to be nulli ed are the following: (1) Order dated 3
November 2004 as clari ed in the Order dated 3 December 2004; (2) Alias Writ of
Execution dated 22 November 2004; and (3) Order dated 11 January 2005.
17. Rollo, pp. 467-479.
18. Id. at 464.
19. Id. at 352-354.
20. Id. at 617.
21. Id. at 618.
22. Id. at 626-664.
23. Id. at 626-630.
24. Id. at 3.
25. Maqui v. Court of Appeals, G.R. No. L-41609, 24 February 1976, 69 SCRA 368, 374.
26. Rollo, p. 627.
27. Petitioner led a Supplemental Petition [With Leave of Court] dated 7 July 2005 which
enumerated the transactions, occurrences and events that transpired since the ling of
the petition; Id. at 593-614.
28. By grave abuse of discretion is meant capricious and whimsical exercise of judgment
as is equivalent to lack of jurisdiction. Mere abuse is not enough. It must be grave abuse
of discretion as when the power is exercised in an arbitrary or despotic manner by
reason of passion or personal hostility and must be so patent and so gross as to
amount to an evasion of a positive duty or to a virtual refusal to perform the duty
enjoined or to act at all in contemplation of law. See e.g., PNB v. Timbol , G.R. No.
157535, 11 February 2005.
39. See e.g., Siy v. NLRC, G.R. No. 158971, 25 August 2005.
40. See e.g., Natalia Realty v. Hon. Rivera, G.R. No. 164914, 5 October 2005.