G.R. No.

138131 March 12, 2002

SOLIDBANK CORPORATION, petitioner,

vs.
COURT OF APPEALS and PRUDENTIAL GUARANTEE AND ASSURANCE, INC., respondents.

YNARES-SANTIAGO, J.:

This is a petition for review under Rule 45 of the Rules of Court, seeking to annul the January 27,
1999 Decision and the April 13, 1999 Resolution of the Court of Appeals1 in CA-G.R. SP No. 48982
which reversed and set aside the Order dated August 28, 1998 and the July 10, 1998 Writ of
Execution issued by the Regional Trial Court of Manila, Branch 49,2 in Civil Case No. 94-70505.

The controversy involves the execution of the July 27, 1995 Decision3 of the Regional Trial Court of
Manila, Branch 49, in Civil Case No. 94-70505, entitled "Solidbank Corporation, Plaintiff versus Wear
Me Garments Manufacturing Inc., Angelita Amparo Go, and spouse Arnold A. Go, Leonila Cui,
Prudential Guarantee and Assurance Inc., and Oriental Assurance Corporation, Defendants." The
dispositive portion of the said Decision reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and
against the defendants as follows:

1.1. Holding that the plaintiff is entitled to be paid under the loan of P1.2 Million and under the
five trust receipts the sum of P4,797,294.88, plus interests and other charges from December
29, 1992, until fully paid;

1.2. Holding defendants WEAR ME, Angelita Amparo Go and spouse, Arnold A. Go, jointly and
severally liable to pay the plaintiff the above amounts;

1.3. Prudential Guarantee and Assurance, Inc. and Oriental Assurance Corporation, are held
jointly and severally liable to pay the plaintiff, together with defendants WEAR ME, Angelita
Amparo Go and her spouse, and Arnold A. Go, the above amounts but limited to the extent of
the insurance coverage representing the insurance coverage assigned to Solidbank
Corporation under the two (2) fire insurance policies;

1.4. Leonila Cui is held jointly and severally liable to the plaintiff, together with all the
defendants, but only with respect to the loan of P1.2 million and the accrued interest and
penalties.

2. Ordering all the defendants jointly and severally to pay the plaintiff a sum equal to 10% of
the amounts above payable plus the costs of the suit.4

The foregoing decision became final and executory on February 23, 1998.

On motion of petitioner, the trial court issued a writ of execution on July 10, 1998 addressed to
Sheriffs Gerry C. Duncan and Carmelo Cachero, commanding them as follows:

NOW THEREFORE, we command you that of the goods and chattels of Prudential Guarantee
and Assurance, Inc. and defendants WEAR ME GARMENTS MANUFACTURING, INC.,
ANGELITA AMPARO GO and spouse, and (sic) ARNOLD GO, jointly and severally, you cause
to be made the insurance coverage assigned to Solid Bank, plus interest and other charges
from December 29, 1992 until fully paid, all in Philippine Currency, together with your lawful
fees for the service of this execution, all in money of the Philippines, and that you render the
same to the plaintiff aside from your fees in this execution.

But if sufficient personal property cannot be found to satisfy execution and lawful fees thereon,
then you are commanded that of the lands buildings of the said defendants, you cause to be
made the sums of money in the manner required by law and the Rules of Court.5

Pursuant to the said writ, a demand letter dated July 13, 1998 was sent to private respondent
assessing it with the following amounts, to wit:
Collectible from Prudential Guarantee:

Sum Insured 5,000,000.00

Add: Int. at 12% (12.29.92 to 7.15.98) 3,373,333.33

2024 days ----------------

8,373,333.33

Add: 10% Atty’s Fees 837,333.33

----------------

9,210,666.666

On July 14, 1998, a Notice of Garnishment was served on the Philippine Commercial International
Bank (PCI Bank), Manila Branch, as a result of which, private respondent’s deposit therein in the
amount of P2.3 million was garnished in satisfaction of the writ.

On July 17, 1998, private respondent paid the execution amount of P9,210,666.66, "SUBJECT TO
THE FINAL DETERMINATION OF THE LIABILITY OF PRUDENTIAL GUARANTEE AND
ASSURANCE INC. UNDER THE JUDGMENT IN SAID CASE DATED JULY 27, 1995." 7

On July 20, 1998, private respondent filed a motion to correct the Writ of Execution. Private
respondent contended that the phrase "interest and other charges" in the writ should be deleted and
that it should be refunded the excess, after deducting from the amount of P9,210,666.66 the
insurance coverage amounting to P5 million, and the 10% attorneys fees, in the amount of
P500,000.00, plus the cost of suit.

On August 28, 1998, the trial court issued the assailed Order denying private respondent’s motion. It
sustained the assessment and computation made by the sheriffs and justified the same as follows:

The 12% interest appearing on the Sheriffs’ computation was taken from clause 29 of the
Policy No. 209407 issued by defendant Prudential Guarantee and Assurance, Inc., the
pertinent portion of which is hereunder quoted, thus:

x x x, Refusal or failure to pay the loss or damage within the time prescribed herein will entitle
the assured to collect the interest on the proceeds of the policy for the duration of the delay, at
the rate of twice the ceiling prescribed by the Monetary Board, unless such failure or refusal to
pay is based on the grounds that the claim is fraudulent.8

Aggrieved, private respondent filed a petition for certiorari with the Court of Appeals which granted
the petition and set aside the assailed Order and Writ of Execution issued by the trial court. The
decretal portion of the respondent court’s decision states:

WHEREFORE, the petition is GRANTED. The assailed RTC ORDER of August 18, 1998 and
the WRIT OF EXECUTION, dated July 9, 1998, in Civil Case No. 94-70505 are hereby
REVERSED AND SET ASIDE. A new Order is entered:

1. Declaring that the liability of the petitioner herein as per the Decision rendered on July 27,
1995, which has become final and executory, is limited to FIVE (P5,000,000.00) MILLION
PESOS, Philippine currency, the extent of the coverage of the insurance policies assigned or
endorsed to the respondent Solid Bank Corporation by spouses Angelita Amparo Go and
Arnold Go; plus the amount equivalent to ten (10%) of the said 5 million, or P500,000.00,
Philippine Currency; and the cost of suit.

2. Ordering the respondent Solid Bank Corporation to refund to petitioner the amount of
P3,710,666.66 which is the amount paid by petitioner to respondent Solid Bank Corporation, in
excess of petitioner’s liability under the judgment, plus interest from July 17, 1998 until date of
refund, based on current interest rate within the said period.

3. Ordering the Sheriff to forthwith lift immediately the garnishment on petitioner's bank deposit
with the Philippine Commercial & International Bank (PCI Bank), amounting to 2.3 million,
 Philippine Currency, plus interest from date of garnishment to the date of lifting of the said
garnishment, based on current bank interest rates within the said period.

SO ORDERED.9

A motion for reconsideration of the aforequoted decision was denied by the Court of Appeals on April
13, 1999.

Hence, the instant petition.

IN HOLDING THAT THE JOINT AND SEVERAL LIABILITY OF THE PRIVATE

RESPONDENT UNDER THE DECISION OF THE LOWER COURT DATED 27 JULY 1995
HAS BEEN LIMITED TO THE EXTENT OF THE COVERAGE OF THE FIRE INSURANCE
POLICIES AND DID NOT PROVIDE FOR PAYMENT OF INTEREST TO THE PETITIONER,
THE HONORABLE COURT OF APPEALS TOTALLY IGNORED THE DISPOSITIVE
PORTION OF THE SAID DECISION AND THE JUDICIAL ADMISSION MADE BY THE
PRIVATE RESPONDENT.

II

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT THE
CASE OF "VILLANUEVA VS. COURT OF APPEALS" APPLIES TO THE INSTANT CASE
CONSIDERING THAT, LIKE IN THE INSTANT CASE, THERE WAS NO PROVISION IN THE
DISPOSITIVE PORTION OF THE DECISION OF THE TRIAL COURT WHICH DECREED
THE PAYMENT OF INTEREST.

III

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN PENALIZING THE

PETITIONER WITH INTEREST PAYMENTS ON THE AMOUNT OF P3,710,666.66 IT
ORDERED PETITIONER TO REFUND TO THE PRIVATE RESPONDENT DESPITE THE
ABSENCE OF ANY FINDING BY THE APELLATE COURT THAT THE COMPUTATION
DONE BY THE PUBLIC RESPONDENTS WAS DONE IN BAD FAITH OR WAS TAINTED
WITH MALICE OR FRAUD, AND DESPITE ITS OWN FINDING THAT PETITIONER IS
ENTITLED TO INTEREST AND CHARGES AS A RESULT OF THE INSTANT
CONTROVERSY.

IV

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN ORDERING THE LIFTING

OF THE GARNISHMENT ON PRIVATE RESPONDENT’S DEPOSIT WITH PCI BANK
AMOUNTING TO P2.3 MILLION DESPITE ITS OWN PRONOUNCEMENT THAT
PETITIONER SHOULD PAY THE COST OF SUIT (sic).

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING THAT

PRIVATE RESPONDENT IS BARRED AND IS ESTOPPED FROM QUESTIONING THE
CORRECTNESS OF THE AMOUNT WHICH IT VOLUNTARILY PAID THE MANILA
REGIONAL TRIAL COURT SHERIFFS.10

It is a settled general principle that a writ of execution must conform substantially to every essential
particular of the judgment promulgated. Execution not in harmony with the judgment is bereft of
validity. It must conform, more particularly, to that ordained or decreed in the dispositive portion of the
decision.11

Corollary thereto, it must be stressed that a judgment which has acquired finality becomes immutable
and unalterable, and hence may no longer be modified in any respect except only to correct clerical
errors or mistakes — all the issues between the parties being deemed resolved and laid to rest. This
is meant to preserve the stability of decisions rendered by the courts, and to dissuade parties from
trifling with court processes. One who has submitted his case to a regular court necessarily commits
himself to abide by whatever decision the court may render. Any error in the decision which has not
been considered in a timely motion for reconsideration or appeal cannot be impugned when such
error becomes apparent only during execution. This rule applies with more force in the case of the
deciding judge who has limited prerogative during execution of the judgment.12

In the case at bar, the dispositive portion of the decision subject of the assailed order and writ of
execution specifically limited the liability of private respondent to the following: 1) P5 million,
representing the extent of the insurance coverage assigned to petitioner; 2) 10% attorney's fees; and
3) the cost of suit, thus:

xxx xxx xxx

1.3 Prudential Guarantee and Assurance, Inc. and Oriental Assurance Corporation, are held
jointly and severally liable to pay the plaintiff, together with defendants WEAR ME, Angelita
Amparo Go and her spouse, and Arnold A. Go, the above amounts but limited to the extent of
the insurance coverage representing the insurance coverage assigned to Solidbank
Corporation under the two (2) fire insurance policies;

xxx xxx xxx

2. Ordering all the defendants jointly and severally to pay the plaintiff a sum equal to 10% of
the amounts above payable plus the costs of the suit.

Clearly, no mention was made as to the payment of interest. If the trial court intended to impose
interest on the amount adjudged against private respondent, it would have expressly so stated, but it
did not. Hence, it cannot, in the execution of the July 27, 1995 decision, modify the same by ordering
private respondent to pay interest. Accordingly, the July 9, 1998 Writ of Execution, imposing interest
on the amount for which private respondent was held liable, as well as the Order dated August 18,
1998, sustaining the computation and imposition by the sheriff of a 12% interest on the subject
liability, are void.

Moreover, petitioner’s argument that the interest mentioned in paragraph 1.1 of the dispositive portion
of the July 27, 1995 Decision, which should allegedly be read with paragraph 1.3, likewise apply to
the liability of private respondent is untenable. Paragraph 1.1, vis-a-vis paragraph 1.3, provides:

1.1. Holding that the plaintiff is entitled to be paid under the loan of P1.2 Million and under the
five trust receipts the sum of P4,797,294.88, plus interest and other charges from December
29, 1992, until fully paid;

1.3. Prudential Guarantee and Assurance, Inc. and Oriental Assurance Corporation, are held
jointly and severally liable to pay the plaintiff, together with defendants WEAR ME, Angelita
Amparo Go and her spouse, and Arnold A. Go, the above amounts but limited to the extent of
the Insurance coverage representing the insurance coverage assigned to Solidbank
Corporation under the two (2) fire insurance policies;

The liability of private respondent insurance company to petitioner originated from a Fire Insurance
Policy issued by private respondent to defendant WEAR ME, which the latter, in turn, assigned to
petitioner by way of additional loan collateral. Notably, the interest referred to in paragraph 1.1 is to
accrue from December 29, 1992. This interest cannot pertain to the liability of private respondent
insurance company, because the right of action of petitioner against the latter arose only on July 12,
1993, when fire gutted the properties subject of the Fire Insurance Policy. Verily, the interest
mentioned in paragraph 1.1 applies only to the amount of the loan payable by WEAR ME and its
individual co-defendants specified in paragraph 1.2. Thus, the liability of private respondent is limited
to the amount of the insurance coverage plus attorney’s fees and the cost of suit.

Similarly, in Government Service Insurance System v. Court of Appeals,13 it was held that the trial
court gravely abused its discretion in ordering the petitioner to pay interest which was never decreed
in the decision to be executed, thus:

Petitioner was not ordered to pay interest on the amount it was to hold and deliver to Valencia
or to pay attorney's fees. The trial court cannot, therefore, without committing grave abuse of
 discretion, direct the petitioner to pay interest and attorney’s fees. To do so would be to vary
the tenor of the judgment against the latter and increase its liability, thereby rendering nugatory
the above proviso. Such imposition would mean, as in this case, the delivery of money to
Valencia in excess of that belonging to QRSI which the petitioner has been retaining. It is a
settled general principle that a writ of execution must conform substantially to every essential
particular of the judgment promulgated. Execution not in harmony with the judgment is bereft
of validity. It must conform, more particularly, to that ordained or decreed in the dispositive
portion of the decision.

The cases of Villanueva v. Court of Appeals, et al.,14 and Rizal Commercial Banking Corporation, et
al., v. Court of Appeals, et al.,15 invoked by petitioner, find no application in the case at bar. It is true
that in the said cases the Court upheld the imposition of interest on the liability of the parties
concerned. It must be stressed, however, that the decisions modified with respect to the payment of
interest, were not final and executory decisions, but rather, decisions subject of petitions for review.
The imposition of interest in the said cases, therefore, was perfectly within the authority of the Court.
Such is not the case here. The present controversy involving a final and executory judgment is
evidently anchored on an entirely different factual milieu. Hence, petitioners’ reliance on the said
cases is misplaced.

The Court of Appeals correctly ruled that the payment by private respondent of the entire amount of
P9,210,666.66, will not estop it from questioning the same. Worthy of note is the receipt of said
payment where private respondent expressly made a reservation that the payment is "SUBJECT TO
THE FINAL DETERMINATION OF THE LIABILITY OF PRUDENTIAL GUARANTEE AND
ASSURANCE INC. UNDER THE JUDGMENT IN SAID CASE DATED JULY 27, 1995." At any rate,
even in the absence of the foregoing, the obligation of petitioner to return to respondent the amount in
excess of what is due to it stands, pursuant to the ancient principle that no one shall unjustly enrich
oneself at the expense of another.16

So, also, the Court sustains the lifting of the garnishment on the P2.3 million deposit of private
respondent with the PCI Bank, as the amount of P9,210,666.66 paid by private respondent could very
well cover the cost of suit charged against private respondent. 1âwphi1.nêt

However, we find merit in the third issue raised by petitioner. The interest imposed by the respondent
court on the amount refundable to private respondent in excess of P9,210,666.66, is in the concept of
damages which must have factual and legal basis. As no justification was given by the respondent
court, the award of interest cannot be affirmed. Moreover, it would be iniquitous to hold petitioner
liable for the errors committed by the trial court and the sheriffs concerned in the execution of the
decision. Hence, the interest imposed by respondent Court of Appeals should be deleted.

In view of the deletion of the award of interest, the amount refundable to private respondent, which
the respondent court set at P3,710,666.66, should be recomputed. From the P9,210,666.66 paid by
private respondent, the following amounts must be deducted: 1) P5 million as insurance coverage; 2)
P500,000.00, representing 10% attorney’s fee; and 3) the costs of suit.

WHEREFORE, in view of the foregoing, the January 27 1999 Decision and the April 13, 1999
Resolution of the Court of Appeals in CA-G.R. SP No. 48982 are AFFIRMED with
the MODIFICATION that the interest imposed on the amount refundable to private respondent is
deleted. The trial court is hereby ordered to determine the cost of suit, which in addition to the
P5,000,000.00 insurance coverage and the P500,000.00 attorneys fees, should be deducted from the
amount of P9,210,666.66. Any excess should forthwith be refunded to private respondent.

SO ORDERED.

Davide, Jr., C.J., Puno, and Kapunan, JJ., concur.

Footnote
1
Twelfth Division, composed of Associate Justices Corona Ibay-Somera (ponente and
chairman); Oswaldo D. Agcaoili (member); and Teodoro P. Regino (member).
2
Presided by Judge Concepcion S. Alarcon-Vergara.
3
Penned by Judge Salvador P. De Guzman, Jr.
4
Rollo, p. 78.
5
Rollo, p. 92.
6
Rollo, p. 98.
7
Rollo, p. 173.
8
Rollo, p. 96.
9
Rollo, pp. 62-63.
10
Rollo, pp. 27-28.
11
Government Service Insurance System v. Court of Appeals, 218 SCRA 233, 250 [1993];
citing Paylago v. Nicolas, 189 SCRA 272 [1990]; Philippine Virginia Tobacco Administration v.
Gonzales, 92 SCRA 172 [1972]; Gabaya v. Mendoza, 113 SCRA 400 [1982]; Pamantasan Ng
Lungsod Ng Maynila v. Intermediate Appellate Court, 143 SCRA 311 [1986]; Laingco v.
Camilo, 130 SCRA 144 [1984].
12
Johnson & Johnson (Phils.), Inc. v. Court of Appeals, 262 SCRA 298, 309-310 [1996]; citing
Korean Airlines Co., Ltd. v. Court of Appeals, 247 SCRA 599 [1995]; Lim v. Jabalde, 172
SCRA 211 [1989]; Calalang v. Register of Deeds of Quezon City, 231 SCRA 88 [1994];
Alabanzas v. Intermediate Appellate Court, 204 SCRA 304 [1991].
13
Supra.
14
294 SCRA 90 [1998].
15
289 SCRA 292 [1998].
16
Citibank v. Court of Appeals, 280 SCRA 459, 475 [1997].