G.R. No.

171673

May 30, 2011

BANAHAW BROADCASTING CORPORATION, Petitioner, vs. CAYETANO PACANA III, NOE U. DACER, JOHNNY B. RACAZA, LEONARDO S. OREVILLO, ARACELI T. LIBRE, GENOVEVO E. ROMITMAN, PORFERIA M. VALMORES, MENELEO G. LACTUAN, DIONISIO G. BANGGA, FRANCISCO D. MANGA, NESTOR A. AMPLAYO, LEILANI B. GASATAYA, LORETA G. LACTUAN, RICARDO B. PIDO, RESIGOLO M. NACUA and ANACLETO C. REMEDIO, Respondents. DECISION LEONARDO-DE CASTRO, J.: This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure assailing the Decision1 dated April 15, 2005 of the Court of Appeals in CA-G.R. SP No. 57847, and its Resolution2 dated January 27, 2006 denying petitioners Motion for Reconsideration. The factual and procedural antecedents of this case are as follows: Respondents in the case at bar, Cayetano Pacana III, Noe U. Dacer, Johnny B. Racaza, Leonardo S. Orevillo, Araceli T. Libre, Genovevo E. Romitman, Porferia M. Valmores, Meneleo G. Lactuan, Dionisio G. Bangga, Francisco D. Manga, Nestor A. Amplayo, Leilani B. Gasataya, Loreta G. Lactuan, Ricardo B. Pido, Resigolo M. Nacua and Anacleto C. Remedio (collectively, the DXWG personnel), are supervisory and rank and file employees of the DXWG-Iligan City radio station which is owned by petitioner Banahaw Broadcasting Corporation (BBC), a corporation managed by Intercontinental Broadcasting Corporation (IBC).

On August 29, 1995, the DXWG personnel filed with the Subregional Arbitration Branch No. XI, Iligan City a complaint for illegal dismissal, unfair labor practice, reimbursement of unpaid Collective Bargaining Agreement (CBA) benefits, and attorneys fees against IBC and BBC. On June 21, 1996, Labor Arbiter Abdullah L. Alug rendered his Decision3 awarding the DXWG personnel a total of P12,002,157.28 as unpaid CBA benefits consisting of unpaid wages and increases, 13th month pay, longevity pay, sick leave cash conversion, rice and sugar subsidy, retirement pay, loyalty reward and separation pay.4 The Labor Arbiter denied the other claims of the DXWG personnel for Christmas bonus, educational assistance, medical check-up and optical expenses. Both sets of parties appealed to the National Labor Relations Commission (NLRC). On May 15, 1997, a Motion to Dismiss, Release, Waiver and Quitclaim,5 was jointly filed by IBC and the DXWG personnel based on the latters admission that IBC is not their employer as it does not own DXWG-Iligan City. On April 21, 1997, the NLRC granted the Motion and dismissed the case with respect to IBC. 6 BBC filed a Motion for Reconsideration alleging that (1) neither BBC nor its duly authorized representatives or officers were served with summons and/or a copy of the complaint when the case was pending before the Labor Arbiter or a copy of the Decision therein; (2) since the liability of IBC and BBC is solidary, the release and quitclaim issued by the DXWG personnel in favor of IBC totally extinguished BBCs liability; (3) it was IBC that effected the termination of the DXWG personnels employment; (4) the DXWG personnel are members of the IBC union and are not employees of BBC; and (5) the sequestered properties of BBC cannot be levied upon. On December 12, 1997, the NLRC issued a Resolution vacating the Decision of Labor Arbiter Alug and remanding the case to the

arbitration branch of origin on the ground that while the complaint was filed against both IBC and BBC, only IBC was served with summons, ordered to submit a position paper, and furnished a copy of the assailed decision.7 On October 15, 1998, Labor Arbiter Nicodemus G. Palangan rendered a Decision adjudging BBC to be liable for the same amount discussed in the vacated Decision of Labor Arbiter Alug: WHEREFORE, premises considered, judgment is hereby rendered ordering the respondent Banahaw Broadcasting Corporation to pay complainants the following: 1. Cayetano Pacana III 2. Noe U. Dacer 3. Johnny B. Racaza 4. Leonardo S. Orevillo 5. Araceli T. Libre 6. Genovevo E. Romitman 7. Porferia M. Valmores 8. Meneleo G. Lactuan 9. Dionisio G. Bangga 10. Francisco D. Manga 11. Nestor A. Amplayo 12. Leilani B. Gasataya 13. Loreta G. Lactuan P 1,730,535.75 886,776.43 1,271,739.34 1,097,752.70 543,467.22 716,455.72 562,564.78 678,995.91 580,873.78 29,286.65 583,798.51 42,669.75 757,252.52

14. Ricardo B. Pido 15. Resigolo M. Nacua 16. Anacleto C. Remedio GRAND TOTAL

756,835.64 887,344.75 887,345.39 P 12,002,157.28

Respondent is likewise ordered to pay 10% of the total award as attorneys fee. 8 Both BBC and respondents appealed to the NLRC anew. The appeal was docketed as NLRC CA No. M-004419-98. In their appeal, the DXWG personnel reasserted their claim for the remaining CBA benefits not awarded to them, and alleged error in the reckoning date of the computation of the monetary award. BBC, in its own Memorandum of Appeal, challenged the monetary award itself, claiming that such benefits were only due to IBC, not BBC, employees.9 In the same Memorandum of Appeal, BBC incorporated a Motion for the Recomputation of the Monetary Award (of the Labor Arbiter),10 in order that the appeal bond may be reduced. On September 16, 1999, the NLRC issued an Order 11 denying the Motion for the Recomputation of the Monetary Award. According to the NLRC, such recomputation would result in the premature resolution of the issue raised on appeal. The NLRC ordered BBC to post the required bond within 10 days from receipt of said Order, with a warning that noncompliance will cause the dismissal of the appeal for non-perfection.12 Instead of complying with the Order to post the required bond, BBC filed a Motion for Reconsideration, 13 alleging this time that since it is wholly owned by the Republic of the Philippines, it need not post an appeal bond. On November 22, 1999, the NLRC rendered its Decision14 in NLRC CA No. M-004419-98. In said Decision, the NLRC denied the

Motion for Reconsideration of BBC on its September 16, 1999 Order and accordingly dismissed the appeal of BBC for non-perfection. The NLRC likewise dismissed the appeal of the DXWG personnel for lack of merit in the same Decision. BBC filed a Motion for Reconsideration of the above Decision. On January 13, 2000, the NLRC issued a Resolution15 denying the Motion. BBC filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the Rules of Court assailing the above dispositions by the NLRC. The Petition was docketed as CA-G.R. SP No. 57847. On April 15, 2005, the Court of Appeals rendered the assailed Decision denying BBCs Petition for Certiorari. The Court of Appeals held that BBC, though owned by the government, is a corporation with a personality distinct from the Republic or any of its agencies or instrumentalities, and therefore do not partake in the latters exemption from the posting of appeal bonds. The dispositive portion of the Decision states: WHEREFORE, finding no grave abuse of discretion on the part of public respondents, We DENY the petition. The challenged decision of public respondent dated November 22, 1999, as well as its subsequent resolution dated January 13, 2000, in NLRC Case No. M004419-98 are hereby AFFIRMED. The decision of the Labor Arbiter dated October 15, 1998 in RAB Case No. 12-09-00309-95 is hereby declared FINAL AND EXECUTORY.16 On January 27, 2006, the Court of Appeals rendered the assailed Resolution denying the Motion for Reconsideration. Hence, this Petition for Review. As stated above, both the NLRC and the Court of Appeals dealt with only one issue whether BBC is exempt from posting an appeal bond. To recall, the NLRC issued an Order denying BBCs Motion

for the Recomputation of the Monetary Award and ordered BBC to post the required bond within 10 days from receipt of said Order, with a warning that noncompliance will cause the dismissal of the appeal for non-perfection.17 However, instead of heeding the warning, BBC filed a Motion for Reconsideration, alleging that it need not post an appeal bond since it is wholly owned by the Republic of the Philippines. There is no dispute as regards the history of the ownership of BBC and IBC. Both BBC and IBC, together with Radio Philippines Network (RPN-9), were formerly owned by Roberto S. Benedicto (Benedicto). In the aftermath of the 1986 people power revolution, the three companies, collectively denominated as Broadcast City, were sequestered and placed under the control and management of the Board of Administrators (BOA).18 The BOA was tasked to operate and manage its business and affairs subject to the control and supervision of the Presidential Commission on Good Government (PCGG).19 In December 1986, Benedicto and PCGG allegedly executed a Management Agreement whereby the Boards of Directors of BBC, IBC and RPN-9 were agreed to be reconstituted. Under the agreement, 2/3 of the membership of the Boards of Directors will be PCGG nominees, and 1/3 will be Benedicto nominees. A reorganized Board of Directors was thus elected for each of the three corporations. The BOA, however, refused to relinquish its function, paving for the filing by Benedicto of a Petition for Prohibition with this Court in 1989, which was docketed as G.R. No. 87710. In the meantime, it was in 1987 when the Republic, represented by the PCGG, filed the case for recovery/reconveyance/reversion and damages against Benedicto. Following our ruling in Bataan Shipyard & Engineering Co., Inc. (BASECO) v. Presidential Commission on Good Government,20 the institution of this suit necessarily placed BBC, IBC and RPN-9 under custodia legis of the Sandiganbayan. On November 3, 1990, Benedicto and the Republic executed a Compromise Agreement whereby Benedicto, in exchange for

immunity from civil and criminal actions, "ceded to the government certain pieces of property listed in Annex A of the agreement and assigned or transferred whatever rights he may have, if any, to the government over all corporate assets listed in Annex B of the agreement."21 BBC is one of the properties listed in Annex B. 22 Annex A, on the other hand, includes the following entry: CESSION TO THE GOVERNMENT:

c. DYOO Roxas d. DYRG Kalibo e. DWLW Laoag f. DWGW Legaspi g. DWDW Dagupan

I. PHILIPPINE ASSETS: h. DWNW Naga xxxx 7. Inter-Continental Broadcasting Corporation (IBC), 100% of total assets estimated at P450 million, consisting of 41,000 sq.mtrs. of land, more or less, located at Broadcast City Quezon City, other land and buildings in various Provinces, and operates the following TV stations: a. TV 13 (Manila) b. DY/TV 13 (Cebu) c. DX/TV 13 (Davao) d. DYOB/TV 12 (Iloilo) e. DWLW/TV 13 (Laoag) as well as the following Radio Stations a. DZMZ-FM Manila b. DYBQ Iloilo On March 31, 1992, this Court, in Benedicto v. Board of Administrators of Television Stations RPN, BBC and IBC, 24 promulgated its Decision on the consolidated petitions in G.R. No. 87710 and G.R. No. 96087. Holding that the authority of the BOA had become functus oficio, we granted the Petition in G.R. No. 87710, ordering the BOA to "cease and desist from further exercising management, operation and control of Broadcast City and is hereby directed to surrender the management, operation and control of Broadcast City to the reorganized Board of Directors of each of the Broadcast City television stations."25 We denied the Petition in G.R. No. 96087 for being premature, since the approval of the Compromise Agreement was still pending in the Sandiganbayan. 26 The Sandiganbayan subsequently approved the Compromise Agreement on October 31, 1992, and the approval was affirmed by this Court on September 10, 1993 in Republic v. Sandiganbayan. 27 i. DXWG Iligan . . . . . . . . . . P352,455,286.0023 (Emphasis supplied.) Then Senator Teofisto T. Guingona, Jr. filed a Petition for Certiorari and Prohibition seeking to invalidate the Compromise Agreement, which was docketed as G.R. No. 96087. The Petition was consolidated with G.R. No. 87710.

Thus, both BBC and IBC were government-owned and controlled during the time the DXWG personnel filed their original complaint on August 29, 1995. In the present Petition, BBC reiterates its argument that since it is now wholly and solely owned by the government, the posting of the appeal bond was unnecessary on account of the fact that it is presumed that the government is always solvent. 28 Citing the 1975 case of Republic (Bureau of Forestry) v. Court of Appeals, 29 BBC adds before us that it is not even necessary for BBC to raise its exempt status as the NLRC should have taken cognizance of the same.30 When the Court of Appeals affirmed the dismissal by the NLRC of BBCs appeal for failure of the latter to post an appeal bond, it relied to the ruling of this Court in Republic v. Presiding Judge, Branch XV, Court of First Instance of Rizal. 31 The appellate court, noting that BBCs primary purpose as stated in its Articles of Incorporation is to engage in commercial radio and television broadcasting, held that BBC did not meet the criteria enunciated in Republic v. Presiding Judge for exemption from the appeal bond. 32 We pertinently held in Republic v. Presiding Judge: The sole issue implicit in this petition is whether or not the RCA is exempt from paying the legal fees and from posting an appeal bond. We find merit in the petition. To begin with, We have to determine whether the RCA is a governmental agency of the Republic of the Philippines without a separate, distinct and independent legal personality from the latter. We maintain the affirmative. The legal character of the RCA as a governmental agency had already been passed upon in the case of Ramos vs. Court of Industrial Relations wherein this Court held:

"Congress, by said Republic Act 3452 approved on June 14, 1962, created RCA, in pursuance of its declared policy, viz: SECTION 1. It is hereby declared to be the policy of the Government that in order to stabilize the price of palay, rice and corn, it shall engage in the 'purchase of these basic foods directly from those tenants, farmers, growers, producers and landowners in the Philippines who wish to dispose of their produce at a price that will afford them a fair and just return for their labor and capital investment and whenever circumstances brought about by any cause, natural or artificial, should so require, shall sell and dispose of these commodities to the consumers at areas of consumption at a price that is within their reach. "RCA is, therefore, a government machinery to carry out a declared government policy just noted, and not for profit. "And more. By law, RCA depends for its continuous operation on appropriations yearly set aside by the General Appropriations Act. So says Section 14 of Republic Act 3452: SECTION 14. The sum of one hundred million pesos is hereby appropriated, out of any funds in the National Treasury not otherwise appropriated, for the capitalization of the Administration: Provided, That the annual operational expenses of the Administration shall not exceed three million pesos of the said amount: Provided further, That the budget of the Rice and Corn Administration for the fiscal year nineteen hundred and sixty-three to nineteen hundred and sixtyfour and the years thereafter shall be included in the General appropriations submitted to Congress. "RCA is not possessed of a separate and distinct corporate existence. On the contrary, by the law of its creation, it is an office directly under the Office of the President of the Philippines."

Respondent, however, contends that the RCA has been created to succeed to the corporate assets, liabilities, functions and powers of the abolished National Rice & Corn Corporation which is a government-owned and controlled corporation separate and distinct from the Government of the Republic of the Philippines. He further contends that the RCA, being a duly capitalized entity doing mercantile activity engaged in the buying and selling of palay, rice, and corn cannot be the same as the Republic of the Philippines; rather, it is an entity separate and distinct from the Republic of the Philippines. These contentions are patently erroneous. xxxx The mercantile activity of RCA in the buying and selling of palay, rice, and corn is only incident to its primary governmental function which is to carry out its declared policy of subsidizing and stabilizing the price of palay, rice, and corn in order to make it well within the reach of average consumers, an object obviously identified with the primary function of government to serve the well-being of the people. As a governmental agency under the Office of the President the RCA is thus exempt from the payment of legal fees as well as the posting of an appeal bond. Under the decisional laws which form part of the legal system of the Philippines the Republic of the Philippines is exempt from the requirement of filing an appeal bond on taking an appeal from an adverse judgment, since there could be no doubt, as to the solvency of the Government. This well-settled doctrine of the Government's exemption from the requirement of posting an appeal bond was first enunciated as early as March 7, 1916 in Government of the Philippine Island vs. Judge of the Court of First Instance of Iloilo and has since been so consistently enforced that it has become practically a matter of public knowledge and certainly a matter of judicial notice on the part of the courts of the land. 33

In the subsequent case of Badillo v. Tayag, 34 we further discussed that: Created by virtue of PD No. 757, the NHA is a government-owned and controlled corporation with an original charter. As a general rule, however, such corporations -- with or without independent charters - are required to pay legal fees under Section 21 of Rule 141 of the 1997 Rules of Civil Procedure: "SEC. 21. Government Exempt. - The Republic of the Philippines, its agencies and instrumentalities, are exempt from paying the legal fees provided in this rule. Local governments and government-owned or controlled corporations with or without independent charters are not exempt from paying such fees." On the other hand, the NHA contends that it is exempt from paying all kinds of fees and charges, because it performs governmental functions. It cites Public Estates Authority v. Yujuico, which holds that the Public Estates Authority (PEA), a government-owned and controlled corporation, is exempt from paying docket fees whenever it files a suit in relation to its governmental functions. We agree. x x x.35 We can infer from the foregoing jurisprudential precedents that, as a general rule, the government and all the attached agencies with no legal personality distinct from the former are exempt from posting appeal bonds, whereas government-owned and controlled corporations (GOCCs) are not similarly exempted. This distinction is brought about by the very reason of the appeal bond itself: to protect the presumptive judgment creditor against the insolvency of the presumptive judgment debtor. When the State litigates, it is not required to put up an appeal bond because it is presumed to be always solvent.36 This exemption, however, does not, as a general rule, apply to GOCCs for the reason that the latter has a personality distinct from its shareholders. Thus, while a GOCCs majority

stockholder, the State, will always be presumed solvent, the presumption does not necessarily extend to the GOCC itself. However, when a GOCC becomes a "government machinery to carry out a declared government policy,"37 it becomes similarly situated as its majority stockholder as there is the assurance that the government will necessarily fund its primary functions. Thus, a GOCC that is sued in relation to its governmental functions may be, under appropriate circumstances, exempted from the payment of appeal fees. In the case at bar, BBC was organized as a private corporation, sequestered in the 1980s and the ownership of which was subsequently transferred to the government in a compromise agreement. Further, it is stated in its Amended Articles of Incorporation that BBC has the following primary function: To engage in commercial radio and television broadcasting, and for this purpose, to establish, operate and maintain such stations, both terrestrial and satellite or interplanetary, as may be necessary for broadcasting on a network wide or international basis. 38 It is therefore crystal clear that BBCs function is purely commercial or proprietary and not governmental. As such, BBC cannot be deemed entitled to an exemption from the posting of an appeal bond. Consequently, the NLRC did not commit an error, and much less grave abuse of discretion, in dismissing the appeal of BBC on account of non-perfection of the same. In doing so, the NLRC was merely applying Article 223 of the Labor Code, which provides: ART. 223. Appeal. - Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds:

(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter; (b) If the decision, order or award was secured through fraud or coercion, including graft and corruption; (c) If made purely on questions of law; and (d) If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant. In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from. (Italization supplied.) The posting of the appeal bond within the period provided by law is not merely mandatory but jurisdictional. The failure on the part of BBC to perfect the appeal thus had the effect of rendering the judgment final and executory.39 Neither was there an interruption of the period to perfect the appeal when BBC filed (1) its Motion for the Recomputation of the Monetary Award in order to reduce the appeal bond, and (2) its Motion for Reconsideration of the denial of the same. In Lamzon v. National Labor Relations Commission,40 where the petitioner argued that the NLRC gravely abused its discretion in dismissing her appeal on the ground of non-perfection despite the fact that she filed a Motion for Extension of Time to File an Appeal Bond, we held: The pertinent provision of Rule VI, NLRC Rules of Procedure, as amended, provides as follows: xxxx

Section 6. Bond. - In case the decision of a Labor Arbiter, POEA Administrator and Regional Director or his duly authorized hearing officer involves a monetary award, an appeal by the employer shall be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission or the Supreme Court in an amount equivalent to the monetary award, exclusive of moral and exemplary damages and attorney's fees. The employer as well as counsel shall submit a joint declaration under oath attesting that the surety bond posted is genuine and that it shall be in effect until final disposition of the case. The Commission may, in meritorious cases and upon Motion of the Appellant, reduce the amount of the bond. The filing, however, of the motion to reduce bond shall not stop the running of the period to perfect appeal.1awphil Section 7. No Extension of Period. - No motion or request for extension of the period within which to perfect an appeal shall be allowed." As correctly observed by the NLRC, petitioner is presumptuous in assuming that the 10-day period for perfecting an appeal, during which she was to post her appeal bond, could be easily extended by the mere filing of an appropriate motion for extension to file the bond and even without the said motion being granted. It bears emphasizing that an appeal is only a statutory privilege and it may only be exercised in the manner provided by law. Nevertheless, in certain cases, we had occasion to declare that while the rule treats the filing of a cash or surety bond in the amount equivalent to the monetary award in the judgment appealed from, as a jurisdictional requirement to perfect an appeal, the bond requirement on appeals involving monetary awards is sometimes given a liberal interpretation in line with the desired objective of resolving controversies on the merits. However, we find no cogent reason to apply this same liberal interpretation in this case. Considering that

the motion for extension to file appeal bond remained unacted upon, petitioner, pursuant to the NLRC rules, should have seasonably filed the appeal bond within the ten (10) day reglementary period following receipt of the order, resolution or decision of the NLRC to forestall the finality of such order, resolution or decision. Besides, the rule mandates that no motion or request for extension of the period within which to perfect an appeal shall be allowed. The motion filed by petitioner in this case is tantamount to an extension of the period for perfecting an appeal. As payment of the appeal bond is an indispensable and jurisdictional requisite and not a mere technicality of law or procedure, we find the challenged NLRC Resolution of October 26, 1993 and Order dated January 11, 1994 in accordance with law. The appeal filed by petitioner was not perfected within the reglementary period because the appeal bond was filed out of time. Consequently, the decision sought to be reconsidered became final and executory. Unless there is a clear and patent grave abuse of discretion amounting to lack or excess of jurisdiction, the NLRC's denial of the appeal and the motion for reconsideration may not be disturbed.41 (Underscoring supplied.) In the case at bar, BBC already took a risk when it filed its Motion for the Recomputation of the Monetary Award without posting the bond itself. The Motion for the Recomputation of the Monetary Award filed by BBC, like the Motion for Extension to File the Appeal Bond in Lamzon, was itself tantamount to a motion for extension to perfect the appeal, which is prohibited by the rules. The NLRC already exhibited leniency when, instead of dismissing the appeal outright, it merely ordered BBC to post the required bond within 10 days from receipt of said Order, with a warning that noncompliance will cause the dismissal of the appeal for nonperfection. When BBC further demonstrated its unwillingness by completely ignoring this warning and by filing a Motion for Reconsideration on an entirely new ground, the NLRC cannot be said to have committed grave abuse of discretion by making good its warning to dismiss the appeal. Therefore, the Court of Appeals

committed no error when it upheld the NLRCs dismissal of petitioners appeal. WHEREFORE, the instant Petition for Review on Certiorari is DENIED. The Decision of the Court of Appeals dated April 15, 2005 in CA-G.R. SP No. 57847, and its Resolution dated January 27, 2006 are hereby AFFIRMED. No pronouncement as to costs. SO ORDERED. G.R. No. 182431 November 17, 2010

95690 that was placed under the coverage of Operation Land Transfer pursuant to Presidential Decree No. 27 in 1972. Only 18.8704 hectares of the total are of 20.5254 hectares were subject of the coverage. After the Department of Agrarian Reform (DAR) directed payment, LBP approved the payment of P265,494.20, exclusive of the advance payments made in the form of lease rental amounting to P75,415.88 but inclusive of 6% increment of P191,876.99 pursuant to DAR Administrative Order No. 13, series of 1994. 4 On 1 December 1994, the respondents instituted Civil Case No. 9403 for determination and payment of just compensation before the Regional Trial Court (RTC), Branch 3 of Legaspi City, 5 claiming that the landholding involved was irrigated with two cropping seasons a year with an average gross production per season of 100 cavans of 50 kilos/hectare, equivalent of 200 cavans/year/hectare; and that the fair market value of the property was not less that P130,000.00/hectare, or P2,668,302.00 for the entire landholding of 20.5254 hectares. LBP filed its answer,6 stating that rice and corn lands placed under the coverage of Presidential Decree No. 277 were governed and valued in accordance with the provisions of Executive Order No. 2288 as implemented by DAR Administrative Order No. 2, Series of 1987 and other statutes and administrative issuances; that the administrative valuation of lands covered by Presidential Decree No. 27 and Executive Order No. 228 rested solely in DAR and LBP was the only financing arm; that the funds that LBP would use to pay compensation were public funds to be disbursed only in accordance with existing laws and regulations; that the supporting documents were not yet received by LBP; and that the constitutionality of Presidential Decree No. 27 and Executive Order No. 228 was already settled. On 6 October 2004, the RTC rendered its decision, holding:

LAND BANK OF THE PHILIPPINES, Petitioner, vs. ESTHER ANSON RIVERA, ANTONIO G. ANSON AND CESAR G. ANSON, Respondents. DECISION PEREZ, J.: This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure filed by Petitioner Land Bank of the Philippines (LBP) assailing the Decision1 of the Court of Appeals dated 9 October 2007 in CA G.R. SP No. 87463, ordering the payment by LBP of just compensation and interest in favor of respondents Esther Anson Rivera, Antonio G. Anson and Cesar G. Anson, and at the same time directed LBP to pay the costs of suit. Likewise assailed is the Resolution2 of the Court of Appeals dated 18 March 2008 denying the Motion for Reconsideration of LBP. 3 The respondents are the co-owners of a parcel of agricultural land embraced by Original Certificate of Title No. P-082, and later transferred in their names under Transfer Certificate of Title No. T-

ACCORDINGLY, the just compensation of the land partly covered by TCT No. T-95690 is fixed at Php1,297,710.63. Land Bank of the Philippines is hereby ordered to pay Esther Anson, Cesar Anson and Antonio Anson the aforesaid value of the land, plus interest of 12% per annum or Php194.36 per day effective October 7, 2004, until the value is fully paid, in cash or in bond or in any other mode of payment at the option of the landowners in accordance with Sec. 18, RA 6657.9 LBP filed a Motion for Reconsideration10 which the RTC denied in its Order dated 29 October 2004.11 LBP next filed a petition for Review to the Court of Appeals docketed as CA G.R. SP No. 87463. The Court of Appeals rendered a decision dated 9 October 2007, the fallo of which reads:12 WHEREFORE, the DECISION DATED OCTOBER 6, 2004 is MODIFIED, ordering petitioner LAND BANK OF THE PHILIPPINES to pay to the respondents just compensation (inclusive of interests as of October 6, 2004) in the amount of P823,957.23, plus interest of 12% per annum on the amount of P515,777.57, or P61,893.30 per annum, beginning October 7, 2004 until the just compensation is fully paid in accordance with this decision. In arriving at its computation, the Court of Appeals explained: In computing the just compensation of the property, pursuant to Executive Order No. 228, Sec. 2 thereof, the formula is LV = AGP x 2.5 x GSP x A (LV is Land Valuation; AGP is Average Gross Production; GSP is Government Support Price and A is the Area of the Land)

WHERE: AGP = 99.36 cavans per hectare GSP = Php 35.00 per cavan A= COMPUTATION: LV = LV = LV = (99.36 x2.5 x 35.00) 18.8704 8,694 x 18.8704 Php 164,059.26 18.8704 hectares

With increment of 6% interest per annum compounded annually beginning October 21, 1972 until October 21, 1994 and immediately after said date with 12% interest per annum until the value is fully paid in accordance with extant jurisprudence, computed as follows: To be compounded annually at 6% per annum from October 21, 1972 up to October 24, 1994. The formula is CA = P(1+R)n (CA is Compounded Amount; P is Principal; R is Rate; and n is the number of years) WHERE: P = R= N= COMPUTATION: CA = 164,059.26 x (1+06) 22 CA = 164,059.26 x (1.06) 22 Php 164,059.26 6% per annum 22 years

CA = 164,059.26 x 3.60353741 CA = Php 591,193.68

I = Php68,027.77 Total Interest Php 706,516.95

Plus simple interest of 12% per annum from October 22, 1994 up to October 21, 2003, the formula of which is: I=PxRxT (I is the Interest; P is the Principal; R is the Rate and T is the time) WHERE: P = Php591,193.68 R = 12% per annum T = 9 years COMPUTATION: I= I= I= 591,193.68 x 12 x 9 70,943.24 x 9 Php638,489.18

RECAPITULATION: Compounded Amount Php 591,193.68 Total Interest TOTAL AMOUNT The Court of Appeals pointed out that: Pursuant to AO 13, considering that the landholding involved herein was tenanted prior to October 21, 1972, the rate of 6% per annum is imposed, compounded annually from October 21, 1972 until October 21, 1994, the date of the effectivity of AO 13. Beyond October 21, 1994, only the simple rate of 6% per annum interest is imposable until October 6, 2004 (the date of the rendition of the decision of the RTC) on the total value (that is, P164,059.26 plus the compounded increments up to October 21, 1994) but minus the lease rentals of P75,415.88. Only the simple rate of 6% is applicable up to then because the obligation to pay was not founded on a written agreement that stipulated a different rate of interest. From October 7, 2004 until the full payment, the simple interest rate is raised to 12% per annum. The reason is that the amount thus determined had by then acquired the character of a forbearance in money. 13 LBP disagreed with the imposition of 12% interest and its liability to pay the costs of suit. It filed a Motion for Reconsideration which was denied in the Court of Appeals Resolution dated 18 March 2008. The Court of Appeals held: 706,516.95 Php 1,297,710.63

(Plus interest of 12% per annum from October 22, 2003 up to October 6, 2004 or a period of 350 days) COMPUTATION: I = (591,193.68 x .12) x 350 350 I = 194.3605 x 350

We DENY the petitioners motion for partial reconsideration for the following reasons, to wit: 1. Anent the first ground, the decision of October 9, 2007 has explained in detail why the obligation of the petitioner should be charged 12% interest. Considering that the motion fails to persuasively show that a modification of the decision thereon would be justified, we reject such ground for lack of merit. 2. Regarding costs of suit, they are allowed to the prevailing party as a matter of course, unless there be special reasons for the court to decree otherwise (Sec. 1, Rule 43, Rules of Court). In appeals, the Court has the power to render judgment for costs as justice may require (Sec. 2, Rule 142, Rules of Court). In view of the foregoing, the award of costs to the respondents was warranted under the circumstances.14 Before this Court, LBP raises the same issues for resolution: I. Is it valid or lawful to award 12% rate of interest per annum in favor of respondents notwithstanding the 6% rate of interest per annum compounded annually prescribed under DAR A.O. No. 13, series of 1994, DAR A.O. No. 02, series of 2004, and DAR A.O. No. 06, series of 2008, "xxx from November 1994 up to the time of actual payment? II. Is it valid or lawful to adjudge petitioner LBP, which is performing a governmental function, liable for costs of suit?15 At the outset, the Court notes that the parcels of land subject matter of this case were acquired under Presidential Decree No. 27, but the complaint for just compensation was filed in the RTC on 1

December 1994 after Republic Act No. 6657 already took into effect.16 Thus, our pronouncement in LBP v. Soriano17 finds application. We quote: x x x [I]f just compensation is not settled prior to the passage of Republic Act No. 6657, it should be computed in accordance with the said law, although the property was acquired under Presidential Decree No. 27. The fixing of just compensation should therefore be based on the parameters set out in Republic Act No. 6657, with Presidential Decree No. 27 and Executive Order No. 228 having only suppletory effect. In the instant case, while the subject lands were acquired under Presidential Decree No. 27, the complaint for just compensation was only lodged before the court on 23 November 2000 or long after the passage of Republic Act No. 6657 in 1998. Therefore, Section 17 of Republic Act No. 6657 should be the principal basis of the computation for just compensation. As a matter of fact, the factors enumerated therein had already been translated into a basic formula by the DAR pursuant to its rule-making power under Section 49 of Republic Act No. 6657. The formula outlines in DAR Administrative Order No. 5, series of 1998 should be applied in computing just compensation, thus: LV = Where: (CNI x 0.6) + (CS x 0.3) + (MV x 0.1) LV = Land Value

CNI = Capitalized Net Income CS = Comparable Sales

MV = Market Value per Tax Declaration In the case before Us, the just compensation was computed based on Executive Order No. 228, which computation the parties do not

contest. Consequently, we reiterate our rule in LBP v. Soriano that "while we uphold the amount derived from the old formula, since the application of the new formula is a matter of law and thus, should be made applicable, the parties are not precluded from asking for any additional amount as may be warranted by the new formula."18 That settled, we now proceed to resolve the issue of the propriety of the imposition of 12% interest on just compensation awarded to the respondents. The Court of Appeals imposed interest of 12% per annum on the amount of P515,777.57 beginning 7 October 2004, until full payment. We agree with the Court of Appeals. In Republic v. Court of Appeals,19 we affirmed the award of 12% interest on just compensation due to the landowner. The court decreed: The constitutional limitation of "just compensation" is considered to be the sum equivalent to the market value of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal action and competition or the fair value of the property as between one who receives, and one who desires to sell, if fixed at the time of the actual taking by the government. Thus, if property is taken for public use before compensation is deposited with the court having jurisdiction over the case, the final compensation must include interest on its just value to be computed from the time the property is taken to the time when compensation is actually paid or deposited with the court. In fine, between the taking of the property and the actual payment, legal interests accrue in order to place the owner in a position as good as (but not better than) the position he was in before the taking occurred. The Bulacan trial court, in its 1979 decision, was correct in imposing interest on the zonal value of the property to be computed from the

time petitioner instituted condemnation proceedings and "took" the property in September 1969. This allowance of interest on the amount found to be the value of the property as of the time of the taking computed, being an effective forbearance, at 12% per annum should help eliminate the issue of the constant fluctuation and inflation of the value of the currency over time. 20 We similarly upheld Republics 12% per annum interest rate on the unpaid expropriation compensation in the following cases: Reyes v. National Housing Authority,21 Land Bank of the Philippines v. Wycoco,22 Republic v. Court of Appeals,23 Land Bank of the Philippines v. Imperial,24 Philippine Ports Authority v. RosalesBondoc,25 Nepomuceno v. City of Surigao,26 and Curata v. Philippine Ports Authority.27 Conformably with the foregoing resolution, this Court rules that a 12% interest per annum on just compensation, due to the respondents, from the finality of this decision until its satisfaction, is proper.28 We now proceed to the issue of whether or not the Court of Appeals correctly adjudged LBP liable to pay the cost of suit. According to LBP, it performs a governmental function when it disburses the Agrarian Reform Fund to satisfy awards of just compensation. Hence, it cannot be made to pay costs in eminent domain proceedings.1avvphi1 LBP cites Sps. Badillo v. Hon. Tayag,29 to further bolster its claim that it is exempt from the payment of costs of suit. The Court in that case made the following pronouncement: On the other hand, the NHA contends that it is exempt from paying all kinds of fees and charges, because it performs governmental functions. It cites Public Estates Authority v. Yujuico, which holds that the Public Estates Authority (PEA), a government-owned and

controlled corporation, is exempt from paying docket fees whenever it files a suit in relation to its governmental functions. We agree. People's Homesite and Housing Corporation v. Court of Industrial Relations declares that the provision of mass housing is a governmental function: Coming now to the case at bar, We note that since 1941 when the National Housing Commission (predecessor of PHHC, which is now known as the National Housing Authority [NHA] was created, the Philippine government has pursued a mass housing and resettlement program to meet the needs of Filipinos for decent housing. The agency tasked with implementing such governmental program was the PHHC. These can be gleaned from the provisions of Commonwealth Act 648, the charter of said agency. We rule that the PHHC is a governmental institution performing governmental functions. This is not the first time We are ruling on the proper characterization of housing as an activity of the government. In the 1985 case of National Housing Corporation v. Juco and the NLRC (No. L-64313, January 17, 1985, 134 SCRA 172), We ruled that housing is a governmental function. While it has not always been easy to distinguish governmental from proprietary functions, the Court's declaration in the Decision quoted above is not without basis. Indeed, the characterization of governmental functions has veered away from the traditional constituent-ministrant classification that has become unrealistic, if not obsolete. Justice Isagani A. Cruz avers: "[I]t is now obligatory upon the State itself to promote social justice, to provide adequate social services to promote a rising standard of living, to afford protection to labor to formulate and implement urban and agrarian

reform programs, and to adopt other measures intended to ensure the dignity, welfare and security of its citizens.....These functions, while traditionally regarded as merely ministrant and optional, have been made compulsory by the Constitution."30 We agree with the LBP. The relevant provision of the Rules of Court states: Rule 142 Costs Section 1. Costs ordinarily follow results of suit. Unless otherwise provided in these rules, costs shall be allowed to the prevailing party as a matter of course but the court shall have power, for special reasons adjudge that either party shall pay the costs of an action, or that the same be divided, as may be equitable. No costs shall be allowed against the Republic of the Philippines unless otherwise provided by law. In Heirs of Vidad v. Land Bank of the Philippines,31this Court extensively discussed the role of LBP in the implementation of the agrarian reform program. LBP is an agency created primarily to provide financial support in all phases of agrarian reform pursuant to Section 74 of Republic Act (RA) No. 3844 and Section 64 of RA No. 6657. It is vested with the primary responsibility and authority in the valuation and compensation of covered landholdings to carry out the full implementation of the Agrarian Reform Program. It may agree with the DAR and the land owner as to the amount of just compensation to be paid to the latter and may also disagree with them and bring the matter to court for judicial determination. xxxx

To the contrary, the Court had already recognized in Sharp International Marketing v. Court of Appeals that the LBP plays a significant role under the CARL and in the implementation of the CARP, thus: As may be gleaned very clearly from EO 229, the LBP is an essential part of the government sector with regard to the payment of compensation to the landowner. It is, after all, the instrumentality that is charged with the disbursement of public funds for purposes of agrarian reform. It is therefore part, an indispensable cog, in the governmental machinery that fixes and determines the amount compensable to the landowner. Were LBP to be excluded from that intricate, if not sensitive, function of establishing the compensable amount, there would be no amount "to be established by the government" as required in Sec. 6, EO 229. This is precisely why the law requires the [Deed of Absolute Sale (DAS)], even if already approved and signed by the DAR Secretary, to be transmitted still to the LBP for its review, evaluation and approval. It needs no exceptional intelligence to understand the implications of this transmittal. It simply means that if LBP agrees on the amount stated in the DAS, after its review and evaluation, it becomes its duty to sign the deed. But not until then. For, it is only in that event that the amount to be compensated shall have been "established" according to law. Inversely, if the LBP, after review and evaluation, refuses to sign, it is because as a party to the contract it does not give its consent thereto. This necessarily implies the exercise of judgment on the part of LBP, which is not supposed to be a mere rubber stamp in the exercise. Obviously, were it not so, LBP could not have been made a distinct member of [Presidential Agrarian Reform Council (PARC)], the super body responsible for the successful implementation of the CARP. Neither would it have been given the power to review and evaluate the DAS already signed by the DAR Secretary. If the function of the LBP in this regard is merely to sign the DAS without the concomitant power of review and evaluation, its duty to "review/evaluate" mandated in Adm.

Order No. 5 would have been a mere surplus age, meaningless, and a useless ceremony. xxxx Even more explicit is R.A. 6657 with respect to the indispensable role of LBP in the determination of the amount to be compensated to the landowner. Under Sec. 18 thereof, "the LBP shall compensate the landowner in such amount as may be agreed upon by the landowner and the DAR and LBP, in accordance with the criteria provided in Secs. 16 and 17, and other pertinent provisions hereof, or as may be finally determined by the court, as the just compensation for the land." xxxx It must be observed that once an expropriation proceeding for the acquisition of private agricultural lands is commenced by the DAR, the indispensable role of Land Bank begins. xxxx It is evident from the afore-quoted jurisprudence that the role of LBP in the CARP is more than just the ministerial duty of keeping and disbursing the Agrarian Reform Funds. As the Court had previously declared, the LBP is primarily responsible for the valuation and determination of compensation for all private lands. It has the discretion to approve or reject the land valuation and just compensation for a private agricultural land placed under the CARP. In case the LBP disagrees with the valuation of land and determination of just compensation by a party, the DAR, or even the courts, the LBP not only has the right, but the duty, to challenge the same, by appeal to the Court of Appeals or to this Court, if appropriate.32

It is clear from the above discussions that since LBP is performing a governmental function in agrarian reform proceeding, it is exempt from the payment of costs of suit as provided under Rule 142, Section 1 of the Rules of Court. WHEREFORE, premises considered, the petition is GRANTED. The decision of the Court of Appeals in CA G.R. SP No. 87463 dated 9 October 2007 is AFFIRMED with the MODIFICATION that LBP is hereby held exempted from the payment of costs of suit. In all other respects, the Decision of the Court of Appeals is AFFIRMED. No costs. SO ORDERED. G.R. No. 167000 June 8, 2011

At bar are two consolidated Petitions for Review on Certiorari concerning 78 parcels of land located in Barrio Marigondon, LapuLapu City. The parties in both cases have been in litigation over these lots for the last two decades in what seems to be an endless exercise of filing repetitious suits before the Court of Appeals and even this Court, questioning the various decisions and resolutions issued by the two separate trial courts involved. With this decision, it is intended that all legal disputes among the parties concerned, particularly over all the issues involved in these cases, will finally come to an end In the Petition in G.R. No. 167000, the Government Service Insurance System (GSIS) seeks to reverse and set aside the November 25, 2004 Decision1 and January 20, 2005 Resolution2 of the Twentieth Division of the Court of Appeals in CA-G.R. SP No. 85096 and to annul and set aside the March 11, 20043 and May 7, 20044 Orders of the Regional Trial Court (RTC) of Lapu-Lapu City (Lapu-Lapu RTC) in Civil Case No. 2203-L. In the Petition in G.R. No. 169971, Group Management Corporation (GMC) seeks to reverse and set aside the September 23, 2005 Decision5 in CA-G.R. SP No. 84382 wherein the Special Nineteenth Division of the Court of Appeals annulled and set aside the March 11, 2004 Order of the Lapu-Lapu RTC in Civil Case No. 2203-L. Both these cases stem from the same undisputed factual antecedents as follows: Lapu-Lapu Development & Housing Corporation6 (LLDHC) was the registered owner of seventy-eight (78) lots (subject lots), situated in Barrio Marigondon, Lapu-Lapu City. On February 4, 1974, LLDHC and the GSIS entered into a Project and Loan Agreement for the development of the subject lots. GSIS agreed to extend a Twenty-Five Million Peso-loan (P25,000,000.00) to LLDHC, and in return, LLDHC will develop, subdivide, and sell

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), Petitioner, vs. GROUP MANAGEMENT CORPORATION (GMC) AND LAPU-LAPU DEVELOPMENT & HOUSING Corporation (LLDHc), Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 169971 GROUP MANAGEMENT CORPORATION (GMC), Petitioner, vs. LAPU-LAPU DEVELOPMENT & HOUSING Corporation (LLDHc) and GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), Respondents. DECISION LEONARDO-DE CASTRO, J.:

its lots to GSIS members. To secure the payment of the loan, LLDHC executed a real estate mortgage over the subject lots in favor of GSIS. For LLDHCs failure to fulfill its obligations, GSIS foreclosed the mortgage. As the lone bidder in the public auction sale, GSIS acquired the subject lots, and eventually was able to consolidate its ownership over the subject lots with the corresponding transfer certificates of title (TCTs) issued in its name. On November 19, 1979, GMC offered to purchase on installments the subject lots from GSIS for a total price of One Million One Hundred Thousand Pesos (P1,100,000.00), with the aggregate area specified as 423,177 square meters. GSIS accepted the offer and on February 26, 1980, executed a Deed of Conditional Sale over the subject lots. However, when GMC discovered that the total area of the subject lots was only 298,504 square meters, it wrote GSIS and proposed to proportionately reduce the purchase price to conform to the actual total area of the subject lots. GSIS approved this proposal and an Amendment to the Deed of Conditional Sale was executed to reflect the final sales agreement between GSIS and GMC. On April 23, 1980, LLDHC filed a complaint for Annulment of Foreclosure with Writ of Mandatory Injunction against GSIS before the RTC of Manila (Manila RTC). This became Civil Case No. R82-34297 and was assigned to Branch 38. On November 3, 1989, GMC filed its own complaint against GSIS for Specific Performance with Damages before the Lapu-Lapu RTC. The complaint was docketed as Civil Case No. 2203-L and it sought to compel GSIS to execute a Final Deed of Sale over the subject lots since the purchase price had already been fully paid by GMC. GSIS, in defense, submitted to the court a Commission on Audit (COA) Memorandum dated April 3, 1989, purportedly disallowing in audit the sale of the subject lots for "apparent inherent irregularities," the sale price to GMC being lower than GSISs purchase price at the

public auction. LLDHC, having been allowed to intervene, filed a Motion to Dismiss GMCs complaint. When this motion was denied, LLDHC filed its Answer-in-Intervention and participated in the ensuing proceedings as an intervenor. GMC, on February 1, 1992, filed its own Motion to Intervene with a Complaint-in-Intervention in Civil Case No. R-82-3429. This was dismissed on February 17, 1992 and finally denied on March 23, 1992 by the Manila RTC on the ground that GMC can protect its interest in another proceeding.8 On February 24, 1992, after a full-blown trial, the Lapu-Lapu RTC rendered its Decision9 in Civil Case No. 2203-L, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered ordering defendant to: 1. Execute the final deed of absolute sale and deliver the seventy-eight (78) certificates of title covering said seventyeight (78) parcels of land to the [Group Management Corporation (GMC)]; 2. Pay [GMC] actual damages, plus attorneys fees and expenses of litigation, in the amount of P285,638.88 and P100,000.00 exemplary damages; 3. [D]ismissing in toto intervenors complaint-inintervention for lack of evidence of legal standing and legal interest in the suit, as well as failure to substantiate any cause of action against either [GMC] or [GSIS]. 10 In deciding in favor of GMC, the Lapu-Lapu RTC held that there existed a valid and binding sales contract between GSIS and GMC, which GSIS could not continue to ignore without any justifiable reason especially since GMC had already fully complied with its obligations. 11

The Lapu-Lapu RTC found GSISs invocation of COAs alleged disapproval of the sale belated and self-serving. The Lapu-Lapu RTC said that COA, in disapproving GSISs sale of the subject lots to GMC, violated its own circular which excludes the disposal by a government owned and/or controlled corporation of its "acquired assets" (e.g., foreclosed assets or collaterals acquired in the regular course of business).12 The Lapu-Lapu RTC also held that COA may not intrude into GSISs charter -granted power to dispose of its acquired assets within five years from acquisition by "preventing/aborting the sale in question by refusing to pass it in audit."13 Moreover, the Lapu-Lapu RTC held that the GSIS-proferred COA Memorandum was inadmissible in evidence not only because as a mere photocopy it failed to measure up to the "best evidence" rule under the Revised Rules of Court, but also because no one from COA, not even the auditor who supposedly prepared it, was ever presented to testify to the veracity of its contents or its due execution.14 In dismissing LLDHCs complaint-in-intervention, the Lapu-Lapu RTC held that LLDHC failed to prove its legal personality as a party-intervenor and all it was able to establish was a "suggestion of right for [GSIS] to renege [on] the sale for reasons peculiar to [GSIS] but not transmissible nor subject to invocation by [LLDHC]."15 LLDHC and GSIS filed their separate Notices of Appeal but these were dismissed by the Lapu-Lapu RTC on December 6, 1993.16 On May 10, 1994, the Manila RTC rendered a Decision17 in Civil Case No. R-82-3429. The Manila RTC held that GSIS was unable to prove the alleged violations committed by LLDHC to warrant the foreclosure of the mortgage over the subject lots. Thus, the Manila RTC annulled the foreclosure made by GSIS and ordered LLDHC to pay GSIS the balance of its loan with interest, to wit: WHEREFORE, judgment is hereby rendered:

1. ANNULLING the foreclosure by the defendant GSIS of the mortgage over the seventy-eight (78) parcels of land here involved: 2. CANCELLING the consolidated certificates of [title] issued in the name of GSIS and directing the Register of Deeds of Lapu-Lapu City to issue new certificates of [title] over those seventy-eight (78) parcels of land in the name of the plaintiff, in exactly the same condition as they were before the foreclosure; 3. ORDERING the plaintiff to pay the GSIS the amount of P9,200,000.00 with interest thereon at the rate of twelve (12%) percent per annum commencing from October 12, 1989 until fully paid; and 4. ORDERING defendant GSIS to execute a properly registrable release of discharge of mortgage over the parcels of land here involved after full payment of such amount by the plaintiff. All claims and counterclaims by the parties as against each other are hereby dismissed. No pronouncement as to costs.18 Armed with the Manila RTC decision, LLDHC, on July 27, 1994, filed before the Court of Appeals a Petition for Annulment of Judgment of the Lapu-Lapu RTC Decision in Civil Case No. 2203L.19 LLDHC alleged that the Manila RTC decision nullified the sale of the subject lots to GMC and consequently, the Lapu-Lapu RTC decision was also nullified. This petition, docketed as CA-G.R. SP No. 34696, was dismissed by the Court of Appeals on December 29, 1994. 20 The Court of Appeals,

in finding that the grounds LLDHC relied on were without merit, said: In fine, there being no showing from the allegations of the petition that the respondent court is without jurisdiction over the subject matter and of the parties in Civil Case No. 2309 [2203-L], petitioner has no cause of action for the annulment of judgment. The complaint must allege ultimate facts for the annulment of the decision (Avendana v. Bautista, 142 SCRA 41). We find none in this case. 21 No appeal having been taken by LLDHC, the decision of the Court of Appeals in CA-G.R. SP No. 34696 became final and executory on January 28, 1995, as stated in the Entry of Final Judgment dated August 18, 1995.22 On February 2, 1995, LLDHC filed before this Court a Petition for Certiorari23 docketed as G.R. No. 118633. LLDHC, in seeking to annul the February 24, 1992 Decision of the Lapu-Lapu RTC, again alleged that the Manila RTC Decision nullified the Lapu-Lapu RTC Decision. Finding the petition a mere reproduction of the Petition for Annulment filed before the Court of Appeals in CA-G.R. SP No. 34696, this Court, in a Resolution24 dated September 6, 1996, dismissed the petition in this wise: In a last ditch attempt to annul the February 24, 1992 Decision of the respondent court, this petition was brought before us on February 2, 1995. Dismissal of this petition is inevitable. The instant petition which is captioned, For: Certiorari With Preliminary Injunction, is actually another Petition for Annulment of Judgment of the February 24, 1992 Decision of the respondent Regional Trial Court of Lapu-lapu City, Branch 27 in Civil Case No.

2203-L. A close perusal of this petition as well as the Petition for Annulment of Judgment brought by the petitioner before the Court of Appeals in CA-G.R. SP No. 34696 reveals that the instant petition is a mere reproduction of the petition/complaint filed before the appellate tribunal for annulment of judgment. Paragraphs two (2) to eighteen (18) of this petition were copied verbatim from the Petition for Annulment of Judgment earlier filed in the court a quo, except for the designation of the parties thereto, i.e., plaintiff was changed to petitioner, defendant to respondent. In fact, even the prayer in this petition is the same prayer in the Petition for Annulment of Judgment dismissed by the Court of Appeals, x x x. xxxx Under Section 9(2) of Batas Pambansa Blg. 129, otherwise known as "The Judiciary Reorganization Act of 1980," it is the Court of Appeals (then the Intermediate Appellate Court), and not this Court, which has jurisdiction to annul judgments of Regional Trial Courts, viz: SEC. 9. Jurisdiction -- The Intermediate Appellate Court shall exercise: xxxx (2) Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts; and xxxx Thus, this Court apparently has no jurisdiction to entertain a petition which is evidently another petition to annul the February 24, 1992 Decision of the respondent Branch 27, Regional Trial Court of Lapulapu City, it appearing that jurisdiction thereto properly pertains to the Court of Appeals. Such a petition was brought before the appellate court, but due to petitioners failure to nullify Judge Risos

Decision in said forum, LLDHC, apparently at a loss as to what legal remedy to take, brought the instant petition under the guise of a petition for certiorari under Rule 65 seeking once again to annul the judgment of Branch 27. Instead of filing this petition for certiorari under Rule 65, which is essentially another Petition to Annul Judgment, petitioner LLDHC should have filed a timely Petition for Review under Rule 45 of the Revised Rules of Court of the decision of the Court of Appeals, dated December 29, 1994, dismissing the Petition for Annulment of Judgment filed by the petitioner LLDHC before the court a quo. But, this is all academic now. The appellate courts decision had become final and executory on January 28, 1995.25 Despite such pronouncements, this Court, nevertheless, passed upon the merits of LLDHCs Petition for Certiorari in G.R. No. 118633. This Court said that the petition, "which was truly for annulment of judgment,"26 cannot prosper because the two grounds on which a judgment may be annulled were not present in the case. 27 Going further, this Court held that even if the petition were to be given due course as a petition for certiorari under Rule 65 of the Revised Rules of Court, it would still be dismissible for not being brought within a reasonable period of time as it took LLDHC almost three years from the time it received the February 24, 1992 decision until the time it brought this action.28 LLDHCs motion for reconsideration was denied with finality 29 on November 18, 1996, and on February 18, 1997, an Entry of Judgment30 was made certifying that the September 6, 1996 Resolution of this Court in G.R. No. 118633 had become final and executory on December 23, 1996. Consequently, on November 28, 1996, the Lapu-Lapu RTC issued an Order31 directing the execution of the judgment in Civil Case No. 2203-L. A corresponding Writ of Execution32 was issued on December 17, 1996. The Motions to Stay Execution filed by LLDHC

and GSIS were denied by the Lapu-Lapu RTC on February 19, 1997.33 Meanwhile, on December 27, 1996, the Court of Appeals rendered a Decision34 in the separate appeals taken by GSIS and LLDHC from the May 10, 1994 Manila RTC Decision in Civil Case No. R-823429. This case, docketed as CA-G.R. CV No. 49117, affirmed the Manila RTC decision with modification insofar as awarding LLDHC attorneys fees and litigation expenses. On March 3, 1997, GSIS came to this Court on a Petition for Review of the Court of Appeals decision in CA-G.R. CV No. 49117. This was docketed as G.R. No. 127732 and was dismissed on April 14, 199735 due to late filing, the due date being January 31, 1997. This dismissal became final and executory on May 30, 1997.36 On March 8, 1997, LLDHC filed a Petition for Certiorari with preliminary injunction before the Court of Appeals, praying that GMC and the Lapu-Lapu RTC be ordered to cease and desist from proceeding with the execution of its Decision in Civil Case No. 2203-L, on the theory that the Manila RTC decision was a supervening event which made it mandatory for the Lapu-Lapu RTC to stop the execution of its decision. This case was docketed as CAG.R. SP No. 44052. On July 16, 1997, the Court of Appeals issued an Order temporarily restraining the Lapu-Lapu RTC and GMC from executing the February 24, 1992 decision in Civil Case No. 2203-L so as not to render the resolution of the case moot and academic. 37 On July 21, 1997, because of GSISs continued refusal to implement the December 17, 1996 Writ of Execution, the Lapu-Lapu RTC, upon GMCs motion, issued an Order 38 redirecting its instructions to the Register of Deeds of Lapu-Lapu City, to wit: WHEREFORE, the defendant GSIS having refused to implement the Order of this Court dated December 17, 1996 the Court in accordance with Rule 39, Sec. 10-a of the 1997 Rules of Procedure,

hereby directs the Register of Deeds of Lapu-lapu City to cancel the Transfer Certificate of Titles of the properties involved in this case and to issue new ones in the name of the plaintiff and to deliver the same to the latter within ten (10) days after this Order shall have become final.39 While the TRO issued by the Court of Appeals in CA-G.R. SP No. 44052 was in effect, the Manila RTC, on August 1, 1997, issued a Writ of Execution40 of its judgment in Civil Case No. R-82-3429. On August 7, 1997, the Sheriff implemented the Writ and ordered the Register of Deeds of Lapu-Lapu City to cancel the consolidated certificates of title issued in the name of GSIS and to issue new ones in favor of LLDHC. In conformity with the TRO, the Lapu-Lapu RTC on August 19, 1997, ordered41 the suspension of its July 21, 1997 Order. With no similar restraining order against the execution of the Manila RTC Decision, a Writ of Possession was issued on August 21, 1997 to cause GSIS and all persons claiming rights under it to vacate the properties in question and to place LLDHC in peaceful possession thereof.42 On October 23, 1997, the Lapu-Lapu RTC, being aware of the events that have taken place while the TRO was in effect, issued an Order 43 reiterating its previous Orders of November 28, 1996, December 17, 1996, and July 21, 1997. The Lapu-Lapu RTC held that since the restraining order issued by the Court of Appeals in CA-G.R. SP No. 44052 had already lapsed by operation of law, and the February 24, 1992 Decision in Civil Case No. 2203-L had not only become final and executory but had been affirmed and upheld by both the Court of Appeals and this Court, the inescapable mandate was to give due course to the efficacy of its decision. The Lapu-Lapu RTC thus directed the Register of Deeds of Lapu-Lapu City to effect the transfer of the titles to the subject lots in favor of GMC and declared "any and all acts done by the Register of Deeds of Lapu-Lapu City null and void starting with the surreptitious issuance of the new certificates of title in the name of [LLDHC], contrary" to its decision and orders.44

On November 13, 1997, LLDHC filed before the Court of Appeals another Petition for Certiorari with preliminary injunction and motion to consolidate with CA-G.R. SP No. 44052. This case was docketed as CA-G.R. SP No. 45946, but was dismissed45 on November 20, 1997 for LLDHCs failure to comply with Section 1, Rule 65 of the 1997 Rules of Civil Procedure which requires the petition to be accompanied by, among others, "copies of all pleadings and documents relevant and pertinent thereto."46 The petition in CA-G.R. SP No. 44052 would likewise be dismissed47 by the Court of Appeals on January 9, 1998, but this time, on the merits, to wit: The validity of the decision of the respondent judge in Civil Case No. 2303-L has thus been brought both before this Court and to the Supreme Court by the petitioner. In both instances the respondent judge has been upheld. The instant petition is petitioners latest attempt to resist the implementation or execution of that decision using as a shield a decision of a Regional Trial Court in the National Capital Region. We are not prepared to allow it. The applicable rule and jurisprudence are clear. The prevailing party is entitled as a matter of right to a writ of execution, and the issuance thereof is a ministerial duty compellable by mandamus. We do not believe that there exists in this instance a supervening event which would justify a deviation from this rule.48 Prior to this, however, on November 28, 1997, the Lapu-Lapu RTC, acting on GMCs Omnibus Motion, made the following orders: for LLDHC to show cause why it should not be declared in contempt; for a writ of preliminary prohibitory injunction to be issued to restrain all persons acting on LLDHCs orders from carrying out such orders in defiance of its final and executory judgment; and for a writ of preliminary mandatory injunction to be issued to direct the ouster of LLDHC. The Lapu-Lapu RTC also declared the Register of Deeds of Lapu-Lapu City in contempt and directed the Office of the City Sheriff to implement the above orders and to immediately

detain and confine the Register of Deeds of Lapu-Lapu City at the City Jail if he continues to refuse to transfer the titles of the subject lots after ten days from receipt of this order. 49 On December 22, 1997, the Lapu-Lapu RTC denied50 the motion for reconsideration filed by the Register of Deeds of Lapu-Lapu City. In separate motions, LLDHC, and again the Register of Deeds of LapuLapu City, sought the reconsideration of the November 28, 1997 and December 22, 1997 Orders. On May 27, 1998, the Lapu-Lapu RTC, acting under a new judge, 51 granted both motions and accordingly set aside the November 28, 1997 and December 22, 1997 Orders. 52 With the denial53 of its motion for reconsideration on August 4, 1998, GMC came to this Court on a Petition for Certiorari, Prohibition and Mandamus, seeking to set aside the May 27, 1998 Order of the Lapu-Lapu RTC in Civil Case No. 2203-L. The Petition was referred to the Court of Appeals, which under Batas Pambansa Blg. 129, exercises original jurisdiction to issue such writs.54 This was docketed as CA-G.R. SP No. 50650. On April 30, 1999, the Court of Appeals rendered its Decision55 in CA-G.R. SP No. 50650, the dispositive portion of which reads: WHEREFORE, the petition being partly meritorious, the Court hereby resolves as follows: (1) To AFFIRM the Orders of May 28, 1998 and August 4, 1998 in Civil Case No. 2203-L insofar as they set aside the order holding respondent Register of Deeds guilty of indirect contempt of court and to NULLIFY said orders in so far as they set aside the directives contained in paragraphs (a) and (b) and (c) of the order dated November 28, 1997. (2) To DECLARE without FORCE and EFFECT insofar as petitioner Group Management Corporation is concerned the

decision in Civil Case No. R-82-3429 as well as the orders and writs issued for its execution and enforcement: and (3) To ENJOIN respondent Lapu-Lapu Development and Housing Corporation, along with its agents and representatives and/or persons/public officials/employees acting in its interest, specifically respondent Regional Trial Court of Manila Branch 38, and respondent Register of Deeds of Lapu-Lapu City, from obstructing, interfering with or in any manner delaying the implementation/execution/ enforcement by the Lapu-Lapu City RTC of its order and writ of execution in Civil Case No. 2203-L. For lack of sufficient basis the charge of contempt of court against respondent Lapu-Lapu Development and Housing Corporation and the public respondents is hereby DISMISSED. 56 With the denial of LLDHCs motion for reconsideration on December 29, 1999,57 LLDHC, on January 26, 2000, filed before this Court a Petition for Review on Certiorari assailing the April 30, 1999 decision of the Court of Appeals in CA-G.R. SP No. 50650. This petition was docketed as G.R. No. 141407. This Court dismissed LLDHCs petition and upheld the decision of the Court of Appeals in CA-G.R. SP No. 50650 in its decision dated September 9, 2002.58 LLDHCs Motion for Reconsideration and Second Motion for Reconsideration were also denied on November 13, 200259 and February 3, 2003,60 respectively. The September 9, 2002 decision of this Court in G.R. No. 141407 became final on March 10, 2003.61 On March 11, 2004, the Lapu-Lapu RTC, acting on GMCs Motion for Execution, issued an Order62 the dispositive portion of which reads:

WHEREFORE, in light of the foregoing considerations, plaintiff Group Management Corporations motion is GRANTED, while defendant GSIS motion to stay the issuance of a writ of execution is denied for lack of merit. Consequently, the Sheriff of this Court is directed to proceed with the immediate implementation of this Courts decision dated February 24, 1992, by enforcing completely this Courts Order of Execution dated November 28, 1996, the writ of execution dated December 17, 1996, the Order dated July 21, 1997, the Order dated October 23 1997, the Order dated November 28, 1997 and the Order dated December 22, 1997. 63 On May 7, 2004, the Lapu-Lapu RTC denied64 the motions for reconsideration filed by LLDHC and GSIS. On May 27, 2004, LLDHC filed before the Court of Appeals a Petition for Certiorari, Prohibition and Mandamus65 against the Lapu-Lapu RTC for having issued the Orders of March 11, 2004 and May 7, 2004 (assailed Orders). This petition docketed as CA-G.R. SP No. 84382, sought the annulment of the assailed Orders and for the Court of Appeals to command the Lapu-Lapu RTC to desist from further proceeding in Civil Case No. 2203-L, to dismiss GMCs Motion for Execution, and for the issuance of a Temporary Restraining Order (TRO)/Writ of Preliminary Injunction against the Lapu-Lapu RTC and GMC. On July 6, 2004, GSIS filed its own Petition for Certiorari and Prohibition with Preliminary Injunction and Temporary Restraining Order66 before the Court of Appeals to annul the assailed Orders of the Lapu-Lapu RTC, to prohibit the judge therein and the Register of Deeds of Lapu-Lapu City from implementing such assailed Orders, and for the issuance of a TRO and writ of preliminary injunction to maintain the status quo while the case is under litigation. This petition was docketed as CA-G.R. SP No. 85096. The Court of Appeals initially dismissed outright LLDHCs petition for failure to attach the Required Secretarys Certificate/Board

Resolution authorizing petitioner to initiate the petition,67 but in a Resolution68 dated August 2, 2004, after having found the explanation for the mistake satisfactory, the Court of Appeals, "on equitable consideration and for the purpose of preserving the status quo during the pendency of the appeal,"69 issued a TRO against the Lapu-Lapu RTC from enforcing its jurisdiction and judgment/order in Civil Case No. 2203-L until further orders. In its August 30, 2004 Resolution,70 the Court of Appeals, without resolving the case on its merits, also issued a Writ of Preliminary Injunction, commanding the Lapu-Lapu RTC to cease and desist from implementing the assailed Orders in Civil Case No. 2203-L, until further orders. On November 25, 2004, the Twentieth Division of the Court of Appeals promulgated its decision in CA-G.R. SP No. 85096. It dismissed GSISs petition and affirmed the assailed Orders of March 11, 2004 and May 7, 2004. The Court of Appeals found no merit in GSISs petition since the judgment in Civil Case No. 2203 -L, which was decided way back on February 24, 1992, had long become final and executory, which meant that the Lapu-Lapu RTC had no legal obstacle to cause said judgment to be executed and enforced. The Court of Appeals quoted in full, portions of this Courts Decision in G.R. No. 141407 to underscore the fact that no less than the Supreme Court had declared that the decision in Civil Case No. 2203-L was valid and binding and had become final and executory a long time ago and had not been in any way nullified by the decision rendered by the Manila RTC on May 10, 1994 in Civil Case No. R-82-3429. On January 20, 2005, the Court of Appeals upheld its decision and denied GSISs Motion for Reconsideration. 71 However, on September 23, 2005, the Special Nineteenth Division of the Court of Appeals came out with its own decision in CA-G.R. SP No. 84382. It granted LLDHCs petition, contrary to the Court of Appeals decision in CA-G.R. SP No. 85096, and annulled and set aside the March 11, 2004 Order of the Lapu-Lapu RTC in this wise:

WHEREFORE, finding merit in the instant Petition for Certiorari, Prohibition and Mandamus, the same is hereby GRANTED, and the assailed Order, dated March 11, 2004, of the Regional Trial Court, 7th Judicial Region, Branch 27, Lapulapu City, in Civil Case No. 2203-L is ANNULLED AND SET ASIDE. Accordingly, respondent Judge Benedicto Cobarde is hereby ORDERED: a) to DESIST from further proceeding in Civil Case No. 2203-L; and b) to DISMISS GMCs Motion for Execution in the abovementioned case; Meanwhile, the Writ of Preliminary Injunction earlier issued is hereby declared PERMANENT. No pronouncement as to costs. 72 GSIS73 and GMC74 are now before this Court, with their separate Petitions for Review on Certiorari, assailing the decisions of the Court of Appeals in CA-G.R. SP No. 85096 and CA-G.R. SP No. 84382, respectively. G.R. No. 167000 In G.R. No. 167000, GSIS is assailing the Orders issued by the Lapu-Lapu RTC on March 11, 2004 and May 7, 2004 for being legally unenforceable on GSIS because the titles of the 78 lots in Marigondon, Lapu-Lapu City were already in LLDHCs name, due to the final and executory judgment rendered by the Manila RTC in Civil Case No. R-82-3429. GSIS contends that it is legally and physically impossible for it to comply with the assailed Orders as the "subject matter to be delivered or performed have already been taken away from" 75 GSIS. GSIS asserts that the circumstances which have arisen, from the judgment of the Manila RTC to the cancellation of GSISs titles, are "supervening events" which should be considered

as an exception to the doctrine of finality of judgments because they render the execution of the final and executory judgment of the Lapu-Lapu RTC in Civil Case No. 2203-L unjust and inequitable. GSIS further claims that it should not be made to pay damages of any kind because its funds and properties are exempt from execution, garnishment, and other legal processes under Section 39 of Republic Act No. 8291. LLDHC, in its Compliance,76 believes that it was impleaded in this case as a mere nominal party since it filed its own Petition for Certiorari before the Court of Appeals, which was granted in CAG.R. SP No. 84382. LLDHC essentially agrees with GSIS that the implementation of the assailed Orders have become legally impossible due to the fully implemented Writ of Execution issued by the Manila RTC in Civil Case No. R-82-3429. LLDHC alleges that because of this "supervening event," GSIS cannot be compelled to execute a final deed of sale in GMCs favor, and "LLDHC cannot be divested of its titles, ownership and possession" of the subject properties.77 GMC in its comment 78 argues that GSIS has no legal standing to institute this petition because it has no more interest in the subject lots, since it is no longer in possession and the titles thereto have already been registered in LLDHCs name. GMC claims that the decision of the Special Nineteenth Division of the Court of Appeals is barred by res judicata, and that LLDHC is guilty of forum shopping for filing several petitions before the Court of Appeals and this Court with the same issues and arguments. GMC also asserts that the judgment in Civil Case No. R-82-3429 is enforceable only between GSIS and LLDHC as GMC was not a party to the case, and that the Manila RTC cannot overrule the Lapu-Lapu RTC, they being co-equal courts. G.R. No. 169971

In G.R. No. 169971, GMC is praying that the decision of the Special Nineteenth Division of the Court of Appeals in CA-G.R. SP No. 84382 be reversed and set aside. GMC is claiming that the Court of Appeals, in rendering the said decision, committed a palpable legal error by overruling several final decisions rendered by the LapuLapu RTC, the Court of Appeals, and this Court. 79 GMC claims that the Lapu-Lapu RTCs duty to continue with the implementation of its orders is purely ministerial as the judgment has not only become final and executory, but has been affirmed by both the Court of Appeals and the Supreme Court in several equally final and executory decisions.80 GMC, repeating its arguments in G.R. No. 167000, maintains that the petition is barred by res judicata, that there is forum shopping, and that the Manila RTC decision is not binding on GMC. LLDHC in its comment81 insists that there is a supervening event which rendered it necessary to stay the execution of the judgment of the Lapu-Lapu RTC. LLDHC also asserts that, as correctly found by the Court of Appeals in CA-G.R. SP No. 84382, the Lapu-Lapu RTC decision in Civil Case No. 2203-L was not affirmed with finality by the Court of Appeals and the Supreme Court as the decision was not reviewed on the merits. SUMMARY OF THE ISSUES The present case is peculiar in the sense that it involves two conflicting final and executory decisions of two different trial courts. Moreover, one of the RTC decisions had been fully executed and implemented. To complicate things further, the parties have previously filed several petitions, which have reached not only the Court of Appeals but also this Court. Upon consolidation of the two petitions, this Court has narrowed down the issues to the following: 1. Whether or not the decision of the Manila RTC in Civil Case No. R-82-3429 constitutes a supervening event, which

should be admitted as an exception to the doctrine of finality of judgments. 2. Whether or not the September 23, 2005 Decision of the Special Nineteenth Division of the Court of Appeals in CAG.R. SP No. 84382 and GSISs Petition in G.R. No. 167000 are barred by res judicata. 3. Whether or not there is a legal and physical impossibility for GSIS to comply with the March 11, 2004 and May 7, 2004 Orders of the Lapu-Lapu RTC in Civil Case No. 2203L. 4. Whether or not LLDHC and GSIS are guilty of forum shopping. DISCUSSION First Issue: Supervening Event It is well-settled that once a judgment attains finality, it becomes immutable and unalterable. It may not be changed, altered or modified in any way even if the modification were for the purpose of correcting an erroneous conclusion of fact or law. This is referred to as the "doctrine of finality of judgments," and this doctrine applies even to the highest court of the land. 82 This Court explained its rationale in this wise: The doctrine of finality of judgment is grounded on fundamental considerations of public policy and sound practice, and that, at the risk of occasional errors, the judgments or orders of courts must become final at some definite time fixed by law; otherwise, there would be no end to litigations, thus setting to naught the main role of courts of justice which is to assist in the enforcement of the rule of

law and the maintenance of peace and order by settling justiciable controversies with finality.83 This Court has, on several occasions, ruled that the doctrine of finality of judgments admits of certain exceptions, namely: "the correction of clerical errors, the so-called nunc pro tunc entries which cause no prejudice to any party, void judgments, and whenever circumstances transpire after the finality of the decision which render its execution unjust and inequitable."84 Both GSIS and LLDHC claim that the execution of the decision and orders in Civil Case No. 2203-L should be stayed because of the occurrence of "supervening events" which render the execution of the judgment "impossible, unfair, unjust and inequitable."85 However, in order for an event to be considered a supervening event to justify the alteration or modification of a final judgment, the event must have transpired after the judgment has become final and executory, to wit: Supervening events refer to facts which transpire after judgment has become final and executory or to new circumstances which developed after the judgment has acquired finality, including matters which the parties were not aware of prior to or during the trial as they were not yet in existence at that time. 86 The Lapu-Lapu RTC Decision in Civil Case No. 2203-L was promulgated on February 24, 1992, while the Manila RTC Decision in Civil Case No. R-82-3429 was promulgated on May 10, 1994. As early as December 6, 1993, both GSISs and LLDHCs appeals of the Lapu-Lapu RTC Decision were dismissed by the said RTC. 87 Only GSIS moved to reconsider this dismissal, which was denied on July 6, 1994.88 Strictly speaking, the Lapu Lapu RTC Decision should have attained finality at that stage; however, LLDHC filed with the Court of Appeals its Petition for Annulment of Judgment (CA-G.R. SP No. 34696) on July 27, 1994 and it used therein the

Manila RTC Decision as its main ground for annulment of the LapuLapu RTC decision. The Court of Appeals nonetheless dismissed LLDHCs Petition for Annulment of Judgment, in CA-G.R. SP No. 34696,89 and that became final and executory on January 28, 1995, 90 after LLDHC interposed no appeal. The entry of judgment in this case was issued on August 18, 1995.91 Moreover, the similar petition of LLDHC before this Court in G.R. No. 118633 was decided on September 6, 1996 and became final and executory on December 23, 1996. Therefore, the ruling by the Manila RTC is evidently not a supervening event. It was already in existence even before the decision in Civil Case No. 2203-L attained finality. Just as LLDHC and GSIS, as the losing parties, had the right to file their respective appeals within the prescribed period, GMC, as the winning party in Civil Case No. 2203-L, equally had the correlative right to benefit from the finality of the resolution of its case,92 to wit: A final judgment vests in the prevailing party a right recognized and protected by law under the due process clause of the Constitution. A final judgment is "a vested interest which it is right and equitable that the government should recognize and protect, and of which the individual could not be deprived arbitrarily without injustice." 93 (Citations omitted.) Since the Manila RTC decision does not constitute a supervening event, there is therefore neither reason nor justification to alter, modify or annul the Lapu-Lapu RTC Decision and Orders, which have long become final and executory. Thus, in the present case, GMC must not be deprived of its right to enjoy the fruits of a final verdict. It is settled in jurisprudence that to stay execution of a final judgment, a supervening event "must create a substantial change in the rights or relations of the parties which would render execution of

a final judgment unjust, impossible or inequitable making it imperative to stay immediate execution in the interest of justice."94 However, what would be unjust and inequitable is for the Court to accord preference to the Manila RTC Decision on this occasion when in the past, the Court of Appeals and this Court have repeatedly, consistently, and with finality rejected LLDHCs moves to use the Manila RTC Decision as a ground to annul, and/or to bar the execution of, the Lapu Lapu RTC Decision. To be sure, in the Decision dated September 9, 2002 in G.R. No. 141407, penned by former Chief Justice Artemio V. Panganiban, the Court already passed upon the lack of effect of the Manila RTC Decision on the finality of the Lapu Lapu RTC decision in this wise: The records of the case clearly show that the Lapulapu Decision has become final and executory and is thus valid and binding upon the parties. Obviously, petitioner [LLDHC] is again trying another backdoor attempt to annul the final and executory Decision of the Lapulapu RTC. First, it was petitioner that filed on March 11, 1992 a Notice of Appeal contesting the Lapulapu RTC Judgment in Civil Case No. 2203-L rendered on February 24, 1992. The Notice was however rejected by the said RTC for being frivolous and dilatory. Since petitioner had done nothing thereafter, the Decision clearly became final and executory. However, upon receipt of the Manila RTC Decision, petitioner found a new tool to evade the already final Lapulapu Decision by seeking the annulment of the latter in a Petition with the CA. However, the appellate court dismissed the action, because petitioner had been unable to prove any of the grounds for annulment; namely lack of jurisdiction or extrinsic fraud. Because no appeal had been taken by petitioner, the ruling of the CA also became final and executory.

Second, the Supreme Court likewise recognized the finality of the CA Decision when it threw out LLDHCs Petition for Certiorari in GR No. 118633. This Court ruled thus: "Instead of filing this petition for certiorari under Rule 65, which is essentially another Petition to Annul Judgment, petitioner LLDHC should have filed a timely Petition for Review under Rule 45 of the Revised Rules of Court of the decision of the Court of Appeals, dated December 29, 1994, dismissing the Petition for Annulment of Judgment filed by the petitioner LLDHC before the court a quo. But this is all academic now. The appellate courts decision had become final and executory on January 28, 1995." Jurisprudence mandates that when a decision becomes final and executory, it becomes valid and binding upon the parties and their successors in interest. Such decision or order can no longer be disturbed or reopened no matter how erroneous it may have been. Petitioners failure to file an appeal within the reglementary period renders the judgment final and executory. The perfection of an appeal in the manner and within the period prescribed by law is mandatory. Failure to conform to the rules regarding appeal will render the judgment final and executory and, hence, unappealable. Therefore, since the Lapulapu Decision has become final and executory, its execution has become mandatory and ministerial on the part of the judge. The CA correctly ruled that the Lapulapu Judgment is binding upon petitioner [LLDHC] which, by its own motion, participated as an intervenor. In fact, the latter filed an Answer in Intervention and thereafter actively took part in the trial. Thus, having had an opportunity to be heard and to seek a reconsideration of the action or ruling it complained of, it cannot claim that it was denied due process of law. What the law prohibits is the absolute absence of the opportunity to be heard. Jurisprudence teaches that a party cannot feign denial of due process if it has been afforded the opportunity to present its side.

Petitioner likewise claims that Private Respondent GMC cannot escape the adverse effects of the final and executory judgment of the Manila RTC. Again, we do not agree. A trial court has no power to stop an act that has been authorized by another trial court of equal rank. As correctly stated by the CA, the Decision rendered by the Manila RTC -- while final and executory -- cannot bind herein private respondent [GMC], which was not a party to the case before the said RTC. A personal judgment is binding only upon the parties, their agents, representatives and successors in interest. 1avvphi1 Third, petitioner grievously errs in insisting that the judgment of the Manila RTC nullified that of the Lapulapu RTC. As already adverted to earlier, courts of coequal and coordinate jurisdiction may not interfere with or pass upon each others orders or processes, since they have the same power and jurisdiction. Except in extreme situations authorized by law, they are proscribed from doing so.95(Emphases supplied.) It likewise does not escape the attention of this Court that the only reason the Manila RTC Decision was implemented ahead of the Lapu Lapu RTC Decision was that LLDHC successfully secured a TRO from the Court of Appeals through its petition for certiorari docketed as CA-G.R. SP No. 44052, which was eventually dismissed by the appellate court. The Court of Appeals ruled that the Manila RTC Decision did not constitute a supervening event that would forestall the execution of the Lapu Lapu RTC Decision. This decision of the Court of Appeals likewise became final and executory in 1998. It bears repeating that the issue of whether or not the Manila RTC Decision could nullify or render unenforceable the Lapu Lapu RTC Decision has been litigated many times over in different fora. It would be the height of inequity if the Court were to now reverse the Court of Appeals and its own final and executory rulings and allow

GSIS to prevent the execution of the Lapu Lapu RTC Decision on the same legal grounds previously discredited by the courts. Second Issue: Res Judicata GMC asserts that the September 23, 2005 Decision of the Special Nineteenth Division of the Court of Appeals in CA-G.R. SP No. 84382 and the petition herein by GSIS in G.R. No. 167000 are barred by res judicata as the issues involved had been fully resolved not only by the lower courts but by this Court as well. GSIS and LLDHC both insist that res judicata does not apply as this Court "has not yet rendered a decision involving the same or any similar petition." 96 The petitions by LLDHC before the Court of Appeals and GSIS before this Court both prayed for the annulment of the March 11, 2004 and May 7, 2004 Orders of the Lapu-Lapu RTC in Civil Case No. 2203-L. These assailed Orders were both issued to resolve the parties motions and to have the February 24, 1992 judgment implemented and executed. In Republic of the Philippines (Civil Aeronautics Administration) v. Yu, 97 this Court expounded on the concept of res judicata and explained it in this wise: Res judicata literally means "a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment." Res judicata lays the rule that an existing final judgment or decree rendered on the merits, and without fraud or collusion, by a court of competent jurisdiction, upon any matter within its jurisdiction, is conclusive of the rights of the parties or their privies, in all other actions or suits in the same or any other judicial tribunal of concurrent jurisdiction on the points and matters in issue in the first suit.98

In Villanueva v. Court of Appeals,99 we enumerated the elements of res judicata as follows: a) The former judgment or order must be final; b) It must be a judgment or order on the merits, that is, it was rendered after a consideration of the evidence or stipulations submitted by the parties at the trial of the case; c) It must have been rendered by a court having jurisdiction over the subject matter and the parties; and d) There must be, between the first and second actions, identity of parties, of subject matter and of cause of action. This requisite is satisfied if the two (2) actions are substantially between the same parties. 100 All three parties herein are in agreement with the facts that led to the petitions in this case. However, not all of them agree that the matters involved in this case have already been judicially settled. While GMC contends that GSISs petition is barred by res judicata, both GSIS and LLDHC assert that this Court has not yet decided any similar petition, thus disputing the claim of res judicata. Res judicata has two concepts: (1) "bar by prior judgment" as enunciated in Rule 39, Section 47(b) of the 1997 Rules of Civil Procedure; and (2) "conclusiveness of judgment" in Rule 39, Section 47(c), which reads as follows: (b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity; and

(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto. In explaining the two concepts of res judicata, this Court held that: There is "bar by prior judgment" when, as between the first case where the judgment was rendered, and the second case that is sought to be barred, there is identity of parties, subject matter, and causes of action. But where there is identity of parties and subject matter in the first and second cases, but no identity of causes of action, the first judgment is conclusive only as to those matters actually and directly controverted and determined and not as to matters merely involved therein. This is "conclusiveness of judgment." Under the doctrine of conclusiveness of judgment, facts and issues actually and directly resolved in a former suit cannot again be raised in any future case between the same parties, even if the latter suit may involve a different claim or cause of action. The identity of causes of action is not required but merely identity of issues. 101 In Pealosa v. Tuason,102 we laid down the test in determining whether or not the causes of action in the first and second cases are identical: Would the same evidence support and establish both the present and former cause of action? If so, the former recovery is a bar; if otherwise, it does not stand in the way of the former action. 103 Res judicata clearly exists in G.R. No. 167000 and in CA-G.R. SP No. 84382 because both GSISs and LLDHCs actions put in issue the validity of the Lapu-Lapu RTC Decision and were based on the assumption that it has either been modified, altered or nullified by the Manila RTC Decision.

In CA-G.R. SP No. 84382, LLDHC sought to annul the assailed Orders of the Lapu-Lapu RTC and to order the judge therein to desist from further proceeding in Civil Case No. 2203-L. LLDHC sought for the same reliefs in its Petition for Annulment of Judgment in CAG.R. SP No. 34696 and G.R. No. 118633, in its Petition for Certiorari in CA-G.R. SP No. 44052, and in its Petition for Review on Certiorari in G.R. No. 141407, all of which have been decided with finality. In G.R. No. 167000, GSIS is praying for the reversal of the November 25, 2004 Decision and January 20, 2005 Resolution in CA-G.R. SP No. 85096, wherein the Court of Appeals affirmed the assailed Orders. The validity of these assailed Orders hinges on the validity of the Lapu-Lapu RTC Decision, which issue had already been decided with finality by both the Court of Appeals and this Court. Notwithstanding the difference in the forms of actions GSIS and LLDHC filed, the doctrine of res judicata still applies considering that the parties were litigating the same thing, i.e., the 78 lots in Marigondon, Lapu-Lapu City, and more importantly, the same contentions and evidence were used in all causes of action. As this Court held in Mendiola v. Court of Appeals104: The test of identity of causes of action lies not in the form of an action but on whether the same evidence would support and establish the former and the present causes of action. The difference of actions in the aforesaid cases is of no moment. x x x. 105 The doctrine of res judicata makes a final judgment on the merits rendered by a court of competent jurisdiction conclusive as to the rights of the parties and their privies and amounts to an absolute bar to subsequent actions involving the same claim, demand, or cause of action.106 Even a finding of conclusiveness of judgment operates as estoppel with respect to matters in issue or points controverted, on the determination of which the finding or judgment was anchored. 107

Evidently, this Court could dispose of this case simply upon the application of the principle of res judicata. It is clear that GSISs petition in G.R. No. 167000 and LLDHCs petition in CA-G.R. SP No. 84382 should have never reached those stages for having been barred by a final and executory judgment on their claims. However, considering the nature of the case before us, this Court is compelled to make a final determination of the issues in the interest of substantial justice and to end the wasteful use of our courts time and resources. Third Issue: GSISs Compliance with the Lapu-Lapu RTC Judgment and Orders GSIS asserts that the assailed Orders cannot be enforced upon it given the physical and legal impossibility for it to comply as the titles over the subject properties were transferred to LLDHC under the Manila RTC writ of execution. A closer perusal of the March 11, 2004 and May 7, 2004 Orders shows that GSISs argument holds no water. The May 7, 2004 Order denied GSISs and LLDHCs motions for reconsideration of the March 11, 2004 Order. The March 11, 2004 Order resolved GMCs urgent manifestation and motion to proceed with the implementation of the February 24, 1992 final and executory decision and GSISs and LLDHCs opposition thereto, as well as GSISs motion to stay the issuance of a writ of execution against it. The dispositive portion of the Order reads: WHEREFORE, in the light of the foregoing considerations, plaintiff Group Management Corporations motion is GRANTED, while defendant GSIS motion to stay the issuance of a writ of execution is denied for lack of merit. Consequently, the Sheriff of this Court is directed to proceed with the immediate implementation of this Courts decision dated February 24, 1992, by enforcing

completely this Courts Order of Execution dated November 28, 1996, the writ of execution dated December 17, 1996, the Order dated July 21, 1997, the Order dated October 23, 1997, the Order dated November 28, 1997 and the Order dated December 22, 1997.108 (Emphasis ours.) While the previous orders and writs of execution issued by the LapuLapu RTC required the GSIS to execute the final deed of sale and to deliver the subject properties, the Lapu-Lapu RTC, in its subsequent Orders, modified this by directing its order to the Register of Deeds of Lapu-Lapu City. In its July 21, 1997 Order, 109 the Lapu-Lapu RTC, seeing GSISs obstinate refusal to implement the courts previous orders, directed the Register of Deeds of Lapu-Lapu City to cancel the Transfer Certificates of Title of the subject properties and to issue new ones in the name of GMC, and to deliver the same to GMC. Moreover, in its October 23, 1997 Order, the Lapu-Lapu RTC, noting the implemented judgment of the Manila RTC, declared the issuance of new titles to LLDHC null and void for being contrary to the courts February 24, 1992 decision and directed the Register of Deeds to effect the transfer of the titles to GMC. Considering that the assailed Orders merely directed the Lapu-Lapu RTCs Sheriff to proceed with the implementation of the courts previous orders, that is, to make sure that the Register of Deeds of Lapu-Lapu City complied with the orders, GSIS had nothing to comply with insofar as the titles to, and possession of, the subject properties were concerned, the Orders being clearly directed towards the Sheriff of the Lapu-Lapu RTC and the Register of Deeds of Lapu-Lapu City. Hence, GSISs argument of legal and physica l impossibility of compliance with the assailed Orders is baseless. GSIS also argues that it cannot be the "subject [of any] execution including [the] payment of any damage and other monetary judgments because all GSIS funds and properties are absolutely and expressly exempt from execution and other legal processes under Section 39 of Republic Act No. 8291."110

Section 39 of Republic Act No. 8291 provides: SECTION 39. Exemption from Tax, Legal Process and Lien. It is hereby declared to be the policy of the State that the actuarial solvency of the funds of the GSIS shall be preserved and maintained at all times and that contribution rates necessary to sustain the benefits under this Act shall be kept as low as possible in order not to burden the members of the GSIS and their employers. Taxes imposed on the GSIS tend to impair the actuarial solvency of its funds and increase the contribution rate necessary to sustain the benefits of this Act. Accordingly, notwithstanding any laws to the contrary, the GSIS, its assets, revenues including all accruals thereto, and benefits paid, shall be exempt from all taxes, assessments, fees, charges or duties of all kinds. These exemptions shall continue unless expressly and specifically revoked and any assessment against the GSIS as of the approval of this Act are hereby considered paid. Consequently, all laws, ordinances, regulations, issuances, opinions or jurisprudence contrary to or in derogation of this provision are hereby deemed repealed, superseded and rendered ineffective and without legal force and effect. xxxx The funds and/or the properties referred to herein as well as the benefits, sums or monies corresponding to the benefits under this Act shall be exempt from attachment, garnishment, execution, levy or other processes issued by the courts, quasi judicial agencies or administrative bodies including Commission on Audit (COA) disallowances and from all financial obligations of the members, including his pecuniary accountability arising from or caused or occasioned by his exercise or performance of his official functions or duties, or incurred relative to or in connection with his position or work except when his monetary liability, contractual or otherwise, is in favor of the GSIS.

This Court, in Rubia v. Government Service Insurance System, 111 held that the exemption of GSIS is not absolute and does not encompass all of its funds, to wit: In so far as Section 39 of the GSIS charter exempts the GSIS from execution, suffice it to say that such exemption is not absolute and does not encompass all the GSIS funds. By way of illustration and as may be gleaned from the Implementing Rules and Regulation of the GSIS Act of 1997, one exemption refers to social security benefits and other benefits of GSIS members under Republic Act No. 8291 in connection with financial obligations of the members to other parties. The pertinent GSIS Rule provides: Rule XV. Funds of the GSIS Section 15.7 Exemption of Benefits of Members from Tax, Attachment, Execution, Levy or other Legal Processes. The social security benefits and other benefits of GSIS members under R.A. 8291 shall be exempt from tax, attachment, garnishment, execution, levy or other processes issued by the courts, quasi-judicial agencies or administrative bodies in connection with all financial obligations of the member, including his pecuniary accountability arising from or caused or occasioned by his exercise or performance of his official functions or duties or incurred in connection with his position or work, as well as COA disallowances. Monetary liability in favor of the GSIS, however, may be deducted from the benefits of the member. [Emphasis supplied] The processual exemption of the GSIS funds and properties under Section 39 of the GSIS Charter, in our view, should be read consistently with its avowed principal purpose: to maintain actuarial solvency of the GSIS in the protection of assets which are to be used to finance the retirement, disability and life insurance benefits of its members. Clearly, the exemption should be limited to the purposes and objects covered. Any interpretation that would give it an

expansive construction to exempt all GSIS assets from legal processes absolutely would be unwarranted. Furthermore, the declared policy of the State in Section 39 of the GSIS Charter granting GSIS an exemption from tax, lien, attachment, levy, execution, and other legal processes should be read together with the grant of power to the GSIS to invest its "excess funds" under Section 36 of the same Act. Under Section 36, the GSIS is granted the ancillary power to invest in business and other ventures for the benefit of the employees, by using its excess funds for investment purposes. In the exercise of such function and power, the GSIS is allowed to assume a character similar to a private corporation. Thus, it may sue and be sued, as also, explicitly granted by its charter. Needless to say, where proper, under Section 36, the GSIS may be held liable for the contracts it has entered into in the course of its business investments. For GSIS cannot claim a special immunity from liability in regard to its business ventures under said Section. Nor can it deny contracting parties, in our view, the right of redress and the enforcement of a claim, particularly as it arises from a purely contractual relationship, of a private character between an individual and the GSIS.112 This ruling has been reiterated in the more recent case of Government Service Insurance System v. Regional Trial Court of Pasig City, Branch 71,113 wherein GSIS, which was also the petitioner in that case, asked to reverse this Courts findings in Rubia and grant GSIS absolute immunity. This Court rejected that plea and held that GSIS should not be allowed to hide behind such immunity especially since its obligation arose from its own wrongful action in a business transaction. In this case, the monetary judgments against GSIS arose from its failure to comply with its private and contractual obligation to GMC. As such, GSIS cannot claim immunity from the enforcement of the final and executory judgment against it. 114

Fourth Issue: Forum Shopping On the issue of forum shopping, this Court already found LLDHC guilty of forum shopping and was adjudged to pay treble costs way back in 2002 in G.R. No. 141407115: There is forum shopping whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) from another. In Gatmaytan v. CA, the petitioner therein repeatedly availed itself of several judicial remedies in different courts, simultaneously or successively. All those remedies were substantially founded on the same transactions and the same essential facts and circumstances; and all raised substantially the same issues either pending in, or already resolved adversely by, some other court. This Court held that therein petitioner was trying to increase his chances of obtaining a favorable decision by filing multiple suits in several courts. Hence, he was found guilty of forum shopping. In the present case, after the Lapulapu RTC had rendered its Decision in favor of private respondent, petitioner filed several petitions before this Court and the CA essentially seeking the annulment thereof. True, petitioner had filed its Complaint in the Manila RTC before private respondent filed its own suit in the Lapulapu RTC. Records, however, show that private respondent learned of the Manila case only when petitioner filed its Motion for Intervention in the Lapulapu RTC. When GMC filed its own Motion to Intervene in the Manila RTC, it was promptly rebuffed by the judge therein. On the other hand, petitioner was able to present its side and to participate fully in the proceedings before the Lapulapu RTC. On July 27, 1994, almost two years after the dismissal of its appeal by the Lapulapu RTC, petitioner filed in the CA a suit for the

annulment of that RTC judgment. On December 29, 1994, this suit was rejected by the CA in a Decision which became final and executory on January 28, 1995, after no appeal was taken by petitioner. However, this action did not stop petitioner. On February 2, 1995, it filed with this Court another Petition deceptively cloaked as certiorari, but which in reality sought the annulment of the Lapulapu Decision. This Court dismissed the Petition on September 6, 1996. Petitioners Motion for Reconsideration was denied with finality on November 18, 1996. On November 28, 1996, Judge Risos of the Lapulapu RTC directed the execution of the judgment in the case filed before it. The Motion to Stay Execution filed by petitioner was denied on February 19, 1997. Undaunted, it filed in this Court another Petition for Certiorari, Prohibition and Mandamus. On September 21, 1998, we referred the Petition to the CA for appropriate action. This new Petition again essentially sought to annul the final and executory Decision rendered by the Lapulapu RTC. Needless to say, the new suit was unsuccessful. Still, this rejection did not stop petitioner. It brought before this Court the present Petition for Review on Certiorari alleging the same facts and circumstances and raising the same issues already decided by this Court in G.R. No. 118633. First Philippine International Bank v. CA stresses that what is truly important to consider in determining whether forum shopping exists is the vexation caused the courts and the parties-litigants by one who asks different courts and/or administrative agencies to rule on the same or related facts and causes and/or to grant the same or substantially the same relief, in the process creating the possibility of conflicting rulings and decisions. Petitioner in the present case sued twice before the CA and thrice before this Court, alleging substantially the same facts and circumstances, raising essentially the same issues, and praying for almost identical reliefs for the annulment of the Decision rendered by the Lapulapu RTC. This insidious practice of repeatedly bringing

essentially the same action -- albeit disguised in various nomenclatures -- before different courts at different times is forum shopping no less. Because of petitioners actions, the execution of the Lapulapu Decision has been needlessly delayed and several courts vexed.116 There is forum shopping when two or more actions or proceedings, other than appeal or certiorari, involving the same parties for the same cause of action, are instituted either simultaneously or successively to obtain a more favorable decision. 117 This Court, in Spouses De la Cruz v. Joaquin,118 explained why forum shopping is disapproved of: Forum shopping trifles with the courts, abuses their processes, degrades the administration of justice, and congests court dockets. Willful and deliberate violation of the rule against it is a ground for the summary dismissal of the case; it may also constitute direct contempt of court.119 It is undeniable that both LLDHC and GSIS are guilty of forum shopping, for having gone through several actions and proceedings from the lowest court to this Court in the hopes that they will obtain a decision favorable to them. In all those actions, only one issue was in contention: the ownership of the subject lots. In the process, the parties degraded the administration of justice, congested our court dockets, and abused our judicial system. Moreover, the simultaneous and successive actions filed below have resulted in conflicting decisions rendered by not only the trial courts but also by different divisions of the Court of Appeals. The very purpose of the rule against forum shopping was to stamp out the abominable practice of trifling with the administration of justice. 120 It is evident from the history of this case that not only were the parties and the courts vexed, but more importantly, justice was delayed. As this Court held in the earlier case of LLDHC against GMC: "[The] insidious practice of repeatedly bringing essentially the

same action albeit disguised in various nomenclatures before different courts at different times is forum shopping no less."121 Conclusion Nonetheless, like we said, substantial justice requires the resolution of this controversy on its merits. It is the duty of this Court to put an end to this long-delayed litigation and render a decision, which will bind all parties with finality. Although it is settled that the Lapu-Lapu RTC Decision was not in any way nullified by the Manila RTC Decision, it is this Courts duty to resolve the legal implications of having two conflicting, final, and executory decisions in existence. In Collantes v. Court of Appeals, 122 this Court, faced with the similar issue of having two conflicting, final and executory decisions before it, offered three options to solve the dilemma: "the first is for the parties to assert their claims anew, the second is to determine which judgment came first, and the third is to determine which of the judgments had been rendered by a court of last resort."123 In Collantes, this Court applied the first option and resolved the conflicting issues anew. However, resorting to the first solution in the case at bar would entail disregarding not only the final and executory decisions of the Lapu-Lapu RTC and the Manila RTC, but also the final and executory decisions of the Court of Appeals and this Court. Moreover, it would negate two decades worth of litigating. Thus, we find it more equitable and practicable to apply the second and third options consequently maintaining the finality of one of the conflicting judgments. The primary criterion under the second option is the time when the decision was rendered and became final and executory, such that earlier decisions should prevail over the current ones since final and executory decisions vest rights in the winning party. In the third solution, the main criterion is the determination of which court or tribunal rendered the decision.

Decisions of this Court should be accorded more respect than those made by the lower courts.124 Applying these criteria to the case at bar, the February 24, 1992 Decision of the Lapu-Lapu RTC in Civil Case No. 2203-L was not only promulgated first; it also attained finality on January 28, 1995, before the Manila RTCs May 10, 1994 Decision in Civil Case No. R-82-3429 became final on May 30, 1997. It is especially noteworthy that months after the Lapu-Lapu RTC issued its writ of execution on December 17, 1996, the Manila RTC issued its own writ of execution on August 1, 1997. To recall, the Manila RTC writ was only satisfied first because the Court of Appeals in CA-G.R. SP No. 44052 deemed it appropriate to issue a temporary restraining order against the execution of the Lapu-Lapu RTC Decision, pending the case before it. Hence, the fact that the Manila RTC Decision was implemented and executed first does not negate the fact that the Lapu-Lapu RTC Decision was not only rendered earlier, but had also attained finality earlier. Furthermore, while both judgments reached the Court of Appeals, only Civil Case No. 2203-L was passed upon on the merits by this Court. In G.R. No. 141407, this Court resolved LLDHCs petition for review on certiorari seeking to annul the Court of Appeals Decision in CA-G.R. SP No. 50650. This Court, in dismissing the petition, upheld the validity of the Lapu-Lapu RTC Decision and declared that the Manila RTC Decision cannot bind GMC. That decision became final and executory way back on March 10, 2003. While this Court cannot blame the parties for exhausting all available remedies to obtain a favorable judgment, the issues involved in this case should have been resolved upon the finality of this Courts decision in G.R. No. 141407. As pronounced by this Court in Villanueva v. Court of Appeals 125: The interest of the judicial system in preventing relitigation of the same dispute recognizes that judicial resources are finite and the number of cases that can be heard by the court is limited. Every

dispute that is reheard means that another will be delayed. In modern times when court dockets are filled to overflowing, this concern is of critical importance. x x x.126 In summary, this Court finds the execution of the Lapu-Lapu RTC Decision in Civil Case No. 2203-L to be in order. We affirm the assailed Orders of March 11, 2004 and May 7, 2004, which reiterate, among others, the October 23, 1997 Order issued by the Lapu-Lapu RTC, directing the Register of Deeds of Lapu-Lapu City to cancel the certificates of title of LLDHC and to issue new ones in GMCs name. Whatever rights are due LLDHC from GSIS as a result of the final judgment of the Manila RTC in Civil Case No. R-82-3429, which we have previously held to be binding between GSIS and LLDHC, may be threshed out in an appropriate proceeding. Such proceeding shall not further delay the execution of the Lapu-Lapu RTC Decision. WHEREFORE, in view of the foregoing, the petition in G.R. No. 167000 is DENIED and the Decision dated November 25, 2004 and Resolution dated January 20, 2005 of the Twentieth Division of the Court of Appeals are AFFIRMED. The petition in G.R. No. 169971 is GRANTED and the Decision dated September 23, 2005 of the Special Nineteenth Division of the Court of Appeals is hereby REVERSED AND SET ASIDE. SO ORDERED. G.R. No. 185918 April 18, 2012

LOCKHEED DETECTIVE AND WATCHMAN AGENCY, INC., Petitioner, vs. UNIVERSITY OF THE PHILIPPINES, Respondent. DECISION

VILLARAMA, JR., J.: Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the August 20, 2008 Amended Decision1 and December 23, 2008 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 91281. The antecedent facts of the case are as follows: Petitioner Lockheed Detective and Watchman Agency, Inc. (Lockheed) entered into a contract for security services with respondent University of the Philippines (UP). In 1998, several security guards assigned to UP filed separate complaints against Lockheed and UP for payment of underpaid wages, 25% overtime pay, premium pay for rest days and special holidays, holiday pay, service incentive leave pay, night shift differentials, 13th month pay, refund of cash bond, refund of deductions for the Mutual Benefits Aids System (MBAS), unpaid wages from December 16-31, 1998, and attorneys fees. On February 16, 2000, the Labor Arbiter rendered a decision as follows: WHEREFORE, premises considered, respondents Lockheed Detective and Watchman Agency, Inc. and UP as job contractor and principal, respectively, are hereby declared to be solidarily liable to complainants for the following claims of the latter which are found meritorious. Underpaid wages/salaries, premium pay for work on rest day and special holiday, holiday pay, 5 days service incentive leave pay, 13th month pay for 1998, refund of cash bond (deducted at P50.00 per month from January to May 1996, P100.00 per month from June 1996 and P200.00 from November 1997), refund of deduction for Mutual Benefits Aids System at the rate of P50.00 a month, and

attorneys fees; in the total amount of P1,184,763.12 broken down as follows per attached computation of the Computation and [E]xamination Unit of this Commission, which computation forms part of this Decision: 1. JOSE SABALAS 2. TIRSO DOMASIAN 3. JUAN TAPEL 4. DINDO MURING 5. ALEXANDER ALLORDE 6. WILFREDO ESCOBAR P77,983.62 76,262.70 80,546.03 80,546.03 80,471.78 80,160.63

7. FERDINAND VELASQUEZ 78,595.53 8. ANTHONY GONZALES 9. SAMUEL ESCARIO 10. PEDRO FAILORINA 11. MATEO TANELA 12. JOB SABALAS 13. ANDRES DACANAYAN 14. EDDIE OLIVAR 76,869.97 80,509.78 80,350.87 70,590.58 59,362.40 77,403.73 77,403.73 P1,077,057.38 plus 10% attorneys fees 107,705.74

GRAND TOTAL AWARD

P1,184,763.12

The Financial Analyst is hereby ordered to recompute the awards of the complainants in accordance with the foregoing modifications. SO ORDERED.5 The complaining security guards and UP filed their respective motions for reconsideration. On August 14, 2002, however, the NLRC denied said motions. As the parties did not appeal the NLRC decision, the same became final and executory on October 26, 2002. 6 A writ of execution was then issued but later quashed by the Labor Arbiter on November 23, 2003 on motion of UP due to disputes regarding the amount of the award. Later, however, said order quashing the writ was reversed by the NLRC by Resolution7 dated June 8, 2004, disposing as follows: WHEREFORE, premises considered, we grant this instant appeal. The Order dated 23 November 2003 is hereby reversed and set aside. The Labor Arbiter is directed to issue a Writ of Execution for the satisfaction of the judgment award in favor of Third-Party complainants. SO ORDERED.8 UP moved to reconsider the NLRC resolution. On December 28, 2004, the NLRC upheld its resolution but with modification that the satisfaction of the judgment award in favor of Lockheed will be only against the funds of UP which are not identified as public funds. The NLRC order and resolution having become final, Lockheed filed a motion for the issuance of an alias writ of execution. The same was granted on May 23, 2005.9 On July 25, 2005, a Notice of Garnishment 10 was issued to Philippine National Bank (PNB) UP Diliman Branch for the

Third party respondent University of the Philippines is hereby declared to be liable to Third Party Complainant and cross claimant Lockheed Detective and Watchman Agency for the unpaid legislated salary increases of the latters security guards for the years 1996 to 1998, in the total amount of P13,066,794.14, out of which amount the amounts due complainants here shall be paid. The other claims are hereby DISMISSED for lack of merit (night shift differential and 13th month pay) or for having been paid in the course of this proceedings (salaries for December 15-31, 1997 in the amount of P40,140.44). The claims of Erlindo Collado, Rogelio Banjao and Amor Banjao are hereby DISMISSED as amicably settled for and in consideration of the amounts of P12,315.72, P12,271.77 and P12,819.33, respectively. SO ORDERED.3 Both Lockheed and UP appealed the Labor Arbiters decision. By Decision4 dated April 12, 2002, the NLRC modified the Labor Arbiters decis ion. The NLRC held: WHEREFORE, the decision appealed from is hereby modified as follows: 1. Complainants claims for premium pay for work on rest day and special holiday, and 5 days service incentive leave pay, are hereby dismissed for lack of basis. 2. The respondent University of the Philippines is still solidarily liable with Lockheed in the payment of the rest of the claims covering the period of their service contract.

satisfaction of the award of P12,142,522.69 (inclusive of execution fee). In a letter11 dated August 9, 2005, PNB informed UP that it has received an order of release dated August 8, 2005 issued by the Labor Arbiter directing PNB UP Diliman Branch to release to the NLRC Cashier, through the assigned NLRC Sheriff Max L. Lago, the judgment award/amount of P12,142,522.69. PNB likewise reminded UP that the bank only has 10 working days from receipt of the order to deliver the garnished funds and unless it receives a notice from UP or the NLRC before the expiry of the 10-day period regarding the issuance of a court order or writ of injunction discharging or enjoining the implementation and execution of the Notice of Garnishment and Writ of Execution, the bank shall be constrained to cause the release of the garnished funds in favor of the NLRC. On August 16, 2005, UP filed an Urgent Motion to Quash Garnishment.12 UP contended that the funds being subjected to garnishment at PNB are government/public funds. As certified by the University Accountant, the subject funds are covered by Savings Account No. 275-529999-8, under the name of UP System Trust Receipts, earmarked for Student Guaranty Deposit, Scholarship Fund, Student Fund, Publications, Research Grants, and Miscellaneous Trust Account. UP argued that as public funds, the subject PNB account cannot be disbursed except pursuant to an appropriation required by law. The Labor Arbiter, however, dismissed the urgent motion for lack of merit on August 30, 2005. 13 On September 2, 2005, the amount of P12,062,398.71 was withdrawn by the sheriff from UPs PNB account. 14 On September 12, 2005, UP filed a petition for certiorari before the CA based on the following grounds: I.

The concept of "solidary liability" by an indirect employer notwithstanding, respondent NLRC gravely abused its discretion in a manner amounting to lack or excess of jurisdiction by misusing such concept to justify the garnishment by the executing Sheriff of public/government funds belonging to UP. II. Respondents NLRC and Arbiter LORA acted without jurisdiction or gravely abused their discretion in a manner amounting to lack or excess of jurisdiction when, by means of an Alias Writ of Execution against petitioner UP, they authorized respondent Sheriff to garnish UPs public funds. Similarly, respondent LORA gravely abused her discretion when she resolved petitioners Motion to Quash Notice of Garnishment addressed to, and intended for, the NLRC, and when she unilaterally and arbitrarily disregarded an official Certification that the funds garnished are public/government funds, and thereby allowed respondent Sheriff to withdraw the same from PNB. III. Respondents gravely abused their discretion in a manner amounting to lack or excess of jurisdiction when they, despite prior knowledge, effected the execution that caused paralyzation and dislocation to petitioners governmental functions.15 On March 12, 2008, the CA rendered a decision16 dismissing UPs petition for certiorari. Citing Republic v. COCOFED, 17 which defines public funds as moneys belonging to the State or to any political subdivisions of the State, more specifically taxes, customs, duties and moneys raised by operation of law for the support of the government or the discharge of its obligations, the appellate court

ruled that the funds sought to be garnished do not seem to fall within the stated definition. On reconsideration, however, the CA issued the assailed Amended Decision. It held that without departing from its findings that the funds covered in the savings account sought to be garnished do not fall within the classification of public funds, it reconsiders the dismissal of the petition in light of the ruling in the case of National Electrification Administration v. Morales18 which mandates that all money claims against the government must first be filed with the Commission on Audit (COA). Lockheed moved to reconsider the amended decision but the same was denied in the assailed CA Resolution dated December 23, 2008. The CA cited Manila International Airport Authority v. Court of Appeals19 which held that UP ranks with MIAA, a government instrumentality exercising corporate powers but not organized as a stock or non-stock corporation. While said corporations are government instrumentalities, they are loosely called government corporate entities but not government-owned and controlled corporations in the strict sense. Hence this petition by Lockheed raising the following arguments: 1. RESPONDENT UP IS A GOVERNMENT ENTITY WITH A SEPARATE AND DISTINCT PERSONALITY FROM THE NATIONAL GOVERNMENT AND HAS ITS OWN CHARTER GRANTING IT THE RIGHT TO SUE AND BE SUED. IT THEREFORE CANNOT AVAIL OF THE IMMUNITY FROM SUIT OF THE GOVERNMENT. NOT HAVING IMMUNITY FROM SUIT, RESPONDENT UP CAN BE HELD LIABLE AND EXECUTION CAN THUS ENSUE. 2. MOREOVER, IF THE COURT LENDS IT ASSENT TO THE INVOCATION OF THE DOCTRINE OF STATE

IMMUNITY, THIS WILL RESULT [IN] GRAVE INJUSTICE. 3. FURTHERMORE, THE PROTESTATIONS OF THE RESPONDENT ARE TOO LATE IN THE DAY, AS THE EXECUTION PROCEEDINGS HAVE ALREADY BEEN TERMINATED.20 Lockheed contends that UP has its own separate and distinct juridical entity from the national government and has its own charter. Thus, it can be sued and be held liable. Moreover, Executive Order No. 714 entitled "Fiscal Control and Management of the Funds of UP" recognizes that "as an institution of higher learning, UP has always granted full management and control of its affairs including its financial affairs."21 Therefore, it cannot shield itself from its private contractual liabilities by simply invoking the public character of its funds. Lockheed also cites several cases wherein it was ruled that funds of public corporations which can sue and be sued were not exempt from garnishment. Lockheed likewise argues that the rulings in the NEA and MIAA cases are inapplicable. It contends that UP is not similarly situated with NEA because the jurisdiction of COA over the accounts of UP is only on a post-audit basis. As to the MIAA case, the liability of MIAA pertains to the real estate taxes imposed by the City of Paranaque while the obligation of UP in this case involves a private contractual obligation. Lockheed also argues that the declaration in MIAA specifically citing UP was mere obiter dictum. Lockheed moreover submits that UP cannot invoke state immunity to justify and perpetrate an injustice. UP itself admitted its liability and thus it should not be allowed to renege on its contractual obligations. Lockheed contends that this might create a ruinous precedent that would likely affect the relationship between the public and private sectors.

Lastly, Lockheed contends that UP cannot anymore seek the quashal of the writ of execution and notice of garnishment as they are already fait accompli. For its part, UP contends that it did not invoke the doctrine of state immunity from suit in the proceedings a quo and in fact, it did not object to being sued before the labor department. It maintains, however, that suability does not necessarily mean liability. UP argues that the CA correctly applied the NEA ruling when it held that all money claims must be filed with the COA. As to alleged injustice that may result for invocation of state immunity from suit, UP reiterates that it consented to be sued and even participated in the proceedings below. Lockheed cannot now claim that invocation of state immunity, which UP did not invoke in the first place, can result in injustice. On the fait accompli argument, UP argues that Lockheed cannot wash its hands from liability for the consummated garnishment and execution of UPs trust fund in the amount of P12,062,398.71. UP cites that damage was done to UP and the beneficiaries of the fund when said funds, which were earmarked for specific educational purposes, were misapplied, for instance, to answer for the execution fee of P120,123.98 unilaterally stipulated by the sheriff. Lockheed, being the party which procured the illegal garnishment, should be held primarily liable. The mere fact that the CA set aside the writ of garnishment confirms the liability of Lockheed to reimburse and indemnify in accordance with law. The petition has no merit. We agree with UP that there was no point for Lockheed in discussing the doctrine of state immunity from suit as this was never an issue in this case. Clearly, UP consented to be sued when it participated in the proceedings below. What UP questions is the hasty garnishment of its funds in its PNB account.

This Court finds that the CA correctly applied the NEA case. Like NEA, UP is a juridical personality separate and distinct from the government and has the capacity to sue and be sued. Thus, also like NEA, it cannot evade execution, and its funds may be subject to garnishment or levy. However, before execution may be had, a claim for payment of the judgment award must first be filed with the COA. Under Commonwealth Act No. 327,22 as amended by Section 26 of P.D. No. 1445,23 it is the COA which has primary jurisdiction to examine, audit and settle "all debts and claims of any sort" due from or owing the Government or any of its subdivisions, agencies and instrumentalities, including government-owned or controlled corporations and their subsidiaries. With respect to money claims arising from the implementation of Republic Act No. 6758,24 their allowance or disallowance is for COA to decide, subject only to the remedy of appeal by petition for certiorari to this Court.251wphi1 We cannot subscribe to Lockheeds argument that NEA is not similarly situated with UP because the COAs jurisdiction over the latter is only on post-audit basis. A reading of the pertinent Commonwealth Act provision clearly shows that it does not make any distinction as to which of the government subdivisions, agencies and instrumentalities, including government-owned or controlled corporations and their subsidiaries whose debts should be filed before the COA. As to the fait accompli argument of Lockheed, contrary to its claim that there is nothing that can be done since the funds of UP had already been garnished, since the garnishment was erroneously carried out and did not go through the proper procedure (the filing of a claim with the COA), UP is entitled to reimbursement of the garnished funds plus interest of 6% per annum, to be computed from the time of judicial demand to be reckoned from the time UP filed a petition for certiorari before the CA which occurred right after the withdrawal of the garnished funds from PNB.

WHEREFORE, the petition for review on certiorari is DENIED for lack of merit. Petitioner Lockheed Detective and Watchman Agency, Inc. is ordered to REIMBURSE respondent University of the Philippines the amount of P12,062,398.71 plus interest of 6% per annum, to be computed from September 12, 2005 up to the finality of this Decision, and 12% interest on the entire amount from date of finality of this Decision until fully paid. No pronouncement as to costs. SO ORDERED

The Case On appeal by the University of the Philippines and its then incumbent officials (collectively, the UP) is the decision promulgated on September 16, 2005,2 whereby the Court of Appeals (CA) upheld the order of the Regional Trial Court (RTC), Branch 80, in Quezon City that directed the garnishment of public funds amounting to P16,370,191.74 belonging to the UP to satisfy the writ of execution issued to enforce the already final and executory judgment against the UP. Antecedents

G.R. No. 171182

August 23, 2012 On August 30, 1990, the UP, through its then President Jose V. Abueva, entered into a General Construction Agreement with respondent Stern Builders Corporation (Stern Builders), represented by its President and General Manager Servillano dela Cruz, for the construction of the extension building and the renovation of the College of Arts and Sciences Building in the campus of the University of the Philippines in Los Baos (UPLB). 3 In the course of the implementation of the contract, Stern Builders submitted three progress billings corresponding to the work accomplished, but the UP paid only two of the billings. The third billing worth P273,729.47 was not paid due to its disallowance by the Commission on Audit (COA). Despite the lifting of the disallowance, the UP failed to pay the billing, prompting Stern Builders and dela Cruz to sue the UP and its co-respondent officials to collect the unpaid billing and to recover various damages. The suit, entitled Stern Builders Corporation and Servillano R. Dela Cruz v. University of the Philippines Systems, Jose V. Abueva, Raul P. de Guzman, Ruben P. Aspiras, Emmanuel P. Bello, Wilfredo P. David, Casiano S. Abrigo, and Josefina R. Licuanan, was docketed as Civil Case No. Q-93-14971 of the Regional Trial Court in Quezon City (RTC).4

UNIVERSITY OF THE PHILIPPINES, JOSE V. ABUEVA, RAUL P. DE GUZMAN, RUBEN P. ASPIRAS, EMMANUEL P. BELLO, WILFREDO P. DAVID, CASIANO S. ABRIGO, and JOSEFINA R. LICUANAN, Petitioners, vs. HON. AGUSTIN S. DIZON, his capacity as Presiding Judge of the Regional Trial Court of Quezon City, Branch 80, STERN BUILDERS, INC., and SERVILLANO DELA CRUZ, Respondents. DECISION BERSAMIN, J.: Trial judges should not immediately issue writs of execution or garnishment against the Government or any of its subdivisions, agencies and instrumentalities to enforce money judgments. 1 They should bear in mind that the primary jurisdiction to examine, audit and settle all claims of any sort due from the Government or any of its subdivisions, agencies and instrumentalities pertains to the Commission on Audit (COA) pursuant to Presidential Decree No. 1445 (Government Auditing Code of the Philippines).

After trial, on November 28, 2001, the RTC rendered its decision in favor of the plaintiffs,5 viz: Wherefore, in the light of the foregoing, judgment is hereby rendered in favor of the plaintiff and against the defendants ordering the latter to pay plaintiff, jointly and severally, the following, to wit: 1. P503,462.74 amount of the third billing, additional accomplished work and retention money 2. P5,716,729.00 in actual damages 3. P10,000,000.00 in moral damages 4. P150,000.00 and P1,500.00 per appearance as attorneys fees; and 5. Costs of suit. SO ORDERED. Following the RTCs denial of its motion for reconsideration on May 7, 2002,6 the UP filed a notice of appeal on June 3, 2002. 7 Stern Builders and dela Cruz opposed the notice of appeal on the ground of its filing being belated, and moved for the execution of the decision. The UP countered that the notice of appeal was filed within the reglementary period because the UPs Office of Legal Affairs (OLS) in Diliman, Quezon City received the order of denial only on May 31, 2002. On September 26, 2002, the RTC denied due course to the notice of appeal for having been filed out of time and granted the private respondents motion for execution.8 The RTC issued the writ of execution on October 4, 2002, 9 and the sheriff of the RTC served the writ of execution and notice of demand upon the UP, through its counsel, on October 9, 2002.10 The UP filed an urgent motion to reconsider the order dated September 26, 2002,

to quash the writ of execution dated October 4, 2002, and to restrain the proceedings.11 However, the RTC denied the urgent motion on April 1, 2003.12 On June 24, 2003, the UP assailed the denial of due course to its appeal through a petition for certiorari in the Court of Appeals (CA), docketed as CA-G.R. No. 77395.13 On February 24, 2004, the CA dismissed the petition for certiorari upon finding that the UPs notice of appeal had been filed late, 14 stating: Records clearly show that petitioners received a copy of the Decision dated November 28, 2001 and January 7, 2002, thus, they had until January 22, 2002 within which to file their appeal. On January 16, 2002 or after the lapse of nine (9) days, petitioners through their counsel Atty. Nolasco filed a Motion for Reconsideration of the aforesaid decision, hence, pursuant to the rules, petitioners still had six (6) remaining days to file their appeal. As admitted by the petitioners in their petition (Rollo, p. 25), Atty. Nolasco received a copy of the Order denying their motion for reconsideration on May 17, 2002, thus, petitioners still has until May 23, 2002 (the remaining six (6) days) within which to file their appeal. Obviously, petitioners were not able to file their Notice of Appeal on May 23, 2002 as it was only filed on June 3, 2002. In view of the said circumstances, We are of the belief and so holds that the Notice of Appeal filed by the petitioners was really filed out of time, the same having been filed seventeen (17) days late of the reglementary period. By reason of which, the decision dated November 28, 2001 had already become final and executory. "Settled is the rule that the perfection of an appeal in the manner and within the period permitted by law is not only mandatory but jurisdictional, and failure to perfect that appeal renders the challenged judgment final and executory. This is not an empty procedural rule but is grounded on fundamental considerations of

public policy and sound practice." (Rams Studio and Photographic Equipment, Inc. vs. Court of Appeals, 346 SCRA 691, 696). Indeed, Atty. Nolasco received the order of denial of the Motion for Reconsideration on May 17, 2002 but filed a Notice of Appeal only on June 3, 3003. As such, the decision of the lower court ipso facto became final when no appeal was perfected after the lapse of the reglementary period. This procedural caveat cannot be trifled with, not even by the High Court.15 The UP sought a reconsideration, but the CA denied the UPs motion for reconsideration on April 19, 2004.16 On May 11, 2004, the UP appealed to the Court by petition for review on certiorari (G.R. No. 163501). On June 23, 2004, the Court denied the petition for review. 17 The UP moved for the reconsideration of the denial of its petition for review on August 29, 2004,18 but the Court denied the motion on October 6, 2004.19 The denial became final and executory on November 12, 2004.20 In the meanwhile that the UP was exhausting the available remedies to overturn the denial of due course to the appeal and the issuance of the writ of execution, Stern Builders and dela Cruz filed in the RTC their motions for execution despite their previous motion having already been granted and despite the writ of execution having already issued. On June 11, 2003, the RTC granted another motion for execution filed on May 9, 2003 (although the RTC had already issued the writ of execution on October 4, 2002). 21 On June 23, 2003 and July 25, 2003, respectively, the sheriff served notices of garnishment on the UPs depository banks, namely: Land Bank of the Philippines (Buendia Branch) and the Development Bank of the Philippines (DBP), Commonwealth Branch. 22 The UP assailed the garnishment through an urgent motion to quash the

notices of garnishment; 23 and a motion to quash the writ of execution dated May 9, 2003.24 On their part, Stern Builders and dela Cruz filed their ex parte motion for issuance of a release order. 25 On October 14, 2003, the RTC denied the UPs urgent motion to quash, and granted Stern Builders and dela Cruzs ex parte motion for issuance of a release order.26 The UP moved for the reconsideration of the order of October 14, 2003, but the RTC denied the motion on November 7, 2003. 27 On January 12, 2004, Stern Builders and dela Cruz again sought the release of the garnished funds.28 Despite the UPs opposition,29 the RTC granted the motion to release the garnished funds on March 16, 2004.30 On April 20, 2004, however, the RTC held in abeyance the enforcement of the writs of execution issued on October 4, 2002 and June 3, 2003 and all the ensuing notices of garnishment, citing Section 4, Rule 52, Rules of Court, which provided that the pendency of a timely motion for reconsideration stayed the execution of the judgment.31 On December 21, 2004, the RTC, through respondent Judge Agustin S. Dizon, authorized the release of the garnished funds of the UP, 32 to wit: WHEREFORE, premises considered, there being no more legal impediment for the release of the garnished amount in satisfaction of the judgment award in the instant case, let the amount garnished be immediately released by the Development Bank of the Philippines, Commonwealth Branch, Quezon City in favor of the plaintiff. SO ORDERED.

The UP was served on January 3, 2005 with the order of December 21, 2004 directing DBP to release the garnished funds. 33 On January 6, 2005, Stern Builders and dela Cruz moved to cite DBP in direct contempt of court for its non-compliance with the order of release.34 Thereupon, on January 10, 2005, the UP brought a petition for certiorari in the CA to challenge the jurisdiction of the RTC in issuing the order of December 21, 2004 (CA-G.R. CV No. 88125).35 Aside from raising the denial of due process, the UP averred that the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction in ruling that there was no longer any legal impediment to the release of the garnished funds. The UP argued that government funds and properties could not be seized by virtue of writs of execution or garnishment, as held in Department of Agriculture v. National Labor Relations Commission,36 and citing Section 84 of Presidential Decree No. 1445 to the effect that "revenue funds shall not be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority;" and that the order of garnishment clashed with the ruling in University of the Philippines Board of Regents v. Ligot-Telan37 to the effect that the funds belonging to the UP were public funds. On January 19, 2005, the CA issued a temporary restraining order (TRO) upon application by the UP.38 On March 22, 2005, Stern Builders and dela Cruz filed in the RTC their amended motion for sheriffs assistance to implement the release order dated December 21, 2004, stating that the 60-day period of the TRO of the CA had already lapsed. 39 The UP opposed the amended motion and countered that the implementation of the release order be suspended.40

On May 3, 2005, the RTC granted the amended motion for sheriffs assistance and directed the sheriff to proceed to the DBP to receive the check in satisfaction of the judgment. 41 The UP sought the reconsideration of the order of May 3, 2005.42 On May 16, 2005, DBP filed a motion to consign the check representing the judgment award and to dismiss the motion to cite its officials in contempt of court.43 On May 23, 2005, the UP presented a motion to withhold the release of the payment of the judgment award.44 On July 8, 2005, the RTC resolved all the pending matters, 45 noting that the DBP had already delivered to the sheriff Managers Check No. 811941 for P16,370,191.74 representing the garnished funds payable to the order of Stern Builders and dela Cruz as its compliance with the RTCs order dated December 21, 2004. 46 However, the RTC directed in the same order that Stern Builders and dela Cruz should not encash the check or withdraw its amount pending the final resolution of the UPs petition for certiorari, to wit:47 To enable the money represented in the check in question (No. 00008119411) to earn interest during the pendency of the defendant University of the Philippines application for a writ of injunction with the Court of Appeals the same may now be deposited by the plaintiff at the garnishee Bank (Development Bank of the Philippines), the disposition of the amount represented therein being subject to the final outcome of the case of the University of the Philippines et al., vs. Hon. Agustin S. Dizon et al., (CA G.R. 88125) before the Court of Appeals. Let it be stated herein that the plaintiff is not authorized to encash and withdraw the amount represented in the check in question and

enjoy the same in the fashion of an owner during the pendency of the case between the parties before the Court of Appeals which may or may not be resolved in plaintiffs favor. With the end in view of seeing to it that the check in question is deposited by the plaintiff at the Development Bank of the Philippines (garnishee bank), Branch Sheriff Herlan Velasco is directed to accompany and/or escort the plaintiff in making the deposit of the check in question. SO ORDERED. On September 16, 2005, the CA promulgated its assailed decision dismissing the UPs petition for certiorari, ruling that the UP had been given ample opportunity to contest the motion to direct the DBP to deposit the check in the name of Stern Builders and dela Cruz; and that the garnished funds could be the proper subject of garnishment because they had been already earmarked for the project, with the UP holding the funds only in a fiduciary capacity, 48 viz: Petitioners next argue that the UP funds may not be seized for execution or garnishment to satisfy the judgment award. Citing Department of Agriculture vs. NLRC, University of the Philippines Board of Regents vs. Hon. Ligot-Telan, petitioners contend that UP deposits at Land Bank and the Development Bank of the Philippines, being government funds, may not be released absent an appropriations bill from Congress. The argument is specious. UP entered into a contract with private respondents for the expansion and renovation of the Arts and Sciences Building of its campus in Los Baos, Laguna. Decidedly, there was already an appropriations earmarked for the said project. The said funds are retained by UP, in a fiduciary capacity, pending completion of the construction project.

We agree with the trial Court [sic] observation on this score: "4. Executive Order No. 109 (Directing all National Government Agencies to Revert Certain Accounts Payable to the Cumulative Result of Operations of the National Government and for Other Purposes) Section 9. Reversion of Accounts Payable, provides that, all 1995 and prior years documented accounts payable and all undocumented accounts regardless of the year they were incurred shall be reverted to the Cumulative Result of Operations of the National Government (CROU). This shall apply to accounts payable of all funds, except fiduciary funds, as long as the purpose for which the funds were created have not been accomplished and accounts payable under foreign assisted projects for the duration of the said project. In this regard, the Department of Budget and Management issued Joint-Circular No. 99-6 4.0 (4.3) Procedural Guidelines which provides that all accounts payable that reverted to the CROU may be considered for payment upon determination thru administrative process, of the existence, validity and legality of the claim. Thus, the allegation of the defendants that considering no appropriation for the payment of any amount awarded to plaintiffs appellee the funds of defendant-appellants may not be seized pursuant to a writ of execution issued by the regular court is misplaced. Surely when the defendants and the plaintiff entered into the General Construction of Agreement there is an amount already allocated by the latter for the said project which is no longer subject of future appropriation."49 After the CA denied their motion for reconsideration on December 23, 2005, the petitioners appealed by petition for review. Matters Arising During the Pendency of the Petition On January 30, 2006, Judge Dizon of the RTC (Branch 80) denied Stern Builders and dela Cruzs motion to withdraw the deposit, in consideration of the UPs intention to appeal to the CA, 50 stating:

Since it appears that the defendants are intending to file a petition for review of the Court of Appeals resolution in CA-G.R. No. 88125 within the reglementary period of fifteen (15) days from receipt of resolution, the Court agrees with the defendants stand that the granting of plaintiffs subject motion is premature. Let it be stated that what the Court meant by its Order dated July 8, 2005 which states in part that the "disposition of the amount represented therein being subject to the final outcome of the case of the University of the Philippines, et. al., vs. Hon. Agustin S. Dizon et al., (CA G.R. No. 88125 before the Court of Appeals) is that the judgment or resolution of said court has to be final and executory, for if the same will still be elevated to the Supreme Court, it will not attain finality yet until the highest court has rendered its own final judgment or resolution. 51 However, on January 22, 2007, the UP filed an Urgent Application for A Temporary Restraining Order and/or A Writ of Preliminary Injunction,52 averring that on January 3, 2007, Judge Maria Theresa dela Torre-Yadao (who had meanwhile replaced Judge Dizon upon the latters appointment to the CA) had issued another order allowing Stern Builders and dela Cruz to withdraw the deposit, 53 to wit: It bears stressing that defendants liability for the payment of the judgment obligation has become indubitable due to the final and executory nature of the Decision dated November 28, 2001. Insofar as the payment of the [sic] judgment obligation is concerned, the Court believes that there is nothing more the defendant can do to escape liability. It is observed that there is nothing more the defendant can do to escape liability. It is observed that defendant U.P. System had already exhausted all its legal remedies to overturn, set aside or modify the decision (dated November 28, 2001( rendered against it. The way the Court sees it, defendant U.P. Systems petition before the Supreme Court concerns only with the manner by which said judgment award should be satisfied. It has nothing to do

with the legality or propriety thereof, although it prays for the deletion of [sic] reduction of the award of moral damages. It must be emphasized that this Courts finding, i.e., that there was sufficient appropriation earmarked for the project, was upheld by the Court of Appeals in its decision dated September 16, 2005. Being a finding of fact, the Supreme Court will, ordinarily, not disturb the same was said Court is not a trier of fact. Such being the case, defendants arguments that there was no sufficient appropriation for the payment of the judgment obligation must fail. While it is true that the former Presiding Judge of this Court in its Order dated January 30, 2006 had stated that: Let it be stated that what the Court meant by its Order dated July 8, 2005 which states in part that the "disposition of the amount represented therein being subject to the final outcome of the case of the University of the Philippines, et. al., vs. Hon. Agustin S. Dizon et al., (CA G.R. No. 88125 before the Court of Appeals) is that the judgment or resolution of said court has to be final and executory, for if the same will still be elevated to the Supreme Court, it will not attain finality yet until the highest court has rendered its own final judgment or resolution. it should be noted that neither the Court of Appeals nor the Supreme Court issued a preliminary injunction enjoining the release or withdrawal of the garnished amount. In fact, in its present petition for review before the Supreme Court, U.P. System has not prayed for the issuance of a writ of preliminary injunction. Thus, the Court doubts whether such writ is forthcoming. The Court honestly believes that if defendants petition assailing the Order of this Court dated December 31, 2004 granting the motion for the release of the garnished amount was meritorious, the Court of Appeals would have issued a writ of injunction enjoining the same. Instead, said appellate court not only refused to issue a wit of

preliminary injunction prayed for by U.P. System but denied the petition, as well.54 The UP contended that Judge Yadao thereby effectively reversed the January 30, 2006 order of Judge Dizon disallowing the withdrawal of the garnished amount until after the decision in the case would have become final and executory. Although the Court issued a TRO on January 24, 2007 to enjoin Judge Yadao and all persons acting pursuant to her authority from enforcing her order of January 3, 2007,55 it appears that on January 16, 2007, or prior to the issuance of the TRO, she had already directed the DBP to forthwith release the garnished amount to Stern Builders and dela Cruz; 56 and that DBP had forthwith complied with the order on January 17, 2007 upon the sheriffs service of the order of Judge Yadao.57 These intervening developments impelled the UP to file in this Court a supplemental petition on January 26, 2007, 58 alleging that the RTC (Judge Yadao) gravely erred in ordering the immediate release of the garnished amount despite the pendency of the petition for review in this Court. The UP filed a second supplemental petition59 after the RTC (Judge Yadao) denied the UPs motion for the redeposit of the withdrawn amount on April 10, 2007,60 to wit: This resolves defendant U.P. Systems Urgent Motion to Redeposit Judgment Award praying that plaintiffs be directed to redeposit the judgment award to DBP pursuant to the Temporary Restraining Order issued by the Supreme Court. Plaintiffs opposed the motion and countered that the Temporary Restraining Order issued by the Supreme Court has become moot and academic considering that the act sought to be restrained by it has already been performed. They also alleged that the redeposit of the judgment award was no longer feasible as they have already spent the same.

It bears stressing, if only to set the record straight, that this Court did not in its Order dated January 3, 2007 (the implementation of which was restrained by the Supreme Court in its Resolution dated January 24, 2002) direct that that garnished amount "be deposited with the garnishee bank (Development Bank of the Philippines)". In the first place, there was no need to order DBP to make such deposit, as the garnished amount was already deposited in the account of plaintiffs with the DBP as early as May 13, 2005. What the Court granted in its Order dated January 3, 2007 was plaintiffs motion to allow the release of said deposit. It must be recalled that the Court found plaintiffs motion meritorious and, at that time, there was no restraining order or preliminary injunction from either the Court of Appeals or the Supreme Court which could have enjoined the release of plaintiffs deposit. The Court also took into account the following factors: a) the Decision in this case had long been final and executory after it was rendered on November 28, 2001; b) the propriety of the dismissal of U.P. Systems appeal was upheld by the Supreme Court; c) a writ of execution had been issued; d) defendant U.P. Systems deposit with DBP was garnished pursuant to a lawful writ of execution issued by the Court; and e) the garnished amount had already been turned over to the plaintiffs and deposited in their account with DBP. The garnished amount, as discussed in the Order dated January 16, 2007, was already owned by the plaintiffs, having been delivered to them by the Deputy Sheriff of this Court pursuant to par. (c), Section 9, Rule 39 of the 1997 Rules of Civil Procedure. Moreover, the

judgment obligation has already been fully satisfied as per Report of the Deputy Sheriff. The UP now submits that: Anent the Temporary Restraining Order issued by the Supreme Court, the same has become functus oficio, having been issued after the garnished amount had been released to the plaintiffs. The judgment debt was released to the plaintiffs on January 17, 2007, while the Temporary Restraining Order issued by the Supreme Court was received by this Court on February 2, 2007. At the time of the issuance of the Restraining Order, the act sought to be restrained had already been done, thereby rendering the said Order ineffectual. After a careful and thorough study of the arguments advanced by the parties, the Court is of the considered opinion that there is no legal basis to grant defendant U.P. Systems motion to redeposit the judgment amount. Granting said motion is not only contrary to law, but it will also render this Courts final executory judgment nugatory. Litigation must end and terminate sometime and somewhere, and it is essential to an effective administration of justice that once a judgment has become final the issue or cause involved therein should be laid to rest. This doctrine of finality of judgment is grounded on fundamental considerations of public policy and sound practice. In fact, nothing is more settled in law than that once a judgment attains finality it thereby becomes immutable and unalterable. It may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land. WHEREFORE, premises considered, finding defendant U.P. Systems Urgent Motion to Redeposit Judgment Award devoid of merit, the same is hereby DENIED. SO ORDERED.

Issues

I THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DISMISSING THE PETITION, ALLOWING IN EFFECT THE GARNISHMENT OF UP FUNDS, WHEN IT RULED THAT FUNDS HAVE ALREADY BEEN EARMARKED FOR THE CONSTRUCTION PROJECT; AND THUS, THERE IS NO NEED FOR FURTHER APPROPRIATIONS. II THE COURT OF APPEALS COMMITTED GRAVE ERROR IN ALLOWING GARNISHMENT OF A STATE UNIVERSITYS FUNDS IN VIOLATION OF ARTICLE XIV, SECTION 5(5) OF THE CONSTITUTION. III IN THE ALTERNATIVE, THE UNIVERSITY INVOKES EQUITY AND THE REVIEW POWERS OF THIS HONORABLE COURT TO MODIFY, IF NOT TOTALLY DELETE THE AWARD OF P10 MILLION AS MORAL DAMAGES TO RESPONDENTS. IV THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN ORDERING THE IMMEDIATE RELEASE OF THE JUDGMENT AWARD IN ITS ORDER DATED 3 JANUARY 2007 ON THE GROUND OF EQUITY AND JUDICIAL COURTESY. V

THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN ORDERING THE IMMEDIATE RELEASE OF THE JUDGMENT AWARD IN ITS ORDER DATED 16 JANUARY 2007 ON THE GROUND THAT PETITIONER UNIVERSITY STILL HAS A PENDING MOTION FOR RECONSIDERATION OF THE ORDER DATED 3 JANUARY 2007. VI THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN NOT ORDERING THE REDEPOSIT OF THE GARNISHED AMOUNT TO THE DBP IN VIOLATION OF THE CLEAR LANGUAGE OF THE SUPREME COURT RESOLUTION DATED 24 JANUARY 2007. The UP argues that the amount earmarked for the construction project had been purposely set aside only for the aborted project and did not include incidental matters like the awards of actual damages, moral damages and attorneys fees. In support of its argument, the UP cited Article 12.2 of the General Construction Agreement, which stipulated that no deductions would be allowed for the payment of claims, damages, losses and expenses, including attorneys fees, in case of any litigation arising out of the performance of the work. The UP insists that the CA decision was inconsistent with the rulings in Commissioner of Public Highways v. San Diego61 and Department of Agriculture v. NLRC62 to the effect that government funds and properties could not be seized under writs of execution or garnishment to satisfy judgment awards. Furthermore, the UP contends that the CA contravened Section 5, Article XIV of the Constitution by allowing the garnishment of UP funds, because the garnishment resulted in a substantial reduction of the UPs limited budget allocated for the remuneration, job satisfaction and fulfillment of the best available teachers; that Judge Yadao should have exhibited judicial courtesy towards the Court due to the pendency of the UPs petition for review; and that she should

have also desisted from declaring that the TRO issued by this Court had become functus officio. Lastly, the UP states that the awards of actual damages of P5,716,729.00 and moral damages of P10 million should be reduced, if not entirely deleted, due to its being unconscionable, inequitable and detrimental to public service. In contrast, Stern Builders and dela Cruz aver that the petition for review was fatally defective for its failure to mention the other cases upon the same issues pending between the parties (i.e., CA-G.R. No. 77395 and G.R No. 163501); that the UP was evidently resorting to forum shopping, and to delaying the satisfaction of the final judgment by the filing of its petition for review; that the ruling in Commissioner of Public Works v. San Diego had no application because there was an appropriation for the project; that the UP retained the funds allotted for the project only in a fiduciary capacity; that the contract price had been meanwhile adjusted to P22,338,553.25, an amount already more than sufficient to cover the judgment award; that the UPs prayer to reduce or delete the award of damages had no factual basis, because they had been gravely wronged, had been deprived of their source of income, and had suffered untold miseries, discomfort, humiliation and sleepless years; that dela Cruz had even been constrained to sell his house, his equipment and the implements of his trade, and together with his family had been forced to live miserably because of the wrongful actuations of the UP; and that the RTC correctly declared the Courts TRO to be already functus officio by reason of the withdrawal of the garnished amount from the DBP. The decisive issues to be considered and passed upon are, therefore: (a) whether the funds of the UP were the proper subject of garnishment in order to satisfy the judgment award; and (b) whether the UPs prayer for the deletion of the awards of actual damag es of P5,716,729.00, moral damages of P10,000,000.00 and attorneys

fees of P150,000.00 plus P1,500.00 per appearance could be granted despite the finality of the judgment of the RTC. Ruling The petition for review is meritorious. I. UPs funds, being government funds, are not subject to garnishment The UP was founded on June 18, 1908 through Act 1870 to provide advanced instruction in literature, philosophy, the sciences, and arts, and to give professional and technical training to deserving students.63 Despite its establishment as a body corporate, 64 the UP remains to be a "chartered institution"65 performing a legitimate government function. It is an institution of higher learning, not a corporation established for profit and declaring any dividends. 66 In enacting Republic Act No. 9500 (The University of the Philippines Charter of 2008), Congress has declared the UP as the national university67 "dedicated to the search for truth and knowledge as well as the development of future leaders."68 Irrefragably, the UP is a government instrumentality, 69 performing the States constitutional mandate of promoting quality and accessible education.70 As a government instrumentality, the UP administers special funds sourced from the fees and income enumerated under Act No. 1870 and Section 1 of Executive Order No. 714,71 and from the yearly appropriations, to achieve the purposes laid down by Section 2 of Act 1870, as expanded in Republic Act No. 9500.72 All the funds going into the possession of the UP, including any interest accruing from the deposit of such funds in any banking institution, constitute a "special trust fund," the disbursement of which should always be aligned with the UPs mission and purpose,73 and should always be subject to auditing by the COA.74

Presidential Decree No. 1445 defines a "trust fund" as a fund that officially comes in the possession of an agency of the government or of a public officer as trustee, agent or administrator, or that is received for the fulfillment of some obligation. 75 A trust fund may be utilized only for the "specific purpose for which the trust was created or the funds received."76 The funds of the UP are government funds that are public in character. They include the income accruing from the use of real property ceded to the UP that may be spent only for the attainment of its institutional objectives.77 Hence, the funds subject of this action could not be validly made the subject of the RTCs writ of execution or garnishment. The adverse judgment rendered against the UP in a suit to which it had impliedly consented was not immediately enforceable by execution against the UP,78 because suability of the State did not necessarily mean its liability. 79 A marked distinction exists between suability of the State and its liability. As the Court succinctly stated in Municipality of San Fernando, La Union v. Firme:80 A distinction should first be made between suability and liability. "Suability depends on the consent of the state to be sued, liability on the applicable law and the established facts. The circumstance that a state is suable does not necessarily mean that it is liable; on the other hand, it can never be held liable if it does not first consent to be sued. Liability is not conceded by the mere fact that the state has allowed itself to be sued. When the state does waive its sovereign immunity, it is only giving the plaintiff the chance to prove, if it can, that the defendant is liable. Also, in Republic v. Villasor,81 where the issuance of an alias writ of execution directed against the funds of the Armed Forces of the Philippines to satisfy a final and executory judgment was nullified, the Court said:

xxx The universal rule that where the State gives its consent to be sued by private parties either by general or special law, it may limit claimants action "only up to the completion of proceedings anterior to the stage of execution" and that the power of the Courts ends when the judgment is rendered, since government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of public funds must be covered by the corresponding appropriation as required by law. The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated by law. The UP correctly submits here that the garnishment of its funds to satisfy the judgment awards of actual and moral damages (including attorneys fees) was not validly made if there was no special appropriation by Congress to cover the liability. It was, therefore, legally unwarranted for the CA to agree with the RTCs holding in the order issued on April 1, 2003 that no appropriation by Congress to allocate and set aside the payment of the judgment awards was necessary because "there (were) already an appropriations (sic) earmarked for the said project."82 The CA and the RTC thereby unjustifiably ignored the legal restriction imposed on the trust funds of the Government and its agencies and instrumentalities to be used exclusively to fulfill the purposes for which the trusts were created or for which the funds were received except upon express authorization by Congress or by the head of a government agency in control of the funds, and subject to pertinent budgetary laws, rules and regulations.83 Indeed, an appropriation by Congress was required before the judgment that rendered the UP liable for moral and actual damages (including attorneys fees) would be satisfied considering that such monetary liabilities were not covered by the "appropriations earmarked for the said project." The Constitution strictly mandated

that "(n)o money shall be paid out of the Treasury except in pursuance of an appropriation made by law."84 II COA must adjudicate private respondents claim before execution should proceed The execution of the monetary judgment against the UP was within the primary jurisdiction of the COA. This was expressly provided in Section 26 of Presidential Decree No. 1445, to wit: Section 26. General jurisdiction. - The authority and powers of the Commission shall extend to and comprehend all matters relating to auditing procedures, systems and controls, the keeping of the general accounts of the Government, the preservation of vouchers pertaining thereto for a period of ten years, the examination and inspection of the books, records, and papers relating to those accounts; and the audit and settlement of the accounts of all persons respecting funds or property received or held by them in an accountable capacity, as well as the examination, audit, and settlement of all debts and claims of any sort due from or owing to the Government or any of its subdivisions, agencies and instrumentalities. The said jurisdiction extends to all government-owned or controlled corporations, including their subsidiaries, and other self-governing boards, commissions, or agencies of the Government, and as herein prescribed, including non governmental entities subsidized by the government, those funded by donations through the government, those required to pay levies or government share, and those for which the government has put up a counterpart fund or those partly funded by the government. It was of no moment that a final and executory decision already validated the claim against the UP. The settlement of the monetary claim was still subject to the primary jurisdiction of the COA despite the final decision of the RTC having already validated the claim. 85 As such, Stern Builders and dela Cruz as the claimants had no

alternative except to first seek the approval of the COA of their monetary claim. On its part, the RTC should have exercised utmost caution, prudence and judiciousness in dealing with the motions for execution against the UP and the garnishment of the UPs funds. The RTC had no authority to direct the immediate withdrawal of any portion of the garnished funds from the depository banks of the UP. By eschewing utmost caution, prudence and judiciousness in dealing with the execution and garnishment, and by authorizing the withdrawal of the garnished funds of the UP, the RTC acted beyond its jurisdiction, and all its orders and issuances thereon were void and of no legal effect, specifically: (a) the order Judge Yadao issued on January 3, 2007 allowing Stern Builders and dela Cruz to withdraw the deposited garnished amount; (b) the order Judge Yadao issued on January 16, 2007 directing DBP to forthwith release the garnish amount to Stern Builders and dela Cruz; (c) the sheriffs report of January 17, 2007 manifesting the full satisfaction of the writ of execution; and (d) the order of April 10, 2007 deying the UPs motion for the redeposit of the withdrawn amount. Hence, such orders and issuances should be struck down without exception. Nothing extenuated Judge Yadaos successive violations of Presidential Decree No. 1445. She was aware of Presidential Decree No. 1445, considering that the Court circulated to all judges its Administrative Circular No. 10-2000,86 issued on October 25, 2000, enjoining them "to observe utmost caution, prudence and judiciousness in the issuance of writs of execution to satisfy money judgments against government agencies and local government units" precisely in order to prevent the circumvention of Presidential Decree No. 1445, as well as of the rules and procedures of the COA, to wit: In order to prevent possible circumvention of the rules and procedures of the Commission on Audit, judges are hereby enjoined to observe utmost caution, prudence and judiciousness in the

issuance of writs of execution to satisfy money judgments against government agencies and local government units. Judges should bear in mind that in Commissioner of Public Highways v. San Diego (31 SCRA 617, 625 1970), this Court explicitly stated: "The universal rule that where the State gives its consent to be sued by private parties either by general or special law, it may limit claimants action only up to the completion of proceedings anterior to the stage of execution and that the power of the Court ends when the judgment is rendered, since government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of public funds must be covered by the corresponding appropriation as required by law. The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated by law. Moreover, it is settled jurisprudence that upon determination of State liability, the prosecution, enforcement or satisfaction thereof must still be pursued in accordance with the rules and procedures laid down in P.D. No. 1445, otherwise known as the Government Auditing Code of the Philippines (Department of Agriculture v. NLRC, 227 SCRA 693, 701-02 1993 citing Republic vs. Villasor, 54 SCRA 84 1973). All money claims against the Government must first be filed with the Commission on Audit which must act upon it within sixty days. Rejection of the claim will authorize the claimant to elevate the matter to the Supreme Court on certiorari and in effect, sue the State thereby (P.D. 1445, Sections 49-50). However, notwithstanding the rule that government properties are not subject to levy and execution unless otherwise provided for by statute (Republic v. Palacio, 23 SCRA 899 1968; Commissioner of Public Highways v. San Diego, supra) or municipal ordinance

(Municipality of Makati v. Court of Appeals, 190 SCRA 206 1990), the Court has, in various instances, distinguished between government funds and properties for public use and those not held for public use. Thus, in Viuda de Tan Toco v. Municipal Council of Iloilo (49 Phil 52 1926, the Court ruled that "where property of a municipal or other public corporation is sought to be subjected to execution to satisfy judgments recovered against such corporation, the question as to whether such property is leviable or not is to be determined by the usage and purposes for which it is held." The following can be culled from Viuda de Tan Toco v. Municipal Council of Iloilo: 1. Properties held for public uses and generally everything held for governmental purposes are not subject to levy and sale under execution against such corporation. The same rule applies to funds in the hands of a public officer and taxes due to a municipal corporation. 2. Where a municipal corporation owns in its proprietary capacity, as distinguished from its public or government capacity, property not used or used for a public purpose but for quasi-private purposes, it is the general rule that such property may be seized and sold under execution against the corporation. 3. Property held for public purposes is not subject to execution merely because it is temporarily used for private purposes. If the public use is wholly abandoned, such property becomes subject to execution. This Administrative Circular shall take effect immediately and the Court Administrator shall see to it that it is faithfully implemented. Although Judge Yadao pointed out that neither the CA nor the Court had issued as of then any writ of preliminary injunction to enjoin the release or withdrawal of the garnished amount, she did not need any writ of injunction from a superior court to compel her obedience to

the law. The Court is disturbed that an experienced judge like her should look at public laws like Presidential Decree No. 1445 dismissively instead of loyally following and unquestioningly implementing them. That she did so turned her court into an oppressive bastion of mindless tyranny instead of having it as a true haven for the seekers of justice like the UP. III Period of appeal did not start without effective service of decision upon counsel of record; Fresh-period rule announced in Neypes v. Court of Appeals can be given retroactive application The UP next pleads that the Court gives due course to its petition for review in the name of equity in order to reverse or modify the adverse judgment against it despite its finality. At stake in the UPs plea for equity was the return of the amount of P16,370,191.74 illegally garnished from its trust funds. Obstructing the plea is the finality of the judgment based on the supposed tardiness of UPs appeal, which the RTC declared on September 26, 2002. The CA upheld the declaration of finality on February 24, 2004, and the Court itself denied the UPs petition for review on that issue on May 11, 2004 (G.R. No. 163501). The denial became final on November 12, 2004. It is true that a decision that has attained finality becomes immutable and unalterable, and cannot be modified in any respect, 87 even if the modification is meant to correct erroneous conclusions of fact and law, and whether the modification is made by the court that rendered it or by this Court as the highest court of the land.88 Public policy dictates that once a judgment becomes final, executory and unappealable, the prevailing party should not be deprived of the fruits of victory by some subterfuge devised by the losing party. Unjustified delay in the enforcement of such judgment sets at naught the role and purpose of the courts to resolve justiciable controversies

with finality.89 Indeed, all litigations must at some time end, even at the risk of occasional errors. But the doctrine of immutability of a final judgment has not been absolute, and has admitted several exceptions, among them: (a) the correction of clerical errors; (b) the so-called nunc pro tunc entries that cause no prejudice to any party; (c) void judgments; and (d) whenever circumstances transpire after the finality of the decision that render its execution unjust and inequitable. 90 Moreover, in Heirs of Maura So v. Obliosca,91 we stated that despite the absence of the preceding circumstances, the Court is not precluded from brushing aside procedural norms if only to serve the higher interests of justice and equity. Also, in Gumaru v. Quirino State College,92 the Court nullified the proceedings and the writ of execution issued by the RTC for the reason that respondent state college had not been represented in the litigation by the Office of the Solicitor General. We rule that the UPs plea for equity warrants the Courts exercise of the exceptional power to disregard the declaration of finality of the judgment of the RTC for being in clear violation of the UPs right to due process. Both the CA and the RTC found the filing on June 3, 2002 by the UP of the notice of appeal to be tardy. They based their finding on the fact that only six days remained of the UPs reglementary 15-day period within which to file the notice of appeal because the UP had filed a motion for reconsideration on January 16, 2002 vis--vis the RTCs decision the UP received on January 7, 2002; and that because the denial of the motion for reconsideration had been served upon Atty. Felimon D. Nolasco of the UPLB Legal Office on May 17, 2002, the UP had only until May 23, 2002 within which to file the notice of appeal. The UP counters that the service of the denial of the motion for reconsideration upon Atty. Nolasco was defective considering that its counsel of record was not Atty. Nolasco of the UPLB Legal Office

but the OLS in Diliman, Quezon City; and that the period of appeal should be reckoned from May 31, 2002, the date when the OLS received the order. The UP submits that the filing of the notice of appeal on June 3, 2002 was well within the reglementary period to appeal. We agree with the submission of the UP. Firstly, the service of the denial of the motion for reconsideration upon Atty. Nolasco of the UPLB Legal Office was invalid and ineffectual because he was admittedly not the counsel of record of the UP. The rule is that it is on the counsel and not the client that the service should be made. 93 That counsel was the OLS in Diliman, Quezon City, which was served with the denial only on May 31, 2002. As such, the running of the remaining period of six days resumed only on June 1, 2002, 94 rendering the filing of the UPs notice of appeal on June 3, 2002 timely and well within the remaining days of the UPs period to appeal. Verily, the service of the denial of the motion for reconsideration could only be validly made upon the OLS in Diliman, and no other. The fact that Atty. Nolasco was in the employ of the UP at the UPLB Legal Office did not render the service upon him effective. It is settled that where a party has appeared by counsel, service must be made upon such counsel.95 Service on the party or the partys employee is not effective because such notice is not notice in law. 96 This is clear enough from Section 2, second paragraph, of Rule 13, Rules of Court, which explicitly states that: "If any party has appeared by counsel, service upon him shall be made upon his counsel or one of them, unless service upon the party himself is ordered by the court. Where one counsel appears for several parties, he shall only be entitled to one copy of any paper served upon him by the opposite side." As such, the period to appeal resumed only on June 1, 2002, the date following the service on May 31, 2002 upon

the OLS in Diliman of the copy of the decision of the RTC, not from the date when the UP was notified. 97 Accordingly, the declaration of finality of the judgment of the RTC, being devoid of factual and legal bases, is set aside. Secondly, even assuming that the service upon Atty. Nolasco was valid and effective, such that the remaining period for the UP to take a timely appeal would end by May 23, 2002, it would still not be correct to find that the judgment of the RTC became final and immutable thereafter due to the notice of appeal being filed too late on June 3, 2002. In so declaring the judgment of the RTC as final against the UP, the CA and the RTC applied the rule contained in the second paragraph of Section 3, Rule 41 of the Rules of Court to the effect that the filing of a motion for reconsideration interrupted the running of the period for filing the appeal; and that the period resumed upon notice of the denial of the motion for reconsideration. For that reason, the CA and the RTC might not be taken to task for strictly adhering to the rule then prevailing. However, equity calls for the retroactive application in the UPs favor of the fresh-period rule that the Court first announced in midSeptember of 2005 through its ruling in Neypes v. Court of Appeals,98 viz: To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, the Court deems it practical to allow a fresh period of 15 days within which to file the notice of appeal in the Regional Trial Court, counted from receipt of the order dismissing a motion for a new trial or motion for reconsideration. The retroactive application of the fresh-period rule, a procedural law that aims "to regiment or make the appeal period uniform, to be

counted from receipt of the order denying the motion for new trial, motion for reconsideration (whether full or partial) or any final order or resolution,"99 is impervious to any serious challenge. This is because there are no vested rights in rules of procedure. 100 A law or regulation is procedural when it prescribes rules and forms of procedure in order that courts may be able to administer justice. 101 It does not come within the legal conception of a retroactive law, or is not subject of the general rule prohibiting the retroactive operation of statues, but is given retroactive effect in actions pending and undetermined at the time of its passage without violating any right of a person who may feel that he is adversely affected. We have further said that a procedural rule that is amended for the benefit of litigants in furtherance of the administration of justice shall be retroactively applied to likewise favor actions then pending, as equity delights in equality.102 We may even relax stringent procedural rules in order to serve substantial justice and in the exercise of this Courts equity jurisdiction.103 Equity jurisdiction aims to do complete justice in cases where a court of law is unable to adapt its judgments to the special circumstances of a case because of the inflexibility of its statutory or legal jurisdiction. 104 It is cogent to add in this regard that to deny the benefit of the freshperiod rule to the UP would amount to injustice and absurdity injustice, because the judgment in question was issued on November 28, 2001 as compared to the judgment in Neypes that was rendered in 1998; absurdity, because parties receiving notices of judgment and final orders issued in the year 1998 would enjoy the benefit of the fresh-period rule but the later rulings of the lower courts like that herein would not.105 Consequently, even if the reckoning started from May 17, 2002, when Atty. Nolasco received the denial, the UPs filing on June 3, 2002 of the notice of appeal was not tardy within the context of the fresh-period rule. For the UP, the fresh period of 15-days counted from service of the denial of the motion for reconsideration would

end on June 1, 2002, which was a Saturday. Hence, the UP had until the next working day, or June 3, 2002, a Monday, within which to appeal, conformably with Section 1 of Rule 22, Rules of Court, which holds that: "If the last day of the period, as thus computed, falls on a Saturday, a Sunday, or a legal holiday in the place where the court sits, the time shall not run until the next working day." IV Awards of monetary damages, being devoid of factual and legal bases, did not attain finality and should be deleted Section 14 of Article VIII of the Constitution prescribes that express findings of fact and of law should be made in the decision rendered by any court, to wit: Section 14. No decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is based. No petition for review or motion for reconsideration of a decision of the court shall be refused due course or denied without stating the legal basis therefor. Implementing the constitutional provision in civil actions is Section 1 of Rule 36, Rules of Court, viz: Section 1. Rendition of judgments and final orders. A judgment or final order determining the merits of the case shall be in writing personally and directly prepared by the judge, stating clearly and distinctly the facts and the law on which it is based, signed by him, and filed with the clerk of the court. (1a) The Constitution and the Rules of Court apparently delineate two main essential parts of a judgment, namely: the body and the decretal portion. Although the latter is the controlling part, 106 the importance

of the former is not to be lightly regarded because it is there where the court clearly and distinctly states its findings of fact and of law on which the decision is based. To state it differently, one without the other is ineffectual and useless. The omission of either inevitably results in a judgment that violates the letter and the spirit of the Constitution and the Rules of Court. The term findings of fact that must be found in the body of the decision refers to statements of fact, not to conclusions of law. 107 Unlike in pleadings where ultimate facts alone need to be stated, the Constitution and the Rules of Court require not only that a decision should state the ultimate facts but also that it should specify the supporting evidentiary facts, for they are what are called the findings of fact. The importance of the findings of fact and of law cannot be overstated. The reason and purpose of the Constitution and the Rules of Court in that regard are obviously to inform the parties why they win or lose, and what their rights and obligations are. Only thereby is the demand of due process met as to the parties. As Justice Isagani A. Cruz explained in Nicos Industrial Corporation v. Court of Appeals:108 It is a requirement of due process that the parties to a litigation be informed of how it was decided, with an explanation of the factual and legal reasons that led to the conclusions of the court. The court cannot simply say that judgment is rendered in favor of X and against Y and just leave it at that without any justification whatsoever for its action. The losing party is entitled to know why he lost, so he may appeal to a higher court, if permitted, should he believe that the decision should be reversed. A decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark as to how it was reached and is especially prejudicial to the losing party, who is unable to pinpoint the possible errors of the court for review by a higher tribunal.

Here, the decision of the RTC justified the grant of actual and moral damages, and attorneys fees in the following terse manner, viz: xxx The Court is not unmindful that due to defendants unjustified refusal to pay their outstanding obligation to plaintiff, the same suffered losses and incurred expenses as he was forced to remortgage his house and lot located in Quezon City to Metrobank (Exh. "CC") and BPI Bank just to pay its monetary obligations in the form of interest and penalties incurred in the course of the construction of the subject project.109 The statement that "due to defendants unjustified refusal to pay their outstanding obligation to plaintiff, the same suffered losses and incurred expenses as he was forced to re-mortgage his house and lot located in Quezon City to Metrobank (Exh. "CC") and BPI Bank just to pay its monetary obligations in the form of interest and penalties incurred in the course of the construction of the subject project" was only a conclusion of fact and law that did not comply with the constitutional and statutory prescription. The statement specified no detailed expenses or losses constituting the P5,716,729.00 actual damages sustained by Stern Builders in relation to the construction project or to other pecuniary hardships. The omission of such expenses or losses directly indicated that Stern Builders did not prove them at all, which then contravened Article 2199, Civil Code, the statutory basis for the award of actual damages, which entitled a person to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. As such, the actual damages allowed by the RTC, being bereft of factual support, were speculative and whimsical. Without the clear and distinct findings of fact and law, the award amounted only to an ipse dixit on the part of the RTC,110 and did not attain finality. There was also no clear and distinct statement of the factual and legal support for the award of moral damages in the substantial amount of P10,000,000.00. The award was thus also speculative and whimsical. Like the actual damages, the moral damages constituted

another judicial ipse dixit, the inevitable consequence of which was to render the award of moral damages incapable of attaining finality. In addition, the grant of moral damages in that manner contravened the law that permitted the recovery of moral damages as the means to assuage "physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury."111 The contravention of the law was manifest considering that Stern Builders, as an artificial person, was incapable of experiencing pain and moral sufferings. 112 Assuming that in granting the substantial amount of P10,000,000.00 as moral damages, the RTC might have had in mind that dela Cruz had himself suffered mental anguish and anxiety. If that was the case, then the RTC obviously disregarded his separate and distinct personality from that of Stern Builders. 113 Moreover, his moral and emotional sufferings as the President of Stern Builders were not the sufferings of Stern Builders. Lastly, the RTC violated the basic principle that moral damages were not intended to enrich the plaintiff at the expense of the defendant, but to restore the plaintiff to his status quo ante as much as possible. Taken together, therefore, all these considerations exposed the substantial amount of P10,000,000.00 allowed as moral damages not only to be factually baseless and legally indefensible, but also to be unconscionable, inequitable and unreasonable. Like the actual and moral damages, the P150,000.00, plus P1,500.00 per appearance, granted as attorneys fees were factually unwarranted and devoid of legal basis. The general rule is that a successful litigant cannot recover attorneys fees as part of the damages to be assessed against the losing party because of the policy that no premium should be placed on the right to litigate. 114 Prior to the effectivity of the present Civil Code, indeed, such fees could be recovered only when there was a stipulation to that effect. It was only under the present Civil Code that the right to collect attorneys fees in the cases mentioned in Article 2208115 of the Civil Code came to be recognized.116 Nonetheless, with attorneys fees being allowed in the concept of actual damages,117 their amounts must be factually

and legally justified in the body of the decision and not stated for the first time in the decretal portion.118 Stating the amounts only in the dispositive portion of the judgment is not enough; 119 a rendition of the factual and legal justifications for them must also be laid out in the body of the decision.120 That the attorneys fees granted to the private respondents did not satisfy the foregoing requirement suffices for the Court to undo them. 121 The grant was ineffectual for being contrary to law and public policy, it being clear that the express findings of fact and law were intended to bring the case within the exception and thereby justify the award of the attorneys fees. Devoid of such express findings, the award was a conclusion without a premise, its basis being improperly left to speculation and conjecture. 122 Nonetheless, the absence of findings of fact and of any statement of the law and jurisprudence on which the awards of actual and moral damages, as well as of attorneys fees, were based was a fatal flaw that invalidated the decision of the RTC only as to such awards. As the Court declared in Velarde v. Social Justice Society,123 the failure to comply with the constitutional requirement for a clear and distinct statement of the supporting facts and law "is a grave abuse of discretion amounting to lack or excess of jurisdiction" and that "(d)ecisions or orders issued in careless disregard of the constitutional mandate are a patent nullity and must be struck down as void."124 The other item granted by the RTC (i.e., P503,462.74) shall stand, subject to the action of the COA as stated herein. WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS ASIDE the decision of the Court of Appeals under review; ANNULS the orders for the garnishment of the funds of the University of the Philippines and for the release of the garnished amount to Stern Builders Corporation and Servillano dela Cruz; and DELETES from the decision of the Regional Trial Court dated November 28, 2001 for being void only the awards of actual damages of P5,716,729.00, moral damages of P10,000,000.00,

and attorney's fees of P150,000.00, plus P1,500.00 per appearance, in favor of Stern Builders Corporation and Servillano dela Cruz. The Court ORDERS Stem Builders Corporation and Servillano dela Cruz to redeposit the amount of P16,370,191.74 within 10 days from receipt of this decision. Costs of suit to be paid by the private respondents. SO ORDERED.