Metropolitan Waterworks and Sewerage System v. De Leon
REITERATIONFacts
The Antecedents: Private respondents filed an action for specific performance and damages against petitioner MWSS. The parties agreed to submit the controversy to arbitration. The Arbitration Board rendered an award ordering MWSS to pay private respondents P13,188,950.20 with 6% interest per annum from the filing of the complaint. The award was confirmed and became final and executory. Procedural History: The parties entered into an agreement (letter-agreement) modifying the award, including a straight 6% interest and certain discounts. MWSS paid a partial amount on December 22, 1972, leaving a balance. Private respondents filed a motion for execution for the balance. The respondent Judge initially denied the motion, finding novation. This Court, in G.R. No. L-41117, granted a writ of mandamus, directing the lower court to issue the writ of execution for the balance due under the award. Subsequently, private respondents filed an urgent ex-parte motion for execution in the lower court for P2,786,981.16. The respondent Judge granted the motion, and the sheriff garnished MWSS's deposits. MWSS filed a motion to limit the execution to P1,261,510.88, as ordered by this Court. The respondent Judge clarified his order, stating the execution should be for P1,261,510.68 plus 6% interest from December 23, 1972. The Petition: MWSS filed a special civil action for certiorari, praying to set aside the orders of March 16, 1987, and April 10, 1987, and to limit the payment to P1,261,510.88, as per the decision in G.R. No. L-41117.
Issue(s)
Whether the respondent Judge acted in excess of jurisdiction and with grave abuse of discretion in issuing the writ of execution for an amount greater than that determined by this Court in G.R. No. L-41117. Whether the parties' letter-agreement constituted a novation of the arbitration award. Whether the balance due under the award, considering the partial payment and the letter-agreement, is P1,261,510.88.
Ruling
The petition is dismissed. The temporary restraining order issued by this Court is lifted and set aside. The decision is immediately executory.
Ratio Decidendi
On the propriety of certiorari and the respondent Judge's actions: The Court held that a special civil action of certiorari under Rule 65 is the proper remedy to assail an order of execution issued in excess of jurisdiction and with grave abuse of discretion, especially when the sheriff has already garnished the petitioner's deposits, leaving no other plain, speedy, and adequate remedy in the ordinary course of law. The respondent Judge's order to execute an amount not in conformity with this Court's previous ruling in G.R. No. L-41117 constituted grave abuse of discretion. On the issue of novation: The Court found that the letter-agreement entered into by the parties did not constitute a novation of the arbitration award. While the agreement modified certain aspects of the award, such as the interest computation and the allocation of arbitration costs, it did not extinguish the original obligation nor introduce a new one that completely replaced it. The subsequent actions of the parties, particularly the filing of a motion for execution for the balance, indicated that the original award, as modified by the agreement, was still the basis of their claims. On the correct balance due: The Court affirmed the calculation of the balance due under the award. It reiterated that the net award was P13,188,950.20. The letter-agreement stipulated a straight 6% interest, without computing the period of time involved, provided full payment was made by October 31, 1972. However, MWSS paid only P13,437,084.95 on December 22, 1972, leaving a balance of P1,261,510.88. The Court found that the respondent Judge correctly ordered the execution for this balance plus 6% interest from December 23, 1972, until fully paid. The Court rejected MWSS's claim to a condonation of interest due to its delay in payment, deeming it inequitable and a premium for bad faith.
Main Doctrine
A special civil action for certiorari is the proper remedy to assail an order of execution issued with grave abuse of discretion, especially when the sheriff has already garnished deposits, leaving no other plain, speedy, and adequate remedy.