Alvendia v. Bonamy
REITERATIONFacts
1. The Antecedents: This case originated from a collection suit filed by Bonifacio Bonamy against spouses Felicidad and Jesus Alvendia for P107,481.50 representing unpaid construction materials. The parties subsequently entered into a compromise agreement, approved by the court, wherein the Alvendias acknowledged their indebtedness and agreed to pay from the first release of funds from the GSIS for housing units sold by their family corporation. They also agreed to waive all further claims against each other. 2. Procedural History: After the compromise agreement was approved, Bonamy sought execution of the judgment when the Alvendias failed to pay. The trial court ordered the issuance of a writ of execution, and subsequently an alias writ, leading to the levy and sale of the Alvendias' leasehold rights over a fishpond. The Alvendias moved to quash the writ of execution, levy, and sale, but their motion was denied by the trial court, which also ordered the issuance of a writ of possession in favor of Bonamy. The Alvendias then filed a petition for certiorari and prohibition with the Intermediate Appellate Court (IAC), which dismissed their petition. The IAC later issued resolutions allowing the Alvendias to pay the judgment in cash and denying Bonamy's motion for reconsideration. Bonamy then filed a petition for certiorari and prohibition with the Supreme Court. 3. The Petition: In G.R. No. 72138, the spouses Alvendia filed an urgent motion for extension of time to file an appeal by certiorari from the denial of their motion for reconsideration of the IAC's decision. In G.R. No. 72373, Bonifacio Bonamy filed a petition for certiorari and prohibition seeking to annul the IAC's resolutions that allowed the Alvendias to pay the judgment in cash and denied Bonamy's motion for reconsideration. The Supreme Court consolidated both cases. Bonamy argued that the IAC gravely abused its discretion in allowing cash payment after the judgment had been validly executed and satisfied through the sale of the Alvendias' leasehold rights, which had become final and executory.
Issue(s)
Whether the Intermediate Appellate Court committed grave abuse of discretion in allowing the Spouses Alvendia to pay the judgment debt in cash after the execution sale of their leasehold rights, and whether the judgment debt had already been satisfied through the execution sale of the Alvendias' leasehold rights over the fishpond. Whether the Spouses Alvendia can invoke equity to reopen a case that has become final and has been executed. Whether the Spouses Alvendia's failure to file a petition for review on certiorari in G.R. No. 72138 renders the IAC's decision final and executory, and the effect on the writ of possession. Whether Bonamy should return the excess payment to the Alvendias.
Ruling
The Supreme Court SET ASIDE the assailed resolutions of the Intermediate Appellate Court and AFFIRMED its decision dismissing the Alvendias' petition, with a modification regarding the description of the property in the writ of possession. The restraining order issued by the IAC was ordered lifted. The Court ordered Bonamy to return P12,518.50 to the Alvendias, representing the difference between the execution price and the amount after deducting P20,000.00 from the total indebtedness. For G.R. No. 72138, entry of judgment of the IAC's decision was ordered to be made.
Ratio Decidendi
On the issue of grave abuse of discretion and satisfaction of judgment: The Supreme Court held that the petition in G.R. No. 72373 is impressed with merit. The pivotal issue was whether judgment debtors could pay the debt in cash after failing to pay or redeem properties sold in execution. Bonamy argued that the IAC committed grave abuse of discretion by allowing cash payment when the judgment was already satisfied through the levy and sale of the Alvendias' leasehold rights. The Court agreed that the compromise judgment was final and immediately executory, and Bonamy was entitled to execution when the Alvendias failed to pay on time. The execution sale of the leasehold rights on January 15, 1981, satisfied the judgment in accordance with Section 15 of Rule 39 of the Rules of Court. The Alvendias had one year to redeem but failed to do so, leading to the issuance of a Final Deed of Sale on January 25, 1983. All these actions were previously found to be legal and proper by the IAC in its decision dated February 27, 1985, which became final and executory when the Alvendias failed to file their petition for review. On the invocation of equity and reopening of a final case: The Court reiterated the principle that there is no justification in law or fact for reopening a case that has long become final and has been executed. The doctrine of finality of judgments is based on public policy and sound practice, ensuring that judgments become final at a definite date. The Alvendias' attempt to invoke equity was deemed improper because they had multiple opportunities to pay or redeem but failed to do so. Their offer to pay in cash came more than two years after the redemption period had elapsed and after Bonamy had introduced significant improvements on the property. The Court emphasized that "He who comes into Equity must come with clean hands," and allowing the Alvendias to pay after Bonamy's substantial investment would be inequitable. Equity follows the law and cannot disregard well-settled rules of procedure or public policy. On the finality of the IAC's decision and modification of the writ of possession: The Court noted that the IAC's decision dated February 27, 1985, had become final and executory because the Alvendias failed to file their contemplated petition for review on certiorari in G.R. No. 72138. Failure to perfect an appeal renders the lower court's judgment final and executory. An appellee who is not an appellant cannot seek modification or reversal of the judgment without filing their own appeal. Therefore, the IAC's findings and conclusions in that decision remained undisturbed, except for the correction of an error in the property description in the writ of possession. While affirming the IAC's decision, the Court found an ambiguity in the dispositive portion of the trial court's writ of possession and amended the writ of possession to conform to the correct description in the Certificate of Sale and Final Deed of Sale. On the return of excess payment: The Court ordered Bonamy to return P12,518.50 to the Alvendias. This amount represented the difference between the execution price of P100,000.00 (cashier's check tendered by Alvendias) and P87,481.50. The latter amount was calculated by deducting P20,000.00 from the total indebtedness of P107,481.50, implying that the P20,000.00 cash received by Bonamy was considered part of the satisfaction of the judgment, and the P100,000.00 tender was an overpayment in the context of the execution sale.
Main Doctrine
A compromise judgment, once approved by the court, becomes immediately executory. The execution sale of properties pursuant to a valid and final judgment cannot be set aside or reopened, especially after the period of redemption has lapsed and the judgment creditor has taken possession and introduced improvements thereon. Equity cannot prevail against well-settled rules of procedure and the principle of finality of judgments.