Ley Construction and Development Corporation v. Union Bank of the Philippines
REITERATIONFacts
The Antecedents: Respondent Union Bank of the Philippines filed a collection suit against petitioners Ley Construction and Development Corporation and spouses Manuel T. Ley and Janet T. Ley for their default in the payment of three promissory notes totaling P18,833,674.86, inclusive of stipulated interest as of May 31, 1991. Petitioners admitted the indebtedness but claimed they were granted additional time to pay after meetings with bank officers, presenting the notes as renewals of previous ones without attaching supporting documents. Procedural History: Respondent filed a Motion for Partial Summary Judgment, which was denied by Judge Capulong on August 13, 1992. Subsequently, Judge Arcangel, who replaced Judge Capulong, granted respondent's ex-parte Motion to Resolve the earlier motion for summary judgment on March 14, 1996, ordering petitioners to pay the principal obligation, interest, penalties, attorney's fees, and costs. Petitioners' motions for reconsideration were denied. Respondent then moved for execution of Judge Arcangel's order. Judge Capulong, having been reassigned back to Branch 134, denied this motion on February 27, 1997, citing his earlier order. He denied the motion for reconsideration on June 6, 1997. The Petition: Respondent filed a petition for certiorari with the Court of Appeals, which set aside the trial court's orders denying the motion for execution. The Supreme Court is now tasked to resolve whether the Court of Appeals erred in ruling that Judge Capulong acted without or in excess of jurisdiction in denying the motion for execution.
Issue(s)
Whether the Court of Appeals erred in ruling that Judge Capulong acted without or in excess of jurisdiction in denying respondent's motion for execution of the summary judgment rendered by Judge Arcangel. Whether Judge Capulong's August 13, 1992 order denying the motion for summary judgment had become final and binding; and whether Judge Arcangel had the authority to grant the motion for summary judgment despite the prior denial by Judge Capulong. Whether a summary judgment was proper in this case. Whether the delay of the case should be considered.
Ruling
The petition is DENIED. The Court of Appeals did not err in ruling that the trial court acted without jurisdiction in denying the execution of Judge Arcangel's order. The Court affirmed the decision of the Court of Appeals, setting aside the orders of Judge Capulong.
Ratio Decidendi
On Judge Capulong's denial of the motion for execution: The Court found that Judge Capulong acted without or in excess of jurisdiction when he refused to order the execution of Judge Arcangel's summary judgment. A trial court, after a judgment on the merits has become final and executory, has a ministerial duty to order its execution. The court cannot review or set aside a final judgment on the merits, as such power belongs exclusively to the appellate courts, except through specific remedies like reconsideration, new trial, or relief from judgment. Judge Arcangel's order granting the summary judgment disposed of all issues and constituted a judgment on the merits. Therefore, Judge Capulong's refusal to execute this final judgment was an act beyond his jurisdiction. On the authority of Judge Arcangel to grant summary judgment despite prior denial: The Court held that Judge Capulong's August 13, 1992 order denying the motion for summary judgment was an interlocutory order. Interlocutory orders are always under the control of the court and may be modified or rescinded at any time before final judgment, based on the court's inherent power to control its process and orders to conform to law and justice. It is immaterial if a different judge modifies or rescinds an interlocutory order issued by a previous judge, provided there is no grave abuse of discretion or injustice. Therefore, Judge Arcangel, as the presiding judge replacing Judge Capulong, had the authority to review and grant the motion for summary judgment, effectively reconsidering Judge Capulong's earlier denial. The petitioners' contention that Judge Arcangel's resolution was void because he did not expressly set aside Judge Capulong's order was deemed without merit, as the jurisdiction of Judge Arcangel over the parties and the subject matter was not in doubt. Furthermore, the petitioners failed to question Judge Arcangel's decision through a petition for certiorari or appeal, allowing it to become final and executory. On the propriety of summary judgment: The Court affirmed the Court of Appeals' finding that a summary judgment was proper. Petitioners admitted their indebtedness, and their sole defense was an alleged grant of extensions by bank officers. However, they failed to specify the officers, dates, or periods of these alleged extensions and did not submit any supporting affidavits from these officers. This defense was considered a sham, fictitious, contrived, and patently unsubstantial, thus not constituting a genuine issue for trial. The Court noted that the Rules on Summary Judgment do not strictly require a hearing if the pleadings and supporting documents sufficiently establish that there is no genuine issue of material fact. The fact that the motion to resolve the summary judgment was filed ex parte did not affect its validity, especially since petitioners had already filed an opposition and twice moved for reconsideration of the summary judgment itself. On the delay of the case: The Court observed that the case had been pending for nine years since its filing on October 7, 1991. It emphasized that further delay should be avoided in the interest of justice and speedy disposition of cases, especially since the petitioners admitted their liability.
Main Doctrine
A trial court cannot, apart from reconsidering its decision, granting new trial or allowing a relief from judgment, review much less set aside a judgment on the merits. Such power pertains exclusively to the appellate courts. Once a judgment attains finality, it becomes the ministerial duty of the trial court to order its execution.