Development Bank of the Philippines v. Union Bank of the Philippines
REITERATIONFacts
The Antecedents: Union Bank of the Philippines (Union Bank) filed a complaint against Development Bank of the Philippines (DBP) for collection of monthly rentals and damages. DBP claimed its liability was contingent upon being paid rentals due it under a lease agreement with Foodmasters Worldwide, Inc. (Foodmasters). DBP filed a Third-Party Complaint against Foodmasters. Procedural History: The Regional Trial Court (RTC) ruled in favor of Union Bank. The Court of Appeals (CA) set aside the RTC decision, ordering Foodmasters to pay DBP the unpaid rentals and attorney's fees, and ordering DBP to remit 30% of the payment to Union Bank after being paid by Foodmasters. The Supreme Court denied both DBP's and Union Bank's petitions for review. The Resolution became final and executory. The Petition: Union Bank filed a Motion for Execution with the RTC. DBP also filed a Motion for Execution against Foodmasters. The RTC issued a Consolidated Order granting both motions and subsequently issued a Writ of Execution against DBP. DBP filed a Motion for Reconsideration, which was denied. DBP then filed a petition for certiorari with the Court of Appeals, which was dismissed. Hence, the instant petition for review on certiorari with the Supreme Court.
Issue(s)
Whether the Writ of Execution issued by the trial court varied or altered the final and executory decision of the Court of Appeals. Whether the Writ of Execution failed to state the amount of principal obligation and interest. Whether the trial court erred in ordering the payment of attorney's fees and litigation expenses to Union Bank out of DBP's garnished funds, despite no such award in the Court of Appeals' decision.
Ruling
The Supreme Court found merit in the petition. It nullified and set aside the Orders dated October 15, 2001 and December 5, 2001, and the Writ of Execution dated October 15, 2001 of the Regional Trial Court of Makati, Branch 58. The case was remanded to the RTC with instructions to direct Union Bank to release all funds received pursuant to the void Writ of Execution and to issue another Writ of Execution against Foodmasters Worldwide, Inc., in conformity with the Court of Appeals' Decision dated May 27, 1994.
Ratio Decidendi
On the issue of the Writ of Execution varying the decision: The Supreme Court reiterated the fundamental legal axiom that a Writ of Execution must conform strictly to the dispositive portion of the decision sought to be executed. It held that the Writ of Execution issued by the trial court was a patent nullity because it varied the terms of the Court of Appeals' decision. The CA decision clearly provided a two-step process: first, Foodmasters' payment of unpaid rentals and attorney's fees to DBP, and second, DBP's remittance of 30% of that payment to Union Bank. The Writ of Execution, however, was vague and called for immediate payment without specifying obligors or the order of proceedings, and it failed to acknowledge the two-tiered payment mechanism established by the CA. The trial court's reliance on dates and its interpretation that DBP's obligation was immediately demandable, irrespective of Foodmasters' payment, was deemed an erroneous departure from the CA's clear mandate. On the issue of the Writ failing to state the amount of principal obligation and interest: The Court noted that the Writ of Execution was vague and did not specify the amount due from each obligor or the order in which they were to be proceeded against. It also failed to clearly identify the obligee, despite the existence of two distinct obligations and obligees mentioned in the CA decision. This vagueness contributed to the Writ's nullity, as it did not strictly adhere to the terms of the judgment it sought to enforce. The CA's decision did not fully determine DBP's obligations to Union Bank, as the balance of the principal obligation could only be ascertained after the satisfaction of Foodmasters' liability. On the issue of attorney's fees and litigation expenses: The Supreme Court pointed out that the Court of Appeals' decision ordered Foodmasters to pay DBP P10,000.00 for attorney's fees, and DBP to remit 30% of the unpaid rentals to Union Bank. The Writ of Execution, however, was interpreted by the trial court to include attorney's fees and litigation expenses for Union Bank, which were not explicitly awarded to Union Bank in the CA's dispositive portion. This constituted a variation from the judgment sought to be executed, further solidifying the nullity of the Writ. The trial court's interpretation that the CA decision was fully determinative of DBP's obligations to Union Bank, including attorney's fees not awarded to Union Bank, was an error.
Main Doctrine
A Writ of Execution must conform strictly to the dispositive portion of the decision sought to be executed; otherwise, it is a patent nullity.