Aguilar v. Manila Banking Corporation
REITERATIONFacts
The Antecedents: Spouses Manuel A. Aguilar and Yolanda C. Aguilar (petitioners) obtained a P600,000.00 loan from The Manila Banking Corporation (respondent) in 1979, secured by a real estate mortgage. Upon failure to pay, the property was extra-judicially foreclosed, and respondent was the winning bidder in 1982. Instead of redeeming the property, petitioners filed a complaint for annulment of the foreclosure sale. A compromise agreement was entered into on January 23, 1987, wherein petitioners admitted the validity of the foreclosure and agreed to purchase the property for P2,548,000.00, payable in installments. Petitioners failed to pay the balance, prompting respondent to file a motion for execution of the compromise agreement on October 20, 1989. The RTC granted the writ of execution on November 28, 1989. Petitioners sought deferment, which was granted until July 31, 1990, but no settlement was reached. Respondent again moved for execution on December 2, 1991, which was granted. Petitioners then filed a motion to recall the writ, claiming novation by a letter from respondent's Statutory Receiver dated June 7, 1991, which proposed an installment payment plan with a reduced interest rate. Respondent countered that the letter was a mere accommodation and did not novate the agreement. Petitioners continued to file dilatory motions and sought inhibition of judges. Procedural History: The RTC, after several inhibitions and re-raffling of the case, eventually denied petitioners' omnibus motion to quash the writ of execution and motion for contempt on May 24, 2002, holding that there was no novation, the delays were caused by petitioners, and the judgment could still be executed by motion. The CA dismissed petitioners' petition for certiorari, holding that the delays occasioned by petitioners interrupted the five-year period for execution by motion. The Petition: Petitioners filed a petition for review on certiorari with the Supreme Court, assailing the CA's decision and resolution, arguing prescription, novation, and inequity of the acceleration clause.
Issue(s)
Whether the execution of the decision based on the compromise agreement is barred by prescription. Whether the Letter dated June 7, 1991, from respondent's Statutory Receiver novated the compromise agreement. Whether the circumstances surrounding respondent's receivership rendered the execution of the judgment unjust or impossible. Whether the equities of the case favor the petitioners. Whether the petition for certiorari before the CA should have been dismissed for failure to file a motion for reconsideration.
Ruling
The Supreme Court denied the petition for review on certiorari, affirmed the decision and resolution of the Court of Appeals, lifted the status quo order, and directed the RTC to issue the writ of execution. Triple costs were imposed against petitioners.
Ratio Decidendi
On the issue of prescription and the 'law of the case': The Court ruled that petitioners are barred from raising the issue of prescription of execution by mere motion under the principle of 'law of the case.' This principle dictates that whatever is irrevocably established as the controlling legal rule or decision between the same parties in the same case continues to be the law of the case. The RTC's Order dated March 20, 2000, which denied petitioners' claim of prescription, became final and executory when this Court dismissed their previous petition (G.R. No. 144719). Therefore, the question of prescription was settled with finality and could no longer be resurrected. The Court also found that petitioners engaged in a permutation of forum shopping by repeatedly seeking inhibitions of judges and having the case re-raffled to different branches of the RTC, thereby attempting to obtain a ruling more favorable than that of a previous branch, despite the finality of the earlier resolution. This practice trifles with the courts and abuses their processes. On the arguments of novation: The Court held that the claim of novation, first raised in a motion to recall the writ, was not pursued and was deemed abandoned. The Court reiterated that novation is never presumed and requires clear intent, which was absent here, as the letter merely provided a more liberal payment scheme and reduced interest, without extinguishing the original obligation. On the arguments of receivership: The Court clarified that a receiver is obliged to collect debts owing to the bank, thus petitioners' obligation to pay interest subsisted. The argument regarding the receivership was raised fourteen years after the bank was placed under receivership. On the arguments of inequity of the acceleration clause and the overall conduct of the petitioners: The Court held that the argument regarding the inequity of the acceleration clause was raised as a mere afterthought and was belatedly invoked. Petitioners failed to raise the inequity of the acceleration clause at the earliest opportunity, having only brought it up before the CA. The Court condemned the petitioners' actions as a clear devise to perpetually forestall execution of a final and executory decision, constituting an outrageous abuse of the judicial process. The Court reminded counsel of their duty to advise clients on the merit of their cases and to resist their propensity to litigate when the cause is defenseless. They also failed to comply with the terms of the Letter dated June 7, 1991, negating their claim of judicial compassion. On the procedural issue of failure to file a motion for reconsideration: The Court held that the petition for certiorari before the CA should have been dismissed outright because petitioners failed to file a motion for reconsideration of the RTC Omnibus Order dated May 24, 2002. The Court emphasized that a motion for reconsideration is a condition sine qua non to the institution of a special civil action for certiorari, and petitioners failed to provide sufficient justification for dispensing with this requirement.
Main Doctrine
A litigant cannot profit from the delays they deliberately caused to escape the satisfaction of their admitted obligation. The principle of 'law of the case' bars the resurrection of issues already settled with finality. Furthermore, the failure to file a motion for reconsideration before filing a petition for certiorari is a procedural faux pas that warrants dismissal, unless exceptions apply.