Florez v. UBS Marketing Corporation
REITERATIONFacts
The Antecedents: Petitioners Ban Hua Uy-Florez and Ban Ha Uy-Chua, and respondent Johnny K. Uy, along with other family members, were interlocking stockholders and officers of UBS Marketing Corporation (UBS) and Soon Kee Commercial, Inc. (Soon Kee). Following a family feud and an agreement to divide the family businesses, mutual divestments of shares occurred. Subsequently, on April 6, 1988, Johnny Uy and UBS filed a complaint against the Uy sisters and others before the Securities and Exchange Commission (SEC) for the recovery of UBS's corporate books and an accounting of funds and properties, alleging that the Uy sisters, who had control and custody of these records, failed to provide an accounting after the segregation of businesses. Procedural History: The SEC Hearing Officer initially denied the Uy sisters' motion to dismiss, and this Court affirmed that the case was an intra-corporate dispute within the SEC's jurisdiction. Following an ex-parte presentation of evidence, the SEC Hearing Officer ordered the respondents to render a full accounting. The SEC en banc modified this, setting aside the decision except for the paragraph ordering the accounting, and later clarified that the accounting should cover all responsible persons with custody of the records. The Court of Appeals (CA) reversed the SEC en banc's order and resolution, but this Court, in G.R. No. 130328, set aside the CA's decision and reinstated the SEC en banc's directives. Subsequently, the SEC en banc granted a motion for a full accounting, ordering the Uy Group to render it. The Uy Group's motion for reconsideration, seeking to include Johnny Uy and his wife in the accounting, was denied. The Uy sisters then filed a petition for certiorari with the CA, which dismissed their petition, a decision later reiterated upon denial of their motion for reconsideration. This led to the present petition. The Petition: Petitioners Ban Hua Uy-Florez and Ban Ha Uy-Chua, through a petition for review on certiorari under Rule 45 of the Rules of Court, assail the Court of Appeals' decision and resolution. They argue that the SEC en banc's July 17, 2002 order, directing them to render a full accounting, does not conform to the Supreme Court's May 31, 2000 decision in G.R. No. 130328, which they contend should have included Johnny Uy and his wife Magdalena as among those required to account. The core of their argument is that an execution order must strictly adhere to the judgment it seeks to enforce, and the SEC's July 17, 2002 order varied the tenor of the Supreme Court's decision by excluding Johnny Uy and Magdalena, who were deemed responsible officers by the SEC en banc's June 24, 1996 resolution, which was reinstated by this Court.
Issue(s)
Whether the SEC en banc's July 17, 2002 Order, directing the petitioners and Roland King to render an accounting, conforms with this Court's May 31, 2000 Decision in G.R. No. 130328, which reinstated the SEC en banc's Order dated December 21, 1995, and Resolution dated June 24, 1996. Whether the Court of Appeals erred in affirming the SEC en banc's July 17, 2002 Order, which allegedly varied the tenor of the final and executory judgment.
Ruling
The petition is meritorious. The assailed Decision and Resolution of the Court of Appeals are set aside. The SEC is directed to execute its Resolution of June 24, 1996 strictly in accordance with its terms. Any writ of execution not in conformity with such resolution is declared a nullity and shall be recalled.
Ratio Decidendi
On the conformity of the execution order to the judgment: The Court reiterated the settled legal principle that a writ of execution must adhere to every essential particular of the judgment sought to be executed and cannot alter or go beyond its terms. An order of execution that varies the tenor of the judgment is a nullity. In this case, the Court's May 31, 2000 Decision reinstated the SEC en banc's Order of December 21, 1995, and its Resolution of June 24, 1996. The SEC en banc's July 17, 2002 Order, which served as the execution order, was found to have strayed from and varied the final and executory disposition in SEC AC No. 520 (SEC Case No. 3328), as embodied in the December 21, 1995 Order, as modified by the June 24, 1996 Resolution. Therefore, the July 17, 2002 Order was declared a nullity. On the interpretation of the SEC en banc's Resolution of June 24, 1996 and the CA's alleged error: The Court emphasized that the SEC en banc's Resolution of June 24, 1996, clearly modified its earlier December 21, 1995 Order. The June 24, 1996 Resolution expanded the scope of the accounting directive to include "all responsible persons and/or officers who may now have custody or possession of the books and records of the corporation." This modification was intended to ensure a full and complete accounting, making it effective. The Court found that the SEC en banc's July 17, 2002 Order failed to consider this modificatory resolution, thereby varying the tenor of the judgment. The Court rejected the CA's observation that the responsible officers could only refer to those under the petitioners' control, excluding Johnny K. Uy, as this stemmed from a misreading of the SEC issuances and this Court's prior ruling. The Court stressed that the June 24, 1996 Resolution explicitly stated that if Johnny Uy was an accountable officer, he should be included, as excluding him would render the accounting ineffective. Johnny Uy and his wife, as former President and Treasurer, respectively, fit this category of responsible officers.
Main Doctrine
A writ of execution must strictly adhere to the terms of the judgment it seeks to enforce; it cannot alter or go beyond the judgment. An execution order that varies the tenor of the judgment is a nullity.