FGU Insurance Corporation v. Regional Trial Court of Makati City, Branch 66
REITERATIONFacts
The Antecedents: G.P. Sarmiento Trucking Corporation (GPS) was contracted to transport thirty (30) units of refrigerators. The truck carrying the cargo collided with another vehicle, damaging the appliances. FGU Insurance Corporation (FGU), as insurer, paid the insured (Concepcion Industries, Inc. - CII) the value of the damaged shipment amounting to ₱204,450.00. FGU, as subrogee, sought reimbursement from GPS. Procedural History: FGU filed a complaint for damages and breach of contract of carriage. The Regional Trial Court (RTC) initially granted GPS's demurrer to evidence, ruling that FGU failed to prove GPS was a common carrier or that its driver was negligent. The Court of Appeals (CA) affirmed the RTC's ruling. This Court, however, reversed the CA and RTC as regards GPS, holding it liable under the doctrine of culpa contractual for the value of the damaged cargoes. The Petition: After the Supreme Court's decision became final and executory, FGU filed a motion for execution with the RTC. GPS opposed, alleging that CII had turned over the damaged refrigerators to FGU, which FGU then sold to third parties, thereby unjustly enriching itself. GPS contended that FGU should not be allowed to recover twice. The RTC granted GPS's motion to set the case for hearing to determine the issues of turnover and salvage value, prompting FGU to file a petition for mandamus with the Supreme Court.
Issue(s)
Whether the Regional Trial Court unlawfully neglected its duty by re-opening a case whose decision had already attained finality. Whether the Regional Trial Court unlawfully neglected its ministerial duty by denying the issuance of a writ of execution.
Ruling
The petition for mandamus is dismissed. The Regional Trial Court did not err in setting a hearing to determine whether the execution of the judgment would result in unjust enrichment, given the allegations of subsequent events that could affect the execution of the final judgment.
Ratio Decidendi
On the issue of whether the RTC unlawfully neglected its duty by re-opening a final and executory case: The Court reiterated the fundamental rule that a final and executory judgment is immutable and unalterable. However, it acknowledged exceptions to this doctrine, including circumstances that transpire after the finality of the decision rendering its execution unjust and inequitable. The Court cited cases like City of Butuan vs. Ortiz and Candelario v. Cañizares, which allowed modification or suspension of execution based on new facts. In this case, GPS's contention that FGU may have already recovered the value of the refrigerators through sale after a supposed turnover presented a circumstance that could render execution unjust. Therefore, the RTC's act of setting a hearing to clarify these issues was not an unlawful neglect of duty but a necessary step to ensure substantial justice and prevent unjust enrichment, aligning with the exceptions to the immutability of judgment. On the issue of whether the RTC unlawfully neglected its ministerial duty by denying the issuance of a writ of execution: While the general rule is that a writ of execution must issue as a matter of right once a judgment is final and executory, this duty is not absolute when equitable considerations arise. The Court found that the RTC's order to hear the case was not a denial of the writ but a necessary prelude to its issuance, contingent upon the resolution of whether FGU would be unjustly enriched. The allegations by GPS, supported by a certification from CII's manager, indicated a potential turnover of the refrigerators to FGU and subsequent sale. If proven, this would mean FGU might have already recovered the loss or even profited from the sale. To allow execution without investigating these claims would violate the principle against unjust enrichment, which the Court has consistently held as a ground to temper the strict application of the immutability of judgment. Thus, the RTC's action was a judicious exercise of its equity jurisdiction to ensure that the execution of the judgment would be just and equitable.
Main Doctrine
A writ of mandamus lies to compel a judge to issue a writ of execution when the judgment has become final and executory, as the issuance thereof becomes a ministerial duty. However, exceptions exist where circumstances transpire after finality rendering execution unjust, such as when the prevailing party has already recovered the loss through other means, preventing unjust enrichment.