Mahusay v. B.E. San Diego, Inc.
REITERATIONFacts
The Antecedents: Petitioners spouses Juanito and Francisca Mahusay purchased several lots from respondent B.E. San Diego, Inc. under two Contracts to Sell. Petitioners failed to pay the monthly amortizations since October 1978, leading respondent to file a case for cancellation of contracts, which was dismissed. Subsequently, the parties entered into a Compromise Agreement in October 1989, which petitioners again failed to comply with. This prompted respondent to file a Complaint for Specific Performance with the Regional Trial Court (RTC). Procedural History: The RTC ruled in favor of respondent, ordering petitioners to comply with the Compromise Agreement and pay damages and attorney's fees. Petitioners appealed to the Court of Appeals (CA), arguing that the RTC lacked jurisdiction and that the Compromise Agreement was invalid as it was signed only by Francisca Mahusay without her husband's consent. The CA upheld the RTC's jurisdiction but declared the Compromise Agreement void due to Francisca's sole signature. However, the CA affirmed the RTC's decision with modification, ordering petitioners to pay all unpaid amortizations until the expiration of the contracts to sell, deleting the award for actual damages. The CA's decision became final and executory. Respondent later filed a Motion for Clarification to include penalties and interest in the computation of unpaid amortizations, which the CA granted in a Resolution dated October 11, 2004. Petitioners moved to delete this resolution, arguing it amended the final decision. The CA denied this motion, and subsequent similar motions, culminating in the assailed Resolution of September 11, 2007. The Petition: Petitioners filed the instant petition arguing that respondent's Motion for Clarification was a belated attempt to reconsider and amend the final and executory CA Decision of December 20, 2001, in violation of the principle of immutability of judgments. They contend that the CA Resolution of October 11, 2004, unduly expanded and amended the original decision by including 12% interest per annum on unpaid amortizations, significantly increasing their liability.
Issue(s)
Whether the Court of Appeals gravely abused its discretion in issuing the Resolution dated October 11, 2004, which allegedly amended and modified its final and executory Decision dated December 20, 2001. Whether the petitioners are liable for penalties and interest on the unpaid amortizations.
Ruling
The petition is denied. The Resolution of the Court of Appeals dated September 11, 2007, is affirmed with modification. The trial court is directed to compute the unpaid balance of the purchase price of each contract, including amortizations yet to be paid until the expiration of the Contracts to Sell, with dispatch. The legal interest to be paid on said amount is TWELVE PERCENT (12%) per annum, commencing from April 18, 1990, when judicial demand was made. Another 12% interest per annum shall be paid on the amount due and owing as and from the date of finality of this Decision until full payment.
Ratio Decidendi
On the alleged amendment of the final and executory decision: The Court reiterated the settled rule that a judgment which has acquired finality becomes immutable and unalterable, except for the correction of clerical errors. However, clarification after final judgment is allowed when it involves a clerical error, not a correction of an erroneous judgment. Where there is an ambiguity caused by an omission or mistake in the dispositive portion, the court may clarify such ambiguity, mistake, or omission by an amendment, resorting to the pleadings and the body of the decision. In this case, the CA's Resolution of October 11, 2004, was a clarification, not an amendment, of its December 20, 2001 Decision. The motion for clarification did not seek to alter the substance of the original ruling but to resolve the ambiguity regarding the inclusion of penalties and interest, which were implicitly part of the unpaid amortizations as per the Contracts to Sell. The petitioners' persistent violations and delay in payments provided a compelling reason for the CA to clarify its original Decision to include these stipulated payments, preventing unjust enrichment. On the liability for penalties and interest: The Court found no reversible error in the CA's clarification. The petitioners never denied the execution of the Contracts to Sell nor admitted their liability for the unpaid amortizations. The contractual stipulation for monthly amortizations was binding and enforceable. The CA's original decision, while nullifying the Compromise Agreement, held petitioners liable for all unpaid amortizations, including those yet to be paid. The silence of the original decision on interest/penalty for delay led to the Motion for Clarification. The Court found it lawful for the CA to clarify its decision to include the payment of all penalties and interest due on the unpaid amortizations, as provided in the contracts, since the validity of the contracts was never questioned and the stipulations were not contrary to law, morals, public order, or public policy. The Court emphasized that it would be grossly unfair for the respondent to be deprived of the amount it would have received from the sale of the properties while petitioners benefited from their use and continued possession without full payment, which would amount to unjust enrichment. Therefore, it was just, fair, and equitable for petitioners to pay interest/penalty for the delay in their payments.
Main Doctrine
A motion for clarification of a final and executory judgment is permissible to resolve ambiguities or omissions in the dispositive portion, provided it does not alter the substance of the original ruling. The inclusion of penalties and interest due on unpaid amortizations, as stipulated in the contracts to sell, can be clarified even after finality if the original decision was silent on these aspects, to prevent unjust enrichment.