Ventanilla Enterprises v. Velasco
REITERATIONFacts
1. The Antecedents: O. Ventanilla Enterprises Corporation (petitioner) leased two properties to Alfredo S. Tan and Adelina S. Tan (the Tans). The Tans failed to comply with the lease terms, leading petitioner to file a complaint for cancellation and termination of the lease with the Regional Trial Court (RTC). The RTC ruled in favor of petitioner, ordering the Tans to surrender possession, pay P4,297,004.84 plus interest, P250,000.00 as exemplary damages, liquidated damages, forfeit the deposit, and pay attorney's fees and costs. 2. Procedural History: The Tans appealed the RTC decision. Petitioner's motion for execution pending appeal was granted, leading to the levy of several properties and bank accounts. The Tans paid P9,073,694.76, which petitioner acknowledged as full satisfaction. The Court of Appeals (CA) dismissed Alfredo Tan's appeal but partially granted Adelina Tan's appeal, deleting exemplary damages and attorney's fees and reducing liquidated damages to 25% of unpaid rentals. This CA decision became final and executory on November 21, 2002. Subsequently, Adelina Tan filed a motion for execution with the RTC for a refund of excess payments. Petitioner filed an Omnibus Motion with the CA seeking to recall the entry of judgment and reconsider its decision, arguing its counsel had died and the case was moot. The CA denied this motion, and a subsequent motion for reconsideration was also denied. Petitioner's separate petition for certiorari assailing the RTC's order for alias writ of execution was also dismissed by the CA. 3. The Petition: This case is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, challenging the CA's Resolutions dated May 24, 2007, which refused to recall its entry of judgment, and October 19, 2007, which denied petitioner's motion for reconsideration. Petitioner argues that the CA decision did not attain finality because its counsel died before receiving notice, and that the payment made constituted a settlement. The Supreme Court found these arguments tenuous, emphasizing the petitioner's duty to inform the court of counsel's death and noting that execution pending appeal does not bar appeals on the merits, nor does it constitute a compromise agreement.
Issue(s)
Whether the Court of Appeals erred in refusing to recall its entry of judgment despite the death of petitioner's counsel. Whether the trial court erred in ordering the issuance of a writ of execution for the refund of excess amounts paid by private respondent, and whether the payment made by private respondent constituted a compromise settlement that terminated the case.
Ruling
The petition is DENIED for utter lack of merit. The Court of Appeals did not err in refusing to recall the entry of judgment, and the trial court correctly ordered the refund of excess amounts paid by private respondent.
Ratio Decidendi
On the refusal to recall the entry of judgment: The Court held that the CA was correct in ruling that there was no extraordinary circumstance warranting a recall of the entry of judgment. The petitioner's assertion that its former counsel's death prior to the CA Decision's promulgation prevented proper notification was deemed too tenuous. The Court reiterated the principle that it is the party's duty to inform the court of its counsel's demise and to have a substitution made; failure to do so is considered negligence on the part of the party. The Court emphasized that courts are not tasked with monitoring the circumstances of parties and their counsel. Therefore, service of the CA Decision at the counsel's last known address was considered sufficient notice, and the case became final and executory when no motion for reconsideration or appeal was filed within the reglementary period. The essence of due process, which is the opportunity to be heard, was satisfied as the petitioner had the opportunity to participate but failed to do so, thus waiving or forfeiting that right. On the trial court's order for refund and the alleged compromise settlement: The Court found the petitioner's insistence that the payment of ₱9,073,694.76 constituted a compromise settlement to be without merit. Firstly, execution pending appeal does not bar the continuance of the appeal on the merits, as the Rules of Court provide for restitution according to equity if the executed judgment is reversed on appeal. Secondly, the payment was made in compliance with the writ of execution pending appeal, not as a compromise agreement, as evidenced by private respondent's active pursuit of her appeal which resulted in a reduced award. The Court cited Section 5, Rule 39 of the Rules of Court, which explicitly allows the trial court, on motion, to issue orders of restitution or reparation of damages when an executed judgment is reversed totally or partially. Therefore, the RTC's action in ordering the refund of the excess amount paid by private respondent, in accordance with the CA's final ruling that petitioner was not entitled to such excess, was in accordance with the Rules and principles of equity and justice.
Main Doctrine
A party's failure to notify the court of its counsel's demise and have a substitution made renders service of court processes at the counsel's last known address valid, and the subsequent judgment final and executory if no appeal or reconsideration is filed within the reglementary period. The principle of restitution under Rule 39, Section 5 of the Rules of Court allows for the recovery of amounts paid pursuant to an execution pending appeal if the judgment is reversed or modified on appeal.