G.R. No. 180105 , April 23, 2014
SPS. DAVID ESERJOSE and ZENAIDA ESERJOSE, Petitioners, vs. ALLIED BANKING CORPORATION and PACITA UY, Respondents.

FACTS

Petitioners Spouses Eserjose filed a complaint against respondents Allied Banking Corporation (ABC) and its manager Pacita Uy. The Regional Trial Court (RTC) ruled in favor of the Eserjoses, ordering ABC and Uy to jointly and severally pay moral damages of ₱4 million, exemplary damages of ₱4 million, and attorney’s fees of ₱50,000. The RTC later denied ABC and Uy’s appeal for being filed out of time and issued a writ of execution. The sheriff levied and sold three of ABC’s properties at public auction to the Eserjoses for ₱8,048,000 to satisfy the judgment. ABC and Uy elevated the case to the Supreme Court ( G.R. No. 161776 ). While the execution sale had already taken place, the Supreme Court subsequently issued a Resolution modifying the RTC decision by reducing the moral and exemplary damages to ₱2 million each, for a total award of ₱4,050,000 (including attorney’s fees). The Eserjoses then filed a motion for a writ of possession for the three lots, as the redemption period had lapsed. ABC opposed and moved to annul the certificate of sale. The RTC granted the writ of possession but only for two of the lots, finding their total market value (₱5,537,780) sufficient to cover the reduced judgment award. Both parties filed motions for reconsideration, which were denied. ABC filed a petition for certiorari with the Court of Appeals (CA). The CA set aside the RTC’s orders, ruling against the consolidation of titles and turnover of possession to the Eserjoses. The Eserjoses filed the present petition.

ISSUE

Whether the Court of Appeals erred in reversing the RTC ruling that allowed the consolidation of ownership and turnover of possession of the two lots to the Eserjoses, thereby allowing ABC and Uy to satisfy the monetary award by cash payment instead.

RULING

The Supreme Court affirmed the Decision of the Court of Appeals. The Court held that the RTC committed grave abuse of discretion in not ordering restitution after the executed judgment was partially reversed by the Supreme Court’s modification reducing the award. Section 5, Rule 39 of the Rules of Court applies, which provides that when an executed judgment is reversed or annulled, the trial court may issue orders of restitution as equity and justice may warrant. Here, the execution was based on a judgment debt of ₱8,050,000, but the final amount due was only ₱4,050,000. The RTC exceeded its jurisdiction by adding interest to the damages in execution when the judgments did not award any. Since the registration of titles and turnover of possession to the Eserjoses had not yet been completed, there was no legal impediment to allowing ABC to satisfy the reduced judgment debt in cash, which is the preferred mode of satisfying a money judgment. The CA correctly set aside the RTC’s orders and allowed respondents to pay the monetary award of ₱4,050,000 plus costs in cash.