G.R. No. L-52807, February 29, 1984
JOSE ARAÑAS and LUISA QUIJENCIO ARAÑAS, Petitioners, vs. HON. EDUARDO C. TUTAAN, as Judge of the Court of First Instance of Quezon City, and UNIVERSAL TEXTILE MILLS, INC., Respondents.

FACTS

In a 1971 decision, the Court of First Instance declared petitioner Luisa Quijencio Arañas the owner of 400 shares of stock in respondent Universal Textile Mills, Inc. (UTEX) and ordered UTEX to cancel the old certificates issued in the names of defendants Castañeda and Manuel and issue new ones in her name. Upon UTEX’s motion for clarification, the court specified that its judgment obligated UTEX to pay to Arañas the cash dividends accruing to the shares after the rendition of the 1971 decision. UTEX did not appeal this clarified judgment, which became final and executory as against it. The case proceeded separately against the other defendants, Castañeda and Manuel, whose appeal was ultimately denied by the Supreme Court in 1979.
Upon finality, the trial court issued a writ of execution in 1979, directing UTEX to cancel the old stock certificates and to pay Arañas cash dividends from 1972 to 1979. UTEX filed a motion for partial reconsideration, arguing it had already paid those dividends to Castañeda and Manuel, who were still the registered stockholders at the time. The respondent judge granted UTEX’s motion in an order dated January 4, 1980, absolving UTEX from paying the 1972-1979 dividends to the petitioners.

ISSUE

Whether the respondent judge acted without jurisdiction or with grave abuse of discretion in issuing the January 4, 1980 order absolving UTEX from paying the cash dividends to the petitioners.

RULING

Yes. The Supreme Court granted the petition for certiorari and mandamus, setting aside the respondent judge’s order. The Court held that the 1971 judgment, as clarified, was final and executory as to UTEX. Its terms were clear: UTEX was obligated to pay all dividends accruing after the 1971 decision to the petitioners as the lawfully declared owners. UTEX’s own motion for clarification acknowledged it would “rightfully abide” by the court’s declaration of ownership. The legal logic is twofold. First, the principle of immutability of final judgments prohibits a court from altering a final judgment in any material aspect. The January 1980 order, which relieved UTEX of its adjudged obligation, constituted an unauthorized modification of a final judgment. Second, payment to the wrong party does not extinguish an obligation. UTEX’s voluntary payment of dividends to Castañeda and Manuel, despite full knowledge of the final judgment in favor of the petitioners, was made at its own peril. The burden to recover those mistaken payments rests solely on UTEX and cannot be shifted to the innocent judgment creditors, the petitioners. Execution of a final judgment is a matter of right for the prevailing party and a ministerial duty of the court. The Supreme Court thus issued a writ of mandamus commanding the respondent judge to execute the original judgment against UTEX for the payment of the cash dividends from 1972 to 1979, with interest.