In Spouses Ricardo and Elena Golez v. Spouses Carlos and Amelita Navarro, the Supreme Court clarified that a writ of execution must strictly adhere to the dispositive portion of the judgment it seeks to enforce. The Court emphasized that any deviation from the specific terms outlined in the judgment, particularly concerning monetary awards, renders the execution invalid. This ruling underscores the importance of aligning the execution process with the precise directives of the court’s decision to ensure fairness and prevent the imposition of obligations not explicitly stated in the original judgment. The case also clarifies when and how interest should be applied to monetary awards in legal disputes.

Agency Agreements and the Limits of Execution: When is an Order Null?

The case began with an agreement between Spouses Ricardo and Elena Golez (petitioners) and Amelita Navarro (respondent), a real estate dealer. In October 1993, the Golez spouses appointed Navarro as their exclusive agent for selling their property in Molave, Zamboanga del Sur, valued at P600,000.00. The agreement stipulated that if the sale price exceeded this amount, Navarro would receive a commission equal to 90% of the excess. Navarro found an interested buyer, the Church of Jesus Christ of Latter Day Saints (Mormons). However, the sale initially fell through due to disagreements over a selling price of P1,200,000.00. Subsequently, the Golez spouses took over negotiations and successfully sold the property to the Mormons for P800,000.00 without informing Navarro or paying her any commission.

Upon discovering the transaction, Navarro demanded her commission, but the Golez spouses refused. This led to a complaint filed by Navarro and her husband, Carlos, against the Golez spouses with the Regional Trial Court (RTC) of Molave, Zamboanga del Sur, for collection of sum of money, breach of contract and damages. The RTC ruled in favor of the Navarros, declaring them entitled to a commission and ordering the Golez spouses to pay P280,000.00 as commission, along with moral damages and attorney’s fees. On appeal, the Court of Appeals (CA) affirmed the RTC Decision but modified it by reducing the commission to P180,000.00 and deleting the awards for moral damages and attorney’s fees. The Golez spouses then elevated the matter to the Supreme Court, which denied their petition, making the CA decision final and executory.

Following the finality of the CA decision, the Navarros filed a Motion for the Issuance of a Writ of Execution with the RTC, which was granted. The Clerk of Court issued a Writ of Execution, commanding the Golez spouses to pay P180,000.00. Subsequently, the Navarros filed a Motion for the Judicial Determination of the Monetary Awards subject for Execution, arguing that the writ failed to include a 12% per annum interest on the commission from the date of the property sale as initially stipulated in the RTC decision. The RTC then issued an order explicitly including the interest, resulting in a total monetary award of P504,000.00. The Golez spouses moved for reconsideration, contending that the order of execution varied the CA’s judgment by awarding more than what was decreed.

The Supreme Court addressed the procedural issue of whether a petition for review on certiorari under Rule 45 was the correct remedy. The Court acknowledged that orders granting execution are typically interlocutory and should be challenged via a petition for certiorari under Rule 65. However, an exception exists when the writ of execution varies the judgment. In such cases, an appeal is considered a proper remedy to ensure justice and equity. The Court also has the discretion to treat an appeal as a petition for certiorari and vice versa, in the interest of justice. The Supreme Court found that the RTC’s order of execution indeed varied the final and executory CA Decision, which only provided for the award of a commission of P180,000.00 without any mention of interest.

According to the Supreme Court, the critical point of contention was whether the RTC’s order of execution, which commanded the payment of P504,000.00, aligned with the CA’s decision. The Supreme Court emphasized that the writ of execution must conform substantially to every essential detail of the judgment, particularly the dispositive portion. The dispositive portion of the CA Decision clearly stated that the Golez spouses were ordered to pay P180,000.00, with no additional conditions or qualifications regarding interest. The Supreme Court interpreted the phrase “[i]n its other aspects, the appealed decision shall remain undisturbed” as referring to sections not modified by the CA, such as the payment of costs and the issuance of a writ of attachment, not to the commission award itself.

The Court cited the case of Solidbank Corp. v. Court of Appeals to highlight that a trial court cannot impose additional obligations not specified in the judgment. To do so would vary the judgment’s tenor and unjustly increase the liability of the obligor. The Supreme Court found that the RTC had exceeded its authority by misinterpreting the CA’s decision, which was explicit and unambiguous in its terms. It would be inequitable for the Golez spouses to pay, and for the Navarros to receive, more than what the CA awarded, especially since the Navarros did not appeal the CA’s decision or question the deletion of the 12% per annum interest. As the dispositive portion of the CA Decision made no mention of the 12% interest, the RTC’s order to include it in the execution was a variation of the judgment and, therefore, a nullity. The Court has consistently held that an order of execution that varies or exceeds the terms of the judgment is invalid.

Building on this principle, the Supreme Court clarified the application of interest in this case, referring to the doctrine laid down in Eastern Shipping Lines, Inc. v. Court of Appeals. While the RTC’s imposition of 12% interest from the date of sale (November 9, 1994) was incorrect, the Court noted that interest is still warranted from the finality of the decision until the judgment is satisfied. The CA’s decision became final and executory when the Supreme Court affirmed it in G.R. No. 178648 and denied the motion for reconsideration on February 28, 2009. As such, the interest should be computed from this date.

According to Eastern Shipping Lines, Inc., when an obligation is breached, an interest on the amount of damages may be imposed at the court’s discretion at 6% per annum. However, when a judgment awarding a sum of money becomes final and executory, the interest rate is 12% per annum from finality until satisfaction, as the interim period is considered equivalent to a forbearance of credit. The Supreme Court, therefore, granted the petition and nullified the order of execution and alias writ of execution issued by the RTC. The RTC was ordered to issue an alias writ of execution, directing the Golez spouses to pay the Navarros P180,000.00, with 12% interest from February 28, 2009, until fully paid.

FAQs

What was the key issue in this case?	The key issue was whether the order of execution issued by the RTC varied the terms of the final and executory CA Decision regarding the monetary award to be paid by the Golez spouses to the Navarros.
What did the Court of Appeals decide in the case?	The Court of Appeals modified the RTC Decision by reducing the commission payable to Amelita Navarro to P180,000.00 and deleting the awards for moral damages and attorney’s fees.
Why did the Supreme Court nullify the RTC’s order of execution?	The Supreme Court nullified the RTC’s order because it included a 12% per annum interest from the date of the property sale, which was not specified in the dispositive portion of the CA Decision.
When did the Supreme Court say interest should be applied?	The Supreme Court clarified that interest should be applied at 12% per annum from the date the CA Decision became final and executory (February 28, 2009) until the judgment is fully satisfied.
What is the significance of the dispositive portion of a court decision?	The dispositive portion of a court decision is the operative part that specifies what the court orders. A writ of execution must strictly conform to this portion to be valid.
What is the effect of a writ of execution that varies the judgment?	A writ of execution that varies or exceeds the terms of the judgment is considered a nullity and is therefore invalid and unenforceable.
What was the original agreement between the parties?	The agreement was that Amelita Navarro would be the exclusive agent for selling the Golez spouses’ property, with a commission of 90% of any amount exceeding the initial price of P600,000.00.
What legal principle did the Supreme Court emphasize in its decision?	The Supreme Court emphasized that a writ of execution must strictly adhere to the dispositive portion of the judgment it seeks to enforce.

This case serves as a reminder of the importance of aligning the execution process with the explicit directives of a court’s decision. Any deviation can lead to the invalidation of the execution order. Furthermore, the clarification on when interest begins to accrue provides valuable guidance for future cases involving monetary awards.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Spouses Ricardo and Elena Golez, Petitioners, vs. Spouses Carlos and Amelita Navarro, Respondents., G.R. No. 192532, January 30, 2013