WHICH MAKE THE EXECUTION INEQUITABLE. (Supervening Fact Doctrine)
One of the most important exceptions is the first one: When there has been a change in the situation of the parties which make the execution inequitable. Meaning, from the time na nagkaroon ng final judgment up to the present, there has been a change in the situation of the parties so that if we will execute, the judgment becomes inequitable already. So, this is just another way of saying that there has been a SUPERVENING EVENT that happened which makes execution inequitable.
EXAMPLE: There was a case where A filed a case to eject B from his property and B lost the case
it, bought the property. The owner now is B. But there is a final judgment ejecting him. Now, shall we insist on the judgment ejecting B? No because B is now the owner. The fact that B became the owner is a supervening event.
PHIL. VETERANS BANK (PVB) vs. IAC 178 SCRA 645
NOTE: There was a time before that the PVB was closed for 5 to 6 years because I think they have some problems. So the Central Bank has to take over. The Central Bank has ordered to stop the operation – placed under receivership, the Central Bank will control.
Now under the Central Bank Law, once the Central Bank takes over the control of a private bank, all its assets has to be preserved. No assets will be sold or disposed of.
FACTS: There was somebody who sued PVB, and PVB lost. So there was a judgment which became final. And the winner asked the court to execute. Practically, you have to levy on the property of the bank. In the meantime, the PVB was placed under receivership, where under the law, it cannot be disposed of because it is under the control of the Central Bank.
ISSUE: Can the prevailing party insist on the enforcement of the judgment and get and levy the property of the PVB?
HELD: NO. The placement of the bank under receivership is a SUPERVENING EVENT.
“Once a decision has become final and executory, it is the ministerial duty of the court to order its execution, admits certain exceptions. The fact that petitioner is placed under receivership is a supervening event that renders a judgment notwithstanding its finality unenforceable by attachment or execution.”
SAMPAGUITA GARMENTS CORP. vs. NLRC 233 SCRA 260
FACT: An employee was terminated by his employer on the ground of theft. He stole company property. The management filed also a case of theft against the employee. But in the meantime the employee also filed a labor case against the employer for illegal dismissal and prayed for reinstatement with back wages. After hearing, the NLRC ruled that there was illegal termination and ordered the reinstatement of the employee and payment of backwages. The NLRC decision became final. In the meantime, the accused was convicted in the criminal case for theft and ordered to go to prison.
ISSUE: What happens now to the final judgment of the NLRC reinstating the employee?
HELD: “An employee’s conviction for theft, which was affirmed by the RTC and the CA, is a SUPERVENING CAUSE that renders unjust and inequitable the NLRC decision mandating the employee’s reinstatement with backwages.”
Take note however that for the supervening event to apply, the supervening event must happen after the judgment has become final and executory. Not that the supervening event happened while the case was going on. If the case is going on and something happened which you believe would make the decision against you unfair, your duty is to bring it to the attention of the court so that the court deciding the case would take that into consideration. In the case of
VALENSONA vs. COURT OF APPEALS 226 SCRA 36
HELD: “While the rule is that a stay of execution of a final judgment may be authorized if necessary to accomplish the ends of justice, as for instance, where there has been a change in the situation of the parties which makes such execution inequitable, nevertheless the said rule cannot be invoked when the supposed change in the circumstances of the parties took
place while the case was pending, for the reason that there was then no excuse for not bringing to the attention of the court the fact or circumstance that affects the outcome of the case.”
The ruling in VALENZOLA was reiterated in
ABOITIZ vs. TRAJANO 278 SCRA 387 [1997]
HELD: “We are of course well aware of the rule authorizing the court to modify or alter a judgment even after the same has become executory, whenever circumstances transpire rendering its execution unjust and inequitable. However, this rule, we must emphasize, applies only to cases where the facts or circumstances authorizing such modification or alteration transpired after the judgment has become final executory.”
[3] WHEN THE JUDGMENT WAS NOVATED BY SUBSEQUENT AGREEMENT.
QUESTION: Can the parties enter into a compromise agreement when there is already a decision?
ANSWER: YES. Compromise agreement is welcome anytime – before the case is filed, while the case is going on, while the case is on appeal.
Q: Now suppose there is a decision in my favor against you and then you approach me and say,
“Pwede ba pag-usapan na lang natin ito?” “Sige okay.” Then we arrive at another agreement which we signed, where the agreement is different from the decision in my favor. Can it be done?
A: Yes, I can waive my rights under the judgment. There is now a new agreement between us.
Q: Can I execute on the original judgment?
A: No more, because the new agreement novated the judgment. Take note that in case of novation, the new obligation must be totally incompatible with the first obligation.
A related question:
Q: Can one court by injunction or restraining order stop the execution of a judgment of another court?
A: GENERAL RULE: NO, because that will amount to interference.
EXCEPTIONS:(when the enforcement of a final judgment may be stopped by way of injunction) 1.) Rule 38, Section 5:
Rule 38, Section 5: Preliminary injunction pending proceedings. – The court in which the petition is filed, may grant such preliminary injunction as may be necessary for the preservation of the rights of the parties, upon the filing by the petitioner of a bond in favor of the adverse party, conditioned that if the petition is dismissed or the petitioner fails on the trial of the case upon the merits, he will pay the adverse party all damages and costs that may be awarded to him by reason of the issuance of such injunction or the other proceedings following the petition; but such injunction shall not operate to discharge or extinguish any lien which the adverse party may have acquired upon the property of the petitioner.
In effect, there is a final and executory judgment but the court will issue an injunction to stop this enforcement because of the pendency of a petition for relief from judgment.
2.) When there is an action for annulment of judgment of the RTC filed in the CA.
The CA may issue a writ of preliminary injunction – annulment of judgment, certiorari, or
will issue a preliminary injunction to stop the RTC from enforcing its judgement pending the resolution of whether its judgement was rendered in excess or without jurisdiction.
So, those are the exceptions.