8 - UP v. Dizon, GR No. 18112, 23 Aug 2012

SUPREME COURT REPORTS ANNOTATED VOLUME 679 16/07/2019, 1*18 AM
G.R. No. 171182. August 23, 2012.*
UNIVERSITY OF THE PHILIPPINES, JOSE V. ABUEVA,

RAUL P. DE GUZMAN, RUBEN P. ASPIRAS,
EMMANUEL P. BELLO, WILFREDO P. DAVID, CASIANO
S. ABRIGO, and JOSEFINA R. LICUANAN, petitioners,
vs. HON. AGUSTIN S. DIZON, in his capacity as Presiding
Judge of the Regional Trial Court of Quezon City, Branch
80, STERN BUILDERS, INC., and SERVILLANO DELA
CRUZ, respondents.
Schools; University of the Philippines; The University of the

Philippines (UP) is a government instrumentality, performing the
StateÊs constitutional mandate of promoting quality and accessible
education.·Irrefragably, the UP is a government instrumentality,
performing the StateÊs constitutional mandate of promoting quality
and accessible education. As a government instrumentality, the UP
administers special funds sourced from the fees and income
enumerated under Act No. 1870 and Section 1 of Executive Order
No. 714, and from the yearly appropriations, to achieve the
purposes laid down by Section 2 of Act 1870, as expanded in
Republic Act No.
_______________
* FIRST DIVISION.
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VOL. 679, AUGUST 23, 2012 55
University of the Philippines vs. Dizon
9500. All the funds going into the possession of the UP, including
any interest accruing from the deposit of such funds in any banking
http://central.com.ph/sfsreader/session/0000016bf6a098cbbd4214cf003600fb002c009e/p/AUE851/?username=Guest Page 1 of 47
institution, constitute a „special trust fund,‰ the disbursement of

which should always be aligned with the UPÊs mission and purpose,
and should always be subject to auditing by the COA.
Trust Funds; Words and Phrases; Presidential Decree No. 1445
defines a „trust fund‰ as a fund that officially comes in the
possession of an agency of the government or of a public officer as
trustee, agent or administrator, or that is received for the fulfillment
of some obligation.·Presidential Decree No. 1445 defines a „trust
fund‰ as a fund that officially comes in the possession of an agency
of the government or of a public officer as trustee, agent or
administrator, or that is received for the fulfillment of some
obligation. A trust fund may be utilized only for the „specific
purpose for which the trust was created or the funds received.‰
Constitutional Law; The Constitution strictly mandated that
„(n)o money shall be paid out of the Treasury except in pursuance of
an appropriation made by law.‰·Indeed, an appropriation by
Congress was required before the judgment that rendered the UP
liable for moral and actual damages (including attorneyÊs fees)
would be satisfied considering that such monetary liabilities were
not covered by the „appropriations earmarked for the said project.‰
The Constitution strictly mandated that „(n)o money shall be paid
out of the Treasury except in pursuance of an appropriation made
by law.‰
Remedial Law; Civil Procedure; Judgments; Immutability of
Final Judgments; A decision that has attained finality becomes
immutable and unalterable, and cannot be modified in any respect,
even if the modification is meant to correct erroneous conclusions of
fact and law, and whether the modification is made by the court that
rendered it or by this Court as the highest court of the land.·It is
true that a decision that has attained finality becomes immutable
and unalterable, and cannot be modified in any respect, even if the
modification is meant to correct erroneous conclusions of fact and
law, and whether the modification is made by the court that
rendered it or by this Court as the highest court of the land. Public
policy dictates that once a judgment becomes final, executory and
unappealable, the prevailing party should not be deprived of the
fruits of victory by some subterfuge devised by the losing party.
56
56 SUPREME COURT REPORTS ANNOTATED
Unjustified delay in the enforcement of such judgment sets at

naught the role and purpose of the courts to resolve justiciable
controversies with finality. Indeed, all litigations must at some time
end, even at the risk of occasional errors.
Same; Same; Same; Same; The doctrine of immutability of a
final judgment has not been absolute, and has admitted several
exceptions.·But the doctrine of immutability of a final judgment
has not been absolute, and has admitted several exceptions, among
them: (a) the correction of clerical errors; (b) the so-called nunc pro
tunc entries that cause no prejudice to any party; (c) void
judgments; and (d) whenever circumstances transpire after the
finality of the decision that render its execution unjust and
inequitable. Moreover, in Heirs of Maura So v. Obliosca, 542 SCRA
406 (2008), we stated that despite the absence of the preceding
circumstances, the Court is not precluded from brushing aside
procedural norms if only to serve the higher interests of justice and
equity. Also, in Gumaru v. Quirino State College, 525 SCRA 412
(2007), the Court nullified the proceedings and the writ of execution
issued by the RTC for the reason that respondent state college had
not been represented in the litigation by the Office of the Solicitor
General.
Same; Same; Parties; Service of Summons; Where a party has
appeared by counsel, service must be made upon such counsel.·It is
settled that where a party has appeared by counsel, service must be
made upon such counsel. Service on the party or the partyÊs
employee is not effective because such notice is not notice in law.
This is clear enough from Section 2, second paragraph, of Rule 13,
Rules of Court, which explicitly states that: „If any party has
appeared by counsel, service upon him shall be made upon his
counsel or one of them, unless service upon the party himself is
ordered by the court. Where one counsel appears for several parties,
he shall only be entitled to one copy of any paper served upon him
by the opposite side.‰
Same; Same; Procedural Rules and Technicalities; There are no

vested rights in rules of procedure.·The retroactive application of
the fresh-period rule, a procedural law that aims „to regiment or
make the appeal period uniform, to be counted from receipt of the
order denying the motion for new trial, motion for reconsideration
(whether full or partial) or any final order or resolution,‰ is

impervious to any serious challenge. This is because there are no
vested
57
VOL. 679, AUGUST 23, 2012 57
rights in rules of procedure. A law or regulation is procedural when

it prescribes rules and forms of procedure in order that courts may
be able to administer justice. It does not come within the legal
conception of a retroactive law, or is not subject of the general rule
prohibiting the retroactive operation of statues, but is given
retroactive effect in actions pending and undetermined at the time
of its passage without violating any right of a person who may feel
that he is adversely affected.
PETITION for review on certiorari of a decision of the

Court of Appeals.
The facts are stated in the opinion of the Court.
Office of Legal Services for petitioners.
Bonifacio A. Tavera, Jr. for private respondents.
BERSAMIN, J.:
Trial judges should not immediately issue writs of
execution or garnishment against the Government or any
of its subdivisions, agencies and instrumentalities to
enforce money judgments.1 They should bear in mind that
the primary jurisdiction to examine, audit and settle all
claims of any sort due from the Government or any of its
subdivisions, agencies and instrumentalities pertains to
the Commission on Audit (COA) pursuant to Presidential
Decree No. 1445 (Government Auditing Code of the
Philippines).
The Case
On appeal by the University of the Philippines and its
then incumbent officials (collectively, the UP) is the
decision promulgated on September 16, 2005,2 whereby the
Court of Ap-
_______________
1 Administrative Circular No. 10-2000 dated October 25, 2000.
2 Rollo, pp. 39-54; penned by Associate Justice Ruben T. Reyes (later
Presiding Justice and Member of the Court, but now retired),
58

peals (CA) upheld the order of the Regional Trial Court

(RTC), Branch 80, in Quezon City that directed the
garnishment of public funds amounting to P16,370,191.74
belonging to the UP to satisfy the writ of execution issued
to enforce the already final and executory judgment against
the UP.
Antecedents
On August 30, 1990, the UP, through its then President
Jose V. Abueva, entered into a General Construction
Agreement with respondent Stern Builders Corporation
(Stern Builders), represented by its President and General
Manager Servillano dela Cruz, for the construction of the
extension building and the renovation of the College of Arts
and Sciences Building in the campus of the University of
the Philippines in Los Baños (UPLB).3
In the course of the implementation of the contract,
Stern Builders submitted three progress billings
corresponding to the work accomplished, but the UP paid
only two of the billings. The third billing worth
P273,729.47 was not paid due to its disallowance by the
Commission on Audit (COA). Despite the lifting of the
disallowance, the UP failed to pay the billing, prompting
Stern Builders and dela Cruz to sue the UP and its co-
respondent officials to collect the unpaid billing and to
recover various damages. The suit, entitled Stern Builders
Corporation and Servillano R. Dela Cruz v. University of
the Philippines Systems, Jose V. Abueva, Raul P. de
Guzman, Ruben P. Aspiras, Emmanuel P. Bello, Wilfredo P.
David, Casiano S. Abrigo, and Josefina R. Licuanan, was
docketed as Civil Case No. Q-93-14971 of the Regional Trial
Court in Quezon City (RTC).4
_______________
with Associate Justice Josefina Guevara-Salonga (retired) and Associate
Justice Fernanda Lampas-Peralta concurring.
3 Id., at pp. 92-105.
4 Id., at pp. 75-83.
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After trial, on November 28, 2001, the RTC rendered its

decision in favor of the plaintiffs,5 viz.:
Wherefore, in the light of the foregoing, judgment is hereby

rendered in favor of the plaintiff and against the defendants
ordering the latter to pay plaintiff, jointly and severally, the
following, to wit:
1. P503,462.74 amount of the third billing, additional
accomplished work and retention money;
2. P5,716,729.00 in actual damages;
3. P10,000,000.00 in moral damages;
4. P150,000.00 and P1,500.00 per appearance as attorneyÊs fees;
and
5. Costs of suit.
SO ORDERED.
Following the RTCÊs denial of its motion for

reconsideration on May 7, 2002,6 the UP filed a notice of
appeal on June 3, 2002.7 Stern Builders and dela Cruz
opposed the notice of appeal on the ground of its filing
being belated, and moved for the execution of the decision.
The UP countered that the notice of appeal was filed within
the reglementary period because the UPÊs Office of Legal
Affairs (OLS) in Diliman, Quezon City received the order of
denial only on May 31, 2002. On September 26, 2002, the
RTC denied due course to the notice of appeal for having
been filed out of time and granted the private respondentsÊ
motion for execution.8
The RTC issued the writ of execution on October 4,
2002,9 and the sheriff of the RTC served the writ of
execution and notice of demand upon the UP, through its
counsel, on Octo-
_______________
5 Id., at pp. 133-138.
6 Id., at p. 162.
7 Id., at pp. 163-164.
8 Id., at pp. 169-171.
9 Id., at pp. 172-173.
60

ber 9, 2002.10 The UP filed an urgent motion to reconsider

the order dated September 26, 2002, to quash the writ of
execution dated October 4, 2002, and to restrain the
proceedings.11 However, the RTC denied the urgent motion
on April 1, 2003.12
On June 24, 2003, the UP assailed the denial of due
course to its appeal through a petition for certiorari in the
Court of Appeals (CA), docketed as CA-G.R. No. 77395.13
On February 24, 2004, the CA dismissed the petition for
certiorari upon finding that the UPÊs notice of appeal had
been filed late,14 stating:
Records clearly show that petitioners received a copy of the

Decision dated November 28, 2001 and January 7, 2002, thus, they
had until January 22, 2002 within which to file their appeal. On
January 16, 2002 or after the lapse of nine (9) days, petitioners
through their counsel Atty. Nolasco filed a Motion for
Reconsideration of the aforesaid decision, hence, pursuant to the
rules, petitioners still had six (6) remaining days to file their
appeal. As admitted by the petitioners in their petition (Rollo, p.
25), Atty. Nolasco received a copy of the Order denying their motion
for reconsideration on May 17, 2002, thus, petitioners still has until
May 23, 2002 (the remaining six [6] days) within which to file their
appeal. Obviously, petitioners were not able to file their Notice of
Appeal on May 23, 2002 as it was only filed on June 3, 2002.
In view of the said circumstances, We are of the belief and so
holds that the Notice of Appeal filed by the petitioners was really
filed out of time, the same having been filed seventeen (17) days
late of the reglementary period. By reason of which, the decision
dated
_______________
10 Id., at p. 174.
11 Id., at pp. 174-182.
12 Id., at pp. 185-187.
13 Id., at pp. 188-213.
14 Id., at pp. 217-223; penned by Associate Justice B.A. Adefuin-Dela Cruz
(retired), with Associate Justice Eliezer R. delos Santos (deceased) and
Associate Justice Jose Catral Mendoza (now a Member of the Court)
concurring.
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VOL. 679, AUGUST 23, 2012 61

November 28, 2001 had already become final and executory.

„Settled is the rule that the perfection of an appeal in the manner
and within the period permitted by law is not only mandatory but
jurisdictional, and failure to perfect that appeal renders the
challenged judgment final and executory. This is not an empty
procedural rule but is grounded on fundamental considerations of
public policy and sound practice.‰ (RamÊs Studio and Photographic
Equipment, Inc. vs. Court of Appeals, 346 SCRA 691, 696). Indeed,
Atty. Nolasco received the order of denial of the Motion for
Reconsideration on May 17, 2002 but filed a Notice of Appeal only
on June 3, 3003. As such, the decision of the lower court ipso facto
became final when no appeal was perfected after the lapse of the
reglementary period. This procedural caveat cannot be trifled with,
not even by the High Court.15
The UP sought a reconsideration, but the CA denied the

UPÊs motion for reconsideration on April 19, 2004.16
On May 11, 2004, the UP appealed to the Court by
petition for review on certiorari (G.R. No. 163501).
On June 23, 2004, the Court denied the petition for
review.17 The UP moved for the reconsideration of the
denial of its petition for review on August 29, 2004,18 but

the Court denied the motion on October 6, 2004.19 The
denial became final and executory on November 12, 2004.20
In the meanwhile that the UP was exhausting the
available remedies to overturn the denial of due course to
the appeal and the issuance of the writ of execution, Stern
Builders and dela Cruz filed in the RTC their motions for
execution despite their previous motion having already
been granted and despite the writ of execution having
already issued. On June 11, 2003, the RTC granted another
motion for execution
_______________
15 Id., at p. 221.
16 Id., at p. 243.
17 Id., at p. 282.
18 Id., at pp. 283-291.
19 Id., at p. 293.
20 Id., at p. 417.
62

filed on May 9, 2003 (although the RTC had already

issued the writ of execution on October 4, 2002).21
On June 23, 2003 and July 25, 2003, respectively, the
sheriff served notices of garnishment on the UPÊs
depository banks, namely: Land Bank of the Philippines
(Buendia Branch) and the Development Bank of the
Philippines (DBP), Commonwealth Branch.22 The UP
assailed the garnishment through an urgent motion to
quash the notices of garnishment;23 and a motion to quash
the writ of execution dated May 9, 2003.24
On their part, Stern Builders and dela Cruz filed their
ex parte motion for issuance of a release order.25
On October 14, 2003, the RTC denied the UPÊs urgent
motion to quash, and granted Stern Builders and dela
CruzÊs ex parte motion for issuance of a release order.26
The UP moved for the reconsideration of the order of
October 14, 2003, but the RTC denied the motion on

November 7, 2003.27
On January 12, 2004, Stern Builders and dela Cruz
again sought the release of the garnished funds.28 Despite
the UPÊs opposition,29 the RTC granted the motion to
release the garnished funds on March 16, 2004.30 On April
20, 2004, however, the RTC held in abeyance the
enforcement of the writs of execution issued on October 4,
2002 and June 3, 2003 and all the ensuing notices of
garnishment, citing Section 4, Rule
_______________
21 Id., at pp. 172-173; and 301.
22 Id., at p. 312.
23 Id., at pp. 302-309.
24 Id., at pp. 314-319.
25 Id., at pp. 321-322.
26 Id., at pp. 323-325.
27 Id., at pp. 326-328.
28 Id., at pp. 332-333.
29 Id., at pp. 334-336.
30 Id., at p. 339.
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52, Rules of Court, which provided that the pendency of a

timely motion for reconsideration stayed the execution of
the judgment.31
On December 21, 2004, the RTC, through respondent
Judge Agustin S. Dizon, authorized the release of the
garnished funds of the UP,32 to wit:
WHEREFORE, premises considered, there being no more legal

impediment for the release of the garnished amount in satisfaction
of the judgment award in the instant case, let the amount
garnished be immediately released by the Development Bank of the
Philippines, Commonwealth Branch, Quezon City in favor of the
plaintiff.
SO ORDERED.
The UP was served on January 3, 2005 with the order of

December 21, 2004 directing DBP to release the garnished
funds.33
On January 6, 2005, Stern Builders and dela Cruz
moved to cite DBP in direct contempt of court for its non-
compliance with the order of release.34
Thereupon, on January 10, 2005, the UP brought a
petition for certiorari in the CA to challenge the jurisdiction
of the RTC in issuing the order of December 21, 2004 (CA-
G.R. CV No. 88125).35 Aside from raising the denial of due
process, the UP averred that the RTC committed grave
abuse of discretion amounting to lack or excess of
jurisdiction in ruling that there was no longer any legal
impediment to the release of the garnished funds. The UP
argued that government funds and properties could not be
seized by virtue of writs of execution or garnishment, as
held in Department of Agriculture v. Na-
_______________
31 Id., at p. 340.
32 Id., at p. 341.
33 Id., at p. 341.
34 Id., at pp. 342-344.
35 Id., at pp. 346-360.
64

tional Labor Relations Commission,36 and citing Section

84 of Presidential Decree No. 1445 to the effect that
„[r]evenue funds shall not be paid out of any public
treasury or depository except in pursuance of an
appropriation law or other specific statutory authority‰;
and that the order of garnishment clashed with the ruling
in University of the Philippines Board of Regents v. Ligot-
Telan37 to the effect that the funds belonging to the UP
were public funds.
On January 19, 2005, the CA issued a temporary

restraining order (TRO) upon application by the UP.38
On March 22, 2005, Stern Builders and dela Cruz filed
in the RTC their amended motion for sheriff Ês assistance to
implement the release order dated December 21, 2004,
stating that the 60-day period of the TRO of the CA had
already lapsed.39 The UP opposed the amended motion and
countered that the implementation of the release order be
suspended.40
On May 3, 2005, the RTC granted the amended motion
for sheriff Ês assistance and directed the sheriff to proceed to
the DBP to receive the check in satisfaction of the
judgment.41
The UP sought the reconsideration of the order of May 3,
2005.42
On May 16, 2005, DBP filed a motion to consign the
check representing the judgment award and to dismiss the
motion to cite its officials in contempt of court.43
_______________
36 G.R. No. 104269, November 11, 1993, 227 SCRA 693.
37 G.R. No. 110280, October 21, 1993, 227 SCRA 342.
38 Rollo, pp. 366-367; penned by Associate Justice Reyes, with
Associate Justice Tria Tirona (retired) and Associate Justice Jose C.
Reyes, Jr. concurring.
39 Id., at pp. 452-453.
40 Id., at pp. 455-460.
41 Id., at pp. 472-476.
42 Id., at pp. 477-482.
43 Id., at p. 484.
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On May 23, 2005, the UP presented a motion to

withhold the release of the payment of the judgment
award.44
On July 8, 2005, the RTC resolved all the pending
matters,45 noting that the DBP had already delivered to the
sheriff ManagerÊs Check No. 811941 for P16,370,191.74

representing the garnished funds payable to the order of
Stern Builders and dela Cruz as its compliance with the
RTCÊs order dated December 21, 2004.46 However, the RTC
directed in the same order that Stern Builders and dela
Cruz should not encash the check or withdraw its amount
pending the final resolution of the UPÊs petition for
certiorari, to wit:47
To enable the money represented in the check in question (No.

00008119411) to earn interest during the pendency of the defendant
University of the Philippines application for a writ of injunction
with the Court of Appeals the same may now be deposited by the
plaintiff at the garnishee Bank (Development Bank of the
Philippines), the disposition of the amount represented therein
being subject to the final outcome of the case of the University of the
Philippines, et al. vs. Hon. Agustin S. Dizon, et al., (CA-G.R. 88125)
before the Court of Appeals.
Let it be stated herein that the plaintiff is not authorized to
encash and withdraw the amount represented in the check in
question and enjoy the same in the fashion of an owner during the
pendency of the case between the parties before the Court of
Appeals which may or may not be resolved in plaintiff Ês favor.
With the end in view of seeing to it that the check in question is
deposited by the plaintiff at the Development Bank of the
Philippines (garnishee bank), Branch Sheriff Herlan Velasco is
directed to accompany and/or escort the plaintiff in making the
deposit of the check in question.
SO ORDERED.
_______________
44 Id., at pp. 485-489.
45 Id., at pp. 492-494.
46 Id., at p. 484.
47 Id., at pp. 492-494.
66

On September 16, 2005, the CA promulgated its assailed

decision dismissing the UPÊs petition for certiorari, ruling
that the UP had been given ample opportunity to contest
the motion to direct the DBP to deposit the check in the
name of Stern Builders and dela Cruz; and that the
garnished funds could be the proper subject of garnishment
because they had been already earmarked for the project,
with the UP holding the funds only in a fiduciary
capacity,48 viz.:
Petitioners next argue that the UP funds may not be seized for
execution or garnishment to satisfy the judgment award. Citing
Department of Agriculture vs. NLRC, University of the Philippines
Board of Regents vs. Hon. Ligot-Telan, petitioners contend that UP
deposits at Land Bank and the Development Bank of the
Philippines, being government funds, may not be released absent
an appropriations bill from Congress.
The argument is specious. UP entered into a contract with
private respondents for the expansion and renovation of the Arts
and Sciences Building of its campus in Los Baños, Laguna.
Decidedly, there was already an appropriations earmarked for the
said project. The said funds are retained by UP, in a fiduciary
capacity, pending completion of the construction project.
We agree with the trial Court [sic] observation on this score:
„4. Executive Order No. 109 (Directing all National
Government Agencies to Revert Certain Accounts Payable to
the Cumulative Result of Operations of the National
Government and for Other Purposes) Section 9. Reversion of
Accounts Payable, provides that, all 1995 and prior years
documented accounts payable and all undocumented accounts
regardless of the year they were incurred shall be reverted to
the Cumulative Result of Operations of the National
Government (CROU). This shall apply to accounts payable of
all funds, except fiduciary funds, as long as the purpose for
which the funds were created have not been accomplished
and accounts payable under foreign assisted projects for the
duration of the said project. In this regard, the Department of
Budget and Management issued Joint-Circular No. 99-6 4.0
(4.3) Procedural Guidelines
_______________
48 Id., at p. 51.
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VOL. 679, AUGUST 23, 2012 67

which provides that all accounts payable that reverted to the

CROU may be considered for payment upon determination
thru administrative process, of the existence, validity and
legality of the claim. Thus, the allegation of the defendants
that considering no appropriation for the payment of any
amount awarded to plaintiffs-appellee the funds of defendant-
appellants may not be seized pursuant to a writ of execution
issued by the regular court is misplaced. Surely when the
defendants and the plaintiff entered into the General
Construction of Agreement there is an amount already
allocated by the latter for the said project which is no longer
subject of future appropriation.‰49
After the CA denied their motion for reconsideration on

December 23, 2005, the petitioners appealed by petition for
review.
Matters Arising During the Pendency of the Petition
On January 30, 2006, Judge Dizon of the RTC (Branch

80) denied Stern Builders and dela CruzÊs motion to
withdraw the deposit, in consideration of the UPÊs intention
to appeal to the CA,50 stating:
Since it appears that the defendants are intending to file a

petition for review of the Court of Appeals resolution in CA-G.R. No.
88125 within the reglementary period of fifteen (15) days from
receipt of resolution, the Court agrees with the defendants stand
that the granting of plaintiffsÊ subject motion is premature.
Let it be stated that what the Court meant by its Order dated
July 8, 2005 which states in part that the „disposition of the amount
represented therein being subject to the final outcome of the case of
the University of the Philippines, et al. vs. Hon. Agustin S. Dizon, et
al. (CA G.R. No. 88125 before the Court of Appeals) is that the
judgment or resolution of said court has to be final and executory,
for if the same will still be elevated to the Supreme Court, it will
not
_______________
49 Id., at pp. 51-52.
50 Id., at p. 569.
68

attain finality yet until the highest court has rendered its own final
judgment or resolution.51
However, on January 22, 2007, the UP filed an Urgent

Application for A Temporary Restraining Order and/or A
Writ of Preliminary Injunction,52 averring that on January
3, 2007, Judge Maria Theresa dela Torre-Yadao (who had
meanwhile replaced Judge Dizon upon the latterÊs
appointment to the CA) had issued another order allowing
Stern Builders and dela Cruz to withdraw the deposit,53 to
wit:
It bears stressing that defendantsÊ liability for the payment of

the judgment obligation has become indubitable due to the final and
executory nature of the Decision dated November 28, 2001. Insofar
as the payment of the [sic] judgment obligation is concerned, the
Court believes that there is nothing more the defendant can do to
escape liability. It is observed that there is nothing more the
defendant can do to escape liability. It is observed that defendant
U.P. System had already exhausted all its legal remedies to
overturn, set aside or modify the decision (dated November 28,
2001) rendered against it. The way the Court sees it, defendant U.P.
SystemÊs petition before the Supreme Court concerns only with the
manner by which said judgment award should be satisfied. It has
nothing to do with the legality or propriety thereof, although it
prays for the deletion of [sic] reduction of the award of moral
damages.
It must be emphasized that this CourtÊs finding, i.e., that there
was sufficient appropriation earmarked for the project, was upheld
by the Court of Appeals in its decision dated September 16, 2005.
Being a finding of fact, the Supreme Court will, ordinarily, not
disturb the same was said Court is not a trier of fact. Such being
the case, defendantsÊ arguments that there was no sufficient

appropriation for the payment of the judgment obligation must fail.
While it is true that the former Presiding Judge of this Court in
its Order dated January 30, 2006 had stated that:
_______________
51 Id.
52 Id., at pp. 556-561.
53 Id., at pp. 562-565.
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VOL. 679, AUGUST 23, 2012 69

Let it be stated that what the Court meant by its Order

dated July 8, 2005 which states in part that the „disposition
of the amount represented therein being subject to the final
outcome of the case of the University of the Philippines, et al.
vs. Hon. Agustin S. Dizon, et al., (CA-G.R. No. 88125 before
the Court of Appeals) is that the judgment or resolution of
said court has to be final and executory, for if the same will
still be elevated to the Supreme Court, it will not attain
finality yet until the highest court has rendered its own final
judgment or resolution.
it should be noted that neither the Court of Appeals nor the
Supreme Court issued a preliminary injunction enjoining the
release or withdrawal of the garnished amount. In fact, in its
present petition for review before the Supreme Court, U.P. System
has not prayed for the issuance of a writ of preliminary injunction.
Thus, the Court doubts whether such writ is forthcoming.
The Court honestly believes that if defendantsÊ petition assailing
the Order of this Court dated December 31, 2004 granting the
motion for the release of the garnished amount was meritorious, the
Court of Appeals would have issued a writ of injunction enjoining
the same. Instead, said appellate [c]ourt not only refused to issue a
wit of preliminary injunction prayed for by U.P. System but denied
the petition, as well.54
The UP contended that Judge Yadao thereby effectively

reversed the January 30, 2006 order of Judge Dizon
disallowing the withdrawal of the garnished amount until
after the decision in the case would have become final and
executory.
Although the Court issued a TRO on January 24, 2007
to enjoin Judge Yadao and all persons acting pursuant to
her authority from enforcing her order of January 3,
2007,55 it appears that on January 16, 2007, or prior to the
issuance of the TRO, she had already directed the DBP to
forthwith release the garnished amount to Stern Builders
and dela Cruz;56
_______________
54 Id., at pp. 563-564.
55 Id., at pp. 576-581.
56 Id., at pp. 625-628.
70

and that DBP had forthwith complied with the order on

January 17, 2007 upon the sheriff Ês service of the order of
Judge Yadao.57
These intervening developments impelled the UP to file
in this Court a supplemental petition on January 26,
2007,58 alleging that the RTC (Judge Yadao) gravely erred
in ordering the immediate release of the garnished amount
despite the pendency of the petition for review in this
Court.
The UP filed a second supplemental petition59 after the
RTC (Judge Yadao) denied the UPÊs motion for the
redeposit of the withdrawn amount on April 10, 2007,60 to
wit:
This resolves defendant U.P. SystemÊs Urgent Motion to

Redeposit Judgment Award praying that plaintiffs be directed to
redeposit the judgment award to DBP pursuant to the Temporary
Restraining Order issued by the Supreme Court. Plaintiffs opposed
the motion and countered that the Temporary Restraining Order
issued by the Supreme Court has become moot and academic
considering that the act sought to be restrained by it has already
been performed. They also alleged that the redeposit of the
judgment award was no longer feasible as they have already spent

the same.
It bears stressing, if only to set the record straight, that this
Court did not·in its Order dated January 3, 2007 (the
implementation of which was restrained by the Supreme Court in
its Resolution dated January 24, 2002)·direct that that garnished
amount „be deposited with the garnishee bank (Development Bank
of the Philippines)‰. In the first place, there was no need to order
DBP to make such deposit, as the garnished amount was already
deposited in the account of plaintiffs with the DBP as early as May
13, 2005. What the Court granted in its Order dated January 3,
2007 was plaintiff Ês motion to allow the release of said deposit. It
must be recalled that the Court found plaintiff Ês motion meritorious
and, at that time, there was no restraining order or preliminary
injunction from either
_______________
57 Id., at pp. 687-688.
58 Id., at pp. 605-615.
59 Id., at pp. 705-714.
60 Id., at pp. 719-721.
71
VOL. 679, AUGUST 23, 2012 71

the Court of Appeals or the Supreme Court which could have

enjoined the release of plaintiffsÊ deposit. The Court also took into
account the following factors:
a) the Decision in this case had long been final and executory after
it was rendered on November 28, 2001;
b) the propriety of the dismissal of U.P. SystemÊs appeal was upheld
by the Supreme Court;
c) a writ of execution had been issued;
d) defendant U.P. SystemÊs deposit with DBP was garnished
pursuant to a lawful writ of execution issued by the Court; and
e) the garnished amount had already been turned over to the
plaintiffs and deposited in their account with DBP.
The garnished amount, as discussed in the Order dated January
16, 2007, was already owned by the plaintiffs, having been

delivered to them by the Deputy Sheriff of this Court pursuant to
par. (c), Section 9, Rule 39 of the 1997 Rules of Civil Procedure.
Moreover, the judgment obligation has already been fully satisfied
as per Report of the Deputy Sheriff.
Anent the Temporary Restraining Order issued by the Supreme
Court, the same has become functus oficio, having been issued after
the garnished amount had been released to the plaintiffs. The
judgment debt was released to the plaintiffs on January 17, 2007,
while the Temporary Restraining Order issued by the Supreme
Court was received by this Court on February 2, 2007. At the time
of the issuance of the Restraining Order, the act sought to be
restrained had already been done, thereby rendering the said Order
ineffectual.
After a careful and thorough study of the arguments advanced by
the parties, the Court is of the considered opinion that there is no
legal basis to grant defendant U.P. SystemÊs motion to redeposit the
judgment amount. Granting said motion is not only contrary to law,
but it will also render this CourtÊs final executory judgment
nugatory. Litigation must end and terminate sometime and
somewhere, and it is essential to an effective administration of
justice that once a judgment has become final the issue or cause
involved therein should be laid to rest. This doctrine of finality of
judgment is grounded on fundamental considerations of public
policy and sound
72

practice. In fact, nothing is more settled in law than that once a

judgment attains finality it thereby becomes immutable and
unalterable. It may no longer be modified in any respect, even if the
modification is meant to correct what is perceived to be an
erroneous conclusion of fact or law, and regardless of whether the
modification is attempted to be made by the court rendering it or by
the highest court of the land.
WHEREFORE, premises considered, finding defendant U.P.
SystemÊs Urgent Motion to Redeposit Judgment Award devoid of
merit, the same is hereby DENIED.
SO ORDERED.
Issues
The UP now submits that:
I
THE COURT OF APPEALS COMMITTED GRAVE ERROR IN
DISMISSING THE PETITION, ALLOWING IN EFFECT THE
GARNISHMENT OF UP FUNDS, WHEN IT RULED THAT
FUNDS HAVE ALREADY BEEN EARMARKED FOR THE
CONSTRUCTION PROJECT; AND THUS, THERE IS NO NEED
FOR FURTHER APPROPRIATIONS.
II
THE COURT OF APPEALS COMMITTED GRAVE ERROR IN
ALLOWING GARNISHMENT OF A STATE UNIVERSITYÊS
FUNDS IN VIOLATION OF ARTICLE XIV, SECTION 5(5) OF
THE CONSTITUTION.
III
IN THE ALTERNATIVE, THE UNIVERSITY INVOKES EQUITY
AND THE REVIEW POWERS OF THIS HONORABLE COURT TO
MODIFY, IF NOT TOTALLY DELETE THE AWARD OF P10
MILLION AS MORAL DAMAGES TO RESPONDENTS.
IV
THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN
ORDERING THE IMMEDIATE RELEASE OF THE JUDGMENT
AWARD
73
VOL. 679, AUGUST 23, 2012 73

IN ITS ORDER DATED 3 JANUARY 2007 ON THE GROUND OF

EQUITY AND JUDICIAL COURTESY.
V
THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN
ORDERING THE IMMEDIATE RELEASE OF THE JUDGMENT
AWARD IN ITS ORDER DATED 16 JANUARY 2007 ON THE
GROUND THAT PETITIONER UNIVERSITY STILL HAS A
PENDING MOTION FOR RECONSIDERATION OF THE ORDER
DATED 3 JANUARY 2007.
VI
THE RTC-BRANCH 80 COMMITTED GRAVE ERROR IN NOT
ORDERING THE REDEPOSIT OF THE GARNISHED AMOUNT
TO THE DBP IN VIOLATION OF THE CLEAR LANGUAGE OF

THE SUPREME COURT RESOLUTION DATED 24 JANUARY
2007.
The UP argues that the amount earmarked for the

construction project had been purposely set aside only for
the aborted project and did not include incidental matters
like the awards of actual damages, moral damages and
attorneyÊs fees. In support of its argument, the UP cited
Article 12.2 of the General Construction Agreement, which
stipulated that no deductions would be allowed for the
payment of claims, damages, losses and expenses,
including attorneyÊs fees, in case of any litigation arising
out of the performance of the work. The UP insists that the
CA decision was inconsistent with the rulings in
Commissioner of Public Highways v. San Diego61 and
Department of Agriculture v. NLRC62 to the effect that
government funds and properties could not be seized under
writs of execution or garnishment to satisfy judgment
awards.
_______________
61 G.R. No. L-30098, February 18, 1970, 31 SCRA 616, 625.
62 G.R. No. 104269, November 11, 1993, 227 SCRA 693, 701-702.
74

Furthermore, the UP contends that the CA contravened

Section 5, Article XIV of the Constitution by allowing the
garnishment of UP funds, because the garnishment
resulted in a substantial reduction of the UPÊs limited
budget allocated for the remuneration, job satisfaction and
fulfillment of the best available teachers; that Judge Yadao
should have exhibited judicial courtesy towards the Court
due to the pendency of the UPÊs petition for review; and
that she should have also desisted from declaring that the
TRO issued by this Court had become functus officio.
Lastly, the UP states that the awards of actual damages
of P5,716,729.00 and moral damages of P10 million should

be reduced, if not entirely deleted, due to its being
unconscionable, inequitable and detrimental to public
service.
In contrast, Stern Builders and dela Cruz aver that the
petition for review was fatally defective for its failure to
mention the other cases upon the same issues pending
between the parties (i.e., CA-G.R. No. 77395 and G.R No.
163501); that the UP was evidently resorting to forum
shopping, and to delaying the satisfaction of the final
judgment by the filing of its petition for review; that the
ruling in Commissioner of Public Works v. San Diego had
no application because there was an appropriation for the
project; that the UP retained the funds allotted for the
project only in a fiduciary capacity; that the contract price
had been meanwhile adjusted to P22,338,553.25, an
amount already more than sufficient to cover the judgment
award; that the UPÊs prayer to reduce or delete the award
of damages had no factual basis, because they had been
gravely wronged, had been deprived of their source of
income, and had suffered untold miseries, discomfort,
humiliation and sleepless years; that dela Cruz had even
been constrained to sell his house, his equipment and the
implements of his trade, and together with his family had
been forced to live miserably because of the wrongful
actuations of the UP; and that the RTC correctly declared
the
75
VOL. 679, AUGUST 23, 2012 75

CourtÊs TRO to be already functus officio by reason of the

withdrawal of the garnished amount from the DBP.
The decisive issues to be considered and passed upon
are, therefore: (a) whether the funds of the UP were the
proper subject of garnishment in order to satisfy the
judgment award; and (b) whether the UPÊs prayer for the
deletion of the awards of actual damages of P5,716,729.00,
moral damages of P10,000,000.00 and attorneyÊs fees of
P150,000.00 plus P1,500.00 per appearance could be
granted despite the finality of the judgment of the RTC.
Ruling
The petition for review is meritorious.

I.
UPÊs funds, being government funds,
are not subject to garnishment
The UP was founded on June 18, 1908 through Act 1870
to provide advanced instruction in literature, philosophy,
the sciences, and arts, and to give professional and
technical training to deserving students.63 Despite its
establishment as a body corporate,64 the UP remains to be
a „chartered institution‰65 performing a legitimate
government function. It is an institution of higher learning,
not a corporation established
_______________
63 Section 2, Act No. 1870.
64 Section 1, Act No. 1870.
65 Section 2(12) of Executive Order No. 292 reads:
xxx
xxx Chartered institution refers to any agency organized or operating
under a special charter, and vested by law with functions relating to
specific constitutional policies or objectives. This term includes the state
universities and colleges and the monetary authority of the State.
xxx
76

for profit and declaring any dividends.66 In enacting

Republic Act No. 9500 (The University of the Philippines
Charter of 2008), Congress has declared the UP as the
national university67 „dedicated to the search for truth and
knowledge as well as the development of future leaders.‰68
Irrefragably, the UP is a government instrumentality,69
performing the StateÊs constitutional mandate of promoting
quality and accessible education.70 As a government
instrumentality, the UP administers special funds sourced
from the fees and income enumerated under Act No. 1870
and Section 1 of Executive Order No. 714,71 and from the
yearly appropriations, to achieve the purposes laid down by
Section 2 of Act 1870, as expanded in Republic Act No.
9500.72 All the funds going into the possession of the UP,
including any interest accruing from the deposit of such
funds in any banking institution, constitute a „special trust
fund,‰ the disbursement of which should always be aligned
with the UPÊs mission and
_______________
66 University of the Philippines and Anonas v. Court of Industrial
Relations, 107 Phil 848, 850 (1960).
67 Section 2, R.A. No. 9500.
68 Section 3, R.A. No. 9500.
69 Section 2(10), of Executive Order No. 292 provides:
xxx
xxx Instrumentality refers to any agency of the National Government,
not integrated within the department framework, vested with special
functions or jurisdiction by law, endowed with some if not all corporate
powers, administering special funds, and enjoying operational autonomy,
usually through a charter. This term includes regulatory agencies,
chartered institutions and government-owned or controlled corporations.
xxx
70 Section 1, Article XIV, 1987 Constitution.
71 Entitled Fiscal Control and Management of the Funds of the
University of the Philippines, promulgated on August 1, 1981.
72 Section 3, R.A. No. 9500.
77
VOL. 679, AUGUST 23, 2012 77

purpose,73 and should always be subject to auditing by the

COA.74
Presidential Decree No. 1445 defines a „trust fund‰ as a
fund that officially comes in the possession of an agency of
the government or of a public officer as trustee, agent or
administrator, or that is received for the fulfillment of some
obligation.75 A trust fund may be utilized only for the
„specific purpose for which the trust was created or the

funds received.‰76
The funds of the UP are government funds that are
public in character. They include the income accruing from
the use of real property ceded to the UP that may be spent
only for the attainment of its institutional objectives.77
Hence, the funds subject of this action could not be validly
made the subject of the RTCÊs writ of execution or
garnishment. The adverse judgment rendered against the
UP in a suit to which it had impliedly consented was not
immediately enforceable by execution against the UP,78
because suability of the State did not necessarily mean its
liability.79
A marked distinction exists between suability of the
State and its liability. As the Court succinctly stated in
Municipality of San Fernando, La Union v. Firme:80
A distinction should first be made between suability and liability.

„Suability depends on the consent of the state to be sued, liability
on the applicable law and the established facts. The circumstance
_______________
73 Section 13(m), R.A. No. 9500.
74 Section 13, Act 1870; Section 6, Executive Order No. 714; Section 26, R.A.
No. 9500.
75 Section 3(4), P.D. No. 1445.
76 Section 4(3), P.D. No. 1445.
77 Section 22(a), R.A. No. 9500.
78 Philippine Rock Industries, Inc. v. Board of Liquidators, G.R. No. 84992,
December 15, 1989, 180 SCRA 171, 175.
79 Republic v. National Labor Relations Commission, G.R. No. 120385,
October 17, 1996, 263 SCRA 290, 300.
80 G.R. No. L-52179, April 8, 1991, 195 SCRA 692, 697.
78

that a state is suable does not necessarily mean that it is liable;

on the other hand, it can never be held liable if it does not first
consent to be sued. Liability is not conceded by the mere fact that
the state has allowed itself to be sued. When the state does waive
its sovereign immunity, it is only giving the plaintiff the chance to
prove, if it can, that the defendant is liable.
Also, in Republic v. Villasor,81 where the issuance of an

alias writ of execution directed against the funds of the
Armed Forces of the Philippines to satisfy a final and
executory judgment was nullified, the Court said:
xxx The universal rule that where the State gives its consent to be
sued by private parties either by general or special law, it may limit
claimantÊs action „only up to the completion of proceedings anterior
to the stage of execution‰ and that the power of the Courts ends
when the judgment is rendered, since government funds and
properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on obvious
considerations of public policy. Disbursements of public funds must
be covered by the corresponding appropriation as required by law.
The functions and public services rendered by the State cannot be
allowed to be paralyzed or disrupted by the diversion of public funds
from their legitimate and specific objects, as appropriated by law.
The UP correctly submits here that the garnishment of

its funds to satisfy the judgment awards of actual and
moral damages (including attorneyÊs fees) was not validly
made if there was no special appropriation by Congress to
cover the liability. It was, therefore, legally unwarranted
for the CA to agree with the RTCÊs holding in the order
issued on April 1, 2003 that no appropriation by Congress
to allocate and set aside the payment of the judgment
awards was necessary because „there (were) already an
appropriations (sic) earmarked for the said project.‰82 The
CA and the RTC thereby unjustifiably ignored the legal
restriction imposed on the
_______________
81 G.R. No. L-30671, November 28, 1973, 54 SCRA 83, 87.
82 Rollo, p. 51.
79
VOL. 679, AUGUST 23, 2012 79
trust funds of the Government and its agencies and

instrumentalities to be used exclusively to fulfill the
purposes for which the trusts were created or for which the
funds were received except upon express authorization by
Congress or by the head of a government agency in control
of the funds, and subject to pertinent budgetary laws, rules
and regulations.83
Indeed, an appropriation by Congress was required
before the judgment that rendered the UP liable for moral
and actual damages (including attorneyÊs fees) would be
satisfied considering that such monetary liabilities were
not covered by the „appropriations earmarked for the said
project.‰ The Constitution strictly mandated that „(n)o
money shall be paid out of the Treasury except in
pursuance of an appropriation made by law.‰84
II
COA must adjudicate private respondentsÊ claim
before execution should proceed
The execution of the monetary judgment against the UP

was within the primary jurisdiction of the COA. This was
expressly provided in Section 26 of Presidential Decree No.
1445, to wit:
Section 26. General jurisdiction.·The authority and

powers of the Commission shall extend to and comprehend
all matters relating to auditing procedures, systems and controls,
the keeping of the general accounts of the Government, the
preservation of vouchers pertaining thereto for a period of ten
years, the examination and inspection of the books, records, and
papers relating to those accounts; and the audit and settlement of
the accounts of all persons respecting funds or property received or
held by them in an accountable capacity, as well as the
examination, audit, and settlement of all debts and claims of
any sort due from or owing to the Government or any of its
subdivisions, agencies
_______________
83 Section 84(2), P.D. No. 1445.
84 Section 29 (1), Article VI, Constitution.
80

and instrumentalities. The said jurisdiction extends to all

government-owned or controlled corporations, including
their subsidiaries, and other self-governing boards,
commissions, or agencies of the Government, and as herein
prescribed, including non-governmental entities subsidized
by the government, those funded by donations through the
government, those required to pay levies or government
share, and those for which the government has put up a
counterpart fund or those partly funded by the government.
It was of no moment that a final and executory decision

already validated the claim against the UP. The settlement
of the monetary claim was still subject to the primary
jurisdiction of the COA despite the final decision of the
RTC having already validated the claim.85 As such, Stern
Builders and dela Cruz as the claimants had no alternative
except to first seek the approval of the COA of their
monetary claim.
On its part, the RTC should have exercised utmost
caution, prudence and judiciousness in dealing with the
motions for execution against the UP and the garnishment
of the UPÊs funds. The RTC had no authority to direct the
immediate withdrawal of any portion of the garnished
funds from the depository banks of the UP. By eschewing
utmost caution, prudence and judiciousness in dealing with
the execution and garnishment, and by authorizing the
withdrawal of the garnished funds of the UP, the RTC
acted beyond its jurisdiction, and all its orders and
issuances thereon were void and of no legal effect,
specifically: (a) the order Judge Yadao issued on January 3,
2007 allowing Stern Builders and dela Cruz to withdraw
the deposited garnished amount; (b) the order Judge Yadao
issued on January 16, 2007 directing DBP to forthwith
release the garnish amount to Stern Builders and dela
Cruz; (c) the sheriff Ês report of January 17, 2007
manifesting the full satisfaction of the writ of execution;
and (d)
_______________
85 National Home Mortgage Finance Corporation v. Abayari, G.R. No.
166508, October 2, 2009, 602 SCRA 242, 256.
81
VOL. 679, AUGUST 23, 2012 81

the order of April 10, 2007 deying the UPÊs motion for the
redeposit of the withdrawn amount. Hence, such orders
and issuances should be struck down without exception.
Nothing extenuated Judge YadaoÊs successive violations
of Presidential Decree No. 1445. She was aware of
Presidential Decree No. 1445, considering that the Court
circulated to all judges its Administrative Circular No. 10-
2000,86 issued on October 25, 2000, enjoining them „to
observe utmost caution, prudence and judiciousness in the
issuance of writs of execution to satisfy money judgments
against government agencies and local government units‰
precisely in order to prevent the circumvention of
Presidential Decree No. 1445, as well as of the rules and
procedures of the COA, to wit:
In order to prevent possible circumvention of the rules and

procedures of the Commission on Audit, judges are hereby
enjoined to observe utmost caution, prudence and
judiciousness in the issuance of writs of execution to satisfy
money judgments against government agencies and local
government units.
Judges should bear in mind that in Commissioner of Public
Highways v. San Diego (31 SCRA 617, 625 [1970]), this Court
explicitly stated:
„The universal rule that where the State gives its consent
to be sued by private parties either by general or special law,
it may limit claimantÊs action Âonly up to the completion of
proceedings anterior to the stage of executionÊ and that the
power of the Court ends when the judgment is rendered, since
government funds and properties may not be seized under
writs of execution or garnishment to satisfy such judgments,
is based on obvious considerations of public policy.
Disbursements of public funds must be covered by the
corresponding appropriation as required by law. The

functions and public
_______________
86 Entitled EXERCISE OF UTMOST CAUTION, PRUDENCE AND JUDICIOUSNESS
IN THE ISSUANCE OF WRITS OF EXECUTION TO SATISFY MONEY JUDGMENTS
AGAINST GOVERNMENT AGENCIES AND LOCAL GOVERNMENT UNITS.
82

services rendered by the State cannot be allowed to be

paralyzed or disrupted by the diversion of public funds from
their legitimate and specific objects, as appropriated by law.
Moreover, it is settled jurisprudence that upon
determination of State liability, the prosecution,
enforcement or satisfaction thereof must still be pursued in
accordance with the rules and procedures laid down in P.D.
No. 1445, otherwise known as the Government Auditing
Code of the Philippines (Department of Agriculture v. NLRC,
227 SCRA 693, 701-702 [1993] citing Republic vs. Villasor, 54
SCRA 84 [1973]). All money claims against the Government
must first be filed with the Commission on Audit which
must act upon it within sixty days. Rejection of the claim
will authorize the claimant to elevate the matter to the
Supreme Court on certiorari and in effect, sue the State
thereby (P.D. 1445, Sections 49-50).
However, notwithstanding the rule that government properties are
not subject to levy and execution unless otherwise provided for by
statute (Republic v. Palacio, 23 SCRA 899 [1968]; Commissioner of
Public Highways v. San Diego, supra) or municipal ordinance
(Municipality of Makati v. Court of Appeals, 190 SCRA 206 [1990]),
the Court has, in various instances, distinguished between
government funds and properties for public use and those not held
for public use. Thus, in Viuda de Tan Toco v. Municipal Council of
Iloilo (49 Phil. 52 [1926]), the Court ruled that „[w]here property of
a municipal or other public corporation is sought to be subjected to
execution to satisfy judgments recovered against such corporation,
the question as to whether such property is leviable or not is to be
determined by the usage and purposes for which it is held.‰ The
following can be culled from Viuda de Tan Toco v. Municipal

Council of Iloilo:
Properties held for public uses·and generally
1.
everything held for governmental purposes·are not subject
to levy and sale under execution against such corporation.
The same rule applies to funds in the hands of a public
officer and taxes due to a municipal corporation.
2. Where a municipal corporation owns in its proprietary
capacity, as distinguished from its public or government capacity,
property not used or used for a public purpose but for quasi-private
purposes, it is the general rule that such property may be seized
and sold under execution against the corporation.
83
VOL. 679, AUGUST 23, 2012 83

3. Property held for public purposes is not subject to execution

merely because it is temporarily used for private purposes. If the
public use is wholly abandoned, such property becomes subject to
execution.
This Administrative Circular shall take effect immediately and the
Court Administrator shall see to it that it is faithfully implemented.
Although Judge Yadao pointed out that neither the CA

nor the Court had issued as of then any writ of preliminary
injunction to enjoin the release or withdrawal of the
garnished amount, she did not need any writ of injunction
from a superior court to compel her obedience to the law.
The Court is disturbed that an experienced judge like her
should look at public laws like Presidential Decree No.
1445 dismissively instead of loyally following and
unquestioningly implementing them. That she did so
turned her court into an oppressive bastion of mindless
tyranny instead of having it as a true haven for the seekers
of justice like the UP.
III
Period of appeal did not start without effective
service of decision upon counsel of record;
Fresh-period rule announced in
Neypes v. Court of Appeals

can be given retroactive application
The UP next pleads that the Court gives due course to
its petition for review in the name of equity in order to
reverse or modify the adverse judgment against it despite
its finality. At stake in the UPÊs plea for equity was the
return of the amount of P16,370,191.74 illegally garnished
from its trust funds. Obstructing the plea is the finality of
the judgment based on the supposed tardiness of UPÊs
appeal, which the RTC declared on September 26, 2002.
The CA upheld the declaration of finality on February 24,
2004, and the Court itself denied the UPÊs petition for
review on that issue on May 11, 2004 (G.R. No. 163501).
The denial became final on November 12, 2004.
84

It is true that a decision that has attained finality

becomes immutable and unalterable, and cannot be
modified in any respect,87 even if the modification is meant
to correct erroneous conclusions of fact and law, and
whether the modification is made by the court that
rendered it or by this Court as the highest court of the
land.88 Public policy dictates that once a judgment becomes
final, executory and unappealable, the prevailing party
should not be deprived of the fruits of victory by some
subterfuge devised by the losing party. Unjustified delay in
the enforcement of such judgment sets at naught the role
and purpose of the courts to resolve justiciable
controversies with finality.89 Indeed, all litigations must at
some time end, even at the risk of occasional errors.
But the doctrine of immutability of a final judgment has
not been absolute, and has admitted several exceptions,
among them: (a) the correction of clerical errors; (b) the so-
called nunc pro tunc entries that cause no prejudice to any
party; (c) void judgments; and (d) whenever circumstances
transpire after the finality of the decision that render its
execution unjust and inequitable.90 Moreover, in Heirs of
Maura So v. Obliosca,91 we stated that despite the absence
of the preceding circumstances, the Court is not precluded

from brushing aside procedural norms if only to serve the
higher interests of justice and equity. Also, in Gumaru v.
Quirino
_______________
87 Airline Pilots Association of the Philippines v. Philippine Airlines,
Inc., G.R. No. 168382, June 6, 2011, 650 SCRA 545, 557; Florentino v.
Rivera, G.R. No. 167968, January 23, 2006, 479 SCRA 522, 528; Siy v.
National Labor Relations Commission, G.R. No. 158971, August 25,
2005, 468 SCRA 154, 161-162.
88 FGU Insurance Corporation v. Regional Trial Court of Makati,
Branch 66, G.R. No. 161282, February 23, 2011, 644 SCRA 50, 56.
89 Edillo v. Dulpina, G.R. No. 188360, January 21, 2010, 610 SCRA
590, 602.
90 Apo Fruits Corporation v. Court of Appeals, G.R. No. 164195,
December 4, 2009, 607 SCRA 200, 214.
91 G.R. No. 147082, January 28, 2008, 542 SCRA 406, 418.
85
VOL. 679, AUGUST 23, 2012 85

State College,92 the Court nullified the proceedings and the

writ of execution issued by the RTC for the reason that
respondent state college had not been represented in the
litigation by the Office of the Solicitor General.
We rule that the UPÊs plea for equity warrants the
CourtÊs exercise of the exceptional power to disregard the
declaration of finality of the judgment of the RTC for being
in clear violation of the UPÊs right to due process.
Both the CA and the RTC found the filing on June 3,
2002 by the UP of the notice of appeal to be tardy. They
based their finding on the fact that only six days remained
of the UPÊs reglementary 15-day period within which to file
the notice of appeal because the UP had filed a motion for
reconsideration on January 16, 2002 vis-à-vis the RTCÊs
decision the UP received on January 7, 2002; and that
because the denial of the motion for reconsideration had
been served upon Atty. Felimon D. Nolasco of the UPLB
Legal Office on May 17, 2002, the UP had only until May
23, 2002 within which to file the notice of appeal.
The UP counters that the service of the denial of the
motion for reconsideration upon Atty. Nolasco was defective
considering that its counsel of record was not Atty. Nolasco
of the UPLB Legal Office but the OLS in Diliman, Quezon
City; and that the period of appeal should be reckoned from
May 31, 2002, the date when the OLS received the order.
The UP submits that the filing of the notice of appeal on
June 3, 2002 was well within the reglementary period to
appeal.
We agree with the submission of the UP.
Firstly, the service of the denial of the motion for
reconsideration upon Atty. Nolasco of the UPLB Legal
Office was invalid and ineffectual because he was
admittedly not the counsel of record of the UP. The rule is
that it is on the coun-
_______________
92 G.R. No. 164196, June 22, 2007, 525 SCRA 412, 426.
86

sel and not the client that the service should be made.93
That counsel was the OLS in Diliman, Quezon City, which
was served with the denial only on May 31, 2002. As such,
the running of the remaining period of six days resumed
only on June 1, 2002,94 rendering the filing of the UPÊs
notice of appeal on June 3, 2002 timely and well within the
remaining days of the UPÊs period to appeal.
Verily, the service of the denial of the motion for
reconsideration could only be validly made upon the OLS in
Diliman, and no other. The fact that Atty. Nolasco was in
the employ of the UP at the UPLB Legal Office did not
render the service upon him effective. It is settled that
where a party has appeared by counsel, service must be
made upon such counsel.95 Service on the party or the
partyÊs employee is not effective because such notice is not
notice in law.96 This is clear enough from Section 2, second

paragraph, of Rule 13, Rules of Court, which explicitly
states that: „If any party has appeared by counsel, service
upon him shall be made upon his counsel or one of them,
unless service upon the party himself is ordered by the
court. Where one counsel appears for several parties, he
shall only be entitled to one copy of any paper served upon
him by the opposite side.‰ As such, the period to appeal re-
_______________
93 Antonio v. Court of Appeals, No. L-35434, November 9, 1988, 167
SCRA 127, 131-132.
94 Pursuant to Section 1, Rule 22 of the Rules of Court, „the day of the
act or event from which the designated period of time begins to run is to
be excluded and the date of performance included.‰
95 Anderson v. National Labor Relations Commission, G.R. No.
111212, January 22, 1996, 252 SCRA 116, 124.
96 Prudential Bank v. Business Assistance Group, Inc., G.R. No.
158806, December 16, 2004, 447 SCRA 187, 193; Cabili v. Badelles, No.
L-17786, 116 Phil. 494, 497; 6 SCRA 190, 193 (1962); Martinez v.
Martinez, No. L-4075, 90 Phil. 697, 700 (1952); Vivero v. Santos, No. L-
8105, 98 Phil. 500, 504 (1956); Perez v. Araneta, No. L-11788, 103 Phil.
1141 (1958); Visayan Surety and Insurance Corp. v. Central Bank of the
Philippines, No. L-12199, 104 Phil. 562, 569 (1958).
87
VOL. 679, AUGUST 23, 2012 87

sumed only on June 1, 2002, the date following the service

on May 31, 2002 upon the OLS in Diliman of the copy of
the decision of the RTC, not from the date when the UP
was notified.97
Accordingly, the declaration of finality of the judgment of
the RTC, being devoid of factual and legal bases, is set
aside.
Secondly, even assuming that the service upon Atty.
Nolasco was valid and effective, such that the remaining
period for the UP to take a timely appeal would end by May
23, 2002, it would still not be correct to find that the
judgment of the RTC became final and immutable

thereafter due to the notice of appeal being filed too late on
June 3, 2002.
In so declaring the judgment of the RTC as final against
the UP, the CA and the RTC applied the rule contained in
the second paragraph of Section 3, Rule 41 of the Rules of
Court to the effect that the filing of a motion for
reconsideration interrupted the running of the period for
filing the appeal; and that the period resumed upon notice
of the denial of the motion for reconsideration. For that
reason, the CA and the RTC might not be taken to task for
strictly adhering to the rule then prevailing.
However, equity calls for the retroactive application in
the UPÊs favor of the fresh-period rule that the Court first
announced in mid-September of 2005 through its ruling in
Neypes v. Court of Appeals,98 viz.:
To standardize the appeal periods provided in the Rules and to

afford litigants fair opportunity to appeal their cases, the Court
deems it practical to allow a fresh period of 15 days within which to
file the notice of appeal in the Regional Trial Court, counted from
receipt of the order dismissing a motion for a new trial or motion for
reconsideration.
_______________
97 Notor v. Daza, No. L-320, 76 Phil. 850 (1946).
98 G.R. No. 141524, September 14, 2005, 469 SCRA 633.
88

The retroactive application of the fresh-period rule, a

procedural law that aims „to regiment or make the appeal
period uniform, to be counted from receipt of the order
denying the motion for new trial, motion for
reconsideration (whether full or partial) or any final order
or resolution,‰99 is impervious to any serious challenge.
This is because there are no vested rights in rules of
procedure.100 A law or regulation is procedural when it

prescribes rules and forms of procedure in order that courts
may be able to administer justice.101 It does not come
within the legal conception of a retroactive law, or is not
subject of the general rule prohibiting the retroactive
operation of statues, but is given retroactive effect in
actions pending and undetermined at the time of its
passage without violating any right of a person who may
feel that he is adversely affected.
We have further said that a procedural rule that is
amended for the benefit of litigants in furtherance of the
administration of justice shall be retroactively applied to
likewise favor actions then pending, as equity delights in
equality.102 We may even relax stringent procedural rules
in order to serve substantial justice and in the exercise of
this CourtÊs equity jurisdiction.103 Equity jurisdiction aims
to do complete justice in cases where a court of law is
unable to adapt its judgments to the special circumstances
of a case because of the inflexibility of its statutory or legal
jurisdiction.104
_______________
99 Id., at p. 644.
100 Jamero v. Melicor, G.R. No. 140929, May 26, 2005, 459 SCRA 113,
120.
101 Lopez v. Gloria, No. L-13846, 40 Phil. 28 (1919).
102 Go v. Sunbanun, G.R. No. 168240, February 9, 2011, 642 SCRA
367, 370.
103 Buenaflor v. Court of Appeals, G.R. No. 142021, November 29,
2000, 346 SCRA 563, 567; Soriano v. Court of Appeals, G.R. No. 100525,
May 25, 1993, 222 SCRA 545, 546-547.
104 Reyes v. Lim, G.R. No. 134241, August 11, 2003, 408 SCRA 560,
560-567.
89
VOL. 679, AUGUST 23, 2012 89

It is cogent to add in this regard that to deny the benefit
of the fresh-period rule to the UP would amount to injustice

and absurdity·injustice, because the judgment in question
was issued on November 28, 2001 as compared to the
judgment in Neypes that was rendered in 1998; absurdity,
because parties receiving notices of judgment and final
orders issued in the year 1998 would enjoy the benefit of
the fresh-period rule but the later rulings of the lower
courts like that herein would not.105
Consequently, even if the reckoning started from May
17, 2002, when Atty. Nolasco received the denial, the UPÊs
filing on June 3, 2002 of the notice of appeal was not tardy
within the context of the fresh-period rule. For the UP, the
fresh period of 15-days counted from service of the denial of
the motion for reconsideration would end on June 1, 2002,
which was a Saturday. Hence, the UP had until the next
working day, or June 3, 2002, a Monday, within which to
appeal, conformably with Section 1 of Rule 22, Rules of
Court, which holds that: „If the last day of the period, as
thus computed, falls on a Saturday, a Sunday, or a legal
holiday in the place where the court sits, the time shall not
run until the next working day.‰
IV
Awards of monetary damages,
being devoid of factual and legal bases,
did not attain finality and should be deleted
Section 14 of Article VIII of the Constitution prescribes
that express findings of fact and of law should be made in
the decision rendered by any court, to wit:
_______________
105 De los Santos v. Vda. de Mangubat, G.R. No. 149508, October 10,
2007, 535 SCRA 411, 423.
90

Section 14. No decision shall be rendered by any court without

expressing therein clearly and distinctly the facts and the law on
which it is based.
No petition for review or motion for reconsideration of a decision

of the court shall be refused due course or denied without stating
the legal basis therefor.
Implementing the constitutional provision in civil

actions is Section 1 of Rule 36, Rules of Court, viz.:
Section 1. Rendition of judgments and final orders.·A

judgment or final order determining the merits of the case shall be
in writing personally and directly prepared by the judge, stating
clearly and distinctly the facts and the law on which it is based,
signed by him, and filed with the clerk of the court. (1a)
The Constitution and the Rules of Court apparently

delineate two main essential parts of a judgment, namely:
the body and the decretal portion. Although the latter is the
controlling part,106 the importance of the former is not to be
lightly regarded because it is there where the court clearly
and distinctly states its findings of fact and of law on which
the decision is based. To state it differently, one without the
other is ineffectual and useless. The omission of either
inevitably results in a judgment that violates the letter and
the spirit of the Constitution and the Rules of Court.
The term findings of fact that must be found in the body
of the decision refers to statements of fact, not to
conclusions of law.107 Unlike in pleadings where ultimate
facts alone need to be stated, the Constitution and the
Rules of Court require not only that a decision should state
the ultimate facts but also that it should specify the
supporting evidentiary facts, for they are what are called
the findings of fact.
_______________
106 Pelejo v. Court of Appeals, No. L-60800, August 31, 1982, 116
SCRA 406, 410.
107 Braga v. Millora, No. 1395, 3 Phil. 458 (1904).
91
VOL. 679, AUGUST 23, 2012 91

The importance of the findings of fact and of law cannot

be overstated. The reason and purpose of the Constitution
and the Rules of Court in that regard are obviously to
inform the parties why they win or lose, and what their
rights and obligations are. Only thereby is the demand of
due process met as to the parties. As Justice Isagani A.
Cruz explained in Nicos Industrial Corporation v. Court of
Appeals:108
It is a requirement of due process that the parties to a litigation

be informed of how it was decided, with an explanation of the
factual and legal reasons that led to the conclusions of the court.
The court cannot simply say that judgment is rendered in favor of X
and against Y and just leave it at that without any justification
whatsoever for its action. The losing party is entitled to know why
he lost, so he may appeal to a higher court, if permitted, should he
believe that the decision should be reversed. A decision that does
not clearly and distinctly state the facts and the law on which it is
based leaves the parties in the dark as to how it was reached and is
especially prejudicial to the losing party, who is unable to pinpoint
the possible errors of the court for review by a higher tribunal.
Here, the decision of the RTC justified the grant of

actual and moral damages, and attorneyÊs fees in the
following terse manner, viz.:
xxx The Court is not unmindful that due to defendantsÊ

unjustified refusal to pay their outstanding obligation to plaintiff,
the same suffered losses and incurred expenses as he was forced to
re-mortgage his house and lot located in Quezon City to Metrobank
(Exh. „CC‰) and BPI Bank just to pay its monetary obligations in
the form of interest and penalties incurred in the course of the
construction of the subject project.109
The statement that „due to defendantsÊ unjustified

refusal to pay their outstanding obligation to plaintiff, the
same suffered losses and incurred expenses as he was
forced to re-mortgage his house and lot located in Quezon
City to Metro-
_______________
108 G.R. No. 88709, February 11, 1992, 206 SCRA 127, 132.
109 Rollo, p. 137.
92

bank (Exh. „CC‰) and BPI Bank just to pay its monetary
obligations in the form of interest and penalties incurred in
the course of the construction of the subject project‰ was
only a conclusion of fact and law that did not comply with
the constitutional and statutory prescription. The
statement specified no detailed expenses or losses
constituting the P5,716,729.00 actual damages sustained
by Stern Builders in relation to the construction project or
to other pecuniary hardships. The omission of such
expenses or losses directly indicated that Stern Builders
did not prove them at all, which then contravened Article
2199, Civil Code, the statutory basis for the award of actual
damages, which entitled a person to an adequate
compensation only for such pecuniary loss suffered by him
as he has duly proved. As such, the actual damages allowed
by the RTC, being bereft of factual support, were
speculative and whimsical. Without the clear and distinct
findings of fact and law, the award amounted only to an
ipse dixit on the part of the RTC,110 and did not attain
finality.
There was also no clear and distinct statement of the
factual and legal support for the award of moral damages
in the substantial amount of P10,000,000.00. The award
was thus also speculative and whimsical. Like the actual
damages, the moral damages constituted another judicial
ipse dixit, the inevitable consequence of which was to
render the award of moral damages incapable of attaining
finality. In addition, the grant of moral damages in that
manner contravened the law that permitted the recovery of
moral damages as the means to assuage „physical
suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock,
social humiliation, and similar injury.‰111 The
contravention of the law was manifest considering that
Stern Builders, as an artificial person, was incapable of
experienc-
_______________
110 Translated, the phrase means: „He himself said it.‰ It refers to an
unsupported statement that rests solely on the authority of the
individual asserting the statement.
111 Article 2217, Civil Code.
93
VOL. 679, AUGUST 23, 2012 93

ing pain and moral sufferings.112 Assuming that in

granting the substantial amount of P10,000,000.00 as
moral damages, the RTC might have had in mind that dela
Cruz had himself suffered mental anguish and anxiety. If
that was the case, then the RTC obviously disregarded his
separate and distinct personality from that of Stern
Builders.113 Moreover, his moral and emotional sufferings
as the President of Stern Builders were not the sufferings
of Stern Builders. Lastly, the RTC violated the basic
principle that moral damages were not intended to enrich
the plaintiff at the expense of the defendant, but to restore
the plaintiff to his status quo ante as much as possible.
Taken together, therefore, all these considerations exposed
the substantial amount of P10,000,000.00 allowed as moral
damages not only to be factually baseless and legally
indefensible, but also to be unconscionable, inequitable and
unreasonable.
Like the actual and moral damages, the P150,000.00,
plus P1,500.00 per appearance, granted as attorneyÊs fees
were factually unwarranted and devoid of legal basis. The
general rule is that a successful litigant cannot recover
attorneyÊs fees as part of the damages to be assessed
against the losing party because of the policy that no
premium should be placed on the right to litigate.114 Prior
to the effectivity of the present Civil Code, indeed, such
fees could be recovered only when there was a stipulation
to that effect. It was only under the present Civil Code that
the right to collect attorneyÊs fees in the cases
_______________
112 Crystal v. Bank of the Philippine Islands, G.R. No. 172428,
November 28, 2008, 572 SCRA 697, 705.
113 Section 2, Corporation Code; Martinez v. Court of Appeals, G.R.
No. 131673, September 10, 2004, 438 SCRA 130, 149; Consolidated Bank
and Trust Corporation v. Court of Appeals, G.R. No. 114286, April 19,
2001, 356 SCRA 671, 682; Booc v. Bantuas, A.M. No. P-01-1464, March
13, 2001, 354 SCRA 279, 283.
114 Heirs of Justiva v. Gustilo, L-16396, January 31, 1963, 7 SCRA 72,
73; Firestone Tire & Rubber Co. of the Phil. v. Ines Chaves & Co., Ltd.,
No. L-17106, October 19, 1996, 18 SCRA 356, 358.
94

mentioned in Article 2208115 of the Civil Code came to be

recognized.116 Nonetheless, with attorneyÊs fees being
allowed in the concept of actual damages,117 their amounts
must be factually and legally justified in the body of the
decision and not stated for the first time in the decretal
portion.118 Stating the amounts only in the dispositive
portion of the judgment is not
_______________
115 Article 2208. In the absence of stipulation, attorneyÊs fees and
expenses of litigation, other than judicial costs, cannot be recovered,
except:
(1) When exemplary damages are awarded;
(2) When the defendantÊs act or omission has compelled the plaintiff
to litigate with third persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against
the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in
refusing to satisfy the plaintiff Ês plainly valid, just and demandable
claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers
and skilled workers;
(8) In actions for indemnity under workmenÊs compensation and

employerÊs liability laws;
(9) In a separate civil action to recover civil liability arising from a
crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable
that attorneyÊs fees and expenses of litigation should be recovered.
In all cases, the attorneyÊs fees and expenses of litigation must be
reasonable.
116 See Reyes v. Yatco, No. L-11425, 100 Phil. 964 (1957); Tan Ti v.
Alvear, No. 8228, 26 Phil. 566 (1914); Castueras, et al. v. Hon. Bayona, et
al., No. L-13657, 106 Phil. 340 (1959).
117 Fores v. Miranda, No. L-12163, 105 Phil. 266 (1959).
118 Buduhan v. Pakurao, G.R. No. 168237, February 22, 2006, 483
SCRA 116, 127.
95
VOL. 679, AUGUST 23, 2012 95

enough;119 a rendition of the factual and legal justifications

for them must also be laid out in the body of the decision.120
That the attorneyÊs fees granted to the private
respondents did not satisfy the foregoing requirement
suffices for the Court to undo them.121 The grant was
ineffectual for being contrary to law and public policy, it
being clear that the express findings of fact and law were
intended to bring the case within the exception and thereby
justify the award of the attorneyÊs fees. Devoid of such
express findings, the award was a conclusion without a
premise, its basis being improperly left to speculation and
conjecture.122
Nonetheless, the absence of findings of fact and of any
statement of the law and jurisprudence on which the
awards of actual and moral damages, as well as of
attorneyÊs fees, were based was a fatal flaw that
invalidated the decision of the RTC only as to such awards.
As the Court declared in Velarde v. Social Justice
Society,123 the failure to comply with the constitutional
requirement for a clear and distinct statement of the
supporting facts and law „is a grave abuse of discretion
amounting to lack or excess of jurisdiction‰ and that

„(d)ecisions or orders issued in careless disregard of the
constitutional mandate are a patent nullity and must be
struck down as void.‰124 The other item granted by the RTC
(i.e., P503,462.74) shall stand, subject to the action of the
COA as stated herein.
_______________
119 Gloria v. De Guzman, Jr., G.R. No. 116183, October 6, 1995, 249
SCRA 126, 136.
120 Policarpio v. Court of Appeals, G.R. No. 94563, March 5, 1991, 194
SCRA 729, 742.
121 Koa v. Court of Appeals, G.R. No. 84847, March 5, 1993, 219 SCRA
541, 549; Central Azucarera de Bais v. Court of Appeals, G.R. No. 87597,
August 3, 1990, 188 SCRA 328, 340.
122 Ballesteros v. Abion, G.R. No. 143361, February 9, 2006, 482
SCRA 23.
123 G.R. No. 159357, April 28, 2004, 428 SCRA 283.
124 Id., at p. 309.
96

WHEREFORE, the Court GRANTS the petition for

review on certiorari; REVERSES and SETS ASIDE the
decision of the Court of Appeals under review; ANNULS
the orders for the garnishment of the funds of the
University of the Philippines and for the release of the
garnished amount to Stern Builders Corporation and
Servillano dela Cruz; and DELETES from the decision of
the Regional Trial Court dated November 28, 2001 for
being void only the awards of actual damages of
P5,716,729.00, moral damages of P10,000,000.00, and
attorneyÊs fees of P150,000.00, plus P1,500.00 per
appearance, in favor of Stern Builders Corporation and
Servillano dela Cruz.
The Court ORDERS Stem Builders Corporation and
Servillano dela Cruz to redeposit the amount of
P16,370,191.74 within 10 days from receipt of this decision.
Costs of suit to be paid by the private respondents.

SO ORDERED.
Leonardo-De Castro (Actg. Chairperson), Del Castillo,

Villarama, Jr. and Perlas-Bernabe, JJ., concur.
Petition granted, judgment reversed and set aside.
Notes.·Under the trust fund doctrine, the capital

stock, property, and other assets of a corporation are
regarded as equity in trust for the payment of corporate
creditors which are preferred over the stockholders in the
distribution of corporate assets. (Yamamoto vs. Nishino
Leather Industries, Inc., 551 SCRA 447 [2008])
The only exceptions to the rule on the immutability of
final judgments are (1) the correction of clerical errors, (2)
the so-called nunc pro tunc entries which cause no
prejudice to any party, and (3) void judgments. (Mocorro,
Jr. vs. Ramirez, 560 SCRA 362 [2008])
··o0o··
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SUPREME COURT REPORTS ANNOTATED VOLUME 679 16/07/2019, 1*18 AM

G.R. No. 171182. August 23, 2012.*

UNIVERSITY OF THE PHILIPPINES, JOSE V. ABUEVA,

Schools; University of the Philippines; The University of the

VOL. 679, AUGUST 23, 2012 55

University of the Philippines vs. Dizon

institution, constitute a „special trust fund,‰ the disbursement of

56 SUPREME COURT REPORTS ANNOTATED

University of the Philippines vs. Dizon

Unjustified delay in the enforcement of such judgment sets at

Same; Same; Procedural Rules and Technicalities; There are no

(whether full or partial) or any final order or resolution,‰ is

VOL. 679, AUGUST 23, 2012 57

University of the Philippines vs. Dizon

rights in rules of procedure. A law or regulation is procedural when

PETITION for review on certiorari of a decision of the

58 SUPREME COURT REPORTS ANNOTATED

peals (CA) upheld the order of the Regional Trial Court

VOL. 679, AUGUST 23, 2012 59

After trial, on November 28, 2001, the RTC rendered its

Wherefore, in the light of the foregoing, judgment is hereby

Following the RTCÊs denial of its motion for

60 SUPREME COURT REPORTS ANNOTATED

ber 9, 2002.10 The UP filed an urgent motion to reconsider

Records clearly show that petitioners received a copy of the

VOL. 679, AUGUST 23, 2012 61

November 28, 2001 had already become final and executory.

The UP sought a reconsideration, but the CA denied the

denial of its petition for review on August 29, 2004,18 but

62 SUPREME COURT REPORTS ANNOTATED

filed on May 9, 2003 (although the RTC had already

October 14, 2003, but the RTC denied the motion on

VOL. 679, AUGUST 23, 2012 63

52, Rules of Court, which provided that the pendency of a

WHEREFORE, premises considered, there being no more legal

The UP was served on January 3, 2005 with the order of

64 SUPREME COURT REPORTS ANNOTATED

tional Labor Relations Commission,36 and citing Section

On January 19, 2005, the CA issued a temporary

VOL. 679, AUGUST 23, 2012 65

On May 23, 2005, the UP presented a motion to

sheriff ManagerÊs Check No. 811941 for P16,370,191.74

To enable the money represented in the check in question (No.

66 SUPREME COURT REPORTS ANNOTATED

On September 16, 2005, the CA promulgated its assailed

VOL. 679, AUGUST 23, 2012 67

which provides that all accounts payable that reverted to the

After the CA denied their motion for reconsideration on

Matters Arising During the Pendency of the Petition

On January 30, 2006, Judge Dizon of the RTC (Branch

Since it appears that the defendants are intending to file a

68 SUPREME COURT REPORTS ANNOTATED

However, on January 22, 2007, the UP filed an Urgent

It bears stressing that defendantsÊ liability for the payment of

the case, defendantsÊ arguments that there was no sufficient

VOL. 679, AUGUST 23, 2012 69

Let it be stated that what the Court meant by its Order

The UP contended that Judge Yadao thereby effectively