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LINDEN SUITES v. MERIDIEN FAR EAST PROPERTIES

FACTS:

The petitioner, Linden Suites Inc., filed a complaint for damages against respondent Meridien Far East Properties, Inc. before the Regional Trial Court (RTC) of Pasig City. The petitioner claimed that while conducting excavation works for the construction of Linden Suites, it discovered that the concrete retaining wall of an adjacent building owned by the respondent had encroached on its property. The RTC ruled in favor of the petitioner and ordered the respondent to pay damages and attorney's fees. The Court of Appeals affirmed the RTC decision but modified the award of damages. The case eventually reached the Supreme Court, which also affirmed the Court of Appeals decision. The RTC decision became final and the petitioner filed a motion for issuance of a writ of execution. However, the sheriff failed to serve the writ on the respondent at its office address in Makati City. The petitioner then advised the sheriff to serve the writ at the address listed in the respondent's 2006 General Information Sheet (GIS). The sheriff went to the said address but was informed that the occupant was a different corporation. The petitioner then filed a motion to examine the judgment obligor, seeking to compel the respondent's officers to appear before the RTC for examination of their income and properties. The RTC denied the motion, ruling that the officers cannot be subjected to examination as they do not reside within its jurisdiction. The Court of Appeals dismissed the petitioner's appeal, holding that the officers cannot be compelled to appear before a court or commissioner in a different jurisdiction. The petitioner filed a petition for review on certiorari before the Supreme Court, arguing that the RTC has the authority to examine the respondent's officers.

ISSUES:

  1. Whether or not there was grave abuse of discretion on the part of the Regional Trial Court (RTC) in denying petitioner's motion for examination of respondent's officers.

  2. Whether or not the RTC has supervisory control over the execution of its judgment.

  3. Whether the trial court has the power to issue auxiliary writs and employ processes to execute its final judgment.

  4. Whether the examination of respondent's officers violates the doctrine of separate juridical personality.

  5. Whether or not the Regional Trial Court (RTC), Branch 70 of Pasig City, properly examined the respondent's officers.

  6. Whether or not the examination of respondent's officers should be conducted in accordance with the Supreme Court's Decision.

RULING:

  1. Yes, there was grave abuse of discretion on the part of the RTC in denying petitioner's motion for examination of respondent's officers. The Court held that the denial of the motion was an error in judgment that amounted to grave abuse of discretion. A writ of certiorari under Rule 65 is an extraordinary remedy limited to correcting errors of jurisdiction or grave abuse of discretion amounting to lack or excess of jurisdiction. In order to warrant a certiorari proceeding, the petitioner must prove that the lower court gravely abused its discretion tantamount to lack or excess of jurisdiction. Grave abuse of discretion is defined as a capricious or whimsical exercise of judgment that is so patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law. Therefore, the CA erred in holding that there was no grave abuse of discretion on the part of the RTC.

  2. Yes, the RTC has supervisory control over the execution of its judgment. The Court reiterated that the court which rendered the judgment has supervisory control over the execution of its judgment. However, the court does not have the power to alter or amend a final and executory decision, except in certain recognized exceptions such as the correction of clerical errors. The supervisory control of the judgment court ensures the enforcement of a party's rights or claims that it has duly recognized, and it does not extend to authorizing the alteration or amendment of a final and executory decision. The principle of finality of judgment and its immutability must be upheld, and any amendment or alteration that substantially affects a final and executory judgment is null and void for lack of jurisdiction.

  3. The trial court has the power to issue auxiliary writs and employ processes to execute its final judgment. Section 5 of Rule 135 of the Rules of Court provides that every court has the inherent power to "amend and control its process and orders so as to make them conformable to law and justice". The court, in carrying out its jurisdiction, can thus issue "auxiliary writs, processes and other means necessary to carry it into effect" and to adopt any suitable process or mode of proceeding "which appears conformable to the spirit of the said law or rules". The court may stay or suspend the execution of its judgment if warranted by the higher interest of justice. The court is also vested with inherent power to stay the enforcement of its decision based on antecedent facts which show fraud in its rendition or want of jurisdiction of the trial court apparent on the record.

  4. The examination of respondent's officers does not violate the doctrine of separate juridical personality. The doctrine of separate juridical personality provides that a corporation has a legal personality separate and distinct from those individuals acting for and on its behalf and from those comprising it. However, this legal fiction may be disregarded if it is used to perpetrate fraud, evade an existing obligation, or confuse legitimate issues. In this case, the examination of respondent's officers was not intended to impose liability on them but to ascertain the properties and income of respondent that could be subjected to execution to satisfy the final judgment. The objective was not to violate the separate juridical personality doctrine but to enforce the court's final judgment.

  5. The Supreme Court reversed and set aside the orders issued by the RTC, Branch 70 of Pasig City, and directed the said court to examine respondent's officers in accordance with the Supreme Court's Decision.

PRINCIPLES:

  • A writ of certiorari under Rule 65 is an extraordinary remedy limited to correcting errors of jurisdiction or grave abuse of discretion amounting to lack or excess of jurisdiction.

  • Grave abuse of discretion is defined as a capricious or whimsical exercise of judgment that is so patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law.

  • The court which rendered the judgment has supervisory control over the execution of its judgment. However, the court does not have the power to alter or amend a final and executory decision, except in certain recognized exceptions such as the correction of clerical errors.

  • The principle of finality of judgment and its immutability must be upheld, and any amendment or alteration that substantially affects a final and executory judgment is null and void for lack of jurisdiction.

  • Every court has the inherent power to amend and control its process and orders to make them conformable to law and justice.

  • The court may issue auxiliary writs and employ processes to execute its final judgment.

  • The court may stay or suspend the execution of its judgment if warranted by the higher interest of justice.

  • The court has the authority to modify its decision in the higher interest of justice or when supervening events warrant it.

  • The court can stay the enforcement of its decision based on antecedent facts that show fraud in its rendition or want of jurisdiction of the trial court.

  • The doctrine of separate juridical personality may be disregarded if used to perpetrate fraud, evade an existing obligation, or confuse legitimate issues.

  • The Regional Trial Court must properly examine the officers of the respondent in accordance with the directions given by the Supreme Court.