G.R. No. 90676 ; June 19, 1991
STATE INVESTMENT HOUSE, INC., petitioner, vs. THE HONORABLE COURT OF APPEALS, HON. JUDGE PERLITA J. TRIA TIRONA, Presiding Judge of the Regional Trial Court of Quezon City, Branch CII and SPS. RAFAEL and REFUGIO AQUINO, respondents.

FACTS

Respondent spouses Rafael and Refugio Aquino pledged shares of stock to petitioner State Investment House, Inc. (State) to secure a loan (Account No. IF-82-0904-AA). Upon maturity, they tendered payment of the principal and demanded the release of the shares. State refused, claiming the pledge also secured a separate, unpaid loan of another couple. The spouses sued. The trial court (Judge Fortun) and the Court of Appeals ruled that the pledge secured only the spouses’ subsequent loan, ordering State to release the shares “upon payment of the loan” under Account No. IF-82-0904-AA. This decision became final.
During execution, a dispute arose over whether “upon payment of the loan” included interest. The spouses filed a motion for clarification. The trial court, now through Judge Tirona, issued a clarificatory decision stating payment meant the principal amount only, “without interest, penalties and other charges.” The Court of Appeals affirmed, holding the clarification merely restated the original decision. State appealed, arguing the clarification was a substantive alteration of a final judgment.

ISSUE

Whether the trial court, through Judge Tirona, validly clarified the final and executory decision of Judge Fortun to exclude the payment of interest on the loan.

RULING

No. The Supreme Court reversed the decisions of the Court of Appeals and Judge Tirona. The Court held that while a final judgment may be clarified to correct clerical errors or supply inadvertent omissions by reference to the body of the decision, the clarification issued by Judge Tirona constituted a substantive amendment, which is prohibited.
The legal logic is twofold. First, the original dispositive portion ordering payment of the “loan” inherently included the obligation to pay stipulated interest, as this is an essential component of a loan under Article 1956 of the Civil Code. The body of Judge Fortun’s decision did not contain any finding that the spouses were exempt from paying interest; thus, the clarification excluding interest introduced a new substantive matter. Second, on the merits, the spouses’ mere tender of payment, without consignation, did not extinguish their obligation to pay interest from the time of loan maturity. To allow them to retain and use the loan principal after maturity without paying interest would result in unjust enrichment at the creditor’s expense, which the law seeks to prevent. Therefore, the valid clarification was to order payment of the principal plus the stipulated interest.