G.R. No. 162922 ; January 31, 2007
Banco Filipino Savings and Mortgage Bank, Petitioner, vs. Hon. Amalik P. Espinosa, Jr., Presiding Judge, Municipal Trial Court in Iloilo City, Branch 2, and Tala Realty Services Corporation, Respondents.

FACTS

This case involves an ejectment complaint filed by Tala Realty against Banco Filipino concerning a branch office in Iloilo City, docketed as G.R. No. 132051 . In a June 25, 2001 Decision, the Supreme Court ordered Banco Filipino to vacate the premises and pay monthly rentals. This Decision was later modified by a July 24, 2002 Resolution adding interest. However, pending Banco Filipino’s motion for reconsideration of that Resolution, the Court En Banc decided a separate but factually similar case, G.R. No. 137533 , involving a Malolos branch. In that En Banc Decision dated November 22, 2002, the Court ruled both parties were in pari delicto for circumventing banking laws and held Tala Realty could not collect unpaid rentals. Applying this En Banc ruling, the Third Division granted Banco Filipino’s motion for reconsideration via a September 3, 2003 Resolution, effectively superseding the prior orders in G.R. No. 132051 regarding rental liability.
Subsequently, the June 25, 2001 Decision and its subsequent Resolutions in G.R. No. 132051 were recorded as final and executory on September 26, 2003. Tala Realty then filed a motion for execution in the MTC, praying for enforcement of the June 25, 2001 Decision (vacate and pay rentals). At the hearing, Banco Filipino verbally opposed, arguing the Decision had been superseded by the September 3, 2003 Resolution. The MTC Judge, respondent Espinosa, granted the motion for execution on February 26, 2004, based solely on the June 25, 2001 Decision, and denied reconsideration.

ISSUE

Whether public respondent MTC Judge acted without or in excess of jurisdiction, or with grave abuse of discretion, in ordering the execution of the June 25, 2001 Decision.

RULING

Yes, the MTC Judge acted in excess of jurisdiction. While the MTC had the general power to rule on a motion for execution under Rule 39, Section 1 of the Rules of Court, it overstepped its authority by ordering execution based on a judgment that was no longer the final and operative resolution of the case. The Supreme Court clarified that the duty of a lower court in execution is to implement the final judgment of the appellate court as it stands at the time of execution. The entry of judgment on September 26, 2003 covered not only the June 25, 2001 Decision but also the subsequent July 24, 2002 and, crucially, the September 3, 2003 Resolutions. The September 3, 2003 Resolution, which applied the En Banc ruling, modified the substantive award by nullifying the order for Banco Filipino to pay rentals. Therefore, the final and executory judgment that should have been executed was the June 25, 2001 Decision as modified by the September 3, 2003 Resolution. By disregarding this modification and enforcing the unmodified 2001 Decision, the MTC Judge enforced a judgment that had been superseded, thereby acting in excess of his jurisdiction. The writ of certiorari is granted, and the assailed orders and writ of execution are nullified and set aside.