G.R. No. 203241 ; July 10, 2013
RIZAL COMMERCIAL BANKING CORPORATION, PETITIONER, vs. FEDERICO A. SERRA, RESPONDENT.

FACTS

Respondent Federico Serra and petitioner RCBC entered into a Contract of Lease with Option to Buy over Serra’s land. RCBC exercised its option in 1984, but Serra refused to sell. RCBC filed a Complaint for Specific Performance. The RTC Makati, in a 1989 Order, directed Serra to execute a deed of sale in RCBC’s favor. This decision was affirmed by the Supreme Court and became final and executory on April 15, 1994. To evade this obligation, Serra donated the property to his mother, Leonida Ablao, in May 1989. Ablao subsequently sold it to Hermanito Liok. This compelled RCBC to file a separate Complaint for Nullification of the donation and sale. The RTC Masbate and later the Court of Appeals declared these transfers null and void, a ruling which attained finality on March 3, 2009.
Following the finality of the Annulment case, RCBC moved for execution of the 1989 Specific Performance decision on August 25, 2011. Serra opposed, arguing the motion was barred by the five-year period for execution by motion under the Rules of Court. The RTC Makati denied RCBC’s motion, opining that RCBC should have registered its interest earlier. RCBC’s motion for reconsideration was likewise denied, prompting this petition.

ISSUE

Whether the Regional Trial Court erred in holding that RCBC is barred from having the 1989 decision executed by motion.

RULING

The Supreme Court granted the petition, ruling that the five-year period for execution by motion was effectively suspended due to Serra’s own fraudulent actions. The Court clarified that while a final judgment may be executed by motion within five years from entry, exceptions exist where the delay is caused by the judgment obligor for his own advantage. Citing Camacho v. Court of Appeals, the Court held that initiatives by the judgment debtor which are beyond the creditor’s control interrupt or suspend the period.
Here, the delay was directly attributable to Serra’s simulated donation of the property, a blatant attempt to frustrate the final judgment. This wrongful act necessitated the Annulment case, which RCBC diligently pursued. The period for execution was therefore tolled during the pendency of that separate but essential action. The Annulment case became final only on March 3, 2009, and RCBC filed its motion for execution on August 25, 2011, well within the suspended five-year period. The Court emphasized that RCBC persistently pursued its rights, while Serra sought refuge in technicalities. A liberal interpretation of the rules is warranted to serve the ends of justice. The assailed RTC Orders were set aside, and the trial court was directed to issue the writ of execution.