G.R. No. 162277, December 7, 2005
Corazon Suyat, Pacita Uy Tan, Rodrigo de la Rosa, Ruben de la Rosa, and Baguio Garden Hotel-Apartments, Inc. vs. Hon. Annie Gonzales-Tesoro, Director of the Securities and Exchange Commission, Baguio Extension Office; Ester Lau; and Sheriff Romeo R. Florendo

FACTS

The individual petitioners, officers of Baguio Garden Hotel Apartments, Inc., were adjudged liable by the Securities and Exchange Commission (SEC) for various corporate irregularities, including unaccounted cash, unauthorized loans, and unpaid cash advances and rentals. The SEC’s 1998 decision ordered them to make specific monetary reimbursements to the corporation and to undertake a proper accounting of corporate finances for certain years through a certified public accountant (CPA) before any distribution of surplus profits. This decision became final and executory.
Upon motion for execution, the SEC issued a writ. Petitioners then filed a Motion to Stay Execution regarding the monetary awards (items 1 & 2 of the dispositive portion) and requested execution only of the accounting provisions (items 3 & 4). The SEC granted this, quashing a notice of garnishment and ordering the appointment of a CPA to perform the required audit, whose findings would be final and binding. The parties jointly appointed an auditor and agreed in writing to be bound by his report.

ISSUE

Whether the SEC and the Court of Appeals erred in issuing a subsequent writ of execution that enforced the monetary liabilities of petitioners based on the auditor’s report, instead of limiting execution to the accounting and distribution of profits.

RULING

The Supreme Court denied the petition and affirmed the appellate court’s decision. The Court held that the execution of a final and executory judgment is a matter of right for the prevailing party and a ministerial duty of the court. The SEC’s initial order for an audit did not modify or vacate the final 1998 judgment; it merely prescribed a procedural mechanism for its proper implementation. The appointed auditor’s report, which the petitioners unconditionally agreed to be bound by, simply quantified and confirmed the specific monetary liabilities already established in the final decision.
The legal logic is clear: a final judgment must be executed as rendered. The audit was not a new proceeding but a means to ascertain the precise amounts due under the existing judgment, particularly for set-off against potential profit shares. Petitioners’ agreement to be bound by the audit findings precludes them from assailing the subsequent writ of execution that enforced those very findings. The execution did not alter the judgment but faithfully carried it out based on the binding factual determinations made through the procedure petitioners themselves consented to.