G.R. No. 194653; February 8, 2012
ANTONIO MENDOZA, Petitioner, vs. FIL-HOMES REALTY DEVELOPMENT CORPORATION, Respondent.

FACTS

On June 13, 2000, spouses Roberto and Rebecca Beltran filed a complaint for specific performance and damages (Civil Case No. 2000-0272) against Antonio Mendoza before the Regional Trial Court (RTC) of Lipa City, alleging that Mendoza constructed a house encroaching on their property. Mendoza filed a third-party complaint against Fil-Homes Realty Development Corporation (Fil-Homes), claiming it caused him to build on the wrong lot.
On July 17, 2003, the RTC ruled: (1) Mendoza must compensate the Beltran spouses for the encroached lot or demolish the offending portion of his house; and (2) Fil-Homes must reimburse Mendoza for demolition expenses and pay him attorney’s fees, moral damages, and litigation costs. On appeal, the Court of Appeals (CA), in a March 22, 2005 Decision, affirmed the RTC but modified the awards: Fil-Homes was ordered to pay Mendoza actual and compensatory damages of ₱1,323,554.30 upon demolition of the house, and moral damages were reduced to ₱100,000. This CA Decision became final.
Mendoza moved for partial execution for the attorney’s fees, moral damages, and litigation costs. The RTC issued a writ of execution, and on August 30, 2007, Fil-Homes paid Mendoza ₱260,000 for these items. On the same date, the Beltran spouses executed an acknowledgment that the judgment in their favor had been fully satisfied, as Fil-Homes had given them another parcel of land in exchange for the encroached lot.
On April 22, 2008, after demolishing the encroaching portion of his house, Mendoza moved for a writ of execution to collect the ₱1,323,554.30 in actual and compensatory damages from Fil-Homes. Fil-Homes opposed, noting it had already settled the Beltran spouses’ claim. The RTC granted Mendoza’s motion on June 10, 2008. Fil-Homes filed a petition for certiorari with the CA, arguing grave abuse of discretion by the RTC.

ISSUE

Whether the Court of Appeals erred in denying the execution of the judgment for payment of actual and compensatory damages in favor of Mendoza.

RULING

The Supreme Court DENIED the petition and AFFIRMED the CA Decision.
The CA correctly held that execution of the award for actual and compensatory damages would be inequitable because Mendoza acted in bad faith in demolishing his house. The CA’s March 22, 2005 Decision awarded actual and compensatory damages to Mendoza only upon the demolition of the encroaching portion of his house. However, demolition was contingent on Mendoza’s failure to pay the Beltran spouses for the value of the encroached lot. The records showed that: (1) the Beltran spouses never demanded such payment; (2) Fil-Homes had already fully satisfied the judgment in favor of the Beltran spouses by August 30, 2007, through a land exchange; and (3) Mendoza was informed of this settlement before he commenced demolition on April 2, 2008. Thus, Mendoza’s demolition was unnecessary and in bad faith, as it was not compelled by any demand from the lot owners. Allowing execution of the actual damages award under these circumstances would mock the dispositive portion of the final judgment. The Court emphasized that while execution of a final decision is generally ministerial, exceptions exist to prevent injustice or when supervening events render execution unjust. Here, Fil-Homes’ settlement with the Beltran spouses and Mendoza’s bad faith constituted such exceptions, making execution of the actual damages award inequitable. The case was declared fully satisfied and terminated.