GR 195641; (July, 2016) (Digest)
G.R. No. 195641 , July 11, 2016
TARCISIO S. CALILUNG, Petitioner, vs. PARAMOUNT INSURANCE CORPORATION, RP TECHNICAL SERVICES, INC., RENATO L. PUNZALAN and JOSE MANALO, JR., Respondents.
FACTS
The case involves the execution of a final and executory Supreme Court Resolution dated March 16, 2005, which upheld a judgment holding respondents jointly and severally liable to pay petitioner Tarcisio S. Calilung the principal amount of P718,750.00, with interest at 14% per annum from October 7, 1987 until full payment, plus attorney’s fees and costs. The obligation arose from a promissory note executed by RP Technical Services, Inc., guaranteed by Paramount Insurance Corporation. After the resolution became final, the case was remanded to the Regional Trial Court (RTC) for execution. During execution, petitioner moved for the recovery of compounded interest on the judgment debt. The RTC issued three conflicting orders: the first (July 28, 2009) denied compounded interest, ruling the decision only provided for simple interest; the second (September 1, 2010) granted compounded interest, reclassifying the surety obligation as one for payment of a sum of money; and the third (February 10, 2011) reinstated the first order, denying compounded interest. Petitioner directly appealed to the Supreme Court.
ISSUE
Whether compounded interest should be imposed on the judgment debt during execution, given that the final and executory decision only decreed interest at 14% per annum from October 7, 1987 until full payment.
RULING
The Supreme Court DENIED the petition and AFFIRMED the RTC orders dated July 28, 2009 and February 10, 2011. The Court held that compounded interest cannot be awarded. The final and executory decision specifically decreed only simple interest at 14% per annum from October 7, 1987. The Court emphasized that a final judgment can no longer be modified, and the duty of the executing court is to implement the judgment strictly as written, not to interpret or expand it. The Court distinguished the case from Eastern Shipping Lines, Inc. v. Court of Appeals, noting that the rule on interest earning interest under Article 2212 of the Civil Code applies from the time of judicial demand, but this must be expressly stated in the judgment. Since the final decision in this case did not provide for compounded interest, it cannot be imposed during execution. The RTC was directed to issue a writ of execution strictly in accordance with the decree.