GR L 59664; (December, 1984) (Digest)
G.R. No. L-59664 December 26, 1984
PATROCINIO SANTULAN, et al., petitioners, vs. JUDGE HECTOR C. FULE, et al., respondents.
FACTS
This case originated from a dispute over a foreshore land. In a prior 1977 Supreme Court decision (Santulan vs. Executive Secretary, G.R. No. L-28021), the Court affirmed an administrative order allowing the lease application of Julian Santulan, provided he reimbursed Antonio Lusin the appraised value of existing improvements on the land, amounting to P30,000. The Supreme Court’s final judgment did not include any provision for the payment of interest on this reimbursement amount.
Upon remand to the trial court for execution, Judge Hector C. Fule, in a 1981 order, directed the heirs of Santulan to pay the P30,000 to the heirs of Lusin “with legal interest” from 1955 until fully paid. The Santulan heirs appealed this imposition of 6% legal interest, arguing it was not part of the final and executory judgment of the Supreme Court.
ISSUE
Whether the trial court, in executing the final Supreme Court judgment, correctly imposed legal interest on the P30,000 reimbursement for improvements.
RULING
The Supreme Court ruled that the trial court’s order imposing legal interest was devoid of legal basis and must be set aside. The legal logic is clear and twofold. First, the imposition contravenes the finality and immutability of judgments. The Supreme Court’s 1977 decision constituted the “law of the case”; it definitively settled the obligations of the parties, which was solely the reimbursement of the principal sum of P30,000 without any mention of interest. A lower court cannot modify or add to a final judgment of a superior court upon remand for execution.
Second, the substantive law on interest does not justify its imposition. Article 2209 of the Civil Code on indemnity for damages through interest applies when an obligation to pay a sum of money is breached and the debtor incurs in delay. Here, Santulan’s obligation to reimburse was a condition imposed to prevent unjust enrichment and to allow his lease application to proceed, not a payment arising from a loan or a delay in fulfilling a monetary obligation. Furthermore, it was noted that the Lusin heirs had been in possession and receiving the fruits of the land, which are considered the equivalent of interest, making the additional exaction manifestly unjust. The orders imposing legal interest were therefore reversed.