Apr 98 min read

METROPOLITAN BANK AND TRUST CO. vs. RADIO PHILIPPINES NETWORK, INC., et al., G.R. No. 190517. July 27, 2022

Updated: Apr 10

RE: FINALITY OF JUDGMENT, Effect of

Prefatorily, it must be stressed that all the issues between the parties are deemed resolved and laid to rest once a judgment becomes final.[15] No other action can be taken on the decision[16] except to order its execution.[17] Here, it is undisputed that the RTC's judgment in Civil Case No. Q-89-3580 declaring Traders Royal liable to pay actual damages and attorney's fees to RPN, IBC and BBC had attained finality. Corollarily, the RTC is correct in issuing a writ of execution. Nevertheless, the RTC should have confined the order of execution in a manner prescribed in the rules. Apropos is Section 9, Rule 39 of the Revised Rules of Court, which provides how judgments for money shall be enforced, to wit:

SEC. 9. Execution of judgments for money, how enforced. —

(a) Immediate payment on demand. — The officer shall enforce an execution of a judgment for money by demanding from the judgment obligor the immediate payment of the full amount stated in the writ of execution and all lawful fees. The judgment obligor shall pay in cash, certified bank check payable to the judgment obligee, or any other form of payment acceptable to the latter, the amount of the judgment debt under proper receipt directly to the judgment obligee or his authorized representative if present at the time of the payment. The lawful fees shall be handed under proper receipt to the executing sheriff who shall turn over the said amount within the same day to the clerk of court of the court that issued the writ.

If the judgment obligee or his authorized representative is not present to receive payment, the judgment obligor shall deliver the aforesaid payment to the executing sheriff. The latter shall turn over all the amounts coming into his possession within the same day to the clerk of court of the court that issued the writ, or if the same is not practicable, deposit said amounts to a fiduciary account in the nearest government depository bank of the Regional Trial Court of the locality.

The clerk of said court shall thereafter arrange for the remittance of the deposit to the account of the court that issued the writ whose clerk of court shall then deliver said payment to the judgment obligee in satisfaction of the judgment. The excess, if any, shall be delivered to the judgment obligor while the lawful fees shall be retained by the clerk of court for disposition as provided by law. In no case shall the executing sheriff demand that any payment by check be made payable to him.

(b) Satisfaction by levy. — If the judgment obligor cannot pay all or part of the obligation in cash, certified bank check or other mode of payment acceptable to the judgment obligee, the officer shall levy upon the properties of the judgment obligor of every kind and nature whatsoever which may be disposed of for value and not otherwise exempt from execution giving the latter the option to immediately choose which property or part thereof may be levied upon, sufficient to satisfy the judgment. If the judgment obligor does not exercise the option, the officer shall first levy on the personal properties, if any, and then on the real properties if the personal properties are insufficient to answer for the judgment.

The sheriff shall sell only a sufficient portion of the personal or real property of the judgment obligor which has been levied upon.

When there is more property of the judgment obligor than is sufficient to satisfy the judgment and lawful fees, he must sell only so much of the personal or real property as is sufficient to satisfy the judgment and lawful fees.

Real property, stocks, shares, debts, credits, and other personal property, or any interest in either real or personal property, may be levied upon in like manner and with like effect as under a writ of attachment.

(c) Garnishment of debts and credits. — The officer may levy on debts due the judgment obligor and other credits, including bank deposits, financial interests, royalties, commissions, and other personal property not capable of manual delivery in the possession or control of third parties. Levy shall be made by serving notice upon the person owing such debts or having in his possession or control such credits to which the judgment obligor is entitled. The garnishment shall cover only such amount as will satisfy the judgment and all lawful fees.

The garnishee shall make a written report to the court within five (5) days from service of the notice of garnishment stating whether or not the judgment obligor has sufficient funds o credits to satisfy the amount of the judgment. If not, the report shall state how much funds or credits the garnishee holds for the judgment obligor. The garnished amount in cash, or certified bank check issued in the name of the judgment obligee, shall be delivered directly to the judgment obligee within ten (10) working days from service of notice on said garnishee requiring such deliver, except the lawful fees which shall be paid directly to the court.

In the event that there are two or more garnishees holding deposits or credits sufficient to satisfy the judgment, the judgment obligor, if available, shall have the right to indicate the garnishee or garnishees who shall be required to deliver the amount due; otherwise, the choice shall be made by the judgment obligee.

The executing sheriff shall observe the same procedure under paragraph (a) with respect to the delivery of payment to the judgment obligee. (Emphases supplied)Under the rules, the executing officer is required to first demand from the judgment debtors the immediate payment of the full amount stated in the writ of execution and all lawful fees. The executing officer shall demand the payment either in cash, certified bank check or any other mode of payment that is acceptable to the judgment creditor. If the judgment debtors cannot pay the judgment obligation using these methods, they can opt to choose which among their personal properties can be levied upon. If the judgment debtors do not exercise this option immediately or when they are absent or cannot be located, they then waive such right and the executing officer can levy the judgment debtors' personal properties, if any, and then the real properties if the personal properties are insufficient to answer for the judgment.[18] The executing officer may also levy personal property by garnishment by reaching credits belonging to the judgment debtors and owing to them from a stranger to the litigation.[19] In this mode of satisfying the judgment known as garnishment, the executing officer levies on the debts due the judgment debtors including bank deposits, financial interests royalties, commissions, and other personal property not capable of manual delivery in the possession or under the control of third parties. The levy may be done only if the judgment obligor cannot pay all or part of the obligation in cash or in such other manner acceptable to the judgment obligee.

Compendious Bar Reviewer on Remedial Law (2024) [Softcover] by Dean Nilo T. Divina |

In this case, the RTC deviated from the manner prescribed in the rules when it directed the enforcement of the money judgment "against any and all assets of TRB x x x and/or against the Escrow Fund established by TRB and Bank of Commerce with the Metropolitan Bank and Trust Company."[20] To reiterate, the execution of a money judgment requires the sheriff to first make a demand on the judgment debtor Traders Royal for the immediate payment of the judgment obligation in cash, certified bank check or any other mode of payment that is acceptable to the judgment creditors RPN, IBC, and BBC. It is only when Traders Royal cannot pay all or part of the obligation may the sheriff resort to the levy of its properties including the escrow fund with Metrobank. In this circumstance, the executing officer must serve a notice upon Metrobank which is then obliged to deliver Traders Royal's credits to the proper officer issuing the writ. As explained in National Power Corp. v. Philippine Commercial and Industrial Bank,[21] it is through the service of the writ of garnishment that the trial court acquires jurisdiction to bind the third person or garnishee to compliance with all its orders and processes, viz:

Garnishment has been defined as a specie of attachment for reaching credits belonging to the judgment debtor and owing to him from a stranger to the litigation. Under this rule, the garnishee [the third person] is obliged to deliver the credits, etc. to the proper officer issuing the writ and "the law exempts from liability the person having in his possession or under his control any credits or other personal property belonging to the defendant x x x if such property be delivered or transferred x x x to the clerk, sherift or other officer of the court in which the action is pending."

Pre-Week Reviewer In Remedial Law (2022) [Softcover] by Atty. Ed Vincent A. Albano III

A self-evident feature of this rule is that the court is not required to serve summons on the garnishee, nor is it necessary to implead the garnishee in the case in order to hold him liable. As we have consistently ruled, all that is necessary for the trial court to lawfully bind the person of the garnishee or any person who has in his possession credits belonging to the judgment debtor is service upon him of the writ of garnishment. Through service of this writ, the garnishee becomes a "virtual party" to or a "forced intervenor" in the case, and the trial court thereby acquires jurisdiction to bind him to compliance with all orders and processes of the trial court, with a view to the complete satisfaction of the judgment of the court.[22] (Emphases supplied.)Verily, the RTC cannot require Metrobank to comply with all its orders and processes absent the service of a writ of garnishment. Yet, the RTC readily assumed that it has jurisdiction over Metrobank as Traders Royal's escrow agent. The RTC even ordered Metrobank to submit a detailed report on the status of the escrow fund and to bring documents of withdrawals from the escrow account. To be sure, the RTC has yet to grant RPN, IBC, and BBC's motion for execution of judgment when it issued the subpoena against Metrobank and prematurely inquired into the status of the escrow account. The prudent course of action for the RTC is to deny the request for subpoena and to issue the order of execution pursuant to Section 9, Rule 39 of the Rules of Court. Indeed, the procedure for the garnishment of debts and credits will allow the RTC to seasonably ascertain the status of the escrow account. The rules require the third person or garnishee to make a written report to the court within five (5) days from service of the notice of garnishment stating whether the judgment debtor has sufficient funds to satisfy the judgment obligation.[23] The written report serves the same purpose as the documents which the subpoena required Metrobank to produce.

Primer-Reviewer on Remedial Law Vol. 1 (2023) [Softcover] by Prof. Manuel R. Riguera

On this score, the Court reminds that while the expeditious and efficient execution of court orders and writs is commendable, it should not, under any circumstance, be done by departing from the Rules governing the same.[24] More importantly, every litigation must necessarily come to an end and the prevailing parties must be afforded the fruits of their victory.[25] Notably, this case was decided with finality in 2002 but remains unexecuted up to this day. The Court cannot allow the judgment award to be reduced to a mere empty triumph. The Court now write finis to this long legal battle. After all, the execution and satisfaction of the judgment is the life of the law.[26]