G.R. No. 192285 - Encarnacion vs. Johnson

Private respondent State Investment House, Inc. (SIHI) filed an action for a sum of money against petitioner Delta Motors Corporation (DELTA) in the Regional Trial Court (RTC) of Manila, Branch VI, docketed as Civil Case No. 84-23019.
DELTA was declared in default. On 5 December 1984, the RTC rendered a decision ordering DELTA to pay SIHI P20,061,898.97 plus 25% attorney’s fees and costs of suit.

The decision could not be served personally or by registered mail due to DELTA’s earlier dissolution, but DELTA’s operations had been taken over by the Philippine National Bank (PNB).
SIHI moved, on 4 November 1986, for service of the decision by publication, which was allowed; the decision was published in Thunderer, a Manila weekly newspaper.
After publication, SIHI moved for execution, which the trial court granted on 11 March 1987, finding no appeal had been taken despite publication.
Execution was made on DELTA’s properties in Iloilo and Bacolod City.

DELTA filed a special civil action for certiorari before the Court of Appeals (CA), docketed as CA-G.R. SP No. 23068, claiming:

a) The trial court lacked jurisdiction due to invalid service of summons. b) The judgment was void and not final or executory.

On 22 January 1991, the CA ruled against DELTA on jurisdiction but found no showing that the judgment was properly served to PNB as DELTA’s successor, hence judgment was not final and executory.
The CA held that service by publication did not cure the defect and allowed DELTA to appeal once service had been made.

DELTA moved for reconsideration claiming lack of valid service and invalid RTC decision; SIHI insisted DELTA still existed and had lost the right to appeal.
CA denied these motions on 27 May 1991.
DELTA sought review via petition for certiorari (G.R. No. 100366), which was denied for procedural non-compliance on 16 September 1991; subsequent motions were also denied.
On 12 November 1991, DELTA filed a Notice of Appeal with the RTC from the 1984 decision.
SIHI moved to dismiss the appeal as late, arguing the 15-day appeal period commenced on receipt of certified copy on 21 September 1990.
The trial court dismissed the Notice of Appeal on 3 June 1992; DELTA’s motion for reconsideration was also denied on 14 September 1992.

a) Annulment of orders dismissing the Notice of Appeal and denying reconsideration. b) Elevation of the case records to the CA.

CA issued a restraining order against enforcing the 1984 RTC decision on 30 October 1992.
On 17 June 1993, CA set aside RTC’s orders dismissing the appeal and elevated records to the CA.
SIHI appealed to the Supreme Court in G.R. No. 110677, contesting DELTA’s right to appeal due to lapse of time.

While G.R. No. 110677 was pending, DELTA filed in CA-G.R. SP No. 29147 (14 February 1994) an Omnibus Motion to:

a) Declare the 11 March 1987 order for writ of execution null and void. b) Declare the writ of execution and all execution proceedings null and void.

SIHI opposed on grounds of jurisdiction, res judicata, and forum shopping.
CA, in a 7 June 1994 resolution, noted the motion but declined to act due to pending Supreme Court petition.
After denial of SIHI’s Supreme Court petition (18 July 1994) and motion for reconsideration (21 September 1994), DELTA renewed motion to resolve the Omnibus Motion on 26 October 1994.

CA denied DELTA’s Omnibus Motion on 5 January 1995, reasoning the motion raised issues not included in the petition and thus beyond CA’s jurisdiction under the pending case.
DELTA moved for reconsideration/clarification (27 January 1995) claiming issues were incidental to CA jurisdiction and could not be brought before RTC as records had been elevated.
SIHI filed a motion for clarification (2 February 1995) requesting deletion of a paragraph in the 5 January resolution as obiter dictum.
CA granted SIHI's motion for clarification and denied DELTA’s reconsideration on 14 July 1995, amending the resolution to delete the paragraph and reiterating the limited scope of issues before the CA at that time.

DELTA filed the instant petition challenging the CA resolutions for denying its Omnibus Motion and striking out part of the resolution as obiter dictum.
Both parties submitted memoranda.
The Supreme Court found no reversible error by the CA in denying the Omnibus Motion or in striking out the obiter dictum paragraph.

Whether the Court of Appeals erred in denying DELTA’s Omnibus Motion that sought to nullify the writ of execution and related orders which had already been issued and executed.
Whether the Court of Appeals had jurisdiction to rule on the Omnibus Motion filed during the pendency of the petition for certiorari (CA-G.R. SP No. 29147).
Whether the court erred in deleting the challenged paragraph of the Court of Appeals resolution on the ground that it was obiter dictum.