G.R. No. 138463 - Heirs of Reyes vs. Calumpang

Filipro, Inc. (petitioner) initiated legal action against issues arising from an allegedly altered check.
Permanent Savings & Loan Bank, through its duly appointed receiver/liquidator, became involved as respondent.
The dispute eventually encompassed multiple parties including Philippine Banking Corporation (Philbank), Allied Banking Corporation (Allied Bank), and the Central Bank of the Philippines.

On January 17, 1984, Filipro, Inc. filed a damage suit with the Regional Trial Court of Makati against Philbank for clearing a patently altered check issued on July 12, 1983.
The check, originally made out to Filipro, Inc. by Mr. So Peng Tiam, was stolen by an employee, Jessie Fuentes, who had altered the company name by crossing out “INC” on the check.
Fuentes’s act of depositing the altered check in an account at the respondent bank, followed by its subsequent processing through Allied Bank and clearing by Philbank, set the stage for ensuing legal actions.

Filipro’s original complaint against Philbank for damages.
A third-party complaint by Philbank against Allied Bank concerning a guarantee on the check.
Allied Bank’s fourth-party complaint against Permanent Savings & Loan Bank seeking reimbursement.

The trial court declared Permanent Savings & Loan Bank in default on June 6, 1986 because its representatives repeatedly failed to appear for witness cross-examinations.
A partial decision was rendered on July 2, 1986, holding the bank liable to Allied Bank.
An order on September 5, 1988 reaffirmed the respondent bank’s default by waiving its right to cross-examine Allied Bank’s witnesses.
On February 20, 1989, despite a motion to dismiss based on its receivership status (placed under receivership on December 17, 1984 by the Central Bank), the trial court held that the judgment of default remained valid and executory.

On October 16, 1989, a compromise agreement was entered into by Filipro, Philbank, and Allied Bank, stipulating:

Philbank admitted liability to Filipro, Inc. for the sum of P547,000.00, inclusive of interest, attorney’s fees, and litigation expenses.
Allied Bank admitted liability to Philbank for the same amount plus an additional P10,000.00 for litigation fees and expenses.
The agreement noted that the trial court’s partial decision against Permanent Savings (as rendered on July 2, 1986) was yet final and executory.

The trial court approved the compromise agreement and, on November 7, 1989, rendered judgment in accordance thereto.

Permanent Savings & Loan Bank (respondent) later filed a petition for certiorari and prohibition on November 27, 1992, contesting previous orders, over three years after the compromise judgment.
The Court of Appeals dismissed the petition but concurrently ordered Filipro, Inc. and Philbank to remit P547,000.00 and P10,000.00, respectively, to the receiver of Permanent Savings & Loan Bank in an insolvency proceeding (SP No. 85-3371).
The filing delay and the respondent bank’s omission to contest the compromise judgment played a significant role in the subsequent rulings.

The petitioner raised the sole issue regarding the appropriateness of ordering the remittance of funds to the receiver despite the finality of the compromise agreement.
The central controversy became the tension between the doctrine of the finality and unalterability of judgments and the subsequent action by the Court of Appeals modifying the lower court’s judgment by ordering remittance.

Whether the Court of Appeals erred in modifying the trial court’s final and executory judgment by ordering Filipro, Inc. and Philbank to remit the sums of P547,000.00 and P10,000.00, respectively, to the receiver of Permanent Savings & Loan Bank.
Whether the principle of finality in judgment, particularly one based on a compromise agreement, prevents any subsequent alteration or modification even if a petition for certiorari and prohibition was filed.
Whether the late filing of the petition for certiorari and prohibition (filed more than three years after the judgment) should bar any review or modification of the final judgment.