G.R. No. L-44169 - Gaa vs. Court of Appeals

The Republic of the Philippines, represented by the Department of Public Works and Highways (DPWH), expropriated the property of Cirilo Gotengco, Preciosa B. Garcia, and Emilia de Jesus on May 16, 1977, for the construction of the Manila South Expressway Extension (now South Luzon Expressway).
The expropriation case was filed before the Regional Trial Court (RTC) of Calamba City, Laguna, Branch 35, docketed as Civil Case No. 184-83-C.

On January 31, 2000, the RTC issued a Partial Decision awarding just compensation to the respondents, which was later modified on February 15, 2001, to correct the land area and adjust the amounts. The Modified Partial Decision ordered the Republic to pay:

The properties of Gotengco consisted of three lots (Lots A, B, and C) totaling 12,322 sq.m.
After the judgment became final, the Republic and Gotengco executed a Deed of Absolute Sale for Lot A (2,148 sq.m.) in the amount of ₱20,669,520.00, which was paid in three installments between 2002 and 2012.
A balance of ₱5,576,494.72 for just compensation remained unpaid by the Republic to Gotengco.

Nine years after the Modified Partial Decision became final, Gotengco filed an Omnibus Motion (May 19, 2010), seeking:

payment of accrued interest on the just compensation from finality until full payment; and
the surrender of the title covering Lot A or its nullification.

The Republic did not oppose the motion, and on July 20, 2010, the RTC granted the motion, ordering payment of 6% legal interest per annum from July 15, 1977 (date of actual taking) until fully paid.
Subsequent motions and oppositions ensued; the RTC on May 6, 2013, amended the Modified Partial Decision to include the interest as prayed by Gotengco, noting that neither party moved for reconsideration of the July 20, 2010 order.

The Republic filed a petition for certiorari with the CA alleging grave abuse of discretion by the RTC for amending a final and executory judgment to impose legal interest.
The CA denied the petition on February 26, 2016, holding that:

The imposition of legal interest is mandated by law (Section 10, Rule 67, Rules of Court).
Imposing interest compensates for delay in payment and aligns with the principle that just compensation must be prompt to be considered just.

The CA relied on Apo Fruits Corp. v. Land Bank of the Philippines, where the Supreme Court relaxed finality rules to impose interest on just compensation in expropriation cases.

Gotengco sold Lots B and C to Mario V. Tiaoqui during the pendency of the case.
Gotengco and Tiaoqui entered into a compromise agreement to share the unpaid compensation balance, which the RTC approved on September 23, 2016.
The Republic filed the instant petition for review on certiorari before the Supreme Court contesting the CA decision.

Whether the RTC committed grave abuse of discretion when it modified the Modified Partial Decision—which had already become final and executory—to include imposition of legal interest.
Whether the principle of immutability and finality of judgments prohibits modification of the judgment to include legal interest after finality.
Whether the exception laid down in Apo Fruits Corp. v. Land Bank of the Philippines applies to allow modification of a final judgment to impose legal interest.
Whether Gotengco’s claim for legal interest is barred by laches and/or res judicata.