Title
Supreme Court
Republic vs. Heirs of Gotengco
Case
G.R. No. 226355
Decision Date
Jan 24, 2018
The Republic expropriated properties for expressway construction; after final judgment, property owner sought interest nine years later. SC ruled immutability of judgment barred modification, and laches estopped claim due to unreasonable delay.

Case Summary (G.R. No. 85279)

Case Background and Initial Proceedings

On May 16, 1977, the Republic, through DPWH, expropriated properties owned by Cirilo Gotengco and others. The expropriation complaint was lodged before the Regional Trial Court (RTC) of Calamba City, Laguna. The RTC initially ordered payment of just compensation based on surveyed land areas and fixed values. After correction of land areas, the compensation amounts were adjusted to approximately Php 26.2 million for Gotengco’s properties. The Modified Partial Decision dated February 15, 2001, became final and executory.

Payments and Subsequent Motions

Following the finality of the decision, the Republic paid Gotengco Php 20.7 million in three installments, leaving a balance of about Php 5.58 million. Nine years later, in 2010, Gotengco filed a motion seeking payment of legal interest on the unpaid just compensation from the date of finality of judgment until full payment, and to compel the surrender of title to Lot A. The RTC granted the motion, ordering the Republic to pay 6% legal interest per annum starting July 15, 1977, the date of actual taking. The Republic did not oppose this order or file for reconsideration.

Trial Court’s Amendment of Judgment

In 2013, the RTC amended the Modified Partial Decision to include the 6% legal interest, recognizing that the interest rate had been omitted inadvertently. The Republic opposed this amendment, arguing that allowing modification after finality violated the doctrine of immutability of judgments. Nonetheless, the RTC upheld the order imposing legal interest.

Court of Appeals Decision

The Republic filed a petition for certiorari before the Court of Appeals (CA), challenging the RTC’s modification. On February 26, 2016, the CA denied the petition, ruling that the imposition of legal interest is mandated by law (Section 10, Rule 67, Rules of Court) and public policy. Citing the landmark case Apo Fruits Corporation v. Land Bank of the Philippines, the CA emphasized that just compensation must be prompt, and legal interest accrues to compensate for delay in payment, placing the property owner in a position as if payment were made immediately. The CA found no grave abuse of discretion in the RTC’s ruling.

Issues on Appeal

The sole issue for the Supreme Court’s resolution was whether the RTC committed grave abuse of discretion by modifying its final judgment to include legal interest, thereby violating the principle of immutability of judgments. The Republic claimed the RT Court and CA exceeded jurisdiction, as their rulings allowed modification of a final judgment, contrary to established procedural doctrine.

Doctrine on Immutability of Judgments

The Supreme Court reaffirmed that a final judgment is immutable and cannot be amended or modified even to correct errors, except in limited exceptions: (1) correction of clerical errors; (2) nunc pro tunc entries causing no prejudice; (3) void judgments; and (4) supervening circumstances making execution unjust or inequitable. The case at bar fell outside these exceptions because the imposition of legal interest was neither clerical nor nunc pro tunc, the judgment was not void, and no subsequent event justified modification.

Inapplicability of Apo Fruits Doctrine

The Court distinguished this case from Apo Fruits Corporation. In Apo Fruits, extraordinary circumstances and timely motions for reconsideration allowed relaxation of procedural rules to amend a final judgment to include legal interest due to a very long delay in payment (12 years). Moreover, in Apo Fruits, the RTC had explicitly awarded legal interest initially but rescinded it later. Here, the RTC never awarded legal interest, and Gotengco failed to timely assert entitlement. The delayed claim for interest—filed nine years after finality—barred the application of the Apo Fruits exception.

Estoppel by Laches and Res Judicata

The Court found that Gotengco was guilty of laches for the unreasonable delay in asserting his right to interest, despite knowledge of the Modified Partial Decision and participation in proceedings to execute it. Laches estops a party from asserting a right after an unreasonable delay that prejudices the other party. Gotengco’s failure to act timely and the Republic’s reliance on the final judgment barred the claim for interest.

Further, pursuant to Section 3, Rule 67 of the Rules of Court and the ruling in Urtula v. Republic, Gotengco’s failure to present claims or defenses regarding legal interest during the original expropriation case constituted waiver, and the principle of res judicata precluded a separate or delayed claim for interest.

Pol

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