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FIRST DIVISION

G.R. No. L-64571 February 21, 1989

TEODORO N. FLORENDO, petitioner
vs.
HON. JUDGE LUIS R. RUIZ, CICERO D. CALDERON, ROBERT B. SILLIMAN and SILLIMAN UNIVERSITY, Respondents.

GANCAYCO, J.:

Before anything else, it is important to state that the merits of this case are not in issue. To be resolved in this petition for certiorari and mandamus is the correct interpretation of the dispositive portion of the Decision of the Court of Appeals in CA-G.R. No. 54616, dated August 29, 1980, which has long become final and executory.chanroblesvirtualawlibrarychanrobles virtual law library

The antecedent facts in the instant case are as follows: chanrobles virtual law library

Petitioner Teodoro N. Florendo was hired by respondent Silliman University as an assistant in its legal counsel office on July 1, 1949. On or before July 14, 1953, by action of the Board of Trustees of respondent university, petitioner was promoted to regular status. On June 26, 1956, petitioner was informed that he was fully employed as a member of the faculty and as secretary of the college of law of respondent university.chanroblesvirtualawlibrary chanrobles virtual law library

On or before March 20, 1962, for reasons unknown to him, petitioner was relieved as college secretary. Later or on May 28, 1962, he was informed that his name did not appear in the list of teachers in the same college for the incoming school year. Petitioner protested his dismissal but to no avail. Hence, on September 3, 1962, he filed a complaint for breach of contract with the Court of First Instance of Negros Oriental against Dr. Merton Munn the Dean of Instruction of respondent university, and all the private respondents herein.chanroblesvirtualawlibrary chanrobles virtual law library

After due hearing, the lower court found, among others, that petitioner was terminated from his employment without just cause and without being given the opportunity to be heard; that private respondents, defendants therein, were guilty of bad faith in not fulfilling their agreement with petitioner; and that as a direct result of his illegal dismissal, petitioner suffered besmirched reputation, wounded feelings, mental anguish, moral shock and social humiliation therefore entitling him to moral and exemplary damages. ¹chanrobles virtual law library

On October 31, 1972, the trial court, with Judge Cipriano Vamenta, Jr. presiding, rendered a Decision with the following dispositive portion:

IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered: chanrobles virtual law library

(a) Condemning the defendants to pay plaintiff jointly and severally the sum of FIFTEEN THOUSAND PESOS (P15,000.00) in concept of moral damages, and FIFTEEN THOUSAND PESOS (P15,000.00) as exemplary damages; chanrobles virtual law library

(b) Ordering defendants to pay plaintiff the sum of ONE THOUSAND EIGHT HUNDRED NINETY PESOS AND SEVENTEEN CENTAVOS (P1,890.17) as retirement and group annuity funds; chanrobles virtual law library

(c) Condemning the defendants to pay plaintiff jointly and severally the sum of SIX THOUSAND PESOS (P6,000.00) as attorney's fees;chanrobles virtual law library

(d) Dismissing defendants' Counterclaim for lack of legal basis; and chanrobles virtual law library

(e) With costs against the defendants.chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED. ²

Both parties appealed to the Court of Appeals. On August 29, 1980 the appellate court rendered a Decision with the following dispositive portion, subject of this petition:

WHEREFORE, except as modified herein-above the decision of the CFI of Negros Oriental dated October 31, 1972 is affirmed in all respects, with the modification that defendants- appellants, except defendant-appellant Merton Munn are ordered to pay, jointly and severally, the amounts stated in the dispositive portion of the decision, including the sum of P1,400.00 in concept of compensatory damages, with interest at the legal rate from the date of the filing of the complaint until fully paid.chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED. ³chanrobles virtual law library

Private respondents filed a petition with this Court questioning the said Decision. However, on October 19, 1981, said petition was denied for lack of merit.chanroblesvirtualawlibrarychanrobles virtual law library

On June 22, 1982, the Court of Appeals transmitted the records of the case to the Court of First Instance of Negros Oriental together with its Decision dated August 29, 1980 and the Entry of Judgment dated February 15, 1982.chanroblesvirtualawlibrary chanrobles virtual law library

On August 27, 1982, petitioner filed a "Motion for Issuance of an Order for a Writ of Execution of Judgment" with the Court of First Instance of Negros Oriental. On December 16, 1982, the trial court, issued the writ of execution sought-

As prayed for by the plaintiff, it appearing that the judgment in this case has already become final and executory; chanrobles virtual law library

Let a writ of execution issue for the enforcement of the judgment as modified by the Honorable Court of Appeals in its decision promulgated on August 29, 1980, in the following amounts:chanrobles virtual law library

P 15,000.00 - in concept of moral damageschanrobles virtual law library

15,000.00 - in concept of exemplary damages chanrobles virtual law library

1,890.17 - retirement and group annuity funds chanrobles virtual law library

6,000.00 - as attorney's fees chanrobles virtual law library

3,842.20 - as costs against defendants chanrobles virtual law library

1,400.00 - in the concept of compensatory damages chanrobles virtual law library

or a total sum of P 43,132.37 as principal obligation of the defendants with interest at 6% per annum from September 3, 1962 up to July 28, 1974 and 12% interest per annum from July 29, 1974 until fully paid.chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED. ⁴

On January 4, 1983, private respondents filed a "Motion for Reconsideration" which petitioner opposed.chanroblesvirtualawlibrary chanrobles virtual law library

When the judiciary was reorganized at that time, Judge Vamenta had to discontinue taking cognizance of the case and the same was re-raffled to the sala of respondent Judge Luis R. Ruiz. On March 22, 1983, Judge Ruiz issued an Order modifying the Order of Judge Vamenta dated December 16, 1982, thus:

WHEREFORE, the Order of the Court dated December 16, 1982 is hereby modified, that only compensatory damages should earn interest at 6% per annum from the date of the filing of the Complaint until fully paid.chanroblesvirtualawlibrarychanrobles virtual law library

Let a Writ of Execution be issued against the defendants. ⁵chanrobles virtual law library

Believing that Judge Ruiz erred in modifying the order of Judge Vamenta, petitioner filed a "Motion for Reconsideration" on March 28, 1983. However, said motion for reconsideration was denied by respondent Judge Ruiz in an order issued on May 13, 1983.chanroblesvirtualawlibrary chanrobles virtual law library

Hence, this petition, with petitioner maintaining that Judge Ruiz committed a grave abuse of discretion when he modified the previous order issued by Judge Vamenta.chanroblesvirtualawlibrary chanrobles virtual law library

The different interpretations of the two judges - Judge Vamenta and Judge Ruiz - of the dispositive portion of the Decision of the Court of Appeals can be readily seen in the two conflicting Orders they issued.chanroblesvirtualawlibrarychanrobles virtual law library

Petitioner insists that the Order of Judge Vamenta, which states that respondents must pay interest on the compensatory damages and on all the amounts stated in the Decision of the Court of First Instance at 6% per annum from September 3, 1982 up to July 28, 1974 and 12% per annum from July 29, 1974 up to its full payment, is the correct one. Private respondents, on the other hand, maintain that the Order of respondents Judge Ruiz which mandates the payment by private respondents of only 6% interest per annum on compensatory damages alone is in conformity with the dictates of the dispositive portion in question.chanroblesvirtualawlibrary chanrobles virtual law library

Clearly, then, the correct interpretation of the dispositive portion of the Decision of the Court of Appeals in CA-G.R. No. 54616 involves two issues. The first issue is on what amounts should interest be paid by private respondents. The second issue involves the exact amount of interest allowed by the Court of Appeals.chanroblesvirtualawlibrarychanrobles virtual law library

With regard to the first issue, We rule in favor of petitioner. A careful study of the dispositive portion of the Decision of the Court of Appeals would reveal that indeed, the intention of the Court of Appeals was to allow interest not only on compensatory damages but also on all the amounts specified in the dispositive portion of the Decision of the lower court. This is easily discerned in the following wording:

...defendants-appellants ..., are ordered to pay, jointly and severally, THE AMOUNTS STATED IN THE DISPOSITIVE PORTION OF THE DECISION, INCLUDING THE SUM OF P1,400.00 IN CONCEPT OF COMPENSATORY DAMAGES, WITH INTEREST AT THE LEGAL RATE FROM THE DATE OF THE COMPLAINT UNTIL FULLY PAID. ⁶ (Emphasis supplied.)

The foregoing explicitly orders the payment of legal interest on all the amounts stated in the dispositive portion of the Decision of the lower court and on the additional amount of P1,400.00 as compensatory damages. We cannot agree with Judge Ruiz that it was the intention of the Court of Appeals to award interest only on compensatory damages. Had this been true, the Court of Appeals would not have used the word "including" to connect the additional amount of P1,400.00 as compensatory damages to the original amounts stated in the Decision of the trial court. Instead, the Court of Appeals would have separately classified its disposition on compensatory damages making it definite and evident that only such compensatory damages should earn interest.chanroblesvirtualawlibrary chanrobles virtual law library

The construction of the dispositive portion itself leads this Court to believe that interest must be paid not only on compensatory damages but likewise on all the amounts originally stated in the Decision of the Court of First Instance. The use of a comma in between the phrases "including the sum of P1,400.00 in concept of compensatory damages" and "with interest at the legal rate ...:" applies not only to the preceding phrase "including the sum of P1,400.00 in concept of compensatory damages" but also to the earlier phrase "the amounts stated in the dispositive portion of the decision." chanrobles virtual law library

In People v. Subido, ⁷ the issue resolved by this Court pertained to the correct interpretation of the dispositive portion of the Decision of the Court of First Instance of Manila in a certain criminal case which reads:

From the facts above stated the Court finds the accused guilty of libel and he is hereby sentenced to three (3) months of arresto mayor with the accessory penalties of the law, to pay a fine of five hundred (P500.00) pesos, to indemnify the offended party, Mayor Arsenio Lacson, in the sum of ten thousand (P10,000.00) pesos, with subsidiary imprisonment in case of insolvency, and to pay the costs. ⁸chanrobles virtual law library

The issue to be resolved was whether or not the accused, under the above-written dispositive portion, should serve subsidiary imprisonment in case of insolvency for non- payment of either the fine of P500.00 or the indemnity of P10,000.00 or whether he should be required to serve subsidiary imprisonment only in case of non-payment of the indemnity.chanroblesvirtualawlibrary chanrobles virtual law library

This Court speaking through Mr. Justice Martin, resolved the issue this way:

A careful scrutiny of the decision of the trial court reveals that the clause 'with subsidiary imprisonment in case of insolvency' is separated by a comma (,) from the preceding clause 'is hereby sentenced to three months of arresto mayor with the accessory penalties of the law, to pay a fine of five hundred (P500.00) pesos, to indemnify the offended party, Mayor Arsenio Lacson, in the sum of Ten Thousand Pesos (P10,000.00) pesos. (sic)' The use of a comma (,) in the part of the sentence is to make (the phrase the subsidiary imprisonment in case of insolvency' refer not only to non- payment of the indemnity, but also to non-payment of the fine.chanroblesvirtualawlibrary chanrobles virtual law library

If the lower court intended to make the phrase with subsidiary imprisonment in case of insolvency' refer to non- payment of indemnity only and not to the non-payment of the fine, it would have omitted the comma (,) after the phrase 'to indemnify the offended party, Mayor Arsenio Lacson in the amount of P10,000.00 pesos,' so that the decision of the lower court would read: chanrobles virtual law library

From the facts above stated the Court finds the accused guilty of libel and he is hereby sentenced to three (3) months of arresto mayor, to pay a fine of five hundred (P500.00) pesos, to indemnify the Offended party, Mayor Arsenio Lacson, in the sum of ten thousand (P10,000.00) pesos with subsidiary imprisonment in case of insolvency, and to pay the costs.' ⁹

Had the Court of Appeals really intended to allow interest only on compensatory damages, its dispositive portion would have been worded this way:

...defendants-appellants ..., are ordered to pay jointly and severally the following: chanrobles virtual law library

(1) the amounts stated in the dispositive portion of the Decision; and chanrobles virtual law library

(2) the sum of P1,400.00 in concept of compensatory damages with interest at the legal rate from the date of the complaint until fully paid.

As to the issue on the correct amount of interest to be paid, it is to be noted that the Court of Appeals ordered the payment of interest "at the legal rate" from the time of the filing of the complaint. On this matter, We agree with Judge Ruiz that the legal rate of interest to be applied is 6% per annum as provided for under Article 2209 of the Civil Code. ¹⁰ Central Bank Circular No. 416 dated July 29, 1974, which fixes the legal rate of interest at 12% per annum is not applicable here since the circular applies only to loans or forbearances of money, goods or credits and court judgment thereon. ¹¹ Said circular does not apply to actions based on a breach of employment contract like the case at bar.chanroblesvirtualawlibrary chanrobles virtual law library

WHEREFORE, the Order of Judge Luis R. Ruiz dated March 22, 1983 is hereby MODIFIED in that all the amounts specified in the dispositive portion of the Decision of the Court of First Instance and the sum of P1,400.00 as compensatory damages shall earn interest of six percent (6%) per annum from the time the complaint was filed until the same is fully paid. Considering that this case has been pending for more than twenty-six (26) years, the immediate execution of this Decision is in order. No costs.chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED.

Endnotes:

1 Page 46, Rollo.chanrobles virtual law library

2 Page 3, Rollo.chanrobles virtual law library

3 Pages 48 and 49, Rollo.chanrobles virtual law library

4 Page 19, Rollo.chanrobles virtual law library

5 Page 18, Rollo.chanrobles virtual law library

6 Pages 48 and 49, Rollo.chanrobles virtual law library

7 66 SCRA 545 (1975).chanrobles virtual law library

8 Ibid, at 546 and 547.chanrobles virtual law library

9 66 SCRA 549-550.chanrobles virtual law library

10 Art. 2209 of the New Civil Code reads:

"If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of interest agreed upon, and in the absence of stipulation, the legal interest which is six percent per annum."

11 Central Bank Circular No. 416; In Reformina vs. Tomol, Jr., 139 SCRA 260, it was held that the judgments spoken of and referred to in CB Circular No. 146 are judgments in litigations involving loans or forbearance of any money, goods or credits. Any other kind of monetary judgment which has nothing to do with, nor involving loans or forbearance of any money, goods or credits does not fall within the coverage of the said law for it is not within the ambit of the authority granted to the Central Bank.