SOLIDBANK CORPORATION VS.

COURT OF APPEALS AND PRUDENTIAL

GUARANTEE AND ASSURANCE, INC.
G.R. No. 138131, March 12, 2002

FACTS: This case involves the execution of the Decision of the RTC of Manila in
Solidbank Corporation vs. Wear Me Garments Manufacturing Inc., Angelita Amparo Go,
and spouse Arnold A. Go, Leonila Cui, Prudential Guarantee and Assurance Inc., and
Oriental Assurance Corporation.
Said decision was rendered in favour of Solidbank holding that spouses Go are
liable to pay Solidbank under the loan of P1.2M and under 5 trust receipts
P4,797,294.00 plus interests; that Prudential Guarantee and Assurance, Inc. (PGAI)
and Oriental Assurance Co. (OAC) are liable to pay Solidbank, together with spouses
Go, the above amounts but limited to the insurance coverage assigned to
Solidbank under 2 fire insurance policies; that Cui is liable to Solidbank, together
with all the defendants, but only with respect to the loan of P1.2M plus interest.

The RTC ordered all defendants jointly and severally pay Solidbank a sum equal
to 10% of the amounts above payable as attorney’s fees plus the costs of the suit.
Said decision became final and executory.

On motion of Solidbank, the RTC issued a writ of execution. Pursuant to said

writ, a demand letter was sent to PGAI as to the amount collectible from it in the total of
P9,210,666,66. PGAI’s deposit in the Philippine Commercial International Bank (PCI
Bank) in the amount of P2.3 M was garnished in satisfaction of the writ. PGAI paid the
execution amount of P9,210, 666.66 SUBJECT TO THE FINAL DETERMINATION OF
THE LIABILITY OF PRUDENTIAL GUARANTEE AND ASSURANCE INC. UNDER THE
JUDGMENT IN SAID CASE.

PGAI filed a motion to correct the Writ of Execution contending that the phrase
‘interest and other charges’ in the writ should be deleted and that it should be refunded
the excess, after deducting from P9,210,666.66 the insurance coverage amounting to
P5M, and the 10% attorneys’ fees in the amount of P500,000, plus the cost of suit. The
RTC denied PGAI’s motion.

PGAI filed a petition for certiorari with the CA which granted the petition and set
aside the assailed order and writ of execution issued by the RTC. The CA held that the
liability of PGAI is limited to P5 M (the extent of the coverage of the insurance policies
assigned to Solidbank by spouses Go; plus 10% of P5 M or P500, 000 as attorneys
fees; and the cost of suit). The CA ordered Solidbank to refund to PGAI P3,710,666.66
in excess to the amount paid by PGAI plus interest; and ordered the sheriff to lift the
garnishment of PGAI’s bank deposit with PCI Bank.

The CA denied the motion for reconsideration filed by Solidbank.

ISSUES:
1. W/N the CA totally ignored the dispositive portion of RTC’s decision and the
judicial admission made by PGAI in holding that the joint and several liability of
PGAI has been limited to the extent of the coverage of fire insurance policies and
did not provide for payment of interest to Solidbank.

2. W/N the CA gravely erred in not holding that the case of Villanueva vs. CA applies
to the instant case considering that there was no provision in the dispositive
portion of the decision of the RTC which decreed the payment of interest.

3. W/N the CA seriously erred in penalizing Solidbank with interest payments of

P3,710,666.66 that it ordered Solidbank to refund to PGAI despite the absence of
any finding by the CA that the computation was done in bad faith or was tainted
with malice or fraud, and despite its own finding that Solidbank is entitled to
interest and charges as a result of the instant controversy.
 4. W/N the CA gravely erred in ordering that lifting of the garnishment on PGAI’s
deposit with PCI Bank amounting to P2.3 M.

5. W/N the CA seriously erred in not holding that PGAI is barred and is estopped
from questioning the correctness of the amount which it voluntarily paid the MTC
sheriffs.

HELD:

1. The dispositive portion of RTC’s decision and writ of execution limited the liability of
PGAI to the following: a) P5 M as the extent of the insurance coverage assigned to
Solidbank under 2 fire insurance policies; b) 10% attorney’s fees; and c) the cost of
suit. Clearly, there is NO mention as to the payment of interest. If RTC intended to
impose interest, it would have expressly so stated, but it did not. Thus, it cannot, in
the execution of the decision, modify the same by ordering private respondent to pay
interest. It is a settled general principle that a writ of execution just conform
substantially to every essential particular of the judgment promulgated. Execution
not in harmony with the judgment is bereft of validity. It must conform, more
particularly, to that ordained or decreed in the dispositive portion of the decision.

2. The case of Villanueva vs. CA invoked by Solidbank has no application in the case
at bar. In that case the Court upheld the imposition of interest on the liability of the
parties concerned BUT the decisions modified with respect to the payment of
interest were not final and executory decisions, but rather, decisions subject of
petitions for review. The imposition of interest in that case was perfectly within the
authority of the Court. Such is not the case in the case at bar. The present
controversy involving a final and executory judgment is evidently anchored on an
entirely different factual milieu. Hence, Solidbank’s reliance on said case is
misplaced.

3. The SC finds merit in the 3 rd issue raised by Solidbank. The interest imposed by the
CA on the amount refundable to PGAI in excess of P9,210,666,66 is in the concept
of damages which must have factual and legal basis. As no justification was given by
the CA, the award of interest cannot be affirmed. The interest imposed by the CA
should be deleted.

4. The SC sustains the lifting of the garnishment on the P2.3 M deposit of PGAI with
the PCI Bank, as the amount of P9,210,666.66 paid by PGAI could very well cover
the cost of suit charged against it.

5. The SC held that the CA correctly ruled that the payment by PGAI of the entire
amount of P9,210,666.66 will NOT estop it from questioning the same. Worthy of
note is the receipt of said payment where PGAI expressly made a reservation that
the payment is SUBJECT TO THE FINAL DETERMINATION OF THE LIABILITY OF
PGAI UNDER THE JUDGMENT IN SAID CASE. Even in the absence of the
foregoing, the obligation of Solidbank to return the amount in excess of what is due
to it stands, pursuant to the ancient principle that no one shall unjustly enrich oneself
at the expense of another.