City Government of Makati vs. Odeña

A final and executory judgment may no longer be modified, directly or indirectly, even by the highest court of the land, and an administrative agency such as the CSC cannot vary the tenor of a Supreme Court decision that has attained finality; however, a quitclaim that includes a waiver of retirement benefits obtained through fraud and supported by unreasonable consideration is void and cannot foreclose the employee's entitlement thereto.

Respondent Emerita B. Odeña was employed by the City Government of Makati as a teacher beginning in 1980, serving as a contractual employee until 30 July 1992 and as a casual employee from July 1992 until November 1996. Her practice was to sign an Attendance Sheet rather than a Daily Time Record to signify attendance. The dispute arose from her dropping from the rolls in 2000 on the ground of alleged absences without official leave, which the CSC found unsupported by evidence, leading to a finding of illegal dismissal. The case had previously been litigated through the CSC, the CA, and the Supreme Court, culminating in the 2007 Decision in G.R. No. 163683 (Binay vs. Odeña), which affirmed the CA's ruling that respondent was illegally dismissed and entitled to backwages computed from the date of dismissal up to reinstatement, but not exceeding five years. The present petition concerns events occurring after that 2007 Decision became final.

Respondent Emerita B. Odeña was employed by the City Government of Makati as a teacher since 1980. She was a contractual employee up to 30 July 1992 and a casual employee from July 1992 until November 1996. Sometime in 1996, she held the position of Clerk I and was detailed at the Library Department of the Makati High School. It was her practice to sign an Attendance Sheet bearing her name and signature to signify attendance, instead of using a Daily Time Record.

In 2000, respondent was asked to explain why she supposedly failed to report for work starting in November 1999. She explained that she had not incurred those alleged absences and presented the employees' log book as proof of her attendance. Her explanation was disregarded by then education consultant Priscilla Ferrolino. Thereafter, on 8 June 2000, Mayor Elenita S. Binay issued a Memorandum dropping respondent from the roll of employees, effective at the close of office hours of 15 May 2000, on the ground of absences without official leave starting on 10 November 1999. Respondent moved for reconsideration, but her motion was denied. She then appealed to the Civil Service Commission.

The CSC ruled that the dropping of respondent from the rolls was not supported by evidence, finding that she had actually reported for work from November 1999 to May 2000 and that, while she had incurred absences during that period, those were not equivalent to a continuous absence of at least thirty working days. The CSC directed petitioner to reinstate respondent and pay her back salaries from the time of her separation up to her actual reinstatement. Petitioner's motion for reconsideration was denied. Petitioner then filed a Rule 43 Petition with the CA, which affirmed the CSC Resolutions but modified the award of back salaries to a maximum period of five years, citing Marohombsar vs. Court of Appeals. Petitioner elevated the case to the Supreme Court via a Rule 45 Petition docketed as G.R. No. 163683. In the 2007 Decision, the Court dismissed the petition and affirmed the CA Decision in its entirety, including the five-year limit on backwages. The 2007 Decision became final and executory.

After the 2007 Decision became final, the CSC, upon motion of respondent, directed the incumbent Mayor of Makati to immediately reinstate her and cause the payment of all her salaries and other benefits from the date of her removal up to her reinstatement. The directive was not complied with, prompting the CSC to reiterate its order. Respondent instead opted to avail herself of early retirement effective 13 February 2008. Petitioner thereafter paid her the amount of ₱558,944.19, representing her supposed back salaries and other benefits. In acknowledging receipt, respondent signed a "Release, Quitclaim, and Waiver" dated 5 May 2008.

Respondent subsequently filed a Letter-Complaint with the CSC, asserting that the amount paid did not correspond to the entire amount she was legally entitled to, claiming that five years of payment was insufficient to cover her almost eight years of suffering. She alleged that she was forced to sign the quitclaim under threat that she would not receive payment otherwise, and raised questions about her entitlement to leave credits, GSIS, and PAG-IBIG benefits. The CSC took cognizance of the Letter-Complaint and, in Resolution No. 082264 dated 8 December 2008, directed petitioner to recompute and pay full back salaries and other benefits for seven years, eight months, and twenty-eight days—the entire period respondent was out of service from her illegal dismissal on 15 May 2000 until her early retirement on 13 February 2008. The CSC reasoned that nothing in the 2007 Decision categorically stated the five-year limit and that limiting the award would cause serious injustice. Petitioner's motion for reconsideration was denied in Resolution No. 090622 dated 28 April 2009, the CSC holding that res judicata must yield to the higher interest of justice.

• Res Judicata: Petitioner argued that the CSC Resolutions were violative of the doctrine of res judicata, as the 2007 Decision had become final and executory and had already settled the issue of the amount of backwages respondent was entitled to receive.
• Scope of Award: Petitioner contended that the CSC erred in including respondent's retirement as a ground for her entitlement to full back salaries and other benefits beyond what was granted by the Supreme Court in its 2007 Decision, and that the cause of action in the case was the entitlement to back salaries, such that issues of retirement and entitlement to other benefits could not be assailed.
• Compliance: Petitioner maintained that no motion for execution was ever filed before the CSC because it had already complied with the 2007 Decision by paying respondent, and that the issue of respondent's benefits had already been settled with finality.
• Service of Pleadings: Petitioner insisted that it had been serving its pleadings at respondent's last address on record.
• Timeliness: Petitioner asserted that it was notified of the Court's denial of its Motion for Extension only on 9 June 2010, after the present Petition had been filed and after the Court had constructively admitted the Petition by requiring respondent to file her Comment.
• Validity of Quitclaim: Petitioner argued that the waiver executed by respondent forecloses any right to receive additional amounts pertaining to her benefits.

• Propriety of CA Ruling: Respondent argued that the CA did not err in considering the CSC Resolutions as execution orders, and that the Petition was filed out of time since petitioner's Motion for Extension had been denied by the Court.
• Service of Pleadings: Respondent contended that petitioner failed to properly serve its pleadings upon her.
• Entitlement to Award: Respondent maintained that she is entitled to the moneys awarded her by the CSC, asserting that the five-year payment was insufficient to cover nearly eight years of suffering and that she was forced to sign the quitclaim under duress.

• Propriety of Remedy: Whether petitioner undertook an improper remedy when it filed a Rule 43 Petition with the CA to question the Resolutions issued by the CSC.
• Entitlement to Additional Amount: Whether respondent, after receiving payment from petitioner, is still entitled to the additional amount awarded by the CSC.

• Propriety of Remedy: No. The filing of a Rule 43 Petition with the CA was the proper remedy to assail the CSC Resolutions, which fell under recognized exceptions to the general rule that orders of execution are not appealable—specifically, where the writ varies the judgment and where the judgment debt has been paid or satisfied.
• Entitlement to Additional Amount: No. Respondent is not entitled to the additional amount awarded by the CSC, the 2007 Decision having become final and executory with a five-year limit on backwages, which the CSC had no authority to modify. The quitclaim, however, was declared void insofar as it waived respondent's retirement benefits.

• Propriety of Remedy: The CA's jurisdiction under Rule 43 extends not merely to final judgments and final orders of the CSC but also to awards, judgments, final orders, or resolutions of the CSC, as explicitly provided in Section 1, Rule 43. While the general rule is that an order of execution is not appealable under Section 1(f), Rule 41, this Court recognized exceptions in Banaga vs. Majaducon, citing Limpin vs. Intermediate Appellate Court, where a party may elevate the matter of an improper execution for appeal. Two of these exceptions apply here: first, the CSC Resolutions varied the 2007 Decision by directing payment of backwages for nearly eight years instead of the five-year limit; and second, the judgment debt had already been satisfied, as respondent received ₱558,944.19. These circumstances required a factual review of the manner of execution, which should have prompted the CA to take cognizance of the appeal. To hold that a Rule 65 petition is the sole and exclusive remedy would unduly restrict the remedy available to a party prejudiced by an improper or illegal execution, as certiorari under Rule 65 addresses only jurisdictional issues, not factual questions.

• Entitlement to Additional Amount: The CSC gravely erred in taking cognizance of respondent's Letter-Complaint, which was in substance a prohibited appeal of the 2007 Decision that had long become final and executory. Final and executory judgments can no longer be attacked or modified, directly or indirectly, even by the highest court of the land. The Letter-Complaint expressly assailed the five-year limit on backwages and sought its reversal, which the CSC had no authority to entertain. The CSC Resolutions were likewise void for varying the tenor of the 2007 Decision. The CA Decision dated 14 May 2004 clearly imposed a five-year limit, and the 2007 Decision affirmed that CA Decision without modification—since neither the body nor the dispositive portion contained any qualification, the ordinary meaning of "affirm" must prevail, meaning the CA Decision was affirmed in its entirety, including the five-year cap. The immutability of final judgments permits only correction of clerical errors or nunc pro tunc entries; the CSC's directive substantially altered the amount of benefits respondent was entitled to and thus was not a mere clerical correction. Furthermore, petitioner had already complied with the 2007 Decision by paying ₱558,944.19, and respondent's reinstatement was rendered moot by her early retirement. Upon satisfaction of the judgment, any subsequent modification was rendered useless and futile. However, the quitclaim respondent signed was declared void insofar as it included her retirement benefits. Under Interorient Maritime Enterprises, Inc. vs. Remo, a valid deed of release must meet three requirements: (1) no fraud or deceit; (2) credible and reasonable consideration; and (3) not contrary to law, public order, public policy, morals, or good customs. The quitclaim failed on two counts: it was obtained through fraud or deceit, as petitioner made its execution a precondition before respondent could receive her backwages; and the consideration was unreasonable, as the ₱558,944.19 meant to cover both backwages and retirement benefits for nearly 28 years of service. The waiver therefore cannot foreclose respondent's entitlement to her retirement benefits.

• Immutability of Final Judgments — A final and executory judgment may no longer be modified, directly or indirectly, even by the highest court of the land. The only recognized exceptions are the correction of clerical errors and the making of nunc pro tunc entries which cause no prejudice to any party, or when the judgment is void. Any amendment or alteration that substantially affects a final and executory judgment is null and void for lack of jurisdiction. Applied in this case: the CSC's directive increasing the backwages award from five years to nearly eight years substantially altered the 2007 Decision and was therefore void.

• Exceptions to the Non-Appealability of Orders of Execution — While the general rule is that no appeal lies from an order or writ directing execution of a final judgment, this rule is not absolute. A party aggrieved by an improper or irregular execution may elevate the matter for appeal in exceptional circumstances, including where: (1) the writ of execution varies the judgment; (2) there has been a change in the situation of the parties making execution inequitable or unjust; (3) it appears that the writ has been improvidently issued, or is defective in substance, or issued against the wrong party, or the judgment debt has been paid or otherwise satisfied, or the writ was issued without authority. Applied here: the CSC Resolutions varied the 2007 Decision and the judgment debt had already been satisfied, making a Rule 43 appeal proper.

• Validity of Quitclaims and Waivers — Quitclaims, waivers, or releases are looked upon with disfavor. To be valid, a Deed of Release, Waiver and/or Quitclaim must meet three requirements: (1) no fraud or deceit on the part of any of the parties; (2) the consideration is credible and reasonable; and (3) the contract is not contrary to law, public order, public policy, morals, or good customs, or prejudicial to a third person with a right recognized by law. A quitclaim obtained from an unsuspecting or gullible person, or where the settlement is unconscionable on its face, is ineffective. Applied here: the quitclaim was void because it was obtained by making its execution a precondition to receiving backwages (fraud/deceit) and because the consideration was unreasonably low if it was meant to cover retirement benefits for 28 years of service.

• Affirmance Without Modification — When a decision affirms a lower court's ruling without any qualification in either the body or the dispositive portion, the ordinary and literal meaning of "affirm" prevails: the lower court's decision is affirmed in its entirety, including any modifications it imposed. Applied here: the 2007 Decision affirmed the CA Decision without qualification, so the CA's five-year limit on backwages was likewise affirmed.

• "It is axiomatic that final and executory judgments can no longer be attacked by any of the parties or be modified, directly or indirectly, even by the highest court of the land." — This passage states the fundamental doctrine of immutability of final judgments, which is the ratio decidendi for nullifying the CSC Resolutions that modified the 2007 Decision.

• "To rule that a special civil action for certiorari constitutes the sole and exclusive remedy to assail a writ or order of execution would unduly restrict the remedy available to a party prejudiced by an improper or illegal execution." — This passage articulates the Court's reasoning for recognizing that a Rule 43 appeal, not just a Rule 65 petition, may be proper to challenge orders of execution that vary a final judgment.

• "A quitclaim is ineffective in barring recovery of the full measure of a worker's rights, and the acceptance of benefits therefrom does not amount to estoppel. Moreover, a quitclaim in which the consideration is scandalously low and inequitable cannot be an obstacle to the pursuit of a worker's legitimate claim." — This passage, quoting from Interorient Maritime Enterprises, Inc. vs. Remo, states the controlling doctrine on the invalidity of quitclaims obtained through fraud or supported by unconscionable consideration, applied to preserve respondent's retirement benefits.

• "When the dispositive portion of a judgment is clear and unequivocal, it must be executed strictly according to its tenor." — This passage states the rule that the dispositive portion controls execution, reinforcing that the CSC could not expand the award beyond what the 2007 Decision's dispositive portion affirmed.

• PAGCOR vs. Aumentado, Jr., G.R. No. 173634, 22 July 2010, 625 SCRA 241 — Followed. The Court relied on this case to establish that the CA's jurisdiction under Rule 43 extends not merely to final judgments and final orders of the CSC but also to awards, judgments, final orders, or resolutions of the CSC.

• Banaga vs. Majaducon, 526 Phil. 641 (2006) — Followed. The Court relied on this case, which in turn cited Limpin vs. Intermediate Appellate Court, to enumerate the exceptions to the general rule that orders of execution are not appealable, finding that two exceptions applied in the present case.

• Jose Clavano, Inc. vs. HLURB, 428 Phil. 208 (2002) — Followed. The Court cited this case for the principle that orders which veer away from the dispositive portion of final judgments are pro tanto void and absolutely unenforceable, and that a final and executory decision can no longer be amended except for clerical errors.

• Interorient Maritime Enterprises, Inc. vs. Remo, G.R. No. 181112, 29 June 2010, 622 SCRA 237 — Followed. The Court relied on this case for the three-part test on the validity of quitclaims and waivers, applying it to find the quitclaim void as to retirement benefits.

• Marohombsar vs. Court of Appeals, 326 SCRA 62 (2000) — Cited as the basis for the CA's five-year limit on backwages for illegally dismissed civil service employees, which the 2007 Decision affirmed.

• Section 1, Rule 43, Rules of Court — Defines the scope of appeals to the CA from judgments, final orders, or resolutions of quasi-judicial agencies, including the CSC. Applied to hold that the CA's jurisdiction extends to resolutions of the CSC, not merely final judgments and orders.

• Section 1(f), Rule 41, Rules of Court — Provides that no appeal may be taken from an order of execution, and that the aggrieved party may file an appropriate special civil action under Rule 65. The Court held that while this is the general rule, recognized exceptions exist where the writ varies the judgment or the judgment debt has been satisfied, making a Rule 43 appeal proper.

• Section 1, Rule 65, Rules of Court — Governs special civil actions for certiorari. The Court noted that certiorari addresses only whether the lower court acted without or in excess of jurisdiction or with grave abuse of discretion, and that limiting the remedy against improper execution solely to Rule 65 would unduly restrict the remedies available to a prejudiced party.

Carpio, Velasco Jr., Brion, Bersamin, Del Castillo, Abad, Villarama Jr., Perez, Mendoza, Reyes, Perlas-Bernabe, and Leonen, JJ., concurred. Leonardo-De Castro, J., was on official leave. Peralta, J., took no part.