Development Bank of the Philippines vs. Manuel Te

A final and executory judgment finding a party guilty of indirect civil contempt cannot be lifted or nullified by the trial court on the ground of subsequent compliance; any order doing so is void for lack of jurisdiction under the doctrine of finality or immutability of judgments.

Development Bank of the Philippines (DBP) is the petitioner, while Manuel L. Te is the respondent. Te acted as attorney-in-fact for Abdullah Abedin et al. in a civil case against DBP to recover certificates of title and other proofs of ownership previously surrendered by the Abedin group to DBP as security for a loan. An indirect contempt proceeding arose from incidents in that civil case.

Development Bank of the Philippines (DBP) is a bank; Manuel L. Te acted as attorney-in-fact for Abdullah Abedin et al. (Abedin group). In November 2001, Te, in that capacity, filed Civil Case No. 347 before Branch 39, Regional Trial Court, Polomolok, South Cotabato, to recover from DBP 131 certificates of title and 34 other proofs of ownership covering properties of the Abedin group. The titles had been surrendered by the Abedin group to DBP as security for a loan. Te also moved for the issuance of a writ of replevin.

In the course of the proceedings for the civil case, the RTC issued the writ of replevin. DBP surrendered the certificates of title and other proofs of ownership to the sheriff, and in turn, the sheriff handed them to Te. Te then filed a motion to dismiss the civil case on the ground of the Abedin group's lack of interest to further prosecute the case.

On March 2, 2004, the RTC issued an Order denying the motion to dismiss and requiring Te, as the Abedin group's attorney-in-fact, to surrender to the trial court the physical and legal custody of all the certificates of title and other proofs of ownership within 30 days from notice. Te moved for the RTC's partial reconsideration of its Order. On October 11, 2004, the RTC issued another Order denying the motion for partial reconsideration and reiterating its March 2, 2004 Order. Despite the RTC's directives, Te supposedly refused to surrender all the certificates of title and other proofs of ownership before the trial court.

This prompted DBP to file an action for indirect contempt against Te on December 1, 2010, docketed as Special Civil Action No. 88-10. On April 16, 2014, the RTC rendered a Decision finding Te guilty of indirect contempt. The dispositive portion sentenced him to pay a fine of PHP 30,000.00 and imprisonment of two months or until he duly complied with the court order dated March 4, 2004, in accordance with Rule 71, Sections 3(b) and (d) and Section 7 of the 1997 Rules of Civil Procedure. On appeal, the CA affirmed the RTC's ruling. Te elevated the case to the Supreme Court by way of a petition for review on certiorari. On September 14, 2016, the Supreme Court issued a Resolution denying the petition for failure to show any reversible error on the part of the appellate court. Te moved for reconsideration, which was denied with finality in a Resolution dated June 18, 2018. The ruling became final and executory on June 18, 2018, as evidenced by the Entry of Judgment issued by the Court.

Later on, Te filed a Manifestation of Compliance before the RTC, where he alleged that he was able to recover 12 out of the 131 certificates of titles and 34 proofs of ownership. He prayed that he be considered to have satisfactorily complied with the penalty against him, considering that he already retrieved some of the subject titles. He also emphasized that the March 2, 2004 RTC Order, which required the turnover of the subject titles to the trial court, was directed to the Abedin group and not to him. DBP, for its part, asserted that Te had possession of all these certificates and proofs and had voluntarily distributed them to the plaintiffs without the RTC's permission.

In the July 17, 2020 Order, the RTC lifted the Order of Contempt against Te. The RTC found that Te's failure to return the titles does not constitute "willful disregard" of the RTC's order, since those titles were already returned to the actual landowners, which is a matter beyond his control. DBP moved for reconsideration, which was denied by the RTC on December 2, 2020. The CA later found no clear showing, apart from DBP's assertions, as to how many certificates of title and other proofs of ownership were involved in the proceedings before the court a quo, and that Te cannot be faulted if he is unable to fully comply with the order of the trial court inasmuch as he does not have custody of the remaining certificates of title and other proofs of ownership, nor has it been duly established that the said certificates and documents are in his possession.

• Grave Abuse of Discretion and Modification of Final Judgment: Petitioner argued that the CA committed grave abuse of discretion in affirming the RTC's ruling lifting the Order of Contempt. Petitioner maintained that the RTC's ruling was a clear modification of the final judgment of the Supreme Court and violated the doctrine of immutability of judgments.
• Failure to Fully Comply: Petitioner pointed out that Te failed to fully comply with the RTC Order, so the ruling holding him in contempt, which had already attained finality, should stand pursuant to the doctrine of immutability of final judgments.
• Direction of the Order and Possession of Titles: Petitioner asserted that the RTC Order dated March 2, 2004 and Decision dated April 16, 2014 clearly directed respondent, not the Abedin group, to return the certificates of title and other proofs of ownership to the trial court. Petitioner further claimed that respondent had possession of all these certificates and proofs because he voluntarily distributed them to the plaintiffs without the RTC's permission.
• CA's Failure to Consider Arguments: Petitioner ascribed fault to the CA for allegedly failing to consider the arguments raised in its Motion for Reconsideration, where petitioner refuted the grounds relied upon by the CA in affirming the RTC.

• Compliance and Cessation of Contempt: Respondent maintained that the RTC did not err when it lifted the Order of Contempt, considering that he had already complied with the RTC Order dated March 2, 2004. He claimed that the reason for punishing him for contempt ceased to exist in view of the evidence he submitted and witnesses he presented during the hearing on his Manifestation of Compliance before the RTC.
• No Modification of Final Ruling: Respondent argued that there was no modification of the terms of the final and executory ruling of the Court. He reiterated that he merely complied with what was directed of him and that the satisfaction of judgment was brought about by circumstances beyond his control.
• Partial Recovery and Direction of Order: In his Manifestation of Compliance, respondent alleged that he was able to recover 12 out of the 131 certificates of title and 34 proofs of ownership; he prayed to be considered to have satisfactorily complied with the penalty and emphasized that the March 2, 2004 RTC Order was directed to the Abedin group and not to him.

• Grave Abuse of Discretion / Immutability of Final Judgment: Whether the Court of Appeals committed grave abuse of discretion in affirming the Regional Trial Court's Order lifting the final and executory judgment of indirect contempt against respondent Manuel Te.

• Grave Abuse of Discretion / Immutability of Final Judgment: Yes. The CA committed grave abuse of discretion. The RTC's Order lifting the contempt judgment impermissibly modified a final and executory judgment, which is immutable and unalterable; the CA's affirmance of that void order was capricious and arbitrary.

• Grave Abuse of Discretion / Immutability of Final Judgment: Contempt of court is a willful disregard or disobedience of a public authority; indirect or constructive contempt consists of willful disobedience of the lawful process or order of the court. Proceedings for contempt are sui generis, criminal in nature, but may be criminal/punitive or civil/remedial. The character depends on the nature of the contempt and the relief sought or dominant purpose: criminal when primarily punishment, civil when primarily compensatory or remedial. The indirect contempt case here was civil in nature because DBP filed it as a remedial measure to ensure Te's compliance with the trial court's order. Under the doctrine of finality or immutability of judgments, a decision that has acquired finality becomes immutable and unalterable and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact and law. Once final, it is removed from the power or jurisdiction of the court that rendered it; any amendment or alteration substantially affecting a final and executory judgment is null and void for lack of jurisdiction, including the entire proceedings held for that purpose. This principle was reiterated in Industrial Management International Development Corp. vs. NLRC and Eusebio vs. Civil Service Commission, where a final judgment finding a party guilty of indirect contempt could not be disturbed and the original penalty was reinstated. In the present case, the Supreme Court had previously affirmed the RTC and CA in G.R. No. 225250, finding Te guilty of indirect contempt; that judgment became final and executory on June 18, 2018. Despite this, the RTC's July 17, 2020 Order lifted the contempt ruling and removed the penalties. Te's subsequent compliance could not invalidate or undo the final judgment. Although the RTC couched its order as recognition of compliance, its practical effect was to nullify a final judgment, an impermissible modification. The proceedings conducted by the RTC to amend the dispositive portion, specifically the removal of penalties, were void ab initio for lack of jurisdiction. The lower court had no authority to alter, revise, or disregard a final and executory ruling, especially one upheld by the Supreme Court. By affirming the RTC's unauthorized modification, the CA likewise committed grave abuse of discretion. Grave abuse of discretion arises when a court or tribunal acts in a capricious, whimsical, arbitrary, or despotic manner, amounting to an evasion of a positive duty or a virtual refusal to perform a legal obligation, equivalent to a lack or excess of jurisdiction. The CA's affirmance of the void RTC order fell squarely within that definition and warranted corrective action. Thus, the CA gravely abused its discretion.

• Doctrine of Finality or Immutability of Judgments — A decision or order that has acquired finality becomes immutable and unalterable and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact and law. Once final and executory, it is removed from the power or jurisdiction of the court that rendered it; any amendment or alteration that substantially affects a final and executory judgment is null and void for lack of jurisdiction, including the entire proceedings held for that purpose. The Court applied this doctrine to hold that the RTC's July 17, 2020 Order lifting the contempt judgment and removing the penalties was void ab initio, and that the CA committed grave abuse of discretion in affirming it.
• Contempt of Court; Direct and Indirect Contempt — Contempt of court is a willful disregard or disobedience of a public authority. Direct contempt is committed in the presence of or so near the judge as to obstruct him in the administration of justice; indirect or constructive contempt consists of willful disobedience of the lawful process or order of the court. The Court applied this definition to the undisputed finding that Te was guilty of indirect contempt for failing to heed the RTC's March 2, 2004 Order.
• Civil and Criminal Contempt — Proceedings for contempt are sui generis, criminal in nature, but may be criminal/punitive or civil/remedial. Criminal contempt is directed against the authority and dignity of a court or judge; civil contempt is the failure to do something ordered by a court in a civil case for the benefit of the opposing party. The character is determined by the nature of the contempt and the relief sought or dominant purpose: criminal when the purpose is primarily punishment, civil when primarily compensatory or remedial. The Court found the indirect contempt proceedings civil in nature because DBP filed them as a remedial measure to ensure Te's compliance with the trial court's order.
• Grave Abuse of Discretion — Grave abuse of discretion arises when a court or tribunal acts in a capricious, whimsical, arbitrary, or despotic manner, amounting to an evasion of a positive duty or a virtual refusal to perform a legal obligation, and equating to a lack or excess of jurisdiction. The Court applied this standard to the CA's affirmance of the RTC's void order, holding that the CA gravely abused its discretion.
• Subsequent Compliance Cannot Undo a Final Contempt Judgment — A final and executory judgment finding a party guilty of indirect civil contempt cannot be lifted or nullified by the trial court on the ground of subsequent compliance. The contemnor's attempt to comply cannot operate to invalidate or undo a judgment that has long attained finality. The Court applied this principle to reject the RTC's lifting of the contempt order based on Te's Manifestation of Compliance.

• "Under the doctrine of finality or immutability of judgments, a decision that has acquired finality becomes immutable and unalterable, and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact and law." — This states the ratio decidendi on finality, the doctrine the Court applied to void the RTC's lifting of the contempt order.
• "The respondent's subsequent attempt to comply with the RTC's Order cannot operate to invalidate or undo a judgment that has long attained finality. While the RTC couched its ruling as a recognition of respondent's alleged compliance, its practical effect was to nullify a final judgment, an act that constitutes an impermissible modification." — This is the core application: Te's compliance did not authorize the RTC to disturb the final contempt judgment.
• "As a result, the proceedings conducted by the RTC for the purpose of amending the dispositive portion of the final decision, specifically, the removal of the penalties imposed against respondent for his contemptuous acts, are void ab initio for lack of jurisdiction." — This defines the jurisdictional consequence of the RTC's order and supports the finding of grave abuse of discretion by the CA.

• Lorenzo Shipping Corporation vs. Distribution Management Association of the Philippines, 672 Phil. 1 (2011) — Cited for the definition of contempt of court, the distinction between direct and indirect contempt, and the classification of contempt proceedings as criminal/punitive or civil/remedial.
• Industrial Management International Development Corp. vs. NLRC, 387 Phil. 659 (2000) — Cited for the rule that once a decision or order becomes final and executory, it is removed from the jurisdiction of the court that rendered it; any amendment or alteration substantially affecting a final and executory judgment is null and void for lack of jurisdiction, including the entire proceedings held for that purpose.
• Eusebio vs. Civil Service Commission, 869 Phil. 728 (2020) — Cited for the principle that a final and executory judgment finding a party guilty of indirect contempt cannot be disturbed; the Court reinstated the original penalty imposed by the public respondent after the CA had erroneously reduced the fine.
• United Coconut Planters Bank vs. Looyuko, 560 Phil. 581 (2007) — Cited for the definition of grave abuse of discretion as acting in a capricious, whimsical, arbitrary, or despotic manner amounting to evasion of a positive duty or virtual refusal to perform a legal obligation, equivalent to lack or excess of jurisdiction.
• Manuel L. Te vs. People of the Philippines/Development Bank of the Philippines, G.R. No. 225250 — Prior related case in which the Supreme Court denied Te's petition and affirmed the RTC and CA findings of indirect contempt; the judgment became final and executory on June 18, 2018.

• Rule 71, Sections 3(b) and (d) and Section 7, 1997 Rules of Civil Procedure — Cited in the RTC's April 16, 2014 Decision as the basis for finding Te guilty of indirect contempt and imposing a PHP 30,000.00 fine and two months' imprisonment or until compliance with the court's order. The Supreme Court referenced this conviction in holding that the final judgment could not be modified.
• Rule 45, Rules of Court — The procedural basis for DBP's Petition for Review on Certiorari before the Supreme Court. The Court granted the petition and reversed the CA.
• Rule 65, Rules of Court — Mentioned in the CA's ruling, which stated that a petition for certiorari requires a clear abuse of authority so serious and grave as to warrant interference. The Supreme Court ultimately found that the CA itself committed grave abuse of discretion in affirming the RTC's void order.

Gesmundo, C.J. (Chairperson), Hernando, Zalameda, and Marquez, JJ., concur.