Philippine Veterans Bank vs. Hon. Santiago G. Estrella & Solid Homes, Inc.

A trial court may issue a clarificatory order specifying the correct interest rate in a final and executory judgment to rectify an unauthorized alteration in the original records, provided such order does not substantively modify the judgment but merely restores it to its intended form; final judgments are immutable and unalterable except for the correction of clerical errors or the making of nunc pro tunc entries that cause no prejudice to any party.

The dispute originated from a Compromise Agreement dated April 3, 1992, between Solid Homes, Inc. (SHI) and Philippine Veterans Bank (PVB), wherein SHI remitted P28,937,965.65 to PVB. When PVB allegedly failed to comply with its obligations to release Condominium Certificates of Title, SHI initiated legal action to enforce the agreement.

• Solid Homes, Inc. (SHI) filed a complaint for specific performance, sum of money and damages against Philippine Veterans Bank (PVB) based on a Compromise Agreement dated April 3, 1992, alleging that SHI had remitted P28,937,965.65 to PVB but PVB failed to release the Condominium Certificates of Title covering the disputed properties.
• PVB prayed for the rescission of the Compromise Agreement and the return of the remitted amount.
• On February 22, 1994, the RTC granted SHI's motion for summary judgment. The decretal portion of the original copy of the resolution appended to the original records indicated "18% interest thereon per annum," while the copies served on the parties indicated "8% interest thereon per annum."
• PVB filed a motion for reconsideration which was denied on July 27, 1994.
• PVB filed a petition for certiorari with the Supreme Court (G.R. No. 115847) alleging grave abuse of discretion in fixing the interest rate at 8%, which was referred to the Court of Appeals and dismissed on March 11, 1996.
• PVB's subsequent petition for review with the Supreme Court was denied on August 28, 1996 for being filed out of time, rendering the February 22, 1994 Resolution final and executory.
• On March 31, 1999, SHI filed a Motion for Clarification alleging that the figure "1" had been surreptitiously inserted before "8%" in the original records to make it appear as "18%" after copies had been released to the parties.
• The RTC issued the assailed Order on May 6, 1999, clarifying that the interest rate was 8% per annum, noting that the alteration in the original records was unauthorized as it bore no initials of the presiding judge and was not reflected in the copies served on the parties.
• PVB received the assailed Order on May 7, 1999, and filed the instant petition for certiorari on July 2, 1999, contending that the trial court acted with grave abuse of discretion in fixing the interest at 8% rather than 18%.

• The trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the May 6, 1999 Order fixing the interest rate at only 8% when the original copy of the February 22, 1994 Resolution clearly stated 18%.
• The 18% interest rate conforms to the true intention and agreement of the parties as stipulated in the Compromise Agreement dated April 3, 1992.
• The assailed order demonstrates the trial court's bias in favor of Solid Homes, Inc.
• The trial court had no jurisdiction to modify or alter its February 22, 1994 Resolution which had long become final and executory.
• The allegation of unauthorized alteration was not proven, and the 18% rate should prevail as it appears in the original records.

• The petition is a blatant attempt to resurrect an issue already resolved by the Court of Appeals in CA-G.R. SP No. 36500 and by the Supreme Court in its Resolution of August 28, 1996, denying review.
• The trial court had no jurisdiction to modify or alter its final and executory February 22, 1994 Resolution.
• The motion for clarification only sought to determine whether the interest rate was 8% or 18%, and the court merely clarified that the correct rate was 8% as appearing in the copies served on the parties.
• The insertion of "1" before "8%" in the original records was unauthorized, made after copies were released to the parties, and not sanctioned by the court as evidenced by the absence of the presiding judge's initials on the alteration.

• Procedural Issues:
  • Whether the trial court acted with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the May 6, 1999 Order clarifying the interest rate in its final and executory Resolution dated February 22, 1994.
  • Whether the trial court could still exercise jurisdiction to clarify the terms of a judgment that had become final and executory.
• Substantive Issues:
  • Whether the interest rate on the judgment debt of P28,937,965.65 should be 8% or 18% per annum.

• Procedural: The trial court did not commit grave abuse of discretion. The assailed Order dated May 6, 1999, did not amend or modify the February 22, 1994 Resolution, which had long become final and executory after affirmation by the Court of Appeals and denial of review by the Supreme Court on August 28, 1996. The Order merely clarified the interest rate prescribed in the earlier Resolution to rectify an unauthorized alteration in the original records. The trial court acted within its supervisory powers over the execution of final judgments, which allows it to issue clarificatory orders that do not substantively modify the judgment but ensure its proper implementation.
• Substantive: The interest rate is 8% per annum. The figure "18%" in the original records was the result of an unauthorized alteration made by inserting "1" before "8%" after copies were released to the parties. This is evidenced by: (1) the absence of the judge's initials on the alteration; (2) the alteration not being reflected in copies served to the parties; and (3) PVB's own admission in its earlier petition (G.R. No. 115847) that the rate fixed was 8%. The Compromise Agreement's stipulated rate is immaterial because the February 22, 1994 Resolution had become final and executory and could no longer be disturbed.

• Immutability of Final Judgments — Once a judgment becomes final and executory, it becomes immutable and unalterable and may no longer be modified in any respect, even if the modification is meant to correct an erroneous conclusion of fact or law, regardless of whether the modification is attempted by the court rendering it or by the Supreme Court.
• Nunc Pro Tunc Entries — Entries made by a court to record an act previously done but not then formally recorded, which may be made to give effect to a judgment actually rendered but not properly recorded, provided they cause no prejudice to any party; recognized as an exception to the principle of immutability of judgments.
• Supervisory Powers of Trial Courts over Execution — Trial courts retain supervisory powers over the execution of their final judgments to ensure proper implementation and may issue clarificatory orders to rectify falsifications or unauthorized alterations in court records without violating the principle of immutability, provided such orders do not substantively modify the judgment.

• "It is a fundamental rule that when a final judgment becomes executory, it thereby becomes immutable and unalterable. The judgment may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by this Court."
• "The only recognized exceptions are the correction of clerical errors or the making of so-called nunc pro tunc entries which cause no prejudice to any party, and, of course where the judgment is void."
• "The respondent judge certainly committed no grave abuse of discretion in clarifying that the interest rate prescribed in the Resolution of February 22, 1994 was 8% per annum."
• "It bears stressing that the assailed Order dated May 6, 1999, did not amend or modify the Resolution of February 22, 1994, which had become final and executory. The assailed order merely clarified the interest rate prescribed in the earlier Resolution, which disposed of the case on the merits, to rectify a falsification of the copy of the said resolution appended to the original records."

• Arcenas v. Court of Appeals — Cited for the doctrine that final judgments are immutable and unalterable once they become executory.
• Pure Foods Corporation v. NLRC — Cited for the principle that final judgments may no longer be modified in any respect once they become executory.
• Santos v. Land Bank of the Philippines — Cited for the principle that trial courts have supervisory powers over the execution of their final judgments.

• Rule 65 of the Rules of Court — Governs petitions for certiorari; invoked by Philippine Veterans Bank as the procedural remedy to assail the trial court's orders.
• Article VIII, Section 1 of the 1987 Constitution — Mentioned in the context of the petitioner's earlier argument that the trial judge failed to give factual and legal justification for the judgment as required by the Constitution.