So vs. Food Fest Land, Inc.

The five-year period for execution by motion under Rule 39, Section 6 of the Rules of Court may be tolled or suspended when the delay in the satisfaction of judgment is caused by the judgment debtor's dilatory tactics or by errors of the implementing court not attributable to the judgment creditor. Additionally, final judgments, orders, or resolutions must be served either personally or by registered mail under Rule 13, Section 13, and service by electronic mail is insufficient, rendering the reglementary period to appeal non-commenced.

Daniel T. So was the lessor of a commercial space in San Antonio Village, Makati City, leased to Food Fest Land, Inc. for a three-year term beginning September 14, 1999, for the operation of a Kentucky Fried Chicken store. The lease contract contained a penalty clause imposing 1% monthly charges on unpaid accounts and a provision for liquidated damages and attorney's fees equivalent to 25% of the amount due should the lessor be compelled to seek judicial relief. The dispute arose from Food Fest's failure to pay rent, leading to an ejectment complaint filed in 2001.

On September 14, 1999, Daniel T. So, as lessor, entered into a Contract of Lease with Food Fest Land, Inc. over a commercial space in San Antonio Village, Makati City for three years, where Food Fest intended to operate a Kentucky Fried Chicken store. When Food Fest failed to pay rent, So filed a Complaint for Ejectment and Damages on April 26, 2001 before Branch 64, MeTC, Makati City. The MeTC ruled in So's favor on July 4, 2005, ordering forfeiture of the PHP 64,000.00 security deposit and payment of unpaid rentals from August 2000 until March 2001, with penalties, liquidated damages, and attorney's fees. Food Fest appealed, and RTC Branch 143 reversed, ordering So to pay Food Fest PHP 32,000.00 reimbursement, exemplary damages, and attorney's fees. The CA reversed the RTC on April 18, 2008, holding that Food Fest's obligation to pay rent was not extinguished by its failure to secure permits. The case reached the Supreme Court, which on April 7, 2010 affirmed with modification, imposing liquidated damages and attorney's fees of 25% of the total sum due in favor of So. A Resolution dated February 9, 2011 clarified that Food Fest, not So, was ordered to pay the 25% attorney's fees, and the Decision became final and executory on March 16, 2011.

So filed a Motion for Execution with the MeTC on May 23, 2011, just 68 days after entry of judgment. Food Fest filed a Reply with Motion to Hold in Abeyance, which the MeTC granted. When the records were returned, So again moved for execution, and the MeTC granted it. In an Order dated January 29, 2013, the MeTC issued a Writ of Execution that failed to state the exact amount to be paid. Food Fest refused to pay, moved to quash the writ, and asked the MeTC to fix the amount. The MeTC fixed the obligation at only PHP 213,312.00, without interest, despite So's assertion that the obligation was PHP 785,748.64. So filed a Petition for Certiorari with RTC Branch 59, which dismissed it. So appealed to the CA (CA-G.R. SP No. 140181), which on March 22, 2016 held that legal interest must be imposed on the judgment award despite not being stated in the fallo, applying 12% per annum from March 16, 2011 to June 30, 2013, and 6% per annum thereafter, following Nacar vs. Gallery Frames. The CA also clarified that the 1% monthly penalty charge applied on unpaid rentals from August 2000 until March 16, 2011, and the 25% liquidated damages and attorney's fees were imposed on the total unpaid rentals and penalty charges as of that date. No further appeal was taken.

So filed a Motion to Implement Writ of Execution on July 19, 2017. The MeTC issued an Order dated March 12, 2018 declaring that the life of the January 2013 Writ had expired. So filed a Motion for Issuance of New Writ of Execution on May 4, 2018, arguing that the period since the January 2013 writ should not be counted against the five-year period because of Food Fest's delay, his attempts to correct the MeTC's error, and the time taken by appellate courts. The MeTC denied the motion on May 9, 2018. So appealed to RTC Branch 147. During a hearing on October 16, 2020, the RTC directed the parties to file memoranda within 15 days and scheduled a status hearing for December 1, 2020. When So appeared for the status hearing, the RTC informed him it had already rendered a Resolution dismissing his appeal, holding that a final judgment may only be executed on motion within five years from entry. So alleged surprise, as he had not received Food Fest's memorandum. So filed a Petition for Review with the CA (CA-G.R. SP No. 167340), which dismissed it outright for failure to include specific material dates and to attach copies of material pleadings. So's Motion for Reconsideration was denied, prompting the present Petition. Daniel T. So passed away on June 26, 2024, and was substituted by his heirs: Jesusa H. So, Danalaine H. So, and Darrien Derrick H. So.

• Invalid Service of RTC Resolution: So argued that he was never validly served a copy of the RTC Resolution because under Rule 13, Section 13 of the Rules of Court, final orders must be served by personal service or registered mail, not electronic mail; his counsel filed the Petition for Review with the CA out of caution, explaining that the reglementary period had not yet commenced.
• Excusable Non-Compliance with Attachments: So sought to be excused from failing to attach required documents to his Petition before the CA, citing difficulty in securing documents from courts due to the enforced community quarantine at the time.
• Misapplication of Rule 39, Section 6: So argued that the CA's dismissal sustained the MeTC's misapplication of Rule 39, Section 6, as he timely filed the Motion for Execution on May 23, 2011, and the MeTC and RTC mistakenly believed the entire execution process, not just the filing of the motion, must occur within the five-year period, as clarified in Jacinto vs. IAC.

• Compliance with Rule 42 Requirements: Food Fest maintained that the CA correctly dismissed So's appeal due to his failure to comply with Rule 42 requirements, pointing to So's admission that his counsel received the RTC Resolution through electronic mail, as evidenced by a Certification issued by the RTC.
• Five-Year Period Already Lapsed: Food Fest cited Villareal vs. Metropolitan Waterworks and Sewerage System, arguing that for a motion for execution to be valid, the filing of the motion and the actual issuance of the writ must concur within the five-year period under Rule 39, Section 6; since So filed his Motion for Issuance of New Writ of Execution on May 4, 2018, more than five years had lapsed from March 16, 2011.

• Procedural Compliance: Whether the CA gravely erred in dismissing So's Petition for Review under Rule 42 of the Rules of Court for non-compliance with the material date rule and the requirement to attach material pleadings.
• Execution by Motion: Whether the Court's Decision in G.R. Nos. 183628 and 183670 may still be enforced by motion under Rule 39, Section 6 of the Rules of Court despite the lapse of more than five years from entry of judgment.

• Procedural Compliance: No. The CA erred in dismissing the Petition for Review. So's failure to strictly comply with Rule 42, Section 2 was excusable because the RTC Resolution was served by electronic mail, not personal service or registered mail as required by Rule 13, Section 13, so the reglementary period had not commenced; and there was substantial compliance with the attachment requirement given the purely legal issue raised.
• Execution by Motion: Yes. The five-year period for execution by motion was tolled or suspended because the delay was caused by the MeTC's defective Writ of Execution and Food Fest's dilatory tactics, not by So's inaction; the Motion for Execution was timely filed on May 23, 2011, and the net period lapsed from entry of judgment was only three years and eight months.

• Procedural Compliance: The Court applied the rule that a special and specific provision prevails over a general provision, holding that Rule 13, Section 13 must prevail over Rule 13, Section 5 insofar as service of final orders, judgments, and resolutions is concerned. Section 13 expressly provides that final judgments, orders, or resolutions shall be served either personally or by registered mail, and does not allow service by electronic mail. The Court reasoned that personal service and registered mail involve the preparation of a return by a public officer—sheriffs, process servers, or postal officials—who enjoy the presumption of regularity, ensuring reliable proof of service and due process. Since the RTC Resolution was a final order terminating the proceedings, and the records did not establish service personally or by registered mail, Food Fest bore the burden of proving valid service and failed to do so. The Court cited Estrella vs. SM Prime Holdings to clarify that the 2019 Amendments' additional modes of filing and service do not apply to service of final judgments, orders, or resolutions. The Court also held that the requirement of indicating material dates is separate from timely filing, and for guidance, held that when service of a final ruling is improper, the party must indicate the circumstances of receipt, that the reglementary period has not begun, and that the petition is filed with caution. Regarding attachments, the Court applied three guideposts: not all pleadings need be attached, only relevant ones; a document need not be appended if its contents appear in an attached document; and a petition lacking an essential pleading may be given due course if it serves the higher interest of justice. Since the facts were undisputed and the issue was purely legal, the attached RTC Resolution was sufficient for the CA to determine the merits.

• Execution by Motion: The Court acknowledged the general rule from Villareal vs. MWSS that filing of the motion and actual issuance of the writ must concur within five years, but applied the exceptions summarized in Basilonia vs. Villaruz: the five-year period may be tolled when delay is caused by the judgment debtor's dilatory tactics, when strict application would result in injustice to the prevailing party through no fault of their own, and when the satisfaction of judgment was beyond the prevailing party's control. The Court found these exceptions applicable: So filed his Motion for Execution just 68 days after entry of judgment; the subsequent proceedings, including the Second Appeal, were beyond his control and caused by the MeTC's defective Writ; and the delays were caused by Food Fest or redounded to its benefit, including its opposition to the inclusion of interest. The Court found Francisco Motors Corp. vs. Court of Appeals and Zabarte vs. Puyat squarely applicable, noting that in both cases the five-year period was tolled due to errors of the implementing court or the judgment debtor's tactics. The Court computed that excluding the period from So's filing of the Motion for Execution to the CA Decision in the Second Appeal—about three years, five months, and 23 days—the net period lapsed from entry of judgment to the Motion for Issuance of New Writ of Execution was only three years and eight months, well within the five-year period. The Court also clarified the judgment award, computing unpaid rentals of PHP 140,800.00, compensatory interest of PHP 323,894.47, penalty charges of PHP 1,408.00, interest on penalties of PHP 3,238.94, liquidated damages of PHP 117,335.35, and attorney's fees of PHP 117,335.35, totaling PHP 704,012.12 as of March 16, 2011, plus costs of suit and legal interest.

• Service of Final Judgments, Orders, or Resolutions — Under Rule 13, Section 13 of the Rules of Court, final judgments, orders, or resolutions shall be served either personally or by registered mail; service by electronic mail is insufficient. This specific provision prevails over the general modes of service in Rule 13, Section 5. The Court applied this doctrine to hold that the RTC Resolution dismissing So's appeal was not validly served, so the reglementary period to appeal had not commenced.

• Tolling of the Five-Year Period for Execution by Motion — The five-year period under Rule 39, Section 6 of the Rules of Court may be tolled or suspended when: (a) the judgment debtor employs dilatory tactics and legal maneuverings that redound to its benefit; (b) strict application of the rules would result in injustice to the prevailing party to whom no fault could be attributed; or (c) the satisfaction of judgment was already beyond the control of the prevailing party who did what was supposed to be done. The Court applied this doctrine to allow execution by motion despite the lapse of more than five years, excluding the period of proceedings caused by the MeTC's defective writ and Food Fest's opposition.

• Relaxation of Procedural Rules — Following Barnes vs. Padilla and Sanchez vs. CA, procedural rules may be relaxed when: (a) matters of life, liberty, honor, or property are involved; (b) special or compelling circumstances exist; (c) the merits of the case warrant it; (d) the cause is not entirely attributable to the fault or negligence of the party favored by the suspension; (e) the review sought is not merely frivolous and dilatory; and (f) the other party will not be unjustly prejudiced. The Court applied this doctrine to excuse So's non-compliance with Rule 42, Section 2 requirements.

• Substantial Compliance with Attachment Requirements — Under the guideposts in Galvez vs. Court of Appeals, not all pleadings need be attached to a petition; only relevant and pertinent documents must accompany it, and a petition lacking an essential pleading may be given due course if the petitioner later submits the documents or if the higher interest of justice requires deciding the case on the merits. The Court applied this doctrine to find So's attachment of the RTC Resolution sufficient given the purely legal issue raised.

• "Rule 13, Section 13 of the Rules of Court therefore imposes a rule that final judgments, orders, or resolutions of a court may only be served by personal service or by registered mail; it does not allow service by electronic mail." — This passage states the controlling doctrine on service of final rulings, which was central to the Court's finding that the RTC Resolution was not validly served and the reglementary period had not commenced.

• "Essentially, We allowed execution even after the prescribed period elapsed when the delay is caused or occasioned by actions of the judgment debtor and/or is incurred for his benefit or advantage." — This passage, quoted from Basilonia v. Villaruz, articulates the core principle for tolling the five-year period for execution by motion, which the Court applied to allow enforcement of the judgment in So's favor.

• "The purpose of the law in prescribing time limitations for enforcing judgments or actions is to prevent obligors from sleeping on their rights. Private respondent, on the contrary, persistently sought the execution of the judgment in his favor." — This passage from Francisco Motors Corp. v. Court of Appeals explains the rationale behind prescription periods for execution and why the judgment creditor who diligently pursued execution should not be penalized for delays beyond his control.

• "It would be the height of injustice to sanction such a situation that leaves So and his heirs with no remedy to enforce the judgment award in their favor." — This passage captures the Court's equitable reasoning for resolving the case on the merits and allowing execution despite the lapse of time, emphasizing the injustice of leaving a diligent judgment creditor without recourse.

• Nacar vs. Gallery Frames, 716 Phil. 267 (2013) — Followed; cited for the imposition of 12% legal interest per annum from finality of judgment until June 30, 2013, and 6% per annum thereafter, which the CA applied in the Second Appeal and the Court applied in computing the final judgment award.
• Jacinto vs. IAC, 247-A Phil. 59 (1988) — Cited by So; clarifies that it is the filing of the motion for execution, not the entire execution process, that must occur within the five-year period.
• Villareal vs. Metropolitan Waterworks and Sewerage System, 826 Phil. 967 (2018) — Distinguished; cited by Food Fest for the rule that filing of the motion and actual issuance of the writ must concur within five years, but the Court found the exceptions to this rule applicable.
• Basilonia vs. Villaruz, 766 Phil. 1 (2015) — Followed; summarized the exceptions when the five-year period for execution by motion may be tolled, which the Court applied to the present case.
• Francisco Motors Corp. vs. Court of Appeals, 535 Phil. 736 (2006) — Followed; held that the five-year period was suspended where execution was delayed by errors of the implementing court and the delay worked to the judgment debtor's advantage.
• Zabarte vs. Puyat, 935 Phil. 903 (2023) — Followed; held that the five-year period was tolled where the judgment creditor seasonably moved for execution but the writ could not be enforced due to the judgment debtor's opportunism and dilatory tactics.
• Estrella vs. SM Prime Holdings, 936 Phil. 388 (2023) — Followed; clarified that the additional modes of filing and service under the 2019 Amendments do not apply to initiatory pleadings and that service of final judgments, orders, or resolutions continues to be governed by Rule 13, Section 13.
• Heirs of Leung vs. Heirs of Madio, 905 Phil. 289 (2021) — Followed; held that although the period to appeal had not commenced where a final judgment was unserved by personal service or registered mail, the judgment was still reviewable by the appropriate appellate tribunal.
• Lara's Gifts & Decors, Inc. vs. Midtown Industrial Sales, Inc., 929 Phil. 754 (2022) — Followed; cited for the rule that compensatory interest must accrue on a monetary award based on the stipulated interest in the penalty clause, and that interest due shall earn legal interest from judicial demand.
• Barnes vs. Padilla, 500 Phil. 303 (2005) — Followed; enumerated the circumstances justifying relaxation of procedural rules, which the Court applied to excuse So's procedural defects.
• Sanchez vs. CA, 452 Phil. 665 (2003) — Followed; cited in Barnes vs. Padilla for the elements allowing an appeal to be given due course despite procedural defects.
• Duremdes vs. Jorilla, 871 Phil. 810 (2020) — Followed; underscored that compliance with procedural rules should help secure and not defeat justice, and that remand may be avoided when the Court can decide the case on the merits.

• Rule 42, Section 2, Rules of Court — Requires petitions for review to indicate specific material dates showing timely filing and to be accompanied by clearly legible duplicate originals or true copies of the judgments or final orders of both lower courts; the Court found So's non-compliance excusable under the circumstances.
• Rule 42, Section 3, Rules of Court — States that failure to comply with any requirement regarding the contents of the petition is a sufficient ground for dismissal; the Court held this should not be strictly applied given the excusable defects.
• Rule 13, Section 5, Rules of Court — Provides general modes of service including personal service, registered mail, accredited courier, electronic mail, and facsimile transmission; the Court held this general provision must yield to the specific provision in Section 13 for final orders.
• Rule 13, Section 13, Rules of Court — Mandates that judgments, final orders, or resolutions shall be served either personally or by registered mail; the Court applied this to find the RTC Resolution served by electronic mail was not validly served.
• Rule 13, Section 17, Rules of Court — Provides the modes of proof of service; the Court reasoned that only personal service and registered mail involve preparation of a return by a public officer, ensuring reliable proof of service.
• Rule 39, Section 6, Rules of Court — Provides that a final and executory judgment may be executed on motion within five years from entry, and after such time, by independent action; the Court held the five-year period was tolled in this case.
• Article 2209, Civil Code — Provides that if the obligation consists of payment of a sum of money and the debtor incurs delay, the indemnity for damages shall be the payment of the interest agreed upon, or in the absence of stipulation, the legal interest of 6% per annum; applied to compute the 1% monthly penalty charge on unpaid rentals.
• Article 2212, Civil Code — Provides that interest due shall earn legal interest from the time it is judicially demanded; applied to compound the interest on unpaid rentals and penalty charges from judicial demand.
• Article 2226, Civil Code — Defines liquidated damages as those agreed upon by the parties to be paid in case of breach; applied to uphold the 25% liquidated damages clause in the lease contract.
• Article 1226, Civil Code — Provides that in obligations with a penal clause, the penalty shall substitute the indemnity for damages unless there is a stipulation to the contrary; applied to allow liquidated damages in addition to legal interest.

Caguioa (Chairperson), Gaerlan, and Dimaampao, JJ., concurred. Singh, J., was on leave.

N/A — No dissenting opinion was noted in the provided case text.