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Republic of the Philippines
SUPREME COURT

SECOND DIVISION

G.R. No. 139448 October 11, 2005

JACINTO GALANG, GREGORIA GALANG and MARISSA GALANG, Petitioners,
vs.
HON. COURT OF APPEALS, INES CAMAGANAKAN, ANTONIO CAMAGANAKAN, MARITA CAMAGANAKAN and BELINDA CAMAGANAKAN, Respondents.

D E C I S I O N

CHICO-NAZARIO, J.:

Before this Court is a petition for review on certiorari of the Decision¹ of the Court of Appeals in CA-G.R. SP No. 47417 dated 27 May 1999 and its Resolution² dated 27 July 1999 granting private respondents’ petition for annulment of judgment with prayer for injunction of the decision of the Securities and Exchange Commission (SEC) in SEC EB Case No. 550.

A summary of the facts that gave rise to the present action follows:

As of 1992, the entire capital stock of CGP Transportation and Services Corp. (CGP) was equally divided between the Galang family and the family of Lamberto C. Camaganakan, Jr. (Lamberto). Each family had an aggregate of five thousand (5,000) shares of stock.³

On 08 October 1992, the Galangs sold their entire interest in the CGP to Lamberto in a handwritten document.⁴

On 27 August 1993, the Galangs filed a petition before the SEC (SEC Case No. 08-93-45567) against CGP and/or Lamberto seeking, among other things, the dissolution of the corporation and the liquidation of its assets.⁵ Thereafter, or on 08 November 1993, a more formal Memorandum of Agreement (MOA) was entered into between the Galangs and Lamberto which confirmed the former’s earlier sale of its entire 50% interest in the corporation to the latter.⁶ Accordingly, the Galangs withdrew SEC Case No. 08-93-45567. However, on 24 February 1994, the Galangs filed a petition for mandamus against Lamberto with the SEC (SEC Case No. 02-94-4697), which sought, among other remedies, Lamberto to pay damages.⁷

On 03 May 1995, Lamberto entered into a compromise settlement with the Galangs in SEC Case No. 02-94-4697 which agreement was embodied in a "Joint Motion for Approval of Compromise Agreement" dated 03 May 1995.⁸ The agreement stipulated the terms of the payments to be made by Lamberto on the shares of stock of the Galangs earlier sold to him.⁹ On 09 May 1995, Ines, Honorato, Marita, Cecilia, Belinda, Mario, Aniceto and Antonio, all surnamed Camaganakan, executed a Special Power of Attorney (SPA) authorizing Lamberto to (a) acquire CGP shares of stock of the Galang family in their behalf; and (b) to enter into a compromise agreement in SEC Case No. 02-94-4697 (the case for mandamus).¹⁰ Thus, on 16 May 1995, the SEC issued a "Judgment By Compromise Agreement."¹¹

About a year later, in a MOA dated 30 May 1996 between Lamberto and CGP (referred collectively in the MOA as "Camaganakans") and the Galangs, certain conditions in the Compromise Agreement dated 03 May 1995 were revised.¹² Said agreement was signed by Jacinto, Gregoria and Marissa Galang on one hand, and by Lamberto, for himself, and Nilda Santos, ostensibly representing CGP, on the other.¹³ The same was submitted to the SEC for which Hearing Officer Enrique L. Flores issued an Order dated 18 June 1996 approving the same and rendering judgment in SEC Case No. 02-94-4697 on the basis thereof.¹⁴

Almost a year thereafter, or on 11 April 1997, it was CGP’s turn to file a case before the SEC. CGP filed a petition for annulment of the compromise agreement claiming that Lamberto had no authority to involve it in the compromise agreement in SEC Case No. 02-94-4697 and prayed that the petition, docketed as SEC Case No. 04-97-5608, be consolidated with SEC Case No. 02-94-4697.¹⁵ The petition was verified by herein private respondent Ines Camaganakan as President of CGP.¹⁶

Meanwhile, Lamberto failed to comply with his obligations contained in the Compromise Agreement dated 30 May 1996. Hence, on 18 April 1997, Hearing Officer Rosalina Tividad-Tesoro issued an Order entering the Judgment by Compromise in the Judgment Book of the SEC and issuing a writ of execution to implement said agreement.¹⁷ The writ of execution was issued likewise on 18 April 1997.¹⁸

On 28 April 1997, CGP filed another case in the SEC, this time, a petition for certiorari with prayer for temporary restraining order (TRO)/writ of preliminary injunction docketed as SEC EB Case No. 550 which sought to annul the 18 April 1997 Order.¹⁹ CGP specifically questioned its inclusion in the judgment of compromise.

On 05 February 1998, the SEC came out with a decision in SEC EB Case No. 550, where it held that the compromise agreement between the Galangs and Lamberto is enforceable only against their respective shareholdings and not against the corporate assets and properties of CGP. The dispositive portion of the decision reads:

WHEREFORE, premises considered, and there being grave abuse of discretion in issuing the Writ of Execution against the properties of the petitioner corporation, the following Orders are hereby issued:

1. Setting aside the Order dated April 18, 1997 granting the issuance of a Writ of Execution to execute properties of the corporation which included the eleven (11) buses, attached and levied by the SEC Sheriff and instead, a Writ of Execution be issued to attach and levy the shares of stocks of the Camaganakan family.

2. Lifting any and all levy, the respondent Sheriff may have made on the properties of the corporation.²⁰ (Emphasis supplied)

The Galangs moved for reconsideration of the afore-quoted decision which motion they subsequently withdrew.²¹ The decision became final and executory on 24 March 1998.²² On even date, Associate Commissioner Edijer A. Martinez directed the Hearing Officer to issue a writ of execution.²³ A writ of execution was issued on 06 April 1998.²⁴

Pursuant to the writ of execution, a notice of garnishment and a notice on levy upon personal properties, all dated 14 April 1998, were issued by Sheriff Edgardo Grueso.

On 17 April 1998, Ines, Belinda, Honorato, Marita, Aniceto, Cecilia and Antonio, all surnamed Camaganakan, filed before the Court of Appeals a petition for annulment of judgment of the 05 February 1998 decision of the SEC in SEC EB Case No. 550 with prayer for injunction against the SEC and Sheriff Grueso as public respondents and against herein petitioners, Jacinto, Gregoria and Marissa Galang.²⁵ The Camaganakans alleged in their petition that the decision in SEC EB Case No. 550 specifically commanded the enforcement of the claims of the Galangs against their shares of stocks in CGP when in truth and in fact they were not parties in SEC EB Case No. 550, thus, said decision is void as to them for lack of jurisdiction and for violation of their constitutional right to due process. Likewise, the Camaganakans contended that the singling out of their shares of stock for levy in satisfaction of the claim of the Galangs violates the rules on enforcement of a writ of execution.

In the afternoon of 17 April 1998, the Court of Appeals issued a TRO directed against then public respondents SEC and Sheriff Grueso restraining them from pursuing the scheduled auction sale on 20 April 1998.²⁶ The TRO was received by the SEC en banc in the afternoon of 20 April 1998²⁷ after Sheriff Grueso had already conducted the auction earlier in the day, or at ten o’clock in the morning.²⁸ In his Sheriff’s Return dated 20 April 1998, Sheriff Grueso stated that he only sold the shares owned by Lamberto per corporate records with the SEC (amounting to 4,500 shares) and that the shares of the other members of the Camaganakans were not touched.²⁹ The 4,500 shares were sold for ₱3 Million with herein petitioner Jacinto Galang as the lone and highest bidder.³⁰

In the meantime, the Galangs filed their Comment to the petition for annulment of judgment.³¹ In their Reply to the Comment, the Camaganakans brought forth for the first time a photocopy of a notarized deed of assignment dated 26 May 1995 which would ostensibly show that the Galang family transferred to Ines Camaganakan their 5,000 shares in CGP for and in consideration of Five Hundred Thousand Pesos (₱500,000.00). According to the Camaganakans, another strong reason why the SEC should not have enforced Lamberto’s ₱15 Million personal obligation against the CGP shares of stocks is that these shares were not owned by Lamberto but by Ines.³²

On 16 May 1998, the Galangs set the case for oral argument.³³

On 28 May 1998, the Camaganakans filed a Supplemental Petition (With Prayer For Expanded TRO, Preliminary Mandatory Injunction and to Cite respondent Sheriff Grueso and private respondents in Contempt of Court) where they alleged in the main that the supplemental petition was actuated by events subsequent to the filing of the original petition as the SEC had proceeded with the auction sale of the 4,500 CGP shares originally owned by the Galangs but later sold – not to Lamberto – but to Ines. ³⁴

On 17 June 1998, the Special Twelfth Division of the Court of Appeals granted the Camaganakans’ prayer for an amended TRO "if only to put the parties on status quo, which existed before the filing of herein original petition."³⁵

On 27 May 1999, the Special Fifth Division of the Court of Appeals rendered the assailed Decision, the dispositive portion of which reads:

THE FOREGOING CONSIDERED, the contested Decision is hereby nullified but only in so far as it directed the issuance of a Writ of Execution for the purpose of attaching the shares of stocks of the Camaganakan family, precisely referring to the properties of herein petitioners.³⁶

On 27 July 1999, the assailed Resolution was rendered denying the Galangs’ Motion for Reconsideration.³⁷

Hence, the present petition anchored on the following arguments:

I.

THE CONTROVERSY BEFORE THE CA INVOLVED INTRA-CORPORATE CONFLICTS WHICH IS WITHIN THE EXCLUSIVE JURISDICTION OF THE SEC

II.

THE PENDING MOTION WITH THE SEC CONSTITUTED A BAR TO THE FILING OF THE PETITION FOR ANNULMENT OF JUDGMENT WITH THE CA ON THE GROUND OF FORUM SHOPPING

III.

THE HONORABLE COURT OF APPEALS SET ASIDE AND NULLIFIED THE FINAL AND EXECUTORY JUDGMENT OF THE SEC ARISING FROM A COMPROMISE AGREEMENT FINALLY SETTLED UPON THE RESOLUTION OF THE PETITION FOR CERTIORARI FILED AGAINST AN EARLIER SEC DECISION

IV.

RULE 47 [OF THE 1997 RULES OF CIVIL PROCEDURE] CANNOT BE APPLIED BY THE HONORABLE COURT OF APPEALS IN A PETITION FOR ANNULMENT OF JUDGMENT [OF THE SEC] AS THE SAME APPLIES ONLY TO "ANNULMENT BY THE COURT OF APPEALS OF JUDGMENTS OR FINAL ORDERS AND RESOLUTIONS IN CIVIL ACTIONS OF REGIONAL TRIAL COURTS XXX"

V.

IN RENDERING THE QUESTIONED DECISION [AND RESOLUTION DENYING THE MOTION FOR RECONSIDERATION] –

1. The Honorable CA acted with manifest disregard of the right of petitioners to a fair and impartial hearing when the CA totally ignored the documentary exhibits of substance and gave credence to manufactured evidence fabricated shortly before the petition was submitted for resolution;

2. There is a clear denial of due process of law when the CA failed to resolve prior to rendition of judgment incidents of substantial importance;

3. There is undue haste amounting to denial of due process of law when the CA resolved the Motion for Reconsideration before the expiration of the period to file REPLY to OPPOSITION [which was prayed for in the {unresolved} MOTION FOR EXTENSION of the herein petitioners, (said extension prayed yet to expire on July 31, 1999); and

4. There was an undue haste in the issuance of the TRO by the Division to which Honorable Demetrio Demetria belongs and there is an unexplained mystery in the case being assigned to the Division of Justice Demetrio Demetria and his sudden departure from the division after issuing the TRO.

As we navigate through the seemingly endless diatribes of the parties and their counsels that have muddled the issues of what is already a complicated case insofar as the facts thereof are concerned, we have come to the inescapable conclusion that the resolution of this controversy will not depend on the arguments of the parties but on the central issue of whether or not the Court of Appeals committed reversible error in granting the Camaganakans’ petition for annulment of judgment under Rule 47 of the Rules on Civil Procedure.

Section 1, Rule 47 states:

SECTION 1. Coverage. –This Rule shall govern the annulment by the Court of Appeals of judgments or final orders and resolutions in civil actions of Regional Trial Courts for which the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no longer available through no fault of the petitioner. (Emphasis supplied)

Rule 47 on annulment of judgments is a new provision under the 1997 Rules of Civil Procedure albeit the remedy has long been given imprimatur by the courts.³⁸ It covers only the judgments or final orders and resolutions in civil actions of Regional Trial Courts³⁹ and not those of the SEC. In fact, Section 9 of Batas Pambansa Blg. 129, as amended, only vests in the Court of Appeals "exclusive jurisdiction over actions for annulment of judgments of Regional Trial Courts."⁴⁰

An action for annulment of judgment is a remedy in law independent of the case where the judgment sought to be annulled is rendered.⁴¹ The concern that the remedy could so easily be resorted to as an instrument to delay a final and executory judgment has prompted safeguards to be put in place in order to avoid an abuse of the rule.⁴² Thus, among other things, the right to have a final judgment annulled must be expressly granted by law.⁴³ In Macalalag v. Ombudsman⁴⁴ we emphatically held that –

. . . The right to appeal is a mere statutory privilege and may be exercised only in the manner prescribed by, and in accordance with, the provisions of law. There must then be a law expressly granting such right. This legal axiom is also applicable and even more true in actions for annulment of judgments which is an exception to the rule on finality of judgments.

Unfortunately for the Camaganakans, the Revised Rules of Procedure in the SEC is silent as to the remedy of annulment of judgments of its final orders and resolutions.⁴⁵

And so we hold that the Court of Appeals indeed erred as it is without jurisdiction to entertain a petition for annulment of judgment of a final decision of the Securities and Exchange Commission.

What the Camaganakans should have done was to seek for clarification from the SEC as to the inclusion of the "Camaganakan family" in the dispositive portion of the decision. However, as the records of the case are already before us, and in the interest of substantial justice in order to put this issue finally to rest, we will rule squarely on whether or not the SEC erroneously exercised jurisdiction over the Camaganakans who are non-parties to the case.⁴⁶

In their original petition dated 16 April 1998, the Camaganakans alleged lack of jurisdiction and violation of due process as the parties to SEC EB Case No. 550 were just CGP, the Galangs and Lamberto, yet, the dispositive portion of the decision mentioned the "Camaganakan family." Thus, the Camaganakans lamented that the SEC decision and writ of execution were null and void as to them for lack of jurisdiction as they were non-parties.

Scrupulously dissecting the decision in SEC EB Case No. 550 as well as the proceedings leading thereto, it becomes apparent that nowhere from the decision are the Camaganakans (i.e., Ines, Belinda, Honorato, Marita, Aniceto, Cecilia and Antonio) mentioned except Lamberto. This can only mean then, that when the SEC mentioned the "Camaganakan family" in the dispositive portion of the decision, it only referred to Lamberto Camaganakan, Jr. as he was the only Camaganakan that had anything to do with the case. Verily, in case of any ambiguity or uncertainty in the dispositive portion of a decision, the body of the opinion may be referred to for purposes of construing the dispositive part of the judgment.⁴⁷ The dispositive part of the decision must find support in the body of the decision spelling out the ratio decidendi.⁴⁸ And, in the body of the decision, it is only Lamberto who is clearly referred to as one of the main parties in the case.

Special note must likewise be made of the fact that SEC EB Case No. 550 referred to CGP’s petition for certiorari to annul the SEC Order dated 18 April 1997 entering the 30 May 1996 Judgment by Compromise in the Judgment Book of the SEC and issuing a writ of execution to implement said agreement. The parties to the judgment by compromise were the Galangs (i.e., Jacinto, Gregoria and Marissa) on one hand and Lamberto on the other.⁴⁹ The agreement referred to Lamberto as "Camaganakans." This might explain why the SEC as well referred to Lamberto as the "Camaganakan family." Clearly therefore, tagging Lamberto as "Camaganakan family" in the dispositive portion was, at most, an oversight on the part of the SEC which could be remedied without affecting the validity and the effectiveness of the decision.

We thus quote with approval the comment of the then public respondent SEC:

The portion of the SEC Decision dated February 5, 1998 being questioned by the petitioners state:

Setting aside the Order dated April 18, 1997 granting the issuance of a Writ of Execution to execute properties of the corporation which included the eleven (11) buses, attached and levied by the SEC Sheriff and instead, a Writ of Execution be issued to attach and levy the shares of stocks of the Camaganakan family. (p. 4, Decision)

The afore-quoted portion of the decision merely states that the attachment and levy be made on the shares of stock of the Camaganakan family. The decision did not specifically indicate that petitioners are included in the "Camaganakan family." The decision did not also specifically order the attachment and levy of the shares of stock of petitioners. Thus, the phrase "Camaganakan family" should be construed to refer only to the members of the Camaganakan family who have been involved in the case before the SEC.

The record of the cases filed with the SEC show [sic] that only Lamberto has been involved in these cases before the SEC. In fact, he was the signatory to the compromise agreements and other documents filed before the SEC. Hence, the phrase "Camaganakan family" should be construed to refer only to Lamberto.⁵⁰

Prescinding from the foregoing, the reference to the "Camaganakan family" in the dispositive portion of the SEC decision could only pertain to Lamberto. In Filipino Legion Corporation v. Court of Appeals, et al.⁵¹ we held:

. . . [W]here there is ambiguity caused by an omission or mistake in the dispositive portion of a decision the court may clarify such ambiguity by an amendment even after the judgment had become final, and for this purpose it may resort to the pleadings filed by the parties, the court’s findings of facts and conclusions of law as expressed in the body of the decision.

Going now to the Supplemental Petition for Annulment of Judgment dated 24 May 1998, a perusal of the arguments contained therein would readily reveal that what is being questioned by the Camaganakans is not the decision itself but how it was implemented.⁵² Any alleged irregular implementation of a writ of execution, however, cannot be corrected through the equitable relief of annulment of judgment. The purpose of annulment of judgment is to have the final and executory judgment set aside so that there will be a renewal of litigation.⁵³ The remedy to correct any alleged irregular implementation of the writ of execution thus lies elsewhere. In Canlas v. Court of Appeals,⁵⁴ we stated that "while there is no appeal from execution of judgment, appeal lies in case of irregular implementation of the writ." As a rule, "irregular execution" means the failure of the writ to conform to the decree of the decision executed.⁵⁵

In sum, in deciding this case, we have been ultimately governed by the fact that the rule on annulment of judgment is grounded on equity; thus, the relief it affords is of an extraordinary character and not as readily available as the remedies obtaining a judgment that is not yet final.⁵⁶

WHEREFORE, premises considered, the instant petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 47417 dated 27 May 1999 and its Resolution dated 27 July 1999 are hereby SET ASIDE. The Decision of the Securities and Exchange Commission in SEC EB Case No. 550 dated 05 February 1998 is hereby AFFIRMED with the clarification that the reference to "Camaganakan family" in the dispositive portion thereof pertains to Lamberto Camaganakan, Jr. only. Costs against private respondents.

SO ORDERED.

MINITA V. CHICO-NAZARIO Associate Justice

WE CONCUR:

REYNATO S. PUNO

Associate Justice

Chairman

On Leave

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice	ROMEO J. CALLEJO, SR. Associate Justice
DANTE O. TINGA Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO Associate Justice Chairman, Second Division

C E R T I F I C A T I O N

Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairman’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

HILARIO G. DAVIDE, JR. Chief Justice

Footnotes

* On leave.

¹ Penned by Associate Justice Bernardo LL. Salas with Associate Justices Cancio C. Garcia (now a member of this Court) and Teodoro P. Regino, concurring (Rollo, pp. 67-79).

² Rollo, p. 80.

³ See findings of fact of the SEC in SEC EB Case No. 550 and as admitted by private respondent Ines Camaganakan (SEC EB Case No. 550, Records, Vol. 1, p. 36).

⁴ Ibid.

⁵ Id., pp. 165-170.

⁶ As admitted by private respondent Ines Camaganakan (see CGP petition in SEC Case No. 04-97-5608), SEC Case No. 02-94-4697, Records, Vol. II, p. 167.

⁷ SEC EB Case No. 550, Records, pp. 177-178.

⁸ Supra, note 3, p. 35.

⁹ Ibid.

¹⁰ Supra, note 7, pp. 87-88.

¹¹ Id., pp. 82-85.

¹² SEC Case No. 02-94-4697, Records, Vol. II, pp. 58-60.

¹³ Ibid. CGP later questioned its inclusion in the agreement thru a petition for certiorari (SEC EB Case No. 550) which was decided in its favor.

¹⁴ Id., pp. 63-67.

¹⁵ Id., pp. 163-168.

¹⁶ Ibid.

¹⁷ Supra, note 7, pp. 29-30.

¹⁸ Id., pp. 7-8.

¹⁹ Id., pp. 31-38.

²⁰ Rollo, p. 141.

²¹ Supra, note 7, pp. 218-234, 256-257.

²² Id., p. 260.

²³ SEC Case No. 02-94-4697, Records, Vol. III, p. 42-A.

²⁴ Id., pp. 44-51.

²⁵ CA Rollo, pp. 5-14.

²⁶ The TRO was issued by Associate Justices Bernardo LL. Salas, Consuelo Ynares-Santiago (now a member of this Court) and Demetrio G. Demetria. CA Rollo, pp. 25-29.

²⁷ Supra, note 22, p. 66.

²⁸ Id., p. 67.

²⁹ Id., pp. 73-74.

³⁰ Ibid.

³¹ CA Rollo, pp. 31-41.

³² Id., pp. 116-122.

³³ It does not appear from the CA Rollo if the Court of Appeals granted the motion to set case for oral arguments.

³⁴ Id., pp. 225-238.

³⁵ The TRO was issued by Associate Justices Bernardo LL. Salas, Eloy R. Bello, Jr. and Candido V. Rivera (Id., pp. 276-279).

³⁶ Rollo, pp. 67-78.

³⁷ Rollo, pp. 79-80.

³⁸ Macalalag v. Ombudsman, G.R. No. 147995, 04 March 2004, 424 SCRA 741, 744.

³⁹ Id., pp. 744-745; Elcee Farms, Inc. v. Semillano, G.R. No. 150286, 17 October 2003, 413 SCRA 669, 676; Cole v. Court of Appeals, G.R. Nos. 137551, 138249, 139099, 139631 & 139729, 26 December 2000, 348 SCRA 692, 701.

⁴⁰ Elcee Farms, Inc. v. Semillano, Id.

⁴¹ Supra, note 38, p. 745.

⁴² Ibid.

⁴³ Id., p. 746.

⁴⁴ Ibid.

⁴⁵ The law applicable at the time of the filing of the case for annulment of judgment is Presidential Decree No. 902-A. See also SICD Special Rules, as amended.

⁴⁶ Cf. Perez v. Hermano, G.R. No. 147417, 08 July 2005, wherein, instead of remanding the case, we ruled on the substantive issues involved in the interest of substantial justice.

⁴⁷ Mutual Security Insurance Corp. v. Court of Appeals, G.R. No. L-47018, 11 September 1987, 153 SCRA 678, 684.

⁴⁸ Ibid.

⁴⁹ The Memorandum of Agreement actually includes CGP as a party. Lamberto and CGP were collectively referred to as "Camaganakans." However, in SEC EB Case No. 550, the SEC declared that CGP was not a party to said agreement for lack of authorization from its board.

⁵⁰ CA Rollo, pp. 420-421.

⁵¹ G.R. No. L-22364 & No. L-28330, 30 April 1974, 56 SCRA 674, 691; Republic Surety and Insurance Co., Inc. v. Intermediate Appellate Court, G.R. Nos. L-71131-31, 27 July 1987, 152 SCRA 309, 316.

⁵² Cf. Canlas v. Court of Appeals, G.R. No. L-77691, 08 August 1988, 164 SCRA 160, 170.

⁵³ Cf. Alaban, et al. v. Court of Appeals, G.R. No. 156021, 23 September 2005.

⁵⁴ Supra, note 51, p. 171.

⁵⁵ Ibid. (citations omitted).

⁵⁶ Cf. Barco v. Court of Appeals, G.R. No. 120587, 20 January 2004, 420 SCRA 162, 171.

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