FACTS
On
15 October 1982, petitioners Antonio Castelo, Bernabe Banson, Lourdes
Banson and Pompeyo Depante entered into a contract denominated as a "Deed
of Conditional Sale" with private respondent Milagros Dela Rosa involving
a parcel of land. The agreed price of the land was P269,408.00. Upon signing
the contract, private respondent paid petitioners P106,000.00 leaving a balance
of P163,408.00. The Deed of Conditional Sale also stipulated that:
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b.)The
balance of P163,408.00 to be paid on or before December 31, 1982
without interest and penalty charges;
c.)Should
the said balance [remain unpaid] by the VENDEE, the VENDORS hereby agree to
give the VENDEE a grace period of SIX (6) months or up to June 30,
1983 to pay said balance provided that interest at the rate of
12% per annum shall be charged and 1% penalty charge a month shall be imposed
on the remaining diminishing balance.
Private
respondent Dela Rosa was unable to pay the remaining balance. Petitioners filed
an action for specific performance with damages. RTC rendered the decision
ordering the rescission of the Deed of Conditional Sale. Petitioners went on
Certiorari to CA. They claimed that rescission of the contract was only an
alternative relief available under the Civil Code, while they in their
complaint before the RTC, had asked for specific performance with damages.CA
reversed the RTC decision. Writ of execution was issued. Private respondent
Dela Rosa was required to pay
petitioners a total of P197,723.68. Petitioners filed a motion for
reconsideration and a separate motion for alias writ of
execution contending that the sum of P197,723.68 was erroneous. They argued
that the obligation of private respondent was to pay (a) interest at
the rate of twelve percent (12%) per annum plus (b) one
percent (1%) penalty charge per month, from default, i.e, from 1
January 1983; that the amount to be paid by the Defendant should be
P398,814.88 instead and not P197,723.68 or a difference of P201,091.20.
RTC
denied the motion. Further contends that the phrase "to pay interest"
found in the dispositive portion of the CA’s November 21, 1986 decision did
not refer to the stipulation in the "Deed of Conditional Sale" but
rather to the legal rate of interest imposed by the CA which started to
run from 12 February 1987, the date of entry of judgment.
Petitioner
filed on certiorari to CA. CA dismissed it. But stated that the part of the
dispositive portion, ordering the "defendant
. . . to pay the balance of the conditional sale in the amount of P163,408.00,
to pay interest . . . ." Being a "new" judgment or decision, the
computation of the "interest" on the balance of the conditional sale
should commence from the date of its ENTRY on February 12, 1987, when the
decision became FINAL and EXECUTORY.
ISSUE
What
is the correct interpretation of the phrase "to pay interest" set out
in the dispositive portion of the CA decision?
HELD
The
established doctrine is that when the dispositive portion of a judgment, which
has become final and executory, contains a clerical error or an ambiguity
arising from an inadvertent omission, such error or ambiguity may be clarified
by reference to the body of the decision itself.
SC
believe and so hold that the phrase “to pay interest,” found in the dispositive
portion of the CA decision must, under applicable law, refer to the interest
stipulated by the parties in the Deed of Conditional Sale which they had entered
into on 15 October 1982. SC note, in the first place, that the phrase “to pay
interest” comes close upon the heels of the preceding phrase "to comply
with her obligation under the conditional sale to pay the balance — of
P163,408.00." A strong inference thus arises that the "interest"
required to be paid is the interest stipulated as part of the “obligation [of
private respondent dela Rosa] under the conditional sale [agreement] to pay the
balance of [the purchase price of the land.
In
the computation for the amount to be paid, The question is whether, during
the period of 1 January 1983 up to 30 June 1983, 12% interest per
annum plus 1% penalty charge a month was payable "on the
remaining diminishing balance;" or whether during the
period from 1 January 1983 to 30 June 1983, only 12% per
annum interest was payable while the 1% per month penalty charge would
in addition begin to accrue on any balance remaining unpaid as of 1
July 1983.
SC
believed the parties intended the latter view. The interpretation SC adopted is
also supported by the principle that in case
of ambiguity in contract language, that interpretation which establishes a less
onerous transmission of rights or imposition of lesser burdens which permits
greater reciprocity between the parties, is to be adopted (Art. 1378).
WHEREFORE,
the writ of certiorari is hereby GRANTED.
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(2)ordering
the defendant to comply with her obligation under the conditional sale to pay
the balance of the conditional sale in the amount of P163,408.00, to pay
interest on the amount of the balance remaining unpaid during the
period from 1 January 1983 to 30 June 1983 at the rate of 12% per annum; and,
from 1 July 1983 until full payment of the amount due, to pay interest at the
rate of 12% per annum plus another 12% per annum (i.e., 1% penalty charge per
month), or a total of 24% per annum, on the balance remaining unpaid; and
(3)in
default thereof, the rescission of the "Deed of
Conditional Sale" is the alternative."
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