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Rallos vs. City of Cebu

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  FIRST DIVISION [G.R. No. 202651. August 28, 2013.] LUCENA B. RALLOS ,  petitioner  , vs  . CITY OF CEBU, HONORABLEMICHAEL RAMA, HONORABLE JOY AUGUSTUS YOUNG,HONORABLE SISINIO ANDALES, HONORABLE RODRIGOABELLANOSA, HONORABLE ALVIN ARCILLA, HONORABLE RAULALCOSEBA, HONORABLE MA. NIDA CABRERA, HONORABLEROBERTO CABARRUBIAS, HONORABLE ALVIN DIZON,HONORABLE RONALD CUENCO, HONORABLE LEA JAPSON,HONORABLE JOSE DALUZ III, HONORABLE EDGARDO LABELLA,HONORABLE MARGARITA OSMEÑA, HONORABLE AUGUSTUSPE, HONORABLE RICHARD OSMEÑA, HONORABLE NOELWENCESLAO, HONORABLE EDUARDO RAMA, JR., HONORABLE MICHAEL RALOTA, HONORABLE JOHN PHILIP ECHAVEZ-PO,ATTY. JOSEPH BERNALDEZ, ATTY. JUNE MARATAS, ATTY. JERONE CASTILLO, ATTY. MARY ANN SUSON, ATTY. LESLIEANN REYES, ATTY. CARLO VINCENT GIMENA, ATTY.FERDINAND CAÑETE, ATTY. ISMAEL GARAYGAY III, ATTY.LECEL LLAMEDO and ATTY. MARIE VELLE ABELLA ,  respondents  . RESOLUTIONREYES ,  J p :One of the Heirs of Reverend Father Vicente Rallos (Heirs of Fr. Rallos), Lucena B.Rallos 1  (Lucena), is now before this Court with a petition 2  praying for the citationfor indirect contempt of the City of Cebu, Mayor Michael Rama (Mayor Rama), thepresiding officer and members of the  Sangguniang Panlungsod,  and lawyers fromthe Office of the City Attorney (respondents). The instant petition is anchored, onLucena's allegation that the respondents impede the execution of final andexecutory judgments rendered by this Court in G.R. Nos. 179662 3  and 194111. 4 G.R. Nos. 179662 and 194111 were among a string of suits which srcinated from aComplaint for Forfeiture of Improvements or Payment of Fair Market Value withMoral and Exemplary Damages 5  filed in 1997 by the Heirs of Fr. Rallos before theRegional Trial Court (RTC) of Cebu City, Branch 9, against the City of Cebu relativeto two parcels of land 6  with a total area of 4,654 square meters located in Barangay Sambag I which were expropriated in 1963 for road constructionpurposes. Antecedent Facts At the root of the controversy are Lots 485-D and 485-E of the Banilad Estate,Sambag I, Cebu City, which were expropriated to be used as a public road in 1963.   The Heirs of Fr. Rallos alleged that the City of Cebu occupied the lots in bad faith sans the authority of the former's predecessors-in-interest, who were the registeredowners of the subject parcels of land.On June 11, 1997, the Heirs of Fr. Rallos filed before the RTC a Complaint forForfeiture of Improvements or Payment of Fair Market Value with Moral andExemplary Damages against the City of Cebu.In its Answer filed on October 6, 1997, the City of Cebu contended that the subjectparcels of land are road lots and are not residential in character. They have beenwithdrawn from the commerce of men and were occupied by the City of Cebuwithout expropriation proceedings pursuant to Ordinance No. 416 which wasenacted in 1963 or more than 35 years before the Heirs of Fr. Rallos instituted theircomplaint.On January 14, 2000, the RTC rendered a Decision, 7  which found the City of Cebuliable to pay the Heirs of Fr. Rallos just compensation in the amount still to bedetermined by a board of three commissioners, one each to be designated by thecontending parties and the court. To assail the Decision rendered on January 14, 2000, the City of Cebu filed a Motionfor Reconsideration, which was however denied by the RTC on February 5, 2001. 8  The members of the Board of Commissioners thereafter submitted their respectiveappraisal reports. On July 24, 2001, the RTC rendered a Decision, 9  the dispositiveportion of which, in part, reads: WHEREFORE, the [RTC] hereby renders judgment, ordering [the City of Cebu] to pay [the Heirs of Fr. Rallos] as just compensation for Lots 485-Dand 485-E the amount of Php34,905,000.00 plus interest at 12% per annumto start 40 days from [the] date of this decision and to continue until thewhole amount shall have been fully paid. [The City of Cebu] is furtherordered to pay [the Heirs of Fr. Rallos] the following amounts:1.Php50,000.00 as reimbursement for attorney's fees; EAcCHI 2.Php50,000.00 as reimbursement for litigation expenses. 10  The contending parties both moved for the reconsideration of the Decision renderedon July 24, 2001. The City of Cebu argued that the reckoning period for thecomputation of just compensation should be at least not later than 1963 when thesaid lots were initially occupied. On the other hand, the Heirs of Fr. Rallos insistedthat the amount of just compensation payable by the City of Cebu should beincreased from Php7,500.00 to Php12,500.00 per sq m, the latter being the fairmarket value of the subject lots. They also prayed for the award of damages in theamount of Php16,186,520.00, which was allegedly the value of the loss of usage of the properties involved from 1963 to 1997 as computed by Atty. Fidel Kwan, thecommissioner appointed by the RTC.On March 21, 2002, the RTC issued a Consolidated Order 11  denying the Motion for  Reconsideration filed by the City of Cebu, but modifying the Decision rendered on July 24, 2001. Through the said order, the RTC increased the amount of justcompensation payable to the Heirs of Fr. Rallos from Php7,500.00 to Php9,500.00per sq m. The City of Cebu filed with the RTC a Notice of Appeal, which was opposed by theHeirs of Fr. Rallos.In the Decision 12  rendered on May 29, 2007, which resolved the appeal 13  filed bythe City of Cebu, the CA opined that the RTC erred in holding that the reckoningpoint for the determination of the amount of just compensation should be from1997, the time the complaint for just compensation was filed by the Heirs of Fr.Rallos. Notwithstanding the foregoing, the CA still dismissed on procedural groundsthe appeal filed by the City of Cebu. The CA pointed out that pursuant to Sections 2 14  and 9, 15  Rule 41 and Section 1, 16  Rule 50 of the Rules of Court, a record onappeal and not a notice of appeal should have been filed before it by the City of Cebu to assail the RTC's Decisions rendered on January 14, 2000 and July 24, 2001and the Orders issued on February 5, 2001 and March 21, 2002. The City of Cebu filed before this Court a Petition for Review on Certiorari 17  toassail the Decision rendered by the CA on May 29, 2007. This Court denied thesame through a Minute Resolution 18  issued on December 5, 2007. The said MinuteResolution was recorded in the Book of Entries of Judgments on April 21, 2008. 19  The Heirs of Fr. Rallos thereafter filed before the RTC a Motion for Execution relativeto the Decision rendered on July 24, 2001. They claimed that in 2001, the City of Cebu paid them Php34,905,000.00, but there remained a balance of Php46,546,920.00 left to be paid, computed as of September 2, 2008. On its part,the City of Cebu admitted still owing the Heirs of Fr. Rallos but only in the amountof Php16,893,162.08. 20 On December 4, 2008, the RTC issued a writ of execution in favor of the Heirs of Fr.Rallos, which in part, reads: NOW, THEREFORE, you are hereby commanded to serve a copy hereof to judgment obligor City of Cebu and demand for the immediate payment of Php44,213,000.00, less the partial payment of Php34,905,000.00 plusinterest at 12% per annum to start 40 days from date of the July 24, 2001Decision and to continue until the whole amount has been fully paid;Php50,000.00 as attorney's fees; and Php50,000.00 as litigation expenses. .. . . 21 Sheriff Antonio Bellones (Sheriff Bellones) then served upon the City of Cebu ademand letter, dated December 4, 2008, and which was amended on January 26,2009, indicating that: DEMAND is hereby made for the judgment obligor City of Cebu . . . tofacilitate the prompt payment of the following: (a) just compensation of Lots 485-D and 485-E in the amount of Php44,213,000.00 plus interest of 12% per annum starting 40 days from the July 24, 2001 Decision and to  continue until the whole amount has been duly paid less partial payment of Php34,905,000.00 . . . . 22   AIcaDC  The City of Cebu sought the reiteration of the directives stated in the Writ of Execution issued on December 4, 2008 and the setting aside of the amendeddemand letter served upon it by Sheriff Bellones.On March 16, 2009, the RTC issued an Order 23  denying the City of Cebu's motionfor the reiteration of the writ of execution. The RTC, however, set aside the demandletter served upon the City of Cebu by Sheriff Bellones and interpreted thedirectives of the writ of execution issued on December 4, 2008 as: [T]he entire amount of Php44,213,000.00 shall be subjected to a 12%interest per annum to start 40 days from the date the decision on July 24,2001 [was rendered] until the amount of Php34,905,000.00 was partiallypaid by the City of Cebu. After the payment by the City of Cebu of a partialamount, the balance shall again be subjected to 12% interest until thesame shall have been fully paid. 24  The Heirs of Fr. Rallos assailed the abovementioned order on the ground that iteffectively modified the final and executory Decision rendered on July 24, 2001. They likewise sought the application of Article 2212 25  of the New Civil Code and jurisprudence so as to entitle them to legal interest on the interest due to thempursuant to the Decision rendered on July 24, 2001. In the Order issued on May 20,2009, the RTC did not favorably consider the preceding claims.A Petition for Certiorari   and  Mandamus    26  was then filed by the Heirs of Fr. Rallosbefore the CA to challenge the Orders issued by the RTC on March 16, 2009 andMay 20, 2009. The CA granted the petition after finding that the two assailed orderseffectively modified the final and executory disposition made by the RTC on March21, 2002. The CA likewise ruled that the case calls for the application of Article 2212of the New Civil Code, hence, it directed the City of Cebu to pay interest at the rateof 12%  per annum   upon the interest due, to be computed from the date of the filingof the complaint until full satisfaction of the obligation. The CA stated: Note that the final and executory consolidated decision of July 24, 2001 asmodified by the final and executory order of March 21, 2002, clearly directedherein respondent Cebu City to pay interest at the rate of 12% per annumbased on the amount of [Php]9,500.00 per square meter starting 40 daysfrom the date of the decision and to continue until the entire amount shallhave been fully paid. Yet, the assailed orders . . ., now directed that the 12%interest per annum be paid on the declining balance contrary to the directivein the final and executory judgment . . . .xxx xxx xxx. . . [The Heirs of Fr. Rallos] are without a doubt entitled to 12% interest perannum on the interest due from finality until its satisfaction . . . . The same isproper even if not expressly stated in the final and executory judgment . . . . 27

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