Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

In a decision written by Castro-Bartolome, J., dated 21

November 1986, the Court of Appeals, in CA G.R. No. 07938SP, annulled and set aside the RTC's decision of 17 August
1984. In its dispositive portion, the Court of Appeals decision
stated:
WHEREFORE, the writ of certiorari is hereby granted
annulling the decision of Judge Malaya dated August
17, 1984 and a new one entered:

G.R. No. 96372 May 22, 1995

1) allowing the amendment of the complaint to

conform to the evidence already presented and
defaulted defendant to answer the amendment
within the reglementary period; and

ANTONIO L. CASTELO, BERNABE B. BANSON, LOURDES

A. BANSON, and POMPEYO DEPANTE, petitioners,
vs.
THE COURT OF APPEALS, 12th Division, and MILAGROS
DELA ROSA, respondents.

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 and in default thereof
the rescission thereof is the alternative. 2 (Emphasis
supplied)

FELICIANO, J.:
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 located in 1524 Espaa Street, Sampaloc, Manila, 84.19
square meters in area. The agreed price of the land was Two
Hundred Sixty Nine Thousand, Four Hundred and Eight Pesos
(P269,408.00). Upon signing the contract, private respondent
paid petitioners One Hundred Six Thousand Pesos
(P106,000.00) leaving a balance of One Hundred Sixty
Thousand Four Hundred and Eight Pesos (P163,408.00).
The Deed of Conditional Sale also stipulated that:

Petitioners filed a motion for execution of the 17 August 1984

judgment of the trial court as modified by the 21 November
1986 judgment of the Court of Appeals. Private respondent
opposed this motion.
A writ of execution of the 21 November 1986 judgment of the
Court of Appeals was issued by the trial court on 2 September
1988. Accordingly, a Sheriff's Notice to Pay Judgment was
served on private respondent Dela Rosa requiring her to pay
petitioners a total of One Hundred Ninety Seven Thousand
Seven Hundred Twenty Three Pesos and Sixty Eight Centavos
(P197,723.68), computed as follows:

xxx xxx xxx

Principal
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. 1
(Emphasis supplied)
Private respondent Dela Rosa was unable to pay the
remaining balance on or before 30 June 1983.

plus interest of

12% (per contract)

from 21 Nov. 1986 to

2 Sept. 1988

On 29 July 1983, petitioners filed an action for specific

performance with damages in the Regional Trial Court (RTC) of
Manila against Dela Rosa.
The RTC, in a decision dated 17 August 1984 rendered by
Judge Antonio Q. Malaya, ordered the rescission of the Deed of
Conditional Sale.
Petitioners then went on Certiorari to the Court of Appeals
questioning the trial court's decision rescinding the Deed of
Conditional Sale. 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.

P163,408.00

34,315.6800

Total amount of judgment

(excluding sheriff's fees

and expenses)

P197,723.68 3

P196,089.60

Petitioners filed a motion for reconsideration and a

separate motion for alias writ of execution
contending that the sum of P197,723.68, based on
the Sheriff's own computation, 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:
a.

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; detailed computation of which
are as follows:

Unpaid balance with interest of 12%

Interest from January to August 1988

26,145.28

Interest from January 1983 to August 1988

222,234,88

Principal

163,408.00

P385,642.88

P163,408.00
Plus Real Estate Tax Paid

13,172.00

Amount due to Plaintiffs

P398,814.88 4

P.A. and 1% penalty charge a month

January to December 1983

39,217.92

January to December 1984

39,217.92

January to December 1985

39,217.92

January to December 1986

39,217.92

January to December 1987

39,217.92

January to August 1988

26,145.28

In an Order of 18 April 1990, the trial court denied

the motion for alias writ of execution and the motion
for reconsideration. In denying petitioners' motions,
the trial court stated that it did not have authority to
enlarge the scope of the dispositive portion of the
Court of Appeals' decision which was the subject of
execution. Moreover, the trial court continued, the
phrase "to pay interest" found in the dispositive
portion of the Court of Appeals' 21 November 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 Court of Appeals which
started to run from 12 February 1987, the date of
entry of judgment. Had it intended otherwise, the
Court of Appeals would have declared so.
Petitioners moved for reconsideration of the 18 April
1990 Order, without success.

1% interest per month (P268.16)

the interest for one (1)

year @ 24%

They also claimed that the amount arrived at by the

Sheriff was inconsistent not only with the Court of
Appeal's decision of 21 November 1986, but also the
stipulations in the "Deed of Conditional Sale."

P 39,217.92

x 5 years

Petitioners then went on Certiorari for the second

time to the Court of Appeals claiming that the trial
court had acted with grave abuse of discretion in
issuing its Orders dated 18 April 1990 and 18 June
1990. The petition, docketed as C.A.-G.R. SP No.
22464, was, however, dismissed for lack of merit.
The Court of Appeals, speaking this time through
Luna, J., pronounced that:
Indeed, what must be the subject of
execution is the "new one" or new decision
(referring to the Court of Appeals' decision
in CA-G.R. No. 07938 SP dated 21 November
1986), wherein this Court decreed in
paragraph "2" 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. It is the DECISION of this Court
WHICH DECREED PAYMENT and ACCRUAL OF
INTEREST. 5
Hence this Petition for Review contending that, in the
Luna, J. decision, the Court of Appeals had erred in
ignoring the stipulation for payment of interest in
case of default found in the "Deed of Conditional
Sale."
The instant petition does not seek a review of the
decision of the Court of Appeals dated 21 November
1986, issued in CA G.R. No. 07938-SP, which long ago
became final and executory. The Petition before us
now presents the issue of what is the correct
interpretation of the phrase "to pay interest" set out
in the dispositive portion of the 21 November 1986
decision of Castro-Bartolome, J.
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. In Reinsurance Company of the
Orient, Inc. v. Court of Appeals, 6 the Court surveyed
the applicable case law in the following manner:
It is true that even a judgment which has
become final and executory may be clarified
under certain circumstances. The
dispositive portion of the judgment may, for
instance, contain an error clearly clerical in
nature (perhaps best illustrated by an
arithmetical computation) or an ambiguity
arising from inadvertent omission, which
error may be rectified or ambiguity clarified
and the omission supplied by reference
primarily to the body of the decision itself.
Supplementary reference to the pleadings
previously filed in the case may also be
resorted to by way of corroboration of the
existence of the error or of the ambiguity in
the dispositive art of the judgment. In
Locsin, et al. v. Paredes, et al. (63 Phil. 87
[1936]), this Court allowed a judgment
which had become final and executory to be
clarified by supplying a word which had
been inadvertently omitted and which, when
supplied, in effect changed the literal import
of the original phraseology:
. . . it clearly appears from the allegations of
the complaint, the promissory note
reproduced therein and made a part thereof,
the prayer and the conclusions of fact and
of law contained in the decision of the
respondent judge, that the obligation
contracted by the petitioners is joint and
several and that the parties as well as the
trial judge so understood it. Under the
juridical rule that the judgment should be in
accordance with the allegations, the
evidence and the conclusions of fact and
law, the dispositive part of the judgment
under consideration should have ordered

that the debt be paid severally, and in

omitting the word or adverb "severally"
inadvertently, said judgment became
ambiguous. This ambiguity may be clarified
at any time after the decision is rendered
and even after it had become final (34
Corpus Juris, 235, 326). The respondent
judge did not, therefore, exceed his
jurisdiction in clarifying the dispositive part
of the judgment by supplying the omission.
(63 Phil. at 91-91)
In Filipino Legion Corporation v. Court of Appeals, et
al. (56 SCRA 674 [1974]), the applicable principle
was set out in the following terms:
[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. (56
SCRA at 691; also Presbitero v. Court of
Appeals, 129 SCRA 443 [1984])
In Republic Surety and Insurance Company, Inc. v.
Intermediate Appellate Court (152 SCRA 309 [1987]), the
Court applying the above doctrine said:
. . . We clarify, in other words, what we did
affirm. What is involved here is not what is
ordinarily regarded as a clerical error in the
dispositive part of the decision of the Court
of First Instance, which type of error is
perhaps best typified by an error in
arithmetical computation. At the same time,
what is involved here is not a correction of
an erroneous judgment or dispositive
portion of a judgment. What we believe is
involved here is in the nature of an
inadvertent omission on the part of the
Court of First Instance (which should have
been noticed by private respondent's
counsel who had prepared the complaint),
of what might be described as a logical
follow-through of something set forth both
in the body of the decision and in the
dispositive portion thereof: the inevitable
follow-through, or translation into,
operational or behavioral terms, of the
annulment of the Deed of Sale with
Assumption of Mortgage, form which
petitioners' title or claim of title embodied in
TCT 133153 flow. (152 SCRA at 315) 7
(Emphases in the original)
The question we must resolve is whether or not there
is an ambiguity or clerical error and inadvertent
omission in the dispositive portion of the decision of
Castro-Bartolome, J. dated 21 November 1986, which
may legitimately be clarified by referring to the body
of the decision and perhaps even the pleadings filed
before her. It will be recalled that the second
paragraph of the dispositive portion of that decision
of Castro-Bartolome, J. ordered private respondent
dela Rosa
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 and in default

thereof the rescission thereof is the

alternative. (Emphases supplied)
The dispositive portion itself failed to specify
expressly whether Castro-Bartolome, J. was referring
to the payment of interest in accordance with the
terms and conditions of the "Deed of Conditional
Sale" or whether, as Luna, J. was to hold almost four
(4) years later that the requirement of "to pay
interest" related, not to the interest provisions of the
Conditional Sale Deed between petitioners and
private respondent, but rather to legal interest on the
amount of the unpaid balance of the purchase price
of the land which would begin to accrue from the
date of the entry of the Castro-Bartolome judgment
on 12 February 1987. Luna, J. said:
It is settled that the only portion subject of
execution is the dispositive portion of a
judgment. The judgment of the Honorable
Court of Appeals does not refer to the
interest referred to in the Conditional Deed
of Sale. Said judgment or dispositive portion
cannot be stretched or enlarged to refer to
the interest indicated in the Conditional
Deed of Sale. If that were the intention of
the Honorable Court of Appeals, as
contended by plaintiffs, it would have said
so in black and white. This Court is not
authorized to re-write, alter, amend or
change the above-mentioned dispositive
portion of the judgment of the Honorable
Court of Appeals.
By a fair interpretation, the interest therein
referred to is the legal rate of interest
imposed by the Honorable Court of Appeals
which must commence from the entry of
judgment on February 12, 1987. At this
stage, it appearing that the Decision of the
Honorable Court of Appeals had long
become final and executory. This Court has
no more jurisdiction to entertain reception
of evidence in the matter of the execution of
the dispositive portion of the judgment of
the Honorable Court of Appeals. 8 (Emphasis
supplied)
It thus appears that the Castro-Bartolome decision
was ambiguous in the sense that it was too cryptic.
Examination of the body of that decision, however,
sheds no light on the reference intended by CastroBartolome, J. in directing private respondent "to pay
interest." Luna, J. himself had to resort to "fair
interpretation." We believe that, in these
circumstances, we must assume that Mme. Justice
Castro-Bartolome meant to decide in accordance
with law; that we cannot fairly assume that she was
unfamiliar with the applicable law or that she had
intended to grant petitioners less than that they were
entitled to under the law. Thus, the important
question is: under the circumstances which were
before Castro-Bartolome, J., what should private
respondent dela Rosa have been held liable for in
accordance with law? 9
We believe and so hold that the phrase "to pay
interest," found in the dispositive portion of the
Castro-Bartolome 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. We 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]."
There is, in the second place, no question that
private respondent dela Rosa had failed to pay the
balance of P163,408.00 on or before 31 December
1982. The applicable law is to be found in Article
2209 of the Civil Code which provides as follows:
If the obligation consists in the payment of a
sum of money, and the debtor incurs in
delay, the indemnity for damages, there
being no stipulation to the contrary, shall be
the payment of the interest agreed upon,
and in the absence of stipulation, the legal
interest which is six percent (6%) per
annum. (Emphasis supplied)
Under Article 2209, the appropriate measure for
damages in case of delay in discharging an obligation
consisting of the payment of a sum of money is the
payment of penalty interest at the rate agreed upon
in the contract of the parties. In the absence of a
stipulation of a particular rate of penalty interest,
payment of additional interest at a rate equal to the
regular or monetary interest, becomes due and
payable. Finally, if no regular interest had been
agreed upon by the contracting parties, then the
damages payable will consist of payment of legal
interest 10 which is six percent (6%) or, in the case of
loans or forbearances of money, twelve percent
(12%) per annum. 11 Applying Article 2209 to the
instant case, we must refer to the "Deed of
Conditional Sale" which, as already noted, had
specifically provided for "interest at the rate of 12%
per annum" and a "1% penalty charge a month [to]
be imposed on their remaining diminishing balance."
There was, it thus appears, no need for the
subsequent Luna, J. decision to refer at all to the
payment of legal interest from the time of entry of
the Castro-Bartolome decision.
The contention of private respondent that Article
2209 of the Civil Code is not applicable in this case
because the interest referred to therein is given as
compensation for the use of money, not for the
incurring of delay as in the instant case, 12 need not
detain us for long. Article 2209 governs transactions
involving the payment of indemnity in the concept of
damages arising from delay in the discharge of
obligations consisting of the payment of a sum of
money. 13 The "obligation consisting in the payment
of a sum of money" referred to in Article 2209 is not
confined to a loan or forbearance of money. The
Court has, for instance, consistently applied Article
2209 in the determination of the interest properly
payable where there was default in the payment of
the price or consideration under a contract of sale 14
as in the case at bar. Article 2209 has also been
applied by this Court in cases involving an action for
damages for injury to persons and loss of property; 15
to actions for damages arising from unpaid insurance
claims; 16 and an action involving the appropriate
rate of interest on just compensation that is payable
for expropriated lands. 17
The stipulation in the "Deed of Conditional Sale"
requiring the payment of interest is not unlawful. The
validity of the contract of conditional sale itself has

not been put to question by private respondent dela

Rosa and there is nothing in the record to suggest
that the same may be contrary to law, morals, good
custom, public order or public policy. Accordingly, the
contractual stipulation must be regarded as binding
and enforceable as the law between the parties. 18
We turn, therefore, to the examination of the
contractual stipulation on interest which we quoted
in full earlier. Under the terms of that stipulation,
private respondent was bound, and entitled, to pay
the balance of P163,408.00 on or before 31
December 1982 without incurring any liability for any
interest and penalty charges. During the grace
period of six (6) months, that is, from 1 January 1983
to 30 June 1983, private respondent vendee was
given the right to pay the said balance or any portion
that had remained unpaid provided that "interest at
the rate of 12% per annum shall be charged and 1%
penalty charge shall be imposed on the remaining
diminishing balance." We observe that residual
ambiguity infects this particular portion of the
stipulation on payment of interest. 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.
We believe that the contracting parties intended the
latter view of their stipulation on interest; for if the
parties had intended that during the grace period
from 1 January 1983 to 30 June 1983, interest
consisting of 12% per annum plus another 12% per
annum (equivalent to 1% per month), or a total of
24% per annum, was payable, then they could have
simply said so. Instead, the parties distinguished
between interest at the rate of 12% per annum and
the 1% a month penalty charge. The interpretation
we adopt 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. 19
Summarizing the import of the contractual stipulation
of the parties:
(1) During the period from 1 January 1983
up to 30 June 1983, private respondent
vendee dela Rosa was bound to pay interest
at the rate of 12% per annum on the unpaid
balance of P163,408.00.
(2) Commencing on 1 July 1983, and until
full payment, dela Rosa was bound to pay
interest at the rate of 12% per annum plus
another 12% per annum (or 1% penalty
charge a month), or a total of 24% per
annum to be computed on the "remaining
diminishing [unpaid] balance."
Private respondent finally contends that she had
already complied with her obligation considering that
after she had been served with a writ of execution
dated 2 September 1988, she deposited with the trial

court on 7 September 1988 the amount stated

therein, that is, the amount of P197,723.68. 20
Obviously, this contention raises a question of fact;
just as obvious, however, is the rule that questions of
fact cannot be raised in a petition for review on
certiorari before this Court. At all events, private
respondent's factual contention is properly addressed
not to this Court, but rather to the trial court during
execution proceedings. In the interest of complete
resolution of this drawn out litigation and of
achieving substantial justice, we would add that if
the trial court finds that, in point of fact, the amount
of P197,723.68 had indeed been deposited with the
trial court on 7 September 1988, then the total
amount due from private respondent should be
correspondingly reduced by the application of the
amount of the deposit in accordance with the rules
on application of payments. 21 Conversely, the
interest yield or civil fruits of the deposit,
commencing from date of application of the deposit
as partial payment, would pertain to petitioners who
have not thus far enjoyed the use of the monies
deposited.
The conclusion we have reached renders it
unnecessary to pass upon the other contentions
made by private respondent.
WHEREFORE, for all foregoing, the Petition for Review
is hereby GRANTED. The Decision of the Court of
Appeals dated 22 August 1990 in C.A.-G.R SP No.
22464 (the Luna, J. decision) is hereby REVERSED
and SET ASIDE and the dispositive portion of the
Decision by Castro-Bartolome, J., dated 21 November
1986, in C.A.-G.R No. 07938-SP is hereby CLARIFIED
as follows:
WHEREFORE, the writ of certiorari is hereby
GRANTED annulling the Decision of Judge
Malaya dated August 17, 1984 and a new
one entered:
(1) allowing the amendment of the
complaint to conform to the evidence
already presented and defaulted defendant
to answer the amendment within the
reglementary period;
(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.
No pronouncement as to costs.
SO ORDERED.