1Republic of the Philippines

2SUPREME COURT
3Manila

4THIRD DIVISION

6G.R. No. 103590 January 29, 1993

7GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner,

10Romana P. Valencia for petitioner.

11Franco B. Loyola for private respondents.

12

13DAVIDE, JR., J.:

14In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner would have Us annul and set
15aside, for being inconsistent with law and jurisprudence, the Resolution 1 of the Court of Appeals (Special Eleventh
16Division) of 15 January 1992 in CA-G.R. SP No. 24021 which reversed its previous Decision 2 of 28 June 1991. This
17decision set aside the 7 June 1990, 10 September 1990 and 5 December 1990 Orders of Branch 19 of the Regional
18Trial Court (RTC) of the Fourth Judicial Region, sitting at Bacoor, Cavite, in Civil Case No. BCV 78-33 entitled "Victor
19G. Valencia versus Queen's Row Subdivision, Inc. and the Government Service Insurance System."

20As disclosed by the pleadings, the salient facts surrounding the instant controversy are as follows:

21Several years back, the Queen's Row Subdivision, Inc. (QRSI) entered into a construction project agreement with
22the Government Service Insurance System (GSIS) by virtue of which the latter agreed to extend a financing loan to
23the former for the construction and development of a residential subdivision, comprising some four thousand four
24hundred ninety-three (4,493) housing units, situated at Molino, Bacoor, Cavite; these units were to be sold to GSIS
25members in accordance with the System's housing program.

26Pursuant to said project agreement, QRSI entered into a construction contract with private respondent Valencia
27involving various phases of land development in the said subdivision. Upon accomplishing and completing his
28undertaking under the contract, Valencia demanded payment from QRSI. Despite repeated demands, however,
29QRSI refused to pay. Valencia then filed the complaint in the aforementioned Civil Case No. BCV-78-33, an action
30for a sum of money with prayer for the issuance of a writ of preliminary attachment. During the trial of the case,
31Valencia, after manifesting that he was not seeking any relief against the personal funds of petitioner GSIS,
32proceeded to present his evidence. No evidence was offered by both the petitioner and QRSI.

33On 2 March 1982, the trial court rendered its decision, the dispositive portion of which reads:

34WHEREFORE, premises considered, the Court hereby renders judgment in favor of the plaintiff and against the
35defendants, as follows:

361. Ordering defendant Queen's Row to pay plaintiff the sum of FOUR HUNDRED FORTY EIGHT THOUSAND THREE
37HUNDRED SEVENTY FOUR and 01/100 Pesos (P448,374.01), for the first cause of action; the sum of TWO HUNDRED
38FOUR THOUSAND EIGHT HUNDRED TWENTY ONE and 32/100 Pesos (P204,821.32), for the second cause of action;
39the sum of ONE HUNDRED TWO THOUSAND EIGHT HUNDRED SIXTY SIX and 37/100 (P102,866.37) Pesos under the
40third cause of action and ordering the said defendant to return to plaintiff the amount of TEN THOUSAND PESOS
41(P10,000.00) posted as performance bond, the same amounts to be recovered by plaintiff shall bear legal rate of
42interest from the date of demands on February 10, 1974, September 13, 1976 and February 3, 1977, for the first,
43second and third causes of action, respectively;

Page 1
442. Sentencing defendant Queen's Row to pay attorney's fees in favor of the plaintiff in the sum equal to twenty
45(20%) percent of the said amounts ordered recovered and payable to said plaintiff;

463. Requiring the defendant GSIS to hold whatever amounts it has granted to, retained and obtained for defendant
47Queen's Row, and to deliver the same to plaintiff by way of payment to the aforecited amount ordered recovered
48by plaintiff, the same to be credited as payment made by defendant Queen's Row. It is distinctly made clear that
49defendant GSIS shall not be personally liable for the said obligation of co-defendant Queen's Row, except as herein
50above-ordered; however, pending payment of the said claim of plaintiff, defendants are ordered to respect and
51satisfy the contractor's lien in favor of the plaintiff as provided for by law.

524. Defendant Queen's Row is hereby ordered to pay the costs.

535. All other claims and counterclaims are hereby ordered dismissed.

54SO ORDERED.3

55On 25 March 1982, Valencia filed a motion for execution pending appeal. Actually, no motion for reconsideration or
56notice of appeal was filed by both QRSI and the petitioner. Although the motion was granted by the trial court, the
57writs issued as a consequence thereof was returned unsatisfied. Thereupon private respondent Valencia filed a
58Motion for Examination of Debtors of the Judgment Debtor. With the permission of the trial judge, a certain Mr.
59Valeriano M. Espiritu, a plaintiff in a separate collection suit against both the petitioner and QRSI, 4 was joined as
60movant with Valencia. Acting on said motion, the trial court ordered Mr. Armando Diaz, Assistant General Manager
61for Loans and Investments of the GSIS, to appear and testify in accordance with Sections 38 to 40, Rule 39 of the
62Rules of Court.

63On 10 November 1982, respondent Valencia filed a petition to cite petitioner in contempt of court for the latter's
64failure to comply with the writ of execution. On 15 November 1982, the trial court issued an order directing the
65petitioner to comply with the writ of execution and instructing Mr. Diaz to appear on 26 November 1982 under pain
66of contempt should he fail to do so. On 23 November 1982, petitioner filed an Urgent Motion for Reconsideration of
67the 15 November 1982 Order. Pending resolution of this motion, petitioner partially paid respondent Valencia on 26
68November 1982 the amount of ONE HUNDRED FIFTY FOUR THOUSAND FOUR HUNDRED SEVENTY SIX and 14/100
69PESOS (P154,476.14) out of the retained funds held for the account of QRSI.

70Thereafter, on 20 October 1983, another alias writ of execution was issued by the trial court.

71On 5 December 1983, respondent Sheriff served upon the petitioner a notice of garnishment upon all monies and
72credits belonging to QRSI which were under the control and possession of the petitioner. An answer to the Sheriff's
73notice was submitted by the latter stating that the GSIS is not a debtor of QRSI; that it has no credits, monies or
74interests belonging to QRSI in its possession or control; and that it is in fact the biggest creditor of QRSI whose
75outstanding account as of 9 December 1983 stood at FIFTY EIGHT MILLION TWO HUNDRED SIXTY ONE THOUSAND
76SEVEN HUNDRED SEVENTY THREE and 19/100 PESOS (P58,261,773.19).

77In its 5 July 1985 Order, the trial court ruled that the petitioner was holding funds for QRSI; it thus directed the
78petitioner to pay both Valencia and Valeriano Espiritu the amount adjudged and covered by the writs of execution
79after deducting the payments previously made. The dispositive portion of the Order reads:

80. . . WHEREFORE, premises considered, this Court holds that defendant GSIS holding funds for defendant QRSI has
81more than sufficient funds to pay the obligation of said Queen's Row Subdivision, Inc. with the plaintiffs.
82Consequently, the defendant GSIS is ordered to pay to plaintiffs the judgment rendered and covered by writs of
83execution after deducting the payments previously made . . . .5

84Petitioner's motion for reconsideration of the said order was denied by the trial court in its Order of 22 May 1986
85on the ground that, inter alia, the claim that QRSI is obligated to the GSIS was not established by evidence during
86the trial of the case. The Order reads in part:

87. . . Considering that the facts cited are not properly shown in the record, the court cannot see any plausible reason
88to reverse or otherwise sustain the motion of defendant GSIS.

Page 2
 89WHEREFORE, finding no merit in the motion for reconsideration filed by defendant GSIS, the same is hereby
90denied.6

91On 9 June 1986, the trial court again issued an alias writ of execution. Consequently, notices of garnishment were
92served by the Sheriff upon the petitioner and the Philippine National Bank (PNB).

93On 13 June 1986, petitioner filed a motion for the reconsideration of the 22 May 1986 Order and on 16 June 1986,
94it filed a Notice of Appeal Ad Cautelam from the Orders of 5 July 1985 and 22 May 1986. It thereafter filed its
95motion to quash the alias writ of execution.

96In its Order of 10 July 1986, the trial court denied the aforesaid motion for reconsideration.

97The petitioner thus filed on 18 September 1986 with the Court of Appeals a petition for certiorari and prohibition to
98set aside the aforesaid Orders of 5 July 1985, 22 May 1986 and 10 July 1986, as well as the alias writ of execution
99of 9 June 1986 and the Notice of Garnishment of 10 June 1986. The case was docketed as CA-G.R. SP No. 09956.

100In its Decision promulgated on 17 April 1986, the Court of Appeals dismissed the aforesaid petition principally on
101the ground that the trial court's Decision of 2 March 1982 "has long become final" as neither QRSI nor the herein
102petitioner had moved for its reconsideration or appealed therefrom
103within the reglementary period. It considered as "inexcusable" petitioner's contention — that it did not need to
104appeal the decision because according to the trial court, "defendant GSIS shall not be personally liable for the
105obligation of QRSI" — because the following portion of the trial court's decision:

1063. Requiring defendant GSIS to hold whatever amounts it has granted to, retained and obtained for defendant
107Queen's Row, and to deliver same to plaintiff by way of payment of the aforecited amount ordered recovered by
108plaintiff, the same to be credited as payment made by the defendant Queen's Row. It is distinctly made clear that
109defendant GSIS shall not be personally liable for the said obligation of co-defendant Queen's Row, except, as
110herein above-ordered; however, pending payment of the said claim of plaintiff, defendants are ordered to respect
111and satisfy the contractor's lien in favor of the plaintiff as provided for by law. 7

112constitutes:

113. . . a final or definitive judgment on the merits from which the party adversely affected can make an appeal. Said
114decision imposes an obligation on GSIS which GSIS has acquiesced to do by its failure to appeal therefrom. 8

115and that:

116Consequently, when GSIS conformed to the decision and allowed it to attain finality, it in effect admitted that
117indeed it has in its possession or control credits, monies, and interests belonging to QRSI and therefore it obliged
118itself to pay the latter's obligation to Valencia as in fact, it did make a partial payment thereto in the amount of
119P154,476.14 (Annexes "A" and "B", p. 141, Ibid) on November 26, 1982.

120And as pointed out by the private respondent in its Comment to the petition, the challenged decision has not only
121become final and executory but has in fact been partially executed by virtue of the payment on November 26,
1221982 by GSIS pursuant to a writ of execution issued against it out of its retentions. The fact of payment meanwhile
123also constitutes as (sic) a waiver of the legal compensation being invoked by petitioner
124GSIS.9

125Unsatisfied with the said decision, petitioner came to this Court by way of a petition for review under Rule 45 of
126the Rules of Court; the case was docketed as G.R. No. 87980. In the Resolution of 27 November 1989, this Court
127denied the petition because o the petitioner's failure to show that the appellate court's decision is not supported
128by substantial evidence and that the conclusions therein are contrary to law and jurisprudence. This Court stated:

129A careful review of the petition shows that it has no merit. The decision of the respondent Regional Trial Court had
130long become final before the appeal to the Court of Appeals was made.

131The Argument that Queen's Row owes GSIS certain sums of money was rejected by the two courts below because
132it was never raised during the trial and no evidence was presented on the matter. The respondent court correctly
133applied PD 1594 on government infrastructure contracts regarding progress payments and the withholding of

Page 3
134retention money everytime a certain percentage of the work is completed. The housing units were constructed by
135the respondent and they have been sold by the GSIS to its members.

136The argument of the petitioner that a separate action should be filed by the private respondent against GSIS was
137correctly rejected because the GSIS was a party to the case from the very start. As pointed out by the respondent,
138the legal compensation invoked by the GSIS whereby there would be compensation as between GSIS and Queen's
139Row was waived by the fact that GSIS made partial payments to Valencia. 10

140The motion to reconsider this Resolution was denied with finality in the Resolution of 15 January 1990.

141Thereafter, respondent Valencia moved for the issuance of an alias writ of execution for the amount of FIVE
142MILLION SEVEN HUNDRED FIFTY NINE THOUSAND SIX HUNDRED SEVENTY SEVEN and 97/100 PESOS
143(P5,759,677.97). An opposition thereto was filed by the petitioner contesting only the amount due and payable,
144particularly the interests imposed therein. On 7 June 1990, the trial court issued an order the dispositive portion of
145which reads:

146WHEREFORE, premises considered, this court hereby orders GSIS to deposit in court or pay plaintiff the amounts of
147the principal at twelve (12%) per cent simple interest per annum and attorney's fees less payment already made
148within five (5) days from receipt hereof, otherwise, the Clerk of Court is directed to issue the corresponding alias
149writ of execution for the said amounts. GSIS is ordered, therefore, to pay the following amounts:

150a) P448,374.01 with simple interest from February 10, 1974 or 195.166 months up to May 15, 1990. At one percent
151(15) (sic) a month, the interest would be:

152P448,374.01 x .01 x 195.166 months = P 875,073.

153b) P204,821.32 with simple interest from September 13, 1976 or 164.066 months up to May 15 1990. At one
154percent (1%) a month, the interest would be:

155P204,821.32 x .01 x 164.066 mos. = P336,041.62 (sic).

156c) P102,866.33 with simple interest from Feb. 3, 1977 or 159.4 months up to May 15, 1990. At one percent (1%) a
157month, the interest would be:

158P102,866.33 x .01 x 159.4 mos. = P163,968.40 (sic).

159S U M M A R Y

160Principal Interest Total

161P448,374.01 P875,073.60
162P204,821.32 P336,041.62 (sic)
163P102,866.37 P163,968.40 (sic)
164————— —————
165P756,061.70 P1,375,083.62 =
166P2,131,145.32
167Attorney's fees (20%) 426,229.06
168Performance Bond 10,000.00
169—————
170TOTAL P2,567,374.06

171This Order shall be without prejudice to whatever resolution that may be rendered by this Court on the issue of
172proper rate of interest.

173SO ORDERED. 11

174The rate of interest was later fixed in the Supplemental Order of 10 September 1990 which directed the petitioner
175to pay the total amount of P11,363,304.27 — arrived at by compounding interests ranging from twelve percent
176(12%) to twenty-one percent (21%) per annum allegedly in accordance with Central Bank Circulars Nos. 416, 494,
177586 and 705 which fixed the maximum legal rate of interest at twelve percent (12%), seventeen percent (17%),

Page 4
178nineteen percent (19%) and twenty-one percent (21%) per annum, respectively — less the sum of
179P2,567,374.06. 12

180Its motion for reconsideration of the said supplemental order having been denied by the trial court in the Order of
1815 December 1990, petitioner commenced before the respondent Court of Appeals a petition or certiorari and
182prohibition to seek the nullification of the Orders of 7 June 1990, 10 September 1990 and 5 December 1990. The
183petition was docketed as CA-G.R. SP No. 24021. On 28 June 1991, respondent Court promulgated its
184decision 13therein in favor of the petitioner:

185The Court, therefore, finds grave abuse of discretion n the trial court's orders requiring the petitioner to the
186payment (sic) of millions of pesos, in favor of the private respondent, Victor G. Valencia, without regard to the
187amount or amounts that it actually holds, if any, in favor of Queen's Row Subdivision, Inc. To do otherwise would
188violate the very judgment sought to be executed.

189WHEREFORE, the orders of June 7, 1990, September 10, 1990 and December 5, 1990 are hereby SET ASIDE. The
190case is remanded for proceedings appropriate to determining how much funds the petitioner holds in favor of
191Queen's Row Subdivision, Inc., under paragraph 3 of the decision of March 3, [should be 2] 1982, beyond which
192amount, the petitioner cannot be held liable. 14

193The above decision is anchored on the following disquisitions:

194The merit in this petition flows from the language of the now
195long-final decision of March 3, [should be 2] 1982. The orders above-cited and complained of have evidently
196disregarded, ignored, and held inexistent, he clear language of the decision sought to be executed. The said
197judgment contains the following significant restricting and limiting clauses, namely:

198(1) That the judgment for money resulting from the violated contract between respondent Victor G. Valencia and
199Queen's Row Subdivision, Inc. ordered the latter to pay the former specific amounts stated in the judgment with
200"legal rate of interest from the date of demands on February 10, 1974, September 13, 1976 and February 3, 1977 .
201. . ."

202(2) The Government Service Insurance System is requiring to "hold whatever amounts it has granted to, retained
203and obtained for defendant Queen's Row Subdivision, Inc. and deliver same to plaintiff by way of payment to the
204aforecited amount ordered recovered by the plaintiff, the same to be credited as payment made by defendant
205Queen's Row. It is distinctly made clear that defendant GSIS shall not be personally liable for the said obligation of
206co-defendant Queen's Row, except as herein above ordered; . . . . . . .

207It does not appear anywhere that the petitioner is in any manner contractually related to the private respondent,
208Victor G. Valencia. The petitioner, under the decision, is ordered to pay, not because it is principally and directly
209liable to the private respondent under the contracts between Queen's Row Subdivision, Inc. and respondent Victor
210G. Valencia, but because it had granted, retained and obtained funds for Queen's Row Subdivision, Inc. It is ordered
211to pay such funds and to deliver the same to respondent Victor G. Valencia which shall be credited as payment for
212the amounts recovered by the said private respondent. Strictly speaking, the petitioner has no standing
213questioning (sic) the rate of interest to be applied on the principals because only Queen's Row Subdivision may,
214since it is the latter's obligation that is being liquidated and paid for in this manner. The petitioner is not a debtor
215of Queen's Row Subdivision, Inc. and the decision sought to be executed does not say so. It is simply being ordered
216to pay the funds it holds for Queen's Row Subdivision, Inc. in order that the latter's indebtedness in favor of Victor
217G. Valencia may be paid fully, or partially.

218But while the petitioner is ordered to pay whatever amount Queen's Row is adjudged to pay, the judgment protects
219the petitioner by saying that it shall not be personally liable for the payment of the obligation of Queen's Row
220Subdivision, Inc., beyond whatever funds it holds for Queen's Row Subdivision, Inc. The judgment specifically limits
221the petitioner's liability to the extent of the amounts 'it has granted to be retained and obtained for defendant
222Queen's Row . . . . . . Therefore, there should be a preliminary inquiry into how much the petitioner holds for
223Queen's Row Subdivision, Inc.

224The orders brought up for review simply order the petitioner to pay the principal amounts plus the computed
225interest without regard to the amount that the petitioner holds, retains or is granted in favor of Queen's Row
226Subdivision, Inc. Beyond this amount, the trial court would be ordering the payment of the petitioner's "personal"

Page 5
227money, money that belongs to its thousands of members, thousands of small-salaried government employees.
228Their interests need protection also. The petitioner can, theretofore, be ordered to pay the obligations of Queen's
229Row Subdivision, Inc. to the limit of what it holds, retains or has granted, in favor of Queen's Row Subdivision.
230Beyond this, it cannot be made to pay because that would be violative of the very judgment sought to be
231executed. There is ni basis, therefore, for orders that would compel it to pay without regard to the amounts that it
232holds in favor of Queen's Row Subdivision, Inc., under paragraph 3 of the decision of March 3, [should be 2] 1982.
233There must be a previous inquiry into how much these funds amount to. This has not been made. 15

234On 12 July 1991, respondent Valencia sought the reconsideration of the above-quoted decision claiming that the
235petition filed before the appellate court (CA-G.R. SP No. 24021) is barred by a prior judgment and estoppel. The
236prior judgment alluded to is the decision of the Court of Appeals in CA-G.R. SP No. 09956 and the resolution of this
237Court in G.R. No. 87980, while the estoppel is based on the partial payment made by the petitioner.

238On 15 January 1992, the respondent Court promulgated the questioned resolution 16
reconsidering its 28 June 1991
239Decision and dismissing the Petition for Certiorari and Prohibition, thus:

240WHEREFORE, the motion for reconsideration is hereby granted, the decision reconsidered, and the petition
241for certiorari and prohibition dismissed for lack of merit.

242SO ORDERED. 17

243The Court of Appeals agreed with the private respondent's claim of res judicata or bar by prior judgment. It further
244observed that after making a partial payment in compliance with the trial court's Order of 7 June 1990 which set
245the interest at twelve percent (12%) per annum, petitioner can no longer assert that the interest should be at six
246percent (6%) per annum.

247Dissatisfied with the respondent Court's findings, petitioner took this present recourse and assigns the following
248errors:

2491. THE RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT THE PRESENT PETITION IS BARRED BY PRIOR
250JUDGMENT AND ESTOPPEL.

2512. THE RESPONDENT COURT OF APPEALS ERRED IN REVERSING ITS OWN DECISION PROMULGATED ON JUNE 28,
2521991.

2533. THE RESPONDENT COURT OF APPEALS ERRED WHEN IT FAILED TO RULE THAT PETITIONER CAN ONLY BE HELD
254TO PAY THE OBLIGATIONS OF QUEEN'S ROW SUBDIVISION, INC. TO RESPONDENT VALENCIA OUT OF RETENTIONS
255AND ONLY AT A SIX PERCENT (6%) SIMPLE INTEREST RATE PER ANNUM.

2564. THE RESPONDENT COURT OF APPEALS MANIFESTLY OVERLOOKED CERTAIN RELEVANT FACTS NOT DISPUTED BY
257THE PARTIES AND, WHICH IF PROPERLY CONSIDERED, WOULD JUSTIFY A DIFFERENT CONCLUSION. 18

258Petitioner claims that res judicata does not apply in this case as the reliefs sought in CA-G.R. SP No. 24021 are
259distinct from those prayed for in G.R. No. 87980. It avers that while the former questions the rate of interest
260imposed, the latter involves the issue of whether the petitioner is a creditor or a debtor of QRSI and the question of
261the sufficiency of the retained money in its possession. In CA-G.R. SP No. 24021, petitioner assailed the trial court's
262Orders of 7 June 1990, 10 September 1990 and 5 December 1990 because they vary the terms of the very
263decision sought to be enforced, particularly with respect to the rate of interest to be applied.

264Petitioner argues further that the partial payment of the sum of P2,567,374.06 in favor of respondent Valencia
265does not ipso facto estop it from asserting that it can only be held liable for the aggregate amount of
266P3,373,391.77, the total amount retained by it in favor of QRSI.

267On 25 May 1992, after the private respondent had filed his Comment 19 and the petitioner had submitted its
268Reply, 20We resolved to give due course to the instant petition and required the parties to submit their respective
269Memoranda21 which they subsequently complied with.

270The main issue in this petition is whether or not respondent Court of Appeals committed reversible error when it
271made a sudden volte-face by reversing its own Decision of 28 June 1991 on the grounds of res judicata and
272estoppel. This in turn brings Us to the issue of whether or not the trial court acted without or in excess of
Page 6
273jurisdiction, or with grave abuse of discretion when it ordered the petitioner to pay interests at various rates
274ranging from twelve percent (12%) to twenty-one percent (21%), pursuant to various circulars of the Central Bank,
275and attorney's fees.

276We find merit in this petition. We rule for the petitioner.

277Respondent Court erred in declaring, in the challenged resolution, that the judgments in CA-G.R. SP No. 09956 and
278G.R. No. 87980 bar, because of res judicata, CA-G.R. SP No. 24021, as these three (3) cases involve the same
279parties. In its own language, it avers:

280The petitioner's comment on the motion for reconsideration does not deny the grounds stated in the motion for
281reconsideration. It is, therefore, clear that the Court cannot tread over grounds that had already been covered in a
282previous litigation between the same parties, especially where the Highest Court of the land has made a final,
283binding and lasting ruling. . . . 22

284After taking pains to read the records of G.R. No. 87980 and the decision of the Court of Appeals in CA-G.R. SP No.
28509956 challenged therein, We agree with the petitioner that these rulings do not bar CA-G.R. SP No. 24021
286because said prior judgments did not involve and did not rule on the rates of interest chargeable against the
287petitioner for the purpose of executing judgment. All that was ruled upon therein was that the trial court's
288judgment of 2 March 1982 is already final and executory since no motion for reconsideration or appeal was
289interposed within the reglementary period, that petitioner is holding more than enough funds for QRSI to pay for
290the latter's obligation to Valencia and Espiritu and that the petitioner's defense of legal compensation was deemed
291waived by the partial payment made on 26 November 1982. These matters are not sought to be relitigated in CA-
292G.R. SP No. 24021. As We see it, the latter merely seeks for a correct and proper executor of the Decision of 2
293March 1982. Petitioner no longer questions the finality of the decision for as a matter of fact, it had already
294partially satisfied the portion thereof directed against it. The application then of the doctrine of res judicata is not
295called for. It is entirely irrelevant. Besides, the identity of parties which the respondent Court relied upon to justify
296the application of the doctrine is only one of three (3) identities prescribed by the fourth requisite of res judicata.
297These four (4) requisites are (1) the presence of a final former judgment, (2) the former judgment is by a court
298having jurisdiction over the subject matter and the parties, (3) the former judgment is a judgment on the merits
299and (4) there is, between the first and the second actions identity of parties, of subject matter and of causes of
300action. 23 Since a cause of action gives rise to issues, it logically follows that there must be identical issues. As
301heretofore stated, the issue raised in CA-G.R. SP No. 24021 is not identical with any of the issues posed and
302resolved in CA-G.R. SP No. 09956 and G.R. No. 87980.

303The general rule is that an order of execution of a final judgment is not appealable. It is, however, recognized that
304this rule is subject to two (2) exceptions, viz., (1) when the order of execution varies or tends to vary the tenor of
305the judgment, and (2) when the terms of the judgment are not clear enough that there remains room for their
306interpretation by the trial court. In such instances, the aggrieved party may appeal from the order of execution
307thus issued24 or avail of any other proceeding appropriate and allowed under the Rules of Court — such as the
308special civil action of certiorari under Rule 65 of the Rules of Court. 25 In the instant case, petitioner is of the honest
309opinion that the Orders of the trial court dated 7 June 1990 and 10 September 1990 upon which shall be based the
310subsequent alias writ of execution, fixing the rates of interest on the judgment amounts from twelve percent (12%)
311to twenty-one percent (21%) on the basis of various circulars of the Central Bank, vary the tenor of the judgment.
312Hence, it could seek remedy therefrom either by ordinary appeal, or by certiorari under Rule 65 of the Rules of
313Court; it chose the latter, the propriety of which is not challenged by the adverse party. The circumstances
314surrounding the issuance of the orders justify such choice. We agree with the petitioner that indeed, the said
315orders vary the tenor of the dispositive portion of the 2 March 1982 Decision with respect to the petitioner's
316specific liability thereunder, the rate of interest and, it may be added, attorney's fees. As against the petitioner,
317the dispositive portion merely provides:

3183. Requiring defendant GSIS to hold whatever amounts it has granted to, retained and obtained for defendant
319Queen's Row, and to deliver same to plaintiff by way of payment to the aforecited amount ordered recovered by
320plaintiff, the same to be credited as payment made by defendant Queen's Row. It is distinctly made clear that
321defendant GSIS shall not be personally liable for the said obligation of co-defendant Queen's Row, except, as
322herein above-ordered; however, pending payment of the said claim of plaintiff, defendants are ordered to respect
323and satisfy the contractor's lien in favor of the plaintiff as provided for by law. 26

Page 7
324It is clear from this disposition that the petitioner's liability is limited to the holding of whatever amount it "has
325granted to, retained and obtained for defendant Queen's Row" and the "delivery" thereof to Valencia "by way of
326payment to the aforecited amount ordered recovered by" Valencia. Beyond such amount, 27 petitioner is no longer
327liable. It is precisely for this reason that the trial court explicitly incorporated a proviso that petitioner "shall not be
328personally liable for the said obligation of co-defendant Queen's Row, except, as herein above-ordered." Petitioner
329was not ordered to pay interest on the amount it was to hold and deliver to Valencia or to pay attorney's fees. The
330trial court cannot, therefore, without committing grave abuse of discretion, direct the petitioner to pay interest and
331attorney's fees. To do so would be to vary the tenor of the judgment against the latter and increase its liability,
332thereby rendering nugatory the above proviso. Such imposition would mean, as in this case, the delivery of money
333to Valencia in excess of that belonging to QRSI which the petitioner has been retaining. It is a settled general
334principle that a writ of execution must conform substantially to every essential particular of the judgment
335promulgated. Execution not in harmony with the judgment is bereft of validity. It must conform, more particularly,
336to that ordained or decreed in the dispositive portion of the decision. 28

337And even if We are to assume, for the sake of argument, that the amount held or retained by the petitioner for
338delivery to Valencia is more than enough to cover the sums adjudged against QRSI, the imposition of interest
339ranging from twelve percent (12%) to twenty-one percent (21%) per annum on said sum pursuant to the quoted
340Central Bank circulars, is not justified and warranted.

341While it is true that with respect to the amounts adjudged against QRSI, enumerated in the first paragraph of the
342dispositive portion of the Decision of 2 March 1982, the trial court imposed thereon the "legal rate of interest from
343the date of demands on February 10, 1974, September 13, 1976 and February 3, 1977, for the first, second and
344third causes of action, respectively," We agree with the petitioner that such legal rate refers to the legal rate
345provided for in Article 2209 of the Civil Code, which is six percent (6%) per annum.

346Central Bank Circular No. 416, which prescribes interest at twelve percent (12%) per annum, does not apply in this
347case. We have held in a number of cases 29 that the said circular applies only to interest for loans or forbearances
348of any money, goods or credits or judgments in cases involving loans or forbearances of any money, goods or
349credits. Any other monetary judgment which does not involve or which has nothing to do with loans or
350forbearances of any money, goods or credit does not fall within its coverage for such imposition is not within the
351ambit of the authority granted to the Central Bank. The instant case does not involve loans or forbearances of
352money, goods or credits.

353Neither are Central Bank Circulars Nos. 494, 586, 705 and 783 applicable. The first prescribed ceilings on the rates
354of interest on loans and yields on purchases of instruments by banks and non-bank financial intermediaries. The
355second superseded the first while the third amended the latter by increasing the ceiling to a maximum of twenty-
356one percent (21%) per annum; the fourth fixed the effective rate of interest, including commissions, premiums,
357fees and other charges on loans or forbearances of money, goods or credit with a maturity of 730 days or less not
358exceeding sixteen percent (16%) per annum, for secured loans, and not exceeding eighteen percent (18%) per
359annum for unsecured loans. Beyond 730 days, the interest rate is not subject to any ceiling.

360Accordingly, the respondent Court's Decision of 28 June 1991, the dispositive portion of which provides that:

361WHEREFORE, the orders of June 7, 1990, September 10, 1990 and December 5, 1990 are hereby SET ASIDE. The
362case is remanded for proceedings appropriate to determining how much funds the petitioner holds in favor of
363Queen's Row Subdivision, Inc., under paragraph 3 of the decision of March 3, [should be 2] 1982, beyond which
364amount, the petitioner cannot be held liable.

365is in accord with the law and jurisprudence. Thus, the respondent Court erred in reversing itself via its challenged
366Resolution of 15 January 1992.

367The private respondent's claim that the petitioner is estopped from questioning the twelve percent (12%) interest
368because it had made some payments is untenable. The petitioner is an instrumentality of the Government which
369functions as an administrative body. Its officials are public officials. The general rule is that the Government is not
370estopped by errors, mistakes or omissions of its officials or agents. 30 This is especially true in the case of the
371petitioner because of the fiduciary character of its management which is "rendered more strict by the fact that the
372funds under its administration are partly contributed by the thousands upon thousands of employees and workers
373in all the branches and instrumentalities of the government." 31

Page 8
374WHEREFORE, the instant petition is GRANTED. The Resolution of respondent Court of 15 January 1992 in CA-G.R.
375SP No. 24021 is SET ASIDE and its Decision therein of 28 June 1991 is hereby REINSTATED and AFFIRMED.

376This decision shall be immediately executory.

377Costs against the private respondent.

378SO ORDERED.

379Gutierrez, Jr., Bidin, Romero and Melo, JJ., concur.

380

381# Footnotes

3821 Rollo, 28-36.

3832 Id., 38-51.

3843 Rollo, 38-40.

3854 Civil Case No. BCV-79-38.

3865 Rollo, 95.

3876 Id., 96.

3887 Rollo, 28-29.

3898 Rollo, 29.

3909 Id.

39110 Rollo, 57.

39211 Rollo, 47-48.

39312 Id., 9; 48.

39413 Id., 38-51: per Associate Justice Nathanael P. De Pano, Jr., concurred in by Associate Justices Luis L. Victor (in
395lieu of Associate Justice Bonifacio A. Cacdac, Jr.) and Fortunato A. Vailoces.

39614 Rollo, 51.

39715 Rollo, 49-51.

39816 Id., 28-36.

39917 Rollo, 36.

40018 Id., 11.

40119 Rollo, 56-65.

40220 Id., 68-77.

40321 Id., 80.

40422 Rollo, 35.

Page 9
40523 Santos vs. Gabriel, 45 SCRA 288 [1972]; Viray vs. Mariñas, 49 SCRA 44 [1973]; Benin vs. Tuason, 57 SCRA 531
406[1974]; Philippine Commercial and Industrial Bank vs. Pfleider, 65 SCRA 13 [1975]; Gutierrez vs. Court of Appeals,
407193 SCRA 437 [1991]; Nabus vs. Court of Appeals; 193 SCRA 732 [1991].

40824 Castro vs. Surtida, 87 Phil. 166 [1950]; Socco vs. Vda. de Leary, 12 SCRA 326 [1964]; Corpus vs. Alikpala, 22
409SCRA 104 [1968]; Uytiepo vs. Aggabao, 35 SCRA 186 [1970]; Heirs of Juan Francisco vs. Muñoz-Palma, 37 SCRA
410753 [1971].

41125 Romero vs. Court of Appeals, 40 SCRA 172 [1971].

41226 Rollo, 39-40.

41327 Petitioner claims that it is only to the extent of P3,373,391.77; Id., 19.

41428 Paylago vs. Nicolas, 189 SCRA 727, 733 [1990], citing Philippine Virginia Tobacco Administration vs. Gonzales,
41592 SCRA 172 [1979]: Gabaya vs. Mendoza, 113 SCRA 400 [1982]; Pamantasan Ng Lungsod Ng Maynila vs.
416Intermediate Appellate Court, 143 SCRA 311 [1986]; Laingco vs. Camilo, 130 SCRA 144 [1984].

41729 Reformina vs. Tomol, 139 SCRA 260 [1985]; Philippine Rabbit Bus Lines, Inc. vs. Cruz, 143 SCRA 158 [1986];
418Meridian Assurance Corp. vs. Dayrit, 184 SCRA 20 [1990]; Philippine Virginia Tobacco Administration vs. Tensuan,
419188 SCRA 628 [1990]; FNCB Finance vs. Estavillo, 192 SCRA 514 [1990].

42030 Beronilla vs. Government Service Insurance System, 36 SCRA 44, 55 [1970], citing Republic vs. PLDT, 26 SCRA
421620 [1969]; Pineda vs. CFI of Tayabas, 52 Phil. 803 [1929]; Benguet Consolidated Mining Co. vs. Pineda, 98 Phil.
422711 [1956]; Republic vs. Philippine Rabbit Bus Lines, Inc., 32 SCRA 211 [1970].

42331 Beronilla vs. Government Service Insurance System, supra., at page 53.

424

Page 10