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ERNESTO DY v.

BIBAT-PALAMOS o Respondent responded that recovering the vessel


[GR. No. 196200; September 11, 2013] would be impossible and if petitioner still insist on
doing so, petitioner should bear the costs.
Facts:  RTC claimed that it had no right to change the decision in a
 Petitioner Ernesto Dy (petitioner) and his wife, Lourdes Dy motion for execution since the judgement had already become
(Lourdes), final. It claimed that the SC has not decided that petitioner had
 obtained a loan respondent to fund its acquisition of M/V Pilar-I, the right to insist on its claim to have the original vessel be
a cargo vessel. A chattel mortgage was thereafter executed over returned or new one with a same specification be given. Also, the
M/V Pilar-I deterioration and eventual sinking of the vessel did not happen
 Due to financial losses suffered when M/V Pilar-I was attacked by overnight, respondents should have raised the issue while it is
pirates, Spouses Dy failed to make the scheduled payments as being tried by the SC.
required in their promissory note. o The petitioner filed an MR but was denied so they
 Respondent filed a Complaint and Petition for Extrajudicial directly went to the SC.
Foreclosure of Preferred Ship Mortgage under Presidential Decree
No. 1521 with Urgent Prayer for Attachment which was granted Issue/s:
by the RTC. 1) Whether petitioner was justified in resorting directly to
 In 1997, the RTC then rendered a decision in favor of Spouses this Court via a petition for certiorari under Rule 65—YES
Dy, ruling that they had not yet defaulted on their loan because 2) Whether petitioner is entitled to the return of M/V Pilar-I
respondent agreed to a restructured schedule of payment. There in the same condition when it was seized by respondent.
being no default, the foreclosure of the chattel mortgage on M/V —YES
Pilar-I was premature and the vessel should be returned to
Spouses Dy. The decision was affirmed by CA and SC. Held.
 On August 17, 2010 (or 20 years after), petitioner filed a motion
for execution of judgment with the RTC. 1) YES. The case falls under one of the exceptions for the
 In the intervening period, Colorado informed the RTC that M/V court to take cognizance of it under its original jurisdiction
Pilar-I sank. under Rule 65. The 20 years it took for the court to adjudge
o Respondent claims that since the vessel sank, it ask the case warrants the relaxation of the rules.
the court to have the parts cut into pieces and sold. o Under the principle of hierarchy of courts, direct recourse to
The proceeds of which are to be given to petitioner. this Court is improper because the Supreme Court is a court
o Petitioner insisted that he had the right to require of last resort . It must remain to be so in order for it to devote
that the vessel be returned to him in the same its time and attention to matters within its exclusive
condition that it had been at the time it was jurisdiction and prevent the overcrowding of its docket.
wrongfully seized by respondent or, should it no o Nonetheless, the invocation of this Court’s original jurisdiction
longer be possible, that another vessel of the same to issue writs of certiorari has been allowed in certain instances
tonnage, length and beam similar to that of M/V Pilar- on the ground of special and important reasons such as
I be delivered.  (1) when dictated by the public welfare and the
advancement of public policy;
 (2) when demanded by the broader interest of justice;
 (3) when the challenged orders were patent nullities; o The GR is that there should be a strict application of rules.
or However, this case is an exception since strict application of
 (4) when analogous exceptional and compelling procedural technicalities would hinder the expeditious disposition
circumstances called for and justified the immediate of this case on the merits.
and direct handling of the case.
o This case falls under one of the exceptions to the principle of 2) YES. The case falls under the supervening event exception
hierarchy of courts. Justice demands that this Court take rule which calls on for the court to change its decision
cognizance of this case to put an end to the controversy and contrary to the rule on the doctrine of immutability of
resolve the matter which has been dragging on for more than judgments. Respondent only informed the court of the
twenty (20) years. sinking of the vessel after it has rendered its decision.
o Additionally, petitioner asserts that there is GADALEJ o Respondent insist that the RTC correctly followed the rule on
warranting a Rule 65 petition. It claims that its failure to rule immutability of judgement at the motion for execution.
in its favor and relax the rules considering that the case has Petitioner cannot ask for the modification of the judgement
been languishing for 18 years is GADALEJ. when it not asked for the return of the vessel when the case
 Respondent claim that there is no GADALEJ since it was being tried on its evidence and merit.
merely observed due process and followed the o This Court is not unaware of the doctrine of immutability of
principle that an execution order may not vary or go judgments. Its purpose is to avoid delay in the orderly
beyond the terms of the judgment it seeks to enforce. administration of justice and to put an end to judicial
 Respondent claims that an ordinary appeal should be controversies.
done and not a certiorari under Rule 65.  When a judgment becomes final and executory, it is
o Difference of ordinary appeal to certiorari under Rule 65 made immutable and unalterable, meaning it can no
Ordinary Appeal Certiorari under Rule 65 longer be modified in any respect either by the court
Remedy for errors of judgment, To correct errors of jurisdiction, which rendered it or even by this Court.
whether based on the law or the defined to be those "in which  Even at the risk of occasional errors, public policy and
facts of the case or on the the act complained of was sound practice dictate that judgments must become
wisdom or legal soundness of a issued by the court, officer, or final at some point
decision quasi-judicial body without or in o As with every rule, however, this admits of certain exceptions.
excess of jurisdiction, or with When a supervening event renders the execution of a
grave abuse of discretion which judgment impossible or unjust, the interested party can
is tantamount to lack of in petition the court to modify the judgment to harmonize it with
excess of jurisdiction. justice and the facts.
 A supervening event is a fact which transpires or a new
o A court or tribunal can only be considered to have acted with circumstance which develops after a judgment has
grave abuse of discretion if its exercise of judgment was so become final and executory. This includes matters
whimsical and capricious as to be equivalent to a lack of which the parties were unaware of prior to or during
jurisdiction. trial because they were not yet in existence at that
time.
o In this case, the sinking of M/V Pilar-I can be considered a
supervening event. Petitioner, who did not have possession of
the ship, was only informed of its destruction when Colorado
filed its Manifestation, dated July 29, 2010, long after the
September 11, 2009 Decision of this Court on the
validity of foreclosure of the vessel.
 During the course of the proceedings in the RTC, the
CA and this Court, petitioner could not have known of
the worsened condition of the vessel because it was in
the possession of Colorado.
o The modification of the Court’s decision is warranted by the
superseding circumstances, that is, the severe damage to the
vessel subject of the case and the belated delivery of this
information to the courts by the party in possession of the
same.

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