Uncorrectable error

A judgment may be erroneous but once it has attained finality, it can no longer be corrected. This is once more illustrated in this case of Nito.

Nito was the corporate secretary of a resource and development corporation (REDECO). As corporate secretary he was sued together with the company by Ed for the issuance of REDECO’s certificate of stocks at the new par value in lieu of the four REDECO street certificates he holds. While Nito and REDECO claimed that Ed did not present proof that the certificates had been endorsed or assigned to him and that those certificates were not reflected in the corporate books, the RTC still held that the certificates were genuine because REDECO admitted issuing the same to Ed’s stockbrokers. So on September 6, 2001, the RTC rendered a decision in favor of Ed ordering REDECO and Nito jointly and severally to pay him P695,873 plus legal interest from June 6, 1997 until fully paid which was the new market value of the shares, plus 25% attorneys fees. Nito was made jointly and severally liable with the company because the RTC found him grossly negligent for failing to act on Ed’s letter request.

The RTC decision became final and executory because REDECO and Nito failed to perfect their appeal on time. Thus on January 9, 2002, the RTC issued a writ of execution ordering Nito to deliver his stock certificate in a golf club (VGCC) so that it may be sold at public auction to satisfy the judgment. Nito refused so he was cited in contempt of court.

Nito assailed said order of contempt before the Court of Appeals. He argued that since he is a corporate officer he should not be held personally liable for the corporate obligation. So there was no legal basis for ordering him to surrender his stock certificate in the golf club. The RTC therefore committed grave abuse of discretion in citing him for contempt, Nito said. Was Nito correct?

No. It can be gleaned from the RTC decision that there was a finding of gross negligence on the part of Nito due to his failure to act on the letter request of Ed. Such finding may be erroneous but it is not void. And if it becomes final and executory, it becomes as binding and effective as any valid judgment; though erroneous it will henceforth be treated as valid and will be enforced in accordance with its terms and dispositions.

The appeal from the decision of the RTC holding Nito solidarily liable with REDECO for the judgment obligation because of his gross negligence was never perfected and neither REDECO nor Nito assailed the order dismissing the notice of appeal. Thus said decision became final and executory. Once a decision attains finality it becomes immutable and unalterable despite containing erroneous conclusions (Obieta vs. Cheok, G.R. 170072, September 3, 2009).

Note: Books containing compilation of my articles on Labor Law and Criminal Law (Vols. I and II) are now available. Call tel. 7249445.

*      *      *

E-mail at: [email protected]