Dear Atty. Gab,

Musta Atty! I hope you can shed some light on a very stressful situation I’m in. A few years ago, I was involved in a business dispute regarding a commercial space rental in Cebu City. The Regional Trial Court ordered me to pay my landlord, Mr. Roberto Valdez, around P2,000,000 for alleged unpaid dues and damages. My lawyer, Atty. Andres Santiago, filed an appeal with the Court of Appeals (CA).

While the appeal was pending, Mr. Valdez filed for execution pending appeal, and the RTC granted it. To avoid further complications and the hassle of having my small bakery’s assets levied, I managed to pay the full P2,000,000 in September 2022. I thought that would be the end of it, although my lawyer assured me the appeal would continue.

Tragically, Atty. Santiago passed away unexpectedly in early 2023. I wasn’t immediately aware of how this affected my case communications. It was only recently, when I tried contacting Mr. Valdez about a separate matter, that he dismissively mentioned the CA had actually decided my appeal back in late 2023. Apparently, the CA reduced the judgment amount significantly – I should only have owed about P1,200,000! He claims since I never received the notice (because my lawyer passed away) and already paid the full amount as ‘settlement’, the CA decision doesn’t matter and he won’t refund the P800,000 difference.

I feel lost and unsure. Did the CA decision become final even if I wasn’t properly notified due to my lawyer’s death? Does my payment really mean I agreed to settle and forfeited my right to a refund? Is there any way to recover the excess amount I paid?

Thank you for any guidance you can offer.

Sincerely,

Patricia Quezon

Dear Ms. Quezon,

Thank you for reaching out. I understand your situation is distressing, involving significant financial implications tied to complex procedural issues following the unfortunate passing of your counsel.

Your core concern involves the interplay between the finality of a court decision, the consequences of your lawyer’s death on receiving court notices, and your right to recover an overpayment made due to an execution pending appeal after the judgment amount was reduced on appeal. The fact that you paid the initial judgment amount complicates matters in your perception, but it’s crucial to understand the specific legal rules governing these circumstances.

Untangling Notice Rules and Your Right to Restitution

Generally, court decisions become final and executory if no motion for reconsideration or appeal is filed within the prescribed period. Once a judgment becomes final, it is typically immutable. However, the issue of proper notice is central to determining when this finality occurs. The situation is complicated by the death of your counsel of record.

The courts have addressed the unfortunate event of a counsel’s passing during litigation. The responsibility rests primarily on the client to inform the court of their counsel’s demise and arrange for a substitution. If the court is not formally notified, notices sent to the counsel’s address of record are often considered valid service. As difficult as it sounds, the court system cannot be expected to monitor the status of every lawyer handling cases before it.

It is the party’s duty to inform the court of its counsel’s demise, and failure to apprise the court of such fact shall be considered negligence on the part of said party… It is not the duty of the courts to inquire, during the progress of a case, whether the law firm or partnership representing one of the litigants continues to exist lawfully, whether the partners are still alive, or whether its associates are still connected with the firm.

Therefore, Mr. Valdez’s assertion that the CA decision might have become final despite your lack of direct, personal notice might have some basis if the court was never formally informed about Atty. Santiago’s passing. The notice sent to his office address might be deemed sufficient under the rules.

However, this does not automatically negate your right to restitution regarding the overpayment. Your payment of the P2,000,000 was made pursuant to an execution pending appeal. This is a specific legal mechanism allowing the winning party at the trial level to enforce the judgment even while an appeal is ongoing. Crucially, it is not typically considered a compromise agreement or a settlement that terminates the case or waives the right to appeal or benefit from a favorable appellate ruling.

Execution pending appeal does not bar the continuance of the appeal on the merits, for the Rules of Court precisely provides for restitution according to equity in case the executed judgment is reversed on appeal.

This principle means that your payment did not necessarily signify your agreement to the original P2,000,000 amount as final. You paid because the court ordered execution while your appeal was still active. Since the CA ultimately reduced the award, the legal framework anticipates the need for reimbursement.

The mechanism for this is explicitly provided in the Rules of Court. When a judgment that has been executed pending appeal is later reversed or modified, the court has the authority to order the return of what was excessively paid.

Sec. 5. Effect of reversal executed judgment. – Where the executed judgment is reversed totally or partially, or annulled, on appeal or otherwise, the trial court may, on motion, issue such orders of restitution or reparation of damages as equity and justice may warrant under the circumstances. (Rule 39, Rules of Court)

This rule directly applies to your situation. The CA partially reversed (modified) the RTC’s decision by reducing the amount you owed. Even though the judgment was already executed based on the higher amount, the trial court (RTC) now has the power, upon your request (via a motion), to order Mr. Valdez to return the difference (P800,000) based on the final CA decision. Mr. Valdez’s argument that your payment was a settlement seems incorrect unless there was a separate, formal compromise agreement signed by both parties, which you haven’t mentioned.

In essence, while the finality of the CA decision might stand due to procedural rules regarding notice after counsel’s death, this finality actually works in your favor regarding the reduced amount. The core issue now shifts to enforcing the CA’s final decision, which includes recovering the excess payment you made earlier based on the trial court’s reversed ruling.

Practical Advice for Your Situation

• Formally Notify the Court: If not yet done, immediately file a formal notice with both the RTC and the CA regarding Atty. Santiago’s death, providing his death certificate if possible. Also, inform the courts of your new counsel or state that you will be representing yourself for the time being.
• Secure Copies of CA Decision & Entry of Judgment: Obtain certified true copies of the CA Decision and the Entry of Judgment from the Court of Appeals. These documents formally establish the final, reduced amount you owe.
• File a Motion for Restitution: File a formal Motion for Execution and Restitution with the Regional Trial Court (the court of origin). Attach the CA Decision and Entry of Judgment, proof of your P2,000,000 payment (receipts, bank transfers), and compute the excess amount (P800,000 plus any applicable interest). Cite Rule 39, Section 5 of the Rules of Court.
• Gather Proof of Payment: Compile all evidence proving you paid the P2,000,000 based on the execution pending appeal order. This is crucial for your motion.
• Address the ‘Settlement’ Claim: Be prepared to counter the argument that your payment constituted a settlement. Emphasize it was done under the compulsion of a writ of execution pending appeal and that no formal compromise agreement exists.
• Consult New Counsel: Given the procedural complexities and the need to file formal court documents, it is highly advisable to engage a new lawyer to handle the filing of the motion for restitution and represent you in any subsequent proceedings before the RTC.

While the situation regarding the notice after your lawyer’s passing is unfortunate, the rules governing execution pending appeal and restitution are designed to ensure fairness when appellate courts modify trial court judgments. You have a strong basis under Rule 39, Section 5 to seek the refund.

Hope this helps!

Sincerely,
Atty. Gabriel Ablola

For more specific legal assistance related to your situation, please contact me through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This correspondence is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please schedule a formal consultation.