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SECOND DIVISION its part, Bermic issued several postdated

checks to cover payments of the principal and


[G.R. No. 120817. November 4, 1996] interest of every loan packages involved.
ELSA B. REYES, petitioner, vs. COURT OF Subsequently, Elsa Reyes was investigated by
APPEALS, SECRETARY OF JUSTICE, AFP-MUTUAL the Senate Blue Ribbon Committee. She was
BENEFIT ASSOCIATION, INC., and GRACIELA involved in a large scale scam amounting to
ELEAZAR, respondents. millions of pesos belonging to Instructional
DECISION Material Corporation (IMC), an agency under
the Department of Education, Culture and
TORRES, JR., J.:
Sports.
Petitioner assails the respondent court’s
Meanwhile, respondent AFP-MBAI which
decision dated May 12, 1995 which sustained
invested its funds with Eurotrust, by buying
the two resolutions of the respondent Secretary
from it government securities, conducted its
of Justice, namely: 1) the Resolution dated
own investigation and found that after
January 23, 1992 affirming the resolution of the
Eurotrust delivered to AFP-MBAI the securities it
Provincial Prosecutor of Rizal dismissing the
purchased, the former borrowed the same
complaints of petitioner against private
securities but failed to return them to AFP-
respondent Eleazar in I.S. Nos. 91-2853, 91-
MBAI; and that the amounts paid by AFP-MBAI
4328 to 29, 91-4585 to 91 and 91-4738 to 39
to Eurotrust for those securities were in turn
for violations of B.P. Blg. 22 and estafa under
lent by Elsa Reyes to Bermic and others.
Article 315, par. 4, no. 2 (d) of the Revised
Penal Code, and 2) the Resolution dated When Eleazar came to know that the funds
January 12, 1993 affirming the resolution of the originally loaned by Eurotrust to Bermic
City Prosecutor of Quezon City finding a prima belonged to AFP-MBAI, she, as President of
facie case in I.S. No. 92-926 for violation of B.P.Bermic, requested a meeting with Eurotrust
Blg. 22 and estafa filed by respondent AFP- representatives. Thus, on February 15,1991,
Mutual Benefit Association, Inc. (AFP-MBAI, for the representatives of Eurotrust and Bermic
brevity) against petitioner Reyes. agreed that Bermic would directly settle its
obligations with the real owners of the fund-
The facts as summarized by the respondent
AFP-MBAI and DECS-IMC. This agreement was
court are as follows:
formalized in two letters dated March 19, 1991.
“Elsa Reyes is the president of Eurotrust Capital Pursuant to this understanding, Bermic
Corporation (EUROTRUST), a domestic negotiated with AFP-MBAI and DECS-IMC and
corporation engaged in credit financing. made payments to the latter. In fact, Bermic
Graciela Eleazar, private respondent, is the paid AFP-MBAI P31,711.11 and a check of P1-
president of B.E. Ritz Mansion International million.
Corporation (BERMIC), a domestic enterprise
However, Graciela Eleazar later learned that
engaged in real estate development. The other
Elsa Reyes continued to collect on the
respondent, Armed Forces of the Philippines
postdated checks issued by her (Eleazar)
Mutual Benefit Asso., Inc. (AFP-MBAI), is a
contrary to their agreement. So, Bermic wrote
corporation duly organized primarily to perform
to Eurotrust to hold the amounts “in
welfare services for the Armed Forces of the
constructive trust” for the real owners. But
Philippines.
Reyes continued to collect on the other
A. Re: Resolution dated January 23, 1992 postdated checks dated April 17 to June 28,
In her various affidavits-complaints with the 1991. Upon her counsel’s advise, Eleazar had
Office of the Provincial Prosecutor of Rizal, Elsa the payment stopped. Hence, her checks
Reyes alleges that Eurotrust and Bermic issued in favor of Eurotrust were dishonored.
entered into a loan agreement. Pursuant to the After investigation, the Office of the Provincial
said contract, Eurotrust extended to Bermic Prosecutor of Rizal issued a resolution
P216,053,126.80 to finance the construction of dismissing the complaints filed by Elsa Reyes
the latter’s Ritz Condominium and Gold against Graciela Eleazar on the ground that
Business Park. The loan was without collateral when the latter assumed the obligation of
but with higher interest rates than those Reyes to AFP-MBAI, it constituted novation,
allowed by the banks. In turn, Bermic issued 21 extinguishing any criminal liability on the part
postdated checks to cover payments of the of Eleazar.
loan packages. However, when those checks
Reyes filed a petition for review of the said
were presented for payment, the same were
resolution with respondent Secretary of Justice
dishonored by the drawee bank, Rizal
contending that novation did not take place.
Commercial Banking Corporation (RCBC), due
to stop payment order made by Graciela The Secretary of Justice dismissed the petition
Eleazar. Despite Eurotrust’s notices and holding that “the novation of the loan
repeated demands to pay, Eleazar failed to agreement prevents the rise of any incipient
make good the dishonored checks, prompting criminal liability since the novation had the
Reyes to file against her several criminal effect of canceling the checks and rendering
complaints for violation of B.P. 22 and estafa without effect the subsequent dishonor of the
under Article 315, 4th paragraph, No. 2 (d) of already cancelled checks.”
the Revised Penal Code. B. Re: Resolution dated January 12, 1993
Graciela Eleazar, in her counter-affidavits, At the time of the pendency of the cases filed
asserts that beginning December 1989, by Elsa Reyes against Graciela Eleazar, AFP-
Eurotrust extended to Bermic several loan MBAI lodged a separate complaint for estafa
packages amounting to P190,336,388.86. For and a violation of BP 22 against Elsa Reyes with
the office of the city prosecutor of Quezon city and respondent Eleazar had been novated
docketed as I.S. 92-926. The affidavit of when they agreed that respondent Eleazar
Gudelia Dinapo a member of the investigating should settle her firm’s (BERMIC) loan
committee formed by AFP-MBAI to investigate obligations directly with AFP-MBAI and DECS-
the anomalies committed by Eurotrust/Reyes, IMC instead of settling it with petitioner Reyes.
shows that between August 1989 and This finding was affirmed by the respondent
September 1990, Eurotrust offered to sell to court which pointed out that “the first contract
AFP-MBAI various marketable securities, was novated in the sense that there was a
including government securities, such as but substitution of creditor” when respondent
not limited to treasury notes, treasury bills, Eleazar, with the agreement of Reyes, directly
Land Bank of the Philippines Bonds and Asset paid her obligations to AFP-MBAI.
Participation Certificates. We cannot see how novation can take place
Relying on a canvass conducted by one of its considering the surrounding circumstances
employees, Cristina Cornista, AFP-MBAI decided which negate the same. The principle of
to purchase several securities amounting to novation by substitution of creditor was
P120,000,000.00 from Eurotrust. From erroneously applied in the first questioned
February 1990 to September 1990, a total of 21 resolution involving the contract of loan
transactions were entered into between between petitioner and respondent Eleazar.
Eurotrust and AFP-MBAI. Eurotrust delivered to Admittedly, in order that a novation can take
AFP-MBAI treasury notes amounting to P73 place, the concurrence of the following
million. However, Eurotrust fraudulently requisitesis indispensable:
borrowed all those treasury notes from the AFP-
MBAI for purposes of verification with the 1. there must be a previous valid obligation,
Central Bank. Despite AFP-MBAI’s repeated 2. there must be an agreement of the parties
demands, Eurotrust failed to return the said concerned to a new contract,
treasury notes. Instead it delivered 21
3. there must be the extinguishment of the old
postdated checks in favor of AFP-MBAI which
contract, and
were dishonored upon presentment for
payment. Eurotrust nonetheless made partial 4. there must be the validity of the new
payment to AFP-MBAI amounting to contract.
P35,151,637.72. However, after deducting this Upon the facts shown in the record, there is no
partial payment, the amounts of P73 million doubt that the last three essential requisites of
treasury notes with interest and novation are wanting in the instant case. No
P35,151,637.72 have remained unpaid. new agreement for substitution of creditor was
Consequently, AFP-MBAI filed with the Office of forged among the parties concerned which
the City Prosecutor of Quezon City a complaint would take the place of the preceding
for violation of BP 22 and estafa against Elsa contract. The absence of a new contract
Reyes. extinguishing the old one destroys any
Reyes interposed the defense of novation and possibility of novation by conventional
insisted that AFP-MBAI’s claim of unreturned subrogation. In including that a novation took
P73 million worth of government securities has place, the respondent court relied on the two
been satisfied upon her payment of P30 million. letters dated March 19, 1991, which, according
With respect to the remaining P43 million, the to it, formalized petitioner’s and respondent
same was paid when Eurotrust assigned its Eleazar’s agreement that BERMIC would
Participation Certificates to AFP-MBAI. directly settle its obligation with the real
owners of the funds - the AFP MBAI and DECS
Eventually, the Office of the City Prosecutor of
IMC. Be that as it may, a cursory reading of
Quezon City issued a resolution recommending
these letters, however, clearly and
the filing of an information against Reyes for
unmistakably shows that there was nothing
violation of BP 22 and estafa.
therein that would evince that respondent AFP-
Whereupon, Reyes filed a petition for review MBAI agreed to substitute for the petitioner as
with respondent Secretary of Justice. The latter the new creditor of respondent Eleazar in the
dismissed the petition on the ground that only contract of loan. It is evident that the two
resolutions of the prosecutors dismissing letters merely gave respondent Eleazar an
criminal complaints are cognizable for review authority to directly settle the obligation of
by the Department of Justice.” petitioner to AFP-MBAI and DECS-IMC. It is
On February 2, 1994, petitioner seeking the essentially an agreement between petitioner
nullification of either of the two resolutions of and respondent Eleazar only. There was no
the respondent Secretary of Justice filed a mention whatsoever of AFP-MBAI’s consent to
petition for certiorari, prohibition and the new agreement between petitioner and
mandamus with the respondent court which, respondent Eleazar much less an indication of
however, denied and dismissed her petition. AFP-MBAI’s intention to be the substitute
Her motion for reconsideration was likewise creditor in the loan contract. Well settled is the
denied in a Resolution dated June 27, 1995. rule that novation by substitution of creditor
Hence, this present petition. requires an agreement among the three parties
concerned - the original creditor, the debtor
The first Department of Justice Resolution and the new creditor. It is a new contractual
dated January 23, 1992 which sustained the relation based on the mutual agreement
Provincial Prosecutor’s decision dismissing among all the necessary parties. Hence, there
petitioner’s complaints against respondent is no novation if no new contract was executed
Eleazar for violation of B.P. 22 and estafa ruled by the parties. Article 1301 of the Civil Code is
that the contract of loan between petitioner explicit, thus:
“Conventional subrogation of a third person Petitioner’s omission to assert her right to avail
requires the consent of the original parties and of the remedies in law within a reasonable time
of the third person.” warrants a presumption that she abandoned it
The fact that respondent Eleazar made or declined to assert it. The law serves those
payments to AFP-MBAI and the latter accepted who are vigilant and diligent and not those who
them does not ipso facto result in novation. sleep when the law requires them to act.
There must be an express intention to novate - It bears emphasis that the above
animus novandi. Novation is never presumed. pronouncement we laid down applies only pro
Article 1300 of the Civil Code provides inter alia hac vice. This Court in affirming the
that conventional subrogation must be clearly questioned resolution despite the erroneous
established in order that it may take effect. application of a legal principle acted according
Notwithstanding our disagreement with the to what the peculiar circumstances of the
decision of the respondent court and the ruling instant case demand. Its factual setting led us
of the Secretary of Justice that a novation by to consider that to sustain the resolution is but
substitution of creditor has taken place, we opt the proper action to take in this particular case.
not to disturb the Resolution of the respondent Regarding the second Resolution of respondent
Secretary of Justice dated January 23, 1992 Secretary of Justice dated January 12, 1993
finding a prima facie case against the petitioner which affirms the City Prosecutor’s finding of a
in as much as it had already become final. It prima facie case against petitioner for violation
appears that petitioner filed two motions for of B.P. Blg. 22 and estafa involving the contract
reconsideration to the said resolution, the first of sale of securities, petitioner avers that she
one on February 6, 1992 and the second one in could not be held criminally liable for the crime
June 2, 1992. These two motions were, charged because the contract of sale of
however, denied by the respondent Secretary securities between her and respondent AFP-
of Justice, the last denial was contained in a MBAI was novated by substitution of debtor.
Resolution dated June 25, 1992 which was According to petitioner, the obligation assumed
received by petitioner on July 9, 1992. by respondent Eleazar pursuant to the
Petitioner made no prompt attempt to question authority given by her to respondent Eleazar in
the said resolutions before the proper forum. It a letter dated March 19, 1991 was precisely her
took her almost seventeen months (from July 9, (petitioner’s) obligation to respondent AFP-
1992 to February 2, 1994) to challenge the MBAI under the contract of sale of securities.
January 23, 1992 Resolution when she filed the She claims that private respondent Eleazar,
petition for certiorari with the respondent court instead of fulfilling her obligation under the
on February 2, 1994, which resolved to affirm contract of loan to pay petitioner the amount of
the aforesaid resolution of the Secretary of debts, assumed petitioner’s obligation under
Justice. the contract of sale to make payments to
Petitioner who chose her forum but respondent AFP-MBAI directly.
unfortunately lost her claim is bound by such This contention is bereft of any legal and
adverse judgment on account of finality of factual basis. Just like in the first questioned
judgment, otherwise, there would be no end to resolution, no novation took place in this case.
litigation. Litigation must end and terminate A thorough examination of the records shows
sometime and somewhere, and it is essential to that no hard evidence was presented which
an effective administration of justice that once would expressly and unequivocably
a judgment has become final, the issue or demonstrate the intention of respondent AFP-
cause therein should be laid at rest. While the MBAI to release petitioner from her obligation
respondent Secretary of Justice was in error in to pay under the contract of sale of securities.
applying the rule on novation in the January 23, It is a rule that novation by substitution of
1992 Resolution, such irregularity, however, debtor must always be made with the consent
does not affect the validity of the proceedings of the creditor. Article 1293 of the Civil Code is
in the Department of Justice. Erroneous explicit, thus:
application of a legal principle cannot bring a “Novation which consists in substituting a new
judgment that has already attained the status debtor in the place of the original one, may be
of finality to an absolute nullity under the well made even without or against the will of the
entrenched rule of finality of judgment. The latter, but not without the consent of the
basic rule of finality of judgment is grounded on creditor. Payment by the new debtor gives
the fundamental principle of public policy and him the rights mentioned in Articles 1236 and
sound practice that at the risk of occasional 1237.”
error, the judgment of court and award of
quasi-judicial agencies must become final at The consent of the creditor to a novation by
some definite date fixed by law. change of debtor is as indispensable as the
creditor’s consent in conventional subrogation
We find no plausible explanation nor justifiable in order that a novation shall legally take
reason offered by petitioner for the obvious place. The mere circumstance of AFP-MBAI
delay or omission to take a timely action receiving payments from respondent Eleazar
against the questioned resolution. She is who acquiesced to assume the obligation of
apparently guilty of laches which bars her from petitioner under the contract of sale of
seeking relief in a court of law after she securities, when there is clearly no agreement
intentionally and unreasonably fails to guard of to release petitioner from her responsibility,
her rights. Laches is the failure or neglect for does not constitute novation, at most, it only
an unreasonable and unexplained length of creates a juridical relation of co-debtorship or
time to do that which by exerting due diligence suretyship on the part of respondent Eleazar to
could/should have been done earlier. the contractual obligation of petitioner to AFP-
MBAI and the latter can still enforce the La Campana Food Products vs. CA, 223 SCRA
obligation against the petitioner. In Ajax 151, G. R. No. 88246.
Marketing and Development Corporation vs. Marcelino vs. CA, 210 SCRA 444, G.R No.
Court of Appeals, which is relevant in the 94422.
instant case, we stated that -
Rollo, p. 70.
“In the same vein, to effect a subjective
novation by a change in the person of the Testate Estate of Mota vs. Serra, 47 Phil. 465,
debtor, it is necessary that the old debtor be No. 22825.
released expressly from the obligation, and the 248 SCRA 223, G.R. No. 118585, Sept. 14,
third person or new debtor assumes his place 1995.
in the relation. There is no novation without
SYLLABUS
such release as the third person who has
assumed the debtor’s obligation becomes 1. CIVIL LAW; CONTRACTS; NOVATION BY
merely a co-debtor or surety. XXX. Novation CONVENTIONAL SUBROGATION;
arising from a purported change in the person INDISPENSABLE REQUISITES THEREOF.— The
of the debtor must be clear and express XXX.” principle of novation by substitution of creditor
was erroneously applied in the first questioned
In the civil law setting, novatio is literally
resolution involving the contract of loan
construed as to make new. So it is deeply
between petitioner and respondent Eleazar.
rooted in the Roman Law jurisprudence, the
Admittedly, in order that a novation can take
principle - novatio non praesumitur - that
place, the concurrence of the following
novation is never presumed. At bottom, for
requisites is indispensable: 1. there must be a
novation to be a jural reality, its animus must
previous valid obligation, 2. there must be an
be ever present, debitum pro debito —
agreement of the parties concerned to a new
basically extinguishing the old obligation for
contract, 3. there must be the extinguishment
the new one.
of the old contract, and 4. there must be the
The foregoing elements are found wanting in validity of the new contract.
the case at bar.
2. ID.; ID.; ID.; ID.; EXPRESS AGREEMENT TO
ACCORDINGLY, finding no reversible error in SUBSTITUTE CREDITOR WANTING IN CASE AT
the decision appealed from dated May 12, BENCH.— Upon the facts shown in the record,
1995, the same is hereby AFFIRMED in all there is no doubt that the last three essential
respects. requisites of novation are wanting in the instant
SO ORDERED. case. No new agreement for substitution of
creditor was forged among the parties
Regalado (Chairman), Romero, Puno, and concerned which would take the place of the
Mendoza, JJ., concur. preceding contract. The absence of a new
Penned by Associate Justice Angelina Sandoval contract extinguishing the old one destroys any
Gutierrez and concurred in by Associate possibility of novation by conventional
Justices Emeterio Cui and Conrado Vasquez, Jr. subrogation. In concluding that a novation took
Decision, pp. 2-5; Rollo, pp. 83-86. place, the respondent court relied on the two
letters dated March 19, 1991, which, according
Rollo, pp. 52-80. to it, formalized petitioner’s and respondent
Rollo, pp. 92-102. Eleazar’s agreement that BERMIC would
directly settle its obligation with the real
Rollo, p. 91.
owners of the funds — the AFP-MBAI and DECS
Decision, p. 6; Rollo, p. 87. IMC. Be that as it may, a cursory reading of
Tiu Siuco vs. Habana, No. 21106; 45 Phil. 707. these letters, however, clearly and
unmistakably shows that there was nothing
Rollo, pp. 272-275. therein that would evince that respondent AFP-
Decision, p. 3; Rollo, p. 84. MBAI agreed to substitute for the petitioner as
the new creditor of respondent Eleazar in the
8 Manresa 447, cited in Commentaries and
contract of loan. It is evident that the two
Jurisprudence on the Civil Code of the
letters merely gave respondent Eleazar an
Philippines, Tolentino, 1985 Ed., Volume 4, p.
authority to directly settle the obligation of
402.
petitioner to AFP-MBAI and DECS-IMC. It is
Tui Siuco vs. Habana, supra; La Tondeña, Inc. essentially an agreement between petitioner
vs. Alto Surety and Ins. Co., 101 Phil. 879 No. L- and respondent Eleazar only. There was no
10132. mention whatsoever of AFP-MBAI’s consent to
Pacific Commercial Co. vs. Sotto, 34 Phil. 237 the new agreement between petitioner and
No. 10578; Martinez vs. Cavives, 25 Phil. 581 respondent Eleazar much less an indication of
No. 7663; Goni vs. CA, 144 SCRA 222 No. L- AFP-MBAI’s intention to be the substitute
27434. creditor in the loan contract. Well settled is the
rule that novation by substitution of creditor
Rollo, pp. 120-136. requires an agreement among the three parties
Zansibarian Residents vs. Makati, 135 SCRA concerned — the original creditor, the debtor
235 No. L-62136; Gonzales vs. Hon. Secretary, and the new creditor. It is a new contractual
116 SCRA 575 No. L-49524. relation based on the mutual agreement
among all the necessary parties. Hence, there
Soliven vs. WCC, No. L-44763, Malijan vs.
is no novation if no new contract was
WCC, No. L-45381, 77 SCRA 518; Carreon vs.
executed by the parties
WCC, No. L-43307, 77 SCRA 297.
pursuant to Article 1301 of the Civil Code.
3. ID.; ID.; ID.; ID.; ID.; PAYMENT MADE TO A 5. ID.; ID.; ID.; ID.; PETITIONER GUILTY OF
THIRD PERSON DOES NOT RESULT IN LACHES IN CASE AT BENCH.— We find no
NOVATION.— The fact that respondent Eleazar plausible explanation nor justifiable reason
made payments to AFP-MBAI and the latter offered by petitioner for the obvious delay or
accepted them does not ipso facto result in omission to take a timely action against the
novation. There must be an express intention questioned resolution. She is apparently guilty
to novate — animus novandi. Novation is never of laches which bars her from seeking relief in a
presumed. Article 1300 of the Civil Code court of law after she intentionally and
provides inter alia that conventional unreasonably fails to guard of her rights.
subrogation must be clearly established in Laches is the failure or neglect for an
order that it may take effect. unreasonable and unexplained length of time
4. POLITICAL LAW; ADMINISTRATIVE LAW; to do that which by exerting due diligence
JUDICIAL REVIEW OF ADMINISTRATIVE could/should have been done earlier.
DECISIONS; ERRONEOUS JUDGMENT OF QUASI- Petitioner’s omission to assert her right to avail
JUDICIAL AGENCY FINAL IN CASE AT BENCH. of the remedies in law within a reasonable
— Notwithstanding our disagreement with the time warrants a presumption that she
decision of the respondent court and the ruling abandoned it or declined to assert it. The law
of the Secretary of Justice that a novation by serves those who are vigilant and diligent and
substitution of creditor has taken place, we opt not those who sleep when the law requires
not to disturb the Resolution of the respondent them to act.
Secretary of Justice dated January 23, 1992 6. CIVIL LAW; CONTRACTS; NOVATION BY
finding a prima facie case against the petitioner SUBSTITUTION OF DEBTOR; MUST BE MADE
in as much as it had already become final. It WITH THE CONSENT OF THE CREDITOR; CASE
appears that petitioner filed two motions for AT BENCH.— Just like in the first questioned
reconsideration to the said resolution, the first resolution, no novation took place in this case.
one on February 6, 1992 and the second one in A thorough examination of the records shows
June 2, 1992. These two motions were, that no hard evidence was presented which
however, denied by the respondent Secretary would expressly and unequivocably
of Justice, the last denial was contained in a demonstrate the intention of respondent AFP-
Resolution dated June 25, 1992 which was MBAI to release petitioner from her obligation
received by petitioner on July 9, 1992. to pay under the contract of sale of securities.
Petitioner made no prompt attempt to question It is a rule that novation by substitution of
the said resolutions before the proper forum. It debtor must always be made with the consent
took her almost seventeen months (from July 9, of the creditor pursuant to Article 1293 of the
1992 to February 2, 1994) to challenge the Civil Code.
January 23, 1992 Resolution when she filed the 7. ID.; ID.; ID.; ID.; WHEN CO-DEBTORSHIP OR
petition for certiorari with the respondent court SURETYSHIP RESULTS; CASE AT BENCH.— The
on February 2, 1994, which resolved to affirm mere circumstance of AFP-MBAI receiving
the aforesaid resolution of the Secretary of payments from respondent Eleazar who
Justice. Petitioner who chose her forum but acquiesced to assume the obligation of
unfortunately lost her claim is bound by such petitioner under the contract of sale of
adverse judgment on account of finality of securities, when there is clearly no agreement
judgment, otherwise, there would be no end to to release petitioner from her responsibility,
litigation. Litigation must end and terminate does not constitute novation, at most, it only
sometime and somewhere, and it is essential to creates a juridical relation of co-debtorship or
an effective administration of justice that once suretyship on the part of respondent Eleazar to
a judgment has become final, the issue or the contractual obligation of petitioner to AFP-
cause therein should be laid at rest. While the MBAI and the latter can still enforce the
respondent Secretary of Justice was in error in obligation against the petitioner. x x x In the
applying the rule on novation in the January 23, civil law setting, novatio is literally construed as
1992 Resolution, such irregularity, however, to make new. So it is deeply rooted in the
does not affect the validity of the proceedings Roman Law jurisprudence, the principle —
in the Department of Justice. Erroneous novatio non praesumitur — that novation is
application of a legal principle cannot bring a never presumed. At bottom, for novation to be
judgment that has already attained the status a jural reality, its animus must be ever present,
of finality to an absolute nullity under the well debitum pro debito — basically extinguishing
entrenched rule of finality of judgment. The the old obligation for the new one. The
basic rule of finality of judgment is grounded on foregoing elements are found wanting in the
the fundamental principle of public policy and case at bar.
sound practice that at the risk of occasional
error, the judgment of court and award of
quasi-judicial agencies must become final at
some definite date fixed by law. It bears
emphasis that the above pronouncement we
laid down applies only pro hac vice. This Court
in affirming the questioned resolution despite
the erroneous application of a legal principle
acted according to what the peculiar
circumstances of the instant case demand. Its
factual setting led us to consider that to sustain
the resolution is but the proper action to take in
this particular case.