Government Service Insurance System v. Hon. Court of Appeals

Summary

This case involves the execution of a construction contract judgment where contractor Valencia sued Queen's Row Subdivision, Inc. (QRSI) and Government Service Insurance System (GSIS) for unpaid construction work. The trial court ordered QRSI to pay Valencia specific amounts and required GSIS to deliver retained funds to Valencia as payment, with explicit limitation that GSIS would not be personally liable beyond such retained amounts. The core dispute arose during execution when the trial court imposed compound interest rates of 12-21% per annum based on Central Bank circulars. The Supreme Court ruled that these execution orders varied the tenor of the original judgment and constituted grave abuse of discretion. The Court held that the legal rate of interest should be 6% per annum under Civil Code Article 2209, not Central Bank circular rates which apply only to loans. The decision protects GSIS from liability beyond the actual funds it holds for QRSI, emphasizing that execution must conform to the original judgment's terms.