RULE 39 CONSOLIDATED CASE DIGESTS.docx

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RULE 39: EXECUTION AND SATISFACTION OF JUDGMENT

AIDA P. BAÑEZ vs. GABRIEL B. BAÑEZ

G.R. No. 133628. January 23, 2002

EXECUTION PENDING APPEAL

FACTS:

These 2 petitions stem from the decision of RTC Cebu Br. 20, in Civil Case No. CEB-16765. The 1st seeks the reversal of the CA’s decision setting aside the orders dated October 1 and November 22, 1996 of the RTC. The 2nd prays for the reversal of the resolution of the CA denying the motion to dismiss.

On September 23, 1996, RTC Cebu Branch 20, decided Civil Case No. CEB-16765, decreeing among others the legal separation between Aida Bañez and Gabriel Bañez on the ground of the latter’s sexual infidelity; the dissolution of their conjugal property relations and the division of the net conjugal assets; the forfeiture of Gabriel’s 1/2 share in the net conjugal assets in favor of the common children; the payment to petitioner’s counsel of the sum of P100,000 as attorney’s fees to be taken from petitioner’s share in the net assets; and the surrender by respondent of the use and possession of a Mazda motor vehicle and the smaller residential house located at Maria Luisa Estate Park Subdivision to petitioner and the common children within 15 days from receipt of the decision.

Petitioner filed an urgent ex-parte motion to modify said decision, while respondent filed a Notice of Appeal.

RTC granted Aida Banez’ urgent ex-parte motion to modify the decision on October 1, 1996 by approving the Commitment of Fees dated December 22, 1994; obliging petitioner to pay as attorney’s fees the equivalent of 5% of the total value of respondent’s ideal share in the net conjugal assets; and ordering the administrator to pay petitioner’s counsel, Atty. Adelino B. Sitoy, the sum of P100,000 as advance attorney’s fees chargeable against the aforecited 5%.

In another motion to modify the decision, petitioner Aida Bañez sought moral and exemplary damages, as well as litigation expenses. On October 9, 1996, she filed a motion for execution pending appeal. Respondent Gabriel filed a consolidated written opposition to the two motions, and also prayed for the reconsideration of the October 1, 1996 order.

On November 22, 1996, RTC denied Aida’s motion for moral and exemplary damages and litigation expenses but gave due course to the execution pending appeal.

In turn, in a petition for certiorari, Gabriel Bañez elevated the case to the CA. On March 21, 1997, CA rendered its decision setting aside the Order dated October 1, 1996, the Omnibus Order dated November 22, 1996 and the writ of execution dated December 2, 1996 and the Order dated December 10, 1996 by the RTC

On February 10, 1998, CA denied Aida’s MR. Hence, the petition in G.R. No. 132592, filed by herein petitioner.

In the meantime, the trial court gave due course to Gabriel’s Notice of Appeal and elevated on April 15, 1997 the

entire case records to the CA. Aida filed with the CA a motion to dismiss the appeal on the ground that Gabriel had failed to file with the CA a Record on Appeal. CA denied the motion to dismiss as well as the subsequent motion for reconsideration. Hence, the petition in G.R. No. 133628. SC consolidated the two petitions.

ISSUES:

I. The core issue in G.R. No. 132592 is whether execution of judgment pending appeal was justified. NO

HELD: Petitions are denied for lack of merit.

G.R. No. 132592:

As held in Echaus vs. Court of Appeals, 199 SCRA 381, 386 (1991), execution pending appeal is allowed when superior circumstances demanding urgency outweigh the damages that may result from the issuance of the writ. Otherwise, instead of being an instrument of solicitude and justice, the writ may well become a tool of oppression and inequity.

In this case, considering the reasons cited by petitioner, we are of the view that there is no superior or urgent circumstance that outweighs the damage which respondent would suffer if he were ordered to vacate the house. We note that petitioner did not refute respondent’s allegations that she did not intend to use said house, and that she has two (2) other houses in the US where she is a permanent resident, while he had none at all. Merely putting up a bond is not sufficient reason to justify her plea for execution pending appeal. To do so would make execution routinary, the rule rather than the exception.

Similarly, we are not persuaded that the P100,000 advance payment to petitioner’s counsel was properly granted. We see no justification to pre-empt the judgment by the Court of Appeals concerning said amount of P100,000 at the time that the trial court’s judgment was already on appeal.

Fajardo vs. QuitaligA.M. No. P-02-1535

March 28, 2003Return of Writ of Execution

Facts: A complaint for ejectment filed by Fajardo and Perez against Maria Datuin was finally decided against the latter. The decision being final and executory. Upon motion of complainant, the Court issued a Writ of Execution on March 7, 2000 which was brought by respondent Sheriff to the defendant Datuin on March 9, 2000. However the writ was not executed on first instance because Datuin asked for a 2-week period to move out.

Thereafter, the writ was still not executed because Sheriff alleged that there was a restraining order prohibiting him to do so. On March 24, 2000 upon verification from the court, complainant found out that there was no restraining order. So he told the respondent to implement the Writ of Execution. Respondent, accompanied by a policeman and the barangay captain went to the place where the Writ of Execution is to be implemented at

AGUIRRE, ALMIRANTE, BAÑARES, CABREROS, FLORES, JABINES, MORES, ORTEGA, SALGADO, QUINTO, VILLAMIN, VERGARA-HUERTA


10:00 that morning but when they reached the place, respondent did not do anything except to ask the defendant to bring out her personal properties. His reason is that an employee of the Probation Office, Mr. Leonardo Martinez, talked to him. At 5:30 p.m., the restraining order was brought to the place, and the respondent told him that the writ of execution can no longer be implemented.

Complainant asserted that respondent favored, or showed partiality in favor of the defendant to his prejudice.

In his Comment respondent denied the charge and asked for the dismissal of the case, because he had already implemented the Writ on August 24, 2000 as evidenced by his August 25, 2000 Report of Service. He also pointed out that he had made an inventory of the personal properties recovered from the subject premises. That he had done so was attested to by defendants mother, and witnessed by the barangay captain and two councilors.

The OCA found respondent to have been negligent in the performance of his duty as a sheriff and recommended that respondent be ordered to pay a fine of P5,000 and warned that a repetition of the same or a similar offense would be dealt with more severely.

Issue: Whether the findings of the OCA is correct

Held: Yes, the OCA is correct. As frontline officials of the justice system, sheriffs must always strive to maintain public trust in the performance of their duties. Having the forsworn duty to uphold the majesty of the law, they must see to it that the final stage in the litigation process is carried out without unnecessary delay.

SEC. 14. Return of Writ of Execution. The writ of execution shall be returnable to the court issuing it immediately after the judgment has been satisfied in part or in full. If the judgment cannot be satisfied in full within thirty days (30) days after his receipt of the writ, the officer shall report to the court and state the reason therefore. Such writ shall continue in effect during the period within which the judgment may be enforced by motion. The officer shall make a report to the court every thirty (30) days on the proceedings taken thereon until the judgment is satisfied in full, or its effectivity expires. The returns or periodic reports shall set forth the whole of the proceedings taken, and shall be filed with the court and copies thereof promptly furnished the parties.

We find respondents explanation to be utterly wanting. He is guilty of dereliction of his duty as a sheriff, because he failed to (1) execute the Writ within 30 days from his receipt thereof, (2) submit his Report of Service within the same period, (3) make periodic reports to the MTCC until the judgment was fully satisfied, and (4) furnish the parties with copies of the Reports.

By his own words, respondent admitted his dereliction of duty. First, as we have said earlier, he should have immediately executed the Writ when he served it upon the defendant on March 9, 2000.

Second, he should have immediately reported to the MTCC that he was unable to enforce the Writ because another court had issued a TRO enjoining him from doing so. Third, he should have informed the parties, particularly the plaintiff or his counsel, about his inability to enforce the Writ. Fourth, he should have immediately enforced it twenty days after its issuance.

Fifth, he should have made periodic Reports to the MTCC until the judgment was fully satisfied and the parties furnished a copy thereof. Sixth, within thirty days from his receipt of the Writ, he should have promptly made his Return, a copy of which he should have immediately furnished the parties.

Clearly, the actuations of respondent constitute disrespect, if not outright defiance, of the MTCCs authority. In the absence of instructions to the contrary, a sheriff has the duty to execute a Writ with reasonable celerity and promptness in accordance with its mandate.

In several cases, the Court has said that the failure to make a return of a writ within the required period is nonfeasance.

EDGAR Y. SANTOS vs. COMMISSION ON ELECTIONS (FIRST DIVISION) and PEDRO Q. PANULAYA

G.R. No. 155618. March 26, 2003. EN BANC. YNARES-SANTIAGO.

Motion for Execution pending appeal; Forum Shopping

FACTS:

Petitioner Edgar Y. Santos and respondent Pedro Q. Panulaya were both candidates for Mayor of the Municipality of Balingoan, Misamis Oriental in the 2001 elections. On May 16, 2001, the Municipal Board of Canvassers proclaimed respondent Panulaya as the duly elected Mayor.

Petitioner filed an election protest before the RTC of Misamis Oriental. The decision of the trial court was rendered after almost one year of trial and revision of the questioned ballots. It found petitioner as the candidate with the plurality of votes. Petitioner thereafter filed a motion for execution pending appeal.

Meanwhile, before the trial court could act on petitioners motion, respondent filed on with the COMELEC a petition for certiorari, docketed as SPR No. 20-2002, assailing the decision of the trial court. Respondent likewise appealed the trial court’s decision to the COMELEC, where it was docketed as EAC No. A-12-2002.

The COMELEC dismissed SPR No. 20-2002 after finding that the trial court did not commit grave abuse of discretion in rendering the assailed judgment. Thus, the trial court directs and orders the immediate execution of its Decision promulgated on April 18, 2002, to install protestant/petitioner EDGAR Y. SANTOS as the duly elected Mayor of Balingoan, Misamis Oriental, to take his oath of office and assume the functions and duties of Mayor after he shall have filed a bond. After petitioner posted the required bond, the trial court issued the Writ of Execution.

On August 21, 2002, respondent filed with the COMELEC a motion for reconsideration of the dismissal of his petition in SPR No. 20-2002. After five days, he filed a supplemental petition in SPR No. 20-2002.

Barely two days later, on August 28, 2002, and while his motion for reconsideration and supplemental petition in SPR No. 20-2002 were pending, respondent filed another petition with the



COMELEC, docketed as SPR No. 37-2002. The petition contained the same prayer as that in the supplemental petition filed in SPR 20-2002.

On September 3, 2002, the COMELEC issued an Order directing the parties to maintain the status quo ante and enjoining petitioner from assuming the functions of Mayor. Petitioner filed a motion for reconsideration but the COMELEC First Division did not refer the said motion to the COMELEC En Banc. Hence, petitioner, citing Kho v. COMELEC brought the instant special civil action for certiorari before the SC.ISSUES:

1. WON Execution pending appeal is proper in Election cases.

2. WON respondent is guilty of forum shopping.

RULING:

1. Yes. The grant of execution pending appeal was well within the discretionary powers of the trial court. In order to obtain the annulment of said orders in a petition for certiorari, it must first be proved that the trial court gravely abused its discretion. He should show not merely a reversible error committed by the trial court, but a grave abuse of discretion amounting to lack or excess of jurisdiction.

In this case, no grave abuse of discretion was committed by the trial court in granting execution pending appeal. However, the COMELEC set aside the aforesaid order, saying that shortness of term alone is not a good reason for execution of a judgment pending appeal.

While it was indeed held that shortness of the remaining term of office and posting a bond are not good reasons, the SC stated in Fermo v. COMELEC that:

A valid exercise of the discretion to allow execution pending appeal requires that it should be based upon good reasons to be stated in a special order. The following constitute good reasons and a combination of two or more of them will suffice to grant execution pending appeal: (1.) public interest involved or will of the electorate; (2.) the shortness of the remaining portion of the term of the contested office; and (3.) the length of time that the election contest has been pending.

In the case at bar, the decision of the trial court was rendered after almost one year of trial and revision of the questioned ballots and found petitioner as the candidate with the plurality of votes. Respondent appealed the said decision to the COMELEC. In the meantime, the three-year term of the Office of the Mayor continued to run. The will of the electorate, as determined by the trial court in the election protest, had to be respected and given meaning. The Municipality of Balingoan, Misamis Oriental, needed the services of a mayor even while the election protest was pending, and it had to be the candidate judicially determined to have been chosen by the people.

All that was required for a valid exercise of the discretion to allow execution pending appeal was that the immediate execution should be based upon good reasons to be stated in a special order. The rationale why such execution is allowed in

election cases is, as stated in Gahol v. Riodique, to give as much recognition to the worth of a trial judges decision as that which is initially ascribed by the law to the proclamation by the board of canvassers.

To deprive trial courts of their discretion to grant execution pending appeal would, in the words of Tobon Uy v. COMELEC, bring back the ghost of the grab-the-proclamation-prolong the protest techniques so often resorted to by devious politicians in the past in their efforts to perpetuate their hold to an elective office. This would, as a consequence, lay to waste the will of the electorate.

2. Yes. Respondent was guilty of forum-shopping when he instituted SPR No. 37-2002 with the COMELEC.

Forum-shopping is an act of a party against whom an adverse judgment or order has been rendered in one forum of seeking and possibly getting a favorable opinion in another forum, other than by appeal or special civil action for certiorari. It may also be the institution of two or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition. For it to exist, there should be (a) identity of parties, or at least such parties as would represent the same interest in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) identity of the two preceding particulars such that any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration.

In the case at bar, respondent obtained an adverse decision when his petition in SPR No. 20-2002 was dismissed by the COMELEC. He thereafter filed a motion for reconsideration and a supplemental petition, praying for the nullification of the trial courts order for the execution of its decision pending appeal. Two days after filing the supplemental petition, and while the same was very much pending before the COMELEC, he filed a wholly separate petition for certiorari, docketed as SPR No. 37-2002, wherein he pleaded the same reliefs prayed for in the supplemental petition. In doing so, respondent sought to increase his chances of securing a favorable decision in another petition.

Considering that respondent was indubitably guilty of forum-shopping when he filed SPR No. 37-2002, his petition should have been dismissed outright by the COMELEC. Willful and deliberate forum-shopping is a ground for summary dismissal of the case, and constitutes direct contempt of court.

RCBC vs. MAGWING.R. No. 152878

May 5, 2003

RIZAL COMMERCIAL BANKING CORPORATION, vs. MAGWIN MARKETING CORPORATION, NELSON TIU, BENITO SY and

ANDERSON UY

Whether the dismissal without prejudice for failure to prosecute was unconditionally reconsidered, reversed and set aside to reinstate the civil case and have it ready for pre-trial are matters which should have been clarified and resolved in the first instance by the court a quo.



FACTS: On 4 March 1999 petitioner Rizal Commercial Banking Corporation (RCBC) filed a complaint for recovery of a sum of money with prayer for a writ of preliminary attachment against respondents Magwin Marketing Corporation, Nelson Tiu, Benito Sy and Anderson Uy. On 26 April 1999, the trial court issued a writ of attachment. On 4 June 1999 the writ was returned partially satisfied since only a parcel of land purportedly owned by defendant Benito Sy was attached. In the meantime, summons was served on each of the defendants, respondents herein, who filed their respective answers, except for defendant Gabriel Cheng who was dropped without prejudice as party-defendant as his whereabouts could not be located. On 21 September 1999 petitioner moved for an alias writ of attachment which on 18 January 2000 the court a quo denied.

Petitioner did not cause the case to be set for pre-trial. For about six (6) months thereafter, discussions between petitioner and respondents Magwin Marketing Corporation, Nelson Tiu, Benito Sy and Anderson Uy, as parties in Civil Case No. 99-518, were undertaken to restructure the indebtedness of respondent Magwin Marketing Corporation.

On 9 May 2000 petitioner approved a debt payment scheme for the corporation which on was communicated to the latter by means of a letter dated for the conformity of its officers, i.e., respondent Nelson Tiu as President/General Manager of Magwin Marketing Corporation and respondent Benito Sy as Director thereof. Only respondent Nelson Tiu affixed his signature on the letter to signify his agreement to the terms and conditions of the restructuring.

On 20 July 2000 the RTC of Makati City, on its own initiative, issued an Order dismissing without prejudice Civil Case No. 99-518 for failure of petitioner as plaintiff therein to "prosecute its action for an unreasonable length of time . . .."

Subsequently, the petitioner moved for reconsideration of the Order by informing the trial court of respondents' unremitting desire to settle the case amicably through a loan restructuring program. On 22 August 2000 petitioner notified the trial court of the acquiescence thereto of respondent Nelson Tiu as an officer of Magwin Marketing Corporation and defendant in the civil case.

On 27 July 2000 petitioner filed in Civil Case No. 99-518 a Manifestation and Motion to Set Case for Pre-Trial Conference alleging that "[t]o date, only defendant Nelson Tiu had affixed his signature on the letter which informed the defendants that plaintiff [herein petitioner] already approved defendant Magwin Marketing Corporations request for restructuring of its loan obligations to plaintiff but subject to the terms and conditions specified in said letter."

This motion was followed on 5 October 2000 by petitioner's Supplemental Motion to Plaintiffs Manifestation and Motion to Set Case for Pre-Trial Conference affirming that petitioner "could not submit a compromise agreement because only defendant Nelson Tiu had affixed his signature on the May 10, 2000 letter . . .." Respondent Anderson Uy opposed the foregoing submissions of petitioner while respondents Magwin Marketing Corporation, Nelson Tiu and Benito Sy neither contested nor supported them.

The trial court, in an undated Order (although a date was later inserted in the Order), denied petitioner's motion to calendar Civil Case No. 99-518 for pre-trial because of the failure of the plaintiff to submit a compromise agreement.

On 15 November 2000 petitioner filed its Notice of Appeal from the said Orders. On 16 November 2000 the trial court issued two (2) Orders, one of which inserted the date "6 November 2000" in the undated Order rejecting petitioner's motion for pre-trial in the civil case, and the other denying due course to the Notice of Appeal on the ground that the "Orders dated 8 September 2000 and 6 November 2000 are interlocutory orders and therefore, no appeal may be taken . . .."

On 7 December 2000 petitioner elevated the Orders dated 8 September 2000, 6 November 2000 and 16 November 2000 of the trial court to the Court of Appeals in a petition for certiorari under Rule 65 of the Rules of Civil Procedure. In the main, petitioner argued that the court a quo had no authority to compel the parties in Civil Case No. 99-518 to enter into an amicable settlement nor to deny the holding of a pre-trial conference on the ground that no compromise agreement was turned over to the court a quo .

ISSUE:

1) Whether or not the petitioner is required to pay again the requisite docket fees.

2) Whether or not the court a quo may dismiss a claim for failure of the parties to submit to a compromise agreement.

HELD:

1) No. There is no substantial policy worth pursuing by requiring petitioner to pay again the docket fees when it has already discharged this obligation simultaneously with the filing of the complaint for collection of a sum of money. The procedure for dismissed cases when re-filed is the same as though it was initially lodged, i.e., the filing of answer, reply, answer to counter-claim, including other foot-dragging maneuvers, except for the rigmarole of raffling cases which is dispensed with since the re-filed complaint is automatically assigned to the branch to which the original case pertained. A complaint that is re-filed leads to the re-enactment of past proceedings with the concomitant full attention of the same trial court exercising an immaculate slew of jurisdiction and control over the case that was previously dismissed, which in the context of the instant case is a waste of judicial time, capital and energy.

What judicial benefit do we derive from starting the civil case all over again, especially where three (3) of the four (4) defendants, i.e., Magwin Marketing Corporation, Nelson Tiu and Benito Sy, have not contested petitioner's plea before this Court and the courts a quo to advance to pre-trial conference? Indeed, to continue hereafter with the resolution of petitioner's complaint without the usual procedure for the re-filing thereof, we will save the court a quo invaluable time and other resources far outweighing the docket fees that petitioner would be forfeiting should we rule otherwise.



It must be emphasized however that once the dismissal attains the attribute of finality, the trial court cannot impose legal fees anew because a final and executory dismissal although without prejudice divests the trial court of jurisdiction over the civil case as well as any residual power to order anything relative to the dismissed case; it would have to wait until the complaint is docketed once again. On the other hand, if we are to concede that the trial court retains jurisdiction over Civil Case No. 99-518 for it to issue the assailed Orders, a continuation of the hearing thereon would not trigger a disbursement for docket fees on the part of petitioner as this would obviously imply the setting aside of the order of dismissal and the reinstatement of the complaint.

2)

Besides the semantic and consequential improbabilities of respondent Uy's argument, our ruling in Goldloop Properties, Inc., is decisive of the instant case. In Goldloop Properties, Inc., we reversed the action of the trial court in dismissing the complaint for failure of the plaintiff to prosecute its case, which was in turn based on its inability to forge a compromise with the other parties within fifteen (15) days from notice of the order to do so and held -

Since there is nothing in the Rules that imposes the sanction of dismissal for failing to submit a compromise agreement, then it is obvious that the dismissal of the complaint on the basis thereof amounts no less to a gross procedural infirmity assailable by certiorari. For such submission could at most be directory and could not result in throwing out the case for failure to effect a compromise. While a compromise is encouraged, very strongly in fact, failure to consummate one does not warrant any procedural sanction, much less an authority to jettison a civil complaint worth P4,000,000.00 . . . Plainly, submission of a compromise agreement is never mandatory, nor is it required by any rule.

As also explained therein, the proper course of action that should have been taken by the court a quo, upon manifestation of the parties of their willingness to discuss a settlement, was to suspend the proceedings and allow them reasonable time to come to terms (a) If willingness to discuss a possible compromise is expressed by one or both parties; or (b) If it appears that one of the parties, before the commencement of the action or proceeding, offered to discuss a possible compromise but the other party refused the offer, pursuant to Art. 2030 of the Civil Code. If despite efforts exerted by the trial court and the parties the negotiations still fail, only then should the action continue as if no suspension had taken place.

Ostensibly, while the rules allow the trial court to suspend its proceedings consistent with the policy to encourage the use of alternative mechanisms of dispute resolution, in the instant case, the trial court only gave the parties fifteen (15) days to conclude a deal. This was, to say the least, a passive and paltry

attempt of the court a quo in its task of persuading litigants to agree upon a reasonable concession. Hence, if only to inspire confidence in the pursuit of a middle ground between petitioner and respondents, we must not interpret the trial court's Orders as dismissing the action on its own motion because the parties, specifically petitioner, were anxious to litigate their case as exhibited in their several manifestations and motions.

In fine, petitioner cannot be said to have lost interest in fighting the civil case to the end. A court may dismiss a case on the ground of non prosequitur but the real test of the judicious exercise of such power is whether under the circumstances plaintiff is chargeable with want of fitting assiduousness in not acting on his complaint with reasonable promptitude. Unless a party's conduct is so indifferent, irresponsible, contumacious or slothful as to provide substantial grounds for dismissal, i.e., equivalent to default or non-appearance in the case, the courts should consider lesser sanctions which would still amount to achieving the desired end. In the absence of a pattern or scheme to delay the disposition of the case or of a wanton failure to observe the mandatory requirement of the rules on the part of the plaintiff, as in the case at bar, courts should decide to dispense rather than wield their authority to dismiss.

Clearly, another creative remedy was available to the court a quo to attain a speedy disposition of Civil Case No. 99-518 without sacrificing the course of justice. Since the failure of petitioner to submit a compromise agreement was the refusal of just one of herein respondents, i.e., Benito Sy, to sign his name on the conforme of the loan restructure documents, and the common concern of the courts a quo was dispatch in the proceedings, the holding of a pre-trial conference was the best-suited solution to the problem as this stage in a civil action is where issues are simplified and the dispute quickly and genuinely reconciled. By means of pre-trial, the trial court is fully empowered to sway the litigants to agree upon some fair compromise.

Dismissing the civil case and compelling petitioner to re-file its complaint is a dangerous, costly and circuitous route that may end up aggravating, not resolving, the disagreement. This case management strategy is frighteningly deceptive because it does so at the expense of petitioner whose cause of action, perhaps, may have already been admitted by its adverse parties as shown by three (3) of four (4) defendants not willing to contest petitioner's allegations, and more critically, since this approach promotes the useless and thankless duplication of hard work already undertaken by the trial court. As we have aptly observed, "[i]nconsiderate dismissals, even if without prejudice, do not constitute a panacea nor a solution to the congestion of court dockets. While they lend a deceptive aura of efficiency to records of individual judges, they merely postpone the ultimate reckoning between the parties. In the absence of clear lack of merit or intention to delay, justice is better served by a brief continuance, trial on the merits, and final disposition of the cases before the court.”

City of Iligan vs. Principal Management Group, Inc.

G.R. No. 145260

July 31, 2003

Executions Pending Appeal



Facts: Mayor Franklin M. Quijano, acting for and in behalf of the City of Iligan, Requested from the Sangguinang Panlungsod, a resolution authorizing him to open a domestic Standby Letter of Credit in the amount of 14M in favor of Land Bank Realty Development Corporation and/or PNCC with the Principal Management Group as the funder. The City Council approved Quijano’s request and passed board resolutions. A MOA on a turn-key arrangement was entered into by the parties for the construction of a sports complex which upon completion will be turned over to Iligan City for acceptance and the issuance of Certificate of Acceptance and Authority to Pay to enable Land Bank Realty-PMGI to call on the SLC.

The construction site was donated by San Miguel Enterprises Inc. wherein Iligan City, as donee, would provide for all the expenses for the transfer of the occupants therein. Thereafter, the construction of the Sports Complex was stopped due to the refusal of some occupants therein to vacate for the failure of Iligan City to provide them for disturbance compensation.

Thereafter, Principal Management Group requested payment from iligan City for the portions of the project which they already finished. Iligan City on the other hand responded on the negative, stating that the agreed price of 14M will only be paid upon completion of the project.

PMGI filed a complaint for the rescission of the MOA and damages against City of Iligan. The latter then filed its answer. Nevertheless, PGMI moved for partial summary judgment claiming that there was no genuine issue as to the obligation of the City of Iligan and that the City of Iligan had not specifically denied under oath the genuiness of the Letter of Credit and the MOA.

The Trial Court granted the motion of partial summary judgment. On the other hand, City of Iligan filed a motion for reconsideration which the trial court denied. Considering that the MR by Iligan was denied, Iligan City filed a notice of appeal.

A Motion for Execution Pending Appeal was then filed by the PGMI, which was granted over the objection of Iligan City.

The Court is convinced that there are good reasons to allow the immediate execution pending appeal. Its adjudication is based on [petitioner’s] own admission hence, any appeal would be unmeritorious and would only serve to delay execution of the final order subject of the instant motion. The fact that an appeal in this case if taken by [petitioner] will be a merely dilatory tactic has been declared by the Supreme Court as a ‘good and sufficient reason upon which to issue execution’ of the order under Section 2, Rule 39 of the Revised Rules of Court.’

The CA affirmed the decision. The appellate court also ruled that certiorari would not be allowed in this case, because there were other remedies still available to petitioner, like the filing of a supersedeas bond to stay the execution or the filing of a motion for reconsideration.

Issue: Whether the Order granting execution pending appeal was proper.

Held: Yes.

Executions pending appeal are governed by Section 2 of Rule 39 of the Rules of Court, which reads:

"SEC. 2. Discretionary execution.--

(a) Execution of a judgment or a final order pending appeal. – On motion of the prevailing party with notice to the adverse party filed in the trial court while it has jurisdiction over the case and is in possession of either the original record or the record on appeal, as the case may be, at the time of the filing of such motion, said court may, in its discretion, order execution of a judgment or final order even before the expiration of the period to appeal.

"After the trial court has lost jurisdiction, the motion for execution pending appeal may be filed in the appellate court.

"Discretionary execution may only issue upon good reasons to be stated in a special order after due hearing."

There are three requisites for the execution of a judgment pending appeal: a) a motion must be filed by the prevailing party with notice to the adverse party; b) there must be good reasons for execution pending appeal; and c) the good reasons must be stated in a special order.

Execution pending appeal is, of course, the exception to the general rule. Normally, execution cannot be obtained until and unless (a) the judgment has become final and executory; (b) the right of appeal has been renounced or waived; (c) the period for appeal has lapsed without an appeal having been filed; or (d) having been filed, the appeal has been resolved and the records of the case have been returned to the court of origin -- in which case, execution shall issue as a matter of right.

On the other hand, when the period of appeal has not yet expired, the execution of a judgment should not be allowed except if, in the court’s discretion, there are good reasons therefor.

Since the execution of a judgment pending appeal is an exception to the general rule, the existence of "good reasons" is essential. These reasons must be stated in a special order, because unless these are divulged, it will be difficult to determine on appeal whether judicial discretion has been properly exercised by the lower court.

Good reasons consist of compelling circumstances that justify the immediate execution of a judgment, lest it become illusory; or the prevailing party be unable to enjoy it after the lapse of time, considering the tactics of the adverse party who may have no recourse but to delay.

In the present case, the good reason relied upon by both the trial and the appellate courts was that the partial adjudication of the case was based on petitioner’s own admission; hence, any appeal



based on that point would be unmeritorious and merely dilatory. Indeed, both courts ruled that an appeal by petitioner would only serve as "a good and sufficient reason upon which to issue execution."

The ascertainment of good reasons for execution pending appeal lies within the sound discretion of the trial court, and the appellate court will not normally disturb such finding. Intervention by the latter may be proper, if it is shown that there has been an abuse of discretion.

Like the CA, we find no abuse of discretion in the trial court’s grant of execution pending appeal. Indeed, this Court has held that a good and sufficient reason upon which to authorize immediate execution is when an appeal is clearly dilatory

VILLARUEL vs FERNANDO

Judgments

Judgments; One of the exceptions to the rule that a judgment that has acquired finality becomes immutable and unalterable and may no longer be modified in any respect except only to correct clerical errors or mistakes is when circumstances transpire after the finality of the decision rendering its execution unjust and inequitable.

FACTS: Petitioner Panfilo V. Villaruel, Jr. (petitioner) is the former Assistant Secretary of the Air Transportation Office (ATO), Department of Transportation and Communication (DOTC). Respondents Reynaldo D. Fernando, Modesto E. Abarca, Jr. (Abarca), and Marilou M. Cleofas are the Chief, Chief Administrative Assistant, and Administrative Assistant, respectively, of the Civil Aviation Training Center (CATC).

Petitioner issued a memorandum dated 27 April 1995 addressed to the respondents, detailing them to the Office of DOTC Undersecretary Primitivo C. Cal effective 2 May 1995.

On 29 April 1995, respondents wrote to DOTC Secretary Jesus B. Garcia and Undersecretary Josefina T. Lichauco through petitioner requesting for reconsideration of the detail order.

On 7 May 1995, in compliance with the detail order, respondents reported to the Office of Undersecretary Cal at DOTC.

Without acting on respondents request for reconsideration, petitioner issued a memorandum on 19 July 1995 addressed to Abarca placing him under preventive suspension for 90 days without pay pending investigation for alleged grave misconduct.

On 10 August 1995, respondents requested Secretary Garcia to lift the detail order and to order their return to their mother unit since more than 90 days had already lapsed. Respondents also sought the intervention of the Ombudsman in their case. As a result, the Ombudsman inquired from Secretary Garcia the action

taken on respondents request for reconsideration of the detail order.

On 22 November 1995, Secretary Garcia replied to the Ombudsman that he had issued a memorandum dated 9 November 1995 directing petitioner to recall respondents to their mother unit. Secretary Garcia declared that the law does not sanction the continuous detail of respondents.

Despite repeated demands by respondents, petitioner failed and refused to reinstate respondents to their mother unit. On 24 January 1996, respondents filed a Petition for Mandamus and Damages with Prayer for a Preliminary Mandatory Injunction against petitioner with the Regional Trial Court of Pasay City, which the trial court granted on February.

Meanwhile, Judge Aurora Navarette-Reciña of the trial court was appointed Chairman of the Commission on Human Rights. Consequently, the case was re-raffled and assigned to Branch 231 of the Regional Trial Court, Pasay City.On 12 April 1996, the trial court issued an order modifying the 23 February 1996 order of Judge Reciña. The trial court issued a writ of preliminary mandatory injunction ordering petitioner to comply with the 9 November 1995 order of Secretary Garcia directing petitioner to recall respondents to their mother unit until further orders by the trial court.

For petitioner’s continued failure to comply with the writ of preliminary injunction, respondents moved to cite petitioner in contempt. Respondents also moved to declare petitioner in default for not filing an answer within the period prescribed in the trial court’s order of 26 January 1996. On 28 May 1996, the trial court granted the motion and declared petitioner guilty of indirect contempt. The trial court issued a bench warrant against petitioner.

Petitioner, through the Office of the Solicitor General (OSG), filed a special civil action for certiorari with the Court of Appeals assailing the trial court’s order finding petitioner guilty of indirect contempt. Also the trial court declared petitioner in default for his failure to file an answer to the petition for mandamus and damages.

Aggrieved, petitioner, represented by the OSG, appealed to the Court of Appeals. The Court of Appeals granted respondents motion for the dismissal of the petition for certiorari for being moot and academic.

The Court of Appeals granted the OSG a non-extendible extension until 13 December 1996 within which to file petitioner’s memorandum. However, the OSG failed to file the memorandum.

On 17 February 1998, petitioner, through his new counsel, filed a Motion to Quash the Writ of Execution and to Suspend Sheriff’s Sale. In his motion, petitioner alleged that the trial court’s decision never became final and executory as the trial court deprived him of his right to due process. Petitioner claimed that



the OSG failed to file Petitioner’s memorandum in CA-G.R. SP No. 42447 resulting in the dismissal of his appeal. Furthermore, petitioner alleged that the OSG failed to inform him of the dismissal of his appeal and of the trial court’s order granting respondents’ motion for execution. Petitioner further asserted that the Resolution of the Ombudsman superseded the decision of the trial court.

The Ombudsman’s Resolution approved the following recommendation of the reviewing Assistant Ombudsman:

PREMISES CONSIDERED, respondent MODESTO ABARCA, JR., is hereby found GUILTY of violation of Section 7(d) of Republic Act 6713, for which the penalty of Suspension Without Pay for Six (6) Months is hereby recommended pursuant to Section 10(b), Rule III of Administrative Order No. 07, in relation to Section 25(2) of Republic Act No. 6770.

It is also respectfully recommended that the charge against respondents REYNALDO FERNANDO and MARY LOU CLEOFAS be DISMISSED

The Court of Appeals concurred with the trial court’s ruling that the nature of the case before the Ombudsman is different from the case before the trial court. The former deals with a violation of RA 6713office while the latter deals with an ultra vires act punished with damages. The appellate court ruled that the findings of the Ombudsman had nothing to do with the findings of the trial court, as the two forums are separate and distinct from each other.

ISSUE: Whether the resolution of the Ombudsman finding Modesto Abarca, Jr. guilty of violating Section 7 of RA 6713 rendered the execution of the trial court’s decision unjust and inequitable.

HELD: NO. The Ombudsman’s Resolution Does Not Render the Execution of the Trial CourtÊs Decision Unjust and Inequitable

Petitioner contends that the Ombudsman’s Resolution finding Abarca guilty of violating Section 7(d) of RA 6713 superseded the trial court’s decision finding petitioner liable for damages. Petitioner insists that the Ombudsman’s resolution rendered the execution of the trial court’s decision unjust and inequitable.

Settled is the rule that a judgment that has acquired finality becomes immutable and unalterable and may no longer be modified in any respect except only to correct clerical errors or mistakes. True, this rule admits of certain exceptions. One of these exceptions is whenever circumstances transpire after the finality of the decision rendering its execution unjust and inequitable. This, however, is not the case here. In the present case, the Ombudsman issued his Resolution prior to the finality of the trial court’s decision. The Ombudsman issued his Resolution on 22 January 1997 while the trial court’s decision became final and executory on 14 June 1997. Therefore, the resolution of the Ombudsman is not a supervening event to warrant the stay of the execution of the decision of the trial court.

Furthermore, the resolution of the Ombudsman finding Abarca guilty of violating Section 7(d) of RA 6713 did not and could not supersede the decision of the trial court holding petitioner liable for damages. The action filed by the petitioner before the Ombudsman is completely different from the action instituted by respondents before the trial court. The two actions, which are clearly separate and distinct from each other, presented two different causes of action. Petitioner’s cause of action arose from respondents’ alleged violation of certain provisions of RA 6713 whereas respondents’ cause of action resulted from petitioner’s refusal to recall respondents to their mother unit at CATC. In the administrative case before the Ombudsman, the issue was whether respondents were guilty of violating RA 6713. In contrast, the issue in the civil action before the trial court was whether respondents were entitled to the issuance of the writ of mandamus and damages.

Spouses JAIME and PURIFICACION MORTA vs.Judge ANTONIO C. BAGAGÑAN, Municipal Trial Court,

Guinobatan, Albay; and Sheriff DANILO O. MATIAS, Regional Trial Court, Branch 14, Ligao, Albay

A.M. NO. MTJ-03-1513NOVEMBER 12, 2003

WRITS OF EXECUTION

FACTS: In their Administrative Complaint , Spouses Jaime and Purificacion Morta Sr. charged Judge Antonio C. Bagagñan of the Municipal Trial Court of Guinobatan, Albay with gross ignorance of the law, incompetence, bias and delay in the disposition of Civil Case No. 481, entitled ‘Jaime Morta, Sr. and Purificacion Padilla vs. Jamie Occidental and Atty. Mariano Baranda, Jr.’, for Damages with Prayer for a Writ of Preliminary Injunction, and Civil Case No. 482 entitled ‘Jaime Morta, Sr. and Purificacion Padilla vs. Jamie Occidental, Atty. Mariano Baranda, Jr. and Daniel Corral’, for Damages with Prayer for a Writ of Preliminary Injunction.

Complainants, who are the plaintiffs in the aforementioned civil cases, alleged that on March 29, 1994, the Municipal Trial Court of Guinobatan, Albay rendered a decision in their favor. The defendants appealed to the Regional Trial Court which dismissed the aforesaid cases on the ground that the claims for damages are tenancy-related problems which fall under the original and exclusive jurisdiction of the Department of Agrarian Reform Adjudicatory Board (DARAB). The plaintiffs filed a petition for review with the Court of Appeals assailing the decision of the RTC. However, in its decision, the Court of Appeals affirmed the lower court’s ruling that the cases fall within the original and



exclusive jurisdiction of DARAB. Thereafter, the First Division of this Court, acting on the petition for review on certiorari filed by the plaintiffs, rendered its decision affirming the decision of the Municipal Trial Court, Guinobatan, Albay in Civil Case Nos. 481 and 482 and thereby setting aside the decision of the Court of Appeals and that of the Regional Trial Court in Civil Cases Nos. 1751 and 1752.

Complainants now alleged that despite the fact that the decision of the Supreme Court in the aforesaid case had already become final and executory, the respondent Judge still refused to issue a writ of possession in their favor.

In his Answer/Comment, respondent judge explained that he had denied complainants’ Motion for the issuance of a writ of possession because, by the time Civil Case Nos. 481 and 482 were finally decided by this Court on June 10, 1999, they had already been ousted from the lots in question pursuant to the Decisions in DARAB Case No. 2413 and Civil Case No. 1920. In Civil Case No. 1920, respondent judge ordered complainants to vacate the disputed lots. A Writ of Execution/Demolition was thereafter issued on January 29, 1998. On the other hand, the DARAB Decision, which became final and executory on October 27, 1998, directed them to cease and desist from disturbing the peaceful possession of therein petitioner Jaime Occidental.

The OCA found that the explanation of respondent judge for not granting the Motion for Execution, filed by complainants, was sufficient. According to the court administrator, the records showed that they had indeed been evicted from the lots they were claiming when Civil Case Nos. 481 and 482 were finally decided by the Supreme Court on June 10, 1999. Moreover, it emphasized that this Court had merely affirmed the Decision of the MTC insofar as the award of damages was concerned.

ISSUE: Whether execution of a final judgment may be refused.

HELD: YES. We agree with the OCA that respondent judge acted correctly in not issuing a writ of execution/possession. His action was consistent with the Decision of this Court in GR No. 123417 affirming that of the MTC as to damages. Besides, the latter’s Order directing defendants not to molest complainants in their peaceful possession was rendered moot when they were ousted from the disputed lots by virtue of the final and executory judgments in Civil Case No. 1920 and DARAB Case No. 2413. Indeed, the execution of a final judgment may be refused, as in this case, when there has been a change in the situation of the parties that would make its execution inequitable.

Serrano vs. Court of Appeals, 417 SCRA 415(2003)

WRITS OF EXECUTION; SUPERVENING FACTS

The execution of a judgment may be stayed, nothwithstanding the affirmance of the appealed judgment by the Supreme Court if there are supervening facts and circumstances which either have a direct effect upon a matter already litigated and settled or create a substantial change in the rights or relations of the parties therein which would render execution of a final judgment unjust, impossible or inequitable or when it becomes imperative in the interest of justice.

FACTS: The Spouses Serrano were the owners of a parcel of land as well as the house constructed thereon located at Road 4, Project 6, Diliman, Quezon City, covered by Transfer Certificate of Title No. 80384, and a parcel of land located in Caloocan City, covered by Transfer Certificate of Title No. 15191. The couple mortgaged the said properties in favor of the Government Service Insurance System (GSIS) as security for a loan of P50,000. By June 1969, the couple was able to pay only the amount of P18,000.

On June 23, 1969, the Spouses Serrano, as vendors, and Spouses Emilio and Evelyn Geli, as vendees, executed a deed of absolute sale with partial assumption of mortgage over the parcel of land covered by TCT No. 80384 and the house thereon for the price of P70,000. The Spouses Geli paid the amount of P38,000 in partial payment of the property, the balance of P32,000 to be paid by them to the GSIS for the account of the Spouses Serrano. The Spouses Geli thereafter took possession of the property. In the meantime, Evelyn Geli died intestate and was survived by her husband Emilio Geli and their children.

Emilio Geli and his children failed to settle the amount of P32,000 to the GSIS. The latter forthwith filed a complaint against Emilio Geli and his children with the Regional Trial Court of Quezon City for the rescission of the deed of absolute sale with partial assumption of mortgage. The defendants therein alleged, by way of special defense, that the plaintiffs Spouses Serrano failed to furnish them with a detailed statement of the account due from the GSIS, thus amounting for their failure to remit the balance of the loan to the GSIS. On September 6, 1984, the trial court rendered judgment ordering the rescission of the said deed.

Emilio Geli and his children appealed the decision to the CA on October 19, 1984. During the pendency of the appeal, the GSIS foreclosed the real estate mortgage over the property for non-payment of the P50,000 loan secured by the said property. At the sale on public auction, the GSIS was the highest bidder. A certificate of sale over the property was thereby issued by the sheriff in its favor on August 30, 1986. On October 30, 1987 and November 3, 1987, Emilio Geli paid the redemption price of P67,701.844 to the GSIS. Official Receipts Nos. 905401 and 901685 for the said amount with the notation “for the account of Arturo Serrano” were issued. Accordingly, on February 22, 1988, the GSIS executed a certificate of redemption5 and turned over to Emilio Geli the owner’s copy of TCT No. 80384 in the names of the Spouses Serrano. Emilio Geli did not inform the Spouses Serrano and the CA that he had paid the redemption price to the GSIS.

After the remand of the records, the Spouses Serrano filed with the RTC on January 14, 1994 a motion for the execution of the trial court’s September 6, 1984 Decision. On February 15, 1994, the trial court issued an order granting the motion and forthwith issued a writ of execution. The writ, however, was not implemented as the Spouses Serrano were then in the United States. On August 1, 1995, the trial court issued an alias writ of execution on motion of the plaintiffs. This, too, was not implemented, because of the defendants’ change of address. On



May 9, 1996, the trial court issued an order granting the motion of the plaintiffs for a second alias writ of execution. On September 6, 1996, the defendants filed a motion to quash the same claiming, for the first time, that defendant Emilio Geli had already redeemed the subject property in 1988 from the GSIS. According to the defendants, this constituted a supervening event that would make the execution of the trial court’s decision unjust and inequitable.

On May 19, 1997, the trial court issued an order denying the aforesaid motion of the defendants. It noted that the payment by defendant Emilio Geli of the redemption price to the GSIS took place before the CA dismissed the appeal and before the decision of the RTC became final and executory; hence, it did not constitute a supervening event warranting a quashal of the writ of execution.

The appellate court ruled that since Emilio Geli paid the redemption price for the property to the GSIS in 1987 while his appeal was pending in the CA, the said redemption was a supervening event which rendered the enforcement of the writ of execution issued by the trial court against them unjust and inequitable.

Hence, spouses Serrano appealed with the Supreme Court.

ISSUE: THE COURT A QUO COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT HELD THAT THE REDEMPTION CONSTITUTED A SUPERVENING EVENT WHICH CHANGE THE RELATIONS OF THE PARTIES, THUS RENDERING EXECUTION INEQUITABLE UNDER THE PREMISES

HELD: The Supreme Court granted the Petition. Generally, the execution upon a final judgment is a matter of right on the part of the prevailing party. It is the ministerial and mandatory duty of the trial court to enforce its own judgment once it becomes final and executory. It may happen, however, that new facts and circumstances may develop or occur after a judgment had been rendered and while an appeal therefrom is pending; or new matters had developed after the appeal has been dismissed and the appealed judgment had become final and executory, which the parties were not aware of and could not have been aware of prior to or during the trial or during the appeal, as they were not yet in existence at that time. In the first situation, any attempt to frustrate or put off the enforcement of an executory decision must fail. Once a judgment has become final and executory, the only remedy left for material attention thereof is that provided for in Rule 38 of the Rules of Court, as amended. There is no other prerequisite mode of thwarting the execution of the judgment on equitable grounds predicated on facts occurring before the finality of judgment. In the second situation, the execution may be stayed, notwithstanding the affirmance of the appealed judgment by this Court. It is required, however, that the supervening facts and circumstances must either have a direct effect upon the matter already litigated and settled or create a substantial change in the rights or relations of the parties therein which would render execution

of a final judgment unjust, impossible or inequitable or when it becomes imperative in the interest of justice. The interested party may file a motion to quash a writ of execution issued by the trial court, or ask the court to modify or alter the judgment to harmonize the same with justice and further supervening facts. Evidence may be adduced by the parties on such supervening facts or circumstances.

In this case, the payment by Emilio Geli of the amount of P67,701.84 on October 30 and November 3, 1987 to the GSIS for the account of the petitioners was made while the appeal of the private respondents from the summary judgment of the RTC was pending. The summary judgment of the RTC had not yet become final and executory. It behooved the said respondents to prosecute their appeal and file their brief, where they should have invoked the payment of the redemption price as a ground for the reversal of the trial court’s summary judgment in their favor. The respondents failed to do so, and even concealed the payment of the loan for the account of the petitioners. Worse, the respondents did not pay the requisite docket fees for their appeal, which resulted in its dismissal. The respondents even opted not to file any motion for the reconsideration of the resolution of the CA dismissing their appeal. In sum, the respondents allowed the decision of the trial court to become final and executory. Consequently, the enforcement of the summary judgment of the trial court can no longer be frustrated by the respondents’ payment, through Emilio Geli, of the amount of P67,701.84 to the GSIS in 1987.

D' ARMOURED SECURITY AND INVESTIGATION AGENCY, INC., vs. ARNULFO ORPIA, et.al.

G.R. No. 151325 June 27, 2005

PROPERTIES EXEMPT FROM EXECUTION; exemption pertains only to natural persons and not to juridical entitiesFACTS:

On February 9, 1995, respondents, who were employed as security guards by petitioner, and assigned to Fortune Tobacco, Inc. filed with the Labor Arbiter a complaint for illegal dismissal and monetary claims against petitioner and Fortune Tobacco. L.A. rendered a Decision, declaring that all the respondents except Antonio Cabangon Chua are jointly and severally liable to pay complainants P1,077,124.29 for underpayment, overtime pay, legal holiday pay, service incentive leave pay, 13th month pay, illegal deduction and refund of firearms bond, and ten 10% percent of all sums owing to complainants is hereby awarded as attorney’s fees.

Fortune Tobacco interposed an appeal to the NLRC. Petitioner did not appeal. NLRC affirmed with modification the assailed Arbiter’s Decision in the sense that the complaint against Fortune Tobacco was dismissed. This Decision became final and executory. Thus, the award specified in the Decision of the Arbiter became the sole liability of petitioner. The records were then remanded to the Arbiter for execution.



Upon respondents’ motion, the Arbiter issued a writ of execution. Eventually, the sheriff served a writ of garnishment upon the Chief Accountant of Foremost Farms, Inc., a corporation with whom petitioner has an existing services agreement. Thus, petitioner’s receivables with Foremost were garnished.

Petitioner filed with the NLRC a "Motion to Quash/Recall Writ of Execution and Garnishment" which was opposed by respondents. Arbiter denied the motion and directed the sheriff to release the garnished sum of money to respondents pro rata. The MR was likewise denied, hence, it interposed an appeal to the NLRC. NLRC dismissed the appeal for petitioner’s failure to post a bond within the reglementary period. Its MR was likewise denied. Petitioner then filed with the CA a petition for certiorari and prohibition with prayer for issuance of a writ of preliminary injunction. CA dismissed the petition. Hence, this petition for review on certiorari.

ISSUE: Whether the CA erred in holding that petitioner’s monthly receivables from the Foremost Farms, Inc. (garnishee) are not exempt from execution.

HELD: The petition lacks merit. We have ruled that an order of execution of a final and executory judgment, as in this case, is not appealable, otherwise, there would be no end to litigation. On this ground alone, the instant petition is dismissible.

Assuming that an appeal is proper, still we have to deny the instant petition. Section 1, Rule IV of the NLRC Manual on Execution of Judgment provides:

"Rule IV EXECUTION

SECTION 1. Properties exempt from execution. – Only the properties of the losing party shall be the subject of execution, except:

(a) The losing party’s family home constituted in accordance with the Civil Code or Family Code or as may be provided for by law or in the absence thereof, the homestead in which he resides, and land necessarily used in connection therewith, subject to the limits fixed by law;

(b) His necessary clothing, and that of his family;

(c) Household furniture and utensils necessary for housekeeping, and used for that purpose by the losing party such as he may select, of a value not exceeding the amount fixed by law;

(d) Provisions for individual or family use sufficient for three (3) months;

(e) The professional libraries of attorneys, judges, physicians, pharmacists, dentists, engineers, surveyors, clergymen, teachers, and other professionals, not exceeding the amount fixed by law;

(f) So much of the earnings of the losing party for his personal services within the month preceding the levy as are necessary for

the support of his family;

(g) All monies, benefits, privileges, or annuities accruing or in any manner growing out of any life insurance;

(h) Tools and instruments necessarily used by him in his trade or employment of a value not exceeding three thousand (P3,000.00) pesos;

(i) Other properties especially exempted by law."

The above Rule clearly enumerates what properties are exempt from execution. It is apparent that the exemption pertains only to natural persons and not to juridical entities. On this point, the CA correctly ruled that petitioner, being a corporate entity, does not fall within the exemption, thus:

"We cannot accede to petitioner’s position that the garnished amount is exempt from execution.

Section 13 of Rule 39 of the Rules of Court is plain and clear on what properties are exempt from execution. Section 13 (i) of the Rules pertinently reads:

‘SECTION 13. Property exempt from execution. – Except as otherwise expressly provided by law, the following property, and no other, shall be exempt from execution:x x x x x x x x x

(i) So much of the salaries, wages or earnings of the judgment obligor for his personal services within the four months preceding the levy as are necessary for the support of his family.’

The exemption under this procedural rule should be read in conjunction with the Civil Code, the substantive law which proscribes the execution of employee’s wages, thus:

‘ART. 1708. The laborer’s wage shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance.’

Obviously, the exemption under Rule 39 of the Rules of Court and Article 1708 of the New Civil Code is meant to favor only laboring men or women whose works are manual. Persons belonging to this class usually look to the reward of a day’s labor for immediate or present support, and such persons are more in need of the exemption than any other [Gaa vs. Court of Appeals, 140 SCRA 304 (1985)].

In this context, exemptions under this rule are confined only to natural persons and not to juridical entities such as petitioner. Thus, the rule speaks of salaries, wages and earning from the ‘personal services’ rendered by the judgment obligor. The rule further requires that such earnings be intended for the support of the judgment debtor’s family.

It stands to reason that only natural persons whose salaries, wages and earnings are indispensable for his own and that of his family’s support are exempted under Section 13 (i) of Rule 39 of



the Rules of Court. Undeniably, a corporate entity such as petitioner security agency is not covered by the exemption.

Perez vs. CAG.R. No. 157616

July 22, 2005Effect of Judgments

Facts:

The spouses Digos, secured a loan from the International Exchange Bank to finance their project for the construction of townhouses. To secure the payment of the loan, the spouses Digos executed a Real Estate Mortgage (REM) over the said property. The construction was delayed resulting to the failure of Sps. Digos to pay their loan which subsequently caused the extrajudicial foreclosure of their REM. Consequently, the property was sold at public auction, with the bank as the highest bidder at P4,500,000.00, which appeared to be the account of the spouses Digos at the time. The Certificate of Sale executed by the sheriff was, thereafter, registered at the Office of the Register of Deeds.

When the period to redeem the property was about to expire, sps. Digos ask for an extension from the bank to redeem property, to which the bank after previous refusal agreed to one month extension. However, instead of repurchasing said property, the spouses filed a complaint for the nullification of the extrajudicial foreclosure of the real estate mortgage and sale at public auction and/or redemption of the property against the bank. The latter filed a motion to dismiss which was granted by the trial court.

Thereafter the bank sold the questioned property to petitioners. Subsequently, another complaint was filed by Sps. Digos against the bank, Perez and Ragua, for the cancellation and annulment of the extrajudicial foreclosure of the real estate mortgage executed by them in favor of the bank, the sale at public auction as well as the certificate of sale executed by the sheriff, and the Torrens title issued to them.

The Digos reiterated their allegations in their first complaint that they were not notified of the sale at public auction, and that the banks P4,500,000.00 bid for the property was unconscionably low compared to the prevailing market price of P25,000,000.00. They also admitted their failure to pay their amortization on their loans. However, they alleged this time that the extrajudicial foreclosure of the real estate mortgage and the sale at public auction were illegal because the bank charged much more than the amount due on their loan account, to wit: interest of 26% per annum on the loan account covering January 2, 1998, whereas under the promissory note executed in favor of the bank, the new interest rate should commence only on March 4, 1993; penalty charges of 26% of the account, and 5% penalty charges on top of the 26% interest per annum, as shown by the banks statement of account. The spouses Digos also averred that although they pleaded for a restructuring of their loan account and a moratorium on the payment of their account, they were unaware of the erroneous computation of the balance of their loan account. They maintained that the banks consolidation of its title over the property on September 19, 1999 was premature because they were given until October 8, 1999 to redeem the property.

Perez and Ragua filed a motion to dismiss on similar grounds of res judicata, splitting of a single cause of action and

forum shopping, which the trial court denied. The MR was also denied.

Upon elevation to via certiorari (rule 65), the CA rendered judgment dismissing the petition and affirming the assailed orders. The appellate court declared that there was no identity of causes of action in the two cases because the first action was one for injunction and redemption of the property, whereas the second action was for the nullification of the extrajudicial foreclosure of the real estate mortgage and the sale at public auction due to the erroneous computation of the balance on the respondents account with the bank; hence, the spouses Digos were not estopped from filing their second action. The petitioners filed a motion for a reconsideration of the said decision, which the appellate court denied.

Issue: Whether or not the judgment in the first case is res judicata to the second case.

Held: Yes. Splitting a single cause of action consists in dividing a single or indivisible cause of action into several parts or claims and instituting two or more actions therein. A single cause of action or entire claim or demand cannot be split up or divided so as to be made the subject of two or more different actions.

A single act or omission may be violative of various rights at the same time, such as when the act constitutes a violation of separate and distinct legal obligations. The violation of each of these rights is a cause of action in itself. However, if only one right may be violated by several acts or omissions, there would only be one cause of action. Otherwise stated, if two separate and distinct primary rights are violated by one and the same wrong; or if the single primary right should be violated by two distinct and separate legal wrongs; or when the two primary rights are each broken by a separate and distinct wrongs; in either case, two causes of action would result. Causes of action which are distinct and independent, although arising out of the same contract, transaction or state of fact may be sued separately, recovery on one being no bar to subsequent actions on the others.

The mere fact that the same relief is sought in the subsequent action will not render the judgment in the prior action as res judicata. Causes of action are not distinguishable for purposes of res judicata by difference in the claims for relief.

Comparing the material averments of the two complaints, it would appear that separate primary rights of the respondents were violated by the banks institution of a petition for extrajudicial foreclosure of the real estate mortgage and the sale at public auction; hence, the respondents had separate and independent causes of action against the bank, to wit: (a) the first complaint relates to the violation by the bank of the right to a judicial, not extrajudicial, foreclosure of the real estate mortgage and for an extension of the period for the respondents to redeem the property with damages; (b) the second complaint relates to the breach by the bank of its loan contract with the respondents by causing the extrajudicial foreclosure of the real estate mortgage for P4,500,000.00 which was in excess of their unpaid account with the bank.

However, we are convinced that the institution by the respondents of their second complaint anchored on their claim that the bank breached its loan contracts with them by erroneously computing the actual and correct balance of their



account when the petition for extrajudicial foreclosure of the real estate mortgage was filed by it designed to avert the dismissal of their complaint due to splitting causes of action and res judicata, following the dismissal of their first complaint and the dismissal of their appeal through their negligence. The Court is constrained to conclude that this was a last-ditch attempt to resuscitate their lost cause, a brazen violation of the principle of res judicata.

Section 49(b)(c), Rule 39 of the Rules of Court provides in part:

SEC. 49. Effect of judgments. The effect of a judgment or final order rendered by a court or judge of the Philippines, having jurisdiction to pronounce the judgment or order, may be as follows:

(b) In other cases the judgment or order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity.

(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former judgment which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto.

Section 49(b) enunciates the first concept of res judicata, known as bar by prior judgment or estoppel by judgment, which refers to a theory or matter that has been definitely and finally settled on its merits by a court of competent jurisdiction without fraud or collusion.

There are four (4) essential requisites which must concur for the application of this doctrine:

(a) finality of the former judgment;

(b) the court which rendered it had jurisdiction over the subject matter and the parties;

(c) it must be a judgment on the merits; and

(d) there must be, between the first and second actions, identity of parties, subject matter and causes of action.[31]

A judgment or order is on the merits of the case when it determines the rights and liabilities of the parties based on the ultimate facts as disclosed by the pleadings or issues presented for trial. It is not necessary that a trial, actual hearing or argument on the facts of the case ensued. For as long as the parties had the full legal opportunity to be heard on their respective claims and contentions, the judgment or order is on the merits. An order of the trial court on the ground that the complaint does not state a cause of action is a determination of the case on its merits. Such order whether right or wrong bars another action based upon the same cause of action. The operation of the order as res judicata is not affected by a mere

right of appeal where the appeal has not been taken or by an appeal which never has been perfected.

Indeed, absolute identity of parties is not a condition sine qua non for the application of res judicata. It is sufficient that there is a shared identity of interest. The rule is that, even if new parties are found in the second action, res judicata still applies if the party against whom the judgment is offered in evidence was a party in the first action; otherwise, a case can always be renewed by the mere expedience of joining new parties in the new suit.

The ultimate test to ascertain identity of causes of action is whether or not the same evidence fully supports and establishes both the first and second cases. The application of the doctrine of res judicata cannot be excused by merely varying the form of the action or engaging a different method of presenting the issue.

Section 49(c) of Rule 39 enumerates the concept of conclusiveness of judgment. This is the second branch, otherwise known as collateral estoppel or estoppel by verdict. This applies where, between the first case wherein judgment is rendered and the second case wherein such judgment is involved, there is no identity of causes of action. As explained by this Court:

It has been held that in order that a judgment in one action can be conclusive as to a particular matter in another action between the same parties or their privies, it is essential that the issues be identical. If a particular point or question is in issue in the second action, and the judgment will depend on the determination of that particular point or question, a former judgment between the same parties will be final and conclusive in the second if that same point or question was in issue and adjudicated in the first suit; but the adjudication of an issue in the first case is not conclusive of an entirely different and distinct issue arising in the second. In order that this rule may be applied, it must clearly and positively appear, either from the record itself or by the aid of competent extrinsic evidence that the precise point or question in issue in the second suit was involved and decided in the first. And in determining whether a given question was an issue in the prior action, it is proper to look behind the judgment to ascertain whether the evidence necessary to sustain a judgment in the second action would have authorized a judgment for the same party in the first action.

In the present case, before the private respondents filed their first complaint, they already knew that the balance of their account with the bank was P4,500,000.00. They even offered to make a P1,000,000.00 partial payment of their loan to reduce their account to P3,500,000.00.

If indeed the bank made an erroneous computation of the balance of their account as claimed by the private respondents in their second complaint, this should have been alleged in the first complaint as one of their causes of action. They failed to do so. The private respondents unequivocably admitted in their first complaint that the balance of their account with the bank was P4,500,000.00 which was the precise amount for which the bank sought the foreclosure of the real estate mortgage and the sale of the property at public auction; they even sought judicial recourse to enable them to redeem the property despite the lapse of the one-year period therefor.


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Relying on these admissions on the part of the private respondents, and the fact that the bank has already consolidated its title over the property, the Court thus dismissed their first complaint. The Order of the Court dismissing the first complaint is a judgment of the case on the merits.

The attempt of the respondents in their second complaint to avoid the application of the principle of res judicata by claiming the nature of their account on the ground therefor and their legal theory cannot prosper. Case law has it that where a right, question or fact is distinctly put in issue and directly determined by a court of competent jurisdiction in a first case, between the same parties or their privies, the former adjudication of that fact, right or question is binding on the parties or their privies in a second suit irrespective of whether the causes of action are the same. The ruling of the CA that the action of the private respondents and their legal theory in their second complaint were different from their causes of action and legal theory in the first complaint is not correct. A different cause of action is one that proceeds not only on a sufficiently different legal theory, but also on a different factual footing as not to require the trial of facts material to the former suit; that is, an action that can be maintained even if all disputed factual issues raised in the plaintiffs original complaint are concluded in defendants favor.

In this case, the private respondents second complaint cannot be maintained without trying the facts material to the first case, and the second case cannot be maintained if all the disputed factual issues raised in the first complaint are considered in favor of the bank.

The principle of res judicata applies when the opportunity to raise an issue in the first complaint exists but the plaintiff failed to do so. Indeed, if the pleading of a different legal theory would have convinced the trial court to decide a particular issue in the first action which, with the use of diligence the plaintiffs could have raised therein but failed to do so, they are barred by res judicata. Nor do legal theories operate to constitute a cause of action. New legal theories do not amount to a new cause of action so as to defeat the application of the principle ofres judicata.

Indeed, in Siegel v. Knott, it was held that the statement of a different form of liability is not a different cause of action, provided it grows out of the same transaction or act and seeks redress for the wrong. Two actions are not necessarily for different causes of action simply because the theory of the second would not have been open under the pleadings in the first. A party cannot preserve the right to bring a second action after the loss of the first, merely by having circumscribed and limited theories of recovery opened by the pleadings in the first.

It bears stressing that a party cannot divide the grounds for recovery. A plaintiff is mandated to place in issue in his pleading, all the issues existing when the suit began. A lawsuit cannot be tried piecemeal. The plaintiff is bound to set forth in his first action every ground for relief which he claims to exist and upon which he relied, and cannot be permitted to rely upon them by piecemeal in successive action to recover for the same wrong or injury.

A party seeking to enforce a claim, legal or equitable, must present to the court, either by the pleadings or proofs, or both, on the grounds upon which to expect a judgment in his favor. He is not at liberty to split up his demands, and prosecute it by piecemeal or present only a portion of the grounds upon which a

special relief is sought and leave the rest to the presentment in a second suit if the first fails. There would be no end to litigation if such piecemeal presentation is allowed.

FAR EAST BANK AND TRUST CO. (now BANK OF THE PHILIPPINE ISLANDS), vs. TOMAS TOH, SR., AND REGIONAL

TRIAL COURT, MANDALUYONG CITY, BRANCH 214G.R. No. 144018. June 23, 2003. SECOND DIVISION.

QUISUMBING

EXECUTION PENDING APPEAL ON THE GROUND OF ADVANCED AGE

FACTS: On August 29, 1997, Private respondent Tomas Toh, Sr., together with his sons, Tomas Tan Toh, Jr., and Antonio Tan Toh executed a Comprehensive Security Agreement in favor of petitioner, wherein the Tohs jointly and severally bound themselves as sureties for the P22 million credit facilities, denominated as Omnibus Line and Bills Purchased Line, to Catmon Sales International Corporation (CASICO). Said credit line expired on June 30, 1998, but the parties renewed the same for another year, subject to the following amendments: (1) a reduction in the credit line from P22 million to P7.5 million; and (2) the relief of Toh, Sr., as one of the sureties of CASICO.

On March 17, 1999, Toh Sr. sued petitioner for the recovery of his bank deposits with petitioner in the amount of P2,560,644.68 plus damages. He claimed that petitioner had debited, without his knowledge and consent, said amount from his savings and current accounts with petitioner bank and then applied the money as payment for the Letters of Credit availed of by Catmon Sales International Corporation (CASICO) from petitioner. Thus, when Toh issued two checks to Anton Construction Supply, Inc., they were dishonored by FEBTCO allegedly for having been drawn against insufficient funds.

Petitioner bank, in its answer averred that the debiting of Tohs bank accounts was justified due to his surety undertaking in the event of the default of CASICO in its payments.

On July 30, 1999, private respondent filed a Motion for Judgment on the Pleadings, which the lower court granted. Thereafter, Toh Sr. filed a Motion for Discretionary Execution by invoking Section 2, Rule 39 of the Revised Rules of Court. He prayed that execution pending appeal be granted on the ground of old age and the probability that he may not be able to enjoy his money deposited in petitioners bank. The RTC granted private respondents Motion for Discretionary Execution.

Petitioner without filing a motion for reconsideration of the trial courts order brought the matter to the CA in a special civil action for certiorari. The CA dismissed it. Petitioner’s Motion for Reconsideration was also denied. Hence this appeal. ISSUE: WON THE GRANT OF EXECUTION PENDING APPEAL ON THE GROUND OF ADVANCED AGE OF PRIVATE RESPONDENT TOMAS TOH, SR. IS PROPER.

RULING: Yes. The grant of execution pending appeal on the ground of advanced age of private respondent Tomas Toh, Sr. is proper as it is well within the sound discretion of the trial court.

Discretionary execution is permissible only when good reasons exist for immediately executing the judgment before finality or pending appeal or even before the expiration of the time to



appeal. Good reasons are compelling circumstances justifying the immediate execution lest judgment becomes illusory, or the prevailing party may, after the lapse of time, become unable to enjoy it, considering the tactics of the adverse party who may apparently have no case except to delay.

The Rules of Court does not state, enumerate, or give examples of good reasons to justify execution. The determination of what is a good reason must, necessarily, be addressed to the sound discretion of the trial court. In other words, the issuance of the writ of execution must necessarily be controlled by the judgment of the judge in accordance with his own conscience and by a sense of justice and equity, free from the control of anothers judgment or conscience. It must be so for discretion implies the absence of a hard and fast rule.

In this case, the trial court granted private respondents motion for discretionary execution due to his advanced age, citing our ruling in De Leon v. Soriano. It concluded that old age is a good reason to allow execution pending appeal as any delay in the final disposition of the present case may deny private respondent of his right to enjoy fully the money he has with defendant bank. The Court of Appeals found said ruling in conformity with sound logical precepts, inspired as it is by the probability that the lapse of time would render the ultimate judgment ineffective. It further stressed that the trial court was in the vantage position to determine whether private respondents advanced age and state of health would merit the execution private respondent prayed for.

In De Leon, the SC upheld immediate execution of judgment in favor of a 75-year-old woman. It ruled that her need of and right to immediate execution of the decision in her favor amply satisfied the requirement of a paramount and compelling reason of urgency and justice, outweighing the security offered by the supersedeas bond. In the subsequent case of Borja v. Court of Appeals, the SC likewise allowed execution pending appeal in favor of a 76 year-old man on the ground that the appeal will take years to decide with finality, and he might very well be facing a different judgment from a Court higher than any earthly tribunal and the decision on his complaint, even if it be in his favor, would have become meaningless as far as he himself was concerned.

In the present case, private respondent Toh is already 79 years old. It cannot, by any stretch of imagination, be denied that he is already of advanced age. Not a few might be fortunate to live beyond 79 years. But no one could claim with certainty that his tribe would be always blessed with long life.

Private respondent obtained a favorable judgment in the trial court. But that judgment is still on appeal before the CA. It might even reach the SC before the controversy is finally resolved with finality. As well said in Borja, while we may not agree that a man of his years is practically moribund, the Court can appreciate his apprehension that he will not be long for this world and may not enjoy the fruit of the judgment before he finally passes away.

PANOTES VS CITY TOWNHOUSE DEVELOPMENT CORPORATION

FACTS: Panotes is the president of the Provident Village Homeowners Association, Inc.. He filed a complaint before the National Housing Authority (NHA) against Provident Securities

Corporation (PROSECOR), owner-developer of the Provident Village in Marikina City. The complaint alleges that PROSECOR violated some of the provisions of Presidential Decree (P.D.) No. 957, one of which is its failure to provide an open space in the said subdivision. Later in a Resolution, the NHA directed PROSECOR to provide the Provident Village an open space which is Block 40. PROSECOR did not appeal the said resolution hence the same became final and executory. Panotes then filed a motion for execution of the NHA Resolution. However it was found that the records of the case were mysteriously missing. Hence, his motion was provisionally dismissed without prejudice. Meanwhile, PROSECOR sold to City Townhouse Development Corporation (CTDC), respondent, several lots in the subdivision. Among the lots sold were those comprising Block 40. CTDC was unaware of the NHA Resolution ordering PROSECOR to have Block 40 utilized as open space of Provident Village.

When Panotes was succeeded by Araceli Bumatay as president of the Provident Village Homeowners Association, she filed with the Housing and Land Use Regulatory Board (HLURB) a complaint for revival of the NHA Resolution. Impleaded therein as defendant was CTDC, whom she alleged as successor-in-interest of PROSECOR. Later HLURB rendered its Decision in favor of Bumatay, reviving the NHA Resolution and declaring Block 40 of the Provident Village as open space for the said subdivision. Said decision was affirmed by HLURB Board of Commissioners and the Office of the President. CTDC went to the CA which in turn reversed the decision of the Office of the President.

ISSUE: Whether the NHA Resolution dated August 14, 1980 may be enforced against CTDC.

HELD: No. An action for revival of judgment is no more than a procedural means of securing the execution of a previous judgment which has become dormant after the passage of five years without it being executed upon motion of the prevailing party. It is not intended to re-open any issue affecting the merits of the judgment debtors case nor the propriety or correctness of the first judgment.

Here, the original judgment or the NHA Resolution sought to be revived was between Rogelio Panotes and PROSECOR, not between petitioner Araceli Bumatay and respondent CTDC, the latter not being the successor-in-interest of PROSECOR.

Furthermore, strangers to a case, like CTDC, are not bound by the judgment rendered by a court. It will not divest the rights of a party who has not and never been a party to a litigation. Execution of a judgment can be issued only against a party to the action and not against one who did not have his day in court.

STRONGHOLD INSURANCE COMPANY, INC., vs.HONORABLE NEMESIO S. FELIX, in his capacity as Presiding

Judge of Branch 56, Regional Trial Court, Makati City, RICHARD C. JAMORA, Branch Clerk of Court, and EMERITA

GARON, G.R. No. 148090November 28, 2006

EXECUTION PENDING APPEAL; REQUISITES



FACTS: The private respondent Emerita Garon ("Garon") filed an action for sum of money docketed as against Project Movers Realty and Development Corporation ("Project Movers") and Stronghold Insurance Company, Inc. ("Stronghold Insurance").

In an Order dated 19 September 2000, the Regional Trial Court of Makati City, Branch 564 ("trial court") granted Garon’s motion for summary judgment, which included that all other claims and counter-claims of the parties are hereby ordered dismissed.

On 6 October 2000, Garon filed a motion for execution

pending appeal. On 10 October 2000, Stronghold Insurance moved for the reconsideration of the 19 September 2000 Order of the trial court and in an Order dated 23 January 2001, the trial court denied Stronghold Insurance’s motion for reconsideration for lack of merit.

In an Order dated 8 February 2001, the trial court granted Garon’s motion for execution pending appeal. The trial court ordered Garon to post a bond of P20 million to answer for any damage that Project Movers and Stronghold Insurance may sustain by reason of the execution pending appeal. On 14 February 2001, Branch Clerk of Court Richard C. Jamora ("Jamora") issued a writ of execution pending appeal.

On 16 February 2001, Stronghold Insurance filed a notice of appeal. Stronghold Insurance also filed a petition for certiorari before the Court of Appeals to assail the trial court’s 8 February 2001 Order and the writ of execution pending appeal. In its Resolution8 of 23 February 2001, the Court of Appeals enjoined the trial court, Jamora and Garon from enforcing the 8 February 2001 Order. However, it turned out that notices of garnishment had been served before the Court of Appeals issued the temporary restraining order (TRO). In its Order9 dated 7 March 2001, the trial court denied Stronghold Insurance’s Urgent Motion for the recall of the notices of garnishment.

ISSUE: Whether or not there are good reasons to justify execution pending appeal.

HELD:

No. In granting the motion for execution pending appeal, the trial court ruled:

A perusal of [t]he records of the instant case will sustain plaintiff’s claim that defendants raised no valid or meritorious defenses against the claims of plaintiff. The Court notes with interest the fact that defendants admitted the genuineness and due execution of the Promissory Notes and Surety Agreement sued upon in this case.

We agree with Stronghold Insurance that Garon failed to present good reasons to justify execution pending appeal. The situations in the cases cited by the trial court are not similar to this case. In Ma-Ao Sugar Central Co., Inc. v. Cañete, Cañete filed an action for compensation for his illness. The Workmen’s Compensation Commission found the illness compensable. Considering Cañete’s physical condition and the Court’s finding

that he was in constant danger of death, the Court allowed execution pending appeal. In De Leon, et al. v. Soriano, et al., De Leon, et al. defaulted on an agreement that was peculiarly personal to Asuncion. The agreement was valid only during Asuncion’s lifetime. The Court considered that Soriano’s health was delicate and she was 75 years old at that time. Hence, execution pending appeal was justified. In this case, it was not Garon, but her husband, who was ill.

The posting of a bond, standing alone and absent the good reasons required under Section 2, Rule 39 of the Rules, is not enough to allow execution pending appeal. The mere filing of a bond by a successful party is not a good reason to justify execution pending appeal as a combination of circumstances is the dominant consideration which impels the grant of immediate execution. The bond is only an additional factor for the protection of the defendant’s creditor.

The requisites for the grant of an execution of a judgment pending appeal are the following:

(a) there must be a motion by the prevailing party with notice to the adverse party;

(b) there must be good reasons for execution pending appeal;

(c) the good reasons must be stated in the special order.

As a discretionary execution, execution pending appeal is permissible only when good reasons exist for immediately executing the judgment before finality or pending appeal or even before the expiration of the period to appeal. Good reasons, special, important, pressing reasons must exist to justify execution pending appeal; otherwise, instead of an instrument of solicitude and justice, it may well become a tool of oppression and inequality. Good reasons consist of exceptional circumstances of such urgency as to outweigh the injury or damage that the losing party may suffer should the appealed judgment be reversed later.

Fujiki v Marinay

G.R. No. 196049 June 26, 2013

Rule 39 Sec 48 : Foreign Judgments- A recognition of a foreign judgment is not an action to nullify a marriage. It is an action for Philippine courts to recognize the effectivity of a foreign judgment, which presupposes a case which was already tried and decided under foreign law.

FACTS: Petitioner Minoru Fujiki (Fujiki) is a Japanese national who married respondent Maria Paz Galela Marinay (Marinay) in the Philippines on 23 January 2004. The marriage did not sit well with petitioner’s parents. Thus, Fujiki could not bring his wife to Japan where he resides. Eventually, they lost contact with each other.

In 2008, Marinay met another Japanese, Shinichi Maekara (Maekara). Without the first marriage being dissolved, Marinay and Maekara were married on 15 May 2008 in Q.C. Maekara brought Marinay to Japan. However, Marinay allegedly suffered


http://www.lawphil.net/judjuris/juri2006/nov2006/gr_148090_2006.html#fnt9




physical abuse from Maekara. She left Maekara and started to contact Fujiki. Fujiki and Marinay met in Japan and they were able to reestablish their relationship.

In 2010, Fujiki helped Marinay obtain a judgment from a family court in Japan which declared the marriage between Marinay and Maekara void on the ground of bigamy. On 14 January 2011, Fujiki filed a petition in the RTC entitled: “Judicial Recognition of Foreign Judgment (or Decree of Absolute Nullity of Marriage) praying that (1) the Japanese Family Court judgment be recognized; (2) that the bigamous marriage between Marinay and Maekara be declared void ab initio under Articles 35(4) and 41 of the Family Code of the Philippines; and (3) for the RTC to direct the Local Civil Registrar of Quezon City to annotate the Japanese Family Court judgment on the Certificate of Marriage between Marinay and Maekara and to endorse such annotation to the Office of the Administrator and Civil Registrar General in the National Statistics Office (NSO).

RTC dismissed the petition. SolGen agreed the petition.Fujiki' s MR was denied. Thus, a direct recourse to SC from RTC under Rule 45 on a pure question of law.

ISSUE: Whether the Regional Trial Court can recognize the foreign judgment in a proceeding for cancellation or correction of entries in the Civil Registry under Rule 108 of the Rules of Court.

HELD: Yes. However, the effect of a foreign judgment is not automatic. To extend the effect of a foreign judgment in the Philippines, Philippine courts must determine if the foreign judgment is consistent with domestic public policy and other mandatory laws. For Philippine courts to recognize a foreign judgment relating to the status of a marriage where one of the parties is a citizen of a foreign country, the petitioner only needs to prove the foreign judgment as a fact under the Rules of Court. To be more specific, a copy of the foreign judgment may be admitted in evidence and proven as a fact under Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b) of the Rules of Court. Petitioner may prove the Japanese Family Court judgment through (1) an official publication or (2) a certification or copy attested by the officer who has custody of the judgment. If the office which has custody is in a foreign country such as Japan, the certification may be made by the proper diplomatic or consular officer of the Philippine foreign service in Japan and authenticated by the seal of office.

A petition to recognize a foreign judgment declaring a marriage void does not require relitigation under a Philippine court of the case as if it were a new petition for declaration of nullity of marriage. Section 48(b), Rule 39 of the Rules of Court provides that a foreign judgment or final order against a person creates a “presumptive evidence of a right as between the parties and their successors in interest by a subsequent title.” Moreover, Section 48 of the Rules of Court states that “the judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.” Thus, Philippine courts exercise limited review on foreign judgments.

Courts are not allowed to delve into the merits of a foreign judgment. Once a foreign judgment is admitted and proven in a Philippine court, it can only be repelled on grounds external to its merits, i.e., “want of jurisdiction, want of notice to the party,

collusion, fraud, or clear mistake of law or fact.” The rule on limited review embodies the policy of efficiency and the protection of party expectations, as well as respecting the jurisdiction of other states.

RIZAL COMMERCIAL BANKING CORPORATION, vs. FEDERICO A. SERRA

G.R. No. 203241.July 10, 2013. SECOND DIVISION. CARPIO.

Final and executory judgment may be executed by motion within five years; Exception

FACTS: Respondent Federico A. Serra (Serra) and petitioner Rizal Commercial Banking Corporation (RCBC) entered into a Contract of Lease with Option to Buy wherein Serra agreed to lease his land in Masbate to RCBC for 25 years.

However, when RCBC informed Serra of its decision to exercise its option to buy the property, the latter replied that he was no longer interested in selling the property. Thus, RCBC filed a Complaint for Specific Performance and Damages against Serra in the RTC Makati which ordered Serra to execute and deliver the proper deed of sale in favor of RCBC. Serra appealed to the CA.

Meanwhile, Serra donated the property to his mother, Leonida Ablao who subsequently sold the same to Hermanito Liok. A new land title was issued in favor of Liok. Thus, RCBC filed a Complaint for Nullification of Deed of Donation and Deed of Sale with Reconveyance and Damages against Liok, Ablao and Serra before the RTC of Masbate City.

The CA, and later the Supreme Court, affirmed the order of the RTC Makati in the Specific Performance case. On 15 April 1994, the decision in the Specific Performance case became final and executory upon entry of judgment.

On 22 October 2001, the RTC Masbate ruled in favor of RCBC, declaring the donation in favor of Ablao and the subsequent sale to Liok null and void. In a Decision dated 28 September 2007, the CA affirmed the RTC Masbate decision. Thus, Liok filed a Petition for Review on Certiorari, while Serra and Ablao filed a Petition for Certiorari before the SC. In separate Resolutions dated 30 June 2008 and 22 October 2008, which became final and executory on 27 August 20087 and 3 March 2009, respectively, the SC found neither reversible error nor grave abuse of discretion on the CA’s part.

On 25 August 2011, RCBC moved for the execution of the decision in the Specific Performance case. This was opposed by Serra arguing that the motion for execution was already barred by prescription and laches, and that RCBC was at fault for failing to register as lien in the original title the Contract of Lease with Option to Buy. The RTC Makati denied RCBC’s motion for execution. RCBC’s motion for reconsideration was likewise denied. Thus, RCBC filed this petition.

ISSUE:

WON RCBC’s motion for execution was already barred by prescription and laches.

RULING:

No. The Rules of Court provide that a final and executory judgment may be executed by motion within five years from the



date of its entry or by an action after the lapse of five years and before prescription sets in. This rule, however, admits of exceptions as when execution may be made by motion even after the lapse of five years. These exceptions have one common denominator: the delay is caused or occasioned by actions of the judgment obligor and/or is incurred for his benefit or advantage.

In Camacho v. Court of Appeals, the SC held that where the delays were occasioned by the judgment debtor’s own initiatives and for her advantage as well as beyond the judgment creditor’s control, the five-year period allowed for enforcement of the judgment by motion is deemed to have been effectively interrupted or suspended.

In the present case, there is no dispute that RCBC seeks to enforce the decision which became final and executory on 15 April 1994. This decision orders Serra to execute and deliver the proper deed of sale in favor of RCBC. However, to evade his obligation to RCBC, Serra transferred the property to his mother Ablao, who then transferred it to Liok. Serra’s action prompted RCBC to file the Annulment case. Clearly, the delay in the execution of the decision was caused by Serra for his own advantage. Thus, the pendency of the Annulment case effectively suspended the five-year period to enforce through a motion the decision in the Specific Performance case. Since the decision in the Annulment case attained finality on 3 March 2009 and RCBC’s motion for execution was filed on 25 August 2011, RCBC’s motion is deemed filed within the five-year period for enforcement of a decision through a motion.

The purpose of prescribing time limitations for enforcing judgments is to prevent parties from sleeping on their rights. Far from sleeping on its rights, RCBC has pursued persistently its action against Serra in accordance with law. On the other hand, Serra has continued to evade his obligation by raising issues of technicality. While strict compliance with the rules of procedure is desired, liberal interpretation is warranted in cases where a strict enforcement of the rules will not serve the ends of justice.

HEIRS OF MAGDALENO YPON, NAMELY, ALVARO YPON, ERUDITA Y. BARON, CICERO YPON, WILSON YPON, VICTOR

YPON, AND HINIDINO Y. PEÑALOSA vs. GAUDIOSO PONTERAS RICAFORTE A.K.A. "GAUDIOSO E. YPON," AND

THE REGISTER OF DEEDS OF TOLEDO CITYG.R. No. 198680 July 8, 2013

FACTS: On July 29, 2010, petitioners, together with some of their cousins, filed a complaint for Cancellation of Title and Reconveyance with Damages against respondent Gaudioso alleging that Magdaleno Ypon died intestate and childless on June 28, 1968, leaving behind Lot Nos. 2-AA, 2-C, 2-F, and 2-J. Claiming to be the sole heir of Magdaleno, Gaudioso executed an Affidavit of Self-Adjudication and caused the cancellation of the certificates of title, leading to their subsequent transfer in his name to the prejudice of petitioners who are Magdaleno’s collateral relatives and successors-in-interest.

In his Answer, Gaudioso alleged that he is the lawful son of Magdaleno as evidenced by: (a) his certificate of Live Birth; (b) two (2) letters from Polytechnic School; and (c) a certified true copy of his passport. Further, by way of affirmative defense, he claimed that: (a) petitioners have no cause of action against him;

(b) the complaint fails to state a cause of action; and (c) the case is not prosecuted by the real parties-in-interest, as there is no showing that the petitioners have been judicially declared as Magdaleno’s lawful heirs.

RTC found that the subject complaint failed to state a cause of action against Gaudioso. The plaintiffs therein filed a motion for reconsideration which was denied due to the counsel’s failure to state the date on which his Mandatory Continuing Legal Education Certificate of Compliance was issued. Petitioners, who were among the plaintiffs in Civil Case No. T-2246, sought direct recourse to the Court through the instant petition.

ISSUE: Whether or not the RTC’s dismissal of the case on the ground that the subject complaint failed to state a cause of action was proper.

HELD: The petition has no merit.

Cause of action is defined as the act or omission by which a party violates a right of another. It is well-settled that the existence of a cause of action is determined by the allegations in the complaint. In this relation, a complaint is said to assert a sufficient cause of action if, admitting what appears solely on its face to be correct, the plaintiff would be entitled to the relief prayed for. Accordingly, if the allegations furnish sufficient basis by which the complaint can be maintained, the same should not be dismissed, regardless of the defenses that may be averred by the defendants.

As stated in the subject complaint, petitioners, who were among the plaintiffs therein, alleged that they are the lawful heirs of Magdaleno and based on the same, prayed that the Affidavit of Self-Adjudication executed by Gaudioso be declared null and void and that the transfer certificates of title issued in the latter’s favor be cancelled. While the foregoing allegations, if admitted to be true, would consequently warrant the reliefs sought for in the said complaint, the rule that the determination of a decedent’s lawful heirs should be made in the corresponding special proceeding precludes the RTC, in an ordinary action for cancellation of title and reconveyance, from granting the same.

Jurisprudence dictates that the determination of who are the legal heirs of the deceased must be made in the proper special proceedings in court, and not in an ordinary suit for recovery of ownership and possession of property. This must take precedence over the action for recovery of possession and ownership. The Court has consistently ruled that the trial court cannot make a declaration of heirship in the civil action for the reason that such a declaration can only be made in a special proceeding. Under Section 3, Rule 1 of the 1997 Revised Rules of Court, a civil action is defined as one by which a party sues another for the enforcement or protection of a right, or the prevention or redress of a wrong while a special proceeding is a remedy by which a party seeks to establish a status, a right, or a particular fact. It is then decisively clear that the declaration of heirship can be made only in a special proceeding inasmuch as the petitioners here are seeking the establishment of a status or right.

In the early case of Litam, et al. v. Rivera, this Court ruled that the declaration of heirship must be made in a special proceeding, and not in an independent civil action.



By way of exception, the need to institute a separate special proceeding for the determination of heirship may be dispensed with for the sake of practicality, as when the parties in the civil case had voluntarily submitted the issue to the trial court and already presented their evidence regarding the issue of heirship, and the RTC had consequently rendered judgment thereon, or when a special proceeding had been instituted but had been finally closed and terminated, and hence, cannot be re-opened.In this case, none of the foregoing exceptions, or those of similar nature, appear to exist. Hence, there lies the need to institute the proper special proceeding in order to determine the heirship of the parties involved, ultimately resulting to the dismissal of Civil Case No. T-2246.

Verily, while a court usually focuses on the complaint in determining whether the same fails to state a cause of action, a court cannot disregard decisions material to the proper appreciation of the questions before it.25 Thus, concordant with applicable jurisprudence, since a determination of heirship cannot be made in an ordinary action for recovery of ownership and/or possession, the dismissal of Civil Case No. T-2246 was altogether proper. In this light, it must be pointed out that the RTC erred in ruling on Gaudioso’s heirship which should, as herein discussed, be threshed out and determined in the proper special proceeding. As such, the foregoing pronouncement should therefore be devoid of any legal effect.

CITY OF CEBU vs. APOLONIO M. DEDAMO, JR. G.R. No. 172852January 30, 2013

CONCLUSIVENESS OF JUDGMENT; EMINENT DOMAIN; LEGAL INTEREST

FACTS: The present controversy is an off-shoot of Civil Case No. CEB-14632 for eminent domain over two (2) parcels of land owned by spouses Apolonio and Blasa Dedamo (Spouses Dedamo), filed by the petitioner before the Regional Trial Court (RTC) of Cebu City, Branch 13, on September 17, 1993. The petitioner immediately took possession of the lots after depositing P51,156.00 with the Philippine National Bank pursuant to Section 19 of Republic Act No. 7160.

During the pendency of the case, or on December 14, 1994, the petitioner and Spouses Dedamo entered into a Compromise Agreement whereby the latter agreed to part with the ownership of the parcels of land in favor of the former in consideration of ONE MILLION SEVEN HUNDRED EIGHTY-SIX THOUSAND FOUR HUNDRED PESOS (P1,786,400.00) as provisional payment and just compensation in an amount to be determined by a panel of commissioners. Forthwith, the panel was constituted and a report was submitted to the RTC recommending the sum of P20,826,339.50 as just compensation. The report was adopted and approved by the RTC in its Order dated December 27, 1996.5

The RTC Order was affirmed by the CA and then by the Court, in a Decision dated May 7, 2002, when the matter was elevated for review in a petition docketed as G.R. No. 142971. When the said decision became final and executory on September 20, 2002, the case was remanded for execution to the RTC, before which, a motion for the issuance of a writ of execution was filed by Spouses Dedamo on April 4, 2003. On May 16, 2003, the RTC granted the motion and ordered the issuance of the writ.

In the meantime, Spouses Dedamo passed away and they were substituted in the case by herein respondent.

On December 23, 2003, the petitioner paid the respondent the sum of P19,039,939.50 which is the difference between the just compensation due and the provisional payment already made.

On March 24, 2004, the respondent filed a Manifestation and Motion before the RTC to order the petitioner to pay interest on the just compensation computed from the time of actual taking of the lands.

On April 30, 2004, the RTC denied the motion and ruled that it can no longer amend a final and executory judgment that did not specifically direct the payment of legal interest.

Adamant, the respondent sought recourse before the CA asserting that the petitioner is liable to pay: (a) 12% legal interest on the unpaid balance of the just compensation computed from the time of actual taking of the property up to the date of payment of just compensation; and (b) 12% legal interest from the time the decision awarding just compensation became final and executory on September 20, 2002 until its satisfaction on December 23, 2003.

Subsequently, the CA rejected the respondent’s first claim since the issue was belatedly raised during the execution stage and after the judgment of just compensation attained finality. Nonetheless, it found the second contention meritorious and awarded legal interest accruing from the time the RTC Order dated December 27, 1996 awarding just compensation was affirmed with finality by the Supreme Court up to the time of full payment.

Both parties elevated the CA judgment to the Court. The respondent’s petition was docketed as G.R. No. 172942 where he sought, in the main, that the 12% interest rate be reckoned from the date of taking of the property and not from the date of finality of the Decision dated May 7, 2002 in G.R. No. 142971. The Court denied his petition on August 22, 2006 for failure to sufficiently show that the CA committed any reversible error in the questioned judgment. The respondent’s motion for reconsideration of the said decision was denied with finality on November 27, 2006.

The petitioner prays for the annulment of the award of 12% legal interest made by the CA in view of the termination of the eminent domain case upon payment of the just compensation in satisfaction of the writ of execution. The petitioner further asserts that the final judgment in Civil Case No. CEB-14632 which did not explicitly pronounce the payment of interest can no longer be modified lest the basic principles of remedial law be defiled.


http://www.lawphil.net/judjuris/juri2013/jan2013/gr_172852_2013.html#fnt5

http://www.lawphil.net/judjuris/juri2013/jul2013/gr_198680_2013.html#fnt25


The respondent avers that Section 10, Rule 67 of the Rules of Court mandating the payment of legal interest on just compensation forms part of every judgment rendered in eminent domain cases even if the same was not directly ordered therein. The respondent also claims that the award of just compensation must be reckoned from the date of taking of subject lots and not from the date of finality of G.R. No. 142971 because just compensation, before it is paid, constitutes loan or forbearance of money that entails the imposition of a 12% interest per annum.

ISSUE: Whether or not the decision of the CA as to the reckoning point from which the legal interest be computed has obtained its finality.

HELD: YES. The petition is denied on the ground of res judicata in the mode of conclusiveness of judgment. A perusal of the allegations in the present case evidently shows that the petitioner broaches the issues similarly raised and already resolved in G.R. No. 172942.

Under the principle of conclusiveness of judgment, when a right or fact has been judicially tried and determined by a court of competent jurisdiction, or when an opportunity for such trial has been given, the judgment of the court, as long as it remains unreversed, should be conclusive upon the parties and those in privity with them. Stated differently, conclusiveness of judgment bars the re-litigation in a second case of a fact or question already settled in a previous case.

The adjudication in G.R. No. 172942 has become binding and conclusive on the petitioner who can no longer question the respondent’s entitlement to the 12% legal interest awarded by the CA. The Court’s determination in G.R. No. 172942 on the reckoning point of the 12% legal interest is likewise binding on the petitioner who cannot re-litigate the said matter anew through the present recourse. Thus, the judgment in G.R. No. 172942 bars the present case as the relief sought in the latter is inextricably related to the ruling in the former.


Documents

RULE 39 CONSOLIDATED CASE DIGESTS.docx