SECOND DIVISION
[G.R. No. 112569. April 12, 2000]
SHUHEI
YASUDA, petitioner, vs. COURT OF APPEALS and BLUE CROSS INSURANCE, INC.,
respondents.
D E C I S I O N
QUISUMBING, J.:
This is a special civil action for certiorari[1] under Rule 65 of the Revised Rules of Court seeking
reversal of the decision[2] of the Court of Appeals in CA-G.R. SP No. 31402 on
November 11, 1993 and setting aside the writs of execution pending appeal
issued by the Regional Trial Court of Makati, Branch 59. The dispositive
portion of the decision of the Court of Appeals reads:
WHEREFORE, the petition is GRANTED. The Order dated
February 16, 1993 and the writ of execution pending appeal issued pursuant
thereto are hereby SET ASIDE insofar as herein petitioner is concerned
[Blue Cross], and the Order dated June 17, 1993 and the writ of execution
issued pursuant thereto are ANNULLED and SET ASIDE. The ensuing
writs and processes in the implementation of said Order of June 17, 1993 are
equally ANNULLED and SET ASIDE. Private respondent [Shuhei Yasuda] and/or
respondent Sheriff are/is hereby ordered to return to petitioner [Blue Cross]
the seized properties of the petitioner.
SO ORDERED[3]
By this decision, the Court of Appeals
rendered nugatory, as far as private respondent is concerned, the Order dated
February 16, 1993, issued by the trial court granting execution pending appeal.[4]
Further, respondent appellate court also set
aside the Order of the trial court dated June 17, 1993, granting petitioner's
Application for Judgment against the counterbond filed by private respondent
Blue Cross Insurance, Inc.
The pertinent facts of the case, borne by
the records, are as follows:
Petitioner Shuhei Yasuda is a Japanese
national.[5] Enrique Rojas, Eduardo Lopingco, and he, incorporated
the YRL Shipping Co. S/A, a foreign corporation organized in Panama and engaged
in the shipping business.[6]
On January 9, 1990, petitioner filed a
complaint before the Regional Trial Court of Makati, to collect from defendants
YRL Shipping Co. S.A., Azucar Shipping Corp., Eduardo Lopingco, Enrique Rojas,
and Arnold Savella the sum of P8,966,304.00. It also asked for damages,
issuance of an arrest order, preliminary attachment, restraining order and
injunction.[7] The amount represents the alleged equity interest
and share of petitioner in the income of YRL Shipping Co. derived from its
operations here in the Philippines under a Bareboat Charter Agreement with the
Azucar Shipping Corp. Such amount was allegedly withheld by the defendants from
petitioner.
In an order dated January 16, 1990, the RTC
granted petitioner's prayer for the issuance of a writ of preliminary
attachment.[8]
On January 30, 1990, defendant Eduardo
Lopingco filed a motion to quash the order, but the RTC denied it in an order
dated February 6, 1990.[9]
On February 6, 1990, the trial court granted
the application for the issuance of a writ of preliminary injunction. It also
enjoined said private respondents and any and all persons or agents or parties
acting in their behalf from managing or otherwise operating the vessel M/V
Valiant beyond March 31, 1990, upon posting of a bond in the amount of ONE
MILLION (P1,000,000.00).[10]
On February 14, 1990, the defendants except
Savella filed a Motion for Reconsideration of the two (2) orders dated February
6, 1990, which was denied in an order dated March 8, 1990.[11]
Defendants assailed the orders of the RTC
granting the attachment and injunction through a petition for certiorari,
docketed as CA-G.R. SP No. 22017 with the Court of Appeals. It was dismissed on
February 28, 1991.[12] Defendants' motion for reconsideration was likewise
denied.[13]
Defendants appealed to this Court, but we
sustained the decision of the Court of Appeals in a Resolution dated October 7,
1991.[14]
To discharge and release the properties
subject of the writs of attachment and injunction, private respondents filed
with the trial court counterbonds issued by private respondent Blue Cross
Insurance, Inc.,[15] in the amounts of P8,966,304.00 and P1,000,000.00.[16]
After trial on the merits, the trial court
rendered a decision[17] in favor of the petitioner-plaintiff. In addition,
it ordered the defendants to pay actual, moral, exemplary damages, and
attorney's fees.
The RTC dismissed defendants' counterclaims
and cross-claims for lack of merit.[18]
Defendants, except Savella, appealed the
decision of the Regional Trial Court.[19]
On February 16, 1993 upon petitioner's
motion and over the vigorous opposition of defendants except Savella, the trial
court issued an order allowing execution pending appeal of a portion of its
decision awarding actual or compensatory damages. The trial court found that
there are good reasons to justify the execution of the judgment pending appeal,
namely, that the appeal taken by the defendants is dilatory; that herein petitioner
is a Japanese national and is sickly; that the vessel M/V "Valiant"
has been left to waste and deteriorating at the pier, and is in grave danger of
losing its value; and that petitioner posted bond to answer for any damages
which the defendants may suffer if the court later finds that petitioner is not
entitled thereto.[20] Accordingly, the trial court issued a writ of
execution.[21]
As attested to in the Sheriffs Report dated
April 27, 1993, the Sheriff was able to execute only No. II, par. a, but failed
to execute the money judgment under pars. b, c, d and e of the order dated
February 16, 1993, by the trial court granting the motion for the issuance of a
writ of execution pending appeal, because defendants with whom private
respondent Blue Cross acted as surety, cannot be located and their properties
could not be determined.[22]
On May 5, 1993, petitioner then filed an
application for judgment against the counterbonds issued by private respondent[23] which, after hearing, was granted by the trial court
in its order dated June 17, 1993.[24]
Private respondent Blue Cross filed a
special civil action for certiorari with prayer for a temporary
restraining order and/or preliminary injunction [25] with the Court of Appeals, questioning the propriety
of the order of execution pending appeal and the subsequent writ of execution.
At the same time, the trial court issued a Notice of Levy and Sale on Execution
of Personal Properties. However, the Court of Appeals issued a TRO enjoining
the trial court and the sheriff from enforcing the writ of execution against
the counterbonds issued by private respondent, and from conducting the auction
sale.[26]
The Court of Appeals granted the petition
for certiorari filed by private respondent Blue Cross. It set aside the
writs of execution pending appeal issued by the trial court, insofar as private
respondent is concerned.[27]
Hence, this special civil action for certiorari,[28] filed by the aggrieved private party, Shuhei Yasuda.
Petitioner herein imputes to the Court of
Appeals errors of law as well as grave abuse of discretion amounting to lack or
excess of jurisdiction:
1. . . . IN
ANNULLING AND SETTING ASIDE THE ORDER OF FEBRUARY 16, 1993 ALLOWING EXECUTION
PENDING APPEAL, BECAUSE THE PETITIONER BLUE CROSS, QUESTIONING THE PROPRIETY
THEREOF, IS NOT A PARTY TO THE CASE, AND THE SAID ORDER HAS
ALREADY BECOME FINAL AND EXECUTORY AFTER THE DEFENDANTS (PRINCIPALS OF BLUE
CROSS) BOWED TO THE SAME AND DID NOT ELEVATE THE SAID. ORDER TO THE COURT OF
APPEALS;
2. . . . IN
ALLOWING PRIVATE RESPONDENT, WHICH IS BUT A SURETY, TO RAISE SEPARATE DEFENSES
AGAINST THE EXECUTION PENDING APPEAL BECAUSE IT IMPROPERLY ALLOWED A SURETY TO
BECOME A PARTY AND TO LITIGATE WITH: PETITIONER-PLAINTIFF; [and]
3. : . . IN
ANNULLING THE ORDER OF JUNE 17, 1993 AND THE WRIT ISSUED IN ACCORDANCE
THEREWITH BECAUSE THE PRIVATE. RESPONDENT BLUE CROSS AND DEFENDANTS ARE TREATED
IN. LAW AS ONE AND THE SAME AND PRIVATE RESPONDENT BLUE CROSS IS BOUND
BY THE ORDER OF EXECUTION PENDING APPEAL ISSUED AGAINST ITS PRINCIPALS,
THE DEFENDANTS.[29]
In brief, the pertinent issues to be
resolved are:
1.......Whether
or not the surety has standing to question the propriety of the issuance of the
writ of execution pending appeal?
2.......Whether
or not there were good reasons to allow execution pending appeal?
At the outset, it must be noted that the
surety in this case filed a special civil action for certiorari with
prayer for a temporary restraining order and/or preliminary injunction with the
Court of Appeals. It questioned the propriety of the order of execution pending
appeal and the subsequent writ of execution issued pursuant thereto. A special
civil action for certiorari under Rule 65 is an original action,
independent from the principal action, and not a part or continuation of the
trial which resulted in the rendition of the judgment complained of.[30] It does not interrupt the course of the principal
action nor the running of the reglementary periods involved in the proceedings,
unless an application for a restraining order or a writ of preliminary
injunction to the appellate court is granted,[31] as in the present case. It is not a mode of appeal
where the appellate court reviews the errors of fact or law committed by the
lower court. The issue in a special civil action for certiorari is
whether the lower court acted without or in excess of jurisdiction or with
grave abuse of discretion.[32]
In an appeal by certiorari under Rule
45, the petitioner and respondent are also the original parties to the action
in the lower court. But in certiorari as an original action, the parties
are the aggrieved party against the lower court or quasi-judicial agency and
the prevailing parties, who thereby respectively become the petitioner and
respondents.[33] Paragraph 1, Section 1, Rule 65 of the Revised Rules
of Court provides:
Section 1.
Petition for certiorari. - When any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted without or in excess of its of
his jurisdiction, or with grave abuse of discretion amounting to lack or excess
of its or his jurisdiction, and there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law, a person aggrieved
thereby may file a verified petition in the proper court, alleging the
facts with certainty and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or officer, and granting such
incidental reliefs as law and justice may require.
[Emphasis
supplied.] [34]
Private respondent herein, Blue Cross, had
personality to bring a special civil action for certiorari before the
Court of Appeals. As the entity that that posted the bonds, and aggrieved by
the trial court's order of execution pending appeal, Blue Cross had a
substantial interest in the case. It could bring such action in its name to
protect its interest.[35] In Santos v. Court of Appeals, G.R. No.
127899, December 2, 1999, citing People v. Santiago,[36] we held
that:
In a special civil
action for certiorari under Section 1, Rule 65 of the Rules of Court wherein it
is alleged that the trial court committed grave abuse of discretion amounting
to lack of jurisdiction, the rules state that the petition may be filed by the person
aggrieved.
Petitioner also claims that the order
allowing execution pending appeal had become final and executory because the
defendants in the trial court who are the principals of private respondent did
not appeal the order; thus, private respondent, the surety, is "deemed to
have bowed to said order"[37] and could no longer question its propriety. This is
erroneous. An order for execution pending appeal is not appealable pursuant to
Paragraph 2(f), Section 1, Rule 41 of the Revised Rules of Court.[38] This provision enumerates the judgments or final
orders that may be appealed from. It also specifies the interlocutory or other
orders from which no appeal can be taken. In the latter instance, the aggrieved
party may resort to a special civil action under Rule 65, i.e., a petition for certiorari.[39]
Having found that private respondent Blue
Cross has standing to file this petition, we now decide whether execution
pending appeal should be allowed in the instant petition.
The
prevailing doctrine as provided for in Par. 3, section 2 of Rule 39 of the 1997
Rules of civil Procedure[40]
is that 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 period
to appeal. Good reasons consist of compelling circumstances justifying the
immediate execution lest judgment becomes illusory, or the prevailing party
after the lapse of time be unable to enjoy it, considering the tactics of the
adverse party who may apparently have no case but to delay.[41]
In Ong v. Court of Appeals,[42] the Court underscored the importance of the
requisite "good reasons" for allowance of execution pending appeal.
It ruled that:
The reasons
allowing execution [pending appeal] must constitute superior circumstances
demanding urgency which will outweight the injury or damages should the losing
party secure a reversal of the judgment.
It is not intended
obviously that execution pending appeal shall issue as a matter of course. Good
reasons, special, important, pressing reasons must exist to justify it;
otherwise, instead of an instrument of solicitude and justice, it may well
become a tool of oppression and inequity.
One "good reason" upheld by this
Court to justify execution pending appeal is the deterioration of commodities
subject of litigation.[43] In Federation of United Namarco Distributors,
Inc. v. National Marketing Corp., this Court sustained the good reasons
stated by the trial court in its order, namely: that the goods subject matter
of the judgment will deteriorate during the pendency of the appeal; and that
the slight deterioration of said good will be sufficient to impair their market
value as first-hand goods; hence, keeping them in storage pending petitioner’s
appeal will render the judgment in favor of respondents ineffectual, as
respondents’ interest in the goods is not that of consuming, but of marketing,
them.
In the case of Bell Carpets International
Trading Corp. v. Court of Appeals,[44] a writ of execution pending appeal was likewise
allowed on the ground that "the finished goods [yarn] that were attached
easily deteriorate and go out of fashion insofar as the shades and colors are
concerned, thus making them unsaleable, and their continued storage will only
make them dirty and further depreciate their value."
In the present case, petitioner, in his
Motion for Execution Pending Appeal, cites as a ground for its allowance, the
deteriorating condition of the vessel, M/V "Valiant". He claims that
the vessel has been left to rot at the pier and without a crew to guard it. It
is in grave danger of losing its value. The vessel, practically abandoned, is
exposed to the varied elements of nature, such as rains and storms, not to
mention human elements such as invasion or robbery. The defendants, in their Opposition
to petitioner’s Motion for Execution Pending Appeal, failed to controvert these
allegations. In our view the grounds raised by petitioner are good reasons to
allow execution pending appeal.
ACCORDINGLY, the petition is GRANTED. The decision of the Court
of Appeals is REVERSED and SET ASIDE, while the Orders of the Regional Trial
Court of Makati dated February 16, 1993 and June 17, 1993 are REINSTATED. The
Sheriff of the RTC of Makati, Branch 59, is hereby ordered to implement the
writ of execution dated June 17, 1993, against private respondnent Blue Cross
Insurance Corporation. Costs against private respondent.
SO ORDERED
Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.
[1] Rollo, pp. 6-22.
[2] Id. at 90-102.
[3] Id. at 102.
[4] CA Records, pp. 178-179.
"Premises considered, the motion is
hereby granted. Upon posting by the plaintiff of a bond in the amount of One
Million (P1,000,000.00) Pesos subject to the approval of this Court, let the
corresponding writ of execution issue on the pecuniary awards representing
actual and compensatory damages as decreed in the dispositive portion of the
decision rendered by this Court under Par. II, Letters (b), ( c), (d) and (e),
and for the turn-over and delivery of the possession and control over the
vessel "M/V Valiant" to the plaintiff(Par. a, decision),
which state as follows:
"II. Ordering:
a.......defendant Azucar Shipping Corporation
to turn-over and deliver possession and control over the vessel, MV
"Valiant" to plaintiff;
b.......defendants YRL Shipping Co., S.A.;
Edaurdo Lopingco; and Enrique Rojas; jointly and severally, to pay the
plaintiff the amount of six million two hundred ninety four pesos and sixty
centavos (P6,000,294.60) which became due and payable at the time the complaint
was filed, with interest at the legal rate from January 9, 1990, the date of
the filing of the complaint;
c.......defendants YRL Shipping Co., S.A.;
Edaurdo Lopingco; and Enrique Rojas; jointly and severally, to pay plaintiff
actual damages in the amount of P3,880,785.10, representing plaintiff’s share
from the vessel’s income from January 1990 to October 1992, with interest
thereon at legal rate computed from the date of the finality of this decision
until fully paid;
d.......defendant Arnold Savella to pay the
plaintiff the amount of P500,000 with interest thereon at legal rate from
January 9, 1990, the date of the filing of the complaint until paid; and such
amount, if paid by or recovered from defendant Savella, shall be deducted from
the totality of plaintiff’s claims against YRL Shipping Co., S.A., Eduardo
Lopingco and Enrique Rojas as indicated in the next preceding paragraph;
e.......defendants YRL Shipping Co., S.A.;
Eduardo Lopingco; and Enrique Rojas; to pay the plaintiff the sum of P285,382.40
a month, representing his share from the monthly income of the vessel, starting
November 1992 until the vessel MV "Valiant" is turned over to the
plaintiff or until April 1993, expiry date of the renewed bareboat charter,
whichever comes ahead.
SO ORDERED."
[5] Supra, note 1 at 6.
[6] Supra, note 4 at 42.
[7] Supra, note 1 at 7.
[8] Id. at 90-91.
[9] Id. at 91.
[10] Ibid.
[11] Ibid.
[12] Ibid.
[13] Ibid.
[14] Id. at 92.
[15] Id. at 95-96.
[16] Supra, note 14.
[17] Supra, note 4 at 42-109.
[18] Supra, note 1 at 94.
[19] Id. at 95.
[20] Supra, note 4 at 172-179.
[21] Id. at 180-182.
[22] Id. at 183.
[23] Id. at 110-112.
[24] Id. at 33-38.
[25] Id. at 2-32.
[26] Supra, note 1 at 98.
[27] Id. at 90-102.
[28] Id. at 6-21.
[29] Id. at 14.
[30] Palomares, et. al. v. Jimenez, et. al., 90 Phil 773, 776; National Irrigation Administration v. Honorable Court of Appeals, et. al., G.R. No. 129169, November 17, 1999.
[31] Regalado, Remedial Law Compendium, vol. 1, 6th ed., 1997, p. 705.
[32] Id. at 543.
[33] Id. at 544.
[34] Before the 1997 revisions to the Rules of Court,
Paragraph 1, Section 1, Rule 65 provided that:
Section 1. Petition for certiorari. – When any tribunal, board or officer exercising judicial functions, has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of its or his jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings, as the law requires, of such tribunal, board or officer.
[35] Santos v. Court of Appeals, G.R. No. 127899, December 2, 1999.
[36] People v. Santiago, 174 SCRA 143, 153.
[37] Supra, note 1 at 17.
[38] SECTION 1. Subject of appeal. -- An appeal may betaken
from a judgment or final order that completely disposes of the case, or of a
particular matter therein when declared by these Rules to be appealable.
No appeal may be taken from:
xxx
An order of execution;
xxx(Emphasis
supplied.)
In all the above instances where the judgment or final order is not appealable, the aggrieved party may file an appropriate special civil action under Rule 65.
[39] Supra, note 32 at 491-492.
[40] SEC. 2. Discretionary Execution. --
(a)......Execution of a judgment or 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.
xxx
[41] Philippine Bank of Commerce v. Court of Appeals, 279 SCRA 371-372.
[42] 203 SCRA 38, 43, cited in Bonifacio Sanz Maceda Jr. and Teresita Maceda-Docena v. Development Bank of the Philippines, G.R. No. 135128, August 26, 1999.
[43] See Note 42 citing Federation of United Namarco Distributors, Inc. v. National Marketing Corp., 4 SCRA 867.
[44] 185 SCRA 35, 39.