SECOND DIVISION

[G.R. No. 110701. March 12, 2002]

FORTUNE GUARANTEE AND INSURANCE CORPORATION, petitioner, vs. HONORABLE COURT OF APPEALS, HONORABLE JUDGE HENEDINO P. EDUARTE, RTC, BRANCH 20, CAUAYAN, ISABELA, EGDONA R. MADRIAGA, PROVINCIAL SHERIFF OF THE REGIONAL TRIAL COURT OF CAUAYAN, ISABELA OR ANY OF HIS DEPUTIES and ISABELA I ELECTRIC COOPERATIVE, INC., respondents.

D E C I S I O N

DE LEON, JR., J.:

Before us is a Petition for Certiorari under Rule 65[1] of the Rules of Court which seeks to annul the twin Resolutions of the Court of Appeals in CA-GR SP No. 30430[2] dated April 19, 1993[3] and dated June 16, 1993,[4] respectively, which ultimately dismissed the petition for certiorari of petitioner Fortune Guarantee and Insurance Corporation that assailed the Special Order dated February 12, 1993 of respondent Judge Henedino P. Eduarte of the Regional Trial Court of Cauayan, Isabela, granting execution pending appeal of his Decision in Civil Case No. Br. 20-436.

The facts are as follows:

On November 11, 1988, Isabela 1 Electric Cooperative, Inc. (ISELCO-I) secured Fire Insurance Policy No. 9216 from petitioner for Two Million (P2,000,000.00) Pesos. This was later on changed to Policy No. 9218[5] with expanded coverage to include typhoons and floods. The period covered by the said amended insurance policy is from 4:00 o’clock p.m. of November 11, 1988 to 4:00 o’clock p.m. of November 11, 1989. The properties covered are all of ISELCO-I’s distribution lines, electric posts/poles, transformers and its accessories, towers and fixtures installed and/or specifically situated in the towns of Alicia, Angadanan, Cabatuan, Cauayan, Cordon, Echague, Jones, Luna, Ramon, San Isidro, San Mateo, Santiago, Reina Mercedes, San Guillermo and San Agustin all in the Province of Isabela.[6]

During the subsistence of the insurance policy, the insured properties of ISELCO-I were destroyed by two (2) typhoons in 1989; first by typhoon “ELANG” on July 9 and second by typhoon “TACING” on October 19 of the same year. ISELCO-I filed successive claims with petitioner. Notwithstanding the several demands made by ISELCO-I, however, petitioner refused to pay the claims.

On March 19, 1990, ISELCO-I, through its representative, filed a complaint against petitioner for a sum of money in the amount of Two Million (P2,000,000.00) Pesos with damages before the Regional Trial Court of Cauayan, Isabela. The case which was assigned to Branch 20 presided by respondent Judge Henedino P. Eduarte, was docketed as Civil Case No. Br. 20-436. In answer thereto, petitioner claimed, among others, that since the total value of the entire properties insured was Thirty-Six Million (P36,000,000.00) Pesos, it thereby rendered ISELCO-I’s properties underinsured by the Two Million (P2,000,000.00) Pesos insurance policy. Thus, according to petitioner, ISELCO-I was entitled to payment of only a fraction of the policy’s face value or only One Hundred Eighty-Three Thousand Seven Hundred Eighty-Five Pesos and Seventy-Three Centavos (P183,785.73) instead of the Two Million (P2,000,000.00) Pesos claimed by ISELCO-I.

On June 17, 1992, after trial on the merits, the trial court rendered a decision in favor of ISELCO-I, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant, ordering the defendant Fortune Guarantee and Insurance Corporation to pay to the plaintiff Isabela- 1 Electric Cooperative, Inc., (ISELCO I) TWO MILLION (P2,000,000.00) PESOS with interest at the rate of 14% per annum from March 19, 1990 up to and until said amount shall have been fully paid, attorney’s fees in the amount of P200,000.00 plus P2,500.00 honorarium. Costs against defendant.

SO ORDERED.[7]

On June 22, 1992, ISELCO-I filed a Motion for Execution Pending Appeal[8] alleging good reasons for its allowance.

On July 13, 1992, petitioner filed a motion for reconsideration[9] of the Decision of the trial court. On July 23, 1992, ISELCO-I filed its Opposition to the said Motion for Reconsideration;[10] and on November 13, 1992, petitioner filed its Opposition[11] to ISELCO-I’s Motion for Execution Pending Appeal on the ground that ISELCO-I had no good reasons and no clear right to a writ of execution pending appeal as the subject amount is enormous.

On October 7, 1992, the trial court denied the said motion for reconsideration filed by the petitioner. Thereafter, on November 3, 1992, petitioner seasonably filed its Notice of Appeal with the trial court.

On February 12, 1993, the trial court resolved in a Special Order[12] the Motion for Execution Pending Appeal in favor of ISELCO-I, the dispositive portion of which reads:

WHEREFORE, finding the motion for execution pending appeal to be meritorious as there are good and valid reasons in support thereof, let a writ of execution of the decision of the Court for the principal claim of P2,000,000.00 be issued upon plaintiff’s filing a bond in favor of defendant in the amount of P1,817,742.8 to answer for damages that defendant may suffer by reason of the writ if it is later on adjudge that plaintiff was not entitled thereto.

SO ORDERED.[13]

Aggrieved by such Special Order, petitioner filed a Petition for Certiorari, Preliminary Injunction with Temporary Restraining Order,[14] with the Court of Appeals, alleging grave abuse of discretion on the part of respondent Judge in issuing the Special Order granting execution pending appeal.

On April 19, 1993, the Court of Appeals issued a Resolution[15] dismissing the said petition. The motion for reconsideration of petitioner was likewise denied for lack of merit in a Resolution dated June 16, 1993.[16]

Hence, this petition.

Petitioner assigns the following as errors, to wit:

I

RESPONDENT COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF DISCRETION OR IN EXCESS THEREOF AMOUNTING TO LACK OF JURISDICTION IN AFFIRMING THE ACTUATIONS OF RESPONDENT JUDGE WHO, KNOWING THAT THE EVIDENCE BEFORE HIM CLEARLY PROVED THAT THE SUBJECT INSURED PROPERTIES OF PRIVATE RESPONDENT IS VALUED AT P36,052,061.15, AND NOT P2,000,000.00, HENCE UNDERINSURED, HE BIASLY AND IMPROPERLY APPLIED JUDICIAL NOTICE AND PIERCED THE SAID AMOUNT OF P36,061,052.15 (SIC) BY DIVIDING IT INTO TWO AND DECLARED THAT P2,000,000.00 PORTION THEREOF REFERS TO THE VALUE OF THE INSURED PROPERTIES AND THE P34 M COVERS OTHER PROPERTIES, TO MAKE IT APPEAR THAT THE INSURED PROPERTIES WERE NOT UNDERINSURED AND THEREFORE PRIVATE RESPONDENT CAN CLAIM THE WHOLE INSURANCE COVERAGE OF P2,000,000.00 WHICH IS CONTRARY TO THE EVIDENCE AND THE LAW.

II

RESPONDENT COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF DISCRETION IN HASTILY DENYING PETITIONER’S MOTION FOR RECONSIDERATION BY DELIBERATELY IGNORING PETITIONER’S REJOINDER TO PRIVATE RESPONDENT’S COMMENT ATTACHING THERETO (REJOINDER) TWO SETS OF DOCUMENTS TO CORROBORATE THE JUDICIAL ADMISSION OF PRIVATE RESPONDENT THAT ITS INSURED PROPERTIES WERE VALUED AT P36,061,052.15 AND NOT P2,000,000.00, HENCE, UNDERINSURED. THUS, THE APPEAL OF PETITIONER IS NOT DILATORY.

III

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE SPECIAL ORDER OF RESPONDENT JUDGE GRANTING EXECUTION PENDING APPEAL AGAINST PETITIONER FOR AN ENORMOUS SUM OF P2,000,000.00 WITHOUT GOOD REASONS THEREFOR.

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