International School Inc, Manila (ISM) v. CA and Sps.

Torralba
G.R. No. 121109
29 June 1999
By: Xavier Cortez
Damages; Execution pending appeal; Moral and Exemplary damages
may not be the subject of an execution pending appeal.
DOCTRINE
The execution of any award for moral and exemplary damages is
dependent on the outcome of the main case. Unlike the actual damages for
which a defendant may clearly be held liable if there is breach of a specific
contract and the amounts of which are fixed and certain, liabilities with
respect to moral and exemplary damages as well as the exact amounts
remain uncertain and indefinite pending resolution by a lower court and
eventually the Supreme Court. The existence of the factual bases of these
types of damages and their causal relation to a defendants act will have to
be determined in the light of errors on appeal. It is possible that the
defendant, after all, while liable for actual damages may not be liable for
moral and exemplary damages. Or as in some cases elevated to the
Supreme Court, the awards may be reduced. (Radio Communications of
the Philippines, Inc. (RCPI) vs. Lantin, et al.)
CHRONOLOGY OF THE CASE FOR DAMAGES AND GRANT OF
EXECUTION PENDING APPEAL:
1.) RTC Granted conditionally upon the posting of a bond
2.) CA AFFIRM
3.) SC Reverse the decision of the Court of Appeals. No execution
pending appeal for moral and exemplary damages. No reason exists to
warrant execution pending appeal.
FACTS:
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In 1991, Ericson Torralba, a freshman student of International School

Manila (ISM) was engaged in a swimming competency test. During such
activity, he collapsed for unknown reasons. ISM was ill-equipped to handle
the situation due to the absence of medical equipment, satisfactory first aid,
and a stand-by ambulance. This inadequacy resulted in delay which
consequently contributed to the death of Ericson, who the medical staff at
the hospital were not able to revive upon arrival.
His parents, Sps. Torralba, sued ISM for damages due to the death of their
minor child while he was in the custody of ISM and its officials. The RTC
granted the petition as follows:
WHEREFORE, Judgment is hereby rendered finding defendant
International School (Manila), Inc. liable to pay plaintiffs, the following:
1. The sum of P4,000,000.00 as and for Moral damages;
2. The amount of P1,000,000.00 by way of Exemplary damages;
3. The amount of P2,000,000.00 as Actual damages;
4. The sum of P300,000.00 as and for Attorneys fees; and
5. To pay the costs.
ISM appealed to the court of appeal. During the pendency of the appeal,
sps. Torralba filed a motion for execution pending appeal in the lower court.
The spouses were granted the execution conditionally upon the filing of a
bond in the amount of P5 million. Writs of garnishment were issued which
were enforced by the Sheriff against ISMs Citibank account to the extent of
P5.6 million. Their account and the amounts therein were frozen by judicial
order.
ISM took the issue on execution to the Court of Appeals by way of certiorari
(65) alleging that there is no good reason to grant the execution pending
appeal. The spouses, on the other hand, allege that first, there is a good
reason present that being the appeal filed by ISM is merely dilatory
because operation code red, a measure adopted by
ISM for increased safety by way of purchasing more
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adequate equipment and facilities, was implemented only AFTER the death
of their son, Ericson. Further, they allege that their posting of a bond is
sufficient reason to grant execution pending appeal. The Court of Appeals
sided with the spouses.
Hence, the present petition brought by ISM alleging still that there is no
good reason to grant the execution.
ISSUES:
1.) Whether or not there is good reason to grant execution pending appeal
to spouses Torralba NO
2.) Whether or not the posting of a bond is sufficient to grant execution
pending appeal NO
3.) (DAMAGES ISSUE) Whether or not moral and/or exemplary damages
may be subject to execution pending appeal - NO
RATIONIZATION:
The Supreme Court finds the petition meritorious.
For the first issue, there is no good reason to grant the execution pending
appeal. True, a dilatory appeal is a ground to grant execution pending
appeal, but this is not the case herein. The spouses rely on the admission
of ISMs swimming coach concerning the operation code red. He admitted
in a 1994 hearing that he did read the Articles found within code red and
that it explicitly stated that it is being implemented in order to avoid deaths
like that or Ericsons. The supreme court finds that this admission is too
remote to be considered an admission of guilt on the part of ISM and its
other officers. Nothing in the trial pointed to an actual admission of guilt by
ISM, but merely an admission that the swimming coach did read it and that
it was implemented only after Ericsons death, only in 1993, two years after
the incident. Still, this statement does not constitute a good reason to grant
execution pending appeal.
As for the second issue, the court stated that the grant
of execution pending appeal is a special remedy, and
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not the general rule. The mere posting of a bond does not warrant the
grant, but it is good reason which does so. If this logic alleged by the
spouses were to be followed, then all persons willing to post a bond would
be granted an execution pending appeal. This, the court may not allow.
This remedy is the exception, and not the norm. The bond follows the
grant, and not the other way around.
Lastly, the court stated that moral and exemplary damages may not
be awarded in executions pending appeal. The court cited the case of
Radio Communications of the Philippines, Inc. (RCPI) vs. Lantin, et al., to
wit:
that awards for moral and exemplary damages cannot be the subject of
execution pending appeal, under the following rationale:
xxx The execution of any award for moral and exemplary damages is
dependent on the outcome of the main case. Unlike the actual damages for
which the petitioners may clearly be held liable if they breach a specific
contract and the amounts of which are fixed and certain, liabilities with
respect to moral and exemplary damages as well as the exact amounts
remain uncertain and indefinite pending resolution by the Intermediate
Appellate Court and eventually the Supreme Court. The existence of the
factual bases of these types of damages and their causal relation to the
petitioners act will have to be determined in the light of errors on appeal. It
is possible that the petitioners, after all, while liable for actual damages may
not be liable for moral and exemplary damages. Or as in some cases
elevated to the Supreme Court, the awards may be reduced.
Much as we appreciate the predicament of the bereaved parents, however,
this Court is of the opinion that the general rule still finds application in the
instant case. In other words, the respondent Court of Appeals committed
reversible error in upholding the writ of execution pending appeal absent
the good reasons required by law.
The court ordered that the assailed decision be set aside.
Hence,
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WHEREFORE, the petition is granted and the assailed decisions of the

Court of Appeals are hereby REVERSED and SET ASIDE. The writ of
execution issued by the lower court pursuant to its order of June 19, 1996
is hereby ANNULLED.
SO ORDERED.

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