Arturo G. Eudela, et al. v. Court of Appeals, et al., G.R. No.

89265, July 17, 1992

First Division, Justice Cruz
When execution shall issue

FACTS: Private respondents filed a Complaint against petitioners for injunction, specific
performance and damages before the RTC-Quezon City. Eventually, the trial court
decided against the petitioners on December 16, 1987 finding petitioners to have
defrauded private respondents in the amount of P450,000 and ordered them to pay the
latter the same plus 15% interest and attorney’s fees.

Later, the decision was amended on motion for reconsideration by both parties on
February 1, 1988. On the same date, petitioners filed a notice of appeal. Later, private
respondents, six days after receiving said notice, filed a motion for execution pending
appeal before the trial court which the latter granted. The trial court grounded its grant of
the motion on four reasons: (1) uncertainty if petitioners will be able to satisfy the award
granted in favor of the private respondents; (2) the petitioner bank is under receivership
and under a state of insolvency; (3) Renato Tuazon and his family are abroad and real
properties are being sold; and (4) private respondents were ordered to post a bond to
answer for whatever damages the petitioners might suffer by virtue of the issuance of
the writ of execution should its decision be reversed by the higher court.

Petitioners challenged said order on certiorari before the CA. The CA, however,
sustained the order of the trial court on the following grounds: (1) the petition was
premature because at the time of its filing the questioned order and the writ of execution
had not yet been issued by the trial court; (2) the posting of the bond was good and
sufficient reason for the execution of the decision pending appeal; (3) the lower court
had not lost jurisdiction to act on the motion for execution pending appeal despite the
notice of appeal filed by the petitioners because the records had not yet been elevated
to the appellate court.

Hence, this petition.

ISSUE: Whether the issuance by the trial court of a writ of execution pending appeal
proper?

HELD: Yes, the Supreme Court ruled thus:

“The general rule under Section 1 of Rule 39 of the Rules of Court is that a judgement
can be executed only after it has become final and executory, that is, when it ‘finally
disposes of the action or proceeding.’ Such execution shall issue as a matter of right
upon the expiration of the period for appeal if no appeal has been perfected.”

“By way of exception, however, execution pending appeal is allowed under Section 2 of
the same Rule as follows:
‘Sec. 2. Execution pending appeal. – On motion of the prevailing party with notice
to the adverse party, the court may, in its discretion, order execution to issue
 even before the expiration of the time to appeal, upon good reasons to be stated
in a special order. If a record on appeal is filed thereafter, the motion and the
special order shall be included therein.’”

“Execution pending appeal requires observance of the following requisites: (a) there
must be a motion therefor by the prevailing party with notice to the adverse party; (b)
there must be a good reason for issuing the writ of execution; and (c) the good reason
must be stated in a special order.”

“The exercise of the power to grant or deny immediate or advance execution is

addressed to the sound discretion of the court. However, the existence of good
reason is indispensible to the grant of execution pending appeal . Absent any
such good reason, the special order of execution must be struck down for having
been issued with grave abuse of discretion.”

“x x x the Court finds that the justification given by the trial court in its challenged order
constitutes the ‘good reasons’ required by Section 2 of Rule 39 for authorizing
execution pending appeal. It is noted that the decision under appeal held the petitioners
solidarily liable to the private respondents for what is described as ‘the fraudulent
combination of the defendants against the plaintiffs.’ Of these defendants, Pioneer
Savings and Loan Bank is under receivership and in a state of insolvency; Renato
Tuazon and his family have immigrated and his real properties are being sold; Leo
Guevarra and Arturo Eudela appear to have no registered real properties in their name,
and Eudela himself is reportedly at large and facing malversation charges filed by the
BIR. Francisco Pangilinan, the president of the insolvent bank, appears to be the only
one who may be able to satisfy the private respondents’ claims although he has not
denied their allegations that his real properties are heavily mortgaged and that he has
sold two of his cars. Added to these danger signals is the fact that the complaints were
filed in the RTC-Quezon City as early as 1986, and the private respondents have yet to
execute the judgement in their favor because of the petition at bar and the appeal
pending in the CA. In these circumstances, the Court feels that the trial court did not
commit grave abuse of discretion but in fact acted quite judiciously in granting the
motion for execution pending appeal.”

FILING OF A BOND CANNOT BY ITSELF ALONE ENTITLE PRIVATE

RESPONDENTS TO SUCH A PROCESS

“The Court disagrees with the [CA] that the mere filing of a bond is sufficient to warrant
execution pending appeal. It is now settled that the filing of a bond cannot by itself alone
entitle the private respondents to such a process. Whatever doubts may have been
generated by early decisions have been clarified in Roxas v. Court of Appeals, thus:
‘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. But to consider the mere posting of a
bond a ‘good reason’ would precisely make immediate execution of a judgement
 pending appeal routinary, the rule rather than the exception. Judgements would
be executed immediately, as a matter of course, once rendered, if all that the
prevailing party needed to do was to post a bond to answer for damages that
might result therefrom. This is a situation, to repeat, neither contemplated nor
intended by law.’”

ACCORDINGLY, the Petition is DENIED x x x