G. R. No. 136805 - January 28, 2000
DIESEL CONSTRUCTION COMPANY, INC., Petitioner, v. JOLLIBEE FOODS CORPORATION, Respondent.
The execution of a judgment pending appeal is an exception to the general rule that only final judgment may be executed. An exceptional execution must be founded on "good reason," which rest on sound judicial discretion. The alleged financial distress of the prevailing juridical entity is nor, by itself, a "good reason."
Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the September 21, 19981 and the December 22, 19982 Resolutions of the Court of Appeals in CA-GR CV No. 59486. The first Resolution disposed as follows:3
The second assailed Resolution denied petitioner's Motion for Reconsideration.4
On December 18, 1991, Petitioner Diesel Construction Company, Inc. (DCCI) instituted before the Regional Trial Court (RTC) of Makati City, Branch 61,5 an action6 for the recovery of escalated construction costs in the aggregate sum of P4.3 million, which it had allegedly incurred in the construction of buildings located in Batangas City and in the Municipality of Calamba, Laguna, owned by Respondent Jollibee Food Corporation (JFC). For the alleged failure of petitioner to complete these projects on time, JFC counterclaimed, in its Answer, recovery of damages and attorney's fees in the sum of P2.7 million.
At the pretrial, the parties agreed to reduce the issues to (1) whether DCCI had completed the Calamba and the Batangas City projects on time, and (2) whether DCCI was entitled to escalated construction costs.
After trial, the RTC rendered its judgment dated May 13, 1997, ruling that DCCI had completed both projects on time and was entitled to escalated construction costs. The dispositive portion of the judgment reads:
In its Memorandum,18 the petitioner raises the following issues:19
In its own Memorandum,20 respondent raises the procedural issue of whether recourse under Rule 45 is the proper remedy to question an Order granting a stay of execution pending appeal.
In sum, the parties raise the following issues: (1) whether a petition for review under Rule 45 is the proper remedy to question an order staying execution pending appeal; (2) whether the CA has jurisdiction to issue such order, and whether estoppel barred petitioner from questioning the former's jurisdiction; (3) whether the pendency of an appeal or the posting of a supersedeas bond justifies a stay of execution pending appeal; and (4) whether respondent is guilty of forum-shopping.
The Court's Ruling
We find no reason to grant execution pending appeal.
A petition for review under Rule 45 is the proper remedy question final judgments, not interlocutory orders, of the Court Appeals. We agree with respondent that the assailed Resolutions granting a stay of execution are interlocutory orders; therefore, Rule 45 is not the proper vehicle to assail them before this Court.21 The RTC Decision, which has ruled on petitioner's entitlement to escalated construction cost, was challenged in the original appeal before the CA, where the case is still pending.
On the other hand, the subjects of this Petition are the Resolution dated September 21, 1998, insofar as it granted a stay of execution pending appeal; and that of December 22, 1998, which denied reconsideration of the first order. These Resolution do not constitute "final orders or resolutions," as explained in De Ocampo v. Republic, from which we quote:
Interlocutory orders are those that determine incidental matters which do not touch on the merits of the case or put an end to the proceedings. It is well-settled that a petition for certiorari under Rule 65,23 not Rule 45, is the proper remedy to question an improvident order granting execution pending appeal and thereby relieve the adverse party from the immediate effects thereof. The same principle applies to a stay of such execution.
Under Rule 45 of the Rules of Court, review by this Court of a judgment, a final order or a resolution is discretionary.24 It is not a matter of right, but of sound judicial discretion, and will be granted only when there are special and important reasons for it. Some of these reasons are: (1) when the court a quo has decided a question of substance, which has not theretofore been determined by the Supreme Court, or when it has decided it in a way probably not in accord with law or with the applicable decisions of the Court; or (2) when the court a quo has so far departed from the accepted and usual course of judicial proceedings, or so far sanctioned such departure by a lower court, as to call for an exercise of the power of supervision.25
Before granting a petition due course or outrightly striking it down, the Court reserves the right to hear the side of the adverse party(ies). For this purpose, it may require or allow the filing of such pleadings, briefs, memoranda or documents as it may deem necessary within periods and under conditions which it may consider appropriate.26
Hence, in its Resolution of March 10, 1999, this Court required the respondent to comment on the Petition and expunged the latter's Motion to Dismiss and petitioner's Comment/Opposition to the said Motion. Section 5 of Rule 56 allows the filing of a motion to dismiss, but such motion may not be entertained if this Court, in the exercise of its sound discretion, requires respondent to comment.
Be that as it may, in the exercise of our judicial discretion, we shall treat this matter as a petition for certiorari under Rule 65 of the Rules of Court, in order to resolve the substantive and important issues being raised.
Petitioner argues that under Section 3 of Rule 39, the discretionary power to order a stay of execution is "compartmentalized" in the court that granted execution pending appeal. Petitioner further contends that when it filed its Motion for Issuance of Premature Execution, it effectively asked the CA to perform a ministerial duty to implement the trial court's Special Order.
We disagree. The CA may not be compelled to enforce a Special Order issued by the trial court.27 The CA has its own separate and original discretionary jurisdiction to grant or to stay execution pending appeal, except in civil cases decided under the Rules on Summary Procedure and in other cases when the law or the Rules provide otherwise.28 This writ of execution is similar to that which a regional trial court may issue for the protection and the preservation of the parties' rights that do not involve any matter being litigated in the appeal pursuant to Section 2, Rule 39 of the Rules.29
Rule 39 of the 1997 Rules states:
The foregoing sections mean that after the perfection of the appeal and the transmittal of the records, the trial court loses jurisdiction over the case. Henceforth, it may no longer grant a motion for, or issue a writ of immediate execution;30 to do so would be an abuse of discretion.
While it is true that the trial court granted the Motion of the petitioner for execution pending appeal, it did not actually issue a writ of execution, because the latter had failed to comply with the Special Order proviso requiring the posting of a bond. Eventually, two separate appeals filed by both parties were perfected, and the records of the case were transmitted by the RTC to the CA. From then on, the trial court lost jurisdiction to issue the said writ. When the petitioner asked the CA for the issuance of the writ at the time, it thereby invoked the original discretionary jurisdiction of the latter to grant execution pending appeal.
Petitioner argues that its filing with the CA of the Motion for Issuance of Premature Execution did not bar it from questioning the appellate court's jurisdiction to order a stay of execution. Petitioner may be correct, but it is equally true that, as previously stated, the law verst the CA with jurisdiction to grant or deny discretionary execution, with or without estoppel on the part of the former.31
Petitioner argues that the questioned CA Resolution granting a stay of execution pending appeal violates the judicial policy against the splitting of jurisdiction, because the execution had already been granted by the trial court. This contention is untenable. The wrong notion arises from the mistaken insistence that the CA must implement the RTC Order. In this light, it becomes clear that the appellate court committed no splitting of jurisdiction. Verily, it used its own authority under the Rules to issue the said Resolution.
Discretionary Execution Pending Appeal
In its assailed September 21, 1998 Resolution, the Court of Appeals ordered the stay of execution pending appeal upon the filing of a supersedeas bond on the ground that respondent's liability still has to be determined. It held: "Considering however that [respondent's] liability, if any, still has to be determined in this appeal, the Court deems it just and proper to allow [respondent] to post a bond to stay the discretionary execution pursuant to Section 3, Rules 39 of the 1997 Rules of Civil Procedure."32
In challenging this ruling, petitioner reasons that "the uncertainty of the outcome of the appeal cannot be deemed a just and proper ground to stay the immediate execution of the judgment appealed from."33 Citing Mapua v. David,34 it posits that the manifest validity or frivolity of the appeal are of no moment in the determination of whether execution should be stayed or not. In that case, this Court held that "the merits of the case should not be determined at this stage of the proceedings, in advance of the appeal taken by both parties from the judgment rendered by respondent court in the principal case."35 Petitioner further maintains that "the immediate execution of the judgment appealed from is founded on paramount and compelling reasons of urgency and justice that outweigh the security offered by the supersedeas bond . . .."36 Otherwise stated, petitioner's contention is that the order of the CA cannot be grounded on the bare allegations (1) that an appeal is pending and (2) that respondent will file a supersedeas bond.
In addressing this issue, the Court must stress that the execution of a judgment before its finality must be founded upon good reasons. The yardstick remains the presence or the absence of good reasons consisting 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. Good reason imports a superior circumstance that will outweigh injury or damage to the adverse party.37 In the case at bar, petitioner failed to show "paramount and compelling reasons of urgency and justice." Petitioner cites as good reason merely the fact that "it is a small-time building contractor that could ill-afford the protracted delay in the reimbursement of the advances it made for the aforesaid increased-costs of . . . construction of the [respondent's] buildings."38
Petitioner's allegedly precarious financial condition, however, is not by itself a jurisprudentially compelling circumstance warranting immediate execution. The financial distress of a juridical entity is not comparable to a case involving a natural person such as a very old and sickly one without any means of livelihood,39 an heir seeking an order for support and monthly allowance for subsistence,40 or one who dies.
Indeed, the alleged financial distress of a corporation does not outweigh the long standing general policy of enforcing only final and executory judgments. Certainly, a juridical entity like petitioner corporation has, other than extraordinary execution, alternative remedies like loans, advances, internal cash generation and the like to address its precarious financial condition.
Having come to the conclusion that extraordinary execution is not proper, the Court finds no more need to determine whether the filing of a supersedeas bond is, by itself, sufficient reason to stay the execution of a judgment pending appeal, because such issue has become moot. As a rule, "courts will not determine a moot question or abstract proposition or express an opinion in a case in which no practielief can be granted."41 While there are exceptions to this general principle, none exists in the factual milieu of the present controversy.
The trial court denied respondent's Motion for a stay of execution; hence, petitioner avers that the re-filing of a similar Motion before the CA constituted forum-shopping.
This allegation is incorrect. The trial court did not pass upon the merits of the Motion for a stay of execution filed by the respondent. In its Order dated March 19, 1998, it held that respondent's offer to file a counterbond was premature, inasmuch as the petitioner had yet to file its own bond. Instead of resolving the Motion on its merits, the RTC elected to forward the records of the case to the CA. As a consequence, the denial of JFC's Motion for Reconsideration of the RTC's Special Order granting immediate execution cannot be construed as a denial of the Motion to Stay Execution.
In the appellate court, the respondent cannot be faulted for moving for a stay of the execution, because the petitioner had submitted the issue of immediate execution for the CA's consideration This was not a willful act of shopping for a responsive forum, as the respondent was not initiating in another forum an action or motion designed to trifle with the orderly administration of justice. Rather, it was an act of protecting its own interest at the proper time and opportunity.
As already stated, the appellate court is authorized by the Rules to order or to stay execution pending appeal upon good reason. DCCI's alleged financial distress, by itself, is not a compelling reason to order immediate execution. On the other hand, mere filing by JFC of a supersedeas bond does not automatically entitle it to a stay of execution.
WHEREFORE, the assailed Resolutions are SET ASIDE. This Court finds no "good reasons" to grant extraordinary execution in the context of the present case. No pronouncement as to costs.
Melo, Vitug, Purisima and Gonzaga-Reyes, JJ., concur.
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