Lack of good reasons

A judgment may be executed only when the losing party has not appealed or waived his right to appeal or when the period to appeal has lapsed without an appeal having been filed or when, the appeal having been filed, it has already been resolved and the records of the case returned to the court of origin. In some exceptional cases however, execution pending appeal may be granted for “good reasons”. This is what the heirs of Dado tried to do but without success. Let’s find out why.

On February 6, 1980 Dado and his wife Charing bought from Alfonso agricultural lots consisting of about 9.5 hectares and duly covered by Transfer Certificates of Titles (TCTs). Unfortunately however, they did not cause the titles to be transferred in their names although they religiously paid the property’s real estate taxes.

Eighteen years later or in 1998, when the municipal treasurer refused to accept payment of their taxes, the spouses discovered that an insurance company (PIC) had already attached the land in satisfaction of a judgment rendered in its favor in a case filed against its former owner Alfonso before the Regional Trial Court (RTC) in Manila.

So on March 11, 1999 Charing and the other children of Dado who already died (the Heirs) filed before the RTC in their province an action against PIC for the annulment of the notice of lis pendens, attachment, execution of judgment and sheriff’s certificate of sale annotated on the registered titles still in the name of Alfonso.

In its defense PIC claimed that when it caused the annotations of said liens on said titles, the same were free of any adverse claim.

On November 25, 2002, the RTC rendered judgment upholding the rights of the Heirs over the land which already had a market value of P42 million. It ordered them to reimburse PIC its bid price of P1,750,000 plus the real estate taxes already paid by the latter with 6% interest but also ordered Alfonso to reimburse them with what they have paid PIC plus P500,000 actual damages and P200,000 attorney’s fees.

On December 20, 2002, PIC appealed the said decision to the Court of Appeals. On the same day however, the Heirs also filed a Motion for Execution pending appeal citing as good and special reasons, the following: (1) Charing may not be able to live long enough or survive to enjoy the reliefs and rights granted because of her advanced age and life-threatening illness; (2) PIC’s dilatory and frivolous appeal and strong likelihood of becoming insolvent during the pendency of the appeal; and (3) the Heirs willingness to post a bond for whatever damage PIC might suffer on account of the execution.

On February 11, 2003, the RTC issued a special order directing the execution of the judgment pending appeal upon posting of a P4 million bond despite the opposition of PIC. The RTC found the grounds cited by the Heirs as good and special reasons to grant the execution pending appeal. Was the RTC correct?

No. The court’s discretion in allowing execution pending appeal must be strictly construed and firmly grounded on the existence of good reasons. “Good reasons” consist of compelling circumstances that justify immediate execution lest the judgment becomes illusory. The circumstances must be superior, outweighing the injury or damages that might result should the losing party secure a reversal of the judgment. Lesser reasons would make execution pending appeal a tool of oppression and inequity instead of an instrument of solicitude and justice.

In this case, only Charing is of advanced age and suffering from life threatening illness but the RTC has allowed execution pending appeal for all the Heirs not just for Charing whose share in the subject lands had not been established. Consequently, the execution pending appeal is indiscreet and too sweeping. All the lands could be sold for P42 million and distributed to all the Heirs for their enjoyment with no sufficient assurance that they will and can return such sum if the CA reverses, the RTC decision. Moreover it is unclear how much of the proceeds of the sale of the lands Charing needs for her old age.

PIC’s dilatory tactics and possibility of insolvency are purely speculative. It is not in the hands of PIC whether the proceedings on appeal will be delayed because the CA has control of the time element in appealed cases. The possibility of PIC’s insolvency is irrelevant because the judgment did not require PIC to pay them any form of damages. Indeed the Heirs are the ones required to reimburse PIC the value of the bid and real estate taxes it had paid on the properties.

Lastly the Heirs’ posting of a P4 million bond to answer for damages if the RTC decision is reversed on appeal is quite insufficient as the lands already had a market value of P42 million (Florendo etc. vs. Paramount Insurance Corp. etc G.R. 167976, January 20, 2010).

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