SECOND DIVISION
GEOLOGISTICS,
INC., (formerly G.R. Nos.
174256-57
LEP
International Philippines, Inc.),
Petitioner,
Present:
- versus - AUSTRIA-MARTINEZ,*
TINGA,
Acting
Chairperson,
GATEWAY
ELECTRONICS VELASCO,
JR., and
CORPORATION
and FIRST BRION,
JJ.
LEPANTO
TAISHO INSURANCE,
CORPORATION,
Respondents. Promulgated:
March
25, 2009
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D E C I S I O N
Tinga, J.:
This
is a petition for review on certiorari,[1] praying
for the reversal of the amended decision[2] of
the Court of Appeals in CA-G.R. SP No. 68465 and CA-G.R. SP No. 69441 and the reinstatement
of the order[3] of the Regional
Trial Court (RTC), Branch 260,
As
culled from the records of the case, the following factual antecedents appear:
Petitioner
Geologistics, Inc., formerly known as LEP International Philippines, Inc., is a
domestic corporation engaged in the business of freight forwarding and customs
brokerage. On P4,769,954.32,
representing the fees, including interest owed by respondent Gateway for petitioner’s
services as customs broker and freight forwarder.
The RTC subsequently issued a writ of
preliminary attachment on the properties of respondent Gateway, prompting the
latter to move for its dissolution. Respondent First Lepanto-Taisho Insurance
Corporation (respondent surety) filed a counter-bond in the amount of P5
million to secure the payment of any judgment that petitioner could recover from
respondent Gateway.[5]
After
hearing on the merits, the RTC rendered a Decision[6] dated
WHEREFORE,
judgment is hereby rendered ordering defendant to pay the plaintiff:
1. The sum of Four Million Seven Hundred Sixty Nine
Thousand Nine Hundred Fifty Four and Thirty Two Centavos (P4,769,954.32)
Pesos, plus the stipulated three (3%) interest per month computes starting
2. The amount of Two Hundred Thousand (P200,000.00)
Pesos as exemplary damages for wanton and fraudulent acts of defendants, to
serve as an example for the public good and to deter other from doing same
acts.
3. The amount of One Million One Hundred Ninety Two
Thousand Four Hundred Eighty Eight pesos (P1,192,488.00) representing
the stipulated Twenty Five percent (25%) attorney’s fees; and,
4. Costs.
Accordingly, the defendant’s counterclaim is hereby
DISMISSED.
SO ORDERED.[7]
Petitioner
filed a motion for execution pending appeal on
After petitioner’s filing of a reply
to respondent Gateway’s opposition, the motion was submitted for resolution.
Respondent Gateway also filed a notice of appeal on
In an Order dated P4,769,954.32.[12]
The writ of execution, directing respondent surety to comply with the order of
the RTC within five days from notification, was served on
Respondent
surety filed a motion to set aside the P4,769,954.32
“without prejudice to the right of reimbursement thereafter” from respondent
Gateway.[14]
On
Meanwhile, both respondents filed
separate Rule 65 petitions before the Court of Appeals against Judge Ricafort, Atty.
Clement Boloy, in his capacity as Ex-Officio Sheriff, Lucas Elosoceje, in his
capacity as Sheriff, and herein petitioner.
In the petition for certiorari,
prohibition and mandamus (with urgent prayer for the issuance of a temporary
restraining order and/or writ of preliminary injunction),[16] docketed
as CA-G.R. SP No. 68465, respondent Gateway advanced the following arguments: (1)
no good reason existed to justify execution pending appeal especially
considering the fact that the case had already been elevated on appeal; (2) the
ground cited in the assailed order was not supported by the evidence on record;
and (3) a writ of partial execution can implement only a partial judgment.[17]
Respondent Gateway’s petition was
initially dismissed by the appellate court, but upon motion for
reconsideration, the appellate court ordered its reinstatement and the issuance
of a temporary restraining order (TRO) against the enforcement of the RTC’s Decision
and the Order dated
Respondent surety’s petition for
certiorari, docketed as CA-G.R. SP No. 69441, sought the nullification of the
RTC orders issued on 10 December 2001 and 19 February 2002, the quashal of the
writ of execution, the issuance of a TRO and a writ of preliminary injunction
to enjoin the implementation of the writ of execution and the return of the
garnished amount to respondent surety.[19]
During the pendency of the two
petitions, the Board of Directors of respondent Gateway resolved on
On
WHEREFORE, the petition is GRANTED. The order dated
December 10, 2001 of the Regional Trial Court of Parañaque City (Branch 260)
and the writ of execution issued pursuant thereto are hereby ANNULLED and SET
ASIDE. Respondent LEP International Phils., Inc. is hereby ordered to return the
amount of P4,769,954.32 to First Lepanto-Taisho Insurance Corporation’s
deposit account.
SO ORDERED.[22]
Subsequently, on
WHEREFORE, the petition is partly granted and the
Order dated
In other words, private respondent must return to
First Lepanto (petitioner herein) the amount garnished by the sheriff pursuant
to the notice of garnishment, otherwise, petitioner would be compelled to
reimburse First Lepanto for the same.
WHEREFORE, the petition is GRANTED. The Order dated
December 10, 2001 of the Regional Trial Court of Parañaque City (Branch 260)
and the writ of execution issued pursuant thereto are hereby ANNULLED and SET
ASIDE. Respondent LEP International Phils., Inc. is hereby ordered to return
the amount of P4,769,954.32 to First Lepanto-Taisho Insurance
Corporation’s deposit account.
SO ORDERED.
Pursuant to Section 3, Rule III of the 2002 Internal
Rules of the Court of Appeals, as amended, subject to the conformity of the
Justice who penned the aforequoted Decision, let this case be consolidated with
CA-G.R. SP No. 68465.
SO ORDERED.[24]
Petitioner moved for reconsideration[25]
of the decision in CA-G.R. SP No. 68465 while respondent surety sought to
modify the decision in CA-G.R. SP No. 69441 to include an award of interest on
the amount ordered returned to it by the appellate court.[26]
On
WHEREFORE, premises considered, this Court resolves as
follows:
1. In CA-G.R. SP No. 68465. –
For lack of merit, private respondent’s motion for
reconsideration of the decision dated
“WHEREFORE, the petition is GRANTED. The order dated
December 10, 2001 of the Regional Trial Court of Parañaque City (Branch 260)
and the writ of execution issued pursuant thereto are hereby ANNULLED and SET
ASIDE.
SO ORDERED.”
2. In CA-G.R. SP No. 69441 –
Petitioner’s motion for partial reconsideration of the
decision dated
“WHEREFORE, the petition is partly granted and the
Order dated
For lack of merit, the motion for reconsideration
filed by respondent LEP International Phils., Inc. is DENIED.
SO ORDERED.[27]
Hence, the instant petition, arguing
that the Court of Appeals’ decision erred in holding that no good reasons
existed to warrant the discretionary execution of the RTC decision and that it
would render nugatory the RTC judgment to the prejudice of petitioner. The
petition also assails the appellate court’s ruling that the filing of a motion
for reconsideration was not a condition precedent to the filing of respondents’
petition for certiorari. Last, the petition reiterates the claim that
petitioner was neither in possession nor in control of the goods subject of
respondent Gateway’s counterclaim.[28]
Respondent
Gateway filed a motion, praying that it be excused from filing a comment on the
petition on the ground that it had filed a petition for voluntary insolvency
before the RTC of Imus,
At
the core of the instant petition is the question of whether a sufficient ground
exists warranting the discretionary execution of the RTC decision. In granting
petitioner’s motion for execution pending appeal, the RTC gave weight to the
fact that the case had been pending since 1997 and the alleged admission of
liability on the part of respondent Gateway, which the Court of Appeals found
to be unsupported by the evidence on record. Petitioner now counters that only
the exact amount of liability is disputed but not respondent’s admission of
liability. It claims that in the certiorari proceeding, even the Court of
Appeals acknowledged that respondent Gateway did admit owing petitioner the
principal amount of P4,138,864.70 and not P4,769,954.32 which was
the amount garnished pursuant to the writ of execution and the dispositive
portion of the RTC decision.
The rule on execution pending appeal,
which is now termed discretionary execution under Rule 39, Section 2 of the
Rules of Court, must be strictly construed being an exception to the general
rule.[30] Discretionary
execution of appealed judgments may be allowed upon concurrence of the
following requisites: (a) there must be a motion by the prevailing party with
notice to the adverse party; (b) there must be a good reason for execution
pending appeal; and (c) the good reason must be stated in a special order. 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. Since the execution of a judgment pending appeal is an exception to the
general rule, the existence of good reasons is essential.[31]
The Rules of Court does not state,
enumerate, or give examples of “good reasons” to justify execution. The determination of what is a good reason
must, necessarily, be addressed to the sound discretion of the trial court. In
other words, the issuance of the writ of execution must necessarily be
controlled by the judgment of the judge in accordance with his own conscience
and by a sense of justice and equity, free from the control of another’s
judgment or conscience. It must be so for discretion implies the absence of a
hard and fast rule.[32]
The grounds cited by the RTC in
allowing the discretionary execution of its decision cannot be considered “good
reasons.” The alleged admission by respondent Gateway of its liability is more
apparent than real because the issue of liability is precisely the reason the
case was elevated on appeal. The exact amount of respondent Gateway’s liability
to petitioner remains under dispute even if, as claimed by petitioner, the
evidence on record indicates that respondent Gateway’s obligation is almost a
certainty. Precisely the appeal process must be allowed to take its course all
the way to the finality of judgment to determine once and for all the incidents
of the suit.
The fact alone that in the certiorari
proceeding, the Court of Appeals also found respondent Gateway to have admitted
its liability for a different amount is not automatically considered as a “good
reason” to order discretionary execution. Petitioner is preempting the Court of
Appeals’ review of the RTC decision in insisting that in the certiorari
proceeding, the Court of Appeals should have simply ordered the discretionary
execution of the amount which it found to have been admitted by respondent
Gateway.
Another factor that militates against
petitioner’s claim that any judgment in its favor may become illusory if
execution pending appeal is not allowed is the fact that petitioner is
considered a secured creditor on account of the counterbond posted by
respondent surety. The said counterbond, posted as it was to discharge the
attachment in favor of petitioner, serves as security for the payment of any
judgment that petitioner may recover in the instant action.[33] Following
its argument that respondent Gateway’s obligation to petitioner is almost a
certainty, petitioner will not find it hard to recover its monetary claim once
final judgment is rendered in its favor because petitioner can certainly
garnish the counterbond.
As regards petitioner’s assigned
error that there was no basis for the Court of Appeals to declare that
respondent Gateway’s principal liability would be offset by its counterclaim
for the recovery of the goods allegedly held by petitioner, suffice it to say
that this controversy should be properly ventilated on appeal. All the more,
petitioner’s prayer for execution pending appeal should be denied because there
are questions in the instant controversy, other than the issue of respondent
Gateway’s principal liability, that need to be resolved on appeal. Thus, the order
allowing execution pending appeal would render nugatory the decision of the
Court of Appeals on the appeal.
Petitioner argues that the Court of
Appeals erred in holding that the filing of a motion for reconsideration was
not a requirement for the appellate court to acquire jurisdiction over the
petition for certiorari, prohibition and mandamus.
As a general rule, a petition for
certiorari before a higher court will not prosper unless the inferior court has
not been given, through a motion for reconsideration, a chance to correct the
errors imputed to it. This rule, though, has certain exceptions: (1) when the
issue raised is purely of law, (2) when public interest is involved, or (3) in
case of urgency.[34]
Respondent Gateway’s explanation on
this aspect, which the Court of Appeals found sufficient, is that the assailed
order of discretionary execution was already being implemented, thereby leaving
it with no plain, speedy and adequate remedy other than to file the petition
for certiorari, prohibition and mandamus before the Court of Appeals.
Considering the urgency of the matter, the Court finds that under the
circumstances of the case, the filing of a motion for reconsideration was
properly dispensed with, more so since the issue of validity of the execution
pending appeal is a pure question of law.
For respondent surety’s part, it did
observe the requirement of a motion for reconsideration. Before filing the
petition for certiorari before the Court of Appeals, respondent surety filed a
motion to set aside the
Thus, the Court sustains the lifting
of the garnishment on the amount of P4,769,954.32 under respondent
surety’s deposit account in Banco de Oro. However, the Court of Appeals’ award of
interest on said amount has no legal or factual basis and must be deleted.
Notably, said amount was garnished by virtue of a court order. Petitioner
cannot be faulted and be held liable for the errors committed by the RTC and
the sheriffs concerned in the discretionary execution.[35]
WHEREFORE, the instant petition for review on
certiorari is DENIED. The Amended Decision dated
SO ORDERED.
DANTE
O. TINGA
Associate
Justice
WE CONCUR:
(On Official Leave)
LEONARDO A.
QUISUMBING
Associate
Justice
Chairperson
MA. ALICIA
Associate Justice Associate
Justice
PRESBITERO J. VELASCO, JR. ARTURO D. BRION
Associate Justice Associate
Justice
ATTESTATION
I attest that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
DANTE
O. TINGA
Associate
Justice
Acting Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Acting Chairperson’s Attestation, it is
hereby certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief
Justice
*Additional member per res dated
**Additional member per Special Order No. 600 in lieu of J. Carpio Morales who is on official business.
[1]Rollo, pp. 16-41.
[2]Dated 17 August 2006 and penned by Edgardo P. Cruz, J., Chairman of the Special Former First Division, and concurred in by Rosmari D. Carandang and Jose C. Mendoza, JJ.; id. at 8-13.
[26]CA rollo (CA-G.R SP No. 69441) p. 148; Motion for Partial Reconsideration of First Lepanto-Taisho Insurance Corporation.
[31]Manacop v. Equitable PCI Bank, G.R. No. 162814-17, 25 August 2005, 468 SCRA 256, citing Maceda, Jr. v. Development Bank of the Philippines, 372 Phil. 107, 117; 313 SCRA 233, 242 ; Diesel Construction Company, Inc. v. Jollibee Foods Corp., 380 Phil. 813, 829; 323 SCRA 844, 859 (2000); Flexo Manufacturing Corporation v. Columbus Foods, Inc. and Pacific Meat Company, Inc., G.R. No. 164857, 11 April 2005, 455 SCRA 272.
[32]Far
East Bank and Trust Co. v. Toh, Sr., 452 Phil. 734, 742-743 (2003), citing City
of Manila v. Court of Appeals, G.R. No. L-35253,
[33]Rules of Court, Rule 57, Section 12 states: Discharge of attachment upon giving counterbond. — After a writ of attachment has been enforced, the party whose property has been attached, or the person appearing on his behalf, may move for the discharge of the attachment wholly or in part on the security given. x x x In either case, the cash deposit or the counter-bond shall secure the payment of any judgment that the attaching party may recover in the action. x x x (Emphasis supplied.)