SECOND DIVISION
JP
LATEX TECHNOLOGY, INC., G.R. No. 177121
Petitioner,
Present:
QUISUMBING,
J.,
- versus - Chairperson,
CARPIO
MORALES,
TINGA,
BALLONS
GRANGER BALLOONS, VELASCO,
JR., and
INC.
AND CHRISTOS SANTORINEOS, BRION,
JJ.
THE
OFFICE OF THE CLERK OF
COURT
AND EX-OFFICIO SHERIFF
OF
BIÑAN, LAGUNA, TATSUYA Promulgated:
OGINO
AND KATSUMI WATANABE,
Respondents. March 16, 2009
x
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D E C I S I O N
Tinga, J.:
Before
the Court is a petition for review on certiorari[1]
under Rule 45 of the 1997 Rules of Civil Procedure, which seeks the reversal of
the Court of Appeals decision[2]
and resolution[3] in
CA-G.R. SP No. 96926 and the issuance of a temporary restraining order to
enjoin respondents from enforcing the order of execution pending appeal issued
by Hon. Romeo C. De
The
following factual antecedents are matters of record.
Respondent
Ballons Granger Balloons, Inc. (Granger) is a foreign corporation duly
organized and existing under the laws of
The complaint,[4] docketed as Civil Case No. B-6527, alleged
that Ogino, representing himself as the president of petitioner corporation, and
respondent Santorineos entered into a contract for the sale of respondent Granger’s
machinery consisting of four dipping lines and all associated equipment for the
amount of US$1,230,000.00 and other non-cash considerations consisting of a 20%
shareholding in petitioner’s distribution company and the distributorship of its
balloons in Canada and Greece. Although respondent Granger had performed its
end of the bargain by re-assembling the subject machinery in petitioner’s factory
in Biñan and transferring its dipping formulations and technology to petitioner,
the latter allegedly paid only a partial sum of US$748,262.87 and reneged on
its other non-cash commitments. According to respondent Granger, it made
several written and verbal demands for the full payment of the purchase price
to no avail. The complaint was accompanied by an application for the issuance
of a writ of replevin.[5]
Petitioner and Ogino separately filed
their respective answers with counterclaims while Watanabe failed to submit any
responsive pleading. Watanabe was thereafter declared in default. After
declaring in default for his non-appearance at the scheduled pre-trial
conference, the RTC allowed respondent Granger to present ex-parte. On
While the case was pending or on
WHEREFORE,
premises considered, judgment is hereby rendered:
a.
Resolving/rescinding
the subject agreement between the parties and confirming plaintiffs’ right of
ownership and possession over the subject machines/equipments and their
accessories including plaintiffs’ dipping technology, formulations and recipes;
b.
Ordering
defendant JP LATEX Technology, Inc., its officers or any other person in
possession thereof to immediately return and deliver to the plaintiffs or any
of its representatives the ownership and possession of dipping lines one (1)
and two (2) including their accessories;
c.
Ordering
defendant JP LATEX Technology, Inc., its officers or any of its representatives
to cease and desist from using the plaintiffs’ dipping formulations and
technology;
d.
Ordering
defendants to pay the plaintiffs jointly and severally the amount of U.S.
$1,500,000.00 by way of actual damages plus legal interest until fully paid;
and
e.
Ordering
defendants to pay plaintiff Christos Santorineos the amount of P1,000,000.00
by way of moral damages and to pay plaintiffs the amount of P500,000.00
by way of exemplary damages and P500,000.00 as attorney’s fees and
expenses of litigation.
Send copy of this decision to the parties in this
case.
SO ORDERED.[8]
After it received a copy of the RTC decision
on
In the Order[13]
dated
On
Thus, petitioner and Ogino filed a
special civil action for certiorari under Rule 65 before the Court of Appeals.
Named respondents were Judge Romeo C. De Leon, Clerk of Court Rowena A.M.
Galeon, Sheriff Joel Arellano, respondents Granger and Santorineos.[15]
The petition for certiorari averred that Judge De Leon had seriously erred and
gravely abused his discretion amounting to lack or in excess of jurisdiction in
arbitrarily and unreasonably issuing the Order dated
On
Hence, the instant petition with
urgent application for immediate issuance of a temporary restraining order (TRO)
or writ of preliminary injunction.
In a Resolution dated
The petition raises the following
questions of law:
A. WHETHER EXECUTION PENDING APPEAL MAY BE ISSUED AND
IMPLEMENTED WHEN THE DECISION SOUGHT TO BE EXECUTED IS NOT YET FINAL BECAUSE OF
THE PENDING AND UNRESOLVED MOTION FOR RECONSIDERATION OF THE DECISION SOUGHT TO
BE EXECUTED PENDING APPEAL.
B. WHETHER A MOTION FOR RECONSIDERATION IS A MANDATORY
REQUIREMENT FOR FILING A PETITION FOR CERTIORARI UNDER RULE 65 UNDER THE
CIRCUMSTANCES OF THE CASE.[23]
The Court of Appeals denied the
petition for certiorari only because petitioner had failed to seek
reconsideration of the RTC order directing the execution “pending appeal” of
its decision or to show that the circumstances of the case fall under any of the
exceptions to the rule that a motion for reconsideration is an indispensable
condition to the filing of a special civil action for certiorari.
For its part, petitioner claims before
this Court that as exceptions to the aforesaid rule, the following
circumstances exist in the instant case: (1) the question is purely legal; (2)
juridical intervention is urgent; (3) the application of the general rule may
cause great and irreparable damage; (4) the controverted acts violate due
process.[24]
As a general rule, a petition for
certiorari before a higher court will not prosper unless the inferior court has
been given, through a motion for reconsideration, a chance to correct the
errors imputed to it. This rule, though, has certain exceptions, namely: (1)
when the issue raised is purely of law; (2) when public interest is involved;
or (3) in case of urgency. As a fourth exception, the Court has ruled that the
filing of a motion for reconsideration before availment of the remedy of
certiorari is not a sine qua non, when the questions raised are the same
as those that have already been squarely argued and exhaustively passed upon by
the lower court.[25]
In the instant case, the issue raised
is purely an issue of law. Moreover, following the fourth exception, a motion
for reconsideration of the RTC order allowing the immediate execution of its
decision is no longer necessary in view of the fact that the RTC had already passed
upon the propriety of respondents’ motion for execution “pending appeal” on two
occasions. It should be noted that on the first occasion, the RTC denied
respondents’ motion for execution “pending appeal,” prompting them to seek
reconsideration of its denial. In the second instance, the RTC reversed itself
and allowed the execution “pending appeal.” On these two occasions, the parties
had been accorded ample avenue to squarely and exhaustively argue their positions
and the RTC more than enough opportunity to study the matter and to deliberate
upon the issues raised by the parties. Thus, the filing of another motion for
reconsideration of the order of execution “pending appeal” by petitioner could
not be considered a plain and adequate remedy but a mere superfluity under the
circumstances of the case.
Now to the issue of the propriety and
viability of the order of immediate execution.
Execution pending appeal or immediate
execution, which is now called discretionary execution under Rule 39, Section
2(a), 1997 Rules of Civil Procedure, as amended, is allowed pending appeal of a
judgment or final order of the trial court, upon good reasons to be stated in a
special order after due hearing.[26]
Section 2 (a) of Rule 39 expressly states:
SEC. 2. Discretionary execution. –
(a) Execution of a judgment or a final order
pending appeal. – On motion of the prevailing party with notice to the adverse
party filed in the trial court while it has jurisdiction over the case and is
in possession of either the original record or the record on appeal, as the
case may be, at the time of the filing of such motion, said court may, in its
discretion, order execution of a judgment or final order even before the
expiration of the period to appeal.
After the trial court has lost jurisdiction, the
motion for execution pending appeal may be filed in the appellate court.
Discretionary execution may only issue upon good
reasons to be stated in a special order after due hearing.
It is clear from the caption of the
provision that discretionary execution is allowed only when the period to
appeal has commenced but before the trial court loses jurisdiction over the
case. The period to appeal where a motion for reconsideration has been filed as
in the instant case commences only upon the receipt of a copy of the order
disposing of the motion for reconsideration. The pendency of a motion for
reconsideration, therefore, prevents the running of the period to appeal.
In the instant case, petitioner filed
a motion for reconsideration of the RTC decision. The records of the case show
that the motion had not been acted upon by the RTC before it ruled on
the motion for execution “pending appeal.” That being the case, the pendency of
the motion for reconsideration has prevented the period to appeal from even
commencing. The period within which a party may move for an execution pending
appeal of the trial court’s decision has not yet also started.
Where there is a pending motion for
reconsideration of the RTC decision, an order execution pending appeal is
improper and premature. The pendency of the motion for reconsideration legally
precludes execution of the RTC decision because the motion serves as the
movant’s vehicle to point out the findings and conclusions of the decision
which, in his view, are not supported by law or the evidence[27]
and, therefore, gives the trial judge the occasion to reverse himself. In the
event that the trial judge finds the motion for reconsideration meritorious, he
can of course reverse the decision.
In the absence of an appeal from the
decision, as the motion for reconsideration is still unresolved, the execution
ordered by the RTC cannot be properly considered as execution pending appeal.
All references to the assailed order as an order of execution “pending appeal”
are mislabeled.
The need to resolve first, or better
still deny, petitioner’s motion for reconsideration before the RTC could grant
the discretionary execution becomes more imperative in the light of the rule
that executions pending appeal are frowned upon. Without preempting the
resolution of petitioner’s motion for reconsideration one way or the other, a
perusal thereof shows that petitioner had raised questions and issues which
were not thoroughly discussed and passed upon in the RTC decision. The RTC
should have resolved these issues first before allowing the discretionary
execution of its judgment if only to preclude any speculation that the order of
execution “pending appeal” was issued in haste. Said failure constitutes grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of the
RTC judge.
In any event, the Court does not find
any good reason to justify the execution of the RTC decision pending finality. The RTC’s finding that the
machinery under litigation was deteriorating is not supported by the evidence
on record. Nor is the possibility that petitioner would not be able to pay the
judgment award a good reason to order discretionary execution. The good reasons
allowing execution pending appeal must constitute superior circumstances
demanding urgency that will outweigh the injuries or damages to the adverse
party if the decision is reversed.[28]
WHEREFORE, the instant petition for
review on certiorari is GRANTED and the decision and resolution of the Court of
Appeals in CA-G.R. SP No. 96926, as well as the Order dated 10 November 2006
and the writ of execution issued pursuant thereto by the Regional Trial Court,
Branch 24 of Biñan, Laguna in Civil Case No. B-6527, are REVERSED and SET
ASIDE.
SO ORDERED.
DANTE O. TINGA
Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
CONCHITA CARPIO MORALES PRESBITERO J.
VELASCO, JR.
Associate Justice Associate Justice
ARTURO D. BRION
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.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson,
Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division 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
[2]Id. at 39-79; Dated 22 December 2006 and penned by Justice Arturo G. Tayag and concurred in by Justices Remedios A. Salazar-Fernando, Chairperson of the 10th Division, and Noel G. Tijam.
[26]Heirs
of the Late Justice Jose BL Reyes v. Court of Appeals, G.R. Nos. 135180-81;
135425-26,