G.R. No. L-31569




Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-31569 September 28, 1973 INES LORBES PADILLA, VERONICA PADILLA, ABUNDIO PADILLA, SALVADOR PADILLA, ELENA PADILLA, HONORIO PADILLA, CARMEN PADILLA, FE PADILLA, PIEDAD PADILLA, petitioners, vs. THE HONORABLE COURT OF APPEALS, HERMINIO MARIANO, as presiding Judge of Court of First Instance of Rizal, Branch X, FLORENCIO NADERA, respondents. Florentino B. del Rosario for petitioners. Antonio R. Atienza for respondents. MAKALINTAL, Actg. C.J.: The only issue in this case is whether or not the court a quo, Branch X of the Court of First Instance of Rizal, committed a grave abuse of discretion in ordering immediate execution of its judgment in Civil Case No. 8128 and Case No. 6649, LRC (GLRO) Record No. 975, and whether or not respondent Court of Appeals erred in ruling that no such abused had been committed and dismissing the petition for certiorari as a consequence. The statement of facts in the instant petition before Us, which is reiterated verbatim in the brief, is too scanty to provide a proper understanding of this case. We therefore resort to the counter-statement in the brief for the respondents, which is not only uncontroverted by the petitioners but may be assumed as correct for the proper resolution of the issue involved because the facts therein recited are based on documents presented as evidence at the trial and because they are in substance the same as the facts found by the court a quo in its decision. The respondents' counter-statement is as follows: (a) The property in question was formerly owned by Vicente Padilla who mortgaged it to the Government Service Insurance System (hereafter referred to as G.S.I.S) to secure the payment of a loan of P25,000.00; (b) For failure of said mortgagor Vicente Padilla to pay the balance of the loan, the property in question was foreclosed and sold at public auction at which the G.S.I.S was the highest bidder; a certificate of sale was issued to the said entity and Vicente Padilla had one (1) year from the date of sale on October 7, 1960 to October 7, 1961 within which to redeem the foreclosed property. (c) After the expiration of said period of redemption, Vicente Padilla, his wife Ines Lorbes Padilla and daughter Fe Padilla, misrepresenting to the herein respondent Florencio R. Nadera that Vicente Padilla still had the right to redeem the property, executed on October 8, 1961 an Agreement of Purchase and Sale conveying to Nadera the said property in consideration of P35,000.00 of which P10,000.00 was paid on the same date by Nadera to, and received from him by, said Vicente Padilla, Ines Lorbes Padilla and Fe Padilla, and the balance of the purchase price, representing the indebtedness of Vicente Padilla to the G.S.I.S., was assumed by Nadera to be paid by him to the said entity. The G.S.I.S. was not a party to the said Agreement of Purchase and Sale and had not accepted as debtor in substitution for Vicente Padilla. (d) On November 27, 1961, Nadera discovered from the G.S.I.S. that Vicente Padilla had lost the right to redeem the foreclosed property. (e) On December 12, 1961, G.S.I.S. wrote to Vicente Padilla advising him that the period for redemption of the foreclosed property had expired on October 7, 1961 and that it contemplated to sell the same thru sealed public bidding at which Vicente Padilla may participate. (f) On June 28, 1962 the G.S.I.S. consolidated its ownership of the property in question and T.C.T. No. 100638 was issued in its name by the Register of Deeds for Rizal. (g) Vicente Padilla being a pensioner of the G.S.I.S., the latter had applied the former's pension which amounted to P10,194.24 to the credit of said Padilla on account of the loan afore-mentioned. Capitalizing on this fact, Nadera re-imbursed Vicente Padilla with the said amount of P10,194.24 and furthermore, he Nadera paid the G.S.I.S. the sum of P7,815.17 on July 31, 1963 (per O.R. No. D-8606865) and another sum of P8,049.99 on September 16, 1963 (per O.R. No. D-9124651). With the payments by Nadera both to Vicente Padilla and the G.S.I.S., in the total amount of P36,056.41 Nadera, therefore, even over-paid the consideration of P35,000.00 mentioned in the Agreement of Purchase and Sale executed by Vicente Padilla, Ines Lorbes Padilla and Fe Padilla on October 8, 1961 (vide, supra) (h) Instead of executing a deed of sale of the property in question in favor of Nadera, the G.S.I.S., for and in consideration of "(P8,044.49), Philippine currency, receipt of which in full is hereby acknowledged under O.R. No. D-9124651 dated September 16, 1963", executed on September 19, 1963,a deed of sale of the property in question in favor of the spouses Vicente Padilla and Ines Lorbes Padilla. Both spouses were signatories to the said deed of sales. In this regard, it will be noticed that the consideration stated in said deed is the same amount paid by Nadera, as aforesaid, to the G.S.I.S. under O.R. No. D-9124651. (i) On the following day, or on September 20, 1963 Vicente Padilla executed the deed of Confirmation of Sale which the herein petitioners question. For clarity, the substance of said deed, which was acknowledged before a notary public, is quoted as follows: "WHEREAS, the VENDORS had entered into an Agreement of Purchase and Sale on October 8, 1961, with the herein VENDEE which was acknowledged before a Manila Notary Public Felipe G. Lubaton on December 15, 1961, registered in his Notarial Registry as Doc. No. 138; Page No. 100; Book No. I; Series of 1961; "WHEREAS, the Title of the property subject matter of this Agreement was consolidated by the Government Service Insurance System on June 28, 1962; and "WHEREAS, the herein VENDEE has fully paid the account of the VENDOR to the G.S.I.S., the Government Service System has re-conveyed the ownership over the said property unto the VENDORS by virtue of the Deed of Absolute Sale executed on the 19th day of September, 1963, and acknowledged on the same date by Modesto B. Atmosphera, registered in his Notary Registry as Doc. No. 74; Page No. 16; Book No. I; Series of 1963; "NOW, THEREFORE, for and in consideration of the AGREEMENT OF PURCHASE AND SALE, which we undersigned VENDORS still confirm and acknowledge, we hereby CEDE, CONVEY, SELL and TRANSFER, in favor of the herein VENDEE, his heirs, administrator and assign, the above-mentioned property fully described in the two (2) documents specified above. "IN WITNESS WHEREOF, we set our hands this 20th day of September, 1963, in the City of Manila, Philippines. "(Sgd.) Vicente Padilla VICENTE PADILLA" The said deed was not, however, signed by Ines Lorbes Padilla, although the same was witnessed by FE PADILLA, daughter of the vendors. (j) By virtue of the registration of (1) the Deed of Absolute Sale executed by the G.S.I.S. in favor of the spouses Vicente Padilla and Ines Lorbes Padilla; (2) the agreement of Purchase and Sale which Vicente Padilla, Ines Lorbes Padilla and Fe Padilla had executed earlier in favor of Nadera; and(3) the Confirmation of Sale executed by Vicente Padilla, T.C.T. No. 100638 in the name of the G.S.I.S. was cancelled and, in lieu thereof, T.C.T. No. 116473 was issued by the Register of Deeds in the name of in the names of Vicente Padilla and Ines Lorbes Padilla. In turn, the said T.C.T. No. 116473 was cancelled and, in lieu thereof, T.C.T. No. 116474 was issued by the Register of Deeds for Rizal in the name of Florencio R. Nadera. (k) On October 4, 1963, petitioner Abundio Padilla claiming to be the attorney-in-fact of his parents Vicente Padilla and Ines Lorbes Padilla, filed with the Register of Deeds for Rizal a "Notice of Adverse Claim" which was annotated on T.C.T. No. 116474 of Nadera. (l) On February 28, 1964, Nadera filed a petition in Case No. 6649 of the Court of First Instance of Rizal for removal of the notation of adverse claim on his certificate of title and, pending the hearing of said petition, the herein petitioners, as plaintiff, filed in Civil Case No. 8128 of the same court, an amended complaint dated April 25, 1964 in which it was alleged as follows: "5. On October 20, 1963, through the use of insidious words and machinations; by means of undue and improper influence exerted on the late Vicente Padilla, who was at that time bed-ridden, seriously ill and confined in the hospital, defendant (Nadera) fraudulently and wilfully compelled the latter to sign in his favor a deed of confirmation of sale over the aforestated parcel of land covered by T.C.T. No. 116473. A copy of said deed of confirmation of sale is hereto attached as Annex "B" and made part hereof. "6. The said deed of confirmation of sale was likewise executed without the knowledge and consent of plaintiff Ines Lorbes Padilla." The two cases — Civil Case No. 8128 for cancellation of the certificate of title issued in favor of respondent Nadera, and Case No. 6649, LRC (GLRO) Record No. 975, filed by Nadera for a writ of possession and for cancellation of petitioners' adverse claim annotated on his certificate of title — were heard jointly and decided by the court a quo on February 27, 1969, in which decision the herein petitioners were ordered to turn over the possession of the property to respondent Nadera, to pay him the sum of P350 monthly byway of rentals from September 19, 1963 until such possession was transferred to him, P10,000.00 by way of moral damages and P3,000.00 as attorney's fees. On April 15, 1969 respondent Nadera filed with the trial court a motion for correction of a typographical error in the decision and for immediate issuance of a writ of execution, alleging that the petitioners were insolvent and that any appeal to be taken from the decision would be frivolous and dilatory. On April 19, 1969 the court ordered execution on a bond of P10,000 to be filed by the respondent. On April 26 the petitioners filed their record on appeal. On May 2 the trial court set aside its order of April 19, which it had issued without having heard the petitioners, and set the matter anew for hearing on May 17. On June 10, 1969, after having heard the parties, the court again issued a writ of execution, respondent Nadera having filed the required bond in the meantime. Two grounds are relied upon by the petitioners in support of their contention that the court a quo committed a grave abuse of discretion, namely, (a) that a mere allegation that the losing party is insolvent and that the appeal is frivolous and interposed merely for purposes of delay is not sufficient; and (b) that equitable considerations are in favor of the maintenance of the petitioners in possession of the property in question because the validity of the document which they had assailed in the trial court and which the latter had upheld was the subject of their appeal and therefore execution of the judgment while the issue was still open was premature. On the question of the petitioners' insolvency, the Court of Appeals found in its decision that "petitioners have not in the least met respondents even tangently therein except on the alleged rule that an averment of insolvency is not a good reason for execution pending appeal." Furthermore, said the court: "Petitioners never denied the imputation of their insolvency. The decision recites facts and cites documentary evidence which show that petitioners lost the property in question through a foreclosure sale." This finding, coupled with the fact that the petitioners allowed the mortgage of their property to be foreclosed for non-payment of their indebtedness, cannot but be demonstrative of the petitioners' incapacity to meet the monetary portion of the judgment against them, consisting of P350 in monthly rentals from September 19, 1963, P10,000 by way of moral damages and P3,000 as attorney's fees. On the question of equity, it need only be stated that respondent Nadera acquired the property by virtue of a deed of sale executed on October 8, 1961 in his favor by the spouses Vicente Padilla and Ines Lorbes Padilla and their daughter Fe Padilla after the property had been foreclosed and purchased at public auction by the Government Service Insurance System, and in fact after the Padillas had lost the right of redemption; that by arrangement with the GSIS as proposed by Vicente Padilla himself, the vendee, Florencio Nadera, paid the necessary amounts to redeem the property and reimbursed Vicente Padilla for other amounts due him; that thereafter the GSIS reconveyed the property to the Padilla spouses since they were the mortgage debtors and former owners of record, but that on the day following (September 20, 1963) Vicente Padilla executed a deed of confirmation of sale in favor of herein respondent, referring expressly to the original agreement of purchase and sale entered into by them on October 8, 1961. The petition now before Us, to be sure, does not involve a review of the facts. Such facts are now the subject of the appeal interposed by herein petitioners from the decision of the court a quo on the merits. However, since the issuance of execution pending appeal is a matter which is properly within the discretion of the court having jurisdiction, and such discretion may be interfered with only in case of grave abuse, the facts and circumstances which moved the court to act as it did and its own assessment of the equities of the case are entitled to considerable weight when grave abuse of discretion is alleged, particularly when the conclusions of said court are based on evidence that is not controverted. It is therefore pertinent to reproduce herein what the trial court said: To prove that the right of Vicente Padilla to redeem the property in question has expired, the defendant presented in evidence Exhibit "7" which is a letter of the GSIS to Vicente Padilla informing him of the expiration of said redemption period and suggested that he participate in a public bidding of the said property; that notwithstanding the application of the accrued pension of Vicente Padilla to his obligation with the GSIS, the amount due the GSIS was not still paid and so title was consolidated in the name of the GSIS for which TCT No. 100638 of the Registry of Deeds for Rizal was issued. However, arrangement was made with the GSIS that Vicente Padilla be allowed to pay the remaining balance for which Vicente Padilla wrote the GSIS to accept from Nadera the amount of P5,675.00 plus the additional amount of P1,000.00 to make a total of P7,000.00 for which a joint affidavit was executed on September 12, 1962 by Vicente Padilla, his wife Ines Lorbes Padilla and Fe Padilla evidencing the fact that the obligation of Vicente Padilla had been assumed by Florencio Nadera as per their Agreement of Purchase and Sale executed on October 8, 1961. Said joint affidavit was marked as Exhibit "9"; that by virtue of said payment of P7,087.83, the GSIS issued a statement of account (Exh. "10") showing that the balance of Vicente Padilla's obligation is P19,164.75 as of August 31, 1962; that by virtue of the agreement between Vicente Padilla and Florencio Nadera, the former wrote a letter to the Manager, Real Estate Department, GSIS, requesting the GSIS to accept payments from Florencio Nadera to liquidate his (Padilla's) outstanding obligation and to entrust to Nadera (Exh. "2"); that Nadera had actually paid the GSIS the P7,815.17 (Exh. "11") plus the full balance of P8,049.99 as evidenced by Official Receipt No. 9124651 issued by the GSIS on September 16, 1963(Exh. "12"), and to support the fact that all these payments were made by Nadera, the latter presented in evidence Exhibit "12-A" and Exhibit "12-b", the corresponding checks covering said payments; that after adding all the amounts Nadera had paid to Padilla and to the GSIS, he had paid a total of more than P36,000.00 after which the GSIS reconveyed the property to Vicente Padilla. Since the GSIS could not make a direct turnover of the property to Nadera, it became incumbent upon Padilla to turn over the property to Nadera. From the evidence submitted as above recited, it was clearly established that as early as October 8, 1961, the plaintiff Ines Lorbes Padilla together with her husband Vicente Padilla, executed an Agreement of Purchase and Sale over the parcel of land in question in favor of defendant Florencio R. Nadera, the latter paying them the amount of P10,000.00 and at the same time assuming the plaintiffs' obligation with the GSIS arising from a previous mortgage on the property in favor of the GSIS. Said Agreement of Purchase and Sale was done in writing and signed by plaintiff Ines Lorbes Padilla and her husband, Vicente Padilla, said agreement being marked in evidence as Exhibit "4". While at the time the parties entered into said Agreement of Purchase and Sale, the right of Vicente Padilla of redeeming the property in question had expired, yet it was even defendant Florencio R. Nadera who helped Vicente Padilla to make representations with the GSIS to give them another chance to redeem said property which resulted in the agreement between the GSIS and Vicente Padilla of applying his pension with said entity to the balance of his mortgage obligation with the GSIS. The deceased Padilla, in the course of the negotiations with GSIS, even wrote said entity to accept from Nadera certain amounts of money for the payment of Padilla's obligation in pursuance of their Agreement of Purchase and Sale dated October 8, 1961 as already mentioned above and by virtue of the receipt by the GSIS of certain amounts from Nadera, Vicente Padilla and his wife, Ines Lorbes Padilla, and Fe Padilla executed a Joint Affidavit dated September 12, 1962 (Exh. "9"). In said Joint Affidavit, the spouses Vicente Padilla and Ines Lorbes Padilla acknowledged the fact that Florencio Nadera had assumed Vicente Padilla's obligation with the GSIS in pursuant of an Agreement of Purchase and Sale in his favor dated October 1, 1961 which goes to show that said spouses even as late as September 12, 1962 had acknowledged that they had sold the property to defendant Florencio R. Nadera, and to further bolster the defense of Nadera that his purchase of said property was valid, the defendant presented in evidence even the checks by which he paid the obligation with the GSIS (Exhibits "12" and "12-A" and "12-B"). The plaintiffs centered their complaint on the fact that the Confirmation of Sale executed by Vicente Padilla on September 20, 1963 or shortly before his death, did not contain the signature of his wife, plaintiff Ines Lorbes Padilla, and on the further ground that when Vicente Padilla signed said Confirmation of Sale, he was already in the hospital and was suffering from sort of mental ailment. The Court will first deal on the first ground, that is, that the Confirmation of Sale did not contain the signature of Ines Lorbes Padilla. To the mind of the Court, Vicente Padilla did not even need to have executed the Confirmation of Sale since there was already an Agreement of Purchase and Sale executed by him and his wife, Ines Lorbes Padilla. She could even be compelled to sign her conformity thereat if the necessity for it arose. But the Register of Deeds perhaps relied on the first Agreement of Purchase and Sale signed by Vicente Padilla and his wife which was merely confirmed by Padilla on September 20, 1963 in issuing the corresponding title in favor of the defendant. The second ground of the plaintiffs in attacking the Confirmation of Sale by Vicente Padilla as being null and void, was not likewise proven by the plaintiffs. In an effort to prove that Vicente Padilla, during his last days, was of unsound mind, the plaintiffs presented Dr. Manuel Obias who was one of the doctors who treated Vicente Padilla and said Doctor in his testimony declared that after Vicente Padilla was operated on, the patient showed marked change in his mental condition showing signs of incoherence in speech and at times, shouting at the Doctor. On question of the Court, however, said witness admitted that a patient shouting at his Doctor may not always be an indication of mental ailment. Vicente Padilla died on November 19, 1963, two months after he executed the Confirmation of Sale now being attacked by the plaintiffs. Without the allegation of mental illness having been established, it is safe to assume that Vicente Padilla executed said Confirmation of Sale because, in conscience, he knew he had no more right over said property having previously sold the same to the defendant Nadera. The main ground upon which the herein petitioners rest their claim in their complaint below is that when Vicente Padilla executed a deed of confirmation of sale in favor of respondent Nadera on September 20, 1963, he was no longer of sound mind, having undergone surgery, as in fact he passed away two months thereafter, and that his wife did not sign the said document. Without anticipating whatever decision may be rendered on this point in the appeal taken by the petitioners, and merely for purposes of resolving the particular issue involved in the instant petition, We may observe that the right of respondent Nadera to the property arose not by virtue of the said deed of confirmation but by virtue of the original agreement of sale executed in his favor by the Padilla spouses and by their daughter Fe Padilla. The validity of this agreement is not questioned. If the resale by the Government Service Insurance System upon payment of the price of redemption by Nadera was made in favor of the Padilla spouses, it was purely a matter of form since they were the mortgage debtors, and the least that can be said under the circumstances is that they should be considered as trustees under an implied or resulting trust for the benefit of the real owner, namely, respondent Nadera. Article 1448 of the Civil Code says that "there is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property ..." The concept of implied trusts is that from the facts and circumstances of a given case the existence of a trust relationship is inferred in order to effect the presumed (in this case it is even expressed) intention of the parties or to satisfy the demands of justice or to protect against fraud. Reference should be made to the qualification provided for in the decision of the Court of Appeals as to the extent of the execution, that is, with respect only to the possession of the land, but not to the award of damages. Said the Court: "For the sake of equity, and adopting the criterion of Rule 70, Section 8, the monetary portion should not be executed upon petitioners' putting up the supersedeas bond of P10,000 offered by petitioners in the court below within 10 days after this decision becomes final; in the meantime, execution of the monetary portion be suspended until after the expiration of said period without petitioners' offering the proper bond." In view of the foregoing considerations, the petition is dismissed and the decision of respondent Court of Appeals is affirmed, with costs. Zaldivar, Fernando, Makasiar, Antonio and Esguerra, JJ., concur. Castro, J., concurs in the result. Barredo, J., concurs and reserves the right to file a separate opinion. Separate Opinions TEEHANKEE, J., dissenting: The sole issue at bar is whether or not the lower court committed a grave abuse of discretion in ordering immediate execution pending appeal of its joint judgment in Civil Case No. 8128 (dismissing petitioners' action as plaintiffs for cancellation of the title to their family dwelling allegedly secured by private respondent Florencio Nadera by means of undue and improper influence and fraud when the family head, the late Vicente Padilla, was no longer of sound mind and lay seriously ill) and in Case No. 6649, LRC (GLRO) Record No. 975 (granting respondents' petition for removal of the notation of petitioners' adverse claim on respondent's questioned certificate of title and for a writ of possession to petitioners' family dwelling) and sentencing petitioners furthermore to pay P350.00 monthly rentals, P10,000 for moral damages and P3,000 for attorney's fees. It is the general rule that execution shall issue only upon a final judgment, i.e. no appeal is taken or the judgment has been affirmed on appeal and has therefore become final and executory, as provided in Rule 39, section 1. Section 2 of the Rule provides an exception to the Rule by granting the trial court the discretion to order execution to issue even before the expiration of the time to appeal, upon motion of the prevailing party with notice to the adverse party, on the condition that if such immediate execution be "upon good reasons to be stated in a special order." It is well settled from our jurisprudence that being an exceptional remedy, execution pending appeal should be decreed only if compelling circumstances so demand,1 In the language of the appellate court itself in its decision under review sustaining the special order of execution, "the matter is a remedy precisely provided by law to meet exceptional situations and for special reasons."2 As a necessary consequence, the cited rule on execution pending appeal has been interpreted and applied restrictively.3 As succinctly stated by the late Justice Roman Ozaeta in Heiman,4 "(S)uch premature discretionary execution is an exception, to the rule ... The discretion granted is not absolute but dependent upon the existence of good reasons. Hence, this question confronts us: did the respondent judge state good reasons for ordering the immediate execution of (the) judgment? ... Indeed, if the trial court may order the execution of its judgment on the sole ground that it is not secured by any pledge or mortgage, that would be tantamount to converting an exception into a general rule. Every judgment upon an unsecured claim would then be subject to immediate execution as a matter of course notwithstanding the general rule established by ... section 1 of Rule 39 ... that execution shall issue upon a final judgment after the time for perfecting an appeal has expired and no appeal has been perfected." The Rule's requirement that execution pending appeal must be supported by good reasons to be stated in a special order must be satisfied and complied with, since the existence of such good reasons is the element that gives validity to the special order of execution. Absent such good reasons, the special order of execution must be stricken down for having been issued with grave abuse of discretion.5 Did the trial court state and show any good or compelling reason to justify the exceptional remedy of a special order of immediate execution of its judgment pending appeal? The only reason stated in its special order of Execution of April 19, 1969 (set aside by it upon petitioners' motion of April 25, 1969 for having been granted without hearing petitioners but reaffirmed in a subsequent order dated June 10, 1969) was that "it appears that plaintiffs [petitioners] are enjoying the possession of the property in question and that should the decision in this case be affirmed by the appellate court, the plaintiffs [petitioners] would not be able to satisfy the said decision." Such reason stated by the trial court, besides being a bare allegation that was not justified or established by respondent and is in fact refuted by the record — for petitioners had duly offered to put up a supersedeas bond to stay execution as allowed under section 3 of Rule 39 — does not qualify as a good or compelling reason that would justify a special order for immediate execution of judgment. 1. The appellate court erroneously sustained the trial court's special order of execution by taking the respondent's bare and unverified allegation in his motion for special execution "that should the decision in this case be affirmed by the appellate court, the plaintiffs will not be able to satisfy the decision" as establishing petitioners' insolvency, in this wise: The question of petitioners' solvency or insolvency to meet the contingency of affirmance of the decision on appeal was resolved by the respondent judge after hearing the parties. Petitioners have not in the least met respondents even tangentially therein except on the alleged rule that an averment of insolvency is not a good reason for execution pending appeal. Indeed, the case cited by petitioners therefor (Asturias vs. Victoriano, 98 Phil. 581) supports the contrary. The obiter dictum incompletely quoted by the petitioners rejected such allegation as a ground "because the allegation of insolvency - which is not under oath — is denied by the defendant and is not supported by proof (p. 583). Petitioners never denied the imputation of their insolvency. The decision recites facts and cites documentary evidence which show that petitioners lost the property in question through a foreclosure sale.6 a) Contrary to the appellate court's mis-impression, respondent judge in no way resolved "the question of petitioners' solvency or insolvency;" he merely repeated in his special order respondent's bare and unverified allegation that in case of affirmance on appeal, "the plaintiffs [petitioners] would not be able to satisfy the said decision;" b) The burden of establishing such alleged insolvency rested upon respondent-movant, and nothing is cited from the record to show that he ever discharged such burden; c) Petitioners therefore were wholly justified in protesting that no good reasons were shown as to justify the exceptional remedy of immediate execution and to invoke the force of Asturias vs. Victoriano7 that the bare allegation of the prevailing party that the losing parties were "not solvent enough to meet the damages awarded" was insufficient to authorize the premature execution, particularly because the court's special order "specifies no reason" and "even were we to suppose that the lower court ordered immediate execution on the strength of the allegation contained in the motion for execution that the defendants were "not solvent enough," the order would still be without sufficient basis because the allegation of insolvency — which is not under oath — is denied by the defendants and is not supported by proof;" and d) The appellate court's statement that "petitioners never denied the imputation of their insolvency" is contrary to the record. Not only did petitioners deny such imputation by filing their strong opposition assailing the sufficiency thereof but they further offered to put up a supersedeas bond to stay execution — which per se was the best refutation of their alleged financial incapacity. 2. Peculiarly, though, in disposing of petitioners' complaint against "rejection of (their) offer to post a P10,000 supersedeas bond ... as constituting abuse of discretion," the appellate court failed to note that such offer of a supersedeas bond destroyed not only its preceding statement, supra that "petitioners never denied the imputation of their insolvency" but also any factual basis for the only reason given by the trial court as to petitioners' alleged incapacity to satisfy its judgment if affirmed on appeal, but proceeded this time to discourse that respondent "has the right to occupy and use that which he owns. ... It cannot be violated and then compensated with a supersedeas bond" — ignoring the fact that the question of ownership of the property is the very crux and issue of the case now pending appeal, since petitioners claim that respondent obtained title thereto through undue influence and fraud — as follows: That rejection of petitioners' offer to post a P10,000 supersedeas bond is likewise condemned as constituting abuse of discretion. Petitioners failed to take stock of the fact that possession of the property bought and titled in respondent Nadera's name is involved in the case. He has the right to occupy and use that which he owns. Feudal despotism tended to destroy such right in the past; the right must be enjoyed by the owner. It cannot be violated and then compensated with a supersedeas bond. Stay of execution by supersedeas bond is addressed to the discretion of the trial court and unless abuse of such discretion is shown — not here shown — the same will not be interfered with. ...8 a) Rejection of petitioners' offer of a supersedeas bond in pursuance of section 3 of the cited Rule was manifest error. Petitioners' backing up their capacity to satisfy the judgment by means of a supersedeas bond deprived the special order of the element of a good and special reason that would give it validity — since the special order cited their alleged financial incapacity as justification therefor. b) Our jurisprudence consistently holds that the losing party's "plain, speedy and adequate remedy in the ordinary course of law" to forestall execution of the decision is the tendering of a supersedeas bond.9 In Ledesma vs. Teodoro 10 the Court set aside a special order of execution noting that "the offer made by defendant to put up a supersedeas bond to forestall the plea for execution ... was denied for no apparent reason when under the rule this right is expressly acknowledged when there are reasons justifying it (section 2, Rule 39)." c) Here, again, the general rule is stated in section 3 of Rule 39, that "execution issued before the expiration of time to appeal may be stayed upon the approval by the court of a sufficient supersedeas bond filed by the appellant." The trial court retains discretion to reject the bond and stay of execution as an exception — and it must again state good reasons for rejecting the offer of a supersedeas bond under pain of its action being set aside for grave abuse of discretion, e.g. in Nawasa vs. Catolico where such rejection of the bond and stay of execution was sustained as in the exercise of sound judgment or discretion, as the question therein of unconstitutionality of Republic Act No. 1383 relied upon by the judgment debtor, Nawasa, for the taking over of the Misamis waterworks system without just compensation was already a settled question and hence, the appeal could "not possibly prosper;" 11 d) In the case at bar, no such special reason for rejecting the offer of a supersedeas bond and stay of execution is stated or shown. The deferment of respondent's taking possession of the property pending determination of petitioners' appeal — used by petitioners as their family dwelling for 39 years 12 — is not a good or special reason, considering that the bond would compensate him for the use of the property if his title is upheld not to mention that it is seriously open to question whether in a mere petition for cancellation of adverse claim in the land registration record proceeding, as filed by respondent, the lower court had authority and jurisdiction to issue a writ of possession against petitioners; and e) The trial court made no finding whatever that petitioners' appeal was frivolous or dilatory. As a matter of fact, petitioners cannot be faulted and they are the ones complaining about the trial court's delay in the approval of the record on appeal which they had promptly filed. On this point, the appellate court made no positive finding either and merely stated that "a trial court cannot be said to be incompetent to determine whether an appeal is frivolous or dilatory. ... After all, like any determination in the decision, the same may be reviewed on appeal or inferred from the surrounding circumstances." 13 3. Considerations of law and of equity warrant the setting aside of the special order for premature execution of judgment. Since petitioners have always been in possession of the disputed property as their family dwelling for 39 years at the time of the trial court's decision, and the validity of respondent's acquisition thereof on grounds of undue influence and fraud is pending determination in the appeal pending before the appellate court, the status quo should be preserved, for the consequences of premature execution of judgment and the ouster of petitioners from their family dwelling of almost two generations can produce irreparable and irreversible damage and prejudice which are beyond compensation. As stated in City of Bacolod vs. Enriquez, 14 "(I)t should also be noted that, in authorizing execution before appeal, the said section 2 of Rule 39 requires that such execution be allowed only "upon good reasons to be stated in the special order." This requirement is important and must not be overlooked for, as Chief Justice Moran says, "if the judgment is executed and, on appeal, the same is reversed, although there are provisions for restitution, oftentimes damages may arise which cannot be fully compensated. Accordingly, execution should be granted only when these considerations are clearly outweighed by superior circumstances demanding urgency, and the above provision requires a statement of those circumstances as a security for their existence." " The facts and merits of petitioners' appeal from the trial court's judgment which is now pending appeal in the appellate court are concededly not herein involved and may not properly be reviewed, pre-empted or pre-judged in this special action which is concerned solely with the question of whether any good special and compelling reason was stated by the trial judge to justify the exceptional remedy of premature and immediate execution granted by it. It has already been shown hereinabove that the trial court's stated special reason of insolvency had no factual basis at all — respondent's bare imputation being unverified and unsubstantiated, and negated by petitioners' offer of a supersedeas bond precisely to assure the award in respondent's favor if affirmed on appeal. Hence, as against respondent's improper discussion of the merits of the appeal, petitioners have properly submitted that "this is neither the time nor place for the ventilation" of the issues and merits of their pending appeal. Should it be deemed that such facts and merits of the appeal are intertwined with the sole issue at bar, then the appellate court should have consolidated this case with the appealed case and decided the two cases jointly rather than prejudge the merits of the appeal and allow premature execution pending determination of the grave questions of fact and of law raised in petitioners' pending appeal, e.g. the fact that the GSIS executed the deed of resale of petitioners' property in favor of the spouses, the deceased Vicente Padilla and petitioner Ines Lorbes Padilla, and not in favor of respondent who claimed to have purchased the same from the Padillas; the fact that the late Padilla's mortgage indebtedness to the GSIS was not P25,000.00 but the mere balance of less than P15,000.00, since his pension of P10,194.24 had been applied thereto by GSIS; the conceded fact that petitioner Ines Lorbes Padilla did not execute nor sign the questioned confirmation of sale executed by the late Vicente Padilla alone on the strength of which respondent was able contrary to law to secure the cancellation of title to the property in his favor notwithstanding the categorical requirement of Article 166 of the Civil Code that conjugal property cannot be alienated without the wife's consent; and the fact that the late Vicente Padilla's soundness of mind and capacity to execute the said confirmation as well as the use of alleged undue influence and fraud by respondent upon him have been specifically charged in petitioners' complaint below, although adversely resolved in the first instance by the trial judge. The appeal on these critical facts is not before this Court, but off-hand one can readily question whether the trial court's award of P10,000 for moral damages and P3,000 for attorney's fees — which may amount to penalizing petitioners' right to seek recourse in the courts and to resist respondent's petition for cancellation of their adverse claim — should stand on appeal. Certainly, such important issues should not herein be pre-empted nor pre-judged, when the evidence and the record are not before the Court. ACCORDINGLY, I vote for the granting of the petition and for the setting aside of the appealed decision of the appellate court which sustained the trial court's special order for premature execution of its judgment, notwithstanding that the merits of petitioners' appeal are still pending and have yet to be resolved by the same appellate court. Separate Opinions TEEHANKEE, J., dissenting: The sole issue at bar is whether or not the lower court committed a grave abuse of discretion in ordering immediate execution pending appeal of its joint judgment in Civil Case No. 8128 (dismissing petitioners' action as plaintiffs for cancellation of the title to their family dwelling allegedly secured by private respondent Florencio Nadera by means of undue and improper influence and fraud when the family head, the late Vicente Padilla, was no longer of sound mind and lay seriously ill) and in Case No. 6649, LRC (GLRO) Record No. 975 (granting respondents' petition for removal of the notation of petitioners' adverse claim on respondent's questioned certificate of title and for a writ of possession to petitioners' family dwelling) and sentencing petitioners furthermore to pay P350.00 monthly rentals, P10,000 for moral damages and P3,000 for attorney's fees. It is the general rule that execution shall issue only upon a final judgment, i.e. no appeal is taken or the judgment has been affirmed on appeal and has therefore become final and executory, as provided in Rule 39, section 1. Section 2 of the Rule provides an exception to the Rule by granting the trial court the discretion to order execution to issue even before the expiration of the time to appeal, upon motion of the prevailing party with notice to the adverse party, on the condition that if such immediate execution be "upon good reasons to be stated in a special order." It is well settled from our jurisprudence that being an exceptional remedy, execution pending appeal should be decreed only if compelling circumstances so demand,1 In the language of the appellate court itself in its decision under review sustaining the special order of execution, "the matter is a remedy precisely provided by law to meet exceptional situations and for special reasons."2 As a necessary consequence, the cited rule on execution pending appeal has been interpreted and applied restrictively.3 As succinctly stated by the late Justice Roman Ozaeta in Heiman,4 "(S)uch premature discretionary execution is an exception, to the rule ... The discretion granted is not absolute but dependent upon the existence of good reasons. Hence, this question confronts us: did the respondent judge state good reasons for ordering the immediate execution of (the) judgment? ... Indeed, if the trial court may order the execution of its judgment on the sole ground that it is not secured by any pledge or mortgage, that would be tantamount to converting an exception into a general rule. Every judgment upon an unsecured claim would then be subject to immediate execution as a matter of course notwithstanding the general rule established by ... section 1 of Rule 39 ... that execution shall issue upon a final judgment after the time for perfecting an appeal has expired and no appeal has been perfected." The Rule's requirement that execution pending appeal must be supported by good reasons to be stated in a special order must be satisfied and complied with, since the existence of such good reasons is the element that gives validity to the special order of execution. Absent such good reasons, the special order of execution must be stricken down for having been issued with grave abuse of discretion.5 Did the trial court state and show any good or compelling reason to justify the exceptional remedy of a special order of immediate execution of its judgment pending appeal? The only reason stated in its special order of Execution of April 19, 1969 (set aside by it upon petitioners' motion of April 25, 1969 for having been granted without hearing petitioners but reaffirmed in a subsequent order dated June 10, 1969) was that "it appears that plaintiffs [petitioners] are enjoying the possession of the property in question and that should the decision in this case be affirmed by the appellate court, the plaintiffs [petitioners] would not be able to satisfy the said decision." Such reason stated by the trial court, besides being a bare allegation that was not justified or established by respondent and is in fact refuted by the record — for petitioners had duly offered to put up a supersedeas bond to stay execution as allowed under section 3 of Rule 39 — does not qualify as a good or compelling reason that would justify a special order for immediate execution of judgment. 1. The appellate court erroneously sustained the trial court's special order of execution by taking the respondent's bare and unverified allegation in his motion for special execution "that should the decision in this case be affirmed by the appellate court, the plaintiffs will not be able to satisfy the decision" as establishing petitioners' insolvency, in this wise: The question of petitioners' solvency or insolvency to meet the contingency of affirmance of the decision on appeal was resolved by the respondent judge after hearing the parties. Petitioners have not in the least met respondents even tangentially therein except on the alleged rule that an averment of insolvency is not a good reason for execution pending appeal. Indeed, the case cited by petitioners therefor (Asturias vs. Victoriano, 98 Phil. 581) supports the contrary. The obiter dictum incompletely quoted by the petitioners rejected such allegation as a ground "because the allegation of insolvency - which is not under oath — is denied by the defendant and is not supported by proof (p. 583). Petitioners never denied the imputation of their insolvency. The decision recites facts and cites documentary evidence which show that petitioners lost the property in question through a foreclosure sale.6 a) Contrary to the appellate court's mis-impression, respondent judge in no way resolved "the question of petitioners' solvency or insolvency;" he merely repeated in his special order respondent's bare and unverified allegation that in case of affirmance on appeal, "the plaintiffs [petitioners] would not be able to satisfy the said decision;" b) The burden of establishing such alleged insolvency rested upon respondent-movant, and nothing is cited from the record to show that he ever discharged such burden; c) Petitioners therefore were wholly justified in protesting that no good reasons were shown as to justify the exceptional remedy of immediate execution and to invoke the force of Asturias vs. Victoriano7 that the bare allegation of the prevailing party that the losing parties were "not solvent enough to meet the damages awarded" was insufficient to authorize the premature execution, particularly because the court's special order "specifies no reason" and "even were we to suppose that the lower court ordered immediate execution on the strength of the allegation contained in the motion for execution that the defendants were "not solvent enough," the order would still be without sufficient basis because the allegation of insolvency — which is not under oath — is denied by the defendants and is not supported by proof;" and d) The appellate court's statement that "petitioners never denied the imputation of their insolvency" is contrary to the record. Not only did petitioners deny such imputation by filing their strong opposition assailing the sufficiency thereof but they further offered to put up a supersedeas bond to stay execution — which per se was the best refutation of their alleged financial incapacity. 2. Peculiarly, though, in disposing of petitioners' complaint against "rejection of (their) offer to post a P10,000 supersedeas bond ... as constituting abuse of discretion," the appellate court failed to note that such offer of a supersedeas bond destroyed not only its preceding statement, supra that "petitioners never denied the imputation of their insolvency" but also any factual basis for the only reason given by the trial court as to petitioners' alleged incapacity to satisfy its judgment if affirmed on appeal, but proceeded this time to discourse that respondent "has the right to occupy and use that which he owns. ... It cannot be violated and then compensated with a supersedeas bond" — ignoring the fact that the question of ownership of the property is the very crux and issue of the case now pending appeal, since petitioners claim that respondent obtained title thereto through undue influence and fraud — as follows: That rejection of petitioners' offer to post a P10,000 supersedeas bond is likewise condemned as constituting abuse of discretion. Petitioners failed to take stock of the fact that possession of the property bought and titled in respondent Nadera's name is involved in the case. He has the right to occupy and use that which he owns. Feudal despotism tended to destroy such right in the past; the right must be enjoyed by the owner. It cannot be violated and then compensated with a supersedeas bond. Stay of execution by supersedeas bond is addressed to the discretion of the trial court and unless abuse of such discretion is shown — not here shown — the same will not be interfered with. ...8 a) Rejection of petitioners' offer of a supersedeas bond in pursuance of section 3 of the cited Rule was manifest error. Petitioners' backing up their capacity to satisfy the judgment by means of a supersedeas bond deprived the special order of the element of a good and special reason that would give it validity — since the special order cited their alleged financial incapacity as justification therefor. b) Our jurisprudence consistently holds that the losing party's "plain, speedy and adequate remedy in the ordinary course of law" to forestall execution of the decision is the tendering of a supersedeas bond.9 In Ledesma vs. Teodoro 10 the Court set aside a special order of execution noting that "the offer made by defendant to put up a supersedeas bond to forestall the plea for execution ... was denied for no apparent reason when under the rule this right is expressly acknowledged when there are reasons justifying it (section 2, Rule 39)." c) Here, again, the general rule is stated in section 3 of Rule 39, that "execution issued before the expiration of time to appeal may be stayed upon the approval by the court of a sufficient supersedeas bond filed by the appellant." The trial court retains discretion to reject the bond and stay of execution as an exception — and it must again state good reasons for rejecting the offer of a supersedeas bond under pain of its action being set aside for grave abuse of discretion, e.g. in Nawasa vs. Catolico where such rejection of the bond and stay of execution was sustained as in the exercise of sound judgment or discretion, as the question therein of unconstitutionality of Republic Act No. 1383 relied upon by the judgment debtor, Nawasa, for the taking over of the Misamis waterworks system without just compensation was already a settled question and hence, the appeal could "not possibly prosper;" 11 d) In the case at bar, no such special reason for rejecting the offer of a supersedeas bond and stay of execution is stated or shown. The deferment of respondent's taking possession of the property pending determination of petitioners' appeal — used by petitioners as their family dwelling for 39 years 12 — is not a good or special reason, considering that the bond would compensate him for the use of the property if his title is upheld not to mention that it is seriously open to question whether in a mere petition for cancellation of adverse claim in the land registration record proceeding, as filed by respondent, the lower court had authority and jurisdiction to issue a writ of possession against petitioners; and e) The trial court made no finding whatever that petitioners' appeal was frivolous or dilatory. As a matter of fact, petitioners cannot be faulted and they are the ones complaining about the trial court's delay in the approval of the record on appeal which they had promptly filed. On this point, the appellate court made no positive finding either and merely stated that "a trial court cannot be said to be incompetent to determine whether an appeal is frivolous or dilatory. ... After all, like any determination in the decision, the same may be reviewed on appeal or inferred from the surrounding circumstances." 13 3. Considerations of law and of equity warrant the setting aside of the special order for premature execution of judgment. Since petitioners have always been in possession of the disputed property as their family dwelling for 39 years at the time of the trial court's decision, and the validity of respondent's acquisition thereof on grounds of undue influence and fraud is pending determination in the appeal pending before the appellate court, the status quo should be preserved, for the consequences of premature execution of judgment and the ouster of petitioners from their family dwelling of almost two generations can produce irreparable and irreversible damage and prejudice which are beyond compensation. As stated in City of Bacolod vs. Enriquez, 14 "(I)t should also be noted that, in authorizing execution before appeal, the said section 2 of Rule 39 requires that such execution be allowed only "upon good reasons to be stated in the special order." This requirement is important and must not be overlooked for, as Chief Justice Moran says, "if the judgment is executed and, on appeal, the same is reversed, although there are provisions for restitution, oftentimes damages may arise which cannot be fully compensated. Accordingly, execution should be granted only when these considerations are clearly outweighed by superior circumstances demanding urgency, and the above provision requires a statement of those circumstances as a security for their existence." " The facts and merits of petitioners' appeal from the trial court's judgment which is now pending appeal in the appellate court are concededly not herein involved and may not properly be reviewed, pre-empted or pre-judged in this special action which is concerned solely with the question of whether any good special and compelling reason was stated by the trial judge to justify the exceptional remedy of premature and immediate execution granted by it. It has already been shown hereinabove that the trial court's stated special reason of insolvency had no factual basis at all — respondent's bare imputation being unverified and unsubstantiated, and negated by petitioners' offer of a supersedeas bond precisely to assure the award in respondent's favor if affirmed on appeal. Hence, as against respondent's improper discussion of the merits of the appeal, petitioners have properly submitted that "this is neither the time nor place for the ventilation" of the issues and merits of their pending appeal. Should it be deemed that such facts and merits of the appeal are intertwined with the sole issue at bar, then the appellate court should have consolidated this case with the appealed case and decided the two cases jointly rather than prejudge the merits of the appeal and allow premature execution pending determination of the grave questions of fact and of law raised in petitioners' pending appeal, e.g. the fact that the GSIS executed the deed of resale of petitioners' property in favor of the spouses, the deceased Vicente Padilla and petitioner Ines Lorbes Padilla, and not in favor of respondent who claimed to have purchased the same from the Padillas; the fact that the late Padilla's mortgage indebtedness to the GSIS was not P25,000.00 but the mere balance of less than P15,000.00, since his pension of P10,194.24 had been applied thereto by GSIS; the conceded fact that petitioner Ines Lorbes Padilla did not execute nor sign the questioned confirmation of sale executed by the late Vicente Padilla alone on the strength of which respondent was able contrary to law to secure the cancellation of title to the property in his favor notwithstanding the categorical requirement of Article 166 of the Civil Code that conjugal property cannot be alienated without the wife's consent; and the fact that the late Vicente Padilla's soundness of mind and capacity to execute the said confirmation as well as the use of alleged undue influence and fraud by respondent upon him have been specifically charged in petitioners' complaint below, although adversely resolved in the first instance by the trial judge. The appeal on these critical facts is not before this Court, but off-hand one can readily question whether the trial court's award of P10,000 for moral damages and P3,000 for attorney's fees — which may amount to penalizing petitioners' right to seek recourse in the courts and to resist respondent's petition for cancellation of their adverse claim — should stand on appeal. Certainly, such important issues should not herein be pre-empted nor pre-judged, when the evidence and the record are not before the Court. ACCORDINGLY, I vote for the granting of the petition and for the setting aside of the appealed decision of the appellate court which sustained the trial court's special order for premature execution of its judgment, notwithstanding that the merits of petitioners' appeal are still pending and have yet to be resolved by the same appellate court. Footnotes Teehankee, J., dissenting: 1 Caragao vs. Maceren, 92 Phil. 121; de Borja vs. Tan, 95 Phil. 653. Mabutas vs. Alzate, 92 Phil. 1071; Heiman vs. Cabrera, 73 Phil. 707. 2 Court of Appeals' decision, petitioners' brief, p. 27, emphasis supplied. 3 See cases cited in fn. 1; Ledesma v Teodoro, 98 Phil. 232. 4 73 Phil. 707; emphasis supplied. 5 Alcasid vs. Samson, 102 Phil. 735; De la Rosa vs. City of Baguio, 90 Phil. 720. 6 Court of Appeals' decision, petitioners' brief, p. 22. 7 98 Phil. 581; emphasis supplied. 8 Court of Appeals' decision, petitioners' brief, p. 26. 9 Santos vs. Mojica, 26 SCRA 607; See Javellana vs. Querubin, 17 SCRA 873. 10 98 Phil. 232. 11 19 SCRA 980. 12 As of the filing of the petition on January 30, 1970. 13 Court of Appeals' decision, petitioners' brief, p. 25. 14 101 Phil. 644, 648. The Lawphil Project - Arellano Law Foundation