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Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 164648             August 6, 2008

ERIC L. LEE, petitioner,
vs.
HON. HENRY J. TROCINO, PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, SIXTH JUDICIAL REGION, BRANCH 62, BAGO CITY, THE OFFICE OF THE EX OFFICIO SHERIFF OF THE REGIONAL TRIAL COURT, SIXTH JUDICIAL REGION, BRANCH 62, BAGO CITY, and MAGDALENO M. PEÑA, respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

This petition for review on certiorari assails the March 19, 2004 Decision¹ and July 27, 2004 Resolution² of the Court of Appeals in CA-G.R. SP No. 65023, dismissing the petition for indirect contempt filed against private respondent Magdaleno M. Peña as well as the petition for prohibition and certiorari instituted to enjoin the Regional Trial Court of Bago City, Branch 62, from further proceeding with Civil Case Nos. 754 and 1088.

On March 1, 1996, Peña filed before the Regional Trial Court of Bago City a complaint (docketed as Civil Case No. 754) for recovery of agent’s compensation, expenses, damages and attorney’s fees against Urban Bank, Inc. (Urban Bank), its board of directors and officers, namely: Teodoro Borlongan (Borlongan); Delfin Gonzales, Jr. (Gonzales); Benjamin de Leon (de Leon); Siervo Dizon; herein petitioner Eric Lee (Lee); Ben Lim, Jr.; Corazon Bejasa (Bejasa); and Arturo Manuel, Jr. On May 28, 1999, the Regional Trial Court of Bago City, Branch 62, rendered judgment in favor of Peña, as follows:

WHEREFORE, premised from the foregoing, judgment is hereby rendered ordering the defendants to pay plaintiff jointly and severally the following amounts:

1. P24,000,000.00 as compensation for plaintiff’s services plus the legal rate of interest from the time of demand until fully paid;

2. P3,000,000.00 as reimbursement of plaintiff’s expenses;

3. P1,000,000.00 as and for attorney’s fees;

4. P500,000 as exemplary damages;

5. Costs of suit.

SO ORDERED.³

On June 8, 1999, Peña moved for execution pending appeal while on June 15, 1999, Lee and his co-defendants filed a notice of appeal and an opposition to the motion for execution pending appeal.

The appeal from the trial court’s decision was docketed as CA-G.R. CV No. 65756 in the Court of Appeals.

On October 29, 1999, the trial court issued a Special Order⁴ granting the motion for execution pending Lee’s appeal. On the same day, a Writ of Execution⁵ was issued.

Thus, Lee and his co-defendants de Leon and Gonzales filed a Petition for Certiorari with the Court of Appeals (docketed as CA-G.R. SP No. 55667) which issued on November 9, 1999, a Temporary Restraining Order (TRO) enjoining the implementation of the October 29, 1999 Special Order and writ of execution. On January 12, 2000, the Court of Appeals rendered its Decision (in CA-G.R. SP No. 55667),⁶ the dispositive portion of which reads, as follows:

WHEREFORE, the instant petition is GRANTED. The Special Order and writ of execution both dated October 29, 1999, are ANNULLED and SET ASIDE.

Respondents are directed to desist from further implementing the writ of execution and to lift the garnishment and levy made pursuant thereto.

SO ORDERED.⁷

Peña filed a motion for reconsideration which was granted. Thus, on August 18, 2000, the Court of Appeals rendered an Amended Decision,⁸ the dispositive portion of which provides:

WHEREFORE, the motion for reconsideration of respondent Magdaleno M. Peña is GRANTED. Accordingly, this Court’s decision dated January 12, 2000 is RECONSIDERED and SET ASIDE and another rendered DENYING the petition.

SO ORDERED.⁹

Lee, de Leon and Gonzales moved for reconsideration, but it was denied by the appellate court in its Resolution¹⁰ dated October 19, 2000. The Court of Appeals also required Peña to post an indemnity bond in the amount of P15 million, thus:

WHEREFORE, petitioners’ Motion for Reconsideration is DENIED for lack of merit, while the Supplemental Motions for Reconsideration are DENIED for being filed out of time and for lack of merit.

Respondent Magdaleno M. Peña is directed to post, within five (5) days from notice, an indemnity bond in the amount of P15,000,000.00 to answer for the damages which petitioners may suffer in case of reversal on appeal of the trial court’s decision.

Finally, the Office of the Ex-Officio Sheriff of the Regional Trial Court, Sixth Judicial Region (Branch 62, Bago City), is directed to furnish this Court, within five (5) days from notice, with copies of the returns of its proceedings on the execution pending appeal of the trial court’s decision, together with copies of the corresponding notices of levy/garnishment and execution sales, certificates of sale and other pertinent documents.

SO ORDERED.¹¹

On October 31, 2000, however, the Court of Appeals issued a Resolution¹² staying the execution of the trial court’s Decision dated May 28, 1999 conditioned upon posting a supersedeas bond in the amount of P40 million.

Peña moved for reconsideration which was denied in a Resolution¹³ dated December 8, 2000, thus:

WHEREFORE, respondent Magdaleno M. Peña’s Motion for Reconsideration and Supplemental Motions are DENIED for lack of merit, while his motions for extension of time to file an indemnity bond are GRANTED in that he is given an extension expiring on December 11, 2000 within which to post an indemnity bond in favor of petitioners.

The supersedeas bond (PGA Bond No. HO-63671-200) dated October 27, 2000 in the sum of Forty Million Pesos (P40,000,000.00) posted by Prudential Guarantee and Assurance Corporation, with petitioners Benjamin L. de Leon, Delfin C. Gonzalez, Jr. and Eric L. Lee as principals, is APPROVED. Accordingly, execution pending appeal of the trial court’s judgment against said petitioners is STAYED.

SO ORDERED.¹⁴

Previously, or sometime in 1999 and 2000, Peña, pursuant to the Special Order and Writ of Execution, had caused the levy and sale by public auction of some of Urban Bank and its co-defendants’ properties, including the shares of stock of Lee in EQL Properties, Inc. (EQLPI). Peña then sought to transfer Lee’s shares in his (Peña’s) name, but the EQLPI Corporate Secretary refused to act on the request. Thus, on March 28, 2001, Peña filed an action (docketed as Civil Case No. 1088) with the same court¹⁵ (Branch 62 of the Regional Trial Court of Bago City) to compel EQLPI to transfer Lee’s shares in Peña’s name and recognize his ownership and interest therein.

Claiming that Civil Case No. 1088 was filed to enforce the Special Order and Writ of Execution which were covered by the Stay Order, Lee moved to dismiss the same, but the trial court denied the motion. Instead of filing an Answer, Lee filed with the Court of Appeals a special civil action (docketed as CA-G.R. SP No. 65023), for indirect contempt against Peña and the sheriff for alleged contumacious disobedience to the lawful order of the appellate court in CA-G.R. SP No. 55667, and a petition for prohibition and certiorari against all the herein respondents to annul and set aside the proceedings in Civil Case No. 1088, and to prohibit the trial court, in Civil Case No. 754, from further proceeding with the implementation of the Special Order and the Writ of Execution.

Incidentally, on December 7, 2000, or prior to the filing of CA-G.R. SP No. 65023 before the Court of Appeals on June 5, 2001, Lee and his co-defendants Delfin Gonzales, Jr. and Benjamin de Leon, had filed a Petition for Review (docketed as G.R. No. 145822) with this Court.¹⁶ Citing the pendency of CA-G.R. SP No. 65023, and claiming that the subject matter and reliefs sought therein are the same as those in G.R. No. 145822, Peña moved to dismiss the said petition (G.R. No. 145822) on the ground of forum-shopping. However, in a Resolution¹⁷ dated September 24, 2003, the Court’s Second Division denied the motion.

Meanwhile, as a result of the levy and sale at auction of Lee’s personal properties,¹⁸ Peña moved (in Branch 62) for the cancellation and transfer of some of these properties in his name and in that of his assignees.¹⁹ Previous orders of the trial court (dated September 1, 2000 and December 4, 2000) likewise directing the cancellation and transfer of the stock certificates went unheeded, specifically with respect to Lee’s Manila Polo Club, Inc. and Tagaytay Highlands International Golf Club, Inc. shares of stock. The trial court, acting upon Peña’s motion, issued on December 19, 2000 another Order²⁰ directing Manila Polo Club, Inc. and Tagaytay Highlands International Golf Club, Inc. to transfer Lee’s shares in Peña’s name and in that of his assignees.

On January 3, 2001, the trial court issued an Order²¹ directing the Manila Golf and Country Club, Inc., under pain of contempt, to comply with the court’s Orders dated October 4, 2000 and December 20, 2000 ordering the Corporate Secretary thereof to cancel Stock Certificate No. 2395 in the name of Lee and to transfer the same in the name of Sylvia Ting, who appears to be the successful bidder in the execution sale of said Manila Golf share.

On March 9, 2001, the trial court issued an Order²² reiterating its previous directives to Manila Polo Club, Inc.

On December 13, 2000, the trial court issued an Amended Order²³ disposing thus:

WHEREFORE, the dispositive portions of the orders of this court dated October 31, 2000 are hereby amended. Thus, the respective corporate secretaries, namely: Christine Q. Lee of EQL Properties, Inc., Roseanne I. Gonzalez of D.C. Gonzalez, Inc. and Atty. Candido R. Flor of Subic Yacht Club is ordered as follows:

(A) To cancel the stock certificates covering the shares described in the orders dated October 31, 2000, in the names of Delfin C. Gonzalez, Jr., Eric L. Lee and Teodoro C. Borlongan, and to effect the transfer of said shares of stocks in the names of the following purchasers at the public auction sale conducted on October 30, 2000, to wit:

ATTY. MAGDALENO M. PEÑA

a. One (1) share of stock in the name of Teodoro C. Borlongan in Subic Bay Yacht Club;

b. 30,585 shares of stocks in D.C. Gonzalez, Jr., Inc. at P20.00 per share in the name of Delfin C. Gonzalez, Jr.;

c. 60,757 shares of stocks in EQL Properties, Inc. at P20.00 per share in the name of Eric Q. Lee.

MR. RAMON P. EREÑETA

a. Ten (10) shares of stocks in D.C. Gonzalez, Jr., Inc. at P50.00 per share in the name of Delfin C. Gonzalez, Jr.;

b. Ten (10) shares of stocks in EQL Properties, Inc. at P50.00 per share in the name of Eric Q. Lee;

MR. ROBERTO A. DEMIGILLO

a. Ten (10) shares of stocks in D.C. Gonzalez, Jr., Inc. at P50.00 per share in the name of Delfin C. Gonzalez, Jr.;

b. Ten (10) shares of stocks in EQL Properties, Inc. at P50.00 per share in the name of Eric Q. Lee;

MR. NOEL M. MALAYA

a. Ten (10) shares of stocks in EQL Properties, Inc. at P50.00 per share in the name of Eric Q. Lee;

b. Ten (10) shares of stocks in D.C. Gonzalez, Jr., Inc. at P50.00 per share in the name of Delfin C. Gonzalez, Jr.;

MR. DEMETRIO M. VINSON, JR.

a. Ten (10) shares of stocks in EQL Properties, Inc. at P50.00 per share in the name of Eric Q. Lee;

b. Ten (10) shares of stocks in D.C. Gonzalez, Jr., Inc. at P50.00 per share in the name of Delfin C. Gonzalez, Jr.;

(B) To supply and provide the said purchasers thru their counsel within three (3) days from receipt of this order the following data: stock certificate number, if any, date of acquisition of the shares; cost of acquisition; and transfer fees paid, if any, for each share; and

(C) To inform this court in writing within ten (10) days from notice of compliance with (A) and (B) above, and to show to the Clerk of Court of this Court the corresponding Stock and Transfer Book reflecting the cancellation and transfer of aforesaid, within the same period.

SO ORDERED.²⁴

On November 6, 2003, a Decision²⁵ was rendered by the Court of Appeals in CA-G.R. SP No. 72698²⁶ and CA-G.R. CV No. 65756,²⁷ declaring the absence of an agency relationship between Urban Bank and Peña, and finding no sufficient basis to hold the respondents therein in contempt of court, thus:

WHEREFORE, in view of the foregoing considerations, the May 28, 2000²⁸ decision and the October 19, 2000²⁹ Special Order of the RTC of Bago City, Branch 62, are hereby ANNULLED AND SET ASIDE. However, the plaintiff-appellee in CA GR CV NO. 65756 is awarded the amount of P3 Million as reimbursement for his expenses as well as reasonable compensation for his efforts in clearing Urban Bank’s property of unlawful occupants. The award of exemplary damages, attorney’s fees and costs of suit are deleted, the same not having been sufficiently proven. The petition for Indirect Contempt against all the respondents is DISMISSED for utter lack of merit.

SO ORDERED.³⁰

On March 19, 2004, the Court of Appeals issued its now assailed Decision dismissing Lee’s twin petitions in CA-G.R. SP No. 65023.³¹ The appellate court held that both (petitions in CA-G.R. SP No. 65023 and in G.R. No. 145822) pray for the same relief, which is to enjoin the implementation of the Special Order and the Writ of Execution, and set aside the levies, garnishments and auction sales conducted pursuant thereto; the parties to said petitions, causes of action and reliefs sought are substantially the same; and Lee’s twin petitions violate the rule against forum-shopping and the principle of litis pendentia.

Lee filed a motion for reconsideration but it was denied; hence the instant petition raising the following assignment of errors:

THE COURT OF APPEALS GRAVELY ERRED IN:

1) RULING THAT THE PETITIONER ENGAGED IN FORUM-SHOPPING;

2) FAILING TO CITE RESPONDENTS FOR INDIRECT CONTEMPT FOR WILLFUL AND CONTUMACIOUS VIOLATIONS OF THE INJUNCTIVE STAY ORDERS OF THE COURT OF APPEALS IN CA G.R. SP 55667;

3) FAILING TO ANNUL THE CONTUMACIOUS ACTS OF EXECUTION BY RESPONDENT JUDGE AND RESPONDENT SHERIFF; AND

4) FAILING TO PROHIBIT RESPONDENT JUDGE AND RESPONDENT SHERIFF FROM PROCEEDING WITH THE ACTS OF EXECUTION THAT VIOLATED THE INJUNCTIVE AND STAY ORDERS OF THE COURT OF APPEALS.³²

Sometime in 2000, Urban Bank filed a disbarment suit³³ against Peña. In its complaint, the bank cited the following material facts, which shed factual light upon the instant case:

3. Last 1 December 1994, Complainant (Urban Bank) bought a parcel of land located along Roxas Boulevard from the Isabela Sugar Company ("ISC" for brevity). One of the conditions of the sale was for ISC to cause the eviction of all the occupants found in said property. This condition was incorporated in the Contract to Sell and adopted in the subsequent Deed of Absolute Sale executed by and between ISC and Complainant dated 15 November 1994 and 29 Novemebr 1994, respectively.

4. To fully implement the abovementioned condition, ISC engaged the services of herein Respondent Atty. Magdaleno M. Peña. This was communicated by ISC to Respondent in a Memorandum dated 20 November 1994 and relayed to Complainant in a Letter dated 19 December 1994.

5. Respondent accepted the engagement of his services by ISC and he proceeded to take the necessary steps to evict the occupants of the property subject of the sale.

6. During the eviction process, Complainant was informed by ISC and Respondent about the necessity of a letter of authority in favor of the latter, granting him the authority to represent Complainant in maintaining possession of the aforesaid property and to represent Complainant in any court action that may be instituted in connection with the exercise of said duty.

7. Complainant acceded to the request and issued a letter-authority dated 15 December 1994, but only after making it very clear to the Respondent that it was ISC which contracted his services and not Complainant. This clarification was communicated to Respondent by Atty. Corazon M. Bejasa and Mr. Arturo E. Manuel, Jr., Senior Vice-President and Vice-President, respectively of Complainant bank in a letter addressed to respondent dated 15 December 1994. A copy of said letter is attached hereto and made an integral part of this Complaint as Annex "E".

8. Subsequently however, Respondent requested for a modification of said letter of authority by furnishing Complainant with a draft containing the desired wordings (including the date, i.e., 19 December 1994) and asking Complainant to modify the previous letter by issuing a new one similarly worded as his draft. A copy of said request is attached hereto and made an integral part of this Complaint as Annex "F".

9. If only to expedite and facilitate matters, Complainant willingly obliged and re-issued a new letter of authority to Respondent, this time incorporating some of Respondent’s suggestions. Thus it came to pass that the actual letter of authority was dated 19 December 1994, while Complainant’s clarificatory letter was dated 15 December 1994.

10. Eventually, the eviction of the occupants of the property in question was successfully carried out. After the lapse of more than thirteen (13) months, Respondent filed a collection suit against herein Complainant and its senior officers "for recovery of agent’s compensation and expenses, damages and attorney’s fees", on the strength of the letter of authority issued by Atty. Bejasa and Mr. Manuel, Jr. A copy of the complaint filed by herein Respondent with the Bago City Regional Trial Court is attached hereto and made an integral part hereof as Annex "G".

11. The act of Respondent in securing the letter of authority from Complainant, ostensibly for the purpose of convincing the occupants sought to be evicted that he was duly authorized to take possession of the property and then using the same letter as basis for claiming agent’s compensation, expenses and attorney’s fees from Complainant, knowing fully well the circumstances surrounding the issuance of said letter of authority, constitutes deceit, malpractice and gross misconduct under Section 27, Rule 138 of the Revised Rules of Court. Said provision enumerates the grounds for the suspension and disbarment of lawyers, namely:

Sec. 27. Attorneys removed or suspended by Supreme Court, on what grounds, - A member of the bar may be removed or suspended from his office as attorney by the Supreme Court for any deceit, malpractice or other gross misconduct in such office, grossly immoral conduct or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath of which he is required to take before admission to practice, or for willful disobedience of any lawful order of a superior court or for corruptly or wilfully appearing as an attorney for a party to a case without any authority to do so. The practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers, constitutes malpractice.³⁴

Peña, in his Comment to the disbarment complaint, alleged that Urban Bank,

through its duly authorized officers, engaged his services to rid the property of tenants and intruders in the course of a telephone conversation. He added that there was no reason for him to deceive complainant into writing a letter of authority because he knew very well that the verbal agreement was sufficient to constitute an attorney-client relationship. The request for a letter of authority, according to him, was "merely to formalize the engagement." Lastly, he argued that the complainant accepted the benefits of his service, just as it never disclaimed that he was acting in its behalf during the period of engagement.³⁵

The Commission on Bar Discipline of the IBP made the following findings of fact and recommendation, which was adopted by the Court, to wit:

^{T]he complainant (plaintiff) in RTC Bago City Civil Case is the respondent in the present case which only showed that to get even with the respondent, complainant instituted the present case as leverage for respondent’s complaint in the civil case. The complainant in the RTC Bago City Civil case is the respondent in the present case and vice-versa; therefore there was no institution by the same party for remedies in different fora which negates forum shopping.}

The fact remains however that complainant never contested the actuations done by the respondent to rid its property from tenants and intruders; and even executed a letter of authority in favor of respondent dated December 19, 1994; otherwise complainant should have engaged the services of other lawyers.

Nevertheless, it is not for this Office to determine who should pay the respondent for this is a matter not within its jurisdiction but for the proper court to do so.

The only issue for resolution of this Office is whether or not respondent committed malpractice, deceit and gross misconduct in the practice of his profession as member of the bar.

The evidence on record showed that respondent successfully performed his task of evicting the tenants and intruders in the property in question. More so, no less than Senior Vice-President Corazon Bejasa was very thankful for his job well done.

Complainant benefited from respondent’s task and for a period of fifty (50) days no behest or complaint was received by the respondent from the complainant. It was only when payment for his legal services was demanded that complainant re-acted when it is incumbent upon the benefactor of services that just compensation should be awarded.

It is but just and proper that if refusal to pay just compensation ensues in any transaction, the proper remedy is to institute an action before the proper court and such actuation of the respondent herein did not constitute deceit, malpractice or gross misconduct.

In view of the foregoing, the Undersigned hereby recommends that the complaint against Atty. Magdaleno Peña be dismissed for lack of merit.³⁶

Based on the foregoing findings and recommendation, the Court dismissed the disbarment case, thus:

From the record and evidence before us, we agree with the commissioner’s conclusion that respondent cannot be found guilty of the charges against him. Apart from the allegations it made in various pleadings, complainant has not proferred any proof tending to show that respondent really induced it, through machination or other deceitful means, to issue the December 19 letter of authority ostensibly for the purpose of evicting illegal occupants, then using the very same letter for demanding agent’s compensation. During the scheduled hearing, it did not introduce a single witness to testify apropos the circumstance under which the letter was dispatched. Those who signed and issued the letter, Corazon M. Bejasa and Arturo E. Manuel Jr., were never presented before the investigating commissioner to substantiate its assertion that the letter it gave to the respondent was only "for show," and for a purpose which is limited in scope. Similarly, not even the sworn statements from these or other vital witnesses were attached to the memorandum or the other pleadings it submitted. It is one thing to allege deceit, malpractice and gross misconduct, and another to demonstrate by evidence the specific acts constituting the same.

To be sure, no evidence in respect of the supposed deceit, malpractice or gross misconduct was adduced by the complainant. It is axiomatic that he who alleges the same has the onus of validating it. In disbarment proceedings, the burden of proof is upon the complainant and this Court will exercise its disciplinary power only if the former establishes its case by clear, convincing, and satisfactory evidence. In this regard, we find that complainant failed to meet the required standard.

In an effort to lend credence to its claim that there was no contractual relation between them, complainant attempted to establish that the legal services of the respondent was engaged, not by it, but by the seller of the lot, Isabela Sugar Company. This should presumably settle any doubt that the December 19 letter was only to be used by respondent for the purpose of supervising the eviction of the occupants of the property and protecting it from intruders, and nothing more. To support this, it submitted correspondence coming from people who appear to be responsible officers of ISC (one from Enrique Montilla III, and another from Julie Abad and Herman Ponce) informing respondent of the engagement of his services by the ISC. These letters, though, cannot by themselves be accorded strong probative weight in the face of respondent’s emphatic assertion that he has never seen any of these documents. Likewise, they do not indicate that copies thereof were received by him or by any authorized person in his behalf. It bears stressing that they do not carry his signature, nor the time or date he took possession of them. It follows that they cannot be used to bind and prejudice the respondent absent any showing that he had actual and ample knowledge of their contents.

Lastly, complainant seems to belabor under the mistaken assumption that the basis of the respondent in instituting the civil case against it was the December 19 letter of authority. Well to point out, the suit was grounded on an oral contract of agency purportedly entered into between him and the complainant, represented by its duly authorized officers. This is evident from the averments embodied in the Complaint filed with the Bago City Trial Court x x x.

It is clear from the above that what respondent was trying to enforce were the terms and conditions of the contract. The letter, from his own admission, just served to officially confirm a done deal. It was, hence, utilized solely as documentary evidence to buttress respondent’s assertion regarding the existence of the agency agreement. In fact, the amount of compensation (to the tune of 10% of the market value of the property) he was recovering in the action was never mentioned in the letter, but apparently settled in the course of an oral conversation. Indeed, respondent, with or without the letter, could have instituted a suit against the complainant. There is no gainsaying that a verbal engagement is sufficient to create an attorney-client relationship.

In sum, we find that, under the premises, respondent can hardly be faulted and accused of deceit, malpractice and gross misconduct for invoking the aid of the court in recovering recompense for legal services which he claims he undertook for the complainant, and which the latter does not deny to have benefited from. Indeed, what he did was a lawful exercise of a right.³⁷ (Emphasis supplied)

From the above decision in the disbarment case, the Court accordingly found the existence of an attorney-client relationship between Peña and Urban Bank, giving ground to the former to collect fees on account of services he rendered in an ejectment case. It is precisely upon this argument that Peña had initiated Civil Case No. 754 for the recovery of compensation for his legal services. Civil Case No. 1088, on the other hand, is an offshoot of the enforcement of the trial court’s award in Civil Case No. 754.

In his first assignment of error, Lee denies engaging in forum-shopping when he filed CA-G.R. SP No. 65023 during the pendency of G.R. No. 145822, citing the Court’s Resolution of September 24, 2003 which denied Peña’s motion to dismiss the petition in G.R. No. 145822.

Lee also contends that in view of the injunctive pronouncement in the dispositive portion of the January 12, 2000 Decision of the Court of Appeals (in CA-G.R. SP No. 55667), to wit:

WHEREFORE, the instant petition is GRANTED. The Special Order and Writ of Execution both dated October 29, 1999 are ANNULLED and SET ASIDE.

Respondents are directed to desist from further implementing the Writ of Execution and to lift the garnishment and levy made pursuant thereto.

SO ORDERED. (Emphasis supplied)

private respondent Peña and the sheriff of Bago City Regional Trial Court, Branch 62, committed indirect contempt in proceeding with the 1999 and 2000 garnishment, levy and auction sales of Lee and his co-defendants’ properties. Lee argues that the sheriff and Peña –

engaged in a pattern of disobedience calculated to defy, circumvent, evade, resist and render futile and ineffective the injunctive and stay orders of the Court of Appeals in CA-G.R. SP No. 55667.³⁸

Lee claims that the October 31, 2000 Stay Order of the Court of Appeals subsisted at the time of the levy and sale on execution; that under Section 4, Rule 39 of the Rules of Court, the injunction contained in the January 12, 2000 Decision was immediately executory and by it, the trial court was decreed to enjoin further execution or implementation of the Special Order and Writ of Execution "effective continuously from November 9, 1999 up to the present."³⁹

Furthermore, Lee insists that the Amended Decision (which set aside the January 12, 2000 Decision) has not achieved finality on account of the timely filing of his motion for reconsideration; thus the January 12, 2000 Decision remained valid and effective, and the trial court, sheriff and Peña were enjoined from further implementing the Writ of Execution.

Finally, Lee argues that the appellate court committed grave error in its failure to annul and prohibit the "acts of execution" already carried out.

In the main, Lee would have this Court, in Civil Case No. 754, enjoin, annul and set aside the entire execution process, as well as declare respondents guilty of indirect contempt for proceeding with the levy and execution sale of his personal properties in violation of the Stay Order. In Civil Case No. 1088, he claims that EQLPI cannot be compelled to transfer his (Lee’s) share to Peña’s name due to the nullity of the execution process in Civil Case No. 754. Verily, a resolution of the issues raised in Civil Case No. 754 will affect the resolution of the issues raised in Civil Case No. 1088.

On the issue of forum-shopping, we find that the appellate court disregarded our ruling in G.R. No. 145822, given the denial therein of Peña’s motion to dismiss on precisely that ground. The Court has ruled before on this issue; it should now be considered settled.

We find no merit in the rest of Lee’s assigned errors.

When the appellate court promulgated the August 18, 2000 Amended Decision reversing the January 12, 2000 decision, it necessarily follows that the latter verdict was automatically deemed vacated. It ceased to exist in contemplation of law.⁴⁰ As such, there is no more injunction to speak of, or order to desist from further execution, much less lift garnishments and levies already made.

The Amended Decision effectively reinstated the trial court’s Special Order allowing execution pending appeal. Consequently, there is no merit in Lee’s insistence that the injunction of such execution pending appeal continues (under the January 12, 2000 Decision), for it diametrically opposes the Amended Decision’s grant of the same. When the Amended Decision was issued, it effectively superseded the January 12, 2000 Decision, vacating the latter in its entirety.

Likewise, Lee’s argument that the January 12, 2000 Decision was immediately executory and the trial court was thus directed to enjoin further implementation of the Special Order and Writ of Execution "effective continuously from November 9, 1999 up to the present" is erroneous. Stay of execution proceeds only from December 8, 2000, which is the date of the appellate court’s approval of the P40 million supersedeas bond posted by Lee and his co-petitioners. Prior thereto, all executions, garnishments and levies of Lee’s properties proceeding from the Special Order and the Writ of Execution are presumed regular, for they have not been legally stayed, except for a brief ninety (90) day period during which the TRO remained in force,⁴¹ and at which point in time the record does not demonstrate that execution, levy, garnishment or sale of his properties were made.⁴²

Under the Rules of Court, discretionary execution, like execution pending appeal, may be stayed only upon approval by the proper court of a sufficient supersedeas bond filed by the party against whom it is directed, conditioned upon the performance of the judgment or order allowed to be executed in case it shall be finally sustained in whole or in part.⁴³

Lee’s contention, that the filing and pendency of the Motion for Reconsideration of the Amended Decision, has the effect of staying the enforcement of the same,⁴⁴ thereby reinstating the injunction aspect of the January 12, 2000 Decision, lacks merit. If Lee’s argument were to be sustained, this would result to an absurd situation whereby an injunction, contained in a judgment that has been set aside in its entirety, could be enforced by the simple expedient of filing a motion for reconsideration.⁴⁵

There is likewise no merit in Lee’s claim that the trial court had no jurisdiction to issue the Special Order allowing execution pending appeal and the Writ of Execution since it had already lost jurisdiction over the case upon the perfection of his (Lee’s) appeal. Under the Rules of Court, in appeals by notice of appeal, the court loses jurisdiction over the case upon the perfection of the appeals filed in due time and the expiration of the time to appeal of the other parties,⁴⁶ and not just the plaintiff’s or defendant’s.

In the instant case, the trial court decision was issued on May 28, 1999. Peña filed the motion for execution pending appeal on June 8, 1999, or within the reglementary period to file his appeal. The trial court certainly still had jurisdiction over the case. Besides, prior to the transmittal of the original record or the record on appeal, the court may order execution pending appeal.⁴⁷ Execution of a judgment may issue upon good reasons.⁴⁸

Nor can we attribute a willful attempt by the trial court to delay the transmittal of the records of the case to the appellate court. When a motion for execution pending appeal is filed within the reglementary period for perfecting an appeal, the court must hear and resolve the motion for it would become part of the records to be elevated on appeal. Since the court has jurisdiction to act on the motion at the time it was filed, said jurisdiction continues until the matter is resolved and is not lost by the subsequent action of the opposing party.⁴⁹

Petitioner Lee’s claim that since the sheriff’s return of November 15, 1999 stated that the Writ of Execution had been "duly implemented," which means that the judgment had been satisfied in full, thereby prohibiting further execution of the judgment is without merit. The phrase simply means that the writ had been implemented, not necessarily that judgment had been satisfied in full.

When Lee seeks the annulment and setting aside of the levy and sale on execution of his personal properties in Civil Case No. 754 in his petition in CA-G.R. SP No. 65023, he has placed the entire execution process under review by this Court, and necessarily so, since we cannot determine the propriety of the pendency of Civil Case No. 1088 without settling the execution issue in Civil Case No. 754. In other words, we cannot allow Civil Case No. 1088 to proceed if the execution process in Civil Case No. 754 were to be invalidated.

We agree with the appellate court’s ratiocination in CA-G.R. SP No. 55667 that there is good ground to order execution pending appeal. Records show that on April 26, 2000, Urban Bank declared a bank holiday, and the Bangko Sentral ng Pilipinas (BSP) ordered its closure. Subsequently, Urban Bank was placed under receivership of the Philippine Deposit Insurance Corporation (PDIC); five of its senior officials, including defendants (in the trial court) Borlongan and Bejasa, were placed in the hold-departure list of the Bureau of Immigration and Deportation pending investigation for alleged anomalous transactions (e.g. violation of the Single Borrower’s Limit provision of Republic Act No. 8791, or the General Banking Law of 2000) and bank fraud which led to Urban Bank’s financial collapse.⁵⁰ Furthermore, several administrative, criminal and civil cases had been filed against Urban Bank officials, who are defendants in Civil Case No. 754. Also, in the Peña disbarment case, the Court found the existence of an agency relation between Peña and Urban Bank, thereby entitling the former to collection of fees for his services. Impending insolvency of the adverse party constitutes good ground for execution pending appeal.⁵¹

Barring any irregularity in the execution process in Civil Case No. 754, we find no cogent reason to allow the dismissal of Civil Case No. 1088, much less an indirect contempt charge against the respondents to prosper. By his own inaction, Lee failed to participate in the execution sale or to timely post a supersedeas bond to stay execution of the trial court’s decision. This eleventh-hour attempt to salvage and correct that which has been caused by his own undoing, is in vain. Notwithstanding his victory in the appeal in CA-G.R. CV No. 65756,⁵² he could no longer recover the personal properties sold at execution sale, except only upon Peña’s indemnity bond. Since there is no right to redeem personal property, the rights of ownership are vested to the purchaser at the foreclosure (or execution) sale and are not entangled in any suspensive condition that is implicit in a redemptive period.⁵³

Nowhere is the foregoing more evident than in Lee’s Reply to Peña’s Comment,⁵⁴ where the former seems to impress us with the notion that Peña’s independent suit (Civil Case No. 1088) to secure the transfer of EQLPI certificates of stock in his name must be considered to be still part of the execution proceedings in Civil Case No. 754, which must be enjoined as well. But it is not. Upon the sale of personal property on execution, all ownership and proprietary rights leave the judgment debtor and become vested in the purchaser,⁵⁵ and the judgment debtor may no longer recover the same by redemption, to which he has no right. As the new owners of the shares of stock in EQLPI, Manila Polo Club, Manila Golf and Country Club, Sta. Elena Golf and Country Club, and Tagaytay Highlands International Golf Club, Peña, his assignees, as well as the other purchasers at the execution sale where these shares were sold, are entitled – without delay – to transfer said shares in their name and exercise ownership over the same.

WHEREFORE, the petition is DENIED for lack of merit. The March 19, 2004 Decision of the Court of Appeals in CA-G.R. SP No. 65023, dismissing the petition for indirect contempt and the petition for prohibition and certiorari instituted to enjoin the Regional Trial Court of Bago City, Branch 62, from further proceeding with Civil Case Nos. 754 and 1088, as well as the July 27, 2004 Resolution denying the motion for reconsideration, are AFFIRMED.

SO ORDERED.

CONSUELO YNARES-SANTIAGO
Associate Justice

WE CONCUR:

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice
MINITA V. CHICO-NAZARIO Associate Justice	ANTONIO EDUARDO B. NACHURA Associate Justice
RUBEN T. REYES Associate Justice

A T T E S T A T I O N

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.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify 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

Footnotes

¹ Rollo, pp. 62-74; penned by Associate Justice Andres B. Reyes, Jr. and concurred in by Associate Justices Buenaventura J. Guerrero and Regalado E. Maambong.

² Id. at 78; penned by Associate Justice Andres B. Reyes, Jr. and concurred in by Associate Justices Regalado E. Maambong and Celia C. Librea-Leagogo.

³ CA rollo, Vol. I, p. 166; penned by Judge Edgardo L. Catilo.

⁴ Id. at 167-176; penned by Judge Henry J. Trocino.

⁵ Id. at 177-179.

⁶ Id. at 59-71; penned by Associate Justice Marina L. Buzon and concurred in by Associate Justices Godardo A. Jacinto and Edgardo P. Cruz.

⁷ Id. at 70.

⁸ Id. at 73-84; penned by Associate Justice Edgardo P. Cruz and concurred in by Associate Justices Godardo A. Jacinto and Roberto A. Barrios.

⁹ Id. at 83.

¹⁰ Id. at 86-89.

¹¹ Id. at 89.

¹² Id. at 37-38; penned by Associate Justice Perlita J. Tria Tirona and concurred in by Associate Justices Bienvenido L. Reyes and Roberto A. Barrios.

¹³ Id. at 40-44; penned by Associate Justice Edgardo P. Cruz and concurred in by Associate Justices Godardo A. Jacinto and Roberto A. Barrios.

¹⁴ Id. at 44.

¹⁵ Entitled "Magdaleno Peña v. EQL Properties, Inc., Eric Lee, et al."

¹⁶ Entitled "Delfin Gonzales, Jr. v. Magdaleno Peña."

¹⁷ Rollo, pp. 369-370.

¹⁸ Which, apart from EQLPI shares, consisted of shares of stock in Manila Polo Club, Manila Golf and Country Club, Sta. Elena Golf and Country Club and Tagaytay Highlands International Golf Club.

¹⁹ Rollo, pp. 193-195.

²⁰ Id., penned by Judge Henry J. Trocino.

²¹ Id. at 196-198; penned by Judge Henry J. Trocino.

²² Id. at 199-202.

²³ Id. at 189-192.

²⁴ Id. at 190-192.

²⁵ Id. at 383-412; penned by Associate Justice Jose L. Sabio, Jr. and concurred in by Associate Justices Delilah Vidallon-Magtolis and Hakim S. Abdulwahid.

²⁶ Appeal from the May 28, 1999 Decision as well as the October 29, 1999 Special Order of the Regional Trial Court of Bago City, Branch 62 in Civil Case No. 754 for recovery of agent’s commission and expenses, damages and attorney’s fees; entitled "Magdaleno M. Peña v. Urban Bank, Inc., Atty. Manuel R. Singson, Atty. Allan B. Gepty, Teodoro C. Borlongan, Corazon C. Bejasa, Arturo Manuel, Jr., Ben Y. Lim, Jr., P. Siervo H. Dizon, Atty. Gilbert T. Reyes, Atty. Jaime G. Hofileña, Atty. Nick Emmanuel C. Villaluz, Benjamin L. De Leon, Delfin C. Gonzalez, Jr., Eric L. Lee, Atty. Luis A. Verz Cruz, Atty. Leland R. Villadolid, Jr., Atty. Gilbert D. Gallos, and Atty. Remegio Michael A. Ancheta II."

²⁷ Petition for Indirect Contempt filed by Peña entitled "Magdaleno M. Peña v. Urban Bank, Inc., Benjamin L. De Leon, Delfin C. Gonzalez, Jr., Eric L. Lee, Teodoro C. Borlongan, Corazon M. Bejasa, Arturo Manuel, Jr., Ben Y. Lim, Jr., and Siervo P. Hizon."

²⁸ Should read as May 28, 1999.

²⁹ Should read as October 29, 1999.

³⁰ Rollo, p. 411.

³¹ For Indirect Contempt for alleged contumacious disobedience to the lawful order of the Court of Appeals in CA-G.R. SP No. 55667 and for Prohibition and Certiorari to prohibit respondent Judge from further proceeding in Civil Case Nos. 754 and 1088 relative to the alleged premature implementation of the execution pending appeal and despite the stay order of the Court of Appeals.

³² Rollo, p. 28.

³³ Urban Bank, Inc. v. Peña, A.C. No. 4863, September 7, 2001, 364 SCRA 597; penned by now Chief Justice Reynato S. Puno and concurred in by then Chief Justice Hilario G. Davide, Jr. and Associate Justices Santiago M. Kapunan, Bernardo P. Pardo and Consuelo Ynares-Santiago.

³⁴ Id. at 598-600.

³⁵ Id. at 600.

³⁶ Id. at 601.

³⁷ Id. at 602-605.

³⁸ Rollo, p. 34.

³⁹ Id. at 37.

⁴⁰ Imperial v. De la Cruz, 153 Phil. 697 (1973).

⁴¹ The TRO was issued on November 9, 1999, but it has not been shown when a copy of the same was received by the trial court, the sheriff or Peña.

⁴² Id.; rollo, p. 452. From November 10, 1999 until August 30, 2000, or during the effectivity of the TRO and the January 12, 2000 Decision of the CA, no execution of the trial court judgment in any manner was effected. The Amended Decision was issued on August 18, 2000. Execution sales were conducted only beginning August 31, 2000 and ended on October 30, 2000.

⁴³ RULES OF COURT, Rule 39, Sec. 3.

⁴⁴ Rollo, p. 22.

⁴⁵ Id. at 425.

⁴⁶ RULES OF COURT, Rule 41, Sec. 9, par. (3).

⁴⁷ Id.; Sec. 9, last par.

⁴⁸ Id., Rule 39, Sec. 2.

⁴⁹ Cebu Contractors Consortium Company v. Court of Appeals, G.R. No. 98046, December 14, 1992, 216 SCRA 597, 601.

⁵⁰ Rollo, pp. 156-157.

⁵¹ Philippine Nails and Wires Corporation v. Malayan Insurance Company, Inc., G.R. No. 143933, February 14, 2003, 397 SCRA 431.

⁵² The decision in CA-G.R. CV No. 65756 (November 6, 2003) failed to take into account our pronouncement in Urban Bank, Inc. v. Peña (September 7, 2001), where we found the existence of an attorney-client relationship between Urban Bank and Peña, albeit the matter of who is obligated to pay the latter was left unresolved.

⁵³ Paray v. Rodriguez, G.R. No. 132287, January 24, 2006, 479 SCRA 571, 580.

⁵⁴ Rollo, p. 448.

⁵⁵ Paray v. Rodriguez, supra at 579.

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