FACTS:

Herein petitioner filed a complaint for recovery of the contractual liability of respondent, for the recovery of the sum of P2,698,637.00, representing the insured value of the lost or undelivered 377.168 metric tons of Prime Newly Hot Rolled Steel Billets, including attorney’s fees and costs.

Respondent filed a motion to dismiss, which was denied by the court. Respondent filed a motion for extension of time to file an answer. Respondent’s period to file a responsive pleading had expired, hence, respondent court declared respondent in default. Whereupon reception of petitioner’s evidence ex parte followed.

Respondent court gave judgment for petitioner.
Respondent filed a notice of appeal against said verdict. But petitioner moved for execution of the judgment pending appeal, which respondent opposed. Disposing of said motion, the public respondent issued the now assailed Order, as well as the writ of execution pending appeal. Upon the filing of the surety bond by petitioner, the respondent Branch Sheriff served on respondent-insurer’s bank a notice of garnishment.

On appeal, the CA ruled that the RTC gravely abused its discretion when it issued the Order granting petitioner’s Motion for Execution pending appeal.

The CA annulled the Writ of Execution.

Hence, this recourse.

ISSUE:

Whether the RTC Order allowing execution pending appeal was proper.

RULING:

Execution Pending Appeal

The present Rules grant the trial court the discretion to order the execution of a judgment or a final order even before the expiration of the period to appeal, also upon good reasons stated in a special order after due hearing. Such discretion, however, is allowed only while the trial court still has “jurisdiction over the case and is in possession of either the original record, or the record on appeal, as the case may be, at the time of the filing of such motion.”

After the trial court has lost jurisdiction, the motion for execution pending appeal may be filed in the appellate court.

Discretionary execution may only issue upon good reasons to be stated in a special order after due hearing.

Jurisprudence teaches that the trial court cannot pass upon the question of whether an appeal is frivolous or dilatory. That prerogative belongs to the appellate tribunal.

In Philippine Bank of Communications v. CA, the Court explained that an execution pending appeal may be allowed only upon a showing of good reasons, such as the impending insolvency of the adverse party or the patently dilatory intent of the appeal. And if the reason is the latter, it is only the appellate court, not the trial court, that can appreciate the dilatory intent of the appeal.

Mere Posting of Bond Insufficient for Execution Pending Appeal

“The mere filing of a bond by the successful party is not a good reason for ordering execution pending appeal, as ‘a combination of circumstances is the dominant consideration which impels the grant of immediate execution[;] the requirement of a bond is imposed merely as an additional factor, no doubt for the protection of the defendant’s creditor.’”

In Diesel Construction Company, Inc. v. Jollibee Food Corporation, we have stressed:

“. . . [T]he execution of a judgment before its finality must be founded on good reasons. The yardstick remains the presence or the absence of good reasons consisting of exceptional circumstances of such urgency as to outweigh the injury or damage that the losing party may suffer, should the appealed judgment be reversed later. Good reason imports a superior circumstance that will outweigh injury or damage to the adverse party.”

Thus, the CA committed no reversible error in annulling the RTC Order allowing an execution pending appeal.