GR 76018; (February, 1989) (Digest)
G.R. No. 76018 February 10, 1989
PHILIPPINE NATIONAL BANK, petitioner, vs. HON. BENIGNO M. PUNO, INDUSTRIAL ENTERPRISES, INC., and DEPUTY SHERIFF ARTURO C. FLORES, respondents.
FACTS
Private respondent Industrial Enterprises, Inc. (IEI) held a coal operating contract. It assigned this contract to Marinduque Mining and Industrial Corporation (MMIC) with government approval. Subsequently, petitioner Philippine National Bank (PNB) extrajudicially foreclosed on MMIC’s properties, including mining equipment related to the coal project. IEI then filed a complaint for rescission and damages against MMIC and PNB. The Regional Trial Court rendered a summary judgment in favor of IEI, ordering, among other things, the return of the coal blocks and equipment, and holding MMIC and PNB jointly and solidarily liable for moral and exemplary damages and attorney’s fees. PNB appealed this decision to the Court of Appeals.
During the pendency of this appeal, IEI filed a motion for execution pending appeal. The respondent judge granted the motion, ordering the issuance of a writ of execution. PNB filed a motion for reconsideration, which was denied. PNB then filed this special civil action for certiorari, arguing that the execution was improperly granted.
ISSUE
Whether the respondent judge committed grave abuse of discretion in granting execution pending appeal.
RULING
Yes, the Supreme Court granted the petition and annulled the order for execution pending appeal. The Court held that execution pending appeal is an exceptional remedy, permissible only upon good reasons stated in a special order. These reasons must constitute superior circumstances demanding urgency that outweigh the injury or damage to the adverse party if the appeal is eventually found meritorious. The trial court’s order cited two grounds: the appeal was frivolous and dilatory, and PNB was a government-owned bank with resources to satisfy the judgment.
The Supreme Court found these reasons insufficient and constituted grave abuse of discretion. The mere filing of an appeal does not make it dilatory; PNB’s appeal raised substantive legal questions regarding its subsidiary liability and the propriety of solidary damages, which were not patently frivolous. Furthermore, the financial capacity of a party, especially a banking institution, is not by itself a compelling reason for execution pending appeal. To rule otherwise would unjustly discriminate against a party simply for being financially capable, placing it at a disadvantage despite having a statutory right to appeal. Since the requisites for execution pending appeal were not satisfied, the grant thereof was invalid. The Court made permanent the temporary restraining order it had previously issued.