G.R. No. 135128 , August 26, 1999
Bonifacio Sanz Maceda, Jr. and Teresita Maceda-Docena, petitioners, vs. Development Bank of the Philippines and the Court of Appeals, respondents.

FACTS

Petitioners Bonifacio Sanz Maceda, Jr. and Teresita Maceda-Docena filed a Complaint for Specific Performance with Damages against respondent Development Bank of the Philippines (DBP) and its manager, Oscar De Vera. Petitioners alleged they were owners of the old Gran Hotel in Tacloban City and applied for a loan with DBP to build a new hotel. DBP approved a loan of P7,300,000.00. Petitioners claimed DBP, through De Vera, conspired with the contractor to enable undue fund releases, bloating the value of work accomplished. They were compelled to file cases against the contractor and De Vera. Petitioners alleged DBP engaged in dilatory tactics in releasing loan funds until the loan availment period lapsed, threatened foreclosure, and prevented them from completing the hotel. They prayed for DBP to release the loan balance, nullify interests and charges, and pay various damages. DBP countered that releases were made through petitioner Maceda, Jr., that it was enjoined from further releases due to the case filed by petitioners against the contractor, and that petitioners failed to comply with equity build-up requirements and loan terms. The trial court rendered a Decision on February 25, 1997, in favor of petitioners, ordering DBP to, among other things, release the unreleased loan balance of P1,952,489.10, pay interest on a portion thereof, return certain interest/charges, and pay moral, exemplary, and actual damages, including P17,547,510.90 for additional completion costs. DBP filed a Notice of Appeal. Petitioners filed a Motion for Reconsideration seeking to increase the awards and a Motion for Execution Pending Appeal. On October 2, 1997, the trial court issued an Order modifying its Decision by increasing the amounts awarded and granting execution pending appeal for two awards: (a) the release of the loan balance of P1,952,489.10 and payment of 12% interest per annum on P1.003M from January 1978; and (b) the payment of P17,547,510.90 representing additional costs to complete the hotel. The Court of Appeals granted DBP’s petition and annulled the trial court’s Order insofar as it ordered partial execution pending appeal. Petitioners elevated the case to the Supreme Court.

ISSUE

Whether the Court of Appeals erred in annulling the trial court’s Order granting execution pending appeal.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ Decision. The Court held that execution pending appeal is an exception to the general rule that a judgment cannot be executed until it becomes final and executory. The movant has the burden of showing good reasons for execution pending appeal. The reasons must constitute superior circumstances demanding urgency, and the existence of good reasons rests largely in the discretion of the trial court. In this case, the trial court’s stated reasons for granting execution pending appeal were: (1) to prevent further delay in the completion of the hotel project, which had been stalled for over twenty years; (2) the appeal was frivolous and dilatory; and (3) the amounts subject of execution were a mere portion of the total judgment award. The Supreme Court found these reasons insufficient. The long delay alone did not justify execution pending appeal, as the case’s age was not attributable solely to DBP. The claim that the appeal was frivolous and dilatory was a mere allegation without proof. The fact that the amounts were only a portion of the award was not a compelling reason. The Court emphasized that the possibility of the judgment being reversed on appeal always exists, and execution pending appeal should not be granted if there is no showing that the appellee will be unable to satisfy the damages awarded should the appeal be decided in the appellant’s favor. Petitioners failed to discharge their burden of presenting good reasons to justify execution pending appeal. Therefore, the Court of Appeals correctly annulled the trial court’s Order.