G.R. No. 126158 September 23, 1997
PHILIPPINE BANK OF COMMUNICATIONS, petitioner, vs. THE COURT OF APPEALS, HON. PEDRO T. SANTIAGO, as Judge, RTC of Quezon City Branch 101, FALCON GARMENTS CORPORATION, QUALITY LABELS, INC., ROBERT SY doing business under the name and style JOBERT PRINTING SERVICES; EUGENIO POA, MAGIN TABUSO, MAKILITO MAHINAY, EFREN CACHERO, CESAR M. TORIO and EFREN C. GUMBAC, respondents.

FACTS

Private respondent Falcon Garments Corporation (Falcon) opened a current account with petitioner Philippine Bank of Communications (PBCom). Falcon later obtained a loan from PBCom. Falcon defaulted on the loan in December 1993. On February 9, 1995, Falcon filed a complaint against PBCom in the RTC of Quezon City (Civil Case No. Q-95-22625) praying for the restoration to its current account of alleged unauthorized withdrawals totaling P12,729,092.78, plus interest, damages, and attorney’s fees. PBCom denied liability and filed a compulsory counterclaim for the loan amount, plus interest, damages, and attorney’s fees. On January 2, 1996, the trial court (Branch 78) rendered a decision ordering PBCom to restore the sum to Falcon’s current account and to pay exemplary damages, attorney’s fees, and litigation expenses. It also ordered Falcon to pay PBCom its loan with interest. PBCom filed a notice of appeal. Falcon filed a Motion for Execution Pending Appeal. The case was re-raffled to Branch 101, presided by Judge Pedro T. Santiago, after Judge Lopez inhibited himself. Falcon filed an Ex-Parte Manifestation and Motion on May 7, 1996, praying that the money judgment be directly paid to it instead of being restored to its current account due to strained relations with PBCom. On the same day, Judge Santiago granted the motion and authorized the issuance of a writ of execution pending appeal, ordering PBCom to immediately pay Falcon the sum, and Falcon to pay its obligation to PBCom, upon a bond. The writ was issued and served. PBCom sought relief from the Court of Appeals, which initially issued a writ of preliminary injunction but eventually, on September 13, 1996, upheld the validity of the writ of execution pending appeal and dissolved the injunction. On the same day, Falcon obtained an alias writ of execution which was served upon PBCom. PBCom filed the present petition alleging grave abuse of discretion.

ISSUE

Whether the Court of Appeals committed grave abuse of discretion in affirming the order of the trial court granting the issuance of a writ of execution pending appeal, considering that good reasons do not exist for its issuance under Section 2, Rule 39 of the Rules of Court.

RULING

Yes. The Supreme Court granted the petition, annulled and set aside the decision of the Court of Appeals dated September 13, 1996, and likewise annulled and set aside the order of the RTC dated May 7, 1996. The trial court was ordered to determine the exact amount taken by private respondent by virtue of the writ(s) of execution, which amount private respondent was ordered to return to petitioner.
The Supreme Court held that discretionary execution is permissible only upon good reasons consisting of compelling circumstances justifying immediate execution. The supposed good reasons relied upon by Judge Santiago—the filing of a collection case by Solid Bank against Falcon and a police blotter entry—did not constitute good reasons as they were irrelevant to the case against PBCom and did not demonstrate any compelling circumstance to justify execution pending appeal. Furthermore, the writ of execution varied the judgment, which ordered restoration to Falcon’s current account, not direct payment to Falcon. An order of execution which varies the tenor of the judgment is a nullity. The Court also noted the irregular and harassing manner in which the writ was enforced.