G.R. No. 196990, July 30, 2012
ARTURO DELA CRUZ, SR., PETITIONER, VS. MARTIN AND FLORA FANKHAUSER, RESPONDENTS.

FACTS

Petitioner Arturo dela Cruz, Sr. and respondents Martin and Flora Fankhauser entered into a contract of lease with option to buy in 1988. The contract stipulated that respondents would advance certain sums, with rentals deemed paid from the interest on these advances, culminating in a perfected sale upon full payment. Respondents failed to advance the monthly amounts, prompting petitioner to seek rescission. The Regional Trial Court granted rescission, but the Court of Appeals reversed this, finding the rescission premature under Republic Act No. 6552. The CA instead ordered respondents to pay the balance of the purchase price and rental arrears within 60 days from finality of its decision. Upon failure to pay, respondents were to vacate and pay adjusted arrears. This CA decision became final in December 2007.
In January 2008, respondents informed petitioner that checks for the balance and arrears were ready. Petitioner did not claim them and instead moved for execution of the CA decision’s second part—the order for respondents to vacate and pay. The RTC granted the motion for execution, ordering enforcement of the entire dispositive portion. Petitioner appealed this RTC order to the CA, arguing it varied the judgment. The CA dismissed the appeal, citing Rule 41, Section 1(e) of the Rules of Court, which states no appeal may be taken from an order of execution.

ISSUE

Whether the Court of Appeals erred in dismissing petitioner’s appeal from the RTC’s order of execution on the procedural ground that such orders are not appealable.

RULING

Yes, the Court of Appeals erred. The Supreme Court granted the petition, set aside the CA’s resolutions, reinstated the appeal, and remanded the case to the CA for further proceedings. While Rule 41 generally prohibits appeals from orders of execution, established jurisprudence recognizes exceptions. Citing De Guzman v. Court of Appeals and Philippine Amusement and Gaming Corporation v. Aumentado, Jr., the Court held that an appeal is permissible when the defeated party alleges that the order of execution varies the terms of the judgment or when the judgment’s terms require interpretation and the trial court’s interpretation in the execution order is contested. Petitioner’s core argument was that the RTC’s execution order varied the essence of the final CA judgment. Therefore, his appeal fell squarely within this exception and should not have been dismissed on a procedural technicality. The CA should have addressed the appeal on its merits. The Supreme Court, not being a trier of facts, remanded the case to the CA to properly examine the evidence and resolve whether the RTC’s order of execution indeed varied the judgment.