G.R. No. 47955 and 47993; June 27, 1941
MARIANO B. ARROYO Y OTROS, petitioners, vs. ARSENIO DIZON, Judge of First Instance of Iloilo, and RICARDO CARREON, as Administrator of the Intestate Estate of Concepcion Gerona, respondents.

FACTS

This case consolidates two petitions (G.R. Nos. 47955 and 47993) concerning Civil Case No. 9137 of the Court of First Instance of Iloilo. In that case, respondent Ricardo Carreon, as administrator of the intestate estate of Concepcion Gerona, filed an action for reivindicacion against the defendants (now petitioners) Lucio Lacson (as executor of Ignacio Arroyo), Jose Ma. Arroyo, Jr. (as administrator of Jose Ma. Arroyo), and Mariano B. Arroyo. The complaint sought recovery of ownership and possession of certain properties and payment of damages corresponding to the fruits/products of said properties. The trial court rendered judgment in favor of the plaintiff, Carreon. The dispositive portion ordered, among other things: (1) declaration that the estate of Concepcion Gerona is entitled to ownership of a one-half, pro indiviso share of the properties; (2) delivery of possession of specified portions; and (3) payment of various sums as the value of fruits received by the defendants from 1895 to 1937, with orders for accounting for subsequent periods. After being notified of the judgment, the defendants filed a motion for new trial, which was denied. They then filed a notice of appeal, appeal bond, and record on appeal. While the record on appeal was pending approval, the plaintiff (Carreon) filed a motion for execution of the judgment, alleging that the defendants lacked sufficient assets to satisfy the damages awarded and that the appeal was merely dilatory as the matter was already res judicata. The defendants opposed the motion. The trial court granted the motion for execution in its order of October 3, 1940, and set a bond of P500,000 for the defendants to file if they wished to suspend the execution. Upon a motion for reconsideration, the court, in an order dated October 30, 1940, reduced the bond to P400,000 but maintained the order for execution. The execution ordered was partial, covering only the damages awarded, which amounted to P573,223.95. The petitioners then filed these petitions for certiorari.

ISSUE

Whether the Court of First Instance of Iloilo acted with grave abuse of discretion in ordering the execution of its judgment pending appeal under Rule 39, Section 2 of the Rules of Court.

RULING

The Supreme Court granted the writs of certiorari and set aside the challenged orders of the trial court. The Court held that the trial judge committed a grave abuse of discretion in ordering execution pending appeal. The power to order such execution is discretionary but must be based on “good reasons” stated in a special order. The Court found that the reasons given by the trial judge were not “good reasons” as required by law. The judge’s order cited the defendants’ alleged lack of sufficient property and the purported dilatory nature of the appeal based on res judicata. The Supreme Court ruled that the first reason was not supported by competent evidence, as the allegation of insolvency was based on an ex parte affidavit and was contradicted by the defendants’ ownership of Torrens titles to the very properties in litigation. The second reason—that the appeal was dilatory due to res judicata—was an error, as the existence of res judicata is a question of law proper for appeal and not a valid ground for immediate execution. The Court emphasized that execution pending appeal is an extraordinary remedy, and the discretion to grant it must be exercised based on circumstances that are clearly established and constitute compelling reasons for immediate execution, which were absent in this case. The Court distinguished between a mere error of judgment and a grave abuse of discretion, finding the latter present as the trial court’s order was issued without legal basis and in excess of its jurisdiction. The dissenting opinion argued that the trial court did not abuse its discretion, as it acted after considering the circumstances, and that the Supreme Court should not interfere absent a clear showing of arbitrary or despotic exercise of power. The majority, however, maintained that the reasons given were unfounded and constituted an abuse of discretion.