G.R. No. L-21705 and G.R. No. L-24327, April 27, 1967
Case Parties:

NATIONAL WATERWORKS AND SEWERAGE AUTHORITY, petitioner, vs. HON. ALFREDO CATOLICO, Presiding Judge CFI-Misamis Occidental, Branch I, Province of Misamis Occidental; SEBASTIAN L. MANLAWE, Acting Clerk of CFI-Misamis Occidental and the Sheriff of Manila, respondents.
THE PROVINCE OF MISAMIS OCCIDENTAL, plaintiff-appellee, vs. THE NATIONAL WATERWORKS AND SEWERAGE AUTHORITY, defendant-appellant.

FACTS

1. The Province of Misamis Occidental filed Civil Case No. 2281 on July 13, 1960, against the National Waterworks and Sewerage Authority (NAWASA) to recover the possession, administration, operation, and control of the Misamis and Oroquieta Waterworks Systems, which NAWASA had taken over in 1956 under Republic Act No. 1383 .
2. On April 30, 1963, the Court of First Instance of Misamis Occidental (presided by Judge Alfredo Catolico) rendered a decision declaring the Province as the absolute owner of the Systems. It ordered NAWASA to: (a) return the Systems; (b) refund P13,855.44 taken from the Province; (c) account for the income from April 1956 or, in default, pay P7,823.76 monthly; (d) pay P50,000 as temperate, punitive, and exemplary damages; and (e) pay P5,000 as attorney’s fees and costs.
3. Copy of the decision was sent by registered mail to NAWASA’s counsel on May 3, 1963. On May 8, the Province filed a motion for execution pending appeal, set for hearing on May 25. NAWASA’s counsel received the motion copy on May 13 and opposed it on May 14, alleging non-receipt of the decision. NAWASA also requested a postponement via telegram on May 24.
4. On May 25, Judge Catolico denied the postponement, overruled NAWASA’s objection, and granted the motion for execution. A writ of execution was issued on May 27, 1963, and on May 28, the Systems were turned over to the Province (the money judgment remained unsatisfied).
5. NAWASA filed an urgent motion on May 31, 1963, for permission to post a supersedeas bond to stay execution, supplemented on June 30. By an order dated July 2, 1963 (issued by Judge Arturo B. Santos, Judge Catolico being on leave), the motion was denied after receiving NAWASA’s evidence. Another writ of execution was issued on July 5, addressed to the City Sheriff of Manila.
6. NAWASA filed a petition for certiorari (G.R. No. L-21705) on August 16, 1963, alleging abuse of discretion by the lower court in ordering execution pending appeal and denying the stay of execution upon a supersedeas bond. NAWASA also appealed the main decision (G.R. No. L-24327).

ISSUE

1. Whether the lower court committed grave abuse of discretion in ordering the execution of its decision pending appeal.
2. Whether the lower court erred in denying NAWASA’s motion to stay execution upon the posting of a supersedeas bond.
3. Whether the lower court’s decision in the main case (Civil Case No. 2281) is correct, particularly regarding the award of damages and attorney’s fees.

RULING

1. On the Petition for Certiorari (G.R. No. L-21705): The Supreme Court found no merit in NAWASA’s petition and denied the writ.
* The order of execution was not premature. No legal provision bars execution of a non-final decision before notice is served on the judgment debtor. Evidence showed NAWASA had constructive notice: the decision was mailed on May 3; NAWASA’s counsel received the motion for execution copy on May 13; NAWASA’s representative in Misamis Occidental knew of the decision and was present at the May 25 hearing; and NAWASA filed an opposition on May 14.
* The execution pending appeal was justified. The Supreme Court had repeatedly held, since 1959, that Republic Act No. 1383 was unconstitutional insofar as it made NAWASA the owner of local waterworks systems, as it constituted a taking of private property without just compensation and due process. Given this settled unconstitutionality, NAWASA’s appeal on the ownership and possession of the Systems could not prosper and was merely dilatory.
* The suspension of execution upon a supersedeas bond is not a matter of right but rests on the court’s sound discretion. Considering the settled unconstitutionality of the law under which NAWASA acted and the dilatory nature of the appeal, the lower court did not abuse its discretion in denying the stay.
2. On the Appeal (G.R. No. L-24327): The Supreme Court modified the lower court’s decision.
* The decision was affirmed regarding: (a) the declaration of the Province as absolute owner of the Systems; (b) the order for NAWASA to return the Systems; (c) the order to refund P13,855.44; and (d) the order to account for the income or pay the monthly amount. This affirmation was based on the settled doctrine of the unconstitutionality of the relevant provision of Republic Act No. 1383 .
* The decision was modified by eliminating the awards of P50,000 as exemplary and temperate damages and P5,000 as attorney’s fees. The Court held that NAWASA acted in good faith in taking over the Systems, as it was implementing a law ( Republic Act No. 1383 ) which it was entitled to presume constitutional at the time.
Dispositive Portion:
In G.R. No. L-21705, the writ was denied and the petition dismissed, with costs against NAWASA.
In G.R. No. L-24327, with the elimination of the awards for damages and attorney’s fees, the decision was affirmed in all other respects, without special pronouncement as to costs.