National Waterworks & Sewerage Authority v. Catolico
REITERATIONFacts
1. The Antecedents: The Province of Misamis Occidental instituted a case to recover possession, administration, operation, and control of its waterworks systems, which had been taken over by the National Waterworks and Sewerage Authority (NAWASA) in 1956 pursuant to Republic Act No. 1383. The lower court ruled in favor of the Province, declaring it the absolute owner of the systems and ordering NAWASA to return them, refund P13,855.44, account for income since April 1956 or pay P7,823.76 monthly, and pay P50,000 in damages and P5,000 in attorney's fees. 2. Procedural History: NAWASA appealed the lower court's decision. Subsequently, the Province filed a motion for execution of the judgment pending appeal. Despite NAWASA's objection that it had not yet received a copy of the decision, the lower court granted the motion for execution, and the writ was issued, returning possession of the systems to the Province. NAWASA then filed a motion to post a supersedeas bond to stay execution, which was denied. A second writ of execution was issued, this time addressed to the Sheriff of Manila. 3. The Petition: NAWASA filed a petition for certiorari (G.R. No. L-21705) seeking to set aside the lower court's order for execution pending appeal and the denial of its motion to stay execution. NAWASA argued that the execution order was premature, issued without valid grounds, and that it was entitled to stay execution by posting a supersedeas bond. The appeal (G.R. No. L-24327) challenged the lower court's decision on the merits. The Supreme Court found that Republic Act No. 1383, under which NAWASA acted, had been declared unconstitutional, rendering the appeal on ownership and possession meritless. The Court denied the certiorari petition and affirmed the appealed decision, except for the awards of exemplary/temperate damages and attorney's fees, which were eliminated due to NAWASA's good faith reliance on the statute.
Issue(s)
Whether the lower court committed a grave abuse of discretion in ordering the execution of its decision pending appeal. Whether the lower court committed a grave abuse of discretion in denying the motion to stay execution upon the filing of a supersedeas bond. Whether Republic Act No. 1383, insofar as it made NAWASA the owner of local waterworks systems, is constitutional. Whether the award of exemplary and temperate damages and attorney's fees was justified.
Ruling
The petition for certiorari in G.R. No. L-21705 is denied and the complaint dismissed. The decision in G.R. No. L-24327 is affirmed in all other respects, with the elimination of the award for exemplary and temperate damages and attorney's fees.
Ratio Decidendi
On the issue of execution pending appeal: The Court found no merit in NAWASA's contention that the execution was prematurely issued. Firstly, there is no legal provision barring execution of a decision not yet final before notice is served on the judgment debtor. Secondly, NAWASA's counsel was served notice of the decision by registered mail on May 3, 1963, and received the motion for execution on May 13, indicating sufficient notice. Furthermore, NAWASA's representative was present in court when the motion was heard, and an opposition was filed, demonstrating awareness and opportunity to object. The Court reiterated that execution pending appeal is permissible and not automatically stayed by an appeal. On the issue of denying the supersedeas bond: The Court held that while execution pending appeal may be suspended upon filing a supersedeas bond, the judgment debtor is not entitled to this suspension as a matter of right. The court has discretion to order it. Given that Republic Act No. 1383, under which NAWASA acted, had been declared unconstitutional by the Supreme Court in previous rulings, the appeal regarding the ownership and control of the systems was deemed to have a dilatory effect. Therefore, the lower court was justified in refusing to suspend the execution despite the offer of a supersedeas bond. On the constitutionality of Republic Act No. 1383: The Court reiterated its previous pronouncements that Republic Act No. 1383 is unconstitutional insofar as it vests ownership of local waterworks systems in NAWASA. This provision constitutes a taking of private property without just compensation and due process of law. This established jurisprudence rendered NAWASA's appeal on the ownership and control of the systems untenable. On the award of damages and attorney's fees: The Court found that the lower court was not justified in awarding P50,000.00 as exemplary and temperate damages and P5,000.00 as attorney's fees. NAWASA took over the systems in compliance with Republic Act No. 1383, which it was entitled to assume was constitutional. Therefore, NAWASA acted in good faith, and the award of damages and attorney's fees was deleted.
Main Doctrine
The Court denied a petition for certiorari seeking to set aside an order for execution pending appeal and the denial of a motion to stay execution via supersedeas bond, finding no abuse of discretion. The Court affirmed the decision in the main case, except for the award of exemplary and temperate damages and attorney's fees, which were deleted due to the defendant's good faith in complying with a statute later declared unconstitutional.