Philippine Long Distance Telephone Company v. Genovea
REITERATIONFacts
The Antecedents: Better Buildings, Inc. (BBI) supplied janitorial maintenance and sanitation services to Philippine Long Distance Telephone Company (PLDT) for over ten years. In 1977, BBI requested a readjustment of its monthly billings due to increased costs of materials and employee benefits. PLDT agreed to a readjustment of P550.00 per janitor monthly. BBI claimed a total of P315,906.03 became due, with PLDT paying only P103,281.25, leaving a balance of P212,624.78. Procedural History: BBI filed a complaint against PLDT for the recovery of the balance, plus P29,038.25 for regular billings, P7,400.00 for special jobs, and attorney's fees. PLDT denied liability, asserting BBI was the independent employer responsible for employee benefits and that payments were made or claims were exaggerated. At pre-trial, the sole issue of payment was agreed upon. BBI's documentary evidence was admitted over PLDT's objections. PLDT's motion for postponement due to a witness's illness was denied, leading to PLDT being deemed to have waived its right to present evidence. A decision was rendered in favor of BBI, awarding all amounts prayed for. PLDT filed a Motion for New Trial and/or Reconsideration, arguing it never admitted liability, BBI's evidence was unapproved, and it was deprived of its day in court. BBI filed a Motion for Immediate Execution. The respondent Judge denied PLDT's motion and granted BBI's motion for immediate execution, citing PLDT's "clear intention" to delay and the admission of liability. A Writ of Execution was issued the following day. The Petition: PLDT filed a Petition for Certiorari, Mandamus, and Prohibition, seeking to nullify the Order authorizing execution and the Writ of Execution, alleging grave abuse of discretion. This Court issued a temporary restraining order. Subsequently, PLDT filed a Notice of Appeal and a Record on Appeal. BBI also filed a Motion for Approval of Bill of Costs, which was approved by the respondent Judge, directing banks to deposit a substantial sum including principal, interest at 21% per annum, attorney's fees, and costs.
Issue(s)
Whether the respondent Judge committed grave abuse of discretion in issuing an order for execution pending appeal. Whether the respondent Judge committed grave abuse of discretion in approving the Bill of Costs ex-parte. Whether the respondent Judge committed grave abuse of discretion in awarding attorney's fees as costs. Whether the respondent Judge committed grave abuse of discretion in approving the 21% interest rate.
Ruling
The Supreme Court granted the petition, nullified the Order dated June 7, 1982, and the Writ of Execution dated June 8, 1982, finding they were issued with grave abuse of discretion. The Court also set aside the Decision dated April 27, 1982, and directed the respondent Judge to reopen Civil Case No. 39943 for the reception of petitioner PLDT's evidence, after which a new judgment should be rendered. The temporary restraining order was made permanent.
Ratio Decidendi
On the issue of execution pending appeal: The Court held that the "delay" cited by the respondent Judge as the rationale for issuing execution pending appeal is not per se a good and valid reason. Neither is the apprehension that the appeal of a defeated party is merely dilatory sufficient to justify execution pending appeal, as this prematurely judges the merits of the appeal. The Court found that PLDT's position was a denial of liability, not an admission, and that the respondent Judge should have reopened the case for the reception of PLDT's evidence to satisfy the requirements of substantial justice and afford PLDT its day in court. The urgency of execution was not clearly patent, nor was BBI's right to execution pending appeal undeniable. On the approval of the Bill of Costs: The Court ruled that the approval of the Bill of Costs ex-parte was in grave abuse of discretion. Firstly, the judgment had not yet become final due to PLDT's appeal. Secondly, the items listed departed from the basic meaning of judicial costs, which are expenses of litigation as between litigants and not the monetary sums awarded in a judgment. Thirdly, the respondent Judge contravened procedural rules by acting on the Bill of Costs initially and approving it immediately, bypassing the Clerk of Court's role and the required notice to the adverse party. On attorney's fees as costs: The Court clarified that attorney's fees are not normally taxable as costs under Section 6, Rule 142 of the Rules of Court, unless provided by the rules of civil law, which was not the case here. These fees are not included within the expenses and costs of any trial or proceeding. On the interest rate: The Court found patent error in the approval of the 21% interest rate. The Decision stipulated "legal rate of interest," and BBI's justification that it borrowed money at that rate was immaterial and irrelevant to the computation of the legal rate of interest awarded in a judgment.
Main Doctrine
The "delay" cited by a trial court as a rationale for issuing execution pending appeal is not per se a good and valid reason, nor is the apprehension that the appeal of a defeated party is merely dilatory sufficient to justify execution pending appeal. Furthermore, the approval of a Bill of Costs ex-parte without proper notice and in contravention of procedural rules, especially when the judgment has not yet become final, constitutes grave abuse of discretion.