Sonida Industries, Inc. v. Rural Telephone Company, Inc.
REITERATIONFacts
1. The Antecedents: Respondent Rural Telephone Company, Inc. (Rutelco), holder of a public telephone system franchise, leased its Urdaneta operations to petitioner Sonida Industries, Inc. Petitioner alleged that Rutelco concealed material facts, including a canceled municipal franchise and outstanding debt, leading to petitioner's failure to pay monthly rentals. Rutelco subsequently filed a case for rescission of the agreement and damages. Notably, petitioner Sonida later became the owner of the leased premises through foreclosure proceedings initiated by MetroBank, to whom Rutelco had mortgaged the property. 2. Procedural History: The Regional Trial Court (RTC) of Pangasinan, Branch XXXIX, presided over by respondent Judge Cornelio W. Wasan, Sr., rendered a decision on June 25, 1986, ordering Sonida Industries to pay monthly rentals with interest, rescinding the Memorandum of Agreement, and awarding litigation expenses. Sonida received notice of this decision on July 7, 1986, and filed its notice of appeal on July 21, 1986. Subsequently, on July 25, 1986, Rutelco filed a motion for execution pending appeal. The respondent judge granted this motion on August 7, 1986, via a special order. A motion for reconsideration by Sonida was denied. 3. The Petition: Petitioner Sonida Industries, Inc. filed a petition for certiorari and prohibition with an application for preliminary injunction or restraining order under Rule 65 of the New Rules of Court. They contend that the respondent judge acted with grave abuse of discretion and exceeded his jurisdiction by issuing the special order for execution pending appeal. The grounds cited are that the order was issued after the appeal had been perfected, thereby divesting the trial court of jurisdiction, and that there was no sufficient good reason for granting immediate execution, especially since petitioner had become the owner of the leased premises.
Issue(s)
Whether the respondent judge acted with grave abuse of discretion in issuing the special order of execution pending appeal after the appeal had been perfected, specifically regarding jurisdiction and perfection of appeal. Whether there was a sufficient and good reason for granting immediate execution pending appeal.
Ruling
The petition is GRANTED. The questioned special order of execution pending appeal is SET ASIDE, and the provincial sheriff of Pangasinan is enjoined from enforcing the writ of execution.
Ratio Decidendi
On the issue of jurisdiction and perfection of appeal: The Court held that the trial court had lost jurisdiction over the case when it issued the special order granting the motion for execution pending appeal. Under Paragraph 1, Section 23 of the Interim Rules, perfection of an appeal occurs upon the expiration of the last day to appeal by any party. The mere filing of a notice of appeal does not divest the trial court of jurisdiction; it can still take cognizance of motions filed within 15 days from notice of the decision. In this case, the notice of the decision was received on July 7, 1986. The motion for execution pending appeal was filed on July 25, 1986, which was 18 days thereafter, thus beyond the reglementary period. The appeal was perfected on July 22, 1986 (expiration of the last day to appeal). Since the motion was filed after the appeal was perfected, the trial court had already lost jurisdiction and could not validly grant the motion. The Court clarified that the respondent erred in applying Rule 41, Section 9 of the Rules of Court, as the present procedure under the Interim Rules does not require an appeal bond or record on appeal in most cases, and perfection is determined by the expiration of the reglementary period. On the issue of sufficient and good reason for immediate execution: The Court agreed with the petitioner that there was no sufficient and good reason for ordering immediate execution. While the trial judge has discretion, appellate intervention is proper in cases of abuse of discretion. The grounds relied upon by the trial court—that the appeal was dilatory, the MOA had expired, and Rutelco could post a bond—were found insufficient. The Court noted that the trial judge had granted postponements, contradicting the claim of a dilatory appeal. The expiration of the agreement was irrelevant as Sonida had become the owner of the property. Furthermore, the Court stated that if Rutelco feared dissipation of the property, a protective order under Rule 41, Section 9, not an execution pending appeal, would be applicable. The purpose of immediate execution is not to protect or preserve the subject matter of litigation, and the question of whether an appeal is frivolous is for the appellate court, not the trial court, to determine.
Main Doctrine
A trial court loses jurisdiction over a case upon the perfection of an appeal. A motion for execution pending appeal must be filed within the reglementary period for appeal, or at least before the appeal is perfected, to be validly considered by the trial court.