Philippine Nails and Wires Corporation v. Malayan Insurance Co., Inc.
REITERATIONFacts
The Antecedents: Petitioner Philippine Nails and Wires Corporation (PNWC) filed a complaint against respondent Malayan Insurance Company, Inc. (MICI) for recovery of contractual liability under a Marine Cargo Policy, seeking ₱2,698,637.00 for lost or undelivered steel billets. MICI filed a motion to dismiss on grounds of failure to state a cause of action and improper venue. PNWC filed an opposition, and MICI rejoined. PNWC filed an amended complaint, which the trial court granted. The trial court denied MICI's motion to dismiss. MICI filed a motion for extension to file an answer, which was granted, giving MICI ten days from receipt of the order to file its answer. PNWC sought to have MICI declared in default, which the trial court granted. PNWC presented evidence ex parte. MICI filed its answer, but the trial court expunged it from the records. The trial court rendered judgment for PNWC. MICI filed a notice of appeal. PNWC moved for execution pending appeal, which MICI opposed. The trial court issued an order allowing execution pending appeal and a writ of execution. MICI filed a surety bond, and the sheriff served a notice of garnishment on MICI's bank. MICI filed a petition for certiorari with the Court of Appeals (CA) to annul the order allowing execution pending appeal. Procedural History: The CA granted MICI's petition, vacating the trial court's order, cancelling the surety bond, and voiding the notice of garnishment. The CA ruled that the trial court gravely abused its discretion in allowing execution pending appeal, finding that PNWC failed to satisfy the stringent requirements of the law. The CA also held that the trial judge improvidently issued the default order, as MICI's receipt of the order giving it ten days to answer allowed it to file its answer beyond the deadline set by the judge. The CA denied reconsideration. The Petition: PNWC filed a Petition for Review on Certiorari with the Supreme Court, challenging the CA's decision and resolution.
Issue(s)
Whether the Court of Appeals erred in annulling the trial court’s Special Order dated February 4, 1994, allowing execution pending appeal. Whether the Court of Appeals erred in ruling that the trial court improvidently declared the respondent in default, considering prior rulings and the issues raised in the petition. Whether the Court of Appeals erred in not dismissing the Petition for Certiorari for failure to attach an affidavit of non-forum shopping and a statement of material dates.
Ruling
The Supreme Court partly granted the petition. It affirmed the CA's decision annulling the trial court's order allowing execution pending appeal. However, it reversed the CA's ruling on the improvident declaration of default, holding that this issue was not properly raised before the CA in the certiorari petition and had already been resolved in a prior appeal. The Court also found no error in the CA's not dismissing the petition for failure to attach an affidavit of non-forum shopping and statement of material dates.
Ratio Decidendi
On the propriety of the February 4, 1994 RTC Order allowing an execution pending appeal: The Supreme Court agreed with the Court of Appeals that the trial court gravely abused its discretion in allowing execution pending appeal. The Court reiterated the established jurisprudence that a trial court cannot pass upon the question of whether an appeal is frivolous or dilatory, as this prerogative belongs solely to the appellate tribunal. Allowing execution pending appeal on the ground of a dilatory appeal is within the competence of the appellate court, not the trial court. Furthermore, the mere posting of a bond by the prevailing party is not, by itself, a sufficient reason to grant execution pending appeal; a combination of circumstances, including exceptional urgency, must be shown. The Court emphasized that appeal is not a speedy and adequate remedy against an improvident execution pending appeal, thus certiorari was the proper remedy. On the validity of the Order declaring respondent in default: The Supreme Court reversed the Court of Appeals' finding that the trial court improvidently declared MICI in default. The Court held that the issue of the correctness of the default order was not raised by MICI in its Petition for Certiorari before the CA (CA-G.R. SP No. 33387), which only challenged the order allowing execution pending appeal. Moreover, the issue of default had already been squarely resolved by the Seventh Division of the CA in CA-G.R. CV No. 45547, where it was held that the trial court properly declared MICI in default due to its failure to file its answer within the prescribed period. The Court stressed the rule that issues not raised before the lower court cannot be raised for the first time on appeal, and that a prior ruling by another division of the CA on the same issue, which had become final, should be respected. On the effect of respondent’s failure to attach a certificate of non-forum shopping and a statement showing the material dates: The Supreme Court found no error in the CA's not dismissing the petition for these procedural lapses. The Court noted that PNWC never raised these issues before the CA in its comment or motion for reconsideration, only doing so after receiving an adverse decision. Therefore, PNWC was deemed to have waived these objections. The Court also found that the petition was filed within the prescribed period, and that MICI was not guilty of forum-shopping as the causes of action and reliefs sought in its appeal and its petition for certiorari were different, despite the identity of parties.
Main Doctrine
A trial court has no authority to pass upon the issue of whether an appeal is dilatory or frivolous; this prerogative belongs to the appellate tribunal. Procedural lapses, to which no timely objections have been raised, may be deemed waived. The mere filing of a bond is not a sufficient reason for ordering an execution pending appeal.