Execution pending appeal; Rule 39, Rules of Court

"x x x.

The execution of a judgment pending appeal is an exception to the general rule that only a final judgment may be executed; hence, under Section 2, Rule 39 of the Rules of Court (Rules), the existence of "good reasons" for the immediate execution of a judgment is an indispensable requirement as this is what confers discretionary power on a court to issue a writ of execution pending appeal.24 Good reasons consist of compelling circumstances justifying immediate execution, lest judgment becomes illusory,25 that is, the prevailing party’s chances for recovery on execution from the judgment debtor are altogether nullified. The "good reason" yardstick imports a superior circumstance demanding urgency that will outweigh injury or damage to the adverse party26 and one such "good reason" that has been held to justify discretionary execution is the imminent danger of insolvency of the defeated party.27

The factual findings that NSSC is under a state of rehabilitation and had ceased business operations, taken together with the information that NSSC President and General Manager Orimaco had permanently left the country with his family, constitute such superior circumstances that demand urgency in the execution of the October 31, 2007 Decision because respondents now run the risk of its non-satisfaction by the time the appeal is decided with finality. Notably, as early as April 22, 2008, the rehabilitation receiver had manifested before the rehabilitation court the futility of rehabilitating NSSC because of the latter’s insincerity in the implementation of the rehabilitation process.28Clearly, respondents’ diminishing chances of recovery from the favorable Decision is a good reason to justify immediate execution; hence, it would be improper to set aside the order granting execution pending appeal.

That CGAC’s financial standing differs from that of NSSC does not negate the order of execution pending appeal.1âwphi1As the latter’s surety, CGAC is considered by law as being the same party as the debtor in relation to whatever is adjudged touching the obligation of the latter, and their liabilities are interwoven as to be inseparable.29 Verily, in a contract of suretyship, one lends his credit by joining in the principal debtor’s obligation so as to render himself directly and primarily responsible with him, and without reference to the solvency of the principal.30 Thus, execution pending appeal against NSSC means that the same course of action is warranted against its surety, CGAC. The same reason stands for CGAC’s other principal, Orimaco, who was determined to have permanently left the country with his family to evade execution of any judgment against him.

x x x."

G.R. No. 189358               October 8, 2014

CENTENNIAL GUARANTEE ASSURANCE CORPORATION, Petitioner,
vs.
UNIVERSAL MOTORS CORPORATION, RODRIGO T. JANEO, JR., GERARDO GELLE, NISSAN CAGAYAN DE ORO DISTRIBUTORS, INC., JEFFERSON U. ROLIDA, and PETER YAP, Respondents.