12 MANACOP v.

EQUITABLE PCI BANK

G.R. Nos. 162814-17, August 25, 2005

FACTS:
Lavine Loungewear Manufacturing (Lavine) insured its building & supplies
against fire w/ PhilFire, Rizal Suret, TICO, First Lepanto, Equitable
Insurance & Reliance Insurance. Except for the policy issued by First
Lepanto, all the policies provide that: “Loss, if any, under this policy is
payable to Equitable Banking Corporation-Greenhills Branch, as their
interest may appear subject to the terms, conditions, clauses and
warranties under this policy.”

A fire gutted Lavine’s buildings & their contents, thus claims were made
against the policies. The insurance proceeds payable to Lavine amounted to
about P112M. The insurance companies expressed their willingness to pay
the insurance proceeds, but only to the rightful claimant. (Lavine was
indebted to Equitable Bank, and there was a dispute as to whether the
insurance proceeds should be paid directly to Equitable Bank, or to Lavine
first who would then pay Equitable Bank.)

The RTC ruled in favor of petitioners & ordered the insurance companies to
pay Lavine, as well as Equitable Bank to refund Lavine. First Lepanto,
PhilFire, Rizal Surety, and Equitable Bank filed a Notice of Appeal.
Meanwhile, petitioners filed a Motion for Execution Pending Appeal. Judge
Lavina granted the Motion for Execution Pending Appeal & issued a Writ of
Execution.

Without filing an MR from the decision of the RTC, and even before the RTC
could rule on the Motion for Execution Pending Appeal, Equitable Bank filed
a Petition for Certiorari. Its Petition for Certiorari assailed the RTC decision
(and NOT the order granting the Motion for Execution Pending Appeal & the
Writ of Execution).

On the other hand, First Lepanto & Philfire filed a Petition for Certiorari
assailing the RTC’s order granting the Motion for Execution Pending Appeal
& the Writ of Execution.

ISSUE:
(a) W/N the Petition for Certiorari assailing the RTC judgment was proper.
(b) W/N the Petition for Certiorari assailing the order granting the Motion
for Execution Pending Appeal & the Writ of Execution was proper.
RULING:
(a) NO. Simultaneous filing of a petition for certiorari under Rule 65 and an
ordinary appeal under Rule 41 cannot be allowed since 1 remedy would
necessarily cancel out the other. The existence & availability of the right of
appeal proscribes resort to certiorari because one of the requirements for
availment of the latter is precisely that there should be no appeal. It is
elementary that for certiorari to prosper, it is not enough that the trial court
committed GADLJEC; the requirement that there is no appeal, nor any
plain, speedy & adequate remedy in the ordinary course of law must
likewise be satisfied.

It is well-settled that the remedy to obtain reversal or modification of the

judgment on the merits is appeal. This is true even if the error, or 1 of the
errors, ascribed to the trial court rendering the judgment is its lack of
jurisdiction over the subject matter, or the exercise of power in excess
thereof, or grave abuse of discretion in the findings of fact or of law set out
in the decision. T hus, while it may be true that a final order or judgment
was rendered under circumstances that would otherwise justify resort to a
special civil action under Rule 65, the latter would nonetheless be
unavailing if there is an appeal or any other plain, speedy & adequate
remedy in the ordinary course of law.

(b) YES. An appeal from a judgment does NOT bar a certiorari petition
against the order granting execution pending appeal & the issuance of the
writ of execution. Certiorari lies against an order granting execution
pending appeal where the same is not founded upon good reasons. 1 The
fact that the losing party had also appealed from the judgment does NOT
bar the certiorari proceedings, as the appeal could not be an adequate
remedy from such premature execution. Additionally, there is no forum-
shopping where in 1 petition a party questions the order granting the
motion for execution pending appeal & at the same time questions the
decision on the merits in a regular appeal before the appellate court. After
all, the merits of the main case are not to be determined in a petition
questioning execution pending appeal & vice versa.

Since the execution of a judgment pending appeal is an exception to the

general rule, the existence of good reasons is essential. In the case at bar,
petitioners insist that execution pending appeal is justified because the
insurance companies admitted their liabilities under the insurance contracts
and thus have no reason to withhold payment. We are not persuaded. The
1
Discretionary execution of appealed judgments may be allowed under Sec. 2(a) of Rule 39 upon concurrence of the ff requisites: (a) there must be a
motion by the prevailing party w/ notice to the adverse party; (b) there must be a good reason for execution pending appeal; and (c) the good reason
must be stated in a special order.
fact that the insurance companies admit their liabilities is not a compelling
or superior circumstance that would warrant execution pending appeal. On
the contrary, admission of their liabilities & willingness to deliver the
proceeds to the proper party militate against execution pending appeal
since there is little or no danger that the judgment will become illusory.

There is likewise no merit in petitioners’ contention that the appeals are

merely dilatory because, while the insurance companies admitted their
liabilities, the matter of how much is owing from each of them & who is
entitled to the same remain unsettled. Besides, that the appeal is merely
dilatory is not a good reason for granting execution pending appeal.

Lastly, petitioners assert that Lavine’s financial distress is sufficient reason

to order execution pending appeal. Citing Borja v. CA, they claim that
execution pending appeal may be granted if the prevailing party is already
of advanced age & in danger of extinction.

Borja is not applicable to the case at bar because its factual milieu is
different. In Borja, the prevailing party was a natural person who, at 76
years of age, “may no longer enjoy the fruit of the judgment before he
finally passes away.” Lavine, on the other hand, is a juridical entity whose
existence cannot be likened to a natural person. Its precarious financial
condition is not by itself a compelling circumstance warranting immediate
execution & does not outweigh the long standing general policy of enforcing
only final and executory judgments

Manacop vs. Equitable PCIBank

GR No. 162814-17 Aug. 2005
Nature: Petition for Review on Certiorari of a decision of Court of Appeals
FACTS:
Lavine Loungewear Manufacturing Inc. insured its buildings and supplies against fire with
several insurance companies. All policies provides that loss, if any, under the policy is
payable to Equitable Banking Corp., Greenhills Branch subject to terms, conditions,
clauses and warranties. On August 1, 1998 a fire gutted Lavine’s buildings and their
contents thus claims were made against the policies amounting to P112, 245, 324.34.
Lavine is represented by Chandru Pessumal in negotiating with the insurance companies.
Notwithstanding Chandru’s request that payments be made first to Lavine who shall
thereafter pay Equitable Bank, certain insurance companies released the proceeds
directly to Equitable Bank. Thus, Chandru filed a Petition for Issuance of Writ of
Preliminary Injunction with Prayer for Temporary Restraining Order (TRO) before RTC
Pasig City against PhilFire, Rizal Surety, Tabacalera Insurance, First Lepanto and Equitable
Bank.
The board of directors of Lavine moved to intervene claiming that they were the
incumbent directors. The trial court granted the Motion for Intervention and rendered its
judgment in favor of the plaintiff through intervenors.
The intervenors filed a Motion for Execution pending appeal on the grounds that : (a)
Tabacalera Insurance was on the brink of insolvency (b) Lavine was in imminent danger
of extinction (c) any appeal from the trial court’s judgment would be merely dilatory. The
trial judge granted the execution pending appeal. Meanwhile Equitable Bank and Lavine
filed a Petition for Certiorari with TRO and Writ of Preliminary Injunction before the Court
of Appeals. The Court of Appeals rendered judgment lifting the order of levy and
garnishment of the properties and deposits of the insurance companies and denied
Equitable Bank’s Motion to Disqualify Judge Lavina. Hence this case.
ISSUE: Is an execution pending appeal be granted if the prevailing party is a corporation?
RULING: No, an execution pending appeal cannot be granted where the winning party is
a corporation. A juridical entity’s existence cannot be likened to a natural person. Its
precarious financial condition is not by itself a compelling circumstance warranting
immediate execution and also does not outweigh the long standing general policy of
enforcing only final and executory judgment.