168 SUPREME COURT REPORTS ANNOTATED

Padilla vs. Court of Appeals

No. L-31569. September 28, 1973.

INES LORBES PADILLA, VERONICA PADILLA,

ABUNDIO PADILLA, SALVADOR PADILLA, ELENA
PADILLA, HONORIO PADILLA, CARMEN PADILLA, FE
PADILLA, PIEDAD PADILLA,

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VOL. 53, SEPTEMBER 28, 1973 169

Padilla vs. Court of Appeals

petitioners, vs. THE HONORABLE COURT OF APPEALS,

HERMINIO MARIANO, as presiding Judge of Court of
First Instance of Rizal, Branch X, FLORENCIO NADERA,
respondents.

Appeals; Execution pending appeal: Where court did not abuse

discretion in granting winning party’s motion for execution
pending appeal.—On the question of the petitioner’s (defeated
party’s) insolvency, the Court of Appeals found in its decision that
“petitioners have not in the least met respondents (winning party)
even tangently therein except on the alleged rule that an
averment of insolvency is not a good reason for execution pending
appeal.” Furthermore, said the court: “Petitioners never denied
the imputation of their insolvency. The decision recites facts and
cites documentary evidence which show that petitioners lost the
property in question through a foreclosure sale.” This finding,
coupled with the fact that the petitioners allowed the mortgage of
their property to be foreclosed for non-payment of their
indebtedness, cannot but be demonstrative of the petitioners’
incapacity to meet the monetary portion of the judgment against
them, consisting of P350 in monthly rentals from September 19,
1963, P10,000 by way of moral damages and P3,000 as attorney’s
fees.
 Same; Same; Same.—On the question of equity, it need only
be stated that respondent Nadera acquired the property by virtue
of a deed of sale executed on October 8, 1961 in his favor by the
spouses Vicente Padilla and Ines Lorbes Padilla and their
daughter Fe Padilla after the property had been foreclosed and
purchased at public auction by the Government Service Insurance
System, and in fact after the Padillas had lost the right of
redemption; that by arrangement with the GSIS as proposed by
Vicente Padilla himself, the vendee Florencio Nadera, paid the
necessary amounts to redeem the property and reimbursed
Vicente Padilla for other amounts due him; that thereafter the
GSIS reconveyed the property to the Padilla spouses since they
were the mortgage debtors and former owners of record, but that
on the day following (September 20, 1963) Vicente Padilla
executed a deed of confirmation of sale in favor of herein
respondent, referring expressly to the original agreement of
purchase and sale entered into by them on October 8,1961.
Same; Same; Issuance of execution pending appeal a matter
that lies within the court’s discretion.—Since the issuance of
execution pending appeal is a matter which is properly within the
discretion of the court having jurisdiction, and such discretion
may be interfered

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170 SUPREME COURT REPORTS ANNOTATED

Padilla vs. Court of Appeals

with only in case of grave abuse, the facts and circumstances

which moved the court to act as it did and its own assessment of
the equities of the case are entitled to considerable weight when
grave abuse of discretion is alleged, particularly when the
conclusions of said court are based on evidence that is not
controverted.

PETITION for review of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

     Florentino B. del Rosario for petitioners.
Antonio R. Atienza for respondents.

MAKALINTAL, Actg. C.J.:

The only issue in this case is whether or not the court a

quo, Branch X of the Court of First Instance of Rizal,
committed a grave abuse of discretion in ordering
immediate execution of its judgment in Civil Case No. 8128
and Case No. 6649, LRC (GLRO) Record No. 975, and
whether or not respondent Court of Appeals erred in ruling
that no such abuse had been committed and dismissing the
petition for certiorari as a consequence.
The statement of facts in the instant petition before Us,
which is reiterated verbatim in the brief, is too scanty to
provide a proper understanding of this case. We therefore
resort to the counter-statement in the brief for the
respondents, which is not only uncontroverted by the
petitioners but may be assumed as correct for the proper
resolution of the issue involved because the facts therein
recited are based on documents presented as evidence at
the trial and because they are in substance the same as the
facts found by the court a quo in its decision.
The respondents’ counter-statement is as follows:

“(a) The property in question was formerly owned by

Vicente Padilla who mortgaged it to the
Government Service Insurance System (hereinafter
referred to as G.S.I.S.) to secure the payment of a
loan of P25,000.00;

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Padilla vs. Court of Appeals

(b) For failure of said mortgagor Vicente Padilla to pay

the balance of the loan, the property in question
was foreclosed and sold at public auction at which
the G.S.I.S. was the highest bidder; a certificate of
sale was issued to the said entity and Vicente
Padilla had one (1) year from the date of sale on
October 7, 1960 to October 7, 1961 within which to
redeem the foreclosed property.
(c) After the expiration of said period of redemption,
Vicente Padilla, his wife Ines Lorbes Padilla and
daughter Fe Padilla, misrepresenting to the herein
respondent Florencio R. Nadera that Vicente
Padilla still had the right to redeem the property,
executed on October 8, 1961 an Agreement of
Purchase and Sale conveying to Nadera the said
property in consideration of P35,000.00 of which
P10,000.00 was paid on the same date by Nadera
to, and received from him by, said Vicente Padilla,
Ines Lorbes Padilla and Fe Padilla, and the balance
 of the purchase price, representing the
indebtedness of Vicente Padilla to the G.S.I.S., was
assumed by Nadera to be paid by him to the said
entity. The G.S.I.S. was not a party to the said
Agreement of Purchase and Sale and had not
accepted Nadera as debtor in substitution for
Vicente Padilla.
(d) On November 27, 1961, Nadera discovered from the
G.S.I.S. that Vicente Padilla had lost the right to
redeem the foreclosed property.
(e) On December 12, 1961, G.S.I.S. wrote to Vicente.
Padilla advising him that the period for redemption
of the foreclosed property had expired on October 7,
1961 and that it contemplated to sell the same thru
sealed public bidding at which Vicente Padilla may
participate.
(f) On June 28, 1962 the G.S.I.S. consolidated its
ownership of the property in question and T.C.T.
No. 100638 was issued in its name by the Register
of Deeds for Rizal.
(g) Vicente Padilla being a pensioner of the G.S.I.S.,
the latter had applied the former’s pension which
amounted to P10,194.24 to the credit of said Padilla
on account of the loan afore-mentioned.
Capitalizing on this fact, Nadera re-imbursed
Vicente Padilla with the said amount of P10,194.24
and furthermore, he, Nadera paid the G.S.I.S. the
sum of P7,815.17 on July 31, 1963 (per O.R. No.
D8606865) and another sum of P8,049.99 on
September 16, 1963 (per O.R. No. D-9124651). With
the payments by Nadera both to Vicente Padilla
and the G.S.I.S., in the total amount of P36,056.41
Nadera. therefore, even over-paid the consideration
of P35,000.00 mentioned

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172 SUPREME COURT REPORTS ANNOTATED

Padilla vs. Court of Appeals

in the Agreement of Purchase and Sale executed by

Vicente Padilla, Ines Lorbes Padilla and Fe Padilla on
October 8,1961 (vide, supra)
(h) Instead of executing a deed of sale of the property in
question in favor of Nadera, the G.S.I.S., for and in
consideration of ‘(P8,044.49), Philippine currency, receipt
 of which in full is hereby acknowledged under O.R. No. D-
9124651 dated September 16, 1963’, executed on
September 19. 1963, a deed of sale of the property in
question in favor of the spouses Vicente Padilla and Ines
Lorbes Padilla. Both spouses were signatories to the said
deed of sale. In this regard, it will be noticed that the
consideration stated in said deed is the same amount paid
by Nadera, as aforesaid, to the G.S.I.S. under O.R. No. D-
9124651.
(i) On the following day, or on September 20, 1963 Vicente
Padilla executed the deed of Confirmation of Sale which
the herein petitioners question. For clarity, the substance
of said deed, which was acknowledged before a notary
public, is quoted as follows:

‘WHEREAS, the VENDORS had entered into an Agreement of Purchase

and Sale on October 8, 1961, with the herein VENDEE which was
acknowledged before a Manila Notary Public Felipe G. Lubaton on
December 15, 1961, registered in his Notarial Registry as Doc. No. 138;
Page No. 100; Book No. I; Series of 1961;
‘WHEREAS, the Title of the property subject matter of this Agreement
was consolidated by the Government Service Insurance System on June
28,1962; and
‘WHEREAS, the herein VENDEE has fully paid the account of the
VENDOR to the G.S.I.S., the Government Service Insurance System has
re-conveyed the ownership over the said property unto the VENDORS by
virtue of the Deed of Absolute Sale executed on the 19th day of
September, 1963, and acknowledged on the same date by Modesto B.
Atmosphera, registered in his Notary Registry as Doc. No. 74; Page No.
16; Book No. I; Series of 1963;
‘NOW, THEREFORE, for and in consideration of the AGREEMENT
OF PURCHASE AND SALE, which we undersigned VENDORS still
confirm and acknowledge, we hereby CEDE, CONVEY, SELL and
TRANSFER, in favor of the herein VENDEE, his heirs, administrator
and assign, the above-mentioned property fully described in the two (2)

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Padilla vs. Court of Appeals

documents specified above.

‘IN WITNESS WHEREOF, we set our hands this 20th day of
September, 1963, in the City of Manila, Philippines.

‘(
Sgd.) Vicente Padilla
VICENTE PADILLA’
The said deed was not, however, signed by Ines Lorbes
Padilla, although the same was witnessed by FE PADILLA,
daughter of the vendors.

(j) By virtue of the registration of (1) the Deed of

Absolute Sale executed by the G.S.I.S. in favor of
the spouses Vicente Padilla and Ines Lorbes
Padilla; (2) the agreement of Purchase and Sale
which Vicente Padilla, Ines Lorbes Padilla and Fe
Padilla had executed earlier in favor of Nadera; and
(3) the Confirmation of Sale executed by Vicente
Padilla, T.C.T. No. 100638 in the name of the
G.S.I.S. was cancelled and, in lieu thereof, T.C.T.
No. 116473 was issued by the Register of Deeds in
the names of Vicente Padilla and Ines Lorbes
Padilla. In turn, the said T.C.T. No. 116473 was
cancelled and, in lieu thereof, T.C.T. No. 116474
was issued by the Register of Deeds for Rizal in the
name of Florencio R. Nadera.
(k) On October 4, 1963, petitioner Abundio Padilla
claiming to be the attorney-in-fact of his parents
Vicente Padilla and Ines Lorbes Padilla, filed with
the Register of Deeds for Rizal a ‘Notice of Adverse
Claim’ which was annotated on T.C.T. No. 116474
of Nadera.
(1) On February 28, 1964, Nadera filed a petition in
Case No. 6649 of the Court of First Instance of
Rizal for removal of the notation of adverse claim
on his certificate of title and, pending the hearing of
said petition, the herein petitioners, as plaintiff,
filed in Civil Case No. 8128 of the same court, an
amended complaint dated April 25, 1964 in which it
was alleged as follows:

‘5. On September 20, 1963, through the use of

insidious words and machinations; by means of
undue and improper influence exerted on the late
Vicente Padilla, who was at that time bed-ridden,
seriously ill and confined in the hospital, defendant
(Nadera) fraudulently and wilfully compelled the
latter to sign in his favor a deed of confirmation of
sale over the aforestated parcel of land covered by
T.C.T. No. 116473. A copy of said deed of
confirmation of sale is hereto attached as Annex
‘B‘and made part hereof.

174
174 SUPREME COURT REPORTS ANNOTATED
Padilla vs. Court of Appeals

‘6. The said deed of confirmation of sale was likewise

executed without the knowledge and consent of
plaintiff Ines Lorbes Padilla.’”

The two cases—Civil Case No. 8128 for cancellation of the

certificate of title issued in favor of respondent Nadera, and
Case No. 6649, LRC (GLRO) Record No. 975, filed by
Nadera for a writ of possession and for cancellation of
petitioners’ adverse claim annotated on his certificate of
title—were heard jointly and decided by the court a quo on
February 27, 1969, in which decision the herein petitioners
were ordered to turn over the possession of the property to
respondent Nadera, to pay him the sum of P350 monthly by
way of rentals from September 19, 1963 until such
possession was transferred to him, P10,000 by way of moral
damages and P3,000 as attorney’s fees. On April 15, 1969
respondent Nadera filed with the trial court a motion for
correction of a typographical error in the decision and for
immediate issuance of a writ of execution, alleging that the
petitioners were insolvent and that any appeal to be taken
from the decision would be frivolous and dilatory. On April
19,1969 the court ordered execution on a bond of P10,000 to
be filed by the respondent. On April 26 the petitioners filed
their record on appeal. On May 2 the trial court set aside
its order of April 19, which it had issued without having
heard the petitioners, and set the matter anew for hearing
on May 17. On June 10, 1969, after having heard the
parties, the court again issued a writ of execution,
respondent Nadera having filed the required bond in the
meantime.
Two grounds are relied upon by the petitioners in
support of their contention that the court a quo committed
a grave abuse of discretion, namely, (a) that a mere
allegation that the losing party is insolvent and that the
appeal is frivolous and interposed merely for purposes of
delay is not sufficient; and (b) that equitable considerations
are in favor of the maintenance of the petitioners in
possession of the property in question because the validity
of the document which they had assailed in the trial court
and which the latter had upheld was the subject of their
appeal and therefore execution of the judgment while the
issue was still open was premature.
On the question of the petitioners’ insolvency, the Court
of
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Padilla vs. Court of Appeals

Appeals found in its decision that “petitioners have not in

the least met respondents even tangently therein except on
the alleged rule that an averment of insolvency is not a
good reason for execution pending appeal.” Furthermore,
said the court: “Petitioners never denied the imputation of
their insolvency. The decision recites facts and cites
documentary evidence which show that petitioners lost the
property in question through a foreclosure sale.” This
finding, coupled with the fact that the petitioners allowed
the mortgage of their property to be foreclosed for non-
payment of their indebtedness, cannot but be
demonstrative of the petitioners’ incapacity to meet the
monetary portion of the judgment against them, consisting
of P350 in monthly rentals from September 19, 1963,
P10,000 by way of moral damages and P3,000 as attorney’s
fees.
On the question of equity, it need only be stated that
respondent Nadera acquired the property by virtue of a
deed of sale executed on October 8, 1961 in his favor by the
spouses Vicente Padilla and Ines Lorbes Padilla and their
daughther Fe Padilla after the property had been
foreclosed and purchased at public auction by the
Government Service Insurance System, and in fact after
the Padillas had lost the right of redemption; that by
arrangement with the GSIS as proposed by Vicente Padilla
himself, the vendee, Florencio Nadera, paid the necessary
amounts to redeem the property and reimbursed Vicente
Padilla for other amounts due him; that thereafter the
GSIS reconveyed the property to the Padilla spouses since
they were the mortgage debtors and former owners of
record, but that on the day following (September 20, 1963)
Vicente Padilla executed a deed of confirmation of sale in
favor of herein respondent, referring expressly to the
original agreement of purchase and sale entered into by
them on October 8,1961.
The petition now before Us, to be sure, does not involve
a review of the facts. Such facts are now the subject of the
appeal interposed by herein petitioners from the decision of
the court a quo on the merits. However, since the issuance
of execution pending appeal is a matter which is properly
within the discretion of the court having jurisdiction, and
such discretion may be interfered with only in case of grave
abuse, the facts and circumstances which moved the court
to act as it
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Padilla vs. Court of Appeals

did and its own assessment of the equities of the case are
entitled to considerable weight when grave abuse of
discretion is alleged, particularly when the conclusions of
said court are based on evidence that is not controverted. It
is therefore pertinent to reproduce herein what the trial
court said:

“To prove that the right of Vicente Padilla to redeem the property
in question has expired, the defendant presented in evidence
Exhibit T which is a letter of the GSIS to Vicente Padilla
informing him of the expiration of said redemption period and
suggested that he participate in a public bidding of the said
property; that notwithstanding the application of the accrued
pension of Vicente Padilla to his obligation with the GSIS, the
amount due the GSIS was not still paid and so title was
consolidated in the name of the GSIS for which TCT No. 100638 of
the Registry of Deeds for Rizal was issued. However, arrangement
was made with the GSIS that Vicente Padilla be allowed to pay
the remaining balance for which Vicente Padilla wrote the GSIS
to accept from Nadera the amount of P5,675.00 plus the
additional amount of P1.000.00 to make a total of P7,000.00 for
which a joint affidavit was executed on September 12, 1962 by
Vicente Padilla, his wife Ines Lorbes Padilla and Fe Padilla
evidencing the fact that the obligation of Vicente Padilla had been
assumed by Florencio Nadera as per their Agreement of Purchase
and Sale executed on October 8, 1961. Said joint affidavit was
marked in evidence as Exhibit ‘9'; that by virtue of said payment
of P7,087.83. the GSIS issued a statement of account (Exh. ‘10’)
showing that the balance of Vicente Padilla’s obligation is
P19,164.75 as of August 31. 1962; that by virtue of the agreement
between Vicente Padilla and Florencio Nadera, the former wrote a
letter to the Manager, Real Estate Department, GSIS, requesting
the GSIS to accept payments from Florencio Nadera to liquidate
his (Padilla’s) outstanding obligation and to entrust to Nadera the
papers regarding the release of said mortgage to Nadera (Exh. ‘2’);
that Nadera had actually paid the GSIS the P7,815.17 (Exh. ‘11’)
plus the full balance of P8,049.99 as evidenced by Official Receipt
No. 9124651 issued by the GSIS on September 16, 1963 (Exh.
‘12’), and to support the fact that all these payments were made
by Nadera, the latter presented in evidence Exhibit ‘12-A’ and
Exhibit ‘12-B’, the corresponding checks covering said payments;
that after adding all the amounts Nadera had paid to Padilla and
to the GSIS. he had paid a total of more than P36,000.00 after
which the GSIS reconveyed the property to Vicente Padilla. Since
the GSIS could not make a direct turnover of the property to
Nadera, it became incumbent upon Padilla to turn over the
property to Nadera.

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Padilla vs. Court of Appeals

From the evidence submitted as above recited, it was clearly

established that as early as October 8,1961, the plaintiff Ines
Lorbes Padilla together with her husband Vicente Padilla,
executed an Agreement of Purchase and Sale over the parcel of
land in question in favor of defendant Florencio R. Nadera, the
latter paying them the amount of P10,000.00 and at the same
time assuming the plaintiffs’ obligation with the GSIS arising
from a previous mortgage on the property in favor of the GSIS.
Said Agreement of Purchase and Sale was done in writing and
signed by plaintiff Ines Lorbes Padilla and her husband, Vicente
Padilla, said agreement being marked in evidence as Exhibit ‘4’.
While at the time the parties entered into said Agreement of
Purchase and Sale, the right of Vicente Padilla of redeeming the
property in question had expired, yet it was even defendant
Florencio R. Nadera who helped Vicente Padilla to make
representations with the GSIS to give them another chance to
redeem said property which resulted in the agreement between
the GSIS and Vicente Padilla of applying his pension with said
entity to the balance of his mortgage obligation with the GSIS.
The deceased Padilla, in the course of the negotiations with GSIS,
even wrote said entity to accept from Nadera certain amounts of
money for the payment of Padilla’s obligation in pursuance of
their Agreement of Purchase and Sale dated October 8, 1961 as
already mentioned above and by virtue of the receipt by the GSIS
of certain amounts from Nadera, Vicente Padilla and his wife,
Ines Lorbes Padilla, and Fe Padilla executed a Joint Affidavit
dated September 12, 1962 (Exh. ‘9’). In said Joint Affidavit, the
spouses Vicente Padilla and Ines Lorbes Padilla acknowledged
the fact that Florencio Nadera had assumed Vicente Padilla’s
obligation with the GSIS in pursuant of an Agreement of
Purchase and Sale in his favor dated October 1,1961 which goes to
show that said spouses even as late as September 12, 1962 had
acknowledged that they had sold the property to defendant
Florencio R. Nadera, and to further bolster the defense of Nadera
that his purchase of said property was valid, the defendant
presented in evidence even the checks by which he paid the
obligation with the GSIS (Exhibits ‘12’ and ‘12-A’ and ‘12-B’).

The plaintiffs centered their complaint on the fact that the

Confirmation of Sale executed by Vicente Padilla on
September 20, 1963 or shortly before his death, did not
contain the signature of his wife, plaintiff Ines Lorbes
Padilla, and on the further ground that when Vicente
Padilla signed said Confirmation of Sale, he was already in
the hospital and was suffering from some sort of mental
ailment. The Court will first deal on the first ground, that
is, that the Confirmation of Sale did not contain the
signature of Ines Lorbes Padilla. To the mind of the Court.
Vicente Padilla did not even need
178

178 SUPREME COURT REPORTS ANNOTATED

Padilla vs. Court of Appeals

to have executed the Confirmation of Sale since there was

already an Agreement of Purchase and Sale executed by
him and his wife, Ines Lorbes Padilla. She could even be
compelled to sign her conformity thereat if the necessity for
it arose. But the Register of Deeds perhaps relied on the
first Agreement of Purchase and Sale signed by Vicente
Padilla and his wife which. was merely confirmed by
Padilla on September 20, 1963 in issuing the corresponding
title in favor of the defendant. The second ground of the
plaintiffs in attacking the Confirmation of Sale by Vicente
Padilla as being null and void, was not likewise proven by
the plaintiffs. In an effort to prove that Vicente Padilla,
during his last days, was of unsound mind, the plaintiffs
presented Dr. Manuel Obias who was one of the doctors
who treated Vicente Padilla and said Doctor in his
testimony declared that after Vicente Padilla was operated
on, the patient showed marked change in his mental
condition showing signs of incoherence in speech and at
times, shouting at the Doctor, On question of the Court,
however, said witness admitted that a patient shouting at
his Doctor may not always be an indication of mental
ailment. Vicente Padilla died on November 19, 1963, two
months after he executed the Confirmation of Sale now
being attacked by the plaintiffs. Without the allegation of
mental illness having been established, it is safe to assume
that Vicente Padilla executed said Confirmation of Sale
because, in conscience, he knew he had no more right over
said property having previously sold the same to the
defendant Nadera.”
The main ground upon which the herein petitioners rest
their claim in their complaint below is that when Vicente
Padilla executed a deed of confirmation of sale in favor of
respondent Nadera on September 20, 1963, he was no
longer of sound mind, having undergone surgery, as in fact
he passed away two months thereafter, and that his wife
did not sign the said document. Without anticipating
whatever decision may be rendered on this point in the
appeal taken by the petitioners, and merely for purposes of
resolving the particular issue involved in the instant
petition, We may observe that the right of respondent
Nadera to the property arose not by virtue of the said deed
of confirmation but by virtue of the orginal agreement of
sale executed in his favor by the Padilla spouses and by
their daughter Fe Padilla. The validity of this agreement is
not questioned. If the resale by the Government Service
Insurance System upon payment of the price of redemption
by Nadera was made in favor of the Padilla
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Padilla vs. Court of Appeals

spouses, it was purely a matter of form since they were the

mortgage debtors, and the least that can be said under the
circumstances is that they should be considered as trustees
under an implied or resulting trust for the benefit of the
real owner, namely, respondent Nadera. Article 1448 of the
Civil Code says that “there is an implied trust when
property is sold, and the legal estate is granted to one party
but the price is paid by another for the purpose of having
the beneficial interest of the property ...” The concept of
implied trusts is that from the facts and circumstances of a
given case the existence of a trust relationship is inferred
in order to effect the presumed (in this case it is even
expressed) intention of the parties or to satisfy the
demands of justice or to protect against fraud.
Reference should be made to the qualification provided
for in the decision of the Court of Appeals as to the extent
of the execution, that is, with respect only to the possession
of the land, but not to the award of damages. Said the
Court: “For the sake of equity, and adopting the criterion of
Rule 70, Section 8, the monetary portion should not be
executed upon petitioners’ putting up the supersedeas bond
of P10,000 offered by petitioners in the court below within
10 days after this decision becomes final; in the meantime,
execution of the monetary portion be suspended until after
the expiration of said period without petitioners’ offering
the proper bond.”
In view of the foregoing considerations, the petition is
dismissed and the decision of respondent Court of Appeals
is affirmed, with costs.

          Zaldivar, Fernando, Makasiar, Antonio and

Esguerra, JJ., concur.
     Castro, J., concurs in the result.
     Teehankee, J., dissents in a separate opinion.
     Barredo, J., concurs and reserves the right to file a
separate opinion.

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Padilla vs. Court of Appeals

SEPARA TE OPINION

TEEHANKEE, J., Dissenting:

The sole issue at bar is whether or not the lower court

committed a grave abuse of discretion in ordering
immediate execution pending appeal of its joint judgment
in Civil Case No. 8128 (dismissing petitioners’ action as
plaintiffs for cancellation of the title to their family
dwelling allegedly secured by private respondent Florencio
Nadera by means of undue and improper influence and
fraud when the family head, the late Vicente Padilla, was
no longer of sound mind and lay seriously ill) and in Case
No. 6649, LRC (GLRO) Record No. 975 (granting
respondents’ petition for removal of the notation of
petitioners’ adverse claim on respondent’s questioned
certificate of title and for a writ of possession to petitioners’
family dwelling) and sentencing petitioners furthermore to
pay P350.00 monthly rentals, P10,000 for moral damages
and P3,000 for attorney’s fees.
It is the general rule that execution shall issue only upon
a final judgment, i.e. no appeal is taken or the judgment
has been affirmed on appeal and has therefore become final
and executory, as provided in Rule 39, section 1.
Section 2 of the Rule provides an exception to the Rule
by granting the trial court the discretion to order execution
to issue even before the expiration of the time to appeal,
upon motion of the prevailing party with notice to the
adverse party, on the condition that if such immediate
execution be “upon good reasons to be stated in a special
order.”
It is well settled from our jurisprudence that being an
exceptional remedy, execution pending appeal should 1
be
decreed only if compelling circumstances so demand, In the
language of the appellate court itself in its decision under
review sustaining the special order of execution, “the
matter is

________________

1 Caragao vs. Maceren, 92 Phil. 121; de Borja vs. Tan, 95 Phil. 653;
Mabutas vs, Alzate, 92 Phil. 1071; Heiman vs. Cabrera, 73 Phil 707.

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Padilla vs. Court of Appeals

a remedy precisely provided by law to meet exceptional

situations and for special reasons.”2 As a necessary
consequence, the cited rule on execution pending appeal
has been interpreted and applied restrictively.3
As succinctly stated by the late Justice Roman Ozaeta in
Heiman,4 “(S)uch premature discretionary execution is an
exception to the rule The discretion granted is not absolute
but dependent upon the existence of good reasons. Hence,
this question confronts us: did the respondent judge state
good reasons for ordering the immediate execution of (the)
judgment? x x x Indeed, if the trial court may order the
execution of its judgment on the sole ground that it is not
secured by any pledge or mortgage, that would be
tantamount to converting an exception into a general rule.
Every judgment upon an unsecured claim would then be
subject to immediate execution as a matter of course
notwithstanding the general rule established by section 1
of Rule 39 that execution shall issue upon a final judgment
after the time for perfecting an appeal has expired and no
appeal has been perfected.”
The Rule’s requirement that execution pending appeal
must be supported by good reasons to be stated in a special
order must be satisfied and complied with, since the
existence of such good reasons is the element that gives
validity to the special order of execution. Absent such good
reasons, the special order of execution must be stricken
down for 5 having been issued with grave abuse of
discretion.
Did the trial court state and show any good or
compelling reason to justify the exceptional remedy of a
special order of immediate execution of its judgment
pending appeal?
The only reason stated in its special order of Execution
of April 19,1969 (set aside by it upon petitioners’ motion of
April

_______________

2 Court of Appeals’ decision, petitioners’ brief, p. 27, emphasis supplied.

3 See cases cited in fn. 1; Ledesma v Teodoro, 98 Phil. 232.
4 73 Phil. 707; emphasis supplied.
5 Alcasid vs. Samson, 102 Phil. 735; De la Rosa vs. City of Baguio, 90
Phil. 720.

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182 SUPREME COURT REPORTS ANNOTATED

Padilla vs. Court of Appeals

25, 1969 for having been granted without hearing

petitioners but reaffirmed in a subsequent order dated
June 10, 1969) was that “it appears that plaintiffs
[petitioners] are enjoying the possession of the property in
question and that should the decision in this case be
affirmed by the appellate court, the plaintiffs [petitioners]
would not be able to satisfy the said decision.”
Such reason stated by the trial court, besides being a
bare allegation that was not justified or established by
respondent and is in fact refuted by the record—for
petitioners had duly offered to put up a supersedeas bond
to stay execution as allowed under section 3 of Rule 39—
does not qualify as a good or compelling reason that would
justify a special order for immediate execution of judgment
1. The appellate court erroneously sustained the trial
court’s special order of execution by taking the respondent’s
bare and unverified allegation in his motion for special
execution “that should the decision in this case be affirmed
by the appellate court, the plaintiffs will not be able to
satisfy the decision” as establishing petitioners’ insolvency,
in this wise:

“The question of petitioners’ solvency or insolvency to meet the

contingency of affirmance of the decision on appeal was resolved
by the respondent judge after hearing the parties. Petitioners
have not in the least met respondents even tangentially therein
except on the alleged rule that an averment of insolvency is not a
good reason for execution pending appeal. Indeed, the case cited
by petitioners therefor (Asturias vs. Victoriano, 98 Phil. 581)
supports the contrary. The obiter dictum incompletely quoted by
the petitioners rejected such allegation as a ground ‘because the
allegation of insolvency—which is not under oath—is denied by
the defendant and is not supported by proof (p. 583).
“Petitioners never denied the imputation of their insolvency.
The decision recites facts and cites documentary evidence which
show that petitioners
6
lost the property in question through a
foreclosure sale.”

a) Contrary to the appellate court’s mis-impression,

________________

6 Court of Appeals’ decision, petitioners’ brief, p. 22.

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VOL. 53, SEPTEMBER 26, 1973 183

Padilla vs. Court of Appeals

respondent judge in no way resolved “the question

of petitioners’ solvency or insolvency;” he merely
repeated in his special order respondent’s bare and
unverified allegation that in case of affirmance on
appeal, “the plaintiffs [petitioners] would not be
able to satisfy the said decision;”
b) The burden of establishing such alleged insolvency
rested upon respondent-movant, and nothing is
cited from the record to show that he ever
discharged such burden;
c) Petitioners therefore were wholly justified in
protesting that no good reasons were shown as to
justify the exceptional remedy of immediate
execution and to invoke the force of Asturias vs.
Victoriano7 that the bare allegation of the
prevailing party that the losing parties were “not
solvent enough to meet the damages awarded” was
insufficient to authorize the premature execution,
particularly because the court’s special order
“specifies no reason” and “even were we to suppose
that the lower court ordered immediate execution
on the strength of the allegation contained in the
motion for execution that the defendants were ‘not
solvent enough/ the order would still be without
 sufficient basis because the allegation of insolvency
—which is not under oath—is denied by the
defendants and is not supported by proof;”and
d) The appellate court’s statement that “petitioners
never denied the imputation of their insolvency” is
contrary to the record. Not only did petitioners deny
such imputation by filing their strong opposition
assailing the sufficiency thereof but they further
offered to put up a supersedeas bond to stay
execution—which per se was the best refutation of
their alleged financial incapacity.

2. Peculiarly, though, in disposing of petitioners’ complaint

against “rejection of (their) offer to post a P10,000
supersedeas bond ... as constituting abuse of discretion,”
the appellate court failed to note that such offer of a
supersedeas bond destroyed not only its preceding
statement, supra that “petitioners never denied the
imputation of their insolvency” but also any factual

_______________

7 98 Phil. 581; emphasis supplied.

184

184 SUPREME COURT REPORTS ANNOTATED

Padilla vs. Court of Appeals

basis for the only reason given by the trial court as to

petitioners’ alleged incapacity to satisfy its judgment if
affirmed on appeal, but proceeded this time to discourse
that respondent “has the right to occupy and use that
which he owns. x x x It cannot be violated and then
compensated with a supersedeas bond”—ignoring the fact
that the question of ownership of the property is the very
crux and issue of the case now pending appeal, since
petitioners claim that respondent obtained title thereto
through undue influence and fraud—as follows:

“That rejection of petitioners’ offer to post a P10,000 supersedeas

bond is likewise condemned as constituting abuse of discretion.
“Petitioners failed to take stock of the fact that possession of
the property bought and titled in respondent Nadera’s name is
involved in the case. He has the right to occupy and use that
which he owns. Feudal despotism tended to destroy such right in
the past; the right must be enjoyed by the owner. It cannot be
violated and then compensated with a supersedeas bond.
 “Stay of execution by supersedeas bond is addressed to the
discretion of the trial court and unless abuse of such discretion is
shown—not here shown—the same will not be interfered with. x x

a) Rejection of petitioners’ offer of a supersedeas bond

in pursuance of section 3 of the cited Rule was
manifest error. Petitioners’ backing up their
capacity to satisfy the judgment by means of a
supersedeas bond deprived the special order of the
element of a good and special reason that would
give it validity—since the special order cited their
alleged financial incapacity as justification therefor.
b) Our jurisprudence consistently holds that the losing
party’s “plain, speedy and adequate remedy in the
ordinary course of law” to forestall execution of 8the
decision is the tendering of a supersedeas bond. In
Ledesma vs. Teodoro9 the

_______________

8 Court of Appeals’ decision, petitioners’ brief, p. 26.

9 Santos vs. Mojica, 26 SCRA 607; See Javellana vs. Querubin, 17
SCRA 873.

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VOL. 53, SEPTEMBER 26, 1973 185

Padilla vs. Court of Appeals

Court set aside a special order of execution noting

that “the offer made by defendant to put up a
supersedeas bond to forestall the plea for execution
was denied for no apparent reason when under the
rule this right is expressly acknowledged when
there are reasons justifying it (section 2, Rule 39).”
c) Here, again, the general rule is stated in section 3
of Rule 39, that “execution issued before the
expiration of time to appeal may be stayed upon the
approval by the court of a sufficient supersedeas
bond filed by the appellant.” The trial court retains
discretion to reject the bond and stay of execution
as an exception—and it must again state good
reasons for rejecting the offer of a supersedeas bond
under pain of its action being set aside for grave
abuse of discretion, e.g. in Nawasa vs. Catolico
where such rejection of the bond and stay of
execution was sustained as in the exercise of sound
 judgment or discretion, as the question therein of
unconstitutionality of Republic Act No. 1383 relied
upon by the judgment debtor, Nawasa, for the
taking over of the Misamis waterworks system
without just compensation was already a settled
question 10and hence, the appeal could “not possibly
prosper;”
d) In the case at bar, no such special reason for
rejecting the offer of a supersedeas bond and stay of
execution is stated or shown. The deferment of
respondent’s taking possession of the property 11
pending determination of petitioners’ appeal —
used 12by petitioners as their family dwelling for 39
years —is not a good or special reason, considering
that the bond would compensate him for the use of
the property if his title is upheld not to mention
that it is seriously open to question whether in a
mere petition for cancellation of adverse claim in
the land registration record proceeding, as filed by
respondent, the lower court had authority and
jurisdiction to issue a writ of possession against
petitioners; and
e) The trial court made no finding whatever that
petitioners’

________________

10 98 Phil. 232.
11 19 SCRA 980.
12 As of the filing of the petition on January 30, 1970.

186

186 SUPREME COURT REPORTS ANNOTATED

Padilla vs. Court of Appeals

appeal was frivolous or dilatory. As a matter of fact,

petitioners cannot be faulted and they are the ones
complaining about the trial court’s delay in the
approval of the record on appeal which they had
promptly. filed. On this point, the appellate court
made no positive finding either and merely stated
that “a trial court cannot be said to be incompetent
to determine whether an appeal is frivolous or
dilatory. x x After all, like any determination in the
decision, the same may be reviewed on appeal 13
or
inferred from the surrounding circumstances.”
3. Considerations of law and of equity warrant the setting
aside of the special order for premature execution of
judgment.
Since petitioners have always been in possession of the
disputed property as their family dwelling for 39 years at
the time of the trial court’s decision, and the validity of
respondent’s acquisition thereof on grounds of undue
influence and fraud is pending determination in the appeal
pending before the appellate court, the status quo should be
preserved, for the consequences of premature execution of
judgment and the ouster of petitioners from their family
dwelling of almost two generations can produce irreparable
and irreversible damage and prejudice which are beyond 14
compensation. As stated in City of Bacolod vs. enriquez,
“(I)t should also be noted that, in authorizing execution
before appeal, the said section 2 of Rule 39 requires that
such execution be allowed only ‘upon good reasons to be
stated in the special order.’ This requirement is important
and must not be overlooked for, as Chief Justice Moran
says, ‘if the judgment is executed and, on appeal, the same
is reversed, although there are provisions for restitution,
oftentimes damages may arise which cannot be fully
compensated. Accordingly, execution should be granted
only when these considerations are clearly outweighed by
superior circumstances demanding urgency, and the above
provision requires a statement of those circumstances as a
security for their existence.’ ”

________________

13 Court of Appeals’ decision, petitioners’ brief, p. 25.

14 101 Phil 644, 648 101 Phil. 644.648.

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VOL. 53, SEPTEMBER 26, 1973 187

Padilla vs. Court of Appeals

The facts and merits of petitioners’ appeal from the trial

court’s judgment which is now pending appeal in the
appellate court are concededly not herein involved and may
not properly be reviewed, pre-empted or pre-judged in this
special action which is concerned solely with the question of
whether any good special and compelling reason was stated
by the trial judge to justify the exceptional remedy of
premature and immediate execution granted by it.
It has already been shown hereinabove that the trial
court’s stated special reason of insolvency had no factual
basis at all—respondent’s bare imputation being unverified
and unsubstantiated, and negated by petitioners’ offer of a
supersedeas bond precisely to assure the award in
respondent’s favor if affirmed on appeal. Hence, as against
respondent’s improper discussion of the merits of the
appeal, petitioners have properly submitted that “this is
neither the time nor place for the ventilation” of the issues
and merits of their pending appeal.
Should it be deemed that such facts and merits of the
appeal are intertwined with the sole issue at bar, then the
appellate court should have consolidated this case with the
appealed case and decided the two cases jointly rather than
prejudge the merits of the appeal and allow premature
execution pending determination of the grave questions of
fact and of law raised in petitioners’ pending appeal, e.g.
the fact that the GSIS executed the deed of resale of
petitioners’ property in favor of the spouses, the deceased
Vicente Padilla and petitioner Ines Lorbes Padilla, and not
in favor of respondent who claimed to have purchased the
same from the Padillas; the fact that the late Padilla’s
mortgage indebtedness to the GSIS was not P25,000.00 but
the mere balance of less than P15,000.00, since his pension
of P10, 194.24 had been applied thereto by GSIS; the
conceded fact that petitioner Ines Lorbes Padilla did not
execute nor sign the questioned confirmation of sale
executed by the late Vicente Padilla alone on the strength
of which respondent was able contrary to law to secure the
cancellation of title to the property in his favor
notwithstanding the categorical requirement of Article 166
of the Civil Code that conjugal property cannot be alienated
without the wife’s
188

188 SUPREME COURT REPORTS ANNOTATED

Padilla vs. Court of Appeals

consent; and the fact that the late Vicente Padilla’s

soundness of mind and capacity to execute the said
confirmation as well as the use of alleged undue influence
and fraud by respondent upon him have been specifically
charged in petitioners’ complaint below, although adversely
resolved in the first instance by the trial judge. The appeal
on these critical facts is not before this Court, but off-hand
one can readily question whether the trial court’s award of
P10,000 for moral damages and P3,000 for attorney’s fees—
which may amount to penalizing petitioners’ right to seek
recourse in the courts and to resist respondent’s petition for
cancellation of their adverse claim—should stand on
appeal.
Certainly, such important issues should not herein be
preempted nor pre-judged, when the evidence and the
record are not before the Court.
ACCORDINGLY, I vote for the granting of the petition
and for the setting aside of the appealed decision of the
appellate court which sustained the trial court’s special
order for premature execution of its judgment,
notwithstanding that the merits of petitioners’ appeal are
still pending and have yet to be resolved by the same
appellate court.
Petition dismissed and decision affirmed.

Notes.—Under Section 1, Rule 39 of the Rules of Court,

execution shall issue upon a final judgment, i.e., after the
time for perfecting an appeal has expired and no appeal
has been perfected. However, as an exception to this rule,
section 2 of Rule 39 provides that even before the
expiration of the time to appeal, execution may issue in the
discretion of the court upon motion of the prevailing party
with notice to the adverse party, provided that this be
based on good reasons to be stated in a special order. Being
an exceptional remedy, execution pending appeal are
issued only if compelling circumstances so demand
(Carangay vs. Macere, 92 Phil. 121; De Borja vs. Tan, 95
Phil. 653). The grant of execution pending appeal is
consequently subject to strict interpretation. (Ibid.) Special
circumstances or reasons may, nonetheless justify issuance
of an order of execution pending appeal even without any
motion being
189

VOL. 53, SEPTEMBER 28, 1973 189

Padilla vs. Court of Appeals

submitted by the prevailing party. (Borromeo Bros. Estate,

Inc. vs. Court of Appeals, L-12240, April 15, 1959).
The requirement that execution pending appeal should
be supported by good reasons, to be stated in the special
order, should be complied with as the existence of such
good reasons is the basic element that gives validity to an
order of execution. (Alcasid vs. Samson, 102 Phil. 735).
In the following cases, immediate execution was
considered proper on the following grounds:
 1. That there was uncertainty as to who were the
legitimate occupants of the positions of mayor, vice-
mayor and councilors (Alkuino vs. Arrieta, 9 SCRA
458);
2. That, if the situation where two officials hold only
one position is allowed to continue, the province
may be compelled to pay two high school principals
and peace and order in the school may be disturbed
(Mabutas vs. Alzate, 92 Phil. 1071);
3. That a party had long been deprived of the lawful
possession of market stalls, causing loss of benef its
that should have accrued to him daily
(Buenaventura vs. Peña, 78 Phil. 759);
4. Where the judgment was for the defendant to pay
on the basis of a property insurance contract,
withdrawal from business in the Philippines on the
part of the defendant corporation was considered a
good reason for immediate execution, as defendant’s
withdrawal from the country creates the danger of
the judgment being rendered ineffectual when it
becomes final and executory (Scottish Union &
National Ins. Co. vs. Macadaeg, 91 Phil. 891).

LEGAL RESEARCH SERVICE

See SCRA Quick Index-Digest, volume one, page 93 on

Appeal; and page 501 on Courts.

——o0o——

190

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