SONIDA INDUSTRIES, INC., PETITIONER, VS. HON. CORNELIO W. WASAN, SR., IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH XXXIX, REGIONAL TRIAL COURT OF PANGASINAN, AND RURAL TELEPHONE…

Assailed in this petition for certiorari and prohibition
with an application for preliminary injunction or at least a restraining order
under Rule 65 of the New Rules of Court is the special order of execution
pending appeal issued by the respondent
judge, on the grounds that the same were issued after the trial court had lost
jurisdiction over the case as the appeal had already been perfected and in like
manner there was no good reason for granting immediate execution.

Respondent Rural Telephone Company (Rutelco),
holder of a franchise to establish, operate, and maintain a public telephone system in Urdaneta,
Pangasinan, entered into a Memorandum of Agreement
(with Option to Sell) with petitioner Sonida
Industries, Inc., holder of a franchise authorized to construct, operate, and
maintain radio communications system within and without
the Philippines,
whereby the former leased to the latter the Urdaneta
Public Telephone System for a period from September ­19, 1980 to September 19, 1985.

When petitioner took over the operation of the System, it was
alleged that the inside and outside equipment were burned out as petitioner had
to rehabilitate the system before it could start with its operation. The facts
that the municipal franchise granted by the Municipality
of Urdaneta
was already cancelled due to poor and inefficient service and that respondent
is indebted to Philippine Long Distance Telephone Company were allegedly
concealed to petitioner at the time, the Agreement was entered into.  By reason of these alleged fraudulent
representations and clever machinations of the respondent, petitioner
repeatedly failed to pay the monthly rentals of P4,000.00.

On October 27, 1981,
Rutelco filed an action in court (Civil Case No.
15739) against Sonida for the rescission of the
Memorandum of Agreement plus damages, on the ground of violation of the terms
and conditions of the agreement. 
Meanwhile, on May 24, 1984,
Sonida became the owner of the leased premises
because the Metro Bank, to whom Rutelco had
previously mortgaged the premises, foreclosed the same and sold the premises to
petitioner.

On June 25, 1986 respondent judge rendered a decision ordering Sonida to pay Rutelco the sum of
P4,000.00 a month, plus legal interest, from November
1, 1980 up to such time that the defendant (now petitioner) returns to
plaintiff (now respondent) the operation of the Urdaneta
Public Telephone System; ordering the rescission of the agreement; and ordering
petitioner Sonida to pay litigation expenses.  Notice of the aforementioned decision was
received by the parties on July 7, 1986.

Subsequently, on July 21, 1986, petitioner Sonida filed its notice
of appeal.  On July 25, 1986, or eighteen (18) days
after notice of the decision was received, respondent Rutelco
filed a motion for execution pending appeal. 
On August 7, 1986,
respondent judge issued a special order granting the motion for execution
pending appeal.

A motion for reconsideration with offer to file a supersedeas bond to stay execution by the petitioner was
denied.  Finding no appeal nor any other plain, speedy, and adequate remedy in
the ordinary course of law, petitioner Sonida
Industries filed the instant petition, alleging that respondent judge acted
with grave abuse of discretion and without or in excess of his jurisdiction,
because the special order was issued after the appeal had already been
perfected and also there was no special reason for an immediate execution
because petitioner already became the owner of the property leased.

In their comment, respondents argue that petitioner failed to appreciate the difference between
“taking” an appeal and “perfecting” an appeal.  The former is merely the filing of a notice
of appeal which does not necessarily mean that an appeal is perfected while the
latter means that the appeal taken is approved or given due course.  Thus, in the case at bar, the appeal is not
yet perfected by the mere filing of the notice. 
After such filing, the court has yet to determine the timeliness of the
appeal and thereafter approve or give due course thereto, and it is only in
this event that an appeal is deemed perfected. 
Considering, therefore, that the appeal taken was not yet given due
course when the respondent court issued the special order for execution, the
appeal was not yet perfected and thus, the lower court still had jurisdiction
over the case.

The contention is devoid of merit.  The trial court had no more jurisdiction over the case when it issued the special order
granting the motion for execution pending appeal.  Paragraph 1, Section 23 of the Interim Rules
provides:

“In cases where appeal is taken, perfection of the appeal
shall be upon the expiration of the last day to appeal by any party.”

“Under this section, the mere filing of the appellant’s
notice of appeal does not divest the trial court of its jurisdiction over the
case.  The court may still take
cognizance of the other party’s motion for new trial under Rule 37, if he
should opt to file one, or, as in the instant case, a motion for execution
pending appeal, provided such motions are filed
within 15 days from said party’s notice
of the decision.  x x x.”
(Universal Far East Corp. v. Court of Appeals, 131 SCRA 642) [Underscoring
for emphasis].

It is worthwhile to note that notice of the decision was received
on July 7, 1986 and the motion for execution pending appeal was filed on July
25, 1986, or 18 days thereafter, which is evidently beyond the reglementary period for appeal.  Timeliness of the resolution by the court of
said motion is not the point under consideration because to require the trial
court to resolve such motion within the reglementary
period for appeal “would be difficult, if not impossible, to follow (Ibid). 
What is crucial to determine is the timeliness of the filing of
the motion for execution pending appeal.  In the case at bar, the appeal was perfected,
not on July 21, 1986 (date
of filing of notice of appeal), but on July
22, 1986 (expiration of the last day to appeal of both parties). 
Since the motion for execution pending appeal was filed on July 25, 1986, that is, after the
appeal had already been perfected by reason of the expiration of the period to
appeal, the trial court had already lost
jurisdiction over the case and thus cannot validly grant the said motion
anymore.  Perforce, the motion should
have been filed before the perfection of the appeal or within the 15-day
period.  Respondent, in his comment,
erred in applying the maxim under Rule 41, Sec. 9 of the Rules of Court which
provides that mere filing of the notice of appeal, record on appeal, and appeal
bond does not perfect an appeal as it is the filing within the reglementary period plus the approval by the court of the
record on appeal and appeal bond which perfect the appeal.  Under the present procedure for appeal
(Interim Rules), an appeal bond is no longer necessary, and the filing of a
record on appeal is not required anymore except in cases of multiple
appeals.  What determines perfection of
the appeal is the expiration of the reglementary
period for appeal.  This new procedure
finds application to the case now before us.  The same principle was reiterated in the cases
of Montelibano v. Bacolod-Murcia
Milling Co., Inc., 136 SCRA 294 and Yabut v. IAC, 142
SCRA 124.

As regards the second issue, we agree with the petitioner that
there exists no sufficient and good reason for ordering immediate
execution.  Although ascertainment of
these special reasons lies within the sound discretion of the trial judge, and
the appellate court should not normally disturb such findings, intervention by
the appellate court may be proper, if it be shown that there has been an abuse
of discretion or that conditions have so far developed as to necessitate the
interference of the reviewing court.  The
grounds relied upon by the trial court are the following, to wit:  (a) the appeal taken by the defendant is
clearly dilatory; (b) the Memorandum of Agreement had expired already and yet
the defendant still wanted to hold on to the equipment of the plaintiff; and
(c) plaintiff is willing and is capable of posting a bond.  While it may be true that petitioner asked
for several postponements, said motion were however granted by the trial judge
during the proceedings.  If the
postponements were truly intended for delay, respondent judge should not have
granted the same.  Moreover, the
expiration of the agreement is of no moment because in the first place,
petitioner Sonida had already become the owner of the
property in question.  Assuming, arguendo, that Rutelco’s
fear of possible “dissipation of the property in question will lead to its
loss,” still what is applicable in this event is a protective order under
Rule 41 Sec. 9 and not an execution pending appeal.  A special order of execution pending appeal
is usually not favored because it affects the rights of the parties which are
yet to be ascertained on appeal.  The purpose of an immediate execution is not
to protect and preserve the subject matter of the litigation.  Furthermore, the petitioner is correct in
saying that the question as to whether an appeal is frivolous or not is not for
the trial court to determine but the appellate court.

WHEREFORE and by reason of the foregoing, this 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.

SO ORDERED.

Padilla, Sarmiento, and Regalado, JJ., concur.

Melencio-Herrera, J., (Chairman), on leave.