CITYTRUST BANKING CORPORATION, PETITIONER, VS. THE HONORABLE FOURTH DIVISION, COURT OF APPEALS AND WILLIAM SAMARA, RESPONDENTS.

Can the execution of a final judgment be prevented by the appeal
there from of a co-defendant? Can the said appeal inure to the benefit of the
defendant who did not appeal? These are the issues in this appeal by certiorari
from the resolution of the Fourth Division of the Court of Appeals^[1]
dated February 5, 1988 denying a motion for reconsideration of its earlier
decision on the ground that the appeal of petitioner was filed way out of time,
i.e., 51 days from notice of the decision of the Regional Trial
Court (Branch 160) of Pasig, Metro Manila.^[2]

The antecedent facts of the case are as follows:

On October 3, 1983,
private respondent William Samara filed Civil Case No. 50248 entitled
“William Samara, plaintiff, versus Citytrust
Banking Corporation and Marine Midland Bank, NA, defendants” before Branch
160 of the Regional Trial Court in Pasig, Metro Manila.

The complaint alleged that private respondent purchased a
US$40,000.00 demand draft from petitioner Citytrust
Banking Corporation (Citytrust) and that he invested
the same in a joint venture with
a certain Tony Mancuso for the purpose of bringing to the Philippines
some American entertainers.  The draft
was drawn against Marine Midland bank, NA (Marine Midland) in favor of Thai
International Airways since the amount represented the estimated cost of the
air transportation of the entertainers. 
Sensing, however, that Tony Mancuso was not going to fulfill his part of the agreement, private respondent
executed a stop-payment order on December
23, 1980 and gave specific instructions to petitioner Citytrust to immediately telex the same to its
correspondent bank in America,
Marine Midland.  Both defendants
confirmed that the demand draft was not yet paid.  Consequently, Citytrust
re-credited the dollar account of the private respondent in the amount of US$40,000.00.  However, after a lapse of seven (7) months,
petitioner Citytrust debited the said dollar account
in the amount of $40,000.00 upon realizing that Marine Midland
had debited the amount of $40,000.00 from the account of Citytrust.  Private respondent filed a protest regarding
the debiting of his dollar account and demanded the return of the said amount.

The complaint further alleged that Tony Mancuso arrived in the Philippines
in January 1981 and stayed in the country up to the middle part of the same
year.  Private respondent went on to say
that he did not bother to collect from Mancuso the value of the bank draft
inasmuch as Mancuso assured him that the same was never encashed.  Private respondent also alleged that Mancuso
had, since then, left the Philippines
for an unknown destination thereby making it impossible to go after him.

Petitioner filed an answer with counterclaim and cross claim on January 4, 1984 while Marine Midland
filed its counterclaim and crossclaim on January 16, 1984.

On March 4, 1986,
the Regional Trial Court held Marine Midland and Citytrust
jointly and severally liable to private respondent.  The dispositive
part of the decision of the trial court reads as follows:

“WHEREFORE, judgment is hereby rendered:

1.  Ordering
the defendants, jointly an severally, to pay the sum of $40,000.00, plus twelve
percent (12%) interest per annum from July 3, 1981, until full payment is made,
and the further interest of 12% per annum on the accrued interest from December
23, 1980, up to the filing of the complaint on October 4, 1983, inclusive;
exemplary damages in the sum of P100,000.00 and the sum of P50,000.00 as
attorney’s and costs;

2.  Dismissing
the defendants’ counterclaims for lack of merit;

3.  Ordering
defendant Marine Midland to reimburse defendant Citytrust
whatever amount the latter will be made to pay the plaintiff by reason of this
judgment and costs.”^[3]

Petitioner avers that on March
26, 1986 or nine days after it received a copy of the said
decision, it was furnished a copy of the motion for reconsideration filed by Marine Midland seeking a reversal
of the decision of the lower court against both itself and petitioner.  Counsel for Marine Midland pointed out that
the cause of action of the private respondent is not really against any of the
defendant banks but against Tony Mancuso and that the only reason why the case
was filed against the defendants is because “Mancuso is nowhere to be found and the plaintiff is left
holding the proverbial empty bag.”^[4]

On account of the failure of the petitioner to appeal during the reglementary period allowed for the same, private
respondent filed a motion for execution of the decision of the lower court on April 29, 1986.  Petitioner filed an opposition thereto on May 7, 1986.

However, on May 5, 1986,
petitioner received a copy of the order of the lower court denying the motion
for reconsideration of Marine Midland.  This prompted the former to file a
Notice of Appeal on May 7, 1986,
or two days after the said order was received. 
The lower court, however, denied the appeal filed by petitioner and
granted the motion for execution filed by private respondent.  Petitioner then filed a motion for
reconsideration which was, however, granted. 
The trial court gave due course to the appeal on the ground that
“substantial justice demands the granting of the motion at bar.”^[5]
The trial court also set aside the order of execution on the ground that “the denial of the appeal and the giving
of due course to the execution of the judgment as against said defendant at
this point in time will work out an unjust situation as it will be conducive to
force the defendant Citytrust to satisfy the judgment
without being able to demand and be defrayed reimbursement from co-defendant
Marine Midland as mandated in the decision appealed from, until the disposition
of the case on appeal by the Intermediate Appellate Court who (sic) may either
affirm or reverse the decision.”^[6]

Thus, the case was
brought on appeal to the Court of Appeals. 
Private respondent filed a motion to dismiss the appeal with the
respondent appellate court after which the petitioner filed its comment
thereto.  On December 15, 1987, the appellate court resolved to grant the
motion to dismiss filed by private respondent. 
A copy of the resolution was received by petitioner on December
23, 1987.  On January 7, 1988, petitioner filed its motion for
reconsideration praying that the resolution dated December 15, 1987 be set aside.  The motion was, however, denied.

Hence, the instant
petition.  Two errors are assigned on part of the appellate court:

I.        THE RESPONDENT COURT
ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION, REVERSIBLE ON APPEAL, IN NOT
HOLDING THAT THE APPEAL FILED BY PETITIONER’S CO-DEFENDANT, I.E., MARINE
MIDLAND, INURED TO THE PETITIONER’S BENEFIT AS TO SUSPEND PETITIONER’S PERIOD
TO APPEAL.

II.       THE RESPONDENT COURT
ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION, REVERSIBLE ON APPEAL, IN FAILING
TO RULE THAT PRIVATE RESPONDENT WILL NOT BE ENTITLED TO AN IMMEDIATE EXECUTION
EVEN IF IT CAN BE ASSUMED THAT PETITIONER’S APPEAL WAS FILED BEYOND THE
REGLEMENTARY PERIOD.

This Court finds the
petition bereft of merit.

Petitioner argues that when Marine Midland filed a motion for
reconsideration, it was intended to benefit both Marine Midland and
itself.  Petitioner explained that the motion sought the reversal of the decision of
the lower court not only with respect to the judgment against Marine Midland
but also as regards the liability of petitioner on the ground that the person
who should be held liable is Tony Mancuso who, at present, is nowhere to be
found.

The petitioner cites Director of Lands vs. Reyes^[7] where this Court held that where the
rights and liabilities of those who did not appeal and those of the party
appealing are so interwoven and
dependant on each other as
to be inseparable, the reversal of the judgment as to one would
operate as a reversal as to all.^[8]

It must be noted that the two defendants, Marine Midland and Citytrust, filed cross claims against each other in their
answer.  Citytrust
alleged that the proximate cause of the
injury should be attributed to co-defendant Marine Midland when the latter
failed to promptly inform Citytrust that the
demand draft Citytrust issued was really paid by
Marine Midland on December 22, 1980.  For its part, Marine Midland alleged that Citytrust did not properly advise it of the actual
circumstances relating to the dates of payment of the draft and of the receipt
by the latter of the stop-payment instructions. 
The rights and liabilities of both parties concerned are not so
interwoven in such a manner that their defenses are similar and that a reversal
of the judgment as to one should operate as a reversal to the other.  Furthermore, a perusal of the decision appealed
from shows that Marine Midland, though jointly and severally liable with
petitioner, is the one ultimately held responsible for the damages incurred by
the private respondent inasmuch as the trial court ordered “defendant
Marine Midland to reimburse defendant Citytrust of
whatever amount the latter will be made to pay the plaintiff by reason of this
judgment and costs.”^[9]
Another factor negating the theory of the petitioner is the fact that both
parties are represented by different counsels such that one cannot legally act
for the other.  Therefore, when Marine
Midland filed its motion for reconsideration, it was acting for itself.

It has often been said that “dismissal of appeals on purely
technical grounds is frowned upon, where the policy of the courts is to
encourage hearings of appeals on their merits. 
The rules of procedure ought not to be applied in a very rigid,
technical sense; rules of procedure are used only to help secure, not override
substantial justice.”^[10]
This does not mean, however, that any party may appeal from a decision at any
time it may choose to file the same.  In Reyes vs. Court of Appeals,^[11]
this Court enumerated the grounds for the allowance of an appeal filed out of
time, i.e., fraud, accident, mistake or excusable
negligence.  In the case at bar, petitioner
did not state any reason for its failure to file its appeal within the reglementary period. 
Petitioner did not even allege the existence of circumstances that would
amount to fraud, accident, mistake or excusable neglect so as to provide a legal justification
for its late appeal.

Moreover, the circumstances of the aforecited
case snow the weakness of the claim of petitioner.  In the said case, the appellant filed a
motion for new trial which did
not set forth specifically the reasons in support of said ground and was,
therefore, found to be pro forma.  Hence, the motion did
not suspend the running of the period to appeal, and the appeal filed more than
thirty days from notice was not given due course.  In the
present case, petitioner did not do anything upon receipt of the
decision of the trial court.  It simply
waited for the result of the motion filed by its co-defendant Marine Midland, a
situation worse than that in Reyes.

With regard to the issue of whether or not private respondent is
entitled to the immediate execution of the decision of the trial court, the
answer should be in the affirmative.

Section 1, Rule 39 of the Rules of Court provides that “(e)xecution shall issue only upon a judgment or order that
finally disposes of the action.  Such execution
shall issue as a matter of right upon the expiration of the period to appeal therefrom if no appeal has been duly perfected.”
Having failed to appeal during the reglementary
period, the decision of the Regional Trial Court against petitioner had become
final and executory against petitioner thereby making
it the ministerial duty of the trial court to grant the motion for execution
filed by the prevailing party.

The argument of the petitioner to the effect that execution
should not be allowed during the pendency of the
appeal of its co-defendant inasmuch as the same would result in an absurd
situation in case the findings of the trial court are reversed by the Court of
Appeals, has no leg to stand on.  The law
is clear and admits of no other interpretation. 
A final judgment must be executed against the defeated party.

Furthermore, the Regional Trial Court held the two defendants jointly
and severally liable to the plaintiff. 
Therefore, whether or not Marine Midland is absolved from liability on appeal is of no moment.  The fact remains that the judgment against Citytrust had already become final and executory.  Thus, there is no valid ground for the trial
court to deny the motion for execution filed by private respondent at this
point in time.

WHEREFORE, premises considered, the petition is DENIED for
lack of merit.  No pronouncement as to
costs.

SO ORDERED.

Narvasa, (Chairman), Cruz, Griño-Aquino, and Medialdea, JJ., concur.

^[1]
Penned by Associate Justice Jorge R. Coquia,
concurred in by Associate Justices Josue N. Bellosillo and Venancio D. Aldecoa.

^[2]
Penned by Judge Rafael de la Cruz.

^[3]
Decision, dispositive portion, page 4.

^[4]
Page 113, Rollo.

^[5]
Page 40, Rollo

^[6]
Ibid.

^[7]
69 SCRA 416 (1976).

^[8]
Emphasis supplied.  The ruling reiterates
the doctrine laid down in Municipality
of Orion vs. Concha, 50 Phil. 679 (1927).

^[9]
Paragraph 3, dispositive
portion of the decision of the trial court; page 87, Rollo.

^[10]
Guballa vs. Court of Appeals, G.R. No. 79403, December 19, 1988.

^[11]
74 Phil. 235 (1943).