Date: November 25, 1997

1997 Rules on Civil Procedure

2001 Edition Rule 39 Execution, Satisfaction

And Effect of Judgments

Rule 39

EXECUTION, SATISFACTION AND

EFFECT OF JUDGMENTS

Rule 39 is on the subject of Execution, Satisfaction and Effect of Judgments. This is the longest rule in the study of Civil Procedure. Take note that there are 48 Sections. Let us first review the fundamentals.

Q: Define execution.

A: EXECUTION is the remedy provided by law for the enforcement of a judgment. (21 Am. Jur. 18) It is the fruit and the end of the suit and is very aptly called the life of the law (PAL vs. Court of Appeals, 181 SCRA 557).

It would be useless if there is judgment but you cannot enforce the same. When you receive the decision of court in your favor, what will you do with that? If there is no way to enforce that decision, i-laminate mo na lang yan. Useless eh!

Q: Who will enforce the judgment?

A: The very same court which rendered the judgment.

Q: How is execution generally done?

A: It is generally done by filing a motion for execution by the prevailing party and the court will then issue an order of execution, which will be followed with a writ of execution, and the sheriff will enforce the judgment.

So, we file a motion in court after the judgment has become final and executory.

Q: How can the court issue the order when it has already lost jurisdiction over the case? because from what we have learned here is that, one of the effects of the finality of judgment is that the court loses jurisdiction over the case. And when the court loses jurisdiction, it can no longer act on the case. So, how can it still issue orders in that case when actually, once the judgment becomes final and executory, the trial court loses jurisdiction over the case and it can no longer act in that case?

A: What is meant by that statement is that, the court can no longer change the judgment. That is why new trial and reconsideration is not anymore available in this stage. The judgment is beyond the power of the court to change or alter.

BUT definitely the court can act on that case for the purpose of enforcing its judgment because it is absurd to claim that a trial court has the power to try and hear a case but once the judgment has already become final, it has no more power to enforce it. If you will really describe jurisdiction in its complete aspect, we can say jurisdiction is the power of the court to act on the case, to try, to decide and to enforce its judgment. That would be more complete. Because enforcement is part of the court's jurisdiction.Q: Against whom shall the execution issue?

A: Generally, execution can issue only against a (losing) party to the case and not against one who is a complete stranger because majority of judgments are in personam. They are only enforceable against the parties themselves or their successors-in-interest people who derive their rights from him. And a judgement can never be enforced against a complete stranger who never had his day in court. (Cruzcosa vs. Concepcion, 101 Phil. 146; Castaeda vs. De Leon, 55 O.G. 625, Jan. 26, 1959; Bacolod vs. Enriquez, 55 O.G. 10545, Dec. 21, 1959)

Q: What portion in the decision is normally the subject of execution ?

A: It is the dispositive portion the WHEREFORE that is going to be enforced. (Robles vs. Timario, 58 O.G. 1507, Feb. 19, 1962)

CLASSES OF EXECUTION

Q: What are the classes of execution under the law?

A: The following:

I. As to their nature:

1.) COMPULSORY execution known as Execution as a Matter of Right (Section 1)

2.) DISCRETIONARY execution known as Execution Pending Appeal (Section 2)

II. As to how it is enforced (Section 6):

1.) EXECUTION BY MOTION

2.) EXECUTION BY INDEPENDENT ACTION

COMPULSORY EXECUTION

(Execution as a matter of right)

EXECUTION AS A MATTER OF RIGHT;

FIRST INSTANCE: NO APPEAL, JUDGMENT BECOMES FINAL

Section 1. Execution upon judgments or final orders. Execution shall issue as a matter of right, on motion, upon a judgment or order that disposes of the action or proceeding upon the expiration of the period to appeal therefrom if no appeal has been duly perfected.

If the appeal has been duly perfected and finally resolved, the execution may forthwith be applied for in the court of origin, on motion of the judgment obligee, submitting therewith certified true copies of the judgment or judgments or final order or orders sought to be enforced and of the entry thereof, with notice to the adverse party.

The appellate court may, on motion in the same case, when the interest of justice so requires, direct the court of origin to issue the writ of examination.

Q: What are the conditions for compulsory execution?

A: The following are the conditions:

1.) FIRST CONDITION: If a judgment has disposed already of the action or proceeding then it can be executed ;

2.) SECOND CONDITION: The period to appeal has expired and no appeal has been filed/taken from the judgment.

Under the first condition, if a judgment has disposed already of the action or proceeding then it can be executed because if the judgment or order has not yet disposed of the action or proceeding, that is called an interlocutory judgment or order.

One of the effects of finality of a judgment under Rule 36 is that the prevailing party is entitled to have the judgment executed as a matter of right. And it is the ministerial duty of the court to execute its own judgment. So once the judgment has become final, all that the winner or prevailing party has to do is to file an action in court for execution, the court has to issue.

When the law says it is a matter of right upon a judgment or order that disposes the action or proceeding, it means that after the judgment was rendered, there is nothing more for the court to do because its job is over. Therefore, if there is something more that the court can do, as a rule, you cannot execute. That is why conditional judgments, incomplete judgments cannot be executed.

Under the second condition, we must wait for the period to appeal to expire before we can move for execution. So, if the period to appeal has not yet expired, then we cannot execute the judgment. As corollary to that rule we have this question:

Q: May the court refuse to execute a judgment on the ground that the judgement was wrong or erroneous?

A: NO, because it is a matter of and the issuance of the corresponding writ of execution upon a final and executory judgment is a ministerial duty of the court to execute which is compellable by mandamus. (Ebero vs. Caizares, 79 Phil. 152) The principle is: No matter how erroneous a judgment may be, so long as the lower court had jurisdiction over the parties and the subject matter in litigation, (in short the judgment is valid), the said judgment is enforceable by execution once it becomes final and executory. The error also becomes final. If it is erroneous, the remedy is to appeal, otherwise the error becomes final as well.

In execution, if you are not careful, there are lawyers who are very good in thwarting an execution where a series of maneuvers are utilized we can still be delayed by questioning this and that and sometimes courts are unwitting accomplices. That is why in the 1994 of

PELAYO vs. COURT OF APPEALS

230 SCRA 606

HELD: We have time and again ruled that courts should never allow themselves to be a party to maneuvers intended to delay the execution of final decisions. They must nip in the bud any dilatory maneuver calculated to defeat or frustrate the ends of justice, fair play and prompt implementation of final and executory judgment. Litigation must end and terminate sometime and somewhere, and it is essential to an effective administration of justice that once a judgment has become final, the winning party be not, through a mere subterfuge, deprived of the fruits of the verdict. Courts must therefore guard against any scheme calculated to bring about that result. Constituted as they are to put an end to controversies, courts should frown upon any attempt to prolong them.

GENERAL RULE: Judgment is enforceable by execution once it becomes final and executory.

EXCEPTIONS: (WOLFSON vs. DEL ROSARIO, 46 Phil. 41)

1. When there has been a change in the situation of the parties, which makes the execution inequitable;

2. When it appears that the controversy has never been submitted to the judgment of the court;

3. When the judgment was novated by subsequent agreement of the parties;

4. When it appears that the writ of execution has been improvidently issued;

5. When the writ of execution is defective in substance;

6. When the writ of execution is issued against the wrong party; and7. When the judgment debt has been paid or otherwise satisfied.

[1] WHEN THERE HAS BEEN A CHANGE IN THE SITUATION OF THE PARTIES

WHICH MAKE THE EXECUTION INEQUITABLE. (Supervening Fact Doctrine)

One of the most important exceptions is the first one: When there has been a change in the situation of the parties which make the execution inequitable. Meaning, from the time na nagkaroon ng final judgment up to the present, there has been a change in the situation of the parties so that if we will execute, the judgment becomes inequitable already. So, this is just another way of saying that there has been a SUPERVENING EVENT that happened which makes execution inequitable.

EXAMPLE: There was a case where A filed a case to eject B from his property and B lost the case and there was a judgment ordering him to vacate the property of A. But while the case was going on, A mortgaged his property to the bank. In the meantime, he failed to pay his loan and the bank foreclosed the mortgage. So the property was sold at public auction. And at the auction sale, B, the one occupying it, bought the property. The owner now is B. But there is a final judgment ejecting him. Now, shall we insist on the judgment ejecting B? No because B is now the owner. The fact that B became the owner is a supervening event.

PHIL. VETERANS BANK (PVB) vs. IAC

178 SCRA 645

NOTE: There was a time before that the PVB was closed for 5 to 6 years because I think they have some problems. So the Central Bank has to take over. The Central Bank has ordered to stop the operation placed under receivership, the Central Bank will control. Now under the Central Bank Law, once the Central Bank takes over the control of a private bank, all its assets has to be preserved. No assets will be sold or disposed of.

FACTS: There was somebody who sued PVB, and PVB lost. So there was a judgment which became final. And the winner asked the court to execute. Practically, you have to levy on the property of the bank. In the meantime, the PVB was placed under receivership, where under the law, it cannot be disposed of because it is under the control of the Central Bank.

ISSUE: Can the prevailing party insist on the enforcement of the judgment and get and levy the property of the PVB?

HELD: NO. The placement of the bank under receivership is a SUPERVENING EVENT. Once a decision has become final and executory, it is the ministerial duty of the court to order its execution, admits certain exceptions. The fact that petitioner is placed under receivership is a supervening event that renders a judgment notwithstanding its finality unenforceable by attachment or execution.

SAMPAGUITA GARMENTS CORP. vs. NLRC

233 SCRA 260

FACT: An employee was terminated by his employer on the ground of theft. He stole company property. The management filed also a case of theft against the employee. But in the meantime the employee also filed a labor case against the employer for illegal dismissal and prayed for reinstatement with back wages. After hearing, the NLRC ruled that there was illegal termination and ordered the reinstatement of the employee and payment of backwages. The NLRC decision became final. In the meantime, the accused was convicted in the criminal case for theft and ordered to go to prison.

ISSUE: What happens now to the final judgment of the NLRC reinstating the employee?

HELD: An employees conviction for theft, which was affirmed by the RTC and the CA, is a SUPERVENING CAUSE that renders unjust and inequitable the NLRC decision mandating the employees reinstatement with backwages.

Take note however that for the supervening event to apply, the supervening event must happen after the judgment has become final and executory. Not that the supervening event happened while the case was going on. If the case is going on and something happened which you believe would make the decision against you unfair, your duty is to bring it to the attention of the court so that the court deciding the case would take that into consideration. In the case of

VALENSONA vs. COURT OF APPEALS

226 SCRA 36

HELD: While the rule is that a stay of execution of a final judgment may be authorized if necessary to accomplish the ends of justice, as for instance, where there has been a change in the situation of the parties which makes such execution inequitable, nevertheless the said rule cannot be invoked when the supposed change in the circumstances of the parties took place while the case was pending, for the reason that there was then no excuse for not bringing to the attention of the court the fact or circumstance that affects the outcome of the case.

The ruling in VALENZOLA was reiterated in

ABOITIZ vs. TRAJANO

278 SCRA 387 [1997]

HELD: We are of course well aware of the rule authorizing the court to modify or alter a judgment even after the same has become executory, whenever circumstances transpire rendering its execution unjust and inequitable. However, this rule, we must emphasize, applies only to cases where the facts or circumstances authorizing such modification or alteration transpired after the judgment has become final executory.

[3] WHEN THE JUDGMENT WAS NOVATED BY SUBSEQUENT AGREEMENT.

QUESTION: Can the parties enter into a compromise agreement when there is already a decision?

ANSWER: YES. Compromise agreement is welcome anytime before the case is filed, while the case is going on, while the case is on appeal.

Q: Now suppose there is a decision in my favor against you and then you approach me and say, Pwede ba pag-usapan na lang natin ito? Sige okay. Then we arrive at another agreement which we signed, where the agreement is different from the decision in my favor. Can it be done?

A: Yes, I can waive my rights under the judgment. There is now a new agreement between us.

Q: Can I execute on the original judgment?

A: No more, because the new agreement novated the judgment. Take note that in case of novation, the new obligation must be totally incompatible with the first obligation.

A related question:

Q: Can one court by injunction or restraining order stop the execution of a judgment of another court?

A: GENERAL RULE: NO, because that will amount to interference.

EXCEPTIONS:(when the enforcement of a final judgment may be stopped by way of injunction)

1.) Rule 38, Section 5:

Rule 38, Section 5: Preliminary injunction pending proceedings. The court in which the petition is filed, may grant such preliminary injunction as may be necessary for the preservation of the rights of the parties, upon the filing by the petitioner of a bond in favor of the adverse party, conditioned that if the petition is dismissed or the petitioner fails on the trial of the case upon the merits, he will pay the adverse party all damages and costs that may be awarded to him by reason of the issuance of such injunction or the other proceedings following the petition; but such injunction shall not operate to discharge or extinguish any lien which the adverse party may have acquired upon the property of the petitioner.

In effect, there is a final and executory judgment but the court will issue an injunction to stop this enforcement because of the pendency of a petition for relief from judgment.

2.) When there is an action for annulment of judgment of the RTC filed in the CA.

The CA may issue a writ of preliminary injunction annulment of judgment, certiorari, or prohibition cases where the CA will issue a preliminary injunction to stop the RTC from enforcing its judgment pending the resolution of whether its judgment was rendered in excess or without jurisdiction- annulment of judgement, certiorari, or prohibition cases where the CA will issue a preliminary injunction to stop the RTC from enforcing its judgement pending the resolution of whether its judgement was rendered in excess or without jurisdiction.

So, those are the exceptions.

EXECUTION AS A MATTER OF RIGHT;

SECOND INSTANCE: CA AFFIRMS THE RTC JUDGMENT

Q: Is there any other instances where a judgment maybe executed as a matter of right?

A: YES, when the losing party appealed the RTC decision to the CA and the CA affirmed the decision of the RTC. Kung may appeal, the judgment is not final, you cannot execute. The case is now in the CA, the CA decided in your favor, the RTC judgment was affirmed and the CA decision has also become final and executory. So you can now execute.

Q: How do you execute in that situation?

A: That is now covered by the second and third paragraphs of Section 1:

If the appeal has been duly perfected and finally resolved, the execution may forthwith be applied for in the court of origin, on motion of the judgment obligee, submitting therewith certified true copies of the judgment or judgments or final order or orders sought to be enforced and of the entry thereof, with notice to the adverse party.

The appellate court may, on motion in the same case, when the interest of justice so requires, direct the court of origin to issue the writ of execution.

Now the usual procedure no, when you win in the RTC and the losing party appeals, the records of the case will be brought to the CA. Later, there will be a CA decision: The judgment of the RTC of Davao City is affirmed in toto. Now you have to wait for the CA judgment to become final because that may be appealed further to the SC. If the judgment becomes final, the clerk of court will make an entry of final judgment of the CA decision. Normally after that, the records from the CA will be returned to Davao. It will be sent back to the court of origin. Once the record is back, the RTC is supposed to tell you, the records are here. That is the time you file a motion for execution. You will file it in the RTC.

But sometimes, it takes months for the CA to return the records. That is the trouble with the CA. It takes them several months, when the case is appealed, before they tell you that the record is here.

In the PRESENT rules, this is taken from the SC Circular 2494 which took effect in 1994, hindi na kailangan hintayin ang records na bumalik dito. Just get a certified copy of the CA decision, get a copy of the entry of final judgment of the CA. You just attach a copy of the CA judgment and a certificate from the CA clerk of court that it is already final and executory meaning, that there is already entry of final judgment. This is much faster than waiting for the records to be returned.

The first paragraph in Section 1 normally deals with judgment usually becoming final and executory in the RTC. The rest of the paragraph deals with appeal which affirmed the decision of the RTC. So that is the procedure for execution both cases, execution is a matter of right because judgment is final and executory.

The alternative which is the last paragraph, in the interest of justice, you can file also your motion for execution in the CA and the CA will direct the RTC to issue the writ of execution.

EXECUTION AS A MATTER OF RIGHT;

THIRD INSTANCE: CASES UNDER SECTION 4

Q: Is there another instance when execution becomes a matter of right?

A: This is the third instance found in Section 4:

Sec. 4. Judgments not stayed by appeal. - Judgments in action for injunction, receivership, accounting and support, and such other judgments as are now or may hereafter be declared to be immediately executory, shall be enforceable after their rendition and shall not be stayed by an appeal taken therefrom, unless otherwise ordered by the trial court. On appeal therefrom, the appellate court in its discretion may make an order suspending, modifying, restoring or granting the injunction, receivership, accounting, or award of support.

The stay of execution shall be upon such terms as to bond or otherwise as may be considered proper for the security or protection of the rights of the adverse party. (4a)

GENERAL RULE: If there is an appeal, the judgment will be stayed.

EXCEPTIONS (Under Section 4): Judgments in actions for injunction, receivership, accounting, support, judgment declared to be immediately executory.

So, actions for injunction, receivership, accounting, support. So for example: theres an injunction from the court: The defendant is enjoined from trespassing on plaintiffs land. Then you appealed. So, the decision is not final. Now, if the judgment is not yet final, what will you do in the meantime. So, youll say; Ill just continue to trespass because anyway the judgment is not yet final. Ah hindi yan pwede. Even if the judgment is not yet final, even if it is on appeal, you have to honor the injunction. So, in effect, it is a matter of right.

Another Example: An order directing you to render an accounting. Take the case of recovery of possession of land with accounting of the income that you received. After trial, Okey, Defendant, you turn over the possession of the property to the plaintiff and you render an accounting. Appeal ka. Pag appeal mo, there must be an accounting in the meantime.

So, if there is a judgment for an action for support, you must comply with the judgment even before it becomes final. So, the amendment now includes support and this phrase, such other judgments as are now or may hereafter be declared to be immediately executory. Any judgment which is declared by law to be immediately executory has to be enforced even before it becomes final and executory even if there is an appeal.

Q: Give an example of a law which declares a judgement to be immediately executory?

A: The best example would be the Summary Procedure where a decision of the MTC in a civil case is appealed to the RTC, the decision of the RTC is immediately executory even if we go to the CA. It has to be executed unless the appellate court will stop the execution in the meantime.

EXECUTION AS A MATTER OF RIGHT;

FOURTH INSTANCE: FORCIBLE ENTRY AND UNLAWFUL DETAINER CASES

Q: Is there another instance when execution becomes a matter of right?

A: YES, under Rule 70 a judgment of the MTC in a forcible entry or unlawful detainer case is immediately executory (i.e. subject to immediate execution) even if it is not yet final and executory.

TO SUMMARIZE:

Q: When is execution a matter of right?

A: In the following:

1.) Section 1, paragraph 1 no appeal; judgment becomes final;

2.) Section 1, paragraph 2 there is an appeal; once the CA judgment becomes final;

3.) Section 4 Judgment in an action for injunction, receivership, accounting, support, judgment declared to be immediately executory; and4.) Rule 70 Judgments in Forcible Entry and Unlawful Detainer cases.

DISCRETIONARY EXECUTION

(Execution pending appeal)

Section 2. Discretionary execution.

(a) Execution of a judgment or final order pending appeal. On motion of the prevailing party with notice to the adverse party filed in the trial court while it has jurisdiction over the case and is in the possession of either the original record or the record on appeal, as the case may be, at the time of the filing of such motion, said court may, in its discretion, order the execution of a judgment or final order even before the expiration of the period to appeal.

After the trial court has lost jurisdiction, the motion for execution pending appeal may be filed in the appellate court.

Discretionary execution may only issue upon good reasons to be stated in a special order after due hearing.

(b) Execution of several, separate or partial judgments. - A several, separate or partial judgment may be executed under the same terms and conditions as execution of a judgment or final order pending appeal.Well now go to the second type of execution discretionary or execution pending appeal. Discretionary, meaning, the court may or may not order the execution.

Here, the prevailing party files a motion for execution within the 15 days period. So in other words, the judgment is not yet final and executory, normally, within the period to appeal.

Q: Normally, can you file a motion for execution within the period to appeal?

A: As a rule, you cannot because it is not yet final. But by EXCEPTION, Section 2 allows you, provided, according to the last paragraph, discretionary execution may only issue upon good reason to be stated in the special order after due hearing.

Q: Therefore, what are the requisites for discretionary execution?

A: The following are the requisites for discretionary execution:

1.) There must be a motion filed by the prevailing party;

2.) There must be a notice of the motion given to the adverse party; and3.) There must be good reasons to execute to be stated in a special order after due hearing.

Why discretionary? Because the court may or may not grant the execution depending on whether there is a good reason or no good reason. Unlike in Section 1, when the judgment has become final and executory, you do not have to cite any good reason. The only reason for the execution is that the judgment becomes final and executory. But in the case of execution pending appeal, you must justify it the party must convince the court to grant the execution. And remember according to the SC, execution under Section 2 is not the general rule, that is the exception.

The requirement of good reason is important and must not be overlooked, because 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. (City of Bacolod vs. Enriquez, 101 Phil. 644)

It is even a misnomer execution pending appeal. For all you know, the losing party may or may not appeal. It is actually called execution pending appeal because you are filing the motion within the period to appeal.

Q: What will happen if there are no good reasons?

A: The writ of execution is void because it does not state why you are executing a judgment. (AFWU vs. Estipona, L-17934, Dec. 28, 1961) And remember that execution pending appeal is the exception rather than the rule. And there is a possibility that the judgment in your favor will be reversed on appeal.

Q: Suppose we will execute the judgment pending appeal and the appeal will proceed then it will be reversed, what will happen then?

A: If that happens, then there is Section 5 eh di, magsaulian tayo if it is reversed totally, partially, or annulled on appeal or otherwise. There will be MUTUAL RESTITUTION. That is the remedy under Section 5. But the trouble is ang hirap man ng saulian, eh. There could not be a 100% perfect restitution. That is the same asking the question, how can you unscramble an unscrambled egg? This is one reason why execution pending appeal is not favored.

Section 5. Effect of reversal of executed judgment. Where the executed judgment is reversed totally or partially, or annulled, on appeal or otherwise, the trial court, may, on motion, issue such orders and justice may warrant under the circumstances (5a)

Q: Give examples of GOOD REASONS which would justify execution pending appeal.

A: Following are example of good reasons:

1.) When there is danger of the judgment becoming INEFFECTUAL. (Scottish Union vs. Macadaeg, 91 Phil. 891);

In this case of MACADAEG, the plaintiff sued a foreign corporation doing business in the Philippines. So it has assets no? The plaintiff sued the foreign company and he won, there was award, but hindi pa final. In the meantime, plaintiff learned the foreign company is going to stop completely its business in the Philippines and they are going to send back all their assets abroad. Sabi ng na plaintiff: Aba delikado ako. Suppose after the appeal, I still win and I will start running after the defendant na wala naman dito. It has no more office, no operations, no assets; but in the meantime meron pa? So the plaintiff filed a motion for execution pending appeal. If we will wait for the judgment to become final, by that time the judgment will become ineffectual.

2.) OLD AGE; There was a case an old woman files a case against somebody to recover her land from the defendant which the latter has deprived her of the property for years. The defendant enjoyed the property and the fruits. After years of litigation she won, she was about 80. And then mag-aappeal pa yong kalaban. The old woman filed a motion in court asking for immediate execution even if the judgment is not yet final on the argument that I have been deprived for years of the possession and of the property; and there is a probable appeal which may take another couple of years. By the time I win the case on appeal, I may already be dead. I have not enjoyed the property and the fruits. The SC said, all right that is a good reason.

3.) Where the appeal is for the purpose of DELAY;

Q: How about the argument that the intended appeal is dilatory? It is only intended to prolong the supposed execution and therefore the losing party has a chance to win the appeal. Is that a good ground for execution pending appeal ?

A: In the old case of PRESBITERO vs. RODAS (73 Phil. 300) and JAVELLANA vs. QUERUBIN (July 30, 1966) the SC said that, that is a good reason when the appeal is interposed for delay.

However, in the case of AQUINO vs. SANTIAGO (161 SCRA 570) the SC said that it is not a ground because it is as if the trial court is already acting like the CA. It is only the CA which has the power to claim that the appeal is without merit. Thats another reasoning.

But in the case of HOME INSURANCE CO. vs. CA (184 SCRA 318), the SC ruled that, that would be a good reason again specially that there are many factors to show the inequity of not executing the judgment immediately (if coupled with other reason). Thats why in the case of

HOME INSURANCE CO. vs. COURT OF APPEALS

184 SCRA 318

HELD: A good and sufficient reason upon which to issue execution of the judgment pending appeal is when the appeal is being taken for the purpose of delay. While it is true that it is not for the trial court to say that the appeal may not prosper or that it is frivolous [so, the SC is aware of these pronouncements], there are circumstances which may serve as cogent bases for arriving at such a conclusion. Dean I: An example where the trial court maybe justified in saying that the appeal is dilatory is in default judgements where there is no evidence for the defendant. And then the defendant appeals. Now what is the chance of reversal when all the evidence is for the plaintiff? The possibility that the judgment will be reversed is almost zero (0). Therefore the court can rule that the appeal is dilatory and then order the execution of the judgment pending appeal upon motion of the plaintiff.

The SC continues: Another vital factor which led trial court to allow execution pending appeal was the pendency of the case for more than 17 years so that the purchasing power of the peso has undeniably declined. Petitioner should be given relief before it is too late.

PB COM. vs. COURT OF APPEALS

279 SCRA 364 [Sept. 23, 1997]

HELD: It is significant to stress that private respondent Falcon is a juridical entity and not a natural person. Even assuming that it was indeed in financial distress and on the verge of facing civil or even criminal suits, the immediate execution of a judgment in its favor pending appeal cannot be justified as Falcon's situation may not be likened to a case of a natural person who may be ill or may be of advanced age.

Even the danger of extinction of the corporation will not per se justify a discretionary execution unless there are showings of other good reasons, such as for instance, impending insolvency of the adverse party or the appeal being patently dilatory. Hence, it is not within competence of the trial court, in resolving a motion for execution pending appeal, to rule that the appeal is patently dilatory and rely on the same as its basis for finding good reason to grant the motion. Only an appellate court can appreciate the dilatory intent of an appeal as an additional good reason in upholding an order for execution pending appeal which may have been issued by the trial court for other good reasons, or in cases where the motion for execution pending appeal is filed with the appellate court in accordance with Section 2, paragraph (a), Rule 39 of the 1997 Rules of Court.

4.) When the successful party files a BOND;

Q: Here is a controversial question: How about an instance when the winning party offers to put up a bond. He says; Alright, I am asking for an order pending appeal. I will put up a bond to answer for any damages that the defendant may suffer in the event that he wins the appeal.A: In the old case of HACIENDA NAVARRA vs. LABRADOR (65 Phil 635), the SC simply implied that there is a good ground. HOWEVER, the SC denied that implication in later cases. Among which were the cases of ROXAS vs. CA (157 SCRA 370) and PNB vs. PUNO, (170 SCRA 229) and PHOTOQUICK INC. vs. LAPENA, JR. (195 SCRA 66).

PHILIPPINE NATIONAL BANK vs. PUNO

170 SCRA 229

HELD: The mere filing of a bond would not entitle the prevailing party to an execution pending appeal. Whatever doubts may have been generated by early decisions involving this matter, starting with Hacienda Navarra, Inc. vs. Labrador, et al., have been clarified in Roxas vs. Court of Appeals, et al.

To consider the mere posting of a bond a good reason would precisely make immediate execution of a judgment pending appeal ROUTINARY, the rule rather than the exception. Judgments would be executed immediately, as a matter of course, once rendered, if all that the prevailing party needed to do was to post a bond to answer for the damages that might result therefrom. This is a situation, to repeat, neither contemplated nor intended by law.

So, we might say that the posting of a bond would be an ADDITIONAL GOOD REASON but it is NOT BY ITSELF a good reason. So, the case of HACIENDA NAVARRA VS. LABRADOR has been misinterpreted.

The second paragraph of Section 2 [a]:

After the trial court has lost jurisdiction, the motion for execution pending appeal may be filed in the appellate court.

Q: Where can you file your motion for execution pending appeal?

A: It DEPENDS:

1.) TRIAL COURT - while it has jurisdiction over the case and the court is still in possession of the records of the case. Meaning: (1.) the judgment has not yet become final it is still within the 15 day period, and (2.) the court still is in possession of the records of the case.

2.) APPELLATE COURT after the trial court has already lost jurisdiction, the motion for execution pending appeal may already be filed in the appellate court.

So, if the RTC has no more jurisdiction, then doon ka na magfile ng motion sa CA.

Q: When will the court lose jurisdiction over the case ?

A: With regard to execution pending appeal, you can correlate this with RULE 41, SECTION 9, to wit:

Rule 41, Section 9. Perfection of appeal; effect thereof. A partys appeal by notice of appeal is deemed perfected as to him upon the filing of the notice of appeal in due time.

A partys appeal by record on appeal is deemed perfected as to his with respect to the subject matter thereof upon approval of the record of appeal filed in due time.

In appeals by notice of appeal, the court loses jurisdiction over the case upon the perfection of the appeals filed in due time and the expiration of the time to appeal of the other parties.

In appeals by record on appeal, the court loses jurisdiction only over the subject matter thereof upon the approval of the records on appeal filed in due time and the expiration of the time to appeal of the other parties.

In either case, prior to the transmittal of the original record of the record on appeal, the court may issue orders for the protection and preservation of the rights of the parties which do not involve any matter litigated by the appeal, approve compromises, permit appeals of indigent litigants, order execution pending appeal in accordance with Section 2 of Rule 39, and allow withdrawal of the appeal. (9a)

The phrase order execution pending appeal in accordance with Section 2 of Rule 39 was not there in the Old Rules. Now, that has been added and it jives with Section 2 paragraph (a). Now, for as long as the motion is filed, before the court loses jurisdiction and provided that the records are still with the trial court , even if the appeal is subsequently perfected, it can still act on the motion for execution pending appeal.

Now, let us go back to Section 2, Rule 39 on execution of several, separate or partial judgments meaning, there are several judgments arising from the same case:

Rule 39, Section 2 [b]:

b)Execution of several, separate or partial judgments. - A several, separate or partial judgment may be executed under the same terms and conditions as execution of a judgment or final order pending appeal. (2a)

Let us correlate this provision with Rule 36, Sections 4 and 5 AND Rule 37, section 8:

RULE 36, Sec. 4. Several judgments. In an action against several defendants, the court may, when a several judgment is proper, render judgment against one or more of them, leaving the action to proceed against the others. (4)

RULE 36, Sec. 5.Separate judgments. - When more than one claim for relief is presented in an action, the court, at any stage, upon a determination of the issues material to a particular claim and all counterclaims arising out of the transaction or occurrence which is the subject matter of the claim, may render a separate judgment disposing of such claim. The judgment shall terminate the action with respect to the claim so disposed of and the action shall proceed as to the remaining claims. In case a separate judgment is rendered, the court by order may stay its enforcement until the rendition of a subsequent judgment or judgments and may prescribe such conditions as may be necessary to secure the benefit thereof to the party in whose favor the judgment is rendered. (5a)

RULE 37, Sec. 8. Effect of order for partial new trial. - When less than all of the issues are ordered retried, the court may either enter a judgment or final order as to the rest, or stay the enforcement of such judgment or final order until after the new trial. (7a)

Q: Can there be two or more judgments arising out of one case?

A: YES. (Rule 36, Sections 4 and 5)

Q: Can the first judgment be immediately executed while waiting for rendition of the second judgment?

A: Generally, the court will decide. If the court agrees, there has to be a good reason.

There is one interesting case on execution pending appeal the case of

RCPI vs. LANTIN

134 SCRA 395

FACTS: The case of Lantin was an action for damages. The court awarded the plaintiff said damages. So, the plaintiff moved for discretionary execution.

ISSUE: Whether or not execution pending appeal is proper in a judgment for damages.

HELD: The execution pending appeal may be proper for enforcing the collection of ACTUAL DAMAGES, but it is not proper to enforce the payment of moral or exemplary damages. So, this is where the SC distinguished.

Why is it that execution pending appeal is proper for the collection of actual damages? In actual or compensatory damages, the amount is certain. Normally, there are receipts. The amount is based on evidence.

But the award for moral or exemplary damages is uncertain and indefinite. It is based on abstract factors like sleepless nights, besmirched reputation. It is hard to quantify it based on evidence.

The SC said, in many cases the trial court awards a huge amount for exemplary damages but on appeal, the CA refused to award or totally eliminate the award. So, if the award of moral or exemplary damages is not certain or fixed, the execution pending appeal may not be proper to enforce its execution.

Sec. 3. Stay of discretionary execution. - Discretionary execution issued under the preceding section may be stayed upon approval by the proper court of a sufficient supersedeas bond filed by the party against whom it is directed, conditioned upon the performance of the judgment or order allowed to be executed in case it shall be finally sustained in whole or in part. The bond thus given may be proceeded against on motion with notice to the surety. (3a)

Q: Now, assuming that there is an execution pending appeal in favor of the plaintiff under Section 2 and I am the defendant, is there a way for me to stop the execution pending appeal?

A: Your remedy is to apply Section 3. The defendant will now ask the court to fix a supersedeas bond to stop the execution pending appeal. The bond will answer for any damages that the plaintiff may suffer if the defendants appeal is not meritorious.

And once the supersedeas bond is filed, the court has to withdraw the execution pending appeal. Supersedeas bond under Section 3 is conditioned upon the performance of the judgment or order allowed to be executed in case it shall be finally sustained in whole or in part.

GENERAL RULE: When a defendant puts up a supersedeas bond, the court shall recall the execution pending appeal because discretionary execution is the exception rather than the general rule.

EXCEPTION: Notwithstanding the filing of the supersedeas bond by the appellant, execution pending appeal may still be granted by the court IF THERE ARE SPECIAL AND COMPELLING REASONS justifying the same outweighing the security offered by the supersedeas bond. (De Leon vs. Soriano, 95 Phil. 806)

EXAMPLE OF EXCEPTION: Judgment for SUPPORT. The same may be executed pending appeal even notwithstanding the filing of a supersedeas bond by the appellant. (De Leon vs. Soriano, 95 Phil. 806) Support is something which should not be delayed. What is the use of the supersedeas bond when the need of the plaintiff is today and not 5 or 6 weeks from now? [aber?]Alright, let us go to the next important classification of execution. The other classification as to the manner of enforcement could be by MOTION or by INDEPENDENT ACTION.

EXECUTION BY MOTION

EXECUTION BY INDEPENDENT ACTIONSec. 6. Execution by motion or by independent action. - A final and executory judgment or order may be executed on motion within five (5) years from the date of its entry. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action. The revived judgment may also be enforced by motion within five (5) years from the date of its entry and thereafter by action before it is barred by the statute of limitations. (6a)

Q: How do you execute a judgment?

A: You file a motion for execution before the same court which rendered the judgment.

Q: How is the execution enforced?

A: There are two 2 modes under Section 6:

1.) Execution by motion within five (5) years from the date of its entry; and

2.) Execution by independent action within five (5) to ten (10) years.

Execution BY MOTION means that the prevailing party shall ask the court to issue a writ of execution by simply filing a motion in the same case.

EXAMPLE: I am the plaintiff and I have a judgment here against the defendant. I do not know of any assets of the defendant because the defendant for the meantime is as poor as a rat. But after a certain period of time he becomes a wealthy man. All I have to do is to file a motion and the court will order the execution, provided the motion is filed within 5 years from the date of the entry of judgment. The date of the entry of judgment and the date of finality are the same (Rule 36, Section 2).

Q: Suppose the defendant becomes rich after 5 years, can I still file a motion to execute?

A: No more, because execution by motion must be filed within 5 years only from the date of its entry. If the judgment was not executed within the 5-year period, the judgment has become dormant.

Q: What is a dormant judgment?

A: A DORMANT judgment is one that was not executed within 5 years.

Q: So, how can that (dormant) judgment be awaken?

A: The procedure is to file another civil action. A civil action for revival of judgment. That is what you call EXECUTION BY INDEPENDENT ACTION which must be filed before it is barred by the statute of limitations. The second sentence states, after the lapse of such time (which is 5 years) and before it is barred by the statute of limitations, a judgment may be enforced by action.Q: When will it be barred by the statute of limitations ?

A: According to Article 1144 of the New Civil Code, the judgment may be enforced only within ten (10) years.

Therefore, since the judgment will be enforced by motion for five (5) years, then after the fifth year, it will be enforced by independent action. So, I will start the civil action for revival of judgment between or after the 5th year but before the 10th year. So, that is what we have to remember.

Q: Do you mean to tell me that I have to file the case all over again, practically repeating what happened 5 years ago?

A: NO, because the judgment in the independent action is a judgment reviving the first judgment.

For example, more than 5 years ago I sued you to collect on a promissory note and you alleged payment, and you lost and the court said that you are liable to me. On the seventh year when I revived that judgment, my rights are no longer based or derived on the promissory note but on such judgment. But you can still invoke other defenses such as lack of jurisdiction, fraud. But you cannot question the correctness of the original judgment because that is already res adjudicata. You are entitled to put up any defense that you have against me provided that you cannot question the correctness of the original judgment. That is the rule.

Q: Discuss briefly the nature of the action for enforcement of a dormant judgment.

A: The action for enforcement of a dormant judgment is an ordinary civil action the object of which is two-fold, namely, (a) to revive the dormant judgment, and (b) to execute the judgment reviving it, if it grants the plaintiff any relief. Hence, the rights of the judgment-creditor depend upon the second judgment. Being an ordinary civil action, it is subject to all defenses, objections and counterclaims which the judgment-debtor may have except that no inquiry can be made as to the merits of the first judgment. Therefore, defenses that do not go to the merits of the first judgment, such as lack of jurisdiction, collusion, fraud, or prescription, may be set sup by the judgment-debtor. (Cia. Gral. De Tabacos vs. Martinez, 17 Phil. 160; Salvante vs. Ubi Cruz, 88 Phil. 236) [Taken from Remedial Law Reviewer by Nuevas]

Q: Give the exception to the rule on dormant judgment.

A: The only exception is the judgment for support which does not become dormant, nor does it prescribe. You can execute it anytime even beyond the 5-year period and any unpaid installment may be executed by motion. (Florendo vs. Organo, 90 Phil. 483) So, even if the judgment is more than 5 years old, the defendant defaulted on the seventh year, you just file a motion to collect that judgment.

Q: Suppose the judgment was executed and the property of the defendant was levied on the 4th year, and the next stage is the auction sale.

A: The SC said the auction sale must also be WITHIN 10 years. So, even if the property was levied, the auction sale must be within 10 years. Not only the levy of the property must be done within 10 years but also the including the auction sale, otherwise, any auction sale done beyond 10 years in null and void.

Now, look at the last sentence in Section 6: The revived judgment may also be enforced by motion within five (5) years from the date of its entry and thereafter by action before it is barred by the statute of limitations.

For example, I have here a judgment nine (9) years ago. I want to enforce it by action to revive judgment. You mean to tell me that the revived judgment is good for another ten (10) years? Another 5 years for motion to a right of action and then I can still revive it within 10 years?

Alright, in the original case of PNB vs. BONDOC (14 SCRA 770), the SC said that the period applies all over again from the finality of the revived judgment. So, you have another ten (10) years. However, this principle is abandoned in the later case of PNB vs. VELOSO (32 SCRA 266), the SC said that the original period is only computed from the date of the original judgment.

And of course, because of those 2 conflicting cases, the court resolved those issues in the case of LUZON SURETY CO. vs. IAC (151 SCRA 652) where the SC said, the later doctrine of VELOSO prevails. So, with that ruling, the 10-year period applies only from the date of the original judgment, but you cannot say that once it is revived, you have another 10 years.

But now, you look at the new law: The revived judgment may also be enforced by motion within five (5) years from the date of its entry and thereafter by action before it is barred by the statute of limitations. Ano yan? That is a revival of the BONDOC ruling! Binalik yung original ruling which is, the revived judgment is good for another 10 years.

So, I repeat, the last sentence has resurrected the ruling in the case of PNB vs. BONDOC and superseded again LUZON vs. IAC. You are entitled to another 10 years from the date of the revived judgment.

ILLUSTRATION:

Example: First judgment became final in 1990. You can enforce that until 2000 by motion (1990-1995) or by independent action (1995 2000). Suppose in 2000, you were able to secure a second judgment reviving the first judgment, under the new rules, there is another ten years. The first judgment by motion. The next 5 years is by independent action. So, to illustrate:

5 years

by motion5 years

by independent action5 years

by motion5 years

by independent action

10 years

Article 1144, Civil Code10 years

last sentence of Section 6

ARCENAS vs. COURT OF APPEALS299 SCRA 733 (December 4, 1998)

HELD: The purpose of the action for revival of a judgment is not to modify the original judgment subject of the action but is merely to give a creditor a new right of enforcement from the date of revival.

The rule seeks to protect judgment creditors from wily and unscrupulous debtors who, in order to evade attachment or execution, cunningly conceal their assets and wait until the statute of limitation sets in.

Sec. 7. Execution in case of death of party. - In case of the death of a party, execution may issue or be enforced in the following manner:

(a)In case of the death of the judgment obligee, upon the application of his executor or administrator, or successor in interest;

(b)In case of the death of the judgment obligor, against his executor or administrator or successor in interest, if the judgment be for the recovery of real or personal property, or the enforcement of a lien thereon;

(c)In case of the death of the judgment obligor, after execution is actually levied upon any of his property, the same may be sold for the satisfaction of the judgment obligation, and the officer making the sale shall account to the corresponding executor or administrator for any surplus in his hands. (7a)

This is related to Rule 3, Section 20.

Q: What is the effect of a death of a party on the execution of a judgment?

A: The following:

1.) If it is the obligee (the creditor) will die after he wins the case, his executor or administrator, his legal representative or his heirs and successors in interest can enforce the judgment. They will be the one to collect. (paragraph [a])

2.) If it is the defendant (obligor) who dies and there is final judgment which is recovery of real or personal property, the judgment is executed against the administrator or executor because this is an action which survives. (paragraph [b]);

3.) Under par. (c), it is the death of the obligor in a money claim. This is related to Rule 3, Section 20. However, the timing of the death is different. Let us connect these with Rule 3, Sec. 20:

Sec. 20. Action on contractual money claims. - When the action is for recovery of money arising from contract, express or implied, and the defendant dies before entry of final judgment in the court in which the action was pending at the time of such death, it shall not be dismissed but shall instead be allowed to continue until entry of final judgment. A favorable judgment obtained by the plaintiff therein shall be enforced in the manner especially provided in these Rules for prosecuting claims against the estate of a deceased person. (21a)

So, for EXAMPLE: A filed a case against B to collect an unpaid loan. What is the effect to the case if B dies? It will depend on what stage of the case he dies. If he died before final judgment could be rendered by the court (before entry of final judgment), there will be a substitution of party and the case will continue until entry of final judgment.

Suppose, there is already entry of final judgment and he dies, it will depend whether there was already a levy on execution. Meaning, there was already entry of final judgment but before the property is levied. This should not apply in Rule 39 because Section 7 [c] states that after execution is levied.

But my question is no levy. The procedure there is found in the Special Proceedings. The judgment shall be enforced in the manner provided for by the Rules on claims against the estate of the deceased under Rule 86. And that is also mentioned in Rule 3, Section 20. It shall be enforced in the manner provided for against the estate.

Q: Suppose the defendant dies when there is already a levy. What will happen?

A: The auction sale will proceed as scheduled in connection with Section 7 [c] because the law says the same may be sold for the satisfaction of the judgment obligation. Meaning, the auction sale or the execution sale shall proceed as scheduled. No more substitution here.

So that question, What is the effect of the death of a party on a pending civil case is a question with so many angles anong klaseng kaso?; is it one which is personal in nature or not?; if it is not, is it one which survives or one which does not?; if it does not survive, who died?; the plaintiff or the defendant? if it is the defendant, did he die before entry of final judgment?; did he die after entry of final judgment but before there could be levy or execution?; or did he die after levy or execution? This last question is answered by Section 7 [c].

Sec. 8. Issuance, form and contents of a writ of execution. - The writ of execution shall:

(1)issue in the name of the Republic of the Philippines from the court which granted the motion;

(2)state the name of the court, the case number and title, the dispositive part of the subject judgment or order; and (3) require the sheriff or other proper officer to whom it is directed to enforce the writ according to its terms, in the manner hereinafter provided:

(a)If the execution be against the property of the judgment obligor, to satisfy the judgment, with interest, out of the real or personal property of such judgment obligor;

(b) If it be against real or personal property in the hands of personal representatives, heirs, devisees, legatees, tenants, or trustees of the judgment obligor, to satisfy the judgment, with interest, out of such property;

(c)If it be for the sale of real or personal property, to sell such property, describing it, and apply the proceeds in conformity with the judgment, the material parts of which shall be recited in the writ of execution.

(d)If it be for the delivery of the possession of real or personal property, to deliver the possession of the same, describing it, to the party entitled thereto, and to satisfy any costs, damages, rents, or profits covered by the judgment out of the personal property of the person against whom it was rendered, and if sufficient personal property cannot be found, then out of the real property; and

(e)In all cases, the writ of execution shall specifically state the amount of the interest, costs, damages, rents, or profits due as of the date of the issuance of the writ, aside from the principal obligation under the judgment. For this purpose, the motion for execution shall specify the amounts of the foregoing reliefs sought by the movant. (8a)

WRIT OF EXECUTION is actually the document which is issued by the court addressed to the sheriff. The writ is actually the instruction to the sheriff on what he should do. It would depend on what kind of decision is it an action for sum of money or is it for recovery of real property? Mimeographed iyan, addressed to the sheriff. These are standard forms in court.

Now, with respect to Section 8, the changes can be found in paragraph [e] which mandates now that the writ of execution must state the exact amount to be collected. That is why according to the last sentence of paragraph [e], for this purpose, the motion for execution shall specify the amounts of the foregoing reliefs sought by the movant.Normally, when lawyers file a motion to execute they will just quote the principal, but they do not state the costs or interests. Now, under the new rule, when you file the motion for execution, you must also state how much is the costs or interests.

EXECUTION OF MONEY JUDGMENT

How do you execute judgment for money? Contractual debts or damages. Example, the defendant is ordered to pay defendant P1 million with interest, how does the sheriff enforce that? Section 9 provides a detailed explanation on how judgment for money is enforced. Let us go over the first paragraph:

Sec. 9.Execution of judgments for money, how enforced. -

(a)Immediate payment on demand. - The officer shall enforce an execution of a judgment for money by demanding from the judgment obligor the immediate payment of the full amount stated in the writ of execution and all lawful fees. The judgment obligor shall pay in cash, certified bank check payable to the judgment obligee, or any other form of payment acceptable to the latter, the amount of the judgment debt under proper receipt directly to the judgment obligee or his authorized representative if present at the time of payment. The lawful fees shall be handed under proper receipt to the executing sheriff who shall turn over the said amount within the same day to the clerk of court of the court that issued the writ.

STEPS: (under paragraph [a])

1.) The sheriff must demand payment from the obligor;

2.) The obligor can pay in cash, certified bank check payable to the judgment obligee (creditor) or any other form of payment acceptable to the latter. Kung sabihin ng obligor: Yung kotse ko na lang. That will be alright so long as it is also alright with the obligee;

3.) The payment shall go to the obligee;

4.) The lawful fees shall be paid to the executing sheriff who shall turn over the said amount within the same day to the clerk of court of the court that issued the writ.

This assumes that the obligee is present with sheriff. Suppose the creditor is not around? Let us go to the second paragraph:

Section 9 [a], 2nd par. If the judgment obligee or his authorized representative is not present to receive payment, the judgment obligor shall deliver the aforesaid payment to the executing sheriff. The latter shall turn over all the amounts coming into his possession within the same day to the clerk of court of the court that issued the writ, or if the same is not practicable, deposit said amounts to a fiduciary account in the nearest government depository bank of the Regional Trial Court of the locality.

If the plaintiff is not there, the payment is made to the sheriff and he is supposed to endorse it to the clerk of court. The clerk of court will look for the obligee to remit the money.

In the second sentence, this usually happens if the execution is to be done outside of the locality. For example, the decision in Davao will be enforced in Cotabato. So, the sheriff in Cotabato will be the one to enforce and he will give the payment to the clerk of court there who in turn will transmit the money to the clerk of court in Davao. This is because the decision to be executed is one in Davao.

Let us go to the third paragraph:The clerk of said court shall thereafter arrange for the remittance of the deposit to the account of the court that issued the writ whose clerk of court shall then deliver said payment to the judgment obligee in satisfaction of the judgment. The excess, if any, shall be delivered to the judgment obligor while the lawful fees shall be retained by the clerk of court for disposition as provided by law. In no case shall the executing sheriff demand that any payment by check be made payable to him.

This assumes that the property of the defendant which was levied in Cotabato but judgment is one which originated in Davao clerk to clerk.

The last sentence says In no case shall the executing sheriff demand that any payment by check be made payable to him. It shall be payable to the obligee. I think what the SC would like to avoid here is that which happened in the case of PAL a labor case where PAL paid check payable to the sheriff. The sheriff ran away with the check. PAL was made to pay all over again.

(b)Satisfaction by levy. - If the judgment obligor cannot pay all or part of the obligation in cash, certified bank check or other mode of payment acceptable to the judgment obligee, the officer shall levy upon the properties of the judgment obligor of every kind and nature whatsoever which may be disposed of for value and not otherwise exempt from execution giving the latter the option to immediately choose which property or part thereof may be levied upon, sufficient to satisfy the judgment. If the judgment obligor does not exercise the option, the officer shall first levy on the personal properties, if any, and then on the real properties if the personal properties are sufficient to answer for the judgment.

So, under paragraph [a], the first step is when the judgment debtor has enough money, bayaran niya in cash or check.

Q: Suppose walang pera, or the cash is not sufficient. What will the sheriff do?

A: He shall levy upon the properties of the judgment obligor not otherwise exempt from execution. In the vernacular term, sasabihing na-sheriff ka.

Q: Define levy.

A: Levy is the act whereby a sheriff sets apart or appropriates, for the purpose of satisfying the command of the writ, a part or the whole of the judgment-debtors property. (Valenzuela vs. De Aguilar, L-18083-84, May 31, 1963) Normally, this is done on personal property. Kung lupa naman, they will annotate on the title. Parang mortgage ba.

Q: What is the importance of levy with respect to execution of a money judgment?

A: Levy is a pre-requisite to the auction sale. In order that an execution sale may be valid, there must be a previous valid levy. A sale not preceded by a valid levy is void and the purchaser acquires no title. (Valenzuela vs. De Aguilar, L-18083-84, May 31, 1963)

Q: What kind of property can be levied?

A: Any real, personal, tangible, intangible except those properties exempt from execution.

Q: Does the debtor has the right to tell the sheriff what property he should levy?

A: YES. The law gives the debtor or defendant the option to immediately choose which property or part thereof may be levied upon sufficient to satisfy the judgment. Example: I am the debtor and I have many properties. And the sheriff would like to levy on my house and lot, or yung Toyota Altis ko. Under the law, I have the right to choose among them.The phrase giving the latter the option to immediately choose which property or part thereof may be levied upon, sufficient to satisfy the judgment. This did not appear under the old law. This is taken from the case of PHILIPPINE MILLS vs. DAYRIT (192 SCRA 177), where the SC said the debtor is given the option of which property shall be levied.

And the sequence of levying is to levy the personal properties first. Then real properties if personal properties are not sufficient.

Under the second paragraph of [b], when the sheriff levies on the property of the judgment debtor and the judgment debtor has more than sufficient property to cover the judgment debt, the sheriff cannot levy all the properties. Or else, he will be made liable. For example, the debt is only P 30,000, tapos ang ilevy mo kotse (Toyota Altis) at bahay, which worth millions? My golly! Thats too much! You sell only up to the point that the judgment will be satisfied.

Q: But if it is real property or intangible personal property like shares of stock, debts, credits (collectibles), can you levy on these?

A: YES. And under the last paragraph of [b] They may be levied upon in like manner and with like effect as under a writ of attachment under Rule 57 on attachment.

GARNISHMENT HOW TO LEVY

Paragraph [c] of Section 9 is on how to levy intangibles. When you want to levy or you want to execute on intangible property, the legal term there is garnishment.(c)Garnishment of debts and credits. - The officer may levy on debts due the judgment obligor and other credits, including bank deposits, financial interests, royalties, commissions and other personal property not capable of manual delivery in the possession or control of third parties. Levy shall be made by serving notice upon the person owing such debts or having in his possession or control such credits to which the judgment obligor is entitled. The garnishment shall cover only such amount as will satisfy the judgment and all lawful fees.

The garnishee shall make a written report to the court within five (5) days from service of the notice of garnishment stating whether or not the judgment obligor has sufficient funds or credits to satisfy the amount of the judgment. If not, the report shall state how much funds or credits the garnishee holds for the judgment obligor. The garnished amount in cash, or certified bank check issued in the name of the judgment obligee, shall be delivered directly to the judgment obligee within ten (10) working days from service of notice on said garnishee requiring such delivery, except the lawful fees which shall be paid directly to the court.

In the event there are two or more garnishees holding deposits or credits sufficient to satisfy the judgment, the judgment obligor, if available, shall have the right to indicate the garnishee or garnishees who shall be required to deliver the amount due; otherwise, the choice shall be made by the judgment obligee.

The executing sheriff shall observe the same procedure under paragraph (a) with respect to delivery of payment to the judgment obligee. (8a, 15a)Q: So, what are these properties which may be the subject of garnishment?

A: Credits which include bank deposits, financial interests, royalties, commissions and other personal property not capable of manual delivery intangibles bah! You send a notice upon the person owing such debts or having in his possession or control such credits. And it shall cover only such amount as will satisfy the judgment.

Example of garnishment: bank account. I will file a case against you, talo ka. I learned that you have a deposit with Sanikoh Bank. Puwede kong habulin yan ba, because that is credit. In obligations and contracts, the relationship of the depositor and the bank is that of a creditor and debtor. It is not a contract of deposit because actually, the bank is borrowing money from you. Kaya nga, it pays you interest eh.

So, under garnishment, the bank is being commanded not to pay you but instead pay the sheriff. Yaan!! Yan ang concept ng garnishment. Garnishee refers to the debtor, like the bank. When the bank deposit is garnished, the second paragraph tell us what the bank will do. And if there are 2 or more banks na ma-garnish, under the next paragraph, the debtor obligor will determine. If he does not exercise his option, then the judgment creditor will determine.

EXECUTION OF JUDGMENT OTHER THAN MONEY

Section 10 is the procedure for executing a judgment other than to collect money. Sometimes, money is only incidental. There are court decisions could be something else like specific performance, or accion publiciana. You are more interested in recovering your property. Another is Unlawful Detainer where unpaid rentals may be paid but the plaintiff is more interested in the ejectment the unpaid rentals can be collected in the same manner as Section 9.

Sec. 10.Execution of judgments of specific act. -

(a) Conveyance, delivery of deeds, or other specific acts; vesting title. - If a judgment directs a party to execute a conveyance of land or personal property, or to deliver deeds or other documents, or to perform any other specific act in connection therewith, and the party fails to comply within the time specified, the court may direct the act to be done at the cost of the disobedient party by some other person appointed by the court and the act when so done shall have like effect as if done by the party. If real or personal property is situated within the Philippines, the court in lieu of directing a conveyance thereof may by an order divest the title of any party and vest it in others, which shall have the force and effect of a conveyance executed in due form of law. (10a)

x x x x x

EXAMPLES of the first sentence:

1.) An action for reconveyance of property where you are asking the defendant, a title owner, to convey to you his property. The property will be held in trust or that the title be in your name instead of his;

2.) Pacto de retro. I sold to you my land and I am repurchasing it, pero ayaw mo. You refuse to execute a deed of sale returning the property to me;

3.) Public Land Law. I am the owner of a property under homestead or free patent and sold it after the prohibition period. Under the public land law, I have the right to repurchase it within 5 years. Ayaw mong ibalik, so idemanda kita. Of course, if I win, you will be directed to return to me the property and execute a deed of sale.

4.) An action for specific performance to compel you to return to me said property. And the court will order: Alright, execute a deed of sale. You refuse. The court may order the clerk of court to sign the deed of sale or the Register of Deeds will be ordered to register the same as if done by the obligor. The obligors signature is not needed.

(b)Sale of real or personal property. - If the judgment be for the sale of real or personal property, to sell such property, describing it, and apply the proceeds in conformity with the judgment. (8 [c] a)

The best example for [b] is an action for termination of co-ownership where there are 50 co-owners of one (1) hectare the property will be ordered sold and the proceeds will be distributed among the co-owners.

(c)Delivery or restitution of real property. - The officer shall demand of the person against whom the judgment for the delivery or restitution of real property is rendered and all persons claiming rights under him to peaceably vacate the property within three (3) working days, and restore possession thereof to the judgment obligee; otherwise, the officer shall oust all such persons therefrom with the assistance, if necessary, or appropriate peace officers, and employing such means as may be reasonably necessary to retake possession, and place the judgment obligee in possession of such property. Any costs, damages, rents or profits awarded by the judgment shall be satisfied in the same manner as a judgment for money. (13a)

Now, with respect to Section 10, particularly paragraph [c] delivery or restitution of real property. this is applicable to actions for forcible entry, unlawful detainer, accion publiciana.

Q: So, what is the procedure?

A: The sheriff will give the defendant the chance to vacate the property, I am giving you the chance to vacate within three (3) working days and restore possession thereof. And then ayaw mo pa rin, I will use force to oust you with the assistance of the appropriate peace officers and place the judgment obligee in possession of such property.

And if there are damages or unpaid rentals, I will also levy the property under Section 9. Because sometimes, aside from ousting the defendant, meron pang money judgment like unpaid rentals. So, the property of the defendant may be levied. That is the procedure.

In the 1995 case of

SAN MANUEL vs. TUPAS

249 SCRA 466

HELD: The immediate enforcement of a writ of ejectment execution is carried out by giving the defendant a notice of such writ and making a demand that defendant comply therewith within a reasonable period, normally from three (3) to five (5) days, and it is only after such period that the sheriff enforces the writ by the bodily removal of the defendant and his personal belongings.

(d)Removal of improvements on property subject of execution. - When the property subject of the execution contains improvements constructed or planted by the judgment obligor or his agent, the officer shall not destroy, demolish or remove said improvements except upon special order of the court, issued upon motion of the judgment obligee after due hearing and after the former has failed to remove the same within a reasonable time fixed by the court. (14a)

Q: When you oust the defendant in regard of a possession case, is a writ of execution a sufficient basis for the removal of improvements of the property?

A: NO. Under paragraph [d], the plaintiff or judgment obligee still have to get a special order from the court by filing a petition to authorize the destruction or removal of the improvements of the property after the defendant is given a reasonable time to remove his shanty or house voluntarily.

In other words, there must be a special order. The writ of execution only authorizes you to oust the defendant physically, but not to destroy any property. Just like in squatters, you need a special order for demolition.

(e)Delivery of personal property. - In judgments for the delivery of personal property, the officer shall take possession of the same and forthwith deliver it to the party entitled thereto and satisfy any judgment for money as therein provided. (8a)

Paragraph [e] is related to REPLEVIN action to recover personal property where the plaintiff is trying to repossess a personal property from the defendant. For example, bili ka ng appliance tapos hindi mo nabayaran, babawiin yan ng appliance center. Or, the finance company or the car dealer will resort to replevin to recover the unit by filing an action for replevin against the buyer.

Take note that the procedure for enforcing a money judgment is different from enforcing a judgment for ejectment, or recovery of possession. Enforcement of money judgment is in Section 9 you get the money. Kung walang money, you levy on the property of the defendant. If it is ejectment or recovery of possession of property, you follow Section 10, paragraph [c].

Now, here is an interesting case involving these two sections (Sections 9 & 10) the 1995 case of

ABINUJAR vs. COURT OF APPEALS

243 SCRA 531

FACTS: The case of Abinujar started when the plaintiff filed a case for unlawful detainer against the Abinujar spouses for the latter to vacate their house in Manila. When the case was going on, the parties executed a compromise agreement which became the basis of the judgment by the court, so a compromise judgment.

The agreement stated that the Abinujar spouses shall pay the plaintiffs the amount specifically agreed upon: P50,000 on January 31; P10,000 on Febrauary 28; P10,000 on March 31, etc. until September 30. It further states that failure on the part of the Abinujar spouses to pay three (3) consecutive payments, the plaintiffs shall be entitled to a writ of execution.

After three (3) months, the plaintiffs filed a motion for execution on the ground that the Abinujars failed to pay the three installments. The trial court granted the motion and the notice to the defendant to voluntarily vacate the premises was served on the Abinujars.

The Abinujars attacked the validity of the sheriffs notice to vacate by way of enforcing the compromise judgment. They maintained that their obligation is monetary and therefore you should apply Section 9 you collect but do not eject us. The plaintiffs argued that what is applicable is Section 10 on ejectment because this is an unlawful detainer case.

ISSUE: Which section shall be applied Section 9? or Section 10?

HELD: The contention of the Abinujars is meritorious meaning, you cannot eject the Abinujars.

When the parties entered into a compromise agreement, the original action for ejectment was set aside and the action was changed to a monetary obligation.

A perusal of the compromise agreement signed by the parties and approved by the inferior court merely provided that in case the Abinujars failed to pay three monthly installments, the plaintiffs would be entitled to a writ of execution, without specifying what the subject of execution would be. Said agreement did not state that Abinujars would be evicted from the premises subject of the suit in case of any default in complying with their obligation thereunder. This was the result of the careless drafting thereof for which only plaintiffs were to be blamed.

As Abinujars obligation under the compromise agreement as approved by the court was monetary in nature, plaintiffs can avail only of the writ of execution provided in Section 9, and not that provided in Section 10.

ORDINARY AND SPECIAL JUDGMENT

Sec. 11.Execution of special judgments. - When a judgment requires the performance of any act other than those mentioned in the two preceding sections, a certified copy of the judgment shall be attached to the writ of execution and shall be served by the officer upon the party against whom the same is rendered, or upon any other person required thereby, or by law, to obey the same, and such party or person may be punished for contempt if he disobeys such judgment. (9a)

There are two (2) types of judgment under the law: (1) SPECIAL and (2) ORDINARY.

ORDINARY JUDGMENT - if the judgment orders the defendant to pay money, like a collection case (Section 9) or to deliver real or personal property (Section 10).

SPECIAL JUDGMENT is a judgment which requires the defendant to perform an act other than payment of money or delivery of property. It refers to a specific act which a party or person must personally do because his personal qualifications and circumstances have been taken into consideration.

EXAMPLE of a special judgment: Usurpation of government office. You are the city treasurer and somebody else is appointed city treasurer and you refuse to vacate. So there will be a quo warranto proceeding. Then the judgment will order you to vacate your position, such judgment is a special judgment because you are not ordered to pay anything nor deliver property.

Q: What is the difference between the Ordinary and Special judgments?

A: A special judgment may be enforced by contempt if the defendant refuses to comply with the judgment. But if it is an ordinary judgment and the defendant refuses to comply, it is not a ground for contempt.

Under Section 9, if the judgment-debtor refuses to pay his debt, you cannot cite him in contempt because under the Constitution, no person shall be imprisoned for debt. The correct procedure under Section 9 is you look for properties of the defendant and then ipa-levy mo. You do not send the debtor to jail.

Under Section 10 if the squatter refuses to vacate, you cannot cite him in contempt and send him to jail. Kung ayaw, you get police for back up. That is the procedure.

But under Section 11, if defendant is ordered to vacate his office because he is no longer the city treasurer, the plaintiff can have him arrested and brought to jail because that is a special judgment which can be enforced by contempt.

Q: Give a specific rule on special judgment.

A: Section 9 of Rule 65 Special Civil Action for Certiorari, Prohibition and Mandamus, to wit:

Rule 65, Sec 9. Service and enforcement of order or judgment. A certified copy of the judgment rendered in accordance with the last preceding section shall be served upon the court, quasijudicial agency, tribunal, corporation, board, officer or person concerned in such manner as the court may direct, and disobedience thereto shall be punished as contempt. An execution may issue for any damages or costs awarded in accordance with section 1 of Rule 39. (9a)

Therefore, a judgement in a certiorari, prohibition or mandamus case, if not complied with, is punishable by contempt.

Sec. 12.Effect of levy on execution as to third persons. - The levy on execution shall create a lien in favor of the judgment obligee over the right, title and interest of the judgment obligor in such property at the time of the levy, subject to liens and encumbrances then existing. (16a)

This is related to Property Registration Decree.

EXAMPLE: I own a piece of land which I mortgaged with the bank. The bank annotated the mortgage on my title. My land is now subject to a lien or an encumbrance. I also owe money to A. He sued me. He won and my land is levied.

Q: What happens to the mortgage lien of the bank? Will it be affected by the levy of A?

A: NO. Even if the property is sold at public auction and we will assume that it will go to A, that property is still under mortgage. A has to respect the lien nauna yung sa bank eh! Wherever the property goes, it is subject to the mortgage lien of the bank because the banks lien is superior.

Therefore, an execution is always subject to the liens and encumbrances of the property then existing.

PROPERTIES EXEMPT FROM EXECUTION

We already discussed the rule that to satisfy a money judgment, the sheriff can levy on the properties of the judgment obligor. All properties are subject, except those exempt from execution. What are the properties of a defendant-debtor which cannot be subject to a levy or execution?

Sec. 13. Property exempt from execution. - Except as otherwise expressly provided by law, the following property, and no other, shall be exempt from execution:

(a) The judgment obligor's family home as provided by law, or the homestead in which he resides, and land necessarily used in connection therewith;

You have a house where your family resides. You call it FAMILY HOME it is the house where the members of the family reside, including the lot.

Q: For instance, you lost in a case where you are liable for P200T. You have no other property left except that house where you live. Can the sheriff levy the house to answer such obligations?

A: NO. The judgment obligors family home and the land necessarily used in connection therewith is exempt. That is a guarantee that no matter how many obligations you have, there is no way for you to be thrown to the street to be a homeless person. Your house cannot be levied; but in the Family Code, theres a limit, if your house is a mansion worth millions, that is not exempt. Please review your Family Code on this matter.

(b) Ordinary tools and implements personally used by him in his trade, employment, or livelihood;

This is self-explanatory. If you are a carpenter, you earn your living by being a carpenter. What are the ordinary tools that you must have? Saw, hammer, etc. By public policy and by legal provision, the tools and implements used by a carpenter in his trade, employment, or livelihood cannot be levied by the sheriff.

Under the prior law, there was no word ordinary and personally. The old law says, tools and implements used by him. In the new rules, the words ordinary and personally are added. What is the reason behind this? This provision is in accordance with what the SC ruled in the 1990 case of

PENTAGON SECURITY vs. JIMENEZ

192 SCRA 492

FACTS: The Pentagon Security and Investigation Agency (PSIA) is a security agency owned by somebody who is engaged in security services. Because of a money judgment against the agency in a labor case, the sheriff levied all the firearms of the agency. PSIA claimed that the firearms are exempt from execution under paragraph [b] since they are tools and implements used by the agency in its trade, employment or livelihood because how can a security agency operate without firearms.

ISSUE: Is the argument of PSIA correct?

HELD: NO. The firearms owned by PSIA are not covered by the exemption.

The term tools and implements refers to instruments of husbandry or manual labor needed by an artisan craftsman or laborer to obtain his living. Here, PSIA is a business enterprise. It does not use the firearms personally, but they are used by its employees. Not being a natural person, petitioner cannot claim that the firearms are necessary for its livelihood.

It would appear that the exemption contemplated by the provision involved is personal, available only to a natural person, such as a dentists dental chair and electric fan. If properties used in business are exempt from execution, there can hardly be an instance when a judgment claim can be enforced against the business entity.

Meaning, if the exemption is extended to a juridical person like a corporation, then practically all the properties needed by the business could be considered as tools and implements. For EXAMPLE, you will sue a carrier like Bachelor Bus and you won. Then you will levy on the bus. Bachelor will claims exemption because that is a tool or implement.

Or, you file a case against PAL. They lost. You levy on the airbus. PAL alleged exemption because it is a tool or implement. My golly! Lahat ng properties, tools or implements!? Di pwede yan! That is not what the law contemplates.

Now, what is interesting in the PENTAGON case is that the SC says that firearms can be levied, they can be sold at public auction. SC: However, for security reasons, and to prevent the possibility that the firearms to be sold at the execution sale may fall into the hands of lawless and subversive elements, the sale at public auction should be with the prior clearance and under supervision of the PNP. Otherwise, the persons who might bid are kidnappers, NPA, Abu Sayyaff, (Kuratong Baleleng, MILF, MNLF, Lost Command, Kulto Pinish, Polgas, PAOCTF, Osama bin Laden et al, etc.) So, there must be a prior clearance on the sale of the firearms during the auction sale.

(c)Three horses, or three cows, or three carabaos, or other beasts of burden, such as the judgment obligor may select necessarily used by him in his ordinary occupation;

For example, you are a farmer. You plow your land by a carabao. You cannot levy the carabao. OR, if you are a cochero, you have a horse for your caretela. You cannot levy the horse. [ang horse shit, pwede! Pero yung horse mismo, di pwede!] And under the prior rules, only 2 horses, 2 cows or carabaos are exempt. The new rules make it three (3).

(d)His necessary clothi