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GEOLOGISTICS v. GATEWAY ELECTRONICS CORPORATION

FACTS:

Geologistics, Inc. (formerly known as LEP International Philippines, Inc.) filed a case for the recovery of money against Gateway Electronic Corporation before the RTC of Parañaque. The RTC issued a writ of preliminary attachment on Gateway's properties, and the surety for Gateway filed a counter-bond. After a hearing, the RTC ordered Gateway to pay Geologistics the claimed amount, including interest, damages, and attorney's fees. Geologistics filed a motion for execution pending appeal, which the RTC granted. Gateway and the surety separately filed petitions for certiorari before the Court of Appeals, seeking to annul the RTC orders and the writ of execution. The Court of Appeals granted their petitions and ordered Geologistics to return the garnished amount to the surety. Geologistics filed a motion for reconsideration, while the surety sought to modify the decision to include an award of interest. The Court of Appeals subsequently promulgated an amended decision.

ISSUES:

  1. Whether there is a sufficient ground to warrant the discretionary execution of the RTC decision pending appeal.

  2. Whether the respondent Gateway's alleged admission of liability can be considered a "good reason" for the discretionary execution.

  3. Whether the Court of Appeals should have ordered the discretionary execution of the amount admitted by respondent Gateway in the certiorari proceeding.

  4. Whether the Court of Appeals erred in declaring that respondent Gateway's principal liability would be offset by its counterclaim for the recovery of goods.

  5. Whether the filing of a motion for reconsideration is a requirement for the appellate court to acquire jurisdiction over a petition for certiorari, prohibition, and mandamus.

RULING:

  1. The Court of Appeals ruled that there is no sufficient ground to warrant the discretionary execution of the RTC decision pending appeal. The decision of the RTC to allow the execution pending appeal was based on the fact that the case had been pending since 1997 and the alleged admission of liability by respondent Gateway, which the Court of Appeals found to be unsupported by the evidence on record.

  2. The Court emphasized that the determination of what constitutes a "good reason" for discretionary execution is within the sound discretion of the trial court. The alleged admission of liability by respondent Gateway cannot be considered a "good reason" since the issue of liability is precisely the reason the case was appealed. The exact amount of liability is still disputed, and the alleged admission only pertains to a different amount.

  3. The Court held that the fact that respondent Gateway admitted a different amount of liability in the certiorari proceeding is not a "good reason" to order discretionary execution. The appeal process must be allowed to take its course to determine once and for all the incidents of the suit.

  4. The Court ruled that the controversy regarding respondent Gateway's principal liability and its counterclaim should be properly ventilated on appeal. Allowing execution pending appeal would render nugatory the decision of the Court of Appeals.

  5. The Court found that the filing of a motion for reconsideration was properly dispensed with in this case since the issue of validity of the execution pending appeal is a pure question of law. Furthermore, respondent Gateway had already implemented the assailed order, leaving it with no plain, speedy, and adequate remedy other than to file the petition for certiorari, prohibition, and mandamus.

PRINCIPLES:

  • Discretionary execution of appealed judgments may be allowed upon the concurrence of the following requisites: (a) there must be a motion by the prevailing party with notice to the adverse party; (b) there must be a good reason for execution pending appeal; and (c) the good reason must be stated in a special order. The existence of good reasons is essential since the execution of a judgment pending appeal is an exception to the general rule. The determination of what constitutes a "good reason" is within the sound discretion of the trial court.

  • The grounds cited for discretionary execution must be exceptional circumstances of such urgency that outweigh the possible injury or damage to the losing party if the appealed judgment is later reversed.

  • The Rules of Court does not provide a specific list or examples of "good reasons" for discretionary execution, and it is up to the trial court to exercise its discretion based on its own judgment, conscience, sense of justice, and equity.

  • Discretionary execution should not be granted based solely on the admission of liability in a certiorari proceeding. The appeal process must be allowed to determine the incidents of the suit.

  • Controversies regarding liability and counterclaims should be properly ventilated on appeal.

  • The filing of a motion for reconsideration is not always a requirement for the appellate court to acquire jurisdiction over a petition for certiorari, prohibition, and mandamus. Exceptions include when the issue raised is purely a question of law or when urgency is involved.