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Fortune Life Vs CA
Fortune Life Vs CA
SUPREME COURT
Manila
SECOND DIVISION
NOCON, J.:
This is a petition for review on certiorari seeking reversal of the decision of public
respondent Court of Appeals, dated February 7, 1991, in CA-G.R. SP No. 21046; and
its resolution dated August 12, 1991. 1
In Civil Case No. 85-29991, entitled "Delsan Transport Lines, Inc. v. Fortune Life and
General Insurance Company, Inc.," the Regional Trial Court of Manila rendered
judgment dated November 21, 1985, in favor of the plaintiff, the dispositive portion of
which reads:
SO ORDERED. 2
On December 11, 1985, private respondent Delsan Transport Lines, Inc. filed a motion
for execution pending appeal. It invoked as "good reason" petitioner's alleged fraud and
deceit in not informing the former of the latter's change in corporate name. Its motion
was supported by a bond which states, in relevant portion:
The motion was opposed by petitioner. While the motion was pending, or on December
20, 1985, petitioner filed its notice of appeal.
On January 2, 1986, the trial court issued a writ of execution pending appeal. Petitioner
filed a motion for reconsideration but this was denied. The Sheriff garnished its bank
deposit and levied upon its properties. Petitioner then filed a petition for certiorari before
the Court of Appeals. The trial Court's order granting the writ of execution pending
appeal was set aside on the ground that, inter alia, the alleged "good reason" of private
respondent was sufficient to justify the issuance of said writ. This Court affirmed the
action of the Court of Appeals in G.R. No. L-75461.
On August 16, 1986, petitioner filed before the trial court an application for damages
against the bond and private respondent. This was opposed by private respondent,
citing Section 5, Rule 39 of the Rules of Court which provides:
Factual background of the case which gave rise to this application for
damages, show that a decision was rendered by the Court against the
herein defendant, and on December 20, 1985, the latter filed its Notice of
appeal; a motion for execution pending appeal, was filed by the plaintiff
and on December 11, 1985, the plaintiff offered to post a bond in support
of its motion for execution pending appeal, conditioned "to answer for any
damages which the defendant may suffer by reason of the execution . . .";
that on the basis of the said offer, the Court granted execution pending
appeal in its Order of January 2, 1986, fixing the amount of the bond at
P500,000.00; on March 31, 1986 the plaintiff filed a surety bond which,
however, is different in tenor and condition from what the plaintiff offered.
The Court, laboring under the terms of plaintiff's motion, issued a writ of
execution pending appeal. The said variance in the conditions between
the bond offered to be file and that which was actually filed remains
unexplained, in fact they discovered said variance only after this
application was filed. The Court needs to receive evidence to enable it
resolve the issue whether or not, such bond filed should answer for any
damages sustained, and if in the affirmative, the extent of such damages.
The resolution of the said application for damages at this stage will
facilitate the conclusion of the entire case for all parties, in that any appeal
will comprehend in a single instance the incident at bar along with the
main case, which also will be economical in money and in time for the
parties and the courts as well.
The Court therefore resolves to receive evidence against the plaintiff and
the First Integrated Bonding, Co., Inc., on the application for damages. 4
The trial court then proceeded to receive petitioners evidence, having issued an order
on December 18, 1989, ruling that private respondent had waived its right to cross-
examine petitioner's witness. Private respondent filed a motion for reconsideration
which was denied on February 6, 1990.
On March 5, 1990, private respondent filed another motion for reconsideration assailing
the trial court's jurisdiction in issuing the orders dated August 11, 1988, December 18,
1989 and February 6, 1990. It prayed that records of the case be elevated immediately
to the appellate court pursuant to the notice of appeal which was filed by petitioner.
On May 15, 1990, the trial court denied private respondent's motion, based on the
following:
Submitted for the Court's resolution, is a Motion for Reconsideration dated
March 5, 1990 filed by plaintiff alleging that appeal having been perfected,
this Court has already lost jurisdiction to entertain defendant's Application
for Damages filed on August 16, 1986, so that all orders of this Court
relative to said application, more particularly the orders dated August 11,
1988, December 18, 1989 and February 6, 1990 should be set aside as
null and void.
The Court agrees with the defendant's statement on what the rule is in
(sic) respect to proceedings to claim damages on a bond. More
appropriately since the records of the case are still with the Court and
have not been elevated to the Court of Appeals.
The Supreme Court has already ruled with finality on the impropriety of the
levy of execution pending appeal on defendant's properties. This Court as
far back as its order of September 9, 1988 had already declared that the
resolution of the said application for damages will facilitate the conclusion
of the entire case for all parties any appeal will encompass the main
case as well as the present incident to pave the way for a single decision
of all litigated issues. The former counsel and all the parties have even
agreed to this procedure for reasons above stated. This is in accord with
law and jurisdiction, not to mention sound procedural policy. 5
SO ORDERED. 6
For lack of merit, the motion for reconsideration was denied in its resolution dated
August 12, 1991. 7
The sole issue raised herein is: upon perfection of petitioner's appeal of the trial court's
decision, does said court retain jurisdiction to hear the application for damages against
the bond that was posted in support of private respondent's motion for execution
pending appeal?
Petitioner insists that even upon perfection of its appeal from the decision on the merits,
the trial court retains jurisdiction to hear its application for damages. The general rule is,
petitioner states, once the appeal from a trial court judgment has been perfected said
court loses jurisdiction over the case. By way of exception, it retains jurisdiction, inter
alia, to issue orders for the protection and preservation of the rights of the parties which
do not involve any matter litigated by the appeal. Under the facts of this case, upon
perfection of the appeal to respondent court, the trial court lost its jurisdiction over the
case only insofar as the subject matter of the appeal is concerned but not the right of
petitioner to recover damages against the bond. The cause of action in the first is the
occurrence of the risk insured under the marine policy whereas in the second, it is the
breach of the condition in the bond, to wit: "to answer for any damages which the
defendant may suffer by reason of the execution." Granting arguendo that the trial court
lacked jurisdiction to entertain the claim for damages, private respondent is estopped by
laches from raising the same.
The decision and resolution of respondent court, which petitioner asks this Court to set
aside, deserve our affirmance.
It is, moreover, clear that the pursuit of damages against the bond posted
by the petitioner in this case, is a futile undertaking for by its express
language, approved by the respondent court, the bond may only be
answerable in damages where two conditions concur: one, that judgment
has, in fact, been rendered on appeal, and second, that the judgment
appealed from has been reversed on appeal. The very proceedings before
the respondent court, now sought to be struck down, are the very reason
preventing the realization of these conditions. 10
Thus, the trial court had no more jurisdiction to issue the disputed orders inasmuch as
the case had already come under the exclusive appellate jurisdiction of respondent
court.
Nor are we inclined to sanction the application of the doctrine of estoppel by laches to
the prejudice of private respondent. This doctrine is an equitable principle applied to
promote but never to defeat justice. 11 It should be noted private respondent opposed
petitioner's application for damages by citing Section 5, Rule 39 of the Rules of Court
and, in effect, questioning the trial court's jurisdiction thereon. Additionally, private
respondent set up the defense of lack of jurisdiction, in its motion for reconsideration
dated March 5, 1990. There was no unreasonable delay by private respondent in
assailing the jurisdiction of the trial court. Adherence to our exceptional ruling in Tijam v.
Sibonghanoy 12 and other cases is unwarranted. Instead, we uphold the fundamental
rule that a court of justice could only validly act upon a cause of action or subject matter
of a case over which it has jurisdiction and said jurisdiction is one conferred by law, and
cannot be acquired through, or waived by any act or omission of the parties. 13
WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals
dated February 7, 1991 and its resolution dated August 12, 1991 are AFFIRMED.
SO ORDERED.