Romualdez vs. Court of Appeals

Execution pending appeal is an extraordinary remedy that may be granted only upon a good reason consisting of superior circumstances demanding urgency; absent such reason, its allowance constitutes grave abuse of discretion. A petition to perpetuate testimony cannot be granted where it lacks allegations of the deponent's personal knowledge and amounts to a fishing expedition, especially where it would invade the marital privilege under Section 24, Rule 130 of the Rules of Court.

FPHC formerly owned 6,299,177 PCIB shares. The PCGG sequestered those shares in 1986 as alleged ill-gotten wealth of Benjamin "Koko" Romualdez, petitioner's husband, and later included them in Civil Case No. 0035 before the Sandiganbayan. FPHC sought to intervene in that case to recover the shares, while petitioner is Benjamin's widow and heir. The present consolidated petitions stem from FPHC's separate petition before the RTC of Makati to perpetuate petitioner's testimony for use in the Sandiganbayan proceedings.

FPHC formerly owned 6,299,177 shares in the Philippine Commercial and Industrial Bank (PCIB shares). It sold those shares to Trans Middle East (Phils.) Equities, Inc. (TMEE) and one of TMEE's incorporators, Edilberto S. Narciso, Jr. In 1986, the Republic of the Philippines, through the PCGG, sequestered the PCIB shares as these were deemed ill-gotten wealth of their beneficial owner, Benjamin "Koko" Romualdez, petitioner's husband. A year later, the PCGG included the PCIB shares in the list of properties covered by its complaint for Reconveyance, Reversion, Accounting, Restitution, and Damages filed against petitioner and Benjamin before the Sandiganbayan. The complaint was docketed as Civil Case No. 0035, and its third amended complaint was filed on 22 January 1988.

FPHC filed a motion for leave to intervene and to admit complaint-in-intervention, praying that the sale of the PCIB shares to TMEE be annulled and that the shares be returned to FPHC. FPHC alleged that its dummy board, formed through the machinations of Benjamin, illegally sold the PCIB shares to TMEE and Narciso without real consideration, and that TMEE and Narciso were also dummies of Benjamin. The Sandiganbayan dismissed the complaint on the ground of prescription. The dismissal became final after the Court affirmed the same in its Decision dated 04 December 2009 in the case entitled First Philippine Holdings Corp. vs. Trans Middle East (Phils.) Equities, Inc., docketed as G.R. No. 179505.

FPHC filed a second complaint-in-intervention dated 08 September 2012. This time, it alleged that in case the PCIB shares were found to be ill-gotten wealth, the PCGG had the legal and moral obligation to return them to FPHC as their rightful owner. The Sandiganbayan dismissed the second complaint on the ground that the cause of action was similar to that in the first complaint-in-intervention. Consequently, FPHC filed a petition for review on certiorari with the Court, later docketed as G.R. No. 205186.

During the pendency of said petition, FPHC filed before the RTC a petition to perpetuate the testimony of petitioner, Benjamin's widow. In the petition, FPHC alleged that the Sandiganbayan had not yet conducted pre-trial proceedings after almost three decades; that petitioner was 82 years old and a material witness; that she had personal knowledge of the circumstances of the acquisition of ill-gotten wealth by her and her husband, including the subject Sequestered BDO shares, then in the form of PCIB shares from FPH to TMEE and Narciso; that after Benjamin's passing, petitioner inherited a substantial portion of the shares and apparently sold or transferred them to third parties in defiance of the Sandiganbayan Resolution dated 08 October 2007 placing the shares in custodia legis; and that recovery by the State would prove exceedingly difficult. FPHC further alleged that petitioner's advanced age and the uncertainties of time might later make her unavailable or prejudicially affect her ability to testify before the Sandiganbayan, making perpetuation necessary.

Petitioner opposed the petition, while the PCGG filed a manifestation stating that it was not objecting to the taking of petitioner's deposition. The RTC granted FPHC's petition, holding that the perpetuation of petitioner's testimony may prevent a failure or delay of justice since she was already of advanced age, and noting the lack of objection on the part of the State. The RTC also ruled that perpetuation would not cause substantial prejudice or disadvantage to petitioner because the subject matter of the expected action and the facts sought to be elicited from her had already been disclosed to her during the hearing, the prayers in the petition were focused only on preserving her testimony as to her age and physical condition, and the order to take her deposition was not a blanket authority for FPHC to ask any question.

The PCIB shares were registered in the name of TMEE, not Benjamin and not petitioner. FPHC's petition did not allege the ultimate facts on how petitioner knew the manner by which TMEE acquired the shares from FPHC's alleged dummy board, nor did it allege petitioner's actual participation in the negotiation and purchase of the PCIB shares. Petitioner's only connection to the PCIB shares was her relationship with her late husband, Benjamin, the alleged beneficial owner. Prior to the filing of the petition, the third amended complaint in Civil Case No. 0035 had been dismissed by the Sandiganbayan in its Decision dated 25 January 2010 because of the PCGG's failure to sufficiently allege that TMEE, as well as its shares of stock, were part of the ill-gotten wealth of Benjamin; the Court affirmed that dismissal with finality in G.R. No. 192653. The Court also found in Trans Middle East that the PCGG's own allegation established that the money used for acquisition of the shares came from PCIB and Philippine Commercial Capital, Inc. after SOLOIL, Inc., acting in behalf of TMEE, obtained a loan from PCIB and PCCI, and that the List of Assets and Other Property of Benjamin marked as Annex "A" in the PCGG's third amended complaint indicated that TMEE was not part of the properties owned and controlled by Benjamin.

• Jurisdiction: Petitioner argued that FPHC erroneously filed its petition to perpetuate her testimony before the RTC; the RTC lacked jurisdiction because the real purpose was to use the testimony in the ongoing Civil Case No. 0035, and with that case and FPHC's petition for review pending, FPHC should have filed before the Sandiganbayan a motion to perpetuate her testimony under Section 7, Rule 24 of the Rules of Court.
• Interference with Coordinate Court: Petitioner asserted that the CA violated the long-standing doctrine that no court has the power to interfere with the judgments and decrees of a court of concurrent or coordinate jurisdiction, since the Sandiganbayan first acquired jurisdiction over Civil Case No. 0035.
• Execution Pending Appeal: Petitioner sought to nullify the CA's Resolutions allowing execution pending appeal of the RTC's twin Orders, challenging the allowance as improper.
• Protective Order: Petitioner moved for a protective order, alleging that she was medically diagnosed with dementia of the Alzheimer's type in 2010 and that her doctor was of the view that she was unable to comprehend legal issues or procedures and should avoid any type of mental stress that could lead to her emotional breakdown or affect her health.

• Necessity of Perpetuation: FPHC alleged that petitioner was a material witness and that without her testimony, FPHC could not safely and intelligently proceed to trial against her and the other potential adverse parties.
• Personal Knowledge: FPHC alleged that petitioner, as Benjamin's wife and widow, had personal knowledge of the circumstances of the acquisition of ill-gotten wealth by her and her husband, including the PCIB shares acquired from FPHC by TMEE and Narciso.
• Advanced Age and Unavailability: FPHC alleged that petitioner was 82 years old and that the uncertainties of time might later make her unavailable or prejudicially affect her ability to testify before the Sandiganbayan, so perpetuation was necessary to preserve her testimony.
• Risk of Transfer: FPHC alleged that petitioner inherited a substantial portion of the shares and had apparently sold or transferred them to third parties in defiance of the Sandiganbayan Resolution dated 08 October 2007 placing the shares in custodia legis, making recovery by the State exceedingly difficult.
• Execution Pending Appeal: FPHC moved for execution pending appeal, and the CA agreed that petitioner's old age and frail physical condition were good reasons because delay might render the RTC's Order nugatory.
• PCGG Non-Objection: The PCGG filed a manifestation stating that it was not objecting to the taking of petitioner's deposition.

• Grave Abuse of Discretion in Execution Pending Appeal: Whether the CA committed grave abuse of discretion in allowing execution pending appeal of the RTC's Orders granting the petition to perpetuate the testimony of petitioner.
• Jurisdiction over Petition to Perpetuate Testimony: Whether the RTC lacked jurisdiction to take cognizance and dispose of FPHC's petition.
• Basis of Petition to Perpetuate Testimony: Whether FPHC's petition to perpetuate the testimony of petitioner has basis.

• Grave Abuse of Discretion in Execution Pending Appeal: Yes. The CA gravely abused its discretion in allowing execution pending appeal because no good reason existed; execution pending appeal requires a motion by the prevailing party, a good reason, and a special order stating that reason, and the good reason must consist of superior circumstances demanding urgency.
• Jurisdiction over Petition to Perpetuate Testimony: Not resolved. The Court held that even assuming the RTC had jurisdiction over the petition, the CA still erred in affirming the RTC's ruling.
• Basis of Petition to Perpetuate Testimony: No. The petition was utterly devoid of merit; it was a fishing expedition and would require petitioner to disclose confidential marital communications.

• Grave Abuse of Discretion in Execution Pending Appeal: Execution pending appeal is an extraordinary remedy, usually not favored because it affects rights yet to be ascertained on appeal. It requires (a) a motion by the prevailing party, (b) a good reason for issuing the writ, and (c) the good reason stated in a special order. The reason must constitute superior circumstances demanding urgency that outweigh the injury or damages should the losing party secure a reversal. The CA allowed execution pending appeal based on petitioner's old age and frail physical condition, reasoning that delay could render the RTC Order nugatory. The Court found that the CA acted on a myopic reading of facts heavily skewed in favor of FPHC. The CA failed to consider that FPHC's complaints-in-intervention had been denied twice by the Sandiganbayan on prescription, and that the Court had affirmed with finality the first Sandiganbayan ruling against FPHC's right of action to assail the validity of TMEE's acquisition of the PCIB shares. These facts should have prompted the CA to assess the merits of FPHC's motion more carefully. The PCIB shares were registered in TMEE's name, not Benjamin's or petitioner's. At the time FPHC filed its motion in 2015, its petition no longer had factual and legal mooring because the third amended complaint, which impleaded TMEE in Civil Case No. 0035, had been dismissed by the Sandiganbayan on 25 January 2010 for the PCGG's failure to sufficiently allege that TMEE and its shares were part of Benjamin's ill-gotten wealth; the Court affirmed that dismissal with finality in G.R. No. 192653. Consequently, the PCIB shares were no longer part of Civil Case No. 0035, and petitioner could not participate in that case. There was no good reason to hasten the perpetuation of petitioner's testimony; sound discretion dictated that the CA instead speed up resolution of the appeal.
• Jurisdiction over Petition to Perpetuate Testimony: The CA ruled that under Section 1, Rule 24 of the Rules of Court, the RTC had jurisdiction because the petition was filed in petitioner's place of residence in Makati City. Petitioner insisted that under Section 7, Rule 24, the Sandiganbayan had jurisdiction because of the pending appeal of the Sandiganbayan's decision denying FPHC's complaint-in-intervention. The Court held that even assuming the RTC had jurisdiction, the CA nevertheless erred in affirming the RTC's ruling to allow perpetuation because the petition was utterly devoid of merit.
• Basis of Petition to Perpetuate Testimony: The subject matter of FPHC's petition were the PCIB shares allegedly obtained through fraudulent means from FPHC by TMEE, which FPHC claimed was a dummy corporation created through Benjamin's instance. After Benjamin's death, FPHC anchored its pursuit to invalidate the sale on petitioner's testimony as Benjamin's wife, widow, and heir. However, the PCIB shares were registered in TMEE's name, and there was no showing that petitioner was part of TMEE. FPHC's petition failed to allege ultimate facts on how petitioner knew the manner by which TMEE acquired the shares from FPHC's alleged dummy board, and did not allege petitioner's actual participation in the negotiation and purchase. Petitioner's only connection to the shares was her relationship with Benjamin. Because FPHC insisted the shares were Benjamin's ill-gotten wealth without proof of petitioner's actual knowledge of the alleged fraudulent acquisition, examining her would require her to disclose communications received in confidence from Benjamin regarding the shares, which is proscribed by the marital privilege rule under Section 24, Rule 130 of the Rules of Court. FPHC also failed to show Benjamin had any association with the shares. In Trans Middle East, the Court found that the PCGG's own allegation established the money used to acquire the shares came from PCIB and Philippine Commercial Capital, Inc. after SOLOIL, Inc., acting for TMEE, obtained a loan, and that the List of Assets and Other Property of Benjamin marked as Annex "A" in the PCGG's third amended complaint indicated TMEE was not part of properties owned and controlled by Benjamin. With no link between TMEE and Romualdez, FPHC's posture that the shares were Benjamin's ill-gotten wealth was without factual basis. FPHC's petition was a classic fishing expedition; FPHC effectively admitted its fraud allegation was weak by saying only petitioner's testimony would allow it to safely and intelligently proceed to trial. The petition was also a desperate attempt to find a friendly court to entertain its narrative and continue a lost cause. Even before the petition was filed, the PCIB shares were no longer part of Civil Case No. 0035 due to the dismissal against TMEE. FPHC's petition assailing the dismissal of its second complaint-in-intervention was already dismissed by the Court in G.R. No. 205186, where the Court held that FPHC's manner of establishing ownership by rehashing its fraud cause of action had long prescribed.

• Execution Pending Appeal — Execution pending appeal is an extraordinary remedy, usually not favored because it affects the rights of the parties which are yet to be ascertained on appeal. It requires: (a) a motion therefor by the prevailing party; (b) a good reason for issuing the writ; and (c) the good reason stated in a special order. The good reason must constitute superior circumstances demanding urgency which will outweigh the injury or damages should the losing party secure a reversal of the judgment. The Court applied this doctrine in ruling that the CA gravely abused its discretion because no such good reason existed; the CA failed to consider that FPHC's complaints-in-intervention had been dismissed and that the PCIB shares were no longer part of Civil Case No. 0035.
• Grave Abuse of Discretion — Grave abuse of discretion refers to a capricious, whimsical, arbitrary, or despotic exercise of jurisdiction equivalent to lack of jurisdiction, or a patent and gross evasion of positive duty or virtual refusal to perform a duty enjoined by law. It may also refer to a gross misapprehension of facts. The Court applied this doctrine to the CA's allowance of execution pending appeal, finding that the CA haphazardly ruled on a myopic reading of facts skewed in favor of FPHC.
• Perpetuation of Testimony; Fishing Expedition — A petition to perpetuate testimony must have a factual and legal basis and must allege ultimate facts showing the deponent's personal knowledge of the matters sought to be preserved. It cannot be used as a fishing expedition to explore for evidence. The Court applied this doctrine in denying FPHC's petition because FPHC failed to allege how petitioner knew of TMEE's acquisition of the PCIB shares or her actual participation in the negotiation and purchase; her only connection was her relationship with Benjamin.
• Marital Privilege (Disqualification by Reason of Privileged Communication) — Under Section 24, Rule 130 of the Rules of Court, the husband or the wife, during or after the marriage, cannot be examined without the consent of the other as to any communication received in confidence by one from the other during the marriage, except in a civil case by one against the other, or in a criminal case for a crime committed by one against the other or the latter's direct descendants or ascendants. The Court applied this doctrine because examining petitioner about communications received in confidence from Benjamin regarding the PCIB shares would be proscribed.

• "Good reasons consist of compelling circumstances justifying immediate execution lest judgment becomes illusory, or the prevailing party after the lapse of time be unable to enjoy it, considering the tactics of the adverse party who may have apparently no cause but to delay. Such reasons must constitute superior circumstances demanding urgency which will outweigh the injury or damages should the losing party secure a reversal of the judgment." — This passage states the controlling standard for execution pending appeal, which the Court used to find that the CA gravely abused its discretion in allowing immediate execution.
• "The CA merely looked into the physical and medical condition of petitioner without even considering that FPHC's complaints-in-intervention were already denied by the Sandiganbayan twice on the ground of prescription of action." — This passage identifies the CA's central error: it ignored the procedural and substantive weakness of FPHC's claims when assessing whether a good reason existed for execution pending appeal.
• "Indeed, FPHC's petition is a classic form of fishing expedition." — This passage characterizes FPHC's petition to perpetuate petitioner's testimony as an improper attempt to discover evidence rather than preserve known testimony.
• "Since FPHC insists that the PCIB shares were the ill-gotten wealth of Benjamin, dragging petitioner into the controversy, without any proof of her actual knowledge of the alleged fraudulent acquisition of the PCIB shares, will mean that she will have to be examined about communications received by her in confidence from Benjamin regarding said PCIB shares. This is proscribed under the marital privilege rule under Section 24, Rule 130 of the Rules of Court," — This passage applies the marital privilege rule to bar the examination of petitioner regarding confidential communications from her late husband.

• Villamor vs. National Power Corporation, 484 Phil. 298 (2004) — Cited for the rule that execution pending appeal requires good reasons consisting of superior circumstances demanding urgency; the Court quoted this case at length in finding that the CA gravely abused its discretion.
• Maceda, Jr. vs. Development Bank of the Philippines, 372 Phil. 107 (1999) — Cited for the doctrine that execution pending appeal is an extraordinary remedy, usually not favored, and that the good reason must outweigh the injury or damages should the losing party secure a reversal.
• National Power Corporation vs. Heirs of Rabie, 793 Phil. 479 (2016) — Cited for the requisites of execution pending appeal: a motion by the prevailing party, a good reason, and the good reason stated in a special order.
• United Coconut Planters Bank vs. Looyuko, 560 Phil. 581 (2007) — Cited for the definition of grave abuse of discretion, including that it may involve a gross misapprehension of facts.
• People vs. Sandiganbayan, G.R. No. 228281, 14 June 2021 — Cited for the standard that grave abuse of discretion must be capricious, whimsical, arbitrary, or despotic, equivalent to lack of jurisdiction.
• Trans Middle East (Phils) Equities, Inc. vs. The Sandiganbayan, G.R. No. 180350, G.R. No. 205186, G.R. No. 222919, G.R. No. 223237, 06 July 2022 — Cited for the ruling that with the final dismissal of Civil Case No. 0035 against TMEE, the shares cannot remain in custodia legis, and for the finding that there was no link between TMEE and Benjamin Romualdez.
• First Philippine Holdings Corp. vs. Trans Middle East (Phils.) Equities, Inc., G.R. No. 179505, 04 December 2009 — Cited as the decision affirming the dismissal of FPHC's first complaint-in-intervention on the ground of prescription.

• Section 2, paragraph 3, Rule 39, Rules of Civil Procedure — Provides that discretionary execution is permissible only when good reasons exist for immediately executing the judgment before finality or pending appeal. The Court, through the Villamor quotation, applied this provision to require superior circumstances demanding urgency.
• Section 11, Rule 51, 1997 Rules of Civil Procedure — Cited in connection with the Writ of Execution Pending Appeal issued by the RTC after the CA granted FPHC's motion.
• Section 1, Rule 24, Rules of Court — The CA relied on this provision in ruling that the RTC had jurisdiction over FPHC's petition because it was filed in petitioner's place of residence in Makati City.
• Section 7, Rule 24, Rules of Court — Petitioner argued that this provision applied, requiring FPHC to file a motion to perpetuate testimony before the Sandiganbayan because of the pending Civil Case No. 0035 and FPHC's petition for review.
• Section 24, Rule 130, Rules of Court — The marital privilege rule. The Court applied this provision to hold that petitioner could not be examined about communications received in confidence from Benjamin regarding the PCIB shares.

Hernando (Acting Chairperson), Lazaro-Javier, Marquez, and Kho, Jr., JJ., concurred. The text also notes that Gesmundo, C.J., had prior participation; Rosario, J., took no part; Lazaro-Javier, J., was designated an additional Member per Raffle dated 03 February 2020; and Kho, J., was designated an additional Member per Raffle dated 28 December 2022. No separate concurring opinions are summarized in the text.