Sierra Grande Realty Corp. vs. Elmer Tan, et al.

Under Section 21 of the Revised Rules on Summary Procedure in relation to Section 21, Rule 70 of the Rules of Court, a Regional Trial Court decision in an unlawful detainer case is immediately executory by operation of law; the issuance of a writ of execution pending appeal is a ministerial duty that does not require any showing of “good reasons.” The “good reasons” standard under Rule 39, Section 2 applies only to discretionary execution in ordinary civil actions and has no place in summary ejectment proceedings. A court commits grave abuse of discretion when it denies such a motion on the ground that “good reasons” were not shown.

Sierra Grande Realty Corporation was the registered owner of a property on Roberts Street, Pasay City. Several individuals and corporations occupied the premises by mere tolerance. A prior Supreme Court decision had invalidated simulated contracts to sell and deeds of absolute sale in favor of two of the corporate occupants. Sierra Grande demanded that the occupants vacate; when they refused, it filed an unlawful detainer complaint.

The Property and Occupancy: Sierra Grande Realty Corporation was the registered owner of a property covered by TCT No. 19801 on Roberts Street, Pasay City. The property was purchased in 1975 by one of its incorporators, the late Sochi Villanueva. Sochi’s brothers Richard and Bernardino Villanueva were initially allowed to stay; Richard later moved out. In 1984, Elmer and Nancy Tan were likewise allowed to occupy the property after being evicted from their prior residence.

Invalidated Contracts: After Sochi’s death in 1985, Bernardino, Elmer, and Nancy allegedly conspired with others to simulate contracts to sell and deeds of absolute sale over portions of the property in favor of Golden Apple and Rosvibon. In Golden Apple Realty and Devt. Corp. v. Sierra Grande Realty Corp., et al. (640 Phil. 62 [2010]), the Supreme Court invalidated those instruments on the ground of fraud, and the decision became final and executory.

Demand to Vacate and Unlawful Detainer Complaint: On September 28, 2012, Sierra Grande sent a letter demanding that private respondents vacate and peacefully turn over possession. Private respondents refused. Sierra Grande filed a complaint for unlawful detainer before the MeTC. In their answer, private respondents denied receiving the demand letter and claimed they had redeemed the property for petitioner’s benefit, effectively asserting a right to remain.

MeTC and RTC Judgments: The MeTC found that Sierra Grande was the lawful owner and that private respondents occupied by mere tolerance. It ordered them to vacate and to pay ₱20,000.00 in attorney’s fees and costs. The RTC affirmed in toto and denied reconsideration. Only Elmer Tan, Golden Apple, and Rosvibon appealed to the CA; Bernardino and Nancy did not appeal, rendering the RTC decision final as to them.

Motion for Execution Pending Appeal: While the CA appeal was pending, Sierra Grande moved for execution pending appeal. Judge Ragasa denied the motion, reasoning that execution pending appeal is an exception requiring “good reasons”—compelling circumstances that justify immediate execution lest the judgment become illusory—and that it was prudent to await the final resolution of the CA. She maintained this stance on reconsideration.

• Mandatory Nature of Immediate Execution: Petitioner argued that Section 21 of the Revised Rules on Summary Procedure and Section 21, Rule 70 of the Rules of Court categorically make the RTC’s decision in unlawful detainer cases “immediately executory.” Issuance of a writ of execution pending appeal is therefore a ministerial duty that does not require “good reasons.” The denial, which applied a standard from Rule 39, was patently contrary to law and to ALPA-PCM, Inc. v. Bulasao.
• Grave Abuse of Discretion: Petitioner maintained that the RTC judge’s reliance on the discretionary “good reasons” standard was arbitrary and rendered the assailed orders void for grave abuse of discretion.

• Requirement of “Good Reasons”: Private respondents Elmer Tan and Golden Apple relied on Eudela v. Court of Appeals to insist that execution pending appeal must be grounded on compelling reasons, and that Judge Ragasa correctly deferred to the pending CA appeal.
• Procedural Objections: They contended that the petition should have been filed with the Court of Appeals under the hierarchy-of-courts principle, and that Sierra Grande failed to justify direct resort to the Supreme Court. They also questioned the authority of Frank Villanueva to sign the verification and certification against forum shopping without a board resolution, and asserted that Sierra Grande had no capacity to sue because its SEC certificate of registration had been revoked.

• Hierarchy of Courts: Whether direct resort to the Supreme Court via a petition for certiorari was proper, or whether the petition should have been filed in the Court of Appeals.
• Corporate Capacity and Authority to Sue: Whether Sierra Grande had the capacity to sue despite the revocation of its SEC certificate of registration, and whether Frank Villanueva was duly authorized to file the petition.
• Grave Abuse of Discretion: Whether Judge Ragasa committed grave abuse of discretion in denying the motion for execution pending appeal on the ground that no “good reasons” were shown.

• Hierarchy of Courts: Direct resort to the Supreme Court was warranted. The case fell within the time-element exception to the hierarchy-of-courts doctrine: the controversy arose from an ejectment case governed by summary procedure, which demands expeditious resolution, and the sole substantive question—whether the RTC should have granted execution pending appeal—was a pure question of law. Under these circumstances, the Court properly exercised its full discretionary power to take cognizance of the petition.
• Corporate Capacity and Authority to Sue: Sierra Grande’s capacity to sue was recognized. Its certificate of registration was revoked on June 21, 2013; the petition was filed on June 29, 2015, well within the three-year winding-up period under Section 122 of the Corporation Code. As to authority, Frank Villanueva held the position of General Manager, a corporate officer who, under Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue, may sign the verification and certification against forum shopping without a board resolution. Moreover, a Special Power of Attorney executed and signed by a majority of the directors appointed him as attorney-in-fact to file the petition; this constituted an act of the board and sufficed to clothe him with authority, consistent with Societe des Produits Nestle, S.A. v. Puregold Price Club, Inc..
• Grave Abuse of Discretion: The denial of the motion for execution pending appeal was a grave abuse of discretion. Section 21 of the Revised Rules on Summary Procedure and Section 21, Rule 70 of the Rules of Court use the imperative “shall” and provide that the RTC’s decision in unlawful detainer cases is “immediately executory, without prejudice to a further appeal that may be taken therefrom.” This makes execution mandatory and the issuance of the writ a ministerial duty; it is not contingent on any showing of “good reasons.” The “good reasons” standard in Rule 39, Section 2 applies only to discretionary execution in ordinary civil actions. By requiring “good reasons” and deferring to the CA appeal, Judge Ragasa acted contrary to the clear mandate of the rules and controlling jurisprudence, thereby committing grave abuse of discretion. The assailed orders were consequently annulled.

• Mandatory Immediate Execution in Summary Ejectment Cases: Under Section 21 of the Revised Rules on Summary Procedure and Section 21, Rule 70 of the Rules of Court, a Regional Trial Court decision in an unlawful detainer case rendered on appeal is immediately executory by operation of law. The issuance of a writ of execution pending appeal is a ministerial duty that does not tolerate any showing of “good reasons.” The rule is grounded on the summary nature of ejectment cases and the need to promptly restore social order.
• Distinction Between Discretionary and Mandatory Execution Pending Appeal: Execution pending appeal under Section 2, Rule 39 requires “good reasons” and applies to ordinary civil actions; it is inapplicable to ejectment cases governed by the Revised Rules on Summary Procedure, where execution is mandatory.
• Exception to Hierarchy of Courts — Time Element and Pure Questions of Law: Direct recourse to the Supreme Court in a certiorari proceeding is proper when the case involves an exigent situation (such as an ejectment case) and presents a pure question of law, satisfying the recognized exceptions to the hierarchy-of-courts doctrine.
• Corporate Officer’s Authority to Sign Verification/Certification: A general manager is among the corporate officers who may validly sign the verification and certification against forum shopping on behalf of the corporation without a board resolution, pursuant to Cagayan Valley Drug Corporation v. CIR. A Special Power of Attorney executed by a majority of the directors constitutes an act of the board sufficient to authorize the filing of a petition.
• Three-Year Liquidation Period for Corporate Capacity: Under Section 122 of the Corporation Code, a corporation whose certificate of registration has been revoked continues as a body corporate for three years for the purpose of prosecuting and defending suits. A petition filed within that period is valid.

• “The issuance of the writ of execution pending appeal is a clear ministerial duty on the part of the RTC. It neither exercises official discretion nor judgment. Further, the use of the word ‘shall’ in both provisions underscores the mandatory character of the rule espoused therein. It was, therefore, error on the part of Judge Ragasa to even mention ‘good reasons’ as the same is only required in discretionary execution.” (quoting ALPA-PCM, Inc. v. Bulasao, et al.)
• “It requires no further justification or even ‘good reasons’ for the RTC to authorize execution, even if an appeal has already been filed before the CA.”
• “Grave abuse of discretion exists when an act is: (1) done contrary to the Constitution, the law or jurisprudence, or (2) executed whimsically, capriciously or arbitrarily out of malice, ill will or personal bias.”

• ALPA-PCM, Inc. v. Bulasao, et al., 684 Phil. 451 (2012) — Controlling precedent directly holding that an RTC decision in summary procedure cases is immediately executory without need for “good reasons”; heavily relied upon to annul the denial.
• Eudela v. Court of Appeals, 286 Phil. 683 (1992) — Distinguished; that case involved discretionary execution under Rule 39 in an action for injunction, specific performance, and damages, not the mandatory execution rule under the Revised Rules on Summary Procedure.
• Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue, 568 Phil. 572 (2008) — Applied to uphold the authority of a general manager to sign the verification and certification without a board resolution.
• Societe des Produits Nestle, S.A. v. Puregold Price Club, Inc., 817 Phil. 1030 (2017) — Used to support that a special power of attorney executed by a majority of the directors is sufficient authorization to file a petition on behalf of the corporation.
• The Diocese of Bacolod v. COMELEC, et al., 751 Phil. 301 (2015) — Cited for the rule that the Supreme Court may take cognizance of a certiorari petition filed directly with it for exceptionally compelling reasons or when the nature of the issues so warrants.
• Ifurung v. Carpio-Morales, G.R. No. 232131, April 24, 2018 — Enumerated the exceptions to the hierarchy-of-courts doctrine.
• Intramuros Administration v. Offshore Construction Development Company, G.R. No. 196795, March 7, 2018 — Mentioned to emphasize the summary nature of ejectment cases and the need for expediency.

• Section 21, Revised Rules on Summary Procedure — Makes the RTC decision in civil cases governed by the rule immediately executory, without prejudice to further appeal; applied as the source of the mandatory execution rule in ejectment cases.
• Section 21, Rule 70, Rules of Court — Corresponding provision that the RTC judgment in ejectment cases is “immediately executory”; reinforced the mandatory character of execution pending appeal.
• Section 2, Rule 39, Rules of Court — Discretionary execution pending appeal requiring “good reasons”; distinguished as inapplicable to summary procedure.
• Section 122, Corporation Code — Three-year winding-up period during which a dissolved corporation may prosecute and defend suits; used to uphold Sierra Grande’s capacity to sue.

Justices Alexander G. Gesmundo, Rosmari D. Carandang, and Rodil V. Zalameda concurred. (Chairperson Justice Marvic M.V.F. Leonen penned the decision.)

N/A (no dissenting opinions)