Sierra Grande Realty Corp. vs. Ragasa

The judgment of the Regional Trial Court in an unlawful detainer case, rendered in the exercise of its appellate jurisdiction under the Revised Rules on Summary Procedure, is immediately executory as a ministerial duty, without any requirement of “good reasons” or a bond, and execution must issue even if an appeal to the Court of Appeals is pending.

Sierra Grande Realty Corporation, the registered owner of a parcel of land on Roberts Street, Pasay City, brought an unlawful detainer suit against Elmer Tan, Nancy Tan, Bernardino Villanueva, Golden Apple Realty Corporation, and Rosvibon Realty Corporation after the latter refused to vacate despite demand. Sierra Grande traced its title to a purchase by its incorporator Sochi Villanueva in 1975. The occupants had been allowed to stay by mere tolerance; some later simulated deeds of sale over portions of the property to the corporate defendants. In an earlier decision (Golden Apple Realty and Devt. Corp. v. Sierra Grande Realty Corp.), the simulated instruments were invalidated for fraud. Following a final and executory judgment, Sierra Grande demanded that the defendants vacate. When they refused, the ejectment complaint was filed in the MeTC of Pasay City.

• Nature of the Action: On October 25, 2012, Sierra Grande Realty Corporation filed a complaint for unlawful detainer with the MeTC of Pasay City against private respondents — Elmer Tan, Nancy Tan, Bernardino Villanueva, Golden Apple Realty Corporation, and Rosvibon Realty Corporation — seeking to recover possession of a property on Roberts Street, Pasay City, covered by TCT No. 19801.

• Ownership and Occupancy: Sierra Grande alleged it was the registered owner of the Roberts property, purchased in 1975 by its incorporator Sochi Villanueva. Sochi’s brothers, Richard Villanueva and Bernardino Villanueva, were allowed to stay temporarily; Richard left in 1979. In 1984, Elmer and Nancy Tan were also permitted to occupy the property after being evicted from an apartment in Ermita, Manila.

• Prior Decision Invalidating Simulated Transfers: After Sochi’s death in 1985, Bernardino, Elmer, and Nancy conspired to simulate contracts to sell and deeds of absolute sale over portions of the property in favor of Golden Apple and Rosvibon. The Supreme Court, in Golden Apple Realty and Devt. Corp. v. Sierra Grande Realty Corp. (640 Phil. 62 [2010]), invalidated those instruments on the ground of fraud. That decision became final and executory.

• Demand to Vacate and Filing of Ejectment Suit: On September 28, 2012, Sierra Grande sent a demand letter to the private respondents requiring them to vacate and surrender possession. The respondents refused, prompting the filing of the unlawful detainer case. The defense denied receipt of the demand letter, claimed that they redeemed a mortgage on the property on petitioner’s behalf, and asserted a right to remain.

• MeTC Decision: In its Decision dated September 10, 2013, the MeTC ruled in favor of Sierra Grande, finding that petitioner was the lawful owner and that private respondents occupied the premises by mere tolerance. The court ordered the defendants to vacate the property, pay attorney’s fees of Php20,000.00, and pay the costs of suit.

• RTC Decision and Motion for Execution Pending Appeal: On appeal, the RTC (Judge Ragasa) affirmed the MeTC decision in toto on April 30, 2014. Private respondents’ motion for reconsideration was denied on August 15, 2014. On September 10, 2014, Sierra Grande moved for execution pending appeal. The RTC denied the motion in an Order dated October 29, 2014, holding that execution pending appeal required “good reasons” — compelling circumstances that would render the judgment illusory without immediate execution — and that it was prudent to await the final resolution of the petition for review then pending with the Court of Appeals. The motion for reconsideration was denied on April 8, 2015.

• Supervening Event on Appeal: By the time the certiorari petition was resolved, only Elmer, Golden Apple, and Rosvibon had filed petitions for review before the Court of Appeals. Bernardino and Nancy did not appeal; thus, the RTC decision had become final and executory as to them.

• Ministerial Duty to Issue Execution: Sierra Grande argued that Section 21 of the Revised Rules on Summary Procedure and Section 21, Rule 70 of the Rules of Court mandate that the RTC’s judgment in ejectment cases is immediately executory as a ministerial duty, without any need for “good reasons.” The denial of its motion therefore constituted grave abuse of discretion.

• Lack of Corporate Capacity: Private respondents Elmer and Golden Apple, as well as Rosvibon, maintained that Sierra Grande had no capacity to sue because the SEC had revoked its certificate of registration.

• Absence of Authority of Signatory: Elmer and Golden Apple questioned the authority of Frank Villanueva, General Manager, to sign the verification and certification against forum shopping, and to institute the petition on behalf of the corporation, absent a board resolution.

• Violation of Hierarchy of Courts: The same respondents contended that the petition should have been filed with the Court of Appeals, not directly with the Supreme Court, and that petitioner had failed to justify the direct resort.

• Proper Denial of Execution: Elmer and Golden Apple relied on Eudela v. Court of Appeals (286 Phil. 683 [1992]) to argue that the RTC correctly required “good reasons” and correctly denied the motion, as no compelling circumstances were shown.

• Propriety of Direct Resort to the Supreme Court: Whether the petition for certiorari was properly filed directly with the Supreme Court despite the doctrine of hierarchy of courts.

• Corporate Capacity to Sue: Whether Sierra Grande had the capacity to sue as a juridical person given the revocation of its SEC certificate of registration.

• Authority of General Manager: Whether Frank Villanueva, as General Manager, could validly sign the verification and certification against forum shopping and institute the petition on behalf of the corporation without a board resolution.

• Grave Abuse of Discretion in Denying Execution: Whether Judge Ragasa committed grave abuse of discretion amounting to lack or excess of jurisdiction when she denied the motion for execution pending appeal for lack of “good reasons.”

• Propriety of Direct Resort to the Supreme Court: Direct recourse to the Supreme Court was justified. The case originated from an ejectment suit governed by summary procedure, which inherently demands expediency. The issue raised — whether a writ of execution pending appeal must issue — involved a pure question of law and fell within the exception of time element or exigency, one of the recognized grounds for bypassing the hierarchy of courts. It is not necessary that all exceptions concur.

• Corporate Capacity to Sue: Sierra Grande retained the capacity to sue. The SEC revoked its certificate of registration on June 21, 2013. Under Section 122 of the Corporation Code, the corporation continued as a body corporate for three years from dissolution — until June 21, 2016 — to prosecute and defend suits. The petition was filed on June 29, 2015, well within that three-year winding-up period.

• Authority of General Manager: Frank Villanueva possessed ample authority. Under Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue (568 Phil. 572 [2008]), a general manager is among the corporate officers who may sign the verification and certification against forum shopping without a board resolution. Moreover, a Special Power of Attorney executed and signed by the majority of the directors of Sierra Grande constituted an act of the board, clothing him with authority to represent the corporation in these proceedings, analogous to Societe des Produits Nestle, S.A. v. Puregold Price Club, Inc. (817 Phil. 1030 [2017]).

• Grave Abuse of Discretion in Denying Execution: The denial of execution pending appeal was grave abuse of discretion. Section 21 of the Revised Rules on Summary Procedure and Section 21, Rule 70 of the Rules of Court explicitly provide that the RTC’s judgment in forcible entry and unlawful detainer cases “shall be immediately executory, without prejudice to a further appeal.” The word “shall” makes execution a ministerial duty; no “good reasons” or bond is required. Judge Ragasa’s reference to the “good reasons” standard — applicable only to discretionary execution under Section 2, Rule 39 — directly contravened the mandatory rule and prevailing jurisprudence, particularly ALPA-PCM, Inc. v. Bulasao, et al. (684 Phil. 451 [2012]). The assailed orders thus ran contrary to law and jurisprudence, constituting grave abuse of discretion.

• Immediate Execution of RTC Judgments in Summary Procedure Cases — Under Section 21 of the Revised Rules on Summary Procedure and Section 21, Rule 70 of the Rules of Court, the Regional Trial Court’s decision in civil cases governed by the Revised Rules on Summary Procedure, including forcible entry and unlawful detainer, is immediately executory. The issuance of the writ is a ministerial duty on the part of the RTC; it neither exercises discretion nor requires any justification or “good reasons.” The objective of expeditious and inexpensive determination of such cases provides the statutory good reason for immediate execution.

• Exceptions to the Doctrine of Hierarchy of Courts — The Supreme Court’s original jurisdiction to issue a writ of certiorari is concurrent with the Court of Appeals and the RTCs, but direct recourse to the Court is allowed when any of the following exceptions exist: (a) genuine issues of constitutionality; (b) transcendental importance; (c) cases of first impression; (d) constitutional issues better decided by the Court; (e) time element or exigency; (f) review of an act of a constitutional organ; (g) no other plain, speedy, and adequate remedy; (h) questions dictated by public welfare, advancement of public policy, or broader interest of justice, or patent nullities. Not all exceptions need to concur; the presence of one is sufficient. Here, the time-element exigency of an ejectment case and the pure question of law justified direct resort.

• Corporate Liquidation Period (Section 122, Corporation Code) — A corporation whose certificate of registration has been revoked continues as a body corporate for three years after dissolution for the sole purpose of prosecuting and defending suits by or against it, settling and closing its affairs, disposing of and conveying its property, and distributing its assets. Within that three-year period, it retains capacity to sue in its corporate name.

• Authority of General Manager to Sign Verification and Certification — A general manager is among the corporate officers who may sign the verification and certification against forum shopping without a board resolution, as recognized in Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue. Additionally, a Special Power of Attorney executed by a majority of the directors constitutes an act of the board sufficient to authorize a representative to file a petition on behalf of the corporation.

• “The above rule, without any qualification whatsoever, has decreed the immediately executory nature of decisions of the RTC rendered in the exercise of its appellate jurisdiction, involving cases falling under the Revised Rules on Summary Procedure. 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. Indeed, the provision does not even require a bond to be filed by the prevailing party to allow execution to proceed. The rationale for this is the objective of the Revised Rules on Summary Procedure to achieve an expeditious and inexpensive determination of cases governed by it. This objective provides the ‘good reason’ that justifies immediate execution of the decision, if the standards of Section 2, Rule 29 of the Rules of Court on execution pending appeal, as what ALPA-PCM insists, are considered.” (citing ALPA-PCM, Inc. v. Bulasao, et al.) — This passage captures the ratio decidendi that the RTC’s judgment in summary procedure cases is mandatorily and immediately executory, and the statutory objective itself dispenses with the need for separately adduced good reasons.

• “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.” (citing Imperial v. Armes) — Applied to the RTC judge’s denial of execution contrary to the mandatory provisions on summary procedure.

• ALPA-PCM, Inc. v. Bulasao, et al., 684 Phil. 451 (2012) — Instructive precedent on the mandatory, ministerial nature of execution pending appeal under the Revised Rules on Summary Procedure; held that no “good reasons” or bond is required for the RTC to authorize execution of its appellate judgment in summary cases.

• Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue, 568 Phil. 572 (2008) — Cited as authority that a general manager is among the corporate officers who may sign the verification and certification against forum shopping without need of a board resolution.

• Societe des Produits Nestle, S.A. v. Puregold Price Club, Inc., 817 Phil. 1030 (2017) — Distinguished but applied by analogy: a power of attorney executed by a majority of the board of directors suffices to clothe the attorney-in-fact with authority to sue on behalf of the corporation.

• Eudela v. Court of Appeals, 286 Phil. 683 (1992) — Distinguished; that case involved discretionary execution pending appeal under Section 2, Rule 39 in an action for injunction, specific performance, and damages, not the mandatory execution under the Revised Rules on Summary Procedure that governed the present unlawful detainer suit.

• The Diocese of Bacolod v. COMELEC, et al., 751 Phil. 301 (2015) — Cited for the doctrine that not all exceptions to the hierarchy of courts must concur to justify direct resort to the Supreme Court.

• Section 21, Revised Rules on Summary Procedure — Declares that the decision of the RTC in civil cases governed by the Rule, including forcible entry and unlawful detainer, “shall be immediately executory, without prejudice to a further appeal that may be taken therefrom.” This provision imposed a ministerial duty on Judge Ragasa to issue the writ, thereby rendering her denial grave abuse of discretion.

• Section 21, Rule 70, Rules of Court — Similarly states that the judgment of the RTC against the defendant in ejectment cases “shall be immediately executory, without prejudice to a further appeal that may be taken therefrom.” Reinforces the mandatory, non-discretionary character of execution.

• Section 122, Corporation Code — Provides for a three-year corporate liquidation period after dissolution during which the corporation may prosecute and defend suits. Applied to hold that Sierra Grande’s petition, filed within three years from the revocation of its SEC registration, was timely and valid.

• Section 1, Rule 65, Rules of Court — Governs certiorari; invoked as the procedural vehicle to assail an interlocutory order issued with grave abuse of discretion, there being no appeal from such order.

Leonen (Chairperson), Gesmundo, Carandang, and Zalameda, JJ., concurred.