In the case of FIRST LEVERAGE AND SERVICES GROUP, INC., Petitioner, vs. SOLID BUILDERS, INC., Respondent, G.R. No. 155680, July 2, 2012, the main issues were: [a] “SINCE ONLY SOLID BUILDERS, INC. APPEALED FROM THE JUDGMENT DATED DECEMBER 23, 1996, SAID JUDGMENT HAS BECOME FINAL AND EXECUTORY INSOFAR AS PNB-REPUBLIC IS CONCERNED”; and [b] “CONSEQUENTLY THE APPEAL OF SOLID BUILDERS HAS BECOME MOOT AND ACADEMIC INSOFAR AS FIRST LEVERAGE AND SERVICES GROUP, INC. IS CONCERNED.”
In its second and third assignments of error, First Leverage contended that since PNB Republic did not appeal the judgment of the RTC, the same had become final and executory insofar as PNB Republic was concerned. As such, First Leverage avers that it had already acquired vested rights enforceable by a writ of execution as against PNB Republic. First Leverage concluded that the appeal of Solid Builders with the CA, which in essence sought to enforce its contract with PNB Republic, was already rendered moot and academic, and that it had become functus officio insofar as First Leverage was concerned, considering that the said contract was already awarded in favor of the latter.
The Supreme Court found the petition without merit. It held that, anent the second and third assignment of errors, it was true that PNB Republic did not appeal the judgment of the RTC. The Court held that although it had always recognized the general rule that in appellate proceedings, the reversal of the judgment on appeal was binding only on the parties in the appealed case and did not affect or inure to the benefit of those who did not join or were not made parties to the appeal, an exception to the rule existed, however, where a judgment could be reversed as to the party appealing without affecting the rights of his co-debtor, or where the rights and liabilities of the parties were so interwoven and dependent on each other as to be inseparable, in which case a reversal as to one operates as a reversal as to all. This exception, which was based on a communality of interest of said parties, is recognized in this jurisdiction.
In First Leverage, the rights and liabilities of Solid Builders and PNB Republic were, no doubt, intertwined and inseparable, according to the Supreme Court. The enforcement of the rights of Solid Builders under the contract it entered into with PNB Republic was completely dependent upon the latter's performance of its obligations thereunder. Assuming that Solid Builders' offer to purchase the disputed properties was subsequently proven to be superior to that of First Leverage, PNB Republic should be required to proceed with its contract to sell the subject properties to Solid Builders. Thus, to allow the execution of the RTC judgment, by requiring PNB Republic to sell the questioned lots to First Leverage, without first determining with finality whether the latter's offer to buy the disputed properties was indeed superior to Solid Builders' offer would not only result in the deprivation of Solid Builders' right to due process but, more importantly, an unwarranted defeat or forfeiture of its substantive rights.
