Effect of Reversal of Judgment

This Court has always recognized the general rule that in appellate proceedings, the reversal of the judgment on appeal is binding only on the parties in the appealed case and does 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 exists, however, where a judgment cannot be reversed as to the party appealing without affecting the rights of his co-debtor, or where the rights and liabilities of the parties are 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 is based on a communality of interest of said parties, is recognized in this jurisdiction. In the instant case, the rights and liabilities of Solid Builders and PNB Republic are, no doubt, intertwined and inseparable. The enforcement of the rights of Solid Builders under the contract it entered into with PNB Republic is completely dependent upon the latter's performance of its obligations thereunder. Assuming that Solid Builders' offer to purchase the disputed properties is subsequently proven to be superior to that of First Leverage, PNB Republic shall 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 is 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 (First Leverage and Services Group, Inc. Vs. Solid Builders, Inc, G.R. No. 155680. July 2, 2012).