Title
Allure Manufacturing, Inc. vs. Court of Appeals
Case
G.R. No. 94452
Decision Date
Jul 16, 1991
BPI sued spouses Miguel and Filmerco; default judgment led to auction of sewing machines. Allure claimed ownership, sought injunction; trial court granted, CA reversed. SC reinstated injunction, ruled Allure had better right, remanded for consolidation.
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Case Digest (G.R. No. L-4395)

Facts:

Background of the Case

  • In 1983, Bank of the Philippine Islands (BPI) filed a collection suit against spouses Jaime and Ana Marie Miguel and Filmerco Commercial Co., Inc. (Civil Case No. 2807). The defendants failed to file an answer, leading to a default judgment and a writ of execution. The levied properties, including 12 sewing machines, were sold at a public auction, with BPI as the highest bidder.

Allure Manufacturing, Inc.'s Claim

  • On November 13, 1984, Allure Manufacturing, Inc. and Edgar Krohn, Jr. filed a separate case (Civil Case No. 8993) against BPI, Alfonso Verzosa, and Sheriff Villapana, seeking recovery of personal properties, annulment of the writ of attachment, and damages. They claimed ownership of the 12 sewing machines sold at the auction.

Supplemental Complaint and Injunction

  • On May 21, 1985, Allure and Krohn filed a supplemental complaint, seeking a writ of preliminary mandatory injunction to recover the sewing machines. Meanwhile, BPI sold some of the levied properties, including the sewing machines, to Servicewide Specialists, Inc. on July 12, 1985.

Trial Court's Ruling

  • On March 11, 1986, the trial court denied the writ of preliminary mandatory injunction, stating that the sewing machines were already in the possession of third parties (Servicewide). However, the court allowed Allure to file a supplemental complaint to implead Servicewide as a defendant.
  • On May 27, 1986, the trial court granted the writ of preliminary mandatory injunction, ordering Servicewide to return the sewing machines to Allure upon posting a bond. Servicewide filed a motion for reconsideration, which was denied on September 1, 1986.

Appeal to the Court of Appeals

  • Servicewide filed a petition for certiorari with the Court of Appeals, which nullified the trial court's orders granting the writ of preliminary mandatory injunction. The Court of Appeals ruled that Allure did not have a clear right to the sewing machines and that the writ was improperly issued.

Supreme Court's Decision in G.R. No. 70661

  • In a related case (G.R. No. 70661), the Supreme Court nullified the decision in Civil Case No. 2807, ruling that there was no valid service of summons on the defendants. This decision was brought to the attention of the Court of Appeals, but it did not affect the appellate court's ruling in the present case.

Issue:

  1. Whether the Court of Appeals erred in nullifying the trial court's orders granting the writ of preliminary mandatory injunction.
  2. Whether Allure Manufacturing, Inc. had a clear legal right to the sewing machines, justifying the issuance of the writ.
  3. Whether Servicewide Specialists, Inc. was a buyer in good faith and had a better right to the sewing machines.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Conclusion:

The Supreme Court ruled in favor of Allure Manufacturing, Inc., reinstating the trial court's orders and directing the consolidation of Civil Case No. 8993 with Civil Case No. 2807. The Court emphasized the importance of maintaining the status quo and protecting the rights of parties pending the final resolution of the case.


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