G.R. No. 202947 - ASB Realty Corp. vs. Ortigas and Company Limited Partnership

Case Digest (G.R. No. 202947)
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Facts:

Initiation of the collection and attachment suit by Philippine National Bank

On December 7, 1920, Philippine National Bank filed a suit in the Court of First Instance of the City of Manila against Umberto de Poli, Henry Hunter Bayne, and J. G. Lawrence.
The suit sought to compel delivery of the goods and merchandise described in a mortgage executed on the dates stated in the complaint.
The mortgage secured payment of P662,000, with P4,000 as damages.
Immediately after filing the complaint, counsel for the bank requested the court clerk, in writing, to issue a writ ordering the sheriff to seize the goods described in the affidavit attached to the complaint.
The plaintiffs posted a bond in the amount of P1,324,000 for that purpose.
After the order was issued under the seal of the court, the sheriff proceeded on December 8, 1920, with seizure and attachment of the personal property described in the affidavit, stored at the warehouse of Umberto de Poli.
The sheriff took actual possession of the goods and merchandise.

Petition for insolvency by other creditors within twenty-four hours

On December 8, 1920, within twenty-four hours after the sheriff had seized and taken possession of the merchandise, Chartered Bank of India, Australia and China, Hongkong & Shanghai Banking Corporation, and W. F. Stevenson & Co., Ltd. filed a petition in the office of the court clerk.
The petition requested that, after hearing and proper legal proceedings, Umberto de Poli be declared insolvent under Act No. 1956.
Umberto de Poli consented and admitted all allegations, waived the right to be heard, and waived the right to file opposition.

Order of the insolvency court and sheriff’s custody of all property

By virtue of the insolvency petition, the Court of First Instance issued an order declaring Umberto de Poli insolvent.
The order commanded the sheriff to take charge and possession of all property, real and personal, and all effects, books, documents, and belongings of the debtor, except those exempt by law from execution.
The sheriff was to keep such property in custody in accordance with law until further orders or until an assignee should be appointed.
The sheriff complied and also took possession of the goods and merchandise already attached in the attachment action brought by Philippine National Bank.
The record reflected that the goods and merchandise in the attachment affidavit were in the possession and custody of the sheriff by virtue of:

The order of seizure issued by the clerk under the seal of the court in case No. 19235, and
The order issued in the insolvency proceedings, case No. 19240, directing the sheriff to take charge of all property and effects of the insolvent.

Parallel proceedings in different branches and the creditors’ motion

Case No. 19235 was handled by Honorable Pedro Concepcion in one branch of the Court of First Instance.
Case No. 19240 was handled by Honorable C. A. Imperial in another branch.
On December 9, 1920, the insolvency petitioning creditors filed a motion in case No. 19235.
They prayed for reconsideration and annulment of the writ of attachment issued upon Philippine National Bank’s petition.
They also prayed that all further proceedings in case No. 19235 be suspended until the court decided discharge in the insolvency case.
They grounded their motion on multiple contentions:

The goods attached were then in the possession of the sheriff as provisional assignee.
It was probable that the debtor’s debt fell within debts subject to the Insolvency Law.
The complaint did not allege that the goods described had at any time been in the possession of the plaintiff.
The attempts by Philippine National Bank to take possession under the writ of attachment constituted, in their view, a confession that no valid contract of pledge had been executed.

Judge C. A. Imperial’s denial of the motion and orders regarding seizure and delivery

By agreement of the parties, Judge C. A. Imperial took cognizance of both cases.
On December 16, 1920, Judge C. A. Imperial denied the motion.
The denial was based on the grounds stated in the order.
The order directed the sheriff to dispose of the property seized at the instance of Philippine National Bank, strictly according to the law governing manual delivery of personal property.
The order directed that case No. 19235 should follow its usual course.
The order further stated that four of the five days in section 267 of Act No. 190 had already elapsed.
The sheriff was directed to deliver the goods seized to Philippine National Bank if, within one day, the defendants did not use the right under section 267, and if no claim was presented by a third person under section 270.
On the same day (December 16), Judge C. A. Imperial issued another order on a petition by Macleod & Co., a registered partnership and unsecured creditor of Umberto de Poli.
That second order prayed to enjoin the sheriff from seizing or transferring the questioned goods or merchandise in the warehouse or from interfering with them until delivery to the assignee in insolvency.
The tenor of the order disposed of that petition similarly, as part of the court’s overall disposition.

Creditors’ petition for certiorari and injunction against Judge C. A. Imperial

On December 17, the petitioning creditors filed a petition for certiorari and injunction in the Supreme Court against:

Honorable C. A. Imperial, and
Philippine National Bank,
with the assignee in insolvency included as a party at its own instance.

The petition sought to annul the December 16 order.
It alleged that the order allowing continuation of the attachment case and delivery of the merchandise and effects to Philippine National Bank exceeded the jurisdiction of the insolvency judge.
It asserted that enforcement would cause irreparable damage to the petitioners and other creditors.
It claimed no other plain, speedy, and adequate remedy existed.
The petitioners requested:

A writ of certiorari annulling the order of December 16, 1920,
An injunction forbidding respondents from continuing proceedings in case No. 19235, particularly levying the attachment, and
A preliminary injunction enjoining enforcement of the writ of attachment and the mentioned order.

Proceedings before the Supreme Court

A preliminary writ of injunction was issued by a Justice of the Supreme Court after filing a bond.
Respondents were summoned to show cause why certiorari and injunction should not be granted.
Philippine National Bank appeared and moved for dissolution of the preliminary writ of injunction.
The parties submitted written arguments and the case was argued and submitted for decision.

Position of the Court and governing certiorari principles

The Court relied on its repeatedly declared doctrine:

Certiorari would not issue unless it clearly appeared that the lower court acted without or in excess of jurisdiction.
If the court had jurisdiction over subject matter and parties, its decisions on questions relating to the cause remained within its jurisdiction.
Even erroneous or irregular decisions could not be corrected by certiorari; appeal was the proper remedy.

The Court invoked Herrera vs. Barretto and Joaquin (25 Phil., 245) as one among the cases discussing certiorari and injunction and supporting the proposition regarding jurisdiction versus the exercise of jurisdiction.

The Court’s finding on jurisdiction of the Court of First Instance

Judge C. A. Imperial, presiding over one branch, had taken cognizance of case No. 19235 by Philippine National Bank for recovery of merchandise mortgaged as security for P662,000, using the remedy under Act No. 1508 and the provis...(Subscriber-Only)

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