Facts:

The case involves the Chartered Bank of India, Australia and China, the Hongkong & Shanghai Banking Corporation, and W. F. Stevenson & Co., Ltd. as plaintiffs against C. A. Imperial, Judge of the Court of First Instance of Manila, and the Philippine National Bank as defendants. The events leading to the case began on December 7, 1920, when the Philippine National Bank filed a suit in the Court of First Instance of Manila against Umberto de Poli, Henry Hunter Bayne, and J. G. Lawrence. The bank sought to compel the defendants to deliver goods and merchandise described in a mortgage executed to secure a debt of P662,000, plus P4,000 in damages. Following the filing of the complaint, the bank's attorney requested the court clerk to issue a writ for the sheriff to seize the goods, providing a bond of P1,324,000. The sheriff executed the seizure on December 8, 1920, taking possession of the goods stored in de Poli's warehouse.

On the same day, the Chartered Bank ...

Facts:

1. Mortgage and Legal Action: On December 7, 1920, the Philippine National Bank (PNB) filed a suit in the Court of First Instance of Manila against Umberto de Poli, Henry Hunter Bayne, and J.G. Lawrence. The bank sought to recover goods and merchandise described in a mortgage executed to secure a debt of P662,000, plus P4,000 in damages.
2. Attachment of Goods: Immediately after filing the complaint, PNB's attorney requested the clerk to issue a writ of attachment for the seizure of the goods described in the mortgage. A bond of P1,324,000 was posted, and the sheriff seized the goods stored in de Poli's warehouse on December 8, 1920.
3. Insolvency Petition: On the same day, December 8, 1920, three creditors—Chartered Bank of India, Australia and China, Hongkong & Shanghai Banking Corporation, and W.F. Stevenson & Co., Ltd.—filed a petition to declare de Poli insolvent under Act No. 1956. De Poli consented to the petition, and the court declared him insolvent, ordering the sheriff to take charge of all his property.
4. Conflicting Orders: Two separate cases were being heard: one by Judge Pedro Concepcion (PNB’s case) and another by Judge C.A. Imperial (insolvency case). The creditors filed a motion in PNB’s case to annul the attachment, arguing that the goods were now under the custody of the sheriff as provisional assignee in insolvency.
5. Judge Imperial’s Ruling: Judge Imperial denied the motion on December 16, 1920, ordering the sheriff to proceed with the sale of the goods attached by PNB. He ruled that PNB’s case should proceed as per the provisions of the law on manual delivery of personal property.
6. Certiorari and Injunction: The creditors filed a petition for certiorari and injunction in the Supreme Court, arguing that Judge Imperial’s order exceeded his jurisdiction and would cause irreparable damage to the creditors.

Issue:

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Ruling:

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Ratio:

1. Jurisdiction of the Court: The Court ruled that Judge Imperial had jurisdiction over both the insolvency case and PNB’s attachment case. The mere fact that the court denied the creditors’ motion to annul the attachment did not mean it acted without or in excess of jurisdiction. Any error in the decision should be corrected through appeal, not certiorari.
2. Insolvency Law and Mortgage Creditors: The Court held that under Act No. 1956 (Insolvency Law), a mortgage creditor, such as PNB, is not required to participate in insolvency proceedings unless they voluntarily surrender the mortgaged property. PNB, as a mortgage creditor, had the right to proceed with its action to recover the mortgaged goods and enforce its lien, independent of the insolvency proceedings.
3. Suspension of Proceedings: While the Insolvency Law generally stays all civil proceedings against an insolvent debtor, it makes an exception for creditors holding valid mortgages, pledges, or liens. Such creditors are allowed to prosecute their claims to judgment, even during insolvency proceedings, provided they do not interfere with the estate’s administration.
4. Interpretation of Insolvency Law: The Court emphasized that the Insolvency Law must be interpreted harmoniously, giving effect to all its provisions. The right of mortgage creditors to enforce their liens is protected under the law, and the court cannot suspend such actions unless the creditor voluntarily participates in the insolvency proceedings.

Conclusion:

The Supreme Court upheld the rights of mortgage creditors to pursue separate legal actions to recover mortgaged property during insolvency proceedings. Judge Imperial’s orders were within his jurisdiction, and the Insolvency Law does not deprive mortgage creditors of their right to enforce their liens independently. The petition for certiorari and injunction was dismissed, and the preliminary injunction was dissolved.