Title
Garcia vs. Hongkong and Shanghai Banking Corp., Ltd.
Case
G.R. No. 255252
Decision Date
Dec 4, 2023
Governor Gwendolyn Garcia-Codilla challenged the RTC's order issuing an alias writ of execution in favor of HSBC. The Supreme Court upheld the lower court's ruling, emphasizing no grave abuse of discretion was committed.
A

Case Digest (G.R. No. 255252)

Facts:

  • Background of the Transaction and Credit Facility
    • Petitioner Governor Gwendolyn Garcia-Codilla (Garcia), doing business as GGC Enterprises and GGC Shipping (GGC), a sole proprietorship, availed of a credit facility with respondent Hongkong and Shanghai Banking Corp., Ltd. (HSBC).
    • On November 19, 1996, HSBC opened Documentary Credit Line No. DPCCEB960015 for USD 900,000.00 in favor of Sam Whan Phils. Trading Co. Ltd (Sam Trading), to finance GGC's purchase of a light cargo transit barge.
    • HSBC was obligated to pay Sam Trading the purchase price in five installments of USD 180,000.00 each from October 15, 1997, to October 15, 1999.
    • To secure payment, Garcia, with her husband's consent, executed a Real Estate Mortgage on two parcels of land, a Trust Receipt over the barge, and a General Surety Agreement in favor of HSBC.
  • Non-Payment and HSBC's Actions
    • Garcia and GGC failed to reimburse HSBC for payments paid to Sam Trading.
    • HSBC terminated Garcia and her husband’s dollar time deposit of USD 200,000.00, applied proceeds to the outstanding obligations, and demanded delivery of the barge, which was unheeded.
    • As of March 31, 2020, Garcia’s outstanding debt to HSBC was USD 720,000 plus interest of USD 103,522.91.
  • Litigation History
    • HSBC filed a Complaint for sum of money with prayer for preliminary attachment against Garcia and her husband docketed as Civil Case No. 00-863 before the RTC of Makati City.
    • The RTC issued the writ of preliminary attachment and declared Garcia and her husband in default for failure to file responsive pleading.
    • RTC Decision dated December 21, 2001, ruled in favor of HSBC awarding:
      • USD 890,347.92 actual damages;
      • PHP 1,000,000 as moral and exemplary damages;
      • PHP 960,765.48 as actual costs.
    • On appeal, CA in CA-G.R. CV No. 75861 affirmed RTC’s ruling with modifications reducing damages and deleting moral damages.
    • Garcia’s motion for reconsideration was denied and she appealed to the Supreme Court.
    • Supreme Court's Minute Resolution on August 22, 2012, denied the petition but modified the costs and interest reckoning date.
    • Denial of motion for reconsideration by SC on February 25, 2013 made the ruling final and executory.
  • Execution Proceedings
    • HSBC filed a motion for issuance of a Writ of Execution which the RTC granted on September 20, 2013, ordering collection of USD 1,877,148.50 plus costs from Garcia and her husband.
    • Sheriffs attempted personal service of the Writ and Notice of Demand to Pay to Garcia at Batasan Pambansa Complex, Quezon City but failed twice; on the third attempt copies were left with her Protocol Officer and Head of Operations.
    • HSBC filed an urgent ex-parte motion for the issuance of an Alias Writ of Execution on February 22, 2018, granting this on February 23, 2018, directing the collection of USD 2,825,636.79 plus costs.
    • Garcia moved to quash the Alias Writ asserting violation of due process since the motion was not set for hearing; RTC denied the motion and its reconsideration.
    • Garcia filed a petition for certiorari with the Court of Appeals (CA) which denied her petition on June 30, 2020 and also denied her motion for reconsideration on January 7, 2021.

Issues:

  • Whether the Court of Appeals erred in finding no grave abuse of discretion on the part of the RTC in issuing the Alias Writ of Execution without a hearing.
  • Whether Garcia’s constitutional right to due process was violated by the issuance of the Alias Writ without the opportunity to oppose the motion or participate in computation of obligations.
  • Whether the service of the Writ of Execution and Alias Writ was proper.
  • Whether the Alias Writ should have stated the facts and law on which it was based pursuant to Article VIII, Section 14 of the 1987 Constitution.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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