Case Digest (G.R. No. 92813) Core Legal Reasoning
Core Legal Reasoning
Facts:
On December 6, 1982, the Bank of the Philippine Islands (BPI) filed Civil Case No. 48849 in the Court of First Instance of Pasig against Peroxide Philippines Corporation, with Eastman Chemical Industries, Inc. and spouses Edmund O. Mapua and Rose U. Mapua as solidary obligors, seeking to collect Peroxide’s indebtedness. Pursuant to Section 5, Rule 57 of the Rules of Court, the trial court issued a writ of preliminary attachment on January 7, 1983 after BPI posted a bond of ₱32,700,000.00, and the sheriff levied on petitioners’ properties, including shares in Bataan Pulp and Paper Mills, Inc. Eastman and the Mapuas moved to lift the attachment on January 11, 1983. On January 17, Judge Gregorio G. Pineda, without conducting the hearing that BPI had requested, granted the lift-motion. The case was later re-raffled to Judges Reyes and Acosta, who in November 1983 and December 1984, respectively, found the original attachment proper (citing fraud in alienation), reaffirmed it and Case Digest (G.R. No. 92813) Expanded Legal Reasoning
Expanded Legal Reasoning
Facts:
- Parties and subject matter
- Petitioners: Peroxide Philippines Corporation (Peroxide); Eastman Chemical Industries, Inc. (Eastman); spouses Edmund O. Mapua and Rose U. Mapua (the Mapuas). Respondent (private party): Bank of the Philippine Islands (BPI). Respondent (judicial): Court of Appeals.
- Cause: Civil Case No. 48849 (Court of First Instance of Pasig) — BPI sued for collection of indebtedness of Peroxide, alleging Eastman and the Mapuas bound themselves to be solidarily liable; BPI sought issuance of writ of preliminary attachment against petitioners’ properties.
- Issuance, levy and early challenges to attachment
- Writ of preliminary attachment ordered by Judge Gregorio G. Pineda and actually levied on January 7, 1983 after BPI filed an attachment bond of P32,700,000.00; sheriff attached petitioners’ properties, including shares in Bataan Pulp and Paper Mills, Inc. (Bataan) and real property in Caloocan.
- Eastman and the Mapuas moved to lift the attachment (filed January 11, 1983); motion heard January 14 but judge allowed BPI to file written opposition; on January 17, 1983 Judge Pineda issued two orders: denied BPI’s motion for a hearing and granted the lift of the writ as prayed by Eastman and the Mapuas. BPI moved for reconsideration.
- Subsequent trial court orders and shifts in rulings
- Case re-raffled (judicial reorganization). On November 28, 1983 Judge Pastor Reyes issued an order finding the attachment proper (fraudulent disposition by Eastman and the Mapuas) and directed sheriff to implement the writ upon the order’s finality.
- On December 17, 1984 Judge Eficio B. Acosta granted BPI’s motion for partial reconsideration, held that the writ revived and reaffirmed on November 28, 1983 could be executed immediately, and declared the writ “immediately executory.” Petitioners filed certiorari/prohibition (AC-G.R. SP No. 05043) to the Intermediate Appellate Court; a temporary restraining order (TRO) issued but was later lifted in the appellate court’s March 14, 1986 decision; the Supreme Court later denied review (G.R. No. 74558 in Oct. 27, 1986 resolution) holding the writ was issued in accordance with law.
- Later developments on suspension, dividends and enforcement
- On May 29, 1986 Judge Acosta issued an ex parte order (upon petitioners’ ex parte motion) suspending the writ of preliminary attachment. The Supreme Court later denied petition for review but petitioners sought clarifications re: nature of liability (surety vs guarantor) and whether Rose Mapua was bound.
- BPI filed motion to compel delivery of cash dividends declared on the garnished shares (Bataan). Judge Fernando L. Gerona, Jr., in a December 16, 1987 order, sustained BPI’s position that dividends declared after the notice of garnishment are fruits of shares and subject to attachment; he denied contempt citation against Bataan officers; he further held the May 29, 1986 Acosta order was a patent nullity (ex parte without due process) so writ remained effective.
- Subsequent proceedings: Judge Gerona inhibited; new judge (Judge Jainal D. Rasul) and on August 23, 1988 the trial court issued an order (revising Gerona’s) effectively holding the Acosta suspension prevented contempt and declaring release of dividends to Eastman and Edmund Mapua valid pending factual determination by the court; BPI moved for reconsideration; trial court denied BPI’s motion to suspend the August 23 order (September 19, 1988).
- BPI filed certiorari in the Court of Appeals (CA-G.R. SP No. 15672) challenging the August 23 and September 19, 1988 orders, arguing (inter alia) that the attachment against Eastman and the Mapuas remained valid and that dividends declared on garnished shares were subject to attachment.
- Court of Appeals disposition and Supreme Court review
- Court of Appeals (Sept. 4, 1989) granted certiorari: declared the preliminary attachment against Eastman and the Mapuas valid and enforceable from the beginning (without prejudice to determination of solidary liability), set aside the trial court’s August 23, 1988 order insofar as it held cash dividends not subject to attachment, ordered delivery to the sheriff of dividends subsequently declared and paid on the garnished shares, and set aside the September 19, 1988 order; costs against private respondents.
- Petitioners’ motion for reconsideration in the Court of Appeals was denied (Mar. 29, 1990). Petitioners brought the present petition for review on certiorari to the Supreme Court, asking reversal of the Court of Appeals’ judgment and alleging departure from accepted judicial procedure.
Issues:
- Threshold/principal issues presented
- Whether the preliminary attachment issued against Eastman and the Mapuas was valid and remained in effect (i.e., whether the writ was valid from the beginning and not effectively lifted or suspended by trial court orders dated January 17, 1983 and May 29, 1986).
- Whether cash dividends declared on garnished shares (Bataan shares) are subject to the preliminary attachment and thus deliverable to the sheriff.
- Ancillary and procedural issues
- Whether the trial court’s orders (January 17, 1983 lifting order; May 29, 1986 suspension order; August 23 and September 19, 1988 orders) were void for lack of jurisdiction or grave abuse of discretion because they were issued ex parte or without complying with Section 13, Rule 57 (right to hearing before discharge).
- Whether the Court of Appeals erred in entertaining the certiorari (treating errors of fact/judgment as jurisdictional), and whether it should have required prior motion for reconsideration of the trial court orders.
- Whether the question of Eastman and the Mapuas being guarantors rather than sureties could be determined in the preliminary attachment (auxiliary) proceeding or is exclusively for trial on the merits.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)