G.R. No. 32455 - People vs. Santiago

The case originates from Civil Case No. Q-97-30412, where on January 15, 2002, the RTC rendered a decision finding the defendants liable to pay Del Monte Motors, Inc. a balance of P11,835,375.50 arising from Vilfran Liner’s service contracts with respondent.
The RTC ordered that the execution of the decision be made against the counterbond posted by Vilfran Liner on June 10, 1997, which was issued by Capital Insurance and Surety Co., Inc. (CISCO).

On April 18, 2002, CISCO opposed the execution motion, contending the nonexistence of any record or document evidencing the issuance of the counterbond.
Nonetheless, on June 13, 2002, the RTC granted the Motion for Execution and issued a corresponding Writ, enabling Sheriff Manuel S. Paguyo to levy on CISCO’s assets and serve a Notice of Garnishment on several depository banks and on the Office of the Insurance Commission regarding the security deposit.

On December 18, 2002, after a comprehensive hearing, the RTC ruled that the Notice of Garnishment served on the Insurance Commission was valid, and ordered the withdrawal of P11,835,375.50 from CISCO’s security deposit to satisfy the garnishment.
On January 8, 2003, Del Monte Motors, Inc. moved to cite Insurance Commissioner Eduardo T. Malinis in contempt for his refusal to comply with the December 18, 2002 order, an appearance he neglected despite proper notice.

The RTC subsequently declared Commissioner Malinis guilty of indirect contempt for his willful disobedience of the court order.
Prior to the filing of the petition for review under Rule 45, the Commissioner had, through a letter dated March 26, 2003, indicated no objection to the partial releases of the security deposit, which were later effected in July, October, and December 2003, though the petitioner maintained that the legal protection of the deposit should remain intact.

Whether the security deposit held by the Insurance Commissioner pursuant to Section 203 of the Insurance Code may be levied or garnished in favor of only one insured, thereby prejudicing the rights of the other policyholders.

Whether the partial release of the security deposit prior to the petition renders the case moot, considering that not all claims have been satisfied and the deposit is subject to replenishment.
The potential future implications that if CISCO replenishes its deposit, similar garnishment claims might arise, necessitating a clear interpretation of the exemption principle under the Insurance Code.