G.R. No. L-40953 - Lukban-Ang vs. Court of Appeals

The petitioners, Roberto Cosiquien and Olivia Sy, initiated legal action against private respondents comprised of Phil-Car Sales Corporation, Lota Santos, and its directors.
The controversy centers on property attachment and default proceedings arising from a single civil case (Civil Case No. C-7942) filed in the Court of First Instance of Caloocan City.
Two separate petitions were elevated to the Supreme Court: one involving a Writ of Preliminary Attachment (G.R. No. 56073) and the other involving an Order of Default (G.R. No. 58819).

On October 24, 1979, petitioners filed a complaint against the respondents seeking the collection of P400,000.00 with damages.
The complaint related to obligations arising from damages incurred by Jose T. Santos, husband of defendant Lota Santos.

On October 31, 1979, without prior notice or hearing for the adverse party, Judge Marcelino N. Sayo issued ex parte a Writ of Preliminary Attachment.
The respondent sheriff executed the writ by levying attachments on certain properties at the defendants’ premises.

On January 15, 1980, the trial court denied petitioners’ motions to dissolve and dismiss the writ of attachment in a single order.
Plaintiffs later filed an ex parte motion for substitution of sheriff and enforcement of an alias writ of attachment on August 20, 1980, leading to a renewed issuance on August 22, 1980.
The sheriff carried out further levies and even garnished a bank account, actions that allegedly resulted in significant material injury to the defendants.

In response, private respondents sought a petition for certiorari before the Court of Appeals on September 8, 1980.
The Court of Appeals, on December 16, 1980, set aside the orders of attachment and issued a mandatory preliminary injunction, ordering the return of all seized items and annulling the notice of garnishment.
Additional resolutions followed from the Court of Appeals ordering compliance by the sheriff, whereby non-compliance threatened disciplinary action.

In the same civil case, defendants filed their answer on January 25, 1980.
Subsequent steps included a pre-trial notice issued on February 4, 1980, and an order terminating the pre-trial on February 25, 1980, setting a trial date for March 25, 1980.
A hearing that was set for June 2, 1980 was later rescheduled for June 24, 1980.

Despite petitioners’ presence, the defendants (private respondents) failed to appear at the hearing on the merits, resulting in their declaration as in default.
The defendants, having already filed an answer, later sought reconsideration through a Motion for Reconsideration and/or for New Trial, which the trial court denied on June 2, 1981.
Following the denial, the writer issued a writ of execution on January 30, 1981, levying the defendants’ properties and scheduling an auction sale; however, certiorari petitions were subsequently filed and consolidated with G.R. No. 56073.

Both petitions were consolidated due to involving the same facts, property, and parties.
The Court of Appeals rendered decisions that annulled the lower court’s orders—both the writ of preliminary attachment and the declaration of default—thereby ordering a re-trial of the case and mandating the return of seized properties.
A temporary restraining order was also issued by the Supreme Court on the petitioners’ motion in G.R. No. 56073 pending resolution.

Whether the Court of Appeals, in annulling the lower court’s writ of preliminary attachment (G.R. No. 56073), acted with grave abuse of discretion and/or in excess of its jurisdiction.
Whether the declaration of default in G.R. No. 58819 was proper when private respondents, having already filed an answer, failed to appear at the trial on the merits.
The extent to which the procedural requirements under Rule 57 of the Rules of Court and the provisions on default under the Revised Rules of Court were observed in the issuance of orders by the trial court.