Philippine National Bank v. Palad
REITERATIONFacts
The Antecedents: The underlying dispute involved a labor union, the Pag-asa Labor Union (PLU), seeking to satisfy a judgment against Roxas-Kalaw Textile Mills, Inc. To this end, the provincial sheriff of Bulacan levied upon several personal properties of the textile company. The Philippine National Bank (PNB) intervened, asserting that these properties were subject to a duly registered mortgage in its favor and thus filed a third-party claim. Procedural History: Following the levy by the provincial sheriff, PNB filed a third-party claim. The sheriff then filed a motion with the Court of Industrial Relations (CIR) to fix a bond, as provided by law, to address PNB's claim. However, the CIR, through its presiding judge, ordered the sheriff to proceed with the sale of the properties, effectively denying the sheriff's motion and dismissing PNB's third-party claim. PNB's subsequent motion for reconsideration was pending when the sheriff scheduled the sale. The Petition: PNB filed an urgent petition for prohibition with preliminary injunction with the Supreme Court to prevent the public auction of the levied properties. PNB argued that the properties were covered by a mortgage in its favor and that its third-party claim had been improperly dismissed. The Supreme Court issued a writ of preliminary injunction. Subsequently, PNB moved to withdraw its petition, stating that the underlying labor dispute had been settled, the PLU's claim against the textile company was resolved via compromise, and PNB had foreclosed on the levied properties. The PLU assented to the withdrawal, and the Court dismissed the petition.
Issue(s)
Whether the petition for prohibition remains a justiciable controversy after the petitioner has foreclosed on the subject properties and the respondents have settled the underlying labor dispute via a compromise agreement.
Ruling
The Supreme Court dismissed the petition without pronouncement as to costs. The cash bond of P10,000.00 was allowed to be withdrawn.
Ratio Decidendi
On Issue 1: The Supreme Court held that the petition must be dismissed because the case has become moot and academic. Applying the principle of judicial economy, the Court noted that PNB itself admitted the purpose of the petition for prohibition—to prevent the sale of properties it claimed an interest in—was already accomplished through its own extrajudicial foreclosure. The Court further observed that the respondent Pag-asa Labor Union (PLU) confirmed the labor dispute had been resolved via a compromise agreement, satisfying its claims. As both the petitioner and the respondents expressed that the dispute was settled, there was no longer a 'live' issue for the Court to adjudicate. The Court emphasized that when the parties themselves have reconciled their differences or when the subject of the litigation has been resolved outside of the pending petition, the judicial function is terminated. Thus, the Court dismissed the petition without a pronouncement as to costs, as no practical relief could be granted.
Main Doctrine
A petition for prohibition with preliminary injunction may be withdrawn and the posted bond released when the purpose of the petition has been accomplished, the underlying claim has been settled, and the levied properties have been acquired by the petitioner through extrajudicial foreclosure.