Belisle Investment & Finance Co., Inc. v. State Investment House, Inc.
REITERATIONFacts
1. The Antecedents: Belisle Investment & Finance Co., Inc. (FINANCE) and Smith, Bell & Co., Inc. (SMITH BELL) are involved in a dispute with State Investment House, Inc. (HOUSE). FINANCE entered into agreements with HOUSE for financial assistance, executing promissory notes to evidence its indebtedness. SMITH BELL, as the majority shareholder of FINANCE, executed Comprehensive Surety Agreements, jointly and severally guaranteeing FINANCE's obligations to HOUSE. FINANCE failed to pay its obligations to HOUSE, resulting in an outstanding balance of P6,838,358.00 as of October 10, 1984. 2. Procedural History: On December 6, 1984, HOUSE filed a complaint with preliminary attachment against FINANCE and SMITH BELL with the Regional Trial Court (RTC) of Manila. The RTC issued an order for attachment on January 23, 1985, and subsequently, an order of attachment was issued on January 29, 1985, leading to the levy of properties belonging to FINANCE and SMITH BELL on January 31, 1985. Petitioners filed a motion to discharge the attachment and posted a counterbond. While the RTC heard arguments and pleadings were exchanged, petitioners filed a petition for certiorari, prohibition, and mandamus with preliminary injunction and temporary restraining order with the Supreme Court on February 8, 1985. The Supreme Court issued a temporary restraining order and referred the case to the Intermediate Appellate Court (IAC). The IAC denied due course to the petition and dismissed it, a decision later affirmed by a resolution denying petitioners' motion for reconsideration. 3. The Petition: This petition for review on certiorari seeks to reverse the IAC's decision and resolution. Petitioners argue that the IAC erred in deciding questions contrary to law or Supreme Court decisions, or by departing from the usual course of judicial proceedings. Specifically, they contend that the IAC failed to timely restrain the enforcement of the writ of attachment pending the approval of a sufficient counterbond, leading to an excessive levy. Petitioners question the IAC's denial of their petition, which sought to address the alleged inaction of the lower court in resolving their motion for a temporary restraining order and motion to discharge the writ of attachment. The Supreme Court, in a resolution dated October 14, 1985, required respondents to comment, and subsequently, after petitioners filed a reply, the Court found that the IAC correctly denied due course to the petition, deeming the petition premature as the lower court had not yet resolved the pending incidents.
Issue(s)
Whether the Intermediate Appellate Court erred in denying due course to the petition for certiorari, prohibition, and mandamus; and whether the petition filed with the Supreme Court was premature. Whether the Intermediate Appellate Court erred in failing to timely restrain the enforcement of a writ of attachment pending approval of a sufficient counterbond, resulting in an excessive levy; and whether grave abuse of discretion was committed in issuing the writ of attachment. Whether the mere posting of a counterbond automatically discharges a writ of attachment.
Ruling
The Supreme Court denied the petition, affirmed the decision of the Court of Appeals, and remanded the case to the lower court for trial on the merits and determination of all pending incidents.
Ratio Decidendi
On the prematurity of the petition and the alleged inaction of the lower court: The Court held that the petition filed with the Supreme Court was premature. The petitioners had filed a motion to discharge the writ of attachment and a motion for a preliminary injunction with the RTC. While the RTC heard the parties on February 4, 1985, they were given nine days to file their written pleadings, and both motions were still pending resolution. The petitioners filed their petition with the Supreme Court on February 8, 1985, before the RTC could deliberate and rule on these crucial incidents. The established rule is that the attention of the lower court must generally be called to its supposed error and its correction sought before resorting to a higher court, to give the lower court an opportunity to dispose of the matter with due deliberation. Therefore, the RTC remained the proper forum to thresh out the questions of enjoining the enforcement of the attachment order and discharging the writ. On the alleged grave abuse of discretion in issuing the writ of attachment: The Court affirmed the Court of Appeals' finding that no grave abuse of discretion could be ascribed to the respondent judge. The Rules of Court do not make notice and hearing indispensable requisites for the issuance of a writ of attachment. The Court reiterated that the grant or denial of an injunction rests upon the sound discretion of the court, and appellate courts will not interfere except in clear cases of abuse. The issuance of an injunction ex parte is discouraged, and both sides should be heard whenever possible. On the effect of posting a counterbond: The Court clarified that the mere posting of a counterbond does not automatically discharge a writ of attachment. Under Section 12, Rule 57 of the Rules of Court, the writ is properly discharged only after a hearing and upon the judge's order following the filing of a cash deposit or a counterbond executed to the attaching creditor. In this case, the motion to discharge and the motion for preliminary injunction were still pending resolution by the lower court when the petition was filed with the Supreme Court, making the petition premature.
Main Doctrine
A petition for certiorari, prohibition, and mandamus is premature if filed before the lower court has had the opportunity to rule on pending incidents, such as a motion to discharge a writ of attachment and a motion for preliminary injunction, especially when the parties are still filing pleadings related to these motions.