Bell Carpets International Trading Corporation v. Court of Appeals
REITERATIONFacts
The Antecedents: Manila Bay Spinning Mills, Inc. (MBSMI) sued Carpets International (Phils.), Inc. (Carpets International) for the recovery of P771,700.23 representing the unpaid balance of yarn purchased by Carpets International. MBSMI attached copies of sales invoices, dishonored checks, statement of account, and demand letters to its complaint, and applied for preliminary attachment alleging fraud in contracting the obligation and disposition of properties with intent to defraud. Carpets International denied the allegations, claiming the yarn was on consignment, some invoices were not signed, checks were for security, there was a strike, some yarn was defective, and negotiations were ongoing. Procedural History: A writ of preliminary attachment was issued ex parte, and sheriff seized properties of Carpets International. Bell Carpets International Trading Corporation (BCITC) filed a third-party claim over some attached properties. Carpets International posted a counterbond to dissolve the attachment, which was later restored. MBSMI moved to implead BCITC as a defendant, alleging it and Carpets International were the same entity due to a merger. MBSMI filed an amended complaint seeking joint and several liability. The RTC granted the motion to implead BCITC. Carpets International manifested that none of the attached items belonged to it. BCITC answered, claiming it was a separate entity and had no participation in the transactions, and counterclaimed for the lifting of the attachment on its properties. MBSMI moved for summary judgment, asserting no disputed facts. The RTC rendered a summary judgment ordering Carpets International to pay MBSMI P771,700.23 plus interest, attorney's fees, and costs. MBSMI moved for execution pending appeal due to the deteriorating nature of the goods, Carpets International's potential insolvency, and the undisputed nature of the debt. The RTC denied the motions for reconsideration and granted the motion for execution. A writ of execution was issued, scheduling the sale of attached properties. BCITC filed a special civil action for certiorari with the Intermediate Appellate Court (IAC) seeking to annul the summary judgment. The IAC affirmed the summary judgment and denied BCITC's motion for reconsideration. BCITC appealed to the Supreme Court via certiorari. The Petition: BCITC filed a petition for review on certiorari, arguing that the IAC erred in not nullifying the RTC's acts, specifically: (1) the summary judgment rendered with grave abuse of discretion because pleadings raised factual issues regarding ownership of attached items and the indebtedness, and BCITC's counterclaim was dismissed without hearing; and (2) the order authorizing levy on execution and sale of BCITC's property was a despotic exercise of judicial authority.
Issue(s)
Whether the petition for certiorari was the proper remedy given that the summary judgment had become final and executory. Whether the summary judgment was rendered with grave abuse of discretion. Whether the issues raised by Carpets International and BCITC were genuine or sham defenses. Whether BCITC genuinely owned the attached properties.
Ruling
The petition is denied for lack of merit. The summary judgment of the Regional Trial Court, as affirmed by the Court of Appeals, is affirmed.
Ratio Decidendi
On the propriety of certiorari: The Court held that the petition for certiorari was not the proper remedy because the summary judgment had become final and executory. A summary judgment is a final judgment that disposes of the case on the merits, leaving nothing more for the trial court to do. The remedy against such a judgment is an appeal, not a special civil action for certiorari under Rule 65. The existence and availability of the right of appeal are antithetical to the availment of certiorari. Since BCITC failed to appeal the summary judgment within the reglementary period, the proceedings for its annulment were futile. On the alleged grave abuse of discretion in rendering summary judgment: The Court found that the summary judgment was correctly and properly rendered. The issues raised by Carpets International and BCITC were demonstrably sham, fictitious, and contrived. Carpets International failed to deny the genuineness and due execution of the documents appended to the complaint specifically and under oath, which constituted a judicial admission under Section 8, Rule 8 of the Rules of Court. Furthermore, responsible officials of Carpets International admitted in affidavits during a preliminary investigation that the company had indeed bought yarn from MBSMI, and Carpets International had posted a bond to discharge the attachment on its property. These facts clearly indicated that Carpets International was indebted to MBSMI and that the denials were not genuine. On the genuineness of the issues raised by Carpets International and BCITC: The Court found BCITC's claim of title to the property seized from Carpets International to be sham and fictitious. This was supported by the factual findings of the IAC: (1) the attached goods were found and stored in the factory compound of Carpets International, the same address where MBSMI delivered the yarns; (2) Carpets International filed a bond to have the attachment discharged, covering the goods claimed by BCITC; and (3) BCITC presented no evidence to show how it became the owner of the attached goods, relying solely on its bare claim. The Court concluded that these facts amply demonstrated that the attached properties were owned by Carpets International and not by BCITC. The Court also addressed the dismissal of BCITC's counterclaim, finding that the summary judgment was rendered in accordance with the Rules of Court and applicable jurisprudence because the pleadings and admissions on file, together with affidavits, showed no genuine issue as to any material fact, and the moving party (MBSMI) was entitled to a judgment as a matter of law. The issues raised by BCITC were deemed sham, rendering a full trial unnecessary for the determination of the main claim, and by extension, the counterclaim which was intrinsically tied to the ownership of the attached property. On the ownership of the attached properties: The Court found BCITC's claim of title to the property seized from Carpets International to be sham and fictitious. This was supported by the factual findings of the IAC: (1) the attached goods were found and stored in the factory compound of Carpets International, the same address where MBSMI delivered the yarns; (2) Carpets International filed a bond to have the attachment discharged, covering the goods claimed by BCITC; and (3) BCITC presented no evidence to show how it became the owner of the attached goods, relying solely on its bare claim. The Court concluded that these facts amply demonstrated that the attached properties were owned by Carpets International and not by BCITC.
Main Doctrine
A petition for certiorari under Rule 65 cannot be substituted for an appeal under Rule 41 when the remedy of appeal is available and the judgment sought to be annulled has become final and executory. Furthermore, a summary judgment is proper when the pleadings, admissions, and affidavits show no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.