Salas v. Castro
REITERATIONFacts
The Antecedents: Petitioner Masterbuilt Industries, Inc. (MII) obtained a judgment for Replevin or Damages against Master Ace Sales and Development, Inc. (MASD) for P983,000.00. After the judgment became final and a writ of execution was returned unsatisfied, MII sought an alias writ of execution against the funds and goods of MASD and the unpaid subscriptions of its incorporators, including herein private respondents Purificacion Castro, Liza Castro-Santua, and Ramon C. Castro. Procedural History: Private respondents filed a separate action for Damages with Preliminary Injunction before the Regional Trial Court (RTC), Makati, Branch 133, claiming they had no moneys due and owing to MASD and that their bank accounts should not be garnished. Respondent Judge Buenaventura Guerrero of RTC-Makati, Branch 133, issued a preliminary injunction enjoining petitioners from enforcing the alias writ of execution. MII's motion for reconsideration was denied. The Petition: Petitioners filed a petition for Certiorari, Mandamus, and Prohibition, seeking to annul the order of preliminary injunction issued by RTC-Makati, Branch 133, questioning the jurisdiction of a co-equal branch to enjoin the execution of a final judgment of another branch.
Issue(s)
Whether a Regional Trial Court, Branch 133, may restrain and enjoin the execution of a final and executory judgment of Regional Trial Court, Branch 146. Whether persons found to have moneys due and owing to a judgment debtor may file a separate action for damages with preliminary injunction before a different, co-equal branch, and whether that branch may resolve the issue of whether such moneys are due and enjoin execution. Whether affidavits and receipts presented by stockholders as proof of full payment of subscription can override official SEC records showing unpaid subscriptions. Whether remedies available to third-party claimants under Section 17, Rule 39 of the Revised Rules of Court are limited to cases of 'wrongful levy' when properties of third persons not party to the case were mistakenly levied, as opposed to cases where the court knowingly directs process upon third persons.
Ruling
The petition is dismissed for lack of merit. The order of preliminary injunction issued by the Regional Trial Court, Branch 133, is sustained.
Ratio Decidendi
On the issue of whether a co-equal branch may enjoin the execution of a final judgment: The Court held that a court of co-equal and coordinate jurisdiction may, in certain instances, issue an injunction to restrain the execution of a judgment of another court of the same rank. This is particularly true when a third-party claimant invokes the jurisdiction of the court, asserting that their property or funds are not subject to the judgment. The Court found that the private respondents, by filing an action for damages with preliminary injunction, were acting as third-party claimants, alleging that their bank accounts were being garnished to satisfy a debt for which they were not personally liable. The jurisdiction of RTC-Makati, Branch 133, was invoked based on these allegations, which are crucial in determining whether the court can exercise its power. The Court emphasized that jurisdiction is conferred by law and determined by the allegations in the complaint, not by the defenses raised by the defendant. Therefore, the respondent court did not err in exercising its jurisdiction to hear the third-party claim and issue the injunctive relief sought. On the issue of whether a separate action for injunction is proper for third-party claimants: The Court affirmed that the Rules of Court provide remedies for third-party claimants whose property is levied upon to satisfy a judgment against a third party. Section 17, Rule 39 of the Rules of Court explicitly states that a third-party claimant may vindicate their claim to the property by any proper action. The Court clarified that this 'proper action' is distinct from the summary remedy of terceria and can be brought in a separate and distinct action before a court of competent jurisdiction. In such an action, the validity of the third-party claimant's title or right of possession can be resolved, and a preliminary injunction may be issued. The Court reasoned that the allegations of the respondents, claiming no unpaid subscriptions and thus no liability for MASD's debt, placed them within the purview of third-party claimants entitled to seek relief in a separate action. On the issue of affidavits and SEC records: The Court noted that this issue involves mixed questions of fact and law concerning the exercise of jurisdiction, which are correctible by appeal, not by certiorari. The Court did not delve into the merits of whether the affidavits and receipts should prevail over SEC records, as the primary issue before it was the jurisdiction of the respondent court to issue the injunction. On the limitation of third-party remedies: The Court clarified that the remedies available to third-party claimants under Section 17, Rule 39 are not limited solely to cases of 'wrongful levy' where property of a third person is mistakenly levied. The provision also allows for 'any proper action' to vindicate a claim to property or funds. The Court distinguished between the summary remedy of terceria and a separate action to recover ownership or possession. It reasoned that when a court directs process like execution or garnishment upon third persons not party to a case, and these third persons claim no liability, they may seek relief from a court of competent jurisdiction, which may include a co-equal court if the allegations warrant it, to prevent irreparable damage while their claim is being resolved.
Main Doctrine
A court of co-equal and coordinate branch may issue a preliminary injunction to restrain the execution of a final and executory judgment of another branch of the same court, particularly when a third-party claimant invokes its jurisdiction, asserting that their property or funds are not subject to the judgment.