Republic v. Saludares
REITERATIONFacts
1. The Antecedents: The Presidential Commission on Good Government (PCGG) issued a writ of sequestration on April 2, 1986, against Lianga Bay Logging Company, Inc. (LBLC) properties, alleging they formed part of illegally acquired wealth. The Republic of the Philippines, through PCGG and the Office of the Solicitor General, filed a complaint before the Sandiganbayan for reconveyance, reversion, accounting, restitution, and damages against Peter A. Sabido, among others. On August 12, 1991, Sabido filed a Motion to Lift the Writs of Sequestration before the Sandiganbayan, which was granted on November 29, 1991, declaring the writs automatically lifted six months after the ratification of the 1987 Constitution, without prejudice to the continuation of proceedings. PCGG filed a motion for reconsideration. Meanwhile, on February 11, 1993, private respondent Hung Ming Kuk filed a complaint for sum of money against LBLC with a prayer for a writ of preliminary attachment before the Regional Trial Court (RTC), Branch 28, of Lianga, Surigao del Sur. The PCGG was not impleaded, nor was the sequestration case referred to the RTC. On February 15, 1993, the Sandiganbayan denied PCGG's motion for reconsideration. On February 17, 1993, the RTC granted the writ of preliminary attachment in favor of Hung Ming Kuk. Subsequently, the RTC issued an order dated March 4, 1993, declaring LBLC in default, and on March 19, 1993, rendered a judgment by default. 2. Procedural History: The Republic of the Philippines filed a special civil action for certiorari under Rule 65 with the Supreme Court, assailing the RTC's decision and raising the issue of jurisdiction over LBLC properties under sequestration. 3. The Petition: The Republic contends that the RTC has no jurisdiction over the subject matter as the properties are under PCGG sequestration, placing them under custodia legis. Private respondent argues his claim is for a sum of money and that the attachment order was issued after the Sandiganbayan had lifted the sequestration. However, the Supreme Court en banc later nullified the Sandiganbayan's resolution lifting the writ of sequestration over LBLC properties.
Issue(s)
Whether the Regional Trial Court (RTC) has jurisdiction over the claim for a sum of money against Lianga Bay Logging Company, Inc. (LBLC) when its properties are under sequestration by the Presidential Commission on Good Government (PCGG). Whether the writ of preliminary attachment issued by the RTC in favor of private respondent Hung Ming Kuk is valid, considering the subsisting writ of sequestration over LBLC properties.
Ruling
The petition is partially granted. The default order issued by the RTC is affirmed but held in abeyance until the sequestration case involving LBLC before the Sandiganbayan is determined. The order of attachment issued by the RTC is declared NULL and VOID.
Ratio Decidendi
On the jurisdiction of the RTC over the sum of money claim: The Supreme Court held that the RTC has jurisdiction over the complaint for a sum of money filed by Hung Ming Kuk against LBLC. The Court distinguished this case from those where the PCGG is directly involved in the dispute over sequestered assets. Here, the claim arose from a legitimate business contract for cash advances and supplies, and the PCGG was not impleaded as a party. Citing PAGCOR vs. CA, the Court noted that the fact of sequestration alone does not automatically divest the RTC of jurisdiction to decide upon a claim for recovery of personal property or payment of a sum of money, especially when the PCGG is not a party to the suit. The RTC's jurisdiction under B.P. Blg. 129, as amended by R.A. No. 7691, covers cases where the demand exceeds P100,000.00 (or P200,000.00 in Metro Manila), exclusive of interest, damages, attorney's fees, litigation expenses, and costs. The claim of P18,031,563.78 clearly falls within this threshold. Therefore, the RTC did not err in taking cognizance of the collection suit. On the validity of the writ of preliminary attachment: The Supreme Court declared the writ of preliminary attachment issued by the RTC null and void. The Court emphasized that at the time the RTC issued the writ of attachment on February 17, 1993, the writ of sequestration issued by the PCGG on April 2, 1986, was still subsisting. The properties of LBLC were already under custodia legis by virtue of the PCGG's writ. The RTC, being a co-equal body, could not interfere with the authority of the PCGG and its writ of sequestration. Although the Sandiganbayan had initially lifted the writ of sequestration, this order was later nullified by the Supreme Court en banc in a decision dated January 23, 1995, which effectively reinstated the validity of the sequestration. Therefore, the RTC's act of issuing an attachment order over properties already under sequestration was an encroachment upon the jurisdiction of the PCGG and the Sandiganbayan, rendering the attachment void.
Main Doctrine
A Regional Trial Court (RTC) has jurisdiction over a complaint for a sum of money arising from a legitimate business contract, even if the defendant corporation's properties are under sequestration by the Presidential Commission on Good Government (PCGG), provided the PCGG is not impleaded as a party and the RTC's jurisdiction is not otherwise divested. However, an RTC's writ of attachment over properties already under a subsisting writ of sequestration issued by the PCGG is void, as the PCGG's writ places the properties under custodia legis and the RTC cannot interfere with a co-equal body's authority.