Manacop v. Equitable PCIBank
REITERATIONFacts
The Antecedents: Lavine Loungewear Manufacturing, Inc. (Lavine) insured its buildings and supplies against fire with several insurance companies, with loss payable to Equitable Banking Corporation-Greenhills Branch (Equitable Bank) as its interest may appear. A fire occurred, and claims were made. Lavine's representative, Harish C. Ramnani, had his authority withdrawn due to alleged failure to account for proceeds. Chandru C. Ramnani was appointed in his stead. The insurance companies required Lavine to sign a Sworn Statement in Proof of Loss and Subrogation Agreement, absolving them upon payment to Equitable Bank. Only Harish signed; others refused. Chandru requested payment to Lavine first, then to Equitable Bank, but some insurers paid Equitable Bank directly. Chandru, on behalf of Lavine, filed a Petition for Injunction against the insurers and Equitable Bank. Procedural History: Intervenors, claiming to be incumbent directors and authorized representatives, moved to intervene, disclaiming Chandru's authority. The trial court granted their intervention and denied Lavine's motion for reconsideration. The insurance companies and Equitable Bank filed their respective answers. The intervenors alleged Lavine's obligations to Equitable Bank were extinguished by insurance proceeds received, demanding release of the balance. First Lepanto alleged its share and partial payment to Equitable Bank, withholding the balance. PhilFire admitted liability and partial payment. TICO was declared in default. The intervenors later alleged Lavine's liabilities were fully paid and excess amounts should be returned. Equitable Bank denied full payment, asserting loans were secured by insurance, mortgages, and surety agreements, and prayed for payment, solidary liability of sureties, and foreclosure. The trial court rendered a decision dismissing Lavine's complaint, ordering Equitable Bank to refund overpayment, ordering insurance companies to pay unpaid proceeds to Lavine through intervenors, and cancelling mortgage annotations. The intervenors filed a motion for execution pending appeal. Several parties filed notices of appeal. Equitable Bank and Lavine filed petitions for certiorari, prohibition, and mandamus before the Court of Appeals, assailing the trial court's decision and order granting execution pending appeal. The Court of Appeals set aside the trial court's decision, declared the special order and writ of execution void, and remanded the case for pre-trial, clarifying that intervenors should not have been allowed to intervene. The Court of Appeals later amended its resolution, correcting the decision date, clarifying the remand for amendment of pleadings and new pre-trial, excluding intervenors, and lifting levies and garnishments. Equitable Bank filed a petition for review before the Supreme Court assailing the denial of its motion to disqualify the RTC judge, which was denied. The Petition: The intervenors (now petitioners) filed a petition for review under Rule 45, alleging errors by the Court of Appeals in giving due course to the certiorari petitions of Equitable Bank and Lavine despite the availability of appeal, in voiding the trial court's decision for lack of pre-trial on the amended answer-in-intervention, in holding that intervenors could not intervene to prosecute the action, in setting aside the trial court's decision that Equitable Bank was not entitled to proceeds due to full payment of Lavine's loan, and in voiding the writ of execution pending appeal.
Issue(s)
Whether the Court of Appeals erred in giving due course to the petitions for certiorari filed by Equitable Bank and Lavine despite the availability of appeal. Whether the Court of Appeals erred in voiding the decision of the trial court for lack of pre-trial on the intervenors' amended answer-in-intervention. Whether the Court of Appeals erred in holding that the intervenors, as rightful members of the Board of Directors, could not intervene to prosecute the action. Whether the Court of Appeals erred in setting aside the trial court's decision finding that Equitable PCIBank was not entitled to the insurance proceeds due to the loan of Lavine having been fully paid. Whether the Court of Appeals erred in voiding the writ of execution pending appeal.
Ruling
The petition is partly meritorious. The Supreme Court dismissed the certiorari petitions filed by Equitable Bank and Lavine before the Court of Appeals, finding that appeal was the proper remedy. The Court affirmed the Court of Appeals' decision in setting aside the trial court's order granting execution pending appeal and the writ of execution. The Supreme Court ruled that the Court of Appeals did not err in giving due course to the certiorari petitions of PhilFire and First Lepanto assailing the execution pending appeal, as this was the proper recourse. The Court found no good reasons to justify execution pending appeal, as the insurance companies admitted liabilities and the amounts and rightful claimants remained unsettled. The Court also found no merit in the argument that the appeals were merely dilatory or that Lavine's financial distress warranted execution pending appeal.
Ratio Decidendi
On the propriety of certiorari petitions: The Supreme Court held that the Court of Appeals should have dismissed the certiorari petitions filed by Equitable Bank and Lavine because appeal was a plain, speedy, and adequate remedy. Both parties had filed notices of appeal from the trial court's decision, recognizing appeal as the proper remedy. The Court reiterated that simultaneous filing of a petition for certiorari and an ordinary appeal is not allowed, as certiorari requires the absence of an appeal. The allegations of bias and grave abuse of discretion by the trial judge were matters that should have been raised in an ordinary appeal, not through certiorari, as long as the court had jurisdiction over the subject matter and parties. The Court also found that Equitable Bank and Lavine engaged in forum-shopping by filing certiorari petitions while appeals were also available or had been initiated. On the voiding of the trial court's decision for lack of pre-trial: The Supreme Court found it unnecessary to discuss this issue, stating that the propriety of intervention, lack of pre-trial, and the extent of Equitable Bank's interests were issues that must be resolved in the ordinary appeals. Since most parties had appealed the trial court's decision under Rule 41, these appeals were allowed to proceed. On the intervention of petitioners: The Supreme Court found it unnecessary to discuss this issue, as it was an issue to be resolved in the ordinary appeals. On the entitlement to insurance proceeds: The Supreme Court found it unnecessary to discuss this issue, stating that the extent of Equitable Bank's interests in the insurance proceeds was an issue that must be resolved in the ordinary appeals. On the voiding of the writ of execution pending appeal: The Supreme Court affirmed the Court of Appeals' decision in giving due course to the certiorari petitions of PhilFire and First Lepanto, which assailed the trial court's order granting execution pending appeal and the writ of execution. The Court reiterated that certiorari is the proper recourse against an order granting execution pending appeal where it is not founded upon good reasons. The Court found that the insurance companies' admission of liabilities and willingness to pay the proper party did not constitute good reasons for execution pending appeal, as the amounts and rightful claimants were still unsettled. The Court also rejected the arguments that the appeals were dilatory or that Lavine's financial distress warranted execution pending appeal, citing previous jurisprudence that the trial judge cannot determine the merit of his own decision and that the precarious financial condition of a juridical entity is not by itself a compelling circumstance for immediate execution.
Main Doctrine
The simultaneous filing of a petition for certiorari under Rule 65 and an ordinary appeal under Rule 41 of the Revised Rules of Civil Procedure is not allowed, as one remedy would necessarily cancel out the other. Certiorari is available only if there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law. Resort to certiorari is not justified when an appeal is a plain, speedy, and adequate remedy, even if the alleged error involves grave abuse of discretion.