Solidbank v. Goyu
REITERATIONFacts
The Antecedents: Goyu & Sons, Inc. (GOYU) incurred obligations to Solidbank Corporation (SOLIDBANK). As security, GOYU obtained fire insurance policies from Malayan Insurance Company, Inc. (MICO), which were endorsed to SOLIDBANK. A fire gutted one of GOYU's buildings, and GOYU filed a claim with MICO. Rizal Commercial Banking Corporation (RCBC), another creditor of GOYU, also claimed the proceeds of these policies. Procedural History: - Civil Case No. 93-65442 (GOYU vs. MICO, RCBC): The RTC of Manila, Branch 3, ordered MICO to deposit the insurance proceeds (₱50,505,594.60) in custodia legis. The RTC later ordered the release of ₱50,000,000.00 to GOYU. The Court of Appeals (CA) modified the award, and this Court, in G.R. Nos. 128833, 128834 and 128866, ordered the release of the deposited amount to RCBC. - Civil Case No. 92-62749 (SOLIDBANK vs. GOYU, MICO, et al.): The RTC of Manila, Branch 14, rendered judgment in favor of SOLIDBANK, ordering GOYU and others to pay SOLIDBANK, and ordering MICO to pay SOLIDBANK ₱9,828,305.07. SOLIDBANK filed a motion for execution pending appeal. On February 5, 1996, the sheriff served a notice of garnishment to the Clerk of Court of RTC Manila, requesting delivery of ₱23,070,730.83 from the funds deposited in Civil Case No. 93-65442. SOLIDBANK withdrew ₱22,493,682.58. - RCBC filed an Urgent Motion for Restitution in CA-G.R. CV No. 51894 (appeal of Civil Case No. 92-62749), claiming SOLIDBANK had no authority to withdraw from funds in custodia legis. The CA initially denied this motion but later, in a Resolution dated June 23, 1997, set aside its prior resolution and ordered SOLIDBANK to restitute the withdrawn amount with legal interest. The CA, in a subsequent Resolution dated April 28, 2000, amended its previous order, directing SOLIDBANK to fully restitute the principal amounts of ₱23,070,730.83 and ₱14,206,403.78. The Petition: SOLIDBANK filed a Petition for Review on Certiorari assailing the CA Resolutions dated June 23, 1997, and April 28, 2000, arguing that the CA erred in allowing RCBC to intervene, in ordering restitution, and in taking judicial notice of this Court's decision in G.R. Nos. 128833, 128834 and 128866.
Issue(s)
Whether the Petition for Review on Certiorari is the proper remedy for interlocutory orders. Whether the Court of Appeals erred in allowing RCBC to intervene in the appeal of Civil Case No. 92-62749. Whether the Court of Appeals gravely erred in ordering SOLIDBANK to restitute the funds withdrawn from the amount in custodia legis. Whether the Court of Appeals gravely erred in taking judicial notice of this Court's decision in G.R. Nos. 128833, 128834 and 128866.
Ruling
The Petition for Review on Certiorari is DENIED. The Resolutions of the Court of Appeals dated June 23, 1997, and April 28, 2000, in CA-G.R. CV No. 51894 are AFFIRMED.
Ratio Decidendi
On the Propriety of the Petition: The Court held that a petition for review on certiorari is not the proper remedy for interlocutory orders, as the assailed CA Resolutions did not completely dispose of the appeals on the merits. However, on considerations of equity and liberality, the Court treated the petition as a Petition for Certiorari under Rule 65, requiring a grave abuse of discretion amounting to lack or excess of jurisdiction. On RCBC's Right to Intervene: The Court disagreed with SOLIDBANK's contention that RCBC had no right to intervene. It clarified that the issue was not the conflicting rights of SOLIDBANK and RCBC over the insurance proceeds, but the propriety of SOLIDBANK's withdrawal from funds in custodia legis. RCBC's right to intervene in the appeal of Civil Case No. 92-62749 stemmed from its status as a party and judgment creditor in Civil Case No. 93-65442, where the funds were in custodia legis. On SOLIDBANK's Right to Withdraw from Custodia Legis: The Court affirmed the CA's ruling that SOLIDBANK had no right to withdraw the funds. It reiterated the established jurisprudence that property under custodia legis of a specific court branch is under its sole control and beyond the interference of co-equal courts. The RTC of Manila, Branch 3, had exclusive jurisdiction over the deposited insurance proceeds in Civil Case No. 93-65442. Therefore, the garnishment and levy by the sheriff of Branch 14 in Civil Case No. 92-62749 on these funds were a patent nullity. On Taking Judicial Notice of Supreme Court Decision: The Court clarified that the CA did not err in taking judicial notice of this Court's decision in G.R. Nos. 128833, 128834 and 128866. The CA's action was not to bind SOLIDBANK by that judgment, but to enforce the delineation of jurisdiction between the two cases. By finding the levy in Civil Case No. 92-62749 improper, the CA was upholding the exclusive jurisdiction of Branch 3 over the funds in custodia legis, regardless of the final decision in the appeal of Civil Case No. 93-65442.
Main Doctrine
Funds deposited in custodia legis with a specific court branch are under its sole control and cannot be subject to garnishment or execution by another co-equal court. Any interference by another court constitutes a patent nullity.