Puno v. Court of Appeals
REITERATIONFacts
The Antecedents: In December 1983, Emiliana Doblon (Emiliana) leased 13 parcels of land in Malinta, Valenzuela from Philippine Veterans Bank (PVB), including the Greenleaf Market site. On March 29, 1984, Emiliana, through counsel Atty. Benigno Puno (Puno), filed Civil Case No. 84-23585 for reformation of the lease contract and damages against PVB before Manila RTC Branch 13, resulting in a September 20, 1984 summary judgment favoring Emiliana: reforming the contract, awarding P221,000 actual damages with interest, P2,500 daily loss of income from April 1, 1984 until restoration of possession, enjoining PVB from transferring the premises except to Emiliana, and costs. Writs of execution and alias were issued, leading to levy on PVB properties. In April 1985, PVB was placed under receivership by the Monetary Board, followed by liquidation order on June 7, 1985; Central Bank filed SP No. 85-32311 for liquidation assistance before Manila RTC Branch 39 (liquidation court), ordering claims filing. Despite liquidation, sheriff sold levied PVB properties on July 8-9 and November 4, 1985, with Emiliana highest bidder on the Market lot. Puno claimed 50-50 partnership with Emiliana via Joint Manifestation (Sept 22, 1986) and March 7, 1987 agreement, asserting co-ownership including exclusive award of the Market; Emiliana repudiated in Counter-Manifestation (June 29, 1987), filed Makati Civil Case No. 17154 to annul agreements alleging fraud while Puno was still RTC judge. Liquidation court approved Sept 22, 1989 compromise: Emiliana receives P2.4M for auction properties, files SC pleadings. SC in G.R. No. L-73162 (Oct 23, 1989) nullified July 8-9, 1985 sales as unenforceable post-receivership, ordering Emiliana to file judgment claim in liquidation; Puno's separate MR denied. Emiliana filed Satisfaction of Judgment closing Civil Case No. 84-23585. Puno sought Market possession injunction alleging PVB intrusion Feb 1990; temporary RO issued Feb 12, 1990. Procedural History: Liquidation court issued Questioned Order 1 (Feb 21, 1990): rentals to court deposit, Mercedes Gonzales (Puno ally claiming 1/7 share) and Corazon Cortez to collect/deposit. Mercedes failed to remit, prompting contempt motion. Questioned Order 2 (Apr 5, 1990): Corazon collects arrears, pays Meralco, deposits excess. Questioned Order 3 (May 10, 1990): denied Puno's omnibus motions, disqualified him as claimant, vacated RO, held Puno/Mercedes in contempt (P100 fine each, account collections). Questioned Order 4 (July 26, 1990): denied Puno MR and salary withdrawal. Mercedes filed CA-G.R. SP No. 20786 (May 21, 1990) vs Orders 1-3; Puno et al. filed CA-G.R. SP No. 22683 vs Order 4; consolidated, CA dismissed Jan 17, 1992 affirming liquidation court, MR denied Dec 18, 1997. The Petition: Petitioners assail CA via Rule 65 certiorari: liquidation orders disturbed status quo possession since 1984 (Civil Code possession articles); Puno entitled as partner to deficiency judgment share/Market; compromise ratified void sales; other RTC cases (Valenzuela/Makati) res judicata on possession/ownership; no grave abuse in contempt as exercising rights; Mercedes 1/7 owner.
Issue(s)
Whether petitions for certiorari under Rule 65 properly lie against CA decision affirming liquidation court orders, despite appeal availability. Whether liquidation court gravely abused in disqualifying Puno as claimant, vacating injunction, disturbing possession, authorizing Corazon collections, denying salaries, and holding contempt. Whether SC G.R. L-73162 ruling on void sales inapplicable to possession/management; compromise ratified sales; res judicata from other cases binds PVB.
Ruling
Petitions dismissed for lack of merit; CA correctly affirmed liquidation court orders disqualifying Puno as claimant lacking privity to judgment, voiding derivative Market claims from null auction sales, no ratification possible, no res judicata absent party identity, certiorari improper remedy, contempt proper for disobeying rental deposit order.
Ratio Decidendi
On Petitions for Certiorari: Petitioners availed Rule 65 certiorari against RTC final orders affirmed by CA, but appeal via Rule 45 petition is plain, speedy, adequate remedy even for grave abuse claims, per Del Pozo v. Penaco (G.R. No. L-48302, Nov 23, 1988): availability of appeal proscribes certiorari regardless of questions raised. Rule 65, Sec. 1 requires no other remedy; here, Rule 45 exists, preventing extraordinary writ to avoid forum-shopping. Liquidation court orders final/resolvable on appeal; CA dismissal upheld. On Liquidation Court's Actions: Judgment in Civil Case No. 84-23585 solely for Emiliana, not Puno; partnership alleged post-judgment (March 1987 vs Sept 1984 decision), no privity to execute against PVB. No injunction right absent protectable interest (Philip Morris v. CA, G.R. No. 91332). Order 1 preserved status quo by depositing rentals pending Puno rights resolution, appointing Mercedes/Corazon collectors; did not eject possession/management, merely regulated rents (owner attribute, Civil Code Arts 441-442, not possession Arts 523-539). Order 2 practical for arrears/Meralco bills benefiting all. No grave abuse; reasonable incident to liquidation jurisdiction. Puno/Mercedes contumacious for non-remittance defying Order 1; contempt is disobedience impeding justice (Kalilid Wood v. CA, G.R. No. 79723), good faith irrelevant, non-party status immaterial (Rule 71). No salaries as Puno lacked management rights. On Res Judicata and Void Sales: SC G.R. L-73162 nullified sales post-June 7, 1985 liquidation as illegal, void ab initio; applies to Nov 4, 1985 Market sale. Void sales (Civil Code Art 1409) not ratifiable by Emiliana-PVB compromise, which settled only deficiency claim, not ownership. Derivative claims by Puno/Mercedes (partner/assignee) fail against PVB; recourse vs Emiliana only. Lacks identity of parties (PVB absent from Valenzuela Civil Cases 2881/2886/2887-V-88, Makati 17154); causes differ (private ownership vs liquidation claims). Elements absent: final merits judgment with identity (Republic v. Yu, G.R. No. 157557).
Main Doctrine
In bank liquidation proceedings, execution sales of the bank's assets conducted after the Monetary Board orders liquidation are null and void ab initio, as they contravene the exclusive jurisdiction of the liquidation court and the statutory prohibition on alienating bank properties during liquidation, rendering any derivative ownership or possession claims by purchasers, their partners, or assignees unenforceable against the bank. Such void sales cannot be ratified or cured by subsequent compromise agreements between the judgment creditor and the liquidator, pursuant to Civil Code Article 1409, which declares void contracts incapable of ratification, ensuring orderly asset preservation for all creditors. Res judicata does not bar claims in liquidation proceedings where there is no identity of parties, subject matter, or causes of action with prior cases involving only private litigants excluding the bank, requiring all four elements for application: final judgment on merits by competent court with identity between actions. Certiorari under Rule 65 is improper when appeal under Rule 45 is available against final orders of RTC, even if alleging grave abuse, prioritizing ordinary remedies to prevent forum-shopping. Indirect contempt lies for willful disobedience of a court's lawful order, such as failure to remit collected rentals as directed, regardless of the contemnor's good faith belief in possession rights or non-party status, as the essence is defiance of judicial authority under Rule 71.