Wise v. Sun Lung
REITERATIONFacts
The Antecedents: Wise & Company, Inc. (Wise & Co.) filed a motion with the Court of First Instance of Manila, seeking an order for the Provincial Sheriff of Camarines Sur to sell properties he had attached and to deliver the proceeds to Wise & Co. Procedural History: The Provincial Sheriff of Camarines Sur reported that he delivered the attached goods to the assignee of the insolvency of Man Sun Lung & Co., Inc., because he had seized them in the store of Man Sun Lung & Co., Inc. The Sheriff further stated that he made this delivery based on an order from the Court of Camarines Sur, and that the goods were sold by the assignee under the order of the court handling the insolvency. The proceeds, amounting to P656.64, were in the custody of the clerk of court, also by order of the Court of Camarines Sur dated January 20, 1937. The Petition: Wise & Co. appealed the order of the lower court denying their motion, alleging errors in distinguishing between the natural person Man Sun Lung and the corporation Man Sun Lung & Co., Inc., and in relinquishing custody of the attached goods to the prejudice of Wise & Co.
Issue(s)
Whether the lower court erred in failing to distinguish between the natural person, Man Sun Lung, and the corporation, Man Sun Lung & Co., Inc. Whether the lower court erred in relinquishing its custody of the goods put under preliminary attachment to the prejudice of Wise & Company, Inc.
Ruling
The Supreme Court affirmed the order of the lower court, finding no error in its decision. The Court held that the properties seized by the Sheriff of Camarines Sur were presumed to belong to the corporation Man Sun Lung & Co., Inc., not the individual Man Sun Lung, and thus the seizure was illegal. Consequently, the lower court acted within its jurisdiction in ordering the release of the properties to the assignee of the insolvency.
Ratio Decidendi
On the issue of distinguishing between the natural person and the corporation: The Court unequivocally stated that Man Sun Lung, the defendant in the present case, is legally distinct and different from Man Sun Lung & Co., Inc., which was declared insolvent. The former is a natural person, while the latter is a juridical entity with a personality separate and independent from that of the individual. Since the properties seized by the Sheriff of Camarines Sur were found in the store of Man Sun Lung & Co., Inc., the presumption is that they belong to the corporation, not to the individual defendant, unless proven otherwise. The seizure of corporate property under a writ against an individual is therefore illegal. On the issue of relinquishing custody of attached goods: The Court found that the lower court did not err in ordering the release of the attached goods. Because the attachment of the properties was illegal, as they were presumed to be corporate assets and not those of the individual defendant, the lower court acted within its competence. The assignee of the insolvency, who took possession of the goods, was subject to the orders of the court handling the insolvency proceedings. Therefore, only that court had jurisdiction to order the disposition of said assets. The Sheriff's seizure was an illegal act, and the lower court's order to release the goods to the assignee was a proper exercise of its authority to correct the illegal seizure.
Main Doctrine
A writ of attachment issued against a natural person is illegal if it seizes property presumed to belong to a corporation, and the court that issued the writ does not have jurisdiction over the corporation's assets. The proper court to order the disposition of assets under insolvency proceedings is the court handling the insolvency case.