Case Digest: Traders Royal Bank v. Immediate Appellate Court, G.R. No. L-66321, October 31 1984

   Labor Law | Appeal 

• Traders Royal Bank filed a suit on March 18, 1983, against Remco Alcohol Distillery, Inc. (REMCO) for the recovery of P2,382,258.71 and obtained a writ of pre-attachment against REMCO's assets.
• Deputy Sheriff levied 4,600 barrels of alcohol at REMCO.
• La Tondeña, Inc. filed a third-party claim, asserting ownership over the attached property.
• La Tondeña filed a complaint-in-intervention but later filed a motion to withdraw.
• RTC-Pasay: Initially granted the motion but later reconsidered, declaring the alcohol still owned by REMCO.
• La Tondeña filed a civil case in RTC-Bulacan, claiming ownership and seeking a preliminary injunction.
• Traders Royal Bank opposed the motion and filed a motion to dismiss.
• RTC-Bulacan: Issued an order declaring La Tondeña as the owner and granting the injunction.
• Traders Royal Bank filed a petition to annul the RTC-Bulacan order and dissolve the injunction.
• Intermediate Appellate Court: Dismissed the petition, citing no legal and factual basis.

WoN the a Regional Trial Court has the authority issue, at the instance of a third-party claimant, an injunction enjoining the sale of property previously levied upon by the sheriff pursuant to a writ of attachment issued by another Regional Trial Court. YES

Petitioner contends that respondent Judge of the Regional T- trial Court of Bulacan acted without jurisdiction in entertaining Civil Case No. 7003-M, in authorizing the issuance of a writ of preliminary mandatory and prohibitory injunction, which enjoined the sheriff of Pasay City from interferring with La Tondeña's right to enter and withdraw the barrels of alcohol and molasses from Remco's ageing warehouse and from conducting the sale thereof, said merchandise having been previously levied upon pursuant to the attachment writ issued by the Regional Trial Court of Pasay City in Civil Case No. 9894-P. It is submitted that such order of the Bulacan Court constitutes undue and illegal interference with the exercise by the Pasay Court of its coordinate and co-equal authority on matters properly brought before it.

We find the petition devoid of merit.

There is no question that the action filed by private respondent La Tondeña, Inc., as third-party claimant, before the Regional Trial Court of Bulacan in Civil Case No. 7003-M wherein it claimed ownership over the property levied upon by Pasay City Deputy Sheriff Edilberto Santiago is sanctioned by Section 14, Rule 57 of the Rules of Court. Thus — têñ.£îhqwâ£

If property taken be claimed by any person other than the party against whom attachment had been issued or his agent, and such person makes an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serves such affidavit upon the officer while the latter has possession of the property, and a copy thereof upon the attaching creditor, the officer shall not be bound to keep the property under the attachment, unless the attaching creditor or his agent, on demand of said officer, secures aim against such claim by a bond in a sum not greater than the value of the property attached. In case of disagreement as to such value, the same shall be decided by the court issuing the writ of attachment. The officer shall not be liable for damages, for the taking or keeping of such property, to any such third-party claimant, unless such a claim is so made and the action upon the bond brought within one hundred and twenty (120) days from the date of the filing of said bond. But nothing herein contained shall prevent such third person from vindicating his claim to the property by proper action ...

The foregoing rule explicitly sets forth the remedy that may be availed of by a person who claims to be the owner of property levied upon by attachment, viz: to lodge a third- party claim with the sheriff, and if the attaching creditor posts an indemnity bond in favor of the sheriff, to file a separate and independent action to vindicate his claim (Abiera vs. Court of Appeals, 45 SCRA 314). And this precisely was the remedy resorted to by private respondent La Tondeña when it filed the vindicatory action before the Bulacan Court.

The case before us does not really present an issue of first impression. In Manila Herald Publishing Co., Inc. vs. Ramos, 1 this Court resolved a similar question in this wise: têñ.£îhqwâ£

The objection that at once suggests itself to entertaining in Case No. 12263 the motion to discharge the preliminary attachment levied in Case No. 11531 is that by so doing one judge would interfere with another judge's actuations. The objection is superficial and will not bear analysis.

It has been seen that a separate action by the third party who claims to be the owner of the property attached is appropriate. If this is so, it must be admitted that the judge trying such action may render judgment ordering the sheriff of whoever has in possession the attached property to deliver it to the plaintiff-claimant or desist from seizing it. It follows further that the court may make an interlocutory order, upon the filing of such bond as may be necessary, to release the property pending final adjudication of the title. Jurisdiction over an action includes jurisdiction over an interlocutory matter incidental to the cause and deemed necessary to preserve the subject matter of the suit or protect the parties' interests. This is self-evident.

xxx xxx xxx

It is true of course that property in custody of the law can not be interfered without the permission of the proper court, and property legally attached is property in custodia legis. But for the reason just stated, this rule is confined to cases where the property belongs to the defendant or one in which the defendant has proprietary interest. When the sheriff acting beyond the bounds of his office seizes a stranger's property, the rule does not apply and interference with his custody is not interference with another court's order of attachment.

It may be argued that the third-party claim may be unfounded; but so may it be meritorious, for that matter. Speculations are however beside the point. The title is the very issue in the case for the recovery of property or the dissolution of the attachment, and pending final decision, the court may enter any interlocutory order calculated to preserve the property in litigation and protect the parties' rights and interests.

Generally, the rule that no court has the power to interfere by injunction with the judgments or decrees of a concurrent or coordinate jurisdiction having equal power to grant the injunctive relief sought by injunction, is applied in cases where no third-party claimant is involved, in order to prevent one court from nullifying the judgment or process of another court of the same rank or category, a power which devolves upon the proper appellate court . The purpose of the rule is to avoid conflict of power between different courts of coordinate jurisdiction and to bring about a harmonious and smooth functioning of their proceedings.

It is further argued that since private respondent La Tondeña, Inc., had voluntarily submitted itself to the jurisdiction of the Pasay Court by filing a motion to intervene in Civil Case No. 9894-P, the denial or dismissal thereof constitutes a bar to the present action filed before the Bulacan Court.

We cannot sustain the petitioner's view. Suffice it to state that intervention as a means of protecting the third-party claimant's right in an attachment proceeding is not exclusive but cumulative and suppletory to the right to bring an independent suit. The denial or dismissal of a third-party claim to property levied upon cannot operate to bar a subsequent independent action by the claimant to establish his right to the property even if he failed to appeal from the order denying his original third-party claim.

WHEREFORE, the instant petition is hereby dismissed and the decision of the Intermediate Appellate Court in AC-G.R. No. SP-01860 is affirmed, with costs against petitioner Traders Royal Bank.