Ching vs. Court of Appeals

A co-equal court has no jurisdiction to nullify or interfere by injunction with the judgments, orders, or execution processes of another court of concurrent or coordinate jurisdiction, and a non-party spouse whose conjugal property is levied to satisfy the other spouse's judgment obligation is not a "stranger" within the meaning of Section 16, Rule 39 of the Rules of Court, such that the proper remedy is intervention in the executing court rather than a separate annulment action.

Family Savings Bank extended credit to Cheng Ban Yek & Co., Inc., with petitioner Alfredo Ching acting as surety. When the obligation went unpaid, the Bank sought judicial collection and obtained attachment over the Ching spouses' conjugal property in Quezon City, covered by Transfer Certificate of Title No. S-3151. The conjugal nature of the property and the fact that Encarnacion Ching was not a party to the collection case became the focal points of multiple collateral proceedings initiated by the spouses across three jurisdictions.

On August 6, 1981, Family Savings Bank filed a complaint for collection of a sum of money with the Court of First Instance of Manila against its debtor Cheng Ban Yek & Co., Inc. and petitioner Alfredo Ching, who had acted as surety for the debtor. A day later, the Bank obtained a writ of preliminary attachment, and respondent Ferdinand J. Guerrero, deputy sheriff of the CFI of Manila, levied upon a parcel of land covered by Transfer Certificate of Title No. S-3151, a conjugal property belonging to spouses Alfredo and Encarnacion Ching.

On July 26, 1982, petitioners filed a petition with the CFI of Rizal seeking to declare illegal the levy on attachment upon their conjugal property, claiming the branch sheriff had no authority to levy upon property belonging to the conjugal partnership. The trial court dismissed the case on August 8, 1983 for lack of jurisdiction, the subject property being already under custodia legis of the CFI of Manila. The trial court specifically advised petitioners that Encarnacion Ching's rights could be ventilated in the Manila collection case by the mere expedient of intervening therein.

Meanwhile, on August 12, 1982, summary judgment was rendered in the collection case in favor of the Bank. The defendants, including Alfredo Ching, appealed to the Court of Appeals. While the case was on appeal, the trial court granted the Bank's motion for execution pending appeal. Consequently, the attached conjugal property was levied upon and sold through public auction by the deputy sheriff to the Bank on October 10, 1983. Alfredo Ching had earlier filed a Motion for Reconsideration and to Quash Writ of Execution before the CFI of Manila, specifically arguing that the execution was invalid for having been enforced upon their conjugal property, and raised the same argument on appeal.

On September 5, 1984, petitioners filed a second annulment case, this time with the RTC of Makati, seeking to declare void the levy and sale on execution of their conjugal property by reiterating the argument that the branch sheriff had no authority to levy upon conjugal partnership property. On November 15, 1985, the Court of Appeals dismissed the appeal in the collection case and affirmed in toto the summary judgment. The matter was elevated to the Supreme Court on petition for review but was dismissed for having been filed out of time and for lack of merit, rendering the decision in the collection case final.

On November 13, 1990, the RTC of Makati rendered judgment in the second annulment case in favor of petitioners, declaring null and void the levy and sale on execution upon the conjugal property. Respondents elevated the decision to the Court of Appeals, which on October 27, 1994 reversed and set aside the RTC of Makati ruling, declaring the Makati annulment case barred by res judicata because of the prior Rizal annulment case and Manila collection case.

• Res Judicata and Waiver: Petitioners argued that the Court of Appeals erred in holding that the decisions in the Manila collection case and Rizal annulment case, taken together, constitute res judicata to the annulment case filed with the RTC of Makati, and that, assuming res judicata existed, respondents had waived the defense.
• Waiver of Conjugal Rights: Petitioners contended that the Court of Appeals erred in holding that Encarnacion Ching waived or abandoned her right or claim on her conjugal property when she did not intervene in the Manila collection case.
• Equitable Considerations: Petitioners maintained that, in any event, the Court of Appeals should have decided the Makati annulment case on its merits on equitable considerations.

• Jurisdiction of Co-equal Courts: Whether the RTC of Makati had jurisdiction to nullify the levy and sale on execution ordered by the CFI of Manila, a co-equal and coordinate court.
• Third-Party Claimant Status: Whether a spouse who was not a party to the suit but whose conjugal property was executed on account of the other spouse's judgment obligation is a "stranger" entitled to file a separate action under Section 16, Rule 39 of the Rules of Court.

• Jurisdiction of Co-equal Courts: No. The RTC of Makati had no authority to nullify the levy and sale on execution ordered by the CFI of Manila, a co-equal court; the determination of the validity of execution properly falls within the jurisdiction of the court that rendered the judgment and issued the writ.
• Third-Party Claimant Status: No. A non-party spouse whose conjugal property is levied to satisfy the other spouse's judgment obligation is not a "stranger" under Section 16, Rule 39, and the proper remedy is intervention in the executing court rather than a separate annulment action.

• Jurisdiction of Co-equal Courts: The long-standing doctrine, beginning with Orais vs. Escaño and consistently reaffirmed through Darwin vs. Tokonaga, holds that no court has the power to interfere by injunction with the judgments or decrees of a court of concurrent or coordinate jurisdiction. The various trial courts of a province or city, having the same or equal authority, should not and cannot interfere with their respective cases, much less with their orders or judgments, as a contrary rule would lead to confusion and seriously hamper the administration of justice. The conjugal property was under custodia legis of the CFI of Manila from the time of the preliminary attachment through the levy and sale on execution, all carried out upon orders of that court. Any and all questions concerning the validity and regularity of those processes necessarily had to be addressed to the CFI of Manila itself. The RTC of Makati therefore lacked jurisdiction to hear the annulment case, rendering it unnecessary to resolve the remaining issues raised by petitioners.

• Third-Party Claimant Status: Section 16 of Rule 39 authorizes a third person who is not the judgment debtor or his agent to vindicate his claim to levied property through a separate and distinct action. In Ong vs. Tating, the Court clarified that such a separate action is proper only if instituted by a "stranger" to the suit in which execution issued; if the claim is made by a party to the action, relief may be obtained only from the executing court. In Mariano vs. Court of Appeals, the Court held that the husband of a judgment debtor cannot be deemed a "stranger" to the case prosecuted against his wife, such that a separate annulment action was impermissible. The facts of Mariano are analogous: Encarnacion Ching's conjugal property was being executed on account of Alfredo Ching's judgment obligation, and she was not a "stranger" entitled to file a separate action. The proper remedy was intervention in the collection case, as the trial court in the Rizal annulment case had specifically advised. The Court distinguished cases where separate actions were allowed — Sy vs. Discaya and Naguit vs. Court of Appeals — on the ground that those involved paraphernal or exclusive property of a non-party spouse, who could truly be deemed a "stranger," whereas here the levy was upon conjugal property. Moreover, Alfredo Ching had already raised the conjugal nature of the property both in the trial court and on appeal, so due process was afforded as regards execution on the conjugal property.

• Doctrine of Non-Interference Among Co-equal Courts — No court has the power to interfere by injunction with the judgments or decrees of a court of concurrent or coordinate jurisdiction. Trial courts of a province or city having the same or equal authority should not, cannot, and are not permitted to interfere with their respective cases, much less with their orders or judgments. Applied here to hold that the RTC of Makati lacked jurisdiction to nullify the levy and sale on execution ordered by the CFI of Manila.
• "Stranger" Requirement Under Section 16, Rule 39 — A separate and distinct action to vindicate a claim to levied property is proper only if instituted by a "stranger" to the suit in which execution issued. If the claim is made by a party to the action, relief may be obtained only from the executing court. A non-party spouse whose conjugal property is executed on account of the other spouse's judgment obligation is not a "stranger," the proper remedy being intervention in the executing court. A spouse may file a separate action only when what is executed upon is paraphernal or exclusive property, in which case the spouse can truly be deemed a "stranger."

• "no court has the power to interfere by injunction with the judgments or decrees of a court of concurrent or coordinate jurisdiction. The various trial courts of a province or city, having the same or equal authority, should not, cannot, and are not permitted to interfere with their respective cases, much less with their orders or judgments. A contrary rule would obviously lead to confusion and seriously hamper the administration of justice." — This passage articulates the canonical formulation of the doctrine of non-interference among co-equal courts, the ratio decidendi for the jurisdictional ruling.
• "the husband of the judgment debtor cannot be deemed a 'stranger' to the case prosecuted and adjudged against his wife, which would allow the filing of a separate and independent action." — This restates the holding in Mariano vs. Court of Appeals as applied to the present case, defining the boundaries of who qualifies as a "stranger" under Section 16, Rule 39.
• "The determination of whether or not the levy and sale of a property in execution of a judgment was valid, properly falls within the jurisdiction of the court that rendered the judgment and issued the writ of execution." — This states the operative rule on which court has jurisdiction over challenges to execution proceedings, directly supporting the dismissal of the Makati annulment case.

• Orais vs. Escaño, 14 Phil. 208 (1909) — Originating precedent for the doctrine that no court may interfere by injunction with the judgments or decrees of a co-equal court; followed.
• Nuñez vs. Low, 19 Phil. 244 (1911) — Early reaffirmation of the non-interference doctrine; followed.
• Cabigao vs. del Rosario, 44 Phil. 182 (1922) — Further reaffirmation of the non-interference doctrine; followed.
• Hubahib vs. Insular Drug Co., Inc., 64 Phil. 119 (1937) — Reaffirmation of the non-interference doctrine; followed.
• National Power Corp. vs. De Veyra, 3 SCRA 646 (1961) — Reaffirmation of the non-interference doctrine; followed.
• Luciano vs. Provincial Governor, 28 SCRA 517 (1969) — Reaffirmation of the non-interference doctrine; followed.
• De Leon vs. Hon. Judge Salvador, 36 SCRA 567 (1970) — Reaffirmation of the non-interference doctrine; followed.
• Cojuangco vs. Villegas, 184 SCRA 374 (1990) — Reaffirmation of the non-interference doctrine; followed.
• Darwin vs. Tokonaga, 197 SCRA 442 (1991) — Most recent reaffirmation of the non-interference doctrine cited in the decision; followed.
• Rejuso vs. Estinopa, 72 SCRA 509 (1976) — Cited for the proposition that the validity of levy and sale on execution falls within the jurisdiction of the court that rendered the judgment and issued the writ; followed.
• Ong vs. Tating, 149 SCRA 265 (1987) — Elucidated the applicability of Section 16, Rule 39, holding that a separate action is proper only if instituted by a "stranger" to the execution suit; followed.
• Mariano vs. Court of Appeals, 174 SCRA 59 (1989) — Held that the husband of a judgment debtor is not a "stranger" and cannot file a separate annulment action; controlling precedent applied on all fours to the present case.
• Sy vs. Discaya, 181 SCRA 378 (1990) — Distinguished; allowed a separate action because the property executed upon was paraphernal or exclusive property of a non-party spouse who could truly be deemed a "stranger."
• Naguit vs. Court of Appeals, 347 SCRA 60 (2000) — Distinguished on the same ground as Sy vs. Discaya.

• Section 16, Rule 39, Rules of Court — Governs proceedings where property levied on is claimed by a third person. Authorizes a person other than the judgment obligor or his agent to vindicate his claim to the property in a separate action. Applied to determine whether Encarnacion Ching qualified as a "stranger" entitled to file a separate annulment action; the Court held she did not, as a non-party spouse whose conjugal property was executed is not a "stranger" within the meaning of this provision.

Davide, Jr., C.J. (Chairman), Vitug, J., and Carpio, J., concurred. Ynares-Santiago, J., was on leave.