Paper Industries Corporation of the Philippines vs. Intermediate Appellate Court

A coordinate and co-equal court has no jurisdiction to restrain, by injunction or restraining order, the execution of a judgment rendered by another branch of the same court; the court that rendered the judgment retains exclusive supervisory control over its process of execution, including all questions of fact and law arising therefrom and the conduct of its ministerial officers.

Petitioner Paper Industries Corporation of the Philippines and private respondent Vicmar Development Corporation were parties to a civil action (Civil Case No. 3963) before Branch 145 of the Regional Trial Court of Makati, presided by Judge Madayag, which resulted in a monetary judgment in favor of the petitioner. The dispute arose during the execution phase, when the private respondent sought to nullify the sheriff's levy proceedings by filing a separate action for damages with prayer for preliminary injunction before Branch 132 of the same Regional Trial Court, presided by Judge Tamayo. The legal question centers on the jurisdictional boundaries between coordinate branches of the same court regarding execution proceedings and the supervisory authority of the rendering court over its ministerial officers.

On October 20, 1983, petitioner Paper Industries Corporation of the Philippines obtained a favorable judgment against private respondent Vicmar Development Corporation in Civil Case No. 3963 before Branch 145 of the Regional Trial Court of Makati (the Madayag court), awarding the principal sum of P3,462,470.75, accrued interest of P157,091.82, and P100,000.00 as attorney's fees. The private respondent paid the principal amount but refused to pay the interest charges and attorney's fees, claiming there was a verbal agreement that these had been waived. The Madayag court, however, agreed with the petitioner that no such waiver existed, and on June 6, 1984, a writ of execution was issued for the unpaid balance of P257,091.82.

On June 13, 1984, the sheriff levied on machineries and equipment of the private respondent worth P1,600,000.00 and real properties worth at least P330,000.00. On October 14, 1984, the sheriff again levied on logs belonging to the private respondent worth more than P2,295,000.00. These logs were subsequently bought by the petitioner at an auction sale and later sold to Union Plywood Corporation. The private respondent contended that the October 14, 1984 levy was improper because the writ of execution had a lifetime of only sixty days from receipt, expiring on August 12, 1984, making it a "dead writ" under Section 11, Rule 39 of the Rules of Court.

On December 14, 1984, the private respondent filed Civil Case No. 9301 before Branch 132 of the same Regional Trial Court (the Tamayo court), seeking to nullify the sheriff's proceedings and praying for a writ of preliminary injunction against the petitioner and the sheriff. The complaint was amended on February 2, 1985, styled as an action for damages with prayer for a writ of preliminary injunction. The private respondent alleged that the unlawful enforcement of the writ on October 14, 1984 caused damages of at least P12,000,000.00, as the 1,700 cubic meters of logs levied were part of a 5,000-cubic-meter quota approved by President Marcos and contracted for shipment to Sheng Kee Enterprises Co., Ltd. in Hong Kong. The Tamayo court issued restraining orders on December 19, 1984 and January 7, 1985, directing the sheriff to cease and desist from further taking possession of or disposing of the logs.

Meanwhile, on December 20, 1984, the petitioner filed a motion before the Madayag court for an alias writ of execution, which was granted on January 2, 1985. On January 18, 1985, the petitioner moved to dismiss Civil Case No. 9301 before the Tamayo court on the ground of lack of jurisdiction over the subject matter, but the motion was denied on February 20, 1985. The Intermediate Appellate Court affirmed this denial on May 20, 1985, ruling that Civil Case No. 9301 was a separate and distinct action from Civil Case No. 3963, and that because the writ of execution had become a dead writ, the levy was void and the Madayag court never acquired custody over the property. The appellate court concluded that the Tamayo court acquired custodial possession over the subject matter when it assumed jurisdiction over the damages case.

• Nature of the Action: Petitioner argued that Civil Case No. 9301, while captioned as an action for damages with prayer for writ of preliminary injunction, is actually an action to nullify the proceedings conducted by the deputy sheriff in Civil Case No. 3963 before Branch 145, a coordinate and co-equal court.
• Jurisdictional Interference: Petitioner maintained that Branch 132 cannot interfere with the orders or final judgment of Branch 145, as they are coordinate and co-equal courts, and that the former has no jurisdiction to restrain the execution of the latter's judgment.

• Jurisdiction of Coordinate Courts: Whether Branch 132 of the Regional Trial Court of Makati (Tamayo court), being a coordinate and co-equal court, has jurisdiction over Civil Case No. 9301 with the power to issue a restraining order to stop the execution of the judgment of Branch 145 of the same court (Madayag court).

• Jurisdiction of Coordinate Courts: No. Branch 132 abused its discretion in assuming jurisdiction over Civil Case No. 9301, as the nature of the action, despite its caption, involves the validity of execution proceedings in Civil Case No. 3963, over which the Madayag court retained exclusive supervisory control to the exclusion of all other coordinate courts.

• Jurisdiction of Coordinate Courts: The nature of an action is determined not by its caption but by the facts alleged in the complaint. An examination of the amended complaint in Civil Case No. 9301 discloses that it questions the validity of the enforcement of the June 6, 1984 writ of execution issued by Branch 145 in Civil Case No. 3963, alleging that the deputy sheriff had no authority to enforce the writ on October 14, 1984 because its lifetime had expired after sixty days pursuant to Section 11, Rule 39 of the Rules of Court. The damages sought are merely the consequence of the alleged wrongful implementation of the writ. A case in which execution has been issued is regarded as still pending, and all proceedings on execution are proceedings in the suit. The court which rendered the judgment has general supervisory control over its process of execution, carrying with it the right to determine every question of fact and law involved in the execution. The deputy sheriff, as a ministerial officer of the Madayag court, is under the control and supervision of that court to the exclusion of all others; the Tamayo court never acquired jurisdiction over him. The alleged irregularities in the execution — including the enforcement of a dead writ and the propriety of a second levy when the first was allegedly sufficient — must be litigated in the Madayag court, which retained jurisdiction over its judgment and all incidents thereof. Coordinate branches of the same court, having equal authority and concurrent jurisdiction, should not, cannot, and are not permitted to interfere with their respective cases, much less with their orders or judgments, by means of injunction.

• Supervisory Control of the Rendering Court Over Execution — The court which rendered the judgment retains general supervisory control over its process of execution, including the right to determine every question of fact and law which may be involved in the execution. This control extends to the conduct of its ministerial officers, such as the sheriff, to the exclusion of all other coordinate courts. The Court applied this doctrine by holding that the Madayag court, having rendered the judgment in Civil Case No. 3963, retained exclusive jurisdiction over all execution proceedings and incidents thereof, including the alleged irregularity of enforcing a dead writ.

• Non-Interference Among Coordinate Courts — The various branches of a court having the same or equal authority and exercising concurrent and coordinate jurisdiction should not, cannot, and are not permitted to interfere with their respective cases, much less with their orders or judgments, by means of injunction. The Court applied this principle to hold that Branch 132's issuance of restraining orders against the sheriff and the petitioner constituted improper interference with the execution proceedings of Branch 145.

• Nature of Action Determined by Facts Alleged — The nature of an action is determined by the facts alleged in the complaint, not by its caption or the designation given by the parties. The Court applied this principle by examining the allegations in the amended complaint in Civil Case No. 9301 and concluding that, despite being styled as an action for damages, it was in substance an action to annul the sheriff's execution proceedings in Civil Case No. 3963.

• Pending Case During Execution — A case in which an execution has been issued is regarded as still pending, so that all proceedings on execution are proceedings in the suit. The judgment passes beyond review only when it has been satisfied, as satisfaction is the last act and end of the proceedings. The Court relied on this principle to establish that the Madayag court retained jurisdiction over Civil Case No. 3963 during the execution phase.

• "The general rule is 'A case in which an execution has been issued is regarded as still pending so that all proceedings on the execution are proceedings in the suit. There is no question that the court which rendered the judgment has a general supervisory control over its process of execution and this power carries with it the right to determine every question of fact and law which may be involved in the execution.'" — This passage articulates the ratio decidendi: the rendering court's exclusive supervisory authority over execution proceedings, which precludes interference by coordinate courts.

• "The various branches of a Court of First Instance of a province or city, having as they have the same or equal authority and exercising as they do concurrent and coordinate jurisdiction should not, cannot, and are not permitted to interfere with their respective cases, much less with their orders or judgment, by means of injunction." — This is the canonical formulation of the non-interference doctrine among coordinate branches, cited from Hubahib vs. Insular Drug Co., Inc., and applied as the controlling principle barring Branch 132 from restraining Branch 145's execution.

• "Execution of its judgment having been carried out by the sheriff with the levy and sale of the judgment debtor's properties, [the judgment debtor] could not in the guise of a new and separate second action ask another court of co-ordinate jurisdiction to interfere by injunction with the execution proceedings." — This passage from De Leon vs. Salvador directly addresses the situation where a judgment debtor attempts to circumvent the rendering court by filing a separate action before a coordinate court, which the Court found analogous to the private respondent's filing of Civil Case No. 9301.

• De Tavera vs. Philippine Tuberculosis Society, Inc., 112 SCRA 243 — Cited for the principle that the facts alleged in the complaint are determinative of the nature of the action filed.
• Alger Electric, Inc. vs. Court of Appeals, 135 SCRA 37 — Cited alongside De Tavera for the same principle regarding determination of the nature of an action by its allegations.
• Seavan Carrier, Inc. vs. GTI Sportswear Corporation, 137 SCRA 580 — Cited as controlling authority for the rule that a case in which execution has been issued is still pending, and that the rendering court retains supervisory control over its execution process.
• Vda. de Paman vs. Seneris, 115 SCRA 709 — Cited within the Seavan Carrier quotation for the proposition that the rendering court has general supervisory control over execution and the right to determine every question of fact and law involved therein.
• De Leon vs. Salvador, 36 SCRA 567 — Cited as controlling authority for the rule that the court which rendered the judgment retains exclusive jurisdiction over its execution to the exclusion of all other coordinate courts, and that a judgment debtor may not, by filing a separate action, ask a coordinate court to interfere by injunction with execution proceedings.
• Hubahib vs. Insular Drug Co., Inc., 64 Phil. 119 (1937) — Cited as controlling authority for the doctrine that coordinate branches of the same court should not and cannot interfere with their respective cases or orders by means of injunction.

• Section 11, Rule 39, Rules of Court — Governs the lifetime of a writ of execution, providing that the writ must be enforced within sixty days from receipt. The private respondent invoked this provision to argue that the June 6, 1984 writ of execution had become a "dead writ" when the sheriff levied on the logs on October 14, 1984, more than sixty days after receipt. The Court acknowledged the provision but held that the question of whether the writ was indeed dead and the consequences thereof must be resolved by the Madayag court, not the Tamayo court.

Fernan (Chairman), Paras, Padilla, Bidin, and Cortes, JJ., concurred.