Republic of the
Supreme Court
CONTINENTAL WATCHMAN AND SECURITY
AGENCY, INC.,
Petitioner, - versus - NATIONAL FOOD AUTHORITY, Respondent. |
G.R. No. 171015
Present:
CARPIO MORALES, J., Chairperson,
BRION, BERSAMIN, VILLARAMA,
JR., and SERENO, JJ.
Promulgated:
August 25, 2010 |
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D E C
I S I O N
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BRION, J.:
We resolve in this Decision the petition for review on certiorari filed by Continental Watchman and Security Agency, Inc. (Continental), addressing the decision, dated July 29, 2005,[1] and the resolution, dated January 5, 2006,[2] of the Court of Appeals (CA) in CA-G.R. SP No. 86303, entitled “Continental Watchman and Security Agency, Inc. v. Hon. Abednego O. Adre, Former Presiding Judge of Branch 88 of the Regional Trial Court of Quezon City and National Food Authority.” The CA decision and resolution denied Continental’s petition for certiorari with prayer for temporary restraining order and/or preliminary injunction.
Background
Facts
Continental was one of the twelve security agencies awarded contracts in 1990 to provide security services to the National Food Authority (NFA) under NFA Administrator Pelayo J. Gabaldon. These contracts were periodically extended as they expired.
When Romeo G. David became the NFA Administrator, he initiated a review of all the security service contracts and formulated new bidding procedures. Those who wished to provide security services to the NFA had to pre-qualify before they could join the final bidding. In May 1993, an invitation to pre-qualify and bid for the NFA’s security services was published in a national newspaper and Continental was among the pre-bidding qualifiers. The final bidding, however, was suspended after the applicants, who failed to qualify, obtained a temporary restraining order that stopped the bidding process.
On July 30, 1993, the NFA wrote Continental that it no longer enjoyed its trust and confidence and that Continental had to “pull out [its] guard[s] from NFA offices, installation and warehouses by 3:00 p.m. of August 16, 1993 to allow the incoming security agency to take over the security services for NFA[.]”[3] Continental questioned the NFA’s decision to terminate its contract, and filed on August 9, 1993, before the Quezon City Regional Trial Court (RTC), a complaint[4] against the NFA and NFA Administrator David for damages and injunction with prayer for the issuance of a temporary restraining order. Continental asserted in its complaint that from the tenor of the NFA’s letter, security service contracts had already been awarded to other security agencies without the requisite public bidding. The case was docketed as Civil Case No. Q-93-17139.
RTC Judge Tirso D.C. Velasco issued a temporary restraining order and, later, a writ of preliminary injunction that the NFA challenged before the CA. In its decision[5] in CA-G.R. SP Nos. 32213, 32230, 32274, 32275, and 32276, the CA held that the writ of preliminary injunction had two parts: (1) the part that ordered NFA and its officers to cease and desist from terminating or implementing the termination of Continental’s security service contracts with NFA, and (2) the part that enjoined NFA and its officers from awarding or implementing security service contracts to any other security agencies. The CA annulled the first part of the writ because it violated NFA’s right to enter into lawful contracts, but upheld the second part that prevented NFA from awarding security service contracts to other security agencies without the requisite public bidding.
The NFA appealed this CA decision to this Court, and we affirmed it in National Food Authority v. Court of Appeals,[6] under the following fallo:
IN VIEW WHEREOF, the petition is dismissed and the
decision dated
Based
on this decision, Continental moved for the issuance of a writ of execution[7]
for P26.5 million as payment for the security services rendered to the
NFA during the period that it was enjoined from terminating its contract with
Continental. Continental, later on, amended this amount to P19,803,606.98[8]
and then to P8,445,161.00.[9]
The
NFA opposed these motions because, at that time, the pre-trial and trial in
Civil Case No. Q-93-17139 had yet to be held. On October 3, 1996, the RTC heard
Continental’s motion for execution.
Continental presented a witness who testified on the amount of the
security services rendered. On
October 9, 1996, the RTC issued a writ of execution. The following day, October
10th, P8,445,161.00, from the NFA’s deposit with the Philippine
National Bank, was garnished.
In view of the garnishment, NFA Administrator David (later joined by the NFA) sought relief from this Court by filing a special civil action for certiorari to seek (1) the annulment of the October 9, 1996 order, (2) the annulment of the writ of execution issued pursuant to the October 9, 1996 order, and (3) the issuance of an order directing the RTC to conduct pre-trial and trial. The petition, entitled David v. Velasco,[10] cited the following jurisdictional errors:
I. Respondent judge violated the law and gravely
abused his discretion and acted without jurisdiction in granting the writ of
execution and issuing it in Civil Case No. Q-93-17139 when no pre-trial and no
trial had been held, and no decision had been rendered in said case.
II. The respondent judge violated the law and gravely
abused his discretion when he held the hearing of
III. The respondent judge gravely abused his
discretion in issuing a writ of execution for P8,445,161.00 based on one
document testified to by one incompetent witness for services supposedly rendered
after the contract for services had lapsed.
IV. Even assuming arguendo,
that the order x x
x was the respondent judge's
decision, and the same was valid, the respondent judge violated the law and gravely
abused his discretion when he immediately issued a writ of execution even
before 15 days from receipt of said order had lapsed.
On
The
NFA, based on our David decision,
filed a motion before the RTC for the return of the garnished amount with legal
interest and damages. The RTC
granted this motion in its April 24, 2003 order,[11]
and directed Continental to return the P8,445,161.00 to the NFA.
Continental moved for partial reconsideration but the RTC denied the
motion.
Continental
sought the annulment of the April 24, 2003 order before the CA, through a
petition for certiorari with prayer
for temporary preliminary injunction and/or temporary restraining order in the
case docketed as CA-G.R. No. SP-78214.
The CA, on
The NFA, based on the finality of the RTC’s order of April 24, 2003, moved for execution. The RTC (presided by Judge Abednego Adre) granted the motion.[13] Continental moved for reconsideration but its motion was denied.[14] In August 2004, the RTC issued a writ of execution, and, in October 2004, it issued a notice of garnishment to the known creditors of Continental.
It was Continental’s turn, at this point, to file a petition for certiorari with the CA. It questioned the RTC’s issuance of the writ of execution, at the same time praying for a temporary restraining order and/or preliminary injunction. The case was docketed as CA-G.R. SP No. 86303. On April 12, 2005, the CA issued a temporary restraining order[15] to enjoin Judge Adre and the NFA from serving the notice of garnishment, in the main case, for a period of 60 days from receipt of the order.
On
Continental submits the following issues in the present petition.
ISSUES
I
WHETHER OR NOT PETITIONER HAS THE RIGHT TO SET-OFF THE
SECURITY SERVICE FEE FOR THE GUARD WHO SERVED DURING THE INJUNCTION WAS VALIDLY
IN EFFECT
II
WHETHER OR NOT THE COURT A QUO ACTED PROPERLY WHEN IT DID
NOT HOLD IN ABEYANCE THE ISSUANCE OF A WRIT OF EXECUTION ON THE RETURN OF THE
ILLEGALLY GARNISHED AMOUNT
The
Court’s Ruling
We find the petition unmeritorious.
Continental instituted Civil Case No.
Q-93-17139, for damages and injunction, to question the NFA’s decision to
terminate its contract with the former. The complaint likewise prayed for
the issuance of a temporary restraining order that the trial court granted.[16] Thus, Continental continued to provide
security services to NFA. When this Court subsequently invalidated the
restraining order (thus, cutting short Continental’s security services to
NFA), Continental filed a motion for the issuance of a writ of execution to
collect the cost of security services it provided NFA while the restraining
order was in effect.
The
RTC granted the motion for the issuance of a writ of execution resulting in the
garnishment of its bank deposit for P8,445,161.00. The NFA assailed this garnishment in David, where we held that the issuance of
the writ of execution was not in order.
We said:
Clearly, the final determination of the issues in
Civil Case No. Q-93-17139 was still pending when the trial court granted the
motion for the issuance of a writ of execution, and issued the writ of execution
itself, both dated
Noteworthy, private respondent filed a motion for
leave to file supplemental complaint, and a supplemental complaint on
Private respondent relies on the decision of this Court
in G.R. Nos. 115121-25, which affirmed the decision of the CA in CA-G.R. SP
Nos. 32213, 32230, and 32274-76. However, what was decided in those cases was
the propriety of the negotiated contracts entered into by the NFA with certain
security agencies. Nothing in those cases settled the issues originally raised
by private respondent in its complaint in Civil Case No. Q-93-17139.
The issuance
of the order dated
That the writ of execution had already been satisfied
does not perforce clothe it with validity. As we have earlier discussed, a writ
of execution may only be issued after final judgment. Such a writ issued without final judgment is manifestly void and of no
legal effect. It is as if the writ was not issued at all. Seizure of property
under a void writ of execution amounts to deprivation of property without due
process of law. This Court may direct that whatever action taken under such
a void writ be undone. Otherwise, we would be condoning a patent violation of a
party's right to due process and allowing one party to unjustly enrich himself
at the expense of another.[17]
On
April 24, 2003, the RTC issued an order directing Continental to “return
forthwith but not beyond thirty (30) days from notice the amount of Eight
Million Four Hundred Forty-Five Thousand and One Hundred Sixty One Pesos (P8,445,161.00)
to the defendant National Food Authority.”[18] This order (which Continental questioned
before the CA) is the subject of the presently assailed July 29, 2005 CA
decision, denying Continental’s petition for certiorari with prayer for temporary restraining order and/or
preliminary injunction. This CA
decision significantly held in part
that:
Continental’s case mainly rests on its
interpretation of the pronouncement made by the Supreme Court in the
dispositive portion in G.R. No. 126592[19]
cited above directing the trial court to “proceed and resolve Civil Case
No. Q-93-17139 with dispatch.”
According to Continental, this meant that the trial court was to proceed
with its hearing on the merits of the case and not the NFA’s motion to
return the garnished amount.
x x x
x
We are satisfied that the trial court indeed committed
no grave abuse of discretion in ordering the return of the amount garnished
from the deposits of the NFA with the Philippine National Bank.
To reiterate, the garnishment stemmed from an order of
execution that has been adjudged by the Supreme Court as patently erroneous and
without any legal basis. x x
x.
Hence, we find no error in the trial court’s
action to undo the effects of its prior erroneous and legally infirm
order. x x
x.
We likewise do not agree that there is any incongruity
between the order to return the garnished amount and the trial court’s
fealty to the Supreme Court’s directive to resolve the case before it
with dispatch. Both issues formed
part of the dispositive portion of G.R. No. 126592. Thus, the trial court’s actions
towards the return of the illegally garnished money and the early resolution of
the case both move towards the fair dispensation of justice to all parties
concerned.
x x x
x
x x x
Whether or not Continental is indeed entitled to the garnished amount,
the subject of its supplemental complaint, is still to be settled by trial on
the merits before the court a quo.
Hence, to allow Continental to remain in possession of the garnished amount
before judgment on the merits is had would amount to the deprivation of the
NFA’s property without due process of law.[20]
Continental now submits before us that it should be entitled to a set-off because the proceeds, from the withdrawal of the garnished amount, were used for the salaries of the guards who were assigned to the NFA sites during the period that the NFA was enjoined from terminating its security service contracts with Continental.
The
salaries of security guards that Continental wants to set-off are actually the
subject of Continental’s supplemental complaint[21]
filed in 2002. To avoid multiplicity
of suits, the RTC allowed the supplemental complaint although
Continental’s main complaint was filed in 1993.[22] Continental’s supplemental
complaint is actually a counterclaim that it asserted to defeat the return of
the P8,445,161.00 that it had been unjustly holding since 1996.
At
this point, particularly after our final
and executory Decision declaring null and void the writ of execution that Judge
Velasco issued, it should appear clear to all – especially to
Continental – that it has no legal basis to hold on to the P8,445,161.00
that resulted from the void writ of execution and the equally defective
garnishment that followed. Hence,
Continental is under the absolute obligation to return the garnished amount. Whether it is entitled to recover from
the services it rendered to the NFA, as claimed in Civil Case No. Q-93-17139,
is a matter still to be litigated before the RTC. Accordingly, we uphold the presently
assailed CA ruling that sustained the RTC’s order granting the issuance
of a writ of execution for the return of the P8,445,161.00 to the NFA.
We
likewise order, as NFA prays for, Continental to pay interest on the P8,445,161.00. This interest proceeds from the illegal
garnishment and undue withholding of NFA’s money, and is not at all
related to whatever interests and damages that may be due the parties based on
the merits of the litigation now still before the RTC.
We find it appropriate, too, to impose treble costs against Continental for its claimed set-off that is plainly inappropriate to make at this time. This set-off is for the salaries of the guards who rendered services for Continental while Judge Velasco’s original injunction order was in effect, and represents the very same amount claimed by Continental, in its belated supplemental complaint, that the RTC allowed nine years after the original complaint was filed. The submission before this Court of a live issue still pending before the RTC is a clear abuse of process no different in nature from the forum shopping we abhor, and one that we cannot allow a party to make without appropriate sanction. Hence, we find it in order to impose treble costs against Continental.[23]
WHEREFORE, premises considered, we DENY the petition for review on certiorari and, accordingly, AFFIRM WITH MODIFICATION the Court of Appeals’ decision dated July
29, 2005, and resolution dated January 5, 2006, in CA-G.R. SP No. 86303. The Regional Trial Court, Branch 88 of
Quezon City is directed to immediately issue a writ of execution against
Continental for the amount of P8,445,161.00 and interests thereon,
computed at six percent per annum from the date that the NFA filed its motion
to intervene in the David case, and
at 12% per annum from the finality of this Decision.[24] Treble costs against petitioner
Continental Watchman and Security Agency, Inc.
SO ORDERED.
ARTURO D.
BRION
Associate Justice
WE CONCUR:
CONCHITA CARPIO MORALES
Associate Justice |
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LUCAS P. BERSAMIN
Associate Justice |
MARTIN S.
VILLARAMA, JR. Associate Justice |
MARIA LOURDES P.A.
SERENO
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
CONCHITA CARPIO MORALES
Associate Justice
Chairperson
CERTIFICATION
RENATO
C. CORONA
Chief Justice
[1] Penned by Presiding Justice Romeo A. Brawner and concurred in by Justices Edgardo P. Cruz and Jose C. Mendoza; rollo, pp. 29-37.
[2] Id. at 38.
[3] Id. at 54.
[4]
[5] Dated March 11, 1994, and penned by Justice Eduardo G. Montenegro and concurred in by Justices Minerva P. Gonzaga-Reyes and Lourdes K. Tayao-Jaguros; rollo, pp. 73-84.
[6] G.R. Nos. 115121-25, February 9, 1996, 253 SCRA 470, 482.
[7] Rollo, pp. 85-88.
[8]
[9] Id. at 94-95.
[10] G.R.
No. 126592,
[11] Rollo, pp. 137-138.
[12]
[13] Order dated April 5, 2004, id. at 177.
[14] Order dated June 14, 2004, id. at 194.
[15] Id. at 195.
[16] Id. at 56-57.
[17] Supra note 10, at 369.
[18] Rollo, pp. 267-268.
[19] David v. Velasco, supra note 10.
[20] Rollo, pp. 34-37.
[21]
[22]
[23] Section
3, Rule 142 of the Rules of Court: Where an action or an appeal is found to be
frivolous, double, or treble costs may be imposed on the plaintiff or
appellant, which shall be paid by his attorney, if so ordered by the court.
[24] Eastern Shipping Lines, Inc. v. Court of Appeals, G.R. No. 97412, July 12, 1994, 234 SCRA 78.