MARIANO ACOSTA, ET AL., PETITIONERS VS. HON. CARMELINO G. ALVENDIA, AS PRESIDING JUDGE OF BRANCH XVI, COURT OF FIRST INSTANCE OF MANILA AND DE SANTOS AGRICULTURAL DEVELOPMENT, I…

This is a petition for a writ of prohibition to restrain respondents Judge of
the Court of First Instance of Manila and De Santos Agricultural Development,
Inc., from further proceeding in Civil Case No. 36377, entitled “De Santos
Agricultural Development, Inc., plaintiff, vs. Ricardo L. Castelo,
etc., el al., defendants.”

It appears that in Tenancy Case No. 4971-R of the Court of Agrarian
Relations, Mariano Acosta, et al., filed a petition praying for a readjustment
of the sharing ratio governing their tenancy relationship with Hacienda de
Santos No. 5 situated in several municipalities of the province of Nueva Ecija
and for other sundry readjustment in connection with said relationship. The
petition made as party respondents the hacienda itself and one Alberto de Santos
as manager of the hacienda.

The case was not tried on the merits but was submitted to arbitration upon
direction of the President of the Philippines. On August 5, 1954, Judge Roldan,
presiding judge of the Court of Industrial Relations, who was designated as
arbiter, rendered his award ordering that a reliquidation be made in accordance
with certain conditions and findings he made therein. On the basis of the
reliquidation made, the Agrarian Court on January 10, 1958 issued an order
awarding in favor of the tenants whose names appear listed therein, certain
amounts of palay that were found to be payabje to them, and ordering respondents
to make delivery of the palay in accordance with the award. This order not
having been complied with, the Agrarian Court directed that a writ of execution
be issued and, on March 12, 1958, the clerk of court acted accordingly by
requiring the provincial sheriff to collect from respondents the amounts of
palay adjudicated to the tenants, or the money equivalent thereof, and to “levy
upon the properties of the above-named respondents, both movable and real and
cause to be collected therefrom the total amount due to the petitioners under
the aforementioned order dated January 10, 1958.” Protesting the enforcement of
the writ of execution against him personally, Alberto de Santos filed a motion
with the agrarian court praying that the fwrit be quashed insofar as it requires
that a levy be made upon his own personal properties since he is not involved in
the case in his personal capacity, but only as manager of the hacienda. This
motion, however, was denied, whereupon Alberto de Santos brought the case to
this Court through a petition for review on certiorari. (G. R. No. L-13785.)^[*] Speaking thru Justice Bautista Angelo, we
sustained the petitioner’s claim in a decision promulgated on October 20, 1959,
and there said, among other things, that “enough properties that may be levied
upon belonging to the hacienda can be ascertained and determined with little
diligence and discernment without implicating properties of a person who is
foreign to the case.”

In the meantime, herein respondent De Santos Agricultural Development, Inc.,
a domestic corporation organized sometime in 1955, filed a third party claim
against the provincial sheriff of Nueva Ecija claiming ownership of the palay
which the latter had levied upon. Alleging that the sheriff, despite the third
party claim, threatened to proceed with the sale of the palay, respondent
corporation instituted the present’proceedings for injunction before the Court
of First Instance of Manila (Civil Case No. 36377) against the sheriff and the
petitioners Manuel Acosta, et al. As prayed for, a preliminary writ was issued
restraining the provincial sheriff of Nueva Ecija: from further proceeding with
the execution of the judgment in the tenancy case pending determination of the
ownership of the palay levied upon.

In due time, the defendants, herein petitioners, filed their answer with a
counterclaim and also moved for the dissolution of the writ of preliminary
injunction on the grounds of lack of jurisdiction and lack of cause of action.
Acting upon the motion, the respondent Judge promulgated an order providing for
the dissolution of the writ of preliminary injunction upon the filing by
petitioners of a bond in favor of the respondent corporation in the sum of
P20,000.00. Of this order, both parties asked for reconsideration, the
respondent corporation maintaining that Felipe de Santos, who died long before
the filing of Tenancy Case No. 4971-A, was named therein as the owner of
Hacienda de Santos No. 5 so that the judgment rendered in said case was a
judgment against him which cannot be enforced against his heirs.

In an order promulgated after hearing on July 19, 1958, the respondent Judge
found that “the heirs of Felipe de Santos should have been the respondents in
the C.A.R. case” inasmuch as when the petition in the tenancy case was filed on
December 22, 1953, they were the true owners of the family hacienda (Hacienda de
Santos No. 5) the same having been inherited by them from Felipe de Santos upon
the latter’s death on September 4, 1945; that the said heirs “are the sole
stockholders of the plaintiff corporation”; and that “their only contribution to
the capital of the corporation is the land involved in the C.A.R. case which
they inherited from Felipe de Santos”. The respondent Judge, therefore, held
that “this is one instance where the corporate fiction should be set aside and
the corporation and its stockholders should be considered one and the same
person. The corporation may not be used as an instrument to prevent the
execution of the judgment of the C.A.R. case.” However, said respondent Judge
refused to reconsider its order or to grant petitioners’ prayer that the
preliminary writ be dissolved without requiring them to post a bond. Hence, the
present petition for a writ of prohibition.

We find the petition to be meritorious.

Considering the findings of the respondent Judge, from the evidence already
presented, that the heirs of the deceased Felipe de Santos are the sole
stockholders of the respondent corporation and their only contribution to the
capital of said corporation is the hacienda involved in the tenancy case which
they inherited from Felipe de Santos, and said respondent Judge being also of
the opinion “that this is an instance where the corporate action should be set
aside and the corporation and its stockholders should be considered one and the
same person,” and that the “corporation may not be used as an instrument to
prevent the execution of the judgment of the C.A.R. case,” it is difficult to
understand why the petition for injunction was ever entertained at all.

Counsel for the respondent corporation maintains that the judgment “obtained
against Felipe de Santos,” a deceased person, is not enforceable against his
heirs who are not made parties thereto. It will be recalled, however, that the
petition in the tenancy case made as party respondents the hacienda itself and
Alberto de Santos, one of the heirs of the deceased, in his capacity as general
manager of the hacienda. Needless to say, the judgment rendered against said
general manager would be valid and binding as against whoever are the owners of
the hacienda. In this connection, it should be stated that the award sought to
be executed was made as early as August 5, 1954, whereas the respondent
corporation was organized and registered by the heirs of Felipe de Santos as
sole stockholders therein only on May 17, 1955.

Without mentioning the fact that there appears to be a tenancy relationship
between the respondent corporation and herein petitioners who are working in
Hacienda de Santos No. 5′ as tenants, it would also appear that the respondent
Judge has acted outside of his jurisdiction. The jurisdiction of courts of first
instance to issue writs of injunction is defined and limited in the Judiciary
Act of 1948 (Republic Act No. 296, as amended), which provides in its section
44(n) as follows:

“Sec. 44. Original Jurisdiction.-Courts of First Instance shall have
original jurisdiction:

* * * * * * *

“(n) Said courts and their judges, or any of them, shall have power to issue
writs of injunction, mandamus, certiorari, prohibition, quo warranto and habeas
corpus in their respective provinces and districts, in the manner provided in
the Rules of Court.”

Under section 2, Rule 60 of the Rules of Court, a preliminary injunction may
be granted by the Judge of the Court of First Instance ‘in any action pending in
his district”. These provisions clearly show that the jurisdiction or authority
of courts of first instance to control or restrain acts by means of the writ of
injunction is limited to acts which are being committed or about to be committed
within the territorial boundaries of their respective provinces and
districts.

Wherefore, the writ of prohibition prayed for is granted. Costs against the
respondent corporation.

Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Reyes, J.B.L.,
Barrera, and Paredes, JJ., concur.

Writ granted.

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^[*] 106 Phil., 380; 58 Off. Gaz., [44]
7221.