LAW FIRM OF ABRENICA, TUNGOL & TIBAYAN, DANILO M. TUNGOL AND ABELARDO M. TIBAYAN, PETITIONERS, VS. THE COURT OF APPEALS AND ERLANDO A. ABRENICA, RESPONDENTS.

Law Firm of Abrenica, Tungol and Tibayan versus Court of Appeals

The Case

This is a petition for review on certiorari brought by the Law Firm of Abrenica, Tungol and Tibayan, together with its partners Danilo Tungol and Abelardo Tibayan, against the Court of Appeals and their fellow partner Erlando Abrenica. The dispute began as a complaint for accounting, return and transfer of partnership funds with damages, filed before the Securities and Exchange Commission, arising from a real estate transaction that the petitioners claim was a partnership transaction. The case matters because it draws a bright line between the correction of errors of jurisdiction, which is the sole office of a special civil action for certiorari, and the correction of errors of judgment, which must be raised before the hearing officer and not through certiorari.

Procedural History

The petitioners filed their complaint before the Securities and Exchange Commission, and the hearing officer granted a preliminary attachment over the assets of the respondent. After the respondent's motion for reconsideration was denied by a hearing panel, he filed a petition for certiorari with the Securities and Exchange Commission en banc. The Commission en banc issued an order discharging the attachment on the personal properties of the respondent, and then issued a further order directing the sheriff to release the three vehicles from its custody. The petitioners elevated the matter to the Court of Appeals by petition for certiorari. The Court of Appeals upheld the order discharging the attachment, but set aside the order of release on the ground that it amounted to a premature execution, the period of appeal not having expired. The petitioners' motion for reconsideration was denied, and the petitioners came to the Supreme Court by petition for review.

Facts

Danilo Tungol, Abelardo Tibayan and Erlando Abrenica were the registered partners in the Law Firm of Abrenica, Tungol and Tibayan, a professional law partnership organized under Philippine laws. On May 6, 1998, Tungol and Tibayan filed before the Securities and Exchange Commission a complaint for accounting, return and transfer of partnership funds with damages, with an application for a preliminary attachment against their partner Abrenica. They claimed that a real estate transaction entered into by Abrenica was a law partnership transaction.

After several hearings, the hearing officer granted the preliminary attachment. Upon the filing of a bond, a writ of preliminary attachment was issued, directing that sufficient assets of Abrenica be attached to cover Four Million Five Hundred Twenty-Four Thousand Pesos, alleged to be partnership profits unaccounted and unremitted. Pursuant to the writ, the sheriff levied upon a parcel of land in Marikina, three motor vehicles, and Philippine Savings Bank deposits in the amount of Twelve Thousand Eight Hundred Seventy-Three Pesos and Forty-Two Centavos.

Abrenica filed an omnibus motion for the inhibition of the hearing officer and for reconsideration of the order granting the attachment. The hearing officer voluntarily inhibited himself, and a hearing panel denied the motion for reconsideration. Abrenica then filed a petition for certiorari with the Commission en banc, contending that grave abuse of discretion attended the grant of the attachment. The Commission en banc discharged the attachment on the personal properties, reasoning that the current market value of the house and lot levied, at Six Million Seven Hundred Fifty Thousand Pesos, was more than sufficient to cover the claim. It then directed the sheriff to release the three vehicles.

Issues

• Whether or not the Securities and Exchange Commission en banc, in a special civil action for certiorari, may take cognizance of the issue of excessive attachment that was not raised before the hearing officer or panel.
• Whether or not the Court of Appeals erred in sustaining the order of the Commission en banc discharging the attachment on the personal properties of the respondent.

Applicable Provisions

Section 13 of Rule 57 of the Rules of Court, which the Commission en banc invoked in discharging the attachment, provides:

Section 13. Discharge of attachment on other grounds. The party whose property has been ordered attached may file a motion with the court in which the action is pending, before or after levy or even after the release of the attached property, for an order to set aside or discharge the attachment on the ground that the same was improperly or irregularly issued or enforced, or that the bond is insufficient. If the attachment is excessive, the discharge shall be limited to the excess.

This provision bears on the case because it is the proper remedy for excessive attachment, and the Court holds that the respondent should have pursued it before the hearing officer or panel, not by certiorari before the Commission en banc.

Ruling

On the first issue, the Court held that the Commission en banc was not acting on an ordinary appeal that opens the entire case for review. It was exercising its original jurisdiction through a special civil action for certiorari, which is a remedy designed for the correction of errors of jurisdiction and not errors of judgment. The orders complained of were interlocutory, resolving incidental matters and not touching the merits. The Court explained that when a court exercises its jurisdiction and commits an error while so engaged, that error does not deprive it of the jurisdiction being exercised. An error of judgment committed in the exercise of jurisdiction is not correctible through the original special civil action of certiorari. Hence, the Commission en banc committed grave abuse of discretion when it addressed a non-jurisdictional issue, seeking to correct an error in the enforcement of the writ of attachment, which is a factual issue involving appraisal and evaluation of evidence.

On the second issue, the Court held that the Court of Appeals erred in sustaining the order discharging the attachment, because that order rested on a matter beyond the proper scope of the certiorari petition. The Court nevertheless stressed that the respondent is not left without a remedy. He can still raise the issue of excessive attachment before the hearing officer or panel, where he may offer evidence to support his allegations and where the petitioners may be heard on their objections. Having reached this conclusion, the Court found no need to pass upon the validity of the order of release.

Doctrine

A special civil action for certiorari is confined to the correction of errors of jurisdiction, including grave abuse of discretion amounting to lack of jurisdiction, and does not extend to errors of judgment committed in the exercise of jurisdiction. An appellate administrative agency such as the Securities and Exchange Commission, when acting on a petition for certiorari under its original jurisdiction, exercises the same limited office and may not resolve factual questions such as whether an attachment is excessive. The remedy of a party claiming that an attachment is excessive is a motion to discharge under Section 13 of Rule 57, filed before the hearing officer or panel, and the discharge, if warranted, is limited to the excess.

Disposition

The petition was granted, the decision of the Court of Appeals was reversed and set aside, and the two orders of the Commission en banc discharging the attachment and directing the release of the vehicles were declared null and void, with no pronouncement as to costs.

Remember This

Certiorari corrects errors of jurisdiction, never errors of judgment, so an excessive attachment must be challenged before the hearing officer under Section 13 of Rule 57 and not by certiorari. Examiners use this case to test the scope of certiorari and the proper remedy against excessive attachment.