AGO TIMBER CORPORATION, PETITIONER, VS. HON. JESUS S. RUIZ, COURT OF FIRST INSTANCE OF AGUSAN, EXCELLENT MANAGEMENT CORPORATION, SHERIFF OF AGUSAN AND SHERIFF OF MANILA, RESPOND…

Ago Timber versus Ruiz

The Case

This is a petition filed directly with the Supreme Court by Ago Timber Corporation against Judge Jesus Ruiz of the Court of First Instance of Agusan, against Excellent Management Corporation, and against the sheriffs of Agusan and Manila. Ago Timber asks the Court to strike down the writs of preliminary injunction, attachment, and garnishment that the Agusan court issued in favor of Excellent Management. The case matters because it is a classic illustration of two rules every practitioner must know: the rule on litis pendentia, meaning the pendency of another action between the same parties for the same cause, and the rule that a court which acts with grave abuse of discretion may be corrected by certiorari even though it has jurisdiction over the subject matter.

Procedural History

Ago Timber first sued Excellent Management in the Court of First Instance of Manila, seeking rescission of their management contract and revocation of the general power of attorney, with damages. Excellent Management then filed its own action in the Court of First Instance of Agusan, sitting through Judge Ruiz in Butuan City, praying for the enforcement of the very same contract, with injunction, attachment, and garnishment. The Agusan court issued the writs ex parte. Ago Timber moved to dismiss the Agusan case and to dissolve the writs on the ground of pendency of another suit, but no action on the motion was forthcoming. Ago Timber then came to the Supreme Court, and the Court issued its own preliminary injunction restraining enforcement of the Agusan writs. Although the petition was captioned as one for injunction with preliminary injunction, the Court treated it in substance as a petition for certiorari, since the Supreme Court has no original jurisdiction to issue an injunction.

Facts

On the first of August 1963, Ago Timber and Excellent Management entered into a memorandum agreement for the latter to manage the former's logging operations. The next day, Ago Timber executed a contract of management and general power of attorney making Excellent Management its general manager, irrevocable for five years and coupled with a valuable consideration. On the thirtieth of September 1963, Ago Timber informed Excellent Management that, for failure to perform its part, Ago Timber was taking back the management of its logging operations.

On the twenty-eighth of October 1964, Ago Timber filed its action for rescission in Manila. Summons was served on Excellent Management on the third of November 1964. Excellent Management then filed its action in Agusan, and on the sixth of November 1964 the Agusan court issued ex parte a writ of preliminary injunction, an attachment, and a garnishment, restraining Ago Timber from disturbing Excellent Management's possession of the logging area and from cutting, hauling, selling, or exporting logs without its consent.

The petition in Agusan bore a rubber stamp receipt dated November 19, but a handwritten date, October 24, 1964, was superimposed on it. The injunction order was dated November 6, 1964, yet the bond was dated a day earlier, November 5, and the official receipt for the filing fee was dated November 6. The clerk's personnel explained that the petition was received and entered on October 24, but counsel had no cash for the filing fee and paid only on November 6. Judge Ruiz denied connivance but offered no explanation why the bond predated his order.

Issues

• Whether or not the Agusan court should have dismissed the case before it on the ground of pendency of another action between the same parties for the same cause.
• Whether or not the Agusan court acted with grave abuse of discretion in issuing the writs of preliminary injunction, attachment, and garnishment.
• Whether or not the petition, though captioned as one for injunction, should be treated as a petition for certiorari.

Applicable Provisions

Section 1 of Rule 13 of the Rules of Court, on the date of filing, provides:

Section 1. Payment of fees. — The filing of the complaint or other initiatory pleading shall be deemed to commence the action or proceeding, and the clerk of court shall collect the filing fees therefor at the time of the filing of such pleading.

The Court cites this rule, together with Section 1 of Rule 141, to fix the date of filing as the date the filing fee was paid.

Ruling

On the first issue, the Court held that the date to be reckoned as the filing of the Agusan petition is the sixth of November 1964, when the filing fee was paid, not the twenty-fourth of October when the petition was supposedly received. The Manila case was therefore filed earlier. Since both parties had pleaded pendency of another action in their respective motions to dismiss, they are estopped from denying it, and it was incumbent on the Agusan court to dismiss its case, both as a matter of comity with a coordinate and co-equal court and to prevent confusion that might hinder the administration of justice.

On the second issue, the Court found that the respondents, as defendants in the Manila case, received summons on the third of November 1964, yet filed their Agusan petition only on the sixth of November. They thus resorted to the Agusan court with unclean hands and wangled an ex parte injunction under dubious circumstances. While the Agusan court had jurisdiction, its acts constituted grave abuse of discretion and injudiciousness, combined with trickery on the part of the private respondent.

On the third issue, the Court held that the petition, although captioned as one for injunction, is in substance one for certiorari and should be considered as such, since the Supreme Court has no original jurisdiction to issue an injunction.

Doctrine

First, the filing of an initiatory pleading is deemed to commence the action only upon payment of the filing fees; the date of payment, not the date of receipt of the petition, fixes the date of filing. Second, where two actions between the same parties for the same cause are pending in coordinate courts, the court in which the later action is filed must dismiss it, both as a matter of comity and to prevent confusion that might hinder the administration of justice. Third, a court that has jurisdiction may still be corrected by certiorari where it acts with grave abuse of discretion, as when it issues an ex parte injunction under dubious circumstances in favor of a party who came to it with unclean hands.

Disposition

The Court granted the writ of certiorari, set aside and declared null and void the writs of preliminary injunction, attachment, and garnishment issued by the Agusan court, directed that court to dismiss its case, made the Supreme Court's preliminary injunction permanent, and taxed costs against Excellent Management Corporation.

Remember This

The single line to memorize: the date of payment of the filing fee is the date of filing, and the court where the later action is filed must yield to the court where the earlier action is pending. Examiners use this case to test litis pendentia, comity among coordinate courts, and the treatment of a mislabeled petition by its substance rather than its caption.