LOURDES MARIANO, PETITIONER, VS. COURT OF APPEALS, AND DANIEL SANCHEZ, RESPONDENTS.

The proceedings at bar concern (1) an attempt by a married man to
prevent execution against conjugal property of a judgment rendered against his
wife, for obligations incurred by the latter while engaged in a business that
had admittedly redounded to the benefit of the family, and (2) the interference
by a court with the proceedings on execution of a co-equal or coordinate
court.  Both acts being prescribed by
law, correction is called for and will hereby be effected.

The proceedings originated from a suit filed by Esther Sanchez
against Lourdes Mariano in the Court of First Instance at Caloocan City,1 for recovery of the value of ladies’ ready made
dresses allegedly purchased by and delivered to the latter.2

A writ of preliminary attachment issued at Esther Sanchez’
instance, upon a bond posted by Veritas Insurance
Company in the amount of P11,000.00, and resulted in the seizure of Lourdes
Mariano’s property worth P15,000.00 or so.3 Her motion for the discharge of the
attachment having been denied,1 Lourdes Mariano went up to the Court of
Appeals on certiorari.  That Court
ordered2 the Trial Court to receive evidence on whether or not the attachment
had been improvidently or irregularly issued.3 The Trial Court did so, came to the
conclusion that the attachment had indeed been improperly issued, and
consequently dissolved it.4

Trial then ensued upon
the issues arising from the complaint as well as Lourdes Mariano’s answer with
counterclaim — which included a claim for damages resulting from wrongful
attachment.  Thereafter judgment was rendered
in favor of defendant Lourdes Mariano and against plaintiff Esther Sanchez
containing the following dispositions, to wit:5

1.  On the complaint,
defendant is ordered to pay unto the plaintiff for the value of the dishonored
check (Exhs. G-1, H and I) in the total amount of
P1,512.00.

2.  On the counterclaim, the
plaintiff is ordered to pay unto defendant the following, as follows:

a.  P7,500.00 for loss of
income of the defendant for 75 days;

b.  P16,000.00 for the value
of attached goods;

c.  P25,000.00 for moral and
exemplary damages;

d.  P5,000.00 as attorney’s
fees plus costs of suit.

The Veritas
Insurance Company which issued the attachment bond is ordered to pay unto the
defendant the full insurance coverage of P11,000.00 to answer for the total
liability of the plaintiff thereof.

Esther Sanchez sought to
perfect an appeal by filing a notice of appeal, an appeal bond and a record on
appeal.6

Pending approval of the
record on appeal, Lourdes Mariano filed a motion for the immediate execution of
the judgment which the Court granted.7 In virtue of the writ of execution which
afterwards issued in due course, the sheriff garnished the sum of P11,000.00
from Veritas Insurance Company, and levied on real
and personal property belonging to the conjugal partnership of Esther Sanchez
and her husband, Daniel Sanchez.  Esther
Sanchez then filed a petition for certiorari with the Court of Appeals,
praying for the annulment of the execution pending appeal authorized by the
Trial Court; but her petition was adjudged to be without merit and was accordingly
dismissed.1

Daniel Sanchez, Esther’s
husband, now made his move.  He filed a
complaint for annulment of the execution in the Court of First Instance at Quezon City in his capacity as administrator of the
conjugal partnership.2 He alleged that the conjugal assets could
not validly be made to answer for obligations exclusively contracted by his
wife, and that, moreover, some of the personal property levied on, such as
household appliances and utensils necessarily used in the conjugal dwelling,
were exempt from execution.  He also
applied for a preliminary injunction pending adjudication of the case on the
merits.3

The Quezon
City Court issued an order setting the matter of the injunction for hearing,
and commanding the sheriff, in the meantime, to desist from proceeding with the
auction sale of the property subject of Daniel Sanchez’ claim.4 Lourdes
Mariano filed a motion to dismiss the action; this, the Court denied.5 She then
instituted a special civil action of certiorari in the Court of Appeals,6 where she
initially enjoyed some measure of success: 
her petition was given due course, and the Quezon
City Court was restrained by the Appellate Court’s Seventh Division7 from
further proceeding with the case.8 Eventually, however, the Eighth Division9 came to the
conclusion that there was no merit in her cause and dismissed her petition.10 It ruled
that the Quezon City Court had not interfered with
the execution process of the Caloocan Court because
Daniel Sanchez’s action in the former court raised an issue — the validity of
the sheriff’s levy on the conjugal partnership assets of the Sanchez Spouses —
different from those adjudicated in the Caloocan
Court, and Sanchez was not a party to the case tried by the latter.

From this verdict Lourdes
Mariano has appealed to this Court, contending that the Appellate Court
committed reversible error –

1) in ruling that the conjugal partnership of Daniel and Esther
Sanchez could not be made liable for Esther’s judgment obligation arising from
the spouses’ joint business with Lourdes Mariano;

2) in ruling that the Quezon City Court
of First Instance had not interfered with the execution process of the Caloocan Court of First Instance; and

3) when its Eighth Division decided the petition of Lourdes Mariano
although the case had been raffled to the Seventh Division and the latter had
in fact given due course to the petition.

1.  There is no dispute
about the fact that Esther Sanchez was engaged in business not only without
objection on the part of her husband, Daniel, but in truth with his consent and
approval.1 It is also established that, as
expressly acknowledged by Esther herself and never denied by Daniel, the
profits from the business had been used to meet, in part at least, expenses for
the support of her family, i.e., the schooling of the children, food and other
household expenses.2 Under the
circumstances, Lourdes Mariano’s action against Esther Sanchez was justified,
the litigation being “incidental to the ** business in which she is
engaged,”3 and consequently, the conjugal
partnership of Daniel and Esther Sanchez was liable for the debts and
obligations contracted by Esther in her business since the income derived therefrom, having been used to defray some of the expenses
for the maintenance of the family and the education of the children, had
redounded to the benefit of the partnership.4 It was
therefore error for the Court of Appeals to have ruled otherwise.

2.  It was also error for
the Court of Appeals to have held that there was no interference by the Quezon City Court of First Instance with the execution
process of the Caloocan
Court.

The rule, one of great
importance in the administration of justice, is that a Court of First Instance
has no power to restrain by means of injunction the execution of a judgment or decree
of another judge of concurrent or
coordinate jurisdiction.5 But this is precisely what was done by the Quezon City Court of First Instance:  It enjoined the execution of a judgment
authorized and directed by a co-equal and coordinate court, the Caloocan City Court of First Instance.  It did so on the claim of Daniel Sanchez that
the property being levied on belonged to the conjugal partnership and could not
be made liable for the wife’s obligations.

The question that arises
is whether such a claim — that property levied on in execution of a judgment
is not property of the judgment debtor, Daniel Sanchez’s wife, but of the
conjugal partnership of the Sanchez Spouses — is properly cognizable by a
Court other than that which rendered judgment adversely to the wife.

To be sure, Section 17,
Rule 39 of the Rules of Court, authorizes a “third person,” i.e.,
“any other person than the judgment debtor or his agent,” to
vindicate “his claim to the property by any proper action.” The
section reads as follows:1

SEC. 17.  Proceedings
where property claimed by third person. – If property levied on be claimed
by any other person than the judgment debtor or his agent, and such person make
an affidavit of his title thereto or right to the possession thereof, stating
the grounds of such right or title, and serve the same upon the officer making
the levy, and a copy thereof upon the judgment creditor, the officer shall not
be bound to keep the property, unless such judgment creditor or his agent, on
demand of the officer, indemnify the officer against such claim by a bond in a
sum not greater than the value of the property levied on.  In case of disagreement as to such value, the
same shall be determined by the court issuing the writ of execution.

The officer is not liable for damages, for the taking or keeping of
the property, to any third-party claimant, unless a claim is made by the latter
and unless an action for damages is brought by him against the officer within
one hundred twenty (120) days from the date of the filing of the bond.  But nothing herein contained shall
prevent such claimant or any third person from vindicating his claim to the
property by any proper action.

* * * .

The “proper
action” referred to in the section “is and should be an entirely separate
and distinct action from that in which execution has issued, if
instituted by a stranger to the latter suit;“2 and in
“such separate action, the court may issue a writ of preliminary
injunction against the sheriff enjoining him from proceeding with the execution
sale.”1 “Upon the other hand, if the claim of
impropriety on the part of the sheriff in the execution proceedings is made by
a party to the action, not a stranger thereto, any relief therefrom may be applied for with, and obtained from, only
the executing court; and this is true even if a new party has been impleaded in the suit.”2

In the case at bar, the
husband of the judgment debtor cannot be deemed a “stranger” to the
case prosecuted and adjudged against his wife. 
A strikingly similar situation was presented in a case decided by this
Court as early as 1976, Rejuso v. Estipona.3 There, the
sheriff tried to evict petitioner Rejuso and his
family from their house and lot which had been sold in execution of a money
judgment rendered by the Court of First Instance of Davao
against Rejuso. 
What Rejuso did was to institute, together
with his wife, Felisa, a separate suit in the
same court against the sheriff and the judgment creditor, Estipona,
for the purpose of annulling the levy, execution sale, and writ of possession
issued in the first action in respect of their residential house and lot, on
the theory that that property was conjugal in character and “hence, not
subject to such proceedings considering that Felisa
was not a party to the previous case.” The action was however dismissed by
the court on the ground that it had “no jurisdiction over the subject matter of the action or the nature of the action and of the relief sought.”4 The dismissal
was had on motion of Estipona who argued that the
court had no jurisdiction to “vacate or annul and/or enjoin the
enforcement of the processes issued by another branch in another case,”
and since Rejuso had already raised the same issues
in the first case, without success, he should not be allowed to “get from
another branch ** what he failed to get ** (from) Branch I.” This Court
affirmed that judgment of dismissal,5 holding that Rejuso’s
action was barred by res adjudicata; and “(a)s regards Felisa
Rejuso, who is a new party in Civil Case No.
5102″ (the second action) it was ruled that —

 ** her remedy, if it has not
yet been barred by the statute of limitations or become stale in some other
way, is within Civil Case No. 4435 (the first suit).  Indeed, it is superfluous to start a new
action on a matter which can be more simply and conveniently litigated within a
former proceeding of which it is more logically and legally an integral
part.  (lpekdjian
Merchandising Co., Inc. v. CTA, 8 SCRA 59 [1963].)  Actually, the court in which the former
proceeding was pending has exclusive jurisdiction thereof (De Leon vs. Salvador,
36 SCRA 567), the fact that the two cases are in the same Branch of the same
Court of First Instance and presided over by the same Judge
notwithstanding.  After all, it is
simpler and more convenient to observe such practice, which insures also
consistency in the resolutions of related questions because they are to be
determined in most if not all instances by the same judge.”

In any case, whether by
intervention in the court issuing the writ, or by separate action, it is
unavailing for either Esther Sanchez or her husband, Daniel, to seek preclusion
of the enforcement of the writ of possession against their conjugal assets.  For it being established, as aforestated, that Esther had engaged in business with her
husband’s consent, and the income derived therefrom
had been expended, in part at least, for the support of her family, the
liability of the conjugal assets to respond for the wife’s obligations in the
premises cannot be disputed.

The petitioner’s appeal
must therefore be sustained.

However, the petitioner’s
theory that the Eighth Division of the Appellate Court had improperly taken
cognizance of the case which had been raffled to the Seventh Division, must be
rejected.  It is without foundation, and
was evidently made without attempt to ascertain the relevant facts and
applicable rules.  The case had originally
been assigned to Mr. Justice Isidro C. Borromeo for
study and report while he was still a member of the Seventh Division.  The case was brought by him to the Eighth
Division when he was subsequently transferred thereto; and he had ultimately
written the opinion for the division after due deliberation with his
colleagues.  All of this took place in
accordance with the Rules of the Court of Appeals.

WHEREFORE, the Decision of the Court of Appeals
subject of the petition is REVERSED AND SET ASIDE, and the Regional Trial Court
(formerly Court of First Instance) at Quezon City is ORDERED to dismiss Civil Case No. 20415
entitled “Daniel P. Sanchez v. Deputy Sheriff Mariano V. Cachero, et al,” with prejudice.  Costs against private respondents.

SO ORDERED.

Cruz, Gancayco, Griño-Aquino,
and Medialdea,
JJ., concur.

1 Docketed as Civil Case No.
C-3038, assigned to Branch XXXIII

2 Rollo,
pp. 92-94

3 Id.,
p. 98

1 Id.,
p. 54

2 Ibid.

3 SEC. 13, Rule 57, Rules of
Court, authorizes the discharge of a preliminary attachment upon a showing that
the same had been improperly or irregularly issued.

4 Rollo, p. 55

5 Id.,
pp. 88 et seq.

6 Id.,
p. 56.

7 Ibid.

1 Rollo,
pp. 99-106

2 Docketed as Civil Case No.
26415 entitled “Daniel P. Sanchez v. Deputy Sheriff Marino V. Cachero, et al.,” and assigned to the sala presided over by Hon. Augusto
L. Valencia

3 Rollo,
pp. 126-138

4 Id.,
p. 125

5 Id.,
pp. 141-152, 155

6 Docketed as CA-G.R. No.
SP-08893

7 Messrs. Justices Serrano,
Jimenez and Borromeo

8 Id.,
p. 52, 82

9 Borromeo,
J., ponente, with whom concurred Gopengco and Busran, JJ.

10 Id.,
pp. 87-91

1 SEE ART. 117, Civil Code

2 Rollo,
pp. 120-121

3 ART. 113 (8), Civil Code

4 ART. 161 (1) and (5),
Civil Code

5 SEE Hacbang
v. Diez, 8 SCRA 103 (1963); Paper Industries
Corporation of the Philippines v. I.A.C., 151 SCRA 161 (1987); Republic v.
Reyes, 155 SCRA 237 (1987); Cabigao v.
Rosario, 44 Phil. 182; Araneta & Uy v. Commonwealth
Insurance Co., 55 O.G. 431; Ngo Bun Tiong v.
Judge Sayo, G.R. No. L-45825, June 30,
1988, citing Cabigao v. del Rosario, supra

1 Emphasis supplied.

2 Ong
v. Tating, 149 SCRA 265, 277, italics
supplied, citing Bayer Phil. v. Agana,
63 SCRA 355 (in turn citing Manila Herald Publishing, etc. v. Ramos, 88
Phil. 94); Polaris Marketing Corp. v. Plan, 69 SCRA 93; Lorenzana v. Cayetano, 78
SCRA 485; Arabay v. Salvador, 82 SCRA 138; Roque v. C.A., 93 SCRA 540

1 Ong
v. Tating, supra, at pp. 278-279

2 Ong
v. Tating, supra, at p. 279, italics
supplied, citing Rejuso v. Estipona, 72 SCRA 509; National Power Corp. v. De Veyra, 3SCRA 646

3 72 SCRA 509, supra,
511

4 Id.,
p. 512

5 Id.,
p. 513, parenthetical insertions, supplied