CHEMPHIL EXPORT AND IMPORT CORPORATION, PETITIONER, VS. THE HON. COURT OF APPEALS, (FORMERLY TWELFTH DIVISION); PHILIPPINE INVESTMENTS SYSTEMS ORGANIZATION (PISO), BANK OF THE P…

This is a special civil action for certiorari with
preliminary injunction and restraining order, which seeks to annul and set
aside the resolutions* dated
August 9, 1990 and February 4, 1991 of the Former Twelfth Division of
respondent Court of Appeals in CA­-G.R. No. 26511 entitled “Dynetics, Inc. and Antonio M. Garcia, Plaintiffs v.
Philippine Investments Systems Organization, Bank of the Philippine Islands, Rizal Commercial Banking Corporation and Land Bank of the
Philippines, Defendants-Appellants, Chemphil Export
and Import Corporation, Intervenor-Appellee,”
ordering the consolidation of the said CA-G.R. CV No. 26511 with CA­-G.R. No. 20467.

It appears from the records that on September 25, 1984, Dynetics, Inc. and Antonio M. Garcia filed a civil action
for declaratory relief and/or injunction with preliminary injunction against
Philippine Investments Systems Organization, Bank of the Philippine Islands, Rizal Commercial Banking Corporation, Philippine Commercial
and Industrial Bank (PCIB) and Land Bank of the Philippines (LBP), herein
referred to as CONSORTIUM for brevity, with the Regional Trial Court, Branch
145, Makati, Metro Manila, docketed as Civil Case No.
8527 (Rollo, pp. 297-298).  Thereafter, CONSORTIUM filed their respective
answers with compulsory counterclaims. 
They likewise prayed for the issuance of a writ of preliminary
attachment against Dynetics, Inc. and Antonio M.
Garcia (Ibid., p. 298).

On July 12, 1985,
the trial court issued an order, denying the prayer of Dynetics,
Inc. and Antonio M. Garcia for preliminary injunction.  Finding sufficient grounds from the evidence
presented, however, the trial court ordered the issuance of a consolidated writ
of preliminary attachment as prayed for by private respondents (Ibid.).  Thus, on July 19, 1985, the sheriff assigned to the trial court garnished
various real and personal properties belonging to Dynetics,
Inc., and Antonio M. Garcia, including the shares of stock belonging to the
latter in Chemical Industries of the Philippines, Inc.  (Chemphil, for
brevity) (Ibid., p. 199).

On May 20, 1988,
the trial court issued an order, dismissing the complaint of Dynetics, Inc. and Antonio M. Garcia, together with the
counterclaim of CONSORTIUM.  From this
order, CONSORTIUM appealed to respondent Court of Appeals, docketed as CA-G.R.
CV No. 20467 entitled “Dynetics, Inc. and
Antonio M. Garcia, Plaintiffs-Appellees v. Philippine
Investments Systems Organization, et al., Defendants-Appellants.” This
appealed case was assigned to the Ninth Division of respondent Court of Appeals
(Ibid., p. 325).

On January 17, 1989
and during the pendency of the appeal in the aforementioned CA-G.R. CV No.
20467, CONSORTIUM and Antonio M. Garcia entered into a compromise agreement,
which was approved by the Court of Appeals in a resolution dated May 22, 1989.  By reason thereof, Antonio M. Garcia was
dropped as a party to the appeal, leaving the same to proceed but only insofar
as Dynetics, Inc. is concerned (Ibid).  Antonio M. Garcia, however, failed to comply
with the terms of the said compromise agreement, prompting the CONSORTIUM to
move for execution of the compromise judgment, which was granted by the trial
court in an order dated August 11, 1989 (Ibid., pp.
39, 300).  Consequently, several
properties of Antonio M. Garcia were levied upon and sold in execution in favor
of the CONSORTIUM, among which properties were the Chemphil
shares of Antonio M. Garcia.  A
certificate of sale was issued in favor of the CONSORTIUM, the sheriff’s return
indicating that the Chemphil shares which were sold
in execution were the same shares garnished on July 19, 1985 (Ibid., p. 39).

On August 30, 1989,
CONSORTIUM filed with the trial court a motion to order the corporate secretary
of Chemphil to enter in the stock and transfer books
of Chempil the sheriff’s certificate of sale dated August 22, 1989 and to issue new
certificates of stock in the name of the CONSORTIUM (Ibid.).

On September 4, 1989, the trial court issued an order directing
the corporate secretary of Chemphil to “a)
record and/or register the Certificate of Sale dated August 22, 1989 issued by
the Deputy Sheriff Cristobal E. Jabson
x x x; b) to cancel the
certificate of stocks of plaintiff Antonio M. Garcia and all those which may
have subsequently been issued in replacement thereof; and c) to issue in lieu
of said shares new shares of stock in the name of PCIB, BPI, RCBC, LBP and PISO
Bank in such proportion as their respective claims would appear in their
suit.” (Ibid., pp. 39-40).

On September 22, 1989, Chemphil Export
and Import Corporation (CEIC, for brevity) filed with the trial court an urgent
ex–parte motion for leave to intervene in Civil Case No. 8527,
accompanied by an urgent motion which manifested, among others, that it had a preferred right over the disputed Chemphil shares because these shares were assigned to it by
Ferro Chemicals, Inc., which purchased the aforementioned shares from Antonio
M. Garcia (Ibid., p. 40).  The
trial court allowed CEIC to intervene in an order dated September 27, 1989.  It likewise issued a cease-and-desist order and directed the corporate secretary of
Chemphil not to enforce and implement the order of September 4, 1989 in an order dated September 28, 1989 (Ibid.).

After due hearing and submission of pleadings by both CONSORTIUM
and CEIC, the trial court, on December
19, 1989, rendered a decision, the dispositive
portion of which reads as follows:

“WHEREFORE, premises considered, the Urgent Motion dated September 25, 1989, filed by CEIC is
hereby granted.  Accordingly, the Order
of September 4, 1989, is
hereby SET ASIDE, and any and all acts of the Corporate Secretary of CHEMPHIL
and/or whoever is acting for and in his behalf, as may have already been done,
carried out or implemented pursuant to the Order of September 4, 1989, are hereby nullified.

Perforce, the CONSORTIUM’s Motions dated October 3, 1989 and October 11, 1989, are both hereby
DENIED, for lack of merit.

The Cease and Desist Order dated September 27, 1989, is hereby AFFIRMED and made PERMANENT.

SO ORDERED.” (Ibid., p. 305).

Their motion for reconsideration having been denied, the
CONSORTIUM appealed from the foregoing decision to the Court of Appeals,
docketed as CA-G.R. CV No. 26511 and assigned to the former Twelfth Division of
the said appellate court.

On April 4, 1990,
CONSORTIUM filed a motion to consolidate CA-G.R. CV No. 26511 with CA-G.R. CV
No. 20467 (Ibid., p. 328).  CEIC
vehemently opposed this motion to consolidate. 
Nonetheless, respondent Court of Appeals granted the CONSORTIUM’s
motion to consolidate in a resolution dated August 9, 1990 (Ibid., p. 36).  On August
20, 1990, CEIC filed an urgent motion for reconsideration of the
aforementioned resolution, alleging, among others, that there is no common
question of law or fact or parties in CA-G.R. CV No. 20467 and CA-G.R. CV No.
26511(Ibid., pp. 329-330).

On February 4, 1991,
the Twelfth Division of respondent Court of Appeals issued a resolution,
denying CEIC’s motion for reconsideration (Ibid.,
p. 43).  Hence, this petition.

The sole issue for resolution in this case is whether or not
respondent Court of Appeals gravely abused its discretion when it ordered the
consolidation of CA-G.R. CV No. 26511 with CA-G.R. CV No. 20467.

It is undisputed that both CA-G.R. CV No. 26511 and CA-G.R. CV
No. 20467 find their origin in Civil Case No. 8527.  In CA-G.R. CV No. 20467, the CONSORTIUM banks
are questioning the order of the trial court in Civil Case No. 8527, dismissing
their counterclaims, which, according to CEIC, resulted in the automatic
dissolution of attachment levied on the disputed Chemphil
shares (Ibid., p. 342).  On the
other hand, in CA-G.R. CV No. 26511, the primordial issue revolves around the
ownership over the disputed Chemphil shares.  Stated differently, both CEIC and the
CONSORTIUM banks are contesting ownership
over the disputed Chemphil shares that were (a) attached
by the CONSORTIUM in Civil Case No. 8527; (b) sold by the same banks on
execution to satisfy the judgment based on compromise rendered against Antonio
M. Garcia in CA?G.R. CV No. 20467; 
and (c) claimed by CEIC in ownership
during the execution of the judgment based on compromise rendered in CA-G.R. CV
No. 20467 the result of which claim led to CA-G.R. CV No. 26511 (Ibid.,
p. 312).  Such being the case, CA-G.R. No. 20467 and CA-G.R. CV No. 25611 are intimately and substantially
related cases, thereby making their consolidation inevitable to avoid the
possibility of conflicting decisions in both cases (Benguet
Corporation, Inc. v. Court of
Appeals, 165 SCRA 265 [1988]).

That CEIC is not a party in CA-G.R. CV No. 20467 does not
militate against the consolidation of the two cases because under the Revised
Internal Rules of the Court of Appeals, which was approved by this Court En
Banc on October 20, 1988,
consolidation may be allowed when the two cases to be consolidated involve the
same parties and/or related questions of fact and/or law [Section
7(a)].  In short, for as long as two or more cases involve related
questions of fact and/or law, as in the instant case, their consolidation is in
order.  Accordingly, the consolidation in
question being called for, it cannot be justifiably argued, as CEIC does, that
respondent Court of Appeals gravely abused its discretion when it ordered the
consolidation of CA­-G.R. CV No. 26511 with CA-G.R. CV No. 20467.

PREMISES CONSIDERED, this instant petition is DISMISSED
for lack of merit.

SO ORDERED.

Melencio-Herrera, (Chairman), Regalado, and Nocon, JJ., concur.

Padilla, J., no part; former counsel of respondent Bank of PI.

* Penned by Associate Justice Artemon D. Luna and concurred in by Associate Justices Reynato S. Puno and Jorge S.
Imperial