Gk No 129918 Iu|y 9 1998

nILIINL NA1ICNAL 8ANk peLlLloner

vs
nCN MAkCLLINC L SAC Ik |n h|s capac|ty as res|d|ng Iudge of the keg|ona| 1r|a| Court of Man||a (8ranch 4S) NCAnS
Akk SUGAk kLIINLk AL8Lk1C 1 LCCUkC IIMM 1 GC and WILSCN 1 GC respondenLs

DAVIDL Ik
n Lhls speclal clvll acLlon for cettlototl acLually Lhe Lhlrd dlspuLe beLween Lhe same prlvaLe parLles Lo have reached Lhls CourL
1
peLlLloner asks us Lo annul Lhe orders
2
of 13 Aprll 1997 and 14 !uly 1997 lssued ln Clvll Case no 9033023 by Lhe 8eglonal
1rlal CourL Manlla 8ranch 43 1he flrsL order
3
granLed prlvaLe respondenLs moLlon for execuLlon Lo saLlsfy Lhelr
warehousemans llen agalnsL peLlLloner whlle Lhe second order
4
denled wlLh flnallLy peLlLloners moLlon for reconslderaLlon
of Lhe flrsL order and urgenL moLlon Lo llfL garnlshmenL and prlvaLe respondenLs moLlon for parLlal reconslderaLlon
1he facLual anLecedenLs unLll Lhe commencemenL of C8 no 119231 were summarlzed ln our declslon Lhereln as follows
n accordance wlLh AcL no 2137 Lhe Warehouse 8ecelpLs Law noahs Ark Sugar 8eflnery lssued on
several daLes Lhe followlng Warehouse 8ecelpLs (Cuedans) (a) March 1 1989 8ecelpL no 18062
coverlng sugar deposlLed by 8osa Sy (b) March 7 1989 8ecelpL no 18080 coverlng sugar deposlLed by
8nS Merchandlslng (8osa ng Sy) (c) March 21 1989 8ecelpL no 18081 coverlng sugar deposlLed by SL
1herese Merchandlslng (d) March 31 1989 8ecelpL no 18086 coverlng sugar deposlLed by SL 1herese
Merchandlslng and (e) Aprll 1 1989 8ecelpL no 18087 coverlng sugar deposlLed by 8nS
Merchandlslng 1he recelpLs are subsLanLlally ln Lhe form and conLalns Lhe Lerms prescrlbed for
negoLlable warehouse recelpLs by SecLlon 2 of Lhe law
SubsequenLly Warehouse 8ecelpLs nos 18080 and 18081 were negoLlaLed and endorsed Lo Luls 1
8amos and 8ecelpLs nos 18086 18087 and 18062 were negoLlaLed and endorsed Lo Cresencla k ZoleLa
8amos and ZoleLa Lhen used Lhe quedans as securlLy for Lwo loan agreemenLs one for 136 mllllon
and Lhe oLher for 233 mllllon obLalned by Lhem from Lhe hlllpplne naLlonal 8ank 1he
aforemenLloned quedans were endorsed by Lhem Lo Lhe hlllpplne naLlonal 8ank
Luls 1 8amos and Cresencla k ZoleLa falled Lo pay Lhelr loans upon maLurlLy on !anuary 9 1990
ConsequenLly on March 16 1990 Lhe hlllpplne naLlonal 8ank wroLe Lo noahs Ark Sugar 8eflnery
demandlng dellvery of Lhe sugar sLocks covered by Lhe quedans endorsed Lo lL by ZoleLa and 8amos
noahs Ark Sugar 8eflnery refused Lo comply wlLh Lhe demand alleglng ownershlp Lhereof for whlch
reason Lhe hlllpplne naLlonal 8ank flled wlLh Lhe 8eglonal 1rlal CourL of Manlla a verlfled complalnL for
Speclflc erformance wlLh uamages and AppllcaLlon for WrlL of ALLachmenL agalnsL noahs Ark Sugar
8eflnery AlberLo 1 Looyuko !lmmy 1 Co and Wllson 1 Co Lhe lasL Lhree belng ldenLlfled as Lhe sole
proprleLor managlng parLner and LxecuLlve vlce resldenL of noahs Ark respecLlvely
8espondenL !udge 8enlLo C Se !r Lo whose sala Lhe case was raffled denled Lhe AppllcaLlon for
rellmlnary ALLachmenL 8econslderaLlon Lherefor was llkewlse denled
noahs Ark and lLs codefendanLs flled an Answer wlLh CounLerclalm and 1hlrdarLy ComplalnL ln whlch
Lhey clalmed LhaL Lhey were Lhe owners of Lhe sub[ecL quedans and Lhe sugar represenLed Lhereln
averrlng as Lhey dld LhaL
9 * * * n an agreemenL daLed Aprll 1 1989 defendanLs agreed Lo sell Lo 8osa ng
Sy of 8nS Merchandlslng and 1ereslLa ng of SL 1herese Merchandlslng Lhe LoLal
volume of sugar lndlcaLed ln Lhe quedans sLored aL noahs Ark Sugar 8eflnery for a
LoLal conslderaLlon of 6300000000 * * * 1he correspondlng paymenLs ln Lhe
form of checks lssued by Lhe vendees ln favor of defendanLs were subsequenLly
dlshonored by Lhe drawee banks by reason of paymenL sLopped and drawn
agalnsL lnsufflclenL funds * * * upon proper noLlflcaLlon Lo sald vendees and
plalnLlff ln due course defendanLs refused Lo dellver Lo vendees Lhereln Lhe
quanLlLy of sugar covered by Lhe sub[ecL quedans
10 * * * Conslderlng LhaL Lhe vendees and flrsL endorsers of sub[ecL quedans dld
noL acqulre ownershlp Lhereof Lhe subsequenL endorsers and plalnLlff lLself dld
noL acqulre a beLLer rlghL of ownershlp Lhan Lhe orlglnal vendees/flrsL endorsers
1he Answer lncorporaLed a 1hlrdarLy ComplalnL by AlberLo 1 Looyuko !lmmy 1 Co and Wllson 1 Co
dolng buslness under Lhe Lrade name and sLyle noahs Ark Sugar 8eflnery agalnsL 8osa ng Sy and
1ereslLa ng praylng LhaL Lhe laLLer be ordered Lo dellver or reLurn Lo Lhem Lhe quedans (prevlously
endorsed Lo n8 and Lhe sub[ecL of Lhe sulL) and pay damages and llLlgaLlon expenses
1he Answer of 8osa ng Sy and 1ereslLa ng daLed SepLember 6 1990 one of avoldance ls essenLlally Lo
Lhe effecL LhaL Lhe LransacLlon beLween Lhem on Lhe one hand and !lmmy 1 Co on Lhe oLher
concernlng Lhe quedans and Lhe sugar sLocks covered by Lhem was merely a slmulaLed one belng parL of
Lhe laLLers complex banklng schemes and flnanclal maneuvers and Lhus Lhey are noL answerable ln
damages Lo hlm
Cn !anuary 31 1991 Lhe hlllpplne naLlonal 8ank flled a MoLlon for Summary !udgmenL ln favor of Lhe
plalnLlff as agalnsL Lhe defendanLs for Lhe rellefs prayed for ln Lhe complalnL
Cn May 2 1991 Lhe 8eglonal 1rlal CourL lssued an order denylng Lhe MoLlon for Summary !udgmenL
1hereupon Lhe hlllpplne naLlonal 8ank flled a eLlLlon for cettlototl wlLh Lhe CourL of Appeals
dockeLed as CAC8 S no 23938 on uecember 13 1997
erLlnenL porLlons of Lhe declslon of Lhe CourL of Appeals read
n lssulng Lhe quesLloned Crders Lhe respondenL CourL ruled LhaL quesLlons of
law should be resolved afLer and noL before Lhe quesLlons of facL are properly
llLlgaLed A scruLlny of defendanLs afflrmaLlve defenses does noL show maLerlal
quesLlons of facL as Lo Lhe alleged nonpaymenL of purchase prlce by Lhe
vendees/flrsL endorsers and whlch nonpaymenL ls noL dlspuLed by n8 as lL does
noL maLerlally affecL n8s LlLle Lo Lhe sugar sLocks as holder of Lhe negoLlable
quedans
WhaL ls deLermlnaLlve of Lhe proprleLy of summary [udgmenL ls noL Lhe exlsLence
of confllcLlng clalms from prlor parLles buL wheLher from an examlnaLlon of Lhe
pleadlngs deposlLlons admlsslons and documenLs on flle Lhe defenses as Lo Lhe
maln lssue do noL Lender maLerlal quesLlons of facL (see Carcla vs CourL of
Appeals 167 SC8A 813) or Lhe lssues Lhus Lendered are ln facL sham flcLlLlous
conLrlved seL up ln bad falLh or so unsubsLanLlal as noL Lo consLlLuLe genulne
lssues for Lrlal (See vergara vs SuelLo et ol 136 SC8A 733 Mercado et ol vs
CourL of Appeals 162 SC8A 73) slc 1he quesLloned Crders Lhemselves do noL
speclfy whaL maLerlal facLs are ln lssue (See Sec 4 8ule 34 8ules of CourL)
1o requlre a Lrlal noLwlLhsLandlng perLlnenL allegaLlons of Lhe pleadlngs and oLher
facLs appearlng on Lhe record would consLlLuLe a wasLe of Llme and an ln[usLlce Lo
Lhe n8 whose rlghLs Lo rellef Lo whlch lL ls plalnly enLlLled would be furLher
delayed Lo lLs pre[udlce
n lssulng Lhe quesLloned Crders We flnd Lhe respondenL CourL Lo have acLed ln
grave abuse of dlscreLlon whlch [usLlfy holdlng null and vold and seLLlng aslde Lhe
Crders daLed May 2 and !uly 4 1990 of respondenL CourL and LhaL a summary
[udgmenL be rendered forLhwlLh ln favor of Lhe n8 agalnsL noahs Ark Sugar
8eflnery et ol as prayed for ln peLlLloners MoLlon for Summary !udgmenL
Cn uecember 13 1991 Lhe CourL of Appeals nulllfled and seL aslde Lhe orders of May 2 and !uly 4 1990
of Lhe 8eglonal 1rlal CourL and ordered Lhe Lrlal courL Lo render summary [udgmenL ln favor of Lhe n8
Cn !une 18 1992 Lhe Lrlal courL rendered [udgmenL dlsmlsslng plalnLlffs complalnL agalnsL prlvaLe
respondenLs for lack of cause of acLlon and llkewlse dlsmlssed prlvaLe respondenLs counLerclalm agalnsL
n8 and of Lhe 1hlrdarLy ComplalnL and Lhe 1hlrdarLy uefendanLs CounLerclalm Cn SepLember 4
1992 Lhe Lrlal courL denled n8s MoLlon for 8econslderaLlon
Cn !une 9 1992 Lhe n8 flled an appeal from Lhe 81C declslon wlLh Lhe Supreme CourL C8 no
107243 by way of a eLlLlon for 8evlew on cettlototl under 8ule 43 of Lhe 8ules of CourL 1hls CourL
rendered [udgmenL on SepLember 1 1993 Lhe dlsposlLlve porLlon of whlch reads
WPL8LlC8L Lhe Lrlal [udges declslon ln Clvll Case no 9033023 daLed !une 18 7992 ls reversed and
seL aslde and a new one rendered conformably wlLh Lhe flnal and execuLory declslon of Lhe CourL of
Appeals ln CAC8 S no 23938 orderlng Lhe prlvaLe respondenLs noahs Ark Sugar 8eflnery AlberLo 1
Looyuko !lmmy 1 Co and Wllson 1 Co [olnLly and severally
(a) Lo dellver Lo Lhe peLlLloner hlllpplne naLlonal 8ank Lhe sugar sLocks covered
by Lhe Warehouse 8ecelpLs/Cuedans whlch are now ln Lhe laLLers possesslon as
holder for value and ln due course or alLernaLlvely Lo pay (sald) plalnLlff acLual
damages ln Lhe amounL of 391 mllllon wlLh legal lnLeresL Lhereon from Lhe
flllng of Lhe complalnL unLll full paymenL and
(b) Lo pay plalnLlff hlllpplne naLlonal 8ank aLLorneys fees llLlgaLlon expenses and
[udlclal cosLs hereby flxed aL Lhe amounL of Cne Pundred llfLy 1housand esos
(13000000) as well as Lhe cosLs
SC C8uL8Lu
Cn SepLember 29 1993 prlvaLe respondenLs moved for reconslderaLlon of Lhls declslon A
SupplemenLal/Second MoLlon for 8econslderaLlon wlLh leave of courL was flled by prlvaLe respondenLs
on november 8 1993 We denled prlvaLe respondenLs moLlon on !anuary 10 1994
rlvaLe respondenLs flled a MoLlon Seeklng ClarlflcaLlon of Lhe ueclslon daLed SepLember 1 1993 We
denled Lhls moLlon ln Lhls manner
L bears sLresslng LhaL Lhe rellef granLed ln Lhls CourLs declslon of SepLember 1
1993 ls preclsely LhaL seL ouL ln Lhe flnal and execuLory declslon of Lhe CourL of
Appeals ln CAC8 S no 23938 daLed uecember 13 1991 whlch was afflrmed lo
toto by Lhls CourL and whlch became unalLerable upon becomlng flnal and
execuLory
rlvaLe respondenLs Lhereupon flled before Lhe Lrlal courL an Cmnlbus MoLlon seeklng among oLhers Lhe
defermenL of Lhe proceedlngs unLll prlvaLe respondenLs were heard on Lhelr clalm for warehousemans
llen Cn Lhe oLher hand on AugusL 22 1994 Lhe hlllpplne naLlonal 8ank flled a MoLlon for Lhe ssuance
of a WrlL of LxecuLlon and an CpposlLlon Lo Lhe Cmnlbus MoLlon flled by prlvaLe respondenLs
1he Lrlal courL granLed prlvaLe respondenLs Cmnlbus MoLlon on uecember 20 1994 and seL recepLlon of
evldence on Lhelr clalm for warehousemans llen 1he resoluLlon of Lhe n8s MoLlon for LxecuLlon was
ordered deferred unLll Lhe deLermlnaLlon of prlvaLe respondenLs clalm
Cn lebruary 21 1993 prlvaLe respondenLs clalm for llen was heard and evldence was recelved ln
supporL Lhereof 1he Lrlal courL LhereafLer gave boLh parLles flve (3) days Lo flle respecLlve memoranda
Cn lebruary 28 1993 Lhe hlllpplnes naLlonal bank flled a ManlfesLaLlon wlLh urgenL MoLlon Lo nulllfy
CourL roceedlngs n ad[udlcaLlon Lhereof Lhe Lrlal courL lssued Lhe followlng order on March 1 1993
WPL8LlC8L Lhls courL hereby flnds LhaL Lhere exlsLs ln favor of Lhe defendanLs a
valld warehousemans llen under SecLlon 27 of 8epubllc AcL 2137 and accordlngly
execuLlon of Lhe [udgmenL ls hereby ordered sLayed and/or precluded unLll Lhe full
amounL of defendanLs llen on Lhe sugar sLocks covered by Lhe flve (3) quedans
sub[ecL of Lhls acLlon shall have been saLlsfled conformably wlLh Lhe provlslons of
SecLlon 31 of 8epubllc AcL 2137
S

unsaLlsfled wlLh Lhe Lrlal courLs order of 1 March 1993 hereln peLlLloner flled wlLh us C8 no 119231 conLendlng

n8S 8CP1 1C A W81 Cl LxLCu1Cn S SuC81Lu 8? 1WC lnAL Anu LxLCu1C8? uLCSCnS 1PL
uLCLM8L8 13 1991 CCu81 Cl ALALS slc uLCSCn n CAC8 S nC 23938 Anu 1PL nCvLM8L8
9 1992 Su8LML CCu81 uLCSCn n C8 nC 107243 8LSCnuLn1 81CS MnS1L8AL Anu
MAnuA1C8? uu1? S 1C SSuL 1PL W81 Cl LxLCu1Cn 1C MLLMLn1 1PL uLC8L1AL C81Cn Cl
SAu Su8LML CCu81 uLCSCn

8LSCnuLn1 81C S W1PCu1 !u8SuC1Cn 1C PLA8 8vA1L 8LSCnuLn1S CMn8uS MC1Cn 1PL
CLAMS SL1 lC81P n SAu MC1Cn (1) WL8L AL8LAu? 8L!LC1Lu 8? 1PL Su8LML CCu81 n 1S
MA8CP 9 1994 8LSCLu1Cn uLn?nC 8vA1L 8LSCnuLn1S MC1Cn lC8 CLA8lCA1Cn Cl
uLCSCn n C8 nC 107243 Anu (2) A8L 8A88Lu lC8LvL8 8? 8vA1L 8LSCnuLn1S lALu8L 1C
n1L8CSL 1PLM n 1PL8 AnSWL8 Anu lALu8L 1C ALAL l8CM 1PL !unL 18 1992 uLCSCn n
CvL CASL nC 9032023

8LSCnuLn1 81CS CnL? !u8SuC1Cn S 1C SSuL 1PL W81 1C LxLCu1L 1PL Su8LML CCu81
uLCSCn 1PuS n8 S Ln11LLu 1C (1) A W81 Cl ck1lOkAkl 1C AnnuL 1PL 81C 8LSCLu1Cn
uA1Lu uLCLM8L8 20 1994 Anu 1PL C8uL8 uA1Lu lL88uA8? 7 1993 Anu ALL 8CCLLunCS 1AkLn
8? 1PL 81C 1PL8LAl1L8 (2) A W81 Cl 8CP81Cn 1C 8LvLn1 8LSCnuLn1 81C l8CM lu81PL8
8CCLLunC W1P CvL CASL nC 9033023 Anu CCMM11nC C1PL8 AC1S vCLA1vL Cl 1PL
Su8LML CCu81 uLCSCn n C8 nC 107243 Anu (3) A W81 Cl MAnuAMuS 1C CCMLL
8LSCnuLn1 81C 1C SSuL 1PL W81 1C LxLCu1L 1PL Su8LML CCu81 !uuCMLn1 n lAvC8 Cl n8
n our declslon of 18 Aprll 1996 ln C8 no 119231 we held agalnsL hereln peLlLloner as Lo Lhese lssues and concluded
n vlew of Lhe foregolng Lhe rule may be slmpllfled Lhus Whlle Lhe n8 ls enLlLled Lo Lhe sLocks of sugar
as Lhe endorsee of Lhe quedans dellvery Lo lL shall be effecLed only upon paymenL of Lhe sLorage fees
mperaLlve ls Lhe rlghL of Lhe warehouseman Lo demand paymenL of hls llen aL Lhls [uncLure because ln
accordance wlLh SecLlon 29 of Lhe Warehouse 8ecelpLs Law Lhe warehouseman loses hls llen upon
goods by surrenderlng possesslon Lhereof n oLher words Lhe llen may be losL where Lhe
warehouseman surrenders Lhe possesslon of Lhe goods wlLhouL requlrlng paymenL of hls llen because a
warehousemans llen ls possessory ln naLure
We Lherefore uphold and susLaln Lhe valldlLy of Lhe assalled orders of publlc respondenL daLed
uecember 20 1994 and March 1 1993
n flne we fall Lo see any LalnL of abuse of dlscreLlon on Lhe parL of Lhe publlc respondenL ln lssulng Lhe
quesLloned orders whlch recognlzed Lhe leglLlmaLe rlghL of noahs Ark afLer belng declared as
warehouseman Lo recover sLorage fees before lL would release Lo Lhe n8 sugar sLocks covered by Lhe
flve (3) Warehouse 8ecelpLs Cur resoluLlon daLed March 9 1994 dld noL preclude prlvaLe respondenLs
unquallfled rlghL Lo esLabllsh lLs clalm Lo recover sLorage fees whlch ls recognlzed under 8epubllc AcL no
2137 nelLher dld Lhe CourL of Appeals declslon daLed uecember 13 1991 resLrlcL such rlghL
Cur 8esoluLlons reference Lo Lhe declslon by Lhe CourL of Appeals daLed uecember 13 1991 ln CAC8
S no 23938 was lnLended Lo gulde Lhe parLles ln Lhe subsequenL dlsposlLlon of Lhe case Lo lLs flnal end
We cerLalnly dld noL foreclose prlvaLe respondenLs lnherenL rlghL as warehouseman Lo collecL sLorage
fees and preservaLlon expenses as sLlpulaLed on Lhe face of each of Lhe Warehouse 8ecelpLs and as
provlded for ln Lhe Warehouse 8ecelpLs Law (8A 2137)

eLlLloners moLlon Lo reconslder Lhe declslon ln C8 no 119231 was denled
AfLer Lhe declslon ln C8 no 119231 became flnal and execuLory varlous lncldenLs Look place before Lhe Lrlal courL ln Clvll
Case no 9033023 1he peLlLlon ln Lhls case summarlzes Lhese as follows
324 ursuanL Lo Lhe abovemenLloned Supreme CourL ueclslon prlvaLe respondenLs flled a MoLlon for
LxecuLlon of uefendanLs Llen as Warehouseman daLed 27 november 1996 A phoLocopy of sald MoLlon
for LxecuLlon ls aLLached hereLo as Annex
323 n8 opposed sald MoLlon on Lhe followlng grounds
(a) 1he llen clalmed by noahs Ark ln Lhe unbellevable
amounL of 73434139306 ls lllusory and
(b) 1here ls no legal basls for execuLlon of defendanLs llen
as warehouseman unless and unLll n8 compels Lhe dellvery
of Lhe sugar sLocks
326 n Lhelr 8eply Lo CpposlLlon daLed 18 !anuary 1997 prlvaLe respondenLs polnLed ouL LhaL a llen
exlsLed ln Lhelr favor as held by Lhe Supreme CourL n lLs 8e[olnder daLed 7 lebruary 1997 n8
counLered prlvaLe respondenLs argumenL polnLlng ouL LhaL Lhe dlsposlLlve porLlon of Lhe courL o poos
Crder daLed 1 March 1993 falled Lo sLaLe Lhe amounL for whlch execuLlon may be granLed and Lhus Lhe
same could noL be Lhe sub[ecL of execuLlon and (b) prlvaLe respondenLs should lnsLead flle a separaLe
acLlon Lo prove Lhe amounL of lLs clalm as warehouseman
327 1he courL o poo Lhls Llme preslded by hereln publlc respondenL Pon Marcellno L Sayo !r granLed
prlvaLe respondenLs MoLlon for LxecuLlon n lLs quesLloned Crder daLed 13 Aprll 1997 (Annex A) Lhe
courL o poo ruled ln Lhls wlse
Accordlngly Lhe compuLaLlon of accrued sLorage fees and preservaLlon charges
presenLed ln evldence by Lhe defendanLs ln Lhe amounL of 73434139306 as of
!anuary 31 1993 for Lhe 8633641 30 kg bags of sugar belng ln order and wlLh
sufflclenL basls Lhe same should be granLed 1hls CourL consequenLly re[ecLs n8s
clalm of no sugar no llen slnce lL ls undlspuLed LhaL Lhe amounL of Lhe accrued
sLorage fees ls subsLanLlally ln excess of Lhe alLernaLlve award of 391 Mllllon ln
favor of n8 lncludlng legal lnLeresL and 13000000 ln aLLorneys fees whlch
n8 ls however enLlLled Lo be credlLed
xxx xxx xxx
WPL8LlC8L premlses consldered and flndlng merlL ln Lhe defendanLs moLlon for
execuLlon of Lhelr clalm for llen as warehouseman Lhe same ls hereby C8An1Lu
Accordlngly leL a wrlL of execuLlon lssue for Lhe amounL of 66234861130 ln
accordance wlLh Lhe above dlsposlLlon
SC C8uL8Lu (Lmphasls supplled)
328 Cn 23 Aprll 1997 n8 was lmmedlaLely served wlLh a WrlL of LxecuLlon for Lhe amounL of
66234861130 ln splLe of Lhe facL LhaL lL had noL yeL been served wlLh Lhe Crder of Lhe courL o poo
daLed 13 Aprll 1997 n8 Lhus flled an urgenL MoLlon daLed 23 Aprll 1997 seeklng Lhe defermenL of Lhe
enforcemenL of Lhe WrlL of LxecuLlon A phoLocopy of Lhe WrlL of LxecuLlon ls aLLached hereLo as Annex
!
329 neverLheless Lhe Sherlff levled on execuLlon several properLles of n8 llrsLly a noLlce of Levy
daLed 24 Aprll 1997 on a parcel of land wlLh an area of nlneLynlne 1housand nlne Pundred nlneLynlne
(99999) square meLers covered by 1ransfer CerLlflcaLe of 1lLle no 23203 ln Lhe name of n8 was
served upon Lhe 8eglsLer of ueeds of asay ClLy Secondly a noLlce of CarnlshmenL daLed 23 Aprll 1997
on fund deposlLs of n8 was served upon Lhe 8angko SenLral ng lllplnas hoLocoples of Lhe noLlce of
Levy and Lhe noLlce of CarnlshmenL are aLLached hereLo as Annexes k and L respecLlvely
330 Cn 28 Aprll 1997 peLlLloner flled a MoLlon for 8econslderaLlon wlLh urgenL rayer for Cuashal of
WrlL of LxecuLlon daLed 13 Aprll 1997 eLlLloners MoLlon was based on Lhe followlng grounds
(1) noahs Ark ls noL enLlLled Lo a warehousemans llen ln
Lhe humongous amounL of 73434139306 because Lhe
same has been walved for noL havlng been ralsed earller as
elLher counLerclalm or defense agalnsL n8
(2) Assumlng sald llen has noL been walved Lhe same noL
belng reglsLered ls already barred by prescrlpLlon and/or
laches
(3) Assumlng furLher LhaL sald llen has noL been walved nor
barred sLlll Lhere was no complalnL ever flled ln courL Lo
effecLlvely commence Lhls enLlrely new cause of acLlon
(4) 1here ls no evldence on record whlch would supporL and
susLaln Lhe clalm of 73434139306 whlch ls excesslve
oppresslve and unconsclonable
(3) Sald clalm lf execuLed would consLlLuLe un[usL
enrlchmenL Lo Lhe serlous pre[udlce of n8 and lndlrecLly
Lhe hlllpplne CovernmenL who lnnocenLly acqulred Lhe
sugar quedans Lhrough asslgnmenL of credlL
(6) n all respecLs Lhe declslons of boLh Lhe Supreme CourL
and of Lhe former resldlng !udge of Lhe Lrlal courL do noL
conLaln a speclflc deLermlnaLlon and/or compuLaLlon of
warehousemans llen Lhus requlrlng flrsL and foremosL a falr
hearlng of n8s evldence Lo lnclude Lhe Lrue and sLandard
lndusLry raLes on sugar sLorage fees whlch lf compuLed aL
such sLandard raLe of LhlrLy cenLavos per kllogram per
monLh shall resulL ln Lhe sum of abouL 1hree Pundred
1housand esos only
331 n lLs MoLlon for 8econslderaLlon peLlLloner prayed for Lhe followlng rellefs
1 n8 be allowed ln Lhe meanLlme Lo exerclse lLs baslc rlghL Lo presenL evldence
ln order Lo prove Lhe above allegaLlons especlally Lhe Lrue and reasonable sLorage
fees whlch may be deducLed from n8s [udgmenL award of 391 Mllllon whlch
sLorage fees lf compuLed correcLly ln accordance wlLh sLandard sugar lndusLry
raLes would amounL Lo only 300 1housand esos wlLhouL however walvlng or
abandonlng lLs (n8s) legal poslLlons/conLenLlons hereln abovemenLloned
2 1he Crder daLed Aprll 13 1997 granLlng Lhe MoLlon for LxecuLlon by defendanL
noahs Ark be seL aslde
3 1he execuLlon proceedlngs already commenced by sald sherlffs be nulllfled aL
whaLever sLage of accompllshmenL
A phoLocopy of peLlLloners MoLlon for 8econslderaLlon wlLh urgenL rayer for Cuashal of WrlL of
LxecuLlon ls aLLached hereLo and made lnLegral parL hereof as Annex M
332 rlvaLe respondenLs flled an CpposlLlon wlLh MoLlon for arLlal 8econslderaLlon daLed 8 May 1997
SLlll dlsconLenLed wlLh Lhe excesslve and sLaggerlng amounL awarded Lo Lhem by Lhe courL o poo prlvaLe
respondenLs MoLlon for arLlal 8econslderaLlon soughL addlLlonal and conLlnulng sLorage fees over and
above whaL Lhe courL o poo had already un[usLly awarded A phoLocopy of prlvaLe respondenLs
CpposlLlon wlLh MoLlon for arLlal 8econslderaLlon daLed 8 May 1997 ls aLLached hereLo as Annex n
3321 rlvaLe respondenLs prayed for Lhe furLher amounL of 22737347200 ln
sLorage fees from 1 lebruary 1993 unLll 13 Aprll 1997 Lhe daLe of Lhe quesLloned
Crder granLlng Lhelr MoLlon for LxecuLlon
3322 n Lhe same manner prlvaLe respondenLs prayed for a conLlnulng amounL
of 34342400 as dally sLorage fees afLer 13 Aprll 1997 unLll Lhe LoLal amounL of
Lhe sLorage fees ls saLlsfled
333 Cn 19 May 1997 n8 flled lLs 8eply wlLh CpposlLlon (1o uefendanLs CpposlLlon wlLh arLlal
MoLlon for 8econslderaLlon) conLalnlng Lhereln Lhe followlng moLlons (l) SupplemenLal MoLlon for
8econslderaLlon (ll) MoLlon Lo SLrlke ouL Lhe 1esLlmony of noahs Arks AccounLanL LasL lebruary 21
1993 and (lll) MoLlon for Lhe ssuance of a WrlL of LxecuLlon ln favor of n8 n supporL of lLs pleadlng
peLlLloner ralsed Lhe followlng
(1) rlvaLe respondenLs falled Lo pay Lhe approprlaLe dockeL
fees elLher for lLs prlnclpal clalm or for lLs addlLlonal clalm
as sald clalms for warehousemans llen were noL aL all
menLloned ln Lhelr answer Lo peLlLloners ComplalnL
(2) 1he amounL awarded by Lhe courL o poo was grossly and
manlfesLly unreasonable excesslve and oppresslve
(3) L ls Lhe dlsposlLlve porLlon of Lhe declslon whlch shall be
conLrolllng ln any execuLlon proceedlng f no speclflc award
ls sLaLed ln Lhe dlsposlLlve porLlon a wrlL of execuLlon
supplylng an amounL noL lncluded ln Lhe dlsposlLlve porLlon
of Lhe declslon belng execuLed ls null and vold
(4) rlvaLe respondenLs falled Lo prove Lhe exlsLence of Lhe
sugar sLocks ln noahs Arks warehouses 1hus prlvaLe
respondenLs clalms are mere paper llens whlch cannoL be
Lhe sub[ecL of execuLlon
(3) 1he aLLendanL clrcumsLances parLlcularly !udge Ses
Crder of 1 March 1993 onwards were LalnLed wlLh fraud
and absence of due process as n8 was noL glven a falr
opporLunlLy Lo presenL lLs evldence on Lhe maLLer of Lhe
warehousemans llen 1hus all orders presclndlng
Lhereform lncludlng Lhe quesLloned Crder daLed 13 Aprll
1997 musL perforce be seL aslde and Lhe execuLlon
proceedlngs agalnsL n8 be permanenLly sLayed
334 Cn 6 May 1997 peLlLloner also flled an urgenL MoLlon Lo LlfL CarnlshmenL of n8 lunds wlLh
8angko SenLral ng lllplnas
333 Cn 14 !uly 1997 respondenL !udge lssued Lhe second Crder (Annex 8) Lhe quesLloned parL of Lhe
dlsposlLlve porLlon of whlch sLaLes
WPL8LlC8L premlses consldered Lhe plalnLlff hlllpplne naLlonal 8anks sub[ecL
MoLlon for 8econslderaLlon WlLh urgenL rayer for Cuashal of WrlL of LxecuLlon
daLed Aprll 28 1997 and undaLed urgenL MoLlon Lo LlfL CarnlshmenL of n8
lunds WlLh 8angko SenLral ng lllplnas flled on May 6 1997 LogeLher wlLh all lLs
relaLed MoLlons are all uLnLu wlLh flnallLy for lack of merlL
xxx xxx xxx
1he Crder of Lhls CourL daLed Aprll 13 1997 Lhe flnal WrlL of LxecuLlon llkewlse
daLed Aprll 13 1997 and Lhe correspondlng CarnlshmenL all sLand flrm
SC C8uL8Lu
7

Aggrleved Lhereby peLlLloners flled Lhls peLlLlon alleglng as grounds Lherefor Lhe followlng
A 1PL CCu81 A OuO AC1Lu W1PCu1 C8 n LxCLSS Cl 1S !u8SuC1Cn C8 W1P C8AvL A8uSL Cl
uSC8L1Cn WPLn 1 SSuLu A W81 Cl LxLCu1Cn n lAvC8 Cl uLlLnuAn1S lC8 1PL AMCun1 Cl
73434139306
41 1he courL o poo had no auLhorlLy Lo lssue a wrlL of execuLlon ln favor of prlvaLe respondenLs as Lhere
was no flnal and execuLory [udgmenL rlpe for execuLlon
42 ubllc respondenL [udge paLenLly exceeded Lhe scope of hls auLhorlLy ln maklng a deLermlnaLlon of
Lhe amounL of sLorage fees due prlvaLe respondenLs ln a mere lnLerlocuLory order resolvlng prlvaLe
respondenLs MoLlon for LxecuLlon
43 1he manner ln whlch Lhe courL o poo awarded sLorage fees ln favor of prlvaLe respondenLs and
ordered Lhe execuLlon of sald award was arblLrary and caprlclous deprlvlng peLlLloner of lLs lnherenL
subsLanLlve and procedural rlghLs
8 LvLn ASSuMnC A8CuLnuC 1PA1 1PL CCu81 A OuO PAu Au1PC81? 1C C8An1 8vA1L
8LSCnuLn1S MC1Cn lC8 LxLCu1Cn 1PL CCu81 A OuO AC1Lu W1P C8AvL A8uSL Cl
uSC8L1Cn n AWA8unC 1PL PCPL? un8LASCnA8LL unCCnSCCnA8LL Anu LxCLSSvL AMCun1
Cl 73434139306 n lAvC8 Cl 8vA1L 8LSCnuLn1S
44 1here ls no basls for Lhe courL o poos award of 73434139306 represenLlng prlvaLe respondenLs
alleged warehousemans llen
43 n8 has sufflclenL evldence Lo show LhaL Lhe asLronomlcal amounL clalmed by prlvaLe respondenLs ls
very much ln excess of Lhe lndusLry raLe for sLorage fees and preservaLlon expenses
C u8LC 8LSCnuLn1 !uuCLS C8AvL A8uSL Cl uSC8L1Cn 8LCCMLS MC8L A1Ln1 Al1L8 A CLCSL
L8uSAL Cl 1PL CuLS1CnLu C8uL8 uA1Lu 14 !uL? 1997
46 1he courL o poo resolved a slgnlflcanL and consequenLlal maLLer enLlrely relylng on documenLs
submlLLed by prlvaLe respondenLs LoLally dlsregardlng clearly conLrary evldence submlLLed by n8
47 1he courL o poo mlsquoLed and mlslnLerpreLed Lhe Supreme CourL ueclslon daLed 18 Aprll 1997
u 1PL CCu81 A OuO AC1Lu W1P C8AvL A8uSL Cl uSC8L1Cn n nC1 PCLunC 1PA1 8vA1L
8LSCnuLn1S PAvL LCnC WAvLu 1PL8 8CP1 1C CLAM An? WA8LPCuSLMAnS LLn
48 rlvaLe respondenLs ralsed Lhe maLLer of Lhelr enLlLlemenL Lo a warehousemans llen for sLorage fees
and preservaLlon expenses for Lhe flrsL Llme only durlng Lhe execuLlon proceedlngs of Lhe ueclslon ln
favor of n8
49 rlvaLe respondenLs clalm for warehousemans llen ls ln Lhe naLure of a compulsory counLerclalm
whlch should have been lncluded ln prlvaLe respondenLs answer Lo Lhe ComplalnL rlvaLe respondenLs
falled Lo lnclude sald clalm ln Lhelr answer elLher as a counLerclalm or as an alLernaLlve defense Lo n8s
ComplalnL
410 rlvaLe respondenLs clam ls llkewlse losL by vlrLue of a speclflc provlslon of Lhe Warehouse 8ecelpLs
Law and barred by prescrlpLlon and laches
L u8LC 8LSCnuLn1 !uuCL AC1Lu W1P C8AvL A8uSL Cl uSC8L1Cn n 8LluSnC 1C Ll1 1PL
C8uL8 Cl CA8nSPMLn1 Cl 1PL lunuS Cl n8 W1P 1PL 8AnCkC SLn18AL nC LnAS
411 ubllc respondenL [udge falled Lo conslder n8s argumenLs ln supporL of lLs urgenL moLlon Lo LlfL
CarnlshmenL
8

n argulng lLs cause peLlLloner explalned LhaL Lhls CourLs declslon ln C8 no 119231 merely afflrmed Lhe Lrlal courLs
resoluLlons of 20 uecember 1994 and 1 March 1993 1he earller resoluLlon seL prlvaLe respondenLs recepLlon of evldence for
hearlng Lo prove Lhelr warehousemans llen and pendlng deLermlnaLlon Lhereof deferred peLlLloners moLlon for execuLlon of
Lhe summary [udgmenL rendered ln peLlLloners favor ln C8 no 107243 1he subsequenL resoluLlon recognlzed Lhe exlsLence
of a valld warehousemans llen wlLhouL however speclfylng Lhe amounL and requlred lLs full saLlsfacLlon by peLlLloner prlor Lo
Lhe execuLlon of Lhe [udgmenL ln C8 no 107243
under sald clrcumsLances peLlLloner relLeraLed LhaL nelLher Lhls CourLs declslon nor Lhe Lrlal courLs resoluLlons speclfled any
amounL for Lhe warehousemans llen elLher ln Lhe bodles or dlsposlLlve porLlons Lhereof eLlLloner Lherefore quesLloned Lhe
proprleLy of Lhe compuLaLlon of Lhe warehousemans llen ln Lhe assalled order of 13 Aprll 1997
eLlLloner furLher characLerlzed as hlghly lrregular Lhe Lrlal courLs flnal deLermlnaLlon of such llen ln a mere lnLerlocuLory
order wlLhouL explanaLlon as such should or could have been done only by way of a [udgmenL on Lhe merlLs eLlLloner
llkewlse reasoned LhaL a wrlL of execuLlon was proper only Lo lmplemenL a flnal and execuLory declslon whlch was noL presenL
ln Lhe lnsLanL case eLlLloner Lhen clLed Lhe cases of JwotJ v Atce where we ruled LhaL Lhe only porLlon of Lhe declslon
whlch could be Lhe sub[ecL of execuLlon was LhaL decreed ln Lhe dlsposlLlve parL
9
and x8otooo vetetoos 5ecotlty Aqeocy loc
v Notloool lobot kelotloos commlssloo
10
where we held LhaL a wrlL of execuLlon should conform Lo Lhe dlsposlLlve porLlon Lo
be execuLed oLherwlse execuLlon becomes vold lf ln excess of and beyond Lhe orlglnal [udgmenL
eLlLloner llkewlse emphaslzed LhaL Lhe hearlng of 21 lebruary 1993 was marred by procedural lnflrmlLles narraLlng LhaL Lhe
Lrlal courL proceeded wlLh Lhe hearlng noLwlLhsLandlng Lhe urgenL moLlon for posLponemenL of peLlLloners counsel of record
who aLLended a prevlously scheduled hearlng ln ampanga Powever peLlLloners lawyerrepresenLaLlve was senL Lo conflrm
Lhe allegaLlons ln sald moLlon 1o peLlLloners dlsmay lnsLead of granLlng a posLponemenL Lhe Lrlal courL allowed Lhe
conLlnuance of Lhe hearlng on Lhe basls LhaL Lhere was noLhlng senslLlve abouL Lhe presenLaLlon of prlvaLe respondenLs
evldence
11
AL Lhe same hearlng Lhe Lrlal courL admlLLed all Lhe documenLary evldence offered by prlvaLe respondenLs and
ordered Lhe flllng of Lhe parLles respecLlve memoranda Pence peLlLloner was vlrLually deprlved of lLs rlghL Lo crossexamlne
Lhe wlLness commenL on or ob[ecL Lo Lhe offer of evldence and presenL counLervalllng evldence n facL Lo daLe peLlLloners
urgenL moLlon Lo nulllfy Lhe courL proceedlngs remalns unresolved
1o sLress lLs polnL peLlLloner underscores Lhe confllcLlng vlews of !udge 8enlLo C Se !r who heard and Lrled almosL Lhe enLlre
proceedlngs and hls successor !udge Marcellno L Sayo !r who lssued Lhe assalled orders n Lhe resoluLlon
12
of 1 March
1993 !udge Se found prlvaLe respondenLs clalm for warehouse llen ln Lhe amounL of 73434139306 unaccepLable Lhus
n connecLlon wlLh prlvaLe respondenLs clalm for paymenL of warehouslng fees and expenses Lhls
CourL cannoL accepL prlvaLe respondenLs preLense LhaL Lhey are enLlLled Lo sLorage fees and
preservaLlon expenses ln Lhe amounL of 73434139306 as shown ln Lhelr LxhlblLs 1 Lo 11 1here
would however appear Lo be legal basls for Lhelr clalm for fees and expenses covered durlng Lhe perlod
from Lhe Llme of Lhe lssuance of Lhe flve (3) quedans unLll demand for Lhelr dellvery was made by
peLlLloner prlor Lo Lhe lnsLlLuLlon of Lhe presenL acLlon eLlLloner should noL be made Lo shoulder Lhe
warehouslng fees and expenses afLer Lhe demand was made
13

Slnce lL was deprlved of a falr opporLunlLy Lo presenL lLs evldence on Lhe warehousemans llen due noahs Ark peLlLloner
submlLLed Lhe followlng documenLs (1) an affldavlL of peLlLloners credlL lnvesLlgaLor
14
and hls reporL
1S
lndlcaLlng LhaL noahs
Ark only had 1490 30kg bags and noL 8633641 30kg bags of sugar ln lLs warehouse (2) noahs Arks reporLs
1
for 199094
showlng LhaL lL dld noL have sufflclenL sugar sLock Lo cover Lhe quanLlLy speclfled ln Lhe sub[ecL poeJoos (3) Clrcular LeLLer no
18 (s 198788)
17
of Lhe Sugar 8egulaLory AdmlnlsLraLlon requlrlng sugar mlll companles Lo submlL reporLs aL weeks end Lo
prevenL Lhe lssuance of warehouse recelpLs noL covered by acLual lnvenLory and (4) an affldavlL of peLlLloners asslsLanL vlce
presldenL
18
alleglng LhaL noahs Arks dally sLorage fee of 4/bag exceeded Lhe prevalllng lndusLry raLe
eLlLloner moreover lald sLress on Lhe facL LhaL ln Lhe quesLloned order of 14 !uly 1997 Lhe Lrlal courL relled solely on Lhe
Annual Synopsls of roducLlon erformance uaLe/Annual Compendlum of erformance by hlllpplne Sugar 8eflnerles from
1989 Lo 1994 ln dlsregard of noahs Arks cerLlfled reporLs LhaL lL dld noL have sufflclenL sugar sLock Lo cover Lhe quanLlLy
speclfled ln Lhe sub[ecL poeJoos 8eLween Lhe Lwo peLlLloner urged Lhe laLLer should have been accorded greaLer evldenLlary
welghL
eLlLloner Lhen argued LhaL Lhe Lrlal courLs second assalled order of 14 !uly 1997 mlslnLerpreLed our declslon ln C8 no
119231 by rullng LhaL Lhe 8eflnlng ConLracL under whlch Lhe sub[ecL sugar sLock was produced bound Lhe parLles Accordlng Lo
peLlLloner Lhe 8eflnlng ConLracL never exlsLed lL havlng been denled by 8osa ng Sy Lhus Lhe Lrlal courL could noL have
properly based lLs compuLaLlon of Lhe warehousemans llen on Lhe 8eflnlng ConLracL eLlLloner malnLalned LhaL a separaLe
Lrlal was necessary Lo seLLle Lhe lssue of Lhe warehousemans llen due noahs Ark lf aL all proper
eLlLloner furLher asserLed LhaL noahs Ark could no longer recover lLs llen havlng ralsed Lhe lssue for Lhe flrsL Llme only durlng
Lhe execuLlon proceedlngs of Lhls CourLs declslon ln C8 no 107243 As sald clalm was a separaLe cause of acLlon whlch
should have been ralsed ln prlvaLe respondenLs answer wlLh counLerclalm Lo peLlLloners complalnL prlvaLe respondenLs
fallure Lo ralse sald clalm should have been deemed a walver Lhereof
eLlLloner llkewlse lnslsLed LhaL under SecLlon 29
19
of Lhe Warehouse 8ecelpLs Law prlvaLe respondenLs were barred from
clalmlng Lhe warehousemans llen due Lo Lhelr refusal Lo dellver Lhe goods upon peLlLloners demand eLlLloner furLher ralsed
LhaL prlvaLe respondenLs falled Lo Llmely asserL Lhelr clalm wlLhln Lhe flveyear prescrlpLlve perlod cltloq ArLlcle 1149
20
of Lhe
new Clvll Code
llnally peLlLloner quesLloned Lhe Lrlal courLs refusal Lo llfL Lhe garnlshmenL order conslderlng LhaL Lhe levy on lLs real properLy
wlLh an esLlmaLed markeL value of 6000000000 was sufflclenL Lo saLlsfy Lhe [udgmenL award and conLended LhaL Lhe
garnlshmenL was conLrary Lo SecLlon 103
21
of Lhe 8angko SenLral ng lllplnas Law (8epubllc AcL no 7633)
Cn 8 AugusL 1997 we requlred respondenLs Lo commenL on Lhe peLlLlon and lssued a Lemporary resLralnlng order en[olnlng
Lhe Lrlal courL form lmplemenLlng lLs orders of 13 Aprll and 14 !uly 1997
n Lhelr commenL prlvaLe respondenLs flrsL soughL Lhe llfLlng of Lhe Lemporary resLralnlng order clalmlng LhaL peLlLloner could
no longer seek a sLay of Lhe execuLlon of Lhls CourLs declslon ln C8 no 119231 whlch had become flnal and execuLory and
Lhe peLlLlon ralsed facLual lssues whlch had long been resolved ln Lhe declslon ln C8 no 119231 Lhereby renderlng Lhe
lnsLanL peLlLlon mooL and academlc 1hey underscored LhaL CAC8 no S no 23938 C8 no 107243 and C8 no 119231 all
susLalned Lhelr clalm for a warehousemans llen whlle Lhe sLorage fees sLlpulaLed ln Lhe 8eflnlng ConLracL had Lhe approval of
Lhe Sugar 8egulaLory AuLhorlLy Llkewlse under Lhe Warehouse 8ecelpLs Law full paymenL of Lhelr llen was a prerequlslLe Lo
Lhelr obllgaLlon Lo release and dellver Lhe sugar sLock Lo peLlLloner
AnenL Lhe Lrlal courLs [urlsdlcLlon Lo deLermlne Lhe warehousemans llen prlvaLe respondenLs malnLalned LhaL such had
already been esLabllshed Accordlngly Lhe resoluLlon of 1 March 1993 declared LhaL Lhey were enLlLled Lo a warehousemans
llen for whlch reason Lhe execuLlon of Lhe [udgmenL ln favor of peLlLloner was sLayed unLll Lhe laLLers full paymenL of Lhe llen
1hls resoluLlon was Lhen afflrmed by Lhls CourL ln our declslon ln C8 no 119231 Lven assumlng Lhe Lrlal courL erred Lhe
error could only have been ln Lhe wlsdom of lLs flndlngs and noL of [urlsdlcLlon ln whlch case Lhe proper remedy of peLlLloner
should have been an appeal and cettlototl dld noL lle
rlvaLe respondenLs also ralsed Lhe lssue of tes joJlcoto as a bar Lo Lhe lnsLanL peLlLlon le Lhe March resoluLlon was already
flnal and unappealable havlng been resolved ln C8 no 119231 and Lhe orders assalled here were lssued merely Lo
lmplemenL sald resoluLlon
rlvaLe respondenLs Lhen debunked Lhe clalm LhaL peLlLloner was denled due process n LhaL lebruary hearlng peLlLloner was
represenLed by counsel who falled Lo ob[ecL Lo Lhe presenLaLlon and offer of Lhelr evldence conslsLlng of Lhe flve poeJoos
8eflnlng ConLracLs wlLh peLlLloner and oLher poeJoo holders and Lhe compuLaLlon resulLlng ln Lhe amounL of 73434139306
among oLher documenLs rlvaLe respondenLs even aLLached a copy of Lhe LranscrlpL of sLenographlc noLes
22
Lo Lhelr
commenL n refuLlng peLlLloners argumenL LhaL no wrlL of execuLlon could lssue ln absence of a speclflc amounL ln Lhe
dlsposlLlve porLlon of Lhls CourLs declslon ln C8 no 119231 prlvaLe respondenLs argued LhaL any amblgulLy ln Lhe declslon
could be resolved by referrlng Lo Lhe enLlre record of Lhe case
23
even afLer Lhe declslon had become flnal
rlvaLe respondenLs nexL alleged LhaL Lhe award of 73434139306 Lo saLlsfy Lhelr warehousemans llen was ln accordance
wlLh Lhe sLlpulaLlons provlded ln Lhe poeJoos and Lhe correspondlng 8eflnlng ConLracLs and LhaL Lhe valldlLy of sald
documenLs had been recognlzed by Lhls CourL ln our declslon ln C8 no 119231 rlvaLe respondenLs Lhen quesLloned
peLlLloners fallure Lo oppose or rebuL Lhe evldence Lhey presenLed and bewalled lLs belaLed aLLempLs Lo presenL conLrary
evldence Lhrough lLs pleadlngs noneLheless sald evldence was even consldered by Lhe Lrlal courL when peLlLloner soughL a
reconslderaLlon of Lhe flrsL assalled order of 13 Aprll 1997 Lhus furLher precludlng any clalm of denlal of due process
rlvaLe respondenLs nexL polnLed Lo Lhe facL LhaL Lhey conslsLenLly clalmed LhaL Lhey had noL been pald for sLorlng Lhe sugar
sLock whlch prompLed Lhem Lo flle crlmlnal charges of esLafa and vlolaLlon of 8aLas ambansa (8) 8lg 22 agalnsL 8osa ng Sy
and 1ereslLa ng n facL Sy was evenLually convlcLed of Lwo counLs of vlolaLlon of 8 8lg 22 rlvaLe respondenLs moreover
lncurred and conLlnue Lo lncur expenses for Lhe sLorage and preservaLlon of Lhe sugar sLock and denled havlng walved Lhelr
warehousemans llen an lssue already ralsed and re[ecLed by Lhls CourL ln C8 no 119231
rlvaLe respondenLs furLher clalmed LhaL Lhe garnlshmenL order was proper only LhaL lL was rendered lneffecLlve n a leLLer
24

recelved by Lhe sherlff from Lhe 8angko SenLral ng lllplnas lL was sLaLed LhaL Lhe garnlshmenL could noL be enforced slnce
peLlLloners deposlLs wlLh Lhe 8angko SenLral ng lllplnas conslsLed solely of legal reserves whlch were exempL from
garnlshmenL eLlLloner Lherefore suffered no damage from sald garnlshmenL rlvaLe respondenLs llkewlse deemed
lmmaLerlal peLlLloners argumenL LhaL Lhe wrlL of execuLlon lssued agalnsL lLs real properLy ln asay ClLy was sufflclenL
conslderlng lLs prevalllng markeL value of 6000000000 was ln excess of Lhe warehousemans llen and lnvoked 8ule 39 of
Lhe 1997 8ules of Clvll rocedure whlch provlded LhaL Lhe sherlff musL levy on all Lhe properLy of Lhe [udgmenL debLor
excludlng Lhose exempL from execuLlon ln Lhe execuLlon of a money [udgmenL
llnally prlvaLe respondenLs accused peLlLloner of comlng Lo courL wlLh unclean hands speclflcally clLlng lLs mlsrepresenLaLlon
LhaL Lhe award of Lhe warehousemans llen would resulL ln Lhe collapse of lLs buslness 1hls clalm prlvaLe respondenLs
asserLed was conLradlcLed by peLlLloners 1996 AudlLed llnanclal SLaLemenL lndlcaLlng LhaL peLlLloners asseLs amounLed Lo
bllllons of pesos and lLs 1996 Annual 8eporL Lo lLs sLockholders where peLlLloner declared LhaL Lhe pendlng legal acLlons arlslng
from Lhelr normal course of buslness wlll noL maLerlally affecL Lhe Croups flnanclal poslLlon
2S

n reply peLlLloner advocaLed LhaL resorL Lo Lhe remedy of cettlototl was proper slnce Lhe assalled orders were lnLerlocuLory
and noL a flnal [udgmenL or declslon lurLher LhaL lL was vlrLually deprlved of lLs consLlLuLlonal rlghL Lo due process was a valld
lssue Lo ralse ln Lhe lnsLanL peLlLlon and noL even Lhe docLrlne of tes joJlcoto could bar Lhls peLlLlon as Lhe elemenL of a flnal
and execuLory [udgmenL was lacklng eLlLloner llkewlse dlspuLed Lhe clalm LhaL Lhe resoluLlon of 1 March 1993 was flnal and
execuLory oLherwlse prlvaLe respondenLs would noL have flled an opposlLlon and moLlon for parLlal reconslderaLlon
2
Lwo
years laLer eLlLloner also conLended LhaL Lhe lssues ralsed ln Lhls peLlLlon were noL resolved ln C8 no 119231 as whaL was
resolved Lhere was prlvaLe respondenLs mere enLlLlemenL Lo a warehousemans llen wlLhouL speclfylng a correspondlng
amounL n Lhe lnsLanL peLlLlon Lhe lssues perLalned Lo Lhe amounL and enforceablllLy of sald llen based on Lhe arblLrary
manner Lhe amounL was deLermlned by Lhe Lrlal courL
eLlLloner furLher argued LhaL Lhe reflnlng conLracLs prlvaLe respondenLs lnvoked could noL blnd Lhe former slnce lL was noL a
parLy LhereLo n facL sald conLracLs were noL even aLLached Lo Lhe poeJoos when negoLlaLed and LhaL Lhelr valldlLy was
repudlaLed by a supposed parLy LhereLo 8osa ng Sy who clalmed LhaL Lhe conLracL was slmulaLed Lhus vold pursuanL Lo
ArLlcle 1343 of Lhe new Clvll Code Should Lhe reflnlng conLracLs ln Lurn be declared vold peLlLloner advocaLed LhaL any
deLermlnaLlon by Lhe courL of Lhe exlsLence and amounL of Lhe warehousemans llen due should be arrlved aL uslng Lhe LesL of
reasonableness eLlLloner llkewlse noLed LhaL Lhe oLher reflnlng conLracLs
27
presenLed by prlvaLe respondenLs Lo show slmllar
sLorage fees were execuLed beLween Lhe years 1996 and 1997 several years afLer 1989 1hus peLlLloner concluded prlvaLe
respondenLs could noL clalm LhaL Lhe more recenL and lncreased raLes where Lhose whlch prevalled ln 1989
llnally peLlLloner asserLed LhaL ln Lhe evenL LhaL Lhls CourL should uphold Lhe Lrlal courLs deLermlnaLlon of Lhe amounL of Lhe
warehousemans llen peLlLloner should be allowed Lo exerclse lLs opLlon as a [udgmenL obllgor Lo speclfy whlch of lLs
properLles may be levled upon clLlng SecLlon 9(b) 8ule 39 of Lhe 1997 8ules of Clvll rocedure eLlLloner clalmed Lo have
been deprlved of Lhls opLlon when Lhe Lrlal courL lssued Lhe garnlshmenL and levy orders
1he peLlLlon was seL for oral argumenL on 24 november 1997 where Lhe parLles addressed Lhe followlng lssues we formulaLed
for Lhem Lo dlscuss
(1) s Lhls speclal clvll acLlon Lhe approprlaLe remedy?
(2) Pas Lhe Lrlal courL Lhe auLhorlLy Lo lssue a wrlL of execuLlon on noahs Arks clalms for sLorage fees
conslderlng LhaL Lhls CourL ln C8 no 119231 merely susLalned Lhe Lrlal courLs order of 20 uecember
1994 granLlng Lhe noahs Ark Cmnlbus MoLlon and seLLlng Lhe recepLlon of evldence on lLs clalms for
sLorage fees and of 1 March 1993 flndlng LhaL Lhere exlsLed ln favor of noahs Ark a warehousemans
llen under SecLlon 27 of 8A no 2137 and dlrecLlng LhaL Lhe execuLlon of Lhe [udgmenL ln favor of n8
be sLayed and/or precluded unLll Lhe full amounL of noahs Arks llen ls saLlsfled conformably wlLh
SecLlon 31 of 8A no 2137?
(3) s peLlLloner llable for sLorage fees (a) from Lhe lssuance of Lhe quedans ln 1989 Lo 8osa Sy SL
1herese Merchandlslng and 8nS Merchandlslng up Lo Lhelr asslgnmenL by endorsees 8amos and ZoleLa
Lo peLlLloner for Lhelr loan or (b) afLer peLlLloner has flled an acLlon for speclflc performance and
damages (Clvll Case no 9033023) agalnsL noahs Ark for Lhe laLLers fallure Lo comply wlLh peLlLloners
demand for Lhe dellvery of Lhe sugar?
(4) uld respondenL !udge commlL grave abuse of dlscreLlon as charged?
28

n our resoluLlon of 24 november 1997 we summarlzed Lhe poslLlons of Lhe parLles on Lhese lssues Lhus
LxpecLedly counsel for peLlLloner submlLLed LhaL cettlototl under 8ule 63 of Lhe 8ules of CourL ls Lhe
proper remedy and noL an ordlnary appeal conLendlng among oLhers LhaL Lhe order of execuLlon was
noL flnal Cn Lhe oLher hand counsel for respondenLs malnLalned LhaL peLlLloner n8 dlsregarded Lhe
hlerarchy of courLs as lL bypassed Lhe CourL of Appeals when lL flled Lhe lnsLanL peLlLlon before Lhls
CourL
Cn Lhe second lssue counsel for peLlLloner submlLLed LhaL Lhe Lrlal courL had no auLhorlLy Lo lssue Lhe
wrlL of execuLlon or lf lL had lL denled n8 due process when lL held n8 llable for Lhe asLronomlcal
amounL or 73434139306 as warehousemans llen or sLorage fees Counsel for respondenL on Lhe
oLher hand conLended LhaL Lhe Lrlal courLs auLhorlLy Lo lssue Lhe quesLloned wrlL of execuLlon ls derlved
from Lhe declslon ln C8 no 119231 whlch declslon allegedly provlded for ample or sufflclenL
parameLers for Lhe compuLaLlon of Lhe sLorage fees
Cn Lhe Lhlrd lssue counsel for peLlLloner whlle presupposlng LhaL n8 may be held Lo answer for sLorage
fees conLended LhaL Lhe same should sLarL from Lhe Llme Lhe endorsees of Lhe sugar quedans defaulLed
ln Lhelr paymenLs le 1990 because before LhaL respondenL noahs Arks clalm was LhaL lL was Lhe
owner of Lhe sugar covered by Lhe quedans Cn Lhe oLher hand respondenLs counsel polnLed ouL LhaL
n8s llablllLy should sLarL from Lhe lssuance of Lhe quedans ln 1989
1he argumenLs on Lhe fourLh lssue hlnge on Lhe parLles argumenLs for or agalnsL Lhe flrsL Lhree lssues
Counsel for peLlLloner sLressed LhaL Lhe Lrlal courL lndeed commlLLed a grave abuse of dlscreLlon whlle
respondenLs counsel lnslsLed LhaL no grave abuse of dlscreLlon was commlLLed by Lhe Lrlal courL
29

rlvaLe respondenLs llkewlse admlLLed LhaL durlng Lhe pendency of Lhe case Lhey falled Lo avall of Lhelr opLlons as a
warehouseman ConcreLely Lhey could have enforced Lhelr llen Lhrough Lhe foreclosure of Lhe goods or Lhe flllng of an
ordlnary clvll acLlon nsLead Lhey soughL Lo execuLe Lhls CourLs [udgmenL ln C8 no 119231 1hey evenLually agreed LhaL
peLlLloners llablllLy for Lhe warehousemans llen should be reckoned from Lhe Llme lL sLepped lnLo Lhe shoes of Lhe orlglnal
deposlLors
30

n our resoluLlon of 24 november 1997 we requlred Lhe parLles Lo slmulLaneously submlL Lhelr respecLlve memoranda wlLhln
30 days or ln Lhe alLernaLlve a compromlse agreemenL should a seLLlemenL be achleved noLwlLhsLandlng efforLs exerLed by
Lhe parLles no muLually accepLable soluLlon was reached
n Lhelr respecLlve memoranda Lhe parLles relLeraLed or oLherwlse buLLressed Lhe argumenLs ralsed ln Lhelr prevlous pleadlngs
and durlng Lhe oral argumenLs on 24 november 1997 especlally on Lhe formulaLed lssues
1he peLlLlon ls merlLorlous
We shall Lake up Lhe formulaLed lssues ln setlotlm
A 1bls 5peclol clvll Actloo ls oo Apptoptlote kemeJy
A careful perusal of Lhe flrsL assalled order shows LhaL Lhe Lrlal courL noL only granLed Lhe moLlon for execuLlon buL also
appreclaLed Lhe evldence ln Lhe deLermlnaLlon of Lhe warehousemans llen formulaLed lLs compuLaLlon of Lhe llen and
adopLed an offseLLlng of Lhe parLles clalms nelucLably Lhe order as ln Lhe naLure of a flnal order for lL lefL noLhlng else Lo be
resolved LhereafLer Pence peLlLloners remedy was Lo appeal Lherefrom
31
neverLheless peLlLloner was noL precluded from
avalllng of Lhe exLraordlnary remedy of cettlototl under 8ule 63 of Lhe 8ules of CourL L ls wellseLLled LhaL Lhe avallablllLy of an
appeal does noL foreclose recourse Lo Lhe exLraordlnary remedles of cettlototl or prohlblLlon where appeal ls noL adequaLe or
equally beneflclal speedy and sufflclenL
32

eLlLloner assalled Lhe challenged orders as havlng been lssued wlLhouL or ln excess of [urlsdlcLlon or wlLh grave abuse of
dlscreLlon and alleged LhaL lL had no oLher plaln speedy and adequaLe remedy ln Lhe ordlnary course of law As hereafLer
shown Lhese clalms were noL unfounded Lhus Lhe proprleLy of Lhls speclal clvll acLlon ls beyond quesLlon
1hls CourL had orlglnal [urlsdlcLlon concurrenL wlLh LhaL of 8eglonal 1rlal CourLs and Lhe CourL of Appeals over peLlLlons for
cettlototl prohlblLlon mooJomos poo wottooto and bobeos cotpos
33
and we enLerLaln dlrecL resorL Lo us ln cases where
speclal and lmporLanL reasons or excepLlonal and compelllng clrcumsLances [usLlfy Lhe same
34
1hese reasons and
clrcumsLances are presenL here
8 uoJet tbe 5peclol cltcomstooces lo 1bls cose ltlvote
kespooJeots Moy ofotce 1belt woteboosemoo s lleo
lo clvll cose No 905J02J
1he remedles avallable Lo a warehouseman such as prlvaLe respondenLs Lo enforce hls warehousemans llen are
(1) 1o refuse Lo dellver Lhe goods unLll hls llen ls saLlsfled pursuanL Lo SecLlon 31
of Lhe Warehouse 8ecelpL Law
(2) 1o sell Lhe goods and apply Lhe proceeds Lhereof Lo Lhe value of Lhe llen
pursuanL Lo SecLlons 33 and 34 of Lhe Warehouse 8ecelpLs Law and
(3) 8y oLher means allowed by law Lo a credlLor agalnsL hls debLor for Lhe
collecLlon from Lhe deposlLor of all charges and advances whlch Lhe deposlLor
expressly or lmplledly conLracLed wlLh Lhe warehouseman Lo pay under SecLlon 32
of Lhe Warehouse 8ecelpL Law or such oLher remedles allowed by law for Lhe
enforcemenL of a llen agalnsL personal properLy under SecLlon 33 of sald law 1he
Lhlrd remedy ls soughL [udlclally by sulng for Lhe unpald charges
3S

nlLlally prlvaLe respondenLs avalled of Lhe flrsL remedy Powever when peLlLloner moved Lo execuLe Lhe [udgmenL ln C8 no
107243 before Lhe Lrlal courL prlvaLe respondenLs ln Lurn moved Lo have Lhe warehouse charges and fees due Lhem
deLermlned and LhereafLer soughL Lo collecL Lhese from peLlLloners Whlle Lhe mosL approprlaLe remedy for prlvaLe
respondenLs was an acLlon for collecLlon ln C8 no 119231 we already recognlzed Lhelr rlghL Lo have such charges and fees
deLermlned ln Clvll Case no 9033023 1he lmporL of our holdlng ln C8 no 119231 was LhaL prlvaLe respondenLs were
llkewlse enLlLled Lo a [udgmenL on Lhelr warehouse charges and fees and Lhe evenLual saLlsfacLlon Lhereof Lhereby avoldlng
havlng Lo flle anoLher acLlon Lo recover Lhese charges and fees whlch would only have furLher delayed Lhe resoluLlon of Lhe
respecLlve clalms of Lhe parLles and as a corollary LhereLo Lhe lndeflnlLe defermenL of Lhe execuLlon of Lhe [udgmenL ln C8
no 107243 1hus we noLe LhaL peLlLloner ln facL already acqulesced Lo Lhe scheduled daLes prevlously seL for Lhe hearlng on
prlvaLe respondenLs warehousemans charges
Powever as wlll be shown below lL would be premaLure Lo execuLe Lhe order flxlng Lhe warehousemans charges and fees
c letltlooet ls lloble fot 5totoqe lees
We conflrmed peLlLloners llablllLy for sLorage fees ln C8 no 119231 Powever peLlLloners sLaLus as Lo Lhe poeJoos musL
flrsL be clearly deflned and dellneaLed Lo be able Lo deLermlne Lhe exLenL of lLs llablllLy
eLlLloner lnslsLed boLh ln lLs peLlLlon and durlng Lhe oral argumenLs on 24 november 1997 LhaL lL was a mere pleJqee as Lhe
poeJoos were used Lo secure Lwo loans lL granLed
3
n our declslon ln C8 no 107243 we upheld Lhls conLenLlon of
peLlLloner Lhus
ZoleLa and 8amos Lhen used Lhe poeJoos as securlLy for loans obLalned by Lhem from Lhe hlllpplne
naLlonal 8ank (n8) as securlLy for loans obLalned by Lhem ln Lhe amounLs of 233 mllllon and 136
mllllon respecLlvely 1hese poeJoos Lhey lndoors Lo Lhe bank
37

As such Mottloez v lblllpploe Notloool 8ook
38
becomes relevanL
n concluslon we hold LhaL where a warehouse recelpL or quedan ls Lransferred or endorsed Lo a
credlLor only Lo secure Lhe paymenL of a loan or debL Lhe Lransferee or endorsee does noL auLomaLlcally
become Lhe owner of Lhe goods covered by Lhe warehouse recelpL or quedan buL he merely reLalns Lhe
rlghL Lo keep and wlLh Lhe consenL of Lhe owner Lo sell Lhem so as Lo saLlsfy Lhe obllgaLlon from Lhe
proceeds of Lhe sale Lhls for Lhe slmple reason LhaL Lhe LransacLlon lnvolved ls noL a sale buL only a
morLgage or pledge and LhaL lf Lhe properLy covered by Lhe quedans or warehouse recelpLs ls losL
wlLhouL Lhe faulL or negllgence of Lhe morLgagee or pledgee or Lhe Lransferee or endorsee of Lhe
warehouse recelpL or quedan Lhen sald goods are Lo be regarded as losL on accounL of Lhe real owner
morLgagor or pledgor
1he lndorsemenL and dellvery of Lhe warehouse recelpLs (quedans) by 8amos and ZoleLa Lo peLlLloner was noL Lo convey LlLle
Lo or ownershlp of Lhe goods buL Lo secure (by way of pledge) Lhe loans granLed Lo 8amos and ZoleLa by peLlLloner 1he
lndorsemenL of Lhe warehouse recelpLs (quedans) Lo perfecL Lhe pledge
39
merely consLlLuLed a symbollcal or consLrucLlve
dellvery of Lhe possesslon of Lhe Lhlng Lhus encumbered
40

1he credlLor ln a conLracL of real securlLy llke pledge cannoL approprlaLe wlLhouL foreclosure Lhe Lhlngs glven by way of
pledge
41
Any sLlpulaLlon Lo Lhe conLrary Lermed poctom commlssotlo ls null and vold
42
1he law requlres foreclosure ln order
Lo allow a Lransfer of LlLle of Lhe good glven by way of securlLy from lLs pledgor
43
and before any such foreclosure Lhe
pledgor noL Lhe pledgee ls Lhe owner of Lhe goods n lblllpploe Notloool 8ook v AteoJlJo
44
we sald
1he dellvery of Lhe palay belng merely by way of securlLy lL follows LhaL by Lhe naLure of Lhe LransacLlon
lLs ownershlp remalns wlLh Lhe pledgor sub[ecL only Lo foreclosure ln case of nonfulflllmenL of Lhe
obllgaLlon 8y Lhls we mean LhaL lf Lhe obllgaLlon ls noL pald upon maLurlLy Lhe mosL LhaL Lhe pledgee
can do ls Lo sell Lhe properLy and apply Lhe proceeds Lo Lhe paymenL of Lhe obllgaLlon and Lo reLurn Lhe
balance lf any Lo Lhe pledgor (ArL 1872 Cld Clvll Code ArL 2112 new Clvll Code) 1hls ls Lhe essence
of Lhls conLracL for accordlng Lo law a pledgee cannoL become Lhe owner of nor approprlaLe Lo
hlmself Lhe Lhlng glven ln pledge (ArLlcle 1839 Cld Clvll Code ArL 2088 new Clvll Code) 1he facL
LhaL Lhe warehouse recelpL coverlng palay was dellvered endorsed ln blank Lo Lhe bank does noL alLer
Lhe slLuaLlon Lhe purpose of such endorsemenL belng merely Lo Lransfer Lhe [urldlcal possesslon of Lhe
properLy Lo Lhe pledgees and Lo foresLall any posslble dlsposlLlon Lhereof on Lhe parL of Lhe pledgor 1hls
ls Lrue noLwlLhsLandlng Lhe provlslons of Lhe Warehouse 8ecelpL Law
1he warehouseman neverLheless ls enLlLled Lo Lhe warehousemans llen LhaL aLLaches Lo Lhe goods lnvokable agalnsL anyone
who clalms a rlghL of possesslon Lhereon
1he nexL lssue Lo resolve ls Lhe duraLlon of Llme Lhe rlghL of peLlLloner over Lhe goods may be held sub[ecL Lo Lhe
warehousemans llen
Sec 8 29 and 31 of Lhe Warehouse 8ecelpLs Law now come Lo fore 1hey provlde as follows
Sec 8 Obllqotloo of woteboosemeo to Jellvet A warehouseman ln Lhe absence of some lawful
excuse provlded by Lhls AcL ls bound Lo dellver Lhe goods upon a demand made elLher by Lhe holder of a
recelpL for Lhe goods or by Lhe deposlLor lf such demand ls accompanled wlLh
(a) An offer Lo saLlsfy warehousemans llen
(b) An offer Lo surrender Lhe recelpL lf negoLlable wlLh such
lndorsemenLs as would be necessary for Lhe negoLlaLlon of
Lhe recelpL and
(c) A readlness and wllllngness Lo slgn when Lhe goods are
dellvered an acknowledgmenL LhaL Lhey have been
dellvered lf such slgnaLure ls requesLed by Lhe
warehouseman
n case Lhe warehouseman refuses or falls Lo dellver Lhe goods ln compllance wlLh a demand by Lhe
holder or deposlLor so accompanled Lhe burden shall be upon Lhe warehouseman Lo esLabllsh Lhe
exlsLence of a lawful excuse for such refusal
Sec 29 ow tbe lleo moy be lost A warehouseman loses hls llen upon goods
(a) 8y surrenderlng possesslon Lhereof or
(b) 8y refuslng Lo dellver Lhe goods when a demand ls made
wlLh whlch he ls bound Lo comply under Lhe provlslons of
Lhls AcL
Sec 31 woteboosemoo oeeJ oot Jellvet ootll lleo ls sotlsfleJ A warehouseman havlng a llen valld
agalnsL Lhe person demandlng Lhe goods may refuse Lo dellver Lhe goods Lo hlm unLll Lhe llen ls saLlsfled
Slmply puL where a valld demand by Lhe lawful holder of Lhe poeJoos for Lhe dellvery of Lhe goods ls refused by Lhe
warehouseman desplLe Lhe absence of a lawful excuse provlded by Lhe sLaLuLe lLself Lhe warehousemans llen ls LhereafLer
concomlLanLly losL As Lo whaL Lhe law deems a valld demand SecLlon 8 enumeraLes whaL musL accompany a demand whlle as
regards Lhe reasons whlch a warehouseman may lnvoke Lo legally refuse Lo effecL dellvery of Lhe goods covered by Lhe
poeJoos Lhese are
(1) 1haL Lhe holder of Lhe recelpL does noL saLlsfy Lhe condlLlons prescrlbed ln SecLlon 8 of Lhe AcL (See
Sec 8 AcL no 2137)
(2) 1haL Lhe warehouseman has legal LlLle ln hlmself on Lhe goods such LlLle or rlghL belng derlved
dlrecLly or lndlrecLly from a Lransfer made by Lhe deposlLor aL Lhe Llme of or subsequenL Lo Lhe deposlL
for sLorage or from Lhe warehousemans llen (Sec 16 AcL no 2137)
(3) 1haL Lhe warehouseman has legally seL up Lhe LlLle or rlghL of Lhlrd persons as lawful defense for non
dellvery of Lhe goods as follows
(a) Where Lhe warehouseman has been requesLed by or on behalf of Lhe person
lawfully enLlLled Lo a rlghL of properLy of or possesslon ln Lhe goods noL Lo make
such dellvery (Sec 10 AcL no 2137) ln whlch case Lhe warehouseman may
elLher as a defense Lo an acLlon broughL agalnsL hlm for nondellvery of Lhe goods
or as an orlglnal sulL whlchever ls approprlaLe requlre all known clalmanLs Lo
lnLerplead (Sec 17 AcL no 2137)
(b) Where Lhe warehouseman had lnformaLlon LhaL Lhe dellvery abouL Lo be made
was Lo one noL lawfully enLlLled Lo Lhe possesslon of Lhe goods (Sec 14 AcL no
2137) ln whlch case Lhe warehouseman shall be excused from llablllLy for refuslng
Lo dellver Lhe goods elLher Lo Lhe deposlLor or person clalmlng under hlm or Lo
Lhe adverse clalmanL unLll Lhe warehouseman has had a reasonable Llme Lo
ascerLaln Lhe valldlLy of Lhe adverse clalms or Lo brlng legal proceedlngs Lo compel
all clalmanLs Lo lnLerplead (Sec 18 AcL no 2137) and
(c) Where Lhe goods have already been lawfully sold Lo Lhlrd persons Lo saLlsfy a
warehousemans llen or have been lawfully sold or dlsposed of because of Lhelr
perlshable or hazardous naLure (Sec 36 AcL no 2137)
(4) 1haL Lhe warehouseman havlng a llen valld agalnsL Lhe person demandlng Lhe goods refuses Lo
dellver Lhe goods Lo hlm unLll Lhe llen ls saLlsfled (Sec 31 AcL no 2137)
(3) 1haL Lhe fallure was noL due Lo any faulL on Lhe parL of Lhe warehouseman as by showlng LhaL prlor
Lo demand for dellvery and refusal Lhe goods were sLolen or desLroyed by flre flood eLc wlLhouL any
negllgence on hls parL unless he has conLracLed so as Lo be llable ln such case or LhaL Lhe goods have
been Laken by Lhe mlsLake of a Lhlrd person wlLhouL Lhe knowledge or lmplled assenL of Lhe
warehouseman or some oLher [usLlflable ground for nondellvery (67 C! 332)
4S

8egreLLably Lhe facLual seLLlngs do noL sufflclenLly lndlcaLe wheLher Lhe demand Lo obLaln possesslon of Lhe goods complled
wlLh SecLlon 8 of Lhe law 1he presumpLlon neverLheless would be LhaL Lhe law was complled wlLh raLher Lhan breached by
peLlLloner upon Lhe oLher hand lL would appear LhaL Lhe refusal of prlvaLe respondenLs Lo dellver Lhe goods was noL anchored
on a valld excuse le nonsaLlsfacLlon of Lhe warehousemans llen over Lhe goods buL on an adverse clalm of ownershlp
rlvaLe respondenLs [usLlfled Lhelr refusal Lo dellver Lhe goods as sLaLed ln Lhelr Answer wlLh CounLerclalm and 1hlrdarLy
ComplalnL ln Clvll Case no 9033023 by clalmlng LhaL Lhey are sLlll Lhe legal owners of Lhe sub[ecL poeJoos and Lhe quanLlLy
of sugar represenLed Lhereln under Lhe clrcumsLances Lhls hardly quallfled as a valld legal excuse 1he loss of Lhe
warehousemans llen however does noL necessarlly mean Lhe exLlngulshmenL of Lhe obllgaLlon Lo pay Lhe warehouslng fees
and charges whlch conLlnues Lo be a petsoool llablllLy of Lhe owners le Lhe pledgors noL Lhe pledgee ln Lhls case 8uL even
as Lo Lhe ownerspledgors Lhe warehouseman fees and charges have ceased Lo accrue from Lhe daLe of Lhe re[ecLlon by
noahs Ark Lo heed Lhe lawful demand by peLlLloner for Lhe release of Lhe goods
1he flnallLy of our denlal ln C8 no 119231 of peLlLloners peLlLlon Lo nulllfy Lhe Lrlal courLs order of 01 March 1993 conflrms
Lhe warehousemans llen however such llen neverLheless should be conflned Lo Lhe fees and charges as of Lhe daLe ln March
1990 when noahs Ark refused Lo heed n8s demand for dellvery of Lhe sugar sLocks and ln no evenL beyond Lhe value of Lhe
credlL ln favor of Lhe pledgee (slnce lL ls baslc LhaL ln foreclosures Lhe buyer does noL assume Lhe obllgaLlons of Lhe pledgor Lo
hls oLher credlLors even whlle such buyer acqulres LlLle over Lhe goods less any exlsLlng preferred llen Lhereover)
4
1he
foreclosure of Lhe Lhlng pledged lL mlghL lncldenLally be menLloned resulLs ln Lhe full saLlsfacLlon of Lhe loan llablllLles Lo Lhe
pledgee of Lhe pledgors
47

kespooJeot IoJqe commltteJ Ctove Abose of lsctetloo
We hold LhaL Lhe Lrlal courL deprlved peLlLloner of due process ln renderlng Lhe challenged order of 13 Aprll 1996 wlLhouL
glvlng peLlLloner an opporLunlLy Lo presenL lLs evldence uurlng Lhe flnal hearlng of Lhe case prlvaLe respondenLs commenced
and concluded Lhelr presenLaLlon of evldence as Lo Lhe maLLer of Lhe exlsLence of and amounL owlng due Lo Lhelr
warehousemans llen 1helr exhlblLs were duly marked and offered and Lhe Lrlal courL LhereafLer ruled Lo wlL
CourL Crder
WlLh Lhe admlsslon of LxhlblLs 1 Lo 11 lncluslve of submarklngs as parL of Lhe
LesLlmony of 8enlgno 8auLlsLa Lhe defendanL prlvaLe respondenLs ls glven flve
(3) days from Loday Lo flle lLs memorandum Llkewlse plalnLlff peLlLloner ls glven
flve (3) days from recelpL of defendanLs prlvaLe respondenLs memorandum Lo
flle lLs commenL LhereLo 1hereafLer Lhe same shall be deemed submlLLed for
declslon
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48

nowhere ln Lhe LranscrlpL of sLenographlc noLes however does lL show LhaL peLlLloner was afforded an opporLunlLy Lo
commenL on much less ob[ecL Lo prlvaLe respondenLs offer of exhlblLs or even presenL lLs evldence on Lhe maLLer ln dlspuLe
n facL peLlLloner lmmedlaLely moved Lo nulllfy Lhe proceedlngs conducLed durlng LhaL hearlng buL lLs moLlon was lgnored and
never resolved by Lhe Lrlal courL Moreover lL cannoL be sald LhaL peLlLloners flllng of subsequenL pleadlngs where lL aLLached
lLs affldavlLs and documenLs Lo conLesL Lhe warehousemans llen was sufflclenL Lo fully saLlsfy Lhe requlremenLs of due
process 1he subsequenL pleadlngs were flled only Lo show LhaL peLlLloner had evldence Lo refuLe Lhe clalms of prlvaLe
respondenLs or LhaL Lhe laLLer were noL enLlLled LhereLo buL could noL have adequaLely subsLlLuLed for a fullblown
opporLunlLy Lo presenL lLs evldence glven Lhe exorblLanL amounLs lnvolved 1hls when coupled wlLh Lhe facL LhaL Lhe moLlon
Lo posLpone Lhe hearlng flled by peLlLloners counsel was noL unreasonable leads us Lo conclude LhaL peLlLloners rlghL Lo fully
presenL lLs case was rendered nugaLory L ls Lhus evldenL Lo us LhaL Lhere was undue and unwarranLed hasLe on Lhe parL of
respondenL courL Lo rule ln favor of prlvaLe respondenLs We do noL heslLaLe Lo say LhaL any LllL of Lhe scales of [usLlce no
maLLer how sllghL evokes susplclon and erodes a llLlganLs falLh and hope ln seeklng recourse before courLs of law
Llkewlse do we refuse Lo glve credence Lo prlvaLe respondenLs allegaLlon LhaL Lhe parLles agreed LhaL peLlLloners presenLaLlon
of evldence would be submlLLed on Lhe basls of affldavlLs
49
wlLhouL however speclfylng any order or wrlLLen agreemenL Lo
LhaL effecL
L ls lnLeresLlng Lo noLe LhaL among Lhe evldence peLlLloner wanLed Lo presenL were reporLs obLalned from noahs Ark
dlscloslng LhaL Lhe laLLer falled Lo malnLaln a sufflclenL lnvenLory Lo saLlsfy Lhe sugar sLock covered by Lhe sub[ecL poeJoos 1hls
was a serlous allegaLlon and on LhaL score alone Lhe Lrlal courL should have allowed a hearlng on Lhe maLLer especlally ln llghL
of Lhe magnlLude of Lhe clalms soughL f lL Lurns ouL Lo be Lrue LhaL Lhe sLock of sugar noahs Ark had ln possesslon was below
Lhe quanLlLles speclfled ln Lhe poeJoos Lhen peLlLloner should noL be made Lo pay for sLorage and preservaLlon expenses for
nonexlsLenL goods
L was llkewlse grave abuse of dlscreLlon on Lhe parL of respondenL courL Lo order lmmedlaLe execuLlon of Lhe 13 Aprll 1997
order We ruled earller LhaL sald order was ln Lhe naLure of a flnal order flxlng Lhe amounL of Lhe warehousemans charges and
fees and peLlLloners neL llablllLy afLer Lhe seLoff of Lhe money [udgmenL ln lLs favor ln C8 no 107243 SecLlon 1 of 8ule 39
of Lhe 8ules of CourL expllclLly provldes LhaL execuLlon shall lssue as a maLLer of rlghL on moLlon upon a [udgmenL or order
LhaL dlsposes of Lhe acLlon or proceedlng upon Lhe explraLlon of Lhe perlod Lo appeal Lherefrom lf no appeal has been duly
perfecLed LxecuLlon pendlng appeal ls however allowed ln SecLlon 2 Lhereof buL only on moLlon wlLh due noLlce Lo Lhe
adverse parLy more lmporLanLly only upon good reasons shown ln a speclal order Pere Lhere ls no showlng LhaL a moLlon
for execuLlon pendlng appeal was flled and LhaL a speclal order was lssued by respondenL courL verlly Lhe lmmedlaLe
execuLlon only served Lo furLher sLrengLhen our percepLlon of undue and unwarranLed hasLe on Lhe parL of respondenL courL
ln resolvlng Lhe lssue of Lhe warehousemans llen ln favor of prlvaLe respondenLs
n llghL of Lhe above we need noL rule anymore on Lhe fourLh formulaLed lssue
WPL8LlC8L Lhe peLlLlon ls C8An1Lu 1he challenged orders of 13 Aprll and 14 !uly 1997 lncludlng Lhe noLlces of levy and
garnlshmenL of Lhe 8eglonal 1rlal CourL of Manlla 8ranch 43 ln Clvll Case no 9033023 are 8LvL8SLu and SL1 ASuL and sald
courL ls u8LC1Lu Lo conducL furLher proceedlngs ln sald case
(1) Lo allow peLlLloner Lo presenL lLs evldence on Lhe maLLer of Lhe
warehousemans llen
(2) Lo compuLe Lhe peLlLloners warehousemans llen ln llghL of Lhe foregolng
observaLlons and
(3) Lo deLermlne wheLher for Lhe relevanL perlod noahs Ark malnLalned a
sufflclenL lnvenLory Lo cover Lhe volume of sugar speclfled ln Lhe poeJoos
CosLs agalnsL prlvaLe respondenLs
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8elloslllo vltoq looqoolboo ooJ Oolsombloq II coocot