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Continental Watchman and Security Agency, Inc. v. National Food Authority [G.R. No. 171015. August 25, 2010]

03 Oct

CONTINENTAL WATCHMAN AND SECURITY AGENCY, INC.petitioner,
vs.
NATIONAL FOOD AUTHORITY, respondent.

[G.R. No. 171015. August 25, 2010]

FACTS:

The case began when NFA wrote Continental that it no longer enjoyed its trust and confidence and that Continental had to “pull out [its] guard[s] from NFA offices, installation and warehouses to allow the incoming security agency to take over the security services for NFA[.]” Continental questioned NFA’s decision to terminate its contract in a complaint against the NFA and NFA Administrator [David] for damages and injunction with prayer for the issuance of a temporary restraining order, which obtained favorable action from the trial court. Continental moved for the issuance of a writ of execution which was later on, amended to the amount of P8,445,161.00. The writ of execution was issued by Judge Velasco. While still hearing, NFA’s deposit with the Philippine National Bank, was garnished. In view of the garnishment, NFA Administrator David (later joined by the NFA) sought relief from Supreme Court by filing a special civil action for certiorari and cited the jurisdictional errors and obtained a favorable ruling. Based on said decision, NFA filed a motion before the RTC for the return of the garnished amount with legal interest and damages.  The RTC granted this motion and directed Continental to return the P8,445,161.00 to the NFA. Continental moved for partial reconsideration but the RTC denied the motion. It was elevated to the Court of Appeals but was again denied.

ISSUES:

Civil Law

(1)  Whether or not petitioner has the right to set-off the security service fee for the guard who served during the injunction was validly in effect.

(2)  Whether or not the court a quo acted properly when it did hold in abeyance the issuance of a writ of execution on the return of illegally garnished amount.

RULINGS:

Civil Law

(1)  No. After SC’s final and executory Decision declaring null and void the writ of execution [that Judge Velasco] issued, it should appear clear to all – especially to Continental – that it has no legal basis to hold on to the P8,445,161.00 that resulted from the void writ of execution and the equally defective garnishment that followed.  Hence, Continental is under the absolute obligation to return the garnished amount.  Whether it is entitled to recover from the services it rendered to the NFA is a matter still to be litigated before the RTC.  Accordingly, the Court upholds the presently assailed CA ruling that sustained the RTC’s order granting the issuance of a writ of execution for the return of the P8,445,161.00 to the NFA. The salaries of security guards that Continental wants to set-off are actually the subject of Continental’s supplemental complaint which is actually a counterclaim that it asserted to defeat the return of the P8,445,161.00 that it had been unjustly holding for years. It cannot be countenanced.

(2)  Yes. The trial court committed no grave abuse of discretion in ordering the return of the amount garnished from the deposits of the NFA with the Philippine National Bank. The garnishment stemmed from an order of execution that has been adjudged by the Supreme Court as patently erroneous and without any legal basis. Hence, no error in the trial court’s action to undo the effects of its prior erroneous and legally infirm order.

 
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Posted by on October 3, 2013 in Case Digests, Civil Law, Remedial Law

 

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