[ G.R. No. 43306. May 26, 1938 ] 65 Phil. 552
[ G.R. No. 43306. May 26, 1938 ]
LEVY & BLUM, INC., PLAINTIFF AND APPELLEE, VS. JOSE A. DEL PRADO ET AL., DEFENDANTS. THE YEK TONG LIN FIRE & MARINE INSURANCE CO., LTD., APPELLANT. D E C I S I O N
LAUREL, J.:
In civil case No. 42696 entitled Levy & Blum, Inc., plaintiff, vs. Jose A. del Prado et al., defendants, Court of First Instance of Manila, the plaintiff on August 26, 1932 secured a writ of garnishment, notice of which was served by the sheriff of Manila upon the Yek Tong Lin Fire and Marine Insurance Co., Ltd., on whatever right or interest the defendant might have on “el importe de las polizas de seguro contra incendio sobre una finca de los demandados situada en la Calle F. B. Harrison, Pasay, Rizal, I. F.” to the extent of P3,800. On October 5, 1932, judgment was rendered in favor of the plaintiff, Levy & Blum, Inc., against the defendants for P3,000 with interest at the rate of 1% per month from November 10, 1932 until paid, plus the penal sum of P600 with interest thereon from August 26, 1932, until paid, and costs.
In civil case No. 5253, Jose A. del Prado (defendant in civil case No. 42696, Court of First Instance of Manila), instituted an action against the Yek Tong Lin Fire and Marine Insurance Co., Ltd. (garnishee in civil case No. 42696 of the Court of First Instance of Manila), for the recovery of the face value of the insurance policy covering house No. 469 F. B. Harrison which was destroyed by fire on August 17, 1932. The record does not show when the action was brought, although it appears that judgment was rendered in favor of the plaintiff therein on February 16, 1933. The defendant appears to have appealed from the decision of the lower court but the Supreme Court in a decision promulgated on March 14, 1934[1], affirmed the decision of the lower court, and with respect to the fact of previous garnishment observed: “The determination of who the money should be paid to can safely be left to the trial court.” A writ of execution was issued; in compliance therewith, the aforesaid insurance company, sent the following communication of April 9, 1934 (Exh. E-10 [a]), to the clerk of the Court of First Instance of Rizal, Severo Abellera:
“April 9th, 1934.
“The Clerk of Court Court of First Instance Pasig, Rizal
“Sir:
“Re: Case No. 5253 entitled ‘Jose del Prado vs. The Yek Tong Lin Fire & Marine Insurance Co., Ltd.’
“We take pleasure in sending you herewith the check of The Yek Tong Lin Fire & Marine Insurance Co., Ltd., defendant in the case above referred to, for deposit.
“This is being done in accordance with the decision handed down by the Supreme Court in this case, promulgated on March 14, 1934 particularly to the second page thereof, where the following reads:
" ‘The determination of who the money should be paid to can safely be left to the trial court.’
“Very truly yours,
“DURAN, LlM & TUASON “By: (Sgd.) MANUEL LIM ‘Attorneys for the Yek Tong Lin, etc.”
Notice of delivery of the check was made by the insurance company to the garnishing creditor, Levy & Blum, Inc. (Exh. E-8) whose counsel at once protested and requested the former to suspend the payment of the check (Exhibit E-9). The insurance company complied with the request for suspension of payment of the check (Exhibit 10), and the amount was not collected. Jose A. del Prado, however, filed an ex parte motion praying that the Yek Tong Lin Fire & Marine Insurance Co., Ltd., be adjudged in contempt for having suspended the payment of the check. Meanwhile, Levy & Blum, Inc., filed a motion in civil case No. 6253, praying that the sum deposited with the clerk of court be delivered to it by virtue of previous garnishment. On April 14, 1934, the court resolved the ex parte motion of Jose A. del Prado and ordered the Yek Tong Lin Fire & Marine Insurance Co., Ltd., to convert the deposit into cash under penalty for contempt. With this order, the insurance company complied. On April 21, 1934, the court then entered an order denying the motion of Levy & Blum, Inc., in civil case No. 5253 on the technical ground that the petitioner was not a party to the suit, and ordering the clerk of court, Severo Abellera, to deliver the cash amount deposited with him to Jose A. del Prado. Two hours after this order was signed by the judge of the Court of First Instance of RizaJ, the amount of P3,236.95 was delivered to Jose A. del Prado by the clerk of court without notifying either the Yek Tong Lin Fire and Marine Insurance Co., Ltd., or Levy & Blum, Inc.
Having thus failed to secure the amount in civil case No. 5253, Levy & Blum, Inc., the garnishing creditor, brought the instant suit before the Court of First Instance of Manila against Jose A. del Prado, the Yek Tong Lin Fire and Marine Insurance Co., Ltd., and Severo Abellera, clerk of the Court of First Instance of Rizal, alleging, among other things, that the Yek Tong Lin Fire and Marine Insurance Co., Ltd., was negligent in delivering the money in its possession to the clerk of the Court of First Instance of Rizal, in spite of the garnishment, and that as a result it suffered damages In the sum of P3,236.95. The Yek Tong Lin Fire and Marine Insurance Co., Ltd., filed its answer and also a cross complaint against its co-defendant, Severo Abellera, clerk of the Court of First Instance of Rizal, imputing negligence to the latter for the alleged premature delivery of the money in his possession. After hearing and presentation of evidence, the trial court disallowed the cross complaint and entered judgment in favor of the plaintiff Levy & Blum, Inc., and condemning defendant-appellant alone to pay the amount prayed for in the complaint. The motion for reconsideration and new trial was denied by the lower court; exception was taken in due course, and the defendant now appeals by bill of exceptions. He submits an elaborate assignment of errors.
We agree with the trial court that various errors assigned may be reduced to one single proposition, namely, whether or not the garnishee, the Yek Tong Lin Fire and Marine Insurance Co., Ltd., was discharged from all responsibility for having delivered the amount of P3,236.95 to the clerk of Court of First Instance of Rizal under the circumstances related above.
In the case of National Bank vs. Olutanga Lumber Company (54 Phil., 346, 353), we held that “where attached properties belonging to the principal debtor are taken out of the hands of a person by legal process, after he had been notified of the order of attachment, said person cannot be made to answer for the properties in a proceeding to carry out said attachment” (citing 28 C. J., par. 362, p. 264). Although in that case the amount which was the object of garnishment was turned over by the garnishee Bank of the Philippines to the Court of First Instance of Manila that had issued the writ of garnishment whereas in the present case the deposit was made with the clerk of the Court of First Instance of Rizal where the credit garnished was the subject-matter of a litigation, there is, in our opinion, no difference in principle for the reason that in both cases the payment or deposit was made by the garnishee in virtue of a legal process. More than this, in the present case the delivery of the money to Jose A. del Prado was precipitated by a threat of punishment for contempt by the Court of First Instance of Rizal if the check was not forwith converted into cash and delivered by the garnishee to the clerk of court who, in turn, delivered it to Jose A. del Prado by order of the court. The garnishee preferred to abide by the order of the court and it cannot be blamed for that behavior. The doctrine of involuntary novation by the substitution of one creditor for another by the process of garnishment (Tayabas Land Co. vs. Sharruf, 41 Phil., 382) and the enumeration in section 432 of the Code of Civil Procedure of the grounds for discharge of the garnishee from liability do not preclude the application of the general principle enunciated and applied by this court in the case of National Bank vs. Olutanga Lumber Company, supra. It were better that procedural laws are not applied regardless of consequences but construed liberally in order to promote justice and avoid injustice. Upon the facts and under the circumstances of the case, the injustice of requiring the appellant insurance company to pay to the plaintiff-appellee here the amount of P3,236.95 after having satisfied that same amount by order of the Court of First Instance of Rizal in civil case No. 5253 is to us apparent. No collusion or fraud is charged or made out against the garnishee. We are of the opinion, and so hold, that if a judgment is rendered against a garnishee by a court of competent jurisdiction and he is compelled to satisfy the same by execution and incidentally by threat of being punished for contempt, payment by compulsion, under the circumstances, is a valid defense to an action by the creditor or plaintiff-garnisher for the property or debt in respect of which he was charged as garnishee. In such a case, he acts by compulsion of judicial process and is relieved from further responsibility. The rule is founded on equitable considerations although some authorities proceed on the theory that the garnishee should not be placed in any worse position by the garnishment than he occupied as debtor of the principal defendant, nor subjected to any greater liability because of the garnishment.
The discharge, however, of the garnishee in this case does not relieve the defendant-appellee, Jose A. del Prado, from liability to Levy & Blum, Inc., to the extent of the garnishment and the amount received by him from the garnishee. Having improperly succeeded in defeating the garnishment however attributable to an improvident exercise of judicial discretion, Del Prado should be held accountable for that amount to the garnishing creditor, Levy & Blum, Inc.
In view of this result, we do not find it necessary to pass upon the other errors assigned by the appellant.
The decision of the lower court is reversed in so far as it adjudges the appellant liable to the appellee in the amount of P3,236.95 and judgment is hereby rendered against the defendant Jose A. del Prado condemning him to pay to the plaintiff-appellee, Levy & Blum, Inc., the sum of P3,236.95, with costs in both instances against the said defendant Jose A. del Prado. So ordered.
Villa-Real, Abad Santos, Imperial, and Diaz, JJ., concur.