FIRST DIVISION

[G.R. No. 129918. July 9, 1998]

PHILIPPINE NATIONAL BANK, petitioner, vs. HON. MARCELINO L.

SAYO, JR., in his capacity as Presiding Judge of the Regional
Trial Court of Manila (Branch 45), NOAHS ARK SUGAR
REFINERY, ALBERTO T. LOOYUKO, JIMMY T. GO and WILSON
T. GO, respondents.

DECISION
DAVIDE, JR., J.:

In this special civil action for certiorari, actually the third dispute between the same
private parties to have reached this Court, [1] petitioner asks us to annul the orders [2] of 15
April 1997 and 14 July 1997 issued in Civil Case No. 90-53023 by the Regional Trial
Court, Manila, Branch 45. The first order [3] granted private respondents motion for
execution to satisfy their warehousemans lien against petitioner, while the second
order[4] denied, with finality, petitioners motion for reconsideration of the first order and
urgent motion to lift garnishment, and private respondents motion for partial
reconsideration.
The factual antecedents until the commencement of G.R. No. 119231 were
summarized in our decision therein, as follows:

In accordance with Act No. 2137, the Warehouse Receipts Law, Noahs Ark
Sugar Refinery issued on several dates, the following Warehouse Receipts
(Quedans): (a) March 1, 1989, Receipt No. 18062, covering sugar deposited
by Rosa Sy; (b) March 7, 1989, Receipt No. 18080, covering sugar deposited
by RNS Merchandising (Rosa Ng Sy); (c) March 21, 1989, Receipt No. 18081,
covering sugar deposited by St. Therese Merchandising; (d) March 31, 1989,
Receipt No. 18086, covering sugar deposited by St. Therese Merchandising;
and (e) April 1, 1989, Receipt No. 18087, covering sugar deposited by RNS
Merchandising. The receipts are substantially in the form, and contains the
terms, prescribed for negotiable warehouse receipts by Section 2 of the law.

Subsequently, Warehouse Receipts Nos. 18080 and 18081 were negotiated

and endorsed to Luis T. Ramos, and Receipts Nos. 18086, 18087 and 18062
were negotiated and endorsed to Cresencia K. Zoleta. Ramos and Zoleta then
used the quedans as security for two loan agreements one for P15.6 million
and the other for P23.5 million obtained by them from the Philippine National
Bank. The aforementioned quedans were endorsed by them to the Philippine
National Bank.

Luis T. Ramos and Cresencia K. Zoleta failed to pay their loans upon maturity
on January 9, 1990. Consequently, on March 16, 1990, the Philippine National
Bank wrote to Noahs Ark Sugar Refinery demanding delivery of the sugar
stocks covered by the quedans endorsed to it by Zoleta and Ramos. Noahs
Ark Sugar Refinery refused to comply with the demand alleging ownership
thereof, for which reason the Philippine National Bank filed with the Regional
Trial Court of Manila a verified complaint for Specific Performance with
Damages and Application for Writ of Attachment against Noahs Ark Sugar
Refinery, Alberto T. Looyuko, Jimmy T. Go and Wilson T. Go, the last three
being identified as the sole proprietor, managing partner, and Executive Vice
President of Noahs Ark, respectively.

Respondent Judge Benito C. Se, Jr., [to] whose sala the case was raffled,
denied the Application for Preliminary Attachment. Reconsideration therefor
was likewise denied.

Noahs Ark and its co-defendants filed an Answer with Counterclaim and
Third-Party Complaint in which they claimed that they [were] the owners of the
subject quedans and the sugar represented therein, averring as they did that:

9. *** In an agreement dated April 1, 1989, defendants agreed to sell to Rosa

Ng Sy of RNS Merchandising and Teresita Ng of St. Therese Merchandising
the total volume of sugar indicated in the quedans stored at Noahs Ark Sugar
Refinery for a total consideration of P63,000,000.00, *** The corresponding
payments in the form of checks issued by the vendees in favor of defendants
were subsequently dishonored by the drawee banks by reason of payment
stopped and drawn against insufficient funds, *** Upon proper notification to
said vendees and plaintiff in due course, defendants refused to deliver to
vendees therein the quantity of sugar covered by the subject quedans.

10. *** Considering that the vendees and first endorsers of subject quedans
did not acquire ownership thereof, the subsequent endorsers and plaintiff itself
did not acquire a better right of ownership than the original vendees/first
endorsers.

The Answer incorporated a Third-Party Complaint by Alberto T. Looyuko,

Jimmy T. Go and Wilson T. Go, doing business under the trade name and
style Noahs Ark Sugar Refinery against Rosa Ng Sy and Teresita Ng, praying
that the latter be ordered to deliver or return to them the quedans (previously
endorsed to PNB and the subject of the suit) and pay damages and litigation
expenses.

The Answer of Rosa Ng Sy and Teresita Ng, dated September 6, 1990, one of
avoidance, is essentially to the effect that the transaction between them, on
the one hand, and Jimmy T. Go, on the other, concerning the quedans and
the sugar stocks covered by them was merely a simulated one being part of
the latters complex banking schemes and financial maneuvers, and thus, they
are not answerable in damages to him.

On January 31, 1991, the Philippine National Bank filed a Motion for Summary
Judgment in favor of the plaintiff as against the defendants for the reliefs
prayed for in the complaint.

On May 2, 1991, the Regional Trial Court issued an order denying the Motion
for Summary Judgment. Thereupon, the Philippine National Bank filed a
Petition for Certiorari with the Court of Appeals, docketed as CA-G.R. SP No.
25938 on December 13, 1991.

Pertinent portions of the decision of the Court of Appeals read:

In issuing the questioned Orders, the respondent Court ruled that questions of
law should be resolved after and not before, the questions of fact are properly
litigated. A scrutiny of defendants affirmative defenses does not show material
questions of fact as to the alleged nonpayment of purchase price by the
vendees/first endorsers, and which nonpayment is not disputed by PNB as it
does not materially affect PNBs title to the sugar stocks as holder of the
negotiable quedans.

What is determinative of the propriety of summary judgment is not the

existence of conflicting claims from prior parties but whether from an
examination of the pleadings, depositions, admissions and documents on file,
the defenses as to the main issue do not tender material questions of fact
(see Garcia vs. Court of Appeals, 167 SCRA 815) or the issues thus tendered
are in fact sham, fictitious, contrived, set up in bad faith or so unsubstantial as
not to constitute genuine issues for trial. (See Vergara vs. Suelto, et al., 156
SCRA 753; Mercado, et al. vs. Court of Appeals, 162 SCRA 75). [sic] The
questioned Orders themselves do not specify what material facts are in issue.
(See Sec. 4, Rule 34, Rules of Court).
To require a trial notwithstanding pertinent allegations of the pleadings and
other facts appearing on the record, would constitute a waste of time and an
injustice to the PNB whose rights to relief to which it is plainly entitled would
be further delayed to its prejudice.

In issuing the questioned Orders, We find the respondent Court to have acted
in grave abuse of discretion which justify holding null and void and setting
aside the Orders dated May 2 and July 4, 1990 of respondent Court, and that
a summary judgment be rendered forthwith in favor of the PNB against Noahs
Ark Sugar Refinery, et al., as prayed for in petitioners Motion for Summary
Judgment.

On December 13, 1991, the Court of Appeals nullified and set aside the
orders of May 2 and July 4, 1990 of the Regional Trial Court and ordered the
trial court to render summary judgment in favor of the PNB. On June 18, 1992,
the trial court rendered judgment dismissing plaintiffs complaint against
private respondents for lack of cause of action and likewise dismissed private
respondents counterclaim against PNB and of the Third-Party Complaint and
the Third-Party Defendants Counterclaim. On September 4, 1992, the trial
court denied PNBs Motion for Reconsideration.

On June 9, 1992, the PNB filed an appeal from the RTC decision with the
Supreme Court, G.R. No. 107243, by way of a Petition for Review
on Certiorari under Rule 45 of the Rules of Court. This Court rendered
judgment on September 1, 1993, the dispositive portion of which reads:

WHEREFORE, the trial judges decision in Civil Case No. 90-53023, dated
June 18, 1992, is reversed and set aside and a new one rendered
conformably with the final and executory decision of the Court of Appeals in
CA-G.R. SP No. 25938, ordering the private respondents Noahs Ark Sugar
Refinery, Alberto T. Looyuko, Jimmy T. Go and Wilson T. Go, jointly and
severally:

(a) to deliver to the petitioner Philippine National Bank, the sugar stocks
covered by the Warehouse Receipts/Quedans which are now in the latters
possession as holder for value and in due course; or alternatively, to pay
(said) plaintiff actual damages in the amount of P39.1 million, with legal
interest thereon from the filing of the complaint until full payment; and

(b) to pay plaintiff Philippine National Bank attorneys fees, litigation expenses
and judicial costs hereby fixed at the amount of One Hundred Fifty Thousand
Pesos (P150,000.00) as well as the costs.
SO ORDERED.

On September 29, 1993, private respondents moved for reconsideration of

this decision. A Supplemental/Second Motion for Reconsideration with leave
of court was filed by private respondents on November 8, 1993. We denied
private respondents motion on January 10, 1994.

Private respondents filed a Motion Seeking Clarification of the Decision, dated

September 1, 1993. We denied this motion in this manner:

It bears stressing that the relief granted in this Courts decision of September
1, 1993 is precisely that set out in the final and executory decision of the Court
of Appeals in CA-G.R. SP No. 25938, dated December 13, 1991, which was
affirmed in toto by this Court and which became unalterable upon becoming
final and executory.

Private respondents thereupon filed before the trial court an Omnibus Motion
seeking among others the deferment of the proceedings until private
respondents [were] heard on their claim for warehousemans lien. On the other
hand, on August 22, 1994, the Philippine National Bank filed a Motion for the
Issuance of a Writ of Execution and an Opposition to the Omnibus Motion filed
by private respondents.

The trial court granted private respondents Omnibus Motion on December 20,
1994 and set reception of evidence on their claim for warehousemans
lien. The resolution of the PNBs Motion for Execution was ordered deferred
until the determination of private respondents claim.

On February 21, 1995, private respondents claim for lien was heard and
evidence was received in support thereof. The trial court thereafter gave both
parties five (5) days to file respective memoranda.

On February 28, 1995, the Philippine National Bank filed a Manifestation with
Urgent Motion to Nullify Court Proceedings. In adjudication thereof, the trial
court issued the following order on March 1, 1995:

WHEREFORE, this court hereby finds that there exists in favor of the defendants a valid
warehousemans lien under Section 27 of Republic Act 2137 and accordingly, execution
of the judgment is hereby ordered stayed and/or precluded until the full amount of
defendants lien on the sugar stocks covered by the five (5) quedans subject of this
action shall have been satisfied conformably with the provisions of Section 31 of
Republic Act 2137.[5]
 Unsatisfied with the trial courts order of 1 March 1995, herein petitioner filed with us
G.R. No. 119231, contending:
I
PNBS RIGHT TO A WRIT OF EXECUTION IS SUPPORTED BY TWO FINAL AND
EXECUTORY DECISIONS: THE DECEMBER 13, 1991 COURT OF APPEALS [sic]
DECISION IN CA-G.R. SP NO. 25938; AND, THE NOVEMBER 9, 1992 SUPREME
COURT DECISION IN G.R. NO. 107243. RESPONDENT RTCS MINISTERIAL
AND MANDATORY DUTY IS TO ISSUE THE WRIT OF EXECUTION TO
IMPLEMENT THE DECRETAL PORTION OF SAID SUPREME COURT DECISION.
II
RESPONDENT RTC IS WITHOUT JURISDICTION TO HEAR PRIVATE
RESPONDENTS OMNIBUS MOTION. THE CLAIMS SET FORTH IN SAID
MOTION: (1) WERE ALREADY REJECTED BY THE SUPREME COURT IN ITS
MARCH 9, 1994 RESOLUTION DENYING PRIVATE RESPONDENTS MOTION
FOR CLARIFICATION OF DECISION IN G.R. NO. 107243; AND (2) ARE BARRED
FOREVER BY PRIVATE RESPONDENTS FAILURE TO INTERPOSE THEM IN
THEIR ANSWER, AND FAILURE TO APPEAL FROM THE JUNE 18, 1992
DECISION IN CIVIL CASE NO. 90-52023.
III
RESPONDENT RTCS ONLY JURISDICTION IS TO ISSUE THE WRIT TO
EXECUTE THE SUPREME COURT DECISION. THUS, PNB IS ENTITLED TO: (1)
A WRIT OF CERTIORARI TO ANNUL THE RTC RESOLUTION DATED
DECEMBER 20, 1994 AND THE ORDER DATED FEBRUARY 7, 1995 AND ALL
PROCEEDINGS TAKEN BY THE RTC THEREAFTER; (2) A WRIT OF
PROHIBITION TO PREVENT RESPONDENT RTC FROM FURTHER
PROCEEDING WITH CIVIL CASE NO. 90-53023 AND COMMITTING OTHER
ACTS VIOLATIVE OF THE SUPREME COURT DECISION IN G.R. NO. 107243;
AND (3) A WRIT OF MANDAMUS TO COMPEL RESPONDENT RTC TO ISSUE
THE WRIT TO EXECUTE THE SUPREME COURT JUDGMENT IN FAVOR OF
PNB.
In our decision of 18 April 1996 in G.R. No. 119231, we held against herein
petitioner as to these issues and concluded:

In view of the foregoing, the rule may be simplified thus: While the PNB is
entitled to the stocks of sugar as the endorsee of the quedans, delivery to it
shall be effected only upon payment of the storage fees.

Imperative is the right of the warehouseman to demand payment of his lien at

this juncture, because, in accordance with Section 29 of the Warehouse
Receipts Law, the warehouseman loses his lien upon goods by surrendering
possession thereof. In other words, the lien may be lost where the
warehouseman surrenders the possession of the goods without requiring
payment of his lien, because a warehousemans lien is possessory in nature.
We, therefore, uphold and sustain the validity of the assailed orders of public
respondent, dated December 20, 1994 and March 1, 1995.

In fine, we fail to see any taint of abuse of discretion on the part of the public
respondent in issuing the questioned orders which recognized the legitimate
right of Noahs Ark, after being declared as warehouseman, to recover storage
fees before it would release to the PNB sugar stocks covered by the five (5)
Warehouse Receipts. Our resolution, dated March 9, 1994, did not preclude
private respondents unqualified right to establish its claim to recover storage
fees which is recognized under Republic Act No. 2137. Neither did the Court
of Appeals decision, dated December 13, 1991, restrict such right.

Our Resolutions reference to the decision by the Court of Appeals, dated December 13,
1991, in CA-G.R. SP No. 25938, was intended to guide the parties in the subsequent
disposition of the case to its final end. We certainly did not foreclose private
respondents inherent right as warehouseman to collect storage fees and preservation
expenses as stipulated on the face of each of the Warehouse Receipts and as provided
for in the Warehouse Receipts Law (R.A. 2137).[6]

Petitioners motion to reconsider the decision in G.R. No. 119231 was denied.
After the decision in G.R. No. 119231 became final and executory, various incidents
took place before the trial court in Civil Case No. 90-53023. The petition in this case
summarizes these as follows:

3.24 Pursuant to the abovementioned Supreme Court Decision, private

respondents filed a Motion for Execution of Defendants Lien as
Warehouseman dated 27 November 1996. A photocopy of said Motion for
Execution is attached hereto as Annex I.

3.25 PNB opposed said Motion on the following grounds:

(a) The lien claimed by Noahs Ark in the unbelievable amount

of P734,341,595.06 is illusory; and

(b) There is no legal basis for execution of defendants lien as

warehouseman unless and until PNB compels the delivery
of the sugar stocks.

3.26 In their Reply to Opposition dated 18 January 1997, private respondents

pointed out that a lien existed in their favor, as held by the Supreme Court. In
its Rejoinder dated 7 February 1997, PNB countered private respondents
argument, pointing out that the dispositive portion of the court a quos Order
dated 1 March 1995 failed to state the amount for which execution may be
granted and, thus, the same could not be the subject of execution; and (b)
private respondents should instead file a separate action to prove the amount
of its claim as warehouseman.

3.27 The court a quo, this time presided by herein public respondent, Hon.
Marcelino L. Sayo Jr., granted private respondents Motion for Execution. In its
questioned Order dated 15 April 1997 (Annex A), the court a quo ruled in this
wise:

Accordingly, the computation of accrued storage fees and preservation

charges presented in evidence by the defendants, in the amount
of P734,341,595.06 as of January 31, 1995 for the 86,356.41 50 kg. bags of
sugar, being in order and with sufficient basis, the same should be
granted. This Court consequently rejects PNBs claim of no sugar no lien,
since it is undisputed that the amount of the accrued storage fees is
substantially in excess of the alternative award of P39.1 Million in favor of
PNB, including legal interest and P150,000.00 in attorneys fees, which PNB is
however entitled to be credited x x x.

x x x x x x x x x

WHEREFORE, premises considered and finding merit in the defendants

motion for execution of their claim for lien as warehouseman, the same is
hereby GRANTED. Accordingly, let a writ of execution issue for the amount
of P662,548,611.50, in accordance with the above disposition.

SO ORDERED. (Emphasis supplied.)

3.28 On 23 April 1997, PNB was immediately served with a Writ of Execution
for the amount of P662,548,611.50 in spite of the fact that it had not yet been
served with the Order of the court a quo dated 15 April 1997. PNB thus filed
an Urgent Motion dated 23 April 1997 seeking the deferment of the
enforcement of the Writ of Execution. A photocopy of the Writ of Execution is
attached hereto as Annex J.

3.29 Nevertheless, the Sheriff levied on execution several properties of

PNB. Firstly, a Notice of Levy dated 24 April 1997 on a parcel of land with an
area of Ninety-Nine Thousand Nine Hundred Ninety-Nine (99,999) square
meters, covered by Transfer Certificate of Title No. 23205 in the name of
PNB, was served upon the Register of Deeds of Pasay City. Secondly, a
Notice of Garnishment dated 23 April 1997 on fund deposits of PNB was
served upon the Bangko Sentral ng Pilipinas. Photocopies of the Notice of
Levy and the Notice of Garnishment are attached hereto as Annexes K and L,
respectively.

3.30 On 28 April 1997, petitioner filed a Motion for Reconsideration with

Urgent Prayer for Quashal of Writ of Execution dated 15 April 1997.
Petitioners Motion was based on the following grounds:

(1) Noahs Ark is not entitled to a warehousemans lien in the

humongous amount of P734,341,595.06 because the same has
been waived for not having been raised earlier as either
counterclaim or defense against PNB;

(2) Assuming said lien has not been waived, the same, not being
registered, is already barred by prescription and/or laches;

(3) Assuming further that said lien has not been waived nor barred, still
there was no complaint ever filed in court to effectively commence
this entirely new cause of action;

(4) There is no evidence on record which would support and sustain

the claim of P734,341,595.06 which is excessive, oppressive and
unconscionable;

(5) Said claim if executed would constitute unjust enrichment to the

serious prejudice of PNB and indirectly the Philippine Government,
who innocently acquired the sugar quedans through assignment of
credit;

(6) In all respects, the decisions of both the Supreme Court and of the
former Presiding Judge of the trial court do not contain a specific
determination and/or computation of warehousemans lien, thus
requiring first and foremost a fair hearing of PNBs evidence, to
include the true and standard industry rates on sugar storage fees,
which if computed at such standard rate of thirty centavos per
kilogram per month, shall result in the sum of about Three
Hundred Thousand Pesos only.

3.31 In its Motion for Reconsideration, petitioner prayed for the following
reliefs:

1. PNB be allowed in the meantime to exercise its basic right to present

evidence in order to prove the above allegations especially the true and
reasonable storage fees which may be deducted from PNBs judgment award
of P39.1 Million, which storage fees if computed correctly in accordance with
standard sugar industry rates, would amount to only P300 Thousand Pesos,
without however waiving or abandoning its (PNBs) legal positions/contentions
herein abovementioned.

2. The Order dated April 15, 1997 granting the Motion for Execution by
defendant Noahs Ark be set aside.

3. The execution proceedings already commenced by said sheriffs be nullified

at whatever stage of accomplishment.

A photocopy of petitioners Motion for Reconsideration with Urgent Prayer for

Quashal of Writ of Execution is attached hereto and made integral part hereof
as Annex M.

3.32 Private respondents filed an Opposition with Motion for Partial

Reconsideration dated 8 May 1997. Still discontented with the excessive and
staggering amount awarded to them by the court a quo, private respondents
Motion for Partial Reconsideration sought additional and continuing storage
fees over and above what the court a quo had already unjustly awarded. A
photocopy of private respondents Opposition with Motion for Partial
Reconsideration dated 8 May 1997 is attached hereto as Annex N.

3.32.1 Private respondents prayed for the further amount of P227,375,472.00

in storage fees from 1 February 1995 until 15 April 1997, the date of the
questioned Order granting their Motion for Execution.

3.32.2 In the same manner, private respondents prayed for a continuing

amount of P345,424.00 as daily storage fees after 15 April 1997 until the total
amount of the storage fees is satisfied.

3.33 On 19 May 1997, PNB filed its Reply with Opposition (To Defendants
Opposition with Partial Motion for Reconsideration), containing therein the
following motions: (i) Supplemental Motion for Reconsideration; (ii) Motion to
Strike out the Testimony of Noahs Arks Accountant Last February 21, 1995;
and (iii) Motion for the Issuance of a Writ of Execution in favor of PNB.In
support of its pleading, petitioner raised the following:

(1) Private respondents failed to pay the appropriate docket fees either

for its principal claim or for its additional claim, as said claims for
 warehousemans lien were not at all mentioned in their answer to
petitioners Complaint;

(2) The amount awarded by the court a quo was grossly and manifestly

unreasonable, excessive, and oppressive;

(3) It is the dispositive portion of the decision which shall be controlling

in any execution proceeding. If no specific award is stated in the
dispositive portion, a writ of execution supplying an amount not
included in the dispositive portion of the decision being executed is
null and void;

(4) Private respondents failed to prove the existence of the sugar

stocks in Noahs Arks warehouses. Thus, private respondents
claims are mere paper liens which cannot be the subject of
execution;

(5) The attendant circumstances, particularly Judge Ses Order of 1

March 1995 onwards, were tainted with fraud and absence of due
process, as PNB was not given a fair opportunity to present its
evidence on the matter of the warehousemans lien. Thus, all
orders prescinding thereform, including the questioned Order
dated 15 April 1997, must perforce be set aside and the execution
proceedings against PNB be permanently stayed.

3.34 On 6 May 1997, petitioner also filed an Urgent Motion to Lift Garnishment
of PNB Funds with Bangko Sentral ng Pilipinas.

3.35 On 14 July 1997, respondent Judge issued the second Order (Annex B),
the questioned part of the dispositive portion of which states:

WHEREFORE, premises considered, the plaintiff Philippine National Banks

subject Motion for Reconsideration With Urgent Prayer for Quashal of Writ of
Execution dated April 28, 1997 and undated Urgent Motion to Lift
Garnishment of PNB Funds With Bangko Sentral ng Pilipinas filed on May 6,
1997, together with all its related Motions are all DENIED with finality for lack
of merit.

x x x x x x x x x
The Order of this Court dated April 15, 1997, the final Writ of Execution
likewise dated April 15, 1997 and the corresponding Garnishment all stand
firm.

SO ORDERED.[7]

Aggrieved thereby, petitioners filed this petition, alleging as grounds therefor, the
following:
A. THE COURT A QUO ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION
OR WITH GRAVE ABUSE OF DISCRETION WHEN IT ISSUED A WRIT OF
EXECUTION IN FAVOR OF DEFENDANTS FOR THE AMOUNT OF P734,341,595.06.

4.1 The court a quo had no authority to issue a writ of execution in favor of

private respondents as there was no final and executory judgment ripe for
execution.

4.2 Public respondent judge patently exceeded the scope of his authority

in making a determination of the amount of storage fees due private
respondents in a mere interlocutory order resolving private respondents
Motion for Execution.

4.3 The manner in which the court a quo awarded storage fees in favor of
private respondents and ordered the execution of said award was arbitrary
and capricious, depriving petitioner of its inherent substantive and
procedural rights.

B. EVEN ASSUMING ARGUENDO THAT THE COURT A QUO HAD AUTHORITY TO

GRANT PRIVATE RESPONDENTS MOTION FOR EXECUTION, THE COURT A
QUO ACTED WITH GRAVE ABUSE OF DISCRETION IN AWARDING THE HIGHLY
UNREASONABLE, UNCONSCIONABLE, AND EXCESSIVE AMOUNT
OF P734,341,595.06 IN FAVOR OF PRIVATE RESPONDENTS.

4.4 There is no basis for the court a quos award of P734,341,595.06

representing private respondents alleged warehousemans lien.

4.5 PNB has sufficient evidence to show that the astronomical amount

claimed by private respondents is very much in excess of the industry rate
for storage fees and preservation expenses.

C. PUBLIC RESPONDENT JUDGES GRAVE ABUSE OF DISCRETION BECOMES

MORE PATENT AFTER A CLOSE PERUSAL OF THE QUESTIONED ORDER
DATED 14 JULY 1997.
 4.6 The court a quo resolved a significant and consequential matter
entirely relying on documents submitted by private respondents totally
disregarding clearly contrary evidence submitted by PNB.

4.7 The court a quo misquoted and misinterpreted the Supreme Court

Decision dated 18 April 1997.

D. THE COURT A QUO ACTED WITH GRAVE ABUSE OF DISCRETION IN NOT

HOLDING THAT PRIVATE RESPONDENTS HAVE LONG WAIVED THEIR RIGHT
TO CLAIM ANY WAREHOUSEMANS LIEN.

4.8 Private respondents raised the matter of their entitlement to a

warehousemans lien for storage fees and preservation expenses for the
first time only during the execution proceedings of the Decision in favor of
PNB.

4.9 Private respondents claim for warehousemans lien is in the nature of a

compulsory counterclaim which should have been included in private
respondents answer to the Complaint.Private respondents failed to
include said claim in their answer either as a counterclaim or as an
alternative defense to PNBs Complaint.

4.10 Private respondents claim is likewise lost by virtue of a specific

provision of the Warehouse Receipts Law and barred by prescription and
laches.

E. PUBLIC RESPONDENT JUDGE ACTED WITH GRAVE ABUSE OF DISCRETION

IN REFUSING TO LIFT THE ORDER OF GARNISHMENT OF THE FUNDS OF PNB
WITH THE BANGKO SENTRAL NG PILIPINAS.

4.11 Public respondent judge failed to consider PNBs arguments in support of its

Urgent Motion to Lift Garnishment.[8]

In arguing its cause, petitioner explained that this Courts decision in G.R. No.
119231 merely affirmed the trial courts resolutions of 20 December 1994 and 1 March
1995. The earlier resolution set private respondents reception of evidence for hearing to
prove their warehousemans lien and, pending determination thereof, deferred
petitioners motion for execution of the summary judgment rendered in petitioners favor
in G.R. No. 107243. The subsequent resolution recognized the existence of a valid
warehousemans lien without, however, specifying the amount, and required its full
satisfaction by petitioner prior to the execution of the judgment in G.R. No. 107243.
Under said circumstances, petitioner reiterated that neither this Courts decision nor
the trial courts resolutions specified any amount for the warehousemans lien, either in
the bodies or dispositive portions thereof. Petitioner therefore questioned the propriety
of the computation of the warehousemans lien in the assailed order of 15 April 1997.
Petitioner further characterized as highly irregular the trial courts final determination
of such lien in a mere interlocutory order without explanation, as such should or could
have been done only by way of a judgment on the merits. Petitioner likewise reasoned
that a writ of execution was proper only to implement a final and executory decision,
which was not present in the instant case. Petitioner then cited the cases of Edward v.
Arce, where we ruled that the only portion of the decision which could be the subject of
execution was that decreed in the dispositive part, [9] and Ex-Bataan Veterans Security
Agency, Inc. v. National Labor Relations Commission, [10] where we held that a writ of
execution should conform to the dispositive portion to be executed, otherwise, execution
becomes void if in excess of and beyond the original judgment.
Petitioner likewise emphasized that the hearing of 21 February 1995 was marred by
procedural infirmities, narrating that the trial court proceeded with the hearing
notwithstanding the urgent motion for postponement of petitioners counsel of record,
who attended a previously scheduled hearing in Pampanga. However, petitioners
lawyer-representative was sent to confirm the allegations in said motion. To petitioners
dismay, instead of granting a postponement, the trial court allowed the continuance of
the hearing on the basis that there was nothing sensitive about [the presentation of
private respondents evidence].[11] At the same hearing, the trial court admitted all the
documentary evidence offered by private respondents and ordered the filing of the
parties respective memoranda. Hence, petitioner was virtually deprived of its right to
cross-examine the witness, comment on or object to the offer of evidence and present
countervailing evidence. In fact, to date, petitioners urgent motion to nullify the court
proceedings remains unresolved.
To stress its point, petitioner underscores the conflicting views of Judge Benito C.
Se, Jr., who heard and tried almost the entire proceedings, and his successor, Judge
Marcelino L. Sayo, Jr., who issued the assailed orders. In the resolution [12] of 1 March
1995, Judge Se found private respondents claim for warehouse lien in the amount
of P734,341,595.06 unacceptable, thus:

In connection with [private respondents] claim for payment of warehousing

fees and expenses, this Court cannot accept [private respondents] pretense
that they are entitled to storage fees and preservation expenses in the amount
of P734,341,595.06 as shown in their Exhibits 1 to 11. There would, however,
appear to be legal basis for their claim for fees and expenses covered during
the period from the time of the issuance of the five (5) quedans until demand
for their delivery was made by [petitioner] prior to the institution of the present
action. [Petitioner] should not be made to shoulder the warehousing fees and
expenses after the demand was made. xxx[13]

Since it was deprived of a fair opportunity to present its evidence on the

warehousemans lien due Noahs Ark, petitioner submitted the following documents: (1)
an affidavit of petitioners credit investigator [14] and his report[15] indicating that Noahs Ark
only had 1,490 50kg. bags, and not 86,356.41 50kg. bags, of sugar in its warehouse; (2)
Noahs Arks reports[16] for 1990-94 showing that it did not have sufficient sugar stock to
cover the quantity specified in the subject quedans; (3) Circular Letter No. 18 (s. 1987-
88)[17] of the Sugar Regulatory Administration requiring sugar mill companies to submit
reports at weeks end to prevent the issuance of warehouse receipts not covered by
actual inventory; and (4) an affidavit of petitioners assistant vice president [18] alleging that
Noahs Arks daily storage fee of P4/bag exceeded the prevailing industry rate.
Petitioner, moreover, laid stress on the fact that in the questioned order of 14 July
1997, the trial court relied solely on the Annual Synopsis of Production & Performance
Date/Annual Compendium of Performance by Philippine Sugar Refineries from 1989 to
1994, in disregard of Noahs Arks certified reports that it did not have sufficient sugar
stock to cover the quantity specified in the subject quedans. Between the two, petitioner
urged, the latter should have been accorded greater evidentiary weight.
Petitioner then argued that the trial courts second assailed order of 14 July 1997
misinterpreted our decision in G.R. No. 119231 by ruling that the Refining Contract
under which the subject sugar stock was produced bound the parties. According to
petitioner, the Refining Contract never existed, it having been denied by Rosa Ng Sy;
thus, the trial court could not have properly based its computation of the
warehousemans lien on the Refining Contract. Petitioner maintained that a separate
trial was necessary to settle the issue of the warehousemans lien due Noahs Ark, if at
all proper.
Petitioner further asserted that Noahs Ark could no longer recover its lien, having
raised the issue for the first time only during the execution proceedings of this Courts
decision in G.R. No. 107243. As said claim was a separate cause of action which
should have been raised in private respondents answer with counterclaim to petitioners
complaint, private respondents failure to raise said claim should have been deemed a
waiver thereof.
Petitioner likewise insisted that under Section 29 [19] of the Warehouse Receipts Law,
private respondents were barred from claiming the warehousemans lien due to their
refusal to deliver the goods upon petitioners demand. Petitioner further raised that
private respondents failed to timely assert their claim within the five-year prescriptive
period, citing Article 1149[20] of the New Civil Code.
Finally, petitioner questioned the trial courts refusal to lift the garnishment order
considering that the levy on its real property, with an estimated market value
of P6,000,000,000, was sufficient to satisfy the judgment award; and contended that the
garnishment was contrary to Section 103 [21] of the Bangko Sentral ng Pilipinas Law
(Republic Act No. 7653).
On 8 August 1997, we required respondents to comment on the petition and issued
a temporary restraining order enjoining the trial court from implementing its orders of 15
April and 14 July 1997.
In their comment, private respondents first sought the lifting of the temporary
restraining order, claiming that petitioner could no longer seek a stay of the execution of
this Courts decision in G.R. No. 119231 which had become final and executory; and the
petition raised factual issues which had long been resolved in the decision in G.R. No.
119231, thereby rendering the instant petition moot and academic. They underscored
that CA-G.R. No. SP No. 25938, G.R. No. 107243 and G.R. No. 119231 all sustained
their claim for a warehousemans lien, while the storage fees stipulated in the Refining
Contract had the approval of the Sugar Regulatory Authority. Likewise, under the
Warehouse Receipts Law, full payment of their lien was a pre-requisite to their
obligation to release and deliver the sugar stock to petitioner.
Anent the trial courts jurisdiction to determine the warehousemans lien, private
respondents maintained that such had already been established. Accordingly, the
resolution of 1 March 1995 declared that they were entitled to a warehousemans lien,
for which reason, the execution of the judgment in favor of petitioner was stayed until
the latters full payment of the lien. This resolution was then affirmed by this Court in our
decision in G.R. No. 119231. Even assuming the trial court erred, the error could only
have been in the wisdom of its findings and not of jurisdiction, in which case, the proper
remedy of petitioner should have been an appeal and certiorari did not lie.
Private respondents also raised the issue of res judicata as a bar to the instant
petition, i.e., the March resolution was already final and unappealable, having been
resolved in G.R. No. 119231, and the orders assailed here were issued merely to
implement said resolution.
Private respondents then debunked the claim that petitioner was denied due
process. In that February hearing, petitioner was represented by counsel who failed to
object to the presentation and offer of their evidence consisting of the five quedans,
Refining Contracts with petitioner and other quedan holders, and the computation
resulting in the amount of P734,341,595.06, among other documents. Private
respondents even attached a copy of the transcript of stenographic notes [22] to their
comment. In refuting petitioners argument that no writ of execution could issue in
absence of a specific amount in the dispositive portion of this Courts decision in G.R.
No. 119231, private respondents argued that any ambiguity in the decision could be
resolved by referring to the entire record of the case, [23] even after the decision had
become final.
Private respondents next alleged that the award of P734,341,595.06 to satisfy their
warehousemans lien was in accordance with the stipulations provided in
the quedans and the corresponding Refining Contracts, and that the validity of said
documents had been recognized by this Court in our decision in G.R. No. 119231.
Private respondents then questioned petitioners failure to oppose or rebut the evidence
they presented and bewailed its belated attempts to present contrary evidence through
its pleadings. Nonetheless, said evidence was even considered by the trial court when
petitioner sought a reconsideration of the first assailed order of 15 April 1997, thus
further precluding any claim of denial of due process.
Private respondents next pointed to the fact that they consistently claimed that they
had not been paid for storing the sugar stock, which prompted them to file criminal
charges of estafa and violation of Batas Pambansa (BP) Blg. 22 against Rosa Ng Sy
and Teresita Ng. In fact, Sy was eventually convicted of two counts of violation of BP
Blg. 22. Private respondents, moreover, incurred, and continue to incur, expenses for
the storage and preservation of the sugar stock; and denied having waived their
warehousemans lien, an issue already raised and rejected by this Court in G.R. No.
119231.
Private respondents further claimed that the garnishment order was proper, only
that it was rendered ineffective. In a letter[24] received by the sheriff from the Bangko
Sentral ng Pilipinas, it was stated that the garnishment could not be enforced since
petitioners deposits with the Bangko Sentral ng Pilipinas consisted solely of legal
reserves which were exempt from garnishment. Petitioner therefore suffered no damage
from said garnishment. Private respondents likewise deemed immaterial petitioners
argument that the writ of execution issued against its real property in Pasay City was
sufficient, considering its prevailing market value of P6,000,000,000 was in excess of
the warehousemans lien; and invoked Rule 39 of the 1997 Rules