CASE DIGEST
Metropolitan Bank and
Trust Co. v. Radio Philippines Network, Inc.
G.R. No. 190517, [July 27, 2022]
SECOND, LOPEZ, M.V
Execution of
Judgments; Satisfaction by levy; Escrow Funds; Garnishment
It is through the service of the writ of garnishment that the trial court acquires jurisdiction to bind the third person or garnishee to compliance with all its orders and processes. Courts cannot require third parties to comply with all its orders and processes absent the service of a writ of garnishment.
The RTC initially rendered a judgment against Traders Royal Bank and Security Bank, ordering them to pay damages and attorney's fees to Radio Philippines Network (RPN), Intercontinental Broadcasting Corporation (IBC), and Banahaw Broadcasting Corporation (BBC). The CA, however, absolved Security Bank from liability and held Traders Royal solely responsible for the damages. Traders Royal appealed to the SC (G.R. No. 138510).
Subsequently, the broadcasters sought a
writ of execution from the RTC, targeting Traders Royal's assets and an escrow
fund in Metrobank was established as part of a Purchase and Sale Agreement
(PSA) with Bank of Commerce, approved by the Bangko Sentral ng Pilipinas (BSP).
The RTC granted the writ, including the escrow fund. Metrobank, where the
escrow fund was deposited, objected, arguing it was not a party to the case and
questioned the RTC's jurisdiction over it.
Whether or not it was proper for the
RTC to issue the writ of execution against the escrow fund.
NO. The
RTC cannot require Metrobank to comply with all its orders and processes absent
the service of a writ of garnishment. The execution process for a money
judgment entails the executing officer first demanding immediate payment from
the judgment debtors in cash, certified bank check, or acceptable mode of
payment. If payment cannot be made using these methods, judgment debtors can
select which personal properties to levy upon. If they fail to exercise this
right or cannot be located, they waive it, allowing the executing officer to
levy personal properties, then real properties if necessary.
Garnishment is another method, allowing the seizing
of credits owed to the judgment debtors by a third party. In this case, the RTC
deviated from the prescribed process by directing enforcement against all
assets of Traders Royal Bank (TRB) and the escrow fund, without first demanding
payment. The proper procedure involves demanding payment from TRB first, then
levying properties if payment cannot be made, followed by service of a writ of
garnishment to bind third parties. Service of a writ of garnishment is
necessary for the court to bind third parties like Metrobank. Therefore, the RTC should deny the
request for subpoena and follow the correct execution procedure to ascertain
the status of the escrow account.
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