G.R. No. L-34548 November 29, 1988
RIZAL COMMERCIAL BANKING CORPORATION, petitioner, vs. THE HONORABLE PACIFICO P. DE CASTRO and PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION, respondents.

FACTS

In Civil Case No. Q-12785, Badoc Planters, Inc. (BADOC) obtained a partial judgment against Philippine Virginia Tobacco Administration (PVTA). Respondent Judge Pacifico P. de Castro, presiding in place of the original judge, granted BADOC’s motion and issued a writ of execution. The special sheriff then served a notice of garnishment on Rizal Commercial Banking Corporation (RCBC), where PVTA held an account. Upon an ex-parte motion by BADOC, the judge issued a subsequent order directing RCBC to deliver the garnished amount via check to the sheriff, who was to cash it and pay BADOC. RCBC complied.
PVTA filed a motion for reconsideration of the partial judgment, which was granted. The court set aside the partial judgment and the subsequent orders of execution and payment. In its order, the court directed BADOC and RCBC, jointly and severally, to reimburse PVTA the garnished amount. RCBC’s motion for reconsideration was denied, prompting this appeal.

ISSUE

Whether RCBC can be held solidarily liable with BADOC to reimburse PVTA for the garnished funds after the court order directing the garnishment and payment was subsequently set aside.

RULING

The Supreme Court ruled that RCBC cannot be held solidarily liable. The legal logic is anchored on the bank’s role as a mere garnishee obeying a mandatory court order. RCBC was not a party to the main case between BADOC and PVTA; its obligation was purely to comply with the lawful directive of the court. A bank, when served with a valid writ of garnishment, is legally compelled to obey. It has neither the legal personality nor the interest to question the validity of the judgment or the execution process issued by the court. To impose liability on RCBC for complying would unjustly punish an entity that acted under legal compulsion and without any independent fault.
The Court distinguished this case from instances involving truly public government funds exempt from execution. PVTA, as a public corporation, held funds in its proprietary capacity, which are generally subject to garnishment for its lawful debts. Thus, RCBC could not be charged with negligence or lack of prudence for immediately complying with the court’s clear order. The risk of the order being later vacated falls on the judgment creditor, BADOC, who sought and benefited from the execution. Therefore, only BADOC, which procured the now-vacated orders, should bear the obligation of restitution. The order holding RCBC solidarily liable was modified accordingly.