G.R. No. 193000; October 16, 2013
SPOUSES FELIPE and EVELYN SARMIENTO and SPOUSES GREG and FELIZA AMARILLO, Petitioners, vs. SPOUSES RODOLFO and CARMELITA MAGSINO, Respondents.

FACTS

1. Respondents Spouses Magsino filed a Complaint for Specific Performance and Damages against Spouses Leopoldo and Elvira Calderon before the RTC of San Pedro, Laguna, Branch 93 (RTC Branch 93), praying that the Calderons execute a Deed of Absolute Sale over two parcels of land (the subject properties) in their favor or, alternatively, reimburse them the amount of ₱383,013.70 plus interest.
2. On December 17, 2002, RTC Branch 93 rendered a Decision granting the alternative relief, ordering the Calderons to reimburse the sum. The court noted that the Calderons had already sold the subject properties to herein petitioners (Spouses Sarmiento and Spouses Amarillo), making specific performance impossible. This decision became final and executory.
3. Upon motion for execution, the sheriff levied upon the subject properties, which were still registered in the names of the Calderons (though petitioners were already in possession as buyers). The properties were sold at public auction on August 27, 2004, to respondent spouses as the highest bidders for ₱800,000.00.
4. After the redemption period lapsed, a Certificate of Final Deed of Sale was issued to respondents. RTC Branch 93, in an Order dated April 23, 2007, confirmed the sale, declared the owner’s duplicate titles in petitioners’ possession as lost and null and void, and directed the issuance of new titles (TCT Nos. T-670293 and T-670294) in the names of respondent spouses.
5. On June 22, 2007, respondent spouses filed a Petition for a Writ of Possession. RTC Branch 93 granted it on July 3, 2008. A Writ of Possession was issued, a Notice to Vacate was served on petitioners, and they were evicted. The properties were turned over to respondent spouses.
6. Prior to the resolution of petitioners’ motion to recall the Notice to Vacate in RTC Branch 93, petitioners filed a separate Complaint for Recovery of Possession and Ownership (with application for TRO and preliminary injunction) against respondent spouses before the RTC of San Pedro, Laguna, Branch 31 (RTC Branch 31).
7. Respondent spouses filed a Motion to Dismiss the complaint before RTC Branch 31 on grounds including lack of jurisdiction, res judicata, and that the act sought to be restrained (eviction) was already a fait accompli.
8. In an Order dated September 22, 2008, RTC Branch 31 denied the Motion to Dismiss and granted petitioners’ application for a writ of preliminary injunction, ordering the restoration of petitioners’ possession upon posting of a ₱400,000.00 bond. The court reasoned that the general rule against interference with another court’s orders does not apply when a sheriff seizes a stranger’s property.
9. The Court of Appeals, in a Decision dated March 17, 2010, set aside the RTC Branch 31 Orders. It held that petitioners, as successors-in-interest to the Calderons (the judgment debtors), were bound by the final judgment of RTC Branch 93. Their remedy was a third-party claim in the execution proceedings, not a separate action for recovery of possession. The CA also noted that the issuance of the writ of preliminary injunction by RTC Branch 31 constituted an interference with a co-equal court’s final and executory judgment.

ISSUE

Whether the Court of Appeals correctly set aside the Orders of RTC Branch 31 which denied the Motion to Dismiss and granted a writ of preliminary injunction in favor of petitioners.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Decision of the Court of Appeals.
1. On the Propriety of the Separate Action (Complaint for Recovery of Possession): The Supreme Court held that petitioners’ remedy against the levy and sale of the properties was a third-party claim under Section 16, Rule 39 of the Rules of Court, filed in the very execution proceedings (Civil Case No. SPL-0499) before RTC Branch 93. By filing a separate action for recovery of possession before RTC Branch 31, petitioners improperly split their cause of action and violated the rule against multiplicity of suits. The property, though allegedly owned by petitioners, was registered in the name of the judgment debtors (Calderons) and was thus properly leviable. Petitioners’ claim of ownership should have been asserted in the execution case.
2. On the Binding Effect of the RTC Branch 93 Judgment: The Court ruled that petitioners, as alleged successors-in-interest to the Calderons, were bound by the final and executory judgment in Civil Case No. SPL-0499. They cannot collaterally attack that judgment through a separate action. The issuance of new titles in the names of respondent spouses pursuant to RTC Branch 93’s orders was valid.
3. On the Issuance of the Preliminary Injunction by RTC Branch 31: The Supreme Court affirmed the CA’s finding that RTC Branch 31 committed grave abuse of discretion. The writ of preliminary injunction issued by Branch 31 effectively nullified the Writ of Possession issued by Branch 93, which was based on a final judgment. This constituted an unjustifiable interference by one branch of the RTC with the judgment and processes of a co-equal court. The act sought to be restrained (the transfer of possession to respondents) had already been completed (fait accompli) under a final order.
4. Conclusion: Petitioners’ proper recourse was a third-party claim in the execution proceedings, not an independent action. The Court of Appeals correctly reversed RTC Branch 31’s orders, which improperly entertained a separate suit and interfered with the final processes of a co-equal court.