G.R. No. 107243 September 1, 1993
PHILIPPINE NATIONAL BANK, petitioner, vs. NOAH’S ARK SUGAR REFINERY, ALBERTO T. LOOYUKO, JIMMY T. GO, WILSON T. GO, respondents.

FACTS

The Philippine National Bank (PNB) filed a complaint for specific performance against Noah’s Ark Sugar Refinery and its proprietors (respondents) after the latter refused to deliver sugar covered by negotiable warehouse receipts (quedans). These quedans were issued by Noah’s Ark to various depositors (Rosa Sy, RNS Merchandising, St. Therese Merchandising), who then negotiated and endorsed them to Luis T. Ramos and Cresencia K. Zoleta. Ramos and Zoleta used the quedans as security for loans from PNB and endorsed them to the bank. Upon the borrowers’ default, PNB demanded delivery of the sugar, which was refused. Respondents claimed ownership, alleging the original vendees/first endorsers did not pay for the sugar, thus never acquiring title, and that PNB, as a pledgee, failed to properly dispose of the quedans under the Civil Code. PNB filed a Motion for Summary Judgment, which the Regional Trial Court (RTC) denied. PNB then filed a petition for certiorari with the Court of Appeals (CA). The CA granted the petition, nullifying the RTC orders and directing that “a summary judgment be rendered forthwith in favor of the PNB against Noah’s Ark Sugar Refinery, et al.” This CA decision became final and executory. However, the RTC judge, despite the CA’s directive, proceeded to render a judgment in favor of Noah’s Ark and its co-defendants. PNB appealed this RTC decision to the Supreme Court.

ISSUE

Whether the Regional Trial Court judge committed grave error by rendering a judgment in favor of the respondents, Noah’s Ark et al., in direct contravention of the final and executory decision of the Court of Appeals which commanded the rendition of a summary judgment in favor of PNB.

RULING

Yes. The Supreme Court reversed and set aside the RTC decision. The Court held that the RTC judge’s only function after the CA decision became final and executory was to implement and carry out the Appellate Tribunal’s judgment. The CA had already ruled that no genuine issues of material fact existed and that PNB was entitled to a summary judgment as a matter of law. By disregarding the CA’s clear and categorical command, the Trial Judge committed a grave error. The Supreme Court rendered a new decision conformably with the final CA decision, ordering the respondents to deliver the sugar stocks covered by the warehouse receipts to PNB or, alternatively, to pay actual damages of P39.1 million with legal interest, plus attorney’s fees and costs.