G.R. No. 165855. October 31, 2007.
Harish Ramnani, Chandru P. Pessumal, Maureen Ramnani, and Jose Manacop, petitioners, vs. QBE Insurance Philippines, Inc., respondent.

FACTS

Lavine Loungewear Mfg. Inc. (Lavine) procured multiple fire insurance policies. A fire destroyed its properties, and Lavine filed claims. A dispute arose between two corporate factions regarding the proper recipient of the insurance proceeds. One faction, led by Chandru Ramnani, filed a complaint to compel the insurers to pay Lavine directly. The opposing faction, the petitioners herein, intervened, claiming they were the legitimate directors and that the proceeds, due to prior endorsements, should be paid to Equitable PCI Bank to settle corporate loans. The Regional Trial Court (RTC) ruled in favor of the petitioners (intervenors). The RTC then granted the petitioners’ motion for execution pending appeal.
During execution, the sheriff garnished bank deposits of Rizal Surety, which had changed its name to QBE Insurance. Upon QBE’s motion, the RTC issued an order lifting the garnishment. Petitioners challenged this order via a petition for certiorari with the Court of Appeals, which dismissed it. Petitioners then elevated the case to the Supreme Court via the present petition.

ISSUE

Whether the Supreme Court should reinstate the writ of execution and the notice of garnishment against QBE Insurance.

RULING

No. The petition was denied for being moot and academic. The core legal logic is that a supervening event had rendered the present petition without any practical legal effect. The Supreme Court, in a prior related case (Manacop v. Equitable PCIBank, G.R. Nos. 162814-17, August 25, 2005), had already definitively ruled that the RTC’s grant of execution pending appeal in favor of the petitioners was improper and constituted grave abuse of discretion. Consequently, the very decision (the RTC’s April 2, 2002 judgment) whose execution was being sought was nullified insofar as the execution pending appeal was concerned. The RTC orders pertaining to the execution and garnishment were therefore rendered functus officio—they lost their force and effect. Since the foundation for the execution was voided by the final and executory decision in the Manacop case, there remained no justiciable controversy for the Court to resolve regarding the propriety of lifting the garnishment. The Court cannot issue a ruling to revive a process that was based on a voided order. The principle of mootness precludes adjudication on questions where no actual substantial relief can be granted.