GR 241333; (May, 2022) (Digest)
G.R. No. 241333, June 27, 2022
Coca-Cola Femsa Philippines, Inc., Petitioner, vs. Pacific Sugar Holdings Corporation, Respondent.
FACTS
Petitioner Coca-Cola Femsa Philippines, Inc. (Coca-Cola) and respondent Pacific Sugar Holdings Corporation (Pacific Sugar) entered into Supply and Purchase Agreements for sugar. Pacific Sugar unilaterally terminated the agreements, prompting Coca-Cola to file a Complaint for damages and to pray for a writ of preliminary attachment. The Regional Trial Court granted the writ. Pacific Sugar filed a Motion to Dissolve the writ, praying for its discharge upon the filing of a standby letter of credit. The Regional Trial Court granted the motion, ruling that a standby letter of credit could substitute for the counter-bond required under Rule 57, Section 12 of the Rules of Court. Coca-Cola moved for reconsideration, which was denied. Coca-Cola filed a Petition for Certiorari before the Court of Appeals, which was dismissed, affirming the Regional Trial Court’s ruling. Coca-Cola elevated the case to the Supreme Court via a Petition for Review.
ISSUE
1. Whether the Regional Trial Court erred in exercising jurisdiction over the dissolution of the writ of preliminary attachment despite the pendency of petitioner’s petition for certiorari before the Court of Appeals.
2. Whether a counter-bond under Rule 57, Section 13 of the Rules of Court may be substituted by a standby letter of credit.
RULING
1. On the procedural issue, the Supreme Court ruled that the pendency of a petition for certiorari questioning an interlocutory order (the order dissolving the attachment) does not divest the trial court of its jurisdiction to proceed with the trial on the main case, unless a restraining order or injunction is issued by the appellate court. Since no such injunctive relief was granted, the Regional Trial Court did not commit grave abuse of discretion in continuing to exercise jurisdiction.
2. On the substantive issue, the Supreme Court ruled that a standby letter of credit is NOT a valid substitute for the cash deposit or counter-bond required by Rule 57, Sections 12 and 13 of the Rules of Court to discharge a writ of preliminary attachment. The Rules prescribe specific, exclusive methods for discharging a writ of attachment. Allowing a substitute method outside those prescribed constitutes an obstinate disregard of the rules of law and procedure. The trial court supplanted the law and sanctioned a remedy not contemplated therein. Therefore, the Regional Trial Court committed grave abuse of discretion in dissolving the writ based on a standby letter of credit, and the Court of Appeals seriously erred in affirming such ruling. The Supreme Court granted the Petition and reinstated the writ of preliminary attachment.