G.R. No. L-27417 June 30, 1970
CONSOLIDATED MINES, INC., petitioner, vs. HON. EMIGDIO V. NIETES, in his capacity as Acting Presiding Judge of Branch IV, Court of First Instance of Manila; THE SHERIFF OF THE PROVINCE OF RIZAL; and THE CREDIT CORPORATION OF THE PHILIPPINES, respondents.

FACTS

Petitioner Consolidated Mines, Inc. filed an interpleader complaint against Manuel L. Limsico and respondent Credit Corporation of the Philippines (Credit) concerning ownership of 280,000 pre-war shares of Consolidated. The shares appeared in Consolidated’s ledger as owned by Credit. When no claim was filed by October 18, 1951, the shares reverted to Consolidated as treasury stock under Republic Act No. 62, as amended. In 1956, Limsico claimed ownership, alleging purchase from Credit. In 1957, Credit filed its own claim, denying any sale or transfer and stating the certificates were destroyed during the liberation. Consolidated’s Board authorized recognition of belated claims only upon final court judgment. The Court of First Instance declared Credit the lawful owner but awarded no dividends. Both claimants appealed. The Court of Appeals affirmed Credit’s ownership and further ruled that the shares were not unclaimed treasury stock and that Credit was entitled to “whatever dividends had been declared and issued or paid corresponding thereto,” ordering Consolidated to account for and deliver such dividends. This judgment became final. Credit then moved for execution, claiming its shares had earned 616,000 shares as stock dividends and P66,934.00 as cash dividends. Consolidated opposed, offering to deliver the 280,000 shares and pay only P1,540.00 in dividends earned after October 1951. The Court of First Instance ordered execution, requiring Consolidated to deliver the shares “together with all the cash and stock dividends mentioned in and attached to the motion,” interpreting the appellate decision as entitling Credit to dividends pertaining to the shares “whether or not they have been actually paid or issued to the company itself.” Consolidated’s motion for reconsideration was denied, prompting this certiorari petition.

ISSUE

Whether the Court of First Instance, in ordering execution, gravely abused its discretion by enlarging the scope of the final Court of Appeals judgment by awarding dividends not necessarily covered by the phrase “whatever dividends had been declared and issued or paid” without conducting a formal hearing on the disputed dividends.

RULING

Yes. The Supreme Court granted the writ of certiorari. The orders of the Court of First Instance deviated from the final decision of the Court of Appeals. The appellate court’s judgment awarded only dividends that had been “declared and issued or paid.” The lower court’s order equated this with dividends “that pertain to the said shares whether or not they have been actually paid or issued to the company itself,” thereby enlarging the judgment’s scope. The issues raised—specifically, the correctness of Credit’s claimed dividends (616,000 shares and P66,934.00) versus Consolidated’s certified statement showing only P1,540.00—required a formal hearing and competent evidence. Adjudicating these issues without evidence was arbitrary and constituted a grave abuse of discretion. The contradiction between the parties’ positions adequately posited an issue, making the absence of a formal challenge irrelevant. Certiorari was a proper remedy as appeal was inadequate given the arbitrary order to turn over property not covered by the judgment. The Supreme Court set aside the orders, made the preliminary injunction permanent, and ordered the records returned to the Court of First Instance for further proceedings conformable to this opinion. Costs were imposed on private respondent Credit Corporation.