G.R. No. L-45901 September 13, 1977
BLUE GREEN WATERS, INC., petitioner, vs. HON. CARLOS L. SUNDIAM, Judge, Court of First Instance of Manila, Branch XXVIII and CALIXTO TAN, respondents.

FACTS

Private respondent Calixto Tan filed a complaint for recovery of a sum of money and damages against petitioner Blue Green Waters, Inc. The case was assigned to Branch XXVII. Respondent Judge Sundiam of Branch XXVIII, however, issued an ex parte order of preliminary attachment in that case. This writ was later lifted on March 6, 1977, after the petitioner filed a sufficient counterbond. Subsequently, on March 9, 1977, petitioner sold 10,900 bags of damaged urea fertilizer to a third party.
Thereafter, the respondent Judge, acting on ex parte motions by the private respondent and without notice or hearing, issued a restraining order on March 11, 1977, enjoining the petitioner from selling the fertilizer. This was followed by another order on March 16, 1977, based on a supplemental complaint that had not yet been admitted by the court. The pivotal March 29, 1977 order, issued after a motion to strike the supplemental complaint was filed but not acted upon, lifted the restraining order on the already-sold fertilizer but directed the petitioner to deliver 30% of the sale proceeds to the private respondent and granted a preliminary injunction against disposing of the remaining salvaged cargo without the plaintiff’s participation.

ISSUE

Whether the respondent Judge acted with grave abuse of discretion, in excess of jurisdiction, or in violation of due process in issuing the orders, particularly the order dated March 29, 1977.

RULING

Yes. The Supreme Court annulled the March 29, 1977 order for having been issued with grave abuse of discretion and in excess of jurisdiction. The legal logic is anchored on fundamental procedural irregularities and violations of due process. First, the order was premised on a supplemental complaint filed without leave of court and which had not been admitted, rendering it an improper basis for any judicial action. Second, the respondent Judge effectively adjudicated rights on the merits by ordering the turnover of a portion of the sale proceeds and imposing conditions on future sales, all without a trial. This constituted a prejudgment of the case, depriving the petitioner of the opportunity to be heard on the substantive claims. Third, the issuance of the preliminary injunction was arbitrary. The petitioner had already secured the discharge of the earlier writ of attachment by filing a counterbond, which was by law sufficient to answer for the private respondent’s claims. Granting a new injunctive remedy under these circumstances was unnecessary and amounted to an abuse of discretion. The Court emphasized that the respondent Judge’s actions—issuing orders based on an unadmitted pleading, deciding substantive issues prematurely, and imposing further restraints despite adequate existing security—transcended the bounds of judicial authority and denied the petitioner due process of law.