G.R. No. L-14598; October 31, 1960
MARIANO ACOSTA, ET AL., petitioners, vs. HON. CARMELINO G. ALVENDIA, as presiding Judge of Branch XVI, Court of First Instance of Manila and DE SANTOS AGRICULTURAL DEVELOPMENT, INC., respondents.

FACTS

Petitioners Mariano Acosta, et al., were tenants of Hacienda de Santos No. 5 in Nueva Ecija. They filed a petition for readjustment of sharing ratios in Tenancy Case No. 4791-R before the Court of Agrarian Relations (CAR), naming as respondents the hacienda itself and Alberto de Santos as its manager. The case was submitted to arbitration, resulting in an award on August 5, 1954, ordering a reliquidation. Based on this, the CAR issued an order on January 10, 1958, awarding specific amounts of palay to the tenants and directing respondents to deliver the same. For non-compliance, a writ of execution was issued on March 12, 1958, directing the provincial sheriff of Nueva Ecija to levy on respondents’ properties to satisfy the award.
Meanwhile, respondent De Santos Agricultural Development, Inc., a domestic corporation organized in 1955, filed a third-party claim over the levied palay. Alleging the sheriff threatened to proceed with the sale despite the claim, the corporation filed an injunction suit (Civil Case No. 36377) before the Court of First Instance (CFI) of Manila against the sheriff and the tenants (petitioners herein). The CFI issued a preliminary writ restraining the sheriff from proceeding with the execution.
Petitioners moved to dissolve the injunction, arguing lack of jurisdiction and cause of action. The respondent Judge ordered the writ dissolved upon petitioners posting a P20,000 bond. Both parties sought reconsideration. The corporation argued the CAR judgment was against the deceased Felipe de Santos and unenforceable against his heirs. In an order dated July 19, 1958, the respondent Judge found that the heirs of Felipe de Santos (who died in 1945) were the true owners of the hacienda and the sole stockholders of the respondent corporation, to which they contributed only the hacienda land. He held this was an instance to disregard the corporate fiction, as the corporation should not be used to prevent execution of the CAR judgment. However, he refused to dissolve the injunction without requiring the bond. Hence, the tenants filed this petition for prohibition.

ISSUE

Whether the Court of First Instance of Manila acted without or in excess of its jurisdiction in entertaining the injunction suit and issuing the preliminary writ to restrain the execution of a judgment rendered by the Court of Agrarian Relations in Nueva Ecija.

RULING

Yes, the Court of First Instance of Manila acted outside its jurisdiction.
The Supreme Court granted the writ of prohibition. The respondent Judge’s own findings established that the heirs of Felipe de Santos, who were the sole stockholders of the respondent corporation and contributed only the hacienda land involved in the tenancy case, should be considered the same as the corporation. Therefore, the corporate fiction should be disregarded to prevent the corporation from being used as an instrument to obstruct the execution of the CAR judgment. The CAR judgment, rendered against the hacienda and its manager Alberto de Santos, was valid and binding on the owners of the hacienda. Notably, the award was made in 1954, while the corporation was organized only in 1955.
Furthermore, the CFI of Manila lacked territorial jurisdiction to issue the injunction. Under Section 44(n) of the Judiciary Act of 1948 and Section 2, Rule 60 of the Rules of Court, the power of CFI judges to issue writs of injunction is limited to acts being committed or about to be committed within their respective provinces and districts. The act sought to be enjoined—the execution of the CAR judgment by the provincial sheriff—was being carried out in Nueva Ecija, outside the territorial jurisdiction of the CFI of Manila.
WHEREFORE, the writ of prohibition is granted. Costs against the respondent corporation.