26 Perla Compania de Seguros, Inc.

v Ramolete
G.R. No. 60887, 13 November 1991
Feliciano, J. / jbsj

Subject Matter: Civil Procedure; Execution, Satisfaction and Effect of Judgments

Case Summary: A public utility jeepney (PUJ) owned and registered in the name of Enriquez, and driven by
Casas, collided with a private jeep owned and driven by the late Calixto Palmes. The collision caused Calixto's
instantenous death physical injuries on the part of two-year-old Adeudatus Borbon. Calixto's widow Primitiva
and Adeudatus's father Honorato filed complaint for damages against Casas and Enriquez before CFI Cebu.
Judge Ramolete ordered the Borbon claim excluded from the complaint due to its claim being distinct and
separate, without prejudice to its being filed with the proper inferior court. CFI ruled in favor of Palmes, ordering
Enriquez to pay damages. This judgment became final and executory and a writ of execution was issued but
was returned unsatisfied. Upon summons, Enriquez declared that the PUJ registered in her name was covered
by a third-party liability insurance policy issued by Perla Compania. Palmes filed a motion for garnishment
praying that an order of garnishment be issued against the insurance policy issued by Perla in favor of the
judgment debtor. Perla Compania moved for reconsideration and quashal of the writ of garnishment, alleging
that the writ was void on the ground that Perla Compania was not a party to the case and that jurisdiction over
its person has never been acquired by the court by service of summons or by any process. The court denied
Perla's motion. The Supreme Court ruled that the CFI has validly acquired jurisdiction over the garnishee. The
garnishee need not be impleaded as a party to the case. All that is necessary for the trial court lawfully to bind
the person of the garnishee or any person who has in his possession credits belonging to the judgment debtor is
service upon him of the writ of garnishment. It also ruled that every interest which the judgment debtor may
have in property may be subjected to execution.

Doctrines:
1. In order that the trial court may validly acquire jurisdiction to bind the person of the garnishee, it is not
necessary that summons be served upon him. The garnishee need not be impleaded as a party to the case. All
that is necessary for the trial court lawfully to bind the person of the garnishee or any person who has in his
possession credits belonging to the judgment debtor is service upon him of the writ of garnishment. The Rules
of Court themselves do not require that the garnishee be served with summons or impleaded in the case in order
to make him liable, under Section 15, Rule 39. Through service of the writ of garnishment, the garnishee becomes
a “virtual party” to, or a “forced intervenor” in, the case and the trial court thereby acquires jurisdiction to bind
him to compliance with all orders and processes of the trial court with a view to the complete satisfaction of the
judgment of the court.

2. Every interest which the judgment debtor may have in property may be subjected to execution. In a third-
party liability insurance contract, the insurer assumes the obligation of paying the injured third party to whom
the insured is liable. The insurer becomes liable as soon as the liability of the insured to the injured third person
attaches. Prior payment by the insured to the injured third person is not necessary in order that the obligation
of the insurer may arise. From the moment that the insured became liable to the third person, the insured
acquired an interest in the insurance contract, which interest may be garnished like any other credit.

Action Before SC: Petition for certiorari to review the orders of the then Court of First Instance of Cebu City.
Parties:
Petitioner Perla Compania de Seguros, Inc.

Respondents Jose R. Ramolete, Primitiva Y. Palmes, Honorato Borbon Sr., Office of the Provincial
Sheriff, Province of Cebu

Facts:
1. A Cimarron public utility jeepney owned and registered in the name of Nelia Enriquez, and driven by Cosme
Casas, collided with a private jeep owned and driven by the late Calixto Palmes. The collision caused Calixto's
instantenous death due to cardio-respiratory arrest caused by crushed chest, and physical injuries on the part of
two-year-old Adeudatus Borbon.

2. Calixto's widow Primitiva and Adeudatus's father Honorato filed complaint for damages against Cosme Casas
and Nelia Enriquez before CFI Cebu.

3. Since Borbon’s claim was distinct and separate from that of Palmes, and the amount thereof falls properly
within the jurisdiction of the inferior court, Judge Ramolete ordered the Borbon claim excluded from the
complaint, without prejudice to its being filed with the proper inferior court.

4. CFI rendered Decision in favor of Palmes, ordering Nelia Enriquez to pay her P31,000 in damages (moral,
compensatory, exemplary, actual damages, and attorney's fees). This judgment became final and executory and
a writ of execution was issued but was returned unsatisfied.

5. Enriquez was summoned before the trial court for examination; she declared under oath that the Cimarron
PUJ registered in her name was covered by a third-party liability insurance policy issued by Perla Compania.

6. Palmes filed a motion for garnishment praying that an order of garnishment be issued against the insurance
policy issued by Perla in favor of the judgment debtor. Judge Ramolete issued an Order directing the Provincial
Sheriff or his deputy to garnish the third-party liability insurance policy.

7. Perla Compania then appeared before the trial court, and moved for reconsideration and quashal of the writ
of garnishment, alleging that the writ was void on the ground that Perla Compania was not a party to the case
and that jurisdiction over its person has never been acquired by the court by service of summons or by any
process. The court denied Perla's motion. An Order for issuance of an alias writ of garnishment was
subsequently issued.

8. More than two years later, Perla filed this Petition for Certiorari and Prohibition against Judge Ramolete in
ordering garnishment of the third-party liability insurance contract issued by Perla in favor of Enriquez. The
Petition should have been dismissed for having been filed way out of time but, for reasons which do not appear
on the record, was entertained.

9. In its petition, Perla Compania reiterated its contention that its insurance contract cannot be subjected to
garnishment or execution to satisfy the judgment because it was not a party to the case and the CFI did not
acquire jurisdiction over its person. Perla further argues that the writ of garnishment had been issued solely on
the basis of the testimony of the judgment debtor during the examination to the effect that the Cimarron PUJ
was covered by a third-party liability insurance issued by Perla Compania.
Issue: Did Judge Ramolete err in ordering the garnishment of the judgment debtor's third-party liability
insurance? [NO]

Holding/Ratio:
1. In order that the trial court may validly acquire jurisdiction to bind the person of the garnishee, it is not
necessary that summons be served upon him. The garnishee need not be impleaded as a party to the case. All
that is necessary for the trial court lawfully to bind the person of the garnishee or any person who has in his
possession credits belonging to the judgment debtor is service upon him of the writ of garnishment. The Rules
of Court themselves do not require that the garnishee be served with summons or impleaded in the case in order
to make him liable, under Section 15, Rule 39. Through service of the writ of garnishment, the garnishee becomes
a “virtual party” to, or a “forced intervenor” in, the case and the trial court thereby acquires jurisdiction to bind
him to compliance with all orders and processes of the trial court with a view to the complete satisfaction of the
judgment of the court.

2. Every interest which the judgment debtor may have in property may be subjected to execution. In a third-
party liability insurance contract, the insurer assumes the obligation of paying the injured third party to whom
the insured is liable. The insurer becomes liable as soon as the liability of the insured to the injured third person
attaches. Prior payment by the insured to the injured third person is not necessary in order that the obligation
of the insurer may arise. From the moment that the insured became liable to the third person, the insured
acquired an interest in the insurance contract, which interest may be garnished like any other credit.

Petition dismissed.