Why Garnishees Can't Use Certiorari to Contest Garnishment Orders

When a court issues a garnishment order, the person holding the judgment debtor's property—called the garnishee—may disagree with the court's directive. But what legal remedy is available to that garnishee? The Supreme Court's decision in Solidum v. Court of Appeals (G.R. No. 161647, June 22, 2006) provides a clear answer: a garnishee cannot use a petition for certiorari to challenge a garnishment order.

The Facts of the Case

Leoncio Solidum obtained a favorable judgment against Unified Capital Management Corporation (UNICAP) for a sum of money. When UNICAP failed to pay fully, Solidum pursued UNICAP's debtors. One debtor, Susan Yee Soon, had assigned to UNICAP all moneys payable from two life insurance policies issued by Insular Life Assurance Co. Ltd.

The sheriff served Notices of Garnishment on Insular, which initially assured compliance. However, Insular later refused to release the funds, arguing that the basic policy proceeds were only payable upon Yee Soon's death and that the assignment did not cover dividends.

The trial court ordered Insular to release the amounts. Insular filed motions for reconsideration, which were denied. Instead of availing of the remedies under the Rules of Court, Insular filed a petition for certiorari with the Court of Appeals, alleging grave abuse of discretion by the trial court judge. The Court of Appeals gave due course to the petition and annulled the trial court's orders. Solidum then appealed to the Supreme Court.

The Issue

The central question was whether the Court of Appeals erred in taking cognizance of the petition for certiorari filed by Insular, which was a mere garnishee and not a party to the main case.

The Ruling

The Supreme Court granted Solidum's petition and annulled the Court of Appeals' decision. The Court held that Insular, as a garnishee, could not avail of certiorari to contest the garnishment orders.

The Proper Remedies for a Garnishee

Garnishment is a legal process that reaches property belonging to a judgment debtor that is in the hands of a third person. The garnishee becomes a forced participant in the litigation. When a garnishee asserts its own rights over the garnished property, the Rules of Court provide specific remedies.

Under the relevant rule on property claimed by a third person, a third-party claimant may:

1. File an action for damages against the sheriff within a specified period from the filing of the bond posted by the judgment obligee.
2. File a separate and independent action to vindicate the claimant's title or right to the property.

The Court emphasized that neither an appeal nor a petition for certiorari is the proper remedy from the denial of a third-party claim. Citing Northern Motors, Inc. v. Coquia (G.R. No. L-40018, March 21, 1975), the Court reiterated that a third-party claimant should file a separate reivindicatory action against the execution creditor or a complaint for damages against the bond.

Why Certiorari Is Not Available

Certiorari is an extraordinary remedy available only when there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law. Since the garnishee has the remedies provided under the Rules of Court, certiorari is not proper.

The Court noted that Insular failed to avail of any of the remedies provided by the rules. Instead, it filed motions and ultimately a petition for certiorari—all improper avenues for a third-party claimant.

Practical Takeaways

• Garnishees have limited remedies. A garnishee who claims ownership or rights over garnished property must use the remedies under the Rules of Court: a separate action to vindicate the claim or an action for damages against the bond.
• Certiorari is not available. Neither an appeal nor a petition for certiorari is the proper remedy from the denial of a third-party claim.
• Act promptly. An action for damages against the bond must be filed within the period prescribed by the rules.
• Separate action required. The rights of a third-party claimant should be decided in a separate action, not in the main execution proceedings.
• Compliance may be mandatory. A garnishee who initially acknowledges the garnishment and later resists payment without availing of proper remedies may be compelled to comply with court orders.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.