SILANGAN TEXTILE MANUFACTURING CORPORATION et al.

v HON. AVELINO G. DEMETRIA

G.R. No. 166719 March 12, 2007
Facts:
Luzon Spinning Mills (LSMI) alleged that petitioners ordered 111,161.60
kilograms of yarn, valued in the total amount of P9,999,845.00. In payment
of the yarns, STMC issued 34 postdated checks covering the total amount
to be paid for. When presented for payment, the checks were dishonored
for the reason, "Drawn Against Insufficient Fund" (DAIF). LSMI demanded
from STMC the immediate payment of the obligation. STMC failed and
refused to heed the demand of LSMI; hence, the latter filed the Complaint
for collection of sum of money before the RTC of Lipa City. In accordance
with the prayer of LSMI, RTC issued a writ of preliminary attachment against
STMCs properties. In this connection, a notice of attachment on the
properties in the name of STMC was issued. Apparently, LSMI had already
previously instituted before the MTC of Lipa City criminal cases against the
Silangans for violation of Batas Pambansa Blg. 22. Thus, STMC filed a
motion to dismiss the civil complaint before the RTC for forum shopping,
and to discharge the writ of preliminary attachment issued by the trial
court. RTC denied the motion. On appeal, CA affirmed RTCs decision.
Issue:
(1) Whether public respondent erred in finding that certification against
forum-shopping is inapplicable in this case;
(2) whether public respondent erred in denying petitioners prayer to
discharge the writ of preliminary attachment.
Ruling:
(1) Yes. The criminal cases for violation of Batas Pambansa Blg. 22 and the
collection of sum of money have the same issues, i.e., the recovery of the
subject checks. The subsequent filing of the civil case for sum of money
constitutes forum shopping. Forum shopping exists when the elements of
litis pendentia are present, or when a final judgment in one case will
amount to res judicata in another. There is forum shopping when the
following elements concur: (1) identity of the parties or, at least, of the
parties who represent the same interest in both actions; (2) identity of the
rights asserted and relief prayed for, as the latter is founded on the same
set of facts; and (3) identity of the two preceding particulars, such that any
judgment rendered in the other action will amount to res judicata in the
action under consideration or will constitute litis pendentia.
(2) Yes. As to the propriety of the writ of attachment, the SC held that since
it is an ancilliary and provisional remedy, the dismissal of the main case
brings about the lifting of the writ of attachment. Attachment is an ancillary
remedy. It is not sought for its own sake but rather to enable the attaching
party to realize upon relief sought and expected to be granted in the main
or principal action. Being an ancillary or auxiliary remedy, it is available
during the pendency of the action which may be resorted to by a litigant to
preserve and protect certain rights and interests therein pending rendition,
and for purposes of the ultimate effects, of a final judgment in the case.
They are provisional because they constitute temporary measures availed
of during the pendency of the action and they are ancillary because they
are mere incidents in and are dependent upon the result of the main action.
A writ of preliminary attachment is a species of provisional remedy. As
such, it is a collateral proceeding, permitted only in connection with a

regular action, and as one of its incidents; one of which is provided for
present need, or for the occasion; that is, one adapted to meet a particular
exigency. Based on the facts and discussions, the SC finds the dismissal of
the civil case to be in order, the writ of preliminary attachment issued by
the trial court in the said case must be lifted.
Mun. of Hagonoy, Bulacan v Hon. Dumdum Jr.
G.R. No. 168289 March 22, 2010
Facts:
Case stems from a complaint filed by private Emily Rose Go Ko Lim Chao
against petitioners, the Mun. Of Hagonoy, Bulacan and its Mayor Felix V.
Ople for collection of sum of money and damages. Respondent Lim Chao is
engaged in buying and selling surplus trucks, heavy equipment, machinery,
spare parts and related supplies. She entered into an agreement with
petitioner Mun. of Hagonoy through its Mayor Ople for the delivery of motor
vehicles needed to carry out developmental undertakings in the Mun.
Because of Oples earnest representation that funds had already been
allocated for the project, Lim Chao agreed to deliver twenty-one motor
vehicles whose value totaled P5,820,000.00. Lim Chao attached to the
complaint copies of the bills of lading showing that the items were
consigned, delivered to and received by the Mun. Despite the deliveries,
Ople failed to make the necessary payment. Thus respondent prayed for
the payment of the full amount with interest, plus damages, and costs of
the suit. RTC granted respondents Lim Chao prayer for a writ of preliminary
attachment upon posting a bond equivalent to the amount of the claim.
The Writ of Preliminary Attachment was issued directing the sheriff to
attach the estate, real and personal properties of the Mun. Mun. filed
motion to dismiss on the ground that claim on which action had been
brought was unenforceable under the Statute Of Frauds pointing out that
there was no written contract or document that would evince the
agreement with the respondent. Mun. also stated that no contact was ever
entered into by the Mun. due to non compliance of public bidding. Motion
were denied by the RTC. Appeal was filed in CA alleging that RTC made an
error for dismissing the complaint despite that the alleged contract with
respondent Lim Chao is unenforceable under the Statute Of Frauds and
disregarding the rule that the Mun. is immune from suit. CA denied the
appeal and affirm RTCs order.
Issues:
Whether the complaint should have been dismissed based on
unenforceability under the Statute Of Frauds and that the motion to
dissolve/discharge the Preliminary Attachment should have been granted
Whether the Mun. of Hagonoy is immuned to be sued under Sec. 22 of the
Local Gov. Code
Ruling:
Statute of Frauds par. 2, Art 1403 of NCC merely regulate the formalities of
the contract necessary to render it enforceable. It only lays down the
method by which the enumerated contracts may be proved, but does not
declare them invalid because they are not reduced to writing. By law,
contracts are obligatory in whatever form provided all the essential
requisites for their validity are present. Effect of noncompliance with this
requirement is that no action can be enforced under the given contracts.
Since there exists an indication that there has been performance of the
obligation on the part of the respondent, case is excluded from the

coverage of the rule on dismissals, either party may then enforce its claims
against the other. Moreover, Sec. 3, Art. 16 of the Constitution states that
the state and its political subdivisions may not be sued without their
consent. explains that they are open to suit but only when they consent to
it. Consent is implied when the Government enters into a business contract,
as it then descends to the level of the other contracting party; or it may be
embodied in a general or special law such as found in Book 1, Title 1,
Chapter 2, Section 22 of the LGC of 1991, which vests LGU with certain
corporate powers - one of them is the power to sue and be sued. The
universal rule that where the State gives its consent to be sued by private
parties either by general or special law, it may limit claimants action "only
up to the completion of proceedings anterior to the stage of execution" and
that the power of the Courts ends when the judgment is rendered, since
government funds and properties may not be seized under writs of
execution or garnishment to satisfy such judgments, is based on obvious
considerations of public policy. Disbursements of public funds must be
covered by the corresponding appropriations as required by law. The
functions and public services rendered by the State cannot be allowed to
be paralyzed or disrupted by the diversion of public funds from their
legitimate and specific objects. SC holds that the writ of preliminary
attachment must be dissolved and, indeed, it must not have been issued in
the very first place. Wherefore, Petition is GRANTED IN PART. CAs decision
is AFFIRMED in so far as to the decision rendered by the RTC denying the
petitioners motion to dismiss the Civil Case. Assailed decision to dismiss
the motion to discharged the writ of preliminary attachment is REVERSED.
Accordingly, Writ of Preliminary Attachment issued in Civil Case is ordered
LIFTED.
ROMAN CATHOLIC ARCHBISHOP OF SAN FERNANDO, PAMPANGA v
EDUARDO SORIANO, JR., et al.
Facts:
The RCA of San Fernando, Pampanga, represented by Most Rev. Paciano B.
Aniceto, D.D., claimed that it is the owner of tract of land located near the
Catholic Church at Poblacion, Pampanga. The RCA alleged that individuals
unlawfully occupied the subject land and refused to vacate despite
repeated demands. RCA filed an ejectment case. Defendants countered
that the RCA has no cause of action against them because its title is
spurious . They contended that the subject land belonged to the State, but
they have already acquired the same by acquisitive prescription as they
and their predecessors-in-interest have been in continuous possession of
the land for more than thirty (30) years. MCTC rendered decision in favor of
the RCA and that title remains valid and binding against the whole world
until it is declared void by a court of competent jurisdiction. Thus,
defendants were ordered to vacate the premises and to pay reasonable
monthly rentals from August 15, 2000 until they shall have finally vacated
the premises.
Defendants appealed to RTC. Appeal was dismissed due to failure to file the
appeal memorandum even within the extended period. Hence, the decision
ejecting the defendants from the premises became final. RCA filed an
Urgent Motion for Immediate Issuance of a Writ of Execution. MCTC granted
the motion. A Writ of Execution was issued commanding the sheriff or his
deputies to implement the decision. Sheriff Edgar Joseph C. David sent the
defendants a Notice to Vacate. During the pendency of the ejectment case
at the MCTC, some of the defendants therein filed Civil Case. They claimed
that they are in actual possession of the land in the concept of owners and

alleged that OCT No. 17629 in the name of RCA is spurious and fake. The
RCA moved to dismiss the case on grounds of noncompliance with a
condition precedent, laches, and for being a collateral attack on its title and
motion to dismiss. RTC denied the motion to dismiss. RCA's motion for
reconsideration was denied. RCA filed with the CA a petition for certiorari
with prayer for preliminary injunction which was dismissed for lack of merit.
Issue:
Whether or not the CA erred in not holding that the RTC committed grave
abuse of discretion in denying the motion to dismiss filed by the RCA.
Ruling:
Trial court's denial of a motion to dismiss cannot be questioned in a
certiorari proceeding under Rule 65 of the 1997 Rules of Civil Procedure, as
amended. This is because a certiorari writ is a remedy designed to correct
errors of jurisdiction and not errors of judgment. The appropriate course of
action of the movant in such event is to file an answer and interpose as
affirmative defenses the objections raised in the motion to dismiss. If, later,
the decision of the trial judge is adverse, the movant may then elevate on
appeal the same issues raised in the motion. The only exception to this rule
is when the trial court gravely abused its discretion in denying the motion.
This exception is, nevertheless, applied sparingly, and only in instances
when there is a clear showing that the trial court exercised its judicial
power in an arbitrary or despotic manner by reason of passion or personal
hostility. Further, the abuse of the court's discretion must be so patent and
gross as to amount to an evasion of a positive duty or a virtual refusal to
perform the duty enjoined by, or to act at all in contemplation of, law. In
dismissing the petition for certiorari, the CA did not find grave abuse of
discretion on the part of the RTC. CA was not convinced with the RCA's
argument that plaintiffs failed to comply with the condition precedent
provided in Article 477 of the Civil Code because they allegedly did not
have legal or equitable title to, or interest in the real property. CA explained
that the requirement stated in Article 477 is not a condition precedent
before one can file an action for quieting of title. Rather, it is a requisite for
an action to quiet title to prosper and the existence or nonexistence of the
requisite should be determined only after trial on the merits. CA agreed
with the trial court in ruling that the RCA cannot raise in a motion to dismiss
the ground that the complaint is already barred by laches for it still remains
to be established during trial how long the plaintiffs have slept on their
rights, if such be the case. Next, RCA submits that an action for quieting of
title is a special civil action covered by Rule 63, while an action for
declaration of nullity of title is governed by ordinary rules. Thus, it contends
that these cases should have been dismissed for violation of the rule on
joinder of actions under Section 5, Rule 2 of the 1997 Rules of Civil
Procedure, as amended, which requires that the joinder shall not include
special civil actions governed by special rules. Contentin is bereft of merit
and insufficient to show that the CA erred in upholding the trial court's
decision. Section 6 of Rule 2 explicitly provides that misjoinder of causes of
action is not a ground for dismissal of an action. On the issue of collateral
attack against the title, the attack is direct when the objective is to annul or
set aside such judgment, or enjoin its enforcement. On the other hand, the
attack is indirect or collateral when, in an action to obtain a different relief,
an attack on the judgment is nevertheless made as an incident thereof. The
complaint filed with the RTC pertinently alleged that the claim of ownership
by the RCA is spurious, we disagree. Section 3, Rule 58 of the 1997 Rules of
Civil Procedure, as amended, enumerates the grounds for the issuance of

preliminary injunction, viz: SEC. 3. Grounds for issuance of preliminary

injunction. - A preliminary injunction may be granted when it is established:
(a) That the applicant is entitled to the relief demanded, and the whole or
part of such relief consists in restraining the commission or continuance of
the act or acts complained of, or in requiring the performance of an act or
acts, either for a limited period or perpetually; (b) That the commission,
continuance or nonperformance of the act or acts complained of during the
litigation would probably work injustice to the applicant; or (c) That a party,
court, agency or a person is doing, threatening, or is attempting to do, or is
procuring or suffering to be done, some act or acts probably in violation of
the rights of the applicant respecting the subject of the action or
proceeding, and tending to render the judgment ineffectual. To be entitled
to the injunctive writ, the applicant must show that there exists a right to
be protected which is directly threatened by an act sought to be enjoined.
Furthermore, there must be a showing that the invasion of the right is
material and substantial and that there is an urgent and paramount
necessity for the writ to prevent serious damage. The applicant's right must
be clear and unmistakable. In the absence of a clear legal right, the
issuance of the writ constitutes grave abuse of discretion. Where the
applicant's right or title is doubtful or disputed, injunction is not proper. The
possibility of irreparable damage without proof of an actual existing right is
not a ground for injunction. Injunction is not a remedy to protect or enforce
contingent, abstract, or future rights; it will not issue to protect a right not
in esse and which may never arise, or to restrain an act which does not
give rise to a cause of action. There must exist an actual right. In this case,
the defendants in the ejectment case possess no such legal rights that
merit the protection of the courts through the writ of preliminary injunction.
Evidently, their right to possess the property in question has already been
declared inferior or inexistent in relation to the right of the RCA in the MCTC
decision which has already become final and executory.
JAIME S. PEREZ v SPOUSES FORTUNITO L. MADRONA
G.R. No. 184478 March 21, 2012
Facts:
Respondent-spouses Fortunito Madrona and Yolanda B. Pante are registered
owners of a residential property located in Lot 22, Block 5, France Street
corner Italy Street, Greenheights Subdivision, Phase II, Marikina City and in
1989, respondents built their house thereon and enclosed it with a concrete
fence and steel gate. In 1999, respondents received a letter dated May 25,
1999 from petitioner Jaime S. Perez, Chief of the Marikina Demolition Office,
stating that the perimeter fence built by respondents are encroaching on
the sidewalk and is a violation of existing laws and demands that said
structure be demolished. In answer, respondent sent a letter stating that
the petitioners letter (1) contained an accusation libelous in nature as it is
condemning him and his property without due process; (2) has no basis and
authority since there is no court order authorizing him to demolish their
structure; (3) cited legal bases which do not expressly give petitioner
authority to demolish; and (4) contained a false accusation since their
fence did not in fact extend to the sidewalk. After a year the same letter
was sent by the petitioner to respondent hence prompted the respondent
to file a complaint for injunction before the Marikina City RTC. The RTC held
that respondents, being lawful owners of the subject property, are entitled
to the peaceful and open possession of every inch of their property and
petitioners threat to demolish the concrete fence around their property is
tantamount to a violation of their rights as property owners who are

entitled to protection under the Constitution and laws. The RTC also ruled
that there is no showing that respondents fence is a nuisance per se and
presents an immediate danger to the communitys welfare, nor is there
basis for petitioners claim that the fence has encroached on the sidewalk
as to justify its summary demolition. Petitioner contends that the requisites
for the issuance of writ of injunction are not present in the instant case.
Issue: Whether or not respondents are entitled to the issuance of writ of
injunction?
Ruling: The Court held in the affirmative. For injunction to issue, two
requisites must concur: first, there must be a right to be protected and
second, the acts against which the injunction is to be directed are violative
of said right. Here, the two requisites are clearly present: there is a right to
be protected, that is, respondents right over their concrete fence which
cannot be removed without due process; and the act, the summary
demolition of the concrete fence, against which the injunction is directed,
would violate said right. If petitioner indeed found respondents fence to
have encroached on the sidewalk, his remedy is not to demolish the same
summarily after respondents failed to heed his request to remove it.
Instead, he should go to court and prove respondents supposed violations
in the construction of the concrete fence. Indeed, unless a thing is a
nuisance per se, it may not be abated summarily without judicial
intervention.
CHINA BANKING CORPORATION, PETITIONER v SPS. HARRY CIRIACO
AND ESTHER CIRIACO
G.R. No. 170038 : July 11, 2012
Facts:
Spouses Harry and Esther Ciriaco obtained a loan from the petitioner,
secured by a real estate mortgage over their land in La Trinidad, Benguet.
Respondents defaulted in the payment of their loan. Petitioner extrajudicially foreclosed the mortgaged property and sold it at public auction
where the petitioner emerged as the highest bidder. The Sheriff executed a
Certificate of Sale in the petitioners favor and the Register of Deeds
annotated the Certificate of Sale on the TCT. A day before the expiration of
the redemption period, the respondents filed a complaint with RTC for
Injunction to enjoin the consolidation of title in the petitioners favor,
assailing the redemption price of the foreclosed property. RTC dismissed the
complaint. Respondents filed another complaint with the RTC for
Cancellation of Consolidation of Ownership over a Real Property, Specific
Performance, and Damages questioning the redemption price of the
foreclosed property. Petitioner in its Answer with Compulsory Counterclaim,
denied the allegations. Respondents filed an Omnibus Motion for Leave to
Amend Complaint and to Admit Attached Amended Complaint as well as
Motion for Hearing on the Issuance of a Writ of Preliminary Injunction and/or
Temporary Restraining Order (TRO). Respondents sought to amend the
complaint to allege further that fraud attended the consolidation of title in
the petitioners favor and to include a prayer for the issuance of a writ of
preliminary injunction and/or TRO to enjoin the petitioner from disposing of
the foreclosed property or taking possession thereof. Petitioner filed its
Opposition to the omnibus motion, arguing that the respondents further
allegation of fraud changes the theory of the case which is not allowed, and
that the respondents failed to show that they have a clear right in esse that
should be protected by an injunctive relief. RTC amended complaint and

directed the petitioner to file an answer. It noted that the 1997 Rules of
Civil Procedure relaxed the rule on amendments to pleadings, subject only
to the limitation that they are not dilatory. RTC granted the Respondents
application for the issuance of a writ of preliminary injunction and/or TRO,
since the respondents were entitled to prove their claim of fraud, and their
claim that the interests and penalty charges imposed by the bank had no
factual basis. Petitioner then filed a Rule 65 petition for certiorari with the
CA, arguing that the RTC gravely abused its discretion in precipitately
granting the respondents application for the issuance of a writ of
preliminary injunction without any hearing. CA denied the petition.
Issue: Whether the CA erred in finding that the RTC did not commit any
grave abuse of discretion in granting the respondents application for the
issuance of a writ of preliminary injunction and/or TRO
Ruling:
Yes; the court found merit in the petition. A preliminary injunction is an
order granted at any stage of an action prior to the judgment or final order
requiring a party or a court, agency or a person to refrain from a particular
act or acts. It is the strong arm of equity, an extraordinary peremptory
remedy that must be used with extreme caution, affecting as it does the
respective rights of the parties. Sections 3 and 5, Rule 58 of the 1997 Rules
of Civil Procedure on preliminary injunction, pertinent to this case, provide
the requirements for the issuance of a writ of preliminary injunction or a
TRO:
SEC. 3. Grounds for issuance of preliminary injunction. - A preliminary
injunction may be granted when it is established:
a. That the applicant is entitled to the relief demanded, and the whole
or part of such relief consists in restraining the commission or
continuance of the act or acts complained of, or in requiring the
performance of an act or acts, either for a limited period or
perpetually;
b. That the commission, continuance or non-performance of the act or
acts complained of during the litigation would probably work injustice
to the applicant; or
c. That a party, court, agency or a person is doing, threatening, or is
attempting to do, or is procuring or suffering to be done, some act or
acts probably in violation of the rights of the applicant respecting the
subject of the action or proceeding, and tending to render the
judgment ineffectual.
SEC. 5. Preliminary injunction not granted without notice; exception. - No
preliminary injunction shall be granted without hearing and prior notice to
the party or persons sought to be enjoined. If it shall appear from facts
shown by affidavits or by the verified application that great or irreparable
injury would result to the applicant before the matter can be heard on
notice, the court to which the application for preliminary injunction was
made, may issue ex parte a temporary restraining order to be effective only
for a period of twenty (20) days from service on the party or person sought
to be enjoined, except as herein provided. Within the twenty-day period,
the court must order said party or person to show cause at a specified time
and place, why the injunction should not be granted. The court shall also
determine, within the same period, whether or not the preliminary

injunction shall be granted, and accordingly issue the corresponding order.

However, subject to the provisions of the preceding sections, if the matter
is of extreme urgency and the applicant will suffer grave injustice and
irreparable injury, the executive judge of a multiple-sala court or the
presiding judge of a single-sala court may issue ex parte a temporary
restraining order effective for only seventy-two (72) hours from issuance
but shall immediately comply with the provisions of the next preceding
section as to service of summons and the documents to be served
therewith. Thereafter, within the aforesaid seventy-two (72) hours, the
judge before whom the case is pending shall conduct a summary hearing to
determine whether the temporary restraining order shall be extended until
the application for preliminary injunction can be heard. In no case shall the
total period of effectivity of the temporary restraining order exceed twenty
(20) days, including the original seventy-two hours provided herein.
From the provisions, it appears clearly that before a writ of preliminary
injunction may be issued, a clear showing must be made that there exists a
right to be protected and that the acts against which the writ is to be
directed are violative of an established right. The holding of a hearing,
where both parties can introduce evidence and present their side, is also
required before the courts may issue a TRO or an injunctive writ. Generally,
an RTC's decision to grant or to deny injunctive relief will not be set aside
on appeal, unless the trial court abused its discretion. In granting or
denying injunctive relief, a court abuses its discretion when it lacks
jurisdiction; fails to consider and make a record of the factors relevant to its
determination; relies on clearly erroneous factual findings; considers clearly
irrelevant or improper factors; clearly gives too much weight to one factor;
relies on erroneous conclusions of law or equity; or misapplies its factual or
legal conclusions. In this case, the Court found that the RTC abbreviated the
proceedings and precipitately granted the respondents application for
injunctive relief. The RTC did not conduct a hearing for reception of a
sampling of the parties respective evidence to give it an idea of the
justification for its issuance pending the decision of the case on the merits.
It failed to make any factual finding to support the issuance of the writ of
preliminary injunction since it did not conduct any hearing on the
application for the issuance of the writ of preliminary injunction or TRO. The
RTC conducted the hearings on the respondents omnibus motion only whether to admit the amended complaint and whether to hold a hearing on
the respondents application for a writ of preliminary injunction. In fact the
RTC granted the respondents application for a writ of preliminary injunction
based only on the respondents unsubstantiated allegations, Clearly, the
respondents right to injunctive relief has not been clearly and
unmistakably demonstrated. The respondents have not presented
evidence, testimonial or documentary, other than the bare allegations
contained in their pleadings, to support their claim of fraud that brings
about the irreparable injury sought to be avoided by their application for
injunctive relief. Thus, the RTC's grant of the writ of preliminary injunction in
favor of the respondents, despite the lack of any evidence of a clear and
unmistakable right on their part, constitutes grave abuse of discretion
amounting to lack of jurisdiction. Every court should remember that an
injunction is a limitation upon the freedom of the defendant's action and
should not be granted lightly or precipitately. It should be granted only
when the court is fully satisfied that the law permits it and the emergency
demands it; no power exists whose exercise is more delicate, which
requires greater caution and deliberation, or is more dangerous in a
doubtful case, than the issuance of an injunction. The Court granted the

petition. It reversed and set aside the decision and the resolution of the
Court of Appeals.
It set aside and declared void the Writ or Preliminary Injunction issued by
the trial court.
PHILIPPINE COMMERCIAL INTERNATIONAL BANK
ANTHONY M. ALEJANDRO
G.R. No. 175587/ 533 SCRA 738; September 21, 2007

JOSEPH

Facts:
On October 23, 1997, Philippine Commercial International Bank (petitioner)
filed against Joseph Anthony M. Alejandrino (respondent) a complaint for
sum of money with prayer for the issuance of a writ of preliminary
attachment. Said complaint alleged that on September 10, 1997,
respondent, a resident of Hong Kong, executed in favor of petitioner a
promissory note obligating himself to pay P249,828,588.90 plus interest. In
view of the fluctuations in the foreign exchange rates which resulted in the
insufficiency of the deposits assigned by respondent as security for the
loan, petitioner requested the latter to put up additional security for the
loan. Respondent, however, sought a reconsideration of said request
pointing out petitioners alleged mishandling of his account due to its failure
to carry out his instruction to close his account as early as April 1997, when
the prevailing rate of exchange of the US Dollar to Japanese yen was
US$1.00:JPY127.50. It appears that the amount of P249,828,588.90 was the
consolidated amount of a series of yen loans granted by petitioner to
respondent during the months of February and April 1997. In praying for
the issuance of a writ of preliminary attachment under Section 1
paragraphs (e) and (f) of Rule 57 of the Rules of Court, petitioner alleged
that (1) respondent fraudulently withdrew his unassigned deposits
notwithstanding his verbal promise to PCIB Assistant Vice President
Corazon B. Nepomuceno not to withdraw the same prior to their
assignment as security for the loan; and (2) that respondent is not a
resident of the Philippines. The application for the issuance of a writ was
supported with the affidavit of Nepomuceno. On October 24, 1997, the trial
court granted the application and issued the writ ex parte after petitioner
posted a bond in the amount of P18,798,734.69, issued by Prudential
Guarantee & Assurance Inc. On the same date, the bank deposits of
respondent with Rizal Commercial Banking Corporation (RCBC) were
garnished. Subsequently, respondent filed a motion to quash the writ
contending that the withdrawal of his unassigned deposits was not
fraudulent as it was approved by petitioner. On December 24, 1997, the
trial court issued an order quashing the writ and holding that the
withdrawal of respondents unassigned deposits was not intended to
defraud petitioner. It also found that the representatives of petitioner
personally transacted with respondent through his home address in Quezon
City and/or his office in Makati City. It thus concluded that petitioner
misrepresented and suppressed the facts regarding respondents residence
considering that it has personal and official knowledge that for purposes of
service of summons, respondents residence and office addresses are
located in the Philippines. With the denial of petitioners motion for
reconsideration, it elevated the case to the Court of Appeals (CA-G.R. SP
No. 50748) via a petition for certiorari. On May 10, 1999, the petition was
dismissed for failure to prove that the trial court abused its discretion in
issuing the aforesaid order. Petitioner filed a motion for reconsideration but
was denied on October 28, 1999. On petition with this Court, the case was
dismissed for late filing in a minute resolution (G.R. No. 140605) dated

January 19, 2000. Petitioner filed a motion for reconsideration but was
likewise denied with finality on March 6, 2000.
Meanwhile, on May 20, 1998, respondent filed a claim for damages in the
amount of P25 Million on the attachment bond (posted by Prudential
Guarantee & Assurance, Inc.) on account of the wrongful garnishment of his
deposits. On August 30, 2000, the trial court awarded damages to
respondent in the amount of P25 Million without specifying the basis
thereof. Petitioner elevated the case to the Court of Appeals which affirmed
the findings of the trial court. It held that in claiming that respondent was
not a resident of the Philippines, petitioner cannot be said to have been in
good faith considering that its knowledge of respondents Philippine
residence and office address goes into the very issue of the trial courts
jurisdiction which would have been defective had respondent not
voluntarily appeared before it. Both parties moved for reconsideration. On
November 21, 2006, the Court of Appeals denied petitioners motion for
reconsideration but granted that of respondents by ordering petitioner to
pay additional P5Million as exemplary damages. Hence, the instant petition.
Issue: Whether Philippine Commercial International Bank is liable for
damages for the improper issuance of the writ of attachment against
respondent.
Ruling: Yes. Notwithstanding the final judgment that petitioner is guilty of
misrepresentation and suppression of a material fact, the latter contends
that it acted in good faith. Petitioner also contends that even if respondent
is considered a resident of the Philippines, attachment is still proper under
Section 1, paragraph (f), Rule 57 of the Rules of Court since he
(respondent) is a resident who is temporarily out of the Philippines upon
whom service of summons may be effected by publication. Petitioners
contentions are without merit. While the final order of the trial court which
quashed the writ did not categorically use the word bad faith in
characterizing the representations of petitioner, the tenor of said order
evidently considers the latter to have acted in bad faith by resorting to a
deliberate strategy to mislead the court.
Finally, there is no merit in petitioners contention that respondent can be
considered a resident who is temporarily out of the Philippines upon whom
service of summons may be effected by publication, and therefore qualifies
as among those against whom a writ of attachment may be issued under
Section 1, paragraph (f), Rule 57 of the Rules of Court which provides: (f) In
an action against a party x x x on whom summons may be served by
publication. In so arguing, petitioner attempts to give the impression that
although it erroneously invoked the ground that respondent does not reside
in the Philippines, it should not be made to pay damages because it is in
fact entitled to a writ of attachment had it invoked the proper ground under
Rule 57. However, even on this alternative ground, petitioner is still not
entitled to the issuance of a writ of attachment. The purposes of
preliminary attachment are: (1) to seize the property of the debtor in
advance of final judgment and to hold it for purposes of satisfying said
judgment, as in the grounds stated in paragraphs (a) to (e) of Section 1,
Rule 57 of the Rules of Court; or (2) to acquire jurisdiction over the action
by actual or constructive seizure of the property in those instances where
personal or substituted service of summons on the defendant cannot be
effected, as in paragraph (f) of the same provision. Corollarily, in actions in
personam, such as the instant case for collection of sum of money,

summons must be served by personal or substituted service, otherwise the

court will not acquire jurisdiction over the defendant. In case the defendant
does not reside and is not found in the Philippines (and hence personal and
substituted service cannot be effected), the remedy of the plaintiff in order
for the court to acquire jurisdiction is to convert the action into a
proceeding in rem or quasi in rem by attaching the property of the
defendant. In actions in personam against residents temporarily out of the
Philippines, the court need not always attach the defendants property in
order to have authority to try the case. Where the plaintiff seeks to attach
the defendants property and to resort to the concomitant service
ofsummons by publication, the same must be with prior leave, precisely
because, if the sole purpose of the attachment is for the court to acquire
jurisdiction, the latter must determine whether from the allegations in the
complaint, substituted service (to persons of suitable discretion at the
defendants residence or to a competent person in charge of his office or
regular place of business) will suffice, or whether there is a need to attach
the property of the defendant and resort to service of summons by
publication in order for the court to acquire jurisdiction over the case and to
comply with the requirements of due process.
In the instant case, it must be stressed that the writ was issued by the trial
court mainly on the representation of petitioner that respondent is not a
resident of the Philippines. Obviously, the trial courts issuance of the writ
was for the sole purpose of acquiring jurisdiction to hear and decide the
case. Had the allegations in the complaint disclosed that respondent has a
residence in Quezon City and an office in Makati City, the trial court, if only
for the purpose of acquiring jurisdiction, could have served summons by
substituted service on the said addresses, instead of attaching the property
of the defendant. The rules on the application of a writ of attachment must
be strictly construed in favor of the defendant. For attachment is harsh,
extraordinary, and summary in nature; it is a rigorous remedy which
exposes the debtor to humiliation and annoyance. It should be resorted to
only when necessary and as a last remedy.
It is clear from the foregoing that even on the allegation that respondent is
a resident temporarily out of the Philippines, petitioner is still not entitled to
a writ of attachment because the trial court could acquire jurisdiction over
the case by substituted service instead of attaching the property of the
defendant. The misrepresentation of petitioner that respondent does not
reside in the Philippines and its omission of his local addresses was thus a
deliberate move to ensure that the application for the writ will be granted.
Contrary to the claim of petitioner, the instant case for damages by reason
of the invalid issuance of the writ, survives the dismissal of the main case
for sum of money. Suffice it to state that the claim for damages arising from
such wrongful attachment may arise and be decided separately from the
merits of the main action.
WHEREFORE, the petition is PARTIALLY GRANTED. The May 31, 2006
Decision of the Court of Appeals in CA-G.R. CV No. 78200 is AFFIRMED with
MODIFICATIONS
BAC Manufacturing and Sales Corporation vs. CA
G.R. No. 96784 August 2, 1991
Facts: BAC Manufacturing and Sales Corporation, as assignee of certain
rights of one BOFTEX LIMITED under various contracts for ladies shorts,
denim pants and men's trousers which the latter entered into on various

dates in 1985 with the Wynner Garments Manufacturing, Inc., filed a

complaint against the latter with the Regional Trial Court of Makati (Branch
145), National Capital Judicial Region. Embodied in the complaint is an
application for the issuance of a writ of preliminary attachment. Supporting
it is an affidavit of its general manager which is attached to the complaint.
A writ of preliminary attachment was issued on 10 October 1986. No
summons and a copy of the complaint were, however, served upon private
respondent. The trial court issued an Order directing petitioner, as plaintiff,
to take the necessary steps towards the active prosecution of the case,
otherwise it would be dismissed for failure to prosecute. Petitioner filed a
Request for Alias Summons, and the Clerk of Court of the trial court issued
an Alias Summons. Then a levy on attachment was made upon the
machineries of private respondent by Deputy Sheriff Ruben S. Nequinto of
the aforesaid Branch 145 of the trial court a quo. Neither the Alias
Summons nor the order granting the issuance of the writ of preliminary
attachment or the writ of attachment itself was served on the private
respondent before or at the time the levy was made. Private respondent
filed a motion to dismiss the complaint and to dissolve the attachment for
failure of petitioner to prosecute its case for an unreasonable length of time
and that no copies of the summons and order of attachment were served
upon it. Petitioner filed its opposition thereto alleging therein that it could
not, inspite of its diligent efforts, locate private respondent's principal office
address.
The trial court denied the motion to dismiss and ordered private respondent
to file its answer. The latter filed a motion for the reconsideration of the
Order, but the trial court denied it.
Private respondent filed an Answer With Counterclaims wherein it prays
that the complaint be dismissed for lack of merit, the writ of attachment be
discharged and the attached properties be returned to it. On its
counterclaim, private respondent prays that petitioner be ordered to pay
moral and exemplary damages as may be determined by the court,
attorney's fees in the sum of P50,000.00 and the litigation expenses and
costs in an amount to be proved at the trial.
The trial court set the pre-trial of the case. However, private respondent
filed with the Supreme Court a petition to annul the aforesaid Orders. The
Supreme Court referred the petition to the respondent Court of Appeals. In
said petition, the private respondent herein contends that the trial court:
(a) has not acquired jurisdiction over it as it has not been duly served with
summons, and (b) petitioner's failure to cause summons to be served upon
private respondent for an unreasonable length of time warrants the
dismissal of the complaint for failure to prosecute. In its challenged
decision, the respondent Court sustains the private respondent, ruling that:
Since private respondent was not validly or properly served with summons,
the court below did not acquire jurisdiction over it.
Issue: Whether or not the trial court acquired jurisdiction over the case for
the writ of attachment to lie
Ruling: The motion to dismiss the complaint and to dissolve the writ of
attachment filed by private respondent on 16 February 1987 was precisely
based on failure to prosecute for an unreasonable length of time because
summons has not been served even up to that point in time and on the
nullity of the attachment for failure to serve summons on private
respondent and to furnish it with copies of the writ of attachment and the

notice thereof. It claims that failure to serve the summons is sufficient to

vacate or annul the writ. The appearance of private respondent was not,
contrary to the claim of petitioner, a general appearance, and did not
operate as waiver of service of summons. The filing of the Answer by
private respondent does not appear to have been squarely raised in the
proceedings before the respondent court. Petitioner makes no direct and
specific allegation in its petition in the instant case that it had initially
raised and pursued with vigor this matter in any of the pleadings it filed
before the promulgation of the challenged decision. The latter does not
mention it. Not having been properly and seasonably raised, the
respondent Court could not have considered the legal effects of the filing of
the Answer in its decision of 7 December 1989. Moreover, as impliedly
ruled by respondent Court in its resolution of 4 January 1991, the filing of
the Answer did not affect the issue of failure to prosecute for an
unreasonable length of time. We agree with the respondent Court in this
regard for to rule otherwise is to reward petitioner for its inaction and to
punish private respondent for complying with the trial court's order of 20
May 1988 which denied the motion to reconsider the Order of 17 March
1988 and required it to file its Answer. That its answer was filed solely for
that purpose is made manifest by its filing of a petition for certiorari
precisely to annul said Order and the previous Order of 17 March 1988
denying the motion to dismiss and to dissolve the writ of attachment. A
dismissal for failure to prosecute for an unreasonable length of time puts an
end to the case and it would be unjust and unfair to compel a defendant to
abort such a result by filing an answer. As a matter of fact, the trial court
committed grave abuse of discretion when it ordered private respondent to
file the Answer despite the fact that it was not yet served with summons
and a copy of the complaint.
The trial court then did not validly acquire jurisdiction over the person of
private respondent. and the implementation of the writ of attachment
against the property of private respondent is null and void. Nil it is true that
under Section 1 of Rule 57 of the Rules of Court the property of the
defendant may be attached, as security for the satisfaction of any
judgment that may be recovered in the cases therein enumerated, upon
application by the plaintiff at the commencement of the action or at any
time thereafter, a court which has not acquired jurisdiction over the person
of the defendant cannot bind the defendant, whether in the main case or in
the proceedings for the ancillary remedy of attachment.
SPOUSES GREGORIO and JOSEFA YU v NGO YET TE
G.R. NO. 155868 February 6, 2007
Facts: Spouses Gregorio and Josefa Yu (Spouses Yu) purchased from Ngo
Yet Te (Te) bars of detergent soap worth P594,240.00, and issued to the
latter three postdated checks as payment of the purchase price. When Te
presented the checks at maturity for encashment, said checks were
returned dishonored and stamped ACCOUNT CLOSED. Te demanded
payment from Spouses Yu but the latter did not heed her demands. Acting
through her son and attorney-in-fact, Charry Sy (Sy), Te filed with the
Regional Trial Court (RTC), Branch 75, Valenzuela, Metro Manila, a
Complaint, docketed as Civil Case No. 4061-V-93, for Collection of Sum of
Money and Damages with Prayer for Preliminary Attachment.
In support of her prayer for preliminary attachment, Te attached to her
Complaint an Affidavit executed by Sy that Spouses Yu were guilty of fraud
in entering into the purchase agreement for they never intended to pay the

contract price, and that, based on reliable information, they were about to
move or dispose of their properties to defraud their creditors. Upon Tes
posting of an attachment bond, the RTC issued an Order of
Attachment/Levy[ dated March 29, 1993 on the basis of which Sheriff
Constancio Alimurung (Sheriff Alimurung) of RTC, Branch 19, Cebu City
levied and attached Spouses Yus properties in Cebu City consisting of one
parcel of land (known as Lot No. 11) and four units of motor vehicle,
specifically, a Toyota Ford Fierra, a jeep, a Canter delivery van, and a
passenger bus. On April 21, 1993, Spouses Yu filed an Answer with
counterclaim for damages arising from the wrongful attachment of their
properties, specifically, actual damages amounting to P1,500.00 per day;
moral damages, P1,000,000.00; and exemplary damages, P50,000.00. They
also sought payment of P120,000.00 as attorneys fees and P80,000.00 as
litigation expenses. On the same date, Spouses Yu filed an Urgent Motion to
Dissolve Writ of Preliminary Attachment. They also filed a Claim Against
Surety Bond in which they demanded payment from Visayan Surety and
Insurance Corporation (Visayan Surety), the surety which issued the
attachment bond, of the sum of P594,240.00, representing the damages
they allegedly sustained as a consequence of the wrongful attachment of
their properties.
While the RTC did not resolve the Claim Against Surety Bond, it issued an
Order dated May 3, 1993, discharging from attachment the Toyota Ford
Fierra, jeep, and Canter delivery van on humanitarian grounds, but
maintaining custody of Lot No. 11 and the passenger bus. Spouses Yu filed
a Motion for Reconsideration which the RTC denied.
Dissatisfied, they filed with the CA a Petition for Certiorari, a decision was
rendered lifting the RTC Order of Attachment on their remaining properties
the court stated that Insolvency is not a ground for attachment especially
when defendant has not been shown to have committed any act intended
to defraud its creditors Te filed a Motion for Reconsideration but was later
on denied by the CA, he then filed with SC a Petition for Review on
Certiorari but the same were denied for having been filed late and for
failure to show that a reversible error was committed by the CA in a
resolution dated June 8, 1994. Thus, the finding of the CA in its September
14, 1993 Decision in CA-G.R. SP No. 31230 on the wrongfulness of the
attachment/levy of the properties of Spouses Yu became conclusive and
binding. However, on July 20, 1994, the RTC, apparently not informed of the
SC Decision, rendered a Decision ordering spouses YU to pay the plaintiff
the sum of P549,404.00, with interest from the date of the filing of this case
and attorneys fee. On the counterclaim, the Court declines to rule on this,
considering that the question of the attachment which allegedly gave rise
to the damages incurred by the defendants is being determined by the
Supreme Court. Spouses Yu filed with the CA an appeal questioning only
that portion of the July 20, 1994 Decision where the RTC declined to rule on
their counterclaim for damages the CA affirmed in toto the RTC Decision, it
nonetheless made a ruling on the counterclaim of Spouses Yu by declaring
that the latter had failed to adduce sufficient evidence of their entitlement
to damages. Spouses Yu filed a Motion for Reconsideration but the CA
denied the motion.
Issue:
a. Whether the appellate court erred in not holding that the writ of
attachment was procured in bad faith, after it was established by
final judgment that there was no true ground therefor.

b. Whether the appellate court erred in refusing to award actual, moral

and exemplary damages after it was established by final judgment
that the writ of attachment was procured with no true ground for its
issuance.
Ruling:
Whether the inability to notify the surety will render the judgment on the
counter claim invalid Te contends that as Visayan Surety was not notified of
the counterclaim, no judgment thereon could be validly rendered. Such
argument is not only flawed, it is also specious. As stated earlier, Spouses
Yu filed a Claim Against Surety Bond on the same day they filed their
Answer and Urgent Motion to Dissolve Writ of Preliminary Attachment.
Further, the records reveal that on June 18, 1993, Spouses Yu filed with the
RTC a Motion to Give Notice to Surety. The RTC granted the Motion in an
Order dated June 23, 1993. Accordingly, Visayan Surety was notified of the
pre-trial conference to apprise it of a pending claim against its attachment
bond. Visayan Surety received the notice on July 12, 1993 as shown by a
registry return receipt attached to the records. Moreover, even if it were
true that Visayan Surety was left in the proceedings a quo, such omission is
not fatal to the cause of Spouses Yu. In Malayan Insurance Company, Inc. v.
Salas, we held that x x x if the surety was not given notice when the claim
for damages against the principal in the replevin bond was heard, then as a
matter of procedural due process the surety is entitled to be heard when
the judgment for damages against the principal is sought to be enforced
against the suretys replevin bond. This remedy is applicable for the
procedures governing claims for damages. Whether the appellate court
erred in not holding that the writ of attachment was procured in bad faith,
after it was established by final judgment that there was no true ground
therefor. The counterclaim disputed therein was not for moral damages and
therefore, there was no need to prove malice.
As early as in Lazatin v. Twao, we laid down the rule that where there is
wrongful attachment, the attachment defendant may recover actual
damages even without proof that the attachment plaintiff acted in bad faith
in obtaining the attachment. However, if it is alleged and established that
the attachment was not merely wrongful but also malicious, the attachment
defendant may recover moral damages and exemplary damages as well.
Either way, the wrongfulness of the attachment does not warrant the
automatic award of damages to the attachment defendant; the latter must
first discharge the burden of proving the nature and extent of the loss or
injury incurred by reason of the wrongful attachment.
Whether the appellate court erred in refusing to award actual, moral and
exemplary damages after it was established by final judgment that the writ
of attachment was procured with no true ground for its issuance.
In fine, the CA finding that the attachment of the properties of Spouses Yu
was wrongful did not relieve Spouses Yu of the burden of proving the
factual basis of their counterclaim for Actual Damages.
To merit an award of actual damages arising from a wrongful attachment,
the attachment defendant must prove, with the best evidence obtainable,
the fact of loss or injury suffered and the amount thereof. Such loss or
injury must be of the kind which is not only capable of proof but must
actually be proved with a reasonable degree of certainty. As to its amount,
the same must be measurable based on specific facts, and not on
guesswork or speculation. In particular, if the claim for actual damages
covers unrealized profits, the amount of unrealized profits must be

established and supported by independent evidence of the mean income of

the business undertaking interrupted by the illegal seizure.
In the case at bar, the actual damages cannot be determined. Defendantappellant Josefa Yu testified on supposed lost profits without clear and
appreciable explanation. Despite her submission of the used and unused
ticket stubs, there was no evidence on the daily net income, the routes
plied by the bus and the average fares for each route. The submitted basis
is too speculative and conjectural. No reports regarding the average actual
profits and other evidence of profitability necessary to prove the amount of
actual damages were presented. Besides, based on the August 29, 1994
Manifestation, it would appear that long before the passenger bus was
placed under preliminary attachment in Civil Case No. 4061-V-93,the same
had been previously attached by the Sheriff of Mandaue City in connection
with another case and that it was placed in the Cebu Bonded Warehousing
Corporation, Cebu City. Thus, Spouses Yu cannot complain that they were
unreasonably deprived of the use of the passenger bus by reason of the
subsequent wrongful attachment issued in Civil Case No. 4061-V-93. Nor
can they also attribute to the wrongful attachment their failure to earn
income or profit from the operation of the passenger bus. Moreover,
petitioners did not present evidence as to the damages they suffered by
reason of the wrongful attachment of Lot No. 11. Moral and Exemplary
Damages
To merit an award thereof, it must be shown that the wrongful attachment
was obtained by the plaintiff with malice or bad faith, such as by appending
a false affidavit to his application. In the case, Te concluded that Spouses Yu
never intended to pay their obligation for they had available funds in their
bank but chose to transfer said funds instead of cover the checks they
issued. Thus, we cannot attribute malice nor bad faith to Te in applying for
the attachment writ. We cannot hold her liable for moral and exemplary
damages. Temperate or Moderate Damages and Attorneys fees. As a rule,
attorneys fees cannot be awarded when moral and exemplary damages are
not granted, the exception however is when a party incurred expenses to
lift a wrongfully issued writ of attachment
In the case, Spouses Yu waged a protracted legal battle to fight off the
illegal attachment of their properties and pursue their claims for damages.
It is only just and equitable that they be awarded reasonable attorneys fees
in the amount of P30,000.00. Further, we recognize that Spouses Yu
suffered some form of pecuniary loss when their properties were wrongfully
seized, although the amount thereof cannot be definitively ascertained.
Hence, an award of temperate or moderate damages in the amount of
P50,000.00 is in order.
FORT BONIFACIO DEVELOPMENT CORPORATION v YLLAS LENDING
CORPORATION and JOSE S. LAURAYA,
Facts: On 24 April 1998, FBDC executed a lease contract in favor of
Tirreno, Inc. (Tirreno) over a unit at the Entertainment Center - Phase 1 of
the Bonifacio Global City in Taguig, Metro Manila. The parties had the lease
contract notarized on the day of its execution. Tirreno used the leased
premises for Savoia Ristorante and La Strega Bar.
Two provisions in the lease contract are pertinent to the present case:
Section 20, which is about the consequences in case of default of the
lessee, and Section 22, which is about the lien on the properties of the
lease. The pertinent portion of Section 20 reads:

Section 20. Default of the Lessee

20.1 The LESSEE shall be deemed to be in default within the meaning of
this Contract in case: (i) The LESSEE fails to fully pay on time any rental,
utility and service charge or other financial obligation of the LESSEE under
this Contract;
20.2 Without prejudice to any of the rights of the LESSOR under this
Contract, in case of default of the LESSEE, the lessor shall have the right to:
(i) Terminate this Contract immediately upon written notice to the LESSEE,
without need of any judicial action or declaration;
Section 22, on the other hand, reads:
Section 22. Lien on the Properties of the Lessee: Upon the termination of
this Contract or the expiration of the Lease Period without the rentals,
charges and/or damages, if any, being fully paid or settled, the LESSOR
shall have the right to retain possession of the properties of the LESSEE
used or situated in the Leased Premises and the LESSEE hereby authorizes
the LESSOR to offset the prevailing value thereof as appraised by the
LESSOR against any unpaid rentals, charges and/or damages. If the LESSOR
does not want to use said properties, it may instead sell the same to third
parties and apply the proceeds thereof against any unpaid rentals, charges
and/or damages.
Tirreno began to default in its lease payments in 1999. By July 2000, Tirreno
was already in arrears byP5,027,337.91. FBDC and Tirreno entered into a
settlement agreement on 8 August 2000. Despite the execution of the
settlement agreement, FBDC found need to send Tirreno a written notice of
termination dated 19 September 2000 due to Tirreno's alleged failure to
settle its outstanding obligations. On 29 September 2000, FBDC entered
and occupied the leased premises. FBDC also appropriated the equipment
and properties left by Tirreno pursuant to Section 22 of their Contract of
Lease as partial payment for Tirreno's outstanding obligations. On 4 March
2002, Yllas Lending Corporation and Jose S. Lauraya, in his official capacity
as President, (respondents) caused the sheriff of Branch 59 of the trial court
to serve an alias writ of seizure against FBDC. In their complaint, Yllas
alleged that they lent a sum of money to Tirreno et al and in 2000 executed
a Deed of Chattel Mortgage in favor of Yllas as security for the loan. The
Chattel Mortgage covered properties of the Tirrenos restaurant and bar. On
the same day, FBDC served on the sheriff an affidavit of title and third
party claim. Despite FBDCs service upon him an affidavit of title and third
party claim, the sheriff proceeded with the seizure of certain items from
FBDCs premises. The sheriff delivered the seized properties to Yllas.
Issue: Whether or not the trial court should have required respondents to
file indemnity bond for FBDCs protection?
Ruling:
The petition has merit. Pursuant to Section 14 of Rule 57, the sheriff is not
obligated to turn over to respondents the properties subject of this case in
view of respondents' failure to file a bond. The bond in Section 14 of Rule
57 (proceedings where property is claimed by third person) is different from
the bond in Section 3 of the same rule (affidavit and bond). Under Section
14 of Rule 57, the purpose of the bond is to indemnify the sheriff against
any claim by the intervenor to the property seized or for damages arising

from such seizure, which the sheriff was making and for which the sheriff
was directly responsible to the third party. Section 3, Rule 57, on the other
hand, refers to the attachment bond to assure the return of defendant's
personal property or the payment of damages to the defendant if the
plaintiff's action to recover possession of the same property fails, in order
to protect the plaintiff's right of possession of said property, or prevent the
defendant from destroying the same during the pendency of the suit.
Because of the absence of the indemnity bond in the present case, FBDC
may also hold the sheriff for damages for the taking or keeping of the
properties seized from FBDC.
ALLIED BANKING CORPORATION
CORPORATION et al
GR No. 163692 February 4, 2008

vs

SOUTH

PACIFIC

SUGAR

Facts: South Pacific issued three promissory notes totaling P96,000,000 to

petitioner Allied Bank to secure payment of loans. Respondents executed
continuing guaranty/comprehensive surety agreements binding themselves
solidarily with the corporation. On maturity, South Pacific and its guarantors
failed to honor their respective
covenants. Allied Bank filed a complaint for collection of a sum of money
with a prayer for the issuance of a writ of preliminary attachment against
respondents. Allied Bank testified that South Pacific's representation that it
was in good fiscal condition was false and was suffering losses and
incurring debts in the millions. Thereafter, the trial court granted the
attachment and Allied Bank posted the requisite bond. The respondents
filed a motion to discharge the attachment with an urgent motion to defer
further the implementation of the writ, grounded upon the arguments that
(1) the evidence of fraud was insufficient and self-serving; and (2) there
was no evidence that South Pacific used the loan for other purposes. the
court granted the motion to discharge and denied the motion for
reconsideration. The Court of Appeals affirmed the trial court's order. The
Court of Appeals stated that Allied Bank failed to justify the grant of a writ
of attachment. Essentially, it found wanting such evidence as would
establish fraud as required before a writ of attachment may be granted
under Section 1, Rule 57 of the 1997 Rules of Civil Procedure.
Issue:
Whether there was fraud committed by respondents against petitioner
bank such that a writ of attachment may be issued against respondents
Ruling: In our considered view, without presenting the documents
adverted to by petitioners lone witness, Allied Banks allegations of fraud
amount to no more than mere conjectures. Yet there is no showing why
Allied Bank, being in the business of loans, could not obtain and present
the necessary documents in support of its allegations. Thus, we are in
agreement that the Court of Appeals was correct in finding that the
testimony of Allied Banks witness failed to show that respondents
indebtedness was incurred fraudulently.
Moreover, even a cursory examination of the banks complaint will reveal
that it cited no factual circumstance to show fraud on the part of
respondents. The complaint only had a general statement in the Prayer for
the Issuance of a Writ of Preliminary Attachment. Such general averment
will not suffice to support the issuance of the writ of preliminary
attachment. It is necessary to recite in what particular manner an applicant
for the writ

of attachment was defrauded. We take this opportunity to reiterate that an

application for a writ of attachment, being a harsh remedy, is to be
construed strictly in favor of the defendant. For by it, the reputation of the
debtor may be seriously prejudiced. Thus, caution must be exercised in
granting the writ. There must be more compelling reasons to justify
attachment beyond a mere general assertion of fraud.
TECNOGAS
PHILIPPINES
MANUFACTURING
PHILIPPINE NATIONAL BANK
G.R. No. 161004 April 14, 2008

CORPORATION

Facts: Tecnogas obtained from PNB an Omnibus Line of P35 million and a
5-year Term Loan of P14 million. To secure the loan, Tecnogas executed a
Real Estate Mortgage (REM) over its parcel of land in Paraaque City. The
REM authorized PNB to extrajudicially foreclose the mortgage in case
Tecnogas defaults on its obligations. It also provided that the mortgage will
stand as a security for any and all other obligations of Tecnogas to PNB, for
whatever kind or nature, and regardless of whether the obligations had
been contracted before, during or after the constitution of the mortgage.
When the loan matured, PNB sent collection letters to Tecnogas, but the
latter only proposed to pay its obligations by way of dacion en pago
conveying the land under REM. PNB filed a petition for extrajudicial
foreclosure of the REM. A day before the auction sale, Tecnogas filed with
the Paraaque City RTC a complaint for annulment of extrajudicial
foreclosure sale, with application for the issuance of a TRO and writ of
preliminary injunction. RTC granted the same. PNB sought for
reconsideration but was denied. On appeal, CA reversed the decision.
Issue: Whether CA erred in its ruling hat Tecnogas has no clear legal right
to an injunctive relief.
Ruling: No. The Court of Appeals did not err in ruling that Tecnogas has no
clear legal right to an injunctive relief. A writ of preliminary injunction may
be issued only upon clear showing by the applicant of the existence of the
following: (1) a right in esse or a clear and unmistakable right to be
protected; (2) a violation of that right; and (3) an urgent and paramount
necessity for the writ to prevent serious damage. In the absence of a clear
legal right, the issuance of the injunctive writ constitutes grave abuse of
discretion.
Dacion en pago is a special mode of payment whereby the debtor offers
another thing to the creditor who accepts it as equivalent of payment of an
outstanding obligation. The undertaking is really one of sale, that is, the
creditor is really buying the thing or property of the debtor, payment for
which is to be charged against the debtors debt.
The Court of Appeals did not err in ruling that Tecnogas has no clear legal
right to an injunctive relief because its proposal to pay by way of dacion en
pago did not extinguish its obligation. Tecnogas proposal to pay by way of
dacion en pago was not accepted by PNB. Thus, the unaccepted proposal
neither novates the parties mortgage contract nor suspends its execution
as there was no meeting of the minds between the parties on whether the
loan will be extinguished by way of dacion en pago. Necessarily, upon
Tecnogas default in its obligations, the foreclosure of the REM becomes a
matter of right on the part of PNB, for such is the purpose of requiring
security for the loans.
Atty. Tomas Ong Cabili v Judge Rasad Balindong

A.M. No. RTJ-10-2225 September 6, 2011

(formerly A.M. OCA I.P.I. No. 09-3182-RTJ)
Nature of the Case:
Resolving the administrative complaint against Respondent Acting Presiding
Judge Rasad G. Balindong of RTC
for Gross Ignorance of the Law, Grave Abuse of Authority, Abuse of
Discretion, and/or Grave Misconduct
Prejudicial to the Interest of the Judicial Service
Facts: An Action for damages was filed in RTC branch of Iligan City against
Mindanao State University (MSU), et al., arising from a vehicular accident
that caused the death of Jesus Ledesma and physical injuries to several
others. RTC in its decision held that MSU is liable for damages amounting to
P2,726,189.90. CA affirmed the decision. Entry of Judgment was made. RTC
issued a writ of execution. MSU failed to comply. Thus, Sheriff Gerard Peter
Gaje served the Notice of Garnishment to MSUs depository bank, Land
Bank of the Philippines. Office of the Solicitor Genereal opposed the motion
for execution in behalf of MSU. RTC denied the opposition.
MSU responded to the denial by filing a petition with RTC for Prohibition and
Mandamus with an application for the issuance of a temporary restraining
order (TRO) and/or preliminary injunction against the LBP and Sheriff Gaje.
The petition was raffled to the RTC, Branch 8, Presided by Respondent
Judge Rasad Balindong. Judge issued a TRO restraining Sheriff Gaje from
garnishing the amount of P2,726,189.90. He required MSU to file a
memorandum in support of its application for the issuance of a writ of
preliminary injunction. Sheriff Gaje moved to dismiss the case on the
ground of lack of jurisdiction. Respondent Judge granted the motion and
dismissed the case.
Complainant Atty. Tomas Ong Cabili, counsel of the private plaintiffs in Civil
Case filed the complaint charging the respondent Judge with Gross
Ignorance of the Law, Grave Abuse of Authority, Abuse of Discretion, and/or
Grave Misconduct PRejudicial to the Interest of the Judicial Service for the
interfering with the order of a co-equal court by issuing TRO to enjoin
Sheriff Gaje from garnishing the said amount.
OCA found respondent Judge guilty of Gross Ignorance of the law for
violating the elementary rule on Non-Interference with the proceedings of a
court of co-equal jurisdiction.
Issue: Whether the Respondent Judge is guilty for the interfering with the
order of a co-equal court by issuing TRO to enjoin the Sheriff from
garnishing amount from the bank.
Ruling; Doctrine of Judicial Stability or Non-interference states that No
court can interfere by injunction with the judgments or orders of another
court of concurrent jurisdiction having the power to grant the relief sought
by the injunction. Rationale is founded on the concept of Jurisdiction: A
court that acquires jurisdiction over the case and renders judgment therein
has jurisdiction over its judgment, to the exclusion of all other coordinate
courts, for its execution and over all its incidents, and to control, in
furtherance of justice, the conduct of ministerial officers acting in
connection with this judgment.
Thus, we have repeatedly held that a case where an execution order has
been issued is considered as still pending, so that all the proceedings on
the execution are still proceedings in the suit. A court which issued a writ of

execution has the inherent power, for the advancement of justice, to

correct errors of its ministerial officers and to control its own processes. To
hold otherwise would be to divide the jurisdiction of the appropriate forum
in the resolution of incidents arising in execution proceedings. Splitting of
jurisdiction is obnoxious to the orderly administration of justice.
The law and the rules are not unaware that an issuing court may violate the
law in issuing a writ of execution and have recognized that there should be
a remedy against this violation. The remedy, however, is not the resort to
another co-equal body but to a higher court with authority to nullify the
action of the issuing court. This is precisely the judicial power that the 1987
Constitution, under Article VIII, Section 1, paragraph 2, 34 speaks of
and which this Court has operationalized through a petition for certiorari,
under Rule 65 of the Rules of Court. Respondent Judge should have
refrained from acting on the petition because Branch 6 of the Iligan City
RTC retains jurisdiction to rule on any question on the enforcement of the
writ of execution. Section 16, Rule 39 of the Rules of Court (terceria), cited
in the course of the Courts deliberations, finds no application to this case
since this provision applies to claims made by a third person, other than the
judgment obligor or his agent; a third-party claimant of a property under
execution may file a claim with another court which, in the exercise of its
own jurisdiction, may issue a temporary restraining order.
If Sheriff Gaje committed any irregularity or exceeded his authority in the
enforcement of the writ, the proper recourse for MSU was to file a motion
with, or an application for relief from, the same court which issued the
decision, not from any other court, or to elevate the matter to the CA on a
petition for certiorari. In this case, MSU filed the proper motion with the
Iligan City RTC (the issuing court), but, upon denial, proceeded to seek
recourse through another co-equal court presided over by the respondent
Judge.
Wherefore, Respondent Judge is FOUND GUILTY of Gross Ignorance of the
Law.
Spouses Alfredo and Shirley Yap v International Exchange Bank,
Sheriff Renato Flora and or Office of the Clerk of Court, RTC Makati
City
Facts:
Respondent International Exchange Bank (iBank) filed a collection suit with
application for the issuance of a writ of preliminary attachment against
Alberto Looyuko and Jimmy T. Go in the RTC of Makati, the trial court
rendered a Decision in favor of respondent iBank and found Alberto
Looyuko and Jimmy T. Go liable, ordering them to pay the amount of ninetysix million pesos ( P 96,000,000.00), plus penalty. Thereafter, a Writ of
Execution was issued against Mr. Go for his part of the liability. Thereupon,
respondent
Renato C. Flora, Sheriff of Branch 150 of the RTC of Makati City, issued a
Notice of Sheriff's Sale on 12 May 2000 notifying all the parties concerned,
as well as the public in general, that the properties allegedly owned by Mr.
Go will be sold at a public auction.
On 13 June 2000, petitioner-spouses Alfredo and Shirley Yap filed a
Complaint for Injunction with Prayer for Temporary Restraining Order and/or
Preliminary Injunction with the RTC of Pasig City. Petitioners sought to stop

the auction sale alleging that the properties mentioned in the auction , are
already owned by them by virtue of Deeds of Absolute Sale executed by
Jimmy Go in their favor, that respondent sheriff disregarded their right over
the properties despite their execution of an Affidavit of Adverse Claim to
prove their claim over the properties and the publication of a Notice to the
Public warning that various deeds had already been issued in their favor
evidencing their right over the same.
On 21 August 2000, the RTC of Pasig City, Branch 158, issued an Order in
Civil Case No. 67945 denying petitioners' application for a writ of
preliminary injunction.
The public auction took place on 22 August 2000 for which respondent
sheriff issued a Certificate of Sale stating that the subject properties had
been sold at public auction in favor of respondent iBank, subject to the
third-party claims of petitioners.
Petitioners filed with the RTC of Pasig City the instant case for Annulment of
Sheriff's Auction Sale Proceedings and Certificate of Sale against iBank, the
Clerk of Court and Ex-Officio Sheriff of RTC Makati City, and Sheriff Flora,
including a writ of preliminary injunction. A hearing was held on the
application for preliminary injunction. On 18 July 2001, an Order was issued
by Judge Janolo granting petitioners' application for issuance of
a writ of preliminary injunction. The Order reads:
WHEREFORE, premises considered, plaintiffs' application for issuance of a
Writ of Preliminary Injunction is GRANTED, and defendants and their
representatives are enjoined from proceeding further with the execution,
including consolidating title and taking possession thereof, against
plaintiffs' real properties covered by Transfer Certificates of Title Nos. PT66751, PT-66749, 55469, 45229, 4621, 52987 and 36489. The Writ of
Preliminary Injunction shall be issued upon plaintiffs' posting of a bond
executed to defendant in the amount of Three Million Pesos ( P
3,000,000.00) to the effect that plaintiffs will pay defendants all damages
which the latter may sustain by reason of the injunction if it be ultimately
decided that the injunction is unwarranted.
On 13 August 2001, upon posting a bond in the amount of three million
pesos (P 3 ,000,000.00), Judge Janolo issued the Writ of Preliminary
Injunction. Respondents iBank and Sheriff Flora filed on 29 August 2001 a
Motion for Reconsideration of the order granting the Writ of Preliminary
Injunction which the trial court denied in an Order dated 21 November
2001. With the denial of their Motion for Reconsideration, respondents
iBank and Sheriff Flora filed with the Court of Appeals a Petition for
Certiorari, Prohibition and Mandamus with prayer for issuance of Temporary
Restraining Order and/or Preliminary Injunction praying that it:
(a) issue immediately a temporary restraining order enjoining Judge
Janolo from taking any action or conducting any further proceeding
on the case; (b) annul the Orders dated 18 July 2001 and 21
November 2001; and (c) order the immediate dismissal of Civil Case
No. 68088.
In its decision dated 18 July 2003, the Court of Appeals dismissed the
Petition. It explained that no grave abuse of discretion was committed by
Judge Janolo in promulgating the two Orders. It emphasized that its ruling
only pertains to the propriety or impropriety of the issuance of the
preliminary injunction and has no bearing on the main issues of the case

which are still to be resolved on the merits. The Very Urgent Motion for
Reconsideration filed by respondents iBank and Sheriff Flora was denied for
lack of merit.
Respondents iBank and Sheriff Flora thereafter filed with this Court a
Petition for Certiorari which we dismissed.
The Court's Resolution dated 7 March 2005 reads:
Considering the allegations, issues and arguments adduced in the petition
for certiorari, the Court Resolves to DISMISS the petition for being a wrong
remedy under the Rules and evidently used as a substitute for the lost
remedy of appeal under Rule 45 of the 1997 Rules of Civil Procedure, as
amended. Besides, even if treated as a petition under Rule 65 of the said
Rules, the same would be dismissed for failure to sufficiently show that the
questioned judgment is tainted with grave abuse of discretion Accordingly,
an Entry of Judgment was issued by the Supreme Court certifying that the
resolution dismissing the case had become final and executory on 30 July
2005. Subsequently, respondents iBank and Sheriff Flora filed with the RTC
of Pasig City, Branch 264, an Omnibus Motion (To Resolve Motion to Dismiss
Complaint and/or Dissolve Injunction) dated 31 January 2006 praying that
their pending Motion for Reconsideration dated 26 February 2001 which
seeks for the dismissal of the case be resolved and/or the Writ of
Preliminary Injunction previously issued be dissolved.
In a Manifestation dated 24 March 2006, respondents iBank and Sheriff
Flora submitted an Affidavit of Merit to emphasize their resolve and
willingness, among other things, to file a counter-bond to cover whatever
damages petitioners may suffer should the trial court decide to dissolve the
writ of preliminary injunction. In an Order dated 29 April 2006, the trial
court recalled and dissolved the Writ of Preliminary Injunction dated
13 August 2001, and ordered respondents to post a counter-bond
amounting to ten million pesos. It directed the Branch Clerk of Court to
issue a Writ Dissolving Preliminary Injunction upon the filing and approval of
the required counter-bond. The dispositive portion of the Order reads:
WHEREFORE, this Court's writ of preliminary injunction dated August 13,
2001 is recalled and dissolved. Defendants are hereby ordered to post a
counter-bond amounting to ten million pesos (P10,000,000.00) to cover the
damages plaintiffs would incur should a favorable judgment be rendered
them after trial on the merits.
Issue: May the trial court recall and dissolve the preliminary injunction it
issued despite the rulings of the Court of Appeals and by the SC that its
issuance was not tainted with grave abuse of discretion
Ruling: In our jurisdiction, the provisions of Rule 58 of the Revised Rules of
Court allow the issuance of preliminary injunction. This court granted
plaintiffs' prayer preliminary injunction in the Order dated July 18, 2001 and
the corresponding writ issued on August 13, 2001. Defendants in this case,
however, are not without remedy to pray for dissolution of preliminary
injunction already granted because it is only interlocutory and not
permanent in nature. The provisions of Section 6, Rule 58 of the Revised
Rules of Court allow dissolution of the injunction granted provided there is
affidavit of party or persons enjoined; an opportunity to oppose by the
other party; hearing on the issue, and filing of a bond to be fixed by the
court sufficient to compensate damages applicant may suffer by dissolution

thereby. A preliminary injunction is merely a provisional remedy, an adjunct

to the main case subject to the latter's outcome. Its sole objective is to
preserve the status quo until the trial court hears fully the merits of the
case. The status quo is the last actual, peaceable and uncontested
situation which precedes a controversy. The status quo should be that
existing at the time of the filing of the case. A preliminary injunction should
not establish new relations between the parties, but merely maintain or reestablish the pre-existing relationship between them.
In the case at bar, plaintiffs' deed of sale was purported to be not duly
notarized. As such, the legal right of what the plaintiffs claim is still doubtful
and such legal right can only be threshed out in a full blown trial where
they can clearly establish the right over the disputed properties. When the
complainant's right or title is doubtful or disputed, he does not have a clear
legal right and, therefore, the issuance of injunctive relief is not proper and
constitutes grave abuse of discretion. In the case at bar, plaintiffs' deed of
sale was purported to be not duly notarized. As such, the legal right of what
the plaintiffs claim is still doubtful and such legal right can only be threshed
out in a full blown trial where they can clearly establish the right over the
disputed properties.
In the case of Lasala v. Fernandez the highest court has enunciated that "a
court has the power to recall or modify a writ of preliminary injunction
previously issued by it. The issuance or recall of a preliminary writ of
injunction is an interlocutory matter that remains at all times within the
control of the court The issuance of a preliminary injunction is different
from its dissolution. Its issuance is governed by Section 3 Rule 58 of the
1997 Rules of Civil Procedure while the grounds for its dissolution are
contained in Section 6, Rule 58 of the 1997 Rules of Civil Procedure. As long
as the party seeking the dissolution of the preliminary injunction can prove
the presence of any of the grounds for its dissolution, same may be
dissolved notwithstanding that this Court previously ruled that its issuance
was not tainted with grave abuse of discretion.
Citing Section 6 of Rule 58, the Supreme Court illustrated in this wise:
A preliminary injunction may be dissolved if it appears after hearing that
although the applicant is entitled to the injunction or restraining order, the
issuance or continuance thereof, as the case may be, would cause
irreparable damage to the party or person enjoined while the applicant can
be fully compensated for such damages as he may suffer, and the former
files a bond in an amount fixed by the court on condition that he will pay all
damages which the applicant may suffer by the denial or the dissolution of
the injunction or restraining order. Two conditions must concur: first, the
court in the exercise of its discretion, finds that the continuance of the
injunction would cause great damage to the defendant, while the plaintiff
can be fully compensated for such damages as he may suffer; second, the
defendant files a counter-bond. The Order of the trial court dated 29 April
2006 is based on this ground. The well-known rule is that the matter of
issuance of a writ of preliminary injunction is addressed to the sound
judicial discretion of the trial court, and its action shall not be disturbed on
appeal unless it is demonstrated that it acted without jurisdiction or in
excess of jurisdiction or, otherwise, in grave abuse of discretion. By the
same token, the court that issued such a preliminary relief may recall or
dissolve the writ as the circumstances may warrant. In the case on hand,
the trial court issued the order of dissolution on a ground provided for by

the Rules of Court. The same being in accordance with the rules, we find no
reason to disturb the same. Petitioners contend that the Court of Appeals
erred and gravely abused its discretion when it dismissed outright their
Petition for Certiorari by failing to apply existing jurisprudence that a
motion for reconsideration may be dispensed with where the controverted
act is patently illegal or was performed without jurisdiction or in excess of
jurisdiction The rule is well settled that the filing of a motion for
reconsideration is an indispensable condition to the filing of a special civil
action for certiorari . It must be stressed that a petition for certiorari is an
extraordinary remedy and should be filed only as a last resort. The filing of
a motion for reconsideration is intended to afford the trial court an
opportunity to correct any actual error attributed to it by way of reexamination of the legal and factual issues. By their failure to file a motion
for reconsideration, they deprived the trial court of the opportunity to
rectify any error it committed, if there was any. Moreover, a perusal of
petitioners' petition for certiorari filed with the Court of Appeals shows that
they filed the same because there was no appeal, or any plain, speedy and
adequate remedy in the course of law except via a petition for certiorari.
When same was dismissed by the Court of Appeals for failure to file a
motion for reconsideration of the trial court's Order, they argue that while
the filing of a motion for reconsideration is a sine qua non before a petition
for certiorari is instituted, the same is not entirely without exception like
where the controverted act is patently illegal or was performed without
jurisdiction or in excess of jurisdiction. It was only when the Court of
Appeals dismissed their Petition did they argue that exceptions to the
general rule should apply. Their invocation of the application of the
exceptions was belatedly made. The application of the exceptions should
be raised in their Petition for Certiorari and not when their Petition has
already been dismissed. They must give their reasons and explain fully why
their case falls under any of the exceptions. This, petitioners failed to do.
Petitioners' argument that they filed the Petition for Certiorari without filing
a motion for reconsideration because there is no appeal, or any plain,
speedy and adequate remedy in the course of law except via a Petition for
Certiorari does not convince. We have held that the "plain" and "adequate
remedy" referred to in Section 1, Rule 65 of the Rules of Court is a motion
for reconsideration of the assailed Order or Resolution. The mere allegation
that there is "no appeal, or any plain, speedy and adequate remedy" is not
one of the exceptions to the rule that a motion for reconsideration is a sine
qua non before a petition for certiorari may be filed.
All told, we hold that the act of the trial court of issuing the Order dated 29
April 2006 was not patently illegal or performed without or in excess of
jurisdiction. The Court of Appeals was correct in dismissing outright
petitioners' Petition for Certiorari for failing to file a motion for
reconsideration of the trial court's Order.
MANILA BANKING CORPORATION v COURT OF APPEALS and LUZON
BROKERAGE CORPORATION
G.R. No. L-45961 July 3, 1990
Facts: Private respondent Luzon Brokerage Corporation entered into a
"Field Warehouse Storage Agreement" with PACOCO to operate warehouses
in Surigao, Surigao del Norte for Philippine copra in bags and/or in bulk, and
some three and a half years later, a lease of the latter's two warehouses for
the purpose of depositing copra therein. Pursuant to the agreements,
LUZON received from PACOCO for deposit in said warehouses 150 long tons

of copra resecada valued at P84,000.00, in connection with which LUZON

issued a warehouse receipt dated July 29, 1964 for 150 long tons copra
resecada. Some two months later, petitioner MANILA BANK addressed a
formal request to the Provincial Sheriff of Surigao del Norte to
extrajudicially sell the copra above described at public auction. The request
was made without prior satisfaction of LUZON's warehouseman's lien, the
surrender of the warehouse receipt, or presentation of a "written order"
from the entities mentioned in said receipt. Thus private respondent filed
before the Court of First Instance of Surigao del Norte for a writ of
preliminary injunction be issued e x parte restraining the defendants, their
agents, representatives or deputies from selling the 150 long tons of copra
in the two warehouses of PACOCO leased to plaintiff. The Trial Court issued
a temporary
restraining order and set the application for preliminary injunction for
hearing and at the same time ordered the public auction of the copra to
prevent the deterioration which would result to the ultimate loss to the
prejudice of the party or parties who may be found to be entitled to the
same. Petitioner filed an opposition to the injunction application. The copra
was accordingly sold at public auction for P78,470.11, which amount was
deposited with MANILABANK in the name of the Provincial Sheriff of Surigao
del Norte, subject to the orders of the Trial Court. Thereafter petitioner filed
for a motion to dismiss on the injunction prayed for by the private
respondent. The Trial Court granted the motion to dismiss considering that
the acts prayed for for injunction had already been committed since the
copra has already been sold.
Issue: Whether or not an injunction can be issued against consummated
acts?
Ruling: The Court held in the negative. Rule 58 of the Rules of Court
provides for both types of remedies: a preliminary and a final injunction.
Section 1 of the Rule defines a preliminary injunction as . . . an order
granted at any stage of an action prior to the final judgment, requiring a
person to refrain from a particular act . . . (or) the performance of a
particular act, in which (latter) case it shall be known as a preliminary
mandatory injunction. Section 10 of the same Rule, on the other hand,
treats of a final injunction. It reads as follows: . . . If upon the trial of the
action it appears that the plaintiff is entitled to have the act complained of
permanently enjoined, the court shall grant a final injunction perpetually
restraining the defendant from the commission or continuance of the act or
confirming the preliminary mandatory injunction. Furthermore, Section 4,
Rule 39, also adverted to by the Appellate Tribunal, deals i nter alia with
"an action for injunction," and decrees that the judgment therein "shall not
be stayed after its rendition and before an appeal is taken or during the
pendency of an appeal." An action for injunction, therefore, is as it has
always been, a recognized remedy in this country. It is, as above intimated,
a suit which has for its purpose the enjoinment of the defendant,
perpetually or for a particular time, from the commission or continuance of
a specific act, or his compulsion to continue performance of a particular
act. A s well established is the rule that an action for permanent injunction
should be dismissed when it appears in the trial or otherwise that the acts,
to restrain which the action was begun, have been accomplished or fully
executed. The acts sought to be restrained by LUZON's complaint have
already been accomplished. What the complaint sought essentially was to
perpetually stop the Provincial Sheriff of Surigao del Norte and his codefendants, and "their agents, representatives or deputies from selling the

150 long tons of copra in the two warehouses of PACOCO leased to plaintiff
(LUZON) . . . and from molesting said plaintiff in its possession thereof."
This, on the theory that the extra-judicial foreclosure sale was being
attempted without prior satisfaction of LUZON's warehouseman's lien, the
surrender of the warehouse receipt, or presentation of a "written order"
from the entities mentioned in said receipt. But the undisputed fact is that
LUZON had long since ceased to have possession of the c opra resecada
and the mortgage sale thereof has already been consummated. It is
obviously no longer possible to grant it the relief it was seeking against
MANILABANK, i .e ., the permanent restraint of the mortgage sale of the
copra, and of any interference with its possession thereof.
ELIDAD C. KHO, doing business under the name and style of KEC
COSMETICS LAB. v. HON. COURT OF APPEALS, SUMMERVILLE
GENERAL MERCHANDISING & CO., and ANG TIAM CRAY
G.R. No. 115758. March 19, 2002
Facts: Petitioner Elidad C. Kho filed a complaint for injunction and damages
with a prayer for the issuance of a writ of preliminary injunction, against
the respondents Summerville General Merchandising and Company and
Ang Tiam Chay. Kho alleged that she, doing business under the name and
style of KEC Cosmetics Laboratory, is the registered owner of the
copyrights Chin Chun Su and Oval Facial Cream Container/Case, and that
she also has patent rights on Chin Chun Su & Device and Chin Chun Su
for medicated cream after purchasing the same from Quintin Cheng, the
registered owner thereof in the Supplemental Register of the Philippine
Patent Office way back in 1980. She alleged that respondent Summerville
advertised and sold petitioners cream products under the brand name Chin
Chun Su, in similar containers that petitioner uses, thereby misleading the
public, and resulting in the decline in the petitioners business sales and
income; and, that the respondents should be enjoined from allegedly
infringing on the copyrights and patents of the petitioner. The
respondents, on the other hand, alleged as their defense that Summerville
is the exclusive and authorized importer, re-packer and distributor of Chin
Chun Su products manufactured by Shun Yi Factory of Taiwan; that the said
Taiwanese manufacturing company authorized Summerville to register its t
rade name Chin Chun Su Medicated Cream with the Philippine Patent
Office and other appropriate governmental agencies; and, that the
authority of Quintin Cheng, assignee of the patent registration certificate,
to distribute and market Chin Chun Su products in the Philippines had
already been terminated by the said Taiwanese Manufacturing Company.
The trial court granted the petitioners application for preliminary
injunction. The respondents filed a petition for certiorari with the Court of
Appeals. The appellate court ruled in favor of the respondents. It set aside
and declared null and void the orders of the trial court granting the writ of
preliminary injunction. It directed the trial court to forthwith proceed with
the trial of the case and resolve the issue raised by the parties on the
merits. The appellate court held that the registration of the trademark or
brandname "Chin Chun Su" by KEC with the supplemental register of the
Bureau of Patents, Trademarks and Technology Transfer cannot be equated
with registration in the principal register, which is duly protected by the
Trademark Law.
The petitioner filed a motion for reconsideration. This she followed with
several other motions.

In the meantime, the trial court went on to hear petitioners complaint for
final injunction and damages. It afterwards rendered a Decision holding that
the petitioner does not have trademark rights on the name and container of
the beauty cream product. It barred the petitioner from using the
trademark Chin Chun Su and upheld the right of the respondents to use the
same. It, however, recognized the copyright of the petitioner over the oval
shaped container of her beauty cream.
The petitioner duly appealed the said decision to the Court of Appeals but
the appeal was denied. The Court of Appeals promulgated a Resolution
almost a year after, denying the petitioners motion for reconsideration and
her other motions previously filed. Petitioner then filed a petition for review
on certiorari contending among others that the appellate court denied her
right to seek timely appellate when it failed to rule on her motion for
reconsideration within ninety (90) days from the time it was submitted for
resolution in accordance with Section 6, Rule 9 of the Revised Internal Rules
of the Court of Appeals. The appellate court ruled only after the lapse of
three hundred fifty-four (354) days.
Issue: Whether petitioners right to file a timely relief violated?
Ruling: No. The Supreme Court ruled in favor of the respondents. Pursuant
to Section 1, Rule 58 of the Revised Rules of Civil Procedure, one of the
grounds for the issuance of a writ of preliminary injunction is a proof that
the applicant is entitled to the relief demanded, and the whole or part of
such relief consists in restraining the commission or continuance of the act
or acts complained of, either for a limited period or perpetually. Thus, a
preliminary injunction order may be granted only when the application for
the issuance of the same shows facts entitling the applicant to the relief
demanded. This is the reason why the Court have ruled that it must be
shown that the invasion of the right sought to be protected is material and
substantial, that the right of complainant is clear and unmistakable, and,
that there is an urgent and paramount necessity for the writ to prevent
serious damage.
In the case at bar, the petitioner applied for the issuance of a preliminary
injunctive order on the ground that she is entitled to the use of the
trademark on Chin Chun Su and its container based on her copyright and
patent over the same. The Court found it appropriate to rule on whether
the copyright and patent over the name and container of a beauty cream
product would entitle the registrant to the use and ownership over the
same to the exclusion of others. It was found that the petitioner has no
right to support her claim for the exclusive use of the subject trade name
and its container. The name and container of a beauty cream product are
proper subjects of a trademark inasmuch as the same falls squarely within
its definition. In order to be entitled to exclusively use the same in the sale
of the beauty cream product, the user must sufficiently prove that she
registered or used it before anybody else did. The petitioners copyright
and patent registration of the name and container would not guarantee her
the right to the exclusive use of the same for the reason that they are not
appropriate subjects of the said intellectual rights. Consequently, a
preliminary injunction order cannot be issued for the reason that the
petitioner has not proven that she has a clear right over the said name and
container to the exclusion of others, not having proven that she has
registered a trademark thereto or used the same before anyone did. The
Court also gave weight to the decision of the trial court in the case for final

injunction and damages which held that the petitioner does not have
trademark rights on the name and container of the beauty cream product.
The said decision on the merits of the trial court rendered the issuance of
the writ of a preliminary injunction moot and academic notwithstanding the
fact that the same has been appealed in the Court of Appeals. This is
supported by the Courts ruling in La Vista Association, Inc. v. Court of
Appeals which held that: Considering the preliminary injunction is a
provisional remedy which may be granted at any time after the
commencement of the action and before judgment when it is established
that the plaintiff is entitled to the relief demanded and only when his
complaint shows facts entitling such reliefs. And it appearing that the trial
court had already granted the issuance of a final injunction in favor of
petitioner in its decision rendered after trial on the merits, the Court
resolved to Dismiss the instant petition having been rendered moot and
academic. An injunction issued by the trial court after it has already made a
clear pronouncement as to the plaintiffs right thereto, that is, after the
same issue has been decided on the merits, the trial court having
appreciated the
evidence presented, is proper, notwithstanding the fact that the decision
rendered is not yet final . . . Being an ancillary remedy, the proceedings for
preliminary injunction cannot stand separately or proceed independently of
the decision rendered on the merit of the main case for injunction. The
merit of the main case having been already determined in favor of the
applicant, the preliminary determination of its non-existence ceases to
have any force and effect. La Vista categorically pronounced that the
issuance of a final injunction renders any question on the preliminary
injunctive order moot and academic despite the fact that the decision
granting a final injunction is pending appeal. Conversely, a decision
denying the applicant-plaintiffs right to a final injunction, although
appealed,
renders moot and academic any objection to the prior dissolution of a writ
of preliminary injunction.
GOVERNOR ENRIQUE T. GARCIA, JR., et.al v COURT OF APPEALS 12
th DIVISION et.al
GR. No. 185132, April 24, 2009
Facts:
Sometime in 2004, the provincial government of Bataan caused the tax
delinquency sale of the properties of Sunrise Paper Products Industries, Inc.
(Sunrise). Without any other bidder at the public auction, the province
acquired the immovables consisting of a paper plant with its machineries
and equipment and the parcels of land where it is erected. To annul the
auction sale and to prevent the province from consolidating in its name the
titles over the properties, Sunrise, on April 21, 2005, filed a petition for
injunction in the Regional Trial Court (RTC) of Bataan. During the pendency
of the case, the province represented by the governor entered into a
compromise agreement with Sunrise on June 14, 2005. On the same date,
the Sangguniang Panlalawigan , through a unanimous resolution, approved
the same. Subsequently, the parties moved for the dismissal of the civil
case, not on account of the settlement, but on the ground that the court did
not acquire jurisdiction for failure of any of the parties to comply with
Section 267 of Republic Act (R.A.) No. 7160, or the Local Government Code
(LGC) of 1991. Upon the same ground, the parties no longer sought judicial
approval of the compromise agreement.
However, the trial court refused to dismiss the case and, on June 15, 2007,

rendered its Decision declaring, among others, that the auction sale was
invalid, that the transfer certificates of titles in the name of the province
were falsified, and that the compromise agreement executed by the parties
was illegal. Meanwhile, private respondents Josechito B. Gonzaga, Ruel A.
Magsino and Alfredo B. Santos, utilizing the June 15, 2007 Decision of the
trial court as basis, filed with the Office of the Ombudsman the January 22,
2008. Complaint-Affidavit administratively and criminally charging, among
others, the petitioners with violation of Sections 3(e) and (g) of R.A. No.
3019 or the Anti-Graft and Corrupt Practices Act, falsification of public
documents, serious illegal detention, malversation of public properties and
funds, and plunder. On October 28, 2008, the Ombudsman, in the
administrative case docketed as OMB-L-A-08-0039-A, issued the Order
preventively suspending petitioners for six months. Questioning the
preventive suspension and wary of the threatening and coercive nature of
the Ombudsmans Order, petitioners, on November 10, 2008, filed with the
CA the petition, for certiorari , prohibition and mandamus with an urgent
prayer for the issuance of an injunctive relief.
On November 14, 2008, the appellate court issued the assailed Resolution
directing the respondents to file their comment and not a motion to
dismiss. Action on the injunctive relief prayed for is held in abeyance
pending receipt of the pleadings ordered filed or until the period to file the
same shall have lapsed. Alarmed over the impending implementation of the
Ombudsman order and distraught with the apparent inaction of the
appellate court, petitioners instituted the instant petition for certiorari ,
prohibition and mandamus with urgent prayer for the issuance of a
temporary restraining order (TRO) and writ of preliminary injunction. On
November 19, 2008, the Court issued a TRO enjoining and prohibiting
public respondents and any person representing them or acting under their
authority from implementing the October 28, 2008 Order of the
Ombudsman until further orders from the Court.
Issue: Whether it is correct for the appellate court to hold abeyance or
deferment of action on petitioners urgent prayer for the issuance of an
injunctive relief.
Ruling: For the CA to defer action on petitioners application for an
injunctive relief pending the filing of respondents comment is to foreclose
altogether the very remedy sought by petitioners when they questioned
the alleged illegal preventive suspension. This is so, because the
Ombudsmans Order is immediately effective and executory, and the filing
of the comment by all of the respondents will entail considerable time.
While the court do not entirely blame the CA for being too cautious in not
granting any injunctive relief without first considering the counterarguments of the opposing parties, it would have been more prudent for it
to have, at the very least, on account of the extreme urgency of the matter
and the seriousness of the issues raised in the certiorari petition, issued a
TRO while it awaits the respective comments of the respondents and while
it judiciously contemplates on whether or not to issue a writ of preliminary
injunction. Verily, the basic purpose of the restraining order is to preserve
the s tatus quo until the hearing of the application for preliminary
injunction. It is a preservative remedy for the protection of substantive
rights and interests. As the appellate court failed dutifully and prudently to
exercise its discretion, in violation of fundamental principles of law and the
Rules of Court, its action is correctible by a certiorari writ from this Court.
The Court therefore accept as correct petitioners direct elevation to this
Court via the petition for certiorari the

CAs November 14, 2008 Resolution even if no motion for reconsideration

was filed to afford the appellate court an opportunity to rectify its error.
Under the circumstances obtaining in this case, the certiorari petition, and
not a motion for reconsideration with the appellate court, is the plain,
speedy and adequate remedy. Indeed, had they not filed the petition, they
would have been left with no avenue to protect their rights. While the
general rule is that a motion for reconsideration is an indispensable
condition before the filing of a
petition for certiorari , the same admits of exceptions, namely: (1) where
the order is a patent nullity, as where the court a quo has no jurisdiction;
(2) where the questions raised in the certiorari proceedings have been duly
raised and passed upon by the lower court, or are the same as those raised
and passed upon in the lower court; (3) where there is an urgent necessity
for the resolution of the question and any further delay will prejudice the
interests of the Government or of the petitioner, or the subject matter of
the action is perishable; (4) where, under the circumstances, a motion for
reconsideration will be useless; (5) where petitioner was deprived of due
process and there is extreme urgency for relief; (6) where, in a criminal
case, relief from an order of arrest is urgent and the granting of such relief
by the trial court is improbable; (7) where the proceedings in the lower
court are a nullity for lack of due process; (8) where the proceedings was e
x parte or in which the petitioner had no opportunity to object; and (9)
where the issue raised is one purely of law or public interest is involved.
Without further belaboring the point, the court found it very clear that the
extreme urgency of the situation required an equally urgent resolution, and
due to the public interest involved, the petitioners are justified in
straightforwardly seeking the intervention of this Court.
Power Sites and Signs, Inc vs. United Neon (a Division of Ever
Corporation)
GR No. 163406 November 24, 2009
Facts:
Power Sites and Signs, Inc. (Power Sites) is a corporation engaged in the
business of installing outdoor advertising signs or billboards. It applied for,
and was granted, the necessary permits to construct a billboard on a site
located at Km. 23, East Service Road, Alabang, Muntinlupa (the site).After
securing all the necessary permits, Power Sites began to construct its
billboard on the site. Subsequently, petitioner discovered that respondent
United Neon, a Division of Ever Corporation (United Neon), had also began
installation and erection of a billboard only one meter away from its site
and which completely blocked petitioners sign. Thus, petitioner requested
United Neon to make adjustments to its billboard to ensure that petitioners
sign would not be obstructed. However, petitioners repeated requests that
respondent refrain from constructing its billboard were ignored,and
attempts to amicably resolve the situation failed. Petitioner requested the
Muntinlupa City Engineer and Building Official to revoke United Neons
building permit and to issue a Cease and Desist Order against it. However,
before a resolution could be made by the City Building Official, Power Sites
filed a Petition for Injunction with Writ of Preliminary Injunction and Prayer
for Temporary Restraining Order and Damages against United Neon before
the Regional Trial Court (RTC) of Muntinlupa City. After the filing of the
parties respective memoranda, which took the place of testimonial
evidence, the RTC granted petitioners prayer for the issuance of a
preliminary injunction. The Writ of Injunction was issued on the same day.

United Neon then filed a Petition for Prohibition and Certiorari with
Application for Temporary Restraining Order and/or Writ of Preliminary
Injunction before the Court of Appeals. In brief, United Neon claimed that
the grant of preliminary injunction was unwarranted, particularly because
Power Sites only prayed for a prohibitory injunction in its original petition,
but the Order went as far as to grant a mandatory injunction in favor of
Power Sites. United Neon prayed that the Court of Appeals invalidate the
RTCs Order and Writ, issue a temporary restraining order enjoining the RTC
from further proceeding with Civil Case No. 02-143, and, after hearing,
enjoin the RTC from enforcing the Order. After the parties exchange of
pleadings, the Court of Appeals invalidated the Order of the RTC dated
August 1, 2002 and the Writ of Preliminary Injunction, but denied the prayer
for prohibition. Petitioners Motion for Partial Reconsideration was denied by
the Court of Appeals.
Issue: Whether the CA erred in invalidating the writ of preliminary
injunction issued by the RTC
Ruling: The Supreme Court finds that petitioner was not entitled to the
grant of a preliminary injunction for two reasons: first, the alleged right
sought to be protected by the petitioner was not clearly demonstrated;
second, the requirement of grave and irreparable injury is absent.
A preliminary injunction may be granted only where the plaintiff appears to
be clearly entitled to the relief sought a nd has substantial interest in the
right sought to be defended. While the existence of the right need not be
conclusively established, it must be clear. The standard is even higher in
the case of a preliminary mandatory injunction. The evidence presented in
support of a preliminary injunction is weak and inconclusive, and the
alleged right sought to be protected by petitioner is vehemently disputed.
Both parties allege that: (1) they began construction of their respective
billboards first; (2) the billboard of the other party blocks the others
exclusive line of sight; (3) they are entitled to protection under the
provisions of the National Building Code and OAAP Code of
Ethics/Guidelines. However, the Supreme Court is not in a position to
resolve these factual matters, which should be resolved by the trial court.
The question of which party began construction first and which party is
entitled to the exclusive line of sight is inextricably linked to whether or not
petitioner has the right that deserves protection through a preliminary
injunction. Indeed, the trial court would be in the best position to determine
which billboard was constructed first, their actual location, and whether or
not an existing billboard was obstructed by another. It is settled that a writ
of preliminary injunction should be issued only to prevent grave and
irreparable injury, that is, injury that is actual, substantial, and
demonstrable. Here, there is no irreparable injury as understood in law.
Rather, the damages alleged by the petitioner, namely, immense loss in
profit and possible damage claims from clients and the cost of the billboard
which is a considerable amount of money is easily quantifiable. Here, any
damage petitioner may suffer is easily subject to mathematical
computation and, if proven, is fully compensable by damages. Thus, a
preliminary injunction is not warranted.
CHINA BANKING CORPORATION, SPOUSES JOEY & MARY JEANNIE
CASTRO and SPOUSES RICHARD & EDITHA NOGOY v BENJAMIN CO,
ENGR. DALE OLEA and THREE KINGS CONSTRUCTION & REALTY
CORPORATION

G.R. No. 174569

Facts: Petitioner China Banking Corporation sold a lot located at St.
Benedict Subdivision, Sindalan, San Fernando, Pampanga, which was
covered by Transfer Certificate of Title (TCT) No. 450216-R to petitionerspouses Joey and Mary Jeannie Castro (the Castro spouses). It sold two
other lots also located in the same place covered by TCT Nos. 450212-R
and 450213-R to petitioner-spouses Richard and Editha Nogoy (the Nogoy
spouses). The lots of the Castro spouses and the Nogoy spouses are
commonly bound on their southeastern side by Lot No. 3783-E, which is
covered by TCT No. 269758-R in the name of respondent Benjamin Co (Co)
and his siblings. Co and his siblings entered into a joint venture with
respondent Three Kings Construction and Realty
Corporation for the development of the Northwoods Estates, a subdivision
project covering Lot No. 3783-E and adjacent lots. For this purpose, they
contracted the services of respondent, Engineer Dale Olea. In 2003,
respondents started constructing a perimeter wall on Lot No. 3783-E. On
November 28, 2003, petitioners, through counsel, wrote respondents
asking them to stop constructing the wall, and remove all installed
construction materials and restore the former condition of Lot No. [3]783-E
which they (petitioners) claimed to be a road lot. They also claimed that the
construction obstructed and closed the only means of ingress and egress of
the Nogoy spouses and their family, and at the same time, caved in and
impeded the ventilation and clearance due the Castro spouses residential
house. Petitioners demand remained unheeded, prompting them to file
before the Regional Trial Court (RTC) of San Fernando, Pampanga a
complaint, docketed as Civil Case No. 12834, for injunction, restoration of
road lot/right of way and damages with prayer for temporary restraining
order and/or writ of preliminary injunction. Before respondents filed their
Answer, petitioners filed an Amended Complaint, alleging that the
construction of the perimeter wall was almost finished and thus modifying
their prayer for a writ of preliminary injunction to a writ of preliminary
mandatory injunction, After hearing petitioners application for a writ of
preliminary mandatory injunction, Branch 44 of the San Fernando,
Pampanga RTC denied the same, without prejudice to its resolution after
the trial of the case on the merits. Their Motion for Reconsideration having
been denied, petitioners filed a petition for certiorari before the Court of
Appeals which dismissed the same and denied their subsequent Motion for
Reconsideration
Issue: Whether the court erred in not granting the writ of preliminary
mandatory injunction
Ruling: No. Petitioners have no urgent and paramount need for a writ of
preliminary mandatory injunction to prevent irreparable damage, they are
not entitled to such writ.
It is settled that the grant of a preliminary mandatory injunction rests on
the sound discretion of the court, and the exercise of sound judicial
discretion by the lower court should not be interfered with except in cases
of manifest abuse. It is likewise settled that a court should avoid issuing a
writ of preliminary mandatory injunction which would effectively dispose of
the main case without trial. To be entitled to a writ of preliminary injunction,
however, the petitioners must establish the following requisites: (a) the
invasion of the right sought to be protected is material and substantial; (b)
the right of the complainant is clear and unmistakable; and (c) there is an
urgent and permanent necessity for the writ to prevent serious damage.

Since a preliminary mandatory injunction commands the performance of an

act, it does not preserve the status quo and is thus more cautiously
regarded than a mere prohibitive injunction. Accordingly, the issuance of a
writ
of preliminary mandatory injunction is justified only in a clear case, free
from doubt or dispute. When the complainants right is thus doubtful or
disputed, he does not have a clear legal right and, therefore, the issuance
of injunctive relief is improper.
In the case at bar, petitioners base their prayer for preliminary mandatory
injunction on Section 44 of Act No. 496 (as amended by Republic Act No.
440), Section 50 of Presidential Decree 1529, and their claim that Lot No.
3783-E is a road lot. The best evidence thus that Lot No. 3783-E is a road
lot would be a memorandum to that effect annotated on the certificate of
title covering it. Petitioners presented TCT No. 185702-R covering Lot No.
3783-E in the name of Sunny Acres Realty Management Corporation which
states that the registration is subject to the restrictions imposed by Section
44 of Act 496, as amended by Rep. Act No. 440.The annotation does not
explicitly state, however, that Lot No. 3783-E is a road lot. Further, the
findings of the lower court are still given much weight, their ocular
inspection showed that [petitioners] will not lose access to their residences.
As a matter of fact, lot 3783-E is not being used as an access road to their
residences and there is an existing secondary road within St. Benedict
Subdivision that serves as the main access road to the highway.With
respect to the blocking of ventilation and light of the residence of the Sps.
Castro, suffice it to state that they are not deprived of light and ventilation.
The perimeter wall of the defendants is situated on the left side of the
garage and its front entrance is still open and freely accessible.
TEODORO C. BORLONGAN, JR., CORAZON M. BEJASA, ARTURO E.
MANUEL, JR., ERIC L. LEE, P. SIERVO H. DIZON, BENJAMIN DE LEON,
DELFIN C. GONZALES, JR., and BEN YU LIM, JR. v
MAGDALENO M. PEA and
HON. MANUEL Q. LIMSIACO, JR., as Judge Designate of the
Municipal Trial Court in Cities, Bago City
Facts:
Respondent Atty. Magdaleno M. Pea instituted a civil case for recovery of
agents compensation and expenses, damages, and attorneys fees against
Urban Bank and herein petitioners, before the Regional Trial Court (RTC) of
Negros Occidental, Bago City. Atty. Pea anchored his claim for
compensation on the Contract of Agency allegedly entered into with the
petitioners, wherein the former undertook to perform such acts necessary
to prevent any intruder and squatter from unlawfully occupying Urban
Banks property located along Roxas Boulevard, Pasay City. Petitioners filed
a Motion to Dismiss a rguing that they never appointed the respondent as
agent or counsel. Attached to the motion were the following documents: 1)
Letter dated 19 December 1994 signed by Herman Ponce and Julie Abad on
behalf of Isabela Sugar Company, Inc. (ISCI), the original owner of the
subject property; 2) Unsigned Letter dated 7 December 1994 addressed to
Corazon Bejasa from Marilyn G. Ong; 3) Letter dated 9 December 1994
addressed to Teodoro Borlongan, Jr. and signed by Marilyn G. Ong; 4)
Memorandum dated 20 November 1994 from Enrique Montilla III.
Said documents were presented in an attempt to show that the respondent
was appointed as agent by ISCI and not by Urban Bank or by the petitioner.

Atty. Pea filed his Complaint-Affidavit with the Office of the City Prosecutor,
Bago City. He claimed that said documents were falsified because the
alleged signatories did not actually affix their signatures, and the
signatories were neither stockholders nor officers and employees of ISCI.
Worse, petitioners introduced said documents as evidence before the RTC
knowing that they were falsified. September 24, 1998, the City Prosecutor
found probable cause for the indictment of petitioners for four (4) counts of
the crime of Introducing Falsified Documents, penalized by the second
paragraph of Article 172 of the Revised Penal Code. The City Prosecutor
concluded that the documents were falsified because the alleged
signatories untruthfully stated that ISCI was the principal of the respondent;
that petitioners knew that the documents were falsified considering that
the signatories were mere dummies; and that the documents formed part
of the record of Civil Case No. 754 where they were used by petitioners as
evidence in support of their motion to dismiss, and then adopted in their
answer and in their Pre-Trial Brief. On 1 October 1998, petitioners filed an
Omnibus Motion to Quash, Recall Warrants of Arrest and/or For
Reinvestigation. P etitioners insisted that they were denied due process
because of the non-observance of the proper procedure on preliminary
investigation prescribed in the Rules of Court. Specifically, they claimed
that they were not afforded the right to submit their counter-affidavit. Then
they argued that since no such counter-affidavit and supporting documents
were submitted by the petitioners, the trial judge merely relied on the
complaint-affidavit and attachments of the respondent in issuing the
warrants of arrest, also in contravention with the Rules of Court. In an Order
dated 13 November 1998, the MTCC denied the omnibus motion primarily
on the ground that preliminary investigation was not available in the
instant case which fell within the jurisdiction of the
first-level court. The court, likewise, upheld the validity of the warrant of
arrest, saying that it was issued in accordance with the Rules of Court.
Besides, the court added, petitioners could no longer question the validity
of the warrant since they already posted bail. The court also believed that
the issue involved in the civil case was not a prejudicial question, and, thus,
denied the prayer for suspension of the criminal proceedings. Lastly, the
court was convinced that the Information contained all the facts necessary
to constitute an offense. Petitioners immediately instituted a special civil
action for Certiorari and Prohibition with Prayer for Writ of Preliminary
Injunction and Temporary Restraining Order (TRO) before the Court of
Appeals, ascribing grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the MTCC in issuing and not recalling the warrants
of arrest, reiterating the arguments in their omnibus motion. They, likewise,
questioned the courts conclusion that by posting bail, petitioners already
waived their right to assail the validity of the warrants of arrest.
Issue: Whether or not the allegations in the complaint-affidavit do not
establish probable cause, should the prosecutor dismiss the complaint, or
require the respondent to submit his counter-affidavit?
Ruling: NO, Under this Rule, while probable cause should first be
determined before an information may be filed in court, the prosecutor is
not mandated to require the respondent to submit his counter-affidavits to
oppose the complaint. In the determination of probable cause, the
prosecutor may solely rely on the complaint, affidavits and other
supporting documents submitted by the complainant. If he does not find
probable cause, the prosecutor may dismiss outright the complaint or if he
finds probable cause or sufficient reason to proceed with the case, he shall

issue a resolution and file the corresponding information. The purpose of

the mandate of the judge to first determine probable cause for the arrest of
the accused is to insulate from the very start those falsely charged with
crimes from the tribulations, expenses and anxiety of a public trial. The
Court may not be compelled to pass upon the correctness of the exercise of
the public prosecutors function without any showing of grave abuse of
discretion or manifest error in his findings. Considering, however, that the
prosecution and the court a quo committed manifest errors in their findings
of probable cause; this Court therefore annuls their findings.
On the foregoing discussion, we find that the Court of Appeals erred in
affirming the findings of the prosecutor as well as the court a quo as to the
existence of probable cause. The criminal complaint against the petitioners
should be dismissed. The petition is hereby G RANTED. The Temporary
Restraining Order dated 2 August 2000 is hereby made permanent.
JESUS LIM ARRANZA et al vs B.F. HOMES, INC.
GR No. 131683 June 19, 2000
Facts: Respondent BFHI is a domestic corporation engaged in developing
subdivisions and selling residential lots. BFHI filed with the SEC a petition
for rehabilitation and a declaration that it was in a state of suspension of
payments. A receiver was appointed and a Revised Rehabilitation Plan
approved by SEC. Petitioners filed with the HLURB a class suit "for and in
behalf of the more than 7,000 homeowners in the subdivision" against
respondent "to enforce the rights of purchasers of lots" in BF Homes
Paranaque. Petitioners charged respondent with failing to comply with its
contractual obligations relative to the subdivisions development. BFHI
claimed that petitioners were precluded from instituting the instant action
on account of Section 6(c) of P.D. No. 902~A providing for the suspension of
all actions for claims against a corporation under receivership. Respondent
interposed counterclaims and prayed for the dismissal of the complaint.
The HLURB issued a 20~day temporary restraining order to avoid rendering
nugatory and ineffectual any judgment that could be issued in the case;
and subsequently, an Order granting petitioners prayer for preliminary
injunction was issued. Respondent thus filed with the Court of Appeals a
petition for certiorari and prohibition. It contended in the main that the
HLURB acted "completely without jurisdiction" in issuing the Order granting
the writ of preliminary injunction considering that inasmuch as respondent
is under receivership, the "subject matter of the case is one exclusively
within the jurisdiction of the SEC." The CA rendered a decision annulling
and setting aside the writ of preliminary injunction issued by the HLURB. It
ruled that private respondents action may properly be regarded as a
"claim" within the contemplation of PD No. 902~A which should be placed
on equal footing with those of petitioners other creditor or creditors and
which should be filed with the Committee of Receivers.
Issue: Whether it is the SEC or the HLURB has jurisdiction over the
complaint
Ruling: In the cases that reached this Court, the ruling has consistently
been that the NHA or the HLURB has jurisdiction over complaints arising
from contracts between the subdivision developer and the lot buyer or
those aimed at compelling the subdivision developer to comply with its
contractual and statutory obligations to make the subdivision a better place
to live in. In the case at bar, petitioners complaint is for specific
performance to enforce their rights as purchasers of subdivision lots as

regards rights of way, water, open spaces, road and perimeter wall repairs,
and security. Indisputably then, the HLURB has jurisdiction over the
complaint. The fact that respondent is under receivership does not divest
the HLURB of that jurisdiction. In this case where there appears to be no
restraints imposed upon respondent as it undergoes rehabilitation
receivership, respondent continues to exist as a corporation and hence,
continues or should continue to perform its contractual and statutory
responsibilities to petitioners as homeowners. No violation of the SEC order
suspending payments to creditors would result as far as petitioners
complaint before the HLURB is concerned. To reiterate, what petitioners
seek to enforce are respondents obligations as a subdivision developer.
Such claims are basically not pecuniary in nature although it could
incidentally involve monetary considerations.
In this case, under the complaint for specific performance before the
HLURB, petitioners do not aim to enforce a pecuniary demand. Their claim
for reimbursement should be viewed in the light of respondents alleged
failure to observe its statutory and contractual obligations to provide
petitioners a "decent human settlement" and "ample opportunities for
improving their quality of life." The HLURB, not the SEC, is equipped with
the expertise to deal with that matter.
This case is REMANDED to the HLURB for continuation of proceedings with
dispatch as the SEC proceeds with the rehabilitation of respondent through
the Board of Receivers.
PHILIPPINE TRUST CO. v FRANCISCO SANTAMARIA, Judge of the
Court of First Instance of Iloilo, and F. M.
YAPTICO & CO., LTD
G.R. No. 31951 September 4, 1929
Facts: There are two civil cases filed before CFI Ilo-Ilo against F. M. Yaptico
& Co., Ltd.. Both judgement was rendered in favor of petitioner. Petitioner
asked for an execution of the judgment pending the appeal to SC, which
was denied, and that after the cases were affirmed by SC, it again asked for
an execution of judgments. The petitioner then applied to the court for the
appointment of a receiver upon the ground that F. M. Yaptico & Co., Ltd.,
was fraudulently putting its property beyond the reach of its creditor and
the petitioner in particular. After a hearing, that motion was denied, and the
lower court suspended the execution of the judgment of the judgments for
four months. Hence, this petition for mandamus.
Issue: Whether the lower court committed grave abuse of discretion in
suspending the writ of execution.
Ruling: Yes. The SC found that the lower court exceeded its jurisdiction in
suspending the execution for the period of four months and ordered the
lower court to appoint a receiver for F. M. Yaptico & Co., Ltd., to protect and
preserve its property and assets for the use and benefit of its creditors and
in particular this petitioner. After a final judgment has been rendered in this
court, in particular or even in the Court of First Instance, it is the duty of the
court to enforce the judgment according to its terms, and no court has the
power to suspend an execution issued on the final judgment, except as to
matters and things which may have arisen after the rendition of the
judgment, and which would be a valid defense.
It is true that the court retains a certain amount of control over a writ of

execution even after it leaves its hands, but such control is limited and
regulated by such fairly definite rules of law and is not unrestricted. A writ
of execution may thus be quashed when it appears that it has been
improvidently issued, or that it is defective in substance, or is issued
against the wrong party, or that the judgment debt has been paid, or when
the writ has been issued without authority, etc. But the writ had not been
recalled by reason of any defense which could not been made at the time
of the trial of the case, nor can the recall be made so as to practically
change the terms of a judgment which has become final.