Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 142983

November 26, 2014

SOLIDBANK CORPORATION, Petitioner,

vs.
GOYU & SONS, INC., GO SONG HIAP, BETTY CHIU SUK YING, NG CHING KWOK, YEUNG SHUK HING, AND THEIR RESPECTIVE
SPOUSES, and MALAY AN INSURANCE COMPANY, INC., Respondents.
RIZAL COMMERCIAL BANKING CORPORATION, Respondent (Intervenor),
DECISION
LEONARDO-DE CASTRO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Resolutions of the Court, of Appeals dated June
23, 19971 and April 28, 20002 in CA-G.R. CV No. 51894, which required petitioner Solidbank Corporation (SOLIDBANK) to restitute with legal
interest the amount withdrawn by SOLIDBANK from the fire insurance proceeds deposited in custodia legis with the Regional Trial Court
(RTC) of Manila.
Respondent Goyu & Sons, Inc. (GOYU), with individual respondents Go Song Hiap, Betty Chiu Suk Ying, Ng Ching Kwok, and Yeung Shuk
Hing as guarantors (INDIVIDUAL GUARANTORS), incurred various obligations to SOLIDBANK in connection with the financing of GOYU's
business as exporter of solid doors. Said obligations were presented by SOLIDBANK through the following exhibits before the trial court:
Exhibit KK P37,277,134.61
Exhibit FF and GG P1,093,124.71
Exhibit II P423,129.17
Exhibit JJ P900,000.003
As additional security, GOYU obtained several fire insurance policies issued by respondent Malayan Insurance Company, Inc. (MICO). On
January 10, 1992 and February 11, 1992, respectively, GOYU endorsed two of these policies in favor of SOLIDBANK to answer for all the
obligations incurred by GOYU to SOLIDBANK.4 The two fire insurance policies are particularly described as follows:
POLICY NO.

AMOUNT

DATE ISSUED

EXPIRY DATE

ACIA/F-114-07402

P 32,252,125.29

9/16/91

10/19/92

CIA/F-114-07525

P 6,603,586.43

11/20/91

12/05/925

The endorsements of the above policies bear the conformity of MICOs agent.
On April 27, 1992, fire gutted oneof the buildings of GOYU. GOYU filed a claim for indemnity with MICO, which was, however, denied by the
latter on the ground that the insurance policies were the subject of writs of attachment issued by various courts or otherwise claimed by other
creditors of GOYU. Respondent-Intervenor Rizal Commercial Banking Corporation (RCBC), one of GOYUs creditors, also filed with MICO a
claim for the proceeds of GOYUs insurance policies, including fire insurance policy numbers F-114-07402 and F-114-07525. RCBC claims
that the insurance policies in question were purchased by GOYU pursuant to the terms and conditions of the mortgage executed by GOYU to
ensure the payment of its obligations with RCBC. MICO likewise denied RCBCs claims on the same ground.
On April 6, 1993, GOYU filed against MICO, RCBC, and two RCBC officers a complaint for specific performance and damages in the RTC of
Manila. The complaint was docketed as Civil Case No. 93-65442 and raffled to Branch 3of said court. The complaint prayed, among other
things, that MICO be ordered topay GOYU the total amount of P74,040,518.50 representing ten insurance policies it secured from MICO
including fire insurance policy numbers F-114-07402 and F-114-07525.
In the meantime, SOLIDBANK filed an action for collection of sum of money with prayer for a writof preliminary attachment, also with the RTC
of Manila, which was docketed as Civil Case No. 92-62749, and raffled to Branch 14 of said court, against GOYU, the INDIVIDUAL
GUARANTORS with their spouses, and MICO.
The subsequent developments on Civil Cases No. 93-65442 and 92-62749 are chronicled separately for simplification.

Civil Case No. 93-65442 (complaint

for specific performance and
damages filed by GOYU against
MICO, RCBC and RCBC officers
in the RTC of Manila, Branch 3)
(redocketed on appeal as CA-G.R.
CV No. 46162)
On October 12, 1993, Branch 3 of the RTC of Manila issued an interlocutory order requiring the proceeds of GOYUs ten insurance policies
(including fire insurance policy numbers F-114-07402 and F-114-07525) to be deposited with the said court,less P14,938,080.23 (which were
the subject of writs of attachment from various courts in connection with claims from GOYUs other creditors, namely Urban Bank, Alfredo
Sebastian, and Philippine Trust Company). Pursuant thereto, MICO deposited on January 7, 1994 the amount ofP50,505,594.60.
On June 29, 1994, the RTC rendered judgment in a favor of GOYU and ordered its clerk of court "to release immediately to [GOYU] the
amount of P50,000,000.00 deposited with the Court by [MICO], together with all the interests earned thereon." The dispositive portion of the
decision read:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff [GOYU] and against the defendants, Malayan Insurance Company, Inc.
and Rizal Commercial Banking Corporation, ordering the latter as follows:
1. For defendant Malayan Insurance Co., Inc.:
a. To pay [GOYU] its fire loss claims in the total amount of P74,040,518.58 less the amount ofP50,000,000.00 which is
deposited with this Court;
b. To pay [GOYU] damages byway of interest for the duration of the delay since July 27, 1992 (ninety days after defendant
insurers receipt of the required proof of loss and notice of loss) at the rate of twice the ceiling prescribed by the Monetary
Board, on the following amounts:
1) P50,000,000.00 from July 27, 1992 up to the time said amount was deposited with this Court on January
7, 1994;
2) P24,040,518.58 from July 27, 1992 up to the time when the writs of attachment were received by
defendant Malayan;
2. For defendant Rizal Commercial Banking Corporation:
a. To pay [GOYU] actual and compensatory damages in the amount of P2,000,000.00;
3. For both defendants Malayan and RCBC:
a. To pay [GOYU], jointly and severally, the following amounts:
1) P1,000,000.00 as exemplary damages;
2) P1,000,000.00 as, and for, attorneys fees;
3) Costs of suit
and on the Counterclaim of defendant RCBC, ordering [GOYU] to pay its loan obligations with defendant RCBC in the amount
of P68,785,069.04, as of April 27, 1992, with interest thereon at the rate stipulated in the respective promissory notes (without
surcharges and penalties) per computation, pp. 14-A, 14-B & 14-C.
FURTHER, the Clerk of Court of the Regional Trial Court of Manila is hereby ordered to release immediately to [GOYU] the amount
of P50,000,000.00 deposited with this Court by defendant Malayan, together with all the interest earned thereon. 6
GOYU, MICO, and RCBC filed separate appeals which were consolidated with the Court of Appeals. MICO and RCBC contested their liability
to GOYU, while GOYU was unsatisfied by the amounts awarded. The Court of Appeals, in its Decision dated December 18, 1996, increased
the amounts awarded to GOYU:
WHEREFORE, the decision of the lower court dated June 29, 1994 is hereby modified as follows:
1. FOR DEFENDANT MALAYAN INSURANCE CO., INC.:
a) To pay [GOYU] its fire loss claim in the total amount of P74,040,518.58 less the amount ofP50,505,594.60 (per O.R.
No. 3649285) plus deposited in court and damages by way of interest commencing July 27, 1992 until the time [GOYU]

receives the said amount at the rate of thirty-seven (37%) percent per annum which is twice the ceiling prescribed by the
Monetary Board.
2. FOR DEFENDANT RIZAL COMMERCIAL BANKING CORPORATION:
a) To pay [GOYU] actual and compensatory damages in the amount of P5,000,000.00.
3. FOR DEFENDANTS MALAYAN INSURANCE CO., INC., RIZAL COMMERCIAL BANKING CORPORATION, UY CHUN BING
AND ELI D. LAO:
a) To pay [GOYU] jointly and severally the following amounts:
1. P1,500,000.00 as exemplary damages;
2. P1,500,000.00 as and for attorney's fees.
4. And on RCBCs Counterclaim, ordering the plaintiff Goyu & Sons, Inc. to pay its loan obligation with RCBC in the amount
of P68,785,069.04 as of April 27, 1992 without any interest, surcharges and penalties.
The Clerk of Court of the Regional Trial Court of Manila is hereby ordered to immediately release to Goyu & Sons, Inc. the amount
of P50,505,594.60 (per O.R. No. 3649285) deposited with it by Malayan Insurance Co., Inc., together with all the interests thereon. 7
The case eventually reached this Court on petitions by RCBC and MICO, which were docketed as G.R. Nos. 128833, 128834 and 128866. On
April 20, 1998, this Court rendered its Decision in the consolidated cases, reversing the Decision of the Court of Appeals by ordering, among
other things, the Clerk of Court to release the amount of P50,505,594.60 including the interests earned to RCBC instead of GOYU:
WHEREFORE, the petitions are hereby GRANTED and the decision and resolution of December 16, 1996 and April 3, 1997 in CAG.R. CV No
46164 are hereby REVERSED and SET ASIDE, and a new one entered:
1. Dismissing the Complaint ofprivate respondent GOYU in Civil Case No. 93-65442 before Branch 3 of the Manila Regional Trial
Court for lack of merit;
2. Ordering Malayan Insurance Company, Inc. to deliver to Rizal Commercial Banking Corporation the proceeds of the insurance
policies in the amount of P51,862,390.94 (per report of adjuster Toplis & Harding [Far East], Inc., Exhibits "2" and "2-1"), less the
amount of P50,505,594.60 (per O.R. No. 3649285);
3. Ordering the Clerk of Court to release the amount of P50,505,594.60 including the interests earned to Rizal Commercial Banking
Corporation;
4. Ordering Goyu & Sons, Inc. to pay its loan obligation with Rizal Commercial Banking Corporation in the principal amount
of P107,246,887.90, with interest at the respective rates stipulated in each promissory note from January 21, 1993 until finality of
this judgment, and surcharges at 2% and penalties at 3% from January 21, 1993 to March 9, 1993, minus payments made by
Malayan Insurance Company, Inc. and the proceeds of the amount deposited withthe trial court and its earned interest. The total
amount due RCBC at the time of the finality of this judgment shall earn interest at the legal rate of 12% in lieu of all other stipulated
interests and charges until fully paid.
The petition of Rizal Commercial Banking Corporation against the respondent Court in CA-G.R. CV [No.] 48376 is DISMISSED for being moot
and academic in view of the results herein arrived at. Respondent Sebastians right as attaching creditor must yield to the preferential rights of
Rizal Commercial Banking Corporation over the Malayan insurance policies as first mortgagee. 8
Civil Case No. 92-62749 (action for
collection of sum of money with
prayer for a writ of preliminary
attachment filed by SOLIDBANK
against GOYU, INDIVIDUAL
GUARANTORS and their spouses,
and MICO in the RTC of Manila,
Branch 14) (redocketed on appeal as
CA-G.R. CV No. 51894)
On November 16, 1993, RCBC filed a Motion for Intervention, claiming that the two insurance policies in question were purchased by GOYU
pursuant to the terms and conditions of the mortgage executed by GOYU to ensure the payment of its obligations with RCBC. The RTC
denied the motion in an Order dated March 15, 1995 on the ground that RCBCs rights may be fully protected in a separate proceeding, in
particular, Civil Case No. 93-65442.
On March 28, 1995, RCBC filed a Notice of Appeal with the RTC, assailing the denial of its Motion for Intervention. 9
On November 28, 1995, the RTC rendered its Decision in favor of SOLIDBANK, the dispositive portion of which reads:

WHEREFORE, and in view of the foregoing considerations, judgment is hereby rendered ordering defendants Goyu and Sons, Inc., Go Song
Hiap, Betty Chiu Suk Ying, NgChing Kwok, Yeung Shuk Hing to pay jointly and severally to plaintiff [SOLIDBANK] the following amounts:
a. On the first up to the thirteenth causes of action, the sum of P34,321,677.94 plus interest and other charges from 15 August
1992, until fully paid;
b. On the thirty-first causeof action, the sum of P1,278,044.97 plus interest and other charges from 15 August 1992, until fully paid;
c. On the thirty-second causeof action, the sum of P491,252.97 plus interest and other charges from 15 August 1992, until fully paid;
d. On the thirty-third cause ofaction, the sum of P112,868.44 plus interest and other charges from 15 August 1992 until fully paid;
e. On the thirty-fouth cause ofaction, the sum of P121,135.85 plus interests and other charges from 15 August 1992 until fully paid;
f. On the thirty-fifth cause of action, the sum of P951,154.44 plus interest and other charges from15 August 1992 until fully paid; and
g. P20,000.00 as and for attorneys fees and the costs of the suit.
The counterclaim of Goyu is herebydismissed for lack of merit.
Ordering Malayan to pay to[SOLIDBANK] P9,828,305.07 with legal rate of interest from this date until the full amount is paid.
The counterclaim of Malayan is likewise dismissed for lack of merit. 10
The RTC ruled that the endorsements in the two insurance policies made SOLIDBANK the beneficiary in the said policies. 11
On December 14, 1995, SOLIDBANK filed a Motion for Execution Pending Appeal. MICO, GOYU, and SOLIDBANK thereafter filed separate
Notices of Appeal with the RTC. Civil Case No. 92-62749 in Branch 14 of the RTC of Manila was redocketed on appeal as CA-G.R. CV No.
51894.
On December 28, 1995, SOLIDBANK filed a Motion for Execution against all defendants except MICO. 12 On January 23, 1996, the RTC
ordered that "a writ of execution issue for the enforcement of the Decision with respect to all the defendants except Malayan." 13 On the same
day, a writ of execution was issued by Sheriff Conrado Bejar of the RTC of Manila. On February 5, 1996, said sheriff served a Notice of
Garnishment to the Clerk of Court of the RTC of Manilarequesting the delivery of the amount of P23,070,730.83 to said sheriff to be applied to
the partial satisfaction of the Writ of Execution issued in Civil Case No. 92-62749.14 On February 8, 1996, SOLIDBANK withdrew the
amountof P22,493,682.58 as evidenced by the Disbursement Voucher issued therefor.15
On June 5, 1996, RCBC filed with the Court of Appeals in CA-G.R. CV No. 51894 an Urgent Motion for Restitution and toCite Solidbank
Corporation, its President, Deogracias N.Vistan, Sheriff Conrado L. Bejar, and Atty. Jennifer H. DelaCruz-Buendia in Contempt of Court. RCBC
claims that SOLIDBANK has no legal right or authority to implement the writ of execution and notice of garnishment in Civil Case No. 9262749 by withdrawingP22,493,682.58 from the P50,505,594.60 deposited by MICO pursuant to a court order in Civil Case No. 93-65442 and
docketed on appeal as CA-G.R. CV No. 46162. RCBC claims that SOLIDBANK and its impleaded officers refusal to cause the restitution of
the amount withdrawn constitutes unlawful interference withthe proceedings of the court.16 On the other hand, SOLIDBANK and its impleaded
officers filed a motion, among other things, to declare RCBC in contempt for forum shopping and for failure to disclose that RCBCs attempt to
intervene had been denied by the trial court.
On November 6, 1996, the Court ofAppeals rendered its Resolution on various motions filed by the parties, ordering thus:
WHEREFORE, premises considered, the Court hereby DENIES the urgent motion of RCBC for restitution and to cite Solidbank Corporation,
its President, and the court officers in contempt of court for lack of merit. Movant-intervenor RCBC and its counsels are hereby admonished
against engaging in forum-shopping and WARNED that a repetition of the same or similar acts will be dealt with more severely. No costs. 17
According to the appellate court, SOLIDBANK had the legal authority to withdraw the amount by virtue of the final and executory judgment
rendered in its favor by Branch 14 of the RTC of Manila in Civil Case No. 92-62749. RCBC cannot complain about said withdrawal, not only
because it was not a party to said case, but also because its motion to intervene was denied by the RTC.18
RCBC filed a Motion for Reconsideration of the November 6, 1996 Resolution of the Court of Appeals.
On June 23, 1997, the Court of Appeals issued the first assailed Resolution setting aside its November 6, 1996 Resolution and ordering
SOLIDBANK to restitute the amount withdrawn by it with interest. The falloof the June 23, 1997 Resolution reads:
WHEREFORE, premises considered, the Court hereby resolves to reconsider and set aside its resolution of November 6, 1996. The Court
hereby orders plaintiff-appellant Solidbank Corporation to restitute to the Clerk of Court of the Regional Trial Court of Manila the sum
of P22,493,862.58, including legal interest thereon until actual and full restitution subject to the outcome of Civil Case No. 93-65442 entitled
"Goyu & Sons, Inc. v. Malayan Insurance Company, Inc., Rizal Commercial Banking Corporation" redocketed on appeal as CA-G.R. CV No.
46162. Further, the Court denies intervenor-appellant RCBCs motion to cite Solidbank Corporation, its President Deogracias M. Vistan, Sheriff
Conrado L. Bejar and Atty. Jennifer H. Dela Cruz-Buendia in contempt of court for lack of merit. The Court denies consolidation of the instant

case with CA-G.R. CV No. 46162 for being moot and academic. Finally, the Court denies the appeal ofdefendant Goyu & Sons, Inc., et al. for
having been filed out of time.19
The Court of Appeals accordingly reversed itself and ruled this time that no court, other than the one having jurisdiction over the properties in
custodia legis, has a right to interfere withand change possession over the same.20 Consequently, it is the court inCivil Case No. 93-65442
(redocketed on appeal as CA-G.R. CV No. 46162) which has jurisdiction over the properties in custodia legis. The Court of Appeals noted that
it does not appear that said court has issued an Order allowing the withdrawal by SOLIDBANK. 21
SOLIDBANK filed an Omnibus Motion seeking reconsideration of the June 23, 1997 Resolution of the Court of Appeals. During the interim
period, this Court issued the aforesaid Decision in G.R. Nos. 128833, 128834 and 128866 dated April 20, 1998, which ordered, among other
things, the Clerk of Court to release the amount ofP50,505,594.60 including the interests earned to RCBC instead of GOYU.
On April 28, 2000, the Court of Appeals, taking judicial notice of the Decision of this Court dated April 20, 1998, issued the second assailed
Resolution, the falloof which reads:
WHEREFORE, PREMISES CONSIDERED, plaintiff-appellant Solidbanks Omnibus Motion (For Partial Reconsideration and for Contempt)
dated July 14, 1997 is Denied.
The Resolution dated June 23, 1997 is hereby Amended accordingly and plaintiff-appellant Solidbank is Ordered to fully Restitute the principal
amount of P23,070,730.83 and P14,206,403.78 to the Clerk of Court of the Regional Trial Court of Manila, together with legal interest thereon
until actual and full restitution.
Plaintiff-appellant Solidbanks Opposition and Omnibus Motion dated June 29, 1999 is also hereby Denied.
The Motion to Cite Solidbank, Sheriff Conrado L. Bejar, and Attys. Jesusa Maningas and Jennifer Buendia in contempt of Court and to cite
intervenor RCBC incontempt of Court for forum shopping, is likewise Denied.
Corrollarily, Intervenor-appellant RCBC is hereby Ordered to file [its] brief within thirty (30) days from receipt of this Order.22
SOLIDBANK filed the present petition assailing the Resolutions of the Court of Appeals in CA-G.R. CV No. 51894 dated June 23, 1997 and
April 28, 2000 on the following grounds:
I
THE HONORABLE COURT OF APPEALS DEPARTED FROM ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDING IN
ALLOWING RCBC TO INTERVENE IN THE APPEALED CASE AND IN ADMITTING RCBCS INTERVENTION DESPITE THE FACT THAT
RCBC IS NOT A PARTY TO CIVIL CASE NO. 92-62749 (THE COLLECTION CASE) AND SHOULD HAVE REMANDED RCBCS CLAIM TO
THE COURT BELOW FOR RECEPTION OF ITS EVIDENCE.
II
THE HONORABLE COURT OF APPEALS HAD SANCTIONED A DEPARTURE FROM ACCEPTED AND USUAL COURSE OF
PROCEEDING WHEN IT ORDERED PETITIONER TO FULLY RESTITUTE THE FUNDS IT HAD WITHDRAWN, THUS REVERSING ITS
PREVIOUS RESOLUTION HOLDING THAT PETITIONER SOLIDBANK HAS THE LEGAL AUTHORITY TO WITHDRAW THE AMOUNT
OF P22,493,682.58 BY VIRTUE OF THE FINAL AND EXECUTORY JUDGMENT.
III
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT TOOK JUDICIAL NOTICE OF THE FINAL AND EXECUTORY
DECISION OF THE SUPREME COURT IN G.R. NOS. 128[8]33, 128[8]34 AND 128866 WHICH ITORDERED THE CLERK OF COURT OF
THE REGIONAL TRIAL COURT OF MANILA TO RELEASE THE TOTAL PRINCIPAL AMOUNT OF P50,505,594.60 TO RCBC DESPITE THE
FACT THAT PETITIONER SOLIDBANK WAS NOT A PARTY THERETO, HENCE, IT COULD NOT BE BOUND BY THE SAID JUDGMENT.
IV
THE HONORABLE COURT OF APPEALS DEPARTED FROM ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDING WHEN IT
ORDERED FULL RESTITUTION BY PETITIONER SOLIDBANK DESPITE THE FACT THAT IT IS MERELY A COMPLETION COURT, AND
THATTHE APPELLATE COURT SHOULD HAVE RE-RAFFLED THIS CASE FOR STUDY AND REPORT.
V
THE HONORABLE COURT OF APPEALS DEPARTED FROM ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDING WHEN IT
REVERSED ITS PREVIOUS RULING THAT RCBC AND ITS COUNSEL HAD ENGAGED IN FORUM SHOPPING. 23
Propriety of the Petition for Review on Certiorari by SOLIDBANK

This Court has, on several occasions, held that a petition for review on certiorari is not the proper remedy for interlocutory orders. A resolution
which does not completely dispose of the case on the merits is merely an interlocutory order and, in accordance with Section 1, Rule 41 of the
Rules of Court, no appeal may be taken therefrom.24
The assailed Court of Appeals Resolutions dated June 23, 1997 and April 28, 2000 in CA-G.R. CV No. 51894, which required SOLIDBANK to
restitute with legal interest the amount withdrawn by it from the fire insurance proceeds deposited in custodia legis with the RTC of Manila, are
very clearly merely interlocutory orders, as they do not dispose of the appeals by Solidbank, GOYU, and MICOon the merits. Accordingly, a
petition for review on certiorari is not the proper remedy. Instead, where the assailed interlocutory order is patently erroneous and the remedy
of appeal would not afford adequate and expeditious relief, the Court allows certiorarias a mode of redress. 25 As it stands, the petition for
review of SOLIDBANK is the wrong remedy and perforce should be dismissed.
On considerations of equity and liberality, this Court can treat the present petition as a Petition for Certiorari filed under Rule 65. Certiorari,
however, requires not a mere error injudgment, but a grave abuse of discretion amounting to lack of or excess of jurisdiction. We shall now
proceed to determine whether the appellate court committed grave abuse of discretion in issuing the assailed Resolutions.
Right of RCBC to intervene in Civil Case No. 92-62749
SOLIDBANK claims that the Court of Appeals committed a grave reversible error in allowing RCBC to intervene in the assailed June 23, 1997
Resolution. SOLIDBANK argues that RCBC has no legal, actual and immediate interest in the matter in litigation in Civil Case No. 92-62749
on the ground that the funds withdrawn by SOLIDBANK exclusively belong to it. Assuming arguendo that intervention by RCBC is proper,
SOLIDBANK maintains that the case should be remanded to the lower court for reception of evidence.26
We disagree with the postulations of SOLIDBANK. This Court cannot pass upon the conflicting rights of SOLIDBANK and RCBC with respect
to the insurance proceeds as this is nota review of the Decision in the meritsof either CA-G.R. CV No. 46162 (appeal of Civil Case No. 9365442) or CA-G.R. CV No. 51894 (appeal of Civil Case No. 92-62749), but is a review of merely an interlocutory order in the latter case. The
trial courts disallowance of RCBCs intervention in the trial on the merits in Civil Case No. 92-62749 is of no moment. The issue in the case at
bar is the propriety of the implementation of the writ of execution and notice of garnishment in Civil Case No. 92-62749 by SOLIDBANKs
withdrawal from the amount deposited pursuant to a court order in Civil Case No. 93-65442. RCBCs right to intervene inCA-G.R. CV No.
51894 (the appeal of Civil Case No. 92-62749) stems from itsright as a party, and now a judgment creditor, in Civil Case No. 93-65442, the
case where the funds executed on was in custodia legis. Accordingly, neither this Court, nor the lower court (in SOLIDBANKs proposed
remanding of the case), should receive new evidence on the conflicting rights of SOLIDBANK and RCBC with respect to the insurance
proceeds.
Right of SOLIDBANK to withdraw from the amount in custodia legis in Civil Case No. 93-65442
When the proceeds of fire insurance policy numbers F-114-07402 and F-114-07525 were placed under custodia legis of Branch 3 of the RTC
of Manila in Civil Case No. 93-65442,27 they were placed under the sole control of such court beyond the interference ofall other co-ordinate
courts. We have held that property attached orgarnished by a court falls into the custodia legisof that court for the purposes of that civil case
only. Any relief against such attachment and the execution and issuance of a writ of possession that ensued subsequently could be disposed
of only in that case.28
This long-standing jurisprudence was applied in 2002 in Yau v. The Manila Banking Corporation. 29 In said case, Esteban Yau was the
judgment creditor of Ricardo Silverio by virtue of the final and executory decision of the RTC of Cebu in Civil Case No. CEB-2058. Yau learned
that the only asset of Silverio that can be found for the satisfaction of the judgment was his proprietary membership share in the Manila Golf
and Country Club (Manila Golf), which was already subject to a prior levy on preliminary attachment obtained by Manila Banking Corporation
(Manilabank) in Civil Case Nos. 90-513 and 90-271 in the RTC of Makati. The sheriff in the Cebu case nevertheless levied on the Siverio
share. Yau emerged as the highest bidder at the public auction sale and the corresponding Certificate of Sale was issued in his name. When
Manila Golf refused Yaus request to be issued a certificate of proprietary membership share, Yau filed a motion in Civil Case No. CEB-2058 to
direct such issuance, which was granted by the RTC of Cebu. Without filing a motion for reconsideration, Manilabank filed a Petition for
Certiorari with the Court of Appeals. The Court of Appeals granted the petition and nullified the Order of the RTC of Cebu. This Court, in
affirming the Decision of the Court of Appeals, held that the Order of the RTC of Cebu was a patent nullity:
This Court has settled that as a general rule, the filing of a motion for reconsideration is a condition sine qua nonin order that certiorari shall lie.
However, there are settled exceptions to this Rule, one of which is where the assailed order is a patent nullity, as where the court a quohas no
jurisdiction, which is evident in this case.
The Notice of Garnishment of the Silverio share upon Manila Golf brought the property into the custodia legis of the court issuing the writ, that
is, the RTC Makati City Branch 64, beyond the interference of all other co-ordinate courts, such asthe RTC of Cebu, Branch 6. "The
garnishment of property operates as an attachment and fastens upon the property a lien by which the property is brought under the jurisdiction
of the court issuing the writ. It is brought into custodia legis, under the sole control of such court. A court which has control of such property,
exercises exclusive jurisdiction over the same, retains all incidents relative to the conduct of such property. No court, except one having
supervisory control or superior jurisdiction in the premises, has a right to interfere with and change that possession." 30 (Citations omitted.)
In the case at bar, therefore, the order to deposit the proceeds of fire insurance policy numbers F-114-07402 and F-114-07525 brought the
amount garnished into the custodia legis of the court issuing said order, that is, the RTC of Manila, Branch 3, beyond the interference of all
other coordinate courts, such as the RTC of Manila, Branch 14. Accordingly, just as the sheriff in Yauwas found to have improperly levied on
the garnished share in Manila Golf, the act of the sheriff in Civil Case No. 92-62749 in the case at bar in levying on the deposited insurance
proceeds was likewise a patent nullity. Citing Parco v. Court of Appeals,31 we further held in Yau that while jurisdiction is vested in the court and
not in any particular branch or judge:
[A]s a corollary rule, the various branches of the Court of First Instance [now RTC] of a judicial district are a coordinate and co-equal courts
[where] one branch stands on the same level as the other. Undue interference by one on the proceedings and processes of another is

prohibited by law. In the language of this Court, the various branches of the Court of First Instance of a province or city, having as they have
the same or equal authority and exercising as they do concurrent and coordinate jurisdiction should not, cannot, and are not permitted to
interfere with their respective cases, much less with their orders or judgments. 32
We further note that the October 12, 1993 Order of Branch 3 directing MICO to deposit with the court the proceeds of the 10 fire insurance
policies even explicitly provided:
WHEREFORE, defendant Malayan Insurance Corp., Inc., is hereby directed to deposit in Court the proceeds for the ten (10) fire insurance
policies purchased from them by plaintiff, to wit:
xxxx
9. Policy No. F-114-07402
10. Policy No. F-114-07525.
after deducting the amount of P14,938,085.23 therefrom, immediately upon receipt of this order, withdrawal of which shall not be allowed
except upon order of this court.
Whatever legal fees is required relative to this deposit shall be deducted from the interest of the amount deposited upon withdrawal of the
same.33 (Emphasis supplied.)
In what appears to be an attempt to mislead this Court, SOLIDBANK furthermore argues34 that the Court of Appeals completely disregarded
the certification issued by MICO which stated that "[s]aid amount of Php 23,070,730.83 forms part of the above-listed sums deposited in
custodia legis x x x awaiting final judgment in Civil Case No. 92-62749, RTC-Manila Br. 14."35 There is no question that the funds were
deposited in court pursuant to the Order of Branch 3 of the RTC of Manila in Civil Case No. 93-65442.36 SOLIDBANK does not dispute this
fact, nor even claim that the funds were deposited pursuant to an order of Branch14 in Civil Case No. 92-62749.
Finally, SOLIDBANK assails the April 28, 2000 Resolution of the Court of Appeals for taking judicial notice of the Decision of this Court in G.R.
Nos. 128833, 128834 and 128866, arguing that SOLIDBANK is not a party thereto and should not be bound by the judgment therein.1wphi1
Far from making SOLIDBANK bound by the judgment in Civil Case No. 93-65442 (CA-G.R. CV No. 46162 in the Court of Appeals; G.R. Nos.
128833, 128834 and 128866 in this Court), the Court of Appeals in CA-G.R. CV No. 51894 (Civil Case No. 92-62749 in the trial court) actually
strictly enforced the delineation of the two cases when it found the levy in Civil Case No. 92-62749 of the garnished insurance proceeds in
Civil Case No. 93-65442 to be improper and ordered the restitution of the amount withdrawn by SOLIDBANK. As discussed above,
SOLIDBANK has no right to withdraw from the amount in custodia legis in Civil Case No. 93-65442, not because SOLIDBANK is bound by the
judgment therein (which it is not), but precisely because it is not a party .in said case. The property garnished is under the sole control of the
court in Civil Case No. 93-65442 for the purposes of that civil case only. This is true as long as the property remains in custodia legis in Civil
Case No. 93-65442, regardless of even whether this Court has rendered a Decision in the appeal of said case.
In view of all the foregoing, we find that the Court of Appeals was not in error, much less in grave abuse of discretion, when it found the levy in
Civil Case No. 92-62749 of the garnished insurance proceeds in Civil Case No. 93-65442 to be improper and ordered the restitution of the
amount withdrawn by SOLIDBANK. Accordingly, the present petition should be denied.
WHEREFORE, the present Petition for Review on Certiorari under Rule 45 of the Rules of Court is DENIED for lack of merit. The Resolutions
of the Court of Appeals dated June 23, 1997 and April 28, 2000 in CA-G.R. CV No. 51894 are hereby AFFIRMED.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 180882

February 27, 2013

THE BAGUIO REGREENING MOVEMENT, INC., represented by ATTY. ERDOLFO V. BALAJADIA; ENVIRONMENT MANAGEMENT CITY
AND PARKS OFFICE, represented by its Officer-in Charge, Cordelia C. Lacsamana; and THE BUSOL FOREST RESERVATION TASK
FORCE, represented by its Team Leader, Victor Dictag, Petitioners,
vs.
ATTY. BRAIN MASWENG, in his capacity as Regional Hearing Officer, NCIP-CAR; ELIZABETH MAT-AN, for herself and as
representative of the heirs of Rafael; JUDITH MARANES, for herself and as representative of the heirs of Molintas; HELEN LUBOS,
for herself and as representative of the heirs of Kalomis; MAGDALENA GUMANGAN QUE, for herself and as representative of the
heirs of Gumangan; Spouses ALEXANDER AMPAGUEY and LUCIA AMPAGUEY; and Spouses CARMEN PANA YO and MELANIO
PANAYO, Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Revised Rule on Civil Procedure assailing the Decision 1 of the Court of Appeals
dated April 30, 2007 in CA-G.R. SP No. 78570 insofar as it affirmed the issuances of National Commission on Indigenous Peoples (NCIP)
Hearing Officer Brain Masweng, and the Resolution of the same court dated December 11, 2007 denying petitioners Motion for Partial
Reconsideration.
Herein private respondents Elizabeth Mat-an, Judith Maranes, Helen Lubos, Magdalena Gumangan Que, spouses Alexander and Lucia
Ampaguey, and spouses Melanio and Carmen Panayo, claiming that their parents inherited from their ancestors several parcels of land in
what is now known as the Busol Watershed Reservation, filed before the NCIP a Petition for Injunction, with an application for a Temporary
Restraining Order (TRO), and thereafter a Writ of Preliminary Injunction seeking to enjoin the Baguio District Engineers Office, the Office of
the City Architect and Parks Superintendent, and petitioners The Baguio Regreening Movement, Inc. and the Busol Task Force from fencing
the Busol Watershed Reservation.
In their Petition before the NCIP, private respondents claim that they are members of the Ibaloi and Kankanaey tribes of Baguio City. Their
ancestors ownership of the properties now known as the Busol Watershed Reservation was allegedly expressly recognized in Proclamation
No. 15 issued by Governor General Leonard Wood. As owners of said properties, their ancestors paid the realty taxes thereon. The fencing
project of petitioners would allegedly impede their access to and from their residences, farmlands and water sources, and dispossess them of
their yard where tribal rituals and ceremonies are usually held.
On October 21, 2002, NCIP Regional Hearing Officer Brain S. Masweng issued a TRO, the dispositive portion of which reads:
WHEREFORE, finding the petition in order and that grave injustice may result should the acts complained of be not immediately restrained, a
Temporary Restraining Order is hereby issued pursuant to Section 69 (d) of R.A. 8371, ordering the respondents namely, the Baguio District
Engineers Office, represented by Engineer Nestor M. Nicolas, the Project Contractor, Mr. Pel-ey, the Baguio Regreening Movement Inc.,
represented by Atty. Erdolfo V. Balajadia, the Busol Task Force, represented by its Team Leader, Moises G. Anipew, the Baguio City Architect
and Parks Superintendent Office, represented by Arch. Ignacio Estipona, and all persons acting for and their behalf (sic) of the respondents,
their agents and/or persons whomever acting for and their behalf (sic), to refrain, stop, cease and desist from fencing and/or constructing
fences around and between the areas and premises of petitioners, ancestral land claims, specifically identified in Proclamation No. 15 as Lot
"A" with an area of 143,190 square meters, included within the boundary lines, Lot "B" 77,855 square meters, included within the boundary
lines, Lot "C" 121,115 square meters, included within the boundary lines, Lot "D" 33,839 square meters, included within the boundary lines, Lot
"E" 87,903 square meters, included within the boundary lines, Lot "F" 39,487 square meters, included within the boundary lines, Lot "G"
11,620 square meters, included within the boundary lines, Lot "H" 17,453 square meters, included within the boundary lines, Lot "J" 40,000
square meters, included within the boundary lines, all described and embraced under Proclamation No. 15, the land embraced and described
under the approved plan No. 12064 of the then Director of Lands, containing an area of 186, square meters surveyed for Gumangan, the land
covered by LRC PSD 52910, containing an area of 77,849 square meters as surveyed for Emily Kalomis, that land covered by survey plan
11935 Amd, containing an area of 263153 square meters as surveyed for Molintas, and that land covered by AP-7489, containing an area of
155084 as surveyed for the heirs of Rafael.
This Restraining Order shall be effective for a period of twenty (20) days from receipt hereof.
Meantime, the respondents are further ordered to show cause on November 5, 2002 (Tuesday) at 2:00 oclock in the afternoon, why
petitioners prayer for the issuance of a writ of preliminary injunction should not be granted. 2
On November 6, 2002, Atty. Masweng denied petitioners motion to dissolve the TRO, explaining that a TRO may be issued motu
proprio where the matter is of extreme urgency and the applicant will suffer grave injustice and irreparable injury. He further stated that
petitioners failed to comply with the procedure laid down in Section 6, Rule 58 of the Rules of Court.

On November 12, 2002, Atty. Masweng issued an Order, the dispositive portion of which states:
WHEREFORE, a writ of preliminary injunction is hereby issued against the respondents, their agents, or persons acting for and in their
behalves (sic), ordering them to refrain, cease and desist from implementing their fencing project during the pendancy (sic) of the
aboveentitled case in any portion of petitioners ancestral land claims within the Busol Watershed Reservation. The lands being identified
under Proclamation No. 15 as lot[s] A, B, C, D, E, F, G, H, and J, including the lands covered by Petitioners approved survey plans
as follows: that land identified and plotted under Survey Plan No. B.L. FILE No. II-11836, September, 1916 surveyed for Gumangan; that land
covered by PSD-52910, May, 1921, surveyed for Emily Kalomis; that land covered by survey plan II-11935 Amd, 1916, surveyed for Molintas;
and that land covered by Survey Plan No. AP 7489, March 1916, surveyed for the heirs of Rafael.
The writ of preliminary injunction shall be effective and shall be enforced only upon petitioners compliance with the required injunctive bond of
Twenty Thousand Pesos (P20,000.00) each in compliance with Section 3, R.A. 8975.3
Atty. Masweng ruled that the NCIP has jurisdiction over all claims and disputes involving rights of Indigenous Cultural Communities (ICCs) and
Indigenous Peoples (IPs) and, in the exercise of its jurisdiction, may issue injunctive writs. According to Atty. Masweng, the allegations in the
verified petition show that private respondents invoked the provisions of Republic Act No. 8371, otherwise known as the Indigenous Peoples
Rights Act of 1997 (IPRA), when they sought to enjoin petitioners from fencing their ancestral lands within the Busol Watershed Reservation.
Petitioners fencing project violated Section 58 of the IPRA, which requires the prior written consent of the affected ICCs/IPs. The NCIP
therefore has authority to hear the petition filed by private respondents and to issue the injunctive writ. As regards petitioners contention that
the issuance of the TRO violated Presidential Decree No. 1818, Atty. Masweng applied the Decision of this Court in Malaga v. Penachos,
Jr.,4 and held that:
Respondents project of fencing the Busol Watershed is not in the exercise of administrative discretion involving a very technical matter. This is
so since the implementation of the fencing project would traverse along lands occupied by people who claim that they have a legal right over
their lands. The fence would actually cut across, divide, or segregate lands occupied by people. The effect of it would fence in and fence out
property claims. In this case, petitioners invoke their constitutional rights to be protected against deprivation of property without due process of
law and of taking private property without just compensation. Such situations involve pure question of law.5
As regards the invocation of res judicata by petitioners, Atty. Masweng held that they failed to present copies of the Decisions supposedly
rendered by the Regional Trial Court and the Supreme Court.
On November 29, 2002, petitioners filed a Motion for Reconsideration of the above Order. On June 20, 2003, Atty. Masweng denied said
Motion on the ground that the same was filed out of time.
Petitioners filed before the Court of Appeals a Petition for Certiorari, alleging grave abuse of discretion on the part of Atty. Masweng in issuing
the TRO and the writ of preliminary injunction.
On April 30, 2007, the Court of Appeals rendered its Decision dismissing petitioners Petition for Certiorari. The dispositive portion of the
Decision is as follows:
WHEREFORE, premises considered, the instant petition is DISMISSED and the assailed orders of public respondent AFFIRMED.
Nevertheless, private respondents are hereby enjoined from (i) introducing constructions at the Busol Watershed and Forest Reservation and
(ii) engaging in activities that degrade the resources therein until viable measures or programs for the maintenance, preservation and
development of said reservation are adopted pursuant to Sec. 58 of Rep. Act No. 8371.6
The Court of Appeals ruled that since the petition before the NCIP involves the protection of private respondents rights to their ancestral
domains in accordance with Section 7(b), (c) and (g)7 of the IPRA, the NCIP clearly has jurisdiction over the dispute pursuant to Section 66.
The Court of Appeals also upheld the conclusion of Atty. Masweng that the NCIP can issue injunctive writs as a principal relief against acts
adversely affecting or infringing on the rights of ICCs or IPs, because "(t)o rule otherwise would render NCIP inutile in preventing acts
committed in violation of the IPRA."8
As regards petitioners allegations that government reservations such as the subject Busol Watershed cannot be the subject of ancestral
domain claims, the Court of Appeals pointed out that Section 589 of the IPRA in fact mandates the full participation of ICCs/IPs in the
maintenance, management, and development of ancestral domains or portions thereof that are necessary for critical watersheds. The IPRA,
thus, gives the ICCs/IPs responsibility to maintain, develop, protect, and conserve such areas with the full and effective assistance of
government agencies.10
Despite ruling in favor of private respondents, the Court of Appeals nevertheless found merit in petitioners own application for injunction and
observed that certain activities by private respondents without regard for environmental considerations could result in irreparable damage to
the watershed and the ecosystem. Thus, the Court of Appeals enjoined private respondents from introducing constructions at the Busol
Watershed and from engaging in activities that degrade its resources, until viable measures or programs for the maintenance, preservation
and development of said reservation are adopted pursuant to the aforementioned Section 58 of the IPRA.
Hence, the present Petition for Review wherein petitioners assert the following grounds:

1. THE COURT OF APPEALS GRAVELY AND PATENTLY ERRED IN SUSTAINING THE NCIPS ISSUANCE OF A TEMPORARY
RESTRAINING ORDER AND WRIT OF PRELIMINARY INJUNCTION DESPITE CLEAR AND PATENT VIOLATION OF P.D. 1818,
SUPREME COURT CIRCULAR NO. 68-94 AND SUPREME COURT ADMINISTRATIVE CIRCULAR NO. 11-2000;
2. THE COURT OF APPEALS GRAVELY AND PATENTLY ERRED IN AFFIRMING THE ACT OF THE NCIP IN ISSUING A 20-DAYS
TEMPORARY RESTRAINING ORDER EX PARTE SANS THE MANDATORY NOTICE AND HEARING FOR THE ISSUANCE
THEREOF;
3. THE COURT OF APPEALS GRAVELY AND PATENTLY ERRED IN SUSTAINING THE NCIPS ISSUANCE OF A WRIT OF
PRELIMINARY INJUNCTION DESPITE ABSOLUTE ABSENCE OF CLEAR, UNMISTAKABLE AND POSITIVE LEGAL RIGHTS ON
THE PART OF THE APPLICANTS;
4. THE COURT OF APPEALS GRAVELY AND PATENTLY ERRED IN HOLDING THAT THE NCIP HEARING OFFICER HAS
JURISDICTION OVER A CASE OF INJUNCTION INVOLVING A GOVERNMENT INFRASTRUCTURE PROJECT;
5. THE COURT OF APPEALS PATENTLY AND GRAVELY ERRED IN BRUSHING ASIDE SECTION 78, A SPECIAL PROVISION
OF REPUBLIC ACT 8371 WHICH EXCLUDES THE CITY OF BAGUIO FROM THE COVERAGE OF ANCESTRAL LAND CLAIMS
APPLICATIONS;
6. THE COURT OF APPEALS GRAVELY AND PATENTLY ERRED IN UPHOLDING RULE XIII OF THE IMPLEMENTING RULES
OF REPUBLIC ACT 8371, EVEN IF THE PROVISIONS OF SAID RULE XIII CLEARLY OVERSTEPPED AND EXCEEDED
SECTION 78 OF R.A. 8371.11
TRO and Preliminary Injunction against Government Infrastructure Projects
The governing law as regards the prohibition to issue restraining orders and injunctions against government infrastructure projects is Republic
Act No. 8975,12 which modified Presidential Decree No. 1818, the law cited by the parties, upon its effectivity on November 26, 2000. 13 Section
9 of Republic Act No. 8975 provides:
Section 9. Repealing Clause. All laws, decrees, including Presidential Decree Nos. 605, 1818 and Republic Act No. 7160, as amended,
orders, rules and regulations or parts thereof inconsistent with this Act are hereby repealed or amended accordingly.
Thus, in GV Diversified International, Incorporated v. Court of Appeals,14 we ruled that Presidential Decree No. 1818 have been effectively
superseded by Republic Act No. 8975. The prohibition is thus now delineated in Section 3 of said latter law, which provides:
Section 3. Prohibition on the Issuance of Temporary Restraining Orders, Preliminary Injunctions and Preliminary Mandatory Injunctions. No
court, except the Supreme Court, shall issue any temporary restraining order, preliminary injunction or preliminary mandatory injunction
against the government, or any of its subdivisions, officials or any person or entity, whether public or private, acting under the governments
direction, to restrain, prohibit or compel the following acts:
(a) Acquisition, clearance and development of the right-of-way and/or site or location of any national government project;
(b) Bidding or awarding of contract/project of the national government as defined under Section 2 hereof;
(c) Commencement, prosecution, execution, implementation, operation of any such contract or project;
(d) Termination or rescission of any such contract/project; and
(e) The undertaking or authorization of any other lawful activity necessary for such contract/project.
This prohibition shall apply to all cases, disputes or controversies instituted by a private party, including but not limited to cases filed by bidders
or those claiming to have rights through such bidders involving such contract/project. This prohibition shall not apply when the matter is of
extreme urgency involving a constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable injury
will arise. The applicant shall file a bond, in an amount to be fixed by the court, which bond shall accrue in favor of the government if the court
should finally decide that the applicant was not entitled to the relief sought.
If after due hearing the court finds that the award of the contract is null and void, the court may, if appropriate under the circumstances, award
the contract to the qualified and winning bidder or order a rebidding of the same, without prejudice to any liability that the guilty party may incur
under the existing laws. (Emphasis supplied.)
Should a judge violate the preceding section, Republic Act No. 8975 provides the following penalty:

Section 6. Penal Sanction. In addition to any civil and criminal liabilities he or she may incur under existing laws, any judge who shall issue
a temporary restraining order, preliminary injunction or preliminary mandatory injunction in violation of Section 3 hereof, shall suffer the penalty
of suspension of at least sixty (60) days without pay. (Emphasis added.)
It is clear from the foregoing provisions that the prohibition covers only judges, and does not apply to the NCIP or its hearing officers. In this
respect, Republic Act No. 8975 conforms to the coverage of Presidential Decree No. 605 15 and Presidential Decree No. 1818,16 both of which
enjoin only the courts. Accordingly, we cannot nullify the assailed Orders on the ground of violation of said laws.
The Courts Previous Decision in G.R. No. 180206
On February 4, 2009, this Court promulgated its Decision in G.R. No. 180206, a suit which involved several of the parties in the case at bar. In
G.R. No. 180206, the City Mayor of Baguio City issued three Demolition Orders with respect to allegedly illegal structures constructed by
private respondents therein on a portion of the Busol Forest Reservation. Private respondents filed a Petition for Injunction with the NCIP. Atty.
Masweng issued two temporary restraining orders directing the City Government of Baguio to refrain from enforcing said Demolition Orders
and subsequently granted private respondents application for a preliminary injunction. The Court of Appeals, acting on petitioners Petition
for Certiorari, affirmed the temporary restraining orders and the writ of preliminary injunction.
This Court then upheld the jurisdiction of the NCIP on the basis of the allegations in private respondents Petition for Injunction. It was similarly
claimed in said Petition for Injunction that private respondents were descendants of Molintas and Gumangan whose claims over the portions
of the Busol Watershed Reservation had been recognized by Proclamation No. 15. This Court thus ruled in G.R. No. 180206 that the nature of
the action clearly qualify it as a dispute or controversy over ancestral lands/domains of the ICCs/IPs. 17 On the basis of Section 69(d)18 of the
IPRA and Section 82, Rule XV19 of NCIP Administrative Circular No. 1-03, the NCIP may issue temporary restraining orders and writs of
injunction without any prohibition against the issuance of the writ when the main action is for injunction. 20
On petitioners argument that the City of Baguio is exempt from the provisions of the IPRA and, consequently, the jurisdiction of the NCIP, this
Court ruled in G.R. No. 180206 that said exemption cannot ipso facto be deduced from Section 7821 of the IPRA because the law concedes
the validity of prior land rights recognized or acquired through any process before its effectivity.22
Lastly, however, this Court ruled that although the NCIP has the authority to issue temporary restraining orders and writs of injunction, it was
not convinced that private respondents were entitled to the relief granted by the Commission.23 Proclamation No. 15 does not appear to be a
definitive recognition of private respondents ancestral land claim, as it merely identifies the Molintas and Gumangan families as claimants of a
portion of the Busol Forest Reservation, but does not acknowledge vested rights over the same. 24 Since it is required before the issuance of a
writ of preliminary injunction that claimants show the existence of a right to be protected, this Court, in G.R. No. 180206, ultimately granted the
petition of the City Government of Baguio and set aside the writ of preliminary injunction issued therein.1wphi1
In the case at bar, petitioners and private respondents present the very same arguments and counter-arguments with respect to the writ of
injunction against the fencing of the Busol Watershed Reservation. The same legal issues are thus being litigated in G.R. No. 180206 and in
the case at bar, except that different writs of injunction are being assailed. In both cases, petitioners claim (1) that Atty. Masweng is prohibited
from issuing temporary restraining orders and writs of preliminary injunction against government infrastructure projects; (2) that Baguio City is
beyond the ambit of the IPRA; and (3) that private respondents have not shown a clear right to be protected. Private respondents, on the other
hand, presented the same allegations in their Petition for Injunction, particularly the alleged recognition made under Proclamation No. 15 in
favor of their ancestors. While res judicatadoes not apply on account of the different subject matters of the case at bar and G.R. No. 180206
(they assail different writs of injunction, albeit issued by the same hearing officer), we are constrained by the principle of stare decisis to grant
the instant petitiOn. The Court explained the principle of stare decisis25in Ting v. Velez-Ting26:
The principle of stare decisis enjoins adherence by lower courts to doctrinal rules established by this Court in its final decisions. It is based on
the principle that once a question of law has been examined and decided, it should be deemed settled and closed to further argument.
Basically, it is a bar to any attempt to relitigate the same issues, necessary for two simple reasons: economy and stability. In our jurisdiction,
the principle is entrenched in Article 8 of the Civil Code. (Citations omitted.)
We have also previously held that "under the doctrine of stare decisis, once a court has laid down a principle of law as applicable to a certain
state of facts, it will adhere to that principle and apply it to all future cases where the facts are substantially the same." 27
However, even though the principal action in the case at bar is denominated as a petition for injunction, the relief prayed for and granted by the
NCIP partakes of the nature of a preliminary injunction in the sense that its effectivity would cease the moment the NCIP issues its decision in
an appropriate action. The conclusions of this Court in both the case at bar and that in G.R. No. 180206 as regards private respondents'
ancestral land claim should therefore be considered provisional, as they are based merely on the allegations in the complaint or petition and
not on evidence adduced in a full-blown proceeding on the merits by the proper tribunal. Private respondents are therefore not barred from
proving their alleged ancestral domain claim in the appropriate proceeding, despite the denial of the temporary injunctive relief prayed for.
WHEREFORE, the present Petition for Review on Certiorari is hereby GRANTED. The Decision and Resolution of the Court of Appeals in CAG.R. SP No. 78570 dated April 30, 2007 and December 11, 2007, respectively, are REVERSED and SET ASIDE.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 185734

July 3, 2013

ALFREDO C. LIM, JR., PETITIONER,

vs.
SPOUSES TITO S. LAZARO AND CARMEN T. LAZARO, RESPONDENTS.
RESOLUTION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the July 10, 2008 Decision2 and December 18, 2008 Resolution3 of the Court of Appeals
(CA) in CA-G.R. SP No. 100270, affirming the March 29, 2007 Order4 of the Regional Trial Court of Quezon City, Branch 223 (RTC), which
lifted the writ of preliminary attachment issued in favor of petitioner Alfredo C. Lim, Jr. (Lim, Jr.).
The Facts
On August 22, 2005, Lim, Jr. filed a complaint5 for sum of money with prayer for the issuance of a writ of preliminary attachment before the
RTC, seeking to recover from respondents-spouses Tito S. Lazaro and Carmen T. Lazaro (Sps. Lazaro) the sum of P2,160,000.00, which
represented the amounts stated in several dishonored checks issued by the latter to the former, as well as interests, attorneys fees, and
costs. The RTC granted the writ of preliminary attachment application6 and upon the posting of the required P2,160,000.00 bond,7 issued the
corresponding writ on October 14, 2005.8 In this accord, three (3) parcels of land situated in Bulacan, covered by Transfer Certificates of Title
(TCT) Nos. T-64940, T-64939, and T-86369 (subject TCTs), registered in the names of Sps. Lazaro, were levied upon. 9
In their Answer with Counterclaim,10 Sps. Lazaro averred, among others, that Lim, Jr. had no cause of action against them since: (a) Colim
Merchandise (Colim), and not Lim, Jr., was the payee of the fifteen (15) Metrobank checks; and (b) the PNB and Real Bank checks were not
drawn by them, but by Virgilio Arcinas and Elizabeth Ramos, respectively. While they admit their indebtedness to Colim, Sps. Lazaro alleged
that the same had already been substantially reduced on account of previous payments which were apparently misapplied. In this regard, they
sought for an accounting and reconciliation of records to determine the actual amount due. They likewise argued that no fraud should be
imputed against them as the aforesaid checks issued to Colim were merely intended as a form of collateral. 11 Hinged on the same grounds,
Sps. Lazaro equally opposed the issuance of a writ of preliminary attachment.12
Nonetheless, on September 22, 2006, the parties entered into a Compromise Agreement13 whereby Sps. Lazaro agreed to pay Lim, Jr. the
amount of P2,351,064.80 on an installment basis, following a schedule of payments covering the period from September 2006 until October
2013, under the following terms, among others: (a) that should the financial condition of Sps. Lazaro improve, the monthly installments shall
be increased in order to hasten the full payment of the entire obligation; 14 and (b) that Sps. Lazaros failure to pay any installment due or the
dishonor of any of the postdated checks delivered in payment thereof shall make the whole obligation immediately due and demandable.
The aforesaid compromise agreement was approved by the RTC in its October 31, 2006 Decision 15 and January 5, 2007 Amended Decision.16
Subsequently, Sps. Lazaro filed an Omnibus Motion,17 seeking to lift the writ of preliminary attachment annotated on the subject TCTs, which
the RTC granted on March 29, 2007.18 It ruled that a writ of preliminary attachment is a mere provisional or ancillary remedy, resorted to by a
litigant to protect and preserve certain rights and interests pending final judgment. Considering that the case had already been considered
closed and terminated by the rendition of the January 5, 2007 Amended Decision on the basis of the September 22, 2006 compromise
agreement, the writ of preliminary attachment should be lifted and quashed. Consequently, it ordered the Registry of Deeds of Bulacan to
cancel the writs annotation on the subject TCTs.

Lim, Jr. filed a motion for reconsideration19 which was, however, denied on July 26, 2007,20 prompting him to file a petition for certiorari21 before
the CA.
The CA Ruling
On July 10, 2008, the CA rendered the assailed decision,22 finding no grave abuse of discretion on the RTCs part. It observed that a writ of
preliminary attachment may only be issued at the commencement of the action or at any time before entry of judgment. Thus, since the
principal cause of action had already been declared closed and terminated by the RTC, the provisional or ancillary remedy of preliminary
attachment would have no leg to stand on, necessitating its discharge.23
Aggrieved, Lim, Jr. moved for reconsideration24 which was likewise denied by the CA in its December 18, 2008 Resolution.25
Hence, the instant petition.
The Issue Before the Court
The sole issue in this case is whether or not the writ of preliminary attachment was properly lifted.
The Courts Ruling
The petition is meritorious.
By its nature, preliminary attachment, under Rule 57 of the Rules of Court (Rule 57), is an ancillary remedy applied for not for its own sake but
to enable the attaching party to realize upon the relief sought and expected to be granted in the main or principal action; it is a measure
auxiliary or incidental to the main action. As such, it is available during its pendency which may be resorted to by a litigant to preserve and
protect certain rights and interests during the interim, awaiting the ultimate effects of a final judgment in the case. 26 In addition, attachment is
also availed of in order 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.27
In this relation, while the provisions of Rule 57 are silent on the length of time within which an attachment lien shall continue to subsist after the
rendition of a final judgment, jurisprudence dictates that the said lien continues until the debt is paid, or the sale is had under execution issued
on the judgment or until the judgment is satisfied, or the attachment discharged or vacated in the same manner provided by law.28
Applying these principles, the Court finds that the discharge of the writ of preliminary attachment against the properties of Sps. Lazaro was
improper.
Records indicate that while the parties have entered into a compromise agreement which had already been approved by the RTC in its
January 5, 2007 Amended Decision, the obligations thereunder have yet to be fully complied with particularly, the payment of the total
compromise amount of P2,351,064.80. Hence, given that the foregoing debt remains unpaid, the attachment of Sps. Lazaros properties
should have continued to subsist.
In Chemphil Export & Import Corporation v. CA,29 the Court pronounced that a writ of attachment is not extinguished by the execution of a
compromise agreement between the parties, viz:
Did the compromise agreement between Antonio Garcia and the consortium discharge the latters attachment lien over the disputed shares?
CEIC argues that a writ of attachment is a mere auxiliary remedy which, upon the dismissal of the case, dies a natural death. Thus, when the
consortium entered into a compromise agreement, which resulted in the termination of their case, the disputed shares were released from
garnishment.
We disagree. To subscribe to CEICs contentions would be to totally disregard the concept and purpose of a preliminary attachment.
xxxx
The case at bench admits of peculiar character in the sense that it involves a compromise agreement. Nonetheless, x x x. The parties to the
compromise agreement should not be deprived of the protection provided by an attachment lien especially in an instance where one reneges
on his obligations under the agreement, as in the case at bench, where Antonio Garcia failed to hold up his own end of the deal, so to speak.
xxxx
If we were to rule otherwise, we would in effect create a back door by which a debtor can easily escape his creditors. Consequently, we would
be faced with an anomalous situation where a debtor, in order to buy time to dispose of his properties, would enter into a compromise
agreement he has no intention of honoring in the first place. The purpose of the provisional remedy of attachment would thus be lost. It would
become, in analogy, a declawed and toothless tiger. (Emphasis and underscoring supplied; citations omitted)

In fine, the Court holds that the writ of preliminary attachment subject of this case should be restored and its annotation revived in the subject
TCTs, re-vesting unto Lim, Jr. his preferential lien over the properties covered by the same as it were before the cancellation of the said writ.
Lest it be misunderstood, the lien or security obtained by an attachment even before judgment, is in the nature of a vested interest which
affords specific security for the satisfaction of the debt put in suit. 30 Verily, the lifting of the attachment lien would be tantamount to an
abdication of Lim, Jr.s rights over Sps. Lazaros properties which the Court, absent any justifiable ground therefor, cannot allow.
WHEREFORE, the petition is GRANTED. The July 10, 2008 Decision and the December 18, 2008 Resolution of the Court of Appeals in CAG.R. SP No. 100270 are REVERSED and SET ASIDE, and the March 29, 2007 Order of the Regional Trial Court of Quezon City, Branch 223
is NULLIFIED. Accordingly, the trial court is directed to RESTORE the attachment lien over Transfer Certificates of Title Nos. T-64940, T64939, and T-86369, in favor of petitioner Alfredo C. Lim, Jr.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 203585

July 29, 2013

MILA CABOVERDE TANTANO and ROSELLER CABOVERDE, Petitioners,

vs.
DOMINALDA ESPINA-CABOVERDE, EVE CABOVERDE-YU, FE CABOVERDE-LABRADOR, and JOSEPHINE E.
CABOVERDE, Respondents.
DECISION
VELASCO, JR., J.:
The Case
Assailed in this petition for review under Rule 45 are the Decision and Resolution of the Court of Appeals (CA) rendered on June 25, 2012 and
September 21, 2012, respectively, in CA-G.R. SP. No. 03834, which effectively affirmed the Resolutions dated February 8, 20 I 0 and July 19,
2010 of the Regional Trial Court (RTC) of Sindangan, Zamboanga del Norte, Branch 11, in Civil Case No. S-760, approving respondent
Dominalda Espina-Caboverde's application for receivership and appointing the receivers over the disputed properties.
The Facts
Petitioners Mila Caboverde Tantano (Mila) and Roseller Caboverde (Roseller) are children of respondent Dominalda Espina-Caboverde
(Dominalda) and siblings of other respondents in this case, namely: Eve Caboverde-Yu (Eve), Fe Caboverde-Labrador (Fe), and Josephine E.
Caboverde (Josephine).
Petitioners and their siblings, Ferdinand, Jeanny and Laluna, are the registered owners and in possession of certain parcels of land, identified
as Lots 2, 3 and 4 located at Bantayan, Sindangan and Poblacion, Sindangan in Zamboanga del Norte, having purchased them from their
parents, Maximo and Dominalda Caboverde.1
The present controversy started when on March 7, 2005, respondents Eve and Fe filed a complaint before the RTC of Sindangan, Zamboanga
del Norte where they prayed for the annulment of the Deed of Sale purportedly transferring Lots 2, 3 and 4 from their parents Maximo and
Dominalda in favor of petitioners Mila and Roseller and their other siblings, Jeanny, Laluna and Ferdinand. Docketed as Civil Case No. S-760,
the case was raffled to Branch 11 of the court.
In their verified Answer, the defendants therein, including Maximo and Dominalda, posited the validity and due execution of the contested
Deed of Sale.
During the pendency of Civil Case No. S-760, Maximo died. On May 30, 2007, Eve and Fe filed an Amended Complaint with Maximo
substituted by his eight (8) children and his wife Dominalda. The Amended Complaint reproduced the allegations in the original complaint but
added eight (8) more real properties of the Caboverde estate in the original list.
As encouraged by the RTC, the parties executed a Partial Settlement Agreement (PSA) where they fixed the sharing of the uncontroverted
properties among themselves, in particular, the adverted additional eight (8) parcels of land including their respective products and
improvements. Under the PSA, Dominaldas daughter, Josephine, shall be appointed as Administrator. The PSA provided that Dominalda shall

be entitled to receive a share of one-half (1/2) of the net income derived from the uncontroverted properties. The PSA also provided that
Josephine shall have special authority, among others, to provide for the medicine of her mother.
The parties submitted the PSA to the court on or about March 10, 2008 for approval.2
Before the RTC could act on the PSA, Dominalda, who, despite being impleaded in the case as defendant, filed a Motion to Intervene
separately in the case. Mainly, she claimed that the verified Answer which she filed with her co-defendants contained several material
averments which were not representative of the true events and facts of the case. This document, she added, was never explained to her or
even read to her when it was presented to her for her signature.
On May 12, 2008, Dominalda filed a Motion for Leave to Admit Amended Answer, attaching her Amended Answer where she contradicted the
contents of the aforesaid verified Answer by declaring that there never was a sale of the three (3) contested parcels of land in favor of
Ferdinand, Mila, Laluna, Jeanny and Roseller and that she and her husband never received any consideration from them. She made it clear
that they intended to divide all their properties equally among all their children without favor. In sum, Dominalda prayed that the reliefs asked
for in the Amended Complaint be granted with the modification that her conjugal share and share as intestate heir of Maximo over the
contested properties be recognized.3
The RTC would later issue a Resolution granting the Motion to Admit Amended Answer.4
On May 13, 2008, the court approved the PSA, leaving three (3) contested properties, Lots 2, 3, and 4, for further proceedings in the main
case.
Fearing that the contested properties would be squandered, Dominalda filed with the RTC on July 15, 2008 a Verified Urgent
Petition/Application to place the controverted Lots 2, 3 and 4 under receivership. Mainly, she claimed that while she had a legal interest in the
controverted properties and their produce, she could not enjoy them, since the income derived was solely appropriated by petitioner Mila in
connivance with her selected kin. She alleged that she immediately needs her legal share in the income of these properties for her daily
sustenance and medical expenses. Also, she insisted that unless a receiver is appointed by the court, the income or produce from these
properties is in grave danger of being totally dissipated, lost and entirely spent solely by Mila and some of her selected kin. Paragraphs 5, 6, 7,
and 8 of the Verified Urgent Petition/Application for Receivership5(Application for Receivership) capture Dominaldas angst and
apprehensions:
5. That all the income of Lot Nos. 2, 3 and 4 are collected by Mila Tantano, thru her collector Melinda Bajalla, and solely
appropriated by Mila Tantano and her selected kins, presumably with Roseller E. Caboverde, Ferdinand E. Caboverde, Jeanny
Caboverde and Laluna Caboverde, for their personal use and benefit;
6. That defendant Dominalda Espina Caboverde, who is now sickly, in dire need of constant medication or medical attention, not to
mention the check-ups, vitamins and other basic needs for daily sustenance, yet despite the fact that she is the conjugal owner of
the said land, could not even enjoy the proceeds or income as these are all appropriated solely by Mila Tantano in connivance with
some of her selected kins;
7. That unless a receiver is appointed by the court, the income or produce from these lands, are in grave danger of being totally
dissipated, lost and entirely spent solely by Mila Tantano in connivance with some of her selected kins, to the great damage and
prejudice of defendant Dominalda Espina Caboverde, hence, there is no other most feasible, convenient, practicable and easy way
to get, collect, preserve, administer and dispose of the legal share or interest of defendant Dominalda Espina Caboverde except the
appointment of a receiver x x x;
xxxx
9. That insofar as the defendant Dominalda Espina Caboverde is concerned, time is of the utmost essence. She immediately needs
her legal share and legal interest over the income and produce of these lands so that she can provide and pay for her vitamins,
medicines, constant regular medical check-up and daily sustenance in life. To grant her share and interest after she may have
passed away would render everything that she had worked for to naught and waste, akin to the saying "aanhin pa ang damo kung
patay na ang kabayo."
On August 27, 2009, the court heard the Application for Receivership and persuaded the parties to discuss among themselves and agree on
how to address the immediate needs of their mother.6
On October 9, 2009, petitioners and their siblings filed a Manifestation formally expressing their concurrence to the proposal for receivership
on the condition, inter alia, that Mila be appointed the receiver, and that, after getting the 2/10 share of Dominalda from the income of the three
(3) parcels of land, the remainder shall be divided only by and among Mila, Roseller, Ferdinand, Laluna and Jeanny. The court, however,
expressed its aversion to a party to the action acting as receiver and accordingly asked the parties to nominate neutral persons. 7
On February 8, 2010, the trial court issued a Resolution granting Dominaldas application for receivership over Lot Nos. 2, 3 and 4. The
Resolution reads:

As regards the second motion, the Court notes the urgency of placing Lot 2 situated at Bantayan, covered by TCT No. 46307; Lot 3 situated at
Poblacion, covered by TCT No. T-8140 and Lot 4 also situated at Poblacion covered by TCT No. T-8140, all of Sindangan, Zamboanga del
Norte under receivership as defendant Dominalda Espina Caboverde (the old and sickly mother of the rest of the parties) who claims to be the
owner of the one-half portion of the properties under litigation as her conjugal share and a portion of the estate of her deceased husband
Maximo, is in dire need for her medication and daily sustenance. As agreed by the parties, Dominalda Espina Caboverde shall be given 2/10
shares of the net monthly income and products of the said properties.8
In the same Resolution, the trial court again noted that Mila, the nominee of petitioners, could not discharge the duties of a receiver, she being
a party in the case.9 Thus, Dominalda nominated her husbands relative, Annabelle Saldia, while Eve nominated a former barangay kagawad,
Jesus Tan.10
Petitioners thereafter moved for reconsideration raising the arguments that the concerns raised by Dominalda in her Application for
Receivership are not grounds for placing the properties in the hands of a receiver and that she failed to prove her claim that the income she
has been receiving is insufficient to support her medication and medical needs. By Resolution 11 of July 19, 2010, the trial court denied the
motion for reconsideration and at the same time appointed Annabelle Saldia as the receiver for Dominalda and Jesus Tan as the receiver for
Eve. The trial court stated:
As to the issue of receivership, the Court stands by its ruling in granting the same, there being no cogent reason to overturn it. As intimated by
the movant-defendant Dominalda Caboverde, Lots 2, 3 and 4 sought to be under receivership are not among those lots covered by the
adverted Partial Amicable Settlement. To the mind of the Court, the fulfilment or non-fulfilment of the terms and conditions laid therein
nonetheless have no bearing on these three lots. Further, as correctly pointed out by her, there is possibility that these Lots 2, 3, and 4, of
which the applicant has interest, but are in possession of other defendants who are the ones enjoying the natural and civil fruits thereof which
might be in the danger of being lost, removed or materially injured. Under this precarious condition, they must be under receivership, pursuant
to Sec. 1 (a) of Rule 59. Also, the purpose of the receivership is to procure money from the proceeds of these properties to spend for
medicines and other needs of the movant defendant Dominalda Caboverde who is old and sickly. This circumstance falls within the purview of
Sec. 1(d), that is, "Whenever in other cases it appears that the appointment of a receiver is the most convenient and feasible means of
preserving, administering, or disposing of the property in litigation."
Both Annabelle Saldia and Jesus Tan then took their respective oaths of office and filed a motion to fix and approve bond which was approved
by the trial court over petitioners opposition.
Undaunted, petitioners filed an Urgent Precautionary Motion to Stay Assumption of Receivers dated August 9, 2010 reiterating what they
stated in their motion for reconsideration and expressing the view that the grant of receivership is not warranted under the circumstances and
is not consistent with applicable rules and jurisprudence. The RTC, on the postulate that the motion partakes of the nature of a second motion
for reconsideration, thus, a prohibited pleading, denied it via a Resolution dated October 7, 2011 where it likewise fixed the receivers bond at
PhP 100,000 each. The RTC stated:
[1] The appointed receivers, JESUS A. TAN and ANNABELLE DIAMANTE-SALDIA, are considered duly appointed by this Court, not only
because their appointments were made upon their proper nomination from the parties in this case, but because their appointments have been
duly upheld by the Court of Appeals in its Resolution dated 24 May 2011 denying the herein defendants (petitioners therein) application for a
writ of preliminary injunction against the 8 February 2010 Resolution of this Court placing the properties (Lots 2, 3 and 4) under receivership
by the said JESUS A. TAN and ANNABELLE DIAMANTE-SALDIA, and Resolution dated 29 July 2011 denying the herein defendants
(petitioners therein) motion for reconsideration of the 24 May 2011 Resolution, both, for lack of merit. In its latter Resolution, the Court of
Appeals states:
A writ of preliminary injunction, as an ancillary or preventive remedy, may only be resorted to by a litigant to protect or preserve his rights or
interests and for no other purpose during the pendency of the principal action. But before a writ of preliminary injunction may be issued, there
must be a clear showing that there exists a right to be protected and that the acts against which the writ is to be directed are violative of the
said right and will cause irreparable injury.
Unfortunately, petitioners failed to show that the acts of the receivers in this case are inimical to their rights as owners of the property. They
also failed to show that the non-issuance of the writ of injunction will cause them irreparable injury. The court-appointed receivers merely
performed their duties as administrators of the disputed lots. It must be stressed that the trial court specifically appointed these receivers to
preserve the properties and its proceeds to avoid any prejudice to the parties until the main case is resolved, Hence, there is no urgent need
to issue the injunction.
ACCORDINGLY, the motion for reconsideration is DENIED for lack of merit.
SO ORDERED.
xxxx
WHEREFORE, premises considered, this Court RESOLVES, as it is hereby RESOLVED, that:
1. The defendants "Urgent Precautionary Motion to Stay Assumption of Receivers" be DENIED for lack of merit. Accordingly, it
being patently a second motion for reconsideration, a prohibited pleading, the same is hereby ordered EXPUNGED from the
records;

2. The "Motion to Fix the Bond, Acceptance and Approval of the Oath of Office, and Bond of the Receiver" of defendant Dominalda
Espina Caboverde, be GRANTED with the receivers bond set and fixed at ONE HUNDRED THOUSAND PESOS (PhP100,000.00)
each.12
It should be stated at this juncture that after filing their Urgent Precautionary Motion to Stay Assumption of Receivers but before the RTC could
rule on it, petitioners filed a petition for certiorari with the CA dated September 29, 2010 seeking to declare null and void the February 8, 2010
Resolution of the RTC granting the Application for Receivership and its July 19, 2010 Resolution denying the motion for reconsideration filed
by petitioners and appointing the receivers nominated by respondents. The petition was anchored on two grounds, namely: (1) noncompliance with the substantial requirements under Section 2, Rule 59 of the 1997 Rules of Civil
Procedure because the trial court appointed a receiver without requiring the applicant to file a bond; and (2) lack of factual or legal basis to
place the properties under receivership because the applicant presented support and medication as grounds in her application which are not
valid grounds for receivership under the rules.
On June 25, 2012, the CA rendered the assailed Decision denying the petition on the strength of the following premises and ratiocination:
Petitioners harp on the fact that the court a quo failed to require Dominalda to post a bond prior to the issuance of the order appointing a
receiver, in violation of Section 2, Rule 59 of the Rules of court which provides that:
SEC. 2. Bond on appointment of receiver.-- Before issuing the order appointing a receiver the court shall require the applicant to file a bond
executed to the party against whom the application is presented, in an amount to be fixed by the court, to the effect that the applicant will pay
such party all damages he may sustain by reason of the appointment of such receiver in case the applicant shall have procured such
appointment without sufficient cause; and the court may, in its discretion, at any time after the appointment, require an additional bond as
further security for such damages.
The Manifestation dated September 30, 2009 filed by petitioners wherein "they formally manifested their concurrence" to the settlement on the
application for receivership estops them from questioning the sufficiency of the cause for the appointment of the receiver since they
themselves agreed to have the properties placed under receivership albeit on the condition that the same be placed under the administration
of Mila. Thus, the filing of the bond by Dominalda for this purpose becomes unnecessary.
It must be emphasized that the bond filed by the applicant for receivership answers only for all damages that the adverse party may sustain by
reason of the appointment of such receiver in case the applicant shall have procured such appointment without sufficient cause; it does not
answer for damages suffered by reason of the failure of the receiver to discharge his duties faithfully or to obey the orders of the court,
inasmuch as such damages are covered by the bond of the receiver.
As to the second ground, petitioners insist that there is no justification for placing the properties under receivership since there was neither
allegation nor proof that the said properties, not the fruits thereof, were in danger of being lost or materially injured. They believe that the
public respondent went out of line when he granted the application for receivership for the purpose of procuring money for the medications
and basic needs of Dominalda despite the income shes supposed to receive under the Partial Settlement Agreement.
The court a quo has the discretion to decide whether or not the appointment of a receiver is necessary. In this case, the public respondent
took into consideration that the applicant is already an octogenarian who may not live up to the day when this conflict will be finally settled.
Thus, We find that he did not act with grave abuse of discretion amounting to lack or excess of jurisdiction when he granted the application for
receivership based on Section 1(d) of Rule 59 of the Rules of Court.
A final note, a petition for certiorari may be availed of only when there is no appeal, nor any plain, speedy and adequate remedy in the ordinary
course of law. In this case, petitioners may still avail of the remedy provided in Section 3, Rule 59 of the said Rule where they can seek for the
discharge of the receiver.
FOR REASONS STATED, the petition for certiorari is DENIED.
SO ORDERED.13
Petitioners Motion for Reconsideration was also denied by the CA on September 21, 2012. 14
Hence, the instant petition, petitioners effectively praying that the approval of respondent Dominaldas application for receivership and
necessarily the concomitant appointment of receivers be revoked.
The Issues
Petitioners raise the following issues in their petition:
(1) Whether or not the CA committed grave abuse of discretion in sustaining the appointment of a receiver despite clear showing
that the reasons advanced by the applicant are not any of those enumerated by the rules; and

(2) Whether or not the CA committed grave abuse of discretion in upholding the Resolution of the RTC and ruling that the
receivership bond is not required prior to appointment despite clear dictates of the rules.
The Courts Ruling
The petition is impressed with merit.
We have repeatedly held that receivership is a harsh remedy to be granted with utmost circumspection and only in extreme situations. The
doctrinal pronouncement in Velasco & Co. v. Gochico & Co is instructive:
The power to appoint a receiver is a delicate one and should be exercised with extreme caution and only under circumstances requiring
summary relief or where the court is satisfied that there is imminent danger of loss, lest the injury thereby caused be far greater than the injury
sought to be averted. The court should consider the consequences to all of the parties and the power should not be exercised when it is likely
to produce irreparable injustice or injury to private rights or the facts demonstrate that the appointment will injure the interests of others whose
rights are entitled to as much consideration from the court as those of the complainant.15
To recall, the RTC approved the application for receivership on the stated rationale that receivership was the most convenient and feasible
means to preserve and administer the disputed properties. As a corollary, the RTC, agreeing with the applicant Dominalda, held that placing
the disputed properties under receivership would ensure that she would receive her share in the income which she supposedly needed in
order to pay for her vitamins, medicines, her regular check-ups and daily sustenance. Considering that, as the CA put it, the applicant was
already an octogenarian who may not live up to the day when the conflict will be finally settled, the RTC did not act with grave abuse of
discretion amounting to lack or excess of jurisdiction when it granted the application for receivership since it was justified under Sec. 1(d), Rule
59 of the Rules of Court, which states:
Section 1. Appointment of a receiver. Upon a verified application, one or more receivers of the property subject of the action or proceeding
may be appointed by the court where the action is pending, or by the Court of Appeals or by the Supreme Court, or a member thereof, in the
following cases:
xxxx
(d) Whenever in other cases it appears that the appointment of a receiver is the most convenient and feasible means of preserving,
administering, or disposing of the property in litigation. (Emphasis supplied.)
Indeed, Sec. 1(d) above is couched in general terms and broad in scope, encompassing instances not covered by the other grounds
enumerated under the said section.16 However, in granting applications for receivership on the basis of this section, courts must remain
mindful of the basic principle that receivership may be granted only when the circumstances so demand, either because the property sought to
be placed in the hands of a receiver is in danger of being lost or because they run the risk of being impaired, 17 and that being a drastic and
harsh remedy, receivership must be granted only when there is a clear showing of necessity for it in order to save the plaintiff from grave and
immediate loss or damage.18
Before appointing a receiver, courts should consider: (1) whether or not the injury resulting from such appointment would probably be greater
than the injury ensuing if the status quo is left undisturbed; and (2) whether or not the appointment will imperil the interest of others whose
rights deserve as much a consideration from the court as those of the person requesting for receivership. 19
Moreover, this Court has consistently ruled that where the effect of the appointment of a receiver is to take real estate out of the possession of
the defendant before the final adjudication of the rights of the parties, the appointment should be made only in extreme cases. 20
After carefully considering the foregoing principles and the facts and circumstances of this case, We find that the grant of Dominaldas
Application for Receivership has no leg to stand on for reasons discussed below.
First, Dominaldas alleged need for income to defray her medical expenses and support is not a valid justification for the appointment of a
receiver. The approval of an application for receivership merely on this ground is not only unwarranted but also an arbitrary exercise of
discretion because financial need and like reasons are not found in Sec. 1 of Rule 59 which prescribes specific grounds or reasons for
granting receivership. The RTCs insistence that the approval of the receivership is justified under Sec. 1(d) of Rule 59, which seems to be a
catch-all provision, is far from convincing. To be clear, even in cases falling under such provision, it is essential that there is a clear showing
that there is imminent danger that the properties sought to be placed under receivership will be lost, wasted or injured.
Second, there is no clear showing that the disputed properties are in danger of being lost or materially impaired and that placing them under
receivership is most convenient and feasible means to preserve, administer or dispose of them.
Based on the allegations in her application, it appears that Dominalda sought receivership mainly because she considers this the best remedy
to ensure that she would receive her share in the income of the disputed properties. Much emphasis has been placed on the fact that she
needed this income for her medical expenses and daily sustenance. But it can be gleaned from her application that, aside from her bare
assertion that petitioner Mila solely appropriated the fruits and rentals earned from the disputed properties in connivance with some of her
siblings, Dominalda has not presented or alleged anything else to prove that the disputed properties were in danger of being wasted or
materially injured and that the appointment of a receiver was the most convenient and feasible means to preserve their integrity.

Further, there is nothing in the RTCs February 8 and July 19, 2010 Resolutions that says why the disputed properties might be in danger of
being lost, removed or materially injured while in the hands of the defendants a quo. Neither did the RTC explain the reasons which compelled
it to have them placed under receivership. The RTC simply declared that placing the disputed properties under receivership was urgent and
merely anchored its approval on the fact that Dominalda was an elderly in need of funds for her medication and sustenance. The RTC plainly
concluded that since the purpose of the receivership is to procure money from the proceeds of these properties to spend for medicines and
other needs of the Dominalda, who is old and sickly, this circumstance falls within the purview of Sec. 1(d), that is, "Whenever in other cases it
appears that the appointment of a receiver is the most convenient and feasible means of preserving, administering, or disposing of the
property in litigation."
Verily, the RTCs purported determination that the appointment of a receiver is the most convenient and feasible means of preserving,
administering or disposing of the properties is nothing but a hollow conclusion drawn from inexistent factual considerations.
Third, placing the disputed properties under receivership is not necessary to save Dominalda from grave and immediate loss or irremediable
damage. Contrary to her assertions, Dominalda is assured of receiving income under the PSA approved by the RTC providing that she was
entitled to receive a share of one-half (1/2) of the net income derived from the uncontroverted properties. Pursuant to the PSA, Josephine, the
daughter of Dominalda, was appointed by the court as administrator of the eight (8) uncontested lots with special authority to provide for the
medicine of her mother. Thus, it was patently erroneous for the RTC to grant the Application for Receivership in order to ensure Dominalda of
income to support herself because precisely, the PSA already provided for that. It cannot be over-emphasized that the parties in Civil Case No.
S-760 were willing to make arrangements to ensure that Dominalda was provided with sufficient income. In fact, the RTC, in its February 8,
2010 Resolution granting the Application for Receivership, noted the agreement of the parties that "Dominalda Espina Caboverde shall be
given 2/10 shares of the net monthly income and products of said properties."21
Finally, it must be noted that the defendants in Civil Case No. S-760 are the registered owners of the disputed properties that were in their
possession. In cases such as this, it is settled jurisprudence that the appointment should be made only in extreme cases and on a clear
showing of necessity in order to save the plaintiff from grave and irremediable loss or damage.22
This Court has held that a receiver should not be appointed to deprive a party who is in possession of the property in litigation, just as a writ of
preliminary injunction should not be issued to transfer property in litigation from the possession of one party to another where the legal title is
in dispute and the party having possession asserts ownership in himself, except in a very clear case of evident usurpation. 23
Furthermore, this Court has declared that the appointment of a receiver is not proper when the rights of the parties, one of whom is in
possession of the property, depend on the determination of their respective claims to the title of such property24 unless such property is in
danger of being materially injured or lost, as by the prospective foreclosure of a mortgage on it or its portions are being occupied by third
persons claiming adverse title.25
It must be underscored that in this case, Dominaldas claim to the disputed properties and her share in the properties income and produce is
at best speculative precisely because the ownership of the disputed properties is yet to be determined in Civil Case No. S-760. Also, except
for Dominaldas claim that she has an interest in the disputed properties, Dominalda has no relation to their produce or income.1wphi1
By placing the disputed properties and their income under receivership, it is as if the applicant has obtained indirectly what she could not
obtain directly, which is to deprive the other parties of the possession of the property until the controversy between them in the main case is
finally settled.26 This Court cannot countenance this arrangement.
To reiterate, the RTCs approval of the application for receivership and the deprivation of petitioners of possession over the disputed properties
would be justified only if compelling reasons exist. Unfortunately, no such reasons were alleged, much less proved in this case.
In any event, Dominaldas rights may be amply protected during the pendency of Civil Case No. S-760 by causing her adverse claim to be
annotated on the certificates of title covering the disputed properties. 27
As regards the issue of whether or not the CA was correct in ruling that a bond was not required prior to the appointment of the receivers in
this case, We rule in the negative.
Respondents Eve and Fe claim that there are sufficient grounds for the appointment of receivers in this case and that in fact, petitioners
agreed with them on the existence of these grounds when they acquiesced to Dominaldas Application for Receivership. Thus, respondents
insist that where there is sufficient cause to appoint a receiver, there is no need for an applicants bond because under Sec. 2 of Rule 59, the
very purpose of the bond is to answer for all damages that may be sustained by a party by reason of the appointment of a receiver in case the
applicant shall have procured such appointment without sufficient cause. Thus, they further argue that what is needed is the receivers bond
which was already fixed and approved by the RTC.28 Also, the CA found that there was no need for Dominalda to file a bond considering that
petitioners filed a Manifestation where they formally consented to the receivership. Hence, it was as if petitioners agreed that there was
sufficient cause to place the disputed properties under receivership; thus, the CA declared that petitioners were estopped from challenging the
sufficiency of such cause.
The foregoing arguments are misplaced. Sec. 2 of Rule 59 is very clear in that before issuing the order appointing a receiver the court shall
require the applicant to file a bond executed to the party against whom the application is presented. The use of the word "shall" denotes its
mandatory nature; thus, the consent of the other party, or as in this case, the consent of petitioners, is of no moment. Hence, the filing of an
applicants bond is required at all times. On the other hand, the requirement of a receivers bond rests upon the discretion of the court. Sec. 2

of Rule 59 clearly states that the court may, in its discretion, at any time after the appointment, require an additional bond as further security
for such damages.
WHEREFORE, upon the foregoing considerations, this petition is GRANTED. The assailed CA June 25, 2012 Decision and September 21,
2012 Resolution in CA-G.R. SP No. 03834 are hereby REVERSED and SET ASIDE. The Resolutions dated February 8, 2010 and July 19,
2010 of the RTC, Branch 11 in Sindangan, Zamboanga del Norte, in Civil Case No. S-760, approving respondent Dominalda EspinaCaboverdes application for receivership and appointing the receivers over the disputed properties are likewise SET ASIDE.
SO ORDERED.