of preliminary injunction is not conclusive or complete for only a sampling is
INTRODUCTION/PRELIMINARIES needed to give the trial court an idea of the justification for the preliminary
G.R. No. 197802, November 11, 2015
ZUNECA PHARMACEUTICAL, AKRAM ARAIN AND/OR VENUS ARAIN, M.D. DBA
ZUNECA PHARMACEUTICAL, Petitioners, v.NATRAPHARM, INC., Respondent.
VILLARAMA, JR., J.:
FACTS:
NATRAPHARM, INC. is an all-Filipino pharmaceutical company which
manufactures and sells a medicine bearing the generic name "CITICOLINE,"
under its registered trademark "ZYNAPSE," which is indicated for heart and
stroke patients.
With its registration, the trademark "ZYNAPSE" enjoys protection for a term of 10
years from September 24, 2007, and has also obtained from the Bureau of Food
and Drugs (BFAD) all necessary permits and licenses.
Allegedly unknown to respondent, since 2003 or even as early as 2001,
petitioners have been selling a medicine bearing the generic name
"CARBAMAZEPINE," an anti-convulsant indicated for epilepsy, under the brand
name "ZYNAPS," which trademark is however not registered with the IPO.
Respondent sent petitioners a cease-and-desist demand letter, which petitioners
refused to heed, claiming that they had prior use of the name "ZYNAPS."
Respondent filed a complaint against petitioners for trademark infringement for
violation of Republic Act (R.A.) No. 8293, or the Intellectual Property Code of
the Philippines (IPC), with prayer for a temporary restraining order (TRO) and/or
writ of preliminary injunction.
RTC denied the application for a writ of preliminary injunction, for the reason
that neither party is, at this point, entitled to any injunctive solace. Plaintiff,
while admittedly the holder of a registered trademark under the IPC, may not
invoke ascendancy or superiority of its CTR [certificate of trademark
registration] over the CPR [certificate of product registration of the BFAD] of the
defendants, as the latter certificate is, in the Court's opinion, evidence of its
"prior use".
CA, in its April 18, 2011 Decision,granted the Petition for
Certiorari,permanently ENJOINING defendants-respondentsfrom
manufacturing, importing, distributing, selling and/or advertising for sale, or
otherwise using in commerce, the anti-convulsant drug CARBAMAZEPINE
under the brand name and mark "ZYNAPS."
On December 2, 2011, the RTC rendered a Decision on the merits of the case. It
found petitioners liable to respondent for damages. Moreover, it enjoined the
petitioners from using "ZYNAPS" and ordered all materials related to it be
disposed outside the channel of commerce or destroyed without
compensation.
ISSUE:
Whether the CA may order a permanent injunction in deciding a petition for
certiorari against the denial of an application for a preliminary injunction issued by
the RTC?
HELD: NO
Rule 58 of the Rules of Court provides for both preliminary and permanent
injunction. Section 1, Rule 58 provides for the definition of preliminary injunction:
SECTION 1. Preliminary injunction defined; classes. A preliminary injunction
is an order granted at any stage of an action or proceeding prior to the
judgment or final order, requiring a party or a court, agency or a person to
refrain from a particular act or acts. It may also require the performance of a
particular act or acts, in which case it shall be known as a preliminary
mandatory injunction. (Emphasis supplied)
On the other hand, Section 9 of the same Rule defines a permanent injunction in
this wise:
SEC. 9. When final injunction granted. If after the trial of the action it
appears that the applicant is entitled to have the act or acts complained of
permanently enjoined, the court shall grant a final injunction perpetually
restraining the party or person enjoined from the commission or
continuance of the act or acts or confirming the preliminary mandatory
injunction. (Emphasis supplied)
A writ of preliminary injunction is generally based solely on initial and incomplete
evidence. The evidence submitted during the hearing on an application for a writ
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
injunction pending the decision of the case on the merits. As such, the findings of
fact and opinion of a court when issuing the writ of preliminary injunction are
interlocutory in nature and made even before the trial on the merits is
commenced or terminated.
By contrast a permanent injunction, based on Section 9, Rule 58 of the Rules of
Court, forms part of the judgment on the merits and it can only be properly
ordered only on final judgment. A permanent injunction may thus be granted after
a trial or hearing on the merits of the case and a decree granting or refusing an
injunction should not be entered until after a hearing on the merits where a
verified answer containing denials is filed or where no answer is required, or a rule
to show cause is equivalent to an answer.
As such a preliminary injunction, like any preliminary writ and any interlocutory
order, cannot survive the main case of which it is an incident; because an ancillary
writ of preliminary injunction loses its force and effect after the decision in the
main petition.
Here, this Court is being asked to determine whether the CA erred by issuing a
permanent injunction in a case which questioned the propriety of the denial of an
ancillary writ. But with the RTC's December 2, 2011 Decision on the case for
"Injunction, Trademark Infringement, Damages and Destruction," the issues raised
in the instant petition have been rendered moot and academic. We note that the
case brought to the CA on a petition for certiorari merely involved the RTC's denial
of respondent's application for a writ of preliminary injunction, a mere ancillary
writ. Since a decision on the merits has already been rendered and which includes
in its disposition a permanent injunction, the proper remedy is an appeal36 from
the decision in the main case.
WHEREFORE, in light of all the foregoing, the petition is hereby DENIED for being
moot and academic.
G.R. No. L-252 March 30, 1946
TRANQUILINO CALO and DOROTEO SAN JOSE, petitioners,
vs. ARSENIO C. ROLDAN, Judge of First Instance of Laguna, REGINO RELOVA and
TEODULA BARTOLOME,respondents.
FACTS:
Plaintiff spouses, as owners and possessors of certain parcels of land in Laguna,
filed against defendants a complaint, alleging that the latter, through the use of
force, stealth, strategy and intimidation, intend or are intending to enter and
work or harvest whatever existing fruits found on the land, with prayer for the
issuance of a writ of preliminary injunction to be issued ex parte to restrain,
enjoin and prohibit defendants from entering, interfering with or
harvesting the lands belonging to plaintiff spouses and that judgment be
rendered, after due hearing, declaring the preliminary injunction final. An
accompanying bond in the amount of P200 was also filed with the CFI.
The defendants filed an opposition to the issuance of the writ of preliminary
injunction on the ground that they are owners of the lands and have been in
actual possession thereof since the year 1925; and their answer to the
complaint reiterated that they are the owners and were then in actual
possession of said property, and that the plaintiffs have never been in
possession thereof.
CFI:Denied the Petition for the Writ of PA on the ground that the defendants
were in actual possession of said lands. A MR was filed but had not yet been
decided by the judge as he was assigned to another court.
On Dec 17, plaintiffs filed an urgent petition ex-parte praying that plaintiffs'
motion for reconsideration of the order denying their petition for preliminary
injunction be granted and or for the appointment of a receiver of the
properties described in the complaint, on the ground that
a. the plaintiffs have an interest in the properties in question, and the fruits
thereof were in danger of being lost unless a receiver was appointed; and
that
b. the appointment of a receiver was the most convenient and feasible
means of preserving, administering and or disposing of the properties in
litigation which included their fruits.
New Judge: Judge Roldan, now the judge, on the same date, granted the petition
for appointment of and appointed a receiver in the case. Hence, this petition.
ISSUE: WON the appointment of a receiver is proper.
HELD: No. Appointment of a receiver is not proper or does not lie in an action of
injunction such as the one filed by the plaintiff. The litigation or issue raised by
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plaintiffs in their complaint is not the ownership or possession of the lands and
their fruits. It is whether or not defendants intend or were intending to enter or
work or harvest whatever existing fruits could then be found in the lands described
in the complaint, alleged to be the exclusive property and in the actual possession
of the plaintiffs. It is a matter not only of law but of plain common sense that a
plaintiff will not and legally cannot ask for the appointment or receiver of property
which he alleges to belong to him and to be actually in his possession. For the
owner and possessor of a property is more interested than persons in preserving
and administering it.
The provisional remedies (attachment, preliminaryinjunction,
receivership, delivery of personal property provided in Rules 59-62) are
remedies to which parties litigant may resort for the preservation or
protection of their rights or interest, and for no other purpose, during the
pendency of the principal action. If an action, by its nature, does not require such
protection or preservation, said remedies cannot be applied for and granted. To
each kind of action/s a proper provisional remedy is provided for by law.
(a)Attachment: issued only in the cases specifically states in section 1, Rule 59,
in order that the defendant may not dispose of his attached property and
thus secure the satisfaction of any judgment that may be recovered by
plaintiff from defendant. For that reason, a property subject of litigation
between the parties, or claimed by plaintiff as his, cannot be attached upon
a motion of the same plaintiff.
(b) Preliminary prohibitory injunction: lies when the relief demanded
in the complaint consists in restraining the commission/continuance of
the act complained of, either perpetually or for a limited period, and
the other conditions required by sec 3 of Rule 60. Purpose is to
preserve the status quo of the things subject of the action or the
relation between the parties, in order to protect the rights of plaintiff
respecting the subject of the action during the pendency of the suit.
(c)Receiver: may be appointed to take charge of personal/real property which
is the subject of an ordinary civil action, when itappears that the party
applying for theappointment ofa receiver has an interest in the property or
fund which is the subject of the action or litigation, and that such
property or fund is in danger of being lost, removed or materially injured
unless a receiver is appointed to guard and preserve it. The property
or fund must be in litigation according to the allegations of the
complaint, and the object of appointing a receiver is to secure and
preserve the property or thing in controversy pending the litigation.
Delivery of personal property: consists in the delivery, by order of court, of a
personal property by the defendant to the plaintiff, who shall give a bond to
assure its return or payment of damages to the defendant in the plaintiffs
action to recover possession of the same property fails, in order to protect the
plaintiffs right of possession over said property, or prevent the defendant from
damaging, destroying or disposing of the same during the pendency of the suit.
G.R. No. 144755. June 8, 2005
SPOUSES ELISEO F. ESTARES and ROSENDA P. ESTARES, petitioners, vs. COURT OF
APPEALS, HON. DAMASO HERRERA as Presiding Judge of the RTC, Branch 24,
Bian, Laguna PROMINENT LENDING & CREDIT CORPORATION, PROVINCIAL
SHERIFF OF LAGUNA and Sheriff IV ARNEL G. MAGAT, respondents.
AUSTRIA-MARTINEZ, J.:
FACTS:
On May 21, 1999, petitioner Spouses Eliseo F. Estares and Rosenda P. Estares
(Estares spouses for brevity) filed a complaint for Damages and Preliminary
Prohibitory Injunction against private respondent Prominent Lending & Credit
Corporation (PLCC) before the Regional Trial Court, Laguna, alleging thatthey
obtained a loan from PLCC for P800,000.00 secured by a real estate mortgage
over a 363-square meter parcel of land with improvements situated in the
Municipality of Santa Rosa, Laguna; the promissory note and the real estate
mortgage were falsified because they affixed their signatures on two blank
documents; the monthly interest of 3.5% and 3% penalty on each delayed
monthly interest are different from the 18% interest per annum to which they
agreed to; for failure to pay their obligation despite repeated demands, PLCC
filed a petition for extrajudicial foreclosure with the Office of the Provincial
Sheriff of Laguna; and on June 8, 1999, the Sheriff sent a Notice of Extrajudicial
Sale to the Estares spouses.
Accordingly, the Estares spouses sought to declare as null and void the
promissory note and the real estate mortgage for not reflecting their true
agreement. In the interim, they prayed for a temporary restraining order (TRO)
and/or writ of preliminary injunction to enjoin PLCC from taking possession of
the mortgaged property and proceeding with the extrajudicial sale scheduled on
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
July 13, 1999 at 10:00 a.m.
On July 12, 1999, the trial court issued a TRO in favor of the Estares spouses. The
parties subsequently agreed to maintain the status quo until August 20, 1999.
At the hearing on the Estares spouses application for a writ of preliminary
injunction, they did not question PLCC in writing why they only received
P637,000.00; when they received the Statement of Account, they did not
question the figures appearing therein; when they received PLCCs demand
letter, they went to the formers office not to question the loans terms and
conditions but merely to request for extension of three months to pay their
obligation.
In opposition to the application for a writ of preliminary injunction, PLCC
presented its manager, Rey Arambulo, who testified that the Estares spouses
were duly apprised of the terms and conditions of the loan, including the rate of
interest, penalties and other charges, in accordance with the Truth in Lending
Act or Republic Act No. 3765.
On August 18, 1999, the trial court denied the Estares spouses application for a
writ of preliminary injunction, holding that the latter failed to establish the facts
necessary for an injunction to issue.
Estares spouses filed a petition for certiorari and prohibition in the Court of
Appeals ascribing grave abuse of discretion upon the trial court order which
denied their prayer for a writ of preliminary injunction and motion for
reconsideration, respectively.
Without giving due course to the petition, the Court of Appeals issued a
Resolution requiring the PLCC to file its comment to the petition. The action on
the Estares spouses application for a TRO and writ of preliminary injunction was
deferred and held in abeyance until after receipt of the comment.
With no restraining order enjoining him, Sheriff Magat conducted an auction sale
on January 5, 2000, with PLCC as highest bidder for P1,500,000.00.
On April 17, 2000, the Court of Appeals dismissed the petition for lack of merit,
holding that the trial court did not abuse its discretion in denying the Estares
spouses application for a writ of preliminary injunction since the latter failed to
prove the requisites for the issuance thereof.
Estares spouses filed the present petition for certiorari and prohibition.
ISSUE:
WON the Estares spouses were able to establish their right to injunctive relief.
HELD: NO
In any event, we find that this petition must still be dismissed as the Court of
Appeals did not commit any grave abuse of discretion amounting to want or excess
of jurisdiction in dismissing the petition.
Generally, injunction is a preservative remedy for the protection of substantive
rights or interests. It is not a cause of action in itself but merely a provisional
remedy, an adjunct to a main suit. The controlling reason for the existence of the
judicial power to issue the writ is that the court may thereby prevent a threatened
or continuous irremediable injury to some of the parties before their claims can be
thoroughly investigated and advisedly adjudicated. It is to be resorted to only when
there is a pressing necessity to avoid injurious consequences which cannot be
remedied under any standard of compensation. The application of the writ rests
upon an alleged existence of an emergency or of a special reason for such an order
before the case can be regularly heard, and the essential conditions for granting
such temporary injunctive relief are that the complaint alleges facts which appear
to be sufficient to constitute a cause of action for injunction and that on the entire
showing from both sides, it appears, in view of all the circumstances, that the
injunction is reasonably necessary to protect the legal rights of plaintiff pending
the litigation.
The Estares spouses had the burden in the trial court to establish the following
requirements for them to be entitled to injunctive relief: (a) the existence of their
right to be protected; and (b) that the acts against which the injunction is to be
directed are violative of such right. To be entitled to an injunctive writ, the
petitioner must show, inter alia, the existence of a clear and unmistakable right
and an urgent and paramount necessity for the writ to prevent serious damage.
Thus, an injunctive remedy may only be resorted to when there is a pressing
necessity to avoid injurious consequences which cannot be remedied under any
standard compensation.
In the present case, the Estares spouses failed to establish their right to injunctive
relief. They do not deny that they are indebted to PLCC but only question the
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amount thereof. Their property is by their own choice encumbered by a real estate
mortgage. Upon the nonpayment of the loan, which was secured by the mortgage,
the mortgaged property is properly subject to a foreclosure sale.
It must be stressed that the assessment and evaluation of evidence in the issuance
of the writ of preliminary injunction involve findings of facts ordinarily left to the
trial court for its conclusive determination. As such, a trial courts decision to grant
or to deny injunctive relief will not be set aside on appeal unless the court abused
its discretion. In granting or denying injunctive relief, a court abuses its discretion
when it lacks jurisdiction, fails to consider and make a record of the factors
relevant to its determination, relies on clearly erroneous factual findings, considers
clearly irrelevant or improper factors, clearly gives too much weight to one factor,
relies on erroneous conclusions of law or equity, or misapplies its factual or legal
conclusions.
In the present case, the Estares spouses clearly failed to prove that they have a
right protected and that the acts against which the writ is to be directed are
violative of said right. Hence, the Court of Appeals did not commit a grave abuse of
its discretion amounting to excess or lack of jurisdiction in dismissing petitioners
petition for certiorari.
CASE DIGEST 4: INTRODUCTION/PRELIMINARIES (DEPOSIT AS A PROVISIONAL
REMEDY IN THE EXERCISE OF EQUITY JURISDICTION OF THE COURT)
REYES VS. LIM, G.R. No. 134241. August 11, 2003 (408 SCRA 560)
FACTS OF THE CASE:
PETITIONER DAVID REYESfiled before the trial court a complaint for
annulment of contract and damages against respondents Jose Lim (Lim), Chuy
Cheng Keng (Keng) and Harrison Lumber, Inc. (Harrison Lumber). The COMPLAINT
alleged that REYES AS SELLER AND LIM AS BUYERentered into a contract to sell a
parcel of landlocated along F.B. Harrison Street, Pasay City. HARRISON LUMBER
occupied the Property as lessee with a monthly rental of P35,000.
The complaint claimed that Reyes had informed Harrison Lumber to
vacate the Property before the end of January 1995 and if KENG AND HARRISON
LUMBER failed to vacate by 8 March 1995, he would hold them liable for the
penalty of P400,000 a month as provided in the Contract to Sell. The complaint
further alleged that Lim connived with Harrison Lumber not to vacate the Property
until the P400,000 monthly penalty would have accumulated and equaled the
unpaid purchase price of P18,000,000.
KENG AND HARRISON LUMBERdenied that they connived with Lim to
defraud Reyes. Moreover, Reyes approved their request for an extension of time to
vacate the Property due to their difficulty in finding a new location for their
business. Harrison Lumber claimed that as of March 1995, it had already started
transferring some of its merchandise to its new business location in Malabon.
LIM (buyer), on the other hand,stated that that he was ready and
willing to pay the balance of the purchase price on or before 8 March 1995. On 9
March 1995, REYESoffered to return the P10 million down payment to Lim because
Reyes was having problems in removing the lessee from the Property. LIMrejected
Reyes offer and proceeded to verify the status of Reyes title to the Property. LIM
learned that Reyes had already sold the Property to Line One Foods Corporation.
LIM prayed for the cancellation of the Contract to Sell and for the
issuance of a writ of preliminary attachment against Reyes. The trial court denied
the prayer for a writ of preliminary attachment in an Order dated 7 October
1996.LIM alsorequested in open court that Reyes be ordered to deposit the P10
million down payment with the cashier of the Regional Trial Court of Paraaque. The
trial court granted this motion.
The TRIAL COURTdirected Reyes to deposit the P10 million down
payment with the Clerk of Court on or before 30 October 1997.
The COURT OF APPEALS ruled that the trial court could validly issue the
assailed orders in the exercise of its equity jurisdiction. The court may grant
equitable reliefs to breathe life and force to substantive law such as Article 1385 of
the Civil Code since the provisional remedies under the Rules of Court do not apply
to this case. REYES points out that deposit is not among the provisional remedies
enumerated in the 1997 Rules of Civil Procedure and invokes the principle that
equity is applied only in the absence of, and never against, statutory law or x xx
judicial rules of procedure.
ISSUE:Whether or not the trial court could issue the questioned Orders requiring
petitioner David Reyes to deposit the amount of Ten Million Pesos
(P10,000,000.00) during the pendency of the action, when deposit is not among
the provisional remedies enumerated in Rule 57 to 61 of the 1997 Rules on Civil
Procedure.YES
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
RULING:
The instant case, however, is precisely one where there is a hiatus in the
law and in the Rules of Court. If left alone, THE HIATUS will result in unjust
enrichment to Reyes at the expense of Lim. The hiatus may also imperil restitution,
which is a precondition to the rescission of the Contract to Sell that Reyes himself
seeks. This is not a case of equity overruling a positive provision of law or judicial
rule for there is none that governs this particular case. This is a case of silence or
insufficiency of the law and the Rules of Court. In this case, Article 9 of the Civil
Code expressly mandates the courts to make a ruling despite the silence, obscurity
or insufficiency of the laws. This calls for the application of equity, which fills the
open spaces in the law.
Thus, the TRIAL COURT IN THE EXERCISE OF ITS EQUITY JURISDICTION
may validly order the deposit of the P10 million down payment in court. The
PURPOSE OF THE EXERCISE OF EQUITY JURISDICTIONin this case is to prevent
unjust enrichment and to ensure restitution. EQUITY JURISDICTIONaims to do
complete justice in cases where a court of law is unable to adapt its judgments to
the special circumstances of a case because of the inflexibility of its statutory or
legal jurisdiction. EQUITY is the principle by which substantial justice may be
attained in cases where the prescribed or customary forms of ordinary law are
inadequate. (CITED IN THE BOOK OF RIANO, 2012, PAGE 7)
On balance, it is unreasonable and unjust for Reyes to object to the
deposit of the P10 million down payment. The APPLICATION OF EQUITY always
involves a balancing of the equities in a particular case, a matter addressed to the
sound discretion of the court. Here, we find the equitiesweigh heavily in favor of
Lim, who paid the P10 million down payment in good faith only to discover later
that Reyes had subsequently sold the Property to another buyer.
The PRINCIPLE THAT NO PERSON MAY UNJUSTLY ENRICH HIMSELF AT
THE EXPENSE OF ANOTHER is embodied in Article 22[38] of the Civil Code. This
principle applies not only to substantive rights but also to procedural remedies.
One condition for invoking this principle is that the aggrieved party has no other
action based on contract, quasi-contract, crime, quasi-delict or any other provision
of law. Courts can extend this condition to the hiatus in the Rules of Court where
the aggrieved party, during the pendency of the case, has no other recourse based
on the provisional remedies of the Rules of Court. In this case, it was just, equitable
and proper for the trial court to order the deposit of the P10 million down
payment to prevent unjust enrichment by Reyes at the expense of Lim.
RULE 57
Preliminary Attachment
CASE DIGEST 5: RULE 57 PRELIMINARY ATTACHMENT (NATURE OF
PRELIMINARY ATTACHMENT)
NORTHERN ISLANDS, CO., INC., VS SPOUSES GARCIA, G.R. No. 203240, March 18,
2015
FACTS OF THE CASE:
Petitioner Northern Islands Co., Inc. filed a Complaint with application
for a writ of preliminary attachment, before the RTC against respondents. It alleged
that: (a) from March to July 2004, PETITIONER caused the delivery to respondents
of various appliances in the aggregate amount of P8,040,825.17; (b) the goods
were transported, shipped, and delivered by Sulpicio Lines, Inc., and were
accepted in good order and condition by respondents representatives; (c) the
parties agreed that the goods delivered were payable within 120 days, and that
the unpaid amounts would earn interest at a rate of eighteen percent (18%) per
annum; (d) however, the VALUE OF THE GOODS were not paid by respondents
despite repeated demands; and (e) respondentsfraudulently asserted that
petitioner had no proof that they had indeed received the quantity of the subject
goods.
In connection with the application for a writ of preliminary attachment,
PETITIONER posted a bond, through Visayan Surety and Insurance Corporation, in
the amount of 8,040,825.17. On November 7, 2005, the RTCissued the writ sought
for.
RESPONDENTS filed on November 11, 2001, an Urgent Motion for
Extension of Time to File Proper Pleading and Motion for Discovery (Production
and Inspection) (November 11, 2001 Motion), asking the RTC to allow them to
photocopy and personally examine the original invoices, delivery cargo receipts,
and bills of lading attached to the Amended Complaint, claiming that they could
not come up with an intelligent answer without being presented with the
originals of such documents.
Thereafter, RESPONDENTS filed a Motion to Discharge Excess
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Attachment, alleging that the attachment previously ordered by the RTC exceeded
by P9,232,564.56 given that the estimated value of the attached properties,
including the garnished bank accounts, as assessed by their appraiser, Gaudioso W.
Lapaz (Lapaz), amounted to P17,273,409.73, while the attachment bond is only in
the amount of P8,040,825.17.
RTC denied the Motion to Discharge Excess Attachment, finding that the
appraisal made by Lapaz was not reflective of the true valuation of the properties,
adding too that the bond posted by petitioner stands as sufficient security for
whatever damages respondents may sustain by reason of the attachment. On the
other hand, the RTC granted the Motion for Discovery in accordance with Rule 27
of the Rules of Court. However, no production or inspection was conducted on July
10, 2006 as the RTC directed since respondents received the copy of the above
order only on July 11, 2006.
CA partly granted the certiorari petition of respondents. It held that: (a)
on the ISSUE OF ATTACHMENT, trial by commissioners under Rule 32 of the Rules
of Court was proper so that the parties may finally settle their conflicting
valuations; and (b) on the MATTER OF DISCOVERY, petitioner could not be
compelled to produce the originals sought by respondents for inspection since
they were not in the formers possession.
ISSUE:1. Whether or not the RTC had lost jurisdiction over the matter of the
preliminary attachment after petitioner appealed the decision in the Main Case,
and thereafter ordered the transmittal of the records to the CA; YES
2. Whether or not the CA erred in ordering the appointment of a commissioner
and the subsequent discharge of any excess attachment found by said
commissioner.YES
RULING:
In this case, petitioner had duly perfected its appeal of the RTCs
September 21, 2011 Decision resolving the Main Case through the timely filing of
its Notice of Appeal dated October 27, 2011, together with the payment of the
appropriate docket fees. The RTC, in an Order dated January 25, 2012, had actually
confirmed this fact, and thereby ordered the elevation of the entire records to the
CA. WITH THE RTCS LOSS OF JURISDICTION OVER THE MAIN CASEnecessarily
comes its loss of jurisdiction over all matters merely ancillary thereto. Thus, the
PROPRIETY OF CONDUCTING A TRIAL BY COMMISSIONERS IN ORDER TO
DETERMINE THE EXCESSIVENESS OF THE SUBJECT PRELIMINARY ATTACHMENT,
being a mere ancillary matter to the Main Case, is now mooted by its supervening
appeal in CA-G.R. CV No. 98237.
Note that in Sps. Olib v. Judge Pastoral, the Court, in view of the nature
of a preliminary attachment, definitively ruled that the ATTACHMENT
ITSELFcannot be the subject of a separate action independent of the principal
actionbecause the attachment was only an incident of such action,
viz.:ATTACHMENT is defined as a provisional remedy by which the property of an
adverse party is taken into legal custody, either at the commencement of an action
or at any time thereafter, as a security for the satisfaction of any judgment that
may be recovered by the plaintiff or any proper party.
It is an auxiliary remedy and cannot have an independent existence
apart from the main suit or claiminstituted by the plaintiff against the defendant.
BEING MERELY ANCILLARY TO A PRINCIPAL PROCEEDING, the attachment must
fail if the suit itself cannot be maintained as the purpose of the writ can no longer
be justified.
The consequence is that WHERE THE MAIN ACTION IS APPEALED, the
attachment which may have been issued as an incident of that action, is also
considered appealed and so also removed from the jurisdiction of the court a quo.
The attachment itself cannot be the subject of a separate action independent of
the principal action because the attachment was only an incident of such action.
That being said, it is now unnecessary to discuss the other issues raised
herein. In fine, the petition is granted and the assailed CA rulings are set aside.
CASE DIGEST 6: RULE 57 PRELIMINARY ATTACHMENT (NATURE OF
PRELIMINARY ATTACHMENT/STAGE OF THE PROCEEDING WHEN PRELIMINARY
ATTACHMENT MAYBE APPLIED FOR)
DAVAO LIGHT & POWER CO., INC., vs. THE COURT OF APPEALS, QUEENSLAND
HOTEL or MOTEL or QUEENSLAND TOURIST INN, and TEODORICO ADARNA, G.R.
No. 93262 December 29, 1991
FACTS OF THE CASE:
DAVAO LIGHT & POWER CO., INC.filed a verified complaint for recovery
of a sum of money and damages against Queensland Hotel, etc. and
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
TeodoricoAdarna. The complaintcontained an ex parte application for a writ of
preliminary attachment.
JUDGE NARTATEZ, to whose branch the case was assigned by raffle,
issued an Order granting the ex parte application and fixing the attachment bond
at P4,600,513.37. The attachment bondhaving been submitted by Davao Light, the
writ of attachment issued.
The SUMMONS AND A COPY OF THE COMPLAINT, as well as the writ
of attachment and a copy of the attachment bond, were served on defendants
Queensland and Adarna; and pursuant to the writ, the sheriff seized properties
belonging to the latter.
DEFENDANTS QUEENSLAND AND ADARNA filed a motion to discharge
the attachment for lack of jurisdiction to issue the same because at the time the
order of attachment was promulgated (May 3, 1989) and the attachment writ
issued (May 11, 1989), the Trial Court had not yet acquired jurisdiction over the
cause and over the persons of the defendants.
Davao Lightfiled an opposition to the motion to discharge attachment.
Trial Courtissued an Order denying the motion to discharge.
The Court of Appeals in a special civil action of certiorari instituted by
the respondents, declared the issuance of a writ of preliminary attachment, as
well as all other orders emanating therefrom, specially the Writ of Attachment and
Notice of Levy on Preliminary Attachment as null and void.
Hence, this appeal filed by the petitioner.
ISSUE: Whether or not a writ of preliminary attachment may issue ex parte against
a defendant before acquisition of jurisdiction of the latter's person by service of
summons or his voluntary submission to the Court's authority. YES
RULING:
The Court ruled that with regard to thePROVISIONAL REMEDIES OF
PRELIMINARY ATTACHMENT, PRELIMINARY INJUNCTION, RECEIVERSHIP OR
REPLEVIN, they may be validly and properly applied for and granted even before
the defendant is summoned or is heard from.
The Court reiterates and reaffirms the proposition that WRITS OF
ATTACHMENT may properly issue ex parte provided that the Court is satisfied that
the relevant requisites therefor have been fulfilled by the applicant, although it
may, in its discretion,require prior hearing on the application with notice to the
defendant; but that LEVY ON PROPERTY PURSUANT TO THE WRIT thus issued may
not be validly effected unless preceded, or contemporaneously accompanied, by
service on the defendant of summons, a copy of the complaint(and of the
appointment of guardian ad litem, if any), the application for attachment (if not
incorporated in but submitted separately from the complaint), the order of
attachment, and the plaintiff's attachment bond.
A preliminary attachment may be defined, paraphrasing the Rules of
Court, as the provisional remedy in virtue of which a plaintiff or other party may,
at the commencement of the action or at any time thereafter, have the property of
the adverse party taken into the custody of the court as security for the
satisfaction of any judgment that may be recovered. It is a remedy which is purely
statutory in respect of which the law requires a strict construction of the
provisions granting it. Withal no principle, statutory or jurisprudential, prohibits
its issuance by any court before acquisition of jurisdiction over the person of the
defendant. (CITED IN THE BOOK OF RIANO, 2012, PAGE 11)
Rule 57 in fact speaks of the grant of the remedy "at the
commencement of the action or at any time thereafter." The phase, "AT THE
COMMENCEMENT OF THE ACTION," obviously refers to the date of the filing of
the complaint which, as above pointed out, is the date that marks "the
commencement of the action;" and the reference plainly is to a time before
summons is served on the defendant, or even before summons issues. What the
rule is saying quite clearly is that after an action is properly commenced by the
filing of the complaint and the payment of all requisite docket and other fees
the plaintiff may apply for and obtain a writ of preliminary attachment upon
fulfillment of the pertinent requisites laid down by law, and that he may do so at
any time, either before or after service of summons on the defendant. And this
indeed, has been the immemorial practice sanctioned by the courts: for the
plaintiff or other proper party to incorporate the application for attachment in the
complaint or other appropriate pleading (counter-claim, cross-claim, third-party
claim) and for the Trial Court to issue the writ ex-parte at the commencement of
the action if it finds the application otherwise sufficient in form and substance.
(CITED IN THE BOOK OF RIANO, 2012, PAGE 12 - STAGE OF THE PROCEEDING
WHEN PRELIMINARY ATTACHMENT MAYBE APPLIED FOR)
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 The relative ease with which a preliminary attachment may be obtained
is matched and paralleled by the relative facility with which the attachment may
legitimately be prevented or frustrated. WHEN PROPERTY HAS ALREADY BEEN
SEIZED UNDER ATTACHMENT, the attachment may be discharged upon
counterbond in accordance with Section 12 of Rule 57. SEC. 12. DISCHARGE OF
ATTACHMENT UPON GIVING COUNTERBOND. At any time after an order of
attachment has been granted, the party whose property has been attached or the
person appearing in his behalf, may, upon reasonable notice to the applicant,
apply to the judge who granted the order, or to the judge of the court in which the
action is pending, for an order discharging the attachment wholly or in part on the
security given . . . in an amount equal to the value of the property attached as
determined by the judge to secure the payment of any judgment that the
attaching creditor may recover in the action. . . .
BUT EVEN BEFORE ACTUAL LEVY ON PROPERTY, seizure under
attachment may be prevented also upon counterbond. The defendant need not
wait until his property is seized before seeking the discharge of the attachment by
a counterbond. This is made possible by Section 5 of Rule 57. SEC. 5. MANNER OF
ATTACHING PROPERTY. The officer executing the order shall without delay
attach, to await judgment and execution in the action, all the properties of the
party against whom the order is issued in the province, not exempt from
execution, or so much thereof as may be sufficient to satisfy the applicant's
demand, unless the former makes a deposit with the clerk or judge of the court
from which the order issued, or gives a counter-bond executed to the applicant, in
an amount sufficient to satisfy such demand besides costs, or in an amount equal
to the value of the property which is about to be attached, to secure payment to
the applicant of any judgment which he may recover in the action. . . .
Aside from the filing of a counterbond, a preliminary attachmentmay
also be lifted or discharged on the ground that it has been irregularly or improperly
issued, in accordance with Section 13 of Rule 57. SEC. 13. DISCHARGE OF
ATTACHMENT FOR IMPROPER OR IRREGULAR ISSUANCE. The party whose
property has been attached may also, at any time either BEFORE or AFTER the
release of the attached property, or before any attachment shall have been
actually levied, upon reasonable notice to the attaching creditor, apply to the
judge who granted the order, or to the judge of the court in which the action is
pending, for an order to discharge the attachment on the ground that the same
was improperly or irregularly issued. If the motion be made on affidavits on the
part of the party whose property has been attached, but not otherwise, the
attaching creditor may oppose the same by counter-affidavits or other evidence in
addition to that on which the attachment was made.
Case No. 3: BORJA vs PLATON
Facts:
On August 12, 1936, petitioner brought a civil action in the Court of First
Instance of Rizal against Hermogena Romero, Francisco de Borja, Josefa
Tangco and Crisanto de Borja to annul a second sale by Francisco de
Borja to Hermogena Romero, of a large estate known as the Hacienda
Jalajala, and to recover damages in the amount of P25,000. On August
29, 1936, Francisco de Borja and his wife Josefa Tangco filed an answer
with three counterclaims, and on September 29, 1936, they presented
two more counterclaims.
It was alleged that petitionr Jose De Borja, being a sonb of defendant
Francisco de Broja and Josefa Tangco, had been entrusted with the
administration of the extensive interests of his parents, but had been
unfaithful to his trust.
Defendants prayed that spouses Borja and Tangco be declared owners
of the said hacienda. They asked that petitioner be required to render
accounting of products of the hacienda that he had received, as well as
the proceeds of rice and bran, and a payment for a certain sum of
money which he allegedly retained illegally.
Spouses Borja and Tangco filed their petition for preliminary attachment
to cover their third, fourth, and fifth, grounds for cross-complaint,
involving a total of P69,035. In said motion, the defendants Borja and
wife stated that they did not include the first and second causes for
cross-complaint because the visible property of plaintiff that could then
be attached was only worth about P2,000.
The order for preliminary attachment is questioned upon several
grounds, among which are: (1) that no writ of attachment can be issued
in favor of a defendant who presents a counterclaim; (2) and the
defendants' affidavit was fatally defective.
Issues: W/N writ of attachment can be issued in favor of a defendant who presents
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
a counterclaim.
Ruling:
YES. For the purpose of the protection afforded by such attachment, it
is immaterial whether the defendants Borja and wife simply presented
a counterclaim or brought a separate civil action against Jose de Borja,
plaintiff in the previous case and petitioner herein. To lay down a subtle
distinction would be to sanction that formalism and that technicality
which are discountenanced by the modern laws of procedure for the
sake of speedy and substantial justice. In the present case we see no
reason why the order of the trial court should be disturbed, this
question being a matter within its discretion and we find no grave
abuse of that discretion.
Case No. 4: INSULAR BANK OF ASIA AND AMERICA vs CA
Facts:
Petitioner Insular Bank of Asia and America, Incorporated (IBAA) made
a money market placement with respondent Commercial Credit
Corporation (CCC) in the amount of P1,877,053.03. In consideration of
such placement, CCC executed a Non Negotiable Repurchase
Agreement whereby it conveyed to IBAA securities issued by
International Corporate Bank (Interbank) with a face value of
P2,000,000.00 and with a maturity date of 22 April 1981. IBAA and CCC
also executed a resale agreement, which bound IBAA to re-sell to CCC
the Interbank securities for P2,000,000.00 on 22 April 1981. On due
date (22 April 1981), CCC caused to be issued to IBAA a Commercial
Bank and Trust Co. (CBTC) cashier's check for P2,000,000.00 which was,
however, dishonored upon presentment for being drawn against
uncollected deposits.
Petitioner advised respondent of the dishonor anddemanded cash
payment. CCC admitted difficulty in replacing dishonored checks and
proposed payment on a staggered basis. Attached was a proposal of a
copy of a Central Bank letter approving the request of CCC for
additional standby credit facility.
IBAA, however, after CCCs failure to meet its obligation, filed before CFI
Rizal an action for recovery of sum of money with a prayer for the
issuance of a writ of preliminary attachment. CFI of Rizal issued an
order granting the preliminary attachment against real and personal
properties of CCC.
Private respondent filed a petition for certiorari with CA alleging grave
of abuse of discretion on the part of RTC Rizal. Despite the issuance of a
status quo order from the Court of Appeals, deposits of CCC with Bank
of the Philippine Islands and Far East Bank and Trust Co. were
garnished. Heavy equipment used in the construction of CCC's building
in Makati and its office equipment were attached.
The CA set aside RTCs order of attachment stating that there was no
showing that the petitioner was performing acts to defraud its creditors
or by disposing its assets to the prejudice of its creditors or persons
who may have a claim to its assets. Hence, the instant petition.
Issues: W/N CAs decision setting aside CFI Rizals granting of a writ of preliminary
attachment upon a complaint for collection of a sum of money which the
respondent CCC allegedly fraudulently contracted and now has difficulty paying, is
in accordance with law
Ruling:
YES. The purpose of attachment is to secure a contingent lien on
defendant's property until plaintiff can obtain a judgment and have
such property applied to its satisfaction or to make provision for
unsecured debts in such cases where the means of satisfaction thereof
are liable to be removed beyond the jurisdiction or improperly disposed
of (by fraud or otherwise) or concealed or placed beyond the reach of
creditors.
Petitioners contention that CCC had the fraudulent intent not to pay
the obligation or indebtedness at the time the obligation was incurred is
not borne out by the records. Upon the other hand, respondent CCC
has not denied that it was undergoing financial difficulties and had in
fact called a creditor's meeting to make full disclosure of its business
condition and negotiate for payment of its outstanding obligations.
Inability to pay, we rule, is not necessarily synonymous with fraudulent
intent not to honor an admitted obligation.
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Case No. 5: PHILIPPINE COMMERCIAL INTERNATIONAL BANK vs ALEJANDRO
Facts:
Petitioner filed against respondent a complaint for sum of money with
prayer for the issuance of a writ of preliminary attachment. In the
complaint, PCIB alleged that on September 10, 1997, respondent, a
resident of Hong Kong, executed in favor of petitioner a promissory
note obligating himself to pay P249,828,588.90 plus interest. In view of
the fluctuations in the foreign exchange rates which resulted in the
insufficiency of the deposits assigned by respondent as security for the
loan, petitioner requested the latter to put up additional security for
the loan. Respondent, however, sought a reconsideration of said
request pointing out petitioners alleged mishandling of his account
due to its failure to carry out his instruction to close his account as
early as April 1997.
According to PCIB, respondent fraudulently withdrew his unassigned
deposits notwithstanding his verbal promise to PCIB Assistant Vice
President Corazon B. Nepomuceno not to withdraw the same prior to
their assignment as security for the loan. They also alleged that Mr.
Alejandro is not a resident of the Philippines.
The RTC granted the applicationand issues the writ ex parte. Mr.
Alejandro then filed a motion to quash the writ contending that the
withdrawal of his unassigned deposits was not fraudulent as it was
approved by petitioner. He also alleged that petitioner knew that he
maintains a permanent residence in Quezon City, and an office address
in Makati City at the Law Firm Romulo Mabanta Buenaventura Sayoc &
De los Angeles, where he is a partner. Respondent added that he is the
managing partner of the Hong Kong branch of said Law Firm and that
his stay in Hong Kong is only temporary, and that he frequently travels
back to the Philippines.
RTC issued an order quashing the writ and there was no intent on the
part of petitioner to defraud when he withdrew his unassigned
deposits.
Meanwhile, respondent filed a claim for damages for the wrongful
garnishment of his deposits. RTC awarded the damages of P25M. CA
affirmed but reduced the amount of damages to P8M. Hence, the
present petition.
Issues: W/N PCIB is liable for damages for proper issuance of the writ of
attachment against respondent.
Ruling:
YES.
Based on the findings of the court, it is obvious that plaintiff already
knew from the beginning the deficiency of its second ground for
attachment [i.e.,] disposing properties with intent to defraud his
creditors, and therefore plaintiff had to resort to this misrepresentation
that defendant was residing out of the Philippines and suppressed the
fact that defendants permanent residence is in METRO MANILA where
he could be served with summons.
The circumstances under which a writ of preliminary attachment may
be issued are set forth in Section 1, Rule 57 of the Rules of Court, to wit:
(f) In an action against a party who resides out of the Philippines, or on
whom summons may be served by publication.
The purposes of preliminary attachment are: (1) to seize the property of
the debtor in advance of final judgment and to hold it for purposes of
satisfying said judgment, as in the grounds stated in paragraphs (a) to
(e) of Section 1, Rule 57 of the Rules of Court; or (2) to acquire
jurisdiction over the action by actual or constructive seizure of the
property in those instances where personal or substituted service of
summons on the defendant cannot be effected, as in paragraph (f) of
the same provision.
Corollarily, in actions in personam, such as the instant case for
collection of sum of money, summons must be served by personal or
substituted service, otherwise the court will not acquire jurisdiction
over the defendant. In case the defendant does not reside and is not
found in the Philippines (and hence personal and substituted service
cannot be effected), the remedy of the plaintiff in order for the court to
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
acquire jurisdiction to try the case is to convert the action into a
proceeding in rem or quasi in rem by attaching the property of the
defendant. Thus, in order to acquire jurisdiction in actions in personam
where defendant resides out of and is not found in the Philippines, it
becomes a matter of course for the court to convert the action into a
proceeding in rem or quasi in rem by attaching the defendants
property. The service of summons in this case (which may be by
publication coupled with the sending by registered mail of the copy of
the summons and the court order to the last known address of the
defendant), is no longer for the purpose of acquiring jurisdiction but for
compliance with the requirements of due process.
However, where the defendant is a resident who is temporarily out of
the Philippines, attachment of his/her property in an action in
personam, is not always necessary in order for the court to acquire
jurisdiction to hear the case.
In the instant case, it must be stressed that the writ was issued by the
trial court mainly on the representation of petitioner that respondent is
not a resident of the Philippines. Obviously, the trial courts issuance of
the writ was for the sole purpose of acquiring jurisdiction to hear and
decide the case. Had the allegations in the complaint disclosed that
respondent has a residence in Quezon City and an office in Makati City,
the trial court, if only for the purpose of acquiring jurisdiction, could
have served summons by substituted service on the said addresses,
instead of attaching the property of the defendant. The rules on the
application of a writ of attachment must be strictly construed in favor of
the defendant. For attachment is harsh, extraordinary, and summary in
nature; it is a rigorous remedy which exposes the debtor to humiliation
and annoyance. It should be resorted to only when necessary and as a
last remedy.
In light of the foregoing, the Court of Appeals properly sustained the
finding of the trial court that petitioner is liable for damages for the
wrongful issuance of a writ of attachment against respondent.
GR L-34548
November 29, 1988
RCBC vs. Castro and Phil Virginia Tobacco
Facts:In aCivil Case entitled "Badoc Planters, Inc. vs. Philippine Virginia Tobacco
Administration, et al.," which was an action for recovery of unpaid tobacco
deliveries, an order (partial judgment) was issued on January 15, 1970 ordering
the defendants therein to pay jointly and severally, the plaintiff Badoc Planters, Inc.
within 48 hours the aggregate amount of Php 206,916.76 with legal interests
thereon. On January 26, 1970, Badoc filed an Urgent Ex-Parte Motion for a Writ of
Execution of the said partial judgment which was granted on the same day.
Accordingly, the Branch Clerk of Court on the very same day, issued a Writ of
Execution addressed to Special Sheriff Faustina Rigor, who then issued a Notice of
Garnishment addressed to the General Manager and/or Cashier of RCBC
requesting a reply within 5 days to said garnishment as to any property which the
PVTA might have in the possession or control of petitioner or of any debts owing by
the petitioner to said defendant. Upon receipt of such Notice, RCBC notified PVTA
thereof to enable the PVTA to take the necessary steps for the protection of its
own interest.
Upon an Urgent Ex-Parte Motion dated January 27, 1970 filed by Badoc, the
respondent Judge issued an order granting the Ex-Parte Motion and directing the
herein petitioner "to deliver in check the amount garnished to Sheriff Faustino
Rigor and Sheriff Rigor in turn is ordered to cash the check and deliver the amount
to the plaintiff's representative and/or counsel on record." In compliance with said
order, petitioner delivered to Sheriff Rigor a certified check in the sum of Php
206,916.76.
HOWEVER, Respondent PVTA filed a Motion for Reconsideration dated February
26, 1970 which was granted in an order dated April 6, 1970, setting aside the
Orders of Execution and of Payment and the Writ of Execution and ordering
petitioner and Badoc "to restore, jointly and severally, the account of PVTA with
the said bank in the same condition and state it was before the issuance of the
aforesaid Orders by reimbursing the PVTA of the amount of Php 206,916.76 with
interests from January 27, 1970 until fully paid to the account of the PVTA. The
Motion for Reconsideration of the said Order of April 6, 1970 filed by herein
petitioner was denied. The herein petitioner filed a Notice of Appeal to the Court
of Appeals from the said Orders. This case was then certified by the Court of
Appeals to this Honorable Court, involving as it does purely questions of law.
Issue:Whether or not the respondent Judge correctly ordered the herein petitioner
6 of 50
to reimburse the amount paid to the Special Sheriff by virtue of the execution?
Ruling:No. The questioned Order of April 6, 1970 must be set aside insofar as it
ordered the petitioner RCBC, jointly and severally with Badoc, to reimburse PVTA.
The petitioner merely obeyed a mandatory directive from the respondent Judge
ordering petitioner to "deliver in check the amount garnished to Sheriff Faustino
Rigor and Sheriff Rigor is in turn ordered to cash the check and deliver the
amount to the plaintiff's representative and/or counsel on record."
PVTA instantly urges that the premature delivery of the garnished amount by RCBC
to the special sheriff even in the absence of a demand to deliver made by the
latter, before the expiration of the five-day period given to reply to the Notice of
Garnishment, without any reply having been given thereto nor any prior
authorization from its depositor, PVTA and even if the court's order of January 27,
1970 did not require the bank to immediately deliver the garnished amount
constitutes such lack of prudence as to make it answerable jointly and severally
with the plaintiff for the wrongful release of the money from the deposit of the
PVTA.
Such allegations must be rejected for lack of merit. In the first place, it should be
pointed out that RCBC did not deliver the amount on the strength solely of a
Notice of Garnishment; rather, the release of the funds was made pursuant to the
aforesaid Order of January 27, 1970. In the second place, the bank had already
filed a reply to the Notice of Garnishment stating that it had in its custody funds
belonging to the PVTA, which, in fact was the basis of the plaintiff in filing a motion
to secure delivery of the garnished amount to the sheriff. Lastly, the bank, upon
the receipt of the Notice of Garnishment, duly informed PVTA thereof to enable
the latter to take the necessary steps for the protection of its own interest.
It is important to stress that there was nothing irregular in the delivery of the
funds of PVTA by check to the sheriff, whose custody is equivalent to the custody
of the court, he being a court officer. It must be noted that in delivering the
garnished amount in check to the sheriff, the RCBC did not thereby make any
payment, for the law mandates that delivery of a check does not produce the
effect of payment until it has been cashed.
Moreover, by virtue of the order of garnishment, the same was placed in
custodialegis and therefore, from that time on, RCBC was holding the funds subject
to the orders of the court a quo. That the sheriff, upon delivery of the check to him
by RCBC encashed it and turned over the proceeds thereof to the plaintiff was no
longer the concern of RCBC as the responsibility over the garnished funds passed
to the court. Thus, no breach of trust or dereliction of duty can be attributed to
RCBC in delivering its depositor's funds pursuant to a court order which was merely
in the exercise of its power of control over such funds.
The order directing the bank to deliver the amount to the sheriff was distinct and
separate from the order directing the sheriff to encash the said check . The bank
had no choice but to comply with the order demanding delivery of the garnished
amount in check. The very tenor of the order called for immediate compliance
therewith. On the other hand, the bank cannot be held liable for the subsequent
encashment of the check as this was upon order of the court in the exercise of its
power of control over the funds placed in custodialegis by virtue of the
garnishment.
The aforequoted ruling in Engineering Construction Inc. vs National Power
Corporation thus bolsters RCBC's stand that its immediate compliance with the
lower court's order should not have been met with the harsh penalty of joint and
several liability. Nor can its liability to reimburse PVTA of the amount delivered in
check be premised upon the subsequent declaration of nullity of the order of
delivery.
Finally, it is contended that RCBC was bound to inquire into the legality and
propriety of the Writ of Execution and Notice of Garnishment issued against the
funds of the PVTA deposited with said bank. But the bank was in no position to
question the legality of the garnishment since it was not even a party to the case.
As correctly pointed out by the petitioner, it had neither the personality nor the
interest to assail or controvert the orders of respondent Judge. It had no choice but
to obey the same inasmuch as it had no standing at all to impugn the validity of the
partial judgment rendered in favor of the plaintiff or of the processes issued in
execution of such judgment.
RCBC cannot therefore be compelled to make restitution solidarily with the
plaintiff BADOC. Plaintiff BADOC alone was responsible for the issuance of the
Writ of Execution and Order of Payment and so, the plaintiff alone should bear
the consequences of a subsequent annulment of such court orders; hence, only
the plaintiff can be ordered to restore the account of the PVTA.
WHEREFORE, the petition is hereby granted and the petitioner is ABSOLVED from
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
any liability to respondent PVTA for reimbursement of the funds garnished. The
questioned Order of the respondent Judge ordering the petitioner, jointly and
severally with BADOC, to restore the account of PVTA are modified accordingly.
G.R. 133303 February 17, 2005
Bernardo ValdeviesovsCandelarioDamalerio and Aurea C. Damalerio
(unregistered sale vs. Attachment)
Facts:On 05 December 1995, Bernardo Valdevieso (petitioner) bought from
spouses Lorenzo and ElenitaUy a parcel of land. The deed of sale was not
registered, nor was the title of the land transferred to petitioner. It came to pass
that on 19 April 1996, spouses Candelario and AureaDamalerio (respondents) filed
with the Regional Trial Court (RTC) a complaint for a sum of money against spouses
Lorenzo and ElenitaUy with application for the issuance of a Writ of Preliminary
Attachment. On 23 April 1996, the trial court issued a Writ of Preliminary
Attachment by virtue of which the property, then still in the name of Lorenzo Uy
but which had already been sold to petitioner, was levied. The levy was duly
recorded in the Register of Deeds. On 06 June 1996, TCT No. T-30586 in the name
of Lorenzo Uy was cancelled and, in lieu thereof, TCT No. T-74439 was issued in the
name of petitioner. This new TCT carried with it the attachment in favor of
respondents.
On 14 August 1996, petitioner filed a third-party claim to discharge or annul the
attachment levied on the property covered by TCT No. T-74439 on the ground that
the said property belongs to him and no longer to Lorenzo and ElenitaUy. The trial
court ruled for the petitioner. Respondents sought reconsideration thereof which
was denied by the trial court. From the unfavorable resolution of the trial court in
the third-party claim, respondents appealed to the Court of Appeals. The appellate
court reversed the resolution. Petitioner moved for reconsideration but this was
denied by the Court of Appeals. Hence, this Petition for Review on Certiorari.
Issue:Whether or not a registered writ of attachment on the land is a superior lien
over that of an earlier unregistered deed of sale?
Ruling:We agree with the respondents.
The law applicable to the facts of this case is Section 51 of P.D. No. 1529. Said
Section provides:
Sec. 51. Conveyance and other dealings by registered owner. - An owner of
registered land may convey, mortgage, lease, charge, or otherwise deal with the
same in accordance with existing laws. He may use such forms of deeds,
mortgages, leases or other voluntary instruments as are sufficient in law. But no
deed, mortgage, lease, or other voluntary instrument, except a will purporting to
convey or affect registered land, shall take effect as a conveyance or bind the land,
but shall operate only as a contract between the parties and as evidence of
authority to the Register of Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land
insofar as third persons are concerned, and in all cases under this Decree, the
registration shall be made in the office of the Register of Deeds for the province
or city where the land lies.
It should also be observed that, at the time of the attachment of the property on
23 April 1996, the spouses Uy were still the registered owners of said property.
Under the cited law, the execution of the deed of sale in favor of petitioner was not
enough as a succeeding step had to be taken, which was the registration of the sale
from the spouses Uy to him. Insofar as third persons are concerned, what validly
transfers or conveys a persons interest in real property is the registration of the
deed. Thus, when petitioner bought the property on 05 December 1995, it was, at
that point, no more than a private transaction between him and the spouses Uy. It
needed to be registered before it could bind third parties, including respondents.
When the registration finally took place on 06 June 1996, it was already too late
because, by then, the levy in favor of respondents, pursuant to the preliminary
attachment ordered by the General Santos City RTC, had already been annotated
on the title.
The settled rule is that levy on attachment, duly registered, takes preference over
a prior unregistered sale. This result is a necessary consequence of the fact that
the property involved was duly covered by the Torrens system which works
under the fundamental principle that registration is the operative act which gives
validity to the transfer or creates a lien upon the land.
The preference created by the levy on attachment is not diminished even by the
subsequent registration of the prior sale. This is so because an attachment is a
proceeding in rem. It is against the particular property, enforceable against the
whole world. The attaching creditor acquires a specific lien on the attached
property which nothing can subsequently destroy except the very dissolution of
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the attachment or levy itself. Such a proceeding, in effect, means that the property
attached is an indebted thing and a virtual condemnation of it to pay the owners
debt. The lien continues until the debt is paid, or sale is had under execution issued
on the judgment, or until the judgment is satisfied, or the attachment discharged
or vacated in some manner provided by law.
Thus, in the registry, the attachment in favor of respondents appeared in the
nature of a real lien when petitioner had his purchase recorded. The effect of the
notation of said lien was to subject and subordinate the right of petitioner, as
purchaser, to the lien. Petitioner acquired ownership of the land only from the date
of the recording of his title in the register, and the right of ownership which he
inscribed was not absolute but a limited right, subject to a prior registered lien of
respondents, a right which is preferred and superior to that of petitioner.
The appealed Decision of the Court of Appeals and its Resolution are hereby
affirmed.
BIACO VS PHILIPPINE COUNTRYSIDE RURAL BANK
(as cited in Rianos Civil Procedure Volume II, page 13)
Facts: In this case, petitioner seeks a review for the decision of the Court of
Appeals which denied her petition for annulment of judgment.Petitioner, Ma.
Teresa Biaco, was married to Ernesto Biaco, who worked as branch manager in
Philippine Countryside Rural Bank (PCRB). While employed, Ernesto obtained
several loans from the bank and as security for the payment of said loans, he
executed a real estate mortgage in favor of the bank covering a parcel of land (OCT
No. P-14423). The real estate mortgage bore the signature of both Ernesto and
herein petitioner.
When Ernesto failed to settle his loans on due date, the bank sent him a written
demand, which however proved futile. Thus on February 22, 2000, PCRB files a
complaint for foreclosure of mortgage against Spouses Biaco before the RTS. Upon
failure of the spouses to file an answer, they were declared in default. Based on the
report of the Commissioner, the respondent judge ordered Biaco spouses to pay
the bank P1,260,304.33 plus litigation expenses and attorneys fees.
Subsequent to the motion for execution filed by the bank, which was later on
granted by the trial court, a copy of said writ was served to the spouses Biaco in
their residence in Cagayan de Oro. The same was personally received by Ernesto
and the mortgaged property was sold at public auction in favor of respondent
bank for P150,000.00. The amount of the property being insufficient, the bank filed
an ex parte motion for judgment praying for the issuance of a writ of execution for
full settlement of the remaining obligation. The court granted the motion and
issued a writ of execution against spouses Biaco to satisfy balance of
P1,369,974.70. The two notices of levy executed by the sheriff were however
denied registration as petitioner had already sold the two properties to her
daughters.
Petitioner sought for the annulment of RTC decision contending: 1) that extrinsic
fraud prevented her from participating in the judicial foreclosure proceedings and
that the bank failed to verify the authenticity of her signature on the real estate
mortgage; and 2) the RTC failed to acquire jurisdiction because summons were
served on her through her husband without any explanation as to why personal
service could not be made.
As to the validity of the service of summons, the appellate court ruled
that judicial foreclosure proceedings are actions quasi in rem. As such,
jurisdiction over the person of the defendant is not essential as long as
the court acquires jurisdiction over the res. Moreover, nothing that
spouses Biaco were not opposing parties in the case, the Court of
Appeals further ruled that the fraud committed by one against the
other cannot be considered extrinsic fraud.
Having her motion for reconsideration denied, petitioner now submits
before the Court the instant for Review.
Case for Petitioner:According to petitioner, that even if the action is quasi in rem,
personal service of summons is essential in order to afford her due process. The
substituted service made by the sheriff at her husbands office cannot be deemed
proper service absent any explanation that efforts had been made to personally
serve summons upon her but that such efforts failed. Petitioner likewise contends
that extrinsic fraud was perpetrated not so much by her husband, who did not
inform her of the judicial foreclosure proceedings, but by the sheriff who allegedly
connived with her husband to just leave a copy of the summons intended for her at
the latters office.
Case for Respondent:Respondent bank avers that service of summons upon the
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
defendant is not necessary in actions quasi in rem it being sufficient that the court
acquire jurisdiction over the res. As regards the alleged conspiracy between
petitioners husband and the sheriff, respondent counters that this is a new
argument which cannot be raised for the first time in the instant petition.
Issue: Whether or not RTCs decision should be annulled by lack of jurisdiction on
petitioner.
Ruling: The Supreme Court ruled in the affirmative.
The question of whether the trial court has jurisdiction depends on the nature of
the action, i.e., whether the action is in personam, in rem, or quasi in rem. The
rules on service of summons under Rule 14 of the Rules of Court likewise apply
according to the nature of the action.
In this case, the judicial foreclosure proceeding instituted by respondent PCRB
undoubtedly vested the trial court with jurisdiction over the res. A judicial
foreclosure proceeding is an action quasi in rem. As such, jurisdiction over the
person of petitioner is not required, it being sufficient that the trial court is vested
with jurisdiction over the subject matter.
There is a dimension to this case though that needs to be delved into. Petitioner
avers that she was not personally served summons. Instead, summons was
served to her through her husband at his office without any explanation as to
why the particular surrogate service was resorted to.
Without ruling on petitioners allegation that her husband and the sheriff connived
to prevent summons from being served upon her personally, we can see that
petitioner was denied due process and was not able to participate in the judicial
foreclosure proceedings as a consequence. The violation of petitioners
constitutional right to due process arising from want of valid service of summons
on her warrants the annulment of the judgment of the trial court.
There is more, the trial court granted respondent PCRBs ex-parte motion for
deficiency judgment and ordered the issuance of a writ of execution against the
spouses Biaco to satisfy the remaining balance of the award. In short, the trial
court went beyond its jurisdiction over the res and rendered a personal judgment
against the spouses Biaco.
Similarly, in this case, while the trial court acquired jurisdiction over the res, its
jurisdiction is limited to a rendition of judgment on the res. It cannot extend its
jurisdiction beyond the res and issue a judgment enforcing petitioners personal
liability. In doing so without first having acquired jurisdiction over the person of
petitioner, as it did, the trial court violated her constitutional right to due process,
warranting the annulment of the judgment rendered in the case.
SPOUSES YU VS. NGO YET TE
GR No. 155868 February 6, 2007
Facts:
Spouses Gregorio and Josefa Yu (Spouses Yu) purchased from Ngo Yet Te (Te) bars
of detergent soap worthP594,240.00, and issued to the latter three postdated
checks as payment of the purchase price. When Te presented the checks at
maturity for encashment, said checks were returned dishonored and stamped
"ACCOUNT CLOSED". Te demanded payment from Spouses Yu but the latter did not
heed her demands. Te filed with the Regional Trial Court for Collection of Sum of
Money and Damages with Prayer for Preliminary Attachment.
In support of her prayer for preliminary attachment, Te attached to her Complaint
an Affidavit executed by Sy that Spouses Yu were guilty of fraud in entering into the
purchase agreement for they never intended to pay the contract price. Upon Tes
posting of an attachment bond, the RTC issued an Order of Attachment/Levy.
In this case, the complaint and the accompanying affidavit in support of the
application for the writ only contains general averments. Neither pleading states in
particular how the fraud was committed or the badges of fraud purportedly
committed by the petitioners to establish that the latter never had an intention to
pay the obligation; neither is there a statement of the particular acts committed to
show that the petitioners are in fact disposing of their properties to defraud
creditors.
Issues:
I. WON the appellate court erred in not holding that the writ of attachment was
procured in bad faith, after it was established by final judgment that there was no
true ground therefor. YES
II. WON or not the appellate court erred in refusing to award actual, moral and
exemplary damages after it was established by final judgment that the writ of
attachment was procured with no true ground for its issuance. YES
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Held:
Where there is wrongful attachment, the attachment defendant may recover
actual damages even without proof that the attachment plaintiff acted in bad faith
in obtaining the attachment. However, if it is alleged and established that the
attachment was not merely wrongful but also malicious, the attachment defendant
may recover moral damages and exemplary damages as well. 56 Either way, the
wrongfulness of the attachment does not warrant the automatic award of damages
to the attachment defendant; the latter must first discharge the burden of proving
the nature and extent of the loss or injury incurred by reason of the wrongful
attachment.
The wrongfulness of the attachment does not warrant automatic award of
damages to the attachment defendant; the latter must first discharge the burden
of proving the nature and extent of the loss or injury by reason of the wrongful
attachment.
To merit an award of actual damages arising from a wrongful attachment, the
attachment defendant must prove, with the best evidence obtainable, the fact of
loss or injury suffered and the amount thereof.
Spouses Yu suffered some form of pecuniary loss when their properties were
wrongfully seized, although the amount thereof cannot be definitively ascertained.
Hence, an award of temperate or moderate damages in the amount of P50,000.00
is in order.
MINDANAO SAVINGS LOAN ASSOCIATION, INC. VS. CA
172 SCRA 480
Facts:
On September 10, 1986, private respondents filed in the Regional Trial Court of
Davao City, a complaint against defendants D.S. Homes, Inc., and its directors for
"Rescission of Contract and Damages" with a prayer for the issuance of a writ of
preliminary attachment. On September 28, 1986, Judge Dinopol issued an order
granting ex parte the application for a writ of preliminary attachment.
D. S. Homes. Inc., et al. and the Davao Savings & Loan Association (later renamed
Mindanao Savings & Loan Association, Inc. or "MSLA") and Francisco Villamor filed
separate motions to quash the writ of attachment. When their motions were
denied by the Court, D.S. Homes, Inc., et al. offered a counterbond in the amount
of Pl,752,861.41 per certificate issued by the Land Bank of the Philippines, a
banking partner of petitioner MSLA The lower court accepted the Land Bank
Certificate of . Deposit for Pl,752,861.41 as counterbond and lifted the writ of
preliminary attachment on June 5, 1987.
On July 29, 1987, MSLA and Villamor filed in the Court of Appeals a petition
for certiorari to annul the order of attachment and the denial of their motion to
quash the same. The CA dismissed the petition.
Issues:
(a) Whether or not a writ of preliminary attachment may be issued ex-parte?
(b) Whether or not objections against the writ may be invoked once a counterbond
is filed for its lifting and dissolution.
Held:
(a) YES. No notice to the adverse party or hearing of the application is required. As
a matter of fact a hearing would defeat the purpose of this provisional remedy. The
time which such a hearing would take, could be enough to enable the defendant to
abscond or dispose of his property before a writ of attachment issues.
Nevertheless, while no hearing is required by the Rules of Court for the issuance of
an attachment (Belisle Investment & Finance Co., Inc. vs. State Investment House,
Inc., 72927, June 30, 1987; Filinvest Credit Corp. vs. Relova, 11 7 SCRA 420), a
motion to quash the writ may not be granted without "reasonable notice to the
applicant" and only "after hearing" (Secs. 12 and 13, Rule 57, Rules of Court).
(b) NO. The Court of Appeals did not err in holding that objections to the
impropriety or irregularity of the writ of attachment "may no longer be invoked
once a counterbond is filed," when the ground for the issuance of the writ forms
the core of the complaint.
Indeed, after the defendant has obtained the discharge of the writ of attachment
by filing a counterbond under Section 12, Rule 57 of the Rules of Court, he may not
file another motion under Section 13, Rule 57 to quash the writ for impropriety or
irregularity in issuing it. The writ had already been quashed by filing a
counterbond, hence, another motion to quash it would be pointless. Moreover, as
the Court of Appeals correctly observed, when the ground for the issuance of the
writ is also the core of the complaint, the question of whether the plaintiff was
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
entitled to the writ can only be determined after, not before, a full-blown trial on
the merits of the case. This accords with our ruling G.B. Inc. vs. Sanchez, 98 Phil.
886 that: "The merits of a main action are not triable in a motion to discharge an
attachment, otherwise an applicant for the dissolution could force a trial on the
merits of the case on this motion."
SECURITY PACIFIC ASSURANCE VS. TRIA-INFANTE
468 SCRA 526
Facts:
Reynaldo Anzures filed a complaint in RTC against Teresita Villaluz for BP 22.
Anzures filed an Ex-Parte Motion for Preliminary Attachment, praying that pending
the hearing on the merits of the case, a Writ of Preliminary Attachment is to be
issued ordering the sheriff to attach the properties of Villaluz in accordance with
the Rules.
RTC issued a WPA upon complainants (Anzures) posting of a bond (P2.1M). Sheriff
attached certain properties of Villaluz and were duly annotated on the
corresponding certificates of title. RTC acquitted Villaluz of the crime charged
(BP22) but held her civilly liable. Villaluz appealed but decision was affirmed.
The case was elevated to the SC and during its pendency, Villaluz posted a
counter-bond of P2.5M issued by Security Pacific Assurance Corporation, as well as
filed an Urgent Motion to Discharge Attachment.
Anzures moved for execution of judgment. Pursuant to a writ of execution issued,
Sheriff Reynaldo R. Buazon tried to serve the writ of execution upon Villaluz, but
the latter no longer resided in her given address. Sheriff sent a Notice of
Garnishment to Security Pacific Assurance Corporations office in Makati City, by
virtue of the counter-bond posted by Villaluz with said insurance corporation in the
amount of P2.5M but refused to assume its obligation on the counter-bond it
posted for the discharge of the attachment made by Villaluz on the ground that the
bond was not approved by SC and that the condition by which the bond was
issued, did not happen.
Issues:
1. WON CA committed an error in affirming the decision of RTC to allow execution
on the counter-bond issued by Security Pacific.
2. WON CA correct in ruling that the that the mere act of posting the counter-bond
was sufficient to discharge the attachment on the property.
Ruling:
1. NO. When a judgment which has become executory, is returned unsatisfied,
liability of the bond automatically attaches in failure of the surety to satisfy the
judgment against the defendant despite demand therefore, writ of execution may
issue against the surety to enforce the obligation of the bond.
Security Pacific was saying that although, it has a surety agreement with Villaluz, it
is one which merely waives its right of excussion. This is wrongThe counter-bond
itself states that the parties jointly and severally bind themselves to secure the
payment of any judgment that the plaintiff may recover against the defendant in
the action.
In a contract of suretyship, surety agrees to be answerable directly, primarily and
absolutely to the principals debt, default or miscarriage of another. This means
that the surety is equally bound with the principal regardless of his interest in the
obligation or receipt of benefits. Security Pacific therefore cannot deny liability as a
surety.
2. YES, CA correct in ruling that attachment discharged without need of court
approval
There are two (2) ways to secure the discharge of an attachment. 1. - the party
whose property has been attached or a person appearing on his behalf may post a
security (Sec 12 Rule 57). 2.- party whose property is attached may show that the
order of attachment was improperly or irregularly issued.
The mere filing of the counter-attachment bond by Villaluz has discharged the
attachment on the properties and made the petitioner corporation liable on the
counter-attachment bond.
This can be gleaned from the DEFENDANTS BOND FOR THE DISSOLUTION OF
ATTACHMENT, which states that Security Pacific Assurance Corporation, as
surety, in consideration of the dissolution of the said attachment jointly and
severally, binds itself with petitioner Villaluz for any judgment that may be
recovered by private respondent Anzures against petitioner Villaluz.
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CASE DIGEST 12:REQUISITES FOR THE ISSUANCE OF A WRIT
WATERCRAFT VENTURE CORPORATION, REPRESENTED BY ITS VICE-PRESIDENT,
ROSARIO E. RAOA, v.ALFRED RAYMOND WOLFE, G.R. No. 181721,
September 09, 2015, PERALTA, J.:
FACTS OF THE CASE:
Petitioner Watercraft Venture Corporation (Watercraf) is engaged in the
business of building, repairing, storing and maintaining yachts, boats and
other pleasure crafts at the Subic Bay Freeport Zone, Subic, Zambales.
In connection with its operations and maintenance of boat storage facilities,
it charges a boat storage fee of Two Hundred Seventy-Two US Dollars
(US$272.00) per month with interest of 4% per month for unpaid charges.
Watercraft hired respondent Alfred Raymond Wolfe (Wolfe), a British
national and resident of Subic Bay Freeport Zone, Zambales, as its Shipyard
Manager.
During his empolyment, Wolfe stored the sailboat, Knotty Gull, within
Watercraft1 s boat storage facilities, but never paid for the storage fees.
On March 7, 2002, Watercraft terminated the employment of Wolfe. June
2002, Wolfe pulled out his sailboat from Watercraft's storage facilities after
signing a Boat Pull-Out Clearance dated June 29, 2002 where he allegedly
acknowledged the outstanding obligation of Sixteen Thousand Three
Hundred and Twenty-Four and 82/100 US Dollars (US$16,324.82)
representing unpaid boat storage fees for the period of June 1997 to June
2002. Despite repeated demands, he failed to pay the said amount.
Watercraft filed against Wolfe a Complaint for Collection of Sum of Money
with Damages with an Application for the Issuance of a Writ of Preliminary
Attachment.
Wolfe claimed he was hired as Service and Repair Manager, instead of
Shipyard Manager. He denied owing Watercraft the amount of US$16,324.82
representing storage fees for the sailboat.
Meanwhile, finding Watercraft's ex-parte application for writ of preliminary
attachment sufficient in form and in substance pursuant to Section 1 of Rule
57 of the Rules of Court, the RTC granted the same bond in the amount of
Three Million Two Hundred Thirty-One Thousand Five Hundred and Eighty-
Nine and 25/100 Pesos (Php3,231,589.25)
Wolfe's two vehicles, a gray Mercedes Benz with plate number XGJ 819 and a
maroon Toyota Corolla with plate number TFW 110, were levied upon. By
virtue of the Notice of Attachment and Levy dated September 5, 2005, a
white Dodge pick-up truck with plate number XXL 111 was also levied upon.
However, a certain Jeremy Simpson filed a Motion for Leave of Court to
Intervene, claiming that he is the owner of the truck as shown by a duly-
notarized Deed of Sale.
Wolfe filed a Motion to Discharge the Writ of Attachment but the RTC denied
for lack of merit. Wolfe filed a motion for reconsideration, but the RTC also
denied it for lack of merit.
CA granted Wolfe's petition. Accordingly, the Writ of Attachment, the Notice
of Attachment and the Notice of Attachment and Levy were declared null
and void, and private respondent is DIRECTED to return to their owners the
vehicles that were attached pursuant to the Writ. Thus, in this case,
Watercraft failed to meet all the requisites for the issuance of the writ. Thus,
in granting the same, respondent Judge acted with grave abuse of
discretion.CA denied Watercraft's motion for reconsideration of its Decision.
ISSUE: Whether or not the ex-parte issuance of the preliminary attachment by the
trial court in favor of the petitioner is valid.
HELD
A writ of preliminary attachment is defined as a provisional remedy issued
upon order of the court where an action is pending to be levied upon the
property or properties of the defendant therein, the same to be held
thereafter by the sheriff as security for the satisfaction of whatever judgment
that might be secured in the said action by the attaching creditor against the
defendant. However, it should be resorted to only when necessary and as a
last remedy because it exposes the debtor to humiliation and annoyance. It
must be granted only on concrete and specific grounds and not merely on
general averments quoting the words of the rules. Since attachment is harsh,
extraordinary, and summary in nature, the rules on the application of a writ
of attachment must be strictly construed in favor of the defendant.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
For the issuance of an ex-parte issuance of the preliminary attachment to
be valid, an affidavit of merit and an applicant's bond must be filed with the
court in which the action is pending.
In this case, Watercraft's Affidavit of Preliminary Attachment does not
contain specific allegations of other factual circumstances to show that
Wolfe, at the time of contracting the obligation, had a preconceived plan or
intention not to pay. Neither can it be inferred from such affidavit the
particulars of why he was guilty of fraud in the performance of such
obligation. To be specific, Watercraft's following allegation is unsupported by
any particular averment of circumstances that will show why or how such
inference or conclusion was arrived at, to wit: "For failing to pay for the use
[of] facilities and services - in the form of boat storage facilities - duly enjoyed
by him and for failing and refusing to fulfill his promise to pay for the said
boat storage fees, the Defendant is clearly guilty of fraud x xx." It is not an
allegation of essential facts constituting Watercraft's causes of action, but a
mere conclusion of law.
Furthermore, the other ground upon which the writ of preliminary
attachment was issued by the RTC is not at the same time the applicant's
cause of action. Assuming arguendo that the RTC was correct in issuing such
writ on the ground that Watercraft's complaint involves an action for the
recovery of a specified amount of money or damages against a party, like
Wolfe, who is about to depart from the Philippines with intent to defraud his
creditors, the Court stresses that the circumstances cited in support thereof
are merely allegations in support of its application for such writ. Such
circumstances, however, are neither the core of Watercraft's complaint for
collection of sum of money and damages, nor one of its three (3) causes of
action therein.
All told, the CA correctly ruled that Watercraft failed to meet one of the
requisites for the issuance of a writ of preliminary attachment, i.e., that the
case is one of those mentioned in Section 1 of Rule 57, and that the RTC
gravely abused its discretion in improvidently issuing such writ. Watercraft
failed to particularly state in its affidavit of merit the circumstances
constituting intent to defraud creditors on the part of Wolfe in contracting or
in the performance of his purported obligation to pay boat storage fees, as
well as to establish that he is a flight risk. Indeed, if all the requisites for
granting such writ are not present, then the court which issues it acts in
excess of its jurisdiction.
CASE DIGEST 13: CONDITION OF APPLICANTS BOND
D.M. WENSCESLAO and ASSOCIATES, INC., and /or DOMINADOR S. DAYRIT,
vs.READYCON TRADING AND CONSTRUCTION CORP., respondent.
FACTS OF THE CASE:
The petitioners herein had a contract with the Public Estates Authority (PEA)
for the improvement of the main expressway in the R-1 Toll Project along
Coastal Road in Paranaque. To finish the said project, the petitioners entered
into a contract with the respondent for the selling of Asphalt materials. As
stipulated in the said contract, after securing the down payment, the
petitioners will pay the remaining balance within 15 days thereof.
However, the petitioners failed to pay the remaining balance amidst the
countless demands. This prompted the respondent to file a complaint with
the Regional Trial Court of Pasig City for the collection of a sum of money and
damages with prayer for writ of preliminary attachment against the
petitioners.
The writ of preliminary attachment was granted which was countered by the
petitioners with a motion for the release of the property attached together
with the posting of a counter-bond. The motion prayed by the petitioners was
granted.
As a defense, the petitioner alleged that their contract was merely of service
and not of sale. At the same time, by way of counterclaim, the petitioners
prayed for the payment of damages caused by the filing of the respondents
complaint and the issuance of the writ of attachment despite lack of cause.
The RTC ruled in favor of the respondent. Dissatisfied with the decision, the
petitioners appealed to the Court of Appeals. The appellate court, however,
affirmed in toto the decision of the lower court. Hence, the present petition.
ISSUE: Whether or not the respondent is liable to the petitioners for damages
caused by the issuance and enforcement of the writ of attachment. NO
RULING:
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 The respondent is not liable to the petitioners for damages caused by the
issuance and enforcement of the writ of attachment.
Rule 57, Section 4 of the 1997 Rules of Civil Procedure states that: SEC. 4.
Condition of applicants bond. - The party applying for the order must
thereafter give a bond executed to the adverse party in the amount fixed by
the court in its order granting the issuance of the writ, conditioned that the
latter will pay all the costs which may be adjudged to the adverse party and
all damages which he may sustain by reason of the attachment, if the court
shall finally adjudge that the applicant was not entitled thereto (italics for
emphasis).
Indeed, actual and compensatory damages may be recovered for wrongful,
though not malicious attachment. At the same time, it was held by the court
in the previous cases that the mere existence of malice and bad faith would
not per se warrant the award of actual or compensatory damages. To grant
such damages, sufficient proof thereon is required.
However, both the RTC and the CA held that the complaint had merit and
that the respondent is entitled to a writ of preliminary attachment as a
provisional remedy by which the property of the petitioners is taken into
custody of the law as a security for the satisfaction of any judgement which
the respondent may recover.
Aside from that, if the petitioners suffered damages as a result, it is merely
because it did not heed the demand letter of the respondent in the first
place. The petitioners could have averted such damage if it immediately filed
a counter-bond or a deposit in order to lift the writ at once. It did not, and
must bear its own loss, if any, on that account.
CASE DIGEST 14:DISCHARGE OF ATTACHMENT UPON GIVING COUNTER-BOND
INSULAR SAVINGS BANK vs.COURT OF APPEALS, JUDGE OMAR U. AMIN, in his
capacity as Presiding Judge of Branch 135 of the Regional Trial Court of
Makati, and FAR EAST BANK AND TRUST COMPANY,
FACTS OF THE CASE:
The case involved two checks that were drawn against the Respondent and
were presented by the Petitioner for clearing. As respondent Bank returned
the checks beyond the reglementary period, the petitioner refused to refund
the money to the Respondent Bank.
With this, the Respondent Bank instituted an Arbitration case before the
Arbitration Committee of the Philippine Clearing House Corporation (PCHC).
While the dispute was pending Arbitration, respondent bank instituted a civil
case in the Regional Trial Court and prayed for the issuance of a writ of
preliminary attachment.
During the hearing of the civil case, petitioner and respondent bank agreed
to temporarily divide between them the disputed amount of 25,200,000.00
while the dispute has not yet been resolved. With this, the petitioner filed a
motion to discharge attachment by counter-bond in the amount of
12,600,000.00.
However, the respondent Judge denied the motion. The petitioner went to
the Court of Appeals and filed a petition for certiorari ascribing on the trial
court the commission of grave abuse of discretion amounting to lack of
jurisdiction. The Court of Appeals affirmed the Trial Courts ruling. Hence, the
present petition.
ISSUE: Whether or not the Court of Appeals erred in not ruling that the Trial Court
committed grave abuse of discretion in denying petitioners motion to
discharge attachment by counter-bond in the amount of 12,600,000.00.YES
RULING:
The Court of Appeals erred in not ruling that the Trial Court committed grave
abuse of discretion in denying petitioners motion to discharge attachment by
counter-bond in the amount of 12,600,000.00.
The then pertinent provision of Rule 57 (Preliminary Attachment) of the
Rules of Court under which the appellate court issued its assailed decision
and resolution, provides as follows: SEC. 12. Discharge of attachment upon
giving counter-bond. At any time after an order of attachment has been
granted, the party whose property has been attached, . . . may upon
reasonable notice to the applicant, apply to the judge who granted the order
or to the judge of the court which the action is pending, for an order
discharging the attachment wholly or in part on the security given. The judge
shall, after hearing, order the discharge of the attachment if a cash deposit is
made, or a counter-bond executed to the attaching creditor is filed, on behalf
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
of the adverse party, with the clerk or judge of the court where the
application is made in an amount equal to the value of the property attached
as determined by the judge, to secure the payment of any judgment that the
attaching creditor may recover in the action. xxx . Should such counter-bond
for any reason be found to be, or become insufficient, and the party
furnishing the same fail to file an additional counter-bond, the attaching
party may apply for a new order of attachment.
It is a well-settled rule that the amount of the counter-attachment bond is to
be measured against the value of the attached property, as determined by
the judge to secure the payment of any judgement that the attaching creditor
may recover in the action.
As things stood, therefore, respondents principal claim against petitioner
immediately prior to the filing of the motion to discharge attachment has
effectively been pruned down to 12,600,000.00. The trial court was fully
aware of this reality. Accordingly, it should have allowed a total discharge of
the attachment on a counter-bond based on the reduced claim of
respondent. If a portion of the claim is already secured, the court sees no
justifiable reason why such portion should still be subject of counter-bond.
The trial court, therefore, committed grave abuse of discretion when it
denied petitioners motion to discharge attachment by counter-bond in the
amount of P12,600,000.00, an amount more than double the attachment
bond required of, and given by, respondent. As a necessary consequence, the
Court of Appeals committed reversible error when it dismissed petitioners
recourse thereto in CA-G.R. SP No. 34876.
The present less stringent Section 12 of Rule 57 provides that the court shall
order the discharge of attachment if the movant makes a cash deposit, or
files a counter-bond . . . in an amount equal to that fixed by the court in the
order of attachment, exclusive of costs.
Hence, it was held that a writ of preliminary attachment cannot be issued for
moral and exemplary damages and other unliquidated and contingent claims.
KO Glass vs Valenzuela 116 SCRA 563
Facts:
- Main action: Recover sum of money worth P37,190.00 representing the
backrentals of the truck and value of spare parts which have not been
returned upon the termination of the lease; filed by Priv.Res Pinzon
against Kenneth Glass.
- Also prayed for writ of attachment against the property of Kenneth
consisting of collectibles and payables with Phil. Geothermal; Grounds:
(a) Kenneth is a foreigner, (b) he has sufficient cause of action, (c) no
sufficient security against Kenneth for his claim in case of favorable
judgment.
- Kenneth moved to quash the writ; Grounds: (a) He never intended to
leave the Phil, (b) the transaction entered was between KO Glass
Construction as a company and Pinzon - not with him, (c) the said
company has sufficient property in case of adverse judgment.
- CFI: ordered the writ
Issue: WON the issuance of the writ was proper
Ruling: No.
- 1st, there were no sufficient ground for the issuance.
- Rule 57, Sec. 1. Grounds upon which attachment may issue-A plaintiff or
any proper party may, at the commencement of the action or at any
time thereafter, have the property of the adverse party attached as
security for the satisfaction of any judgment that may be recovered in
the following cases:
(a) In an action for the recovery of money or damages on a cause of action arising
from contract, express or implied, against a party who is about to depart
from the Philippines with intent to defraud his creditor;
(b) In an action for money or property embezzled or fraudulently misapplied or
converted to his own use by a public officer, or an officer of a corporation, or
an attorney, factor, broker, agent, or clerk, in the course of his employment as
such, or by any other person in a fiduciary capacity, or for a willful violation of
duty;
(c) In an action to recover the possession of personal property unjustly detained,
11 of 50
 when the property, or any part thereof, has been concealed, removed, or
disposed of to prevent its being found or taken by the applicant or an officer;
(d) In an action against the party who has been guilty of a fraud in contracting the
debt or incurring the obligation upon which the action is brought, or in
concealing or disposing of the property for the taking, detention or
conversion of which the action is brought;
(e) In an action against a party who has removed or disposed of his property, or is
about to do so, with intent to defraud his creditors;
(f) In an action against a party who resides out of the Philippines, or on whom
summons may be served by publication.
- Pizon did not allege that Kenneth is a foreigner who may at any time
leave the country with intent to defraud the former. He merely stated
that he was a foreigner.
- 2nd, the affidavit did not follow the requirement.
- He did not state therein that "the case is one of those mentioned in
Section 1 hereof; that there is no other sufficient security for the claim
sought to be enforced by the action; and that the amount due to the
applicant is as much as the sum for which the order granted above all
legal counter-claims."
- 3rd, KO Glass Constr. already filed a counterbond. This would have
prompted the lower judge to discharge the attachment as required by
the Rules.
- Hence, the writ was improper.
Philippine Bank of Communications vs CA 352 SCRA 616
Facts:
- Main action: Claim of payment worth P2,244,926.30 representing the
proceeds of various textile goods which were covered by the credit and
trust receipts executed by petitioner with Priv.Res Filipinas Textile as
obligor, which in turn were covered by surety agreements executed by
Priv.Res Villanueva.
- Petitioner also moved for an attachment contending that violation of
the trust receipt law constitutes estafa, thus a valid ground for the
issuance. Also, the attachment was necessary since both Priv.Res were
disposing of their properties to the detriment of Petitioner.
- Both Priv.Res countered that they had already made partial payments.
- RTC: grant the writ
- Both Priv.Res filed for separate petition for certiorari.
- CA: In CA-GR SP 32762, ruled that lower court gravely abused its
discretion in issuing the writ since petitioner failed to substantiate its
allegations of fraud, embezzlement or misappropriation. In CA-GR SP
32863, no sufficient basis for the issuance since there were merely
general averments.
Issue: WON the writ of attachment was proper
Ruling: No.
- In CA-GR SP 32863, to have a valid attachment, there must be specific
allegations of the facts warranting its issuance.
- Section 1(b) and (d), Rule 57 of the then controlling Revised Rules of
Court, provides, to wit
SECTION 1. Grounds upon which attachment may issue. A plaintiff or any proper
party may, at the commencement of the action or at any time thereafter,
have the property of the adverse party attached as security for the
satisfaction of any judgment that may be recovered in the following cases:
x xxxxxxxx
(b) In an action for money or property embezzled or fraudulently misapplied or
converted to his use by a public officer, or an officer of a corporation, or an
attorney, factor, broker, agent or clerk, in the course of his employment as
such, or by any other person in a fiduciary capacity, or for a willful violation of
duty;
x xxxxxxxx
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
(d) In an action against a party who has been guilty of fraud in contracting the debt
or incurring the obligation upon which the action is brought, or in concealing
or disposing of the property for the taking, detention or conversion of which
the action is brought;
- While thisinvolves trust receipts, the violation of the terms of which is
qualified by law as constituting estafa, it does not follow that a writ of
attachment can and should automatically issue. Petitioner cannot
merely cite Section 1(b) and (d), Rule 57, of the Revised Rules of Court,
as mere reproduction of the rules, without more, cannot serve as good
ground for issuing a writ of attachment. An order of attachment cannot
be issued on a general averment.
- He cannot further insist that the failure to remit the proceeds of the
entrusted goods warrants the issuance of the writ of attachment.
- It must be shown that the incurring of the obligation was intended to
defraud the creditor. The admission of Petitioner on the fact that
Priv.Res paid partially the debt even weakened his ground. This shows
that they were willing to pay at the first place.
- In CA-GR SP 32762, the lower court should have conducted a hearing to
substantiate the allegations of fraud, embezzlement, or
misappropriation. Again, these are merely general averments and
specific allegations are needed to warrant the issuance of the subject
writ. Also, Priv.Res were not afforded with opportunity to ventilate their
defenses.
- Final note, strict rules should be followed in issuance of a writ of
attachment being a harsh, extraordinary, and summary remedy. Hence,
construed strictly against the applicant.
- Therefore, the writ was improper.
Javellana vs DO Plaza 32 SCRA 261
Facts:
- Main action: Collection of sum of money worth P43,017.32
representing the balance due on purchases of wire, tractors, and diesel
parts made by DO Plaza from Javellana.
- He also prayed for a writ of preliminary attachment.
- RTC: issued the writ upon issuance of the bond (April 15, 1961), but was
dissolved upon the filing of the counter-bond of DO Plaza (May 7, 1966).
- RTC: first ruled in favor of Javellana in the main action where it found
DO to be in bad faith in issuing the bouncing checks. However, it was
modified and granted the damages in favor of DO Plaza arising from the
attachment, based on its counter-claim.
Issue: WON the granting of the damages arising from the attachment was
proper
Ruling: Yes.
- Although the defendant was found to be in bad faith in issuing two (2)
sets of bouncing checks in payment for its indebtedness, such bad faith
was not related to his having incurred the obligation in favor of the
plaintiff but to defendant's failure to perform said obligation.
- There was, therefore, no ground for the plaintiff to attach the
defendant's properties on the ground of fraud.
- That the plaintiff acted in good faith in securing attachment does not
relieve him from the damages that the defendant sustained by reason
of the attachment because he, the plaintiff, was, in the first place, not
entitled to attachments, the element of malice was unnecessary.
G.R. No. 184666, June 27, 2016
REPUBLIC OF THE PHILIPPINES, Petitioner, v. MEGA PACIFIC ESOLUTIONS, INC.,
WILLY U. YU, BONNIE S. YU, ENRIQUE T. TANSIPEK, ROSITA Y. TANSIPEK, PEDRO O.
TAN, JOHNSON W. FONG, BERNARD I. FONG, AND *LAURIANO A.
BARRIOS, Respondents.
FACTS:
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1. Republic Act No. 8436 authorized the COMELEC to use an automated
election system for the May 1998 elections. However, the automated
system failed to materialize and votes were canvassed manually during
the 1998 and the 2001 elections.
2. For the 2004 elections, the COMELEC again attempted to implement the
automated election system. For this purpose, it invited bidders to apply
for the procurement of supplies, equipment, and services.
3. Respondent MPEI, as lead company, purportedly formed a joint venture
- known as the Mega Pacific Consortium (MPC) - together with We Solv,
SK C & C, ePLDT, Election.com and Oracle. Subsequently, MPEI, on
behalf of MPC, submitted its bid proposal to COMELEC.
4. After due assessment, the Bids and Awards Committee (BAC)
recommended that the project be awarded to MPC. The COMELEC
favorably acted on the recommendation and issued Resolution No.
6074, which awarded the automation project to MPC.
5. Despite the award to MPC, the COMELEC and MPEI executed on 2 June
2003 the Automated Counting and Canvassing Project Contract
(automation contract)5 for the aggregate amount of P1,248,949,088.
6. MPEI agreed to supply and deliver 1,991 units of ACMs and such other
equipment and materials necessary for the computerized electoral
system in the 2004 elections. Pursuant to the automation contract,
MPEI delivered 1,991 ACMs to the COMELEC. The latter, for its part,
made partial payments to MPEI in the aggregate amount of P1.05
billion.
7. This Court in its 2004 Decision declared the contract null and void.6 We
held that the COMELEC committed a clear violation of law and
jurisprudence, as well as a reckless disregard of its own bidding rules
and procedure.
8. All in all, Comelec subverted the essence of public bidding: to give the
public an opportunity for fair competition and a clear basis for a precise
comparison of bids.
THE INSTANT CASE
Complaint for Damages filed by respondents with the RTC Makati and
petitioner's Answer with Counterclaim, with an application for a writ
of preliminary attachment, from which the instant case arose
9. Upon the finality of the declaration of nullity of the automation
contract, respondent MPEI filed a Complaint for Damages before the
RTC Makati, arguing that, notwithstanding the nullification of the
automation contract, the COMELEC was still bound to pay the amount
of P200,165,681.89. This amount represented the difference between
the value of the ACMs and the support services delivered on one hand,
and on the other, the payment previously made by the COMELEC.
10. By way of a counterclaim, petitioner demanded from respondents the
return of the payments made pursuant to the automation contract. 26 It
argued that individual respondents, being the incorporators of MPEI,
likewise ought to be impleaded and held accountable for MPEI's
liabilities. The creation of MPC was, after all, merely an ingenious
scheme to feign eligibility to bid.
11. Pursuant to Section 1(d) of Rule 57 of the Rules of Court, petitioner
prayed for the issuance of a writ of preliminary attachment against the
properties of MPEI and individual respondents. The application was
grounded upon the fraudulent misrepresentation of respondents as to
their eligibility to participate in the bidding for the COMELEC
automation project and the failure of the ACMs to comply with
mandatory technical requirements.
12. The trial court denied the prayer for the issuance of a writ of
preliminary attachment,29 ruling that there was an absence of factual
allegations as to how the fraud was actually committed.
13. The trial court further ruled that the allegations of fraud on the part of
MPEI were not supported by the COMELEC, the office in charge of
conducting the bidding for the election automation contract. It was
likewise held that there was no evidence that respondents harbored a
preconceived plan not to comply with the obligation; neither was there
any evidence that MPEI's corporate fiction was used to perpetrate
fraud. Thus, it found no sufficient basis to pierce the veil of corporate
fiction or to cause the attachment of the properties owned by individual
respondents.
14. Petitioner moved to set aside the trial court's Order denying the writ of
attachment,30 but its motion was denied.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
15. Aggrieved, petitioner filed an appeal with the CA.
16. The CA in its First Decision32 reversed and set aside the trial court's
Orders and ruled that there was sufficient basis for the issuance of a
writ of attachment in favor of petitioner.
17. The appellate court explained that the averments of petitioner in
support of the latter's application actually reflected pertinent
conclusions reached by this Court in its 2004 Decision. It held that the
trial court erred in disregarding the following findings of fact, which
remained unaltered and unreversed: (1) COMELEC bidding rules
provided that the eligibility and capacity of a bidder may be proved
through financial documents including, among others, audited financial
statements for the last three years; (2) MPEI was incorporated only on
27 February 2003, or 11 days prior to the bidding itself; (3) in an
attempt to disguise its ineligibility, MPEI participated in the bidding as
lead company of MPC, a putative consortium, and submitted the
incorporation papers and financial statements of the members of the
consortium; and (4) no proof of the joint venture agreement,
consortium agreement, memorandum of agreement, or business plan
executed among the members of the purported consortium was ever
submitted to the COMELEC.
18. According to the CA, the foregoing were glaring indicia or badges of
fraud, which entitled petitioner to the issuance of the writ.
19. Respondents moved for reconsideration 36 of the First Decision of the
CA.
20. The CA reconsidered its First Decision37 and directed the remand of the
case to the RTC Makati for the reception of evidence of allegations of
fraud and to determine whether attachment should necessarily issue.
21. The CA explained in its Amended Decision that respondents could not
be considered to have fostered a fraudulent intent to dishonor their
obligation, since they had delivered 1,991 units of ACMs.
22. Petitioner filed the instant Rule 45 Petition,45 arguing that the CA erred
in ordering the remand of the case to the trial court for the reception of
evidence to determine the presence of fraud.
ISSUE:
Whether a writ of preliminary attachment may be issued against the
properties of individual respondents, considering that they were not parties to the
2004 case.
HELD:
The Petition is meritorious. A writ of preliminary attachment should issue in favor
of petitioner over the properties of respondents MPEI, Willy Yu (Willy) and the
remaining individual respondents, namely: Bonnie S. Yu (Bonnie), Enrique T.
Tansipek (Enrique), Rosita Y. Tansipek (Rosita), Pedro O. Tan (Pedro), Johnson W.
Fong (Johnson), Bernard I. Fong (Bernard), and Lauriano Barrios (Lauriano). The
bases for the writ are the following:
1. Fraud on the part of respondent MPEI was sufficiently established by
the factual findings of this Court in its 2004 Decision and subsequent
pronouncements.
2. A writ of preliminary attachment may issue over the properties of the
individual respondents using the doctrine of piercing the corporate veil.
3. The factual findings of this Court that have become final cannot be
modified or altered, much less reversed, and are controlling in the
instant case.
4. The delivery of 1,991 units of ACMs does not negate fraud on the part
of respondents MPEI and Willy.
5. Estoppel does not lie against the state when it acts to rectify mistakes,
errors or illegal acts of its officials and agents.
6. The findings of the Ombudsman are not controlling in the instant case.
A writ of preliminary attachment is a provisional remedy issued upon the order of
the court where an action is pending. Through the writ, the property or properties
of the defendant may be levied upon and held thereafter by the sheriff as security
for the satisfaction of whatever judgment might be secured by the attaching
creditor against the defendant.61 The provisional remedy of attachment is available
in order that the defendant may not dispose of the property attached, and thus
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prevent the satisfaction of any judgment that may be secured by the plaintiff from
the former.
The purpose and function of an attachment or garnishment is twofold. First, it
seizes upon property of an alleged debtor in advance of final judgment and holds it
subject to appropriation, thereby preventing the loss or dissipation of the property
through fraud or other means. Second, it subjects the property of the debtor to
the payment of a creditor's claim, in those cases in which personal service upon
the debtor cannot be obtained.63 This remedy is meant to secure a contingent lien
on the defendant's property until the plaintiff can, by appropriate proceedings,
obtain a judgment and have the property applied to its satisfaction, or to make
some provision for unsecured debts in cases in which the means of satisfaction
thereof are liable to be removed beyond the jurisdiction, or improperly disposed of
or concealed, or otherwise placed beyond the reach of creditors.
Section 1(d), Rule 57 of the Rules of Court
Section 1. Grounds upon which attachment may issue. At the commencement of
the action or at any time before entry of judgment, a plaintiff or any proper party
may have the property of the adverse party attached as security for the
satisfaction of any judgment that may be recovered in the following cases:
x xxx
(d) In an action against a party who has been guilty of a fraud in contracting the
debt or incurring the obligation upon which the action is brought, or in
the performance thereof. (Emphasis supplied)
For a writ of preliminary attachment to issue under the above-quoted rule, the
applicant must sufficiently show the factual circumstances of the alleged fraud.
Metro, Inc. v. Lara's Gift and Decors, Inc., To sustain an attachment on this ground,
it must be shown that the debtor in contracting the debt or incurring the obligation
intended to defraud the creditor. The fraud must relate to the execution of the
agreement and must have been the reason which induced the other party into
giving consent which he would not have otherwise given. To constitute a ground
for attachment in Section 1(d), Rule 57 of the Rules of Court, fraud should be
committed upon contracting the obligation sued upon. A debt is fraudulently
contracted if at the time of contracting it the debtor has a preconceived plan or
intention not to pay, as it is in this case. x xx.
The applicant for a writ of preliminary attachment must sufficiently show the
factual circumstances of the alleged fraud because fraudulent intent cannot be
inferred from the debtor's mere non-payment of the debt or failure to comply with
his obligation. (Emphasis supplied)
An amendment to the Rules of Court added the phrase "in the performance
thereof" to include within the scope of the grounds for issuance of a writ of
preliminary attachment those instances relating to fraud in the performance of the
obligation.
In the case at bar, petitioner has sufficiently discharged the burden of
demonstrating the commission of fraud by respondent MPEI in the execution of
the automation contract in the two ways:
A. Respondent MPEI had perpetrated a scheme against petitioner to
secure the automation contract by using MPC as supposed bidder and
eventually succeeding in signing the automation contract as MPEI
alone, an entity which was ineligible to bid in the first place.
B. B. Fraud on the part of respondent MPEI was further shown by the
fact that despite the failure of its ACMs to pass the tests conducted by
the DOST, respondent still acceded to being awarded the automation
contract.
G.R. No. 135830 September 30, 2005
JUAN DE DIOS CARLOS, Petitioners,
vs.
FELICIDAD SANDOVAL, also known as FELICIDAD S. VDA. DE CARLOS or FELICIDAD
S. CARLOS or FELICIDAD SANDOVAL DE CARLOS, and TEOFILO CARLOS
II, Respondent.
FACTS: (factual background may be complicated swear!!!)
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
1. Carlos asserted that he was the sole surviving compulsory heir of his
parents, Felix B. Carlos and Felipa Elemia,1 who had acquired during
their marriage, six parcels of land (subject properties).
2. His brother, Teofilo ("Teofilo"), died intestate in 1992. At the time of his
death, Teofilo was apparently married to Sandoval, and cohabiting with
her and their child, respondent Teofilo II.
3. Nonetheless, Carlos alleged in his Complaint that Teofilo and Sandoval
were not validly married as they had not obtained any marriage
license.2Furthermore, Carlos also asserted that Teofilo II could not be
considered as Teofilos child. As a result, Carlos concluded that he was
also the sole heir of his brother Teofilo, since the latter had died
without leaving any heirs.
4. Carlos also claimed that Teofilo, prior to their father Felixs death in
1963, developed a scheme to save the elder Carloss estate from
inheritance taxes. Under the scheme, the properties of the father would
be transferred to Teofilo who would, in turn, see to it that the shares of
the legal heirs are protected and delivered to them. Felix assented to
the plan, and the subject properties were transferred in the name of
Teofilo.
5. After Teofilos death, Carlos entered into certain agreements with
Sandoval in connection with the subject properties. Carlos did so,
believing that the latter was the lawful wife of his brother Teofilo.
Subsequently though, Carlos discovered that Sandoval and his brother
were never validly married, as their marriage was contracted without a
marriage license.3
6. Carlos now sought to nullify these agreements with Sandoval for want
of consideration, the premise for these contracts being non-existent.
7. Carlos prayed of the RTC to declare the alleged marriage between
Teofilo and Sandoval void ab initio, provided that Teofilo died without
issue, order that new titles covering the subject properties be issued in
the name of Carlos, and require Sandoval to restitute Carlos in the
amount of P18,924,800.00.4
8. Carlos likewise prayed for the issuance of the provisional relief of
preliminary attachment.
9. The RTC issued an Order dated 7 September 1995 granting the prayer
for preliminary attachment, and on 15 September 1995, a writ of
preliminary attachment. Carlos posted a bond for P20,000,000.00
issued by herein petitioner
10. Respondents filed an Urgent Motion to Discharge the Writ of
Attachment, which was opposed by Carlos. On 4 December 1995, the
RTC rendered an order denying the motion. This caused respondents to
file a Petition for Certiorari with the Court of Appeals, seeking to set
aside the RTC order granting the writ of preliminary attachment denying
the motion for the discharge of the writ.
11. On 27 February 1996, the Court of Appeals Second Division
promulgated its Decision in CA-G.R. SP No. 39267, wherein it granted
the Petition for Certiorari and ordered the discharge and dissolution of
the Writ of Attachment and Notice of Garnishment.7
12. Court of Appeals found that there was no sufficient cause of action to
warrant the preliminary attachment, since Carlos had merely alleged
general averments in order to support his prayer.
13. Carlos elevated the said Decision to this Court by way of Petition for
Review on Certiorari. The Court denied Carloss Petition, and thus the
Court of Appeals Decision ordering the dissolution of the Writ of
Attachment and Notice of Garnishment became final.
14. In the meantime, the hearing on Carloss Complaint ensued before the
RTC.
15. On 8 April 1996, the RTC rendered a summary judgment in favor of
Carlos.
16. Meanwhile, respondents filed a Motion for Reconsideration of the
Summary Judgment, which was denied in an Order dated 20 May 1996.
17. Respondents then appealed the RTC Decision to the Court of Appeals.
18. Respondents filed a Motion for Judgment On the Attachment
Bond. They noted that the Court of Appeals had already ruled that
the Writ of Preliminary Attachment issued by the RTC was improperly
granted and that its Decision, as affirmed by the Supreme Court, had
attained finality. Accordingly, they were entitled to damages under
Section 20, Rule 57 of the then Rules of Civil Procedure, which governed
claims for damages on account of unlawful attachment.
19. The Court of Appeals Former Special Fourth Division promulgated two
resolutions.
20. The second resolution is at the center of the present petitions. The
assailed Resolution agreed with respondents that it was first necessary
to resolve the pending incidents before the case could be re-raffled for
study and report.
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 21. This Resolution tackled the other matter left unresolved, the Motion for
Judgment on Attachment Bond. The Court of Appeals found the claim
for damages meritorious, citing the earlier decisions ruling that Carlos
was not entitled to the preliminary attachment. Invoking Section 20,
Rule 57 of the Rules of Court, as well as jurisprudence,17 the Court of
Appeals ruled that it was not necessary for the determination of
damages on the injunction bond to await the decision on appeal.
22. Both Carlos and SIDDCOR filed their respective motions for
reconsideration of the Resolution. For their part, respondents filed
a Motion for Immediate Execution dated 7 August 1998 in regard to
the Resolution of 26 June 1998 awarding them damages.
23. The Court of Appeals denied the motions for reconsideration and
granted the Motion for Immediate Execution.
ISSUE:
Whether the Court of Appeals properly complied with the hearing
requirement under Section 20, Rule 57 prior to its judgment on the attachment
bond.
HELD:
Section 20, Rule 57 of the 1997 Rules of Civil Procedure.
SECTION 20. Claim for damages on account of improper, irregular or excessive
attachment.An application for damages on account of improper, irregular or
excessive attachment must be filed before the trial or before appeal is perfected or
before the judgment becomes executory, with due notice to the attaching obligee
or his surety or sureties, setting forth the facts showing his right to damages and
the amount thereof. Such damages may be awarded only afer proper hearing
and shall be included in the judgment on the main case.
If the judgment of the appellate court be favorable to the party against whom the
attachment was issued, he must claim damages sustained during the pendency of
the appeal by filing an application in the appellate court with notice to the party in
whose favor the attachment was issued or his surety or sureties, before the
judgment of the appellate court becomes executory. The appellate court may allow
the application to be heard and decided by the trial court.
Nothing herein contained shall prevent the party against whom the attachment
was issued from recovering in the same action the damages awarded to him from
any property of the attaching obligee not exempt from execution should the bond
or deposit given by the latter be insufficient or fail to fully satisfy the award.
(Emphasis supplied.)
Section 20 essentially allows the application to be filed at any time before the
judgment becomes executory. It should be filed in the same case that is the main
action, and cannot be instituted separately. 34 It should be filed with the court
having jurisdiction over the case at the time of the application.35 The remedy
provided by law is exclusive and by failing to file a motion for the determination of
the damages on time and while the judgment is still under the control of the court,
the claimant loses his right to damages.36
There is no question in this case that the Motion for Judgment on the Attachment
Bond filed by respondents on 10 December 1996 was properly filed since it was
filed with the Court of Appeals during the pendency of the appeal in the main case
and also as an incident thereto.
Section 20 of Rule 57 requires that there be a "proper hearing" before the
application for damages on the attachment bond may be granted. The hearing
requirement ties with the indispensable demand of procedural due process. Due
notice to the adverse party and its surety setting forth the facts supporting the
applicant's right to damages and the amount thereof under the bond is essential.
No judgment for damages may be entered and executed against the surety without
giving it an opportunity to be heard as to the reality or reasonableness of the
damages resulting from the wrongful issuance of the writ.37
In Paramount Insurance v. Court of Appeals,38 the Court held that under the rule, it
was neither mandatory nor fatal that there should be a separate hearing in order
that damages upon the bond can be claimed, ascertained and awarded. 39 What is
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
necessary only is for the attaching party and his surety or sureties to be duly
notified and given the opportunity to be heard. 40
In this case, both Carlos and SIDDCOR were duly notified by the appellate court of
the Motion for Judgment on the Attachment Bond and were required to file their
respective comments thereto.41 Carlos and SIDDCOR filed their respective
comments in opposition to private respondents motion.42 Clearly, all the relevant
parties had been afforded the bare right to be heard on the matter.
Plainly, there is no express requirement under the rule that the hearing be done in
open court, or that the parties be allowed to confront adverse witnesses to the
claim of damages on the bond.
Peroxide Philippines Corp. v. Court of Appeals: . . . [It] is undeniable that when the
attachment is challenged for having been illegally or improperly issued, there must
be a hearing with the burden of proof to sustain the writ being on the attaching
creditor. That hearing embraces not only the right to present evidence but also a
reasonable opportunity to know the claims of the opposing parties and meet
them. The right to submit arguments implies that opportunity, otherwise the right
would be a barren one. It means a fair and open hearing.
In this case, we rule that the demands of a "proper hearing" were satisfied as of
the time the Court of Appeals rendered its assailed judgment on the attachment
bond. The circumstances in this case that we consider particularly telling are the
settled premises that the judicial finding on the wrongfulness of the attachment
was then already conclusive and beyond review, and that the amount of actual
damages sustained was likewise indubitable as it indeed could be found in the
official case record in CA-G.R. CV No. 53229. As a result, petitioners would have
been precluded from either raising the defenses that the preliminary attachment
was valid or disputing the amount of actual damages sustained by reason of the
garnishment.
Moreover, petitioners were afforded the opportunity to counter the arguments
extended by the respondents. They fully availed of that right by submitting their
respective comments/oppositions. In fine, the due process guarantee has been
satisfied in this case.
Section 20, Rule 57 does state that the award of damages shall be included in the
judgment on the main case, and seemingly indicates that it should not be rendered
prior to the adjudication of the main case.
Under Section 20, Rule 57 of the 1964 Rules of Court, it was provided that there
must be first a judgment on the action in favor of the party against whom
attachment was issued before damages can be claimed by such party. 50 The Court
however subsequently clarified that under the rule, "recovery for damages may be
had by the party thus prejudiced by the wrongful attachment, even if the judgment
be adverse to him."51
It is indubitable that even a party who loses the action in main but is able to
establish a right to damages by reason of improper, irregular, or excessive
attachment may be entitled to damages. This bolsters the notion that the claim for
damages arising from such wrongful attachment may arise and be decided
separately from the merits of the main action.
In this case, we are confronted with a situation wherein the determination that the
attachment was wrongful did not come from the trial court, or any court having
jurisdiction over the main action. It was rendered by the Court of Appeals in the
exercise of its certiorari jurisdiction in the original action reviewing the propriety of
the issuance of the Writ of Preliminary Attachment against the private
respondents. Said ruling attained finality when it was affirmed by this Court.
Nevertheless, Section 20, Rule 57 explicitly provides that the award for damages be
included in the judgment on the main case. This point was apparently not lost on
the Court of Appeals when it rendered its Resolution dated 23 March 1998,
certifying that the case may now be referred to the Raffle Committee for
assignment to a ponente. The appellate court stated therein: "The Resolution of
defendants-appellants motion for judgment on the attachment may be
incorporated in the decision by the ponente for study and report,"53 and such
observation is in conformity with Section 20.
15 of 50
Respondents may be generally correct on the point that a case can only be deemed
submitted for decision only after all pending incidents are resolved. Yet since
Section 20, Rule 57 provides that their application for damages on the attachment
bond "shall be included in the judgment on the main case," it is clear that the
award for damages need not be resolved before the case is submitted for decision,
but should instead be resolved and included in the judgment on the main case, or
the decision on the Appeal by Certiorari filed by the respondents.
Thus, the action of the Court of Appeals in resolving the application for damages
even before the main judgment was issued does not conform to Section 20, Rule
57. However, the special particular circumstances of this case lead us to rule that
such error is not mortal to the award of damages.
Moreover, we are compelled to appreciate the particular
circumstance in this case that the right of private
respondents to acquire relief through the award of damages
on account of the wrongful preliminary attachment has
been conclusively affirmed by the highest court of the land.
This differs from the normal situation under Section 20, Rule
57 wherein the court having jurisdiction over the main
action is still required to ascertain whether the applicant
actually has a right to damages. To mandatorily require that
the award of damages be included in the judgment in the
main case makes all the sense if the right to damages would
be ascertained at the same time the main judgment is
made. However, when the said right is already made viable
by reason of a final judgment which is no longer subject to
review, there should be no unnecessary impediments to its
immediate implementation.
G.R. No. 158271
CHINA BANKING CORPORATION,
Petitioner,
Present:
AUSTRIA-MARTINEZ, J.,
Acting Chairperson,
- versus - TINGA,*
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
ASIAN CONSTRUCTION and
DEVELOPMENT CORPORATION, Promulgated:
Respondent. April 8, 2008
FACTS:
1. China Bank granted respondent Asian Construction and Development
Corporation (ACDC) an Omnibus Credit Line in the amount of P90,
000,000.00. Alleging that ACDC failed to comply with its obligations
under the Omnibus Credit Line, China Bank filed a Complaint for
recovery of sum of money and damages with prayer for the issuance of
writ of preliminary attachment before the Regional Trial Court (RTC) of
Makati.
2. The RTC issued an Order granting China Banks prayer for writ of
preliminary attachment. Consequently, as shown in the Sheriffs Report,
the writ of preliminary attachment was implemented levying personal
properties of ACDC, i.e., vans, dump trucks, cement mixers, cargo
trucks, utility vehicles, machinery, equipment and office machines and
fixtures.
3. Upon motion of China Bank, the RTC issued a Summary Judgment [ in
favor of China Bank. China Bank filed a Motion to Take Custody of
Attached Properties with Motion for Grant of Authority to Sell to the
Branch Sheriff[10] with the RTC, praying that it be allowed to take
custody of ACDCs properties for the purpose of selling them in an
auction.
4. ACDC filed its Opposition to the June 15, 2000 Motion arguing that
there can be no sale of the latters attached properties in the absence of
a final and executory judgment against ACDC. According to the CA,
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
selling the attached properties prior to final judgment of the appealed
case is premature and contrary to the intent and purpose of preliminary
attachment for the following reasons: first, the records reveal that the
attached properties subject of the motion are not perishable in nature;
and second, while the sale of the attached properties may serve the
interest of China Bank, it will not be so for ACDC.
ISSUE:
Whether or not the honorable COURT OF APPEALS rendered the
questioned resolutions in a manner not in accord with the provisions of section 11,
rule 57 of the rules of civil procedure, as it shelved the demands of equity by
arbitrarily disallowing the sale of the attached properties.
HELD:
Section 11, Rule 57 of the Rules of Court provides:
Sec. 11. When attached property may be sold after levy on attachment and before
entry of judgment.- Whenever it shall be made to appear to the court in which the
action is pending, upon hearing with notice to both parties, that the property
attached is perishable, or that the interests of all the parties to the action will
be subserved by the sale thereof, the court may order such property to be sold at
public auction in such manner as it may direct, and the proceeds of such sale to be
deposited in court to abide the judgment in the action. (Emphasis supplied)
Thus, an attached property may be sold after levy on attachment and before entry
of judgment whenever it shall be made to appear to the court in which the action
is pending, upon hearing with notice to bothparties, that the attached property is
perishable or that the interests of all the parties to the action will
be subserved by the sale of the attached property.
The issue hinges on the determination whether the vehicles, office machines and
fixtures are perishable property under Section 11, Rules 57 of the Rules of Court,
which is actually one of first impression. No local jurisprudence or authoritative
work has touched upon this matter. This being so, an examination of foreign laws
and jurisprudence, particularly those of the United Stateswhere some of our laws
and rules were patterned after, is in order.
In Mossler Acceptance Co. v. Denmark, an order of the lower court in directing the
sale of attached properties, consisting of 20 automobiles and 2 airplanes, was
reversed by the Supreme Court ofLouisiana. In support of its contention that
automobiles are perishable, Mossler offered testimony to the effect that
automobile tires tend to dry-rot in storage, batteries to deteriorate, crankcases to
become damaged, paint and upholstery to fade, that generally automobiles tend
to depreciate while in storage. Rejecting these arguments, the Supreme Court of
Louisiana held that while there might be a depreciation in the value of a car during
storage, depending largely on existing economic conditions, there would be no
material deterioration of the car itself or any of its appurtenances if the car was
properly cared for, and therefore it could not be said that automobiles were of a
perishable nature within the intendment of the statute, which could only be
invoked when the property attached and seized was of a perishable nature.
China Bank argues that if the CA allowed the attached properties to be sold,
whatever monetaryvalue which the attached properties still have will be realized
and saved for both parties. China Bank further claims that should ACDC prevail in
the final judgment of the collection suit, ACDC can proceed with the bond posted
by China Bank. The Court finds said arguments to be specious and misplaced.
Section 4, Rule 57 of the Rules of Court provides:
Section 4. Condition of applicants bond. - The party applying for the order must
thereafter give a bond executed to the adverse party in the amount fixed by the
court in its order granting the issuance of the writ, conditioned that the latter will
pay all the costs which may be adjudged to the adverse party and all the damages
which he may sustain by reason of the attachment, if the court shall finally adjudge
that the applicant was not entitled thereto.
It is clear from the foregoing provision that the bond posted by China Bank answers
only for the payment of all damages which ACDC may sustain if the court shall
finally adjudge that China Bank was not entitled to attachment. The liability
attaches if the plaintiff is not entitled to the attachment because the requirements
entitling him to the writ are wanting, or if the plaintiff has no right to the
attachment because the facts stated in his affidavit, or some of them are untrue.
Clearly, ACDC can only claim from the bond for all the damages which it may
16 of 50
sustain by reason of the attachment and not because of the sale of the attached
properties prior to final judgment.
Sale of attached property before final judgment is an equitable remedy provided
for the convenience of the parties and preservation of the property. To repeat, the
Court finds that the issue of whether the sale of attached properties is for the
convenience of the parties and that the interests of all the parties
willbe subserved by the said sale is a question of fact. Again, the foregoing issue
can only be resolved upon examination of the evidence presented by both parties
which the Court cannot do in a petition for certiorari under Rule 65 of the Rules of
Court.
LUZON DEVELOPMENT BANK, TOMAS CLEMENTE, JR., and OSCAR RAMIREZ vs.
ERLINDA KRISHNAN
G.R. No. 203530 April 13, 2015
A Party Seeking A Stay Of The Attachment Under Section 5 Rule 57 Is Required To
Deposit An Amount Of Money Or Cash Equal To The Attachment Bond,
Amount Being A Term Plainly Associated With Money
The Facts:
Erlinda in her Complaint for Collection of Sum of Money and Damages against
petitioners Luzon Development Bank, Tomas Clemente Jr., and Oscar Ramirez
alleged that she is a client of the bank and maintained several deposits including
time deposits. When she presented her Certificates of Time Deposits for payment
because they have become due, the petitioners refused to honor it for the reason
they were fraudulent. She likewise applied for a Writ of Preliminary Attachment
which the trial court granted. Thus, the petitioner banks accounts in BPI
( P28,597,472.70 ) and Central Bank (P49,000,000.00) were garnished. The
petitioners then filed an urgent Motion To Recall Quash And/Or Lift Attachment or
Garnishment, which the respondent opposed. They filed on March 9, 2001 an
urgent motion to substitute their garnished accounts with government securities.
Again respondent opposed the motion. The RTC then required the petitioners to
justify their motion to discharge. On September 8, 2003, the RTC lifted the
garnishment; Erlinda moved to reconsider and for the judge to inhibit. The judge
denied the motion for reconsideration but granted the motion for inhibition.
Erlinda then elevated the matter to the Court of Appeals thru a petition for
certiorari, which the appellate court granted. It directed the petitioners to file a
counter bond in accordance with Sec. 12 Rule 57 of the Rules of Civil Procedure
within 10 days from finality of the decision otherwise, the RTC shall immediately
reinstate the writ of attachment previously issued. Since their appeal to the
Supreme Court was denied, the case was remanded to the RTC which required
Erlinda to post a new attachment bond in the amount of P35,000,000.00, and for
petitioners to file a counter bond within 10 days from notice of the filing and
approval of Erlindas bond. Erlinda filed her attachment bond on June 25, 2009,
and the same was approved by the RTC on July 7, 2009. Petitioners then filed an
Omnibus Motion to determine the sufficiency of the bond and for them to be
allowed to deposit Certificates of Titles of real property, and that the issuance of
the writ of attachment be held in abeyance. The RTC denied the motion and the
subsequent motion for reconsideration; petitioners assailed the denial of their
motions thru a petition for certiorari with the CA, which also denied them. Thus,
they appealed to the Supreme Court.
The Issue:
Whether or not real property may be posted, in lieu of cash or counter bond, to
secure any continent lien on the petitioners property, since Section 2 of Rule 57
only mentions deposit, thus it cannot be confined or construed to refer to cash.
The Ruling:
We rule in the negative.
Section 2, Rule 57 of the Rules of Court explicitly states that [a]n order of
attachment may be issued either ex parte or upon motion with notice and hearing
by the court in which the action is pending, or by the Court of Appeals or the
Supreme Court, and must require the sheriff of the court to attach so much of the
property in the Philippines of the party against whom it is issued, not exempt from
execution, as may be sufficient to satisfy the applicants demand, unless such party
makes deposit or gives a bond as hereinafter provided in an amount equal to that
fixed in the order, which may be the amount sufficient to satisfy the applicants
demand or the value of the property to be attached as stated by the applicant,
exclusive of costs.
Section 5 of the same Rule likewise states that [t]he sheriff enforcing the writ shall
without delay and with all reasonable diligence attach, to await judgment and
execution in the action, only so much of the property in the Philippines of the party
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
against whom the writ is issued, not exempt from execution, as may be sufficient
to satisfy the applicants demand, unless the former makes a deposit with the
court from which the writ is issued, or gives a counter-bond executed to the
applicant, in an amount equal to the bond fixed by the court in the order of
attachment or to the value of the property to be attached, exclusive of costs.
From the foregoing, it is evidently clear that once the writ of attachment has been
issued, the only remedy of the petitioners in lifting the same is through a cash
deposit or the filing of the counter-bond. Thus, the Court holds that petitioners
argument that it has the option to deposit real property instead of depositing cash
or filing a counter-bond to discharge the attachment or stay the implementation
thereof is unmeritorious.
In fact, in Security Pacific Assurance Corporation v. Tria-Infante,1 we held that one
of the ways to secure the discharge of an attachment is for the party whose
property has been attached or a person appearing on his behalf, to post a
counterbond or make the requisite cash deposit in an amount equal to that fixed
by the court in the order of attachment.2
Apropos, the trial court aptly ruled that while it is true that the word deposit
cannot only be confined or construed to refer to cash, a broader interpretation
thereof is not justified in the present case for the reason that a party seeking a stay
of the attachment under Section 5 is required to make a deposit in an amount
equal to the bond fixed by the court in the order of attachment or to the value of
the property to be attached. The proximate relation of the word deposit and
amount is unmistakable in Section 5 of Rule 57. Plainly, in construing said words,
it can be safely concluded that Section 5 requires the deposit of money as the word
amount commonly refers to or is regularly associated with a sum of money.
In Alcazar v. Arante,3 we held that in construing words and phrases used in a
statute, the general rule is that, in the absence of legislative intent to the contrary,
they should be given their plain, ordinary and common usage meaning. The words
should be read and considered in their natural, ordinary, commonly-accepted and
most obvious signification, according to good and approved usage and without
resorting to forced or subtle construction. Words are presumed to have been
employed by the lawmaker in their ordinary and common use and
acceptation.4 Thus, petitioners should not give a special or technical interpretation
to a word which is otherwise construed in its ordinary sense by the law and
broaden the signification of the term deposit to include that of real properties.
A.M. No. RTJ-06-1999
Dec 8,2010
(Formerly OCA IPI No. 03-1903-RTJ)
BANGKO SENTRAL NG PILIPINAS, Complainant,
vs.
Executive Judge ENRICO A. LANZANAS, Regional Trial Court, Branch 7, Manila,
Clerk of Court JENNIFER DELA CRUZ-BUENDIA and Deputy Sheriff CARMELO V.
CACHERO, Regional Trial Court, Office of the Clerk of Court, Manila, Respondents.
BRION, J.:
FACTS:
(1) the present administrative matter involves the alleged irregular withdrawals of
funds in custodia legis;
(2) the funds consist of the garnished amounts representing rental payments from
lessees of defendants Orient Commercial Banking Corporation, et al. in Civil Case
No. 99-95993 (Bangko Sentral ng Pilipinas v. Orient Commercial Banking
Corporation, et al.) held incustodia legis by the RTC, Branch 12, Manila, by virtue of
a writ of attachment;
(3) said garnished amounts, totaling about P85M, were subsequently released in
favor of the PBCOM in Civil Case No. 01-101190 (PBCOM v. Jose C. Go, et al.),
pursuant to a writ of execution pending appeal issued by Judge Guillermo
Purganan, RTC, Branch 42, Manila; (
(4) The release was irregular as the garnished amounts were under the custody of
the RTC, Branch 12, Manila, pursuant to the writ of attachment earlier issued by
Judge Carandang of the same court against the defendants in Civil Case No. 99-
95993, which cannot be interfered with without the permission of the proper court
(Branch 12);
(5) The Office of the Court Administrator (OCA) conducted an investigation and
recommended that:
1. The complaint be re-docketed as a regular administrative matter;
2. The charges against Judge Enrico Lanzanas be dismissed for insufficiency of
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evidence;
3. Respondent Deputy Sheriff Carmelo V. Cachero be suspended for six (6) months
for simple misconduct;
4. Respondent Clerk of Court Jennifer H. dela Cruz-Buendia be penalized with a fine
of P10,000.00 for simple neglect of duty; and
5. Both Cachero and dela Cruz-Buendia be sternly warned against the commission
of a similar offense.
(6) The Court resolved to: (1) re-docket the complaint as a regular administrative
matter; (2) dismiss the charge against Judge Lanzanas for insufficiency of
evidence; and (3) require the parties to manifest whether they were willing to
submit the case for decision.
(7) Cachero filed Manifestation stated that the amount released to PBCOM was
returned to RTC Branch 12 and prayed that the present case be dismissed. While
dela Cruz-Buendia filed Manifestation, Supplemental Comment and Partial Motion
for Reconsideration reiterating that the acts complained of were ministerial.
The Courts Ruling
In our Resolution of June 7, 2006, the Court made the observation that the
respondent Judge Lanzanas inadvertence was not gross enough to merit sanction
as he had no participation in the preparation of the checks; he merely signed them
in a ministerial capacity as executive judge, but the same conclusion cannot be
said of his co-respondents who are claiming good faith and compliance with the
procedure, set forth in the Rules of Court, in the withdrawal and subsequent
release of the subject funds.
Rule 57, Section 7(e) of the Rules of Court provides:
xxxx
If the property sought to be attached is in custodia legis, a copy of the writ of
attachment shall be filed with the proper court or quasi-judicial agency, and
notice of the attachment served upon the custodian of such property.
No evidence or record in the present case exists showing that the above provision
had been complied with when Cachero asked for the release of the garnished
funds. No copy of the writ of attachment was filed with the proper court, the RTC,
Branch 12, Manila, in Civil Case No. 99-95993. The disputed funds were clearly
under the custody of Branch 12, not Branch 42.
As the OCA noted, the respondent sheriff should have known that the funds he
garnished were in custodia legisand do not belong to the defendants in Civil Case
No. 01-101190, considering that he (Cachero) himself was among a group of
sheriffs deputized to implement the writ of garnishment issued by the RTC, Branch
12, Manila, in Civil Case No. 99-95993.
Dela Cruz-Buendia, on the other hand, cannot claim that she was not aware that
the garnished amounts do not belong to Spouses Jose C. Go and Elvy T. Go. The
notice of garnishment, dated July 23, 2001,30 issued by Cachero was addressed
to the Clerk of Court, RTC, Manila. The notice covered the goods, effects, money
and other properties belonging to Spouses Jose C. Go and Elvy T. Go in her
possession or control that were deposited under Civil Case No. 99-95993.
Judge Carandangs order, dated February 7, 2000,32 mentioned in the above reply
states:
The Clerk of Court, acting as ex-officio Sheriff of Regional Trial Court of Manila, is
hereby directed that before any rental payment from the lessees of any one or all
of the above-named defendants shall be received in accordance with the Notice of
Garnishment pursuant to the Writ of Attachment issued by this Court on January
19, 2000 x x x the said payment should be referred first to this Court for the
issuance of appropriate Order to Receive Payment for the Courts proper control
and accounting of the amount garnished; payments shall be turned over by the
Branch Sheriff of this Court to your office for issuance of appropriate official
receipt.
Without doubt, the funds that were released by the OCC, at the time the Notices
to Deliver Garnished Amount were filed by Cachero, were in custodia legis, by
virtue of the Writ of Attachment issued by Judge Carandang, RTC, Branch 12,
Manila, against the defendants in Civil Case No. 99-95993.
In Traders Royal Bank v. Intermediate Appellate Court,33 we declared that
"property in the custody of the law cannot be interfered with without the
custody of the proper court and properly legally attached is property incustodia
legis."
WHEREFORE, premises considered, Deputy Sheriff Carmelo V. Cachero is
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
found GUILTY OF INEFFICIENCY AND INCOMPETENCE IN THE PERFORMANCE OF
OFFICIAL DUTIES, and is SUSPENDED for nine (9) months without pay. Clerk of
Court Jennifer H. dela Cruz-Buendia is declared GUILTY OF SIMPLE NEGLECT OF
DUTYand is SUSPENDED for three (3) months without pay.
Both of them are STERNLY WARNED against the commission of a similar offense.
The other charges against Cachero and dela Cruz-Buendia are DISMISSED for lack
of evidence.
SO ORDERED.
FBDC vs. YLLAS LENDING CORP
G.R. No. 158997
October 6, 2008
FACTS: FORT BONIFACIO DEVELOPMENT CORP. ( FBDC) executed a lease contract
in favor of Tirreno, Inc. over a unit at the Bonifacio Global City in Taguig, Metro
Manila. The parties had the lease contract notarized on the day of its execution.
Tirreno used the leased premises for Savoia Ristorante and La Strega Bar.
Due to Tirrenos alleged failure to settle its outstanding obligations, FBDC entered
and occupied the leased premises. FBDC also appropriated the equipment and
properties left by Tirreno pursuant to Section 22 of their Contract of Lease as
partial payment for Tirrenos outstanding obligations.
In 2002, Yllas Lending Corporation caused the sheriff of the trial court to serve an
alias writ of seizure against FBDC. FBDC found out that in 2001, respondents filed a
complaint for Foreclosure of Chattel Mortgage with Replevin, against Tirreno, et al.
In their complaint, Yllas alleged that they lent a sum of money to Tirreno et al and
in 2000 executed a Deed of Chattel Mortgage in favor of Yllas as security for the
loan. The Chattel Mortgage covered properties of the Tirrenos restaurant and bar.
On the same day, FBDC served on the sheriff an affidavit of title and third party
claim.
Despite FBDCs service upon him of an affidavit of title and third party claim, the
sheriff proceeded with the seizure of certain items from FBDCs premises. The
sheriff delivered the seized properties to Yllas.
FBDC questioned the propriety of the seizure and delivery of the properties to
respondents without an indemnity bond before the trial court, which decided
against FBDC. It stated that:
1. Section 22 of the lease contract between FBDC and Tirreno is void under Article
2088 of the Civil Code.
2. FBDC should have filed a separate complaint against respondents instead of
filing a motion to intervene. (The trial court quoted Bayer Phils. v. Agana )
FBDC filed a MR, which was denied. Hence this petition to review pure questions of
law.
ISSUE:
1. WON FBDC has no right of ownership over the subject properties because
Section 22 of the contract of lease is void for being a pledge and a pactum
commissorium;
2. WON the proper remedy of FBDC as third party claimant over the subject
properties is to file a separate action; and
3. WON the trial court is should have required respondents to file an indemnity
bond for FBDCs protection
4. WON FBDC can terminate the lease contract without judicial intervention
HELD: Petition granted
1.NO. Respondents, as well as the trial court, contend that Section 22 constitutes
a pactum commissorium, a void stipulation in a pledge contract. FBDC, on the
other hand, states that Section 22 is merely a dacion en pago.
Section 22 of the Lease Contract between FBDC and Terrano states:
Section 22. Lien on the Properties of the Lessee
Upon the termination of this Contract or the expiration of the Lease Period without
the rentals, charges and/or damages, if any, being fully paid or settled, the LESSOR
shall have the right to retain possession of the properties of the LESSEE used or
situated in the Leased Premises and the LESSEE hereby authorizes the LESSOR to
offset the prevailing value thereof as appraised by the LESSOR against any unpaid
rentals, charges and/or damages. If the LESSOR does not want to use said
18 of 50
properties, it may instead sell the same to third parties and apply the proceeds
thereof against any unpaid rentals, charges and/or damages.
Articles 2085 and 2093 of the Civil Code enumerate the requisites essential to a
contract of pledge:
(1) the pledge is constituted to secure the fulfillment of a principal obligation;
(2) the pledgor is the absolute owner of the thing pledged;
(3) the persons constituting the pledge have the free disposal of their property or
have legal authorization for the purpose; and
(4) the thing pledged is placed in the possession of the creditor, or of a third person
by common agreement. Article 2088 of the Civil Code prohibits the creditor from
appropriating or disposing the things pledged, and any contrary stipulation is void.
Section 22, as worded, gives FBDC a means to collect payment from Tirreno in case
of termination of the lease contract or the expiration of the lease period and there
are unpaid rentals, charges, or damages. The existence of a contract of pledge,
however, does not arise just because FBDC has means of collecting past due rent
from Tirreno other than direct payment.
The fourth requisite, that the thing pledged is placed in the possession of the
creditor, is absent. There is non-compliance with the fourth requisite even if
Tirrenos personal properties are found in FBDCs real property. Tirrenos personal
properties are in FBDCs real property because of the Contract of Lease, which
gives Tirreno possession of the personal properties. Since Section 22 is not a
contract of pledge, there is no pactum commissorium.
On the other hand, Article 1245 of the Civil Code defines dacion en pago, or dation
in payment, as the alienation of property to the creditor in satisfaction of a debt in
money. Philippine National Bank v. Pineda held that dation in payment requires
delivery and transmission of ownership of a thing owned by the debtor to the
creditor as an accepted equivalent of the performance of the obligation. There is
no dation in payment when there is no transfer of ownership in the creditors favor,
as when the possession of the thing is merely given to the creditor by way of
security.
2. NO. The Bayer ruling is inapplicable to the present case. The third party
inBayer filed his claim during execution; in the present case, FBDC filed for
intervention during the trial.
The timing of the filing of the third party claim is important because the timing
determines the remedies that a third party is allowed to file. A third party claimant
under Section 16 of Rule 39 (Execution, Satisfaction and Effect of Judgments) 17 of
the 1997 Rules of Civil Procedure may vindicate his claim to the property in a
separate action, because intervention is no longer allowed as judgment
has already been rendered. We allow FBDCs intervention in the present case
because FBDC satisfied the requirements of Section 1, Rule 19 (Intervention) of the
1997 Rules of Civil Procedure, which reads as follows:
Section 1. Who may intervene. A person who has a legal interest in the matter in
litigation, or in the success of either of the parties, or an interest against both, or is
so situated as to be adversely affected by a distribution or other disposition of
property in the custody of the court or of an officer thereof may, with leave of
court, be allowed to intervene in the action. The court shall consider whether or
not the intervention will unduly delay or prejudice the adjudication of the rights of
the original parties, and whether or not the intervenors rights may be fully
protected in a separate proceeding.
Although intervention is not mandatory, nothing in the Rules proscribes
intervention.
3. YES. Pursuant to Section 14 of Rule 57, the sheriff is not obligated to turn over
to respondents the properties subject of this case in view of respondents failure to
file a bond.
The bond in Section 14 of Rule 57 (proceedings where property is claimed by third
person) is different from the bond in Section 3 of the same rule (affidavit and
bond).
Under Section 14 of Rule 57, the purpose of the bond is to indemnify the sheriff
against any claim by the intervenor to the property seized or for damages arising
from such seizure, which the sheriff was making and for which the sheriff was
directly responsible to the third party.
Section 3, Rule 57, on the other hand, refers to the attachment bond to assure the
return of defendants personal property or the payment of damages to the
defendant if the plaintiffs action to recover possession of the same property fails,
in order to protect the plaintiffs right of possession of said property, or prevent
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
the defendant from destroying the same during the pendency of the suit.
Because of the absence of the indemnity bond in the present case, FBDC may also
hold the sheriff for damages for the taking or keeping of the properties seized from
FBDC.
4. YES. A lease contract may be terminated without judicial intervention.Consing v.
Jamandre upheld the validity of a contractually-stipulated termination clause:
This stipulation is in the nature of a resolutory condition, for upon the exercise by
the [lessor] of his right to take possession of the leased property, the contract is
deemed terminated. This kind of contractual stipulation is not illegal, there being
nothing in the law proscribing such kind of agreement.
xxx
Judicial permission to cancel the agreement was not, therefore necessary because
of the express stipulation in the contract of [lease] that the [lessor], in case of
failure of the [lessee] to comply with the terms and conditions thereof, can take-
over the possession of the leased premises, thereby cancelling the contract of sub-
lease. Resort to judicial action is necessary only in the absence of a special
provision granting the power of cancellation. 14
A lease contract may contain a forfeiture clause. In the same manner, we allow
FBDCs forfeiture of Tirrenos properties in the leased premises. By agreement
between FBDC and Tirreno, the properties are answerable for any unpaid rent or
charges at any termination of the lease. Such agreement is not contrary to law,
morals, good customs, or public policy. Forfeiture of the properties is the only
security that FBDC may apply in case of Tirrenos default in its obligations.
NOTES:
1. A chattel mortgagee, unlike a pledgee, need not be in, nor entitled to, the
possession of the property, unless and until the mortgagor defaults and the
mortgagee thereupon seeks to foreclose thereon. Since the mortgagees right of
possession is conditioned upon the actual default which itself may be
controverted, the inclusion of other parties, like the debtor or the mortgagor
himself, may be required in order to allow a full and conclusive determination of
the case. When the mortgagee seeks a replevin in order to effect the eventual
foreclosure of the mortgage, it is not only the existence of, but also the
mortgagors default on, the chattel mortgage that, among other things, can
properly uphold the right to replevy the property. The burden to establish a valid
justification for that action lies with the plaintiff [-mortgagee]. An adverse
possessor, who is not the mortgagor, cannot just be deprived of his possession,
let alone be bound by the terms of the chattel mortgage contract, simply because
the mortgagee brings up an action for replevin.
FBDC exercised its lien to Tirrenos properties even before respondents and Tirreno
executed their Deed of Chattel Mortgage. FBDC is adversely affected by the
disposition of the properties seized by the sheriff. Moreover, FBDCs intervention in
the present case will result in a complete adjudication of the issues brought about
by Tirrenos creation of multiple liens on the same properties and subsequent
default in its obligations.
February 10, 2016
G.R. No. 174462
PHILIPPINE OVERSEAS TELECOMMUNICATIONS CORPORATION (POTC),
PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION
(PHILCOMSAT), Petitioners,
vs.
SANDIGANBAYAN (3rd Division), REPUBLIC OF THE PHILIPPINES represented by
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG), Respondents.
Facts:
On 14 March 1986, then PCGG Commissioner Ramon A. Diaz issued a
letter directing Officer-In-Charge Carlos M. Ferrales to:
a. Sequester and immediately take over POTC and PHILCO MS AT among others,
and
b. To freeze all 'withdrawals, transfers and/or remittances under any type of
deposit accounts, trust accounts or placements.
POTC is a private corporation, which is a main stockholder of PHILCOMSAT, a
government-owned and controlled corporation.
On 22 July 1987, the OSG filed a Complaint for Reconveyance, Reversion,
Accounting and Restitution, and Damages, against officials of POTC and
PHILCOMSAT. As alleged in the Complaint, through clever schemes, the wealth that
should go to the coffers of the government, which should be deemed acquired for
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the benefit of the Republic, went to the officials of the corporation in their own
individual accounts-some, however, through conduits or corporations.
On 1 March 1991, POTC and PHILCOMSAT filed separate complaints for Injunction
with the Sandiganbayan against the Republic to nullify and lift the sequestration
order for failure to file the necessary judicial action against them within the period
prescribed by the Constitution and to enjoin the PCGG from interfering with their
management and operation, which the Sandiganbayan granted on 4 December
1991.On 23 January 1995, the Resolution was reversed.
The POTC also filed a complaint for Mandamus against the Republic to compel the
PCGG to return POTC's Stock and Transfer Book and Stock Certificate Booklets. On
13 May 1993, the Sandiganbayan granted the Mandamus.On 28 June 1996, Atty.
PotencianoIlusorio (Ilusorio), one of the officials of the petitioner, entered into a
Compromise Agreement with the Republic which was approved by the
Sandiganbayan
In a Resolution, the Sandiganbayan directed the Corporate Secretary of POTC to
issue within ten (10) days from receipt thereof, the corresponding Stock Certificate
of the government. Pursuant to the Order, 4,727 or 34.9% shares of stock of POTC
were transferred in the name of the Republic of the Philippines.
Aggrieved, the PCGG, MLDC, and IRC filed petitions before this Court to nullify the
Order of the Sandiganbayan approving the Compromise Agreement, which this
Courtdeclared valid.
POTC and PHILCOMSAT filed an Omnibus Motion dated 28 February 2005, which
sought to nullify and/or discharge the continued sequestration of POTC and
PHILCOMSAT and to declare null and void the PCGG Memorandum to the BSP
dated 24 October 2000.The Sandiganbayan denied POTC and PHILCOMSATs
motion. The Motion for Reconsideration was likewise denied in a Resolution18
dated 2 August 2006.
ISSUE:
W/N the continued sequestration of POTC and PHILCOMSAT is valid.
HELD:
NO. Section 26, Article XVIII of the Constitution mandates that if no judicial action
has been filed within six (6) months after the ratification of the 1987 Constitution,
the writ of sequestration shall automatically be lifted. In the case at bar, there was
no judicial action filed against POTC and PHILCOMSAT. There has never been any
appropriate judicial action for reconveyance or recovery ever instituted by the
Republic against POTC and PHILCOMSAT.
Sequestration is akin to the provisional remedy of preliminary attachment, or
receivership. Similarly, in attachment, the property of the defendant is seized as a
security for the satisfaction of any judgment that may be obtained, and not
disposed of, or dissipated, or lost intentionally or otherwise, pending litigation. The
sequestered properties are placed under the control of the PCGG, subject to the
final determination of whether the property was in truth ill-gotten.
The ultimate purpose of sequestration is to recover the sequestered properties in
favor of the government in case they turn out to be ill-gotten. This function to
dispose of the property is reserved to the Sandiganbayan. Until the Sandiganbayan
determines whether the property was in truth and in fact "ill- gotten", the
sequestration shall subsist. In case of a finding that the sequestered properties are
ill-gotten, the property shall be returned to the lawful owner, to the people,
through the government; otherwise, the sequestered property shall be returned to
the previous owner.
In the case at bar, the 34.9% ownership of the sequestered property has been
finally adjudged; the ultimate purpose of sequestration was already accomplished
when the ownership thereof was adjudged to the government by this Court
in Republic of the Phils. v. Sandiganbayan. Moreover, the said shares in the
ownership of the sequestered properties have reverted to the Government.
RULE 58
Preliminary Injunction
G.R. No. 195374 March 10, 2014
PEDRO LUKANG, Petitioner, vs. PAGBILAO DEVELOPMENT CORPORATION and
EDUARDO T. RODRIGUEZ, Respondents.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
DECISION
MENDOZA, J.:
FACTS:
Arsenio Lukang(Arsenio) and Mercedes Dee (Mercedes) lived as husband and wife
from 1992-1934 and begot three (3) childrennamely, Domingo, Rosalina and
Olympia. In 1935, Arsenio started cohabiting with Leonicia with whom he had ten
(10) childrennamely, Elpidio, Socorro, Manuel, Pedro, Teresita, Simeon, Eugenio,
Hilaria, Concepcion, and Carlos. During their cohabitation, they acquired several
properties registered in the name of Arsenio. When Arsenio died, his 13 children
executed an extrajudicial settlement. Claiming that he lost the certificate of titles of
the subject lands, Simeon, one the heirs of Arsenio filed a petition for the issuance
of a duplicate copy of the certificate and as a result, new certificate of titles were
issued in his favor. Thereafter, in a deed of donation, he transferred the said
properties in favor of his two children and as a result, a new TCT was issued in their
respective names.
Claiming that the certificates were not lost but under their possession, Leonicia
filed a civil case for the recovery of the duplicate copies of the TCTs filed by
Simeon. Leonicia, through Pedro, caused the annotation of notice of lispendens on
the TCTs. While the civil case is pending, Pagbilao Development Corporation (PDC)
acquired the subject properties from Simeon. When Pedro learned about the sale,
they filed an application for a writ of preliminary injunction with ex-parte prayer
for TRO.
The RTC granted the TRO. PDC filed a petition for certiorari in the CA where it
granted the same, stating that Pedro had no clear right over the subject property
as it was contingent depending on the outcome of the civil case hence, no
paramount necessity because there will be no great and irreparable injury. Pedro
filed a petition for review under Rule 45 assailing the CA decision.
ISSUE: W/N the writ of preliminary injunction is valid.
HELD:
YES. A writ of preliminary injunction is a provisional remedy which is adjunct to a
main suit, as well as a preservative remedy issued to maintain the status quo of the
things subject of the action or the relations between the parties during the
pendency of the suit. The purpose of injunction is to prevent threatened or
continuous irremediable injury to the parties before their claims can be thoroughly
studied and educated. Its sole aim is to preserve the status quo until the merits of
the case are fully heard. Under Section 3, Rule 58 of the Rules of Court, an
application for a writ of preliminary injunction may be granted if the following
grounds are established:
(a) That the applicant is entitled to the relief demanded, and the whole or part of
such relief consists in restraining the commission or continuance of the act or acts
complained of, or in requiring the performance of an act or acts, either for a
limited period or perpetually;
(b) That the commission, continuance or non-performance of the act or acts
complained of during the litigation would probably work injustice to the applicant;
or
(c) That a party, court, agency or a person is doing, threatening, or is attempting to
do, or is procuring or suffering to be done, some act or acts probably in violation of
the rights of the applicant respecting the subject of the action or proceeding, and
tending to render the judgment ineffectual.
While a clear showing of the right is necessary, its existence need not be
conclusively established. Hence, to be entitled to the writ, it is sufficient that the
complainant shows that he has an ostensible right to the final relief prayed for in
his complaint. The rule is that the grant or denial of the writ of preliminary
injunction rests upon the sound discretion of the court.
It is to be emphasized that the deeds of sale between the vendors of the six parcels
of land and the Pagbilao Development Corporation were executed on June 1, 1993.
The Affidavit of Adverse Claim of Leoncia Martinez Vda. De Lukang and the Notice
of Lis Pendens of Pedro Lukang over the six properties were all inscribed on
February 3, 1989. With PDC having been officially aware of them, there can be no
grave abuse of discretion that can be attributed to the RTC for issuing the writ of
preliminary injunction as alleged by PDC.
G.R. No. 205875 June 30, 2015
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LIBERTY BROADCASTING NETWORK, INC., now known as WI-TRIBE TELECOMS,
INC., Petitioner,
vs.
ATLOCOM WIRELESS SYSTEM, INC., Respondent.
x-----------------------x
G.R. No. 208916
NATIONAL TELECOMMUNICATIONS COMMISSION, Petitioner,
vs.
ATLOCOM WIRELESS SYSTEM, INC., Respondent.
FACTS:
Atlocom Wireless System, Inc. (Atlocom) is a grantee of a legislative franchise
under R.A. No. 8605.4 On October 8, 2003, the National Telecommunications
Commission (NTC) issued an Order in NTC for a Certificate of Public Convenience
(CPC), granting ATLOCOM WIRELESS SYSTEM, INC. a Provisional Authority (PA) to
install, operate and maintain a Multi-Point Multi-Channel Distribution System
[MMDS] in METRO MANILA, subject to the assignment of frequency by the
Frequency Management Division of NTC. The PA shall be valid for a period of
eighteen (18)months, or until April 8, 2005. On April 5, 2004, Atlocom thru its
counsel requested for "an extension of the PA. On August 23, 2005, NTC issued
Memorandum Circular No. (MC) 06-08-200511 re-allocating the bands for
broadband wireless access for fixed, nomadic and mobile networks.
On December 23, 2008, NTC denied Atlocom's motion for extension of PA, citing
the re-allocation of MMDS frequencies for Broadband Wireless Access in
accordance with MC 06-08-2005 and the unavailability of other alternative
frequencies. On September 8, 2009, Atlocom filed in the RTC a Petition to enjoin
the implementation of MC 06-08-2005 and reinstate the frequencies of Atlocom.
Liberty Broadcasting Network, Inc. (LBNI), also a grantee of a legislative franchise
(R.A. No. 1553, as amended by R.A. No. 4154), and holder of a Certificate of Public
Convenience and Necessity (CPCN) to operate a radio communications network,
was allowed to intervene in the case, joining the defendant NTC in opposing
Atlocom's claims. Pursuant to MC 06-08-2005, frequency bands 2535-2545 MHz
and 2565-2595 MHz were re-allocated and assigned to LBNI, which covered the
2572-2596 MHz being claimed by Atlocom as allegedly assigned to it.
The RTC, after due hearing, issued an Order denying Atlocom's application for a
writ of preliminary prohibitory or mandatory injunction. Atlocom filed a motion for
reconsideration but it was likewise denied by the RTC under Order dated March 21,
2011. The CA denied Atlocom's prayer for the issuance of a writ of preliminary
prohibitory injunction and its alternative prayer for a provisional mandatory
injunction. However, the CA ruled in favor of Atlocom and reversed the RTC's denial
of application for preliminary injunction.
LBNI filed a Motion for Reconsideration with Ad Cautelam Offer to File Counter-
Bond and Addendum to Motion for Reconsideration with Ad Cautelam Offer to File
Counter-Bond. NTC also filed a Motion for Reconsideration and Supplemental
Motion for Reconsideration. The CA denied these motions.
LBNI filed its petition (G.R. No. 205875) in this Court on April 22, 2013. Acting on
LBNI's motion for the issuance of a temporary restraining order (TRO) and/or writ
of preliminary injunction, we issued a TRO enjoining the implementation of the
writ of preliminary injunction issued by the CA, conditioned upon LBNI's posting of
a cash bond in the sum of P300,000.00.
ISSUES
W/N Atlocom complied with the requisites for issuance of a writ of preliminary
injunction;
HELD:
NO. The following requisites must be proved before a writ of preliminary injunction
will issue: (1) The applicant must have a clear and unmistakable right to be
protected, that is, a right in esse; (2) There is a material and substantial invasion of
such right; (3) There is an urgent need for the writ to prevent irreparable injury to
the applicant; and (4) No other ordinary, speedy, and adequate remedy exists to
prevent the infliction of irreparable injury.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
A right to be protected by injunction, means a right clearly founded on or granted
by law or is enforceable as a matter of law. An injunction is not a remedy to protect
or enforce contingent, abstract, or future rights; it will not issue to protect a right
not in esse, and which may never arise, or to restrain an act which does not give
rise to a cause of action.
There was no document evidencing that the frequencies alleged by Atlocom to be
theirs were actually assigned to them by the FMD. There is likewise nothing in the
records to suggest that NTC "unreasonably" withheld or delayed authority to use
such frequencies identified for Atlocom.
From the evidence on record, no clear, actual and existing right to the subject
frequencies or to the extension of PA had been shown by Atlocom. Accordingly, no
grave abuse of discretion was committed by the RTC in denying Atlocom's
application for a writ of preliminary injunction to restrain the implementation of
MC 06-08-2005 insofar as the use of the re-allocated frequencies claimed by
Atlocom. The CA thus seriously erred in reversing the RTC and holding that Atlocom
was entitled to injunctive relief due to alleged violation of its right by the NTC.
Pursuant to Section 6, Rule 58 of the 1997 Rules of Civil Procedure, a preliminary
injunction may be dissolved if it appears after hearing that although the applicant
is entitled to the injunction or restraining order, the issuance or continuance
thereof, as the case may be, would cause irreparable damage to the party or
person enjoined while the applicant can be fully compensated for such damages as
he may suffer, and the former files a bond in an amount fixed by the court on
condition that he will pay all damages which the applicant may suffer by the denial
or the dissolution of the injunction or restraining order. Two conditions must
concur: first, the court, in the exercise of its discretion, finds that the continuance
of the injunction would cause great damage to the defendant, while the plaintiff
can be fully compensated for such damages as he may suffer; second, the
defendant files a counterbond.
The CA gravely abused its discretion when it issued a writ of preliminary injunction
against the implementation of MC 06-08-2005 in the absence of a clear legal right
on the part of Atlocom.
The resolution of the issue on LBNI's eligibility thus has no bearing on whether
Atlocom has the right to be granted a frequency allocation for Broadband Wireless
Access by the NTC. The constitutional issue raised by the respondent may be raised
and resolved in proper cases when necessary in the future.
SPOUSES DULNUAN VS METROBANK
FACTS:
Spouses Dulnuan obtained loans from Metropolitan Bank and Trust Company
(Metrobank), the total of which reached the sum P3,200,000.00, as evidenced by
promissory notes executed by them.As a security for the loan obligations, the
Spouses Dulnuan executed a Real Estate Mortgage (REM) over a parcel of land
covered by TCT No. 46390 registered under their names. Subsequently, however,
the Spouses Dulnuan incurred default and therefore the loan obligations became
due and demandable.
On 22 April 2008, Metrobank filed an application for extra-judicial foreclosure
proceedings over the subject property before the RTC of La Trinidad, Benguet.
After due notice and publication, the mortgaged property was sold at a public
auction where Metrobank was declared as the highest bidder.
The Spouses Dulnuan instituted a Complaint seeking the issuance of a temporary
restraining order and preliminary and final injunction and, for the annulment of
extra-judicial foreclosure and real estate mortgage alleging that the mortgage
constituted over the property is null and void because at the time the agreement
was entered on 18 October 2000, no contract of loan was yet executed by the
parties. It was only on 19 December 2003 that they received the proceeds of the
loan, as evidenced by the Promissory Note.
After summary hearing, the court a quo in an Order dated 5 November 2008,
issued a Temporary Restraining Order and set the hearing for the issuance of Writ
of Preliminary Injunction. RTC issued an Order dated 3 December 2008, enjoining
Metrobank from taking possession of the subject property until the final
disposition of the annulment of mortgage case
CA reversed the decision of RTC.
ISSUE: whether or not the Court of Appeals erred in dissolving the writ of
preliminary injunction issued against Metrobank.
21 of 50

HELD: NO
First. The court a quo cannot enjoin Metrobank, at the instance of the Spouses
Dulnuan, from taking possession of the subject property simply because the period
of redemption has not yet expired. As the highest bidder in the foreclosure sale
upon whom a certificate sale was issued by the sheriff, Metrobank has the right to
be placed in possession of the subject property even during the redemption period
provided that the necessary amount of bond is posted.
Second. The pendency of the action assailing the validity of the mortgage should
not bar the issuance of the writ of possession. A pending action for annulment of
mortgage or foreclosure does not stay the issuance of a writ of possession.
Regardless of the pendency of such suit, the purchaser remains entitled to a writ of
possession, without prejudice, of course, to the eventual outcome of the pending
annulment case.
Third. While the grant or denial of the preliminary injunction rests on the sound
discretion of the court taking cognizance of the case, and judicial discretion of the
court in injunctive matters should not be interfered with,in the absence of clear
and legal right, however, the issuance of a writ of injunction constitutes a grave
abuse of discretion.
The burden is thus on petitioner to show in his application that there is meritorious
ground for the issuance of TRO in his favor. When the complainants right is
doubtful or disputed, he does not have a clear legal right and, therefore, the
issuance of injunctive writ is improper. Herein, the Spouses Dulnuan failed to show
that they have clear and unmistakable right to the issuance of writ in question.
China Banking Corporation vs. Sps. Ciriaco
Facts:
On March 11, 1996, respondent spouses Harry and Esther Ciriaco obtained a loan
from petitioner in the amount of Php 1,500,00.00 secured by a real estate
mortgage on their 526-square meter land in La Trinidad, Benguet. When the
respondents defaulted on their loan, the petitioner extra-judicially foreclosed the
mortgaged property and sold it at public auction where petitioner emerged as the
highest bidder. Thereafter, a Certificate of Sale was executed by the Sheriff and
annotated by the Register of Deeds.
A day before the expiration of the redemption period, respondents filed
a complaint with the RTC of La Trinidad, Benguet for injunction to enjoin the
consolidation of title in petitioners favor assailing the redemption price of the
foreclosed property. The RTC dismissed the complaint for being moot.
On August 17, 1999, respondents filed a complaint with the RTC for
Cancellation of Consolidation of Ownership over a Real Property, Specific
Performance and Damages of which petitioner filed an answer with Compulsory
Counterclaim denying the allegations of the complaint. On March 16, 2000,
respondents filed an Omnibus Motion for Leave to Amend Complaint and to Attach
Amended Complaint as well as Motion for Hearing on the Issuance of a Writ of
Preliminary Injunction and/or Temporary Restraining Order (TRO). After giving
petitioner 10 days within which to file an answer, the hearing took place on April
24, 2000. Petitioner avers that respondents allegation of fraud in the Omnibus
Motion changes the theory of the case, which is not allowed, and that respondents
failed to show that they have a clear right in esse that should be protected by an
injunctive relief.
In its August 1, 2000 order, the RTC granted the respondents
application for the issuance of a writ of preliminary injunction and/or a TRO. The
RTC also denied petitioners subsequent motion for reconsideration. On August
24, 2000, the RTC issued said writ of preliminary injunction restraining petitioner
from disposing of the foreclosed property or taking possession thereof. The
petitioner then filed a Rule 65 petition for certiorari with the CA arguing that the
RTC gravely abused its discretion in granting respondents application for the
issuance of a writ of preliminary injunction without a hearing. Said petition was
denied by the CA. Hence, this appeal.
Issue:WON the court a quo erred in granting respondents application for a writ of
preliminary injunction without a hearing.
Held: Yes.Sections 3 and 5, Rule 58 of the 1997 Rules of Civil Procedure provide the
requirements for the issuance of a writ of preliminary injunction or TRO.
Specifically, Section 5 states that No preliminary injunction shall be granted
without hearing and prior notice to the party or persons sought to be enjoined.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
xxx It is thus clear that before a writ of preliminary injunction may be issued, a
clear showing that there exists a right to be protected and that the acts against
which the writ is to be directed is violative of an established right. The holding of a
hearing, where both parties can introduce evidence and present their side, is also
required before the courts may issue a TRO or an injunctive writ.
In this case, the Court finds that the RTC abbreviated its proceedings
and precipitately granted the respondents application for injunctive relief. The
RTC did not conduct a hearing to hear the parties respective evidence to give it an
idea of a justification for its issuance pending the decision of the case on the
merits. It failed to make any factual finding to support the issuance of a writ of
preliminary injunction since it did not conduct any hearing on said application. In
fact, a perusal of the August 1, 2000 order shows that the RTC granted the
respondents application for the issuance of a writ of preliminary injunction based
only on respondents unsubstantiated allegations. The respondents right to a
preliminary injunction has not been clearly and unmistakably demonstrated. The
respondents have not presented evidence other than the bare allegations in their
pleadings to support their claim of fraud that brings about the irreparable injury
sought to be avoided by their application for injunctive relief.
Thus, the RTCs grant of the writ of preliminary injunction in favor of the
rerspondents, despite lack of evidence, constitutes grave abuse of discretion
amounting to lack of jurisdiction.
BPI VS HONTANOSAS
Case
Under review at the instance of the defendant, now the petitioner herein, is the
decision promulgated on July 9, 2002, whereby the Court of Appeals (CA) upheld
the order issuedon July 5, 2001 in Civil Case No. CEB-26468 entitled Spouses
Silverio&ZosimaBorbon, et al. v. Bank of the Philippine Islandsby the Regional Trial
Court (RTC), Branch 16, in Cebu City, presided by Hon. Judge Agapito L.
Hontanosas, Jr.
Antecedents
On May 22, 2001, respondents Spouses Silverio and ZosimaBorbon, Spouses Xerxes
and ErlindaFacultad,and XM Facultad and Development Corporation commenced
Civil Case No. CEB-26468 to seek the declaration of the nullity of the promissory
notes,real estate and chattel mortgages and continuing surety agreement they had
executed in favor of the petitioner (BPI). They further sought damages and
attorneys fees, and applied for a temporary restraining order (TRO) orwrit of
preliminary injunction to prevent the petitioner from foreclosing on the mortgages
against their properties.
The complaintalleged that the respondents had obtained a loan from the
petitioner, and had executed promissory notes binding themselves, jointly and
severally, to pay the sum borrowed; that as security for the payment of the loan,
they had constituted real estate mortgages on several parcels of land in favor of
the petitioner; and that they had been made to sign a continuing surety agreement
and a chattel mortgage on their Mitsubishi Pajero.
It appears that the respondentsobligation to the petitioner had reached
P17,983,191.49, but they had only been able to pay P13 Million because they had
been adversely affected by the economic turmoil in Asia in 1997. The petitioner
required them to issue postdated checks to cover the loan under threat of
foreclosing on the mortgages. Thus, the complaint sought a TRO or a writ of
preliminary injunction to stay the threatened foreclosure.
On June 6, 2001, the petitioner filed its answer with affirmative defenses and
counterclaim, as well as its opposition to the issuance of the writ of preliminary
injunction, contending that the foreclosure of the mortgages was within itslegal
right to do.
On July 5, 2001, the RTC denied the petitioners motion to dismissfor being
unmeritorious, but granted the respondents application for preliminary injunction.
CA denied the petitioners motion for reconsideration through its resolution of
February 12, 2003. Hence, this appeal.
ISSUE: Whether or not the issuance of the writ of preliminary injunction against
the petitioner, its agents and representatives, was in order.
HELD: Partly meritorious.
22 of 50
Injunction should not issue except upon a clear showing that the applicant has a
right in esse to be protected, and that the acts sought to be enjoined are violative
of such right. A preliminary injunction should not determine the merits of a case,
or decide controverted facts, for, being a preventive remedy, it only seeks to
prevent threatened wrong, further injury, and irreparable harm or injustice until
the rights of the parties can be settled.
Thus, to be entitled to the writ ofpreliminary injunction, the private respondent
needs only to show that it has the ostensible right to the final relief prayed for in its
complaint x xx.
It is also basic that the power to issue a writ of injunction is to be exercised only
where the reason and necessity therefor are clearly established, and only in cases
reasonably free from doubt. For, truly, a preliminary injunction should not
determine the merits of a case, or decide controverted facts. As a preventive
remedy, injunction only seeks to prevent threatened wrong, further injury, and
irreparable harm or injustice until the rights of the parties can be settled. As an
ancillary and preventive remedy, it may be resorted to by a party to protect or
preserve his rights during the pendency of the principal action, and for no other
purpose. Such relief will accordingly protect the ability of the court to render a
meaningful decision; it will further serve to guard against a change of
circumstances that will hamper orprevent the granting of proper relief after a trial
on the merits. Verily, its essential function is to preserve the status quo between
the parties until the merits of the case can be heard.
Moreover, the applicant must prove that the violation sought to be prevented
would cause an irreparable injustice. But the respondents failed to establish the
irreparable injury they would suffer should the writ of preliminary injunction not
be issued. Theyprincipally feared the loss of their possession and ownership of the
mortgaged properties, and faced the possibility of a criminal prosecution for the
post-dated checks they issued. But such fear of potential loss ofpossession and
ownership, or facing a criminal prosecution did not constitute the requisite
irreparable injury that could have warranted the issuance of the writ of injunction.
"An injury is considered irreparable," according to Philippine National Bank v.
Castalloy Technology Corporation, x xx if it is of such constant and frequent
recurrence that no fair or reasonable redress can be had therefor ina court of law,
or where there is no standard by which their amount canbe measured with
reasonable accuracy, that is, it is not susceptible of mathematical computation. The
provisional remedy of preliminary injunction may only be resorted to when there is
a pressing necessity to avoid injurious consequences which cannot be remedied
under any standard of compensation.
Every court should remember that an injunction should not be granted lightly or
precipitately because it isa limitation upon the freedom of the defendant's action.
It should be granted only when the court is fully satisfied that the law permits it
and the emergency demands it, for no power exists whose exercise is more
delicate, which requires greater caution and deliberation, or is more dangerous in a
doubtful case, than the issuance of an injunction.
In view of the foregoing, the CA grossly erred in not declaring that the RTC
committed grave abuse of discretion in granting the application of the respondents
as the plaintiffs in Civil Case No. CEB-26468. The RTC apparently disregarded the
aforecited well-known norms and guidelines governing the issuance of the writ of
injunction. Thereby, the RTC acted capriciously and arbitrarily. Grave abuse of
discretion means either that the judicial or quasi-judicial power was exercised in an
arbitrary or despotic manner by reason of passion or personal hostility, or that the
respondent judge, tribunal or board evaded a positive duty, or virtually refused to
perform the duty enjoined or to act in contemplation of law, such as when such
judge, tribunal or board exercising judicial or quasi-judicial powers acted in a
capricious or whimsical manner as to be equivalent to lack of jurisdiction.
G.R. No. 197802, November 11, 2015
ZUNECA PHARMACEUTICAL, AKRAM ARAIN AND/OR VENUS ARAIN, M.D. DBA
ZUNECA PHARMACEUTICAL, Petitioners, v. NATRAPHARM, INC., Respondent.
The facts follow:
Respondent is an all-Filipino pharmaceutical company which manufactures and
sells a medicine bearing the generic name "CITICOLINE," which is indicated for
heart and stroke patients. The said medicine is marketed by respondent under its
registered trademark "ZYNAPSE," which respondent obtained from the Intellectual
Property Office (IPO) . With its registration, the trademark "ZYNAPSE" enjoys
protection for a term of 10 years. In addition, respondent obtained from the
Bureau of Food and Drugs (BFAD) all necessary permits and licenses to register, list
and sell its "ZYNAPSE" medicine in its various forms and dosages.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
Allegedly unknown to respondent, since 2003 or even as early as 2001, petitioners
have been selling a medicine imported from Lahore, Pakistan bearing the generic
name "CARBAMAZEPINE," an anti-convulsant indicated for epilepsy, under the
brand name "ZYNAPS," which trademark is however not registered with the IPO.
"ZYNAPS" is pronounced exactly like "ZYNAPSE."
Respondent further alleged that petitioners are selling their product "ZYNAPS"
CARBAMAZEPINE in numerous drugstores in the country where its own product
"ZYNAPSE" CITICOLINE is also being sold.7 Moreover, respondent claimed that the
sale of the medicines "ZYNAPSE" and "ZYNAPS" in the same drugstores will give
rise to medicine switching.
On October 30, 2007, respondent sent petitioners a cease-and-desist demand
letter, pointing out that:
a "ZYNAPSE" is the registered trademark of [respondent], and that as such owner,
it has exclusive trademark right under the law to the use thereof and prevent
others from using identical or confusingly similar marks, and that [petitioners]
must stop the use of "ZYNAPS" for being nearly identical to "ZYNAPSE"; and
c Because there is confusing similarity between "ZYNAPSE" and "ZYNAPS," there is
a danger of medicine switching, with the patient on "ZYNAPSE" medication placed
in a more injurious situation given the Steven-Johnson Syndrome side effect of the
"ZYNAPS" CARBAMAZEPINE.
Petitioners refused to heed the above demand, claiming that they had prior use of
the name "ZYNAPS" since year 2003, having been issued by the BFAD a Certificate
of Product Registration (CPR) on April 15, 2003, which allowed them to sell
CARBAMAZEPINE under the brand name "ZYNAPS."
On November 29, 2007, respondent filed a complaint against petitioners for
trademark infringement for violation of Republic Act (R.A.) No. 8293, or the
Intellectual Property Code of the Philippines (IPC), with prayer for a temporary
restraining order (TRO) and/or writ of preliminary injunction. To justify the
TRO/writ of preliminary injunction, respondent argued that under Sections 13813
and 147.114 of the IPC, certificates of registration are prima facie evidence of the
registrant's ownership of the mark and of the registrant's exclusive right to use the
same.
In their answer, petitioners argued that they enjoyed prior use in good faith of the
brand name "ZYNAPS," having submitted their application for CPR with the BFAD
with the name "ZYNAPS" expressly indicated thereon and CPR was issued to them.
the RTC denied the application for a writ of preliminary injunction, and application
to TRO;
Via a petition for certiorari with an application for a TRO and/or a writ of
preliminary injunction, respondent questioned before the CA the RTC's denial of
the application for a writ of preliminary injunction.
The CA issued a Resolution24 denying respondent's application for TRO and/or
preliminary injunction for lack of merit. Respondent moved for reconsideration but
was denied by the CA in its Resolution.
However, contrary to its earlier resolutions denying the application for a
TRO/preliminary injunction, the CA, upheld the allegations of respondent that it is
entitled to injunctive relief on the basis of its IPO registration and permanently
enjoined petitioners from the commercial use of "ZYNAPS." The fallo of the CA
Decision reads: the Petition for Certiorari is GRANTED. The assailed Omnibus Order
dated 12 March 2008 of the Regional Trial Court is REVERSED and SET ASIDE, and a
new one is entered permanently ENJOINING defendants-respondents, their
employees, agents, representatives, dealers, retailers, and/or assigns, and any and
all persons acting in their behalf, from manufacturing, importing, distributing,
selling and/or advertising for sale, or otherwise using in commerce, the anti-
convulsant drug CARBAMAZEPINE under the brand name and mark "ZYNAPS," or
using any other name which is similar or confusingly similar to petitioner's
registered trademark "ZYNAPSE," including filing of application for permits, license,
or certificate of product registration with the Food and Drug Administration and
other government agencies.
Hence, this petition for review.
Issue:
2) Whether the CA may order a permanent injunction in deciding a petition for
certiorari against the denial of an application for a preliminary injunction issued by
the RTC?
23 of 50

Rule 58 of the Rules of Court provides for both preliminary and permanent
injunction. Section 1, Rule 58 provides for the definition of preliminary injunction:
SECTION 1. Preliminary injunction defined; classes. A preliminary injunction is an
order granted at any stage of an action or proceeding prior to the judgment or final
order, requiring a party or a court, agency or a person to refrain from a particular
act or acts. It may also require the performance of a particular act or acts, in which
case it shall be known as a preliminary mandatory injunction. (Emphasis supplied)
On the other hand, Section 9 of the same Rule defines a permanent injunction in
this wise:
SEC. 9. When final injunction granted. If after the trial of the action it appears
that the applicant is entitled to have the act or acts complained of permanently
enjoined, the court shall grant a final injunction perpetually restraining the party or
person enjoined from the commission or continuance of the act or acts or
confirming the preliminary mandatory injunction. (Emphasis supplied)
A writ of preliminary injunction is generally based solely on initial and incomplete
evidence.30 The evidence submitted during the hearing on an application for a
writ of preliminary injunction is not conclusive or complete for only a sampling is
needed to give the trial court an idea of the justification for the preliminary
injunction pending the decision of the case on the merits.31 As such, the findings
of fact and opinion of a court when issuing the writ of preliminary injunction are
interlocutory in nature and made even before the trial on the merits is commenced
or terminated.
By contrast a permanent injunction, based on Section 9, Rule 58 of the Rules of
Court, forms part of the judgment on the merits and it can only be properly
ordered only on final judgment. A permanent injunction may thus be granted after
a trial or hearing on the merits of the case and a decree granting or refusing an
injunction should not be entered until after a hearing on the merits where a
verified answer containing denials is filed or where no answer is required, or a rule
to show cause is equivalent to an answer.
As such a preliminary injunction, like any preliminary writ and any interlocutory
order, cannot survive the main case of which it is an incident; because an ancillary
writ of preliminary injunction loses its force and effect after the decision in the
main petition.
Here, this Court is being asked to determine whether the CA erred by issuing a
permanent injunction in a case which questioned the propriety of the denial of an
ancillary writ. We note that the case brought to the CA on a petition for certiorari
merely involved the RTC's denial of respondent's application for a writ of
preliminary injunction, a mere ancillary writ. Since a decision on the merits has
already been rendered and which includes in its disposition a permanent
injunction, the proper remedy is an appeal from the decision in the main case.
WHEREFORE, in light of all the foregoing, the petition is hereby DENIED for being
moot and academic.
G.R. No. 172909 March 5, 2014
SPOUSES SILVESTRE O. PLAZA AND ELENA Y. PLAZA, Petitioners,
vs.
GUILLERMO LUSTIVA, ELEODORA VDA. DE MARTINEZ AND VICKY SAYSON
GOLOSENO, Respondents.
THE FACTS
On August 28, 1997, the CA4 ruled that among the Plaza siblings, namely:
Aureliano, Emiliana, Vidal, Marciano, and Barbara, Barbara was the owner of the
subject agricultural land. The decision became final and executory and Barbara's
successors, respondents Guillermo Lustiva, Eleodora Vda. de Martinez and Vicky
Sayson Goloseno, have continued occupying the property.
On September 14, 1999, Vidals son and daughter-in-law, the petitioners, filed a
Complaint for Injunction, Damages, Attorneys Fees with Prayer for the Issuance of
the Writ of Preliminary Injunction and/or Temporary Restraining Order against the
respondents and the City Government of Butuan. They prayed that the
respondents be enjoined from unlawfully and illegally threatening to take
possession of the subject property. According to the petitioners, they acquired
the land from Virginia Tuazon in 1997; Tuazon was the sole bidder and winner in a
tax delinquency sale conducted by the City of Butuan on December 27, 1996.
In their answer, the respondents pointed out that they were never delinquent in
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
paying the land taxes and were in fact not aware that their property had been
offered for public auction. Moreover, Tuazon, being a government employee, was
disqualified to bid in the public auction. As Tuazons participation in the sale was
void, she could have not transferred ownership to the petitioners. Equally
important, the petitioners merely falsified the property tax declaration by inserting
the name of the petitioners father, making him appear as a co-owner of the
auctioned land. Armed with the falsified tax declaration, the petitioners, as heirs of
their father, fraudulently redeemed the land from Tuazon. Nonetheless, there was
nothing to redeem as the land was not sold. For these irregularities, the petitioners
had no right to the Writ of Preliminary Injunction and/or Temporary Restraining
Order prayed for against them.
The Regional Trial Court (RTC) of Butuan City denied the prayer for a Writ of
Preliminary Injunction, and ordered that the possession and occupation of the land
be returned to the respondents. The RTC found that the auction sale was tainted
with irregularity as the bidder was a government employee disqualified and the
petitioners are not buyers in good faith either. On the contrary, they were in bad
faith for having falsified the tax declaration they redeemed the property with.
THE CAS RULING
Through a petition for review on certiorari under Rule 65, the petitioners
challenged the RTCs order before the CA. The CA affirmed the RTCs ruling, found
the petitioners guilty of forum shopping, dismissed the case. Through a petition for
review on certiorari,1 filed under Rule 45 of the Rules of Court, the petitioners,
spouses Silvestre O. Plaza and Elena Y. Plaza, seek the reversal of the decision2of
Court of Appeals (CA)
Issue: W/N the the petitioners failed to establish entitlement to the writ of
preliminary injunction?
THE COURTS RULING
As the lower courts correctly found, Tuazon had no ownership to confer to the
petitioners despite the latters reimbursement of Tuazons purchase expenses.
Because they were never owners of the property, the petitioners failed to establish
entitlement to the writ of preliminary injunction. "[T]o be entitled to an injunctive
writ, the right to be protected and the violation against that right must be shown.
A writ of preliminary injunction may be issued only upon clear showing of an actual
existing right to be protected during the pendency of the principal action. When
the complainants right or title is doubtful or disputed, he does not have a clear
legal right and, therefore, the issuance of injunctive relief is not proper."
Likewise, upon the dismissal of the main case by the RTC on August 8, 2013, the
question of issuance of the writ of preliminary injunction has become moot and
academic. Upon the dismissal of the main action, the question of the non-issuance
of a writ of preliminary injunction automatically died with it. A writ of preliminary
injunction is a provisional remedy; it is auxiliary, an adjunct of, and subject to the
determination of the main action. It is deemed lifted upon the dismissal of the
main case, any appeal therefrom notwithstanding.
WHEREFORE, premises considered, the Court DENIES the petition for review on
certiorari.
G.R. No. 206808-09, September 07, 2016
LOCAL WATER UTILITIES ADMINISTRATION EMPLOYEES ASSOCIATION FOR
PROGRESS (LEAP), MELANIO B. CUCHAPIN II, GREARDO* G. PERU, ROLAND S.
CABAHUG, GLORIA P. VELASQUEZ, ERLINDA G. VILLANUEVA, TEODORO M.
REYNOSO, FERNANDO L. NICANDRO, JOSEPHINE P. SIMENE, LAMBERTO R.
RIVERA, REYNALDO M. VIDA, and RUCTICO** B. TUTOL, Petitioners, v. LOCAL
WATER UTILITIES ADMINISTRATION (LWUA) and DEPA
The facts of the case are as follows:
In 2004, the President Gloria Macapagal-Arroyo enacted Executive Order (E.O.) No.
279. Under the said E.O., all concerned government agencies and instrumentalities
of the water supply and sewerage sector, which includes, among others, the Local
Water Utilities Administration (LWUA), were directed to pursue and implement
reform objectives and policies. The said E.O. particularly provided for the
rationalization of LWUA's organizational structure and operations.
On April 13, 2005, President Arroyo issued E.O. No. 421,6 specifying LWUA's core
functions and providing for shifts in its policy direction, functions, programs,
activities and strategies. Cognizant of the effect of the rationalization of the
24 of 50
functions of LWUA, the E.O. gave affected LWUA personnel the option to either
remain or retire, or be separated from government service.
Pursuant to the provisions of E.O. No. 421, then LWUA Administrator Lorenzo
Zamora came up with Task Force 421 and its Action Team. The said Task Force was
charged, among others, with the duty of preparing the LWUA's staffing pattern and
the corresponding plantilla positions therein as directed by E.O. No. 421. The
Action Team, on the other hand, was given the responsibility of reporting to the
Task Force and assisting it in the execution of its duties and responsibilities. Among
the appointed members of the Action Team was herein petitioner Melanio
Cuchapin II, who was then the Chairperson of petitioner LWUA Employees'
Association for Progress (LEAP). Subsequently, Task Force 421 was able to come up
with a staffing pattern, consisting of 467 plantilla positions which it submitted to
the LWUA Board of Trustees for approval.
On April 18, 2006, the LWUA Board of Trustees issued Board Resolution No. 69
which approved the staffing pattern proposed by Task Force 421. Thereafter, the
approved staffing pattern was submitted to the Department of Budget and
Management (DBM) for review and approval. DBM approved 447 plantilla
positions out of the 467 proposed positions. Twenty (20) positions were excluded
from the plantilla.
On October 18, 2006, LWUA issued Office Ordered the immediate implementation
of the following: (a) posting of the DBM-approved staffing pattern; (b) finalization
by the Staffing Committee of the staffing guidelines to be submitted to the
Management and the Board of Trustees for approval; and (c) finalization by the
Task Analysis Committee of the job descriptions under the rationalized LWUA
structure.
On October 19, 2006, petitioners filed a petition for certiorari, prohibition and
mandamus with prayer for temporary restraining order (TRO) and preliminary
injunction with the RTC of Quezon City. Alleging that LWUA and DBM acted with
grave abuse of discretion in adopting and implementing the reorganization plan of
LWUA, petitioners prayed that LWUA and DBM be restrained from implementing
the following: (1) DBM-approved staffing pattern; (2) Resolution No. 69 of the
LWUA Board of Trustees, and (3) E.O. Nos. 279, 366 and 421, on the ground that
petitioners will suffer injustice and sustain irreparable injury as 233 LWUA
employees face immediate and outright dismissal from service.
Respondents filed their respective Oppositions to the petitioners' prayer for TRO
and/or preliminary injunction.
After hearing, the RTC issued its assailed Order7 granting petitioners' prayer for the
issuance of a writ of preliminary injunction and restraining the respondents from
enforcing and effecting the assailed questioned DBM-Approved Staffing Pattern.
LWUA and DBM then filed separate special civil actions for certiorari with the CA
questioning the subject RTC Order and Resolution. These petitions were
subsequently consolidated.
On August 28, 2012, the CA granted the petition and reversed and set aside the
RTC decision.
Hence, this petition.
Issues:
The respondents raised the issue that the dismissal of petitioners' principal action
for certiorari, prohibition and mandamus filed with the RTC results in the
automatic dissolution of the ancillary writ of preliminary injunction issued by the
same court.
The Court agrees with respondents.
A writ of preliminary injunction is an order granted at any stage of an action or
proceeding prior to the judgment or final order, requiring a party or a court,
agency or a person to refrain from a particular act or acts.20 It is merely a
provisional remedy, adjunct to the main case subject to the latter's outcome. It is
not a cause of action in itself. The writ is provisional because it constitutes a
temporary measure availed of during the pendency of the action and it is ancillary
because it is a mere incident in and is dependent upon the result of the main
action.21 Being an ancillary or auxiliary remedy, it is available during the pendency
of the action which may be resorted to by a litigant to preserve and protect certain
rights and interests therein pending rendition, and for purposes of the ultimate
effects, of a final judgment in the case.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
It is well settled that the sole object of a preliminary injunction, whether
prohibitory or mandatory, is to preserve the status quo until the merits of the case
can be heard.23 It is usually granted when it is made to appear that there is a
substantial controversy between the parties and one of them is committing an act
or threatening the immediate commission of an act that will cause irreparable
injury or destroy the status quo of the controversy before a full hearing can be had
on the merits of the case.24 It persists until it is dissolved or until the termination
of the action without the court issuing a final injunction.
Indubitably, in the present case, the writ of preliminary injunction was granted by
the RTC based on its finding that there was a need to protect petitioners' rights to
security of tenure during the pendency of the principal action. After trial, however,
the lower court found, among others, that, in questioning the constitutionality of
E.O. Nos. 279, 366 and 421 as well as Resolution No. 69 of the LWUA Board of
Trustees, petitioners failed to establish the existence of an actual case or
controversy which is ripe for judicial determination. Thus, the RTC dismissed the
principal action for certiorari, prohibition and mandamus.
The principal action having been heard and found dismissible as it was in fact
dismissed, the writ of preliminary injunction issued by the RTC is deemed lifted, its
purpose as a provisional remedy having been served, the appeal from the main
case notwithstanding.26 In this regard, this Court's ruling in the case of Unionbank
of the Philippines v. Court of Appeals27 is instructive, to wit:
x x x "a dismissal, discontinuance or non-suit of an action in which a restraining
order or temporary injunction has been granted operates as a dissolution of the
restraining order or temporary injunction," regardless of whether the period for
filing a motion for reconsideration of the order dismissing the case or appeal
therefrom has expired. The rationale therefor is that even in cases where an appeal
is taken from a judgment dismissing an action on the merits, the appeal does not
suspend the judgment, hence the general rule applies that a temporary injunction
terminates automatically on the dismissal of the action.
WHEREFORE, the instant petition is DISMISSED. The Decision and Resolution of the
Court of Appeals, dated August 28, 2012 and January 15, 2013, respectively, in CA-
G.R. SP Nos. 100482 and 100662 are AFFIRMED.
AGOO RICE MILL CORPORATION (represented by its President, Kam Biak Y. Chan,
Jr.), Petitioner,
vs.
LAND BANK OF THE PHILIPPINES, Respondent.
G.R. No. 173036
September 26, 2012
SECOND DIVISION
BRION, J.:
Facts:
From October 1993 -October 1996 - Agoo Rice Mill Corporation (ARMC)
obtained from the Land Bank of the Philippines (LBP) a Term Loan (TL) for 2M
and two (2) Short-Term Loan Lines (STLLs) amounting to 15M evidenced by
promissory notes.
These loans were secured by a Real and Chattel Mortgage over the ARMCs
four (4) commercial lots, including their improvements, and its rice mill
machineries and generator.
ARMC paid in several payments to cover the loans interest but was unable to
pay the whole obligation due to companys financial problem.
ARMC, thru a letter by its president requested LBP for an extension to pay its
obligation on Feb. 28, 1997. LBP reminded ARMC thru a letter of its payment.
On Feb. 27, 1997 ARMC wrote LBP for a renewal of its loans, the LBP
allegedly replied to have it restructured instead of renewed.
ARMC suggested payment of 5M every 6 months until the 15M STLLs to be
paid in full but was deferred by LBP which advised ARMC to first secure a
waiver of its penalty charges prior to the loans restructuring.
November 3, 1997- LBP informed ARMC that the banks Domestic Banking
Loan Committee require an additional collateral from the ARMCon or before
November 7, 1997; otherwise, the LBP would be forced to pursue legal
action.
November 10, 1997 - LBP informed ARMC that its existing collateral was short
of 3.4M that ARMC needed to offer additional collateral and to submit the
necessary documents until extension date ofNovember 25, 1997. ARMC
responded by asking for a reappraisal of its properties, but the LBP denied
the request, insisting that the valuation made by its Property Assessors was
fair and reasonable.
25 of 50
 LBP wrote ARMC regarding the latters noncompliance of additional collateral
that such noncompliance on or before April 30, 1998 would result in the
referral of the matter to the banks Legal Office for appropriate action.
LBP informed ARMC that its request for loan restructuring is under evaluation
and for the mean time the ARMC must settle first the payment of its loan for
the month.
Application for Extrajudicial Foreclosure by LBP
July 8, 1998- LBP sent the ARMC a Final Notice of Payment, informing the
ARMC that it had filed, on the same date, an application for the extrajudicial
foreclosure of ARMCs mortgaged properties. The extrajudicial foreclosure
was set for August 26, 1998 at nine oclock in the morning.
Complaint for Injunction by ARMC
August 24, 1998- ARMC, through its President, filed with the RTC, Branch 30,
San Fernando City, La Union, a complaint for injunction with application for a
writ of preliminary injunction and temporary restraining order, and for
recovery of damages.
ARMC mainly alleged that LBPs proposed extrajudicial foreclosure should be
enjoined for being premature, improper and in violation of ARMCs
contractual and property rights since negotiations for the restructuring of its
loans were still ongoing.
ARMC also alleged that the LBPs petition for extrajudicial foreclosure
contained inconsistent statements on the total amount of its principal
obligation.
ARMC denied receipt of the LBPs July 8, 1998 Final Notice of Payment.
Temporary Restraining Order and Writ of Preliminary Injunction
On August 24, 1998, Executive Judge Vicente A. Pacquing, RTC, La Union,
issued a 72hour Temporary Restraining Order (TRO) directing the Ex-Officio
Provincial Sheriff of La Union to cease and desist from proceeding with the
August 26, 1998 foreclosure sale. The following day, the RTC ordered the
extension of the TRO for seventeen (17) days.
Parties manifested to settle amicable but failed to do so, thus, the RTC
proceeded with the hearing on the issuance of the writ of preliminary
injunction on January 12, 1999.In an order dated March 18, 1999, Judge
Adolfo Alagar, RTC, Branch 30, San Fernando City, La Union, issued a writ of
preliminary injunction upon the ARMCs filing of a bond of P 4,000,000.00.
RTCs Ruling
(08-05-2004) RTC found no merit in the ARMCs complaint for injunction.
The RTC denied the ARMCs complaint on the ground that injunction cannot
issue against the exercise of a valid right, the right of the
creditor/mortgagee to foreclose on the mortgage where the debtor-
mortgagor has defaulted in the payment of its obligations.
The RTC likewise ruled that the LBPs foreclosure was not merely an
exercise of its right, but also the performance of its legal obligation under
Presidential Decree No. (P.D.) 385
Motion for reconsideration by ARMC was denied.
Foreclosure Sale
(05-12-2005) Sheriff of the RTC of San Fernando City, La Union issued a
Notice of Extrajudicial Sale that set the auction sale of the mortgaged
properties on June 3, 2005.
The ARMC sought to enjoin the foreclosure sale by filing with the CA an
application for the issuance of a writ of preliminary injunction and temporary
restraining order, which the CA denied in a resolution dated June 14, 2005.
The LBP emerged as the winning bidder in the auction sale.
CAs Ruling
(03-28-2006) CA found no merit in the ARMCs appeal. The CA affirmed the
RTC in ruling that, under P.D. 385, an injunction, whether permanent or
temporary, could not be issued to enjoin the foreclosure proceedings
instituted by the LBP.
The CA denied the motion for reconsideration
ISSUE: WON ARMC is entitled to an injunctive remedy.
HELD: NO
"Injunction is a judicial writ, process or proceeding whereby a party is
ordered to do or refrain from doing a certain act. It may be the main action or
merely a provisional remedy for and as an incident in the main action. For an
injunction to issue, the following essential requisites must be present: (1)
there must be a right in esse or the existence of a right to be protected; and
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
(2) the act against which the injunction is directed to constitute a violation of
such right.46
In the present case, both the RTC and the CA found that no agreement was
forged between the ARMC and the LBP on the restructuring of the ARMCs
loans at the time the LBP filed an application to extra-judicially foreclose the
ARMCs mortgaged properties; the proposed loan restructuring was not
approved by the LBP because the ARMC failed to offer an additional collateral
sufficient enough to cover its outstanding loan with the bank. Thus, the
ARMC, then, had no actual right to protect or to enforce against the LBP. It
failed to satisfy the first requisite, i.e., the existence of a clear and
unmistakable right for the issuance of an injunction.
On the other hand, the LBP had every right to foreclose on the Real and
Chattel Mortgage since the ARMC had defaulted in the payment of its
overdue loan obligation with the bank. The foreclosure is supported by the
express mandate of P.D. 385
Section 2. No restraining order. Temporary or permanent injunction shall be
issued by the court against any government financial institution in any action
taken by such institution in compliance with the mandatory foreclosure
provided in Section 1 hereof whether such restraining order. temporary or
permanent injunction is sought by the borrower(s) or any third party or
parties, except after due hearing in which it is established by the borrower
and admitted by the government financial institution concerned that twenty
percent (20%) of the outstanding arrearages has been paid after the filing of
foreclosure proceedings.
Under these terms, the ARMC cannot secure an injunction against the LBP, a
government financial institution.
Injunction Became Moot and Academic
The present petition must also be denied because the act sought to be
enjoined by the ARMC is already a consummated act. The records show
that the foreclosure sale on the ARMC's properties was held sometime
in June 2005 and the LBP emerged as the winning bidder. An injunction
suit becomes moot and academic after the act sought to be enjoined
had already been consummated.
**WHEREFORE, we DENY the present petition for review on certiorari for lack of
merit and for being moot and academic. Costs against petitioner Agoo
Rice Mill Corporation.
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY COMMANDER RAYMOND
ALPUERTO OF THE NAVAL BASE CAMILLLO OSIAS, PORT SAN VICENTE, STA. ANA,
CAGAYAN, Petitioner,
v.REV. CLAUDIO R. CORTEZ, SR., Respondent.
G.R. No. 197472, September 07, 2015
SECOND DIVISION
DEL CASTILLO, J.:
An inalienable public land cannot be appropriated and thus may not be the
proper object of possession. Hence, injunction cannot be issued in order to
protect one's alleged right of possession over the same.
FACTS:
Respondent Rev. Claudio R. Cortez, Sr. (Rev. Cortez), a missionary, claimed
that since 1962, he has been in peaceful possession of about 50 hectares of
land located in the western portion of Palaui Island in SitioSiwangag, Sta. Ana,
Cagayan.
On May 22, 1967, President Ferdinand E. Marcos issued Proclamation No.
201 reserving for military purposes a parcel of the public domain situated in
Palaui Island.
On August 16, 1994, President Fidel V. Ramos issued Proclamation No. 447
declaring Palaui Island and the surrounding waters situated in the
Municipality of Sta. Ana, Cagayan as marine reserve.
On June 13,2000, Rev. Cortez filed a Petition for Injunction with Prayer for
the Issuance of a Writ of Preliminary Mandatory Injunction against Rogelio
C. Bias (Bias) in his capacity as Commanding Officer of the Philippine Naval
Command in Port San Vicente, Sta. Ana, Cagayan.
According to him, some members of the Philippine Navy, upon orders of
Bias, disturbed his peaceful and lawful possession of the said 50-hectare
portion of Palaui Island when on March 15, 2000, they commanded him and
his men, through the use of force and intimidation, to vacate the area. When
he sought assistance from the Office of the Philippine Naval Command, he
was met with sarcastic remarks and threatened with drastic military action if
26 of 50
 they do not vacate. Thus, Rev. Cortez and his men were constrained to leave
the area.
In view of these, Rev. Cortez filed the said Petition with the RTC seeking
preliminary mandatory injunction ordering Bias to restore to him possession
and to not disturb the same, and further, for the said preliminary writ, if
issued, to be made permanent.
Proceedings before the Regional Trial Court
RTC issued an Order dated February 21, 2002 granting the application for a
writ of preliminary mandatory injunction.
However, the same pertained to five hectares (subject area) only, not to the
whole 50 hectares claimed to have been occupied by Rev. Cortez
The area of 50 hectares he claimed to have peacefully and lawfully possessed
for the last 38 years cannot reasonably be determined or accurately
identified.
Andso it was ruled that unless there is a clear pronouncement regarding
ownership and possession of the land, or unless the land is covered by the
torrens title pointing to one of the parties as the undisputed owner, a writ
of preliminary injunction should not issue to take the property out of
possession of one party to place it in the hands of another x xx.
Under the circumstances, therefore, the title of petitioner to the 50 hectares
of land in Palaui Island remains unclear and doubtful, and [is] seriously
disputed by the government.
However, the court is not unmindful that [Rev. Cortez] has lawfully
possessed and occupied at least five (5) hectares of land situated at the
western portion of the Palaui
On July 3, 2007, the RTC rendered its Decision making the injunction final
and permanent. In so ruling, the said court made reference to the Indigenous
Peoples' [Fight] Act (EPRA)
CA Ruling:
CA upheld the RTC's issuance of a final injunction
The requisites necessary for the issuance of a writ of preliminary injunction
are: (1) the existence of a clear and unmistakable right that must be
protected; and (2) an urgent and paramount necessity for the writ to prevent
serious damage.
There exists a clear and unmistakable right in favor [of Rev. Cortez] since he
has been in open, continuous and notorious possession of a portion of
Palauiisland.
To deny the issuance of a writ of injunction would cause grave and
irreparable injury to [Rev. Cortez] since he will be displaced from the said
area which he has occupied since 1962
From the foregoing, we rule that the trial court did not err when it made
permanent the writ of preliminary mandatory injunction. Section 9, Rule 58
of the Rules of Court provides that if after the trial of the action it appears
that the applicant is entitled to have the act or acts complained of
permanently enjoined, the court shall grant a final injunction perpetually
restraining the party or person enjoined from the commission or continuance
of the act or acts or confirming the preliminary mandatory injunction.
ISSUE: WON Rev. Cortez is entitled to a final writ of mandatory injunction.
HELD: NO
Preliminary injunction vs Final injunction.
"Injunction is a judicial writ, process or proceeding whereby a party is
directed either to do a particular act, in which case it is called a mandatory
injunction, [as in this case,] or to refrain from doing a particular act, in which
case it is called a prohibitory injunction.""It may be the main action or merely
a provisional remedy for and as an incident in the main action."
"The main action for injunction is distinct from the provisional or ancillary
remedy of preliminary injunction. A preliminary injunction does not
determine the merits of a case or decide controverted facts. Since it is a mere
preventive remedy, it only seeks to prevent threatened wrong, further injury
and irreparable harm or injustice until the rights of the parties are settled."It
is usually granted when it is made to appear that there is a substantial
controversy between the parties and one of them is committing an act or
threatening the immediate commission of an act that will cause irreparable
injury or destroy the status quo of the controversy before a full hearing can
be had on the merits of the case."
A preliminary injunction is granted at any stage of an action or proceeding
prior to judgment or final order. For its issuance, the applicant is required to
show, at least tentatively, that he has a right which is not vitiated by any
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
substantial challenge or contradiction.Simply stated, the applicant needs only
to show that he has the ostensible right to the final relief prayed for in his
complaint.
On the other hand, the main action for injunction seeks a judgment that
embodies a final injunction. A final injunction is one which perpetually
restrains the party or person enjoined from the commission or continuance
of an act, or in case of mandatory injunctive writ, one which confirms the
preliminary mandatory injuction. It is issued when the court, after trial on
the merits, is convinced that the applicant is entitled to have the act or acts
complained of permanently enjoined.Otherwise stated, it is only after the
court has come up with a definite pronouncement respecting an applicant's
right and of the act violative of such right, based on its appreciation of the
evidence presented, that a final injunction is issued. To be a basis for a final
and permanent injunction, the right and the act violative thereof must be
established by the applicant with absolute certainty.
What was before the trial court at the time of the issuance of its July 3,
2007 Decision is whether a final injunction should issue. While the RTC
seemed to realize this as it in fact made the injunction permanent, the Court,
however, finds the same to be wanting in basis.
Indeed, the RTC endeavored to provide a narrow distinction between a
preliminary injunction and a final injunction. Despite this, the RTC
apparently confused itself. For one, what it cited in its Decision were
jurisprudence relating to preliminary injunction and/or mandatory injunction
as an ancillary writ and not as a final injunction. At that point, the duty of the
RTC was to determine, based on the evidence presented during trial, if Rev.
Cortez has conclusively established his claimed right (as opposed to
preliminary injunction where an applicant only needs to at
least tentatively show that he has a right) over the subject area. This is
considering that the existence of such right plays an important part in
determining whether the preliminary writ of mandatory injunction should be
confirmed.
"Two requisites must concur for injunction to issue: (1) there must be a right
to be protected and (2) the acts against which the injunction is to be directed
are violative of said right."35 Thus, it is necessary that the Court initially
determine whether the right asserted by Rev. Cortez indeed exists. As earlier
stressed, it is necessary that such right must have been established by him
with absolute certainty.
Rev. Cortez argues that he is entitled to the injunctive writ based on the
right of possession (jus possesionis) by reason of his peaceful and continuous
possession of the subject area since 1962. He avers that as this right is
protected by law, he cannot be peremptorily dispossessed therefrom, or if
already dispossessed, is entitled to be restored in possession. Hence, the
mandatory injunctive writ was correctly issued in his favor.
Jus possessionis or possession in the concept of an owner36 is one of the two
concepts of possession provided under Article 52537 of the Civil Code. Also
referred to as adverse possession, 38 this kind of possession is one which can
ripen into ownership by prescription. 39 As correctly asserted by Rev. Cortez, a
possessor in the concept of an owner has in his favor the legal presumption
that he possesses with a just title and he cannot be obliged to show or prove
it. In the same manner, the law endows every possessor with the right to be
respected in his possession.41
It must be emphasized, however, that only things and rights which are
susceptible of being appropriated may be the object of possession. 42 The
following cannot be appropriated and hence, cannot be possessed: property
of the public dominion, common things (res communes) such as sunlight and
air, and things specifically prohibited by law.43
In this case, there is no such proof showing that the subject portion of Palaui
Island has been declared alienable and disposable when Rev. Cortez started
to occupy the same. Hence, it must be considered as still inalienable public
domain. Being such, it cannot be appropriated and therefore not a proper
subject of possession under Article 530 of the Civil Code. Viewed in this light,
Rev. Cortez' claimed right of possession has no leg to stand on. His possession
of the subject area, even if the same be in the concept of an owner or no
matter how long, cannot produce any legal effect in his favor since the
property cannot be lawfully possessed in the first place.The same goes true
even if Proclamation No. 201 and Proclamation No. 447 were made subject
to private rights.
In view of the foregoing, the Court finds that Rev. Cortez failed to
conclusively establish his claimed right over the subject portion of Palaui
Island as would entitle him to the issuance of a final injunction.
We note that Rev. Cortez alleged that he sought the injunction so that he
could continue his humanitarian works. However, considering that inalienable
public land was involved, this Court is constrained to rule in accordance with
the aforementioned.
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 **WHEREFORE, the Petition is GRANTED. The June 29, 2011 Decision of the
Court of Appeals in CA-GR. CV No. 89968 denying the appeal and affirming
the July 3, 2007 Decision of the Regional Trial Court of Aparri, Cagayan-
Branch 08 in Spl. Civil Action Case No. 11-2403, is REVERSED and SET ASIDE.
Accordingly, the final injunction issued in this case is ordered DISSOLVED
and the Petition for Injunction in Spl. Civil Action Case No. II-
2403, DISMISSED.
EL BANCO ESPAOL-FILIPINO, plaintiff-appellant,
vs.
VICENTE PALANCA, administrator of the estate of EngracioPalancaTanquinyeng,
defendant-appellant.
Aitken and DeSelms for appellant.
Hartigan and Welch for appellee.
G.R. No. L-11390
March 26, 1918
EN BANC
STREET, J.:
FACTS:
EngracioPalancaTanquinyeng y Limquingco mortgaged various parcels of real
property in Manila to El Banco Espanol-Filipino. Afterwards, Engracio
returned to China and there he died on January 29, 1810 without returning
again to the Philippines.
The mortgagor then instituted foreclosure proceeding but since defendant is
a non-resident, it was necessary to give notice by publication. The Clerk of
Court was also directed to send copy of the summons to the defendants last
known address, which is in Amoy, China. It is not shown whether the Clerk
complied with this requirement.
Nevertheless, after publication in a newspaper of the City of Manila, the
cause proceeded and judgment by default was rendered. The decision was
likewise published and afterwards sale by public auction was held with the
bank as the highest bidder. On August 7, 1908, this sale was confirmed by the
court.
However, about seven years after the confirmation of this sale, a motion was
made by Vicente Palanca, as administrator of the estate of the original
defendant, wherein the applicant requested the court to set aside the order
of default and the judgment, and to vacate all the proceedings subsequent
thereto.
The basis of this application was that the order of default and the judgment
rendered thereon were void because the court had never acquired
jurisdiction over the defendant or over the subject of the action.
ISSUE/s:
1.) WON the lower court acquired jurisdiction over the defendant and the
subject matter of the action
2.) WON due process of law was observed
HELD:
On Jurisdiction: The word jurisdiction is used in several different, though
related, senses since it may have reference (1) to the authority of the court to
entertain a particular kind of action or to administer a particular kind of relief,
or it may refer to the power of the court over the parties, or (2) over the
property which is the subject to the litigation.
The sovereign authority which organizes a court determines the nature and
extent of its powers in general and thus fixes its competency or jurisdiction
with reference to the actions which it may entertain and the relief it may
grant.
How Jurisdiction is Acquired
Jurisdiction over the person is acquired by the voluntary appearance of a
party in court and his submission to its authority, or it is acquired by the
coercive power of legal process exerted over the person.
Jurisdiction over the property which is the subject of the litigation may result
either from a seizure of the property under legal process, whereby it is
brought into the actual custody of the law, or it may result from the
institution of legal proceedings wherein, under special provisions of law, the
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
power of the court over the property is recognized and made effective. In the
latter case the property, though at all times within the potential power of the
court, may never be taken into actual custody at all. An illustration of the
jurisdiction acquired by actual seizure is found in attachment proceedings,
where the property is seized at the beginning of the action, or some
subsequent stage of its progress, and held to abide the final event of the
litigation. An illustration of what we term potential jurisdiction over the res, is
found in the proceeding to register the title of land under our system for the
registration of land. Here the court, without taking actual physical control
over the property assumes, at the instance of some person claiming to be
owner, to exercise a jurisdiction in rem over the property and to adjudicate
the title in favor of the petitioner against all the world.
In the terminology of American law the action to foreclose a mortgage is said
to be a proceeding quasi in rem, by which is expressed the idea that while it
is not strictly speaking an action in rem yet it partakes of that nature and is
substantially such. The expression "action in rem" is, in its narrow application,
used only with reference to certain proceedings in courts of admiralty
wherein the property alone is treated as responsible for the claim or
obligation upon which the proceedings are based. The action quasi rem
differs from the true action in rem in the circumstance that in the former an
individual is named as defendant, and the purpose of the proceeding is to
subject his interest therein to the obligation or lien burdening the property.
All proceedings having for their sole object the sale or other disposition of
the property of the defendant, whether by attachment, foreclosure, or other
form of remedy, are in a general way thus designated. The judgment entered
in these proceedings is conclusive only between the parties.
It is true that in proceedings of this character, if the defendant for whom
publication is made appears, the action becomes as to him a personal action
and is conducted as such. This, however, does not affect the proposition that
where the defendant fails to appear the action is quasi in rem; and it should
therefore be considered with reference to the principles governing actions in
rem.
On Due Process
xxx As applied to a judicial proceeding, however, it may be laid down with
certainty that the requirement of due process is satisfied if the following
conditions are present, namely; (1) There must be a court or tribunal clothed
with judicial power to hear and determine the matter before it; (2)
jurisdiction must be lawfully acquired over the person of the defendant or
over the property which is the subject of the proceeding; (3) the defendant
must be given an opportunity to be heard; and (4) judgment must be
rendered upon lawful hearing.
Passing at once to the requisite that the defendant shall have an opportunity
to be heard, we observe that in a foreclosure case some notification of the
proceedings to the nonresident owner, prescribing the time within which
appearance must be made, is everywhere recognized as essential. To answer
this necessity the statutes generally provide for publication, and usually in
addition thereto, for the mailing of notice to the defendant, if his residence is
known. Though commonly called constructive, or substituted service of
process in any true sense. It is merely a means provided by law whereby the
owner may be admonished that his property is the subject of judicial
proceedings and that it is incumbent upon him to take such steps as he sees
fit to protect it.
It will be observed that this mode of notification does not involve any
absolute assurance that the absent owner shall thereby receive actual notice.
The periodical containing the publication may never in fact come to his
hands, and the chances that he should discover the notice may often be very
slight. Even where notice is sent by mail the probability of his receiving it,
though much increased, is dependent upon the correctness of the address to
which it is forwarded as well as upon the regularity and security of the mail
service. It will be noted, furthermore, that the provision of our law relative to
the mailing of notice does not absolutely require the mailing of notice
unconditionally and in every event, but only in the case where the
defendant's residence is known. In the light of all these facts, it is evident that
actual notice to the defendant in cases of this kind is not, under the law, to be
considered absolutely necessary.
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 The idea upon which the law proceeds in recognizing the efficacy of a means
of notification which may fall short of actual notice is apparently this:
Property is always assumed to be in the possession of its owner, in person or
by agent; and he may be safely held, under certain conditions, to be affected
with knowledge that proceedings have been instituted for its condemnation
and sale.
Did the failure of the clerk to send notice to defendants last known address
constitute denial of due process?
The observations which have just been made lead to the conclusion that the
failure of the clerk to mail the notice, if in fact he did so fail in his duty, is not
such an irregularity, as amounts to a denial of due process of law; and hence
in our opinion that irregularity, if proved, would not avoid the judgment in
this case. Notice was given by publication in a newspaper and this is the only
form of notice which the law unconditionally requires. This in our opinion is
all that was absolutely necessary to sustain the proceedings.
It will be observed that in considering the effect of this irregularity, it makes a
difference whether it be viewed as a question involving jurisdiction or as a
question involving due process of law. In the matter of jurisdiction there can
be no distinction between the much and the little.
The court either has jurisdiction or it has not; and if the requirement as to the
mailing of notice should be considered as a step antecedent to the acquiring
of jurisdiction, there could be no escape from the conclusion that the failure
to take that step was fatal to the validity of the judgment. In the application
of the idea of due process of law, on the other hand, it is clearly unnecessary
to be so rigorous.
The jurisdiction being once established, all that due process of law thereafter
requires is an opportunity for the defendant to be heard; and as publication
was duly made in the newspaper, it would seem highly unreasonable to hold
that failure to mail the notice was fatal. We think that in applying the
requirement of due process of law, it is permissible to reflect upon the
purposes of the provision which is supposed to have been violated and the
principle underlying the exercise of judicial power in these proceedings.
Judge in the light of these conceptions, we think that the provision of Act of
Congress declaring that no person shall be deprived of his property without
due process of law has not been infringed.
REPUBLIC V EVANGELISTA
Private respondent Legaspi is the owner of a land located in Bigte, Norzagaray,
Bulacan. In November 1999, petitioner Calimlim, entered into a Memorandum of
Agreement (MOA) with one Ciriaco Reyes where the latter was given a permit to
hunt for treasure in a land in Bigte, Norzagaray, Bulacan. Petitioner Diciano signed
the MOA as a witness.
Reyes, together with petitioners, started, digging, tunneling and blasting works on
the said land of Legaspi allegedly bringing along with them about 80 military
personnel to guard and encamp the area to intimidate Legaspi and its other
occupants.
On February 15, 2000, Through an SPA, Legaspi appointed his nephewprivate
respondent Gutierrezas his attorney-in-fact. He was authorized to deal with the
treasure hunting activities on Legaspis land and to file charges against those who
may enter it without the authority. Legaspi agreed to give Gutierrez 40% of the
treasure that may be found in the land.
On February 29, 2000, Gutierrez filed a case for damages and injunction against
petitioners for illegally entering Legaspis land. He hired the legal services of Atty.
Homobono Adaza who shall be given 30% of Legaspis Share in whatever treasure
may be found as legal fees and P5,000.00 as appearance fee.
A 72-hour TRO was issued against petitioner upon the filing of the complaint.
The case was subsequently raffled to Branch 223 of RTC of Quezon City, presided
by public respondent Judge Victorino P. Evangelista which issued another 72-hour
TROon March 2, 2000.
On March 14, 2000, petitioners filed a Motion to Dismiss contending that (1) there
is no real party-in-interest as the SPA of Gutierrez to bring the suit was already
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
revoked by Legaspi through a deed of revocation executed on March 7, 2000, and
(2) Gutierrez failed to establish that the alleged armed men guarding the area were
acting on orders of petitioners. On March 17, 2000, petitioners also filed a Motion
for Inhibition of the respondent judge on the ground of alleged partiality in favor of
private respondent.
On March 23, 2000, the trial court granted private respondents application for a
writ of preliminary injunction on the following grounds: (1) the diggings and
blastings appear to have been made on the land of Legaspi, hence, there is an
urgent need to maintain the status quo to prevent serious damage to Legaspis
land; and, (2) the SPA granted to Gutierrez continues to be valid.
The trial court also issued another Order denying petitioners motion to dismiss and
requiring petitioners to answer the complaint and it likewise denied petitioners
motion for inhibition.
CA affirmed the RTC decision.
ISSUE: WON the issuance of Writ of Preliminary Injunction is justified.
HELD: Yes. The court held thata writ of preliminary injunction is an ancilliary or
preventive remedy that is 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.
It is issued by the court to prevent threatened or continuous irremediable injury to
the applicant before his claim can be thoroughly studied and adjudicated. Its aim is
to preserve the status quo ante until the merits of the case can be heard fully,
upon the applicants showing of two important conditions, viz.: (1) the right to be
protected prima facie exists; and, (2) the acts sought to be enjoined are violative of
that right.
Section 3, Rule 58 of the 1997 Rules of Civil Procedure provides that a writ of
preliminary injunction may be issued when it is established:
(a) that the applicant is entitled to the relief demanded, the whole or part of such
relief consists in restraining the commission or continuance of the act or acts
complained of, or in requiring the performance of an act or acts, either for a
limited period or perpetually;
(b) that the commission, continuance or non-performance of the act or acts
complained of during the litigation would probably work injustice to the applicant;
or
(c) that a party, court, agency or a person is doing, threatening, or is attempting to
do, or is procuring or suffering to be done, some act or acts probably in violation of
the rights of the applicant respecting the subject of the action or proceeding, and
tending to render the judgment ineffectual.
It is clear that mere prima facie evidence is needed to establish the applicants
rights or interests in the subject matter of the main actionat the hearing for the
issuance of a writ of preliminary injunction. It is not required that the applicant
should conclusively show that there was a violation of his rights as this issue will
still be fully litigated in the main case. Thus, an applicant for a writ is required only
to show that he has an ostensible right to the final relief prayed for in his
complaint.
In the case at bar, the SC found that respondent judge had sufficient basis to issue
the writ of preliminary injunction. It was established, prima facie, that Legaspi has
a right to peaceful possession of his land, pendente lite. Legaspi had title to the
subject land. It was likewise established that the diggings were conducted by
petitioners in the enclosed area of Legaspis land. It was necessary for the trial
court to issue the writ of preliminary injunction during the pendency of the main
case in order to preserve the rights and interests of private respondents Legaspi
and Gutierrez.
Hence, trial court and CA decisions were AFFIRMED.
RECTO V ESCALER
On June 24, 1997, the Buklod ng Pag-ibig Foundation, Inc.s principal co-founder
and Spiritual Director, Fr. Pascual Adorable, S.J., passed away. And was succeeded
by Fr. Nicasio Cruz, S.J. (Fr. Nic).
However, on September 15, 1999, petitioners, wrote to Rev. Fr. Romeo Intengan,
the Jesuit Provincial of the Society of Jesus (Jesuit Order), informing him that they
were returning Fr. Nic to the Jesuit Order since his vision and mission differed from
those of the Foundation. Petitioners also sent Fr. Nic a letter terminating him as the
Foundations Spiritual Director. Some members of the Foundation requested that
Fr. Nic be retained, but petitioners did not heed the request.
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Consequently, Bishop Teodoro Bacani (Bishop Bacani), intervened and reinstated
Fr. Nic until the latter could turn over the position to Bishop Federico Escaler, S.J.
(Bishop Escaler), either 30 days after March 6, 2000 or on April 15, 2000 to which
Petitioners agreed.
On May 10, 2000, Bishop Escaler,informed the Foundations Apostles that pursuant
to its By-laws, the term of the present Elders should have ended on March 17,
2000. He set May 19, 2000 as the date for the selection of a new set of Elders.
Instead of complying, petitioners issued Buklod ng Pag-ibig Bulletin Number 6,
informing their members that Bishop Escaler was not their Spiritual Director and
that the Foundation had no Spiritual Director at that moment. Bishop Escaler reset
the intended selection of Elders to May 24, 2000.
Subsequently, petitioners submitted to the SEC the Foundations Amended By-laws,
supposedly ratified by 2/3 votes of the members. The SEC approved the same on
May 16, 2000 after which thepetitioners issued a notice to the Foundations
members, naming Fr. Dominador Guzman as their Spiritual Director, and inviting
qualified members to attend the selection of Elders on May 24, 2000.
On May 23, 2000, respondents filed before the SEC a Petition to Declare the Nullity
of the Amended By-laws with Prayer for the Issuance of a Temporary Restraining
Order (TRO) and/or Writ of Preliminary Injunction. They alleged that the subject
Amended By-laws was void because Bishop Escaler, the Foundations Spiritual
Director, did not preside over the supposed meeting and the majority of qualified
members was not even notified or given the opportunity to participate in the
voting. Respondents also prayed that petitioners be restrained from conducting
their scheduled selection of Elders on May 24, 2000.
On the same day, the SEC issued a 72-hour TRO barring petitioners from holding
the scheduled selection of Elders which was extended for another 20 days on May
29, 2000. It also directed petitioners to submit the Foundations financial reports,
and scheduled the examination of the same on June 5, 2000.
At the hearing on the issuance of a Writ of Preliminary Injunction the parties
agreed to respect the May 29, 2000 Order, pending determination of the injunction
case. However, on June 9, 2000, Bishop Escaler set the special assembly for the
election of the new set of Elders on June 17, 2000.
Petitioners, in their Answer with Special Affirmative Defenses, Counterclaim and
prayer for Preliminary Injunction and Urgent Motion for the Issuance of a TRO
asked that Bishop Escaler be enjoined from proceeding with the June 17, 2000
assembly. They asserted that the number of members qualified to vote was 27 not
59 as claimed by respondents and that the Amended By-laws was approved by 2/3
of said members, as required by the previous By-laws. Petitioners specifically
denied having accepted Bishop Escaler as the Foundations Spiritual Director.
On June 15, 2000, petitioners filed an Urgent Ex-parte Motion for the Issuance of a
Temporary Retraining Order, praying for a TRO effective only for 72 hours to
prevent respondents from conducting an election on June 17, 2000. The following
day, a hearing on petitioners motion was heldand the SEC Hearing Officer ordered
petitioners Urgent Motion to be submitted for resolution.
On June 22, 2000, a hearing on respondents application for Preliminary Injunction
was held, while hearings on petitioners own application for Preliminary Injunction
were held on June 28, and July 3 and 4, 2000.
In the meantime, Republic Act (R.A.) No. 8799 took effect in August 2000. Pursuant
to Section 5.2 of that law, the case was transferred to the RTC of Quezon City,
Branch 93.
Consequently, during the August 1, 2000 hearing, the SEC Hearing Officer
submitted the issue on the issuance of Preliminary Injunction for resolution. On the
other hand, the trial court issued an Order on February 5, 2001, setting a status
hearing on May 15, 2001.
On May 15, 2001, the RTC issued an Order resolving to focus on the issues of (1)
whether or not the court should proceed to hear the case on the principal prayer
for the nullification of the Amended By-laws of the concerned corporation; and (2)
whether or not the court should proceed to resolve the injunction incident, which
have been submitted for final resolution before the SEC before the effectivity of
R.A. No. 8799. The RTC directed the parties to submit their simultaneous
memoranda on these two issues and, to consider these incidents submitted for
resolution. It also ordered respondents to file their Comments and/or Opposition
to Defendants (herein petitioners) Motion to Expunge, and petitioners to file their
Comment and/or Opposition to respondents Motion to Admit Amended Petition,
setting the hearing for these motions on July 5, 2001.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
Subsequently, on November 21, 2001, the trial court issued an orderdenying
petitioners Motion to Expunge and respondents Motion to Admit, and resolving to
proceed to hear the case on the principal prayer for the nullification of the second
Amended By-laws, and to consider the resolution of the parties respective
applications for injunction.
On July 29, 2002, the RTC declared the alleged Amended By-laws of May 14, 2000
null and void.
Both parties appealed the Judgment to the CA.
The CA ruled in favor of Plaintiffs-Appellants and remanded the case to the court a
quo.
ISSUE: WON the CA decision should be reversed.
HELD: No. It must be pointed out that there was a preliminary issue that of the
parties respective petitions for injunction that had to be determined before the
resolution of the main case. When the case was transferred from the SEC to the
RTC, only the matter of the petitions for preliminary injunctions had been heard
and submitted for resolution. The hearings to resolve the petition to nullify the
Foundations Amended By-laws were yet to be held.
An injunctive writ is not a judgment on the merits of the case. A writ of preliminary
injunction is generally based solely on initial and incomplete evidence. The
evidence submitted during the hearing on an application for a writ of preliminary
injunction is not conclusive or complete, for only a sampling is needed to give the
trial court an idea of the justification for the preliminary injunction pending the
decision of the case on the merits.
An order granting a preliminary injunction is not a final resolution or decision
disposing of the case. It is based on a preliminary determination of the status quo
and on petitioners entitlement to the Writ.
Thus, the findings of fact and opinion of a court when issuing the writ of
preliminary injunction are interlocutory in nature and made before the trial on the
merits is commenced or terminated. There may be vital facts to be presented at
trial which may not be obtained or presented during the hearing on the application
for the injunctive writ. The trial court needs to conduct substantial proceedings in
order to put the main controversy to rest.
As such, even as respondents claim that the RTC correctly ruled that the Amended
By-laws are not valid, they are still contesting the latters finding on the number of
qualified apostles. This only further underscores the need for trial to determine
which of the partys claims are true and relevant.
WHEREFORE, the Petition for Review is DENIED.
PINEDA V CA
On May 14, 2004, Pineda entered into a Memorandum of Agreement with
Lakandula High School (LHS) represented by its principal, Dr. Alice B. Blas (Dr. Blas),
for a five-year lease of the school canteen with a monthly rental of P20,000.00 and
an additional P4,000.00 monthly for the schools feeding program as well as
medicines for the school clinic. Pineda renovated the canteen and equipped it with
new utensils, tables, chairs, and electric fans.
Later, the faculty and personnel of LHS sent a letter to the Division School
Superintendent, Dr. Ma. Luisa Quiones (Dr. Quiones), questioning the validity of the
MOA. Dr. Blas sent a letter-reply and an exchange of correspondence followed.On
August 14, 2004, Pineda and Dr. Blas executed another MOA superseding the first
MOA which is now following the standard form under Department Order No. 95,
Series of 1998 or the Revised Implementing Guidelines for the Turnover of School
Canteens to Teachers Cooperatives.
Assistant Schools Division Superintendent Isabelita M. Santos (Ms. Santos) and
Administrative Officer Vicente N. Macarubbo (Mr. Macarubbo) wrote a letter to Dr.
Quiones on October 20, 2004 where they relayed their observations and
recommended that their findings be submitted to the DepEd - Central Office for its
final word on the matter. They were of the view that Dr. Blas did not violate any
rule in executing the August-MOA and found the lease to Pineda beneficial to the
school. Thus, Dr. Quiones wrote the DepEd seeking its decision on the matter.
The August-MOA was declared null and void ab initio and was ordered to be
cancelled by respondent DepEd through Undersecretary Jose Luis Martin C. Gascon
stating that the management and operation of the canteen should revert to the
Home Economics Department of the School. Pineda was ordered to cease and
desist from further managing and operating the canteen. Prompting him to file a
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petition for certiorari with prayer for temporary restraining order (TRO) and/or writ
of preliminary injunction before the RTC.
RTC ordered the issuance of a Writ of Preliminary Mandatory Injunction enjoining
the enforcement of Gascons decision.The decision was appealed to the CA.
The CA affirmed the order of the RTC denying DepEds motion to dismiss but
reversed its order granting the issuance of the Writ of Preliminary Mandatory
Injunction. According to the CA, DepEds order cancelling the August-MOA had
already been partially implemented whichin effect, was the status quo. In addition,
the CA held that Pineda appeared to have no clear or unmistakable right to be
protected since the MOA that granted her the right to operate the school canteen
was invalidated by the DepEd for not being sanctioned by its existing rules and
regulations. Finally, the CA also held that there was no pressing necessity to avoid
injurious consequences which would warrant the issuance of the injunctive writ as
the purported damage to Pineda, if she would not able to operate the canteen,
was readily quantifiable.
Hence this petition for certiorari.
ISSUE: WON the CA decision in cancelling the RTC order granting the issuance of
the Writ of Preliminary Mandatory Injunction proper.
HELD: Yes. The SC found no reason for the reversal and setting aside by the CA of
the writ of preliminary mandatory injunction issued by the RTC. The very writ of
preliminary injunction set aside by the CA could no longer lie for the acts sought to
be enjoined had already been accomplished or consummated as the DepEd
already prohibited Pineda from operating the school canteen. The CA is correct in
its ruling as Pineda had ceased the operation of the school canteen since 2005,
hence, the RTCs preliminary writ should be set aside as there was nothing more to
enjoin.
A preliminary injunction is a provisional remedy that a party may resort to in order
to preserve and protect certain rights and interests during the pendency of an
action. Its sole objective is to preserve the status quo until the merits of the case
can be heard fully.
Status quo is defined as the last actual, peaceful, and uncontested status that
precedes the actual controversy, that which is existing at the time of the filing of
the case. Indubitably, the trial court must not make use of its injunctive relief to
alter such status.
In this case, the Decision of Undersecretary Gascon ordering Pineda to cease and
desist from operating and managing the school canteen and to revert the
management thereof to the Home Economics Department and to the Principal, has
already been partially implemented which is evident in Pinedas amended petition.
Finally, while the grant or denial of a preliminary injunction is discretionary on the
part of the trial court, grave abuse of discretion is committed when it does not
maintain the status quo which is the last actual, peaceable and uncontested status
which preceded the actual controversy. If there is such a commission, it is
correctible through a writ of certiorari. In this case, the status quo ante litem or the
state of affairs existing at the time of the filing of the case was that Pineda was
already prohibited from operating the school canteen. For said reason, the trial
court cannot make use of its injunctive power to change said status.
WHEREFORE, the petition is DENIED.
SPOUSES RAMON M. NISCE and A. NATIVIDAD PARAS- NISCE, - versus -
EQUITABLE PCI BANK, INC.,
Facts:
Equitable PCI Bank filed a petition for extrajudicial foreclosure .It sought to
foreclose the real estate mortgage contracts executed by the spouses Ramon and
Natividad Nisce over two parcels of land . The mortgage contracts were executed
by the spouses Nisce to secure their obligation. The Nisce spouses prayed for
injunctive relief against the Bank .They alleged that they had requested the bank
to setoff the peso equivalent of their obligation against their US dollar account
with PCI Capital Asia Limited (Hong Kong), a subsidiary of the Bank. The Bank
accepted their offer and requested for an estimate of the balance of their account;
they complied with the Banks request and in a letter dated February 11, 2002,
informed it that the estimated balance of their account was US$51,000.42,and that
as of December 2002, Natividads US dollar deposit with it amounted to at least
P9,000,000.00; they were surprised when they received a letter from the Bank
demanding payment of their loan account, and later a petition for extrajudicial
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
foreclosure.
In its Answer to the complaint, the Bank alleged that the spouses had no cause of
action for legal compensation since PCI Capital was a different corporation with a
separate and distinct personality;
In the meantime, the Ex-Officio Sheriff set the sale at public auction . The spouses
Nisce then filed a Supplemental Complaint with plea for a temporary restraining
order to enjoin the sale at public auction.
After weighing the parties arguments along with their documentary evidence, the
RTC declared that justice would be best served if a writ of preliminary injunction
would be issued to preserve the status quo.
The Bank alleged that the RTC had acted without or in excess of its jurisdiction, or
with grave abuse of its discretion amounting to lack or excess of jurisdiction when
it issued the assailed order;It said that the spouses Nisce had failed to prove the
requisites for the issuance of a writ of preliminary injunction; respondents claim
that their account with petitioner had been extinguished by legal compensation
has no factual and legal basis. . It insisted that the spouses Nisce had failed to
establish irreparable injury in case of denial of their plea for injunctive relief.
The appellate court declared that the trial court committed grave abuse of its
discretion in issuing the assailed order, since no plausible reason was given by the
spouses Nisce to justify the injunction of the extrajudicial foreclosure of the real
estate mortgage. Given their admission that they had not settled the obligations
secured by the mortgage, the Bank had a clear right to seek the remedy of
foreclosure. The appellate court concluded that the injunctive writ was issued by
the RTC without factual and legal basis.
Issue:
WON THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT
RESPONDENT JUDGE HAD COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING A TEMPORARY
RESTRAINING ORDER AND A WRIT OF PRELIMINARY INJUNCTION IN FAVOR OF THE
SPOUSES NISCE.
The Ruling of the Court
Petitioners Are Not Entitled to a Writ of Preliminary Prohibitory Injunction
Section 3, Rule 58 of the Rules of Court provides that a preliminary injunction may
be granted when the following have been established:
(a) That the applicant is entitled to the relief demanded, and the whole or part of
such relief consists in restraining the commission or continuance of the act or acts
complained of, or in requiring the performance of an act or acts, either for a
limited period or perpetually;
(b) That the commission, continuance or nonperformance of the act or acts
complained of during the litigation would probably work injustice to the applicant;
or
(c) That a party, court, agency or a person is doing, threatening, or is attempting to
do, or is procuring or suffering to be done, some act or acts probably in violation of
the rights of the applicant respecting the subject of the action or proceeding, and
tendering to render the judgment ineffectual.
Injunction is a preservative remedy for the protection of the parties substantive
rights and interests. The sole aim of a preliminary injunction is to preserve the
status quo within the last actual status that preceded the pending controversy until
the merits of the case can be heard fully. Moreover, a petition for a preliminary
injunction is an equitable remedy, and one who comes to claim for equity must do
so with clean hands. It is to be resorted to by a litigant to prevent or preserve a
right or interest where there is a pressing necessity to avoid injurious
consequences which cannot be remedied under any standard of compensation. A
petition for a writ of preliminary injunction rests upon an alleged existence of an
emergency or of a special reason for such a writ before the case can be regularly
tried. By issuing a writ of preliminary injunction, the court can thereby prevent a
threatened or continued irreparable injury to the plaintiff before a judgment can
be rendered on the claim.
The plaintiff praying for a writ of preliminary injunction must further establish that
he or she has a present and unmistakable right to be protected; that the facts
against which injunction is directed violate such right;and there is a special and
paramount necessity for the writ to prevent serious damages. In the absence of
proof of a legal right and the injury sustained by the plaintiff, an order for the
31 of 50
issuance of a writ of preliminary injunction will be nullified. Thus, where the
plaintiffs right is doubtful or disputed, a preliminary injunction is not proper. The
possibility of irreparable damage without proof of an actual existing right is not a
ground for a preliminary injunction.
We agree with respondents contention that as creditor-mortgagee, it has the right
under the real estate mortgage contract and the amendment thereto to foreclose
extrajudicially, the real estate mortgage and sell the property at public auction,
considering that petitioners had failed to pay their loans, plus interests and other
incremental amounts as provided for in the deeds. Petitioners contend, however,
that if respondent bank extrajudicially forecloses the real estate mortgage and has
petitioners property sold at public auction for an amount in excess of the balance
of their loan account, petitioners contractual and substantive rights under the real
estate mortgage would be violated; in such a case, the extrajudicial foreclosure
sale may be enjoined by a writ of preliminary injunction.
Respondent bank sought the extrajudicial foreclosure of the real estate mortgage
and was to sell the property at public auction . The amount is based on Promissory
Notes , interests, penalty charges, and attorneys fees, exclusive of all interests,
penalties, other charges, and foreclosure costs accruing thereafter. Petitioners
assertedthat respondents sought the extrajudicial foreclosure of the mortgaged
deed for an amount far in excess of what they owed.
It was the burden of petitioners, as plaintiffs below, to adduce preponderant
evidence to prove their claim Petitioners, however, failed to discharge their
burden.
The petition is DENIED for lack of merit.
EXECUTIVE SECRETARY, SECRETARY OF FINANCE, COMMISSIONER OF CUSTOMS,
DISTRICT COLLECTOR OF CUSTOMS, Petitioners, v. FORERUNNER MULTI
RESOURCES, INC., Respondent.
The Facts
President Gloria Macapagal-Arroyo imposes a partial ban on the importation of
used motor vehicles. The ban is part of several measures EO 156 adopts to
"accelerate the sound development of the motor vehicle industry in the
Philippines."
Respondent Forerunner Multi Resources, Inc.,a corporation engaged in the
importation of used motor vehicles sued the government to declare invalid EO 156.
Respondent sought a preliminary injunctive writ to enjoin, litis pendentia, the
enforcement of EO 156.
The Ruling of the Trial Court
Acting on respondents application for preliminary injunctive remedy, the trial court
granted relief, initially by issuing a temporary restraining order followed by a writ
of preliminary injunction,however, the trial court reconsidered its Order and lifted
the injunctive writ.
The Ruling of the Court of Appeals
In the appellate courts estimation, the trial court committed grave abuse of
discretion in lifting the preliminary injunctive writ it earlier issued. The appellate
court held that the implementation of EO 156 "would put petitioner in a financial
crisis."
Petitioners are now before this Court charging the Court of Appeals with having
committed an error of law in reinstating the preliminary injunctive writ for
respondent.
The Issue
The question is whether the Court of Appeals erred in granting preliminary
injunctive relief to respondent to enjoin enforcement of EO 156.
The Courts Ruling
We hold that it was error for the Court of Appeals to grant preliminary injunctive
relief to respondent.
Respondent Without Clear Legal Right to
Import Used Motor Vehicles
It is a deeply ingrained doctrine in Philippine remedial law that a preliminary
injunctive writ under Rule 58 issues only upon a showing of the applicants "clear
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
legal right" being violated or under threat of violation by the defendant."Clear legal
right," within the meaning of Rule 58, contemplates a right "clearly founded in or
granted by law." Any hint of doubt or dispute on the asserted legal right precludes
the grant of preliminary injunctive relief. For suits attacking the validity of laws or
issuances with the force and effect of law, as here, the applicant for preliminary
injunctive relief bears the added burden of overcoming the presumption of validity
inhering in such laws or issuances. These procedural barriers to the issuance of a
preliminary injunctive writ are rooted on the equitable nature of such relief,
preserving the status quo while, at the same time, restricting the course of action
of the defendants even before adverse judgment is rendered against them.
We found EO 156 a valid police power measure addressing an "urgent national
concern":
There is no doubt that the issuance of the ban to protect the domestic industry is a
reasonable exercise of police power. The deterioration of the local motor
manufacturing firms due to the influx of imported used motor vehicles is an urgent
national concern that needs to be swiftly addressed by the President. In the
exercise of delegated police power, the executive can therefore validly proscribe
the importation of these vehicles.
WHEREFORE, PETITION GRANTED
LAND BANK OF THE PHILIPPINES - versus - HEIRS OF SEVERINO LISTANA,
The Facts
Listana owned a 246.0561-hectare parcel of land in Inlagadian, Casiguran,
Sorsogon. Listana voluntarily sold the property to the government, through the
Department of Agrarian Reform, under the Comprehensive Agrarian Reform Law of
1988.
The Department of Agrarian Reform Adjudication Board (DARAB) of Sorsogon
commenced summary administrative proceedings to determine the amount of just
compensation for the property.the DARAB set the amount at P10,956,963.25 and
ordered petitioner Land Bank of the Philippines (LBP) to pay Listana the same.
The Provincial Agrarian Reform Adjudicator (PARAD) issued a writ of execution
ordering Land Bank Manager and Agrarian Operations Center Head Alex A. Lorayes
to pay Listana P10,956,963.25. Lorayes refused. Thus, Listana filed with the PARAD
a motion for contempt against Lorayes.
LBP filed with the Regional Trial Court, a petition for judicial determination of the
amount of just compensation for the property. LBP challenged the amount set by
the DARAB and prayed that the amount be fixed at P5,871,689.03.
The PARAD granted Listanas motion for contempt. The PARAD cited Lorayes for
indirect contempt and ordered his imprisonment until he complied with the
DARABs Decision.
The SAC dismissed LBPs petition for judicial determination of the amount of just
compensation for the property. LBP appealed .
The PARAD ordered the issuance of an alias writ of execution, ordering LBP to pay
Listana P10,956,963.25. The PARAD issued a warrant of arrest against Lorayes.
LBP filed with the RTC a petition for injunction with application for the issuance of
a writ of preliminary injunction enjoining PARAD from implementing the warrant of
arrest against Lorayes. The RTC enjoined the PARAD from implementing the
warrant of arrest pending final determination of the amount of just compensation
for the property.
Listana filed with the Court of Appeals a petition for certiorari . The Court of
Appeals set aside Orders of the RTC.
LBP filed with the Court a petition for review on certiorari under Rule 45 of the
Rules of Court. In Land Bank of the Philippines v. Listana, Sr., the Court set aside the
Decision of the Court of Appeals and reinstated the Orders of the RTC enjoining the
PARAD from implementing the warrant of arrest pending final determination of the
amount of just compensation for the property.
The Court declared void all proceedings that stemmed from Listanas motion for
contempt.
LBP filed with the RTC a motion to withdraw the P5,644,773.02 cash bond.
The RTCs Ruling
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The RTC denied LBPs motion to withdraw the P5,644,773.02 cash bond.
LBP filed with the Court of Appeals a petition for certiorari .
The Court of Appeals Ruling
The Court of Appeals dismissed LBPs petition and affirmed in toto the RTC's Orders.
Issue
LBP raises as issue that the Court of Appeals erred in not allowing the withdrawal
of the P5,644,773.02 cash bond.
The Courts Ruling
The petition is unmeritorious.
The Order of the RTC clearly states that the respondent Provincial Adjudicator of
the DARAB x x x is enjoined x x x from enforcing its order of arrest against Mr. Alex
A. Lorayes pending the final termination of the case before RTC upon the posting
of a cash bond by Land Bank. Thus, LBP cannot withdraw the bond pending final
determination of the amount of just compensation for the property.
The DARAB set the amount of just compensation for the property at
P10,956,963.25 and ordered LBP to pay Listana the amount. On 18 June 1999, the
PARAD issued a writ of execution ordering Lorayes to pay Listana the amount.
Lorayes refused and, later, LBP filed with the RTC a petition for injunction with
application for the issuance of a writ of preliminary injunction.
An applicant for preliminary injunction is required to file a bond executed to the
party or person enjoined, to the effect that the applicant will pay to such party or
person all damages which he may sustain by reason of the injunction. Section 4(b),
Rule 58 of the Rules of Court states:
SEC. 4. Verified application and bond for preliminary injunction or temporary
restraining order. A preliminary injunction or temporary restraining order may be
granted only when:
xxxx
(b) Unless exempted by the court, the applicant files with the court where the
action or proceeding is pending, a bond executed to the party or person enjoined,
in an amount to be fixed by the court, to the effect that the applicant will pay to
such party or person all damages which he may sustain by reason of the injunction
or temporary restraining order if the court should finally decide that the applicant
was not entitled thereto. Upon approval of the requisite bond, a writ of
preliminary injunction shall be issued.
As correctly ruled by the lower courts, the P5,644,773.02 bond shall answer for the
damages Listana may sustain if the courts finally uphold the P10,956,963.25 just
compensation set by the DARAB. In Republic v. Caguioa,16 the Court held that, The
purpose of the injunction bond is to protect the defendant against loss or damage
by reason of the injunction in case the court finally decides that the plaintiff was
not entitled to it, and the bond is usually conditioned accordingly.
In any event, the Court has reinstated the Order of the RTC enjoining the PARAD
from implementing the warrant of arrest pending final determination of the
amount of just compensation for the property. Consequently, LBP cannot withdraw
the P5,644,773.02 cash bond which is a condition for the issuance of the writ of
preliminary injunction.
WHEREFORE, the Court DENIES the petition.
20. G.R. No. 190134, July 08, 2015
SPOUSES ROGELIO AND SHIRLEY T. LIM, AGUSAN INSTITUTE OF TECHNOLOGY vs.
HONORABLE COURT OF APPEALS AND FIRST CONSOLIDATED BANK
PERALTA, J.
Facts: Petitioner obtained several loans from respondent First Consolidated Bank
(private respondent bank) and executed several real estate mortgages and chattel
mortgage as security. Petitioners were unable to pay some of the loans, hence
private respondent bank filed for an application for foreclosure of the mortgages.
Petitioners filed an action for revocation and annulment of real estate mortgage
and chattel mortgage with plea for the issuance of a temporary restraining order
and preliminary injunction with the RTC. They alleged that Agusan Institute of
Technology had already fully paid its obligation with private respondent Bank if the
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
latter did not charge exorbitant and excessive interests and penalties and that the
total payments they tendered constituted overpayments to the loan.
RTC: Issued the writ ordering private respondent Bank to desist from foreclosing
the said contracts of mortgage. After trial on the merits, RTC lifted the writ of
preliminary injunction and ruled in favor of private respondent Bank.
CA: Denied petitioners' appeal with prayer for the issuance "of a TRO and/or Writ
of Preliminary Injunction.
Issues: Whether or not the CA should grant the writ of preliminary injunction.
Ruling: No. Section 5, Rule 58 of the Rules of Court provides that a TRO may be
issued only if it appears from the facts shown by affidavits or by verified application
that great or irreparable injury would be inflicted on the applicant be-fore the writ
of preliminary injunction could be heard.
To be entitled to an injunctive writ, the applicant must show that there exists a
right to be protected which is directly threatened by an act sought to be enjoined.
Furthermore, there must be a showing that the invasion of the right is material and
substantial, and that there is an urgent and paramount necessity for the writ to
prevent serious damage.
Australian Professional Realty, Inc. v. Municipality of Padre Garcia: A writ of
preliminary injunction and a TRO are injunctive reliefs and preservative remedies
for the protection of substantive rights and interests. Essential to granting the
injunctive relief is the existence of an urgent necessity for the writ in order to
prevent serious damage. A TRO issues only if the matter is of such extreme urgency
that grave injustice and irreparable injury would arise unless it is issued
immediately.
Pahila-Garrido v. Tortogo: Injunctive relief is resorted to only when there is a
pressing necessity to avoid injurious consequences that cannot be redressed under
any standard of compensation. The controlling reason for the existence of the
judicial power to issue the writ of injuction is that the court may thereby prevent a
threatened or continuous injury to some of the parties before their claims can be
thoroughly investigated and advisedly adjudicated. A writ of preliminary injunction
is an extraordinary event and is the strong arm of equity, or a transcendent
remedy. It is granted only to protect actual and existing substantial rights.
In the present Case, CA did not commit grave abuse of discretion in denying
petitioners' application for preliminary injunction and TRO. As aptly held by the CA,
it neither appears from the facts shown by the TRO application that' great or
irreparable injury would result to petitioners before the matter can be heard, nor
did they show any clear and positive right to be entitled to the protection of the
ancillary relief of TRO as they only claim that their debts would have been paid had
respondent bank not impose astronomical interests on its loans.
21. G.R. No. 162716 September 27, 2006
Honorable Secretary EMILIA T. BONCODIN vs. NATIONAL POWER CORPORATION
EMPLOYEES CONSOLIDATED UNION (NECU)
PANGANIBAN, CJ:
Facts:
-Board Resolution No. 99-35 granted a step increment to all qualified NAPOCOR
officials and employees who have been in their position for 10 years.
- Board Resolution No. 2001-113 reduced the 10 year requirement to 3 years.
- Circular No. 2001-51 provided for the IRR of Board Resolution No. 2001-113.
- Circular No. 2002-22 provided for additional guidelines relative to the
implementation of the step increment based on length of service in the position to
qualified NAPOCOR officials and employees.
Petitioner held that NAPOCOR has already been granting seniority pay based on
the length of service as embodied in the Collective Negotiation Agreement (CNA).
Consequently, the processing of the succeeding step increment based on length of
service was suspended.
Believing that NPC Circular Nos. 2001-51 and 2002-22 are legal that they have
already acquired a vested right in it, respondent National Power Corporation
Employees Consolidated Union (NECU) filed a Petition for Prohibition with
Application for TRO/Preliminary Injunction before the RTC.
33 of 50
RTC: Issued the writ of preliminary injunction. At that stage of the proceedings, it
was not shown that Circular No. 2001-51 and Board Resolution No. 2001-113, are
in contravention of any law. A roll back of the salaries of all the NAPOCOR
employees, while the merits of the case is yet to be heard, would result to a grave
and irreparable damage to them. T
CA: Agreed with lower court. The grim prospect of uncertainty facing the
[respondents] owing to their inevitable separation from the service further
compels this Court to act decisively and with dispatch while the main case is being
heard.
Issues:
1) WON the preliminary injunction is proper.
2) WON Rule 58 of the 1997 Rules of Civil Procedure authorized the issuance of a
writ of preliminary injunction even if the relief/protection applied for is the subject
of controversy in the main action.
Ruling: The Petition is partly meritorious.
1) No. Section 3, Rule 58 of the Revised Rules of Court, provides thus:
Sec. 3. Grounds for issuance of preliminary injunction. - A preliminary injunction
may be granted when it is established:
(a) That the applicant is entitled to the relief demanded, and the whole or part of
such relief consists in restraining the commission or continuance of the act or acts
complained of, or in requiring the performance of an act or acts, either for a
limited period or perpetually;
(b) That the commission, continuance or non-performance of the act or acts
complained of during the litigation would probably work injustice to the applicant;
or
(c) That a party, court, agency or a person is doing, threatening, or is attempting to
do, or is procuring or suffering to be done, some act or acts probably in violation of
the rights of the applicant respecting the subject of the action or proceeding, and
tending to render the judgment ineffectual.
To be entitled to a writ of injunction, a party must establish the following
requisites: (a) the right of the complainant is clear and unmistakable; (b) the
invasion of the right sought to be protected is material and substantial; and (c)
there is an urgent and paramount necessity for the writ to prevent serious
damage.
A clear legal right means one clearly founded in or granted by law or is enforceable
as a matter of law. Injunction is not designed to protect contingent, abstract or
future rights whose existence is doubtful or disputed. It cannot be grounded on the
possibility of irreparable damage without proof of an actual existing right.
In this case, the right claimed by respondent is far from clear. The enforcement of
the suspension order (w/c would result to rollback of salaries) would be prejudicial
to respondent members interest, but merely showing this fact is not sufficient. It
must also be established that the party applying for the writ has a clear legal right
that must be protected. Thus, a finding that the applicant for preliminary
injunction may suffer damage not capable of pecuniary estimation does not suffice
to support an injunction, when it appears that the right to be protected is unclear
or is seriously disputed.
2) No. The only ground relied upon for injunctive relief is the alleged nullity of
petitioners Memorandum and Auditor Cabibihans suspension order.
By issuing a writ premised on that sole justification, the trial court in effect
sustained respondents claim that petitioner and the Auditor had exceeded their
authority in ordering the suspension of the implementation of the step
increments; and that the suspension was patently invalid or, or of doubtful validity.
Thus, the lower court prejudged the main case and reversed the rule on the
burden of proof, because it assumed to be true the very proposition that
respondent-complainant in the RTC was duty-bound to prove in the first place.
A court may issue a writ or preliminary injunction only when the respondent has
made out a case of invalidity or irregularity. That case must be strong enough to
overcome, in the mind of the judge, the presumption of validity; and it must show
a clear legal right to the remedy sought.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
22. G.R. No. 159124. January 17, 2005
MARCELA GONZALES ALMEIDA, petitioner, vs. COURT OF APPEALS and ROBERT P.
SY, respondents.
CALLEJO, SR., J.:
Facts: Marcelina Sarangaya was the registered owner of a parcel of land which
respondent Robert P. Sy purchased with TCT issued in his name. Later, respondent
constructed a factory for kitchenware on the property. A little over than five years
later, petitioner Marcela Gonzales Almeida filed a complaint against the
respondent and forty (40) others for quieting of title and the declaration, as void
ab initio, of the assignment of sale certificates and damages, with a prayer for
temporary restraining order and writ of preliminary injunction.
Petitioner alleged that she was the only child and after the death of her parents,
she occupied the said property through her overseers, openly and in the concept
of owner being the sole heir thereof. However, she was not able to secure a torrens
title over the property. The petitioner further alleged the Deed of Assignment had
been falsified by defendants. And that the deed of assignment of a parcel of land
sold to Marcelina Sarangaya were null and void.
Trial Court: Issued the writ of preliminary prohibitory injunction. Upon
respondents refusal to comply with the writ, issued writ of preliminary mandatory
injunction.
CA: Granted the petition.
Issues: WON the issuance of the writ is proper.
Ruling: Section 3, Rule 58 of the Rules of Court provides that a preliminary
injunction may be granted when the following are established:
(a) That the Applicant is entitled to the relief demanded, and the whole or part of
such relief consists in restraining the commission or continuance of the act or acts
complained of, or in requiring the performance of an act or acts, either for a
limited period or perpetually;
(b) That the commission, continuance or non-performance of the act or acts
complained of during the litigation would probably work injustice to the applicant;
or
(c) That the party, court, agency or a person is doing, threatening, or is attempting
to do, or is procuring or suffering to be done, some act or acts probably in violation
of the rights of the applicant respecting the subject of the action or proceeding,
and tending to render the judgment ineffectual.
An injunctive writ may be issued when the following requisites are established:
1. The invasion of the right is material and substantial;
2. The right of complainant is clear and unmistakable;
3. There is an urgent and permanent necessity for the writ to prevent serious
damage.
The petitioner failed to adduce testimonial and/or documentary evidence to
establish her right to the injunctive writs. Injunction is not designed to protect
contingent or future rights. A clear and positive right especially calling for judicial
protection must be established. Injunction is not a remedy to protect or enforce
contingent, abstract, or future rights.
The test for issuing an injunction is whether the facts show a necessity for the
intervention of equity in order to protect rights cognizable in equity. Private
respondent failed to show that she has a clear legal right over the subject property.
She has not presented any valid title nor has she ever been in effective control and
possession of the property. Private respondent also failed to present specific acts
of ownership.
Finally, private respondent also did not show the existence of extreme urgency
necessitating the issuance of the assailed writ to prevent serious damage to her.
She possesses no clear title to the property nor is she in effective control and
possession of the same, such that, there is no urgent and paramount necessity for
the writ to issue for the purpose of preventing serious damage to the private
respondent. On the contrary, it is the petitioner who stands to suffer great damage
34 of 50
and injury, as he stands to lose in the meantime, his factory situated on the subject
property, if and when the writ issued by the respondent judge is implemented.
In holding that the co-defendants have no right whatsoever over the property in
litigation, on the basis only of the allegations, respondent judge had already
arrived at a conclusive finding of ownership of the subject property, which finding
of ownership in favor of the private respondent is still improper at that stage of the
proceeding.
As a rule, a writ of preliminary mandatory injunction is not granted to take
property out of the possession or control of one party to be placed into that of
another whose title has not been clearly established by law.
23. RULE 58: PRELIMINARY INJUNCTION
G.R. No. L-11130 October 8, 1917
BENITOGOLDING, plaintiff-appellee,
vs.
HIPOLITO BALATBAT, SERAPIA BALATBAR and ESTEFANIA BALATBAT, defendants.
HIPOLITO BALATBAT, appellant.
MarcelinoLontok for appellant.
No appearance for appellee.
FACTS:
Golding (petitioner) alleged that he was the owner of a piece or parcel of land and
that Balatbat (the defendants) were illegally and maliciously interfering with the
petitioners possession of said land. The petitioner prayed for both a preliminary
and permanent injunction. The preliminary injunction was issued. Each of the
defendants was served with the copy of the complaint and the issued preliminary
injunction.
None of the defendants answered the petition within the time fixed by law, thus
the petitioner presented a motion for a judgment by default, which was granted.
The case was set down for hearing and judgment was rendered enjoining the
defendants their agents and representatives to desist in their acts of whatever
character which molested or tended to molest the plaintiff in the peaceful
enjoyment of the possession of his property.
Later, plaintiff presented an affidavit alleging that the defendant had maliciously
and illegally and by means of violence committed acts in violation of the terms of
said injunction. Balatbat confessed that he was guilty of violation of said injunction
but attempted to excuse his acts upon the theory that he was the owner of the
parcel of land. He was found guilty and was imposed a fine.
On appeal, he alleged the following:
1) that he had not been duly notified of the injunction
2) that inasmuch as the lower court had issued the injunction, it is not just for it to
consider the questions presented for a violation of the same
3) that there was no proof showing that the defendant had violated the terms of
said injunction
ISSUE:
Whether or not the issuance of injunction against the defendant was proper
HELD: YES.
In reply:
1) record shows that he had such notice
2) The judge who grants an injunction may punish those who violate its mandates.
3) It is sufficient to say that he himself admitted that he had violated the terms of
said injunction and attempted to excuse by claiming to be the owner of such
property
The court finds nothing in the record which would justify the reversal of the
decision of the lower court. However, it reduced the amount of fine from P50 to
P5.
Moreover, the court deemed it proper to make the following observations:
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
1) Injunction should not be granted to take property out of the possession and
control of one party and to place it in the hands of another whose title has not
been clearly established by law.
2) It should not be issued except upon condition that no other ordinary, speedy
and adequate remedy is available to avoid or repair the damage done, or which
may be done by a new violation of the plaintiffs rights.
3) That an injunction, while it resemble the interdictal actions of the Spanish law, is
wholly distinct therefrom
* accion interdictal, which is the summary action for forcible entry
(detentacion) where the defendant's possession of the property is
illegal abinitio, or the summary action for unlawful detainer (desahuico)
where the defendant's possession was originally lawful but ceased to be so
by the expiration of his right to possess Javier v. Veridiano G.R. No. L-
48050 October 10, 1994 (NOT CITED IN THIS CASE)
4) The very foundation of the jurisdiction to issue the writ rests in the probability
of irreparable injury, the inadequacy of pecuniary compensation, and the
prevention of the multiplicity of suits, and where facts are not shown to bring the
case within these conditions, the relief of injunction should be refused
5) Injunctions to prevent trespass and the illegal interference with the possession
of land should not be granted, when the plaintiff's title is in dispute and has not
been established at law, until the question of title is settled in a proper proceeding
brought for that purpose.
6) There are cases, however, where an injunction may be granted in order to
preserve the statu quo of property until the title can be determined in a proper
action. But even then it should not be granted ex parte. The defendant should be
given an opportunity to be heard.
7) The remedy by injunction is never the proper remedy to deprive a person of the
possession of property. If the person in possession is in possession illegally there
exist other adequate, speedy and summary remedies forcible entry and detainer
and ejectment.
In the present action had the defendants appeared when they were cited so to do
and alleged and showed that they were in possession of the land in question as
owners thereof, the action would have resolved itself into one of ejectment, and a
motion properly presented and properly supported to dissolve the temporary
injunction would have been denied. Of course, upon the theory of the plaintiff, as
presented in the record, that he was the owner of the land in question and in
possession thereof and that fact not having been denied and that the
defendants were mere trespassers thereon and were illegally and maliciously
interfering and molesting the plaintiff in his quiet and peaceable enjoyment of the
possession of his property, then injunction was the proper remedy for the purpose
of preventing a repetition of said illegal acts.
The remedy by injunction is the proper remedy to prevent repeated trespass upon
real property. But the trespass which will be enjoined must be of such a nature
that an action for damages will not adequately compensate the loss occasioned
thereby.
24. RULE 58: PRELIMINARY INJUNCTION
G.R. No. L-10572 December 21, 1915
FRANCIS A. CHURCHILL and STEWART TAIT, plaintiffs-appellees,
vs.
JAMES J. RAFFERTY, Collector of Internal Revenue, defendant-appellant.
Attorney-General Avancea for appellant.
Aitken and DeSelms for appellees.
FACTS:
Judgment appealed from in this case perpetually restrains and prohibits the CIR
(defendant) and his deputies from collecting and enforcing against the plaintiffs
and their property the annual tax. It also enjoins the defendant from destroying or
removing any sign, signboard, billboard, the property of the plaintiffs, for the
reason that such billboard is, or may be offensive to the sight. It decrees the
cancellation of the bond given by the plaintiffs to secure the issuance of the
preliminary injunction granted as soon after the commencement of this action.
35 of 50
ISSUE: Whether or not the issuance of the preliminary injunction against the
defendant is proper On the eve of the planned strike, PPA, aided by a team of SWAT members began

forcibly occupying several ports in the North Harbor. By around 1:00 a.m. on 16
HELD: No.
April 2000, PPA had taken over operations at Piers 6, 8, 12, 14, Terminal 16 and
Preventive remedies of the courts are extraordinary and are not the usual
remedies. The origin and history of the writ of injunction show that it has always Marine Slipway, and later that morning, Isla Puting Bato.
been regarded as an extraordinary, preventive remedy, as distinguished from the
common course of the law to redress evils after they have been consummated. No PASSI filed a complaint for Injunction with Damages with prayer for temporary
injunction issues as of course, but is granted only upon the oath of a party and restraining order (TRO) and writ of preliminary injunction. For its part, PASSI had
when there is no adequate remedy at law.
The mere fact that a tax is illegal, or that the law, by virtue of which it is imposed, is been rendering arrastre and stevedoring services at Pier 8 since 1974. Its latest
unconstitutional, does not authorize a court of equity to restrain its collection by contract expired on 14 April 1997,6 three years before PPA took over Pier 8. PASSI
injunction. There must be a further showing that there are special circumstances
which bring the case under some well recognized head of equity jurisprudence, filed a request for the renewal of its contract which was never formally acted upon
such as that irreparable injury, multiplicity of suits, or a cloud upon title to real
estate will result, and also that there is, as we have indicated, no adequate remedy by PPA. Thus, PASSI was operating at Pier 8 in a holdover capacity up until PPAs
at law. takeover.
Section 84 of Act No. 82 provides that "No court shall entertain any suit assailing
the validity of a tax assessed under this act until the taxpayer shall have paid, RTC in its subsequent Decision applied PD 1818, which provides that "[n]o court
under protest, the taxes assessed against him, . . . ." This inhibition was inserted in
shall have jurisdiction to issue any restraining order, preliminary injunction, or
section 17 of Act No. 83 and applies to taxes imposed by provincial boards. The
inhibition was not inserted in the Manila Charter until the passage of Act No. 1793, preliminary mandatory injunction in any case, dispute, or controversy involving
effective October 12, 1907. Act No. 355 expressly makes the payment of the
exactions claimed a condition precedent to a resort to the courts by dissatisfied any public utility operated by the government, including among others public
importers. Section 52 of Act No. 1189 provides "That no courts shall have authority
utilities for the transport of the goods or commodities, stevedoring
to grant an injunction restraining the collection of any taxes imposed by virtue of
the provisions of this Act, but the remedy of the taxpayer who claims that he is and arrastre contracts."
unjustly assessed or taxed shall be by payment under protest of the sum claimed
from him by the Collector of Internal Revenue and by action to recover back the ISSUE OF THE CASE: Whether or not PASSI is entitiled to injunction relief?
sum claimed to have been illegally collected." RULING OF THE COURT.
NB:
[Injunctions, as here defined, are of two kinds; preliminary and final. The former The writ of preliminary injunction issued by the Court of Appeals is DISSOLVED.
may be granted at any time after the commencement of the action and before final As a rule, an application for preliminary injunction entails a determination of
judgment, and the latter at the termination of the trial as the relief or part of the
relief prayed for. Any judge of the Supreme Court may grant a preliminary whether the requisites provided in Rule 58 of the Revised Rules on Civil Procedure
injunction in any action pending in that court or in any Court of First Instance. A
preliminary injunction may also be granted by a judge of the Court of First Instance for the issuance of the provisional remedy are extant. In the instant case, however,
in actions pending in his district in which he has original jurisdiction. But such the impact of P.D. No. 1818the law which proscribes court injunctions on
injunctions may be granted only when the complaint shows facts entitling the
plaintiff to the relief demanded, and before a final or permanent injunction can be government projectsmust also be taken into account as said law specifically
granted, it must appear upon the trial of the action that the plaintiff is entitled to
excludes arrastre and stevedoring contracts along with other activities from the
have commission or continuance of the acts complained of perpetually restrained).
These provisions authorize the institution in Courts of First Instance of what are sphere of the injunctive power of the courts.23 Consequently, both issues are
known as "injunction suits," the sole object of which is to obtain the issuance of a
final injunction. They also authorize the granting of injunctions as aiders in ordinary determinants of the sustainability of the Court of Appeals decision and the
civil actions. We have defined in Davesa vs. Arbes (13 Phil. Rep., 273), an injunction
parameters of its jurisdiction in the original action on certiorari.
to be "A "special remedy" adopted in that code (Act 190) from American practice,
and originally borrowed from English legal procedure, which was there issued by The requisites to justify an injunctive relief are: (a) the existence of a right
the authority and under the seal of a court of equity, and limited, as in other cases
where equitable relief is sought, to those cases where there is no "plain, adequate, in esse or the existence of a right to be protected; and (b) the act against which
and complete remedy at law,"which will not be granted while the rights between
injunction is to be directed as a violation of such right.24 A preliminary injunction
the parties are undetermined, except in extraordinary cases where material and
irreparable injury will be done,"which cannotbe compensated in damages.] is proper only when the plaintiff appears to be entitled to the relief demanded in

his complaint.25
25. RULE 58: PRELIMINARY INJUNCTION
PASSI admits that its contract has expired and that it is merely occupying and

PPA V. PIER 8 ARRASTRE & STEVE-DORING SERVICES, INC., G.R. No. 147861 operating at Pier 8 in a holdover capacity.26 Thus, PASSIs rights over Pier 8 arise

November 18, 2005 not from contractual relations with the PPA, or a statutory grant of authority, but

Tinga, J.: merely by the tolerance of the PPA. Tolerance is not the surest footing on which a

FACTS OF THE CASE: right in esse can be established.

These circumstances prompted PPA, under the directive of the then President
BACOLOD CITY WATER DISTRICT, petitioner, vs. THE HON. EMMA C. LABAYEN,
Joseph E. Estrada requiring the North Harbor to be run by a single entity, to issue Presiding Judge, RTC of Bacolod City, Br. 46 and the City of Bacolod, respondents.
on 14 April 2000 Memorandum Order No. 07-2000 creating the PPA North Harbor
PUNO, J.
Services ("PPA-NHPS") to take over cargo handling operations and obviate an
[G.R. No. 157494. December 10, 2004.]
interruption of port operations.
FACTS

Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58) 36 of 50

 Petitioner Bacolod City Water District (BACIWA) is a water district established
pursuant to Presidential Decree No. 198 as a government-owned and
controlled corporation with original charter. It is in the business of providing
safe and potable water to Bacolod City.
Public respondent City of Bacolod is a municipal corporation created by
Commonwealth Act No. 326, otherwise known as the Charter of Bacolod.
On March 26, 1999, respondent City filed a case for Injunction with a Prayer
for Temporary Restraining Order And/Or Preliminary Mandatory Injunction
against petitioner. The petition stated that on January 15, 1999, BACIWA
published a Schedule of Automatic Water Rates Adjustments for the years
1999, 2000 and 2001. The rates were supposed to take effect seven (7) days
after its posting in the local papers or on January 22, 1999. The increase was
aborted after petitioner unilaterally suspended the January 22, 1999
scheduled implementation.
March 15, 1999, however, petitioner announced that the rate hike will be
implemented on April 1, 1999.
Respondent City opposed, it alleged that the proposed water rates would
violate due process as they were to be imposed without the public hearing
required under Letter of Instructions No. 700 and Presidential Decree No.
1479. Hence, it prayed that before the hearing of the main case, a temporary
restraining order or a preliminary injunction be issued.
Petitioner filed its Position Paper dated April 15, 1999. It attached documents
evidencing the conduct of extensive and lengthy public hearings in fifty-eight
(58) of the sixty-one (61) barangays of Bacolod City. It opined that original
jurisdiction over cases on rate review is vested in the Local Water Utilities
Administration (LWUA);
On June 17, 1999, respondent City filed a Motion to Set [for] Hearing its
application for a temporary restraining order or preliminary mandatory
injunction. It alleged that the parties had already submitted their respective
memoranda. It also alleged that petitioner had already effected the water
rates increase and collection, hence, causing irreparable injury to the public.
On July 22, 1999, respondent trial court issued an Order stating that there was
no more need to hear the case on the merits as both parties have already
submitted their position papers and documents to prove their respective
allegations.
After a hiatus of nearly seven (7) months, or on February 18, 2000,
respondent City filed an Urgent Motion for the Issuance of Temporary
Restraining Order And[/]Or Writ of Preliminary Injunction praying that the
case be set for hearing on February 24, 2000. On the same date requested,
respondent court heard respondent's application for temporary restraining
order and issued an Order commanding petitioner to stop, desist and refrain
from implementing the proposed water rates for the year 2000 which were
then supposed to take effect on March 1, 2000.
On March 7, 2000, petitioner filed an Urgent Motion for Reconsideration and
Dissolution of the Temporary Restraining Order. Respondent court a quo
issued on March 10, 2000 an Order 19 directing respondent City to file an
Opposition to the Urgent Motion. In its Opposition, respondent City
contended that the temporary restraining order issued was not infirmed with
procedural and substantive defects.
Respondent court continued with the proceedings by receiving the evidence of
petitioner in support of its Motion for Reconsideration and Dissolution of
Temporary Restraining Order. It further issued Orders dated March 17, 2000 21
and March 20, 2000.
On April 6, 2000, respondent court issued an Order finding petitioner's Urgent
Motion for Reconsideration and Dissolution of Temporary Restraining Order
moot and academic considering petitioner's compliance of said temporary
restraining order.
On December 21, 2000, respondent court issued the assailed Decision
granting the final injunction which allegedly confirmed the previous
preliminary injunction.
Petitioner filed its Motion for Reconsideration of the assailed Decision on
January 11, 2001 asserting, among others, that the case was not yet ripe for
decision when the court granted the final injunction, the petitioner having had
no opportunity to file its answer, avail of the mandatory pre-trial conference
and have the case tried on the merits.
Respondent court denied the Motion for Reconsideration for lack of merit in
an Order dated January 24, 2001. Petitioner then filed a special civil action for
certiorari under Rule 65 in the Court of Appeals. It alleged that public
respondent judge acted without or in excess of jurisdiction and/or with grave
and patent abuse of discretion amounting to lack or excess of jurisdiction
when she issued the final injunction in disregard of petitioner's basic right to
due process.
The Court of Appeals dismissed the petition for review on certiorari,
ratiocinating thus:
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
In the case at bar, the [O]rder of public respondent dated 24 February 2000,
though termed by BACIWA as a temporary restraining order, is in fact a preliminary
injunction. The period of the restraint was not limited. By its wordings, it can be
safely inferred that the increased water rates must not be effected until final
disposition of the main case. This note of semi-permanence simply cannot issue
from a mere temporary restraining order. It must be further noted that the
temporary restraining order has been elevated to the same level as the preliminary
injunction in the procedure, grounds and requirements of its obtention by
S[ection] 4, Rule 58. Thus, to set [a] distinction, the present practice is to
categorically refer to it as a temporary restraining order. In which case, the
omission by the public respondent in referring to the 24 February 2000 order as a
temporary restraining order could not have been a mere oversight but deliberate.
Resorting to this Court, petitioner raises the following issues:
ISSUE: WON the order issued is a TRO or a PI? TRO
HELD: The sequence of events and the proceedings that transpired in the trial
court make a clear conclusion that the Order issued was a temporary restraining
order and not a preliminary injunction.
Again, it was only when petitioner expressed its vehement objection on the
ruling that the final injunction confirmed the preliminary injunction previously
issued, when the respondent City and the respondent trial court started to insist
that the questioned Order was a preliminary injunction. Given the previous
undeviating references to it as a temporary restraining order, respondents cannot
now consider it as a preliminary injunction to justify the validity of the assailed
Decision. The attendant facts and circumstances clearly show that the respondent
trial court issued a temporary restraining order.
Injunction is a judicial writ, process or proceeding whereby a party is ordered to do
or refrain from doing a certain act. It may be the main action or merely a
provisional remedy for and as an incident in the main action
A.M. No. 06-6-8-CA March 20, 2007
RE: COMPLAINT AGAINST JUSTICE ELVI JOHN S. ASUNCION OF THE COURT OF
APPEALS
x----------------------------x
A.M. No. 06-44-CA-J March 20, 2007
ATTY. ROBERTO C. PADILLA, Complainant, vs.ASSOCIATE JUSTICE ELVI JOHN S.
ASUNCION, COURT OF APPEALS, Respondent.
PER CURIAM:
PUNO, C.J., et al
A.M. No. 06-44-CA-J
These are 2 administrative cases against Justice Elvi John S. Asuncion of the Court
of Appeals.
The second case is based on a verified complaint filed by Atty. Roberto C. Padilla,
charging Justice Elvi John S. Asuncion with "culpable dereliction of duty, malicious
delay in the administration of justice and gross ignorance of the law", in
connection with CA-G.R. SP No. 60573, entitled "Philippine National Bank vs. NLRC
and ErlindaArchinas".
The gist of the above mentioned case is the following:
On May 28, 2001, with respondent Justice as ponente, the First Division
of the Court of Appeals dismissed the PNB petition for certiorari with prayer for the
issuance of a writ of preliminary injunction, affirming in its entirety the decision of
the National Labor Relations Commission. On June 13, 2001, PNB filed a motion for
reconsideration. On June 25, 2001, Archinas (private respondent in the petition for
certiorari) filed her opposition to PNBs motion for reconsideration. On July 24,
2001, acting upon PNBs urgent motion for issuance of a TRO, respondent issued
the resolution enjoining the public respondent from implementing the Writ of
Execution. On October 30, 2001, the resolution ordering the maintenance of the
status quo was issued. On November 5, 2001, Archinas filed her motion seeking
37 of 50
reconsideration of the October 30, 2001 resolution. Archinas filed four (4) urgent
motions for early resolution of the pending motion/s for reconsideration, on
December 28, 2001, June 13, 2002, September 24, 2002, and August 23, 2005,
Meantime, on July 5, 2004, respondent Justice Asuncion was assigned to CA Cebu
Station. With this transfer, respondents caseload was assigned to Justice Zenarosa.
On November 3, 2004, respondent was reassigned back to Manila. It was only on
August 7, 2006 that respondent finally resolved the PNB motion for
reconsideration. The Investigating Justicein his Report also found out that: "His
interest in the case is manifest in that, despite his assignment in Cebu City on
July 7, 2004, he did not unload the case to Justice Zenarosa (Office Order No. 212-
04-CG). Worse, he recalled the case upon his return to the CA Manila station."
Findings of the Investigating Justice
"Complainant Padilla contends that respondent Justice Asuncion committed gross
ignorance of the law in issuing the October 30, 2001 resolution which extended
indefinitely the duration of the TRO issued on July 24, 2001, by ordering the
parties to maintain the status quo, pending resolution of the PNBs motion for
reconsideration, in violation of Rule 58, Section 5 of the Rules of Court. Atty.
Padilla further contends that respondents failure to speedily resolve PNBs motion
for reconsideration dated June 13, 2001, Archinas motion for reconsideration
dated November 5, 2001 and her numerous motions for early resolution thereof
constitute culpable dereliction of duty.
Atty. Padilla stressed that respondent Justices reliance on Eternal Gardens
Memorial Park Corporation v. Court of Appeals, decided in 1988, to justify the
issuance of the two resolutions constitutes gross ignorance of the law, considering
that the ruling thereon was set aside by the Supreme Court in 1993 in the case of
Santiago v. Vasquez. Further, he averred that the Eternal Gardens ruling was
superseded by Rule 65, Section 7 of the Rules of Court (1997 Rules of Civil
Procedure) which states that "the petition [in the Supreme Court or in the Court of
Appeals] shall not interrupt the course of the principal case unless a temporary
restraining order or a writ of preliminary injunction has been issued against the
public respondent from further proceeding in the case."
"Respondent Justice Asuncion stressed that the July 24, 2001 and October 30, 2001
resolutions were the collegial acts of the First Division of the Court of Appeals,
composed of three justices, unanimously approved by them after due deliberation,
and not the acts of respondent justice alone. He denied that the July 24, 2001
resolution was, in fact, a TRO and maintained that the purpose thereof was
merely to remind the parties to observe the status quo while PNBs motion for
reconsideration was pending resolution. He also claimed that complainant
Padilla mistook the October 30, 2001 resolution as extending the TRO, whereas
there was no indication in the July 24, 2001 resolution that a TRO was ever
granted. Respondent Justice stressed that the admonition to the parties to
maintain the status quo was merely directory in view of the pending motion in the
CA, following the principle of hierarchy of courts. Respondent justice cited Eternal
Gardens Memorial Park Corporation v. CA, Ibid., as basis for his action in issuing
the July 24, 2001 and October 30, 2001 resolutions, which directed the parties to
maintain the status quo pending resolution of PNBs motion for reconsideration.
"Technically, status quo is "defined as the last actual, peaceful and uncontested
status that precedes the actual controversy, that which is existing at the time of the
filing of the case"
However, the Supreme Court has ruled that a status quo ante order has "the
nature of a temporary restraining order".Thus, the decretal portion of the
resolution of July 24, 2001, specifically ordered that the public respondent is
temporarily enjoined from implementing the assailed writ of execution.
Respondent justice must be playing with words. When a judge or justice uses
technical or legal terms with a well-defined meaning, such as a temporary
restraining order or a status quo order, he must have intended those meaning; he
cannot impute a "directory" meaning to confuse the parties. x xxOn the other
hand, he ought to know that a temporary restraining order cannot exist
indefinitely; it has a lifetime of a non-extendible period of sixty days and
automatically expired on the sixtieth day.No judicial declaration that it has expired
is necessary, and, the lower courts, including the Court of Appeals, have no
discretion to extend the same. A second TRO by the Court of Appeals after the
expiration of the sixty day period is a patent nullity.
Issue: W/N respondents "deliberate act of extending indefinitely the temporary
restraining order or the status quo order constitutes his culpable gross ignorance
of the law."
THE COURTS RULING
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
We adopt the findings of the Investigating Justice.
The July 24, 2001 resolution, which "temporarily enjoined" the public respondent
from implementing the assailed writ of execution, was a temporary restraining
order, regardless of the nomenclature Justice Asuncion used to characterize it. As
such, its full life span can only be sixty (60) days. Section 5, par. 4, Rule 58 of the
Rules of Court is explicit: the Court of Appeals may issue a temporary restraining
order only for a limited period of sixty days which cannot be renewed or extended.
After sixty days, the restraining order immediately ceases, without need of any
judicial order terminating it.
(duration of TRO please refer to your book)
G.R. No. 173616 June 25, 2014
AIR TRANSPORTATION OFFICE (ATO), Petitioner,
vs.
HON. COURT OF APPEALS (NINETEENTH DIVISION) and BERNIE G.
MIAQUE, Respondents.
Ponente: LEONARDO-DE CASTRO, J.
Facts:
MTCC of Iloilo City: ATO filed a complaint for unlawful detainer against
Miaque. ATO prayed that (1) Miaque be ordered to permanently vacate
and peacefully return to the ATO possession of 800 sq. m. Refreshment
Parlor and the 310-square meter Restaurant/Gift Shop (2) Miaque be
ordered to pay the ATO the amount representing unpaid space rental
and concessionaire privilege fees.
MTCC decision: ruled in favor of ATO= vacate the aforesaid properties
and to pay unpaid rental and concessionaire privilege fees
RTC: affirmed MTCC decision
CA (CA-G.R. SP No. 79439): dismissed petition, affirmed RTC
SC: no reversible error in the Court of Appeals Decision
The proceedings on execution
As an incident of CA-G.R. SP No. 79439, the Court of Appeals issued on
February 27, 2004 a temporary restraining order (TRO) effective for a
period of 60 days and required Miaque to post a bond in the amount
ofP100,000.00. After the lapse of the TRO, the ATO filed an urgent
motion for the execution of the RTC Decision pursuant to Section 21,
Rule 70 of the Rules of Court=> RTC granted the ATOs motion and
issued Writ of execution dated August 16, 2004;
However, the CA issued a Resolution dated August 18, 2004 ordering
the issuance of a writ of preliminary injunction on the enforcement of
the Decisions of the MTCC and the RTC while CA-G.R. SP No. 79439 is
pending;
Thus, after the dismissal of Miaques petition for review in CA-G.R. SP
No. 79439, ATO filed another urgent motion for execution of the RTC
Decision;
RTC granted the ATOs urgent motion for execution and issued a Writ of
Execution dated June 2, 2005;
Miaque filed MR with prayer to set aside execution and prayed that CA
order RTC judge to desist from implementing the writ of execution;
CA granted prayer of Miaque (June 14, 2005): ordered sheriffs to desist
from executing MTCC and RTC;
However, on June 15, 2005, before the concerned sheriffs received a
copy of the Resolution dated June 14, 2005, the said sheriffs
38 of 50
 implemented the writ of execution and delivered the possession of the
following premises to the ATO;
However, Miaque subsequently regained possession of the said
premises on the strength of the Court of Appeals Resolution dated June
14, 2005;
In the end, Miaque still lost the case in CA as stated above. Thereafter,
ATO filed with the RTC a motion for the revival of the writs of execution
(dated August 16, 2004 and June 2, 2005).
Miaquess attempt to salvage his case: A new case in the Court of Appeals (CA-
G.R. CEB-SP No. 01603)
As stated above, Miaque appealed to SC but the latter only affirmed
CAs decision. Hence, on March 28, 2006, Miaque filed a petition for
certiorari (with prayer for issuance of TRO and/or writ of preliminary
injunction) in the Court of Appeals, docketed as CA-G.R. CEB-SP No.
01603, where he assailed the RTCs Order dated March 20, 2006. He
prayed, among others, that the implementation of the writs of
execution be enjoined.
Ruling of CA in CA-GR CEB-SP No. 01603:
- Issued writ of preliminary injunction
- Miaque has a right in esse to be protected and the acts against
which the injunction is sought to be directed are violative of said
right
- Miaque appears to have a clear legal right to hold on to the
premises leased by him from ATO at least until such time when he
shall have been duly ejected therefrom by a writ of execution of
judgment caused to be issued by the MTCC in Iloilo City, which is
the court of origin
- respondent judge or the RTC in Iloilo City has no jurisdiction to
order the issuance of such writ of execution because we gave due
course to the petition for review filed with us in CA-G.R. SP No.
79439 and, in fact, rendered a decision on the merit in said case,
thereby divesting the RTC in Iloilo City of jurisdiction.
Hence, this petition by ATO which prayed for the annulment of the
writ of preliminary injunction.
Arguments of Petitioner ATO:
1. CA ignored the governments right under the law to the
possession as well as to the payment of rental and
concession privilege fees;
2. TRO cannot restrain an accomplished fact, as the RTCs writ
of execution dated June 1, 2005 had already been partially
implemented;
3. CA G.R. SP No. 79439 and CA-G.R. CEB-SP No. 01603 are
exactly the same, Miaque has committed forum shopping;
Arguments of Miaque:
4. RTC had no jurisdiction to issue the writs of execution dated
August 16, 2004 and June 1, 2005 because the said court
already lost its jurisdiction when Miaque filed an appeal to
the Court of Appeals on September 25, 2003, which appeal
was given due course;
5. ATOs claim that the RTCs writ of execution had been
partially implemented is not true and that he is in possession
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
of the entire subject premises when CA issued the TRO and
writ of preliminary injunction being challenged in this case.
.
ISSUE: Whether or not the Court of Appeals committed grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing the Resolution dated May 30,
2006 which granted petitioners application for the issuance of a writ of
preliminary injunction in CA-G.R. CEB-SP No. 01603? YES
Ruling:
Section 21, Rule 70 of the Rules of Court provides the key to that question:
Sec. 21.Immediate execution on appeal to Court of Appeals or Supreme
Court. The judgment of the Regional Trial Court against the defendant
shall be immediately executory, without prejudice to a further appeal
that may be taken therefrom.
The totality of all the provision above shows the following significant
characteristics of the RTC judgment in an ejectment case appealed to it:
(1) The judgment of the RTC against the defendant-appellant is
immediately executory, without prejudice to a further appeal that may
be taken therefrom; and
(2) Such judgment of the RTC is not stayed by an appeal taken
therefrom, unless otherwise ordered by the RTC or, in the appellate
courts discretion, suspended or modified.
A writ of preliminary injunction is an extraordinary event which must be granted
only in the face of actual and existing substantial rights. The duty of the court
taking cognizance of a prayer for a writ of preliminary injunction is to determine
whether the requisites necessary for the grant of an injunction are present in the
case before it. In the absence of the same, and where facts are shown to be
wanting in bringing the matter within the conditions for its issuance, the ancillary
writ must be struck down for having been rendered in grave abuse of discretion.
In this case, the decisions of the MTCC in Civil Case No. 01 (38), of the RTC in Civil
Case No. 02-27292, and of the Court of Appeals in CAG.R. SP No. 79439
unanimously recognized the right of the ATO to possession of the property and the
corresponding obligation of Miaque to immediately vacate the subject premises.
This means that the MTCC, the RTC, and the Court of Appeals all ruled that Miaque
does not have any right to continue in possession of the said premises. It is
therefore puzzling how the Court of Appeals justified its issuance of the writ of
preliminary injunction with the sweeping statement that Miaque "appears to have
a clear legal right to hold on to the premises leased by him from ATO at least until
such time when he shall have been duly ejected therefrom by a writ of execution
of judgment caused to be issued by the MTCC in Iloilo City, which is the court of
origin of the decision promulgated by this Court in CA-G.R. SP No. 79439."
Unfortunately, in its Resolution dated May 30, 2006 granting a writ of preliminary
injunction in Miaques favor, the Court of Appeals did not state the source or basis
of Miaques "clear legal right to hold on to the [said] premises." This is fatal.
In Nisce v. Equitable PCI Bank, Inc., this Court stated that, in granting or dismissing
an application for a writ of preliminary injunction, the court must state in its order
the findings and conclusions based on the evidence and the law. This is to enable
the appellate court to determine whether the trial court committed grave abuse of
its discretion amounting to excess or lack of jurisdiction in resolving, one way or
the other, the plea for injunctive relief. In the absence of proof of a legal right and
the injury sustained by one who seeks an injunctive writ, an order for the issuance
of a writ of preliminary injunction will be nullified. Thus, where the right of one
who seeks an injunctive writ is doubtful or disputed, a preliminary injunction is
not proper. The possibility of irreparable damage without proof of an actual
existing right is not a ground for a preliminary injunction.
G.R. No. 207412 August 7, 2013
FLORD NICSON CALAWAG, PETITIONER,
vs.
39 of 50
UNIVERSITY OF THE PHILIPPINES VISAYAS AND DEAN CARLOS C. BAYLON,
RESPONDENTS.
x-----------------------x
G.R. No. 207542
MICAH P. ESPIA, JOSE MARIE F. NASALGA AND CHE CHE B. SALCEPUEDES,
PETITIONERS,
vs.
DR. CARLOS C. BA YLON, DR. MINDA J. FORMACI ON AND DR. EMERLINDA
ROMAN (TO BE SUBSTITUTED BY ALFREDO E. PASCUAL, BEING THE NEW UP
PRESIDENT), UNIVERSITY OF THE PHILIPPINES BOARD OF REGENTS,
RESPONDENTS.
FACTS:
The petitioners enrolled in the Master of Science in Fisheries Biology at UP Visayas
under a scholarship. They finished their first year of study with good grades, and
thus were eligible to start their thesis in the first semester of their second year. All
the requirements were satisfied. Thereafter, the petitioners sought the approval of
DeanBaylon for composition of their thesis committees. However, Dean Baylon
disapproved the composition of the petitioners thesis committees and their
tentative thesis topics on the ground that petitioners thesis titles connote a
historical and social dimension study which is not appropriate for the petitioners
chosen masters degrees. Dean Baylon then ordered the petitioners to submit a
two-page proposal containing an outline of their tentative thesis titles, and
informed them that he is forming an ad hoc committee that would take over the
role of the adviser and of the thesis committees.
The petitioners thus filed a petition for certiorari and mandamus before the RTC,
asking it to order Dean Baylon to approve and constitute the petitioners thesis
committees and approve their thesis titles. They also asked that the RTC issue a
writ of preliminary mandatory injunction against Dean Baylon, and order him to
perform such acts while the suit was pending.
RTC: Granted a writ of preliminary mandatory injunction, which Dean Baylon
allegedly refused to follow. UP Visayas eventually assailed this order before the CA
through a Rule 65 petition for certiorari, with prayer for a temporary restraining
order (TRO).
CA: It issued a TRO against the implementation of the RTCs order, holding that the
petitioners had no clear right to compel Dean Baylon to approve the composition
of their thesis committees as a matter of course. As the college dean, Dean Baylon
exercises supervisory authority in all academic matters affecting the college.
Hence, these petitions.
ISSUE:
Whether or not CA erred in setting aside the preliminary mandatory injunction
issued by the RTC.
HELD:
CA did not commit an error in judgment in setting aside the preliminary mandatory
injunction that the RTC issued against Dean Baylon.
"To be entitled to a writ of preliminary injunction, x xx the petitioners must
establish the following requisites: (a) the invasion of the right sought to be
protected is material and substantial; (b) the right of the complainant is clear and
unmistakable; and (c) there is an urgent and permanent necessity for the writ to
prevent serious damage. Since a preliminary mandatory injunction commands the
performance of an act, it does not preserve the status quo and is thus more
cautiously regarded than a mere prohibitive injunction. Accordingly, the issuance of
a writ of preliminary mandatory injunction [presents a fourth requirement: it] is
justified only in a clear case, free from doubt or dispute. When the complainants
right is thus doubtful or disputed, he does not have a clear legal right and,
therefore, the issuance of injunctive relief is improper."
The CA did not err in ruling that the petitioners failed to show a clear and
unmistakable right that needs the protection of a preliminary mandatory
injunction. We support the CAs conclusion that the dean has the discretion to
approve or disapprove the composition of a thesis committee, and, hence, the
petitioners had no right for an automatic approval and composition of their thesis
committees.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
By necessary implication, the deans power to approve includes the power to
disapprove the composition of a thesis committee. Thus, under the UP Systems
faculty manual, the dean has complete discretion in approving or disapproving the
composition of a thesis committee. Harmonizing this provision with the Graduate
Program Manual of UP Visayas, and the Guidelines for the Master of Science in
Fisheries Program, we agree with the CAs interpretation that the thesis
committees composition needs the approval of the dean after the students have
complied with the requisites provided in Article 51 of the Graduate Program
Manual and Section IX of the Guidelines for the Master of Science in Fisheries
Program.
Verily, the academic freedom accorded to institutions of higher learning gives them
the right to decide for themselves their aims and objectives and how best to attain
them.10 They are given the exclusive discretion to determine who can and cannot
study in them, as well as to whom they can confer the honor and distinction of
being their graduates.
WHEREFORE, the Court resolves to DENY giving due course to the petitions in G.R.
No. 207412 and G.R. No. 207542.
[ I.P.I. No. 16-241-CA-J, Nov 29, 2016 ]
CLEMENTE F. ATOC v. EDGARDO A. CAMELLO
FACTS:
William G. Guillani filed a complaint for grave abuse of authority, grave misconduct
and violation of Republic Act No. 6713 against Oscar S. Moreno (Moreno) and
Glenn C. Baez (Baez), in their capacity as City Mayor and Officer-in-charge
Treasurer, respectively, of the Local Government Unit of Cagayan de Oro City,
before the Office of the Ombudsman-Mindanao (OMB).
In its decision, the OMB found Moreno and Baez administratively guilty of grave
misconduct. Consequently, OMB furnished the Department of Interior and Local
Government (DILG) copy of the decision for implementation of the order of
dismissal against Moreno and Baez.
In order to stay the implementation of the OMB decision, Moreno and Baez filed
their respective Petitions for Certiorari with Extremely Urgent Prayer for Temporary
Restraining Order (TRO) and/or Writ of Preliminary Injunction (WPI). DILG then
served a copy of the decision on Moreno.
Incumbent Vice Mayor Caesar Ian Acenas and Councilor Candy Darimbang were
sworn in office and assumed the positions of City Mayor and Vice Mayor of
Cagayan de Oro City, respectively.
CA issued a resolution granting Moreno and Baez's prayer for issuance of a TRO.
The TRO which is effective for a period of 60 days, unless sooner revoked, enjoined
the DILG, its officers and agents and all persons acting under them, from enforcing,
implementing and effecting the OMB decision which dismissed Moreno and Baez
from the service.
On 17 November 2015, the DILG filed a Manifestation informing the CA that as of
6:12 in the evening of 12 November 2015, it has already implemented the OMB
decision dismissing Moreno and Baez from the service. The DILG averred that it
was only on 13 November 2015 at around 7:32 in the evening that it received a
copy of the CA resolution granting the TRO.
On the same date, the DILG filed a second pleading denominated as Manifestation
with Urgent Motion for Clarification. The motion seeks to clarify as to who should
be recognized as Mayor of Cagayan de Oro City considering that the department
received the' CA Resolution on the granting of the TRO a day after the OMB
decision was served and implemented against Moreno.
On 18 November 2015, the CA issued a resolution clarifying the validity and
enforceability of the TRO it earlier issued. The CA ratiocinated that:
In the instant case, the last actual, peaceable and uncontested
condition before the DILG the assailed Ombudsman Decision is
petitioner Oscar Moreno sitting as the elected Cagayan de Oro City
Mayor and Glenn Baez as the Officer-in-Charge of the City Treasurer's
Office. Therefore, that is the situation sought to be upheld by the TRO
pending the resolution of the injunction. The status existing at the time
the present petition was filed before this [c]ourt was that the mayor
and the officer-in-charge of the City Treasurer's office were herein
[Moreno and Baez]. That precisely is the status referred to in a TRO
40 of 50
 taking into account the litany of decisions defining how a TRO operates.
To construe otherwise would counter settled jurisprudence. In fact, the
DILG has correctly understood and captured the concept and essence of
a restraining order. x xx[10]
On 11 January 2016,[12] the CA, through Associate Justice Camello as ponente
with the concurrence of Associate Justices Badelles and Atal-Pao, issued a Writ of
Preliminary Injunction to be effective throughout the pendency of the action
unless elsewhere revoked or modified, enjoining and preventing the respondent
DILG, its officers, agents, and/or any person assisting it or acting for and in its
behalf, from enforcing and implementing the 14 August 2015 decision of the OMB.
Claiming that he was aggrieved by the resolutions issued by the CA in the subject
cases, complainant, filed a verified complaint against the respondent associate
justices of the CA who issued the latest resolution praying that they be disbarred
and their names be deleted as members of the Integrated Bar of the Philippines
(IBP).
SC required the respondent associate justices to comment on the complaint.
In compliance with the Court's directive, the respondent associate justices
submitted their Joint Comment.
They reported that not so long after the CA issued the TRO dated 13 November
2015 on the subject case, complainant charged the members of the Special 22nd
Division of the CA, which was then composed of Justices Camello, Henri Jean Paul
B. Inting (Justice-in-charge), and Pablito A. Perez, with gross ignorance of the law,
gross violation of attorney's oath, gross violation of the Code of Professional
Responsibility, gross violation of the Code of Judicial Conduct, gross violation of
professional ethics, gross violation of the Code of Judicial Ethics, grave abuse of
authority, gross misconduct, manifest partiality, and violation of R.A. No. 3019. The
complaint was docketed as I.P.I. No. 16-238-CA-J (Re: Verified Complaint of
Clemente F. Atoc).
They further reported that when the CA upgraded the provisional remedy of TRO
to a Writ of Preliminary Injunction on 11 January 2016, complainant hastily
recycled his previous complaint against Justices Camello, Henri Jean Paul B. Inting
and Pablito A. Perez and accused this time the members of the Special 22nd
Division, now composed of herein respondent Justices Camello, Badelles and Atal-
Pao, of the exact violations, based on the exact same circumstances, and raising
the exact same issues. They noted that complainant even recycled in the
subsequent complaint his original Verification and Certification of Non-Forum
Shopping. Complainant certified that he' has not filed any complaint involving the
same issue/issues before the Supreme Court, Court of Appeals, any tribunal or
agency, when he knows for a fact that I.P.I. No. 16-238-CA-J is still pending.
The respondent associate justices thus iterate the same plea for the dismissal of
the utterly baseless complaint and adopts in regard to the instant suit of
complainant, the very same comment on complainant's complaint in I.P.I. No. 16-
238-CA-J.
The respondent justices submit that case law has been consistent in its caveat that
where judicial relief is still available, whether it be ordinary or extra-ordinary
remedy, resort to administrative complaint is not allowed. They maintain that the
preclusive principle that bars parties to a pending suit from by-passing judicial
remedies by resorting to administrative suits against judges applies even more to
complainant who is not even a party or privy, but a total stranger to the pending
petitions before the CA.
ISSUE:
Whether the charges against the Justices proper. NO
HELD:
At the outset, it is clear that the assailed resolutions were issued by respondent
Associate Justices in the proper exercise of their judicial functions. As such, these
are not subject to administrative disciplinary action. Other than complainant's bare
allegations, there were no evidence presented to show any wrong-doings or bad
faith on the part of respondent associate justices. We have settled the rule that a
judge may not be administratively sanctioned from mere errors of judgment in the
absence of showing of any bad faith, fraud, malice, gross ignorance, corrupt
purpose, or a deliberate intent to do an injustice on his or her part. Judicial officers
cannot be subjected to administrative disciplinary actions for their performance of
duty in good faith.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
To be held liable for gross ignorance of the law, it must be shown that in the
issuance of the assailed resolutions, the justices have committed an error that was
gross or patent, deliberate or malicious. In the instant case, it was shown that the
justices based their findings on existing facts and jurisprudence. There was no
proof presented to show that they were moved by ill-will or malicious intention to
violate the law and extend favor to a party. In fact, their findings were thoroughly
discussed in the ratio decidendi of the resolution.
In assailing the resolutions issued by the CA, complainant failed to realize that
unfavorable rulings are not necessarily erroneous. If a party disagrees with a ruling
of the court, assuming these were incorrect, there are judicial remedies available
to them under the Rules of Court. As a matter of public policy, a judge cannot be
subjected to liability for any of his official acts, no matter how erroneous, as long as
he acts in good faith. To hold otherwise would be to render judicial office
untenable, for no one called upon to try the facts or interpret the law in the
process of administering justice can be infallible in his judgment.
Moreover, we have explained that administrative complaints against magistrates
cannot be pursued simultaneously with the judicial remedies accorded to parties
aggrieved by the erroneous orders or judgments of the former. Administrative
remedies are neither alternative to judicial review nor do they cumulate thereto,
where such review is still available to the aggrieved parties and the cases not yet
been resolved with finality. Here, it is evident that the parties aggrieved by the
resolution can avail or may have already availed of other judicial remedies. Quite
significant is the fact that the instant administrative complaint was filed by
someone who is not a party or privy to the case. As correctly noted by the
respondent justices in their Joint-Comment, Atoc did not even disclose the capacity
in which he brings the present administrative complaint.
[ G.R. No. 189026, November 09, 2016 ]
PHILIPPINE TELEGRAPH TELEPHONE CORP., PETITIONER, VS. SMART
COMMUNICATIONS, INC., RESPONDENT.
FACTS:
Petitioner Philippine Telegraph & Telephone Corporation (PT&T) and respondent
Smart Communications, Inc. (Smart) entered into an Agreement for the
interconnection of their telecommunication facilities. The Agreement provided for
the interconnection of Smart's Cellular Mobile Telephone System (CMTS), Local
Exchange Carrier (LEC) and Paging services with PT&T's LEC service. Starting 1999,
however, PT&T had difficulty meeting its financial obligations to Smart. Thus, the
parties amended the Agreement, which extended the payment period and allowed
PT&T to settle its obligations on installment basis. The amended Agreement also
specified, among others, that Smart's access charge to PT&T would increase from
P1.00 to P2.00 once PT&T's unpaid balance reaches P4 Million and that PT&T's
access charge to Smart would be reduced from P8.69 to P6.50. Upon full payment,
PT&T's access charge would be further reduced to P4.50.
Smart sent a letter informing PT&T that it increased the access charge.
HoweverPT&T sent a letter to Smart claiming that the latter overcharged PT&T on
outbound calls to Smart's CMTS. PT&T cited the NTC resolution in a separate
dispute between Smart and Digitel, where the NTC ultimately disallowed the
access charges imposed by Smart for being discriminatory and less favorable than
terms offered to other public telecommunication entities (PTEs). Accordingly, PT&T
demanded a refund
Thereafter, PT&T filed a letter-complaint with the NTC raising the issue that the
access charges imposed by Smart were allegedly "discriminatory and not in
conformity with those of other carriers.
NTC: Ordered Smart and PT&T to attend mediation conferences in order to thresh
out the issues. After the mediation efforts failed, the NTC directed the parties to
file their respective pleadings, after which it would consider the case submitted for
resolution. But before the parties were able to submit the pleadings, Smart filed a
complaint with the Regional Trial against PT&T alleging that PT&T was in breach of
its contractual obligation
RTC: Issued a writ of preliminary injunction in favor of Smart. It reasoned that
allowing the NTC to proceed and adjudicate access charges would violate Smart's
contractual rights. It also denied PT&T's motion to dismiss, finding that the nature
of the civil case was incapable of pecuniary estimation which squarely falls within
its jurisdiction. It added that the NTC has no jurisdiction to adjudicate breaches of
contract and award damages.
41 of 50
CA: Held that the RTC did not commit grave abuse of discretion and, consequently,
denied the petition.
ISSUE:
Whether the issuance of writ of preliminary injunction by the RTC proper.
HELD:
Under Rule 58, Section 2 of the 1997 Rules of Civil Procedure, the court where the
action is pending may grant the provisional remedy of preliminary injunction.
Generally, trial courts have the ancillary jurisdiction to issue writs of preliminary
injunction in cases falling within its jurisdiction, including civil actions that are
incapable of pecuniary estimation and claims for sum of money exceeding P400,
000.00, among others. There are, however, exceptions to this rule, such as when
Congress, in the exercise of its power to apportion jurisdiction, restricts the
authority of regular courts to issue injunctive reliefs. For example, the Labor Code
prohibits any court from issuing injunctions in cases involving or arising from labor
disputes.[44] Similarly, Republic Act No. 8975 (RA 8975) provides that no court,
other than the Supreme Court, may issue provisional injunctive reliefs which would
adversely affect the expeditious implementation and completion of government
infrastructure projects.[46] Another well-recognized exception is that courts could
not interfere with the judgments, orders, or decrees of a court of concurrent or
coordinate jurisdiction. This rule of non-interference applies not only to courts of
law having equal rank but also to quasi-judicial agencies statutorily at par with such
courts.
The NTC was created pursuant to Executive Order No. 546 (EO 546), promulgated
on July 23, 1979. It assumed the functions formerly assigned to the Board of
Communications and the Telecommunications Control Bureau and was placed
under the administrative supervision of the Ministry of Public Works. Meanwhile,
the Board of Communications previously exercised the authority which originally
pertained to the Public Service Commission (PSC).Under Executive Order No. 125,
issued in January 1987, the NTC became an attached agency of the Department of
Transportation and Communications.
In view of the legislative history of the NTC, it is clear that Congress intended NTC,
in respect of its quasi-judicial or adjudicatory functions, to be co-equal with
regional trial courts. Hence, the RTC cannot interfere with the NTC's exercise of its
quasi-judicial powers without breaching the rule of non-interference with tribunals
of concurrent or coordinate jurisdiction. In this case, the NTC was already in the
process of resolving the issue of whether the access charges stipulated in the
Agreement were fair and equitable pursuant to its mandate under RA 7925 when
the RTC issued the assailed writ of preliminary injunction. Mediation conferences
had been conducted and, failing to arrive at a settlement, the NTC had ordered the
parties to submit their respective pleadings. Simply put, the NTC had already
assumed jurisdiction over the issue involving access charges. Undeniably, the RTC
exceeded its jurisdiction when it restrained the NTC from exercising its statutory
authority over the dispute.
CASE 33
EN BANC
G.R. Nos. 217126-27, November 10, 2015
CONCHITA CARPIO MORALES, IN HER CAPACITY AS THE OMBUDSMAN, Petitioner,
v. COURT OF APPEALS (SIXTH DIVISION) AND JEJOMAR ERWIN S. BINAY, JR.,
Respondents.
DECISION
PERLAS-BERNABE, J.:
"All government is a trust, every branch of government is a trust, and
immemorially acknowledged so to be[.]"
The Case
Before the Court is a petition for certiorari and prohibition2 filed on March 25,
2015 by petitioner ConchitaCarpio Morales, in her capacity as the Ombudsman
(Ombudsman), through the Office of the Solicitor General (OSG), assailing: (a) the
Resolution3 dated March 16, 2015 of public respondent the Court of Appeals (CA)
in CA-G.R. SP No. 139453, which granted private respondent Jejomar Erwin S.
Binay, Jr.'s (Binay, Jr.) prayer for the issuance of a temporary restraining order (TRO)
against the implementation of the Joint Order4 dated March 10, 20,15 of the
Ombudsman in OMB-C-A-15-0058 to 0063 (preventive suspension order)
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
preventively suspending him and several other public officers and employees of
the City Government of Makati, for six (6) months without pay; and (b) the
Resolution5 dated March 20, 2015 of the CA, ordering the Ombudsman to
comment on Binay, Jr.'s petition for contempt6 in CA-G.R. SP No. 139504.
Pursuant to the Resolution7 dated April 6, 2015, the CA issued a writ of preliminary
injunction8 (WPI) in CA-G.R. SP No. 139453 which further enjoined the
implementation of the preventive suspension order, prompting the Ombudsman to
file a supplemental petition9 on April 13, 2015.
The Facts
On July 22, 2014, a complaint/affidavit10 was filed by Atty. Renato L. Bondal and
Nicolas "Ching" Enciso VI before the Office of the Ombudsman against Binay, Jr.
and other public officers and employees of the City Government of Makati (Binay,
Jr., et al), accusing them of Plunder11 and violation of Republic Act No. (RA)
3019,12 otherwise known as "The Anti-Graft and Corrupt Practices Act," in
connection with the five (5) phases of the procurement and construction of the
Makati City Hall Parking Building (Makati Parking Building).
On September 9, 2014, the Ombudsman constituted a Special Panel of
Investigators14 to conduct a fact-finding investigation, submit an investigation
report, and file the necessary complaint, if warranted (1st Special Panel).15
Pursuant to the Ombudsman's directive, on March 5, 2015, the 1st Special Panel
filed a complaint16 (OMB Complaint) against Binay, Jr., et al, charging them with six
(6) administrative cases17 for Grave Misconduct, Serious Dishonesty, and Conduct
Prejudicial to the Best Interest of the Service, and six (6) criminal cases18 for
violation of Section 3 (e) of RA 3019, Malversation of Public Funds, and Falsification
of Public Documents (OMB Cases).
As to Binay, Jr., the OMB Complaint alleged that he was involved in anomalous
activities attending the following procurement and construction phases of the
Makati Parking Building project, committed during his previous and present terms
as City Mayor of Makati:
Binay, Jr.'s First Term (2010 to 2013)20
(a) On September 21, 2010, Binay, Jr. issued the Notice of Award21 for Phase III of
the Makati Parking Building project to Hilmarc's Construction Corporation
(Hilmarc's), and consequently, executed the corresponding contract22 on
September 28, 2010,23 without the required publication and the lack of
architectural design,24 and approved the release of funds therefor in the following
amounts as follows: (1) P130,518,394.80 on December 15, 2010;25 (2)
P134,470,659.64 on January 19, 2011;26 (3) P92,775,202.27 on February 25,
2011;27 (4) P57,148,625.51 on March 28, 2011;28 (5) P40,908,750.61 on May 3,
2011;29 and (6) P106,672,761.90 on July 7, 2011;30
(b) On August 11, 2011, Binay, Jr. issued the Notice of Award31 for Phase IV of the
Makati Parking Building project to Hilmarc's, and consequently, executed the
corresponding contract32 on August 18, 2011,33 without the required publication
and the lack of architectural design,34 and approved the release of funds therefor
in the following amounts as follows: (1) P182,325,538.97 on October 4, 2O11;35
(2) P173,132,606.91 on October 28,2011;36 (3) P80,408,735.20 on December 12,
2011;37 (4) P62,878,291.81 on February 10, 2012;38 and (5) P59,639,167.90 on
October 1, 2012;39
(c) On September 6, 2012, Binay, Jr. issued the Notice of Award40 for Phase V of
the Makati Parking Building project to Hilmarc's, and consequently, executed the
corresponding contract41 on September 13, 2012,42 without the required
publication and the lack of architectural design,43 and approved the release of the
funds therefor in the amounts of P32,398,220.0544 and P30,582,629.3045 on
December 20, 2012; and
Binay, Jr.'s Second Term (2013 to 2016)46
(d) On July 3, 2013 and July 4, 2013, Binay, Jr. approved the release of funds for the
remaining balance of the September 13, 2012 contract with Hilmarc's for Phase V
of the Makati Parking Building project in the amount of P27,443,629.97;47 and
(e) On July 24, 2013, Binay, Jr. approved the release of funds for the remaining
balance of the contract48 with MANA Architecture & Interior Design Co. (MANA)
for the design and architectural services covering the Makati Parking Building
project in the amount of P429,011.48.49
On March 6, 2015, the Ombudsman created another Special Panel of Investigators
to conduct a preliminary investigation and administrative adjudication on the OMB
Cases (2nd Special Panel).50 Thereafter, on March 9, 2015, the 2nd Special Panel
42 of 50
issued separate orders51 for each of the OMB Cases, requiring Binay, Jr., et al. to
file their respective counter-affidavits.
Before Binay, Jr., et al.'s filing of their counter-affidavits, the Ombudsman, upon the
recommendation of the 2nd Special Panel, issued on March 10, 2015, the subject
preventive suspension order, placing Binay, Jr., et al. under preventive suspension
for not more than six (6) months without pay, during the pendency of the OMB
Cases.53 The Ombudsman ruled that the requisites for the preventive suspension
of a public officer are present,54 finding that: (a) the evidence of Binay, Jr., et al.'s
guilt was strong given that (1) the losing bidders and members of the Bids and
Awards Committee of Makati City had attested to the irregularities attending the
Makati Parking Building project; (2) the documents on record negated the
publication of bids; and (3) the disbursement vouchers, checks, and official receipts
showed the release of funds; and (b) (1) Binay, Jr., et al. were administratively
charged with Grave Misconduct, Serious Dishonesty, and Conduct Prejudicial to the
Best Interest of the Service; (2) said charges, if proven to be true, warrant removal
from public service under the Revised Rules on Administrative Cases in the Civil
Service (RRACCS), and (3) Binay, Jr., et al.'s respective positions give them access to
public records and allow them to influence possible witnesses; hence, their
continued stay in office may prejudice the investigation relative to the OMB Cases
filed against them.55 Consequently, the Ombudsman directed the Department of
Interior and Local Government (DILG), through Secretary Manuel A. Roxas II
(Secretary Roxas), to immediately implement the preventive suspension order
against Binay, Jr., et al., upon receipt of the same.
On March 11, 2015, a copy of the preventive suspension order was sent to the
Office of the City Mayor, and received by MariconAusan, a member of Binay, Jr.'s
staff.
The Proceedings Before the CA
On even date,58 Binay, Jr. filed a petition for certiorari59 before the CA, docketed
as CA-G.R. SP No. 139453, seeking the nullification of the preventive suspension
order, and praying for the issuance of a TRO and/or WPI to enjoin its
implementation.60Primarily, Binay, Jr. argued that he could not be held
administratively liable for any anomalous activity attending any of the five (5)
phases of the Makati Parking Building project since: (a) Phases I and II were
undertaken before he was elected Mayor of Makati in 2010; and (b) Phases III to V
transpired during his first term and that his re-election as City Mayor of Makati for
a second term effectively condoned his administrative liability therefor, if any, thus
rendering the administrative cases against him moot and academic.61In any event,
Binay, Jr. claimed that the Ombudsman's preventive suspension order failed to
show that the evidence of guilt presented against him is strong, maintaining that
he did not participate in any of the purported irregularities.62 In support of his
prayer for injunctive relief, Binay, Jr. argued that he has a clear and unmistakable
right to hold public office, having won by landslide vote in the 2010 and 2013
elections, and that, in view of the condonation doctrine, as well as the lack of
evidence to sustain the charges against him, his suspension from office would
undeservedly deprive the electorate of the services of the person they have
conscientiously chosen and voted into office.
On March 16, 2015, at around 8:24 a.m., Secretary Roxas caused the
implementation of the preventive suspension order through the DILG National
Capital Region - Regional Director, Renato L. Brion, CESO III (Director Brion), who
posted a copy thereof on the wall of the Makati City Hall after failing to personally
serve the same on Binay, Jr. as the points of entry to the Makati City Hall were
closed. At around 9:47 a.m., Assistant City Prosecutor of Makati Billy C. Evangelista
administered the oath of office on Makati City Vice Mayor Romulo V. Pea, Jr.
(Pea, Jr.) who thereupon assumed office as Acting Mayor.
At noon of the same day, the CA issued a Resolution65 (dated March 16, 2015),
granting Binay, Jr.'s prayer for a TRO,66 notwithstanding Pena, Jr.'s assumption of
duties as Acting Mayor earlier that day.
Citing the case of Governor Garcia, Jr. v. CA,68 the CA found that it was more
prudent on its part to issue a TRO in view of the extreme urgency of the matter
and seriousness of the issues raised, considering that if it were established that the
acts subject of the administrative cases against Binay, Jr. were all committed during
his prior term, then, applying the condonation doctrine, Binay, Jr.'s re-election
meant that he can no longer be administratively charged.69 The CA then directed
the Ombudsman to comment on Binay, Jr.'s petition for certiorari .
On March 17, 2015, the Ombudsman manifested71 that the TRO did not state
what act was being restrained and that since the preventive suspension order had
already been served and implemented, there was no longer any act to restrain.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
On the same day, Binay, Jr. filed a petition for contempt,73 docketed as CA-G.R. SP
No. 139504, accusing Secretary Roxas, Director Brion, the officials of the Philippine
National Police, and Pena, Jr. of deliberately refusing to obey the CA, thereby
allegedly impeding, obstructing, or degrading the administration of justice.74 The
Ombudsman and Department of Justice Secretary Leila M. De Lima were
subsequently impleaded as additional respondents upon Binay, Jr.'s filing of the
amended and supplemental petition for contempt75 (petition for contempt) on
March 19, 2015.76 Among others, Binay, Jr. accused the Ombudsman and other
respondents therein for willfully and maliciously ignoring the TRO issued by the CA
against the preventive suspension order.
In a Resolution78dated March 20, 2015, the CA ordered the consolidation of CA-
G.R. SP No. 139453 and CA-G.R. SP No. 139504, and, without necessarily giving due
course to Binay, Jr.'s petition for contempt, directed the Ombudsman to file her
comment thereto.79 The cases were set for hearing of oral arguments on March 30
and 31, 2015.80
The Proceedings Before the Court
Prior to the hearing of the oral arguments before the CA, or on March 25, 2015,
the Ombudsman filed the present petition before this Court, assailing the CA's
March 16, 2015 Resolution, which granted Binay, Jr.'s prayer for TRO in CA-G.R. SP
No. 139453, and the March 20, 2015 Resolution directing her to file a comment on
Binay, Jr.'s petition for contempt in CA-G.R. SP No. 139504.81 The Ombudsman
claims that: (a) the CA had no jurisdiction to grant Binay, Jr.'s prayer for a TRO,
citing Section 14 of RA 6770,82 or "The Ombudsman Act of 1989," which states
that no injunctive writ could be issued to delay the Ombudsman's investigation
unless there is prima facie evidence that the subject matter thereof is outside the
latter's jurisdiction;83 and (b) the CA's directive for the Ombudsman to comment
on Binay, Jr.'s petition for contempt is illegal and improper, considering that the
Ombudsman is an impeachable officer, and therefore, cannot be subjected to
contempt proceedings.
In his comment85 filed on April 6, 2015, Binay, Jr. argues that Section 1, Article VIII
of the 1987 Constitution specifically grants the CA judicial power to review acts of
any branch or instrumentality of government, including the Office of the
Ombudsman, in case of grave abuse of discretion amounting to lack or excess of
jurisdiction, which he asserts was committed in this case when said office issued
the preventive suspension order against him.86 Binay, Jr. posits that it was
incumbent upon the Ombudsman to1 have been apprised of the condonation
doctrine as this would have weighed heavily in determining whether there was
strong evidence to warrant the issuance of the preventive suspension order.87 In
this relation, Binay, Jr. maintains that the CA correctly enjoined the implementation
of the preventive suspension order given his clear and unmistakable right to public
office, and that it is clear that he could not be held administratively liable for any of
the charges against him since his subsequent re-election in 2013 operated as a
condonation of any administrative offenses he may have committed during his
previous term.88 As regards the CA's order for the Ombudsman to comment on his
petition for contempt, Binay, Jr. submits that while the Ombudsman is indeed an
impeachable officer and, hence, cannot be removed from office except by way of
impeachment, an action for contempt imposes the penalty of fine and
imprisonment, without necessarily resulting in removal from office. Thus, the fact
that the Ombudsman is an impeachable officer should not deprive the CA of its
inherent power to punish contempt.
Meanwhile, the CA issued a Resolution90 dated April 6, 2015, after the oral
arguments before it were held,91 granting Binay, Jr.'s prayer for a WPI, which
further enjoined the implementation of the preventive suspension order. In so
ruling, the CA found that Binay, Jr. has an ostensible right to the final relief prayed
for, namely, the nullification of the preventive suspension order, in view of the
condonation doctrine, citing Aguinaldo v. Santos.92 Particularly, it found that the
Ombudsman can hardly impose preventive suspension against Binay, Jr. given that
his re-election in 2013 as City Mayor of Makati condoned any administrative
liability arising from anomalous activities relative to the Makati Parking Building
project from 2007 to 2013.93 In this regard, the CA added that, although there
were acts which were apparently committed by Binay, Jr. beyond his first term
namely, the alleged payments on July 3, July 4, and July 24, 2013,94 corresponding
to the services of Hillmarc's and MANA - still, Binay, Jr. cannot be held
administratively liable therefor based on the cases of Salalima v. Guingona, Jr.,95
and Mayor Garcia v. Mojica96 wherein the condonation doctrine was still applied
by the Court although the payments were made after the official's re-election,
reasoning that the payments were merely effected pursuant to contracts executed
before said re-election.97 To this, the CA added that there was no concrete
evidence of Binay, Jr.'s participation for the alleged payments made on July 3, 4,
and 24, 2013.98
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In view of the CA's supervening issuance of a WPI pursuant to its April 6, 2015
Resolution, the Ombudsman filed a supplemental petition99 before this Court,
arguing that the condonation doctrine is irrelevant to the determination of
whether the evidence of guilt is strong for purposes of issuing preventive
suspension orders. The Ombudsman also maintained that a reliance on the
condonation doctrine is a matter of defense, which should have been raised by
Binay, Jr. before it during the administrative proceedings, and that, at any rate,
there is no condonation because Binay, Jr. committed acts subject of the OMB
Complaint after his re-election in 2013.100
On April 14 and 21, 2015,101 the Court conducted hearings for the oral arguments
of the parties. Thereafter, they were required to file their respective
memoranda.102 In compliance thereto, the Ombudsman filed her
Memorandum103 on May 20, 2015, while Binay, Jr. submitted his Memorandum
the following day.
Pursuant to a Resolution105 dated June 16, 2015, the Court directed the parties to
comment on each other's memoranda, and the OSG to comment on the
Ombudsman's Memorandum, all within ten (10) days from receipt of the notice.
On July 15, 2015, both parties filed their respective comments to each other's
memoranda.106 Meanwhile, on July 16, 2015, the OSG filed its Manifestation In
Lieu of Comment,107 simply stating that it was mutually agreed upon that the
Office of the Ombudsman would file its Memorandum, consistent with its desire to
state its "institutional position."108 In her Memorandum and Comment to Binay,
Jr.'s Memorandum, the Ombudsman pleaded, among others, that this Court
abandon the condonation doctrine.109 In view of the foregoing, the case was
deemed submitted for resolution
Five (5) issues were discussed in this case, namely:
1. Whether the Petition filed before the SC, without resorting to the filing
of a motion for reconsideration, was the Ombudsmans plain, speedy,
and adequate remedy;
2. Whether the Court of Appeals (CA) has subject matter jurisdiction
over the subject matter of the petition;
3. Whether the CA has subject matter jurisdiction to issue a Temporary
Restraining Order (TRO) and/or a Writ of Preliminary Injunction
(WPI) enjoining the implementation of the preventive suspension
issued by Ombudsman against Binay, Jr.;
4. Whether the CA acted in grave abuse of its discretion in issuing said
TRO and WPI; and
5. Whether the CAs directive for the Ombudsman to comment on Binay,
Jr.s petition for contempt was improper or illegal.
RULING
First Issue, the SC ruled that the Ombudsmans petition falls under the exceptions
that a prior motion for reconsideration must be filed, citing the case of Republic v.
Bayao, G.R. No. 179492, 5 June 2013, which held as follows: (a) where the order is
a patent nullity, as where the court a quo has no jurisdiction; (b) where the
questions raised in the certiorari proceedings have been duly raised and passed
upon by the lower court, or are the same as those raised and passed upon in the
lower court; (c) where there is an urgent necessity for the resolution of the
question and any further delay would prejudice the interests of the Government
or of the petitioner or the subject matter of the action is perishable; (d) where,
under the circumstances, a motion for reconsideration would be useless; (e) where
petitioner was deprived of due process and there is extreme urgency for relief; (f)
where, in a criminal case, relief from an order of arrest is urgent and the granting
of such relief by the trial court is improbable; (g) where the proceedings in the
lower court are a nullity for lack of due process; (h) where the proceedings were ex
parte or in which the petitioner had no opportunity to object; and (i) where the
issue raised is one purely of law or where public interest is involved. (Emphasis
supplied on the grounds relied on by the SC in this case, in ruling that no motion
for reconsideration was needed.
Second Issue, the discussion revolved around Sec. 14 of Republic Act No. 6770,
otherwise known as the Ombudsman Act (RA 6770), more particularly its 2nd
Paragraph states:
Section 14. Restrictions. No writ of injunction shall be issued by any court to
delay an investigation being conducted by the Ombudsman under this Act, unless
there is a prima facie evidence that the subject matter of the investigation is
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
outside the jurisdiction of the Office of the Ombudsman.
No court shall hear any appeal orapplication for remedy against the decision or
findings of the Ombudsman, except the Supreme Court, on pure question of law.
Now the SC ruled that the 2nd Paragraph of Sec. 14, RA 6770, is vague,
unconstitutional and invalid. The SC relied on its ruling in the landmark case of
Fabian v. Desierto, 356 Phil. 787 (1998), which, in turn, held that the 4th Paragraph
of Sec. 27, RA 6770, is void, as it had the effect of increasing
theappellatejurisdiction of the SC without its advice and concurrence, inviolation
of Sec. 30, Art. VI of the 1987 Constitution. This tells us that lawyers should always
be wary of reading RA 6770 since case law has affected itso much maybe its time
to update it.
Interestingly, the SC mentioned the Senate deliberations cited by the Ombudsman,
in the crafting of RA 6770. It quoted the exchanges between Senators
JovitoSalonga, Edgardo Angara, TeofistoGuingona, Jr., and Neptali Gonzales, which
merely led the SC to be suspicious on whether said Senators were talking about
Sec. 14, RA 6670, or some other provision. In other words, while the throwback
was appreciatedby the SC, the discussions were not really useful in this case.
Regardless, the SC still ruled thatthe remedy of Binay, Jr. the filing of petition for
certiorari pursuant to Rule 65 of the Rules of Court, to assail the Ombudsmans
preventive suspension order was valid, citing the cases of Office of the
Ombudsman v. Capulong , G.R.No. 201643, 12 March 2014, and Dagan v.Office of
the Ombudsman, G.R. No. 184083, 19 November 2013. Its just sad that the sorry
end of Second Paragraph of Sec. 14, RA 6770 came as collateral damage in this
case. The SC justified its taking up this issue on its own motion, or ex meromotu,
which it canrightfully do, since it is, after all, the SC.
Third Issue is where it starts to become more interesting.Here, the Ombudsmans
history was discussed, citing heavily from the case of Gonzales III v. Office of the
President, G.R. No. 196231 and 19232, 28 January 2014 (hereinafter referred to as
Gonzales). You can imagine the Ombudsman smiling from ear to ear while
reading this portion, but this form of flattery should lead one to be suspicious.
What can be picked up from the Gonzales case is that the Office of the
Ombudsmans independence covers thefollowing: (1) it is the creation of the
Constitution; (2) it enjoys fiscalautonomy; and (3) it is insulated from executive
supervision and control. Onthis basis, the SC held that the Ombudsman was meant
to be protected frompolitical harassment and pressure, to free it from the
insidious tentacles of politics. (Oh, what imagery does this give.) Since the SC is
apolitical, then Gonzales should not be interpreted toshield the Ombudsman from
the judicial review power of the courts. After all, there is no politics in the judiciary,
right?
After the Ombudsman, it is now the SCs turn to give an exhaustive recap of its
own history. Starting from the definition of Judicial Power, the SC went on the
discuss its expanded scope ofjudicial review enunciated in Oposa v. Factoran , G.R.
No. 101083, 30 July 1993, then the evolution of itsrule-making authority in
Echegaray v. Secretary of Justice , 361 Phil. 73 (1999). The SC pointed out that
Congress, in relation to RA 6770, has no authority to repeal, alter, or supplement
rules concerning pleading, practice, and procedure, and rules allowing the issuance
of an injunction form part of the courts inherent power, which (now, citing foreign
case law) enable the judiciary to accomplish itsconstitutionally mandated
functions.
The SC ruled that Congress passing of the First Paragraph of Sec. 14, RA 6770,
which prohibits the issuance of an injunction, is an encroachment of the SCs rule-
making authority. An injunction, after all, is merely a provisional and auxiliary relief
to preserve rights in esse. However, the SC noted that it has not consented to this
as it has not issued rules of procedure through an administrative circular. Thus,
pending deliberation, the SC declared the First Paragraph of Sec. 14, RA 6770, as
ineffective, until it is adopted as part of the rules of procedure through an
administrative circular duly issued therefor.
Sec. 14, RA 6770 is now beaten and badly bruised. To sum it up: The Second
Paragraph was declared unconstitutional, and the First Paragraph was now deemed
ineffective. As such,the CA was held to have correctly issued the injunctive relief in
enjoining thepreventive suspension against Binay, Jr.
Fourth Issue is where the condonation doctrine was taken up. To go right at it, the
SC abandoned the condonation doctrine, but ruled that the CA did not act in
excess of jurisdiction in issuing the WPI, as it did so based on good case law,
considering that the abandonment is prospective in nature.
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In abandoning the condonation doctrine, the SC emphasized that this was a
jurisprudential creation that originated in the 1959 Pascual case, which was
decided under the 1935 Constitution. It is notable that there was no legal
precedent on the issue at that time, and the SC resorted to American authorities.
The SC stated what appears the sole basis forthecondonation doctrine in Pascual,
to wit:
The weight of authorities x xx seems to incline toward the rule denying the right to
remove one from office because of misconduct during a prior term, to which we
fully subscribe.
As can be read above, it is clear that no real justification was given for the
condonation doctrine, except that it seems to incline towards American
authorities. On this regard, the SC made its own investigation, and found that there
was really no established weight ofauthorities in the United States (US). In fact,
17 States in the US have already abandoned the condonation doctrine, as pointed
out by the Ombudsman. The SC went on to adopt the findings of the Ombudsman
in US jurisprudence, with the caveat that said cases are merely guides of
interpretation.
Perhaps the greatest victory in this case for the Ombudsman is that it was able to
convince the SC not to adhere to stare decisis, thereby enriching Philippine
jurisprudence on this matter. This is important, as its effects are far-reaching, since
we now have additional basis to petition the abandonment of old ineffective case
laws. For this moment of glory, allow us to quote directly from the case, viz:
Therefore, the ultimate analysis is on whether or not the condonation doctrine, as
espoused in Pascual,and carried over in numerous cases after, can be held up
against prevailing legal norms. Note that the doctrine of stare decisis does not
preclude this Court from revisiting existing doctrine. As adjudged in the case of
Belgica, the stare decisis rule should not operate when there are powerful
countervailing considerations against its application. In other words, stare decisis
becomes an intractable rule only when circumstances exist to preclude reversal of
standing precedent. As the Ombudsman correctly points out, jurisprudence, after
all, is not a rigid, atemporal abstraction; it is an organic creature that develops and
devolves along with the society within which it thrives. In the words of a recent US
Supreme Court Decision, [w]hat we can decide, we can undecide.'
In this case, the Court agrees with the Ombudsman that since the time Pascual was
decided, the legal landscape has radically shifted. Again, Pascual was a 1959 case
decided under the 1935 Constitution, which dated provisions do not reflect the
experience of the Filipino People under the 1973 and 1987 Constitutions.
Therefore, the plain difference in setting, including, of course, the sheer impact of
the condonation doctrine on public accountability, calls for Pascuals judicious re-
examination.
The SC then proceeded to dissect Pascual, and went on to enumerate the notable
cases that applied Pascual, which included cases issued under the 1987
Constitution. Pascual was tested under existing laws, to see if there exists
legislation to support Pascual, e.g. 1987 Constitution, Revised Administrative Code,
Code of Conductand Ethical Standards for Public Officials and Employees, Local
Government Code of 1991, and Revised Rules on Administrative Cases in Civil
Service. The SC ruled:
"Reading the 1987 Constitution together with the above-cite legal provisions now
leads this Court to the conclusion that the doctrine of condonation is actually
bereft of legal bases.
To begin with, the concept of public office is a public trust and the corollary
requirement of accountability to the people at all times, as mandated under the
1987 Constitution, is plainly inconsistent with the idea that an elective local
officials administrative liability for a misconduct committed during a prior term can
be wiped off by the fact that he was elected to a second term of office, or even
another elective post. Election is not a mode of condoning an administrative
offense,and there is simply no constitutional or statutory basis in our jurisdiction
tosupport the notion that an official elected for a different term is fully absolved of
any administrative liability arising from an offense done during a prior term. In this
jurisdiction, liability arising from administrative offenses may be condoned by the
President in light of Section 19, Article VII of the 1987 Constitution which was
interpreted in Llamas v. Orbos to apply to administrative offenses: xxx "
The SC made it clear that Pascual has no statutory basis at all. By abandoning the
condonation doctrine, the SC would remove this defense oft-times used by elected
officials, of which the SC was aware of, as it made mention of the databrought
forward by the Ombudsman, to wit:
To provide a sample size, the Ombudsman has informed the Court that for the
period of July 2013 to December 2014 alone, 85 cases from the Luzon Office and
24 cases from the Central Office were dismissed on the ground on condonation.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
Thus, in just one and a half years, over a hundred cases of alleged misconduct
involving infractions such as dishonesty, oppression, gross neglect of duty and
grave misconduct were placed beyond the reach of the Ombudsmans
investigatory and prosecutorial powers. Evidently, this fortifies the finding that the
case is capable of repetition and must therefore, not evade review.
The Fifh and Final Issue on whether the order to comment directed to the
Ombudsman was illegal, was refused to be resolved on the ground there are no
contempt proceedings yet. It is the claim of the Ombudsman that since she was an
impeachable officer, she could be subjected to contempt. However, no due course
has been given to the contempt action, thus, the Ombudsmans claim was
premature.
CASE 32
THIRD DIVISION
G.R. No. 201073, February 10, 2016
PHILIPPINE AIRLINES, INC. Petitioner, v. PAL EMPLOYEES SAVINGS & LOAN
ASSOCIATION, INC., Respondent.
DECISION
PEREZ, J.:
Assailed in the present Petition for Review on Certiorari is the Decision dated
September 13, 20111 and the Resolution dated March 13, 20122 of the Court of
Appeals (CA) in CA-G.R. CV No. 82098, CA-G.R. CR No. 28341, and CA-G.R. CR No.
28655, which affirmed with modification the Consolidated Decision dated
November 6, 20023 of the Regional Trial Court (RTC), Branch 118, Pasay City in Civil
Case Nos. 97-1026 and 00-0016.
FactS
Respondent Philippine Airlines (PAL) Employees Savings and Loan Association, Inc.
(PESALA) is a private non-stock corporation, the principal purposes of which are
"(t)o promote and cultivate the habit of thrift and saving among its members; and
to that end, to receive moneys on deposits from said members; (t)o loan said
deposits to members when in need.
With the enactment of Republic Act (R.A.) No. 3779 (Savings and Loan Association
Law), PESALA submitted the necessary requirements to the BangkoSentral ng
Pilipinas (BSP) so that PESALA will be authorized to operate as a savings and loan
association. Among the documents required by and submitted to the BSP was a
Certification dated June 20, 1969 issued by Mr. Claro C. Gloria, then Vice President
for Industrial Relations of PAL, to the effect that PAL sanctions and supports the
systems and operations of the PESALA; and that it allows and implements an
arrangement whereby the PESALA collects-loan repayments, capital contributions,
and deposits from its members by payroll deduction through the facilities of PAL.
The said Certification reads
This is to certify that the Philippine Air Lines, Inc.:
Sanctions and supports the systems and operations of the PAL Employees Savings
and Loan Association, Inc. (PESALA);
Allows and implements an arrangement whereby the PAL Employees Savings and
Loan Association collects loan repayments, capital contributions, and deposits from
its members by payroll deduction through the facilities of PAL;
Has loaned to the PESALA specific office space to enable it to carry on its normal
business until such time as it will have already acquired its own office; and
Authorizes the Association to conduct business within the PAL office space loaned
to the Association, Monday through Friday, from 8:00 A.M. to 1:00 P.M., and 2:00
P.M. to 4:30 P.M.
On January 28, 1972, the BSP issued to PESALA Certificate of Authority No. C-062.6
Since then and until the filing of the present case before the trial court, PAL
religiously complied with its arrangement with PESALA to carry-out the payroll
deductions of the loan repayments, capital contributions, and deposits of PESALA
members.
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The controversy began on July 11, 1997, when PESALA received from Atty. Jose C.
Blanco (Blanco), then PAL Labor Affairs Officer-in-Charge, a Letter8 informing it that
PAL shall implement a maximum 40% salary deduction on all its Philippine-based
employees effective August 1, 1997. The Letter stated that, as all present
Philippine-based collective bargaining agreements (CBAs) contain this maximum
40% salary deduction provision and to prevent "zero net pay" situations, PAL was
going to strictly enforce said provision.
Foreseeing difficulties, PESALA estimated that if the 40% ceiling will be
implemented, "then only around 8% (P19,200,000.00) of the total monthly payroll
of P240,000,000.00 due to PESALA will be collected by PAL. The balance of around
P48,000,000.00 will have to be collected directly by plaintiff PESALA from its
members who number around 13,000 and who have different offices
nationwide."9 PESALA claimed that this scenario is highly possible as PESALA was
only ninth in the priority order of payroll deductions.10 In the obtaining
circumstances, PESALA's computation showed that "(t)here will remain an
uncollected amount of P38,400,000.00 monthly for which plaintiff will suffer loss of
interest income of around P3,840,000.00 monthly."
Antecedent Proceedings
On August 6, 1997, PESALA filed a Complaint12 for Specific Performance, Damages
or Declaratory Relief with a Prayer for Temporary Restraining Order and Injunction
before the RTC of Pasay City, and which was docketed as Civil Case No. 97-1026.
The Complaint prayed for the following:
WHEREFORE, premises considered, plaintiff most respectfully prays that:
1. Upon the filing of this Complaint, a temporary restraining order be issued
prohibiting defendants or any of their representatives from implementing the 40%
limitation on the salary deductions as stated in the Jose C. Blanco's letter dated
July 11, 1997 on the deductions pertaining to the loan repayments, capital
contributions and deposits authorized by the PESALA members which will be
remitted to PESALA and to order defendants to maintain status quo ante litem and
to strictly enforce the aforesaid payroll deductions in favor of PESALA;
2. After notice and hearing, a writ of preliminary injunction be issued against the
defendants preventing the latter from committing the aforesaid acts under the
preceding paragraph upon such bond as this Honorable Court may equitably and
reasonably fix and to strictly enforce the payroll deductions in favor of PESALA
during the pendency of the case;
3. After trial and hearing, judgment be rendered as follows:
Making the preliminary injunction permanent with respect to the acts stated in
paragraph 1 of the prayer; and
Ordering defendants to pay to PESALA the amount of P3,840,000.00 monthly as
damages reckoned from the time PAL starts applying the 40% maximum
deductions on the PESALA deductions; and
Ordering the defendants jointly and severally to pay plaintiff the sum of
P250,000.00 as attorney's fees and P5,000.00 as appearance fee per appearance as
well as the costs of litigation.
Other reliefs just and equitable in the premises are likewise prayed.
In the Order dated August 11, 1997, the RTC issued a Temporary Restraining Order
(TRO) prohibiting PAL and its representatives from implementing the maximum
40% salary deduction, to wit:
In order to preserve the status quo between the parties pending resolution on the
prayer for the issuance of a writ of preliminary injunction included in the
complaint, a Temporary Restraining Order is hereby issued enjoining/prohibiting
defendants or any of their representatives from enforcing/implementing the
maximum 40% salary deduction on the Philippine based PAL employees as stated
in the letter of defendant Jose C. Blanco dated July 11, 1997, on the deductions
pertaining to the loan repayments, capital contributions and deposits authorized
by the PESALA members which will be remitted to PESALA.
PAL, however, was not able to comply with the TRO for the August 1-15, 1997
payroll as it allegedly received a copy of the said TRO after the corresponding
payroll was already prepared. As the TRO was not complied with, only
P3,672,051.52 was remitted by PAL to PESALA instead of the usual P28,500,000.00.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
After a finding that the alleged CBA provision on the maximum 40% deduction was
applicable only to union dues, and as the PESALA deductions were duly authorized
by the member-employees, the RTC granted the injunctive writ prayed for by
PESALA, enjoining PAL, Blanco, and all other persons or officials acting under them
from implementing the maximum 40% limitation on salary deductions, and
ordering PAL to strictly enforce the payroll deductions in favor of PESALA until
further orders from the court. The Order dated September 3, 1997 states:
In view of all the foregoing, finding merit in the herein injunctive prayer, the same
is GRANTED. Let therefore, a Writ of Preliminary Injunction be issued, enjoining the
defendants Philippine Airlines and Jose Blanco, and all other persons or officials
acting under them from implementing the 40% limitation on the salary deductions
as stated in the letter of defendant Jose C. Blanco dated July 11, 1997, pertaining to
the loan repayments, capital contributions and deposits authorized by the PESALA
members which will be remitted to PESALA and to maintain the status quo ante
litem and to strictly enforce the payroll deductions in favor of plaintiff PESALA until
further order from this Court, upon plaintiffs posting of a credible injunction bond
in the amount of One Million (P1,000,000.00) Pesos.
SO ORDERED.
PAL failed to comply with the terms of the Order dated September 3, 1997. For the
pay period of September 1-15, 1997, the deduction advice given by PESALA was for
P31,870,194.45 but only P27,209,088.24 was deducted, leaving a balance of
P4,661,106.21. For the pay period of September 16-30, 1997, the deduction advice
was for P31,678,265.85 but only P27,755,336.75 was deducted, leaving a balance
of P3,922,929.10. For the pay period of October 1-15, 1997, the deduction advice
was for P31,366,866.24 but only P27,668,179.53 was deducted, leaving a balance
of P3,698,686.71. For the pay period of October 16-31, 1997, the deduction advice
was for P31,074,983.79 but only P27,887,935.13 was deducted, leaving a balance
of P3,187,048.66. For the pay period of November 1-15, 1997, the deduction
advice was for P31,062,541.02 but only P27,897,703.61 was deducted, leaving a
balance of P3,164,837.41. For the pay period of November 16-30, 1997, the
deduction advice was for P31,306,925.06 but only P28,476,282.37 was deducted,
leaving a balance of P2,830,642.69. For the pay period of December 1-15, 1997,
the deduction advice was for P31,468,236.78 but only P28,363,695.00 was
deducted, leaving a balance of P3,104,541.78. For the pay period of December 16-
31, 1997, the deduction advice was for P31,258,380.50 but only P27,387,361.59
was deducted, leaving a balance of P3,871,018.91. For the pay period of January 1-
15, 1998, the deduction advice was for P31,304,373.14 but only P25,382,534.85
was deducted, leaving a balance of P5,921,838.29. For the pay period of January
16-30, 1998, the deduction advice was for P31,687,242.52 but only P27,190,730.72
was deducted, leaving a balance of P4,496,511.80. For the pay period of February
1-15, 1998, the deduction advice was for P31,919,262.26 but only P26,269,660.41
was deducted, leaving a balance of P5,649,601.85.17 Thus, from September 1,
1997 to February 15, 1998, a balance of P44,488,760.4118 was incurred.
In an Order dated March 11, 1998, the RTC ordered PAL to remit to PESALA the
amount of P44,488,716.41, to wit:
WHEREFORE, and based on the foregoing considerations, finding the motion of the
plaintiff to be meritorious, the same is hereby GRANTED. Defendants are hereby
ordered to remit to the plaintiff PESALA the total undeducted amount of
P44,488,716.41 which corresponds to pay periods from September 1997 to
February 15, 1998, and to cause the deductions in full in the succeeding pay
periods in accordance with the deduction advice of the plaintiff.
SO ORDERED.
In the meantime, PAL was placed under receivership on June 23, 1998. Thus, in the
Order dated July 1, 1998, the Securities and Exchange Commission (SEC) prohibited
PAL from paying any amounts in respect of any liabilities incurred prior to June 23,
1998 and declared all claims for payment against PAL suspended.
In defense, PAL claimed that PESALA never filed any claims with the Rehabilitation
Receiver of PAL nor with the SEC that is why it was unable to comply with the RTC's
Order dated March 11, 1998.
During the hearing held on December 4, 1998, however, then PAL's counsel, Atty.
Emmanuel Pena, and Blanco assured the Court that: (1) PAL will regularly remit to
PESALA the full amount per pay period that is due to the latter, and (2) PAL will pay
PESALA the balance of P44,488.716.41 by January 1999. These assurances were
embodied in the Order dated December 4, 1998.
Despite said assurances, PAL still failed to make good its word. On January 17,
2000, PESALA filed a Petition for Indirect Contempt against Blanco, Mr. Avelino L.
Zapanta (then PAL President), and Mr. Andrew L. Huang (then PAL Senior Vice
46 of 50
President-Finance and Chief Financial Officer) before the Regional Trial Court of
Pasay City, docketed as Civil Case No. 00-0016, and consolidated with Civil Case No.
97-1026.
In the Decision dated November 6, 2002, the RTC made the writ of preliminary
injunction earlier issued as permanent, thus ordering PAL and its officials to strictly
comply with and implement the arrangement between the parties whereby PAL
deducts from the salaries of PESALA members through payroll deductions the loan
repayments, capital contributions and deposits of said members, and to remit the
same to PESALA. The RTC also declared Blanco, Zapanta, and Huang guilty of
indirect contempt and ordered them to remit or turn-over to PESALA the amount
of P44,488,716.41 within three days from receipt of the Decision, otherwise their
arrest and detention shall be ordered immediately. The dispositive of the said
Decision reads:
WHEREFORE, the foregoing premises considered, judgment is hereby rendered in
favor of the plaintiff/petitioner and against defendants/respondents:
Ordering the defendants and all other officials, persons or agents acting under
them to strictly comply with and implement the arrangement between the parties
whereby defendants deduct from the salaries of the members of PESALA through
payroll deductions the loan repayments, capital contributions and deposits of said
members and to remit the same to plaintiff immediately giving full priority to
plaintiffs deduction as contained in the ClarificatoryOrder dated May 19, 2000;
Making the writ of preliminary injunction earlier issued as permanent;
Ordering the defendants to pay the plaintiff attorney's fees of P250,000.00;
Declaring the herein respondents Jose C. Blanco, Avelino L. Zapanta in his capacity
as President of the Philippine Airlines and Andrew L. Huang, in his capacity as
Senior Vice President-Finance and Chief Financial Officer of the Philippine Airlines,
Inc., as guilty of indirect contempt for their contemptuous refusal and failure to
comply with the lawful Orders dated March 11, 1998 and December 4, 1998 which
have already become final and executory as the Petition for Certiorari of
defendants on the Order of this Court dated March 11, 1998 had been denied by
the Court of Appeals per its Entry of Judgment in CA-G.R. SP 48654 dated May 14,
1999. Hence, respondents are hereby ordered to remit/turn over to
plaintiff/petitioner the amount of P44,480,716.41 within three (3) days from
receipt hereof otherwise, their arrest and detention shall be ordered immediately.
Ordering the defendants/respondents to pay the cost of this suit.
SO ORDERED.
On November 11, 2002, PAL, Blanco, Zapanta, and Huang appealed the RTC
Decision. The appeal of Civil Case No. 97-1026 was docketed as CA-G.R. CV No.
82098, while the appeal of Criminal Case No. 00-0016 was docketed as CA-G.R. CR
No. 28341 and CA-G.R. CR No. 28655. These appeals were consolidated.
While the appeals were pending before the Court of Appeals, PESALA moved for
the execution of the RTC Order dated March 11, 1998. The RTC issued a Writ of
Execution pending appeal and the consequent Notices of Garnishment. Upon
appeal, the Court of the Appeals, as sustained by the Supreme Court, nullified the
Writ of Execution and Notices of Garnishment.
Going back to the case at bar, in the Decision dated September 13, 2011, the Court
of Appeals dismissed the appeal in CA-G.R. CV No. 82098, but granted the appeals
in CA-G.R. CR Nos. 28341 and 28655. It affirmed with modification the RTC
Decision in that it upheld the agreement between the parties whereby PAL deducts
from the salaries of PESALA members through payroll deductions the loan
repayments, capital contributions and deposits of said members, as well as the RTC
Order directing the remittance of P44,488,716.4126 to PESALA, but it declared
Blanco, Zapanta, and Huang not guilty of indirect contempt. Thus, the Court of
Appeals ruled:
WHEREFORE, premises considered, the appeal in CA-G.R. CV No. 82098 is
DISMISSED while the appeal in CA-G.R. CR. Nos. 28341 and 28655 is GRANTED. The
Decision of the Regional Trial Court dated November 6, 2002 is AFFIRMED with
MODIFICATION that respondents-appellants Jose C. Blanco, Avelino L. Zapanta and
Andrew L. Huang are held not guilty of indirect contempt. The order for them "to
remit/turn over to plaintiff/petitioner the amount of P44,480,716.41 within three
(3) days from receipt" of the November 6, 2002 Decision "otherwise, their arrest
and detention shall be ordered immediately" is REVERSED.
Costs against the Defendants-Appellants.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
SO ORDERED.
Issues
I.
W/N The Court of Appeals ruled in a manner contrary to law and the Honorable
Court's rulings in De Ysasi v Arceo and Lazo vs. Republic Surety & Insurance Co.
when it sustained the lower court's adjudication of matters that are beyond the
issues presented in Civil Case No. 97-1026.
II.
W/N The Court of Appeals ruled in a manner contrary to Article 2055 of the Civil
Code and the Honorable Court's rulings when it effectively declared a contract of
guaranty between PAL and the members-debtors of PESALA.
III.
W/N Court of Appeals The ruled in a manner contrary to law when it sustained the
imposition of terms, conditions and standards not provided for by Republic Act No.
8367.
In raising these issues, PAL is essentially contesting the order directing it to pay
PESALA the amount of P44,488,716.41, representing the balance between the
deduction advice and the actual deducted amount.
Ruling
PETITION DENIED
PAL contends that its right to due process was violated when the Court of Appeals
sustained the RTC ruling for it to remit to PESALA the amount of P44, 488,716.41,
which amount was not specifically prayed for in the Complaint.29 PAL claims that
(t)he only amount prayed for by PESALA in its complaint was the alleged damages
of P3,840,000.00 monthly xxx reckoned from the time PAL starts applying the 40%
maximum deductions on the PESALA deductions, which is totally different from the
amount of P44,480,716.4130 that the lower court was ordering PAL to pay PESALA.
The said amount asked for by PESALA in its complaint was supposedly for
"damages," and not the undeducted amount insisted upon by both the lower court
and the Court of Appeals.
Indeed, a perusal of the prayer in the Complaint shows that PESALA did not
specifically pray for the amount of P44,488,716.41 or for any undeducted amount.
But this is understandable because, at the time the Complaint was filed, PAL had
yet to effect the maximum 40% deduction policy and as such, there were yet no
undeducted amounts.
The records of the case show, on the other hand, that the undeducted amount of
P44,488,716.41 came about because PAL failed to comply with the TRO and the
injunctive writ issued by the RTC. As discussed earlier, the Complaint was filed on
August 7, 1997 and as early as August 11, 1997, the RTC already issued a TRO
enjoining PAL from implementing the maximum 40% deduction policy. PAL,
however, failed to comply with the TRO. On September 3, 1997, the RTC issued a
Writ of Preliminary Injunction (WPI) further enjoining PAL from implementing the
maximum 40% deduction policy. Yet again, PAL failed to comply with the RTC's
directive.
PAL cannot hope to gain anything beneficial from its deliberate refusal to comply
with the orders and directives of the court. PAL's obstinate disobedience to the
RTC's TRO and WPI led to the disruption of the status quo and to the exposure of
PESALA to deficits and losses, for which it should be liable.
In United Coconut Planters Bank v. United Alloy Phils. Corp.,32 the Court, quoting
Capitol Medical Center v. Court of Appeals, explained that "(t)he sole object of a
preliminary injunction, whether prohibitory or mandatory, is to preserve the status
quo until the merits of the case can be heard." In Buyco v. Baraquia,33 we further
clarified that a preliminary injunction "is usually granted when it is made to appear
that there is a substantial controversy between the parties and one of them is
committing an act or threatening the immediate commission of an act that will
cause irreparable injury or destroy the status quo of the controversy before a full
hearing can be had on the merits of the case."
Indeed, an injunction is granted by a court in order to prevent an injury or to stop
the furtherance of an injury until the merits of the case can be fully adjudged. In
the case at bar, PAL's defiance of the TRO and the WPI caused PESALA to incur a
shortfall in the amount of P44,488,716.41. This shortfall could have been
precluded if only PAL complied with the TRO and the WPI and preserved the status
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quo. Since such loss was brought about by PAL's non-compliance with the
directives of the RTC, then fair play dictates that PAL should be held liable for its
insolence.
In directing PAL to remit to PESALA the amount of P44,488,716.41, PAL additionally
argues that the Court of Appeals unilaterally appointed PAL as a guarantor of the
debts of PESALA's members34 because the amount of P44,488,716.41 had not yet
been deducted from the salaries of the PESALA members.
Contrary to PAL's erroneous argument, however, it is liable, not because it is being
made a guarantor of the debts of PESALA's members, but because of its failure to
comply with the RTC's directives. Indeed the amount of P44,488,716.41 has not yet
been deducted from the salaries of the PESALA members and, precisely, the reason
why such amount has not been deducted is because PAL contravened the RTC's
TRO and WPI. PAL is therefore liable, not because it is being made a guarantor of
the debts of PESALA's members, but because its own actions brought forth the loss
in the case at bar.
PAL also claims that the RTC erred in granting PESALA a relief not prayed for in the
Complaint. It maintains that PESALA cannot be awarded the amount of
P44,488,716.41 as it is not in the nature of damages, which is the only fiscal relief
specifically prayed for in the Complaint.
Verily, it is a settled rule that a court cannot grant a relief not prayed for in the
pleadings or in excess of that being sought. In Bucal v. Bucal,36 the Court,
reiterating the ruling in DBP v. Teston, explained:
Due process considerations justify this requirement. It is improper to enter an
order which exceeds the scope of relief sought by the pleadings, absent notice
which affords the opposing party an opportunity to be heard with respect to the
proposed relief. The fundamental purpose of the requirement that allegations of a
complaint must provide the measure of recovery is to prevent surprise to the
defendant. (Emphasis supplied.)
In the case at bar, the records show that PAL was afforded due notice and an
opportunity to be heard with regard to PESALA's claim of P44,488,716.41. In fact,
in explaining the foregoing balance, PAL adverted to the "zero net pay" status of
their employees' respective accounts, thus concluding that there is simply no legal
or equitable basis in PESALA's demand for the remittance of the amount claimed to
be undeducted.
Moreover, the prayer in the Complaint did state that "(o)ther reliefs just and
equitable in the premises are likewise prayed."38 In Sps. Gutierrez v. Sps. Valiente,
et al.,39 the Court, echoing the ruling in BPI Family Bank v. Buenaventura, held
that;
(T)he general prayer is broad enough to "justify extension of a remedy different
from or together with the specific remedy sought." Even without the prayer for a
specific remedy, proper relief may be granted by the court if the facts alleged in the
complaint and the evidence introduced so warrant. The court shall grant relief
warranted by the allegations and the proof even if no such relief is prayed for. The
prayer in the complaint for other reliefs equitable and just in the premises justifies
the grant of a relief not otherwise specifically prayed for. (Emphasis supplied.)
Undeniably, PESALA's claim of P44,488,716.41 is a necessary consequence of the
action it filed against PAL. As said claim was duly heard and proven during trial,
with PAL being afforded the opportunity to contest it, the RTC and the Court of
Appeals did not err in granting such claim.
It is also worth mentioning that PAL, through its then counsel Atty. Emmanuel Pena
and then Labor Affairs OIC Atty. Jose C. Blanco, acknowledged its liability to PESALA
in the amount of P44,488,716.41. In open court, during the hearing held on
December 4, 1998, Atty. Pena and Atty. Blanco assured that: (1) PAL will regularly
remit to PESALA the full amount per pay period that is due to the latter; and (2)
PAL will likewise pay PESALA the balance of the previously undeducted amount of
P44,488,716.41 by January 1999. These assurances are transcribed in the Order
dated December 4, 1998 of the RTC.40chanroblesvirtuallawlibrary
Even if viewed as an offer of compromise, which is generally inadmissible in
evidence against the offeror in civil cases, PAL's acknowledgment of its liability to
PESALA in the amount of P44,488,716.41 falls under one of the exceptions to the
rule of exclusion of compromise negotiations.
In Tan v. Rodil,41 the Court, citing the case of Varadero de Manila v. Insular Lumber
Co., held that if there is neither an expressed nor implied denial of liability, but
during the course of negotiations the defendant expressed a willingness to pay the
plaintiff, then such offer of the defendant can be taken in evidence against him.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
In the case at bar, PAL admitted the amount of P44,488,716.41 without an
expressed nor implied denial of liability. This admission, coupled with an assurance
of payment, binds PAL.
In addition, the Court finds that an award of interest is in order. In Nacar v. Gallery
Frames,42 the Court clarified that:
When an obligation, not constituting a loan or forbearance of money, is breached,
an interest on the amount of damages awarded may be imposed at the discretion
of the court at the rate of 6% per annum. No interest, however, shall be adjudged
on unliquidated claims or damages, except when or until the demand can be
established with reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall begin to run from the time
the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such
certainty cannot be so reasonably established at the time the demand is made, the
interest shall begin to run only from the date the judgment of the court is made (at
which time the quantification of damages may be deemed to have been
reasonably ascertained). The actual base for the computation of legal interest shall,
in any case, be on the amount finally adjudged.
As further elucidated by the Court in Nacar, when the judgment of the court
awarding a sum of money becomes final and executory, a legal interest at the rate
of 6% per annum shall be imposed, counted from the time of finality until full
satisfaction of the judgment, as this interim period is deemed an equivalent to a
forbearance of credit.
On a last note, we herein clarify that the Court's directive for PAL to remit to
PESALA the amount of P44,488,716.41 does not preclude PAL from seeking due
reimbursement from the members of PESALA whose accounts were not
accordingly deducted. As explained earlier, the Court is not holding PAL as a
guarantor of the debts of these PESALA members; thus, PAL can rightfully claim the
principal amount of P44,488,716.41 from these concerned PESALA members.
This clarification is in consonance with the principle against unjust enrichment. In
Grandteq Industrial Steel Products, Inc., et al. v. Margallo,43 we defined unjust
enrichment as follows:
As can be gleaned from the foregoing, there is unjust enrichment when (1) a
person is unjustly benefitted, and (2) such benefit is derived at the expense of or
with damages to another. The main objective of the principle of unjust enrichment
is to prevent one from enriching oneself at the expense of another. It is commonly
accepted that this doctrine simply means that a person shall not be allowed to
profit or enrich himself inequitably at another's expense. One condition for
invoking this principle is that the aggrieved party has no other action based on a
contract, quasi-contract, crime, quasi-delict, or any other provision of law.
(Emphasis supplied.)
As the amount of P44,488,716.41 is actually comprised of loans of certain PESALA
members which were not duly deducted from their respective salaries, then fair
play dictates that these PESALA members should pay the remaining balances of
their loans and reimburse PAL. The interests herein adjudged by the Court,
however, are for the account of PAL, as it was PAL's disobedience of the RTC's
directives that brought forth the said principal amount.
WHEREFORE, premises considered, the present petition is hereby DENIED.
Petitioner Philippine Airlines, Inc. (PAL) is ordered to REMIT to PAL Employees
Savings and Loan Association, Inc. (PESALA) the principal amount of
P44,488,716.41, with interest at the rate of 6% per annum computed from March
11, 1998 until fully remitted, without prejudice to the right of PAL to be reimbursed
the principal amount by the concerned PESALA members.
R.A. No. 8975
Nerwin Industries Corporation vs. PNOC Energy Development Corporation
and Ester R. Guerzon, Chairman, Bids and Awards Committee 669 SCRA 173
Facts:
In 1999, the National Electrification Administration (NEA) published an
invitation to bid for its IPB-80 contract for the supply and delivery of about 60,000
pieces of woodpoles and 20,000 pieces of crossarms for the countrys Rural
Electrification Project. On October 2000, NEAs Administrator recommended to
NEAs Board of Directors the approval of award to Nerwin Industries Corporation
on account of the following: a.) Nerwin is the lowest complying and responsive
bidder; b.) the price difference between Nerwins bid and that of the second
highest bidder is deemed substantial and extremely advantageous to the
48 of 50
government ($1.47 million for the poles and $0.475 million for the crossarms); and
c.) the bidder and manufacturer are capable of supplying the woodpoles specified
in the bid documents based on pre-award inspection conducted.
However, in December 2000, NEAs Board of Directors passed a
resolution reducing by 50% the material requirements for the project. In turn, it
resolved the award of the contract at a reduced number to herein petitioner
Nerwin. Petitioner protested the said 50% reduction, alleging that the same was a
ploy to accommodate a losing bidder. Finding a way to nullify the results of a
previous bidding, NEA officials sought the opinion of the Government Corporate
Counsel, who upheld the eligibility and qualification of petitioner.
Notwithstanding, NEA allegedly held negotiations with other bidders relative to the
IPB-80 contract, prompting petitioner to file a complaint for specific performance
with prayer for the issuance of an injunction, which injunction application was
granted by the RTC in Civil Case 01102000. In the interim, respondent (PNOC)
issued a Requisition or an invitation to bid for wooden poles needed for its Samar
Rural Electrification project (O-Ilaw project). Upon learning of such issuance,
petitioner filed a civil action (Civil Case 03106921) in the RTC in Manila alleging
that said Requisition was an attempt to subject a portion of the items covered by
IPB-80 to another bidding, and praying that a TRO issue to enjoin respondents
proposed bidding for the wooden poles.
Respondents averred that the complaint showed no cause of action and
violated the rule that government infrastructure projects cannot be subjected to
TROs, seeking the dismissal of Civil Case 03106921. However, the RTC granted a
TRO in Civil Case 03106921.
Respondents appealed the case to the CA in a special civil action for
certiorari, alleging that the RTC had committed grave abuse of discretion
amounting to lack or excess of jurisdiction in holding that petitioner had been
entitled to the issuance of writ of preliminary injunction despite the express
prohibition from the law and from the SC; in issuing the TRO in blatant violation of
the Rules of Court and established jurisprudence; in declaring respondents in
default; and in disqualifying respondents counsel from representing them. The CA
granted the petition of herein respondents.
Issues:
Whether or not the CA erred in dismissing the case on the basis of RA 8975
prohibiting the issuance of temporary restraining orders and preliminary
injunctions, except if issued by the SC, on government projects;
Whether or not the CA erred in ordering the dismissal of the entire case on the
basis of RA 8975 which prohibits the issuance only of a preliminary injunction but
not injunction as a final remedy; and
Held:
The petition fails. Respondent Judge gravely abused his discretion in
entertaining an application for TRO/preliminary injunction and in issuing a
preliminary injunction through the assailed order. The same is a palpable violation
of RA 8975. Sections 3 and 4 of RA 8975 states:
Section 3. 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 government direction,
to restrain, prohibit or compel the following acts:
xxx
b.) bidding or awarding of contract/project of the national government
xxx
xxx
Section 4. Any temporary restraining order, preliminary injunction or
preliminary mandatory injunction issued in violation of Section 3 hereof is void and
of no force and effect.
Respondent Judge could not have legally declared herein respondent in
default because, in the first place, he should not have given due course to herein
petitioners complaint for injunction. Indubitably, the assailed orders were issued
with grave abuse of discretion amounting to lack or excess of jurisdiction.
Although judges have in their favor the presumption of regularity and good faith in
the performance of their judicial functions, a blatant disregard of the clear and
unmistakable terms of the law obviates this presumption and renders them
susceptible to administrative sanction.
Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58)
A preliminary injunction is an ancillary or preventive remedy resorted to
by a litigant to protect or preserve his rights or interests during the pendency of
the case. It is issued only when a.) the applicant is entitled to the relief demanded;
b.) the act sought to be enjoined is violative of that right; and c.) there is an urgent
and paramount necessity for the writ to prevent serious damage. An injunction
will not issue to protect a right not in esse, or a right which is merely contingent
and may never arise; or to restrain an act which does not give rise to a cause of
action; or to prevent the perpetration of an act prohibited by statute. A
preliminary injunction is but a preventive remedy whose only mission is to prevent
threatened wrong, further injury, and irreparable harm or injustice until the rights
of the parties can be settled.
REPUBLIC ACT NO. 8975
AN ACT TO ENSURE THE EXPEDITIOUS IMPLEMENTATION AND COMPLETION OF
GOVERNMENT
INFRASTRUCTURE PROJECTS BY PROHIBITING LOWER COURTS FROM ISSUING
TEMPORARY
RESTRAINING ORDERS, PRELIMINARY INJUNCTIONS OR PRELIMINARY MANDATORY
INJUCTIONS,
PROVIDING PENALTIES FOR VIOLATIONS THEREOF, AND FOR OTHER PURPOSES.
Section 1. Declaration of Policy. - Article XII, Section 6 of the Constitution states
that the use of property
bears a social function, and all economic agents shall contribute to the common
good. Towards this end,
the State shall ensure the expeditious and efficient implementation and
completion of government
infrastructure projects to avoid unnecessary increase in construction, maintenance
and/or repair costs
and to immediately enjoy the social and economic benefits therefrom.
Sec. 2. Definition of Terms. -
(a) National government projects shall refer to all c urrent and future national
government
infrastructure, engineering works and service contracts, including projects
undertaken by
government-owned and- controlled corporations, all projects covered by Republic
Act No. 6957, as
amended by Republic Act No. 7718, otherwise known as the Build-Operate-and-
Transfer Law, and
other related and necessary activities, such as site acquisition, supply and/or
installation of
equipment and materials, implementation, construction, completion, operation,
maintenance,
improvement, repair and rehabilitation, regardless of the source of funding.
(b) Service contracts shall refer to infrastructure contracts entered into by any
department, offfice
or agency of the national government with private entities and nongovernment
organizations for
services related or incidental to the functions and operations of the department,
office or agency
concerned.
Sec. 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.
49 of 50
This prohibition shall apply in 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 existing
laws.

Sec. 4. Nullity of Writs and Orders. - Any temporary restraining order, preliminary
injunction or
preliminary mandatory injunction issued in violation of Section 3 hereof is void and
of no force and effect.

Sec. 5. Designation of Regional Trial Courts. - The Supreme Court may designate
regional trial courts to
act as commissioners with the sole function of receiving facts of the case involving
acquisition, clearance
and development of right-of-way for government infrastructure projects. The
designated regional trial
court shall within thirty (30) days from the date of receipt of the referral, forward
its findings of facts to
the Supreme Court for appropriate action.

Sec. 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.

Sec. 7. Issuance of Permits. - Upon payment in cash of the necessary fees levied
under Republic Act No.
7160, as amended, otherwise known as the Local Government Code of 1991, the
governor of the
province or mayor of a highly-urbanized city shall immediately issue the necessary
permit to extract sand,
gravel and other quarry resources needed in government projects. The issuance of
said permit shall
consider environmental laws, land use ordinances and the pertinent provisions of
the Local Government
Code relating to environment.
Sec. 8. Separability Clause. - If any provision of this Act is declared unconstitutional
or invalid, other parts
or provisions hereof not affected thereby shall continue to be of full force and
effect.

Sec. 9. Repealing Clause. - All laws, decrees, including Presidential Decree Nos. 605,
1818 and Republic
Act No. 7160, as amended, orders, rules and regulations or lparts thereof
inconsistent with this Act are
hereby repealed or amended accordingly.

Sec. 10. Effectivity Clause. - This Act shall take effect fifteen (15) days following its
publication in at least
two (2) newspapers of general circulation.
Approved: November 7, 2000.

Provisional Remedies (Class 2017): Case Digests Compilation (Intro-Rule 58) 50 of 50