Development Bank of the Philippines (DBP) v Hon Emmanuel Carpio, Country Bankers

Insurance Corporation, Dabay Abad, Hatab Abad, Omar Abas, Hanapi Abdullah, Rojea
Ab Abdullah, Abdullah Abendin, Alex Abendin et a. represented by their Atty in Fact,
Manuel Te

Date: Feb 1 2017

Ponente: J. Mendoza

Facts:
 Dabay Abad, Hatab Abad, Omar Abas, Hanapi Abdullah, Rojea Ab Abdullah,
Abdullah Abedin, Alex Abedin, et al (Abad et al) represented by their Atty in fact
Manuel Te filed a complaint for delivery of certificates of title, damages, and atty
fees against DBP abd Guarantee Fund for small and medium enterprise (GFSME)
before the RTC
 Abad et al prayed for the issuance of writ of seizure, pending hearing of the case,
for delivery of their certificates of title they claimed to be unlawfully detained by
DBP and GFSME
o Abad et al submitted the said certificates of title to DBP for safe keeping due
to the loan agreement
o DBP then submitted the certificates to GMSF because of its call to guarantee
the said loan
 RTC issued the writ of seizure and this was accompanied by Plaintiff’s Bond for
Manual Delivery of personal property issued by Country Bankers Insurance Corp
(CBIC)
 DBP filed its Omnibus Motion to dismiss complaint and to quash writ of seizure on the
ground of improper venue
 Abad et al filed an opposition and supplemental opposition in which they
attached a delivery receipt showing that the court sheriff took possession of the
certificates from GFSME
 RTC granted DBP’s motion on the ground of improper venue
 DBP and GFSME filed their Joint motion to order Plaintiffs to return titles
 RTC granted the said motion
 Abad et al filed a petition for certiorari and prohibition with the court praying for the
nullification and reversal of said decision
 RTC issued writ of execution to the sheriff but failed to do so
 DBP now files a motion/application to call on plaintiff’s surety bond for the
damages it incurred for its non-delivery
 RTC denied the motion
o The resolution on the said motion was no longer part of its residual power
 The order of the return was due to the consequence of the dismissal
based on improper venue and not on the trial of the case
 DBP filed MR but Denied
 DBP filed certiorari before CA
 CA ruling
o Dismissed as it did not file for the MR on the RTC decision about the improper
venue case = final and executor
o Rule 57 sec 20 provided that the claim for damages against the bond must
be filed before trial or before appeal was perfected or before the judgement
became executor
 DBP filed MR but denied
Issue: WON dismissal on the ground of improper venue prejudicial to file anew (NO)

Held:
 Residual Jurisdiction refers to the authority of the trial court to issue orders for the
protection and preservation of the rights of the parties which do not involve any
matter litigated by the appeal; to approve compromises; to permit appeals by
indigent litigants; to order execution pending appeal in accordance with sec 2
Rule 39 and to allow the withdrawal of the appeal provided these are done prior to
the transmittal of the original record or the record on appeal or in case of a petition
for review under Rule 42 before the CA
o Available at a stage in which the court is normally deemed to have lost
jurisdiction over the case or the subject matter involved in the appeal
o This stage is reached upon the perfection of the appeals by the parties or
upon the approval of the records on appeal but prior to the transmittal of the
original records or the records on appeal
 As applied
o It is clear that before trial court can have residual jurisdiction, trial on the
merits must first be conducted ; the court rendered judgement; and the
aggrieved party appealed therefrom
o In this case, no trial on the merits but dismissed due to improper venue and
respondents could not have appealed the order of dismissal as the same was
withouth prejudice
 Rule 41 sec 1(h) no appeal may be taken from an order dismissing an
action without prejudice
 Indeed there is no residual jurisdiction to speak of as no appeal was
filed
o Strongworld Construction v Hon Perello
 Dismissal w prejudice – bars refilling of the complaint and subject to
right of appeal
 Dismissal w/o prejudice can refile
 Rule 16 sec 1 list, are not prejudicial except f,h,i
o Hence, it is erroneous to conclude that RTC may rue on DBP’s application for
damages pursuant to its residual powers
 Other issues
o Equity
 P asking for relaxation of rules on Rule 57 sec 20 as application for
damages was after the order of dismissal had become final and
executor
 However, equity cannot apply if there’s an express mandate
 Only in absence of mandate can equity apply
o Remedies
 DBP can still enforce guarantee agreement with GFSME
 File action for damages under Art 19 of NCC for unlawfully taking said
certificates
 DBO can file a personal action for collection of sum of money against
respondents or instituting a real action to foreclose on the mortgage
security
 Alternative remedy^
 Issue on Application for damages was belatedly filed
o Rule 60 sec 10 provides that in replevin cases, as in receivership and
injunction cases, the damages to be awarded to either party upon any
bond filed by the other shall be claimed, ascertained, and granted in
accordance with sec 20 Rule 57
 SEC. 20. Claim for damages on account of illegal attachment.·If the judgment on the
action be in favor of the party against whom attachment was issued, he may
recover, upon the bond given or deposit made by the attaching creditor, any
damages resulting from the attachment. Such damages may be awarded only upon
application and after proper hearing, and shall be included in the final judgment. The
application must be filed before the trial or before appeal is perfected or before the
judgment becomes executory, with due notice to the attaching creditor and his
surety or sureties, setting forth the facts showing his right to damages and the amount
thereof. 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 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.
o Thus, it is necessary that
 Defendant-claimant has secured a favorable judgement in the main
action, meaning that the plaintiff has no cause of action and was not,
therefore, entitled to the provisional remedy of replevin
 That the application for damages. Showing claimant’s right thereto
and the amount thereof be filed in the same action before trial or
before appeal is perfected or before the judgment becomes executor
 That due notice be given to the other party and his surety or sureties,
notice to the principal not being sufficient
 That there should be a proper hearing
 To avoid multiplicity of suits , all incidents arising from the same
controversy myst be settled in the same court having jurisdiction of the
main action – application for damages must be filed in the same court
who took cognizance of the case, with due notice to the other parties
o As Applied
 DBP filed app for damages long after the order of dismissal had
become final and executor, with the reasoning that it was due to its
recourse with other remedies such as the enforcement of the writ of
execution
 SC: not persuaded as filing an application for damages does not
preclude resort to other remedies as nowhere in the ROC prohibits
application for damages bars the filing of a motion for writ of seizure, a
writ of execution or any other applicable remedy
 DBP FROM THE BEGINNING HAD ALREADY PERCEIVED THE ATTACHMENT
TO BE IMPROPER; HENCE, IT COULD HAVE EASILY FILED AN APPLICATION
BEFORE THE JUDGMENT BECAME FINAL AND EXECUTORY
 Jao v Royal financing
 Precluded defendant from claiming against the surety bond
because it failed to file the application for damages before the
termination of the case
 The appellee corporation failed to file its proper application for
damages prior to the termination of the case against it. It is now
barred to do so now
  Thus RTC has indeed no residual jurisdiction on DBP’s claim for
damages
o Remedies
 DBP can still enforce guarantee agreement with GFSME as a contract
of guaranty gives rise to a subsidiary obligation if the principal cannot
pay
 File action for damages under Art 19 of NCC for unlawfully taking said
certificates
 DBO can file a personal action for collection of sum of money against
respondents or instituting a real action to foreclose on the mortgage
security
 Alternative remedy^
o
 Dispositive: Denied