G. R. No. 197802, Nov.

11, 2015

ZUNECA PHARMACEUTICAL, AKRAM ARAIN AND/OR VENUS ARAIN, M.D. DBA ZUNECA
PHARMACEUTICAL, Petitioners, v. NATRAPHARM, INC., Respondent.

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) on September 24, 2007 under Certificate of
Trademark Registration No. 4-2007-005596. With its registration, the trademark "ZYNAPSE" enjoys
protection for a term of 10 years from September 24, 2007.
Early 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 claimed that the drug CARBAMAZEPINE has one documented serious and disfiguring side-
effect called "Stevens-Johnson Syndrome," and that the sale of the medicines "ZYNAPSE" and
"ZYNAPS" in the same drugstores will give rise to medicine switching.

Petitioners claimed 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."

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).

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 on October 2, 2001, with the
name "ZYNAPS" expressly indicated thereon. The CPR was issued to them on April 15,
2003.Petitioners averred that under Section 159 of the IPC their right to use the said mark is
protected.

The Regional Trial Court (RTC) denied respondent's application for a TRO, ruling that even if
respondent was able to first register its mark "ZYNAPSE" with the IPO in 2007, it is nevertheless
defeated by the prior actual use by petitioners of "ZYNAPS" in 2003.

In this Court's objective evaluation, 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". Parenthetically, the plaintiff would have been entitled to an injunction as
against any or all third persons in respect of its registered mark under normal conditions, that is, in
the event wherein Section 159 would not be invoked by such third person. Such is the case however
in this litigation. Section 159 of the IPC explicitly curtails the registrant's rights by providing for
limitations on those rights as against a "prior user" under Section 159.

CA issued a Resolution denying respondent's application for TRO and/or preliminary injunction for lack
of merit. The CA found no compelling reason to grant the application for TRO and/or preliminary
injunction because there was no showing that respondent had a clear and existing right that will be
violated by petitioners. Respondent moved for reconsideration but was denied by the CA in its July 31,
2008 Resolution.

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:
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.

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.

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. 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.

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 appeal from the decision in the main case.

BF Homes v MeralcoG.R. No. 171624 | SCRA | December 6, 2010 | Leonardo-De Castro,

J.Petition:
Petition for Review on Certiorari
Petitioners:
BF Homes and Philippines Waterworks and Construction Co.
Respondents:
Manila Electric Company
DOCTRINE

The doctrine of primary jurisdiction

Relevant ProvisionFACTS
a. BF Homes and PWCC distributes water drawn from deep wells using pumps run
by electricitysupplied by MERALCO in BF Homes subdivisions in Paraaque City, Las Pias City, Caloocan
City,and Quezon Cityb. In Republic v Meralco, the SC ordered MERALCO to refund its customers, which
shall becredited against the customers future consumption, the excess average amount of P0.167
perkilowatt hour starting with the customers billing cycles beginning February 1998a. Due to this
ruling, BF Homes and PWCC asked for refund in the amount ofP11,834,570.91.c. Accordingly,
MERALCO disconnected electric supply to BF H
omes and PWCCs
16 waterpumps located in BF Homes in Paranaque, Caloocan, and Quezon City, which thus disrupted
watersupply in those areasa. Meralco demanded from BF Homes and PWCC the payment of electric
billsamounting to P4,717,768.15b. BF Homes and PWCC then requested that such amount be applied
against theP11,834,570.91 worth of refund asked from Meralco. Denied.c. Again, 5 more water
pumps was were cut off power supply. Meralco threatened to cutmore power supplyd. BF Homes and
PWCC filed a case in RTC asking for damages plus writ of preliminary injunctionand restraining ordera.
In Meralcos answer, it allege that the
service contracts provides that
The Company
reserves the right to discontinue service in case the customer is in arrears in the payment
of bills
and such right is sanctioned and approved by the rules and regulations of ERBb. As to the refund,
Meralco claims that the refund has to be implemented in accordancewith the guidelines and schedule
to be approved by the ERCc. Meralco also allege that RTC has no jurisdiction over the subject matter
ISSUES
1. W/N the remedy of injunction is proper2. W/N the court has jurisdiction over the subject matter
RULING & RATIO
a. Yes, the injunction is granted by the Courta. The right of Meralco under the said service contract
must succumb to the paramountsubstantial and constitutional rights of the public to the usage and
enjoyment of waters intheir communityb. Such injunction must be given in order to prevent social
unrest in the community forhaving been deprived of the use and enjoyment of watersb. No, the Court
has no jurisdiction over the case of refunda. In determining which body has jurisdiction over a case,
the better policy is to considernot only the status or relationship of the parties but also the nature of
the action that is thesubject of their controversyb. In Meralco v ERB, the Court traced the legislative
history of the regulatory agencieswhich preceded the ERC to determine the legislative intent as to its
jurisdictionc. Accordingly, ERC has original and exclusive jurisdiction over all cases contestingrates,
fees, fines, and penalties imposed by the ERC in the exercise of its powers, functionsand
responsibilitiesd. The doctrine of primary jurisdiction applies where the administrative agency, as in
thecase of ERC, exercises its quasi-judicial and adjudicatory functione. The cause of action
originates from the Meralco Refund Decision as it involves theperceived right of the BF Homes and
PWCC to compel the latter to set-off or apply theirrefund to their present electric billf. Such right
of refund however must comply with the approved schedule of ERCg. Hence, jurisdiction lies with ERC.
Since RTC has no jurisdiction, it was also devoid ofany authority to act on the application of BF Homes
and PWCC for the issuance of a writ ofpreliminary injunction contained in the same Petition
DISPOSITION

WHEREFORE
, the instant Petition for Review is
DENIED
. The Decisiondated October 27, 2005 of the Court of Appeals in CA-G.R. SP No. 82826 is
AFFIRMED with the

MODIFICATION
that the Regional Trial Court, Branch202 of Las Pias City, is
ORDERED
to dismiss the Petition [With Prayer forthe Issuance of Writ of Preliminary Injunction and for the
ImmediateIssuance of Restraining Order] of BF Homes, Inc. and Philippine Waterworksand
Construction Corporation in Civil Case No. 03-0151. Costs against BFHomes, Inc. and Philippine
Waterworks and Construction Corporation.

SO ORDERED
NORTHERN VS SPS. GARCIA

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari[1] are the Decision[2] dated January 19, 2012 and the
Resolution[3] dated August 24, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 97448, ordering
the Regional Trial Court of Quezon City, Branch 215 (RTC) to appoint a commissioner to determine the
value of the attached properties of respondents Spouses Dennis and Cherylin Garcia (respondents),
and to discharge any excessive attachment found thereby.

The Facts

On September 23, 2005, petitioner Northern Islands Co., Inc. (petitioner) filed a Complaint[4] with
application for a writ of preliminary attachment, before the RTC against respondents, docketed as Civil
Case No. Q-05-53699 (Main Case), which was subsequently amended[5] on October 25, 2005.[6] 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;[7] (b) the goods were transported, shipped,
and delivered by Sulpicio Lines, Inc., and were accepted in good order and condition by respondents'
representatives;[8] (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; [9] (d)
however, the value of the goods were not paid by respondents despite repeated demands;[10] and (e)
respondents fraudulently asserted that petitioner had no proof that they had indeed received the
quantity of the subject goods.[11]

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 RTC issued the writ sought for.[12]

Instead of filing an answer, respondents filed on November 11, 2001, an Urgent Motion for Extension
of Time to File Proper Pleading and Motion for Discovery (Production and Inspection) [13] (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.[14]

Thereafter, or on January 11, 2006, respondents filed a Motion to Discharge Excess

Attachment,[15] 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.[16]

In an Order[17] dated February 28, 2006, the RTC denied the November 11, 2001 Motion, and, instead,
directed respondents to file their answer, which the latter complied with through the filing of their
Answer Ad Cautelam Ex Abudante with Compulsory Counterclaim[18]on April 3, 2006. Despite this,
respondents again filed a Motion for Leave of Court to File Motion for Discovery (Production and
Inspection)[19] (Motion for Discovery) on April 7, 2006.[20]

The RTC Ruling

In an Order[21] dated June 21, 2006, the RTC, among others, 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.[22]

On the other hand, the RTC granted the Motion for Discovery in accordance with Rule 27 of the Rules
of Court, despite petitioner's claim that it did not have the originals of the documents being sought. [23]
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.[24]

On July 25, 2006, respondents filed a Motion for Partial Reconsideration of the Order dated June 21,
2006, specifically assailing the denial of their Motion to Discharge Excess Attachment. In this relation,
they prayed that the RTC refer to a commissioner, pursuant to Rule 32 of the Rules of Court, the
factual determination of the total aggregate amount of respondents' attached properties so as to
ascertain if the attachment was excessive. Also, they prayed that the order for production and
inspection be modified and that petitioner be ordered to produce the original documents anew for their
inspection and copying. [25]

The foregoing motion was, however, denied by the RTC in an Order[26] dated August 23, 2006 for lack
of merit. Thus, respondents elevated the matter to the CA via petition for certiorari and
mandamus,[27] docketed as CA-G.R. SP No. 97448 (Certiorari Case).

In the interim, the RTC rendered a Decision[28] dated September 21, 2011 in the Main Case.
Essentially, it dismissed petitioner's Amended Complaint due to the absence of any evidence to prove
that respondents had agreed to the pricing of the subject goods.[29]

The RTC's September 21, 2011 Decision was later appealed[30] by petitioner before the CA on October
27, 2011. Finding that the Notice of Appeal was seasonably filed, with the payment of the appropriate
docket fees, the RTC, in an Order[31] dated January 25, 2012, ordered the elevation of the entire
records of the Main Case to the CA. The appeal was then raffled to the CA's Eighth Division, and
docketed as CA-G.R. CV No. 98237. On the other hand, records do not show that respondents filed
any appeal.[32]

The CA Ruling in the Certiorari Case

Meanwhile, the CA, in a Decision[33] dated January 19, 2012, partly granted the certiorari petition of
respondents, ordering the RTC to appoint a commissioner as provided under Rule 32 of the Rules of
Court as well as the subsequent discharge of any excess attachment if so found therein, and, on the
other hand, denying respondents' Motion for Discovery.[34]

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;[35] 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 former's possession.[36]

Aggrieved, petitioner filed a Motion for Partial Reconsideration[37] on February 13, 2012 but was,
however, denied in a Resolution[38]dated August 24, 2012, hence, the present petition.

The Issues Before the Court

The issues presented for the Court's resolution are: (a) whether 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; and (b) whether the CA erred in ordering
the appointment of a commissioner and the subsequent discharge of any excess attachment found by
said commissioner.

The Court's Ruling

The petition is meritorious.

Section 9, Rule 41 of the Rules of Court provides that in appeals by notice of appeal, the court
loses jurisdiction over the case upon the perfection of the appeals filed in due time and the
expiration of the time to appeal of the other parties.

In this case, petitioner had duly perfected its appeal of the RTC's 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 [39]dated January 25,
2012, had actually confirmed this fact, and thereby ordered the elevation of the entire records to the
CA. Meanwhile, records do not show that respondents filed any appeal, resulting in the lapse of its
own period to appeal therefrom. Thus, based on Section 9, Rule 41, it cannot be seriously doubted
that the RTC had already lost jurisdiction over the Main Case.

With the RTC's loss of jurisdiction over the Main Case necessarily 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,[40] the Court, in view of the nature of a preliminary
attachment, definitively ruled that 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, 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 claim
instituted 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.[41] (Emphases supplied)

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.

WHEREFORE, the petition is GRANTED. The Decision dated January 19, 2012 and the Resolution
dated August 24, 2012 of the Court of Appeals in CA-G.R. SP No. 97448 are hereby SET ASIDE.

SO ORDERED.

K.O. GLASS CONSTRUCTIONS VS. VALENZUELA

202 Phil. 141

CONCEPCION, JR., J.:

Petition for certiorari to annul and set aside the writ of preliminary attachment issued by the respondent Judge in
Civil Case No. 5902-P of the Court of First Instance of Rizal, entitled: "Antonio D. Pinzon, plaintiff, versus K.O. Glass
Construction Co., Inc., and Kenneth O. Glass, defendants," and for the release of the amount of P37,190.00, which
had been deposited with the Clerk of Court, to the petitioner.
On October 6, 1977, an action was instituted in the Court of First Instance of Rizal by Antonio D. Pinzon to recover
from Kenneth O. Glass the sum of P37,190.00, alleged to be the agreed rentals of his truck, as well as the value of
spare parts which have not been returned to him upon termination of the lease. In his verified complaint, the plaintiff
asked for an attachment against the property of the defendant consisting of collectibles and payables with the
Philippine Geothermal, Inc., on the grounds that the defendant is a foreigner; that he has a sufficient cause of action
against the said defendant; and that there is no sufficient security for his claim against the defendant in the event a
judgment is rendered in his favor.[1]

Finding the petition to be sufficient in form and substance, the respondent Judge ordered the issuance of a writ of
attachment against the properties of the defendant upon the plaintiff's filing of a bond in the amount of P37,190.00.[2]

Thereupon, on November 22, 1977, the defendant Kenneth O. Glass moved to quash the writ of attachment on the
grounds that there is no cause of action against him since the transactions or claims of the plaintiff were entered into
by and between the plaintiff and the K.O. Glass Construction Co., Inc., a corporation duly organized and existing
under Philippine laws; that there is no ground for the issuance of the writ of preliminary attachment as defendant
Kenneth O. Glass never intended to leave the Philippines, and even if he does, plaintiff can not be prejudiced thereby
because his claims are against a corporation which has sufficient funds and property to satisfy his claim; and that the
money being garnished belongs to the K.O. Glass Corporation Co., Inc. and not to defendant Kenneth O. Glass.[3]

By reason thereof, Pinzon amended his complaint to include K.O. Glass Construction Co., Inc. as co-defendant of
Kenneth O. Glass.[4]

On January 26, 1978, the defendants therein filed a supplementary motion to discharge and/or dissolve the writ of
preliminary attachment upon the ground that the affidavit filed in support of the motion for preliminary attachment
was not sufficient or wanting in law for the reasons that: (1) the affidavit did not state that the amount of plaintiff's
claim was above all legal set-offs or counterclaims, as required by Sec. 3, Rule 57 of the Revised Rules of Court; (2) the
affidavit did not state that there is no other sufficient security for the claim sought to be recovered by the action as
also required by said Sec. 3; and (3) the affidavit did not specify any of the grounds enumerated in Sec. 1 of Rule
57,[5] but, the respondent Judge denied the motion and ordered the Philippine Geothermal, Inc. to deliver and deposit
with the Clerk of Court the amount of P37,190.00 immediately upon receipt of the order which amount shall remain
so deposited to await the judgment to be rendered in the case.[6]

On June 19, 1978, the defendants therein filed a bond in the amount of P37,190.00 and asked the court for the release
of the same amount deposited with the Clerk of Court,[7] but, the respondent Judge did not order the release of the
money deposited.[8]

Hence, the present recourse. As prayed for, the Court issued a temporary restraining order, restraining the
respondent Judge from further proceeding with the trial of the case.[9]

We find merit in the petition. The respondent Judge gravely abused his discretion in issuing the writ of preliminary
attachment and in not ordering the release of the money which had been deposited with the Clerk of Court for the
following reasons:

First, there was no ground for the issuance of the writ of preliminary attachment. Section 1, Rule 57 of the Revised
Rules of Court, which enumerates the grounds for the issuance of a writ of preliminary attachment, reads, as follows:

"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, 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."

In ordering the issuance of the controversial writ of preliminary attachment, the respondent Judge said and We
quote:

"The plaintiff filed a complaint for a sum of money with prayer for Writ of Preliminary Attachment dated September
14, 1977, alleging that the defendant who is a foreigner may, at any time, depart from the Philippines with intent to
defraud his creditors including the plaintiff herein; that there is no sufficient security for the claim sought to be
enforced by this action; that the amount due the plaintiff is as much as the sum for which an order of attachment is
sought to be granted; and that defendant has sufficient leviable assets in the Philippines consisting of collectibles and
payables due from Philippine Geothermal, Inc., which may be disposed of at any time, by defendant if no Writ of
Preliminary Attachment may be issued. Finding said motion and petition to be sufficient in form and substance."[10]

Pinzon, however, did not allege that the defendant Kenneth O. Glass "is a foreigner (who) may, at any time, depart
from the Philippines with intent to defraud his creditors including the plaintiff." He merely stated that the defendant
Kenneth O. Glass is a foreigner. The pertinent portion of the complaint reads, as follows:

"15. Plaintiff hereby avers under oath that defendant is a foreigner and that said defendant has a valid and just
obligation to plaintiff in the total sum of P32,290.00 arising out from his failure to pay (i) service charges for the
hauling of construction materials; (ii) rentals for the lease of plaintiff's Isuzu Cargo truck, and (iii) total cost of the
missing/destroyed spare parts of said leased unit; hence, a sufficient cause of action exists against said defendant.
Plaintiff also avers under oath that there is no sufficient security for his claim against the defendant in the event a
judgment be rendered in favor of the plaintiff. However, defendant has sufficient assets in the Philippines in the form
of collectibles and payables due from the Philippine Geothermal, Inc. with office address at Citibank Center, Paseo de
Roxas, Makati, Metro Manila, but which properties, if not timely attached, may be disposed of by defendant and
would render ineffectual the reliefs prayed for by plaintiff in this Complaint."[11]

In his Amended Complaint, Pinzon alleged the following:

"15. Plaintiff hereby avers under oath that defendant GLASS is an American citizen who controls most, if not all, the
affairs of defendant CORPORATION. Defendants CORPORATION and GLASS have a valid and just obligation to
plaintiff in the total sum of P32,290.00 arising out for their failure to pay (i) service charges for the hauling of
construction materials, (ii) rentals for the lease of plaintiff's Isuzu Cargo truck, and (iii) total cost of the
missing/destroyed spare parts of said leased unit; hence, a sufficient cause of action exist against said defendants.
Plaintiff also avers under oath that there is no sufficient security for his claim against the defendants in the event a
judgment be rendered in favor of the plaintiff. However, defendant CORPORATION has sufficient assets in the
Philippines in the form of collectibles and payables due from the Philippine Geothermal, Inc. with office address at
Citibank Center, Paseo de Roxas, Makati, Metro Manila, but which properties, if not timely attached, may be disposed
of by defendants and would render ineffectual the reliefs prayed for by plaintiff in this Complaint."[12]

There being no showing, much less an allegation, that the defendants are about to depart from the Philippines with
intent to defraud their creditor, or that they are nonresident aliens, the attachment of their properties is not justified.

Second, the affidavit submitted by Pinzon does not comply with the Rules. Under the Rules, an affidavit for
attachment must state that (a) a sufficient cause of action exists, (b) the case is one of those mentioned in Section 1(a)
of Rule 57; (c) there is no other sufficient security for the claim sought to be enforced by the action, and (d) the
amount due to the applicant for attachment or the value of the property the possession of which he is entitled to
recover, is as much as the sum for which the order is granted above all legal counterclaims. Section 3, Rule 57 of the
Revised Rules of Court reads, as follows:

"Section 3. Affidavit and bond required. - An order of attachment shall be granted only when it is made to appear by
the affidavit of the applicant, or of some person who personally knows the facts, that a sufficient cause of action
exists; 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, or the value of the property the
possession of which he is entitled to recover, is as much as the sum for which the order is granted above all legal
counterclaims. The affidavit, and the bond required by the next succeeding section, must be duly filed with the clerk
or judge of the court before the order issues."

In his affidavit, Pinzon stated the following:

"I, ANTONIO D. PINZON, Filipino, of legal age, married and with residence and postal address at 1422 A. Mabini
Street, Ermita, Manila, subscribing under oath, depose and states that"

"1. On October 6, 1977, I filed with the Court of First Instance of Rizal, Pasay City Branch, a case against Kenneth O.
Glass entitled 'ANTONIO D. PINZON vs. KENNETH O. GLASS', docketed as Civil Case No. 5902-P;
"2. My Complaint against Kenneth O. Glass is based on several causes of action, namely:

"(i) On February 15, 1977, we mutually agreed that I undertake to haul his construction materials from Manila to his
construction project in Bulalo, Bay, Laguna and vice-versa, for a consideration of P50.00 per hour;

"(ii) Also, on June 18, 1977, we entered into a separate agreement whereby my Isuzu cargo truck will be leased to him
for a consideration of P4,000.00 a month payable on the 15th day of each month;

"(iii) On September 7, 1977, after making use of my Isuzu truck, he surrendered the same without paying the monthly
rentals for the leased Isuzu truck and the peso equivalent of the spare parts that were either destroyed or
misappropriated by him;

"3. As of today, October 11, 1977, Mr. Kenneth O. Glass still owes me the total sum of P32,290.00 representing his
obligation arising from the hauling of his construction materials, monthly rentals for the lease Isuzu truck and the
peso equivalent of the spare parts that were either destroyed or misappropriated by him;

"4. I am executing this Affidavit to attest to the truthfulness of the foregoing and in compliance with the provisions of
Rule 57 of the Revised Rules of Court."[13]

While Pinzon may have stated in his affidavit that a sufficient cause of action exists against the defendant Kenneth O.
Glass, 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 counterclaims." It has been held that the failure to allege
in the affidavit the requisites prescribed for the issuance of a writ of preliminary attachment, renders the writ of
preliminary attachment issued against the property of the defendant fatally defective, and the judge issuing it is
deemed to have acted in excess of his jurisdiction.[14]

Finally, it appears that the petitioner has filed a counter-bond in the amount of P37,190.00 to answer for any
judgment that may be rendered against the defendant. Upon receipt of the counter-bond, the respondent Judge
should have discharged the attachment pursuant to Section 12, Rule 57 of the Revised Rules of Court which reads, as
follows:

"Section 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 on 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. The judge shall, after
hearing, order the discharge of the attachment if a cash deposit is made, or a counterbond executed to the attaching
creditor is filed, on behalf 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. Upon the filing of such counter-bond, copy thereof
shall forthwith be served on the attaching creditor or his lawyer. Upon the discharge of an attachment in accordance
with the provisions of this section the property attached, or the proceeds of any sale thereof, shall be delivered to the
party making the deposit or giving the counter-bond, or the person appearing on his behalf, the deposit or counter-
bond aforesaid standing in the place of the property so released. 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
creditor may apply for a new order of attachment."

The filing of the counter-bond will serve the purpose of preserving the defendant's property and at the same time give
the plaintiff security for any judgment that may be obtained against the defendant.[15]

WHEREFORE, the petition is GRANTED and the writ prayed for is issued. The orders issued by the respondent
Judge on October 11, 1977, January 26, 1978, and February 3, 1978 in Civil Case No. 5902-P of the Court of First
Instance of Rizal, insofar as they relate to the issuance of the writ of preliminary attachment, should be, as they are
hereby ANNULLED and SET ASIDE and the respondents are hereby ordered to forthwith release the garnished
amount of P137,190.00 to the petitioner. The temporary restraining order, heretofore issued, is hereby lifted and set
aside. Costs against the private respondent Antonio D. Pinzon.

SO ORDERED.

Davao Light v. Court of Appeals

Facts
The Davao Light and Power Co., Inc. ("Davao Light") filed a collection suit against Queensland Hotel
("Queensland") and Teodorico Adarna ("Adarna") with an ex parte application for a writ of preliminary
attachment. On 3 May 1989, the trial court issued an Order of Attachment, and the corresponding Writ of
Attachment on 11 May 1989. On 12 May 1989, the summons, a copy of the complaint, and the writ of
attachment was served upon Queensland and Adarna. Queensland and Adarna filed a motion to discharge
the attachment on the ground that at the time the Order of Attachment and Writ of Attachment were issued,
the trial court has yet to acquire jurisdiction over the cause of action and over the persons of the defendants.

Issue
Whether or not the writ of preliminary attachment was validly issued.

Held
Yes. A writ of preliminary attachment may be issued before the court acquires jurisdiction over the person
of the defendant.

Ratio Decidendi
The court may validly issue a writ of preliminary injunction prior to the acquisition of jurisdiction over the
person of the defendant. There is an appreciable period of time between the commencement of the action
(takes place upon the filing of an initiatory pleading) and the service of summons to the defendant. In the
meanwhile, there are a number of actions which the plaintiff or the court may validly take, including the
application for and grant of the provisional remedy of preliminary attachment. There is nothing in the law
which prohibits the court from granting the remedy prior to the acquisition of jurisdiction over the person of
the defendant. In fact, Rule 57 of the Rules of Court allows the granting of a writ of preliminary injunction at
the commencement of the suit. In the cases of Toledo v. Burgos and Filinvest Credit Corporation v. Relova,
it was held that notice and hearing are not prerequisites to the issuance of a writ of preliminary attachment.
Further, in the case of Mindanao Savings & Loan Association, Inc. v. Court of Appeals, it was ruled that
giving notice to the defendant would defeat the purpose of the remedy by affording him or her the
opportunity to dispose of his properties before the writ can be issued.
A preliminary attachment may be discharged with the same ease as obtaining it. In any case, the ease of
availing the provisional remedy of preliminary attachment is matched by the ease with which it can be
remedied by either the posting of a counterbond, or by a showing of its improper or irregular issuance. The
second means of defeating a preliminary attachement, however, may not be availed of if the writ was issued
upon a ground which is at the same time the applicant's cause of action.
Preliminary attachment not binding until jurisdiction over the person of the defendant is acquired. The writ
of preliminary attachment, however, even though validly issued, is not binding upon the defendant until
jurisdiction over his person is first acquired.