RULE 57 application for a writ of preliminary attachment.

It
Preliminary Attachment reads:

What is preliminary attachment? Fraud as basis for
application under Sec. 1(d), Rule 57; allegation of fraud by
respondents to warrant issuance of writ was substantiated.
Security Bank Corp. V. Great Wall Commercial
Press Co., Inc., et. al.
G.R. No. 219345, January 30, 2017
Facts:
May 12, 2013, Security Bank Corporation, the
petitioner, filed a complaint (with application for
Issuance of a Writ of Preliminary Attachment) against
the respondents, before the Regional Trial Court,
Branch 59 of Makati City. The complaint sought to
recover from respondents their unpaid obligations
under a credit facility covered by several trust receipts
and surety agreements, as well as interests,
attorney’s fee and cost. The petitioner argued that in
spite of the lapse of the maturity date of the obligation
from December 11, 2012 to May 7, 2013,
respondents failed to pay their obligations. The total
principal amount sought was P10,000,000.00.
After due hearing, the RTC granted the application for
a Writ of Preliminary Attachment of Security Bank,
which then posted a bond in the amount of
P10,000,000.00. Then respondent filed to lift Writ of
Preliminary Attachment but denied by RTC. The
respondent filed a motion for reconsideration but
denied by RTC.
Dissatisfied respondents filed a petition for certiorari
before CA, December 12, 2014, the CA lifted the Writ
of Preliminary Attachment. The petitioner moved for
reconsideration but its motion was denied by the CA
in its assailed resolution, dated June 26, 2015.
Issue:
Whether or not the court of appeals erred in nullifying
the Writ of Preliminary Attachment issued by the
Regional Trial Court.
RULING:
RULE 57
Preliminary Attachment
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:
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;
xxx
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. It is settled that fraudulent intent cannot be
inferred from the debtor's mere non-payment of
the debt or failure to comply with his obligation.
While fraud cannot be presumed, it need not be
proved by direct evidence and can well be inferred
from attendant circumstances. Fraud by its nature is
not a thing susceptible of ocular observation or readily
demonstrable physically; it must of necessity be
proved in many cases by inferences from
circumstances shown to have been involved in the
transaction in question.

Preliminary Attachment The allegations of Security Bank in support of its

application for a writ of preliminary attachment are
A writ of preliminary attachment is a provisional as follow:
remedy issued upon the order of the court where
an action is pending. Through the writ, the property 15. During the negotiation for the
or properties of the defendant may be levied upon approval of the loan application/
and held thereafter by the sheriff as security for renewal of Respondents the latter
the satisfaction of whatever judgment might be through Alfredo Buriel Atienza,
secured by the attaching creditor against the Fredino Cheng Atienza and Sps.
defendant. The provisional remedy of attachment is Frederick Cheng Atienza and
available in order that the defendant may not dispose Monica Cu Atienza, assured SBC
of the property attached, and thus prevent the that the loan obligation covered by
satisfaction of any judgment that may be secured by the several Trust Receipts shall be
the plaintiff from the former.17 paid in full on or before its maturity
date pursuant to the terms and
In this case, Security Bank relied on Section 1 (d), conditions of the aforesaid trust
Rule 57 of the Rules of Court as basis of its receipts. However, Respondents as
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
1
well as the sureties failed to pay the
aforesaid obligation.
16. In addition, the assurance to
pay in full the obligation is further
solidified by the warranty of
solvency provisions of the Credit
Agreement.
17. To allay whatever fear or
apprehension of herein plaintiff on
the commitment of Respondents to
honor its obligations, defendants-
sureties likewise executed a
"Continuing Suretyship Agreement.
19. Thus, in the light of the
representation made by
Respondents Commercial Press
Co, Inc., Alfredo Buriel Atienza,
Fredino Cheng Atienza and Sps.
Frederick Cheng Atienza and
Monica Cu Atienza that the loan
shall be paid in full on or before
maturity, coupled by the warranty of
solvency embodied in the Credit
Agreement as well as the execution
of the Continuing Suretyship
Agreement, the loan application
was eventually approved.
20. Needless to say that without
said representations and warranties,
including the Continuing Suretyship
Agreement, the plaintiff would not
have approved and granted the
credit facility to Respondents. It is
thus clear that Respondents,
Alfredo Buriel Atienza, Fredino
Cheng Atienza and Sps. Frederick
Cheng Atienza and Monica Cu
Atienza, misled SBC and employed
fraud in contracting said obligation.
21. Respondents, through its Vice
President Fredino Cheng Atienza,
likewise executed various Trust
Receipt Agreements with the
plaintiff.
Despite the above covenants,
defendants failed to pay nor return
the goods subject of the Trust
Receipt Agreements.
22. Knowing fully well that they are
already in default, Respondents
and defendants sureties submitted
a repayment proposal through their
letter dated January 23, 2013.
Through their lawyer, they likewise
requested the bank for a meeting to
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
discuss their proposal. However, as
it turned out, the proposed
repayment proposal for their loan
was only intended to delay legal
action against them. They failed to
meet with the Bank's representative
and neither did they submit
supporting documents to back up
their repayment proposal.
To support its allegation of fraud, Security Bank
attached the Affidavit of German Vincent Pulgar IV
(Pu/gar), the Manager of the Remedial Management
Division of the said bank. He detailed how
respondents represented to Security Bank that they
would pay the loans upon their maturity date. Pulgar
added that respondents signed the Credit Agreement
which contained the Warranty of Solvency and several
Trust Receipt Agreements in favor of Security Bank.
The said trust receipts were attached to the complaint
which stated that respondents were obligated to tum
over to Security Bank the proceeds of the sale of the
good or to return the goods. The several demand
letters sent by Security Bank to respondents, which
were unheeded, were likewise attached to the
complaint. These pieces of evidence were presented
by Security Bank during the hearing of the application
for the issuance of a writ of preliminary attachment in
the RTC.
After a judicious study of the records, the Court finds
that Security Bank was able to substantiate its
factual allegation of fraud, particularly, the violation
of the trust receipt agreements, to warrant the
issuance of the writ of preliminary attachment.
Compare
Philippine Bank of Communications v. Court of
Appeals
405 Phil. 272
The SC found no merit in the instant petitions.
To begin with, SC was in accord with respondent
Court of Appeals in CA-G.R. SP No. 32863 that the
Motion for Attachment filed by petitioner and its
supporting affidavit did not sufficiently establish the
grounds relied upon in applying for the writ of
preliminary attachment.
The Motion for Attachment of petitioner states that –
1. The instant case is based on the failure of
defendants as entrustee to pay or remit the proceeds
of the goods entrusted by plaintiff to defendant as
evidenced by the trust receipts (Annexes "B", "C" and
"D" of the complaint), nor to return the goods entrusted
thereto, in violation of their fiduciary duty as agent or
entrustee;
2
2. Under Section 13 of P.D. 115, as amended,
violation of the trust receipt law constitute(s) estafa
(fraud and/or deceit) punishable under Article 315 par.
1[b] of the Revised Penal Code;
3. On account of the foregoing, there exist(s) valid
ground for the issuance of a writ of preliminary
attachment under Section 1 of Rule 57 of the Revised
Rules of Court particularly under sub-paragraphs "b"
and "d", i.e. for embezzlement or fraudulent
misapplication or conversion of money (proceeds) or
property (goods entrusted) by an agent (entrustee) in
violation of his fiduciary duty as such, and against a
party who has been guilty of fraud in contracting or
incurring the debt or obligation;
4. The issuance of a writ of preliminary attachment is
likewise urgently necessary as there exist(s) no
sufficient security for the satisfaction of any judgment
that may be rendered against the defendants as the
latter appears to have disposed of their properties to
the detriment of the creditors like the herein plaintiff;
5. Herein plaintiff is willing to post a bond in the
amount fixed by this Honorable Court as a condition
to the issuance of a writ of preliminary attachment
against the properties of the defendants.
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:
xxx xxx xxx
(b) In an action for money or property embezzled or
fraudulently misapplied or converted to his us 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;
xxx xxx xxx
(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;
xxx xxx xxx
While the Motion refers to the transaction complained
of as involving 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
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
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, such as one ceremoniously quoting
from a pertinent rule.
The supporting Affidavit is even less instructive. It
lacks particulars upon which the court can discern
whether or not a writ of attachment should issue.
Petitioner cannot insist that its allegation that private
respondents failed to remit the proceeds of the sale of
the entrusted goods nor to return the same is sufficient
for attachment to issue. We note that petitioner
anchors its application upon Section 1(d), Rule 57.
This particular provision was adequately explained
in Liberty Insurance Corporation v. Court of
Appeals, as follows –
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. Fraud is a state of
mind and need not be proved by direct
evidence but may be inferred from the
circumstances attendant in each
case (Republic v. Gonzales, 13 SCRA 633).
SC found an absence of factual allegations as to
how the fraud alleged by petitioner was committed.
As correctly held by respondent Court of Appeals,
such fraudulent intent not to honor the admitted
obligation cannot be inferred from the debtor's inability
to pay or to comply with the obligations.
The Court of Appeals was correct, therefore, in its
finding in CA-G.R. SP No. 32863 that neither
petitioner's Motion or its supporting Affidavit provides
sufficient basis for the issuance of the writ of
attachment prayed for.
SC also agreed with respondent Court of Appeals in
CA-G.R. SP No. 32762 that the lower court should
have conducted a hearing and required private
petitioner to substantiate its allegations of fraud,
embezzlement and misappropriation.
3
To reiterate, petitioner's Motion for Attachment fails to
meet the standard set in D.P. Lub Oil Marketing
Center, Inc. v. Nicolas, in applications for attachment.
In the said case, this Court cautioned –
The petitioner's prayer for a writ of
preliminary attachment hinges on the
allegations in paragraph 16 of the
complaint and paragraph 4 of the affidavit
of Daniel Pe which are couched in general
terms devoid of particulars of time, persons
and places to support support such a
serious assertion that "defendants are
disposing of their properties in fraud of
creditors." There is thus the necessity of
giving to the private respondents an
opportunity to ventilate their side in a
hearing, in accordance with due process,
in order to determine the truthfulness of
the allegations. But no hearing was
afforded to the private respondents the writ
having been issued ex parte. A writ of
attachment can only be granted on
concrete and specific grounds and not
on general averments merely quoting
the words of the rules.
Time and again, we have held that the rules on the
issuance of a writ of attachment must be construed
strictly against the applicants. This stringency is
required because the remedy of attachment is harsh,
extraordinary and summary in nature. If all the
requisites for the granting of the writ are not present,
then the court which issues it acts in excess of its
jurisdiction.
Section 1 (a), (d), Rule 57 as ground for issuance of writ; Attachment dated August 5, 2005 were issued, and
failure to particularly state in the affidavit of merit the Wolfe's two vehicles, a gray Mercedes Benz with plate
circumstances constituting intent to defraud creditors and number XGJ 819 and a maroon Toyota Corolla with
to establish flight risk.
Watercraft Venture Corp., rep. By its Vice-Pres.,
rosario E. Ranoa v. Alfred Raymond Wolfe
G.R. No. 181721, September 9, 2015
Facts:
Sometime in June 1997, 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.
Sometime in June 2002, Wolfe pulled out his sailboat
from Watercraft's storage facilities after signing a
Boat Pull-Out Clearance dated June 29, 2002 where
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
he allegedly acknowledged the outstanding obligation
of 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.
Thus, on July 7, 2005, 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.
In his Answer, Wolfe... denied owing Watercraft the
amount of US$16,324.82 representing storage fees for
the sailboat. He explained that the sailboat was
purchased in February 1998 as part of an...
agreement between him and Watercraft1 s then
General Manager, Barry Bailey, and its President,
Ricky Sandoval, for it to be repaired and used as
training or fill-in project for the staff, and to be sold
later on. He added that pursuant to a central Listing
Agreement for the sale... of the sailboat, he was
appointed as agent, placed in possession thereof and
entitled to a ten percent (10%) sales commission. He
insisted that nowhere in the agreement was there a
stipulation that berthing and storage fees will be
charged during the entire time that the... sailboat was
in Watercraft's dockyard.
Fie pointed out that the complaint was an offshoot of
an illegal dismissal case he... filed against Watercraft
which had been decided in his favor by the Labor
Arbiter.
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 in the
Order dated July 15, 2005
Pursuant to the Order dated July 15, 2005, the Writ of
Attachment dated August 3, 2005 and the Notice of
plate number TFW 110,... were levied upon.
On August 12, 2005, Wolfe's accounts at the Bank of
the Philippine Islands were also garnished.
On November 8, 2005, Wolfe filed a Motion to
Discharge the Writ of Attachment, arguing that
Watercraft failed to show the existence of fraud and
that the mere failure to pay or perform an obligation
does not amount to fraud. Me also claimed that he is
not a flight risk for the... following reasons: (1) contrary
to the claim that his Special Working Visa expired in
April 2005, his Special Subic Working Visa and Alien
Certificate of Registration are valid until April 25, 2007
and May 11, 2006, respectively; (2) he and his family
have been residing in the Philippines since 1997; (3)
he is an existing stockholder and officer of Wolfe
Marine Corporation which is registered with the
Securities and Exchange Commission, and a
consultant of "Sudeco/Ayala" projects in Subic, a
member of the Multipartite Committee for the new
port... development in Subic, and the Subic Chamber
4
of Commerce; and (4) he intends to finish prosecuting
his pending labor case against Watercraft.
In an Order dated March 20, 2006, the RTC denied
Wolfe's Motion to Discharge Writ of Attachment and
Motion for Preliminary Hearing for lack of merit.
Wolfe filed a petition for certiorari before the CA. The
CA granted Wolfe's petition in a Decision dated
September 2007. The CA ruled that the act of issuing
the writ of preliminary attachment ex-parte constitutes
grave abuse of discretion on the part of the RTC
In the instant case, the Affidavit of Merit executed by
Rosario E. Rañoa, Watercraft's Vice-President, failed
to show fraudulent intent on the part of Wolfe to
defraud the company. It merely enumerated the
circumstances tending to show the alleged possibility
of Wolfe's flight... from the country. And upon Wolfe's
filing of the Motion to Discharge the Writ, what the
respondent Judge should have done was to
determine, through a hearing, whether the allegations
of fraud were true.
As correctly noted by Wolfe, although Sec. 1 of Rule
57 allows a party to invoke fraud as a ground for the
issuance of a writ of attachment, the Rules require
that in all averments of fraud, the circumstances
constituting fraud must be stated with particularity,
pursuant to Rule 8, Section 5.
Wolfe's mere failure to pay the boat... storage fees
does not necessarily amount to fraud, absent any
showing that such failure was due to [insidious]
machinations and intent on his part to defraud
Watercraft of the amount due it.
As to the allegation that Wolfe is a flight risk, thereby
warranting the issuance of the writ, the same lacks
merit.
The circumstances... should have convinced the trial
court that Wolfe would not want to... leave the country
at will just because a suit for the collection of the
alleged unpaid boat storage fees has been filed
against him by Watercraft.
Neither should the fact that Wolfe's Special Working
Visa expired in April 2005 lead automatically to the
conclusion that he would leave the country. It is worth
noting that all visas issued by the government to
foreigners staying in the Philippines have expiration
periods.
These visas, however, may be renewed, subject to
the requirements of the law. In Wolfe's case, he
indeed renewed his visa.
Issues:
1. Whether or not the Ex-Parte issuance if the
Preliminary Attachment by the trial Court in favor of
the petitioner is valid.
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
2. Whether or not the allegations in the affidavit of
merit concerning fraud are sufficient to warrant the
issuance of a Preliminary Writ of Attachment by the
Trial Court in favor of the petitioner.
Ruling:
The petition lacks merit.
The Court agrees with the CA that Watercraft failed to
state with particularity the circumstances constituting
fraud, as required by Section 5,Rule 8 of the Rules of
Court, and that Wolfe's mere... failure to pay the boat
storage fees does not necessarily amount to fraud,
absent any showing that such failure was due to
insidious machinations and intent on his part to
defraud Watercraft of the amount due it.
In Liberty Insurance Corporation v. Court of Appeals,
the Court explained that to constitute a ground for
attachment in Section 1(d), Rule 57 of the Rules of
Court, it must be shown that the debtor in
contracting the debt or incurring the... obligation
intended to defraud the creditor. A debt is
fraudulently contracted if at the time of contracting it,
the debtor has a preconceived plan or intention not to
pay. "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."
Fraudulent intent is not a physical entity, but a
condition of the mind beyond the reach of the senses,
usually kept secret, very unlikely to be confessed, and
therefore, can only be proved by unguarded
expressions, conduct and circumstances. Thus, 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.
The particulars of such circumstances necessarily
include the time, persons, places and specific acts of
fraud committed. An affidavit which does not contain
concrete and specific grounds is inadequate to sustain
the issuance of such writ. In fact, mere... general
averments render the writ defective and the court that
ordered its issuance acted with grave abuse of
discretion amounting to excess of jurisdiction.
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:
5
 "16. 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 x... x."
It is not an allegation of essential facts constituting
Watercraft's causes of action, but a mere conclusion
of law.
With respect to Section 1 (a), Rule 57, the other
ground invoked by Watercraft for the issuance of the
writ of preliminary attachment, the Court finds no
compelling reason to depart from the CA's exhaustive
ruling to the effect that such writ is... unnecessary
because Wolfe is not a flight risk. In Watercraft’s
Affidavit of Merit, it stated:
18. Furthermore, lawful factual and legal
grounds exist which show that the Defendant
may have departed or is about to depart the
country to defraud his creditors thus
rendering it imperative that a Writ of Preliminary
Attachment be issued in favor of the Plaintiff in
the instant case.
19. The possibility of flight on the part of the
Defendant is heightened by the existence of the
following circumstances:
a. The Special Working Visa
issued in favor of the Defendant
expired in April 2005;
b. The Defendant is a
British national who may easily
leave the country at will;Ch
c. The Defendant has no
real properties and visible,
permanent business or
employment in the Philippines;
and
d. The house last known
to have been occupied by the
Defendant is merely being rented
by him.
20. All told, the Defendant is a very serious
flight risk which fact will certainly render for
naught the capacity of the Plaintiff to recover in
the instant case.
Meanwhile, Watercraft's reliance on Chuidian v.
Sandiganbayan is displaced. It is well settled that:...
when the preliminary attachment is issued upon a
ground which is at the same time the applicant's
cause of action... the defendant is not allowed to
file a motion to dissolve the attachment under
Section 13 of Rule 57 by offering to show the falsity
of the factual averments in the plaintiffs application
and affidavits on... which the writ was based - and
consequently that the writ based thereon had been
improperly or irregularly issued - the reason being
that the hearing on such a motion for dissolution
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
of the writ would be tantamount to a trial of the
merits of the action.
The foregoing rule is not applicable in this case
because when Wolfe filed a motion to dissolve the writ
of preliminary attachment, he did not offer to show the
falsity of the factual averments in Watercraft's
application and affidavit on which the writ was... based.
Instead, he sought the discharge of the writ on the
ground that Watercraft failed to particularly allege any
circumstance amounting to fraud. No trial on the
merits of the action at a mere hearing of such
motion will be had since only the sufficiency of the
factual... averments in the application and affidavit
of merit will be examined in order to find out whether
or not Wolfe was guilty of fraud in contracting the debt
or incurring the obligation upon which the action is
brought, or in the performance thereof.
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.
Application for damages arising from improper, irregularor
excessive attachment shall be governed by Sec. 20, Rule 57;
petitioner failed to comply with the requisites under Sec. 20
because Visayan Surety was not given due notice on the
application for damages before the finality of judgment;
Procedure to discharge writ of attachment under Sec. 12,
Rule 57; Under Sec. 17, Rule 57 in relation to Sec. 12, cash
deposit or counter-bond shall secure payment of any
judgment that attaching party may recover in the action;
FESICO cannot escape liability on its surety bond issued in
favor of petitioner; RTC acquired jurisdiction over
FESICO when it issued surety bond to Win Multi-rich and
posted before the RTC.
6
Excellent Quality Apparel, Inc. V. Visayan Surety
& Insurance Corp. And Far Eastern Surety &
Insurance, Co., Inc.
G. R. No. 212025, July 1, 2015
179 Phil. 201
Section 20 of Rule 57 contemplates one judgment for
damages against the principal and the surety in the
injunction, replevin, attachment and receivership
bonds. Since the judicial bondsman has no right to
demand the exhaustion of the property of the principal
debtor, there is no justification for entering separate
judgments against them. The claim for damages
against the surety should be made before entry of
judgment (Del Rosario vs. Nava, 95 Phil. 637).

In the Del Rosario case a judgment for damages was

rendered against the principal in an attachment bond
but there was no notice to the surety of the claim for
damages. That judgment became final. After the
execution against the principal was returned
unsatisfied, the claimant filed a motion praying that the
surety company be required to show cause why it
should not answer for the judgment against the
principal.

It was held that, while the prevailing party may apply

for an award of damages against the surety even after
the award has already been obtained against the
principal, nevertheless, in order that all awards for
damages may be included in the final judgment, the
application and notice to the surety must be made
before the judgment against the principal becomes
final and executory.

In another case, it was held that as the winning party

sought to hold the surety liable on its replevin bond
almost a year after the judgment of the Court of
Appeals became final, the trial court erred in enforcing
its judgment against the surety. "The surety may only
be held liable if, before judgment becomes final, an
order against the surety is entered after a hearing with
notice to the surety". The claim against the surety
should be included in the final judgment. It is not
sufficient that the surety be afforded an opportunity to
oppose the writ of execution.

After this Court's judgment dissolving a preliminary

injunction had become final and executory, it would be
too late to entertain in the trial court the defendant's
application for damages allegedly caused by the
injunction.c

The defendant in a replevin case cannot file

a separate action for damages due to the wrongful
issuance of the writ. He should have claimed the
damages as a counterclaim in the original replevin suit.

A final judgment for damages against the principal in a

replevin bond cannot be enforced against the surety
company which was not notified of the claim for
Section 20 covers application for damages also againstdamages and was not afforded a chance to be heard.c
improper preliminary injunction, receivership, replevin.
Where an injunction was dissolved and only attorney's
fees and costs were adjudged against the principal,
Malayan Insurance, Inc. V. Salas and the procedure for claiming damages against the
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
7
surety was not followed, no recourse could be had
against the injunction bond in case the writ of
execution against the principal was not satisfied.
Moreover, the attorney's fees and costs could be
recovered from the principal even without the filing of
the bond.c
Where after the dismissal of a petition for relief from
the judgment of a municipal court, the Court of First
Instance ordered ex parte the issuance of a writ of
execution against the petitioner's injunction bond, that
order is void because there was no formal claim for
damages and there was no hearing with notice to the
petitioner and his surety. The court should hold a
hearing.
If the case wherein the injunction was issued was
dismissed for failure to prosecute and no damages
were awarded to the defendant by reason of the
issuance of the injunction, it was error for the trial
court to issue a writ of execution against the surety
since there was no claim nor evidence of damages
suffered the defendant. The order of dismissal did not
include in final of damages.
the principal. It is necessary that the surety be notified
and that its liability be included in the final judgment
against the principal.c
The writ of execution issued against the counterbond
for the dissolution of an injunction is void if it was
issued without notice to the surety and after the
judgment on the merits had become executory. The
surety's liability should have been included in the final
judgment.
If the judgment awarding damages against the
principals in the counterbonds filed for the lifting of the
receivership was appealed to the Court of Appeals
and the plaintiff-appellee filed in the trial court (not in
the appellate court) his application for damages
against the sureties in the counterbonds, the trial
court cannot hear the said application after the
record is remanded to it because, by then, the
decision of the appellate court had become final and
the damages to be awarded against the sureties could
no longer be included in that judgment. The
application for damages against the sureties should
have been filed in the Court of Appeals.

The case of Vadil vs. De Venecia, 118 Phil. 1217,

involves a queer situation. Plaintiff corporation in that
case filed an action to recover a sum of money. It
asked for a writ of attachment. Before any attachment
could be issued, the defendant filed a counterbond.
But this bond provided that the defendant and his
sureties would pay "all damages that
the defendant (sic) may suffer by reason of" the
attachment. In other words, the defendant executed a
bond in favor of himself.

Judgment was rendered for the plaintiff. As the

execution was returned unsatisfied, the trial court on
plaintiff's motion ordered execution against
defendant's bond. It was held that the execution was
wrongfully issued.

However, where an injunction was issued in a forcible

entry case but on certiorari to the Court of First
Instance, the justice of the peace court was held to be
without jurisdiction to entertain the ejectment case, Alfredo Lim, Jr. V. Sps. Tito S. Lazaro and Carmen
that ejectment suit is not considered dismissed and it T. Lazaro
may still be regarded as pending in the justice of the
peace court for the purpose of allowing the G.R. No. 185734, July 3, 2013
defendant's claim for damages on the injunction bond
(Cruz vs. Manila Surety & Fidelity Co., 92 Phil. 699). FACTS:

Section 10 of Rule 60 makes section 20 of Rule 57

Petitioner Lim Jr filed a complaint for a sum of money
applicable not only to the replevin bond but also to
with a prayer for the issuance of a writ of preliminary
the redelivery bond posted by the defendant for the
attachment against the respondent Sps Lazaro. The
lifting of the order of seizure. The requisites for
RTC granted the writ of preliminary attachment
holding the surety liable on the replevin bond are also
application and upon the posting of the required bond
the requisites for holding the surety hable on the
issued the corresponding writ on October 14, 2005. 3
redelivery bond. So, if the surety on the redelivery
parcels of land owned by the respondent spouses
bond was not notified of the plaintiff's claim for
were levied upon.
damages, the surety cannot be held liable on its
redelivery bond for the damages adjudged against
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
8
The parties later entered into a Compromise
Agreement whereby Sps. Lazaro agreed to pay Lim,
Jr. the amount of P2,351,064.80 on an installment
basis, following a schedule of payments covering the
period from September 2006 until October 2013. The
RTC rendered a decision on the basis of the
compromise.
Sps. Lazaro then filed an Omnibus Motion, seeking to
lift the writ of preliminary attachment annotated on the
subject TCTs.
In granting the Motion, the RTC ruled that a writ of
preliminary attachment is a mere provisional or
ancillary remedy, resorted to by a litigant to protect
and preserve certain rights and interests pending final
judgment. Considering that the case had already
been considered closed and terminated by the
rendition of the decision based on the compromise
agreement, the writ of preliminary attachment should
be lifted and quashed.
ISSUE:
Whether or not the writ of preliminary attachment was
properly lifted.
HELD:
NO. By its nature, preliminary attachment, under
Rule 57 of the Rules of Court (Rule 57), is an
ancillary remedy applied for not for its own sake but
to enable the attaching party to realize upon the
relief sought and expected to be granted in the
main or principal action; it is a measure auxiliary or
incidental to the main action. As such, it is available
during its pendency which may be resorted to by a
litigant to preserve and protect certain rights and
interests during the interim, awaiting the ultimate
effects of a final judgment in the case. In addition,
attachment is also availed of in order to acquire
jurisdiction over the action by actual or constructive
seizure of the property in those instances where
personal or substituted service of summons on the
defendant cannot be effected.
In this relation, while the provisions of Rule 57 are
silent on the length of time within which an
attachment lien shall continue to subsist after the
rendition of a final judgment, jurisprudence dictates
that the said lien continues (1) until the debt is paid,
or (2) the sale is had under execution issued on
the judgment or (3) until the judgment is satisfied,
or (4) the attachment discharged or vacated in the
same manner provided by law.
Applying these principles, the Court finds that the
discharge of the writ of preliminary attachment
against the properties of Sps. Lazaro was improper.
Records indicate that while the parties have entered
into a compromise agreement which had already
been approved by the RTC in its January 5, 2007
Amended Decision, the obligations thereunder have
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
yet to be fully complied with – particularly, the
payment of the total compromise amount of
P2,351,064.80. Hence, given that the foregoing debt
remains unpaid, the attachment of Sps. Lazaro’s
properties should have continued to subsist.
In the earlier case of Chemphil Export & Import
Corporation v. CA, the Court ruled that a writ of
attachment is not extinguished by the execution of
a compromise agreement between the parties. In
that case the Court held thus:
x x x x
The case at bench admits of peculiar character in the
sense that it involves a compromise agreement.
Nonetheless, x x x. The parties to the compromise
agreement should not be deprived of the
protection provided by an attachment lien
especially in an instance where one reneges on his
obligations under the agreement, as in the case at
bench, where Antonio Garcia failed to hold up his own
end of the deal, so to speak.
xxxx
If we were to rule otherwise, we would in effect create
a back door by which a debtor can easily escape his
creditors. Consequently, we would be faced with an
anomalous situation where a debtor, in order to buy
time to dispose of his properties, would enter into a
compromise agreement he has no intention of
honoring in the first place. The purpose of the
provisional remedy of attachment would thus be lost. It
would become, in analogy, a declawed and toothless
tiger. (Emphasis and underscoring supplied; citations
omitted)
In fine, the Court holds that the writ of preliminary
attachment subject of this case should be restored
and its annotation revived in the subject TCTs, re-
vesting unto Lim, Jr. his preferential lien over the
properties covered by the same as it were before the
cancellation of the said writ. Lest it be misunderstood,
the lien or security obtained by an attachment even
before judgment, is in the nature of a vested interest
which affords specific security for the satisfaction of
the debt put in suit. Verily, the lifting of the attachment
lien would be tantamount to an abdication of Lim, Jr.’s
rights over Sps. Lazaro’s properties which the Court,
absent any justifiable ground therefor, cannot allow.
The trial court in the exercise of its equity jurisdiction may
validly order the deposit of the Php 10-M down payment in
court to prevent unjust enrichment and to ensure
restitution.
David Reytes (Substituted by Victoria R. Fabella)
v. Jose Lim, et. al.
G.R. No. 134241, August 11, 2003
FACTS:
9
Petitioner David Reyes filed a complaint for
annulment of contract and damages against
respondents. The complaint alleged that Reyes as
seller and Lim as buyer entered into a contract to sell
a parcel of land located along F.F. Harrison Street,
Pasay city with a monthly rental of Php 35,000.
The complaint cliamed that Reyes had informed
HArrison Lumber to vacate the proeprty before the
end of January 1995. Reyes also informed Keng and
Harrison Lumber that if they failed to vacate by March
8, 1995, he would hold them liable for the penalty of
Php 400,000 a month as provided in the COntract to
Sell. It was also alleged that Lim connived with
HArrison Lumber not to vacate the proeprty until the
Php 400,000 monthly penalty would have
accumulated and equaled the unpaid purchase price
of Php 18,000,000.
Keng and HArrison Lumber denied that they connived
with Lim to defraud Reyes, and that Reyes approved
their request for an extension of time to vacate the
proeprty due to their difficulty in finding a new location
for their business. Harrison Lumber claimed that it
had already started transferring some of its
merchandise to its new business location in Malabon.
Lim filed his Answer stating that he was ready and
willing to pay the balance of the purchase price. Lim
requested a meeting with Reyes through the latter’s
daughter on the signing of the Deed of Absolute Sale
and the payment of the balance, but Reyes kept
postponing their meeting. Reyes offered to return the
Php 10-M down payment to Lim because Reyes was
having problems in removing the lessee from the
property. Lim rejected 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 denied conniving
with Keng and Harrison Lumber to defraud Reyes.
Reyes filed a Motion for Leave to file Amended
Complaint due to supervening facts. These included
the filing by Lim of a complaint for estafa against
Reyes as well as an action for specific performance
and nullification of sale and title plus damages before
another trial court. The trail court granted the motion.
In his Amended Answer, 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.
Lim requested in open court that Reyes be ordered to
deposit the Php 10-M down payment with the cashier
of the RTC of Parañaque. The trial court granted this
motion,
Reyes filed a Motion to Set Aside the Order on the
ground that the Order practically granted the reliefs
Lim prayed for in his Amended Answer. The trial court
denied Reyes’ motion and his Motion for
Reconsideration. In the same order, the trial court
directed Reyes to deposit the Php 10-M down
payment with the Clerk of Court.
Reyes filed a Petition for Certiorari with the CA and
prayed that the orders of the trial court be set aside
for having been issued with grave abuse of discretion
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
amounting to lack of jurisdiction. But the CA dismissed
the petition for lack of merit. Hence, this petition for
review.
ISSUES:
1. Whether the Court of Appeals erred in holding
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.
2. Whether the Court of Appeals erred in finding the
trial court could issue the questioned Orders on
grounds of equity when there is an applicable law
on the matter, that is, Rules 57 to 61 of the 1997
Rules on Civil Procedure.
RULING:
Reyes contentions are without merit.
Reyes contentions:
1. Deposit is not among the provisional remedies
enumerated in the 1997 Rules of Civil Procedure.
2. The enumeration in the Rules is exclusive. Not one
of the provisional remedies in Rules 57 to 61applies to
this case.
3. A court cannot apply equity and require deposit if
the law already prescribes the specific provisional
remedies which do not include deposit.
4. Invokes the principle that equity is "applied only in
the absence of, and never against, statutory law or x x
x judicial rules of procedure."
5. The provisional remedies do not include deposit is a
matter of dura lex sed lex.
SC:
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."
10
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 jurisdiction in this case is to
prevent unjust enrichment and to ensure
restitution. Equity jurisdiction aims 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.
Where the State gives its consent to be sued by private
parties either by general or special law, it may limit
claimant’s action “only up to the completion of proceedings
anterior to the stage of execution.” Government funds and
properties may not be seized under writs of execution or
garnishment to satisfy such judgments. Disbursements of
public funds must be covered by the corresponding
appropriations as required by law.
The Municipality of Hagonoy, Bulacan, etc. V.
Hon. Simeon P. Dumdum, in his capacity as the
Pres. Judge of RTC, Branch 7, Cebu City, et. al.
G.R. No. 168289, March 22, 2010
FACTS:
The case stems from a Complaint filed by herein
private respondent Emily Rose Go Ko Lim Chao
against herein petitioners, the Municipality of
Hagonoy, Bulacan and its chief executive, Felix V.
Ople (Ople) for collection of a sum of money and
damages.
Respondent, doing business as KD Surplus and as
such engaged in buying and selling surplus trucks,
heavy equipment, machinery, spare parts and related
supplies, was contacted by petitioner Ople.
Respondent had entered into an agreement with
petitioner municipality through Ople for the delivery of
motor vehicles, which supposedly were needed to
carry out certain developmental undertakings in the
municipality.
However, despite having made several deliveries,
Ople allegedly did not heed respondent’s claim for
payment. As of the filing of the complaint, the total
obligation of petitioner had already totaled
₱10,026,060.13 exclusive of penalties and damages.
Thus, respondent prayed for full payment of the said
amount, with interest at not less than 2% per month,
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
plus ₱500,000.00 as damages for business losses,
₱500,000.00 as exemplary damages, attorney’s fees
of ₱100,000.00 and the costs of the suit.
The trial court granted the respondent’s prayer for a
writ of preliminary attachment conditioned upon the
posting of a bond equivalent to the amount of the
claim and issued the Writ of Preliminary
Attachment directing the sheriff "to attach the estate,
real and personal properties" of petitioners. The CA
affirmed.
Petitioners filed a Motion to Dissolve and/or Discharge
the Writ of Preliminary Attachment Already
Issued, invoking immunity of the state from suit,
unenforceability of the contract, and failure to
substantiate the allegation of fraud.
RULING (in line with syllabus lang):
In addressing the question of whether there is a valid
reason to deny petitioners’ motion to discharge the
writ of preliminary attachment.
The general rule spelled out in Section 3, Article XVI
of the Constitution is that the state and its political
subdivisions may not be sued without their consent.
Otherwise put, they are open to suit but only when
they consent to it. Consent is implied when the
government enters into a business contract, as it then
descends to the level of the other contracting party; or
it may be embodied in a general or special law such
as that found in Book I, Title I, Chapter 2, Section 22
of the Local Government Code of 1991, which vests
local government units with certain corporate powers
—one of them is the power to sue and be sued.
Be that as it may, a difference lies between suability
and liability. Where the suability of the state is
conceded and by which liability is ascertained
judicially, the state is at liberty to determine for itself
whether to satisfy the judgment or not. Execution may
not issue upon such judgment, because statutes
waiving non-suability do not authorize the seizure
of property to satisfy judgments recovered from
the action. These statutes only convey an implication
that the legislature will recognize such judgment as
final and make provisions for its full satisfaction. Thus,
where consent to be sued is given by general or
special law, the implication thereof is limited only to
the resultant verdict on the action before
execution of the judgment.
Traders Royal Bank v. Intermediate Appellate
Court, citing Commissioner of Public Highways v. San
Diego, is instructive on this point. In that case which
involved a suit on a contract entered into by an entity
supervised by the Office of the President, the Court
held that while the said entity opened itself to suit by
entering into the subject contract with a private entity;
11
still, the trial court was in error in ordering the
garnishment of its funds, which were public in
nature and, hence, beyond the reach of
garnishment and attachment proceedings.
Accordingly, the Court ordered that the writ of
preliminary attachment issued in that case be lifted,
and that the parties be allowed to prove their
respective claims at the trial on the merits. There, the
Court highlighted the reason for the rule, to wit:
The universal rule that where the State
gives its consent to be sued by private parties
either by general or special law, it may limit
claimant’s action "only up to the completion
of proceedings anterior to the stage of
execution" and that the power of the Courts
ends when the judgment is rendered, since
government funds and properties may not be
seized under writs of execution or garnishment
to satisfy such judgments, is based on obvious
considerations of public policy.
Disbursements of public funds must be
covered by the corresponding
appropriations as required by law. The
functions and public services rendered by
the State cannot be allowed to be paralyzed
or disrupted by the diversion of public funds
from their legitimate and specific objects. x x
x too, is the sense in which the term is commonly
With this in mind, the Court holds that the writ of
preliminary attachment must be dissolved and,
indeed, it must not have been issued in the very
first place. While there is merit in private
respondent’s position that she, by affidavit, was able
to substantiate the allegation of fraud in the same
way that the fraud attributable to petitioners was
sufficiently alleged in the complaint and, hence, the
issuance of the writ would have been justified. Still,
the writ of attachment in this case would only prove to
be useless and unnecessary under the premises,
since the property of the municipality may not, in
the event that respondent’s claim is validated, be
subjected to writs of execution and garnishment
— Executive
unless, ofOrders
course,Re-Sequestration,
there has been aFreezing and Takeover
corresponding
appropriation provided by law.
Baseco v. PCGG
150 SCRA 181
DOCTRINE from syllabus:
7. Provisional Remedies Prescribed by Law
To answer this need, the law has prescribed three (3)
provisional remedies. These are: (1) sequestration; (2)
freeze orders; and (3) provisional takeover.
Sequestration and freezing are remedies
applicable generally to unearthed instances of
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
"ill-gotten wealth." The remedy of "provisional
takeover" is peculiar to cases where "business
enterprises and properties (were) taken over by
the government of the Marcos Administration or
by entities or persons close to former President
Marcos."
a. Sequestration
By the clear terms of the law, the power of the PCGG
to sequester property claimed to be "ill-gotten" means
to place or cause to be placed under its possession or
control said property, or any building or office wherein
any such property and any records pertaining thereto
may be found, including "business enterprises and
entities,"-for the purpose of preventing the
destruction, concealment or dissipation of, and
otherwise conserving and preserving, the same-
until it can be determined, through appropriate judicial
proceedings, whether the property was in truth will-
gotten," i.e., acquired through or as a result of
improper or illegal use of or the conversion of funds
belonging to the Government or any of its branches,
instrumentalities, enterprises, banks or financial
institutions, or by taking undue advantage of official
position, authority relationship, connection or influence,
resulting in unjust enrichment of the ostensible owner
and grave damage and prejudice to the State. And this,
understood in other jurisdictions.
b. "Freeze Order"
A "freeze order" prohibits the person having
possession or control of property alleged to constitute
"ill-gotten wealth" "from transferring, conveying,
encumbering or otherwise depleting or concealing
such property, or from assisting or taking part in
its transfer, encumbrance, concealment, or
dissipation." In other words, it commands the
possessor to hold the property and conserve it subject
to the orders and disposition of the authority decreeing
such freezing. In this sense, it is akin to a
garnishment by which the possessor or ostensible
owner of property is enjoined not to deliver, transfer,
or otherwise dispose of any effects or credits in his
possession or control, and thus becomes in a sense
an involuntary depositary thereof.
c. Provisional Takeover
In providing for the remedy of "provisional takeover,"
the law acknowledges the apparent distinction
between "ill gotten" "business enterprises and entities"
(going concerns, businesses in actual operation),
generally, as to which the remedy of sequestration
applies, it being necessarily inferred that the remedy
entails no interference, or the least possible
interference with the actual management and
operations thereof; and "business enterprises which
were taken over by the government government of the
Marcos Administration or by entities or persons close
12
to him," in particular, as to which a "provisional
takeover" is authorized, "in the public interest or to
prevent disposal or dissipation of the enterprises."
Such a "provisional takeover" imports something
more than sequestration or freezing, more than the
placing of the business under physical possession
and control, albeit without or with the least possible
interference with the management and carrying on of
the business itself. In a "provisional takeover," what
is taken into custody is not only the physical
assets of the business enterprise or entity, but
the business operation as well. It is in fine the
assumption of control not only over things, but
over operations or on- going activities. But, to
repeat, such a "provisional takeover" is allowed only
as regards "business enterprises * * taken over by the
government of the Marcos Administration or by
entities or persons close to former President Marcos."
The disputed properties were already under custodial legis remedies."
by virtue of a valid writ of sequestration issued by the
PCGG, when respondent judge issued the assailed writ of In BASECO v. PCGG, 150 SCRA 181, 182 (1987),
attachment in favor of private respondent. The writ of the sequestration is defined as the process, which may
PCGG could not be interfered with by the RTC because the be employed as a conservatory writ whenever the
PCGG is a coordinate and co-equal body.
Republic v. Saludares
March 9, 2000
RULING:
Moving on to the ancillary issue of whether or not the
provisional remedy of attachment issued by the trial
court in favor of the private respondent is valid.
It bears recalling that when the Sandiganbayan
ordered that the writ of sequestration be lifted, PCGG
filed a special civil action for certiorari to contest that
order. The Supreme Court ruled in favor of PCGG
when it granted the latter’s petition to declare the
lifting of the writ of sequestration by the
Sandiganbayan null and void. The Court’s en banc
resolution pertinently reads:
"WHEREFORE, judgment is hereby
rendered:chanrob1es virtual 1aw library
A. NULLIFYING AND SETTING ASIDE:chanrob1es
virtual 1aw library
x x x
17) in G.R. No. 109314, its impugned Resolutions 10
dated November 29, 1991 and February 16, 1993."
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
In the same en banc Resolution, the Court
observed:ed
"II. Provisional Remedies in Pursuance of Policy
Special adjective tools or devices were provided by
the Revolutionary Government for the recovery of that
"ill-gotten wealth." These took the form of provisional
remedies akin to preliminary attachment (Rule 57),
writ of seizure of personalty (Rule 60) and receivership
(Rule 59). They were (a) sequestration and (b) freeze
orders, as regards "unearthed instance of ‘ill-gotten
wealth’; and (c) provisional takeover, as regards
‘business enterprises and properties taken over by the
government of the Marcos Administration or by entities
or persons close to former President Marcos."
A. Executive Orders Re Sequestration, Freezing and
Takeover
These special remedies were prescribed and defined
in Executive Orders Numbered 1 and 2, promulgated
by President Corazon C. Aquino in March, 1986. Their
validity and propriety were sustained by this Court on
May 27, 1987, against claims that they were
unconstitutional as being bills of attainder, or as
violative of the right against self-incrimination and the
guaranty against unreasonable searches and seizures.
In the same case, the Court also set the parameters
for and restrictions on the proper exercise of the
right of the property is involved, to preserve,
pending litigation, specific property subject to
conflicting claims of ownership or liens and
privileges.
The Court also noted the relationship between
attachment and receivership, on one hand, and
sequestration, freeze order and provisional takeover
on the other. The latter (sequestration, freeze order
and provisional takeover on the other) are
ancillary remedies in prosecuting the ill-gotten
wealth of the previous Marcos regime. The Court
observed that sequestration, freezing and provisional
takeover are akin to the provisional remedy of
preliminary attachment or receivership.
By an order of attachment, a sheriff seizes property of
a defendant in a civil suit so that it may stand as
security for the satisfaction of any judgment that may
be obtained, and not disposed of, or dissipated, or lost
intentionally, or otherwise, pending the action. When a
writ of attachment has been levied on real property or
any interest therein belonging to the judgment debtor,
the levy creates a lien which nothing can destroy
but its dissolution. This well-settled rule is
likewise applicable to a writ of sequestration.
Attachment is in the nature of a proceeding in rem. It
is against a particular property of a debtor. The
attaching creditor thereby acquires a specific lien upon
the attached property which ripens into a judgment
against the res when the order of sale is made. Such a
13
proceeding is in effect a finding that the property
attached is an indebted thing and results in its virtual
condemnation to pay for the owner’s debt. The law
does not provide the length of time during which an
attachment lien shall continue after the rendition of
the judgment, and it must therefore continue until the
debt is paid, or sale is had under execution issued in
the judgment, or until the judgment is satisfied, or the
statement discharged or vacated in some manner
provided by law.
In our view, the disputed properties of LBLC were
already under custodia legis by virtue of a valid
writ of sequestration issued by the PCGG on April
2, 1986, when respondent Judge Saludares issued
the assailed writ of attachment in favor of private
respondent Hung Ming Kuk. At that time the writ of
sequestration issued by PCGG against LBLC was
subsisting. Said writ of the PCGG could not be
interfered with by the RTC of Lianga, because the
PCGG is a coordinate and co-equal body. The PCGG
had acquired by operation of law the right of
redemption over the property until after the final
determination of the case or until its dissolution.
The instant petition is partially GRANTED. The
default Order issued by the public respondent dated
March 19, 1993, is AFFIRMED, but should be held in
abeyance until the sequestration case involving LBLC
before the Sandiganbayan is determined. The Order
of Attachment issued by the public respondent is
declared NULL and VOID.
Objections to the impropriety of the writ of attachment may execution of the subject properties was conducted
no longer be invoked once a counterbond is filed.
Mindanao Savings Loan Association, Inc. V. Court
of Appeals
172 SCRA 480
FACTS:
The First Iligan Savings and Loan Association, Inc.
(FISLAI) and the Davao Savings and Loan
Association, Inc. (DSLAI) are entities duly registered
with the Securities and Exchange Commission (SEC)
and are primarily engaged in the business of granting
loans and receiving deposits from the general public,
and treated as banks. FISLAI and DSLAI entered into
a merger, with DSLAI as the surviving corporation.
The articles of merger were not registered with the
SEC due to incomplete documentation. On 1985,
DSLAI changed its corporate name to MSLAI by way
of an amendment to Article 1 of its Articles of
Incorporation, but the amendment was approved by
the SEC only on, 1987.
Meanwhile, the Board of Directors of FISLAI passed
and approved Board Resolution No. 86-002,
assigning its assets in favor of DSLAI which in turn
assumed the former’s liabilities. The business of
MSLAI, however, failed. Hence, the Monetary Board
of the Central Bank of the Philippines ordered its
closure and placed it under receivership. The
Monetary Board found that MSLAI’s financial
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
condition was one of insolvency, and for it to continue
in business would involve probable loss to its
depositors and creditors. The Monetary Board ordered
the liquidation of MSLAI, with PDIC as its liquidator.
Prior to the closure of MSLAI, Uy filed with the RC, an
action for collection of sum of money against FISLAI.
The RTC issued a summary decision in favor of Uy,
directing defendants therein (which included FISLAI)
to pay the former. The decision was modified by the
CA by further ordering the third-party defendant
therein to reimburse the payments that would be made
by the defendants. The decision became final and
executory on. A writ of execution was thereafter
issued.
Sheriff Bantuas levied on six (6) parcels of land owned
by FISLAI located in Cagayan de Oro City, and the
notice of sale was subsequently published. Willkom
was the highest bidder. A certificate of sale was
issued and eventually registered with the Register of
Deeds of Cagayan de Oro City. Upon the expiration of
the redemption period, sheriff Bantuas issued the
sheriff’s definite deed of sale. New certificates of title
covering the subject properties were issued in favor of
Willkom. Willkom, in turn, sold one of the subject
parcels of land to Go.
Then, MSLAI, represented by PDIC, filed before the
RTC a complaint for Annulment of Sheriff’s Sale,
Cancellation of Title and Reconveyance of Properties
against respondents. MSLAI alleged that the sale on
without notice to it and PDIC; that PDIC only came to
know about the sale for the first time in February 1995
while discharging its mandate of liquidating MSLAI’s
assets; that the execution of the RTC decision was
illegal and contrary to law and jurisprudence, not only
because PDIC was not notified of the execution sale,
but also because the assets of an institution placed
under receivership or liquidation such as MSLAI
should be deemed in custodia legis and should be
exempt from any order of garnishment, levy,
attachment, or execution.
In answer, respondents averred that MSLAI had no
cause of action against them or the right to recover the
subject properties because MSLAI is a separate and
distinct entity from FISLAI. They further contended
that the "unofficial merger" between FISLAI and DSLAI
(now MSLAI) did not take effect considering that the
merging companies did not comply with the formalities
and procedure for merger or consolidation as
prescribed by the Corporation Code of the Philippines.
Finally, they claimed that FISLAI is still a SEC
registered corporation and could not have been
absorbed by petitioner.
The RTC issued a resolution dismissing the case for
lack of jurisdiction. The RTC declared that it could not
annul the decision, having been rendered by a court of
coordinate jurisdiction.15
14
On appeal, MSLAI failed to obtain a favorable
decision when the CA affirmed the RTC resolution.
ISSUES:
To resolve this petition, we must address two basic
questions:
(1) Was the merger between FISLAI and DSLAI (now
MSLAI) valid and effective; and
(2) Was there novation of the obligation by
substituting the person of the debtor?
The SC answered both questions in the negative and
denied the petition.
RULING:
Ordinarily, in the merger of two or more existing
corporations, one of the corporations survives and
continues the combined business, while the rest are
dissolved and all their rights, properties, and liabilities
are acquired by the surviving corporation. Although
there is a dissolution of the absorbed or merged
corporations, there is no winding up of their affairs
or liquidation of their assets because the surviving
corporation automatically acquires all their rights,
privileges, and powers, as well as their liabilities.
The merger, however, does not become effective
upon the mere agreement of the constituent
corporations. Since a merger or consolidation
involves fundamental changes in the corporation, as
well as in the rights of stockholders and creditors,
there must be an express provision of law authorizing
them.
The steps necessary to accomplish a merger or
consolidation, as provided for in Sections 76,
77, 78, and 79 of the Corporation Code, are:
(1) The board of each corporation draws
up a plan of merger or consolidation. Such plan
must include any amendment, if necessary, to
the articles of incorporation of the surviving
corporation, or in case of consolidation, all the
statements required in the articles of
incorporation of a corporation.
(2) Submission of plan to stockholders or
members of each corporation for approval. A
meeting must be called and at least two (2)
weeks’ notice must be sent to all stockholders or
members, personally or by registered mail. A
summary of the plan must be attached to the
notice. Vote of two-thirds of the members or of
stockholders representing two-thirds of the
outstanding capital stock will be needed.
Appraisal rights, when proper, must be
respected.
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
(3) Execution of the formal agreement,
referred to as the articles of merger o[r]
consolidation, by the corporate officers of each
constituent corporation. These take the place of
the articles of incorporation of the consolidated
corporation, or amend the articles of
incorporation of the surviving corporation.
(4) Submission of said articles of merger or
consolidation to the SEC for approval.
(5) If necessary, the SEC shall set a
hearing, notifying all corporations concerned at
least two weeks before.
(6) Issuance of certificate of merger or
consolidation.
Clearly, the merger shall only be effective upon the
issuance of a certificate of merger by the SEC, subject
to its prior determination that the merger is not
inconsistent with the Corporation Code or existing
laws. Where a party to the merger is a special
corporation governed by its own charter, the Code
particularly mandates that a favorable
recommendation of the appropriate government
agency should first be obtained.
In this case, it is undisputed that the articles of merger
between FISLAI and DSLAI were not registered with
the SEC due to incomplete documentation.
Consequently, the SEC did not issue the required
certificate of merger. Even if it is true that the
Monetary Board of the Central Bank of the Philippines
recognized such merger, the fact remains that no
certificate was issued by the SEC. Such merger is
still incomplete without the certification.
The issuance of the certificate of merger is crucial
because not only does it bear out SEC’s approval
but it also marks the moment when the
consequences of a merger take place. By operation
of law, upon the effectivity of the merger, the absorbed
corporation ceases to exist but its rights and
properties, as well as liabilities, shall be taken and
deemed transferred to and vested in the surviving
corporation.
The same rule applies to consolidation which
becomes effective not upon mere agreement of the
members but only upon issuance of the certificate of
consolidation by the SEC. When the SEC, upon
processing and examining the articles of consolidation,
is satisfied that the consolidation of the corporations is
not inconsistent with the provisions of the Corporation
Code and existing laws, it issues a certificate of
consolidation which makes the reorganization
official. The new consolidated corporation comes into
existence and the constituent corporations are
dissolved and cease to exist.
15
There being no merger between FISLAI and DSLAI
(now MSLAI), for third parties such as respondents,
the two corporations shall not be considered as
one but two separate corporations. A corporation
is an artificial being created by operation of law. It
possesses the right of succession and such powers,
attributes, and properties expressly authorized by law
or incident to its existence. It has a personality
separate and distinct from the persons composing it,
as well as from any other legal entity to which it may
be related. Being separate entities, the property of
one cannot be considered the property of the other.
Thus, in the instant case, as far as third parties are
concerned, the assets of FISLAI remain as its
assets and cannot be considered as belonging to
DSLAI and MSLAI, notwithstanding the Deed of
Assignment wherein FISLAI assigned its assets and
properties to DSLAI, and the latter assumed all the
liabilities of the former. As provided in Article 1625 of
the Civil Code, "an assignment of credit, right or
action shall produce no effect as against third
persons, unless it appears in a public instrument, or
the instrument is recorded in the Registry of Property
in case the assignment involves real property." The
certificates of title of the subject properties were
clean and contained no annotation of the fact of
assignment. Respondents cannot, therefore, be
faulted for enforcing their claim against FISLAI on the
properties registered under its name. Accordingly,
MSLAI, as the successor-in-interest of DSLAI, has no
legal standing to annul the execution sale over the
properties of FISLAI. With more reason can it not
cause the cancellation of the title to the subject
properties of Willkom and Go.
Petitioner cannot also anchor its right to annul the
execution sale on the principle of
novation.1avvphi1 While it is true that DSLAI (now
MSLAI) assumed all the liabilities of FISLAI, such
assumption did not result in novation as would
release the latter from liability, thereby exempting its
properties from execution. Novation is the
extinguishment of an obligation by the substitution or
change of the obligation by a subsequent one which
extinguishes or modifies the first, either by changing
the object or principal conditions, by substituting
another in place of the debtor, or by subrogating a
third person in the rights of the creditor.
It is a rule that novation by substitution of debtor must
always be made with the consent of the
creditor. Article 1293 of the Civil Code is explicit, thus:
Art. 1293. Novation which consists in
substituting a new debtor in the place of the
original one, may be made even without the
knowledge or against the will of the latter, but
not without the consent of the creditor. Payment
by the new debtor gives him the rights
mentioned in Articles 1236 and 1237.
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
In this case, there was no showing that Uy, the
creditor, gave her consent to the agreement that
DSLAI (now MSLAI) would assume the liabilities of
FISLAI. Such agreement cannot prejudice Uy. Thus,
the assets that FISLAI transferred to DSLAI remained
subject to execution to satisfy the judgment claim of
Uy against FISLAI. The subsequent sale of the
properties by Uy to Willkom, and of one of the
properties by Willkom to Go, cannot, therefore, be
questioned by MSLAI.
The consent of the creditor to a novation by change of
debtor is as indispensable as the creditor’s consent in
conventional subrogation in order that a novation shall
legally take place.Since novation implies a waiver of
the right which the creditor had before the novation,
such waiver must be express.
The court issuing a writ of execution is to enforce its
authority only over properties of the judgment debtor.
Should a third party appear to claim the property levied
upon by the sheriff, the procedure laid down by the Rules is
that such claim should be the subject of a separate and
independent action.
Escovilla v. Court of Appeals
179 SCRA 108
RULING:
There is no dispute that the private respondents are
indeed the actual owners of the subject properties by
virtue of a sale in their favor by Del Rosario and Sons
Logging Enterprises, Inc. Such finding is based on
evidence on record which this Court does not find any
reason to disturb. Moreover, there is nothing in the
petition nor in the petitioners' memorandum to suggest
that the properties sold in execution of the judgment in
Civil Case No. 13699 belonged to the judgment-debtor
in that case. This petition merely attacks the
procedure adopted by the respondents.
In such a case, the point to be borne in mind is that
the power of the court in the execution of
judgments extends only over properties
unquestionably belonging to the judgment debtor.
As the Court stated in Bayer Philippines, Inc. v. Agana,
(63 SCRA 355 [1975] ):
... In Herald Publishing, supra, We intimated
that the levy by the sheriff of a property by virtue
of a writ of attachment may be considered as
made under authority of the court only when-the
property levied upon unquestionably belongs
to the defendant. If he attaches properties other
than those of the defendant, he acts beyond the
limits of his authority. Otherwise stated, the
court issuing a writ of execution is supposed to
enforce its authority only over properties of the
judgment debtor, and should a third party
appear to claim the property levied upon by
16
 the sheriff, the procedure laid down by the
Rules is that such claim should be the subject
of a separate and independent action. (at p.
366)
This is precisely the very nature of the proceedings in
the action for prohibition with preliminary injunction
filed by the private respondents with the Regional
Trial Court of Butuan City which is sanctioned by
Section 17, Rule 39 of the Rules of Court. As held
in Rivera vs. Florendo (144 SCRA 643 [1986] ):
Another fundamental rule which appears to
have been violated in the case at bar is that no
advantage may be given to one to the
prejudice of the other, a court should not by
means of a preliminary injunction transfer the
property in litigation from the possession of one
party to another where the legal title is in dispute
and the party having possession asserts
ownership thereto. (Rudolfo V. Alonso, 76 Phil.
225, February 28, 1946). Similarly, the primary
purpose of an injunction is to preserve the status
quo, that is the last actual peaceable
uncontested status which preceded the
controversy. (at pp. 659660)
In the instant case, the private respondents properly
instituted Special Civil Case No. 454 which is a
separate and independent action to vindicate their
claims over the subject properties. If at all the
petitioners had any doubts as to the veracity of the
third-party claims, then the separate action
instituted was the proper forum to ventilate such
protestations. The action for prohibition was filed on
February 5, 1985. On February 18, 1985 the
respondent Sheriffs admitted having seized the
disputed properties but assured the court that they
will not remove them from its jurisdiction nor sell or
dispose of the same.
From the start, the petitioners were cognizant of the
third-party claims filed with the sheriff and the
separate action instituted against them so they were
fully aware of their liabilities to these third-party
claimants who were not even parties to the case
sought to be executed.
The rule is clear. If a third party claim is filed, the
sheriff is not bound to proceed with the levy of
the property unless he is given by the judgment
creditor an indemnity bond against the claim. The
judgment creditor, by giving an indemnity bond,
assumes the direction and control of the sheriffs
action; so far as it might constitute a trespass and
thus he becomes, to that extent, the principal and the
sheriff, his agent. This makes him responsible for the
continuance of the wrongful possession and for the
sale and conversion of the goods and for all real
damages which the owner might sustain.
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
Thus, in this case, even if the auction sale has been
conducted and the sheriffs certificate of sale was
issued in favor of the winning bidder, the liability of
the judgment creditor and consequently, the
purchaser to the real owners of the properties
levied and executed is not extinguished. We also
take note of the trial court's finding that Sheriffs
Escovilla and Meris misled the Davao court as to the
ownership of the properties they had seized knowing
quite well that the petitioners in Special Civil Case No.
454, the prohibition case, were the actual owners of
the property. This brings us to the other point raised in
this petition.
Corollary to the main issue raised is the argument that
the Regional Trial Court of Butuan City cannot restrain
or interfere with the orders issued by the Regional
Trial Court of Davao City which is its coordinate and
co-equal authority on matters properly brought before
it. This issue has been clearly settled in the case
of Traders Royal Bank v. Intermediate Appellate Court,
(133 SCRA 141 [1984] ) where the Court held:
Generally, the rule that no court has the
power to interfere by injunction with the
judgments or decrees of a concurrent or
coordinate jurisdiction having equal power to
grant the injunctive relief sought by injunction, is
applied in cases where no third-party claimant is
involved, in order to prevent one court from
nullifying the judgment or process of another
court of the same rank or category, a power
which devolves upon the proper appellate court
(Arabay Inc. v. Salvadro, 82 SCRA 138). The
purpose of the rule is to avoid conflict of power
between different courts of coordinate
jurisdiction and to bring about a harmonious
and smooth functioning of their proceedings.
Where the defendant seasonably files his application for
damages in the Court of Appeals(CA), it was not his fault
that the damages claimed by him against the surety were
not included in the judgment of the CA affirming the trial
court’s award of damages payable by the principal in the
replevin bond. Exception to the rule that claim must be filed
in the same case.
Malayan Insurance v. Salas
90 SCRA 252
RULING:
We hold that the trial court has jurisdiction to pass
upon Fernando's application for the recovery of
damages on the surety's replevin bond. The reason is
that Fernando seasonably filed his application for
damages in the Court of Appeals. It was not his fault
that the damages claimed by him against the
surety were not included in the judgment of the
Court of Appeals affirming the trial court's award
of damages to Fernando payable by the principal in
17
the replevin bond. The peculiar factual situation of
this case makes it an exception to the settled rule that
the surety's liability for damages should be included in
the final judgment to prevent duplicity of suits or
proceedings.
As may be gathered from section 20 of Rule 57, the
application for damages against the surety must be
filed (with notice to the surety) in the Court of First
Instance before the trial or before appeal is perfected
or before the judgment becomes executory.
If an appeal is taken, the application must be filed in
the appellate court but always before the judgment of
that court becomes executory so that the award may
be included in its judgment).c
But it is not always mandatory that the appellate court
should include in its judgment the award of damages
against the surety. Thus, it was held that where the
application for damages against the surety is
seasonably made in the appellate court, "the latter
must either (1) proceed to hear and decide the
application or (2) refer "it" to the trial court and
allow it to hear and decide the same."
In the instant case Fernando in 1974 made a timely
claim in the Court of Appeals for an award of
damages against Malayan Insurance Co., Inc.
enforceable against its replevin bond. The surety was
notified of that application. It registered an opposition
to the claim. The Court of Appeals did not resolve the
claim immediately but in its 1977 decision it directed
the trial court to hear that claim.
Obviously, the lower court has no choice but to
implement that directive which is the law of the
case.w library
However, the trial court's implementation of that
directive was incorrect. It set the claim for hearing but
the surety assailed its jurisdiction and did not
consider itself bound by the mandate of the appellate
court. The merits of the claim for damages were not
threshed out at the hearing because the surety stood
pat on its contention that the trial court has no
jurisdiction to allow the claim in view of the finality of
the decision of the Court of Appeals.
This Court has held that, if the surety was not given
notice when the claim for damages against
the principal in the replevin bond was heard, then as
a matter of procedural due process the surety is
entitled to be heard when the judgment for
damages against the principal is sought to be
enforced against the surety's replevin bond.
The hearing will be summary and will be limited to
such new defense, not previously set up by the
principal, as the surety may allege and offer to prove.
The oral proof of damages already adduced by the
claimant may be reproduced without the necessity of
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
retaking the testimony, but the surety should be given
an opportunity to cross-examine the witness or
witnesses if it so desires." That procedure would
forestall the perpetration of fraud or collusion against
the surety.
Inasmuch as in this case appellant Malayan Insurance
Co., Inc. was not given the summary hearing during
which it could contest the reality or reasonableness of
Fernando's claim for damages, we have to set aside
the trial court's order awarding damages against it
and, in the interest of justice, give it another
opportunity to be heard on the merits of
Fernando's claim for damages.
Note that under the second paragraph of section 20,
Rule 57 of the present Rules of Court, the damages
suffered during the pendency of an appeal in a case
where the writs of attachment, injunction and replevin
or an order of receivership were issued should be
claimed in the appellate court.
There is an old ruling that the sureties in an injunction
bond are bound by a judgment for damages against
their principal even if the sureties were not heard at
the time the claim for damages was tried. The reason
for that ruling is that the sureties in an injunction bond
"assume such a connection with the suit that they are
included by a judgment in it in a suit at law upon the
bond, so far as the same issues are involved; and that,
upon the entry of a judgment against the principal,
their liability is absolute" (Florentino vs. Domadag, 45
O.G. 4937, 81 Phil. 882).
Also, it was held that if damages were awarded
against the principal in a replevin bond without notice
to the surety, that final judgment may be enforced
against the surety after it has been given an
opportunity to be heard as to the reality or
reasonableness of the alleged damages. In such a
case, the trial court must order the surety to show
cause why the bond should not answer for the
judgment for damages. The hearing is summary and
the surety may cross-examine the witnesses
presented by the defendant (Visayan Surety &
Insurance Corporation vs. Pascual, 85 Phil 779).
Insofar as those rulings in the Florentino and Visayan
Surety cases allowed a claim for damages against the
surety to be ventilated in a separate proceeding or
after the finality of the judgment for damages against
the principal in the bond, those rulings
were jettisoned and abandoned in several
subsequent cases because they are contrary to the
explicit provision of section 20 of Rule 59, now
Rule 57, that the judgment for damages against the
surety should be included in the final judgment to
avoid additional proceedings (Cruz vs. Manila
Surety & Fidelity Co., Inc., 92 Phil. 699; Japco vs. City
of Manila, 48 Phil. 851, 855).
18
The damages are recoverable on the theory that an
actionable wrong was committed by the losing party.
The recovery is limited to the amount of the bond.
The usual procedure is to file an application for
damages with due notice to the other party and his
sureties. The other part may answer the application.
Upon the issues thus being Joined, the matter will be
tried and determined. A court order declaring the
bond confiscated without adhering to that procedure
is void.library
The claim for damages against the surety should be
made it notice to the surety and before the
judgment against the principal becomes
executory. The liability of the surety should be
included in the final judgment. That remedy is
exclusive. If not assailed of, the surety is released.
Therefore, the prevailing settled rule is that a court
has no jurisdiction to entertain any proceeding
seeking to hold a surety upon its bond if such surety
has not been given notice the claim for damages
against the principal and the judgment holding
the latter liable has already become executory.
If the judgment awarding damages against the
principal in a bond for the lifting of a preliminary
injunction had already become executory, that claim
cannot be pressed against the surety by setting it for
hearing with notice to the surety. The failure to notify
the surety of the claim for damages against the
principal relieves the surety from any liability on his
bond.
To entertain the belated claim against the surety after
the judgment for damages against the principal has
become executory would result in the alteration of
that judgment. That should not be done.
Moreover, the damages claimed by the defendant
should be pleaded as a compulsory counterclaim in
his answer. Hence, a separate action to claim those
damages is unwarranted.
So, if plaintiff's claim for damages resulting from the
wrongful lifting of the writ of preliminary injunction was
awarded in the main decision without notice to the
surety and the decision had become executory, the
failure to notify the surety on time relieves him
from liability under the bond.
The surety may be held liable only if before the
judgment for damages against the principal becomes
executory, an order is entered against him after a
hearing with notice to him. After the judgment
becomes executory, it is too late to file such claim for
damages with notice to the surety.
Where the Court of Appeals dismissed a mandamus
action originally filed in that court and dissolved the
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
preliminary injunction which it had issued and after
entry of judgment was made the record was remanded
to the trial court, it was error for the Court of Appeals
to allow the respondent in that case to file a claim for
damages against the principal and surety in the
injunction bond. The claim should have been filed
before the judgment of dismissal became final
(Luzon Surety Co. Inc. vs. Court of Appeals, 108 Phil.
157).
It should be underscored that in the instant case,
although the surety's liability was not included in
the final judgment, which became executory,
nevertheless, there was a timely application for
damages in the Court of Appeals which in its
decision ordered the trial court to hear defendant-
appellee Fernando's claim for damages against
the surety. That feature of the case removes it from
the coverage of the rule that the surety should be
heard before the judgment becomes executory and
that his liability should be included in the final
judgment.
Party against whom an attachment was issued may apply
for damages under the rule, it is not necessary that the
judgment is favorable to him.
Zaragosa v. Fidelino
163 SCRA 443
RULING:
SEC. 10. Judgment to include recovery against
sureties. — The amount, if any, to be awarded to
either party upon any bond filed by the other in
accordance with the provisions of this rule, shag be
claimed, ascertained, and granted under the same
procedure as prescribed in section 20 of Rule 57.
And Section 20, Rule 57 reads as follows:
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
It would seem at first blush that Section 20, Rule 57
above quoted is not relevant. Its title and first sentence
speak [1] of an illegal attachment, and [2] of a
judgment "in favor of the party against whom (said
illegal) attachment was issued." In the case at bar, the
19
writ of delivery was not illegal; and the judgment was
for, not against, the party in whose favor the writ
of delivery was issued. In other words, it would
appear that for Section 20, Rule 57 to apply to the
instant action," the judgment should have been "in
favor of" defendant Fidelino (the party "against
whom" the writ of delivery was issued). This however
was not the case. The judgment was in fact
against, NOT in favor of Fidelino.
It thus sums indeed that the first sentence of Section
20 precludes recovery of damages by a party against
whom an attachment is issued and enforced if the
judgment be adverse to him. This is not however
correct. Although a party be adjudged liable to
another, if it be established that the attachment
issued at the latter's instance was wrongful and the
former had suffered injury thereby, recovery for
damages may be had by the party thus prejudiced
by the wrongful attachment, even if the judgment
be adverse to him. Slight reflection will show the
validity of this proposition. For it is entirely possible
for a plaintiff to have a meritorious cause of action
against a defendant but have no proper ground for a
preliminary attachment. In such a case, if the (1)
plaintiff nevertheless applies for and somehow
succeeds in obtaining an attachment, (2) but is
subsequently declared by final judgment as not
entitled thereto, and the (3) defendant shows that he
has suffered damages by reason of the attachment,
there can be no gainsaying that indemnification is
justly due the latter. So has this Court already had
occasion to rule, in Baron v. David, 51 Phil. 1,
and Javellana v. D.O. Plaza Enterprises, 32 SCRA
26].
Actual or compensatory damages may be recovered for dismissed for lack of legal basis will not justify an
wrongful though not malicious attachment. Attorney’s fees award of moral damages to the prevailing party.
may be recovered under Article 2208 of the Civil Code.
Lazatin v. Twano and Castro, 112 Phil. 773
reiterated in MC Engineering v. court of Appeals,
380 SCRA 116
MC ENGINEERING, INC. v. THE COURT OF
APPEALS, GERENT BUILDERS, INC. and
STRONGHOLD INSURANCE CO., INC.
HELD:
The Court finds for petitioner MC Engineering,
Inc.(Based on syllabus these are the only issues
to consider):
Third Issue: Award of actual, moral and exemplary
damages.
We come to the issue of whether or not petitioner is
entitled to its counterclaim for actual, moral and
exemplary damages due to the wrongful issuance of
the writ of attachment. The Court of Appeals held
that:
“It is literally true that you can succeed best and quickest by helping others to succeed”.
". . . In the instant suit, appellee failed to establish bad
faith and malice against plaintiff-appellant when it
sought to attach the former’s properties. The lower
court itself in its decision did not make any express
pronouncement as to the existence of malice and bad
faith in the procurement of the writ of attachment.
Instead the trial court concluded that ‘as a result of
such attachment, the defendant’s business operation
and credit standing have been prejudiced and
damaged’ and ‘the defendant is entitled to recover
moral and exemplary damages by reason of the
irregular issuance of the writ of attachment.’ Such
conclusions do not immediately warrant the award
of moral damages. It is true that the attachment was
wrongful. But in the absence of proof of bad faith or
malice, plaintiff-appellant’s application cannot be said
to be harassing or oppressing but merely an act
done to assert and protect a legal right.
The grant of exemplary damages is likewise
improper. Since no moral damages is due to appellee
and it appearing that no actual damages was awarded
by the lower court, the grant of exemplary damages
has no leg on which to stand (Art. 2234, Civil Code).
If at all, the wrongful issuance of the writ of
attachment, as ruled out by this Court, merely resulted
in actual damages to appellee. But such is not
automatically awarded for it is subject to proof.
Appellee’s claim that it lost major contracts after a
credit investigation revealed that its accounts were
garnished is a bare allegation not merely unsupported
by solid evidence but is also speculative. The alleged
$35,000.00 remittance refused by the Hongkong and
Shanghai Bank does not inspire belief for failure of
appellee to produce documentary proof to buttress its
claim."
We agree with the Court of Appeals that the trial court
erred in awarding moral and exemplary damages to
petitioner. The mere fact that a complaint is
Even the dismissal of a "clearly unfounded civil action
or proceeding" will not entitle the winning party to
moral damages. For moral damages to be awarded,
the case must fall within the instances enumerated in
Article 2219, or under Article 2220, of the Civil Code.
Moreover, in the absence of fraud, malice, wanton
recklessness or oppressiveness, exemplary
damages cannot be awarded.
Fourth and Fifth Issues: Award of Attorney’s Fees
The last matter to be determined is the
reasonableness of the attorney’s fees awarded to both
parties. The Court of Appeals held that:
". . ., the award of attorney’s fees must vary.
Considering the wrongful attachment made against
appellee’s accounts, it is understandable that it
incurred attorney’s fees in procuring the discharge of
the attachment for which reason the amount of
P5,000.00 may reasonably be awarded. However,
inasmuch as plaintiff-appellant was constrained to file
this suit to protect its legal interest, and pursuant to
the terms of the sub-contract, appellee is adjudged to
pay appellant 25% of P632,590.13, the amount
- Napoleon Hill
20
involved in this suit."
The award must be modified. The Court of Appeals
was partly correct in holding that the award of
attorney’s fees to petitioner is justified considering
that petitioner was constrained to engage the
services of counsel at an agreed attorney’s fees. To
secure the lifting of the writ of attachment, petitioner’s
counsel, Atty. Mario Aguinaldo testified that he was
paid P1,250.00 on January 1985, P10,000.00 on April
10, 1985 and another P10,000.00 on June 30, 1985
for his legal services, totaling P21,500.00.
Taken from Article 2208 (11), Civil Code of the
Philippines; Lazatin v. Twaño, 2 SCRA 842 (1961):
(NOTE: Yes, this is the part related to Lazatin v.
Twaño)
Accordingly, the award of P5,000.00 is hereby
increased to P21,250.00. We deem it just and
equitable that attorney’s fees be awarded when a
party is compelled to incur expenses to lift a
wrongfully issued writ of attachment.
MFII filed a Complaint “To Compel Execution of
Contract and for Performance and Damages, With
Prayer for Writ of Preliminary Injunction and Ex-
Parte Temporary Restraining Order” in the Regional
Trial Court (RTC) of Pasig City which was granted.
CBC sought reconsideration, but denied by the trial
court. Subsequently, CBC filed a “Motion to Dissolve
Injunction Order” but was denied because it is a
mere belated second motion for reconsideration, and
failed to substantiate it.
Aggrieved, CBC filed a Petition for Certiorari in the
Court of Appeals. Based on the RTC issued the
order with grave abuse of discretion amounting to
lack of jurisdiction. Which was granted based on
non-existence requisites for the grant of an injunctive
writ. SBI and MFI filed for a motion for
reconsideration, but denied.
Here, SBI and MFII basically claim a right to have
their mortgaged properties shielded from a possible
foreclosure by CBC on the ground that the interest
rate and penalty charges imposed by CBC on the
loans availed of by SBI are iniquitous and
unconscionable.

RULE 58- Preliminary Injunction

1. Solid Builders, Inc. and Medina Foods

Industries, Inc. v. China Banking Corporation,
G.R. 179665, April 3, 2013

FACTS: China Banking Corporation (CBC) granted

several loans to Solid Builders, Inc. (SBI). To
secure the loans, Medina Foods Industries, Inc.
(MFII) executed in CBC’s favor several surety
agreements and contracts of real estate mortgage
over parcels of land in the Loyola Grand Villas in
Quezon City and New Cubao Central in Cainta,
Rizal.

Subsequently, SBI proposed to CBC a scheme

through which SBI would sell the mortgaged
properties and share the proceeds with CBC on a
50-50 basis until such time that the whole obligation
would be fully paid. SBI also proposed that there be
partial releases of the certificates of title of the
mortgaged properties without the burden of
updating interests on all loans.

In a letter dated March 20, 2000 addressed to CBC,

SBI requested the restructuring of its loans, a
reduction of interests and penalties.

In response, CBC sent SBI a letter dated April 17,

2000 stating that the loans had been completely
restructured effective March 1, 1999 when SBI
signed a new promissory note. Since interest
payment has not been made, no re-pricing is
possible.

Subsequently, in a letter dated September 18,

2000, CBC demanded SBI to settle its outstanding
account within ten days from receipt thereof.

On October 5, 2000, claiming that the interests,

penalties and charges imposed by CBC were
iniquitous and unconscionable and to enjoin CBC
from initiating foreclosure proceedings, SBI and
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
21
ISSUE: Whether or not plaintiffs have the right to
ask for an injunctive writ?

HELD: NO. This Court has recently reiterated the

general principles in issuing a writ of preliminary
injunction in Palm Tree Estates, Inc. v. Philippine
National Bank:

At times referred to as the “Strong Arm of Equity,”

we have consistently ruled that there is no power
the exercise of which is more delicate and which
calls for greater circumspection than the issuance
of an injunction. It should only be extended in
cases of great injury where courts of law cannot
afford an adequate or commensurate remedy in
damages; “in cases of extreme urgency; where the
right is very clear; where considerations of relative
inconvenience bear strongly in complainant’s favor;
where there is a willful and unlawful invasion of
plaintiff’s right against his protest and
remonstrance, the injury being a continuing one,
and where the effect of the mandatory injunction is
rather to reestablish and maintain a preexisting
continuing relation between the parties, recently
and arbitrarily interrupted by the defendant, than to
establish a new relation.”

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 this connection,
a writ of preliminary injunction is issued to preserve
the status quo ante, upon the applicant’s showing
of two important requisite conditions, namely: (1)
the right to be protected exists prima facie, and (2)
the acts sought to be enjoined are violative of that
right. It must be proven that the violation sought to
be prevented would cause an irreparable injury.

The basis of the right claimed by SBI and MFII

remains to be controversial or disputable as there
is still a need to determine whether or not, upon
consideration of the various circumstances
surrounding the agreement of the parties, the
interest rates and penalty charges are
unconscionable. Therefore, such claimed right
cannot be considered clear, actual and subsisting.
In the absence of a clear legal right, the issuance
of the injunctive writ constitutes grave abuse of
discretion.

In addition, the default of SBI and MFII to pay the

mortgage indebtedness disqualifies them from
availing of the equitable relief that is the injunctive
writ. SBI’s default or failure to settle its obligation is
a breach of contractual obligation which tainted its
hands and disqualified it from availing of the
equitable remedy of preliminary injunction.

As SBI is not entitled to the issuance of a writ of

preliminary injunction, so is MFII. The accessory
follows the principal. The accessory obligation of
MFII as accommodation mortgagor and surety is
tied to SBI’s principal obligation to CBC and arises
only in the event of SBI’s default.
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
22
The En Banc Resolution in A.M. No. 99-10-05-0,
Re: Procedure in Extrajudicial or Judicial
Foreclosure of Real Estate Mortgages, further
stacks the odds against SBI and MFII. Issued on
February 20, 2007, or some two months before the
Court of Appeals promulgated its decision in this
case. It speaks of strict exceptions and conditions.
To reverse the decision of the Court of Appeals will
allow circumventing it. And prevent CBC from
foreclosing on the mortgaged properties based
simply on the allegation that the interest on the loan
is unconscionable. This Court will not permit such a
situation. What cannot be done directly cannot be
done indirectly.
2. Maria Gayacao v. The Hon. Executive
Secretary of the President of the Philippines, GR
No. L-21066
Direct appeal on points of law from an order of the
CFI dismissing the complaint of Maria A. Gayacao,
for lack of jurisdiction
Facts:
Maria Gayacao instituted an action with the CFI
court against the Executive Secretary, the Secretary
of Agriculture and Natural Resources, the Director
of Lands, and a private respondent, Felix Alcarmen,
charging that petitioner had acquired the right to
purchase residential Lots 55 and 56 through
Miscellaneous Sales Application (8558), received
by the Bureau of Lands.
Gayacao alleged that upon demand she paid the
installments then due, and the Bureau
recommended approval of her application.
Thereafter, Gayacao improved the lots, paid the
taxes thereon, and remained in possession
After World War II, respondent Alcarmen, a war
refugee, secured Gayacao's permission to
temporarily occupy part of the lots, but
subsequently also filed a Miscellaneous Sales
Application (V-8113).
The Director of Lands, gave due course to
Alcarmen's application and excluded Lot 55 from
her application, which action the respondent
secretaries on appeal affirmed and sustained, in
violation of section 81 of Commonwealth Act 141,
petitioner prayed as follows:
WHEREFORE, petitioner prays that
respondents be ordered to answer this
petition, and, after hearing, to order that
the decision of the respondent Director of
Lands, as concurred in with modification
by the respondent Secretary of Agriculture
and Natural Resources and the
respondent Executive Secretary, over Lot
No. 55 be annulled or amended so as to
grant the whole of the same
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
to your petitioner and not to the
respondent Felixberto Alcarmen;
Petitioner further prays for such other relief
or remedy as may be deemed just and
equitable under the premises."
The respondent public officials interposed a motion
to dismiss, claiming that the CFI of Basilan City
had no jurisdiction to entertain petitions for
writs of certiorari or mandamus, nor issue such
writs, against them because the administrative
orders and decisions complained of were
promulgated by officers holding office outside
the territorial jurisdiction of the Court invoking
Sec. 44(h) of the Judiciary Act and the SC rulings in
Acosta vs. Alvendia
CFI’s Decision: Dismissed the petition of Maria
Gayacao.
Issue:
Whether or not the CFI, where the petition was
lodged, did have the power to decide on the
administrative decision of the Director of Lands and
subsequently affirmed by the Secretary of
Agriculture and Executive Secretary
Held:
Yes. The doctrines invoked in support of the theory
of non-jurisdiction are inapplicable. There is no
cogent reason why this power of judicial review
should be confined to the courts of first instance of
the locality where the offices of respondents are
maintained, to the exclusion of the courts of first
instance in those localities where the plaintiffs
reside, and where the questioned decisions are
being enforced.
If the contested ruling of the court below is
sustained, the same would result not only in
hardship to litigants of limited means, practically
amounting to denial of access to the courts, but
would also unnecessarily encumber the Manila
courts whose dockets are already over-burdened.
While the petitioner herein also prayed that the land
authorities be ordered to reinstate her original
application, such remedy is purely a corollary to the
main relief sought; for, as the allegations now stand,
reversal of the questioned administrative decision
would necessarily lead to the same result.
The order of dismissal is reversed and set aside
and the records ordered remanded to the CFI for
further proceedings. No costs.
23
3.Federico Decano v. Romeo Edu, as Acting power of appointment, said respondent had neither
Commissioner of Land Transportation and the power of removal.
Cipriano Posadas, Acting Registrar, Land
Transportation Commission, Dagupan City Issue:
Agency, GR No. L-30070, August 29, 1980 May a writ of preliminary injunction under Rule 58 in
a case against a national official be filed exclusively
Note: no CA or IAC in this case. in the CFI of Manila? Is it possible to file it
anywhere else?
Facts:
Ruling:
On September 12, 1962, the then Undersecretary of A preliminary injunction may be granted by the court
Public Works and Communications issued to where the action or proceeding is pending (Rule 58,
Federico Decano, herein petitioner-appellee, a Sec 2).
temporary appointment to the position of janitor in
the Motor Vehicles Office, Dagupan City Agency,
Here the sole point in issue is whether the
with compensation at the rate of P1,440.00 per decision of the respondent public officers was
annum. The appointment having been approved by legally correct or not and without going into the
the Commissioner of Civil Service, the said merits of the case, we see no cogent reason why
appointee assumed office on September 10, 1962 this power of judicial review should be confined to
and he served therein for almost four years, or until the courts of first instance of the locality where the
April 29, 1966 when herein respondent-appellant offices of respondents are maintained, to the
Cipriano Posadas, as Acting Registrar, Land exclusion of the courts of first instance in those
Transportation Commission, Dagupan City, localities where the plaintiffs reside, and where the
received a telegram from respondent-appellant questioned decisions are being enforced.
Romeo F. Edu, in his then capacity as Acting
Commissioner of Land Transportation Commission
It is easy to see that if the contested ruling of the
(LTC), terminating his (Decano's) services effective
court below is sustained, the same would result not
as of the close of business on that day.
only in hardship to litigants of limited means,
practically amounting to denial of access to the
Case:
courts, but would also unnecessarily encumber the
Manila courts whose dockets are already over —
Shortly thereafter, the aggrieved petitioner-appellee
burdened. Actually, since Ortua vs. Singson, 59
filed before the Court of First Instance of
Phil. 440, the power of provincial courts of first
Pangasinan a petition for "Mandamus and
instance to review administrative decisions of
Injunction" claiming that the aforementioned officials
national officials has been consistently recognized.
of the LTC acted without power and in excess of
authority in removing him from the service, and
While the petitioner herein also prayed that the land
therefore praying of the court to declare as null and
authorities be ordered to reinstate her original
void the order for his removal, to declare him
application, such remedy is purely a corollary to the
entitled to the position, to compel his reinstatement
main relief sought; for, as the allegations now stand,
and payment of his regular salary, and to enjoin,
reversal' of the questioned administrative decision
preliminary, and then permanently, respondents
would necessarily lead to the same result.
from disturbing, molesting or otherwise ousting him
from his position as janitor.
Admin law ruling:
As prayed for, a writ of preliminary injunction was
The Court further affirms the decision of said court
issued by the trial court at the commencement of
adjudging the order of removal from office as null
the proceedings commanding respondents "to
and void for having been issued by said respondent
desist and refrain from disturbing, molesting or
who was not the appointing authority and had no
otherwise ousting the petitioner from his position as
authority to remove, since under the applicable law,
janitor in the Land Transportation Commission,
the power to remove petitioner was vested in the
Dagupan City Agency, and to pay the petitioner his
department head as the appointing authority.
corresponding salary from the date of notice of said
preliminary injunction, until further orders from the
Civ pro ruling:
Court."
The statement "to the best of my knowledge are
CFI:
true and correct" referring to the allegations in the
After trial, while agreeing with respondent Edu that
petition does not mean mere "knowledge,
petitioner's appointment as janitor was temporary
information and belief." It constitutes substantial
and therefore the latter could be ousted from his
compliance with the requirement of section 6 of
position at any time with or without cause, the lower
Rule 7, as held in Madrigal vs. Rodas. 12 At any
court nevertheless declared in its judgment of
rate, this petty technicality deserves scant
October 29, 1968 that petitioner's removal was null
consideration where the question at issue is one
and void upon the ground that under the law,
purely of law and there is no need of delving into
respondent Commissioner of Land Transportation
the veracity of the allegations in the petition, which
was not the appointing authority insofar as the
are not disputed at all by respondents. As we have
position of petitioner and an other minor positions in
held time and again, imperfections of form and
his office were concerned; and thus lacking the
technicalities of procedure are to be disregarded
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
24
except where substantial rights would otherwise be
prejudiced.

“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
25
4.DAGUPAN ELECTRIC CORP VS
PANO. GR L-49510 (1980)
FACTS:
DECORP is a domestic corporation with a principal
office in Quezon City, although its generating plant
is located in Pangasinan. MC Adore is also a
domestic corporation with office in Cubao, Quezon
City.
MC Adore owns and operates the MC Adore Int’l
Palace Hotel at Dagupan City. MC Adore entered
into a contract for power service with DECORP.
DECORP rendered full power services.
MC Adore Int’l Palace Hotel failed to pay its
September and October 1978 bills to Dagupan
Electric Corp. Due to this, DECORP served a
Notice of Disconnection that unless payment is
made within the usual period of 48 hours, the
disconnection service will be made. Indeed,
DECORP disconnected the electrical services of
MC Adore.
6 Dec ’78: MC Adore filed a complaint for damages
with writ of preliminary mandatory injunction against
DECORP in CFI Rizal. On the same day, Judge
issued an ex parte order for a preliminary injunction,
commanding DECORP as well as its agents in
Dagupan City to "restore immediately not later than
5-M p.m., December 7, 1978, the electrical power of
the MC Adore International Palace Hotel and
resume the electrical supply of and the electrical
services and facilities to said hotel to enable it to
operate it fully, under pain of contempt”.
8 Dec: MC Adore also moved that its "cash bond in
the sum of P50k represented by Check No. 12100
of the BPI payable to the clerk of court" be
substituted by a surety bond.
For failure of DECORP and its agents in Dagupan
City to comply with the aforesaid preliminary
mandatory injunction, MC Adore filed a petition to
declare DECORP and its corporate officers in
contempt of court, also on the same day.
The judge issued an order, stating: “DECORP’s
corporate officers, except Atty. Leonardo Baro may
be held in custody until the order is complied, as the
Court finds no valid justification for this
contumacious disobedience. Defendant Corporation
has its head offices in Quezon City, and although
the plant is in Dagupan City, the plant can only act
upon orders of the Quezon City head office.”
11 Dec: On the hearing for preliminary mandatory
injunction, DECORP appeared and moved for
reconsideration of the orders for want of jurisdiction
or GAD.
19 Dec: MR was denied. Judge ordered the
enforcement of the preliminary mandatory
injunction.
The Court issued a resolution temporarily
restraining DECORP from enforcing or continuing to
enforce the orders of 6 and 12 Dec ’78 .
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
21 Mar ’79: MC Adore manifested that it had filed a
counterbond of P225k.
12 May: DECORP filed an urgent supplemental
motion reiterating their prayer that they be allowed
to redisconnect the electric power from the hotel of
MC Adore on the ground that MC Adore had failed
and refused to pay its electric power consumption
based on the actual meter readings as directed by
the Court. Granted.
MC Adore filed an urgent motion to hold in
abeyance the compliance with the resolution on the
ground that the current monthly bills being
presented by DECORP to MC Adore are the result
of readings taken from the electric meter which was
tampered and asked that it be allowed to continue
depositing the regular payment in the amount of
P35k per month with the court until such time that
the issue on the tampered meter and questionable
bins shall have been finally resolved. Granted.
DECORP’s contention: CFI Rizal at Quezon City
has no jurisdiction over the case because the act of
disconnecting the power to the hotel of the MC
Adore Finance and Investment, Inc. took place in
Dagupan City, outside the Province of Rizal and
Quezon City.
MC Adore’s contention: The act of disconnection
was the result of an order issued by DECORP from
its business office in Quezon City.
ISSUE:
WON Judge Paño acted with GAD in issuing the
writ of preliminary injunction ordering DECORP to
restore the connection of the electric power of MC
Adore in Dagupan City
HELD:
No. Court of First Instance of Rizal at Quezon City
has jurisdiction. DECORP has its principal office in
Quezon City where the business of the corporation
is managed by the Board of Directors. Decisions of
the said corporation are made in Quezon City. The
employees of DECORP in Dagupan City merely
carry out the orders issued by the officials of said
corporation in Quezon City. Hence the acts sought
to be restrained are being committed in Quezon
City.
Judge Pano did not commit GAD in issuing the
questioned order directing DECORP to restore the
connection of the electric power to the hotel owned
by MC Adore. The record shows that Judge Pano
conducted hearings and gave the parties full
opportunity to present their evidence before issuing
the orders sought to be set aside.
Judge Pano’s findings: On the question of
jurisdiction, both parties are residents of Quezon
City, as they have their principal offices in Quezon
City. The disconnection order was initiated and had
its life and source in Quezon City. The mandatory
injunction is addressed to the corporation in Quezon
City. The Dagupan plant acts only upon order of its
officers in Quezon City. In the cases where the
Supreme Court ruled that the district court has
26
improperly issued the writ, no private right of
ownership was involved. Rather they

“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
27
involved licenses or privileges granted by
government agencies with offices located beyond
the district court's territorial jurisdiction. Where
private rights are involved, the Supreme Court had
upheld the issuance of the writ. Here we have a
case of the interference of plaintiff's property rights,
with situs in Quezon City by a corporation with situs
in Quezon City. The exercise of will by defendant
had its origin in Quezon City. This Court can grant
relief when that exercise of will causes irreparable
prejudice.
It is clear from the foregoing order that Judge Pano
did not act capriciously or whimsically in ordering
DECORP to restore the connection of the electric
power to the hotel in Dagupan City of the MC Adore
Finance and Investment, Inc.
The various incidents regarding the correctness of
the monthly bill presented by DECORP to the MC
Adore can be better heard and resolved by Judge
Pano. The correct amounts due prior to June 1979
shall be resolved by Judge Pano after hearing the
parties.
5.A.M. No. RTJ-07-2063, June 26,
2009, Republic v. Judge Ramon S.
Caguioa, Presiding Judge of RTC,
Olongapo City, Branch 74
Judges are not common men and women, whose
errors men and women forgive and time forgets.
Judges sit as the embodiment of the people’s sense
of justice, their last recourse where all other
institutions have failed. — Dela Cruz v. Pascua,
A.M. No. RTJ-99-1461, June 26, 2001, 359 SCRA
569.
Facts:
On November 29, 2006, the Republic of the
Philippines, represented by the Office of the
Solicitor General (OSG), charged Judge Ramon S.
Caguioa with gross ignorance of the law, manifest
partiality and conduct prejudicial to the best interest
of the service. The complaint concerned Civil Case
No. 102-0-05 entitled "Indigo Distribution Corp. Inc.,
et al. vs. The Hon. Secretary of Finance, et al." for
Declaratory Relief with Prayer for Temporary
Restraining Order (TRO) and Preliminary
Mandatory Injunction, pending before the sala of
respondent judge.
Complainant Republic is the respondent in said civil
case. Petitioners therein, Indigo Distribution Corp.
Inc., et al. (Indigo, et al.), sought to nullify the
implementation of Section 6 of Republic Act (R.A.)
No. 9334 as unconstitutional. Section 6 provides:
Indigo, et al., petitioners in Civil Case No. 102-0-05,
are importers and traders licensed to operate inside
the Subic Bay Freeport Zone. however, they are
now subject to sin
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
taxes or excise taxes on tobacco and alcohol
products.
On February 7, 2005, SBMA issued a Memorandum
directing the departments concerned to require
importers in the Subic Bay Freeport Zone to pay the
corresponding duties and taxes on their
importations of cigars, cigarettes, liquors and wines
before they are cleared and released from the
freeport.
Unwilling to pay said duties and taxes, petitioners
brought before the RTC of Olongapo City a special
civil action, Civil Case No. 102-0-05 for declaratory
relief to have certain provisions of R.A. No. 9334
declared as unconstitutional. Alleging great and
irreparable loss and injury, they prayed for the
issuance of a writ of preliminary injunction and/or
Temporary Restraining Order (TRO) and
preliminary mandatory injunction to enjoin the
directives issued by the Republic, as represented
by the Secretary of Finance, Commissioner of the
Bureau of Internal Revenue, Commissioner of
Customs, Collector of Customs of the Port of Subic,
and the Administrator of the SBMA.
In an Order dated May 4, 2005, respondent judge
granted the application for the issuance of a writ of
preliminary injunction. He enjoined the public
respondents from implementing the pertinent
provisions of R.A. No. 9344. He also approved the
injunction bond amounting to one million pesos for
all petitioners. On May 11, 2005, he issued a writ of
preliminary injunction. The Republic filed a petition
for certiorari and prohibition before this Court to
annul said Order and the Writ of Preliminary
Injunction that was issued pursuant to such Order.
During the pendency of the petition, respondent
judge granted various ex parte motions for
intervention of different corporations claiming to be
similarly situated with petitioner Indigo, and allowed
them to ride on the one million peso injunctive bond
previously posted by Indigo.
Complainant Republic alleged that it was denied
due process because it did not receive a copy of the
motions for intervention, which were favorably acted
upon by respondent judge. It was only on August
11, 2005, December 1, 2005, and July 19, 2006
when complainant learned of respondent’s
issuances in favor of the movants.lawphil
Respondent judge immediately implemented said
orders despite the subsequent motions for
reconsideration filed by complainant on September
7, 2005, December 16, 2005, and August 14, 2006.
It took respondent judge
28
almost 10 months to act on 1 out of the 3 motions
filed by the government. On July 17, 2006,
complainant received the Order dated July 5, 2006
issued by respondent judge denying its Motion for
Reconsideration dated September 7, 2005.
On September 15, 2006, complainant likewise
sought to nullify the August 11, 2005, December 1,
2005, and July 19, 2006 Orders of respondent
judge before this Court. The petition, docketed as
G.R. No. 174385, has not been resolved to date.
On July 31, 2007, this Court, upon the
recommendation of the Office of the Court
Administrator, considering the two other
administrative cases filed against respondent,
resolved to preventively suspend respondent judge
without pay, pending the resolution of said
administrative cases.
On October 9, 2007, we resolved to refer the
consolidated administrative cases to an Associate
Justice of the Court of Appeals for investigation,
report and recommendation.
On October 15, 2007, this Court declared the May
4, 2005 Order of respondent judge and the Writ of
Preliminary Injunction, subject of
G.R. No. 168584, null and void, to wit:
We held that respondent judge gravely abused his
discretion in ordering the issuance of the Writ of
Preliminary Injunction. For a writ of preliminary
injunction to issue, the applicant must establish that
(1) there is a clear and unmistakable right to be
protected;
(2) the invasion of the right sought to be protected is
material and substantial; and (3) there is an urgent
and paramount necessity for the writ to prevent
serious damage. We ruled that petitioners failed to
show a clear legal right that ought to be protected
by the court. The rights granted under the
Certificates of Registration and Tax Exemption of
petitioners are not absolute and unconditional as to
constitute rights in esse. These certificates granting
petitioners a "permit to operate" their respective
businesses are in the nature of licenses, which can
be revoked at any time. There is no vested right in a
tax exemption, more so when the latest expression
of legislative intent renders its continuance doubtful.
Being a mere statutory privilege, a tax exemption
may be modified or withdrawn at will by the granting
authority.
Further, the feared injurious effects of the imposition
of duties, charges and taxes on imported tobacco
and alcohol products on petitioners’ businesses
cannot possibly outweigh the dire consequences
that the non-collection of taxes would wreak on the
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
government. With regard to the injunction bond, we
also found respondent judge to have overstepped
his discretion when he arbitrarily fixed the injunction
bond of petitioners at only ₱1 million. Considering
the number of petitioner enterprises and the volume
of their businesses, the injunction bond is
undoubtedly not sufficient to answer for the
damages that the government was bound to suffer
as a consequence of the suspension of the
implementation of the assailed provisions of R.A.
No. 9334. Section 4(b), Rule 58 of the Rules of
Court, provides that a bond is executed in favor of
the party enjoined to answer for all damages that it
may sustain by reason of the injunction.
Nonetheless, we found lacking the requisite proof of
respondent judge’s alleged partiality; thus, we
found no ground to prohibit him from proceeding
with the case for declaratory relief.
FINDINGS of the INVESTIGATING JUSTICE
For A.M. No. RTJ-07-2063, the Investigating Justice
found respondent judge guilty of Gross Ignorance of
the Law and Conduct Prejudicial to the Best Interest
of the Service. However, on the charge of Manifest
Partiality, he concurred with the Decision of this
Court, dated October 15, 2007, in G.R. No. 168584,
which denied the Writ of Prohibition sought to be
issued against respondent judge. We ruled that
evidence of respondent judge’s alleged partiality
was insufficient.
Issue:
Whether or not the judge is administratively liable
for being guilty for gross ignorance of the law,
manifest partiality and conduct prejudicial to the
best interest of the service.
Ruling:
We adopt the findings of the Investigating Justice.
In A.M. No. RTJ-07-2063, respondent judge issued
a Writ of Preliminary Injunction, enjoining the
collection of taxes. Taxes are the lifeblood of the
government, and it is of public interest that the
9
collection of which should not be restrained.
Further, the
applicants for the Writ showed no clear and
unmistakable right that was material and substantial
as would warrant the issuance of the Writ. Neither
were the applicants able to demonstrate the
urgency and necessity of the Writ. The burden that
the applicants’ businesses would sustain because
of the imposition of the sin tax on their tobacco and
29
alcohol products cannot possibly be greater than
the heavy government revenue losses that would
result from the non-collection of taxes. In addition,
the improper issuance of the Writ of Preliminary
Injunction was aggravated by the inadequate
injunctive bond. As Justice Dicdican pointed out,
respondent judge approved the one million-peso
bond for the 13 original petitioners and 5
intervenors. The purpose of an injunctive bond is to
protect the opposing party (the government, in the
instant case) against loss or damage by reason of
the injunction in case the court finally decides that
the applicants (importers/traders inside the Subic
Bay Freeport Zone) are not entitled to it.
To make matters worse, respondent judge failedto
observe the constitutionally-
guaranteed right of the Republic to due process.
Records show that the Office of the Solicitor
General was not served copies of the motions for
intervention. Thus, respondent judge should not
have acted upon such motions without the
necessary proof of service on all parties, much less,
proceeded with their hearing ex parte, to the
prejudice of the Republic and other respondents.
The investigating justice stressed that respondent
judge disregarded the right of the Republic to due
process, not only once, but five times in all the
motions for intervention filed by the intervenors-
corporations.
Respondent Ramon S. Caguioa, Presiding Judge of
the Regional Trial Court of Olongapo City, Branch
74 is found GUILTY of gross ignorance of the law
and conduct prejudicial to the best interest of the
service, and is hereby ordered DISMISSED FROM
THE SERVICE with forfeiture of retirement benefits,
except leave credits.
6. REPUBLIC vs CAGUIOA
A judge was dismissed from service for the
countless issuance of defective writs of preliminary
injunction; Requisites of preliminary injunction; Writs
of preliminary injunction must be issued within
territorial jurisdiction.
FACTS:
These are three administrative cases against Judge
Ramon S. Caguioa, Presiding Judge of Branch 74,
Regional Trial Court (RTC) of Olongapo City.
I. A.M. No. RTJ-07-2063
Republic of the Philippines represented by Sol Gen
charged Judge Ramon S. Caguioa with
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
gross ignorance of the law, manifest partiality and
conduct prejudicial to the best interest of the
service.
The complaint concerned Civil Case No. 102-0-05
entitled “Indigo Distribution Corp. Inc. et al vs. The
Hon Secretary of Finance et al.” Petitioners therein,
Indigo Distribution Corp. Inc., et al., (Indigo, et al.,),
sought to nullify the implementation of Section 6 of
Republic Act (R.A.) No. 9334 as unconstitutional.
(On Payment of Excise Taxes on Imported Articles).
Indigo, et al., are importers and traders licensed to
operate inside the Subic Bay Freeport Zone. They
were granted Certificates of Registration and Tax
Exemptions by the Subic Bay Metropolitan Authority
(SBMA). With the enactment of the provision of R.A.
No. 9334 in 2005, however, they are now subject to
sin taxes or excise taxes on tobacco and alcohol
products.
SBMA issued a Memorandum directing the
departments concerned to require importers in the
Subic Bay Freeport Zone to pay the corresponding
duties and taxes before they are cleared from the
freeport.
Unwilling to pay said duties and taxes, petitioners
brought before the RTC of Olongapo City a special
civil action, Civil Case No. 102-0-05 for declaratory
relief to have certain provisions of R.A. No. 9334
declared as unconstitutional. Alleging great and
irreparable loss and injury, they prayed for the
issuance of a writ of preliminary injunction and/or
Temporary Restraining Order (TRO) and
preliminary mandatory injunction to enjoin the
directives issued by the Republic, as represented
by the Secretary of Finance, Commissioner of the
Bureau of Internal Revenue, Commissioner of
Customs, Collector of Customs of the Port of Subic,
and the Administrator of the SBMA.
Respondent judge granted the application for the
issuance of a writ of preliminary injunction. He
enjoined the public respondents from implementing
the pertinent provisions of R.A. No. 9344. He also
approved the injunction bond amounting to one
million pesos for all petitioners. On May 11, 2005,
he issued a writ of preliminary injunction.
Republic files petition for certiorari and prohibition
before the SC
The Republic led a petition for certiorari and
prohibition before this Court to annul said Order and
the Writ of Preliminary Injunction that was issued.
30
During the pendency of the petition, respondent
judge granted various ex parte motions for
intervention of different corporations claiming to be
similarly situated with petitioner Indigo and allowed
them to ride on the one million peso injunctive bond
posted by Indigo. Complainant Republic alleged
that it was denied due process because it did not
receive a copy of the motions for intervention, which
were favorably acted upon by respondent judge.
Respondent judge immediately implemented said
orders despite the subsequent motions for
reconsideration led by complainant Republic.
SC, considering the two other admin cases,
resolved to preventively suspend Judge Caguioa
On July 31, 2007, this Court, upon the
recommendation of the Office of the Court
Administrator, considering the two other
administrative cases led against respondent,
resolved to preventively suspend respondent judge
without pay, pending the resolution of said
administrative cases.
Oct. 9, 2007 – referred the consolidated
administrative cases to an Associate Justice of the
Court of Appeals for investigation, report and
recommendation.
SC Decision: (on the petition for certiorari and
prohibition) declared the Order of respondent judge
and the Writ of Preliminary Injunction, subject of
G.R. No. 168584, null and void.
We held that respondent judge gravely abused his
discretion in ordering the issuance of the Writ of
Preliminary Injunction.
For a writ of preliminary injunction to issue, the
applicant must establish that:
(1) there is a clear and unmistakable right to
be protected;
(2) the invasion of the right sought to be
protected is material and substantial; and
(3) there is an urgent and paramount
necessity for the writ to prevent serious
damage. We ruled that petitioners failed to
show a clear legal right that ought to be
protected by the court.
The rights granted under the Certificates of
Registration and Tax Exemption of petitioners are
not absolute and unconditional as to constitute
rights in esse. These certicates
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
granting petitioners a "permit to operate" their
respective businesses are in the nature of licenses,
which can be revoked at any time. There is no
vested right in a tax exemption, more so when the
latest expression of legislative intent renders its
continuance doubtful. Being a mere statutory
privilege, a tax exemption may be modified or
withdrawn at will by the granting authority.
Further, the feared injurious effects of the imposition
of duties, charges and taxes on imported tobacco
and alcohol products on petitioners' businesses
cannot possibly outweigh the dire consequences
that the non-collection of taxes would wreak on the
government. With regard to the injunction bond, we
also found respondent judge to have overstepped
his discretion when he arbitrarily xed the injunction
bond of petitioners at only P1 million.
II. A.M. No. RTJ-07-2064
The Commissioner of Customs (Commissioner)
charged Judge Ramon S. Caguioa with gross
ignorance of the law, manifest partiality and conduct
prejudicial to the best interest of the service.
The complaint concerned Civil Case No. 153-0-
2006 entitled "Andres D. Salvacion Jr. Vs. Gracia Z.
Caringal, et al." a Petition for Mandamus, with
Prayer for the Issuance of a Temporary Restraining
Order (TRO) and Writ of Preliminary Injunction,
which is pending before the sala of respondent
judge.
Salvacion was formerly the District Collector of the
Port of Subic. Commissioner reassigned Salvacion
to the Offiice of the Commissioner and designated
Caringal in his place as Acting Collector of the Port
of Subic. However, the reassignment was held in
abeyance and directed the customs personnel to
return to their respective port assignments.
Allegedly because of the failure of Caringal to
vacate the Office of the District Collector of the Port
of Subic, Salvacion filed against her said petition for
mandamus.
Respondent judge issued a TRO and Writ of
Preliminary Injunction, respectively, enjoining
Caringal from acting as District Collector of
Customs in the Port of Subic during the pendency
of the case.
Subsequently, Commissioner reassigned Salvacion
to the Port of Cagayan and designated Zamoranos
as Acting District Director of Subic.
31
Dissatised with his transfer, Salvacion led another
motion for the issuance of a TRO and writ of
preliminary injunction to enjoin complainant
Commissioner and the Secretary from implementing
its reassignment order.
Salvacion amended and/or supplemented his
Petition for Mandamus to make complainant
Commissioner and the Secretary not just necessary
but indispensable parties. He prayed that Caringal
and/or Zamoranos be enjoined from acting as the
District Collector of Customs of the Port of Subic.
On the other hand, complainant Commissioner, the
Secretary, the Acting Deputy Customs
Commissioner for Administration, and Zamoranos
moved to dismiss the petition on the following
grounds:
(1) the venue was improperly laid;
(2) petition had become moot and
academic with the assumption of ofce of
Zamoranos;
(3) the petition was premature for failure to
exhaust administrative remedies; and
(4) the matter of CPO No. B-309-2006
should not have been included in Civil Case
No. 153-02006, since it was issued after
Salvacion filed his petition.
Respondent judge, however, granted the issuance
of a writ of preliminary injunction in favor of
Salvacion. He reinstalled Salvacion as the duly
designated District Collector of Customs in the Port
of Subic during the pendency of the case.
Commissioner files certiorari to CA
Complainant Commissioner, the Secretary, Acting
Deputy Customs Commissioner for Administration,
and Acting District Collector of Customs of the Port
of Subic Marietta Zamoranos led with the Court of
Appeals a Petition for Certiorari.
CA Decision: set aside the order and lifted the Writ
of Preliminary Injunction issued pursuant thereto;
and ordered the dismissal of Civil Case.
Commissioner now charges Judge Caguioa with
gross ignorance
Complainant Commissioner alleges that respondent
judge exhibited gross ignorance of the law, manifest
partiality and conduct
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
prejudicial to the best interest of the service,
committed as follows:
First, as ruled by the Court of Appeals, respondent
judge should have dismissed the case for improper
venue, which ground had been timely raised by
complainant, the Secretary and the Acting Deputy
Customs Commissioner for Administration. Section
4, Rule 65 of the Rules of Court, provides that a
petition for mandamus, which relates to the acts of
officers like complainant, et al., must be led in the
Regional Trial Court exercising jurisdiction over the
territorial area covering said officers. Complainant,
et al., all hold ofce in Manila. Accordingly, the
petition for mandamus should have been led with
the Regional Trial Court of Manila, which has
territorial jurisdiction over the administrative officials
whose actions are in question.
Further, respondent judge had no authority to issue
a writ of preliminary injunction enjoining acts
performed outside his territorial jurisdiction.
Second, respondent judge should have dismissed
the amended/supplemental petition for mandamus
on the ground of Salvacion's failure to exhaust his
administrative remedies. Alleging that his transfer
was unjustified, Salvacion's remedy was to appeal
to the Civil Service Commission (CSC).
Lastly, the Court of Appeals held that Salvacion
failed to establish that he had a clear and
unmistakable right that was violated so as to
warrant the issuance of preliminary injunction.
Salvacion could not claim a vested right to his
position in the Port of Subic. There is no such thing
as a vested interest in an office, or even an
absolute right to hold it.
On March 7, 2007, Solicitor Thomas M. Laragan of
the Ofce of the Solicitor General submitted an
afdavit to this Court to show the proclivity of
respondent judge to issue writs of preliminary
injunction in the absence of requirements mandated
by the rules, even if the acts complained of were
performed outside his territorial jurisdiction, and
even if the venue of the case was improperly laid.
He enumerated several cases which show the acts
committed by respondent judge in irregularly issuing
writs of preliminary injunction, to wit:
Civil Case No. 02-0-2002
Respondent judge issued a writ of preliminary
injunction. CA set aside writ because of improper
venue.
32
Civil Case No. 275-0-2003
Respondent judge granted petitioners' application
for a writ of preliminary injunction on the BIR on the
implementation of revenue memorandum circulars.
The Court of Appeals, found that respondent judge
gravely abused his discretion in issuing the Writ
because respondent judge had no authority to
review the assailed circulars because the
jurisdiction to review rulings, opinions or
interpretations of the BIR Commissioner or the
Secretary of Finance is vested by law with the Court
of Tax Appeals (CTA).
Civil Case No. 63-0-04
Respondent judge issued a writ of preliminary
injunction enjoining the implementation of E.O. No.
156. The Court of Appeals, found that respondent
judge gravely abused his discretion in issuing the
Writ, through the contentions of the OSG that:
(1) petitioners failed to satisfy the
mandatory legal requirements for the issuance
of an injunctive writ;
(2) respondent judge had no authority to
enjoin the acts of government officials that
were performed outside its judicial territory;
and
(3) the issuance of a writ was contrary to the
proclamation of this Court discouraging trial
court judges from issuing injunctive writs on
the ground of an alleged nullity of a law,
ordinance or executive issuance.
Civil Case No. 279-0-2005
Respondent judge issued an order, granting
petitioners' prayer for an injunctive writ. The OSG
sought to nullify the Writ before the Court of
Appeals arguing that petitioners failed to establish a
clear legal right to an injunctive writ, and that a
preliminary injunction should not be issued on the
basis solely of an alleged nullity of a law, ordinance
or executive issuance. The petition for certiorari,
docketed as CA-G.R. SP No. 93298, has not been
resolved to date.
III. A.M. No. RTJ-07-2066
(More on Writ of Execution; Not provrem related)
On June 1, 2006, complainant Charles T. Burns, Jr.
charged Judge Ramon S. Caguioa and Sheriff IV
Christopher T. Perez, both of
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
Branch 74 of the Regional Trial Court of Olongapo
City, with Grave Misconduct.
Complainant Charles T. Burns, Jr. is the son of
plaintiff Mary Agnes who substituted the latter in a
civil case for recovery of ownership and possession
over several parcels of land, the complaint was filed
and tried in the sala of respondent judge.
Respondent judge dismissed the case and issued
Writ of Execution. CA ruled that WOE could not be
sustained, since a writ of execution must
substantially conform to the dispositive portion of
the promulgated decision. In the instant case, the
December 3, 2002 Order of dismissal did not
adjudicate any rights of the parties and resolved no
other matter except the dismissal of the case on the
ground of "prescription." It does not justify at all the
subsequent execution placing the private
respondents in possession, where no adjudication
of even possessory rights over the disputed
property was made.
SUMMARY OF ARGUMENTS OF RESPONDENT
JUDGE
In all three administrative cases against him,
respondent judge argues that the mistakes he
committed in issuing the questioned orders should
be considered as mere errors of judgment that do
not warrant administrative disciplinary action,
because his acts were never proven to be, and
were in fact never, motivated by bad faith, ill will,
fraud and corrupt motives.
Respondent judge explains that the rule which
proscribes the imposition of administrative liability
on judges for committing mistakes or errors which
have not been shown to be "motivated by fraud,
dishonesty, corruption or any other evil motive" is a
rule grounded on public policy, not only that judges
cannot be expected to be infallible, but that the
judiciary would be paralyzed if its members are
penalized for each and every single error they, in
good faith, commit. Further, he reasons that all his
acts were based on law and jurisprudence.
In moving for the dismissal of the administrative
complaints, respondent judge argues that the acts
complained of are judicial in nature; and that the
cases involve the same issues raised by the
complainants before this Court 77 and the Court of
Appeals. He also cites the ruling of this Court in
G.R. No. 168584, where we held that respondent
judge therein erred in issuing the injunction order,
but that the evidence of his
10
alleged partiality was insufficient to prohibit him
from proceeding with the case.
FINDINGS OF THE INVESTIGATING JUSTICE
Found respondent judge guilty of Gross Ignorance
of the Law and Conduct Prejudicial to the Best
Interest of the Service.
Justice Dicdican recommends that respondent
judge be meted the penalty of suspension from the
service for one year, with a stern warning that the
commission of similar or other offenses in the
future shall be dealt with more drastically.
RULING OF THE COURT
SC adopts the findings of the Investigating Justice.
In A.M. No. RTJ-07-2063, respondent judge issued
a Writ of Preliminary Injunction, enjoining the
collection of taxes. Taxes are the lifeblood of the
government, and it is of public interest that the
collection of which should not be restrained. 99
Further, the applicants for the Writ showed no clear
and unmistakable right that was material and
substantial as would warrant the issuance of the
Writ. Neither were the applicants able to
demonstrate the urgency and necessity of the Writ.
The burden that the applicants' businesses would
sustain because of the imposition of the sin tax on
their tobacco and alcohol products cannot possibly
be greater than the heavy government revenue
losses that would result from the non-collection of
taxes.
In addition, the improper issuance of the Writ of
Preliminary Injunction was aggravated by the
inadequate injunctive bond. As Justice Dicdican
pointed out, respondent judge approved the one
million-peso bond for the 13 original petitioners and
5 intervenors. The purpose of an injunctive bond is
to protect the opposing party (the government, in
the instant case) against loss or damage by reason
of the injunction in case the court nally decides that
the applicants (importers/traders inside the Subic
Bay Freeport Zone) are not entitled to it.
In A.M. No. RTJ-07-2064, respondent judge again
issued a Writ of Preliminary Injunction that did not
satisfy the legal requisites for its issuance, and
which was enforced outside his territorial
jurisdiction. The applicant, in this case, questions
his reassignment as District Collector of the Port of
Subic to the Port of Cagayan de Oro. We uphold
the ruling of the Court of Appeals that the applicant
failed to establish that he has a clear and
unmistakable right that was violated so as to
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
warrant the issuance of a preliminary injunction. He
could not claim a vested right to his position in the
Port of Subic. A public office is not a private
property.
Further, the Writ of Preliminary Injunction was
issued to enjoin acts performed outside the
territorial jurisdiction of respondent judge. It was
directed against government ofcials whose ofces in
Manila are outside the territorial jurisdiction of the
Regional Trial Court of Olongapo City.
The requisites for the issuance of a writ of
preliminary injunction are basic and elementary,
and should have been known by respondent judge.
More importantly, as the Investigating Justice points
out, respondent judge should have been more
cautious in issuing writs of preliminary injunction.
These writs are strong arms of equity which must
be issued with great deliberation. The Affidavit of
Solicitor Larangan, which enumerates cases
wherein respondent judge issued injunctive writs
which were subsequently nullied by a higher court,
shows his propensity for issuing improvident writs of
injunction.
IN VIEW WHEREOF in A.M. No. RTJ-07-2066,
respondent Ramon S. Caguioa, Presiding Judge of
the Regional Trial Court of Olongapo City, Branch
74 is found of simple misconduct, and is hereby
ordered SUSPENDED from office without pay, for a
period of THREE MONTHS.
In A.M. Nos. RTJ-07-2063 and RTJ-07-2064,
respondent Ramon S. Caguioa, Presiding Judge of
the Regional Trial Court of Olongapo City, Branch
74 is found GUILTY of gross ignorance of the law
and conduct prejudicial to the best interest of the
service, and is hereby ordered DISMISSED FROM
THE SERVICE with forfeiture of retirement benefits,
except leave credits.
7. CHARLES T. BURNS, JR., Complainant, vs.
JUDGE RAMON S. CAGUIOA, Presiding Judge
of the Regional Trial Court of Olongapo City,
Branch 74, and CHRISTOPHER T. PEREZ,
Sheriff IV, Regional Trial Court of Olongapo
City, Branch 74, Respondents
Facts:
On June 1, 2006, complainant Charles T. Burns, Jr.
charged Judge Ramon S. Caguioa and Sheriff IV
Christopher T. Perez, both of Branch 74 of the
Regional Trial Court of Olongapo City, with Grave
Misconduct. The administrative complaint
concerned Civil Case No. 77-0-97, entitled "Mary
Agnes Burns v. Spouses Juan C. Beltran, et al." for
recovery of ownership and possession over several
parcels of land, the complaint was filed and tried in
the sala of respondent judge.
11

Complainant Charles T. Burns, Jr. is the son of
plaintiff Mary Agnes who substituted the latter in
said civil case. Complainant alleged that he and
several others are the occupants of one of the
properties in litigation, a parcel of land located in
Asinan Proper, Subic, Zambales. In the course of
the proceedings, Pacific Rare Metals, Inc. was
allowed to intervene, because it alleged that it was
the true and lawful owner of the property by virtue of
Certificates of Title issued in its name.
The defendants and intervenor filed a Motion to
Dismiss, which was initially denied on July 18, 2001
by then Acting Presiding Judge Philbert Itturalde.
Upon a Motion for Reconsideration, respondent
judge reconsidered the July 18, 2001 Order and, on
December 3, 2002, dismissed the case on the
principal ground of prescription. He thus ruled:
Plaintiff therefore, in filing this case in 1997, was
late by roughly four (4) years.
With the resolution of the principal issue of
prescription, the court does not find it necessary
anymore to discuss the other grounds for dismissal
raised by the movants.
WHEREFORE, foregoing considered, the motion for
reconsideration filed on September 28, 2001 is
GRANTED. The order of the court dated July 18,
2001 is RECONSIDERED and SET ASIDE. This
case is DISMISSED.
SO ORDERED.
Plaintiff filed a Motion for Reconsideration but this
was denied in an Order dated June 14, 2004. She
then filed a Notice of Appeal, but this was not given
due course in the Order of April 7, 2005, for having
been filed out of time.
The defendants and intervenor then urgently moved
for the issuance of a writ of execution to place them
in physical possession of the property. On January
13, 2006, respondent judge granted the motion and
accordingly issued a writ of execution. The Order, in
part, provides:
xxx
Anent the issue of execution, the court concurs with
the position of the defendants-intervenors.
Undoubtedly, the issue of ownership has been put
to rest by the court in its April 7, 2005 order,
notwithstanding the fact that the basic ground that
this case was dismissed was because of
prescription. Plaintiff cannot deny that she sued in
the first place to recover ownership, including
possession as an attribute of ownership, as clearly
alleged in her complaint. Furthermore, plaintiff failed
to prove to the satisfaction of the court that the
preliminary injunction issued by Branch 72, RTC
Olongapo City dated November 4, 1996 involves
the same property that is the subject matter of this
litigation. Without such evidence, the principle that a
court can not reverse the Order of a co-equal court,
finds no ample application.
Foregoing considered, the Urgent Motion for the
Isuance of a Writ of Execution is hereby GRANTED.
Let a writ issue.
SO ORDERED.
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
The Writ of Execution, issued on January 23, 2006,
ordered the respondent sheriff, as follows:
NOW THEREFORE, you are hereby ordered to
place defendants title holders Juan Beltran and
PRMII Subic Corp. in possession of the property
covered by their Original Certificate of Title No.
6932 in the name of Juan Beltran and now by
Transfer Certificate of Title No. T-47486 in the
name of defendant PRMII Subic Corp.; to cause
plaintiffs, their privies, successors and assigns and
all persons claiming rights from them as well as all
other occupants of the subject property to
peaceably vacate, remove their improvements and
deliver possession thereof to the defendants
particularly title holders Juan Beltran and PRMII
Subic Corp. and make return of your proceedings
with this writ of execution within a period prescribed
by law.
xxx
On February 1, 2006, plaintiffs were served with the
Notice to Vacate. On June 5, 2006, a Notice of
Removal of Improvements was served.
Consequently, the houses of complainants and the
other occupants of the disputed land were
demolished.
Plaintiff Mary Agnes Burns sought to nullify before
the Court of Appeals the Orders of respondent
judge dated: (1) April 7, 2005, denying due course
to plaintiff’s Notice of Appeal; and (2) January 13,
2006, denying plaintiff’s Motion for Reconsideration,
and granting the Motion for Execution filed by
defendants and intervenor. The petition was
docketed as CA-GR SP No. 93025.
On November 10, 2006, the Court of Appeals
nullified the Orders dated April 7, 2005 and January
13, 2006, including the Writ of Execution dated
January 23, 2006, and the Notice to Vacate dated
February 1, 2006. Respondent judge was likewise
directed to give due course to and approve
plaintiff’s Notice of Appeal dated July 12, 2004.
The Court of Appeals ruled that the trial court
actually dismissed the case, not on the ground of
prescription, but because plaintiff Mary Agnes has
no personality to file the action for recovery of
ownership and possession of the land. Plaintiff was
a mere homestead applicant, not an owner of the
subject property, who recognized the State
ownership of the land and its character as public
land. Only the State can bring such action, as in fact
it did in the consolidated cases for nullification of
patents and titles issued to various defendants
covering the subject parcels of land. The suits for
reversion filed by the Solicitor General are still
pending in another branch of the Regional Trial
Court of Olongapo City. This fact was disclosed by
plaintiff in her complaint, where she stated that she
had intervened in the reversion suits filed by the
State over the subject land, for which she sought a
declaration of ownership in this case.
Next, the appellate court ruled that the Writ of
Execution dated January 23, 2006, issued pursuant
to the Order dated January 13, 2006 of respondent
12
judge, could not be sustained. A writ of execution
must substantially conform to the dispositive
portion of the promulgated decision. The writ

“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
13
cannot vary or go beyond the terms of the
judgment. If it does, it becomes null and void. In the
instant case, the December 3, 2002 Order of
dismissal did not adjudicate any rights of the parties
and resolved no other matter except the dismissal
of the case on the ground of "prescription." It does
not justify at all the subsequent execution placing
the private respondents in possession, where no
adjudication of even possessory rights over the
disputed property was made.
Further, the Court of Appeals held that another
compelling reason why execution was highly
improper was the fact that respondent judge had
been apprised of the pendency of the reversion
suits filed by the Republic involving the same
parcels of land. The ruling of respondent judge --
that the disposition of the case under the order of
dismissal on the ground of prescription also
adjudicated the issue of ownership between the
parties -- constituted grave abuse of discretion,
considering, more so, that whatever final judgment
may be rendered in the reversion suits would
amount to res judicata in the present proceeding.
On March 23, 2007, the parties to the civil case
below, including complainants in the instant
administrative case, filed before respondent judge a
"Manifestation of Withdrawal of Claim" and a "Joint
Manifestation and Motion to Approve Compromise
Agreement with Motion to Dismiss." Finding the
provisions of the compromise agreement to be not
contrary to law, public policy and morals,
respondent judge on March 28, 2007 granted the
motion and proceeded to dismiss the case
Issue:
Whether or not the judge is administratively liable
for the issuance of the writ of execution?
Ruling:
The Writ ordered respondent sheriff to place private
respondents in possession of the disputed property,
even when no adjudication of even possessory
rights over the subject property was made.
Respondent judge cannot hide behind the doctrine
in Unson v. Lacson and Perez v. Evite, where we
held that "a judgment is not confined to what
appears upon the face of the decision, but also
those necessarily included therein or necessary
thereto." In Unson, we ruled in favor of petitioner
Unson and voided the contract of Lease between
Mayor Lacson of Manila and Genato Commercial
Corporation. After the decision had become final,
petitioner Unson asked the court to issue a writ of
execution to direct respondent Genato to remove
any construction it had made on the land leased
from the City. Respondent Genato objected
because there was nothing in the Decision that
ordered it to remove any building on the leased
property. The trial court issued execution as prayed
for, which this Court sustained. Our decision in the
Unson case did not contain any order for
demolition, because the only issue concerned the
validity of the lease. The parties practically
conceded that if the lease was valid,
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
Genato's construction stayed; but if the contract
was void, the building had no reason to continue.
In Perez, the defendants were declared the owners
of a parcel of land. The Writ of Execution ordered
the sheriff "to deliver the ownership of the portion of
the land in litigation to the defendant Vicente Evite."
The sheriff placed the defendants in possession.
Plaintiffs moved to quash the Writ on the ground
that, because the decision sought to be executed
merely declared the defendants owners of the
property and did not order its delivery to said
parties, the Writ putting them in possession thereof
was at variance with the decision and,
consequently, null and void. On appeal, the Writ
was upheld here. We ruled that a situation in which
the actual possessor had some rights which must
be respected and defined, or a valid right over the
property enforceable even against the owner, is
absent. In Perez, there is no such right that may be
appreciated in favor of the possessor. The trial court
declared in its Decision that "the plaintiffs have not
given any reason why they are retaining the
possession of the property."
The instant case of Burns has a different factual
milieu. Respondent judge did not adjudicate any
rights of the parties and resolved no other matter
except the dismissal of the case on the ground of
"prescription." Thus, the order to place private
respondents in possession of the disputed property
is not necessarily included in or necessary to the
judgment of dismissal of the case on the ground of
"prescription."
As the Court of Appeals held, another compelling
reason why execution was highly improper was the
fact that respondent judge has been apprised of the
pendency of the reversion suits filed by the
Republic, involving the same parcels of land, in
another branch of the RTC of Olongapo City, which
even issued a writ of preliminary injunction to enjoin
the defendants therein from committing acts of
ownership over the property. At first, respondent
judge reasoned that plaintiff Burns failed to prove to
the satisfaction of the court that the preliminary
injunction issued by Branch 72, RTC Olongapo City,
and dated November 4, 1996 involves the same
property that is the subject matter of this litigation.
However, as the appellate court stressed,
respondent judge overlooked the fact that the lot
covered by the Certificate of Title in the name of
private respondent Beltran, whom he ordered to be
placed in possession of the disputed property, was
but purchased from Blas Flores, whose title formed
part of Lot No. 5010 being claimed by plaintiff Mary
Agnes Burns. Next, in his letter to the Chief Justice
dated August 2, 2007, respondent judge admitted
that he had knowledge of the reversion suit filed by
the Republic, pending before another branch of the
RTC and involving the same parcels of land. He
argued that he made the judicial call to grant the
motion for execution in Civil Case No. 77-0-97,
because to suspend its resolution pending the final
outcome of the reversion suit carried no foreseeable
time frame. Between ruling on a motion for the
issuance of a writ of execution and waiting
indefinitely for the outcome of the reversion suit,
14
respondent judge decided that "it was more fair to
grant the writ of execution of a

“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
15
 particularly R.A. 6957 and R.A. 7718;
final and executory judgment that is my ministerial
duty."

On respondent judge’s argument that these cases

should be dismissed because the acts complained
of are judicial in nature, and the cases involve the
same issues raised by the complainants before this
Court and the Court of Appeals, we agree that as a
matter of policy, the acts of a judge in his judicial
capacity are not subject to disciplinary action. In the
absence of fraud, malice or dishonesty in rendering
the assailed decision or order, the remedy of the
aggrieved party is to elevate the assailed decision
or order to the higher court for review and
correction. However, an inquiry into a judge’s civil,
criminal and/or administrative liability may be made
after the available remedies have been exhausted
and decided with finality. This is the situation we
have before us. The appellate tribunals have
spoken with finality. Hence, respondent judge’s
administrative liability is ripe for adjudication.

In this instance, we follow the conclusion of the

investigating justice that respondent judge is guilty
only of Simple Misconduct in ordering, without
basis, the issuance of the Writ of Execution in Civil
Case No. 77-0-97, without basis. For grave
misconduct to exist, the judicial act complained of
should be corrupt or inspired by the intention to
violate the law, or a persistent disregard of well-
known rules. This is not clearly evident in this case.

8. Australian Professional Realty, Inc. v.

Municipality of Padre Gracia Batangas Province
G. R. No. 183367

FACTS
In 1993, fire razed to the ground the old public
market of respondent Municipality of Padre Garcia,
Batangas. Its government, through its then
Municipal Mayor Gutierrez, invited petitioner
Australian Professional Realty, Inc. (APRI) to
rebuild the public market and construct a shopping
center.

The parties executed a Memorandum of Agreement

(MOA). Under the MOA, APRI undertook to
construct a shopping complex in the 5,000-square-
meter area. In return, APRI acquired the exclusive
right to operate, manage, and lease stall spaces for
a period of 25 years.

1st Petition: (by Respondent)

Subsequently, Victor Reyes was elected as new
municipal mayor. Then, respondent, through Mayor
Reyes, initiated a Complaint for Declaration of
Nullity of Memorandum of Agreement with
Damages before the RTC.

RTC decision: (In favor of Respondent)

WHEREFORE, in view thereof, and finding the
petition to be sufficient in form and substance, it
being supported by sufficient evidence, judgement
(sic) is hereby rendered in favor of the plaintiff as
against the respondents as follows:
(a) The Memorandum of Agreement is
hereby declared null and void for being
contrary to law and public policy,
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
16

(b) The respondents are hereby ordered
to pay the amount of FIVE MILLION
PESOS (₱5,000,000.00) in favor of the
plaintiff for damages caused to the latter;
grave injustice and irreparable injury would arise
unless it is issued immediately. Under Section 5,
Rule 58 of the Rule of Court, a TRO may be issued

(c) The structures found within the

unfinished PADRE GARCIA SHOPPING
CENTER are hereby declared forfeited in
favor of the Municipality of Padre Garcia.

2nd Petition: (by Petitioner)

Since no appeal was timely filed and a Writ of
Execution has already been issued, APRI filed a
Petition for Relief from Judgment

RTC decision:
The RTC denied APRI’s petition, as well as the
Motion for reconsideration subsequently filed.

3rd Petition: (by Petitioner)

APRI filed a Petition for Certiorari and Prohibition
before the CA and later, a Motion for the Issuance
of Status Quo Order and Motion for Issuance of
Temporary Restraining Order and/or Writ of
Preliminary Injunction. The motion prayed for an
order to restrain the RTC from "further proceeding
and issuing any further Order, Resolution, Writ of
Execution, and any other court processes" in the
case before it.

CA decision:
We find that the matter is not of extreme urgency
and that there is no clear and irreparable injury that
would be suffered by the petitioners if the prayer
for the issuance of a Status Quo Order, Temporary
Restraining Order (TRO) and/or Writ of Preliminary
Injunction is not granted. Thus, the Motion is
denied. The subsequent Motion for
Reconsideration was likewise denied.

Thus, the instant Petition for Review on Certiorari.

ISSUE
Whether or not the CA committed grave abuse of
discretion amounting to lack or excess of
jurisdiction in denying APRI’s Motion for the
Issuance of Status Quo Order and Motion for
Issuance of Temporary Restraining Order and/or
Writ of Preliminary Injunction.

RULING
No. The CA did not err in denying the Motion.
Petition is denied.

A writ of preliminary injunction and a TRO are

injunctive reliefs and preservative remedies for
the protection of substantive rights and
interests, An application for the issuance of a
writ of preliminary injunction and/or TRO may
be granted upon the filing of a verified
application showing facts entitling the
applicant to the relief demanded.

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
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
17
only if it appears from the facts shown by affidavits
or by the verified application that great or
irreparable injury would be inflicted on the applicant
before the writ of preliminary injunction could be
heard.
Thus, to be entitled to the injunctive writ, petitioners
must show that:
(1) there exists a clear and unmistakable right to
be protected;
(2) this right is directly threatened by an act sought
to be enjoined;
(3) the invasion of the right is material and
substantial; and
(4) there is an urgent and paramount necessity for
the writ to prevent serious and irreparable damage.
No clear legal right
A clear legal right means one clearly founded in or
granted by law or is enforceable as a matter of law.
The petitioners have failed to establish in their
Petition that they possess a clear legal right that
merits the issuance of a writ of preliminary
injunction. Their rights under the MOA have already
been declared inferior or inexistent in relation to
respondent in the RTC case, under a judgment that
has become final and executory. Hence, there can
be no "clear and unmistakable" right in favor of
petitioners to warrant the issuance of a writ of
injunction. Where the complainant’s right or title is
doubtful or disputed, injunction is not proper.
The general rule is that after a judgment has gained
finality, it becomes the ministerial duty of the court
to order its execution. The rule, however, admits of
exceptions, such as the following: (1) when facts
and circumstances later transpire that would render
execution inequitable or unjust; or
(2) when there is a change in the situation of the
parties that may warrant an injunctive relief. In this
case, after the finality of the RTC Decision, there
were no supervening events or changes in the
situation of the parties that would entail the
injunction of the Writ of Execution.
No irreparable injury
Damages are irreparable where there is no
standard by which their amount can be measured
with reasonable accuracy.
In this case, petitioners have alleged that the loss of
the public market entails costs of about
₱30,000,000 in investments, ₱100,000 monthly
revenue in rentals, and amounts as yet unquantified
– but not unquantifiable – in terms of the alleged
loss of jobs of APRI’s employees and potential suits
that may be filed by the leaseholders of the public
market for breach of contract. Clearly, the injuries
alleged by petitioners are capable of pecuniary
estimation. Any loss petitioners may suffer is
easily subject to
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
mathematical computation and, if proven, is fully
compensable by damages. Thus, a preliminary
injunction is not warranted. With respect to the
allegations of loss of employment and potential
suits, these are speculative at best, with no proof
adduced to substantiate them.
The foregoing considered, the CA did not commit
grave abuse of discretion in denying the Motion for
Injunction. In any case, petitioners may still seek
recourse in their pending Petition before the Court
of Appeals.
WHEREFORE, the Petition is DENIED.
9) ETHELWOLDO E. FERNANDEZ, et. al., vs
BATO Jr. -DADOL
FACTS:
The Nationwide Development Corporation
(NADECOR) is a domestic corporation which owns
a gold-copper mining concession. A New Board
was elected and replaced the Old Board at the
regular annual stockholders' meeting held on
August 15, 2011.
Two months after the said stockholders' meeting,
plaintiffs Ricafort sought to annul the said meeting
as they claimed to be stockholders of record. They
alleged that there were irregularities in the conduct
of the stockholders’ meeting, specifically, that they
were not given prior notice of the meeting.
The NADECOR, the members of the New Board,
and the Corporate Secretary were then impleaded
as defendants. After the filing of answers;
Decision of the Regional Trial Court (RTC)
The RTC is in favor of the plaintiffs, and that, they
were not given due notice of the annual
stockholders’ meeting among others. They issued
an Order declaring that the stockholders' meeting is
null and void, including all matters taken up during
said stockholders' meeting.
Thereafter, four separate petitions for certiorari
were forthwith filed in the CA by some members of
the New Board and by NADECOR to assail the
validity of the Order, all with application for a TRO
and/or a writ of preliminary injunction.
Court of Appeals
The 11th Division, acting on one of the four
petitions, issued a TRO in favor of petitioners to
prevent the implementation and execution of the
assailed Order. Moreover, it ordered the Old Board
to act as a hold-over board, in effect making the
New Board cease its operations.
After the consolidation of all the petitions, plaintiffs
Ricafort (now respondents) filed their Comment Ad
Cautelam. Petitioners thereafter filed three urgent
motions to resolve their application for writ of
preliminary injunction. However, after the lapse of
the TRO but before the CA could resolve the
18
application for writ of preliminary injunction, the
Corporate Secretary of the Old Board issued a
Notice of Annual Stockholders' Meeting (Annual

“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
19
Meeting) and published it in the Philippine Star on
June 7, 2012. On the same day, petitioners filed a
Supplement to the Third Urgent Motion to Resolve
with Manifestation contending that the matters to be
taken up in the Annual Meeting would result in
grave and irreparable injury to the company.
During the annual meeting, the Presiding Officer
received a copy of the now assailed Resolution of
the CA's Special 14th Division granting petitioner’s
application for a writ of preliminary injunction. The
Resolution enjoined the implementation of the
Order and allowed the New Board to continue to act
as Board of Directors of NADECOR. It further
enjoined and prohibited the Old Board from acting
as hold-over board and from scheduling and holding
any stockholders' meeting. In its reasoning, the CA
stated that holding the Annual Meeting would
render moot and academic the previous four
consolidated CA petitions, since a newly elected
Board would effectively supplant the New Board,
although the validity of the latter is still being
contested in the CA. However, despite notice of the
Resolution, the stockholders who remained in the
Annual Meeting ignored the writ and the meeting
resumed.
Herein complainants Fernandez, Henson and Ong
are all members of the Old Board. They filed before
the Court a petition for certiorari and prohibition,
seeking to annul the writ of preliminary injunction
issued by the CA's Special 14th Division. However,
the Court dismissed their petition for lack of
personality because they were non-parties and
strangers to the consolidated CA petitions.
Undaunted, complainants then filed with the Court
the present Administrative Case against the
members of the former Special 14th Division of the
CA. Complainants allege gross ignorance of the
law, among others, as the Justices should have first
set petitioners' application for a writ of preliminary
injunction for hearing before granting the same, as
provided in Section 5 of Rule 58 of the Rules of
Court.
ISSUE:
WON the Resolution granting the writ of preliminary
injunction disregarded the requirement of notice and
hearing?
HELD:
NO. The case is dismissed. The Resolution did not
disregard the requirement of notice and hearing.
The rollos of the consolidated CA petitions were
received only five days prior to the Annual Meeting,
thus, there is no time to conduct a hearing.
Section 4, Rule VI of the The Internal Rules of the
CA (IRCA) provides that: "[T]he requirement of a
hearing for preliminary injunction is satisfied with
the issuance of a resolution served upon the party
sought to be enjoined requiring him to comment on
the said application within the period of not more
than ten (10) days from notice."
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
The issuance of the writ of preliminary injunction in
the consolidated CA petitions was discretionary,
interlocutory and preservative in nature, and
equally importantly, it was a collective and
deliberate action of the former Special 14th
Division upon an urgent application for writ of
preliminary injunction.
It is important to note that a person who is not a
party in the main suit cannot be bound by an
ancillary writ, such as a preliminary injunction. He
cannot be affected by any proceeding to which he is
a stranger. Conversely, if a petition for certiorari
or prohibition is filed by one who is not a party
in the lower court, he has no standing to
question the assailed order.
The complainants, who at various times served as
elected members of the Old Board of NADECOR,
did not bother to intervene in the CA petitions,
hence, they are not entitled to the service of
pleadings and motions therein.
Having established that the herein complainants
have no personality to assail the writ of preliminary
injunction issued by the CA’s former Special 14th
Division, the SC then, cannot now permit them to
harass the CA Justices who issued the same. For
even granting that the issuance of the writ was
erroneous, as a matter of public policy a magistrate
cannot be held administratively liable for every
discretionary but erroneous order he issues. The
settled rule is that "a Judge cannot be held to
account civilly, criminally or administratively for an
erroneous decision rendered by him in good faith.”
10. Cagayan de Oro City Landless Residents
Asso. Inc. v. CA
Facts:
· The land subject of the dispute is Lot No. 1982
located at Cagayan de Oro City. Said parcel of
land was formerly a timberland identified.
· The Bureau of Forestry released the said land
as alienable and disposable public land.
· Subsequently, the Bureau of Lands granted
authority to the COCLAI to survey the land in
question for purposes of subdivision into
residential lots.
· By virtue of said authority, the COCLAI
engaged the services of a geodetic engineer to
prepare the subdivision survey which was
submitted to the Bureau of Lands.
· The Bureau of Lands, after conducting an
ocular survey, required the COCLAI, in behalf
of its members, to file a miscellaneous Sales
Application over the land in question which the
latter did.
· The said sales application was however held in
abeyance by the Bureau of Lands pending the
final outcome of the civil case filed by the
Republic of the Philippines and the City of
Cagayan de Oro against Benedicta Macabebe
Salcedo, Et. Al. for the annulment of (OCT No.
0-257) covering the land in question then
pending before the Supreme Court (G.R. No. L-
20
41115).

“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
21
 Philippines issued Special Patent No. 3551
· In said case, the COCLAI was a party-
covering the entire area of Lot No. 1982, and by
intervenor.
virtue thereof, the Register of Deeds of
· Meanwhile, the NHA filed an expropriation
proceeding before the CFI of Cagayan de Oro
City (Civil Case No. 6806) to acquire Lot No.
1982, including the land involved in this case.
· In said case, the COCLAI intervened claiming
that instead of being paid the amount of
P300,000.00, they prefer to acquire residential
lots in any housing area of NHA.
· Upon learning of the pending suit before the
Supreme Court (G.R. No. L-41115) involving
the annulment of the title over the same land,
the NHA sought the suspension of the
expropriation proceedings.
· The Supreme Court finally resolved (G.R. No.
L-41115) annulling (OCT No. 0-257) and
declaring the land covered thereby as public
land.
· The Solicitor General furnished the Bureau of
Lands with a copy of the Supreme Court
decision prompting the Director of the Bureau
of Lands to order the District Land Officer in
Cagayan de Oro City to take appropriate action
for inventory of each and every portion of
Cadastral Lot No. 1982.
· In response thereto, the Regional Land Director
of Region 10 informed the Director of Lands
that the members of COCLAI were occupying
portions of the said lot by virtue of the Survey
Authority issued and the COCLAI’s subdivision
survey had already been submitted to the
Central Office for verification and approval but
was held in abeyance.
· The President of the Philippines issued
Proclamation No. 2292 reserving the entire
area of Lot No. 1982 for the Slum Improvement
and Resettlement (SIR) Project to be
implemented by the NHA.
· Under the said proclamation, the NHA was
granted the authority ‘to develop, administer
and dispose of Lot No. 1982 in accordance with
the guidelines of the Slum Improvement and
Resettlement Program and the approved
development plan of the area.
· The Bureau of Lands issued an order rejecting
the subdivision survey previously submitted by
the COCLAI.
· The NHA, through its agents, the area manager
and project engineer, respectively with the help
of the policemen and claiming authority under
P.D. 1472, demolished the structures erected
by the COCLAI members.
· This action prompted the COCLAI to file a case
for forcible entry (Civil Case No. 11204) against
the NHA employees and police officers with the
MTCC.
· The MTCC rendered judgment ordering the
defendants to restore the COCLAI members to
their respective actual possession of the
portions of Lot No. 1982.
· On appeal, the RTC affirmed the decision of
the lower court.
· Thereafter, the prevailing party, the COCLAI
members, moved for the issuance of a writ of
execution before the MTCC.
· While (Civil Case No. 11204) was pending
before the courts, the President of the
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
22
 the court taking cognizance of the case and is
Cagayan de Oro City issued on an Original
generally not interfered with except in cases of
Certificate of Title No. P-3324 in the name of
NHA.
· The NHA filed a complaint for ‘Quieting of Title
With Application for a Writ of Preliminary
Injunction’ against the COCLAI and its
president, Pablo Solomon, as well as the City
Sheriff (Civil Case No. 90-337) before the
RTC.
· The RTC issued a RESTRAINING ORDER be
issued to Defendants Pablo Salomon and
Cagayan de Oro Landless Association, Inc.
and the City Sheriff or Deputy Sheriff of
MTCC. And until further orders from this court,
they are enjoined to refrain or desist from
enforcing the decision of (Civil Case No.
11204) until this court resolves this complaint.’
· Subsequently, the defendants moved to
dismiss the complaint stating, among others,
as a ground therefor that the cause of action is
barred by a prior judgment in another case.
· Apparently, the NHA has filed an action for
‘Injunction with Damages’ against COCLAI
and its President before the RTC (Civil Case
No. 89-399) to prevent the MTCC from
executing its decision in Civil Case No. 11204,
but this was dismissed by the RTC on the
ground that the decision of the MTCC in Civil
Case No. 11204, had been upheld by the
Supreme Court when it denied NHA’s petition
for certiorari.
· The RTC in (Civil Case No. 90-337) issued an
Order denying the motion to dismiss as well as
plaintiff NHA’s prayer for the issuance of a
preliminary injunction to restrain the
enforcement of the decision in Civil Case No.
11204.
· Aggrieved by the decision of the Regional Trial
Court, the NHA appealed to the Court of
Appeals which reversed the decision of the
lower court and the questioned Orders of
respondent judge are hereby declared null and
void and respondent judge is ordered to issue
a writ of preliminary injunction to respect the
possession of the petitioner over the land
subject of the dispute.

Issue:

Whether or not the Court of Appeals erred in ruling

(a) that the National Housing Authority (NHA) is
entitled to the injunction prayed for; and (b) that
NHA has a better right to the possession of Lot No.
1982, as a necessary consequence of ownership.

Ruling:

As an extraordinary remedy, injunction is

calculated to preserve or maintain the status quo of
things and is generally availed of to prevent actual
or threatened acts, until the merits of the case can
be heard. As such, injunction is accepted as the
"strong arm of equity or a transcendent remedy" to
be used cautiously, as it affects the respective
rights of the parties, and only upon full conviction
on the part of the court of its extreme necessity.

Its issuance rests entirely within the discretion of

“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
23
manifest abuse. Moreover, it may only be resorted to
by a litigant for the preservation or protection of his
rights or interests and for no other purpose during the
pendency of the principal action.
Before an injunction can be issued, it is essential
that the following requisites be present: 1) there
must be a right in esse or the existence of a right to
be protected; and 2) the act against which the
injunction is to be directed is a violation of such
right. Hence, it should only be granted if the party
asking for it is clearly entitled thereto.
In the case at bench, the Court of Appeals was
justified in ruling that NHA was entitled to the writ of
injunction. The reason is that, while Civil Case no.
11204 for forcible entry was pending on appeal
before the Regional Trial Court, Special Patent No.
3551 was issued by then President Corazon Aquino
which covered the lot subject of the dispute and by
virtue thereof, an Original Certificate of Title in the
name of NHA was issue. So, when petitioner moved
for the issuance of a writ of execution before the
MTCC on July 23, 1990, a certificate of title had
already been issued to NHA.
In view of this intervening development, NHA filed a
complaint for quieting of title before the Regional
Trial Court of Cagayan de Oro City. Thus, it was
only proper for the Court of Appeals to direct the
Regional Trial Court, 9 where Civil Case No. 90-337
was pending, to grant the writ of preliminary
injunction to restrain the enforcement of the
decision of the MTCC in Civil Case No. 11204 as
there was a material change in the status of the
parties with regard to the said land.
Clearly, the government, through the NHA will be
prejudiced by the impending enforcement of the
decision in Civil Case No. 11204 which directs the
said agency to restore the members of petitioner to
their respective possession on portions of Lot No.
1982.
The petition is DISMISSED. The decision of the
Court of Appeals in C A. G.R. SP No. 23080 is
AFFIRMED.
11. Jose Barbieto v. The Honorable Court
of Appeals, et. al., G.R. 184645, October
30, 2009
Petition for Certiorari under Rule 65 of the
Revised Rules of Court assails the Resolutions of
the CA denying the prayer of petitioner, Maj. Gen.
(MG) Barbieto, for a TRO and/or writ of preliminary
injunction to enjoin his arrest and confinement,
and/or lift the preventive suspension order issued
by the Office of the Deputy Ombudsman
Facts
MG Barbieto is the Division Commander of the 4th
Infantry Division. Several personnel file with the
Office of the Deputy Ombudsman for the Military
and other Law Enforcement Offices (ODO-MOLEO)
several complaints against MG Barrieto and his
alleged bagman Staff Sergeant Roseller
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
Echipare with grave misconduct and violation of
RA 6713 for allegedly committing the ff:
a. Extortion from applicants in order to
guarantee their enlistment in the
Philippine Army;
b. Extortion of money from soldiers
seeking reinstatement
c. Anomalies in the clearing of payroll of
the Balik Baril program fund
ODO-MOLEO then ordered the preventive
suspension of MG Barbieto for
6 months during the pendency of the administrative
case.
MG Barbieto filed a Motion for Reconsideration
to the order of the ODO-MOLEO.
Simultaneous with the proceedings before the
ODO-MOLEO, the Army Investigator General
(AIG) was also conducting an investigation on
the same charges against Maj. Gen. Barbieto. The
AIG recommended, and Lt. Gen. Yano, as CG-PA,
approved, the indictment of Maj. Gen. Barbieto for
the ff. violations:
a. Article 55 (Officer Making Unlawful
Enlistment)
b. Article 96 (Conduct Unbecoming of an
Officer and a Gentleman)
c. Article 97 (Conduct Prejudicial to
Good Order and Military Discipline)
MG Barbieto’s 10-day leave of absence then took
effect to pave the way for an impartial investigation
Lt. Gen. Yano then issued an Order for the
"Arrest and Confinement of MG Barbieto an Order
for the "Arrest and Confinement of Major General
Barbieto AFP and SSG Echiparre PA”. Pursuant to
such order MG Barbieto was arrested and confined
to cluster officer housing.
Office of the Army Judge Advocate (OAJA)
recommended the immediate trial of MG Barbieto
before the General Court Martial and the
endorsement of the case to the Proceedings
AFP General Headquarters for the conduct of
General Court Martial.
Without waiting for the resolution by the ODO-
MOLEO of his Motion for Reconsideration of the
preventive suspension order issued against him,
MG Barbieto filed a Petition for Certiorari with
Prayer for the Issuance of a TRO and/or Writ of
Preliminary Injunction with the CA.
24
In his Petition with the CA, MG Barbieto specifically
prayed for:
a. Issuance of TRO
b. Setting of a hearing on the preliminary
injunction
c. After hearing on the preliminary
injunction, the issuance of an order
granting the injunction and making the
injunction permanent
d. Such other and further relief as the
appellate court may deem just and
equitable in the premises
With this, the Court of Appeals then directed
respondents to submit their comment stating the
reasons or justifications why the TRO and/or writ of
preliminary injunction MG Barbieto prayed for
should not be issued.
After all the required pleadings have been
submitted by the parties, the CA issued a
Resolution (on August 6, 2008) denying MG
Barbieto's prayer for a TRO and/or writ of
preliminary injunction. The CA held:
After due consideration of the factual
circumstances of the instant case, we
find no compelling reason to issue an
injunctive writ and/or temporary
restraining order.
The surrounding facts underpinning [Maj.
Gen. Barbieto]'s plea for the issuance of
an injunctive relief are intimately related to
and inextricably intertwined with the issues
raised in the instant Petition for Certiorari.
Moreover, [Maj. Gen. Barbieto] failed to
demonstrate extreme urgency, as well as
great or irreparable injury that he may
suffer while the instant Petition is pending
adjudication. x x x.
xxxx
Here, [Maj. Gen. Barbieto] failed to at least
show a clear and unmistakable right
entitling him to the issuance of a writ of
preliminary injunction and/or temporary
restraining order. (Emphasis supplied.)
The dispositive portion of the Resolution reads:
WHEREFORE, [Maj. Gen. Barbieto]'s
prayer for the issuance of a temporary
restraining order and/or writ of preliminary
injunction is hereby DENIED.
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
MG Barbieto moved for reconsideration of the
CA Resolution above. CA refused to do so.
The CA decreed in its September 28, 2008
Resolution:
In fine, [Maj. Gen. Barbieto]'s Motion for
Reconsideration proffers no substantial
issue which may warrant reversal of the
assailed Resolution.
WHEREFORE, the instant Motion for
Reconsideration is hereby DENIED for
lack of merit.
MG Barbieto filed the instant Petition before the
SC.
It is worthy to note that MG Barbieto is actually
seeking a TRO and/or a writ of preliminary
injunction to enjoin the implementation of 2 distinct
orders, issued by 2 different persons, in 2 separate
proceedings:
1. Preventive suspension order issued
by the ODO-MOLEO; and
2. Order of Arrest issued by Lt. Gen.
Yano
During the pendency of the present Petition, the
ODO-MOLEO issued an Order denying MG
Barbieto’s Motion for Reconsideration of the
preventive suspension order.
Contentions of petitioner (MG Barbieto) before the
SC:
1. That there was a violation of his right
to procedural due process of law
invoking SC Administrative Circular
No 20-95
2. That all elements to warrant the grant
of a writ of preliminary
injunction are
present
Answers of the OMB to the contention of MG
Barbieto:
1. That reliance on SC Administrative
Circular No 20-95 is misplaced
because it applies to trial courts only
OMB posits that procedural due process
has been satisfied by the appellate court
when the latter issued a resolution
requiring the party, whose act was sought
to be enjoined, to file a comment on the
application for a TRO (Sec 4, Rule VI of
the 2002 Internal Rules of the CA)
2. That none of the requisites for the
issuance of a TRO and/or writ of
preliminary injunction exists
25

OMB also contends that the expiration of MG
Barbieto's 6-month preventive suspension renders
the issue on the propriety of such suspension moot
and academic. As such, there is nothing more that
an injunctive relief could seek to enjoin. MG
Barbieto's continued confinement is no longer due
to the preventive suspension order of the OMB, but
pursuant to Lt. Gen. Yano's Order of Arrest.
Lt. Gen. Yano substantially adopts the arguments of
the OMB. He additionally asserts that there is no
reason to enjoin the enforcement of the Order of
Arrest, citing his authority as CG-PA to issue the
same, pursuant to the Articles of War.
Issue
WON the CA committed grave abuse of discretion
amounting to lack or exercise of jurisdiction in
denying petitioner’s prayer for injunctive relief
Held
WHEREFORE, the instant Petition is
DISMISSED. The Resolutions dated 6 August
2008 and 22 September 2008 of the Court of
Appeals in CA-G.R. SP No. 102874 are
AFFIRMED. The Court of Appeals is DIRECTED
to resolve petitioner Maj. Gen. Jose T.
Barbieto's Petition for Certiorari in CA-G.R. SP
No. 102874 with dispatch. Costs against
petitioner.
No, there was no grave abuse of discretion on
the part of the CA in denying petitioner’s prayer
for injunctive relief.
Preventive suspension order before the OMB MG
Barbieto's 6-month suspension, imposed by the
ODO-MOLEO in an Order dated 28 February
2008 in OMB-P-A-08-0201-B,
already expired on 28 August 2008. Such an
event necessarily renders this Petition moot and
academic,
Order of Arrest by Lt. Gen. Yano
The Court finds the present Petition dismissible for
lack of merit.
The grant or denial of a writ of preliminary
injunction in a pending case rests on the sound
discretion of the court taking cognizance of the
case, since the assessment and evaluation of
evidence towards that end involves findings of facts
left to the said court for its conclusive determination.
Hence, exercise of judicial discretion by a court
in injunctive
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
matters must not be interfered with, except
when there is grave abuse of discretion.
The SC held that there was no grave abuse of
discretion on the part of the CA when it refused to
issue the TRO and/or writ of preliminary injunction
to enjoin the enforcement of Lt. Gen. Yano’s Order
of Arrest.
On the reliance of MG Barbieto on SC
Administrative Circular No 20-95, the Court held
that the same Administrative Circular pertains to
applications for TROs and/or writs of preliminary
injunctions filed before trial courts and that the CA
has its own Internal Rules.
Further, under Sec. 2, Rule IV of the 2002 Internal
Rules of the CA, there is no mention of the
requirement that the Presiding Justice must hold a
summary hearing prior to granting or denying such
an application for TRO.
As for preliminary injunction, Sec. 4, Rule IV of
the same Internal Rules provide that the
requirement of a hearing on an application for
preliminary injunction is satisfied with the
issuance by the Court of a resolution served
upon the party sought to be enjoined requiring
him to comment on said application and that the
Court may, in its sound discretion, set the
application for a preliminary injunction for hearing.
Based on the foregoing rule, the CA clearly satisfied
the requirement of a hearing when it directed
respondents to submit their comment on MG
Barbieto's prayer for the issuance of a TRO and/or
writ of preliminary injunction within 10 days from
notice.
While it is true that the right to due process
safeguards the opportunity to be heard and to
submit any evidence one may have in support of his
claim or defense, the Court has time and again held
that where the opportunity to be heard, either
through verbal arguments or pleadings, is accorded,
and the party can "present its side" or defend its
"interest in due course," there is no denial of due
process.
Further, as may be opined on the same Section, the
actual conduct of a hearing on an application for
preliminary injunction is not mandatory and is left to
the sound discretion of the court.
On the contention that the elements to grant a
preliminary injunction are present, the Court held in
the contrary.
20
A preliminary injunction is an order granted at any
stage of an action prior to judgment of final order,
requiring a party, court, agency, or person to refrain
from a particular act or acts.
For the writ to issue, 2 requisites must be present,
namely, the existence of the right to be protected,
and that the facts against which the injunction is to
be directed are violative of said right.
A writ of preliminary injunction may be granted only
upon showing by the applicant of a clear and
unmistakable right that is a right in esse. Maj. Gen.
Barbieto claims that his right in esse that is being
violated herein is his right to liberty.
While the Constitution grants the right to liberty, the
same right is not absolute. There may be instances
when a person must be deprived of such for as long
as due process of law has been observed.
The order of Lt. Gen. Yano for MG Barbieto’s arrest
was held by the SC to be in accordance with the
presumption of good faith and regularity in the
performance of Lt. Gen Yano of his official duties.
The same decision finds basis under Art. 70 of the
Articles of War wherein it provides that any person
subject to military law charged with crime or with a
serious offense under these articles shall be placed
in confinement or in arrest, as circumstances
require and shall be restricted to his barracks,
quarters or tent.
In light of the foregoing, the Court must be careful
not to pre-empt the resolution by the Court of
Appeals of MG Barbieto's Petition for Certiorari in
CA-G.R. SP No. 102874 (pending before the CA),
wherein the propriety of his arrest and continued
confinement is one of the central issues.
The prevailing rule is that the courts should avoid
issuing a writ of preliminary injunction that would in
effect dispose of the main case without trial.
Otherwise, there would be a prejudgment of the
main case and a reversal of the rule on the burden
of proof, since such issuance would assume the
proposition that MG Barbieto is inceptively bound to
prove.
12) Mendoza v. Ubiadas
FACTS:
An administrative complaint for gross ignorance of
the law, bias and partiality was filed against Judge
Ubiadas of the RTC, Branch 72, Olongapo City, in
connection with his issuance in Civil Case No. 427-
0-99, entitled "Alexander Panganiban, et al. v.
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
Angelito Sacro, et al., " of a temporary restraining
order and a writ of preliminary injunction.
Plaintiff Panganiban and his co-plaintiffs filed a
complaint with the RTC for "Declaration of Nullity of
the Election of the Board of Directors and
Committee Officers of the Olongapo Subic
Castillejos San Marcelino Transport Service and
Multi-Purpose Cooperative, Inc.," with a prayer for
the issuance of a temporary restraining order and/or
a writ of preliminary injunction, against the
incumbent members of the Board of Directors,
including its Chairman Mendoza (herein
complainant), and other officers of the cooperative.
Respondent judge issued a TRO enjoining the
members of the Board of Directors and officers of
the cooperative, including persons acting in their
behalf, from performing any act for and in behalf of
the cooperative for a period of twenty (20) days
from receipt of the order.
RTC Decision:
Respondent judge likewise scheduled a hearing on
the petition for the issuance of a writ of preliminary
injunction, requiring the defendants to appear and
show cause why the petition should not be granted.
No hearing, however, evidently took place, and all
that the records would indicate was that respondent
judge resolved to consider "all the pending
incidents, i.e., the plaintiffs' Application for the
Issuance of a Writ of Preliminary Injunction and the
defendants' Manifestation and Motion to Dismiss,"
submitted for resolution. Moreover, Respondent
judge granted the issuance of a writ of preliminary
injunction in favor of the plaintiffs.
ISSUE:
Whether or not respondent judge Ubiadas is guilty
of gross ignorance of the law.
HELD:
YES. Rule 58, Section 4 and Section 5, of the 1997
Rules of Civil Procedure, incorporating the Court's
Administrative Circular No. 20-95 made effective on
1 October 1995 and providing for special rules in
the issuance of temporary restraining orders and
writs of preliminary injunction, emphasizes the need
for hearing and prior notice to the party or person
sought to be enjoined.
In fine, Section 5 of Rule 58 proscribes the grant of
preliminary injunction without hearing and prior
notice to the party or person sought to be enjoined.
(The original provision under Section 5 of Rule 58
where the term "ex parte" described the nature of a
judge's issuance of the twenty-day temporary
restraining order had been deleted pursuant to an
amendment made by the Court en banc in its
resolution in Bar Matter No. 803 of 17 February
1998.) The rules, however, authorize the court to
which an application for preliminary injunction is
made to issue a temporary restraining order if it
should appear from facts shown by affidavits or by
the verified petition that "great or
21
irreparable injury would result to the applicant
before the matter can be heard on notice." The
temporary restraining order shall be effective for a
period of twenty days from notice to the party or
person sought to be enjoined. Within the twenty-day
period, the judge must conduct a hearing to
consider the propriety for the issuance of an
injunction or a preliminary injunction. The twenty-
day period for the efficacy of a temporary
restraining order is non-extendible; the order
automatically terminates at the end of such period
without the need of any judicial declaration to that
effect and the courts have no discretion to extend
the same.

In this instance, the complaint, filed on 21 October

1999, sought the issuance of a temporary
restraining order and/or a writ of preliminary
injunction against herein complainant and the
members of the Board of Directors and officers of
the cooperative. Respondent judge would appear to
have issued, on 28 October 1999, the temporary
restraining order in favor of the plaintiffs and while
he did so in view of the perceived urgency of the
case involved, he, however, failed to conduct a
hearing on the prayer for the issuance of a writ of
preliminary injunction within the time prescribed
therefor. Respondent judge offered no explanation
on why the scheduled hearing on 12 November
1999 did not take place before the writ of
preliminary injunction was granted on 17 November
1999, constraining Judge Asdala, to whom the case
was re-raffled following respondent judge's
inhibition, to nullify the writ of preliminary injunction
issued by respondent judge for having been
effected without prior notice and hearing.

“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
22
13. A.M. No. RTJ-12-2321, October 3,
2012, SPOUSES JESUS G. CRISOLOGO vs.
JUDGE GEORGE E. OMELIO
Facts:
The case involves two parcels of lands originally
owned by So Keng Koc. Having been a defendant
in a number of cases, levies were annotated at the
back of the titles. These subject properties were
sold to one Nilda T. Lam then were sold to JEWM
Agro-Industrial Corporation. Meanwhile, the
complainant-spouses Crisologo obtained
favorable judgment in one Civil Case against So
Keng Koc. The same became final and executory
and a Writ of Execution was issued. Subsequently,
a Notice of Sale was issued by Sheriff Robert M.
Medialdea As the foregoing properties are already
in JEWM’s name, JEWM, through
representative, filed an Affidavit of Third-Party
Claim and an Urgent Motion Ad Cautelam before
RTC, Branch 15. These were denied by the said
court on the ground that it cannot issue a restraining
order directing the sheriff to exclude the subject
properties on the basis of AD CAUTELAM motions.
Aggrieved, JEWM filed a complaint for Cancellation
of Lien, with Application for Writ of Preliminary
Injunction against the Register of Deeds, Davao
City, Sheriff Robert Medialdea, JOHN and JANE
DOES, and all persons acting under their directions
on September 16, 2010. On September 22, 2010,
Atty. Rene Andrei Q. Saguisag, Jr., representing
herein complainant-spouses, argued that the
issuance of the writ of injunction would interfere with
the proceedings of a co-equal court, RTC, Branch
15. The RTC, Branch 14, issued an Order dated
September 27, 2010 directing the issuance of a
preliminary writ of injunction.
Dissatisfied, herein
complainant-spouses filed a Motion
Reconsideration which the same was denied.
Complainant-spouses filed this present case before
the Office of the Court Administrator.
Office of the Court Administrator Ruling:
On the charge of interference with the proceedings
of a co-equal and coordinate court in issuing a writ
of preliminary injunction which frustrates the
execution of a final and executory decision, the
Investigating Justice found that there was no
interference. Section 16, Rule 39 of the Rules of
Court allows third-party claimants of properties
under execution to vindicate their claims to the
property in a separate action with another court and
may issue a temporary restraining order.
“It is literally true that you can succeed best and quickest by helping others to succeed”.
On the charge of issuing a writ of preliminary
injunction without evidentiary hearing, the
Investigating Justice found Judge Omelio guilty. It
was found that Judge Omelio conducted a summary
hearing and issued the writ of preliminary injunction
despite the absence of any testimonial or
documentary evidence.
Issues:
WON Judge Omelio is guilty of:
a 1. Gross ignorance of the law and
interference with the proceedings of a co-equal and
coordinate court in issuing a writ of preliminary
injunction which frustrates the execution of a final
and executory decision;
its 2. Gross ignorance of the law and grave
abuse of discretion for issuing a writ of preliminary
injunction without an evidentiary hearing and in the
absence of a clear and positive ground.
SC Ruling:
We adopt the recommendation of the Investigating
Justice with respect to the charges on interference
with the proceedings of a co-equal and coordinate
court. Yet, we reverse the recommendation of the
Investigating Justice with respect to the charge on
issuance of the writ of preliminary injunction without
an evidentiary hearing and dismiss this charge for
lack of merit.
1. Consistent with Naguit v. Court of Appeals,
JEWM can be considered a third-party claimant and
stranger to the case, because, despite not being the
judgment obligor, JEWM’s properties are being
for
executed for So Keng Koc’s liabilities. The Rules of
Court allow JEWM to vindicate its claim to the
properties in a separate action. The court exercising
jurisdiction over the separate action, which in this
case is RTC, Branch 14, may issue an injunction,
enjoining the execution of JEWM’s properties in
satisfaction of So Keng Koc’s liabilities.
2. Although the general rule is that a
sampling of evidence is required to be submitted
during the hearing on the motion for preliminary
injunction, there are also instances when the writ of
preliminary injunction can be issued based on the
verified application, provided there is notice and
hearing. In this case, for issuing the writ of
preliminary injunction without an evidentiary hearing
and in the absence of a clear and positive ground.
The Rules of Court
- Napoleon Hill
23
provide that a temporary restraining order may be
issued not only based on affidavit, but also based
simply on the verified application and its supporting
documents, provided there is notice and hearing.
Judge Omelio is given a wide latitude of discretion
in issuing the writ of preliminary injunction after the
hearing, especially when a clear and unmistakable
right to the issuance of the injunctive writ can be
gleaned from affidavits or the verified application
and its supporting documents, considering the
peculiar circumstances of this case. This case
concerns the cancellation of liens on the transfer
certificates of title, involving issues which can be
comprehended by the judge based on a cursory
examination of the verified application and its
supporting documents. During the hearing, both
counsels were given the opportunity to argue their
case. But neither counsel raised the issue of
authenticity of the titles. Both were in agreement (a)
that there were several liens over the properties; (b)
that the property held by JEWM was a derivative
title in satisfaction of the first lien; and (c) that the
Sps. Crisologo were executing JEWM’s property
based on the second lien. With no factual issues or
disputes, the issues raised by counsels were purely
legal in nature, which could be resolved from an
examination of the verified application and its
supporting documents. A clear and unmistakable
right to the issuance of the writ of injunction in favor
of JEWM could easily be gathered from examining
the submitted pleadings and their supporting
documents.
14. Estares v. Court of Appeals, G.R. No.
144755, January 8, 2005
FACTS:
Spouses Estares obtained a loan from Prominent
Lending & Credit Corporation (PLCC) for
P800,000.00 secured by a real estate mortgage
over their house and lot. 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.
Spouses Estares filed an action to declare the
promissory note and the real estate mortgage null
and void for not reflecting their true agreement,
coupled with a prayer for a prayer for 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. They alleged that the promissory
note and the real estate mortgage were falsified
because they affixed their signatures on two blank
documents and that 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.
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
PLCC, on the other hand, argued 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 RA 3765.
RTC Decision:
The trial court initially issued a TRO in favor of the
Estares spouses. The parties agreed to maintain
the status quo pending trial.
After both parties were able to present their
evidence, the trial court denied the application for a
writ of preliminary injunction, holding that the
Estares spouses failed to establish the facts
necessary for an injunction to issue.
Spouses Estares then filed a petition for certiorari
and prohibition with the Court of Appeals ascribing
grave abuse of discretion upon the trial court for
denying their prayer for a writ of preliminary
injunction.
Meanwhile, with no restraining order enjoining him,
Sheriff Magat conducted an auction sale and sold
the house and lot to PLCC as the highest bidder.
CA Decision:
CA 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.
ISSUE:
Whether or not Spouses Estares are entitled to a
writ of preliminary injunction.
HELD:
NO, petition is dismissed.
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
24
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 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 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.
Moreover, 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 court's 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:
A. It lacks jurisdiction
B. Fails to consider and make a record of the
factors relevant to its determination
C. Relies on clearly erroneous factual
findings
D. Considers clearly irrelevant or improper
factors
E. Clearly gives too much weight to one
factor
F. Relies on erroneous conclusions of law or
equity or
G. 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.
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
15. Mabayo Farms v. CA - Gazo
On August 22, 1969, the Bureau of Lands declared
Francisco Domingo, Reynaldo Florida, Cornelio
Pilipino and Severino Vistan, lawful possessors of
Lot 1379 of the Morong, Bataan Cadastre, which
amounts to 144 hectares. Domingo, Florida, Pilipino
and Vistan through their forebears and by
themselves had been in open, notorious, and
exclusive possession of portions of Lot 1379 since
1933 in the concept of owners. The Bureau then
directed them to confirm their titles over the
property by filing the appropriate applications for the
portions of the property respectively occupied by
them.
In October 1970, petitioner bought the respective
portions of Domingo, Florida, Pilipino and Vistan,
totaling 69,932 square meters and entered into a
compromise settlement with six other persons
occupying the property, whose applications had
been rejected by the Bureau. Petitioner then filed an
application for land registration docketed as LRC
Cad. Rec. No. N-209 with the then Court of First
Instance of Bataan, Branch 1. The application was
contested by several oppositors, among them the
heirs of one Toribio Alejandro.
The trial court decided the land registration case in
favor of petitioner. The Court of Appeals affirmed.
Later in June 1997, a group of occupants entered
the land, destroyed the fences and drove away
livestock owned by petitioner.
Petitioner filed a complaint for injunction with
damages, with a prayer for temporary restraining
order (Civil Case No. 6695) with the RTC, with
defendants Juanito Infante, Domingo Infante, Lito
Mangalidan, Jaime Aquino, John Doe, Peter Doe,
and Richard Doe.
The RTC issued the TRO and the sheriff served
copies on the defendants. The sheriff accompanied
petitioner's president to the property where they
found five persons cultivating the land who refused
to give their names or receive copies of the TRO.
They claimed they were only farm workers of a
certain Antonio Santos who allegedly owned the
land.
The RTC issued a writ of preliminary injunction
restraining defendants from entering and cultivating
the disputed property. The writ was also served on
respondent who was occupying a portion of the lot.
Private respondent (PR) filed a special civil action
for certiorari with the CA. PR averred that he only
learned of the writ when he secured a copy of the
order. He claimed to be an innocent purchaser for
value of the property from Francisco, Armando, and
Conchita, all surnamed Alejandro, and the
injunction prevented him from using his property.
He alleged he was not a party to Civil Case No.
6695 and that it was grave abuse of discretion for
RTC to enforce the writ against him since it did not
have jurisdiction over him.
25
CA ruled in PR's favor.
ISSUE: W/n PR should have been impleaded for
the injunctive writ to be applicable against him.
HELD: Yes, pursuant to Section 11, Rule 3 of the
1997 Rules of Civil Procedure.
Petitioner is incorrect in insisting that respondent be
vigilant in protecting his rights by intervening in Civil
Case No. 6695 for PR's inclusion as defendent is
procedurally correct since no fatal judgment had yet
been rendered in said case.
To warrant intervention, two requisites must concur:
(a) the movant has a legal interest in the matter in
litigation, and (b) intervention must not unduly delay
or prejudice the adjudication of the rights of the
parties nor should the claim of the intervenor be
capable of being properly decided in a separate
proceeding. The interest, which entitles a person to
intervene in a suit, must involve the matter in
litigation and of such direct and immediate
character that the intervenor will either gain or lose
by the direct legal operation and effect of the
judgment.
Civil Case No. 6695 was an action for permanent
injunction and damages. As a stranger to the case,
private respondent had neither legal interest in a
permanent injunction nor an interest on the
damages to be imposed, if any, in Civil Case No.
6695. To allow him to intervene would have
unnecessarily complicated and prolonged the case.
CA is correct in ruling that petitioner should have
been impleaded as an additional defendant to make
the injunctive writ applicable against him. The rule
categorically provides that "Parties may be dropped
or added by order of the court on motion of any
party or on its own initiative at any stage of the
action and on such terms as are just."
16. Valley trading v. CFI of Isabella, G.R. No. L-
49529, March 31, 1989
Facts:
A petition for certiorari challenging the orders of the
CFI of Isabella.
Valley trading Co. filed a complaint seeking a
declaration of the supposed nullity of Ordinance No.
t-1, Revenue code of Cauayan, Isabela, which
imposed tax on retailers, independent wholesalers
and distributors and also seeks for refund with 14%
interest per annum. Petitioners also prayed for the
issuance of a writ of preliminary prohibitory
injunction to enjoin the collection of said tax.
Position of the petitioner: Said ordinance imposed a
graduated fixed tax based on sales that in effect it
imposes a sales tax in contravention of PD 231 as
amended by PD 426 or the Local Tax Code
Position of respondents; it is an annual fixed
business tax, not a percentage tax on sales
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
imposable by a municipality under tax code. Citing
the ruling of Acting Secretary of finance upholding
the validty of said tax that the same is annual
graduated fix tax on the privilege of business and
not percentage tax on sales
4. Petitionercontends that a hearing on the merits is
necessary before a motion for a writ of preliminary
junction may be denied invoking section 7 rule 58 of
the rules of court which provides that “after hearing
on the merits. The court may grant or refuse,
continue, modify, or dissolve the injunction as
justice may require”. Furthermore, respondents
reliance on Section 6 rule 58 refers to the objections
that might be interposed to the issuance of the writ
or the justification for dissolution of an injunction
previously issued ex parte, but that nowhere is it
mention that a hearing is not necessary.
Issue:
● Is the petitioner entitled to hearing for
issuance of writ of preliminary injunction?
● Is the petitioner entitled for issuance of writ
of preliminary injunction?
Ruling:
● As correctly pointed out by petitioner that
Section 6 Rule 58 provides for ground for
objections, he ignores the circumstances
under which these objections may be
appreciated by the Trial court. Thus, if the
ground is insufficiency of complaint the
same is apparent from the complaint itself
and preliminary junction may be refused
outright with or w/out notice to adverse
party. In fact, under said section, the court
may also refuse an injuction on other
grounds on the basis of affidavits. In the
foregoing instances, a hearing is not
necessary.
Reliance of petitioner of Sec 7 Rule 58 is
also misplaced. It merely specifies that the
court may take application of the writ if
there is a hearing on the merits; it does not
make hearing mandatory or a
preqrequiste. Otherwise, it will force to
conduct a hearing even if from the
pleadings alone it can be ascertained that
the movant is not entitled to the writ.
● The issuance of Writ of preliminary
injunction rest upon the sound discretion of
the court, conditioned on the clear and
positive right of the movant which is to be
protected. It is an extraordinary pre-
emptive remedy available on the grounds
expressed by law.
Circumstances required are not present in
the bar. The damage to be caused to the
petitioner is not ireppairable, whatever it
shall have paid is easily refundable.
Besides, damage to property rights must
perforce to take a back seat to the
paramount need of the state to sustain
26
 Lupa, Valenzuela, and
governmental functions. Compared to the
damage to the State which may be caused
by reduced financial resources, the
damage to petitioner is negligible.

Equally pertinent is the rule that courts should avoid

issuing a writ of preliminary injunction which, in
effect, would dispose of the main case without trial.
Furthermore, such action will run counter to the well
settled rule that laws are presumed to be valid
unless and until the courts declare the contrary in
clear and unequivocal terms. A court should issue a
writ of preliminary injunction only when the
petitioner assailing a statute has made out a case of
unconstitutionality or invalidity strong enough to
overcome, in the mind of the judge, the presumption
of validity, aside from a showing of a clear legal
right to the remedy sought. The mere fact that a
statute is alleged to be unconstitutional or invalid
will not entitle a party to have its enforcement
enjoined.

17. PCIB vs CA, G.R.No. 114951, July 18,2003

Note: RTC-Makati lifted its order of PI, RTC-Manila

issued another PI, CA nullified the lifting of the first
PI, this is Rule 45 (pure question of law)

Facts:

Between January 1988 to April 1990, the private

respondents Ley Construction & Development
Corporation (Ley Construction), LC Builders &
Developers Corporation (LC Builders), Metro
Container Corporation (MCC) and the spouses
Manuel and Janet Ley obtained loans from the
petitioner Philippine Commercial International Bank
(PCIB) amounting to around to P98,800,000
evidenced by eighteen promissory notes. To secure
the said loans, the private respondents executed
real estate mortgages and amended real estate
mortgages over its property situated in
Mandaluyong covered by Transfer Certificate of
Title (TCT) No. 43131, and its property situated in
Valenzuela City covered by TCT Nos. 6572 and
6580. They also executed three chattel mortgages
over several of their movable properties in favor of
petitioner PCIB.

The private respondents defaulted in the payment

of their obligations in the amount of P105,442,145
and despite demands made by petitioner PCIB,
failed to pay their account. On August 16, 1991,
petitioner PCIB filed separate requests for
extrajudicial foreclosure of the amended real estate
mortgages with the petitioner ex-officio sheriff of the
RTC of Pasig City and with the petitioner ex-officio
sheriff of the RTC of Valenzuela, and a letter for the
extrajudicial foreclosure of chattel mortgage with the
petitioner ex-officio sheriff of the RTC of
Valenzuela.3 In due course, the petitioner ex-officio
sheriff of Pasig City set the sale at public auction on
September 24, 1991 of the property covered by
TCT No. 43131 on September 24, 1991.
Meanwhile, the petitioner ex-officio sheriff of
Valenzuela City set the sale of the personal
properties at public auction on September 16, 1991
at the compound of the mortgagors at Barrio Pulang
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
27
the sale of properties covered by TCT Nos. 6572
and 6580 on October 3, 1991.

Case (Injunction with TRO):

-- COMPLAINT --

Before any of the auction sales could proceed, the

private respondents, through their counsel, the law
firm of Quisumbing Torres & Evangelista, filed a
complaint against the petitioners PCIB and the ex-
officio sheriffs on September 10, 1991 with the
RTC of Makati, for injunction and damages with a
prayer for the issuance of a temporary restraining
order, seeking to enjoin the said sheriffs from
selling at public auction the real and personal
properties covered by the mortgage contracts. The
private respondents as plaintiffs had eight causes
of action against the petitioner. On their first to
fourth causes of action, the private respondents as
plaintiffs therein alleged inter alia that petitioner
PCIB had agreed to the extensions of the due
dates of the private respondents' loan to March
1992, with a moratorium on the payment of interest
during the extension of the same; however,
petitioner PCIB foreclosed the said mortgages
before the lapse of the said extension. On their fifth
to eighth causes of action, the private respondents
alleged inter alia that the notice of sale of the
chattels was defective because (a) it included the
sale of the chattels for the payment of loans not
covered by the said chattels; (b) it refers to the
foreclosure of only one chattel mortgage but the
properties sought to be sold covered all the
properties subject of the three chattel mortgages,
and as such, the requests to foreclose the chattel
mortgages were premature; and (c) it failed to
comply with the requirements of Section 14 of Act
No. 1508, otherwise known as the Chattel
Mortgage Law.

-- MOTION TO DISMISS --

Instead of filing an answer to the complaint,

petitioner PCIB filed a motion to dismiss on the
ground that it did not grant the private respondents
any extension to pay their account; hence, the
private respondents as plaintiffs had no cause of
action against the petitioner.

The RTC issued an order denying the motion to

dismiss and granting a writ of preliminary injunction
enjoining the conduct of any of the auction sales,
conditioned upon the posting of a bond by the
private respondents in the amount of P1,000,000.
On November 20, 1991, petitioner PCIB filed a
motion for reconsideration of the October 16, 1991
Order, but the court denied the said motion per its
Order on February 26, 1992. The private
respondents posted the requisite injunction bond of
P1,000,000.

-- CA, ANSWER, MOTION TO LIFT PI --

Petitioner PCIB filed a petition for certiorari and

mandamus7 with the Court of Appeals (CA) for the
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
28
nullification of the October 16, 1991 and February
26, 1992 Orders of the RTC. It was denied.
Simultaneous with the filing of its answer to the
complaint, petitioner PCIB filed a second motion to
lift the writ of preliminary injunction issued by the
court on October 16, 1991 on the following grounds:
(a) at the time of the filing of the said second
motion, the private respondents' obligation had
reached P161,033,070.49; hence, the bond filed by
the private respondents in the amount of
P1,000,000 was grossly inadequate; and (b) the
extension alleged by the private respondents to
have been granted to them by petitioner PCIB to
pay their obligation had already lapsed.16 The
petitioner served a copy of the said motion on the
law firm of San Vicente De Leon & Associates
RTC - Makati granted LIFTED the PI
-- 2nd COMPLAINT WITH PI ---
Instead of filing with the RTC of Makati in Civil Case
No. 91-2495 a motion for the reconsideration of its
February 23, 1993 Order or a supplemental
complaint therein, the private respondents filed on
March 17, 1993 with the RTC of Manila, through
Atty. Malaya, a complaint for injunction and
damages against the petitioners docketed as Civil
Case No. 93-6513524 with a prayer for a temporary
restraining order to enjoin the respondents and
proceeding with the auction sale of the mortgaged
chattels on March 18, 1993
RTC - Manila granted ANOTHER PI
-- CA --
Respondents filed a case in the CA to declare as
null and void the lifting of the 1st PI.
On August 13, 1993, the CA rendered its decision in
CA-G.R. SP No. 31251 setting aside the February
23, 1993 Order of the RTC of Makati, declaring the
same null and void and restoring the status of the
parties prior to the issuance of the said order.
Issue:
Whether RTC - Manila could granted the PI
considering that RTC - Makita had already granted
the first PI and lifted it?
Ruling:
No. It violates the rule on judicial stability.
The private respondents even brazenly violated the
principle of judicial stability, which essentially states
that the judgment or order of a court of competent
jurisdiction may not be interfered with by any court
of concurrent jurisdiction for the simple reason that
the power to open, modify or vacate the said
judgment or order is not only possessed but is
restricted to the court in which the judgment or
order is rendered or issued. Accordingly, no court
has the power to interfere by
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
injunction with the judgment or decrees of a court of
concurrent jurisdiction having the power to grant
relief sought by injunction. The various branches of
the RTC having as they have the same or equal
authority and exercising as they do concurrent and
coordinate jurisdiction should not, cannot and are
not permitted to intervene with their respective
cases, much less with their orders or judgments. A
contrary rule would lead to confusion, and seriously
hamper the administration of justice
The private respondents filed on March 17, 1993
their complaint with the RTC of Manila in Civil Case
No. 93-65135 for injunction with a plea for a
temporary restraining order and writ of preliminary
injunction to enjoin only the sale at public auction of
the chattels on March 18, 1993, despite the
admission made in their complaint that the RTC of
Makati had already enjoined the said sale at public
auction. The private respondents did not allege in
its complaint that the RTC of Makati had lifted the
said writ heretofore issued by it. Because of the
temporary restraining order issued by the RTC of
Manila, the sale at public auction of the chattels on
March 18, 1993 had to be reset. What the RTC of
Makati allowed in its February 23, 1993 Order, the
RTC of Manila enjoined, via the issuance of the
temporary restraining order prayed for by the
private respondents. The sale at public auction had
to be reset to May 4, 1993 only to be stymied anew
when the private respondents filed another
complaint docketed as Civil Case No. 93-65757
with the RTC of Manila on May 3, 1993, praying for
a temporary restraining order and writ of preliminary
injunction to enjoin the said sale at public auction.
The private respondents admitted in their complaint
that their emergency motion for the reconsideration
of the February 23, 1993 Order of the RTC of
Makati was still unresolved. Moreover, at the time
the private respondents filed their complaint in Civil
Case No. 93-65757, the Order of the RTC of Manila
in Civil Case No. 65135 had not yet become final
and executory. The petitioner sheriff had to reset
the said sale on June 14, 1993 when the RTC of
Manila issued in Civil Case No. 93-65757 another
temporary restraining order. Although the sale at
public auction of the chattels had been enjoined by
the RTC of Manila in Civil Case No. 93-65757, the
private respondents filed their petition for certiorari
and prohibition with a plea for a temporary
restraining order or writ of preliminary injunction to
enjoin the sale of the mortgaged chattels at public
auction on June 14, 1993. In fine, the private
respondents sought injunctive relief from the CA to
enjoin the sale at public auction of the chattels on
June 14, 1993 despite the pendency of their
complaint with the RTC of Manila in Civil Case No.
93-65757, praying for the same injunctive relief. The
private respondents were able to frustrate the
February 23, 1993 Order of the RTC of Makati not
only once but three times, through temporary
restraining orders issued by the RTC of Manila, and
through the assailed decision of the CA. The two
branches of the RTC of Manila saw through the
nefarious ploy of the private respondents and
issued separate orders dismissing the complaints
on the ground of litis pendentia, forum shopping,
and violation of the principle of judicial stability. We
29
note that the RTC of Manila in Civil Case No.

“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
30
93-65757 even directed the private respondents to
pay jointly and severally to the petitioners treble
costs, and gave the petitioners the option to initiate
disciplinary action against the counsel of the private
respondents. The private respondents did not even
appeal the order of the two branches of the RTC of
Manila.

Civ Pro ruling:

It exists where the essential requisites of litis

pendentia are present or where a final judgment in
one case will amount to res judicata in another. Litis
pendentia as a ground for the dismissal of an action
has the following essential requisites: (a) identity or
parties, or at least such parties who represent the
same interests in both actions; (b) identity of rights
asserted and relief prayed for, the relief being
founded on the same facts; (c) the identity with
respect to the two preceding particulars in the two
cases is such that any judgment that may be
rendered in the pending case, regardless of which
party is successful would amount to res judicata in
the other case.61 This Court ruled that where a
litigant sues the same party against whom another
action or actions for the alleged violations of the
same right and the enforcement of the same relief
is/are still pending, the defense of litis pendentia in
one case is a bar to the other or others.

“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
31

RULE 59- RECEIVERSHIP
CASES:
1. Commodities Storage & Ice Plant Corporation v. Court of
Appeals, 274 SCRA 439
One liner: A receiver of real or personal property may be
appointed by the court when it appears from the pleadings
or such other proof as the judge may require, that the party
applying for such appointment has complied with the
requirements set forth by the Rules of Court. The
appointment of a receiver is not a matter of absolute right;
depends upon sound discretion of the court.
FACTS: Spouses Trinidad obtained a loan of P31,000 from Far
East Bank & Trust Company to purchase Sta. Maria Ice
Plant & Cold Storage. The loan was secured by a mortgage
over the ice plant and the land to which it stands. Upon
failure to pay the loan, the bank extrajudicially foreclosed
the mortgage and was sold to public bidding, it being the
highest bidder. After it registered the certificate of sale, it
took possession of the property.
The spouses filed for the reformation of the loan
agreement, annulment of the foreclosure sale and
damages. This was dismissed by the RTC Bulacan for
failure to pay the docket fees without prejudice of
refiling.
The spouses filed at RTC Manila for damages,
accounting and fixing of redemption period. As
provisional remedy, they also filed “Urgent Petition for
Receivership.” They alleged that: (a) the bank took
possession of the property forcibly and without notice;
(b) its occupation resulted the destruction of their
financial and accounting records making it impossible
to pay their employees and creditors; (c) the toxic
emission of the plant poses a hazard to the health of
the people in the brgy.
The respondents filed a “Motion to Dismiss and
Opposition to Plaintiff’s Petition for Receivership.” It
alleged that they don’t have a cause of action and the
venue had been improperly laid; and for failure to pay
the proper docket fees and violated the rule on forum-
shopping.
The RTC granted the petition for receivership,
appointed Ricardo Pesquera as receiver and asked the
spouses to post a bond of P2,000,000. Upon petition
for certiorari by the bank to the CA, the CA annulled
the order of receivership and dismissed petitioner’s
complaint for improper venue and lack of cause of
action.
parties to the action for purpose of preserving and
conserving the property in litigation and prevent its
possible destruction, if it were left in the possession of
any of the parties.
A petition for receivership under Section 1 (b) of Rule
59 requires that the property or fund must be in danger
of loss, removal or material injury which necessitates
protection or preservation. The guiding principle is the
prevention of imminent danger to the property.
ITCAB, petitioner anchored their claim under Section 1
(b) of Rule 59. They argue that the ice plant which is
the subject of the action was in danger of being lost,
removed and materially injured because of the
“imminent perils”: (a) danger to the lives, health and
peace of mind of the inhabitants living near the plant;
(b) drastic sanctions brought against the plaintiff by
affected 3rd persons; and (c) rapid reduction of the
plant into a scrap heap.
The court does not find the necessity for the
appointment of a receiver for petitioners have not
sufficiently shown that the plant is in danger of being
wasted and reduced to a scrap heap and that the
property has been materially injured which
necessitates its protection and preservation. In fact, the
leak in the ice plant, as manifested in the open court,
had already been remedied. Whatever danger there
was to the community and the environment had
already been contained. The drastic sanctions that
may be brought against the spouses due to their
inability to pay their employees and creditors does not
concern the plant itself. These claims are personal
liabilities of petitioners.
Furthermore, the general rule is that neither party to a
litigation should be appointed as receiver without the
consent of the other because a receiver should be a
person indifferent to the parties and should be impartial
and disinterested. The power to appoint receiver must
be exercised with extreme caution. It is only when the
circumstances so demand, either because there is
imminent danger that the property sought to be placed
in the hands of a receiver be lost or because they run
the risk of being the in jury thereby caused be greater
than the one sought to be avoided.
ITCAB, the receiver appointed appears to be a repr
not aware that petitioners nomina esentative of
petitioners. The bank alleges that it was ted Mr.
Pesquera as receiver. IN VIEW WHEREOF, the
decision of the CA is AFFIRMED.

ISSUE: WON the petition for receivership is proper

2. Pacific Merchandising Corporation v. Consolacion
HELD: NO. A receiver of real or personal property Insurance and Surety Co., Inc. 73 SCRA 564
may be appointed by the court when it appears from One liner: Receiver cannot operate independently of the
the pleadings or such other proof as the judge may court.He cannot enter into any contract without its approval.
require, that the party applying for such appointment
Facts: Pacific instituted an action against Consolacion, who in
ha (1) an actual interest in it; and (2) that (a) such
property is in danger of being lost, removed or turn filed a third party complaint against Pajarillo for
materially injured; or (b) whenever it appears to be the payment of P2562.88. The City Court ordered Consolacion
most convenient and feasible means of preserving or to pay. Pajarillo appealed and the parties submitted a
administering the property in litigation. A receiver is a Stipulation of Facts.
person appointed by the court in behalf of all the
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
32
It stated that a judgement was rendered in favor of
Pacific against Leo Enterprises and a writ of execution
was issued thereof. Pajarillo was appointed as
Receiver and subsequently blocked the public sale. He
then approached Consolacion to apply for a surety
bond to guarantee the obligation of Leo Enterprises.
Pacific received P2000 but Pajarillo refused to pay the
balance, stating that as he was not the Receiver of the
property, he had no more liability as to Pacific.
The RTC rendered a ruling stating:
1) Since the unpaid claim represents the cost of certain
materials used in the construction of the Paris Theatre,
the possession of which reverted to Gregorio V.
Pajarillo as owner of said property by virtue of the
judgment in Civil Case No. 50201, "it is only simple
justice that Pajarillo should pay for the said claim,
otherwise he would be enriching himself by having the
said building without paying plaintiff for the cost of
certain materials that went into its construction";
(2) "under Section 7 of Rule 61 of the former Rules of
Court, one of the powers of a receiver is to pay
outstanding debts, and since the said plaintiff's claim
has been outstanding since August 27, 1962, if not
before, Pajarillo should have paid the same long before
the alleged termination of the receivership on July 1,
1963";
(3) the procedure outlined in Section 8 of the Rule,
namely, that whenever the court "shall determine that
the necessity for a receiver no longer exists, it shall,
after due notice to all interested parties and hearing,
settle the accounts of the receiver, direct the delivery of
the funds and other property in his hands to the
persons adjudged entitled to receive them, and order
the discharge of the receiver from further duty as such",
has not been followed; and
(4) when Gregorio V. Pajarillo undertook to pay the
amount owed to plaintiff (Annex "C") and executed the
surety bond (Annex "D") in favor of plaintiff, he
"stepped into the shoes" of the debtor, Leo Enterprises,
Inc., "and the properties of the said debtor having all
subsequently passed on to Pajarillo, there is no reason,
legal or otherwise, for relieving defendants of their said
undertaking
It likewise declared that "when Atty. Pajarillo assumed
the obligation of Leo Enterprises, Inc., as a Receiver,
there was a subrogation of the party liable and,
therefore, the plaintiff cannot enforce the judgment in
Civil Case No. 49691 against Leo Enterprises, Inc.".
The Court of Appeals referred the case to the Supreme
Court on the ground that only questions of law are
involved.
Issue: WON Pajarillo is liable for the unpaid balance?
Held: Yes. A receiver is not an agent or representative
of any party to the action. He is an officer of the court
exercising his functions in the interest of neither
plaintiff nor defendant, but for the common benefit of all
the parties in interest. He performs his duties "subject
to the control of the Court", and every question
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
involved in the receivership may be determined by the
court taking cognizance of the receivership
proceedings. Thus, "a receiver, strictly speaking, has
no right or power to make any contract binding the
property or fund in his custody or to pay out funds in
his hands without the authority or approval of the court.
Pajarillo did not secure the court’s approval in
obtaining the performance bond or indemnity
agreement, as such said contracts are deemed to be
his own. Unauthorized contracts of a receiver do not
bind the court in charge of receivership. They are the
receiver's own contracts and are not recognized by the
courts as contracts of the receivership. Consequently,
the aforesaid agreement and undertaking entered into
by appellant Pajarillo not having been approved or
authorized by the receivership court should, therefore,
be considered as his personal undertaking or
obligation.
Certainly, if such agreements were known by the
receivership court, it would not have terminated the
receivership without due notice to the judgment
creditor as required by Section 8 of Rule 59 of the
Rules of Court. This must be assumed because of the
legal presumption that official duty has been regularly
performed. Indeed, if it were true that he entered into
the agreement and undertaking as a receiver, he
should have, as such receiver, submitted to the court
an account of the status of the properties in his hands
including the outstanding obligations of the
receivership. Had he done so, it is reasonable to
assume that the judgment creditor would have
opposed the termination of the receivership, unless its
claim was paid. Having failed to perform his duty, to
the prejudice of the creditor, appellant should not be
permitted to take advantage of his own wrong.
RULE 60. REPLEVIN
Cases
1. BA Finance Corporation v. Court of Appeals, 258
SCRA 102
One liner: Replevin is both a from of principal remedy
and of a provisional relief. Refer either to an action
itself – to regain the possession of personal chattels
being wrongfully detained from the plaintiff by another
– or a provisional remedy – that would allow the
plaintiff to retain the thing during the pendency of the
action and hold it pendente lite.
Facts:
The case at bar is a suit for replevin and damages.
The spouses Manahan executed a promissory note
binding themselves to pay Carmaster Inc. the amount
P83,080 in thirty-six monthly installments. To secure
payment executed a deed of chattel mortgage over a
motor vehicle. Carmaster later assigned the
promissory note and the chattel mortgage to petitioner
BA Finance Corporation with the conformity of the
Manahans. When the latter failed to pay the due
installments petitioner sent demand letters. The
demands not having been heeded, petitioner filed a
33
complaint for replevin with damages against the
spouses, as well as against a John Doe, praying for
recovery of the vehicle with an alternative prayer for
the payment of a sum money should the vehicle not be
returned. Upon petitioner’s motion and the filing pf a
bond lower court issued a writ of replevin. The court,
however, cautioned petitioner that should summons be
not served on the defendants within 30 days from the
writ’s issuance, the case would be dismissed to failure
to prosecute. A few months later, the court issued an
order “Perusal of the record shows that an order for the
seizure of personal property issued. However, to date,
there is no showing that the principal defendants were
served with summons inspite of the lapse of 4 months.
Above-entitled case hereby ordered dismissed for
failure to prosecute and further ordering the plaintiff to
return the property seized with all its accessories to
defendant John Doe in the person of Roberto Reyes”.
Petitioner filed a notice of dismissal of the case
“without prejudice and without pronouncement as to
costs, before service of Summons and Answer, under
Section 1, Rule 17 of the ROC. It also sought in
another motion the withdrawal of the replevin bond.
The court, merely noted the notice of dismissal and
denied the motion to withdraw the replevin bond
considering that the writ of replevin had meanwhile
been implemented. Private respondent filed a motion
praying that petitioner be directed to comply with the
court order requiring petitioner to return the vehicle to
him. Petitioner filed a motion for reconsideration
contending a.) dismissal of the case was tantamount to
adjudication on the merits that thereby deprived it with
the remedy to enforce the promissory note, the chattel
mortgage and the deed of assignment b.) order to
return the vehicle to private respondent was a
departure from jurisprudence recognizing the right of
the mortgagor to foreclose the property to respond to
the unpaid obligation secured by the chattel mortgage
c.) no legal and factual bases for the court’s view that
the filling of the replevin case was characterized by evil
practices.
RTC Ruling:
The Regional Trial Court granted petitioner’s motion for
reconsideration and accordingly recalled the order
directing the return of the vehicle to private respondent,
set aside the order dismissing the case, directing
petitioner to cause the service of summons. Petitioner
filed a motion to declare private respondent in default.
The court granted for failure to file the answer within
reglementary period. The court likewise granted
petitioner’s motion to set the case for the presentation,
ex parte, of evidence. Petitioner, submitted the
promissory note, deed of chattel mortgage, deed of
assignment, statement of account in the name of
Florencia Manahan and two demand letters.
RTC rendered a decision dismissing the complaint
against the Manahans for failure of petitioner to
prosecute the case against them. Dismissed the case
against private respondent for failure of petitioner to
show any legal basis for said respondent’s liability.
CA Ruling:
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
In the Court of Appeals, petitioner asserted that a suit
for replevin aimed at the foreclosure of the chattel is an
action quasi in rem which does not necessitate the
presence of the principal obligors as long as he court
does not render any personal judgement against them.
This argument did not persuade the appellate court, “In
the case at bar, the court cannot render any judgement
binding on the defendants spouses for having allegedly
violated the terms and conditions of the promissory
note and the contract of chattel mortgage on the
ground that the court has no jurisdiction over the
persons, no summons having been served on them.
The next contended by appellant that as between
appellant, as mortgagee, and John doe, whose right to
possession is dubious if not totally no-existent, it is the
former which has the superior right of possession
which the CA could not agree, for the vehicle was
taken from the possession of said Robert Reyes, a
third person with respect to the contract of chattel
mortgage between the appellant and the defendants
spouses Manahan. Petitioner’s motion for
reconsideration was denied.
Issue: whether a mortgagee can maintain an action for
replevin against any possessor of the object of a
chattel mortgage even if the latter were not a party to
the mortgage.
Ruling: Replevin is both a from of principal remedy
and of a provisional relief. Refer either to an action
itself – to regain the possession of personal chattels
being wrongfully detained from the plaintiff by another
– or a provisional remedy – that would allow the
plaintiff to retain the thing during the pendency of the
action and hold it pendente lite. The action is primarily
possessory in nature and generally determines nothing
more than the right of possession. Mixed action being
partly in rem and partly in personam. In rem, insofar as
the recovery of specific property is concerned and in
personam as regards to damages involved. Action in
rem, right of the plaintiff to obtain possession of
specific personal property by reason of his being the
owner or his having special interest therein. Person in
possession of the property sought to be replevied is
ordinarily the proper and only necessary party
defendant. Rule 60 of ROC allow an application for
immediate possession of the property but the plaintiff
must show that he has a good legal basis.
Where the right of the plaintiff to the possession of the
specific property is so conceded or evident, the action
need only be maintained against him who so
possesses the property. In case the right of possession
on the part of the plaintiff, or his authority to claim such
possession or that of his principal, put to great doubt. It
could become essential to have other persons involved
and accordingly implead for a complete determination
and resolution of the controversy. Since the
mortgagee’s right of possession is conditioned upon
the actual fact of 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 full and conclusive determination of the
case. When the mortgagee seeks a replevin in order
effect the eventual foreclosure of the mortgage, it is not
only the existence of, but also the mortgagor’s default
on, the chattel mortgage that among other things, can
properly uphold the right to replevy the property. The
34
 burden to establish a valid justification for that action jurisdiction in approving the replevin bond and rejecting
lies with the plaintiff. An adverse possessor, who is not petitioner’s counter bond
the mortgagor, cannot just be deprived of his Ruling:
possession, let alone be bound by the terms of the
chattel mortgage contract, simply because the The provisional remedy of replevin is in the nature
mortgagee brings up an action for replevin. of a possessory action and the applicant who
seeks immediate possession of the property
2. YANG vs. HON. VALDEZ, G.R. No. 73317 August involved need not be holder of the legal title to the
31, 1988 property. It suffices, if at the time he applies for a
writ of replevin, he is, in the words of Section 2,
One liner: The provisional remedy of replevin is in the Rule 60, "entitled to the possession thereof."
nature of a possessory action and the applicant who Section 2. Rule 60. Affidavit and Bond. – The applicant
seeks immediate possession of the property involved must show by his own affidavit or that of some other
need not be holder of the legal title to the property. It person who personally knows the facts:
suffices, if at the time he applies for a writ of replevin, (a) That the applicant is the owner of the property
he is "entitled to the possession thereof." claimed, particularly describing it, or is entitled to the
possession thereof;
(b) That the property is wrongfully detained by the
Facts:
adverse party, alleging the cause of detention thereof
Spouses Ricardo and Milagros Morante brought an
according to the best of his knowledge, information,
action in the RTC against petitioner Thomas Yang and
and belief;
Manuel Yaphockun, to recover possession of two (2)
(c) That the property has not been distrained or taken
Isuzu-cargo trucks. They alleged that they had actual
for a tax assessment or a fine pursuant to a law, or
use and possession of the two (2) cargo trucks from
seized under a writ of execution or preliminary
1982-1984. However, the trucks were registered in the
attachment, or otherwise placed under custodial egis,
name of petitioner Thomas Yang who was the
or if so seized, that it is exempt from such seizure or
Treasurer in the spouses’ business, and the same
custody; and
were in the possession of Manuel Yaphuckon.
(d) The actual market value of the property.
The Morante spouses further alleged that they were
After defendant had been duly represented by counsel
deprived of possession of the vehicles when it was
even at the inception of the service of summons and a
held by the petitioner and despite repeated demands,
copy of the order of replevin on January 7, 1985,
failed to return it. Respondents (spouses Morante)
defendant Thomas Yang had already been duly served,
applied for a writ of replevin and put up a bond of
especially so, when counsel manifested in their
P560,000.00 to recover the trucks.
comment to the opposition filed by the plaintiffs that
On January 7, 1985, Judge Valdez issued an order of
Manuel Yaphuckon was duly authorized to represent
seizure directing the Provincial Sheriff of South
Thomas Yang.
Cotabato to take immediate possession and custody of
the vehicles involved. The Sheriff carried out the order.
From then on defendant should have been on guard as
to the provision of Section 6. Rule 60, the five (5) days
On January 10, 1985, Yaphuckon filed a motion
period within which to file the counter-replevin for the
seeking repossession of the cargo trucks and posted a
approval of the court, counted from the actual taking of
replevin counter-bond of P560,000. The respondent
the property by the sheriff on January 7, 1985.
judge promptly required the respondent spouses to
comment on the counter-bond. As a response,
Petitioner Yang’s right to file a counter bond has
respondents amended their complaint and dropped
already prescribed. The sufficiency of a bond is a
Manuel Yaphockun who no longer had legal
matter that is addressed to the sound discretion of the
personality in the case while the court ordered for the
court which must approve the bond. In this, the
delivery of the trucks. For his part, petitioner Yang
replevin bond given by the respondent Morante
moved for an extension of fifteen (15) days within
spouses was properly secured by the sureties
which to file an answer to the complaint for replevin.
themselves who declared their solvency and capacity
Days later, he put up a counter-bond of P560,000.00
to answer for the undertaking assumed, through an
which was rejected by the respondent judge for having
Affidavit of Justification. A defendant in a replevin
been filed out of time.
suit may demand return of possession of the
property replevied by filing a redelivery bond
Yang argued that respondent judge had committed
within the periods specified in Sections 5 and 6 of
grave abuse of discretion amounting to lack or excess
Rule 60. Under Section 5, petitioner may "at any time
of jurisdiction in approving the replevin bond by the
before the delivery of the property to the plaintiff"
spouses Morante. It is contended by petitioner that
require the return of the property; in Section 6, he may
replevin bond was merely an undertaking of the
do so, "within five (5) days after the taking of the
bondsmen to pay the sum of P560,000.00, that no
property by the officer."
tangible security, such as "cash, property or surety,"
was placed thereby at the disposal and custody of the
Both these periods are mandatory in character.
court.
Thus, a lower court which approves a counter-bond
filed beyond the statutory periods, acts in excess of its
Issue:
jurisdiction.
Whether or not respondent judge has committed grave
In the instant case, the cargo trucks were taken into
abuse of discretion amounting to lack or excess of
custody by the Sheriff on 7 January 1985.
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
35
Petitioner Yang's counter-replevin bond was filed
on 25 January 1985 which exceeded the 5-day
statutory period.
We agree with the conclusion of respondent judge that
petitioner's right to file a counterbond had already
prescribed. We consider, accordingly, that respondent
judge did not commit any grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing
the orders here assailed.
WHEREFORE, the Resolution of the Court granting
due course to the Petition is hereby WITHDRAWN and
the "Petition for Review on Appeal by Certiorari" is
DENIED for lack of merit and the orders of respondent
Judge Marcelino R. Valdez are hereby AFFIRMED. No
pronouncement as to costs.
3.) Pagkalinawan v. Gomez, 21 SCRA 1275
One liner:Replevin not available when the property is
under custodial legis, under attachment or seized
pursuant to law
Facts
This is a question of whether a CFI of one district
in a replevin proceeding may ignore a search
warrant issued by another CFI.
Respondent Judge Gomez, acting on a complaint
for replevin filed by the other respondent Dayrit
directed petitioner, Pagkalinawan, a supervising
agent of the NBI to turn over to the Sheriff of
Cebu City an automobile (Dayrit claims that the
car was allegedly detained by the Pagkalinawan)
which was seized under a search warrant issued
by the CFI of Manila, the Hon. Santos presiding,
as a subject of the offense of theft or as stolen
property.
Petitioner after being served with the writ of
replevin, refused to comply on the contention that
he was holding the car in custodia legis for CFI
Manila (the court that issued the search warrant
under which the said car was seized and held in
custody).
Gomez issued an order directing petitioner to
comply with the order with a warning that ‘the
court visits on [him] the full harshness of its
coercive power’, thus Pagkalinawan was
compelled to surrender the property to the Sheriff.
Pagkalinawan contends that he would be placed
in imminent danger of being declared in Contempt
of the Manila Court of First Instance that issued
the search warrant because he cannot now
comply with the recent order.
Urgent Motion of Reconsideration of
Pagkalinawan denied by Gomez.
According to respondent, was that "the car in
question is not subject of a criminal case before a
Court of First Instance of Manila, more specifically
before Hon. Judge Santos," who issued the
search warrant, or in any other court.
Issue
WON Judge Gomez acted in excess of jurisdiction or Facts
with grave abuse of discretion?
WON the order of Judge Gomez "nullify the purpose
and defeat the force and validity of the search warrant
issued by the CFI, a competent court of equal
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
category;" and "would then cause confusion in the
enforcement and implementation of lawful orders
issued by other courts thereby causing embarrassment
in the proper administration of justice; . ."
Held:
Writ granted in favor of Petitioner Pagkalinawan.
The moment a CFI has been informed through the
filing of an appropriate pleading that a search warrant
has been issued by another CFI, it cannot, even if the
literal language of the Rules of Court yield a contrary
impression which in this case demonstrated the good
faith of respondent Judge for acting as he did, require
a sheriff or any proper officer of the Court to take the
property subject of the replevin action if theretofore it
came into the custody of another public officer by virtue
of a search warrant.
Only the CFI that issued such a search warrant
may order its release.
This is to assure stability and consistency in judicial
actuations and to avoid confusion that may otherwise
ensue if courts of coordinate jurisdiction are permitted
to interfere with each other's lawful orders.
Any other branch "even if it be in the same judicial
district" that would attempt to do so "either exceeds its
jurisdiction", or "acts with grave abuse of discretion
amounting to lack of jurisdiction,. . ." "In either case,
certiorari and prohibition would be proper to
prevent the attempting branch of the court from
proceeding to nullify a final decision rendered by a co-
equal and co-ordinate branch." (Tuason & Co. v. Hon.
Guillermo E. Torres)
In this case then, certiorari is an appropriate remedy
when respondent Judge disregarded a search warrant
issued by another CFI.
“No court has power to interfere by injunction with the
judgments or decrees of a court of concurrent or
coordinate jurisdiction having equal power to grant the
relief sought by injunction." (Cabigao v Del Rosario)
"Where property is seized under color of judicial
process and brought under the control of the court, [it
was] placed beyond the reach of replevin or other
independent or plenary remedy, . . ." (dissenting
opinion in Molo v Yatco)
4.) Chua v. Court of Appeals, 222 SCRA 85
One liner: Replevin is not an available remedy to get
back personal property seized under a search warrant;
Replevin will also not lie for property in custodial legis.
A thing is in custodial legis is when it is shown that it
has been and is subjected to the official custody of a
judicial executive officer in pursuance of his execution
of a legal writ.
On Aprirl 12, 1986, Judge Francisco of RTC Cebu
City Br. 13, after examining 2Lt. Dennis P. Canoy and
two other witnesses, issued a search warrant directing
36
 the immediate search of the premises of RR was otherwise, there would be interference with the
Construction located at MJ Cuenco Ave, Cebu City, possession before the function of the law had been
and the seizure of an Isuzu dump truck with plate performed as to the process under which the property
number GAP 175. At 12:00 noon of the same date, was taken. Thus, a defendant in an execution or
Canoy seized the aforesaid vehicle and took custody attachment cannot replevy goods in the possession of
thereof. an officer under a valid process, although after the levy
is discharged, an action to recover possession will lie.
On April 14, 1986, a civil action for Replevin/Sum
of Money for the recovery of possession of the same - Thus, the RTC Cebu City Br. 8 erred when it
Isuzu dump truck was filed by petitioner against Canoy ordered the transfer of possession of the property
and one John Doe in the RTC Cebu City Br. 8, Judge seized to petitioner when the latter filed the action for
Canares – alleging among other things, petitioner’s replevin. It should have dismissed the case since by
lawful ownership and possession of the subject vehicle; virtue of the “provisional dismissal” of the carnapping
that her has not sold the subject vehicle to anyone; that case there is still a probability that a criminal case
he has not stolen nor carnapped it, and that he has would be filed, hence a conflict in jurisdiction could
never been charges of the crime of carnapping or any still arise. The basic principle that a judge who presides
other crime for that matter. in one court cannot annul or modify the orders issued
by another branch of the same court because they are
On the same date, Judge Canres directed the co-equal and independent bodies acting coordinately,
issuance of a writ of replevin upon the posting of a must always be adhered to.
bond in the amount of P100,000.00. The writ of
replevin was also issued on the same date, and the WHEREFORE, the petition is DENIED. The decision
subject vehicle was seized on April 15, 1986 by Sheriff of the Court of Appeals dated May 7, 1987 is AFFIRMED
Fuentes.
5.) NONILLON A. BAGALIHOG, petitioner, vs. HON.
On April 16, 1986, Canoy filed a motion for the JUDGE GIL P.FERNANDEZ, Presiding Judge of Br.
dismissal of the complaint and for the quashal of the 45, RTC of Masbate; and MAJOR JULITO ROXAS,
writ of replevin. However, such motion was denied. respondents.

Meanwhile, a case for Carnaping was provisionally
dismissed by the City Fiscal.
In a decision, the Court of Appeals reversed the
decision of RTC Cebu City Br. 8, and nullified the
questioned orders – dismissal of the Replevin action
and directed that the possession of the subject vehicle
be restored to Canoy. Applying the case of
Pagkalinawan v. Gomez:
“Once a Court of First Instance has been informed that
a search warrant has been issued by another court of
first instance, it cannot require a sheriff or any proper
officer of the court to take the property subject of the
replevin action, if theretofore it came into custody of
another public officer by virtue of a search warrant.
Only the court of first instance that issued such search
warrant may order its release.”
Issue
One liner: When is a property considered taken in
custodia legis? Only when property is lawfully taken by
virtue of legal process is it considered in custody of law.
FACTS:
Rep. Moises Espinosa was shot to death shortly after
disembarking at the Masbate Airport. Witnesses said
one of the gunmen fled on a motorcycle. On that same
day, the petitioner’s house which was near the airport
was searched with his consent to see if the killers had
sought refuge there. The search was fruitless.
Two days later, respondent, Capt. Julito Roxas and his
men form the Philippine Constabulary seized the
motorcycle of petitioner and took it to the PC
headquarters. They had no search warrant but the
motorcycle was impounded on the suspicion that it was
the same vehicle used by the killers.

Whether the issuance of the writ of replevin by
Judge Canares was valid.
Held
The issuance of the writ of replevin was not valid.
- The principle followed among courts in the
dispensation of justice is that a judge who presides in a
branch of a court cannot modify or annul the orders
issued by another branch of the same court, since the
two (2) courts are of the same rank, and act
independently but coordinately.
- It is a basic tenet of civil procedure that replevin
will not lie for property in custodial legis. A thing is in
custodial legis is when it is shown that it has been and
is subjected to the official custody of a judicial
executive officer in pursuance of his execution of a
legal writ. The reason posited for this principle is that if it
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
After investigation, the petitioner and several others
were charged with multiple murder and frustrated
murder for killing Espinosa and three of his body
guards.
Months after, the petitioner filed a complaint in
Branch 48 of RTC Masbate, against Capt. Roxas for
the recovery of the motorcycle with an application
for a writ of replevin plus damages in the total
amount of P55,000.00.
Petitioner filed an urgent manifestation for the deposit
of the motorcycle with the clerk of court of the RTC
Masbate on the ground that PC soldiers were using the
vehicle without authority. This was granted by Judge
Butalid. However, Judge Butalid later inhibited himself
from the case, so the civil case was transferred to
Branch 45, presided by Judge Gil Fernandez, herein
37
respondent. The criminal cases were ordered by the
Court to be transferred from Branch 45 to Branch 56 of
the RTC Makati.
Branch 45 RTC Masbate Ruling:
DISMISSED the civil case. The question to be solved
is whether Replevin is proper to recover the
possession of the motorcycle. The court admits that
the motorcycle is not in the possession of the clerk of
court to be used as evidence in the criminal cases but
this court opines that it has no jurisdiction to release
evidence impounded or surrendered to the PC.
“Property seized in enforcing criminal laws in the
custody of the law and cannot be replevied until such
custody is ended. Granting as claimed by the plaintiff
that said motorcycle was illegally seized, he can raise
the issue when presented during trial. The proper court
to order its release, is Branch 56.”
After his reconsideration was denied, the petitioner
now asks the SC to reverse the said order
ISSUE:
WON the proper remedy to recover the possession of
his motorcycle is the issuance of a writ of replevin
RULING:
Petitioner’s Contention:
Motorcycle was invalidly seized and that he has the
right to its return and that the proper remedy for its
recovery is the issuance of a writ of replevin as
authorized by the Rules of Court. In refusing to grant
him relief and dismissing the case instead on the
ground of lack of jurisdiction, the respondent court
committed reversible error.
Private Respondent’s Comment (Capt. Roxas):
He admits the absence of a search warrant when the
motorcycle was seized but stresses that the crime
perpetrated is a heinous offense. That the motorcycle
is an extremely mobile vehicle and can easily be
dismantled or hidden, and the unique situation at that
time required him to place it in custody.
SUPREME COURT:
SC agrees with the concerns of Capt. Roxas but does
not agree with his methods. While recognizing the
need for the punishment of crime, we must remind him
that in our system of criminal justice, the end does not
justify the means. The private respondent must still
abide by the Constitution and observe the
requirements of the Bill of Rights.
Article III, Section 2 provides the guaranty against
unreasonable searches and seizures. The provision
protects not only those who appear to be innocent but
also those who appear to be guilty but are
nevertheless to be presumed innocent until the
contrary is proved. The mere fact that in the private
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
respondent's view the crime involved is "heinous" and
the victim was "a man of consequence" did not
authorize disregard of the constitutional guaranty.
Neither did "superior orders" condone the omission for
they could not in any case be superior to the
Constitution.
SC does not find that the importance of the motorcycle
in the prosecution of the criminal cases excused its
seizure without a warrant. The authorities had enough
time to comply with the required procedure but did not
do so. The motorcycle was on seized two days after
the crime was committed. The two days were enough
opportunity to apply for a search warrant and establish
probable cause in accordance with the Bill of Rights
and the Rules of Court.
The mere mobility of the motorcycle did not make the
search warrant redundant for it is not denied that the
vehicle remained with the petitioner until it was forcibly
taken from him. The fear that it would be dismantled or
hidden was mere speculation that was not borne out
by-the facts.
The private respondent maintains that by the
petitioner's promise, he effectively waived the right to a
search warrant and so can no longer complain that the
motorcycle had been invalidly seized. There was no
such waiver. The petitioner merely agreed to cooperate
with the investigators and to produce the vehicle when
needed, but he did not agree to have it impounded.
In dismissing Civil Case No. 3878, the respondent
judge said he had no jurisdiction over the motorcycle
because it was in custodia legis and only the judge
trying the criminal cases against the petitioner and his
co-accused could order its release. He cited the
general doctrine that:
Property seized in enforcing criminal laws is in the
custody of the law and cannot be replevied, until such
custody is ended.
It is true that property held as evidence in a criminal
case cannot be replevied. But the rule applies
only where the property is lawfully held, that is, seized
in accordance with the rule against warrantless
searches and seizures or its accepted exceptions.
Property subject of litigation is not by that fact alone in
custodia legis. As the Court said in Tamisin v.
Odejar, "A thing is in custodia legis when it is shown
that it has been and is subjected to the official custody
of a judicial executive officer in pursuance of his
execution of a legal writ." Only when property is
lawfully taken by virtue of legal process is it
considered in the custody of the law, and not
otherwise.
The circumstance that Judge Fernandez ordered the
motorcycle to be deposited with the clerk of court on
motion of the petitioner did not place the vehicle in
custodia legis. The respondent judge had no authority
over it because it had not been lawfully seized nor had
it been voluntarily surrendered to the court by the
petitioner.
The vehicle is not admissible as an exhibit even if
offered in the criminal case for any evidence obtained
in violation of the rule against unreasonable searches
and seizure shall be inadmissible for any purpose in
any proceeding.
The action to recover the motorcycle in the RTC of
Masbate will not constitute interference with the
38
processes of the RTC of Makati and the complaint
should not have been dismissed by respondent judge.
The order of the respondent judge is SET ASIDE and
the civil case is REINSTATED for further proceedings.
6. Asian Terminal Inc. vs Bautista, G.R. No. 166901,
Oct. 27, 2006, 505 SCRA 748.
One liner: The RTC devoid of any competence to pass
upon validity of seizure and forfeiture proceedings
conducted by the Bureau of Customs; policy of placing
no unnecessary hindrance on government’s drive to
prevent smuggling and frauds, render efficient and
effective collection of import and export duties
FACTS:
Section 1, Republic Act (RA) No. 8506, which took
effect on February 22, 1998, provides that it shall be
unlawful for any person to import, cause the
importation of, register, cause the registration of, use
or operate any vehicle with its steering wheel right
hand side thereof in any highway, street or road,
whether private or public, or at the national or local x x
x.
Noel Tabuelog, Ernesto de Jesus, and other
defendants are duly-licensed importers of vehicles.
Sometime in April and May 1998, they imported 72
secondhand right-hand drive buses from Japan. When
the shipment arrived at the SouthHarbor, Port of
Manila, the District Collector of Customs impounded
the vehicles and ordered them stored at the warehouse
of the Asian Terminals, Inc. (ATI), a customs-bonded
warehouse under the custody of the Aviation and
Cargo Regional Division. Conformably with Section
2607 of the Tariff and Customs Code, the District
Collector of Customs issued Warrants of Distraint
against the shipment and set the sale at public auction.
The defendant importers filed a complaint with the RTC
of Paranaque City, against the Secretary of Finance,
Customs Commissioner, and the Chief Executive of
the Societe Generale de Surillee, for replevin with
prayer for the issuance of a writ of preliminary and
mandatory injunction and damages. They averred,
inter alia, that in accordance with the opinion of the
Assistant Director of the Customs Legal Service and
the Office of the Legal Affairs of the Department of
Finance, the importation of right-hand drive vehicles
are not prohibited under RA No. 8506 provided that
conversion kits are included in the imported vehicles.
RTC Ruling:
The RTC granted the application for writ of replevin.
Upon motion, the court issued an order directing the
PNP Director to assist the Sheriff in implementing the
writ it issued and to arrest anyone who would obstruct
the implementation of its order. The District Collector of
Customs agreed to transfer the custody of the vehicles
to the RTC, on the condition that the required taxes,
dues, and other charges be paid. Plaintiffs paid the
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
requisite taxes, dues, and other charges. They were
able to take possession of the vehicles over the
objections of ATI.
The defendants, through the Office of the Solicitor
General sought the reconsideration of the RTC Order
granting plaintiffs' plea for a writ of replevin and such
writ be quashed on the ground that the RTC had no
jurisdiction over the vehicles subject of seizure and
detention before the Bureau of Customs. The OSG
claimed that it was the Bureau of Customs which had
exclusive jurisdiction over them.
ATI filed a Third-Party Claim over the shipment,
alleging that it had a lien over the vehicles for
accumulated and unpaid storage and arrastre charges,
and wharfage dues.
Before the court could resolve the above motions,
plaintiffs filed a motion to withdraw their complaint
against the DoF and BoC on the ground that the
defendants agreed to implement the writ of replevin
provided that plaintiffs will pay the taxes, dues and
other charges on the importation and that they had
paid the amount. However the OSG opposed this
motion saying that the release of the imported vehicles
by the BoC cannot make the importation legal,
otherwise such act will constitute a violation of RA
8506.
RTC Ruling:
1. The court ordered the dismissal of the complaint on
the following grounds:
the plaintiffs themselves filed a Motion to Dismiss
against the defendants;
2. The court had no jurisdiction over the case saying
that it was the Court of Tax Appeals who exercises
exclusive appellate jurisdiction to review the ruling of
the Commissioner in the seizure and confiscation
cases.
ATI pleaded for the court to admit its Complaint-in-
Intervention and its motion seeking to require plaintiffs
to post a bond to insure payment of its claims for
wharfage/arrastre charges. RTC dismissed the
Complaint-in-Intervention. It likewise ordered Plaintiff
Samuel Rosete to return the possession of the subject
buses to Pedro Mendoza, in his capacity as Customs
Commissioner of the Bureau of Customs
ATI filed a motion for reconsideration which was also
dismissed on the ground that its rights could be well-
protected in a separate proceeding. ATI filed a Petition
for Certiorari under Rule 65 before the CA.
ATI pointed out that the dismissal of the complaint of
the importers does not necessarily result in the
dismissal of its ancillary action because it has legal
interest in the matter and that it is legally situated as to
be adversely affected by the disposition of the vehicles.
CA RULING
The CA dismissed the petition for lack of merit. It ruled
that the RTC had no jurisdiction over the complaint
filed by the importers and that it was the Collector of
Customs who had exculsive jurisdiction over the case
and it was the CTA who had exclusive appellate
jurisdiction over it, not the RTC. Since the RTC had no
jurisdiction over the case, it also did not have no
authority to hear a third-party claim or a complaint-in-
intervention. intervention was not an independent
proceeding but merely an ancillary and supplemental
one, which, in the nature of things, is subordinate to
the main proceeding unless otherwise provided for by
statute or by the Rules of Court. The general rule is
that an intervention is limited to the field of litigation
39
open to the original parties. The RTC had dismissed
the main action; thus, there was no more principal
proceeding in which petitioner ATI may intervene.
ISSUE:
1. WON the RTC has jurisdiction to try the case? No
2. WON the RTC erred in dismissing the Complaint-in-
Intervention? No
RULING:
1. Section 602 of the TCC provides that the Bureau of
Customs shall exercise exclusive jurisdiction over
seized and forfeited cars. It is tasked to enforce tariff,
and supervise and control customs law and all other
laws, rules and regulations relating to the tariff and
customs administration; and to supervise and control
all import and export cargoes, loaded or stored in piers,
terminal facilities, including container yards and freight
stations, for the protection of government revenues.
Under Section 2301 of the TCC, the Collector of
Customs is empowered to make a seizure of cargoes
and issue a receipt for the detention thereof:
SEC. 2301. Warrant for Detention of Property-
Cash Bond. Upon making any seizure, the
Collector shall issue a warrant for the
detention of the property; and if the owner or
importer desires to secure the release of
the property for legitimate use, the
Collector shall, with the approval of the
Commissioner of Customs, surrender it
upon the filing of a cash bond, in an
amount to be fixed by him x x x
Section 2530 of the TCC enumerates the
properties subject of seizure and forfeiture:
Section 2530. Property Subject of Forfeiture Under
Tariff and Customs Laws. Any vehicle, vessel or
aircraft, cargo, article and objects shall, under the
following conditions be subject to forfeiture:
(f) Any article the importation or exportation of which is
effected or attempted contrary to law, or any article of
prohibited importation or exportation, and all other
articles which, in the opinion of the Collector, have
been used, are or were entered to be used as
instruments in the importation or exportation of the
former.
Moreover, as the Court ruled in Jao v. Court
of Appeals, Regional Trial Courts are
devoid of any competence to pass upon
the validity or regularity of seizure and
forfeiture proceedings conducted by the
Bureau of Customs and to enjoin or
otherwise interfere with these proceedings.
It is the Collector of Customs, sitting in
seizure and forfeiture proceedings, who
has exclusive jurisdiction to hear and
determine all questions touching on the
seizure and forfeiture of dutiable goods.
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
Thus, the RTC had no jurisdiction to take cognizance
of the petition for replevin by respondents herein, issue
the writ of replevin and order its enforcement. The
Collector of Customs had already seized the vehicles
and set the sale thereof at public auction. The RTC
should have dismissed the petition for replevin at the
outset. By granting the plea of respondents (plaintiffs
below) for the seizure of the vehicles and the transfer
of custody to the court, the RTC acted without
jurisdiction over the action and the vehicles subject
matter thereof. It bears stressing that the forfeiture of
seized goods in the Bureau of Customs is a
proceeding against the goods and not against the
owner. It is in the nature of a proceeding in rem, i.e.,
directed against the res or imported articles and entails
a determination of the legality of their importation. In
this proceeding, it is, in legal contemplation, the
property itself which commits the violation and is
treated as the offender, without reference whatsoever
to the character or conduct of the owner.
In fine, the initial orders of the RTC granting the
issuance of the writ of replevin and its implementation
are void.While it is true that the District Collector of
Customs allowed the release of the vehicles and the
transfer thereof to the custody of the RTC upon the
payment by the private respondents of the required
taxes, duties and charges, he did not thereby lose
jurisdiction over the vehicles; neither did it vest
jurisdiction on the RTC to take cognizance of and
assume jurisdiction over the petition for replevin. As
very well explained by the Office of the Solicitor
General, the District Collector of Customs agreed to
transfer the vehicles to the custody of the RTC since
the latter had ordered the arrest of those who would
obstruct the implementation of the writ. The District
Collector of Customs had yet to resolve whether to
order the vehicles forfeited in favor of the government,
in light of the opinion of the Secretary of Justice that,
under RA No. 8506, the importation was illegal.
2. The RTC cannot be faulted for dismissing petitioners
complaint-in-intervention. Considering that it had no
jurisdiction over respondents’ action and over the
shipment subject of the complaint, all proceedings
before it would be void.The RTC had no jurisdiction to
take cognizance of the complaint-in-intervention and
act thereon except to dismiss the same.
7. SPOUSES SAGUPAY vs. COURT OF APPEALS
G. R. No. 86792, March 21, 1990, 183 SCRA 464.
One liner: There could be no liability on the part of the
sureties until judgment is entered that the property
should be restored.
[I.
Facts: Mobil Philippines, Inc. filed a complaint for
replevin with damages against defendant Lina Joel
Sapugay alleging that Sapugay applied to become a
dealer of Mobil’s products and pending consideration
of the application, Mobil loaned to Sabugay LP-Gas
equipment and properties valued at 1.5M. Sabugay
allegedly failed to file and secure the required surety
bond, compelling Mobil to reject her application and
demand return of the equipment. Sabugay refused to
return them and instead demanded that she be paid
rental and guard’s fees. The lower court issued an
order for the issuance of a writ of replevin upon filing of
plaintiff’s bond.
40
 and severally liable with his co-respondent Mobil
Sabugay’s Answer alleged that Mobil’s manager, Philippines, Inc. for having acted in bad faith by
Cardenas, withheld from them the formal dealership impeding and preventing the award of the dealership to
agreement and that they were required to post a petitioners through fraudulent means
surety bond of 700k. Despite best efforts, they were
not able to do so because bonding companies required 8. ADOMA vs. GATCHECO
a copy of the dealership agreement; that Mobil and its A.M. No. P-05-1942. January 17, 2005, 448 SCRA
manager intended all along to award said dealership to 299
Island Air Product Corporation; that in furtherance of
said scheme, plaintiff caused all the LP-Gas equipment One liner: Where adverse party did not object to the other
to be publicly pulled out from defendant's premises. As party’s bond nor posted redelivery bond to recover
counterclaim, Sabugay prayed that Mobil and its possession of property, sheriff under obligation to deliver it
manager Cardenas be made liable for their pre- to the applicant.
operation expenses, rental, storage, and guarding fees,
unrealized profit including damages and the return of FACTS:
the LP-Gas equipment to the premises.
The instant administrative complaint filed against
RTC Decision
respondents for violation of Republic Act No. 3019 (Anti-
After finding that plaintiff and its manager, R.P.
Graft and Corrupt Practices Act) and conduct unbecoming
Cardenas, have reneged on its promise to award the
a court employee, arose from the execution of a writ of
dealership to defendant Sapugay, the trial court
replevin in Adoma v. Spouses Andres for recovery of
rendered judgment in favor of the latter, dismissing the
possession of motor vehicle with prayer for the issuance of
complaint and ordering plaintiff and its manager to pay
a writ of replevin before Branch 1 of the Municipal Trial
the pre-operation expenses, rental, storage, and
Court in Cities (MTCC) of Santiago City, presided by Judge
guarding fees of plaintiffs LPG equipment; unrealized
Ruben Plata.
profits, moral damages.

Sabugay then filed a motion for application to have The writ of replevin stated that the vehicle will be delivered
plaintiff’s bond posted by the Malayan Surety Company to complainant after 5 days from the implementation thereof.
liable for the satisfaction of the judgment. With the vehicle still undelivered on the 7th day,
complainant threatened to file an administrative case
CA Decision against respondent sheriff. Finally, on August 29, 2003, the
Modified the RTC decision by deleting the awards of latter was forced to release the vehicle to complainant.
rental, storage, and guarding fees and the award of Respondents, however, continued to demand P6,000.00,
unrealized profits. Also exculpated Cardenas from hence complainant filed the instant administrative case.
liability and held that said Cardenas, who is not a party
to the original action, may not be impleaded by Respondents, on the other hand, denied soliciting and
petitioners in their counterclaim on the ground that a receiving any amount from the complainant. Respondent
counterclaim cannot be filed against a person who is sheriff admitted, however, that complainant promised to
not an actual party to the litigation. give him P10,000.00 if the vehicle will be sold.

Issues: WON the sureties are liable- NO Court referred the instant administrative complaint to Judge
Fe Albano Madrid, Executive Judge, Regional Trial Court,
Santiago City, Isabela, for investigation, report and
Ruling: recommendation.

On replevin bond; Sureties not liable when no In her investigation report, Judge Madrid found the
order was entered for the return of the property testimony of complainant which was corroborated by two
A replevin bond is simply intended to indemnify the witnesses, to be more credible. She refused to believe the
defendant against any loss that he may suffer by being claim of respondent sheriff that he did not release the
compelled to surrender possession of the disputed vehicle to complainant after 5 days from the implementation
property pending the trial of the action. He cannot of the writ on August 16, 2003, because he was awaiting
recover on the bond as for a reconversion when he has instructions from Judge Plata. However, she found that
failed to have the judgment entered for the return of the respondent sheriff did not actually demand money for the
property. Nor is the surety liable for payment of the implementation of the writ because it was complainant who
judgment for damages rendered against the plaintiff on promised to give money in exchange for the implementation
a counterclaim or punitive damages for fraudulent or of the writ of replevin. Nevertheless, she concluded that
wrongful acts committed by the plaintiffs and respondent sheriff is guilty of misconduct considering that
unconnected with the defendant's deprivation of he accepted partial payment and insisted on its full
possession by the plaintiff. Indeed, even where the payment.
judgment was that the defendant was entitled to the
property, but no order was made requiring the plaintiffAs to respondent Taguba, Judge Madrid recommended
to return it or assessing damages in default of a return,
that he be reprimanded for trying to abet the misconduct of
it was declared that until judgment was entered that the
respondent sheriff. Upon receipt of the report of Judge
property should be restored, there could be no liability
Madrid, the Court referred the case to the Office of the
on the part of the sureties. Court Administrator (OCA) for evaluation, report and
recommendation. The OCA affirmed the investigating
Therefore, the Supreme Court held that private Judge's report. It recommended that respondent sheriff be
respondent Ricardo P. Cardenas should be held jointly
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
41
 fined in the amount of P5,000.00 for conduct unbecoming a
court employee and that respondent Taguba be
reprimanded for trying to abet the misconduct of a fellow
employee of another court.
Court required the parties to manifest whether they are
willing to submit the case for resolution based on the
pleadings filed. However, to date, the parties have yet to file
their manifestation. Hence, we are constrained to dispense
the filing of such manifestation.
ISSUE:
WON the sheriff should be held administratively liable
RULING:
The Court agrees with the investigating Judge and the OCA
that respondents received the amount of P2,000.00 and
that they demanded the payment of an additional
P6,000.00 from complainant. The testimony of complainant
is worthy of belief because the same was not only candid
and direct but also corroborated by two witnesses who
attested to the veracity of complainant's accusations. The
writ of replevin has been implemented and the vehicle is
now in complainant's possession.
Under Section 9, Rule 141 of the Rules of Court, the
procedure for the execution of writs and other processes
are: first, the sheriff must make an estimate of the
expenses to be incurred by him; second, he must obtain
court approval for such estimated expenses; third, the
approved estimated expenses shall be deposited by the
interested party with the Clerk of Court and ex-oficio sheriff;
fourth, the Clerk of Court shall disburse the amount to the
executing sheriff; and fifth, the executing sheriff shall
liquidate his expenses within the same period for rendering
a return on the writ. Any amount received by the sheriff
inexcess of the lawful fees allowed by the Rules of Court is
an unlawful exaction which renders him liable for grave
misconduct and gross dishonesty.
In the instant case, respondent sheriff totally disregarded
the aforecited procedure. He failed to make and submit an
estimate of the sheriff's expenses. The amounts received
and demanded by him are therefore unauthorized fees. His
acts of accepting and soliciting said monetary
considerations make him liable not only for conduct
unbecoming a court employee but also for grave
misconduct and dishonesty.
As correctly found by the OCA, respondent sheriff
deliberately failed to place complainant in possession of
the vehicle after five days from the implementation of the
writ because the latter failed to give the whole amount he
promised. Since the adverse party did not object to the
complainant's bond nor posted a redelivery bond to
recover possession of the vehicle taken under the writ of
replevin, respondent sheriff is under obligation to deliver
the van to complainant. However, it took respondent
sheriff 13 days before he released the vehicle to
complainant, a clear violation of Section 6, Rule 60 of the
1997 Revised Rules of Civil Procedure which provides —
SEC. 6. Disposition of property by sheriff. — If within (5)
days after the taking of the property by the sheriff, the
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
adverse party does not object to the sufficiency of the
bond, or of the surety or sureties thereon; or if the adverse
party so objects and the court affrms its approval of the
applicant's bond or approves a new bond, or if the adverse
party requires the return of the property but his bond is
objected to and found insufficient and he does not
forthwith file an approved bond, the property shall be
delivered to the applicant. If for any reason the property is
not delivered to the applicant, the sheriff must return it to
the adverse party. (6a)
With respect to respondent Taguba, we find the sanction
of reprimand too light a penalty for his transgression.
Although it was not him who deliberately delayed the
delivery of the vehicle to force complainant to yield to the
sheriff's demand, and that complainant did not point to him
as the one who received the amount of P2,000.00,
respondent Taguba assisted respondent sheriff in
soliciting money from complainant. He ia a process server
of another branch of the MTCC of Santiago City but he
volunteered to aid respondent sheriff in the implementation
of the writ. He not only demanded P8,000.00 from
complainant after the implementation of the writ but also
tagged along with respondent sheriff when the latter tried
to exact P6,000.00 from complainant before the vehicle
was released to the latter. Furthermore, respondent
Taguba had been previously suspended for 1 month in
Albano-Madrid v. Apolonio , for simple misconduct in
playing cards with other court personnel inside the Judge's
chambers during office hours. Indeed, reprimand is not
commensurate to his incorrigible conduct. The penalty of 6
months suspension is appropriate.
At the grassroots of our judicial machinery, sheriffs are
indispensably in close contact with the litigants, hence,
their conduct should be geared towards maintaining the
prestige and integrity of the court, for the image of a court
of justice is necessarily mirrored in the conduct, official or
otherwise, of the men and women who work thereat, from
the judge to the least and lowest of its personnel; hence, it
becomes the imperative sacred duty of each and everyone
in the court to maintain its good name and standing as a
temple of justice.
WHEREFORE, in view of all the foregoing, respondent
Romeo Gatcheco, Sheriff III, Municipal Trial Court in Cities,
Branch 1, Santiago City is found GUILTY of Grave
Misconduct, Dishonesty and Conduct Grossly Prejudicial
to the Best Interest of the Service and is SUSPENDED for
one (1) year, without pay. Respondent Eugenio Taguba,
Process Server, Municipal Trial Court in Cities, Branch 2,
Santiago City is found GUILTY of Conduct Prejudicial to
the Best Interest of the Service and is SUSPENDED for
six (6) months without pay. Respondents are warned that
a repetition of the same or any other act of infraction in the
future shall be dealt with most severely.
9. ADVENT CAPITAL AND FINANCE
CORPORATION vs. YOUNG
G. R. No. 183018, August 3, 2011, 655 SCRA 118
One liner: Upon dismissal of replevin case for failure
to prosecute, the writ of seizure, which is merely
ancillary, became functus officio and should have been
lifted.
Facts:
42
Advent filed a petition for corporate rehabilitation with
the RTC Makati. The rehabilitation court issued a stay
order which states that "the enforcement of all claims
whether for money or otherwise, and whether such
enforcement is by court action or otherwise, against
the petitioner (Advent), its guarantors and sureties not
solidarily liable with it, is stayed."
Young filed his comment to the petition for
rehabilitation, claiming several employee benefits
allegedly due him as Advent's former president and
chief executive officer. The rehabilitation court
approved the rehabilitation plan submitted by Advent
including in its inventory the subject car, a 1996
Mercedes Benz E230, registered in the name of
Advent, which was in Young’s possession at the time.
Due to Young’s refusal to return the car after repeated
demands, Advent filed a replevin suit to recover
possession.
After Advent's posting of P3,000,000 replevin bond,
which was double the value of the subject car at the
time, through Stronghold Insurance, the trial court
issued a Writ of Seizure directing the Sheriff to seize
the subject car from Young. Upon receipt of the Writ of
Seizure, Young turned over the car to Advent, which
delivered the same to the rehabilitation receiver.
Young alleged in his answer that as a former employee
of Advent, he had the option to purchase the car at
book value pursuant to the company car plan and to
offset the value of the car with the proceeds of his
retirement pay and stock option plan. Young sought
the (1) execution of a deed of sale over the subject car;
and (2) determination and payment of the net amount
due him as retirement benefits under the stock option
plan. Advent filed a Reply with a motion to dismiss
Young's counterclaim, alleging that the counterclaim
did not arise from or has no logical relationship with the
issue of ownership of the subject car.
RTC Ruling:
After pre-trial, the lower court dismissed the replevin
case for Advent’s failure to prosecute as well as
Young’s counterclaim for lack of jurisdiction since the
rehabilitation court has already acquired jurisdiction.
Young filed a motion for partial reconsideration
claiming possession of the car and payment of P2M as
damages for its improper seizure. The trial court
denied his motion. In denying the motion it stated:
“The subject vehicle was turned over to plaintiff by
virtue of a writ of replevin validly issued, the latter
having sufficiently shown that it is the
absolute/registered owner thereof. This was not denied
by the defendant. Plaintiff's ownership includes its right
of possession. The case has been dismissed without a
decision on the merits having been rendered. Thus, to
order the return of the vehicle to one who is yet to
prove his right of possession would not be proper.”
Young then filed an appeal with the Court of Appeals in
an attempt to reverse the ruling of the trial court.
CA Decision:
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
The Court of Appeals then trial court’s decision. In its
decision, it stated:
“The case was dismissed by the court a quo for failure
of Advent to prosecute the same. Upon dismissal of
the case, the writ of seizure issued as an incident of
the main action (for replevin) became functus officio
and should have been recalled or lifted. Since there
was no adjudication on the merits of the case, the
issue of who between Advent and petitioner has the
better right to possess the subject car was not
determined. As such, the parties should be restored to
their status immediately before the institution of the
case.”
Advent’s motion for reconsideration being denied, it
now sought recourse to the Supreme Court via Rule 45
of the Rules of Court.
Issues:
(1) WON the car should be returned to Young; and
(2) WON a hearing is needed to determine the
damages against the replevin bond.
Ruling:
(1) YES. The return of the vehicle is the necessary
consequence of the dismissal for failure to prosecute
without prejudice of the replevin case. Upon dismissal,
the writ of seizure, which is merely ancillary in nature,
became functus officio and should have been lifted.
There was no adjudication on the merits, which means
that there was no determination of the issue who has
the better right to possess the subject car. Advent
cannot therefore retain possession of the subject car
considering that it was not adjudged as the prevailing
party entitled to the remedy of replevin.
The dismissal of the replevin case for failure to
prosecute results in the restoration of the parties'
status prior to litigation, as if no complaint was filed at
all. To let the writ of seizure stand after the dismissal of
the complaint would be adjudging Advent as the
prevailing party, when precisely no decision on the
merits had been rendered. Accordingly, the parties
must be reverted to their status quo ante. Since Young
possessed the subject car before the filing of the
replevin case, the same must be returned to him, as if
no complaint was filed at all.
Returning the seized vehicle to Young is not an
enforcement of a claim against Advent which must be
suspended by virtue of the stay order issued by the
rehabilitation court. The issue in the replevin case is
who has better right to possession of the car. Young
cannot collect a money "claim" against Advent within
the contemplation of the Interim Rules. The term
"claim" has been construed to refer to debts or
demands of a pecuniary nature, or the assertion to
have money paid by the company under rehabilitation
to its creditors. In the replevin case, Young cannot
demand that Advent pay him money because such
payment, even if valid, has been "stayed" by order of
the rehabilitation court. However, in the replevin case,
Young can raise Advent's car plan, coupled with his
retirement pay and stock option plan, as giving him a
better right to possession of the car.
43
(2) NO. In replevin cases, as in receivership and
injunction cases, the damages to be awarded upon the
bond "shall be claimed, ascertained, and granted" in
accordance with Section 20 of Rule 57. This provision
allows the application for damages to be filed at any
time before the judgment becomes executory, in the
same case that is the main action, and with the court
having jurisdiction over the case at the time of the
application.
Young filed his omnibus motion claiming damages
against Stronghold after the dismissal order issued by
the trial court had attained finality. Thus, Young is
barred from claiming damages against the replevin
bond.
Since Young is time-barred from claiming damages
against the replevin bond, the dismissal order having
attained finality after the application for damages, the
Court of Appeals erred in ordering the trial court to set
a hearing for the determination of damages against the
replevin bond.
10. Ago v. Court of Appeals,
G.R. No. L-19718, January 31, 1966, 16 SCRA 81
One liner: If the articles cannot be returned in the
same condition, prevailing party may refuse to take
them and instead sue on the redelivery bond or
execute on the judgment for value.
FACTS:
Respondents Venancio Castañeda and Niceta Henson
brought an action for replevin in the CFI Manila to
recover from petitioner Pastor Ago a caterpillar tractor,
a Jaegar hoist and a cargo truck, which the
respondents had delivered to the petitioner for use in
their logging business in Agusan.
Respondents asked for the immediate delivery of the
machines to them and posted a bond.
CFI RULING:
The Court of First Instance (CFI; now Regional Trial
Court or RTC) the bond and ordered the seizure of the
property. Petitioner filed a counterbond for 60K for
which reason he was allowed to retain possession of
the machinery. The CFI then ruled in favor of
respondents Castañeda and Henson, ordering
petitioner Ago to return the machinery or the alternative,
to pay the sum of 30K.
Petitioner appealed the decision to the Supreme Court.
While the appeal was pending, it was found that
petitioner’s surety, the Globe Assurance Co. had
become bankcrupt. Hence, trial court ordered petitioner
to file a new and sufficient counterbond, but the
petitioner failed to do so and as a result, the court
issued a writ of replevin.
Petitioner challenged the authority of the CFI to issue
the writ both in the CA and in the SC but petition was
dismissed in both cases. Accordingly, the CFI issued a
writ of seizure.
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
The sheriff served the writ on petitioner’s assistant
manager, then took possession of the tractor and hoist,
and five days after offered to delivered these machines
to the respondent’s representative. However,
respondents refused to accept them on the ground that
the tractor and hoist were unserviceable while the truck
could not be produced. As the CA said in the decision
appealed “with respect to the tractor, the three most
important and indispensable parts thereof were broken
and unusable. The Jaeger hoist had also become
useless. The sheriff made a report to the court, stating
that, because of respondents' refusal to take
possession of the machines, "there is no other
recourse but to return (them) to defendant Pastor D.
Ago.
Meanwhile, the SC affirmed the decision of the lower
court in Ago vs Castañeda and thereafter remanded
the case to the court of origin. A writ of execution for
172, 923.87 was issued.
Petitioner asked for a stay of execution on the following
grounds:
(1) There had been a change in the situation of the
parties, which made it inequitable to enforce the
decision as affirmed by the SC;
(2) After their seizure by the sheriff, the tractor and the
hoist were never returned to him;
(3) He should not be made to pay damages for their
detention;
(4) With respect to the cargo truck, no rental value
could be assigned to it because it was already a junk.
The Court denied petitioner’s motion on the ground
that the matter should have been raised before the
decision became final. As a result, petitioner’s house
and lot in Quezon City were levied upon by the Sheriff
and advertised for sale.
Petitioner’s motion to stop the sale and MR were both
denied. Petitioner filed a petition for certiorari in the CA
to annul the orders, the same petition was dismissed.
Hence, this appeal.
ISSUES:
(1) WON the respondents had a right to reject the
machinery and the petitioner a corresponding
obligation to take them back - YES
(2) WON the sheriff actually returned the machinery
after respondents refused to take them – YES
(3) WON execution should have been suspended – NO
RULING:
(1) Where judgment is rendered for the articles or their
value and they cannot be returned in substantially the
same condition, it is settled that the prevailing party
may refuse to take them and instead sue on the
redelivery bond or, as in this case, execute on the
44
judgment for value (Kunz vs. Nelson). If the prevailing
party has this right after judgment, it is at once obvious
that he must also have the same right when, asking for
the delivery pendente lite of the same property, he
afterwards finds them in a substantially depreciated
condition. ICAB, Court of Appeals found "beyond
dispute" that the tractor and the hoist had so
deteriorated that they had become unserviceable. This
right to reject is assured in the first instance by the
provision that the judgment in a suit for replevin must
be in the alternative so as to afford a measure of relief
where the property cannot be returned (Rule 60, sec.
9); in the second case it is implied from the
requirement that "if for any reason the property is not
delivered to the plaintiff, the officer must return it to the
defendant." (Rule 60, sec. 6). It then becomes the
defendant's obligation to take them back upon tender
of the sheriff.
(2) Despite the affirmative finding of the Court of
Appeals, petitioner denies that they were ever returned
to him. For this purpose, he relies on the affidavits of
P.C. Villanueva, Felimon Pacot and Narciso Lansang
— affidavits which he presented to the trial court in
support of his motion to stay execution.
• Villanueva was the same sherrif who in his report
stated that in view of respondent’s refusal to accept the
machines, “there is no other recourse but to returm
them to the defendant Pastor Ago. However, 2 years
and 8 months after making the report, he stated in his
affidavit that he was not able to return the machines
because petitioner refused to take them back.
• Lansang was petitioner’s assistant manager on
whom the writ of seizure was served. PACOT was
petitioner’s guard to whom the machines were
entrusted for safekeeping for five days. They stated in
their affidavits that the machines remained in the
custody of Pacot because petitioner did not take them
back when the sheriff offered to return them.
It was petitioner's obligation to accept redelivery of the
machines after their rejection by respondents, then it is
clear that whether he took them back or not, he was
liable for their detention. An action for replevin has for
its object the recovery of some personal property; it is
obvious that if the plaintiff in that action refuses to take
delivery of the very property he sought to recover, it
must be for very good reasons which defeat his object.
Not so in the case of the defendant in such an action
as to whom this presumption cannot be applied.
(3) Both the trial and the appellate courts observed,
petitioner did not contest respondents' manifestation
made the day after the sheriff reported to the court that
he was going to return the machines to petitioner. In
that manifestation, respondents averred:
8. In view of the dilapidated state of the machineries
which are no longer in a serviceable, usable, or
working condition and the important and indispensable
parts thereon missing or scattered, while the GMC
truck could not even be located, plaintiffs'
representative could not receive the machineries from
the Sheriff of Agusan who in turn returned 1. theDavid v. Court of Appeals 250 SCRA 82
remaining machines and whatever parts that still
“It is literally true that you can succeed best and quickest by helping others to succeed”.
remained, to defendant Pastor D. Ago, thru his
representative.
Why petitioner did not dispute this assertion shortly
after it was made has not been explained. On the other
hand, his tardy denial of it when the judgment for
recovery was to be executed fosters in the mind a
conviction that the affidavits were secured merely to
frustrate efforts at execution.
But there is an even more fundamental reason why we
think the lower court correctly ordered execution to
proceed. As Moran aptly states:
"[A] court cannot refuse to issue a writ of execution
upon a final and executory judgment, or quash it, or
order its stay, for, as a general rule, the parties will not
be allowed, after final judgment, to object to the
execution by raising new issues of fact or of law, nor
can it refuse — and the reason is more compelling —
to issue such writ, or quash it or order its stay, when
the judgment had been reviewed and affirmed by an
appellate court, for it cannot review or interfere with
any matter decided on appeal, or give other or further
relief, or assume supervisory jurisdiction to interpret or
reverse the judgment of the higher court." (2
Comments on the Rules of Court 257 [1963])
The several cases cited by petitioner in support of his
contention that even after a judgment has become final
the court may stay or even quash the execution – refer
to circumstances that have "arisen subsequent to the
remanding of the record from the Supreme Court to the
trial court" (at 628) and those cases are justified by the
primordial necessity of doing justice in each case.
HOWEVER, those cases cannot be invoked when the
supposed change in the circumstances of the parties
took place while the case was pending.
The reason is that there is then no excuse for not
bringing the matter to the attention of the court the fact
or circumstance that affects the outcome of the case.
Such was the supposed change in the situation of the
parties in this case when, so it is claimed, the petitioner
lost possession of the machines for the detention of
which he was ordered by final judgment to pay
damages.
Finally, with respect to the cargo truck which petitioner
says was already a junk when the sheriff served the
writ of seizure and for which reason he should not be
made to pay rental, suffice it to say that the finding of
the Court of Appeals is that it was missing and could
not be produced and not that it was a junk. We take
this finding to be final, especially considering that it
was based on the official report of the sheriff.
Thus,the decision appealed from is AFFIRMED.
Rule 61. Support Pendente Lite
Cases
- Napoleon Hill
45
One liner: Temporary support was granted in a petition for
habeas corpus pending the fixing of the amount of support
in another action for support.
Nature of the Petition:
• A petition for habeas corpus on behalf of Christopher J (initial
petition).
• Petition for review of the appellate court’s decision (CA to SC)
Facts:
• Daisie T. David worked as a secretary of respondent Ramon
Villar, a married businessman with four children in Angeles
City.
• Both of them started having intimate affairs which led to a
son being born, Christopher J, followed by two girls,
Christine and Cathy Mae.
• The wife was unaware of their dalliance until Daisie took
her child to their own house and introduced him to the
wife. Soon after, the children were brought by Villar to
house and were accepted by the legal family.
• During 1991, Villar asked Daisie if he could bring
Christopher on a family vacation to Boracay, to which
she agreed. However, things swung into a different
direction upon returning. Villar would no longer give
Christopher back! *screams and gasps*
• Villar told Daisy he already enrolled Christopher J at the Holy
Family Academy for the next school year.
• Daisy then filed a petition for habeas corpus.
• (RTC RULING) Rightful custody is given to the natural
mother; petitioner is to give temporary support of
P3,000.
• (CA RULING) REVERSED. The decision on support and
custody is not proper in a habeas corpus case.
• The law contemplates a situation where the parents are
married to each other but are separated. That is the
situation wherein a question over rightful custody may be
entertained in a habeas corpus case.
• The rationale for the law is because the father and mother
have joint parental authority over legitimate children
where separation demands determination over rightful
custody.
• The same does not hold true in cases of adulterous
relationships since it is already established from the
beginning that the rightful custody belongs to the mother
according to law.
• Thus, a separate case should have been filed for that • CA DECISION REVERSED AND RESPONDENT ORDERED
purpose. It is a more advisable action since the trial court TO DELIVER MINOR TO MOTHER’S CUSTODY.
didn’t acquire jurisdiction over the other minor children and
cannot provide for their support.
• Ultimately, the CA decided that the child should
temporarily stay with Villar up until the issue on
custody and support is resolved since he is richer
and can provide more for the child than Daisie could
Issues: Whether or not a separate action should be
filed on the issue of support and custody
Ruling:
THE LAW DOES NOT DISTINGUISH BETWEEN A WOMAN
SEPARATED FROM HER HUSBAND AND A MOTHER
OF AN ILLEGITIMATE CHILD DEPRIVED OF CUSTODY;
THE ISSUES RAISED ARE PROPER
• (Rule 102 Sec. 1 ROC) Writ of writ of
habeas corpus shall extend to all cases of
illegal connement or detention by which any person is
deprived of his liberty, or by which the rightful custody
of any person is withheld from the person
entitled thereto.
• The determination of the right of custody of minor
children is proper where married persons are later
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
on separated, but it does not follow that it cannot
arise in any other situation.
• (Salvana v. Gaela) Writ of habeas corpus is the
proper remedy to regain custody of minor child even if
in the custody of third persons of her own free will
since the parents were forcing her to marry a man she
didn’t want.
• The mother is entitled to custody since the child was
born out of an illicit relationship and is thus illegitimate.
Since she has been deprived of rightful custody, she is
entitled to the writ of habeas corpus.
• The rule does not distinguish between a woman
separated from her husband and a mother of an
illegitimate child who was deprived of rightful
custody.
• While the father recognizes the minor child to be his,
it may be a ground for giving support but not custody.
• Neither will the fact that Villar is rich enough to
provide be enough to rightfully deprive Daisie of
custody since she can support and raise them on
her own as a market vendor and secretary, where
she has arranged with her employer time to attend
to her children.
• Even if she receives support from her family, that
should not be held against her. This is merely a
characteristic of close family ties that bind every
Filipino family.
• It is enough for Daisie to earn a decent living and
support her children according to her own means.
• The RTC ordered respondent to give temporary
support pending the filing of an action for support. He
is rich and professes love for his children, going so far
as to file a motion for execution of the decision of CA
saying that his son has become weak and needs the
luxury and amenities he was accustomed to (sana ol )
• Although a question of support is proper in a
proceeding for that purpose, the grant of support
is justified in this case since he expressed
willingness to support the minor child.
• As a minor, Christopher cannot be taken away from
his mother. Even now that he is more than seven years
old, his mother must still have custody over him since
he preferred to live with her.
2.) Francisco v. Zandueta, 61 Phil. 752 (1935)
One liner: The Court cannot grant support pendente
lite if the right to support is put in issue in the
pleadings or the fact from which the right to
support arises has not been established.
Facts: Eugenio Francisco, represented by his natural
mother and curator ad litem, Rosario Gomez, instituted
an action for support against petitioner Luis Francisco
in a separate case, alleging that he is the latter’s
acknowledged son and as such is entitled to support.
Luis denied the allegation, claimed that he never
acknowledged Eugenio as his son and was not present
at his baptism and that he was married at time of
Eugenio’s birth.
Despite the denial of paternity however, respondent
judge Francisco Zandueta issued an order granting
Eugenio monthly pension, pendente lite. Luis moved
for reconsideration but was denied, hence the writ for
certiorari.
Praying to have the trial transferred, counsel of herein
petitioner, in compromise, agreed that his client would
pay the monthly pension during the pendency of the
case.
46
 Issue: WON Eugenio Francisco is entitled to support
without first establishing his status as petitioner’s son
Held: NO. The answer as to whether or not petitioner’s
counsel really agreed to have him pay the pension
during the case’s pendency is not necessary to the
solution of the case.
As in the case of Yangco vs Rohde, the fact of the civil
status must be proven first before a right of support
can be derived. The Court ruled that it is necessary for
Eugenio to prove, through his guardian ad litem, his
civil status as the petitioner’s son. As such, no right of
support can be given because the very civil status of
sonship, from which the right is derived, is in question.
It held that “(t)here is no law or reason which
authorizes the granting of support to a person who
claims to be a son in the same manner as to a person
who establishes by legal proof that he is such son. In
the latter case the legal evidence raises a presumption
of law, while in the former there is no presumption,
there is nothing but a mere allegation, a fact in issue,
and a simple fact in issue must not be confounded with
an established right recognized by a final judgment.”
Additionally, the respondent judge was without
jurisdiction to order for the monthly support in light of
herein private respondent’s absence of aforementioned
status.
Writ granted; order for support, pendente lite, declared
null and void. No costs.
previously fixed by respondent judge is now beyond his
means to pay. According to private respondent, the
court had not yet acted on petitioner's request for
reduction of the monthly support because the
respondent judge left for abroad. Unquestionably, the
petitioner's willingness to pay the amount of support
pendente lite in the mariner indicated in his
manifestation, and the approval thereof by the
respondent Judge have rendered this petition moot
and academic.
As to the factual issue of whether the amount of
P2,500.00 previously fixed by respondent judge is now
beyond the means of petitioner, the same should be
resolved by the lower court on the basis of the
evidence to be presented at the proper hearing. The
order of December 24 fixing the amount of support
pendente lite is not final in character in the sense that it
can be the subject of modification, depending on the
changing conditions affecting the ability of the obligor
to pay the amount fixed for support.

3.) San Juan v. Valenzuela, 117 SCRA 926

One liner:The Amount fixed by the court is only provisional, it
is not final and can be modified according to the
circumstances.

Facts:It appears that on September 16, 1981, the marriage

between respondent Mejia and petitioner San Juan,
solemnized on October 2, 1973, was declared null and void
by the Court of First Instance of Rizal on the ground of a
prior and subsisting marriage between petitioner and one
Isabel Bandin. On February 25, 1981, respondent Mejia
instituted the instance action against petitioner, docketed as
Civil Case No. 8874- P, seeking support for herself and her
two minor children. The judge granted the motion. Fixing
such support amounting to P2,500.00 a month. Petitioner's
motion for reconsideration of the above order on the
grounds that (1) the amount is grossly disproportionate to
petitioner's means; (2) petitioner is not obliged to support
respondent Mejia as their marriage is null and void; and (3)
no evidence was presented as to petitioner's present
resources, was denied. Petition for certiorari to annul and
set aside the order of respondent Judge.

ISSUE: Whether or not the judge erred in its decision?

RULING:
It appears that pending resolution of this petition,
petitioner filed with the trial court a manifestation, dated
June 17, 1982, proposing to settle his obligation of
P15,000.00, representing the amount of support which
accrued from January to June, 1982, and to pay the
same in three equal installments, the first to be paid
upon approval by the court of his scheme of payment,
and the balance within a period of two (2) months
thereafter. This proposal was approved by the court. In
the same manifestation, petitioner sought the reduction
of the amount of support pendente lite to P1,000.00 a
month on the ground that the sum of P2,500.00
“It is literally true that you can succeed best and quickest by helping others to succeed”.
- Napoleon Hill
47