ESTANISLAO, MAE BERNADETTE M.

PLM JD 3-1 PROVISIONAL REMEDIES

COMMUNICATION AND INFORMATIONS SYSTEMS v.

MARK SENSING AUSTRALIA PTY. LTD.
[ GR No. 192159, Jan 25, 2017, JARDELEZA, J. ]

RULE 57 PRELIMINARY ATTACHMENT

FACTS:

Communication and Information Systems Corporation (CISC) and Mark Sensing Australia
Pty. Ltd. (MSAPL) entered into a Memorandum of Agreement (MOA) whereby MSAPL
appointed CISC as "the exclusive AGENT of [MSAPL] to PCSO during the [lifetime] of the
recently concluded MOA entered into between [MSAPL], PCSO and other parties." The
recent agreement referred to in the MOA is the thermal paper and bet slip supply contract
between the PCSO, MSAPL, and three other suppliers, namely Lamco Paper, Consolidated
Paper and Trojan Computer Forms. As consideration for CISC's services, MSAPL agreed to
pay CISC a commission of 24.5% of future gross sales to PCSO, exclusive of duties and
taxes, for six years.

After initially complying with its obligation under the MOA, MSAPL stopped remitting
commissions to CISC during the second quarter of 2004. As a result, CISC filed a complaint
before the RTC for specific performance against MSAPL, MSPI, Atty. Ofelia Cajigal, and
PCSO. CISC prayed that private respondents be ordered to comply with its obligations under
the MOA. It also asked the RTC to issue a writ of preliminary mandatory injunction and/or
writ of attachment.

RTC granted CISC's application for issuance of a writ of preliminary attachment, stating that
"the non-payment of the agreed commission constitutes fraud on the part of the defendant
MSAPL in their performance of their obligation to the plaintiff." The RTC found that MSAPL
is a foreign corporation based in Australia, and its Philippine subsidiary, MSPI, has no other
asset except for its collectibles from PCSO. Thus, the RTC concluded that CISC may be left
without any security if ever MSAPL is found liable. But the RTC limited the attachment to
P4,861,312.00, which is the amount stated in the complaint, instead of the amount sought to
be attached by CISC, i.e., P113,197,309.10.The RTC explained that it "will have to await the
Supreme Court judgment over the issue of whether [it] has jurisdiction on the amounts in the
excess of the amount prayed for by the plaintiff in their complaint" since MSAPL appealed
the adverse judgment in CA-G.R. SP No. 96620 to us. We later denied MSAPL's petition for
review assailing the CA Decision

CISC posted a bond in the amount of P113,197,309.10 through Plaridel Surety and
Insurance Company in favor of MSAPL then MSAPL filed a motion to determine the
sufficiency of the bond because of questions regarding the financial capacity of Plaridel. But
before the RTC could act on this motion, MSAPL, apparently getting hold of Plaridel's latest
financial statements, moved to recall and set aside the approval of the attachment bond on
the ground that Plaridel had no capacity to underwrite the bond pursuant to Section 215 of
the old Insurance Code because its net worth was only P214,820,566.00 and could therefore
only underwrite up to P42,964,113.20. RTC denied MSAPL's motion, finding that although
Plaridel cannot underwrite the bond by itself, the amount covered by the attachment bond
"was likewise reinsured to sixteen other insurance companies." However, "for the best
interest of both parties," the RTC ordered Plaridel to submit proof that the amount of
P95,819,770.91 was reinsured. Plaridel submitted its compliance attaching therein the
reinsurance contracts. MSAPL, MSPI and Atty. Ofelia Cajigal filed a petition for certiorari .
CA held that the RTC exceeded its authority when it "ordered the issuance of the writ [of
preliminary attachment] despite a dearth of evidence to clearly establish [CISC's] entitlement
thereto, let alone the latter's failure to comply with all requirements therefor." Noting that the
posting of the attachment bond is a jurisdictional requirement, the CA concluded that since

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ESTANISLAO, MAE BERNADETTE M. PLM JD 3-1 PROVISIONAL REMEDIES

Plaridel's capacity for single risk coverage is limited to 20% of its net worth, or
P57,866,599.80, the RTC "should have set aside the second writ outright for non-
compliance with Sections 3 and 4 of Rule 57." Hence this petition,

ISSUE:

Whether courts may approve an attachment bond which has been reinsured as to the
excess of the issuer's statutory retention limit?

RULING:

NO, Section 215 of the old Insurance Code, the law in force at the time Plaridel issued the
attachment bond, limits the amount of risk that insurance companies can retain to a
maximum of 20% of its net worth. However, in computing the retention limit, risks that have
been ceded to authorized reinsurers are ipso jure deducted. In mathematical terms, the
amount of retained risk is computed by deducting ceded/reinsured risk from insurable risk. If
the resulting amount is below 20% of the insurer's net worth, then the retention limit is not
breached. In this case, both the RTC and CA determined that, based on Plaridel's financial
statement that was attached to its certificate of authority issued by the Insurance
Commission, its net worth is P289,332,999.00. Plaridel's retention limit is therefore
P57,866,599.80, which is below the Pl13,197,309.10 face value of the attachment bond.
However, it only retained an insurable risk of P17,377,938.19 because the remaining amount
of P98,819,770.91 was ceded to 16 other insurance companies. Thus, the risk retained by
Plaridel is actually P40 Million below its maximum retention limit. Therefore, the approval of
the attachment bond by the RTC was in order.

In cancelling Plaridel's insurance bond, the CA also found that because the reinsurance
contracts were issued in favor of Plaridel, and not MSAPL, these failed to comply with the
requirement of Section 4, Rule 57 of the Rules of Court requiring the bond to be executed to
the adverse party. This led the CA to conclude that "the bond has been improperly and
insufficiently posted." We reverse the CA and so hold that the reinsurance contracts were
correctly issued in favor of Plaridel. A contract of reinsurance is one by which an insurer (the
"direct insurer" or "cedant") procures a third person (the "reinsurer") to insure him against
loss or liability by reason of such original insurance. It is a separate and distinct arrangement
from the original contract of insurance, whose contracted risk is insured in the reinsurance
agreement. The reinsurer's contractual relationship is with the direct insurer, not the original
insured, and the latter has no interest in and is generally not privy to the contract of
reinsurance. Put simply, reinsurance is the "insurance of an insurance." By its nature,
reinsurance contracts are issued in favor of the direct insurer because the subject of such
contracts is the direct insurer's risk-in this case, Plaridel's contingent liability to MSAPL and
not the risk assumed under the original policy. The requirement under Section 4, Rule 57 of
the Rules of Court that the applicant's bond be executed to the adverse party necessarily
pertains only to the attachment bond itself and not to any underlying reinsurance contract.
With or without reinsurance, the obligation of the surety to the party against whom the writ of
attachment is issued remains the same.

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ESTANISLAO, MAE BERNADETTE M. PLM JD 3-1 PROVISIONAL REMEDIES

SPOUSES VICTOR P. DULNUAN AND JACQUELINE P. DULNUAN,

v. METROPOLITAN BANK & TRUST COMPANY
[G.R. No. 196864, July 08, 2015, PEREZ, J.]

RULE 58 PRELIMINARY INJUNCTION

FACTS:

On several occasions, the Spouses Dulnuan obtained loans from Metropolitan Bank and
Trust Company (Metrobank), the total of which reached the sum P3,200,000.00, as
evidenced by promissory notes executed by them.eAs a security for the loan obligations, the
Spouses Dulnuan executed a Real Estate Mortgage (REM) over a parcel of land registered
under their names. Subsequently, however, the Spouses Dulnuan incurred default and
therefore the loan obligations became due and demandable.

Metrobank filed an application for extra-judicial foreclosure proceedings over the subject
property before the RTC. The mortgaged property was sold at a public auction where
Metrobank was declared as the highest bidder.

Before the expiration of the one-year redemption period allowed by law, Metrobank filed a
Petition for the Issuance of Writ of Possession. Spouses Dulnuan instituted a Complaint
seeking the issuance of a temporary restraining order and preliminary and final injunction
and, for the annulment of extra-judicial foreclosure and real estate mortgage. The complaint
alleged that the mortgage constituted over the property is null and void because at the time
the agreement was entered on 18 October 2000, no contract of loan was yet executed by
the parties. It was only on 19 December 2003 that they received the proceeds of the loan,
as evidenced by the Promissory Note. In other words, there is no principal obligation upon
which the ancillary contract of mortgage was attached to.

After summary hearing, issued a Temporary Restraining Order and set the hearing for the
issuance of Writ of Preliminary Injunction. Both parties proceeded to adduce evidence for
and against the issuance of the writ of preliminary injunction.

ISSUE:

Whether or not the Court of Appeals erred in dissolving the writ of preliminary injunction
issued against Metrobank?

RULING:

NO, The writ of preliminary injunction enjoined Metrobank from entering, occupying,
possessing, using, or performing any act of possession and occupation over the subject
property. Without going into the merits of this case, the Court will confine itself in the
determination of the propriety of the preliminary injunction, such being a preservative remedy
for the protection of substantive rights or interests, is not a cause of action in itself but merely
a provisional remedy, an adjunct to a main suit.

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. The purpose of injunction is to
prevent threatened or continuous irremediable injury to some of the parties before their
claims can be thoroughly studied and educated. Its sole aim is to preserve the status quo
until the merits of the case is heard fully.

The status quo is the last actual, peaceable and uncontested situation which precedes a
controversy. The status quo should be that existing at the time of the filing of the case. A

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ESTANISLAO, MAE BERNADETTE M. PLM JD 3-1 PROVISIONAL REMEDIES

preliminary injunction should not establish new relations between the parties, but merely
maintain or re-establish the pre-existing relationship between them.

Pertinent are the provisions of Section 3, Rule 58 of the Rules of Court, enumerates the
grounds for the issuance of a writ of preliminary injunction, to wit:

SEC. 3. Grounds for issuance of preliminary injunction. A preliminary injunction may be

granted when it is established:

(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief
consists in restraining the commission or continuance of the act or acts complained of, or in
requiring the performance of an act or acts, either for a limited period or perpetually;

(b) That the commission, continuance or non-performance of the act or acts complained of
during the litigation would probably work injustice to the applicant; or

(c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is
procuring or suffering to be done, some act or acts probably in violation of the rights of the
applicant respecting the subject of the action or proceeding, and tending to render the
judgment ineffectual.

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.

As such, a writ of preliminary injunction may be issued only upon clear showing of an actual
existing right to be protected during the pendency of the principal action. The requisites of a
valid injunction are the existence of the right and its actual or threatened violations. Thus, to
be entitled to an injunctive writ, the right to be protected and the violation against the right
must be shown.

Extant from the pleadings of the parties is the failure of the Spouses Dulnuan to establish the
essential requisites for the issuance of the writ of preliminary injunction.

In fine, we find that the Court of Appeals committed no reversible error in reversing the
injunction issued by the RTC. The record shows that Metrobank caused the extrajudicial
foreclosure of the mortgage on the subject realties as a consequence of the Spouses
Dulnuans default on their mortgage obligation. As the highest bidder at the foreclosure sale,
Metrobank can exercise its right of possession over the subject realty, and the issuance of
writ of preliminary injunction, enjoining the bank from occupying the property in question, is
erroneous.

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ESTANISLAO, MAE BERNADETTE M. PLM JD 3-1 PROVISIONAL REMEDIES

NEMENCIO C. PULUMBARIT, SR., v. THE COURT OF APPEALS (17th Division

Composed of JUSTICE BIENVENIDO L. REYES, PONENTE; JUSTICE ROBERTO A.
BARRIOS, Chairman; AND JUSTICE EDGARDO F. SUNDIAM, Acting Third Member),
LOURDES S. PASCUAL, LEONILA F. ACASIO, AND SAN JUAN MACIAS MEMORIAL
PARK, INC.,
[G.R. NOS. 153745-46, October 14, 2015, JARDELEZA, J.]

RULE 59 RECEIVERSHIP

FACTS:

Sometime in 1982, San Juan Macias Memorial Park, Inc. (SJMMPI), through its President
Lourdes S. Pascual, authorized Atty. Soledad de Jesus to look for a buyer for the San Juan
Memorial Park (Memorial Park) for P1,500,000.00.4 Thereafter, Lourdes Pascual, Leonila F.
Acasio, and the other officers of SJMMPI (Pascual et al.) were introduced to Nemencio
Pulumbarit (Pulumbarit). The parties eventually came to an agreement, with Pulumbarit
issuing eighteen (18) checks in the name of SJMMPI Secretary-Treasurer Leonila Acasio.
Pulumbarit and/or his lawyer took charge of reducing the agreement into writing and
securing the signatures of all concerned parties.

On June 13, 1983, Pascual et al. sent a letter to Pulumbarit requesting for a copy of their
written agreement. In another letter of even date, they also asked Pulumbarit to reissue new
checks to replace the ones he previously issued. Failing to get a favorable response,
Pascual et al. filed a Complaint for Rescission of Contract, Damages and Accounting with
Prayer for Preliminary Injunction or Receivership against Pulumbarit.

ISSUE:

Whether the finding of fact in the application for receivership constituted res judicata as to
the issue of the true agreement between the parties

RULING:

NO, In its questioned Decision, the CA found that Pascual et al. was bound by the finding
made by the trial court (in relation to their application for receivership) that the agreement
between the parties was one for sale and not management. Thus:

This Court is convinced that the trial court was bound by said findings of fact, especially
considering that it was the same court (through then Presiding Judge Amante M. Laforteza)
which made said findings. Material facts or questions which were in issue in a former action
and were there admitted or judicially determined are conclusively settled by a judgment
rendered therein and that such facts or questions become res judicata and may not again be
litigated in a subsequent action between the same parties or their privies, regardless of the
form the issue may take in the subsequent action, whether the subsequent action involves
the same or a different form or proceeding, or whether the second action is upon the same
or a different cause of action, subject matter, claim or demand, as the earlier action. In such
cases, it is also immaterial that the two actions are based on different grounds, or tried on
different theories, or instituted for different purposes, and seek different reliefs. We reverse
the ruling of the CA on this matter. Res judicata by conclusiveness of judgment does not
apply in this case.

In Social Security Commission v. Rizal Poultry and, Livestock Association, we laid down the
requirements of res judicata in the concept of "conclusiveness of judgment," to wit:

There is "bar by prior judgment" when, as between the first case where the judgment was
rendered and the second case that is sought to be barred, there is identity of parties, subject

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ESTANISLAO, MAE BERNADETTE M. PLM JD 3-1 PROVISIONAL REMEDIES

matter, and causes of action. In this instance, the judgment in the first case constitutes an
absolute bar to the second action.

But where there is identity of parties in the first and second cases, but no identity of causes
of action, the first judgment is conclusive only as to those matters actually and directly
controverted and determined and not as to matters merely involved therein. This is the
concept of res judicata known as "conclusiveness of judgment." Stated differently, any right,
fact, or matter in issue directly adjudicated or necessarily involved in the determination of an
action before a competent court in which judgment is rendered on the merits is conclusively
settled by the judgment therein and cannot again be litigated between the parties and their
privies, whether or not the claim, demand, purpose, or subject matter of the two actions is
the same.

The application of the doctrine of res judicata either in the concept of bar by prior judgment
or conclusiveness of judgment requires or presupposes the existence of two independent
actions.

Since receivership may be resorted to either as a principal action or an ancillary remedy, it is

imperative to first determine the nature of the application for receivership in this case. If, for
example, it is found that Pascual et al. filed a separate action for receivership, the findings of
fact made by the court therein may be held to be conclusive as to the "true" nature of the
parties' agreement in the action for rescission of contract, damages and accounting. If, on
the other hand, the application was made ancillary to the principal action for rescission, a
finding made in the course of the resolution of said application would not bar the same court,
after an exhaustive litigation of the main issues before it, from later on arriving at a different
finding of fact.

The records show that Pascual et al.'s, "petition for receivership" was filed with the same
court, specifically, for the appointment of a receiver to preserve their rights over the
Memorial Park during the pendency of the suit with Pulumbarit. It is thus an application for
an ancillary remedy made during the course of the main action for rescission. Being a
provisional remedy, the appointment of a receiver would always be without prejudice to the
final outcome of the main case. A finding of feet made in the course of the resolution of said
application cannot therefore constitute res judicata for purposes of the issues implicated in
the main ease. As in fact, the trial court in this case, in the end, found for Pascual et al. and
ruled that the agreement between the parties was not a sale, but a management contract.

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ESTANISLAO, MAE BERNADETTE M. PLM JD 3-1 PROVISIONAL REMEDIES

KENNETH HAO v. ABE C. ANDRES

[A.M. No. P-07-2384, June 18, 2008, QUISUMBING, J]

RULE 60 REPLEVIN
FACTS:

Kenneth Hao is one of the defendants in a civil case for replevin entitled "Zenaida Silver,
doing trade and business under the name and style ZHS Commercial v. Loreto Hao, Atty.
Amado Cantos, Kenneth Hao and John Does," pending before the RTC of Davao City. On
October 17, 2005, Judge Fuentes issued an Order of Seizure against 22 motor vehicles
allegedly owned by the complainant. Andres was able to seize 9 motor vehicles. Hao in his
complaint alleged that Andres seized the vehicles in an oppressive manner. The cease and
desist order against the seizure was issued on October 21, 2005 when the counter-replevin
bond was approved. On October 24, 2005, 8 of 9 seized motor vehicles were missing.
Andres was found guilty of serious negligence in the custody of nine motor by the
investigating judge.

ISSUE:

Whether the implementation of replevin is proper?

RULING:

NO. Pursuant to Rule 60, being an officer of the court, Andres must be aware that there are
well-defined steps provided in the Rules of Court regarding the proper implementation of a
writ of replevin and/or an order of seizure. The Rules, likewise, is explicit on the duty of the
sheriff in its implementation. First, the rules provide that property seized under a writ of
replevin is not to be delivered immediately to the plaintiff. In accordance with the said rules,
Andres should have waited no less than five days in order to give the complainant an
opportunity to object to the sufficiency of the bond or of the surety or sureties thereon, or
require the return of the seized motor vehicles by filing a counter bond. This, he failed to do.
Silver was already in possession of the nine seized vehicles immediately after seizure, or no
more than three days after the taking of the vehicles. Thus, Andres committed a clear
violation of Section 6, Rule 60 of the Rules of Court with regard to the proper disposal of the
property. It matters not that Silver was in possession of the seized vehicles merely for
safekeeping as stated in the depository receipts. The rule is clear that the property seized
should not be immediately delivered to the plaintiff, and the sheriff must retain custody of the
seized property for at least five days. From the moment an order of delivery in replevin is
executed by taking possession of the property specified therein, such property is in custodia
legis. As legal custodian, it is Andres' duty to safe keep the seized motor vehicles. Hence,
when he passed his duty to safeguard the motor vehicles to Silver, he committed a clear
neglect of duty. Despite the cease and desist order, Andres failed to return the motor
vehicles to their lawful owners. When a writ is placed in the hands of a sheriff, it is his duty,
in the absence of any instructions to the contrary, to proceed with reasonable celerity and
promptness to execute it according to its mandate. However, the prompt implementation of
an order of seizure is called for only in instances where there is no question regarding the
right of 6 the plaintiff to the property. Where there is such a question, the prudent recourse
for Andres is to desist from executing the order and convey the information to his judge and
to the plaintiff.

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ESTANISLAO, MAE BERNADETTE M. PLM JD 3-1 PROVISIONAL REMEDIES

CHERRYL B. DOLINA v. GLENN D. VALLECERA,

[G.R. No. 182367, December 15, 2010, ABAD, J]

RULE 61 SUPPORT PENDENTE LITE

FACTS:

Cherryl Dolina filed a petition with aprayer for the issuance of a temporary protection order
against Glenn Vallecera before RTC for alleged woman and child abuse under RA 9262. In
the pro forma complaint cherryl added a prayer for support for their supposed child. She
based such prayer on the latters certificate of live birth which listed Vallecera s employer, to
withhold from his pay such amount of support as the RTC may deem appropriate.

Vallecera opposed petition and claimed that Dolinas petition was essentially one for
financial support rather than for protection against woman and child abuses, that he was not
the childs father and that the signature in the birth certificate was not here. He also added
that the petition is a harassment suit intended to for him to acknowledge the child as his and
therefore give financial support.

RTC dismissed petition.

ISSUE:

Whether or not the RTC correctly dismissed Dolinas action for temporary protection and
denied

RULING:

YES, Dolina evidently filed the wrong action to obtain support for her child. The object of
R.A. 9262 under which she filed the case is the protection and safety of women and children
who are victims of abuse or violence. Although the issuance of a protection order against the
respondent in the case can include the grant of legal support for the wife and the child, this
assumes that both are entitled to a protection order and to legal support. In this case neither
her or her child lived with Vallecera.

To be entitled to legal support, petitioner must, in proper action, first establish the filiation of
the child, if the same is not admitted or acknowledged. Since Dolinas demand for support
for her son is based on her claim that he is Valleceras illegitimate child, the latter is not
entitled to such support if he had not acknowledged him, until Dolina shall have proved his
relation to him. The childs remedy is to file through her mother a judicial action against
Vallecera for compulsory recognition. If filiation is beyond question, support follows as matter
of obligation. In short, illegitimate children are entitled to support and successional rights but
their filiation must be duly proved.

Dolinas remedy is to file for the benefit of her child an action against Vallecera for
compulsory recognition in order to establish filiation and then demand support. Alternatively,
she may directly file an action for support, where the issue of compulsory recognition may be
integrated and resolved.

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