Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G. R. No. 183367 March 14, 2012

AUSTRALIAN PROFESSIONAL REALTY, INC., JESUS GARCIA, and LYDIA

MARCIANO, Petitioners,
vs.
MUNICIPALITY OF PADRE GARCIA BATANGAS PROVINCE, Respondent.

DECISION

SERENO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to annul
the Court of Appeals (CA) Resolutions in CA-G.R. SP No. 102540 dated 26 March 20081 and 16
June 2008, which denied petitioners Motion for the issuance of a status quo order and Motion
for issuance of a temporary restraining order (TRO) and/or writ of preliminary injunction.

Statement of the Facts and the Case

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

On 19 January 1995, a Memorandum of Agreement (MOA)2 was executed between petitioner

APRI and respondent, represented by Mayor Gutierrez and the members of the Sangguniang
Bayan. 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.

In May 1995, Victor Reyes was elected as municipal mayor of respondent. On 6 February 2003,
respondent, through Mayor Reyes, initiated a Complaint for Declaration of Nullity of
Memorandum of Agreement with Damages before the Regional Trial Court (RTC) of Rosario,
Batangas, Fourth Judicial Region, Branch 87. The Complaint was docketed as Civil Case No.
03-004.

On 12 February 2003, the RTC issued summons to petitioners, requiring them to file their
Answer to the Complaint. However, the summons was returned unserved, as petitioners were
no longer holding office in the given address.

On 2 April 2003, a Motion for Leave of Court to Effect Service by Publication was filed by
respondent before the RTC and subsequently granted by the trial court.
On 24 November 2003, the RTC issued an Order declaring petitioners in default and allowing
respondent to present evidence ex parte.

On 6 October 2004, a Decision was rendered by the RTC, which, after narrating the testimonial
evidence for respondent, stated:

After the completion of the testimony of Victor M. Reyes, counsel for the petitioner manifested
that he will file the formal offer of evidence in writing.

On July 19, 2004, counsel for the petitioner filed before this Court his Formal Offer of
Documentary Exhibits consisting of Exhibits "A" to "H", inclusive of submarkings.

On August 18, 2004 an order was issued by the Court admitting all the exhibits formally offered
by the petitioner thru counsel and this case was ordered submitted for resolution of the Court.

There is no opposition in the instant petition.

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, particularly R.A. 6957 and R.A. 7718;

(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;

(c) The structures found within the unfinished PADRE GARCIA SHOPPING CENTER
are hereby declared forfeited in favor of the Municipality of Padre Garcia.

SO ORDERED.3

There having been no timely appeal made, respondent filed a Motion for Execution of
Judgment, which was granted by the RTC. A Writ of Execution was thus issued on 15 July
2005.

After learning of the adverse judgment, petitioners filed a Petition for Relief from Judgment
dated 18 July 2005. This Petition was denied by the RTC in an Order dated 15 June 2006. In
another Order dated 14 February 2z008, the trial court denied the Motion for Reconsideration.

Petitioners later filed before the CA a Petition for Certiorari and Prohibition dated 28 February
2008, docketed as CA-G.R. SP No. 102540. On 7 March 2008, petitioners filed before the CA a
Motion for the Issuance of Status Quo Order and Motion for Issuance of Temporary Restraining
Order and/or Writ of Preliminary Injunction.4 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"5 in the case before it.

On 26 March 2008, the CA issued a Resolution denying the said motion, stating thus:
After a careful evaluation of petitioners Motion for Issuance of Status Quo Order and Motion for
Issuance of Temporary Restraining Order and/or Writ of Preliminary Injunction, 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. In Ong Ching Kian
Chuan v. Court of Appeals, it was held that, to be entitled to injunctive relief, 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.

WHEREFORE, petitioners prayer for the issuance of a Status Quo Order, Temporary
Restraining Order and/or Writ of Preliminary Injunction is hereby DENIED for lack of merit. 6

On 17 June 2008, the CA denied the Motion for Reconsideration of the 26 March 2008
Resolution, stating that the mere preservation of the status quo is not sufficient to justify the
issuance of an injunction.

On 8 July 2008, petitioners filed the instant Petition for Review on Certiorari dated 6 July 2008.

Petitioners claim that the amount of APRIs investment in the Padre Garcia Shopping Center is
estimated at 30,000,000, the entirety of which the RTC declared forfeited to respondent
without just compensation. At the time of the filing of the Petition, APRI had 47 existing tenants
and lessees and was deriving an average monthly rental income of 100,000. The Decision of
the RTC was allegedly arrived at without first obtaining jurisdiction over the persons of
petitioners. The execution of the allegedly void judgment of the RTC during the pendency of the
Petition before the CA would probably work injustice to the applicant, as the execution would
result in an arbitrary declaration of nullity of the MOA without due process of law.

Petitioners further allege that respondent did not exercise reasonable diligence in inquiring into
the formers address in the case before the RTC. The Process Server Return, with respect to
the unserved summons, did not indicate the impossibility of a service of summons within a
reasonable time, the efforts exerted to locate APRI, or any inquiry as to the whereabouts of the
said petitioner.

On 6 August 2008, this Court required respondent to file its Comment. On 13 February 2009,
the Comment was filed, alleging among others that despite the RTCs issuance of a Writ of
Execution, respondent did not move to implement the said writ out of administrative comity and
fair play. Even if the writ were implemented, petitioners failed to state in categorical terms the
serious injury they would sustain.

Respondent further argues that it is now in possession of the contracts that the lessees of the
Padre Garcia Shopping Center executed with APRI. Thus, there are "actions [that militate]
against the preservation of the present state of things,"7 as sought to be achieved with the
issuance of a status quo order.

On 2 June 2009, petitioners filed their Reply to respondents Comment.

On 3 March 2010, this Court issued a Resolution requiring the parties to inform the Court of the
present status of CA-G.R. SP No. 102540. On 15 April 2010, respondent manifested that after
the parties filed their respective Memoranda, the CA considered the case submitted for
decision. On 12 May 2010, petitioners filed their Compliance, stating that the appellate court,
per its Resolution dated 7 August 2008, held in abeyance the resolution of CA-G.R. SP No.
102540, pending resolution of the instant Petition.

The Courts Ruling

The Petition is denied for failure to show any grave abuse of discretion on the part of the CA.

Procedural Issue: Propriety of a Petition for Review under Rule 45

Before proceeding to the substantive issues raised, we note that petitioners resorted to an
improper remedy before this Court. They filed a Petition for Review on Certiorari under Rule 45
of the Rules of Court to question the denial of their Motion for the issuance of an injunctive
relief.

Under Section 1 (c) of Rule 41 of the Rules of Court, no appeal may be taken from an
interlocutory order. An interlocutory order is one that does not dispose of the case completely
but leaves something to be decided upon.8An order granting or denying an application for
preliminary injunction is interlocutory in nature and, hence, not appealable.9 Instead, the proper
remedy is to file a Petition for Certiorari and/or Prohibition under Rule 65.10

While the Court may dismiss a petition outright for being an improper remedy, it may in certain
instances proceed to review the substance of the petition.11 Thus, this Court will treat this
Petition as if it were filed under Rule 65.

Substantive Issue: Grave abuse of discretion on the part of the CA

The issue that must be resolved by this Court is whether the CA committed grave abuse of
discretion in denying petitioners Motion for the Issuance of Status Quo Order and Motion for
Issuance of Temporary Restraining Order and/or Writ of Preliminary Injunction (Motion for
Injunction).

A writ of preliminary injunction and a TRO are injunctive reliefs and preservative remedies for
the protection of substantive rights and interests.12 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 grave injustice and irreparable injury would arise unless it is issued immediately.13 Under
Section 5, Rule 58 of the Rule of Court,14 a TRO may be issued 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.15
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 fact left to the said court for its conclusive
determination.16 Hence, the exercise of judicial discretion by a court in injunctive matters must
not be interfered with, except when there is grave abuse of discretion.17

Grave abuse of discretion in the issuance of writs of preliminary injunction implies a capricious
and whimsical exercise of judgment equivalent to lack of jurisdiction; or the exercise of power in
an arbitrary or despotic manner by reason of passion, prejudice or personal aversion amounting
to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law.18 The burden is thus on petitioner to show in his application that there is
meritorious ground for the issuance of a TRO in his favor.19

In this case, no grave abuse of discretion can be imputed to the CA. It did not exercise judgment
in a capricious and whimsical manner or exercise power in an arbitrary or despotic manner.

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.20 In the absence of a clear legal right, the issuance of the writ constitutes grave abuse of
discretion.21 The possibility of irreparable damage without proof of an actual existing right is not
a ground for injunction.22

A perusal of the Motion for Injunction and its accompanying Affidavit filed before the CA shows
that petitioners rely on their alleged right to the full and faithful execution of the MOA. However,
while the enforcement of the Writ of Execution, which would nullify the implementation of the
MOA, is manifestly prejudicial to petitioners interests, they 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.23 At the very least, their rights under the MOA are precisely disputed by respondent.
Hence, there can be no "clear and unmistakable" right in favor of petitioners to warrant the
issuance of a writ of injunction. Where the complainants right or title is doubtful or disputed,
injunction is not proper.24

The general rule is that after a judgment has gained finality, it becomes the ministerial duty of
the court to order its execution. No court should interfere, by injunction or otherwise, to restrain
such execution.25 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.26 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.27 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
APRIs 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 mathematical computation and, if
proven, is fully compensable by damages. Thus, a preliminary injunction is not
warranted.28 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.1wphi1 In any case, petitioners may still seek recourse in their pending
Petition before the Court of Appeals.

WHEREFORE, the Petition is DENIED. The Court of Appeals Resolutions dated 26 March 2008
and 16 June 2008 in CA-G.R. SP No. 102540 are AFFIRMED. The Court of Appeals is directed
to proceed with dispatch to dispose of the case before it.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 164548 September 27, 2006

PHILIPPINE NATIONAL BANK, petitioner,

vs.
RJ VENTURES REALTY & DEVELOPMENT CORPORATION and RAJAH BROADCASTING
NETWORK, INC.,respondents.

DECISION

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review filed under Rule 45 of the Rules of Court assailing the
31 March 2004 Decision1 and the 8 July 2004 Resolution2 of the Court of Appeals in CA-G.R.
SP No. 56119. The challenged Decision disposed, thus:

IN VIEW OF ALL THE FOREGOING, the instant petition is hereby GRANTED, the
assailed Orders dated July 28, 1999 and October 26, 1999, respectively,
[are] REVERSED AND SET ASIDE, and the preliminary injunction earlier issued is
reinstated. No cost.3

The assailed Resolution denied petitioner Philippine National Bank's (PNB's) Motion for
Reconsideration dated 3 May 2004.

The Antecedents

As culled from the records, the facts show that on 26 February 1999, respondents RJ Ventures
Realty & Development Corporation (RJVRD) and Rajah Broadcasting Network, Inc. (RBN) filed
a Complaint for Injunction with Prayer for Issuance of Temporary Restraining Order and Writ of
Preliminary Injunction4 against petitioner PNB and Juan S. Baun, Jr.5 with the Regional Trial
Court (RTC), Branch 66 of Makati City, and docketed as Civil Case No. 99-452.

In its Complaint, respondents contended that on 13 June 1996, First Women's Credit
Corporation (FWCC) received an invitation to bid from PNB anent the sale of an 8,000 square
meter property, located at Paseo de Roxas corner Sen. Gil. Puyat Avenue, Makati City, and
covered by Transfer Certificate of Title No. S-15223 (Buendia Property).6On 10 July 1996,
FWCC bid the amount of P455,000.00 per square meter or a total of P3,640,000,000.00; and
pursuant to PNB Rules and Regulations on the Acceptance and Evaluation of Proposals, it
deposited ten percent (10%) of the offered price or P364,000,000.00 with the PNB by way of
two checks, No. 418796 and No. 418797, in the amounts of P312,000,000.00
and P52,000,000.00, respectively.7 On 11 July 1996, FWCC submitted a revised offer
increasing its bid by P5,000.00 per square meter or a total additional amount
of P40,000,000.00. In view of the increase, FWCC deposited with PNB an additional amount
of P4,000,000.00.8 On 17 July 1996, FWCC was awarded the Buendia Property.9 PNB's Notice
of Award to FWCC set a condition that within thirty (30) calendar days from receipt of the same,
the successful offeror shall tender payment of the balance of the purchase price in the form of a
manager's or cashier's check.10 On 24 July 1996, FWCC, invoking Section 7.211 of the PNB
Rules requested PNB to finance the entire balance of the purchase price.12 On 17 September
1996 and pending action on its loan application, FWCC assigned all its rights, claims, interest,
and title over the Buendia Property to RJVRD.13The latter assumed the right to purchase the
Buendia Property and the obligations of FWCC to PNB on the balance of the bid price.

Respondents further posited that PNB initially refused to finance the entire balance of the
purchase price except to the extent of seventy-five percent (75%) thereof.14 However, PNB
finally agreed to grant a loan to RJVRD equivalent to eighty percent (80%) of the purchase price
or for the amount of P2,944,000,000.00. The grant was conditioned on the deposit by RJVRD
with PNB of an additional ten percent (10%) of the purchase price to the first ten percent (10%)
downpayment which the former had paid. Otherwise stated, RJVRD was required to raise an
additional amount of P368,000,000.00.15 Moreover, to allow RJVRD to raise the additional
amount, PNB proposed to lend RBN the required amount, the latter being an affiliate company
of RJVRD, which amount will be available for relending to RJVRD.16

Respondents described the said arrangement in this wise:

15.0 PNB shall extend a loan to RBN in the amount of P350,000,000.00 which in turn
would be loaned to RJVRD.

15.1 The proceeds of the loan shall be used by RJVRD to partially pay the additional
10% or P368,000,000.00 deposit on the Property. PNB documents would however show
that the loan was for the expansion of RBN.

15.2 Mr. Ramon P. Jacinto, the majority stockholder of RJVRD will pledge to PNB 70%
of his shares of stock in RBN and 40% of his shares of stock in FWCC.17

Moreover, in their Complaint a quo, respondents avowed that on 30 September 1996, following
the payment by RJVRD to PNB of the additional deposit of P368,000,000.00, the parties
entered into a loan agreement wherein PNB will finance the balance of the purchase price in the
amount of P2,944,000,000.00 subject to conditions, inter alia, that after the transfer of the
Buendia Property in the name of RJVRD, the same shall be mortgaged in favor of PNB. On
even date, RJVRD and PNB executed a Loan Agreement.18 A Deed of Sale19 and a Real Estate
Mortgage,20 both dated 30 September 1996 were similarly executed between RJVRD and PNB
over the Buendia Property. The Loan Agreement included a two-way peso/dollar convertibility
feature at the option of RJVRD; hence, to avail of a lower interest rate, RJVRD converted its
peso loan to US dollar based on a rate of exchange of P26.23 to US$1.00, or for a total amount
of US$112,237,895.54.

Respondents claimed that RJVRD undertook to engage foreign investors for the project. It
entered into negotiations with Hyundai Construction of South Korea which were eventually
suspended. Its talks with Siemens of Austria, and Property Investment and Development
Management Corporation of Singapore failed.21 Respondents interposed further that the Asian
currency crisis on 11 July 1997 caused a depreciation of the Philippine peso which
correspondingly increased the obligation of RJVRD to PNB from P2,944,000,000.00
to P5,405,301,470.82 inclusive of interest.22 On 30 September 1997, in an effort to continue the
project, RJVRD entered into a joint venture agreement with Fil-Estate Management
Incorporated for the development of the Buendia Property. RBN secured another loan from PNB
in the amount of P100,000,000.00, part of which was used in paying the interest for the loan it
had secured in favor of RJVRD. In addition, as and by way of security, RBN assigned in favor of
PNB, all its rights and interest over radio and television frequencies issued by the National
Telecommunications Commission, located in Tuguegarao, Baguio, Manila, Cebu, Bacolod,
Iloilo, including those in Cagayan de Oro (FM Stations), and Manila (AM Station and TV-UHF
Station).23 On September 1997, RJVRD paid PNB the accrued interest on the loan amounting
to P353,478,628.88. RBN also updated its first account with PNB by paying
about P41,000,00.00. In March 1998, RJVRD, RBN and PNB entered into discussions on the
restructuring of the loans. Respondents alleged that while discussions were ongoing, the
accounts of RJVRD and RBN became delinquent.24 PNB sent RJVRD, a notice,25 dated 2 June
1998, declaring their accounts delinquent and demanding the settlement of the same.26

Respondents asserted that prior to 11 June 1998, in line with the continuing discussions
between PNB and RBN for the restructuring of the loan, PNB required the redenomination of
RBN's loan as a condition for its restructuring.27On 11 June 1998, RBN sent a letter to PNB in
agreement to the redenomination of the loan, stating therein the agreed terms for the
restructuring of the loan. RJVRD sent a letter to PNB agreeing to redenominate its own loan
based on PNB's initial proposal, which letter was returned to RJVRD for the reason that, at that
time, the proposals for the restructuring of the RJVRD loan component did not call for the
redenomination of the loan of RJVRD.28 On 24 June 1998, RBN sent a letter to PNB, confirming
to redenominate the loan under the terms stated in its letter of 11 June 1998.29 On 9 September
1998, respondents asseverated that PNB made a call to RJVRD, asking the latter to
redenominate its loans. On the same date, RJVRD sent PNB, a letter in agreement to the
redenomination.30 On 23 October 1998, the RJ Groups of Companies sent Mr. Benjamin Palma
Gil, president of PNB, a proposal for the settlement of respondents' accounts, including a
request for the restructuring of the loans.31

On 25 January 1999, PNB, through its counsel, sent RBN a demand letter, requiring the latter to
settle their outstanding account of P841,460,891.91.32 In a letter similarly dated 25 January
1999, PNB by counsel, demanded from RJVRD the settlement of its total obligation
of P5,405,301,470.82.33 On 28 January 1999, RBN sent a letter to PNB's counsel, expressing
its surprise to receive the demand letter despite their continuing negotiations with PNB for the
restructuring of its accounts.34 In its letter, RBN said that it was, in fact, required by PNB to
redenominate its dollar loans into pesos as an initial step for the restructuring of the account,
and which it has complied.35 On even date, RJVRD sent a letter to PNB's counsel emphasizing
that it had not been advised of any adverse development in their negotiation with PNB nor had it
been informed of the discontinuance of the negotiation. RJVRD sought for additional time to
justify its proposal to PNB with the aim of arriving at a friendly settlement.36

On 18 February 1999, PNB made a demand to RBN to turnover the possession and/or control
of Broadcasting Equipment Inventory located at No. 33, Dominican Hills, Baguio City.37 On 18
February 1999, RJVRD received a Notice of Extrajudicial Sale, dated 1 February 1999 for the
sale of the Buendia Property38 to be held on 2 March 1999 at the City Hall, Makati City.

Respondents manifested in their Complaint that when RJVRD, as assignee of FWCC

purchased the Buendia Property from PNB, the Philippine economy was progressive; that it was
under this favorable economic scenario that RJVRD agreed to the terms and conditions of the
loan agreements; however, following the Asian economic crisis of July 1997, and with the
depreciation of the Philippine peso, the loan of RJVRD which was denominated in US dollars
rose from P2,944,000,000.00 (US$112,237,895.54) to P5,405,301,470.82.39 According to
respondents, from the original contract price of P3,680,000,000.00, RJVRD already made a
payment of P736,000,000.00, representing twenty-percent (20%) of the value of the Buendia
Property and P353,478,628.88, representing interest on the loan or a total
of P1,089,478,628.88; and that PNB never effectively lost control over the Buendia Property,
considering that simultaneous with the execution of the Loan Agreement between RJVRD and
PNB, RJVRD executed a Real Estate Mortgage over the Buendia Property in favor of PNB.
Furthermore, respondents sought to find recourse under Article 1940 of the Civil Code. They
contended that the action on the part of PNB to foreclose the collaterals pledged or mortgaged
by RJVRD and RBN, including the extrajudicial sale of the Buendia Property on 2 March 1999 at
the City Hall of Makati City, and the planned take over of RBN's radio facilities in Baguio City
would be, among others, premature.41

Finally, in support of its Application for the Issuance of a Temporary Restraining Order and a
Writ of Preliminary Injunction, respondents alleged that RJVRD and RNB would suffer great and
irreparable injury by the extrajudicial foreclosure of the property and the take over of RBN's
radio facilities in Baguio, unless a Temporary Restraining Order and/or Writ of Preliminary
Injunction is issued enjoining defendants from implementing the Notice of Extrajudicial Sale
dated 1 February 1999, and enjoining PNB from taking possession and control of RBN's radio
facilities in Baguio City. Respondents maintained that the commission or continuance of the acts
complained of during the litigation or the non-performance thereof would work injustice to
RJVRD and RBN. They manifested their willingness to post a bond as the court a quo may fix in
its discretion, to answer for whatever damages PNB may sustain for the reason of the
restraining order or injunction, if finally determined that respondents are not entitled thereto.

Acting on respondent's prayer for the issuance of a Temporary Restraining Order, the RTC,
issued an Order42 dated 2 March 1999, denying the same. The RTC held that the evidence
showed that respondents are in default of payment of its loan from PNB, amounting
to P5,405,301,470.82, including interests and penalties. According to the RTC, the respondents
failed to prove that they have a clear right to restrain the foreclosure of the Buendia Property;
whereas, it is PNB which has a clear right to the Buendia Property. The RTC opined that the
evidence failed to prove that respondents will suffer "irreparable injury" if the foreclosure of the
Buendia Property is not enjoined, for under the law, respondents have one (1) year from the
date of the registration of the sale with the Register of Deeds within which to redeem the
Buendia Property; thus, respondents will have a chance to recover the ownership thereof by
way of redemption. Finally, the RTC ruled that the rule of equity is on the side of PNB
considering that the Buendia Property was formerly owned by PNB. The RTC denied the
application for Temporary Restraining Order for lack of merit, and held that the exposure of PNB
in the transaction amounted to P5,405,301,470.82, while the exposure of respondents
is P1,089,478,628.00.43

On 2 March 1999, the Buendia Property was sold in a public auction conducted by Atty. Juan S.
Buan, Notary Public of Makati City.44 There being no other bidder, the Buendia Property was
sold to PNB for the amount of P2,800,000,000.00. On 3 May 1999, RBN received a Notice of
Extrajudical Sale from PNB, specifying therein that the property covered by Broadcating
Equipment Inventory located at No. 33 Dominical Hills, Baguio City will be sold for cash at public
auction to the highest bidder on 10 May 1999, at the City Hall, Baguio City, pursuant to the
terms of the Deed of Chattel Mortage dated 19 June 1994 to satisfy the mortgage indebtedness
of P841,460,491.91.45
Following this development, on 4 May 1999, respondents filed an Urgent Application for the
Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction. 46 Respondents
prayed that a Temporary Restraining Order be issued enjoining PNB or any persons acting
under its instructions from foreclosing on any other collaterals pledged or mortgaged by
respondents to PNB, particularly that which is subject of the Notice of Extrajudicial Sale to be
conducted by Notary Public Perlita Chan-Rondez in Baguio City on 10 May 1999. It was
likewise prayed that after due proceedings, a Writ of Preliminary Injunction be similarly
issued. 47

On 7 May 1999, the RTC issued an Order48 granting the Writ of Preliminary Injunction
respondents' application for the issuance of a Temporary Restraining Order (TRO), upon
posting of a bond in the amount of P1,000,000.00.

On 27 May 1999, the RTC issued an Order,49 granting the Writ of Preliminary Injunction,
enjoining PNB from foreclosing all collaterals pledged or mortgaged by respondents to PNB, in
particular those described in Exhibits A to L thereof, after the posting of a bond in the amount
of P5,000,000.00.50 According to the court, the right of PNB to foreclose the chattel mortgages
is still challenged by the respondents and therefore, is not yet clearly established. Hence, if PNB
is allowed to foreclose the subject chattel mortgages, the determination of the right of PNB to
foreclose the subject properties will become moot and academic. Subsequently, on 28 May
1999, a Writ of Preliminary Injunction was issued.

On 9 June 1999, PNB filed a Motion for Reconsideration51 of the Order of 27 May 1999. PNB
averred, inter alia, that RBN failed to produce any evidence to substantiate and support its claim
that it is entitled to the Writ of Preliminary Injunction in order to enjoin PNB from foreclosing on
the subject chattels. According to PNB, it was able to show that RBN failed without justifiable
cause or reason to service the credit facilities extended to it. PNB advanced the argument that
RBN has no clear right in esse; therefore, it cannot seek relief from the court. PNB claimed that
they were able to prove irreparable damage to the bank if PNB will be enjoined from foreclosing
on the chattel mortgages. PNB maintained that proceeding with the auction sale of the subject
properties would lower the bank's "past due ratio" approximately by 2%; hence, with the
decrease in the bank's "past due ratio percentage," there would be no legal impediment to
PNB's resumption to full lending operations since the Bangko Sentral ng Pilipinas'
recommendation for stoppage of grants of new loans is anchored on PNB's current high "past
due ratio." In support of its Motion for Reconsideration, PNB further theorized that decreasing its
"past due ratio" would improve investors' confidence; hence, substantially enhancing the viability
of PNB in its move to attain full privatization by the year 2000.

In its Opposition,52 respondents submitted that during the hearing of the application for a Writ of
Preliminary Injunction, the court expressed its position that it will not receive evidence relative to
the merits of the case as the same would pre-empt the resolution of the merits or dispose of the
main case without trial; therefore, by agreement of the parties, the principal issue was limited to
whether RBN will suffer irreparable injury if the writ of preliminary injunction is not issued.
According to respondents, the damage to RBN's image, loss of listenership, advertisers, staff
and employees is unquantifiable in monetary terms. Irreparable damage would be caused to
RBN if PNB is allowed to foreclose its equipments. It would also disrupt, if not, paralyze, the
operations of RBN's stations. They further asserted that there is no reason to disturb the
injunction issued by the court absent a showing of manifest abuse.
On 28 July 1999, the RTC issued an Order53 granting PNB's Motion for Reconsideration. This
was subsequently rectified in the Order of 29 July 1999 as to the date of the Writ of Preliminary
Injunction from May 28, 1998 to May 28, 1999.54 In lifting the Writ of Preliminary Injunction of 28
May 1999, the RTC rationalized that the failure of RBN to pay the three (3) credit facilities it
obtained from defendant PNB was established; thus, RBN was considered to have effectively
"defaulted" on its loan obligation. In the same Order, the RTC concluded that RBN made
express admission of its delinquency in its Complaint. Moreover, the RTC held that the "cross-
default provision"55 embodied in the Loan Agreement between the parties establishes against
the grant of the injunction.

Respondents moved for a reconsideration of the 28 July 1999 Order, submitting that there was
no reason to disturb the preliminary injunction order as there was no showing of a manifest
abuse by then Presiding Judge Hon. Eriberto U. Rosario, in the issuance thereof. Respondents
explicated, inter alia, that the sufficiency of their application was already passed upon by the
RTC through the Order dated 27 May 1999.

On 26 October 1999, the RTC issued an Order,56 denying respondents' Motion for
Reconsideration for the lifting of the Writ of Preliminary Injunction dated 28 May 1999.

Aggrieved, on 7 December 1999, respondents filed with the Court of Appeals a Petition
for Certiorari under Rule 65 of the Rules of Court assailing the Orders dated 28 July 1999 and
26 October 1999, imputing grave abuse of discretion on the part of the RTC in dissolving the
Writ of Preliminary Injunction earlier issued.

Before the appellate court, respondents argued that the sufficiency of their application for
preliminary injunction was already raised and passed upon by the RTC in the Injunction Order
dated 27 May 1999; however, PNB was not able to allege "other grounds" for the lifting thereof
as mandated by Section 6 of Rule 58 of the Rules of Court.57Moreover, respondents asserted
that on the issue of the purported delinquency, the RTC failed to consider PNB's judicial
admissions, whereby the rights of PNB should be those of a seller covered by the law on Sales
(Title VI, Book IV, Civil Code), and not those of a money-lender covered by the law on Loans
(TitleXI, Book IV, Civil Code); hence, PNB's rights as a seller are either to rescind the sale,
retrieve the title to the property transferred to the buyer, and exact payment of damages or to
leave the property with the buyer, to exact payment of the entire price with interest, and recover
damages thereby suffered. According to the respondents, the PNB as seller had recovered
through foreclosure the Buendia Property. They alleged that: PNB had forfeited in its favor as
mortgagor, the payments already made by RJVRD and the interest thereon; PNB is in the
process of recovering as mortgagor and seller additional damages in the form of interests,
penalties, charges, attorney's fees, etc; and PNB is in the process of recovering as mortgagor,
by way of the foreclosure of mortgage, other realty and chattels of significant value.
Respondents contended that there was no grave abuse of discretion in the issuance of the Writ
of Preliminary Injunction because the contemplated foreclosure of the other properties will work
injustice to RBN and would render ineffectual any judgment on the merits of the case
ineffectual.

Anent the issue of whether respondents will suffer irreparable injury, respondents pleaded that
although the immediate effect of a Writ of Preliminary Injunction may be quantifiable in pesos,
the effect on the respondents is its viability that stands to be affected in the long-term.
Respondents rationalized that the foreclosure of the radio equipment will result in the stoppage
of operations, and eventually, the loss of the image of the station. These factors will cause the
loss of its listenership and client confidence, which cannot be quantifiable in monetary terms.
Moreover, respondents set forth the contention that even as PNB suggested that after
foreclosure, the radio equipment would either be sold to improve PNB's liquidity or disposed by
way of lease-purchase agreement, there exists no assurance that RBN can repurchase the
foreclosed collaterals.

The Ruling of the Court of Appeals

On 9 December 1999, the Court of Appeals issued a Resolution58 temporarily enjoining PNB
from foreclosing any collateral pledged or mortgaged by RJVRD and RBN, and from taking
possession and control of the latter's radio facilities in Baguio City, until further orders from the
appellate court. In granting the same, the Court of Appeals underscored that the purpose of the
temporary injunctive relief is to preserve the status quo ante between the parties, and so as not
to render moot and academic the relief prayed for in the Petition. Accordingly, the Court of
Appeals set the hearing on the application for the issuance of a preliminary injunction on 11
January 2000.

On 10 January 2000, the PNB filed a Comment with the Court of Appeals, disputing the
imputation of grave abuse of discretion on the part of the RTC when it lifted the preliminary
injunction. The PNB opposed respondents' claim that there exists in their favor a right to be
protected. According to PNB, the foreclosure of the collaterals shall be effective upon the default
of RBN, which default had been established as RBN was unable to properly service the loan
agreements without justifiable cause and despite due demand. Anent the issue on the existence
of irreparable injury, PNB challenged respondents' contention by arguing that there is, in fact, a
pecuniary standard by which RBN's damage can be measured per the testimony of RBN's
witness that it will suffer a loss of P1.2 Billion for the next ten (10) years. PNB further posited
that there were no judicial admissions on their part to the effect that RJVRD and RBN are not
delinquent. In furtherance of its opposition, PNB averred that it acted in two separate capacities
as seller and lender. As a seller, PNB owned the Buendia Property and offered it for sale to
interested parties. PNB accepted the bid of RJVRD and the property was sold to the latter. As a
lender, PNB supplied the credit facility to RJVRD as the latter needed to borrow money to
finance the payment of the remaining balance. PNB insisted that these two transactions cannot
be treated as one and the same; hence, there is nothing that prevents it from acting as a seller
and lender at the same time. In fine, PNB maintained that RJVRD did not default on the
payment of the purchase price for such was completely paid; rather, it defaulted on the payment
of the loan, on its principal, and interest.

On 4 February 2000, the Court of Appeals issued a Resolution,59 granting the Writ of
Preliminary Injunction, enjoining PNB and its agents from foreclosing the collaterals pledged
and mortgaged by RJVRD and RBN and from taking over possession and control of RBN radio
facilities in Baguio City. The appellate court, held, viz:

The principal action in the petition at bar dwells on the controversy on whether or not the
respondent court committed grave abuse of discretion in issuing the order lifting and
setting aside the injunctive relief earlier issued in Civil Case No. 4592 (sic). If no
preliminary injunction is issued in this case, pending resolution of such main petition,
respondent will proceed to foreclose the pledged or mortgaged collaterals. In that
eventuality, petitioners stand to sustain injury and irreparable damage, the loss of its
properties, income[,] and clientele listeners in the subject radio broadcasting station in
Baguio City, even before the instant certiorari proceeding could be resolved. To allow
 the impending foreclosure to proceed, at this point in time, will surely be violative of
petitioners' right to be heard and to due process. It is for this reason, for the preservation
of the status quo between the parties, pending decision of the main petition and in order
not to render the same moot and academic, We feel justified to grant the preliminary
injunction prayed for.

IN VIEW OF ALL THE FOREGOING, pending final resolution of the petition at bar, let
a Writ of Preliminary Injunction be issued in this case enjoining the respondent PNB, its
officers or agents from foreclosing the collateral pledged and mortgaged by petitioners,
RJ Ventures Realty & Development Corporation and Rajah Broadcasting Network, Inc.,
from taking over possession and control of RBN radio facilities in Baguio City, upon the
posting of a P1,000,000.00 injunction bond.

Undeterred, PNB filed a Motion for Reconsideration praying that the Order of 4 February 2000
be set aside and the Writ of Preliminary Injunction issued by the Court of Appeals be
immediately lifted and dissolved.

Acting on the Motion, the Court of Appeals, rendered the assailed Decision dated 31 March
2004, denying the same. In the same order, the appellate court, reversed and set aside the
Orders dated 28 July 1999 and 26 October 1999 of the RTC; hence, effectively reinstating the
Writ of Preliminary Injunction earlier issued on 28 May 1999. The Court of Appeals held that the
RTC was not asked to make a definitive conclusion on the issue of whether RBN was indeed
guilty of default in paying its loan nor was it asked to resolve whether RBN committed a breach
against PNB which necessitated foreclosure. A determination of whether there was default or
breach can be only be reached after the principal action is set for trial on the merits after the
parties are given opportunity to present evidence in support of their respective claims.

The appellate court decreed, to wit:

It must be emphasized that a preliminary injunction may be granted at any stage of an

action prior to final judgment, requiring a person to refrain from a particular act. As the
term itself suggests, it is merely temporary, subject to the final disposition of the principal
action. The justification for the preliminary injunction is urgency. It is based on evidence
tending to show that the action complained of must be stayed lest the movant suffer
irreparable injury or the final judgment granting the relief sought become
ineffectual. Necessarily, that evidence need only be a "sampling," as it were, and
intended merely to give the court an idea of the justification for the preliminary injunction
pending the decision of the case on the merits. The evidence submitted at the hearing
on the motion for preliminary injunction is not conclusive of the principal action, which
has yet to be decided. (Olalia vs. Hizon, 196 SCRA 665 [1991]).

Anent the issue of whether RBN would sustain "irreparable injury" should the chattel
mortgage be foreclosed, it bears repeating that the evidence to be submitted at the
hearing on the motion for preliminary injunction need not be conclusive and complete.
On this score, We find petitioners to have sufficiently established the existence of
irreparable injury to justify, albeit provisionally, the restraint of the act complained against
them.

We find that the potential injury demonstrated by the various testimonies presented by
petitioners more than satisfies the legal and jurisprudential requirements of "irreparable
 injury." There is no gainsaying in that the foreclosure of the subject radio equipment[s]
would inevitably result in stoppage of operations. This, in turn, shall result to (sic) the
station's tarnished image and consequent loss of public listenership. Loss of listenership
then leads to loss of confidence of the station's patrons and advertising clients that
would cause serious repercussions on its ability to sustain its operations. Undoubtedly,
the loss of image and reputation by a radio station are matters that are not quantifiable in
terms of monetary value.

All told, We find the court a quo's lifting of the injunction earlier issued tainted with grave
abuse of discretion properly correctable by the special writ of certiorari. 60

On 4 May 2004, PNB moved for the reconsideration thereon. On 8 July 2004, the Court of
Appeals rendered a Resolution, finding no justification to compel a modification or reversal of
the 31 March 2004 Decision.

Hence, the instant Petition.

The Issues

PNB recites the following statement of the issues, viz:

WHETHER OR NOT THE PETITION FILED BY PNB INVOLVES QUESTIONS OF

FACTS WHICH SHOULD BE A CAUSE FOR ITS DISMISSAL;

II

WHETHER OR NOT THE DEFAULT BY RJVRD AND RBN IN THE PAYMENT OF

THEIR RESPECTIVE LOAN OBLIGATIONS TO PNB JUSTIFIES THE DENIAL OF THE
ISSUANCE OF THE WRIT OF PRELIMINARY INJUNCTION FOR THE
FORECLOSURE OF THE MORTGAGED PROPERTIES;

III

WHETHER OR NOT RBN'S ADMISSION OF ITS FAILURE TO SETTLE ITS LOAN

OBLIGATION IN FULL GIVES PNB A CLEAR RIGHT TO FORECLOSE THE
MORTGAGE;

IV

WHETHER OR NOT [THE] RIGHT OF RJVRD AND RBN TO A WRIT OF INJUNCTION

IS CLEAR, EXISTING[,] AND UNMISTAKABLE; and

WHETHER OR NOT THE HONORABLE COURT OF APPEALS HAD LEGAL BASIS IN

REVERSING AND SETTING ASIDE THE ORDER DATED JULY 28, 1999 AND
 OCTOBER 26, 1999 OF THE REGIONAL TRIAL COURT OF MAKATI, BRANCH 66,
AND THEREBY ISSUING A WRIT OF CERTIOARI IN FAVOR OF RJVRD AND RBN.61

The Ruling of the Court

The pivotal issue in the instant Petition is whether the Court of Appeals correctly reinstated the
Writ of Preliminary Injunction dated 28 May 1999. Hence, the question is whether respondents
RJVRD and RBN are entitled to the Writ of Preliminary Injunction. It is for this reason that we
shall address and concern ourselves only with the assailed writ, but not with the merits of
the case pending before the trial court. A preliminary injunction is merely a provisional
remedy, adjunct to the main case subject to the latter's outcome.62 It is not a cause of action in
itself.63

This Petition has no merit.

Foremost, we reiterate that the sole object of a preliminary injunction is to maintain the status
quo until the merits can be heard. 64 A preliminary injunction65 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. It is a preservative remedy to ensure the protection of a party's
substantive rights or interests pending the final judgment in the principal action. A plea for an
injunctive writ lies upon the existence of a claimed emergency or extraordinary situation which
should be avoided for otherwise, the outcome of a litigation would be useless as far as the party
applying for the writ is concerned.66

The grounds for the issuance of a Writ of Preliminary Injunction are prescribed in Section 3 of
Rule 58 of the Rules of Court. Thus:

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

be granted when it is established:

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

(b) That the commission, continuance or nonperformance of the act or acts

complained of during the litigation would probably work injustice to the applicant;
or

(c) That a party, court, agency or a person is doing, threatening, or is attempting

to do, or is procuring or suffering to be done, some act or acts probably in
violation of the rights of the applicant respecting the subject of the action or
proceeding, and tending to render the judgment ineffectual.

Otherwise stated, for a Writ of Preliminary Injunction to issue, the following requisites must be
present, to wit: (1) the existence of a clear and unmistakable right that must be protected, and
(2) an urgent and paramount necessity for the writ to prevent serious damage.67 Indubitably, this
Court has likewise stressed that the very foundation of the jurisdiction to issue a writ of
injunction rests in the existence of a cause of action and in the probability of irreparable injury,
inadequacy of pecuniary compensation and the prevention of multiplicity of suits.68 Sine dubio,
the grant or denial of a writ of preliminary injunction in a pending case rests in the sound
discretion of the court taking cognizance of the case since the assessment and evaluation of
evidence towards that end involve findings of facts left to the said court for its conclusive
determination.69 Hence, the exercise of judicial discretion by a court in injunctive matters must
not be interfered with except when there is grave abuse of discretion.70 Grave abuse of
discretion in the issuance of writs of preliminary injunction implies a capricious and whimsical
exercise of judgment that is equivalent to lack of jurisdiction, or where the power is exercised in
an arbitrary or despotic manner by reason of passion, prejudice or personal aversion amounting
to an evasion of positive duty or to a virtual refusal to perform the duty enjoined, or to act at all
in contemplation of law.71

We find the conclusions reached by the Court of Appeals to be in accord with law.

The Supreme Court is not a trier of facts.72 While this is perhaps one of our more emphatic
doctrines, it admits of certain exceptions, inter alia, when the findings of the Court of Appeals
are contrary to those of the trial court.73 In the case at bar, we apply the exception and proceed
to make a determination of whether there is a factual and legal bases for a Writ of Preliminary
Injunction to issue.

First, respondents were able to establish a clear and unmistakable right to the possession of the
subject collaterals. Evidently, as owner of the subject collaterals that stand to be extrajudicially
foreclosed, respondents are entitled to the possession and protection thereof. RBN as the
owner and operator of the subject radio equipment and radio stations have a clear right over
them. The instant case does not involve abstract rights, or a future and contingent rights, but a
right that is already in existence. To our minds, petitioner's claim that respondents have lost
their rights to the subject collaterals in the face of their admission of default is best threshed out
in a full-blown trial a quo where the merits of the case can be tried and determined. Significantly,
to give the trial court a fair idea of whether a justification for the issuance of the writ exists, only
a "sampling" of the evidence is needed, pending a decision on the merits of the case.74 Hence,
the determination of respondents' default and the legality of the defenses they adduced are
matters appropriately subject of the trial on the merits.

Second, there is an urgent and paramount necessity to prevent serious damage. Indeed, 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.75 PNB assails the
existence of this ground by raising the argument that there is, in actuality, a pecuniary standard
by which RBN's damage can be measured, as evidenced by the testimony of RBN's witness
that it will suffer a loss of P1.2 Billion for the next ten (10) years.

To be sure, this court has declared that the term irreparable injury has a definite meaning in law.
It does not have reference to the amount of damages that may be caused but rather to the
difficulty of measuring the damages inflicted. If full compensation can be obtained by way of
damages, equity will not apply the remedy of injunction.76The Court of Appeals declared that the
evidence adduced by respondents more than satisfies the legal and jurisprudential requirements
of irreparable injury. It behooves this court to appreciate the unique character of the collaterals
that stand to be affected should the Writ of Preliminary Injunction be dissolved as PNB would
have it. The direct and inevitable result would be the stoppage of the operations of respondents'
radio stations, consequently, losing its listenership, and tarnishing the image that it has built
over time. It does not stretch one's imagination to see that the cost of a destroyed image is
significantly the loss of its good name and reputation. As aptly appreciated by the appellate
court, the value of a radio station's image and reputation are not quantifiable in terms of
monetary value. This conclusion can be gleaned from the testimony of respondents' witness,
Jose E. Escaner, Jr., General Manager of RBN, thus:

Atty. Mendoza:

Q: Now, in your forty (40) years in the broadcast (sic) industry, have you had any
personal experience in (sic) any actual interruption in the operations of a radio station
programming?

Witness:

A: Yes, when I was handling the network of the then Ambassador Nanding Cojuanco
within which the radio stations were sequestered and sometime or the other it (sic) went
off the air and immediately, we do not have any revenues, so much so that we actually
suffered two (2) to three (3) years.

Atty. Mendoza:

Q: And how long did it take for that station in Cebu that you mentioned to retain its
listenership day? (sic)

Witness:

A: Well, honestly, until now its airtime, because of its image, status image (sic) which is
the reputation of an AM Station while they are still recouping other stations, the other
reports came over (sic) and practically brought their ratings down, so, until now they still
have to recoup.

Atty. Mendoza:

Q: What radio station are you referring to?

Witness:

A: DYRB.

Atty. Mendoza:

Q: What would be the consequence if the radio stations of RBN stops (sic) operation
(sic)?

Witness:

A: It will lose whatever image it has generated to this point and (sic) time, it will cost
irreparable damage not only to its operation but most of all (sic) its image as being built
by RNB. Rajah Broadcasting Network and I doubt very much if it will still be able to
recoup to a very good result, what we are now generating.
Atty. Mendoza:

That is all for the witness, Your Honor.

COURT:

Alright (sic), cross.

Atty. dela Vega:

With the permission of the Honorable Court.

xxxx

Atty. dela Vega:

Q: Based from (sic) your experienced (sic) as the person engaged in media practice Mr.
Witness, with respect to the possession, let us go to the heart of the matter as of this
point and time.

COURT:

You shoot the question straight.

Atty. dela Vega:

Yes, Your Honor.

(continuing to (sic) the witness

Q Will it made a difference to the operations of a radio station and relation with the
listeners and their clients if technical equipments, in (sic) the technical equipments, the
ownership over the sale are transferred to another person?

Witness:

A: If you take the equipment immediately that would mean stopping our operations. That
would mean stopping our day to day communication with our listenership. That they will
be wondering, that will cost damage and (sic) our image immediately. That will cost
damage to our contracts right now without keeping with our clients.

Atty. dela Vega:

Q: Usually that person who owns that particular equipment will get the particular
equipment. When you say get, what do you mean by get Mr. Witness?

Witness:
 A: If for instance was what we are talking about right now, you are going to foreclose, ok,
(sic), what will we use?

Atty. dela Vega:

Q: Assuming Mr. Witness, that the creditor of Rajah Broadcasting Network will not get,
will not get the equipment, will not get their account, will it adversely affect the operations
of Rajah Broadcating?

Witness:

A: Still it will.

Atty. dela vega:

Q: In what way?

Witness:

A: Because that will have an effect now on our relation with our clientele. The image will
be doubt (sic). The will be doubt, there be vacillation in the planning of the media plans,
vacillation in the buying of airtime.

Atty. dela Vega:

Q It will affect?

Witness:

A: It will affect. The confidence is there.

Atty. dela Vega:

Q: It will affect?

Witness:

A: We do not want our clientele to lose confidence.77

Evidently, there exists in the case at bar a pressing necessity to avoid injurious consequences
to respondents which cannot be remedied under any standard compensation. After a careful
scrutiny of the attendant circumstances, we do not find herein a reason for reversing the
reinstatement by the Court of Appeals of the Writ of Preliminary Injunction earlier issued.

The Fallo

WHEREFORE, the Petition is DENIED. The Decision dated 31 March 2004 and the Resolution
dated 8 July 2004 of the Court of Appeals in CA-G.R. SP No. 56119, reversing and setting aside
the 28 July 1999 and 26 October 1999 Orders of the RTC, Branch 66 of Makati City in Civil
Case No. 99-452, and reinstating the Writ of Preliminary Injunction issued on 28 May 1999
are AFFIRMED. Costs against petitioners.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 166759 November 25, 2009

SOFIA TORRES, FRUCTOSA TORRES, HEIRS OF MARIO TORRES and SOLAR

RESOURCES, INC.,Petitioners,
vs.
NICANOR SATSATIN, EMILINDA AUSTRIA SATSATIN, NIKKI NORMEL SATSATIN and
NIKKI NORLIN SATSATIN, Respondents.

DECISION

PERALTA, J.:

This is a petition for review on certiorari assailing the Decision1 dated November 23, 2004 of the
Court of Appeals (CA) in CA-G.R. SP No. 83595, and its Resolution2 dated January 18, 2005,
denying petitioners motion for reconsideration.

The factual and procedural antecedents are as follows:

The siblings Sofia Torres (Sofia), Fructosa Torres (Fructosa), and Mario Torres (Mario) each
own adjacent 20,000 square meters track of land situated at Barrio Lankaan, Dasmarias,
Cavite, covered by Transfer Certificate of Title (TCT) Nos. 251267,3 251266,4 and
251265,5 respectively.

Sometime in 1997, Nicanor Satsatin (Nicanor) asked petitioners mother, Agripina Aledia, if she
wanted to sell their lands. After consultation with her daughters, daughter-in-law, and
grandchildren, Agripina agreed to sell the properties. Petitioners, thus, authorized Nicanor,
through a Special Power of Attorney, to negotiate for the sale of the properties.6

Sometime in 1999, Nicanor offered to sell the properties to Solar Resources, Inc. (Solar). Solar
allegedly agreed to purchase the three parcels of land, together with the 10,000-square-meter
property owned by a certain Rustica Aledia, for P35,000,000.00. Petitioners alleged that Nicanor
was supposed to remit to them the total amount of P28,000,000.00 or P9,333,333.00 each to
Sofia, Fructosa, and the heirs of Mario.

Petitioners claimed that Solar has already paid the entire purchase price of P35,000,000.00 to
Nicanor in Thirty-Two (32) post-dated checks which the latter encashed/deposited on their
respective due dates. Petitioners added that they also learned that during the period from
January 2000 to April 2002, Nicanor allegedly acquired a house and lot at Vista Grande BF
Resort Village, Las Pias City and a car, which he registered in the names of his unemployed
children, Nikki Normel Satsatin and Nikki Norlin Satsatin. However, notwithstanding the receipt
of the entire payment for the subject property, Nicanor only remitted the total amount
of P9,000,000.00, leaving an unremitted balance of P19,000,000.00. Despite repeated verbal
and written demands, Nicanor failed to remit to them the balance of P19,000,000.00.
Consequently, on October 25, 2002, petitioners filed before the regional trial court (RTC) a
Complaint7 for sum of money and damages, against Nicanor, Ermilinda Satsatin, Nikki Normel
Satsatin, and Nikki Norlin Satsatin. The case was docketed as Civil Case No. 2694-02, and
raffled to RTC, Branch 90, Dasmarias, Cavite.

On October 30, 2002, petitioners filed an Ex-Parte Motion for the Issuance of a Writ of
Attachment,8 alleging among other things: that respondents are about to depart the Philippines;
that they have properties, real and personal in Metro Manila and in the nearby provinces; that
the amount due them is P19,000,000.00 above all other claims; that there is no other sufficient
security for the claim sought to be enforced; and that they are willing to post a bond fixed by the
court to answer for all costs which may be adjudged to the respondents and all damages which
respondents may sustain by reason of the attachment prayed for, if it shall be finally adjudged
that petitioners are not entitled thereto.

On October 30, 2002, the trial court issued an Order9 directing the petitioners to post a bond in
the amount of P7,000,000.00 before the court issues the writ of attachment, the dispositive
portion of which reads as follows:

WHEREFORE, premises considered, and finding the present complaint and motion sufficient in
form and substance, this Court hereby directs the herein plaintiffs to post a bond, pursuant to
Section 3, Rule 57 of the 1997 Rules of Civil Procedure, in the amount of Seven Million Pesos
(P7,000,000.00), before the Writ of Attachment issues.10

On November 15, 2002, petitioners filed a Motion for Deputation of Sheriff,11 informing the court
that they have already filed an attachment bond. They also prayed that a sheriff be deputized to
serve the writ of attachment that would be issued by the court.

In the Order12 dated November 15, 2002, the RTC granted the above motion and deputized the
sheriff, together with police security assistance, to serve the writ of attachment.

Thereafter, the RTC issued a Writ of Attachment13 dated November 15, 2002, directing the
sheriff to attach the estate, real or personal, of the respondents, the decretal portion of which
reads:

WE, THEREFORE, command you to attach the estate, real or personal, not exempt from
execution, of the said defendants, in your province, to the value of said demands, and that you
safely keep the same according to the said Rule, unless the defendants give security to pay
such judgment as may be recovered on the said action, in the manner provided by the said
Rule, provided that your legal fees and all necessary expenses are fully paid.

You shall return this writ with your proceedings indorsed hereon within twenty (20) days from
the date of receipt hereof.

GIVEN UNDER MY HAND AND SEAL of this Court, this 15th day of November, 2002, at Imus
for Dasmarias, Cavite, Philippines.14

On November 19, 2002, a copy of the writ of attachment was served upon the respondents. On
the same date, the sheriff levied the real and personal properties of the respondent, including
household appliances, cars, and a parcel of land located at Las Pias, Manila.15
On November 21, 2002, summons, together with a copy of the complaint, was served upon the
respondents.16

On November 29, 2002, respondents filed their Answer.17

On the same day respondents filed their answer, they also filed a Motion to Discharge Writ of
Attachment18anchored on the following grounds: the bond was issued before the issuance of the
writ of attachment; the writ of attachment was issued before the summons was received by the
respondents; the sheriff did not serve copies of the application for attachment, order of
attachment, plaintiffs affidavit, and attachment bond, to the respondents; the sheriff did not
submit a sheriffs return in violation of the Rules; and the grounds cited for the issuance of the
writ are baseless and devoid of merit. In the alternative, respondents offered to post a counter-
bond for the lifting of the writ of attachment.19

On March 11, 2003, after the parties filed their respective pleadings, the RTC issued an
Order20 denying the motion, but at the same time, directing the respondents to file a counter-
bond, to wit:

WHEREFORE, premises considered, after the pertinent pleadings of the parties have been
taken into account, the herein defendants are hereby directed to file a counter-bond executed to
the attaching party, in the amount of Seven Million Pesos (P7,000,000.00), to secure the
payment of any judgment that the attaching party may recover in the action, with notice on the
attaching party, whereas, the Motion to Discharge Writ of Attachment is DENIED.

SO ORDERED.21

Thereafter, respondents filed a motion for reconsideration and/or motion for clarification of the
above order. On April 3, 2003, the RTC issued another Order22 which reads:

In view of the Urgent Motion For Reconsideration And/Or Motion For Clarification of the Order of
this Court dated March 11, 2003, denying their Motion to Discharge Writ of Attachment filed by
the defendants through counsel Atty. Franco L. Loyola, the Motion to Discharge Writ of
Attachment is denied until after the defendants have posted the counter-bond in the amount of
Seven Million Pesos (P7,000,000.00).

The defendants, once again, is directed to file their counter-bond of Seven Million Pesos
(P7,000,000.00), if it so desires, in order to discharge the Writ of Attachment.

SO ORDERED.

On December 15, 2003, respondents filed an Urgent Motion to Lift/Set Aside Order Dated
March [11], 2003,23 which the RTC denied in an Order24 of even date, the dispositive portion of
which reads:

WHEREFORE, premises considered, defendants Urgent Motion to Lift/Set Aside Order Dated
March 23, 2003 (With Manifestation to Dissolve Writ of Attachment) is hereby DENIED for lack
of Merit.

SO ORDERED.
Respondents filed an Urgent Motion for Reconsideration,25 but it was denied in the
Order26 dated March 3, 2004.

Aggrieved, respondents filed before the CA a Petition for Certiorari, Mandamus and Prohibition
with Preliminary Injunction and Temporary Restraining Order27 under Rule 65 of the Rules of
Court, docketed as CA-G.R. SP No. 83595, anchored on the following grounds:

(1) public respondents committed grave abuse of discretion amounting to lack of or in

excess of jurisdiction in failing to notice that the lower court has no jurisdiction over the
person and subject matter of the complaint when the subject Writ of Attachment was
issued;

(2) public respondents committed grave abuse of discretion amounting to lack of or in

excess of jurisdiction in granting the issuance of the Writ of Attachment despite non-
compliance with the formal requisites for the issuance of the bond and the Writ of
Attachment.28

Respondents argued that the subject writ was improper and irregular having been issued and
enforced without the lower court acquiring jurisdiction over the persons of the respondents.
They maintained that the writ of attachment was implemented without serving upon them the
summons together with the complaint. They also argued that the bond issued in favor of the
petitioners was defective, because the bonding company failed to obtain the proper clearance
that it can transact business with the RTC of Dasmarias, Cavite. They added that the various
clearances which were issued in favor of the bonding company were applicable only in the
courts of the cities of Pasay, Pasig, Manila, and Makati, but not in the RTC, Imus, Cavite.29

On November 23, 2003, the CA rendered the assailed Decision in favor of the respondents,
finding grave abuse of discretion amounting to lack of or in excess of jurisdiction on the part of
the RTC in issuing the Orders dated December 15, 2003 and March 3, 2004. The decretal
portion of the Decision reads:

WHEREFORE, the instant petition is hereby GRANTED. Accordingly, the assailed Orders are
hereby nullified and set aside. The levy on the properties of the petitioners pursuant to the Writ
of Attachment issued by the lower court is hereby LIFTED.

SO ORDERED.30

Petitioners filed a Motion for Reconsideration,31 but it was denied in the Resolution32 dated
January 18, 2005.

Hence, this petition assigning the following errors:

I.

THE HONORABLE COURT OF APPEALS ERRED IN ORDERING THE LIFTING OF THE

WRIT OF ATTACHMENT PURSUANT TO SECTION 13, RULE 57 OF THE REVISED RULES
OF CIVIL PROCEDURE.

II.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT PUBLIC
RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
OR IN EXCESS OF JURISDICTION IN GRANTING THE WRIT OF ATTACHMENT DESPITE
THE BOND BEING INSUFFICIENT AND HAVING BEEN IMPROPERLY ISSUED.

III.

THE HONORABLE COURT OF APPEALS ERRED IN NOT DISMISSING THE PETITION BY

REASON OF ESTOPPEL, LACHES AND PRESCRIPTION AND IN HOLDING THAT THE
WRIT OF ATTACHMENT WAS IMPROPERLY AND IRREGULARLY ENFORCED IN
VIOLATION OF SECTION 5, RULE 57 OF THE REVISED RULES OF COURT.

IV.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE PRINCIPLE OF

ESTOPPEL WILL NOT LIE AGAINST RESPONDENTS.

Petitioners maintain that in the case at bar, as in the case of FCY Construction Group, Inc. v.
Court of Appeals,33the only way the subject writ of attachment can be dissolved is by a counter-
bond. They claim that the respondents are not allowed to file a motion to dissolve the
attachment under Section 13, Rule 57 of the Rules of Court. Otherwise, the hearing on the
motion for the dissolution of the writ would be tantamount to a trial on the merits, considering
that the writ of preliminary attachment was issued upon a ground which is, at the same time, the
applicants cause of action.

Petitioners insist that the determination of the existence of grounds to discharge a writ of
attachment rests in the sound discretion of the lower court. They argue that the
Certification34 issued by the Office of the Administrator and the Certifications35 issued by the
clerks of court of the RTCs of Dasmarias and Imus, Cavite, would show that the bonds offered
by Western Guaranty Corporation, the bonding company which issued the bond, may be
accepted by the RTCs of Dasmarias and Imus, Cavite, and that the said bonding company has
no pending liability with the government.

Petitioners contend that respondents are barred by estoppel, laches, and prescription from
questioning the orders of the RTC issuing the writ of attachment. They also maintain that the
issue whether there was impropriety or irregularity in the issuance of the orders is moot and
academic, considering that the attachment bond questioned by the respondent had already
expired on November 14, 2003 and petitioners have renewed the attachment bond covering the
period from November 14, 2003 to November 14, 2004, and further renewed to cover the period
of November 14, 2004 to November 14, 2005.

The petition is bereft of merit.

A writ of preliminary attachment is defined as a provisional remedy issued upon order of the
court where an action is pending to be levied upon the property or properties of the defendant
therein, the same to be held thereafter by the sheriff as security for the satisfaction of whatever
judgment that might be secured in the said action by the attaching creditor against the
defendant.36
In the case at bar, the CA correctly found that there was grave abuse of discretion amounting to
lack of or in excess of jurisdiction on the part of the trial court in approving the bond posted by
petitioners despite the fact that not all the requisites for its approval were complied with. In
accepting a surety bond, it is necessary that all the requisites for its approval are met;
otherwise, the bond should be rejected.37

Every bond should be accompanied by a clearance from the Supreme Court showing that the
company concerned is qualified to transact business which is valid only for thirty (30) days from
the date of its issuance.38 However, it is apparent that the Certification39 issued by the Office of
the Court Administrator (OCA) at the time the bond was issued would clearly show that the
bonds offered by Western Guaranty Corporation may be accepted only in the RTCs of the cities
of Makati, Pasay, and Pasig. Therefore, the surety bond issued by the bonding company should
not have been accepted by the RTC of Dasmarias, Branch 90, since the certification secured
by the bonding company from the OCA at the time of the issuance of the bond certified that it
may only be accepted in the above-mentioned cities. Thus, the trial court acted with grave
abuse of discretion amounting to lack of or in excess of jurisdiction when it issued the writ of
attachment founded on the said bond.

Moreover, in provisional remedies, particularly that of preliminary attachment, the distinction

between the issuance and the implementation of the writ of attachment is of utmost importance
to the validity of the writ. The distinction is indispensably necessary to determine when
jurisdiction over the person of the defendant should be acquired in order to validly implement
the writ of attachment upon his person.

This Court has long put to rest the issue of when jurisdiction over the person of the defendant
should be acquired in cases where a party resorts to provisional remedies. A party to a suit
may, at any time after filing the complaint, avail of the provisional remedies under the Rules of
Court. Specifically, Rule 57 on preliminary attachment speaks of the grant of the remedy "at the
commencement of the action or at any time before entry of judgment."40 This phrase refers to
the date of the filing of the complaint, which is the moment that marks "the commencement of
the action." The reference plainly is to a time before summons is served on the defendant, or
even before summons issues.41

In Davao Light & Power Co., Inc. v. Court of Appeals,42 this Court clarified the actual time when
jurisdiction should be had:

It goes without saying that whatever be the acts done by the Court prior to the acquisition of
jurisdiction over the person of defendant x x x issuance of summons, order of attachment and
writ of attachment x x x these do not and cannot bind and affect the defendant until and
unless jurisdiction over his person is eventually obtained by the court, either by service on
him of summons or other coercive process or his voluntary submission to the courts authority.
Hence, when the sheriff or other proper officer commences implementation of the writ of
attachment, it is essential that he serve on the defendant not only a copy of the applicants
affidavit and attachment bond, and of the order of attachment, as explicitly required by Section 5
of Rule 57, but also the summons addressed to said defendant as well as a copy of the
complaint x x x. (Emphasis supplied.)

In Cuartero v. Court of Appeals,43 this Court held that the grant of the provisional remedy of
attachment involves three stages: first, the court issues the order granting the application;
second, the writ of attachment issues pursuant to the order granting the writ; and third, the writ
is implemented. For the initial two stages, it is not necessary that jurisdiction over the person of
the defendant be first obtained. However, once the implementation of the writ commences, the
court must have acquired jurisdiction over the defendant, for without such jurisdiction, the court
has no power and authority to act in any manner against the defendant. Any order issuing from
the Court will not bind the defendant.44

Thus, it is indispensable not only for the acquisition of jurisdiction over the person of the
defendant, but also upon consideration of fairness, to apprise the defendant of the complaint
against him and the issuance of a writ of preliminary attachment and the grounds therefor that
prior or contemporaneously to the serving of the writ of attachment, service of summons,
together with a copy of the complaint, the application for attachment, the applicants affidavit
and bond, and the order must be served upon him.

In the instant case, assuming arguendo that the trial court validly issued the writ of attachment
on November 15, 2002, which was implemented on November 19, 2002, it is to be noted that
the summons, together with a copy of the complaint, was served only on November 21, 2002.

At the time the trial court issued the writ of attachment on November 15, 2002, it can validly to
do so since the motion for its issuance can be filed "at the commencement of the action or at
any time before entry of judgment." However, at the time the writ was implemented, the trial
court has not acquired jurisdiction over the persons of the respondent since no summons was
yet served upon them. The proper officer should have previously or simultaneously with the
implementation of the writ of attachment, served a copy of the summons upon the respondents
in order for the trial court to have acquired jurisdiction upon them and for the writ to have binding
effect. Consequently, even if the writ of attachment was validly issued, it was improperly or
irregularly enforced and, therefore, cannot bind and affect the respondents.

Moreover, although there is truth in the petitioners contention that an attachment may not be
dissolved by a showing of its irregular or improper issuance if it is upon a ground which is at the
same time the applicants cause of action in the main case, since an anomalous situation would
result if the issues of the main case would be ventilated and resolved in a mere hearing of a
motion. However, the same is not applicable in the case bar. It is clear from the respondents
pleadings that the grounds on which they base the lifting of the writ of attachment are the
irregularities in its issuance and in the service of the writ; not petitioners cause of
action.1avvphi1

Further, petitioners contention that respondents are barred by estoppel, laches, and
prescription from questioning the orders of the RTC issuing the writ of attachment and that the
issue has become moot and academic by the renewal of the attachment bond covering after its
expiration, is devoid of merit. As correctly held by the CA:

There are two ways of discharging the attachment. First, to file a counter-bond in accordance
with Section 12 of Rule 57. Second[,] [t]o quash the attachment on the ground that it was
irregularly or improvidently issued, as provided for in Section 13 of the same rule. Whether the
attachment was discharged by either of the two ways indicated in the law, the attachment debtor
cannot be deemed to have waived any defect in the issuance of the attachment writ by simply
availing himself of one way of discharging the attachment writ, instead of the other. The filing of
a counter-bond is merely a speedier way of discharging the attachment writ instead of the other
way.45
Moreover, again assuming arguendo that the writ of attachment was validly issued, although the
trial court later acquired jurisdiction over the respondents by service of the summons upon
them, such belated service of summons on respondents cannot be deemed to have cured the
fatal defect in the enforcement of the writ. The trial court cannot enforce such a coercive
process on respondents without first obtaining jurisdiction over their person. The preliminary writ
of attachment must be served after or simultaneous with the service of summons on the
defendant whether by personal service, substituted service or by publication as warranted by
the circumstances of the case. The subsequent service of summons does not confer a
retroactive acquisition of jurisdiction over her person because the law does not allow for
retroactivity of a belated service.46

WHEREFORE, premises considered, the petition is DENIED. The Decision and Resolution of
the Court of Appeals dated November 23, 2004 and January 18, 2005, respectively, in CA-G.R.
SP No. 83595 are AFFIRMED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 166719 March 12, 2007

SILANGAN TEXTILE MANUFACTURING CORPORATION, TRADEWORLD SYNERGY,

INCORPORATED, and CELLU INDUSTRIES, INCORPORATED, Petitioners,*
vs.
HON. AVELINO G. DEMETRIA, PRESIDING JUDGE, REGIONAL TRIAL COURT, LIPA CITY,
BRANCH 85, and LUZON SPINNING MILLS, INCORPORATED, Respondents.

DECISION

CHICO-NAZARIO, J.:

Luzon Spinning Mills, Incorporated (LSMI) filed before the Regional Trial Court (RTC) of Lipa
City, Branch 85, a Complaint dated 23 August 2000, for Collection of Sum of Money1 against
Silangan Textile Manufacturing Corporation (STMC). In its Complaint, LSMI alleged that from 19
November 1998 to 14 June 1999, Anita, Jimmy and Benito, all surnamed Silangan, in their
capacity as stockholders and officers of STMC ordered 111,161.60 kilograms of yarn, valued in
the total amount of P9,999,845.00. The yarns were delivered at the office of STMC as
evidenced by delivery receipts.2 In payment of the yarns, STMC issued 34 postdated checks in
the total amount of P9,999,845.00. Among these postdated checks are the following:

Check No. Date Amount

0239973 5-12-99 P317,952.00
0239990 1-05-99 316,125.00
0239991 1-05-99 229,110.00
0239992 1-07-99 288,771.00
0239994 1-12-99 200,025.00
0239995 1-12-99 287,748.00
0296801 1-29-99 207,970.00
0296802 1-30-99 206,127.00
0296803 2-01-99 316,577.00
TOTAL 2,370,405.003

When presented for payment, the foregoing postdated checks were dishonored for the reason,
"Drawn Against Insufficient Fund" (DAIF). LSMI demanded from STMC the immediate payment
of the obligation.4 STMC failed and refused to heed the demand of LSMI; hence, the latter filed
the Complaint before the RTC.
In accordance with the prayer of LSMI, and finding the same to be sufficient in form and
substance, the RTC issued a writ of preliminary attachment against STMCs properties.5 In this
connection, a notice of attachment on the properties in the name of STMC covered by Transfer
Certificates of Title No. 202686 and No. 202685 was issued.6

Apparently, LSMI had already previously instituted before the Municipal Trial Court (MTC) of
Lipa City, Branch 1, criminal cases against the Silangans for violation of Batas Pambansa Blg.
22. Thus, STMC was prompted to file a Motion, praying to dismiss the civil Complaint before the
RTC, to cite STMCs lawyer for contempt for forum shopping, and to discharge the writ of
preliminary attachment issued by the trial court.7 After LSMI filed its Comment/Opposition to the
motion of STMC, the RTC resolved the said motion by denying it for lack of merit. 8

The RTC held that:

For forum-shopping to exist, both actions must involve the same transactions and same
essential facts and circumstances. There must also be identical causes of action, subject matter
and issues (PRC vs. CA, 292 SCRA 155). Forum-shopping also exists where the elements of
litis pendencia are present or where a final judgment in one case will amount to res judicata in
the other (Alejandro vs. CA, 295 SCRA 536).

In the case at bar, the two (2) cases, one for violation of BP 22 and the other for collection of
sum of money although concerning the same amount of money are distinct litigations, neither
involving exactly the same parties nor identical issues.

The accused in the criminal cases for violation of BP 22 are the persons who signed the
worthless checks while the defendants in the instant case are the corporations which have
outstanding obligations to the plaintiff. Hence, there is no identity of parties in the aforesaid
cases.

As to whether or not the requisites prescribed by law for the issuance of a writ of preliminary
attachment have been complied with, record show (sic) that the contents of the affidavit required
for the issuance of a writ of preliminary attachment were incorporated in the complaint, verified
and certified as correct by Mr. Vicente Africa, Jr. Thus, there was substantial compliance of
Section 3, Rule 57 of the Rules of Court.9

The Motion for Reconsideration and Motion to Discharge Attachment and Admit Counter-
bond10 filed by STMC were denied by the RTC in its Order dated 9 April 2001.11

STMC elevated the case to the Court of Appeals via a Petition for Certiorari under Rule 65 of
the Rules of Court12which was dismissed by the appellate court in a Decision13 dated 25
October 2004, holding that:

But it is also true that when the bounced check involved is issued by a corporation, B.P. Blg. 22
imposes the criminal liability only on the individual/s who signed the check, presumably in
keeping with the principle that generally only natural persons may commit a crime. Thus:

"Where the check is drawn by a corporation, company or entity, the person or persons who
actually signed the check in behalf of such drawer shall be liable under this Act."
We hold, at any rate, that with respect to the civil liability, the corporation concerned should bear
the responsibility, the drawing of the bum check being a corporate act. And a corporation has a
legal personality of its own different from that of its stockholders/officers who signed the
check/s.

Accordingly, since the herein petitioners, as drawers of the checks in question, are not parties to
the criminal cases for violation of B.P. Blg. 22, the private respondent was and is not prohibited
from filing an independent civil action against them.

Moreover, the civil liability of the accused Silangan(s), the signatories of the checks in the
criminal cases, is based on Article 20 of the Civil Code as declared in Banal vs. Tadeo, Jr.

On the other hand, the liability of petitioners corporations arose from contract. Under Article 31
of the Civil Code and also Section 1(a), Rule 111 of the 2000 Revised Rules on Criminal
Procedure, the offended party has the right to institute a separate civil action when its nexus is
liability not arising from the crime, like a liability arising from contract.

In fine, there is no violation of SC Administrative Circular No. 57-97, now Section 1(b) of the
2000 Revised Rules of Criminal Procedure. The civil actions for the liability of the Silangans as
the signatories to the subject checks are deemed included in the criminal actions filed against
them. The separate action filed against the petitioners corporations for the recovery of the
purchase price of the yarn sold to them did not detract from it as this is an entirely different suit.

xxxx

WHEREFORE, for being deficient both in form and in substance, the instant petition is
DISMISSED, with costs against the petitioners.

STMC filed a Motion for Reconsideration thereon which was denied by the Court of Appeals in a
Resolution dated 24 January 2005.14

Hence, the instant petition.

STMC submits the following issues for our resolution:

I. Whether or not the Honorable Court of Appeals erred in affirming the conclusion of
public respondent Judge Demetria that the certification against forum-shopping is
inapplicable in this case?

II. Whether or not the Honorable Court of Appeals erred in affirming the conclusion of the
public respondent Judge Demetria when it failed to apply Section 1(b), Rule 111 of the
2000 Revised Rules of Criminal Procedure?

III. Whether or not the Honorable Court of Appeals erred in affirming the conclusion of
the public respondent Judge Demetria when it issued the writ of preliminary attachment
in favor of the private respondent.
In its first assigned error, STMC argues that LSMI through its Operation Manager, Mr. Vicente
Africa, failed to certify under oath that he had earlier filed criminal cases for violation of Batas
Pambansa Blg. 22 against the Silangans before the MTC. These cases are as follows:

Case Number Name of Accused

(a) 00-0295 to 00- 0299 and 00-305 Anita Silangan and Benito Silangan
(b) 00-0294, 0300-04 and 306-09 Anita Silangan and Jimmy Silangan
(c) 00-1246 Anita Silangan and Benito Silangan
(d) 99-2145 to 99-2154 99-2154 Anita Silangan and Benito Silangan

The criminal cases for violation of Batas Pambansa Blg. 22 and the collection of sum of money
have the same issues, i.e., the recovery of the subject checks. The subsequent filing of the civil
case for sum of money constitutes forum shopping.

Forum shopping exists when the elements of litis pendentia are present, or when a final
judgment in one case will amount to res judicata in another. There is forum shopping when the
following elements concur: (1) identity of the parties or, at least, of the parties who represent the
same interest in both actions; (2) identity of the rights asserted and relief prayed for, as the latter
is founded on the same set of facts; and (3) identity of the two preceding particulars, such that
any judgment rendered in the other action will amount to res judicata in the action under
consideration or will constitute litis pendentia.15

We grant the petition.

The case of Hyatt Industrial Manufacturing Corporation v. Asia Dynamic Electrix Corporation16 is
instructive. In that case, Hyatt Industrial Manufacturing Corporation (HIMC) instituted before the
Regional Trial Court of Mandaluyong City a complaint for recovery of sum of money against
respondent Asia Dynamic Electrix Corporation (ADEC). The complaint alleged that ADEC
purchased from HIMC various electrical conduits and fittings amounting to P1,622,467.14.
ADEC issued several checks in favor of HIMC as payment. The checks, however, were
dishonored by the drawee bank on the ground of insufficient funds/account closed. Before the
filing of the case for recovery of sum of money before the RTC of Mandaluyong City, HIMC had
already filed separate criminal complaints for violation of Batas Pambansa Blg. 22 against the
officers of ADEC, Gil Santillan and Juanito Pamatmat. They were docketed as I.S. No. 00-01-
00304 and I.S. No. 01-00300, respectively, and were both pending before the Metropolitan Trial
Court (MeTC) of Pasig City. These cases involved the same checks which were the subjects of
Civil Case No. MC-01-1493 before the RTC of Mandaluyong City.

In holding that the civil case filed subsequent to the criminal cases was deemed instituted in the
criminal cases, this Court held:

It is clear from the records that the checks involved in I.S. No. 00-01-00304 and I.S. No. 00-01-
00300 are the same checks cited by petitioner in Civil Case No. MC 01-1493. The Court will
certainly not allow petitioner to recover a sum of money twice based on the same set of checks.
Neither will the Court allow it to proceed with two actions based on the same set of checks to
increase its chances of obtaining a favorable ruling. Such runs counter to the Courts policy
against forum shopping which is a deplorable practice of litigants in resorting to two different
fora for the purpose of obtaining the same relief to increase his chances of obtaining a favorable
judgment. It is a practice that ridicules the judicial process, plays havoc with the rules on orderly
procedure, and is vexatious and unfair to the other parties of the case.17

In dismissing Civil Case No. MC-01-1493, this Court applied and interpreted Supreme Court
Circular No. 57-97 effective 16 September 1997, which reads:

1. The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to necessarily
include the corresponding civil action, and no reservation to file such action separately shall be
allowed or recognized.

From this Supreme Court Circular was adopted Rule 111(b) of the 2000 Revised Rules of
Criminal Procedure which reads:

(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include the
corresponding civil action. No reservation to file such civil action separately shall be allowed.

In the Hyatt case, the Court further negated the claim that there are no identity of parties and
causes of action in the criminal and civil complaints for violation of Batas Pambansa Blg. 22
where a criminal case against the corporate officers is filed ahead of the civil case against the
corporation. The parties in the civil case against the corporation represent the same interest as
the parties in the criminal case. As to the issue of identity or non-identity of relief sought, this
Court held that the criminal case and the civil case seek to obtain the same relief. Thus:

With the implied institution of the civil liability in the criminal actions before the Metropolitan Trial
Court of Pasig City, the two actions are merged into one composite proceeding, with the
criminal action predominating the civil. The prime purpose of the criminal action is to punish the
offender to deter him and others from committing the same or similar offense, to isolate him
from society, reform or rehabilitate him or, in general, to maintain social order. The purpose,
meanwhile, of the civil action is for the restitution, reparation or indemnification of the private
offended party for the damage or injury he sustained by reason of the delictual or felonious act
of the accused. Hence, the relief sought in the civil aspect of I.S. No. 00-01-00304 and I.S. No.
00-01-00300 is the same as that sought in Civil Case No. MC 01-1493, that is, the recovery of
the amount of the checks, which, according to [HIMC], represents the amount to be paid by
[ADEC] for its purchases. To allow [HIMC] to proceed with Civil Case No. MC 01-1493 despite
the filing of I.S. 00-01-00304 and I.S. No. 00-01-00300 might result to a double payment of its
claim.18

The purpose of Section 1(b) of Rule 111 is explained by Justice Florenz D. Regalado, former
chairman of the Committee tasked with the revision of the Rules of Criminal Procedure. He
clarified that the special rule on Batas Pambansa Blg. 22 cases was added because the dockets
of the courts were clogged with such litigations and creditors were using the courts as
collectors. While ordinarily no filing fees are charged for actual damages in criminal cases, the
rule on the necessary inclusion of a civil action with the payment of filing fees based on the face
value of the check involved was laid down to prevent the practice of creditors of using the threat
of a criminal prosecution to collect on their credit free of charge.19

Applying the Hyatt case to the case before us, the dismissal of Civil Case No. 00-0420 before
the RTC is warranted. It is not denied that LSMI likewise filed several criminal complaints
Muagainst the officers of STMC before the MTC prior to the filing of Civil Case No. 00-0420. As
provided in Supreme Court Circular No. 57-97, as re-echoed in Rule 111, Section 1(b), of the
2000 Rules of Criminal Procedure, the civil action now filed against STMC arising from its
issuance of the bouncing checks is deemed instituted in the criminal cases filed against its
officers pending before the MTC.

Finally, as to the prayer of STMC for the discharge of the Writ of Preliminary Attachment issued
by the RTC, Rule 57 of the Revised Rules of Court provides:

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:

(a) In an action for the recovery of a specified amount of money or damages, other than moral
and exemplary, on a cause of action arising from law, contract, quasi-contract, delict or quasi-
delict against a party who is about to depart from the Philippines with intent to defraud his
creditors.

xxxx

SEC. 2. Issuance and contents of order. An order of attachment may be issued either ex parte
or upon motion with notice and hearing by the court in which the action is pending, or by the
Court of Appeals or the Supreme Court, and must require the sheriff of the court to attach so
much of the property in the Philippines of the party against whom it is issued, not exempt from
execution, as may be sufficient to satisfy the applicants demand, unless such party makes
deposit or gives a bond as hereinafter provided in an amount equal to that fixed in the order,
which may be the amount sufficient to satisfy the applicants demand or the value of the
property to be attached as stated by the applicant, exclusive of costs. Several writs may be
issued at the same time to the sheriffs of the courts of different judicial regions.

SEC. 3. Affidavit and bond required. An order of attachment shall be granted only when it
appears by the affidavit of the applicant, or of some other person who personally knows the
facts, that a sufficient cause of action exists, that the case is one of those mentioned in Section
1 hereof, that there is no other sufficient security for the claim sought to be enforced by the
action, and that the amount due to the applicant, or the value of the property the possession of
which he is entitled to recover, is as much as the sum for which the order is granted above all
legal counterclaims. The affidavit, and the bond required by the next succeeding section, must
be duly filed with the court before the order issues.

Attachment is an ancillary remedy. It is not sought for its own sake but rather to enable the
attaching party to realize upon relief sought and expected to be granted in the main or principal
action.20 Being an ancillary or auxiliary remedy, it is available during the pendency of the action
which may be resorted to by a litigant to preserve and protect certain rights and interests therein
pending rendition, and for purposes of the ultimate effects, of a final judgment in the case. They
are provisional because they constitute temporary measures availed of during the pendency of
the action and they are ancillary because they are mere incidents in and are dependent upon
the result of the main action.21
A writ of preliminary attachment is a species of provisional remedy. As such, it is a collateral
proceeding, permitted only in connection with a regular action, and as one of its incidents; one
of which is provided for present need, or for the occasion; that is, one adapted to meet a
particular exigency.22 On the basis of the preceding discussion and the fact that we find the
dismissal of Civil Case No. 00-00420 to be in order, the writ of preliminary attachment issued by
the trial court in the said case must perforce be lifted.23

Wherefore, premises considered, the petition is GRANTED. The Decision of the Court of
Appeals dated 25 October 2004 and Resolution dated 24 January 2005 affirming the Resolution
dated 9 April 2001 of the Regional Trial Court of Lipa City, Branch 85, are hereby reversed and
set aside. Civil Case No. 00-0420 before the Regional Trial Court of Lipa City, Branch 85, is
ordered DISMISSED. The attachment over the properties by the writ of preliminary attachment
issued by the same trial court is hereby ordered LIFTED.

SO ORDERED.