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PROVISIONAL REMEDIES (PRELIM. ATTACHMENT-RULE 57) 4.) Queen filed motion to discharge att. for lack of jurisdiction to issue it because at time order of attachment was
promulgated & the attachment writ issued TC not yet acquired jurisdiction over the cause and persons of Queen w/c
1.) SALGADO (def) vs. CA was opposed by DL.
1.) Philippine Commercial and Industrial Bank (PCIB), hereinafter filed action to recover on promis. note in amt. of 5). TC denied Motion to Discharge
P1.5M inclusive of interest and bank charges against Salgado in CFI Rizal; PCIB also prayed for a writ of attachment 6.) CA RULING in appeal by Queen- nullified & set aside writ of prelim. attach. issued by RTC Davao City
grounded on ff: * Court not acquire jurisdiction over person of def. until def. is duly summoned or voluntarily appears
*Salgado fraudulently misappropriated and/or converted to their own personal use sugar proceeds given as security *adding phrase that it be issued 'ex parte' not confer jurisdiction before actual summons been made.
for payment of indebtedness; Salgado guilty of fraud in contracting their obligation and have concealed, removed or 7.) Reversal such CA decision is what DL seeks in the present appellate proceedings.
disposed properties mortgaged or assigned to PCIB; obligation sought to be enforced is genuine, hence sufficient
cause of action exists; there is no sufficient security for claim sought to be enforced by the action. ISSUE: W/n writ of prelim. att. may issue ex parte against def. before acquisition of jurisdiction of his person by
*Attached to complaint was affidavit of Mrs. Helen Osias, Senior Branch Credit Division Manager of PCIB, wherein service of summons or his voluntary submission to Court's authority =YES.
she stated: "that there is no sufficient security for the claim sought to be enforced by action." SC: 1.) Provisional remedies may be validly and properly applied for and granted even before the def. is summoned
2.) TC granted PCIB's prayer for prelim. attachment upon a bond of P1.5M. or is heard from.
3.)Upon filing of bond, Sheriff levied upon parcels of land of Salgado situated in Negros Occidental 2.) Prelim att.- plaintiff/other proper party may, at commencement of action or at any time after, have property of
4.) Salgado moved to quash writ of attachment on ground that PCIB made fraudulent misrepresentation in securing adverse party taken into custody of court as security for satisfaction of any judgment
writ by deleting the words "R E M" or "Real Estate Mortgage" from xerox copy of promis. note attached to *phrase, "at commencement of action," refers to date of filing of complaint- time before summons is served on def,
complaint, "making it appear that the note was unsecured when in truth it was fully secured by series of valid real or even before summons issues.
estate mortgages duly registered & annotated in titles of affected real properties. 3.) By filing of complaint and payment of all docket and other fees, plaint. may apply for and obtain writ of prelim.
* Salgado stressed the lack of factual basis of PCIB’s claim att. upon fulfillment of requisites, and he may do so at any time, either before or after service of summons on
5.) After hearing, TC granted Salgado's Motion to Quash and lifting writ of attachment. defendant; and for TC to issue writ ex-parte at commencement of action if it finds the application sufficient in form
6.) PCIB went to CA on certiorari to annul order of TC lifting the writ of attachment and substance.
7.) CA, finding that order of TC not arbitrarily issued, dismissed petition for lack of merit. 4.)No hearing required on app., because this time w/c such a hearing would take, could be enough to enable def. to
8.) PCIB’s MR granted by CA, hence, it authorized issuance of writ of attachment. abscond/ dispose of his prop. before writ of attachment issues."
5.) whatever be the acts done by Court prior to acquisition of jurisdiction over person of def— order of att. and writ
ISSUE: W/n CA is correct in authorizing the issuance of writ of attachment = NO. of att. and however valid & proper they might be, do not bind and affect def. unless jurisdiction over his person is
SC: 1.) Chief purpose of attachment- to secure contingent lien on def's prop. until plaint. can, by appropriate eventually obtained by the court.
proceedings, obtain judgment and have such property applied to its satisfaction, or to make some provision for 6.) Hence, when sheriff commences implementation of writ of attachment, it is essential that he serve on the def.
unsecured debts where the means of satisfaction are liable to be removed beyond the jurisdiction, or improperly not only a copy of applicant's affidavit, attachment bond, and order of attachment, but also summons addressed to
disposed of or concealed, or e placed beyond the reach of creditors. said def, copy of complaint.
2.) SEC.3- order of attachment shall be granted only when made to appear by Affid. of applicant/other person who *Service of all such documents is indispensable not only for acquisition of jurisdiction over the person of the def, but
personally knows facts, that there’s no other sufficient security for claim sought to be enforced by action. also for fairness, to apprise def. of the complaint against him, of issuance of writ of prelim. att. and grounds therefor
* reason for rule prohibiting attachment where indebtedness was already secured is to prevent secured creditors to accord def. opportunity to prevent attachment of his property by the posting counterbond in amount equal
from attaching additional property and thus tying up more of debtor's prop. than was necessary to secure the plaint’s claim in the complaint or dissolving it by causing dismissal of complaint itself, or demonstrating insufficiency
indebtedness. of applicant's affidavit or bond
3.) To sustain order of attachment, plaint. must establish either of 2 facts: (a) obligation had not been secured 7.) Writs of attachment may properly issue ex parte provided Court is satisfied that requisites were fulfilled by
originally or; (b) if secured at its beginning, security later became valueless. applicant, although it may, in its discretion, require prior hearing on application w/notice to the defendant; but that
In the instant case, the allegation in the affidavit of the Bank's Credit Division Manager, levy on property pursuant to writ issued may not be validly effected unless preceded, or contemporaneously
4.) Mrs. Helen Osias’ statement has been shown to be false. accompanied by service on def. of summons, a copy of omplaint), app. for attachment (if not incorporated in but
5.) Undisputed that note sued upon is fully secured by series of valid and existing REMs. submitted separately from the complaint), order of attachment, and plaintiff's attachment bond.
6.) Section 13- authorizes discharge of attachment where same is improperly or irregularly issued.
7.) Since attachment is a harsh and rigorous remedy exposing debtor to humiliation and annoyance, authorizing its 3. Onate (def.) vs Judge Abrogar
issuance must be strictly construed in favor of def.
1.) Sun Life (SL) filed for sum of money with prayer for immediate issuance of writ of attachment against Onate, et al.
2.) DAVAO LIGHT (plaint.) vs. CA in RTC Makati
2.) On following day, Judge of TC granted issuance of writ
1.)DL filed for recovery of sum of money & damages against Queen, w/ ex parte application for a writ of preliminary 3.) Upon SL’s ex-parte motion, TC amended the writ to reflect alleged amount of the indebtedness.
attachment. 4.) Sheriff w/ rep. of SL, attempted to serve summons and copy of amended writ upon Onate et al at offce address at
2.) TC granted ex parte app. & since bond was submitted by DL, writ of attachment was issued. Makati but was not able to do so since no responsible officer to receive the same
3) summons, complaint and writ of att., att. bond, served on Queen, hence sheriff seized props of Queen. 5.), Sheriff proceeded to serve notices of garnishment upon several commercial banks and financial institutions, and
levied on attachment condo unit and real prop. belonging to Oñate.
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6.) Summons was eventually served upon Onate et al 8.) Clear from Sec. 10 that Notice need only be given to garnishee- person who is holding property or credits
7.) Onate, et al filed "Urgent Motion to Discharge/Dissolve Writ of Attachment." belonging to the def. Sec. 10 not require that notice be furnished the def. himself, except when there is a need to
* same day, SL filed ex-parte motion to examine books of accounts & ledgers of petitioner Brunner at Urban Bank, to examine said def for giving info. respecting his property.
obtain copies thereof, which motion was granted by Judge of TC, thus, exam. of account took place 9.) Section 10 Rule compatible with RA 1405, "An Act Prohibiting Disclosure or Inquiry Into, Deposits With Any
8.) Onate, et al filed motion to nullify proceedings taken since they were not present. Banking Institution for Section 2 of said RA provides an exception "in cases where money deposited or invested is
9.) Onate, et al filed memorandum in support of motion of discharge attachment. subject matter of the litigation."
* same day, SL filed another motion for exam. of bank accts, seeking the exam. of Account w/ (BPI) which, Onate, et 10.) Exam. of the bank records not a fishing expedition, but method by which SL could trace proceeds of check it paid
al claim not to be owned by them — and the records of (PNB) for checks payable to Brunner. to Onate, et. al.
*Sun Life asked TC to order BPI & PNB to comply with the notice of garnishment.
10.) Judge of TC denied Onate, et al’s motion to discharge amended writ of attachment and motion to nullify
proceedings; approving SL’s additional attachment bond and motion to examine BPI account, 4.) UY (def) vs. CA
11.) Onate, et al’s Argum: Judge of TC erred in issuing ex parte the original and amended writs of prelim. att. and
notices of garnishment and levy on attachment since TC not yet acquired jurisd. over them; and allowing the exam. 1.) Anlaps are owners of fishing vessel "cub-cub" w/c they rented to Uy for (60) days in which Uy fully paid rentals.
of bank records since no notice was given to them. 2.) Despite expiration of 60-day period Uy failed to return vessel and continued using it w/o paying rentals in spite
repeated demands.
ISSUE: W/n Judge Abrogar erred in issuing ex parte original and amended writs of prelim. att. and notices of 3.) Anlap filed for recovery of sum of money against Uy, return of vessel & damages in RTC Negros Oriental w/c ruled
garnishment and levy on attachment and allowing exam. of bank records= NO. infavor of Anlap ordering Uy to return vessel and pay Anlap
SC: 1.) Writ of prelim. att. may be validly applied for and granted even before the def.is summoned or is heard from. 4.) Uy filed a notice of appeal, while Anlaps filed ex-parte motion for writ of attachment w/c was granted, and the
2.) Petitioners argum. that writ should be discharged since ground on w/c it was issued-fraud in contracting same issued, TC Ruling as follows:
obligation — was not present, cannot be a ground for lifting writ since this delves into the very complaint of SL. * “Uy’s Notice of Appeal not been perfected since last day for taking an appeal not yet expired and finding the Ex-
* attachment may not be dissolved by showing of its irregular/improper issuance if it’s upon ground w/c is at the parte Motion for Writ of Attachment to be meritorious, the same is hereby granted."
same time the applicant's cause of action in main case since anomalous situation would result if issues of main case 5.) Uy filed ex parte motion to discharge said writ but was denied.
would be ventilated and resolved in a mere hearing of motion 6.) CA Ruling: dismissed Uy’s certiorari
3.) Fact that estafa filed by SL against Onate et al was dismissed by Prov. Prosec. is of no moment since the it can be 7.) Uy’s Argum: TC order does not measure up to rigid standard set by SC in issuance of prelim. att. orders since it
indicative only of absence of crim. liab. not of civil liability. Besides, SL elevated case for review to DOJ, where the does not contain any findings of fact or of law.
case is presently pending. *TC in denying Uy’s motion of to discharge the writ admitted that "there was no hearing in granting of the
4.) Onate et al argu, that that enforcement of writ was invalid since it undisputedly preceded actual service of questioned writ ; and to conduct a hearing of said motion will just be a repetition in presentation of evidence already
summons by 6 days at most is umeritorious. on record
*SC even if it’s true that Court enforcement of writ of att. may not validly be effected unless proceeded or * Uy argued that there’s nothing in TC’s decision w/c support any kind of fraud/concealment w/c could serve as basis
contemporaneously accompanied by service of summons, there’s distinction between Sievert and BAC for attachment.
Manufacturing cases as against case at bar. * during entire hearing of main case, no petition for attachment was filed by Anlaps, and it’s only after appeal was
*In those two cases, summons was never served upon defs. and plaint therein not even attempt to cause service of perfected that ex-parte motion for attachment was filed.
summons upon defs, right w/c is not true in the case at bar.
*Sheriff Flores and SL attempt a contemporaneous service of both summons and writ but hindered by absence of ISSUE: W/n TC is correct in granting Anlaps’ exparte motion for issuance of writ of att = NO.
responsible offcer in Onate et al’s offces SC: 1.) Nothing in Rules w/c makes notice & hearing mandatory for the issuance of writ of att.
5.) Exception to established rule on enforcement of the writ can be made where previous attempt to serve the 2.) It’s simply duty of court to ensure that writ is issued on specific grounds & not on general averments, hence, no
summons and writ failed due to factors beyond control of either plaintiff/process server, provided service is effected reason why evidence in main case cannot be used as basis for issuance of writ, also if proven that defs. unjustly
within a reasonable period thereafter. detained, improperly disposed/ concealed prop. beyond reach of their creditors.
6.) Reasons for the exception: a.) possibility that def. having been alerted of plaint's action by attempted service of 3.) In this case , writ was granted only after trial on merits and finding on Uy’s' liability for return of the vessel
summons and the writ would put his properties beyond reach of the plaint. while and by time plaint. cause service leased/ its value in case delivery cannot be effected.
of summons and writ, there might not be any property of def. left to attach; b.) court eventually acquired jurisdiction 4.) But nothing in judgment that would justify issuance of a writ
over Onate, et al 6 days later. To nullify notices of garnishment issued prior thereto would open possibility that 5.) Statement in Anlaps' motion for a writ that they are incorporating "by way of reference allegations of plaintiffs'
Onate, et al would transfer garnished monies while SL applied for new notices of garnishment; c.) ease by which writ complaint and all the evidence already adduced in this case and in which complaint- Anlaps alleged that Uy
can be obtained is counter-balanced by ease by w/c the same can be discharged: def. can either make cash refused/denied them info. as to whereabouts of vessel, are not grounds justifying the issuance of a writ of
deposit/pos counter-bond equivalent to value of prop. attached. In case at bar, Onate et al tried to have writ attachment.
discharged by posting counter-bond, w/c was denied by Judge of TC since amt. of counter-bond was less than that of *Such allegation not proved in the main case and Uy’s liablility is predicated on their non-fulfillment of obligation
SL’s bond under the lease contract.
7.) SL grounded its requests for exam. of the bank accounts on Section 10 6.) Uy’s impression that TC loses jurisdiction to issue a writ upon perfection of appeal is misplaced.
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*Rules specifically state that a motion for a writ may be filed at commencement action/at anytime thereafter, hence, 20.) Adlawan filed the instant petition certiorari and mandamus alleging that respondent Judge gravely abused his
TC may even issue orders for protection and preservation of rights of parties which do not involve any matter discretion in ordering issuance of the writs of prelim. att. inasmuch as the REM executed by them in favor of PCIB did
litigated by the appeal. not constitute fraudulent removal, concealment or disposition of property.
7.) TC’s order of preliminary attachment against properties of UY is LIFTED and CANCELLED. props should be * granting the mortgage constituted removal/disposition of property, it was not per se a ground for attachment
restituted to Uy. lacking proof of intent to defraud the creditors of the defendant.

5.) ADLAWAN (def.) vs. JUDGE TORRES ISSUE: W/n the respondent Judge is correct in issuing the writ of attachment in the consolidated cases for collection
of sums of money= NO.
1.) Aboitiz sought to collect from Adlawan sum of money for unpaid amortizations of loan, technical and managerial SC: 1.) Affid. submitted by Aboitiz in support of its prayer for the writ not meet requirements of Rule 57 regarding
services rendered, unpaid installments of equipment allegations on impending fraudulent removal, concealment and disposition of def's property.
2.) Judge TC- on ex parte app, directed the issuance of the writ of prelim. att. against Adlwan’s prop. * to justify a prelim. att., the removal or disposal must have been made w/ intent to defraud def's creditors, hence,
3.) CFI BR. 11 issued writ addressed to Sheriffs of Cebu and the City Sheriff of Davao. factual basis on def's intent to defraud must be clearly alleged in affidavit in support of the prayer for the writ if not
4.) Sheriff of Davao City enforced writ, resulting in the seizure of heavy construction equipment, motor vehicle spare so specifically alleged in the verified complaint.
parts, and other personal property *It is evident from said affidavit that prayer for attachment rests on the mortgage by Adlawan of 11 parcels of land in
5.) CFI also granted Aboitiz’ Motion to take possession and custody of attached Adlawan’s property Cebu, w/c encumbrance Aboitiz considered as fraudulent concealment of property to its prejudice.
6.) Adlawan moved for a bill of particulars and to set aside ex parte writ of attachment. *SC found that no factual allegation which may constitute as valid basis for contention that mortgage was in fraud of
7.)(JULY 16, 1982 ORDER) CFI ordered lifting of writ and discharge of the property levied upon. Aboitiz; Bare allegation that encumbrance of property is in fraud of creditor does not suffice.
8.) Aboitiz filed urgent ex parte motion, praying for the stay of CFI’s order for 15 days for it to be able to appeal the * execution of mortgage in favor of another creditor not conceived by Rules as one of means of fraudulently
order w/c was favorably acted upon. disposing of one's property.
9.) But Aboitiz filed notice of dismissal of its complaint, hence, CFI issued an order confirming the notice of dismissal. 2.) Consequently, when Adlawan filed MR of the order directing issuance of the writ, respondent Judge should have
10.) Adlawan filed motion praying that July 6, 1982 Order be enforced but CFI denied the motion on account of the considered it as a motion for the discharge of the attachment and should have conducted
filing by Aboitiz in BR. 16 in CFI Cebu in Lapu Lapu City action for delivery of personal prop. & by Adlawan in Br. 10 of a hearing or required submission of counter-affidavits from Adlawan, if only to gather facts in support of the
action for damages w/ seizure of his prop. under the writ of attachment. allegation of fraud
11.) In replevin suit, BR.16 ordered seizure & delivery of prop. w/c was later delivered by sheriff to Aboitiz *This is what Section 13 mandates since attachment is a harsh, extraordinary and summary remedy and the rules
12.) Adlawan filed omnibus motion praying for reconsideration and dissolution of the writ of seizure, the retrieval of governing its issuance must be construed strictly against applicant.
the property seized, and the dismissal of complaint w/c was denied. 3.) The judge before whom application is made exercises full discretion in considering supporting evidence proffered
13.) RULING of SC 3rd DIVISION: since attachment is an ancillary remedy, the withdrawal of complaint left it with no by applicant. One overriding consideration is that a writ of attachment is substantially a writ of execution except that
leg to stand on, hence, attached prop. in the custody of Aboitiz be returned to Adlawan w/o prejudice to the it emanates at the beginning, instead of at the termination of the suit
outcome of the cases filed by both parties
14.) Aboitiz filed MR contending that replevin case was distinct and separate from att.- DENIED
15.) Aboitiz filed 2nd MR and SC ruled: props. in custody of Aboitiz by virtue of writ of attachment issued be returned <>SC not discuss the issue of whether or not Civil Cases Nos. CB-1185 and CEB-1186 constituted undue interference
to Adlawan, but props. in custody of Aboitiz by virtue of writ of replevin be continued in custodia legis of said court with the proceedings in G.R. No. 63225 in view of the entry of judgment in the latter case.
pending litigation therein. (became final and executory) <> Respondent Judge is DIRECTED to PROCEED with the resol. of 2 complaints.
16.) Aboitiz filed against Adlawan 2 complaints for collection of sums of money with prayers for the issuance of writs
of attachment in RTC BR. 23 Cebu City: alleged that Adlawan was awarded a contract for construction of Tago
Diversion and Aboitiz loaned him money and equipment
*Adlawan executed REM covering (11) parcels of land in favor of (PCIB) to secure loan with said bank and was able 6.) CARPIO (def.) vs. JUDGE MACADAEG
to remove/ conceal and dispose of their properties, to defraud Aboitiz
* 2nd Complaint- Adlawan was awarded a contract for the construction of the Lasang River 1.) Abaya filed for recovery of various sums against Carpio for CFI Manila
* Judge in 1st complaint ordered issuance of a writ of attachment; *No writ of prelim. att. was, however, issued in 2nd 2.) Before summons was served, and upon ex parte motion of Abaya, Judge issued 2 orders of attachment, hence,
complaint Sheriff Manila garnished hardware imported by Carpio, and Sheriff Rizal seized Carpio's 5 racing horses
17.) Adlawan filed in those 2 Complaints urgent motions to hold in abeyance enforcement of writs 3.) Carpio filed urgent petition to discharge orders of attachment
18.) Judge finding no merit in Adlawan's MR, directed the sheriffs of Cebu, Davao and Metro Manila "to 4.) Judge set aside 2 orders of attachment hence infavor of Carpio
proceed w/ the enforcement and implementation of the writs of prelim. att." 5.) Upon 2 motions of Abaya, Judge, set aside his order (setting aside order of att.)
* writs of attachment were issued on basis of supporting affids. alleging that Adlawan removed/disposed of their 6.) Though no new petition was filed for issuance of a writ and no new order/alias writ of attachment was issued,
property w/ intent to defraud Aboitiz Sheriff Manila garnished goods and Sheriff Rizal attached the 5 racing horses.
19.) Judge issued an order holding in abeyance the enforcement of writs of to afford Adlawan an opportunity to seek 7.) Upon petition of Abaya, Judge issued an order directing the sale at public auction of 5 horses (Annex but sale was
their other remedies stopped by Carpio’s putting up bond of P4K and horses released to him by Sheriff Rizal.
8.) Upon motion of Abaya, Judge, ordered increase of bond to P10K, and ordered Sheriff Rizal to proceed w/the sale
of horses if Carpio failed to file additional bond of P6K
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9.) Carpio filed MR- denied by Judge, hence, Sheriff Rizal advertised sale at public auction of horses. of their properties in fraud of the creditors.", thus, necessity of giving to Nic. opportunity to ventilate their side in
10.) Upon motion of Abaya, despite opposition of Carpio, Judge authorized sale of garnished goods hearing, in accordance w/ due process, to determine truthfulness of the allegations.
11.) Carpio seeks annulment of order ordering him to file additional bond of P6K; order denying his MR; and the *But no hearing was afforded to Nic since writ having been issued ex parte.
order authorizing sale of garnished goods 4.) A writ of attachment can only be granted on concrete and specific grounds and not on general averments merely
quoting words of the rules.
ISSUE: W/N Judge is correct in issuing 2 writs of prelim. att.= NO. 5.) Judge merely corrected himself by issuing questioned orders, thereby making his actions conform with the
SC: 1.) Judge should not have issued 2 writs of prelim. att. on Abaya's simple allegation that Carpio was about to applicable laws and his findings of fact.
dispose of his property, thereby leaving no security for satisfaction of any judgment. 6.) Since writ was improperly granted, the TC’s order discharging it were compelling and justified to rectify initial
2.) Mere removal/disposal of prop., by itself, NOT ground for issuance of prelim. att., notwithstanding absence of error. Hence, there was no need at all inceptively for Nic. to post counterbond.
any security for satisfaction of any judgment against def.
3.) Removal/disposal, to justify prelim. att., must be made w/intent to defraud def's creditors. <> It is plain, as plain as ordinary and simple words can ever be, that Articles 580 and 584 of the Code of
4.) Judge in fact corrected himself when in acting on Carpio’s motion to discharge att. and apparently believing Commerce were expressly referred to and repealed by Section 2 of PD 214
correctness of grounds alleged therein, he set aside orders of attachment
*But reversing himself again on Abaya's contention that Carpio was about to remove/dispose of his prop. to defraud
his creditors, like the alleged sale of horses and of Carpio's office furniture
*These averments of fraudulent disposals were controverted by Carpio who, reiterated the defenses against prelim. 8.) CALDERON (PL) vs. IAC
atta. w/c he previously enumerated in his petition to discharge 2 orders of attachment. *Thus question of fraudulent
disposal was put in issue and Judge, before issuing prelim. att. anew, should have given parties opportunity to prove 1.) Calderon purchased LBC from private respondents (PR) and its (5) affiliate companies, (21) days after the Bureau
respective claims or, provided Carpio w/ the chance to show that he’s not disposing of his property in fraud of of Customs suspended operations of LBC for failure to pay P1.4M of customs taxes and duties incurred prior to
creditors execution of sale. To lift suspension, Calderon paid P606K to BOC.
5.) Judge should not again ordered issuance of the writ since Abaya never made any affidavit as required by Rules 2.)Calderon filed to recover P1.4M against PR, damages for breach of warranty, prayer for a prelim. atta., alleging:
6.) For issuance of prelim. att., the affid. attached to Abaya's motion, is not suffcient, and it not appear that Abaya that PR had deliberately and willfully concealed from his knowledge such staggering liability of LBC for misleading
ever executed another affidavit that complies with Rule. him into buying; and PR Schulze is about to depart from Phil. defraud his creditors.
*Nothing attached to his MR 3.) Cald. posted a surety bond, thus, TC issued a writ of prelim. att., where properties of PR were attached and their
7.) all succeeding orders of respondent Judge with are null and void; the attached properties are ordered released; bank deposits garnished.
and the prelim. injunc. issued by SC is made permanent 4.) Cald. filed amended complaint, alleging that while liab. of LBC are reflected in its books, said amount was
fraudulently withdrawn and misappropriated by PR Schulze.
5.) PR Claimed: P1.4M due to BOC represents duties and taxes payable out of advanced payments made by LBC's
client and Schulze fully disclose & explained to Cald. that these are to be paid to BOC when became due AND that
7.) D.P. LUB OIL (plaint.) vs. NICOLAS(def) Cald’s rep. inspected and studied corporate books and records and learned daily operations & management of LBC;
that Cald. not pay out of his own pocket but out of LBC funds the said amount of P606K; PR are setting up
1.) Complaint lodged by DP against Nicolas (Nic), et al, for a sum of money & damages w/ prayer for issuance of writ counterclaim for actual, moral and exemplary damages, attorney's fees, for filing baseless suit and wrongful and
of prelim. att. on ground that claim resulted from non-payment of purchase price of fuel oil used for 10 vessels of malicious attachment of their properties
Nic. &under Code of Commerc, vessels may be attached. 6.) PR filed a counterbond, thus TC directed sheriff to return all real and personal props. already levied and to lift
*w/ added averment that Nic. were about to dispose vessels in fraud of creditors including DP notices of garnishment issued
2.) Writ was issued ex parte upon posting of bond by DP, thus, Sheriff, boarded Nic’s fishing vessel, & placed it under 7.) After trial, TC dismissed the complaint, holding Cald. and his surety First integrated Bonding and Insurance Co.,
custodia legis. Inc., jointly and severally liable to pay damages prayed for by PR.
3.) Judge lifted attachment upon posting of counterbond, upon motion of Nic w/o waiving/abandoning their 8.) Said decision was affirmed on appeal, and slightly modified.
objections to grounds for issuance of the writ of attachment.
4.) Nic filed "Motion to Withdraw Counter-bond and to Dissolve Writ of Attachment," ISSUES: W/n TC erred in directing sheriff to return all prop. already levied to PR and making Cald. and Insurance
5.) Judge issued 1st disputed order dissolving the writ and allowed Nic withdrawal of their counterbond. 6.) DP’s MR Compan jointl and severall liable= NO.
denied thus 2nd assailed order SC: 1.) W/n P1.4 M was duly disclosed as outstanding liability of LBC or misappropriated by PR Schulze is purely a
factual issue.
ISSUE: W/n Judge erred in issuing the order dissolving the writ and allowing Nic’s withdrawal of their counterbond/ *Cald. was clearly in bad faith when he asked for attachment is indicated by fact that he failed to appear in court to
W/N DP Entitled To A Writ of Preliminary Attachment In The First Place= NO. support his charge of misapprop. by Schulze, preventing his being cross-examined, no document on the charges was
SC:1.) Judge acted in accordance w/ the existing laws and prevailing jurisprudence. presented by him.
2.) rules on issuance of writ of att. must be construed strictly against applicants because remedy of attachment is * Attachment was maliciously sued out and Schulze was not in bad faith.
harsh, extraordinary, and summary in nature. 2). GR: attachment bond is limited to actual damages; moral and exemplary damages may be recovered where
3.) DP’s prayer for prelim. att. hinges' on allegations in complaint & affidavit of Daniel Pe which are couched in attachment was alleged to be maliciously sued out and established to be so.
general terms devoid of particulars of time, persons, and places to support serious assertion that "Nic. are disposing
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3.) Insurance Company contends that as Cald’s surety, its obli. is extinguished upon Dissolution Of Attachment, as 2.) separate action by 3PC who claims to be owner of property attached is appropriate, thus, judge trying such action
Consequence of Filing of Def’s Counter- Bond; & Filing By PR of Counter-Bond Constitutes Waiver on any defect In may render judgment ordering sheriff/whoever has in possession of attached property to deliver it to plaintiff
Issuance of The Attachment Writ. claimant or desist from seizing it.
* While Section 12 provides that upon filing of a counterbond, attachment is discharged or dissolved, nowhere is it 3.) Neither can Uy complain that they were denied their day in court when TC issued writ w/o hearing since its
provided that attachment bond is rendered void and ineffective upon the filing of counterbond. issuance may be made by court ex parte; notice and hearing not mandatory requisites in its issuance.
* liability of attachment bond is defined in Sec.4: It is clear from said provision that responsibility of surety arises "if 4.) Uy's motion to quash or discharge questioned attachment in court a quo is in effect MR which cured any defect of
court shall finally adjudge that plaint. was not entitled thereto absence of notice.
4.) liability attaches if plaint. not entitled to attachment because requirements entitling him to writ are wanting, or if 5.) Estoppel is unavailing by the mere fact that Ting (complainant in the court a quo) pointed items and merchandise
plaint. has no right to attachment because facts stated in his affidavit, or some of them, are untrue. taken from Mansion House and nearby Bodega which were levied by Special Sheriff
5.) Upon dismissal of attachment wrongfully issued, surety is liable for damages as direct result of said attachment. 6.) sale of the disputed properties at public auction, in satisfaction of judgment of co-equal court does not render the
6.) attachment debtor cannot be deemed to have waived any defect in issuance of attachment writ by simply case moot and academic since attachment and sale of properties belonging to 3rd person is void because such
availing himself of one way of discharging the attachment writ, instead of the other. Moreover, the filing of properties cannot be attached and sold at public auction for enforcing a judgment against judgment debtor.
counterbond is a speedier way of discharging attachment writ maliciously sought out by the attaching creditor 7.) As to Uy's contention that the complaint filed by Ting in TC is merely seeking an ancillary remedy of injunction
instead of other way, w/c would require presentation of evidence in full-blown trial on the merits and cannot easily which is not a cause of action itself, CA correctly observed that object of Ting’s complaint is injunction although
be settled in a pending incident of the case. ancillary remedy of prelim. injunc. was also prayed for during the pendency of the proceeding.

9.) UY JR(Plaint.) vs. CA 10.) CUATERO (plaint.) vs CA

1.)Uy filed for sum of money, damages w/ prelim. att. against Tat in CFI Rizal, QC ( 1st case) 1.) Cuart. filed sum of money plus damages w/ prayer for issuance of writ of prelim. att. in RTC QC against Sps.
2.)Uy filed bond hence, TC issued writ of prelim. att. & appointed Special Sheriff Cabang to implement the writ Evangelista
3.) TC issued break-open order upon motion filed by Uy. 2.) TC issued an order granting ex-parte issuance of writ, thus, writ was issued & summons for Sps prepared.
4) Sheriff began to implement writ and filed Partial Sheriff's Return, stating: he proceeded to QC and effected 3.) following day, copy of writ of preliminary, the TC’s order, summons & complaint were all simultaneously served
physical and actual count of items pointed to by Ting family as taken from the Mansion upon Sps. at their residence, and immediately thereafter, Sheriff levied, attached and pulled out properties not
5.) 3rd party claim filed by Ting (PR herein), addressed to Sheriff asserting ownership over the properties attached exempt from execution, or sufficient to satisfy Cuart’s principal claim
6.) (3PC) filed motion to dissolve writ alleging as absolute owners of personal props. willing to file counterbond 4.) Sps. filed a motion to set aside TC order and discharge writ of preliminary attachment for being, irregularly and
7.) CFI Judge rendered judgment by default in favor of Uy. improperly issued/c was denied by TC.
8.) 3PC filed complaint for Damages w/ app. for prelim. inj. against Uy, et al in court a quo (2nd case) 5.) Sps. filed certiorari with CA w/prayer for restraining order or writ of prelim. inj.
9.) In 2nd civil case, court a quo issued order : parties ordered to maintain STATUS QUO of prop. attached 6.) CA RULNG: not to grant restraining order or writ of prelim.inj,, being no clear showing that Sps. were entitled
10.) In 1st case, Uy filed ex-parte motion for writ of execution w/c was granted & filed motion to quash/ dissolve 7.) CA QUESTIONED DECISION: granted certiorari
status quo order on ground that court "has no jurisdiction to interfere w/ props. under custodia legis on orders of a *TC Did Not Acquire Jurisdiction Over person of Sps & it Tc could not validly issue Writ Of Prelim. Att. w/c is an
court of co-equal and co-ordinate jurisdiction" Ancillary Remedy.
*Uy filed ex-parte motion to authorize Sheriff to sell attached props ground that props. were perishable
11.) Court a quo denied Uy’s motion to quash or dissolve the status quo order. ISSUE: W/n CA is correct in ruling that TC could not validly issue the writ= NO.
12.) In 1st case, Sheriff filed partial sheriff's return this time stating that personal props sold to Uy, winning bidder SC: 1.) Section 3- requisites for issuance of writ are affidavit and bond of applicant.
13.) Back to case a quo, Ting filed motion for prelim. att. alleging that: property has been removed, disposed of to 2.) no notice to adverse party/hearing of application is required hence no merit in Sps’ claim of violation of their
prevent its being found; defs. Uy are guilty of fraud in disposing of property right to due process.
16.) court a quo, issued disputed order granting writ of prelim. att. prayed Ting 3.)writ of prelim.att. can be applied for and granted at commencement of the action or at any time thereafter
17.) Def. Uy filed urgent motion to quash and/or dissolve prelim.att. 4.) writ may issue even before summons is served upon defendant.
18.) half a year later, in case a quo, def. Uy filed motion for prelim. hearing on affirmative defenses as motion to 5.) But writ cannot bind and affect defendant until jurisdiction over his person is eventually obtained. Thus, it is
dismiss. required that when proper officer commences implementation of writ, service of summons should be
19.) court a quo issued other disputed order w/c denied Uy's motion to dismiss simultaneously made.
20.) Judge issued 2 Orders denying both MR (CA decision, Rollo, p. 109-122) 6.) grant of provisional remedy of attachment has 3 stages: a.)court issues order granting application; b.)writ issues
21.) Uy, filed with CA Certiorari & Prohibition w/ prayer for Writ of Prelim. Inj. w/c was dismissed by CA pursuant to such ;c.) writ is implemented.
*For initial 2 stages, it is not necessary that jurisdiction over person of def. should first be obtained.
ISSUE: W/n court a quo erred in granting Ting, et al’s writ of prelim. att. OR W/n props. levied and seized by virtue of *But, once implementation commences, court must have acquired jurisdiction over defendant for w/o such jurisd.
writ of attachment and later by writ of execution, were under custodia legis and therefore not subject to the court has no power & authority to act in any manner against the def. & any order from Court will not bind def.
jurisdiction of another co-equal court where 3PC claimed ownership of the same properties= NO. 7.) When writ was served on Sps, summons and copy of complaint were also simultaneously served.
SC:1.) while property in custody of law may not be interfered w/, w/o permission of proper court, this rule is 8.) The question as to whether proper ground existed for issuance of writ is a question of fact w/c can only be had in
confined to cases where property belongs to def./ or one in w/c def. has proprietary interests appropriate proceedings conducted for purpose
6

9.) Sps’ motion to discharge the writ of was denied by TC for lack of merit; no showing of abuse of discretion 3.) no court has power to interfere by injunction w/ judgment of another court of concurrent jurisd.
10.) attachment may not be dissolved by showing of its irregular or improper issuance if it is upon ground which is at 4.) CA cannot be faulted by its issuance by mere motion of Sps. of Amended Writ of Prelim. Inj. w/c included Civil
same time the applicant's cause of action in the main case since an anomalous situation would result if the issues of Cases brought before CFI Davao Oriental by any party for obstructing or rendering nugatory prelim. att. issued by
the main case would be ventilated and resolved in a mere hearing of a motion CFI of Pampanga
*In present case, one of allegations in Cuart's complaint is that Sps. induced Cuart to grant loan by issuing postdated *To require parties to file a new petition/independent suit would be absurd, it being the very objection of petition
checks to cover installment payments and separate set of postdated checks for payment of stipulated interest , thus where the motion was filed, to enjoin undue and improper interference of the CFI-Davao Oriental to Order of
the issue of fraud, is clearly within competence of TC in the main action. Attachment issued by the CFI-Pampanga.
* issuance of amended writ of prelim. inj. by CA is w/in its inherent power to amend and control its processes and
orders to make them conformable to law and justice
* injunction is essential for the orderly administration of justice and was sought to avoid multiplicity of suits.

11.) NASSER (def) vs. CA


1.) Nass.- lessee of haciendas in Davao Oriental owned by Estate of Don Amadeo Matute 12. MINDANAO SAVINGS (MS) & LOAN ASSO (def.). vs. CA
2.) Matias co-admin. of Estate executed Orig. Contract of Lease & Supplemental Contract of Lease
3.) Nass executed (3) Promiss. Notes in favor of Matias 1.) PR filed for "Rescission of Contract& Damages" w/ prayer for issuance of writ of prelim. att.in the RTC Davao City
4.) Matias assigned, sold, to Aurora Rivera-Canlas, all promis. notes w/ express conformity of Nass against def. D.S. Homes, Inc., (DS) & its directors,
5.) Nass. bought hereditary shares of heirs of Matute 2.) Judge granted ex parte app. for writ of prelim. att.
6.) Out of the total amount of P819K due on (3) promis. notes, Nass paid only P121K 3.) PR amended their complaint & filed 2nd amended complaint impleading as additional def.MS & its Presi.
7.) Aurora with husband (Sps) filed sum of money w/ application for Writ of Prelim.Att.in CFI Pampanga w/c was 4.) Judge issued ex parte amended order of att. against all defs. named in 2nd amended complaint
granted upon a bond, hence, Sheriff issued a notice of garnishment against Nass. 5.) DS & MS filed separate motions to quash writ w/c were denied
8.) Upon motion of Sps, judge deputized Chief of Police of Governor Generoso, Davao Oriental, to serve, and fully 6.) DS offered a counterbond w/c TC accepted & lifted writ
implement Order of Attachment, hence, said Chief of Police attached props. of Nass. 7.) MS filed in CA certiorari to annul order of att. & denial of their motion to quash the same w/c was dismissed by
9.) Nass filed Urgent Urgent Motion to Dissolve/ Discharge Order of Att. w/c was denied by Judge CA & remanded to RTC Davao City for expeditious proceedings
10.) Instead of filing Answer, Nass. filed urgent MR *Objections against writ may no longer be invoked once counterbond is filed for its lifting/ dissolution.
11.) Judge declared Nass. in default, allowed Sps to present evidence ex-parte &ordered Nass. to pay Sps. * grounds invoked for issuance of writ form core of complaint it’s obvious that trial on merit was necessary & merits
12.) Nass. filed in TC "Urgent Motion to Set Aside order deputizing Chief of Police of main action are not triable in motion to discharge attachment otherwise applicant for dissolution could force trial
14.) Judge issued 2 orders: abeyance his resolution on Nass' motion to relieve Chief of Police & denying Nass' MR of on the merits on his motion
the Order denying his motion to dismiss.
15.) CA issued writ of prelim. inj. enjoining judge & Chief of Police, from executing Order of Attachment ISSUE: W/n CA erred in dismissing the Petition= NO.
16.) CA RULING: certiorari and or prohibition is denied for lack of merit and writ of prelim inj. is dissolved. SC: 1.) only requisites for issuance of writ of prelim. att. are affidavit and bond of the applicant.
18.) Meanwhile, Nass. filed for injunction in CFI Davao Oriental against Chiefs of Police praying that they restrained 2.) CA did not err in holding that objections to impropriety/irregularity of writ of attachment "may no longer be
from attempting to stop Nass. from removing or disposing copra from the hacienda invoked once a counterbond is filed," when ground for issuance of writ forms the core of the complaint.
* Chiefs of Police filed Urgent alleging CFI Davao lacks jurisdiction 3.) After def. obtained discharge of writ by filing a counterbond, he may not file another motion under Section 13, to
19.) Nass. filed annulment of Promis. Notes & Deed of Ass.. w/ CFI-Davao Oriental against Sps. & Matute quash the writ for impropriety or irregularity in issuing it.
20.) Both granted b CFI Davao restraining Chiefs of Police from further attaching the copra of Nass. *Reason: writ already been quashed by filing counterbond, hence, another motion to quash it would be pointless.
21.) Sps & Chiefs of Police for certiorari& prohibition w/ prelim. inj. before CA. w/c issued writ of prelim. inj. 4.) CA correctly observed that when ground for issuance of t writ is also core of complaint, question of whether the
enjoining Nass. to refrain from interfering and taking possession of props. levied on the properties plaint. was entitled to writ can only be determined after, not before, full-blown trial on merits of case.
22.) Afterwards other cases were filed against Sps. allegedly by dummies of Nass in CFI Davao
23.) Upo motion Sps, CA issued Amended Writ of Prelim. Inj.

ISSUE: W/n writ of prelim. att. issued by CFI Pampanga in favor Sps. may be enjoined in Civil Case by CFI Davao 13.) CHING vs. CA
Oriental in favor of Nass= NO.
SC: 1.) judge did not err in deputizing the Chief of Police, as special sheriff under Section 2, where judge is expressly 1.) (PBMCI) obtained a loan from (ABC), PBMCI, through its VP Ching, executed a promiss. note
authorized to require not only the sheriff but also other officers province to attach all props. of party against whom it 2.) PBMCI defaulted in payment of all its loans,thus, ABC filed for sum of money w/prayer for writ of prelim.att.
may be issued w/in province not exempt from execution. against the PBMCI & Ching, et al, as sureties of the PBMCI in RTC Manila
2.) verified statement incorporated in complaint w/o separate affdavit is sufficient and valid to obtain attachment. * ABC averred PBMCI are guilty of fraud since they falsely represented themselves to be in financial position to pay
Thus, the verified complaint entitled "App. for Writ of Prelim. Att." w/c specifically stated that to avoid redundancy & their oblig. upon maturity
repetition, the affid. of Sps required under Section 3, is dispensed with, as matters to be treated and contained *supporting affidavit: PBMCI removed or disposed of their properties, or ABOUT to do so, w/ intent to defraud their
therein are already incorporated and made part of complaint, duly verified by them, substantially complied w/ Rules creditors
and court has jurisdiction to issue the writ prayed for
7

3.) after ex-parte hearing, TC denied ABC's app. for writ since grounds alleged in app. and supporting affid. "are all SC:1.) Apa. are correct that what they seek is not damages resulting from improper PI, rather, they are after the
conclusions of fact and of law" execution of judgment in their favor w/c was stayed on strength of supersedeas bond filed by
4.)On ABC’s MR, TC granted ABC's application for a writ on a bond: With respect 2nd ground- alleged disposal of Lumauag.
properties by PBMCI to defraud creditors affid. can only barely justify issuance of writ as against Ching who bound 2.) Since appeal has been finally dismissed and record of case already been remanded to TC, filing of
himself jointly to pay ABC, hence, TC ordered writ issue against Ching requiring sheriff to attach all props. of Ching Apa's motion seeking relief against Lumauag was perfectly in order.
5.) Upon ABC's posting of bond, the TC issued writ &, summonses were served on PBMCI 3.) Anent Lumauag's contention in his answer hat apparently, his principals, the judgment debtors, have amicably
6.) PBMCI & Ching jointly filed a petition for suspension of payments w/ SEC seeking PBMCI's rehab. settled w/ Apa, the same was not raised by him in TC. It’s also denied by Apa. and, therefore, becomes a factual issue
* SEC placed PBMCI, under rehabi. & ordered that "all actions for claims pending including ABC are suspended. not appropriate for SC to resolve here but be threshed out in TC.
7.) PBMCI & Ching jointly filed Motion to Dismiss and/or motion to suspend Civil Case 4.) SC deem it opportune to draw attention of TC to the terms of the judgment:
8.) sheriff levied common shares of Citycorp stocks in name of Ching. *judgment in favor of the plaint. ordering the defs to resell to plaint. the land; defs shall execute in favor/ deliver to
9.) TC partially granted motion by suspending proceedings only w/ respect to PBMCI; it denied Ching's motion to plaint. corresponding deed of sale, otherwise, Clerk of Court shall execute the same once this decision becomes final
dismiss and after plaint. deposited w/ him sum of P3,K.00 representing repurchase price
10.) Instead of filing an answer, Ching filed Motion to Suspend Proceedings on same ground of the land; defs. shall immediately vacate land and deliver its possession to plaint; defs. shall reimburse plaint. for
11.) ABC filed a Motion to Reduce amount of his prelim. att. bond w/c was granted. produce of land w/c defs. received and w/c the plaint. could have received; to pay monthly damage until possession
12.) Encarnacion Ching, assisted by her husband Ching, filed Motion to Set Aside the levy on attachment. *shares of of land been delivered to plaintiffs
stocks levied were acquired by her and her husband during marriage out of conjugal funds 5.) Although questioned order already resolved matter of execution of instrument of resale ordered in the above
*being wife of Ching, she was a 3PC entitled to file a motion for release of props. judgment, what needs to be clarified before execution may issue against Lumauag is the exact amount of liability of
13.) TC lifted writ on shares of stocks and ordered sheriff to return it to Ching to the petitioners. judgment debtors, w/c does not seem to be necessarily the full amount of the P10,000- supersedeas bond he had
14.) ABC filed certiorari w/ CA w/c was granted setting aside TC’s lifting of writ. filed.
* TC deprived ABC of its right to file a bond; Encarnacion Ching was not a party in TC; hence, she had no right of 6.) petition is granted and the impugned orders of respondent judge of set aside, and said respondent is directed to
action to have levy annulled w/ a motion for that purpose thus, her remedy was to file separate proceed to act on Apa's motion pursuant to the above opinion.
action against ABC to nullify levy on Citycorp shares of stocks.

ISSUE 1: W/n Encarnacion-wife has right to file motion to quash levy on attachment on shares of stocks= YES
SC: 1.) Encarn. filed her motion to set aside levy in the name of her husband claiming that shares were conjugal in 15. PRADO vs. VERIDIANO II
nature hence, not liable for account of her husband under his continuing guaranty and suretyship agreement with 1. Smith Bell and Company leased from the government blocks 144 and 145 of the Port Area Manila. They
PBMCI. transferred all their rights to Philippine Building Corporation (PBC), duly approved by the Agriculture and
ISSUE 2: W/n CA is correct in setting aside TC’s order lifting writ of att= NO. Environment Secretary. PBC was able to renew the lease contract but transferred all its rights to S.
SC:1.) RTC did not commit any grave abuse of discretion in lifting writ. Villanueva Enterprises, Inc. (SVEI), which secure a renewal of contract for another 25 yrs.
2.) evidence adduced by Ching in the RTC is that shares in Citycorp were issued to and registered in 2. The then Minister of General Services ordered the cancellation of the contract for violation by SVEI of its
its corporate books in the name of the petitioner-husband w/c was done during subsistence of marriage of Sps, thus, provisions. SVEI appealed the order to the Office of the President which affirmed the cancellation. SVEI's
presumed to be conjugal 3.) ABC failed to prove that conjugal partn. of was benefited by Ching's act of executing several motions for reconsideration were denied.
continuing suretyship agreement w/ ABC in behalf of PBMCI. 3. Earlier on, EO 321 expanded the territorial area of the South Harbor Zone and placed the whole area under
PRELIM. INJUNC. (PI) (RULE 58) the jurisdiction of the PPA.
4. PPA informed SVEI of its intention to take possession of the leased premises and demanded payment for
accrued rentals and interests. SVEI countered it with a proposal to restructure its obligations but the same
was rejected by PPA and demanded SVEI to vacate the premise.
14. APACHECHA vs. Judge ROVIRA 5. PPA caused to publish a notice of bidding over the premise. SVEI filed for a preliminary injunction and/or
TRO. The court issued a preliminary injunction against PPA. The PPA then filed an ejectment case in the
1.) Pending appeal, resps. filed a supersedeas bond to secure stay of immediate execution of judgment in favor of MTC against SVEI.
Apa. 6. PPA filed a motion to dismiss the case filed against it by SVEI which the court granted.
2.) After appeal was dismissed & records remanded to TC, Apa. moved to enforce supersedeas bond when execution 7. SVEI appealed to the CA, pending resolution.
against judgment debtors was returned unsatisfied. 8. On a separate case filed, the actual occupants of Block 145 filed a petition with RTC Manila for Specific
3.) TC denied Apa’s motion stating that under Section 9 of Rule 58 w/ Section 20 of Rule 57, in order that a surety Performance with preliminary injunction and/or restraining order against PPA, they claim to be sublessees
may be bound under bond for damages, application for damages must be filed before entry of final judgment and of Block 145 which is now a commercial complex. They stated that they were not served with notice thus
hearing must be had w/notice to surety. deprived them of due process.
4.) Apa. contended that theirs was not claim for damages resulting from improper injunc. but a motion to enforce 9. Judge Veridiano issued a TRO served only after the bidding, which was declared as a failure for there were
supersedeas bond filed by resps. to secure stay of immediate execution w/c was governed by Section 30 of Rule 39. only 2 bidders. PPA filed an opposition to the injunction.
10. PPA then published another notice for another public bidding. A day before the pre-trial, the lessees filed
ISSUE: W/n petition should be granted= YES an unverified Urgent Motion for the Issuance of a Status Quo Order. The motion does not contain any
8

notice of hearing to the counsel of the petitioners. There is a notice of hearing but was addressed to the Joy mart also asked the court to issue a writ of preliminary injunction and/or restraining order, commanding LRA and
Clerk of Court. Judge Veridiano then ordered a Status Quo. Phoenix to cease and desist from construction being property adjacent to the leased premises. Judge Luna issued the
11. Petitioners challenged the issuance of the Status Quo Order stating that Judge Veridiano committed grave writ.
abuse of discretion.
Phoenix sought relief in CA by filing a petition for certiorari and prohibition to require TC to lift the writ and refrain
ISSUE: WON the Judge committed grave abuse of discretion with the issuance of the Status Quo Order. from implementing it.

HELD: Yes. The act is deemed despotic, arbitrary and capricious. Meanwhile, in TC, LRTA and Phoenix filed separate answers to joy mart.

1. The Judge should have taken notice that the motion for the SQO does not contain a notice of hearing While the certiorari petition to review before the CA was pending, LRTA and Phoenix filed in te TC a joint petition to
addressed to the counsel of the petitioners. It was addressed to the Clerk of Court. Non-compliance with dissolve the writ of prelim injunc, alleging it causes tremendous losses to them bec they been unable to use the
Secs. 4 and 5 Rule 15of the RC. A notice that does not contain a notice of hearing is but a mere scrap of commercial stalls and would suffer 2.7M damaeges to be earned and rentals.
paper; it presents no questions with merits the attention and consideration of the court. It is not even a
motion for it does not comply with the rules, the clerk has no right to receive it. There was also no TC dissolve the writ of prelim injunc. Recon of joy mart denied.
sufficient proof of service to the counsel of the government.
CA dismissed phoenis petition for certiorari being moot and academic.
2. The urgent motion for a status quo order is unverified. What is sought to be enjoined is the scheduled
public bidding, an event which is not pleaded or covered by the original petition. It is therefore a
Joy mart sought relief before the CA for certiorari and prelim injunc and restraining order.
subsequent event which could properly be the subject of a supplemental pleading pursuant to Sec 6, Rule
10. Despite the TRO phoenix continued its construction activities. However, the CA dismissed the petition.
3. Sec 4, Rule 58 RC provides that a preliminary injunction may be granted only if:
a. The complaint is verified Issue: W the TC continued to have control of the writ of prelim injunc even after the same had been raisd to the CA
b. The plaintiff files with the clerk of court the requisite bond for review.
In the attempt to circumvent the rule, the Judge did not mention the term preliminary injunction or TRO.
He just directed the parties to maintain a status quo condition. The SQO was in fact a preliminary injunction to enjoin
Held: Negative.After the LRTA and Phoenix had elevated the writ of prelim injunc to the CA for determination of the
the government from continuing the public bidding. Both conditions of the Rule was not complied with.
propriety of its issuance (CA-G.R. SP No. 12998), the TC (notwithstanding the absence of a TROfrom the appellate
court) could not interfere with or preempt the action or decision of the CA on the writ of prelim injunc whose
4. The sublessees were worse, not entitled by the relied of preliminary injunction for they are mere
annulment was sought therein by Phoenix and the LRTA.
sublesssees. The contract of SVEI with the PPA was cancelled as affirmed by the Office of the President.
Such fact should have provided basis for the dismissal of the preliminary injunction relief sought for by the
sublessees. For the moment SVEI is ousted from the premise, the sublessees was clearly would have no leg In petitioning the TC to lift the writ of prelim injunc which they themselves had brought up to the CA for review,
to stand on. Phoenix and the LRTA engaged in forum-shopping. After the question of whether the writ of prelim injunc should be
annulled or continued had been elevated to the CA for determination, the TC lost jurisdiction or authority to act on
the same matter. By seeking from the TC an order lifting the writ of prelim Injunc, Phoenix and LRTA sought to divest
the CA of its jurisdiction to review the writ. They improperly tried to moot their own petition in the CA — a clear case
16. JOY MART vs. CA of trifling with the proceedings in the appellate court or of disrespect for said court.
Facts: 1978-79 the govt planned the light rail transi system for the commuting public from baclaran to balintawak
monument. The property of joy mart was at carried street, sta. cruz manila where isitann department store is The trial judge played into the hands of Phoenix and the LRTA, and acted with grave abuse of discretion amounting
located and 3 adjoining lands which the president hotel leased by joy mart stands. It was among the properties to excess of jurisdiction in granting their motion to dissolve the writ of injunction. Judicial courtesy behooved the TC
which was to be expropriated. In cooperation, joy mart consented to sell the property and be given the first option to keep its hands off the writ of prelim injunc and defer to the better judgment of the CA the determination of
to redevelop the entire area. LRTA agreed on such. whether the writ should be continued or discontinued.

Later, joy mart constructed 8 storey building amounting to 50million.


The non-issuance of a TRO by the CA upon receipt of the petition in CA-G.R. SP No. 12998 simply meant that the TC
could proceed to hear and decide the main complaint of Joy Mart for specific performance of contract and damages
On Nov 28, 1986 LRTA entered into a commercial stalls Concession contract with Phoenix awarding all the area and
against the LRTA and Phoenix. It did not give the lower court a license to interfere with the appellate court's
commercial spacesand the 15 on-line stations. Joy mart have learned on the said contract and inform LRTA its first
disposition of the writ of preliminary injunction.
option to redevelop. Hence, filed a complaint for specific performace of contract and damages against LRTA and
Phoenix before the RTC manila.
The private respondents' application to the TC for the dissolution of the writ of prelim injunc that was pending
review in the CA was a form of forum shopping which this Court views with extreme disapproval. The lower court's
proceeding being void for lack of jurisdiction, the writ of preliminary injunction should be reinstated, and the petition
9

to annul the writ (CA-G.R. SP No. 12998) should be dismissed on the ground of forum shopping as provided in Rule In order for the injunction bond to become answerable for the above-described damages, the following
No. 17 of the Interim Rules and Guidelines, Rules of Court. Hence, petition Granted. requisites must concur:

1. The application for damages must be filed in the same case where the bond was issued;

2. Such application for damages must be filed before the entry of judgment; and
17. PARAMOUNT INSURANCE CORP. vs. CA
3. After hearing with notice to the surety.
FACTS:
The records of this case reveal that during its pendency in the trial court, DECORP filed its Answer raising
 Mc Adore Finance and Investment, Inc. was the owner and operator of Mc Adore International Palace compulsory counterclaims for rescission of contract, moral damages, exemplary damages, attorney’s fees and
Hotel in Dagupan. litigation expenses. The counterclaims for damages of DECORP were proven at the trial and yet PARAMOUNT did not
 Resp. DECORP was the grantee of a franchise to operate and maintain electric services in the said hotel. exert any effort to controvert the evidence presented by DECORP. Given these circumstances, PARAMOUNT cannot
 Mc Adore & DECORP entered into a contract that DECORP shall provide for the electric power to the hotel. hide under the cloak of non-liability on its injunction bond on the mere expediency that it was deprived of due
 DECORP noticed discrepancies between actual monthly billing and the estimated monthly billing of Mc process. It bears stressing that what the law abhors is not the absence of previous notice but rather the absolute
Adore. Later on it issued a corrected bill but Mc Adore refused to pay. As a result, DECORP disconnected lack of opportunity to ventilate a party’s side.In other words, petitioner cannot successfully invoke denial of due
power supply to the hotel. process where it was given the chance to be heard.
 Mc Adore commenced a suit against DECORP for damages with prayer for a writ of prel. Injunction. Mc
Adore posted injunction bonds from several SURETIES including the Petitioner, which issued an injunction PARAMOUNT was duly notified of the next hearing which was scheduled on April 26, 1985. Evidently, PARAMOUNT
bond of 500k. was well-apprised of the next hearing and it cannot feign lack of notice. Having been given an opportunity to be
heard during the main hearing for the matter of damages, PARAMOUNT therefore, cannot bewail that it was not
 A writ of Prel. Injunction was issued wherein DECORP was ordered to continue supplying electric power to
given an opportunity to be heard upon denial of its motion to cancel its injunction bond.
the hotel.
 TC dismissed the complaint & rendered judgment in favor of DECORP.
 Mc Adore did not appealed the decision. Petitioner appealed to the CA which affirmed TC decision. “Moreover, PARAMOUNT has only itself to blame when it did not make any opposition or objection during the
 Hence this petition. hearing for the reception of DECORP’s evidence. Having manifested its desire to cancel its bond, it should have
asked for a deferment of hearing on DECORP’s evidence but PARAMOUNT did not do anything of this sort. Only
ISSUE: when an adverse judgment was rendered by the trial court against its principal McAdore did it whimper a denial of
WON Paramount was denied due process when the TC found the injunction bond it issued in favor of Mc procedural due process.”
Adore liable to DECORP?
Was there sufficient evidence to establish the liability of the Petitioner on its injunction bond? Contrary to petitioner’s thesis, it is neither mandatory nor fatal that there should be a separate hearing in
order that damages upon the bond can be claimed, ascertained and awarded, as can be gleaned from a cursory
HELD: reading of the provisions of Rule 57, Section 20. This Court agrees with the appellate court’s ruling that:
NEGATIVE. Injunction is an extraordinary remedy calculated to preserve the status quo of things and to
prevent actual or threatened acts violative of the rules of equity and good conscience as would consequently afford “Jurisprudential findings laid down the doctrine that a final adjudication that the applicant is not entitled to the
an injured party a cause of action resulting from the failure of the law to provide for an adequate or complete relief. injunction does not suffice to make the surety liable. It is necessary, in addition, that the surety be accorded due
A preliminary injunction is an order granted at any stage of an action or proceeding prior to the judgment or final process, that is, that it be given an opportunity to be heard on the question of its solidary liability for damages arising
order, requiring a party or a court, agency or a person to refrain from a particular act or acts. It may also require the from a wrongful injunction order. Withal, the fact that the matter of damages was among the issues tried during the
performance of a particular act or acts, in which case it shall be known as a preliminary mandatory injunction. Its hearings on the merits will not render unnecessary or superfluous a summary hearing to determine the extent of a
sole purpose is not to correct a wrong of the past, in the sense of redress for injury already sustained, but to prevent surety’s liability unless of course, the surety had been impleaded as a party, or otherwise earliernotified and given
further injury. opportunity to be present and ventilate its side on the matter during the trial.

A preliminary injunction or temporary restraining order may be granted only when, among others, the
applicant, unless exempted by the court, files with the court where the action or proceeding is pending, a bond “The exception under the doctrinal ruling above noted is extant in the case at bar.”
executed to the party or person enjoined, in an amount to be fixed by the court, to the effect that the applicant will
pay such party or person all damages which he may sustain by reason of the injunction or temporary restraining As stated, PARAMOUNT also argues that assuming it is liable on its injunction bond, its liability should be
order if the court should finally decide that the applicant was not entitled thereto. Upon approval of the requisite limited only to the amount of damages accruing from the time the injunction bond was issued until the
bond, a writ of preliminary injunction shall be issued.At the trial, the amount of damages to be awarded to either termination of the case, and not from the time the suit was commenced. In short, it claims that the injunction
party, upon the bond of the adverse party, shall be claimed, ascertained, and awarded under the same procedure bond is prospective and not retroactive in application.
prescribed in Section 20 of Rule 57.
This Court does not agree. Rule 58, Section 4(b), provides that a bond is executed in favor of the party
10

enjoined to answer for all damages which he may sustain by reason of the injunction. In its decision of October 22, 2004, the CA explained why it annulled and set aside the assailed orders of
the RTC issued on July 20, 2003 and December 29, 2003, and why it altogether dismissed Civil Case No. 03106921, as
Mendoza v. Cruz,where it held that “(t)he injunction bond is intended as a security for damages in case it is follows:
finally decided that the injunction ought not to have been granted. It is designed to cover all damages which the
party enjoined can possibly suffer. Its principal purpose is to protect the enjoined party against loss or damage by a. It is beyond dispute that the crux of the instant case is the propriety of respondent Judge’s
reason of an injunction.” No distinction was made as to when the damages should have been incurred. issuance of a preliminary injunction, or the earlier TRO, for that matter.

However, Rule 58, Section 4(b), clearly provides that the injunction bond is answerable for all damages. “The b. Respondent Judge gravely abused his discretion in entertaining an application for
bond insures with all practicable certainty that the defendant may sustain no ultimate loss in the event that the TRO/preliminary injunction, and worse, in issuing a preliminary injunction through the assailed
injunction could finally be dissolved. Consequently, the bond may obligate the bondsmen to account to the order enjoining petitioners’ sought bidding for its O-ILAW Project. The same is a palpable
defendant in the injunction suit for all: (1) such damages; (2) costs and damages; (3) costs, damages and reasonable violation of RA 8975 which was approved on November 7, 2000, thus, already existing at the time
attorney’s fees as shall be incurred or sustained by the person enjoined in case it is determined that the injunction respondent Judge issued the assailed Orders dated July 20 and December 29, 2003.
was wrongfully issued.”Thus, PARAMOUNT is liable, jointly and severally, for actual damages, moral damages,
exemplary damages, attorney’s fees and costs of the suit, to the extent of the amount of the bond. 2. The said proscription is not entirely new. RA 8975 merely supersedes PD 1818 which earlier
underscored the prohibition to courts from issuing restraining orders or preliminary injunctions in cases
involving infrastructure or National Resources Development projects of, and public utilities operated by,
the government. This law was, in fact, earlier upheld to have such a mandatory nature by the Supreme
Court in an administrative case against a Judge.
18. NERWIN INDUSTRIES CORP. vs. PNOC
WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals; and ORDERS petitioner to pay the
1. In 1999, the National Electrification Administration (“NEA”) published an invitation to pre-qualify and to bid for a
costs of suit.
contract, otherwise known as IPB No. 80, for the supply and delivery of about sixty thousand (60,000) pieces of
woodpoles and twenty thousand (20,000) pieces of crossarms needed in the country’s Rural Electrification Project.
2. Thereafter, the qualified bidders submitted their financial bids where private respondent [Nerwin] emerged as the
RECEIVERSHIP (RULE 59)
lowest bidder for all schedules/components of the contract. NEA then conducted a pre-award inspection of private
respondent’s [Nerwin’s] manufacturing plants and facilities, including its identified supplier in Malaysia, to
19. DESCOLLAR vs. CA
determine its capability to supply and deliver NEA’s requirements.
3. Upon learning of the issuance of Requisition No. FGJ 30904R1 for the O-ILAW Project, Nerwin filed a civil action in
the RTC in Manila, docketed as Civil Case No. 03106921 entitled Nerwin Industries Corporation v. PNOC-Energy
Development Corporation and Ester R. Guerzon, as Chairman, Bids and Awards Committee, alleging that Requisition Assailed in this petition for review on certiorari is the decision dated July 29, 1992 of the CA, affirming the orders
No. FGJ 30904R1 was an attempt to subject a portion of the items covered by IPB No. 80 to another bidding; and dated March 17, 1992 and April 27, 1992 of the trial court in a Civil Case, granting respondent's petition for
praying that a TRO issue to enjoin respondents’ proposed bidding for the wooden poles. receivership and denying petitioner's motion for reconsideration thereof.
4. Respondents sought the dismissal of Civil Case No. 03106921, stating that the complaint averred no cause of
action, violated the rule that government infrastructure projects were not to be subjected to TROs, contravened the August 9, 1991 - respondent Camilo Borromeo, a realtor, filed against petitioner a civil complaint for the recovery of
mandatory prohibition against non-forum shopping, and the corporate president had no authority to sign and file three (3) parcels of land and the house built thereon in the possession of the petitioner and registered in her name
the complaint. under Transfer Certificates of Title Nos. 24790, 24791 and 24792 of the Registry of Deeds for the City of Mandaue.
5. Thence, respondents commenced in the Court of Appeals (CA) a special civil action for certiorari (CA-GR SP No.
83144), alleging that the RTC had thereby committed grave abuse of discretion amounting to lack or excess of Borromeo alleged in his complaint that he purchased the property on July 11, 1991 from Wilhelm Jambrich, an
jurisdiction in holding that Nerwin had been entitled to the issuance of the writ of preliminary injunction despite the Austrian national and former lover of the petitioner for many years until he deserted her in 1991 for the favors of
express prohibition from the law and from the Supreme Court; in issuing the TRO in blatant violation of the Rules of another woman.
Court and established jurisprudence; in declaring respondents in default; and in disqualifying respondents’ counsel
from representing them.
Issues/s Based on the deed of sale which the Austrian made in his favor, Borromeo filed an action to recover the ownership
1. Whether or not the CA erred in dismissing the case on the basis of Rep. Act 8975 prohibiting the issuance of and possession of the house and lots from Descallar and asked for the issuance of new transfer certificates of title in
temporary restraining orders and preliminary injunctions, except if issued by the Supreme Court, on government his name.
projects.
Ruling Descallar’s answer to the Complaint: alleged that the property belongs to her as the registered owner thereof; that
1. The petition fails. Borromeo's vendor, Wilhelm Jambrich, is an Austrian, hence, not qualified to acquire or own real property in the
Philippines. He has no title, right or interest whatsoever in the property which he may transfer to Borromeo. prcd
11

March 5, 1992 - Borromeo asked the trial court to appoint a receiver for the property during the pendency of the Only when the property is in danger of being materially injured or lost, as by the prospective foreclosure of a
case. mortgage thereon for non-payment of the mortgage loans despite the considerable income derived from the
property, or if portions thereof are being occupied by third persons claiming adverse title thereto, may the
Despite the petitioner's opposition, Judge Mercedes Golo-Dadole granted the application for receivership and appointment of a receiver be justified (Motoomul vs. Arrieta, 8 SCRA 172). LLphil
appointed her clerk of court as receiver with a bond of P250,000.00.
In this case, there is no showing that grave or irremediable damage may result to respondent Borromeo unless a
Petitioner filed a motion for reconsideration but it was denied. So Petitioner sought relief in the CA by a petition for receiver is appointed. The property in question is real property, hence, it is neither perishable or consummable. Even
certiorari but it was also dismissed by the CA. Petitioner then appealed the Appellate Court's decision to the SC by a though it is mortgaged to a third person, there is no evidence that payment of the mortgage obligation is being
petition for certiorari under Rule 45 of the Rules of Court. neglected. In any event, the private respondent's rights and interests, may be adequately protected during the
pendency of the case by causing his adverse claim to be annotated on the petitioner's certificates of title.
ISSUE:
Another flaw in the order of receivership is that the person whom the trial judge appointed as receiver is her own
clerk of court. This practice has been frowned upon by this Court.The respondent judge committed grave abuse of
Whether the trial court gravely abused its discretion in appointing a receiver for real property registered in the name
discretion in connection with the appointment of a receiver .We hold that the respondent judge has acted in excess
of the petitioner in order to transfer its possession from the petitioner to the court-appointed receiver? YES!
of his jurisdiction when he issued the order above adverted to. That order, in effect, made the clerk of court a sort of
a receiver charged with the duty of receiving the proceeds of sale and the harvest of every year during the pendency
HELD: of the case with the disadvantage that the clerk of court has not filed any bond to guarantee the faithful discharge of
his duties as depositary; and considering that in actions involving title to real property, the appointment of a
The SC is amazed that the trial court and the Court of Appeals appear to have given no importance to the fact that receiver cannot be entertained because its effect would be to take the property out of the possession of the
the petitioner herein, besides being the actual possessor of the disputed property, is also the registered owner defendant, except in extreme cases when there is clear proof of its necessity to save the plaintiff from grave and
thereof, as evidenced by TCTs Nos. 24790, 24791, and 24792 issued in her name by the Register of Deeds of irremediable loss or damage, it is evident that the action of the respondent judge is unwarranted and unfair to the
Mandaue City on December 3, 1987. Her title and possession cannot be defeated by mere verbal allegations that defendants.
although she appears in the deed of sale as vendee of the property, it was her Austrian lover, Jambrich, who paid the
price of the sale of the property. Her Torrens certificates of title are indefeasible or incontrovertible.
During the pendency of this appeal, Judge Dadole rendered a decision in Civil Case No. MAN-1148 upholding
Borromeo's claim to Descallar's property, annulling the latter's TCTs Nos. 24790, 24791 and 24792 and ordering the
Even if it were true that an impecunious former waitress, like Descallar, did not have the means to purchase the Register of Deeds of Mandaue City to issue new ones in the name of Borromeo. This circumstance does not
property, and that it was her Austrian lover who provided her with the money to pay for it, that circumstance did not retroactively validate the receivership until the decision (presumably now pending appeal) shall have attained finality.
make her any less the owner, since the sale was made to her, not to the open-handed alien who was, and still is,
disqualified under our laws to own real property in this country. The deed of sale was duly registered in the Registry
SC Ruling:
of Deeds and new titles were issued in her name. The source of the purchase money is immaterial for there is no
allegation, nor proof, that she bought the property as trustee or dummy for the monied Austrian, and not for her
own benefit and enjoyment.  finding grave abuse of discretion in the order of receivership which the respondent Court of Appeals affirmed in
its decision
 the petition for certiorari is hereby GRANTED
***There is no law which declares null and void a sale where the vendee to whom the title of the thing sold is
 the decision of the appellate court, as well as the order dated March 17, 1992 of the RTC of Mandaue City in
transferred or conveyed, paid the price with money obtained from a third person. If that were so, a bank would be
the Civil Case are hereby ANNULLED and SET ASIDE.
the owner of whatever is purchased with funds borrowed from it by the vendee. The holding of the trial court and
the Court of Appeals that Jambrich, notwithstanding his legal incapacity to acquire real property in the Philippines, is
the owner of the house and lot which his erstwhile mistress, Antonietta, purchased with money she obtained from
him, is a legal heresy.

In view of the above circumstances, The Court found that, the order of receivership is tainted with grave abuse of
discretion. The appointment of a receiver is not proper where the rights of the parties (one of whom is in possession
of the property), are still to be determined by the trial court.

"Relief by way of receivership is equitable in nature, and a court of equity will not ordinarily
appoint a receiver where the rights of the parties depend on the determination of adverse
claims of legal title to real property and one party is in possession." (Calo, et al. vs. Roldan, 76
Phil. 445).
12

REPLEVIN (RULE 60)  In violation of said Rule, respondent immediately turned over the seized articles to PDCP. His claim that the
Office of the Regional Sheriff did not have a place to store the seized items, cannot justify his violation of
20. SEBASTIAN vs. VALINO the Rule. As aptly noted by the Investigating Judge, the articles could have been deposited in a bonded
warehouse.
REYNALDO SEBASTIAN vs. SHERIFF ALBERTO A. VALINO  Respondent must serve on Marblecraft not only a copy of the order of seizure but also a copy of the
application, affidavit and bond (Sec. 4, Rule 60, Revised Rules of Court). Respondent did not furnish
QUIASON, J.: defendant with a copy of the application, affidavit and bond. By his own admission, he only served it with a
copy of the order of seizure.
 A complaint for gross abuse of authority committed in connection with the implementation of the writ  The sheriff’s refusal to implement the order of the RTC Makati for him to return to complainant the articles
issued by the RTC, Makati, Metro Manila, in Civil Case No. 89-3368 and refusal to enforce the trial court's seized pursuant to the writ of seizure dated March 30, 1990 was a serious infraction committed by him.
for the return of the seized items was filed by Marblecraft, Inc., against Alberto A. Valino, Senior Deputy  The only action taken by respondent to implement the Order dated December 11, 1990 was to write a
Sheriff, Office of the Regional Sheriff, Pasig, Metro Manila letter on December 12, 1990, addressed to the counsel of PDCP, requesting the turnover of seized articles.
 The Complainant alleges that on March 3, 1989, Private Devt Corp. of the Phil. (PDCP) filed a replevin suit As expected, PDCP's counsel refused to part with the possession of the seized articles and to issue a letter
against Marblecraft, Inc., in order to foreclose the chattels mortgaged by Marblecraft. of authorization to withdraw the same from the warehouse. Instead of taking possession of the articles,
 A writ of seizure directed against Marblecraft covering the chattels sought to be replevined was issued by respondent merely reported to the RTC that “it is now clear that the undersigned cannot implement the
the RTC Makati. Court order dated December 11, 1990 by reason of the refusal of PDCP to accept or to honor said Court
 The enforcement of the writ of seizure was delayed because of the writ of preliminary injunction enjoining order".
PDCP from proceeding with the foreclosure sale issued by the RTC Pasig in Civil Case No. 58006. It was only
on October 31,1990, when the RTC Pasig, dissolved the writ of preliminary injunction.
 On November 9, 1990, respondent, accompanied by several policemen and PDCP employees, went to the
office of Marblecraft at Barrio Santolan, Pasig, to implement the writ of seizure. Respondent and his 21. LA TODENA vs CA
companions forcibly opened the lockers and desk drawers of the employees of complainant and took their
personal belongings, as well as some office equipment issued to them. The employees filed with the Office La Tondeña Distillers, Inc. (La Tondena) manufactures and sells a gin popularly known as "Ginebra San Miguel,"
of the Provincial Prosecutor of Rizal two criminal complaints for robbery against respondent and his which is contained in 350 c.c. white flint bottles with the marks of ownership "LA TONDEÑA, INC." and "GINEBRA
companions. SAN MIGUEL" stamped or blown-in to the bottles which . . . (it [La Tondeña]) specially ordered from the bottle
 Respondent only showed to complainant's counsel a copy of the writ but did not furnish him with a copy of manufactures for its exclusive use. The bottles were registered with the Philippine Patent Office and use of the
the application for the writ, the supporting affidavit and the bond. registered bottles by any one without written permission of the owner is declared unlawful by Section 2 of R.A. 623.
 In the course of the implementation of the writ, several pieces of machinery and equipment were It was likewise alleged that the sale of the gin in the registered white flint, bottles does not include the sale of the
destroyed or taken away by respondent. bottles themselves. By virtue of these facts, La Tondena prayed to the Regional Trial Court of Manila to 1) “issue an
 The seized articles were turned over to PCDP’s counsel and the items were stored in PDCP's warehouse in order directing the, Sheriff or other proper officer . . . to take into his custody all the 350 c.c. bottles of the plaintiff in
Taguig. the possession of the defendant . . . and to dispose of the same in accordance with the rules of court”, 2) to be
 Complainant posted a counter bond. RTC of Makati approved the bond and directed the immediate return adjudged the lawful owner possessor of the said bottles, and 3) for private respondent Tee Chin Ho to be made to
of the seized items. PDCP's motion to set aside was denied and the TC reiterated its directive for the return pay, actual, nominal and temperate and exemplary damages in specific stated amounts (aggregating P75,400.00), as
of the seized items. Respondent did not implement the orders. MR denied. well as attorney's fees in the amount of P50,000.00.
 Respondent-case was pure harassment after he had refused to defer the implementation of the writ of
seizure. He said that if he did not implement the writ, he would have been accused by PDCP of non- Judge Santillan of the Manila RTC issued the writ of delivery prayed for upon La Tondeña's posting of a bond in the
performance of his duties as a sheriff. He pointed out that the criminal complaints for theft filed against amount of P40,000.00. In implementation of the writ, Deputy Sheriff RegioRuefa seized 20,250 bottles with the
him by the employees of complainant were dismissed by the Provincial Prosecutor of Rizal. blown-in marks, "La Tondeña Inc." and "Ginebra San Miguel". The sheriff Mr. Ruefa executed a handwritten
 Admin. Complaint (J. Villarama, RTC Pasig) found respondent guilty of partiality when he immediately "Receipt" and among others, was signed by Tee Chin Ho as witness. Sheriff Ruefa's return attests that prior to seizing
turned over the seized items to PDCP, and of willful refusal to enforce the November 14, 26 and December the bottles, he served summons, copy of the complaint and its annexes, copy of the bond, and the writ of seizure
11, 1990 Orders of the RTC Makati. personally on one “Te Tien Ho” (it was La Tondena’s position the Te Tien Ho and Tee Chin Ho were one and the same
ISSUE: person). The five-day period within which the sufficiency of the replevin bond might be objected to or the return of
WON the property seized under a writ of replevin is required to be immediately delivered to the plaintiff. the property seized expired without any person objecting to the bond or seeking the return of the bottles, instead an
individual identifying himself as "Tee Chin Ho" filed on a pleading denominated "ANSWER” alleging 1) all purchases
HELD: of La Tondeña's gin necessarily included the bottles containing the gin; hence ownership of the bottles did not
 Under the Revised Rules of Court, the property seized under a writ of replevin is not to be delivered remain in La Tondeña but was transferred to the purchasers; 2) it was from him, Tee Chin Ho, and not from Te Tien
immediately to the plaintiff. The sheriff must retain it in his custody for five days and shall return it to the Ho, that the bottles in question had been taken by Sheriff Ruefa, and it was taken from a different numbered
defendant, if the latter, as in the case, requires its return and files a counterbond (Sec. 4, Rule 60, Revised address on the same street (1105 instead of 1005 Estrada Street, Manila); 3) La Tondeña had "masterminded and
Rules of Court). caused two instances of seizure against intervenor, first through and by the Manila City, police, and second through
the Court's sheriff.
13

In other words, the law does not allow the defendant to file a motion to dissolve or discharge the writ of seizure (or
The sheriff delivered the bottles to La Tondena, however, a TRO was issued to maintain the status quo and prevent delivery) — on the ground of insufficiency of the complaint or of the grounds relied upon therefor, as in proceedings
La Tondena from seizing bottles at 1105 Estrada St. La Tondena reiterated its position that Te Tien Ho and Tee Chin on preliminary attachment or injunction and thereby put at issue the matter of the title or right, of possession over
Ho were one and the same person. Judge Santillan ruled in favor of Tee Chin Ho, issuing writs of preliminary the specific chattel being replevied, the policy apparently being that said matter should be ventilated and
mandatory injunction and preliminary prohibitory injunction, stating “that the seizure authorized by the Court's writ determined only at the trial on the merits.
of replevin is only against the person whose name and address is pleaded in the complaint namely TE TIEN HO at No.
1005 Estrada St., Singalong, Manila; the two truckloads empty bottles seized by the Manila Police (Exhibit "4") and by On the other hand, a stranger to the action, i.e., a person not a party to the action, or as the law puts it, "any other
the Sheriff of Manila (Exhibit "5") from intervenor Tee Chin Ho, is improper and unlawful” and “ordering plaintiff La person than the defendant or his agent," whose property is seized pursuant to the writ of delivery, is accorded the
Tondeña Distillers, Inc., its agents, duly authorized representatives or other persons acting for and in its behalf to remedy known as terceria, a third party claim, to wit:
return and restore unto intervenor Tee Chin Ho at his address at 1105 Estrada St…” La Tondena raised the case to
the Court of Appeals via a petition for Certiorari, Prohibition and Mandamus but was dismissed for not being the SEC. 7. Third-party claim. — If the property taken be claimed by any other person then the
proper subject of a petition for CPM. defendant or his agent, and such person makes an affidavit of his title thereto or right to
the possession thereof, stating the grounds of such right or title, and serves the same
ISSUE (in relation to Replevin): upon the officer while he has possession of the property, and a copy thereof upon the
Whether or not Judge Santillan violated a rule on Replevin that the disposition of a property seized under a replevin plaintiff, unless the plaintiff or his agent, on demand of the officer, indemnifies him
order upon the defendant shall be done only within 5 days from date of seizure? against such claim by a bond in a sum not greater than the value of the property, and in
case disagreement as to such value the same shall be decided by the court issuing the
RULING order. The officer is not liable for damages for taking or keeping of such property, to any
YES. A defendant or other party in a replevin proceeding against whom a writ of seizure has the following alternative other person than the defendant or his agent, unless such claim is so made and the action
remedies set forth in Section 5, Rule 60 of the Rules of Court, viz.: upon the bond brought within one hundred and twenty (120) days from the date of filing
SEC. 5. Return, of property. — If the defendant objects to the sufficiency of the plaintiff's of the said bond. But nothing herein contained shall prevent such third person from
bond, or of the surety or sureties thereon, he cannot require the return of the property as vindicating his claim to the property by any proper action. However, when the plaintiff, or
in this section provided; but if he does not so object may, at any time before the delivery the person in whose behalf the order of delivery was issued, is the Republic of the
of the property to the plaintiff require the return thereof, by filing with the clerk or judge Philippines, or any officer duly representing it, the filing of bond shall not be required, and
of the court a bond executed to the plaintiff in double the value of the property as stated in case the sheriff or the officer executing the order is sued for damages as a result of such
in the plaintiff affidavit, for the delivery of the property to the plaintiff, if such delivery be execution, he shall be represented by the Solicitor General, and if held liable therefor, the
adjudged, for the payment of such sum to him as may be recovered against the defendant, actual damages adjudged by the court shall be paid by the National Treasurer out of the
and by serving a copy of such bond on the plaintiff or his attorney. funds to be appropriated for the purpose.

The defendant may avail of these alternative options only within five (5) days after the taking of the property by the The remedy is identical to that granted to strangers in a proceeding on preliminary attachment or execution of
officer. This was made plain albeit impliedly by Section 6 of the same Rule, providing as follows: judgments.

SEC. 6 Disposition of property by officer. — If within five (5) days after the taking of the In lieu of, or in addition to the filing of a terceria, the third party may, as Section 7 points out, vindicate "his claim to
property by the officer, the defendant does not object to the sufficiency of the bond, or of the property by any proper action." This effort at vindication may take the form of a separate action for recovery of
the surety or sureties thereon, or require the return of the property as provided in the last the property, or intervention in the replevin action itself.
preceding section; or if the defendant so objects, and the plaintiff's first or new bond is
approved; or if the defendant so requires, and his bond is objected to and found It was thus imperative for the Trial Judge, before ultimately resolving the motion for leave to intervene as party
insufficient and he does not forthwith file an approved bond, the property shall be defendant of the person identifying himself as "Tee Chin Ho," to determine the precise status of said "Tee Chin Ho:"
delivered to the plaintiff. If for any reason, the property is not delivered to the plaintiff, whether he was indeed a stranger to the action, as he claims, and could therefore avail of the remedy of
the officer must return it to the defendant. intervention as a party defendant, or he was in truth a proper party defendant, who had been mistakenly and
inadvertently referred to as "Te Tien Ho", and who therefore only had the alternative remedies aforementioned of
Thus if a defendant in a replevin action wishes to have the property taken by the sheriff restored to him, he should either (a) objecting to the replevin bond or the surety or sureties thereof or (b) posting a counter-bond to compel
within five days from such taking, (1) post a counter-bond in double the value of said property, and (2) serve plaintiff return of the property.
with a copy thereof both requirements — as well as compliance therewith within the five-day period mentioned —
being mandatory. There were thus circumstances of record, of which Her Honor was charged with knowledge, that tended to show
that La Tondeña's proffered thesis was not entirely far-fetched: that the real target of its replevin suit was a junk
Alternatively, "the defendant may object to the sufficiency of the plaintiff's bond, or of the surety or sureties dealer at Estrada Street, Singalong, Manila, who was in unlawful possession of a large number of its empty bottles,
thereon;" but if he does so, "he cannot require the return of the property" by posting a counter-bond pursuant to whose name and address had been mistakenly stated in the original complaint but could nonetheless be ascertained.
Sections 5 and 6. At the very least, therefore, it was a matter of preferential priority for the Judge to determine whether "Tee Chin
Ho" is in fact "Te Tien Ho," and thus enable her to know in turn, whether or not the remedy of intervention was
14

proper in the premises, instead of that provided in Section 5 of Rule 60, supra. In other words, unless there were a likewise raised the issue as to when the decision became final and executory. Moreover, the surety
prior determination by Her Honor of whether or not "Tee Chin Ho" was a proper party defendant or a stranger to the company avers that the defendant failed to prove any damage by reason of the insurance of replevin
action, she was in no position to adjudge that this intervention as party defendant was correct. But this is what bond.
respondent Judge did. Without first making that prior determination, she proceeded to pass upon the motion for ◦ Sec. 20 of Rule 57, in relation to Sec. 10 of Rule 60, provides that the party against whom the bond
intervention; she just simply assumed and declared that Tee Chin Ho was not Te Tien Ho. She thus appears to have was issued may recover on the bond for any damage resulting from the issuance of the bond upon
acted without foundation, rashly, whimsically, oppressively. application and hearing. The application must be filed either: before trial; before appeal is perfected;
before judgment becomes final and executory.
◦ Being the prevailing party, it is undeniable that the defendant is entitled to recover against the bond.
22. STRONGHOLD vs. CA The application for that propose was made before the decision became final and before the appeal
was perfected. Both the prevailing and losing parties may appeal the decision. In the case of the
RATIO DECIDENDI: The party against whom the bond was issued may recover on the bond for any damage resulting plaintiff appears that its counsel did not claim the decision which was sent by registered mail on June
from the issuance of the bond upon application and hearing. 20, 1986 and filed the motion for execution against the bond on July 3, 1986. Hence, with respect to
the defendant the motion against the bond was filed before any appeal was instituted and definitely
FACTS: on or before the judgment became final.
Petitioner: Stronghold Insurance ◦ Although the claim against the bond was denominated as a motion for issuance of a writ of execution,
Respondent: Court of Appeals, Northern Motors, Inc. the allegations are to the effect that the defendant is applying for damages against the bond. In fact,
the defendant invokes Sec. 10, Rule 60, in relation to Sec. 20, Rule 57, Rules of Court. Evidently,
 Leisure Club, Inc. filed civil case against Northern Motors Inc. for replevin and damages. It sought the therefore, the defendant is in reality claiming damages against the bond.
recovery of certain office furnitures and equipments. ◦ It is undisputed that the replevin bond was obtained by the plaintiff to answer for whatever damages
◦ The lower court ordered the delivery of subject properties to Leisure Club Inc. subject to the posting the defendant may suffer for the wrongful issuance of the writ. By virtue of the writ, the plaintiff took
of the requisite bond under Section 2, Rule 60 of the Rules of Court. Accordingly, Leisure Club Inc. possession of the auctioned properties. Despite a redelivery bond issued by the defendant, the
posted a replevin bond issued by Stronghold Insurance Co., Inc. In due course, the lower court issued plaintiff refused to return the properties and in the fact repossessed the same. Clearly, defendant
the writ of replevin, thereby enabling Leisure Club Inc. to take possession of the disputed properties. suffered damages by reason of the wrongful replevin, in that it has been deprived of the properties
 Northern Motors Inc. filed a counterbond for the release of the disputed properties. However, efforts to upon which it was entitled to enforce its claim. Moreover, the extent of the damages has been
recover these properties proved futile as Leisure Club Inc. was never heard of again. qualified in the decision dated June 9, 1986.
 For failure to appear in the pre-trial of the case, Leisure Club, Inc. was declared non-suited. Northern  CA affirmed the Order. Hence, this petition.
Motors Inc. presented its evidence ex-parte and the lower court rendered its decision in favor of Northern
Motors Inc. ISSUE: WON Northern Motors is entitled for damages against the surety
 Northern Motors Inc. filed a "Motion for Issuance of Writ of Execution Against Bond of Plaintiff's Surety"
which was treated by the lower court as an application for damages against the replevin bond. HELD :
 At the hearing of the said motion as well as the opposition thereto filed by Stronghold Insurance Co., Inc.,  In the case of Visayan Surety & Insurance Corp. vs. Pascual, the Court explained the nature of the
Northern Motors Inc. presented one witness in the person of its former manager Clarissa G. Ocampo, proceedings to recover damages against a surety, in this wise:
whose testimony proved that: ◦ In such case, upon application of the prevailing party, the court must order the surety to show cause
◦ (a) Northern Motors Inc., and Macronics Marketing entered into a leased agreement wherein the why the bond should not respond for the judgment of damages. If the surety should contest the
latter leased certain premises from the former. reality or reasonableness of the damages claimed by the prevailing party, the court must set the
◦ (b) Macronics failed to pay its bills to Northern Motors Inc., so the latter was forced to terminate the application and answer for hearing. The hearing will be summary and will be limited to such new
lease. defense, not previously set up by the principal, as the surety may allege and offer to prove.
◦ (c) Because of Macronics' unpaid liabilities to Northern Motors Inc., the latter was forced to sell off  Stronghold Insurance Co., Inc., never denied that it issued a replevin bond. Under the terms of the said
the former's properties in an auction sale wherein Northern Motors Inc. was the buyer. Macronics bond, Stronghold Insurance together with Leisure Club Inc. solidarily bound themselves in the sum of
was duly notified of the sale. P42,000 —
◦ (d) These properties sold were the sole means available by which Northern Motors Inc. could enforce ◦ (a) for the prosecution of the action,
its claim against Macronics. ◦ (b) for the return of the property to the defendant if the return thereof be adjudged, and
 Stronghold Insurance Co., Inc. did not cross-examine the said witness. Instead it asked for continuance in ◦ (c) for the payment of such sum as may in the cause be recovered against the plaintiff and the costs of
order to present its own witness. Stronghold, however, never presented any witness. the action.
 The lower court issued its now disputed Order finding Stronghold liable under its surety bond for the  In the case at bar, all the necessary conditions for proceeding against the bond are present, to wit:
damages awarded to Northern Motors Inc. ◦ (i) the plaintiff a quo, in bad faith, failed to prosecute the action, and after relieving the property, it
◦ The thrust of the opposition of the bonding company is to the effect that the motion for a writ of promptly disappeared;
execution is not the proper remedy but an application against the bond should have been the remedy ◦ (ii) the subject property disappeared with the plaintiff, despite a court order for their return; and
pursued. The surety company contends that it is not a party to the case and that the decision clearly ◦ (iii) a reasonable sum was adjudged to be due to respondent, by way of actual and exemplary
became final and executory and, therefore, is no longer liable on the bond. The surety company damages, attorney's fees and costs of suit.
15

 On the propriety of the award for damages and attorney's fees, suffice it to state, that as correctly ISSUES:
observed by the Court of Appeals, the record shows that the same is supported by sufficient evidence.
Northern Motors proved the damages it suffered thru evidence presented in the hearing of the case itself (1) Whether or not the remedy of replevin was proper notwithstanding that the personal property (Isuzu
and in the hearing of its motion for execution against the replevin bond. No evidence to the contrary was dump truck) was seized pursuant to a valid search warrant?
presented by Stronghold Insurance Co., Inc. in its behalf. It did not impugn said award of exemplary (2) Whether or not the remedy of replevin was proper notwithstanding the provisional dismissal of the
damages and attorney's fees despite having every opportunity to do so. criminal case?
 As correctly held by respondent Court of Appeals ––
◦ Stronghold Insurance, Inc. has no ground to assail the awards against it in the disputed Order. Unless
RULING:
it has a new defense, it cannot simplistically dissociate itself from Leisure Club, Inc. and disclaim
liability vis-a-vis the findings made in the Decision of the lower court dated June 9, 1986. Under
Section 2, Rule 60 the bond it filed is to ensure "the return of the property to the defendant if the (1) No, replevin was not proper. The subject property was placed under custodia legis.
return thereof be adjudged, and for the payment to the defendant of such sum as he may recover
from the plaintiff in the action." The bond itself ensures, inter alia, "the payment of such sum as may Replevin will not lie for property in custodia legis. A thing is in custodia legis when it is shown that it
in the cause be recovered against the plaintiff and the cost of the action." (pp. 24-25, Rollo) has been and is subjected to the official custody of a judicial executive officer in pursuance of his execution
◦ Beside, Leisure Club Inc.'s act of filing a replevin suit without the intention of prosecuting the same of a legal writ . The reason posited for this principle is that if it was otherwise, there would be interference
but for the mere purpose of disappearing with the provisionally recovered property in order to evade with the possession before the function of the law had been performed as to the process under which the
lawfully contracted obligations constitutes a wanton, fraudulent, reckless, oppressive and malevolent property was taken. Thus, a defendant in an execution or attachment cannot replevy goods in the
breach of contract which justifies award of exemplary damages under Art. 2232 of the Civil Code. possession of an officer under a valid process, although after the levy is discharged, an action to recover
possession will lie.

23. CHUA vs. CA (2) No, replevin was not proper since the criminal case, having been provisionally dismissed, a probability
exists that the seizure will be followed by the filing of a criminal action.
FACTS:
RULES set by the court:
 Judge Lauro V. Francisco of the RTC Cebu City (Branch XIII), after examining 2Lt. Dennis P. Canoy and two
(2) other witnesses, issued a search warrant directing the immediate search of the premises of R.R. a. Where personal property is seized under a search warrant and there is reason to believe that the
Construction and the seizure of an Isuzu dump truck with plate number GAP-175. At twelve noon of the seizure will not anymore be followed by the filing of a criminal case, the proper remedy is the filing of
same date, respondent Canoy seized the aforesaid vehicle and took custody thereof. an action for replevin, and if there are conflicting claims over the seized property, an interpleader may
 A civil action for Replevin/Sum of Money for the recovery of possession of the same Isuzu dump truck was be filed in proper court, not necessarily the same one which issued the search warrant;
filed by petitioner against respondent Canoy and one "John Doe" in the RTC Cebu (Branch VIII) presided by b. Where there is still a probability that the seizure will be followed by the filing of a criminal action, or
Judge Leonardo B. Cañares alleging among other things, petitioner's lawful ownership and possession of the criminal information has actually been commenced, or filed, and actually prosecuted, and there
the subject vehicle; that he has not sold the subject vehicle to anyone; that he has not stolen nor are conflicting claims over the property seized, the proper remedy is to question the validity of the
carnapped it, and that he has never been charged of the crime of carnapping or any other crime for that search warrant in the same court which issued it and not in any other branch of the said court.
matter.
 Further, petitioner questioned the validity of the search warrant and the subsequent seizure of the subject
In the case at bar, RTC Cebu Branch VIII erred when it ordered the transfer of possession of the
vehicle on the strength of the aforesaid search warrant.
property seized to petitioner when the latter filed the action for replevin. It should have dismissed the case
 On the same date, Judge Cañares directed the issuance of a writ of replevin upon the posting of a bond in since by virtue of the "provisional dismissal” of the carnapping case there is still a probability that a
the amount of one hundred thousand pesos (P100,000.00). The writ of replevin was also issued on the criminal case would be filed, hence a conflict in jurisdiction could still arise.
same date, and the subject vehicle was seized by Deputy Sheriff
 Respondent Canoy filed a motion for the dismissal of the complaint and for the quashal of the writ of
replevin, which the court denied. Motion for Recon also denied.
 Private respondents filed with the Court of Appeals a Petition for Certiorari and Prohibition praying for the
24. CITIBANK vs. CA
nullification of the foregoing orders.
In consideration of a loan obtained from Citibank, N.A., Anama executed a promissory note to pay the same and
 Meanwhile, a case for Carnapping entitled "Alex De Leon, Complainant, vs. Romeo Chua, Respondent"
constituted a Chattel Mortgage in favor of the Bank, on his various machineries and equipment. Later, for failure of
pending preliminary investigation was provisionally dismissed upon motion of Romeo Chua with the
Anama to pay the promissory note despite demand, the Bank filed a complaint for the collection of the unpaid
following reservation: "without prejudice to its reopening once the issue of ownership is resolved",
balance, for the delivery and possession of the chattels preparatory to the foreclosure thereof. An Order of Replevin
 CA reversed the RTC decision, and nullified the questioned orders. The appellate court ordered the
over the properties covered by the Chattel Mortgage was issued but the same was not immediately implemented in
dismissal of the Replevin action, and directed that possession of the subject vehicle be restored to Canoy.
view of an amicable settlement then being worked out. But when the same failed, the lower court proceeded to try
 Thus, petitioner filed this appeal by certiorari.
16

the case on the merits. The Bank filed a Motion for the Issuance of an Alias Writ of Seizure, and the same was SC: The Supreme Court granted the petition. The Court ruled that the issuance of the confiscation order by petitioner
granted Secretary was a valid exercise of his power under Section 68-A of P.D. No. 705. By virtue of said order, the narra
despite opposition by Anama. Thereafter, the Bank took possession of the mortgaged chattels and they were lumber and the six-wheeler truck were held in custodial legis and, hence, beyond the reach of replevin. According to
advertised for public auction. Anama then went to the Court of Appeals, which ruled, among others, that there was the Court, when a thing is in official custody of a judicial or executive officer in pursuance of his execution of a legal
no Affidavit of Merit accompanying the Complaint for Replevin and the bond posted by Citibank was insufficient. writ, replevin will not lie to recover it. Otherwise, there would be interference with the possession before the
Hcnce, this petition for certiorari. function of law had been performed to the
process under which the property was taken.
SC: There is substantial compliance with the rule requiring an affidavit of merit to support the complaint for replevin
if the complaint itself contains a statement of every fact required to be stated in the affidavit of merit and the
complaint is verified like an affidavit. Here, the Bank's complaint did not allege all the facts that should be set forth in
an affidavit of merit. At any rate, the defense of lack of affidavit of merit was interposed only in the Reply to the 26. ADVENT CAPITAL & FINANCE CORP. vs. YOUNG
Comment of the Bank on the Petition for Certiorari which Anama filed with the Court of Appeals. Procedurally
therefore, such defense was no longer available for failure to plead the same in the Answer as required by the FACTS:
omnibus motion rule. The Bank also questioned the finding of the Court of Appeals that the bond posted was The present controversy stemmed from a replevin suit instituted by petitioner Advent Capital and Finance
insufficient. What was posted was merely an amount which was double the probable value as declared by the Bank Corporation (Advent) against respondent Roland Young (Young) to recover the possession of a 1996 Mercedes Benz
and, therefore, inadequate should there be a finding that the actual value is actually greater. Since the valuation has which is registered in Advents name.
been disputed, actual value of the properties should have been determined first by the lower court. Prior to the replevin case, or on 16 July 2001, Advent filed for corporate rehabilitation with the Regional Trial Court
of Makati City(rehabilitation court).
25. FACTORAN vs. CA On 27 August 2001, the rehabilitation court issued an Order (stay order) which states that the enforcement of all
claims whether for money or otherwise, and whether such enforcement is by court action or otherwise, against the
Private respondent's six-wheeler truck was apprehended by police officers of the Marikina Police Station carrying petitioner (Advent), its guarantors and sureties not solidarily liable with it, is stayed.
4,000 board feet of narra lumber. The truck driver, private respondent Jesus Sy, were brought to the Personnel On 5 November 2001, Young filed his Comment to the Petition for Rehabilitation, claiming, among others, several
Investigation Committee/Special Actions and Investigation Division (PIC/SAID) of the Department of Environment employee benefits allegedly due him as Advents former president and chief executive officer.
and Natural Resources (DENR) in Quezon City. The PIC/SAID found after an investigation that private respondents On 6 November 2002, the rehabilitation court approved the rehabilitation plan submitted by Advent. Included in the
violated Bureau of Forestry and Development Circular No. 10 and P.D. No. 705, otherwise known as the Revised inventory of Advents assets was the subject car which remained in Youngs possession at the time.
Forestry Code. Petitioner Fulgencio S. Factoran, then Secretary of the DENR, issued an order for the confiscation of Youngs obstinate refusal to return the subject car, after repeated demands, prompted Advent to file
the narra lumber and the truck. Private respondents neither asked for reconsideration of nor appealed, the said the replevin case on 8 July 2003.
order to the Office of the President. Consequently, the confiscated narra lumber and sixwheeler truck were forfeited After Advents posting of P3,000,000 replevin bond, which was double the value of the subject car at the time,
in favor of the government. They were subsequently advertised to be sold at public auction on March 20, 1989. On through Stronghold Insurance Company, Incorporated (Stronghold), the trial court issued a Writ of Seizure directing
March 17, 1989 private respondents filed a complaint with the Regional Trial Court of Quezon City with prayer for the Sheriff to seize the subject car from Young. Upon receipt of the Writ of Seizure, Young turned over the car to
the issuance of writs of replevin and preliminary injunction and/or temporary restraining Advent,which delivered the same to the rehabilitation receiver.
order for the recovery of the confiscated lumber and truck and to enjoin the planned auctioned sale of the subject Thereafter, Young filed an Answer alleging that as a former employee of Advent, he had the option to purchase the
narra lumber, respectively. The trial court issued an order directing petitioners to desist from proceeding with the subject car at book value pursuant to the company car plan and to offset the value of the car with the proceeds of
planned auction sale. On March 20, 1989, the scheduled date of the auction sale, private respondents filed an Ex his retirement pay and stock option plan. Young sought the (1) execution of a deed of sale over the subject car; and
parte Motion for Release and Return of Goods and Documents (Replevin). The trial court granted the writ of (2) determination and payment of the net amount due him as retirement benefits under the stock option plan.
replevin. Thereafter, the trial court issued a writ of seizure. However, petitioners refused to comply therewith. On Advent filed a Reply with a motion to dismiss Youngs counterclaim, alleging that the counterclaim did not arise
the same day, petitioners filed a Manifestation stating their intention to file their counterbond under Rule 60 of the from or has no logical relationship with the issue of ownership of the subject car.
Rules of Court to stay the execution of the writ of seizure and to post a cash bond in the amount of P180,000.00, but On 28 April 2005, the trial court issued an Order dismissing the replevin case without prejudice for Advents failure to
it was refused. On March 27, 1989, private respondents filed a motion to declare petitioners in contempt for prosecute. In the same order, the trial court dismissed Youngs counterclaim against Advent for lack of jurisdiction.
disobeying the writ of seizure. Petitioners filed with the Court of Appeals a Petition for Certiorari, Prohibition and Notably, defendants claim is basically one for benefits under and by virtue of his employment with the plaintiff, and
Mandamus to annul the Orders of the trial court dated March 20, 1989 and March 27, 1989. The appellate court the subject vehicle is merely an incident in that claim. Said claim is properly ventilated, as it is resolvable by, the
lifted the writ of preliminary injunction and dismissed the petition. It declared that the complaint for replevin filed by Rehabilitation Court which has jurisdiction and has acquired jurisdiction, to the exclusion of this Court. Accordingly,
private respondents complied with the requirements under the Revised Rules of Court. As for the contempt charge plaintiffs Motion To Dismiss defendant Youngs counterclaim is granted.
against petitioners, the appellate court believed the same were sufficiently based on a written charge by private On 10 June 2005, Young filed a motion for partial reconsideration of the dismissal order with respect to his
respondents and the report submitted by the sheriff. Petitioners filed a motion for reconsideration, but it was counterclaim.
denied. Hence, the present petition. Petitioners contended that the confiscated lumber cannot be the subject of On 8 July 2005, Young filed an omnibus motion, praying that Advent return the subject car and pay him P1.2 million
replevin and the writ of replevin was issued in in damages (f)or the improper and irregular seizure of the subject car, to be charged against the replevinbond posted
contravention of P.D. No. 705. by Advent through Stronghold.
On 24 March 2006, the trial court issued an Order denying Youngs motion for partial reconsideration.
On 8 June 2006, Young filed a motion to resolve his omnibus motion.
17

In an Order dated 5 July 2006, the trial court denied the motion to resolve.
Young filed a petition for certiorari and mandamus with the Court of Appeals seeking to annul the trial courts Orders Sec. 20. Claim for damages on account of improper, irregular or excessive attachment. - An application for
of 24 March 2006 and 5 July 2006. damages on account of improper, irregular or excessive attachment must be filed before the trial or before
The Court of Appeals ruled in favor of Young and annulled the assailed rulings of the trial court. appeal is perfected or before the judgment becomes executory, with due notice to the attaching obligee or
his surety or sureties, setting forth the facts showing his right to damages and the amount thereof. Such
Issue: damages may be awarded only after proper hearing and shall be included in the judgment on the main
Whether or not the Court of Appeals committed reversible error in (1) directing the return of the seized car to case. e
Young; and (2) ordering the trial court to set a hearing for the determination of damages against thereplevin bond.
RULING: If the judgment of the appellate court be favorable to the party against whom the attachment was issued,
The petition is partially meritorious. he must claim damages sustained during the pendency of the appeal by filing an application in the
On returning the seized vehicle to Young appellate court with notice to the party in whose favor the attachment was issued or his surety or sureties,
before the judgment of the appellate court becomesexecutory. The appellate court may allow the
We agree with the Court of Appeals in directing the trial court to return the seized car to Young since this is the application to be heard and decided by the trial court.
necessary consequence of the dismissal of the replevin case for failure to prosecute without prejudice. Upon the
dismissal of the replevin case for failure to prosecute, the writ of seizure, which is merely ancillary in nature, Nothing herein contained shall prevent the party against whom the attachment was issued from
became functus officio and should have been lifted. There was no adjudication on the merits, which means that recovering in the same action the damages awarded to him from any property of the attaching obligee not
there was no determination of the issue who has the better right to possess the subject car. Advent cannot therefore exempt from execution should the bond or deposit given by the latter be insufficient or fail to fully satisfy
retain possession of the subject car considering that it was not adjudged as the prevailing party entitled to the the award.
remedy ofreplevin.
The above provision essentially allows the application to be filed at any time before the judgment becomes
Contrary to Advents view, Olympia International Inc. v. Court of Appeals applies to this case. The dismissal of executory. It should be filed in the same case that is the main action, and with the court having jurisdiction over the
the replevin case for failure to prosecute results in the restoration of the parties status prior to litigation, as if no case at the time of the application.
complaint was filed at all. To let the writ of seizure stand after the dismissal of the complaint would be adjudging In this case, there was no application for damages against Stronghold resulting from the issuance of the writ of
Advent as the prevailing party, when precisely no decision on the merits had been rendered. Accordingly, the parties seizure before the finality of the dismissal of the complaint for failure to prosecute. It appears that Young filed his
must be reverted to their status quo ante. Since Young possessed the subject car before the filing of omnibus motion claiming damages against Stronghold after the dismissal order issued by the trial court on 28 April
thereplevin case, the same must be returned to him, as if no complaint was filed at all. 2005 had attained finality. While Young filed a motion for partial reconsideration on 10 June 2005, it only concerned
the dismissal of his counterclaim, without any claim for damages against the replevin bond. It was only on 8 July
Advents contention that returning the subject car to Young would constitute a violation of the stay order issued by 2005 that Young filed an omnibus motion seeking damages against the replevin bond, after the dismissal order had
the rehabilitation court is untenable. As the Court of Appeals correctly concluded, returning the seized vehicle to already become final for Advents non-appeal of such order. In fact, in his omnibus motion, Young stressed the
Young is not an enforcement of a claim against Advent which must be suspended by virtue of the stay order issued finality of the dismissal order.Thus, Young is barred from claiming damages against the replevin bond.
by the rehabilitation court pursuant to Section 6 of the Interim Rules on Corporate Rehabilitation (Interim Rules).The Since Young is time-barred from claiming damages against the replevin bond, the dismissal order having attained
issue in the replevin case is who has better right to possession of the car, and it was Advent that claimed a better finality after the application for damages, the Court of Appeals erred in ordering the trial court to set a hearing for
right in filing the replevin case against Young. In defense, Young claimed a better right to possession of the car the determination of damages against the replevin bond.
arising from Advents car plan to its executives, which he asserts entitles him to offset the value of the car against the
proceeds of his retirement pay and stock option plan.
SPECIAL CIVIL ACTION (INTERPLEADER) RULE 62
Young cannot collect a money claim against Advent within the contemplation of the Interim Rules. The term claim
has been construed to refer to debts or demands of a pecuniary nature, or the assertion to have money paid by the 27. MESSINA vs. IAC
company under rehabilitation to its creditors. In the replevin case, Young cannot demand that Advent pay him
money because such payment, even if valid, has been stayed by order of the rehabilitation court. However, in Private respondent Jose Go purchased a Cahier’s Check from Associated Bank for P800,000.00. Jose Go left said
thereplevin case, Young can raise Advents car plan, coupled with his retirement pay and stock option plan, as giving check on the top of the desk of the bank manager when he left. The bank manager then entrusted the check for
him a better right to possession of the car. To repeat, Young is entitled to recover the subject car as a necessary safekeeping to a bank official named Albert Uy, who had then a visitor in the person of Alexander Lim. Since the
consequence of the dismissal of the replevin case for failure to prosecute without prejudice. check was nowhere to be found, Uy advised Jose Go to go to the bank to accomplish a "STOP PAYMENT" order and
to execute an affidavit of loss. Uy went to the police to report the loss of the check, pointing to the person of
On the damages against the replevin bond Alexander Lim as the one who could shed light on it.

Section 10, Rule 60 of the Rules of Court governs claims for damages on account of improper or irregular seizure Police records show that Associated Bank received the lost check for clearing coming from Prudential Bank, Escolta
in replevin cases. It provides that in replevin cases, as in receivership and injunction cases, the damages to be Branch and said check was dishonored by Associated Bank by sending it back to Prudential Bank, with the words
awarded upon the bond shall be claimed, ascertained, and granted in accordance with Section 20 of Rule 57 which "Payment Stopped" stamped on it. Later, Associated Bank received a letter from a certain Atty. Lorenzo Navarro
reads: demanding payment on the cashier's check in question, which was being held by his client. He however refused to
18

reveal the name of his client and threatened to sue, if payment is not made. Respondent bank replied saying that the were given an opportunity to present their sides. Petitioner chose to withhold substantial facts. Respondents were
check belonged to Jose Go who lost it in the bank and is laying claim to it. not forbidden to present their side-this is the purpose of the Comment of respondent to the petition. IAC decided
the question by considering both the facts submitted by petitioner and those given by respondents. IAC did not act
Police sent a letter to the Manager of the Prudential Bank, Escolta Branch, requesting assistance in identifying the therefore beyond the scope of the remedy sought in the petition.
person who tried to encash the check but said bank refused saying that it had to protect its client's interest and the
identity could only be revealed with the client's conformity. Unsure of what to do on the matter, respondent
Associated Bank on filed an action for Interpleader naming as respondent, Jose Go and one John Doe, Atty. Navarro's
then unnamed client. On even date, respondent bank received summons and copy of the complaint for damages of a
certain Marcelo A. Mesina from RTC of Caloocan City. Respondent bank moved to amend its complaint, having been
notified for the first time of the name of Atty. Navarro's client and substituted Marcelo A. Mesina for John Doe.

Jose Go filed his answer in the Interpleader Case and moved to participate as intervenor in the complain for
damages. Albert Uy filed a motion of intervention and answer in the complaint for Interpleader. On the Scheduled
date of pretrial conference in the interpleader case, it was disclosed that the "John Doe" impleaded as one of the
defendants is actually petitioner Marcelo A. Mesina. Petitioner instead of filing his answer to the complaint in the
interpleader filed an Omnibus Motion to Dismiss Ex Abudante Cautela.

PETITIONER’S CONTENTION: The order requiring him to file his answer was issued without jurisdiction and since he
is presumably a holder in due course and for value, how can he be compelled to litigate against Jose Go who is not
even a party to the check; that there is failure to state a cause of action and lack of personality to sue; and that there
is no showing of conflicting claims and interpleader is out of the question.

ISSUE: Whether or not the action for interpleader is proper?

HELD: Yes. Respondent bank merely took the necessary precaution not to make a mistake as to whom to pay and
therefore interpleader was its proper remedy. It has been shown that the interpleader suit was filed by respondent
bank because petitioner and Jose Go were both laying their claims on the check, petitioner asking payment thereon
and Jose Go as the purchaser or owner.

The allegation of petitioner that respondent bank had effectively relieved itself of its primary liability under the
check by simply filing a complaint for interpleader is belied by the willingness of respondent bank to issue a
certificate of time deposit in the amount of P800,000 representing the cashier's check in question in the name of the
Clerk of Court of Manila to be awarded to whoever will be found by the court as validly entitled to it. Said validity will
depend on the strength of the parties' respective rights and titles thereto. Bank filed the interpleader suit not
because petitioner sued it but because petitioner is laying claim to the same check that Go is claiming. On the very
day that the bank instituted the case in interpleader, it was not aware of any suit for damages filed by petitioner
against it as supported by the fact that the interpleader case was first entitled Associated Bank vs. Jose Go and John
Doe, but later on changed to Marcelo A. Mesina for John Doe when his name became known to respondent bank.

Further, before respondent bank resorted to Interpleader, it took precautionary and necessary measures to bring
out the truth. On the other hand, petitioner concealed the circumstances known to him and now that private
respondent bank brought these circumstances out in court (which eventually rendered its decision in the light of
these facts), petitioner charges it with "gratuitous excursions into these non-issues."

Respondent IAC cannot rule on whether respondent RTC committed an abuse of discretion or not, without being
apprised of the facts and reasons why respondent Associated Bank instituted the Interpleader case. Both parties