Zeneca Pharmaceuticals vs Natrapharm inc. GR No.
197802 "ZYNAPSE" is the registered trademark of [respondent], and that as such owner, it has
VILLARAMA, JR., J.:
This is a petition for review[1] under Rule 45 of the 1997 Rules of Civil Procedure, as
amended, assailing the April 18, 2011 Decision[2] and July 21, 2011 Resolution[3] of the
Court of Appeals (CA) in the petition for certiorari docketed as CA-G.R. SP No. 103333
granting a permanent injunction in favor of respondent Natrapharm, Inc. and against
petitioner Zuneca Pharmaceutical.
The facts follow:
Respondent is an all-Filipino pharmaceutical company which manufactures and sells a
medicine bearing the generic name "CITICOLINE," which is indicated for heart and stroke
patients. The said medicine is marketed by respondent under its registered trademark
"ZYNAPSE," which respondent obtained from the Intellectual Property Office (IPO) on
September 24, 2007 under Certificate of Trademark Registration No. 4-2007-005596. With its
registration, the trademark "ZYNAPSE" enjoys protection for a term of 10 years from
September 24, 2007.[4]
In addition, respondent obtained from the Bureau of Food and Drugs (BFAD) all necessary
permits and licenses to register, list and sell its "ZYNAPSE" medicine in its various forms and
dosages.[5]
Allegedly unknown to respondent, since 2003 or even as early as 2001, petitioners have
been selling a medicine imported from Lahore, Pakistan bearing the generic name
"CARBAMAZEPINE," an anti-convulsant indicated for epilepsy, under the brand name
"ZYNAPS," which trademark is however not registered with the IPO. "ZYNAPS" is pronounced
exactly like "ZYNAPSE."[6]
Respondent further alleged that petitioners are selling their product "ZYNAPS"
CARBAMAZEPINE in numerous drugstores in the country where its own product "ZYNAPSE"
CITICOLINE is also being sold.[7]
Moreover, respondent claimed that the drug CARBAMAZEPINE has one documented serious
and disfiguring side-effect called "Stevens-Johnson Syndrome," and that the sale of the
medicines "ZYNAPSE" and "ZYNAPS" in the same drugstores will give rise to medicine
switching.[8]
On October 30, 2007, respondent sent petitioners a cease-and-desist demand letter, pointing
out that:
exclusive trademark right under the law to the use thereof and prevent others from using
identical or confusingly similar marks, and that [petitioners] must stop the use of "ZYNAPS"
for being nearly identical to "ZYNAPSE"; and
Because there is confusing similarity between "ZYNAPSE" and "ZYNAPS," there is a danger of
medicine switching, with the patient on "ZYNAPSE" medication placed in a more injurious
situation given the Steven-Johnson Syndrome side effect of the "ZYNAPS" CARBAMAZEPINE.
[9]
Petitioners refused to heed the above demand, claiming that they had prior use of the name
"ZYNAPS" since year 2003, having been issued by the BFAD a Certificate of Product
Registration (CPR) on April 15, 2003, which allowed them to sell CARBAMAZEPINE under the
brand name "ZYNAPS."[10]
On November 29, 2007, respondent filed a complaint against petitioners for trademark
infringement for violation of Republic Act (R.A.) No. 8293, or the Intellectual Property Code
of the Philippines (IPC), with prayer for a temporary restraining order (TRO) and/or writ of
preliminary injunction. To justify the TRO/writ of preliminary injunction, respondent cited
Section 122[11] of R.A. No. 8293, under which the registration of "ZYNAPSE" gives it the
exclusive right to use the said name as well as to exclude others from using the same.[12] In
addition, respondent argued that under Sections 138[13] and 147.1[14] of the IPC,
certificates of registration are prima facie evidence of the registrant's ownership of the mark
and of the registrant's exclusive right to use the same.[15] Respondent also invoked the case
of Conrad and Company, Inc. v. Court of Appeals[16] where it was ruled that an invasion of a
registered mark entitles the holder of a certificate of registration thereof to injunctive relief.
[17]
In their answer, petitioners argued that they enjoyed prior use in good faith of the brand
name "ZYNAPS," having submitted their application for CPR with the BFAD on October 2,
2001, with the name "ZYNAPS" expressly indicated thereon. The CPR was issued to them on
April 15, 2003.[18] Moreover, petitioners averred that under Section 159[19] of the IPC their
right to use the said mark is protected.[20]
In its December 21, 2007 Order,[21] the Regional Trial Court (RTC) denied respondent's
application for a TRO, ruling that even if respondent was able to first register its mark
"ZYNAPSE" with the IPO in 2007, it is nevertheless defeated by the prior actual use by
petitioners of "ZYNAPS" in 2003.
In its March 12, 2008 Order,[22] the RTC denied the application for a writ of preliminary
injunction, reiterating the reasons stated in the order denying the application for a TRO:
In this Court's objective evaluation, neither party is, at this point, entitled to any injunctive
solace. Plaintiff, while admittedly the holder of a registered trademark under the IPC, may
not invoke ascendancy or superiority of its CTR [certificate of trademark registration] over
the CPR [certificate of product registration of the BFAD] of the defendants, as the latter
certificate is, in the Court's opinion, evidence of its "prior use". Parenthetically, the plaintiff
would have been entitled to an injunction as against any or all third persons in respect of its
registered mark under normal conditions, that is, in the event wherein Section 159.1 would
not be invoked by such third person. Such is the case however in this litigation. Section 159
of the IPC explicitly curtails the registrant's rights by providing for limitations on those rights
as against a "prior user" under Section 159.1 xxx.[23]
Via a petition for certiorari with an application for a TRO and/or a writ of preliminary
injunction, respondent questioned before the CA the RTC's denial of the application for a
writ of preliminary injunction.
On June 17, 2008, the CA issued a Resolution[24] denying respondent's application for TRO
and/or preliminary injunction for lack of merit. The CA found no compelling reason to grant
the application for TRO and/or preliminary injunction because there was no showing that
respondent had a clear and existing right that will be violated by petitioners. Respondent
moved for reconsideration but was denied by the CA in its July 31, 2008 Resolution.[25]
However, contrary to its earlier resolutions denying the application for a TRO/preliminary
injunction, the CA, in its April 18, 2011 Decision, upheld the allegations of respondent that it
is entitled to injunctive relief on the basis of its IPO registration and permanently enjoined
petitioners from the commercial use of "ZYNAPS." The fallo of the CA Decision reads:
WHEREFORE, premises considered, the Petition for Certiorari is GRANTED. The assailed
Omnibus Order dated 12 March 2008 of the Regional Trial Court, Branch 93 of Quezon City in
Civil Case No. Q-07-61561 is REVERSED and SET ASIDE, and a new one is entered
permanently ENJOINING defendants-respondents, their employees, agents, representatives,
dealers, retailers, and/or assigns, and any and all persons acting in their behalf, from
manufacturing, importing, distributing, selling and/or advertising for sale, or otherwise using
in commerce, the anti-convulsant drug CARBAMAZEPINE under the brand name and mark
"ZYNAPS," or using any other name which is similar or confusingly similar to petitioner's
registered trademark "ZYNAPSE," including filing of application for permits, license, or
certificate of product registration with the Food and Drug Administration and other
government agencies.
SO ORDERED.[26] (Underscoring and additional emphasis supplied)
Petitioners' motion for reconsideration was denied by the CA in its Resolution dated July 21,
2011.
Hence, this petition for review.
On December 2, 2011, the RTC rendered a Decision[27] on the merits of the case. It found
petitioners liable to respondent for damages. Moreover, it enjoined the petitioners from
using "ZYNAPS" and ordered all materials related to it be disposed outside the channel of
commerce or destroyed without compensation.[28]
Respondent moved to dismiss the present petition in view of the December 2, 2011 RTC
Decision which functions as a full adjudication on the merits of the main issue of trademark
infringement. Respondent contended that the present petition is moot and academic, it only
involving an ancillary writ.[29]
Petitioners, on the other hand, opposed the motion to dismiss arguing that the December 2,
2011 RTC Decision had not yet attained finality, thus, the present petition had not yet been
rendered moot.
The two issues which need to be addressed are:
1) Whether the decision on the merits rendered the issues in this case moot and academic?
and
2) Whether the CA may order a permanent injunction in deciding a petition for certiorari
against the denial of an application for a preliminary injunction issued by the RTC?
We hold that the issues raised in the instant petition have been rendered moot and
academic given the RTC's December 2, 2011 Decision on the merits of the case.
Rule 58 of the Rules of Court provides for both preliminary and permanent injunction.
Section 1, Rule 58 provides for the definition of preliminary injunction:
SECTION 1. Preliminary injunction defined; classes. — A preliminary injunction is an order
granted at any stage of an action or proceeding prior to the judgment or final order,
requiring a party or a court, agency or a person to refrain from a particular act or acts. It may
also require the performance of a particular act or acts, in which case it shall be known as a
preliminary mandatory injunction. (Emphasis supplied)
On the other hand, Section 9 of the same Rule defines a permanent injunction in this wise:
SEC. 9. When final injunction granted. — If after the trial of the action it appears that the
applicant is entitled to have the act or acts complained of permanently enjoined, the court
shall grant a final injunction perpetually restraining the party or person enjoined from the
commission or continuance of the act or acts or confirming the preliminary mandatory
injunction. (Emphasis supplied)
A writ of preliminary injunction is generally based solely on initial and incomplete evidence.
[30] The evidence submitted during the hearing on an application for a writ of preliminary
injunction is not conclusive or complete for only a sampling is needed to give the trial court
an idea of the justification for the preliminary injunction pending the decision of the case on
the merits.[31] As such, the findings of fact and opinion of a court when issuing the writ of
preliminary injunction are interlocutory in nature and made even before the trial on the
merits is commenced or terminated.[32]
By contrast a permanent injunction, based on Section 9, Rule 58 of the Rules of Court, forms
part of the judgment on the merits and it can only be properly ordered only on final
judgment. A permanent injunction may thus be granted after a trial or hearing on the merits
of the case and a decree granting or refusing an injunction should not be entered until after
a hearing on the merits where a verified answer containing denials is filed or where no
answer is required, or a rule to show cause is equivalent to an answer.[33]
power and right to determine such question of preference, its judgment is not without, nor
in excess of, jurisdiction; and even assuming that its findings are not correct, they would, at
most, constitute errors of law, and not abuses of discretion, correctible by certiorari. The
obvious remedy for petitioner Casilan was a timely appeal from the judgment on the merits
to the Court of Appeals, the amount involved being less than P200,000. But the judgment
has become final and unappealable and can not be set aside through certiorari proceedings.
(Emphasis supplied)
Here, this Court is being asked to determine whether the CA erred by issuing a permanent
injunction in a case which questioned the propriety of the denial of an ancillary writ. But
with the RTC's December 2, 2011 Decision on the case for "Injunction, Trademark
Infringement, Damages and Destruction," the issues raised in the instant petition have been
rendered moot and academic. We note that the case brought to the CA on a petition for
certiorari merely involved the RTC's denial of respondent's application for a writ of
preliminary injunction, a mere ancillary writ. Since a decision on the merits has already been
rendered and which includes in its disposition a permanent injunction, the proper remedy is
an appeal36 from the decision in the main case.
WHEREFORE, in light of all the foregoing, the petition is hereby DENIED for being moot and
academic.
SO ORDERED.

As such a preliminary injunction, like any preliminary writ and any interlocutory order,
cannot survive the main case of which it is an incident; because an ancillary writ of
preliminary injunction loses its force and effect after the decision in the main petition.34

In Casilan v. Ybañez,[35] this Court stated:

As things stand now, this Court can no longer interfere with the preliminary injunctions
issued by the Leyte court in its cases Nos. 2985 and 2990, because such preliminary writs
have already been vacated, being superseded and replaced by the permanent injunction
ordered in the decision on the merits rendered on 21 March 1962. And as to the permanent
injunction, no action can be taken thereon without reviewing the judgment on the merits,
such injunction being but a consequence of the pronouncement that the credits of Tiongson
and Montilla are entitled to priority over that of Casilan. Since the court below had the

ZUNECA PHARMACEUTICAL, AKRAM ARAIN AND/OR VENUS ARAIN, M.D. DBA ZUNECA
PHARMACEUTICAL, Petitioners, v. NATRAPHARM, INC., Respondent. [DIGEST]
Respondent is an all-Filipino pharmaceutical company which manufactures and sells a
medicine bearing the generic name "CITICOLINE," which is indicated for heart and stroke
patients. The said medicine is marketed by respondent under its registered trademark
"ZYNAPSE," which respondent obtained from the Intellectual Property Office (IPO) on
September 24, 2007 under Certificate of Trademark Registration No. 4-2007-005596. With its
registration, the trademark "ZYNAPSE" enjoys protection for a term of 10 years from
September 24, 2007.
Early 2001, petitioners have been selling a medicine imported from Lahore, Pakistan bearing
the generic name "CARBAMAZEPINE," an anti-convulsant indicated for epilepsy, under the
brand name "ZYNAPS," which trademark is however not registered with the IPO. "ZYNAPS" is
pronounced exactly like "ZYNAPSE."
Respondent claimed that the drug CARBAMAZEPINE has one documented serious and
disfiguring side-effect called "Stevens-Johnson Syndrome," and that the sale of the
medicines "ZYNAPSE" and "ZYNAPS" in the same drugstores will give rise to medicine
switching.
Petitioners claimed that they had prior use of the name "ZYNAPS" since year 2003, having
been issued by the BFAD a Certificate of Product Registration (CPR) on April 15, 2003, which
allowed them to sell CARBAMAZEPINE under the brand name "ZYNAPS."
Respondent filed a complaint against petitioners for trademark infringement for violation of
Republic Act (R.A.) No. 8293, or the Intellectual Property Code of the Philippines (IPC).
In their answer, petitioners argued that they enjoyed prior use in good faith of the brand
name "ZYNAPS," having submitted their application for CPR with the BFAD on October 2,
2001, with the name "ZYNAPS" expressly indicated thereon. The CPR was issued to them on
April 15, 2003.Petitioners averred that under Section 159 of the IPC their right to use the
said mark is protected.
The Regional Trial Court (RTC) denied respondent's application for a TRO, ruling that even if
respondent was able to first register its mark "ZYNAPSE" with the IPO in 2007, it is
nevertheless defeated by the prior actual use by petitioners of "ZYNAPS" in 2003.
In this Court's objective evaluation, neither party is, at this point, entitled to any injunctive
solace. Plaintiff, while admittedly the holder of a registered trademark under the IPC, may
not invoke ascendancy or superiority of its CTR [certificate of trademark registration] over
the CPR [certificate of product registration of the BFAD] of the defendants, as the latter
certificate is, in the Court's opinion, evidence of its "prior use". Parenthetically, the plaintiff
would have been entitled to an injunction as against any or all third persons in respect of its
registered mark under normal conditions, that is, in the event wherein Section 159 would
not be invoked by such third person. Such is the case however in this litigation. Section 159
of the IPC explicitly curtails the registrant's rights by providing for limitations on those rights
as against a "prior user" under Section 159.
CA issued a Resolution denying respondent's application for TRO and/or preliminary
injunction for lack of merit. The CA found no compelling reason to grant the application for
TRO and/or preliminary injunction because there was no showing that respondent had a
clear and existing right that will be violated by petitioners. Respondent moved for
reconsideration but was denied by the CA in its July 31, 2008 Resolution.
Issue:
Whether the CA may order a permanent injunction in deciding a petition for certiorari
against the denial of an application for a preliminary injunction issued by the RTC?
Held:
Rule 58 of the Rules of Court provides for both preliminary and permanent injunction.
Section 1, Rule 58 provides for the definition of preliminary injunction:
SECTION 1. Preliminary injunction defined; classes. — A preliminary injunction is an order
granted at any stage of an action or proceeding prior to the judgment or final order,
requiring a party or a court, agency or a person to refrain from a particular act or acts. It may
also require the performance of a particular act or acts, in which case it shall be known as a
preliminary mandatory injunction.
On the other hand, Section 9 of the same Rule defines a permanent injunction in this wise:
SEC. 9. When final injunction granted. — If after the trial of the action it appears that the
applicant is entitled to have the act or acts complained of permanently enjoined, the court
shall grant a final injunction perpetually restraining the party or person enjoined from the
commission or continuance of the act or acts or confirming the preliminary mandatory
injunction.

A writ of preliminary injunction is generally based solely on initial and incomplete evidence.
The evidence submitted during the hearing on an application for a writ of preliminary
injunction is not conclusive or complete for only a sampling is needed to give the trial court
an idea of the justification for the preliminary injunction pending the decision of the case on
the merits. As such, the findings of fact and opinion of a court when issuing the writ of
preliminary injunction are interlocutory in nature and made even before the trial on the
merits is commenced or terminated.

By contrast a permanent injunction, based on Section 9, Rule 58 of the Rules of Court, forms
part of the judgment on the merits and it can only be properly ordered only on final
judgment. A permanent injunction may thus be granted after a trial or hearing on the merits
of the case and a decree granting or refusing an injunction should not be entered until after
a hearing on the merits where a verified answer containing denials is filed or where no
answer is required, or a rule to show cause is equivalent to an answer.

As such a preliminary injunction, like any preliminary writ and any interlocutory order,
cannot survive the main case of which it is an incident; because an ancillary writ of
preliminary injunction loses its force and effect after the decision in the main petition.

This Court is being asked to determine whether the CA erred by issuing a permanent
injunction in a case which questioned the propriety of the denial of an ancillary writ. But
with the RTC's December 2, 2011 Decision on the case for "Injunction, Trademark
Infringement, Damages and Destruction," the issues raised in the instant petition have been
rendered moot and academic. We note that the case brought to the CA on a petition for
certiorari merely involved the RTC's denial of respondent's application for a writ of
preliminary injunction, a mere ancillary writ. Since a decision on the merits has already been
rendered and which includes in its disposition a permanent injunction, the proper remedy is
an appeal from the decision in the main case.

BF Homes v Meralco G.R. No. 171624 | SCRA | December 6, 2010 | Leonardo-De Castro, J. Petition:
Petition for Review on Certiorari
Petitioners: BF Homes and Philippines Waterworks and Construction Co.
Respondents: Manila Electric Company
DOCTRINE: The doctrine of primary jurisdiction
FACTS
a. BF Homes and PWCC distributes water drawn from deep wells using pumps run by electricity
supplied by MERALCO in BF Homes subdivisions in Paraaque City, Las Pias City, Caloocan City, and
Quezon City
b. In Republic v Meralco, the SC ordered MERALCO to refund its customers, which shall be credited
against the customers future consumption, the excess average amount of P0.167 per kilowatt hour
starting with the customers billing cycles beginning February 1998 a. Due to this ruling, BF Homes and
PWCC asked for refund in the amount of P11,834,570.91.
c. Accordingly, MERALCO disconnected electric supply to BF Homes and PWCCs’ 16 water pumps
located in BF Homes in Paranaque, Caloocan, and Quezon City, which thus disrupted water supply in
those areas
a. Meralco demanded from BF Homes and PWCC the payment of electric bills amounting to
P4,717,768.15
b. BF Homes and PWCC then requested that such amount be applied against the
P11,834,570.91 worth of refund asked from Meralco. Denied.
c. Again, 5 more water pumps was were cut off power supply. Meralco threatened to cut
more power supply
d. BF Homes and PWCC filed a case in RTC asking for damages plus writ of preliminary injunction and
restraining order
a. In Meralco’s answer, it allege that the service contracts provides that “The Company reserves the
right to discontinue service in case the customer is in arrears in the payment of bills” and such right is
sanctioned and approved by the rules and regulations of ERB
b. As to the refund, Meralco claims that the refund has to be implemented in accordance with the
guidelines and schedule to be approved by the ERC
c. Meralco also allege that RTC has no jurisdiction over the subject matter
ISSUES
1. W/N the remedy of injunction is proper 2. W/N the court has jurisdiction over the subject matter
RULING & RATIO
a. Yes, the injunction is granted by the Court
a. The right of Meralco under the said service contract must succumb to the paramount
substantial and constitutional rights of the public to the usage and enjoyment of waters in their
community
b. Such injunction must be given in order to prevent social unrest in the community for
having been deprived of the use and enjoyment of waters
b. No, the Court has no jurisdiction over the case of refund
a. In determining which body has jurisdiction over a case, the better policy is to consider not
only the status or relationship of the parties but also the nature of the action that is the subject of
their controversy
b. In Meralco v ERB, the Court traced the legislative history of the regulatory agencies which
preceded the ERC to determine the legislative intent as to its jurisdiction
c. Accordingly, ERC has original and exclusive jurisdiction over all cases contesting rates, fees,
fines, and penalties imposed by the ERC in the exercise of its powers, functions and responsibilities
d. The doctrine of primary jurisdiction applies where the administrative agency, as in the case
of ERC, exercises its quasi-judicial and adjudicatory function
e. The cause of action originates from the Meralco Refund Decision as it involves the
perceived right of the BF Homes and PWCC to compel the latter to set-off or apply their refund to
their present electric bill
f. Such right of refund however must comply with the approved schedule of ERC g. Hence,
jurisdiction lies with ERC. Since RTC has no jurisdiction, it was also devoid of any authority to act on
the application of BF Homes and PWCC for the issuance of a writ of preliminary injunction contained
in the same Petition
DISPOSITION
WHEREFORE, the instant Petition for Review is DENIED. The Decision dated October 27, 2005 of the
Court of Appeals in CA-G.R. SP No. 82826 is AFFIRMED with the MODIFICATION that the Regional Trial
Court, Branch 202 of Las Pinas City, is ORDERED to dismiss the Petition [With Prayer for the Issuance
of Writ of Preliminary Injunction and for the Immediate Issuance of Restraining Order] of BF Homes,
Inc. and Philippine Waterworks and Construction Corporation in Civil Case No. 03-0151. Costs against
BF Homes, Inc. and Philippine Waterworks and Construction Corporation.
northern islands co. inc vs spouses garcia
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari[1] are the Decision[2] dated January 19,
2012 and the Resolution[3] dated August 24, 2012 of the Court of Appeals (CA) in CA-G.R. SP
No. 97448, ordering the Regional Trial Court of Quezon City, Branch 215 (RTC) to appoint a
commissioner to determine the value of the attached properties of respondents Spouses
Dennis and Cherylin Garcia (respondents), and to discharge any excessive attachment found
thereby.
The Facts
On September 23, 2005, petitioner Northern Islands Co., Inc. (petitioner) filed a
Complaint[4] with application for a writ of preliminary attachment, before the RTC against
respondents, docketed as Civil Case No. Q-05-53699 (Main Case), which was subsequently
amended[5] on October 25, 2005.[6] It alleged that: (a) from March to July 2004, petitioner
caused the delivery to respondents of various appliances in the aggregate amount of
P8,040,825.17;[7] (b) the goods were transported, shipped, and delivered by Sulpicio Lines,
Inc., and were accepted in good order and condition by respondents' representatives;[8] (c)
the parties agreed that the goods delivered were payable within 120 days, and that the
unpaid amounts would earn interest at a rate of eighteen percent (18%) per annum;[9] (d)
however, the value of the goods were not paid by respondents despite repeated demands;
[10] and (e) respondents fraudulently asserted that petitioner had no proof that they had
indeed received the quantity of the subject goods.[11]
In connection with the application for a writ of preliminary attachment, petitioner posted a
bond, through Visayan Surety and Insurance Corporation, in the amount of ?8,040,825.17.
On November 7, 2005, the RTC issued the writ sought for.[12]
Instead of filing an answer, respondents filed on November 11, 2001, an Urgent Motion for
Extension of Time to File Proper Pleading and Motion for Discovery (Production and
Inspection)[13] (November 11, 2001 Motion), asking the RTC to allow them to photocopy
and personally examine the original invoices, delivery cargo receipts, and bills of lading
attached to the Amended Complaint, claiming that they could not "come up with an
intelligent answer" without being presented with the originals of such documents.[14]
Thereafter, or on January 11, 2006, respondents filed a Motion to Discharge Excess
Attachment,[15] alleging that the attachment previously ordered by the RTC exceeded by
P9,232,564.56 given that the estimated value of the attached properties, including the
garnished bank accounts, as assessed by their appraiser, Gaudioso W. Lapaz (Lapaz),
amounted to P17,273,409.73, while the attachment bond is only in the amount of
P8,040,825.17.[16]
In an Order[17] dated February 28, 2006, the RTC denied the November 11, 2001 Motion,
and, instead, directed respondents to file their answer, which the latter complied with
through the filing of their Answer Ad Cautelam Ex Abudante with Compulsory
Counterclaim[18] on April 3, 2006. Despite this, respondents again filed a Motion for Leave
of Court to File Motion for Discovery (Production and Inspection)[19] (Motion for Discovery)
on April 7, 2006.[20]
The RTC Ruling
In an Order[21] dated June 21, 2006, the RTC, among others, denied the Motion to
Discharge Excess Attachment, finding that the appraisal made by Lapaz was not reflective of
the true valuation of the properties, adding too that the bond posted by petitioner stands as
sufficient security for whatever damages respondents may sustain by reason of the
attachment.[22]
On the other hand, the RTC granted the Motion for Discovery in accordance with Rule 27 of
the Rules of Court, despite petitioner's claim that it did not have the originals of the
documents being sought.[23]
However, no production or inspection was conducted on July 10, 2006 as the RTC directed
since respondents received the copy of the above order only on July 11, 2006.[24]
On July 25, 2006, respondents filed a Motion for Partial Reconsideration of the Order dated
June 21, 2006, specifically assailing the denial of their Motion to Discharge Excess
Attachment. In this relation, they prayed that the RTC refer to a commissioner, pursuant to
Rule 32 of the Rules of Court, the factual determination of the total aggregate amount of
respondents' attached properties so as to ascertain if the attachment was excessive. Also,
they prayed that the order for production and inspection be modified and that petitioner be
ordered to produce the original documents anew for their inspection and copying. [25]
The foregoing motion was, however, denied by the RTC in an Order[26] dated August 23,
2006 for lack of merit. Thus, respondents elevated the matter to the CA via petition for
certiorari and mandamus,[27] docketed as CA-G.R. SP No. 97448 (Certiorari Case).
In the interim, the RTC rendered a Decision[28] dated September 21, 2011 in the Main Case.
Essentially, it dismissed petitioner's Amended Complaint due to the absence of any evidence
to prove that respondents had agreed to the pricing of the subject goods.[29]
The RTC's September 21, 2011 Decision was later appealed[30] by petitioner before the CA
on October 27, 2011. Finding that the Notice of Appeal was seasonably filed, with the
payment of the appropriate docket fees, the RTC, in an Order[31] dated January 25, 2012,
ordered the elevation of the entire records of the Main Case to the CA. The appeal was then
raffled to the CA's Eighth Division, and docketed as CA-G.R. CV No. 98237. On the other
hand, records do not show that respondents filed any appeal.[32]
The CA Ruling in the Certiorari Case
Meanwhile, the CA, in a Decision[33] dated January 19, 2012, partly granted the certiorari
petition of respondents, ordering the RTC to appoint a commissioner as provided under Rule
32 of the Rules of Court as well as the subsequent discharge of any excess attachment if so
found therein, and, on the other hand, denying respondents' Motion for Discovery.[34]
It held that: (a) on the issue of attachment, trial by commissioners under Rule 32 of the
Rules of Court was proper so that the parties may finally settle their conflicting valuations;
[35] and (b) on the matter of discovery, petitioner could not be compelled to produce the
originals sought by respondents for inspection since they were not in the former's
possession.[36]
Aggrieved, petitioner filed a Motion for Partial Reconsideration[37] on February 13, 2012 but
was, however, denied in a Resolution[38] dated August 24, 2012, hence, the present
petition.
The Issues Before the Court
The issues presented for the Court's resolution are: (a) whether the RTC had lost jurisdiction
over the matter of the preliminary attachment after petitioner appealed the decision in the
Main Case, and thereafter ordered the transmittal of the records to the CA; and (b) whether
the CA erred in ordering the appointment of a commissioner and the subsequent discharge
of any excess attachment found by said commissioner.
The Court's Ruling
The petition is meritorious.
Section 9, Rule 41 of the Rules of Court provides that in appeals by notice of appeal, the
court loses jurisdiction over the case upon the perfection of the appeals filed in due time
and the expiration of the time to appeal of the other parties.
In this case, petitioner had duly perfected its appeal of the RTC's September 21, 2011
Decision resolving the Main Case through the timely filing of its Notice of Appeal dated
October 27, 2011, together with the payment of the appropriate docket fees. The RTC, in an
Order[39] dated January 25, 2012, had actually confirmed this fact, and thereby ordered the
elevation of the entire records to the CA. Meanwhile, records do not show that respondents
filed any appeal, resulting in the lapse of its own period to appeal therefrom. Thus, based on
Section 9, Rule 41, it cannot be seriously doubted that the RTC had already lost jurisdiction
over the Main Case.
With the RTC's loss of jurisdiction over the Main Case necessarily comes its loss of
jurisdiction over all matters merely ancillary thereto. Thus, the propriety of conducting a trial
by commissioners in order to determine the excessiveness of the subject preliminary
attachment, being a mere ancillary matter to the Main Case, is now mooted by its
supervening appeal in CA-G.R. CV No. 98237.
Note that in Sps. Olib v. Judge Pastoral,[40] the Court, in view of the nature of a preliminary
attachment, definitively ruled that the attachment itself cannot be the subject of a separate
action independent of the principal action because the attachment was only an incident of
such action, viz.:
Attachment is defined as a provisional remedy by which the property of an adverse party is
taken into legal custody, either at the commencement of an action or at any time thereafter,
as a security for the satisfaction of any judgment that may be recovered by the plaintiff or
any proper party.
It is an auxiliary remedy and cannot have an independent existence apart from the main suit
or claim instituted by the plaintiff against the defendant. Being merely ancillary to a principal
proceeding, the attachment must fail if the suit itself cannot be maintained as the purpose
of the writ can no longer be justified.
The consequence is that where the main action is appealed, the attachment which may have
been issued as an incident of that action, is also considered appealed and so also removed
from the jurisdiction of the court a quo. The attachment itself cannot be the subject of a
separate action independent of the principal action because the attachment was only an
incident of such action.[41] (Emphases supplied)
That being said, it is now unnecessary to discuss the other issues raised herein. In fine, the
petition is granted and the assailed CA rulings are set aside.
WHEREFORE, the petition is GRANTED. The Decision dated January 19, 2012 and the
Resolution dated August 24, 2012 of the Court of Appeals in CA-G.R. SP No. 97448 are
hereby SET ASIDE.
Bernardo Valdevieso vs Candelario Damalerio and Aurea C. Damalerio February 17, 2005
Facts: On 05 December 1995, Bernardo Valdevieso (petitioner) bought from spouses
Lorenzo and Elenita Uy a parcel of land. The deed of sale was not registered, nor was the
title of the land transferred to petitioner. It came to pass that on 19 April 1996, spouses
Candelario and Aurea Damalerio (respondents) filed with the Regional Trial Court (RTC) a
complaint for a sum of money against spouses Lorenzo and Elenita Uy with application for
the issuance of a Writ of Preliminary Attachment. On 23 April 1996, the trial court issued a
Writ of Preliminary Attachment by virtue of which the property, then still in the name of
Lorenzo Uy but which had already been sold to petitioner, was levied. The levy was duly
recorded in the Register of Deeds. On 06 June 1996, TCT No. T-30586 in the name of Lorenzo
Uy was cancelled and, in lieu thereof, TCT No. T-74439 was issued in the name of petitioner.
This new TCT carried with it the attachment in favor of respondents. On 14 August 1996,
petitioner filed a third-party claim to discharge or annul the attachment levied on the
property covered by TCT No. T-74439 on the ground that the said property belongs to him
and no longer to Lorenzo and Elenita Uy. The trial court ruled for the petitioner. Respondents
sought reconsideration thereof which was denied by the trial court. From the unfavorable
resolution of the trial court in the third-party claim, respondents appealed to the Court of
Appeals. The appellate court reversed the resolution. Petitioner moved for reconsideration
but this was denied by the Court of Appeals. Hence, this Petition for Review on Certiorari.
Issue: Whether or not a registered writ of attachment on the land is a superior lien over
that of an earlier unregistered deed of sale?
Ruling: We agree with the respondents.
The law applicable to the facts of this case is Section 51 of P.D. No. 1529. Said Section
provides:
Sec. 51. Conveyance and other dealings by registered owner. - An owner of registered land
may convey, mortgage, lease, charge, or otherwise deal with the same in accordance with
existing laws. He may use such forms of deeds, mortgages, leases or other voluntary
instruments as are sufficient in law. But no deed, mortgage, lease, or other voluntary
instrument, except a will purporting to convey or affect registered land, shall take effect as a
conveyance or bind the land, but shall operate only as a contract between the parties and as
evidence of authority to the Register of Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land insofar as third
persons are concerned, and in all cases under this Decree, the registration shall be made in
the office of the Register of Deeds for the province or city where the land lies.
It should also be observed that, at the time of the attachment of the property on 23 April
1996, the spouses Uy were still the registered owners of said property. Under the cited law,
the execution of the deed of sale in favor of petitioner was not enough as a succeeding step
had to be taken, which was the registration of the sale from the spouses Uy to him. Insofar
as third persons are concerned, what validly transfers or conveys a persons interest in real
property is the registration of the deed. Thus, when petitioner bought the property on 05
December 1995, it was, at that point, no more than a private transaction between him and
the spouses Uy. It needed to be registered before it could bind third parties, including
respondents. When the registration finally took place on 06 June 1996, it was already too
late because, by then, the levy in favor of respondents, pursuant to the preliminary
attachment ordered by the General Santos City RTC, had already been annotated on the
title.
The settled rule is that levy on attachment, duly registered, takes preference over a prior
unregistered sale. This result is a necessary consequence of the fact that the property
involved was duly covered by the Torrens system which works under the fundamental
principle that registration is the operative act which gives validity to the transfer or creates a
lien upon the land.
The preference created by the levy on attachment is not diminished even by the subsequent
registration of the prior sale. This is so because an attachment is a proceeding in rem. It is
against the particular property, enforceable against the whole world. The attaching creditor
acquires a specific lien on the attached property which nothing can subsequently destroy
except the very dissolution of the attachment or levy itself. Such a proceeding, in effect,
means that the property attached is an indebted thing and a virtual condemnation of it to
pay the owners debt. The lien continues until the debt is paid, or sale is had under execution
issued on the judgment, or until the judgment is satisfied, or the attachment discharged or
vacated in some manner provided by law.
Thus, in the registry, the attachment in favor of respondents appeared in the nature of a real
lien when petitioner had his purchase recorded. The effect of the notation of said lien was to
subject and subordinate the right of petitioner, as purchaser, to the lien. Petitioner acquired
ownership of the land only from the date of the recording of his title in the register, and the
right of ownership which he inscribed was not absolute but a limited right, subject to a prior
registered lien of respondents, a right which is preferred and superior to that of petitioner.
The appealed Decision of the Court of Appeals and its Resolution are hereby affirmed.
G.R. No. L-48756 September 11, 1982
K.O. GLASS CONSTRUCTION CO., INC., Petitioner, vs. THE HONORABLE MANUEL
VALENZUELA, Judge of the Court of First Instance of Rizal, and ANTONIO D. PINZON,
Respondents.
FACTS OF THE CASE:
 On October 6, 1977, an action was instituted in the Court of First Instance of Rizal by
Antonio D. Pinzon to recover from Kenneth O. Glass the sum of P37,190.00, alleged to be the
agreed rentals of his truck, as well as the value of spare parts which have not been returned
to him upon termination of the lease.
 In his verified complaint, the plaintiff asked for an attachment against the property
of the defendant consisting of collectibles and payables with the Philippine Geothermal, Inc.,
on the grounds that :
• the defendant is a foreigner;
• that he has sufficient cause of action against the said defendant;
• and that there is no sufficient security for his claim against the defendant in the
event a judgment is rendered in his favor.
 Defendant Kenneth O. Glass moved to quash the writ of attachment on the grounds
that:
• there is no cause of action against him since the transactions or claims of the
plaintiff were entered into by and between the plaintiff and the K.O. Glass Construction Co.,
Inc., a corporation duly organized and existing under Philippine laws;
• that there is no ground for the issuance of the writ of preliminary attachment as
defendant Kenneth O. Glass never intended to leave the Philippines, and even if he does,
plaintiff can not be prejudiced thereby because his claims are against a corporation which
has sufficient funds and property to satisfy his claim; and
• that the money being garnished belongs to the K.O. Glass Corporation Co., Inc. and
not to defendant Kenneth O. Glass.
 Judge denied the motion and ordered the Philippine Geothermal, Inc. to deliver and
deposit with the Clerk of Court the amount of P37,190.00 immediately upon receipt of the
order which amount shall remain so deposited to await the judgment to be rendered in the
case.
 On January 26, 1978, the defendants therein filed a supplementary motion to
discharge and/or dissolve the writ of preliminary attachment upon the ground that the
affidavit filed in support of the motion for preliminary attachment was not sufficient or
wanting in law for the reason that:
• (1) the affidavit did not state that the amount of plaintiff's claim was above all legal
set-offs or counterclaims, as required by Sec. 3, Rule 57 of the Revised Rules of Court;
• (2) the affidavit did not state that there is no other sufficient security for the claim
sought to be recovered by the action as also required by said Sec. 3; and
• (3) the affidavit did not specify any of the grounds enumerated in Sec. 1 of Rule 57,
ISSUE:
 WON the issuance of the writ of preliminary attachment proper
HELD: NO
 The respondent Judge gravely abused his discretion in issuing the writ of preliminary
attachment and in not ordering the release of the money which had been deposited with the
Clerk of Court
 There being no showing, much less an allegation, that the defendants are about to
depart from the Philippines with intent to defraud their creditor, or that they are non-
resident aliens, the attachment of their properties is not justified.
 Affidavit of plaintiff failed to allege the requisites prescribed for the issuance of a
writ of preliminary attachment, which renders the writ of preliminary attachment issued
against the property of the defendant fatally defective,
 and the judge issuing it is deemed to have acted in excess of his jurisdiction property the possession of which he is entitled to recover, is as much as
the sum for which the order is garanted above all legal counterclaims.
Sec. 1. Grounds upon which attachment may issue. -A plaintiff or any proper party may, at
the commencement of the action or at any time thereafter, have the property of the adverse 2. Bond
party attached as security for the satisfaction of any judgment that may be recovered in the
following cases: chanrobles

(a) In an action for the recovery of money or damages on a cause of action arising from
contract, express or implied, against a party who is about to depart from the Philippines with
intent to defraud his creditor; chanrobles virtual law library

(b) In an action for money or property embezzled or fraudulently misapplied or converted to

his own use by a public officer, or an officer of a corporation, or an attorney, factor, broker,
agent, or clerk, in the course of his employment as such, or by any other person in a
fiduciary capacity, or for a willful violation of duty; chanrobles virtual law library

(c) In an action to recover the possession of personal property unjustly detained, when the
property, or any part thereof, has been concealed, removed, or disposed of to prevent its
being found or taken by the applicant or an officer; chanrobles virtual law library

(d) In an action against the party who has been guilty of a fraud in contracting the debt or
incurring the obligation upon which the action is brought, or in concealing or disposing of
the property for the taking, detention or conversion of which the action is brought;
chanrobles virtual law library

(e) In an action against a party who has removed or disposed of his property, or is about to
do so, with intent to defraud his creditors; chanrobles virtual law library

(f) In an action against a party who resides out of the Philippines, or on whom summons may
be served by publication.

Requirements for issuance of writ of preliminary attachment:

1. Affidavit of the applicant, or some other person who personally knows the facts, showing
that:

a. sufficient casue of action exists

b. the case is one of those mentioned in Section 1, Rule 57

c. there is no other sufficient security for the claim sought to be enforced by the
action, and that the amount due the applicant, or the value of the