Rule 57 Preliminary Attachment
Respondent Peter Ong (Ong) instituted with the
1. [G.R. No. 173333. August 13, 2008.]
LUCIA MAGALING, PARALUMAN
R. MAGALING, MARCELINA MAGALING-
TABLADA, and BENITO R. MAGALING (Heirs
of the late Reynaldo Magaling) vs.
PETER ONG (Justiniano)
FACTS:
1. Defendants Sps. Reynaldo Magaling and
Lucila Magaling are the controlling
stockholders/owners of Thermo (sic) Loans
and Credit Corp. and had used the corporation
as mere alter ego or adjunct to evade the
payment of valid obligation;
2. On or about December 1994, defendant
Reynaldo Magaling, (sic) approached plaintiff
in his store at Lipa City and induced him to
lend him money and/or his company
Thermo (sic) Loans and Credit Corp. with
undertaking to pay interest at the rate of two
and a half (2 1/2%) percent per month.
3. Based on the assurance and representation
of Reynaldo Magaling, Peter Ong extended
loan to defendants. As of September 1997, the
principal loan extended to defendants stands
at P350,000.00. The interest thereon
computed at 2 1/2% per month is P8,750.00
per month;
4. In acknowledgment of the loan, on or about
September 1997, defendants issued and
tendered to plaintiff series of postdated checks
which were issued for payment of interest and
principal loan of P350,000.00. However, only
check nos. 473400 and 473401 were cleared
by the bank. Check no. 473402 was likewise
dishonored but it was subsequently replaced
with cash . . .;
5. Despite demands, oral and written,
defendants Sps. Reynaldo and
Lucila Magaling and/or Thermo (sic) Loans
and Credit Corp. unjustifiably and illegally
failed, refused and neglected and still fail,
refuse and neglect to pay to the prejudice and
damage of plaintiff. As of June 30, 1998,
defendants' obligation stands at P389,043.96
inclusive of interest;
I. RTC of Lipa City, Batangas:
1.
RTC a Complaint for the collection of the sum of
P389,000.00, with interest, attorney's fees and costs
of suit, with prayer for issuance of a writ of
preliminary attachment against the spouses
Reynaldo Magaling and
Lucila Magaling (Spouses Magaling) and Termo
Loans & Credit Corporation (Termo Loans).
The Complaint alleged that:
Because of the failure of Termo Loans
to pay its outstanding obligation despite
demand, Ong filed the above-mentioned
complaint praying that Spouses Magaling and
Termo Loans be ordered to pay, jointly and
severally, the principal amount of
P389,000.00, plus interest, attorney's fees and
costs of suit. In addition to the preceding
entreaty, Ong asked for the issuance of the
writ of preliminary attachment pursuant to
Section 1 (d), Rule 57 of the Rules of Court,
as amended.
2. On 7 October 1998, acting on Ong's prayer for the
issuance of a writ of preliminary attachment
grounded on the allegation that
Spouses Magaling "were guilty of fraud in
contracting the obligation subject of the complaint for
sum of money"; and finding the same to be
impressed with merit, the RTC issued
an Order directing the issuance of the writ prayed
for upon the filing of a bond in the amount of
P390,000.00.
3. In their defense, Spouses Magaling alleged in
their Answer with Counterclaim dated 12 November
1998, among others, that:
The alleged checks appear to have
been issued by Termo Loans as a
corporation and answering
defendants are not even signatories
thereto. Furthermore, the
Promissory Note . . . was issued by
Termo Loans and not by defendants
in their individual capacity.
4. For its part, Termo Loans failed to file an Answer;
thus, upon Ong's motion, the RTC declared said
corporation in default and allowed Ong to present
evidence ex parte.
5. Pursuant to the writ of preliminary attachment
earlier issued, and evidenced by the Sheriff's
Return dated 27 November 1998, the Sheriff of
RTC, Br. 13 of Lipa City, caused the attachment of
two (2) parcels of land covered by Transfer
Certificates of Title No. T-109347 and No. T-75559,
both in the names of the Spouses Magaling.
6. The Spouses Magaling expectedly moved for the
reconsideration of the 7 October 1998 Order of the
RTC granting the writ of preliminary attachment.
7. In an Order dated 19 February 1999, the RTC
found that Spouses Magaling's Motion to Discharge
Attachment was impressed with merit based on the
following reasons:
FIRSTLY, it appears that
the obligation was incurred by
Termo Loans and Credit
Corporation . . . . It is therefore a
corporate liability and not the
personal obligation of herein
movants. As correctly stated by the
movants, a corporation has a
personality separate and distinct
from that of the stockholders and
officers.
SECONDLY, the checks
which bounced do not bear the
signatures of herein movants. It is
indeed implausible that movants will
give assurances concerning checks
they did not sign.
THIRDLY, the obligation
appears to have been incurred in
1994 . . . . "Fraud" was alleged in
connection with the checks that
bounced, and which appear to have
been issued only in 1998 by way of
renewal of plaintiff's money
placement. It appears therefore that
if there was indeed fraud, the same
was not committed simultaneously
with the inception of the obligation.
8. On 23 June 1999, the RTC promulgated the first
of two decisions in this case. Ruling in favor of Ong,
and against Termo Loans, the dispositive portion
reads:
On 11 August 1999, Ong filed a motion for
execution of the above, which the RTC granted on
18 October 1999. The Writ of Execution was
subsequently issued by the RTC on 1 March 2000.
On 26 April 2000, the Sheriff's Return was filed
before the RTC manifesting that the Writ of
Execution earlier issued was being returned
unsatisfied in view of the fact that Termo Loans had
ceased to exist or had been dissolved.
9. In a parallel development, trial on the merits
concerning Ong's cause of action against the
Spouses Magaling ensued.
10. On 5 February 2001, in complete contrast to its
first decision, the RTC promulgated its second
decision holding the Spouses Magaling free and
clear of any obligation or liability with respect to the
sum of money claimed by Ong.
The fallo of the foregoing decision thus
states:
WHEREFORE, foregoing
premises considered, the instant
Complaint against defendants-
spouses Magaling is hereby
DISMISSED for lack of merit.
II. Court of Appeals:
1. Ong appealed the instant case to the Court of
Appeals.
2. In a Decision dated 31 August 2005, the appellate
court reversed and set aside the ruling of the
RTC, viz.:
WHEREFORE, the
foregoing considered, the instant
appeal is hereby GRANTED. The
assailed decision is REVERSED
and SET ASIDE and a new one
entered declaring appellee
spouses Magaling jointly and
severally liable to appellant
Peter Ong for the corporate
obligation of Thermo (sic) Loans
adjudged in the decision of the trial
court dated 23 June 1999.
The Court of Appeals, in reversing the 5
February 2001 Decision of the RTC, found that the
general rule that corporate officers cannot be held
personally liable for corporate debt when they act in
good faith and within the scope of their authority in
executing a contract for and in behalf of the
corporation, cannot apply to the spouses Magaling.
The Court of Appeals pierced the veil of corporate
fiction and held the spouses Magaling solidarily
liable with Termo Loans for the corporate obligations
of the latter since it found that
Reynaldo Magaling was grossly negligent in
managing the affairs of the said corporation.
 3. The Spouses Magaling moved for the
reconsideration of the aforequoted decision. But not
to be outdone, Ong likewise filed a motion for
reconsideration, albeit partial, that is, insofar as the
issue of the propriety of the discharge of the writ of
preliminary attachment was concerned.
4. The Spouses Magaling's motion for
reconsideration was denied by the Court of Appeals
in its Amended Decision dated 28 June 2006.
Deciding affirmatively on Ong's propositions, the
Court of Appeals explained in the same Amended
Decision that:
With respect to appellant's
prayer, he invited Our attention to
his assignment of error in his
Appellant's Brief where he sought
the nullification of the Order of the
trial court discharging the writ of
attachment. He argued that the said
Order granting such discharge had
the effect of prejudging the merits of
the case at a time when
Thermo (sic) Loans and Credit
Corp. had not even filed its answer
to the complaint. Indeed, We find
that such discharge, even before the
issues were joined, prematurely
adjudicated the merits of the case
on the lack of personal liability of
appellees, and without the latter
even posting a counter bond.
Therefore, as prayed for by
appellant, the discharge of
attachment is declared illegal and
the writ of attachment is declared
effective and subsisting. CS
And the dispositive part of the Amended
Decision provides:
WHEREFORE, the
foregoing considered, the partial
motion for reconsideration of
appellant is GRANTED.
Accordingly, the Order discharging
the writ of attachment is SET ASIDE
and the Writ of Attachment is hereby
declared effective and subsisting.
Appellees' motion for
reconsideration is DENIED.
III. Supreme Court:
1. Petitioners filed a petition for review on certiorari
under Rule 45.
ISSUE:
1. THE COURT OF APPEALS ACTED WITH
GRAVE ABUSE OF DISCRETION AND IN
EXCESS OF JURISDICTION IN RELYING
ON A GROUND RAISED ONLY FOR THE
FIRST TIME ON APPEAL, TO MAKE
REYNALDO MAGALING PERSONALLY
LIABLE FOR CORPORATE LIABILITY; and
2. THE COURT OF APPEALS ACTED WITH
GRAVE ABUSE OF DISCRETION AND IN
EXCESS OF JURISDICTION IN
REINSTATING THE PRELIMINARY
ATTACHMENT.
Held:
The petition is not meritorious.
1. It is basic that a corporation is a juridical entity with
legal personality separate and distinct from those
acting for and in its behalf and, in general, from the
people comprising it. The general rule is that
obligations incurred by the corporation, acting through
its directors, officers and employees, are its sole
liabilities, and vice versa.
In making the Spouses Magaling co-defendants of
Termo Loans, Ong alleged in his Complaint for Sum of
Money filed with the RTC that the spouses
ReynaldoMagaling and Lucia Magaling were the
controlling stockholders and/or owners of Termo
Loans, and that they had used the corporation to
evade the payment of a valid obligation. The appellate
court eventually found the Spouses Magaling equally
liable with Termo Loans for the sum of money sought
to be collected by Ong. SD
HAEC
As explained above, to hold a director, a trustee or an
officer personally liable for the debts of the corporation
and, thus, pierce the veil of corporate fiction, bad faith
or gross negligence by the director, trustee or officer in
directing the corporate affairs must be established
clearly and convincingly. Bad faith is a question of fact
and is evidentiary. Bad faith does not connote bad
judgment or negligence. It imports a dishonest
purpose or some moral obliquity and conscious
wrongdoing. It means breach of a known duty through
some ill motive or interest. It partakes of the nature of
fraud.
In order to pierce the veil of corporate fiction, for
reasons of negligence by the director, trustee or officer
in the conduct of the transactions of the corporation,
such negligence must be gross. Gross negligence is
one that is characterized by the want of even slight
care, acting or omitting to act in a situation where there
is a duty to act, not inadvertently but willfully and
intentionally with a conscious indifference to
consequences insofar as other persons may be
affected; and must be established by clear and
convincing evidence. Parenthetically, gross or willful
negligence could amount to bad faith.
In the case at bar, in their Memorandum filed before
the RTC, the Spouses Magaling argued that
"the Amended Complaint did not allege that
Reynaldo Magaling was guilty of gross negligence or
bad faith in directing the affairs of the corporation"; and
that respondent Ong was not able to adduce evidence
to offset the effect of the particular allegation. Hence,
they insist that it was unfair for the appellate court to
conclude that Reynaldo Magaling failed to exercise the
necessary diligence in running Termo Loans.
We disagree.
Petitioners' argument is that Ong failed to actually
allege in the complaint Reynaldo Magaling's gross
negligence in running Termo Loans as basis for
making the subject sum of money a personal liability of
Reynaldo. For them, it is, thus, too late in the day to
raise the alleged gross negligence of Termo Loans'
President, ReynaldoMagaling, as this matter has not
been pleaded before the RTC. Or simply put, issues
raised for the first time on appeal and not raised timely
in the proceedings in the lower court are barred for
being violative of basic due process.
Generally, laws, theories, issues and arguments not
adequately brought to the attention of the lower court
need not be, and ordinarily will not be, considered by a
reviewing court, as they cannot be raised for the first
time on appeal and, as such, are deemed to have
been waived. Basic consideration of due process
impels this rule. In the case at bar, however, the issue
respecting Reynaldo Magaling's gross negligence was
seasonably raised in the proceedings before the RTC.
The testimonial evidence elicited from
Reynaldo Magaling himself during his cross-
examination in the RTC bears out his wanton
disregard of the transactions of Termo Loans,
particularly in consideration of the fact that he was the
latter's President.
(To summarize this issue, Magaling illicited Gross
negligence because during his cross-examination,
most of his answers to the adverse counsel’s
questions were “I don’t know”. The Questions that
were asked to Magaling focused on the business
aspect of the company. Magaling was the President of
Termo Loans at the time. As President, he should’ve
known the loans that his company transacted and
should’ve kept his financial records. Magaling was a
seasoned businessman, in fact, he had MULTIPLE
loaning companies that were not insolvent.)
2. On the propriety of the RTC's discharge of the
preliminary attachment, we hew to the provisions of
the law and jurisprudence.
A writ of preliminary attachment is a provisional
remedy by virtue of which a plaintiff or other proper
party may, at the commencement of the action or at
any time thereafter, have the property of the adverse
party taken into the custody of the court as security for
the satisfaction of the judgment that may be
recovered. The chief purpose of the remedy of
attachment is to secure a contingent lien on
defendant's property until plaintiff can, by appropriate
proceedings, obtain a judgment and have such
property applied to its satisfaction, or to make some
provision for unsecured debts in cases where the
means of satisfaction thereof are liable to be removed
beyond the jurisdiction, or improperly disposed of or
concealed, or otherwise placed beyond the reach of
creditors. SICD
For the provisional remedy to issue, Sec. 1,
Rule 57 of the Rules of Court, as amended, provides
that:
SECTION. 1. Grounds upon
which attachment may issue. — At
the commencement of the action or
at any time before entry of
judgment, a plaintiff or any proper
party may have the property of the
adverse party attached as security
for the satisfaction of any judgment
that may be recovered in the
following cases:
(a) In an action for the
recovery of a specified amount of
money or damages, other than
moral and exemplary, on a cause of
action arising from law, contract,
quasi-contract, delict or quasi-delict
against a party who is about to
 depart from the Philippines with
intent to defraud his creditors;
(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;
(c) In an action to recover
possession of property unjustly or
fraudulently taken, detained or
converted, 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 authorized
person;
(d) In an action against a party
who has been guilty of a fraud in
contracting the debt or incurring the
obligation upon which the action is
brought, or in the performance
thereof; EDCTI
(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; or
(f) In an action against a party who
does not reside and is not found in the
Philippines, or on whom summons
may be served by publication.
Once the writ of preliminary attachment is
issued, the same rule provides for two ways by
which it can be dissolved or discharged.
First, the writ of preliminary attachment may
be discharged upon a security given, i.e., a counter-
bond, viz.:
SEC. 12. Discharge of attachment
upon giving counter-bound. — After a
writ of attachment has been enforced,
the party whose property has been
attached, or the person appearing on
his behalf, may move for the
discharge of the attachment wholly or
in part on the security given. The
court shall, after due notice and
hearing, order the discharge of the
attachment if the movant makes a
cash deposit, or files a counter-
bond executed to the attaching
party with the clerk of the court
where the application is made, in
an amount equal to that fixed by
the court in the order of
attachment, exclusive of costs. But
if the attachment is sought to be
discharged with respect to a particular
property, the counter-bond shall be
equal to the value of that property as
determined by the court. In either
case, the cash deposit or the counter-
bond shall secure the payment of any
judgment that the attaching party may
recover in the action. A notice of the
deposit shall forthwith be served on
the attaching party. Upon the
discharge of an attachment in
accordance with the provisions of this
section, the property attached, or the
proceeds of any sale thereof, shall be
delivered to the party making the
deposit or giving the counter-bond, or
to the person appearing on his behalf,
the deposit or counter-bond aforesaid
standing in place of the property so
released. Should such counter-bond
for any reason be found to be, or
become insufficient, and the party
furnishing the same fail to file an
additional counter-bond, the attaching
party may apply for a new order of
attachment. (Emphasis supplied.)
Second, said provisional remedy must be
shown to have been irregularly or improperly issued,
to wit:
SEC. 13. Discharge of attachment on
other grounds. — The party whose
property has been ordered attached
may file a motion with the court in
which the action is pending, before or
after levy or even after the release of
the attached property, for an order to
set aside or discharge the
attachment on the ground that the
same was improperly or irregularly
issued or enforced, or that the
 bond is insufficient. If the
attachment is excessive, the
discharge shall be limited to the
excess. If the motion be made on
affidavits on the part of the movant but
not otherwise, the attaching party may
oppose the motion by counter-
affidavits or other evidence in addition
to that on which the attachment was
made. After due notice and hearing,
the court shall order the setting
aside or the corresponding
discharge of the attachment if it
appears that it was improperly or
irregularly issued or enforced, or
that the bond is insufficient, or that
the attachment is excessive, and
the defect is not cured forthwith.
In the case at bar, there is no question that
no counter bond was given by the
Spouses Magaling for the discharge or dissolution of
the writ of preliminary attachment, as their position is
that the provisional remedy was irregularly or
improperly issued. They sought the discharge or
dissolution of the writ based on Sec. 13, Rule 57 of
the Rules of Court, as amended. Under said
provision, when the attachment is challenged for
having been illegally or improperly issued, there
must be a hearing, with the burden of proof to
sustain the writ being on the attaching creditor. That
hearing embraces not only the right to present
evidence but also a reasonable opportunity to know
the claims of the opposing parties and meet them. It
means a fair and open hearing. Herein, there is no
showing that a hearing was conducted prior to the
issuance of the 19 February 1999 Order of the RTC
discharging or dissolving the writ of preliminary
attachment. That Ong was able to file an opposition
to the motion of the SpousesMagaling to discharge
the preliminary attachment is of no moment. The
written opposition filed is not equivalent to a hearing.
The absence of a hearing before the RTC bars the
discharge of the writ of preliminary attachment for
the simple reason that the discharge or dissolution
of said writ, whether under Sec. 12 or Sec. 13 of
Rule 57 of the Rules of Court, as amended, shall be
granted only "after due notice and hearing".
WHEREFORE, premises considered, the
instant petition is DENIED. Accordingly, the assailed
31 August 2005 Decision and 28 June
2006 Amended Decision, both of the Court of
Appeals in CA-G.R. CV No. 70954, are hereby
AFFIRMED. Costs against petitioners, heirs of
Reynaldo Magaling.
2. Davao Light & Power Co. vs CA (1991) Nieto
I Established Facts
Davao Light & Power Co., Inc. (hereafter, simply Davao
Light) filed a verified complaint for recovery of a sum of
money and damages against Queensland Hotel, etc.
and Teodorico Adarna (docketed as Civil Case No.
19513-89). The complaint contained an ex parte
application for a writ of preliminary attachment. On May
3, 1989 Judge Nartatez, to whose branch the case
was assigned by raffle, issued an Order granting the
ex parte application and fixing the attachment bond
at P4,600,513.37.
On May 11, 1989 the attachment bond having been
submitted by Davao Light, the writ of attachment issued.
On May 12, 1989, the summons and a copy of the
complaint, as well as the writ of attachment and a copy
of the attachment bond, were served on defendants
Queensland and Adarna; and pursuant to the writ, the
sheriff seized properties belonging to the latter.
On September 6, 1989, defendants Queensland
and Adarna filed a motion to discharge the
attachment for lack of jurisdiction to issue the same
because at the time the order of attachment was
promulgated (May 3, 1989) and the attachment writ
issued (May 11, 1989), the Trial Court had not yet
acquired jurisdiction over the cause and over the
persons of the defendants.
On September 14, 1989, Davao Light filed an
opposition to the motion to discharge attachment. the
Trial Court issued an Order denying the motion to
discharge.
II CA
Queensland and Adarna file a special civil action of
certiorari before the Court of Appeals.
The CA Annulled the order of the trial court denying
the motion to discharge.
-CA stated that while it is true that a prayer for
the issuance of a writ of preliminary attachment may be
included m the complaint, as is usually done, it is
likewise true that the Court does not acquire jurisdiction
over the person of the defendant until he is duly
summoned or voluntarily appears, and adding the
phrase that it be issued "ex parte" does not confer said
jurisdiction before actual summons had been made, nor
retroact jurisdiction upon summons being made.
Hence, this petition for review.
ISSUE: Whether or not a writ of preliminary attachment
may issue ex parte against a defendant before
acquisition of jurisdiction of the latter's person by service
of summons or his voluntary submission to the Court's
authority.
III SC
YES. It is incorrect to theorize that after an action or
proceeding has been commenced and jurisdiction over
the person of the plaintiff has been vested in the court,
but before the acquisition of jurisdiction over the person
of the defendant (either by service of summons or his
voluntary submission to the court's authority), nothing
can be validly done by the plaintiff or the court.
The events that follow the filing of the complaint as a
matter of routine are well known. After the complaint is
filed, summons issues to the defendant, the summons is
then transmitted to the sheriff, and finally, service of the
summons is effected on the defendant in any of the
ways authorized by the Rules of Court. There is thus
ordinarily some appreciable interval of time between the
day of the filing of the complaint and the day of service
of summons of the defendant. During this period,
different acts may be done by the plaintiff or by the
Court, which are unquestionable validity and propriety.
Among these, for example, are the appointment of a
guardian ad litem, the grant of authority to the plaintiff to
prosecute the suit as a pauper litigant, the amendment
of the complaint by the plaintiff as a matter of right
without leave of court, authorization by the Court of
service of summons by publication, the dismissal of the
action by the plaintiff on mere notice.
This, too, is true with regard to the provisional
remedies of preliminary attachment, preliminary
injunction, receivership or replevin. They may be
validly and properly applied for and granted even
before the defendant is summoned or is heard from.
A preliminary attachment may be defined,
paraphrasing the Rules of Court, as the provisional
remedy in virtue of which a plaintiff or other party
may, at the commencement of the action or at any
time thereafter, have the property of the adverse
party taken into the custody of the court as security
for the satisfaction of any judgment that may be
recovered. It is a remedy which is purely statutory in
respect of which the law requires a strict construction of
the provisions granting it. Withal no principle, statutory
or jurisprudential, prohibits its issuance by any court
before acquisition of jurisdiction over the person of the
defendant.
Rule 57 in fact speaks of the grant of the remedy "at the
commencement of the action or at any time thereafter."
The phase, "at the commencement of the action,"
obviously refers to the date of the filing of the complaint
— which, as above pointed out, is the date that marks
"the commencement of the action;" and the reference
plainly is to a time before summons is served on the
defendant, or even before summons issues. What the
rule is saying quite clearly is that after an action is
properly commenced — by the filing of the
complaint and the payment of all requisite docket
and other fees — the plaintiff may apply for and
obtain a writ of preliminary attachment upon
fulfillment of the pertinent requisites laid down by
law, and that he may do so at any time, either before
or after service of summons on the defendant. And
this indeed, has been the immemorial practice
sanctioned by the courts: for the plaintiff or other proper
party to incorporate the application for attachment in the
complaint or other appropriate pleading (counter-claim,
cross-claim, third-party claim) and for the Trial Court to
issue the writ ex-parte at the commencement of the
action if it finds the application otherwise sufficient in
form and substance.
It goes without saying that whatever be the acts done by
the Court prior to the acquisition of jurisdiction over the
person of defendant, as above indicated — issuance of
summons, order of attachment and writ of attachment
(and/or appointments of guardian ad litem, or grant of
authority to the plaintiff to prosecute the suit as a pauper
litigant, or amendment of the complaint by the plaintiff as
a matter of right without leave of court — and however
valid and proper they might otherwise be, these do not
and cannot bind and affect the defendant until and
unless jurisdiction over his person is eventually
obtained by the court, either by service on him of
summons or other coercive process or his voluntary
submission to the court's authority. Hence, when the
sheriff or other proper officer commences
implementation of the writ of attachment, it is
essential that he serve on the defendant not only a
copy of the applicant's affidavit and attachment
bond, and of the order of attachment, as explicitly
required by Section 5 of Rule 57, but also the
summons addressed to said defendant as well as a
copy of the complaint and order for appointment of
guardian ad litem, if any, as also explicitly directed
by Section 3, Rule 14 of the Rules of Court. Service of
all such documents is indispensable not only for the
acquisition of jurisdiction over the person of the
defendant, but also upon considerations of fairness, to
apprise the defendant of the complaint against him, of
the issuance of a writ of preliminary attachment and the
grounds therefor and thus accord him the opportunity to
prevent attachment of his property by the posting of a
counterbond in an amount equal to the plaintiff's claim in
the complaint pursuant to Section 5 (or Section 12), Rule
57, or dissolving it by causing dismissal of the complaint
itself on any of the grounds set forth in Rule 16, or
demonstrating the insufficiency of the applicant's
affidavit or bond in accordance with Section 13, Rule 57.
The Court reiterates and reaffirms the proposition
that writs of attachment may properly issue ex parte
provided that the Court is satisfied that the relevant
requisites therefor have been fulfilled by the
applicant, although it may, in its discretion, require
prior hearing on the application with notice to the
defendant; but that levy on property pursuant to the
writ thus issued may not be validly effected unless
preceded, or contemporaneously accompanied, by
service on the defendant of summons, a copy of the
complaint (and of the appointment of guardian ad
litem, if any), the application for attachment (if not
incorporated in but submitted separately from the
complaint), the order of attachment, and the
plaintiff's attachment bond.
3. Olib vs Pastoral (1990) Pracuelles
FACTS: On November 13, 1981, Corazon M. Navia
sued the spouses Oscar and Roberta Olib, petitioner
herein, for dissolution of their partnership and other
reliefs, with a prayer for the issuance of a writ of a
preliminary attachment.1 The it was granted on
November 10, 1983, resulting in the attachment of six
parcels of land belonging to the petitioners, along with
stocks of merchandise in their bodega.2 The writ was
amended on December 14, 1983, to release the
merchandise. Two years later, on May 16, 1985, the
petitioners filed a motion to discharge the preliminary
attachment on the ground that the attachment bond
executed for one year from November 1983 had already
lapsed. 3 This was accompanied by a certification from
the bonding company that the bond had not been
renewed and the corresponding payment for extension
had not been made.
On February 25,1986, Judge Miguel S. Rallos of the
Regional Trial Court of Agusan del Norte and Butuan
City rendered judgment for the petitioners and
sentenced the private respondent to pay them actual,
moral and exemplary damages, plus attorney's fees and
litigation expenses. 5 On April 16, 1986, Navia perfected
her appeal from the challenged judgment, and the
records of the case were elevated to the Court of
Appeals on January 25, 1988.
RTC
Although the trial court found in the text of the decision
that the private respondent was not entitled to the
issuance of the writ of preliminary attachment, no
mention was made of the said writ in the dispositive
portion. As a result, the annotation of the preliminary
attachment on the certificates/titles of the attached lands
was maintained and could not be canceled.
On July 20, 1987, the petitioners moved for the
discharge of the writ of preliminary attachment by the
respondent court on the basis of the judgment in their
favor. Navia filed an opposition, contending that as she
had perfected her appeal to the Court of Appeals, the
trial court no longer had any jurisdiction over the case.
The private respondent cited Rule 41, Section 9, of the
Rules of Court, reading as follows:
When appeal deemed perfected; effect
thereof. — If the notice of appeal, the
appeal bond and the record on appeal
have been filed in due time, the appeal
is deemed perfected upon the approval
of the record on appeal and of the
appeal bond other than a cash bond,
and thereafter the trial court loses its
jurisdiction over the case, except to
issue orders for the protection and
preservation of the rights of the parties
which do not involve any matter litigated
by the appeal, to approve compromises
offered by the parties prior to the
transmittal of the record on appeal to the
appellate court, and to permit the
prosecution of pauper's appeals.
On August 24, 1987, Judge Edelwina C. Pastoral, who
had succeeded Judge Rallos denied the motion on the
ground invoked in the opposition and declared:
Settled is the rule that the trial court
loses its jurisdiction over the record and
over the subject of the case once an
appeal in the case has been perfected.
The exception to this rule refers to the
orders of the Court to protect and
preserve the rights of the parties which
do not involve any matter litigated by
 appeal (Section 9, Rule 41 of the Rules
of Court). The writ of preliminary
attachment was earlier granted as a
security for the satisfaction of the
judgment, the latter being now the
subject of the appeal. To grant
defendant's motion at this juncture is to
disturb and not to preserve the rights of
the parties. It is the stand of this Court
that the status quo of the parties shall
be maintained for it cannot predetermine
the posture which the appellate court
will adopt, either to affirm, modify or
reverse the questioned decision of this
Court.
They argued that if the court a quo could issue a writ of
attachment after the appeal had been perfected, then it
could a fortiori discharge such a writ, especially where,
as in the case at bar, the movants were the prevailing
parties.
Later, somewhat inconsistently, the petitioners also
contended that there was really no more need for an
order discharging the attachment as this followed by
operation of Rule 57, Section 19, of the Rules of Court.
Such discharge was the immediate and automatic effect
of any judgment in favor of the party whose property had
been attached, thus:
SEC. 19. Disposition of attached
property where judgment is for party
against whom attachment is issued. — If
judgment be rendered against the
attaching creditor, all the proceeds of
sales and money collected or received
by the sheriff, clerk, or other proper
officer under the order of attachment,
and all property attached remaining in
any such officer's hands, shall be
delivered to the party against whom
attachment was issued, and the order of
attachment discharged.
The motion having been denied, the petitioners sought
reconsideration a second time, insisting that (a) the
attachment had been automatically discharged under
Rule 57, Section 19; and (b) the attachment bond had
already lapsed for non-payment of the premiums. They
were rebuffed again. They then came before this Court,
contending that the respondent court committed grave
abuse of discretion in denying their motion.
NOTE: This case could have been remanded to the
Court of Appeals, which has concurrent jurisdiction with
this Court in petitions for certiorari against the regional
trial courts under Rule 65 of the Rules of Court. We have
decided to retain and rule on it directly, however, so we
can emphasize the important doctrines we shall here
affirm
ISSUES:
1.) Whether the attachment had already been
discharged under Rule 57 sec. 19
2.) Whether the attachment bond had already lapsed for
non-payment of premiums
HELD:
1.) NO. We hold that it did not.
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 hive 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 case independent of the principal action
because the attachment was only an incident of such
action.
We held in Olsen v. Olsen:
The preliminary attachment is an
auxiliary remedy the granting of which
lies within the sound discretion of the
judge taking cognizance of the principal
case upon whose existence it depends.
The order of the judge denying a motion
for the annulment of a writ of preliminary
attachment, being of an incIdental or
interlocutory and auxiliary character,
cannot be the subject of an appeal
independently from the principal case,
because our procedural law now in force
authorizes an appeal only from a final
judgement which gives an end to the
litigation. (Section 143, Act 190; 3 C.J.,
549. par. 389.)
xxx xxx xxx
 While it is true that an order denying a
motion for the annulment of a
preliminary attachment is not subject to
review through an appeal independently
from the principal case, it is not
constituting a final order, yet when the
writ of preliminary attachment becomes
final by virtue of a final judgment
rendered in the principal case, saId writ
is subject to review jointly with the
judgment rendered in the principal case
through an ordinary appeal.
It is also worth noting, as an appropriate observation on
the impropriety of the remedy employed by the
petitioners in this case, that, in Jopillo v. Court of
Appeals, 11 this Court observed:
... even assuming that the trial court
committed an error in denying the
motion to discharge the writ of
attachment the error (if it is an error at
all) is an error in judgment which cannot
be corrected through the extraordinary
remedy of certiorari but by an ordinary
appeal at the proper time.
2.) NO. Coming now to the argument that the attachment
was automatically lifted because of the non-payment of
the premium on the attachment bond, the Court feels it is
time again to correct a common misimpression. The rule
is that the bond is not deemed extinguished by reason
alone of such non-payment. The Court made this clear
in Luzon Surety Co. v. Quebrar, where it declared:
To allow the defendants-appellants to
evade their liability under the Indemnity
Agreements by non-payment of the
premiums would ultimately lead to giving
the administrator the power to diminish
or reduce and altogether nullify his
liability under the Administrator's Bonds.
As already stated, this is contrary to the
intent and purpose of the law in
provIding for the administrator's bonds
for the protection of the creditors, heirs,
legatees, and the estate.
xxx xxx xxx
Lastly, in Manila Surety and FIdelity Co.,
Inc. v. Villarama (107 Phil. 891), it was
held that "the one-year period
mentioned therein refers not to the
duration or lifetime of the bond, but
merely to the payment of premiums,
and, consequently, does not affect at all
the effectivity or efficacy of such bond.
But such non-payment alone of the
premiums for the succeeding years ...
does not necessarily extinguish or
terminate the effectivity of the counter-
bond in the absence of an express
stipulation in the contract making such
non- payment of premiums a cause for
the extinguishment or termination of the
undertaking.
These principles are applicable to other kinds of bonds,
including the attachment bond in the case at bar. On this
bond, the respondent court correctly observed:
... a cursory examination of the bond for
levy on attachment executed between
herein plaintiff Corazon M. Navia and
the branch manager of the First
Continental Assurance ' Co., Inc. (Rollo,
pp. 347-348) discloses no stipulation
that the surety company will terminate
the bond for non-payment of the
premium. This minor matter on non-
payment of premiums of the bond
pertains to the contracting parties to
resolve.
Finally, on the correct interpretation of Rule 57, Section
19, of the Rules of Court, we hold that the order of
attachment is considered discharged only where the
judgment has already become final and executory and
not when it is still on appeal. The obvious reason is that,
except in a few specified cases, execution pending
appeal is not allowed.
4. LOURDES A. VALMONTE and ALFREDO D.
VALMONTE, petitioners, vs. THE
HONORABLE COURT OF APPEALS, THIRD
DIVISION and ROSITA DIMALANTA,
respondents. [G.R. No. 108538. January 22,
1996.] Religioso
I. FACTS
Petitioners Lourdes A. Valmonte and Alfredo D.
Valmonte are husband and wife. They are both residents
of U.S.A. Petitioner Alfredo D. Valmonte, who is a
member of the Philippine bar, however, practices his
profession in the Philippines, commuting for this purpose
between his residence in the state of Washington and
Manila, where he holds office at Ermita, Manila. Private
respondent Rosita Dimalanta, who is the sister of
petitioner Lourdes A. Valmonte, filed a complaint for
partition of real property and accounting of rentals
against petitioners Lourdes A. Valmonte and Alfredo
D. Valmonte before the Regional Trial Court of
Manila. In her Complaint, private respondent alleged
that, She is of legal age, a widow and is at present
Missouri, U.S.A., while the defendants are spouses, of
legal age and at present residents South Seattle,
Washington, U.S.A., but, for purposes of this complaint
may be served with summons at Gedisco Center, Unit
304, 1564 A. Mabini St., Ermita, Manila where defendant
Alfredo D. Valmonte as defendant Lourdes Arreola
Valmonte's spouse holds office and where he can be
found.
Apparently, the foregoing averments were made on the
basis of a letter previously sent by petitioner Lourdes A.
Valmonte to private respondent's counsel in which, in
regard to the partition of the property in question, she
referred private respondent's counsel to her husband as
the party to whom all communications intended for her
should be sent.
Service of summons was then made upon petitioner
Alfredo D. Valmonte, who at the time, was at his office in
Manila. Petitioner Alfredo D. Valmonte accepted the
summons, insofar as he was concerned, but refused to
accept the summons for his wife, Lourdes A. Valmonte,
on the ground that he was not authorized to accept the
process on her behalf. Accordingly the process server
left without leaving a copy of the summons and
complaint for petitioner Lourdes A. Valmonte.
Petitioner Alfredo D. Valmonte thereafter filed his
Answer with Counterclaim. Petitioner Lourdes A.
Valmonte, however, did not file her Answer. For this
reason private respondent moved to declare her in
default. Petitioner Alfredo D. Valmonte entered a special
appearance in behalf of his wife and opposed the private
respondent's motion.
II. RTC
The trial court, denied private respondent's motion to
declare petitioner Lourdes A. Valmonte in default.
III. Motion for reconsideration was filed
A motion for reconsideration was similarly denied
IV. PRIVATE RESPONDENT FILED A PETITION
FOR CERTIORARI, PROHIBITION AND
MANDAMUS WITH THE CA
Court of Appeals rendered a decision granting the
petition and declaring Lourdes A. Valmonte in default.
Court of Appeals stated that, Mrs. Valmonte clearly and
unequivocally directed the aforementioned counsel of
Dimalanta to address all communications (evidently
referring to her controversy with her sister Mrs.
Dimalanta over the Paco property, now the subject of the
instant case) to her lawyer who happens also to be her
husband. Such directive was made without any
qualification just as was her choice/designation of her
husband Atty. Valmonte as her lawyer likewise made
without any qualification or reservation. Any disclaimer
therefore on the part of Atty. Valmonte as to his being
his wife's attorney would appear to be feeble or trifling, if
not incredible. This view is bolstered by Atty. Valmonte's
subsequent alleged special appearance made on behalf
of his wife. Whereas Mrs. Valmonte had manifestly
authorized her husband to serve as her lawyer relative to
her dispute with her sister over the Paco property and to
receive all communications regarding the same and
subsequently to appear on her behalf by way of a so-
called special appearance, she would nonetheless now
insist that the same husband would nonetheless had
absolutely no authority to receive summons on her
behalf. In effect, she is asserting that representation by
her lawyer (who is also her husband) as far as the Paco
property controversy is concerned, should only be made
by him when such representation would be favorable to
her but not otherwise. It would obviously be inequitable
for this Court to allow private respondent Lourdes A.
Valmonte to hold that her husband has the authority to
represent her when an advantage is to be obtained by
her and to deny such authority when it would turn out to
be her disadvantage.
Also, Court of Appeals stated that, it would not do for CA
to overlook the fact that the disputed summons was
served not upon just an ordinary lawyer of private
respondent Lourdes A. Valmonte, but upon her lawyer
husband. But that is not all, the same lawyer/husband
happens to be also her co-defendant in the instant case
which involves real property which, according to her
lawyer/husband/co- defendant, belongs to the conjugal
partnership of the defendants (the spouses Valmonte). It
is highly inconceivable and certainly it would be contrary
to human nature for the lawyer/husband/co-defendant to
keep to himself the fact that they (the spouses
Valmonte) had been sued with regard to a property
which he claims to be conjugal. Parenthetically, there is
nothing in the records of the case before Us regarding
any manifestation by private respondent Lourdes A.
Valmonte about her lack of knowledge about the case
instituted against her and her lawyer/husband/co-
defendant by her sister Rosita.
V. Petition for review on certiorari to the SC
Petitioners assail the aforequoted decision, alleging
that the Court of Appeals erred (1) in refusing to
apply the provisions of Rule 14, § 17 of the Revised
Rules of Court and applying instead Rule 14, § 8
when the fact is that petitioner Lourdes A. Valmonte
 is a nonresident defendant; and (2) because even if
Rule 14, § 8 is the applicable provision, there was
no valid substituted service as there was no strict
compliance with the requirement by leaving a copy
of the summons and complaint with petitioner
Alfredo D. Valmonte. Private respondent, upon the
other hand, asserts that petitioners are invoking a
technicality and that strict adherence to the rules
would only result in a useless ceremony.
VI. ISSUE
Whether or not petitioner Lourdes A. Valmonte was
validly served with summons.
VII. SUPREME COURT’S RULING
The Court ruled that there was no valid service
of process on Lourdes A. Valmonte.
To provide perspective, it will be helpful to determine
first the nature of the action filed against petitioners
Lourdes A. Valmonte and Alfredo D. Valmonte by
private respondent, whether it is an action in
personam, in rem or quasi in rem. This is because
the rules on service of summons embodied in Rule
14 apply according to whether an action is one or
the other of these actions.
In an action in personam, personal service of
summons or, if this is not possible and he cannot be
personally served, substituted service, as provided
in Rule 14, § 7-8 2 is essential for the acquisition by
the court of jurisdiction over the person of a
defendant who does not voluntarily submit himself to
the authority of the court. If defendant cannot be
served with summons because he is temporarily
abroad, but otherwise he is a Philippine resident,
service of summons may, by leave of court, be made
by publication. Otherwise stated, a resident
defendant in an action in personam, who cannot be
personally served with summons, may be
summoned either by means of substituted service in
accordance with Rule 14, § 8 or by publication as
provided in § 17 and 18 of the same Rule.
In all of these cases, it should be noted, defendant
must be a resident of the Philippines, otherwise an
action in personam cannot be brought because
jurisdiction over his person is essential to make a
binding decision.
On the other hand, if the action is in rem or quasi in
rem, jurisdiction over the person of the defendant is
not essential for giving the court jurisdiction so long
as the court acquires jurisdiction over the res. If the
defendant is a nonresident and he is not found in the
country, summons may be served extraterritorially in
accordance with Rule 14, Section 17
In such cases, what gives the court jurisdiction
in an action in rem or quasi in rem is that it has
jurisdiction over the res, i.e. the personal status
of the plaintiff who is domiciled in the
Philippines or the property litigated or attached.
Service of summons in the manner provided in
Section 17 is not for the purpose of vesting it with
jurisdiction but for complying with the requirements
of fair play or due process, so that he will be
informed of the pendency of the action against him
and the possibility that property in the Philippines
belonging to him or in which he has an interest may
be subjected to a judgment in favor of the plaintiff
and he can thereby take steps to protect his interest
if he is so minded.
Applying the foregoing rules to the case at bar,
private respondent's action, which is for partition and
accounting under Rule 69, is in the nature of an
action quasi in rem. Such an action is essentially for
the purpose of affecting the defendant's interest in a
specific property and not to render a judgment
against him.
As petitioner Lourdes A. Valmonte is a nonresident
who is not found in the Philippines, service of
summons on her must be in accordance with Rule
14, §17. Such service, to be effective outside the
Philippines, must be made either (1) by personal
service; (2) by publication in a newspaper of general
circulation in such places and for such time as the
court may order, in which case a copy of the
summons and order of the court should be sent by
registered mail to the last known address of the
defendant; or (3) in any other manner which the
court may deem sufficient.
Since in the case at bar, the service of summons
upon petitioner Lourdes A. Valmonte was not done
by means of any of the first two modes, the question
is whether the service on her attorney, petitioner
Alfredo D. Valmonte, can be justified under the third
mode, namely, "in any . . . manner the court may
deem sufficient."
We hold it cannot. This mode of service, like the first
two, must be made outside the Philippines, such as
through the Philippine Embassy in the foreign
country where the defendant resides. Moreover,
 there are several reasons why the service of
summons on Atty. Alfredo D. Valmonte cannot be
considered a valid service of summons on petitioner
Lourdes A. Valmonte. In the first place, service of
summons on petitioner Alfredo D. Valmonte was not
made upon the order of the court as required by
Rule 14, § 17 and certainly was not a mode deemed
sufficient by the court which in fact refused to
consider the service to be valid and on that basis
declare petitioner Lourdes A. Valmonte in default for
her failure to file an answer.
In the second place, service in the attempted
manner on petitioner was not made upon prior leave
of the trial court as required also in Rule 14, § 17. As
provided in § 19, such leave must be applied for by
motion in writing, supported by affidavit of the
plaintiff or some person on his behalf and setting
forth the grounds for the application.
Finally, and most importantly, because there was no
order granting such leave, petitioner Lourdes A.
Valmonte was not given ample time to file her
Answer which, according to the rules, shall be not
less than sixty (60) days after notice. It must be
noted that the period to file an Answer in an action
against a resident defendant differs from the period
given in an action filed against a nonresident
defendant who is not found in the Philippines. In the
former, the period is fifteen (15) days from service of
summons, while in the latter, it is at least sixty (60)
days from notice.
Strict compliance with these requirements alone can
assure observance of due process. That is why in
one case, although the Court considered publication
in the Philippines of the summons (against the
contention that it should be made in the foreign state
where defendant was residing) sufficient,
nonetheless the service was considered insufficient
because no copy of the summons was sent to the
last known correct address in the Philippines.
5. Traders Royal Bank v IAC, G.R. No. L-66321,
October 31 1984 ACOSTA
I. Established Facts
Traders Royal Bank filed an action for recovery of sum
of money amounting to P2,382,258 in the RTC of Pasay
against REMCO Alcohol Distillery Inc. (REMCO).
Traders Royal Bank also obtained a writ of attachment
against the assets of REMCO.
Pursuant to the writ of attachment, Deputy Sheriff
Santiago levied 4,600 barrels of alcohol found in
Remco’s warehouse in Calumpit, Bulacan.
La Tondeña company, a creditor of Remco, filed a third
party claim with Deputy Sheriff Santiago where they
claimed ownership over the attached properties. In
addition, La Tondeña filed a complaint in intervention in
the case instituted by Traders Royal Bank against
Remco in the RTC of Pasay.
In the complaint in intervention, La Tondeña alleged it
loaned P3,000,000 to Remco which the latter failed to
pay.
II. RTC of Pasay
The RTC of Pasay initially allowed La Tondeña to
withdraw the attached properties from Remco’s
warehouse in Bulacan. However, the RTC of Pasay
reversed its order and then denied La Tondeña’s motion
to intervene.
Thereafter, La Tondeña instituted an action before the
RTC of Bulacan asserting its ownership over the
attached properties of Remco and praying for the
issuance of preliminary mandatory and prohibitory
injunction.
III. RTC of Malolos, Bulacan
The RTC of Malolos declared La Tondeña Inc. to be the
owner of the disputed alcohol, and granting the latter's
application for injunctive relief.
The Sheriff of Malolos, Victorino Evangelista, issued the
writ of preliminary injunction on the Pasay Deputy Sheriff
Santiago.
However, the RTC of Pasay, ordered Sheriff Santiago
enforce the writ of attachment and required La Tondeña
to explain and show cause why they should not be cited
for contempt for withdrawing or removing the attached
property belonging to Remco, from the latter's
warehouse at Calumpit, Bulacan
IV. Petition for Certiorari with IAC with application
for a writ of preliminary injunction and prayer
to annul the RTC Malolos order
Traders Royal Bank filed a petition with the IAC alleging
that the Judge of RTC Malolos committed grave abuse
of discretion.
 another court of the same rank or category, a power
The IAC dismissed the petition ruling that the Judge of which devolves upon the proper appellate court. The
Malolos RTC did not commit grave abuse of discretion. purpose of the rule is to avoid conflict of power between
different courts of coordinate jurisdiction and to bring
V. ISSUE: W.O.N an RTC (Malolos) can issue an about a harmonious and smooth functioning of their
injunction against property subject of a writ of proceedings.
attachment issued by another RTC (Pasay)
As in this case, intervention as a means of protecting the
VI. Ruling third-party claimant's right in an attachment proceeding
is not exclusive but cumulative and suppletory to the
Yes. right to bring an independent suit. The denial or
dismissal of a third-party claim to property levied upon
Remedy of a Third Party Claimant cannot operate to bar a subsequent independent action
Section 14, Rule 57 of the [old] Rules of Court provides: by the claimant to establish his right to the property even
if he failed to appeal from the order denying his original
“If property taken be claimed by any person other than third-party claim.
the party against whom attachment had been issued 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 such affidavit
upon the officer while the latter has possession of the
property, and a copy thereof upon the attaching creditor,
the officer shall not be bound to keep the property under
the attachment, unless the attaching creditor or his
agent, on demand of said officer, secures aim against
such claim by a bond in a sum not greater than the value
of the property attached. In case of disagreement as to
such value, the same shall be decided by the court
issuing the writ of attachment. The officer shall not be
liable for damages, for the taking or keeping of such
property, to any such third-party claimant, unless such a
claim is so made and the action upon the bond brought
within one hundred and twenty (120) days from the date
of the filing of said bond. But nothing herein contained
shall prevent such third person from vindicating his
claim to the property by proper action.”

The foregoing rule explicitly sets forth the remedy that

may be availed of by a person who claims to be the
owner of property levied upon by attachment is to
lodge a third- party claim with the sheriff, and if the
attaching creditor posts an indemnity bond in favor
of the sheriff, to file a separate and independent
action to vindicate his claim.

Judicial Interference

Generally, the rule that no court has the power to

interfere by injunction with the judgments or
decrees of a concurrent or coordinate jurisdiction
having equal power to grant the injunctive relief
sought by injunction, is applied in cases where no
third-party claimant is involved, in order to prevent
one court from nullifying the judgment or process of

Rule 58 Preliminary Injunction
1. Strategic Alliance Development Corporation
vs Star Infrastructure Development
Corporation
GR No 187872 April 2011 Cabel
Background: Yung case na decided ng SC nung
November 2010 is about the authority nung former
officers ng STRADEC na nagbenta ng shares nila ng
SIDC kay Wong. Trinansfer daw kasi ni Yujuico and
Sumbilla yung shares ng STRADEC sa SIDC kay Wong
kahit wala silang authority. Si Wong naman trinansfer
yung shares nay un sa CTCII. Yung CTCII siya yung
company na ginawa ng family ni Wong. Sabi ng court,
intracorporate dispute daw yun and may jurisdiction si
RTC as SCC na magtry nung case. Yung allegations
daw sa complaint is hindi civil in nature. Sabi rin ng SC
na mali yung CA na hindi grinant sa STRADEC yung
hinihingi nilang PMI to restrain (a) CTCII from further
exercising proprietary rights over the subject shares; (b)
SIDC and its officers from recognizing the transfer or
further transfers of the same; (c) the implementation of
the resolutions passed during the 20 July 2006 SIDC
stockholders special meeting; and (d) the SEC from
acting on any report submitted in respect thereto. A
provisional remedy which has, for its object, the
preservation of the status quo, preliminary injunction
may be resorted to by a party in order to preserve and
protect certain rights and interests during the pendency
of an action. By both law and jurisprudence, said
provisional writ may be issued upon the concurrence of
the following essential requisites, to wit: (1) that the
invasion of the right is material and substantial; (2) that
the right of complainant is clear and unmistakable; and,
(3) that there is an urgent and paramount necessity for
the writ to prevent serious damage.
STRADEC is undoubtedly possessed of clear and
unmistakable rights over the subject SIDC shares which
respondent Yujuico pledged in favor of respondent
Wong. Unless collectively restrained, the aforesaid acts
will completely divest STRADEC of its shares and
unfairly deprive it of participation in SIDC's corporate
affairs pending the determination of the validity of the
impugned transfers
Facts:
For resolution by the Court are the following motions and
incidents filed by the parties, to wit:
1. Initial MR of the Grant of the Application for
Writ of Preliminary Injunction (With Offer to File
Counterbond) and Supplemental MR of the 17
November 2010 decision filed by CTCII
2. MR of said 17 November 2010 decision filed
by Yujuico and Sumbilla, Wong, and SIDC
3. Motion to Admit and Approve PI Bond filed by
petitioner STRADEC
4. Oppositions to STRADEC’s Motion to Admit
and Approve PI Bond filed by respondents
Yujuico and Sumbilla as well as CTCII and
respondent Cynthia M. Laureta
In their motions for reconsideration, respondents
essentially argue that:
1) The issue of Quiambao’s authority to
represent STRADEC is a prejudicial question to
the resolution of the dispute before the court a
quo
2) A declaration that Yujuico and Sumbilla’s
group constitutes STRADEC’s legitimate Board
of Directors would not only discount Quiambao’s
authority to represent STRADEC but would also
validate the authority said respondents were
given to execute the pledge of said corporation’s
SIDC shares
3) The record is bereft of any showing that the
Board of Directors who authorized Quiambao to
file the amended petition before RTC Batangas
City was the legitimate successor of
STRADEC’s Board of Directors
In compliance with the decision sought be reconsidered,
STRADEC seeks the admission and approval of the
preliminary injunction bond issued by the Empire
Insurance Company in the sum of ₱10 million
On the other hand, CTCII’s MR of the grant of said writ is
accompanied by an offer to post a counterbond worth
₱20 million, on the ground that grave and irreparable
damage will be wrought by the issuance of the said
writ.
CTCII calls our attention to the supposed fact, that it is
currently the principal shareholder of SIDC which holds
the concession for the construction, operation and
maintenance of the STAR toll road. SIDC is scheduled to
expand Stage II, Phase 2 of the STAR toll road with the
construction of two additional new lanes at an estimated
cost of ₱2,000,000,000.00. If it is prevented from
exercising proprietary rights over the subject shares and
SIDC is inhibited from implementing the 2006
stockholders’ resolution increasing its authorized capital
stock, CTCII will be unable to infuse the equity
participation commonly required for bank loans. Since
the security for said loans consisting of SIDC’s assets
requires the vote of stockholders owning/controlling 2/3
of SIDC’s outstanding capital stock, the writ of
preliminary injunction would cause grave and irreparable
damage which cannot be indemnified by the injunction
bond. In support of the foregoing arguments, CTCII
submitted an affidavit of merit executed by its President,
Elizabeth Lee.
In their opposition to STRADEC’s motion to admit and
approve preliminary injunction bond, Yujuico and
Sumbilla, question Quiambao’s authority to file and
submit said bond. The motion did not include a board
resolution authorizing Quiambao to file the same for and
in behalf of STRADEC. The foregoing arguments have
been adopted in the manifestation filed by SIDC.
STRADEC filed its reply, contending that the decision in
G.R. No. 168639 had reference only to the election of its
Board of Directors for the term 2004-2005, and since
then, the annual meetings of its stockholders had
resulted in the consistent re-election of Quiambao as its
Corporate President.
Issue: Should the writ of preliminary injunction be
granted?
Held: Yes
Having already discussed the matter extensively
in the decision sought to be reconsidered, we no longer
find any reason to go into great detail in discussing the
reasons why the first and second causes of action
pleaded in STRADEC’s 31 July 2006 amended
complaint qualify as intra-corporate disputes cognizable
by Branch 2 of the RTC of Batangas City, sitting as a
SCC. Applying the relationship test and the nature of the
controversy test already discussed in our 17 November
2010 decision, we find that STRADEC’s causes of action
for the nullification of the loan and pledge over its SIDC
shareholdings contracted by respondents Yujuico and
Sumbilla as well as the avoidance of the notarial sale
conducted by respondent Raymond M. Caraos both
qualify as intra-corporate disputes. It cannot, therefore,
be argued that said causes of action were misjoined with
STRADEC’s third and fourth causes of action for the
cancellation of the transfer of its shares in SIDEC’s
books, the invalidation of the 30 July 2005 and 20 July
2006 SIDC stockholders’ meetings, attorney’s fees and
the costs.
Neither are we inclined to hospitably entertain
respondents’ harping over the supposed fact that
Quiambao’s authority to represent STRADEC – as
litigated in the cases pending before the courts of Pasig
City and Urdaneta City, involving the question of
ownership of the controlling shares of stock of
STRADEC as well as the legitimacy of the Board of
Directors headed by Quiambao – pose a prejudicial
question to the resolution of the dispute before Branch 2
of the Batangas City RTC. Aimed at avoiding two
conflicting decisions, a prejudicial question requires the
concurrence of two essential requisites, to wit: (a) the
civil action involves an issue similar or intimately related
to the issue raised in the criminal action; and, (b) the
resolution of such issue determines whether or not the
criminal action may proceed. From the foregoing
disquisition, it is evident that a prejudicial question
cannot be appreciated where, as in the case at bench,
the subject actions are all civil in nature.
As an incident to the power inherent in every
court to control the disposition of the cases on its
dockets, the court in which an action is pending may,
concededly, hold the action in abeyance in the exercise
of sound discretion, to abide by the outcome of another
case pending in another court, especially where the
parties and the issues are the same. While applicable as
between the actions pending before the courts of Pasig
City and Urdaneta City which were supposedly instituted
to determine the ownership of the controlling shares of
stock of STRADEC as well as its legitimate Board of
Directors, said principle cannot, however, apply to said
cases vis-à-vis the one at bench which, seek the
nullification of the loan and pledge over said
corporation’s shareholdings in SIDC as well as the
subsequent notarial sale thereof.
STRADEC, as a corporation with a personality
separate and distinct from its corporators, has a right to
protect its rights and interests over the subject SIDC
shares. We find that respondents are out on a limb in
asserting that the record is be bereft of any showing that
Quiambao's authority to said amended petition a quo
was granted by the legitimate successor to STRADEC's
Board of Directors which was restored into office by this
Court’s decision in G.R. No. 168639. To a great extent,
this situation is attributable to the fact that Civil Case No.
7956 was still on its preliminary stages when RTC of
Batangas City issued its 2006 order, withholding action
on STRADEC's first and causes of action on the ground
of improper venue and suspending proceedings
regarding the corporation's third and fourth causes of
action in view of the then pendency of G.R. No. 168639
before this Court. Given that responsive pleadings
squarely questioning Quiambao's authority to represent
STRADEC have yet to be filed by respondents, the
matter is clearly one better threshed out before the court
a quo, alongside such issues as the validity of the
transfers of STRADEC’s shares to respondents Wong
and CTCII, the propriety of the recording of said
transfers in SIDC’s books, STRADEC’s status as a
stockholder of SIDC and the legality of the 30 July 2005
and 20 July 2006 SIDC stockholders’ meetings.
As an adjunct to the main action subject to the
latter’s outcome, a writ of preliminary injunction may
be issued upon the concurrence of the following
essential requisites, to wit: (1) that the invasion of
the right is material and substantial; (2) that the right
of complainant is clear and unmistakable; and, (3)
that there is an urgent and paramount necessity for
the writ to prevent serious damage. Concurrence of
the foregoing requisites is evident from the fact that
STRADEC has been deprived of its rights to its
shareholdings and to participate in SIDC's corporate
affairs as a consequence of the impugned loan and
pledge as well as the transfer of the shares to
respondent Wong and CTCII. For these reasons alone,
we find that STRADEC is entitled to a writ of preliminary
injunction to restrain: (a) CTCII from further exercising
proprietary rights over the subject shares; (b) SIDC and
its officers from recognizing the transfer or further
transfers of the same; (c) the implementation of the
resolutions passed during the 2006 SIDC stockholders’
special meeting; and, (d) the SEC from acting on any
report submitted in respect thereto. Far from amounting
to a prejudgment of the case, the restraint of said acts is
merely in the service of the office of a writ of preliminary
injunction, i.e., the restoration of the status quo ante as
well preservation and protection of the rights of the
litigant during the pendency of the case.
Viewed in the light of the foregoing
considerations, we find no merit in CTCII's objections to
the writ of preliminary injunction and offer to file a
counterbond in the sum of ₱20,000,000.00, on the
ground that the ₱10,000,000.00 injunction bond
STRADEC has been required to post is grossly
insufficient to cover the grave and irreparable damage
which would result from the issuance of said writ.
Pursuant to Section 6, Rule 58 of the 1997 Rules of
Civil Procedure, "a preliminary injunction may be
dissolved if it appears after hearing that although
the applicant is entitled to the injunction or
restraining order, the issuance or continuance
thereof, as the case may be, would cause irreparable
damage to the party or person enjoined while the
applicant can be fully compensated for such
damages as he may suffer, and the former files a
bond in an amount fixed by the court on condition
that he will pay all damages which the applicant may
suffer by the denial or the dissolution of the
injunction or restraining order. Two conditions must
concur: first, the court in the exercise of its
discretion, finds that the continuance of the
injunction would cause great damage to the
defendant, while the plaintiff can be fully
compensated for such damages as he may suffer;
second, the defendant files a counterbond."
Aside from the fact that the amount of injunction
bond is equivalent to the sum of the supposed loan for
which STRADEC's shares were pledged by respondents
Yujuico and Sumbilla, we find that the projected damage
to SIDC's construction, operation and maintenance of
the STAR toll road is, to say the least, speculative. Even
when reckoned from the commencement of the action a
quo on 17 July 2006, the damage STRADEC suffered
and continues to suffer as a consequence of the
impugned transactions is, in contrast, clearly beyond
monetary recompense as it not only amounts to a
divesture of its ownership over said shares but, more
importantly, translates into a denial of its rights to elect
SIDC's officers, to participate in its corporate affairs and,
as a major stockholder, to determine the course of its
business dealings, among other matters. Moreover, the
mere offer of a counterbond does not suffice to warrant
the dissolution of the preliminary writ of injunction issued
to stop an unauthorized act. A contrary holding would
open the gates to the use of the counterbond as a
vehicle of the commission or continuance of an
unauthorized or illegal act which the injunction precisely
is intended to prevent.
2. Australian Professional Realty, Inc, Jesus
Garcia and Lydia Marciano vs Municipality of
Padre Garcia, Batangas Province (2012)
Cruz
I. ESTABLISHED FACTS
In 1993, fire razed to the ground the old public market of
respondent Municipality of Padre Garcia, Batangas. The
municipal government, through its then Municipal Mayor
Eugenio Gutierrez, invited petitioner Australian
Professional Realty, Inc. (APRI) to rebuild the public
market and construct a shopping center.
On 19 January 1995, a Memorandum of Agreement
(MOA) was executed between petitioner APRI and
respondent, represented by Mayor Gutierrez and the
members of the Sangguniang Bayan. Under the MOA,
APRI undertook to construct a shopping complex in the
5,000-square-meter area. In return, APRI acquired the
exclusive right to operate, manage, and lease stall
spaces for a period of 25 years.
In May 1995, Victor Reyes was elected as municipal
mayor of respondent.
II. COMPLAINT
Respondent, through Mayor Reyes, initiated a Complaint
for Declaration of Nullity of Memorandum of Agreement
with Damages before the Regional Trial Court (RTC) of
Rosario, Batangas.
III. RTC
- The RTC issued summons to petitioners, requiring
them to file their Answer to the Complaint. However, the
summons was returned unserved, as petitioners were no
longer holding office in the given address.
- On 2 April 2003, a Motion for Leave of Court to Effect
Service by Publication was filed by respondent before
the RTC and subsequently granted by the trial court.
- On 24 November 2003, the RTC issued an Order
declaring petitioners in default and allowing respondent
to present evidence ex parte.
- RTC rendered a Decision in favor of plaintiff declaring
the MOA null and void.
IV. MOTION FOR EXECUTION FILED BY
RESPONDENT – GRANTED
V. PETITION FOR RELIEF FROM JUDGMENT FILED
BY PETITIONERS – DENIED
- This Petition was denied by the RTC in an Order dated
15 June 2006
- The trial court denied the Motion for Reconsideration.
VI. PETITIONS FILED IN CA
1. Petitioners later filed before the CA a Petition for
Certiorari and Prohibition.
2. Petitioners filed before the CA a Motion for the
Issuance of Status Quo Order and Motion for Issuance
of Temporary Restraining Order and/or Writ of
Preliminary Injunction. The motion prayed for an order to
restrain the RTC from further proceeding and issuing
any further Order, Resolution, Writ of Execution, and any
other court processes in the case before it.
VII. CA RULING
1. We find that the matter is not of extreme urgency and
that there is no clear and irreparable injury that would be
suffered by the petitioners if the prayer for the issuance
of a Status Quo Order, Temporary Restraining Order
(TRO) and/or Writ of Preliminary Injunction is not
granted.
2. MR also denied stating that the mere preservation of
the status quo is not sufficient to justify the issuance of
an injunction.
VIII. PETITION FOR REVIEW ON CERTIORARI FILED
BY PETITIONERS
1. Petitioners claim that the amount of APRIs investment
in the Padre Garcia Shopping Center is estimated at
₱30,000,000, the entirety of which the RTC declared
forfeited to respondent without just compensation. At the
time of the filing of the Petition, APRI had 47 existing
tenants and lessees and was deriving an average
monthly rental income of ₱100,000. The Decision of the
RTC was allegedly arrived at without first obtaining
jurisdiction over the persons of petitioners. The
execution of the allegedly void judgment of the RTC
during the pendency of the Petition before the CA would
probably work injustice to the applicant, as the execution
would result in an arbitrary declaration of nullity of the
MOA without due process of law.
2. Petitioners further allege that respondent did not
exercise reasonable diligence in inquiring into the
formers address in the case before the RTC. The
Process Server Return, with respect to the unserved
summons, did not indicate the impossibility of a service
of summons within a reasonable time, the efforts exerted
to locate APRI, or any inquiry as to the whereabouts of
the said petitioner.
IX. RESPONDENT’S CONTENTIONS
1. alleging among others that despite the RTCs issuance
of a Writ of Execution, respondent did not move to
implement the said writ out of administrative comity and
fair play. Even if the writ were implemented, petitioners
failed to state in categorical terms the serious injury they
would sustain.
2. further argues that it is now in possession of the
contracts that the lessees of the Padre Garcia Shopping
Center executed with APRI. Thus, there are actions [that
militate] against the preservation of the present state of
things, as sought to be achieved with the issuance of a
status quo order.
X. RULING
A. W/N THERE IS GRAVE ABUSE OF DISCRETION
ON THE PART OF CA
A writ of preliminary injunction and a TRO are injunctive
reliefs and preservative remedies for the protection of
substantive rights and interests. An application for the
issuance of a writ of preliminary injunction and/or TRO
may be granted upon the filing of a verified application
showing facts entitling the applicant to the relief
demanded.
Essential to granting the injunctive relief is the existence
of an urgent necessity for the writ in order to prevent
serious damage. A TRO issues only if the matter is of
such extreme urgency that grave injustice and
irreparable injury would arise unless it is issued
immediately. Under Section 5, Rule 58 of the Rule of
Court, a TRO may be issued only if it appears from the
facts shown by affidavits or by the verified application
that great or irreparable injury would be inflicted on the
applicant before the writ of preliminary injunction could
be heard.
Thus, to be entitled to the injunctive writ, petitioners must
show that (1) there exists a clear and unmistakable right
to be protected; (2) this right is directly threatened by an
act sought to be enjoined; (3) the invasion of the right is
material and substantial; and (4) there is an urgent and
paramount necessity for the writ to prevent serious and
irreparable damage.
The grant or denial of a writ of preliminary injunction in a
pending case rests on the sound discretion of the court
taking cognizance of the case, since the assessment
and evaluation of evidence towards that end involves
findings of fact left to the said court for its conclusive
determination. Hence, the exercise of judicial discretion
by a court in injunctive matters must not be interfered
with, except when there is grave abuse of discretion.
Grave abuse of discretion in the issuance of writs of
preliminary injunction implies a capricious and whimsical
exercise of judgment equivalent to lack of jurisdiction; or
the exercise of power in an arbitrary or despotic manner
by reason of passion, prejudice or personal aversion
amounting to an evasion of positive duty or to a virtual
refusal to perform the duty enjoined or to act at all in
contemplation of law. The burden is thus on petitioner to
show in his application that there is meritorious ground
for the issuance of a TRO in his favor.
In this case, no grave abuse of discretion can be
imputed to the CA. It did not exercise judgment in a
capricious and whimsical manner or exercise power in
an arbitrary or despotic manner.
B. W/N THERE IS IRREPARABLE INJURY
Damages are irreparable where there is no standard by
which their amount can be measured with reasonable
accuracy. In this case, petitioners have alleged that the
loss of the public market entails costs of about
₱30,000,000 in investments, ₱100,000 monthly revenue
in rentals, and amounts as yet unquantified but not
unquantifiable in terms of the alleged loss of jobs of
APRIs employees and potential suits that may be filed
by the leaseholders of the public market for breach of
contract. Clearly, the injuries alleged by petitioners are
capable of pecuniary estimation. Any loss petitioners
may suffer is easily subject to mathematical computation
and, if proven, is fully compensable by damages. Thus,
a preliminary injunction is not warranted. With respect to
the allegations of loss of employment and potential suits,
these are speculative at best, with no proof adduced to
substantiate them.
The foregoing considered, the CA did not commit grave
abuse of discretion in denying the Motion for Injunction.
In any case, petitioners may still seek recourse in their
pending Petition before the Court of Appeals.
3. Allgemeine-Bau-Chemie Phils. Vs Metrobank
(2006) Culajara
I. Established Facts
Under a loan agreement, Asian Appraisal
Holdings, Inc. (AAHI) obtained a loan amounting to
P442,500,000 from Solidbank Corporation (Solidbank)
for the construction of Asian Star Building located at the
Filinvest Corporate City, Alabang, Muntinlupa City. As
security for the loan, AAHI executed a security
agreement or real estate mortgage over its property
consisting of the lots covered by the building and the
condominium built thereon including all units, parking
slots, common areas and other improvements,
machineries and equipment. The real estate mortgage
was registered with the Register of Deeds on November
19, 1996 and duly annotated on the individual
Condominium Certificates of Title (CTC) on even date.
AAHI entered into a contract to sell with
petitioner for the purchase of Units 1004 and 1005 and
the right to the exclusive use of parking slots for a total
purchase price of P23,571,280. On December 22, 1999,
the parties executed an addendum to the contract to sell
whereby AAHI assigned to petitioner the right to the
exclusive use of parking slot (P504) for a consideration
of P600,000, which petitioner paid on even date.
 AAHI and Solidbank informed petitioner of the
real estate mortgage forged by them and was advised to
remit its monthly amortizations for the units and parking
slots it purchased to Solidbank. Petitioner was also
requested to inform Solidbank of the total installments it
had paid for these units and parking slots and the
balance still due thereon. Petitioner which occupied the
condominium units as its place of business had, by
October 2001, fully settled its obligation to AAHI.
II. Complaint - Regional Trial Court (RTC)
On October 21, 2000, as AAHI defaulted on its
loan obligation, Metropolitan Bank and Trust Company
(Metrobank), to which the banking operations of
Solidbank were integrated, 􏰀led before the Muntinlupa
RTC a Petition for Extra-Judicial Foreclosure of the Real
Estate Mortgage. AAHI not long after fi􏰀led on October
30, 2000 also before the Muntinlupa RTC a complaint
against Solidbank, for Specifi􏰀c Performance with
Preliminary Injunction to enjoin the foreclosure of the
real estate mortgage.
On October 31, 2000, the mortgaged properties
were sold at public auction to the highest bidder,
Metrobank, to which a Certi􏰀cate of Sale was issued.
Metrobank 􏰀led an Ex-Parte petition for the Issuance of
a Writ of Possession of the properties subject of the
foreclosed mortgage. The petition was granted and a
writ of possession was issued on April 9, 2002.
Also, petitioner 􏰀filed (AAHI's complaint against
Solidbank for Speci􏰀c Performance with Preliminary
Injunction) a motion for intervention, to which it attached
a complaint-in-intervention with prayer for the
annulment of the extra-judicial foreclosure sale, delivery
of title, and damages and for the issuance of a
temporary restraining order and/or writ of preliminary
injunction enjoining Metrobank to consolidate its title and
to take possession of its properties.
The court Sheriff issued a notice to vacate which
was served on May 16, 2002 upon all building occupants
who were advised to make the necessary arrangements
with Metrobank regarding their occupancy.
In the meantime, the Motion for Reconsideration
of the April 9, 2002 Order of Branch 276 filed by AAHI
was denied, prompting it to file before the appellate court
a petition for a writ of preliminary injunction.
III. Court of Appeals
Petitioner 􏰀filed on June 18, 2002 a separate
petition for the issuance of a temporary restraining order
and a writ of preliminary injunction with the appellate
cour also to enjoin the implementation of the writ of
possession issued by Branch 276 of the Muntinlupa
RTC. In its petition, petitioner alleged that its complaint-
in-intervention pending is its principal action but as the
said court could not enjoin Branch 276 from
implementing the writ of possession, both courts being of
equal jurisdiction, it had no choice but to fi􏰀le the
petition with the appellate court.
The Tenth Division of the Court of Appeals
granted petitioner’s prayer for, and issued a temporary
restraining order. The Seventh Division of the Court of
Appeals denied, however, petitioner’s prayer for the
issuance of a writ of preliminary injunction for failure to
establish a clear and unmistakable right to the subject
properties.
IV. Supreme Court
The motion for reconsideration of the above-said
Resolution having been denied by the appellate court,
petitioner now comes before this Court on a petition for
review, alleging that the appellate court committed grave
and palpable error in denying its prayer for a writ of
preliminary injunction in flagrant violation of laws and
jurisprudence.
V. Issue Whether or not an action for
injunction is within the Court of Appeals’ jurisdiction
VI. Ruling
It is axiomatic that what determines the nature of
an action and hence, the jurisdiction of a court, are the
allegations of the complaint and the character of the
relief sought. Petitioner's only prayer is "for the
preservation of the status quo, that is, petitioner, having
in possession over the subject properties for several
years, shall retain such possession until the controversy
[Civil Case No. 00-196] before the said trial court
[Branch 276, RTC of Muntinlupa City] has been 􏰀finally
resolved and respondents be prevented from taking over
such possession.”
Clearly, what petitioner fi􏰀led with the appellate
court was an original action for preliminary injunction
which is a provisional and extra-ordinary remedy
calculated to preserve or maintain the status quo of
things and is availed of to prevent actual or threatened
acts, until the merits of the case can be heard.

An original action for injunction is outside
the jurisdiction of the Court of Appeals, however.
Under B.P. 129, the appellate court has original
jurisdiction only over actions for annulment of
judgments of the RTCs and has original jurisdiction
to issue writs of mandamus, prohibition, certiorari,
habeas corpus and quo warranto, and auxiliary writs
or processes whether or not they are in aid of its
appellate jurisdiction.
The appellate court's jurisdiction to grant a writ
of preliminary injunction is limited to actions or
proceedings pending before it, as Section 2 of Rule 58 of
the Rules clearly provides:
SECTION 2. Who may grant preliminary
injunction. — A preliminary injunction may be
granted by the court where the action or
proceeding is pending. . . . (Emphasis supplied),
or in a petition for certiorari, prohibition or mandamus
under Section 7 of Rule 65, thus:
SECTION 7. Expediting proceedings; injunctive
relief. — The court in which the petition is 􏰀􏰀led
may issue orders expediting the proceedings,
and it may also grant a temporary restraining
order or a writ of preliminary injunction for the
preservation of the rights of the parties pending
such proceedings. The petition shall not interrupt
the course of the principal case unless a
temporary restraining order or a writ of
preliminary injunction has been issued against
the public respondent from further proceeding in
the case. (Emphasis supplied)
In the case at bar, petitioner's complaint-in-
intervention was pending before Branch 256 of the
Muntinlupa RTC, not with the appellate court.
Petitioner's petition before the appellate court does not
show, nay allege, that in issuing the writ of possession,
the Muntinlupa RTC acted without or in excess of its
jurisdiction or with grave abuse of discretion for it to be
treated as either one for certiorari or prohibition.
Thus, for want of jurisdiction, the petition before
the appellate court should have been dismissed outright.
At all events, it is well-settled that an order granting or
denying a preliminary injunction is not appealable.
4. [A.M. No. RTJ-10-2225. September 6, 2011.]
(formerly A.M. OCA I.P.I. No. 09-3182-
RTJ)
ATTY. TOMAS ONG CABILI vs. JUDGE
RASAD G. BALINDONG, Acting Presiding
Judge, RTC, Branch 8, Marawi City
(Justiniano)
FACTS:
1. Civil Case No. 06-2954 is an action for damages
in Branch 6 of the Iligan City RTC against the
Mindanao State University (MSU), et al., arising from
a vehicular accident that caused the death of Jesus
Ledesma and physical injuries to several others.
2. The Iligan City RTC rendered a Decision, holding
the MSU liable for damages amounting to
P2,726,189.90. The Court of Appeals (CA) affirmed
the Iligan City RTC decision and the CA decision
subsequently lapsed to finality. On January 19,
2009, Entry of Judgment was made.
3. The Iligan City RTC issued a writ of execution.
The MSU, however, failed to comply with the writ;
thus, on March 24, 2009, Sheriff Gerard Peter Gaje
served a Notice of Garnishment on the MSU's
depository bank, the Land Bank of the
Philippines (LBP), Marawi City Branch.
4. The Office of the Solicitor General opposed
the motion for execution, albeit belatedly, in
behalf of MSU. The Iligan City RTC denied the
opposition in its March 31, 2009 Order. The MSU
responded to the denial by filing on April 1,
2009 a petition with the Marawi City RTC, for
prohibition and mandamus with an application
for the issuance of a temporary restraining
order (TRO) and/or preliminary injunction
against the LBP and Sheriff Gaje. The petition of
MSU was raffled to the RTC, Marawi City, Branch
8, presided by respondent Judge.
5. The respondent Judge set the hearing for the
application for the issuance of a TRO on April 8,
2009. After this hearing, the respondent Judge
issued a TRO restraining Sheriff Gaje from
garnishing P2,726,189.90 from MSU's LBP-Marawi
City Branch account.
6. On April 17, 2009, the respondent Judge
conducted a hearing on the application for the
issuance of a writ of preliminary injunction.
Thereafter, he required MSU to file a memorandum
in support of its application for the issuance of a writ
of preliminary injunction. On April 21, 2009, Sheriff
Gaje moved to dismiss the case on the ground of
lack of jurisdiction. The respondent Judge thereafter
granted the motion and dismissed the case.
 I. Office of the Court Administrator:
1. Complainant Atty. Tomas Ong Cabili,
counsel of the private plaintiffs in Civil Case No. 06-
2954, filed the complaint charging the respondent
Judge with Gross Ignorance of the Law, Grave
Abuse of Authority, Abuse of Discretion, and/or
Grave Misconduct Prejudicial to the Interest of the
Judicial Service for interfering with the order of a co-
equal court, Branch 6 of the Iligan City RTC, by
issuing the TRO to enjoin Sheriff Gaje from
garnishing P2,726,189.90 from MSU's LBP-Marawi
City Branch account.
2. The respondent Judge denied that he
interfered with the order of Branch 6 of the Iligan
City RTC. He explained that he merely gave the
parties the opportunity to be heard and eventually
dismissed the petition for lack of jurisdiction.
3. Office of the Court
Administrator (OCA) found the respondent Judge
guilty of gross ignorance of the law for violating the
elementary rule of non-interference with the
proceedings of a court of co-equal jurisdiction. It
recommended a fine of P40,000.00, noting that
this is the respondent Judge's second offense.
ISSUE: Whether or not respondent judge is guilty with
Gross Ignorance of the Law, Grave Abuse of Authority,
Abuse of Discretion, and/or Grave Misconduct
Prejudicial to the Interest of the Judicial Service for
interfering with the order of a co-equal court.
HELD: Yes, the Supreme Court stated:
The doctrine of judicial stability or non-
interference in the regular orders or judgments of a
co-equal court is an elementary principle in the
administration of justice: no court can interfere by
injunction with the judgments or orders of another
court of concurrent jurisdiction having the power
to grant the relief sought by the injunction. The
rationale for the rule is founded on the concept of
jurisdiction: a court that acquires jurisdiction over the
case and renders judgment therein has jurisdiction
over bits judgment, to the exclusion of all other
coordinate courts, for its execution and over all
its incidents, and to control, in furtherance of
justice, the conduct of ministerial officers acting
in connection with this judgment.
Thus, we have repeatedly held that a case
where an execution order has been issued is
considered as still pending, so that all the
proceedings on the execution are still proceedings in
the suit. 25 A court which issued a writ of execution
has the inherent power, for the advancement of
justice, to correct errors of its ministerial officers and
to control its own processes. To hold otherwise
would be to divide the jurisdiction of the appropriate
forum in the resolution of incidents arising in
execution proceedings. Splitting of jurisdiction is
obnoxious to the orderly administration of justice.
To be sure, the law and the rules are not
unaware that an issuing court may violate the law in
issuing a writ of execution and have recognized that
there should be a remedy against this violation. The
remedy, however, is not the resort to another co-
equal body but to a higher court with authority to
nullify the action of the issuing court. This is
precisely the judicial power that the 1987
Constitution, under Article VIII, Section 1, paragraph
2, speaks of and which this Court has
operationalized through a petition for certiorari,
under Rule 65 of the Rules of Court.
In the present case, the respondent Judge
clearly ignored the principle of judicial stability by
issuing a TRO to temporarily restrain Sheriff Gaje
from enforcing the writ of execution issued by a co-
equal court, Branch 6 of the Iligan City RTC, and
from pursuing the garnishment of the amount of
P2,726,189.90 from MSU's account with the LBP,
Marawi City Branch. The respondent Judge was
aware that he was acting on matters pertaining to
the execution phase of a final decision of a co-equal
and coordinate court since he even quoted MSU's
allegations in his April 8, 2009 Order.
The respondent Judge should have
refrained from acting on the petition because Branch
6 of the Iligan City RTC retains jurisdiction to rule on
any question on the enforcement of the writ of
execution. Section 16, Rule 39 of the Rules of
Court (terceria), cited in the course of the Court's
deliberations, finds no application to this case since
this provision applies to claims made by a third
person, other than the judgment obligor or his
agent; a third-party claimant of a property under
execution may file a claim with another court which,
in the exercise of its own jurisdiction, may issue a
temporary restraining order. In this case, the
petition for injunction before the respondent
Judge was filed by MSU itself, the judgment
obligor. If Sheriff Gaje committed any irregularity or
exceeded his authority in the enforcement of the
writ, the proper recourse for MSU was to file a
motion with, or an application for relief from, the
same court which issued the decision, not from any
other court, or to elevate the matter to the CA on a
petition for certiorari. In this case, MSU filed the
proper motion with the Iligan City RTC (the issuing
court), but, upon denial, proceeded to seek recourse
through another co-equal court presided over by the
respondent Judge.
It is not a viable legal position to claim that a
TRO against a writ of execution is issued against an
erring sheriff, not against the issuing Judge. A TRO
enjoining the enforceability of a writ addresses the
writ itself, not merely the executing sheriff. The duty
of a sheriff in enforcing writs is ministerial and not
discretionary. As already mentioned above, the
appropriate action is to assail the implementation of
the writ before the issuing court in whose behalf the
sheriff acts, and, upon failure, to seek redress
through a higher judicial body. Significantly, MSU did
file its opposition before the issuing court — Iligan
City RTC — which denied this opposition.
That the respondent Judge subsequently
rectified his error by eventually dismissing the
petition before him for lack of jurisdiction is not a
defense that the respondent Judge can use. His
lack of familiarity with the rules in interfering with the
acts of a co-equal court undermines public
confidence in the judiciary through his demonstrated
incompetence. In this case, he impressed upon the
Iligan public that the kind of interference he exhibited
can be done, even if only temporarily, i.e., that an
official act of the Iligan City RTC can be thwarted by
going to the Marawi City RTC although they are co-
equal courts. That the complaining lawyer, Atty.
Tomas Ong Cabili, subsequently reversed course
and manifested that the respondent Judge is
"basically a good Judge," and should only be
reprimanded, cannot affect the respondent Judge's
liability. This liability and the commensurate penalty
do not depend on the complainant's personal
opinion but on the facts he alleged and proved, and
on the applicable law and jurisprudence.
WHEREFORE, premises considered,
respondent Judge Rasad G. Balindong, Acting
Presiding Judge, Regional Trial Court, Branch 8,
Marawi City, is hereby FOUND GUILTY of Gross
Ignorance of the Law and FINED in the amount of
P30,000.00, with a stern WARNING that a repetition
of the same will be dealt with more severely.
5. Hernandez vs NAPOCOR (2006) Nieto
I. Established Facts
Sometime in 1996, NAPOCOR began the construction of
29 decagon-shaped steel poles or towers with a height
of 53.4 meters to support overhead high tension cables
in connection with its 230 Kilovolt Sucat-Araneta-
Balintawak Power Transmission Project. Said
transmission line passes through the Sergio Osmea, Sr.
Highway (South Superhighway), the perimeter of Fort
Bonifacio, and Dasmarias Village proximate to Tamarind
Road, where petitioners homes are.
Alarmed by the sight of the towering steel towers,
petitioners scoured the internet on the possible adverse
effects that such a structure could cause to their health
and well-being. Petitioners got hold of published articles
and studies linking the incidence of a fecund of illnesses
to exposure to electromagnetic fields. These illnesses
range from cancer to leukemia.
Petitioners aired this concern to the NAPOCOR, which
conducted a series of meetings with them.
NAPOCOR received flak from Representative Francis
Joseph G. Escudero, who in his Privilege Speech dated
10 May 1999, denounced the cavalier manner with
which NAPOCOR ignored safety and consultation
requirements in the questioned project.
Petitioners brought their woes to the attention of Rep.
Arnulfo Fuentebella, Chairman of the House Committee
on Energy, wherein NAPOCOR was asked to shed light
on the petitioners problem. In a letter dated 8 November
1999, NAPOCOR President Federico Puno stated that
NAPOCOR was still in the process of coming up with a
win-win solution to the concerns of the Dasmarias
Village and Forbes Park residents.
Negotiations between petitioners and the NAPOCOR
reached an impass, with petitioners vying for the
relocation of the transmission lines to Fort Bonifacio on
one hand, and the NAPOCOR insisting on a 12-meter
easement widening, on the other
II. RTC
Petitioners, on 9 March 2000 filed a Complaint for
Damages with Prayer for the Issuance of a
Temporary Restraining Order and/or a Writ of
Preliminary Injunction against NAPOCOR. Harping on
the hazardous effects of exposure to electromagnetic
radiation to the health and safety to themselves and their
families, petitioners, through the instant case, sought
what they had failed to achieve through amicable means
with NAPOCOR and prayed, inter alia, for damages and
the relocation of the transmission lines to Lawton
Avenue, Fort Bonifacio.
Judge Francisco B. Ibay issued an order in Civil
Case No. 00-352, which temporarily restrained the
respondent from energizing and transmitting high
voltage electric current through the said project. By
order of 15 March 2000, the trial court extended the
restraining order for 18 more days.
III. CA
NAPOCOR filed a Petition for Certiorari with Prayer
for Temporary Restraining Order and Preliminary
Injunction with the Court of Appeals assailing the
above order by the trial court. Alluding to Presidential
Decree No. 1818 (1981), "Prohibiting Courts from
Issuing Restraining Orders or Preliminary Injunctions in
Cases Involving Infrastructure and Natural Resource
Development Projects of, and Public Utilities Operated
by, the Government, particularly Sec. 1, NAPOCOR
stalwartly sought the dismissal of the case on the ground
of lack jurisdiction.
IV. Interregnum
In the interregnum, by order
dated 3 April 2000, the trial court ordered the
issuance of a writ of preliminary injunction
against NAPOCOR.
The trial court articulated that an
injunction was necessary to stay respondent
NAPOCORs activation of its power lines due
to the possible health risks posed to the
petitioners. Asserting its jurisdiction over the
case, the trial court was of the view that
Presidential Decree No. 1818 and
jurisprudence proscribing injunctions
against infrastructure projects do not find
application in the case at bar because of the
health risks involved.
The trial court, thus, enjoined the
NAPOCOR from further preparing and installing
high voltage cables to the steel pylons erected
near petitioners homes and from energizing and
transmitting high voltage electric current through
said cables while the case is pending final
adjudication, upon posting of the bond
amounting to P5,000,000.00 executed to the
effect that petitioners will pay all the damages
the NAPOCOR may sustain by reason of the
injunction if the Court should finally decide that
the petitioners are not entitled thereto.
**In light of the foregoing order of
the trial court, the petition which NAPOCOR filed
with the Court of Appeals was later amended to
include the prayer for the nullification and
injunction of the Order dated 3 April 2000 of the
trial court.
CA reversed the Trial Courts order. Stating that the
proscription on injunctions against infrastructure projects
of the government is clearly mandated by the above-
quoted Section 1 of Presidential Decree No. 1818, as
reiterated by the Supreme Court in its Circulars No. 2-91
and No. 13-93, dated 15 March 1991 and 5 March 1993,
respectively.
Motion for reconsideration was denied.
Hence this petition for Review.
V. Issue
Whether or not the trial court may issue a temporary
restraining order and preliminary injunction to enjoin the
construction and operation of the 29 decagon-shaped
steel poles or towers by the NAPOCOR, notwithstanding
Presidential Decree No. 1818.
VI. SC
YES.
**Petitioners clutch on their stand that Presidential
Decree No. 1818 could not be construed to apply to
cases of extreme urgency as in the present case when
no less than the rights of the petitioners to health and
safety hangs on the balance.
Presidential Decree No. 1818 was issued on 16 January
1981, prohibiting judges from issuing restraining orders
against government infrastructure projects. In part, the
decree says, No court in the Philippines shall have
jurisdiction to issue any restraining order, preliminary
injunction or preliminary order, preliminary mandatory
injunction in any case, dispute or controversy involving
an infrastructure project. Realizing the importance of this
decree, this Tribunal had issued different circulars to
implement this particular law.
While its sole provision would appear to encompass all
cases involving the implementation of projects and
contracts on infrastructure, natural resource
development and public utilities, this rule, however, is
not absolute as there are actually instances when
Presidential Decree No. 1818 should not find application.
In a spate of cases, this Court declared that although
Presidential Decree No. 1818 prohibits any court
from issuing injunctions in cases involving
infrastructure projects, the prohibition extends only
to the issuance of injunctions or restraining orders
against administrative acts in controversies
involving facts or the exercise of discretion in
technical cases. On issues clearly outside this
dimension and involving questions of law, this Court
declared that courts could not be prevented from
exercising their power to restrain or prohibit
administrative acts.
In the case at bar, petitioners sought the issuance of a
preliminary injunction on the ground that the NAPOCOR
Project impinged on their right to health as enshrined in
Article II, Section 15 of the 1987 Constitution, which
provides:
Sec. 15. The State shall protect and promote the right to
health of the people and instill consciousness among
them.
To boot, petitioners, moreover, harp on respondents
failure to conduct prior consultation with them, as the
community affected by the project, in stark violation of
Section 27 of the Local Government Code which
provides: no project or program shall be implemented by
government authorities unless the consultations
mentioned are complied with, and prior approval of the
Sanggunian concerned is observed.
From the foregoing, whether there is a violation of
petitioners constitutionally protected right to health and
whether respondent NAPOCOR had indeed violated the
Local Government Code provision on prior consultation
with the affected communities are veritable questions of
law that invested the trial court with jurisdiction to issue a
TRO and subsequently, a preliminary injunction. As
such, these questions of law divest the case from
the protective mantle of Presidential Decree No.
1818.
Moreover, the issuance by the trial court of a preliminary
injunction finds legal support in Section 3 of Rule 58 of
the Rules of Court which provides:
Sec. 3. Grounds for issuance of
preliminary injunction. - A preliminary injunction
may be granted when it is established:
(a) That the applicant is entitled to
the relief demanded, and the whole or part of
such relief consists in restraining the
commission or continuance of the act or acts
complained of, or in requiring the performance of
an act or acts, either for a limited period or
perpetually;
(b) That the commission,
continuance or non-performance of the act or
acts complained of during the litigation would
probably work injustice to the applicant; or
(c) That a party, court, agency or a
person is doing, threatening, or is attempting to
do, or is procuring or suffering to be done, some
act or acts probably in violation of the rights of
the applicant respecting the subject of the action
or proceeding, and tending to render the
judgment ineffectual. (3a) (Emphasis supplied.)
The rule on preliminary injunction merely requires
that unless restrained, the act complained of will
probably violate his rights and tend to render the
judgment ineffectual.
Here, there is adequate evidence on record to justify
the conclusion that the project of NAPOCOR
probably imperils the health and safety of the
petitioners so as to justify the issuance by the trial
court of a writ of preliminary injunction.
A preliminary injunction is likewise justified prior to
a final determination of the issues of whether or not
NAPOCOR ignored safety and consultation
requirements in the questioned project. Indeed, the
court could, nay should, grant the writ of preliminary
injunction if the purpose of the other party is to
shield a wrongdoing. A ruling to the contrary would
amount to an erosion of judicial discretion.
After all, for a writ of preliminary injunction to be issued,
the Rules do not require that the act complained of be in
violation of the rights of the applicant. Indeed, what the
Rules require is that the act complained of be
probably in violation of the rights of the applicant.
Under the Rules of Court, probability is enough
basis for injunction to issue as a provisional
remedy, which is different from injunction as a main
action where one needs to establish absolute
certainty as basis for a final and permanent
injunction.
Rule 59 Receivership
1. Normandy vs Duque (1969) Pracuelles
FACTS: On September 6, 1960, appellant was
appointed receiver of the WARVETS by the lower court
in Civil Case No. 34998 1 "generally to do and perform
such acts respecting the property, assets and
transactions" of the organization "as the court may
authorize." Upon filing a bond in the sum of fifty
thousand (P50,000.00) pesos, he entered upon the
discharge of his functions.
During his term, appellant went to Japan by authority of
the lower court's order dated October 12, 1960 for the
purpose of checking on the reported undervaluation of
goods shipped to the WARVETS and of preparing the
shipment of the goods which had not yet been
committed. For expenses incurred by him during this trip,
which amounted to P9,431.48, he was ordered
reimbursed by the lower court on June 5, 1963. 2 The
order authorizing reimbursement stated, thus:
... . The order permits the claim for
reimbursement as part of the receiver's
compensation as such receiver. It dues not
prohibit the reimbursement of the expenses
before the payment of the receiver's
compensation, and it is only fair and just that at
least the expenses which the receiver advanced,
if found reasonable and necessary, be
reimbursed as soon as the funds of the
WARVETS permit.
Except for this reimbursed amount, appellant received
no other fee or compensation from the WARVETS. In
fact, for a continuous period of three (3) years, he
performed his duties as receiver without receiving any
compensation as such. Hence, on October 9, 1963, he
filed a motion in the lower court to fix not only his
compensation but also that of his co-receiver, Macario
Ofilada. 3 In his motion, he prayed further for such
amounts as attorney's fees and stenographer's fees as
the court may allow. After an opposition thereto had
been duly interposed, the lower court issued an
"Omnibus Order" on January 22, 1964, the second
paragraph of which denied the motion of appellant. A
reconsideration of the order of denial was immediately
sought by appellant.
Without awaiting action on his motion for
reconsideration, appellant filed another motion, on May
28, 1964, resigning from his post as receiver and praying
that the lower court accept it and at the same time fix the
amount of his fees and compensation as receiver.
RTC
On June 5, 1964, appellant was discharged as receiver
and his compensation was fixed at P10,000.00. The
order of the lower court approving his discharge reads
as follows:
Ramon E. Saura, first receiver, filed in his own
behalf on May 28, 1964, his motion to withdraw
as first receiver and for fixing of his
compensation. There being no objection to this
withdrawal, the same is hereby granted.
Respecting his compensation, neither is there
objection thereto. In fact, per joint motion filed on
May 28, by defendants, except Filipinas
Merchandising, which has been granted, they
asked the withdrawal of their joint motion dated
March 31, 1961, for the removal of Saura as
receiver; and per manifestation of said
defendants except Filipinas Merchandising
dated May 28, they recommend P10,000.00 as
Saura's fee, which Jose and Susana
Cochingyan are willing to advance for the
account of WARVETS.
WHEREFORE, Ramon E. Saura's withdrawal as
receiver in this case is hereby approved, and his
fee as such is hereby fixed at P10,000.00, which
Jose and Susana Cochingyan shall advance for
the account of WARVETS.
Subsequently, one Atty. Anacleto Magno, on his own
behalf, presented before the lower court a motion dated
August 18, 1964, for the payment of attorney's fees to
him in the amount of P10,000.00 for his alleged services
as legal counsel for the appellant when he was still a
receiver. Appellant, himself, filed another motion for the
payment and cancellation of his receiver's bond and for
the reimbursement to him of the sum of P2,030.00 which
he paid out of his personal funds as premium for said
bond from September 9, 1960 to September 9, 1964. On
September 24, 1964, the lower court disposed of both
motions in one order by allowing compensation to Atty.
Magno in the reduced amount of P1,000.00 and granting
reimbursement to appellant in the whole sum prayed for
by him as premium on his bond. In granting fee to the
counsel of appellant, the lower court said:
The motion, to the mind of the Court, is not well
taken, because Ramon E. Saura is himself a
lawyer and he did not have to retain legal
counsel. If he did, the matter should be for his
own account, particularly because it was a
unilateral act on Saura's part to get Magno as
his lawyer in the receivership.
Nevertheless, the Court is not unaware that Atty.
Magno did in fact work for Saura, for the former
 appeared in Court and signed pleadings for
Saura as receiver.
Wherefore, in fairness to Atty. Magno, it is
hereby ordered that he be paid P1,000.00 from
the funds under receivership. If he is not
satisfied with this amount, he can go after
Saura.
Barely two months after the issuance of the last-
mentioned order, or on November 18, 1964, appellant
filed another motion for reimbursement, this time for the
amount he allegedly paid as compensation of a clerk
whom he employed when he was still a receiver for the
period September 9, 1960 to May 28, 1964, inclusive, at
the rate of P120.00 a month, or the total sum of
P5,236.00. Appellant alleged that in view of the
voluminous paper and legal work which he had to attend
to as receiver, it was necessary for him to engage the
service of a typist-stenographer, one Melchor C. Ordoño,
who doubled as messenger, filing clerk, utility clerk and
records clerk.
On March 5, 1965, although no party registered any
objection to appellant's last motion for reimbursement,
the lower court denied it in the appealed order,
reasoning thus:
The record shows that the Court had previously
ordered the payment of P10,000.00 as
compensation for Ramon E. Saura for his
services as first receiver in this case. Therefore,
whatever amount he now seeks in addition
thereto would be improper. Moreover, he is now
estopped from claiming any further amount as
compensation for alleged clerical services
employed by him as such receiver without prior
approval or authority of this Court.
NOTE: NO IAC (or CA) Appeal from the order of
the Court of First Instance of Manila (Branch I),
dated March 5, 1965, denying the motion of
Ramon E. Saura, former First Receiver of the
World War II Veterans Enterprises, inc.
(hereinafter referred to merely as WARVETS),
asking for reimbursement of the sum of
P5,236.00, representing the amount which he
allegedly paid in advance as compensation to a
clerk whose services he availed himself of while
he was still a receiver.
ISSUE: Whether Saura is entitled for compensation.
HELD: NO. A receiver is a representative of the court
appointed for the purpose of preserving and conserving
the property in litigation and prevent its possible
destruction or dissipation if it were left in the possession
of any of the parties. The receiver is not the
representative of any of the parties but of all of them to
the end that their interests may be equally protected with
the least possible inconvenience and expense. It is
inherent in the office of a receiver not only that he should
act at all times with the diligence and prudence of a good
father of a family but should also not incur any obligation
or expenditure without leave of the court and it is the
responsibility of the court to supervise the receiver and
see to it that he adheres to the above standard of his
trust and limits the expenses of the receivership to the
minimum. For these reasons, it is generally the
receivership court that is in a better position to determine
whether a particular expenditure is reasonable and
satisfied or not and its ruling thereon may not be
disturbed by this Court.
It is true that in the case at bar, the motion in question of
the receiver was not opposed by any of the parties. It is
to be observed, however, that the records show that the
court a quo had previously allowed or approved
reimbursements to the receiver of expenditures made by
him in connection with the performance of his duties,
more particularly, for a trip made to Japan and for the
fees of a lawyer who had allegedly assisted him,
notwithstanding he is a lawyer himself. Besides, the
court a quo fixed the total compensation to the appellant
receiver at P10,000.00 for his services as such and said
amount, from all appearances, is agreeable to everyone,
including appellant.
The receivership court's reasons for withholding
approval of the reimbursement in question are precisely
because "whatever amount he (the receiver) now seeks
in addition thereto (P10,000) would be improper.
Moreover, he is now estopped from claiming any further
amount as compensation for alleged clerical services
employed by him as such receiver without prior approval
or authority of this Court." We find these reasons to be
cogent enough in the premises, specially because
appellant's alleged employment of a clerk was made
without prior leave of court. In these circumstances, it
cannot be said that the court a quo abused its discretion,
much less gravely.
Rule 60 Replevin
1. BA FINANCE CORPORATION, petitioner, vs.
HON. COURT OF APPEALS and ROBERTO
M. REYES, respondents.
[G.R. No. 102998. July 5, 1996.] Religioso
I. FACTS
The spouses Reynaldo and Florencia Manahan
executed, on 15 May 1980, a promissory note binding
themselves to pay Carmasters, Inc., the amount of
P83,080.00 in thirty-six monthly installments. To secure
payment, the Manahan spouses executed a deed of
chattel mortgage over a motor vehicle, a Ford Cortina
1.6 GL. Carmasters later assigned the promissory note
and the chattel mortgage to petitioner BA Finance
Corporation with the conformity of the Manahans. When
the latter failed to pay the due installments, petitioner
sent demand letters. The demands not having been
heeded, petitioner, filed a complaint for replevin with
damages against the spouses, as well as against a John
Doe, praying for the recovery of the vehicle with an
alternative prayer for the payment of a sum of money
should the vehicle not be returned. Upon petitioner's
motion and the filing of a bond in the amount of
P169,161.00 the lower court issued a writ of replevin.
The court, however, cautioned petitioner that should
summons be not served on the defendants within thirty
(30) days from the writ's issuance, the case would be
dismissed to failure to prosecute. The warning was
based on what the court perceived to be the deplorable
practice of some mortgagees of "freezing (the)
foreclosure or replevin cases" which they would so
"conveniently utilize as a leverage for the collection of
unpaid installments on mortgaged chattels."
The service of summons upon the spouses Manahan
was caused to be served by petitioner at No. 35 Lantana
St., Cubao, Quezon City. The original of the summons
had the name and the signature of private respondent
Roberto M. Reyes indicating that he received, on 14
October 1987, a copy of the summons and the
complaint. Forthwith, petitioner, through its Legal
Assistant, Danilo E. Solano, issued a certification to the
effect that it had received from Orson R. Santiago, the
deputy sheriff of the Regional Trial Court of Manila,
Branch 20, the Ford Cortina seized from private
respondent Roberto M. Reyes, the John Doe referred to
in the complaint, in Sorsogon, Sorsogon. On 20 October
1987, the lower court came out with an order of seizure.
Alleging possession in good faith, private respondent
filed, on 26 October 1987, a motion for an extension of
time within which to file his answer and/or a motion for
intervention. The court granted the motion.
A few months later, or on 18 February 1988, the court
issued an order which, in part, stated that, an order for
the seizure of personal property was issued on October
20, 1987 in pursuance to a previous order of the Court
dated October 13, 1987. However, to date, there is no
showing that the principal defendants were served with
summons inspite of the lapse of four (4) months.
"Considering, this is a replevin case and to forestall the
evils that arise from this practice, plaintiff failing to heed
the Order dated October 13, 1987, particularly second
paragraph thereof, the above- entitled case is hereby
ordered DISMISSED for failure to prosecute and further
ordering the plaintiff to return the property seized with all
its accessories to defendant John Doe in the person of
Roberto M. Reyes.
On 26 February 1988, petitioner filed a notice of
dismissal of the case "without prejudice and without
pronouncement as to costs, before service of Summons
and Answer, under Section 1, Rule 17, of the Rules of
Court." It also sought in another motion the withdrawal of
the replevin bond. In view of the earlier dismissal of the
case (for petitioner's failure to prosecute), the court, on
02 March 1988, merely noted the notice of dismissal and
denied the motion to withdraw the replevin bond
considering that the writ of replevin had meanwhile been
implemented.
On 09 March 1988, private respondent filed a motion
praying that petitioner be directed to comply with the
court order requiring petitioner to return the vehicle to
him. In turn, petitioner filed, on 14 March 1988, a motion
for the reconsideration of the orders of 18 February 1988
and 02 March 1988 contending that: (a) the dismissal of
the case was tantamount to adjudication on the merits
that thereby deprived it with the remedy to enforce the
promissory note, the chattel mortgage and the deed of
assignment, under Section 3, Rule 117, of the Rules of
Court; (b) the order to return the vehicle to private
respondent was a departure from jurisprudence
recognizing the right of the mortgagor to foreclose the
property to respond to the unpaid obligation secured by
the chattel mortgage, and (c) there were no legal and
factual bases for the court's view that the filing of the
replevin case was "characterized (by) evil practices."
On 20 April 1988, the court granted petitioner's motion
for reconsideration and accordingly recalled the order
directing the return of the vehicle to private respondent,
set aside the order dismissing the case, directed
petitioner "to cause the service of summons together
with a copy of the complaint on the principal defendants
within five (5) days from receipt" thereof at petitioners
expense, and ordered private respondent to answer the
complaint.
A few months later, or on 02 August 1988, petitioner filed
a motion to declare private respondent in default. The
court granted the motion on that same day and declared
private respondent "in default for his failure to file the . . .
answer within the reglementary period."
The court likewise granted petitioner's motion to set the
case for the presentation, ex parte, of evidence.
Petitioner, thereupon, submitted the promissory note, the
deed of chattel mortgage, the deed of assignment, a
statement of account in the name of Florencia Manahan
and two demand letters.
On 27 February 1989, the trial court rendered a decision
dismissing the complaint against the Manahans for
failure of petitioner to prosecute the case against them. It
also dismissed the case against private respondent for
failure of petitioner to show any legal basis for said
respondent's liability.
II. APPEAL TO THE CA
Petitioner has asserted that a suit for replevin aimed at
the foreclosure of the chattel is an action quasi in rem
which does not necessitate the presence of the principal
obligors as long as the court does not render any
personal judgment against them.
III. CA
Petitioner’s argument did not persuade the appellate
court, the latter holding that, In action quasi in rem an
individual is named as defendant and the purpose of the
proceeding is to subject his interest therein to the
obligation or lien burdening the property, such as
proceedings having for their sole object the sale or
disposition of the property of the defendant, whether by
attachment, foreclosure, or other form of remedy. In the
case at bar, the court cannot render any judgment
binding on the defendants spouses for having allegedly
violated the terms and conditions of the promissory note
and the contract of chattel mortgage on the ground that
the court has no jurisdiction over their persons, no
summons having been served on them. That judgment,
it rendered, is void for having denied the defendants
spouses due process of law which contemplates notice
and opportunity to be heard before judgment is
rendered, affecting one's person or property.
"It is an undisputed fact that the subject motor vehicle
was taken from the possession of said Roberto M.
Reyes, a third person with respect to the contract of
chattel mortgage between the appellant and the
defendants spouses Manahan. The appellate court,
subsequently, denied petitioner's motion for
reconsideration.
IV. PETITION FOR REVIEW ON CERTIORARI
assails the decision of the Court of Appeals
Petitioner insists that a mortgagee can maintain an
action for replevin against any possessor of the object of
a chattel mortgage even if the latter were not a party to
the mortgage.
V. ISSUE
Whether or not a mortgagee can maintain an action for
replevin against any possessor of the object of a chattel
mortgage even if the latter were not a party to the
mortgage.
VI. SUPREME COURT’S RULING
The Supreme Court affirmed the decision of the CA. It
ruled that The appellate court, accordingly, acted well in
arriving at the questioned judgment.
Replevin, broadly understood, is both a form of principal
remedy and of a provisional relief. It may refer either to
the action itself, i.e., to regain the possession of personal
chattels being wrongfully detained from the plaintiff by
another, or to the provisional remedy that would allow
the plaintiff to retain the thing during the pendency of the
action and hold it pendente lite. The action is primarily
possessory in nature and generally determines nothing
more than the right of possession. Replevin is so usually
described as a mixed action, being partly in rem and
partly in personam — in rem insofar as the recovery of
specific property is concerned, and in personam as
regards to damages involved. As an "action in rem," the
gist of the replevin action is the right of the plaintiff to
obtain possession of specific personal property by
reason of his being the owner or of his having a special
interest therein. Consequently, the person in possession
of the property sought to be replevied is ordinarily the
proper and only necessary party defendant, and the
plaintiff is not required to so join as defendants other
persons claiming a right on the property but not in
possession thereof. Rule 60 of the Rules of Court allows
an application for the immediate possession of the
property but the plaintiff must show that he has a good
legal basis, i.e., a clear title thereto, for seeking such
interim possession.
In effect then, the mortgagee, upon the mortgagor's
default, is constituted an attorney-in- fact of the
mortgagor enabling such mortgagee to act for and in
behalf of the owner. Accordingly, that the defendant is
not privy to the chattel mortgage should be
 inconsequential. By the fact that the object of replevin is
traced to his possession, one properly can be a
defendant in an action for replevin. It is here assumed
that the plaintiffs right to possess the thing is not or
cannot be disputed.
A chattel mortgagee, unlike a pledgee, need not be in,
nor entitled to the possession of the property unless and
until the mortgagor defaults and the mortgagee
thereupon seeks to foreclose thereon. Since the
mortgagee's right of possession is conditioned upon the
actual fact of default which itself may be controverted,
the inclusion of other parties, like the debtor or the
mortgagor himself, may be required in order to allow a
full and conclusive determination of the case. When the
mortgagee seeks a replevin in order to effect the
eventual foreclosure of the mortgage, it is not only the
existence of, but also the mortgagor's default on, the
chattel mortgage that, among other things, can properly
uphold the right to replevy the property. The burden to
establish a valid justification for that action lies with the
plaintiff. An adverse possessor, who is not the
mortgagor, cannot just be deprived of his possession, let
alone be bound by the terms of the chattel mortgage
contract, simply because the mortgagee brings up an
action for replevin.
2. CHIAO LIONG TAN v IAC, G.R. No. 106251,
November 19, 1993 ACOSTA
VII. Established Facts
Petitioner Chiao Liong Tan instituted a suit for
replevin and damages against his brother, Tan Ban
Yong, in the RTC of Manila.
Chiao alleges that he is the owner of an Isuzu Elf van as
shown in its Certificate of Registration. He alleged that
he let his brother use the van as it was being used in his
company, CLT Industries. Lastly, he claims that his
brother refused to return it.
Tan Ban Yong alleged that CLT Industries is a family
industry. He explained that he paid for the vehicle
amounting to P140,000 which he loaned from Tan Pit
Sin, his friend and classmate. He adds that Chiao only
paid P5,000 as down payment. The Certificate of
Registration shows Chiao’s name because Tan Ban
Yong would be leaving for the United States and that
Chaio would be the one remaining in the Philippines.
Tan Ban Yong’s testimony was corroborated by Tan Pit
Sin and Gina Lu, an employee of Balintawak Isuzu.
According to Gina Lu, the name on the receipt of the
vehicle is Chiao because the latter paid for the deposit
but the full payment was made by Tan Ban Yong.
VIII. RTC of Manila
The RTC of Manila declared Tan Ban Yong as the owner
and ordered Chiao to deliver possession of vehicle to his
brother or, alternatively, pay P138,000. In addition,
damages are awarded amounting to P20,000.
IX. CA
The CA affirmed the decision of the RTC of Manila.
X. SC
Chiao alleges that the CA erred in finding Tan Ban
Yong’s witnesses credible and disregarding the
Certificate of Registration
XI. ISSUE: 1. [Procedural] W.O.N Replevin can
pass upon the question of ownership
2. [Substantive] W.O.N Tan Ban Yong
is the owner of the vehicle
XII. Ruling
1. Yes.
Replevin is only a provisional remedy where the replevin
plaintiff claims immediate delivery of personal property
pending the judgment of the trial court in a principal
case.
GENERAL RULE: the action of replevin is
possessory in character and determines nothing
more than the right of possession
EXCEPTION: when the title to the property is
distinctly put in issue by the defendant's plea, the
question of ownership may be resolved in the same
proceeding. The reason behind this is the policy to
settle in one action all the conflicting claims of the parties
to the possession of the property in controversy
Although a "replevin" action is primarily one for the
possession of property, yet it is sufficiently flexible to
authorize a settlement of all equities between the
parties, arising from or growing out of the main
controversy. Thus, in an action for replevin where the
defendant is adjudged entitled to possession, he need
not go to another forum to procure relief for the return of
the replevied property or secure a judgment for the value
of the property in case the adjudged return thereof could
not be had.

In this case, the petitioner should have filed in the trial
court an action to recover possession of the Isuzu Elf
van as a main case which was in the possession of the
private respondent. Logically, the basis of petitioner's
cause of action should have been his ownership of said
van.
2. Yes.
The New Civil Code recognizes cases of implied trust
other than those enumerated therein. Thus, although no
specific provision could be cited to apply to the parties
herein, it is undeniable that an implied trust was created
when the certificate of registration of the motor vehicle
was placed in the name of the petitioner although the
price thereof was not paid by him but by private
respondent.
3. Northern Motors Inc., vs Hon. Ameurfina
Melencia Herrera GR. L-32674 February 22,
1973 Cabel
Facts: Petitioner filed a complaint against respondent
Ralph Taguba and another person designated as "John
Doe," alleging inter alia that on Taguba executed in favor
of plaintiff a promissory note, binding himself to pay
plaintiff the sum of P18,623.75 in monthly installments
as follows: P528.75 on March 15, 1969 and P517.00
every 15th day of the month for 35 months beginning
April 15, 1969 until February 15, 1972, with 12% interest
per annum on the unpaid installments.
Taguba executed a chattel mortgage over a
1966 Impala sedan as a security for payment. According
to the mortgage, upon default of payment on any
installment, the loan shall at once become due and
payable, and (on demand) the mortgaged car shall be
delivered by the mortgagor to the mortgagee. Otherwise,
the mortgagee is authorized to take possession of the
car wherever it may be found and have it brought to
Manila. The mortgagee has the option of (a) selling the
mortgaged property, (b) cancelling the contract of sale
with the mortgagor, (c) extrajudicially foreclosing the
mortgage, (d) judicially foreclosing the mortgage, or (e)
exacting fulfillment of the mortgage obligation by
ordinary civil action. Taguba paid only the sum of
P964.26, and another sum of P35.74 as interest, but
failed and refused, in spite of repeated demands, to pay
the other installments due, thereby making the entire
unpaid balance of the promissory note in the sum of
P17,659.49 due and demandable, with interest.
The plaintiff has elected to avail itself of the
option of extrajudicially foreclosing the mortgage. The
mortgaged vehicle was found in Rizal in the possession
of Taguba. Plaintiff had demanded the delivery of the
said vehicle, pursuant to the terms of the chattel
mortgage, but defendant Taguba failed and refused to
make such delivery. Plaintiff prayed that upon approval
of the bond a writ of replevin be issued for the seizure
of the car wherever it may be found and for its delivery to
plaintiff. He also prayed that after hearing, the plaintiff be
adjudged as having the rightful possession and
ownership of the car and that in default of delivery,
defendants be sentenced to pay plaintiff the sum of
P17,659.49 with interest thereon at the rate of 12% per
annum from June 19, 1969, until said principal sum is
fully paid, and a sum equivalent to 25% of the amount
due as and for attorney's fees and costs of collection,
and the costs of suit.
Attached to the complaint is a bond for
P36,000.00 and an "Affidavit of Replevin" executed by
an officer of plaintiff corporation.
Respondent judge denied petitioner's prayer
for a writ of replevin because the rules "require that an
affidavit be submitted alleging that the plaintiff is the
owner of the property claimed, or that he is entitled to its
possession"; and therefore the affidavit attached to the
complaint is insufficient, for it is clear therefrom that
plaintiff "is not the owner of the motor vehicle mortgaged
to it; and it is not entitled to its possession merely
because the mortgagor has failed to pay the account
guaranteed by the mortgage."
The MR was also denied. It is Her Honor's view that
after the mortgagor has breached the chattel mortgage
and refused to deliver the mortgaged chattel to a public
officer for foreclosure sale, a replevin suit should be
instituted by the mortgagee, "but only for the purpose of
delivering the chattel to the public officer for foreclosure
sale". Respondent judge further stated that there being
no allegation that plaintiff mortgagee has asked or
directed a public officer to foreclose the mortgage and
that the mortgagor had refused to surrender the
mortgaged chattel to said public officer, it cannot be held
that either the public officer or the mortgagee is entitled
to replevin; that the present complaint seeks "that
plaintiff be adjudged to have rightful possession" over
the chattel without qualification whatsoever which, in the
practical sense, can revest ownership in it of the
repossessed chattel in contravention of Article 2088 of
the Civil Code, and that even if the mortgagee has a
right of possession, that right is not unqualified but is
subject to the obligation of delivering the possession of
the mortgaged chattel to the public officer
foreclosure.
Issue: Did the respondent judge err in not issuing the
replevin?
Held: Yes
Original action for certiorari and mandamus
The Rules do not require that in an action for
replevin, the plaintiff should allege that the "mortgagee
has asked or directed a public officer to foreclose the
mortgage and that the mortgagor has refused to
surrender the mortgaged chattel to such public officer."
All what is required by Section 2 of Rule 60 is
that upon, applying for an order for replevin, the
plaintiff must show that he is "the owner of the
property claimed, particularly describing it, or is
entitled to the possession thereof"; that the property
is wrongfully detained by the defendant with, an
allegation on the cause of detention; that the same
has not been taken for any tax assessment or fine
levied pursuant to law nor seized under any
execution, or an attachment against the property of
such plaintiff or if so seized that it is exempt from
seizure. The affidavit must also state the actual
value of the property. The affidavit of S.M. Laureola,
Assistant to the General Manager of Northern Motors,
Inc. attached to the complaint, substantially complies
with the aforecited requirements.
In determining the sufficiency of the
application for writ of replevin, the allegations
thereof and the recitals of the documents appended
thereto and made part thereof should be considered.
Thus it is alleged in the complaint that "it is also
expressly agreed between the parties that in case of
default on the part of defendant, as mortgagor therein,
the mortgaged motor vehicle shall be delivered, on
demand, to plaintiff, as mortgagee therein, free of all
charges, and should the mortgagor not deliver the same
as aforesaid, the mortgagee is authorized to take
possession of said property wherever it may be found ..."
(par. 4); that defendant Taguba "failed and refused, as
he fails and refuses, in spite of repeated demands, to
pay the plaintiff P81.49 of the said installment due 15
April 1969 and the thirteen (13) installments due 15 May
1969 thru 15 May 1970, thereby making the balance of
said note, the sum of P17,659.49, and interest from 19
June 1969, to become immediately due, payable and
defaulted" (par. 6); and that "the mortgaged motor
vehicle is now in Rizal in the possession of defendants
for who have no legal right to the possession thereof —
plaintiff having made demand for the delivery of the said
motor vehicle pursuant to the terms of the chattel
mortgage notwithstanding which demand defendants
have failed and refused to do so" (par. 7). These
allegations of the complaint were by reference made part
of J. M. Laureola's affidavit.
We find nothing from the provisions of
Section 14 of the Chattel Mortgage Law (Act 1508)
that would justify the trial court's insistence, that
after default by the mortgagor and before the
mortgagee can file an action to recover possession
of the mortgaged chattel, the mortgagee must first
ask the sheriff to foreclose the mortgage and it is
only when the mortgagor refuses to surrender the
chattel to the sheriff that the action of replevin can
be instituted. While Section 14 of Act 1508 places
upon "a public officer" the responsibility of
conducting the sale of the mortgaged chattel, there
is nothing in said statute which would authorize the
officer to seize the mortgaged property; and that for
the recovery of possession of said property, where
the right is disputed, "the creditor must proceed
along the channels by action in court." The basic
reason why the creditor should initiate such action
is because of the circumstances that the creditor's
right of possession of the subject-matter of the
chattel mortgage, as a preliminary to an extra-
judicial foreclosure proceeding, is conditioned upon
the fact of actual default on the part of the principal
obligor, and the existence of this fact may naturally
be the subject of controversy. In case of such
default and the mortgagee refuses upon demand, to
surrender possession of the mortgaged chattel so
that it may be sold at public auction pursuant to
Section 14 of Act 1508, it would certainly be an
exercise in futility for the mortgagee to first request
or direct the sheriff to "foreclose the mortgage" or
take possession of the property, before filing an
action in court to recover its possession. Such a
procedure is completely unnecessary not only because
the sheriff has no duty or authority in the first instance to
seize the mortgaged property, but also because
whenever the sheriff proceeds under section 14 of the
Chattel Mortgage Law, he becomes pro hac vice the
mere agent of the creditor. In any event it is only upon
receiving the order of the Court requiring the sheriff to
take forthwith such property into his custody, that the
duty of said officer to take possession of the mortgaged
chattel arises (Section 4, Rule 60, Revised Rules of
Court). It was therefore error for the court a quo to hold
that petitioner has not sufficiently averred its right to the
possession of the property sought to be recovered.
There is also no support for the assertion that the
petitioner seeks to appropriate the property given by way
of mortgage or dispose of it in a manner violative of
Article 2088 of the new Civil Code.

The essence of pacto commissorio, which is prohibited

by Article 2088 of the Civil Code, is that ownership of the
security will pass to the creditor by the mere default of
the debtor. In the present case, the petitioner, exercising
one of the options open to it under the terms of the
chattel mortgage, elected to extrajudicially foreclose the
mortgage, and as a step preliminary to such foreclosure,
sought for the possession of the mortgaged car and in
the alternative, prayed for the payment by the private.
No automatic revesting of title on the creditor was ever
contemplated, for the exercise of the remedies granted
to the creditor by the deed of chattel mortgage of
foreclosing the chattel mortgage or exacting the
fulfillment of the obligation thru court action is by its very
nature anathema to the concept of pacto commissorio.
Rule 61 Support Pendente Lite
1. MANUEL J. C. REYES, vs. HON. LEONOR INES-
LUCIANO G.R. No. L-48219 February 28, 1979
(CRUZ)
I. COMPLAINT
The private petitioner, Celia Ilustre-Reyes, filed in the
Juvenile and Domestic Relations Court of Quezon City a
complaint dated June 3, 1976 against her husband,
Manuel J. C. Reyes, for legal separation on the ground
that the defendant had attempted to kill plaintiff.
II. ESTABLISHED FACTS
Defendant went to V. Ilustre and attacked plaintiff. He
pummeled her with fist blows that floored her, then held
her head and, with intent to kill, bumped it several times
against the cement floor. When she ran upstairs to her
father for protection, he pushed her at the stairway of 13
flights and she fell sliding to the ground floor.
Determined to finish her off, he again gave her a strong
swing at her abdomen which floored her half
unconscious. Were it not for plaintiff's father, he would
have succeeded killing her;
On May 26, 1976, although on May 11 previous she
ceased holding office with defendant at Bel-Air
Apartments elsewhere adverted to, she went thereto to
get her overnight bag. Upon seeing her, defendant
yelled at her to get out of the office. When he did not
mind him, he suddenly doused her with a glass of grape
juice, kicked her several times that landed at her back
and nape, and was going to hit her with a steel tray as
her driver, Ricardo Mancera, came due to her screams
for help. For fear of further injury and for life, she rushed
to Precinct 5 at united Nations Avenue, Manila
Metropolitan Police, for assistance and protection
III. PLAINTIFF APPLIED FOR SUPPORT PENDETE
LITE – GRANTED
The plaintiff asked for support pendente lite for her and
her three children. The defendant, petitioner herein,
opposed the application for support pendente lite on the
ground that his wife had committed adultery with her
physician.
The respondent Judge issued an order dated March 15,
1977 granting plaintiff's prayer for alimony pendente
lite in the amount of P5,000.00 a month commencing
from June 1976.
IV. PETITIONER FILED MR
- reiterated that his wife is not entitled to support during
the pendency of the case, and, alleging that even if she
entitled, the amount awarded was excessive. The
respondent Judge reduced the amount from P5,000.00
to P44,00.00 a month in an order dated June 17, 1977.
V. PETITION FOR CERTIORARI
Manuel J. C. Reyes filed a petition for certiorari in the
Court of Appeals dated July 25, 1977 asking that the
order granting support pendente lite to private
respondent. Celia Ilustre-Reyes, be annulled on the
ground that the respondent Judge, Leonor Ines-Luciano,
had committed a grave abuse of discretion or that said
order be modified inasmuch as the amount awarded as
support pendente lite is excessive.
VI. CA – DISMISSED THE PETITION
Considering the plight of the wife during the pendency of
the case for legal separation and that the husband
appears to be financially capable of giving the support,
We believe that the petitioner has not presented a clear
case of grave abuse of discretion on the part of the
respondent in issuing the questioned orders. We see no
compelling reason to give it due course.
VI. PETITION FOR REVIEW ON CERTIORARI (RULE
45)
VII. RULING
A. W/N IN ACTIONS FOR LEGAL SEPARATION
THE WIFE IS ENTITLED TO SUPPORT FROM
THE HUSBAND DESPITE THE FACT THAT A
CASE FOR ADULTERY HAD BEEN FILED BY
THE HUSBAND AGAINST HER;
It is true that the adultery of the wife is a defense in an
action for support however, the alleged adultery of wife
must be established by competent evidence. The
allegation that the wife has committed adultery will not
bar her from the right receive support pendente lite.
Adultery is a good defense and if properly proved and
sustained wig defeat the action.
In the instant case, at the hearing of the application for
support pendente lite before the Juvenile and Domestic
Relations Court presided by the respondent Judge, Hon.
Leonor Ines-Luciano the petitioner did not present any
evidence to prove the allegation that his wife, private
respondent Celia Ilustre-Reyes, had committed adultery
with any person.
The petitioner has still the opportunity to adduce
evidence on the alleged adultery of his wife when the
action for legal separation is heard on the merits before
the Juvenile and Domestic Relations Court of Quezon
City. It is to be noted however, that as pointed out by the
respondents in their comment, the "private respondent
was not asking support to be taken from petitioner's
personal funds or wherewithal, but from the conjugal
property—which, was her documentary evidence ...". It
is, therefore, doubtful whether adultery will affect her
right to alimony pendente lite. In Quintana vs. Lerma, the
action for support was based on the obligation of the
husband to support his wife.
B. W/N IN DETERMINING THE AMOUNT OF
SUPPORT PENDENTE LITE, IT IS ENOUGH THAT
THE COURT ASCERTAIN THE KIND AND AMOUNT
OF EVIDENCE EVEN BY AFFIDAVITS ONLY OR
OTHER DOCUMENTARY EVIDENCE APPEARING IN
THE RECORDS.
In fixing the amount of monthly support pendente lite of
P4,000,00, the respondent judge did not act capriciously
and whimsically.
The amount of support pendente lite was reduced to
P4,000.00 inasmuch as the children are in the custody of
the petitioner and are being supported by him.
It is thus seen that the respondent judge acted with due
deliberation before fixing the amount of support
pendente lite in the amount of P4,000.00 a month.
In determining the amount to be awarded as
support pendente lite it is not necessary to go fully into
the merits of the case, it being sufficient that the court
ascertain the kind and amount of evidence which it may
deem sufficient to enable it to justly resolve the
application, one way or the other, in view of the merely
provisional character of the resolution to be entered.
Mere affidavits may satisfy the court to pass upon the
application for support pendente lite. It is enough that the
facts be established by affidavits or other documentary
evidence appearing in the record.
2. Lam vs Chua (2004) Culajara
II. Established Facts
The case commenced on March 11, 1994 upon
the filing of a petition for declaration of nullity of marriage
by Adriana Chua against Jose Lam in the Regional Trial
Court of Pasay City (Branch 109). Adriana alleged in the
petition that: she and Jose were married on January 13,
1984; out of said marriage, they begot one son, John
Paul Chua Lam; Jose was psychologically incapacitated
to comply with the essential marital obligations of
marriage but said incapacity was not then apparent;
such psychological incapacity of Jose became manifest
only after the celebration of the marriage when he
frequently failed to go home, indulged in womanizing
and irresponsible activities, such as, mismanaging the
conjugal partnership of gains; in order to save what was
left of the conjugal properties, she was forced to agree
with Jose on the dissolution of their conjugal partnership
of gains and the separation of present and future
properties; said agreement was approved by the
Regional Trial Court of Makati City (Branch 149) in a
Decision dated February 28, 1994; they had long been
separated in bed and board; they have agreed that the
custody of their child will be with her, subject to visitation
rights of Jose. Adriana prayed that the marriage between
her and Jose be declared null and void but she failed to
claim and pray for the support of their child, John Paul.
II. RTC
On June 23, 1994, Adriana 􏰀filed an Urgent
Motion to Re-Open 4 on the ground that she was able to
secure additional new evidence which were significant,
material and indispensable. On July 6, 1994, the trial
court granted the motion to re-open the case and held a
hearing for the reception of additional evidence. The
Pasay RTC admitted into evidence the Marriage
Contract dated May 25, 1977 between Jose and one
Celia Santiago, and another Marriage Contract dated
May 6, 1982 between Jose and one Evan Lock, showing
that Jose had been married twice before he married
Adriana in 1984.
Pasay RTC: declares the marriage between Lam and
Chua null and void for being bigamous in nature;
Likewise, respondent Jose Lam is hereby ordered to
give a monthly support to his son John Paul Chua Lam
in the amount of P20,000.00.
Jose filed a Motion for Reconsideration thereof
but only insofar as the decision awarded monthly
support to his son in the amount of P20,000.00. He
argued that there was already a provision for support of
the child as embodied in the decision dated February 28,
1994 of the Makati RTC wherein he and Adriana agreed
to contribute P250,000.00 each to a common fund for
the benefit of the child. Jose further alleged in his motion
that his contribution to the common fund had even
amounted to P500,000.00.
Pasay RTC: issued an Order denying Jose Lam's motion
for reconsideration ruling that the compromise
agreement entered into by the parties and approved by
the Makati RTC before the marriage was declared null
and void ab initio by the Pasay RTC, is of no moment
and cannot limit and/or affect the support ordered by the
latter court.
III. Court of Appeals
Jose then appealed the Pasay RTC's decision to
the Court of Appeals, assigning only a single error of the
trial court:
THE LOWER COURT SERIOUSLY ERRED IN
ORDERING APPELLANT TO GIVE A decreased needs, and with the means of the
MONTHLY SUPPORT OF P20,000.00 TO HIS
SON BECAUSE THIS WOULD, IN EFFECT,
REQUIRE APPELLANT TO PAY TWICE THE
MONTHLY SUPPORT FOR HIS CHILD.
BESIDES, THE LOWER COURT HAS DULY
ADMITTED THE FACT THAT THERE WAS A
DECISION ISSUED BY ANOTHER COURT
REQUIRING APPELLANT TO CONTRIBUTE
THE AMOUNT OF P250,000.00 AS THE
LATTER'S SHARE IN THE COMMON FUND
FOR SUPPORT OF THE CHILD, SUBJECT TO
PERIODIC ACCOUNTING AND TO BE
MANAGED BY APPELLEE
Court of Appeals promulgated its decision
affirming the Pasay RTC's decision in all respects. Jose
filed a motion for reconsideration of the Decision but in a
Resolution dated October 27, 1997, the Court of Appeals
denied the same.
IV. Issue Whether or not the Court of Appeals
committed an error
THE HONORABLE COURT OF APPEALS
ERRED IN DECIDING LEGAL QUESTIONS OF
SUBSTANCE NOT IN ACCORDANCE WITH LAW AND
JURISPRUDENCE IN FINDING THAT THE TRIAL
COURT'S RULING THAT THE COMPROMISE
AGREEMENT BETWEEN PETITIONER AND
RESPONDENT WHERE THEY BOUND THEMSELVES
TO CONTRIBUTE THE AMOUNT OF TWO HUNDRED
FIFTY THOUSAND PESOS (P250,000.00) TO A
COMMON FUND FOR THE BENEFIT OF THEIR CHILD
DOES NOT BAR THE TRIAL COURT IN ANNULMENT
CASE TO AGAIN AWARD SUPPORT IN FAVOR OF
THE CHILD.
V. Supreme Court - Jose filed the present petition for
review on certiorari under Rule 45 of the Rules of Court.
The Pasay RTC and the Court of Appeals are
both correct insofar as they ruled that the amount of
support is by no means permanent. In Advincula vs.
Advincula, we held that another action for support could
be filed again by the same plaintiff notwithstanding the
fact that the previous case for support filed against the
same defendant was dismissed. We further held in said
case that:
. . . Judgment for support does not become final.
The right to support is of such nature that its
allowance is essentially provisional; for during
the entire period that a needy party is entitled to
support, his or her alimony may be modified or
altered, in accordance with his increased or
giver. It cannot be regarded as subject to final
determination.
Thus, there is no merit to the claim of Jose that the
compromise agreement between him and Adriana, as
approved by the Makati RTC and embodied in its
decision dated February 28, 1994 in the case for
voluntary dissolution of conjugal partnership of gains, is
a bar to any further award of support in favor of their
child John Paul. The provision for a common fund for the
benefit of their child John Paul, as embodied in the
compromise agreement between herein parties which
had been approved by the Makati RTC, cannot be
considered 􏰀final and res judicata since any judgment
for support is always subject to modification, depending
upon the needs of the child and the capabilities of the
parents to give support.
The Court notes four circumstances that taint
the regularity of the proceedings and the decision
rendered by the trial court. First, the only ground alleged
in the petition for declaration of nullity of marriage filed
by Adriana with the Pasay RTC is the psychological
incapacity of Jose without any prayer for the support of
her child. Adriana presented, formally offered her
evidence in support of the petition and submitted the
case for decision as of May 12, 1994. 14 But on a
motion to re-open 􏰀led by her on June 23, 1994, the trial
court set the case for reception of evidence on July 6,
1994 and subsequently allowed Adriana to present
evidence of two previous marriages contracted by Jose
with other women to prove that the marriage between
Adriana and Jose was null and void for being bigamous.
It is only at the July 6, 1994 hearing that respondent
Adriana first claimed support for John Paul when she
testified in open court. The petition of Adriana was, in
effect, substantially changed by the admission of the
additional evidence. The ground relied on for nullity of
the marriage was changed from the psychological
incapacity of Jose to that of existence of previous
marriages of Jose with two different women with an
additional claim for support of the child. Such substantial
changes were not reflected in the petition filed with the
trial court, as no formal amendment was ever made by
Adriana except the insertion of the handwritten phrase
"And for respondent to support the child of petitioner in
an amount this Honorable Court may deem just and
reasonable" found at the ultimate paragraph of the
petition, as allowed by the Pasay RTC. There is nothing
on record to show that petitioner Jose was notified of the
substantial changes in the petition of Adriana. Second,
the Pasay RTC did not give Jose an opportunity to be
present on July 6, 1994 for the presentation of evidence
by Adriana and to refute the same. Third, the records do
not show that petitioner was sent a copy of the Order
dated July 6, 1994 wherein the trial court granted the
Urgent Motion to Re-Open of respondent Adriana and
forthwith allowed her to present her evidence to prove
that petitioner herein contracted previous marriages with
different women. Fourth, the evidence presented by
respondent regarding her claim for support for John Paul
is glaringly insufficient and cannot be made a valid basis
upon which the Pasay RTC could have determined the
monthly amount of P20,000.00 for the support to be
given to John Paul by petitioner Jose.
It is a serious error for the trial court to have
rendered judgment on issues not presented in the
pleadings as it was beyond its jurisdiction to do so. The
amendment of the petition to reflect the new issues and
claims against Jose was, therefore, indispensable so as
to authorize the court to act on the issue of whether the
marriage of Jose and Adriana was bigamous and the
determination of the amount that should have been
awarded for the support of John Paul. When the trial
court rendered judgment beyond the allegations
contained in the copy of the petition served upon Jose,
the Pasay RTC had acted in excess of its jurisdiction
and deprived petitioner Lam of due process.
The Pasay RTC should have been aware that in
determining the amount of support to be awarded, such
amount should be in proportion to the resources or
means of the giver and the necessities of the recipient,
pursuant to Articles 194, 201 and 202 of the Family
Code. It is incumbent upon the trial court to base its
award of support on the evidence presented before it.
The evidence must prove the capacity or resources of
both parents who are jointly obliged to support their
children as provided for under Article 195 of the Family
Code; and the monthly expenses incurred for the
sustenance, dwelling, clothing, medical attendance,
education and transportation of the child.
In this case, the only evidence presented by
respondent Adriana regarding her claim for support of
the child is her testimony. Evidently, such testimony
does not establish the amount needed by the child nor
the amount that the parents are reasonably able to give.
The matter of support is a question that may be raised
and threshed out before the Makati RTC as it was the
court that approved the Compromise Agreement, or
before the Pasay RTC where the petition for declaration
of nullity or annulment of marriage is filed. In the interest
of orderly administration of justice, the Court deems it
proper that the issue on support should be resolved by
the Pasay RTC where the claim for support of the child
was initiated by Adriana.
3. MA. CARMINIA C. CALDERON, represented
by her Attorney-in-Fact, Marycris V.
Baldevia, petitioner, vs. JOSE ANTONIO
F. ROXAS and COURT OF
APPEALS, respondents. Justiniano
Facts:
1. Petitioner Ma. Carminia C. Calderon and private
respondent Jose Antonio F. Roxas, were
married on December 4, 1985 and their union
produced four children.
I. Regional Trial Court of Paranaque City
1. On January 16, 1998, petitioner filed an Amended
Complaint for the declaration of nullity of their marriage
on the ground of psychological incapacity under Art. 36
of the Family Code of the Philippines.
2. On May 19, 1998, the trial court issued an
Order granting petitioner's application for
support pendente lite. Said order states in part:
. . . Accordingly, the defendant is
hereby ordered to contribute to the
support of the above-named minors,
(aside from 50% of their school tuition
fees which the defendant has agreed
to defray, plus expenses for books
and other school supplies), the sum of
P42,292.50 per month, effective May
1, 1998, as his share in the monthly
support of the children, until further
orders from this Court. The first
monthly contribution, i.e., for the
month of May 1998, shall be given by
the defendant to the plaintiff within five
(5) days from receipt of a copy of this
Order. The succeeding monthly
contributions of P42,292.50 shall be
directly given by the defendant to the
plaintiff without need of any demand,
within the first five (5) days of each
 month beginning June 1998. All
expenses for books and other school
supplies shall be shouldered by the
plaintiff and the defendant, share and
share alike. Finally, it is understood
that any claim for support-in-arrears
prior to May 1, 1998, may be taken up
later in the course of the proceedings
proper.
3. On February 11, 2003, private respondent filed a
Motion to Reduce Support citing, among other grounds,
that the P42,292.50 monthly support for the children as
fixed by the court was even higher than his then
P20,800.00 monthly salary as city councilor.
4. After hearing, the trial court issued an Order dated
March 7, 2005 granting the motion to reduce support
and denying petitioner's motion for spousal support,
increase of the children's monthly support pendente
lite and support-in-arrears. (1st IMPORTANT DATE)
5. Petitioner's motion for partial reconsideration of the
March 7, 2005 Order was denied on May 4, 2005.
6. On May 16, 2005, the trial court rendered its
Decision in Civil Case No. 97-0608 decreeing thus: (2nd
IMPORTANT DATE)
WHEREFORE, judgment is hereby
rendered declaring (sic):
1. Declaring null and void the
marriage between plaintiff [Ma.]
Carmina C. Roxas and defendant
Jose Antonio Roxas solemnized on
December 4, 1985 at San Agustin
Convent, in Manila…
2. Awarding the custody of the parties'
minor children Maria
Antoinette Roxas, Julian Roxas and
Richard Roxas to their mother herein
petitioner, with the respondent hereby
given his visitorial and or custodial
rights at [sic] the express conformity of
petitioner.
3. Ordering the respondent Jose
Antonio Roxas to provide support to
the children in the amount of
P30,000.00 a month, which support
shall be given directly to petitioner
whenever the children are in her
custody, otherwise, if the children are
in the provisional custody of
respondent, said amount of support
shall be recorded properly as the
amounts are being spent. For that
purpose the respondent shall then
render a periodic report to petitioner
and to the Court to show compliance
and for monitoring. In addition, the
respondent is ordered to support the
proper schooling of the children
providing for the payment of the tuition
fees and other school fees and
charges including transportation
expenses and allowances needed by
the children for their studies.
4. Dissolving the community property
or conjugal partnership property of the
parties as the case may be, in
accordance with law.
Let copies of this decision be
furnished the Office of the Solicitor
General, the Office of the City
Prosecutor, Parañaque City, and the
City Civil Registrar of Parañaque City
and Manila.
SO ORDERED.
7. Petitioner, through counsel filed a Notice of Appeal
from the Orders dated March 7, 2005 and May 4, 2005.
In her appeal brief, petitioner emphasized that she is not
appealing the Decision dated May 16, 2005 which had
become final as no appeal therefrom had been brought
by the parties or the City Prosecutor or the Solicitor
General. Petitioner pointed out that her appeal is "from
the RTC Order dated March 7, 2005, issued prior to the
rendition of the decision in the main case", as well as the
May 4, 2005 Order denying her motion for partial
reconsideration.
II. Court of Appeals:
1. CA dismissed the appeal on the ground that granting
the appeal would disturb the RTC Decision of May 16,
2005 which had long become final and executory. The
CA further noted that petitioner failed to avail of the
proper remedy to question an interlocutory order.
2. Petitioner's motion for reconsideration was likewise
denied by the CA.
III. Supreme Court:
1. Petitioner filed a petition for review on certiorari
under Rule 45 assailing the Decision dated September
9, 2008 and Resolution dated December 15, 2008 of the
Court of Appeals (CA) in CA-G.R. CV No. 85384. The
CA affirmed the Orders dated March 7, 2005 and May 4,
2005 of the Regional Trial Court (RTC) of Parañaque
City, Branch 260 in Civil Case No. 97-0608.

ISSUE: Whether the March 7, 2005 and May 4, 2005
Orders on the matter of support pendente lite are
interlocutory or final.
Held: The Rules of Court provide for the provisional
remedy of support pendente lite which may be availed of
at the commencement of the proper action or
proceeding, or at any time prior to the judgment or final
order. On March 4, 2003, this Court promulgated the
Rule on Provisional Orders which shall govern the
issuance of provisional orders during the pendency of
cases for the declaration of nullity of marriage,
annulment of voidable marriage and legal separation.
These include orders for spousal support, child support,
child custody, visitation rights, hold departure, protection
and administration of common property.
Petitioner contends that the CA failed to recognize that
the interlocutory aspect of the assailed orders pertains
only to private respondent's motion to reduce support
which was granted, and to her own motion to increase
support, which was denied. Petitioner points out that the
ruling on support in arrears which have remained
unpaid, as well as her prayer for
reimbursement/payment under the May 19, 1998 Order
and related orders were in the nature of final orders
assailable by ordinary appeal considering that the orders
referred to under Sections 1 and 4 of Rule 61 of
the Rules of Court can apply only prospectively. Thus,
from the moment the accrued amounts became due and
demandable, the orders under which the amounts were
made payable by private respondent have ceased to be
provisional and have become final.
We disagree.
The word interlocutory refers to something intervening
between the commencement and the end of the suit
which decides some point or matter but is not a final
decision of the whole controversy. An interlocutory order
merely resolves incidental matters and leaves something
more to be done to resolve the merits of the case. In
contrast, a judgment or order is considered final if the
order disposes of the action or proceeding completely, or
terminates a particular stage of the same
action. Clearly, whether an order or resolution is final or
interlocutory is not dependent on compliance or non-
compliance by a party to its directive, as what petitioner
suggests. It is also important to emphasize the
temporary or provisional nature of the assailed orders.
Provisional remedies are writs and processes available
during the pendency of the action which may be resorted
to by a litigant to preserve and protect certain rights and
interests therein pending rendition, and for purposes of
the ultimate effects, of a final judgment in the case. They
are provisional because they constitute temporary
measures availed of during the pendency of the action,
and they are ancillary because they are mere incidents
in and are dependent upon the result of the main
action. The subject orders on the matter of
support pendente lite are but an incident to the main
action for declaration of nullity of marriage.
Moreover, private respondent's obligation to give
monthly support in the amount fixed by the RTC in the
assailed orders may be enforced by the court itself, as
what transpired in the early stage of the proceedings
when the court cited the private respondent in contempt
of court and ordered him arrested for his refusal/failure
to comply with the order granting support pendente
lite. A few years later, private respondent filed a motion
to reduce support while petitioner filed her own motion to
increase the same, and in addition sought spousal
support and support in arrears. This fact underscores the
provisional character of the order granting
support pendente lite. Petitioner's theory that the
assailed orders have ceased to be provisional due to the
arrearages incurred by private respondent is therefore
untenable.
Under Section 1, Rule 41 of the 1997 Revised Rules of
Civil Procedure, as amended, appeal from interlocutory
orders is not allowed. Said provision reads:
SECTION 1. Subject of appeal. — An
appeal may be taken from a judgment
or final order that completely disposes
of the case, or of a particular matter
therein when declared by these Rules
to be appealable.
No appeal may be taken from:
(a) An order denying a motion for new
trial or reconsideration;
(b) An order denying a petition for
relief or any similar motion seeking
relief from judgment;
(c) An interlocutory order;
(d) An order disallowing or dismissing
an appeal;
(e) An order denying a motion to set
aside a judgment by consent,
confession or compromise on the
ground of fraud, mistake or duress, or
any other ground vitiating consent;
(f) An order of execution;
(g) A judgment or final order for or
against one or more of several parties
 or in separate claims, counterclaims,
cross-claims and third-party
complaints, while the main case is
pending, unless the court allows an
appeal therefrom; and
(h) An order dismissing an action
without prejudice;
In all the above instances where the
judgment or final order is not
appealable, the aggrieved party
may file an appropriate special civil
action under Rule 65. (Emphasis
supplied.) CDEaAI

The remedy against an interlocutory order not subject of

an appeal is an appropriate special civil action
under Rule 65 provided that the interlocutory order is
rendered without or in excess of jurisdiction or with grave
abuse of discretion. Having chosen the wrong remedy in
questioning the subject interlocutory orders of the RTC,
petitioner's appeal was correctly dismissed by the CA.

WHEREFORE, the petition for review

on certiorari is DENIED, for lack of merit. The Decision
dated September 9, 2008 and Resolution dated
December 15, 2008 of the Court of Appeals in CA-G.R.
CV No. 85384 are AFFIRMED.
Rule 62 Interpleader
1. Ocampo vs Tirona (2005) Nieto
I. Established Facts
Ocampo alleged that he is the owner of a parcel of land
(subject land) described in Transfer Certificate of Title
(TCT) No. 134359, with an approximate area of 500
square meters, located at Alvarez Street, Pasay City.
Ocampo bought the subject land from Rosauro Breton,
heir of the subject lands registered owner Alipio Breton
Cruz. Possession and administration of the subject land
are claimed to be already in Ocampos management
even though the TCT is not yet in his name. Tirona, on
the other hand, is a lessee occupying a portion of the
subject land.
According to [Ocampo], upon acquisition of ownership of
the subject premises, a formal written notice was given
to [Tirona] which was received by the latter on 9 March
1995. In recognition of [Ocampos] right of ownership
over the subject premises, [Tirona] paid some monthly
rentals due, however, on July 5, 1995, [Ocampo]
received a letter from Callejo Law Office of Room 513
Borja Bldg., 645 Sta. Cruz, Manila stating among others,
that, in view of the fact that the subject premises was
declared under area for priority development, [Tirona] is
invoking her right of first refusal and in connection
thereto [Tirona] will temporarily stop paying her monthly
rentals until and unless the National Housing Authority
have processed the pertinent papers as regards the
amount due to [Ocampo] by reason of the
implementation of the above law.
On 7 August 1995, [Ocampo] wrote a letter to [Tirona]
demanding upon [Tirona] to pay the rentals in arrears for
the months of April, May, June, July and August at the
rate of P1,200 a month and to vacate the premises.
Despite receipt of said letter, [Tirona] failed and refused
and still fails and refuses to heed [Ocampos] demands.
II. MTC
On 11 September 1995, Ocampo filed a complaint
docketed as Civil Case No. 754-95 for unlawful
detainer and damages against Tirona before the
MTC.
Tirona filed her answer on 27 September 1995.
Tirona asserted that Doa Lourdes Rodriguez Yaneza
actually owns the subject land.
Ocampo filed a motion to strike out the answer filed and
a motion for judgment on 10 October 1995. Ocampo
claimed that the answer was not verified; therefore, it
was as if no answer was filed.
On 12 October 1995, Tirona filed a motion with leave to
amend defendants answer. She alleged that she filed
her answer without the assistance of a lawyer due to
fear that she might be unable to file the required
pleading on time.
In her amended answer, Tirona maintained that Ocampo
is not the owner of the subject land. She stated that the
certificate of title to the subject land is not even
registered under Ocampos name. Tirona also alleged
that she has a right of first refusal in case of sale of the
land, pursuant to Presidential Decree (PD) Nos. 1517,
1893 and 1968.
The MTC ruled that Tirona does not have any reason
to suspend payment of rents until after PD No. 1517,
in relation to PD Nos. 1893 and 1968, is implemented
in her favor. Tironas non-payment of rents rendered
her occupation of the subject land illegal. As owner
of the subject land, Ocampo is entitled to its use and
enjoyment, as well as to recover its possession from
any person unlawfully withholding it.
Ocampo filed a motion for execution pending appeal on
24 January 1996,
while Tirona filed a notice of appeal on 25 January 1996.
The MTC directed its clerk of court to transmit the
records of the case, as well as the motion for execution
pending appeal, through an order issued on 29 January
1996.
The RTC issued an order on 26 February 1996 ordering
both parties to file their respective memoranda.
On 4 March 1996, Maria Lourdes Breton-Mendiola,
who claimed to be the owner of the subject land,
filed a motion with leave to file intervention before
the RTC.
III. RTC
In an order dated 11 March 1996, the RTC issued a writ
of execution pending appeal for the enforcement of the
MTCs decision.
In a separate order issued on the same date, the RTC
denied Maria Lourdes Breton-Mendiolas motion with
leave to file intervention. The RTC stated that granting
the motion to intervene would violate the 1964 Rules of
Court and jurisprudence.
Ocampo filed his memorandum on 21 March 1996. He
emphasized that Tironas assertion of a preferential right
of first refusal is a recognition of the sale by Rosauro
Breton of the subject land to him. Moreover, Tirona is not
qualified to claim this preferential right because she is no
longer a legitimate tenant. The payment of Tironas
monthly rent was already in arrears at the time Ocampo
filed the complaint against Tirona.
Tirona filed her memorandum also on 25 March 1996.
For the first time, Tirona disclosed that Alipio Breton is
the registered owner of the subject land and that he is
her landlord since 1962. When Alipio Breton died in
1975, his children, Rosauro Breton and Maria Lourdes
Breton-Mendiola, inherited the subject land. Tirona
claims she has never stopped paying her rent to Maria
Lourdes Breton-Mendiola. Tirona also stated that
Rosauro Breton could not transfer ownership to the
subject land to Ocampo. On 14 July 1978, Rosauro
Breton executed a deed of conveyance and waiver in
favor of his sister, Maria Lourdes Breton-Mendiola.
Rosauro Breton executed another deed of conveyance
and waiver in favor of Maria Lourdes Breton-Mendiola on
9 March 1995. Thus, Tirona claims, Ocampo cannot
legally acquire title from Rosauro Breton in view of the
waivers. Maria Lourdes Breton-Mendiola is Tironas
lessor, and is the only person who can validly file an
ejectment suit against Tirona.
RTC AFFIRMED THE RULING OF THE MTC that there
is therefore nothing in the record which would
warrant the Court to disturb the findings of fact and
law and the conclusions reached by the MTC.
IV. CA
The appellate court considered partition of the estate of
Alipio Breton as a prerequisite to Ocampos action. The
appellate court ruled that [u]ntil the partition of the estate
is ordered by the Regional Trial Court of Pasay City in
the pending partition proceedings and the share of each
co-heir is determined by metes and bounds, [Ocampo]
cannot rightfully claim that what he bought is part of the
property occupied by [Tirona].
WHEREFORE, the decision of the respondent court
is hereby SET ASIDE and judgment is hereby
rendered dismissing the complaint of the private
respondent in the court below.
Hence, this instant petition for review.
ISSUE: whether interpleader is necessary in this
case.
V. SC
When Tirona filed her answer before the MTC, she
raised the issue of ownership and ascribed ownership of
the subject lot to one Doa Lourdes Rodriguez Yaneza.
Tirona later changed her strategy and filed an amended
answer that ascribed ownership of the subject lot to
Maria Lourdes Breton-Mendiola. Tirona justified the
amendment by stating that she did not ask for the
assistance of a lawyer for fear of not being able to file
her answer on time. This excuse is flimsy considering
that Tirona first communicated to Ocampo through
Callejo Law Office. However, the MTC still allowed
Tirona to amend her answer. Tirona stated that there
was no violation of the lease agreement because she
paid her rent to the real owner, Maria Lourdes Breton-
Mendiola.
Contrary to Tironas position, the issue of ownership is
not essential to an action for unlawful detainer. The fact
of the lease and the expiration of its term are the only
elements of the action. The defense of ownership does
not change the summary nature of the action. The
affected party should raise the issue of ownership in an
appropriate action, because a certificate of title cannot
be the subject of a collateral attack.
Unlawful detainer being a summary proceeding, it was
error for the appellate court to include the issue of
ownership. Had the appellate court limited its ruling to
the elements to be proved in a case of unlawful detainer,
Ocampo need not even prove his ownership. When the
appellate court ruled that the case of unlawful detainer
had to wait for the results of the partition proceedings, it
effectively put ownership as the main issue in the case.
The issue of ownership opens a virtual Pandoras Box for
Tirona and her supposed intervenor, Maria Lourdes
Breton-Mendiola.
The good faith of Tirona is put in question in her
preference for Maria Lourdes Breton-Mendiola. As a
stakeholder, Tirona should have used reasonable
diligence in hailing the contending claimants to
court. Tirona need not have awaited actual
institution of a suit by Ocampo against her before
filing a bill of interpleader. An action for interpleader
is proper when the lessee does not know the person
to whom to pay rentals due to conflicting claims on
the property.

The action of interpleader is a remedy whereby a
person who has property whether personal or real,
in his possession, or an obligation to render wholly
or partially, without claiming any right in both, or
claims an interest which in whole or in part is not
disputed by the conflicting claimants, comes to
court and asks that the persons who claim the said
property or who consider themselves entitled to
demand compliance with the obligation, be required
to litigate among themselves, in order to determine
finally who is entitled to one or the other thing. The
remedy is afforded not to protect a person against a
double liability but to protect him against a double
vexation in respect of one liability. When the court orders
that the claimants litigate among themselves, there
arises in reality a new action and the former are styled
interpleaders, and in such a case the pleading which
initiates the action is called a complaint of interpleader
and not a cross-complaint.
Ocampo has the right to eject Tirona from the subject
land. All the elements required for an unlawful detainer
case to prosper are present. Ocampo notified Tirona that
he purchased the subject land from Tironas lessor.
Tironas continued occupation of the subject land
amounted to acquiescence to Ocampos terms. However,
Tirona eventually refused to pay rent to Ocampo, thus
violating the lease.
2. Wack Wack Golf and Country Club vs Lee E.
Won (L-23851, 30 SCRA 165) Pracuelles
Interpleader
FACTS: (NOTE) This is an appeal from the order of the
Court of First Instance of Rizal, in civil case 7656,
dismissing the plaintiff-appellant's complaint of
interpleader upon the grounds of failure to state a
cause of action and res judicata.
In its amended and supplemental complaint of
October 23, 1963, the Wack Wack Golf & Country
Club, Inc., a non-stock, civic and athletic corporation
duly organized under the laws of the Philippines, with
principal office in Mandaluyong, Rizal (hereinafter
referred to as the Corporation), alleged, for its first
cause of action, that the defendant Lee E. Won claims
ownership of its membership fee certificate 201, by
virtue of the decision rendered in civil case 26044 of
the CFI of Manila, entitled "Lee E. Won alias Ramon
Lee vs. Wack Wack Golf & Country Club, Inc." and
also by virtue of membership fee certificate 201-serial
no. 1478 issued on October 17, 1963 by Ponciano B.
Jacinto, deputy clerk of court of the said CFI of
Manila, for and in behalf of the president and the
secretary of the Corporation and of the People's Bank
& Trust Company as transfer agent of the said
Corporation, pursuant to the order of September 23,
1963 in the said case; that the defendant Bienvenido
A. Tan, on the other hand, claims to be lawful owner
of its aforesaid membership fee certificate 201 by
virtue of membership fee certificate 201-serial no.
1199 issued to him on July 24, 1950 pursuant to an
assignment made in his favor by "Swan, Culbertson
and Fritz," the original owner and holder of
membership fee certificate 201; that under its articles
of incorporation and by-laws the Corporation is
authorized to issue a maximum of 400 membership
fee certificates to persons duly elected or admitted to
proprietary membership, all of which have been
issued as early as December 1939; that it claims no
interest whatsoever in the said membership fee
certificate 201; that it has no means of determining
who of the two defendants is the lawful owner thereof;
that it is without power to issue two separate
certificates for the same membership fee certificate
201, or to issue another membership fee certificate to
the defendant Lee, without violating its articles of
incorporation and by-laws; and that the membership
fee certificate 201-serial no. 1199 held by the
defendant Tan and the membership fee certificate
201-serial No. 1478 issued to the defendant Lee
proceed from the same membership fee certificate
201, originally issued in the name of "Swan,
Culbertson and Fritz".
3. For its second cause of action. it alleged that
the membership fee certificate 201-serial no.
1478 issued by the deputy clerk of court of
court of the CFI of Manila in behalf of the
Corporation is null and void because issued in
violation of its by-laws, which require the
surrender and cancellation of the outstanding
membership fee certificate 201 before
issuance may be made to the transferee of a
new certificate duly signed by its president
and secretary, aside from the fact that the
decision of the CFI of Manila in civil case
26044 is not binding upon the defendant Tan,
holder of membership fee certificate 201-serial
no. 1199; that Tan is made a party because of
his refusal to join it in this action or bring a
separate action to protect his rights despite
the fact that he has a legal and beneficial
interest in the subject matter of this litigation;
and that he is made a part so that complete
relief may be accorded herein.
The Corporation prayed that (a) an order be issued
requiring Lee and Tan to interplead and litigate their
conflicting claims; and (b) judgment. be rendered,
after hearing, declaring who of the two is the lawful
owner of membership fee certificate 201, and ordering
the surrender and cancellation of membership fee
certificate 201-serial no. 1478 issued in the name of
Lee.
In separate motions the defendants moved to dismiss
the complaint upon the grounds of res judicata, failure
of the complaint to state a cause of action, and bar by
prescription. 1 These motions were duly opposed by
the Corporation. Finding the grounds of bar by prior
judgment and failure to state a cause of action well
taken, the trial court dismissed the complaint, with
costs against the Corporation.
In this appeal, the Corporation contends that the
court a quo erred (1) in finding that the allegations in
its amended and supplemental complaint do not
constitute a valid ground for an action of interpleader,
and in holding that "the principal motive for the
present action is to reopen the Manila Case and
collaterally attack the decision of the said Court"; (2)
in finding that the decision in civil case 26044 of the
CFI of Manila constitutes res judicata and bars its
present action; and (3) in dismissing its action instead
of compelling the appellees to interplead and litigate
between themselves their respective claims.
The Corporations position may be stated elsewise as
follows: The trial court erred in dismissing the
complaint, instead of compelling the appellees to
interplead because there actually are conflicting
claims between the latter with respect to the
ownership of membership fee certificate 201, and, as
there is not Identity of parties, of subject-matter, and
of cause of action, between civil case 26044 of the
CFI of Manila and the present action, the complaint
should not have been dismissed upon the ground
of res judicata.
On the other hand, the appellees argue that the trial
court properly dismissed the complaint, because,
having the effect of reopening civil case 26044, the
present action is barred by res judicata.
ISSUE: Whether the interpleader is the proper action.
HELD: NO. The action of interpleader, under
section 120 of the Code of Civil Procedure, 2 is a
remedy whereby a person who has personal property
in his possession, or an obligation to render wholly or
partially, without claiming any right to either, comes to
court and asks that the persons who claim the said
personal property or who consider themselves entitled
to demand compliance with the obligation, be required
to litigate among themselves in order to determine
finally who is entitled to tone or the one thing. The
remedy is afforded to protect a person not against
double liability but against double vexation in respect
of one liability. 3 The procedure under the Rules of
Court 4 is the same as that under the Code of Civil
Procedure, 5 except that under the former the remedy
of interpleader is available regardless of the nature of
the subject-matter of the controversy, whereas under
the latter an interpleader suit is proper only if the
subject-matter of the controversy is personal property
or relates to the performance of an obligation.
There is no question that the subject matter of the
present controversy, i.e., the membership fee
certificate 201, is proper for an interpleader suit. What
is here disputed is the propriety and timeliness of the
remedy in the light of the facts and circumstances
obtaining.
A stakeholder 6 should use reasonable diligence to
hale the contending claimants to court. 7 He need not
await actual institution of independent suits against
him before filing a bill of interpleader. 8 He should file
an action of interpleader within a reasonable time
after a dispute has arisen without waiting to be sued
by either of the contending claimants. 9 Otherwise, he
may be barred by laches 10 or undue delay. 11 But
where he acts with reasonable diligence in view of the
environmental circumstances, the remedy is not
barred. 12
Has the Corporation in this case acted with diligence,
in view of all the circumstances, such that it may
properly invoke the remedy of interpleader? We do
not think so. It was aware of the conflicting claims of
the appellees with respect to the membership fee
certificate 201 long before it filed the present
interpleader suit. It had been recognizing Tan as the
lawful owner thereof. It was sued by Lee who also
claimed the same membership fee certificate. Yet it
did not interplead Tan. It preferred to proceed with the
litigation (civil case 26044) and to defend itself
therein. As a matter of fact, final judgment was
rendered against it and said judgment has already
been executed. It is not therefore too late for it to
invoke the remedy of interpleader.
It has been held that a stakeholder's action of
interpleader is too late when filed after judgment has
been rendered against him in favor of one of the
contending claimants, 13 especially where he had
notice of the conflicting claims prior to the rendition of
the judgment and neglected the opportunity to
implead the adverse claimants in the suit where
judgment was entered. This must be so, because
once judgment is obtained against him by one
claimant he becomes liable to the latter.
Indeed, if a stakeholder defends a suit filed by one of
the adverse claimants and allows said suit to proceed
to final judgment against him, he cannot later on have
that part of the litigation repeated in an interpleader
suit. In the case at hand, the Corporation allowed civil
case 26044 to proceed to final judgment. And it
offered no satisfactory explanation for its failure to
implead Tan in the same litigation. In this factual
situation, it is clear that this interpleader suit cannot
prosper because it was filed much too late.
To now permit the Corporation to bring Lee to court
after the latter's successful establishment of his rights
in civil case 26044 to the membership fee certificate
201, is to increase instead of to diminish the number
of suits, which is one of the purposes of an action of
interpleader, with the possibility that the latter would
lose the benefits of the favorable judgment. This
cannot be done because having elected to take its
chances of success in said civil case 26044, with full
knowledge of all the fact, the Corporation must submit
to the consequences of defeat.
Besides, a successful litigant cannot later be
impleaded by his defeated adversary in an
interpleader suit and compelled to prove his claim
anew against other adverse claimants, as that would
in effect be a collateral attack upon the judgment.
In fine, the instant interpleader suit cannot prosper
because the Corporation had already been made
independently liable in civil case 26044 and,
therefore, its present application for interpleader
would in effect be a collateral attack upon the final
judgment in the said civil case; the appellee Lee had
already established his rights to membership fee
certificate 201 in the aforesaid civil case and,
therefore, this interpleader suit would compel him to
establish his rights anew, and thereby increase
instead of diminish litigations, which is one of the
purposes of an interpleader suit, with the possiblity
that the benefits of the final judgment in the said civil
case might eventually be taken away from him; and
because the Corporation allowed itself to be sued to
final judgment in the said case, its action of
interpleader was filed inexcusably late, for which
reason it is barred by laches or unreasonable
delay.
Rule 63 Declaratory Relief
1. DBM vs Manila’s Finest Retirees Association
(2007)
DEPARTMENT OF BUDGET AND MANAGEMENT,
represented by SECRETARY ROMULO L. NERI,
PHILIPPINE NATIONAL POLICE, represented by
POLICE DIRECTOR GENERAL ARTURO L.
LOMIBAO, NATIONAL POLICE COMMISSION,
represented by CHAIRMAN ANGELO T. REYES, AND
CIVIL SERVICE COMMISSION, represented by
CHAIRPERSON KARINA C. DAVID, petitioners, vs.
MANILA'S FINEST RETIREES ASSOCIATION, INC.,
represented by P/COL. FELICISIMO G. LAZARO
(RET.), AND ALL THE OTHER INP RETIREES,
respondents.
I. FACTS
In 1975, Presidential Decree (P.D.) No. 765 was issued
constituting the Integrated National Police (INP) to be
composed of the Philippine Constabulary (PC) as the
nucleus and the integrated police forces as components
thereof. Complementing P.D. No. 765 was P.D. No.
1184 dated August 26, 1977 (INP Law, hereinafter)
issued to professionalize the INP and promote career
development therein.
On December 13, 1990, Republic Act (R.A.) No. 6975 ,
entitled "AN ACT ESTABLISHING THE PHILIPPINE
NATIONAL POLICE UNDER A REORGANIZED
DEPARTMENT OF THE INTERIOR AND LOCAL
GOVERNMENT, AND FOR OTHER PURPOSES,"
hereinafter referred to as PNP Law, was enacted. Under
Section 23 of said law, the Philippine National Police
(PNP) would initially consist of the members of the INP,
created under P.D. No. 765, as well as the officers and
enlisted personnel of the PC.
A little less than eight (8) years later, or on February 25,
1998, R.A. No. 6975 (/laws/8490) was amended by R.A.
No. 8551 (/laws/10438), otherwise known as the
"PHILIPPINE NATIONAL POLICE REFORM AND
REORGANIZATION ACT OF 1998 (/laws/10438)."
Among other things, the amendatory law reengineered
the retirement scheme in the police organization.
Relevantly, PNP personnel, under the new law, stood to
collect more retirement benefits than what INP members
of equivalent rank, who had retired under the INP Law,
received.
Hence, on June 3, 2002, in the Regional Trial Court
(RTC) of Manila, all INP retirees, spearheaded by the
Manila's Finest Retirees Association, Inc., or the MFRAI
(hereinafter collectively referred to as the INP Retirees),
filed a petition for declaratory relief, thereunder
impleading, as respondents, the Department of Budget
and Management (DBM), the PNP, the National Police
Commission (NAPOLCOM), the Civil Service
Commission (CSC) and the Government Service
Insurance System (GSIS).
The petition alleged in gist that INP retirees were equally
situated as the PNP retirees but whose retirement
benefits prior to the enactment of R.A. No. 6975
(/laws/8490), as amended by R.A. No. 8551
(/laws/10438), were unconscionably and arbitrarily
excepted from the higher rates and adjusted benefits
accorded to the PNP retirees. Accordingly, in their
petition, the petitioning INP retirees pray that a
DECLARATORY JUDGMENT be rendered in their favor,
DECLARING with certainty that they, as INP-retirees,
are truly absorbed and equally considered as PNP-
retirees and thus, entitled to enjoy the SAME or
IDENTICAL retirement benefits being bestowed to PNP-
retirees by virtue of said PNP Law or Republic Act No.
6975 (/laws/8490), as amended by Republic Act 8551
(/laws/10438), with the corollary mandate for the
respondents- government agencies to effect the
immediate adjustment on their previously received
disparate retirement benefits, retroactive to its effectivity,
and with due payment thereof.
The GSIS moved to dismiss the petition on grounds of
lack of jurisdiction and cause of action. On the other
hand, the CSC, DBM, NAPOLCOM and PNP, in their
respective answers, asserted that the petitioners could
not claim the more generous retirement benefits under
R.A. No. 6975 because at no time did they become PNP
members, having retired prior to the enactment of said
law. DBM, NAPOLCOM and PNP afterwards filed their
respective pre-trial briefs.
II. RTC
The RTC came out with a decision holding that R.A. No.
6975, as amended, did not abolish the INP but merely
provided for the absorption of its police functions by the
PNP, and accordingly rendered judgment for the INP
retirees, DECLARING the INP Retirees entitled to the
same or identical retirement benefits and such other
benefits being granted, accorded and bestowed upon
the PNP Retirees under the PNP Law. The trial court
issued what it denominated as Supplement to the
Decision whereunder it granted the GSIS' motion to
dismiss and thus considered the basic petition as
withdrawn with respect to the latter.
III. APPEAL to the CA by the remaining
respondents namely, DBM, PNP, NAPOLCOM
and CSC
DBM, PNP, NAPOLCOM and CSC, interposed an
appeal to the CA whereat their appellate recourse
was docketed.
IV. CA
The CA, in its decision of July 7, 2005, affirmed
that of the trial court upholding the entitlement of the
INP retirees to the same or identical retirement
benefits accorded upon PNP retirees under R.A. No.
6975 (/laws/8490), as amended. Their motion for
reconsideration having been denied by the CA in its
equally assailed resolution of August 24, 2005.
V. Petition for review on certiorari under Rule
45
Sought to be set aside the issuances of the Court of
Appeals which affirmed in toto the decision of the
Regional Trial Court of Manila, a suit for declaratory
relief, declaring the herein respondents entitled to the
same retirement benefits accorded upon retirees of the
Philippine National Police (PNP) under Republic Act
(R.A.) No. 6975 , as amended by R.A. No. 8551 , and
ordering the herein petitioners to implement the proper
adjustments on respondents' retirement benefits. In the
main, it is petitioners' posture that R.A. No. 6975, clearly
abolished the INP and created in its stead a new police
force, the PNP. Prescinding therefrom, petitioners
contend that since the PNP is an organization entirely
different from the INP, it follows that INP retirees never
became PNP members. Ergo, they cannot avail
themselves of the retirement benefits accorded to PNP
members under R.A. No. 6975 and its amendatory law,
R.A. No. 8551. The petitioners also fault the trial court
for ordering the immediate adjustments of the
respondents' retirement benefits when the basic petition
filed before it was one for declaratory relief. To the
petitioners, such petition does not essentially entail
an executory process, the only relief proper under
that setting being a declaration of the parties' rights
and duties.
VI. ISSUE
Whether or not petitioner is correct in saying that
petition for declaratory relief does not essentially
entail an executory process, the only relief proper
under that setting being a declaration of the parties'
rights and duties.
VII. RULING
The Petition for review on certiorari filed by the petitioner
was DENIED and the assailed decision and resolution of
the CA was AFFIRMED
The INP was never, as posited by the petitioners,
abolished or terminated out of existence by R.A. No.
6975. For sure, nowhere in R.A. No. 6975 does the
words "abolish" or "terminate" appear in reference to
the INP. Instead, what the law provides is for the
"absorption," "transfer," and/or "merger" of the INP,
as well as the other offices comprising the PC-INP,
with the PNP. To "abolish" is to do away with, to
annul, abrogate or destroy completely; to "absorb"
is to assimilate, incorporate or to take in. "Merge"
means to cause to combine or unite to become
legally absorbed or extinguished by merger while
"transfer" denotes movement from one position to
another. Clearly, "abolition" cannot be equated with
"absorption." True it is that Section 90 of R.A. No.
6975 speaks of the INP "[ceasing] to exist" upon the
effectivity of the law. It ought to be stressed,
however, that such cessation is but the logical
consequence of the INP being absorbed by the
PNP. Far from being abolished then, the INP, at the
most, was merely transformed to become the PNP,
minus of course its military character and
complexion. Even the petitioners' effort at disclosing
the legislative intent behind the enactment of R.A.
No. 6975 cannot support their theory of abolition.
Rather, the Senate and House deliberations on the
bill that eventually became R.A. No. 6975 reveal
what has correctly been held by the CA in its
assailed decision: that the PNP was precisely
created to erase the stigma spawned by the
militarization of the police force under the PC-INP
structure.
With the conclusion herein reached that the INP was
not in fact abolished but was merely transformed to
become the PNP, members of the INP which include
the herein respondents are, therefore, not excluded
from availing themselves of the retirement benefits
accorded to PNP retirees under Sections 74 and 75
of R.A. No. 6975 , as amended by R.A. No. 8551. It
may be that respondents were no longer in the
government service at the time of the enactment of
R.A. No. 6975. This fact, however, without more,
would not pose as an impediment to the
respondents' entitlement to the new retirement
scheme set forth under the aforecited sections. The
Supreme Court agreed with the conclusion of the CA
stating that R.A. No. 6975 was not a retroactive
statute since it did not impose a new obligation to
pay the INP retirees the difference between what
they received when they retired and what would now
be due to them after R.A. No. 6975 was enacted.
Even so, that did not render the RTC's interpretation
of R.A. No. 6975 any less valid. The [respondents']
retirement prior to the passage of R.A. No. 6975 did
not exclude them from the benefits provided by R.A.
No. 6975 , as amended by R.A. No. 8551 , since
their membership in the INP was an antecedent fact
that nonetheless allowed them to avail themselves
of the benefits of the subsequent laws. R.A. No.
6975 considered them as PNP members, always
referring to their membership and service in the INP
in providing for their retirement benefits.
In a further bid to scuttle respondents' entitlement to
the desired retirement benefits, the petitioners fault
the trial court for ordering the immediate adjustments
of the respondents' retirement benefits when the
basic petition filed before it was one for declaratory
relief. To the petitioners, such petition does not
essentially entail an executory process, the only
relief proper under that setting being a
declaration of the parties' rights and duties.
Supreme Cour ruled that Petitioners' above posture
is valid to a point. However, the execution of
judgments in a petition for declaratory relief is not
necessarily indefensible. In Philippine Deposit
Insurance Corporation[PDIC] v. Court of Appeals,
wherein the Court affirmed the order for the
petitioners therein to pay the balance of the deposit
insurance to the therein respondents, we
categorically ruled:
Now, there is nothing in the nature of a
special civil action for declaratory relief
that proscribes the filing of a
counterclaim based on the same
transaction, deed or contract subject of
the complaint. A special civil action is
after all not essentially different from an
ordinary civil action, which is generally
governed by Rules 1 to 56 of the Rules
of Court, except that the former deals
with a special subject matter which
makes necessary some special
regulation. But the identity between their
fundamental nature is such that the
same rules governing ordinary civil suits
may and do apply to special civil actions
if not inconsistent with or if they may
serve to supplement the provisions of
the peculiar rules governing special civil
actions.
Similarly, in Matalin Coconut Co., Inc. v. Municipal
Council of Malabang, Lanao del Sur: the Court upheld
the lower court's order for a party to refund the amounts
paid by the adverse party under the municipal ordinance
therein questioned, stating:
 . . . Under Sec. 6 of Rule 64, the action
for declaratory relief may be converted
into an ordinary action and the parties
allowed to file such pleadings as may be
necessary or proper, if before the final
termination of the case "a breach or
violation of an . . . ordinance, should
take place." In the present case, no
breach or violation of the ordinance
occurred. The petitioner decided to pay
"under protest" the fees imposed by the
ordinance. Such payment did not affect
the case; the declaratory relief action
was still proper because the applicability
of the ordinance to future transactions
still remained to be resolved, although
the matter could also be threshed out in
an ordinary suit for the recovery of taxes
paid . . . In its petition for declaratory
relief, petitioner-appellee alleged that by
reason of the enforcement of the
municipal ordinance by respondents it
was forced to pay under protest the fees
imposed pursuant to the said ordinance,
and accordingly, one of the reliefs
prayed for by the petitioner was that the
respondents be ordered to refund all the
amounts it paid to respondent Municipal
Treasurer during the pendency of the
case. The inclusion of said allegation
and prayer in the petition was not
objected to by the respondents in their
answer. During the trial, evidence of the
payments made by the petitioner was
introduced. Respondents were thus fully
aware of the petitioner's claim for refund
and of what would happen if the
ordinance were to be declared invalid by
the court.
The Court sees no reason for treating this case
differently from PDIC and Matalin. This disposition
becomes all the more appropriate considering that the
respondents, as petitioners in the RTC, pleaded for the
immediate adjustment of their retirement benefits which,
significantly, the herein petitioners, as respondents in the
same court, did not object to. Being aware of said
prayer, the petitioners then already knew the logical
consequence if, as it turned out, a declaratory judgment
is rendered in the respondents' favor.
At bottom then, the trial court's judgment forestalled
multiplicity of suits which, needless to stress, would only
entail a long and arduous process. Considering their
obvious advanced years, the respondents can hardly
afford another protracted proceedings. It is thus for this
Court to already write finis to this case.
2. Martelino v National Home Mortgage Finance
Corp., G.R. No. 160208, June 30, 2008
ACOSTA
I. Established Facts
Petitioners Rafael Martelino et al obtained housing loans
from respondents, the National Home Mortgage Finance
Corporation (NHMFC) and the Home Development
Mutual Fund (HDMF). The loans were released to
Shelter Philippines Inc. (Shelter) who would develop the
subdivision. However, Shelter failed to develop the
subdivision. Then, NHMFC and HDMF initiated
foreclosure proceedings.
Petitioners RAFAEL R. MARTELINO et al. filed a petition
for declaratory relief and prohibition with urgent prayer
for the issuance of a temporary restraining order and/or
preliminary injunction before the RTC of Caloocan.
They sought a declaration from the RTC:
(1) that their right as house and lot buyers to suspend
payment to Shelter for its failure to fully develop the
subdivision also applied to respondents who released
their loans directly to Shelter; and
(2) that during the suspension of payment, respondents
should not assess them accrued interests and penalties.
Petitioners further prayed that they be allowed to pay
their housing loans without interest and penalties.
II. RTC of Caloocan
The RTC of Caloocan set the preliminary injunction
hearing but the summons were served on the NHMFC
and Sheriff Castillo only. Then, the RTC issued the writ
of preliminary injunction to prevent respondents from
foreclosing the mortgage.
NHMFC filed a Motion to Dismiss the Petition on the
ground that the RTC had no jurisdiction over its person
or over the subject matter of the case.
HDMF moved to set aside the preliminary injunction on
ground that it was not notified of the hearing.
Thus, the RTC of Caloocan set aside its order granting
the writ of preliminary injunction and dismissed the case
on ground that the petition was vague.
 suspend payment, for their guidance. Thus, the RTC
III. CA could no longer assume jurisdiction over the action for
declaratory relief because its subject was breached
The CA affirmed the decision of the RTC of Caloocan. before filing the action.

IV. ISSUES: 3. It depends.

1. [Procedural] W.O.N the preliminary injunction
order against HDMF is valid
2. [Procedural] W.O.N the petition for declaratory
relief and prohibition was properly dismissed
3. [Procedural] W.O.N the Court may allow
conversion of petition for declaratory relief and
prohibition into an ordinary action.
V. Ruling
1. No.
Section 5, Rule 58 of the Rules of Court expressly states
that no preliminary injunction shall be granted without
hearing and prior notice to the party or person sought to
be enjoined.
In this case, petitioners even admit that the HDMF was
not notified of the preliminary injunction hearing.
In De La Llana, etc., et al. v. Alba, etc., et al., where this
Court considered a petition erroneously entitled Petition
for Declaratory Relief and/or for Prohibition as an action
for prohibition. That case involved the constitutionality of
Batas Pambansa Blg. 129 or the Judiciary
Reorganization Act of 1980. Citing De La Llana, Justice
Florenz D. Regalado opined in his book “that if the
petition has far-reaching implications and it raises
questions that should be resolved, it may be treated
as one for prohibition.”
In this case, although Section 6, Rule 63 might allow
such course of action, the respondents did not argue the
point, and we note petitioner’s failure to specify the
ordinary action they desired. Furthermore, they raised it
for the first time in appeal. Thus, it cannot be
entertained.

2. Yes.
Section 1, Rule 63, provides “a person must file a
petition for declaratory relief before breach or violation of
a deed, will, contract, other written instrument, statute,
executive order, regulation, ordinance or any other
governmental regulation.”

In the case of Tambunting Jr. v Sumabat, the Court

stated:
“The purpose of the action [for declaratory relief] is to
secure an authoritative statement of the rights and
obligations of the parties under a statute, deed, contract,
etc. for their guidance in its enforcement or compliance
and not to settle issues arising from its alleged breach. It
may be entertained only before the breach or
violation of the statute, deed, contract, etc. to which
it refers. Where the law or contract has already been
contravened prior to the filing of an action for declaratory
relief, the court can no longer assume jurisdiction over
the action. Under such circumstances, inasmuch as a
cause of action has already accrued in favor of one or
the other party, there is nothing more for the court to
explain or clarify short of a judgment or final order.”

In this case, petitioners had already suspended paying

their amortization payments. Their actual suspension of
payments defeated the purpose of the action to secure
an authoritative declaration of their supposed right to