Provisional Remedies: Preliminary Attachment

PROVISIONAL REMEDIES
PRELIMINARY ATTACHMENT
G.R. No. 185734 July 3, 2013

ALFREDO C. LIM, JR., PETITIONER, vs. SPOUSES TITO S.
LAZARO AND CARMEN T. LAZARO, RESPONDENTS
Arceo, Francis Emmanuel
SUMMARY OF FACTS:
Petitioner Lim Jr filed a complaint for a sum of money with a prayer

for the issuance of a writ of preliminary attachment against the respondent
Sps Lazaro. The RTC granted the writ of preliminary attachment application
and upon the posting of the required bond issued the corresponding writ
on October 14, 2005. 3 parcels of land owned by the respondent spouses
were levied upon.
The parties later entered into a Compromise Agreement whereby

Sps. Lazaro agreed to pay Lim, Jr. the amount of P2,351,064.80 on an
installment basis, following a schedule of payments covering the period
from September 2006 until October 2013. The RTC rendered a decision on
the basis of the compromise.
Sps. Lazaro then filed an Omnibus Motion, seeking to lift the writ of
preliminary attachment annotated on the subject TCTs.
In granting the Motion, the RTC ruled that a writ of preliminary

attachment is a mere provisional or ancillary remedy, resorted to by a
litigant to protect and preserve certain rights and interests pending final
judgment. Considering that the case had already been considered closed
and terminated by the rendition of the decision based on the compromise
agreement, the writ of preliminary attachment should be lifted and
quashed.
ISSUE/S:
Whether or not the writ of preliminary attachment was properly

lifted?
RESOLUTION OF ISSUE/S:
NO. By its nature, preliminary attachment, under Rule 57 of the Rules

of Court (Rule 57), is an ancillary remedy applied for not for its own sake
but to enable the attaching party to realize upon the relief sought and
expected to be granted in the main or principal action; it is a measure
auxiliary or incidental to the main action. As such, it is available during its
pendency which may be resorted to by a litigant to preserve and protect
certain rights and interests during the interim, awaiting the ultimate
effects of a final judgment in the case. In addition, attachment is also
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availed of in order to acquire jurisdiction over the action by actual or
constructive seizure of the property in those instances where personal or
substituted service of summons on the defendant cannot be effected.
In this relation, while the provisions of Rule 57 are silent on the

length of time within which an attachment lien shall continue to subsist
after the rendition of a final judgment, jurisprudence dictates that the said
lien continues until the debt is paid, or the sale is had under execution
issued on the judgment or until the judgment is satisfied, or the
attachment discharged or vacated in the same manner provided by law.
Applying these principles, the Court finds that the discharge of the
writ of preliminary attachment against the properties of Sps. Lazaro was
improper.
Records indicate that while the parties have entered into a

compromise agreement which had already been approved by the RTC in its
January 5, 2007 Amended Decision, the obligations thereunder have yet to
be fully complied with – particularly, the payment of the total compromise
amount of P2,351,064.80. Hence, given that the foregoing debt remains
unpaid, the attachment of Sps. Lazaro’s properties should have continued
to subsist.
In the earlier case of Chemphil Export & Import Corporation v. CA,

the Court ruled that a writ of attachment is not extinguished by the
execution of a compromise agreement between the parties.
In that case the Court held thus:

xxxx
The case at bench admits of peculiar character in the sense that it
involves a compromise agreement. Nonetheless, x x x. The parties to the
compromise agreement should not be deprived of the protection provided
by an attachment lien especially in an instance where one reneges on his
obligations under the agreement, as in the case at bench, where Antonio
Garcia failed to hold up his own end of the deal, so to speak.
xxxx
If we were to rule otherwise, we would in effect create a back
door by which a debtor can easily escape his creditors.
Consequently, we would be faced with an anomalous situation
where a debtor, in order to buy time to dispose of his properties,
would enter into a compromise agreement he has no intention of
honoring in the first place. The purpose of the provisional remedy
of attachment would thus be lost. It would become, in analogy, a
declawed and toothless tiger.
In fine, the Court holds that the writ of preliminary attachment

subject of this case should be restored and its annotation revived in the
subject TCTs, re-vesting unto Lim, Jr. his preferential lien over the
properties covered by the same as it were before the cancellation of the
said writ. Lest it be misunderstood, the lien or security obtained by an
attachment even before judgment, is in the nature of a vested interest
which affords specific security for the satisfaction of the debt put in suit.30
Verily, the lifting of the attachment lien would be tantamount to an
abdication of Lim, Jr.’s rights over Sps. Lazaro’s properties which the Court,
absent any justifiable ground therefor, cannot allow.
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DOCTRINE:
G.R. No. 190028 February 26, 2014

LIGON vs. REGIONAL TRIAL COURT, BRANCH 56, MAKATI CITY
Aure, Mark Lester
SUMMARY OF FACTS:
Petitioner Ligon filed before the QC RTC a complaint for the collection
of a sum of money with prayer for the issuance of a writ of preliminary
attachment against the Sps. Baladjay, a certain Olivia Marasigan
(Marasigan), Polished Arrow Holdings, Inc. (Polished Arrow), and its
incorporators. The complaint alleges, among others, that the spouses
Baladjay enticed her to extend a short-term loan secured by a PDC which
bounced upon presentment, and that the subject property was transferred
to respondent Polished Arrow allegedly defendants’ dummy corporation to
defraud creditors. The application for the writ was granted so the subject
property was levied upon by annotating the writ on the dorsal portion of
TCT No. 9273. Meanwhile, a similar complaint for the sum of money
damages, and cancellation of title with prayer for issuance of a writ of
preliminary attachment was lodged before the RTC Makati by Sps. Vicente
against the same respondents. A writ of preliminary attachment was also
issued against the subject property which was annotated on the dorsal
portion of TCT No. 9273.
During the pendency of the QC case, the Makati RTC rendered a

decision rescinding the transfer of the subject property to Polished Arrow
upon a finding that the same was made in fraud of creditors.
Consequently, the Makati City RTC directed the Register of Deeds of
Muntinlupa City to: (a) cancel TCT No. 9273 in the name of Polished Arrow;
and (b) restore TCT No. 8502 “in its previous condition” in the name of
Rosario Baladjay. In the subsequent execution proceedings, the property
was sold at a public auction to respondent Ting. The RTC Makati then
ordered the RD under pain of contempt to issue a new certificate in favor
of Ting free from any liens and encumbrances.
Meanwhile the QC RTC ruled in favor of Ligon who sought its

execution and discovered the earlier attachment annotation in her favor
has been deleted.
ISSUE/S:
Whether or not the Makati RTC gravely abused its discretion when it
ordered the deletion of Ligon’s attachment lien?
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YES. Case law instructs that an attachment is a proceeding in rem,

and, hence, is against the particular property, enforceable against the
whole world. Accordingly, the attaching creditor acquires a specific lien on
the attached property which nothing can subsequently destroy except the
very dissolution of the attachment or levy itself. Such a proceeding, in
effect, means that the property attached is an indebted thing and a virtual
condemnation of it to pay the owner’s debt. The lien continues until the
debt is paid, or sale is had under execution issued on the judgment, or
until the judgment is satisfied, or the attachment discharged or vacated in
some manner provided by law. Thus, a prior registration40 of an
attachment lien creates a preference, such that when an attachment has
been duly levied upon a property, a purchaser thereof subsequent to the
attachment takes the property subject to the said attachment. As provided
under PD 1529, said registration operates as a form of constructive notice
to all.
Notwithstanding the subsequent cancellation of TCT No. 9273 due to

the Makati City RTC’s decision rescinding the transfer of the subject
property from Sps. Baladjay to Polished Arrow upon a finding that the same
was made in fraud of creditors, Ligon’s attachment lien over the subject
property continued to subsist since the attachment she had earlier secured
binds the property itself, and, hence, continues until the judgment debt of
Sps. Baladjay to Ligon as adjudged in the Quezon City Case is satisfied, or
the attachment discharged or vacated in some manner provided by law.
The grave abuse of discretion of the Makati City RTC lies with its directive
to issue a new certificate of title in the name of Ting (i.e., TCT No. 19756),
free from any liens and encumbrances. This course of action clearly
negates the efficacy of Ligon’s attachment lien and, also, defies the legal
characterization of attachment proceedings. It bears noting that Ligon’s
claim, secured by the aforesaid attachment, is against Sps. Baladjay whose
ownership over the subject property had been effectively restored in view
of the RTC’s rescission of the property’s previous sale to Polished Arrow.
Thus, Sps. Ligon’s attachment lien against Sps. Baladjay as well as their
successors-in-interest should have been preserved, and the annotation
thereof carried over to any subsequent certificate of title, the most recent
of which as it appears on record is TCT No. 31001 in the name of Techico,
without prejudice to the latter’s right to protect his own ownership interest
over the subject property.
DOCTRINE:
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G.R. No. 166759 November 25, 2009

SOFIA TORRES, FRUCTOSA TORRES, HEIRS OF MARIO TORRES
and SOLAR RESOURCES, INC., Petitioners,
vs.
NICANOR SATSATIN, EMILINDA AUSTRIA SATSATIN,
NIKKI NORMEL SATSATIN and NIKKI NORLIN
SATSATIN, Respondents.
Austria, Jefferson S.
SUMMARY OF FACTS:
Petitioners Torres filed a Complaint for sum of money and damages

against Respondents Satsatin in RTC Dasmariñas, Cavite. They filed an Ex-
Parte Motion for the Issuance of a Writ of Attachment, alleging among
other things: that respondents are about to depart the Philippines; that
they have properties in Metro Manila and in the nearby provinces; that the
amount due them is P19,000,000.00 above all other claims; and that there
is no other sufficient security for the claim sought to be enforced. The
siblings Torreses agreed to sell their land, thus, authorized Nicanor,
through a SPA, to negotiate for the sale of the properties. Nicanor failed to
remit to them the balance of ₱19,000,000.00.
RTC issued an Order directing the petitioners to post a bond in the

amount of ₱7,000,000. RTC issued a Writ of Attachment directing the
sheriff to attach the estate of the respondents. Summons with complaint
was served upon the Satsatins. Respondents filed their Answer alleging
that: the bond was issued before the issuance of the writ of attachment;
the writ of attachment was issued before the summons was received by
the respondents; the sheriff did not serve copies of the application for
attachment, order of attachment, plaintiffs’ affidavit, and attachment
bond, to the respondents; and filed a Motion to Discharge Writ of
Attachment however it was denied by the Court.
Respondents filed an Urgent Motion to Lift/Set Aside Order, denying

their Motion to Discharge Writ, which was again denied by the RTC.
Respondents filed a Petition for Certiorari, Mandamus and Prohibition with
Preliminary Injunction and Temporary Restraining Order under Rule 65
before the Court of Appeals. CA ruled in favor of Satsatins, ordering the
lifting of the writ of attachment. Hence, Torreses filed a Petition for review
on certiorari under Rule 45 before the SC.
ISSUE/S:
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Whether or not the writ of attachment should be discharge?

Whether or not the Court of Appeals was correct in lifting the writ?
Yes, SC has long put to rest the issue of when jurisdiction over the
person of the defendant should be acquired in cases where a party resorts
to provisional remedies. A party to a suit may, at any time after filing the
complaint, avail of the provisional remedies under the Rules of Court.
Specifically, Rule 57 on preliminary attachment speaks of the grant of the
remedy "at the commencement of the action or at any time before entry of
judgment." This phrase refers to the date of the filing of the complaint,
which is the moment that marks "the commencement of the action." The
reference plainly is to a time before summons is served on the defendant,
or even before summons issues.
In Davao Light & Power Co., Inc. v. Court of Appeals, this Court
clarified the actual time when jurisdiction should be had:
It goes without saying that whatever be the acts done by the
Court prior to the acquisition of jurisdiction over the person of
defendant x x x issuance of summons, order of attachment
and writ of attachment x x x these do not and cannot
bind and affect the defendant until and unless
jurisdiction over his person is eventually obtained by
the court, either by service on him of summons or other
coercive process or his voluntary submission to the 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 x x x.
DOCTRINE:
Three stages before the Court grant the provisional remedy of

attachment: first, the court issues the order granting the application;
second, the writ of attachment issues pursuant to the order granting the
writ; and third, the writ is implemented. For the initial two stages, it is not
necessary that jurisdiction over the person of the defendant be first
obtained. However, once the implementation of the writ commences, the
court must have acquired jurisdiction over the defendant, for without such
jurisdiction, the court has no power and authority to act in any manner
against the defendant. Any order issuing from the Court will not bind the
defendant.
Thus, it is indispensable not only for the acquisition of jurisdiction

over the person of the defendant, but also upon consideration of fairness,
to apprise the defendant of the complaint against him and the issuance of
a writ of preliminary attachment and the grounds therefor that prior or
contemporaneously to the serving of the writ of attachment, service of
summons, together with a copy of the complaint, the application for
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attachment, the applicant’s affidavit and bond, and the order must be
served upon him.
G.R. No. 125027. August 12, 2002

MANGILA vs Court of Appeals
Chua, Mark Andrew Y.
SUMMARY OF FACTS:
Petitioner failed to pay private respondent shipping charges

amounting to P109, 376.95. Despite several demands, petitioner never
paid private respondent. Private respondent then filed a case before the
Regional Trial Court of Pasay City for collection of sum of money.
The sheriff found out that petitioner had left the Philippines for
Guam. Construing petitioner’s departure from the Philippines as done with
intent to defraud her creditors, private respondent filed a Motion for
Preliminary Attachment. Petitioner filed an Urgent Motion to Discharge
Attachment without submitting herself to the jurisdiction of the trial court.
She pointed out that up to then, she had not been served a copy of the
Complaint and the summons. Hence, petitioner claimed the court had not
acquired jurisdiction over her person. The trial court granted the Motion to
Discharge Attachment upon filing of petitioners counter-bond. The trial
court, however, did not rule on the question of jurisdiction and on the
validity of the writ of preliminary attachment.
The trial court denied the Motion for Reconsideration and scheduled
the presentation of private respondent’s evidence ex-parte. The Court of
Appeals upheld the validity of the issuance of the writ of attachment and
sustained the filing of the action in the RTC of Pasay.
ISSUE/S:
Whether or not respondent court erred in not holding that the writ of
attachment was improperly issued and served.
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The Court have held that the grant of the provisional remedy of
attachment involves three stages: first, the court issues the order granting
the application; second, the writ of attachment issues pursuant to the
order granting the writ; and third, the writ is implemented. For the initial
two stages, it is not necessary that jurisdiction over the person of the
defendant be first obtained. However, once the implementation of the writ
commences, the court must have acquired jurisdiction over the defendant
for without such jurisdiction, the court has no power and authority to act in
any manner against the defendant. Any order issuing from the Court will
not bind the defendant.
In the instant case, the Writ of Preliminary Attachment was issued on

September 27, 1988 and implemented on October 28, 1988. However, the
alias summons was served only on January 26, 1989 or almost three
months after the implementation of the writ of attachment.
In conclusion, we hold that the alias summons belatedly served on

petitioner cannot be deemed to have cured the fatal defect in the
enforcement of the writ. The trial court cannot enforce such a coercive
process on petitioner without first obtaining jurisdiction over her person.
The preliminary writ of attachment must be served after or simultaneous
with the service of summons on the defendant whether by personal
service, substituted service or by publication as warranted by the
circumstances of the case. The subsequent service of summons does not
confer a retroactive acquisition of jurisdiction over her person because the
law does not allow for retroactivity of a belated service.
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G.r. No. 203530, 13 April 2015

Luzon Development Bank vs. Krishnan
Guevara, Ron Jason A.
SUMMARY OF FACTS:
Erlinda Krishnan is a client of Luzon Development Bank wherein she

maintained several accounts including time deposits. On several
occasions, when she presented her Time Deposits Certificates amounting
to P28,597,472.70 for payment, the bank refused to honor them for the
reason that they were fraudulent. So she filed a complaint for Collection of
Sum of Money, and likewise applied for a Preliminary Writ of Attachment
with the Regional Trial Court of Manila. The RTC granted it on February 27,
2001. By virtue of the writ, the bank’s accounts in BPI Family Bank,
Calamba, Laguna in the amount of P28,597,472.70 and its account
amounting to P49,000,000 in the Central Bank were garnished.
The petitioners filed an urgent ex-parte Motion to Lift Attachment or

Garnishment. Then, they filed an Omnibus Motion seeking the substitution
of their garnished account with government securities. The RTC issued an
Order lifting the attachment to which Erlinda filed a Motion for
Reconsideration. Erlinda filed her attachment bond of P35,000,000 through
Visayan Surety and Insurance Corporation. Meanwhile, the petitioners filed
an Omnibus Motion praying that they be allowed to deposit Certificates of
Title of real property in lieu of counter-bond, and the issuance of the writ of
attachment be held in abeyance. Respondent judge denied the petitioners’
Motion.
The respondent judge issued an Order reinstating the Writ of

Attachment for failure of the bank to file the required counter-bond,
directing the Sheriff to attach the real estate or personal properties of
petitioners. The CA dismissed the petitioners’ certiorari petition and
affirmed the Orders of RTC reinstating the Writ of Attachment for failure of
petitioners to file the required counter-bond.
ISSUE/S:
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Whether or not the CA erred in affirming the RTC’s decision which
denied petitioners’ motion praying that bank property be deposited in lieu
of cash or counter-bond.
NO. Once the writ of attachment has been issued, the only remedy of the
petitioners in lifting the same is through a cash deposit or the filing of the
counter-bond. Thus, the Court holds that petitioner’s argument that it has
the option to deposit real property instead of depositing cash or filing a
counter-bond to discharge the attachment or stay the implementation
thereof is unmeritorious.
The trial court aptly ruled that while it is true that the word “deposit”
cannot only be confined or construed to refer to cash, a broader
interpretation thereof is not justified in the present case for the reason that
a party seeking a stay of the attachment under Section 5 is required to
make a deposit in an amount equal to the bond fixed by the court in the
order of attachment or to the value of the property to be attached. The
proximate relation of the word “deposit” and “amount” is unmistakable in
Section 5 of Rule 57. Plainly, in construing said words, it can be safely
concluded that Section 5 requires the deposit of money as the word
“amount” commonly refers to or is regularly associated with a sum of
money.
DOCTRINE:
To discharge or lift the writ of preliminary attachment, the party is

required to post cash deposit or file a counter-bond. The word “deposit”
under Section 5 of Rule 57 is construed and associated with a sum of
money, not by real property.
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G.R. No. 203240 March 18, 2015

Northern Islands Co. Inc vs Garcia
Hilal, Jalanie B.
SUMMARY OF FACTS:
On September 23, 2005, petitioner Northern Islands Co., Inc.

(petitioner) filed a Complaint with application for a writ of preliminary
attachment, before the RTC against respondents (Main Case) which was
subsequently amended on October 25, 2005. It alleged that: (a) from
March to July 2004, petitioner caused the delivery to respondents of
various appliances in the aggregate amount of P8,040,825.l 7; (b) the
goods were transported, shipped, and delivered by Sulpicio Lines, Inc., and
were accepted in good order and condition by respondents'
representatives; (c) the parties agreed that the goods delivered were
payable within 120 days, and that the unpaid amounts would earn interest
at a rate of eighteen percent (18%) per annum; (d) however, the value of
the goods were not paid by respondents despite repeated demands; and
(e) respondents fraudulently asserted that petitioner had no proof that
they had indeed received the quantity of the subject goods.
In connection with the application for a writ of preliminary

attachment, petitioner posted a bond, through Visayan Surety and
Insurance Corporation, in the amount of P8,040,825.17. On November 7,
2005, the RTC issued the writ sought for.
Thereafter, or on January 11, 2006, respondents filed a Motion to

Discharge Excess Attachment, alleging that the attachment previously
ordered by the RTC exceeded by P9,232,564.56 given that the estimated
value of the attached properties, including the garnished bank accounts,
as assessed by their appraiser, Gaudioso W. Lapaz (Lapaz), amounted to
P17,273,409.73, while the attachment bond is only in the amount of
P8,040,825.17.
The RTC denied the Motion to Discharge Excess Attachment. The

motion for partial reconsideration was also denied, thus, the respondent
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elevated the issue on attachment to the CA via petition for certiorari and
mandamus.
In the interim, the RTC rendered a Decision dated September 21,

2011 in the Main Case. Essentially, it dismissed petitioner's Amended
Complaint due to the absence of any evidence to prove that respondents
had agreed to the pricing of the subject goods. This decision was properly
appealed by petitioner, hence, the RTC elevated the entire records of the
Main Case to the CA.
The CA partly granted the certiorari in favor of the respondents with

regard to the issue on attachment. Hence, this petition.
ISSUE/S:
The issues presented for the Court's resolution are: (a) whether the
RTC had lost jurisdiction over the matter of the preliminary attachment
after petitioner appealed the decision in the Main Case, and thereafter
ordered the transmittal of the records to the CA; and (b) whether the CA
erred in ordering the appointment of a commissioner and the subsequent
discharge of any excess attachment found by said commissioner.
Section 9, Rule 41 of the Rules of Court provides that in appeals by

notice of appeal, the court loses jurisdiction over the case upon
the perfection of the appeals filed in due time and the expiration
of the time to appeal of the other parties.
In this case, petitioner had duly perfected its appeal of the RTC's
September 21, 2011 Decision resolving the Main Case through the timely
filing of its Notice of Appeal dated October 27, 2011, together with the
payment of the appropriate docket fees. The RTC, in an Order dated
January 25, 2012, had actually confirmed this fact, and thereby ordered
the elevation of the entire records to the CA. Meanwhile, records do not
show that.respondents filed any appeal, resulting in the lapse of its own
period to appeal therefrom. Thus, based on Section 9, Rule 41, it cannot be
seriously doubted that the RTC had already lost jurisdiction over the Main
Case.
With the RTC's loss of jurisdiction over the Main Case necessarily
comes its loss of jurisdiction all over matters merely ancillary thereto.
Thus, the propriety of conducting a trial by commissioners in order to
determine the excessiveness of the subject preliminary attachment, being
a mere ancillary matter to the Main Case, is now mooted by its
supervening appeal.
The consequence is that where the main action is appealed, the

attachment which may have been issued as an incident of that action, is
also considered appealed and so also removed from the jurisdiction of the
court a quo. The attachment itself cannot be the subject of a
separate action independent of the principal action because the
attachment was only an incident of such action.
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That being said, it is now unnecessary to discuss the other issues
raised herein. In fine, the petition is granted and the assailed CA rulings
are set aside.
DOCTRINE:
G.R. No. 212025, July 01, 2015

EXCELLENT QUALITY APPAREL, INC., Petitioner, v. VISAYAN
SURETY & INSURANCE CORPORATION, AND FAR EASTERN
SURETY & INSURANCE CO., INC., Respondents
Marquez, Jay Michael
SUMMARY OF FACTS:
On March 26, 1996, petitioner Excellent Quality Apparel, Inc.,

entered into a contract with Multi-Rich Builders (Multi-Rich), for the
construction of a garment factory within the Cavite Philippine Economic
Zone Authority (CPEZA). The duration of the project was for a maximum
period of five (5) months. Included in the contract was an Arbitration
Clause in case of dispute. After 8 months or on November 27, 1996, the
construction of the factory building was completed. Win Multi-Rich filed a
complaint for sum of money and damages against petitioner before the
RTC. It also prayed for the issuance of a writ of attachment, claiming that
petitioner was about to abscond and that petitioner had an impending
closure.
Multi-Rich then secured the necessary bond in the amount of

P8,634,448.20 from respondent Visayan Surety and Insurance Corporation
(Visayan Surety). The RTC issued a writ of preliminary attachment in favor
of Win Multi-Rich. Petitioner filed its Omnibus Motion, seeking to discharge
the attachment. Petitioner also questioned the jurisdiction of the RTC due
to the presence of the Arbitration Clause in the contract. It asserted that
the case should have been referred first to the Construction Industry
Arbitration Commission (CIAC) pursuant to Executive Order (E.O.) No.
1008.
The motion was denied by the RTC because the issues of the case
13
could be resolved after a full-blown trial. Win Multi-Rich then filed a motion
to release petitioner's cash deposit to it. Notably, the motion was granted
by the RTC in the Order.
Win Multi-Rich posted Surety Bond issued by respondent Far Eastern

Surety and Insurance Co., Inc. (FESICO) for the amount of P9,000,000.00,
to secure the withdrawal of the cash deposited by petitioner. Petitioner
filed a petition for certiorari before the CA. The petition sought to annul and
set aside Orders of the RTC. CA rendered a decision annulling the Orders of
the RTC. It ruled, however, that the RTC had jurisdiction over the case
inspite of the arbitration clause because it was a suit for collection of sum
of money.
ISSUE/S:
Whether the sureties are liable for damages?
Visayas Surety – NO.
There was an application for damages; but there was no notice given
to Visayan Surety
In this case, the attachment bond was issued by Visayan Surety in

order for Win Multi-Rich to secure the issuance of the writ of attachment.
Hence, any application for damages arising from the improper, irregular or
excessive attachment shall be governed by Section 20, Rule 57.
Far Eastern Surety – Yes.
FESICO cannot escape liability on its surety bond issued in favor of

petitioner. The purpose of FESICO's bond was to secure the withdrawal of
the cash deposit and to answer any damages that would be inflicted
against petitioner in the course of the proceedings. Also, the undertaking
signed by FESICO stated that the duration of the effectivity of the bond
shall be from its approval by the court until the action is fully decided,
resolved or terminated.
FESICO cannot simply escape liability by invoking that it was not a

party in G.R. No. 175048. From the moment that FESICO issued Surety
Bond No. 10198 to Win Multi-Rich and the same was posted before the
RTC, the court has acquired jurisdiction over the surety, and the provisions
of Sections 12 and 17 of Rule 57 became operational. Thus, the Court
holds that FESICO is solidarity liable under its surety bond with its principal
Win Multi-Rich.
DOCTRINE:
Requisites to claim damages against the bond:
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1. The application for damages must be filed in the same case where
the bond was issued;
2. Such application for damages must be filed before the entry of
judgment; and
3. After hearing with notice to the surety.
G.R. No. 181721, September 09, 2015

WATERCRAFT VENTURE CORPORATION, REPRESENTED BY ITS
VICE-PRESIDENT, ROSARIO E. RAÑOA, Petitioner, v. ALFRED
RAYMOND WOLFE, Respondent
Nasalga, Jose Marie
SUMMARY OF FACTS:
Watercraft Venture Corporation (WATERCRAFT) is engaged in the

business of building, repairing, storing and maintaining yachts, boats and
other pleasure crafts at the Subic Bay Freeport Zone, Subic, Zambales.
Sometime in June 1997, Watercraft hired respondent Alfred Raymond Wolfe
(WOLFE), a British national and resident of Subic Bay Freeport Zone,
Zambales, as its Shipyard Manager.
During his empolyment, Wolfe stored the sailboat, KNOTTY GULL,

within Watercraft1 s boat storage facilities, but never paid for the storage
fees. On March 7, 2002, Watercraft terminated the employment of Wolfe.
In June 2002, Wolfe pulled out his sailboat from Watercraft's storage
facilities after signing a Boat Pull-Out Clearance dated June 29, 2002 where
he allegedly acknowledged the outstanding obligation of Sixteen Thousand
Three Hundred and Twenty-Four and 82/100 US Dollars (US$16,324.82)
representing unpaid boat storage fees for the period of June 1997 to June
2002. Despite repeated demands, he failed to pay the said amount. Thus,
on July 7, 2005, Watercraft filed against Wolfe a Complaint for Collection of
Sum of Money with Damages with an Application for the Issuance of a Writ
of Preliminary Attachment.
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The RTC ex parte granted the Writ of Preliminary Attachment
subjecting Wolfe’s vehicles under custody. Wolfe appealed to CA and
reversed the RTC’s decision.
ISSUE/S:
Whether or not, the issuance of Writ of Preliminary Attachment is

valid.
The issuance of the Writ is invalid. Court agrees with the CA that
Watercraft failed to state with particularity the circumstances constituting
fraud, as required by Section 5, Rule 8 of the Rules of Court, and that
Wolfe's mere failure to pay the boat storage fees does not necessarily
amount to fraud, absent any showing that such failure was due to insidious
machinations and intent on his part to defraud Watercraft of the amount
due it.
DOCGRINE:
A writ of preliminary attachment is defined as a provisional remedy

issued upon order of the court where an action is pending to be levied
upon the property or properties of the defendant therein, the same to be
held thereafter by the sheriff as security for the satisfaction of whatever
judgment that might be secured in the said action by the attaching
creditor against the defendant. However, it should be resorted to only
when necessary and as a last remedy because it exposes the debtor to
humiliation and annoyance. It must be granted only on concrete and
specific grounds and not merely on general averments quoting the words
of the rules. Since attachment is harsh, extraordinary, and summary in
nature, the rules on the application of a writ of attachment must be strictly
construed in favor of the defendant.
When the preliminary attachment is issued upon a ground

which is at the same time the applicant's cause of action ; E.G.,
"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," or "an action against a party who has been
guilty of fraud in contracting the debt or incurring the obligation upon
which the action is brought," the defendant is not allowed to file a
motion to dissolve the attachment under Section 13 of Rule 57
by offering to show the falsity of the factual averments in the
plaintiffs application and affidavits on which the writ was based
- and consequently that the writ based thereon had been
improperly or irregularly issued - the reason being that the
hearing on such a motion for dissolution of the writ would be
tantamount to a trial of the merits of the action. In other words,
the merits of the action would be ventilated at a mere hearing of a motion,
instead of at the regular trial.
16
Phil Air Conditioning Center vs RCJ Lines and Roland Abadilla

Jr.,
GR No. 193821
Orda, Dominic
SUMMARY OF FACTS:
Phil Air filed a collection suit against RCJ line and Rolando Abadilia Jr
with prayer for the issuance of a writ of preliminary attachment with the
Regional Trial Court alleging that in spite of the purchases made by the
company in the repairs of the air conditioning of RCJ buses, the three
checks issued for payment were dishonored when presented for payment.
Two buses were attached upon payment of a bond by Phil-Air, such bond
was immediately lifted by the trial court upon an urgent motion filed by RCJ
lines who posted a counter -bond in the same amount as the attachment
bond. RTC ruled in favor of RCJ lines and mentioned that Phil-Air is guilty of
laches and estoppel. Further it is also guilty of breach of warranty. The
Court of Appeal affirmed the decision of the RTC in toto, thus Phil-Air filed a
petition on certiorari under Rule 45 of the Rules of Court.
ISSUE/S:
17
1. Whether Phil-Air should reimburse RCJ Lines for the counter- bond
premium and its alleged unrealized profits;
The Supreme Court held that:
Phil-Air is not directly liable for the counter-bond premium and RCJ Lines'
alleged unrealized profits;
A writ of preliminary attachment is a provisional remedy issued by the

court where an action is pending to be levied upon the property or
properties of the defendant. The property is held by the sheriff as security
for the satisfaction of whatever judgment that might be secured by the
attaching party against the defendant.
The grant of the writ is conditioned not only on the finding of the court that
there exists a valid ground for its issuance.51 The Rules also require the
applicant to post a bond.
Section 4 of Rule 57 of the Rules of Civil Procedure (RULES) provides that

"the party applying for the order must...give a bond executed to the
adverse party in the amount fixed by the court, in its order granting the
issuance of the writ, conditioned that the latter will pay all the
costs that may be adjudged to the adverse party and all
damages that he may sustain by reason of the attachment, if
the court shall finally adjudge that the applicant was not
entitled thereto."
The enforcement of the writ notwithstanding, the party whose property is

attached is afforded relief to have the attachment lifted.
There are various modes of discharging an attachment under Rule 57, VIZ.:
(1) by depositing cash or posting a counter-bond under Section 12;52 (2) by
proving that the attachment bond was improperly or irregularly issued or
enforced, or that the bond is insufficient under Section 13;53 (3) by showing
that the attachment is excessive under Section 13; and (4) by claiming
that the property is exempt from execution under Section 2.54
RCJ Lines availed of the first mode by posting a counter-bond.
Under the first mode, the court will order the discharge of the attachment
after (1) the movant makes a cash deposit or posts a counter-bond and (2)
the court hears the motion to discharge the attachment with due notice to
the adverse party.55
The amount of the cash deposit or counter-bond must be equal to that

fixed by the court in the order of attachment, exclusive of costs. The cash
deposit or counter-bond shall secure the payment of any judgment that the
attaching party may recover in the action.56
The filing of a counter-bond to discharge the attachment applies when

there has already been a seizure of property by the sheriff and all that is
entailed is the presentation of a motion to the proper court, seeking
approval of a cash or surety bond in an amount equivalent to the value of
18
the property seized and the lifting of the attachment on the basis
thereof. The counter-bond stands in place of the property so
released. 57
To be clear, the discharge of the attachment by depositing cash or posting

a counter-bond under Section 12 should not be confused with the
discharge sanctioned under Section 13. Section 13 speaks of discharge on
the ground that the writ was improperly or irregularly issued or enforced,
or that the attachment bond is insufficient, or that the attachment is
excessive.
To reiterate, the discharge under Section 12 takes effect upon posting of a

counter-bond or depositing cash, and after hearing to determine the
sufficiency of the cash deposit or counter-bond. On the other hand, the
discharge under Section 13 takes effect only upon showing that the
plaintiffs attachment bond was improperly or irregularly issued, or that the
bond is insufficient. The discharge of the attachment under Section 13
must be made only after hearing.58
These differences notwithstanding, the discharge of the preliminary

attachment either through Section 12 or Section 13 has no effect on and
does not discharge the attachment bond. The dissolution of the
preliminary attachment does not result in the dissolution of the
attachment bond.
As discussed above, it is patent that under the Rules, the attachment bond
answers for all damages incurred by the party against whom the
attachment was issued.60
Thus, Phil-Air cannot be held directly liable for the costs adjudged to and
the damages sustained by RCJ Lines because of the attachment. Section 4
of Rule 57 positively lays down the rule that the attachment bond will pay
"all the costs which may be adjudged to the adverse party and
all damages which he may sustain by reason of the attachment,
if the court shall finally adjudge that the applicant was not
entitled thereto."
G.R. No. 139941. January 19, 2001

CHUIDIAN VS. SANDIGANBAYAN (FIFTH DIVISION) AND THE
REPUBLIC OF THE PHILIPPINES
Patacsil, Romel C.
SUMMARY OF FACTS:
Chuidian, a favored business associate of the Marcoses, allegedly

used false pretenses to induce the officers of the PHILGUARANTEE, among
others, to facilitate the procurement and issuance of a loan guarantee in
favor of the ARCI, a 98% owned-corporation of Chuidian. Although ARCI
had received the proceeds of the loan guaranteed by PHILGUARANTEE, the
former defaulted in the payments thereof, compelling PHILGUARANTEE to
undertake payments for the same. Consequently, PHILGUARANTEE sued
Chuidian before the Santa Clara County Superior Court of US, but the
19
parties subsequently entered into a compromise agreement whereby
Chuidian shall assign and surrender title to all his companies in favor of the
Philippine government. In return, PHILGUARANTEE shall absolve Chuidian
from all civil and criminal liability. It was further stipulated that instead of
Chuidian reimbursing the payments made by PHILGUARANTEE arising from
Chuidians default, the Philippine government shall pay Chuidian the
amount of US$5,300,000.00, of which a total of US$700,000 was actually
received by Chuidian and the remaining balance was to be paid through an
irrevocable Letter of Credit (L/C) issued by the Philippine National Bank
(PNB).
With the advent of the Aquino administration, the newly-established

PCGG exerted earnest efforts to search and recover money and other
assets suspected as having been illegally acquired by the Marcoses, their
relatives and cronies. Chuidian was among those whose assets were
sequestered by the PCGG, and the latter directed the PNB to place under
its custody, for and in behalf of the PCGG, the irrevocable L/C owned by
Chuidian which at that time has a remaining balance of US$4,400,000.
Later, the government filed before the Sandiganbayan a civil case against
the Marcos spouses and Chuidian, among others. The complaint sought the
reconveyance, reversion, accounting and restitution of all forms of wealth
allegedly procured illegally and stashed away by the defendants. While the
case was pending, the Republic of the Philippines filed a motion for
issuance of a writ of attachment over the L/C, citing as grounds, among
others, that Chuidian is guilty of fraud in contracting the debt and he is out
of the country or one on whom summons may be served by publication.
The Sandiganbayan issued a Resolution ordering the issuance of a writ of
attachment against L/C as security for the satisfaction of judgment.
Almost four years after the issuance of the order of attachment,

Chuidian filed a motion to lift the attachment on the grounds, among
others that: a) he had already returned to the Philippines and since his
absence in the past was the very foundation of the Sandiganbayan’s writ
of preliminary attachment, his presence in the country warrants the
immediate lifting thereof; and b) there was no evidence that he was guilty
of fraud in contracting the debt or incurring the obligation. The
Sandiganbayan, however, denied Chuidian’s motion to lift attachment.
Hence, Chuidian’s filed a petition for certiorari on the ground that the
Sandiganbayan gravely abuse its discretion amounting to lack or excess of
jurisdiction when it ruled, among others, that most of the issues raised in
the motion to lift attachment had been substantially addressed in the
previous resolutions, while the rest were of no imperative relevance as to
affect the Sandiganbayan disposition.
ISSUE/S:
(a) Whether or not supervening events arising after the issuance

of the writ of preliminary attachment can be valid grounds for
the discharge of the writ by motion?
(b) Whether or not the writ of attachment can be discharged by

mere motion if the ground of its issuance is at the same time
the applicant’s cause of action?
20
RESOLUTION OF THE ISSUE/S:
(a) No, supervening events arising after the issuance of the writ of
preliminary attachment cannot be valid grounds for the
discharge of the writ by motion. The rule contemplates that the
defect must be in the very issuance of the writ of attachment.
Supervening events which may or may not justify the
discharge of the writ are not within the purview of this
particular rule. To discharge attachment at this stage of the
proceedings would render inutile any favorable judgment
should the government prevail in the principal action against
the latter.
(b) No, the writ of attachment cannot be discharged by mere

motion if the ground of its issuance is at the same time the
applicant’s cause of action. The SC ruled that when the
preliminary attachment is issued upon a ground which is at the
same time the applicants cause of action; e.g., 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, or an
action against a party who has been guilty of fraud in
contracting the debt or incurring the obligation upon which the
action is brought, the defendant is not allowed to file a motion
to dissolve the attachment under Section 13 of Rule 57 by
offering to show the falsity of the factual averments in the
plaintiffs application and affidavits on which the writ was based
and consequently that the writ based thereon had been
improperly or irregularly issued the reason being that the
hearing on such a motion for dissolution of the writ would be
tantamount to a trial of the merits of the action. In other
words, the merits of the action would be ventilated at a mere
hearing of a motion, instead of at the regular trial.
DOCTRINE:
There are only two ways of quashing a writ of attachment: (a) by

filing a counterbond immediately; or (b) by moving to quash on the ground
of improper and irregular issuance. Where the writ is issued upon a ground
as the applicant's cause of action, the only way it can be lifted or dissolved
is by a counterbond since merits of the action in which a writ of
preliminary attachment has been issued are not triable on a motion for
dissolution of the attachment, otherwise an applicant for the lifting of the
writ could force a trial of the merits of the case on a mere motion.
21
PRELIMINARY INJUNCTION
G.R. No. 141853. February 7, 2001

Idolor vs CA
Pio, Francis John P.
SUMMARY OF FACTS:
22
Idolor impugns the execution sale through public auction of her
foreclosed property alleging irregularity and lack of notice in the extra-
judicial foreclosure proceedings subject of the real estate mortgage. The
lower court issued a writ of preliminary injunction from causing the
issuance of a final deed of sale and consolidation of ownership of the
subject property in favor of the De Guzman spouses, the creditor-
purchaser. On a petition for certiorari by the spouses De Guzman, the
Court of Appeals annulled the assailed writ of preliminary injunction, hence
this petition for review in certiorari with the Supreme Court filed by Idolor.
ISSUE/S:
Does Idolor remain in possession of a proprietary right for the issuance

of a writ of preliminary injunction considering that her property has already
been sold through public auction?
No. The possibility of irreparable damage without proof of actual

existing right is not a ground for an injunction.
Injunction is a preservative remedy aimed at protecting substantive

rights and interests. Before an injunction can be issued, it is essential that
the following requisites be present: 1) there must be a right in esse or the
existence of a right to be protected; 2) the act against which the injunction
is to be directed is a violation of such right. Hence, the existence of a right
violated, is a prerequisite to the granting of an injunction. Injunction is not
designed to protect contingent or future rights. Failure to establish either
the existence of a clear and positive right which should be judicially
protected through the writ of injunction or that the defendant has
committed or has attempted to commit any act which has endangered or
tends to endanger the existence of said right, is a sufficient ground for
denying the injunction. The controlling reason for the existence of the
judicial power to issue the writ is that the court may thereby prevent a
threatened or continuous irremediable injury to some of the parties before
their claims can be thoroughly investigated and advisedly adjudicated. It is
to be resorted to only when there is a pressing necessity to avoid injurious
consequences which cannot be remedied under any standard of
compensation.
In the instant case, petitioner has no more proprietary right to speak of

over the foreclosed property to entitle her to the issuance of a writ of
injunction. It appears that the mortgaged property was sold in a public
auction sheriffs certificate of sale was registered with the Registry of
Deeds of Quezon. Petitioner had one year from the registration of the
sheriff’s sale to redeem the property but she failed to exercise her right
thus spouses de Guzman are now entitled to a conveyance and possession
of the foreclosed property. When petitioner filed her complaint for
annulment of sheriff’s sale against private respondents with prayer for the
issuance of a writ of preliminary injunction, she failed to show sufficient
interest or title in the property sought to be protected as her right of
redemption had already expired, two (2) days before the filing of the
complaint. It is always a ground for denying injunction that the party
23
seeking it has insufficient title or interest to sustain it, and no claim to the
ultimate relief sought.
DOCTRINE:
[A.M. No. MTJ-00-1250. February 28, 2001]

RIMEO S. GUSTILO, complainant, vs. HON. RICARDO S. REAL,
SR., Presiding Judge, 2nd Municipal Circuit Trial Court of
Victorias- Manapla, Negros Occidental, respondent.
Ragiles, John Paul
SUMMARY OF FACTS:
24
Rimeo Gustilo was a candidate for Punong Brgy (PB) of Brgy Punta
Mesa, Manapla, Negros Occidental in the 12 May 1997 elections. His lone
opponent was Weddy C. Libo-on, then the incumbent PB and the ABC
Representative to the Sangguniang Bayan of Manapla and the
Sangguniang Panlalawigan of Negros Occidental. Both Gustilo and Libo-on
garnered 819 votes during the elections, resulting in a tie. The breaking of
the tie by the Board of Canvassers was in Gustilo's favor and he was
proclaimed duly elected PB.
On 20 May 1997, Libo-on filed an election protest case before the

MCTC of Victorias-Manapla, Negros Occidental and sought the recounting
of ballots in two precincts, Preliminary Prohibitory Injunction, and
damages.
The judge issued a TRO after receiving the Lobo-on's evidence ex

parte, and annulled the proclamation of complainant as the duly elected
PB of Punta Mesa, Manapla. Gustilo took his oath of office as PB. That same
day, he also filed a petition for certiorari before the Regional Trial Court.
The RTC lifted the TRO issued by the Judge and declared as null and
void the order nullifying Gustilo's proclamation as duly elected PB.
Believing that the Judge could not decide the case impartially, Gustilo
moved for his inhibition.
The Judge denied Gustilo's motion for inhibition and after hearing
Libo-on's motion for permanent injunction, issued a second TRO "to
maintain the status quo between the contending parties."
In a verified complaint dated 15 June 1997, Gustilo charged Judge

Real with gross misconduct, gross incompetence, gross ignorance of the
law, and violation of the Anti-Graft and Corrupt Practices.
ISSUE/S:
1. Whether the first TRO can be issued without notice and hearing.
2. Whether the issuance of the 2nd TRO was proper.
3.
1. No. Under Supreme Court Administrative Circular No. 20-95],

whenever an application for a TRO is filed, the court may act on
the application only after all parties have been notified and
heard in a summary hearing. In other words, a summary
hearing may not be dispensed with.
In the instant case, respondent admits that he issued the injunctive
writ sought on May 29, 1997 after receiving the applicants evidence ex
parte. His failure to abide by Administrative Circular No. 20-95 in issuing
the first TRO is grave abuse of authority, misconduct, and conduct
prejudicial to the proper administration of justice.
2. No. Before an injunctive writ can be issued, it is essential that the

following requisites be present: (1) there must be aright in esse or
the existence of a right to be protected; and (2) the act against
25
which injunction to be directed is a violation of such right. The
onus probandi is on movant to show that there exists a right to be
protected, which is directly threatened by the act sought to be
enjoined. Further, there must be a showing that the invasion of
the right is material and substantial and that there is an urgent
and paramount necessity for the writ to prevent a serious
damage. In this case, complainant had been duly proclaimed as
the winning candidate for punong barangay. He had taken his
oath of office. Unless his election was annulled, he was entitled to
all the rights of said office. We do not see how the complainant's
exercise of such rights would cause an irreparable injury or violate
the right of the losing candidate so as to justify the issuance of a
temporary restraining order "to maintain the status quo."
DOCTRINE:
Lagrosas vs Bristo-Myers
26
G.R. No. 172138, September 8, 2010

JENOSA VS. DELARIARTE
Britanico, Nerie D.
SUMMARY OF FACTS:
On 22 November 2002, some students of University of San Augustin

(petitioners) were caught engaging in hazing outside the school premises.
A meeting was held and parties agreed that, instead of the possibility of
being charged and found guilty of hazing, the students who participated in
27
the hazing incident as initiators, including petitioner students, would just
transfer to another school, while those who participated as neophytes
would be suspended for one month. In view of the agreement, the
University did not anymore convene the Committee on Student Discipline
(COSD) to investigate the hazing incident. Hence, the parents of petitioner
students (petitioner parents) sent a letter to the University President
urging him not to implement the agreement for not convening with the
COSD before ordering the immediate transfer of petitioner students.
Petitioner parents also wrote a letter to the Department of Education
(DepEd) seeking its intervention and prayed that petitioner students be
allowed to take the home study program instead of transferring to another
school.
Petitioners filed a complaint for injunction and damages with the

Regional Trial Court alleging that the Principal's decision was violation of
their right to due process. They also filed another complaint for mandatory
injunction praying for the release of petitioner students' report cards and
other credentials. The trial court issued a writ of preliminary injunction for
both complaint.
Respondents filed a special civil action for certiorari with the Court of
Appeals insiting that the RTC had no jurisdiction over the subject matter of
the cases which was granted. The CA ordered the trial court to dismiss the
consolidated cases for lack of jurisdiction over the subject matter because
of petitioners' failure to exhaust administrative remedies or for being
premature.
ISSUE/S:
Whether or not the Injunction should be issued.
NO.Since injunction is the strong arm of equity, he who must apply

for it must come with equity or with clean hands. This is so because
among the maxims of equity are (1) he who seeks equity must do equity,
and (2) he who comes into equity must come with clean hands. The latter
is a frequently stated maxim which is also expressed in the principle that
he who has done inequity shall not have equity. It signifies that a litigant
may be denied relief by a court of equity on the ground that his conduct
has been inequitable, unfair and dishonest, or fraudulent, or deceitful as to
the controversy in issue.
Here, petitioners, having reneged on their agreement without any

justifiable reason, come to court with unclean hands. This Court may deny
a litigant relief if his conduct has been inequitable, unfair and dishonest as
to the controversy in issue.
DOCTRINE:
Since injunction is the strong arm of equity, he who must apply for it
must come with equity or with clean hands.
28
G.R. No. 179665, April 3, 2013

SOLID BUILDERS, INC. and MEDINA FOODS INDUSTRIES, INC.
vs.
CHINA BANKING CORPORATION (CBC)
Caido, Carla Yeshabeth
SUMMARY OF FACTS:
CBC granted several loans to Solid Builders (SBI). To secure the

loans, Medina Foods (MFII) executed in CBC’s favor several surety
agreements and contracts of real estate mortgage over parcels of land. On
29
October 5, 2000, claiming that the interests, penalties and charges
imposed by CBC were iniquitous and unconscionable and to enjoin CBC
from initiating foreclosure proceedings, SBI and MFII filed a Complaint "To
Compel Execution of Contract and for Performance and Damages, With
Prayer for Writ of Preliminary Injunction and Ex-Parte Temporary
Restraining Order." Trial Court issued an order granting the application for
writ of preliminary injunction. Aggrieved, CBC filed a Petition for Certiorari
with the Court of Appeals where it claimed that the issuance of writ of
preliminary injunction were all issued with grave abuse of discretion
amounting to lack of jurisdiction. CA ruled in favor of CBC and held that the
issuance of a writ of preliminary injunction had no basis as there were no
findings of fact or law which would indicate the existence of any of the
requisites for the grant of an injunctive writ. SBI and MFII filed a motion for
reconsideration but it was denied by the Court of Appeals in a Resolution
dated September 18, 2007. Hence, this petition.
ISSUE/S:
Whether or not a preliminary injunction may be issued to enjoin a

creditor from foreclosing the mortgaged property.
The answer is in the negative. A writ of preliminary injunction is an

extraordinary event which must be granted only in the face of actual and
existing substantial rights. The duty of the court taking cognizance of a
prayer for a writ of preliminary injunction is to determine whether the
requisites necessary for the grant of an injunction are present in the case
before it. In this connection, a writ of preliminary injunction is issued to
preserve the status quo ante, upon the applicant’s showing of two
important requisite conditions, namely: (1) the right to be protected exists
prima facie, and (2) the acts sought to be enjoined are violative of that
right. It must be proven that the violation sought to be prevented would
cause an irreparable injury An injury is considered irreparable if it is of
such constant and frequent recurrence that no fair or reasonable redress
can be had therefor in a court of law, or where there is no standard by
which their amount can be measured with reasonable accuracy, that is, it
is not susceptible of mathematical computation. The provisional remedy of
preliminary injunction may only be resorted to when there is a pressing
necessity to avoid injurious consequences which cannot be remedied
under any standard of compensation. In the first place, any injury that SBI
and MFII may suffer in case of foreclosure of the mortgaged properties will
be purely monetary and compensable by an appropriate judgment in a
proper case against CBC. Moreover, where there is a valid cause to
foreclose on the mortgages, it cannot be correctly claimed that the
irreparable damage sought to be prevented by the application for
preliminary injunction is the loss of the mortgaged properties to auction
sale. The alleged entitlement of SBI and MFII to the "protection of their
properties put up as collateral for the loans" they procured from CBC is not
the kind of irreparable injury contemplated by law. Foreclosure of
mortgaged property is not an irreparable damage that will merit for the
debtor-mortgagor the extraordinary provisional remedy of preliminary
injunction.
30
DOCTRINE:
The provisional remedy of preliminary injunction may only be

resorted to when there is a pressing necessity to avoid injurious
consequences which cannot be remedied under any standard of
compensation. Foreclosure of mortgaged property is not an irreparable
damage that will merit for the debtor-mortgagor the extraordinary
provisional remedy of preliminary injunction.
G.R. No. 172909. March 5, 2014.
G.R. No. 172909. March 5, 2014.

SPOUSES SILVESTRE O. PLAZA AND ELENA Y. PLAZA vs.
GUILLERMO LUSTIVA, ELEODORA VDA. DE MARTINEZ AND
VICKY SAMSON GOLOSENO
Catipay, Jan Kriezl M.
31
SUMMARY OF FACTS:
On August 28, 1997, the CA ruled that among the Plaza siblings,
namely: Aureliano, Emiliana, Vidal, Marciano, and Barbara, Barbara was the
owner of the subject agricultural land. The decision became final and
executory and Barbara's successors, the respondents have continued to
occupy the property. On September 14, 1999, Vidal's son and daughter-in-
law, the petitioners, filed a Complaint for Injunction, Damages, Attorney's
Fees with Prayer for the Issuance of the Writ of Preliminary Injunction
and/or TRO against the respondents and the City Government of Butuan.
They prayed that the respondents be enjoined from unlawfully and illegally
threatening to take possession of the subject property. According to the
petitioners, they acquired the land from Virginia Tuazon in 1997; Tuazon
was the sole bidder and winner in a tax delinquency sale conducted by the
City of Butuan on December 27, 1996.
The respondents pointed out that they were never delinquent in

paying the land taxes and were in fact not aware that their property had
been offered for public auction. Moreover, Tuazon, being a government
employee, was disqualified to bid in the public auction, as stated in Section
89 of the LGC. As Tuazon's participation in the sale was void, she could
have not transferred ownership to the petitioners. For these irregularities,
the petitioners had no right to the Writ of Preliminary Injunction and/or TRO
prayed for against them.
The RTC denied the prayer for a Writ of Preliminary Injunction, and
ordered that the possession and occupation of the land be returned to the
respondents. The RTC found that the auction sale was tainted with
irregularity as the bidder was a government employee disqualified in
Accordance with Section 89 of the Local Government Code of 1991. Under
Rule 65, the petitioners challenged the RTC's order before the CA. The CA
affirmed the RTC's ruling. The petitioners filed the present petition for
review on certiorari with this Court to challenge the CA rulings. On August
8, 2013, the RTC dismissed the main action and ordered the petitioners to
pay the respondents attorney’s fees and litigation expenses.
ISSUE/S:
Whether or not the writ of preliminary injunction may issue.
The petitioners failed to show clear and unmistakable rights to be

protected by the writ; the present action has been rendered moot and
academic by the dismissal of the main action.
As the lower courts correctly found, Tuazon had no ownership to

confer to the petitioners despite the latter's reimbursement of Tuazon's
purchase expenses. Because they were never owners of the property, the
32
petitioners failed to establish entitlement to the writ of preliminary
injunction.
"[T]o be entitled to an injunctive writ, the right to be protected and

the violation against that right must be shown. A writ of preliminary
injunction may be issued only upon clear showing of an actual existing
right to be protected during the pendency of the principal action. When the
complainant's right or title is doubtful or disputed, he does not have a
clear legal right and, therefore, the issuance of injunctive relief is not
proper."
Likewise, upon the dismissal of the main case by the RTC on August
8, 2013, the question of issuance of the writ of preliminary injunction has
become moot and academic. In Arevalo v. Planters Development Bank, the
Court ruled that a case becomes moot and academic when there is no
more issue between the parties or object that can be served in deciding
the merits of the case. Upon the dismissal of the main action, the question
of the non-issuance of a writ of preliminary injunction automatically died
with it. A writ of preliminary injunction is a provisional remedy; it is
auxiliary, an adjunct of, and subject to the determination of the main
action. It is deemed lifted upon the dismissal of the main case, any appeal
therefrom notwithstanding.
DOCTRINE:
A writ of preliminary injunction may be issued only upon clear

showing of an actual existing right to be protected.
G.R. No. 172206 July 3, 2013

Office of the Ombudsman vs. De Chavez
Cayago, Fresnel A.
33
SUMMARY OF FACTS:
On August 18, 2005, the Batangas State University Board of Regents

(BSU-BOR) received an Order from Deputy Ombudsman Fernandez
directing the former to enforce the Office of the Ombudsman's Joint
Decision and Supplemental Resolution finding respondents guilty of
dishonesty and grave misconduct and imposing the penalty of
dismissal from service with its accessory penalties Pursuant to said
Order, the BSU-BOR issued Resolution No. 18, series of 2005, dated August
22, 2005, resolving to implement the Order of the Office of the
Ombudsman.
Respondents filed a petition for injunction with prayer for issuance of

a TRO or preliminary injunction before the RTC stating that the BSU-BOR
should be enjoined from enforcing the Resolution because the same are
still on appeal and, therefore, are not yet final and executory.
On September 26, 2005, the RTC ordered the dismissal of herein

respondents' petition for injunction on the ground of lack of cause of
action. Respondents filed their notice of appeal and promptly filed a Motion
for Issuance of a TRO and/or Injunction dated December 8, 2005 with the
CA. On February 17, 2006, the CA issued a Resolution granting
respondents' prayer for a TRO enjoining the BSU-BOR from enforcing its
Resolution No. 18, series of 2005.
ISSUE/S:
WON the BSU-BOR could validly enforce the Ombudsman's Decision

despite the fact that said Joint Decision and Supplemental Resolution are
pending appeal before the CA.
Yes. Note that for a writ of preliminary injunction to issue, the

following essential requisites must concur, 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.
In the present case, the right of respondents cannot be said to be

clear and unmistakable, because the prevailing jurisprudence is that the
penalty of dismissal from the service meted on government employees or
officials is immediately executory in accordance with the valid rule
of execution pending appeal uniformly observed in administrative
disciplinary cases.
The decision of the Ombudsman is immediately executory pending

appeal and may not be stayed by
the filing of an appeal or the issuance of an injunctive writ.
34
DOCTRINE:
G.R. No. 193809, March 23, 2015

SATURNINO NOVECIO, et Al. v. HON. RODRIGO F. LIM, JR., et
Al.
Cazenas, Vanessa Gem
35
SUMMARY OF FACTS:
Respondents filed complaints for forcible entry with damages

against petitioners for unlawfully squatting and taking possession of
several portions of land with an area of eight (8) hectares, described as
Project No. 9, Block 1, LC Map No. 777, BY force, intimidation, threat,
strategy and stealth.
On the other hand, petitioners contended that they have already been in
possession of the land for more than two years when the complaints were
filed. They maintained that they have planted the land with corn, durian,
coconut, mango, jackfruit, rambutan, etc. for their livelihood. They also
alleged that they were harassed by some men armed with shotguns and
pistols on February 12, 2004. Furthermore, they maintained that Manuel V.
Nieto, father of Maria Carmen J. Tuazon, had previous landholding in the
area but the same was covered by the Comprehensive Agrarian Reform
Program (CARP) and so it was subdivided in favor of the tenants.
MTC’s RULING: The MTC ruled in favor the petitioners. It found that
the respondents anchored their alleged prior possession on the fact that
they have applied title for the land as shown by a certification authorizing
land survey. On the other hand, the petitioners claimed their prior
possession on the fact that their livelihood as fisher folks and farmers
require them to live by the riverbank where the land is located. The
petitioners also asserted that they have been occupying the land for more
than two (2) years when the complaints were filed. The MTC held that the
certification issued by the BARANGAY captain that the petitioners are
residents of the place is a very strong evidence of their prior physical
possession.
RTC’s RULING: MTC’s decision was reversed and the RTC ordered
the ejectment of petitioners as it ruled that the respondents were the
actual occupants of the property in litigation long before the petitioners
had taken possession of the same property.
CA’s RULING: CA denied the petitioner’s application for the

issuance of a writ of Preliminary Injunction without giving the factual and
legal bases for such denial.
ISSUE/S:
Whether the application for the issuance of a Writ of Preliminary

Injunction should be granted.
The application for the issuance of a Writ of Preliminary Injunction

was granted.
Section 3, Rule 58 of the Rules of Court provides that a preliminary
injunction may be granted when the following have been established:
36
 That the applicant is entitled to the relief demanded, and the whole
or part of such relief consist 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;
 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
 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.
A preliminary injunction is proper when the plaintiff appears to be clearly
entitled to the relief sought and has substantial interest in the right sought
to be defended. As this Court has previously ruled, "while the existence of
the right need not be conclusively established, it must be clear.”
In this case, the petitioners have adequately shown their entitlement

to a preliminary injunction. First, the relief demanded consists in
restraining the execution of the RTC decision ordering their ejectment from
the disputed land. Second, their ejectment from the land from which they
derive their source of livelihood would work injustice to the petitioners.
Finally, the execution of the RTC decision is probably in violation of the
rights of the petitioners, tending to render the MTC judgment dismissing
the forcible entry cases ineffectual.
DOCTRINE:
In a prayer for preliminary injunction, the plaintiff is not required to

submit conclusive and complete evidence. He is only required to show that
he has an ostensible right to the final relief prayed for in his complaint.
G.R. No. 205875 June 30, 2015

Liberty Broadcasting Network vs. Atlocom
37
Diwa, Andrea Marciana
SUMMARY OF FACTS:
Atlocom Wireless System, Inc. (Atlocom) is a grantee of a legislative

franchise under Republic Act (R.A.) No. 8605. Relative to the application of
Atlocom for a Certificate of Public Convenience (CPC), NTC issued a
Provisional Authority (PA) for a period of eighteen (18) months to install,
operate and maintain a Multi-Point Multi-Channel Distribution System
[MMDS] in METRO MANILA, subject to the assignment of frequency by the
Frequency Management Division of this Commission. Atlocom thru its
counsel requested for "an extension of time. NTC denied citing the re-
allocation of MMDS frequencies for Broadband Wireless Access in
accordance with MC 06-08-2005 and the unavailability of other alternative
frequencies. Atlocom filed in the RTC a Petition to enjoin the
implementation of MC 06-08-2005 and reinstate the frequencies of
Atlocom and prayer that the said issuance be declared as null and void
because NTC unlawfully deprived Atlocom of the right to its assigned
frequencies without notice and hearing. Liberty Broadcasting Network, Inc.
(LBNI), also a grantee of a legislative franchise and holder of a Certificate
of Public Convenience and Necessity (CPCN) to operate a radio
communications network, intervened joining the defendant NTC in
opposing Atlocom's claims alleging that pursuant to MC 06-08-2005,
frequency bands were re-allocated and assigned to LBNI, which covered
the 2572-2596 MHz being claimed by Atlocom as allegedly assigned to it.
RTC denied Atlocom's application for a writ of preliminary prohibitory or
mandatory injunction. MR was also denied. CA initially denied the petition
for certiorari, but the same was later reversed and granted Preliminary
Prohibitory Injunction enjoining Respondent NTC from implementing
Memorandum Circular No. 06-08-2005, LBNI filed a Motion for
Reconsideration with Ad Cautelam Offer to File Counter-Bond and
Addendum to Motion for Reconsideration with Ad Cautelam Offer to File
Counter-Bond, but were denied. LBNI filed its petition (G.R. No. 205875)
upon which TRO enjoining the implementation of the writ of preliminary
injunction issued by the CA was granted. NTC filed its separate petition
(G.R. No. 208916) for review from the same CA Decision and Resolution.
ISSUE/S:
Whether the injunction filed by Altocom is valid.
Injunction is invalid.
NTC's inaction or delay on Atlocom's application for extension of PA

had not violated the latter's right to due process. A frequency assignment
is not automatically included in the PA granted by the NTC to an applicant
for a CPC. Further, Government may at any time withdraw the frequency
after due process. Records showed that a notice was duly published and a
38
public hearing was actually conducted. Even entities with unexpired PA
cannot claim a vested right on a specific frequency assignment.
From the evidence on record, no clear, actual and existing right to

the subject frequencies or to the extension of PA had been shown by
Atlocom.
CA gravely abused its discretion when it issued a writ of preliminary

injunction against the implementation of MC 06-08-2005 in the absence of
a clear legal right on the part of Atlocom, and subsequently denying LBNI's
offer to file counter-bond despite compliance with the requisites provided
in Section 6 of Rule 58. However, with our ruling that the writ of
preliminary injunction was improperly issued, hence, null and void, the
matter of allowing LBNI to post a counter-bond has been rendered moot.
DOCTRINE:
A preliminary injunction is defined as "[a]n order granted at any

stage of an action prior to the judgment or final order, requiring a party or
a court, agency or a person to refrain from a particular act or acts." It may
be a prohibitory injunction, which requires a party to refrain from doing a
particular act, or a mandatory injunction, which commands a party to
perform a positive act to correct a wrong in the past.
Requisites to prove before a writ of preliminary injunction will issue:

1. The applicant must have a clear and unmistakable right to be
protected, that is, a right in esse;
2. There is a material and substantial invasion of such right;
3. There is an urgent need for the writ to prevent irreparable injury
to the applicant; and
4. No other ordinary, speedy, and adequate remedy exists to
prevent the infliction of irreparable injury.
The grant or denial of a writ of preliminary injunction is discretionary

upon the trial court because the assessment and evaluation of evidence
towards that end involve findings of fact left to the said court for its
conclusive determination.
A right to be protected by injunction, means a right clearly

founded on or granted by law or is enforceable as a matter of law and not
contingent, abstract, or future rights.
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 to dissolve the writ:

1. The court, in the exercise of its discretion, finds that the
continuance of the injunction would cause great damage to the
39
defendant, while the plaintiff can be fully compensated for such
damages as he may suffer; and
2. The defendant files a counterbond.
G.R. No. 197472 September 7, 2016
40
Republic vs. Cortez
Estadilla, Britz E.
SUMMARY OF FACTS:
Respondent Rev. Claudio R. Cortez, Sr. (Rev. Cortez), a missionary by

vocation engaged in humanitarian and charitable activities, established an
orphanage and school in Punta Verde, Palaui Island, Sta. Ana, Cagayan. He
claimed that since 1962, he has been in peaceful possession of about 50
hectares of such land. In 1967, President Marcos issued Proclamation
reserving for military purposes a parcel of the public domain situated in
Palaui Island. More than two decades later in 1994, President Ramos issued
Proclamation declaring Palaui Island and the surrounding waters as marine
reserve. On June 13, 2000, Rev. Cortez filed a Petition for Injunction with
Prayer for the Issuance of a Writ of Preliminary Mandatory Injunction
against Rogelio C. Biñas (Biñas) in his capacity as Commanding Officer of
the Philippine Naval Command. Some members of the Philippine Navy,
upon orders of Biñas, disturbed his peaceful and lawful possession of the
said 50-hectare portion of Palaui Island. When he sought assistance from
the Office of the Philippine Naval Command, he was met with sarcastic
remarks and threatened with drastic military action if they do not vacate.
Thus, Rev. Cortez and his men were constrained to leave the area. RTC
issued an Order dated February 21, 2002 granting the application for a writ
of preliminary mandatory injunction. However, the same pertained to five
hectares (subject area) only, not to the whole 50 hectares claimed to have
been occupied by Rev. Cortez.
On July 3, 2007, the RTC rendered its Decision making the injunction
final and permanent. In so ruling, the said court made reference to the
Indigenous Peoples' [Fight] Act (IPRA).
In its Decision dated June 29, 2011, the CA upheld the RTC's issuance
of a final injunction.
ISSUE/S:
Whether Rev. Cortez is entitled to a final writ of mandatory injunction.
NO. Rev. Cortez is not entitled to a final writ of mandatory injunction.

While Rev. Cortez relies heavily on his asserted right of possession, he,
nevertheless, failed to show that the subject area over which he has a
claim is not part of the public domain and therefore can be the proper
object of possession.
Pursuant to the Regalian Doctrine, all lands of the public domain
belong to the State.
Hence, "[a]ll lands not appearing to be clearly under private
ownership are presumed to belong to the State. Also, public lands remain
part of the inalienable land of... the public domain unless the State is
shown to have reclassified or alienated them to private persons." To prove
41
that a land is alienable, the existence of a positive act of the government,
such as presidential proclamation or an executive order; an...
administrative action; investigation reports of Bureau of Lands
investigators; and a legislative act or a statute declaring the land as
alienable and disposable must be established.
In this case, there is no such proof showing that the subject portion
of Palaui Island has been declared alienable and disposable when Rev.
Cortez started to occupy the same. Hence, it must be considered as still
inalienable public domain.
The same goes true even if Proclamation No. 201 and Proclamation
No. 447 were made subject to private rights.
As there has been no showing that the subject parcels of land had
been segregated from the military reservation, the respondents had to
prove that the subject properties were alienable or disposable land of the
public domain prior to its withdrawal from sale and... settlement and
reservation for military purposes under Presidential Proclamation No. 265.
Without first determining the nature and character of the land, all
other requirements such as length and nature of possession and
occupation over such land do not come into play. The required length of
possession does not operate when the land is part of the public... domain.
In view of the foregoing, the Court finds that Rev. Cortez failed to
conclusively establish his claimed right over the subject portion of Palaui
Island as would entitle him to the issuance of a final injunction.
DOCTRINE:
An inalienable public land cannot be appropriated and thus may not
be the proper object of possession. Hence, injunction cannot be issued in
order to protect one's alleged right of possession over the same.
42
RECEIVERSHIP
G.R. No. 135706 October 1, 2004

SPS. CESAR A. LARROBIS, JR. and VIRGINIA S. LARROBIS,
petitioners, vs. PHILIPPINE VETERANS BANK, respondent.
Glovasa, Imelou A.
SUMMARY OF FACTS:
Spouses Larrobis (petitioner) contracted a monetary loan with

Philippine Veterans Bank (respondent) in the amount of P135,000.00,
evidenced by a promissory note, due and demandable on February 27,
1981, and secured by a Real Estate Mortgage executed on their lot
together with the improvements thereon. The bank went bankrupt and was
placed under receivership/liquidation by the Central Bank from April 25,
1985 until August 1992. On August 23, 1985, the bank sent the spouses a
demand letter for “accounts receivable in the total amount of P6,345.00 as
of August 15, 1984,” which pertains to the insurance premiums advanced
by respondent bank over the mortgaged property of petitioners. On August
23, 1995, more than fourteen years from the time the loan became due
and demandable, respondent bank filed a petition for extrajudicial
foreclosure of mortgage of petitioners’ property. The property was sold in a
public auction with Philippine Veterans Bank as the lone bidder. Petitioners
filed a complaint with the RTC to declare the extrajudicial foreclosure and
the subsequent sale thereof to respondent bank null and void. RTC
rendered its decision dismissing the complaint for lack of merit.
ISSUE/S:
43
Whether or not the period within which the respondent bank was
placed under receivership and liquidation proceedings may be considered
a fortuitous event which interrupted the running of the prescriptive period
in bringing actions.
We answer in the negative. One characteristic of a fortuitous event,

in a legal sense and consequently in relations to contract, is that its
occurrence must be such as to render it impossible for a party to fulfill his
obligation in a normal manner. Respondent’s claims that because of a
fortuitous event, it was not able to exercise its right to foreclose the
mortgage on petitioners’ property; and that since it was banned from
pursuing its business and was placed under receivership from April 25,
1985 until August 1992, it could not foreclose the mortgage on petitioners’
property within such period since foreclosure is embraced in the phrase
“doing business,” are without merit.
While it is true that foreclosure falls within the broad definition of “doing
business,” that is:
“… a continuity of commercial dealings and arrangements and
contemplates to that extent, the performance of acts or words or
the exercise of some of the functions normally incident to and in
progressive prosecution of the purpose and object of its
organization.”
it should not be considered included, however, in the acts prohibited
whenever banks are “prohibited from doing business” during receivership
and liquidation proceedings. This is consistent with the purpose of
receivership proceedings, i.e., to receive collectibles and preserve the
assets of the bank in substitution of its former management, and prevent
the dissipation of its assets to the detriment of the creditors of the bank.
In Provident Savings Bank vs. Court of Appeals, we further stated

that: “When a bank is prohibited from continuing to do business by the
Central Bank and a receiver is appointed for such bank, that bank would
not be able to do new business, i.e., to grant new loans or to accept new
deposits. However, the receiver of the bank is in fact obliged to collect
debts owing to the bank, which debts form part of the assets of the bank.
The receiver must assemble the assets and pay the obligation of the bank
under receivership, and take steps to prevent dissipation of such assets.
Accordingly, the receiver of the bank is obliged to collect pre-existing debts
due to the bank, and in connection therewith, to foreclose mortgages
securing such debts.”
It is true that we also held in said case that the period during which
the bank was placed under receivership was deemed fuerza mayor which
validly interrupted the prescriptive period. However, such ruling does not
find application in the case at bar. Unlike Provident Savings Bank, there
was no legal prohibition imposed upon herein respondent to deter its
receiver and liquidator from performing their obligations under the law.
Thus, the ruling laid down in the Provident case cannot apply in the case at
bar.
There is also no truth to respondent’s claim that it could not continue

doing business from the time it was under receivership. As correctly
pointed out by petitioner, respondent was even able to send petitioners a
44
demand letter for accounts receivable for the insurance premiums
advanced by respondent bank over the mortgaged property of petitioners.
Settled is the principle that a bank is bound by the acts, or failure to act of
its receiver. As we held in Philippine Veterans Bank vs. NLRC, a labor case
which also involved respondent bank, “. . . all the acts of the receiver and
liquidator pertain to petitioner, both having assumed petitioner’s corporate
existence. Petitioner cannot disclaim liability by arguing that the non-
payment of MOLINA’s just wages was committed by the liquidators during
the liquidation period.” However, the bank may go after the receiver who
is liable to it for any culpable or negligent failure to collect the assets of
such bank and to safeguard its assets.
Therefore, the period within which respondent bank was placed

under receivership and liquidation proceedings does not constitute a
fortuitous event which interrupted the prescriptive period in bringing
actions. Thus, since the extra-judicial foreclosure of the real estate
mortgage was effected by the bank on October 18, 1995, which was
fourteen years from the date the obligation became due on February 27,
1981, said foreclosure and the subsequent sale at public auction is
declared null and void ab initio since they are already barred by
prescription.
DOCTRINE:
When a bank is prohibited from continuing to do business by the

Central Bank and a receiver is appointed for such bank, that bank would
not be able to do new business, i.e., to grant new loans or to accept new
deposits. However, the receiver of the bank is in fact obliged to collect
debts owing to the bank, which debts form part of the assets of the bank.
The receiver must assemble the assets and pay the obligation of the bank
under receivership, and take steps to prevent dissipation of such assets.
Accordingly, the receiver of the bank is obliged to collect pre-existing debts
due to the bank, and in connection therewith, to foreclose mortgages
securing such debts.
Settled is the principle that a bank is bound by the acts, or failure to act of
its receiver. As we held in Philippine Veterans Bank vs. NLRC,a labor case
which also involved respondent bank, . . . all the acts of the receiver and
liquidator pertain to petitioner, both having assumed petitioner’s corporate
existence. Petitioner cannot disclaim liability by arguing that the non-
payment of MOLINA’s just wages was committed by the liquidators during
the liquidation period. However, the bank may go after the receiver who is
liable to it for any culpable or negligent failure to collect the assets of such
bank and to safeguard its assets.
45
G.R. No. 203585 July 29, 2013

MILA CABOVERDE TANTANO and ROSELLER CABOVERDE vs.
DOMINALDA ESPINA-CABOVERDE, EVE CABOVERDE-YU, FE
CABOVERDE-LABRADOR, and JOSEPHINE E. CABOVERDE
Gonzales, Irene A.
SUMMARY OF FACTS:
Petitioners filed a complaint of annulment of the Deed of Sale

purportedly transferring lots from their parents Maximo and Dominalda.
During the pendency of the case the parties executed a Partial Settlement
Agreement (PSA) where they fixed the sharing of the uncontroverted
properties among themselves, in particular, the adverted additional eight
(8) parcels of land including their respective products and improvements.
Under the PSA, Dominalda’s daughter, Josephine, shall be appointed as
Administrator. The PSA provided that Dominalda shall be entitled to
receive a share of one-half (1/2) of the net income derived from the
uncontroverted properties. The PSA also provided that Josephine shall have
special authority, among others, to provide for the medicine of her mother.
Both Annabelle Saldia and Jesus Tan then took their respective oaths
of office and filed a motion to fix and approve bond which was approved by
the trial court over petitioners’ opposition. Petitioners harp on the fact that
the court a quo failed to require Dominalda to post a bond prior to the
issuance of the order appointing a receiver, in violation of Section 2, Rule
59 of the Rules of court
46
Respondents insist that where there is sufficient cause to appoint a

receiver, there is no need for an applicant’s bond because under Sec. 2 of
Rule 59, the very purpose of the bond is to answer for all damages that
may be sustained by a party by reason of the appointment of a receiver in
case the applicant shall have procured such appointment without sufficient
cause.
ISSUE/S:
WON posting bond is required in receivership?
Sec. 2 of Rule 59 is very clear in that before issuing the order

appointing a receiver the court shall require the applicant to file a bond
executed to the party against whom the application is presented. The use
of the word "shall" denotes its mandatory nature; thus, the consent of the
other party, or as in this case, the consent of petitioners, is of no moment.
Hence, the filing of an applicant’s bond is required at all times. On the
other hand, the requirement of a receiver’s bond rests upon the discretion
of the court. Sec. 2 of Rule 59 clearly states that the court may, in its
discretion, at any time after the appointment, require an additional bond
as further security for such damages.
DOCTRINE:
47
Koruga vs Arcenas
48
G.R. No. 174356 January 20, 2010

Chavez vs. Court of Appeals, 610 SCRA 399
Macababbad, Realyn T.
SUMMARY OF FACTS:
Fidela Vargas owned a five-hectare of land and rice fields in

Sorsogon. Evelina Chavez had been staying in a remote portion of the land
with her family, planting coconut seedlings on the land and supervising the
harvest of coconut and palay. Fidela and Evelina agreed to divide the gross
sales of all products from the land between themselves. Since Fidela was
busy with her law practice, Evelina undertook to hold in trust for Fidela her
half of the profits. But Fidela claimed that Evelina had failed to remit her
share of the profits and, despite demand to turn over the administration of
the property to Fidela, had refused to do so. Consequently, Fidela filed a
complaint against Evelina and her daughter, Aida C. Deles, who was
assisting her mother, for recovery of possession, rent, and damages with
prayer for the immediate appointment of a receiver before the Regional
Trial Court (RTC) of Bulan, Sorsogon.
In their answer, Evelina and Aida claimed that the RTC did not have
jurisdiction over the subject matter of the case since it actually involved an
agrarian dispute. After hearing, the RTC dismissed the complaint for lack of
jurisdiction.
Dissatisfied, Fidela appealed to the CA. She also filed with that court a
motion for the appointment of a receiver. On April 12, 2006 the CA granted
the motion and ordained receivership of the land, noting that there
appeared to be a need to preserve the property and its fruits in light of
49
Fidela’s allegation that Evelina and Aida failed to account for her share of
such fruits. Fidela also filed three (3) estafa cases with the RTC of Olongapo
City and a complaint for dispossession with the DARAB against Evelina and
Aida. Fidela asked for the immediate appointment of a receiver in all these
cases.
ISSUE/S:
1. Whether or not Fidela is guilty of forum shopping

2. Whether or not the CA erred in granting respondent Fidela’s
application for receivership
3. Whether the Court of Appeals should have been more retrospect in
ordaining receivership, considering that RTC has no jurisdiction over
the case.
1. No. The above cases filed by Fidela are similar only in that they
involved the same parties and Fidela sought the placing of the
properties under receivership in all of them. But receivership is not
an action. It is but an auxiliary remedy, a mere incident of
the suit to help achieve its purpose. Consequently, it cannot be
said that the grant of receivership in one case will amount to res
judicata on the merits of the other cases. The grant or denial of this
provisional remedy will still depend on the need for it in the
particular action.
2. Yes. A petition for receivership under Section 1(b), Rule 59 of the

Rules of Civil Procedure requires that the property or fund subject of
the action is in danger of being lost, removed, or materially injured,
necessitating its protection or preservation. Its object is the
prevention of imminent danger to the property. If the action
does not require such protection or preservation, the remedy
is not receivership. Here Fidela’s main gripe is that Evelina and
Aida deprived her of her share of the land’s produce. She does not
claim that the land or its productive capacity would disappear or be
wasted if not entrusted to a receiver. Nor does Fidela claim that the
land has been materially injured, necessitating its protection and
preservation. Because receivership is a harsh remedy that can be
granted only in extreme situations, Fidela must prove a clear right to
its issuance. But she has not. Indeed, in none of the other cases she
filed against Evelina and Aida has that remedy been granted her.
3. Yes. Besides, the RTC dismissed Fidela’s action for lack of jurisdiction
over the case, holding that the issues it raised properly belong to the
DARAB. The case before the CA is but an offshoot of that RTC case.
Given that the RTC has found that it had no jurisdiction over the
case, it would seem more prudent for the CA to first provisionally
determine that the RTC had jurisdiction before granting receivership
which is but an incident of the main action.
DOCTRINE:
50
Receivership is not an action; It is but an auxiliary remedy, a mere
incident of the suit to help achieve its purpose; It cannot be said that the
grant of receivership in one case will amount to res judicata on the merits
of the other cases.
A petition for receivership under Section 1 (b), Rule 59 of the Rules of

Civil Procedure requires that the property or fund subject of the action is in
danger of being lost, removed, or materially injured, necessitating its
protection or preservation; If the action does not require such protection or
preservation, the remedy is not receivership.
51

Provisional Remedies: Preliminary Attachment

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PROVISIONAL REMEDIES

G.R. No. 185734 July 3, 2013

Arceo, Francis Emmanuel

Petitioner Lim Jr filed a complaint for a sum of money with a prayer

The parties later entered into a Compromise Agreement whereby

In granting the Motion, the RTC ruled that a writ of preliminary

Whether or not the writ of preliminary attachment was properly

NO. By its nature, preliminary attachment, under Rule 57 of the Rules

In this relation, while the provisions of Rule 57 are silent on the

Records indicate that while the parties have entered into a

In the earlier case of Chemphil Export & Import Corporation v. CA,

In that case the Court held thus:

In fine, the Court holds that the writ of preliminary attachment

G.R. No. 190028 February 26, 2014

Aure, Mark Lester

During the pendency of the QC case, the Makati RTC rendered a

Meanwhile the QC RTC ruled in favor of Ligon who sought its

YES. Case law instructs that an attachment is a proceeding in rem,

Notwithstanding the subsequent cancellation of TCT No. 9273 due to

G.R. No. 166759 November 25, 2009

Petitioners Torres filed a Complaint for sum of money and damages

RTC issued an Order directing the petitioners to post a bond in the

Respondents filed an Urgent Motion to Lift/Set Aside Order, denying

Whether or not the writ of attachment should be discharge?

Three stages before the Court grant the provisional remedy of

Thus, it is indispensable not only for the acquisition of jurisdiction

G.R. No. 125027. August 12, 2002

Chua, Mark Andrew Y.

Petitioner failed to pay private respondent shipping charges

In the instant case, the Writ of Preliminary Attachment was issued on

In conclusion, we hold that the alias summons belatedly served on

G.r. No. 203530, 13 April 2015

Guevara, Ron Jason A.

Erlinda Krishnan is a client of Luzon Development Bank wherein she

The petitioners filed an urgent ex-parte Motion to Lift Attachment or

The respondent judge issued an Order reinstating the Writ of

To discharge or lift the writ of preliminary attachment, the party is

G.R. No. 203240 March 18, 2015

On September 23, 2005, petitioner Northern Islands Co., Inc.

In connection with the application for a writ of preliminary

Thereafter, or on January 11, 2006, respondents filed a Motion to

The RTC denied the Motion to Discharge Excess Attachment. The

In the interim, the RTC rendered a Decision dated September 21,

The CA partly granted the certiorari in favor of the respondents with

Section 9, Rule 41 of the Rules of Court provides that in appeals by

The consequence is that where the main action is appealed, the

G.R. No. 212025, July 01, 2015

Marquez, Jay Michael

On March 26, 1996, petitioner Excellent Quality Apparel, Inc.,

Multi-Rich then secured the necessary bond in the amount of

Win Multi-Rich posted Surety Bond issued by respondent Far Eastern

Whether the sureties are liable for damages?

Visayas Surety – NO.

In this case, the attachment bond was issued by Visayan Surety in

Far Eastern Surety – Yes.

FESICO cannot escape liability on its surety bond issued in favor of

FESICO cannot simply escape liability by invoking that it was not a

Requisites to claim damages against the bond:

G.R. No. 181721, September 09, 2015

Nasalga, Jose Marie

Watercraft Venture Corporation (WATERCRAFT) is engaged in the

During his empolyment, Wolfe stored the sailboat, KNOTTY GULL,

Whether or not, the issuance of Writ of Preliminary Attachment is