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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 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.

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PROVISIONAL REMEDIES
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.

DOCTRINE:

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PROVISIONAL REMEDIES
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?

RESOLUTION OF ISSUE/S:

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

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PROVISIONAL REMEDIES
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:

G.R. No. 166759 November 25, 2009


SOFIA TORRES, FRUCTOSA TORRES, HEIRS OF MARIO TORRES

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PROVISIONAL REMEDIES
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:

Whether or not the writ of attachment should be discharge?


Whether or not the Court of Appeals was correct in lifting the writ?

RESOLUTION OF ISSUE/S:

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

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PROVISIONAL REMEDIES
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 attachment, the applicant’s affidavit and bond, and
the order must be served upon him.

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

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PROVISIONAL REMEDIES
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.

RESOLUTION OF ISSUE/S:

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

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PROVISIONAL REMEDIES
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.

G.r. No. 203530, 13 April 2015


Luzon Development Bank vs. Krishnan

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PROVISIONAL REMEDIES
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:

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.

RESOLUTION OF ISSUE/S:

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

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PROVISIONAL REMEDIES
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.

G.R. No. 203240 March 18, 2015


Northern Islands Co. Inc vs Garcia

Hilal, Jalanie B.

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PROVISIONAL REMEDIES
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 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.

RESOLUTION OF ISSUE/S:

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PROVISIONAL REMEDIES
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.

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

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PROVISIONAL REMEDIES
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 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?

RESOLUTION OF ISSUE/S:

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

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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:


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

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PROVISIONAL REMEDIES
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.

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.

RESOLUTION OF ISSUE/S:

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.

15
PROVISIONAL REMEDIES
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.

Phil Air Conditioning Center vs RCJ Lines and Roland Abadilla Jr.,
GR No. 193821

Orda, Dominic

SUMMARY OF FACTS:

16
PROVISIONAL REMEDIES
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:

1. Whether Phil-Air should reimburse RCJ Lines for the counter- bond
premium and its alleged unrealized profits;

RESOLUTION OF ISSUE/S:

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

17
PROVISIONAL REMEDIES
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 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.

18
PROVISIONAL REMEDIES
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 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?

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PROVISIONAL REMEDIES
(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?

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.

20
PROVISIONAL REMEDIES

PRELIMINARY INJUNCTION

G.R. No. 141853. February 7, 2001


Idolor vs CA

Pio, Francis John P.

21
PROVISIONAL REMEDIES

SUMMARY OF FACTS:

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?

RESOLUTION OF ISSUE/S:

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

22
PROVISIONAL REMEDIES
ground for denying injunction that the party 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:

23
PROVISIONAL REMEDIES
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.

RESOLUTION OF ISSUE/S:

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 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

24
PROVISIONAL REMEDIES
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

25
PROVISIONAL REMEDIES

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 the hazing
incident as initiators, including petitioner students, would just transfer to another

26
PROVISIONAL REMEDIES
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.

RESOLUTION OF ISSUE/S:

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.

27
PROVISIONAL REMEDIES

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 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

28
PROVISIONAL REMEDIES
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.

RESOLUTION OF ISSUE/S:

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.

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.

29
PROVISIONAL REMEDIES

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.

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

30
PROVISIONAL REMEDIES
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.

RESOLUTION OF ISSUE/S:

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 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."

31
PROVISIONAL REMEDIES
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.

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.

32
PROVISIONAL REMEDIES
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.

RESOLUTION OF ISSUE/S:

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.

DOCTRINE:

33
PROVISIONAL REMEDIES

G.R. No. 193809, March 23, 2015


SATURNINO NOVECIO, et Al. v. HON. RODRIGO F. LIM, JR., et Al.

Cazenas, Vanessa Gem

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,

34
PROVISIONAL REMEDIES
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.

RESOLUTION OF ISSUE/S:

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:
 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.

35
PROVISIONAL REMEDIES
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

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

36
PROVISIONAL REMEDIES
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.

RESOLUTION OF ISSUE/S:

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 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:

37
PROVISIONAL REMEDIES
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 defendant, while the
plaintiff can be fully compensated for such damages as he may suffer;
and
2. The defendant files a counterbond.

38
PROVISIONAL REMEDIES

G.R. No. 197472 September 7, 2016


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

39
PROVISIONAL REMEDIES
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.

RESOLUTION OF ISSUE/S:

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 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.

40
PROVISIONAL REMEDIES
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.

41
PROVISIONAL REMEDIES
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:

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.

RESOLUTION OF ISSUE/S:

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.”

42
PROVISIONAL REMEDIES
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 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:

43
PROVISIONAL REMEDIES
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.

G.R. No. 203585 July 29, 2013

44
PROVISIONAL REMEDIES
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

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?

RESOLUTION OF ISSUE/S:

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:

45
PROVISIONAL REMEDIES

Koruga vs Arcenas

46
PROVISIONAL REMEDIES

G.R. No. 174356 January 20, 2010


Chavez vs. Court of Appeals, 610 SCRA 399

47
PROVISIONAL REMEDIES
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 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.

RESOLUTION OF ISSUE/S:

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

48
PROVISIONAL REMEDIES
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:

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.

49