RULE 58 MADRIGAL vs. RODAS Facts: Out of the sale of 96M common shares of the Consolidated Investments, Inc.

at P0.01 par value each, constituting a controlling block of shares, claimed to have been made by the corporation to the petitioner on 15 November 1943, a controversy arose between the latter, on the one hand, and the corporation, five of its eleven directors, and the Magdalena Estate, Inc. on the other. In the complaint filed by the petitioner, two directors, who disagreed with the five on the controversy, and the secretary-treasurer are made defendants. At the time of the commencement of the action three directors were absent from the country and one position was vacant. Petitioner claims that the sale of the shares of stock in his favor was valid, for which stock certificate No. 1143 of the corporation was issued in his name. The Consolidated Investments, Inc. and five of its directors contend that the sale of the shares of stock to the petitioner was invalid, because it was made by unauthorized officers of the corporation. The Magdalena Estate, Inc. alleging subscription to 94,000,000 common shares of the Consolidated Investment, Inc., at P0.01 par value each, on 22 November 1943, joined the latter and its five directors in their contention. Upon motion of the petitioner and the filing of a bond in the sum of P50,000, a writ of preliminary injunction was issued on 23 January 1944 in the civil case referred to, restraining the defendants Claudio Aldecoa, Antonio Pratts, Agapito Raagas, Mario Bengzon, and Juan Riu, directors of Consolidated Investments, Inc. and any and all persons acting in their behalf, "from making any further newspaper publication or circulating any notice, printed or otherwise, and whatever its form, alleging the invalidity of Certificate of Stock No. 1143, issued in the name of herein plaintiff; and from recognizing the over-issued and void shares of Consolidated Investments unlawfully issued to you in favor of the defendant Magdalena Estate, Inc. subsequent to November 15, 1943," ... and the said defendants and the Magdalena Estate, and any and all persons acting in their behalf, "from making any use whatsoever of the said overissued and invalid shares of Consolidated Investments, or from exercising any right in the Consolidated Investments, in virtue of said over-issued and invalid shares, or from disposing of any or all of said over-issued and void shares." Thenceforth several motions for the dissolution of the writ of preliminary injunction were filed. On 14 July, a motion which prayed for a ruling on the alleged insufficiency of the verification of the petitioner's complaint raised for the first time in the fifth motion of 25 June, was granted on 18 August, dissolving the writ of preliminary injunction theretofore maintained, on the ground that the petitioner's verification of his complaint was insufficient, for, according to the respondent court, the facts alleged in his complaint were not known to him personally but on information and belief, and that there exists a more appropriate and adequate remedy for the protection of petitioner's interest. On 27 August, the petitioner filed a motion for reconsideration of the last order of 18 August, but it was denied on 1 September. In this original action petitioner seeks to have the last two orders of 18 August and 1 September 1947 annulled, on the ground that both orders constitute a grave abuse of discretion, against which he has no plain, adequate, and speedy remedy in the ordinary course of the law.

Issue: Whether or not the dissolution of the writ of preliminary injunction by the respondent court constitutes a grave abuse of discretion. YES Held: If one party be allowed to vote the controlling block of shares at the time of the stockholders' meeting, such a vote may render nugatory and ineffectual any judgment that may be secured by the other. At such meeting, twothirds of the stockholders may confirm or ratify the proposal or action taken by the board of directors to sell the corporate property and assets. Even the dissolution of the corporation after paying its obligations may be authorized. If not restrained by a writ, the shares of the corporation may be sold to innocent parties. 20M shares were actually sold by the Magdalena Estate to other persons before the issuance of the writ in the case pending in the respondent court. The latter should not allow such a situation to arise or to be brought about if it could be instrumental in preventing it. Hence, in cases like the one pending in the respondent court, a writ of preliminary injunction is the most appropriate and effective remedy to prevent any injustice that may be committed by one party against the other. The offer to file a bond for the dissolution of the writ of preliminary injunction to protect the interest of the party who had secured it, would require the respondent court to hear evidence on the present value of the corporate property and assets to enable it to fix the adequate amount of the bond for such dissolution, inasmuch as the main business of the corporation is the ownership of a large and centrally located commercial building, the value of which at present has greatly increased as compared to its original value. The respondent court should not waste its precious time trying to ascertain the present value of the corporate property and assets, instead of devoting such time to the determination of the controversy between the parties. Nevertheless, the respondent court dissolved the writ of preliminary injunction, in spite of several unsuccessful attempts to have it discharged, on the ground that the verification of the petitioner's complaint is insufficient, for, according to the respondent court, he swore to the facts not known to him personally but derived from information and belief, and because, in the language of the respondent court, "it having been shown that the writ of preliminary injunction issued in this case was inadequate to protect plaintiff's interest and that the quo warranto proceeding was more effective and adequate remedy, it is but proper, legal and just that the preliminary injunction be dissolved." As to the alleged insufficiency of the verification of petitioner's complaint, the SC finds that such verification is not only upon information and belief but also upon knowledge of the petitioner. As regards the inadequacy of the writ of preliminary injunction to protect the interest of the petitioner, we have already stated that such writ is the most appropriate and effective remedy to protect petitioner's interests. The fact that he attempted to protect further his interests by prompting the Solicitor General to institute quo warranto proceedings against the directors of the corporation who, in his opinion, had been elected unlawfully, does not render the writ of preliminary injunction inadequate. The dismissal of the quo warranto proceedings is proof of its inadequacy to protect the interests of the petitioner. Besides, the adequacy of a relief lies not in the choice of the remedy by the party litigant but its effectiveness. Foreseeing dire consequences that may result from the dissolution of the writ, the respondent court hastened to forestall such consequences by restraining the Magdalena Estate from selling, or otherwise disposing of, the remaining 74M common shares of the Consolidated Investments it 1

claims to own as lawful stockholder. As justification for this restraint on the Magdalena Estate, the respondent court stated that it chose to place the restriction not for the sake of the petitioner but for the protection of the public. Be it for the protection of the public or otherwise, the fact is that the respondent court would not have imposed the restraint if it had not chosen to dissolve the writ of preliminary injunction. Such restraint is a strong reason for the continuance of the writ of preliminary injunction. Not only the public but also the petitioner is entitled to such protection. For the foregoing reasons, the Court holds that the dissolution of the writ of preliminary injunction by the respondent court constitutes a grave abuse of discretion and that the order of 18 August and 1 September 1947 issued by the respondent court, dissolving the writ of preliminary injunction, should be as are set aside and annulled. EMBASSY FARMS vs. CA Facts: Sometime on August 2, 1984, Alexander G. Asuncion and Eduardo B. Evangelists entered into a Memorandum of Agreement. Under said agreement EBE obligated himself to transfer to AGA 19 parcels of agricultural land registered in his name with an aggregate area of 104,447 square meters located in Loma de Gato, Marilao, Bulacan, together with the stocks, equipment and facilities of a piggery farm owned by Embassy Farms, Inc., a registered corporation wherein 90% of its shares of stock is owned by EBE. EBE also obligated himself to cede, transfer and convey "in a manner absolute and irrevocable any and all of his shares of stocks" in Embassy Farins Inc. to AGA or his nominees "until the total of said shares of stock so transferred shall constitute 90% of the paid-in-equity of said corporation" within a reasonable time from signing of the document. Likewise, EBE obligated to turnover to AGA the effective control and management of the piggery upon the signing of the agreement. On the other hand, AGA obligated himself, upon signing of the agreement to pay to EBE the total sum of close to P8.63M. Within reasonable time from signing of the agreement AGA obligated himself to organize and register a new corporation with an authorized capital stock of P10M which upon registration will take over all the rights and liabilities of AGA. EBE endorsed in blank all his shares of stock including that of his wife and three nominees with minor holdings in Embassy Farms Inc. Out of the total 3,125 shares of stocks EBE has 2,725 shares, his wife Epifania has 250 shares, while Angel Santos, Armando Martin and Teofilo Mesina had 50 shares, each registered in their names. However, despite the indorsement, EBE retained possession of said shares and opted to deliver to AGA only upon full compliance of the latter of his obligations under the MOA. Notwithstanding the non-delivery of the shares of stocks, AGA transferred a total of 8,602 shares to several persons. For failure to comply with his obligations, EBE intimated the institution of appropriate legal action. On April 10, 1986, AGA preempted EBE by filing an action for rescission of the MOA with damages, alleging among others, EBE's misrepresentation on the piggery business since said business is actually losing and EBE's failure to execute the deeds of conveyance of the 19 parcels of land. The Pasig court granted a writ of preliminary injunction. On EBE's motion, the Pasig court issued an order to break open the premises of Embassy Farms to enforce the writ of preliminary injunction. On September 18, 1987, Embassy Farms filed a petition with the CA for prohibition with

preliminary injunction, which then enjoined the enforcement of the Pasig Court's order. Meanwhile, on July 30, 1987, Embassy Farms instituted an action for Injunction with damages against EBE. Issue: Whether or not the appellate court committed a reversible error when it sustained the order dated July 13, 1987 of the Pasig Court and lifted the restraining order it had issued in CA-G.R. SP No. 12834. Held: It must be stressed at the outset that the case at bar is merely an offshoot of a controversy yet to be decided on the merits by the Pasig Court. The action for rescission filed by AGA pending before the Pasig Court will ultimately settle the controversy as to whether it is AGA or EBE or both parties who have reneged on their obligations under the MOA. From the pleadings submitted by the parties it is clear that although EBE has indorsed in blank the shares outstanding in his name he has not delivered the certificate of stocks to AGA because the latter has not fully complied with his obligations under the memorandum of agreement. There being no delivery of the indorsed shares of stock AGA cannot therefore effectively transfer to other person or his nominees the undelivered shares of stock. For an effective transfer of shares of stock the mode and manner of transfer as prescribed by law must be followed. As provided under Section 3 of the Corporation Code of the Philippines, shares of stock may be transferred by delivery to the transferree of the certificate properly indorsed. Title may be vested in the transferree by the delivery of the duly indorsed certificate of stock. However, no transfer shall be valid, except as between the parties until the transfer is properly recorded in the books of the corporation. In the case at bar, the indorsed certificate of stock was not actually delivered to AGA so that EBE is still the controlling stockholder of Embassy Farms despite the execution of the MOA and the turn over of control and management of the Embassy Farms to AGA on August 2, 1984. When AGA filed on April 10, 1986 an action for the rescission of contracts with damages the Pasig Court merely restored and established the status quo prior to the execution of the memorandum of agreement by the issuance of a restraining order on July 10, 1987 and the writ of preliminary injunction on July 30, 1987. It would be unjust and unfair to allow AGA and his nominees to control and manage the Embassy Farms despite the fact that AGA who is the source of their supposed shares of stock in the corporation is not asking for the delivery of the indorsed certificate of stock but for the rescission of the memorandum of agreement. Rescission would result in mutual restitution so it is but proper to allow EBE to manage the farm. Compared to AGA or his nominees EBE would be more interested in the preservation of the assets, equipment and facilities of Embassy Farms during the pendency of the main case. On the enforceability of the order of the Pasig Court, We see no cogent reason to depart from the ruling of the trial court which was sustained by the Court of Appeals. Generally, an injunction under Section 21 of Batas Pambansa Bilang 129 is enforceable within the region. The reason is that the trial court has no jurisdiction to issue a writ of preliminary injunction to enjoin acts being performed or about to be performed outside its territorial boundaries. However, to avoid an irreparable prejudice, the SC allowed in Dagupan Electric Corporation vs. Pano the enforcement of an injunction to restrain acts committed outside the territorial jurisdiction of the issuing court. In Dagupan case, the COurt ruled that a lower court has jurisdiction to try a case 2

although the acts sought be restrained are committed outside its territorial jurisdiction where the principal business addresses of the parties and the decisions on the acts to be restrained are located and originated within the Court's jurisdiction. Here to avoid an injustice and irreparable injury We apply the exception rather than the general rule. Both parties are residents of the National Capital Region. AGA is a resident of 7-A Lake Street, San Juan, Metro Manila while EBE is residing at 113 R. Tirona Street, BF Homes, Paraaque, Metro Manila. AGA filed the case with the Pasig Court and the injunction as an equitable remedy intended to preserve the status quo is directed against AGA, his nominees and agents. Besides, as noted by the Pasig Court all orders to be enforced and executed at Embassy Farms in Loma de Gato, Marilao, Bulacan emanated from its main office which is located at the 2nd Floor, Agora Complex, Domingo Street, San Juan, Metro Manila. Finally, on the issue whether or not the writ of injunction was irregularly issued as it was issued on July 30, 1987 one day ahead of the injunction bond, suffice it to say that aside from the factual findings of the Court of Appeals that the date July 31, 1987, appearing on the bond is a typographical error it must be pointed out that with the injunction bond the party enjoined is amply protected against loss or damage in case it is finally decided that the injunction ought not to have been granted. CABIGAO vs. DEL ROSARIO Facts: This is a petition for a writ of prohibition ordering the respondent judge to desist from interfering with the execution of the judgment rendered in civil case No. 18451. The petition alleges that the respondent, the Honorable Simplicio del Rosario, is the judge of the first branch of the CFI. In civil case No. 18451 of said court, Tomas Cabigao vs. Eugenio Lim y Pineda, the judge of the second branch of said court, the Honorable Pedro Concepcion, rendered a judgment on November 21, 1921, in favor of the plaintiffs and against the defendant for the sum of P379, with legal interest thereon and costs. Upon appeal to the Supreme Court said judgment was affirmed on the 12th day of August, 1922. The case having been remanded to the CFI, the said judge of the second branch of said CFI issued a writ of execution on October 11, 1922. Under said writ of execution, the sheriff of the City of Manila levied upon the property of the defendant, Eugenio Lim y Pineda. On the 18th day of the same month, the respondent herein Eugenio Lim y Pineda filed a petition in branch No. 1 of said CFI praying that a preliminary injunction be issued against the sheriff of Manila restraining him from carrying into effect the aforementioned writ of execution upon the ground that there was another action pending between the same parties in the Supreme Court and in which action the defendant in execution has been given a judgment by the CFI for a much larger amount than that involved in said case No. 18451. Upon the filing of the said petition and after a preliminary hearing, the respondent judge of the first branch of said CFI issued a temporary injunction prohibiting the herein petitioner and the sheriff of Manila from executing the judgment in said civil case No. 18451. Issue: Whether or not respondent judge unlawfully interfered and exceeded his jurisdiction in the execution proceeding. YES Held: Firstly, it is settled by an overwhelming weight of authority that no court has power to interfere by injunction with the judgments or decrees of a court of concurrent or

coordinate jurisdiction having equal power to grant the relief sought by injunction. There are, it is true, a few New York cases holding that a judge of the supreme court of that State may, while sitting in one district, enjoin judicial proceedings in a coordinate court in another district, but, due to the peculiar organization of the courts of the State of New York, these cases can hardly be regarded as precedents here. It may also be mentioned that in the case of Robertson vs. Emerson and Porter, a divided court upheld an injunction issued by the Eight District Court staying the execution of a judgment rendered by another district court of the State of Louisiana; the majority opinion, however, states no reason for its ruling and the case is of very doubtful authority. The various branches of the CFI of Manila are in a sense coordinate courts and to allow them to interfere with each others' judgments or decrees by injunctions would obviously lead to confusion and might seriously hinder the administration of justice. Secondly, we have held in the case of Shioji vs. Harvey, that "Inferior courts cannot vary the mandate of the superior court, or examine it, for any other purpose than execution; nor give any other or further relief; nor review it, upon any matter decided on appeal for error apparent; nor intermeddle with it further than to settle so much as has been remanded." Conceivably, circumstances might arise subsequent to the return of a case from the Supreme Court to the trial court which might justify postponement of the execution of the judgment in the case, but where, as in the present case, the facts relied on for the issuance of the injunction exist before the case is remanded to the CFI and before the Supreme Court has lost its jurisdiction, there can certainly be no question as to the inability of an inferior court to interfere by injunction or otherwise with the execution of the mandate of the superior court. When, in the instant case, the respondent judge of the first branch of the Court of First Instance of Manila undertook to enjoin the execution of a judgment of the second branch of that court, which judgment had been affirmed by the Supreme Court, he unlawfully interfered with the functions of both courts and exceeded his jurisdiction. The petition is therefore granted, the preliminary injunction heretofore issued by the respondent judge, restraining the execution in said civil case No. 18451 of the Court of First Instance of Manila, is hereby declared null and void and the respondents are commanded absolutely to desist and refrain from interfering with said execution. ACAIN vs. BOARD OF CANVASSERS Facts: In the general elections held on November 10, 1959, Jose Malimit and Esteban Degamo were candidates for Mayor, whereas Vicente Acain and Felino Pelarca ran for vice-mayor, of the municipality of Carmen, province of Agusan. On November 16, 1969, the municipal board of canvassers met in the house of Malimit, and, by the vote of five to three, proclaimed Malimit as mayor-elect with a plurality of 45 votes over his closest opponent, Degamo. It suspended the canvass and proclamation of the candidate elected for vice-mayor at the behest of Acain, for his name did not appear in the election returns for precincts Nos. 4 and 5, which did not state whether or not he had obtained any vote therein, although he claimed to have received votes in those precincts. Three members of the board of canvassers including the municipal treasurer, objected to said proclamation of Malimit as mayor-elect, and refused to sign the certificate of canvass, upon the ground that the municipal treasurer's copy of the election return for precinct 3

No. 6 had been tampered with during the canvass, by making it appear that the votes obtained by Malimit in said precinct were 139, instead of 39, which was claimed to be the number originally written on said return. The issue having been brought to the COMELEC, the same found, by a Resolution that the claim of the three members of the board regarding the tampering of said election return was true, and that the other five members of the board who signed the certificate of canvass and proclamation "were guilty of falsification thereof, for having stated thereon that the aforementioned three members were absent, apart from violating subparagraph k, paragraph 4, Part IV, of Resolution No. 334 of the Commission, directing boards of canvassers, in the event of conflict between several statements of the election results regarding the number of votes obtained by a given candidate, when the difference may affect the result, to suspend the canvass and proclamation with respect to the office concerned, while the aggrieved party sought a recount before the proper court. Accordingly, the Commission annulled the canvass and proclamation made on November 16, 1959, ordered a recanvass of the votes for mayor and vice-mayor for Carmen, Agusan, suspended the five members of the board of canvassers who made said proclamation, and authorized Atty. Villamor Dizon, the representative of the Commission in Agusan, to appoint substitutes. On December 3, 1959, Malimit filed with the SC a petition for certiorari and prohibition, with a writ of preliminary injunction to annul the aforementioned resolution of the COMELEC and prevents its enforcement in the meantime, but, by minute resolution dated December 4, 1959, said petition was "dismissed for lack of merit." So, the board of canvassers with said five substitute members, met on December 7, 1959. It made a recanvass, using insofar as precinct No. 6, the provincial treasurer's copy of the election return, and proclaimed Esteban Degamo and Felino Palarca elected as mayor and vice-mayor by 1,012 and 944 votes, respectively, as against 957 and 483 votes of Jose Malimit and Vicente Acain, respectively, their closest opponents. On January 4, 1960, Malimit and Acain instituted the present action of prohibition, mandamus and certiorari, with preliminary injunction, to prevent the enforcement of said proclamation and the assumption of office by Degamo and Palarca, and, after due hearing, to set aside said proclamation, upon the ground that the same is null and void, because the substitute members of the board of canvassers that made said proclamation were not electors of Carmen belonging to the party of the suspended and substituted members of said board, and because petitioners had requested a suspension of the recanvass in order to secure from the proper court a recounting of the votes in precincts Nos. 4, 5 and 6, but the request was denied, thereby depriving them of a reasonable opportunity to have the aforementioned recount. The Court issued on January 7, 1960, the writ of preliminary injunction prayed for. Degamo and Palarca moved for the immediate dissolution of said writ of preliminary injunction, alleging that, prior to the issuance thereof, and even before the institution of the present proceedings, or on January 1, 1960, said respondent had already assumed their offices as mayor and vice-mayor, respectively, of Carmen, Agusan. Issue: Whether or not petitioners are entitled to the relief prayed for. NO Held: 1. The question whether respondents Degamo and Palarca should be prevented from assuming the offices of mayor and vice-mayor, respectively, of Carmen, Agusan,

has become mooted by reason of their assumption of said offices before the filing of the petition herein. 2. An injunction may be availed of only to restrain an act that is about to be done, but which has not materialized as yet, not to undo what has already been consummated. Having assumed office, upon the authority of the proclamation made by the board of canvassers, backed up by the COMELEC, Degamo and Palarca have a color of title to the offices respectively held by them, and, accordingly, they enjoy, at least, the rights of a de facto officer, among which is that their title to said offices may not be contested except directly, by writ of quo warranto and/or by election protest, not indirectly by questioning the regularity of their proclamation. An injunction is not an appropriate remedy for the removal of an officer or the reinstatement of one removed without cause. 3. Section 167 of the Revised Election Code, providing for the appointment to municipal boards of canvassers of "registered voters of the same party" as the members of said boards excluded therefrom, applies only when the latter "are candidates" for election, not when temporary substitutes are appointed due to the suspension of members, under section 3 of said Code, on account of irregularities committed in the discharge of their duties relative to the conduct of elections, as in the case at bar. 4. Petitioners herein have had ample time, from November 16 to December 7, 1959, or over 20 days, from the first canvass by the board of canvassers, within which to seek a recount of votes by the Court of First Instance of Agusan. Yet they did not do so within said period of time. 5. Upon the filing of the aforementioned petition for a writ of quo warranto and election protest on December 17 and 28, 1959, respectively, the CFI of Agusan acquired exclusive authority to inquire into and pass upon the title of Degamo and the validity of the proclamation made by the municipal board of canvassers on December 7, 1959. We cannot, upon the authority of the petition herein, filed on January 4, 1960, determine said questions without encroaching upon the jurisdiction of said court of first instance, which it is the duty of this body, as the highest Court of the land, not only to respect, but, also, to uphold. GOROSPE vs. PENAFLORIDA Facts: Zulueta and Peaflorida were candidates for the position of Provincial Governor of Iloilo in the elections held on November 8, 1955. Peaflorida was declared elected by the board of Canvassers with a plurality of 4,687 votes on November 25, 1955. Zulueta filed with the CFI of Iloilo a protest contesting the election of Peaflorida on the grounds of errors, irregularities, frauds and corrupt practices. On January 6, 1956, Ceferinode los Santos, Jr., a defeated candidate for board member, filed a criminal complaint in said court against Peaflorida and Ladrido charging the latter with a violation of Section 49 of the Revised Election Code relative to corrupt practices. This complaint was dismissed on the ground that the violation charged being a public offense, the same can only be prosecuted by a government prosecutor and not by a private individual. And taking cue of this suggestion, Zulueta lodged a complaint with the fiscal involving the same charged against Peaflorida and Ladrido. The fiscal set the complaint for investigation on February 14, 1956 at which the complainant presented his evidence, but after the same was presented, Peaflorida and Ladrido, through their counsel, asked for the suspension of the investigation on the ground that, the violation being one of the grounds on which the election protest then pending in 4

court is based, the same constitutes a prejudicial question which must first be decided before the criminal complaint could be given due course. This motion having been denied on the ground that the point raised does not constitute a prejudicial question, Peaflorida and Ladrido, through counsel, filed a petition for prohibition with injunction on April 18, 1956 with the CFI of Iloilo praying that the provincial fiscal be enjoined from proceeding with the investigation of the criminal case until after the election contest shall have been finally determined, and on April 20, the court issued a preliminary injunction after petitioner had filed a bond in the amount of P1,000. In the prohibition case, the court allowed Attys. Ceferino de los Santos, Sr., Ceferino de los Santos, Jr. and Vicente Custodio to appear as amici curiae in its order entered on July 6, 1956. In the meantime, Zulueta filed in the election protest an amended petition, which was further amended later, seeking to strike out from the original protest the averment relative to corrupt practices which are involved in the criminal case then under investigation by the fiscal, which was strongly resisted by Peaflorida. But, over his opposition, the court admitted the amended petition on July 6, 1956. Peaflorida on his part asked leave to file an amended answer containing a counterclaim. This motion was denied, whereupon Peaflorida and Ladrido brought the case byway of certiorari to the CA. On October 12, 1956, the CA denied the petition but enjoined forever the fiscal from proceeding with the investigation of the criminal complaint filed by Zulueta against Peaflorida and Ladrido. Issue: Whether or not the CA erred in enjoining the provincial fiscal from proceeding with the investigation of the criminal charge filed by Zulueta against Peaflorida and Ladrido. YES Held: The theory of the CA would appear to be as follows: the action of quo warranto allowed by Section 173 of the Revised Election Code has for its purpose the disqualification of the winning candidate. A criminal action for violation of Section 49 of the same Code on corrupt practices aims likewise at the disqualification of the winning candidate which may be imposed upon him as a punishment. Since both actions have the same purpose, both must be governed by the same rule prescribed by Section 173 which requires that the action be filed within one week from proclamation of the winning candidate. If the criminal action is taken beyond that period, its prosecution against the candidate should be forever barred. The SC finds this reasoning erroneous. To begin with, one should not confuse an action of quo warranto with the complaint for a violation of the Election Code even if the same may have the effect of disqualifying a candidate to hold the office to which he is elected. The purpose of quo warranto is merely to prevent an elective official from assuming office on the ground of ineligibility. On the other hand, the principal purpose of the criminal action is the imprisonment of the offender, be he a candidate or not, and the grounds of the action vary depending upon the acts committed. Here the acts involved are those prohibited by Section 49 of the Election Code relative to corrupt practices. The fact that the present offense carries with it the accessory penalty of disqualification from holding office does not convert it into an action of quo warranto. Lastly, there is a difference as regards the prescriptibility of the action. While an action of quo warranto should be filed within one week from proclamation, an election offense prescribes after two years, from the date of its commission, and if the discovery is made on the occasion of an election contest, the period shall commence on the date the judgment becomes final (Section 188, Revised Election

Code). Indeed, this provision would be rendered nugatory if the theory of the CA is entertained. Another point to be, considered is that, "as a general rule, an injunction will not be granted to restrain a criminal prosecution." The reason is obvious. Public interest requires that criminal acts be immediately investigated and prosecuted for the protection of society. This is more so in connection with a violation of the Election Law. The only way to curb fraud, terrorism and other corrupt practices that are committed in the elections is to demand their immediate investigation and prosecution. Only in this way can we maintain a clean election and secure the free expression of the people's will at the polls. It is contended that this rule admits of exceptions, one of them being that "injunctions may be issued to restrain vexatious and oppressive criminal prosecutions." This may be true, but we are not prepared to hold that Zulueta filed the criminal charge with the intent to harass and oppress respondents, there being no clear findings to that effect by the Court of Appeals. The fact remains that the injunction is predicated not on that ground but on another which the Court finds to be legally untenable. BROCKA vs. ENRILE Facts: Petitioners were arrested on January 28, 1985 by elements of the Northern Police District following the forcible and violent dispersal of a demonstration held in sympathy with the jeepney strike called by the Alliance of Concerned Transport Organization (ACTO). Thereafter, they were charged with Illegal Assembly. Except for Brocka, et al. who were charged as leaders of the offense of Illegal Assembly and for whom no bail was recommended, the other petitioners were released on bail of P3,000 each. Brocka, et al.'s provisional release was ordered only upon an urgent petition for bail for which daily hearings from February 1-7, 1985 were held. However, despite service of the order of release on February 9, 1985, Brocka, et al. remained in detention, respondents having invoked a Preventive Detention Action (PDA) allegedly issued against them on January 28, 1985. Neither the original, duplicate original nor certified true copy of the PDA was ever shown to them. Brocka, et al. were subsequently charged on February 11, 1985 with Inciting to Sedition. They were released provisionally on February 14, 1985, on orders of then President Marcos. Issue: Whether or not the prosecution of the criminal cases for Inciting to Sedition may lawfully be enjoined. YES Held: The general rule is that criminal prosecution may not be restrained or stayed by injunction, preliminary or final. There are however exceptions, among which are: a. To afford adequate protection to the constitutional rights of the accused. b. When necessary for the orderly administration of justice or to avoid oppression or multiplicity of actions. c. When there is a pre-judicial question which is sub judice. d. When the acts of the officer are without or in excess of authority. e. Where the prosecution is under an invalid law, ordinance or regulation. f. When double jeopardy is clearly apparent. g. Where the court has no jurisdiction over the offense. h. Where it is a case of persecution rather than prosecution. i. Where the charges are manifestly false and motivated by the lust for vengeance.

j. When there is clearly no prima facie case against the accused and a motion to quash on that ground has been denied. In the petition before the SC, Brocka, et al. have cited the circumstances to show that the criminal proceedings had become a case of persecution, having been undertaken by state officials in bad faith. espondents, on the other hand, had invoked a PDA in refusing Brocka, et al.'s release from detention (before their release on orders of then Pres. Marcos). This PDA was, however, issued on January 28, 1985, but was invoked only on February 9, 1985 (upon receipt of the trial court's order of release). Under the guidelines issued, PDAs shall be invoked within 24 hours (in Metro Manila) or 48 hours (outside Metro Manila). Noteworthy also is Brocka, et al.'s claim that, despite subpoenas for its production, the prosecution merely presented a xerox copy of the invoked PDA. ((Ilagan vs. Enrile) The hasty filing of the second offense, premised on a spurious and inoperational PDA, certainly betrays respondent's bad faith and malicious intent to pursue criminal charges against Brocka, et al. In the Ilagan case, individuals against whom PDAs have been issued should be furnished with the original, and the duplicate original, and a certified true copy issued by the official having official custody of the PDA, at the time of the apprehension. The Court does not begrudge the zeal that may characterize a public official's prosecution of criminal offenders. The Court, however, believes that this should not be a license to run roughshod over a citizen's basic constitutional lights, such as due process, or manipulate the law to suit dictatorial tendencies. Thus, while the Court agrees with the Solicitor General's observation and/or manifestation that Brocka, et al. should have filed a motion to quash the information, the SC, however, believes that such a course of action would have been a futile move, considering the circumstances then prevailing. Thus, the tenacious invocation of a spurious and inoperational PDA and the sham and hasty preliminary investigation were clear signals that the prosecutors intended to keep Brocka, et al. in detention until the second offense of "Inciting to Sedition" could be facilitated and justified without need of issuing a warrant of arrest anew. As a matter of fact the corresponding informations for this second offense were hastily filed on February 11, 1985, or two days after Brocka, et al.'s release from detention was ordered by the trial judge on February 9, 1985. ARROYO vs. ARROYO Facts: Mariano B. Arroyo and Dolores C. Vasquez de Arroyo were united in the bonds of wedlock by marriage in the year 1910, and since that date, with a few short intervals of separation, they have lived together as man and wife in the city of Iloilo until July 4, 1920, when the wife went away from their common home with the intention of living thenceforth separate from her husband. After efforts had been made by the husband without avail to induce her to resume marital relations, this action was initiated by him to compel her to return to the matrimonial home and live with him as a dutiful wife. The defendant answered, admitting the fact of marriage, and that she had left her husband's home without his consent; but she averred by way of defense and cross-complaint that she had been compelled to leave by cruel treatment on the part of her husband. The trial judge, upon consideration of the evidence before him, reached the conclusion that the husband was more to blame than his wife and that his continued ill-treatment of her furnished sufficient justification for her abandonment of

the conjugal home and the permanent breaking off of marital relations with him. Issue (1): Whether or not cross complaint conclusively proves that the plaintiff has forfeited his right to the marital society of his wife. Held: The obligation which the law imposes on the husband to maintain the wife is a duty universally recognized and is clearly expressed in articles 142 and 143, CC. Accordingly, where the wife is forced to leave the matrimonial abode and to live apart from her husband, she can, in this jurisdiction, compel him to make provision for her separate maintenance; and he may be required to pay the expenses, including attorneys fees, necessarily incurred in enforcing such obligation. Nevertheless, the interests of both parties as well as of society at large require that the courts should move with caution in enforcing the duty to provide for the separate maintenance of the wife, for this step involves a recognition of the de facto separation of the spousesa state which is abnormal and fraught with grave danger to all concerned. Facts of the case show that the plaintiff has done nothing to forfeit his right to the marital society of his wife and she is under a moral and legal obligation to return to the common home and cohabit with him. Issue (2): Whether or not the husband is entitled to a permanent mandatory injunction to compel the wife to return to the matrimonial home and live with him as his dutiful wife. Held: It is not within the province of the courts of this country to attempt to compel one of the spouses to cohabit with, and render conjugal rights to, the other. Of course where the property rights of one of the pair are invaled, an action for restitution of such rights can be maintained. But we are disinclined to sanction the doctrine that an order, enforcible by process of contempt, may be entered to compel the restitution of the purely personal rights of consortium. At best such an order can be effective for no other purpose than to compel the spouses to live under the same roof; and the experience of these countries where the court of justice have assumed to compel the cohabitation of married people shows that the policy of the practice is extremely questionable. The Court is therefore unable to hold that Mariano Arroyo in this case is entitled to the unconditional and absolute order for the return of the wife to the marital domicile, which is sought in the petitory part of the complaint; though he is, without doubt, entitled to a judicial declaration that his wife has presented herself without sufficient cause and that it is her duty to return. MERALCO vs. DEL ROSARIO Facts: One Doroteo Jose, a resident of the city of Manila, had a contract with the Manila Electric Railroad and Light Company, by virtue of which Jose received, and the Light Company furnished electricity for lighting purposes for several years. The Light Company suspected Jose of unlawfully appropriating electric current, by the use of a device whereby the meter installed in Jose's residence failed to register all the current used by him. A criminal complaint charging Jose with this offense, was dismissed, and Jose acquitted of the offense with which he was charged. Thereafter the Light Company presented a bill to Jose for the amount which it claimed he was indebted to it on account of the electricity which it alleged in the criminal complaint had been unlawfully appropriated by him, and upon Jose's refusal to pay the bill, the company cut the wire connecting Jose's residence with its power house, and refused thereafter to furnish electric current to Jose, unless 6

and until its claim for current which it alleges was unlawfully appropriated by him is paid. Thereupon Jose filed a complaint in the CFI of Manila, praying for a writ of mandamus to compel the Light Company to furnish him with electricity under his contract with the company, and under the rules, regulations, ordinances and laws under and by virtue of which the Light Company is operating in the city of Manila; and produced, ex parte, the issuance of a preliminary mandatory injunction directing the Light Company to continue furnishing electricity to Jose upon the terms and conditions set forth in the complaint, pending the final determination of the mandamus proceedings. Issue: Whether or not the CFI has jurisdiction to issue preliminary mandatory injunctions. YES Held: Counsel for the Light Company bases his contentions in this court strictly on his proposition that the Courts of First Instance in these Islands are wholly without jurisdiction to issue preliminary mandatory injunctions under any circumstances whatever. This contention cannot be maintained. The power to grant preliminary injunctions, both preventative and mandatory, is a logical and necessary incident of the general powers conferred upon the CFI as a court of record of general and unlimited original jurisdiction both legal and equitable. To secure the rights of the litigants in actions pending in these courts it may, and often does become necessary to preserve the status quo of the parties or of the subject matter in litigation. To this end the power to grant preliminary injunctions, where no other adequate remedy is provided in the ordinary course of law, is an important and, if complete justice is to be done between the parties, a necessary incident of the general jurisdiction conferred upon these courts. The "method" of obtaining preliminary injunctions generally is set forth in section 166 of Act No. 190, the Code of Civil Procedure; and while there is ground for the contention that the legislator in prescribing that method had in mind the granting of preliminary preventative injunctions only, we think that it provides at the same time the "manner" in which preliminary mandatory injunctions should be obtained. It follows that whether or not the code in express terms provides the manner for the issuance of a particular class of injunctions, jurisdiction to issue such injunctions must be maintained, if the manner in which such injunctions may be issued can fairly be inferred from the general provisions of the code, or from its provisions for the issuance of injunctions generally. The SC agrees with counsel for petitioner that a mandatory preliminary injunction should not issue where mandamus proceedings in themselves furnish an adequate remedy, or indeed in any case where adequate relief for the threatened injury will be furnished by an action at law or where adequate means a redress are in the hands of the complainant without the need for its issuance. But cases do and will arise wherein no adequate remedy exists other than the issuance of a preliminary mandatory injunction, and we think the case at bar furnishes an excellent illustration of a considerable class of such cases. Where a public service corporation which has acquired a substantial monopoly of the supply of light, power, water, transportation or the like, undertakes arbitrarily, and in manifest defiance and violation of the laws, ordinances and regulations under and by virtue of which it operates, to discriminate against one of those dependent upon it for the supply of such necessaries, and without just cause or excuse, arbitrarily and in manifest violation of a continuing duty imposed upon it by law and its own contracts, ceases

to furnish such necessaries under such conditions that a mandamus will lie to compel it to do so, we think there can be no doubt that pending the final determination of the mandamus proceedings the court wherein such proceedings are pending has no jurisdiction to issue a temporary mandatory injunction in a case where the injury complained of is a continuing one and where the invasion of the rights of the complainant during the pendency of the proceedings would work a serious injury for which there is no other adequate remedy in the ordinary course of the law. The undisputed facts in the case at bar clearly disclose that the Light Company has no valid claim against Jose on account of electricity furnished or received by him; that its action in refusing to continue to furnish electricity to his residence constitutes an arbitrary invasion of his rights, in open violation of the laws, regulations and ordinances under which the company operates; that the continued refusal to furnish electricity pending the mandamus proceedings instituted in the court below would result in serious injury to Jose for which he has no other adequate remedy than a preliminary mandatory injunction; and that the court below had therefore jurisdiction to issue the preliminary injunction complained of. LEMI vs. VALENCIA Facts: On January 11, 1963, upon application of respondent Alfredo M. Cargo, supported by a sworn statement subscribed by his co-respondent, Heraclio San Juan, the CFI of Manila issued a Search Warrant authorizing them to search radio station DZQR located at 603 Ronquillo St., Sta. Cruz, Manila, and to seize and take possession of the radio transmitter used thereat, allegedly in violation of law. On that same date and in the middle of a broadcasting program, they, accompanied by agents of the Presidential Anti-Graft Committee (PAGCOM), served the search warrant, made the corresponding search, and seized the transmitter then being used at the aforesaid station. Subsequently, Eliseo B. Lemi filed a special civil action of mandamus, with a petition for the issuance of a preliminary mandatory injunction against Brigido Valencia, Secretary of Public Works and Communications; Roberto M. San Andres, Chief, Radio Control Office; Alfredo M. Cargo, Agent of the abovenamed secretary; Heraclio San Juan, Radio Regulations Inspector, Radio Control Office; and Conrado Cajator, Chairman, Presidential Anti-Graft Committee. By virtue of Republic Act No. 1553, petitioner is the holder of a franchise authorizing him to construct, install, maintain, and operate radio stations in the Philippines. On January 8, 1960, he was issued a license by the Radio Control Officer, Department of Public Works and Communications, to construct, maintain, and operate radio station DZQR. The first license (No. 5931) issued to petitioner on January 8, 1960 was for the period from May 24, 1960 to May 23, 1961. On April 12, 1961 he filed an application for its renewal to cover the period from May 24, 1961 to May 23, 1962, and paid the corresponding fees. Although the Radio Control Office appears not to have acted at all on this application, petitioner continued to operate his station without any interference whatsoever from said office, this giving rise, naturally, to the presumption that it had no objection to the continued operation of said station. Petitioner filed a second application for renewal to cover the period from May 24, 1962 to May 23, 1963 and paid the corresponding fees. Again the Radio Control Office took no action on the matter. Respondents admit petitioner's authority to operate the radio station mentioned heretofore but claim that in the operation thereof he had, in violation of law, used a 7

transmitter different from the one he was authorized to use for the purpose. The transmitter petitioner was authorized to use was UNELMANCO-BCT 500 S/N-RCD-0503 which, with the approval of the Radio Control Office, was later changed to COLLINS T.M. 400 S/N RCD-0637, while the transmitter used by him and seized under the search warrant already mentioned was one without any name plate or serial number. Petitioner denies these allegations of the respondents and claim that the seized radio transmitter was the COLLINS transmitter which the Radio Control Office had authorized it to use instead of the original UNELMANCO transmitter; that if it appeared not to have any visible name plate or serial number, it was due to the fact that, it being a mere second hand surplus equipment, it had to be repainted. Issue: Whether or not the seizure was valid. NO Held: That because of the seizure of the radio transmitter petitioner's station cannot continue broadcasting is undeniable. In fact, by reason of the seizure affected in the middle of a broadcasting program, the latter had to be discontinued. It cannot be denied, therefore, that, in practical effect, the seizure amounted to a closure of the station and/or disapproval of petitioner's last application for the renewal of his license. Section 3 of the Radio Control Act provides that no application for the renewal of station or operator license shall be disapproved without giving the licensee a hearing. This legal provision was implemented by Department Order No. 11 which provides that a radio station license may also be revoked for violations of the radio laws and regulations, local or international; provided, however, that no such license shall be revoked without giving the licensee a hearing. While, as already stated, petitioner's last application for renewal of license has not been disapproved, we believe that the requirement of a hearing applies not only if a radio license is to be revoked, but also before the Radio Control Office may lawfully do any thing that, for all practical purposes, would amount to such revocation because it makes it impossible for the radio station concerned to continue broadcasting. This, precisely, is the situation obtaining in the present case. But respondents claim that the seizure of petitioner's transmitter was effected lawfully because it was done pursuant to a search warrant issued by the CFI. The Court perceives no force and validity in this argument. That the seizure was made under authority of a search warrant cannot obliterate the fact that such seizure was made in violation of the law requiring a previous hearing. The application for the issuance of the warrant amounted, in effect, to an effort to evade the law requiring said hearing. While courts should exercise great care in granting preliminary mandatory injunctions because the writ operates not merely to preserve the status quo between the parties but to compel one of them to perform a positive act; nevertheless, the Court held in Meralco vs. Del Rosario, that in cases of extreme urgency; where petitioner's right to the writ is clear; where considerations of relative inconvenience are strongly in his favor; where there appears to be a willful invasion of petitioner's right, the injury inflicted upon him being a continuing one; and where the effect of the mandatory injunction would not be to create a new relation between the parties but solely to re-establish a pre-existing relation between them recently and arbitrarily interrupted by the respondent, courts should not hesitate in granting the writ. Considering the facts obtaining in the present case, particularly the circumstance that petitioner's inability

to continue broadcasting through his radio station affects his contractual relations with third parties, we find it justified to grant the preliminary writ of mandatory injunction prayed for. FEDERATION OF LAND REFORM FARMERS vs. CA Facts: On May 10, 1988, respondent Jaime Torres was ordered by then DENR Secretary Fulgencio Factoran to vacate a parcel of land located in Boso-Boso, Antipolo, Rizal. He refused to leave the premises, claiming that he had been in actual possession thereof for more than 30 years. Thus, his case was referred to the Secretary of Justice, holding that since private respondent had not shown any proof that the land had been validly transferred to him or that his predecessor-in-interest, Carmen Garcia, had a title to it, he could be ejected therefrom as a squatter and be prosecuted for unlawful occupation of forest lands under Section 69 of PD 705. On the strength of said opinion, the DENR formally demanded that private respondent vacate the land. Again, he refused to heed the demand. Instead, he filed a complaint for injunction before the RTC to enjoin the DENR from ejecting him, wherein he alleged that he had a pending application for registration of title of the property. (Civil Case No. 1223-A). In its answer, DENR alleged that private respondent was squatting on a watershed and forest reservation. The DENR also alleged that private respondent had not exhausted all administrative remedies and that the trial court had no jurisdiction to issue a writ of preliminary injunction as such issuance was proscribed by Section 1 of P.D. No. 605. This decree banned the issuance by courts of preliminary injunctions in cases involving concessions, licenses and other permits issued by administrative officials or agencies for the exploitation of natural resources. On August 8, 1988, the trial court issued an order setting the hearing of the application for a writ of preliminary injunction. On August 10, 1988, the trial court, taking into account the length of time to resolve the application for a writ of preliminary injunction and to prevent the same from becoming moot and academic, issued an order for the maintenance of the status quo and restrained the defendants from ejecting private respondent. On August 23, 1988, upon the agreement of the parties, the trial court ordered that the status quo be maintained and created a committee to conduct a survey and ocular inspection for the purpose of pinpointing the areas allegedly titled in private respondent's name, the Marikina Watershed Reservation, the untitled disposable and alienable lands and the areas for townsite reservation under Proc. No. 1283. Petitioner FLRFP, through its president, petitioner Vic Tagle, filed a motion for intervention on the ground that it had entered into a MOA with DENR for the lease of 500 hectares of the Marikina Watershed Reservation. The motion also averred that the land being claimed by private respondent was inalienable. After private respondent failed to comment on the motion for intervention, the trial court allowed petitioner FLRFP's intervention and admitted the answer-inintervention. However, on November 10, 1988, the trial court, noting that petitioner FLRFP's interest as a lessee was not direct but merely collateral and that such interest may be protected in a separate proceeding, denied the motion to intervene. Petitioner FLRFP filed a motion to declare without force and effect the restraining order earlier issued by the trial court arguing that said order had long become functus officio because under Section 5, Rule 58 of the Revised Rules of Court, a temporary restraining order has a lifespan of only 20 days and that by its failure to decide whether to grant 8

the writ of preliminary injunction within said period, the trial court could no longer grant the said writ. On November 28, 1988, the trial court set aside its November 10, 1988 Order on the ground that it had been issued "thru inadvertence." The Court, however, denied petitioner FLRFP's motion to declare the restraining order without force and effect. Issue: Whether or not the trial court could extend the temporary restraining order beyond the 20-day period. YES The "20-day Rule" is found in Section 5, Rule 58 of the Revised Rules of Court, which provides: Preliminary injunction not granted without notice; issuance of restraining order. No preliminary injunction shall be granted without notice to the defendant. If it shall appear from the facts shown by affidavits or by the verified complaint that great or irreparable injury would result to the applicant before the matter can be heard on notice, the judge to whom the application for preliminary injunction was made, may issue a restraining order to be effective only for a period of 20 days from date of its issuance. Within the said 20-day period, the judge must cause an order to be served on the defendant, requiring him to show cause, at a specified time and place, why the injunction should not be granted, and determine within the same period whether or not the preliminary injunction shall be granted, and shall accordingly issue the corresponding order. In the event that the application for preliminary injunction is denied, the restraining order is deemed automatically vacated. Nothing herein contained shall be construed to impair, affect or modify in any way any rights granted by, or rules pertaining to injunctions contained in, existing agrarian, labor or social legislation. Counted from August 8, 1988, the temporary restraining order automatically expired on August 28, 1988, the end of the twentieth day from its issuance. Thus, when the trial court issued the Order of August 23, 1988 directing the maintenance of the status quo upon agreement of the parties, the temporary restraining order was still in full force and effect. Before the intervention of petitioner FLRFP was allowed, the original parties were private respondent and DENR. Be it noted that the intervention was first disallowed on the ground that the interest of petitioner as a lessee from DENR was merely collateral. That the intervention was eventually allowed on reconsideration did not alter the fact that the interest of petitioner FLRFP is collateral. The MOA between petitioner FLRFP and DENR, as well as FLRFP's tree-planting activity, may only be implemented in the event that private respondent should fail to obtain the writ of preliminary injunction for only then may DENR eject private respondent. Under the circumstances, therefore, petitioner FLRFP's interest is not merely contingent and expectant but also inchoate and subordinate to that of DENR's. It is not actual, direct and immediate. Sublessees cannot invoke any right superior to that of their sublessor, as they do not have a clear and positive right to the protection of the ancillary relief of preliminary injunction against a third party. By the same token, a lessee cannot have a right superior to that of his lessor over the premises in a dispute between the lessor and a third party regarding the ownership or possession of the said premises. Ordinarily, the efficacy of a TRO is non-extendible and the courts have no discretion to extend the same considering the mandatory tenor of the Rule. However, there is no reason to prevent a court from extending the 20-day period when the parties themselves ask for such extension or for

the maintenance of the status quo. The questioned Order of August 23, 1988 was necessary for an orderly resolution of the application for a writ of preliminary injunction. Clearly then, this Order was issued to maintain the status quo while the committee ascertained facts necessary in resolving whether the writ of preliminary injunction should be issued. By issuing said Order, the trial court should be deemed as merely exercising its inherent power under Section 5 (b), Rule 135 "to enforce order in proceedings before it" in the absence of any showing that it has gravely abused its discretion. The resolution of the application for writ of preliminary injunction in Civil Case No. 1223-A has not been rendered moot and academic by the issuance of a preliminary injunction by the same court in Civil Case No. 1300-A. Civil Case No. 1300-A was filed by Jaime Torres and Myrna M. Torres for the cancellation of the MOA between the Bureau of Forest Development (BFD), now the Forest Management Bureau (FMB) and petitioner FLRFP, and for quieting of title with restraining order and preliminary injunction. The causes of action in the two cases being distinct from each other, the issuance of the preliminary injunction in Civil Case No. 1300-A did not necessarily mean that the enforcement of the ejectment order sought to be enjoined in Civil Case No. 1223-A had also been halted. The court has still to determine the propriety of issuing a writ of preliminary injunction in the latter case, the proceedings of which had been suspended by the institution of the instant petition. The trial court shall determine in Civil Case No. 1223-A: (1) the existence of private respondent's alleged right to the property which needed protection by an injunction; and (2) the particular acts against which the injunction is to be directed as violative of said right . However, for an orderly administration of justice, the two cases should be consolidated. RULE 59 (RECEIVERSHIP) COMPAIA GENERAL DE TABACOS vs. GAUZON Facts: Defendant Romana Gauzon executed and delivered to the plaintiff (Compaia General de Tabacos de Filipinas) a mortgage upon an hacienda known as "San Jose," in the municipality of San Carlos, in the Province of Occidental Negros. Gauzon having failed to pay the said mortgage, Compaia General commenced an action for the foreclosure of said mortgage, and asked, in addition to the foreclosure of the mortgage, that a receiver be appointed to take charge of the property in question, pending the said action. On the same day, the Hon. Vicente Jocson, after hearing the petition filed in said cause, appointed the said defendant, Juan D. Pomar, an employee of Compaia General, receiver of the property involved in said foreclosure proceedings. Said foreclosure proceedings continued to a termination. After the termination of the receivership, the court required of the receiver Pomar a report and an accounting of his operations as receiver. It appears from the record that the lower court had a good deal of trouble in securing a final report. The receiver apparently acted as though his only responsibility was to Compaia General; however, finally the lower court secured what appears to be a final accounting by the receiver. The report of the receiver contained many items. Issue: Whether or not the P147.86 paid out by the receiver as interest on money borrowed to cover the first expenses of his receivership should be allowed. NO Held: There is no proof in the record which shows that it was necessary for him to borrow money to properly 9

conserve the interests of the owners and creditors interested in the administration of the hacienda. The lower court correctly said, "a receiver has no authority to borrow money unless the same is expressly given by the court." The court would be inclined, however, to allow this amount (P147.86) had the necessity been fully demonstrated for borrowing the money. In the absence of authority expressly given and especially in the absence of proof of the absolute necessity for incurring this item of expense, we refuse to modify the conclusions of the lower court with respect to this item. Issue: Whether or not the disbursement made by the receiver delivered to the aparceros as their share of the crop should be allowed. NO Held: It is a well known custom among sugar growers in the Philippine Islands, that the aparceros plant and cultivate sugar cane at their own expense, receiving one-half of the sugar produced and delivering the other half to the owner land. It is also a well known custom that the owners of the land from time to time advance money and effects to the aparceros, deducting the value of the same from the value of the sugar after the same is harvested. In the present case it appears that the receiver delivered one-half of the sugar to the aparceros without deducting the amount of money and effects advanced to them. If he, in fact, advanced to the aparceros the said sum (P3,001.94) he should have deducted it from the amount due said aparceros, and not have attempted to collect the same from the amount due the owner of the hacienda, prejudicing the owner of the hacienda thereby. Here again the receiver exceeded his authority. Nevertheless we would be inclined to allow this amount (P3,001.94) if it were a just charge against the administration of the hacienda. But, as was said above, it is not a just charge against the owner of the hacienda. This amount should have been collected from the aparceros. Judge McCabe committed no error in disallowing this item in the account of the receiver. Issue: Whether or not the P4,860.87, which the receiver claimed as compensation for his services, should be reduced to P1,000. YES The lower court, in the appointment of the receiver, did not fix any sum for his compensation; neither is it customary for courts in appointing receivers to fix their compensation in advance. Their compensation is a matter which is always left to the sound discretion of the court, to be allowed from time to time. The receiver attempted to recover as his compensation 15 per cent of the value of the sugar. The lower court found that the amount of P4,860. 87 was an unreasonable amount to be allowed as compensation for the services of the receiver in the present case. The Code of Procedure in Civil Actions allows administrators of estates of deceased persons the sum of P4 a day for the time actually employed in the administration of the estate. The lower court, following this provision of the law, believing the present case to be somewhat analogous, allowed the receiver P4 a day for his services. The lower court also allowed an additional amount, the basis of which does not clearly appear in the record, making the total compensation of the receiver the sum of P1,000. Against that order the owner of the hacienda did not appeal. Considering the negligent manner in which the receiver administered the hacienda, as appears from the record, as well as his negligence in complying with the various orders of the court with reference to rendering accounts, we are of the opinion that the sum of P1,000 is, in fact, more than a just compensation for his services. In view, however, of the fact that the owner of the hacienda did not appeal from the order of the court allowing said sum (P1,000) we approve the finding of the lower court.

Issue: Whether or not the order appointing the receiver does not extend his powers beyond those prescribed in section 175 of Act No. 190. YES The receiver believes that section 175 of the Code of Procedure in Civil Actions gave him full power to administer the property placed under his control as receiver as he might deem wise and necessary, without any intervention on the part of the court or of the interested parties. The appellant evidently overlooked the phrase of said article which says: "The receiver shall have, under the control of the court in which the action is pending, power, etc." The receiver is generally defined to be "an indifferent person between the parties litigant, appointed by the court and on behalf of all the parties, and not of the plaintiff or defendant only, to receive and hold the thing or property in litigation, pending the suit, to receive the rents, issues or profits of the land or thing in question, to receive the rents or other income, to hold possession and control of the property which is the subject matter of the litigation, and to dispose of the same or deliver it to such person or persons as may be directed by the court." The reports of the decisions of the courts are filled with decisions supporting the above doctrine. The receiver is said to be the arm and hand of the courta part of the machinery of the court, by which the rights of parties are protected. He is required not only to preserve the property, but to protect the rights of all of the parties interested. If he is not versed in the law, he should secure legal advice, with the permission of the court and in case of doubt should advise with the court and receive direction. BA FINANCE vs. CA Facts: The spouses Reynaldo and Florencia Manahan executed a promissory note binding themselves to pay Carmasters, Inc., the amount of P83,080 in thirty-six monthly installments. To secure payment, the Manahan spouses executed a deed of chattel mortgage over a motor vehicle, a Ford Cortina. Carmasters later assigned the promissory note and the chattel mortgage to petitioner BA Finance Corporation with the conformity of the Manahans. When the latter failed to pay the due installments, petitioner sent demand letters. The demands not having been heeded, petitioner filed a complaint for replevin with damages against the spouses, as well as against a John Doe, praying for the recovery of the vehicle with an alternative prayer for the payment of a sum of money should the vehicle not be returned. Upon petitioner's motion and the filing of a bond in the amount of P169,161.00 the lower court issued a writ of replevin. The court, however, cautioned petitioner that should summons be not served on the defendants within thirty days from the writ's issuance, the case would be dismissed to failure to prosecute. The warning was based on what the court perceived to be the deplorable practice of some mortgagees of "freezing the foreclosure or replevin cases" which they would so "conveniently utilize as a leverage for the collection of unpaid installments on mortgaged chattels." The service of summons upon the spouses Manahan was caused to be served by petitioner. The original of the summons had the name and the signature of private respondent Roberto M. Reyes indicating that he received a copy of the summons and the complaint. Forthwith, petitioner, through its Legal Assistant, Danilo Solano, issued a certification to the effect that it had received from Orson Santiago, the deputy sheriff of the RTC. the Ford Cortina seized from private respondent Roberto Reyes, the John Doe referred to in the complaint.

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Petitioner sought in another motion the withdrawal of the replevin bond. In view of the earlier dismissal of the case (for petitioner's failure to prosecute), the court merely noted the notice of dismissal and denied the motion to withdraw the replevin bond considering that the writ of replevin had meanwhile been implemented. Private respondent filed a motion praying that petitioner be directed to comply with the court order requiring petitioner to return the vehicle to him. In turn, petitioner filed a motion for the reconsideration of the orders. Issue: Whether or not a mortgagee can maintain an action for replevin against any possessor of the object of a chattel mortgage even if the latter were not a party to the mortgage. NO Held: Replevin, broadly understood, is both a form of principal remedy and of a provisional relief. It may refer either to the action itself, i.e., to regain the possession of personal chattels being wrongfully detained from the plaintiff by another, or to the provisional remedy that would allow the plaintiff to retain the thing during the pendency of the action and hold it pendente lite. he action is primarily possessory in nature and generally determines nothing more than the right of possession. Replevin is so usually described as a mixed action, being partly in rem and partly in personam in rem insofar as the recovery of specific property is concerned, and in personam as regards to damages involved. As an "action in rem," the gist of the replevin action is the right of the plaintiff to obtain possession of specific personal property by reason of his being the owner or of his having a special interest therein. Consequently, the person in possession of the property sought to be replevied is ordinary the proper and only necessary party defendant, and the plaintiff is not required to so join as defendants other persons claiming a right on the property but not in possession thereof. Rule 60 of the Rules of Court allows an application for the immediate possession of the property but the plaintiff must show that he has a good legal basis, i.e., a clear title thereto, for seeking such interim possession. Where the right of the plaintiff to the possession of the specific property is so conceded or evident, the action need only be maintained against him who so possesses the property. There can be no question that persons having a special right of property in the goods the recovery of which is sought; such as a chattel mortgagee, may maintain an action for replevin therefor. Where the mortgage authorizes the mortgagee to take possession of the property on default, he may maintain an action to recover possession of the mortgaged chattels from the mortgagor or from any person in whose hands he may find them. In case the right of possession on the part of the plaintiff, or his authority to claim such possession or that of his principal, is put to great doubt (a contending party might contest the legal bases for plaintiffs cause of action or an adverse and independent claim of ownership or right of possession is raised by that party), it could become essential to have other persons involved and accordingly impleaded for a complete determination and resolution of the controversy. Rule 60 of the Rules of Court allows a plaintiff, in an action for the recovery of possession of personal property, to apply for a writ of replevin if it can be shown that he is the owner of the property claimed . . . or is entitled to the possession thereof.' The plaintiff need not be the owner so long as he is able to specify his right to the possession of the property and his legal basis therefor. The question then, insofar as the matter finds relation to the instant case, is whether or not the plaintiff (herein petitioner) who has predicated his

right on being the mortgagee of a chattel mortgage should implead the mortgagor in his complaint that seeks to recover possession of the encumbered property in order to effect its foreclosure. The answer has to be in the affirmative. In a suit for replevin, a clear right of possession must be established. A foreclosure under a chattel mortgage may properly be commenced only once there is default on the part of the mortgagor of his obligation secured by the mortgage. The replevin in the instant case has been sought to pave the way for the foreclosure of the object covered by the chattel mortgage. The conditions essential for that foreclosure would be to show, firstly, the existence of the chattel mortgage and, secondly, the default of the mortgagor. These requirements must be established since the validity of the plaintiffs exercise of the right of foreclosure are inevitably dependent thereon. It would thus seem, considering particularly an adverse and independent claim of ownership by private respondent that the lower court acted improvidently when it granted the dismissal of the complaint against Dollente, albeit on petitioner's plea, on the ground that the "non-service of summons upon Ernesto Dollente would only delay the determination of the merits of the case, to the prejudice of the parties." A chattel mortgagee, unlike a pledgee, need not be in, nor entitled to the possession of the property unless and until the mortgagor defaults and the mortgagee thereupon seeks to foreclose thereon. Since the mortgagee's right of possession is conditioned upon the actual fact of default which itself may be controverted, the inclusion of other parties like the debtor or the mortgagor himself, may be required in order to allow a full and conclusive determination of the case. When the mortgagee seeks a replevin in order to effect the eventual foreclosure of the mortgage, it is not only the existence of, but also the mortgagor's default on, the chattel mortgage that, among other things, can properly uphold the right to replevy the property. The burden to establish a valid justification for that action lies with the plaintiff. An adverse possessor, who is not the mortgagor, cannot just be deprived of his possession, let alone be bound by the terms of the chattel mortgage contract, simply because the mortgagee brings up an action for replevin. BASECO INTEGRATED vs. CYBORG LEASING Facts: Pursuant to a lease agreement, Cyborg Leasing delivered one NISSAN forklift to CONPAC. The lease agreement stipulated a monthly rental of P11,000 for the use of the equipment from its date of delivery. Conpac supposedly failed and refused to pay the stipulated rentals notwithstanding demands therefor. Sometime in May 1995, petitioner took control of the operations of Conpac and seized all cargoes and equipment including the subject forklift. Petitioner ignored Cyborg's demand for the return to it of the equipment and the formal disclaimer of ownership made by CONPAC. Cyborg filed a case, captioned "Damages with Prayer for a Writ of Replevin" against Conpac Warehousing and herein petitioner Movers-Baseco Integrated Port Services. Upon application of Cyborg, a writ of replevin was issued following the filing of a P300,000 replevin bond. On 06 February 1997, petitioner was served with a copy of the summons and the writ of replevin. Petitioner filed a motion to dismiss the case on the ground of lack of jurisdiction on the part of the MTC. The MTC issued an order dismissing the complaint for lack of jurisdiction. Cyborg filed a petition for certiorari and prohibition, with preliminary injunction and/or prayer for TRO against the MTC judge and petitioner. RTC granted the petition.

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Issue: Whether or not the MTC had jurisdiction over respondent's complaint. NO Held: The complaint filed by Cyborg with the MTC prayed for the return of the Nissan Forklift to it, as owner and as lessor pursuant to a lease agreement executed by it in favor of Conpac, or, in the alternative for the payment of P150,000, plus damages, plus the amount of unpaid lease, starting 09 April 1995 at P11,000.00 per month, which as of the time of the filing of the complaint had amounted to P180,000 which, together with the value of the forklift, reach the sum of P230,000 excluding the amount of damages and attorney's fees likewise claimed. It would be incorrect to argue that the actual damages in the form of unpaid rentals were just incident of the action for the return of the forklift, considering that private respondent specifically sought in the complaint not only the seizure of the forklift from petitioner-Movers, which took control of the operations of Conpac, but likewise the payment of unpaid and outstanding rentals. Verily, the MTC's orders dismissing the complaint and denying the motion of private respondent, respectively, were properly decreed. Another set back for Cyborg's cause was the fact that its petition for certiorari, with preliminary injunction and prayer for temporary restraining order, filed before the RTC should not have been allowed not only for being late but also for not being a valid substitute for a lost appeal. A petition for certiorari under the 1997 Rules of Civil Procedure should be filed within 60 days from receipt of the assailed decision, order or resolution. Cyborg's petition with the RTC was filed 14 days late on 26 September 1997, or on the 74th day from its receipt of the order denying the motion for reconsideration on 14 July 1997. The RTC acted on the mistaken notion that the 1997 Rules of Civil Procedure took effect only in October 1997; in fact, the new rules became operative since 01 July 1997. CITIBANK vs. CA Facts: In considering for a loan obtained from Citibank, N.A. (formerly First National City Bank), private respondent Douglas Anama executed a promissory note to pay Citibank, N.A. the sum of P418,000. To secure payment of the loan, private respondent Anama also constituted a Chattel Mortgage of even date in favor of petitioner, on various machineries and equipment. On November 25, 1974, for failure and refusal of the private respondent to pay the monthly installment due under the said promissory note since January 1974, despite repeated demands, petitioner filed a verified complaint against private respondent Anama for the collection of his unpaid balance of P405,820.52 on the said promissory note, for the delivery and possession of the chattels covered by the Chattel Mortgage preparatory to the foreclosure thereof. Issue: Whether or not petitioner complied with Section 2, Rule 60 requiring the replevin plaintiff to attach an affidavit of merit to the compliant. NO Held: The facts that must be set forth in the affidavit of merit are (1) that plaintiff owns the property particularly describing the same, or that he is entitled to its possession; (2) wrongful detention by defendants of said property; (3) that the property is not taken by virtue of a tax assessment or fine pursuant to law or seized under execution or attachment or, if it is so seized, that it is exempt from seizure; and the, (4) the actual value of the property. Petitioner's complaint does not allege all the facts that should be set forth in an affidavit of merit. Although the complaint alleges that petitioner is entitled to the possession of subject properties by virtue of the chattel

mortgage executed by the private respondent, upon the latter's default on its obligation, and the defendant's alleged "wrongful detention" of the same, the said complaint does not state that subject properties were not taken by virtue of a tax assessment or fine imposed pursuant to law or seized under execution or attachment or, if they were so seized, that they are exempt from such seizure. Then too, petitioner stated the value of subject properties at a "probable value of P200,000, more or less". Pertinent rules require that the affidavit of merit should state the actual value of the property subject of a replevin suit and not just its probable value. Actual value (or actual market value) means "the price which an article would command in the ordinary course of business, that is to say, when offered for sale by one willing to sell, but not under compulsion to sell and purchased by another who is willing to buy, but under no obligation to purchase it". It bears stressing that the actual value of the properties subject of a replevin is required to be in the affidavit because such actual value will be the basis of the replevin bond required to be posted by the plaintiff. Therefore, when the petitioner failed to declare the actual value of the machineries and equipment subject of the replevin suit, there was non-compliance with Section 2, Rule 60 of the Revised Rules of Court. It should be noted, however, that the private respondent interposed the defense of lack of affidavit of merit only in his Reply to the Comment of Citibank on the Petition for Certiorari. Although respondent's defense of lack of affidavit of merit is meritorious, procedurally, such a defense is no longer available for failure to plead the same in the Answer as required by the omnibus motion rule. Issue: Whether or not the bond posted by petitioner is insufficient. YES Held: In compliance with Section 2, Rule 60 requiring the replevin plaintiff to post a bond in double the value of the properties involved, it filed a bond in the amount P400,000 which is twice the amount of P200,000 declared in its complaint. As here was a disagreement on the valuation of the properties in the first place, proper determination of the value of the bond to be posted by the plaintiff cannot be sufficiently arrived at. Though the rules specifically require that the needed bond be double the value of the properties, since plaintiff merely denominated a probable value of P200,000 and failed to aver the properties' actual value, which is claimed to be much greater than that declared by plaintiff, the amount of P400,000 would indeed be insufficient. The Rules of Court requires the plaintiff to "give a bond, executed to the defendant in double the value of the property as stated in the affidavit. Since the valuation made by the petitioner has been disputed by the respondent, the lower court should have determined first the actual value of the properties. It was thus as error for the said court to approve the bond, which was based merely on the probable value of the properties. It should be noted that a replevin bond is intended to indemnify the defendant against any loss that he may suffer by reason of its being compelled to surrender the possession of the disputed property pending trial of the action. The same may also be answerable for damages if any when judgment is rendered in favor of the defendant or the party against whom a writ of replevin was issued and such judgment includes the return of the property to him. Thus, the requirement that the bond be double the actual value of the properties litigated upon. Such is the case because the bond will answer for the actual loss to the plaintiff, which corresponds to the value of properties sought to be recovered and for damages, if any.

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Petitioner maintains that, assuming for the sake of argument that its replevin bond was grossly inadequate or insufficient, the recourse of the respondent should be to post a counterbound or a redelivery bond as provided under Section 5 of Rule 60. The Court held in a prior case that the remedies provided under Section 5, Rule 60, are alternative remedies." If a defendant in a replevin action wishes to have the property taken by the sheriff restored to him, he should, within five days from such taking, (1) post a counter-bond in double the value of said property, and (2) serve plaintiff with a copy thereof, both requirements as well as compliance therewith within the five-day period mentioned being mandatory." This course of action is available to the defendant for as long as he does not object to the sufficiency of the plaintiff's bond. Conformably, a defendant in a replevin suit may demand the return of possession of the property replevined by filing a redelivery bond executed to the plaintiff in double the value of the property as stated in the plaintiff's affidavit within the period specified in Section 5 and 6. Alternatively, "the defendant may object to the sufficiency of the plaintiff's bond, or of the surety or sureties thereon;" but if he does so, "he cannot require the return of the property" by posting a counter-bond pursuant to Section 5 and 6. LA TONDEA DISTILLERS vs. CA Facts: La Tondea Distillers, Inc. (hereafter, simply La Tondea) set out the following facts, to wit: 1) that "it manufactures and sells . . . a gin popularly known as "Ginebra San Miguel," which is contained in 350 c.c. white flint bottles with the marks of ownership "LA TONDEA, INC." and "GINEBRA SAN MIGUEL" stamped or blown-in to the bottles which . . . (it [La Tondea]) specially ordered from the bottle manufactures for its exclusive use;" 2) that said white flint bottles were registered with the Philippine Patent Office by La Tondea's predecessor-ininterest in accordance with Republic Act No. 623, 2 as amended, 3 the registration having thereafter been renewed and being valid and subsisting; 3) that use of the registered bottles by anyone without written permission of the owner is declared unlawful by Section 2 of R.A. 623; 4) that, the sale of the gin in the registered white flint, bottles does not include the sale of the bottles themselves; in fact, La Tondea's "sales invoices never specified that the sale of the beverage includes the sale of the container;" and 5) that the defendant "Te Tien Ho" has in his possession a quantity of the registered bottles worth P20,000.00. It is noteworthy that Tee Chin Ho, denominated "defendant," signed Sheriff Ruefa's receipt as a witness. He does not deny his intervention in the receipt and in fact, as will shortly be narrated, insists that it was from him that the bottles were seized. Furthermore, Sheriff Ruefa's return dated March 3, 1989 attests that prior to seizing the bottles, he served summons, copy of the complaint and its annexes, copy of the bond, and the writ of seizure personally on defendant Te Tien Ho, who requested his wife Perla Diolesa to sign his name on the original copy of the summons and the writ of seizure for and in his own behalf, such service and implementation of the writ of seizure having been effected "at 1105 Estrada St., Singalong, Manila and not at 1005 Estrada St., Singalong, Manila, as evidenced by the signature appearing on the original summons and writ." The five-day period prescribed by law within which the sufficiency of the replevin bond might be objected to or the return of the property seized required 10 expired without any person objecting to the bond or seeking the return of

the bottles. Instead an individual identifying himself as "Tee Chin Ho" filed on March 1, 1989 a pleading denominated "ANSWER (with preliminary injunction and compulsory counterclaim)," which opened with a plea that he be given "leave to intervene as party who has legal interest in the matter in litigation" such that he would be adversely affected by a distribution or disposition of the property in litigation and a declaration that he was submitting the answer "as party-intervenor." The Sheriff delivered the 20,250 empty bottles seized by him to La Tondea. Issue: Whether or not respondent judge acted without jurisdiction and with grave abuse of discretion in including in her order the return of 21,600 registered bottles, which were not the subject of the case and not within the jurisdiction of the trial court. YES A defendant or other party in a replevin proceeding against whom a writ of seizure has alternative remedies set forth in Section 5, Rule 60. The defendant may avail of these alternative options only within five (5) days after the taking of the property by the officer. Thus if a defendant in a replevin action wishes to have the property taken by the sheriff restored to him, he should within five days from such taking, (1) post a counter-bond in double the value of said property, and (2) serve plaintiff with a copy thereof both requirements as well as compliance therewith within the five-day period mentioned being mandatory. In other words, the law does not allow the defendant to file a motion to dissolve or discharge the writ of seizure (or delivery) on the ground of insufficiency of the complaint or of the grounds relied upon therefor, as in proceedings on preliminary attachment or injunction 32 and thereby put at issue the matter of the title or right, of possession over the specific chattel being replevied, the policy apparently being that said matter should be ventilated and determined only at the trial on the merits. On the other hand, a stranger to the action, i.e., a person not a party to the action, or as the law puts it, "any other person than the defendant or his agent," whose property is seized pursuant to the writ of delivery, is accorded the remedy known as terceria, a third party claim. In lieu of, or in addition to the filing of a terceria, the third party may, vindicate "his claim to the property by any proper action." This effort at vindication may take the form of a separate action for recovery of the property, or intervention in the replevin action itself. It was thus imperative for the Trial Judge, before ultimately resolving the motion for leave to intervene as party defendant of the person identifying himself as "Tee Chin Ho," to determine the precise status of said "Tee Chin Ho:" whether he was indeed a stranger to the action, as he claims, and could therefore avail of the remedy of intervention as a party defendant, or he was in truth a proper party defendant, who had been mistakenly and inadvertently referred to as "Te Tien Ho", and who therefore only had the alternative remedies aforementioned of either (a) objecting to the replevin bond or the surety or sureties thereof or (b) posting a counter-bond to compel return of the property. As of April 11, 1989, when the Judge issued the "writ of mandatory and prohibitory injunction," she was aware, or should have known, of certain facts in the record bearing strongly on the identity of "Tee Chin Ho." There were thus circumstances of record, of which Her Honor was charged with knowledge, that tended to show that La Tondea's proffered thesis was not entirely far-fetched. Unless there were a prior determination by the judge of whether or not "Tee Chin Ho" was a proper party defendant or a stranger to 13

the action, she was in no position to adjudge that this intervention as party defendant was correct. But this is what respondent Judge did. Without first making that prior determination, she proceeded to pass upon the motion for intervention; she just simply assumed and declared that Tee Chin Ho was not Te Tien Ho. She thus appears to have acted without foundation, rashly, whimsically, oppressively. Issue: Whether or not the respondent judge violated the rule on Replevin that the disposition of a property seized under a replevin order upon the defendant shall be done only within 5 days from date of seizure. YES Held: It is amazing, too, why Tee Chin Ho who was already actually a defendant because he had been served with summons and had implicitly acknowledged his status as such by signing or causing the signing of his name to certain papers in which he was described as defendant should thereafter still have moved to intervene in the action as defendant in intervention. The more direct step indicated under the circumstances, since he had already been brought into the action as defendant, although against his will, was merely to draw the court's attention, by some appropriate motion or pleading, to the lack of any cause of action against him because he was not the person impleaded as defendant in the complaint and, of course, seek relief from the writ of seizure and recovery as such damages as might have been cause to him by the enforcement thereof. However, Tee Chin Ho chose the more circuitous path: although already technically a defendant, he still filed a motion to intervene as defendant, and also with the same basic objective: to tell the Court he was not the person named in the complaint, and to recover the property seized from him as well as damages. By this maneuver, Tee Chin Ho was able to evade the legal consequences of the expiration of the five-day period prescribed by Section 5 (in relations to Section 6) of Rule 10, supra; he succeeded in recovering the bottles in question even after the expiry of said period, and what is more, as defendant in intervention, he was able to put at issue the propriety of the ground relied upon for a writ of delivery, which he would have been disqualified to do as defendant. It was seriously wrong: for the Court to have sanctioned such a maneuver. ARABESQUE INDUSTRIAL PHILIPPINES vs. CA Facts: On 19 April 1989, Arabesque Industrial Philippines, Inc. (AIPI), bought at public auction the tugboat, MT Rover of respondent PNOC Dockyard and Engineering Corp. (PDEC). Despite notice by PDEC that it was imposing lay day charges if the boat was not removed from its premises by 9 May 1989, AIPI did not remove the boat; instead, it engaged PDEC to repair it. The bill for the repair rose to P1,681 896 30. Petitioner AIPI paid only P329,115,00. leaving on a balance of P1,352,781,30. After evaluating the repair work, AIPI expressed willingness to pay only an additional of P494,593,60. On 7 September 1990, AIPI received from Atty. Rosendo Chaves, a notary public, a notice for a sale of a boat at public auction slated for 14 September 1990, pursuant to Arts. 2241 (5), 2243 and 2212 of the Civil Code. Under Art. 2241, credits for the marking, repairs, safekeeping or preservation of personal property, on the movable made, repaired, kept or possessed constitutes fifth in the order of preference (par. 5), such being considered under Art. 2245 as a mortgage or lien within the purview of the legal provisions governing insolvency. From the time of judicial demand, the interest due on such credit shall earn legal interest according to Art. 2212 although the obligation may be silent on this point.

Subsequently, AIPI sued PDEC and Notary Public Rosendo Chaves for the nullification of the public auction sale plus accounting, with prayer for preliminary injunction before RTC, Branch 147, Makati, contending that Arts. 2241 and 2243 of the Civil Code cited by PDEC were not applicable as AIPI was not yet judicially declared insolvent, AIPI praying for immediate injunction of the auction sale and for PDEC to accept P494,593.60 as a reasonable and complete payment of its services. On 12 September 1990, Judge Teofilo Guadiz, Jr. of the RTC enjoined PDEC and Notary Public Chaves from holding the slated public auction sale until after its hearing set 1 October 1990. On 20 September, PDEC filed an omnibus motion in opposition of the injunction and praying for the lifting of the TRO, for summary judgment upon admission of AIPI of the liability of P494,593.60, and for the dismissal of the complaint. AIPI opposed the motion. Upon filing by AIPI of a bond of P100,000, the RTC issued a preliminary injunction against the sale of the boat. On 26 November 1990, upon AIPI posting a bond of P1 Million, and considering the answer of the PDEC admitting the ownership of the boat by AIPI, the court granted the replevin and ordered the return of the boat to AIPI. Meanwhile, on 14 December 1990, the sheriffs enforcing the writ of replevin took possession of the boat and delivered the same to AIPI. After denial of the motion of PDEC on 20 March 1991, it filed a petition for certiorari and prohibition with the Court of Appeals under rule 65 seeking to set aside the orders of the trial court of 23 November 1990, 26 November 1990, and 20 March 1991 admitting the amended complaint, granting the writ of replevin, and denying the urgent motion of PDEC, respectively. Issue: Whether the writ of replevin was properly issued by the court a quo. NO CA correctly set aside the writ of replevin. Such writ cannot be properly directed against a lawful possessor of a chattel, and the matter of ownership as well as incurring of additional lay day fees by the continued detention of the boat by PDEC is therefore inconsequential. The requirement of posting a counterbond to reacquire possession of the chattel subject of the writ, does not apply in the case at bar because that presupposes a previous valid writ. In the case before us, however, the chattel was ordered returned to PDEC because the writ was improperly issued. Definitely, it was not issued on the basis of the non-posting of a counterbond. Issue: Whether the interlocutry orders issued herein are appealable. NO Held: Interlocutory orders, because they do not dispose of the case on the merits, are not appealable; consequently, they where correctly made subject of a petition for certiorari/prohibition before the Court of Appeals under Rule 65 of the Rules of the Court.

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