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PRELIMINARY ATTACHMENT

1. CALO VS ROLDAN
ID.; PROVISIONAL REMEDIES; WHEN TO BE APPLIED FOR AND
GRANTED. The provisional remedies denominated
attachment, preliminary injunction, receivership, and delivery
of personal property, provided in Rules 59, 60, 61 and 62 of
the Rules of Court, respectively, are remedies to which parties
litigant may resort for the preservation or protection of their
rights or interests, and for no other purpose, during the
pendency of the principal action. If an action, by its nature,
does not require such protection or preservation, said
remedies can not be applied and granted. To each kind of
action or actions a proper provisional remedy is provided for
by law. The Rules of Court clearly specify the cases in which
they may be properly granted.
2. BORJA VS PLATON
1.ATTACHMENT; ISSUANCE IN FAVOR OF A DEFENDANT WHO
SETS UP A COUNTERCLAIM; DISCRETION OF TRIAL COURT. A
writ of preliminary attachment may be issued in favor of a
defendant who sets up a counterclaim. For the purpose of the
protection afforded by such attachment, it is immaterial
whether the defendants simply presented a counterclaim or
brought a separate civil action against the plaintiff. To lay
down a subtle distinction would be to sanction that formalism
and that technicality which are discountenanced by the
modern laws of procedure for the sake of speedy and
substantial justice.
3. PROFESSIONAL VIDEO VS TESDA
Jurisprudence teaches us that the rule on the issuance of a
writ of attachment must be construed strictly in favor of the
defendant. Attachment, a harsh remedy, must be issued only
on concrete and specific grounds and not on general
averments merely quoting the words of the pertinent rules. 42
Thus, the applicant's affidavit must contain statements clearly
showing that the ground relied upon for the attachment
exists.
Section 1 (d), Rule 57 of the Rules of Court applies where a
party is guilty of fraud in contracting a debt or incurring an
obligation, or in concealing or disposing of the property for the
taking, detention or conversion of which the action is brought.
In Wee v. Tankiansee, 43 we held that for a writ of attachment
to issue under this Rule, the applicant must sufficiently show
the factual circumstances of the alleged fraud because
fraudulent intent cannot be inferred from the debtor's mere
non-payment of the debt or failure to comply with his
obligation. The affidavit, being the foundation of the writ,
must contain particulars showing how the imputed fraud was
committed for the court to decide whether or not to issue the
writ. To reiterate, a writ of attachment can only be granted on
concrete and specific grounds and not on general averments
merely quoting the words of the rules. 44
4. LIBERTY INSURANCE CORPORATION VS CA
1.REMEDIAL LAW; PROVISIONAL REMEDIES; ATTACHMENT;
REMEDY AGAINST A PARTY GUILTY IN CONTRACTING DEBT OR
INCURRING AN OBLIGATION. In an action against a party
who has been guilty of fraud in contracting the debt or
incurring the obligation upon which the action is brought,
Section 1 (d) of Rule 57 authorizes the plaintiff or any proper
party to have the property of the adverse party attached as
security for the satisfaction of any judgment that may be
recovered therein. To sustain an attachment on this ground, it
must be shown that the debtor in contracting the debt or
incurring the obligation intended to defraud the creditor. The
fraud must relate to the execution of the agreement and must
have been the reason which induced the other party into
giving consent which he would not have otherwise given. To
constitute a ground for attachment in Section 1 (d), Rule 57 of
the Rules of Court, fraud should be committed upon
contracting the obligation sued upon.

2.ID.; ID.; ID.; ID.; CASE AT BAR. A debt is fraudulently


contracted if at the time of contracting it the debtor has a
preconceived plan or intention not to pay, as it is in this case.
Fraud is a state of mind and need not be proved by direct
evidence but may be inferred from the circumstances
attendant in each case (Republic v. Gonzales, 13 SCRA 633
[1965]). Here, it has been established that all the collaterals
given by the respondent Arkin as security for the bond were
either fraudulent or heavily encumbered. Records show that
Transfer Certificate of Title No. 300011 supposedly issued by
the Register of Deeds of Rizal covering a parcel of land with
an area of 25,750 square meters located at Muntinlupa, Las
Pias, M.M. and registered in the name of Carmen
Madlangbayan, used as one of the collaterals, turned out to
be fake and spurious as the genuine TCT No. 300011 of the
Office of the Register of Deeds of Rizal covers a parcel of land
located in Angono, Rizal with an area of 514 square meters
registered in the name of persons other than respondents
Imperial, Arkin, and Madlangbayan. Likewise, the supposed
lien-free motor vehicle offered as collateral turned out to be
heavily mortgaged and was even disposed of without
informing petitioner. Furthermore, it has also been proven that
subsequent to the issuance of the May 30, 1988 surety bond,
respondent Arkin started disposing of his other properties.
Prior to the filing of the complaint, respondent not only had
sold the motor vehicle given as collateral but that his two
other condominium units, were also alienated in favor of a
company of which respondent Arkin is the president. All these
circumstances unerringly point to the devious scheme of
respondent Arkin to defraud petitioner.
3.ID.; ID.; ID.; MOTION TO DISSOLVE ATTACHMENT, NOT
ALLOWED WHERE MAIN ACTION IS BASED ON FRAUD. When
the preliminary attachment is issued upon a ground which is
at the same time the applicant's cause of action: e.g., . . . an
action against a party who has been guilty of fraud in
contracting the debt or incurring the obligation upon which
the action is brought, the defendant is not allowed to file a
motion to dissolve the attachment under Section 13 of Rule
57 by offering to show the falsity of the factual averments in
the plaintiff's application and affidavits on which the writ was
based and consequently that the writ based therein had been
improperly or irregularly issued the reason being that the
hearing on such motion for dissolution of the writ would be
tantamount to a trial on the merits. In other words, the merits
of the action would be ventilated at a mere hearing of a
motion, instead of the regular trial. Therefore, when the writ
of attachment is of this nature, the only way it can be
dissolved is by a counterbond. (Mindanao Savings and Loan
Assoc. vs. Court of Appeals, 172 SCRA 480 [1989])
5. OLSEN VS OLSEN
PRELIMINARY ATTACHMENT; DENIAL OF ANNULMENT OF;
APPEAL. An order denying a motion or the annulment of a
preliminary attachment may be renewed is an appeal taken
from the final judgment rendered in the principal case.
CORPORATIONS; CIVIL FRAUD; ABUSE OF CONFIDENCE OF
OFFICERS. He who has almost an exclusive control over the
function of the corporation and its funds on account of his
triple capacity as president, treasurer and general manager
must be very scrupulous in the application of the funds of said
corporation to his own use. The act of taking money of the
corporation for his personal use without being duly authorized
therefor constitutes such an irregularity that, while it does not
amount to a criminal fraud, is undoubtedly a fraud of a civil
character, because it is an abuse of confidence to the damage
of the corporation and its stockholders and constitutes one of
the grounds enumerated in section 424, in connection with
412, of the Code of Civil Procedure for the issuance of a
preliminary attachment.
6. NG WE VS TANKIANSEE
The affidavit, being the foundation of the writ, 35 must
contain such particulars as to how the fraud imputed to

respondent was committed for the court to decide whether or


not to issue the writ. 36 Absent any statement of other factual
circumstances to show that respondent, at the time of
contracting the obligation, had a preconceived plan or
intention not to pay, or without any showing of how
respondent committed the alleged fraud, the general
averment in the affidavit that respondent is an officer and
director of Wincorp who allegedly connived with the other
defendants to commit a fraud, is insufficient to support the
issuance of a writ of preliminary attachment. 37 In the
application for the writ under the said ground, compelling is
the need to give a hint about what constituted the fraud and
how it was perpetrated 38 because established is the rule that
fraud is never presumed. 39 Verily, the mere fact that
respondent is an officer and director of the company does not
necessarily give rise to the inference that he committed a
fraud or that he connived with the other defendants to
commit a fraud. While under certain circumstances, courts
may treat a corporation as a mere aggroupment of persons, to
whom liability will directly attach, this is only done when the
wrongdoing has been clearly and convincingly established. 40
7. FCY CONSTRUCTION VS CA
"SECTION 1. Grounds upon which attachment may issue. A
plaintiff or any proper party may, at the commencement of
the action or at any time thereafter, have the property of the
adverse party attached as security for the satisfaction of any
judgment that may be recovered in the following cases: . . .
(d) In an action against a party who has been guilty of a fraud
in contracting the debt or incurring the obligation upon which
the action is brought, or in concealing or disposing of the
property for the taking, detention or conversion of which the
action is brought; . . .." The fraud of which petitioners are
accused of and which was the basis for the issuance of the
questioned attachment, is fraud alleged to have been
committed upon contracting the obligation sued upon. In
Liberty Insurance Corporation vs. Court of Appeals, this Court,
discussing Section 1(d), Rule 57, cautioned as follows To
sustain an attachment on this ground, it must be shown that
the debtor in contracting the debt or incurring the obligation
intended to defraud the creditor. The fraud must relate to the
execution of the agreement and must have been the reason
which induced the other party into giving consent which he
would not have otherwise given. To constitute a ground for
attachment in Section 1 (d), Rule 57 of the Rules of Court,
fraud should be committed upon contracting the obligation
sued upon.
8. ABOITIZ VS COTABATO
ID.; PROVISIONAL REMEDIES; ATTACHMENT; INSOLVENCY NOT
A GROUND FOR ISSUANCE THEREOF. On the strength of the
explicit ruling of this Court in Max Chamorro & Co. vs.
Philippine Ready Mix Concrete Company, Inc. and Hon. Manuel
P. Barcelona, the respondent Court of Appeals correctly took
its position in the negative on the question of whether
insolvency is a ground for the issuance of a writ of
attachment.
9. MIALHE VS DE LENCQUESAING
While it is true that from the aforequoted provision
attachment may issue "in an action against a party who
resides out of the Philippines, " irrespective of the nature of
the action or suit, and while it is also true that in the case of
Cu Unjieng, et al vs. Albert, 58 Phil. 495, it was held that
"each of the six grounds treated ante is independent of the
others," still it is imperative that the amount sought be
liquidated.
10. TOLEDO VS BURGOS
REMEDIAL
LAW;
PROVISIONAL
REMEDIES;
WRIT
OF
PRELIMINARY ATTACHMENT; NOTICE AND HEARING; NOT AN
INDISPENSABLE AND MANDATORY REQUISITE. There was no
need for him to, as against petitioner's claim, set a hearing on
the said application. This is because the issuance of a writ of
preliminary attachment may be made by the Court ex parte.

As We held in the case of Filinvest Credit Corporation vs.


Relova, 117 SCRA 420, and reiterated in Belisle Investment
and Finance Co., Inc. vs. State Investment House, Inc., 151
SCRA 630: "Nothing in the Rules of Court makes notice and
hearing indispensable and mandatory requisites for the
issuance of a writ of attachment. The statement in the case
Blue Green Waters, Inc. vs. Hon. Sundiam and Tan cited by
private respondent, to the effect that the order of attachment
issued without notice to therein petitioner Blue Green Waters,
Inc. and without giving it a chance to prove that it was not
fraudulently disposing of its properties is irregular, gives the
wrong implication. As clarified in the separate opinion of Mr.
Justice Claudio Teehankee in the same cited case, a writ of
attachment may be issued ex parte."
11. PHILIPPINE BANK OF COMMUNICATIONS VS CA
We find an absence of factual allegations as to how the fraud
alleged by petitioner was committed. As correctly held by
respondent Court of Appeals, such fraudulent intent not to
honor the admitted obligation cannot be inferred from the
debtor's inability to pay or to comply with the obligations. 9
On the other hand, as stressed, above, fraud may be gleaned
from a preconceived plan or intention not to pay. This does
not appear to be so in the case at bar. In fact, it is alleged by
private respondents that out of the total P419,613.96 covered
by the subject trust receipts, the amount of P400,000.00 had
already been paid, leaving only P19,613.96 as balance.
Hence, regardless of the arguments regarding penalty and
interest, it can hardly be said that private respondents
harbored a preconceived plan or intention not to pay
petitioner.

12. G.B. INC VS SANCHEZ


The merits of a main action are not triable in a motion to
discharge an attachment, otherwise an applicant for the
dissolution could force a trial on the merits of the case on this
motion.
13. INSULAR SAVINGS BANK VS CA
With the view we take of this case, the trial court, in requiring
petitioner to post a counter-bond in the amount of
P27,237,700.00, obviously glossed over one certain
fundamental. We refer to the fact that the attachment
respondent applied for and the corresponding writ issued was
only for the amount of P25.2 Million. Respondent, it bears to
stress, did not pray for attachment on its other claims,
contingent and unliquidated as they were. Then, too, the
attaching writ rightly excluded such claims. While the records
do not indicate, let alone provide a clear answer as to the
actual value of the property levied upon, it may reasonably be
assumed that it is equal to respondent's principal claim. Be
that as it may, it was simply unjust for the trial court to base
the amount of the counter-bond on a figure beyond the
P25,200,000.00
threshold,
as
later
reduced
to
P12,600,200.00. TSIaAc

PRELIMINARY INJUNCTION
14. LIMITLESS POTENTIALS VS CA
A preliminary injunction is a provisional remedy that a party
may resort to in order to preserve and protect certain rights
and interests during the pendency of an action. 19 It is an
order granted at any stage of an action, prior to the judgment
or final order, requiring a party, court, agency or person to
perform or to refrain from performing a particular act or acts.
A preliminary injunction, as the term itself suggests, is merely
temporary, subject to the final disposition of the principal
action. 20 It is issued to preserve the status quo ante, which is
the last actual, peaceful, and uncontested status that
preceded the actual controversy, 21 in order to protect the

rights of the plaintiff during the pendency of the suit.


Otherwise, if no preliminary injunction is issued, the
defendant may, before final judgment, do the act which the
plaintiff is seeking the court to restrain. This will make
ineffectual the final judgment that the court may afterwards
render in granting relief to the plaintiff. 22 The status quo
should be existing ante litem motam, or at the time of the
filing of the case. For this reason, a preliminary injunction
should not establish new relations between the parties, but
merely maintain or re-establish the pre-existing relationship
between them. 23
The purpose of a preliminary injunction is to prevent
threatened or continuous irremediable injury to some of the
parties before their claims can be thoroughly studied and
adjudicated. Thus, to be entitled to an injunctive writ, the
petitioner has the burden to establish the following requisites:
ETIDaH
(1)a right in esse or a clear and unmistakable right to be
protected;
(2)a violation of that right;
(3)that there is an urgent and permanent act and urgent
necessity for the writ to prevent serious damage. 24
15. SEMIRARA
COAL
CORPORATION
VS
HGL
DEVELOPMENT
Under Article 539 of the New Civil Code, a lawful possessor is
entitled to be respected in his possession and any disturbance
of possession is a ground for the issuance of a writ of
preliminary mandatory injunction to restore the possession.
It is likewise established that a writ of mandatory injunction is
granted upon a showing that
(a) the invasion of the right is material and
substantial;
(b) the right of complainant is clear and
unmistakable; and
(c) there is an urgent and permanent necessity
for the writ to prevent serious damage. 23
In the instant case, it is clear that as holder of a pasture lease
agreement under FLGLA No. 184, HGL has a clear and
unmistakable right to the possession of the subject property.
Recall that under the FLGLA, HGL has the right to the lawful
possession of the subject property for a period of 25 years or
until 2009. As lawful possessor, HGL is therefore entitled to
protection of its possession of the subject property and any
disturbance of its possession is a valid ground for the issuance
of a writ of preliminary mandatory injunction in its favor. The
right of HGL to the possession of the property is confirmed by
petitioner itself when it sought permission from HGL to use
the subject property in 1999. In contrast to HGL's clear legal
right to use and possess the subject property, petitioner's
possession was merely by tolerance of HGL and only because
HGL permitted petitioner to use a portion of the subject
property so that the latter could gain easier access to its
mining area in the Panaan Coal Reserve. aACEID
16. CHINA BANKING CORPORATION VS CO
It is settled that the grant of a preliminary mandatory
injunction rests on the sound discretion of the court, and the
exercise of sound judicial discretion by the lower court should
not be interfered with except in cases of manifest abuse. 14
It is likewise settled that a court should avoid issuing a writ of
preliminary mandatory injunction which would effectively
dispose of the main case without trial. 15
To be entitled to a writ of preliminary injunction, however, the
petitioners must establish the following requisites: (a) the
invasion of the right sought to be protected is material and

substantial; (b) the right of the complainant is clear and


unmistakable; and (c) there is an urgent and permanent
necessity for the writ to prevent serious damage. 16
Since a preliminary mandatory injunction commands the
performance of an act, it does not preserve the status quo
and is thus more cautiously regarded than a mere prohibitive
injunction. 17 Accordingly, the issuance of a writ of
preliminary mandatory injunction is justified only in a clear
case, free from doubt or dispute. 18 When the complainant's
right is thus doubtful or disputed, he does not have a clear
legal right and, therefore, the issuance of injunctive relief is
improper.
17. DEVESA VS ARBES
INJUNCTIONS; SPECIAL REMEDY OF THE CODE OF CIVIL
PROCEDURE DISTINGUISHED FROM THE OLD SPANISH WRITS.
Injunctions or interdictos prohibitorios, for the issuance of
which provision is made in the new Code of Civil Procedure,
while they resemble the interdictal actions of the Spanish
procedural law in some respects, are wholly distinct therefrom
and, as a rule, the circumstances under which, in accordance
with the Spanish law, interdictos de adquirir, de retener, de
recobrar or de despojo properly issued would not justify nor
sustain the issuance of an injunction, interdicto prohibitorio,
as defined and provided in the new Code of Civil Procedure.
2.ID.; LIMITATION UPON USE OF WRITS OF INJUNCTION. An
injunction is a special remedy contained in the new Code of
Civil Procedure and adopted from American and English law of
procedure, and the accepted American doctrine limiting its
use to cases where there is no other adequate remedy, and
otherwise controlling the issue thereof, must be deemed to
limit its use in like manner in this jurisdiction.
3.ID.; WRITS NOT AVAILABLE FOR RECOVERY OF PROPERTY
WHEN TITLE IS NOT ESTABLISHED. Injunctions, as a rule,
will not be granted to take property out of the possession or
control of one party and place it into that of another whose
title has not clearly been established by law.
18. PREYSLER VS CA (purpose)
Prefatorily, we note that what was granted by the trial court
was the preliminary injunction, and that the main case for
right of way has not yet been settled. We have in previous
cases 9 said that the objective of a writ of preliminary
injunction is to preserve the status quo until the merits of the
case can be fully heard. Status quo is the last actual,
peaceable and uncontested situation which precedes a
controversy. 10 The Court of Appeals was correct in its
findings that the last actual, peaceful and uncontested
situation that preceded the controversy was solely the access
of petitioner and his household to his property outside the
subdivision for visits and inspections. At the time the writ was
applied for in 1995, there was still no construction going on in
the property. It was merely raw land. The use of the
subdivision roads for ingress and egress of construction
workers, heavy equipment, delivery of construction materials,
and installation of power lines, are clearly not part of the
status quo in the original writ. Along this line, the Court of
Appeals properly set aside the amended writ and reinstated
the original writ.
19. MANTILE VS CAJUCOM (scope)
1.PRELIMINARY INJUNCTION; ACTS ALREADY PERFORMED CAN
NOT BE PROHIBITED; CONTEMPT. Section 162 of the Code
of Civil Procedure, in defining a preliminary injunction, states:
That it is the order or writ which prohibits a particular person
from performing a particular act, and therefore, if a writ of
preliminary injunction has been issued against a particular
person, enjoining him, for example, from performing any act
whatever that may tend to close and obstruct an irrigation
ditch by preventing the passage of the water, when the said
ditch was already closed, it can not be understood that
the person, against whom the prohibitory order was issued,

willfully disregarded and disobeyed the said judicial writ by


not removing the obstacle that prevented the flow of the
water, because this last operation is not covered by the writ of
injunction.
2.ID.; ID.; ID. If in a writ of preliminary injunction those who
become the defendants are not enjoined or required to
remove the impediment or obstacle complained of as being
prejudicial to the rights and interests of the plaintiff, but
merely to abstain or desist from performing any act contrary
and prejudicial to such rights and interests, the mere fact of
their not having taken out or removed the obstacle or
impediment, which already existed at the time of the issuance
of the injunction, does not constitute disobedience to, or
contempt of, a judicial order, because what has already been
done can not be prohibited. (Municipal Council of Sta. Rosa vs.
Provincial Board of La Laguna, 3 Phil. Rep., 206.)
20. FELICIANO VS ALIPIO (Vs prohubition)
ACTION FOR DECLARATORY RELIEF CONSIDERED AS ONE FOR
PROHIBITION. Although the petition filed against public
Officers is for declaratory relief, yet if it prays also for the
issuance of a permanent injunction from carrying out the
provisions of a Department Circular on grounds of
unconstitutionality, the same is equivalent to an action for
prohibition and the court should not dismiss the petition but
should proceed with the case considering the action as one for
prohibition.
21. PHILIPPINE NATIONAL BANK VS RJ VENTURES
(irreparable injury defines)
To be sure, this court has declared that the term irreparable
injury has a definite meaning in law. It does not have
reference to the amount of damages that may be caused but
rather to the difficulty of measuring the damages inflicted. If
full compensation can be obtained by way of damages, equity
will not apply the remedy of injunction. The Court of Appeals
declared that the evidence adduced by respondents more
than satisfies the legal and jurisprudential requirements of
irreparable injury. It behooves this court to appreciate the
unique character of the collaterals that stand to be affected
should the Writ of Preliminary Injunction be dissolved as PNB
would have it. The direct and inevitable result would be the
stoppage of the operations of respondents' radio stations,
consequently, losing its listenership, and tarnishing the image
that it has built over time. It does not stretch one's
imagination to see that the cost of a destroyed image is
significantly the loss of its good name and reputation. As aptly
appreciated by the appellate court, the value of a radio
station's image and reputation are not quantifiable in terms of
monetary value.
22. OVERSEAS WORKER WELFARE ADMINISTRATION
VS CHAVEZ (status quo def)
More significantly, a preliminary injunction is merely a
provisional remedy, an adjunct to the main case subject to the
latter's outcome, the sole objective of which is to preserve the
status quo until the trial court hears fully the merits of the
case. 47 The status quo should be that existing at the time of
the filing of the case. 48 The status quo usually preserved by
a preliminary injunction is the last actual, peaceable and
uncontested status which preceded the actual controversy.
The status quo ante litem is, ineluctably, the state of affairs
which is existing at the time of the filing of the case.
Indubitably, the trial court must not make use of its injunctive
power to alter such status. 50
We hold that the RTC, in granting the assailed writ of
preliminary injunction, committed grave abuse of discretion
amounting to lack of jurisdiction.
In the case at bar, the RTC did not maintain the status quo
when it issued the writ of preliminary injunction. Rather, it
effectively restored the situation prior to the status quo, in
effect, disposing the issue of the main case without trial on

the merits. What was preserved by the RTC was the state of
affairs before the issuance of Resolution No. 001, which
approved the structure of the OWWA, and the subsequent
administrative orders pursuant to its passing. The RTC forgot
that what is imperative in preliminary injunction cases is that
the writ can not be effectuated to establish new relations
between the parties.
23. DUNGOG VS CA (status quo def)
ID.; PROVISIONAL REMEDIES; PRELIMINARY INJUNCTION;
DEFINED; PURPOSE THEREOF TO PRESERVE THE STATUS QUO
OF THE MATTER SUBJECT OF THE ACTION; CONSTRUED.
Preliminary injunction is an order granted at any stage of an
action, prior to the judgment or final order, requiring a party,
court, agency or person to perform or to refrain from
performing a particular act or acts. A preliminary injunction,
as the term itself suggests, is merely temporary, subject to
the final disposition of the principal action. Its purpose is to
preserve the statusquo of the matter subject of the action to
protect the rights of the plaintiff during the pendency of the
suit. Otherwise, if no preliminary injunction is issued, the
defendant may, before final judgment, do the act which the
plaintiff is seeking the court to restrain. This will make
ineffectual the final judgment that the court may afterwards
render in granting relief to the plaintiff. The issuance of a writ
of preliminary injunction rests entirely within the discretion of
the court and is generally not interfered with except in cases
of manifest abuse. The assessment and evaluation of
evidence in the issuance of the writ of preliminary injunction
involve findings of facts ordinarily left to the trial court for its
conclusive determination.
Against whom is injunction issued:
24. EXECUTIVE SECRETARY VS CA
The possibility that the officers and employees of the
recruitment agencies, which are members of the respondent,
and their relatives who are employed in the government
agencies charged in the enforcement of the law, would be
indicted for illegal recruitment and, if convicted sentenced to
life imprisonment for large scale illegal recruitment, absent
proof of irreparable injury, is not sufficient on which to base
the issuance of a writ of preliminary injunction to suspend the
enforcement of the penal provisions of Rep. Act No. 8042 and
avert any indictments under the law. 48 The normal course of
criminal prosecutions cannot be blocked on the basis of
allegations which amount to speculations about the future. 49
25. MABAYO FARM VS CA
1.REMEDIAL LAW; PROVISIONAL REMEDIES; PRELIMINARY
INJUNCTION; CANNOT BIND A PERSON WHO IS NOT A PARTY IN
THE MAIN SUIT; CASE AT BAR. A preliminary injunction is an
order granted at any stage of an action prior to final
judgment, requiring a person to refrain from a particular act.
As an ancillary or preventive remedy, a writ of preliminary
injunction may therefore be resorted to by a party to protect
or preserve his rights and for no other purpose during the
pendency of the principal action. Its object is to preserve the
status quo until the merits of the case can be heard. It is not a
cause of action in itself but merely a provisional remedy, an
adjunct to a main suit. Thus, a person who is not a party in the
main suit, like private respondent in the instant case, cannot
be bound by an ancillary writ, such as the writ of preliminary
injunction issued against the defendants in Civil Case No.
6695. He cannot be affected by any proceeding to which he is
a stranger.
2.ID.; ACTIONS; INTERVENTION; NOT COMPULSORY.
Intervention in an action is neither compulsory nor mandatory
but only optional and permissive.
3.ID.; ID.; ID.; REQUISITES. [T]o warrant intervention, two
requisites must concur: (a) the movant has a legal interest in
the matter in litigation, and (b) intervention must not unduly
delay or prejudice the adjudication of the rights of the parties
nor should the claim of the intervenor be capable of being

properly decided in a separate proceeding. The interest, which


entitles a person to intervene in a suit, must involve the
matter in litigation and of such direct and immediate
character that the intervenor will either gain or lose by the
direct legal operation and effect of the judgment. AaHcIT
26. SENATE
BLUE
RIBBON
COMMITTEE
VS
MAJADUCON
Finally, he cites the case of Bengzon v. Senate Blue Ribbon
Committee, 9 and argues that preliminary injunction may
issue in cases pending before administrative bodies such as
the Ombudsman or the Office of the Prosecutor as long as the
right to self-incrimination guaranteed by the Bill of Rights is in
danger. Furthermore, an information against him has been
filed with the Sandiganbayan.
When the Senate Blue Ribbon Committee served subpoena on
respondent Flaviano to appear and testify before it in
connection with its investigation of the alleged misuse and
mismanagement of the AFP-RSBS funds, it did so pursuant to
its authority to conduct inquiries in aid of legislation.
27. SOUTHERN CROSS CEMENT V
CEMENT MANUFACTURERS
Propriety of the Temporary Restraining Order

PHILIPPINE

Before the merits of the Petition, a brief comment on Southern


Cross's application for provisional relief. It sought to enjoin the
DTI Secretary from enforcing the definitive safeguard measure
he imposed in his 25 June 2003 Decision. The Court did not
grant the provisional relief for it would be tantamount to
enjoining the collection of taxes, a peremptory judicial act
which is traditionally frowned upon, 49 unless there is a clear
statutory basis for it. 50 In that regard, Section 218 of the Tax
Reform Act of 1997 prohibits any court from granting an
injunction to restrain the collection of any national internal
revenue tax, fee or charge imposed by the internal revenue
code. 51 A similar philosophy is expressed by Section 29 of
the SMA, which states that the filing of a petition for review
before the CTA does not stop, suspend, or otherwise toll the
imposition or collection of the appropriate tariff duties or the
adoption of other appropriate safeguard measures. 52 This
evinces a clear legislative intent that the imposition of
safeguard measures, despite the availability of judicial review,
should not be enjoined notwithstanding any timely appeal of
the imposition. cdasia
28. DELTA VENTURES VS COTABATO
JURISDICTION; COURTS HAVE NO JURISDICTION TO ACT ON
LABOR CASES OR VARIOUS INCIDENTS ARISING THEREFROM,
INCLUDING THE EXECUTION OF DECISIONS, AWARDS OR
ORDERS; CASE AT BAR. Ostensibly the complaint before the
trial court was for the recovery of possession and injunction,
but in essence it was an action challenging the legality or
propriety of the levy vis-a-vis the alias writ of execution,
including the acts performed by the Labor Arbiter and the
Deputy Sheriff implementing the writ. The complaint was in
effect a motion to quash the writ of execution of a decision
rendered on a case properly within the jurisdiction of the
Labor Arbiter, to wit: Illegal Dismissal and Unfair Labor
Practice. Considering the factual setting, it is then logical to
conclude that the subject matter of the third party claim is but
an incident of the labor case, a matter beyond the jurisdiction
of regional trial courts. Precedent abound confirming the rule
that said courts have no jurisdiction to act on labor cases or
various incidents arising therefrom, including the execution of
decisions, awards or orders. Jurisdiction to try and adjudicate
such cases pertains exclusively to the proper labor official
concerned under the Department of Labor and Employment.
To hold otherwise is to sanction split jurisdiction which is
obnoxious to the orderly administration of justice.
29. BSP
MONETARY
VALENZUELA

BOARD

VS

ANTONIO-

The writs of preliminary injunction issued by the trial court


hinder the MB from fulfilling its function under the law. The
actions of the MB under Secs. 29 and 30 of RA 7653 "may not
be restrained or set aside by the court except on petition for
certiorari on the ground that the action taken was in excess of
jurisdiction or with such grave abuse of discretion as to
amount to lack or excess of jurisdiction". The writs of
preliminary injunction order are precisely what cannot be
done under the law by preventing the MB from taking action
under either Sec. 29 or Sec. 30 of RA 7653.
30. TRADERS ROYAL BANK VS IAC
REMEDIAL LAW; PROVISIONAL REMEDIES; ATTACHMENT;
INDEPENDENT VINDICATORY ACTION MAY BE FILED BY THIRD
PARTY WHOSE PROPERTY HAS BEEN WRONGFULLY LEVIED
UPON BY ATTACHMENT. Section 14, Rule 57 of the Rules of
Court explicitly sets forth the remedy that may be availed of
by a person who claims to be the owner of property levied
upon by attachment, viz: to lodge a third-party claim with the
sheriff and if the attaching creditor posts an indemnity bond in
favor of the sheriff, to file a separate and independent action
to vindicate his claim (Abiera vs. Court of Appeals, 45 SCRA
314).
2.ID.; ID.; INJUNCTION; COURTS MAY NOT INTERFERE WITH
JUDGMENT OF ANOTHER COURT OF COORDINATE AND
CONCURRENT JURISDICTION BY INJUNCTION; RULE IS
APPLICABLE ONLY WHERE NO THIRD-PARTY CLAIMANT IS
INVOLVED; PURPOSE OF THAT RULE. Generally, the rule
that no court has the power to interfere by injunction with the
judgments or decrees of a concurrent or coordinate
jurisdiction having equal power to grant the injunctive relief
sought by injunction, is applied in cases where no third-party
claimant is involved, in order to prevent one court from
nullifying the judgment or process of another court of the
same rank or category, a power which devolves upon the
proper appellate court. The purpose of the rule is to avoid
conflict of power between different courts of coordinate
jurisdiction and to bring about a harmonious and smooth
functioning of their proceedings.

RECEIVERSHIP
1.

Definition (Section 1)
a. Compania General de Tabacos Vs Gauzon
RECEIVERS;
POWERS,
DUTIES,
AND
RESPONSIBILITIES. A 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 hold
possession and control of the property
which is the subject-matter of the litigation
and to dispose of it in such manner as
may be directed by the court. He is the arm
and hand of the court, a part of the
machinery of the court, by which the rights
of the parties are protected. He is required
not only to preserve the property, but to
protect the rights of all the parties
interested.
ID.; LIMITED AUTHORITY TO INCUR EXPENSE
WITHOUT EXPRESS PERMISSION OF THE
COURT. Generally a receiver has no
authority to incur any expense in the
administration of his receivership, without
express permission of the court, except it

be absolutely necessary to preserve the


property, and then only when, under special
circumstances, he can not secure such
authority from the court. He should
administer the estate as economically as
possible, to the end that the interests of all
the parties shall be conserved.
ID.; COMPENSATION. The amount of
compensation of a receiver is fixed by the
sound discretion of the court. The court,
in fixing the compensation of the receiver,
should take into consideration the general
efficiency
of
the
receiver
in
his
administration of the receiver in his
administration of the property under his
control.
2. Distinguished from Replevin
a. Belgian Catholic Missionaries Vs Magallanes Press
Contrary to the contention of the appellant,
this case is not one of replevin but simply
a proceeding instituted by the plaintiff
for the deposit of the property in
litigation, upon the filing of a bond, said
plaintiff acting as a receiver by authority of
the court, being the person most interested
in the conservation and care of the same
(sec. 174, Act No. 190; 11 C. J., 726).
The lower court, therefore, did not err in
authorizing the plaintiff company to take
possession of the personal property in
litigation upon the filing of a bond sufficient
to secure the conservation or value thereof.
3. Distinguished from a Sheriff
a. Po Pauco Vs. Siguenz [G.R. No. 29295. October 22,
1928]
"SHERIFF;" RECEIVER. A sheriff, in a
sense, is a judicial officer of a general
character, who is not appointed in any
particular judicial case; the sheriff is an
officer who exercises or may exercise his
functions within the limits of his
jurisdiction. A receiver, on the other
hand, is a special officer appointed in
connection with and in a particular case or
action, and whose duties are limited to his
sphere of action and do not extend further
than the case in which he is appointed.
ID.; ID. While the funds in the hands of
a sheriff may be within the reach of
processes coming from other judicial
proceedings, such is not the case with
respect to those under the custody of a
receiver. Those who have any claim to
property or sums in the possession of a
receiver, must appear in the same
proceeding
in
which
said
receiver
discharges his duties, and there, by motion
or petition, allege and prove their claims.
4. Purpose
- preservation of the property and protection of the
rights of the parties
5. Effect of Dismissal of Case
a. Berg Vs Teus [G.R. No. L-2987. February 20, 1951.]
MORATORIUM; APPOINTMENT OF RECEIVE
DOES NOT FALL UNDER THE MORATORIUM
LAW. Where the complaint for the
foreclosure of real and chattel mortgages

also prays for the appointment of a receiver,


a motion to dismiss on the ground of the
Moratorium Law should not be sustained.
The alleged violations of the conditions of
the mortgage contract, if true, make it
necessary, if not imperative, for the
protection of the interest of the plaintiff,
that the mortgaged properties be placed in
the custody of the court. The fact that the
appointment of a receiver, as the defendant
emphasizes, is an ancillary remedy
precisely one powerful reason why the
case
should
not
be
dismissed;
dismissal of the main action would
eliminate the only basis for the
appointment of a receiver and thus
completely bar the door to any relief
from mischiefs.
6. Granted only in extreme situations
b. Vivares Vs Reyes [G.R. No. 155408. February 13,
2008.]
Indeed, receivership is a harsh remedy to be
granted only in extreme situations. As early
as 1914, the Court already enunciated the
doctrinal pronouncement in Velasco & Co. v.
Gochuico & Co. that courts must use utmost
circumspection in allowing receivership,
thus:
The power to appoint a receiver is a delicate
one and should be exercised with extreme
caution and only under circumstances
requiring summary relief or where the court
is satisfied that there is imminent danger
of loss, lest the injury thereby caused be
far greater than the injury sought to be
averted. The court should consider the
consequences to all of the parties and the
power should not be exercised when it is
likely to produce irreparable injustice or
injury to private rights or the facts
demonstrate that the appointment will
injure the interests of others whose
rights are entitled to as much consideration
from the court as those of the complainant.
7. Where Rights of the Parties are still to be
determined
c. Descallar Vs CA
REMEDIAL LAW; SPECIAL CIVIL ACTION;
CERTIORARI; GRAVE ABUSE OF DISCRETION;
MANIFEST IN ORDER OF RECEIVERSHIP
WHERE RIGHTS OF THE PARTIES ARE STILL
TO BE DETERMINED. The holding of the
trial court and the Court of Appeals that
Jambrich,
notwithstanding
his
legal
incapacity to acquire real property in the
Philippines, is the owner of the house and
lot which is erstwhile mistress, Antonietta,
purchased with money she obtained from
him, is a legal heresy. In view of the
above circumstances, we find the order
of receivership tainted with grave
abuse of discretion. The appointment of a
receiver is not proper where the rights of
the parties (one of whom is in possession of
the property), are still to be determined by
the trial court. Finding grave abuse of
discretion in the order of receivership which
the respondent Court of Appeals affirmed in
its decision of July 29, 1992 in CA-G.R. SP
No. 27977, The petition for certiorari is
hereby granted and the decision of the
appellant court, as well as the order dated

March 17, 1992 of the Regional Trial Court of


Mandaue City, Branch 28, in Civil Case No.
MAN-1148, are hereby ANNULLED and SET
ASIDE.
ID.; PROVISIONAL REMEDIES; RECEIVERSHIP;
DANGER
TO
PROPERTY
OF
BEING
MATERIALLY
INJURED
OR
LOST,
INDISPENSABLE
IN
APPOINTMENT
OF
RECEIVER. Only when the property is in
danger of being materially injured or lost, as
by the prospective foreclosure of a
mortgage thereon for non-payment of the
mortgage loans despite the considerable
income derived from the property, or if
portions thereof are being occupied by third
persons claiming adverse title thereto, may
the appointment of a receiver be
justified (Motoomul vs. Arrieta, 8 SCRA
172).
ID.; ID.; ID.; ID.; CASE AT BAR. In this
case, there is no showing that grave or
irremediable damage may result to
respondent Borromeo unless a receiver is
appointed. The property in question is
real property, hence, it is neither
perishable or consummable.
Even
though it is mortgaged to a third
person, there is no evidence that payment
of the mortgage obligation is being
neglected. In any event, the private
respondent's rights and interest, may be
adequately protected during the pendency
of the case by causing his adverse claim to
be annotated on the petitioner's certificates
of title.
ID.;
ID.;
ID.;
FILING
OF
BOND,
INDISPENSABLE;
DISPENSED
WITH
BY
APPOINTMENT OF CLERK OF COURT AS
RECEIVER. Another flaw in the order of
receivership is that the person whom the
trial judge appointed as receiver is her own
clerk of court who did not file any bond to
guarantee the faithful discharge of his
duties as depository. This practice has
been frowned upon by this Court. (Off.
Gaz., [No. 12], 4884, 78 Phil. 743; (De la
Cruz vs. Guinto, 45 Off. Gaz. pp. 1309,
1311; 79 Phil. 304, Abrigo vs. Kayanan, 121
SCRA 20, and other cases cited.)
ID.; ID.; ID.; IRREGULAR APPOINTMENT OF
RECEIVER NOT SUBJECT TO RETROACTIVE
VALIDATION. During the pendency of this
appeal, Judge Dadole rendered a decision in
Civil
Case
No.
MAN-1148
upholding
Borromeo's claim to Descallar's property
annulling the latter's TCTs Nos. 24790,
24791 and 24792 and ordering the Register
of Deeds of Mandaue City to issue new ones
in
the
name
of
Borromeo.
This
circumstance does not retroactively
validate the receivership until the
decision (presumably now pending
appeal) shall have attained finality.
8. Exhaustion of local remedies
d. Bonaplata Vs Amber [G.R. No. 1278. August 1,
1903.]

ID.; EXTRAORDINARY REMEDIES. Courts


of equity do not regard with favor the
appointment of receivers, except in
certain prescribed cases, until the usual
legal remedies have been exhausted.

As a general rule the appointment of a


receiver is an equitable remedy, and
before such remedy is resorted to,
except in certain prescribed cases
hereinafter mentioned, the legal remedy
must be exhausted. Courts of equity do
not encourage proceedings or actions
which are not in conformity with the usual
practice, which are unnecessary, and at
the same time are calculated to such
costs and expenses.

It
may
be
that
very
special
circumstances may exist, in a given case,
involving great danger of loss, such as may
be caused by a debtor's nonresidence,
which will justify the appointment of a
receiver, but the case at bar is not one of
that character.
9. Appointment
e. Commodities Storage and Ice Plant Vs CA [G.R. No.
125008. June 19, 1997.]
Moreover, the receiver appointed by the
court appears to be a representative of
petitioners. Respondent bank alleges that
it was not aware that petitioners nominated
one Mr. Pesquera as receiver. The general
rule is that neither party to a litigation
should be appointed as receiver without
the consent of the other because a
receiver should be a person indifferent to
the parties and should be impartial and
disinterested. The receiver is not the
representative of any of the parties but of all
of them to the end that their interests may
be equally protected with the least possible
inconvenience and expense.
The power to appoint a receiver must be
exercised with extreme caution. There
must be a clear showing of necessity
therefor in order to save the plaintiff from
grave and irremediable loss or damage. It is
only when the circumstances so demand,
either because there is imminent danger
that the property sought to be placed in the
hands of a receiver be lost or because they
run the risk of being impaired, endeavouring
to avoid that the injury thereby caused be
greater than the one sought to be avoided.
10. Jurisdiction
f. Harden Vs Director of Prisons [G.R. No. L-2349.
October 22, 1948.]
The fact that the property is in a foreign
country is said to deprive the court of
jurisdiction, the remedy in such case
being,
it
is
contended,
ancillary
receivership. We can not agree with
this view.

While a court can not give its receiver


authority to act in another state without
the assistance of the courts thereof (53 C.
J., 390-391), yet it may act directly
upon the parties before it with respect
to property beyond the territorial limits of
its jurisdiction, and hold them in contempt
if they resist the court's orders with
reference to its custody or disposition (Id.
118).

convenient and feasible means of


preserving, administering and disposing
of the properties in litigation; and
according
to
plaintiffs'
theory
or
allegations in their complaint, neither
the lands nor the palay harvested
therein, are in litigation. The litigation
or issue raised by plaintiffs in their
complaint is not the ownership or
possession of the lands and their fruits. It
is whether or not defendants intend or
were intending to enter or work or harvest
whatever existing fruits could then be
found in the lands described in the
complaint, alleged to be the exclusive
property and in the actual possession of
the plaintiffs. It is a matter not only of
law but of plain common sense that a
plaintiff will not and legally can not
ask for the appointment of a receiver
of a property which he alleges to
belong to him and to be actually in
his possession. For the owner and
possessor of a property is more
interested than other persons in
preserving and administering it.

Whether the property was removed


before or after the appointment of the
receiver is likewise immaterial.

11. Grounds for Appointment of Receiver


g. Calo Vs Roldan [G.R. No. L-252. March 30, 1946.]
A receiver may be appointed to take
charge of personal or real property which
is the subject of an ordinary civil action,
1.

2.

when it appears that the party


applying for the appointment of a
receiver has an interest in the
property or fund which is the subject
of the action or litigation, and that
such property or fund is in danger of
being lost, removed or materially
injured
unless
a
receiver
is
appointed to guard or preserve it
(section 1[b], Rule 61); or
when it appears that the appointment
of a receiver is the most convenient
and feasible means of preserving,
administering or disposing of the
property in litigation (section 1[e] of
said Rule).

The property or fund must, therefore, be


in litigation according to the allegations of
the complaint, and the object of
appointing a receiver is to secure and
preserve the property or thing in
controversy pending the litigation. Of
course, if it is not in litigation and is
in the actual possession of the
plaintiff, the latter can not apply for
and obtain the appointment of a
receiver thereof, for there would be
no reason for such appointment.

From the foregoing it appears evident that


the respondent judge acted in excess of
his jurisdiction in appointing a receiver in
case No. 7951 of the Court of First
Instance of Laguna. Appointment of a
receiver is not proper or does not lie in an
action of injunction such as the one filed
by the plaintiff. The petition for
appointment of a receiver filed by the
plaintiffs (Exhibit I of the petition) is based
on the ground that it is the most

h. Ylarde Vs Enriquez [G.R. No. L-1401. June 25,


1947.]
RECEIVERS; APPOINTMENT; HOW AND
WHEN MADE. "The appointment of a
receiver, because of its drastic nature and
of its character as a special remedy under
our Code of Civil Procedure, is a power
which should be exercised with great
caution." (Philippine Motor Alcohol Corp.
and Palanca vs. Mapa, 64 Phil., 714.)
"Where the effect of the appointment of a
receiver is to take real estate out of the
possession of the defendant before the
final adjudication of the rights of the
parties, the appointment should be made
only in extreme cases and on a clear
showing of necessity therefor in order to
save the plaintiff from grave and
irremediable loss or damage." (Mendoza
vs. Arellano and B. de Arellano, 36 Phil.,
59. )

ID.; ID.; ID. It is necessary in granting


the relief of receivership that the
"property or fund (be) in danger of being
lost, removed or materially injured."

The land which is the subject matter of


the suit here is not in any danger of
disappearing or being wasted. There is no
pretense that it has any permanent
improvements or fixtures which produce
income, rents or profits to be collected or
preserved. At the most a bond with
sufficient sureties would be adequate to
protect the plaintiffs from any possible
injury consequent upon being deprived of
the possession of the property.

j.
ID.; ID.; ID.; INTEREST OF APPLICANT.
Section of Rule 61 requires that the party
applying for the appointment of receiver
should have "an interest in the
property which is the subject of the
action." This rule envisions actual,
existing interest.

A trial court issuing an order requiring the


party in possession of the property whose
ownership is in litigation, to make an
accounting and to deposit the proceeds of
the sale of the harvest with the Clerk of
Court acted in excess of its jurisdiction.
That order, in effect, made the Clerk of
Court a sort of a receiver charged with the
duty of receiving the proceeds of sale and
the harvest of every year during the
pendency
of
the
case
with
the
disadvantage that the Clerk of Court has
not filed any bond to vantage that the
Clerk of Court has not filed any bond to
guarantee the faithful discharge of is
duties as depository; and considering that
in actions involving title to real property,
the appointment of a receiver cannot be
entertained because its effect would be to
take the property out of the possession of
the defendant of its necessity to save the
plaintiff from grave and irremediable loss
or damage, it is evident that the action of
the respondent judge is unwarranted and
unfair to the defendants.

ID.; ID.; ID. A receiver, it has been


repeatedly held, should not be granted
where the injury resulting therefrom
would probably be greater than the injury
ensuing from leaving the possession of
the property undisturbed. (53 C. J., 37.)

The court would place in the hands of a


receiver to administer, crops to plant and
raise which, as we have seen, the
defendants have spent considerable
money and attention with the plaintiffs
contributing
nothing
beyond
their
allegation that they own the ground.

i.

If the party in possession of the land in


litigation in the exercise of his rights as
owner made improvements thereon at his
own expense to order him to render an
accounting of the harvest and to deposit
the proceeds in case of sale thereof
during the pendency of the case would be
to deprive him of his means of livelihood
before the case is decided on the merits.

Rocha and Co Vs Crossfield [G.R. No. 3430.


August 7, 1906.]
An order appointing a receiver of the
property of a defendant is beyond the
jurisdiction of the court and void when
the complaint contains no allegation that
the plaintiff is the owner of the property
for which a receiver is appointed, or that
he has any interest therein or lien thereon
and when the only prayer of the
complaint is for a money judgment
against the defendant.

Paranete Vs Tan [G.R. No. L-3791. November


29, 1950.]

12. Oath, bond (Sections 2, 4, 5)


k. Citibank NA Vs CA [G.R. No. 61508. March 17,

The case at bar does not fall within any of


the provisions of this section. There is no
allegation in the complaint, as has been
before stated, that the plaintiff is the
owner of any of the property of Rocha &
Co., nor is there any allegation that he
has any lien thereon, nor are there any
facts alleged in the complaint from which
it could be inferred that he was owner of
such property or had any lien thereon. On
the contrary, from the facts that are
alleged in the complaint it would seem
that his separation from the partnership
of Carman & Co., left that partnership as a
going concern and did not dissolve it. The
effect of the provisions of the articles of
partnership which are referred to in the
complaint is that after the withdrawal of
any partner the remaining partners
became the owners of all the assets of the
partnership and he became a general
creditor of the partnership.

1999.]
The Court of Appeals found that the
requirements of Section 5, Rule 59 on
receivership were not complied with by
the petitioner, particularly the filing or
posting of a bond and the taking of an
oath. It should be noted that under the
old Rules of Court which was in effect at
the time this case was still at trial stage, a
bond for the appointment of a receiver
was not generally required of the
applicant, except when the application
was made ex parte. Therefore, petitioner
was not absolutely required to file a bond.
Besides, as stipulated in the chattel
mortgage contract between the parties,
petitioner, as the mortgagee, is entitled to
the appointment of a receiver without a
bond. However, the Court of Appeals was
right in finding a defect in such
assumption of receivership in that the
requirement of taking an oath has not
been complied with. Consequently, the
trial court erred in allowing the petitioner
to assume receivership over the machine

shop of private respondent without


requiring the appointed receiver to take
an oath.

ID.; ID.; DUTY OF RECEIVER TO PRESENT


VOUCHERS FOR DISBURSEMENT AND
EXPENSES. It is a dereliction of duty
on the part of a receiver to fail to submit
vouchers, when practicable, showing
disbursements and expenses on account
of the trust property. A failure to produce
such vouchers gives rise to unfavorable
inferences against the receiver.

13. Discharge (Section 3)


l. Vivares, Supra

ID.; ADMINISTRATION OF RECEIVERSHIP


PROPERTY. In the administration of
receivership property the receiver is
accountable for the income that should be
received in the exercise of reasonable
diligence.

Anchored on this rule, the trial court


should have dispensed with the services
of the receiver, more so considering that
the alleged fraud put forward to justify the
receivership was not at all established.
Petitioners advance the issue that the
receivership should not be recalled simply
because the adverse party offers to post a
counterbond. At the outset, we find that
this issue was not raised before the CA
and therefore proscribed by the doctrine
that an issue raised for the first time on
appeal and not timely raised in the
proceedings in the lower court is barred
by estoppel. Even if we entertain the
issue, the contention is nevertheless
devoid of merit. The assailed CA
decision supported the discharge of
the receiver with several reasons
including
the
posting
of
the
counterbond. While the CA made a
statement that the trial court should have
discharged the appointed receiver on the
basis of the proposed counterbond, such
opinion does not jibe with the import of
Sec. 3, Rule 59. The rule states that the
"application may be
denied
or
the
receiver
discharged."
In
statutory
construction, the word "may" has always
been construed as permissive. If the
intent is to make it mandatory or
ministerial for the trial court to order the
recall of the receiver upon the offer to
post a counterbond, then the court should
have used the word "shall." Thus, the trial
court has to consider the posting of the
counterbond in addition to other reasons
presented by the offeror why the
receivership has to be set aside.

m. Martinez Vs Grano [G.R. No. 27685. December


24, 1927.]
RECEIVERS; ACCOUNTS OF RECEIVER;
SATISFACTION OF CREDIT. A receiver
who has a credit against receivership
property for money expended for the
protection of the property cannot be
permitted to charge it in his accounts
against the property after he has used it
to pay the price of land purchased by him
as judgment creditor at a sheriff's sale in
an action prosecuted for his personal
benefit. The application of such credit to
the end stated operates as satisfaction
thereof.

1944.]

n. Platon Vs Sandoval [G.R. No. 49031. August 28,

CERTIORARI AND MANDAMUS; RECEIVERS,


DISCHARGE OF. The property in
litigation and under receivership belongs
to the intestate estate of the deceased
S.M., deceased wife of the petitioner R.C.
The defendant A.C., who is not an heir of
said deceased, does not claim ownership
of said property and has signed his
conformity to the discharge of the
receiver. And the heirs of said deceased
have agreed upon the partition of said
property with the approval of the probate
court. It seems clear, therefore, that the
declaration of the respondent judge
that there was no longer any
necessity for the continuation of the
receivership was well founded. In any
event, it cannot be said that the
respondent
judge
exceeded
his
jurisdiction or abused his discretion in
making such a finding.
ID.; RECEIVERS AS OFFICERS OF THE
COURT. Furthermore, the receiver,
being an officer of the court and not the
agent or representative of either party,
has no legal interest or standing to
question the court's determination
that the necessity for the continuation
of the receivership has ceased to exist.
ID.; ID.; JUDGMENTS. An order
discharging a receiver and terminating
the receivership is interlocutory and
not appealable.

14. Power of Receivers (Section 6)

15. Actions against receivers; Leave of court (Section


6)
o. Orendain Vs BF Homes [G.R. No. 146313.
October 31, 2006.]

Furthermore, petitioner argues that the Committee


of Receivers should have sought prior clearance
from the SEC before instituting the action for
reconveyance before the RTC, because it does not
have the legal capacity to sue. This is incorrect.
One of the general powers of a receiver under Rule
59, Section 6 of the Rules of Court is the power to
bring and defend suits in such capacity.
Petitioner also contends that an action filed by a
successor-receiver against him as predecessorreceiver is not allowed under Rule 59, Section 6
without leave of court which appointed him; as
Section 6 provides that "no action may be filed by or
against a receiver without leave of the court which
appointed him." This is bereft of merit.
The rule talks of the current receiver of the
company and not the previous receiver like petitioner
Orendain. The reason behind Rule 59, Section 6,
which requires leave of court for all suits by or
against the present receiver, is to forestall any
undue
interference
with
the
receiver's
performance of duties through improvident
suits. Apparently, such situation cannot apply to
Orendain who is no longer BF Homes' receiver.
16. Liability for refusal or neglect to deliver property
to receiver (Section 7)
17. Termination and Compensation of Receiver (Section
8)
p. Traders Royal Bank Vs IAC [G.R. No. 111357. June
17, 1997.]
Section 8, Rule 59 of the Rules of Court,
however, explicitly provides for the manner
in which it shall be paid for its services, to
wit: "SEC. 8. Termination of receivership;
compensation of receiver. Whenever the
court, of its own motion or on that of
either party, shall determine that the
necessity for a receiver no longer
exists, it shall, after due notice to all
interested parties and hearing, settle the
accounts of the receiver, direct the
delivery of the funds and other property in
his hands to the persons adjudged entitled
to receive them, and order the discharge
of the receiver from further duty as
such. The court shall allow the receiver such
reasonable
compensation
as
the
circumstances of the case warrant, to be
taxed as costs against the defeated party,
or apportioned, as justice requires." It is,
therefore, clear that when the services of a
receiver who has been properly appointed
terminates, his compensation is to be
charged against the defeated party, or the
prevailing litigant may be made to share the
expense, as justice requires.
18. Judgment against sureties (Section 9)
19. New Central Bank Act, Section 30, RA 7653
SECTION 30.Proceedings in Receivership and
Liquidation. Whenever, upon report of the head of
the supervising or examining department, the
Monetary Board finds that a bank or quasi-bank:

(a)is unable to pay its liabilities


as they become due to
the ordinary course of
business: Provided, That
this shall not include
inability to pay caused
by
extraordinary
demands induced by
financial panic in the
banking community;
(b)has

insufficient
realizable
assets, as determined
by the Bangko Sentral,
to meet its liabilities; or

(c)cannot continue in business


without
involving
probable losses to its
depositors or creditors;
or
(d)has willfully violated a cease
and desist order under
Section 37 that has
become final, involving
acts
or
transactions
which amount to fraud
or a dissipation of the
assets of the institution;
in which cases, the
Monetary Board may
summarily and without
need for prior hearing
forbid the institution
from doing business in
the
Philippines
and
designate the Philippine
Deposit
Insurance
Corporation as receiver
of
the
banking
institution.
For a quasi-bank, any person of recognized
competence in banking or finance may be designed
as receiver.
The receiver shall immediately gather and take
charge of all the assets and liabilities of the
institution, administer the same for the benefit of its
creditors, and exercise the general powers of a
receiver under the Revised Rules of Court but shall
not,
with
the
exception
of
administrative
expenditures, pay or commit any act that will involve
the transfer or disposition of any asset of the
institution: Provided, That the receiver may deposit
or place the funds of the institution in nonspeculative
investments.
The
receiver
shall
determine as soon as possible, but not later than
ninety (90) days from take-over, whether the
institution may be rehabilitated or otherwise placed
in such a condition so that it may be permitted to
resume business with safety to its depositors and
creditors and the general public: Provided, That any
determination for the resumption of business of the
institution shall be subject to prior approval of the
Monetary Board.
If the receiver determines that the institution cannot
be rehabilitated or permitted to resume business in
accordance with the next preceding paragraph, the
Monetary Board shall notify in writing the board of

directors of its findings and direct the receiver to


proceed with the liquidation of the institution. The
receiver shall:
(1)file ex parte with the proper
regional trial court, and
without requirement of
prior notice or any other
action, a petition for
assistance
in
the
liquidation
of
the
institution pursuant to a
liquidation plan adopted
by
the
Philippine
Deposit
Insurance
Corporation for general
application to all closed
banks. In case of quasibanks, the liquidation
plan shall be adopted by
the Monetary Board.
Upon
acquiring
jurisdiction, the court
shall, upon motion by
the receiver after due
notice,
adjudicate
disputed claims against
the institution, assist
the
enforcement
of
individual liabilities of
the
stockholders,
directors and officers,
and decide on other
issues
as
may
be
material to implement
the
liquidation
plan
adopted. The receiver
shall pay the cost of the
proceedings from the
assets of the institution.
(2)convert the assets of the
institution to money,
dispose of the same to
creditors
and
other
parties, for the purpose
of paying the debts of
such
institution
in
accordance with the
rules on concurrence
and preference of credit
under the Civil Code of
the Philippines and he
may, in the name of the
institution, and with the
assistance of counsel as
he may retain, institute
such actions as may be
necessary to collect and
recover accounts and
assets of, or defend any
action
against,
the
institution. The assets of
an
institution
under
receivership
or
liquidation
shall
be
deemed
in custodia
legis in the hands of the
receiver and shall, from
the
moment
the
institution was placed
under such receivership
or
liquidation,
be
exempt from any order

of garnishment,
attachment,
execution.

levy,
or

The actions of the Monetary Board taken under this


section or under Section 29 of this Act shall be final
and executory, and may not be restrained or set
aside by the court except on petition for certiorari on
the ground that the action taken was in excess of
jurisdiction or with such grave abuse of discretion as
to amount to lack or excess of jurisdiction. The
petition for certiorari may only be filed by the
stockholders of record representing the majority of
the capital stock within ten (10) days from receipt by
the board of directors of the institution of the order
directing
receivership,
liquidation
or
conservatorship. cd i
The designation of a conservator under Section 29 of
this Act or the appointment of a receiver under this
section shall be vested exclusively with the Monetary
Board. Furthermore, the designation of a conservator
is not a precondition to the designation of a receiver.
20. Interim Rules of Procedure for Intra-Corporate
Controversies, Rule 9 (A.M. NO. 01-2-04-SC)
Management Committee
SECTION 1. Creation of a Management Committee.
As an incident to any of the cases filed under these
Rules
or
the
Interim
Rules
on
Corporate
Rehabilitation, a party may apply for the
appointment of a management committee for the
corporation, partnership or association, when there
is imminent danger of:
(1) Dissipation, loss, wastage or
destruction of assets or
other properties; and
(2) Paralyzation of its business
operations which may
be prejudicial to the
interest of the minority
stockholders,
partieslitigants or the general
public.
SECTION 2. Receiver. In the event the court finds
the application to be sufficient in form and
substance, the court shall issue an order: (a)
appointing a receiver of known probity,
integrity and competence and without any
conflict of interest as hereunder defined to
immediately take over the corporation, partnership
or association, specifying such powers as it may
deem appropriate under the circumstances, including
any of the powers specified in section 5 of this Rule;
(b) fixing the bond of the receiver, (c) directing
the receiver to make a report as to the affairs of
the entity under receivership and on other relevant
matters within sixty (60) days from the time he
assumes office; (d) prohibiting the incumbent
management of the company, partnership or
association
from
selling,
encumbering,
transferring or disposing in any manner any of its
properties except in the ordinary course of
business; and (e) directing the payment in full

of all administrative expenses incurred after the


issuance of the order.
SECTION 3. Receiver and Management Committee
as Officers of the Court. The receiver and the
members of the management committee in the
exercise of their powers and performance of their
duties are considered officers of the court and shall
be under its control and supervision.
SECTION 4. Composition of the Management
Committee. After due notice and hearing, the
court may appoint a management committee
composed of three (3) members chosen by the court.
In the appointment of the members of the
management committee, the following qualifications
shall be taken into consideration by the court:
(1) Expertise and acumen to
manage and operate a
business similar in size
and complexity as that
of
the
corporation,
association
or
partnership sought to
be
put
under
management
committee;
(2) Knowledge in management
and finance;
(3)

Good
moral
character,
independence
and
integrity;

(4) A lack of a conflict of interest


as defined in these
Rules; and
(5) Willingness and ability to file
a bond in such amount
as may be determined
by the court.
Without limiting the generality of the following, a
member of a management committee may be
deemed to have a conflict of interest if:
(1) He is engaged in a line of
business
which
competes
with
the
corporation, association
or partnership sought to
be
placed
under
management;
(2) He is a director, officer or
stockholder
charged
with mismanagement,
dissipation or wastage
of the properties of the
entity
under
management; or
(3)

He
is
related
by
consanguinity or affinity
within the fourth civil
degree to any director,
officer or stockholder

charged
with
mismanagement,
dissipation or wastage
of the properties of the
entity
under
management.
SECTION 5. Powers and Functions of the
Management Committee. Upon assumption to
office of the management committee, the receiver
shall immediately render a report and turn over
the management and control of the entity under
his receivership to the management committee.
The management committee shall have the power to
take custody of and control all assets and properties
owned or possessed by the entity under
management. It shall take the place of the
management and board of directors of the entity
under management, assume their rights and
responsibilities, and preserve the entity's assets and
properties in its possession.
Without limiting the generality of the foregoing, the
management committee shall exercise the following
powers and functions:
(1)

To

investigate the acts,


conduct,
properties,
liabilities, and financial
condition
of
the
corporation, association
or partnership under
management;

(2) To examine under oath the


directors and officers of
the entity and any other
witnesses that it may
deem appropriate;
(3) To report to the court any fact
ascertained
by
it
pertaining to the causes
of the problems, fraud,
misconduct,
mismanagement
and
irregularities committed
by the stockholders,
directors, management
or any other person;
(4) To employ such person or
persons
such
as
lawyers,
accountants,
auditors, appraisers and
staff as are necessary in
performing its functions
and
duties
as
management
committee;
(5) To report to the court any
material
adverse
change in the business
of
the
corporation,
association
or
partnership
under
management;

(6)

To

evaluate the existing


assets and liabilities,
earnings and operations
of
the
corporation,
association
or
partnership
under
management;

(7) To determine and recommend


to the court the best
way to salvage and
protect the interest of
the
creditors,
stockholders and the
general public, including
the rehabilitation of the
corporation, association
or partnership under
management;

any governing body of


the
entity
under
management and pass
resolution
in
substitution of the same
to enable it to more
effectively exercise its
powers and functions;
(15) To modify, nullify or revoke
transactions coming to
its knowledge which it
deems detrimental or
prejudicial
to
the
interest of the entity
under management;
(16)

(8) To prohibit and report to the


court any encumbrance,
transfer, or disposition
of the debtor's property
outside of the ordinary
course of business or
what is allowed by the
court;
(9) To prohibit and report to the
court any payments
made outside of the
ordinary
course
of
business;
(10) To have unlimited access to
the
employees,
premises,
books,
records and financial
documents
during
business hours; cTSDAH
(11) To inspect, copy, photocopy
or
photograph
any
document, paper, book,
account
or
letter,
whether
in
the
possession
of
the
corporation, association
or partnership or other
persons;
(12)

To

gain entry into any


property
for
the
purposes of inspecting,
measuring,
surveying,
or photographing it or
any designated relevant
object
or
operation
thereon;

(13) To bring to the attention of


the court any material
change affecting the
entity's ability to meet
its obligations;
(14) To revoke resolutions passed
by
the
Executive
Committee or Board of
Directors/Trustees
or

To
recommend
the
termination
of
the
proceedings and the
dissolution of the entity
if it determines that the
continuance in business
of such entity is no
longer
feasible
or
profitable or no longer
works
to
the
best
interest
of
the
stockholders,
partieslitigants, creditors or the
general public;

(17) To apply to the court for any


order or directive that it
may deem necessary or
desirable to aid it in the
exercise of its powers
and performance of its
duties and functions;
and
(18)

To

exercise such other


powers as may, from
time
to
time,
be
conferred upon it by the
court.

SECTION 6. Action by Management Committee.


A majority of its members shall be necessary
for the management committee to act or make a
decision. The chairman of the management
committee shall be chosen by the members from
among themselves. The committee may
delegate its management functions as may be
necessary to operate the business of the entity
under management and preserve its assets.
SECTION 7. Transactions Deemed to be in Bad
Faith. All transactions made by the previous
management and directors shall be deemed
fraudulent and are rescissible if made within
thirty (30) days prior to the appointment of the
receiver or management committee or during
their incumbency as receiver or management
committee.
SECTION 8. Fees and Expenses. The receiver
or the management committee and the persons
hired by it shall be entitled to reasonable
professional
fees
and
reimbursement
of
expenses which shall be considered as
administrative expenses.

SECTION 9. Immunity From Suit. The receiver


and members of the management committee and
the persons employed by them shall not be subject
to any action, claim or demand in connection with
any act done or omitted by them in good faith in
the exercise of their functions and powers. All
official acts and transactions of the receiver or
management committee duly approved or ratified
by the court shall render them immune from any
suit in connection with such act or transaction.
SECTION 10. Reports. Within a period of sixty
(60) days from the appointment of its members,
the management committee shall make a report
to the court on the state of the corporation,
partnership or association under management.
Thereafter, the management committee shall
report every three (3) months to the court or as
often as the court may require on the general
condition of the entity under management.
SECTION 11. Removal and Replacement of a
Member of the Management Committee. A
member of the management committee is
deemed removed upon appointment by the
court of his replacement chosen in accordance
with section 4 of this Rule.
SECTION 12. Discharge of the Management
Committee. The management committee shall
be discharged and dissolved under the following
circumstances:
(1)

Whenever the court, on


motion or motu proprio,
has determined that the
necessity
for
the
management
committee no longer
exists;

(2) By agreement of the parties;


and
(3)

Upon termination
proceedings.

of

the

Upon its discharge and dissolution, the


management committee shall submit its final
report and render an accounting of its
management within such reasonable time as
the court may allow.
21. Rules of Procedure for Corporate Rehabilitation
q. Chas Realty & Devt Corp Vs Talavera [G.R. No.
151925. February 6, 2003.]
Observe that Rule 4, Section 2(k),
prescribes the need for a certification;
-

one, to state that the filing


of the petition has been duly
authorized, and

two, to confirm that the


directors and stockholders
have irrevocably approved
and/or
consented
to, in

accordance with existing


laws, all actions or matters
necessary and desirable to
rehabilitate the corporate
debtor, including, as and
when
called
for,
such
extraordinary
corporate
actions as may be marked
out.
The phrase, "in accordance with existing
laws," obviously would refer to that which
is, or to those that are, intended to be
done by the corporation in the pursuit of
its plan for rehabilitation. Thus, if any
extraordinary
corporate
action
(mentioned in Rule 4, Section 2(k), of the
Interim Rules on Corporate Rehabilitation)
are to be done under the proposed
rehabilitation plan, the petitioner
would be bound to make it known
that it has received the approval of a
majority of the directors and the
affirmative
votes
of
stockholders
representing at least two-thirds (2/3) of
the outstanding capital stock of the
corporation.
Where
no
such
extraordinary corporate acts (or one
that under the law would call for a twothirds (2/3) vote) are contemplated to be
done in carrying out the proposed
rehabilitation plan, then the approval of
stockholders would only be by a
majority, not necessarily a two-thirds
(2/3), vote, as long as, of course, there is
a quorum 5 a fact which is not here
being disputed.

Nowhere
in
the
aforequoted
paragraph can it be inferred that an
affirmative vote of stockholders
representing at least two-thirds (2/3)
of the outstanding stock is invariably
necessary for the filing of a petition for
rehabilitation regardless of the corporate
action that the plan envisions. Just to the
contrary, it only requires in the filing of
the petition that the corporate actions
therein
proposed
have
been
duly
approved or consented to by the directors
and stockholders "in consonance with
existing laws." The requirement is
designed to avoid a situation where a
rehabilitation plan, after being developed
and
judicially
sanctioned,
cannot
ultimately be seen through because of the
refusal of directors or stockholders to
cooperate in the full implementation of
the plan. In fine, a certification on the
approval of stockholders is required but
the question, whether such approval
should be by a majority or by a two-thirds
(2/3) vote of the outstanding capital
stock, would depend on the existing
law vis-a-vis the corporate act or acts
proposed to be done in the rehabilitation
of the distressed corporation.
The rehabilitation plan 7 submitted by
petitioner merely consists of a repayment or
re-structuring scheme of CRDC's bank loans

to Land Bank of the Philippines and


Equitable-PCI Bank and of leasing out most
of the available spaces in the Megacenter,
including the completion of the construction
of the fourth floor, to increase rental
revenues. None of the proposed corporate
actions would require a vote of approval by
the stockholders representing at least twothirds (2/3) of the outstanding capital stock.

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.
3.

REPLEVIN CASE DOCTRINES


1. Definition
2.

Nature
a. BA Finance Corporation Vs CA [G.R. No. 102998. July
5, 1996.]
Replevin, broadly understood, is both a form of
principal remedy and of a provisional relief. It
may refer either to the action itself, i.e., to regain the
possession of personal chattels being wrongfully
detained from the plaintiff by another, or to the
provisional remedy that would allow the plaintiff to
retain the thing during the pendency of the action
and hold it pendente lite. The action is primarily
possessory in nature and generally determines
nothing more than the right of possession. Replevin
is so usually described as a mixed action, being
partly in rem and partly in personam in
rem insofar as the recovery of specific property is
concerned, and in personam as regards to damages
involved. As an "action in rem," the gist of the
replevin action is the right of the plaintiff to obtain
possession of specific personal property by reason of
his being the owner or of his having a special interest
therein. Consequently, the person in possession
of
the
property
sought
to
be
replevied
is ordinarily the proper and only necessary
party defendant, and the plaintiff is not required
to so join as defendants other persons claiming
a right on the property but not in possession
thereof. Rule 60 of the Rules of Court allows an
application for the immediate possession of the
property but the plaintiff must show that he has a
good legal basis, i.e., a clear title thereto, for seeking
such interim possession.
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

Application
a. Servicewide Specialists Inc. Vs CA [G.R. No.
110048. November 19, 1999.]
In a suit for replevin, a clear right of
possession must be established. (Italics
supplied) 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 this case has been resorted to in
order to pave the way for the foreclosure of what
is covered by the chattel mortgage. The
conditions essential for such foreclosure would
be to show, firstly, the existence of the chattel
mortgage and, secondly, the default of the
mortgagor. These requirements must be shown
because the validity of the plaintiff's exercise of
the right of foreclosure is inevitably dependent
thereon.
Leticia
Laus
(mortgagor),
being
an
indispensable party (because Servicewide
filed for replevin only on the possers), should
have been impleaded in the complaint for
replevin and damages. An indispensable party is
one whose interest will be affected by the court's
action in the litigation, and without whom no
final determination of the case can be had. The
party's interest in the subject matter of the suit
and in the relief sought are so inextricably
intertwined with the other parties that his legal
presence as a party to the proceeding is an
absolute necessity. In his absence, there
cannot be a resolution of the dispute of the
parties before the Court which is effective,
complete, or equitable.

4.

Affidavit and Bond


a. Citibank Vs CA [G.R. No. 61508. March 17, 1999.]
There is substantial compliance with the rule
requiring that an affidavit of merit to support the
complaint for replevin if the complaint itself
contains a statement of every fact required to be
stated in the affidavit of merit and the complaint
is verified like an affidavit. And similarly, in the
case of an attachment which likewise requires an
affidavit of merit, the Court held that the
absence of an affidavit of merit is not fatal where
the petition itself, which is under oath, recites
the circumstances or facts constitutive of the
grounds for the petition.
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 defendant 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 such
seizure; and
(4) the actual value of the property.
(now, Market Value)
As there 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. 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 . . . ." Hence, the bond
should be double the actual value of the
properties involved. In this case, what was
posted was merely an amount which was double
the probable value as declared by the plaintiff
and, therefore, inadequate should there be a
finding that the actual value is actually greater.
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 an 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
the properties sought to be recovered and for
damages, if any.
POSTING OF COUNTERBOND OR REDELIVERY
BOND; WHEN PROPER; CASE AT BAR.
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 Sections 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
Sections 5 and 6.

In the case under consideration, the private


respondent did not opt to cause redelivery
of the properties to him by filing a counterbond precisely because he objected to the
sufficiency of the bond posted by plaintiff.
Therefore, he need not file a counter-bond or
redelivery bond. When such objection was not
given due course in the court below when,
instead of requiring the plaintiff to post a new
bond, the court approved the bond claimed by
respondent to be insufficient, and ordered the
seizure of the properties recourse to a petition
for certiorari before the Court of Appeals
assailing such order is proper under the
circumstances.
b.

Factoran Vs CA [G.R. No. 93540. December 13,


1999.]
A writ of replevin does not just issue as a
matter of course upon the applicant's filing of a
bond and affidavit, as the Court of Appeals has
wrongly put it. The mere filing of an affidavit,
sans allegations therein that satisfy the
requirements of Sec. 2, Rule 60 of the Rules of
Court, cannot justify the issuance of a writ of
replevin. Wrongful detention by the defendant of
the properties sought in an action for replevin
must be satisfactorily established. If only a
mechanistic averment thereof is offered,
the writ should not be issued. In the case at
bar, the subject narra lumber and six-wheeler
truck were confiscated by petitioner Secretary
pursuant to Section 68-A of P.D. No. 705, as
amended by Executive Order (E.O.) No. 277. As
the petitioner Secretary's administrative
authority to confiscate is clearly provided
by law, the taking of the subject properties
is not wrongful and does not warrant the
issuance of a writ of replevin prayed for by
private respondents.
Issuance of the confiscation order by petitioner
Secretary was valid exercise of his power under
Sec. 68-A of P.D. No. 705. By virtue of said order,
the narra lumber and six-wheeler truck of
private respondents were held in custodia
legis and hence, beyond the reach of
replevin. Property lawfully taken by virtue of
legal process is deemed to be in custodia legis.
When a thing is in official custody of judicial or
executive officer in pursuance of his execution of
a legal writ, replevin will not lie to recover it.
Otherwise, there would be interference with the
possession before the function of law had been
performed as to the process under which the
property was taken. So basic is the doctrine that
it found inclusion in the 1997 amendments
introduced to the Rules of Civil Procedure. Thus,
Sec. 2 (c), Rule 60 of the 1997 Rules of Civil
Procedure provides that: "Affidavit and bond.
Upon applying for such order the plaintiff must
show by his own affidavit or that some other
person who personally knows the facts:" . . . "(c)
That the property has not been distrained or
taken for a tax assessment or fine pursuant to
law, or seized under a writ of execution, or
preliminary attachment or otherwise placed

under custodia legis, or if so seized, that it is


exempt from such seizure or custody; . . ."
5.

6.

Duty of Sheriff

7.

Enforcement
a. Fernandez Vs International Corporate Bank [G.R.
No. 131283. October 7, 1999.]
Under the Resolution of the Supreme Court en
banc, dated January 11, 1983, providing for the
interim rules and guidelines relative to the
implementation of BP 129, a writ of replevin
like the one issued in the present case may be
served anywhere
in the Philippines.
Specifically, the said Resolution states: "3. Writs
and processes. (a) Writs of certiorari,
prohibition, mandamus, quo
warranto, habeas
corpus and injunction issued by a regional trial
court may be enforced in any part of the region.
(b) All other processes, whether issued by a
regional trial court or a metropolitan trial court,
municipal trial court or municipal circuit trial
court may be served anywhere in the
Philippines, and, in the last three cases, without
a certification by the judge of the regional trial
court." Thus, the Writ of Replevin issued by
Judge Paas, which obviously does not fall
under item "a" of the abovecited Rule, may
be validly enforced anywhere in the
Philippines.
Petitioners
confused
the
jurisdiction of a court to hear and decide a case
on the one hand with, on the other, its power to
issue writs and processes pursuant to and in the
exercise of said jurisdiction.

Order
a. Sergs Products Inc Vs PCI Leasing [G.R. No.
137705. August 22, 2000.]
In the present case, the Lease Agreement
clearly provides that the machines in
question are to be considered as personal
property. Specifically, Section 12.1 of the
Agreement reads as follows: "12.1 The
PROPERTY is, and shall at all times be and
remain, personal property notwithstanding that
the PROPERTY or any part thereof may now be,
or hereafter become, in any manner affixed or
attached to or embedded in, or permanently
resting upon, real property or any building
thereon, or attached in any manner to what is
permanent." Clearly then, petitioners are
estopped
from
denying
the
characterization of the subject machines as
personal property. Under the circumstances,
they are proper subjects of the Writ of Seizure. It
should be stressed, however, that our holding
that the machines should be deemed personal
property pursuant to the Lease Agreement is
good only insofar as the contracting
parties are concerned. Hence, while the
parties are bound by the Agreement, third
persons acting in good faith are not
affected by its stipulation characterizing
the subject machinery as personal. In any
event, there is no showing that any specific third
party would be adversely affected.
The validity and the nature of the contract are
the lis mota of the civil action pending before
the RTC. A resolution of these questions,
therefore, is effectively a resolution of the merits
of the case. Hence, they should be threshed out
in the trial, not in the proceedings involving the
issuance of the Writ of Seizure. Indeed, in La
Tondea Distillers v. CA, the Court explained that
the policy under Rule 60 was that questions
involving title to the subject property
questions which petitioners are now raising
should be determined in the trial. In that case,
the Court noted that the remedy of defendants
under Rule 60 was either to post a counterbond or to question the sufficiency of the
plaintiff's bond. They were not allowed,
however, to invoke the title to the subject
property. The Court ruled: "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 ground of insufficiency of the
complaint or of the grounds relied upon therefor,
as in proceedings on preliminary attachment or
injunction, 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."

Applying the said Rule, Malaloan v. Court of


Appeals reiterated the foregoing distinction
between the jurisdiction of the trial court and the
administrative area in which it could enforce its
orders and processes pursuant to the jurisdiction
conferred on it: "We feel that the foregoing
provision is too clear to be further belabored or
enmeshed in unwarranted polemics. The rule
enumerates the writs and processes which even
if issued by a regional trial court, are enforceable
only within its judicial region. In contrast, it
unqualifiedly provides that all other writs and
processes, regardless of which court issued the
same, shall be enforceable anywhere in the
Philippines. No legal provision, statutory or
reglementary,
expressly
or
impliedly
provides a jurisdictional or territorial limit
[to] its area, of enforceability. On the
contrary, the above-quoted provision of the
interim
Rules expressly authorizes
its
enforcement anywhere in the country, since it is
not among the processes specified in paragraph
(a) and there is no distinction or exception made
regarding the processes contemplated in
paragraph (b)."
8.

Return of Property

9.

Disposition of Property by Sheriff

10. Claim by Third Persons


11. Judgment
a. Visayan Surety and Insurance Corporation Vs CA
[G.R. No. 127261. September 7, 2001.]

It is a basic principle in law that contracts


can bind only the parties who had entered
into it; it cannot favor or prejudice a third
person. Contracts take effect between the
parties, their assigns, and heirs, except in cases
where the rights and obligations arising from the
contract are not transmissible by their nature, or
by stipulation or by provision of law.
A contract of surety is an agreement where a
party called the surety guarantees the
performance by another party called the
principal or obligor of an obligation or
undertaking in favor of a third person called the
obligee. Specifically, suretyship is a contractual
relation resulting from an agreement whereby
one person, the surety, engages to be
answerable for the debt, default or miscarriage
of another, known as the principal. The
obligation of a surety cannot be extended by
implication beyond its specified limits. "When a
surety executes a bond, it does not guarantee
that the plaintiff's cause of action is meritorious,
and that it will be responsible for all the costs
that may be adjudicated against its principal in
case the action fails. The extent of a surety's
liability is determined only by the clause of the
contract of suretyship." A contract of surety is
not presumed; it cannot extend to more than
what is stipulated. Since the obligation of the
surety cannot be extended by implication, it
follows that the surety cannot be held liable to
the intervenor when the relationship and
obligation of the surety is limited to the
defendants specified in the contract of surety.

evident that nothing can be taken for


granted upon the point in issue.
There is no law or reason which authorizes
the granting of support to a person who
claims to be a son in the same manner as to a
person who establishes by legal proof that he
is such son. In the latter case legal
evidence raises a presumption of law,
while in the former there is no
presumption, there is nothing but a mere
allegation, a fact in issue, and a simple fact in
issue must not be confounded with an
established right recognized by a final
judgment.
The civil status of sonship being denied and
this civil status, from which the right to
support is derived, being in issue, it is
apparent that no effect can be given to
such a claim until an authoritative
declaration has been made as to the
existence of the cause. It is also evident
that there is a substantial difference between
the capacity of a person after the rendition of
a final judgment in which that person is
declared to be in possession of the status of a
son and his capacity prior to such time when
nothing exists other that his suit or claim to be
declared in possession of such a status.

c.

MARRIAGE
AND
DIVORCE;
ALIMONY;
PROHIBITION. Where the answer to a
complaint alleging marriage and praying
for a divorce denies the fact of marriage,
the court exceeds its jurisdiction in granting
alimony, and the enforcement of an order
granting it will be restrained by the writ of
prohibition.

SUPPORT PENDENTE LITE CASE DOCTRINES


1. Definition
a. Family Code, Title VIII
Art. 194. Support comprises everything
indispensable for sustenance, dwelling, clothing,
medical
attendance,
education
and
transportation, in keeping with the financial
capacity of the family.
The education of the person entitled to be
supported referred to in the preceding paragraph
shall include his schooling or training for some
profession, trade or vocation, even beyond the
age of majority. Transportation shall include
expenses in going to and from school, or to and
from place of work.
2.

The right of a wife to support depends upon


her status as such, and where the existence
of the status is put in issue by the pleading it
can not be presumed to exist for the purpose
of granting alimony.

d.

Coquia Vs Baltazar [G.R. No. L-2942. December


29, 1949.]
The action in the present case was not for
support but for the recovery of the ownership
and possession of real property. Manifestly such
an action is not the proper action contemplated
by Rule 63 of the Rules of Court. The mere fact
that the plaintiffs have legal and equitable rights
in the property they seeks to recover (Q .E. D.)
does not authorize the court to compel the
defendants to support the plaintiffs pending the
determination of the suit.

e.

Villanueva Vs Villanueva [G.R. No. 29959.


December 3, 1929.]
HUSBAND AND WIFE; INFIDELITY OF HUSBAND;
SEPARATE MAINTENANCE FOR WIFE. In order
to entitle a wife to maintain a separate home
and to require separate maintenance from her

Application
b. Francisco Vs Zandueta [G.R. No. 43794. August
9, 1935.]
PARENT AND CHILD; SUPPORT OF CHILD
WHILE HIS CIVIL STATUS IS IN LITIGATION. In
the present case the action for support is
brought by a minor, through his guardian ad
litem, who alleges that he is the son of the
petitioner; therefore it is necessary for
him to prove his civil status as such son.
His alleged civil status being in litigation, it is

Yangco Vs Rhode [G.R. No. 996 . October 13,


1902.]

husband, it is not necessary that the


husband should bring a concubine into the
marital domicile. Repeated illicit relations
with women outside of the marital
establishment are enough. The law is not so
unreasonable as to require a wife to live in
marital relations with a husband whose
propensity towards other women makes
common habitation with him unbearable.
f.

g.

merits finding that the claim of filiation and


support has been adequately proven in the case
at bar, beyond doubt even if such decision
were still pending appeal taken by the party
adjudged to be bound to give such support.
NOT AFFECTED BY REFUSAL OF TRIAL COURT TO
GRANT SUCH SUPPORT. The refusal of the trial
court to grant said alimony pendente lite did
not and cannot deprive the appellate court
of said authority, or even dent the wisdom
of the action taken by the latter, considering
that the former did not give any plausible reason
for its aforementioned refusal and that the same
may have, in fact, been due to the appeal taken
by the defendant, whose record on appeal had
already been approved.

Magoma Vs Macadaeg [G.R. No. L-5153.


December 10, 1951.]
HUSBAND AND WIFE; ALIMONY PENDENTE LITE;
ADULTERY AS DEFENSE; HUSBAND'S RIGHT TO
PRESENT EVIDENCE ON ADULTERY, BEFORE
ORDER OF ALIMONY PENDENTE LITE. Husband
has not been given an opportunity to adduce
evidence of the defenses he has set up against
the motion for support pendente lite, among
which is adultery. After the wife had presented
her evidence and before the hearing on the
motion was completed, the trial judge ordered
payment of alimony pendente lite. There is
nothing to show that the husband has resorted
to dilatory tactics in the presentation of his
evidence. Held: There is no other alternative
than to remand this case to the lower court in
order that immediate steps may be taken
relative to the reception of husband's
evidence in support of his opposition to the
grant
of
support pendente
lite,
(Sanchez vs. Zulueta, 68 Phil., 112).
Ramos Vs CA [G.R. No. L-31897. June 30, 1972.]
REMEDIAL
LAW;
PROVISIONAL
REMEDIES;
SUPPORT PENDENTE LITE; CASE OF YANGCO
DISTINGUISHED FROM INSTANT CASE.
Petitioner's assertion that support pendente
lite should not have been ordered by the Court
of Appeals, "there having been neither a
recognition of paternity by the petitioner nor its
establishment by final judgment" is without
merit. The case of Yangco vs. Rohde upon which
petitioner predicates his contention is not in
point, alimony pendente lite having been
granted
in
that
case without
any
evidence on the status of the plaintiff as
alleged wife of the defendant, who had
denied such allegation, unlike in the case at
bar where evidence relative to filiation was
introduced
and
found
to
be
sufficient, although the trial court's decision is
still pending appeal.
The Rules of Court clearly authorizes the
granting of support pendente lite, even
prior to the rendition of judgment by the
trial court.
RIGHT THERETO WHERE THERE IS JUDGMENT OF
FILIATION ALTHOUGH PENDING APPEAL. It
goes without saying that if, before the
rendition of judgment, the trial court may
"provisionally"
grant
alimony pendente
lite, with more reason may an appellate
court exercise a similar authority, after a full
dress trial and a decision of the trial court on the

GRANT THEREOF WITHOUT REQUIRING BOND.


The grant to the minors who had merely
asked "a monthly support of P75.00 for each
child," or P150.00 a month for both, and,
through their mother, had offered to file a bond
of the aggregate sum of P4,727.50, without
requiring a bond therefor, did not
constitute a grave abuse of discretion
amounting to excess of jurisdiction, in the light
of the circumstances surrounding the case
and from the evidence presented in the case
from which the trial court did not entertain doubt
that the children Fernando and Lorraine, both
surnamed Lagos, are the result of the illicit
relationship between petitioner and respondent
Felisa Lagos.
POVERTY
OF
MINORS
JUSTIFY
SUPPORT
PENDENTE LITE. In the present case it is not
disputed that one of the plaintiffs was born on
August 27, 1963 and the other on June 21, 1965.
On the date of the contested resolution, they
were, therefore, 6 and 4 years of age,
respectively. The minors are now, therefore,
around 9 and 7 years old, respectively, or of
school age. In addition thereto, they have been
litigating since September 5, 1965, or almost
seven (7) years, and the decision in their
favor is still pending appeal. Paraphrasing
Garcia vs. Court of Appeals, the circumstances
obtaining in the present case suggest that this is
an instance where, in view of the poverty
of herein private respondents, "it would be
a travesty of justice" to refuse them
support until the decision of the trial judge
is sustained on appeal."
3.

Comment

4.

Hearing

5.

Order
h. Mangonon Vs CA [G.R. No. 125041. June 30,
2006.]
Under this provision, a court may temporarily
grant support pendente lite prior to the
rendition of judgment or final order. Because
of its provisional nature, a court does not
need to delve fully into the merits of the
case before it can settle an application for
this relief. All that a court is tasked to do is
determine the kind and amount of evidence
which may suffice to enable it to justly resolve

the application. It is enough that the facts be


established by affidavits or other documentary
evidence appearing in the record.
After the hearings conducted on this matter as
well as the evidence presented, we find that
petitioner was able to establish, by prima
facie proof, the filiation of her twin
daughters to private respondents and the
twins' entitlement to support pendente lite.
6.
7.

Enforcement of Order
Support in Criminal Cases

8.

Restitution
i.

Saavedra Vs Ybanez Estrada [G.R. No. 33795.


September 4, 1931.]
The dismissal of an action has the
necessary
effect
of
abrogating
any
interlocutory order intended to be operative
exclusively during the pendency of the
litigation.
An action was brought by a wife against her
husband for maintenance of herself and
children, and in this action an order was made
for the payment of a fixed monthly stipend
pendente lite, but the
action
was
subsequently dismissed voluntarily by
the wife. Held that, in a subsequent action
brought for the same purpose as the first,
the husband could not be held liable for nonpayment of the maintenance provided in the
order pendente lite, as an adjudicated right.
A wife is entitled to recover from her
husband compensation for paraphernal
property which she has applied to the support
of herself and children, during the period when
their maintenance was not paid out of the
conjugal property by the husband.
In an action for maintenance the court
refused to grant an injunction against the
husband to prevent him from alienating the
conjugal property without the consent of the
court; but there being an appreciable danger
that an attempt to alienate the same might be
made in fraud of the wife and her children, the
court directed that the obligation to pay
maintenance should be annotated in the
property register as a lien upon such property.

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