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PRELIMINARY ATTACHMENT ANITA MANGILA, petitioner, vs. COURT OF APPEALS and LORETA GUINA, respondents.

Facts: Mangila contracted the freight forwarding services of Guina for shipment of petitioners products. Petitioner agreed to pay private respondent cash on delivery. On the first shipment, petitioner requested for seven days within which to pay private respondent. However, for the next three shipments petitioner failed to pay private respondent. Despite several demands, petitioner never paid private respondent. Guina sued Mangila before the RTC of Pasay. The sheriff filed his Sheriffs Return showing that summons was not served on petitioner. The writ of preliminary attachment was issued in favor of Guina since the absence of Mangila in the country was construed as done with fraud. Mangila filed motion to Discharge Attachment without submitting herself to the jurisdiction of the trial court. She pointed out that up to then, she had not been served a copy of the Complaint and the summons. Hence, petitioner claimed the court had not acquired jurisdiction over her person. The said motion was granted. Guina applied for alias summons on December 26, 1988, which the trial court issued on January 19, 1989. It was only on January 26, 1989 that summons was finally served on petitioner. Issue: Whether the writ of attachment was improperly issued. Held: As a preliminary note, a distinction should be made between issuance and implementation of the writ of attachment. It is necessary to distinguish between the two to determine when jurisdiction over the person of the defendant should be acquired to validly implement the writ. This Court has long settled the issue of when jurisdiction over the person of the defendant should be acquired in cases where a party resorts to provisional remedies. A party to a suit may, at any time after filing the complaint, avail of the provisional remedies under the Rules of Court. Specifically, Rule 57 on preliminary attachment speaks of the grant of the remedy at the commencement of the action or at any time thereafter.[21] This phrase refers to the date of filing of the complaint which is the moment that marks the commencement of the action. The reference plainly is to a time before summons is served on the defendant, or even before summons issues. The grant of the provisional remedy of attachment involves three stages: first, the court issues the order granting the application; second, the writ of attachment issues pursuant to the order granting the writ; and third, the writ is implemented. For the initial two stages, it is not necessary that jurisdiction over the person of the defendant be first obtained. However, once the implementation of the writ commences, the court must have acquired jurisdiction over the defendant for without such jurisdiction, the court has no power and authority to act in any manner against the defendant. Any order issuing from the Court will not bind the defendant. In the instant case, the Writ of Preliminary Attachment was issued on September 27, 1988 and implemented on October 28, 1988. However, the alias summons was served only on January 26, 1989 or almost three months after the implementation of the writ of attachment. In conclusion, we hold that the alias summons belatedly served on petitioner cannot be deemed to have cured the fatal defect in the enforcement of the writ. The trial court cannot enforce such a coercive process on petitioner without first obtaining jurisdiction over her person. The preliminary writ of attachment must be served after or simultaneous with the service of summons on the defendant whether by personal service, substituted service or by publication as warranted by the circumstances of the case. The subsequent service of summons does not confer a retroactive acquisition of jurisdiction over her person because the law does not allow for retroactivity of a belated service. VICENTE B. CHUIDIAN, petitioner, vs. SANDIGANBAYAN (Fifth Division) and the REPUBLIC OF THE PHILIPPINES, respondents. Facts: Chuidian a favored businessman of Marcoses, used false pretenses to induce Philguarantee in facilitating loan in favor of ARCI which was allegedly owned by Chuidian. The loan was approved and ARCI defaulted payments. Philguarantee sued

Chuidian and alleged that he misused the loan proceeds for his personal benefit. Philguarantee, however, entered with compromise agreement with Chuidian. Pursuant to such agreement, Chuidian will assign all of its interest to all his companies in favor of the Philippine Government which in turn Philguarantee will absolve him from all civil and criminal liability. Further, the Phil. Govt. shall pay Chuidian through the letters of credit which were issued by PNB in favor of him. The Aquino government, however, through PCGG made efforts on the Marcoses properties which were illegally acquired. The assets included in sequestration were that of Chuidian. The complaint was filed before sandiganbayan against Chuidian for having in conspiracy with the Marcoses spouses. PCGG averred that Chuidian and other defendants committed unlawful concert such as violation of public trust and fiduciary obligations. The writ of attachment was issued while the case was pending over the letter of credit for violation for violation of Ruled 57 sec. 1 b,c,d,e. In defense, Chuidian averred that he has no fiduciary relationship with the plaintiff, fraud must be present at the time the contract was entered into, and has not disposed of his property with no intention to defraud private respondent. Further, he is a nonresident that time. Chuidian filed motion to lift the said order after four years but was denied. Issue: whether PA against LC should be lifted. Held: As has been consistently ruled by this Court, the determination of the existence of grounds to discharge a writ of attachment rests in the sound discretion of the lower courts. There are two grounds to quash PA: 1. To file a counterbond in accordance with Rule 57, Section 12; and quash the attachment on the ground that it was irregularly or improvidently issued, as provided for in Section 13 of the same Rule. Chuidian assailed Sec. 13. The rule , however, contemplates that the defect must be in the very issuance of the attachment writ. The attachment may be discharged under Sec. 13 of Rule 57 when it is proven that the allegations of the complaint were deceptively framed, or when the complaint fails to state a cause of action. The issue of fraud, however, touches on the very merits of the main case which accuses petitioner of committing fraudulent acts in his dealings with the government. In fine, fraud was not only one of the grounds for the issuance of the preliminary attachment, it was at the same time the governments cause of action in the main case. when the preliminary attachment is issued upon a ground which is at the same time the applicants cause of action; e.g., an action for money or property embezzled or fraudulently misapplied or converted to his own use by a public officer, or an officer of a corporation, or an attorney, factor, broker, agent, or clerk, in the course of his employment as such, or by any other person in a fiduciary capacity, or for a willful violation of duty, or an action against a party who has been guilty of fraud in contracting the debt or incurring the obligation upon which the action is brought, the defendant is not allowed to file a motion to dissolve the attachment under Section 13 of Rule 57 by offering to show the falsity of the factual averments in the plaintiffs application and affidavits on which the writ was based and consequently that the writ based thereon had been improperly or irregularly issued the reason being that the hearing on such a motion for dissolution of the writ would be tantamount to a trial of the merits of the action. In other words, the merits of the action would be ventilated at a mere hearing of a motion, instead of at the regular trial. When the writ of attachment is issued upon a ground which is at the same time the applicants cause of action, the only other way the writ can be lifted or dissolved is by a counterbond, in accordance with Section 12 of the same rule. This recourse, however, was not availed of by petitioner. Torres vs Satsatin Facts: The siblings Sofia, Fructosa, and Mario Torres each own adjacent 20,000 square meters track of land situated at Barrio Lankaan, Dasmarias, Cavite. Sometime in 1997, Nicanor Satsatin asked petitioners mother, Agripina Aledia, if she wanted to sell their lands. Agripina agreed to sell the properties. Petitioners, thus, authorized Nicanor, through a Special Power of Attorney, to negotiate for the sale of

the properties. Sometime in 1999, Nicanor offered to sell the properties to Solar Resources, Inc. (Solar). Solar allegedly agreed to purchase the three parcels of land, together with the 10,000-square-meter property owned by a certain Rustica Aledia. Petitioners alleged that Nicanor was supposed to remit to them the total amount of P28,000,000.00 or P9,333,333.00 each to Sofia, Fructosa, and the heirs of Mario. Petitioners claimed that Solar has already paid the entire purchase price of P35,000,000.00 to Nicanor in Thirty-Two (32) post-dated checks which the latter encashed/deposited on their respective due dates and during the period from January 2000 to April 2002, Nicanor allegedly acquired a house and lot at Vista Grande BF Resort Village, Las Pias City and a car, which he registered in the names of his unemployed children. Nicanor only remitted the total amount of P9,000,000.00, leaving an unremitted balance of P19,000,000.00. Despite repeated verbal and written demands, Nicanor failed to remit to them the balance of P19,000,000.00. Consequently, on October 25, 2002, petitioners filed before the regional trial court (RTC) a Complaint for sum of money and damages, against Nicanor, Ermilinda Satsatin, Nikki Normel Satsatin, and Nikki Norlin Satsatin. On October 30, 2002, petitioners filed an Ex-Parte Motion for the Issuance of a Writ of Attachment and on the said date, the trial court issued an Order directing the petitioners to post a bond in the amount of P7,000,000.00 before the court issues the writ of attachment. Thereafter, the RTC issued a Writ of Attachment dated November 15, 2002, directing the sheriff to attach the estate, real or personal, of the respondents. On November 19, 2002, a copy of the writ of attachment was served upon the respondents. On the same date, the sheriff levied the real and personal properties of the respondent, including household appliances, cars, and a parcel of land located at Las Pias, Manila. On November 21, 2002, summons, together with a copy of the complaint, was served upon the respondents and on the same day respondents filed their answer, they also filed a Motion to Discharge Writ of Attachment anchored on the following grounds: the bond was issued before the issuance of the writ of attachment; the writ of attachment was issued before the summons was received by the respondents. On March 11, 2003, after the parties filed their respective pleadings, the RTC issued an Order denying the motion. Respondents argued that the subject writ was improper and irregular having been issued and enforced without the lower court acquiring jurisdiction over the persons of the respondents. They maintained that the writ of attachment was implemented without serving upon them the summons together with the complaint. They also argued that the bond issued in favor of the petitioners was defective, because the bonding company failed to obtain the proper clearance that it can transact business with the RTC of Dasmarias, Cavite. They added that the various clearances which were issued in favor of the bonding company were applicable only in the courts of the cities of Pasay, Pasig, Manila, and Makati, but not in the RTC, Imus, Cavite. The CA rendered the assailed Decision in favor of the respondents, finding grave abuse of discretion amounting to lack of or in excess of jurisdiction on the part of the RTC in issuing the Orders Hence, the petitioners filed a petition for review Issues: THE HONORABLE COURT OF APPEALS ERRED IN ORDERING THE LIFTING OF THE WRIT OF ATTACHMENT PURSUANT TO SECTION 13, RULE 57 OF THE REVISED RULES OF CIVIL PROCEDURE Held: A writ of preliminary attachment is defined as a provisional remedy issued upon order of the court where an action is pending to be levied upon the property or properties of the defendant therein, the same to be held thereafter by the sheriff as security for the satisfaction of whatever judgment that might be secured in the said action by the attaching creditor against the defendant. In the case at bar, the CA correctly found that there was grave abuse of discretion amounting to lack of or in excess of jurisdiction on the part of the trial court in approving the bond posted by petitioners despite the fact that not all the requisites for its approval were complied with. In accepting a surety bond, it is necessary that all the requisites for its approval are met; otherwise, the bond should be rejected. Every bond should be accompanied by a clearance from the Supreme Court

showing that the company concerned is qualified to transact business which is valid only for thirty (30) days from the date of its issuance. However, it is apparent that the Certification issued by the Office of the Court Administrator (OCA) at the time the bond was issued would clearly show that the bonds offered by Western Guaranty Corporation may be accepted only in the RTCs of the cities of Makati, Pasay, and Pasig. Therefore, the surety bond issued by the bonding company should not have been accepted by the RTC of Dasmarias, Branch 90, since the certification secured by the bonding company from the OCA at the time of the issuance of the bond certified that it may only be accepted in the above-mentioned cities. Thus, the trial court acted with grave abuse of discretion amounting to lack of or in excess of jurisdiction when it issued the writ of attachment founded on the said bond. The grant of the provisional remedy of attachment involves three stages: first, the court issues the order granting the application; second, the writ of attachment issues pursuant to the order granting the writ; and third, the writ is implemented. For the initial two stages, it is not necessary that jurisdiction over the person of the defendant be first obtained. However, once the implementation of the writ commences, the court must have acquired jurisdiction over the defendant, for without such jurisdiction, the court has no power and authority to act in any manner against the defendant. Any order issuing from the Court will not bind the defendant. Such belated service of summons on respondents cannot be deemed to have cured the fatal defect in the enforcement of the writ. The trial court cannot enforce such a coercive process on respondents without first obtaining jurisdiction over their person. The preliminary writ of attachment must be served after or simultaneous with the service of summons on the defendant whether by personal service, substituted service or by publication as warranted by the circumstances of the case. The subsequent service of summons does not confer a retroactive acquisition of jurisdiction over her person because the law does not allow for retroactivity of a belated service. Metro Inc. and spouses frederick and liza juan vs Laras gifts and decors and mr and ms. Luis and lara villafuerte GR no 171741, Nov. 27, 2009 FACTS: Laras Gifts and Decors Inc. (LGD) and Metro, Inc. are corporations engaged in the business of manufacturing, producing, selling and exporting handicrafts. Luis Villafuerte, Jr. and Lara Maria R. Villafuerte are the president and vice-president of LGD respectively. Frederick Juan and Liza Juan are the principal officers of Metro, Inc. Sometime in 2001, Metro Inc. and LGD agreed that LGD would endorse to Metro Inc. purchase orders received by LGD from their buyers in the US in exchange for a 15% commission, to be shared equally by LGD and James R. Paddon (JRP), LGDs agent. The terms of the agreement were later embodied in an e-mail labeled as the "2001 Agreement."4In May 2003, LGD filed with the RTC, Branch 197, Las Pias City (trial court) a complaint against Metro Inc. for sum of money and damages with a prayer for the issuance of a writ of preliminary attachment. Subsequently, respondents filed an amended complaint5and alleged that, as of July 2002, Metro Inc. defrauded them in the amount of $521,841.62.Respondents also prayed for the issuance of a writ of preliminary attachment. In its 23 June 2003 Order,the trial court granted LGDs prayer and issued the writ of attachment against the properties and assets of petitioners. On 26 June 2003, petitioners filed a motion to discharge the writ of attachment. Metro Inc. argued that the writ of attachment should be discharged on the ground that respondents failed to substantiate their allegations of fraud with specific acts or deeds showing how petitioners defrauded them. After considering the arguments of the parties, the trial court granted Metro incc motion and lifted the writ of attachment. LGD filed a motion for reconsideration. In its 10 September 2003 Order, the trial court denied the motion. According to the trial court, respondents failed to sufficiently show that petitioners were guilty of fraud either in incurring the obligation upon which the action was brought, or in the performance thereof. The trial court found no proof that petitioners were motivated by malice in entering into the 2001

agreement. The trial court also declared that petitioners failure to fully comply with their obligation, absent other facts or circumstances to indicate evil intent, does not automatically amount to fraud. LGD filed a petition for certiorari before the Court of Appeals. LGD alleged that the trial court gravely abused its discretion when it ordered the discharge of the writ of attachment without requiring petitioners to post a counter-bond. According to the Court Appeals, the trial court gravely abused its discretion when it ordered the discharge of the writ of attachment without requiring petitioners to post a counter-bond. The Court of Appeals said that when the writ of attachment is issued upon a ground which is at the same time also the applicants cause of action, courts are precluded from hearing the motion for dissolution of the writ when such hearing would necessarily force a trial on the merits of a case on a mere motion. The Court of Appeals pointed out that, in this case, fraud was not only alleged as the ground for the issuance of the writ of attachment, but was actually the core of respondents complaint. The Court of Appeals declared that the only way that the writ of attachment can be discharged is by posting a counter-bond in accordance with Section 12, Rule 57 of the Rules of Court. The Court of Appeals granted respondents petition. Metro Inc. filed a motion for reconsideration. In its 2 March 2006 Resolution, the Court of Appeals denied the motion. ISSUE: Whether the writ of attachment issued by the trial court was improperly issued such that it may be discharged without the filing of a counter-bond. HELD: The petition is without merit. Metro inc,Frederick juan are guilty of fraud committed both at the inception of the agreement and in the performance of the obligation. Through machinations and schemes, Metro Inc. successfully enticed LGD to enter into the 2001 Agreement. In order to secure LGDs full trust in them and lure LGD to endorse more Purchase Orders and increase the volume of the orders, Metro Inc during the early part, remitted to LGDs shares under the Agreement. However, soon thereafter, just when the orders increased and the amount involved likewise increased, Metro Inc. suddenly, without any justifiable reasons and in pure bad faith and fraud, abandoned their contractual obligations to remit to plaintiffs their shares. And worse, Metro Inc. transacted directly with LGDs foreign buyer to the latters exclusion and damage. Clearly, Metro Inc. planned everything from the beginning, employed ploy and machinations to defraud plaintiffs, and consequently take from them a valuable client. Metro Inc.are likewise guilty of fraud by violating the trust and confidence reposed upon them by LGD. Metro Inc. received the proceeds of LGDs LCs with the clear obligation of remitting 15% thereof to LGD. Their refusal and failure to remit the said amount despite demand constitutes a breach of trust amounting to malice and fraud. LGDs allegation that petitioners undertook to sell exclusively and only through JRP/LGD for Target Stores Corporation but that petitioners transacted directly with respondents foreign buyer is sufficient allegation of fraud to support their application for a writ of preliminary attachment. Since the writ of preliminary attachment was properly issued, the only way it can be dissolved is by filing a counter-bond in accordance with Section 12, Rule 57 of the Rules of Court. PRELIMINARY INJUNCTION IDOLOR v. CA Facts: To secure a loan of P520,000.00, petitioner Teresita Idolor executed in favor of private respondent Gumersindo De Guzman a Deed of Real Estate Mortgage with right of extra-judicial foreclosure upon failure to redeem the mortgage. Thereafter, private respondent Iluminada de Guzman, wife of Gumersindo de Guzman, filed a complaint against petitioner Idolor before the Office of the Barangay Captain of Barangay Ramon Magsaysay, Quezon City, which resulted in a "Kasunduang Pag-aayos. Petitioner failed to comply with her undertaking; thus private respondent Gumersindo filed a motion for execution before the Office of the Barangay captain who subsequently issued a

certification to file action. Then, Respondent Gumersindo De Guzman filed an extra judicial foreclosure of the real estate mortgage pursuant to the parties agreement set forth in the real estate mortgage. The mortgaged property was sold in a public auction to respondent Gumersindo, as the highest bidder and consequently, the Sheriff's Certificate of Sale was registered with the Registry of Deeds of Quezon City. petitioner filed with the Regional Trial Court of Quezon City, Branch 220, a complaint for annulment of Sheriff's Certificate of Sale with prayer for the issuance of a temporary restraining order (TRO) and a writ of preliminary injunction against private respondents, Deputy Sheriffs Marino Cachero and Rodolfo Lescano and the Registry of Deeds of Quezon City alleging among others alleged irregularity and lack of notice in the extra-judicial foreclosure proceedings subject of the real estate mortgage. In the meantime, a temporary restraining order was issued by the trial court. The trial court issued a writ of preliminary injunction enjoining private respondents, the Deputy Sheriffs and the Registry of Deeds of Quezon City from causing the issuance of a final deed of sale and consolidation of ownership of the subject property in favor of the De Guzman spouses. Spouses de Guzman filed with the respondent Court of Appeals a petition for certiorari seeking annulment of the trial court's order, which granted the issuance of a preliminary injunction. the respondent court granted the petition and annulled the assailed writ of preliminary injunction. Teresita Idolor filed her motion for reconsideration which was denied. Hence this petition for review on certiorari filed by petitioner Teresita V. Idolor. Issue: whether or not the respondent Court of Appeals erred in ruling that petitioner has no more proprietary right to the issuance of the writ of injunction. Held: Injunction is a preservative remedy aimed at protecting substantive rights and interests.6 Before an injunction can be issued, it is essential that the following requisites be present: 1) there must be aright in esse or the existence of a right to be protected; 2) the act against which the injunction is to be directed is a violation of such right. Hence the existence of a right violated, is a prerequisite to the granting of an injunction. Injunction is not designed to protect contingent or future rights. Failure to establish either the existence of a clear and positive right which should be judicially protected through the writ of injunction or that the defendant has committed or has attempted to commit any act which has endangered or tends to endanger the existence of said right, is a sufficient ground for denying the injunction. 8 The controlling reason for the existence of the judicial power to issue the writ is that the court may thereby prevent a threatened or continuous irremediable injury to some of the parties before their claims can be thoroughly investigated and advisedly adjudicated.9 It is to be resorted to only when there is a pressing necessity to avoid injurious consequences which cannot be remedied under any standard of compensation.10 In the instant case, we agree with the respondent Court that petitioner has no more proprietary right to speak of over the foreclosed property to entitle her to the issuance of a writ of injunction. When petitioner filed her complaint for annulment of sheriff's sale against private respondents with prayer for the issuance of a writ of preliminary injunction, she failed to show sufficient interest or title in the property sought to be protected as her right of redemption had already expired. Gustilo vs Real Facts: Gustilo charged respondent Judge Ricardo S. Real, Sr for gross misconduct, gross incompetence, gross ignorance of the law, and violation of the Anti-Graft and Corrupt Practices when the respondent judge issued a temporary restraining order (TRO) and annulled the proclamation of complainant as the duly elected punong barangay of Punta Mesa, Manapla and issued a second TRO "to maintain the status quo between the contending parties." Issue: Whether or not the issuance of TRO is valid? Held: Before an injunctive writ can be issued, it is essential that the following requisites be present: (1) there must be aright in esse or the existence of a right to be protected; and (2) the act against which injunction to be directed is a violation of such right.11 The onus probandi is on movant to show that there exists a right to be protected, which is directly threatened by the act sought to be enjoined. Further, there must be a showing that the invasion of the right is material and substantial and that there is

an urgent and paramount necessity for the writ to prevent a serious damage.12 In this case, complainant had been duly proclaimed as the winning candidate for punong barangay. He had taken his oath of office. Unless his election was annulled, he was entitled to all the rights of said office. We do not see how the complainant's exercise of such rights would cause an irreparable injury or violate the right of the losing candidate so as to justify the issuance of a temporary restraining order "to maintain the status quo. Lagrosas vs Bristol-Myers Facts: Michael J. Lagrosas is a territory manager of Bristol-Myers Squibb (Phil.), Inc. Ma. Dulcinea S. Lim, also a Territory Manager and Lagrosas' former girlfriend, attended a district meeting of territory managers at McDonald's Alabang Town Center. After the meeting, she dined out with her friends. She left her car at McDonald's and rode with Cesar R. Menquito, Jr. When they returned to McDonald's, Menquito and Lagrosas had a confrontation and when Lim intervened, she was accidentally hit by Lagrosas with a steering wheel lock. Thereafter, after a disciplinary hearing, Bristol-Myers dismissed Lagrosas effective immediately. Lagrosas then filed a complaint [8] for illegal dismissal, non-payment of vacation and sick leave benefits, 13th month pay, attorney's fees, damages and fair market value of his Team Share Stock Option Grant. Labor Arbiter Renaldo O. Hernandez rendered a Decision [9] in NLRC case declaring the dismissal illegal. He noted that while Lagrosas committed a misconduct, it was not connected with his work. On appeal in NLRC, the decision was affirmed. Later, Labor Arbiter Hernandez issued a writ of execution. [15] Notices of garnishment were then served upon the Philippine British Assurance Co., Inc. for the supersedeas bond posted by Bristol-Myers and the Bank of the Philippine Islands for the balance of the judgment award. BristolMyers moved to quash the writ of execution contending that it timely filed a petition for certiorari with the Court of Appeals. The appellate court gave due course to Bristol-Myers' petition and issued a temporary restraining order (TRO) [17] enjoining the enforcement of the writ of execution and notices of garnishment. Upon the expiration of the TRO, the appellate court issued a writ of preliminary injunction. Bristol-Myers then moved to discharge and release the TRO cash bond. It argued that since it has posted an injunction cash bond, the TRO cash bond should be legally discharged and released. The appellate court held that upon the expiration of the TRO, the cash bond intended for it also expired. Thus, the discharge and release of the cash bond for the expired TRO is proper. But the appellate court disallowed the discharge of the injunction cash bond since the writ of preliminary injunction was issued pendente lite. Since there is a pending appeal with the Supreme Court, the Decision is not yet final and executory. Issue: Did the Court of Appeals err in disallowing the discharge and release of the injunction cash bond? Held: it is settled that 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. Its sole aim is to preserve the status quo until the merits of the case can be heard fully. A preliminary injunction may be granted only when, among other things, the applicant, not explicitly exempted, files with the court where the action or proceeding is pending, a bond executed to the party or person enjoined, in an amount to be fixed by the court, to the effect that the applicant will pay such party or person all damages which he may sustain by reason of the injunction or temporary restraining order if the court should finally decide that the applicant was not entitled thereto. Upon approval of the requisite bond, a writ of preliminary injunction shall be issued. The injunction bond is intended as a security for damages in case it is finally decided that the injunction ought not to have been granted. Its principal purpose is to protect the enjoined party against loss or damage by reason of the injunction, and the bond is usually conditioned accordingly. In this case, the Court of Appeals issued the writ of preliminary injunction to enjoin the implementation of the writ of execution and notices of garnishment "pending final resolution of this case or unless the [w]rit is sooner lifted by the Court." By its Decision dated January 28, 2005, the appellate court disposed of

the case by granting Bristol-Myers' petition and reinstating the Decision dated September 24, 2002 of the NLRC which dismissed the complaint for dismissal. It also ordered the discharge of the TRO cash bond and injunction cash bond. Thus, both conditions of the writ of preliminary injunction were satisfied. Notably, the appellate court ruled that Lagrosas had no right to the monetary awards granted by the labor arbiter and the NLRC, and that the implementation of the writ of execution and notices of garnishment was properly enjoined. This in effect amounted to a finding that Lagrosas did not sustain any damage by reason of the injunction. To reiterate, the injunction bond is intended to protect Lagrosas against loss or damage by reason of the injunction only. Contrary to Lagrosas' claim, it is not a security for the judgment award by the labor arbiter. RECEIVERSHIP Aguilar vs Manila Banking Corporation Facts: Petitioners obtained a P600,000.00 loan from the Manila Banking Corporation (respondent), secured by a real estate. When petitioners failed to pay their obligation, the mortgaged property was extra-judicially foreclosed. Respondent was the winning bidder at public auction sale. Thereafter, instead of redeeming the property, petitioners filed a complaint for annulment of the foreclosure sale of the property before the Regional Trial Court. While the case was pending, the parties entered into a compromise agreement. Under the Compromise Agreement dated January 23, 1987, the petitioners admitted the validity of the extra-judicial foreclosure and agreed to purchase the property from respondent for P2,548,000.00. Parties agreed that the amount of P100,000.00 shall be payable upon execution of the agreement and the balance of P2,448,000.00, which shall earn twenty-six per cent (26%) interest per annum, shall be payable in eighteen installments. Petitioners failed to pay the balance of P2,448,000.00 within the eighteen-installment period from February 23, 1987 to July 27, 1988. A year and three months later, or on October 20, 1989, respondent filed a Motion for Issuance of Writ of Execution to enforce the Decision dated January 30, 1987. petitioners filed a Manifestation praying for deferment of the enforcement of the writ of execution until July 31, 1990 because petitioners have a pending proposal for the settlement of their judgment debt. And to evade the implementation of the writ, petitioners filed on December 20, 1991 an Ex-Parte Motion to Recall the Court's Order dated December 5, 1991 claiming that their obligation was novated by the Letter dated June 7, 1991 from respondent's Statutory Receiver. Thereafter, respondent filed a Manifestation and Motion for Issuance of Alias Writ of Execution manifesting that the Letter dated June 7, 1991 did not novate the Decision dated January 30, 1987 but was a mere accommodation of the petitioners' request for a liberal mode of payment of their account and petitioners still failed to comply with such approved mode of payment. RTC Branch 165 issued its Order which resolved the pending motions with the Court. With respect to petitioner's ex-parte motion to recall, the Court said that for failure to comply with Sections 4, 5 and 6 of Rule 15 of the Revised Rules of Court and considering the nature of petitioners' motion, it treated petitioner's motion as a mere scrap of paper. Petitioners appealed before the CA but it was denied.hence, petition for review. Issue: whether respondent's receivership is a supervening event that rendered execution of the Decision dated January 30, 1987 impossible, if not unjust; that since a bank under receivership is relieved of its obligation to pay interest on the deposits of its depositors, they (petitioners) are also not obliged to pay interest on a loan due it and interest shall commence again only after respondent's resumption of banking operations. Held: On the arguments relating to the effect of respondent's receivership, petitioners brought this matter for the first time in RTC Branch 165 in their Omnibus Motion dated March 5, 2001, fourteen years after respondent was placed under receivership and was ordered to close operation in 1987. The belated invocation of such circumstance speaks strongly of the staleness of their claim. Besides, it would be absurd to adopt petitioners' position that they are not obliged to pay interest on their obligation when respondent was placed under receivership. When

a bank is placed under receivership, it would only not be able to do new business, that is, to grant new loans or to accept new deposits. However, the receiver of the bank is in fact obliged to collect debts owing to the bank, which debts form part of the assets of the bank.71 Thus, petitioners' obligation to pay interest subsists even when respondent was placed under receivership. The respondent's receivership is an extraneous circumstance and has no effect on petitioners' obligation. Larrobis, Jr vs Philippine Veterans Bank Facts: Petitioner spouses contracted a monetary loan with respondent Philippine Veterans Bank, evidenced by a promissory note, due and demandable on February 27, 1981, and secured by a Real Estate Mortgage executed on their lot together with the improvements thereon. On March 23, 1985, the respondent bank went bankrupt and was placed under receivership/liquidation by the Central Bank from April 25, 1985 until August 1992. On August 23, 1985, the bank, through Francisco Go, sent the spouses a demand letter which pertains to the insurance premiums advanced by respondent bank over the mortgaged property of petitioners. On August 23, 1995, more than fourteen years from the time the loan became due and demandable, respondent bank filed a petition for extrajudicial foreclosure of mortgage of petitioners property. On October 18, 1995, the property was sold in a public auction by Sheriff Arthur Cabigon with Philippine Veterans Bank as the lone bidder. On April 26, 1996, petitioners filed a complaint with the RTC, Cebu City, to declare the extra-judicial foreclosure and the subsequent sale thereof to respondent bank null and void. On April 17, 1998, the RTC dismissed the complaint on the ground that defendant bank was placed under receivership by the Central Bank from April 1985 until 1992. The defendant bank was given authority by the Central Bank to operate as a private commercial bank and became fully operational only on August 3, 1992. From April 1985 until July 1992, defendant bank was restrained from doing its business. The defendant banks right to foreclose the mortgaged property prescribes in ten (10) years but such period was interrupted when it was placed under receivership. Article 1154 of the New Civil Code to this effect provides: "The period during which the obligee was prevented by a fortuitous event from enforcing his right is not reckoned against him." Issue: Whether or not the period within which the respondent bank was placed under receivership and liquidation proceedings may be considered a fortuitous event which interrupted the running of the prescriptive period in bringing actions Held: Respondents claims that because of a fortuitous event, it was not able to exercise its right to foreclose the mortgage on petitioners property; and that since it was banned from pursuing its business and was placed under receivership from April 25, 1985 until August 1992, it could not foreclose the mortgage on petitioners property within such period since foreclosure is embraced in the phrase "doing business," are without merit. While it is true that foreclosure falls within the broad definition of "doing business," that is: a continuity of commercial dealings and arrangements and contemplates to that extent, the performance of acts or words or the exercise of some of the functions normally incident to and in progressive prosecution of the purpose and object of its organization. it should not be considered included, however, in the acts prohibited whenever banks are "prohibited from doing business" during receivership and liquidation proceedings. This we made clear in Banco Filipino Savings & Mortgage Bank vs. Monetary Board, Central Bank of the Philippines24 where we explained that: Section 29 of the Republic Act No. 265, as amended known as the Central Bank Act, provides that when a bank is forbidden to do business in the Philippines and placed under receivership, the person designated as receiver shall immediately take charge of the banks assets and liabilities, as expeditiously as possible, collect and gather all the assets and administer the same for the benefit of its creditors, and represent the bank personally or through counsel as he may retain in all actions or proceedings for or against the institution, exercising all the powers necessary for these purposes including, but not limited

to, bringing and foreclosing mortgages in the name of the bank. And in Provident Savings Bank vs. Court of Appeals, we further stated that: When a bank is prohibited from continuing to do business by the Central Bank and a receiver is appointed for such bank, that bank would not be able to do new business, i.e., to grant new loans or to accept new deposits. However, the receiver of the bank is in fact obliged to collect debts owing to the bank, which debts form part of the assets of the bank. The receiver must assemble the assets and pay the obligation of the bank under receivership, and take steps to prevent dissipation of such assets. Accordingly, the receiver of the bank is obliged to collect pre-existing debts due to the bank, and in connection therewith, to foreclose mortgages securing such debts. This is consistent with the purpose of receivership proceedings, i.e., to receive collectibles and preserve the assets of the bank in substitution of its former management, and prevent the dissipation of its assets to the detriment of the creditors of the bank. It is not disputed that Philippine Veterans Bank was placed under receivership by the Monetary Board of the Central Bank by virtue of Resolution No. 364 on April 25, 1985, pursuant to Section 29 of the Central Bank Act on insolvency of banks. There is also no truth to respondents claim that it could not continue doing business from the period of April 1985 to August 1992, the time it was under receivership. As correctly pointed out by petitioner, respondent was even able to send petitioners a demand letter, through Francisco Go, on August 23, 1985 for "accounts receivable in the total amount of P6,345.00 as of August 15, 1984" for the insurance premiums advanced by respondent bank over the mortgaged property of petitioners. How it could send a demand letter on unpaid insurance premiums and not foreclose the mortgage during the time it was "prohibited from doing business" was not adequately explained by respondent. As we held in Philippine Veterans Bank vs. NLRC, a labor case which also involved respondent bank, all the acts of the receiver and liquidator pertain to petitioner, both having assumed petitioners corporate existence. Petitioner cannot disclaim liability by arguing that the non-payment of MOLINAs just wages was committed by the liquidators during the liquidation period.36 However, the bank may go after the receiver who is liable to it for any culpable or negligent failure to collect the assets of such bank and to safeguard its assets. REPLEVIN JOSE S. OROSA and MARTHA P. OROSA, petitioners, vs. HON. COURT OF APPEALS, FCP CREDIT CORPORATION Facts: On September 28, 1983, petitioner purchased the subject motor vehicle on installment from Fiesta Motor Sales Corporation. He executed and delivered to Fiesta Motor Sales Corp. a promissory note payable in monthly installments. To secure payment, petitioner executed a chattel mortgage over the subject motor vehicle in favor of Fiesta Motor. On September 28, 1983, Fiesta Motor Sales assigned the promissory note and chattel mortgage to private respondent FCP Credit Corporation. The complaint further alleged that petitioner failed to pay part of the installment which fell due. Consequently, private respondent FCP Credit Corporation demanded from petitioner payment of the entire outstanding balance of the obligation with accrued interest and to surrender the vehicle which petitioner was allegedly detaining. The trial court dismissed the complaint for FCP had no reason to file the present action since petitioner already paid the installments which are the sole bases of the complaint. The lower court declared that private respondent was not entitled to the writ of replevin, and was liable to petitioner for actual damages under the replevin bond it filed. a "Supplemental Decision" was rendered by the trial court ordering private respondent's surety, Stronghold Insurance Co., Inc. to jointly and severally [with private respondent] return to petitioner the 1983 Ford Laser 1.5 Sedan or its equivalent in kind or in cash and to pay the damages specified in the main decision to the extent of the value of the replevin bond. Issue: whether writ of replevin in returning the car or its equivalent is proper.

Held: No because petitioner had not yet fully paid the purchase price. To sustain lower courts decision would tantamount to unjust enrichment. The Court of Appeals was correct when it instead ordered private respondent to return, not the car itself, but only the amount equivalent to the fourteen installments actually paid with interest. SMART vs. ASTORGA Facts: Astorga was employed by SMART. When the SMART launched an organizational alignment to achieve more efficient operations it abolished Astorgas division. Astorga was offered supervisory position but refused to accept after performance evaluation was conducted because the position carried low salary. Astorga filed a complaint for illegal dismissal. SMART averred that Astorga was dismissed on the ground of redundancy. Meanwhile, SMART demanded from Astorga to pay the market value of Honda Civic Sedan which was given to her under the companys car plan program. The writ of replevin was issued after Astorga refused to return the said car. Astorga argued that RTC has no jurisdiction because the subject car was the result of benefit arising from employment contract. Issue: Whether RTC has no jurisdiction over the complaint for recovery of the car. Held: No. The RTC rightfully assumed jurisdiction over the suit and acted well within its discretion in denying Astorgas motion to dismiss. SMARTs demand for payment of the market value of the car or, in the alternative, the surrender of the car, is not a labor, but a civil, dispute. It involves the relationship of debtor and creditor rather than employee-employer relations. As such, the dispute falls within the jurisdiction of the regular courts. In Basaya, Jr. v. Militante, Replevin is a possessory action, the gist of which is the right of possession in the plaintiff. The primary relief sought therein is the return of the property in specie wrongfully detained by another person. It is an ordinary statutory proceeding to adjudicate rights to the title or possession of personal property. The question of whether or not a party has the right of possession over the property involved and if so, whether or not the adverse party has wrongfully taken and detained said property as to require its return to plaintiff, is outside the pale of competence of a labor tribunal and beyond the field of specialization of Labor Arbiters. SERVICEWIDE SPECIALISTS, INCORPORATED, Petitioner, vs. THE HON. COURT OF APPEALS, JESUS PONCE, and ELIZABETH PONCE, Respondents. Facts: Sometime in 1975, respondent spouses Atty. Jesus and Elizabeth Ponce bought on installment a Holden Torana vehicle from C. R. Tecson Enterprises. They executed a promissory note and a chattel mortgage on the vehicle dated December 24, 1975 in favor of the C. R. Tecson Enterprises to secure payment of the note. On the same date, C.R. Tecson Enterprises, in turn, executed a deed of assignment of said promissory note and chattel mortgage in favor of Filinvest Credit Corporation with the conformity of respondent spouses. The latter were aware of the endorsement of the note and the mortgage to Filinvest as they in fact availed of its financing services to pay for the car. In 1976, respondent spouses transferred and delivered the vehicle to Conrado R. Tecson by way of sale with assumption of mortgage. Subsequently, in 1978, Filinvest assigned all its rights and interest over the same promissory note and chattel mortgage to petitioner Servicewide Specialists Inc. without notice to respondent spouses. Due to the failure of respondent spouses to pay the installments under the promissory note from October 1977 to March 1978, and despite demands to pay the same or to return the vehicle petitioners filed complaint for replevin with damages. Respondent spouses denied any liability claiming they had already returned the car to Conrado Tecson pursuant to the Deed of Sale with Assumption of Mortgage. Thus, they filed a third party complaint against Conrado Tecson praying that in case they are adjudged liable to petitioner, Conrado Tecson should reimburse them. RTC found spouses guilty but was reversed by CA on the ground of absence of notification on the assignment of PN and CM. Issue: whether the assignment of a credit requires notice to the debtor in order to bind him.

Held: Since the alienation by the respondent spouses of the vehicle occurred prior to the assignment of credit to petitioner, it follows that the former were not bound to obtain the consent of the latter as it was not yet an assignee of the credit at the time of the alienation of the mortgaged vehicle. When Tecson Enterprises assigned the promissory note and the chattel mortgage to Filinvest, it was made with respondent spouses tacit approval. When Filinvest in turn, as assignee, assigned it further to petitioner, the latter should have notified the respondent spouses of the assignment in order to bind them. This, they failed to do. Insofar as Filinvest is concerned, the debtor is still respondent spouses because of the absence of its consent to the sale. Worse, Filinvest was not even notified of such sale. Having subsequently stepped into the shoes of Filinvest, petitioner acquired the same rights as the former had against respondent spouses. The defenses that could have been invoked by Filinvest against the spouses can be successfully raised by petitioner. Therefore, for failure of respondent spouses to obtain the consent of Filinvest thereto, the sale of the vehicle to Conrado R. Tecson was not binding on the former. When the credit was assigned by Filinvest to petitioner, respondent spouses stood on record as the debtormortgagor. KENNETH HAO, COMPLAINANT, VS. ABE C. ANDRES, SHERIFF IV, REGIONAL TRIAL COURT, BRANCH 16, DAVAO CITY RESPONDENT. Facts: Complainant Hao is one of the defendants in a civil case for replevin entitled "Zenaida Silver, doing trade and business under the name and style ZHS Commercial v. Loreto Hao, Atty. Amado Cantos, Kenneth Hao and John Does," pending before the RTC of Davao City. On October 17, 2005, Judge Fuentes issued an Order of Seizure against 22 motor vehicles allegedly owned by the complainant. Andres was able to seize 9 motor vehicles. Hao in his complaint alleged that Andres seized the vehicles in an oppressive manner. The cease and desist order against the seizure was issued on October 21, 2005 when the counter-replevin bond was approved. On October 24, 2005, 8 of 9 seized motor vehicles were missing. Andres was found guilty of serious negligence in the custody of nine motor by the investigating judge. Issue: whether the implementation of replevin is proper. Held: No. Pursuant to Rule 60, being an officer of the court, Andres must be aware that there are well-defined steps provided in the Rules of Court regarding the proper implementation of a writ of replevin and/or an order of seizure. The Rules, likewise, is explicit on the duty of the sheriff in its implementation. First, the rules provide that property seized under a writ of replevin is not to be delivered immediately to the plaintiff. In accordance with the said rules, Andres should have waited no less than five days in order to give the complainant an opportunity to object to the sufficiency of the bond or of the surety or sureties thereon, or require the return of the seized motor vehicles by filing a counterbond. This, he failed to do. Silver was already in possession of the nine seized vehicles immediately after seizure, or no more than three days after the taking of the vehicles. Thus, Andres committed a clear violation of Section 6, Rule 60 of the Rules of Court with regard to the proper disposal of the property. It matters not that Silver was in possession of the seized vehicles merely for safekeeping as stated in the depository receipts. The rule is clear that the property seized should not be immediately delivered to the plaintiff, and the sheriff must retain custody of the seized property for at least five days. From the moment an order of delivery in replevin is executed by taking possession of the property specified therein, such property is in custodia legis. As legal custodian, it is Andres' duty to safekeep the seized motor vehicles. Hence, when he passed his duty to safeguard the motor vehicles to Silver, he committed a clear neglect of duty. Despite the cease and desist order, Andres failed to return the motor vehicles to their lawful owners. When a writ is placed in the hands of a sheriff, it is his duty, in the absence of any instructions to the contrary, to proceed with reasonable celerity and promptness to execute it according to its mandate. However, the prompt implementation of an order of seizure is called for only in instances where there is no question regarding the right of

the plaintiff to the property. Where there is such a question, the prudent recourse for Andres is to desist from executing the order and convey the information to his judge and to the plaintiff. G.R. No. 165895 June 5, 2009 TERLYNGRACE RIVERA, Petitioner vs. VARGAS, Respondent. FLORENCIO L.

Facts: On February 24, 2003, respondent Florencio Vargas (Vargas) filed a complaint against petitioner and several John Does before RTC Cagayan, for the recovery of a 150 T/H rock crushing plant located in Sariaya, Quezon. Vargas claims ownership of the said equipment, having purchased and imported the same directly from Hyun Dae Trading Co., in Seoul, South Korea in 1993. The equipment was allegedly entrusted to petitioners husband, Jan T. Rivera, who died sometime in late 2002, as caretaker of respondents construction aggregates business in Batangas. According to Vargas, petitioner failed to return the said equipment after her husbands death despite his repeated demands, thus forcing him to resort to court action. Summons dated February 24, 2003 was served upon petitioner through her personal secretary on April 28, 2003 at her residence in Paraaque City. Interestingly, however, the writ of replevin was served upon and signed by a certain Joseph Rejumo, the security guard on duty in petitioners crushing plant in Sariaya, Quezon on April 29, 2003, contrary to the sheriffs return stating that the writ was served upon Rivera. Rivera filed her answer, manifestation, and motion for the acceptance of petitioners redelivery bond. In her answer, petitioner countered that the rock-crushing plant was ceded in favor of her husband as his share following the dissolution of the partnership formed between Jan Rivera and respondents wife, Iluminada Vargas, on May 28, 1998, while the partnerships second rock-crushing plant in Cagayan was ceded in favor of Iluminada. She further averred that from the time that the partnership was dissolved sometime in 2000 until Jan Riveras death in late 2002, it was petitioners husband who exercised ownership over the said equipment without any disturbance from respondent. On May 12, 2003, the RTC issued an Order disapproving petitioners redelivery bond application for failure to comply with the requirements under Sections 5 and 6 of Rule 60 of the Rules of Court. Without directly saying so, the RTC faulted petitioner for her failure to file the application for redelivery bond within five (5) days from the date of seizure as provided in the Rules of Court. Petitioner argues that the RTC committed grave abuse of discretion in denying her counterbond on the ground that it was filed out of time. She contends that the mandatory five-day period did not even begin to run in this case due to the improper service of the writ of replevin, contrary to Section 4 of Rule 60. Issue: Whether there is improver service of the writ of replevin. Held: Yes. Replevin is one of the most ancient actions known to law, taking its name from the object of its process. It originated in common law as a remedy against the wrongful exercise of the right of distress for rent and, according to some authorities, could only be maintained in such a case. But by the weight of authority, the remedy is not and never was restricted to cases of wrongful distress in the absence of any statutes relating to the subject, but is a proper remedy for any unlawful taking. "Replevied," used in its technical sense, means delivered to the owner, while the words "to replevy" means to recover possession by an action of replevin. Replevin is both a form of principal remedy and of 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 to hold it pendente lite.28 The action is primarily possessory in nature and generally determines nothing more than the right of possession. A person seeking a remedy in an action for replevin must follow the course laid down in the statute, since the remedy is penal in nature.34 When no attempt is made to comply with the provisions of the law relating to seizure in this kind of action, the writ or order allowing the seizure is erroneous and may be set aside on motion35 by the adverse party. Be it noted, however, that a motion to quash the

writ of replevin goes to the technical regularity of procedure, and not to the merits of the case36 in the principal action. The process regarding the execution of the writ of replevin in Section 4 of Rule 60 is unambiguous: the sheriff, upon receipt of the writ of replevin and prior to the taking of the property, must serve a copy thereof to the adverse party (petitioner, in this case) together with the application, the affidavit of merit, and the replevin bond.37The reasons are simple, i.e., to provide proper notice to the adverse party that his property is being seized in accordance with the courts order upon application by the other party, and ultimately to allow the adverse party to take the proper remedy consequent thereto. If the writ was not served upon the adverse party but was instead merely handed to a person who is neither an agent of the adverse party nor a person authorized to receive court processes on his behalf, the service thereof is erroneous and is, therefore, invalid, running afoul of the statutory and constitutional requirements. Under these circumstances, no right to seize and to detain the property shall pass, the act of the sheriff being both unlawful and unconstitutional. The RTC, however, denied the redelivery bond for having been filed beyond the five-day mandatory period prescribed in Sections 5 and 6 of Rule 60.42 But since the writ was invalidly served, petitioner is correct in contending that there is no reckoning point from which the mandatory five-day period shall commence to run. The writ must also satisfy proper service in order to be valid and effective: i.e. it should be directed to the officer who is authorized to serve it; and it should be served upon the person who not only has the possession or custody of the property involved but who is also a party or agent of a party to the action. Navaro vs. Escobido GR No. 153788, November 27, 2009 FACTS: KARGO ENTERPRISES is in the business of, among others, buying and selling motor vehicles, including hauling trucks and other heavy equipment. Karen Go who is married to Glen Go filed a complaint against Roger Navarro for the cause of action based on the lease agreement entered into between the parties. The subject of the controversy is the Fuso mounted with crane vehicle. Navarro delivered unto plaintiff 6 post dated checks in the amount of P66,332 each which represents the rentals of the vehicle. Unfortunately, 2 checks were dishonerd by the bank. Karen Go demanded the balance which was due against Navaro or to return the vehicle. A second complaint was then filed by Karen Go which alleged almost the same allegations contained in the first complaint except the subject vehicle and the date. Navaro then issued 3 post dated checks in the amount of P100,000 each but the third check was dishonored for insufficiency of funds. On October 12 and 14, 1998, the RTC issued in both cases writs of replevin, as a result the Sheriff seized the 2 vehicle and delivered the same to the possession of Karen Go. In Navaros motion both cases were consolidated. In its may 2008 order the RTC dismissed the complaint on the ground that the complaint states no cause of action. Karen Go filed a MR which was granted by the RTC. RTC denied Navaros MR. Navaro filed a pettion for certiorari with the CA but the CA affirmed the RTCs decision. Navaros MR was likewise been denied. In his present petition, Navaro alleged that the complaints were premature because no prior demand was made on him to comply with the provisions of the lease agreements before the complaints for replevin were filed. ISSUE:Whether prior demand is necessary before a writ of replevin can be issued HELD: For a writ of replevin to issue, all that the applicant must do is to file an affidavit and bond, pursuant to Section 2, Rule 60 of the Rules, which states: Sec. 2. Affidavit and bond. The applicant must show by his own affidavit or that of some other person who personally knows the facts: (a) That the applicant is the owner of the property claimed, particularly describing it, or is entitled to the possession thereof;(b) That the property is wrongfully detained by the adverse party, alleging the cause of detention thereof according to the best of his knowledge, information, and

belief;(c) That the property has not been distrained or taken for a tax assessment or a 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; and(d) The actual market value of the property. The applicant must also give a bond, executed to the adverse party in double the value of the property as stated in the affidavit aforementioned, for the return of the property to the adverse party if such return be adjudged, and for the payment to the adverse party of such sum as he may recover from the applicant in the action. Nothing in these provisions which requires the applicant to make a prior demand on the possessor of the property before he can file an action for a writ of replevin. Thus, prior demand is not a condition precedent to an action for a writ of replevin. More importantly, Navarro is no longer in the position to claim that a prior demand is necessary, as he has already admitted in his Answers that he had received the letters that Karen Go sent him, demanding that he either pay his unpaid obligations or return the leased motor vehicles. Navarros position that a demand is necessary and has not been made is therefore totally unmeritorious. SUPPORT PENDENTE LITE DE Asis vs. CA [G.R. No. 127578. February 15, 1999] FACTS: On October 14, 1988, Vircel D. Andres, in her capacity as the legal guardian of the minor, Glen Camil Andres de Asis, brought an action for maintenance and support against Manuel de Asis, before the RTC of Quezon City, alleging that Manuel de Asis is the father of Glen Camil Andres de Asis, and the former refused and/or failed to provide for the maintenance of the latter, despite repeated demands. Manuel de asis denied his paternity of the said minor and he cannot therefore be required to provide support for him. On July 4, 1989, Vircel D. Andres, through counsel, sent in a manifestation stating that Manuel de asis made a judicial declaration that Glen Camil was not his child therefore he is not entitle to support the child. With this judicial declaration, it is a useless exercise to claim for support from Manuel. Based on the circumstances, it will be practical that Vircel D. Andres will withdraw the complaint subject to the condition that Manuel de asis will not file a counter-claim. RTC dismissed the case w/ prejudice. On September 7, 1995, another Complaint for maintenance and support was brought against Manuel A. de Asis, in the name of Glen Camil Andres de Asis, represented by her legal guardian/mother, Vircel D. Andres. before the Regional Trial Court of Kalookan, praying that judgment be rendered ordering to pay the plaintiff the sum of not less than P2,000 per month for every month since June 1, 1987 as support in arrears which defendant failed to provide.To give plaintiff a monthly allowance of P5,000.00 to be paid in advance on or before the 5th of each and every month;To give plaintiff by way of support pendente lite, a monthly allowance of P5,000.00 per month, the first monthly allowance to start retroactively from the first day of this month and the subsequent ones to be paid in advance on or before the 5th of each succeeding month. On October 8, 1993, Manuel moved to dismiss the Complaint on the ground of res judicata, alleging that Civil Case C16107 is barred by the prior judgment which dismissed with prejudice Civil Case Q-88-935. The trial court ruled that res judicata is inapplicable in an action for support for the reason that renunciation or waiver of future support is prohibited by law. Manuels MR is also denied.Manuel filed with the CA a Petition for Certiorari. The CA found the said Petition devoid of merit and dismissed the same. Manuel contends that the manifestation in civil case Q-88-935, in effect, admitted the lack of filiation between him and the minor child, which admission binds the complainant, and since the obligation to give support is based on the existence of paternity and filiation between the child and the putative parent, the lack thereof negates the right to claim for support. Thus, petitioner maintains that the dismissal of the Complaint by the lower court on the basis of the said manifestation bars the present action for support, especially so

because the order of the trial court explicitly stated that the dismissal of the case was with prejudice. ISSUE: Whether an action for support cannot be barred by res judicata HELD: The petition is without merit. The new Civil Code provides that the allowance for support is provisional because the amount may be increased or decreased depending upon the means of the giver and the needs of the recipient (Art. 297); and that the right to receive support cannot be renounced nor can it be transmitted to a third person; neither can it be compensated with what the recipient owes the obligator (Art. 301). Furthermore, the right to support can not be waived or transferred to third parties and future support cannot be the subject of compromise. The reason behind the law is the right to support being founded upon the need of the recipient to maintain his existence, he is not entitled to renounce or transfer the right for this would mean sanctioning the voluntary giving up of life itself. To allow renunciation or transmission or compensation of the family right of a person to support is virtually to allow either suicide or the conversion of the recipient to a public burden. This is contrary to public policy. The manifestation sent in by respondents mother in the first case, which acknowledged that it would be useless to pursue its complaint for support, amounted to renunciation as it severed the vinculum that gives the minor, Glen Camil, the right to claim support from his putative parent, the petitioner. Furthermore, the agreement entered into between the petitioner and respondents mother for the dismissal of the complaint for maintenance and support conditioned upon the dismissal of the counterclaim is in the nature of a compromise which cannot be countenanced. It violates the prohibition against any compromise of the right to support. It is true that in order to claim support, filiation and/or paternity must first be shown between the claimant and the parent. However, paternity and filiation or the lack of the same is a relationship that must be judicially established and it is for the court to declare its existence or absence. It cannot be left to the will or agreement of the parties. People vs. Manahan [G.R. No. 128157. September 29, 1999] FACTS: Teresita Tibigar, 16 years old, worked at the Espiritu Canteen in Dagupan City. Manuel Manahan is the brother-in-law of Josefina Espiritu, owner of the canteen. His wife Primadonna is the sister of Josefina Espiritu. Manuel and Primadonna temporarily reside at the canteen together with the family of Josefina as Primadonna was then pregnant. On 5 January 1995, at about two oclock in the morning, Teresita who was asleep was suddenly awakened when she felt someone beside her. Upon opening her eyes she saw accused Manuel Manahan as he immediately placed himself on top of her. Manuel Manahan, by the use of force succeeded in having carnal knowledge over Teresita. Manuel then threatened Teresitas life in case she will report such incident. Teresita went home to her parents in pangasinan. The sexual encounter resulted in her pregnancy. Afterwards, her parents learned about the incident which led them to the filing of a criminal offense of rape against Manuel Manahan. On 2 October 1995, she gave birth to a healthy baby girl and christened her Melanie Tibigar. Manuel was convicted by the RTC of Dagupan on the crime charged. ISSUE: Whether the accused can be ordered to acknowledge and provide support for Melanie Tibigar HELD: On the matter of acknowledgment and support of the child, a correction of the view of the court a quo is in order. Article 345 of The Revised Penal Code provides that persons guilty of rape shall also be sentenced to "acknowledge the offspring, unless the law should prevent him from doing so," and "in every case to support the offspring." In the case before us, compulsory acknowledgment of the child Melanie Tibigar is not proper there being a legal impediment in doing so as it appears that the accused is a married man. As pronounced by this Court in People v. Guerrero,"the rule is that if the rapist is a

married man, he cannot be compelled to recognize the offspring of the crime, should there be any, as his child, whether legitimate or illegitimate." Consequently, that portion of the judgment under review is accordingly deleted. In any case, we sustain that part ordering the accused to support the child as it is in accordance with law. Lopez vs Court of Appeals Facts: The Regional Trial Court (RTC) of Malabon a decision declaring the nullity of marriage between Cherry Pie Lopez and Alberto Lopez a.k.a Cesar Lopez (petitioner). The decision became final and executory based on a certification1 dated January 5, 2001. Petitioner moved to reconsider2 the support aspect of the decision but was denied by Order of January 26, 2001. On February 8, 2001, the RTC, acting on petitioners Notice of Appeal4 filed on February 7, 2001, gave it due course and directed the transmittal of the records of the case to the Court of Appeals "as soon as possible." Petitioner paid before the RTC a total of Sixty (P60.00) Pesos as docket fees as shown by Official Receipt. For petitioners failure to pay the full amount of P520.00 docket fees, the Court of Appeals, by Resolution of March 19, 2001,6 dismissed his appeal. Petitioner filed a Motion for Reconsideration7 of the appellate courts March 19, 2001 Resolution, but it was denied by Resolution of April 26, 2001 on the grounds that the motion did not contain an affidavit or proof of service and that it did not state on its face the material dates determinative of its timeliness. Issue: Whether or not the aspect of support is final and executory. Held: The dismissal of the petition notwithstanding, petitioner is not without remedy. For as what he seeks to assail is the amount of support he was adjudged to provide, he can file a motion with the trial court for its modification since a judgment granting support never becomes final. Montefalcon vs. Vasquez [G.R. No. 165016, June 17, 2008] FACTS: In 1999, petitioner Dolores P. Montefalcon filed a Complaint for acknowledgment and support against respondent Ronnie S. Vasquez before the RTC of Naga City. Alleging that her son Laurence is the illegitimate child of Vasquez, she prayed that Vasquez be obliged to give support to co-petitioner Laurence Montefalcon, whose certificate of live birth he signed as father. According to petitioners, Vasquez only gave a total of P19,000 as support for Laurence since Laurence was born in 1993. Vasquez allegedly also refused to give him regular school allowance despite repeated demands. Petitioner Dolores added that she and Vasquez are not legally married, and that Vasquez has his own family. Vasquez was declared in default for failure to answer the service of summons (substituted). The court ordered Vasquez to acknowledge Laurence and to pay P 5000 monthly. In the same year, Vasquez surfaced. He filed a notice of appeal to which petitioners opposed. Appeal was granted by the court. Before the appellate court, he argued that the trial court erred in trying and deciding the case as it "never" acquired jurisdiction over his person, as well as in awarding P5,000-per-month support, which was allegedly "excessive and exorbitant." The appellate court granted Vasquezs contention. ISSUE: Whether he is obliged to give support to co-petitioner Laurence. HELD: YES. Article 175 of the Family Code of the Philippines mandates that illegitimate filiation may be established in the same way and on the same evidence as legitimate children. Under Article 172, appearing in the civil register or a final order; or (2) by admission of filiation in a public document or private handwritten instrument and signed by the parent concerned; or in default of these two, by open and continuous possession of the status of a legitimate child or by any other means allowed by the Rules of Court and special laws. Laurence's record of birth is an authentic, relevant and admissible piece of evidence to prove paternity and filiation. Vasquez did not deny that Laurence is his child with Dolores. He signed as father in Laurence's certificate of live birth, a public document. He supplied the data entered in it. Thus, it is a

competent evidence of filiation as he had a hand in its preparation. In fact, if the child had been recognized by any of the modes in the first paragraph of Article 172, there is no further need to file any action for acknowledgment because any of said modes is by itself a consummated act. As filiation is beyond question, support follows as matter of obligation. Petitioners were able to prove that Laurence needs Vasquez's support and that Vasquez is capable of giving such support. Dolores testified that she spent around P200,000 for Laurence; she spends P8,000 a month for his schooling and their subsistence. She told the lower court Vasquez was earning US$535 monthly based on his January 10, 2000 contract of employment with Fathom Ship Management and his seafarer information sheet. That income, if converted at the prevailing rate, would be more than sufficient to cover the monthly support for Laurence. Under Article 195 (4) of the Family Code, a parent is obliged to support his illegitimate child. The amount is variable. There is no final judgment thereof as it shall be in proportion to the resources or means of the giver and the necessities of the recipient. It may be reduced or increased proportionately according to the reduction or increase of the necessities of the recipient and the resources or means of the person obliged to support. Support comprises everything indispensable for sustenance, dwelling, clothing, medical attendance, education and transportation, in keeping with the financial capacity of the family. Under the premises, the award of P5,000 monthly support to Laurence is reasonable, and not excessive nor exorbitant. INTERPLEADER Eternal Gardens Memorial Parks Corporation vs. IAC and North Phillippine Union Mission of the Seventh Day Adventist GR NO. 73794, September 19,1988 FACTS: On October 6, 1976, Eternal gardens and Philippine Union Mission of the seventh day Adventist (MISSION for short) executed a Land Development Agreement whereby by Eternal Garden will construct at its own expense and incur the necessary improvements on the MISSIONs property and turn the property into a memorial park. The said lot will be subdivided into and sold as memorial plots, at a stipulated area and price per lot. Out of the proceeds from the sale, MISSION is entitled to receive 40% of the net gross collection from the project to be remitted monthly by Eternal Gardens to MISSION through a designated depositary trustee bank. On the same date MISSION executed in Eternal Gardens favor a Deed of Absolute Sale with Mortgage on the lots with titles involved in the land development project. The deed was supplemented by a Sale of Real Property with Mortgage and Special Conditions dated October 28, 1978. The amounts totalling about P984,110.82 which was paid by Eternal Gardens were to be considered as part of the 40% due to MISSION under the Land Development Agreement. All went well until Maysilo Estate asserted its claim of ownership over the parcel of land. Confronted with such conflicting claims, Eternal Gardens filed a complaint for interpleader against MISSION and Maysilo Estate, docketed as Special Court Case No. C-9556 of the then CFI of Rizal, Branch XII, Caloocan, alleging that in view of the conflicting claims of ownership of MISSION and Maysilo over the property which is the subject matter of the contracts, over which Eternal Graden has no claim of ownership except as a purchaser thereof, and to protect the interests of the corporation which has no interest in the subject matter of the dispute and is willing to pay whoever is entitled or declared to be the owners of said properties, the defendants should be required to interplead and litigate their several claims between themselves. An order was issued by the court requiring defendants to interplead on October 22, 1981. MISSION filed a motion to dismiss dated November 10, 1981 for lack of cause of action but also presented an answer dated November 12, 1981. The motion to dismiss was denied on January 12, 1982. The heirs of Maysilo Estate filed their own answer dated November 11, 1981 and an amended answer dated October 20, 1983 thru the estate's special receiver. The heirs of Pedro Banon filed an "Answer in

Intervention with Special and Affirmative Defenses" dated October 24, 1983, while Lilia B. Sevilla and husband Jose Seelin filed their "Answer in Cross-claim" dated October 31, 1983. The heirs of Sofia O'Farrel y Patino, et al. filed their Answer in Intervention dated November 10, 1983. MISSION presented a motion for the placing on judicial deposit the amounts due and unpaid from Eternal Gardens. The trial court denied judicial deposit on the ground that the question of ownership of the subject property must first be resolve. Thus, the contract entered by the parties was declared ineffective. Another order dated October 26, 1984 was issued amending the February 13, 1984 order and setting aside the order for MISSIONs deposit of the amounts it had previously received from Eternal Gardens.In G.R. No. 73569 it appeared that on January 11, 1985, MISSION filed a motion to dismiss the Interpleader and the claims of the Maysilo Estate and the Intervenors and to order the Eternal Gardens to comply with its Land Management with MISSION. On January 28, 1985, the trial court passed a resolution,dismissing the interpleader and consolidating the interventions filed by Pedro Banon etc. with the Maysilo estate represented by its receiver Arturo Salientes. The heirs of the Maysilo Estate moved for reconsideration of the order of dismissal, which was granted by the trial judge.A motion for Writ of Execution of the resolution of January 28, 1985 was filed by MISSION. This was denied on June 25, 1985. The said court further set the case for pre-trial and trial on July 18, 1985.It was elevated on certiorari and mandamus to the Intermediate Appellate Court , docketed as AC-G.R. Sp No. 06696 "North Philippine Union Mission of the Seventh Day Adventists, vs. Hon. Antonia Corpus-Macandog Presiding Judge, Branch CXX, Regional Trial Court, Caloocan City, Eternal Gardens Memorial Parks Corporation, and Heirs of Vicente Singson Encarnacion It was raffled to the Second Special Division. MISSION assailed the February 14, 1985 and June 25, 1985 orders as violative of due process and attended by grave abuse of discretion amounting to lack of jurisdiction. The petition was dismissed in the decision of said Appellate Court. MISSION challenged the decision in the Supreme Court in G.R. No. 73569. In its resolution dated June 11, 1986, the Supreme Court denied the petition for review on certiorari for lack of merit. Said resolution has become final and executory on July 16, 1986.Earlier in 1983, the heirs of the late spouses Vicente Singson Encarnacion and Lucila Conde filed Civil Case No. C-11836 for quieting of title with Branch CXXII, Regional Trial Court, Caloocan City, where petitioner and private respondent were named as defendants.Said case is still pending in the lower Court. In the case at bar, G.R. No. 73794, MISSION, filed a petition for certiorari with the Intermediate Appellate Court docketed as AC-G.R. No. 04869 praying that the aforementioned Orders of February 13, 1984 and October 26, 1984 of the Regional Trial Court be set aside and that an order be issued to deposit in court or in a depositor trustee bank of any and all payments, plus interest thereon, due the private respondent MISSION under the Land Development Agreement, said amounts deposited to be paid to whomever may be found later to be entitled thereto, with costs. The Intermediate Appelate Court dismissed the petition in its decision on February 27, 1985.In its Resolution promulgated on September 5, 1985, the Court however, reversed its decision ordering MISSION to deposit whatever is due from it under the Land Development Agreement with a refutable bank to be designated by the court to be the depositary trustee of the amounts to be paid whoever shall be found entitled thereto.Eternal Gardens moved for a reconsideration of the above decision but it was denied for lack of merit. Hence, this petition. On July 8,1987, the Third Division of this Court issued resolution requiring the parties to file a memoranda and to require MISSSION to deposit its accruing installments within 10 days from notice with a refutable commercial bank in a savings deposit account in the name of the Supreme Court of the Philippines. ISSUE: Whether judicial deposit made by Mission as one of the parties in interpleader case filed by eternal is valid. HELD: Under the circumstances, there appears to be no plausible reason for petitioner's objections to the deposit of the amounts in litigation after having asked for the assistance of the lower court by filing a complaint for interpleader where the deposit of aforesaid amounts is not only required by the nature of the action

but is a contractual obligation of the petitioner under the Land Development Program. As correctly observed by the Court of Appeals, the essence of an interpleader, aside from the disavowal of interest in the property in litigation on the part of the petitioner, is the deposit of the property or funds in controversy with the court. it is a rule founded on justice and equity: "that the plaintiff may not continue to benefit from the property or funds in litigation during the pendency of the suit at the expense of whoever will ultimately be decided as entitled thereto. The case at bar was elevated to the Court of Appeals on certiorari with prohibitory and mandatory injunction. Said appellate court found that more than twenty million pesos are involved; so that on interest alone for savings or time deposit would be considerable, now accruing in favor of the Eternal Gardens. Finding that such is violative of the very essence of the complaint for interpleader as it clearly runs against the interest of justice in this case, the Court of Appeals cannot be faulted for finding that the lower court committed a grave abuse of discretion which requires correction by the requirement that a deposit of said amounts should be made to a bank approved by the Court. Wack-Wack Golf and Country Club vs Lee Won Facts: Wack Wack Gold and Country Club Inc filed a complaint of Interpleader against Lee Won and Bienvenido Tan. It alleged in its complaint that the defendant Lee E. Won claims ownership of its membership fee certificate 201, by virtue of the decision rendered in civil case entitled Lee E. Won alias Ramon Lee vs. Wack Wack Golf & Country Club, Inc." and also by virtue of membership fee certificate 201-serial no. 1478 issued on October 17, 1963 by Ponciano B. Jacinto, deputy clerk of court of the said CFI of Manila, for and in behalf of the president and the secretary of the Corporation and of the People's Bank & Trust Company as transfer agent of the said Corporation, pursuant to the order of September 23, 1963 in the said case; that the defendant Bienvenido A. Tan, on the other hand, claims to be lawful owner of its aforesaid membership fee certificate 201 by virtue of membership fee certificate 201-serial no. 1199 issued to him on July 24, 1950 pursuant to an assignment made in his favor by "Swan, Culbertson and Fritz," the original owner and holder of membership fee certificate 201; , all of which have been issued as early as December 1939; that the club claims no interest whatsoever in the said membership fee certificate 201; that it has no means of determining who of the two defendants is the lawful owner thereof. The Corporation prayed that (a) an order be issued requiring Lee and Tan to interplead and litigate their conflicting claims; and (b) judgment. be rendered, after hearing, declaring who of the two is the lawful owner of membership fee certificate 201. However, The defendants moved to dismiss the complaint upon the grounds of res judicata, failure of the complaint to state a cause of action, and bar by prescription. Finding the grounds of bar by prior judgment and failure to state a cause of action well taken, the trial court dismissed the complaint, with costs against the Corporation. The petitioners appealed before the CA and contended that The trial court erred in dismissing the complaint, instead of compelling the appellees to interplead because there actually are conflicting claims between the latter with respect to the ownership of membership fee certificate 201, and, as there is not Identity of parties, of subjectmatter, and of cause of action, between civil case 26044 of the CFI of Manila and the present action, the complaint should not have been dismissed upon the ground of res judicata. The CA affirmed the decision of the trial court. Hence, petition for review. Issue: Whether or not the remedy of Interpleader was proper and filed on time? Held: A stakeholder should use reasonable diligence to hale the contending claimants to court. He need not await actual institution of independent suits against him before filing a bill of interpleader. He should file an action of interpleader within a reasonable time after a dispute has arisen without waiting to be sued by either of the contending claimants.

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Otherwise, he may be barred by laches or undue delay. But where he acts with reasonable diligence in view of the environmental circumstances, the remedy is not barred. The question in this case is: Has the Corporation in this case acted with diligence, in view of all the circumstances, such that it may properly invoke the remedy of interpleader? We do not think so. Corporation in the instant case was aware of the conflicting claims of the appellees with respect to the membership fee certificate 201 long before it filed the present interpleader suit. It had been recognizing Tan as the lawful owner thereof. It was sued by Lee who also claimed the same membership fee certificate. Yet it did not interplead Tan. It preferred to proceed with the litigation (civil case 26044) and to defend itself therein. As a matter of fact, final judgment was rendered against it and said judgment has already been executed. It is not therefore too late for it to invoke the remedy of interpleader. It has been held that a stakeholder's action of interpleader is too late when filed after judgment has been rendered against him in favor of one of the contending claimants, especially where he had notice of the conflicting claims prior to the rendition of the judgment and neglected the opportunity to implead the adverse claimants in the suit where judgment was entered. This must be so, because once judgment is obtained against him by one claimant he becomes liable to the latter. 1To now permit the Corporation to bring Lee to court after the latter's successful establishment of his rights in civil case 26044 to the membership fee certificate 201, is to increase instead of to diminish the number of suits, which is one of the purposes of an action of interpleader, with the possibility that the latter would lose the benefits of the favorable judgment. This cannot be done because having elected to take its chances of success in said civil case 26044, with full knowledge of all the fact, the Corporation must submit to the consequences of defeat. Moreover, a successful litigant cannot later be impleaded by his defeated adversary in an interpleader suit and compelled to prove his claim anew against other adverse claimants, as that would in effect be a collateral attack upon the judgment. It is generally held by the cases it is the office of interpleader to protect a party, not against double liability, but against double vexation on account of one liability. In fine, the instant interpleader suit cannot prosper because the Corporation had already been made independently liable in civil case 26044 and, therefore, its present application for interpleader would in effect be a collateral attack upon the final judgment in the said civil case; the appellee Lee had already established his rights to membership fee certificate 201 in the aforesaid civil case and, therefore, this interpleader suit would compel him to establish his rights anew, and thereby increase instead of diminish litigations, which is one of the purposes of an interpleader suit, with the possiblity that the benefits of the final judgment in the said civil case might eventually be taken away from him; and because the Corporation allowed itself to be sued to final judgment in the said case, its action of interpleader was filed inexcusably late, for which reason it is barred by laches or unreasonable delay. DECLARATORY RELIEF [G.R. No. 150806, January 28, 2008] EUFEMIA ALMEDA and ROMEL ALMEDA, Petitioners, vs. BATHALA MARKETING INDUSTRIES, INC., Respondent. Facts: Sometime in May 1997, respondent Bathala Marketing Industries, Inc., as lessee, represented by its president Ramon H. Garcia, renewed its Contract of Lease with Ponciano L. Almeda (Ponciano), as lessor, husband of petitioner Eufemia and father of petitioner Romel Almeda. Under the said contract, Ponciano agreed to lease a portion of the Almeda Compound in Makati City. for a term of four (4) years from May 1, 1997 unless sooner terminated as provided in the contract. The contract of lease contained pertinent provisions which gave rise to the instant case, wherein, the lessee should pay additional rental or charge in case there is increased of tax rate imposed on the said building and in case an extraordinary inflation or devaluation of Philippine Currency should supervene, the value of Philippine peso at

the time of the establishment of the obligation shall be the basis of payment. During the effectivity of the contract, Ponciano died. Thereafter, respondent dealt with petitioners. Petitioners informed respondents that they will increased the rental rate pursuant to imposition of vat and extraordinary inflation or deflation as indicated in the contract of lease. Respondents refused to pay the Vat and adjusted rentals. The respondent instituted an action for declaratory relief for purposes of determining the correct interpretation of conditions of the lease contract to prevent damage and prejudice. Petitioners later moved for the dismissal of the declaratory relief case for being an improper remedy considering that respondent was already in breach of the obligation and that the case would not end the litigation and settle the rights of the parties. The trial court, however, was not persuaded, and consequently, denied the motion. RTC ruled in favor of the respondents on the grounds that: the burden of paying the VAT was not a new tax that would call for application and the demand in rental increase, there being no extraordinary inflation or devaluation. The respondent made payment of the rental adjustment demanded by petitioners, thus, the court ordered the restitution by the latter to the former of the amounts paid, notwithstanding the well-established rule that in an action for declaratory relief, other than a declaration of rights and obligations, affirmative relief are not sought by or awarded to the parties. On appeal, CA affirmed decision of RTC, however, it found that the trial court exceeded its jurisdiction in granting affirmative relief to the respondent, particularly the restitution of its excess payment. Issue: Whether the action for declaratory relied is proper. Held: Yes. Declaratory relief is defined as an action by any person interested in a deed, will, contract or other written instrument, executive order or resolution, to determine any question of construction or validity arising from the instrument, executive order or regulation, or statute, and for a declaration of his rights and duties thereunder. General rule that such an action must be justified, as no other adequate relief or remedy is available under the circumstances. Decisional law enumerates the requisites of an action for declaratory relief, as follows: 1) the subject matter of the controversy must be a deed, will, contract or other written instrument, statute, executive order or regulation, or ordinance; 2) the terms of said documents and the validity thereof are doubtful and require judicial construction; 3) there must have been no breach of the documents in question; 4) there must be an actual justiciable controversy or the ripening seeds of one between persons whose interests are adverse; 5) the issue must be ripe for judicial determination; and 6) adequate relief is not available through other means or other forms of action or proceeding. After petitioners demanded payment of adjusted rentals, respondent complied with the terms and conditions set forth in their contract of lease by paying the rentals stipulated therein. Respondent religiously fulfilled its obligations to petitioners even during the pendency of the present suit. There is no showing that respondent committed an act constituting a breach of the subject contract of lease. Further, It is true that in Panganiban v. Pilipinas Shell Petroleum Corporation[17] we held that the petition for declaratory relief should be dismissed in view of the pendency of a separate action for unlawful detainer. In the case at bench, the trial court had not yet resolved the rescission/ejectment case during the pendency of the declaratory relief petition. In fact, the trial court, where the rescission case was on appeal, itself initiated the suspension of the proceedings pending the resolution of the action for declaratory relief. Tambunting vs Spouses Sumabat Facts: On May 3, 1973, respondents mortgaged a real property to petitioner Antonio Tambunting, Jr. to secure the payment of a P7,727.95 loan. In August 1976, respondents were informed that their indebtedness had ballooned to P15,000 for their failure to pay the monthly amortizations May 1977, because respondents defaulted in their obligation, petitioner Commercial House of Finance, Inc. (CHFI), as assignee

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of the mortgage, initiated foreclosure proceedings on the mortgaged property but the same did not push through. It was restrained by the then Court of First Instance (CFI) of Caloocan City , a complaint for injunction filed by respondents against petitioners. However, the case was subsequently dismissed for failure of the parties to appear at the hearing on November 9, 1977. On March 16, 1979, respondents filed an action for declaratory relief with the CFI of Caloocan City, Branch 33, seeking a declaration of the extent of their actual indebtedness. It was docketed as Civil Case No. C-7496. Petitioners were declared in default for failure to file an answer within the reglementary period. They moved for the dismissal of the action on the ground that its subject, the mortgage deed, had already been breached prior to the filing of the action but it was denied as they were in default and they filed the motion out of time. On January 8, 1981, the CFI rendered its decision. It fixed respondents liability at P15,743.83 and authorized them to consign the amount to the court for proper disposition. In compliance with the decision, respondents consigned the required amount on January 9, 1981. In March 1995, respondents received a notice of sheriffs sale indicating that the mortgage had been foreclosed by CHFI on February 8, 1995 and that an extrajudicial sale of the property would be held on March 27, 1995. On March 27, 1995, respondents instituted Civil Case No. C-16822, a petition for preliminary injunction, damages and cancellation of annotation of encumbrance with prayer for the issuance of a temporary restraining order, with the RTC of Caloocan City, Branch 120. However, the public auction scheduled on that same day proceeded and the property was sold to CHFI as the highest bidder. Respondents failed to redeem the property during the redemption period. Hence, title to the property was consolidated in favor of CHFI and a new certificate of title (TCT No. 310191) was issued in its name. In view of these developments, respondents amended their complaint to an action for nullification of foreclosure, sheriffs sale and consolidation of title, reconveyance and damages. On February 11, 2000, the RTC issued the assailed decision. It ruled that the 1981 CFI decision in Civil Case No. C-7496 (fixing respondents liability at P15,743.83 and authorizing consignation) had long attained finality. The mortgage was extinguished when respondents paid their indebtedness by consigning the amount in court. As a consequence, the trial court nullified the foreclosure and extrajudicial sale of the property Petitioners moved for a reconsideration of the trial courts decision but it was denied. Hence, this petition. Petitioners claim that the trial court erred when it affirmed the validity of the consignation. They insist that the CFI was barred from taking cognizance of the action for declaratory relief since, petitioners being already in default in their loan amortizations, there existed a violation of the mortgage deed even before the institution of the action. Hence, the CFI could not have rendered a valid judgment in Civil Case No. C-7496 and the consignation made pursuant to a void judgment was likewise void. Issue: Whether or not the decision of CFI granting the declaratory relief is valid? And whether or not the decision of CA affirming the decision of the RTC that the foreclosure is invalid? Held: An action for declaratory relief should be filed by a person interested under a deed, will, contract or other written instrument, and whose rights are affected by a statute, executive order, regulation or ordinance before breach or violation thereof. The purpose of the action is to secure an authoritative statement of the rights and obligations of the parties under a statute, deed, contract, etc. for their guidance in its enforcement or compliance and not to settle issues arising from its alleged breach. It may be entertained only before the breach or violation of the statute, deed, contract, etc. to which it refers. Where the law or contract has already been contravened prior to the filing of an action for declaratory relief, the court can no longer assume jurisdiction over the action. In other words, a court has no more jurisdiction over an action for declaratory relief if its subject, i.e., the statute, deed, contract, etc., has already been infringed or transgressed before the institution of the action. Under such circumstances, inasmuch as a cause of action has already accrued in favor of one or the other party,

there is nothing more for the court to explain or clarify short of a judgment or final order. Here, an infraction of the mortgage terms had already taken place before the filing of Civil Case No. C-7496. Thus, the CFI lacked jurisdiction when it took cognizance of the case in 1979. And in the absence of jurisdiction, its decision was void and without legal effect. Nonetheless, the petition must fail. Article 1142 of the Civil Code is clear. A mortgage action prescribes after ten years. An action to enforce a right arising from a mortgage should be enforced within ten years from the time the right of action accrues.[6] Otherwise, it will be barred by prescription and the mortgage creditor will lose his rights under the mortgage. The respondents institution of Civil Case No. C7496 in the CFI on March 16, 1979 did not interrupt the running of the ten-year prescriptive period because, as discussed above, the court lacked jurisdiction over the action for declaratory relief. Velarde vs. Social Justice Society [GR 159357, 28 April 2004] Facts: On 28 January 2003, the Social Justice Society (SJS) filed a Petition for Declaratory Relief (SJS Petition) before the RTC-Manila against Mariano Mike Z. Velarde, together with His Eminence, Jaime Cardinal Sin, Executive Minister Erao Manalo, Brother Eddie Villanueva and Brother Eliseo F. Soriano as co-respondents. SJS, a registered political party, sought the interpretation of several constitutional provisions, specifically on the separation of church and state; and a declaratory judgment on the constitutionality of the acts of religious leaders endorsing a candidate for an elective office, or urging or requiring the members of their flock to vote for a specified candidate. Bro. Eddie Villanueva submitted, within the original period [to file an Answer], a Motion to Dismiss. Subsequently, Executive Minister Erao Manalo and Bro. Mike Velarde, filed their Motions to Dismiss. While His Eminence Jaime Cardinal L. Sin, filed a Comment and Bro. Eli Soriano, filed an Answer within the extended period and similarly prayed for the dismissal of the Petition. All sought the dismissal of the Petition on the common grounds that it does not state a cause of action and that there is no justiciable controversy. They were ordered to submit a pleading by way of advisement, which was closely followed by another Order denying all the Motions to Dismiss. Bro. Mike Velarde, Bro. Eddie Villanueva and Executive Minister Erao Manalo moved to reconsider the denial. His Eminence Jaime Cardinal L. Sin, asked for extension to file memorandum. Only Bro. Eli Soriano complied with the first Order by submitting his Memorandum. The Court denied the Motions to Dismiss, and the Motions for Reconsideration filed by Bro. Mike Velarde, Bro. Eddie Villanueva and Executive Minister Erao Manalo, which raised no new arguments other than those already considered in the motions to dismiss. After narrating the above incidents, the trial court said that it had jurisdiction over the Petition, because in praying for a determination as to whether the actions imputed to the respondents are violative of Article II, Section 6 of the Fundamental Law, [the Petition] has raised only a question of law. It then proceeded to a lengthy discussion of the issue raised in the Petition the separation of church and state even tracing, to some extent, the historical background of the principle. Through its discourse, the trial court opined at some point that the [e]ndorsement of specific candidates in an election to any public office is a clear violation of the separation clause. After its essay on the legal issue, however, the trial court failed to include a dispositive portion in its assailed Decision. Thus, Velarde and Soriano filed separate Motions for Reconsideration which were denied by the lower court. Velarde filed the petition for review. Issue [1]: Whether SJS has legal interest in filing the Petition for declaratory relief. Held [1]: Legal standing or locus standi has been defined as a personal and substantial interest in the case, such that the party has sustained or will sustain direct injury as a result of the challenged act. Interest means a material interest in issue that is affected by the questioned act or instrument, as distinguished from a mere incidental interest in the question involved. Velarde

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alleged that [i]n seeking declaratory relief as to the constitutionality of an act of a religious leader to endorse, or require the members of the religious flock to vote for a specific candidate, herein Respondent SJS has no legal interest in the controversy; it has failed to establish how the resolution of the proffered question would benefit or injure it. Parties bringing suits challenging the constitutionality of a law, an act or a statute must show not only that the law [or act] is invalid, but also that [they have] sustained or [are] in immediate or imminent danger of sustaining some direct injury as a result of its enforcement, and not merely that [they] suffer thereby in some indefinite way. They must demonstrate that they have been, or are about to be, denied some right or privilege to which they are lawfully entitled, or that they are about to be subjected to some burdens or penalties by reason of the statute or act complained of. First, parties suing as taxpayers must specifically prove that they have sufficient interest in preventing the illegal expenditure of money raised by taxation. A taxpayers action may be properly brought only when there is an exercise by Congress of its taxing or spending power. Herein, there is no allegation, whether express or implied, that taxpayers money is being illegally disbursed. Second, there was no showing in the Petition for Declaratory Relief that SJS as a political party or its members as registered voters would be adversely affected by the alleged acts of Velarde, et al., if the question at issue was not resolved. There was no allegation that SJS had suffered or would be deprived of votes due to the acts imputed to the Velarde et al.. Neither did it allege that any of its members would be denied the right of suffrage or the privilege to be voted for a public office they are seeking. Finally, the allegedly keen interest of its thousands of members who are citizens-taxpayers-registered voters is too general and beyond the contemplation of the standards set by our jurisprudence. Not only is the presumed interest impersonal in character; it is likewise too vague, highly speculative and uncertain to satisfy the requirement of standing. Issue [2]: Whether the constitutional issue in the SJS Petition raises an issue of transcendental significance or paramount importance to the people, so as to allow the cognizance of the Petition, even sans legal standing. Held [2]: In not a few cases, the Court has liberalized the locus standi requirement when a petition raises an issue of transcendental significance or paramount importance to the people. Herein, the Court deemed the constitutional issue raised in the SJS Petition to be of paramount interest to the Filipino people. The issue did not simply concern a delineation of the separation between church and state, but ran smack into the governance of our country. The issue was both transcendental in importance and novel in nature, since it had never been decided before. The Court, thus, called for Oral Argument to determine with certainty whether it could resolve the constitutional issue despite the barren allegations in the SJS Petition as well as the abbreviated proceedings in the court below. Much to its chagrin, however, counsels for the parties -- particularly for SJS -- made no satisfactory allegations or clarifications that would supply the deficiencies hereinabove discussed. Hence, even if the Court would exempt the case from the stringent locus standi requirement, such heroic effort would be futile because the transcendental issue cannot be resolved anyway.

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