CASE DIGEST | Nicole Kristine Dagohoy- Taytayan

ZUNECA PHARMACEUTICAL, AKRAM restraining order (TRO) and/or writ of preliminary

ARAIN AND/OR VENUS ARAIN, M.D. DBA injunction.
ZUNECA PHARMACEUTICAL vs. RTC’s Ruling: The RTC denied the application for
NATRAPHARM, INC. a writ of preliminary injunction, reiterating the
G.R. No. 197802 November 11, 2015 reasons stated in the order denying the
application for a TRO:
Facts: Respondent is an all-Filipino
pharmaceutical company which manufactures and In this Court's objective evaluation, neither party is, at
sells a medicine bearing the generic name this point, entitled to any injunctive solace. Plaintiff,
"CITICOLINE," which is indicated for heart and while admittedly the holder of a registered trademark
under the IPC, may not invoke ascendancy or
stroke patients. The said medicine is marketed by
superiority of its CTR [certificate of trademark
respondent under its registered trademark
registration] over the CPR [certificate of product
"ZYNAPSE," which respondent obtained from the registration of the BFAD] of the defendants, as the
Intellectual Property Office (IPO) on September latter certificate is, in the Court's opinion, evidence of
24, 2007. its "prior use". Parenthetically, the plaintiff would
have been entitled to an injunction as against any
In addition, respondent obtained from the Bureau or all third persons in respect of its registered
of Food and Drugs (BFAD) all necessary permits mark under normal conditions, that is, in the event
and licenses to register, list and sell its wherein Section 159.1 would not be invoked by such
"ZYNAPSE" medicine in its various forms and third person. Such is the case however in this litigation.
Section 159 of the IPC explicitly curtails the registrant's
dosages.
rights by providing for limitations on those rights as
against a "prior user" under Section 159.
Allegedly unknown to respondent, since 2003 or
even as early as 2001, petitioners have been CA’s Ruling: The CA denied respondent's
selling a medicine imported from Lahore, Pakistan application for TRO and/or preliminary injunction
bearing the generic name "CARBAMAZEPINE," for lack of merit. The CA found no compelling
an anti-convulsant indicated for epilepsy, under reason to grant the application for TRO and/or
the brand name "ZYNAPS," which trademark is preliminary injunction because there was no
however not registered with the IPO. "ZYNAPS" is showing that respondent had a clear and existing
pronounced exactly like "ZYNAPSE." right that will be violated by petitioners.

Respondent further alleged that petitioners are However, contrary to its earlier resolutions
selling their product "ZYNAPS" denying the application for a TRO/preliminary
CARBAMAZEPINE in numerous drugstores in the injunction, the CA, in its April 18, 2011 Decision,
country where its own product "ZYNAPSE" upheld the allegations of respondent that it is
CITICOLINE is also being sold. entitled to injunctive relief on the basis of its IPO
registration and permanently enjoined petitioners
Moreover, respondent claimed that the drug from the commercial use of "ZYNAPS."
CARBAMAZEPINE has one documented serious
and disfiguring side-effect called "Stevens- Issue: Whether the CA may order a permanent
Johnson Syndrome," and that the sale of the injunction in deciding a petition for certiorari
medicines "ZYNAPSE" and "ZYNAPS" in the against the denial of an application for a
same drugstores will give rise to medicine preliminary injunction issued by the RTC.
switching.
Ruling: NO. A writ of preliminary injunction is
On November 29, 2007, respondent filed a generally based solely on initial and incomplete
complaint against petitioners for trademark evidence. The evidence submitted during the
infringement for violation of Republic Act (R.A.) hearing on an application for a writ of preliminary
No. 8293, or the Intellectual Property Code of the injunction is not conclusive or complete for only a
Philippines (IPC), with prayer for a temporary sampling is needed to give the trial court an idea
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of the justification for the preliminary injunction Facts: MERALCO is a corporation duly organized
pending the decision of the case on the merits. As and existing under Philippine laws engaged in the
such, the findings of fact and opinion of a court distribution and sale of electric power in Metro
when issuing the writ of preliminary injunction are Manila. On the other hand, BF Homes and PWCC
interlocutory in nature and made even before the are owners and operators of waterworks systems
trial on the merits is commenced or terminated. delivering water to over 12,000 households and
commercial buildings in BF Homes subdivisions in
By contrast a permanent injunction, based on Parañaque City, Las Piñas City, Caloocan City,
Section 9, Rule 58 of the Rules of Court, forms and Quezon City. The water distributed in the
part of the judgment on the merits and it can only waterworks systems owned and operated by BF
be properly ordered only on final judgment. A Homes and PWCC is drawn from deep wells
permanent injunction may thus be granted after a using pumps run by electricity supplied by
trial or hearing on the merits of the case and a MERALCO.
decree granting or refusing an injunction should
not be entered until after a hearing on the merits On June 23, 2003, BF Homes and PWCC filed a
where a verified answer containing denials is filed Petition [With Prayer for the Issuance of Writ of
or where no answer is required, or a rule to show Preliminary Injunction and for the Immediate
cause is equivalent to an answer. Issuance of Restraining Order] against MERALCO
before the RTC.
As such a preliminary injunction, like any
preliminary writ and any interlocutory order, In their Petition before the RTC, BF Homes and
cannot survive the main case of which it is an PWCC invoked their right to refund based on the
incident; because an ancillary writ of preliminary ruling of this Court in Republic v. Manila Electric
injunction loses its force and effect after the Company. BF Homes alleged that without giving
decision in the main petition. any notice whatsoever, MERALCO disconnected
electric supply to [BF Homes and PWCC’s]
Here, this Court is being asked to determine sixteen (16) water pumps located in BF Homes in
whether the CA erred by issuing a permanent Parañaque, Caloocan, and Quezon City, which
injunction in a case which questioned the thus disrupted water supply in those areas.
propriety of the denial of an ancillary writ. But with
the RTC's December 2, 2011 Decision on the When its repeated demands remained unheeded,
case for "Injunction, Trademark Infringement, MERALCO, threatened to cut off electric power to
Damages and Destruction," the issues raised in all petitioners' pumps if bills remained unpaid.
the instant petition have been rendered moot and Thus on, petitioners filed a petition in RTCLas
academic. We note that the case brought to the Piñas with prayer for issuance of writ of injunction
CA on a petition for certiorari merely involved the and restraining order against MERALCO alleging
RTC's denial of respondent's application for a writ that it refused to set off the P4.7M unpaid bills
of preliminary injunction, a mere ancillary writ. against the P11.8M amount refundable to
Since a decision on the merits has already been petitioners based on the cited ruling.
rendered and which includes in its disposition a
permanent injunction, the proper remedy is an MERALCO in its Answer, argued that RTC has no
appeal from the decision in the main case. jurisdiction over the case on the ground that
matters regarding the guidelines, schedules and
details of refund is under the authority and
BF HOMES, INC. and the PHILIPPINE approval of Energy Regulatory Commission
WATERWORKS AND CONSTRUCTION (ERC), MERALCO's regulatory agency, as
CORP. vs. MANILA ELECTRIC COMPANY provided by law and the cited ruling. It likewise
G.R. No. 171624 December 6, 2010 opposed the issuance of the writ.

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RTC granted the application for the issuance of Incidentally, BF Homes and PWCC seemed to
writ of injunction. When its motion to reconsider have lost sight of Section 8 of Executive Order
was denied, MERALCO appealed to CA. The CA No. 172 which explicitly vested on the ERB, as an
reversed RTC decision thereby dissolving the writ incident of its principal function, the authority to
of injunction. When their motion for grant provisional relief, thus:
reconsideration was denied, petitioners filed the
present petition for review on certiorari under Rule Section 8. Authority to Grant Provisional Relief. — The
45. Board may, upon the filing of an application, petition or
complaint or at any stage thereafter and without prior
Issue: Whether the RTC has jurisdiction over the hearing, on the basis of supporting papers duly verified
or authenticated, grant provisional relief on motion of a
case and thus, the granting of the writ of
party in the case or on its own initiative, without
preliminary injunction was proper. prejudice to a final decision after hearing, should the
Board find that the pleadings, together with such
Ruling: NO. Presently, the ERC has original and affidavits, documents and other evidence which may
exclusive jurisdiction under Rule 43(u) of the be submitted in support of the motion, substantially
EPIRA over all cases contesting rates, fees, fines, support the provisional order: Provided, That the Board
and penalties imposed by the ERC in the exercise shall immediately schedule and conduct a hearing
of its powers, functions and responsibilities, and thereon within thirty (30) days thereafter, upon
over all cases involving disputes between and publication and notice to all affected parties.
among participants or players in the energy
sector. Section 4(o) of the EPIRA Implementing The aforequoted provision is still applicable to the
Rules and Regulation provides that the ERC "shall ERC as it succeeded the ERB, by virtue of
also be empowered to issue such other rules that Section 80 of the EPIRA. A writ of preliminary
are essential in the discharge of its functions as in injunction is one such provisional relief which a
independent quasi-judicial body." party in a case before the ERC may move for.

Indubitably, the ERC is the regulatory agency of Lastly, the Court herein already declared that the
the government having the authority and RTC not only lacked the jurisdiction to issue the
supervision over MERALCO. Thus, the task to writ of preliminary injunction against MERALCO,
approve the guidelines, schedules, and details of but that the RTC actually had no jurisdiction at all
the refund by MERALCO to its consumers, to over the subject matter of the Petition of BF
implement the judgment of this Court in the Homes and PWCC in Civil Case No. 03-0151.
MERALCO Refund cases, also falls upon the Therefore, in addition to the dissolution of the writ
ERC. By filing their Petition before the RTC, BF of preliminary injunction issued by the RTC, the
Homes and PWCC intend to collect their refund Court also deems it appropriate to already order
without submitting to the approved schedule of the the dismissal of the Petition of BF Homes and
ERC, and in effect, enjoy preferential right over PWCC in Civil Case No. 03-0151 for lack of
the other equally situated MERALCO consumers. jurisdiction of the RTC over the subject matter of
the same. Although only the matter of the writ of
Since the RTC had no jurisdiction over the preliminary injunction was brought before this
Petition of BF Homes and PWCC in Civil Case Court in the instant Petition, the Court is already
No. 03-0151, then it was also devoid of any taking cognizance of the issue on the jurisdiction
authority to act on the application of BF Homes of the RTC over the subject matter of the Petition.
and PWCC for the issuance of a writ of The Court may motu proprio consider the issue of
preliminary injunction contained in the same jurisdiction. The Court has discretion to determine
Petition. The ancillary and provisional remedy of whether the RTC validly acquired jurisdiction over
preliminary injunction cannot exist except only as Civil Case No. 03-0151 since, to reiterate,
an incident of an independent action or jurisdiction over the subject matter is conferred
proceeding. only by law. Jurisdiction over the subject matter
cannot be acquired through, or waived by, any act
or omission of the parties. Neither would the
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active participation of the parties nor estoppel security for whatever damages respondents may
operate to confer jurisdiction on the RTC where sustain by reason of the attachment.
the latter has none over a cause of action. Indeed,
when a court has no jurisdiction over the subject CA’s Ruling: The CA partly granted the certiorari
matter, the only power it has is to dismiss the petition of respondents, ordering the RTC to
action. appoint a commissioner as provided under Rule
32 of the Rules of Court as well as the
subsequent discharge of any excess attachment if
so found therein, and, on the other hand, denying
NORTHERN ISLANDS, CO., INC. vs. respondents' Motion for Discovery.
SPOUSES DENNIS and CHERYLIN* GARCIA,
doing business under the name and style It held that: (a) on the issue of attachment, trial by
"Ecolamp Multi Resources commissioners under Rule 32 of the Rules of
G.R. No. 203240 March 18, 2015 Court was proper so that the parties may finally
settle their conflicting valuations; and (b) on the
Facts: On September 23, 2005, petitioner matter of discovery, petitioner could not be
Northern Islands Co., Inc. (petitioner) filed a compelled to produce the originals sought by
Complaint with application for a writ of preliminary respondents for inspection since they were not in
attachment, before the RTC against respondents, the former's possession.
which was subsequently amended on October 25,
2005. It alleged that: (a) from March to July 2004, Issue: Whether the RTC had lost jurisdiction over
petitioner caused the delivery to respondents of the matter of the preliminary attachment after
various appliances in the aggregate amount of petitioner appealed the decision in the Main Case,
P8,040,825.; (b) the goods were transported, and thereafter ordered the transmittal of the
shipped, and delivered by Sulpicio Lines, Inc., and records to the CA.
were accepted in good order and condition by
respondents' representatives; (c) the parties Ruling: YES. Section 9, Rule 41 of the Rules of
agreed that the goods delivered were payable Court provides that in appeals by notice of appeal,
within 120 days, and that the unpaid amounts the court loses jurisdiction over the case upon the
would earn interest at a rate of eighteen percent perfection of the appeals filed in due time and the
(18%) per annum; (d) however, the value of the expiration of the time to appeal of the other
goods were not paid by respondents despite parties.
repeated demands; and (e) respondents
fraudulently asserted that petitioner had no proof In this case, petitioner had duly perfected its
that they had indeed received the quantity of the appeal of the RTC's September 21, 2011 Decision
subject goods. resolving the Main Case through the timely filing
of its Notice of Appeal dated October 27, 2011,
In connection with the application for a writ of together with the payment of the appropriate
preliminary attachment, petitioner posted a bond, docket fees. The RTC, in an Order dated January
through Visayan Surety and Insurance 25, 2012, had actually confirmed this fact, and
Corporation, in the amount of P8,040,825. On thereby ordered the elevation of the entire records
November 7, 2005, the RTC issued the writ to the CA. Meanwhile, records do not show
sought for. that.respondents filed any appeal, resulting in the
lapse of its own period to appeal therefrom. Thus,
RTC’s Ruling: The RTC denied the Motion to based on Section 9, Rule 41, it cannot be
Discharge Excess Attachment, finding that the seriously doubted that the RTC had already lost
appraisal made by Lapaz was not reflective of the jurisdiction over the Main Case.
true valuation of the properties, adding too that
the bond posted by petitioner stands as sufficient With the RTC's loss of jurisdiction over the Main
Case necessarily comes its loss of jurisdiction all

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over matters merely ancillary thereto. Thus, the On 06 June 1996, TCT No. T-30586 in the name
propriety of conducting a trial by commissioners in of Lorenzo Uy was cancelled and, in lieu thereof,
order to determine the excessiveness of the TCT No. T-74439 was issued in the name of
subject preliminary attachment, being a mere petitioner. This new TCT carried with it the
ancillary matter to the Main Case, is now mooted attachment in favor of respondents.
by its supervening appeal in CA-G.R. CV No.
98237. Subsequently, petitioner filed a third-party claim in
Civil Case No. 5748 to discharge or annul the
attachment levied on the property covered by TCT
No. T-74439 on the ground that the said property
belongs to him and no longer to Lorenzo and
Elenita Uy.

BERNARDO VALDEVIESO vs. CANDELARIO From the unfavorable resolution of the trial court
DAMALERIO AND AUREA C. DAMALERIO in the third-party claim, respondents appealed to
G.R. NO. 133303 February 17, 2005 the Court of Appeals. The appellate court
reversed the resolution and by judgment
Facts: On 05 December 1995, Bernardo promulgated on 25 September 1997, it declared
Valdevieso (petitioner) bought from spouses that an attachment or levy of execution, though
Lorenzo and Elenita Uy a parcel of land consisting posterior to the sale, but if registered before the
of 10,000 square meters, more or less, located at sale is registered, takes precedence over the sale.
Bo. Tambler, General Santos City, and covered The writ of attachment in favor of the respondents,
by Transfer Certificate of Title (TCT) No. T-30586. being recorded ahead of the sale to petitioner, will
therefore take precedence.
The deed of sale was not registered, nor was the
title of the land transferred to petitioner. Issue: Whether or not a registered writ of
attachment on the land is a superior lien over that
On 07 December 1995, the said property was of an earlier unregistered deed of sale.
immediately declared by petitioner for taxation
purposes as Tax Declaration No. l6205 with the Ruling: YES. The settled rule is that levy on
City Assessor's Office. attachment, duly registered, takes preference over
a prior unregistered sale. This result is a
It came to pass that on 19 April 1996, spouses necessary consequence of the fact that the
Candelario and Aurea Damalerio (respondents) property involved was duly covered by the
filed with the Regional Trial Court (RTC) of Torrens system which works under the
General Santos City, a complaint for a sum of fundamental principle that registration is the
money against spouses Lorenzo and Elenita Uy operative act which gives validity to the transfer or
docketed as Civil Case No. 5748 with application creates a lien upon the land.
for the issuance of a Writ of Preliminary
Attachment. The preference created by the levy on attachment
is not diminished even by the subsequent
On 23 April 1996, the trial court issued a Writ of registration of the prior sale. This is so because
Preliminary Attachment by virtue of which the an attachment is a proceeding in rem. It is against
property, then still in the name of Lorenzo Uy but the particular property, enforceable against the
which had already been sold to petitioner, was whole world. The attaching creditor acquires a
levied. The levy was duly recorded in the Register specific lien on the attached property which
of Deeds of General Santos City and annotated nothing can subsequently destroy except the very
upon TCT No. T-30586. dissolution of the attachment or levy itself. Such a
proceeding, in effect, means that the property
attached is an indebted thing and a virtual

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condemnation of it to pay the owner's debt. The attachment on the grounds that there is no cause
lien continues until the debt is paid, or sale is had of action against him since the transactions or
under execution issued on the judgment, or until claims of the plaintiff were entered into by and
the judgment is satisfied, or the attachment between the plaintiff and the K.O. Glass
discharged or vacated in some manner provided Construction Co., Inc., a corporation duly
by law. organized and existing under Philippine laws; that
there is no ground for the issuance of the writ of
Thus, in the registry, the attachment in favor of preliminary attachment as defendant Kenneth O.
respondents appeared in the nature of a real lien Glass never intended to leave the Philippines, and
when petitioner had his purchase recorded. The even if he does, plaintiff cannot be prejudiced
effect of the notation of said lien was to subject thereby because his claims are against a
and subordinate the right of petitioner, as corporation which has sufficient funds and
purchaser, to the lien. Petitioner acquired property to satisfy his claim; and that the money
ownership of the land only from the date of the being garnished belongs to the K.O. Glass
recording of his title in the register, and the right of Corporation Co., Inc. and not to defendant
ownership which he inscribed was not absolute Kenneth O. Glass.
but a limited right, subject to a prior registered lien
of respondents, a right which is preferred and On January 26, 1978, the defendants therein filed
superior to that of petitioner. a supplementary motion to discharge and/or
K.O. GLASS CONSTRUCTION CO., INC. vs. dissolve the writ of preliminary attachment upon
THE HONORABLE MANUEL VALENZUELA, the ground that the affidavit filed in support of the
Judge of the Court of First Instance of Rizal, motion for preliminary attachment was not
and ANTONIO D. PINZON sufficient or wanting in law for the reason that: (1)
G.R. No. L-48756 September 11, 1982 the affidavit did not state that the amount of
plaintiff's claim was above all legal set-offs or
Facts: On October 6, 1977, an action was counterclaims, as required by Sec. 3, Rule 57 of
instituted in the Court of First Instance of Rizal by the Revised Rules of Court; (2) the affidavit did
Antonio D. Pinzon to recover from Kenneth O. not state that there is no other sufficient security
Glass the sum of P37,190.00, alleged to be the for the claim sought to be recovered by the action
agreed rentals of his truck, as well as the value of as also required by said Sec. 3; and (3) the
spare parts which have not been returned to him affidavit did not specify any of the grounds
upon termination of the lease. In his verified enumerated in Sec. 1 of Rule 57, 5 but, the
complaint, the plaintiff asked for an attachment respondent Judge denied the motion and ordered
against the property of the defendant consisting of the Philippine Geothermal, Inc. to deliver and
collectibles and payables with the Philippine deposit with the Clerk of Court the amount of
Geothermal, Inc., on the grounds that the P37,190.00 immediately upon receipt of the order
defendant is a foreigner; that he has sufficient which amount shall remain so deposited to await
cause of action against the said defendant; and the judgment to be rendered in the case.
that there is no sufficient security for his claim
against the defendant in the event a judgment is Issue: Whether the issuance of the writ of
rendered in his favor. preliminary attachment was proper.

Finding the petition to be sufficient in form and Ruling: NO. The respondent Judge gravely
substance, the respondent Judge ordered the abused his discretion in issuing the writ of
issuance of a writ of attachment against the preliminary attachment and in not ordering the
properties of the defendant upon the plaintiff's release of the money which had been deposited
filing of a bond in the amount of P37,190.00. with the Clerk of Court for the following reasons:

Thereupon, on November 22, 1977, the defendant First, there was no ground for the issuance of the
Kenneth O. Glass moved to quash the writ of writ of preliminary attachment. Section 1, Rule 57

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of the Revised Rules of Court, which enumerates (c) there is no other sufficient security 'or the claim
the grounds for the issuance of a writ of sought to be enforced by the action, and (d) the
preliminary attachment, reads, as follows: amount due to the applicant for attachment or the
value of the property the possession of which he
Sec. 1. Grounds upon which attachment may issue. — is entitled to recover, is as much as the sum for
A plaintiff or any proper party may, at the which the order is granted above all legal
commencement of the action or at any time thereafter, counterclaims. Section 3, Rule 57 of the Revised
have the property of the adverse party attached as Rules of Court reads. as follows:
security for the satisfaction of any judgment that may
be recovered in the following cases:
Section 3. Affidavit and bond required.—An order of
attachment shall be granted only when it is made to
(a) In an action for the recovery of money or damages
appear by the affidavit of the applicant, or of some
on a cause of action arising from contract, express or
person who personally knows the facts, that a sufficient
implied, against a party who is about to depart from the
cause of action exists that the case is one of those
Philippines with intent to defraud his creditor;
mentioned in Section 1 hereof; that there is no other
sufficient security for the claim sought to be enforced
(b) In an action for money or property embezzled or
by the action, and that the amount due to the applicant,
fraudulently misapplied or converted to his own use by
or the value of the property the possession of which he
a public officer, or an officer of a corporation, or an
is entitled to recover, is as much as the sum for which
attorney, factor, broker, agent, or clerk, in the course of
the order is granted above all legal counterclaims. The
his employment as such, or by any other person in a
affidavit, and the bond required by the next succeeding
fiduciary capacity, or for a willful violation of duty;
section, must be duly filed with the clerk or judge of the
court before the order issues.
(c) In an action to recover the possession of personal
property unjustly detained, when the property, or any
part thereof, has been concealed, removed, or While Pinzon may have stated in his affidavit that
disposed of to prevent its being found or taken by the a sufficient cause of action exists against the
applicant or an officer; defendant Kenneth O. Glass, he did not state
therein that "the case is one of those mentioned in
(d) In an action against the party who has been guilty Section 1 hereof; that there is no other sufficient
of a fraud in contracting the debt or incurring the security for the claim sought to be enforced by the
obligation upon which the action is brought, or in action; and that the amount due to the applicant is
concealing or disposing of the property for the taking, as much as the sum for which the order granted
detention or conversion of which the action is brought;
above all legal counter-claims." It has been held
(e) In an action against a party who has removed or
that the failure to allege in the affidavit the
disposed of his property, or is about to do so, with requisites prescribed for the issuance of a writ of
intent to defraud his creditors; preliminary attachment, renders the writ of
preliminary attachment issued against the
(f) In an action against a party who resides out of the property of the defendant fatally defective, and the
Philippines, or on whom summons may be served by judge issuing it is deemed to have acted in excess
publication. of his jurisdiction.

There being no showing, much less an allegation, Finally, it appears that the petitioner has filed a
that the defendants are about to depart from the counterbond in the amount of P37,190.00 to
Philippines with intent to defraud their creditor, or answer for any judgment that may be rendered
that they are non-resident aliens, the attachment against the defendant. Upon receipt of the
of their properties is not justified. counter-bond the respondent Judge should have
discharged the attachment pursuant to Section
Second, the affidavit submitted by Pinzon does 12, Rule 57 of the Revised Rules of Court.
not comply with the Rules. Under the Rules, an
affidavit for attachment must state that (a) The filing of the counter-bond will serve the
sufficient cause of action exists, (b) the case is purpose of preserving the defendant's property
one of those mentioned in Section I (a) of Rule 57; and at the same time give the plaintiff security for
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any judgment that may be obtained against the & Assurance Inc., under Bond No. HO-46764-97.
defendant. On the same date, the bank deposits of
respondent with Rizal Commercial Banking
Corporation (RCBC) were garnished. On October
PHILIPPINE COMMERCIAL INTERNATIONAL 27, 1997, respondent, through counsel, filed a
BANK vs. JOSEPH ANTHONY M. manifestation informing the court that he is
ALEJANDRO voluntarily submitting to its jurisdiction.
G.R. No. 175587 September 21, 2007
Subsequently, respondent filed a motion to quash
Facts: On October 23, 1997, petitioner filed the writ contending that the withdrawal of his
against respondent a complaint3 for sum of unassigned deposits was not fraudulent as it was
money with prayer for the issuance of a writ of approved by petitioner.
preliminary attachment. Said complaint alleged
that on September 10, 1997, respondent, a On December 24, 1997, the trial court issued an
resident of Hong Kong, executed in favor of order quashing the writ and holding that the
petitioner a promissory note obligating himself to withdrawal of respondent’s unassigned deposits
pay ₱249,828,588.90 plus interest. In view of the was not intended to defraud petitioner.
fluctuations in the foreign exchange rates which
resulted in the insufficiency of the deposits Issue: Whether petitioner bank is liable for
assigned by respondent as security for the loan, damages for the improper issuance of the writ of
petitioner requested the latter to put up additional attachment against respondent.
security for the loan. Respondent, however,
sought a reconsideration of said request pointing Ruling: While the final order of the trial court
out petitioner’s alleged mishandling of his account which quashed the writ did not categorically use
due to its failure to carry out his instruction to the word "bad faith" in characterizing the
close his account as early as April 1997, when the representations of petitioner, the tenor of said
prevailing rate of exchange of the US Dollar to order evidently considers the latter to have acted
Japanese yen was US$1.00:JPY127.50. It in bad faith by resorting to a deliberate strategy to
appears that the amount of ₱249,828,588.90 was mislead the court.
the consolidated amount of a series of yen loans
granted by petitioner to respondent during the Anent the second ground of attachment x x x the
months of February and April 1997. Court finds that the amount withdrawn was not
part of defendant’s peso deposits assigned with
In praying for the issuance of a writ of preliminary the bank to secure the loan and as proof that the
attachment under Section 1 paragraphs (e) and (f) withdrawal was not intended to defraud plaintiff as
of Rule 57 of the Rules of Court, petitioner alleged creditor is that plaintiff approved and allowed said
that (1) respondent fraudulently withdrew his withdrawals. It is even noted that when the Court
unassigned deposits notwithstanding his verbal granted the prayer for attachment it was mainly on
promise to PCIB Assistant Vice President the first ground under Section 1(f) of Rule 57 of
Corazon B. Nepomuceno not to withdraw the the 1997 Rules of Civil Procedure, that defendant
same prior to their assignment as security for the resides out of the Philippines.
loan; and (2) that respondent is not a resident of
the Philippines. The application for the issuance of On the above findings, it is obvious that plaintiff
a writ was supported with the affidavit of already knew from the beginning the deficiency of
Nepomuceno. its second ground for attachment [i.e.,] disposing
properties with intent to defraud his creditors, and
On October 24, 1997, the trial court granted the therefore plaintiff had to resort to this
application and issued the writ ex parte after misrepresentation that defendant was residing out
petitioner posted a bond in the amount of of the Philippines and suppressed the fact that
₱18,798,734.69, issued by Prudential Guarantee defendant’s permanent residence is in METRO

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MANILA where he could be served with yet acquired jurisdiction over the cause and over
summons. the persons of the defendants.

On the above findings, and mainly on the The Appellate Tribunal declared that —
misrepresentations made by plaintiff on the
grounds for the issuance of the attachment in the . . . While it is true that a prayer for the issuance of a
verified complaint, the Court concludes that writ of preliminary attachment may be included m the
defendant has duly proven its grounds in the complaint, as is usually done, it is likewise true that the
MOTION and that plaintiff is not entitled to the Court does not acquire jurisdiction over the person of
attachment. the defendant until he is duly summoned or voluntarily
appears, and adding the phrase that it be issued "ex
parte" does not confer said jurisdiction before actual
summons had been made, nor retroact jurisdiction
upon summons being made. . . .

Issue: Whether or not a writ of preliminary

DAVAO LIGHT & POWER CO., INC. vs. THE attachment may issue ex parte against a
COURT OF APPEALS, QUEENSLAND defendant before acquisition of jurisdiction of the
HOTEL or MOTEL or QUEENSLAND latter's person by service of summons or his
TOURIST INN, and TEODORICO ADARNA voluntary submission to the Court's authority.
G.R. No. 93262 December 29, 1991
Ruling: YES. The events that follow the filing of
Facts: On May 2, 1989 Davao Light & Power Co., the complaint as a matter of routine are well
Inc. (hereafter, simply Davao Light) filed a verified known. After the complaint is filed, summons
complaint for recovery of a sum of money and issues to the defendant, the summons is then
damages against Queensland Hotel, etc. and transmitted to the sheriff, and finally, service of the
Teodorico Adarna (docketed as Civil Case No. summons is effected on the defendant in any of
19513-89). The complaint contained an ex parte the ways authorized by the Rules of Court. There
application for a writ of preliminary attachment. is thus ordinarily some appreciable interval of time
between the day of the filing of the complaint and
On May 3, 1989 Judge Nartatez, to whose branch the day of service of summons of the defendant.
the case was assigned by raffle, issued an Order During this period, different acts may be done by
granting the ex parte application and fixing the the plaintiff or by the Court, which are
attachment bond at P4,600,513.37. unquestionable validity and propriety. Among
these, for example, are the appointment of a
On May 11, 1989 the attachment bond having guardian ad litem, 9 the grant of authority to the
been submitted by Davao Light, the writ of plaintiff to prosecute the suit as a pauper litigant,
attachment issued. The summons and a copy of 10 the amendment of the complaint by the plaintiff
the complaint, as well as the writ of attachment as a matter of right without leave of court,
and a copy of the attachment bond, were served authorization by the Court of service of summons
on defendants Queensland and Adarna; and by publication, the dismissal of the action by the
pursuant to the writ, the sheriff seized properties plaintiff on mere notice.
belonging to the latter.
This, too, is true with regard to the provisional
Consequently, defendants Queensland and remedies of preliminary attachment, preliminary
Adarna filed a motion to discharge the attachment injunction, receivership or replevin. They may be
for lack of jurisdiction to issue the same because validly and properly applied for and granted even
at the time the order of attachment was before the defendant is summoned or is heard
promulgated (May 3, 1989) and the attachment from.
writ issued (May 11, 1989), the Trial Court had not

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 CASE DIGEST | Nicole Kristine Dagohoy- Taytayan

A preliminary attachment may be defined, With respect to the other provisional remedies,
paraphrasing the Rules of Court, as the i.e., preliminary injunction (Rule 58), receivership
provisional remedy in virtue of which a plaintiff or (Rule 59), replevin or delivery of personal property
other party may, at the commencement of the (Rule 60), the rule is the same: they may also
action or at any time thereafter, have the property issue ex parte.
of the adverse party taken into the custody of the
court as security for the satisfaction of any It goes without saying that whatever be the acts
judgment that may be recovered. It is a remedy done by the Court prior to the acquisition of
which is purely statutory in respect of which the jurisdiction over the person of defendant, as
law requires a strict construction of the provisions above indicated — issuance of summons, order of
granting it. Withal no principle, statutory or attachment and writ of attachment (and/or
jurisprudential, prohibits its issuance by any court appointments of guardian ad litem, or grant of
before acquisition of jurisdiction over the person of authority to the plaintiff to prosecute the suit as a
the defendant. pauper litigant, or amendment of the complaint by
the plaintiff as a matter of right without leave of
Rule 57 in fact speaks of the grant of the remedy court 30 — and however valid and proper they
"at the commencement of the action or at any time might otherwise be, these do not and cannot bind
thereafter." The phase, "at the commencement of and affect the defendant until and unless
the action," obviously refers to the date of the jurisdiction over his person is eventually obtained
filing of the complaint — which, as above pointed by the court, either by service on him of summons
out, is the date that marks "the commencement of or other coercive process or his voluntary
the action;" and the reference plainly is to a time submission to the court's authority. Hence, when
before summons is served on the defendant, or the sheriff or other proper officer commences
even before summons issues. What the rule is implementation of the writ of attachment, it is
saying quite clearly is that after an action is essential that he serve on the defendant not only
properly commenced — by the filing of the a copy of the applicant's affidavit and attachment
complaint and the payment of all requisite docket bond, and of the order of attachment, as explicity
and other fees — the plaintiff may apply for and required by Section 5 of Rule 57, but also the
obtain a writ of preliminary attachment upon summons addressed to said defendant as well as
fulfillment of the pertinent requisites laid down by a copy of the complaint and order for appointment
law, and that he may do so at any time, either of guardian ad litem, if any, as also explicity
before or after service of summons on the directed by Section 3, Rule 14 of the Rules of
defendant. And this indeed, has been the Court. Service of all such documents is
immemorial practice sanctioned by the courts: for indispensable not only for the acquisition of
the plaintiff or other proper party to incorporate the jurisdiction over the person of the defendant, but
application for attachment in the complaint or also upon considerations of fairness, to apprise
other appropriate pleading (counter-claim, cross- the defendant of the complaint against him, of the
claim, third-party claim) and for the Trial Court to issuance of a writ of preliminary attachment and
issue the writ ex-parte at the commencement of the grounds therefor and thus accord him the
the action if it finds the application otherwise opportunity to prevent attachment of his property
sufficient in form and substance. by the posting of a counterbond in an amount
equal to the plaintiff's claim in the complaint
Withal, ample modes of recourse against a pursuant to Section 5 (or Section 12), Rule 57, or
preliminary attachment are secured by law to the dissolving it by causing dismissal of the complaint
defendant. The relative ease with which a itself on any of the grounds set forth in Rule 16, or
preliminary attachment may be obtained is demonstrating the insufficiency of the applicant's
matched and paralleled by the relative facility with affidavit or bond in accordance with Section 13,
which the attachment may legitimately be Rule 57.
prevented or frustrated.

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 CASE DIGEST | Nicole Kristine Dagohoy- Taytayan

For the guidance of all concerned, the Court

reiterates and reaffirms the proposition that writs
of attachment may properly issue ex parte
provided that the Court is satisfied that the
relevant requisites therefor have been fulfilled by
the applicant, although it may, in its discretion,
require prior hearing on the application with notice
to the defendant; but that levy on property
pursuant to the writ thus issued may not be validly
effected unless preceded, or contemporaneously
accompanied, by service on the defendant of
summons, a copy of the complaint (and of the
appointment of guardian ad litem, if any), the
application for attachment (if not incorporated in
but submitted separately from the complaint), the
order of attachment, and the plaintiff's attachment
bond.

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