G.R. No. 107303 February 21, 1994 EMMANUEL C. OATE and ECON HOLDINGS CORPORATION, petitioners, vs. HON.

ZUES C. ABROGAR, as Presiding Judge of Branch 150 of the Regional Trial Court of Makati, and SUN LIFE ASSURANCE COMPANY OF CANADA, respondents. G.R. No. 107491 February 21, 1994 BRUNNER DEVELOPMENT CORPORATION, petitioner, vs. HON. ZUES C. ABROGAR, as Presiding Judge of Branch 150 of the Regional Trial Court of Makati, and SUN LIFE ASSURANCE COMPANY OF CANADA, respondents. Florante A. Bautista for petitioner in G.R. No. 107303. Andin & Andin Law Offices for Brunner Development Corporation. Quasha, Asperilla, Ancheta, Pena & Nolasco for Sun Life Assurance Company of Canada.

NOCON, J.: These are separate petitions for certiorari with a prayer for temporary restraining order filed by Emmanuel C. Oate and Econ Holdings Corporation (in G.R. No. 107303), and Brunner Development Corporation (in G.R. No. 107491), both of which assail several orders issued by respondent Judge Zues C. Abrogar in Civil Case No. 91-3506. The pertinent facts are as follows: On December 23, 1991, respondent Sun Life Assurance Company of Canada (Sun Life, for brevity) filed a complaint for a sum of money with a prayer for the immediate issuance of a writ of attachment against petitioners, and Noel L. Dio, which was docketed as Civil Case No. 91-3506 and raffled to Branch 150 of the RTC Makati, presided over by respondent Judge. The following day, December 24, 1991, respondent Judge issued an order granting the issuance of a writ of attachment, and the writ was actually issued on December 27, 1991. On January 3, 1992, upon Sun Life's ex-parte motion, the trial court amended the writ of attachment to reflect the alleged amount of the indebtedness. That same day, Deputy Sheriff Arturo C. Flores, accompanied by a representative of Sun Life, attempted to serve summons and a copy of the amended writ of attachment upon petitioners at their known office address at 108 Aguirre St., Makati but was not able to do so since there was no responsible officer to receive the same. 1 Nonetheless, Sheriff Flores proceeded, over a period of several days, to serve notices of garnishment upon several commercial banks and financial institutions, and levied on attachment a condominium unit and a real property belonging to petitioner Oate. Summons was eventually served upon petitioners on January 9, 1992, while defendant Dio was served with summons on January 16, 1992. On January 21, 1992, petitioners filed an "Urgent Motion to Discharge/Dissolve Writ of Attachment." That same day, Sun Life filed an ex-parte motion to examine the books of accounts and ledgers of petitioner Brunner Development Corporation (Brunner, for brevity) at the Urban Bank, Legaspi Village Branch, and to obtain copies thereof, which motion was granted by respondent Judge. The examination of said

account took place on January 23, 1992. Petitioners filed a motion to nullify the proceedings taken thereat since they were not present. On January 30, 1992, petitioners and their co-defendants filed a memorandum in support of the motion to discharge attachment. Also on that same day, Sun Life filed another motion for examination of bank accounts, this time seeking the examination of Account No. 0041-0277-03 with the Bank of Philippine Islands (BPI) which, incidentally, petitioners claim not to be owned by them and the records of Philippine National Bank (PNB) with regard to checks payable to Brunner. Sun Life asked the court to order both banks to comply with the notice of garnishment. On February 6, 1992, respondent Judge issued an order (1) denying petitioners' and the co-defendants' motion to discharge the amended writ of attachment, (2) approving Sun Life's additional attachment, (3) granting Sun Life's motion to examine the BPI account, and (4) denying petitioners' motion to nullify the proceedings of January 23, 1992. On March 12, 1992, petitioners filed a motion for reconsideration of the February 6, 1992 order. On September 6, 1992, respondent Judge denied the motion for reconsideration. Hence, the instant petitions. Petitioners' basic argument is that respondent Judge had acted with grave abuse of discretion amounting to lack or in excess of jurisdiction in (1) issuing ex parte the original and amended writs of preliminary attachment and the corresponding notices of garnishment and levy on attachment since the trial court had not yet acquired jurisdiction over them; and (2) allowing the examination of the bank records though no notice was given to them. We find both petitions unmeritorious. Petitioners initially argue that respondent Judge erred in granting Sun Life's prayer for a writ of preliminary attachment on the ground that the trial court had not acquired jurisdiction over them. This argument is clearly unavailing since it is well-settled that a writ of preliminary attachment may be validly applied for and granted even before the defendant is summoned or is heard from. 2 The rationale behind this rule was stated by the Court in this wise: A preliminary attachment may be defined, paraphrasing the Rules of Court, as the provisional remedy in virtue of which a plaintiff or other proper party may, at the commencement of the action or any time thereafter, have the property of the adverse party taken into the custody of the court as security for the satisfaction of any judgment that may be recovered. It is a remedy which is purely statutory in respect of which the law requires a strict construction of the provisions granting it. Withal no principle, statutory or jurisprudential, prohibits its issuance by any court before acquisition of jurisdiction over the person of the defendant. Rule 57 in fact speaks of the grant of the remedy "at the commencement of the action or at any time thereafter." The phrase "at the commencement of the action," obviously refers to the date of the filing of the complaint which, as abovepointed out, its the date that marks "the commencement of the action;" and the reference plainly is to a time before summons is served on the defendant or even before summons issues. What the rule is saying quite clearly is that after an action is properly commenced by the filing of the complaint and the payment of all requisite docket and other fees the plaintiff may apply for and obtain a writ of preliminary attachment upon fulfillment of the pertinent requisites laid down by law, and that he may do so at any time, either before or after service of summons on the defendant. And this indeed, has been the immemorial practice sanctioned by the courts: for the plaintiff or other proper party to incorporate the application for attachment in the complaint or other appropriate pleading (counterclaim, cross-claim, third-party claim) and for the Trial Court to issue the writ ex-

parte at the commencement of the action if it finds the application otherwise sufficient in form and substance. 3 Petitioners then contended that the writ should have been discharged since the ground on which it was issued fraud in contracting the obligation was not present. This cannot be considered a ground for lifting the writ since this delves into the very complaint of the Sun Life. As this Court stated in Cuatro v. Court of Appeals: 4 Moreover, an attachment may not be dissolved by a showing of its irregular or improper issuance if it is upon a ground which is at the same time the applicant's cause of action in the main case since an anomalous situation would result if the issues of the main case would be ventilated and resolved in a mere hearing of the motion (Davao Light and Power Co., Inc. vs. Court of Appeals, supra, The Consolidated Bank and Trust Corp. (Solidbank) vs. Court of Appeals, 197 SCRA 663 [1991]). In the present case, one of the allegation in petitioner's complaint below is that the defendant spouses induced the plaintiff to grant the loan by issuing postdated checks to cover the installment payments and a separate set of postdated checks for payment of the stipulated interest (Annex "B"). The issue of fraud, then, is clearly within the competence of the lower court in the main action. 5 The fact that a criminal complaint for estafa filed by Sun Life against the petitioners was dismissed by the Provincial Prosecutor of Rizal for Makati on April 21, 1992 and was upheld by the Provincial Prosecutor on July 13, 1992 is of no moment since the same can be indicative only of the absence of criminal liability, but not of civil liability. Besides, Sun Life had elevated the case for review to the Department of Justice, where the case is presently pending. Finally, petitioners argue that the enforcement of the writ was invalid since it undisputedly preceded the actual service of summons by six days at most. Petitioners cite the decisions in Sievert vs. Court of Appeals, et al. 6 andBAC Manufacturing and Sales Corp . vs. Court of Appeals, et al., 7 wherein this Court held that enforcement of the writ of attachment cannot bind the defendant in view of the failure of the trial court to acquire jurisdiction over the defendant through either summons or his voluntary appearance. We do not agree entirely with petitioners. True, this Court had held in a recent decision that the enforcement of writ of attachment may not validly be effected until and unless proceeded or contemporaneously accompanied by service of summons. 8 But we must distinguish the case at bar from the Sievert and BAC Manufacturing cases. In those two cases,summons was never served upon the defendants . The plaintiffs therein did not even attempt to cause service of summons upon the defendants, right up to the time the cases went up to this Court. This is not true in the case at bar. The records reveal that Sheriff Flores and Sun Life did attempt a contemporaneous service of both summons and the writ of attachment on January 3, 1992, but we stymied by the absence of a responsible officer in petitioners' offices. Note is taken of the fact that petitioners Oate and Econ Holdings admitted in their answer 9that the offices of both Brunner Development Corporation and Econ Holdings were located at the same address and that petitioner Oate is the President of Econ Holdings while petitioner Dio is the President of Brunner Development Corporation as well as a stockholder and director of Econ Holdings. Thus, an exception to the established rule on the enforcement of the writ of attachment can be made where a previous attempt to serve the summons and the writ of attachment failed due to factors beyond the control of either the plaintiff or the process server, provided that such service is effected within a reasonable period thereafter.

Several reasons can be given for the exception. First, there is a possibility that a defendant, having been alerted of plaintiffs action by the attempted service of summons and the writ of attachment, would put his properties beyond the reach of the plaintiff while the latter is trying to serve the summons and the writ anew. By the time the plaintiff may have caused the service of summons and the writ, there might not be any property of the defendant left to attach. Second, the court eventually acquired jurisdiction over the petitioners six days later. To nullify the notices of garnishment issued prior thereto would again open the possibility that petitioners would transfer the garnished monies while Sun Life applied for new notices of garnishment. Third, the ease by which a writ of attachment can be obtained is counter-balanced by the ease by which the same can be discharged: the defendant can either make a cash deposit or post a counter-bond equivalent to the value of the property attached. 10 The petitioners herein tried to have the writ of attachment discharged by posting a counter-bond, the same was denied by respondent Judge on the ground that the amount of the counter-bond was less than that of Sun Life's bond. II. Petitioners' second ground assail the acts of respondent Judge in allowing the examination of Urban Banks' records and in ordering that the examination of the bank records of BPI and PNB as invalid since no notice of said examinations were ever given them. Sun Life grounded its requests for the examination of the bank accounts on Section 10, Rule 57 of the Rules of Court, which provided, to wit: Sec. 10. Examination of party whose property is attached and persons indebted to him or controlling his property; delivery of property to officer . Any person owing debts to the party whose property is attached or having in his possession or under his control any credit or other personal property belonging to such party, may be required to attend before the court in which the action is pending, or before a commissioner appointed by the court and be examined on oath respecting the same. The party whose property is attached may also be required to attend for the purpose of giving information respecting his property, and may be examined on oath. The court may, after such examination, order personal property capable of manual delivery belonging to him, in the possession of the person so required to attend before the court, to be delivered to the clerk or court, sheriff, or other proper officer on such terms as may be just, having reference to any lien thereon or claim against the same, to await the judgment in the action. It is clear from the foregoing provision that notice need only be given to the garnishee, but the person who is holding property or credits belonging to the defendant. The provision does not require that notice be furnished the defendant himself, except when there is a need to examine said defendant "for the purpose of giving information respecting his property. Furthermore, Section 10 Rule 57 is not incompatible with Republic Act No. 1405, as amended, "An Act Prohibiting Disclosure or Inquiry Into, Deposits With Any Banking Institution and Providing Penalty Therefore," for Section 2 therefore provides an exception "in cases where the money deposited or invested is the subject matter of the litigation." The examination of the bank records is not a fishing expedition, but rather a method by which Sun Life could trace the proceeds of the check it paid to petitioners. WHEREFORE, the instant petitions are hereby DISMISSED. The temporary restraining order issued on June 28, 1993 is hereby lifted. SO ORDERED.

G.R. No. 93262 December 29, 1991 DAVAO LIGHT & POWER CO., INC., petitioner, vs. THE COURT OF APPEALS, QUEENSLAND HOTEL or MOTEL or QUEENSLAND TOURIST INN, and TEODORICO ADARNA, respondents. Breva & Breva Law Offices for petitioner. Goc-Ong & Associates for private respondents.

NARVASA, J.:p Subject of the appellate proceedings at bar is the decision of the Court of Appeals in CA-G.R. Sp. No. 1967 entitled "Queensland Hotel, Inc., etc. and Adarna v. Davao Light & Power Co., Inc.," promulgated on May 4, 1990. 1 That decision nullified and set aside the writ of preliminary attachment issued by the Regional Trial Court of Davao City 2 in Civil Case No. 19513-89 on application of the plaintiff (Davao Light & Power Co.), before the service of summons on the defendants (herein respondents Queensland Co., Inc. and Adarna). Following is the chronology of the undisputed material facts culled from the Appellate Tribunal's judgment of May 4, 1990. 1. On May 2, 1989 Davao Light & Power Co., Inc. (hereafter, simply Davao Light) filed a verified complaint for recovery of a sum of money and damages against Queensland Hotel, etc. and Teodorico Adarna (docketed as Civil Case No. 19513-89). The complaint contained an ex parte application for a writ of preliminary attachment. 2. On May 3, 1989 Judge Nartatez, to whose branch the case was assigned by raffle, issued an Order granting the ex parte application and fixing the attachment bond at P4,600,513.37. 3. On May 11, 1989 the attachment bond having been submitted by Davao Light, the writ of attachment issued. 4. On May 12, 1989, the summons and a copy of the complaint, as well as the writ of attachment and a copy of the attachment bond, were served on defendants Queensland and Adarna; and pursuant to the writ, the sheriff seized properties belonging to the latter. 5. On September 6, 1989, defendants Queensland and Adarna filed a motion to discharge the attachment for lack of jurisdiction to issue the same because at the time the order of attachment was promulgated (May 3, 1989) and the attachment writ issued (May 11, 1989), the Trial Court had not yet acquired jurisdiction over the cause and over the persons of the defendants. 6. On September 14, 1989, Davao Light filed an opposition to the motion to discharge attachment. 7. On September 19, 1989, the Trial Court issued an Order denying the motion to discharge. This Order of September 19, 1989 was successfully challenged by Queensland and Adarna in a special civil action of certiorari instituted by them in the Court of Appeals. The Order was, as aforestated, annulled by the Court of Appeals in its Decision of May 4, 1990. The Appellate Court's decision closed with the following disposition:

. . . the Orders dated May 3, 1989 granting the issuance of a writ of preliminary attachment, dated September 19, 1989 denying the motion to discharge attachment; dated November 7, 1989 denying petitioner's motion for reconsideration; as well as all other orders emanating therefrom, specially the Writ of Attachment dated May 11, 1989 and Notice of Levy on Preliminary Attachment dated May 11, 1989, are hereby declared null and void and the attachment hereby ordered DISCHARGED. The Appellate Tribunal declared that . . . While it is true that a prayer for the issuance of a writ of preliminary attachment may be included m the complaint, as is usually done, it is likewise true that the Court does not acquire jurisdiction over the person of 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. . . . It went on to say, citing Sievert v. Court of Appeals, 3 that "in a proceedings in attachment," the "critical time which must be identified is . . . when the trial court acquires authority under law to act coercively against the defendant or his property . . .;" and that "the critical time is the of the vesting of jurisdiction in the court over the person of the defendant in the main case." Reversal of this Decision of the Court of Appeals of May 4, 1990 is what Davao Light seeks in the present appellate proceedings. The question is whether or not a writ of preliminary attachment may issue ex parte against a defendant before acquisition of jurisdiction of the latter's person by service of summons or his voluntary submission to the Court's authority. The Court rules that the question must be answered in the affirmative and that consequently, the petition for review will have to be granted. It is incorrect to theorize that after an action or proceeding has been commenced and jurisdiction over the person of the plaintiff has been vested in the court, but before the acquisition of jurisdiction over the person of the defendant (either by service of summons or his voluntary submission to the court's authority), nothing can be validly done by the plaintiff or the court. It is wrong to assume that the validity of acts done during this period should be defendant on, or held in suspension until, the actual obtention of jurisdiction over the defendant's person. The obtention by the court of jurisdiction over the person of the defendant is one thing; quite another is the acquisition of jurisdiction over the person of the plaintiff or over the subject-matter or nature of the action, or the res or object hereof. An action or proceeding is commenced by the filing of the complaint or other initiatory pleading. 4 By that act, the jurisdiction of the court over the subject matter or nature of the action or proceeding is invoked or called into activity; 5 and it is thus that the court acquires jurisdiction over said subject matter or nature of the action. 6 And it is by that self-same act of the plaintiff (or petitioner) of filing the complaint (or other appropriate pleading) by which he signifies his submission to the court's power and authority that jurisdiction is acquired by the court over his person. 7 On the other hand, jurisdiction over the person of the defendant is obtained, as above stated, by the service of summons or other coercive process upon him or by his voluntary submission to the authority of the court. 8 The events that follow the filing of the complaint as a matter of routine are well known. After the complaint is filed, summons issues to the defendant, the summons is then transmitted to the sheriff, and finally, service of the summons is effected on the defendant in any of the ways authorized by the Rules of Court. There is thus ordinarily some appreciable interval of time between the day of the filing of the complaint and the day of service of summons of the defendant. During this period, different acts may be done by the

plaintiff or by the Court, which are unquestionable validity and propriety. Among these, for example, are the appointment of a guardian ad litem,9 the grant of authority to the plaintiff to prosecute the suit as a pauper litigant, 10 the amendment of the complaint by the plaintiff as a matter of right without leave of court, 11 authorization by the Court of service of summons by publication, 12 the dismissal of the action by the plaintiff on mere notice. 13 This, too, is true with regard to the provisional remedies of preliminary attachment, preliminary injunction, receivership or replevin. 14 They may be validly and properly applied for and granted even before the defendant is summoned or is heard from. A preliminary attachment may be defined, paraphrasing the Rules of Court, as the provisional remedy in virtue of which a plaintiff or other party may, at the commencement of the action or at any time thereafter, have the property of the adverse party taken into the custody of the court as security for the satisfaction of any judgment that may be recovered. 15 It is a remedy which is purely statutory in respect of which the law requires a strict construction of the provisions granting it. 16 Withal no principle, statutory or jurisprudential, prohibits its issuance by any court before acquisition of jurisdiction over the person of the defendant. Rule 57 in fact speaks of the grant of the remedy "at the commencement of the action or at any time thereafter."17 The phase, "at the commencement of the action," obviously refers to the date of the filing of the complaint which, as above pointed out, is the date that marks "the commencement of the action;" 18 and the reference plainly is to a time before summons is served on the defendant, or even before summons issues. What the rule is saying quite clearly is that after an action is properly commenced by the filing of the complaint and the payment of all requisite docket and other fees the plaintiff may apply for and obtain a writ of preliminary attachment upon fulfillment of the pertinent requisites laid down by law, and that he may do so at any time, either before or after service of summons on the defendant. And this indeed, has been the immemorial practice sanctioned by the courts: for the plaintiff or other proper party to incorporate the application for attachment in the complaint or other appropriate pleading (counter-claim, cross-claim, third-party claim) and for the Trial Court to issue the writ ex-parte at the commencement of the action if it finds the application otherwise sufficient in form and substance. In Toledo v. Burgos, 19 this Court ruled that a hearing on a motion or application for preliminary attachment is not generally necessary unless otherwise directed by the Trial Court in its discretion. 20 And in Filinvest Credit Corporation v. Relova, 21 the Court declared that "(n)othing in the Rules of Court makes notice and hearing indispensable and mandatory requisites for the issuance of a writ of attachment." The only pre-requisite is that the Court be satisfied, upon consideration of "the affidavit of the applicant or of some other person who personally knows the facts, that a sufficient cause of action exists, that the case is one of those mentioned in Section 1 . . . (Rule 57), that there is no other sufficient security for the claim sought to be enforced by the action, and that the amount due to the applicant, or the value of the property the possession of which he is entitled to recover, is as much as the sum for which the order (of attachment) is granted above all legal counterclaims ." 22 If the court be so satisfied, the "order of attachment shall be granted," 23 and the writ shall issue upon the applicant's posting of "a bond executed to the adverse party in an amount to be fixed by the judge, not exceeding the plaintiffs claim, conditioned that the latter will pay all the costs which may be adjudged to the adverse party and all damages which he may sustain by reason of the attachment, if the court shall finally adjudge that the applicant was not entitled thereto." 24 In Mindanao Savings & Loan Association, Inc . v. Court of Appeals, decided on April 18, 1989, 25 this Court had occasion to emphasize the postulate that no hearing is required on an application for preliminary attachment, with notice to the defendant, for the reason that this "would defeat the objective of the remedy . . . (since the) time which such a hearing would take, could be enough to enable the defendant to abscond or dispose of his property before a writ of attachment issues." As observed by a former member of this Court, 26 such a procedure would warn absconding debtors-defendants of the commencement of the suit against them and the probable seizure of their properties, and thus give them

the advantage of time to hide their assets, leaving the creditor-plaintiff holding the proverbial empty bag; it would place the creditor-applicant in danger of losing any security for a favorable judgment and thus give him only an illusory victory. Withal, ample modes of recourse against a preliminary attachment are secured by law to the defendant. The relative ease with which a preliminary attachment may be obtained is matched and paralleled by the relative facility with which the attachment may legitimately be prevented or frustrated. These modes of recourse against preliminary attachments granted by Rule 57 were discussed at some length by the separate opinion in Mindanao Savings & Loans Asso. Inc. v. CA., supra. That separate opinion stressed that there are two (2) ways of discharging an attachment: first, by the posting of a counterbond; and second, by a showing of its improper or irregular issuance. 1.0. The submission of a counterbond is an efficacious mode of lifting an attachment already enforced against property, or even of preventing its enforcement altogether. 1.1. When property has already been seized under attachment, the attachment may be discharged upon counterbond in accordance with Section 12 of Rule 57. Sec. 12. Discharge of attachment upon giving counterbond. At any time after an order of attachment has been granted, the party whose property has been attached or the person appearing in his behalf, may, upon reasonable notice to the applicant, apply to the judge who granted the order, or to the judge of the court in which the action is pending, for an order discharging the attachment wholly or in part on the security given . . . in an amount equal to the value of the property attached as determined by the judge to secure the payment of any judgment that the attaching creditor may recover in the action. . . . 1.2. But even before actual levy on property, seizure under attachment may be prevented also upon counterbond. The defendant need not wait until his property is seized before seeking the discharge of the attachment by a counterbond. This is made possible by Section 5 of Rule 57. Sec. 5. Manner of attaching property. The officer executing the order shall without delay attach, to await judgment and execution in the action, all the properties of the party against whom the order is issued in the province, not exempt from execution, or so much thereof as may be sufficient to satisfy the applicant's demand, unless the former makes a deposit with the clerk or judge of the court from which the order issued, or gives a counter-bond executed to the applicant, in an amount sufficient to satisfy such demand besides costs, or in an amount equal to the value of the property which is about to be attached, to secure payment to the applicant of any judgment which he may recover in the action. . . . (Emphasis supplied) 2.0. Aside from the filing of a counterbond, a preliminary attachment may also be lifted or discharged on the ground that it has been irregularly or improperly issued, in accordance with Section 13 of Rule 57. Like the first, this second mode of lifting an attachment may be resorted to even before any property has been levied on. Indeed, it may be availed of after property has been released from a levy on attachment, as is made clear by said Section 13, viz.: Sec. 13. Discharge of attachment for improper or irregular issuance. The party whose property has been attached may also, at any time either BEFORE or AFTER the release of the attached property, or before any attachment shall have been actually levied , upon reasonable notice to the attaching creditor, apply to the judge who granted the order, or to the judge of the court in which the action is pending, for an order to discharge the attachment on the ground that the same was improperly or irregularly issued. If the motion be made on affidavits on the part of the party whose property has been attached,

but not otherwise, the attaching creditor may oppose the same by counter-affidavits or other evidence in addition to that on which the attachment was made. . . . (Emphasis supplied) This is so because "(a)s pointed out in Calderon v. I.A.C., 155 SCRA 531 (1987), The attachment debtor cannot be deemed to have waived any defect in the issuance of the attachment writ by simply availing himself of one way of discharging the attachment writ, instead of the other. Moreover, the filing of a counterbond is a speedier way of discharging the attachment writ maliciously sought out by the attaching creditor instead of the other way, which, in most instances . . . would require presentation of evidence in a fullblown trial on the merits, and cannot easily be settled in a pending incident of the case." 27 It may not be amiss to here reiterate other related principles dealt with in Mindanao Savings & Loans Asso. Inc. v. C.A., supra., 28 to wit: (a) When an attachment may not be dissolved by a showing of its irregular or improper issuance: . . . (W)hen the preliminary attachment is issued upon a ground which is at the same time the applicant's cause of action; e.g., "an action for money or property embezzled or fraudulently misapplied or converted to his own use by a public officer, or an officer of a corporation, or an attorney, factor, broker, agent, or clerk, in the course of his employment as such, or by any other person in a fiduciary capacity, or for a willful violation of duty." (Sec. 1 [b], Rule 57), or "an action against a party who has been guilty of fraud m contracting the debt or incurring the obligation upon which the action is brought" (Sec. 1 [d], Rule 57), the defendant is not allowed to file a motion to dissolve the attachment under Section 13 of Rule 57 by offering to show the falsity of the factual averments in the plaintiff's application and affidavits on which the writ was based and consequently that the writ based thereon had been improperly or irregularly issued (SEE Benitez v. I.A.C., 154 SCRA 41) 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. Therefore, when the writ of attachment is of this nature, the only way it can be dissolved is by a counterbond (G.B. Inc. v. Sanchez, 98 Phil. 886). (b) Effect of the dissolution of a preliminary attachment on the plaintiffs attachment bond: . . . The dissolution of the preliminary attachment upon security given, or a showing of its irregular or improper issuance, does not of course operate to discharge the sureties on plaintiff's own attachment bond. The reason is simple. That bond is "executed to the adverse party, . . . conditioned that the . . . (applicant) will pay all the costs which may be adjudged to the adverse party and all damages which he may sustain by reason of the attachment, if the court shall finally adjudge that the applicant was not entitled thereto" (SEC. 4, Rule 57). Hence, until that determination is made, as to the applicant's entitlement to the attachment, his bond must stand and cannot be with-drawn. With respect to the other provisional remedies, i.e., preliminary injunction (Rule 58), receivership (Rule 59), replevin or delivery of personal property (Rule 60), the rule is the same: they may also issue ex parte. 29 It goes without saying that whatever be the acts done by the Court prior to the acquisition of jurisdiction over the person of defendant, as above indicated issuance of summons, order of attachment and writ of attachment (and/or appointments of guardian ad litem, or grant of authority to the plaintiff to prosecute the suit as a pauper litigant, or amendment of the complaint by the plaintiff as a matter of right without leave of court 30 and however valid and proper they might otherwise be, these do not and cannot bind

and affect the defendant until and unless jurisdiction over his person is eventually obtained by the court, either by service on him of summons or other coercive process or his voluntary submission to the court's authority. Hence, when the sheriff or other proper officer commences implementation of the writ of attachment, it is essential that he serve on the defendant not only a copy of the applicant's affidavit and attachment bond, and of the order of attachment, as explicity required by Section 5 of Rule 57, but also the summons addressed to said defendant as well as a copy of the complaint and order for appointment of guardian ad litem, if any, as also explicity directed by Section 3, Rule 14 of the Rules of Court. Service of all such documents is indispensable not only for the acquisition of jurisdiction over the person of the defendant, but also upon considerations of fairness, to apprise the defendant of the complaint against him, of the issuance of a writ of preliminary attachment and the grounds therefor and thus accord him the opportunity to prevent attachment of his property by the posting of a counterbond in an amount equal to the plaintiff's claim in the complaint pursuant to Section 5 (or Section 12), Rule 57, or dissolving it by causing dismissal of the complaint itself on any of the grounds set forth in Rule 16, or demonstrating the insufficiency of the applicant's affidavit or bond in accordance with Section 13, Rule 57. It was on account of the failure to comply with this fundamental requirement of service of summons and the other documents above indicated that writs of attachment issued by the Trial Court ex parte were struck down by this Court's Third Division in two (2) cases, namely: Sievert v. Court of Appeals, 31 and BAC Manufacturing and Sales Corporation v . Court of Appeals, et al. 32 In contrast to the case at bar where the summons and a copy of the complaint, as well as the order and writ of attachment and the attachment bond were served on the defendant in Sievert, levy on attachment was attempted notwithstanding that only the petition for issuance of the writ of preliminary attachment was served on the defendant, without any prior or accompanying summons and copy of the complaint; and in BAC Manufacturing and Sales Corporation , neither the summons nor the order granting the preliminary attachment or the writ of attachment itself was served on the defendant "before or at the time the levy was made." 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. WHEREFORE, the petition is GRANTED; the challenged decision of the Court of Appeals is hereby REVERSED, and the order and writ of attachment issued by Hon. Milagros C. Nartatez, Presiding Judge of Branch 8, Regional Trial Court of Davao City in Civil Case No. 19513-89 against Queensland Hotel or Motel or Queensland Tourist Inn and Teodorico Adarna are hereby REINSTATED. Costs against private respondents. SO ORDERED. G.R. No. 84034 December 22, 1988 ALBERTO SIEVERT, petitioner, vs. COURT OF APPEALS, HON. JUDGE ARTEMON D. LUNA and AURELIO CAMPOSANO, respondents. King & Adorio Law Offices for petitioner. Moises C. Kallos for private respondent.

FELICIANO, J.: On 18 May 1988 petitioner Alberto Sievert a citizen and resident of the Philippines received by mail a Petition for Issuance of a Preliminary Attachment filed with the Regional Trial Court of Manila Branch 32 in Civil Case No. 88-44346. Petitioner had not previously received any summons and any copy of a complaint against him in Civil Case No. 88-44346. On the day set for hearing of the Petition for a Preliminary Writ of Attachment, petitioner's counsel went before the trial court and entered a special appearance for the limited purpose of objecting to the jurisdiction of the court. He simultaneously filed a written objection to the jurisdiction of the trial court to hear or act upon the Petition for Issuance of a Preliminary Writ of Attachment. In this written objection, petitioner prayed for denial of that Petition for lack of jurisdiction over the person of the petitioner (defendant therein) upon the ground that since no summons had been served upon him in the main case, no jurisdiction over the person of the petitioner had been acquired by the trial court. The trial court denied the petitioner's objection and issued in open court an order which, in relevant part, read as follows: Under Section 1, Rule 57, Rules of Court, it is clear that a plaintiff or any proper party may "... at the commencement of the action or at any time thereafter, have the property of the adverse party attached as the security for the satisfaction of any judgment ..." This rule would overrule the contention that this Court has no jurisdiction to act on the application, although if counsel for defendant so desire, she is given five (5) days from today within which to submit her further position why the writ should not be issued, upon the receipt of which or expiration of the period, the pending incident shall be considered submitted for resolution. (Underscoring in the original) 1 Thereupon, on the same day, petitioner filed a Petition for certiorari with the Court of Appeals. On 13 July 1988, the respondent appellate court rendered a decision, notable principally for its brevity, dismissing the Petition. The relevant portion of the Court of Appeals' decision is quoted below: The grounds raised in this petition state that the court a quo had not acquired jurisdiction over defendant (now petitioner) since no summons had been served on him, and that respondent Judge had committed a grave abuse of discretion in issuing the questioned order without jurisdiction. In short, the issue presented to us is whether respondent Judge may issue a writ of preliminary attachment against petitioner before summons is served on the latter. We rule for respondent Judge. Under Sec. 1, Rule 57, it is clear that, at the commencement of the action, a party may have the property of the adverse party attached as security. The resolution of this issue depends, therefore, on what is meant by "Commencement of the action." Moran, citing American jurisprudence on this point, stated thus: "Commencement of action. Action is commenced by filing of the complaint, even though summons is not issued until a later date." (Comment on the Rules of Court, Vol. I, p. 150, 1979). Thus, a writ of preliminary attachment may issue upon filing of the complaint even before issuance of the summons . WHEREFORE, for lack of merit, the petition is hereby denied and, accordingly, dismissed. (Emphasis supplied) 2

The petitioner is now before this Court on a Petition for Review on Certiorari, assailing the above-quoted decision of the Court of Appeals. The petitioner assigns two (2) errors: 1. The proceedings taken and the order issued on plaintiffs petition for attachment prior to the service of summons on the defendant were contrary to law and jurisprudence and violated the defendant's right to due process. 2. The Court of Appeals committed a grave abuse of discretion amounting to lack of jurisdiction in ruling that a writ of preliminary attachment may issue upon filing of the complaint even prior to issuance of the summons. 3 The two (2) assignments of error relate to the single issue which we perceive to be at stake here, that is, whether a court which has not acquired jurisdiction over the person of the defendant in the main case, may bind such defendant or his property by issuing a writ of preliminary attachment. Both the trial court and the Court of Appeals held that the defendant may be bound by a writ of preliminary attachment even before summons together with a copy of the complaint in the main case has been validly served upon him. We are unable to agree with the respondent courts. There is no question that a writ of preliminary attachment may be applied for a plaintiff "at the commencement of the action or at any time thereafter" in the cases enumerated in Section 1 of Rule 57 of the Revised Rules of Court. The issue posed in this case, however, is not to be resolved by determining when an action may be regarded as having been commenced, a point in time which, in any case, is not necessarily fixed and Identical regardless of the specific purpose for which the determination is to be made. The critical time which must be Identified is, rather, when the trial court acquires authority under law to act coercively against the defendant or his property in a proceeding in attachment. We believe and so hold that critical time is the time of the vesting of jurisdiction in the court over the person of the defendant in the main case. Attachment is an ancillary remedy. It is not sought for its own sake but rather to enable the attaching party to realize upon relief sought and expected to be granted in the main or principal action . 4 A court which has not acquired jurisdiction over the person of defendant, cannot bind that defendant whether in the main case or in any ancillary proceeding such as attachment proceedings. The service of a petition for preliminary attachment without the prior or simultaneous service of summons and a copy of the complaint in the main case and that is what happened in this case does not of course confer jurisdiction upon the issuing court over the person of the defendant. Ordinarily, the prayer in a petition for a writ of preliminary attachment is embodied or incorporated in the main complaint itself as one of the forms of relief sought in such complaint. Thus, valid service of summons and a copy of the complaint will in such case vest jurisdiction in the court over the defendant both for purposes of the main case and for purposes of the ancillary remedy of attachment. In such case, notice of the main case is at the same time notice of the auxiliary proceeding in attachment. Where, however, the petition for a writ of preliminary attachment is embodied in a discrete pleading, such petition must be served either simultaneously with service of summons and a copy of the main complaint, or after jurisdiction over the defendant has already been acquired by such service of summons. Notice of the separate attachment petition is not notice of the main action. Put a little differently, jurisdiction whether ratione personae or ratione materiae in an attachment proceeding is ancillary to jurisdiction ratione personae or ratione materiae in the main action against the defendant. If a court has no jurisdiction over the subject matter or over the person of the defendant in the principal action, it simply has no jurisdiction to issue a writ of preliminary attachment against the defendant or his property.

It is basic that the requirements of the Rules of Court for issuance of preliminary attachment must be strictly and faithfully complied with in view of the nature of this provisional remedy. In Salas v. Adil, 5 this Court described preliminary attachment as a rigorous remedy which exposes the debtor to humiliation and annoyance , such [that] it should not be abused as to cause unnecessary prejudice. It is, therefore; the duty of the court, before issuing the writ, to ensure that all the requisites of the law have been complied with; otherwise the judge acts in excess of his jurisdiction and the writ so issued shall be null and void. (Emphasis supplied ) 6 The above words apply with greater force in respect of that most fundamental of requisites, the jurisdiction of the court issuing attachment over the person of the defendant. In the case at bar, the want of jurisdiction of the trial court to proceed in the main case against the defendant is quite clear. It is not disputed that neither service of summons with a copy of the complaint nor voluntary appearance of petitioner Sievert was had in this case. Yet, the trial court proceeded to hear the petition for issuance of the writ. This is reversible error and must be corrected on certiorari. WHEREFORE, the Petition for Review on certiorari is GRANTED due course and the Order of the trial court dated 20 May 1988 and the Decision of the Court of Appeals dated 13 July 1988 are hereby SET ASIDE and ANNULLED. No pronouncement as to costs. SO ORDERED.

SECOND DIVISION JUAN DE DIOS CARLOS, Petitioner, G.R. No. 135830 Present: PUNO, J., - versus Chairman, AUSTRIA-MARTINEZ, CALLEJO, SR., TINGA, and CHICO-NAZARIO, JJ. Promulgated: September 30, 2005

FELICIDAD SANDOVAL, also known as FELICIDAD S. VDA. DE CARLOS or FELICIDAD S. CARLOS or FELICIDAD SANDOVAL DE CARLOS, and TEOFILO CARLOS II, Respondents.

x-------------------------------------------------------------------x SIDDCOR (now MEGA PACIFIC) INSURANCE CORPORATION, Petitioner, G.R. No. 136035

versus -

FELICIAD SANDOVAL VDA. DE CARLOS and TEOFILO CARLOS II, Respondents. x------------------------------------------------------------------x

SIDDCOR (now MEGA PACIFIC) INSURANCE CORPORATION, Petitioner, versus -

G.R. No. 137743

HON. COURT OF APPEALS (FORMER SPECIAL FOURTH DIVISION), HON. ALBERTO L. LERMA and/or the REGIONAL TRIAL COURT OF THE CITY OF MUNTINLUPA, BRANCH 256, FELICIDAD SANDOVAL, also known as FELICIDAD S. VDA. DE CARLOS OR FELICIDAD S. CARLOS OR FELICIDAD SANDOVAL CARLOS OR FELICIDAD SANDOVAL VDA. DE CARLOS and TEOFILO CARLOS II, Respondents. x-------------------------------------------------------------------x DECISION TINGA, J.: These consolidated petitions emanated from a civil case filed by Juan de Dios Carlos (Carlos) against respondents Felicidad Sandoval (Sandoval) and Teofilo Carlos II (Teofilo II) docketed with the Regional Trial Court (RTC) ofMuntinlupa City as Civil Case No. 95-135.

In his Complaint before the RTC, Carlos asserted that he was the sole surviving compulsory heir of his parents, Felix B. Carlos and Felipa Elemia, [1] who had acquired during their marriage, six parcels of land (subject properties). His brother, Teofilo (Teofilo), died intestate in 1992. At the time of his death,

Teofilo was apparently married to Sandoval, and cohabiting with her and their child, respondent Teofilo II. Nonetheless, Carlos alleged in his Complaint that Teofilo and Sandoval were not validly married as they had not obtained any marriage license.[2] Furthermore, Carlos also asserted that Teofilo II could not be considered as Teofilos child. As a result, Carlos concluded that he was also the sole heir of his brother Teofilo, since the latter had died without leaving any heirs.

Carlos also claimed that Teofilo, prior to their father Felixs death in 1963, developed a scheme to save the elder Carloss estate from inheritance taxes. Under the scheme, the properties of the father would be transferred to Teofilo who would, in turn, see to it that the shares of the legal heirs are protected and delivered to them. Felix assented to the plan, and the subject properties were transferred in the name of Teofilo. After Teofilos death, Carlos entered into certain agreements with Sandoval in connection with the subject properties. Carlos did so, believing that the latter was the lawful wife of his brother Teofilo. Subsequently though, Carlos discovered that Sandoval and his brother were never validly married, as their marriage was contracted without a marriage license. [3] Carlos now sought to nullify these agreements with Sandoval for want of consideration, the premise for these contracts being non-existent. Thus, Carlos prayed of the RTC to declare the alleged marriage between Teofilo and Sandoval void ab initio, provided that Teofilo died without issue, order that new titles covering the subject properties be issued in the name of Carlos, and require Sandoval to restitute Carlos in the amount of P18,924,800.00.[4] Carlos likewise prayed for the issuance of the provisional relief of preliminary attachment. The RTC issued an Orderdated 7 September 1995 granting the prayer for preliminary attachment, and on 15 September 1995, a writ of preliminary attachment. Carlos posted a bond for P20,000,000.00 issued by herein petitioner

SIDDCOR Insurance Corporation (SIDDCOR). [5] Shortly thereafter, a Notice of Garnishment was served upon the Philippine National Bank (PNB) over the deposit accounts maintained by respondents. Respondents filed an Urgent Motion to Discharge the Writ of Attachment, which was opposed by Carlos. On 4 December 1995, the RTC rendered an order denying the motion. This caused respondents to file a Petition for Certiorariwith the Court of Appeals, seeking to set aside the RTC order granting the writ of preliminary attachment denying the motion for the discharge of the writ. This case was docketed as CA-G.R. SP No. 39267.[6] On 27 February 1996, the Court of Appeals Second Division promulgated its Decision in CA-G.R. SP No. 39267,wherein it granted the Petition for Certiorari and ordered the discharge and dissolution of the Writ of Attachment and Notice of Garnishment. [7] The Court of Appeals found that there was no sufficient cause of action to warrant the preliminary attachment, since Carlos had merely alleged general averments in order to support his prayer. [8] Carlos elevated the said Decision to this Court by way of Petition for Review on Certiorari, which was docketed as G.R. No. L-125717. In a Resolution dated 21 October 1996, the Court denied Carloss Petition, and thus the Court of Appeals Decision ordering the dissolution of the Writ of Attachment and Notice of Garnishment became final. In the meantime, the hearing on Carloss Complaint ensued before the RTC. Respondents duly filed their Answerand thereafter filed a Motion for Summary Judgment. Carlos opposed the motion and countered with his own Motion for Summary Judgment. On 8 April 1996, the RTC rendered a summary judgment in favor of Carlos. Carloss victory was wholesale, with the RTC making the following pronouncements: 1. Declaring the marriage between defendant Felicidad Sandoval and Teofilo Carlos solemnized at Silang, Cavite, on May 14, 1962, evidenced by the Marriage Contract submitted in this case, null and void ab initio for lack of the requisite marriage license; 2. Declaring that the defendant minor, Teofilo S. Carlos II, is not the natural, illegitimate, or legally adopted child of the late Teofilo E. Carlos; 3. Ordering defendant Sandoval to pay and restitute to plaintiff the sum of P18,924,800.00, together with the interest thereon at the legal rate from date of filing of the instant complaint until fully paid;

4. Declaring plaintiff as the sole and exclusive owner of the parcel of land, less the portion adjudicated to the plaintiffs in Civil Case No. 11975, covered by TCT No. 139061 of the Register of Deeds of Makati City, and ordering said Register of Deeds to cancel said title and to issue another title in the sole name of plaintiff herein;

5. Declaring the Contract, Annex K of the Complaint, between plaintiff and defendant Sandoval null and void, and ordering the Register of Deeds of Makati City to cancel TCT No. 139058 in the name of Teofilo Carlos, and to issue another title in the sole name of the plaintiff herein; 6. Declaring the Contract, Annex M of the Complaint, between plaintiff and defendant Sandoval null and void; 7. Ordering the cancellation of TCT No. 210877 in the names of defendant Sandoval and defendant minor Teofilo S. Carlos II and ordering the Register of Deeds of Manila to issue another title in the exclusive name of plaintiff herein. 8. Ordering the cancellation of TCT No. 210878 in the names of defendant Sandoval and defendant minor Teofilo S. Carlos II and ordering the Register of Deeds of Manila to issue another title in the sole name of plaintiff herein. [9]

Upon promulgation of the Summary Judgment, Carlos moved before the RTC for execution pending appeal. The RTC granted the motion for execution pending appeal upon the filing of a bond. [10] On 27 May 1996, the RTC issued aWrit of Execution.

Meanwhile, respondents filed a Motion for Reconsideration of the Summary Judgment , which was denied in an Orderdated 20 May 1996. Respondents then appealed the RTC Decision to the Court of Appeals, wherein such appeal was docketed as CA-G.R. CV No. 53229. The case was raffled to the appellate courts Fourteenth Division for completion of records. Sandoval and Carlos also filed

a Petition for Certiorari with Temporary Restraining Order dated 2 June 1996. This special civil action primarily attacked the allowance of execution pending appeal, and prayed for the annulment of the Order granting execution pending appeal, and of the Writ of Execution

On 10 December 1996, in CA-G.R. CV No. 53229, respondents filed a Motion for Judgment On the Attachment Bond. They noted that the Court of Appeals had already ruled that the Writ of Preliminary Attachment issued by the RTC was improperly granted and that its Decision, as affirmed by the Supreme Court, had attained finality. Accordingly, they were entitled to damages under Section 20, Rule 57 of the then Rules of Civil Procedure, which governed claims for damages on account of unlawful attachment. In support of their allegation of damages, they cite the Notice of Garnishment served on PNB Malolos Branch, where Felicidad Carlos maintained

deposits amounting to P15,546,121.98.[11] Also presented in support of the motion was a Notice of Delivery/Payment by the RTC Sheriff, directing the PNB Malolos Branch to deliver the amounts previously garnished by virtue of the Writ of Execution dated 27 May 1996;[12] a Manifestation filed by PNB dated 19 July 1996 in CA-G.R. SP No. 40819, stating that PNB had already delivered to the RTC Sheriff on 27 June 1996 the amount of P15,384,509.98 drawn against the accounts of Carlos; and a Certification to the same effect issued by the PNB Malolos Branch. In an Addendum to Motion for Judgment on the Attachment Bond, respondents additionally prayed for moral and exemplary damages. [13]

After various pleadings were duly filed by the parties, the Court of Appeals Special Fourth Division issued aResolution dated 23 March 1998, certifying that all the necessary pleadings have been filed, and that the case may already be referred to the Raffle Committee for assignment to a ponente for study and report. The same Resolutionlikewise denied without elaboration a Motion to Dismiss on the ground of forum-shopping filed earlier by Carlos.[14] On such denial, Carlos filed a Motion for Reconsideration. Respondents likewise filed a Motion for Partial Reconsideration dated 17 April 1998, arguing that under the Revised Internal Rules of the Court of Appeals (RIRCA), the case may be re-raffled for assignment for study and report only after there is a resolution that the case is deemed submitted for decision. [15] They pointed out that re-raffle could not yet be effected, as there were still pending incidents, particularly the motions for reconsideration of Carlos and themselves, as well as the Motion for Judgment on Attachment Bond. On 26 June 1998, the Court of Appeals Former Special Fourth Division promulgated two resolutions.
[16]

The first, in response to Carloss Motion for Reconsideration , again denied Carloss Motion to

Dismiss the Appeal and Motion for Suspension, but explained the reasons for such denial. The second resolution is at the center of the present petitions. The assailed Resolution agreed with respondents that it was first necessary to resolve the pending incidents before the case could be reraffled for study and report. Accordingly, the Court of Appeals proceeded to rule on these pending incidents. While the first resolution dwelt on the pending motions filed by Carlos, thisResolution tackled the other matter left unresolved, the Motion for Judgment on Attachment Bond. The Court of Appeals found the claim for damages meritorious, citing the earlier decisions ruling that Carlos was not entitled to the preliminary attachment. Invoking Section 20, Rule 57 of the Rules of Court, as well as jurisprudence, [17] the Court of Appeals ruled that it was not necessary for the determination of damages on the injunction bond to await the decision on appeal.

The Court of Appeals then proceeded to determine to what damages respondents were entitled to. In ruling that the award of actual damages was warranted, the court noted: It is also not disputed that the PNB, on June 27, 1996, issued two managers checks: MC No. 938541 forP4,932,621.09 and MC 938542 for P10,451,888.89 payable to the order of Luis C. Bucayon II, Sheriff IV, RTC, Branch 256, Muntinlupa, duly received by the latter in the total amount of PESOS FIFTEEN MILLION THREE HUNDRED EIGHTY FOUR THOUSAND FIVE HUNDRED NINE & 98/100 (P15,384,509.98), drawn against the accounts of Ms. Felicidad Sandoval Vda. de Carlos which were earlier garnished for the satisfaction of the above-mentioned writ of attachment (Annex E, Motion for Judgment on the Attachment Bond, pp. 7-8)[18] ... . The contention of [Carlos] that the writ of attachment was not implemented falls flat on the face of the manifestation of PNB that the delivery of the garnished P15,384,509.98 to him was effected through the sheriff. [19]

The Court of Appeals found that moral and exemplary damages were not warranted, there being no malice in pursuing the attachment. The appellate court also found the claim of P2,000,000.00 for attorneys fees as excessive, and reduced the sum by half. Correspondingly, the dispositive portion of the assailed Resolution reads: WHEREFORE, premises considered, judgment is hereby rendered against the attachment bond, ordering SIDDCOR INSURANCE CORPORATION and plaintiffappellee to pay defendants-appellants, jointly and severally, the sum ofP15,384,509.98 and 12% interest per annum from June 27, 1996 when the unlawful garnishment was effected until fully paid and P1,000,000.00 as attorneys fees with 6% interest thereon from the trial courts decision on April 8, 1986 until fully paid. SO ORDERED.[20]

Both Carlos and SIDDCOR filed their respective motions for reconsideration of the Resolution. For their part, respondents filed a Motion for Immediate Execution dated 7 August 1998 in regard to the Resolution of 26 June 1998awarding them damages.

In the Resolution dated 10 October 1998,[21] the Court of Appeals denied the motions for reconsideration and granted the Motion for Immediate Execution . In granting the Motion for Immediate Execution, the Court of Appeals cited the reasons that the appeal to be undertaken from the 26 June

1998 Resolution was patently dilatory; that there were no material and substantial defenses against the motion for judgment on the attachment bond, rendering the appeal pro-forma and dilatory; that Sandoval was of advanced age and might not enjoy the fruits of the judgment on the attachment bond; and that immediate execution would end her suffering due to the arbitrary garnishment of her account pursuant to an improper attachment.[22]

In its Motion for Reconsideration, SIDDCOR explicitly assailed the allowance of the Motion for Immediate Execution.[23] This was denied by the Court of Appeals in a Resolution dated 22 December 1998.[24]

From these antecedents, the following petitions were filed before this Court:

G.R. No. 135830

This Appeal by Certiorari with Prayer for Temporary Restraining Order/Preliminary Injunction dated 26 October 1998 filed by Carlos assailed the two resolutions of the Court of Appeals both dated 26 June 1998, as well as the Resolution of 10 October 1998, which denied Carloss motion for reconsideration. Carlos argues that the Court of Appeals, through the Former Special Fourth Division, could not have resolved the Motion for Judgment on the Attachment Bond since the case had not yet been re-raffled under the two-raffle system for study and report; that the Court of Appeals erred in resolving the motion without conducting any hearing; that the Court of Appeals had no jurisdiction over the motion as the docketing fees had not yet been filed; that the motion for judgment, which did not contain any certification against forum-shopping, was an application subject to the requirements of certification against forumshopping; that there was no supporting evidence to support the award of damages; and that the Court of Appeals committed grave abuse of discretion in denying the Motion for Reconsideration without adverting to specific reasons mentioned for the denial of each issue. [25]

Carlos likewise ascribes grave abuse of discretion to the Court of Appeals in its other Resolution dated 26 June 1998 for its refusal to dismiss CA-G.R. CV No. 53229 on the ground of forum-shopping, adding that the appellate court should have deferred resolution of the Motion for

Judgment on the Attachment Bond considering the prejudicial question raised in Carloss motion to dismiss the main case on the ground of forum-shopping.

G.R. No. 136035

This concerns a Petition for Review filed by SIDDCOR, likewise challenging the Resolution of 26 June 1998 of the Court of Appeals and the 10 October 1998 Resolution wherein Siddcors Motion for Reconsideration, among others, was denied. Siddcor argues therein that the Court of Appeals erred in ruling on the motion for damages without awaiting judgment in the main case; granting that damages may be awarded, these should encompass only such damages incurred during the pendency of the appeal; and that a hearing was necessary to prove the claim for damages and the appellate court erred in granting the award for damages despite lack of hearing.

G.R. No. 137743

The third petition for adjudication, a Petition for Certiorari under Rule 65 with Prayer for Temporary Restraining Order or Preliminary Injunction, was also filed by SIDDCOR. This petition, dated 8 March 1999, specifically assails the allowance by the Court of Appeals of the immediate execution of the award of damages, made through the resolutionsdated 10 October 1998 and 22 December 1998.

SIDDCOR hereunder argues that Section 2, Rule 39 of the Rules of Civil Procedure requires that execution of a judgment or final order pending appeal may be made only on motion of the prevailing party and may be made even before the expiration of the period to appeal. [26] Respondents had argued in their Motion for Immediate Execution that the judgment sought to be executed (that on the attachment bond) was interlocutory and not appealable, yet cited rulings on execution pending appeal under Section 2, Rule 39 in support of their position. SIDDCOR cites this inconsistency as proof of a change of theory on the part of respondents which could not be done for the theories are incompatible. Such being the case, SIDDCOR argues, the Court of Appeals gravely abused its discretion in granting immediate execution since respondents had filed its motion on the premise that the award on the judgment bond was interlocutory and not appealable. SIDDCOR also claims that the judgment on the attachment bond is not interlocutory, citing Stronghold Insurance Co., Inc. v. Court of Appeals [27] wherein it was ruled that such indeed constitutes a final and appealable order.

SIDDCOR points out that no hearing was conducted on the Motion for Immediate Execution despite the requirement in Section 2, Rule 39 that discretionary execution may only issue

upon good reasons to be stated in a special order after due hearing. SIDDCOR likewise notes that the motion granting immediate execution was granted in the very same resolution which had denied the motion for reconsideration of the resolution sought to be immediately executed. For SIDDCOR, such constituted a denial of procedural due process insofar as its statutory right to appeal was concerned, as the resolution that it intended to appeal from was already the subject of immediate execution.

Finally, SIDDCOR contests the special reasons cited by the Court of Appeals in granting the Motion for Immediate Execution. Facts Arising Subsequent to the Filing of Instant Petitions

On 7 May 1999, the Court of Appeals issued a Writ of Execution directing the enforcement of the judgment on the attachment bond.[28] However, in a Resolution dated 9 June 1999, this Court through the First Division issued aTemporary Restraining Order, enjoining the enforcement of the said Writ of Execution.

On 15 October 2002, the Court of Appeals First Division rendered a Decision[29] on the merits of CA-G.R. CV No. 53229, setting aside the Summary Judgment and ordering the remand of the case for further proceedings.[30] Both parties filed their respective motions for reconsideration. [31] In addition, Carlos filed a motion to inhibit the author of the assailed decision, Justice Rebecca de Guia-Salvador, [32] who thereafter agreed to inhibit herself. [33] Then on 7 August 2003, the Court of Appeals Former First Division issued a Resolution deferring action on the motions for reconsideration in light of the temporary restraining order issued by this Court until the resolution of the present petitions.

The factual background may be complicated, but the court need only concern itself with the propriety of the judgment on the attachment bond and the subsequent moves to secure immediate execution of such judgment. Should this Court be called upon to tackle the merits of the original action, Carloss complaint, it shall be in the review of the final resolution of the Court of Appeals in CA-G.R. CV No. 53229. Consolidation of Issues in G.R. Nos. 135830 and 136035

The petitions in G.R. Nos. 135830 and 136035 are concerned with the award of damages on the attachment bond. They may be treated separately from the petition in G.R. No. 137743, which relates to the immediate execution of the said award.

We consolidate the main issues in G.R. Nos. 135830 and 136035, as follows: (1) whether the assailed judgment on the attachment bond could have been rendered, as it was, prior to the adjudication of the main case; (2) whether the Court of Appeals properly complied with the hearing requirement under Section 20, Rule 57 prior to its judgment on the attachment bond; and (3) whether the Court of Appeals properly ascertained the amount of damages it awarded in the judgment on the attachment bond.

Resolving these issues requires the determination of the proper scope and import of Section 20, Rule 57 of the 1997 Rules of Civil Procedure. The provision governs the disposal of claims for damages on account of improper, irregular or excessive attachment. SECTION 20. Claim for damages on account of improper, irregular or excessive attachment.An application for damages on account of improper, irregular or excessive attachment must be filed before the trial or before appeal is perfected or before the judgment becomes executory, with due notice to the attaching obligee or his surety or sureties, setting forth the facts showing his right to damages and the amount thereof. Such damages may be awarded only after proper hearing and shall be included in the judgment on the main case. If the judgment of the appellate court be favorable to the party against whom the attachment was issued, he must claim damages sustained during the pendency of the appeal by filing an application in the appellate court with notice to the party in whose favor the attachment was issued or his surety or sureties, before the judgment of the appellate court becomes executory. The appellate court may allow the application to be heard and decided by the trial court. Nothing herein contained shall prevent the party against whom the attachment was issued from recovering in the same action the damages awarded to him from any property of the attaching obligee not exempt from execution should the bond or deposit given by the latter be insufficient or fail to fully satisfy the award. (Emphasis supplied.)

Section 20 essentially allows the application to be filed at any time before the judgment becomes executory. It should be filed in the same case that is the main action, and cannot be instituted separately.
[34]

It should be filed with the court having jurisdiction over the case at the time of the application. [35] The

remedy provided by law is exclusive and by failing to file a motion for the determination of the damages on time and while the judgment is still under the control of the court, the claimant loses his right to damages.[36]

There is no question in this case that the Motion for Judgment on the Attachment Bond filed by respondents on 10 December 1996 was properly filed since it was filed with the Court of Appeals during the pendency of the appeal in the main case and also as an incident thereto. The core questions though lie in the proper interpretation of the condition under Section 20, Rule 57 that reads: Such damages may be awarded only after proper hearing and shall be included in the judgment on the main case. Petitioners assert that there was no proper hearing on the application for damages and that the Court of Appeals had wrongfully acted on the application in that it resolved it prior to the rendition of the main judgment. Such Damages May Be Awarded Only After Proper Hearing.

We first discuss whether the proper hearing requirement under Section 20, Rule 57 had been satisfied prior to the award by the Court of Appeals of damages on the attachment bond. Section 20 of Rule 57 requires that there be a proper hearing before the application for damages on the attachment bond may be granted. The hearing requirement ties with the indispensable demand of procedural due process. Due notice to the adverse party and its surety setting forth the facts supporting the applicant's right to damages and the amount thereof under the bond is essential. No judgment for damages may be entered and executed against the surety without giving it an

opportunity to be heard as to the reality or reasonableness of the damages resulting from the wrongful issuance of the writ.[37] In Paramount Insurance v. Court of Appeals ,[38] the Court held that under the rule, it was neither mandatory nor fatal that there should be a separate hearing in order that damages upon the bond can be claimed, ascertained and awarded. [39] What is necessary only is for the attaching party and his surety or sureties to be duly notified and given the opportunity to be heard. [40] In this case, both Carlos and SIDDCOR were duly notified by the appellate court of the Motion for Judgment on the Attachment Bond and were required to file their respective comments thereto.[41] Carlos and SIDDCOR filed their respective comments in opposition to private

respondents motion.[42] Clearly, all the relevant parties had been afforded the bare right to be heard on the matter. Concededly, the facts of this case differ from that in Paramount, wherein the award of damages was predicated under Section 8, Rule 58, and the trial on the merits included the claim for damages on the attachment bond. The Court did note therein that the counsel of the surety was present during the hearings.[43] In this case, unlike in Paramount, there were no open court hearings conducted by the Court of Appeals, and it is precisely this absence that the petitioners assert as fatal.

Plainly, there is no express requirement under the rule that the hearing be done in open court, or that the parties be allowed to confront adverse witnesses to the claim of damages on the bond. The proper scope of the hearing requirement was explained before Paramount in Peroxide Philippines Corp. v. Court of Appeals,[44] thus: . . . [It] is undeniable that when the attachment is challenged for having been illegally or improperly issued, there must be a hearing with the burden of proof to sustain the writ being on the attaching creditor. That hearing embraces not only the right to present evidence but also a reasonable opportunity to know the claims of the opposing parties and meet them. The right to submit arguments implies that opportunity, otherwise the right would be a barren one. It means a fair and open hearing.

From this pronouncement, we can discern that the proper hearing contemplated would not merely encompass the right of the parties to submit their respective positions, but also to present evidence in support of their claims, and to rebut the submissions and evidence of the adverse party. This is especially crucial considering that the necessary elements to be established in an application for damages are essentially factual: namely, the fact of damage or injury, and the quantifiable amount of damages sustained. Such matters cannot be established on the mere say-so of the applicant, but require evidentiary support. At the same time, there was no equivocal statement from the Court in Peroxide that the hearing required under the rule should be a full-blown hearing on the merits

In this case, we rule that the demands of a proper hearing were satisfied as of the time the Court of Appeals rendered its assailed judgment on the attachment bond. The circumstances in this case that we consider particularly telling are the settled premises that the judicial finding on the wrongfulness of the attachment was then already conclusive and beyond review, and that the amount of actual damages sustained was likewise indubitable as it indeed could be found in the official case record in CA-G.R. CV No. 53229. As a result, petitioners would have been precluded from either raising the defenses that the

preliminary attachment was valid or disputing the amount of actual damages sustained by reason of the garnishment. The only matter of controversy that could be litigable through the traditional hearing would be the matter of moral and exemplary damages, but the Court of Appeals appropriately chose not to award such damages.

Moreover, petitioners were afforded the opportunity to counter the arguments extended by the respondents. They fully availed of that right by submitting their respective comments/oppositions. In fine, the due process guarantee has been satisfied in this case.

It should be noted that this case poses a situation different from what is normally contemplated under Section 20, Rule 57wherein the very wrongfulness of the attachment remains one of the issues in contention in the main case. In such a case, there would be a greater demand for a more extensive hearing on the application of damages. The modality of hearing should remain within the discretion of the court having jurisdiction to hear the application for damages. The only demand, concordant to due process, would be the satisfaction of the right to be heard, to present evidence, and to rebut the evidence and arguments of the opposing party. Some disquisition is necessary on whether or not, as petitioners submit, a full-blown hearing in open court is compulsory under Section 20, Rule 57. To impose this as a mandatory requirement would ultimately prove too onerous to our judicial system. Perhaps such a demand would be less burdensome on the regional trial courts, which, as a matter of routine, receive testimonial or documentary evidence offered de novo, and to formulate conclusions on the admissibility and credibility of the same. However, a different situation applies if it is the Court of Appeals or the Supreme Court before which the application for damages is filed. Both these courts, which are capacitated to receive and act on such actions, are generally not triers of facts, and do not, in the course of daily routine, conduct hearings. It is partly for such reason that Section 20, Rule 57 authorizes these appellate courts to refer the application for damages to the trial court for hearing and decision. The trial courts are functionally attuned to ascertain and evaluate at the first instance the necessary factual premises that would establish the right to damages. Still, reference of the application for damages to the trial court is discretionary on the part of the appellate courts. The latter, despite their traditional appellate jurisdiction and review function, are still empowered under Section 20 to rule on the application for damages, notwithstanding the factual dimension such question presents. To impose as mandatory on the Court of Appeals or the Supreme Court to hear the application for damages through full-blown hearings in open court is supremely unwise and beyond the demands of

Section 20, Rule 57. The effect would be unduly disruptive on the daily workflow of appellate courts such as the Court of Appeals and the Supreme Court, which rarely conduct open court hearings. Neither could the Court see what is so markedly special about an application for damages, fact-oriented as it may be, that would require it to be heard by the appellate courts in open court when no such mandatory rule applies to other judicial matters for resolution that are also factual in nature. For example, the review of death penalty convictions by the Court of Appeals and the Supreme Court necessitates a thorough evaluation of the evidence presented, notwithstanding the prior factual appreciation made by the trial court.[45]Notwithstanding the factual nature of the questions involved, there is no rule requiring the Court of Appeals or the Supreme Court to call death penalty cases for hearing or oral argument. If no such mandatory rule for hearing is imposed on the appellate courts when the supreme penalty of death is involved, why then should an exceptional rule be imposed in the case for the relatively insignificant application for damages on the attachment bond?

If open court hearings are ever resorted to by appellate courts, such result from the exercise of discretion rather than by imposition by statute or procedural rule. Indeed, there is no existing statute, procedural rule, or jurisprudential fiat that makes it mandatory on the Court of Appeals or the Supreme Court to conduct an open-court hearing on any matter for resolution. There is nothing demonstrably urgent with an application for damages under Section 20, Rule 57 that would necessitate this Court to adopt an unprecedented rule mandating itself or the Court of Appeals to conduct full-blown open court hearings on a particular type of action.

This pronouncement does not contradict our ruling in Hanil Development v. IAC,[46] which Carlos interprets as requiring the Court of Appeals to conduct a proper hearing on an application for damages on the attachment bond. Hanilconcerned the refusal by the Intermediate Appellate Court (now Court of Appeals) to take cognizance of the application for damages on the attachment bond, such refusal being reversed by the Court, which ruled that the Intermediate Appellate Court (IAC) had jurisdiction to accept and rule on such application. While the Court therein recognized that the IAC was empowered to try cases and conduct hearings, or otherwise perform acts necessary to resolve factual issues in cases, [47] it did not require the appellate court to conduct a hearing in open court, but merely to reinstate the application for damages. Admittedly, the dispositive portion of Hanil required the Court of Appeals to conduct hearings on the application for damages,[48] but nowhere in the decision was a general rule laid down mandating the appellate court to conduct such hearings in open court. The ascertainment of the need to conduct full-

blown hearings is best left to the discretion of the appellate court which chooses to hear the application. At the same time, the Court cautions the appellate courts to carefully exercise their discretion in determining the need for open-court hearings on the application for damages on the attachment bond. The Court does not sanction the indolent award of damages on the attachment bond by the appellate court without affording the adverse party and the bonding company concerned the opportunity to present their sides and adduce evidence in their behalf, or on the basis of unsubstantiated evidence. And Shall be Included in the Judgment on the Main Case

Section 20, Rule 57 does state that the award of damages shall be included in the judgment on the main case, and seemingly indicates that it should not be rendered prior to the adjudication of the main case.

The rule, which guarantees a right to damages incurred by reason of wrongful attachment, has long been recognized in this jurisdiction. [49] Under Section 20, Rule 57 of the 1964 Rules of Court, it was provided that there must be first a judgment on the action in favor of the party against whom attachment was issued before damages can be claimed by such party. [50] The Court however subsequently clarified that under the rule, recovery for damages may be had by the party thus prejudiced by the wrongful attachment, even if the judgment be adverse to him. [51] The language used in the 1997 revision of the Rules of Civil Procedure leaves no doubt that there is no longer need for a favorable judgment in favor of the party against whom attachment was issued in order that damages may be awarded. It is indubitable that even a party who loses the action in main but is able to establish a right to damages by reason of improper, irregular, or excessive attachment may be entitled to damages. This bolsters the notion that the claim for damages arising from such wrongful attachment may arise and be decided separately from the merits of the main action. As noted by the Court in Philippine Charter Insurance Corp. v. Court of Appeals :[52]

The surety does not, to be sure, become liable on its bond simply because judgment is subsequently rendered against the party who obtained the preliminary attachment. The surety becomes liable only when and if "the court shall finally adjudge that the applicant was not entitled to the attachment." This is so regardless of the nature and character of the judgment on the merits of the principal claims, counterclaims or cross-claims, etc. asserted by the parties against each other. Indeed, since an applicant's cause of action may be entirely different from the ground relied upon by him for a preliminary attachment, it may well be that although the evidence warrants

judgment in favor of said applicant, the proofs may nevertheless also establish that said applicant's proferred ground for attachment was inexistent or specious and hence, the writ should not have issued at all ; i.e., he was not entitled thereto in the first place. In that event, the final verdict should logically award to the applicant the relief sought in his basic pleading, but at the same time sentence himusually on the basis of a counterclaimto pay damages caused to his adversary by the wrongful attachment. [Emphasis supplied.]

Moreover, a separate ruleSection 8, Rule 58 covers instances when it is the trial court that awards damages upon the bond for preliminary injunction of the adverse party. Tellingly, it requires that the amount of damages to be awarded be claimed, ascertained, and awarded under the same procedure prescribed in Section 20 of Rule 57. In this case, we are confronted with a situation wherein the determination that the attachment was wrongful did not come from the trial court, or any court having jurisdiction over the main action. It was rendered by the Court of Appeals in the exercise of its certiorari jurisdiction in the original action reviewing the propriety of the issuance of theWrit of Preliminary Attachment against the private respondents. Said ruling attained finality when it was affirmed by this Court. The courts are thus bound to respect the conclusiveness of this final judgment, deeming as it does the allowance by the RTC of preliminary attachment as improper. This conclusion is no longer subject to review, even by the court called upon to resolve the application for damages on the attachment bond. The only matter left for adjudication is the proper amount of damages. Nevertheless, Section 20, Rule 57 explicitly provides that the award for damages be included in the judgment on the main case. This point was apparently not lost on the Court of Appeals when it rendered its Resolution dated 23 March 1998, certifying that the case may now be referred to the Raffle Committee for assignment to a ponente. The appellate court stated therein: The Resolution of defendants-appellants motion for judgment on the attachment may be incorporated in the decision by the ponente for study and report,[53] and such observation is in conformity with Section 20. However, this reasoning was assailed by respondents, who argued that the motion for judgment on the attachment bond was a pending incident that should be decided before the case can be re-raffled to a ponente for decision. Respondents may be generally correct on the point that a case can only be deemed submitted for decision only after all pending incidents are resolved. Yet since Section 20, Rule 57 provides that their application for damages on the attachment bond shall be included in the judgment on the main case, it is clear that the award for damages need not be resolved before the case is submitted

for decision, but should instead be resolved and included in the judgment on the main case, or the decision on the Appeal by Certiorari filed by the respondents. Thus, the action of the Court of Appeals in resolving the application for damages even before the main judgment was issued does not conform to Section 20, Rule 57. However, the special particular circumstances of this case lead us to rule that such error is not mortal to the award of damages. As noted earlier, the award of damages was made after a proper hearing had occurred wherein all the concerned parties had been given the opportunity to present their arguments and evidence in support and in rebuttal of the application for damages. The premature award of damages does not negate the fact that the parties were accorded due process, and indeed availed of their right to be heard.

Moreover, we are compelled to appreciate the particular circumstance in this case that the right of private respondents to acquire relief through the award of damages on account of the wrongful preliminary attachment has been conclusively affirmed by the highest court of the land. This differs from the normal situation under Section 20, Rule 57 wherein the court having jurisdiction over the main action is still required to ascertain whether the applicant actually has a right to damages. To mandatorily require that the award of damages be included in the judgment in the main case makes all the sense if the right to damages would be ascertained at the same time the main judgment is made. However, when the said right is already made viable by reason of a final judgment which is no longer subject to review, there should be no unnecessary impediments to its immediate implementation. And finally, any ruling on our part voiding the award of damages solely for the reason that it was not included in the judgment on the main case, and remanding the motion to the Court of Appeals for proper adjudication together with the main case may exhibit fealty to the letter of the procedural rule, but not its avowed aims of promoting a just and speedy disposition of every action and proceeding. After all, if we were to compel the Court of Appeals to decide again on the application for damages and incorporate its ruling in the judgment on the main action, the appellate court will be examining exactly the same evidence and applying exactly the same rules as it already did when it issued the assailed resolution awarding damages on the bond. This would be unnecessarily redundant especially considering that the Supreme Court had already affirmed that there was wrongful attachment in this case.

There is also the fact that remanding the question of damages, singly for the purpose of adhering to the letter of the procedural rule, would further prolong the resolution of the main case, which has been with the Court of Appeals for more than nine years now. [54] Our Rules of Court precisely requires liberal construction of the procedural rules to promote the objective of securing a just, speedy and inexpensive

disposition of every action and proceeding. [55] With this precept, all the more justification is supplied for allowing the award for damages despite its apparent prematurity, if it is in all other respects proper.

The same reasons apply in resolving the question of whether the Court of Appeals could have decided the Motion for Judgment on the Attachment Bond considering that the case had not yet been reraffled under the two-raffle system for study and report. Under Section 5, Rule 3 of the RIRCA, a case filed with the Court of Appeals undergoes two raffles for assignment to a particular Justice. The first raffle is made for completion of records.[56] Afterwards, all raffled appealed cases, the records of which have been completed and submitted for decision, shall be re-raffled for assignment to a Justice for study and report.[57] The fact that Section 20, Rule 57 provides that the award of damages on the attachment bond shall be included in the judgment on the main case necessarily implies that it is to be made only after the case has been re-raffled for study and report, and concurrently decided with the judgment of the ponente in the main case. Again, the Court of Appeals failed to consider Section 20, Rule 57 when it acted upon the application even before the second raffle was made.

Had Section 20, Rule 57 been faithfully complied with, a different Justice of the Court of Appeals would have penned the ruling on the application for damages, in accordance with the RIRCA. Yet this circumstance does not outweigh the other considerations earlier mentioned that would warrant a liberal interpretation of the procedural rules in favor of respondents. The parties had adduced all their arguments and evidence before the Court of Appeals, and indeed, these were appreciated on first instance by Justice Demetria, who eventually penned the assailed resolutions. There was already a final determination that the attachment was wrongful. And any delay brought about by requiring that it be theponencia, determined after the second raffle, who decides the application for damages may bear pro forma adherence to the letter of the rule, but would only cause the delay of the resolution of this longpending case. Procedural rules are designed, and must therefore be so interpreted as, to give effect to lawful and valid claims and not to frustrate them.[58]

Even SIDDCOR acknowledges that there are recognized instances where the award of damages or judgment on the attachment bond may not be included in the decision on the main case, such as if the

main case was dismissed for lack of jurisdiction and no claim for damages could have been presented in the main case.[59] Scope of Damages Properly Awardable

Next, we examine the particular award of damages made in this case, consisting of P15,384,509.98, plus interest, as well as P1,000,000.00 as attorneys fees. There seems to be no dispute that the former amount constituted the amount drawn against the account of Sandoval by reason of the writ of execution issued by the trial court on 27 May 1996. This fact was confirmed by the PNB, in

its Manifestation dated 19 July 1996, confirming the garnishment. Respondents burden in proving damages in this case was considerably lessened by the fact that there was already a final judgment, no longer subject to review, that the preliminary attachment allowed by the trial court was indeed wrongful. Hence, all that was necessary to be proved was the amount of damage actually sustained by respondents by reason of the wrongful attachment. It is unquestioned that by virtue of the writ of preliminary attachment, a Notice of Garnishment was served upon the PNB over deposit accounts maintained by respondents. Said Notice of Garnishmentplaced under the control of the RTC all the accounts maintained by respondents, and prevented the transfer or disposition of these accounts.[60] Then the subsequent Writ of Execution dated 27 May 1996 ordered the delivery to Carlos of these accounts earlier subjected to garnishment.[61] Clearly, the amount of actual pecuniary loss sustained by respondents has been well established. TheManifestation submitted by the PNB further affirmed the actual amount seized by Carlos, an amount which could not have been acquired had it not been for the writ of preliminary attachment which was wrongfully issued.

Carlos lamely argues in his petition that there was no concrete or supporting evidence to justify the amount of actual damages, a claim that is belied by the official case records. The more substantive argument is presented by SIDDCOR, which submits that any damages that may be awarded to respondents can include only those that were incurred, if any, during the pendency of the appeal. But this contention is belied by Section 4, Rule 57 of the 1997 Rules of Civil Procedure, which provides that the bond issued for preliminary attachment is conditioned that the applicant will pay all the costs which may be adjudged to the adverse party and all damages which he may sustain by reason of the attachment, if the court shall finally adjudge that the applicant was not entitled thereto. [62]

The case Paramount Insurance Corp. v. Court of Appeals [63] is instructive. It discusses the scope of the bond executed by upon an application for preliminary injunction, [64] which similarly covers all damages which [may be] sustain[ed] by reason of the injunction or temporary restraining order if the court should finally decide that the applicant was not entitled thereto. [65] The surety in that case claimed that it could be liable only to the amount of damages accruing from the time the injunction bond was issued until the termination of the case, and not from the time the suit was commenced. [66] In rebutting this claim, the Court ruled: . . . . Rule 58, Section 4(b), provides that a bond is executed in favor of the party enjoined to answer for all damages which he may sustain by reason of the injunction. This Court already had occasion to rule on this matter in Mendoza v. Cruz, where it held that "(t)he injunction bond is intended as a security for damages in case it is finally decided that the injunction ought not to have been granted . It is designed to cover all damages which the party enjoined can possibly suffer. Its principal purpose is to protect the enjoined party against loss or damage by reason of an injunction." No distinction was made as to when the damages should have been incurred.[67]

Our ruling in Philippine Charter Insurance Corp. v. Court of Appeals , relied upon by the Court of Appeals, squarely applies to this case: Under the circumstances, too, there can be no gainsaying the suretys full awareness of its undertakings under its bond: that, as the law puts it: "the plaintiff will pay all costs which may be adjudged to the defendant(s), and all damages which may be sustained by reason of the attachment, if the same shall finally be adjudged to have been wrongful and without cause," and that those damages plainly comprehended not only those sustained during the trial of the action but also those during the pendency of the appeal. This is the law, and this is how the surety's liability should be understood. The surety's liability may be enforced whether the application for damages for wrongful attachment be submitted in the original proceedings before the Trial Court, or on appeal, so long as the judgment has not become executory. The surety's liability is not and cannot be limited to the damages caused by the improper attachment only during the pendency of the appeal. That would be absurd. The plain and patent intendment of the law is that the surety shall answer for all damages that the party may suffer as a result of the illicit attachment, for all the time that the attachment was in force; from levy to dissolution. . . . The fact that the second paragraph of the rule speaks only of "damages sustained during the pendency of the appeal" is of no moment; it obviously proceeds from the assumption in the first paragraph that the award for the damages suffered during the pendency of the case in the trial court was in fact "included in the final judgment" (or applied for therein before the appeal was perfected or the judgment became executory); hence, it states that the damages additionally suffered thereafter, i.e., during the pendency of the appeal, should be claimed before the judgment of the appellate tribunal becomes executory. It however bears repeating that where. as in the case at bar, the judgment of the Trial Court has expressly or impliedly sustained the attachment and thus has given rise to no occasion to speak of, much less, file an application for damages for wrongful attachment, and it is only in the decision of the Court of Appeals that the attachment is declared wrongful and that the applicant "was not entitled

thereto," the rule is, as it should be, that it is entirely proper at this time for the application for damages for such wrongful attachment to be filed i.e., for all the damages sustained thereby, during all the time that it was in force, not only during the pendency of the appeal. . . .[68]

The rule is thus well-settled that the bond issued upon an application for preliminary attachment answers for all damages, incurred at whatever stage, which are sustained by reason of the attachment. The award of actual damages by the Court of Appeals is thus proper in amount. However, we disagree that the rate of legal interest be counted from the date of the unlawful garnishment, or on 27 June 1996. Properly, interest should start to accrue only from the moment it had been finally determined that the attachment was unlawful, since it is on that basis that the right to damages comes to existence. In this case, legal interest commences from the date the Court of Appeals decision in CA-G.R. SP No. 39267 became final, by reason of its affirmation by this Court.

The award of attorneys fees in the amount of P1,000,000.00 is also questioned before this Court, considering that the Court of Appeals did not award moral or exemplary damages. The general rule may be that an award of attorneys fees should be deleted where the award of moral and exemplary damages are eliminated.[69] Nonetheless, attorneys fees may be awarded under the Civil Code where the court deems it just and equitable that attorneys fees and expenses of litigation should be recovered, [70] even if moral and exemplary damages are unavailing.[71] Particularly, the Court has recognized as just and equitable that attorney's fees be awarded when a party is compelled to incur expenses to lift a wrongfully issued writ of attachment. [72] The amount of money garnished, and the length of time respondents have been deprived from use of their money by reason of the wrongful attachment, all militate towards a finding that attorneys fees are just and equitable under the circumstances. However, we deem the amount ofP1,000,000.00 as excessive, and modify the award of attorneys fees to P500,000.00 which represents merely approximately three percent of the actual damages suffered by and awarded to respondents. We also delete the imposition of legal interest made by the Court of Appeals on the awarded attorneys fees.

Other Issues Raised in G.R. No. 135830

The issues raised in G.R. No. 136035 have been dispensed with, and the remaining issues in G.R. No. 135830 are relatively minor. There is no need to dwell at length on them.

Carlos insists that respondents were liable to have paid docket fees upon filing of their Motion for Judgment on Attachment Bond, on the theory that they claimed therein for the first time the alleged damages resulting from the dissolved attachment. The said motion is characterized as an initiatory proceeding because it is claimed therein for the first time, the damages arising from the attachment. In the same vein, Carlos argues that the absence of a certification against forum-shopping attached to the motion renders the said motion as fatal. Again, it is pointed out that initiatory pleadings must contain the said certification against forum-shopping.

Our ruling in Santo Tomas University Hospital v. Surla [73] is instructive. It was argued therein that the requirement of the certification against forum-shopping, as contained in Administrative Circular No. 04-94,
[74]

covered compulsory counterclaims. The Court ruled otherwise: It bears stressing, once again, that the real office of Administrative Circular No. 0494, made effective on 01 April 1994, is to curb the malpractice commonly referred to also as forum-shopping. . . . The language of the circular distinctly suggests that it is primarily intended to cover an initiatory pleading or an incipient application of a party asserting a claim for relief. It should not be too difficult, the foregoing rationale of the circular aptly taken, to sustain the view that the circular in question has not, in fact, been contemplated to include a kind of claim which, by its very nature as being auxiliary to the proceeding in the suit and as deriving its substantive and jurisdictional support therefrom, can only be appropriately pleaded in the answer and not remain outstanding for independent resolution except by the court where the main case pends. Prescinding from the foregoing, the proviso in the second paragraph of Section 5, Rule 8, of the 1997 Rules of Civil Procedure, i.e., that the violation of the anti-forum shopping rule "shall not be curable by mere amendment . . . but shall be cause for the dismissal of the case without prejudice," being predicated on the applicability of the need for a certification against forum shopping, obviously does not include a claim which cannot be independently set up . [75] (Emphasis supplied.)

It is clear that under Section 20, Rule 57, the application for damages on the attachment bond cannot be independently set up, but must be filed in the main case, before the judgment therein becomes final and executory.Santo Tomas squarely applies in determining that no certification against forumshopping was required in the Motion for Judgment on the Attachment Bond . The same reasoning also sustains a ruling that neither legal fees were required for the filing of the said motion. Section 1, Rule 141 of the Rules of Court provides that legal fees are prescribed upon the filing of the pleading or other application which initiates an action or proceeding. [76] Since the said application for judgment on the attachment bond cannot be considered as an initiatory pleading, as it cannot be independently set up from the main action, it is not likewise chargeable with legal fees.

As to the issue relating to the other Resolution dated 26 June 1998 denying the motion to dismiss appeal on the ground of forum-shopping, we find Carloss arguments as unmeritorious. Forum-shopping allegedly existed because petitioners had filed two cases before the Court of Appeals, CA-G.R. CV No. 53229, and the Petition for Certiorari with Temporary Restraining Order dated 2 June 1996 attacking the allowance of execution pending appeal. Evidently, the two causes of action in these two petitions are different, CA-G.R. CV No. 53229 being an appeal from the Summary Judgmentrendered by the RTC, and the second petition assailing the subsequent allowance by the RTC of execution pending appeal. There is no identity between these two causes of action that would warrant a finding of forum-shopping.

Issues Raised in G.R. No. 137743

To recount, respondents, having obtained a favorable decision on their Motion for Judgment on the Attachment Bond, filed a Motion for Immediate Execution of the award of damages. This was granted by the Court of Appeals in its Resolutiondated 16 October 1998, said resolution now specifically assailed by SIDDCOR in G.R. No. 137743.

In their Motion for Immediate Execution , respondents theory in seeking the immediate execution of the award of damages was that said award was not subject to appeal, the ruling thereupon being an interlocutory order.[77] This position was not adopted by the Court of Appeals in its 16 October 1998 Resolution, which was otherwise favorably disposed to respondents. Instead, the Court of Appeals predicated the immediate execution on the following grounds: (1) that the judicial finding that the writ of preliminary attachment was wrongful was already final and beyond review; (2) there were no material and substantial defenses against the motion for the issuance of the judgment bond; (3) Sandoval was elderly and sickly, without means of livelihood and may not be able to enjoy the fruits of the judgment on the attachment bond; (4) that immediate execution would end her suffering caused by the arbitrary garnishment of her PNB account.

There is no doubt that a judgment on the attachment bond is a final and appealable order. As stated earlier, it is, under normal course, included in the main judgment, which in turn is final and appealable. Respondents admit that they had erred in earlier characterizing the said judgment as an interlocutory order. Still, SIDDCOR argues that such earlier error is fatal, and that the Court of Appeals abused its discretion in ruling on the motion on a theory different from that urged on by respondents. By no means could respondents be deemed as estopped from changing their legal theory, since the rule on estoppel applies to questions of fact and not questions of law. [78] Moreover, courts are empowered

to decide cases even if the parties raise legal rationales other than that which would actually apply in the case. The basis of whether respondents are entitled to immediate execution arises from law, particularly Section 2(a), Rule 39 of the Rules of Court, and not solely on whatever allegations may be raised by the movant.

Thus, we find no grave abuse of discretion on the part of the Court of Appeals, even though it allowed execution pending appeal on a legal basis different from that originally adduced by respondents. After all, the reasoning ultimately employed by the appellate court is correct, and it hardly would be judicious to require the lower court to adhere to the movants erroneous ratiocination and preclude the proper application of the law. We need not review in length the justification of the Court of Appeals in allowing execution pending appeal. The standard set under Section 2(a), Rule 39 merely requires good reasons, a special order, and due hearing. Due hearing would not require a hearing in open court, but simply the right to be heard, which SIDDCOR availed of when it filed its opposition to the motion for immediate execution. The Resolution dated 16 October 1998 satisfies the special order requirement, and it does enumerate at length the good reasons for allowing execution pending appeal. As to the appreciation of good reasons, we simply note that the advanced age alone of Sandoval would have sufficiently justified execution pending appeal, pursuant to the well-settled jurisprudential rule. [79] The wrongfulness of the attachment, and the length of time respondents have been deprived of their money by reason of the wrongful attachment further justifies execution pending appeal under these circumstances.

WHEREFORE, the petitions are DISMISSED. The Temporary Restraining Order issued in the Resolution dated 9 June 1999 is hereby LIFTED. The assailed Resolution of the Court of Appeals Special Fourth Division dated 26 June 1998 is AFFIRMED with the MODIFICATIONS that the legal interest on the award of actual damages should commence from the date of the finality of the Decision of the Court of Appeals in CA G.R. SP No. 39267 and that the award of attorneys fees is in the amount of P500,000. Costs against petitioners.

SO ORDERED.

EN BANC [G.R. No. 69863-65 : December 10, 1990.]

192 SCRA 183 LINO BROCKA, BENJAMIN CERVANTES, COSME GARCIA, RODOLFO SANTOS, VALENTINO SALIPSIP, RICARDO VEGA, ERIC MARIANO, JOSE EMMANUEL OYALES, RONNIE MATTA, ALFREDO VIAJE, RUBEN EUGENIO, REYNALDO ORTIZ, ORLANDO ORTIZ, NOEL REYES, EDUARDO IMPERIAL, NESTOR SARMIENTO, FRANCO PALISOC, VIRGILIO DE GUZMAN, ALBERTO REYES, JESSIE PINILI, ROMULO AUGUIS, DOMINADOR RESURRECION III, RONNIE LAYGO, ROSAURO ROQUE, CLARENCE SORIANO, OCTAVO DEPAWA, CARLITO LA TORRE, SEVERNO ILANO, JR., DOMINGO CAJIPE, ALAN ALEGRE, RAMON MARTINEZ, MA. GILDA HERNANDEZ, EDNA P. VILLANUEVA, DOLLY S. CANU, MELQUIADES C. ATIENZA, ELIGIO P. VERA CRUZ, ROGER C. BAGAN, ABUNDIO M. CALISTE, Petitioners, vs. JUAN PONCE ENRILE, MAJ. GENERAL FIDEL V. RAMOS, BRIG. GENERAL PEDRO BALBANERO, COL. ABAD, COL. DAWIS, SERGIO APOSTOL, P/LT, RODOLFO M. GARCIA and JUDGE RICARDO TENSUAN , Respondents. DECISION MEDIALDEA, J.: This petition was originally filed on February 13, 1985 to secure the release of petitioners on habeas corpus and to permanently enjoin the City Fiscal of Quezon City from investigating charges of "Inciting to Sedition" against petitioners Lino Brocka, Benjamin Cervantes, Cosme Garcia and Rodolfo Santos, (hereafter Brocka, et al.). On learning that the corresponding informations for this offense has been filed by the City Fiscal against them on February 11, 1985, a supplemental petition was filed on February 19, 1985 (p. 51, Rollo) to implead the Presiding Judge, 1 and to enjoin the prosecution of Criminal Cases Nos. Q-38023, Q-38024 and Q-38025 (p. 349, Rollo) and the issuance of warrants for their arrests, including their arraignment. Since then President Ferdinand E. Marcos had ordered the provisional release of Brocka, et al., the issue on habeas corpus has become moot and academic (p. 396, Rollo). We shall thus focus on the question of whether or not the prosecution of the criminal cases for Inciting to Sedition may lawfully be enjoined.:-cralaw Petitioners were arrested on January 28, 1985 by elements of the Northern Police District following the forcible and violent dispersal of a demonstration held in sympathy with the jeepney strike called by the Alliance of Concerned Transport Organization (ACTO). Thereafter, they were charged with Illegal Assembly in Criminal Cases Nos. 37783, 37787 and 37788 with Branch 108, Regional Trial Court, NCJR, Quezon City. 2 Except for Brocka, et al. who were charged as leaders of the offense of Illegal Assembly and for whom no bail was recommended, the other petitioners were released on bail of P3,000.00 each. Brocka, et al.'s provisional release was ordered only upon an urgent petition for bail for which daily hearings from February 1-7, 1985 were held. However, despite service of the order of release on February 9, 1985, Brocka, et al. remained in detention, respondents having invoked a Preventive Detention Action (PDA) allegedly issued against them on January 28, 1985 (p. 6, Rollo). Neither the original, duplicate original nor certified true copy of the PDA was ever shown to them (p. 367, Rollo). Brocka, et al. were subsequently charged on February 11, 1985 with Inciting to Sedition, docketed as Criminal Cases Nos. Q-38023, Q-38024 and Q-38025 (p. 349, Rollo), without prior notice to their counsel (p. 7, Rollo). The original informations filed recommended no bail (p. 349, Rollo). The circumstances surrounding the hasty filing of this second offense are cited by Brocka, et al. (quoting from a separate petition filed on their behalf in G.R. Nos. 69848-50 entitled "Sedfrey A. Ordoez vs. Col. Julian Arzaga, et al."), as follows: "x x x

"6. The sham' character of the inquest examination concocted by all respondents is starkly bizarre when we consider that as early as 10:30 A.M. today, February 11, 1985, Benjamin Cervantes was able to contact undersigned petitioner by phone informing counsel that said Benjamin Cervantes and the 4 other persons who are the subjects of this petition will be brought before the Quezon City Fiscal at 2:30 for undisclosed reasons: subsequently, another phone call was received by petitioning counsel informing him that the appearance of Benjamin Cervantes et al. was to be at 2:00 P.M. When petitioning counsel arrived in the office of Assistant City Fiscal Arturo Tugonon, the complainants' affidavits had not yet been received by any of the panel of three assistant city fiscals, although the five persons under detention were already in the office of said assistant fiscal as early as 2:00 P.M. It was only at 3:00 when a representative of the military arrived bringing with him alleged statements of complainants against Lino Broka (sic) et al. for alleged inciting to sedition, whereupon undersigned counsel asked respondent Colonel Agapito Abad 'who ordered the detained persons to be brought to the office of Assistant Fiscal Arturo Tugonon since there were no charges on file;' and said Colonel Agapito Abad said aloud: 'I only received a telephone call from Colonel Arzaga about 11:00 A.M. to bring the detained persons today I am only the custodian.' At 3:15, petitioning counsel inquired from the Records Custodian when the charges against Lino Broka (sic) had been officially received and he was informed that the said charges were never coursed through the Records Office. "7. Under the facts narrated above, respondents have conspired to use the strong arm of the law and hatched the nefarious scheme to deprive Lino Broka (sic) et al. the right to bail because the utterances allegedly constituting inciting to sedition under Article 142 of the Revised Penal Code are, except for varying nuances, almost verbatim the same utterances which are the subject of Criminal Cases No. 37783, 37787 and 37788 and for which said detained persons are entitled to be released on bail as a matter of constitutional right. Among the utterances allegedly made by the accused and which the respondents claimed to be violative of Article 142 of the Revised Penal Code are: 'Makiisa sa mga drivers, "Makiisa sa aming layunin, "Digmaang bayan ang sagot sa kahirapan,' Itigil ang pakikialam ng imperyalismo sa Pilipinas,' 'Rollback ng presyo ng langis sa 95 Centavos.' (See Annex B) "8. That when petitioning counsel and other members of the defense panel requested that they be given 7 days within which said counsel may confer with their clients the detained persons named above, the panel of assistant fiscals demanded that said detained persons should sign a 'waiver' of their rights under Article 125 of the Revised Penal Code as a condition for the grant of said request, which is a harassing requirement considering that Lino Broka (sic) et al. were already under the detention, albeit illegally, and they could not have waived the right under Rule 125 which they did not enjoy at the time the ruling was made by the panel of assistant city fiscals." (pp. 4-6, Rollo in G.R. 69848-50). They were released provisionally on February 14, 1985, on orders of then President F. E. Marcos. The circumstances of their release are narrated in Our resolution dated January 26, 1985, as quoted in the Solicitor General's Manifestation as follows: "G.R. Nos. 69848-50 (Sedfrey A. Ordoez, Petitioner, vs. Col. Julian Arzaga, et al., Respondents). Petitioner Sedfrey A. Ordoez filed this petition for habeas corpus in behalf of Lino Brocka, Benjamin Cervantes, Cosme Garcia, Alexander Luzano, and Rodolfo Santos, who were all detained under a Preventive Detention Action (PDA) issued by then President Ferdinand E. Marcos on January 28, 1985. They were charged in three separate informations of the crime of illegal assembly under Art. 146, paragraph 3 of the Revised Penal Code, as amended by PD 1834. On February 7, 1985, the Honorable Miriam Defensor Santiago, Regional Trial Judge of Quezon City, issued a resolution in the above criminal cases, directing the release of the five accused on bail of P6,000.00 for each of them, and from which resolution the respondent fiscals took no appeal. Immediately thereafter, the accused filed their respective bail bonds. This notwithstanding, they continued to be held in detention by order of the respondent colonels; and on February 11, 1985, these same accused were 'reinvestigated,' this time on charges of 'inciting to sedition' ** under Art. 142 of the Revised Penal Code, following which corresponding cases were filed. The respondents complied with Our resolution requiring them, inter alia, to make a RETURN of the writ of habeas corpus. In their RETURN, it appeared that all the accused had already been released, four of them on February 15, 1985 and one February 8, 1985. The petitioner, nevertheless, argued that the petition has not become moot and academic because the accused continue to be in the custody of the law under an invalid charge of inciting to sedition." (p. 395, Rollo).

Hence, this petition. Brocka, et al. contend that respondents' manifest bad faith and/or harassment are sufficient bases for enjoining their criminal prosecution, aside from the fact that the second offense of inciting to sedition is illegal, since it is premised on one and the same act of attending and participating in the ACTO jeepney strike. They maintain that while there may be a complex crime from a single act (Art. 48, RTC), the law does not allow the splitting of a single act into two offenses and filing two informations therefor, further, that they will be placed in double jeopardy. The primary issue here is the legality of enjoining the criminal prosecution of a case, since the two other issues raised by Brocka, et al. are matters of defense against the sedition charge. We rule in favor of Brocka, et al. and enjoin their criminal prosecution for the second offense of inciting to sedition. Indeed, the general rule is that criminal prosecution may not be restrained or stayed by injunction, preliminary or final. There are however exceptions, among which are: "a. To afford adequate protection to the constitutional rights of the accused (Hernandez vs. Albano, et al., L-19272, January 25, 1967, 19 SCRA 95); "b. When necessary for the orderly administration of justice or to avoid oppression or multiplicity of actions (Dimayuga, et al. vs. Fernandez, 43 Phil. 304; Hernandez vs. Albano, supra; Fortun vs. Labang, et al., L-38383, May 27, 1981, 104 SCRA 607); "c. When there is a pre-judicial question which is sub judice (De Leon vs. Mabanag, 70 Phil. 202); "d. When the acts of the officer are without or in excess of authority (Planas vs. Gil, 67 Phil. 62); "e. Where the prosecution is under an invalid law, ordinance or regulation (Young vs. Rafferty, 33 Phil. 556; Yu Cong Eng vs. Trinidad, 47 Phil. 385, 389); "f. When double jeopardy is clearly apparent (Sangalang vs. People and Avendia, 109 Phil. 1140); "g. Where the court has no jurisdiction over the offense (Lopez vs. City Judge, L-25795, October 29, 1966, 18 SCRA 616); "h. Where it is a case of persecution rather than prosecution (Rustia vs. Ocampo, CA-G.R. No. 4760, March 25, 1960); "i. Where the charges are manifestly false and motivated by the lust for vengeance (Recto vs. Castelo, 18 L.J. [1953], cited in Raoa vs. Alvendia, CA-G.R. No. 30720-R, October 8, 1962; Cf, Guingona, et al vs. City Fiscal, L-60033, April 4, 1984, 128 SCRA 577); and "j. When there is clearly no prima facie case against the accused and a motion to quash on that ground has been denied (Salonga vs. Pao, et al., L-59524, February 18, 1985, 134 SCRA 438). "7. Preliminary injunction has been issued by the Supreme Court to prevent the threatened unlawful arrest of petitioners (Rodriguez vs. Castelo, L-6374, August 1, 1958)." (cited in Regalado, Remedial Law Compendium, p. 188, 1988 Ed.) In the petition before Us, Brocka, et al. have cited the circumstances to show that the criminal proceedings had become a case of persecution, having been undertaken by state officials in bad faith.: nad Respondents, on the other hand, had invoked a PDA in refusing Brocka, et al.'s release from detention (before their release on orders of then Pres. Marcos). This PDA was, however, issued on January 28, 1985, but was invoked only on February 9, 1985 (upon receipt of the trial court's order of release). Under the guidelines issued, PDAs shall be invoked within 24 hours (in Metro Manila) or 48 hours (outside Metro Manila). (Ilagan v. Enrile, G.R. No. 70748, October 28, 1985, 139 SCRA 349). Noteworthy also is Brocka, et al.'s claim that, despite subpoenas for its production, the prosecution merely presented a purported xerox copy of the invoked PDA (par. 4, Counter-Rejoinder, p. 367, Rollo).

The foregoing circumstances were not disputed by the Solicitor General's office. In fact they found petitioner's plight "deplorable" (par. 51, Manifestation, p. 396, Rollo). The hasty filing of the second offense, premised on a spurious and inoperational PDA, certainly betrays respondent's bad faith and malicious intent to pursue criminal charges against Brocka, et al. We have expressed Our view in the Ilagan case that "individuals against whom PDAs have been issued should be furnished with the original, and the duplicate original, and a certified true copy issued by the official having official custody of the PDA, at the time of the apprehension" (supra, p. 369). We do not begrudge the zeal that may characterize a public official's prosecution of criminal offenders. We, however, believe that this should not be a license to run roughshod over a citizen's basic constitutional lights, such as due process, or manipulate the law to suit dictatorial tendencies. We are impelled to point out a citizen's helplessness against the awesome powers of a dictatorship. Thus, while We agree with the Solicitor General's observation and/or manifestation that Brocka, et al. should have filed a motion to quash the information, We, however, believe that such a course of action would have been a futile move, considering the circumstances then prevailing. Thus, the tenacious invocation of a spurious and inoperational PDA and the sham and hasty preliminary investigation were clear signals that the prosecutors intended to keep Brocka, et al. in detention until the second offense of "Inciting to Sedition" could be facilitated and justified without need of issuing a warrant of arrest anew. As a matter of fact the corresponding informations for this second offense were hastily filed on February 11, 1985, or two days after Brocka, et al.'s release from detention was ordered by the trial judge on February 9, 1985. Constitutional rights must be upheld at all costs, for this gesture is the true sign of democracy. These may not be set aside to satisfy perceived illusory visions of national grandeur.: nad In the case of J. Salonga v. Cruz Pao, We point out: "Infinitely more important than conventional adherence to general rules of criminal procedure is respect for the citizen's right to be free not only from arbitrary arrest and punishment but also from unwarranted and vexatious prosecution . . ." (G.R. No. L-59524, February 18, 1985, 134 SCRA 438-at p. 448). We, therefore, rule that where there is manifest bad faith that accompanies the filing of criminal charges, as in the instant case where Brocka, et al. were barred from enjoying provisional release until such time that charges were filed, and where a sham preliminary investigation was hastily conducted, charges that are filed as a result should lawfully be enjoined. ACCORDINGLY, the petition is hereby GRANTED. The trial court is PERMANENTLY ENJOINED from proceeding in any manner with the cases subject of the petition. No costs. SO ORDERED. Fernan C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Gancayco, Padilla, Bidin, Sarmiento, Grio-Aquino and Regalado, JJ., concur. Feliciano, J., is on leave.

Spouses Yu vs. Ngo Yee Te DECISION AUSTRIA-MARTINEZ, J.:

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the March 21, 2001 Decision[1] of the Court of Appeals (CA) in CA-G.R. CV No. 52246 [2] and its October 14, 2002 Resolution.[3]

The antecedent facts are not disputed. Spouses Gregorio and Josefa Yu (Spouses Yu) purchased from Ngo Yet Te (Te) bars of detergent soap worthP594,240.00, and issued to the latter three postdated checks
[4]

as payment of the

purchase price. When Te presented the checks at maturity for encashment, said checks were returned dishonored and stamped ACCOUNT CLOSED.[5] Te demanded[6] payment from Spouses Yu but the latter did not heed her demands. Acting through her son and attorney-in-fact, Charry Sy (Sy), Te filed with the Regional Trial Court (RTC), Branch 75, Valenzuela, Metro Manila, a Complaint, [7] docketed as Civil Case No. 4061-V-93, for Collection of Sum of Money and Damages with Prayer for Preliminary Attachment. In support of her prayer for preliminary attachment, Te attached to her Complaint an Affidavit executed by Sy that Spouses Yu were guilty of fraud in entering into the purchase agreement for they never intended to pay the contract price, and that, based on reliable information, they were about to move or dispose of their properties to defraud their creditors. [8]

Upon

Tes

posting

of

an

attachment

bond,[9] the RTC

issued

an

Order

of

Attachment/Levy[10] dated March 29, 1993 on the basis of which Sheriff Constancio Alimurung (Sheriff Alimurung) of RTC, Branch 19, Cebu City levied and attached Spouses Yus properties in Cebu City consisting of one parcel of land (known as Lot No. 11) [11] and four units of motor vehicle, specifically, a Toyota Ford Fierra, a jeep, a Canter delivery van, and a passenger bus. [12]

On April 21, 1993, Spouses Yu filed an Answer[13] with counterclaim for damages arising from the wrongful attachment of their properties, specifically, actual damages amounting to P1,500.00 per day; moral damages,P1,000,000.00; and exemplary damages, P50,000.00. They also sought payment of P120,000.00 as attorneys fees andP80,000.00 as litigation expenses.[14] On the same date, Spouses Yu filed an Urgent Motion to Dissolve Writ of Preliminary Attachment. [15] They also filed a Claim Against Surety Bond[16] in which they demanded payment from Visayan Surety and Insurance Corporation (Visayan Surety), the surety which issued the attachment bond, of the sum of P594,240.00, representing the damages they allegedly sustained as a consequence of the wrongful attachment of their properties. While the RTC did not resolve the Claim Against Surety Bond, it issued an Order [17] dated May 3, 1993, discharging from attachment the Toyota Ford Fierra, jeep, and Canter delivery van on humanitarian grounds, but maintaining custody of Lot No. 11 and the passenger bus. Spouses Yu filed a Motion for Reconsideration[18] which the RTC denied.[19]

Dissatisfied, they filed with the CA a Petition for Certiorari,[20] docketed as CA-G.R. SP No. 31230, in which a Decision[21] was rendered on September 14, 1993, lifting the RTC Order of Attachment on their remaining properties. It reads in part: In the case before Us, the complaint and the accompanying affidavit in support of the application for the writ only contains general averments. Neither pleading states in particular how the fraud was committed or the badges of fraud purportedly committed by the petitioners to establish that the latter never had an intention to pay the obligation; neither is there a statement of the particular acts committed to show that the petitioners are in fact disposing of their properties to defraud creditors. x x x. xxxx Moreover, at the hearing on the motion to discharge the order of attachment x x x petitioners presented evidence showing that private respondent has been extending multi-million peso credit facilities to the petitioners for the past seven years and that the latter have consistently settled their obligations. This was not denied by private respondent. Neither does the private respondent contest the petitioners allegations that they have been recently robbed of properties of substantial value, hence their inability to pay on time. By the respondent courts own pronouncements, it appears that the order of attachment was upheld because of the admitted financial reverses the petitioner is undergoing. This is reversible error. Insolvency is not a ground for attachment especially when defendant has not been shown to have committed any act intended to defraud its creditors x x x. For lack of factual basis to justify its issuance, the writ of preliminary attachment issued by the respondent court was improvidently issued and should be discharged. [22]

From said CA Decision, Te filed a Motion for Reconsideration but to no avail. [23]

Te filed with us a Petition for Review on Certiorari[24] but we denied the same in a Resolution dated June 8, 1994 for having been filed late and for failure to show that a reversible error was committed by the CA.[25] Entry of Judgment of our June 8, 1994 Resolution was made on July 22, 1994. [26] Thus, the finding of the CA in its September 14, 1993 Decision in CA-G.R. SP No. 31230 on the wrongfulness of the attachment/levy of the properties of Spouses Yu became conclusive and binding.

However, on July 20, 1994, the RTC, apparently not informed of the SC Decision, rendered a Decision, the dispositive portion of which reads: WHEREFORE, premises considered, the Court finds that the plaintiff has established a valid civil cause of action against the defendants, and therefore, renders this judgment in favor of the plaintiff and against the defendants, and hereby orders the following:

1) Defendants are hereby ordered or directed to pay the plaintiff the sum of P549,404.00, with interest from the date of the filing of this case (March 3, 1993); 2) The Court, for reasons aforestated, hereby denies the grant of damages to the plaintiff; 3) The Court hereby adjudicates a reasonable attorneys fees and litigation expenses of P10,000.00 in favor of the plaintiff; 4) On the counterclaim, this Court declines to rule on this, considering that the question of the attachment which allegedly gave rise to the damages incurred by the defendants is being determined by the Supreme Court . SO ORDERED.[27] (Emphasis ours)

Spouses Yu filed with the RTC a Motion for Reconsideration [28] questioning the disposition of their counterclaim. They also filed a Manifestation [29] informing the RTC of our June 8, 1994 Resolution in G.R. No. 114700. The RTC issued an Order dated August 9, 1994, which read:

xxxx (2) With regard the counter claim filed by the defendants against the plaintiff for the alleged improvident issuance of this Court thru its former Presiding Judge (Honorable Emilio Leachon, Jr.), the same has been ruled with definiteness by the Supreme Court that, indeed, the issuance by the Court of the writ of preliminary attachment appears to have been improvidently done, but nowhere in the decision of the Supreme Court and for that matter, the Court of Appeals decision which was in effect sustained by the High Court, contains any ruling or directive or imposition, of any damages to be paid by the plaintiff to the defendants , in other words, both the High Court and the CA, merely declared the previous issuance of the writ of attachment by this Court thru its former presiding judge to be improvidently issued, but it did not award any damages of any kind to the defendants, hence, unless the High Court or the CA rules on this, this Court coud not grant any damages by virtue of the improvident attachment made by this Court thru its former presiding judge, which was claimed by the defendants in their counter claim. (3) This Court hereby reiterates in toto its Decision in this case dated July 20, 1994. [30] (Emphasis ours)

The RTC also issued an Order dated December 2, 1994,[31] denying the Motion for Reconsideration of Spouses Yu.[32] In the same December 2, 1994 Order, the RTC granted two motions filed by Te, a Motion to Correct and to Include Specific Amount for Interest and a Motion for Execution Pending Appeal.[33] The

RTC also denied Spouses Yus Notice of Appeal [34] from the July 20, 1994 Decision and August 9, 1994 Order of the RTC. From said December 2, 1994 RTC Order, Spouses Yu filed another Notice of Appeal RTC also denied in an Order
[36] [35]

which the

dated January 5, 1995.

Spouses Yu filed with the CA a Petition[37] for Certiorari, Prohibition and Mandamus, docketed as CA-G.R. SP No. 36205, questioning the denial of their Notices of Appeal; and seeking the modification of the July 20, 1994 Decision and the issuance of a Writ of Execution. The CA granted the Petition in a Decision[38] dated June 22, 1995.

Hence, Spouses Yu filed with the CA an appeal[39] docketed as CA-G.R. CV No. 52246, questioning only that portion of the July 20, 1994 Decision where the RTC declined to rule on their counterclaim for damages.[40] However, Spouses Yu did not dispute the specific monetary awards granted to respondent Te; and therefore, the same have become final and executory. Although in the herein assailed Decision [41] dated March 21, 2001, the CA affirmed in toto the RTC Decision, it nonetheless made a ruling on the counterclaim of Spouses Yu by declaring that the latter had failed to adduce sufficient evidence of their entitlement to damages.

Spouses Yu filed a Motion for Reconsideration [42] but the CA denied it in the herein assailed Resolution[43]dated October 14, 2002.

Spouses Yu filed the present Petition raising the following issues: I. Whether or not the appellate court erred in not holding that the writ of attachment was procured in bad faith, after it was established by final judgment that there was no true ground therefor. II. Whether or not the appellate court erred in refusing to award actual, moral and exemplary damages after it was established by final judgment that the writ of attachment was procured with no true ground for its issuance. [44]

There is one preliminary matter to set straight before we resolve the foregoing issues. According to respondent Te,[45] regardless of the evidence presented by Spouses Yu, their counterclaim was correctly dismissed for failure to comply with the procedure laid down in Section 20 of Rule 57. Te contends that as Visayan Surety was not notified of the counterclaim, no judgment thereon could be validly rendered.

Such argument is not only flawed, it is also specious. As stated earlier, Spouses Yu filed a Claim Against Surety Bond on the same day they filed their Answer and Urgent Motion to Dissolve Writ of Preliminary Attachment. [46] Further, the records reveal that on June 18, 1993, Spouses Yu filed with the RTC a Motion to Give Notice to Surety. [47] The RTC granted the Motion in an Order[48]dated June 23, 1993. Accordingly, Visayan Surety was notified of the pre-trial conference to apprise it of a pending claim against its attachment bond. Visayan Surety received the notice on July 12, 1993 as shown by a registry return receipt attached to the records. [49] Moreover, even if it were true that Visayan Surety was left in the proceedings a quo, such omission is not fatal to the cause of Spouses Yu. In Malayan Insurance Company, Inc. v. Salas,[50] we held that x x x if the surety was not given notice when the claim for damages against the principal in the replevin bond was heard, then as a matter of procedural due process the surety is entitled to be heard when the judgment for damages against the principal is sought to be enforced against the suretys replevin bond.[51] This remedy is applicable for the procedures governing claims for damages

on an attachment bond and on a replevin bond are the same. [52] We now proceed to resolve the issues jointly. Spouses Yu contend that they are entitled to their counterclaim for damages as a matter of right in view of the finality of our June 8, 1994 Resolution in G.R. No. 114700 which affirmed the finding of the CA in its September 14, 1993 Decision in CA-G.R. SP No. 31230 that respondent Te had wrongfully caused the attachment of their properties. Citing Javellana v. D.O. Plaza Enterprises, Inc .,[53] they argue that they should be awarded damages based solely on the CA finding that the attachment was illegal for it already suggests that Te acted with malice when she applied for attachment. And even if we were to assume that Te did not act with malice, still she should be held liable for the aggravation she inflicted when she applied for attachment even when she was clearly not entitled to it. [54] That is a rather limited understanding of Javellana. The counterclaim disputed therein was not for moral damages and therefore, there was no need to prove malice. As early as in Lazatin v. Twao,[55] we laid down the rule that where there is wrongful attachment, the attachment defendant may recover actual damages even without proof that the attachment plaintiff acted in bad faith in obtaining the attachment. However, if it is alleged and established that the attachment was not merely wrongful but also malicious,

the attachment defendant may recover moral damages and exemplary damages as well.

[56]

Either way,

the wrongfulness of the attachment does not warrant the automatic award of damages to the attachment defendant; the latter must first discharge the burden of proving the nature and extent of the loss or injury incurred by reason of the wrongful attachment.[57] In fine, the CA finding that the attachment of the properties of Spouses Yu was wrongful did not relieve Spouses Yu of the burden of proving the factual basis of their counterclaim for damages. To merit an award of actual damages arising from a wrongful attachment, the attachment defendant must prove, with the best evidence obtainable, the fact of loss or injury suffered and the amount thereof.[58] Such loss or injury must be of the kind which is not only capable of proof but must actually be proved with a reasonable degree of certainty. As to its amount, the same must be measurable based on specific facts, and not on guesswork or speculation. [59] In particular, if the claim for actual damages covers unrealized profits, the amount of unrealized profits must be estalished and supported by independent evidence of the mean income of the business undertaking interrupted by the illegal seizure.
[60]

Spouses Yu insist that the evidence they presented met the foregoing standards. They point to the lists of their daily net income from the operation of said passenger bus based on used ticket stubs[61] issued to their passengers. They also cite unused ticket stubs as proof of income foregone when the bus was wrongfully seized.[62] They further cite the unrebutted testimony of Josefa Yu that, in the dayto-day operation of their passenger bus, they use up at least three ticket stubs and earn a minimum daily income of P1,500.00.[63] In ruling that Spouses Yu failed to adduce sufficient evidence to support their counterclaim for actual damages, the CA stated, thus: In this case, the actual damages cannot be determined. Defendant-appellant Josefa Yu testified on supposed lost profits without clear and appreciable explanation. Despite her submission of the used and unused ticket stubs, there was no evidence on the daily net income, the routes plied by the bus and the average fares for each route. The submitted basis is too speculative and conjectural. No reports regarding the average actual profits and other evidence of profitability necessary to prove the amount of actual damages were presented. Thus, the Court a quo did not err in not awarding damages in favor of defendants-appellants.[64]

We usually defer to the expertise of the CA, especially when it concurs with the factual findings of the RTC.[65] Indeed, findings of fact may be passed upon and reviewed by the Supreme Court in the following instances: (1) when the conclusion is a finding grounded entirely on speculations, surmises, or

conjectures; (2) when the inference made is manifestly mistaken, absurd, or impossible; (3) where there is a grave abuse of discretion in the appreciation of facts; (4) when judgment is based on a misapprehension of facts; (5) when the lower court, in making its findings, went beyond the issues of the case and such findings are contrary to the admissions of both appellant and appellee; (6) when the factual findings of the CA are contrary to those of the trial court; (7) when the findings of fact are themselves conflicting; (8) when the findings of fact are conclusions made without a citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondents; (10) when the findings of fact of the lower court are premised on the supposed absence of evidence and are contradicted by the evidence on record.[66] However, the present case does not fall under any of the exceptions. We are in full accord with the CA that Spouses Yu failed to prove their counterclaim.

Spouses Yus claim for unrealized income of P1,500.00 per day was based on their computation of their average daily income for the year 1992. Said computation in turn is based on the value of three ticket stubs sold over only five separate days in 1992. [67] By no stretch of the imagination can we consider ticket sales for five days sufficient evidence of the average daily income of the passenger bus, much less its mean income. Not even the unrebutted testimony of Josefa Yu can add credence to such evidence for the testimony itself lacks corroboration.[68] Besides, based on the August 29, 1994 Manifestation [69] filed by Sheriff Alimurung, it would appear that long before the passenger bus was placed under preliminary attachment in Civil Case No. 4061-V93, the same had been previously attached by the Sheriff of Mandaue City in connection with another case and that it was placed in the Cebu Bonded Warehousing Corporation, Cebu City. Thus, Spouses Yu cannot complain that they were unreasonably deprived of the use of the passenger bus by reason of the subsequent wrongful attachment issued in Civil Case No. 4061-V-93. Nor can they also attribute to the wrongful attachment their failure to earn income or profit from the operation of the passenger bus. Moreover, petitioners did not present evidence as to the damages they suffered by reason of the wrongful attachment of Lot No. 11. Nonetheless, we recognize that Spouses Yu suffered some form of pecuniary loss when their properties were wrongfully seized, although the amount thereof cannot be definitively ascertained. Hence, an award of temperate or moderate damages in the amount of P50,000.00 is in order.[70]

As to moral and exemplary damages, to merit an award thereof, it must be shown that the wrongful attachment was obtained by the attachment plaintiff with malice or bad faith, such as by appending a false affidavit to his application.[71]

Spouses Yu argue that malice attended the issuance of the attachment bond as shown by the fact that Te deliberately appended to her application for preliminary attachment an Affidavit where Sy perjured himself by stating that they had no intention to pay their obligations even when he knew this to be untrue given that they had always paid their obligations; and by accusing them of disposing of their properties to defraud their creditors even when he knew this to be false, considering that the location of said properties was known to him.[72] The testimony of petitioner Josefa Yu herself negates their claim for moral and exemplary damages. On cross-examination she testified, thus: Q: A: Did you ever deposit any amount at that time to fund the check? We requested that it be replaced and staggered into smaller Did you fund it or not? The three checks involved? it. account? amounts.

COURT: Atty. Ferrer:

Atty. Florido: Already answered. She said that they were not able to fund Atty. Ferrer: And as a matter of fact, you went to the bank to close your

A: We closed account with the bank because we transferred the account to another bank. Q: How much money did you transfer from that bank to which the three checks were drawn to this new bank? A: I dont know how much was there but we transferred already to the Solid Bank. Q: Who transferred? A: My daughter, sir.[73] (Emphasis ours)

Based on the foregoing testimony, it is not difficult to understand why Te concluded that Spouses Yu never intended to pay their obligation for they had available funds in their bank but chose to transfer said funds instead of cover the checks they issued. Thus, we cannot attribute malice nor bad faith to Te in applying for the attachment writ. We cannot hold her liable for moral and exemplary damages. As a rule, attorneys fees cannot be awarded when moral and exemplary damages are not granted, the exception however is when a party incurred expenses to lift a wrongfully issued writ of attachment.[74] Without a doubt, Spouses Yu waged a protracted legal battle to fight off the illegal

attachment of their properties and pursue their claims for damages. It is only just and equitable that they be awarded reasonable attorneys fees in the amount of P30,000.00. In sum, we affirm the dismissal of the counterclaim of petitioners Spouses Yu for actual, moral, and exemplary damages. However, we grant them temperate damages and attorneys fees.

WHEREFORE, the petition is partly GRANTED. The March 21, 2001 Decision of the Court of Appeals isAFFIRMED with the MODIFICATION that petitioners counterclaim is PARTLY GRANTED. Gregorio Yu and Josefa Yu are awarded P50,000.00 temperate damages and P30,000.00 attorneys fees.

No costs.

SO ORDERED. SECOND DIVISION

[G.R. No. 157494. December 10, 2004]

BACOLOD CITY WATER DISTRICT, petitioner, vs. THE HON. EMMA C. LABAYEN, Presiding Judge,RTC of Bacolod City, Br. 46 and the City of Bacolod, respondents. DECISION PUNO, J.: First, the chronology of facts. Petitioner Bacolod City Water District (BACIWA) is a water district established pursuant to Presidential Decree No. 198 as a government-owned and controlled corporation with original charter. It is in the business of providing safe and potable water to Bacolod City. Public respondent City of Bacolod is a municipal corporation created by Commonwealth Act No. 326, otherwise known as the Charter of Bacolod. On March 26, 1999, respondent City filed a case for Injunction With a Prayer for Temporary Restraining Order And/Or Preliminary Mandatory Injunction against petitioner in the sala of public respondent judge. The petition stated that on January 15, 1999, BACIWA published in the Visayan Daily Star,[1] a local paper of general circulation, a Schedule of Automatic Water Rates Adjustments for the years 1999, 2000 and 2001. The rates were supposed to take effect seven (7) days after its posting in the local papers or on January 22, 1999. The increase was aborted after petitioner unilaterally suspended the January 22, 1999 scheduled implementation. On March 15, 1999, however, petitioner announced that the rate hike will be implemented on April 1, 1999. [2] Respondent City opposed. It alleged that the proposed water rates would violate due process as they were to be imposed without the public hearing required under Letter of Instructions No. 700 [3] and

Presidential Decree No. 1479.[4]Hence, it prayed that before the hearing of the main case, a temporary restraining order or a preliminary injunction be issued. [5] On March 30, 1999, the court a quo issued an Order[6] summoning the parties with their counsels to attend the preliminary hearing for the issuance of a temporary restraining order or preliminary mandatory injunction. On April 8, 1999, it required the parties to simultaneously submit their respective memoranda on whether it had jurisdiction over the case and whether a public hearing was conducted re the proposed increase in water rates.[7] Petitioner filed its Position Paper dated April 15, 1999. It attached documents evidencing the conduct of extensive and lengthy public hearings in fifty-eight (58) of the sixty-one (61) barangays of Bacolod City. It opined that original jurisdiction over cases on rate review is vested in the Local Water Utilities Administration (LWUA); appellate jurisdiction is vested in the National Water Resources [Board] (NWRB) whose decisions shall be appealable to the Office of the President. [8] On May 5, 1999, petitioner also filed a Motion to Dismiss. In an Order[9] dated May 7, 1999, the court directed respondent City to file its Opposition to petitioners Motion to Dismiss within fifteen (15) days. On June 17, 1999, respondent City filed a Motion to Set [for] Hearing[10] its application for a temporary restraining order or preliminary mandatory injunction. It alleged that the parties had already submitted their respective memoranda and it has already submitted its Opposition to petitioners Motion to Dismiss. It also alleged that petitioner had already effected the water rates increase and collection, hence, causing irreparable injury to the public. Petitioner opposed the Motion. On July 20, 1999, respondent City filed its Reply to Opposition and reiterated that the application for the issuance of a temporary restraining order or preliminary mandatory injunction be heard since petitioner continued to violate the right of the public to due process and it might take time before the case would be finally resolved.[11]On the same date, petitioner filed a Manifestation and Motion[12] stating that the hearing may no longer be necessary as the respective positions of both parties have already been presented and amplified in their pleadings and memoranda. On July 22, 1999, respondent trial court issued an Order [13] stating that there was no more need to hear the case on the merits[14] as both parties have already submitted their position papers and documents to prove their respective allegations. On July 23, 1999, petitioner filed its Reply [15] to respondent Citys Opposition to the Motion to Dismiss reiterating that petitioner failed to exhaust administrative remedies provided by law hence the petition be dismissed for utter lack of merit. After a hiatus of nearly seven (7) months, or on February 18, 2000, respondent City filed an Urgent Motion for the Issuance of Temporary Restraining Order And[/]Or Writ of Preliminary Injunction [16] praying that the case be set for hearing on February 24, 2000. On the same date requested, respondent court heard respondents application for temporary restraining order and issued an Order [17] commanding petitioner to stop, desist and refrain from implementing the proposed water rates for the year 2000 which were then supposed to take effect on March 1, 2000. On March 7, 2000, petitioner filed an Urgent Motion for Reconsideration and Dissolution of the Temporary Restraining Order.[18] Respondent court a quo issued on March 10, 2000 an Order [19] directing respondent City to file an Opposition to the Urgent Motion. In its Opposition, respondent City [20] contended that the temporary restraining order issued was not infirmed with procedural and substantive defects. It also averred that respondent court has jurisdiction over the case since the sole question of the lack of public hearing does not require the special knowledge or expertise of an administrative agency and may be resolved by respondent court, hence the doctrine of primary jurisdiction does not apply. Respondent court continued with the proceedings by receiving the evidence of petitioner in support of its Motion for Reconsideration and Dissolution of Temporary Restraining Order. It further issued Orders dated March 17, 2000[21] and March 20, 2000.[22]

On April 6, 2000, respondent court issued an Order [23] finding petitioners Urgent Motion for Reconsideration and Dissolution of Temporary Restraining Order moot and academic considering petitioners compliance of said temporary restraining order. Four (4) days after, in an Order[24] dated April 10, 2000, it denied petitioners Motion to Dismiss for lack of merit. On April 19, 2000, respondent City filed a Manifestation praying that respondent trial court issue a writ of preliminary injunction against petitioner, stating thus: A Temporary Restraining Order was issued against the respondents which, however, expired before the parties were able to finish the presentation of their respective witnesses and evidences; The instant case was submitted for resolution and decision of this Honorable Court during the last week of March but while awaiting the decision of this Honorable Court, several complaints had reached the petitioner that the respondents had already reflected in the water billings for the month of April the new water rates for the year 2000; x x x [25]

Petitioner, for its part, filed a Motion for Reconsideration [26] of respondent trial courts Order denying its Motion to Dismiss. Respondent City filed an Opposition to [the] Motion for Reconsideration [27] on June 1, 2000. Respondent court did not act upon petitioners Motion for Reconsideration until respondent City filed an [Ex Parte] Motion for Speedy Resolution [28] of the case on October 6, 2000 praying that the case be resolved before the year 2000 ends in order to prevent the implementation of the water rates increase for the year 2001 which was to be imposed allegedly without the benefit of a public hearing. On December 21, 2000, respondent court issued the assailed Decision [29] granting the final injunction which allegedly confirmed the previous preliminary injunction. Petitioner filed its Motion for Reconsideration [30] of the assailed Decision on January 11, 2001 asserting, among others, that the case was not yet ripe for decision when the court granted the final injunction, the petitioner having had no opportunity to file its answer, avail of the mandatory pre-trial conference and have the case tried on the merits. Respondent court denied the Motion for Reconsideration for lack of merit in an Order [31] dated January 24, 2001. Petitioner then filed a special civil action for certiorari under Rule 65 in the Court of Appeals. It alleged that public respondent judge acted without or in excess of jurisdiction and/or with grave and patent abuse of discretion amounting to lack or excess of jurisdiction when she issued the final injunction in disregard of petitioners basic right to due process.[32] The Court of Appeals dismissed the petition for review on certiorari, ratiocinating thus: In the case at bar, the [O]rder of public respondent dated 24 February 2000, though termed by BACIWA as a temporary restraining order, is in fact a preliminary injunction. The period of the restraint was not limited. By its wordings, it can be safely inferred that the increased water rates must not be effected until final disposition of the main case. This note of semi-permanence simply cannot issue from a mere temporary restraining order. It must be further noted that the temporary restraining order has been elevated to the same level as the preliminary injunction in the procedure, grounds and requirements of its obtention by S[ection] 4, Rule 58. Thus, to set [a] distinction, the present practice is to categorically refer to it as a temporary restraining order. In which case, the omission by the public respondent in referring to the 24 February 2000 order as a temporary restraining order could not have been a mere oversight but deliberate.[33] Resorting to this Court, petitioner raises the following issues:

I THE COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED AND REFUSED TO RULE THAT RESPONDENT COURT HAD ACTED WITHOUT OR IN EXCESS OF JURISDICTION AND/OR WITH GRAVE ABUSE OF DISCRETION FOR ARBITRARILY AND CAPRICIOUSLY RENDERING A DECISION PURPORTING TO ISSUE A FINAL INJUNCTION AND CONFIRMING ITS ALLEGED PRELIMINARY INJUNCTION, DESPITE THE FACT THAT: A. NO PRELIMINARY INJUNCTION HAD BEEN ISSUED; B. THE RESPONDENT LOWER COURT DID NOT RESOLVE HEREIN PETITIONERS MOTION FOR RECONSIDERATION OF THE ORDER DENYING PETITIONERS MOTION TO DISMISS; C. THE HEREIN PETITIONER HAD NOT YET FILED ITS ANSWER TO THE PETITION; D. THERE WAS STILL NO JOINDER OF THE ISSUES SINCE NO ANSWER HAD YET BEEN FILED; E. THE MANDATORY PRE-TRIAL CONFERENCE WAS NOT YET CONDUCTED; F. THERE WAS NO TRIAL ON THE MERITS FOR THE MAIN CASE. II THE COURT OF APPEALS GRAVELY ERRED WHEN IT INSISTED THAT THE 24 FEBRUARY 2000 ORDER (ANNEX R) ISSUED BY THE TRIAL COURT WAS A PRELIMINARY INJUNCTION WHEN THE RECORDS CLEARLY AND INDUBITABLY SHOW THAT IT WAS A TEMPORARY RESTRAINING ORDER (TRO). III BY DISMISSING THE PETITION FOR CERTIORARI, THE COURT OF APPEALS GRAVELY ERRED WHEN IT EFFECTIVELY PREVENTED PETITIONER FROM FULLY VENTILATING ITS CASE IN THE MAIN ACTION DUE TO THE IRREGULAR AND CONFUSED PROCEEDINGS CONDUCTED BY THE RESPONDENT COURT.[34] We rule in favor of petitioner. The initial issue is the proper characterization of the Order dated February 24, 2000. The sequence of events and the proceedings that transpired in the trial court make a clear conclusion that the Order issued was a temporary restraining order and not a preliminary injunction. First. We quote the pertinent parts of the questioned Order: x x x

When this motion was called for hearing wherein both parties have argued exhaustedly their respective sides, this court denied the ten (10) days extension for further amplification of the arguments of the respondent to oppose the said motion for issuance of a temporary restraining order. It appearing therefore, that the acts of the defendant will actually affect the plaintiff before the decision of this court can be rendered and in order to afford the court to pass on the issues without the same becoming moot and academic and considering the urgency of the matter that immediate action should be taken, and pursuant to Administrative Circular No. 6, Paragraph 4 and sub-paragraph 15 and The Interim Rules and Guidelines [set forth] by the Rules of Court, this court hereby orders the respondent[,] its

agents, representatives or any person acting in his behalf to stop, desist and refrain from implementing in their billings the new water rate increase which will start on March 1, 2000 . The Deputy Provincial Sheriff of this court is hereby ordered to furnish copy of this order to the respondent Bacolod City Water District as well as to its agents or representatives acting [o]n his behalf. x x x [35] (emphases supplied)

It can be gleaned from the afore-quoted Order that what the trial court issued was a temporary restraining order and not a preliminary injunction. The trial court has always referred to it as a temporary restraining order in the succeeding Orders it issued on March 10, 2000 [36] and April 6, 2000.[37] The parties, in their succeeding pleadings, [38] also referred to the assailed Order as a temporary restraining order. The petitioner filed an Urgent Motion for Reconsideration and Dissolution of Temporary Restraining Order (TRO)[39] on March 1, 2000. This was opposed by respondent City itself in its Opposition to Motion for Reconsideration and Dissolution of Temporary Restraining Order (TRO) [40] dated March 14, 2000. Further, respondent City, in its Manifestation dated April 19, 2000 stated, viz: x x x A Temporary Restraining Order was issued against the respondents which, however, expired before the parties were able to finish the presentation of their respective witnesses and evidences; x x x WHEREFORE, it is most respectfully prayed that while waiting for the decision and order of the Honorable Court, a preliminary injunction as prayed for in the petition be issued against the respondents. x x x[41] (emphases supplied)

It can be gleaned from the foregoing that both parties and respondent trial court have consistently referred to the directive as a temporary restraining order. It was only in the respondent courts assailed Decision that the Order was referred to as a preliminary injunction, viz: x x x

This Court therefore grants the final injunction prayed for restraining the respondent from the commission of the act complained of for the year 2001 and hereby confirming the preliminary injunction previously ordered. x x x [42] (emphasis supplied)

Again, it was only when petitioner expressed its vehement objection on the ruling that the final injunction confirmed the preliminary injunction previously issued, when the respondent City and the respondent trial court started to insist that the questioned Order was a preliminary injunction. Given the previous undeviating references to it as a temporary restraining order, respondents cannot now consider it as a preliminary injunction to justify the validity of the assailed Decision. The attendant facts and circumstances clearly show that the respondent trial court issued a temporary restraining order. Second. INJUNCTION is a judicial writ, process or proceeding whereby a party is ordered to do or refrain from doing a certain act. It may be the main action or merely a provisional remedy for and as an incident in the main action.[43]

The main action for injunction is distinct from the provisional or ancillary remedy of preliminary injunction which cannot exist except only as part or an incident of an independent action or proceeding. As a matter of course, in an action for injunction, the auxiliary remedy of preliminary injunction, whether prohibitory or mandatory, may issue. Under the law, the main action for injunction seeks a judgment embodying a final injunction which is distinct from, and should not be confused with, the provisional remedy of preliminary injunction, the sole object of which is to preserve the status quo until the merits can be heard.[44] A preliminary injunction is granted at any stage of an action or proceeding prior to the judgment or final order. It persists until it is dissolved or until the termination of the action without the court issuing a final injunction.[45] A restraining order, on the other hand, is issued to preserve the status quo until the hearing of the application for preliminary injunction which cannot be issued ex parte. Under Rule 58[46] of the Rules of Court, a judge may issue a temporary restraining order with a limited life of twenty (20) days from date of issue. If before the expiration of the twenty (20)-day period the application for preliminary injunction is denied, the temporary restraining order would be deemed automatically vacated. If no action is taken by the judge on the application for preliminary injunction within the said twenty (20) days, the temporary restraining order would automatically expire on the 20th day by the sheer force of law, no judicial declaration to that effect being necessary. [47] Hence, in the case at bar, since no preliminary injunction was issued, the temporary restraining order granted automatically expired after twenty (20) days under the Rules. The fact that respondent court merely ordered the respondent[,] its agents, representatives or any person acting in his behalf to stop, desist and refrain from implementing in their billings the new water rate increase which will start on March 1, 2000[48] without stating the period for the restraint does not convert the temporary restraining order to a preliminary injunction. The rule against the non-extendibility of the twenty (20)-day limited period of effectivity of a temporary restraining order is absolute if issued by a regional trial court. The failure of respondent court to fix a period for the ordered restraint did not lend the temporary restraining order a breath of semipermanence which can only be characteristic of a preliminary injunction. The twenty (20)-day period provided by the Rules of Court should be deemed incorporated in the Order where there is an omission to do so. It is because of this rule on non-extendibility that respondent City was prompted to move that hearings be set for its application of a preliminary injunction. Respondent City cannot take advantage of this omission by respondent trial court. Third. Even if we assume that the issued Order was a preliminary injunction, petitioner is correct in contending that the assailed Decision is premature. The records reveal that respondent court did not resolve petitioners Motion for Reconsideration of the Order denying its Motion to Dismiss before it issued the assailed Decision. Consequently, there was no answer filed by petitioner, no joinder of issues, no mandatory pre-trial conference, and no trial on the merits, yet, a Decision was handed down by the respondent trial court. The short circuiting of the procedural process denied the petitioner due process of law. It was not able to allege its defenses in an answer and prove them in a hearing. The convoluted procedure allowed by the respondent trial court and the pleadings filed by the parties which are not models of clarity certainly created confusion. But this confusion should not be seized as a reason to deny a party the constitutional right to due process. Over and above every desideratum in litigation is fairness. All doubts should be resolved in favor of fairness. IN VIEW WHEREOF, the petition is GRANTED. The Decision and Resolution of the Court of Appeals dated November 27, 2002 and February 28, 2003, respectively, are REVERSED and SET ASIDE. The case is REMANDED to the court a quofor further proceedings. SO ORDERED. China Banking Corporation vs. Benjamin Co DECISION

CARPIO MORALES, J.: Petitioner China Banking Corporation sold a lot located at St. Benedict Subdivision, Sindalan, San Fernando,Pampanga, which was covered by Transfer Certificate of Title (TCT) No. 450216-R to petitionerspouses Joey and Mary Jeannie Castro (the Castro spouses). It sold two other lots also located in the same place covered by TCT Nos. 450212-R and 450213-R to petitioner-spouses Richard and Editha Nogoy (the Nogoy spouses).

The lots of the Castro spouses and the Nogoy spouses are commonly bound on their southeastern side by Lot No. 3783-E, which is covered by TCT No. 269758-R in the name of respondent Benjamin Co (Co) and his siblings.

Co and his siblings entered into a joint venture with respondent Three Kings Construction and Realty Corporation for the development of the Northwoods Estates, a subdivision project covering Lot No. 3783-E and adjacent lots. For this purpose, they contracted the services of respondent, Engineer Dale Olea.

In 2003, respondents started constructing a perimeter wall on Lot No. 3783-E.

On November 28, 2003, petitioners, through counsel, wrote respondents asking them to stop constructing the wall, and remove all installed construction materials and restore the former condition of Lot No. [3]783-E which they (petitioners) claimed to be a road lot. [1] They also claimed that the construction obstructed and closed the only means of ingress and egress of the Nogoy spouses and their family, and at the same time, caved in and impeded the ventilation and clearance due the Castro spouses residential house.[2]

Petitioners demand remained unheeded, prompting them to file before the Regional Trial Court (RTC) of San Fernando, Pampanga a complaint,[3] docketed as Civil Case No. 12834, for injunction, restoration of road lot/right of way and damages with prayer for temporary restraining order and/or writ of preliminary injunction.

Before respondents filed their Answer, [4] petitioners filed an Amended Complaint, [5] alleging that the construction of the perimeter wall was almost finished and thus modifying their prayer for a writ of preliminary injunction to a writ of preliminary mandatory injunction, viz: WHEREFORE, it is respectfully prayed of this Honorable Court that:

A.

Before trial on the merits, a temporary restraining order be issued immediately restraining the defendants from doing further construction of the perimeter wall on the premises, and thereafter, a writ of preliminarymandatory injunction be issued enjoining the defendants from perpetrating and continuing with the said act and directing them jointly and severally, to restore the road lot, Lot 3783-E to its previous condition.

x x x x [6] (Underscoring in the original; emphasis supplied)

After hearing petitioners application for a writ of preliminary mandatory injunction, Branch 44 of the San Fernando, Pampanga RTC denied the same, without prejudice to its resolution after the trial of the case on the merits, in light of the following considerations: After a judicious evaluation of the evidence, the Commissioners Report on the Conduct of the Ocular Inspection held on February 14, 2004, as well as the pleadings, the Court is of the opinion and so holds that a writ of preliminary injunction should not be issued at this time. Plaintiffs have not clearly shown that their rights have been violated and that they are entitled to the relief prayed for and that irreparable damage would be suffered by them if an injunction is not issued. Whether lot 3783-E is a road lot or not is a factual issue which should be resolved after the presentation of evidence. This Court is not inclined to rely only on the subdivision plans presented by plaintiffs since, as correctly argued by defendants, the subdivision plans do not refer to lot 3783-E hence are not conclusive as to the status or classification of lot 3783-E. This court notes further that Subdivision Plan Psd-03000577 of Lot 3783 from which the other subdivision plans originates [sic] does not indicate lot 3783-E as a road lot. Even the physical evidence reveals that lot 3783-E is not a road lot. The Court noticed during the ocular inspection on February 14, 2004, that there is a PLDT box almost in front of lot 3783-E. There is no visible pathway either in the form of a beaten path or paved path on lot 3783-E. Visible to everyone including this court are wild plants, grasses, and bushes of various kinds. Lot 3783-E could not have been a road lot because Sps. Nogoy, one of the plaintiffs, even built a structure on lot 3783-E which they used as a coffin factory. Plaintiffs failed to prove that they will be prejudiced by the construction of the wall. The ocular inspection showed that they will not lose access to their residences. As a matter of fact, lot 3783-E is not being used as an access road to their residences and there is an existing secondary road within St. Benedict Subdivision that serves as the main access road to the highway. With respect to the blocking of ventilation and light of the residence of the Sps. Castro, suffice it to state that they are not deprived of light and ventilation. The perimeter wall of the defendants is situated on the left side of the garage and its front entrance is still open and freely accessible. This is indeed an issue of fact which should be ventilated in a full blown trial, determinable through further presentation of evidence by the parties. x x x xxxx

WHEREFORE, premises considered, plaintiffs application for the issuance of a writ of preliminary mandatory injunction is denied without prejudice to its resolution after the trial of the case on the merits.[7] (Underscoring supplied)

Their Motion for Reconsideration[8] having been denied, petitioners filed a petition for certiorari[9] before the Court of Appeals which dismissed the same[10] and denied their subsequent Motion for Reconsideration.[11]

Hence, the petitioners filed the present petition, [12] faulting the Court of Appeals in I. . . . DECID[ING] AND RESOLV[ING] A QUESTION OF SUBSTANCE NOT IN ACCORD WITH THE BASIC GOVERNING LAW ( PRESIDENTIAL DECREE NO. 1529) AND APPLICABLE DECISIONS OF THIS HONORABLE COURT. II. . . . PROMOTING THE LOWER COURTS RATIOCINATION THAT PETITIONERS ARE SEEKING THE ESTABLISHMENT OF AN EASEMENT OF RIGHT OF WAY, WHEN THEY ARE CLAIMING THE ENFORCEMENT OF THE STATUTORY PROHIBITION AGAINST CLOSURE OR DISPOSITION OF AN ESTABLISHED ROAD LOT. III. . . . SANCTION[ING] THE LOWER COURTS PATENT GRAVE ABUSE OF DISCRETION IN PERFUNCTORILY DENYING PETITIONERS APPLICATION FOR WRIT OF PRELIMINARY INJUNCTION.[13]

It is settled that the grant of a preliminary mandatory injunction rests on the sound discretion of the court, and the exercise of sound judicial discretion by the lower court should not be interfered with except in cases of manifest abuse.[14]

It is likewise settled that a court should avoid issuing a writ of preliminary mandatory injunction which would effectively dispose of the main case without trial. [15]

In the case at bar, petitioners base their prayer for preliminary mandatory injunction on Section 44 of Act No. 496 (as amended by Republic Act No. 440), Section 50 of Presidential Decree 1529, and their claim that Lot No. 3783-E is a road lot.

To be entitled to a WRIT OF PRELIMINARY INJUNCTION , however, the petitioners must establish the following REQUISITES: (a) the invasion of the right sought to be protected is material and substantial; (b) the right of the complainant is clear and unmistakable; and (c) there is an urgent and permanent necessity for the writ to prevent serious damage. [16]

Since a preliminary mandatory injunction commands the performance of an act, it does not preserve the status quo and is thus more cautiously regarded than a mere prohibitive injunction.
[17]

Accordingly, the issuance of a writ of preliminary mandatory injunction is justified only in a clear case,

free from doubt or dispute.[18] When the complainants right is thus doubtful or disputed, he does not have a clear legal right and, therefore, the issuance of injunctive relief is improper.

Section 44 of Act 496,[19] which petitioners invoke, provides: xxxx Any owner subdividing a tract of registered land into lots shall file with the Chief of the General Land Registration Office a subdivision plan of such land on which all boundaries, streets and passageways, if any, shall be distinctly and accurately delineated. If no streets or passageways are indicated or no alteration of the perimeter of the land is made, and it appears that the land as subdivided does not need of them and that the plan has been approved by the Chief of the General Land Registration Office, or by the Director of Lands as provided in section fifty-eight of this Act, the Register of Deeds may issue new certificates of title for any lot in accordance with said subdivision plan. If there are streets and/or passageways, no new certificates shall be issued until said plan has been approved by the Court of First Instance of the province or city in which the land is situated. A petition for that purpose shall be filed by the registered owner, and the court after notice and hearing, and after considering the report of the Chief of the General Land Registration Office, may grant the petition, subject to the condition, which shall be noted on the proper certificate, that no portion of any street or passageway so delineated on the plan shall be closed or otherwise disposed of by the registered owner without approval of the court first had, or may render such judgment as justice and equity may require.[20]

Section 50 of Presidential Decree No. 1529,[21] which petitioners likewise invoke, provides: SECTION 50. Subdivision and consolidation plans. Any owner subdividing a tract of registered land into lots which do not constitute a subdivision project as defined and provided for under P.D. No. 957, shall file with the Commissioner of Land Registration or with the Bureau of Lands a subdivision plan of such land on which all boundaries, streets, passageways and waterways, if any, shall be distinctly and accurately delineated. If a subdivision plan, be it simple or complex, duly approved by the Commissioner of Land Registration or the Bureau of Lands together with the approved technical descriptions and the corresponding owner's duplicate certificate of title is presented for registration, the Register of Deeds shall, without requiring further court approval of said plan, register the same in accordance with the provisions of the Land Registration Act, as

amended: Provided, however, that the Register of Deeds shall annotate on the new certificate of title covering the street , passageway or open space, a memorandum to the effect that except by way of donation in favor of the national government, province, city or municipality, no portion of any street, passageway, waterway or open space so delineated on the plan shall be closed or otherwise disposed of by the registered owner without the approval of the Court of First Instance of the province or city in which the land is situated. x xx[22]

The best evidence thus that Lot No. 3783-E is a road lot would be a memorandum to that effect annotated on the certificate of title covering it. Petitioners presented TCT No. 185702-R covering Lot No. 3783-E in the name of Sunny Acres Realty Management Corporation which states that the registration is subject to the restrictions imposed by Section 44 of Act 496, as amended by Rep. Act No. 440. [23] The annotation does not explicitly state, however, that Lot No. 3783-E is a road lot.

In any event, TCT No. 185702-R had been cancelled and in its stead was issued TCT No. 247778-R[24] which, in turn, was cancelled by TCT No. 269758-R [25] in the name of respondent Co and his siblings.

TCT No. 247778-R and respondent Cos TCT No. 269758-R do not now contain the aforementioned memorandum annotated on TCT No. 185702-R re the registration being subject to restrictions imposed by Section 44 of Act 496, as amended by Republic Act No. 440. Given the immediately foregoing circumstances, there is doubt on whether Lot No. 3783-E is covered by a road lot. While petitioners correctly argue that certain requirements must be observed before encumbrances, in this case the condition of the lots registration as being subject to the law, may be discharged and before road lots may be appropriated [26] gratuity assuming that the lot in question was indeed one, TCT Nos. 247778-R and 269758-R enjoy the presumption of regularity [27] and the legal requirements for the removal of the memorandum annotated on TCT No. 185702-R are presumed to have been followed.[28]

At all events, given the following factual observations of the trial court after conducting an ocular inspection of Lot 3783-E, viz: x x x The ocular inspection showed that [petitioners] will not lose access to their residences. As a matter of fact, lot 3783-E is not being used as an access road to their residences and there is an existing secondary road within St. Benedict Subdivision that serves as the main access road to the highway.[29] With respect to the blocking of ventilation and light of the residence of the Sps. Castro, suffice it to state that they are not deprived of light and ventilation. The perimeter wall of the defendants is situated on the left side of the garage and its front entrance is still open and freely accessible, [30]

and the absence of a showing that petitioners have an urgent and paramount need for a writ of preliminary mandatory injunction to prevent irreparable damage, they are not entitled to such writ.

WHEREFORE, the petition is DENIED.

SO ORDERED. G.R. No. 144755 June 8, 2005

SPOUSES ELISEO F. ESTARES and ROSENDA P. ESTARES, petitioners, vs. COURT OF APPEALS, HON. DAMASO HERRERA as Presiding Judge of the RTC, Branch 24, Bian, Laguna PROMINENT LENDING & CREDIT CORPORATION, PROVINCIAL SHERIFF OF LAGUNA and Sheriff IV ARNEL G. MAGAT, respondents. DECISION AUSTRIA-MARTINEZ, J.: Before us is a petition for certiorari and prohibition under Rule 65 of the Rules of Court which assails the Decision1 and Resolution of the Court of Appeals dated April 17, 2000 and July 7, 2000, respectively, in CA-G.R. SP No. 56123. The factual background of the case is as follows: On May 21, 1999, petitioner Spouses Eliseo F. Estares and Rosenda P. Estares (Estares spouses for brevity) filed a complaint for "Damages and Preliminary Prohibitory Injunction" against private respondent Prominent Lending & Credit Corporation (PLCC) before the Regional Trial Court, Branch 24, Bian, Laguna, docketed as Civil Case No. B-5476. 2 They alleged that: on January 12, 1998, they obtained a loan from PLCC for P800,000.00 secured by a real estate mortgage over a 363-square meter parcel of land with improvements situated in the Municipality of Santa Rosa, Laguna, covered by Transfer Certificate of Title (TCT) No. 99261; the promissory note and the real estate mortgage were falsified because they affixed their signatures on two blank documents; the monthly interest of 3.5% and 3% penalty on each delayed monthly interest are different from the 18% interest per annum to which they agreed to; for failure to pay their obligation despite repeated demands, PLCC filed a petition for extrajudicial foreclosure with the Office of the Provincial Sheriff of Laguna; and on June 8, 1999, the Sheriff sent a Notice of Extrajudicial Sale to the Estares spouses. Accordingly, the Estares spouses sought to declare as null and void the promissory note and the real estate mortgage for not reflecting their true agreement. In the interim, they prayed for a temporary restraining order (TRO) and/or writ of preliminary injunction to enjoin PLCC from taking possession of the mortgaged property and proceeding with the extrajudicial sale scheduled on July 13, 1999 at 10:00 a.m.

On June 30, 1999, the Estares spouses amended their complaint to include the Register of Deeds of Laguna-Calamba Branch, the Provincial Sheriff of Laguna and Sheriff IV Arnel G. Magat as partydefendants.3 On July 12, 1999, the trial court issued a TRO in favor of the Estares spouses.4 The parties subsequently agreed to maintain the status quo until August 20, 1999.5 On August 6, 1999, PLCC filed its Answer with Counterclaim alleging that the Estares spouses were duly apprised of the terms and conditions of the loan, including the rate of interest, penalties and other charges, in accordance with the Truth in Lending Act or Republic Act No. 3765. It opposed the prayer for restraining order on the ground that there is no factual and legal basis for its issuance since the Estares spouses fear of eviction is false.6 At the hearing on the Estares spouses application for a writ of preliminary injunction, Rosenda P. Estares (Rosenda for brevity) testified that: the loan proceeds of P637,000.00, received on January 12, 1998, was used in the improvement and renovation of their boarding house; they did not question PLCC in writing why they only received P637,000.00; when they received the Statement of Account, they did not question the figures appearing therein; when they received PLCCs demand letter, they went to the formers office not to question the loans terms and conditions but merely to request for extension of three months to pay their obligation. They adduced in evidence the promissory note, real estate mortgage, statement of account, petition for extrajudicial foreclosure and the notice of extrajudicial sale. The Estares spouses then rested their case. In opposition to the application for a writ of preliminary injunction, PLCC presented its manager, Rey Arambulo, who testified that the Estares spouses were duly apprised of the terms and conditions of the loan, including the rate of interest, penalties and other charges, in accordance with the Truth in Lending Act or Republic Act No. 3765. It submitted the same evidence offered by the Estares spouses, along with the latters credit application, the credit investigation report, the receipts PLCC issued, and the disclosure statement on the loan. On August 18, 1999, the trial court denied the Estares spouses application for a writ of preliminary injunction, holding that the latter failed to establish the facts necessary for an injunction to issue .7 On August 31, 1999, the Estares spouses filed a motion for reconsideration.8 During the hearing on the motion for reconsideration on September 17, 1999, Eliseo P. Estares (Eliseo for brevity) moved that he be allowed to testify on the circumstances of the loan but the trial court denied it. The trial court deemed it best that he be presented during the trial on the merits. 9 On October 1, 1999, the trial court denied the motion for reconsideration.10 On December 7, 1999, the Estares spouses filed a petition for certiorari and prohibition in the Court of Appeals ascribing grave abuse of discretion upon the trial court in issuing the Orders dated August 18, 1999 and October 1, 1999 which denied their prayer for a writ of preliminary injunction and motion for reconsideration, respectively.11 On December 14, 1999, without giving due course to the petition, the Court of Appeals issued a Resolution requiring the PLCC to file its comment to the petition. The action on the Estares spouses application for a TRO and writ of preliminary injunction was deferred and held in abeyance until after receipt of the comment.12 With no restraining order enjoining him, Sheriff Magat conducted an auction sale on January 5, 2000, with PLCC as highest bidder for P1,500,000.00.13 In its Comment dated January 15, 2000, PLCC claimed that the trial court did not commit grave abuse of discretion in denying the Estares spouses application for a writ of preliminary injunction since the latter

failed to prove their right to injunctive relief and the action sought to be enjoined has been rendered moot by the auction sale conducted on January 5, 2000.14 On April 17, 2000, the Court of Appeals dismissed the petition for lack of merit, holding that the trial court did not abuse its discretion in denying the Estares spouses application for a writ of preliminary injunction since the latter failed to prove the requisites for the issuance thereof. 15 The Estares spouses then moved for reconsideration of the April 17, 2000 decision. In addition, they prayed that the auction sale on January 5, 2000, as well as the minutes of auction sale and certificate of sale, be declared null and void not only because there was no publication of the notice of auction sale but the auction sale preempted the Court of Appeals in the disposition of the case and was c onducted in defiance of the Resolution dated December 14, 1999. 16 On July 7, 2000, the Court of Appeals denied the Estares spouses motion for reconsideration.17 On September 16, 2000, the Estares spouses filed the present petition for certiorari and prohibition anchored on the following grounds: I THE COURT OF APPEALS ERRED IN NOT GRANTING A WRIT OF PRELIMINARY INJUNCTION TO PREVENT RESPONDENTS PLCC AND PROVINCIAL SHERIFF OF LAGUNA/ SHERIFF ARNEL MAGAT FROM FORECLOSING THE MORTGAGE AND CONDUCTING THE AUCTION SALE OF PETITIONERS PROPERTY AND/OR IN UPHOLDING THE ORDER DATED AUGUST 18, 1999 OF JUDGE DAMASO A. HERRERA, RTC-BRANCH 24, LAGUNA. II THE COURT OF APPEALS ERRED IN NOT DECLARING AS NULL AND VOID AND/OR SETTING ASIDE THE AUCTION SALE OF THE PETITIONERS HOUSE AND LOT CONDUCTED BY SHERIFF ARNEL MAGAT ON JANUARY 5, 2000 FOR LACK OF RE-PUBLICATION OF NOTICE OF EXTRAJUDICIAL SALE, FOR PRE-EMPTING THE COURT OF APPEALS IN DECIDING THE CASE, AND FOR RENDERING THE PETITION IN CA-G.R. SP NO. 56123 MOOT AND ACADEMIC. III THE COURT OF APPEALS ERRED IN NOT DECLARING DENIAL OF DUE PROCESS TO OVERSEAS CONTRACT WORKER ELISEO ESTARES WHEN JUDGE DAMASO A. HERRERA REFUSED TO ALLOW HIM TO TESTIFY ON THE CIRCUMSTANCES OF THEIR LOAN WITH PLCC. 18 Anent the first ground, the Estares spouses insist that they firmly established their right to injunctive relief. They claim that the promissory note, credit application, disbursement voucher, disclosure statement and real estate mortgage are falsified; the promissory note is not reflective of the true amount of the loan, as well as the term, interest and charges thereon; the P126,362.28 represent additional charges, not as part of the loan, that were not agreed upon prior to or before the consummation of the loan; and the amount of the loan and rate of interest stated in the falsified promissory note are fictitious or simulated. With respect to the second ground, they maintain that the auction sale conducted on January 5, 2000 should be nullified because it lacked republication of the notice of auction sale and it was conducted in violation of the Court of Appeals Resolution dated December 14, 1999 which enjoined the parties to maintain the status quo pending the filing by the respondents of their Comment to the petition. They argue that PLCC and Sheriff Magat preempted the Court of Appeals from resolving their petition by conducting the auction sale on January 5, 2000.

As to the third ground, they aver that Eliseo was denied due process when the trial court refused to allow him to testify during the hearing on the motion for reconsideration. They contend that Eliseo, an overseas contract worker, purposely took leave from work in the Middle East to testify on the circumstances of the loan and his testimony was material to clarify the matter of notarization of the real estate mortgage and show that said document was falsified. On October 2, 2000, the Court granted the TRO prayed for in the petition and required the respondents to comment thereon.19 In its Comment dated October 25, 2000, PLCC asserts that the petition should be dismissed for being deficient on both procedural and substantive aspects. As to the procedural aspect, PLCC posits that the petition is filed beyond the sixty-day period required by the rules and therefore filed out of time. PLCC further claims that the verification and certification of nonforum shopping are both insufficient. The verification speaks of a "Pre-Trial Brief" while the certification of non-forum shopping was executed only by Rosenda. As to the substance of the petition, PLCC argues that the Estares spouses failed to establish their right to injunctive relief; the validity of the January 5, 2000 auction sale was brought only in the motion for reconsideration which is improper because it is a factual issue best addressed to the trial court; Sheriff Magat did not preempt the Court of Appeals in deciding CA-G.R. SP No. 56123 when he conducted the auction sale on January 5, 2000 because the Resolution dated December 14, 1999 of the said court did not suspend or restrain the sheriff from conducting the foreclosure sale; Eliseo was not denied due process because he sought to testify on factual matters in the hearing on their motion for reconsideration which is improper as factual matters are best brought and proved during the trial on the merits of the case. The Court gave due course to the petition and required the parties to submit their respective memoranda20 which they complied with.21 Before ruling on the issues raised in the petition, it is necessary to dwell on the procedural aspects of the case. From a reading of the grounds on which the instant petition for certiorari and prohibition are based, it is readily apparent that the Estares spouses are appealing a decision of the Court of Appeals by resorting to Rule 65, when their remedy should be based on Rule 45 of the Rules of Court. A petition for review under Rule 45 is not similar to a petition for certiorari under Rule 65. Under Rule 45, decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceedings involved, may be appealed to us by filing a petition for review on certiorari, which would be but a continuation of the appellate process over the original case. 22 In contrast, a special civil action under Rule 65 is an independent action based on the specific grounds therein provided and proper only if there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law.23 Thus, certioraricannot be availed of as a substitute for the lost remedy of an ordinary appeal.24 By their own account, the Estares spouses received the Order dated July 7, 2000 denying their motion for reconsideration from the Court of Appeals on July 18, 2000. Instead of filing a petition for review with this Court within 15 days thereof or until August 2, 2000, they filed this special civil action by registered mail on September 16, 2000 or 60 days from receipt of the Order dated July 7, 2000. By then, they had already lost the remedy of appeal. By availing of a wrong remedy, the instant petition should have merited outright dismissal.

Concerning the verification, we note that Rosenda stated therein that she caused the preparation of the "foregoing Pre-Trial Brief" but we consider the same as a slight error and honest mistake in the preparation of the petition. In any event, the purpose of requiring a verification is simply to secure an assurance that the allegations of the petition have been made in good faith; or are true and correct, not merely speculative.25 This requirement is simply a condition affecting the form of pleadings, and noncompliance therewith does not necessarily render it fatally defective. 26 Indeed, verification is only a formal, not a jurisdictional, requirement.27 With regard to the certification of non-forum shopping signed only by Rosenda, the rule is that the certificate of non-forum shopping must be signed by all the petitioners or plaintiffs in a case and the signing by only one of them is insufficient because a lone signatory cannot be presumed to have personal knowledge of the matters required to be stated in the attestation. 28 However, the Court has also stressed that the rules on forum shopping, which were designed to promote and facilitate the orderly administration of justice, should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective which is simply to prohibit and penalize the evils of forumshopping.29 The fact that the rules on forumshopping require strict compliance merely underscores its mandatory nature that it cannot be dispensed with or its requirements altogether disregarded, but it does not thereby interdict substantial compliance with its provisions under justifiable circumstances. 30 We find that the execution by Rosenda of the certificate of non-forum shopping in behalf of her copetitioner and husband, Eliseo, constitutes substantial compliance with the Rules. After all they share a common interest in the property involved since it is conjugal property, and the petition questioning the propriety of the decision of the Court of Appeals originated from an action brought by the spouses, and is clearly intended for the benefit of the conjugal partnership. Considering that the husband was at that time an overseas contract worker working in Algeria, whereas the petition was prepared in Sta. Rosa, Laguna, a rigid application of the rules on forumshopping that would disauthorize the wifes signing the certification in her behalf and that of her husband is too harsh and clearly uncalled for. 31 In any event, we find that this petition must still be dismissed as the Court of Appeals did not commit any grave abuse of discretion amounting to want or excess of jurisdiction in dismissing the petition. Generally, injunction is a preservative remedy for the protection of substantive rights or interests. It is not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit. The controlling reason for the existence of the judicial power to issue the writ is that the court may thereby prevent a threatened or continuous irremediable injury to some of the parties before their claims can be thoroughly investigated and advisedly adjudicated. It is to be resorted to only when there is a pressing necessity to avoid injurious consequences which cannot be remedied under any standard of compensation. The application of the writ rests upon an alleged existence of an emergency or of a special reason for such an order before the case can be regularly heard, and the essential conditions for granting such temporary injunctive relief are that the complaint alleges facts which appear to be sufficient to constitute a cause of action for injunction and that on the entire showing from both sides, it appears, in view of all the circumstances, that the injunction is reasonably necessary to protect the legal rights of plaintiff pending the litigation.32 The Estares spouses had the burden in the trial court to establish the following requirements for them to be entitled to injunctive relief: (a) the existence of their right to be protected; and (b) that the acts against which the injunction is to be directed are violative of such right. 33] To be entitled to an injunctive writ, the petitioner must show, inter alia, the existence of a clear and unmistakable right and an urgent and paramount necessity for the writ to prevent serious damage. 34 Thus, an injunctive remedy may only be resorted to when there is a pressing necessity to avoid injurious consequences which cannot be remedied under any standard compensation.35

In the present case, the Estares spouses failed to establish their right to injunctive relief. They do not deny that they are indebted to PLCC but only question the amount thereof. Their property is by their own choice encumbered by a real estate mortgage. Upon the nonpayment of the loan, which was secured by the mortgage, the mortgaged property is properly subject to a foreclosure sale. Rosendas testimony sealed the fate of the necessity of the writ of preliminary injunction. She admitted that: they did not question PLCC in writing why they only received P637,000.00; they did not question the figures appearing in the Statement of Account when they received it; and, when they received PLCCs demand letter, they went to the formers office not to question the loans terms and conditions but merely to request for extension of three months to pay their obligation. 36 She acknowledged that they only raised the alleged discrepancy of the amount loaned and the amount received, as well as the blank documents which they allegedly signed, after PLCC initiated the foreclosure proceedings. 37 It must be stressed that the assessment and evaluation of evidence in the issuance of the writ of preliminary injunction involve findings of facts ordinarily left to the trial court for its conclusive determination.38 As such, a trial courts decision to grant or to deny injunctive relief will not be set aside on appeal unless the court abused its discretion. In granting or denying injunctive relief, a court abuses its discretion when it lacks jurisdiction, fails to consider and make a record of the factors relevant to its determination, relies on clearly erroneous factual findings, considers clearly irrelevant or improper factors, clearly gives too much weight to one factor, relies on erroneous conclusions of law or equity, or misapplies its factual or legal conclusions.39 In the present case, the Estares spouses clearly failed to prove that they have a right protected and that the acts against which the writ is to be directed are violative of said right. Hence, the Court of Appeals did not commit a grave abuse of its discretion amounting to excess or lack of jurisdiction in dismissing petitioners petition forcertiorari. There is likewise no merit to the claim that the Court of Appeals gravely abused its discretion when it denied the prayer to nullify the auction sale held on January 5, 2000 for lack of republication of the notice of auction sale and for preempting the Court of Appeals in deciding the case and rendering the petition in CA-G.R. SP No. 56123 moot and academic. The absence of republication of the notice of auction sale is a factual matter which by the weight of judicial precedents cannot be inquired into by this Court in a petition for certiorari. It is best addressed to the attention of the trial court and taken up in the trial of the case, necessitating presentation of evidence by both parties. The propriety of the auction sale is a matter which the trial court is in the best position to determine. For it is basic that certiorari under Rule 65 is a remedy narrow in scope and inflexible in character. It is not a general utility tool in the legal workshop. 40 It offers only a limited form of review. Its principal function is to keep an inferior tribunal within its jurisdiction. 41 It can be invoked only for an error of jurisdiction, that is, one where the act complained of was issued by the court, officer or a quasi-judicial body without or in excess of jurisdiction, or with grave abuse of discretion which is tantamount to lack or in excess of jurisdiction,42 not to be used for any other purpose, 43 such as to cure errors in proceedings or to correct erroneous conclusions of law or fact. 44 Again suffice it to say that the only issue settled here is the propriety of the non-issuance of a writ of preliminary injunction pending the final outcome of the case. As to petitioners assertion that the Court of Appeals in its Resolution dated December 14, 1999 impliedly directed the parties to maintain the status quo, we deemed it worthy to quote in full the said Resolution, thus: Without necessarily giving due course to the petition, the Court requires the respondents to file their comment (not motion to dismiss) within ten (10) days from notice, which may be treated as their Answer should the petition be given due course.

Respondents are likewise ordered to show cause in the same Comment why a temporary restraining order and writ of preliminary injunction should not be issued. The action of the petitioners application for a temporary restraining order and writ of preliminary injunction is deferred and held in abeyance until after receipt of respondents Comment. 45 Clearly, the Court of Appeals did not give due course to the petition but merely required PLCC to comment thereon. The Court of Appeals did not enjoin the conduct of the auction sale. In any case, the necessity for the issuance of the writ of injunction has been found wanting. Lastly, the Estares spouses claim that Eliseo was denied due process when the trial court refused to allow him to testify during hearing on the motion for reconsideration deserves scant consideration. It must be remembered that a writ of preliminary injunction is generally based solely on initial and incomplete evidence. The evidence submitted during the hearing on an application for a writ of preliminary injunction is not conclusive or complete for only a "sampling" is needed to give the trial court an idea of the justification for the preliminary injunction pending the decision of the case on the merits. 46 We note that it was the Estares spouses choice to present only Rosenda to testify on the circumstances of the loan at the hearing on their application for a writ of preliminary injunction and they cannot assert that Eliseo should have been accorded that opportunity during the hearing on the motion for reconsideration. The essence of due process is found in the reasonable opportunity to be heard and submit any evidence one may have in support of one's defense. What the law proscribes is the lack of opportunity to be heard.47 As long as a party is given the opportunity to defend his interests in due course, he would have no reason to complain, for it is this opportunity to be heard that makes up the essence of due process.48 Eliseo cannot complain that he was deprived of due process since he is given the full opportunity to testify on the circumstances of the loan during the trial of the main case. 49 All told, no grave abuse of discretion could therefore be imputed to the Court of Appeals in dismissing petitioners petition for certiorari with prohibition, for lack of merit. WHEREFORE, the instant petition for certiorari and prohibition is DISMISSED. The assailed Decision and Resolution of the Court of Appeals dated April 17, 2000 and July 7, 2000, respectively, in CA-G.R. SP No. 56123 are AFFIRMED in all respects. The temporary restraining order issued by this Court is lifted. Costs against petitioners. SO ORDERED. Buyco vs. Baraquia DECISION CARPIO MORALES, J.: Nelson Baraquia (respondent) filed before the Regional Trial Court (RTC) of Iloilo City a complaint[1] against Dominico Buyco and Clemente Buyco (Buycos), for the establishment of a permanent right of way, injunction and damages with preliminary injunction and temporary restraining order, to enjoin the Buycos from closing off a private road within their property which he has been using to go to and from the public highway to access his poultry farm.

The Buycos died during the pendency of the case, and were substituted by Purisimo Buyco (petitioner) and his brother Gonzalo. Branch 39 of the Iloilo RTC granted respondents application for preliminary injunction.

By Decision[2] of February 14, 2007, the trial court dismissed respondents complaint for failure to establish the concurrence of the essential requisites for the establishment of an easement of right of way under Articles 649 and 650 of the Civil Code.[3] It accordingly lifted the writ of preliminary injunction.

Respondent filed a notice of appeal of the trial courts decision. Petitioner filed too a notice of partial appeal bearing on to the non-award of prayer for damages.

Respondent later filed with the trial court a motion to cite petitioner and his brother Gonzalo in contempt, alleging that they had closed off the subject road, thus violating the writ of preliminary injunction. The trial court, by Resolution of March 13, 2007, [4] noting that respondent received on March 5, 2007 his copy of its decision while petitioner received his on February 21, 2007, held that the February 14, 2007 decision had not yet become final and executory, hence, the writ of preliminary injunction remained to be valid, efficacious and obligatory, rendering petitioners act of closing the road on March 1, 2007 an indirect contempt of court. It thus declared petitioner and his brother in contempt of court.

Petitioner moved for reconsideration of the trial courts March 13, 2007 Resolution, contending that a preliminary injunction, once quashed, ceases to exist, and that he and his brother cannot be held guilty of indirect contempt by mere motion.

By Resolution[5] of April 18, 2007, the trial court set aside the March 13, 2007 Resolution and granted petitioners motion for reconsideration, ruling that petitioner and his brother cannot be held in contempt of court by mere motion and not by verified petition.

On the lifetime of the writ of preliminary injunction, the trial court held that it is its illumined opinion that the matter of whether a writ of preliminary injunction remains valid until the decision annulling the same attains finality is not firmly entrenched in jurisprudence , contrary to the position of the defendants. It thereupon quoted a portion of the ruling in the 2006 case of Lee v. Court of Appeals,[6] to wit: Furthermore, notwithstanding the stand of both parties, the fact remains that the Decision of the Court of Appeals annulling the grant of preliminary injunction in favor of petitioners has not yet become final on 14 December 2000. In fact, such Decision has not yet

become final and executory even on the very date of this Decision, in view of petitioners appeal with us under Rule 45 of the 1997 Rules of Civil Procedure. The preliminary injunction, therefore, issued by the trial court remains valid until the Decision of the Court of Appeals annulling the same attains finality, and violation thereof constitutes indirect contempt which, however, requires either a formal charge or a verified petition.[7]

Hence, this petition for review, raising a question of law whether the lifting of a writ of preliminary injunction due to the dismissal of the complaint is immediately executory, even if the dismissal of the complaint is pending appeal. The petition is meritorious.

A writ of preliminary injunction is an order granted at any stage of an action or proceeding prior to the judgment or final order, requiring a party or a court, agency or a person to refrain from a particular act or acts.[8] It is merely a provisional remedy, adjunct to the main case subject to the latters outcome.[9] It is not a cause of action in itself. [10] Being an ancillary or auxiliary remedy, it is available during the pendency of the action which may be resorted to by a litigant to preserve and protect certain rights and interests therein pending rendition, and for purposes of the ultimate effects, of a final judgment in the case.

The writ is provisional because it constitutes a temporary measure availed of during the pendency of the action and it is ancillary because it is a mere incident in and is dependent upon the result of the main action.[11]

It is well-settled that the sole object of a preliminary injunction, whether prohibitory or mandatory, is to preserve the status quo until the merits of the case can be heard. It is usually granted when it is made to appear that there is a substantial controversy between the parties and one of them is committing an act or threatening the immediate commission of an act that will cause irreparable injury or destroy the status quo of the controversy before a full hearing can be had on the merits of the case .[12]

Indubitably, in the case at bar, the writ of preliminary injunction was granted by the lower court upon respondents showing that he and his poultry business would be injured by the closure of the subject road. After trial, however, the lower court found that respondent was not entitled to the easement of right of way prayed for, having failed to prove the essential requisites for such entitlement, hence, the writ was lifted.

The present case having been heard and found dismissible as it was in fact dismissed, the writ of preliminary injunction is deemed lifted, its purpose as a provisional remedy having been served, the appeal therefrom notwithstanding.

Unionbank v. Court of Appeals[13] enlightens: x x x a dismissal, discontinuance or non-suit of an action in which a restraining order or temporary injunction has been granted operates as a dissolution of the restraining order or temporary injunction, regardless of whether the period for filing a motion for reconsideration of the order dismissing the case or appeal therefrom has expired. The rationale therefor is that even in cases where an appeal is taken from a judgment dismissing an action on the merits, the appeal does not suspend the judgment, hence the general rule applies that a temporary injunction terminates automatically on the dismissal of the action.

The lower courts citation of Lee v. Court of Appeals[14] is misplaced. In Lee, unlike in the present case, the original complaint for specific performance and cancellation of real estate mortgage was not yet decided on the meritsby the lower court. Thus, the preliminary injunction therein issued subsisted pending appeal of an incident.

There being no indication that the appellate court issued an injunction in respondents favor, the writ of preliminary injunction issued on December 1, 1999 by the trial court was automatically dissolved upon the dismissal of Civil Case No. 26015.

WHEREFORE, the petition is GRANTED. The Resolution dated April 18, 2007 of the trial court isREVERSED. The writ of preliminary injunction which Branch 39 of the Iloilo Regional Trial Court issued on December 1, 1999 was automatically dissolved upon its dismissal by Decision of February 14, 2007 of Civil Case No. 26015.

SO ORDERED. EN BANC

[A. M. No. CA-01-32. January 23, 2002]

HEIRS OF THE LATE JUSTICE JOSE B. L. REYES, complainants, vs. JUSTICES DEMETRIO G. DEMETRIA, RAMON A. BARCELONA, and ROBERTO A. BARRIOS [Special Third

Division]; ATTY. TERESITA R. MARIGOMEN, Division Clerk of Court, Special Fourth Division and MR. EFREN R. RIVAMONTE, Special Sheriff, Mailing Section, respondents. RESOLUTION PARDO, J.: Justice Malcolm aptly described ideal judges as men who have a mastery of the principles of law, who discharge their duties in accordance with law, who are permitted to perform the duties of the office undeterred by outside influence, and who are independent and self-respecting human units in a judicial system equal and coordinate to the other two departments of government. Those who wield the judicial gavel have the duty to study our laws and their latest wrinkles. They owe it to the public to be legally knowledgeable for ignorance of the law is the mainspring of injustice. [1]

The Case The case before the Court is a verified complaint [2] of the heirs of the late Justice Jose B. L. Reyes, represented byAdoracion Reyes, and the heirs of Dr. Edmundo A. Reyes, namely, Ma. Teresa P. Reyes and Carlos P. Reyes against Justices Demetrio G. Demetria,[3] Ramon A. Barcelona and Roberto A. Barrios, Court of Appeals, Atty. Teresita R.Marigomen, Division Clerk of Court, Special Fourth Division, Court of Appeals and Mr. Efren R. Rivamonte, Special Sheriff, Court of Appeals, for violation of Section 11, Rule 59 and Sec. 8, Rule 39 of the Revised Rules of court, Sections 3.01 and 3.08 of the Code of Judicial Conduct and Article 204 of the Revised Penal Code, for knowingly rendering an unjust judgment.

The Antecedent Facts The instant administrative complaint arose from a simple ejectment case filed by complainants against Metro Manila Builders, Inc. (Manila Builders). Pursuant to a contract executed on November 30, 1976, complainants predecessors-in-interest leased a parcel of land with an area of more than one (1) hectare situated along Taft Avenue, Pasay City to Manila Builders for twenty five (25) years at a rental rate of P15,000.00 to P30,000.00 a month. Under the lease agreement, Manila Builders would cover all present and future improvements on the property with insurance against certain risks and maintain the premises in good, sanitary and tenantable condition at all times. However, Manila Builders violated the terms and conditions of the lease agreement. Exercising the right to unilateral rescission,[4] complainants sent notice to Manila Builders terminating the lease and demanding that they vacate and surrender the premises subject of the lease agreement, which Manila Builders ignored. On February 3, 1997, complainants filed with the Metropolitan Trial Court, Pasay City, Branch 45 a complaint for unlawful detainer based on the breach of the contract of lease,[5] which the trial court decided on May 9, 1997 in complainants favor. The trial court ordered Manila Builders evicted from the premises. On May 16, 1997, complainants filed with the trial court a motion for execution of the judgment of eviction. Meanwhile, Manila Builders appealed to the Regional Trial Court, Pasay City, Branch 113; however, the appeal was subsequently dismissed for failure to file an appeal memorandum on time. On November 5, 1997, Manila Builders elevated the case to the Court of Appeals.[6] On November 26, 1997, the trial court granted complainants motion for execution, which order was correspondingly

issued on December 1, 1997. OnDecember 8, 1997, the Court of Appeals issued an order restraining the execution of the ejectment judgment.[7] On February 7, 1998, the Court of Appeals allowed the withdrawal of appeal filed by Manila Builders. Simultaneously with the withdrawal of the appeal, Manila Builders filed with the Regional Trial Court, Pasay City, Branch 231 an action for annulment of the ejectment judgment[8] due to the court a quos lack of jurisdiction and prayed for a temporary restraining order and/or preliminary injunction to enjoin the execution of the decision. However, the regional trial court did not issue an injunction against the trial court . On March 23, 1998, Manila Builders filed with the Court of Appeals a petition for certiorari and mandamus questioning the regional trial courts sub-silencio denial of its application for injunctive relief.[9] On the same day, the Court of Appeals issued a resolution [10] restraining the enforcement of the writ of execution in Civil Case No. 113-97, MTC, Pasay City, Branch 45.[11] Only two (2) members of the division signed the resolution, respondents Justices Demetria, ponente, and Barcelona, concurring. Justice Amin, member, did not sign. On April 14, 1998, in Civil Case No. 98-0366, the Regional Trial Court, Pasay City, Branch 231 dismissed the action for annulment of judgment on the ground that Manila Builders remedy is appeal in due time, which when withdrawn, was effectively abandoned. [12] On August 21, 1998, the Court of Appeals promulgated a decision, the dispositive portion of which reads: WHEREFORE, the decision of the Metropolitan Trial Court, Branch 45, Pasay City in Civil Case No. 11397 dated May 9, 1997 is SET ASIDE and the orders dated March 23, 1998 and April 14, 1998, issued in Civil Case No. 98-0366 are likewise SET ASIDE. Private respondent is hereby ordered to restore the subject property in the possession of petitioner and are hereby permanently enjoined from further committing acts disturbing physical possession of the subject property by petitioner until after the expiration of the Contract of Lease.[13] On the same date (August 21, 1998), Manila Builders filed a very urgent ex-parte motion for execution pending appeal. On September 14, 1998, complainants filed with the Supreme Court a petition for review on certiorari of the decision of the Court of Appeals. [14] On September 17, 1998, complainants filed with the Court of Appeals their consolidated comment on the very urgent motion for execution pending appeal, with motion to defer consideration due to the pendency of their petition with the Supreme Court. Despite the pending petition with this Court, on September 18, 1998, the Court of Appeals issued a resolution granting the motion for execution, the dispositive portion of which reads: Accordingly, this Court hereby RESOLVES to grant the instant petition. 1. A writ of Execution Pending Appeal of the Decision of this Court dated August 21, 1998 is hereby issued. The Division Clerk of this Court is hereby ordered to furnish a certified true copy of this resolution and the decision of this Court dated August 21, 1998 to the Metropolitan Trial Court, Branch 45, and Regional Trial Court, Branch 231 both of Pasay City. 2. Private respondents and their counsel are hereby adjudged guilty of indirect contempt of this Honorable Court and are hereby sentenced to pay a fine of P30,000.00. Private respondents and counsel are also directed to make a completer restoration to petitioner of the subject property.[15] [Emphasis supplied]

On September 21, 1998, the Court of Appeals (Second Division) issued a resolution reading: In view of the letter of Justice Demetrio G. Demetria (Ponente) dated September 21, 1998, the Chief of the Mailing Section ishereby directed to appoint a special sheriff to execute the decision of this Court dated August 21, 1998.[16] On the same date, respondent Efren R. Rivamonte, process server at the mailing section of the Court of Appeals, was appointed special sheriff to enforce the writ. Accordingly, 2nd Division Clerk of Court Caroline G. Ocampo-Peralta issued a writ of execution as follows: WRIT OF EXECUTION TO MR. EFREN RIVAMONTE (Designated Special Sheriff by the Mailing Section, Court of Appeals, Manila) G R E E T I N G S: WHEREAS, on August 21, 1998, a decision was issued by Special Third Division of this Court, promulgated on August 25, 1998 thedispositive portion of which reads: (p. 485-486, Rollo) WHEREFORE, the decision of the Metropolitan Trial Court, Branch 45, Pasay City in Civil Case No. 11397 dated May 9, 1997 is SET ASIDE and the Orders dated March 23, 1998 and April 14, 1998, issued in Civil Case No. 98-0366 are likewise SET ASIDE. Private respondents are hereby ordered to restore the subject property in the possession of petitioner and are hereby permanently enjoined from further committing acts disturbing physical possession of the subject property by petitioner until after the expiration of the Contract of Lease. SO ORDERED. WHEREAS, on August 21, 1998, a Very Urgent Ex-Parte Motion for Execution Pending Appeal was filed by petitioner. WHEREAS, on September 18, 1998, a resolution was issued and promulgated by the Former Special Third Division, the decretalportion of which reads: Accordingly, this Court hereby RESOLVES to grant the instant motion. 1. A writ of Execution Pending Appeal of the Decision of this Court dated August 21, 1998 is hereby issued. The Division Clerk of this Court is hereby ordered to furnish a certified true copy of this resolution and the decision of this Court dated August 21, 1998 to the Metropolitan Trial Court, Branch 45, and Regional Trial Court, Branch 231 both of Pasay City. 2. Private respondents and their counsel are hereby adjudged guilty of indirect contempt of this Honorable Court and are hereby sentenced to pay a fine of P30,000.00. Private respondents and counsel are hereby directed to make a complete restoration to petitioner of the subject property. SO ORDERED.

NOW THEREFORE, You are hereby commanded, pursuant to resolution dated September 18, 1998 which granted petitioners Motion for Execution Pending Appeal, to enforce this Writ in accordance with the decision issued on August 21, 1998 by ordering private respondents to restore petitioners of the possession of the subject property, and to make a return of this Writ to this Court within five (5) days from date, with your proceedings endorse thereon. WITNESS, the Honorable RAMON A. BARCELONA, Acting Chairman, Honorable DEMETRIO G. DEMETRIA, and Honorable ROBERTO A. BARRIOS, Members, Associate Justices of the FORMER THIRD DIVISION, this 21st of September, 1998, Court of Appeals, Manila. Respectfully yours, [Sgd.] CAROLINE G. OCAMPO-PERALTA Division Clerk of Court Second Division[17] Also on the same date, respondent Rivamonte evicted complainants from the premises and restored possession to Manila Builders.

The Administrative Charges Aggrieved by irregularities in the proceedings in CA-G. R. SP Nos. 47158 and 47720, on September 15, 2000, complainants filed with the Supreme Court the instant administrative complaint against respondent justices and employees of the Court of Appeals. Complainants alleged that they lost possession of the subject property due to the malicious, deliberate and unlawful issuance of Justices Demetria and Barcelona of the March 23, 1998 restraining order. Justices Demetria, Barcelona and Barrios further perpetrated an injustice when they promulgated the decision of August 21, 1998, and issued the writ of execution pending appeal dated September 21, 1998, despite the pendency of appeal with the Supreme Court. Complainants charged respondent justices, particularly the ponente, Justice Demetria, with violating pertinent provisions of the Code of Judicial Conduct. On May 4, 2001, the Court required respondents to file their respective comments on the complaint within ten (10) days from receipt.[18] On May 31, 2001, respondents Justices Ramon A. Barcelona and Roberto A. Barrios, and Division Clerk of CourtTeresita R. Marigomen filed a joint comment claiming innocence of the charges against them.[19] On June 21, 2001, respondent Justice Demetria filed his comment asserting good faith and basically adopting the defenses and arguments of his co-respondents.[20] On October 4, 2001, respondent Rivamonte filed his comment stating that he only complied with the orders of his superiors. [21] With regard to the resolution of March 23, 1998, respondent Justice Barcelona alleged that his concurrence in the issuance of the temporary restraining order was done in good faith and in deference to the discretion of the ponente,respondent Justice Demetria, who has knowledge of the soundness and factual merits of the case. We find this a wrongful approach to the issue. Concurrence must be based on the justices conviction after mature deliberation, not deference to the ponente. Obviously, the procedure adopted showed that there was no due deliberation on the case by the justices of the division. After the division members signed the resolution, the division members would not know the completeness of the signatures in the resolution since its release was ordered by the ponente, not by the Division Chairman. Hence, the division members would not know if the resolution was promulgated without the required number of signatures.[22]

On the other hand, respondent Justice Demetria maintained that the issuance of the March 23, 1998 resolution temporarily restraining the enforcement of the writ of execution in Civil Case No. 113-97 has sound basis in law and jurisprudence and was made after a thorough study by him. Respondent Marigomen noted nothing erroneous or anomalous upon seeing only two (2) signatures in the resolution of March 23, 1998, as it is legally permissible for a single justice to issue restraining orders, citing Rule 58, Section 2, [23] 1997 Rules of Civil Procedure and Rule 3, Section 9, [24] Revised Internal Rules of the Court of Appeals, as amended. [25]

The Courts Ruling Respondents submissions are patently without merit. There is no question regarding the authority of the Court of Appeals to issue a preliminary writ of injunction or temporary restraining order pending the resolution of petitions and appeals within its jurisdiction, especially in meritorious cases. What is questionable is the irregular procedure by which the March 23, 1998 resolution was arrived at and served on the parties. As it is, only two members of the Court of Appeals, Special Fourth Division, respondents Justices Demetria, ponente, and Barcelona, member, concurring, signed the resolution. Justice Omar U. Amin, member, did not sign. Hence, the resolution may not be received for filing, much less served on the parties. The clear intent of the division members was for the three members to act on the resolution. It is true that under the rules, a member of the Court of Appeals may issue a temporary restraining order. However, he shall advisedly use such power sparingly, in case of extreme necessity where there are compelling reasons to abate or avoid a grave injury to a party. And, such issuance must be submitted to the Court for ratification at the very next session of the Court. In light of the foregoing, we find that Justice Demetria, as ponente, disregarded existing rules of procedure. Considering that what he violated were the same rules of procedure he was expected and required to observe, such failure to comply was inexcusable. When the law transgressed is elementary, the failure to know or observe it constitutes gross ignorance of the law.[26] As regards respondent Marigomen, we find her explanation deferential to the views of respondent justices. As division clerk of court, she is bound by the prevailing rules of procedure of the Court of Appeals. Among her duties and responsibilities, she shall maintain the records of the Division in an orderly manner and keep watch over the status and progress of cases assigned to the Division. [27] She is expected to immediately report to the Justice assigned to study the case the failure of any party or parties to comply with any resolution or order of the Court within the period prescribed therefor.[28]She should have called the attention of the ponente upon seeing the incomplete signatures on the resolution. It should have been obvious that the resolution issuing a temporary restraining order was intended as a collegiate act, not the order of a single justice. She should not have released and allowed the said resolution to be served on the parties. Respondent Justice Barcelona may be absolved of administrative complicity regarding the issuance of a temporary restraining order. He had no knowledge about the lack of the requisite third signature before the resolution was promulgated. After affixing his signature, the resolution was not submitted to the Chairman for promulgation and release by the Division Clerk of Court. However, we find it grossly appalling that the Court of Appeals former Special Third Division (Barcelona, Demetria and Barrios, JJ.) immediately enforced its decision pending appeal. Worse, the Court of Appeals (2nd Division, Cui, Barcelona andDemetria, JJ.) directed the Chief of the Mailing Section to appoint a special sheriff to carry out the writ of execution pending appeal. The Court of Appeals has no authority to issue immediate execution pending appeal of its own decision. Discretionary execution under Rule 39, Section 2(a), Revised Rules of Court, as amended, applies to a judgment or final order of the trial court, upon good reasons to be stated in a special order after due hearing. [29]

Respondents Justices Barcelona and Barrios state that they were impressed by the good reasons posited by Manila Builders, that is, deprivation of income and its mounting obligations and liabilities. On the other hand, respondent JusticeDemetria explained that there is no prohibition, whether expressed or implied, regarding the authority of the Court of Appeals to issue immediate execution pending appeal of its own decision. We find no merit in respondents ratiocinations. Rule 51, Section 11, Revised Rules of Court expressly provides that the judgment of the Court of Appeals shall be remanded to the lower court for execution ten (10) days after entry of judgment, unless notice is given that the decision would be appealed to the Supreme Court. By requiring the remand of the records to the lower court after the entry of judgment, the rules completely cut off any authority of the Court of Appeals to directly undertake the execution of the final judgment, much less the authority to order its execution pending its finality. The Court cannot permit any act or omission, which yanks public faith away from the judiciary, [30] for a judges utter lack of familiarity with the rules undermines public confidence in the competence of the courts.[31] In fact, the Code of Judicial Conduct mandates that judges must be faithful to the law and maintain professional competence. He must have the basic rules at the palm of his hand and be proficient in the interpretation of laws and procedural rules. [32] Respondent justices argue that they did not have prior knowledge about the pendency of the petition before the Supreme Court, for had they learned about it, they would not have allowed the execution of the judgment.[33] The record belies such pharisaical stance. In the first place, the Court of Appeals was furnished with a copy of the petition. Secondly, the petitioners filed a manifestation expressly opposing execution pending appeal because they had elevated the case to the Supreme Court. The Court of Appeals ignored petitioners protestations. Thirdly, the dispositive portion of the September 18, 1998 expressly acknowledged that the decision was not final, to wit: Accordingly, this Court hereby RESOLVES to grant the instant petition. 1. A writ of Execution Pending Appeal of the Decision of this Court dated August 21, 1998 is hereby issued. x x x.[34] A scrutiny of the record reveals that respondent Justice Barrios did not take part in the appointment of respondentRivamonte as special sheriff. The Court (Second Division, Cui, Barcelona and Demetria, JJ.) by minute resolution datedSeptember 21, 1998, directed the Chief mailing section to appoint a special sheriff.[35] Indeed, respondent Justice Demetria has shown keen interest in the immediate execution of the decision despite the Court of Appeals lack of authority to appoint a special sheriff. The appointment of a special sheriff, in the person of respondent Rivamonte, encroached on the authority of the Supreme Court as the appointing power of all officials and employees of the judiciary. [36] The Court of Appeals has no authority to appoint or to direct any of its employees to appoint a special sheriff, [37] who was not even bonded as required by law.[38] With regard to respondent Rivamonte, considering that he relied on the belief that he was performing a ministerial duty of carrying out the orders of his superiors, which he thought to be lawful and valid, and in the absence of malice and bad faith, he may be absolved of administrative liability. However, as the assigned task was not within the scope of his duties as process server in the mailing section, prudence and caution dictated that he declines to perform the assignment. He is hereby warned that a repetition of the same or similar acts would be meted out with the appropriate penalty. With regard to the allegation that respondent Justices Demetria, Barcelona and Barrios knowingly rendered an unjust judgment against complainants in the certiorari petition, a review of the record would reveal insufficient evidence of bad faith or ill motive on the part of the magistrates concurring in the ponencia. At most, there was a lack of deliberation on the issues presented. This would not

automatically warrant administrative sanctions against the justices, [39] in the absence of a showing of any bad faith, malice or corrupt purpose.[40] In order to discipline a judge, it must be clearly shown that the judgment or order is unjust as being contrary to law and that the judge rendered it with conscious and deliberate intent to do an injustice. [41] Judges cannot be subjected to liability civil, criminal or administrative for any of their official acts, no matter how erroneous, so long as they act in good faith. It is only when they act fraudulently or corruptly, or with gross ignorance may they be held criminally or administratively responsible. [42] An erroneous decision or order is presumed to have been issued in good faith in the absence of proof to the contrary.[43] We find it apt to stress before we close that it is the duty of the members of the bench to avoid any impression of impropriety to protect the image and integrity of the judiciary. [44] Judges must not only render just, correct and impartial decisions, but must do so in a manner free of any suspicion as to their fairness, impartiality and integrity.[45] For, the conception of good judges has been, and is, of men who have a mastery of the principles of law, who discharge their duties in accordance with law. [46] Respondent Rivamonte may be absolved of administrative liability but must be admonished and warned to be more cautious in the discharge of his duties.

The Judgment IN VIEW WHEREOF, the Court finds respondent Justice Demetrio G. Demetria guilty of gross misconduct and imposes on him a fine of P20,000.00. The Court DISMISSES the complaint against respondent Teresita R. Marigomen with admonition and warning that a repetition of the same or similar acts would be dealt with more severely. Finally, the Court DISMISSES the complaint against respondent Efren R. Rivamonte with admonition and warning that a repetition of the same or similar acts would be dealt with more severely. SO ORDERED. Davide, Jr., C.J., Bellosillo, Melo, Puno, Kapunan, Mendoza, Panganiban, Quisumbing, Buena, Ynares-Santiago, De Leon, Jr., Sandoval-Gutierrez, and Carpio, JJ., concur. Vitug, J., no part; used to be counsel for Justice JBL Reyes. G.R. No. 140228 November 19, 2004

FRANCISCO MEDINA, et al.,petitioners, vs. GREENFIELD DEVELOPMENT CORPORATION, respondent. DECISION AUSTRIA-MARTINEZ, J.: The propriety of the writ of preliminary injunction issued by the Regional Trial Court of Muntinlupa City (Branch 276) in Civil Case No. 98-233 is the sole issue in this petition for review on certiorari, assailing the decision of the Court of Appeals nullifying said writ. Petitioners are the grandchildren of Pedro Medina from two marriages. In his first marriage to Isadora San Jose, Pedro sired three children: Rafael, Rita and Remegia; in his second marriage, this time to Natalia Mullet, Pedro had five: Cornelio, Brigida, Balbino, Crisanta and Rosila. Except for Balbino and Crisanta, all of Pedro's children likewise bore children, the petitioners in this case. 1

On June 5, 1962, Pedro, his brother Alberto Medina and his niece Nazaria Cruz (Alberto's daughter) executed a notarized Contract to Sell in favor of respondent Greenfield Development Corporation over a parcel of land located in Muntinlupa City, then in the Province of Rizal, covered by Transfer Certificate of Title (TCT) No. 100177 (Lot 90-A) and measuring 17,121 square meters. 2 A notarized Deed of Sale covering said property was subsequently entered into on June 27, 1962, in favor of respondent, and this time signed by Pedro, Cornelio, Brigida, Balbino, Gregoria, Crisanta, Rosila, and Alberto, all surnamed Medina, and Nazaria Cruz, as vendors.3 Thereafter, a notarized Deed of Absolute Sale with Mortgage was executed on September 4, 1964 in favor of respondent over Lot 90-B covered by TCT No. 100178, measuring 16,291 square meters. Signing as vendors were Pedro, Cornelio, Brigida, Balbino, Gregoria, Crisanta, Rosila, and Alberto, all surnamed Medina, and Nazaria Cruz.4 By virtue of these sales, respondent was able to register in its name the title to the two parcels of land with TCT No. 100578 covering Lot 90-A and TCT No. 133444 covering Lot 90-B. These properties were consolidated with other lots and were eventually registered on July 19, 1995, in the name of respondent under TCT Nos. 202295, 202296 and 202297.5 On November 6, 1998, petitioners instituted Civil Case No. 98-233, an action for annulment of titles and deeds, reconveyance, damages with preliminary injunction and restraining order, against respondent and the Register of Deeds of Makati .6 Included in the complaint are the heirs of Nazaria Cruz, as unwilling co-plaintiffs.7 Petitioners allege in their complaint that they are co-owners of these two parcels of land. While the titles were registered in the names of Pedro, Alberto, Cornelio, Brigida and Gregoria, all surnamed Medina, they alleged that they were recognized as co-owners thereof. In support of their case, petitioners maintain that the deeds of sale on these properties were simulated and fictitious, and the signatures of the vendors therein were fake. Despite the transfer of the title to respondent's name, they remained in possession thereof and in fact, their caretaker, a certain Santos Arevalo and his family still reside on a portion of the property. On July 13, 1998, petitioners caused an adverse claim to be annotated on the titles. After discovering the annotation, respondent constructed a fence on the property and posted security personnel, barring their ingress and egress. Thus, petitioners sought, among others, the issuance of a temporary restraining order and a writ of preliminary injunction enjoining respondent and its agents and representatives from preventing petitioners to exercise their rights over the properties. 8 Respondent denied the allegations, stating that petitioners have no valid claim on the properties as it is already titled in its name by virtue of the public documents executed by their predecessors. As counterclaim, respondent alleged that Santos Arevalo is not petitioners' caretaker and it was them who employed him as caretaker.9 On January 18, 1999, the trial court issued its resolution granting petitioners' prayer for injunctive relief. The dispositive portion of the resolution reads: Let therefore an injunction issue, enjoining and directing defendant DEVELOPMENT CORPORATION, its security guards, agents, representatives, claiming rights under it, from preventing plaintiffs and their caretaker Santos entering and going out of the subject premises, and from preventing them to property rights, upon payment of a bond in the amount of P100,000.00. It is SO ORDERED.10 Respondent filed a special civil action for certiorari and prohibition with the Court of Appeals, docketed as CA-G.R. SP No. 52015. On July 16, 1999, the Court of Appeals11 rendered its decision nullifying the trial court's resolution, the dispositive portion of which provides: GREENFIELD and all those Arevalo, from exercise their

IN THE (sic) LIGHT OF ALL THE FOREGOING, the petition is hereby GRANTED. The assailed Resolution of the Public Respondent Judge, dated January 18, 1999, in Civil Case No. 98-233 is hereby NULLIFIED. SO ORDERED.12 Petitioners now seek recourse with this Court, alleging the following grounds: I THE COURT OF APPEALS ERRED IN RELYING HEAVILY ON THE ANTECEDENT FACTS NARRATED IN THE PETITION OF THE RESPONDENT IN CA-G.R. SP NO. 52015 AND ADOPTED THE SAME AS ITS OWN WITHOUT EVIDENTIARY SUPPORT II THE COURT OF APPEALS COMMITTED A GRAVE ERROR IN UPHOLDING THE VALIDITY OF THE DEEDS OF SALE IN FAVOR OF THE RESPONDENT AND IN HOLDING THAT RESPONDENT'S TRANSFER CERTIFICATES OF TITLE ARE VALID DESPITE THE FACT THAT THE SAID ISSUES ARE YET TO BE TRIED III THE COURT OF APPEALS ERRED IN PRESUMING THAT NOTARIZED DOCUMENTS ARE VALID AND THAT RESPONDENT'S TORRENS TITLES ARE INDEFEASIBLE ON THE WRONG NOTION THAT THE RESPONDENT WAS PRESUMED INNOCENT PERSON IV THE COURT OF APPEALS COMMITTED A MISTAKE IN HOLDING THAT RESPONDENT WAS IN CONSTRUCTIVE POSSESSION OF THE SUBJECT PREMISES NOTWITHSTANDING THAT PETITIONERS ARE IN ACTUAL POSSESSION THEREOF V THE COURT OF APPEALS ERRED IN FINDING THAT PETITIONERS' RIGHT TO IMPUGN RESPONDENT'S TITLES HAVE (SIC) PRESCRIBED SINCE AN ACTION OR DEFENSE BASED ON THE INEXISTENCE OF A CONTRACT DOES NOT PRESCRIBE 13 As stated at the outset, the sole issue in this case is whether or not the trial court erred in granting petitioners' prayer for injunctive relief. This Court's resolution will revolve only on the propriety of the injunction. Any reference to the validity or invalidity of the transfers and the titles is merely preliminary, as the matter should be resolved after trial on the merits. It was the trial court's opinion that petitioners are entitled to the injunction for the following reasons: The Court however holds suspect the acquisition by Greenfield Development Corporation of the two parcels. Lot 90-A covered by Transfer Certificate of Title No. 100177, was promised to be sold to defendant under a contract to sell but the other co-owners did not sign this Contract to Sell, who all denied knowledge of the same. No contract of Sale followed this Contract to Sell which cannot be the bases of the issuance of a new title. A Contract to Sell is only a promise to sell, and is not a deed of sale, specially as this Contact to Sell is not signed by all of the registered owners.

This Court cannot also understand how the document, denominated as DEED OF ABSOLUTE SALE WITH MORTGAGE can be the bases (sic) of a new title. The absoluteness of the sale, is contradicted by the mortgage it also provides. There is absoluteness of sale only when the buyer upon execution of the contract, pay (sic) in full the consideration and ownership passes to the Vendee. The registered owners of Lot 90-B covered by Transfer Certificate of Title No. 100178 even deny having executed this document of Deed of Absolute Sale with Mortgage. Until these matters are threshed out at the trial on the merits, and after this is fully explained and determined, whether the properties were actually sold to Defendant Greenfield Development Corporation, irreparable injury will visit the landowner if the claim of ownership by Greenfield Development Corporation is allowed and not enjoined.14 The Court of Appeals, however, disagreed with the trial court. It noted that the trial court relied mainly on petitioners' allegations in the complaint, which were not supported by substantial evidence, and ignored the presumption of validity ascribed to the duly notarized deeds of conveyances and the titles issued to respondent. The Court of Appeals also found that respondent is in constructive possession of the properties in dispute considering that it is already the registered owner thereof since 1962. Lastly, the Court of Appeals held that petitioners' right to impugn respondent's title to the property has already prescribed.15 Section 3, Rule 58 of the Rules of Court provides for the grounds justifying the issuance of a preliminary injunction, to wit: SEC. 3. Grounds for issuance of preliminary injunction. - A preliminary injunction may be granted when it is established: (a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; (b) That the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or (c) That a party, court, agency or a person is doing, threatening or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual. 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.16 Thus, to be entitled to an injunctive writ, the petitioner has the burden to establish the following requisites: 17 1) a right in esse or a clear and unmistakable right to be protected; (2) a violation of that right; (3) that there is an urgent and permanent act and urgent necessity for the writ to prevent serious damage. Hence, petitioners' entitlement to the injunctive writ hinges on their prima facie legal right to the properties subject of the present dispute. The Court notes that the present dispute is based solely on the parties' allegations in their respective pleadings and the documents attached thereto. We have on one hand,

petitioners' bare assertion or claim that they are co-owners of the properties sold by their predecessors to respondent, and on the other, respondent's claim of ownership supported by deeds of conveyances and torrens titles in their favor. From these alone, it is clear that petitioners failed to discharge the burden of clearly showing a clear and unmistakable right to be protected. Where the complainant's right or title is doubtful or disputed, injunction is not proper. The possibility of irreparable damage without proof of actual existing right is not a ground for an injunction.18 Petitioners contend that the Court of Appeals should not have relied on respondent's allegations regarding the circumstances surrounding the sales and the transfer of the titles. Petitioners point out that trial on the merits of the case is still ongoing and respondent is yet to adduce evidence in support of its contention. The same, however, applies to petitioners' cause of action. They only have their own allegations and are yet to prove their claim. And as stated earlier, the only bases from which the propriety of the injunction can be determined are their respective pleadings and documents. What tilt the balance in respondent's favor are the notarized documents and the titles to the properties. The well-settled rule is that a document acknowledged before a notary public enjoys the presumption of regularity. It is a prima facie evidence of the facts therein stated. To overcome this presumption, there must be presented evidence that is clear and convincing. Absent such evidence, the presumption must be upheld. 19 In addition, the titles in the name of respondent, having been registered under the Torrens system, are generally a conclusive evidence of the ownership of the land referred to therein, 20 and a strong presumption exists that the titles are regularly issued and valid. 21 Therefore, until and unless petitioners show that the documents are indeed spurious and the titles invalid, then the presumptions must prevail at this juncture. Petitioners, however, argue that the presumption of validity of the notarized documents and titles cannot be applied in respondent's case as it is not an innocent purchaser. 22 According to petitioners, respondent is fully aware that at the time that the Contract to Sell was entered into in 1962, Leon Medina who is a coowner of the property then covered by TCT No. 21314, was already dead. Suffice it to say that these arguments already involve the merits of the main case pending before the trial court, which should not even be preliminarily dealt with, as it would be premature. Equally pertinent is the rule that courts should avoid issuing a writ of preliminary injunction, which in effect, would dispose of the main case without trial.23 The ground relied upon by the trial court in issuing the writ of preliminary injunction in this case is its doubt over the acquisition of the properties by respondent.24 Such basis would be virtually recognizing petitioners' claim that the deeds of conveyances and the titles are a nullity without further proof, to the detriment of the doctrine of presumption of validity in favor of these documents. There would, in effect, be a prejudgment of the main case and a reversal of the rule on the burden of proof since it would assume the proposition which the petitioners are inceptively duty bound to prove.25 Petitioners also claim that they are in actual possession of the property. As alleged in their complaint, they instituted Santos Arevalo, a co-petitioner, as caretaker. 26 They also alleged in their petition filed before this Court that Balbino and Yolanda Medina and their respective families are still residing on a portion of the property.27Respondent belies their claim, declaring that it employed Arevalo as caretaker. Respondent presented a notarized Receipt and Quitclaim dated April 26, 1994, signed by Arevalo, who attested that he was employed by respondent as caretaker and that his stay on the property was a mere privilege granted by respondent. Possession and ownership are two different legal concepts. Just as possession is not a definite proof of ownership, neither is non-possession inconsistent with ownership. Even assuming that petitioners' allegations are true, it bears no legal consequence in the case at hand because the execution of the deeds of conveyances is already deemed equivalent to delivery of the property to respondent, and prior physical delivery or possession is not legally required. 28 Under Article 1498 of the Civil Code, "when the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the object of the contract, if from the deed the contrary does not appear or cannot be inferred." Possession is

also transferred, along with ownership thereof, to respondent by virtue of the notarized deeds of conveyances.29 In sum, the trial court committed grave abuse of discretion in issuing the writ of preliminary injunction, and the Court of Appeals was correct in nullifying the same. The Court, however, finds that it was precipitate for the Court of Appeals to rule that petitioners' action is barred by prescription. As previously stressed, the parties are yet to prove their respective allegations and the trial court is yet to receive the evidence. There is nothing on record that can conclusively support the conclusion that the action is barred by prescription. Hence, the Court of Appeals should not have made such ruling. WHEREFORE, the petition is hereby DENIED for lack of merit. The Decision dated July 16, 1999 rendered by the Court of Appeals in CA-G.R. SP No. 52015 is AFFIRMED, except as to its view on prescription, as discussed in the body of the text. Let the original records of this case be remanded to the Regional Trial Court of Muntinlupa City (Branch 276) with dispatch for further proceedings. SO ORDERED. Puno, (Chairman), Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.