Batch 5 Case Digest in Remedial Law Review

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1.

NM ROTHSCHILD RESPONDENT filed with the RTC MAKATI a complaint against


&SONS LIMITED vs PETITIONER praying for judgment declaring the loan and hedging
LEPANTO contracts between the parties void for being contrary to Art 2018 of the CC
CONSOLIDATED and for damages. Upon respondent’s motion, the trial court authorized
MINING COY respondents counsel to personally bring the summons and complaint to the
Philippine Consulate General in Sydney Australia for the latter office to
Actions in personam/ effect service of summons on petitioner.
quasi in rem/ in rem Petitioner filed a Special Appearance with Motion to Dismiss on ground
among others that the court has not acquired jurisdiction over the person of
the petitioner due to defective and improper service of summons.
Trial court denied the MTD. It held that there was proper service of
summons through the DFA such that the defendant has neither applied
license to do business in the Phils nor filed with the SEC a written power of
attorney designating some person on whom summons and other legal
processes may be served. MR filed but was denied.
In the CA thru Rule 65, the petitioner alleged grave abused of discretion to
the trial court. CA denied holding that the denial of MR is an interlocutory
order not subject of rule 65 that it can only be reviewed by an appeal from
judgment of trial court.
Hence this petition.
Petitioner alleged that the RTC has not acquired jurisdiction over its person
on account of improper service of summons. It was served through the
DFA with respondent’s counsel personally bringing the summons and
complaint to the PHIL CONSULATE GENERAL in SYDNEY
AUSTRALIA.
ISSUE: WON jurisdiction was validly acquired over the person of the
petitioner through service of summons through the DFA.
RULING:
To rule on the issue, it is necessary to determine the nature of the action
involve whether it is an action in personam, in rem or quasi in rem and the
rules on service of summons under Rules of Court.
Rule 14 s15 provides four instances wherein a defendant who is a non-
resident and is not found in the country may be served with summons by
extraterritorial service, to wit: when the action affects the personal status of
the plaintiffs; when the action relates to of the subject of which is property
within the Philippines in which the defendant claims a lien or an interest,
actual or contingent; when the relief demanded in such action consists
wholly or in part, in excluding the defendant from any interest in property
located in the Philippines; and when the defendant non-residents property
has been attached within the Philippines. In the above instances, service of
summons may be effected by ; personal service with leave of court;
publication with leave of court; any other manner the court may deem
sufficient.
Extraterritorial service of summons does not apply in action in personam
but only in in rem and quasi in rem.
When the defendant does not reside and is not found in the Philippines, and
the action is personam, the court cannot try any case against him because of
impossibility of acquiring jurisdiction over his person unless he voluntarily
appears in court.
The court here went on to distinguish the three nature of actions, to wit: an
action in personam is lodged against a person based on personal liability,
an action in rem is directed against the thing itself instead of the person;
while an action quasi in rem names a person as defendant, but its object is
to subject that persons interest in a property to a lien or obligation.
Here, the complaint is an action to declare the loan and hedging contracts
void with prayer for damages. It is a suit in which the plaintiff seeks to be
freed from its obligations to the defendant and to hold the defendant
pecuniary liable for damages. Therefore, an action in personam, unless and
until the plaintiff attaches the property within the Philippines belonging to
the defendant in which case the action will be converted into quasi in rem.
Since the action is in personam and the defendant, petitioner Rothschild
does not reside and is not found in the Philippines, the court cannot try any
case against it because of impossibility of acquiring jurisdiction over its
person unless it voluntary appears in court.
This notwithstanding, the court held that jurisdiction was validly acquired
against the petitioner considering that by seeking affirmative reliefs from
the trial court such as written interrogatories, request for admission,
depositions and motion for production of documents, it is deemed to have
voluntarily submitted to the jurisdiction of said court. A party cannot
invoke the jurisdiction of a court to secure affirmative reliefs against his
opponent and after obtaining or failing to obtain such relief, repudiate or
question such jurisdiction. CA Decision affirmed.

2. FIRST SARMIENTO FACTS First Sarmiento obtained from PBCOM a loan, which was secured
PROPERTY HOLDINGS by a real estate mortgage over parcels of land. Later on, PBCOM resort to
vs PB COM extrajudicial foreclosure of the mortgaged properties for the failure of First
Temporary restraining Sarmiento to pay its loan. Meanwhile, the mortgaged properties were
order auctioned and sold to PBCOM as the highest bidder. First Sarmiento filed a
Complaint for annulment of real estate mortgage and its amendments, with
prayer for the issuance of TRO and preliminary injunction. First Sarmiento
claimed in its Complaint that it never received the loan proceeds from
PBCOM, yet the latter still sought the extrajudicial foreclosure of real
estate mortgage.
In its Opposition, PBCOM asserted that the RTC failed to acquire
jurisdiction over First Sarmiento's Complaint because the action for
annulment of mortgage was a real action that is capable of pecuniary
estimation; thus, the filing fees filed should have been based on the fair
market value of the mortgaged properties.
RTC issued an ex-parte temporary restraining order for 72 hours, enjoining
the registration of the certificate of sale with the Registry of Deeds of
Bulacan. Thereafter, RTC directed the parties to observe the status quo
ante.
Later on, RTC dismissed the Complaint for lack of jurisdiction because
plaintiff failed to pay the appropriate filing fees.
First Sarmiento sought direct recourse to SC with its Petition for Review
under Rule 45. B.
ISSUE/S: WON the order of the RTC, which directed the parties to observe
the status quo ante, effectively extending indefinitely its 72-hour ex-parte
temporary restraining order is proper.
RULING: NO. Rule 58, Section 5 of the Rules of Court provides the
instances when a temporary restraining order may be issued:
Section 5. Preliminary injunction not granted without notice; exception. —
No preliminary injunction shall be granted without hearing and prior notice
to the party or person sought to be enjoined. If it shall appear from facts
shown by affidavits or by the verified application that great or irreparable
injury would result to the applicant before the matter can be heard on
notice, the court to which the application for preliminary injunction was
made, may issue a temporary restraining order to be effective only for a
period of twenty (20) days from service on the party or person sought to be
enjoined, except as herein provided.
Within the said twenty-day period, the court must order said party or
person to show cause, at a specified time and place, why the injunction
should not be granted, determine within the same period whether or not the
preliminary injunction shall be granted, and accordingly issue the
corresponding order.
It is clear that a temporary restraining order may be issued by a trial court
in only two (2) instances: first, when great or irreparable injury would
result to the applicant even before the application for writ of preliminary
injunction can be heard; and second, if the matter is of extreme urgency
and the applicant will suffer grave injustice and irreparable injury. The
executive judge of a multi-sala court or the presiding judge of a single-sala
court may issue a 72-hour temporary restraining order. In both instances,
the temporary restraining order may be issued ex parte. However, in the
first instance, the temporary restraining order has an effectivity of only 20
days to be counted from service to the party sought to be enjoined.
Likewise, within those 20 days, the court shall order the enjoined party to
show why the injunction should not be granted and shall then determine
whether or not the injunction should be granted. In the second instance,
when there is extreme urgency and the applicant will suffer grave injustice
and irreparable injury, the court shall issue a temporary restraining order
effective for only 72 hours upon issuance. Within those 72 hours, the court
shall conduct a summary hearing to determine if the temporary restraining
order shall be extended until the application for writ of preliminary
injunction can be heard.
However, in no case shall the extension exceed 20 days. If the application
for preliminary injunction is denied or not resolved within the given
periods, the temporary restraining order is automatically vacated and the
court has no authority to extend or renew it on the same ground of its
original issuance. G.R. No. 202836 June 19, 2018 C.
RULING: Despite the clear wording of the rules, the Regional Trial Court
issued a status quo ante order indefinitely extending the temporary
restraining order on the registration of the certificate of sale with the
Registry of Deeds. Petitioner applied for a writ of preliminary injunction,
yet the Regional Trial Court did not conduct any hearing for that purpose
and merely directed the parties to observe the status quo ante.
Miriam College Foundation, Inc v. Court of Appeals explained the
difference between preliminary injunction and a restraining order as
follows:
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 perform to refrain from performing a particular act or
acts. As an extraordinary remedy, injunction is calculated to preserve or
maintain the status quo of things and is generally availed of to prevent
actual or threatened acts, until the merits of the case can be heard. A
preliminary injunction persists until it is dissolved or until the termination
of the action without the court issuing a final injunction. The basic purpose
of restraining order, on the other hand, is to preserve the status quo until
the hearing of the application for preliminary injunction. Under the former
A§5, Rule 58 of the Rules of Court, as amended by A§5, Batas Pambansa
Blg. 224, a judge (or justice) may issue a temporary restraining order with
a limited life of twenty days from date of issue. If before the expiration of
the 20-day period the application for preliminary injunction is denied, the
temporary order would thereby be deemed automatically vacated. If no
action is taken by the judge on the application for preliminary injunction
within the said 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.
In the instant case, no such preliminary injunction was issued; hence, the
TRO earlier issued automatically expired under the aforesaid provision of
the Rules of Court. A temporary restraining order cannot be extended
indefinitely to take the place of a writ of preliminary injunction, since a
temporary restraining order is intended only to have a limited lifespan and
is deemed automatically vacated upon the expiration of 72 hours or 20
days, as the case may be.

3. NERWIN INDUSTRIES FACTS:


CORPORATION,
PETITIONER, VS. PNOC- Republic Act No. 8975 expressly prohibits any court, except the Supreme
ENERGYDEVELOPMENT Court, from issuing any temporary restraining order (TRO), preliminary
CORPORATION, AND injunction, or preliminary mandatory injunction to restrain, prohibit or
ESTER R. GUERZON, compel the Government, or any of its subdivisions or officials, or any
CHAIRMAN, BIDSAND person or entity, whether public or private, acting under the Government’s
AWARDS COMMITTEE, direction, from: (a) acquiring, clearing, and developing the right-of-way,
RESPONDENTS. site or location of any National Government project; (b) bidding or
Prohibition against awarding of a contract or project of the National Government; (c)
issuance of injunctive commencing, prosecuting, executing, implementing, or operating any such
writs against government contract or project;(d) terminating or rescinding any such contract or
projects project; and (e) undertaking or authorizing any other lawful activity
necessary for such contract or project. Accordingly, a Regional Trial Court
(RTC) that ignores the statutory prohibition and issues a TRO or a writ of
preliminary injunction or preliminary mandatory injunction against a
government contract or project acts contrary to law.

ANTECEDENT FACTS:

National Electrification Administration (“NEA”) published an invitation to


pre-qualify and to bid for a contract, otherwise known as IPB No. 80.
Thereafter, the qualified bidders submitted their financial bids where
private respondent [Nerwin] emerged as the lowest bidder for all
schedules/components of the contract.

PNOC-Energy Development Corporation purporting to be under the


Department of Energy, issued Requisition No. FGJ 30904R1 or an
invitation to pre-qualify and to bid for wooden poles needed for its Samar
Rural Electrification Project (“O-ILAW project”). Upon learning of the
issuance of Requisition No. FGJ 30904R1 for the O-ILAW Project, Nerwin
filed a civil action in the RTC in Manila, docketed as Civil Case No.
03106921 entitled Nerwin Industries Corporation v.PNOC-Energy
Development Corporation and Ester R. Guerzon, as Chairman, Bids and
Awards Committee ,alleging that Requisition No. FGJ 30904R1 was an
attempt to subject a portion of the items covered by IPB No.80 to another
bidding; and praying that a TRO issue to enjoin respondents’ proposed
bidding for the wooden poles.

Respondents sought the dismissal of Civil Case No. 03106921, stating that
the complaint averred no cause of action, violated the rule that government
infrastructure projects were not to be subjected to TROs, contravened the
mandatory prohibition against non-forum shopping, and the corporate
president had no authority to sign and file the complaint.

RTC granted a TRO in CivilCase No. 03106921. Respondent moved for


reconsideration but the RTC denied respondents’ motion for
reconsideration.

Respondents commenced in the Court of Appeals (CA) a special civil


action for certiorari
(CA-GR SPNo. 83144), alleging that the RTC had thereby committed
grave abuse of discretion amounting to lack or excess of jurisdiction in
holding that Nerwin had been entitled to the issuance of the writ of
preliminary injunction despite the express prohibition from the law and
from the Supreme Court; in issuing the TRO in blatant violation of the
Rules of Court and established jurisprudence; in declaring respondents in
default; and in disqualifying respondents’ counsel from representing them.

The CA granted the petition and annulled and set aside the ruling of the
RTC. Nerwin filed a motion for reconsideration, but the CA denied the
motion. Hence, this present petition.

ISSUE:

Whether or not the CA erred in dismissing the case on the basis of Rep.
Act 8975 prohibiting the issuance of temporary restraining orders and
preliminary injunctions, except if issued by the Supreme Court, on
government projects?

RULING:

The petition fails.

The CA’s decision was absolutely correct. The RTC gravely abused its
discretion, firstly, when it entertained the complaint of Nerwin against
respondents notwithstanding that Nerwin was thereby contravening the
express provisions of Section 3 and Section 4 of Republic Act No. 8975 for
its seeking to enjoin the bidding out by respondents of the O-ILAW
Project; and, secondly, when it issued the TRO and the writ of preliminary
prohibitory injunction.

The text and tenor of the provisions being clear and unambiguous, nothing
was left for the RTC to do except to enforce them and to exact upon
Nerwin obedience to them. The RTC could not have been unaware of the
prohibition under Republic Act No. 8975 considering that the Court had
itself instructed all judges and justices of the lower courts, through
Administrative Circular No. 11-2000, to comply with and respect the
prohibition against the issuance of TROs or writs of preliminary
prohibitory or mandatory injunction involving contracts and projects of the
Government.

The Court notes that the RTC did not properly appreciate the real nature
and true purpose of the injunctive remedy. This failing of the RTC presses
the Court to use this decision to reiterate the norms and parameters long
standing jurisprudence has set to control the issuance of TROs and writs of
injunction, and to now insist on conformity to them by all litigants and
lower courts. Only thereby may the grave misconduct committed in Civil
Case No. 03106921 be avoided

A 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 person, to refrain from a particular act or acts. It is an ancillary
or preventive remedy resorted to by a litigant to protect or preserve his
rights or interests during the pendency of the case. As such, it is issued
only when it is established that:

A. 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; or
B. 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. 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.

An injunction will not issue to protect a right not in esse, or a right which is
merely contingent and may never arise; or to restrain an act which does not
give rise to a cause of action; or to prevent the perpetration of an act
prohibited by statute. Indeed, a right, to be protected by injunction, means a
right clearly founded on or granted by law or is enforceable as a matter of
law.

4. ZUNECA FACTS:
PHARMACEUTICAL,
AKRAM ARAIN AND/OR Respondent is an all-Filipino pharmaceutical company which manufactures
VENUS ARAIN, M.D. and sells a medicine bearing the generic name "CITICOLINE," which is
DBAZUNECA indicated for heart and stroke patients. The said medicine is marketed by
PHARMACEUTICAL, respondent under its registered trademark "ZYNAPSE," which respondent
PETITIONERS, VS. obtained from the Intellectual Property Office (IPO) on September 24,
NATRAPHARM, INC., 2007 under Certificate of Trademark Registration No. 4-2007-005596.With
its registration; the trademark "ZYNAPSE" enjoys protection for a term of
Preliminary Injunction 10 years from September 24, 2007.
vis-à-vis permanent
injunction Allegedly unknown to respondent, since 2003 or even as early as 2001,
petitioners have been selling a medicine imported from Lahore, Pakistan
bearing the generic name "CARBAMAZEPINE," an anti-convulsant
indicated for epilepsy, under the brand name "ZYNAPS," which trademark
is however not registered with the IPO."ZYNAPS" is pronounced exactly
like "ZYNAPSE."

Respondent sent petitioners a cease-and-desist demand letter. Petitioners


refused to heed the above demand, claiming that they had prior use of the
name "ZYNAPS" since year 2003, having been issued by the BFAD a
Certificate of Product Registration (CPR) on April 15, 2003, which
allowed them to sell CARBAMAZEPINE under the brand name
"ZYNAPS."

Respondent filed a complaint against petitioners for trademark


infringement, with prayer for a temporary restraining order (TRO) and/or
writ of preliminary injunction. Respondent also invoked the case of Conrad
and Company, Inc. v. Court of Appeals where it was ruled that an invasion
of a registered mark entitles the holder of a certificate of registration
thereof to injunctive relief. In their answer, petitioners argued that they
enjoyed prior use in good faith of the brand name "ZYNAPS,"

Regional Trial Court (RTC) denied respondent's application for a TRO.


The RTC also denied the application for a writ of preliminary injunction,
reiterating the reasons stated in the order denying the application for a
TRO.

Via a petition for certiorari with an application for a TRO and/or a writ of
preliminary injunction, respondent questioned before the CA the RTC's
denial of the application for a writ of preliminary injunction. CA issued a
Resolution denying respondent's application for TRO and/or preliminary
injunction for lack of merit. However, contrary to its earlier resolutions
denying the application for a TRO/preliminary injunction, the CA, in its
April 18, 2011 Decision, upheld the allegations of respondent that it is
entitled to injunctive relief on the basis of its IPO registration and
permanently enjoined petitioners from the commercial use of "ZYNAPS."

Petitioners' motion for reconsideration was denied by the CA in its


Resolution dated July 21, 2011. Hence, this petition for review.

ISSUE:

Whether the CA may order a permanent injunction in deciding a petition


for certiorari against the denial of an application for a preliminary
injunction issued by the RTC?

HELD:

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. As such, the findings of fact and opinion of a court when
issuing the writ of preliminary injunction are interlocutory in nature and
made even before the trial on the merits is commenced or terminated.

By contrast a permanent injunction, based on Section 9, Rule 58 of the


Rules of Court, forms part of the judgment on the merits and it can only be
properly ordered only on final judgment. A permanent injunction may thus
be granted after a trial or hearing on the merits of the case and a decree
granting or refusing an injunction should not be entered until after a
hearing on the merits where a verified answer containing denials is filed or
where no answer is required, or a rule to show cause is equivalent to an
answer.

As such a preliminary injunction, like any preliminary writ and any


interlocutory order, cannot survive the main case of which it is an incident;
because an ancillary writ of preliminary injunction loses its force and effect
after the decision in the main petition.

Here, this Court is being asked to determine whether the CA erred by


issuing a permanent injunction in a case which questioned the propriety of
the denial of an ancillary writ. But with the RTC's December 2, 2011
Decision on the case for "Injunction, Trademark Infringement, Damages
and Destruction," the issues raised in the instant petition have been
rendered moot and academic. We note that the case brought to the CA on a
petition for certiorari merely involved the RTC's denial of respondent's
application for a writ of preliminary injunction, a mere ancillary writ. Since
a decision on the merits has already been rendered and which includes in
its disposition a permanent injunction, the proper remedy is an appeal36
from the decision in the main case.

5. Mila Caboverde Tantano The controversy arises when Eve and Fe (siblings of petitioner) filed a
Vs Dominalda Espina- complaint praying for the annulment of the Deed of Sale purportedly
Caboverde et al transferring Lots from their parents in petitioner’s favor. During the
pendency of the case, the parties executed a Partial Settlement Agreement
Receivership (PSA) where they fixed the sharing of the uncontroverted properties among
themselves. The PSA also provide that Dominalda shall be entitled to
receive a share of the net income derived from the uncontroverted
properties and that appointed receiver to provide former’s medicine.The
RTC approved the PSA.
However, Dominalda filed with the RTC a Verified Urgent
Application to place the controverted lots under receivership. She claimed
that while she had a legal interest in the controverted properties, she could
not enjoy them, since the income derived was solely appropriated by
petitioner Mila. She alleged that she immediately needs her legal share in
the income of these properties for her daily sustenance and medical
expenses.
The RTC granted the application. As the purpose of the movant,
who is old and sickly, is to procure money from the proceeds of these
properties to spend for medicines and other needs. This circumstance falls
within the purview of Sec. 1(d), that is, "Whenever in other cases it appears
that the appointment of a receiver is the most convenient and feasible
means of preserving, administering, or disposing of the property in
litigation."
The CA ruled that RTC has the discretion to decide whether or not
the appointment of a receiver is necessary. The trial court took into
consideration that the applicant is already an octogenarian who may not
live up to the day when this conflict will be finally settled.

Issue: WON a receiver should be appointed?

Ruling: NO
Receivership is a harsh remedy to be granted with utmost
circumspection and only in extreme situations. The doctrinal
pronouncement in Velasco & Co. v. Gochico & Co is instructive:
The power to appoint a receiver is a delicate one and should be
exercised with extreme caution and only under circumstances requiring
summary relief or where the court is satisfied that there is imminent danger
of loss, lest the injury thereby caused be far greater than the injury sought
to be averted. The court should consider the consequences to all of the
parties and the power should not be exercised when it is likely to produce
irreparable injustice or injury to private rights or the facts demonstrate that
the appointment will injure the interests of others whose rights are entitled
to as much consideration from the court as those of the complainant
Indeed, Sec. 1(d) rule 59 is couched in general terms and broad in
scope, encompassing instances not covered by the other grounds
enumerated under the said section. However, in granting applications for
receivership on the basis of this section, courts must remain mindful of the
basic principle that receivership may be granted only when the
circumstances so demand, and that being a drastic and harsh remedy,
receivership must be granted only when there is a clear showing of
necessity for it in order to save the plaintiff from grave and immediate loss
or damage.
In this case, Dominalda’s alleged need for income to defray her
medical expenses and support is not a valid justification for the
appointment of a receiver. Moreover, placing the disputed properties under
receivership is not necessary to save Dominalda from grave and immediate
loss or irremediable damage. Contrary to her assertions, Dominalda is
assured of receiving income under the PSA approved by the RTC. There is
no clear showing that the disputed properties are in danger of being lost or
materially impaired and that placing them under receivership is most
convenient and feasible means to preserve, administer or dispose of them.
6. Milagros P. Enriquez V Petitioner Enriquez filed a replevin case against Asuten for the recovery of
The Mercantile Insurance the Toyota Hi-Ace van valued at ₱300,000.00. She applied for a bond in
Co., Inc the amount of ₱600,000.00 with respondent Mercantile Insurance in
Replevin Asuten's favor. The Regional Trial Court approved the bond and ordered
the sheriff to recover the van from Asuten and to deliver it to petitioner.
While the van was in petitioner's custody, the Regional Trial Court
dismissed the case without prejudice for failure to prosecute. Thus, it
ordered the sheriff to restore the van to Asuten. When petitioner failed to
produce the van, the Regional Trial Court directed Mercantile Insurance to
pay Asuten the amount of the bond.
Since, petitioner failed to remit the amount paid to Asuten,
Mercantile Insurance filed a collection suit against Enriquez.

Issue: WON petitioner should be made liable for the full amount of the
bond paid by respondent as surety, in relation to a previous case for
replevin filed by petitioner.

Ruling: YES
Replevin is an action for the recovery of personal property. It is
both a principal remedy and a provisional relief. When utilized as a
principal remedy, the objective is to recover possession of personal
property that may have been wrongfully detained by another. When sought
as a provisional relief, it allows a plaintiff to retain the contested property
during the pendency of the action.
As a provisional remedy, a party may apply for an order for the
delivery of the property before the commencement of the action or at any
time before an answer is filed. Rule 60, Section 2 requires that the party
seeking the issuance of the writ must first file the required affidavit and a
bond in an amount that is double the value of the property.
Of all the provisional remedies provided in the Rules of Court, only
Rule 60, Section 2 requires that the amount of the bond be double the value
of the property. The other provisional remedies provide that the amount be
fixed by court or be merely equal to the value of the property. The rationale
to the requirement that the bond for a writ of seizure in a replevin be
double the value of the property. The bond functions not only to indemnify
the defendant in case the property is lost, but also to answer for any
damages that may be awarded by the court if the judgment is rendered in
defendant's favor.
Forfeiture of the replevin bond requires first, a judgment on the
merits in the defendant's favor, and second, an application by the defendant
for damages
In this case, there was no trial on the merits. The Regional Trial
Court's dismissal for failure to prosecute was a dismissal without prejudice
to re-filing. Thus, upon the dismissal of the case, it was imperative for
petitioner to return the van to Asuten. When petitioner failed to produce the
van, equity demanded that Asuten be awarded only an amount equal to the
value of the van. The RTC would have erred in ordering the forfeiture of
the entire bond in Asuten's favor, considering that there was no trial on the
merits or an application by Asuten for damages. This judgment could have
been reversed had petitioner appealed the Regional Trial Court's Order in
the Civil Case. Unfortunately, she did not. Respondent was, thus,
constrained to follow the Regional Trial Court's directive to pay Asuten the
full amount of the bond.
It is clear from the antecedents that any losses which petitioner has
suffered were due to the consequences of her actions, or more accurately,
her inactions.1âwThe Regional Trial Court forfeited the replevin bond
which she had filed because she refused to return the property. She is now
made liable for the replevin bond because she failed to appeal its forfeiture.

7. Lim-Lua vs. Lua (2013); Facts:


Villarama, Jr., J:
Susan filed an action for the declaration of nullity of her marriage with
Support pendente lite Danilo before the RTC. In her prayer for support pendente lite for herself
and her two children, she sought the amount of P500,000 as monthly
support. The RTC reduced the amount to 250,000 and the CA further
reduced it to P115,000. In a Compliance, Danilo attached a copy of a check
he issued to Susan. He explained that he deducted from the amount of
support in arrears the advances given by him to his children and Susan.

Susan filed a Motion for Issuance of a Writ of Execution and she asserted
that none of the expenses deducted by Danilo may be chargeable as part of
the monthly support contemplated by the CA Decision. The RTC granted
Susan’s motion. Danilo filed a MR and a motion for inhibition of Judge
Yrastorza, Sr which the latter both denied.

Danilo still failed and refused to pay the support in arrears pendente lite;
hence, Susan filed in the CA a Petition for Contempt of Court with
Damages. Danilo filed a Petition for Certioari under Rule 65. The two
cases were consolidated.

The CA dismissed Susan’s petition and granted Danilo’s. Susan filed a MR


but it was denied. Hence, this petition.

Issue: WON certain expenses already incurred by Danilo may be


deducted from the total support in arrears owing to Susan and her
children

Ruling:

Upon receipt of a verified petition for declaration of absolute nullity of


void marriage or for annulment of voidable marriage, or for legal
separation, and at any time during the proceeding, the court, motu proprio
or upon verified application of any of the parties, guardian or designated
custodian, may temporarily grant support pendente lite prior to the
rendition of judgment or final order.
The monthly support pendente lite granted by the trial court was intended
primarily for food, household expenses such as salaries of drivers and
house helpers, and also petitioner’s scoliosis therapy sessions. Hence, the
value of two expensive cars bought by respondent for his children plus
their maintenance cost, travel expenses of petitioner and Angelli, purchases
through credit card of items other than groceries and dry goods (clothing)
should have been disallowed, as these bear no relation to the judgment
awarding support pendente lite.

The CA should not have allowed all the expenses incurred by Danilo to be
credited against the accrued support pendente lite. Any amount Danilo
seeks to be credited as monthly support should only cover those incurred
fir sustenance and household expenses. Accordingly, only the following
expenses of respondent may be allowed as deductions from the support
pendente lite: Medical expenses for Susan, Dental Expenses, credit card
purchases of the children.

The amount of support may be reduced or increased proportionately


according to the reduction or increase of the necessities of the recipient and
the resources or means of the other person obliged to support. As held in
Advincula vs. Advincula, judgment for support does not become final. The
right to support is of such nature that its allowance is essentially
provisional; for during the entire period that a needy party is entitled to
support, his or her alimony may be modified or altered, in accordance with
his increased or decreased needs, and with the means of the giver. It cannot
be regarded as subject to final determination.

Petition is partly granted.


8. Filipinas Eslon Facts:
Manufacturing Corp. vs.
Heirs of Basilio Llanes FEMCO filed a complaint against respondents before the RTC for quieting
(2019); Caguioa, J.: of title and damages on Sept. 1, 1995. It asserted that it is the registered
owner of a parcel of land situated in Sta. Felomina, Iligan and that it has
Quieting of title constructed thereon its manufacturing plant for eslon pipes and accessories.
It was also alleged that respondents continue to pester and annoy FEMCO
by claiming that a portion of FEMCO’s land has encroached on their titled
land, which they know is false since respondent’s titles are fake.

Respondents counterargued that their titles are valid and effective by virtue
of the decision of the CFI Lanao del Norte in 1968. They insisted that
FEMCO is illegally occupying a portion of their lot.

The RTC issued a decision in favor of FEMCO and declared respondent’s


title as null and void ab initio. It further declared all TCTs derived from
respondent’s title to be likewise invalid and ineffective. Aggrieved,
respondents filed their Notices of Appeal. However, they failed to file their
Appellant’s Brief. Thus, the CA dismissed their appeal and subsequently
issued an Entry of Judgment.

The CA granted the appeal of respondents for the following reasons: 1) the
complaint of FEMCo is actually an indirect action for annulment of title
and must be dismissed in accordance with the doctrine that a cert of title
cannot be subject to a collateral attack; and 2) an action for quieting of title
is not the appropriate remedy where the action would require the
modification or interference with the judgment or order of another coequal
court. Hence, this petition.

Issue: WON FEMCO’s complaint for quieting of title is a prohibited


collateral attack on a certificate of title

Ruling: No.

Jurisprudence explains that an action or proceeding is deemed an attack on


a title when its objective is to nullify the title, thereby challenging the
judgment pursuant to which the title was decreed. The attack is direct when
the objective is to annul or set aside such judgment, or enjoin its
enforcement. On the other hand, the attack is indirect or collateral when, in
an action to obtain a different relief, an attack on the judgment is
nevertheless made as an incident thereof.

An action to quiet title or to remove the clouds over a title is a special civil
action governed by the Rule 63, Sec. 1, Par. 2. Specifically, an action for
quieting of title is essentially a common law remedy grounded on equity.

For an action to quiet title to prosper, two indispensable requisites must


concur, namely: 1) the plaintiff or complainant has a legal or an equitable
title to or interest in the real property subject of the action; and 2) the deed,
claim, encumbrance, or proceeding claimed to be casting cloud on his title
must be shown to be in fact valid or inoperative despite its prima facie
appearance of validity or legal efficacy. In the instant case, FEMCO
sufficiently proved these two requisites for quieting of title.

Hence, raising the invalidity of a certificate of title in an action for quieting


of title is not a collateral attack because it is central, imperative, and
essential in such an action that the complainant shows the invalidity of the
deed which casts cloud on his title. This is manifestly a direct attack.
Therefore, based on the foregoing, the CA was mistaken in deeming
FEMCO’s Complaint a prohibited collateral attack.

Petition is granted and RTC’s decision is reinstated.


9. Rosello-Bentir and Facts:
Spouses Pormida vs. and
Leyte Gulf Traders, Inc. Respondent corporation (Leyte Gulf Traders, Inc.) filed a complaint for
(2000); Kapuna, J.: reformation of instrument, specific performance, annulment of conditional
sale and damages with prayer for writ of injunction against petitioners.
Reformation of Respondent alleged in its complaint that it entered into a contract of lease
instrument of a parcel of land with Bentir for a period of twenty years starting May 5,
1969. Then, the lease was extended for another four years. On May 5,
1989, Bentir sold the leased premises to Spouses Pormida. Respondent
now questions the sale alleging that it had a right of first refusal. It seeks
reformation of the expired contract of lease on the ground that its lawyer
inadvertently omitted to incorporate in the contract executed in 1968, the
verbal agreement between the parties that in the event Bentir sells or leases
the lot after the expiration of the lease, respondent has the right to equal the
highest offer.

Petitioners counterargued that that respondent is guilty of laches for not


bringing the case for reformation of the lease contract within the
prescriptive peiord of 10 years from its execution.

RTC Tacloban City Branch 7 dismissed the complaint premised on its


finding that the action for reformation had already prescribed. Respondent
filed a MR and subsequently an urgent ex parte motion for issuance of an
order directing the petitioners to refrain from taking possession of the land
in question. The case was re-raffled to RTC Branch 8. Branch 8 reversed
Branch 7’s decision on the grounds that the action for reformation had not
yet prescribed and the dismissal was “premature and precipitate.”

Aggrieved, petitioners filed a petition for certiorari to the CA. The CA


denied the petition and affirmed the questioned order. A reconsideration of
said decision was likewise denied. Hence, this petition.

Issue: WON the complaint for reformation has prescribed

Ruling: Yes.

The remedy of reformation of an instrument is grounded on the principle of


equity where, in order to express the true intention of the contracting
parties, an instrument already executed is allowed by law to be reformed.

The prescriptive period for actions based upon a written contract and for
reformation of an instrument is ten (10) years under Article 1144 of the
Civil Code. In the case at bar, respondent had ten years from 1968, the time
when the contract of lease was executed, to file an action for reformation.
However, it did so only on May 15, 1992 or 24 years after the cause of
action accrued. Hence, its cause of action has become stale and time-
barred.

In addition, respondent’s action will still not prosper. Under Rule 64, Sec.
1 of ROC, an action for the reformation of an instrument is instituted as a
special civil action for declaratory relief is to secure an authoritative
statement of the rights and obligations of the parties for their guidance in
the enforcement thereof, or compliance therewith, and not to settle issues
arising from an alleged breach thereof, it may be entertained only before
the breach or violation of the law or contract to which it refers. In the case
at bar, respondent brought the present action for reformation after an
alleged breach or violation of the contract was already committed by
Bentir. Consequently, the remedy of reformation no longer lies.
10. LATOJA vs LIM      FACTS:
On May 21, 1997, respondent Teresita Cabe, together with Donato A.
Cardona II (Cardona II), executed a Deed of Sale with Pacto de Retro over
a parcel of land registered under the “Heirs of Donato Cardona represented
Consolidation of by Jovita T. Cardona.”
ownership For failure of Cardona II to repurchase the property from her within one
year as agreed upon in the deed, Cabe filed a Petition for Consolidation of
Ownership pursuant to Article 1607 of the Civil Code to the RTC. The
petition was granted. Cardona II questioned the trial court’s decision by
filing with the Court of Appeals a petition for certiorari which was
dismissed by the CA.
Cardona II also appealed to the Supreme Court which was also denied.
Thereafter, respondent Cabe filed a motion for execution of the RTC
decision in the consolidation case which was granted. Cabe prayed for the
issuance of a Writ of Possession which was granted by Judge Lim of RTC
Branch 2.
Petitioners allege grave abuse of discretion on the part of Judge Lim,
contending that Judge Lim wrongly granted the motion for the issuance of
a Writ ofPossession to Cabe. They allege that in 2006, this same Judge Lim
rendered a Judgment by Compromise in an Action for Partition of Real
Properties.
This action was filed by Spouses Latoja against Spouses Cardona, who are
the parents of Cardona II, respondent in the consolidation case Among the
properties included in the partition case was OCT No. 41, the same
property subject of the consolidation case. The Judgment by Compromise
awarded OCT No. 41 on a 50/50 pro indiviso ownership to Spouses Latoja
and Spouses Cardona pursuant to their Compromise Agreement. Spouses
Latoja contend that Judge Lim, wrongly granted the motion for the
issuance of a Writ of Possession to Cabe despite the Judgment by
Compromise he had previously rendered in the partition case. Judge Lim
was then the presiding judge of RTC-Br. 1, Borongan, Eastern Samar when
he awarded half of the same property to petitioners.
Alleging that they are in possession of a portion of the subject property,
petitioners also prayed for the issuance of a TRO to enjoin the
implementation of the assailed Order in view of the issuance of the Notice
to Vacate issued by the court sheriff. SC granted the TRO prayed for.
Cabe contends that the Decision in the consolidation case had become final
after the SC dismissed the appeal of Cardona II and before the Judgment by
Compromise was rendered in 2006. Therefore, Judge Lim was simply
guided by the rule on the finality of judgment when he issued the assailed
Order. Cabe asserts that she is therefore entitled to the writ of possession
prayed for
ISSUE: Whether Judge committed a grave abuse of discretion by Granting
the Motion for Issuance of Writ of Possession - YES
HELD: Jurisprudence provides only these four instances when a writ of
possession may issue: (1) land registration proceedings; (2) extrajudicial
foreclosure of mortgage of real property; (3) judicial foreclosure of
property, provided that the mortgagor has possession, and no third party
has intervened; and (4) execution sales.
The consolidation of title prescribed in Article 1607 of the Civil Code is
merely for the purpose of registering and consolidating title to the property
in case of a vendor a retro’s failure to redeem. Judge Lim overlooked the
nature of the Pacto de Retro sale entered into by Cabe and Cardona II.
It is basic that in a pacto de retro sale, the title and ownership of the
property sold are immediately vested in the vendee a retro. As a result, the
vendee a retro has a right to the immediate possession of the property sold,
unless otherwise agreed upon. Therefore, the right of respondent Cabe to
possess the subject property must be founded on the terms of the Pacto de
Retro Sale itself, and not on the decision in the consolidation case.

11. GALINDO v. COA ANNALIZA J. GALINDO v. COA, GR No. 210788, 2017-01-10


ANNALIZA J. GALINDO,
et al, Petitioners, - versus- Facts:
COMMISSION ON On 2 June 2008, then MWSS Administrator Diosdado Jose M. Allado
AUDIT, Respondent.  wrote a letter to then COA Chairman Reynaldo A. Villar (Chairman Villar)
about unrecorded checks relating to Mendoza's cash advances which were
Subject matter of review allegedly used to pay claims for bonuses and other benefits of persons
assigned at the COA Auditing Unit of the MWSS (COA-MWSS).
Chairman Villar issued Office Order No. 2009-528, dated 21 July 2009,
and constituted a team from the COA's Fraud Audit and Investigation
Office - Legal Services Sector (FAIO-LSS) for a fact-finding investigation
In 2005 and 2006, COA-MWSS personnel received cash amounting to
P9,182,038.00; and in 2007, P38,551,133.40 from the CAs drawn by Ms.
Mendoza in payments of allowances and bonuses
In previous years (1999 to 2003), a total amount of P1,171,855.00
representing bonuses and other benefits was also received by COA-MWSS
personnel from the MWSS;.
Atty. Cabibihan and 10 of his staff availed of the Car Assistance Plan
(CAP) of the [MEWF] under which they paid only 40% of the purchase
price of the vehicle by way of loan from and payable to the MEWF in the
total amount of P2,878,669.36, while the balance of 60% was paid by
MEWF, hence, constituting fringe benefits in the total amount of
P4,318,004.03
On 30 July 2010, Chairman Villar issued Letter Charges for Grave
Misconduct and Violation of Reasonable Office Rules and Regulations to
petitioners Galindo and Pinto, along with other COA-MWSS personnel
COA-MWSS personnel received the benefits through various Board
Resolutions and in the form of one-time CAs under which they (COA-
MWSS personnel) were purposely not identified in the payroll as
claimants. The alleged agreement was also to the effect that the liquidation
of the CAs and the necessary recording thereof in the books of MWSS
would be taken care[d] of by COA-MWSS.
Administrator Allado, also in explanation of the unrecorded checks, stated
that prior to and until October 2006, the moneys encashed from her CAs
were directly given to COA-MWSS personnel as evidenced by
Acknowledgment Receipts (ARs) thereof which she kept, bearing the
signatures of the concerned COA-MWSS personnel who actually received
the entire proceeds of the encashed checks. However, moneys for
subsequent claims (after October 2006) were handed to Ms. Yabut, who
was then already the Officer-in-Charge, Internal Audit Division of MWSS.
For these receipts, Ms. Mendoza would still prepare ARs but these were
not anymore signed by the COA-MWSS personnel.
Under the Implementing Guidelines (IG) of the CAP-MEWF, the availees
are entitled to a maximum amount of loan which varies depending on their
salary grades and on the Plans (Plans A, B, C and D) that they would avail
of. In line with the payment scheme under Board Resolution No. 2006-267,
only 40% thereof shall be paid by them in equal monthly amortization over
a maximum period of four (4) years. As a condition sine qua non only bona
fide members of the MEWF were eligible to avail of the CAP.
In the case of COA-MWSS personnel, the Prosecution presented Official
Receipts (ORs) evidencing their payments of capital contributions to the
MEWF, thereby establishing their membership to the MEWF
The other respondents also denied this allegation [of taking and
appropriating public funds of the MWSS].
The COA found that the allegations against petitioners Galindo and Pinto
are supported by substantial evidence, and found them guilty of Grave
Misconduct and Violation of Reasonable Office Rules and Regulations.
Galindo and Pinto filed, through their new counsel Walden James G.
Carbonell, the present petition on 30 January 2014
Issues:
WON the petitioner availed the proper remedy.
Principles:
In administrative disciplinary cases decided by the COA, the proper
remedy in case of an adverse decision is an appeal to the Civil Service
Commission and not a petition for certiorari before this Court under Rule
64]
SUBJECT MATTER REVIEW:
Rule 64 governs the review of judgments and final orders or resolutions of
the Commission on Audit and the Commission on Elections. It refers to
Rule 65 for the mode of review of the judgment or final order or resolution
of the Commission on Audit and the Commission on Elections.
A petition filed under Rule 65 requires that the "tribunal, board, or officer
exercising judicial or quasi-judicial functions has acted without or in
excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, nor any
plain, speedy, and adequate remedy in the ordinary course of law x x x.
Section 7, Article IX-A of the Constitution provides that "[u]nless
otherwise provided by this Constitution, or by law, any decision, order, or
ruling of each Commission may be brought to the Supreme Court on
certiorari by the aggrieved party within thirty days from receipt of a copy
thereof.
Administrative Code of 1987 also gave the Civil Service Commission the
power to "[p]rescribe, amend and enforce regulations and rules for carrying
into effect the provisions of the Civil Service Law and other pertinent
laws."
Galindo and Pinto also failed to allege and show that the COA acted
without or in excess of its jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction
Assuming arguendo that Galindo and Pinto availed of certiorari under Rule
64 as the proper remedy, the present petition was filed beyond the
reglementary period for filing
Even if the present petition properly raised this Court's certiorari
jurisdiction and was filed within the reglementary period, we find no grave
abuse of discretion in the decision of the COA.

12. IN RE: PETITION FOR Facts:


ASSISTANCE IN In 1986, a special examination of RBBI was conducted by the Supervision
LIQUIDATION OF and Examination Sector (SES) Department III of what is now the Bangko
RURAL BANK OF Sentral ng Pilipinas (BSP),[4] wherein various loan irregularities were
BOKOD v. BIR, GR NO. uncovered.
158261, 2006-12-18 In view of the irregularities noted and the insolvent condition of RBBI, the
members of the RBBI Board of Directors were called for a conference at
Original action for the BSP
certiorari Only one RBBI Director, a certain
Mr. Wakit, attended the conference, and the examination findings and
related recommendations were discussed with him
In a letter,... the SES Department III warned the RBBI Board of Directors
that, unless... substantial remedial measures are taken to rehabilitate the
bank, it will recommend that the bank be placed under receivership.
reiterated its warning that it would recommend the closure of the bank,
unless the needed fresh capital was immediately infused.
Despite these notices, the SES Department III received no word from
RBBI
In a meeting held on 9 January 1987, the Monetary Board of the BSP
decided to take the following action
[T]he Board decided as follows:... a. To forbid the bank to do business in
the Philippines and place its assets and affairs under receivership in
accordance with Section 29 of R.A. No. 265, as amended.
b. To designate the Special Assistant to the Governor and Head, SES
Department III, as Receiver of the bank;... c. To refer the cases of
irregularities/frauds to the Office of Special Investigation for further
investigation and possible filing of appropriate charges against the
following present/former officers and employees of the bank:... x x x x... d.
To include the names of the above-mentioned present and former officers
and employees of the bank in the list of persons barred from employment
in any financial institution under the supervision of the Central Bank
without prior clearance from the Central Bank.[6]
A memorandum and report... were submitted by the Director of the SES
Department III concluding that the RBBI remained in insolvent financial
condition and it can no longer safely resume business with the depositors,
creditors, and the general public.
the Monetary Board... ordered the liquidation of the bank and designated
the Director of the SES Department III as liquidator.[7]
On 10 April 1991, the designated BSP liquidator of RBBI caused the filing
with the RTC of a Petition for Assistance in the Liquidation of RBBI
Subsequently,... the Monetary Board transferred to herein... petitioner
Philippine Deposit Insurance Corporation (PDIC) the
receivership/liquidation of RBBI
PDIC then filed... a Motion for Approval of Project of Distribution[10] of
the assets of RBBI, in accordance with Section 31, in relation to Section
30, of Republic Act No. 7653... the respondent Bureau of Internal Revenue
(BIR), through Atty. Justo Reginaldo, manifested that PDIC should secure
a tax clearance certificate from the appropriate BIR Regional Office...
before it could proceed with the dissolution of RBBI.
ending compliance therewith, the RTC held in abeyance the Motion for
Approval of Project of Distribution.
Petitioner in their motion state that Section 52-C of Republic Act 8424
does not cover closed banking institutions like the Rural Bank of Bokod as
the law that covers liquidation of closed banks is Section 30 of Republic
Act No. 7653 otherwise known as the new Central Bank
Law.
Commenting on the motion for reconsideration the Bureau of Internal
Revenue states that the only logic why the Bureau is requesting for a tax
clearance is to determine how much taxes, if there be any, is due the
government.
The court believes and so holds that petitioner should still secure the
necessary tax clearance in order for it to be cleared of all its tax liabilities
as regardless of what law covers the liquidation of closed banks, still these
banks are subject to payment of taxes mandated... by law. Also in its
motion for approval of the project of distribution... here are unremitted
withholding taxes in the amount of P8,767.32.
DIC filed the present Petition for Review on Certiorari, under Rule 45...
alleging that
THE COURT A QUO ERRED IN APPLYING THE PROVISION OF
SECTION 52-C OF REPUBLIC ACT NO. 8424 DIRECTING THE
SUBMISSION OF TAX CLEARANCE FOR CORPORATIONS
CONTEMPLATING DISSOLUTION ON A BANK ORDERED CLOSED
AND PLACED UNDER RECEIVERSHIP AND, THEREAFTER,
UNDER LIQUIDATION, BY
THE MONETARY BOARD PURSUANT TO SECTION 30 OF
REPUBLIC ACT NO. 7653.
PDIC argues that the closure of banks under Section 30 of the New Central
Bank Act is summary in nature and procurement of tax clearance as
required under Section 52(C) of the Tax Code of 1997 is not a condition
precedent thereto; that under Section 30, in relation to Section
31, of the New Central Bank Act, asset distribution of a closed bank
requires only the approval of the liquidation court;
In its Comment, the BIR countered with the following arguments: that the
present Petition for Review on Certiorari under Rule 45 of the revised
Rules of Court is not the proper remedy to question the Order, dated 17
January 2003, of the RTC because said order is... interlocutory and cannot
be the subject of an appeal; that Section 52(C) of the Tax Code of 1997
applies to all corporations, including banks ordered closed by the Monetary
Board pursuant to Section 30 of the New Central Bank Act; that the RTC
may order the PDIC to obtain a tax... clearance before proceeding to rule
on the Motion for Approval of Project of Distribution of the assets of RBBI
Issues:
whether the Petition for Review on Certiorari under Rule 45 of the...
revised Rules of Court is the proper remedy from the assailed Orders of the
RTC.
whether a bank ordered closed and placed under receivership by the
Monetary Board of the BSP still needs to secure a tax clearance
certificate... from the BIR before the liquidation court approves the project
of distribution of the assets of the bank.
Ruling:
this Court, in perusing the assailed RTC Orders, dated 17 January 2003 and
13 May 2003, reaches the conclusion that these are merely interlocutory in
nature and are not the proper subjects of an appeal by certiorari under Rule
45 of the revised Rules of Court.
This Court has repeatedly and uniformly held that a judgment or order may
be appealed only when it is final, meaning that it completely disposes of
the case and definitively adjudicates the respective rights of the parties,
leaving thereafter no substantial proceeding to be had... in connection with
the case except the proper execution of the judgment or order.
The afore-quoted Tax Code provision and regulations refer to a voluntary
dissolution and/or liquidation of a corporation through its adoption of a
resolution or plan to that effect, or an involuntary dissolution of a
corporation by order of the SEC. They make no reference at all... to a
situation similar to the one at bar in which a banking corporation is ordered
closed and placed under receivership by the BSP and its assets judicially
liquidated.
This Court rules in the negative.
RBBI was placed under receivership and ordered liquidated by the BSP,
not the SEC; and the SEC is not even a party in the said case, although the
BIR is
The liquidation of RBBI is undertaken according to Sections 30 of the New
Central Bank Act, viz
Sec. 30. Proceedings in Receivership and Liquidation. - Whenever, upon
report of the head of the supervising or examining department, the
Monetary Board finds that a bank or quasi-bank:
(a) is unable to pay its liabilities as they become due in the ordinary course
of business: Provided, That this shall not include inability to pay caused by
extraordinary demands induced by financial panic in the banking
community;
(b) has insufficient realizable assets, as determined by the Bangko Sentral,
to meet its liabilities; or
(c) cannot continue in business without involving probable losses to its
depositors or creditors; or
(d) has wilfully violated a cease and desist order under Section 37 that has
become final, involving acts or transactions which amount to fraud or a
dissipation of the assets of the institution; in which cases, the Monetary
Board may summarily and without need for prior hearing... forbid the
institution from doing business in the Philippines and designate the
Philippine Deposit Insurance Corporation as receiver of the banking
institution.
First, Section 52(C) of the Tax Code of 1997 and the BIR-SEC Regulations
No. 1 regulate the relations only as between the SEC and the BIR, making
a certificate of tax clearance a prior requirement before the SEC could
approve the dissolution of a corporation
Section 30 of the New Central Bank Act lays down the proceedings for
receivership and liquidation of a bank. The said provision is silent as
regards the securing of a tax clearance from the BIR. The omission,
nonetheless, cannot compel this Court to apply by analogy the tax...
clearance requirement of the SEC, as stated in Section 52(C) of the Tax
Code of 1997 and BIR-SEC Regulations No. 1, since, again, the dissolution
of a corporation by the SEC is a totally different proceeding from the
receivership and liquidation of a bank by the BSP. This Court... cannot
simply replace any reference by Section 52(C) of the Tax Code of 1997
and the provisions of the BIR-SEC Regulations No. 1 to the "SEC" with
the "BSP." To do so would be to read into the law and the regulations
something that is simply not there, and would be tantamount to... judicial
legislation.
To our mind, what the BIR should have requested from the RTC, and what
was within the discretion of the RTC to grant, is not an order for PDIC, as
liquidator of RBBI, to secure a tax clearance; but, rather, for it to submit
the final return of RBBI.
The unreasonableness and impossibility of requiring a tax clearance before
the approval by the RTC of the Project of Distribution of the assets of the
RBBI becomes apparent when the timeline of the proceedings is
considered.
The BIR can only issue a certificate of tax clearance when the taxpayer had
completely paid off his tax liabilities. The certificate of tax clearance attests
that the taxpayer no longer has any outstanding tax obligations to the
Government.
Should the BIR find that RBBI still had outstanding tax liabilities, PDIC
will not be able to pay the same because the Project of Distribution of the
assets of RBBI remains unapproved by the RTC; and, if RBBI still had
outstanding tax liabilities, the BIR will not issue a tax... clearance; but,
without the tax clearance, the Project of Distribution of assets, which
allocates the payment for the tax liabilities, will not be approved by the
RTC. It will be a chicken-and-egg dilemma.
Principles:
The receiver shall immediately gather and take charge of all the assets and
liabilities of the institution, administer the same for the benefit of its
creditors, and exercise the general powers of a receiver under the Revised
Rules of Court but shall not, with the exception of... administrative
expenditures, pay or commit any act that will involve the transfer or
disposition of any asset of the institution: Provided, That the receiver may
deposit or place the funds of the institution in non-speculative investments.
The receiver shall determine as soon as... possible, but not later than ninety
(90) days from take over, whether the institution may be rehabilitated or
otherwise placed in such a condition that it may be permitted to resume
business with safety to its depositors and creditors and the general public:
Provided, That any determination for the resumption of business of the
institution shall be subject to prior approval of the Monetary Board.
The actions of the Monetary Board taken under this section or under
Section 29 of this Act shall be final and executory, and may not be
restrained or set aside by the court except on petition for certiorari on the
ground that the action taken was in excess of jurisdiction or... with such
grave abuse of discretion as to amount to lack or excess of jurisdiction. The
petition for certiorari may only be filed by the stockholders of record
representing the majority of the capital stock within ten (10) days from
receipt by the board of directors of the... institution of the order directing
receivership, liquidation or conservatorship.
here are substantial differences in the procedure for involuntary dissolution
and liquidation of a corporation under the Corporation Code, and that of a
banking corporation under the New Central Bank Act, so that the
requirements in one cannot simply be... imposed in the other.
Under the Corporation Code, the SEC may dissolve a corporation, upon the
filing of a verified complaint and after proper notice and hearing, on
grounds provided by existing laws, rules, and regulations.[24] Upon...
receipt by the corporation of the order of suspension from the SEC, it is
required to notify and submit a copy of the said order, together with its
final tax return, to the BIR. The SEC is also required to furnish the BIR a
copy of its order of suspension. The BIR... is supposed to issue a tax
clearance to the corporation within 30 days from receipt of the foregoing
documentary requirements. The SEC shall issue the final order of
dissolution only after the corporation has submitted its tax clearance; or in
case of... involuntary dissolution, the SEC may proceed with the
dissolution after 30 days from receipt by the BIR of the documentary
requirements without a tax clearance having been issued.[25] The
corporation is allowed to continue as a body corporate for... three years
after its dissolution, for the purpose of prosecuting and defending suits by
or against it, to settle and close its affairs, and to dispose of and convey its
property and distribute its assets, but not for the purpose of continuing its
business. The... corporation may undertake its own liquidation, or at any
time during the said three years, it may convey all of its property to trustees
for the benefit of its stockholders, members, creditors, and other persons in
interest.[26]
In contrast, the Monetary Board may summarily and without need for prior
hearing, forbid the banking corporation from doing business in the
Philippines, for causes enumerated in Section 30 of the New Central Bank
Act; and appoint the PDIC... as receiver of the bank. PDIC shall
immediately gather and take charge of all the assets and liabilities of the
closed bank and administer the same for the benefit of its creditors. The
summary nature of the procedure for the involuntary closure of a bank is...
especially stressed in Section 30 of the New Central Bank Act, which
explicitly states that the actions of the Monetary Board under the said
Section or Section 29 shall be final and executory, and may not be
restrained or set aside by the court except on a Petition for
Certiorari filed by the stockholders of record of the bank representing a
majority of the capital stock. PDIC, as the appointed receiver, shall file ex
parte with the proper RTC, and without requirement of prior notice or any
other action, a... petition for assistance in the liquidation of the bank. The
bank is not given the option to undertake its own liquidation.
[A] liquidation proceeding resembles the proceeding for the settlement of
estate of deceased persons under Rules 73 to 91 of the Rules of Court. The
two have a common purpose: the determination of all the assets and the
payment of all the debts and liabilities of the... insolvent corporation or the
estate. The Liquidator and the administrator or executor are both charged
with the assets for the benefit of the claimants. In both instances, the
liability of the corporation and the estate is not disputed. The court's
concern is with the... declaration of creditors and their rights and the
determination of their order of payment... x x x x
A liquidation proceeding is a single proceeding which consists of a number
of cases properly classified as "claims." It is basically a two-phased
proceeding. The first phase is concerned with the approval and disapproval
of claims. Upon the approval of the petition... seeking the assistance of the
proper court in the liquidation of a closed entity, all money claims against
the bank are required to be filed with the liquidation court. This phase may
end with the declaration by the liquidation court that the claim is not proper
or without... basis. On the other hand, it may also end with the liquidation
court allowing the claim. In the latter case, the claim shall be classified
whether it is ordinary or preferred, and thereafter included Liquidator. In
either case, the order allowing or disallowing a particular... claim is final
order, and may be appealed by the party aggrieved thereby.
The second phase involves the approval by the Court of the distribution
plan prepared by the duly appointed liquidator. The distribution plan
specifies in detail the total amount available for distribution to creditors
whose claim were earlier allowed. The Order... finally disposes of the issue
of how much property is available for disposal. Moreover, it ushers in the
final phase of the liquidation proceeding - payment of all allowed claims in
accordance with the order of legal priority and the approved distribution
plan.
xxxx
A liquidation proceeding is commenced by the filing of a single petition by
the Solicitor General with a court of competent jurisdiction entitled,
"Petition for Assistance in the Liquidation of e.g., Pacific Banking
Corporation." All claims against the insolvent are... required to be filed
with the liquidation court. Although the claims are litigated in the same
proceeding, the treatment is individual. Each claim is heard separately. And
the Order issued relative to a particular claim applies only to said claim,
leaving the other... claims unaffected, as each claim is considered separate
and distinct from the others. x x x [Emphases supplied.]
Irrefragably, liquidation proceedings cannot be summary in nature. It
requires the holding of hearings and presentation of evidence of the parties
concerned, i.e., creditors who must prove and substantiate their claims, and
the liquidator disputing the same. It also... allows for multiple appeals, so
that each creditor may appeal a final order rendered against its claim.
Hence, liquidation proceedings may very well be highly-contested and
drawn-out, because, at the end of it all, all claims against the corporation
undergoing litigation must be... settled definitively and its assets properly
disposed off.

13. Guerrero vs. Hon. Lorna FACTS:


Domingo et al This is a petition for Review on Certiorari assailing the Order of the
Regional Trial Court of Las Pinas dated November 18, 2002. Said order
Prohibition denied the petition for Prohibition against the proceedings in Civil Case no.
6293, an unlawful detainer case, which was filed in the Metropolitan Trial
Court(MeTC) of Las Pinas City.

On June 2, 1997, private respondent Pilar Development Corporation(PDC)


and petitioners spouses Alvin and Mercury Guerrero entered into a
Contract to Sell whereby PDC agreed to sell the spouses Guerrero the
property covered by Transfer Certificate of Title (TCT) No. T-51529 and
the house standing thereon. The total consideration for the sale is 2,
374,000.00 with a down payment of 594,000.00 and a balance of
1,780,000.00 payable in 120 months commencing on May 30, 1997.

On February 5, 2002, PDC filed a complaint for Unlawful Detainer against


the spouses Guerrero. The complaint alleged that the spouses Guerrero
made no further payment beyond June 1, 2000 despite repeated demands,
prompting PDC to cancel the Contract to Sell on November 19, 2001 by
sending a Notice of Cancellation to the spouses Guerrero dated November
23, 2001. The complaint was docketed as Civil case No. 6293 filed with
the MeTC of Las Pinas City. The spouses Guerrero responded with a
pleading captioned Answer With Reservation alleging that it is
impermissible to blend “causes of action such as cancellation,
extinguishment or rescission of contract (which are beyond pecuniary
estimation) and ejectment (unlawful detainer)

On April 10, 2002, the spouses Guerrero filed a petition for prohibition
with the RTC Las Pinas praying that the Complaint in civil case no. 6293
be quashed, and raising the following lone issue:
“An Act with two joined controversies, one beyond pecuniary
estimation such as extinguishment of Contract (Cognizable by the
RTC) and the other, for ejectment (Unlawful detainer) is beyond the
adjudicatory powers of an inferior court.

RTC denied the petition for prohibition for lack of merit. In denying the
petition for prohibition of the spouses Guerrero, the RTC held that
Prohibition does not lie to restrain an act that is already a fait accompli. In
this case, the contract to sell has already been cancelled before the filing of
the complaint for unlawful detainer, hence, the prohibition will no longer
lie. Hence this petition.

SC RULING

The instant petition for review on certiorari is DENIED. The decision of


the RTC is AFFIRMED.
Prohibition is a preventive remedy seeking a judgment ordering the
defendant to desist from continuing with the commission of an act
perceived to be illegal. However, this court disagrees with the
pronouncement of the RTC that the act sought to be prevented in the filing
of the petition for prohibition is the cancellation of the contract to sell.

Petitions for prohibition may only be filed against tribunals, corporations,


boards, officers or persons exercising judicial, quasi-judicial or ministerial
functions. Though couched in imprecise terms, the petition for prohibition
in the case at bar apparently seeks to prevent the MeTC from hearing and
disposing Civil case 6293.
Further, to avail of the extraordinary writ of prohibition, petitioners should
have no appeal, nor any plain, speedy and adequate remedy in the
ordinary course of law. Ever since the petition for prohibition was filed
with the RTC, PDC opposed its propriety on the ground that the spouses
Guerrero had an available remedy against the allegedly improper exercise
of jurisdiction by the MeTC—a Motion to dismiss. Section 13, Rule 70 of
the 1997 Civil procedure provides that Motions to Dismiss on the ground
of lack of jurisdiction over the subject matter are exceptions to the
pleadings that are prohibited in forcible entry and unlawful detainer cases.

Before resorting to the remedy of prohibition, there should be “no appeal or


any other plain, speedy, and adequate remedy in the ordinary course of law.
This court is convinced that in the case at bar, a Motion to dismiss or an
Answer is a plain, speedy and adequate remedy in opposing the jurisdiction
of the MeTC.
14. Velasco vs. Belmonte Facts:
On October 10, 2012, one Joseph Socorro tan, a registered voter and
Mandamus resident of the Municipality of Torrijos Marinduque, filed with the
Commission on Elections (COMELEC) a petition to deny due course or
cancel the Certificate of candidacy (COC) of Reyes as candidate for the
position of Representative of the Lone District of the Province of
Marinduque. In his petition, Tan alleged that Reyes made several material
misrepresentations in her COC, that:
1. She is a resident of Brgy. Lupac, Boac Marinduque;
2. She is a natural-born Filipino citizen;
3. She is not a permanent resident of, or an immigrant to, a foreign
country;
4. Her date of birth is July 3, 1964;
5. Her civil status is single; and finally
6. She is eligible for the office she seeks to be elected to.
The case was docketed as SPA No. 13-053 (DC) entitled “Joseph Socorro
B. Tan v. Atty. Regina Ongsiako Reyes.
On March 27, 2013, the COMELEC first Division resolved to grant the
petition; hence, Reyes’ COC was accordingly cancelled.

On May 18, 2013, despite its receipt of the May 14, 2013 COMELEC
Resolution, the Marinduque Provincial Board of Canvassers (PBOC)
proclaimed Reyes as the winner of the May 13, 2013 elections for the
position of Representative of the Lone District of Marinduque.
Subsequently, the May 18, 2013 proclamation of respondent REGINA
ONGSIAKO REYES is declared NULL and VOID and without any legal
force and effect. Petitioner LORD ALLAN JAY Q. VELASCO is hereby
proclaimed the winning candidate for the position of representative in the
House of Representatives for the province of Marinduque.

Velasco alleged that despite all the letters and requests to Speaker
Belmonte Jr. and Sec. General Baua-Yap, they refused to recognize him as
the duly elected Representative of the Lone District of Marinduque.
Likewise, in the face of numerous written demands for Reyes to vacate the
position and office of the representative of the Lone District of
Marinduque, she continues to discharge the duties of said position.

Hence, the instant petition for Mandamus with prayer for issuance of a
temporary restraining order and/ or injunction.
ISSUE: WON a writ of mandamus can be issued to compel Speaker
Belmonte to recognize Velasco as the duly elected Representative of the
Lone District of Marinduque.

Ruling:

Yes the petition has merit. A petition for mandamus will prosper if it is
shown that the subject thereof is a ministerial act or duty, and not purely
discretionary on the part of the board, officer or person, and that the
petitioner has a well-defined, clear and certain right to warrant the grant
thereof. Section 3, Rule 65 of the Rules of Court, as amended, provides that
any person may file a verified petition for mandamus ‘when any tribunal,
corporation, board officer or person unlawfully neglects the performance of
an act which the law specifically enjoins as a duty resulting from an office,
trust, or station, or unlawfully excludes another from the use and
enjoyment of a right or office to which such other is entitled, and there is
no other plain, speedy and adequate remedy in the course of law.

The difference between a ministerial and discretionary act has long been
established. A purely ministerial act or duty is one which an officer or
tribunal performs in a given state of facts, in a prescribed manner, in
obedience to the mandate of a legal authority, without regard to or the
exercise of his own judgment upon the propriety or impropriety of the act
done. If the law imposes a duty upon public officer and gives him the right
to decide how or when the duty shall be performed, such duty is
discretionary and not ministerial. The duty is ministerial only when the
discharge of the same requires neither the exercise of official discretion or
judgment.

Writ of mandamus should be issued to Speaker Belmonte since it is his


ministerial duty to recognize Velasco as the duly elected representative of
the lone district of Marinduque.

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