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Rule 57 – Preliminary Attachment fulfillment of the pertinent requisites laid down by law and

1. Magaling v Ong the plaintiff may do so at any time before or after the
2. Davao Light and Power Co v CA service of summons on the defendant.
RECIT READY:
The only pre-requisite is that the Court be satisfied, upon
Davao light filed a complaint for recovery of sum of money consideration of "the affidavit of the applicant or of some
and damages against the Queensland and Adarna with ex other person who personally knows the facts:
parte application for a writ of preliminary attachment and 1. that a sufficient cause of action exists,
was granted. Queensland and Adarna then filed a motion 2. that the case is one of those mentioned in Sec. 1
to discharge the attachment for lack of jurisdiction. Trial Rule 57,
Court denied the motion but CA annulled such order and 3. that there is no other sufficient security for the
the attachment was discharged. ISSUE/S: WON writ of claim sought to be enforced by the action, and
preliminary attachment may be issued ex parte before 4. that the amount due to the applicant, or the value
acquisition of the jurisdiction of the respondents person – of the property the possession of which he is entitled to
YES HELD: A preliminary attachment is a purely statutory recover, is as much as the sum for which the order (of
remedy in which the law requires a strict construction of attachment) is granted above all legal counterclaims."
the provisions granting it. Having NO principle, statutory
or jurisprudential prohibiting its issuance by any court If the court be so satisfied, the "order of attachment shall
BEFORE ACQUISITION OF JURISDICTION OVER THE be granted," and the writ shall issue upon the applicant's
PERSON OF THE DEFENDANT, Lack of jurisdiction as posting of a bond executed to the adverse party in an
grounds for discharge is of no moment. Hence a writ of amount to be fixed by the judge, not exceeding the
preliminary attachment may be issued ex parte upon plaintiff's claim, conditioned that the latter will pay all the
fulfillment of the pertinent requisites laid down by law and costs which may be adjudged to the adverse party and all
the plaintiff may do so at any time before or after the damages which he may sustain by reason of the
service of summons on the defendant. attachment, if the court shall finally adjudge that the
applicant was not entitled thereto."
FACTS: Davao Light filed a verified complaint for recovery
of a sum of money and damages against private In the previous case Mindanao Savings & Loan Association,
respondents (Queensland and Adarna). Said complaint Inc. v. CA (1989) the court held that no hearing is required
contained an ex parte application for a writ of preliminary on an application for preliminary attachment, with notice
attachment. An order was issued granting the ex parte to the defendant, for the reason that this “ would defeat the
application and fixing the attachment bond. After objective of the remedy since the time which a hearing
submitting attachment bond, the writ of attachment was would take could be enough to enable the defendant to
issued. Summons, copy of the complaint, writ of abscond or dispose of his property before the writ of
attachment, and a copy of the attachment bond were attachment issues. In effect it would serve as a warning to
served to respondents. The sheriff seized the latters the absconding debtors-defendants.
properties.
There are 2 ways of discharging an attachment:
Respondents filed a motion to discharge the attachment 1. Posting of a counterbond
for lack of jurisdiction because at the time the order of a. Speedier way of discharge
attachment was promulgated, the trial court had not yet b. The submission of a counterbond is an efficacious
acquired jurisdiction over the cause and the respondents. mode of lifting an attachment already enforced against
Davao Light filed an opposition. Trial Court DENIED the property, or even of preventing its enforcement altogether.
motion to discharge. However, upon appeal of the When property has already been seized under attachment,
respondents CA annulled the order of Trial court and the attachment may be discharged upon counterbond in
declared null and void and the attachment discharged. accordance with Section 12 of Rule 57. But even before
HENCE THIS PETITION. actual levy on property, seizure under attachment may be
prevented also upon counterbond. The defendant need not
ISSUE/S: WON writ of preliminary attachment may be wait until his property is seized before seeking the
issued ex parte before acquisition of the jurisdiction of the discharge of the attachment by a counterbond. This is
respondents person -- YES made possible by Section 5 of Rule 57.
2. Showing of its improper or irregular issuance -
HELD: A preliminary attachment is a purely statutory Aside from the filing of a counterbond, a preliminary
remedy in which the law requires a strict construction of attachment may also be lifted or discharged on the ground
the provisions granting it. Having NO principle, statutory that it has been irregularly or improperly issued, in
or jurisprudential prohibiting its issuance by any court accordance with Section 13 of Rule 57. Like the first, this
BEFORE ACQUISITION OF JURISDICTION OVER THE second mode of lifting an attachment may be resorted to
PERSON OF THE DEFENDANT, Lack of jurisdiction as even before any property has beer levied on. Indeed, it
grounds for discharge is of no moment. Hence a writ of may be availed of after property has been released from a
preliminary attachment may be issued ex parte upon levy on attachment, as is made clear by said Section 13.
1
appeal from the challenged judgment, and the records of
In this case, the respondent used the second way the case were elevated to the Court of Appeals. Although
when it filed for a motion to discharge for lack of the trial court found in the text of the decision that the
jurisdiction. As discussed in the case of Mindanao Savings private respondent was not entitled to the issuance of the
& Loans Assoc. Inc. v. CA, “(W)hen the preliminary writ of preliminary attachment, no mention was made of
attachment is issued upon a ground which is at the same the said writ in the dispositive portion. As a result, the
time the applicant's cause of action e.g., 'an action for annotation of the preliminary attachment on the
money or property embezzled or fraudulently misapplied certificates/titles of the attached lands was maintained
or converted to his own use by a public officer, or an and could not be canceled.
officer of a corporation, or an attorney, factor, broker,
agent, or clerk, in the course of his employment as such, or The petitioners moved for the discharge of the writ of
by any other person in a fiduciary capacity, or for a willful preliminary attachment by the respondent court on the
violation of duty.' (Sec. 1 [b], Rule 57), or 'an action against basis of the judgment in their favor. Navia filed an
a party who has been guilty of fraud in contracting the opposition, contending that as she had perfected her
debt or incurring the obligation upon which the action is appeal to the Court of Appeals, the trial court no longer
brought' (Sec. 1 [d], Rule 57), the defendant is not allowed had any jurisdiction over the case.
to file a motion to dissolve the attachment under Section
13 of Rule 57 by offering to show the falsity of the factual On August 24, 1987, Judge Edelwina C. Pastoral, who had
averments in the plaintiff's application and affidavits on succeeded Judge Rallos denied the motion on the ground
which the writ was based — and consequently that the invoked in the opposition and declared:
writ based thereon had been improperly or irregularly Settled is the rule that the trial court loses its jurisdiction
issued (SEE Benitez v. I.A.C., 154 SCRA 41) — the reason over the record and over the subject of the case once an
being that the hearing on such a motion for dissolution of appeal in the case has been perfected. The exception to this
the writ would be tantamount to a trial of the merits of the rule refers to the orders of the Court to protect and
action. In other words, the merits of the action would be preserve the rights of the parties which do not involve any
ventilated at a mere hearing of a motion, instead of at the matter litigated by appeal (Section 9, Rule 41 of the Rules
regular trial. Therefore, when the writ of attachment is of of Court). The writ of preliminary attachment was earlier
this nature, the only way it can be dissolved is by a granted as a security for the satisfaction of the judgment,
counterbond (G.B. Inc. v. Sanchez, 98 Phil. 886)." the latter being now the subject of the appeal. To grant
defendant's motion at this juncture is to disturb and not to
NOTE: Dissolution of preliminary attachment DOES NOT preserve the rights of the parties. It is the stand of this
DISCHARGE sureties on bond because bond is 'executed to Court that the status quo of the parties shall be maintained
the adverse party, . . . conditioned that the . . . (applicant) for it cannot predetermine the posture which the appellate
will pay all the costs which may be adjudged to the adverse court will adopt, either to affirm, modify or reverse the
party and all damages which he may sustain by reason of questioned decision of this Court.
the attachment, if the court shall finally adjudge that the
applicant was not entitled thereto' (SEC. 4, Rule 57). They argued that if the court a quo could issue a writ of
Hence, until that determination is made, as to the attachment after the appeal had been perfected, then it
applicant's entitlement to the attachment, his bond must could a fortiori discharge such a writ, especially where, as
stand and cannot be withdrawn." in the case at bar, the movants were the prevailing parties.

3. Olib v Pastoral The petitioners also contended that there was really no
Facts: Corazon M. Navia sued the spouses Oscar and more need for an order discharging the attachment as this
Roberta Olib, petitioner herein, for dissolution of their followed by operation of Rule 57, Section 19, of the Rules
partnership and other reliefs, with a prayer for the of Court. Such discharge was the immediate and automatic
issuance of a writ of a preliminary attachment. it was effect of any judgment in favor of the party whose property
granted on November 10, 1983, resulting in the had been attached.
attachment of six parcels of land belonging to the
petitioners, along with stocks of merchandise in their The motion having been denied, the petitioners sought
bodega. The writ was amended on December 14, 1983, to reconsideration a second time, insisting that (a) the
release the merchandise. Two years later, on May 16, attachment had been automatically discharged under Rule
1985, the petitioners filed a motion to discharge the 57, Section 19; and (b) the attachment bond had already
preliminary attachment on the ground that the attachment lapsed for non-payment of the premiums. They were
bond executed for one year from November 1983 had rebuffed again. They then came before this Court,
already lapsed. On February 25,1986, Judge Miguel S. contending that the respondent court committed grave
Rallos of the Regional Trial Court of Agusan del Norte and abuse of discretion in denying their motion.
Butuan City rendered judgment for the petitioners and
sentenced the private respondent to pay them actual, Issue: W/N The attachment has been discharged?
moral and exemplary damages, plus attorney's fees and
litigation expenses. On April 16, 1986, Navia perfected her
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Held: No. Attachment is defined as a provisional remedy by
which the property of an adverse party is taken into legal Petitioner Alfredo D. Valmonte thereafter filed his Answer
custody, either at the commencement of an action or at any with Counterclaim. Petitioner Lourdes A. Valmonte,
time thereafter as a security for the satisfaction of any however, did not file her Answer. For this reason private
judgment that may be recovered by the plaintiff or any respondent moved to declare her in default. Petitioner
proper party. It is an auxiliary remedy and cannot have an Alfredo D. Valmonte entered a special appearance in behalf
independent existence apart from the main suit or claim of his wife and opposed the private respondent’s motion.
instituted by the plaintiff against the defendant. Being RTC denied the MR of respondents. CA declared petitioner
merely ancillary to a principal proceeding, the attachment Lourdes in default. Said decision was received by Alfredo
must fail if the suit itself cannot be maintained as the hence this petition.
purpose of the writ can no longer be justified. The
consequence is that where the main action is appealed, the Issue: Whether or not petitioner Lourdes A. Valmonte was
attachment which may have been issued as an incident of validly served with summons.
that action, is also considered appealed and so also
removed from the jurisdiction of the court a quo. The Held: NO. There was no valid service of summons on
attachment itself cannot be the subject of a separate case Lourdes. The action herein is in the nature of an action
independent of the principal action because the quasi in rem. Such an action is essentially for the purpose
attachment was only an incident of such action. of affecting the defendant’s interest in a specific property
and not to render a judgment against him. As petitioner
the order of attachment is considered discharged only Lourdes A. Valmonte is a nonresident who is not found in
where the judgment has already become final and the Philippines, service of summons on her must be in
executory and not when it is still on appeal. The obvious accordance with Rule 14, § 17. Such service, to be effective
reason is that, except in a few specified cases, execution outside the Philippines, must be made either:
pending appeal is not allowed. Petitioners may only lift the (1) by personal service;
writ of preliminary attachment in the Court of Appeals, to (2) by publication in a newspaper of general
which that ancillary remedy is deemed elevated along with circulation in such places and for such time as the court
the principal action. may order, in which case a copy of the summons and order
of the court should be sent by registered mail to the last
known address of the defendant; or
4. Valmonte v CA (3) in any other manner which the court may deem
Facts: Petitioner Lourdes A. Valmonte is a foreign resident. sufficient.
Petitioners Lourdes and Alfredo are husband and wife
both residents of U.S.A. Petitioner Alfredo D. Valmonte, In the case at bar, the service of summons upon petitioner
who is a member of the Philippine bar, however, practices Lourdes A. Valmonte was not done by means of any of the
his profession in the Philippines, commuting for this first two modes. This mode of service, like the first two,
purpose between his residence in the state of Washington must be made outside the Philippines, such as through the
and Manila, where he holds office at Ermita, Manila. Philippine Embassy in the foreign country where the
defendant resides. The service of summons on petitioner
Private respondent Rosita Dimalanta, who is the sister of Alfredo D. Valmonte was not made upon the order of the
petitioner filed an action for partition of real and property court as required by Rule 14, § 17 and certainly was not a
and accounting of rentals against petitioners. She alleged mode deemed sufficient by the court which in fact refused
that, the plaintiff is of legal age, a widow and is at present a to consider the service to be valid and on that basis declare
resident of Missouri, U.S.A., while the defendants are petitioner Lourdes A. Valmonte in default for her failure to
spouses but, for purposes of this complaint may be served file an answer.
with summons at Gedisco Center, Unit 304, 1564 A. Mabini
St., Ermita, Manila where defendant Alfredo D. Valmonte as Secondly, the service in the attempted manner on
defendant Lourdes Arreola Valmonte’s spouse holds office petitioner was not made upon prior leave of the trial court
and where he can be found. He husband was also her as required also in Rule 14, § 17. As provided in § 19, such
counsel, who has a law office in the Philippines. The leave must be applied for by motion in writing, supported
summons were served on her husband. by affidavit of the plaintiff or some person on his behalf
and setting forth the grounds for the application.
Petitioner in a letter, referred private respondent’s counsel
to her husband as the party to whom all communications Finally, because there was no order granting such leave,
intended for her should be sent. Service of summons was petitioner Lourdes was not given ample time to file her
then made upon petitioner Alfredo at his office in Manila. Answer which, according to the rules, shall be not less than
Alfredo D. Valmonte accepted his summons, but not the sixty (60) days after notice.
one for Lourdes, on the ground that he was not authorized
to accept the process on her behalf. Accordingly the Rule 58 (Preliminary Injunction)
process server left without leaving a copy of the summons 5. Strategic Alliance Dev Corp v Star Infrastructure Dev
and complaint for petitioner Lourdes A. Valmonte. Corp
3
Petitioner Strategic Alliance Development Corporation partnership or association and the State insofar as its
(STRADEC) is a domestic corporation primarily engaged in franchise, permit or license to operate is concerned; and,
the business of a development with principal place of (d) among the stockholders, partners or associates
business at Bayambang, Pangasinan t. Along with five themselves. As the definition is broad enough to cover all
individuals4 and three other corporations,5 STRADEC kinds of controversies between stockholders and
incorporated respondent Star Infrastructure Development corporations, the traditional interpretation was to the
Corporation (SIDC) for the purpose of engaging in the effect that the relationship test brooked no distinction,
general construction business with the original principal qualification or any exemption whatsoever.
place of business at Pasig City, then moved to Poblacion However, the unqualified application of the
Sur, Bayambang, Pangasinan7 and, later, to Lipa, Batangas. relationship test has been modified on the ground that the
STRADEC fully paid and owned 49% of the 5,000,000 same effectively divests regular courts of jurisdiction over
shares of stock into which SIDC’s authorized capital stock. cases for the sole reason that the suit is between the
In 2004, respondents Yujuico and Sumbilla, in corporation and/or its corporators. It was held that the
their respective capacities as then President and Treasurer better policy in determining which body has jurisdiction
of STRADEC, executed a Promissory Note for and in over a case would be to consider not only the status or
consideration of a loan in the sum ofP10,000,000.00 relationship of the parties but also the nature of the
ostensibly extended in favor of said corporation by question that is the subject of their controversy.33 Under
respondent Robert L. Wong, one of the incorporators of the nature of the controversy test, the dispute must not
SIDC.9 As security for the payment of the principal as well only be rooted in the existence of an intra-corporate
as the stipulated interests thereon, a pledge constituted relationship, but must also refer to the enforcement of the
over STRADEC’s entire shareholdings in SIDC was parties' correlative rights and obligations under the
executed by respondent Yujuico on 1 April 2005.10 Corporation Code as well as the internal and intra-
In view of STRADEC’s repeated default on its corporate regulatory rules of the corporation.34 The
obligations,11 however, the shares thus pledged were sold combined application of the relationship test and the
by way of the 26 April 2005 notarial sale conducted in nature of the controversy test has, consequently, become
Makati City by respondent Raymond M. Caraos. Having the norm in determining whether a case is an intra-
tendered the sole bid of P11,800,000.00,12 respondent corporate controversy or is purely civil in character.
Wong was issued the corresponding certificates of stocks In the case at bench, STRADEC’s first and second
by respondent Bede S. Tabalingcos, SIDC’s Corporate causes of action seek the nullification of the loan and
Secretary for the years 2004 and 2005, after the transfer pledge over its SIDC shareholding contracted by
was recorded in the corporation’s stock and transfer respondents Yujuico, Sumbilla and Wong as well the
book.13 avoidance of the notarial sale of said shares conducted by
In 2006,Quiambao, in his capacity as President respondent Caraos.
and Chairman of the Board of Directors of STRADEC, Applying the relationship test, we find that
commenced the instant suit with the filing of the petition STRADEC’s first and second causes of action qualify as
before a commercial court in Batangas City alleging four intra-corporate disputes since said corporation and
causes of action, to wit: that respondents Yujuico and respondent Wong are incorporators and/or stockholders
Sumbilla were not authorized to enter into any loan of SIDC. Having acquired STRADEC’s shares thru the
agreement with respondent Wong, that the auction sale impugned notarial sale conducted by respondent Caraos,
was held in a wrong venue, that the transfer of STRADED respondent Wong appears to have further transferred said
shares in SIDC was made fraudulently and that the 30 July shares in favor of CTCII, a corporation he allegedly formed
2005 annual stockholders meeting and 20 July 2006 with members of his own family. By reason of said
special stockholder’s meeting of SIDC where the change of transfer, CTCII became a stockholder of SIDC and was, in
principal place of business was approved is invalid fact, alleged to have been recognized as such by the latter
pending determination of the legitimate Board of Directors and its corporate officers.
for STRADEC. Considering that they fundamentally relate to
Issue: Whether or not the cause of action of petitioners is STRADEC’s status as a stockholder and the alleged
an intra-corporate dispute. fraudulent divestment of its stockholding in SIDC, the same
Ruling: causes of action also qualify as intra-corporate disputes
Meritorious. under the nature of the controversy test. As part of the
An intra-corporate dispute is understood as a suit fraud which attended the transfer of its shares, STRADEC
arising from intra-corporate relations or between or distinctly averred, among other matters, that respondents
among stockholders or between any or all of them and the Yujuico and Sumbilla had no authority to contract a loan
corporation. Applying what has come to be known as the with respondent Wong; that the pledge executed by
relationship test, it has been held that the types of actions respondent Yujuico was simulated since it did not receive
embraced by the foregoing definition include the following the proceeds of the loan for which its shares in SIDC were
suits: (a) between the corporation, partnership or set up as security; that irregularities attended the notarial
association and the public; (b) between the corporation, sale conducted by respondent Caraos who sold said shares
partnership or association and its stockholders, partners, to respondent Wong; that the latter unlawfully transferred
members, or officers; (c) between the corporation, the same shares in favor of CTCII; and, that SIDC and its
4
officers recognized and validated said transfers despite 6. Australian Professional Realty v Municipality of
being alerted about their defects. Ultimately, the foregoing Padre Garcia
circumstances were alleged to have combined to rid 7. Allgemeine Bau Chemie Phil v Metrobank
STRADEC of its shares in SIDC and its right as a 8. Cabili v Balindog
stockholder to participate in the latter’s corporate affairs.
Moreover, pursuant to Section 5.2 of Republic Act Rule 59 (Receivership)
No. 8799,41 otherwise known as the Securities Regulation 9. Normandy v Duque
Code, the jurisdiction of the SEC over all cases enumerated RECIT READY:
under Section 5 of Presidential Decree No. 902-A has been Normandy was appointed receiver of the WARVETS and
transferred to RTCs designated by this Court as SCCs42 went to Japan by the court’s authority to check on the
pursuant to A.M. No. 00-11-03-SC promulgated on 21 reported under valuation of goods shipped to WARVETS
November 2000. and the preparation of the shipment, which had not yet
On the issue of venue and jurisdiction, unlike the been committed. Expenses for which Normandy was
SEC which is a tribunal of limited jurisdiction, special ordered reimbursed by the lower court. Normandy filed a
commercial courts (SCC) like the RTC are still competent motion to fix his and his co-receiver’s compensation which
to tackle civil law issues incidental to intra-corporate was denied by the lower court. While the motion for
disputes filed before them. reconsideration was pending, Normandy filed a motion
Section 5.2 of R.A. No. 8799 directs merely the resigning as a receiver and for the court to fix his fees and
Supreme Court's designation of RTC branches that shall compensation as a receiver which was granted by the
exercise jurisdiction over intra-corporate disputes. court. Subsequently Atty. Magno filed a motion for the
Nothing in the language of the law suggests the diminution payment of attorney’s fees and Normandy filed for
of jurisdiction of those RTCs to be designated as SCCs. The payment and cancellation and reimbursement of receiver’s
assignment of intra-corporate disputes to SCCs is only for bond. Both motions were granted but the attorney’s fees
the purpose of streamlining the workload of the RTCs so was reduced from 10k to 1k. Barely 2 months after such
that certain branches thereof like the SCCs can focus only order, petitioner filed another motion for reimbursement
on a particular subject matter. for the clerk that he hired to help him with the voluminous
The RTC exercising jurisdiction over an intra- paper and legal work he had attended to as a receiver,
corporate dispute can be likened to an RTC exercising its which the court denied. ISSUE/S: WON petitioner is
probate jurisdiction or sitting as a special agrarian court. entitled is additional reimbursement or compensation. –
The designation of the SCCs as such has not in any way NO. HELD: Clerical services employed by the receiver must
limited their jurisdiction to hear and decide cases of all be wit the leave of court for reimbursement to be proper.
nature, whether civil, criminal or special proceedings. It is inherent in the office of a receiver not only that he
At any rate, it cannot be gainsaid that STRADEC should act at all times with the diligence and prudence of a
correctly commenced its petition before the RTC good father of a family but should also not incur any
exercising jurisdiction over SIDC’s principal place of obligation or expenditure without leave of court to
business which was alleged to have been transferred from supervise the receiver and see to it that he adheres to the
Bayambang, Pangasinan to Lipa, Batangas.51 It matters above standard of his trust and limits the expense of the
little that STRADEC, as pointed out by respondents, also receivership to the minimum. Whatever amount he seeks
questions the validity of the 30 July 2005 SIDC in addition to what had already been reimbursed would be
stockholders’ annual meeting where the aforesaid change improper. He is estopped from claiming any further
in the address of its principal place of business was amount for the alleged clerical services without prior to
allegedly approved. Said matter should be properly approval or authority of this court.
threshed out in the proceedings before the RTC alongside
such issues as the validity of the transfers of STRADEC’s FACTS: Normandy was appointed receiver of the
shares to respondents Wong and CTCII, the propriety of WARVETS “to do and perform such acts respecting the
the recording of said transfers in SIDC’s books, STRADEC’s property, assets and transaction” of the organization “as
status as a stockholder of SIDC, the legality of the 20 July the court may authorize.” Upon filing a bond of 50k he
2006 SIDC stockholders’ special meeting or, for that started the discharge of his functions. He went to Japan by
matter, Cezar T. Quiambao’s authority to represent the court’s authority for the purpose of checking on the
STRADEC in the case at bench.1avvphi1 reported under valuation of goods shipped to WARVET
On the principle that a corporation is a legal entity with a and the preparation of the shipment which had not yet
personality separate and distinct from its individual been committed. Expenses for which Normandy was
stockholders or members and from that of its officers who ordered reimbursed by the lower court.
manage and run its affairs,56 we find that the other For 3 years as receiver, Normandy did not receive any fee
pending actions have little or no bearing to the issues set for compensation from WARVETS. So he filed a motion to
forth in STRADEC’spetition which, at bottom, involve the fix his and his co-receiver’s (Marcario Ofilada)
transfer of its own shareholding in SIDC and its status and compensation. He further prayed for atorney’s fees and
rights as such stockholder stenographer’s fees as the court may allow. Lower court
issued an “Omnibus Order” denying the motion of the
appellant. Petitioner filed a motion for reconsideration but
5
while this was pending, he filed another motion resigning
from his post as receiver and praying that the lower court Rule 60(Replevin)
accept it and at the same time fix the amount of his fees 10. BA Finance Corp v CA
and compensation. Such motion was granted and was Facts: The spouses Reynaldo and Florencia Manahan
discharged as receiver and his compensation was fixed. executed, on 15 May 1980, a promissory note binding
Subsequently, Atty. Magno filed a motion for payment of themselves to pay Carmasters, Inc., the amount of
attorney’s fees to him for his alleged services as legal P83,080.00 in thirty-six monthly installments commencing
counsel for the appellant when he was a receiver. 01 July 1980. To secure payment, the Manahan spouses
Normandy filed another motion for the payment and executed a deed of chattel mortgage over a motor vehicle,
cancellation of his receiver’s bond and for the a Ford Cortina 1.6 GL. Carmasters later assigned the
reimbursement to him of the sum he paid out of his promissory note and the chattel mortgage to petitioner BA
personal funds as premium for said bond. Lower court Finance Corporation with the conformity of the Manahans.
granted the compensation to Atty. Magno in a reduced When the latter failed to pay the due installments,
amount and the reimbursement of the whole sum to petitioner sent demand letters. The demands not having
Normandy. been heeded, petitioner, on 02 October 1987, filed a
Barely 2 months after, Normandy filed another motion for complaint for replevin with damages against the spouses,
reimbursement for the compensation of a clerk he as well as against a John Doe, praying for the recovery of
employed when he was still a receiver in view of the the vehicle with an alternative prayer for the payment of a
voluminous paper and legal work it was necessary for him sum of money should the vehicle not be returned. Upon
to engage the service of a types-stenographer who doubled petitioner's motion and the filing of a bond in the amount
as messenger, filing clerk, utility clerk and records clerk. of P169,161.00, the lower court issued a writ of replevin.
Lower court denied the last motion on the ground that The court, however, cautioned petitioner that should
whatever amount he not seeks in addition to the previous summons be not served on the defendants within thirty
orders are improper and that he is no estopped from (30) days from the writ's issuance, the case would be
claiming any further as compensation for alleged clerical dismissed for failure to prosecute.
services. The service of summons upon the spouses Manahan was
ISSUE/S: WON petitioner is entitled is additional caused to be served by petitioner. The original of the
reimbursement or compensation. – NO. summons had the name and the signature of private
HELD: A receiver is a representative of the Court respondent Roberto M. Reyes indicating that he received,
appointed for the purpose of preserving and on 14 October 1987, a copy of the summons and the
conserving the property in litigation and prevent its complaint. petitioner, through its Legal Assistant, Danilo E.
possible destruction or dissipation, if it were left in the Solano, issued a certification to the effect that it had
possession of any of the parties. The receiver is not the received from Orson R. Santiago, the deputy sheriff of the
representative of any of the parties but of all of them to the Regional Trial Court of Manila, Branch 20, the Ford Cortina
end that their interests may be equally protected with the seized from private respondent Roberto M. Reyes, the John
least possible inconvenience and expense. It is inherent in Doe referred to in the complaint, in Sorsogon, Sorsogon.
the office of a receiver not only that he should act at all On 20 October 1987, the lower court came out with an
times with the diligence and prudence of a good father of a order of seizure.
family but should also not incur any obligation or Alleging possession in good faith, private respondent filed,
expenditure without leave of court to supervise the on 26 October 1987, a motion for an extension of time
receiver and see to it that he adheres to the above within which to file his answer and/or a motion for
standard of his trust and limits the expense of the intervention. The court granted the motion.
receivership to the minimum. It is generally the Petitioner then filed a notice of dismissal of the case it also
receivership court that is in a better position to determine sought in another motion the withdrawal of the replevin
whether a particular expenditure is reasonable and bond. The court merely noted the notice of dismissal and
justified or not and its ruling therein may not be disturbed denied the motion to withdraw the replevin bond
by this Court. considering that the writ of replevin had been
The receivership court's reasons for withholding approval implemented. Private respondent filed a motion praying
of the reimbursement in question are precisely because that petitioner be directed to comply with the court order
"whatever amount he (the receiver now seeks in addition requiring petitioner to return the vehicle tom him. In turn
thereto (P10,000.00) would be improper. Moreover, he is petitioner filed a motion for reconsideration contending
now estopped from claiming any further amount as that: (a) the dismissal of the case was tantamount to
compensation for alleged clerical services employed by adjudication on the merits that thereby deprived it with
him as such receiver without prior approval or authority of the remedy to enforce the promissory note, the chattel
this Court." We find these reasons to be cogent enough in mortgage and the deed of assignment, under Section 3,
the premises, especially because appellant's alleged Rule 117, of the Rules of Court; (b) the order to return the
employment of a clerk was made without prior leave of vehicle to private respondent was a departure from
court. In these circumstances, it cannot be said that the jurisprudence recognizing the right of the mortgagor to
court a quo abused its discretion, much less gravely. foreclose the property to respond to the unpaid obligation
secured by the chattel mortgage, and (c) there were no
6
legal and factual bases for the court's view that the filing of here assumed that the plaintiff's right to possess the thing
the replevin case was "characterized (by) evil practices." is not or cannot be disputed.
The court granted petitioner's motion for reconsideration A chattel mortgagee, unlike a pledgee, need not be in, nor
and accordingly recalled the order directing the return of entitled to, the possession of the property unless and until
the vehicle to private respondent. Petitioner filed a motion the mortgagor defaults and the mortgagee thereupon
to declare private respondent in default. The court granted seeks to foreclose thereon. Since the mortgagee's right of
the motion on that same day and declared private possession is conditioned upon the actual fact of default
respondent "in default for his failure to file the x x x which itself may be controverted, the inclusion of other
answer within the reglementary period." The court parties, like the debtor or the mortgagor himself, may be
dismissed the case against private respondent for failure of required in order to allow a full and conclusive
petitioner to show any legal basis for said respondent's determination of the case. When the mortgagee seeks a
liability. replevin in order to effect the eventual foreclosure of the
In its appeal to the Court of Appeals, petitioner has mortgage, it is not only the existence of, but also the
asserted that a suit for replevin aimed at the foreclosure of mortgagor's default on, the chattel mortgage that, among
the chattel is an action quasi in rem which does not other things, can properly uphold the right to replevy the
necessitate the presence of the principal obligors as long property. The burden to establish a valid justification for
as the court does not render any personal judgment that action lies with the plaintiff. An adverse possessor,
against them The appellate court, subsequently, denied who is not the mortgagor, cannot just be deprived of his
petitioner's motion for reconsideration. In the instant possession, let alone be bound by the terms of the chattel
appeal, petitioner insists that a mortgagee can maintain an mortgage contract, simply because the mortgagee brings
action for replevin against any possessor of the object of a up an action for replevin.
chattel mortgage even if the latter were not a party to the
mortgage. 11. Chiao Liong Tan v CA
Issues: W/N a mortgagee can maintain an action for Facts: Chiao Long Tan claims to be the owner of a 1976
replevin against any possessor of the object of a chattel Isuzu Elf van. As owner thereof, petitioner says he has
mortgage evne if the latter were not a party to the been in possession, enjoyment, and utilization of the van
mortgage. until his older brother, Tan Ban Yong (respondent),
Held: Replevin, broadly understood, is both a form of unlawfully took it away from him.
principal remedy and of a provisional relief. It may refer
either to the action itself, i.e., to regain the possession of Petitioner:
personal chattels being wrongfully detained from the That the van is registered under his name.
plaintiff by another, or to the provisional remedy that He claims to have bought the vehicle from isuzu
would allow the plaintiff to retain the thing during the Balintawak;
pendency of the action and hold it pendente lite. The action That he sent his brother to pay for the van and the receipt
is primarily possessory in nature and generally determines was issued in his name because it was his money that was
nothing more than the right of possession. Replevin is so used to pay for the vehicle;
usually described as a mixed action, being partly in rem That he allowed his brother to use the vehicle because the
and partly in personam-in rem insofar as the recovery of latter was working for the company;
specific property is concerned, and in personam as regards And that his brother later refused to return the vehicle and
to damages involved. As an "action in rem," the gist of the appropriated the same for himself.
replevin action is the right of the plaintiff to obtain
possession of specific personal property by reason of his Private respondent on the other hand testifies:
being the owner or of his having a special interest therein. 1. CLT Industries is the family business and it was under
Consequently, the person in possession of the property the name of petitioner since
sought to be replevied is ordinarily the proper and only at the that time, he was leaving for the US and petitioner is
necessary party defendant, and the plaintiff is not required the only Filipino left in the Philippines
to so join as defendants other persons claiming a right on 2. When the family business needed a vehicle, he asked
the property but not in possession thereof. Rule 60 of the petitioner to look for a vehicle
Rules of Court allows an application for the immediate and gave him money as downpayment for an Isuzu Elf van
possession of the property but the plaintiff must show that 3. After a month, he paid for the van by getting a loan from
he has a good legal basis, i.e., a clear title thereto, for a friend
seeking such interim possession. 4. As much as the receipt was placed in the name of
In effect then, the mortgagee, upon the mortgagor's petitioner, private respondent allowed the registration
default, is constituted an attorney-in-fact of the mortgagor under the name of petitioner
enabling such mortgagee to act for and in behalf of the 5. There was also agreement that he would use the vehicle
owner. Accordingly, that the defendant is not privy to the as he paid for the same
chattel mortgage should be inconsequential. By the fact
that the object of replevin is traced to his possession, one All the abovementioned allegations of private respondent
properly can be a defendant in an action for replevin. It is has been corroborated by witnesses. The trial court hence

7
ruled in favor of the private respondent and the CA annulment case to again award support in favor of the
affirmed this decision. child. The Court held no. Judgment for support does not
become final. The right to support is of such nature that its
Issue: WON CA erred in affirming the decision of the TC? allowance is essentially provisional; for during the entire
period that a needy party is entitled to support, his or her
Held: No. It is true that the judgment in a replevin suit alimony may be modified or altered, in accordance with his
must only resolve in whom is the right of possession. increased or decreased needs, and with the means of the
Primarily, the action of replevin is possessory in character giver. It cannot be regarded as subject to final
and determines nothing more than the right of possession. determination.
However, when the title to the property is distinctly put in
issue by the defendant’s plea and by reason of this policy Facts: The case commenced upon the filing of a petition for
to settle in one action all the conflicting claims of the declaration of nullity of marriage by Adriana Chua against
parties to the possession of the property in controversy, Jose Lam. Chua alleged that: she and Jose were married;
the question of ownership may be resolved in the same out of said marriage, they begot one son, John Paul Chua
proceeding. Lam; Jose was psychologically incapacitated to comply
Procedure-wise, the Court observes that the action by with the essential marital obligations of marriage but said
petitioner as plaintiff in the trial court was only one for incapacity was not then apparent; such psychological
Replevin and Damages. Since replevin is only a provisional incapacity of Jose became manifest only after the
remedy where the replevin plaintiff claims immediate celebration of the marriage when he frequently failed to go
delivery of personal property pending the judgment of the home, indulged in womanizing and irresponsible activities,
trial court in a principal case, the petitioner should have such as, mismanaging the conjugal partnership of gains; in
filed in the trial court as a main case an action to recover order to save what was left of the conjugal properties, she
possession of the Isuzu Elf van which was in the was forced to agree with Jose on the dissolution of their
possession of the private respondent. Logically, the basis conjugal partnership of gains and the separation of present
of petitioner's cause of action should have been his and future properties; said agreement was approved by
ownership of said van. In the State of California, from the Makati RTC; they had long been separated in bed and
whose Code of Procedure we copied our rule on replevin, board; they have agreed that the custody of their child will
their old replevin rule which allowed the immediate be with her, subject to visitation rights of Jose. Adriana
delivery of the chattel at the commencement of the action prayed that the marriage between her and Jose be
upon application with bond by the replevin plaintiff had declared null and void but she failed to claim and pray for
already been struck down as early as July 1, 1971 in the the support of their child, John Paul.
case of Blair v. Pitchess. As in fact, on June 12, 1972 when Summons was duly served on Jose; and despite the lapse of
the United States Supreme Court struck down as fifteen days after service of summons, no responsive
unconstitutional the Florida and Pennsylvania replevin pleading was filed by him.
statutes in Fuentes v. Shevin, most of the states, on their The trial court set the case for hearing. Adriana testified
own, changed their replevin statutes to include a that her marriage with Jose was arranged by her parents in
mandatory preliminary hearing before the writ could be the traditional Chinese way; that her married life was
abnormal because Jose very seldom came home, never
worked for a living and instead kept asking for money
Rule 61(Support Pendente Lite) from her to buy his sports cars; that she was also the one
12. Lam v Chua spending for all the expenses of their only child, John Paul.
The case commenced upon the filing of a petition for After her testimony, counsel for Adriana formally offered
declaration of nullity of marriage by Chua against Lam. the documentary evidence. No evidence was presented
Pasay RTC declared that the marriage between petitioner regarding the amount of support needed by John Paul or
and respondent null and void for being bigamous by the capacity of Jose to give support.
nature. Likewise, respondent is ordered to give a monthly Adriana filed an Urgent Motion to Re-Open on the ground
support to his son John Paul in the amount of P20,000.00. that she was able to secure additional new evidence which
Jose filed a MR thereof but only insofar as the decision were significant, material and indispensable. The trial
awarded monthly support to his son in the amount of court granted the motion to re-open the case and held a
P20,000.00. He argued that there was already a provision hearing for the reception of additional evidence. Evidence
for support of the child as embodied in the decision of the showed that Jose had been married twice before he
Makati RTC wherein he and Adriana agreed to contribute married Adriana in 1984.
P250,000.00 each to a common fund for the benefit of the Pasay RTC declared that the marriage between petitioner
child. Jose further alleged in his motion that his and respondent null and void for being bigamous by
contribution to the common fund had even amounted to nature. Likewise, respondent is ordered to give a monthly
P500,000.00. Pasay RTC denied Jose’s MR. Jose appealed to support to his son John Paul Chua Lam in the amount of
the CA. CA affirmed Pasay RTC’s decision. The issue in this P20,000.00.
case is whether or not the compromise agreement where
the parties bound themselves to contribute to a common Jose filed a MR thereof but only insofar as the decision
fund for the benefit of their child bars the trial court in awarded monthly support to his son in the amount of
8
P20,000.00. He argued that there was already a provision Respondent to give support in the amount of P42,292.50
for support of the child as embodied in the decision of the per month starting April 1, 1999. By March 7, 2005, an
Makati RTC wherein he and Adriana agreed to contribute Order was issued by the trial court reducing the amount of
P250,000.00 each to a common fund for the benefit of the support to be given while also denying Petitioner’s motion
child. Jose further alleged in his motion that his for spusal support, increase of her children’s monthly
contribution to the common fund had even amounted to support pendent lite and support-in-arrears. By May 16,
P500,000.00. 2005 the trial court rendered its Decision in Civil Case No.
97-0608 declaring Petitioner’s marriage null and void but
Pasay RTC denied Jose’s MR ruling that the compromise ordering Private-Respondent to pay only P30,000 as
agreement entered into by the parties and approved by the monthly support. Not satisfied, Petitioner filed a Notice of
Makati RTC before the marriage was declared null and Appeal with the CA. In her appeal however, Petitioner
void ab initio by the Pasay RTC, is of no moment and contended that she was not appealing the May 16, 2005
cannot limit and/or affect the support ordered by the Decision of the trial court, rather she was appealing the
latter court. Jose then appealed the Pasay RTC’s decision to March 7, 2005 Decision as well as the Order denying her
the CA. Motion for Reconsideration. The CA dismissed her appeal
CA affirmed Pasay RTC’s decision. Jose filed a MR of the on the ground that it would disturb the May 16, 2005
Decision but CA denied the same. Decision of the trial court since it had long been final
Issue: Whether or not the compromise agreement where executory. Hence this case. Petitioner contends that the CA
the parties bound themselves to contribute to a common committed grave abuse of discretion amounting to lack or
fund for the benefit of their child bars the trial court in excess of jurisdiction when it dismissed outright the
annulment case to again award support in favor of the appeal from said RTC orders. Petitioner maintained that
child. - NO while assailed Orders were interlocutory in nature, they
Ratio: The Pasay RTC and the CA are both correct insofar ceased to be so when arrearages incurred by Pirvate-
as they ruled that the amount of support is by no means Respondent became due and demandable.
permanent. In Advincula vs. Advincula, the Court held that Issue/s: W/N appeal may be had in the March 7, 2005
another action for support could be filed again by the same Order as well as the Order denying Petitioner’s Motion for
plaintiff notwithstanding the fact that the previous case for Reconsideration. NO.
support filed against the same defendant was dismissed. Held: The Court held that the word interlocutory refers to
The Court further held in said case that: something intervening between the commencement and
. . . Judgment for support does not become final. The right the end of the suit which decides some point or matter but
to support is of such nature that its allowance is essentially is not a final decision of the whole controversy. An
provisional; for during the entire period that a needy party interlocutory order merely resolves incidental matters and
is entitled to support, his or her alimony may be modified leaves something more to be done to resolve the merits of
or altered, in accordance with his increased or decreased the case. In contrast, a judgment or order is considered
needs, and with the means of the giver. It cannot be final if the order disposes of the action or proceeding
regarded as subject to final determination. completely, or terminates a particular stage of the same
Thus, there is no merit to the claim of Jose that the action. Clearly, whether an order or resolution is final or
compromise agreement between him and Adriana, as interlocutory is not dependent on compliance or non-
approved by the Makati RTC and embodied in its decision compliance by a party to its directive, as what petitioner
in the case for voluntary dissolution of conjugal suggests.
partnership of gains, is a bar to any further award of Further, the Court ruled that the subject orders on the
support in favor of their child John Paul. The provision for matter of support pendente lite are but an incident to the
a common fund for the benefit of their child John Paul, as main action for declaration of nullity of marriage hence
embodied in the compromise agreement between herein provisional remedies. Provisional remedies are writs and
parties which had been approved by the Makati RTC, processes available during the pendency of the action
cannot be considered final and res judicata since any which may be resorted to by a litigant to preserve and
judgment for support is always subject to modification, protect certain rights and interests therein pending
depending upon the needs of the child and the capabilities rendition, and for purposes of the ultimate effects, of a
of the parents to give support. final judgment in the case. They are provisional because
they constitute temporary measures availed of during the
13. Calderon v Roxas pendency of the action, and they are ancillary because they
Facts: This case stemmed from the Decision of this Court in are mere incidents in and are dependent upon the result of
G.R. No. 139337, declaring that the Order of Support issued the main action.
by the 260th Branch of the RTC of Paranaque City in Civil Finally, the Court noted that pursuant to Sec. 1(h), Rule 41
Case No. 97- 0608 was lawfully rendered. The latter Civil of the Revised Rules of Civil Procedure, the remedy against
Case was filed by Petitioner for the declaration of nullity of an interlocutory order not subject of an appeal is an
her marriage with Private-Respondent on the ground of appropriate special civil action under Rule 65 provided
psychological incapacity. Because of the said Decision by that the interlocutory order is rendered without or in
the Court, the trial court, upon motion of Petitioner, issued excess of jurisdiction or with grave abuse of discretion.
an Order dated October 11, 2002 directing Private- Therefore, by having chosen the wrong remedy in
9
questioning the subject interlocutory orders of the RTC, vexation with respect to one's liability. When a court
The Court ruled that petitioner's appeal was correctly orders that claimants litigate among themselves there
dismissed by the CA. arises a new action. The pleading which initiates the action
is referred to as the complaint of interpleader and not a
Rule 62 (Interpleader) cross-complaint.
14. Ocampo v Tirona
RECIT READY: The action of interpleader is a remedy whereby a person
Facts: Respondent Tirona was a lessee of a land purchased who has property whether personal or real, in his
by the petitioner. However, when the area was declared a possession, or an obligation to render wholly or partially,
priority development, respondent informed petitioner that without claiming any right in both, or claims an interest
she will suspend paying the rentals. The petitioner which in whole or in part is not disputed by the conflicting
purchased the said land from the original owner. This claimants, comes to court and asks that the persons who
prompted the petitioner to file an action for unlawful claim the said property or who consider themselves
detainer and damages against the respondent. The MTC entitled to demand compliance with the obligation, be
held that Tirona had no reason to suspend the payment of required to litigate among themselves, in order to
rents as this made her occupation of the property illegal. determine finally who is entitled to one or the other thing.
Thus, the petitioner has the right to recover possession. The remedy is afforded not to protect a person against a
The RTC concurred with this decision. Appellate Court set double liability but to protect him against a double
aside and dismissed complaint. Hence, this instant petition. vexation in respect of one liability. When the court orders
Issue: Whether or not an action for interpleader is proper that the claimants litigate among themselves, there arises
in this case RULING: Yes. Tirona should have filed an in reality a new action and the former are styled
interpleader and need not wait for the actual filing of a suit interpleaders, and in such a case the pleading which
by petitioner against her. The action is proper when a initiates the action is called a complaint of interpleader
lessee does not know who to pay to the rentals due to and not a cross-complaint.
conflicting claims in the subject property. This remedy is
afforded not to protect anyone against double liabilities 15. Wack Wack Golf and Country Club v Lee E. Won
but to protect him against double vexation with respect to This case is stemmed from a controversy involving
one's liability. When a court orders that claimants litigate petitioner corp. and respondent who was claiming
among themselves there arises a new action. The pleading ownership of membership fee certificate 201. The case
which initiates the action is referred to as the complaint of was decided by the CFI of Manila in favor of Lee who was
interpleader and not a cross-complaint. deemed to be the rightful owner. Now petitioner is filing a
Facts: complaint praying that Lee and Bienvenido Tan, who is
Ocampo alleged that he is the owner of a parcel of land in also claims to be the owner of said certificate, to interplead
Pasay City. Ocampo brought the subject land from Breton, and litigate their conflicting claims and that judgment be
heir of the subject lands registered owner Cruz. Possession rendered after hearing. Issue: WON the action of
and administration of the subject land are claimed to be interpleader by petitioner will prosper. Held: No, the
already in Ocampos management even thought there’s no Corporation has not shown any justifiable reason why it
TCT yet. Tirona on the other hand, is a lessee occupying a did not file an application for interpleader in civil case
portion of the subject land. 26044 to compel the appellees herein to litigate between
Ocampo alleged that a formal written notice was given to themselves their conflicting claims of ownership. It was
Tirona, such notice was said to be a formal agreement. only after adverse final judgment was rendered against it
Ocampo wrote a letter to Tirona demanding to pay rentals that the remedy of interpleader was invoked by it. By then
in favor of the latter, however, Tirona failed and refused it was too late, because to be entitled to this remedy the
hence, Ocampo filed a complaint for unlawful detainer and applicant must be able to show that lie has not been made
damages against Tirona before MTC. independently liable to any of the claimants. And since the
MTC: held that Tirona had no reason to suspend payment Corporation is already liable to Lee under a final judgment,
of rents as this mader her occupation of the property the present interpleader suit is clearly improper and
illegal. Thus, petitioner had the right to recover possession. unavailing.
RTC: concurred with the decision. Facts: This case stems from a controversy between
Appellate Court: set aside and dismissed the complaint. petitioner and respondent Lee about the ownership of
Hence, this instant petition. Membership Fee Certificate 201 in the CFI of Manila. The
ISSUE: Whether or not an action for interpleader is proper CFI rendered a decision in favor of Lee. Now, petitioner
in this case HELD: YES seeks that (a) an order be issued requiring Lee and Tan,
RULING: who is also claiming ownership of the said certificate, to
Tirona should have filed an interpleader and need not wait interplead and litigate their conflicting claims; and (b)
for the actual filing of a suit by petitioner against her. The judgment. be rendered, after hearing, declaring who of the
action is proper when a lessee does not know who to pay two is the lawful owner of membership fee certificate 201,
to the rentals due to conflicting claims in the subject and ordering the surrender and cancellation of
property. This remedy is afforded not to protect anyone membership fee certificate 201-serial no. 1478 issued in
against double liabilities but to protect him against double
10
the name of Lee. Both defendants moved to dismiss the The respondent’s act of initiating foreclosure was in
complaint of the ground of res judicata. breach of RA 8501 and rendered the action of declaratory
Issue: WON the action for interpleader will prosper. relief improper. It was then suggested by RTC that the
Held: No, the Corporation has not shown any justifiable proper remedy is an ordinary civil action and that the CA
reason why it did not file an application for interpleader in should’ve ordered the conversion of the petition pursuant
civil case 26044 to compel the appellees herein to litigate to Sec. 6 Rule 63. Although such provision might allow
between themselves their conflicting claims of ownership. such course of action, the respondents did not argue the
It was only after adverse final judgment was rendered point, and we note petitioners' failure to specify the
against it that the remedy of interpleader was invoked by ordinary action they desired. We also cannot reasonably
it. By then it was too late, because to be entitled to this assume that they now seek annulment of the mortgages.
remedy the applicant must be able to show that lie has not Further, the records support the CA’s finding that this
been made independently liable to any of the claimants. issue was not raised before the RTC. The CA therefore
And since the Corporation is already liable to Lee under a properly refused to entertain the issue as it cannot be
final judgment, the present interpleader suit is clearly raised for the first time on appeal.
improper and unavailing. FACTS: Case stemmed from the petition for declaratory
It is the general rule that before a person will be deemed to relief and prohibition with urgent prayer for the issuance
be in a position to ask for an order of intrepleader, he must of a TRO and/or preliminary injunction filed before the
be prepared to show, among other prerequisites, that he RTC by the petitioners against NHMFC (National Home
has not become independently liable to any of the Mortgage Finance Corporation), and HDMF (Home
claimants. Development Mutual Fund). Petitioners speficfially sought
In the case at hand, the Corporation allowed civil case a declaration from RTC for the following:
26044 to proceed to final judgment. And it offered no 1. their right as house and lot buyers to suspend payment
satisfactory explanation for its failure to implead Tan in to Shelter for its failure to fully develop the subdivision
the same litigation. In this factual situation, it is clear that 2. That during the suspention, respondents should not
this interpleader suit cannot prosper because it was filed assess them accrued interest and penalties.
much too late. Petitioners alleged that they obtained housing loans from
Rule 63 (Declaratory Relief) the respondents who released the proceeds to the
16. DBM v Manilas Finest Retirees Association subdivision developer SHELTER (Shelter Phils.). SHELTER
failed to complete the subdivision. Respondents failed to
17. Martelino v NHMF Corp ensure shelter’s completion of the subdivision and ignored
Case stemmed from the petition for declaratory relief and their right to suspend amortization payments, charged
prohibition with urgent prayer for the issuance of a TRO interests and penalties on their outstanding loans and
and/or preliminary injunction filed before the RTC by the initiated foreclosure proceedings against petitioner.
petitioners against NHMFC, and HDMF. Petitioners had The preliminary Injunction hearing with the RTC was set
obtained housing loans from the respondents who but summons and petition were served only to NHMFC
released the proceeds to the subdivision developer and Sheriff Castillo but despite notice the NHMFC failed to
SHELTER who failed to complete the subdivision. attend the hearing.
Respondents failed to ensure shelter’s completion of the RTC issued WPI and restrained respondents from
subdivision and ignored their right to suspend foreclosing the mortgages on petitioners’ houses.
amortization payments, charged interests and penalties on NHMFC filed its Answer with Special and Affirmative
their outstanding loans and initiated foreclosure Defenses. NHMFC filed a Manifestation and Motion to
proceedings against petitioner. A hearing for the Dismiss on the ground that RTC had no jurisdiction over its
preliminary injunction was set but the summons and person/subject matter of the case. The next day HDMF
petition were served only to NHMFC and not HDMF. moved to set aside the WPI order on the ground that it was
Despite the notice NHMFC did not attend the hearing and not notified and that the petition should be filed with
RTC issued WPI, which restrained respondents from HLURB as the case involved the developer’s failure to
foreclosing the mortgages on petitioners’ houses. NHMFC complete the subdivision. Petitioners opposed both
filed its Answer with Special and Affirmative Defenses. NHMFC’s motion to dismiss and HDMF’s motion to set
NHMFC filed a Manifestation and Motion to Dismiss. A day aside. Petitioners’ moved to cite Atty Delos Santos,
after HDMF moved to set aside the WPI order on the manager of HDMF’s Legal department in contempt for
ground that it was not notified and that the case should be foreclosing the mortgage of Rosete and threatening to
filed with HLURB. Petitioners opposed both NHMFC’s pursue similar actions against the petitioners. RTC Issued
motion to dismiss and HDMF’s motion to set aside and an order Granting HDMF’s motion to set aside (because it
moved to cite HDMR’s legal dept. mngr. in contempt. RTC was not notified of the preliminary injunction hearing),
ruled in favor of NHMFC and HDMR. CA affirmed RTC’s Denying the motion to cite Atty. Delos Santos in contempt,
order and also denied petitioner’s motion for granting the NHMFC’s motion to dismiss.
reconsideration. Hence this petition. CA affirmed RTC’s order for the following reasons:
ISSUE/S: WON CA erred in not holding that the petition 1. CA ruled that the writ of preliminary injunction was not
should be converted into an ordinary action assuming that valid against the HDMF since
declaratory relief is not the proper remedy. -- NO HELD:
11
under Section 5, 19 Rule 58 of the Rules of Court, no
preliminary injunction shall be granted without hearing
and prior notice to the party or person sought to be
enjoined. The HDMF was not notified of the hearing and
only appeared before the RTC to object to its jurisdiction
for non-service of summons.
2. CA held that petitioners were not denied due process
because the motions to dismiss and to set aside the RTC’s
Order both raised the issue of jurisdiction and were duly
heard. Petitioners even filed a memorandum.
3. CA did not entertain the issue of whether the petition for
declaratory relief can be converted to an ordinary action
for it was not raised before the RTC. The Court of Appeals
also denied the motion for reconsideration.
ISSUE/S: WON CA erred in not holding that the petition
should be converted into an ordinary action assuming that
declaratory relief is not the proper remedy. -- NO
HELD: In Sec. 1 of Rule 63, it states that a person must file
a petition for declaratory relief before breach or violation
of a deed, will, contract, other written instrument, statue,
EO, regulation, ordinance or any other governmental
regulation. However in this case the petitioners had stated
in their petition that respondents assessed them interest
and penalties on their outstanding loans, initiated
foreclosure proceedings against petitioner Rafael
Martelino as evidenced by the notice of extra-judicial sale
and threatened to foreclose the mortgages of the other
petitioners, all in disregard of their right to suspend
payment to Shelter for its failure to complete the
subdivision. Said statements clearly mean one thing:
petitioners had already suspended paying their
amortization payments. Unfortunately, their actual
suspension of payments defeated the purpose of the action
to secure an authoritative declaration of their supposed
right to suspend payment, for their guidance. Thus, the
RTC could no longer assume jurisdiction over the action
for declaratory relief because its subject initially
unspecified, now identified as P.D. No. 957 and relied upon
— correctly or otherwise — by petitioners, and assumed
by the RTC to be Rep. Act No. 8501, was breached before
filing the action.
The respondent’s act of initiating foreclosure was in
breach of RA 8501 and rendered the action of declaratory
relief improper. It was then suggested by RTC that the
proper remedy is an ordinary civil action and that the CA
should’ve ordered the conversion of the petition pursuant
to Sec. 6 Rule 63. Although such provision might allow
such course of action, the respondents did not argue the
point, and we note petitioners' failure to specify the
ordinary action they desired. We also cannot reasonably
assume that they now seek annulment of the mortgages.
Further, the records support the Court of Appeals' finding
that this issue was not raised before the RTC. The Court of
Appeals therefore properly refused to entertain the issue
as it cannot be raised for
the first time on
appeal.

12