Davao Light v.

Court of Appeals

Facts

The Davao Light and Power Co., Inc. ("Davao Light") filed a collection suit against Queensland Hotel
("Queensland") and Teodorico Adarna ("Adarna") with an ex parte application for a writ of preliminary
attachment. On 3 May 1989, the trial court issued an Order of Attachment, and the corresponding Writ
of Attachment on 11 May 1989. On 12 May 1989, the summons, a copy of the complaint, and the writ of
attachment was served upon Queensland and Adarna. Queensland and Adarna filed a motion to
discharge the attachment on the ground that at the time the Order of Attachment and Writ of
Attachment were issued, the trial court has yet to acquire jurisdiction over the cause of action and over
the persons of the defendants.

Issue

Whether or not the writ of preliminary attachment was validly issued.

Held

Yes. A writ of preliminary attachment may be issued before the court acquires jurisdiction over the
person of the defendant.

Ratio Decidendi

The court may validly issue a writ of preliminary injunction prior to the acquisition of jurisdiction over
the person of the defendant. There is an appreciable period of time between the commencement of the
action (takes place upon the filing of an initiatory pleading) and the service of summons to the
defendant. In the meanwhile, there are a number of actions which the plaintiff or the court may validly
take, including the application for and grant of the provisional remedy of preliminary attachment. There
is nothing in the law which prohibits the court from granting the remedy prior to the acquisition of
jurisdiction over the person of the defendant. In fact, Rule 57 of the Rules of Court allows the granting of
a writ of preliminary injunction at the commencement of the suit. In the cases of Toledo v. Burgos and
Filinvest Credit Corporation v. Relova, it was held that notice and hearing are not prerequisites to the
issuance of a writ of preliminary attachment. Further, in the case of Mindanao Savings & Loan
Association, Inc. v. Court of Appeals, it was ruled that giving notice to the defendant would defeat the
purpose of the remedy by affording him or her the opportunity to dispose of his properties before the
writ can be issued.

A preliminary attachment may be discharged with the same ease as obtaining it. In any case, the ease of
availing the provisional remedy of preliminary attachment is matched by the ease with which it can be
remedied by either the posting of a counterbond, or by a showing of its improper or irregular issuance.
The second means of defeating a preliminary attachement, however, may not be availed of if the writ
was issued upon a ground which is at the same time the applicant's cause of action.
Preliminary attachment not binding until jurisdiction over the person of the defendant is acquired. The
writ of preliminary attachment, however, even though validly issued, is not binding upon the defendant
until jurisdiction over his person is first acquired.

FACTS:

Petitioner filed a complaint for damages before the RTC of Cebu City against private respondent
Francisco Tesorero.

The trial court ruled that as alleged in the complaint and which for purposes of venue is considered,
Banilad, Cebu City is the plaintiffs principal place of business.

Private respondent filed a Motion to Dismiss on the ground of improper venue. The motion to dismiss
alleged and submitted that the principal office of plaintiff is in Davao City.

The trial court opined that the principal office of plaintiff is in Davao City, which, for purposes of venue,
is the residence of plaintiff.

Petitioner’s MR was denied.

Petitioner filed a petition for review on certiorari which was denied due course and dismissed by the CA.

Without filing a motion for reconsideration, petitioner filed the instant petition, assailing the judgment
of the CA.

It is private respondents contention that the proper venue is Davao City, and not Cebu City where
petitioner filed the civil case for damages. Private respondent argues that petitioner is estopped from
claiming that its residence is in Cebu City, in view of contradictory statements made by petitioner prior
to the filing of the action for damages.

ISSUE:

Distinguish venue from jurisdiction.

RULING:

Venue and jurisdiction are entirely distinct matters. Jurisdiction may not be conferred by consent or
waiver upon a court which otherwise would have no jurisdiction over the subject-matter of an action;
but the venue of an action as fixed by statute may be changed by the consent of the parties and an
objection that the plaintiff brought his suit in the wrong county may be waived by the failure of the
defendant to make a timely objection. In either case, the court may render a valid judgment. Rules as to
jurisdiction can never be left to the consent or agreement of the parties, whether or not a prohibition
exists against their alteration.

As held by this Court in Young Auto Supply Co. v. CA, in the Regional Trial Courts, all personal actions are
commenced and tried in the province or city where the defendant or any of the defendants resides or
may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff.

3) Emmanuel Oñate and Econ Holdings Corporation v Abrogar and Sunlife Insurance Company of Canada
G.R. No. 107303 February 21, 1994

MARCH 16, 2014LEAVE A COMMENT

Section 10 Rule 57 is not incompatible with Republic Act No. 1405, as amended, (Bank Deposits Secrecy
Law) for Section 2 therefor provides an exception “in cases where the money deposited or invested is
the subject matter of the litigation. The examination of the bank records is not a fishing expedition, but
rather a method by which Sun Life could trace the proceeds of the check it paid to petitioners.

Facts: Sun Life Assurance Company of Canada (Sun Life) filed a complaint for a sum of money with a
prayer for the immediate issuance of a writ of attachment against petitioners and Noel L. Diño at Branch
150 of the RTC Makati, presided over by respondent Judge. The following day, respondent Judge
Abrogar issued an order granting the issuance of a writ of attachment.

Upon Sun Life’s ex-parte motion, the trial court amended the writ of attachment to reflect the alleged
amount of the indebtedness. That same day, Deputy Sheriff Flores, accompanied by a representative of
Sun Life, attempted to serve summons and a copy of the amended writ of attachment upon petitioners
at their known office address in Makati but was not able to do so since there was no responsible officer
to receive the same. Nonetheless, Sheriff Flores proceeded over a period of several days to serve notices
of garnishment upon several commercial banks and financial institutions, and levied on attachment a
condominium unit and a real property belonging to petitioner Oñate. ECON filed an “Urgent Motion to
Discharge/Dissolve Writ of Attachment.” That same day, Sun Life filed an ex-parte motion to examine
the books of accounts and ledgers of petitioner Brunner Development Corporation (Brunner) at the
Urban Bank, Legaspi Village Branch, and to obtain copies thereof, which motion was granted by
respondent Judge. The examination of said account took place on January 23, 1992. Petitioners filed a
motion to nullify the proceedings taken thereat since they were not present.

ECON and their co-defendants filed a memorandum in support of the motion to discharge attachment.
Also on that same day, Sun Life filed another motion for examination of bank accounts, this time seeking
the examination of Account No. 0041-0277-03 with the Bank of Philippine Islands (BPI) — which,
incidentally, petitioners claim not to be owned by them — and the records of Philippine National Bank
(PNB) with regard to checks payable to Brunner. Sun Life asked the court to order both banks to comply
with the notice of garnishment.

On February 6, 1992, respondent Judge issued an order (1) denying petitioners’ and the co-defendants’
motion to discharge the amended writ of attachment, (2) approving Sun Life’s additional attachment, (3)
granting Sun Life’s motion to examine the BPI account, and (4) denying petitioners’ motion to nullify the
proceedings. Petitioners’ assail the acts of respondent Judge in allowing the examination of Urban
Banks’ records and in ordering that the examination of the bank records of BPI and PNB as invalid since
no notice of said examinations were ever given them.

Issue:

1) Whether or not respondent Judge had acted with grave abuse of discretion in issuing ex parte the
original and amended writs of preliminary attachment and the corresponding notices of garnishment
and levy on attachment pending acquisition of the jurisdiction of the RTC.

2) Whether or not respondent Judge had acted with grave abuse of discretion amounting to lack or in
excess of jurisdiction in allowing the examination of the bank records though no notice was given to
them.

Held:

1) Whether or not respondent Judge had acted with grave abuse of discretion in issuing ex parte the
original and amended writs of preliminary attachment and the corresponding notices of garnishment
and levy on attachment pending acquisition of the jurisdiction of the RTC.

No. It is clear from the provision of Section 10, Rule 57 (ROC) that notice need only be given to the
garnishee, but the person who is holding property or credits belonging to the defendant. The provision
does not require that notice be furnished the defendant himself, except when there is a need to
examine said defendant “for the purpose of giving information respecting his property. Furthermore,
Section 10 Rule 57 is not incompatible with Republic Act No. 1405, as amended, (Bank Deposits Secrecy
Law) for Section 2 therefor provides an exception “in cases where the money deposited or invested is
the subject matter of the litigation. The examination of the bank records is not a fishing expedition, but
rather a method by which Sun Life could trace the proceeds of the check it paid to petitioners.

2) Whether or not respondent Judge had acted with grave abuse of discretion amounting to lack or in
excess of jurisdiction in allowing the examination of the bank records though no notice was given to
them.

It is well-settled that a writ of preliminary attachment may be validly applied for and granted even
before the defendant is summoned or is heard from. A preliminary attachment may be defined as the
provisional remedy in virtue of which a plaintiff or other proper party may, at the commencement of the
action or any time thereafter, have the property of the adverse party taken into the custody of the court
as security for the satisfaction of any judgment that may be recovered. It is a remedy which is purely
statutory in respect of which the law requires a strict construction of the provisions granting it. Withal
no principle, statutory or jurisprudential, prohibits its issuance by any court before acquisition of
jurisdiction over the person of the defendant.

It cannot be disputed that petitioners principal office is in Cebu City, per its amended articles of
incorporation and by-laws.

An action for damages being a personal action, venue is determined pursuant to Rule 4, section 2 of the
Rules of Court, to wit:

Venue of personal actions.All other actions may be commenced and tried where the plaintiff or any of
the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, or in
the case of a non-resident defendant where he may be found, at the election of the plaintiff.

Private respondent is not a party to any of the contracts presented before us. He is a complete stranger
to the covenants executed between petitioner and NAPOCOR, despite his protestations that he is privy
thereto, on the rather flimsy ground that he is a member of the public for whose benefit the electric
generating equipment subject of the contracts were leased or acquired.

We are likewise not persuaded by his argument that the allegation or representation made by petitioner
in either the complaints or answers it filed in several civil cases that its residence is in Davao City should
estop it from filing the damage suit before the Cebu courts. Besides there is no showing that private
respondent is a party in those civil cases or that he relied on such representation by petitioner.

WATERCRAFT VENTURE CORP. v. ALFRED RAYMOND WOLFE G.R. No. 181721 September 09, 2015
PERALTA, J.: RULE 57 – PRELIMINARY ATTACHMENT FACTS Petitioner Watercraft Venture Corporation
(Watercraft) is engaged in the business of building, repairing, storing and maintaining yachts, boats and
other pleasure crafts at the Subic Bay Freeport Zone, Subic, Zambales. It hired respondent Alfred
Raymond Wolfe (Wolfe), a British national and resident of Subic Bay Freeport Zone, Zambales, as its
Shipyard Manager. During his employment, Wolfe stored the sailboat, Knotty Gull, within Watercraft1’s
boat storage facilities, but never paid for the storage fees. Later on, Watercraft terminated Wolfe’s
employment. Sometime in June 2002, Wolfe pulled out his sailboat from Watercraft's storage facilities
after signing a Boat Pull-Out Clearance where he allegedly acknowledged the outstanding obligation of
US$16,324.82 representing unpaid boat storage fees. Despite repeated demands, he failed to pay the
said amount. Thus, Watercraft filed a Complaint for Collection of Sum of Money with Damages with an
Application for the Issuance of a Writ of Preliminary Attachment. Wolfe on the other hand, claimed that
he was hired as Service and Repair Manager, instead of Shipyard Manager and denied owing Watercraft
the amount of US$16,324.82. He explained that the sailboat was purchased in February 1998 as part of
an agreement betwe en him and Watercraft1’s then General Manager and President for repair and be
used as training or fill-in project for the staff, and to be sold later on. RTC granted Watercraft’s
application for Writ of Preliminary Preliminary attachment. CA on the other hand, granted Wolfe’s
petition, annulling and setting aside the Writ of attachment, attachment, and declaring null and void the
Notice of attachment and levy. ISSUE WON the allegations of fraud are sufficient to warrant the ex-parte
issuance of the Writ of Preliminary Attachment in favor of Petitioner Watercraft. HELD A writ of
preliminary attachment is defined as a provisional remedy issued upon order of the court where an
action is pending to be levied upon the property or properties of the defendant therein, the same to be
held thereafter by the sheriff as security for the satisfaction of whatever judgment that might be
secured in the said action by the attaching creditor against the defendant. For the issuance of an ex-
parte issuance of the preliminary attachment to be valid, an affidavit of merit and an applicant's bond
must be filed with the court in which the action is pending. Such bond executed to the adverse party in
the amount fixed by the court is subject to the conditions that the applicant will pay: 1. All costs which
may be adjudged to the adverse party; and 2. All damages which such party may sustain by reason of
the attachment, if the court shall finally adjudge that the applicant was not entitled thereto. As to the
requisite affidavit of merit, Section 3 Rule 57 of the Rules of Court states that an order of attachment
shall be granted only when it appears in the affidavit of the applicant, or of some other person who
personally knows the facts: 1. that a sufficient cause of action exists; 2. that the case is one of those
mentioned in Section 1[17] hereof; 3. that there is no other sufficient security for the claim sought to be
enforced by the action; and 4. that the amount due to the applicant, or the value of the property the
possession of which he is entitled to recover, is as much as the sum for which the order is granted above
all legal counterclaims. The mere filing of an affidavit reciting the facts required by Section 3, Rule 57,
however, is not enough to compel the judge to grant the writ of preliminary attachment. The sufficiency
or insufficiency of an affidavit depends upon the amount of credit given it by the judge, and its
acceptance or rejection, upon his sound discretion. Watercraft failed to state with particularity the
circumstances constituting fraud, as required by Section 5 Rule 8 of the Rules of Court, and that Wolfe's
mere failure to pay the boat storage fees does not necessarily amount to fraud, absent any showing that
such failure was due to insidious machinations and intent on his part to defraud Watercraft of the
amount due it. Watercraft's Affidavit of Preliminary Attachment does not contain specific allegations of
other factual circumstances to show that Wolfe, at the time of contracting the obligation, had a
preconceived plan or intention not to pay. Neither can it be inferred from such affidavit the particulars
of why he was guilty of fraud in the performance of such obligation. DISPOSITIVE PORTION WHEREFORE,
premises considered, the petition is DENIED. The Court of Appeals Decision dated September 27, 2007
and its Resolution dated January 24, 2008 in CA-G.R. SP No. 97804, are AFFIRMED.

5) Megaworld v Majestic Finance

Facts: On September 23, 1994, Megaworld Properties and Holdings, Inc. (developer) entered into a Joint
Venture Agreement (JVA)4 with Majestic Finance and Investment Co., Inc. (owner) for the development
of the residential subdivision located in Brgy. Alingaro, General Trias, Cavite. According to the JVA, the
development of the 215 hectares of land belonging to the owner (joint venture property) would be for
the sole account of the developer;5 and that upon completion of the development of the subdivision,
the owner would compensate the developer in the form of saleable residential subdivision lots.6 The
JVA further provided that the developer would advance all the costs for the relocation and resettlement
of the occupants of the joint venture property, subject to reimbursement by the owner;7 and that the
developer would deposit the initial amount of P10,000,000.00 to defray the expenses for the relocation
and settlement, and the costs for obtaining from the Government the exemptions and conversion
permits, and the required clearances.

On September 24, 1994, the developer and owner agreed, through the addendum to the JVA,9 to
increase the initial deposit for the settlement of claims and the relocation of the tenants from
P10,000,000.00 to P60,000,000.00. On October 27, 1994, the developer, by deed of assignment,10
transferred, conveyed and assigned to Empire East Land Holdings, Inc. (developer/assignee) all its rights
and obligations under the JVA including the addendum.

On February 29, 2000, the owner filed in the RTC a complaint for specific performance with damages
against the developer, the developer/assignee, and respondent Andrew Tan, who are now the
petitioners herein. It was mainly based on the failure of the petitioners to comply with their obligations
under the JVA, including the obligation to maintain a strong security force to safeguard the entire joint
venture property of 215 hectares from illegal entrants and occupants.

At the conclusion of the pre-trial conference set by the RTC, the presentation of the owner's evidence
was suspended because of the parties' manifestation that they would settle the case amicably. It
appears that the parties negotiated with each other on how to implement the JVA and the addendum.

the owner filed in the RTC a manifestation and motion,12 praying therein that the petitioners be
directed to provide round-the-clock security for the joint venture property in order to defend and
protect it from the invasion of unauthorized persons. The petitioners opposed the manifestation and
motion,13 pointing out that: (1) the move to have them provide security in the properties was
premature; and (2) under the principle of reciprocal obligations, the owner could not compel them to
perform their obligations under the JVA if the owner itself refused to honor its obligations under the JVA
and the addendum.

The RTC rendered decision directing developer to provide round-the-clock security protection of the
joint venture property (Nov. 5, 2002 decision). CA dismissed the petition.

Issue: Whether or not the petitioners are obligated to perform their obligations under the JVA, including
that of providing round-the-clock security for the subject properties, despite respondents' failure or
refusal to acknowledge, or perform their reciprocal obligations there

Held: The appeal is meritorious. The CA erred in upholding the November 5, 2002 order of the RTC.

The obligations of the parties under the JVA were unquestionably reciprocal. Reciprocal obligations are
those that arise from the same cause, and in which each party is a debtor and a creditor of the other at
the same time, such that the obligations of one are dependent upon the obligations of the other. They
are to be performed simultaneously, so that the performance by one is conditioned upon the
simultaneous fulfillment by the other.

According to Article 1184 of the Civil Code, the condition that some event happen at a determinate time
shall extinguish the obligation as soon as the time expires, or if it has become indubitable that the event
will not take place. Here, the common cause of the parties in entering into the joint venture was the
development of the joint venture property into the residential subdivision as to eventually profit
therefrom. Consequently, all of the obligations under the JVA were subject to the happening of the
complete development of the joint venture property, or if it would become indubitable that the
completion would not take place, like when an obligation, whether continuous or activity, was not
performed. Should any of the obligations, whether continuous or activity, be not performed, all the
other remaining obligations would not ripen into demandable obligations while those already
performed would cease to take effect. This is because every single obligation of each party under the
JVA rested on the common cause of profiting from the developed subdivision.

It appears that upon the execution of the JVA, the parties were performing their respective obligations
until disagreement arose between them that affected the subsequent performance of their accrued
obligations. Being reciprocal in nature, their respective obligations as the owner and the developer were
dependent upon the performance by the other of its obligations; hence, any claim of delay or non-
performance against the other could prosper only if the complaining party had faithfully complied with
its own correlative obligation.
Yet, the record is bereft of the proof to support the lower courts' unanimous conclusion that the owner
had already performed its correlative obligation under the JVA as to place itself in the position to
demand that the developer should already perform its obligation of providing the round-the-clock
security on the property. In issuing its order of November 5, 2002, therefore, the RTC acted whimsically
because it did not first ascertain whether or not the precedent reciprocal obligation of the owner upon
which the demanded obligation of the developer was dependent had already been performed. Without
such showing that the developer had ceased to perform a continuous obligation to provide security over
the joint venture property despite complete fulfillment by the owner of all its accrued obligations, the
owner had no right to demand from the developer the round-the-clock security over the 215 hectares of
land.

6) Carpio-Morales vs. Binay, G.R. No. 217126-27, Nov. 10, 2015 (Digest on RA 6770)

Posted on August 31, 2016

Carpio-Morales vs. Binay, G.R. No. 217126-27, Nov. 10, 2015

(RE: Validity of 1st and 2nd paragraphs of RA 6770)

FACTS:

– The Ombudsman’s argument against the CA’s lack of subject matter jurisdiction over the main
petition, and her corollary prayer for its dismissal, is based on her interpretation of Section 14, RA 6770,
or the Ombudsman Act, which reads in full:

Section 14. Restrictions. – No writ of injunction shall be issued by any court to delay an investigation
being conducted by the Ombudsman under this Act, unless there is a prima facie evidence that the
subject matter of the investigation is outside the jurisdiction of the Office of the Ombudsman.

No court shall hear any appeal or application for remedy against the decision or findings of the
Ombudsman, except the Supreme Court, on pure question of law.

– The Ombudsman’s maintains that the first paragraph of Section 14, RA 6770 textually prohibits courts
from extending provisional injunctive relief to delay any investigation conducted by her office. Despite
the usage of the general phrase “[n]o writ of injunction shall be issued by any court,” the Ombudsman
herself concedes that the prohibition does not cover the Supreme Court.

ISSUE:
Are the first and second paragraphs of Sec. 14 of R.A. No. 6770, valid and constitutional?

RULING: The first paragraph is declared INEFFECTIVE until the Court adopts the same as part of the rules
of procedure through an administrative circular duly issued; The second paragraph is declared
UNCONSTITUTIONAL AND INVALID.

The Court rules that when Congress passed the first paragraph of Section 14, RA 6770 and, in so doing,
took away from the courts their power to issue a TRO and/or WPI to enjoin an investigation conducted
by the Ombudsman, it encroached upon this Court’s constitutional rule-making authority. Through this
provision, Congress interfered with a provisional remedy that was created by this Court under its duly
promulgated rules of procedure, which utility is both integral and inherent to every court’s exercise of
judicial power. Without the Court’s consent to the proscription, as may be manifested by an adoption of
the same as part of the rules of procedure through an administrative circular issued therefor, there thus,
stands to be a violation of the separation of powers principle.

In addition, it should be pointed out that the breach of Congress in prohibiting provisional injunctions,
such as in the first paragraph of Section 14, RA 6770, does not only undermine the constitutional
allocation of powers; it also practically dilutes a court’s ability to carry out its functions. This is so since a
particular case can easily be mooted by supervening events if no provisional injunctive relief is extended
while the court is hearing the same.

Since the second paragraph of Section 14, RA 6770 limits the remedy against “decision or findings” of
the Ombudsman to a Rule 45 appeal and thus – similar to the fourth paragraph of Section 27, RA 6770-
attempts to effectively increase the Supreme Court’s appellate jurisdiction without its advice and
concurrence, it is therefore concluded that the former provision is also unconstitutional and perforce,
invalid. Contrary to the Ombudsman’s posturing, Fabian should squarely apply since the above-stated
Ombudsman Act provisions are in part materia in that they “cover the same specific or particular subject
matter,” that is, the manner of judicial review over issuances of the Ombudsman.

Note that since the second paragraph of Section 14, RA 6770 is clearly determinative of the existence of
the CA’s subject matter jurisdiction over the main CA-G.R. SP No. 139453 petition, including all
subsequent proceedings relative thereto, as the Ombudsman herself has developed, the Court deems it
proper to resolve this issue ex mero motu (on its own motion):

Constitutional questions, not raised in the regular and orderly procedure in the trial are ordinarily
rejected unless the jurisdiction of the court below or that of the appellate court is involved in which case
it may be raised at any time or on the court’s own motion. The Court ex mero motu may take
cognizance of lack of jurisdiction at any point in the case where that fact is developed. The court has a
clearly recognized right to determine its own jurisdiction in any proceeding.