G.R. No. 164459 - Limitless Potentials, Inc. vs. Court of Appeals

On 12 October 1995, Digital Networks Communications and Computers, Inc. (Digital) and Limitless Potentials, Inc. (LPI) entered into a one-year billboard advertisement contract at ₱60,000/month plus VAT. Digital paid a three-month deposit (₱60,000+VAT upon signing; ₱120,000+VAT upon completion).
The billboard was destroyed by unknown persons. LPI treated the contract as terminated and refused to return two months’ deposit. Digital sued LPI in Makati MeTC (Civil Case No. 55170) on 18 April 1997 for return of deposit and attorney’s fees.

On 18 June 1997, LPI filed a Third-Party Complaint against Macgraphics Carranz Int’l Corp. and private respondents Bishop Crisostomo Yalung and Atty. Roy Villasor. LPI alleged that respondents maliciously dismantled the billboard to favor Macgraphics. LPI sought moral, exemplary, nominal damages, attorney’s fees, litigation expenses, and costs.
Respondents moved to dismiss for litis pendentia, lack of cause of action, forum shopping, and lack of privity. MeTC denied both motions (25 August and 10 October 1997 orders).

Respondents filed an RTC petition for certiorari with prayer for preliminary injunction. RTC granted preliminary injunction on 6 February 1998, enjoining MeTC from hearing the Third-Party Complaint upon ₱10,000 bond.
On 28 April 2000, RTC dismissed respondents’ certiorari petition, dissolved the injunction, denied motions for reconsideration, and refused LPI’s motion for judgment against the bond (₱74,375 attorney’s fees; ₱1,000,000 moral damages).
LPI filed a Rule 65 petition before the Court of Appeals (CA) assailing the April and August 2002 RTC orders. CA initially dismissed for lack of proof of authorization, then reinstated the petition, but on 16 September 2003 dismissed it for lack of merit and on 8 July 2004 denied reconsideration. LPI filed a Rule 45 petition before the Supreme Court.

Is malice or bad faith a condition sine qua non for liability on an injunction bond?
Do attorney’s fees, litigation costs, and cost of delay by reason of the injunction fall within the coverage of the injunction bond?
Did LPI comply with the mandatory certification on non-forum shopping under Rule 7, Section 5, 1997 Rules of Civil Procedure?