Case Summary (G.R. No. 203240)
Factual Background
Northern Islands Co., Inc. (petitioner) filed a civil complaint with an application for a writ of preliminary attachment against the respondents for non-payment of appliances delivered worth approximately ₱8,040,825.17. Delivery was allegedly accepted in good order by the respondents’ representatives, with an agreement that payment was due within 120 days, subject to 18% annual interest on unpaid amounts. Despite repeated demands, respondents allegedly failed to pay and allegedly challenged receipt of the goods. The petitioner posted a bond in the amount corresponding to the value of the goods to secure the attachment, which the RTC granted on November 7, 2005.
Procedural History Before the RTC
Respondents initially sought an extension to file proper pleadings and to conduct discovery to examine originals of delivery and invoice documents. Subsequently, respondents moved to discharge the attachment, asserting that the attachment exceeded the proper amount by approximately ₱9,232,564.56 based on their appraiser's assessment. The RTC denied the motion for extension and directed respondents to file their answer, which they did, but continued to seek discovery. The RTC denied the motion to discharge the excess attachment, finding the appraisal unreliable and the bond posted by petitioner sufficient security. The RTC granted discovery, but further production was not made due to procedural and timing issues.
Respondents filed a motion for partial reconsideration asking for the appointment of a commissioner to ascertain the true value of the attached properties under Rule 32 of the Rules of Court and to modify the discovery order to produce original documents. The RTC denied this motion citing lack of merit.
Appeal and the Court of Appeals (CA) Proceedings
Respondents filed a certiorari petition before the CA to challenge the denial of their motion to discharge excess attachment and appointment of a commissioner. Meanwhile, the RTC dismissed the petitioner's amended complaint in the main case for failure to prove agreed pricing, and Northern Islands filed a timely appeal to the CA. The RTC ordered the elevation of entire case records to the CA. Respondents did not appeal.
The CA, via decision dated January 19, 2012, partially granted respondents’ certiorari petition and ordered the RTC to appoint a commissioner under Rule 32 to determine the actual value of the attached properties and discharge any excess attachment. The CA also denied respondents’ motion for discovery of originals given the petitioner’s lack of possession. The petitioner’s motion for reconsideration was denied by the CA.
Issues Presented
- Whether the RTC lost jurisdiction over the preliminary attachment matter following the perfection of petitioner's appeal and elevation of the records to the CA.
- Whether the CA erred in ordering the appointment of a commissioner and subsequent discharge of any excessive attachment.
Court’s Analysis on Jurisdiction
The Supreme Court affirmed that under Section 9, Rule 41 of the Rules of Court, once an appeal is perfected by timely filing the notice and paying docket fees—and the other party’s time to file an appeal lapses—the trial court loses jurisdiction over the case and all ancillary matters. Northern Islands duly perfected its appeal; respondents did not. Therefore, the RTC ceased to have jurisdiction over the main case.
The Court further emphasized that preliminary attachment is an ancillary matter and cannot be treated as a separate action independent from the main case, citing Spouses Olib v. Judge Pastoral (1990). The attachment is a provisional remedy serving as security for the principal action and must stand or fall with the main case. Consequently, when the main case is appealed, the case-related preliminary attachments also fall outside the jurisdiction of the trial court.
Conclusion on the CA Orders
Because the RTC lost jurisdiction over both the main case and the ancillary preliminary attachment matter upon the appeal, the Court found the CA erred in ordering the appointment of a commissioner to determine excess attachment. The Court held that such trial-by-commissioner proceedings were no longer proper or effective.
Given the loss of jurisdiction, the Court deemed it unnecessary to discuss other issues raised and granted the petition, setting aside the CA
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Case Syllabus (G.R. No. 203240)
Facts of the Case
- On September 23, 2005, petitioner Northern Islands Co., Inc. filed a Complaint with an application for writ of preliminary attachment before the Regional Trial Court (RTC) of Quezon City, Branch 215, docketed as Civil Case No. Q-05-53699, later amended on October 25, 2005.
- The complaint alleged that from March to July 2004, petitioner delivered various appliances totaling Php 8,040,825.17 to respondents.
- Delivery was made by Sulpicio Lines, Inc., and accepted in good order by the respondents' representatives.
- The parties agreed payment terms of 120 days with an 18% per annum interest on unpaid amounts.
- Respondents allegedly failed to pay for the goods despite repeated demands and fraudulently claimed lack of proof of receipt.
- A bond in the amount of Php 8,040,825.17 was posted by petitioner through Visayan Surety and Insurance Corporation.
- The RTC issued the writ of preliminary attachment on November 7, 2005.
- Instead of answering the complaint, respondents filed motions for extension of time to file pleadings and for discovery, seeking to examine original invoices and shipping documents, asserting necessity to intelligently answer.
- On January 11, 2006, respondents filed a Motion to Discharge Excess Attachment, alleging that the total value of attached properties was Php 17,273,409.73, exceeding the bond amount.
- The RTC denied respondents’ motion for extension of time and instructed them to file their answer, which they did on April 3, 2006.
- Respondents again filed a Motion for Discovery on April 7, 2006.
Rulings by the Regional Trial Court (RTC)
- In an Order dated June 21, 2006, the RTC denied the Motion to Discharge Excess Attachment, finding that respondents' appraiser's valuation was not reflective of true value.
- The court held the bond posted by petitioner sufficient security for damages arising from the attachment.
- The RTC granted respondents’ Motion for Discovery under Rule 27 of the Rules of Court, despite petitioner’s claim it did not possess the original documents sought.
- No inspection was conducted on July 10, 2006, due to respondents receiving the order late.
- Respondents moved for partial reconsideration to refer to a commissioner the determination of the value of attached properties and to compel petitioner to produce original documents.
- The RTC denied this mo