G.R. No. 203240. March 18, 2015.

*
 
NORTHERN ISLANDS CO., INC., petitioner,  vs.SPOUSES DENNIS and
*
CHERYLIN *  GARCIA, doing business under the name and style “Ecolamp Multi Resources,”
respondents.

Remedial Law; Civil Procedure; Appeals; Notice of Appeal; Section 9, Rule 41 of the Rules of Court
provides that in appeals by notice of appeal, the court loses jurisdiction over the case upon the perfection of
the appeals filed in due time and the expiration of the time to appeal of the other parties.—Section 9, Rule 41
of the Rules of Court provides that in appeals by notice of appeal, the court loses jurisdiction over
the case upon the perfection of the appeals filed in due time and the expiration of the time to
appeal of the other parties.
Same; Provisional Remedies; Attachment; Note that in  Sps. Olib  v.  Judge Pastoral,  188 SCRA 692
(1990), the Supreme Court (SC), in view of the nature of a preliminary attachment, definitively ruled that the
attachment itself cannot be the subject of a separate

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*  FIRST DIVISION.
* * “Cherrylyn” and “Cherilyn” in some parts of the Rollo.

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Northern Islands Co., Inc. vs. Garcia

action independent of the principal action because the attachment was only an incident of such action.—
Note that in  Sps. Olib  v.  Judge Pastoral, 188 SCRA 692 (1990), the Court, in view of the nature of a
preliminary attachment, definitively ruled that the attachment itself cannot be the subject of a separate
action independent of the principal action because the attachment was only an incident of such action, viz.:
Attachment is defined as a provisional remedy by which the property of an adverse party is taken into legal
custody, either at the commencement of an action or at any time thereafter, as a security for the satisfaction
of any judgment that may be recovered by the plaintiff or any proper party. It is an auxiliary remedy and
cannot have an independent existence apart from the main suit or claim instituted by the plaintiff against
the defendant. Being merely ancillary to a principal proceeding, the attachment must fail if the
suit itself cannot be maintained as the purpose of the writ can no longer be justified. The
consequence is that where the main action is appealed, the attachment which may have been issued as an
incident of that action, is also considered appealed and so also removed from the jurisdiction of the court a
quo.  The attachment itself cannot be the subject of a separate action independent of the
principal action because the attachment was only an incident of such action.

PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
  Zamora, Poblador, Vasquez & Bretaña for petitioner.
  The Law Firm of Batara, Lansang and Partners and Associates  for respondents Spouses
Garcia.

 
PERLAS-BERNABE, J.:
 
 Assailed in this petition for review on certiorari1 are the

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1  Rollo, pp. 3-23.

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Decision2 dated January 19, 2012 and the Resolution3dated August 24, 2012 of the Court of
Appeals (CA) in C.A.-G.R. S.P. No. 97448, ordering the Regional Trial Court of Quezon City,
Branch 215 (RTC) to appoint a commissioner to determine the value of the attached properties of
respondents Spouses Dennis and Cherylin Garcia (respondents), and to discharge any excessive
attachment found thereby.
 
The Facts
 
On September 23, 2005, petitioner Northern Islands Co., Inc. (petitioner) filed a
Complaint4  with application for a writ of preliminary attachment, before the RTC against
respondents, docketed as Civil Case No. Q-05-53699 (Main Case), which was subsequently
amended5 on October 25, 2005.6 It alleged that: (a) from March to July 2004, petitioner caused
the delivery to respondents of various appliances in the aggregate amount of P8,040,825.17;7 (b)
the goods were transported, shipped, and delivered by Sulpicio Lines, Inc., and were accepted in
good order and condition by respondents’ representatives;8 (c) the parties agreed that the goods
delivered were payable within 120 days, and that the unpaid amounts would earn interest at a
rate of eighteen percent (18%) per

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2  Id., at pp. 29-47. Penned by Associate Justice Romeo F. Barza, with Associate Justices Noel G. Tijam and Edwin D.
Sorongon, concurring.
3  Id., at pp. 49-50. Penned by Associate Justice Romeo F. Barza, with Associate Justices Noel G. Tijam and Edwin D.
Sorongon, concurring.
4  Not attached to the Rollo.
5  See Amended Complaint (with Ex Parte Application for Issuance of Writ of Preliminary Attachment) dated October
17, 2002; Rollo, pp. 82-89.
6  Id., at p. 30.
7  Id., at p. 83.
8  Id.

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Northern Islands Co., Inc. vs. Garcia

annum;9  (d) however, the value of the goods were not paid by respondents despite repeated
demands;10 and (e) respondents fraudulently asserted that petitioner had no proof that they had
indeed received the quantity of the subject goods.11
 In connection with the application for a writ of preliminary attachment, petitioner posted a
bond, through Visayan Surety and Insurance Corporation, in the amount of P8,040,825.17. On
November 7, 2005, the RTC issued the writ sought for.12
Instead of filing an answer, respondents filed on November 11, 2001, an Urgent Motion for
Extension of Time to File Proper Pleading and Motion for Discovery (Production and
Inspection)13  (November 11, 2001 Motion), asking the RTC to allow them to photocopy and
personally examine the original invoices, delivery cargo receipts, and bills of lading attached to
the Amended Complaint, claiming that they could not “come up with an intelligent answer”
without being presented with the originals of such documents.14
Thereafter, or on January 11, 2006, respondents filed a Motion to Discharge Excess
Attachment,15  alleging that the attachment previously ordered by the RTC exceeded by
P9,232,564.56 given that the estimated value of the attached properties, including the garnished
bank accounts, as assessed by their appraiser, Gaudioso W. Lapaz (Lapaz), amounted to
P17,273,409.73, while the attachment bond is only in the amount of P8,040,825.17.16

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9   Id.
10  Id., at p. 84.
11  Id., at p. 86.
12  Id., at pp. 30-31.
13  Not attached to the Rollo.
14  Rollo, p. 31.
15  Dated January 11, 2006. Id., at pp. 91-102.
16  Id., at p. 32.

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In an Order17 dated February 28, 2006, the RTC denied the November 11, 2001 Motion, and,
instead, directed respondents to file their answer, which the latter complied with through the
filing of their Answer  Ad Cautelam Ex Abudante  with Compulsory Counterclaim18  on April 3,
2006. Despite this, respondents again filed a Motion for Leave of Court to File Motion for
Discovery (Production and Inspection)19 (Motion for Discovery) on April 7, 2006.20
 
The RTC’s Ruling
 
In an Order21 dated June 21, 2006, the RTC, among others, denied the Motion to Discharge
Excess Attachment, finding that the appraisal made by Lapaz was not reflective of the true
valuation of the properties, adding too that the bond posted by petitioner stands as sufficient
security for whatever damages respondents may sustain by reason of the attachment.22
On the other hand, the RTC granted the Motion for Discovery in accordance with Rule 27 of
the Rules of Court, despite petitioner’s claim that it did not have the originals of the documents
being sought.23
However, no production or inspection was conducted on July 10, 2006 as the RTC directed
since respondents received the copy of the above order only on July 11, 2006.24
On July 25, 2006, respondents filed a Motion for Partial Reconsideration of the Order dated
June 21, 2006, specifically
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17  Not attached to the Rollo.

18  Id.
19  Id.
20  Rollo, pp. 8-9 and 32.
21  Id., at pp. 137-139. Penned by Judge Ma. Luisa C. Quijano-Padilla.
22  Id., at p. 138.
23  Id.
24  Id., at p. 33.

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Northern Islands Co., Inc. vs. Garcia

assailing the denial of their Motion to Discharge Excess Attachment. In this relation, they
prayed that the RTC refer to a commissioner, pursuant to Rule 32 of the Rules of Court, the
factual determination of the total aggregate amount of respondents’ attached properties so as to
ascertain if the attachment was excessive. Also, they prayed that the order for production and
inspection be modified and that petitioner be ordered to produce the original documents anew for
their inspection and copying.25
The foregoing motion was, however, denied by the RTC in an Order26 dated August 23, 2006
for lack of merit. Thus, respondents elevated the matter to the CA  viapetition
for certiorari and mandamus,27 docketed as C.A.-G.R. S.P. No. 97448 (Certiorari Case).
In the interim, the RTC rendered a Decision28  dated September 21, 2011 in the Main Case.
Essentially, it dismissed petitioner’s Amended Complaint due to the absence of any evidence to
prove that respondents had agreed to the pricing of the subject goods.29
The RTC’s September 21, 2011 Decision was later appealed30 by petitioner before the CA on
October 27, 2011. Finding that the Notice of Appeal was seasonably filed, with the payment of the
appropriate docket fees, the RTC, in an Order31 dated January 25, 2012, ordered the elevation of
the entire records of the Main Case to the CA. The appeal was then raffled to the CA’s Eighth
Division, and docketed as

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25  Id., at pp. 33-34.

26  Id., at p. 140.
27  Erroneously titled as a petition for review on certiorari dated December 15, 2006. Id., at pp. 141-174.
28  Id., at pp. 62-76. Penned by Judge Ma. Luisa C. Quijano-Padilla.
29  Id., at p. 72.
30  Dated October 24, 2011. Id., at pp. 267-269.
31  Id., at pp. 81 and 271.

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Northern Islands Co., Inc. vs. Garcia

C.A.-G.R. CV No. 98237. On the other hand, records do not show that respondents filed any
appeal.32
 
The CA’s Ruling in the Certiorari Case
 
Meanwhile, the CA, in a Decision33  dated January 19, 2012, partly granted
the certiorari  petition of respondents, ordering the RTC to appoint a commissioner as provided
under Rule 32 of the Rules of Court as well as the subsequent discharge of any excess attachment
if so found therein, and, on the other hand, denying respondents’ Motion for Discovery.34
It held that: (a) on the issue of attachment, trial by commissioners under Rule 32 of the Rules
of Court was proper so that the parties may finally settle their conflicting valuations;35 and (b) on
the matter of discovery, petitioner could not be compelled to produce the originals sought by
respondents for inspection since they were not in the former’s possession.36
Aggrieved, petitioner filed a Motion for Partial Reconsideration37  on February 13, 2012 but
was, however, denied in a Resolution38 dated August 24, 2012, hence, the present petition.
 
The Issues Before the Court
 
The issues presented for the Court’s resolution are: (a) whether the RTC had lost jurisdiction
over the matter of the preliminary attachment after petitioner appealed the decision in the Main
Case, and thereafter ordered the transmittal of the records to the CA; and (b) whether the CA
erred in order-

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32  Id., at p. 10.
33  Id., at pp. 29-47.
34  Id., at p. 46.
35  Id., at pp. 41-42.
36  Id., at pp. 45-46.
37  Dated February 6, 2012. Id., at pp. 51-60.
38  Id., at pp. 49-50.

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ing the appointment of a commissioner and the subsequent discharge of any excess attachment
found by said commissioner.
 
The Court’s Ruling
 
The petition is meritorious.
Section 9, Rule 41 of the Rules of Court provides that in appeals by notice of appeal, the
court loses jurisdiction over the case upon the perfection of the appeals filed in due
time and the expiration of the time to appeal of the other parties.
In this case, petitioner had duly perfected its appeal of the RTC’s September 21, 2011 Decision
resolving the Main Case through the timely filing of its Notice of Appeal dated October 27, 2011,
together with the payment of the appropriate docket fees. The RTC, in an Order39 dated January
25, 2012, had actually confirmed this fact, and thereby ordered the elevation of the entire records
to the CA. Meanwhile, records do not show that respondents filed any appeal, resulting in the
lapse of its own period to appeal therefrom. Thus, based on Section 9, Rule 41, it cannot be
seriously doubted that the RTC had already lost jurisdiction over the Main Case.
With the RTC’s loss of jurisdiction over the Main Case necessarily comes its loss of jurisdiction
over all matters merely ancillary thereto. Thus, the propriety of conducting a trial by
commissioners in order to determine the excessiveness of the subject preliminary attachment,
being a mere ancillary matter to the Main Case, is now mooted by its supervening appeal in C.A.-
G.R. CV No. 98237.
Note that in Sps. Olib v. Judge Pastoral,40  the Court, in view of the nature of a preliminary
attachment, definitively

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39  Id., at pp. 81 and 271.

40  266 Phil. 762; 188 SCRA 692 (1990).

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ruled that the attachment itself cannot be the subject of a separate action independent of the
principal action because the attachment was only an incident of such action, viz.:
Attachment is defined as a provisional remedy by which the property of an adverse party is taken into
legal custody, either at the commencement of an action or at any time thereafter, as a security for the
satisfaction of any judgment that may be recovered by the plaintiff or any proper party.
It is an auxiliary remedy and cannot have an independent existence apart from the main suit or claim
instituted by the plaintiff against the defendant. Being merely ancillary to a principal proceeding, the
attachment must fail if the suit itself cannot be maintained as the purpose of the writ can no
longer be justified.
The consequence is that where the main action is appealed, the attachment which may have been issued
as an incident of that action, is also considered appealed and so also removed from the jurisdiction of the
court a quo. The attachment itself cannot be the subject of a separate action independent of the
principal action because the attachment was only an incident of such action.41  (Emphases
supplied)

 
That being said, it is now unnecessary to discuss the other issues raised herein. In fine, the
petition is granted and the assailed CA rulings are set aside.
WHEREFORE, the petition is  GRANTED. The Decision dated January 19, 2012 and the
Resolution dated August 24, 2012 of the Court of Appeals in C.A.-G.R. S.P. No. 97448 are
hereby SET ASIDE.

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41  Id., at pp. 766-767; pp. 696-697.

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Northern Islands Co., Inc. vs. Garcia
 SO ORDERED.

Leonardo-De Castro*** (Acting Chairperson), Bersamin, Perez and Jardeleza,**** JJ., concur.

Petition granted, judgment and resolution set aside.

Notes.—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. (Torres vs. Satsatin, 605 SCRA 453 [2009])
The Regional Trial Court (RTC) is not permitted to dissolve or discharge a preliminary
attachment or garnishment except on grounds specifically provided in the Revised Rules of Court.
(Bank of the Philippine Islands vs. Lee, 678 SCRA 171 [2012])
——o0o——

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* ** Per Special Order No. 1946 dated March 12, 2015.

* *** Designated additional member per Special Order No. 1952 dated March 18, 2015.