Cruz v. Manila Surety & Fidelity Co.
REITERATIONFacts
The Antecedents: Plaintiffs Concepcion and Andrea Enciong and Filemon Leonardo instituted a forcible entry case against Gregorio Cruz in the Justice of the Peace Court of Parañaque, Rizal. A writ of preliminary injunction was issued upon the plaintiffs filing a P3,000 bond posted by Manila Surety & Fidelity Co., Inc. The plaintiffs took possession and harvested the palay. The writ was later lifted when the defendant, Cruz, posted a P6,000 counter-bond, and possession was returned after the palay harvest. Procedural History: Gregorio Cruz filed an action for certiorari in the Court of First Instance (CFI) of Rizal assailing the proceedings in the forcible entry case, which resulted in the declaration of nullity of the proceedings for lack of jurisdiction. Subsequently, Cruz filed an action for damages in the CFI against the plaintiffs and the bonding company, averring losses of P2,950 due to dispossession and consequential damages. The defendants moved to dismiss, arguing the action for damages had no legal basis as it was not included in the certiorari judgment. The CFI ruled in favor of Cruz, ordering the defendants to pay P2,750. The Court of Appeals reversed this decision, absolving the defendants. The Petition: This petition for review seeks to set aside the Court of Appeals' decision.
Issue(s)
Whether the petitioner is barred from instituting a separate action for damages due to the issuance of a preliminary injunction by failing to claim such damages in the principal forcible entry case. Whether the petitioner has a right to claim damages for the loss of palay standing on the land in dispute.
Ruling
The Supreme Court affirmed the Court of Appeals' decision in so far as it held that the petitioner has no right to institute the present action for damages, but reversed it in all other respects. The petitioner is allowed to present his claim for damages in the pending forcible entry case.
Ratio Decidendi
On the issue of being barred from instituting a separate action for damages: The Court held that the petitioner is barred from instituting a separate action for damages due to the issuance of the preliminary injunction. This is because the Rules of Court (Section 9, Rule 60 in connection with Section 20, Rule 59) require that a claim for damages suffered by reason of the issuance of a preliminary injunction must be presented in the principal action. The remedy is exclusive, and failure to file a motion for the determination of damages while the judgment is still under the court's control results in the loss of the right to such damages. This procedure is intended to avoid multiplicity of actions and ensures that the court that acted on the special proceeding, having control of the case, is the one to assess the damages. The ruling aligns with well-established jurisprudence on the matter, citing cases such as Casimiro Japco vs. The City of Manila. On the issue of the right to claim damages for the loss of palay: The Court found that the Court of Appeals' ruling that the petitioner has no right to claim damages for the loss of palay was not sufficiently based on evidence. While the ownership of the land was determined in registration cases, the ownership of improvements, such as standing palay, is a separate matter. The evidence presented in the damages case seemed limited to land ownership, and the record did not justify a finding relative to the improvements. The petitioner might have made improvements in good faith even if not the lawful owner of the land. Therefore, the finding that the petitioner has no right to claim damages for the palay has no basis in the evidence.
Main Doctrine
A claim for damages suffered by reason of the issuance of a preliminary injunction must be presented in the principal action, and judgment therefor must be included in the final judgment of the case. The remedy is exclusive, and by failing to file a motion for the determination of the damages on time, the claimant loses his right to such damages. Such claim cannot be the subject of a separate action.