GERICAH GWAPA
a special reason for such an order before the case can be regularly
Case 1: Estares vs CA
Topic: Preliminary Injunction
Doctrine: The application of the writ of preliminary injunction
rests upon an alleged existence of an emergency or of a special
reason for such an order before the case can be regularly heard,
and the essential conditions for granting such temporary
injunctive relief are that the complaint alleges facts which appear
to be sufficient to constitute a cause of action for injunction and
that on the entire showing from both sides, it appears, in view of
all the circumstances, that the injunction is reasonably necessary
to protect the legal rights of plaintiff pending the litigation.
Facts: Spouses Estrares secured a loan of P800,000.00 from
Prominent Lending and Credit Corporation (PLCC) in 1998. To
secure the loan, they mortgaged a parcel of land. Now, the
spouses are questioning the validity of the loan as they alleged
that they agreed to an 18% per annum interest rate but PLCC is
now charging them 3.5% interest rate per month.
When the mortgaged property is about to be foreclosed, they
prayed for a temporary restraining order (TRO) and/or writ of
preliminary injunction to enjoin PLCC from taking possession of
the mortgaged property and proceeding with the extrajudicial
sale. PLCC argued that the spouses were properly apprised of the
terms of the loan including the rate of interest, penalties and
other charges.
At the hearing, the Estares spouses insist that they firmly
established their right to injunctive relief. They claim that the
promissory note, credit application, disbursement voucher,
disclosure statement and real estate mortgage are falsified; the
promissory note is not reflective of the true amount of the loan,
as well as the term, interest and charges thereon; and rate of
interest stated in the falsified promissory note are fictitious or
simulated.
The RTC denied the Estares spouses’ application for a writ of
preliminary injunction, holding that the latter failed to establish
the facts necessary for an injunction to issue. The Estares
spouses filed a petition for certiorari and prohibition in the Court
of Appeals. The action on the Estares spouses’ application for a
TRO and writ of preliminary injunction was deferred and held in
abeyance until after receipt of the comment. With no restraining
order enjoining him, Sheriff Magat conducted and proceeded with
the auction sale. The Court of Appeals affirmed RTC’s decision
and that it held that RTC did not abuse its discretion in denying
preliminary injunction. Hence, petitioners filed this appeal to the
SC.
Issue: Whether or not RTC committed grave abuse of discretion
in denying the plaintiff’s prayer for preliminary injunction.
Ruling: The RTC did not commit grave abuse of discretion.
Generally, injunction is a preservative remedy for the protection
of substantive rights or interests. It is not a cause of action in
itself but merely a provisional remedy, an adjunct to a main suit.
The controlling reason for the existence of the judicial power to
issue the writ is that the court may thereby prevent a threatened
or continuous irremediable injury to some of the parties before
their claims can be thoroughly investigated and advisedly
adjudicated. It is to be resorted to only when there is a pressing
necessity to avoid injurious consequences which cannot be
remedied under any standard of compensation. The application
of the writ rests upon an alleged existence of an emergency or of
heard, and the essential conditions for granting such temporary
injunctive relief are that the complaint alleges facts which appear
to be sufficient to constitute a cause of action for injunction and
that on the entire showing from both sides, it appears, in view of
all the circumstances, that the injunction is reasonably necessary
to protect the legal rights of plaintiff pending the litigation.
The Estares spouses had the burden in the trial court to establish
the following requirements for them to be entitled to injunctive
relief: (a) the existence of their right to be protected; and (b) that
the acts against which the injunction is to be directed are
violative of such right. To be entitled to an injunctive writ, the
petitioner must show, inter alia, the existence of a clear and
unmistakable right and an urgent and paramount necessity for
the writ to prevent serious damage. The Estares spouses failed to
establish their right to injunctive relief. They do not deny that
they are indebted to PLCC but only question the amount thereof.
Their property is by their own choice encumbered by a real estate
mortgage. Upon the nonpayment of the loan, which was secured
by the mortgage, the mortgaged property is properly subject to a
foreclosure sale.
Respondent’s testimony sealed the fate of the necessity of the writ
of preliminary injunction. She admitted that: they did not
question PLCC in writing why they only received P637,000.00;
they did not question the figures appearing in the Statement of
Account when they received it; and, when they received PLCCs
demand letter, they went to the formers office not to question the
loans terms and conditions but merely to request for extension of
three months to pay their obligation. She acknowledged that they
only raised the alleged discrepancy of the amount loaned and the
amount received, as well as the blank documents which they
allegedly signed, after PLCC initiated the foreclosure
proceedings. It must be stressed that the assessment and
evaluation of evidence in the issuance of the writ of preliminary
injunction involve findings of facts ordinarily left to the trial
court for its conclusive determination. As such, a trial court’s
decision to grant or to deny injunctive relief will not be set aside
on appeal unless the court abused its discretion. In granting or
denying injunctive relief, a court abuses its discretion when it
lacks jurisdiction, fails to consider and make a record of the
factors relevant to its determination, relies on clearly erroneous
factual findings, considers clearly irrelevant or improper factors,
clearly gives too much weight to one factor, relies on erroneous
conclusions of law or equity, or misapplies its factual or legal
conclusions. None of those happened in the instant case.
Summary of Facts :Spouses Estares obtained a loan and
mortgaged their property, which eventually was foreclosed. They
challenged the foreclosure as well as the extrajudicial sale
because according to them, the loan agreement was falsified but
in reality, they were informed about the terms and conditions
including the alleged falsified interest. The spouses only
complained about such after they signed the contract and when
their property is about to be foreclosed. Prior to that, they
acknowledged the debt by asking extension. In short, utangan
jud sila pero hadlok sila ma foreclose ila property, mao ni seek
sila og injunction. They failed to prove the right to such injunctive
relief, and they failed to establish the requirements for the grant
of injunctive relief. RTC did not commit grave abuse of discretion
in denying the prayer for injunction.
Case 2: Northern Luzon Island Co. vs. Garcia
Topic: Preliminary Attachment
Doctrine: 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.
Facts: Petitioner Northern Islands delivered several appliances
to Respondent Garcia amounting to P8,040,825.17. The said
goods were transported, shipped and delivered by Sulpicio Lines
and was accepted in good condition by the respondent’s
representatives. The parties agreed that the items were payable
within 120 days and that the unpaid amounts would earn
interest of 18% per annum. However, the goods were not paid by
respondents despite repeated demands. Respondents
fraudulently asserted that they have not received the items and
that the petitioner had no proof that they received the goods. As
a result, the petitioner applied for a writ of preliminary
attachment and posted a bond amounting to the total cost of the
items. The RTC issued the writ sought for.
Thereafter, respondents filed a Motion to Discharge Excess
Attachment 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 amounted to
P17,273,409.73, while the attachment bond is only in the amount
of P8,040,825.17.16. RTC 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. Respondents elevated the matter to the CA. via
petition for certiorari and mandamus.
The CA 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. Aggrieved,
petitioner filed a Motion for Partial Reconsideration but was
denied hence the present petition.
Issues: (a) whether the RTC had lost jurisdiction over the matter
of the preliminary attachment after petitioner appealed the
decision in the Main Case
(b) whether the CA erred in ordering the appointment of a
commissioner and the subsequent discharge of any excess
attachment found by said commissioner.
Ruling: The petition is meritorious. In this case, petitioner had
duly perfected its appeal of the RTC’s Decision resolving the
Main Case through the timely filing of its Notice of Appeal
together with the payment of the appropriate docket fees. The
RTC 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 CA-
G.R. No. 98237. Note that in Sps. Olib v. Judge Pastoral 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.
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. In fine, the petition is granted and the assailed CA
rulings are set aside.
Case 3: Luzon Dev. Bank v Krishman,
Topic: Writ of Attachment
Doctrine: The proximate relation of the word "deposit" and
"amount" is unmistakable in Section 5 of Rule 57. Plainly, in
construing said words, it can be safely concluded that Section 5
requires the deposit of money as the word "amount" commonly
refers to or is regularly associated with a sum of money.
Facts: Khrishnan filed a complaint for Collection of Sum of
Money and Damages against petitioners Luzon Development
Bank, Clemente and Ramirez. Khrishnan claimed that she is a
client of the petitioner bank wherein she maintained several
accounts including time deposits. When Erlinda presented her
Time Deposits Certificates amounting to P28,597,472.70 for
payment, petitioners refused to honor them for the reason that
they were fraudulent. Respondent applied for a Preliminary Writ
of Attachment. In a Decision granting a Petition for Certiorari
filed by respondent, the RTC ordered the petitioner bank to file a
counter bond in accordance with Sec. 12, Rule 57 within 10 days
from the finality of decision. Otherwise, the RTC shall
immediately reinstate the writ of attachment issued.
Respondent filed her attachment bond in the amount of
P35,000,000.00 through Visayan Surety and Insurance
Corporation. Meanwhile, Luzon Devt Bank filed an Omnibus
Motion praying that a hearing be held to determine the
sufficiency of the attachment bond and they be allowed to deposit
Certificates of Title of real property, and the issuance of the writ
of attachment be held in abeyance. The CA affirmed the Orders
of the RTC reinstating the Writ of Attachment for failure of
petitioners to file the required counter-bond.
In their petition, petitioners contend that it has the option to
deposit real property, in lieu of cash or a counter-bond, to secure
any contingent lien on its property in the event respondent wins
the case. They argue that Section 2 of Rule 57 only mentions the
term "deposit," thus, it cannot only be confined or construed to
refer to cash.
Issue: May a bank’s property be deposited in lieu of cash or a
counter-bond?
Ruling: No. Section 2, Rule 57 of the Rules of Court explicitly
states that "[a]n order of attachment may be issued either ex
parte or upon motion with notice and hearing by the court in
which the action is pending, or by the Court of Appeals or the
Supreme Court, and must require the sheriff of the court to
attach so much of the property in the Philippines of the party
against whom it is issued, not exempt from execution, as may be
sufficient to satisfy the applicant’s demand, unless such party
makes deposit or gives a bond as hereinafter provided in an
amount equal to that fixed in the order, which may be the amount
sufficient to satisfy the applicant’s demand or the value of the
property to be attached as stated by the applicant, exclusive of
costs."Section 5 of the same Rule likewise states that "[t]he
sheriff enforcing the writ shall without delay and with all
reasonable diligence attach, to await judgment and execution in
the action, only so much of the property in the Philippines of the
party against whom the writ is issued, not exempt from
execution, as may be sufficient to satisfy the applicant’s demand,
unless the former makes a deposit with the court from which the
writ is issued, or gives a counter-bond executed to the applicant,
in an amount equal to the bond fixed by the court in the order of
attachment or to the value of the property to be attached,
exclusive of costs."
From the foregoing, it is evidently clear that once the writ of
attachment has been issued, the only remedy of the petitioners
in lifting the same is through a cash deposit or the filing of the
counter-bond. Thus, the Court holds that petitioner’s argument
that it has the option to deposit real property instead of
depositing cash or filing a counter-bond to discharge the
attachment or stay the implementation thereof is unmeritorious.
In Security Pacific Assurance Corporation v. Tria-Infante, the
trial court ruled that while it is true that the word deposit cannot
only be confined or construed to refer to cash, a broader
interpretation thereof is not justified in the present case for the
reason that a party seeking a stay of the attachment under
Section 5 is required to make a deposit in an amount equal to the
bond fixed by the court in the order of attachment or to the value
of the property to be attached. The proximate relation of the word
"deposit" and "amount" is unmistakable in Section 5 of Rule 57.
Plainly, in construing said words, it can be safely concluded that
Section 5 requires the deposit of money as the word "amount"
commonly refers to or is regularly associated with a sum of
money.
Case 4: Excellent Quality Apparel vs. Visayan Surety
Topic:
DOCTRINE: To hold a surety liable upon an application for
damages against the wrongful attachment, the surety must be
given due notice on the application for damages before the
judgment becomes final and executory. On the other hand, to
hold a surety liable on its counterbond, notice to the surety even
after the judgment had become final and executory is allowed.
Facts: Petitioner Excellent Quality Apparel (EQA), entered into
a construction contract with Win Multi-Rich Builders (WMRB).
Win Multi Rich filed a complaint for sum of money and damages
with an application for writ of attachment against petitioner
before the RTC. Win Multi-Rich then secured the necessary bond
from respondent Visayan Surety and consequently, the RTC
issued the writ. To prevent the enforcement of the writ, petitioner
filed a counterbond in an amount equal to the attachment bond
payable. Thereafter, the petitioner filed an Omnibus Motion
seeking to discharge the attachment.
Petitioner denied the material allegation of the complaint and
sought the immediate lifting of the writ of attachment. It also
prayed that the bond filed by Win Multi-Rich be held to satisfy
petitioner’s claim for damages due to the improper issuance of
such writ. Later, the RTC issued an order directing the deposit of
the garnished funds of petitioner to the cashier of the Clerk of
Court of the RTC. Thereafter, Win Multi-Rich filed a motion to
release petitioner’s cash deposit to it which was granted by the
RTC. To secure the withdrawal of the cash deposited by
petitioner, Win Multi-Rich posted a surety bond issued by
FESICO. Thus, Win Multi-Rich was able to receive the funds of
petitioner even before the trial began. Petitioner filed a petition
for certiorari seeking to annul the RTC’s orders denying
petitioner’s Omnibus Motion and directing the deposit of the
garnished funds of petitioner to the cashier of the Clerk of Court
of the RTC. Petitioner also filed its Supplemental Manifestation
and Motion, asserting that its cash deposit with the RTC was
turned over to Win Multi-Rich.
The Supreme Court resolved the matter in favor of petitioner
and held: first, that Win Multi-Rich was not a real party in
interest; second, that Win Multi-Rich could not retain the
garnished amount, as the RTC did not have jurisdiction to issue
the questioned writ of attachment and to order the release of the
funds. Win Multi-Rich filed a motion for reconsideration but it
was denied and the decision became final and executory.
Thereafter, petitioner moved for execution thereof, praying for
the return of its cash deposit and, in the event of refusal of Win
Multi-Rich to comply, to hold Visayan Surety and FESICO liable
under their respective bonds. The RTC, at first, granted the
motion for execution, however, upon respondents’ motion for
reconsideration, the RTC reversed its previous order and lifted
its order insofar as it granted the motion for execution against
Visayan Surety and FESICO. The RTC absolved the surety
respondents because petitioner did not file a motion for judgment
on the attachment bond before the finality of judgment, thus,
violating the surety respondents’ right to due process. It further
held that the execution against the surety respondents would go
beyond the terms of the judgment sought to be executed
considering that the Court decision pertained to Win Multi-Rich
only.
On appeal, the CA found petitioner’s appeal without merit. Citing
Section 20, Rule 57 of the 1997 Rules of Civil Procedure (Section
20, Rule 57), the CA held that petitioner failed to timely claim
damages against the surety before the decision of the Court
became final and executory. It further stated that a court
judgment could not bind persons who were not parties to the
action as the records showed that Visayan Surety and FESICO
were neither impleaded nor informed of the proceedings before
the Court. Hence, this petition.
Issues: 1. WON the CA erred in ruling that the petitioner
cannot claim against the surety for its failure to timely claim
damages against the surety before the decision of the court
became final and executory.
2. WON the CA erred in ruling that the court judgment
cannot bind Visayan Surety and FISECO because neither were
impleaded as parties nor informed of the proceedings.
Ruling: The Supreme Court held that there was an application
for damages but Visayan Surety cannot be held liable because it
was not duly notified of the application for damages resulting
from the improper, irregular or excessive attachment.
In this case, the attachment bond was issued by Visayan Surety
in order for Win Multi-Rich to secure the issuance of the writ of
attachment. Hence, any application for damages arising from the
improper, irregular or excessive attachment shall be governed by
Section 20, Rule 57. In a catena of cases, the Court has cited the
requisites under Section 20, Rule 57 in order to claim damages
against the bond, as follows:
1. The application for damages must be filed in the same case
where the bond was issued;
2. Such application for damages must be filed before the entry of
judgment; and
3. After hearing with notice to the surety.
The usual procedure is to file an application for damages with
due notice to the other party and his sureties. The other method
would be to incorporate the application in the answer with
compulsory counterclaim. In the present petition, the Court holds
that petitioner sufficiently incorporated an application for
damages against the wrongful attachment in its answer with
compulsory counterclaim filed before the RTC. However,
petitioner’s answer with compulsory counterclaim, which
contained the application for damages, was not served on
Visayan Surety. Visayan Surety was only notified of the
application when the motion for execution had become final and
executory. Clearly, petitioner failed to comply with the requisites
under Section 20, Rule 57 because Visayan Surety was not given
due notice on the application for damages before the finality of
judgment. The subsequent motion for execution, which sought to
implicate Visayan Surety, cannot alter the immutable judgment
anymore.
On the other hand, the same cannot be said of FESICO because,
in the first place, Win Multi-Rich should not have filed its motion
to release the cash deposit of petitioner and the RTC should not
have granted the same. The release of the cash deposit to the
attaching party is anathema to the basic tenets of a preliminary
attachment. The chief purpose of the remedy of attachment is to
secure a contingent lien on defendant’s property until plaintiff
can, by appropriate proceedings, obtain a judgment and have
such property applied to its satisfaction, or to make some
provision for unsecured debts in cases where the means of
satisfaction thereof are liable to be removed beyond the
jurisdiction, or improperly disposed of or concealed, or otherwise
placed beyond the reach of creditors. The garnished funds or
attached properties could only be released to the attaching party
after a judgment in his favor is obtained. Under no circumstance,
whatsoever, can the garnished funds or attached properties,
under the custody of the sheriff or the clerk of court; be released
to the attaching party before the promulgation of judgment.
The cash deposit or the counter-bond was supposed to
secure the payment of any judgment that the attaching party
may recover in the action. In this case, however, Win Multi-Rich
was able to withdraw the cash deposit and, in exchange, it posted
a surety bond of FESICO in favor of petitioner to answer for the
damages that the latter may sustain. Corollarily, the surety bond
of FESICO substituted the cash deposit of petitioner as a security
for the judgment. Thus, to claim damages from the surety bond
of FESICO, Section 17, Rule 57 could be applied. Unlike Section
20, Rule 57, which requires notice and hearing before the finality
of the judgment in an application for damages, Section 17, Rule
57 allows a party to claim damages on the surety bond after the
judgment has become executory.
Under Section 20, Rule 57, in relation to Section 4
therein, the surety bond shall answer for all the costs which may
be adjudged to the adverse party and all damages which he may
sustain by reason of the attachment. In other words, the damages
sought to be enforced against the surety bond are unliquidated.
Necessarily, a notice and hearing before the finality of judgment
must be undertaken to properly determine the amount of
damages that was suffered by the defendant due to the improper
attachment. These damages to be imposed against the attaching
party and his sureties are different from the principal case, and
must be included in the judgment.
On the other hand, under Section 17, Rule 57, in relation to
Section 12 therein, the cash deposit or the counter-bond shall
secure the payment of any judgment that the attaching party
may recover in the action. Stated differently, the damages sought
to be charged against the surety bond are liquidated. The final
judgment had already determined the amount to be awarded to
the winning litigant on the main action. Thus, there is nothing
left to do but to execute the judgment against the losing party, or
in case of insufficiency, against its sureties.
Indeed, FESICO cannot escape liability on its surety bond issued
in favor of petitioner. The purpose of FESICO's bond was to
secure the withdrawal of the cash deposit and to answer any
damages that would be inflicted against petitioner in the course
of the proceedings. Also, the undertaking signed by FESICO
stated that the duration of the effectivity of the bond shall be from
its approval by the court until the action is fully decided, resolved
or terminated. FESICO cannot simply escape liability by
invoking that it was not a party in the previous case. From the
moment that FESICO issued a surety bond in favor of Win Multi-
Rich and the same was posted before the RTC, the court has
acquired jurisdiction over the surety, and the provisions of
Sections 12 and 17 of Rule 57 became operational. Thus, the
Court holds that FESICO is solidarily liable under its surety
bond with its principal Win Multi-Rich.
Case 5: Watercraft Venture Corp vs. Wolfe (unfinished digest)
Topic: Writ of Preliminary Attachment
Doctrine: The applicant for a writ of preliminary attachment
must sufficiently show the factual circumstances of the alleged
fraud because fraudulent intent cannot be inferred from the
debtor's mere non-payment of the debt or failure to comply with
his obligation. The particulars of such circumstances necessarily
include the time, persons, places and specific acts of fraud
committed.
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
as its Shipyard Manager. During his employment, Wolfe stored
the sailboat, Knotty Gull, within Watercraft’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 between him and Watercraft’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
attachment. Wolfe filed a Motion to Discharge the Writ of
Attachment, arguing that Watercraft failed to show the existence
of fraud and that the mere failure to pay or perform an obligation
does not amount to fraud. The Court of Appeals granted Wolfe’s
petition, annulling and setting aside the Writ of attachment, and
declaring null and void the Notice of attachment and levy. Hence,
the petitioner elevated the case to the Supreme Court.
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.
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.
The applicant for a writ of preliminary attachment must
sufficiently show the factual circumstances of the alleged fraud
because fraudulent intent cannot be inferred from the debtor's
mere non-payment of the debt or failure to comply with his
obligation. The particulars of such circumstances necessarily
include the time, persons, places and specific acts of fraud
committed. An affidavit which does not contain concrete and
specific grounds is inadequate to sustain the issuance of such
writ. In fact, mere general averments render the writ defective
and the court that ordered its issuance acted with grave abuse of
discretion amounting to excess of jurisdiction.
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. The petition is DENIED.

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.

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
CLEFF FEELER
MARPHIL EXPORT CORPORATION VS. ALLIED BANKING
CORPORATION
PRINCIPLE: A writ of preliminary attachment is "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 might be secured in
said action by the attaching creditor against the
defendant." Section 1, Rule 57 of the Revised Rules of Court
provides for the grounds upon which the writ may issue. For this
case, it is grounded under Section 1 (d) of Rule 57 of the Revised
Rules of Court:
Sec. 1. Grounds upon which attachment may issue. — At the
commencement of the action or at any time before entry of
judgment, a plaintiff or any proper party may have the property
of the adverse party attached as security for the satisfaction of
any judgment that may be recovered in the following cases:
In an action against a party who has been guilty of a fraud in
contracting the debt or incurring the obligation upon which the
action is brought, or in the performance thereof;
Grounds in Discharging a Writ of Preliminary Attachment
Once issued, a writ of attachment may be dissolved or discharged
on the following grounds:
(a) the debtor has posted, a counter-bond or has made the
requisite cash deposit;
(b) the attachment was improperly or irregularly issued as where
there is no ground for attachment, or the affidavit and/or bond
filed therefor are defective or insufficient;
(c) the attachment is excessive, but the discharge shall be limited
to the excess;
(d the property attachment is exempt from preliminary
attachment;
e. the juddgment is rendered against the attaching creditor.
FACTS: Allied Bank filed a complaint with Petition for Writ of
Preliminary Attachment for a collection case against Lim Shao
Tong for the loan obligations. It also prayed for the issuance of a
writ of preliminary attachment on the ground that Lim is guilty
of fraud in contracting the loans.
Allied Bank alleged that there is fraud in committing their
obligations because
a.) There is a preconceived intention not to pay their obligations
as manifested by the unjust filing of a complaint by Marphil
against the plaintiff
b. To induce the bank to grant credit accommodations, Marphil
represented to plaintiff that they would present proper and
sufficient documents to the issuing bank
c. Marphil committed misrepresentation in shipping the cashew
nuts at a volume less than that which was required by the foreign
buyer.
The RTC of Makati issued the writ of preliminary attachment ex
parte. When it reached the CA IT it did not object and stated that
Marphil did not file any motion to discharge. Hence this petition
ISSUE: Whether or not the writ of preliminary attachment
should be dissolved
RULING: The SC ruled that the writ of attachment issued
against Ireneo Lim’s property be DISSOLVED
Allied Bank was not able to sufficiently establish the factual
circumstances of the alleged fraud in contracting the obligation.
Thus, there being no ground for its issuance, the writ of
preliminary attachment should be dissolved. ( MAGIC RULING)
In Ng Wee v. Tankiansee, we explained that to justify the
attachment of the debtor's property under Section 1(d) of Rule 57
of the Rules of Court, the applicant must show that in incurring
the obligation sued upon, Fraud must be the reason which
induced the other party into giving its consent. In addition, the
particular acts constituting the fraud imputed to the defendant
must be alleged with specificity. We held:
In the case at bench, the basis of petitioner" s application for the
issuance of the writ of preliminary attachment against the
properties of respondent is Section 1(d) of Rule 57 of the Rules of
Court which pertinently reads:
For a writ of attachment to issue under this rule, the applicant
must sufficiently show the factual circumstances of the alleged
fraud because fraudulent intent cannot be inferred from the
debtor's mere non-payment of the debt or failure to comply with
his obligation. The applicant must then be able to demonstrate
that the debtor has intended to defraud the creditor. In Liberty
Insurance Corporation v. Court of Appeals, we explained as
follows:
"To sustain an attachment on this ground, it must be shown that
the debtor in contracting the debt or incurring the obligation
intended to defraud the creditor. The fraud must relate to the
execution of the agreement and must have been the reason which
induced the other party into giving consent which he would not
have otherwise given. To constitute a ground for attachment in
Section 1 (d), Rule 57 of the Rules of Court, fraud should be
committed upon contracting the obligation sued upon.
A debt is fraudulently contracted if at the time of contracting it
the debtor has a preconceived plan or intention not to pay, as it
is in this case. Fraud is a state of mind and need not be proved
by direct evidence but may be inferred from the circumstances
attendant in each case."
Why there is no ground of attachment (fraud)
In the instant case, petitioner's October 12, 2000 Affidavit is
bereft of any factual statement that respondent committed a
fraud. The affidavit narrated only the alleged fraudulent
transaction between Wincorp and Virata and/or Power Merge,
which, by the way, explains why this Court, in G.R. No. 162928,
affirmed the writ of attachment issued against the latter. As to
the participation of respondent in the said transaction, the
affidavit merely states that respondent, an officer and director of
Wincorp, connived with the other defendants in the civil case to
defraud petitioner of his money placements.
No other factual averment or circumstance details how
respondent committed a fraud or how he connived with the other
defendants to commit a fraud in the transaction sued upon. In
other words, petitioner has not shown any specific act or deed to
support the allegation that respondent is guilty of fraud.
The affidavit, being the foundation of the writ, must contain such
particulars as to how the fraud imputed to respondent was
committed for the court to decide whether or not to issue the writ.
Absent any statement of other factual circumstances to show that
respondent, at the time of contracting the obligation, had a
preconceived plan or intention not to pay, or without any showing
of how respondent committed the alleged fraud, the general
averment in the affidavit that respondent is an officer and
director of Wincorp who allegedly connived with the other
defendants to commit a fraud, is insufficient to support the
issuance of a writ of preliminary attachment.
In the application for the writ under the said ground, compelling
is the need to give a hint about what constituted the fraud and
how it was perpetrated because established is the rule that fraud
is never presumed.
Verily, the mere fact that respondent is an officer and director of
the company does not necessarily give rise to the inference that
he committed a fraud or that he connived with the other
defendants to commit a fraud. While under certain
circumstances, courts may treat a corporation as a mere
aggroupment of persons, to whom liability will directly attach,
this is only done when the wrongdoing has been clearly and
convincingly established.
We also reiterated in Ng Wee that the rules on the issuance of
the writ of preliminary attachment as a provisional remedy are
strictly construed against the applicant because it exposes the
debtor to humiliation and annoyance. The applicant must show
that all requisites are present. Otherwise, if issued on false or
insufficient allegations, the court acts in excess of its jurisdiction
which must be corrected.
In this case, the writ of preliminary attachment was improperly
or irregularly issued because there is no ground for the
attachment.
To begin with, Allied Bank filed the application for the writ of
preliminary attachment in the Collection Case against Lim as
surety. However, the allegations of fraud refer to the execution of
the promissory notes, and not on the surety agreement.
The application was bereft of any allegation as to Lim's
participation in the alleged conspiracy of fraud. Also, the writ of
preliminary attachment was granted in the Collection Case
against Lim as . surety, yet there was no allegation on Lim's
fraudulent intention in incurring its obligation under the CG/CS
Agreements. It cannot be inferred that Lim had, at the time of
contracting the obligation, the preconceived intention to renege
on his obligation under the CG/CS Agreements.
Moreover, the filing of the Declaratory Relief Case cannot be
evidence of a preconceived intention not to pay the surety's
obligation because it was filed by Marphil, and not Lim. In any
case, the filing of the case is a legitimate means resorted to by
Marphil in, seeking to clarify its existing obligations with Allied
Bank. If its intention was to renege on its obligations, it would
not have submitted itself to the jurisdiction of the court where it
can be ordered to pay any existing obligations. The allegation
that petitioners made representations to induce it to grant them
a credit line is belied by the fact that it is only in the transaction
involving L/C No. 21970 where Allied Bank encountered
problems, because of Nanyang Bank's dishonor of the draft and
documents. Also, the allegation that petitioners committed
misrepresentation in shipping the cashew nuts at a volume less
than that which was required by the foreign buyer, relates to the
sale between Marphil and Intan, and not to the loan between
Marphil and Allied Bank.
PHIL-AIR CONDITIONING CENTER VS. RCJ LINES AND
ROLANDO ABADILLA
Principle: The grant of the writ is conditioned not only on the
finding of the court that there exists a valid ground for its
issuance.51 The Rules also require the applicant to post a bond.
Section 4 of Rule 57 of the Rules of Civil Procedure (Rules)
provides that "the party applying for the order must...give a bond
executed to the adverse party in the amount fixed by the court,
in its order granting the issuance of the writ, conditioned that the
latter will pay all the costs that may be adjudged to the adverse
party and all damages that he may sustain by reason of the
attachment, if the court shall finally adjudge that the applicant
was not entitled thereto."
The enforcement of the writ notwithstanding, the party whose
property is attached is afforded relief to have the attachment
lifted.
There are various modes of discharging an attachment under
Rule 57, viz.:
(1) by depositing cash or posting a counter-bond under Section
12;
(2) by proving that the attachment bond was improperly or
irregularly issued or enforced, or that the bond is insufficient
under Section 13;
(3) by showing that the attachment is excessive under Section 13;
and
(4) by claiming that the property is exempt from execution under
Section 2.
FACTS: Petitioner Phil Air sold to respondent RCJ Lines 240
airconditioning units for buses. RCJ lines payed through three
postdated checks which were dishonored. In view of the failure of
RCJ Lines to pay the balance despite demand, Phil Air filed the
complaint for sum of money with prayer for the issuance of a writ
of preliminary attachment.
RCJ refused to pay the balance because Phil-Air allegedly
breached its warranty. RCJ lines claimed that it was also entitled
to be reimbursed for costs and damages occasioned by the
enforcement of the writ of attachment.
RCJ lines urged the RTC to order Phil-Air to pay the replacement
cost of the units; lost profits for nine days and P64, 390 for the
counter bond premium, moral damages , exemplary damages and
attorney’s fees.
The RTC granted the application of the writ of preliminary
attachment after Phil-Air posted an attachment bond. The
attachment however was lifted when the RTC granted RCJ Lines
urgent motion to discharge the writ of attachment.
The CA affirmed the RTC decision. Hence the petition
ISSUE: Whether or not Phil-Air is directly liable for the counter-
bond premium and RCJ Lines’ alleged unrealized profits
RULING: Phil Air is not directly liable for the counter-bond
premium and RCJ Lines’ alleged unrealized profits.

The CA and the RTC erred when it held Phil-Air directly liable
for the counter-bond premium and RCJ Lines' alleged unrealized
profits. Granting that RCJ Lines suffered losses, the judgment
award should have been first executed on the attachment bond.
Only if the attachment bond is insufficient to cover the judgment
award can Phil-Air be held liable. (Magic Words)

In the present case, the RTC lifted the preliminary attachment

after it heard RCJ Lines' urgent motion to discharge attachment
and the latter posted a counter-bond. The RTC found that there
was no fraud and Phil-Air had no sufficient cause of action for the
issuance of the writ of the attachment. As a consequence, it
ordered Phil-Air to refund the premium payment for the counter-
bond and the losses suffered by RCJ Lines resulting from the
enforcement of the writ. The CA affirmed the RTC ruling in toto.

It is patent under the rules that the Attachment Bond answers

for all damages incurred by the party against whom the
attachment was issued.

Thus, Phil-Air cannot be held directly liable for the costs

adjudged to and the damages sustained by RCJ Lines because of
the attachment. Section 4 of Rule 57 positively lays down the rule
that the attachment bond will pay "all the costs which may be
adjudged to the adverse party and all damages which he may
sustain by reason of the attachment, if the court shall finally
adjudge that the applicant was not entitled thereto."
JOHN SKWAA
CASE: Equitable Bank v. Special Steel Products Incorporation
and Pardo (June 13, 2012)
PRINCIPLE: "A writ of preliminary attachment is too harsh a
provisional remedy to be issued based on mere abstractions of
fraud. Rather, the rules require that for the writ to issue, there
must be a recitation of clear and concrete factual circumstances
manifesting that the debtor practiced fraud upon the creditor at
the time of the execution of their agreement in that said debtor
had a preconceived plan or intention not to pay the creditor.”
FACTS: This is a case of Special Steel Products Incorporation
(SSPI) and its president, Augusto L. Pardo who filed a complaint
of damages with application of a writ of preliminary attachment
against Jose Uy and Equitable Bank. The complaint alleged that
the three crossed checks, all payable to the order of SSPI and
notation “account payee only” could be deposited and encashed
by SSPI only. However, due to Uy’s fraudulent representations,
and Equitable’s indispensable connivance or gross negligence,
the restrictive nature of the checks was ignored and the checks
were deposited in Uy’s account. Had the defendants not diverted
the three checks in July 1991, the plaintiffs could have used them
in their business and earned money from them. Thus, the
plaintiffs prayed for an award of actual damages consisting of the
unrealized interest income from the proceeds of the checks for the
two-year period that the defendants withheld the proceeds from
them (from July 1991 up to June 1993).
In support of their application for preliminary attachment, the
plaintiffs alleged that the defendants are guilty of fraud in
incurring the obligation upon which the action was brought and
that there is no sufficient security for the claim sought to be
enforced in this action.
The trial court granted plaintiffs’ application. It issued the writ
of preliminary attachment on September 20, 1993, upon the filing
of plaintiffs’ bond for ₱500,000.00. The sheriff served and
implemented the writ against the personal properties of both
defendants. Upon Equitable’s motion and filing of a counter-
bond, however, the trial court eventually discharged the
attachment against it.
Equitable Bank counter-claimed that SSPI is liable to it in
damages for the wrongful and malicious attachment of
Equitable’s personal properties. The bank maintained that SSPI
knew that the allegation of fraud against the bank is a falsehood.
Further, the bank is financially capable to meet the plaintiffs’
claim should the latter receive a favorable judgment. SSPI was
aware that the preliminary attachment against the bank was
unnecessary, and intended only to humiliate or destroy the
bank’s reputation.
The RTC ruled in favor of the plaintiffs and the CA affirmed the
RTC’s ruling.
ISSUE: Whether or not the attachment of Equitable’s personal
properties were wrong.
RULING: The Court held that the affidavit and the allegations of
the are bereft of specific and definite allegations of fraud against
Equitable that would justify the attachment of its properties. In
fact, SSPI admits its uncertainty whether Equitable’s
participation in the transactions involved fraud or was a result of
its negligence. Despite such uncertainty with respect to
Equitable’s participation, SSPI applied for and obtained a
preliminary attachment of Equitable’s properties on the ground
of fraud. The Court believes that such preliminary attachment
was wrongful. "[A] writ of preliminary attachment is too harsh a
provisional remedy to be issued based on mere abstractions of
fraud. Rather, the rules require that for the writ to issue, there
must be a recitation of clear and concrete factual circumstances
manifesting that the debtor practiced fraud upon the creditor at
the time of the execution of their agreement in that said debtor
had a preconceived plan or intention not to pay the creditor." No
proof was adduced tending to show that Equitable had a
preconceived plan not to pay SSPI or had knowingly participated
in Uy’s scheme.
In the instant case, the plaintiffs eventually obtained a judgment
in their favor does not detract from the wrongfulness of the
preliminary attachment. While "the evidence warrants [a]
judgment in favor of [the] applicant, the proofs may nevertheless
also establish that said applicant’s proffered ground for
attachment was inexistent or specious, and hence, the writ
should not have issued at all x x x."
For such wrongful preliminary attachment, plaintiffs may be
held liable for damages. However, Equitable is entitled only to
such damages as its evidence would allow, for the wrongfulness
of an attachment does not automatically warrant the award of
damages. The debtor still has the burden of proving the nature
and extent of the injury that it suffered by reason of the wrongful
attachment.
CASE: Adlawan v. Tomol (April 3, 2012)
PRINCIPLE: (SORRY DAGHAN KEU NI UG PRINCIPLE
RELATED SA PRELIMINARY ATTACHMENT PERO FEEL
NKO KANI ANG MAIN PRINCIPLE)
Attachment is an ancillary remedy. It is not sought for its own
sake but rather to enable the attaching party to realize upon
relief sought and expected to be granted in the main or principal
action. The remedy of attachment is adjunct to the main suit,
therefore, it can have no independent existence apart from a suit
on a claim of the plaintiff against the defendant. In other words,
an attachment or garnishment is generally ancillary to, and
dependent on, a principal proceeding, either at law or in equity,
which has for its purpose a determination of the justice of a
creditor's demand.
FACTS: This is a case of Elezar A. Adlawan was a private
contractor and was awarded by National Irrigation
Administration (NIA) and Bureau of Public Highways (BPH)
contracts for the construction of various infrastructure projects
of the government to perform his obligations. He sought financial
assistance and support from Aboitiz and Company, Inc. For
failure of Adlawan to pay the installments and amortizations,
Aboitiz filed a complaint for the collection of a sum of money and
damages including an ex-parte application for the issuance of a
writ of preliminary attachment against the property of Adlawan
as defendant therein.
The Executive Judge without notice and hearing issued an order
which directed the issuance of a writ of preliminary attachment
against all the property of the Adlawan, whether real or personal,
upon the filling of an attachment bond.
(SORRY DMD KUNG TAAS PA LANG ANG ORAS PA PARA
MAGBASA, KAYA KEU NI T_T)
(LANDMARK CASE NI)
ISSUE:
RULING:
CASE: Filinvest v. Hon. Relova (September 20, 1982)
PRINCIPLE:A writ of attachment may be discharged without the
necessity of filing the cash deposit or counter-bond required by
Section 12, Rule 57. Section 13 of the same Rule grants an
aggrieved party relief from baseless and unjustifiable
attachments procured, among others, upon false allegations,
without having to file any cash deposit or counter-bond.
FACTS: This is a case of payment of a motor vehicle purchased,
Ernesto Salazar, the private respondent, executed a promissory
note and a deed of chattel mortgage over the subject property in
favor of seller Rallye Motor Co., Inc. which subsequently assigned
all its rights, title and interest to the said note and mortgage to
Filinvest Credit Corporation, the petitioner. Later, petitioner
Filinvest filed with the Court of First Instance a complaint
against Rallye and Salazar for collection with damages and
preliminary writ of attachment, alleging that defendants have
committed fraud in securing the obligation and are now avoiding
payment of the same.
For his defense, Salazar claimed that he was himself defrauded,
because while he signed the promissory note and chattel
mortgage over the motor vehicle which he bought from Rallye,
the latter did not deliver to him the said personal property and
that Rallye has disappeared and can no longer be found. The then
presiding judge granted petitioner's ex-parte motion for a writ of
attachment which was implemented solely against respondent
Salazar's property. Over a year later, however, the now
respondent judge,on motion of respondent Salazar, ordered the
dissolution and setting aside of the writ of preliminary
attachment and the return of the attached properties on a finding
that Salazar did not commit fraud in contracting his obligation.
ISSUE:
1. Whether or not the writ of preliminary attachment was
improperly or irregularly issued for being issued ex
parte without notice to him and without hearing.
2. Whether or not the writ of preliminary attachment
already enforced by the Sheriff of Manila may be
dissolved without Salazar's posting a counter-replevin
bond as required by Rule 57, Section 12.
RULING:
1. The Court held that there is nothing in the Rules of
Court makes notice and hearing indispensable and
mandatory requisites for the issuance of a writ of
attachment. A writ of attachment may be issued ex
parte. Sections 3 and 4, Rule 57, merely require that an
applicant for an order of attachment file an affidavit and
a bond: the affidavit to be executed by the applicant
himself or some other person who personally knows the
facts and to show that (1) there is a sufficient cause of
action, (2) the case is one of those mentioned in Section
1 of Rule 57, (3) there is no other sufficient security for
the claim sought to be enforced, and (4) the amount
claimed in the action is as much as the sum for which
the order is granted above all legal
counterclaims; and the bond to be "executed to the
adverse party in an amount fixed by the judge, not
exceeding the applicant's claim, conditioned that the
latter will pay all the costs which may be adjudged to the
adverse party and all damages which he may sustain by
reason of the attachment, if the court shall finally
adjudge that the applicant was not entitled thereto.
2. The Court held that a writ of attachment may be
discharged without the necessity of filing the cash
deposit or counter-bond required by Section 12, Rule 57.
Sec. 13, Rule 57 grants an aggrieved party relief from
baseless and unjustifiable attachments procured, among
others, upon false allegations, without having to file any
cash deposit or counter-bond. In the instant case the
order of attachment was granted upon the allegation of
petitioner, as plaintiff in the court below, that private
respondent RALLYE, the defendants, had committed
"fraud in contracting the debt or incurring the obligation
upon which the action is brought," covered by Section
i(d), Rule 57, earlier quoted.
Subsequent to the issuance of the attachment order on August
17, 1977, private respondent filed in the lower court an "Urgent
Motion for the Recall and Quashal of the Writ of Preliminary
Attachment on (his property)" dated December 11, 1978 precisely
upon the assertion that there was "absolutely no fraud on (his)
part" in contracting the obligation sued upon by petitioner.
Private respondent was in effect claiming that petitioner's
allegation of fraud was false, that hence there was no ground for
attachment, and that therefore the attachment order was
"improperly or irregularly issued." This Court was held that "(i)f
the grounds upon which the attachment was issued were not true
..., the defendant has his remedy by immediately presenting a
motion for the dissolution of the same.
CASE: Peroxide Phils. Corp. v. Court of Appeals (July 31,1991)
PRINCIPLE:The hearing embraces not only the right to present
evidence but also a reasonable opportunity to know the claims of
the opposing parties and meet them. The right to submit
arguments implies that opportunity, otherwise the right would
be a barren one. It means a fair and open hearing. And, as
provided by the aforecited Section 13 of Rule 57, the attaching
creditor should be allowed to oppose the application for the
discharge of the attachment by counter-affidavit or other
evidence, in addition to that on which the attachment was made.
FACTS: This is a case of Bank of the Philippine Islands (BPI)
which filed a complaint of an action of sum of money against
Peroxide, Eastman and Mapua. The presiding judge, Judge
Pineda, ordered the issuance of the writ of preliminary
attachment after BPI filed an attachment bond. The properties
of Peroxide et. al were attached by the sheriff. Eastman and
Mapua moved to lift the attachment, which the said motion was
set for hearing and BPI was ordered to file its written opposition.
BPI then filed the motion to set for hearing for the motion to lift
the attachment and its opposition.
However, Judge Pineda denied the motion for hearing and
granted the lifting of the writ of attachment. BPI filed a Motion
for Reconsideration but due to the judiciary reorganization, the
case was reraffled and assigned to the sala of Judge Reyes.
Judge Reyes ruled that the writ of attachment was proper on the
ground that Eastman and Mapua disposed their properties in
fraud of BPI. He also directed the sheriff to implement the writ
of attachment upon the finality of the order.
After one year, BPI moved for partial reconsideration, the court's
writ of attachment was revived and re-affirmed and may be
executed and implemented immediately. Peroxide filed a petition
for certiorari and prohibition with the Court of Appeals but it got
dimissed.
BPI continued to implement the writ with the RTC ordering the
Bataan Pulp and Paper Mills Inc, attaching creditors for
garnishment of the petitioner's share without opposition.
Peroxide filed again a petition of certiorari but was once again
denied.
ISSUE: Whether or not the writ of attachment was validly lifted
and suspended
RULING: The Court held that while it is true that petitioner's
motion to discharge was set for hearing with notice to BPI but it
is likewise true that counsel for the latter asked for an
opportunity to file a written opposition and for a hearing to which
he asked that petitioner Edmund O. Mapua be subpoenaed. Said
counsel was allowed to file a written opposition which he
seasonably did, but Judge Pineda denied both the requested
subpoena and hearing and, instead, granted the discharge of the
attachment. These are the bases for BPI's plaint that it was
denied due process. Now, it is undeniable that when the
attachment is challenged for having been illegally or improperly
issued, there must be a hearing with the burden of proof to
sustain the writ being on the attaching creditor. That hearing
embraces not only the right to present evidence but also a
reasonable opportunity to know the claims of the opposing
parties and meet them. The right to submit arguments implies
that opportunity, otherwise the right would be a barren one. It
means a fair and open hearing. And, as provided by the aforecited
Section 13 of Rule 57, the attaching creditor should be allowed to
oppose the application for the discharge of the attachment by
counter-affidavit or other evidence, in addition to that on which
the attachment was made.
CASE: Security Pacific Assurance Corp. v. Tri-Infante
PRINCIPLE: There are two (2) ways to secure the discharge of
an attachment. 1. - the party whose property has been attached
or a person appearing on his behalf may post a security (Sec 12
Rule 57). 2.- party whose property is attached may show that the
order of attachment was improperly or irregularly issued. Under
the first manner (which is what is applicable in this case), the
mere filing of a counter-bond discharges the attachment.
FACTS: This is a case of Reynaldo Anzures who filed a complaint
in RTC against Teresita Villaluz for violating BP 22. Anzures
filed an Ex-Parte Motion for Preliminary Attachment, praying
that pending the hearing on the merits of the case and a Writ of
Preliminary Attachment is to be issued ordering the sheriff to
attach the properties of Villaluz in accordance with the Rules.
RTC issued a Writ of Preliminary Attachment upon Anzures’s
posting of a bond (P2.1M). The sheriff attached certain
properties of Villaluz and were duly annotated on the
corresponding certificates of title. RTC acquitted Villaluz of the
crime charged (BP22) but held her civilly liable. Villaluz
appealed but decision was affirmed.
The case was then elevated to the SC and during it’s pendency,
Villaluz posted a counter-bond of P2.5M issued by Security
Pacific Assurance Corporation, as well as filed an Urgent Motion
to Discharge Attachment.
Anzures moved for execution of judgment and pursuant to a writ
of execution issued, the sheriff, Reynaldo R. Buazon, tried to
serve the writ of execution upon Villaluz, but the latter no longer
resided in her given address. Sheriff sent a Notice of
Garnishment to Security Pacific Assurance Corporation’s office
in Makati City, by virtue of the counter-bond posted by Villaluz
with said insurance corporation in the amount of P2.5M but
refused to assume its obligation on the counter-bond it posted for
the discharge of the attachment made by Villaluz on the ground
that the bond was not approved by SC and that the condition by
which the bond was issued, did not happen. – court denied.
ISSUE:
1. Whether or not the Court of Appeals committed an
error in affirming the decision of RTC to allow
execution on the counter-bond issued by Security
Pacific
2. Whether or not the Court of Appeals was correct in
ruling that the that the mere act of posting the counter-
bond was sufficient to discharge the attachment on the
property (attachment on the property of Villaliz was
discharged without need of court approval of the
counter-bond)
RULING:
1. The Court held that the Court of Appeals did not commit
any error in affirming such decision and when a
judgment which has become executory, is returned
unsatisfied, liability of the bond automatically attaches
in failure of the surety to satisfy the judgment against
the defendant despite demand therefore, writ of
execution may issue against the surety to enforce the
obligation of the bond. - Tijam v. Sibonghanoy. “
Security Pacific was saying that although, it has a surety
agreement with Villaluz, it is one which merely waives its right
of excussion. What was wrong was when The counter-bond itself
states that the parties jointly and severally bind themselves to
secure the payment of any judgment that the plaintiff may
recover against the defendant in the action. In a contract of
suretyship, surety agrees to be answerable directly, primarily
and absolutely to the principal’s debt, default or miscarriage of
another. This means that the surety is equally bound with the
principal regardless of his interest in the obligation or receipt of
benefits. Security Pacific therefore cannot deny liability as a
surety.
 2. The Court held that the CA correct in ruling that
attachment discharged without need of court approval.
The Court expressed in this case that there are two ways
to secure the discharge of an attachment:

1. the party whose property has been attached or

a person appearing on his behalf may post a
security (Sec 12 Rule 57).

2. party whose property is attached may show

that the order of attachment was improperly or
irregularly issued.

The mere filing of the counter-attachment bond by Villaluz has

discharged the attachment on the properties and made the
petitioner corporation liable on the counter-attachment bond.

This can be gleaned from the “DEFENDANT’S BOND FOR THE

DISSOLUTION OF ATTACHMENT”, which states that Security
Pacific Assurance Corporation, as surety, in consideration of the
dissolution of the said attachment jointly and severally, binds
itself with petitioner Villaluz for any judgment that may be
recovered by private respondent Anzures against petitioner
Villaluz.