Lim vs Lazaro G.R. No.

185734
July 3, 2013 Held:

FACTS: By its nature, preliminary attachment, under Rule 57 of the Rules of

Court (Rule 57), is an ancillary remedy applied for not for its own
Lim Jr filed a complaint for sum of money with prayer for the sake but to enable the attaching party to realize upon the relief
issuance of a writ of preliminary attachment before the RTC, seeking sought and expected to be granted in the main or principal action; it
to recover from Tito S. Lazaro and Carmen T. Lazaro (Sps. Lazaro) is a measure auxiliary or incidental to the main action. As such, it is
the sum of ₱2,160,000.00. Three parcels of land in Bulacan are the available during its pendency which may be resorted to by a litigant
subject of the preliminary attachment upon payment of the bond to preserve and protect certain rights and interests during the interim,
amounting to ₱2,160,000.00. awaiting the ultimate effects of a final judgment in the case. In
addition, attachment is also availed of in order to acquire jurisdiction
The Sps. Lazaro contended that such amounts were already reduced over the action by actual or constructive seizure of the property in
by their previous payments and thus asked for an accounting and those instances where personal or substituted service of summons
adjustment of the debt and equally opposed that no fraud should be on the defendant cannot be effected.
imputed against them as it is merely a form of collateral.
In this relation, while the provisions of Rule 57 are silent on the
Nonetheless, on September 22, 2006, the parties entered into a length of time within which an attachment lien shall continue to
Compromise Agreement, whereby Sps. Lazaro agreed to pay Lim, subsist after the rendition of a final judgment, jurisprudence dictates
Jr. the amount of ₱2,351,064.80 on an installment basis. that the said lien continues until the debt is paid, or the sale is had
Subsequently, Sps. Lazaro filed an Omnibus Motion, seeking to lift under execution issued on the judgment or until the judgment is
the writ of preliminary attachment annotated on the subject TCTs, satisfied, or the attachment discharged or vacated in the same
which the RTC granted on March 29, 2007. It ruled that a writ of manner provided by law.
preliminary attachment is a mere provisional or ancillary remedy,
resorted to by a litigant to protect and preserve certain rights and The parties to the compromise agreement should not be deprived of
interests pending final judgment. Considering that the case had the protection provided by an attachment lien especially in an
already been considered closed and terminated by the rendition of instance where one reneges on his obligations under the agreement.
the January 5, 2007 Amended Decision on the basis of the If we were to rule otherwise, we would in effect create a back door by
September 22, 2006 compromise agreement, the writ of preliminary which a debtor can easily escape his creditors. The purpose of the
attachment should be lifted and quashed. Consequently, it ordered provisional remedy of attachment would thus be lost. It would
the Registry of Deeds of Bulacan to cancel the writ’s annotation on become, in analogy, a declawed and toothless tiger.
the subject TCTs. Lim objected to the lifting on the ground that the
obligation has not yet been satisfied or fulfilled. However Lim Jr’s Ligon vs RTC of Makati G.R. No. 190028 February 26, 2014
appeal was denied and also his MR.
CA affirmed the decision of the RTC court thus this appeal to the SC. Facts:

Issue: Leticia Ligon filed an amended complaint6 before the Regional Trial
Court of Quezon City, Branch 101 (Quezon City RTC) for collection
The sole issue in this case is whether or not the writ of preliminary of sum of money and damages, rescission of contract, and
attachment was properly lifted? nullification of title with prayer for the issuance of a writ of preliminary
attachment, against Sps. Baladjay and others. In her complaint,
Rosario Baladjay (Rosario) enticed her to extend a short-term loan in The Court resolves the following essential issues: (a) whether or not
the amount of ₱3,000,000.00, payable in a month’s time and secured the CA erred in ruling that the Makati City RTC did not gravely abuse
by an Allied Bank post-dated check for the same amount. its discretion in issuing the Assailed Orders; and (b) whether or not
Judge Laigo should be cited in contempt and penalized
Thus, Ligon prayed that all defendants be held solidarily liable to pay administratively.
her the amount of ₱3,000,000.00, with interest due, as well as
₱1,000,000.00 as attorney’s fees and another ₱1,000,000.00 by way Resolution:
of moral and exemplary damages. Asserting that the transfer of the
subject property to Polished Arrow was made in fraud of Sps. Attachment is defined as a provisional remedy by which the property
Baladjay’s creditors, Ligon also prayed that the said transfer be of an adverse party is taken into legal custody, either at the
nullified, and that a writ of preliminary attachment be issued in the commencement of an action or at any time thereafter, as a security
interim against defendants’ assets, including the subject property. for the satisfaction of any judgment that may be recovered by the
plaintiff or any proper party. Case law instructs that an attachment is
A similar complaint for collection of sum of money, damages, and a proceeding in rem, and, hence, is against the particular property,
cancellation of title with prayer for issuance of a writ of preliminary enforceable against the whole world. Accordingly, the attaching
attachment was lodged before the Makati City RTC, docketed as creditor acquires a specific lien on the attached property which
Civil Case No. 03-186 (Makati City Case), by Spouses Cecilia and nothing can subsequently destroy except the very dissolution of the
Gil Vicente (Sps. Vicente) against Sps. Baladjay, Polished Arrow, attachment or levy itself. Such a proceeding, in effect, means that the
and other corporations. In that case, it was established that Sps. property attached is an indebted thing and a virtual condemnation of
Baladjay solicited millions of pesos in investments from Sps. Vicente it to pay the owner’s debt. The lien continues until the debt is paid, or
using conduit companies that were controlled by Rosario, as sale is had under execution issued on the judgment, or until the
President and Chairperson. During the proceedings therein, a writ of judgment is satisfied, or the attachment discharged or vacated in
preliminary attachment also against the subject property was issued some manner provided by law. Thus, a prior registration of an
and annotated on the dorsal portion of TCT No. 9273 on March 12, attachment lien creates a preference, such that when an attachment
2003. Thereafter, but before the Quezon City Case was concluded, has been duly levied upon a property, a purchaser thereof
the Makati City RTC rendered a Decision dated December 9, 2004 subsequent to the attachment takes the property subject to the said
(December 9, 2004 Decision), rescinding the transfer of the subject attachment. As provided under PD 1529, said registration operates
property from Sps. Baladjay to Polished Arrow upon a finding that the as a form of constructive notice to all persons.
same was made in fraud of creditors.
Applying these principles, in this case, Ligon’s attachment lien over
After the decision in RTC QC she discovered that the December 3, the subject property continued to subsist since the attachment she
2002 attachment annotation had been deleted from TCT No. 9273 had earlier secured binds the property itself, and, hence, continues
when the subject property was sold by way of public auction on until the judgment debt of Sps. Baladjay to Ligon as adjudged in the
September 9, 2005 to the highest bidder, respondent Ting, for the Quezon City Case is satisfied, or the attachment discharged or
amount of ₱9,000,000.00 during the execution proceedings in the vacated in some manner provided by law.
Makati City Case. Due to this incident, Ligon filed a petition for
certiorari to the CA but it was denied thus this appeal to the SC.

Issue:
G.R. No. 166759               November 25, 2009 and personal properties of the respondent, including household
SOFIA TORRES vs NICANOR SATSATIN appliances, cars, and a parcel of land located at Las Piñas, Manila.

Facts: On the same day respondents filed their answer, they also filed a
Motion to Discharge Writ of Attachment18 anchored on the following
The siblings Sofia Torres (Sofia), Fructosa Torres (Fructosa), and grounds: the bond was issued before the issuance of the writ of
Mario Torres (Mario) each own adjacent 20,000 square meters track attachment; the writ of attachment was issued before the summons
of land situated at Barrio Lankaan, Dasmariñas, Cavite, covered by was received by the respondents; the sheriff did not serve copies of
Transfer Certificate of Title (TCT) Nos. 251267, 3 251266,4 and the application for attachment, order of attachment, plaintiffs’
251265,5 respectively. affidavit, and attachment bond, to the respondents; the sheriff did not
submit a sheriff’s return in violation of the Rules; and the grounds
cited for the issuance of the writ are baseless and devoid of merit. In
Sometime in 1997, Nicanor Satsatin (Nicanor) asked petitioners’
the alternative, respondents offered to post a counter-bond for the
mother, Agripina Aledia, if she wanted to sell their lands. After
lifting of the writ of attachment.
consultation with her daughters, daughter-in-law, and grandchildren,
Agripina agreed to sell the properties. Petitioners, thus, authorized
Such, request was denied and thus the appeal to SC.
Nicanor, through a Special Power of Attorney, to negotiate for the
sale of the properties.6
Issue:
Sometime in 1999, Nicanor offered to sell the properties to Solar Did the CA erred in the lifting of the writ of preliminary
Resources, Inc. (Solar). Solar allegedly agreed to purchase the three attachment?
parcels of land, together with the 10,000-square-meter property
owned by a certain Rustica Aledia, for ₱35,000,000.00. Petitioners Held:
alleged that Nicanor was supposed to remit to them the total amount
of ₱28,000,000.00 or ₱9,333,333.00 each to Sofia, Fructosa, and the Petitioners maintain that in the case at bar, as in the case of FCY
heirs of Mario. Construction Group, Inc. v. Court of Appeals, 33 the only way the
subject writ of attachment can be dissolved is by a counter-bond.
However, Nicanor Satsatin never remitted the whole amount, he only They claim that the respondents are not allowed to file a motion to
remitted 9,000,000.00 to them. Thus the siblings filed a case of a dissolve the attachment under Section 13, Rule 57 of the Rules of
Complaint7 for sum of money and damages against Nicanor. Court. Otherwise, the hearing on the motion for the dissolution of the
Petitioners filed an Ex-Parte Motion for the Issuance of a Writ of writ would be tantamount to a trial on the merits, considering that the
Attachment,8 alleging among other things: that respondents are writ of preliminary attachment was issued upon a ground which is, at
about to depart the Philippines; that they have properties, real and the same time, the applicant’s cause of action.
personal in Metro Manila and in the nearby provinces; that the
amount due them is P19,000,000.00. Trial court orders to post a
bond in the amount of 7M before the issuance of the writ. However,
upon payment they have request for the writ to be served by the
Sheriff even without serving first the summons to the defendants. On
November 19, 2002, a copy of the writ of attachment was served
upon the respondents. On the same date, the sheriff levied the real
A writ of preliminary attachment is defined as a provisional remedy It goes without saying that whatever be the acts done by the Court
issued upon order of the court where an action is pending to be prior to the acquisition of jurisdiction over the person of defendant x x
levied upon the property or properties of the defendant therein, the x issuance of summons, order of attachment and writ of
same to be held thereafter by the sheriff as security for the attachment x x x these do not and cannot bind and affect the
satisfaction of whatever judgment that might be secured in the said defendant until and unless jurisdiction over his person is
action by the attaching creditor against the defendant. 36 eventually obtained by the court,  either by service on him of
summons or other coercive process or his voluntary submission to
In the case at bar, the CA correctly found that there was grave abuse the court’s authority. Hence, when the sheriff or other proper officer
of discretion amounting to lack of or in excess of jurisdiction on the commences implementation  of the writ of attachment, it is essential
part of the trial court in approving the bond posted by petitioners that he serve on the defendant not only a copy of the applicant’s
despite the fact that not all the requisites for its approval were affidavit and attachment bond, and of the order of attachment, as
complied with. In accepting a surety bond, it is necessary that all the explicitly required by Section 5 of Rule 57, but also
requisites for its approval are met; otherwise, the bond should be the summons addressed to said defendant as well as a copy of the
rejected.37 complaint x x x. (Emphasis supplied.)

Every bond should be accompanied by a clearance from the This Court held that the grant of the provisional remedy of
Supreme Court showing that the company concerned is qualified to attachment involves three stages: first, the court issues the order
transact business which is valid only for thirty (30) days from the date granting the application; second, the writ of attachment issues
of its issuance.38 However, it is apparent that the pursuant to the order granting the writ; and third, the writ is
Certification39 issued by the Office of the Court Administrator (OCA) implemented. For the initial two stages, it is not necessary that
at the time the bond was issued would clearly show that the bonds jurisdiction over the person of the defendant be first obtained.
offered by Western Guaranty Corporation may be accepted only in However, once the implementation of the writ commences, the
the RTCs of the cities of Makati, Pasay, and Pasig. Therefore, the court must have acquired jurisdiction over the defendant, for
surety bond issued by the bonding company should not have been without such jurisdiction, the court has no power and authority
accepted by the RTC of Dasmariñas, Branch 90, since the to act in any manner against the defendant. Any order issuing
certification secured by the bonding company from the OCA at the from the Court will not bind the defendant.
time of the issuance of the bond certified that it may only be
accepted in the above-mentioned cities. Thus, the trial court acted
with grave abuse of discretion amounting to lack of or in excess of Mangila vs CA, G.R. No. 125027            August 12, 2002
jurisdiction when it issued the writ of attachment founded on the said
bond. Facts:

Moreover, in provisional remedies, particularly that of preliminary Petitioner Anita Mangila ("petitioner" for brevity) is an exporter of sea
attachment, the distinction between the issuance and the foods and doing business under the name and style of Seafoods
implementation of the writ of attachment is of utmost importance to Products. Private respondent Loreta Guina ("private respondent" for
the validity of the writ. The distinction is indispensably necessary to brevity) is the President and General Manager of Air Swift
determine when jurisdiction over the person of the defendant should International, a single registered proprietorship engaged in the freight
be acquired in order to validly implement the writ of attachment upon forwarding business.
his person.
Sometime in January 1988, petitioner contracted the freight application; second, the writ of attachment issues pursuant to the
forwarding services of private respondent for shipment of petitioner’s order granting the writ; and third, the writ is implemented. For the
products, such as crabs, prawns and assorted fishes, to Guam initial two stages, it is not necessary that jurisdiction over the
(USA) where petitioner maintains an outlet. Petitioner agreed to pay person of the defendant be first obtained.  However, once the
private respondent cash on delivery. Private respondent’s invoice implementation of the writ commences,  the court must have
stipulates a charge of 18 percent interest per annum on all overdue acquired jurisdiction over the defendant for without such jurisdiction,
accounts. In case of suit, the same invoice stipulates attorney’s fees the court has no power and authority to act in any manner against
equivalent to 25 percent of the amount due plus costs of suit. the defendant. Any order issuing from the Court will not bind the
defendant.
Mangila did pay Guina only on the first shipment and the rest was not
paid. Despite demands, Mangila never paid Guina thus she filed a The trial court had the authority to issue the Writ of Attachment on
case for collection of sum of money before the RTC of Pasay. The September 27 since a motion for its issuance can be filed "at the
respondent filed a motion for a preliminary attachment against the commencement of the action." However, on the day the writ was
petitioner due to the fact that according to the sheriff the petitioner implemented, the trial court should have, previously or
change residence to Guagua Pampanga and then left for Guam. simultaneously with the implementation of the writ, acquired
With this the trial court issued a writ of PA. On November 7, 1988, jurisdiction over the petitioner. Yet, as was shown in the records of
petitioner filed an Urgent Motion to Discharge Attachment 8 without the case, the summons was actually served on petitioner several
submitting herself to the jurisdiction of the trial court. She pointed out months after the writ had been implemented.
that up to then, she had not been served a copy of the Complaint
and the summons. Hence, petitioner claimed the court had not In conclusion, we hold that the alias summons belatedly served on
acquired jurisdiction over her person. petitioner cannot be deemed to have cured the fatal defect in the
enforcement of the writ. The trial court cannot enforce such a
On December 26, 1988, private respondent applied for an alias coercive process on petitioner without first obtaining jurisdiction over
summons, which the trial court issued on January 19, 1989. 11 It was her person. The preliminary writ of attachment must be served after
only on January 26, 1989 that summons was finally served on or simultaneous with the service of summons on the defendant
petitioner. whether by personal service, substituted service or by publication as
warranted by the circumstances of the case. 27 The subsequent
The case reached CA which affirms the issuance of the writ of PA service of summons does not confer a retroactive acquisition of
thus this appeal to SC. jurisdiction over her person because the law does not allow for
retroactivity of a belated service.
Issue:
Chudian vs Sandinganbayan
WHETHER RESPONDENT COURT ERRED IN NOT HOLDING G.R. No. 139941       January 19, 2001
THAT THE WRIT OF ATTACHMENT WAS IMPROPERLY ISSUED
AND SERVED? Facts:

Held: Chuidian allegedly used false pretenses to induce the officers of the
Philippine Export and Foreign Loan Guarantee Corporation
we have held that the grant of the provisional remedy of attachment (PHILGUARANTEE), the Board of Investments (BOI) and the Central
involves three stages: first, the court issues the order granting the Bank, to facilitate the procurement and issuance of a loan guarantee
in favor of the Asian Reliability Company, Incorporated (ARCI) (3) Chuidian has removed or disposed of his property with the intent
sometime in September 1980. ARCI, 98% of which was allegedly of defrauding the plaintiff as justified under Section 1(c) of Rule 57;
owned by Chuidian, was granted a loan guarantee of Twenty-Five and
Million U.S. Dollars (US$25,000,000.00). While ARCI represented to
Philguarantee that the loan proceeds would be used to establish five (4) Chuidian is residing out of the country or one on whom summons
inter-related projects in the Philippines, Chuidian reneged on the may be served by publication, which justifies the writ of attachment
approved business plan and instead invested the proceeds of the prayed for under Section 1(e) of the same rule.
loan in corporations operating in the United States, more particularly
Dynetics, Incorporated and Interlek, Incorporated. Although ARCI Chuidian however opposed the said motion by the following grounds:
had received the proceeds of the loan guaranteed by Philguarantee,
the former defaulted in the payments thereof, compelling
Philguarantee to undertake payments for the same. Consequently, in
June 1985, Philguarantee sued Chuidian before the Santa Clara (1) The plaintiff's affidavit appended to the motion was in form and
County Superior Court,1 charging that in violation of the terms of the substance fatally defective;
loan, Chuidian not only defaulted in payment, but also misused the
funds by investing them in Silicon Valley corporations and using (2) Section 1(b) of Rule 57 does not apply since there was no
them for his personal benefit. Chuidian claimed that he himself was a fiduciary relationship between the plaintiff and Chuidian;
victim of the systematic plunder perpetrated by the Marcoses as he
was the true owner of these companies, and that he had in fact (3) While Chuidian does not admit fraud on his part, if ever there was
instituted an action before the Federal Courts of the United States to breach of contract, such fraud must be present at the time the
recover the companies which the Marcoses had illegally wrested contract is entered into;
from him.
(4) Chuidian has not removed or disposed of his property in the
After the PPII, The PCGG commenced an action against Chuidian in absence of any intent to defraud plaintiff;
the Sandiganbayan among other cronies of the Marcoses. The
PCGG filed for a preliminary attachment against the letters of credits
(5) Chuidian's absence from the country does not necessarily make
from Philguarantee amounting to Four Million Four Hundred
him a non-resident; and
Thousand Dollars (US$4,400,000.00). The PCGG cited the following
grounds:
(6) Service of summons by publication cannot be used to justify the
issuance of the writ since Chuidian had already submitted to the
jurisdiction of the Court by way of a motion to lift the freeze order
(1) Chuidian embezzled or fraudulently misapplied the funds of ARCI
filed through his counsel.
acting in a fiduciary capacity, justifying issuance of the writ under
Section 1(b), Rule 57 of the Rules of Court;
The Sandiganbayan ruled in favor of the Republic and thus the
Letters of Credits were subsequently attached until proceedings are
(2) The writ is justified under Section 1(d) of the same rule as
decided by the Sandiganbayan. In spite of the contentions of
Chuidian is guilty of fraud in contracting the debt or incurring the
Chuidian the Sandiganbayan both denied the First MR and the
obligation upon which the action was brought, or that he concealed
second MR.
or disposed of the property that is the subject of the action;
Thus, this appeal to SC thru a petition for certiorari. hearing on such a motion for dissolution of the writ would be
tantamount to a trial of the merits of the action. In other words, the
Issue: merits of the action would be ventilated at a mere hearing of a
motion, instead of at the regular trial.34 (Underscoring ours)
What can the herein petitioner do to quash the attachment of the
L/C?  Thus, this Court has time and again ruled that the merits of the action
Held: in which a writ of preliminary attachment has been issued are not
triable on a motion for dissolution of the attachment, otherwise an
To file a counterbond in accordance with Rule 57, Section 12 or To applicant for the lifting of the writ could force a trial of the merits of
quash the attachment on the ground that it was irregularly or the case on a mere motion.35
improvidently issued, as provided for in Section 13 of the same Rule.
Chuidian chose the later, because the grounds he raised assail the LUZON DEVELOPMENT BANK vs ERLINDA KRISHNAN
propriety of the issuance of the writ of attachment. By his own G.R. No. 203530, April 13, 2015
admission, however, he repeatedly acknowledged that his
justifications to warrant the lifting of the attachment are facts or Facts:
events that came to light or took place after the writ of attachment
had already been implemented. Erlinda claimed that she is a client of respondent bank wherein she
maintained several accounts including time deposits. On several
It is clear that these grounds have nothing to do with the issuance of occasions, when respondent Erlinda presented her Time Deposits
the writ of attachment. Much less do they attack the issuance of the Certificates amounting to P28,597,472.70 for payment because they
writ at that time as improper or irregular. And yet, the rule have become due, petitioners refused to honor them for the reason
contemplates that the defect must be in the very issuance of the that they were fraudulent. Respondent Erlinda likewise applied for a
attachment writ. Preliminary Writ of Attachment which the RTC granted on February
27, 2001.
We have uniformly held that:
By virtue of the writ, petitioner bank's accounts in BPI Family Bank,
x x x when the preliminary attachment is issued upon a ground which Calamba, Laguna in the amount of P28,597,472.70 and its account
is at the same time the applicant's cause of action; e.g., "an action amounting to P49,000,000.00 in the Central Bank were garnished.
for money or property embezzled or fraudulently misapplied or
converted to his own use by a public officer, or an officer of a On March 9, 2001, petitioners filed an urgent ex-parte Motion to
corporation, or an attorney, factor, broker, agent, or clerk, in the Recall Quash and/or Lift Attachment or Garnishment (in excess of
course of his employment as such, or by any other person in a amounts in the writ). Respondent Erlinda opposed the motion.
fiduciary capacity, or for a willful violation of duty," or "an action
against a party who has been guilty of fraud in contracting the debt or The issue went to the 7th Division of the SC by certiorari and was
incurring the obligation upon which the action is brought," the remanded back to the RTC for the filing of the bond and counter
defendant is not allowed to file a motion to dissolve the attachment bond for the attachment.
under Section 13 of Rule 57 by offering to show the falsity of the
factual averments in the plaintiff's application and affidavits on which Meanwhile, on July 3, 2009, petitioners filed an Omnibus Motion
the writ was based – and consequently that the writ based thereon praying that a hearing be held to determine the sufficiency of the
had been improperly or irregularly issued – the reason being that 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 From the foregoing, it is evidently clear that once the writ of
abeyance. 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-
The Writ of Attachment was reinstated due to the failure of the Bank bond. Thus, the Court holds that petitioner's argument that it has the
to post a counter bond. option to deposit real property instead of depositing cash or filing a
counter-bond to discharge the attachment or stay the implementation
The Bank filed MR but both were denied. Thus this appeal to the SC. thereof is unmeritorious.

Issue: NORTHERN ISLANDS, CO., INC., Petitioner, v. SPOUSES DENNIS

AND CHERYLIN* GARCIA, DOING BUSINESS UNDER THE NAME
the issue for our resolution is whether the CA erred in affirming the AND STYLE “ECOLAMP MULTI RESOURCES,”
RTC's decision which denied petitioners' motion praying that bank
property be deposited in lieu of cash or a counter-bond G.R. No. 203240, March 18, 2015

Held: Facts:

Section 2, Rule 57 of the Rules of Court explicitly states that "[a]n On September 23, 2005, petitioner Northern Islands Co., Inc.
order of attachment may be issued either ex parte or upon motion (petitioner) filed a Complaint4 with application for a writ of preliminary
with notice and hearing by the court in which the action is pending, or attachment, before the RTC against respondents, petitioner caused
by the Court of Appeals or the Supreme Court, and must require the the delivery to respondents of various appliances in the aggregate
sheriff of the court to attach so much of the property in the amount of P8,040,825.17;7 (b) the goods were transported, shipped,
Philippines of the party against whom it is issued, not exempt from and delivered by Sulpicio Lines, Inc., and were accepted in good
execution, as may be sufficient to satisfy the applicant's order and condition by respondents’ representatives; 8 (c)  the parties
demand, unless such party makes deposit or gives a bond as agreed that the goods delivered were payable within 120 days, and
hereinafter provided in an amount equal to that fixed in the that the unpaid amounts would earn interest at a rate of eighteen
order, which may be the amount sufficient to satisfy the applicant's percent (18%) per annum. They were not paid despite repeated
demand or the value of the property to be attached as stated by the demands and the respondents fraudulently asserted that petitioner
applicant, exclusive of costs." had no proof that they  had indeed received the quantity of the
subject goods.
Section 5 of the same Rule likewise states that "[t]he sheriff
enforcing the writ shall without delay and with all reasonable The respondents claim that the attached properties is excessive as
diligence attach, to await judgment and execution in the action, only the total attached properties is valued at amounted to
so much of the property in the Philippines of the party against whom P17,273,409.73, while the attachment bond is only in the amount of
the writ is issued, not exempt from execution, as may be sufficient to P8,040,825.17.
satisfy the applicant's demand, unless the former makes a deposit
with the court from which the writ is issued, or gives a counter- On July 25, 2006, respondents filed a Motion for Partial
bond executed to the applicant, in an amount equal to the bond Reconsideration of the Order dated June 21, 2006, specifically
fixed by the court in the order of attachment or to the value of assailing the denial of their Motion to Discharge Excess Attachment.
the property to be attached, exclusive of costs." 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 the RTC’s loss of jurisdiction over the Main Case necessarily comes
as to ascertain if the attachment was excessive.  Also, they prayed its loss of jurisdiction over all matters merely ancillary thereto. It is an
that the order for production and inspection be modified and that auxiliary remedy and cannot have an independent existence apart
petitioner be ordered to produce the original documents anew for from the main suit or claim instituted by the plaintiff against the
their inspection and copying. defendant. Being merely ancillary to a principal proceeding, the
attachment must fail if the suit itself cannot be maintained as
The motion was denied by the RTC in releasing the excess until such the purpose of the writ can no longer be justified.
commissioner is finished with the assessment thus this appeal to the
CA. The consequence is that where the main action is appealed, the
attachment which may have been issued as an incident of that
The CA reiterated that (a) on the issue of attachment, trial by action, is also considered appealed and so also removed from the
commissioners under Rule 32 of the Rules of Court was proper so jurisdiction of the court a quo.  The attachment itself cannot be the
that the parties may finally settle their conflicting valuations; 35 and (b) subject of a separate action independent of the principal action
on the matter of discovery, petitioner could not be compelled to because the attachment was only an incident of such action.
produce the originals sought by respondents for inspection since
they were not in the former’s possession. EXCELLENT QUALITY APPAREL, INC., Petitioner, v. VISAYAN
SURETY & INSURANCE CORPORATION
Issue:
G.R. No. 212025, July 01, 2015
The issues presented for the Court’s resolution are: (a) whether the
RTC had lost jurisdiction over the matter of the preliminary Facts:
attachment after petitioner appealed the decision in the Main Case,
and thereafter ordered the transmittal of the records to the CA; and Excellent Quality Apparel, Inc. (petitioner), then represented by Max
(b) whether the CA erred in ordering the appointment of a L.F. Ying (Ying), Vice-President for Productions, and Alfiero R.
commissioner and the subsequent discharge of any excess Orden, Treasurer, entered into a contract with Multi-Rich Builders
attachment found by said commissioner. (Multi-Rich), a single proprietorship, represented by Wilson G. Chua,
its President and General Manager, for the construction of a garment
Held: factory within the Cavite Philippine Economic Zone Authority
(CPEZA).
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 Win Multi-Rich filed a complaint for sum of money and damages
the perfection of the appeals filed in due time and the expiration against petitioner and Ying before the RTC. 5 It also prayed for the
of the time to appeal of the other parties. issuance of a writ of attachment, claiming that Ying was about to
abscond and that petitioner had an impending closure. Win Multi-
In this case,  petitioner had duly perfected its appeal of the RTC’s Rich then secured the necessary bond in the amount of
September 21, 2011 Decision resolving the Main Case through the P8,634,448.20 from respondent Visayan Surety and Insurance
timely filing of its Notice of Appeal dated October 27, 2011, together Corporation (Visayan Surety). RTC issued the writ of preliminary
with the payment of the appropriate docket fees. The RTC, in an attachment in favor of Win.
Order39 dated January 25, 2012, had actually confirmed this fact, and
thereby ordered the elevation of the entire records to the CA. With
On April 26, 2004, petitioner filed its Answer with Compulsory 1. The application for damages must be filed in the
Counterclaim11 before the RTC. It denied the material allegation of same case where the bond was
the complaint and sought the immediate lifting of the writ of issued;chanRoblesvirtualLawlibrary
attachment. It also prayed that the bond filed by Win Multi-Rich to
support its application for attachment be held to satisfy petitioner's 2. Such application for damages must be filed before
claim for damages due to the improper issuance of such writ. the entry of judgment; and

However, Win filed a motion to release the cash deposit to it and the 3. After hearing with notice to the surety.
Far Eastern Surety released the funds to Win even before the trial
began. Petitioner filed a petition for certiorari16 under Rule 65 of the The first and second requisites, as stated above, relate to the
1997 Rules of Civil Procedure before the CA. The petition sought to. application for damages against the bond. An application for
annul and set aside the April 12, 2004 and April 29, 2004 Orders of damages must be filed in the same case where the bond was issued,
the RTC. Petitioner then filed its Supplemental Manifestation and either (a) before the trial or (b) before the appeal is perfected or (c)
Motion,17 asserting that its cash deposit with the RTC was turned before the judgment becomes executory. 45 The usual procedure is to
over to Win Multi-Rich. The RTC did not ruled over the validity file an application for damages with due notice to the other party and
his sureties. The other method would be to incorporate the
Excellent Quality did raise the issue to the CA by way of Rule 65 but application in the answer with compulsory counterclaim. 46redarclaw
did not receive a favorable decision thus raised the issue to SC by
Rule 45 and SC instructed for Win to return the cash deposit back to The purpose of requiring the application for damages to be filed in
Excellent Quality. the same proceeding is to avoid the multiplicity of suit and forum
shopping. It is also required to file the application against the bond
During the execution of judgement Win Corporation, Far Eastern before the finality of the decision to prevent the alteration of the
Surety and Visayan Surety were change to return the cash deposit immutable judgment.
plus damages due to the improper attachment. Thus this was raise to
the SC again for determination who shall pay the damages and the Visayan Surety was not held liable as no notice was served which is
return of the cash deposit. a requisite for Sec 20 Rule 57 to be applied.
Issue: In the present case, petitioner's answer with compulsory
counterclaim, which contained the application for damages, was not
Who is liable to pay the damages against Excellent for improper served on Visayan Surety.59 Also, a perusal of the records60 revealed
attachment? that Visayan Surety was not furnished any copies of the pleadings,
motions, processes, and judgments concerned with the application
Held: for damages against the surety bond. Visayan Surety was only
notified of the application when the motion for execution was filed by
the Court has cited the requisites under Section 20, Rule 57 in order petitioner on June 29, 2009, after the judgment in G.R. No. 175048
to claim damages against the bond, as follows:LawlibraryofCRAlaw had become final and executory on June 2, 2009.
ChanRoblesVirtualawlibrary
For FESICO, the Court said that, 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. 63 In this case, however,
Win Multi-Rich was able to withdraw the cash deposit and, in WATERCRAFT VENTURE CORPORATION, REPRESENTED BY
exchange, it posted a surety bond of FESICO in favor of petitioner to ITS VICE-PRESIDENT, ROSARIO E.
answer for the damages that the latter may sustain. RAÑOA, Petitioner, v. ALFRED RAYMOND WOLFE, Respondent.

Corollarily, the surety bond of FESICO substituted the cash deposit FACTS:
of petitioner as a security for the judgment. Thus, to claim damages
from the surety bond of FESICO, Section 17, Rule 57 could be Watercraft is engaged in the business of building, repairing, storing
applied. and maintaining yachts, boats and other pleasure crafts at the Subic
Bay Freeport Zone, Subic, Zambales. While Wolfe is one of their
When the judgment has become executory, the surety or sureties on hired employees as Shipyard Manager. According to them Wolfe
any counter-bond given pursuant to the provisions of this Rule to owed the company (US$16,324.82) representing unpaid boat
secure the payment of the judgment shall become charged on such storage fees for the period of June 1997 to June 2002. Despite
counter-bond and bound to pay the judgment obligee upon demand repeated demands, he failed to pay the said amount. Thus the
the amount due under the judgment, which amount may be company filed a case for sum of collection of money with an
recovered from such surety or sureties after notice and summary application for a writ of preliminary attachment in the RTC of
hearing in the same action. Malabon City.
From a reading of the above-quoted provision, it is evident that a
However, Wolfe claimed in his answer that such act was an off shoot
surety on a counter-bond given to secure the payment of a judgment
case against him in his pending labor dispute case with the Labor
becomes liable for the payment of the amount due upon:
Arbiter. That the said amount is not true as the ship was bought by
the owners of watercraft themselves and he being an agent to such
(1) demand made upon the surety; and
sale actually have a 10% commission based on such sale. Such
sailboat was used for training purposes of its staff. He also alleged
(2) notice and summary hearing on the same action.
that there was no fraud on the allegations as a mere failure to
perform an obligation or failure to pay does not constitute fraud. That
Here, the Court is convinced that a demand against FESICO had fraud must be alleged with particularity but in this case there is none,
been made, and that it was given due notice and an opportunity to be thus preliminary attachment should be lifted.
heard on its defense. 
The RTC still issued writ of preliminary attachment on the properties
Indeed, FESICO cannot escape liability on its surety bond issued in of Wolfe. His MR was also denied and thus he appealed to the CA by
favor of petitioner. The purpose of FESICO's bond was to secure the a petition for certiorari.
withdrawal of the cash deposit and to answer any damages that CA ruled in favor of Wolfe, thus Watercraft elevated the issue to the
would be inflicted against petitioner in the course of the SC by way of certiorari.
proceedings.72 Also, the undertaking73 signed by FESICO stated that
the duration of the effectivity of the bond shall be from its approval by Issue:
the court until the action is fully decided, resolved or terminated.
WHETHER THE  EX-PARTE ISSUANCE OF THE PRELIMINARY
G.R. No. 181721, September 09, 2015 ATTACHMENT BY THE TRIAL COURT IN FAVOR OF THE
PETITIONER IS VALID.
WHETHER THE ALLEGATIONS IN THE AFFIDAVIT OF MERIT payment of the debt or failure to comply with his obligation. 28  The
CONCERNING FRAUD ARE SUFFICIENT TO WARRANT THE particulars of such circumstances necessarily include the time,
ISSUANCE OF A PRELIMINARY WRIT OF ATTACHMENT BY THE persons, places and specific acts of fraud committed.29 An affidavit
TRIAL COURT IN FAVOR OF THE PETITIONER. which does not contain concrete and specific grounds is inadequate
to sustain the issuance of such writ. In fact, mere general averments
Held: render the writ defective and the court that ordered its issuance
acted with grave abuse of discretion amounting to excess of
A writ of preliminary attachment is defined as a provisional remedy jurisdiction.
issued upon order of the court where an action is pending to be
levied upon the property or properties of the defendant therein, the G.R. No. 193821, November 23, 2015
same to be held thereafter by the sheriff as security for the PHIL-AIR CONDITIONING CENTER, Petitioner, v. RCJ LINES AND
satisfaction of whatever judgment that might be secured in the said ROLANDO ABADILLA, JR., Respondent.
action by the attaching creditor against the defendant. However, it
should be resorted to only when necessary and as a last remedy Facts:
because it exposes the debtor to humiliation and annoyance. It must
be granted only on concrete and specific grounds and not merely on Phil Air had a contract with RCJ Lines for four Carrier Paris 240 air-
general averments quoting the words of the rules. Since attachment conditioning units for buses. Its total purchases amounted to
is harsh, extraordinary, and summary in nature, the rules on the P1,240,000.00. RCJ Lines did not pay the whole amount they only
application of a writ of attachment must be strictly construed in favor paid 400,000, and thus despite repeated demands they did not pay
of the defendant. Phil Air. Phil-Air filed a case for sum of money with prayer for the
issuance of a writ of preliminary attachment with the RTC. In its
The mere filing of an affidavit reciting the facts required by Section 3, Answer, RCJ said that it purchased the units in the total amount of
Rule 57, however, is not enough to compel the judge to grant the writ PI,240,000.00 and that it had only paid P400,000.00. It refused to
of preliminary attachment. Whether or not the affidavit sufficiently pay the balance because Phil-Air allegedly breached its warranty that
established facts therein stated is a question to be determined by the the units did not sufficiently cool the buses despite repeated repairs.
court in the exercise of its discretion. The sufficiency or insufficiency Phil-Air purportedly represented that the units were in accord with
of an affidavit depends upon the amount of credit given it by the RCJ Lines' cooling requirements as shown in Phil-Air's price
judge, and its acceptance or rejection, upon his sound discretion. quotation. The RTC granted the application for the issuance of a writ
of preliminary attachment after Phil-Air posted an attachment bond in
After a careful perusal of the foregoing; allegations, the Court agrees the amount of P1,656,000.00 and the two buses of RCJ lines were
with the CA that Watercraft failed to state with particularity the attached. RCJ lines filed an urgent motion to discharge the
circumstances constituting fraud, as required by Section 5,24  Rule 8 preliminary attachment by posting a counter bond.
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 RCJ Lines wins the case in the RTC and CA, thus Phil Air appeal to
showing that such failure was due to insidious machinations and the SC for resolution:
intent on his part to defraud Watercraft of the amount due it.
Issue:
the applicant for a writ of preliminary attachment must sufficiently
show the factual circumstances of the alleged fraud because 2)Whether Phil-Air should reimburse RCJ Lines for the counter-
fraudulent intent cannot be inferred from the debtor's mere non- bond premium and its alleged unrealized profits;
(3) The counter-bond stands in place of the property so released.
Whether RCJ Lines proved its alleged unrealized profits arising
from the enforcement of the preliminary writ of attachment To be clear, the discharge of the attachment by depositing cash or
posting a counter-bond under Section 12 should not be confused
with the discharge sanctioned under Section 13. Section 13 speaks
of discharge on the ground that the writ was improperly or irregularly
Held: issued or enforced, or that the attachment bond is insufficient, or that
the attachment is excessive.
"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 To reiterate, the discharge under Section 12 takes effect upon
the issuance of the writ, conditioned that the latter will pay all the posting of a counter-bond or depositing cash, and after hearing to
costs that may be adjudged to the adverse party and all determine the sufficiency of the cash deposit or counter-bond. On the
damages that he may sustain by reason of the attachment, if the other hand, the discharge under Section 13 takes effect only upon
court shall finally adjudge that the applicant was not entitled showing that the plaintiffs attachment bond was improperly or
thereto." irregularly issued, or that the bond is insufficient. The discharge of
the attachment under Section 13 must be made only after hearing.
The enforcement of the writ notwithstanding, the party whose
property is attached is afforded relief to have the attachment lifted. These differences notwithstanding, the discharge of the preliminary
attachment either through Section 12 or Section 13 has no effect on
There are various modes of discharging an attachment under Rule and does not discharge the attachment bond. The dissolution of
57, viz.: the preliminary attachment does not result in the dissolution of
(1) by depositing cash or posting a counter-bond under Section 12; 52  the attachment bond.
(2) by proving that the attachment bond was improperly or irregularly
issued or enforced, or that the bond is insufficient under Section In the present case, the RTC lifted the preliminary attachment after it
13;53  heard RCJ Lines' urgent motion to discharge attachment and the
(3) by showing that the attachment is excessive under Section 13; latter posted a counter-bond. The RTC found that there was no fraud
and and Phil-Air had no sufficient cause of action for the issuance of the
(4) by claiming that the property is exempt from execution under writ of the attachment. As a consequence, it ordered Phil-Air to
Section 2.54 refund the premium payment for the counter-bond and the losses
suffered by RCJ Lines resulting from the enforcement of the writ.
Under the first mode, the court will order the discharge of the
attachment after (1) the movant makes a cash deposit or posts a As discussed above, it is patent that under the Rules, the attachment
counter-bond and (2) the court hears the motion to discharge the bond answers for all damages incurred by the party against whom
attachment with due notice to the adverse party. the attachment was issued.60

The amount of the cash deposit or counter-bond must be equal to Thus, Phil-Air cannot be held directly liable for the costs adjudged to
that fixed by the court in the order of attachment, exclusive of costs. and the damages sustained by RCJ Lines because of the
The cash deposit or counter-bond shall secure the payment of any attachment. Section 4 of Rule 57 positively lays down the rule that
judgment that the attaching party may recover in the action. 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."