PROVISIONAL REMEDIES Rule 57 Section 14: Proceedings where property claimed by third person.

Prepared by: Kristine Quibod LLB3 Manresa CODAL PROVISIONS Who claims the attached property in this case? What do they do in these circumstances? 1.) any person other than the party against whom attachment had been issued or 2.) his agent 1.) makes an affidavit of his title thereto, or right to the possession thereof, stating the grounds of such right or title, and 2.) serves such affidavit upon the sheriff while the latter has possession of the attached party, and a copy thereof upon the attaching party,

What shall the sheriff do?

General Rule: The sheriff shall not be bound to keep the property under attachment, Exception: unless the attaching party or his agent, on demand of the sheriff, shall file a bond approved by the court to indemnify the third-party claimant in a sum not less than the value of the property levied upon.

What if there is an agreement to the value?

In case of disagreement as to such value, the same shall be decided by the court issuing the writ of attachment.

General Rule: No claim for damages for the taking or keeping of the property may be enforced against the bond Exception: unless the action therefore is filed within one hundred twenty (120) days from the date of the filing of the bond. The sheriff shall not be liable for damages for the taking or keeping of such property, to any such third-party claimant, if such bond shall be filed. Nothing herein contained such prevent such claimant or any third person from vindicating his claim to the property, or prevent the attaching party from claiming damages against a third-party claimant who filed a frivolous or plainly spurious claim, in the same or a separate action. CASES CASE UY VS COURT OF APPEALS The main issue in this case is whether or not properties levied and seized by virtue of a writ of attachment and later by a writ of execution, were under custodia legis and therefore not subject to the jurisdiction of another co-equal court where a third party claimant claimed ownership of the same properties. DOCTRINE The issue has long been laid to rest in the case of Manila Herald Publishing Co. Inc. v. Ramos (88 Phil. 94 [1951]) where the Court filed that while it is true that property in custody of the law may not be interfered with, without the permission of the proper court, this rule is confined to cases where the property belongs to the defendant or one in which the defendant has proprietary interests. But when the Sheriff, acting beyond the bounds of his office seizes a stranger's property, the rule does not apply and interference with his custody is not interference with another court's order of attachment. Neither can petitioner complain that they were denied their day in court when the Regional Trial Court issued a writ of preliminary attachment without hearing as it is well settled that its issuance may be made by the court ex parte. As clearly explained by this Court, no grave abuse of discretion can be ascribed to respondent Judge in the issuance of a writ of attachment without notice to petitioners as there is nothing in the Rules of Court which makes notice and hearing indispensable and mandatory requisites in its issuance. (Filinvest Credit Corp. v. Relova, 117 SCRA 420 [1982]; Belisle Investment & Finance Co. Inc. v. State Investment House, Inc. 151 SCRA 631 [1987]; Toledo v. Burgos, 168 SCRA 513 [1988]). In addition, petitioner's motion to quash or discharge the questioned attachment in the court a quo is in effect a motion for reconsideration which cured any defect of absence of notice. (Dormitorio v. Fernandez, 72 SCRA 388 [1976]). Estoppel is likewise unavailing in the case at bar by the mere fact that private respondent Ting (complainant in the court a quo) pointed the items and merchandise taken from the Mansion House

and nearby Bodega which were levied and hauled by Special Sheriff Cabang, where in the report of said Sheriff made earlier on April 6, 1982, he stated that on the same occasion referred to in his Partial Return, private respondents denied Sy Yuk Tat's ownership over the goods in question. (Rollo, pp. 203-204). In like manner, the sale of the disputed properties at the public auction, in satisfaction of a judgment of a co-equal court does not render the case moot and academic. The undeviating ruling of this Court in such cases is that attachment and sale of properties belonging to a third person is void because such properties cannot be attached and sold at public auction for the purpose of enforcing a judgment against the judgment debtor. (Orosco v. Nepomuceno, 57 Phil. 1007 [1932-33]). MANILA HERALD PUBLISHING VS RAMOS We are the opinion that the court acted with grave abuse of discretion if not in excess of its jurisdiction in dismissing the case without any formal motion to dismiss. The foregoing conclusions should suffice to dispose of this proceeding for certiorari, but the parties have discussed the second question and we propose to rule upon it if only to put out of the way a probable cause for future controversy and consequent delay in the disposal of the main cause. Section 14 of rule 59, which treats of the steps to betaken when property attached is claimed by the other person than that defendant or his agent, contains the proviso that "Nothing herein contained shall prevent such third person from vindicating his claim to the property by any proper action." What is "proper action"? Section 1 of Rule 2 defines action as "an ordinary suit in court of justice, by which one party prosecutes another for the enforcement or protection of a right, or the prevention or redress of a wrong," while section 2, entitled "Commencement of Action," says that "civil action may be commenced by filing a complaint with the court." "Action" has acquired a well-define, technical meaning, and it is in this restricted sense that the word "action" is used in the above rule. In employing the word "commencement" the rule clearly indicates an action which originates an entire proceeding and puts in motion the instruments of the court calling for summons, answer, etc, and not any intermediary step taken in the course of the proceeding whether by the parties themselves or by a stranger. It would be strange indeed if the framers of the Rules of Court or the Legislature should have employed the term "proper action" instead of "intervention" or equivalent expression if the intention had been just that. It was all the easier, simplier and the more natural to say intervention if that had been the purpose, since the asserted right of the third-party claimant necessarily grows out of the pending suit, the suit in which the order of attachment was issued. The most liberal view that can be taken in favor of the respondents' position is that intervention as a means of protecting the third-party claimants' right is not exclusive but cumulative and suppletory to the right to bring a new, independent suit. It is significant that there are courts which go so far as to take the view that even where the statute expressly grants the right of intervention is such cases as this, the statute does not extend to owners of property attached, for, under this view, "it is considered that the ownership is not one of the essential questions to be determined in the litigation between plaintiff and defendant;" that "whether the property belongs to defendant or claimant, if determined, is considered as shedding no light upon the question in controversy, namely, that defendant is indebted to plaintiff." (See 7 C. J. S., 545 and footnote No. 89 where extracts from the decision in Lewis vs. Lewis, 10 N. W., 586, a leading case, are printed.) Separate action was indeed said to be the correct and only procedure contemplated by Act No. 190, intervention addition to, but not in substitution of, the old process. The new Rules adopted section 121 of Act No. 190 and added thereto Rule 24 (a) of the Federal Rules of Procedure. Combined, the two modes of redress are now section 1 of Rule 13, 1 the last clause of which is the newly added provision. The result is that, whereas, "under the old procedure, the third person could not intervene, he having no interest in the debt (or damages) sued upon by the plaintiff," under the present Rules, "a third person claiming to be the owner of such property may, not only file a thirdparty claim with the sheriff, but also intervene in the action to ask that the writ of attachment be quashed." (I Moran's Comments on the Rules of Court, 3rd Ed., 238, 239.) Yet, the right to inetervene, unlike the right to bring a new action, is not absolute but left to the sound discretion of the court to allow. This qualification makes intervention less preferable to an independent action from the standpoint of the claimants, at least. Because availability of intervention depends upon the court in which Case No. 11531 is pending, there would be assurance for the herein petitioners that they would be permitted to come into that case. Little reflection should disabuse the mind from the assumption that an independent action creates a

multiplicity of suits. There can be no multiplicity of suits when the parties in the suit where the attachment was levied are different from the parties in the new action, and so are the issues in the two cases entirely different. In the circumstances, separate action might, indeed, be the more convenient of the two competing modes of redress, in that intervention is more likely to inject confusion into the issues between the parties in the case for debt or damages with which the thirdparty claimant has nothing to do and thereby retard instead of facilitate the prompt dispatch of the controversy which is underlying objective of the rules of pleading and practice. That is why intervention is subject to the court's discretion. The same reasons which impelled us to decide the second question, just discussed, urge us to take cognizance of and express an opinion on the third. The objection that at once suggests itself entertaining in Case No. 12263 the motion to discharge the preliminary attachment levied in case No. 11531 is that by so doing one judge would intefere with another judge's actuations. The objection is superficial and will not bear analysis. It has been seen that a separate action by the third party who claims to be the owner of the property attached is appropriate. If this is so, it must be admitted that the judge trying such action may render judgment ordering the sheriff of whoever has in possession the attached property to deliver it to the plaintiff-claimant or desist from seizing it. It follows further that the court may make an interlocutory order, upon the filing of such bond as may be necessary, to release the property pending final adjudication of the title. Jurisdiction over an action includes jurisdiction over a interlocutory matter incidental to the cause and deemed necessary to preserve the subject matter of the suit or protect the parties' interests. This is self-evident. The fault with the respondents' argument is that it assumes that the Sheriff is holding the property in question by order of the court handling the case for libel. In reality this is true only to limited extent. That court did not direct the sheriff to attach the particular property in dispute. The order was for the sheriff to attach Borres', Padilla's and Pastor's property. He was not supposed to touch any property other than that of these defendants', and if he did, he acted beyond the limits of his authority and upon his personal responsibility. It is true of course that property in custody of the law can not be interferred with without the permission of the proper court, and property legally attached is property in custodia legis. But for the reason just stated, this rule is confined to cases where the property belongs to the defendant or one in which the defendant has proprietary interest. When the sheriff acting beyond the bounds of his office seizes a stranger's property, the rule does not apply and interference with his custody is not interference with another court's order of attachment. It may be argued that the third-party claim may be unfounded; but so may it be meritorious, for the matter. Speculations are however beside the point. The title is the very issue in the case for the recovery of property or the dissolution of the attachment, and pending final decision, the court may enter any interlocutory order calculated to preserve the property in litigation and protect the parties' rights and interests. None of what has been said is to be construed as implying that the setting aside of the attachment prayed for by the plaintiffs in Case No. 12263 should be granted. The preceding discussion is intended merely to point out that the court has jurisdiction to act in the premises, not the way the jurisdiction should be exercised. The granting or denial, as the case may be, of the prayer for the dissolution of the attachment would be a proper subject of a new proceeding if the party adversely affected should be dissatisfied. TRADERS ROYAL BANK VS IAC We find the petition devoid of merit. There is no question that the action filed by private respondent La Tondea, Inc., as third-party claimant, before the Regional Trial Court of Bulacan in Civil Case No. 7003-M wherein it claimed ownership over the property levied upon by Pasay City Deputy Sheriff Edilberto Santiago is sanctioned by Section 14, Rule 57 of the Rules of Court. Thus t.hqw If property taken be claimed by any person other than the party against whom attachment had been issued or his agent, and such person makes an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serves such affidavit upon the officer while the latter has possession of the property, and a copy thereof upon the attaching creditor, the officer shall not be bound to keep the property under the attachment, unless the attaching creditor or his agent, on demand of said officer, secures aim against such claim by a bond in a sum not greater than the value of the property attached. In case of disagreement as to such value, the same shall be decided by the court issuing the writ of attachment. The officer shall not be liable for damages, for

the taking or keeping of such property, to any such third-party claimant, unless such a claim is so made and the action upon the bond brought within one hundred and twenty (120) days from the date of the filing of said bond. But nothing herein contained shall prevent such third person from vindicating his claim to the property by proper action ... The foregoing rule explicitly sets forth the remedy that may be availed of by a person who claims to be the owner of property levied upon by attachment, viz: to lodge a third- party claim with the sheriff, and if the attaching creditor posts an indemnity bond in favor of the sheriff, to file a separate and independent action to vindicate his claim (Abiera vs. Court of Appeals, 45 SCRA 314). And this precisely was the remedy resorted to by private respondent La Tondea when it filed the vindicatory action before the Bulacan Court. Generally, the rule that no court has the power to interfere by injunction with the judgments or decrees of a concurrent or coordinate jurisdiction having equal power to grant the injunctive relief sought by injunction, is applied in cases where no third-party claimant is involved, in order to prevent one court from nullifying the judgment or process of another court of the same rank or category, a power which devolves upon the proper appellate court . 2 The purpose of the rule is to avoid conflict of power between different courts of coordinate jurisdiction and to bring about a harmonious and smooth functioning of their proceedings. It is further argued that since private respondent La Tondea, Inc., had voluntarily submitted itself to the jurisdiction of the Pasay Court by filing a motion to intervene in Civil Case No. 9894-P, the denial or dismissal thereof constitutes a bar to the present action filed before the Bulacan Court. We cannot sustain the petitioner's view. Suffice it to state that intervention as a means of protecting the third-party claimant's right in an attachment proceeding is not exclusive but cumulative and suppletory to the right to bring an independent suit. 3 The denial or dismissal of a third-party claim to property levied upon cannot operate to bar a subsequent independent action by the claimant to establish his right to the property even if he failed to appeal from the order denying his original third-party claim. CHING VS CA On the first issue, we agree with the petitioners that the petitioner-wife had the right to file the said motion, although she was not a party in Civil Case No. 142729.[48] In Ong v. Tating,[49] we held that the sheriff may attach only those properties of the defendant against whom a writ of attachment has been issued by the court. When the sheriff erroneously levies on attachment and seizes the property of a third person in which the said defendant holds no right or interest, the superior authority of the court which has authorized the execution may be invoked by the aggrieved third person in the same case. Upon application of the third person, the court shall order a summary hearing for the purpose of determining whether the sheriff has acted rightly or wrongly in the performance of his duties in the execution of the writ of attachment, more specifically if he has indeed levied on attachment and taken hold of property not belonging to the plaintiff. If so, the court may then order the sheriff to release the property from the erroneous levy and to return the same to the third person. In resolving the motion of the third party, the court does not and cannot pass upon the question of the title to the property with any character of finality. It can treat the matter only insofar as may be necessary to decide if the sheriff has acted correctly or not. If the claimants proof does not persuade the court of the validity of the title, or right of possession thereto, the claim will be denied by the court. The aggrieved third party may also avail himself of the remedy of terceria by executing an affidavit of his title or right of possessio n over the property levied on attachment and serving the same to the office making the levy and the adverse party. Such party may also file an action to nullify the levy with damages resulting from the unlawful levy and seizure, which should be a totally separate and distinct action from the former case. The above-mentioned remedies are cumulative and any one of them may be resorted to by one third-party claimant without availing of the other remedies.[50] In this case, the petitioner-wife filed her motion to set aside the levy on attachment of the 100,000 shares of stocks in the name of petitioner-husband claiming that the said shares of stocks were conjugal in nature; hence, not liable for the account of her husband under his continuing guaranty and suretyship agreement with the PBMCI. The petitioner-wife had the right to file the motion for said relief.

PRELIMINARY ATTACHMENT RULE 57 SECTION 15: Satisfaction of judgment out of property attached; return of sheriff. Prepared by: Kristine Quibod LLB3-Manresa CODAL PROVISIONS What will the sheriff do If the sheriff may cause the judgment to be satisfied out of the property attached, if it be sufficient for judgment be recovered by the that purpose attaching party and execution issue thereon In what manners? a.) by paying to the judgment obligee 1.) the proceeds of all sales of perishable or other property sold in pursuance of the order of the court, or 2.) so much as shall be necessary to satisfy the judgment; b.) If any balance remains due, 1.) by selling so much of the property, real or personal, as may be necessary to satisfy the balance, if enough for that purpose remain in the sheriff's hands, or in those of the clerk of the court; c.) 1.) By collecting from all persons having in their possession credits belonging to the judgment obligor, or owing debts to the latter at the time of the attachment of such credits or debts, the amount of such credits and debts as determine by the court in the action, and stated in the judgment, and 2.) paying the proceeds of such collection over to the judgment obligee. What shall the The sheriff shall forthwith make a return in writing to the court of his proceedings under this section and furnish the sheriff do? parties with copies thereof.

CASES CASE TAYABAS LAND VS SHARRUF DOCTRINE The proceeding thus indicated as proper, in order to subject a debt or credit is known in American civil procedure as the process of garnishment; and it may be truly said that garnishment is one of the simplest processes, and the least involved in technicalities, of any proceeding known to the law. It consists in the citation of some stranger to the litigation, who is debtor to one of the parties to the action. By this means such debtor stranger becomes a forced intervenor; and the court, having acquired jurisdiction over his person by means of the citation, requires him to pay his debt, not to his former creditor, but to the new creditor, who is creditor in the main litigation. It is merely a case of involuntary novation by the substitution of one creditor for another. Upon principle the remedy is a species of attachment or execution for reaching any property pertaining to a judgment debtor which may be found owing to such debtor by a third person. The situation involved supposes the existence of at least three persons, to wit, a judgment creditor, a judgment debtor, and the garnishee, or person cited, who in turn is supposed to be indebted to the first debtor (i.e., judgment debtor). To proceed a little further with the barest details of the process of garnishment, we note that a citation issues from the court having jurisdiction of the principal litigations, notifying the garnishee that the property and credits of the judgment debtor have been levied upon or attached in the hands of such garnishee, and enjoining him not to deliver, transfer, or otherwise dispose of any effects or credits belonging to that person, and requiring him furthermore to make a statement to the court of the property of the judgment debtor in his hands and of the debts owing by the garnishee to such debtor. In cases where indebtedness is admitted, as not infrequently occurs, the payment of the money by the garnishee to the judgment creditor or into court, brings the proceeding to a close, so far as the garnishee is concerned; but if the garnishee fails to answer, or does not admit the indebtedness, he may be required to attend before the court in which the action is pending to be examined on oath respecting the same. Finally, if the liability of the garnishee is made manifest, the officer of the court may, under paragraph No. 3 of section 436 of the Code of Civil Procedure, collect the money and pay it to the person entitled.

The circumstances that garnishment has not been made the subject of independent treatment in our Code of Civil Procedure and that the rules relating thereto are only brought out inferentially in connection with the subject of attachment has undoubtedly contributed to obscure a matter which upon principle is simple enough. Additional light on the subject may, however, be acquired by referring to sections 476, 481, and 486 of the Code of Civil Procedures, which treat of supplementary proceedings. It will be found that those proceedings are identical in principle with the proceeding for the citation of debtors explained in the chapter on attachment. Enough has now been said to show clearly that the action of the sheriff in exposing to public sale the judgment which had been procured by Salomon M. Sharruf in the action against the Tayabas Land Company, et al., was wholly unauthorized, and said sale must be considered void. The proper step would have been for the court to require the Tayabas Land Company, after the judgment against it had become final, to pay into court, in the cause wherein Salvador Farre was plaintiff, a sufficient amount of money to satisfy Farre's claim against Sharruf; and if the judgment against the Tayabas Land Company had been permitted to go to the stage of execution, the proceeds in the hands of the sheriff would have been applied, under the direction of the court, to the payment of Farre's claim before any part would have been payable to Sharruf. In dealing with the problems which have from time to time arisen in connection with garnishment proceedings, courts have sometimes been perplexed over the matter of protecting the garnishee from the danger of having to pay his debt twice; and it goes without saying that the procedure must be so adjusted as not to subject the garnishee to this risk. Otherwise it is a fatal obstacle to the garnishment. No such difficulty would arise in a case like this, where the two judgments are both of record in the same court, and where consequently that court has control over the process in both cases. In order to avoid misunderstanding, we wish to say that we make no question as to the propriety of the proceedings up to the time when the judgment in question was advertised and exposed to sale by the sheriff. The issuance of the execution and the service of the garnishment were appropriate; and the garnishment was effective for the purpose of preventing the garnishee, the Tayabas Land Company, from paying the judgment to Salomon M. Sharruf. Moreover, the garnishment was effective for the purpose of conferring upon the Tayabas Land Company the right to pay off the judgment which Farre had obtained against Sharruf. This right is not only recognized in section 481 of the Code of Civil Procedure but also in subsection 3 of article 1210 of the Civil Code; and by satisfying Farre's claim, regardless of the manner in which it was accomplished, the Tayabas Land Company absolved itself pro tanto from its indebtedness to Sharruf. It results that, although the judgment against the Tayabas Land Company has not yet been satisfied in full, said company is entitled to be credited with the sum of P1,588.24, said by it, through Francisco Alvarez, to Farre on October 6, 1917, with interest. In the view we take of the case it becomes unnecessary to consider at length the fact that Sharruf's judgment against the Tayabas Land Company was appealed to the Supreme Court after the process of garnishment had been served on the company. Suffice is to say that this circumstance would at most merely postpone the realization of the results without defeating the garnishment. BILAG-RIVERA VS LORA The Court agrees with the findings of Judge Villanueva and concludes that while the evidence may be insufficient to prove that respondent conspired with Charlie Carlos and Elsie Tacay in eventually alienating the vehicle to a third person, his particular zeal and precipitate decision to give possession of the vehicle to a party litigant (plaintiff) and treat the same as "in custodia legis" effectively destroys the presumption of regularity in the performance of his official duties. As deputy sheriff, respondent could not be unaware of Rule 57, section 6 of the rules of Court which provides that: Immediately after executing the order of the officer must make a return thereon to the clerk or judge of the court from which the order issued, with a full statement of his proceeding under the order and a complete inventory of the property attached, together with any counter-bond given by the party against whom attachment is issued, and serve a copy of any such counter-bond on the applicant or his lawyer. Section (7) (c) of the same Rule also mandates that: Properties shall be attached by the officer executing the order in the following manner: xxx xxx xxx (c) Personal property capable of manual delivery, by taking and safely keeping it in his capacity, after issuing the corresponding receipt therefor. Chapter VIII (e) (4) of the Manual for Clerks of Court similarly states that: All sheriffs and deputy sheriffs shall submit a report to the judge concerned on the action taken on all writs and processes assigned to them within (10) days from receipt of said process or writ. Said report shall form

part of the records. Respondent could not evade the positive duty of serving the attaching creditor's affidavit, bond, and the order of attachment on complainant's representative (Camiwet) by now alleging that it was the fault of complainant and her representative in refusing to sign the receipt that he allegedly issued on 15 March 1993. The records of the investigation reveal otherwise-that complainant could not have signed the acknowledgment receipt because she was not present when the vehicle was attached. In the same vein, her cousin Camiwet refused to sign the receipt because, as he testified, the same was misleading as he was being forced to sign a receipt which indicated that complainant and Elsie Tacay surrendered the vehicle to respondent by virtue of the said alias writ of attachment. The Court is more inclined to believe the testimony of Camiwet during the investigation to the effect that he only surrendered the vehicle to respondent because he was repeatedly assured by respondent that everything was all right and that Charlie Carlos was really after Elsie Tacay, that as soon as Mr. Carlos returned to Dagupan, he (Camiwet) or complainant could retrieve the vehicle in his (respondent's) possession. 16 Respondent himself virtually admitted his nonfeasance when he testified that it had been their practice to give possession of properties subject of writs of attachment to party litigants because they have no bonded warehouse in their jurisdiction. However, he could not explain why, in this particular case, in the first writ of attachment, he even demanded P1,000.00 from complainant for alleged storage fees while complainant bought time to find the amount for her counterbond, and yet, in the execution of the alias writ, he usurped the court's function and released the vehicle to the custody of Mr. Carlos. Equally reprehensible is his attempt to cover up his misdeed by concealing it from complainant when the latter confronted him thereafter in his office. 17 Thus, the return he executed more than two (2) months after the enforcement of the alias writ was more of an afterthought rather than the fulfillment of a positive duty, because by then he had been ordered by the clerk of court to explain his proceedings under the alias writ of attachment. PNB VS VASQUEZ The plaintiff's appeal is limited to the portion of the decision which orders the deduction of the sum mentioned therein from the amount adjudicated to the plaintiff. In the aforementioned civil case No. 4031, the plaintiff bank prayed for and obtained an order of preliminary attachment, by virtue of which 500 piculs of sugar belonging to the defendant Vazquez was levied upon by the sheriff and sold at public auction at the rate of P10.75 per picul, the proceeds therefrom amounting to P5,250.13. This amount was deposited with the plaintiff bank, upon its own petition, in the name of one Andres Covacha personally, then a deputy of the Provincial Sheriff of Occidental Negros. On August 14, 1928, a deposit of P5,250.13, was made in the name of the Provincial Sheriff of Occidental Negros with the bank, by virtue of another petition of the plaintiff approved by the court to transfer the deposit in the name of the provincial sheriff proper. It appears, however, that the Provincial Sheriff made other deposits on this current account, and that he has been making withdrawals therefrom until it was closed on January 6, 1932. The plaintiff Bank contends that the amount of P5,250.13 should not have been deducted from the judgment awarded to it, for the reason that the defendant, despite the attachment, is still the owner of the 500 piculs of sugar and of its proceeds after the public auction sale, and loss or misappropriation thereof should be for his account. The reason invoked is not applicable here. As correctly observed by the trial judge, "once the decision in the aforesaid civil case had become final, the proceed of the sugar attached in connection therewith should be considered as partial satisfaction of the amount of the judgment." "Personal property may have levied upon under attachment and left in the possession of the sheriff or other officer levying the writ to secure the payment of such judgment as may be recovered in the action. Where execution issues, it is the duty of such officer to apply towards its satisfaction the property so attached and left in his hands; but he may have embezzled or otherwise misappropriated it, or allowed it to be lost by his negligence. When such is the case, we think the better opinion is, that it must, as between the plaintiff and defendant, and persons claiming under defendant, be treated as though it had been levied upon under execution as well as under attachment, and therefore as satisfying the judgment to the extent of its value." (Freeman on Judgments, pp. 2366-2367, citing Yourt v. Hopkins, 24 Ill. 326 and Kenrick v.Ruff, 71 Mo. 570.) And whether or not the Provincial Sheriff was negligent in the performance of his official duties by not turning the money over the plaintiff, is a question which could only be determined in a separate case and hence, immaterial in the present controversy. It should be observed that affirmative acts of the plaintiff Bank have resulted in the attachment and subsequent sale of the property of the defendant. It seems fair that plaintiff having put defendant's

property into the hands of the sheriff, the loss should fall on him and not on defendant. When a sheriff takes property or goods in execution or by attachment, he becomes the bailee for the benefit of all parties interested, and certainly for the party who set him in motion. After obtaining the judgment, plaintiff at once was entitled to have the proceeds of the sale applied to the satisfaction of his judgment and it was the duty of the sheriff to pay the proceeds over. The money collected or paid the sheriff on the sale of the goods or property may be regarded just like money in the hands of a sheriff collected on execution. If the sheriff collects money from a judgment debtor, and then fails to pay it over, the debtor cannot be compelled to pay it again. PAL VS COURT OF APPEALS We rule in the affirmative and we quote the respondent court's decision with approval: The issuance of the questioned alias writ of execution under the circumstances here obtaining is justified because even with the absence of a Sheriffs return on the original writ, the unalterable fact remains that such a return is incapable of being obtained (sic) because the officer who is to make the said return has absconded and cannot be brought to the Court despite the earlier order of the court for him to appear for this purpose. (Order of Feb. 21, 1978, Annex C, Petition). Obviously, taking cognizance of this circumstance, the order of May 11, 1978 directing the issuance of an alias writ was therefore issued. (Annex D. Petition). The need for such a return as a condition precedent for the issuance of an alias writ was justifiably dispensed with by the court below and its action in this regard meets with our concurrence. A contrary view will produce an abhorent situation whereby the mischief of an erring officer of the court could be utilized to impede indefinitely the undisputed and awarded rights which a prevailing party rightfully deserves to obtain and with dispatch. The final judgment in this case should not indeed be permitted to become illusory or incapable of execution for an indefinite and over extended period, as had already transpired. (Rollo, pp. 3536) Judicium non debet esse illusorium; suum effectum habere debet (A judgment ought not to be illusory it ought to have its proper effect). Indeed, technicality cannot be countenanced to defeat the execution of a judgment for execution is the fruit and end of the suit and is very aptly called the life of the law (Ipekdjian Merchandising Co. v. Court of Tax Appeals, 8 SCRA 59 [1963]; Commissioner of Internal Revenue v. Visayan Electric Co., 19 SCRA 697, 698 [1967]). A judgment cannot be rendered nugatory by the unreasonable application of a strict rule of procedure. Vested rights were never intended to rest on the requirement of a return, the office of which is merely to inform the court and the parties, of any and all actions taken under the writ of execution. Where such information can be established in some other manner, the absence of an executing officer's return will not preclude a judgment from being treated as discharged or being executed through an alias writ of execution as the case may be. More so, as in the case at bar. Where the return cannot be expected to be forthcoming, to require the same would be to compel the enforcement of rights under a judgment to rest on an impossibility, thereby allowing the total avoidance of judgment debts. So long as a judgment is not satisfied, a plaintiff is entitled to other writs of execution (Government of the Philippines v. Echaus and Gonzales, 71 Phil. 318). It is a well known legal maxim that he who cannot prosecute his judgment with effect, sues his case vainly. More important in the determination of the propriety of the trial court's issuance of an alias writ of execution is the issue of satisfaction of judgment. Under the peculiar circumstances surrounding this case, did the payment made to the absconding sheriff by check in his name operate to satisfy the judgment debt? The Court rules that the plaintiff who has won her case should not be adjudged as having sued in vain. To decide otherwise would not only give her an empty but a pyrrhic victory. It should be emphasized that under the initial judgment, Amelia Tan was found to have been wronged by PAL. She filed her complaint in 1967. After ten (10) years of protracted litigation in the Court of First Instance and the Court of Appeals, Ms. Tan won her case. It is now 1990. Almost twenty-two (22) years later, Ms. Tan has not seen a centavo of what the courts have solemnly declared as rightfully hers. Through absolutely no fault of her own, Ms. Tan has been deprived of what, technically, she should have been paid from the start, before 1967, without need of her going to court to enforce her rights. And all because PAL did not issue the checks intended for her, in her name. Under the peculiar circumstances of this case, the payment to the absconding sheriff by check in his name did not operate as a satisfaction of the judgment debt.

The attention of this Court has been called to the bad practice of a number of executing officers, of requiring checks in satisfaction of judgment debts to be made out in their own names. If a sheriff directs a judgment debtor to issue the checks in the sheriff's name, claiming he must get his commission or fees, the debtor must report the sheriff immediately to the court which ordered the execution or to the Supreme Court for appropriate disciplinary action. Fees, commissions, and salaries are paid through regular channels. This improper procedure also allows such officers, who have sixty (60) days within which to make a return, to treat the moneys as their personal finds and to deposit the same in their private accounts to earn sixty (60) days interest, before said finds are turned over to the court or judgment creditor (See Balgos v. Velasco, 108 SCRA 525 [1981]). Quite as easily, such officers could put up the defense that said checks had been issued to them in their private or personal capacity. Without a receipt evidencing payment of the judgment debt, the misappropriation of finds by such officers becomes clean and complete. The practice is ingenious but evil as it unjustly enriches court personnel at the expense of litigants and the proper administration of justice. The temptation could be far greater, as proved to be in this case of the absconding sheriff. The correct and prudent thing for the petitioner was to have issued the checks in the intended payee's name. The pernicious effects of issuing checks in the name of a person other than the intended payee, without the latter's agreement or consent, are as many as the ways that an artful mind could concoct to get around the safeguards provided by the law on negotiable instruments. An angry litigant who loses a case, as a rule, would not want the winning party to get what he won in the judgment. He would think of ways to delay the winning party's getting what has been adjudged in his favor. We cannot condone that practice especially in cases where the courts and their officers are involved. We rule against the petitioner. Strictly speaking execution cannot be equated with satisfaction of a judgment. Under unusual circumstances as those obtaining in this petition, the distinction comes out clearly. Execution is the process which carries into effect a decree or judgment (Painter v. Berglund, 31 Cal. App. 2d. 63, 87 P 2d 360, 363; Miller v. London, 294 Mass 300, 1 NE 2d 198, 200; Black's Law Dictionary), whereas the satisfaction of a judgment is the payment of the amount of the writ, or a lawful tender thereof, or the conversion by sale of the debtor's property into an amount equal to that due, and, it may be done otherwise than upon an execution (Section 47, Rule 39). Levy and delivery by an execution officer are not prerequisites to the satisfaction of a judgment when the same has already been realized in fact (Section 47, Rule 39). Execution is for the sheriff to accomplish while satisfaction of the judgment is for the creditor to achieve. Section 15, Rule 39 merely provides the sheriff with his duties as executing officer including delivery of the proceeds of his levy on the debtor's property to satisfy the judgment debt. It is but to stress that the implementing officer's duty should not stop at his receipt of payments but must continue until payment is delivered to the obligor or creditor.

PRELIMINARY ATTACHMENT RULE 57 SECTION 16: Balance due collected upon an execution; excess delivered to judgment obligor CODAL PROVISIONS After realizing upon all the property attached, including the proceed of any debts or credits collected, and applying the proceeds to the satisfaction of the judgment, less the expenses of proceedings upon the judgment, any balance shall remain due, What shall the sheriff do if The sheriff must proceed to collect such balance as upon ordinary execution. there is a balance? What will the sheriff do 1.) Upon reasonable demand, Whenever the judgment must return to the judgment obligor shall have been paid 1.) the attached property remaining in his hands, and 2.) any proceeds of the sale of the property attached not applied to the judgment.

PRELIMINARY ATTACHMENT RULE 57 SECTION 17: Sec. 17. Recovery upon the counter-bond. Prepared by: Kristine Quibod LLB 3-Manresa CODAL PROVISIONS What happens to the surety when the judgment has become executor? the surety or sureties on any counter-bond given pursuant to the provisions of this Rule to secure the payment of the judgment shall: 1.) become charged on such counter-bond and bound to pay the judgment obligee upon demand the amount due under the judgment which amount may be recovered from such surety or sureties after notice and summary hearing in the same action.

Where will the amount be recovered?

CASES CASES LUZON STEEL VS SIA DOCTRINE But the surety in the present case insists (and the court below so ruled) that the execution issued against it was invalid because the writ issued against its principal, Jose O. Sia, et al., defendants below, had not been returned unsatisfied; and the surety invoked in its favor Section 17 of Rule 57 of the Revised Rules of Court (old Rule 59), couched in the following terms: SEC. 17. When execution returned unsatisfied, recovery had upon bond . If the execution be returned unsatisfied in whole or in part, the surety or sureties on any counterbond given pursuant to the provisions of this rule to secure the payment of the judgment shall become charged on such counter-bond, and bound to pay to the judgment creditor upon demand, the amount due under the judgment, which amount may be recovered from such surety or sureties after notice and summary hearing in the same action. The surety's contention is untenable. The counterbond contemplated in the rule is evidently an ordinary guaranty where the sureties assume a subsidiary liability. This is not the case here, because the surety in the present case bound itself "jointly and severally" ( in solidum) with the defendant; and it is prescribed in Article 2059, paragraph 2, of the Civil Code of the Philippines that excusion (previous exhaustion of the property of the debtor) shall not take place "if he (the guarantor) has bound himself solidarily with the debtor". The rule heretofore quoted cannot be construed as requiring that an execution against the debtor be first returned unsatisfied even if the bond were a solidary one; for a procedural rule may not amend the substantive law expressed in the Civil Code, and further would nullify the express stipulation of the parties that the surety's obligation should be solidary with that of the defendant. Under Sections 5 and 12, Rule 57 above reproduced it is provided that the counterbond is intended to secure the payment of "any judgment" that the attaching creditor may recover in the action. Under Section 17 of same rule it provides that when "the execution be returned unsatisfied in whole or in part" it is only then that "payment of the judgment shall become charged on such counterbond." The counterbond was issued in accordance with the provisions of Section 5, Rule 57 of the Rules of Court as provided in the second paragraph aforecited which is deemed reproduced as part of the counterbond. In the third paragraph it is also stipulated that the counterbond is to be "applied for the payment of the judgment." Neither the rules nor the provisions of the counterbond limited its application to a final and executory judgment. Indeed, it is specified that it applies to the payment of any judgment that maybe recovered by plaintiff. Thus, the only logical conclusion is that an execution of any judgment including one pending appeal if returned unsatisfied maybe charged against such a counterbond. It is well recognized rule that where the law does not distinguish, courts should not distinguish. Ubi lex non distinguish nec nos distinguere debemos. 13 "The rule, founded on

PHILIPPINE BRITISH ASSURANCE VS IAC

logic, is a corollary of the principle that general words and phrases in a statute should ordinarily be accorded their natural and general significance. 14 The rule requires that a general term or phrase should not be reduced into parts and one part distinguished from the other so as to justify its exclusion from the operation of the law. 15 In other words, there should be no distinction in the application of a statute where none is indicated. 16 For courts are not authorized to distinguish where the law makes no distinction. They should instead administer the law not as they think it ought to be but as they find it and without regard to consequences. 17 A corollary of the principle is the rule that where the law does not make any exception, courts may not except something therefrom, unless there is compelling reason apparent in the law to justify it.18 Thus where a statute grants a person against whom possession of "any land" is unlawfully withheld the right to bring an action for unlawful detainer, this Court held that the phrase "any land" includes all kinds of land, whether agricultural, residential, or mineral.19 Since the law in this case does not make any distinction nor intended to make any exception, when it speaks of "any judgment" which maybe charged against the counterbond, it should be interpreted to refer not only to a final and executory judgment in the case but also a judgment pending appeal. All that is required is that the conditions provided for by law are complied with, as outlined in the case of Towers Assurance Corporation v. Ororama Supermart, 20 Under Section 17, in order that the judgment creditor might recover from the surety on the counterbond, it is necessary (1) that the execution be first issued against the principal debtor and that such execution was returned unsatisfied in whole or in part; (2) that the creditor make a demand upon the surety for the satisfaction of the judgment, and (3) that the surety be given notice and a summary hearing on the same action as to his liability for the judgment under his counterbond. The rule therefore, is that the counterbond to lift attachment that is issued in accordance with the provisions of Section 5, Rule 57, of the Rules of Court, shall be charged with the payment of any judgment that is returned unsatisfied. It covers not only a final and executory judgement but also the execution of a judgment pending appeal. THE IMPERIAL INSURANCE VS DE LOS ANGELES Anent the first error, the petitioner contends that the Court of Appeals erred in holding that the respondent judge could legally issue the writ of execution against the petitioner as surety in a counterbond (bond to dissolve attachment) on the basis of an ex parte motion for execution which was allegedly never served upon the surety nor set for hearing. This contention is devoid of merit. The counterbonds filed to lift the writs of attachment executed by the herein petitioner, The Imperial Insurance, Inc., for and in behalf of the deceased defendant Felicisimo V. Reyes in favor of the plaintiffs, private respondents herein Rosa V. Reyes and Consolacion V. Reyes in Civil Case No. Q-5214 docketed with the Court of First Instance of Rizal, Branch IV, Quezon City, are clearly the bonds contemplated under Sec. 17, Rule 57 of the Rules of Court which provides: Sec. 17. When execution returned unsatisfied, recovery had upon bond. If the execution be returned unsatisfied in whole or in part, the surety or sureties on any counterbond given pursuant to the provisions of this rule to secure the payment of the judgment shall become charged on such counter-bond, and bound to pay to the judgment creditor upon demand, the amount due under the judgment, which amount may be recovered from such surety or sureties after notice and summary hearing in the same action. This section allows the counterbond filed to lift an attachment to be charged only after notice and summary hearing in the same action. The records show that the notice and hearing requirement was substantially complied with in the instant case. Prior to the filing of the ex parte motion for a writ of execution, the respondents filed a motion for recovery on the surety bonds where the petitioner was duly notified and the said motion was heard on September 24, 1966. 7Moreover, on November 23, 1966 the petitioner filed a motion for reconsideration of the order dated November 10, 1966 rendering judgment against the petitioner on its counter-bonds in the amount of P60,000.00 in Civil Case No. Q-5213 and P40,000.00 in Civil Case No. Q-5214. 8 The respondent judge set the hearing of the ex parte motion for writ of execution together with the motion for reconsideration of the order

dated November 10, 1966 on December 17, 1966 at 8:30 o'clock in the morning. 9 The petitioner received the notice of the said hearing on December 9, 1966 as evidenced by Registry Return Receipt No. 40122. 10 On January 9, 1967, the respondent Judge issued an order denying the motion for reconsideration dated November 23, 1966 for lack of merit. 11 in an order dated January 19, 1967, the motion for writ of execution was granted by the respondent judge. 12 It is thus clear from indubitable documents on record that the requirements of notice and hearing had been satisfactorily complied with by the respondents. The first error assigned is overruled. The petitioner asserts that the Court of Appeals gravely erred in holding that the plaintiff who obtained judgment against the defendant may legally choose "to go directly" after the surety in a counterbond without prior exhaustion of the defendant's properties. This contention is likewise not meritorious. Although the counterbond contemplated in the aforequoted Sec. 17, Rule 57, of the Rules of Court is an ordinary guaranty where the sureties assume a subsidiary liability, the rule cannot apply to a counterbond where the surety bound itself "jointly and severally" ( in solidum) with the defendant as in the present case. The counterbond executed by the deceased defendant Felicisimo V. Reyes, as principal, and the petitioner, The Imperial Insurance, Inc., as solidary quarantor to lift the attachment in Civil Case No. Q-5213 is in the following terms: WHEREFORE, WE, FELICISIMO V. REYES, of legal age, Filipino, and with postal address at San Jose, San Miguel, Bulacan and/or 1480 Batangas Street, Sta. Cruz, Manila, as PRINCIPAL and THE IMPERIAL INSURANCE, INC., a corporation duly organized and existing under the laws of the Philippines, as SURETY, in consideration of the dissolution of said attachment, hereby JOINTLY AND SEVERALLY, bind ourselves in the sum of SIXTY THOUSAND PESOS ONLY (P60,000.00), Philippine Currency, under the condition that in case the plaintiff recovers judgment in the action, the defendant shall pay the sum of SIXTY THOUSAND PESOS (P60,000.00), Philippine Currency, being the amount release for attachment, to be applied to the payment of the judgment, or in default thereof, the Surety will, on demand, pay to the plaintiff said amount of SIXTY THOUSAND PESOS ONLY (P60,000.00), Philippine Currency. (Capitalizations supplied). Manila, Philippines, June 30,1960. 13 The counterbond executed by the same parties in Civil Case No. Q-5214, likewise states. WHEREFORE, we, FELICISIMO V. REYES, of legal age, Filipino, and with postal address at San Jose, San Miguel, Bulacan, and/or 1480 Batangas Street, Sta. Cruz, Manila, as PRINCIPAL and THE IMPERIAL INSURANCE, INC., a corporation duly organized and existing under the laws of the Philippines, as SURETY, in consideration of the dissolution of said attachment, hereby JOINTLY and SEVERALLY, bind ourselves in the sum of FORTY THOUSAND PESOS ONLY (P40,000.00), Philippine Currency, under the condition that in case the plaintiff recover judgment in the action the defendant shall pay the sum of FORTY THOUSAND PESOS ONLY (P40,000.00), Philippine Currency, being the amount released for attachment, to be applied to the payment of the judgment, or in default thereof, the Surety will, on demand, pay to the plaintiffs said amount of FORTY THOUSAND PESOS ONLY (P40,000.00), Philippine Currency. (Emphasis supplied). Manila, Philippines, June 30th, 1960. 14 Clearly, the petitioner, the Imperial Insurance, Inc., had bound itself solidarily with the principal, the deceased defendant Felicisimo V. Reyes. In accordance with Article 2059, par. 2 of the Civil Code of the Philippines, 15excussion (previous exhaustion of the property of the debtor) shall not take place "if he (the guarantor) has bound himself solidarily with the debtor." Section 17, Rule 57 of the Rules of Court cannot be construed that an "execution against the debtor be first returned unsatisfied even if the bond were a solidary one, for a procedural rule may not amend the substantive law expressed in the Civil Code, and further would nullify the express stipulation of the parties that the surety's obligation should be solidary with that of the defendant." 16 Hence the petitioner cannot escape liability on its counter-bonds based on the second error assigned. VADIL VS DE VENECIA We now come to the merits of this case. Petition contend that they are not liable to the plaintiff in the trial court because their undertaking under the bond was to

pay "all the costs which may be awarded to the defendant, and 23 all damages that the defendant may suffer by reason of the Writ of Preliminary Attachment should it be finally adjudicated that the same was done without legitimate cause" rather than to pay the judgment that plaintiff might recover. This is a case where, instead of a bond conditioned the payment to the plaintiff of any judgment which may recover in an action, as the trial court directed, the bond filed provides that the sureties will pay ... all the costs which may be awarded to the defendant, and all damages that the defendant may suffer by reason the Writ of Preliminary Attachment should it be finally a judged that the same was done without legitimate cause. thus raising doubt as to whether the petitioners, as sureties, understood the import of the order of the court. This doubt, as to whether petitioners understood the court order, is further shown by the fact that under Section 2 of Rule 59 of the Rules of Court, the issuance an order of attachment may be prevented if the defend "makes deposit or gives bond ... in an amount sufficient to satisfy such demand, besides costs, or in an amount equal to the value of the property which is to be attached. Now, if, as alleged in the motion of Pablo Espaola Estate Inc., only P150 was realized from the sale of Guinsatao's property, it is not likely that petitioners would agree to stand surety for P9,360 for the defendant, whose properties (worth only P150) stood in imminent danger of attachment. We are inclined to resolve the doubt in favor of petitioners. As this Court held in People v. De la Cruz, 49 O.G. No. 8, 3389, sureties are favorites of the law. Assuming an obligation without any thought of material gain, except in some instances, all presumptions are indulged in their favor. And in Pacific Tobacco Co. v. Lorenzana, et al., G.R. No. L-8088, October 31, 1957, this Court said in amplification: ... The rationale of this doctrine is reasonable; an accommodation surety acts without motive of pecuniary gain and, hence, should be protected against unjust pecuniary impoverishment by imposing on the principal duties akin to those of a fiduciary. This cannot be said of compensated corporate surety which is a business association organized for the purpose of assuming classified risks in large numbers, for profit and on an impersonal basis, through the medium of standardized written contractual forms drawn by its own representatives with the primary aim of protecting its own interests (See Stearn's The Law of Suretyship, 4th ed. 402403). We hold therefore that petitioners are not liable to Pablo Espaola Estate, Inc. on their bond. Another reason in support of the conclusion reached herein is that actually there was no writ of attachment issued by the Court. It is to be noted that the obligation to be assumed by the bondsmen is premised upon the issuance of such a writ. We feel it unnecessary to pass upon the other assignments of error. ZARAGOZA VS FIDELINO The surety's theory that never having been served with summons, it never came under the Lower Court's jurisdiction, is untenable. The terms of the counter-bond voluntarily filed by it in defendant's behalf leave no doubt of its assent to be bound by the Court's adjudgment of the defendant's liability, i.e., its acceptance of the Court's jurisdiction. For in that counterbond, it implicitly prayed for affirmative relief; the release of the seized car, in consideration of which it explicitly bound itself solidarily with said defendant to answer for the delivery of the car subject of the action "if such delivery is adjudged," i.e., commanded by the Court's judgment, or "for the payment of such sum as may be recovered against the defendant and the costs of the action," the reference to a possible future judgment against the defendant, and necessarily against itself, being certain and unmistakable. The filing of that bond was clearly an act of voluntary submission to the Court's authority, which is one of the modes for the acquisition of jurisdiction over a party. 21 The same theory as that espoused by appellant surety in this case was, in substance, passed upon and declared to be without merit in a 1962 decision of this Court, Dee v. Masloff. 22 There, a surety on a counter-bond given to release property from receivership, also sought to avoid liability by asserting that it was not a party to the case, had never been made a party, and had not been notified of the trial. The Court overruled the contention, and upheld the propriety of the amendment of the judgment which ordered the appellant surety company to pay to the extent of its bond and jointly and severally with defendant the judgment

obligation. The Court ruled that since such "amended judgment .. (had been) rendered after the appellant surety company as party jointly and severally liable with the defendant .. for the damages already awarded to the appellees, to which the appellant surety company filed its "Opposition" and "Rejoinder" to the "Reply to Opposition filed by the appellees, without putting in issue the reasonableness of the amount awarded for damages but confining itself to the defense in avoidance of liability on its bond that it was not a party to the case and never made a party therein and was not notified of the trial of the case, and that the appellees were guilty of laches, the requirement of hearing was fully satisfied or complied with; .. (in any case,) appellant surety company never prayed for an opportunity to present evidence in its behalf." The appellant surety's last argument that by the time the Court amended its decision, the decision had already become final, and therefore unalterable, is also untenable. The motion for amendment of the decision was unquestionably in the nature of a motion for reconsideration under Section 1 (c), Rule 37 of the Rules of Court which, having been filed within "the period for perfecting an appeal," had the effect of interrupting said period of appeal. 23 DIZON VS VALDEZ Under the environmental facts, can plaintiff's claim for damages on defendants' counter-bond prosper? The answer must be in the negative. 1. By the terms of the counter-bond itself,1 liability thereunder attaches only "in case the plaintiff recovers judgment in the action." Indeed, by Section 12 of Rule 59 of the old Rules,2 the law in force at the time the counterbond was executed, the statutory counter-bond was made "to secure the payment to the plaintiff of any judgment he may recover in the action." Complementary to this legal precept is Section 17 of the same Rule 59 of the old Rules3 which should be deemed as read into the bond viz: Sec. 17. When execution returned unsatisfied, recovery had upon bond . If the execution be returned unsatisfied in whole or in part, the surety or sureties on any bond given pursuant to the provisions of this rule to secure the payment of the judgment shall become finally charged on such bond, and bound to pay to the plaintiff upon demand the amount due under the judgment, which amount may be recovered from such surety or sureties after notice and summary hearing in the same action. Since at the time the claim for damages was registered, the case was still pending appeal, it is quite obvious that the motion for the claim for damages was premature. And the lower court thus correctly ruled out plaintiff's motion. For, Section 17 contemplates of proceedings on execution after judgment. And, it is only thereafter that liability upon the surety's bond may be determined. The key term in Section 17 is the phrase "[i]f the execution be returned unsatisfied in whole or in part." Until such proceeding shall have taken place and unless unsatisfied liability under the judgment still exists, no action upon the counter-bond may be taken against the surety.4 2. We do not follow plaintiff when he says that what controls here is Section 20 of Rule 57 (then Rule 59). By its very terms,5 this obviously refers to the recovery of damages by a party against whom attachment was issued. This is a remedy available to the defendants here, not the plaintiff. It is therefore not to be doubted that, upon the applicable rules, the counter-bond does not answer for damages on account of the lifting of the attachment, but for the payment of the amount due under the judgment that may be recovered by an attaching creditor. 6 3. Nor is importance to be attached to plaintiff's argument that the dissolution of the attachments put out of his reach the properties and assets answerable for his claim. The counter-bond, it should be emphasized, precisely stands "in place of the properties so released."7 Thus, the release of such property cannot really "prejudice the rights of the attaching party."8 We accordingly affirm the lower court's order of May 16, 1961 under review. (2) upon motion of the judgment creditors, the respondent judge ordered the issuance of a writ of execution wherein petitioner herein was included as object also thereof; (3) a motion to quash the said writ of execution insofar as petitioner is concerned was denied by respondent judge this wise: 1wph1.t There is no merit in the Motion to Quash Writ of Execution filed by Pioneer Insurance and Surety Corporation since under the decision affirmed by the Court of Appeals its liability was adjudged to be jointly and severally with defendant Co Ban Ling & Sons Co.

PIONEER INSURANCE VS CAMILON

On the other hand, non-inclusion of the other defendants in the writ is of no consequence at this stage since their liability is not primary but will accrue only in the event the judgment cannot be satisfied by defendant partnership and Pioneer Insurance and Surety Corporation. In view thereof, the Motion to Quash is denied. SO ORDERED. (Page 31, Record.) and, the Court being of the view that the rule of excussion claimed by petitioner under Section 17 of Rule 17, which petitioner invokes considering it was only the bondsman to secure the lifting of the writ of preliminary attachment, is not applicable in the instant case where there is already a final and executory judgment sentencing the bondsman as joint and solidarily liable, as in the case of Luzon Steel Corporation vs. Sia, 28 SCRA, 58-63, the Court resolved to DISMISS the petition, without prejudice to petitioner recovering from its co-judgment debtor whatever it has to pay under the writ of execution herein questioned. The restraining order issued by this Court on January 22, 1976 is hereby lifted effective immediately. UPPC VS ACROPOLIS This issue is not novel. In the case of Luzon Steel Corporation v. Sia,[43] Luzon Steel Corporation sued Metal Manufacturing of the Philippines and Jose Sia for breach of contract and damages. A writ of preliminary attachment was issued against the properties of the defendants therein but the attachment was lifted upon the filing of a counter-bond issued by Sia, as principal, and Times Surety & Insurance Co., as surety. Later, the plaintiff and the defendants entered into a compromise agreement whereby Sia agreed to settle the plaintiffs claim. The lower court rendered a judgment in accordance with the terms of the compromise. Because the defendants failed to comply with the same, the plaintiff obtained a writ of execution against Sia and the surety on the counter-bond. The surety moved to quash the writ of execution on the ground that it was not a party to the compromise and that the writ was issued without giving the surety notice and hearing. Thus, the court set aside the writ of execution and cancelled the counter-bond. On appeal, this Court, speaking through the learned Justice J.B.L. Reyes, discussed the nature of the liability of a surety on a counter-bond: Main issues posed are (1) whether the judgment upon the compromise discharged the surety from its obligation under its attachment counterbond and (2) whether the writ of execution could be issued against the surety without previous exhaustion of the debtor's properties. Both questions can be solved by bearing in mind that we are dealing with a counterbond filed to discharge a levy on attachment. Rule 57, section 12, specifies that an attachment may be discharged upon the making of a cash deposit or filing a counterbond in an amount equal to the value of the property attached as determined by the judge; that upon the filing of the counterbond the property attached ... shall be delivered to the party making the deposit or giving the counterbond, or the person appearing on his behalf, the deposit or counterbond aforesaid standing in place of the property so released. The italicized expressions constitute the key to the entire problem. Whether the judgment be rendered after trial on the merits or upon compromise, such judgment undoubtedly may be made effective upon the property released; and since the counterbond merely stands in the place of such property, there is no reason why the judgment should not be made effective against the counterbond regardless of the manner how the judgment was obtained. As declared by us in Mercado v. Macapayag, 69 Phil. 403, 405-406, in passing upon the liability of counter sureties in replevin who bound themselves to answer solidarily for the obligations of the defendants to the plaintiffs in a fixed amount of 912.04, to secure paymen t of the amount that said plaintiff be adjudged to recover from the defendants, the liability of the sureties was fixed and conditioned on the finality of the judgment rendered regardless of whether the decision was based on the consent of the parties or on the merits. A judgment entered on a stipulation is nonetheless a judgment of the court because consented to by the parties.[44] [