Author: Pinca

Insular Savings v. CA (2005)

Petition: Petition for review on certiorari of decision of CA
Petitioner: Insular Savings Bank
Respondents: Court of Appeals, Presiding Judge Amin of RTC Branch 135, and
FEBTC1
Ponencia: Garcia

DOCTRINES:
1. Present rule under Sec. 12 of Rule 57: The court shall order the
discharge of the attachment if the movant makes a cash deposit
or files a counter-bond in an amount equal to that fixed by the
court in the order of attachment, exclusive of costs.
Old rule: the value of the property attached shall be the
defining measure in the computation of the discharging
counter-attachment bond.
2. A part of a possible judgment that has veritably been
preemptively satisfied or secured need not be covered by a
counter-bond.

FACTS:
1. Sometime in 1991, respondent FEBTC instituted an Arbitration
case against petitioner Insular before the Arbitration Committee of
the PCHC.2
2. The dispute between the parties involved three unfunded checks
with a total value of P25,200,000.00. The checks were drawn
against FEBTC and were presented by petitioner for clearing.
3. When FEBTC returned the checks beyond the reglementary
period (which happened to be after Insulars account with PCHC
was credited with the amount of P25, 200, 000.00), Insular refused
to refund the said money.
4. January 17, 1992: FEBTC filed a case in RTC Makati City and
prayed for the issuance of a writ of preliminary attachment.
5. January 22, 1992: RTC issued an order granting the application
for preliminary attachment upon posting by FEBTC of an
attachment bond worth P6,000.00.
6. January 27, 2992: RTC issued a writ of preliminary attachment for
the amount of P25,200,000.00.
7. During a hearing before the Arbitration Committee of the PCHC,
there was a mutual agreement between Insular and FEBTC to
equally and temporarily divide between themselves the said
1 Far East Bank and Trust Company
2 Philippine Clearing House Corporation

amount while the dispute has not yet been resolved. As a result,
the sum of P12,600,000.00 is in possession of FEBTC.
8. March 9, 1994: Insular filed a petition to discharge attachment by
counter-bond in the amount of P12,600,000.00.
9. RTC Judge Amin denied the motion stating that the counter-bond
posted by Insular should include the unsecured portion of
FEBTCs claim plus actual damages, legal interest, exemplary
damages and attorneys fees with a total amount of
P27,237,700.00. Then, Insular filed a motion for reconsideration
which was also denied by the RTC.
10. Insular went to the CA ascribing on the trial court the commission
of GADALEJ. Nonetheless, the CA similarly denied the motion of
the petitioner.
11. Insular now contends that the starting point in computing the
amount of counter-bond is the amount of FEBTCs demand or
claim only which is P12,600,000 given that there was a mutual
agreement between the parties.
ISSUE:
1. W/N the CA erred in not ruling that the trial court committed
grave abuse of discretion in denying petitioners motion to
discharge attachment by counter-bond in the amount of
P12,600,000.00
RULING + RATIO:
1. YES
As agreed by means of arbitration, FEBTCs principal claim
against Insular immediately prior to the filing of the motion
to discharge attachment has been reduced to
P12,600,000.00. The trial court was fully aware of this
reality. It then follows that it should have allowed a total
discharge of the attachment on a counter-bond based
on the reduced claim of FEBTC.
The trial court committed grave abuse of discretion when it
denied Insulars motion to discharge attachment by
counter-bond in the amount of P12,600,000, an amount
more than double the attachment bond required of, and
given by FEBTC.
o The trial court required Insular to post a counter-bond
in the amount of P27,237,700.00. It is noteworthy to
emphasize that FEBTC applied for and the

Author: Pinca

corresponding writ issued was only for the amount of

P25.2 million.
It is unjust for the trial court to base the amount of the
counter-bond on a figure beyond P25,200,000 threshold,
as later reduced to P12,600,000. As a necessary
consequence, the CA committed reversible error when it
dismissed Insulars recourse thereto.