CASE RELEVANT FACTS/ ISSUE RULING/ SC ANSWER TO ISSUE

57.4. SPS. YU V. NGO YET TE
(by PAT)
57.5 SECURITY PACIFIC ASSURANCE
CORP. V. TRIA-INFANTE
Sps. Yu purchased bars of detergent soap and
issued the respondent 3 postdated checks. When
the checks were issued for encashment, it was
dishonored. The Sps. Yu did not pay the amount
despite the demand of Te.
Case: Collection of Sum of Money
PR: Preliminary Attachment
Ground: guilty of fraud and that they were about
to dispose their properties to defraud their
creditors
Counter-argument: Wrongful attachment of
properties
Issue: W/N the petitioners are entitled to damages
for the wrongful attachment?
Reynaldo Anzures filed a case for BP 22 against
Villaluz. He also moved for the issuance of a writ of
preliminary attachment which was granted by the
RTC. Subsequently, Villaluz was acquitted of BP 22,
but the civil aspect continued and was appealed by
the latter.
During the pendency of the case in the SC, Villaluz
posted a counter-bond issued by the petitioner,
and on the same date, filed an urgent motion to
discharge attachment. (SC affirmed the CA decision
on the civil liability)
Counter-argument: Petitioner argues that the
mere filing of the counterbond cannot
automatically discharge the attached property.
Hence, its liability did not accrue.
Issue: W/N the attached property was discharged
by the mere act of posting the counter-bond?
Only temperate damages.
Where there is wrongful attachment, the
attachment defendant may recover actual
damages even without proof that the
attachment plaintiff acted in bad faith in
obtaining the attachment. However, if it is
alleged and established that the attachment was
not merely wrongful but also malicious, the
attachment defendant may recover moral
damages and exemplary damages as
well. 56 Either way, the wrongfulness of the
attachment does not warrant the automatic
award of damages to the attachment
defendant; the latter must first discharge the
burden of proving the nature and extent of the
loss or injury incurred by reason of the wrongful
attachment.
NO. There should be a hearing for that matter.
Under the Rules, there are two (2) ways to
secure the discharge of an attachment. First, the
party whose property has been attached or a
person appearing on his behalf may post a
security. Second, said party may show that the
order of attachment was improperly or
irregularly issued.
SEC. 12. Discharge of attachment upon giving
counter-bond. – After a writ of attachment has
been enforced, the party whose property has been
attached, or the person appearing on his behalf,
may move for the discharge of the attachment
wholly or in part on the security given. The court
shall, after due notice and hearing, order the
discharge of the attachment if the movant makes
a cash deposit, or files a counter-bond executed to
the attaching party with the clerk of the court
where the application is made, in an amount
equal to that fixed by the court in the order of
attachment, exclusive of costs. But if the
attachment is sought to be discharged with
respect to a particular property, the counter-bond
shall be equal to the value of that property as
determined by the court. In either case, the cash
deposit or the counter-bond shall secure the
payment of any judgment that the attaching party
may recover in the action. A notice of the deposit
shall forthwith be served on the attaching party.
Upon the discharge of an attachment in
accordance with the provisions of this section, the
property attached, or the proceeds of any sale
thereof, shall be delivered to the party making the
deposit or giving the counter-bond, or to the
person appearing on his behalf, the deposit or
counter-bond aforesaid standing in place of the
property so released.
We are not unmindful of our ruling in the case
of Belisle Investment and Finance Co., Inc. v. State
Investment House, Inc.,47 where we held:
. . . [T]he Court of Appeals correctly ruled that the
mere posting of a counterbond does not
automatically discharge the writ of attachment. It
is only after hearing and after the judge has
ordered the discharge of the attachment if a cash
deposit is made or a counterbond is executed to
the attaching creditor is filed, that the writ of
attachment is properly discharged under Section
12, Rule 57 of the Rules of Court.

It is quite palpable that the necessary steps in

the discharge of an attachment upon giving
counter-bond have been taken. To require a
specific order for the discharge of the
attachment when this Court, in our decision in
G.R. No. 106214, had already declared that the
petitioner is solidarily bound with Villaluz would
be mere surplusage. (the parties were heard
already)

R57- PRELIMINARY ATTACHMENT- PROVISIONAL REMEDIES- 2019 1

57.6. WATERCRAFFT VENTURE CORP.
V. WOLFE
57.7 DM WENCESLAO V. DAYRIT
Watercraft is engaged into the business of storing
pleasure boats and the like in Subic Bay. It hired
Wolfe as its shipyard manager. While employed,
he parked a sailboat without paying storage fees.
When he was terminated, he pulled out his
sailboat and acknowledged his outstanding
obligation for storage fees. Despite repeated
demands, he failed to pay.
Case: Collection of Sum of Money
PR: Preliminary Attachment
Counter-argument: Watercraft failed to show the
existence of fraud and that the mere failure to pay
of perform all obligations does not amount to
fraud.
Issue: W/N the issuance of the writ of preliminary
attachment is valid?
WENCESLAO (engaged in construction business)
contracted with the Public Estates Authority for
the improvement of the Toll Project in Paranque.
Wenceslao purchased asphalt from Readycon. 15
days after the delivery of the asphalt, Readycon
demanded the payment of the balance but despite
repeated demands, Wenceslao did not pay.
Case: Collection of a sum of money
PR: preliminary attachment
Issue: W/N Readycon is liable to Wenceslao for
damages caused by the issuance and enforcement
of the writ of preliminary attachment?
No.
- A writ of preliminary attachment must be
granted only on concrete and specific grounds
and not merely on general averments quoting the
words of the rules.12 Since attachment is harsh,
extraordinary, and summary in nature,13 the rules
on the application of a writ of attachment must
be strictly construed in favor of the defendant.
- It is worth nothing that the affidavit of merit
states, “the defendant may have departed or is
about to depart the country to defraud his
creditors”. This only shows that there is no
certainty as to the fraud to be committed by
Wolfe during upon contracting the obligation
sued upon. An affidavit which does not contain
concrete and specific grounds is inadequate to
sustain the issuance of the writ.
No.
For the mere existence of malice and bad faith
would not per se warrant the award of actual or
compensatory damages. To grant such damages,
sufficient proof thereon is required.
Rule 57, Section 4 of the 1997 Rules of Civil
Procedure states that:
SEC. 4. Condition of applicant’s bond. -
The party applying for the order must
thereafter give a bond executed to the
adverse party in the amount fixed by the
court in its order granting the issuance
of the writ, conditioned that the latter
will pay all the costs 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.
In this case, both the RTC and the Court of Appeals
found no reason to rule that READYCON was not
entitled to issuance of the writ. Neither do we find
now that the writ is improper or illegal. If
WENCESLAO suffered damages as a result, it is
merely because it did not heed the demand letter
of the respondent in the first place. WENCESLAO
could have averted such damage if it immediately
filed a counter-bond or a deposit in order to lift
the writ at once. It did not, and must bear its own
loss, if any, on that account.

57.8. INSULAR SAVINGS BANK V. CA
Checks were drawn against Far East Bank and Trust
Company and were presented by Insular for
clearing. Far East returned the checks after the
reglementary period but after petitioner’s account
with PCHC as credited the amount of the checks,
Insular refused to refund the money to Far East
Bank.
While the case instituted by Far East before the
Arbitrartion Committee is pending, the former also
filed a civil case with the RTC for issuance of a
preliminary attachment.
During the hearing on February 11, 1992 before
the Arbitration Committee of the Philippine
Clearing House Corporation, petitioner and
respondent Bank agreed to temporarily divide
between them the disputed amount
of P25,200,000.00 while the dispute has not yet
been resolved. As a result, the sum
ofP12,600,000.00 is in the possession of
respondent Bank. On March 9, 1994, petitioner
filed a motion to discharge attachment by counter-
bond in the amount of P12,600,000.00. On June
13, 1994, respondent Judge issued the first
assailed order denying the motion. On June 27,
1994, petitioner filed a motion for
reconsideration which was denied in the second
assailed order dated July 20, 1994.”
Counter-argument of Petitioner: The starting point
in computing the amount of counter-bond is the
amount of the respondent’s demand or claim only
YES.
“…in an amount equal to the value of the
property attached as determined by the judge, to
secure the payment of any judgment that the
attaching creditor may recover in the action.”
(Sec. 12 portion)
- There can be no serious objection, in turn, to
the proposition that the attached property - and
logically the counter-bond necessary to
discharge the lien on such property - should as
much as possible correspond in value to, or
approximately match the attaching creditor’s
principal claim. Else, excessive attachment,
which ought to be avoided at all times, shall
ensue.
- Jurisprudence teaches that a writ of attachment
cannot be issued for moral and exemplary
damages, and other unliquidated or contingent
claim.7
- As things stood, therefore, respondent’s
principal claim against petitioner immediately
prior to the filing of the motion to discharge
attachment has effectively been pruned down
to P12,600,000.00. The trial court was fully
aware of this reality. Accordingly, it should have
allowed a total discharge of the attachment on a
counter-bond based on the reduced claim of
respondent. If a portion of the claim is already
secured, we see no justifiable reason why such
portion should still be subject of counter-bond.

R57- PRELIMINARY ATTACHMENT- PROVISIONAL REMEDIES- 2019 2


57.9 REPUBLIC V. MEGA PACIFIC
eSOLUTIONS, INC.
57. 10. SECURITY BANK CORP. V.
GREAT WALL COMMERCIAL PRESS
COMPANY
R57- PRELIMINARY ATTACHMENT- PROVISIONAL REMEDIES- 2019
– and since there was a mutual agreement
between the parties that the amount be divided
equally pending the outcome of the arbitration,
that amount should be the basis for the
computation of the counter-bond.
Issue: W/N the Court of Appeals erred in not ruling
that the TC committed GAD in denying petitioner’s
motion to discharge attachment by counterbond?
Background: RA 8436 authorized COMELEC to use
an automated election system for the May 1998
elections but was not materialized during the 1998
and 2001 elections.
- During the 2004 elections, MPC was awarded the
automation project.
- Despite the award to MPC, the COMELEC
and MPEI executed on 2 June 2003 the Automated
Counting and Canvassing Project Contract
(automation contract), but the same contract was
declared null and void by the SC in their 2004
Decision.
- Upon the finality of the declaration of nullity of
the automation contract, respondent MPEI filed a
Complaint for Damages before the RTC Makati,
arguing that, notwithstanding the nullification of
the automation contract, the COMELEC was still
bound to pay the amount of P200,165,681.89.
- By way of a counterclaim, petitioner demanded
from respondents the return of the payments
made pursuant to the automation contract.
Subsequently, the trial court denied the prayer for
the issuance of a writ of preliminary attachment.
(CA: decided the case according to the 2004
Decision regarding nullity of the automation
contract)
Counter-argument: A writ of preliminary
attachment cannot be issued, considering that they
are not parties to the 2004 case.
ISSUE:
1. W/N a preliminary attachment can be
issued?
2. W/N a preliminary attachment can be
issued as against the respondent’s
individual properties?
Subject of the case: LOAN (credit facility) covered
by trust receipts.
-Herein respondents failed to pay their obligations
despite several demands. However, the
respondents offered a repayment proposal and
thereafter requested a loan restructure.
Case: Collection of Sum of Money
Counter-argument: there was insufficient basis for
the issuance of the writ of preliminary attachment
against them; that the mere failure to pay their
obligation was not an act of fraud; that the
application for the issuance of the writ of
preliminary attachment, the affidavit of merit and
judicial affidavit merely cited general allegations of
fraud and Security Bank failed to sufficiently show
the factual circumstances constituting fraud.
Moreover, respondents claimed that they did not
commit fraud because they were earnestly
negotiating with Security Bank for a loan
restructuring.
ISSUE: W/N THE ISSUANCE OF RTC OF A
PRELIMINARY ATTACHMENT IS PROPER?
Yes.
1. Fraud on the part of respondent MPEI was
sufficiently established by the factual findings of
this Court in its 2004 Decision and subsequent
pronouncements.
- To sustain an attachment on this ground, it
must be shown that the debtor in contracting
the debt or incurring the obligation intended to
defraud the creditor. The fraud must relate to
the execution of the agreement and must have
been the reason which induced the other party
into giving consent which he would not have
otherwise given. To constitute a ground for
attachment in Section 1(d), Rule 57 of the Rules
of Court, fraud should be committed upon
contracting the obligation sued upon. A debt is
fraudulently contracted if at the time of
contracting it the debtor has a preconceived plan
or intention not to pay, as it is in this case.
- Proofs of fraud:
i. Respondent MPEI had perpetrated a scheme
against petitioner to secure the automation
contract by using MPC as supposed bidder and
eventually succeeding in signing the automation
contract as MPEI alone, an entity which was
ineligible to bid in the first place.
ii. Fraud on the part of respondent MPEI was
further shown by the fact that despite the failure
of its ACMs to pass the tests conducted by the
DOST, respondent still acceded to being awarded
the automation contract.
2. YES. Through the application of the piercing
doctrine which justifies the issuance of a writ of
preliminary attachment over the properties of
the individual respondents.
- Veil-piercing in fraud cases requires that the
legal fiction of separate juridical personality is
used for fraudulent or wrongful ends.
YES.
- Security Bank's complaint stated that Great
Wall, through its Vice President Fredino Cheng
Atienza, executed various trust receipt
agreements in relation to its loan transactions.
The trust receipts stated that in consideration of
the delivery to the entrustee (Great Wall) of the
possession of the goods, it obligates itself to hold
in trust for the bank the goods, to sell the goods
for the benefit of the bank, to turn over the
proceeds of the sale to the bank, and to return
the goods to the bank in the event of non-sale.
By signing the trust receipt agreements,
respondents fully acknowledged the
consequences under the law once they failed to
abide by their obligations therein. Upon the
maturity date, however, respondents failed to
deliver the proceeds of the sale to Security Bank
or to return the goods in case of non-sale.
Security Bank sent a final demand letter to
respondents, which was also attached to the
complaint, but it was unheeded.
- The Court is of the view that Security Bank's
allegations of violation of the trust receipts in its
complaint was specific and sufficient to assert
fraud on the part of respondents.
- Hence, the issuance of the writ of preliminary
injunction being proper.
3

57. 11. TSUNEISHI HEAVY
INDUSTRIES, INC. V. MIS MARITIME
CORP.
57.12. PHILIPPINE COMMERIAL
INTERNATIONAL BANK V. ALEJANDRO
R57- PRELIMINARY ATTACHMENT- PROVISIONAL REMEDIES- 2019
- MIS Corp. contracted the services of Tsuneishi to
dry dock and repair its vessel M/T MIS-1. The latter
performed the required services.
- However, about a month later and while the
vessel was still dry docked, Tsuneishi conducted an
engine test on M/T MIS-1. The vessel's engine
emitted smoke. The parties eventually discovered
that this was caused by a burnt crank journal. The
crankpin also showed hairline cracks due to
defective lubrication or deterioration, Tsuneishi
insists that the damage was not its fault while MIS
insists on the contrary. Nevertheless, as an act of
good will, Tsuneishi paid for the vessel's new
engine crankshaft, crankpin, and main bearings.
- When Tsuneishi demanded the payment of its
services, MIS demanded a set off of its claim
against Tsuneishi contending that they have lost
income for the past few months when the ship was
in dry dock.
- Tsuneishi rejected MIS' demands. It delivered the
vessel to MIS in September 2006.8 On November
6, 2006, MIS signed an Agreement for Final
Price. However, despite repeated demands, MIS
refused to pay Tsuneishi the amount billed under
their contract.
- On April 10, 2008, Tsuneishi filed a
complaint12 against MIS before the RTC. This
complaint stated that it is invoking the admiralty
jurisdiction of the RTC to enforce a maritime lien
under Section 21 of the Ship Mortgage Decree of
197813 (Ship Mortgage Decree). The complaint
included a prayer for the issuance of arrest
order/writ of preliminary attachment. To support
this prayer, the complaint alleged that Section 21
of the Ship Mortgage Decree as well as Rule 57 of
the Rules of Court on attachment authorize the
issuance of an order of arrest of vessel and/or writ
of preliminary attachment.
Issue: 1) whether a maritime lien under Section 21
of the Ship Mortgage Decree may be enforced
through a writ of preliminary attachment under
Rule 57 of the Rules of Court
2) whether the CA correctly ruled that Tsuneishi
failed to comply with the requirements for the
issuance of a writ of preliminary injunction.
Alejandro, a resident of Hongkong, executed in
favor of petitioner a promissory note obligating
himself to payP249,828,588.90 plus interest. In
view of the fluctuations in the foreign exchange
rates which resulted in the insufficiency of the
deposits assigned by respondent as security for the
loan, petitioner requested the latter to put up
additional security for the loan.
- In praying for the issuance of a writ of preliminary
attachment under Section 1 paragraphs (e) and (f)
of Rule 57 of the Rules of Court, petitioner alleged
that (1) respondent fraudulently withdrew his
unassigned deposits notwithstanding his verbal
promise to PCIB Assistant Vice President Corazon
B. Nepomuceno not to withdraw the same prior to
NOTE!! While the Court finds that Security Bank
has substantiated its allegation of fraud against
respondents to warrant the issuance of writ or
preliminary attachment, this finding should not
in any manner affect the merits of the principal
case. The writ of preliminary attachment is only a
provisional remedy, which is not a cause of
action in itself but is merely adjunct to a main
suit.
1. NO.
In Quasha Asperilla Ancheta Valmonte Peña &
Marcos v. Juan, we held:
An attachment proceeding is for the purpose of
creating a lien on the property to serve as
security for the payment of the creditors' claim.
Hence, where a lien already exists, as in this case
a maritime lien, the same is already equivalent to
an attachment.
- To be clear, we repeat that when a lien already
exists, this is already equivalent to an
attachment. This is where Tsuneishi's argument
fails.
2. YES.
- An examination of the Bitera Affidavit reveals
that it failed to allege the existence of fraud with
sufficient specificity. The affidavit merely states
that MIS refused to pay its obligation because it
demanded a set off between its obligation to
Tsuneishi and Tsuneishi's liability for MIS' losses
caused by the delay in the turn-over of the
vessel. The affidavit insists that this demand for
set off was not legally possible. Clearly, there is
nothing in the affidavit that even approximates
any act of fraud which MIS committed in the
performance of its obligation. MIS' position was
clear: Tsuneishi caused the damage in the
vessel's engine which delayed its trip and should
thus be liable for its losses. There is no showing
that MIS performed any act to deceive or
defraud Tsuneishi.
- Even assuming that MIS is wrong in refusing to
pay Tsuneishi, this is nevertheless not the fraud
contemplated in Section 1(d), Rule 57 of the
Rules of Court. Civil law grants Tsuneishi various
remedies in the event that the trial court rules in
its favor such as the payment of the obligation,
damages and legal interest. The issuance of a
writ of preliminary attachment is not one of
those remedies.
- There is a reason why a writ of preliminary
attachment is available only in specific cases
enumerated under Section 1 of Rule 57. As it
entails interfering with property prior to a
determination of actual liability, it is issued with
great caution and only when warranted by the
circumstances. As we said in Ng Wee v.
Tankiansee, the rules on the issuance of the writ
of preliminary attachment as a provisional
remedy are strictly construed against the
applicant because it exposes the debtor to
humiliation and annoyance.
NO. (YES, as to damages)
- There is no merit in petitioner’s contention that
respondent can be considered a resident who is
temporarily out of the Philippines upon whom
service of summons may be effected by
publication, and therefore qualifies as among
those against whom a writ of attachment may be
issued under Section 1, paragraph (f), Rule 57 of
the Rules of Court which provides:
f) In an action against a party x x x on whom
summons may be served by publication.
SEC. 1. Grounds upon which attachment may
issue. — At the commencement of the action or at
any time before entry of judgment, a plaintiff or
4
 their assignment as security for the loan; and (2)
that respondent is not a resident of the
Philippines. The application for the issuance of a
writ was supported with the affidavit of
Nepomuceno.
Counter-argument:
The withdrawal of his unassigned deposits was not
fraudulent as it was approved by petitioner. He
also alleged that petitioner knew that he maintains
a permanent residence at Calle Victoria, Ciudad
Regina, Batasan Hills, Quezon City, and an office
address in Makati City at the Law Firm Romulo
Mabanta Buenaventura Sayoc & De los
Angeles, 10 where he is a partner. In both
addresses, petitioner regularly communicated with
him through its representatives. Respondent added
that he is the managing partner of the Hong Kong
branch of said Law Firm; that his stay in Hong Kong
is only temporary; and that he frequently travels
back to the Philippines.
ISSUE: IS THE ISSUANCE OF A PRELIMINARY
ATTACHMENT PROPER? IS ALEJANDRO ENTITLED
TO DAMAGES?
57.13. CHINA BANKING - On July 24, 1996, China Bank granted respondent
CORPORATION V. ASIAN Asian Construction and Development Corporation
CONSTRUCTION AND DEV’T CORP. (ACDC) an Omnibus Credit Line in the amount
of P90,000,000.00.
R57- PRELIMINARY ATTACHMENT- PROVISIONAL REMEDIES- 2019
any proper party may have the property of the
adverse party attached as security for the
satisfaction of any judgment that may be
recovered in the following cases:
(f) In an action against a party who
resides out of the Philippines, or on
whom summons may be served by
publication.
- The purposes of preliminary attachment are: (1)
to seize the property of the debtor in advance of
final judgment and to hold it for purposes of
satisfying said judgment, as in the grounds stated
in paragraphs (a) to (e) of Section 1, Rule 57 of the
Rules of Court; or (2) to acquire jurisdiction over
the action by actual or constructive seizure of the
property in those instances where personal or
substituted service of summons on the defendant
cannot be effected…
- as in paragraph (f) of the same provision In case
the defendant does not reside and is not found in
the Philippines (and hence personal and
substituted service cannot be effected), the
remedy of the plaintiff in order for the court to
acquire jurisdiction to try the case is to convert
the action into a proceeding in rem or quasi in
rem by attaching the property of the
defendant. Thus, in order to acquire jurisdiction
in actions in personam where defendant resides
out of and is not found in the Philippines, it
becomes a matter of course for the court to
convert the action into a proceeding in rem or
quasi in rem by attaching the defendant’s
property. The service of summons in this case
(which may be by publication coupled with the
sending by registered mail of the copy of the
summons and the court order to the last known
address of the defendant), is no longer for the
purpose of acquiring jurisdiction but for
compliance with the requirements of due
process.
However, where the defendant is a resident who
is temporarily out of the Philippines, attachment
of his/her property in an action in personam, is
not always necessary in order for the court to
acquire jurisdiction to hear the case.
Section 16, Rule 14 of the Rules of Court reads:
Sec. 16. Residents temporarily out of the
Philippines. – When an action is commenced
against a defendant who ordinarily resides within
the Philippines, but who is temporarily out of it,
service may, by leave of court, be also effected
out of the Philippines, as under the preceding
section.
The preceding section referred to in the above
provision is Section 15 which provides for
extraterritorial service – (a) personal service out
of the Philippines, (b) publication coupled with
the sending by registered mail of the copy of the
summons and the court order to the last known
address of the defendant; or (c) in any other
manner which the court may deem sufficient.
Application: It is clear from the foregoing that
even on the allegation that respondent is a
resident temporarily out of the Philippines,
petitioner is still not entitled to a writ of
attachment because the trial court could acquire
jurisdiction over the case by substituted service
instead of attaching the property of the
defendant. The misrepresentation of petitioner
that respondent does not reside in the Philippines
and its omission of his local addresses was thus a
deliberate move to ensure that the application for
the writ will be granted.
1. NO, it was not proven that the
attached properties though exposed to
heat and possible corrosion is
“perishable”.
5

57.14. LUZON DEVELOPMENT BANK,
ET.AL V. KRISHNAN
57. 15. FORT BONIFACIO DEV’T CORP.
V. YLLAS LENDING CORPORATION
R57- PRELIMINARY ATTACHMENT- PROVISIONAL REMEDIES- 2019
- For the failure of ACDC to comply with their
obligation, China Bank filed a Complaint4 for
recovery of sum of money and damages with
prayer for the issuance of writ of preliminary
attachment before the Regional Trial Court (RTC)
of Makati wherein the writ was granted.
- Consequently, as shown in the Sheriff’s
Report dated June 14, 1999, the writ of preliminary
attachment was implemented levying personal
properties of ACDC, i.e., vans, dump trucks, cement
mixers, cargo trucks, utility vehicles, machinery,
equipment and office machines and fixtures.
- China Bank filed a Motion for Leave for Grant of
Authority to Sell Attached Properties which the CA
denied.
Counter-argument: Thus, China Bank argues, that
should the attached properties be allowed to
depreciate, perish or rot while the main case is
pending, the attached properties will continue
losing their worth thereby rendering the rules on
preliminary attachment nugatory.
ISSUE:
1. W/N THE ATTACHED PROPERTIES CAN BE
SOLD EVEN BEFORE ENTRY OF FINAL
JUDGMENT?
2. W/N ACDC CAN PROCEED WITH THE
ATTACHMENT BOND POSTED BY CHINA
BANK?
-Respondent Erlinda claimed that she is a client of
respondent bank wherein she maintained several
accounts including time deposits. On several
occasions, when respondent Erlinda presented her
Time Deposits Certificates amounting
to P28,597,472.70 for payment because they have
become due, petitioners refused to honor them for
the reason that they were fraudulent.
- Because of the several occasions of dishonor, on
February 7, 2001, Erlinda filed a complaint for
collection of sum of money and damages against
herein petitioners Luzon Development Bank,
Tomas Clemente, and Oscar Ramirez. She likewise
applied for a Preliminary Writ of Attachment which
the RTC granted on February 27, 2001.
- Meanwhile, on July 3, 2009, petitioners filed an
Omnibus Motion praying that a hearing be held to
determine the sufficiency of the attachment bond
and they be allowed to deposit Certificates of Title
of real property, and the issuance of the writ of
attachment be held in abeyance. However, to no
avail, their motion was denied.
ISSUE: W/N BANK PROPERTY MAY BE DEPOSITED IN
LIEU OF CASH OR COUNTERBOND?
Tirreno leased the premises of FBDC. Upon default
in payments, FBDC occupied the premises and
acquired the equipments of Tirreno as partial
- PERISHABLE: In McCreery, the Supreme Court of
Alabama rejected the argument that the sale of
the attached property was void because the term
"perishable" property, as used in the statute,
meant only such property as contained in itself
the elements of speedy decay, such as fruits, fish,
fresh meats, etc. The Supreme Court of Alabama
held that whatever may be the character of the
property, if the court is satisfied that, either by
reason of its perishable nature, or because of the
expense of keeping it until the termination of the
litigation, it will prove, or be likely to prove,
fruitless to the creditor, and that the purpose of
its original seizure will probably be frustrated, the
sale of the attached property is justified.
Thus, an attached property may be sold after levy
on attachment and before entry of judgment
whenever it shall be made to appear to the court
in which the action is pending, upon hearing with
notice to both parties, that the attached property
is perishable or that the interests of all the
parties to the action will be subserved by the sale
of the attached property.
2. NO.
Section 4, Rule 57 of the Rules of Court provides:
Condition of applicant’s bond. - The party
applying for the order must thereafter give a bond
executed to the adverse party in the amount fixed
by the court in its order granting the issuance of
the writ, conditioned that the latter will pay all the
costs which may be adjudged to the adverse party
and all the damages which he may sustain by
reason of the attachment, if the court shall finally
adjudge that the applicant was not entitled
thereto.
It is clear from the foregoing provision that the
bond posted by China Bank answers only for the
payment of all damages which ACDC may sustain
if the court shall finally adjudge that China Bank
was not entitled to attachment. The liability
attaches if "the plaintiff is not entitled to the
attachment because the requirements entitling
him to the writ are wanting," or "if the plaintiff
has no right to the attachment because the facts
stated in his affidavit, or some of them are
untrue." Clearly, ACDC can only claim from the
bond for all the damages which it may sustain by
reason of the attachment and not because of the
sale of the attached properties prior to final
judgment.
NO.
Section 2, Rule 57 of the Rules of Court explicitly
states that "[a]n order of attachment may be
issued either ex parte or upon motion with notice
and hearing by the court in which the action is
pending, or by the Court of Appeals or the
Supreme Court, and must require the sheriff of the
court to attach so much of the property in the
Philippines of the party against whom it is issued,
not exempt from execution, as may be sufficient
to satisfy the applicant’s demand, unless such
party makes deposit or gives a bond as
hereinafter provided in an amount equal to that
fixed in the order, which may be the amount
sufficient to satisfy the applicant’s demand or
the value of the property to be attached as
stated by the applicant, exclusive of costs."
- Plainly, in construing said words, it can be safely
concluded that Section 5 requires the deposit of
money as the word "amount" commonly refers to
or is regularly associated with a sum of money.
YES.
Pursuant to Section 14 of Rule 57, the sheriff is
not obligated to turn over to respondents the
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 payment of the latter’s obligation pursuant to the
agreement in the lease contract.
- Tirreno filed an action for forcible entry against
FBDC before the Municipal Trial Court of Taguig.
Tirreno also filed a complaint for specific
performance with a prayer for the issuance of a
temporary restraining order and/or a writ of
preliminary injunction against FBDC before the
Regional Trial Court (RTC) of Pasig City.
- An obligee of Tirreno, Yllas Lending Corporation,
caused the sheriff of Branch 59 of the trial court to
serve an alias writ of seizure against FBDC.
- Despite FBDC's service upon him of an affidavit of
title and third party claim, the sheriff proceeded
with the seizure of certain items from FBDC's
premises.
Counter-argument: FBDC questioned the propriety
of the seizure and delivery of the properties to
respondents without an indemnity bond before the
trial court. FBDC argued that when respondents and
Tirreno entered into the chattel mortgage
agreement on 9 November 2000, Tirreno no longer
owned the mortgaged properties as FBDC already
enforced its lien on 29 September 2000.
ISSUE: W/N THE FILING OF AN INDEMNITY BOND
SHOULD HAVE BEEN REQUIRED BY THE TRIAL
COURT?
57.16. PHILIPPINE OVERSEAS Pursuant to EO 1 and 2 (during the time of Pres.
TELECOMMUNICATIONS CORP. Corazon Aquino), the PCGG was ordered to
(POTC), PHILCOMSAT V. sequester immediately the POTC and
SANDIGANBAYAN, ET. AL. PHILCOMSAT.
- On 22 July 1987, the Office of the Solicitor
General (OSG), on behalf of the Republic of the
Philippines, filed a Complaint for Reconveyance,
Reversion, Accounting and Restitution, and
Damages alleging that the wealth that is supposed
to go to the gov’t went into their own individual
accounts (Enrile and L.A Africa, involved)
ISSUE: W/N THE CONTINUED SEQUESTRATION IS
NECESSARY?
R57- PRELIMINARY ATTACHMENT- PROVISIONAL REMEDIES- 2019
properties subject of this case in view of
respondents' failure to file a bond. The bond in
Section 14 of Rule 57 (proceedings where
property is claimed by third person) is different
from the bond in Section 3 of the same rule
(affidavit and bond). Under Section 14 of Rule 57,
the purpose of the bond is to indemnify the sheriff
against any claim by the intervenor to the
property seized or for damages arising from such
seizure, which the sheriff was making and for
which the sheriff was directly responsible to the
third party. Section 3, Rule 57, on the other hand,
refers to the attachment bond to assure the
return of defendant's personal property or the
payment of damages to the defendant if the
plaintiff's action to recover possession of the
same property fails, in order to protect the
plaintiff's right of possession of said property, or
prevent the defendant from destroying the same
during the pendency of the suit.
Because of the absence of the indemnity bond in
the present case, FBDC may also hold the sheriff
for damages for the taking or keeping of the
properties seized from FBDC.
NO.
- Sequestration is akin to the provisional remedy
of preliminary attachment, or receivership.
Similarly, in attachment, the property of the
defendant is seized as a security for the
satisfaction of any judgment that may be
obtained, and not disposed of, or dissipated, or
lost intentionally or otherwise, pending litigation.
XXX
In sequestration, the same principle holds true.
The sequestered properties are placed under the
control of the PCGG, subject to the final
determination of whether the property was in
truth ill--gotten.
As sequestration is a provisional remedy, a
transitional state of affairs, in order to prevent the
disappearance or dissipation of the property
pending the final disposition of the property, the
ultimate purpose of sequestration is to bring an
intended permanent effect while the PCGG
investigates in pursuit of a judicial proceeding —
to dispose of the sequestered properties. Tersely
put, the ultimate purpose of sequestration is to
recover the sequestered properties in favor of the
government in case they turn out to be ill-gotten.
This function to dispose of the property is
reserved to the Sandiganbayan. Until the
Sandiganbayan determines whether the property
was in truth and in fact “ill-gotten,” the
sequestration shall subsist. In case of a finding
that the sequestered properties are ill-gotten,
the property shall be returned to the lawful
owner, to the people, through the government;
otherwise, the sequestered property shall be
returned to the previous owner.
On a final note, while sequestration is the means
to revert the amassed ill-gotten wealth back to
the coffers of our government, we must still
safeguard the protection of property rights from
overzealousness. Sequestration as statutorily
and constitutionally recognized is not
permanent. It must be lifted when the law and
proven facts warrant, or when the purpose has
been accomplished.
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