THIRD DIVISION

G.R. No. 158271

April 8, 2008
CHINA BANKING CORPORATION, petitioner, vs.
ASIAN CONSTRUCTION and DEVELOPMENT CORPORATION, respondent.

vans, dump trucks, cement mixers, cargo trucks, utility vehicles,

machinery, equipment and office machines and fixtures.
On March 27, 2000, upon motion of China Bank, the RTC issued a
Summary Judgment in favor of China Bank. ACDC filed its Notice of
Appeal dated April 24, 2000.

DECISION
AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of

the Rules of Court filed by petitioner China Banking Corporation (China
Bank) seeking to annul the Resolution dated October 14, 2002 and the
Resolution dated May 16, 2003 of the Court of Appeals (CA) in CA-G.R.
CV No. 72175.
The facts of the case:
On July 24, 1996, China Bank granted respondent Asian Construction
and Development Corporation (ACDC) an Omnibus Credit Line in the
amount of P90,000,000.00.
On April 12, 1999, alleging that ACDC failed to comply with its
obligations under the Omnibus Credit Line, China Bank filed a
Complaint 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, Branch 138, docketed as Civil Case No. 99-796.
In the Complaint, China Bank claimed that ACDC, after collecting and
receiving the proceeds or receivables from the various construction
contracts and purportedly holding them in trust for China Bank under
several Deeds of Assignment, misappropriated, converted, and used
the funds for its own purpose and benefit, instead of remitting or
delivering them to China Bank.
On April 22, 1999, the RTC issued an Order granting China Banks
prayer for writ of preliminary attachment. Consequently, as shown in
the Sheriffs Report dated June 14, 1999, the writ of preliminary
attachment was implemented levying personal properties of ACDC, i.e.,

On June 15, 2000, China Bank filed a Motion to Take Custody of

Attached Properties with Motion for Grant of Authority to Sell to the
Branch Sheriff10 with the RTC, praying that it be allowed to take
custody of ACDCs properties for the purpose of selling them in an
auction.11 On June 20, 2000, ACDC filed its Opposition12 to the June
15, 2000 Motion arguing that there can be no sale of the latters
attached properties in the absence of a final and executory judgment
against ACDC.
On August 25, 2000, China Bank partially appealed the Summary
Judgment for not awarding interest on one of its promissory notes.13
Records of the case were elevated to the CA.14
On April 18, 2002, China Bank filed a Motion for Leave for Grant of
Authority to Sell Attached Properties15 which the CA denied in the
herein assailed Resolution dated October 14, 2002.
According to the CA, selling the attached properties prior to final
judgment of the appealed case is premature and contrary to the intent
and purpose of preliminary attachment for the following reasons: first,
the records reveal that the attached properties subject of the motion
are not perishable in nature; and second, while the sale of the attached
properties may serve the interest of China Bank, it will not be so for
ACDC. The CA recognized China Banks apprehension that by the time
a final judgment is rendered, the attached properties would be
worthless. However, the CA also acknowledged that since ACDC is a
corporation engaged in a construction business, the preservation of the
properties is of paramount importance; and that in the event that the
decision of the lower court is reversed and a final judgment rendered in

favor ACDC, great prejudice will result if the attached properties were
already sold.
China Bank filed a Motion for Reconsideration16 which was denied in
the herein assailed CA Resolution17 dated May 16, 2003.

Hence, the present petition for review on certiorari, on the following

ground:
THE HONORABLE COURT OF APPEALS RENDERED THE QUESTIONED
RESOLUTIONS (ANNEXES "A" and "B") IN A MANNER NOT IN ACCORD
WITH THE PROVISIONS OF SECTION 11, RULE 57 OF THE RULES OF
CIVIL PROCEDURE, AS IT SHELVED THE DEMANDS OF EQUITY BY
ARBITRARILY DISALLOWING THE SALE OF THE ATTACHED PROPERTIES,
UPHOLDING ONLY THE INTEREST OF RESPONDENT, IN UTTER
PARTIALITY.
Considering that the herein assailed CA Resolutions are interlocutory in
nature as they do not dispose of the case completely but leave
something to be done upon the merits, the proper remedy should have
been by way of petition for certiorari under Rule 65, as provided for in
Section 1 (b), Rule 41 of the Rules of Court, as amended by A.M. No.
07-7-12-SC, which provides:
Section 1. Subject of appeal. - An appeal may be taken from a
judgment or final order that completely disposes of the case, or of a
particular matter therein when declared by these Rules to be
appealable.
No appeal may be taken from:
xxxx
(b) An interlocutory order;
xxxx

In any of the foregoing instances, the aggrieved party may file an

appropriate special civil action as provided in Rule 65. (Emphasis
supplied).
The present petition for review on certiorari should have been
dismissed outright. However, in many instances, the Court has treated
a petition for review on certiorari under Rule 45 as a petition for
certiorari under Rule 65 of the Rules of Court, such as in cases where
the subject of the recourse was one of jurisdiction, or the act
complained of was perpetrated by a court with grave abuse of
discretion amounting to lack or excess of jurisdiction. The present
petition does not involve any issue on jurisdiction, neither does it show
that the CA committed grave abuse of discretion in denying the motion
to sell the attached property.
Section 11, Rule 57 of the Rules of Court provides:
Sec. 11. When 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 property attached is perishable, or that the
interests of all the parties to the action will be subserved by the sale
thereof, the court may order such property to be sold at public auction
in such manner as it may direct, and the proceeds of such sale to be
deposited in court to abide the judgment in the action. (Emphasis
supplied)
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.
In its Memorandum, China Bank argues that the CAs notion of
perishable property, which pertains only to those goods which rot and

decay and lose their value if not speedily put to their intended use, is a
strict and stringent interpretation that would betray the purpose for
which the preliminary attachment was engrafted. Citing Witherspoon v.
Cross, China Bank invokes the definition of "perishable property" laid
down by the Supreme Court of California as goods which decay and
lose their value if not speedily put to their intended use; but where the
time contemplated is necessarily long, the term may embrace property
liable merely to material depreciation in value from other causes than
such decay.

depreciate while in storage. Rejecting these arguments, the Supreme

Court of Louisiana held that while there might be a depreciation in the
value of a car during storage, depending largely on existing economic
conditions, there would be no material deterioration of the car itself or
any of its appurtenances if the car was properly cared for, and
therefore it could not be said that automobiles were of a perishable
nature within the intendment of the statute, which could only be
invoked when the property attached and seized was of a perishable
nature.

As stated in the Sheriffs Report and Notices of Levy on Properties, all

of ACDCs properties which were levied are personal properties
consisting of used vehicles, i.e., vans, dump trucks, cement mixers,
cargo trucks, utility vehicles, machinery, equipment and office
machines and fixtures. China Bank insists that the attached properties,
all placed inside ACDCs stockyard located at Silang, Cavite and the
branch office in Mayamot, Antipolo City, are totally exposed to natural
elements and adverse weather conditions. 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.
The issue hinges on the determination whether the vehicles, office
machines and fixtures are "perishable property" under Section 11,
Rules 57 of the Rules of Court, which is actually one of first impression.
No local jurisprudence or authoritative work has touched upon this
matter. This being so, an examination of foreign laws and
jurisprudence, particularly those of the United States where some of
our laws and rules were patterned after, is in order.

With respect to the determination of the question on whether the

attached office furniture, office equipment, accessories and supplies
are perishable properties, the Supreme Court of Alabama in McCreery
v. Berney National Bank discussed the "perishable" nature of the
attached properties, consisting of shelving, stock of drygoods and a
complete set of store fixtures, consisting of counters iron safe, desk
and showcases, to be within the meaning of "perishable" property
under the Alabama Code which authorizes a court, on motion of either
party, to order the sale, in advance of judgment, of perishable property
which had been levied on by a writ of attachment.

In Mossler Acceptance Co. v. Denmark, an order of the lower court in

directing the sale of attached properties, consisting of 20 automobiles
and 2 airplanes, was reversed by the Supreme Court of Louisiana. In
support of its contention that automobiles are perishable, Mossler
offered testimony to the effect that automobile tires tend to dry-rot in
storage, batteries to deteriorate, crankcases to become damaged,
paint and upholstery to fade, that generally automobiles tend to

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.
McCreery applied the doctrine in Millards Admrs. v. Hall where the
Supreme Court of Alabama held that an attached property is
perishable "if it is shown that, by keeping the article, it will necessarily
become, or is likely to become, worthless to the creditor, and by

consequence to the debtor, then it is embraced by the statute. It

matters not, in our opinion, what the subject matter is. It may be
cotton bales, live stock, hardware provisions or dry goods." Although
the statute under which Millards was decided used the words "likely to
waste or be destroyed by keeping," instead of the word "perishable,"
the reasons given for the construction placed on the statute apply
equally to the Alabama Code which uses the term "perishable."
In the Motion for Leave for Grant of Authority to Sell Attached
Properties filed before the CA, China Bank alleged that the attached
properties are placed in locations where they are totally exposed to the
natural elements and adverse weather conditions since their
attachment in 1999; that as a result, the attached properties have
gravely deteriorated with corrosions eating them up, with weeds
germinating and growing thereon and their engines and motors stock
up; and that the same holds true to the office furniture, office
equipment, accessories and supplies. No evidence, however, were
submitted by China Bank to support and substantiate these claims
before the CA.
Notably, in the Petition filed before the Court, China Bank, for the first
time, included as annexes, photographs of the attached properties
which were alleged to be recently taken, in an attempt to convince the
Court of the deteriorated condition of the attached properties.
The determination on whether the attached vehicles are properly cared
for, and the burden to show that, by keeping the attached office
furniture, office equipment and supplies, it will necessarily become, or
is likely to become, worthless to China Bank, and by consequence to
ACDC, are factual issues requiring reception of evidence which the
Court cannot do in a petition for certiorari. Factual issues are beyond
the scope of certiorari because they do not involve any jurisdictional
issue.
As a rule, only jurisdictional questions may be raised in a petition for
certiorari, including matters of grave abuse of discretion which are
equivalent to lack of jurisdiction. The office of the writ of certiorari has

been reduced to the correction of defects of jurisdiction solely and

cannot legally be used for any other purpose.
Certiorari is truly an extraordinary remedy and, in this jurisdiction, its
use is restricted to truly extraordinary cases - cases in which the action
of the inferior court is wholly void; where any further steps in the case
would result in a waste of time and money and would produce no result
whatever; where the parties, or their privies, would be utterly
deceived; where a final judgment or decree would be nought but a
snare and delusion, deciding nothing, protecting nobody, a judicial
pretension, a recorded falsehood, a standing menace. It is only to
avoid such results as these that a writ of certiorari is issuable; and
even here an appeal will lie if the aggrieved party prefers to prosecute
it.
Moreover, the Court held in JAM Transportation Co., Inc. v. Flores that it
is well-settled, too well-settled to require a citation of jurisprudence,
that this Court does not make findings of facts specially on evidence
raised for the first time on appeal. The Court will not make an
exception in the case at bar. Hence, the photographs of the attached
properties presented before the Court, for the first time on appeal,
cannot be considered by the Court.
China Bank argues that if the CA allowed the attached properties to be
sold, whatever monetary value which the attached properties still have
will be realized and saved for both parties. China Bank further claims
that should ACDC prevail in the final judgment of the collection suit,
ACDC can proceed with the bond posted by China Bank. The Court
finds said arguments to be specious and misplaced.
Section 4, Rule 57 of the Rules of Court provides:
Section 4. Condition of applicants 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.
Sale of attached property before final judgment is an equitable remedy
provided for the convenience of the parties and preservation of the
property. To repeat, the Court finds that the issue of whether the sale of
attached properties is for the convenience of the parties and that the
interests of all the parties will be subserved by the said sale is a
question of fact. Again, the foregoing issue can only be resolved upon
examination of the evidence presented by both parties which the Court
cannot do in a petition for certiorari under Rule 65 of the Rules of
Court.
WHEREFORE, the petition is DENIED. The assailed Resolutions of the
Court of Appeals dated October 14, 2002 and May 16, 2003 in CA-G.R.
CV No. 72175 are hereby AFFIRMED.
SO ORDERED.

FIRST DIVISION
[G.R. No. 123358. February 1, 2000]
FCY CONSTRUCTION GROUP, INC., and FRANCIS C. YU, petitioners, vs.
THE COURT OF APPEALS, THE HON. JOSE C. DE LA RAMA, Presiding
Judge, Branch 139, Regional Trial Court, NCJR, Makati City, Metro
Manila, and LEY CONSTRUCTION AND DEVELOPMENT CORPORATION,
respondents.
DECISION
YNARES_SANTIAGO, J.:

On June 29, 1993, private respondent Ley Construction and

Development Corporation filed a Complaint for collection of a sum of
money with application for preliminary attachment against petitioner
FCY Construction Group, Inc. and Francis C. Yu with the Makati Regional
Trial Court which was docketed as Civil Case No. 93-2112. Private
respondent alleged that it had a joint venture agreement with
petitioner FCY Construction Group, Inc. (wherein petitioner Francis C.
Yu served as President) over the Tandang Sora Commonwealth Flyover
government project for which it had provided funds and construction
materials. The Complaint was filed in order to compel petitioners to
pay its half share in the collections received in the project as well as
those yet to be received therein. In support of its application for a writ
of attachment, private respondent alleged that petitioners were guilty
of fraud in incurring the obligation and had fraudulently misapplied or
converted the money paid them, to which it had an equal share.
On July 6, 1993, following an ex-parte hearing, the lower court issued
an Order for the issuance of a writ of preliminary attachment,
conditioned upon the filing of a P7,000,000.00 attachment bond.
Petitioners moved for the lifting of the writ of preliminary attachment
on the following grounds: (1) the attachment was heard, issued and

implemented even before service of summons upon them; (2) failure of

the attaching officer to serve a copy of the affidavit of merit upon
them; and (3) that there was no fraud in incurring the obligation. As an
alternative prayer in their Motion, petitioners prayed that the
attachment be limited to their receivables with the Department of
Public Works and Highways. This alternative prayer was later
withdrawn by petitioners in a Manifestation and Motion.
On May 25, 1994, the lower court issued another Order denying
petitioners' Motion to Lift Attachment. It, however, reduced and
confined the attachment to receivables due petitioners from the
Tandang Sora commonwealth Flyover project.
Subsequently, petitioners filed a Motion for Reconsideration as well as
an Omnibus Motion for Leave to file Amended Answer and/or to delete
Francis C. Yu as party-defendant.
With the denial of both Motions by the lower court on September 4,
1994, petitioners filed a Petition for Certiorari before the Court of
Appeals on September 16, 1994. The Petition was, however, denied on
July 31, 1995; so was petitioners' Motion for Reconsideration.

is brought, or in concealing or disposing of the property for the taking,

detention or conversion of which the action is brought;
xxx

xxx

x x x."

Petitioners, however, insist that the writ of preliminary attachment was

irregularly issued inasmuch as there was no evidence of fraud in
incurring the obligations sued upon.
In support of their stand, petitioners alleged that private respondent's
principal witness admitted that it was the Department of Public Works
and Highways (DPWH) that induced it to deliver materials and cash for
the Tandang Sora Commonwealth Flyover project, to wit COURT: Now . . . as of January 5, 1993 you delivered to him (referring
to defendant FCY corporation) in cash and in kind amounting to Fifteen
Million Pesos (P15,000,000.00), now why did you keep on delivering
cash and materials to him if you were not paid a single centavo?
A: Because of every need for the project, and the Public Works official
assured me that I will be given a new project after the Tandang Sora
will be finished.

Hence, the instant Petition.

Q: Who is this public official that promised you?
It is evident that the questioned writ of attachment was anchored upon
Section 1(d), Rule 57 of the Revised Rules of Court, to wit -

A: Director Pendosa, Teodoro Encarnacion and Secretary de Jesus your

Honor. (TSN, 6 July 1993, pp. 47-48)

"SECTION 1. Grounds upon which attachment may issue. - A plaintiff or

any proper party may, at the commencement of the action or at any
time thereafter, have the property of the adverse party attached as
security for the satisfaction of any judgment that may be recovered in
the following cases:

Q: What about these officials of the Department of Public Highways,

what would they do to project their sub alleged project?

xxx

A: Secretary de Jesus is no longer connected there, your Honor.

xxx

x x x.

(d) In an action against a party who has been guilty of a fraud in

contracting the debt or incurring the obligation upon which the action

xxx

Q: At the time?

xxx

xxx

A: At that time, he resigned.

Q: Before he resigned.
A:He gave me assurance that they will soon give assurance, they will
soon give me another project . . . (TSN, 6 July 1993, p. 55)
A cursory reading of the above-cited testimony, however, readily
shows that said reassurance from the DPWH officials came, not at the
inception of the obligation or contract, but during its performance. On
the other hand, the fraud of which petitioners are accused of and
which was the basis for the issuance of the questioned attachment, is
fraud alleged to have been committed upon contracting the obligation
sued upon. Thus, petitioners argument that "the inducement was the
mouth-watering temptation of a DPWH promise of a 'new project after
the Tandang Sora Flyover project will be finished"' is clearly off-tangent
as such inducement, if any, came not at the inception of the obligation.
Similarly, petitioners' arguments that it was private respondent who
admittedly prepared the letter embodying the alleged joint venture
agreement and had petitioner Francis Yu sign it must fail. The written
agreement referred to was signed by petitioner Francis Yu only on
January 5, 1993, long after the project had commenced. Thus, It was
only a written confirmation of an arrangement that had already been
existing and operational. Similarly then, such written confirmation did
not occur at the inception of the obligation sued upon.
In Liberty Insurance Corporation vs. Court of Appeals, this Court,
discussing Section 1(d), Rule 57, cautioned as follows -To sustain an attachment on this ground, it must be shown that the
debtor in contracting the debt or incurring the obligation intended to
defraud the creditor. The fraud must relate to the execution of the
agreement and must have been the reason which induced the other
party into giving consent which he would not have otherwise given. To
constitute a ground for attachment in Section 1 (d), Rule 57 of the
Rules of Court, fraud should be committed upon contracting the

obligation sued upon. A debt is fraudulently contracted if at the time of

contracting it the debtor has a preconceived plan or intention not to
pay, as it is in this case. Fraud is a state of mind and need not be
proved by direct evidence but may be inferred from the circumstances
attendant in each case. (Republic v. Gonzales, 13 SCRA 633).
From the foregoing, therefore, the alleged inducement by the DPWH
officials upon private respondent as well as the circumstances
surrounding the execution of the joint venture agreement, both appear
immaterial as they were not committed upon contracting the obligation
sued upon but occurred long after the obligation has been established.
The fact that petitioners have paid a substantial amount of money to
private respondent cannot save the day for them either. As per their
own accounting, such payments were for accounts payable for labor
supplied, construction materials and cash advances. It is not denied
that no payment of profits has been given to private respondent, which
is precisely what it is suing for.
Finally, considering that the writ of preliminary attachment has been
issued on account of allegations of fraud in contracting the obligation
upon which the action is brought petitioners' efforts to have the writ of
preliminary attachment dissolved on the ground that it was improperly
or irregularly issued is in vain. Indeed, in Liberty Insurance Corporation,
supra, which cited Mindanao Savings and Loan Assoc. vs. Court of
Appeals (172 SCRA 480), we ruled "x x x, when the preliminary attachment is issued upon a ground which
is at the same time the applicant's cause of action: e.g., x x x an action
against a party who has been guilty of fraud in contracting the debt or
incurring the obligation upon which the action is brought, the
defendant is not allowed to file a motion to dissolve the attachment
under Section 13 of Rule 57 by offering to show the falsity of the
factual averments in the plaintiffs application and affidavits on which
the writ was based and consequently that the writ based therein had
been improperly or irregularly issued - the reason being that the
hearing on such motion for dissolution of the writ would be tantamount

to a trial on the merits. In other words, the merits of the action would
be ventilated at a mere hearing of a motion; instead of the regular
trial. Therefore, when the writ of attachment is of this nature, the only
way it can be dissolved is by a counterbond."
We now come to the issue of whether or not petitioner Francis Yu
should remain as party-defendant. Petitioners argue that since the
transactions were corporation to corporation only, petitioner Francis Yu
should be dropped as party-defendant considering the hornbook law
that corporate personality is a shield against personal liability of its
officers. We agree that petitioner Francis Yu cannot be made liable in
his individual capacity if he indeed entered into and signed the
contract in his official capacity as President, in the absence of
stipulation to that effect, due to the personality of the corporation
being separate and distinct from the persons composing it.
However, while we agree that petitioner Francis Yu cannot be held
solidarily liable with petitioner corporation merely because he is the
President thereof and was involved in the transactions with private
corporation, we also note that there exists instances when corporate
officers may be held personally liable for corporate acts. Such
exceptions were outlined in Tramat Mercantile, Inc. vs. Court of
Appeals, as follows -"Personal liability of a corporate director, trustee or officer along
(although not necessarily) with the corporation may so validly attach,
as a rule, only when 1. He assents (a) to a patently unlawful act of the corporation, or (b)
for bad faith or gross negligence in directing its affairs, or (c) for
conflict of interest, resulting in damages to the corporation, its
stockholders or other persons;
2. He consents to the issuance of watered down stocks or who, having
knowledge thereof, does not forthwith file with the corporate secretary
his written objection thereto;

3. He agrees to hold himself personally and solidarily liable with the

corporation; or
4. He is made, by a specific provision of law, to personally answer for
his corporate action."
The attendance of these circumstances, however, cannot be
determined at this stage and should properly be threshed out during
the trial on the merits. Stated differently, whether or not petitioner
Francis Yu should be held personally and solidarily liable with petitioner
corporation is a matter that should be left to the trial court's discretion,
dependent as it is on evidence during trial.
WHEREFORE, in view of the foregoing, the instant Petition is hereby
DISMISSED. No pronouncement as to costs.
SO ORDERED.

SECOND DIVISION
G.R. No. 144740 August 31, 2005
SECURITY PACIFIC ASSURANCE CORPORATION, vs.
THE HON. AMELIA TRIA-INFANTE, In her official capacity as Presiding
Judge, Regional Trial Court, Branch 9, Manila; THE PEOPLE OF THE
PHILIPPINES, represented by Spouses REYNALDO and ZENAIDA
ANZURES; and REYNALDO R. BUAZON, In his official capacity as Sheriff
IV, Regional Trial Court, Branch 9, Manila,
DECISION
CHICO-NAZARIO, J.:

Before Us is a petition for review on certiorari, assailing the

Decision and Resolution of the Court of Appeals in CA-G.R. SP No.

58147, dated 16 June 2000 and 22 August 2000, respectively. The said
Decision and Resolution declared that there was no grave abuse of
discretion on the part of respondent Judge in issuing the assailed order
dated 31 March 2000, which was the subject in CA-G.R. SP No. 58147.
THE FACTS
The factual milieu of the instant case can be traced from this
Courts decision in G.R. No. 106214 promulgated on 05 September
1997.
On 26 August 1988, Reynaldo Anzures instituted a complaint
against Teresita Villaluz (Villaluz) for violation of Batas Pambansa Blg.
22. The criminal information was brought before the Regional Trial
Court, City of Manila, and raffled off to Branch 9, then presided over by
Judge Edilberto G. Sandoval, docketed as Criminal Case No. 89-69257.
An Ex-Parte Motion for Preliminary Attachment dated 06 March
1989 was filed by Reynaldo Anzures praying that pending the hearing
on the merits of the case, a Writ of Preliminary Attachment be issued
ordering the sheriff to attach the properties of Villaluz in accordance
with the Rules.
On 03 July 1989, the trial court issued an Order for the issuance
of a writ of preliminary attachment upon complainants posting of a
bond which is hereby fixed at P2,123,400.00 and the Courts approval
of the same under the condition prescribed by Sec. 4 of Rule 57 of the
Rules of Court.
An attachment bond was thereafter posted by Reynaldo Anzures
and approved by the court. Thereafter, the sheriff attached certain
properties of Villaluz, which were duly annotated on the corresponding
certificates of title.
On 25 May 1990, the trial court rendered a Decision on the case
acquitting Villaluz of the crime charged, but held her civilly liable. The
dispositive portion of the said decision is reproduced hereunder:

WHEREFORE, premises considered, judgment is hereby rendered

ACQUITTING the accused TERESITA E. VILLALUZ with cost de oficio. As
to the civil aspect of the case however, accused is ordered to pay
complainant Reynaldo Anzures the sum of TWO MILLION ONE
HUNDRED
TWENTY
THREE
THOUSAND
FOUR
HUNDRED
(P2,123,400.00) PESOS with legal rate of interest from December 18,
1987 until fully paid, the sum of P50,000.00 as attorneys fees and the
cost of suit.
Villaluz interposed an appeal with the Court of Appeals, and on
30 April 1992, the latter rendered its Decision, the dispositive portion
of which partly reads:
WHEREFORE, in CA-G.R. CV No. 28780, the Decision of the Regional
Trial Court of Manila, Branch 9, dated May 25, 1990, as to the civil
aspect of Criminal Case No. 89-69257, is hereby AFFIRMED, in all
respects.
The case was elevated to the Supreme Court (G.R. No. 106214),
and during its pendency, Villaluz posted a counter-bond in the amount
of P2,500,000.00 issued by petitioner Security Pacific Assurance
Corporation.[9] Villaluz, on the same date of the counter-bond, filed an
Urgent Motion to Discharge Attachment.
On 05 September 1997, we promulgated our decision in G.R. No.
106214, affirming in toto the decision of the Court of Appeals.
In view of the finality of this Courts decision in G.R. No. 106214,
the private complainant moved for execution of judgment before the
trial court.
On 07 May 1999, the trial court, now presided over by respondent
Judge, issued a Writ of Execution.
Sheriff Reynaldo R. Buazon tried to serve the writ of execution
upon Villaluz, but the latter no longer resided in her given address.

This being the case, the sheriff sent a Notice of Garnishment upon
petitioner at its office in Makati City, by virtue of the counter-bond
posted by Villaluz with said insurance corporation in the amount of
P2,500,000.00.
As reported by the sheriff, petitioner refused to
assume its obligation on the counter-bond it posted for the discharge
of the attachment made by Villaluz.
Reynaldo Anzures, through the private prosecutor, filed a Motion
to Proceed with Garnishment, which was opposed by petitioner
contending that it should not be held liable on the counter-attachment
bond.
The trial court, in its Order dated 31 March 2000, granted the
Motion to Proceed with Garnishment. The sheriff issued a Follow-Up of
Garnishment addressed to the President/General Manager of petitioner
dated 03 April 2000.

A Motion for Reconsideration was filed by petitioner, but was

denied for lack of merit by the Court of Appeals in its Resolution dated
22 August 2000.
Undeterred, petitioner filed the instant petition under Rule 45 of
the 1997 Rules of Civil Procedure, with Urgent Application for a Writ of
Preliminary Injunction and/or Temporary Restraining Order.
On 13 December 2000, this Court issued a Resolution requiring
the private respondents to file their Comment to the Petition, which
they did. Petitioner was required to file its Reply thereafter.

On 07 April 2000, petitioner filed a Petition for Certiorari with

Preliminary Injunction and/or Temporary Restraining Order with the
Court of Appeals, seeking the nullification of the trial courts order
dated 31 March 2000 granting the motion to proceed with
garnishment. Villaluz was also named as petitioner. The petitioners
contended that the respondent Judge, in issuing the order dated 31
March 2000, and the sheriff committed grave abuse of discretion and
grave errors of law in proceeding against the petitioner corporation on
its counter-attachment bond, despite the fact that said bond was not
approved by the Supreme Court, and that the condition by which said
bond was issued did not happen.

Meanwhile, on 17 January 2001, petitioner and the spouses Reynaldo

and Zenaida Anzures executed a Memorandum of Understanding
(MOU). In it, it was stipulated that as of said date, the total amount
garnished from petitioner had amounted to P1,541,063.85, and so the
remaining amount still sought to be executed was P958,936.15.[28]
Petitioner tendered and paid the amount of P300,000.00 upon signing
of the MOU, and the balance of P658,936.15 was to be paid in
installment at P100,000.00 at the end of each month from February
2001 up to July 2001. At the end of August 2001, the amount of
P58,936.00 would have to be paid. This would make the aggregate
amount paid to the private respondents P2,500,000.00. There was,
however, a proviso in the MOU which states that this contract shall
not be construed as a waiver or abandonment of the appellate review
pending before the Supreme Court and that it will be subject to all such
interim orders and final outcome of said case.

On 16 June 2000, the Court of Appeals rendered a Decision, the

dispositive portion of which reads:

On 13 August 2001, the instant petition was given due course,

and the parties were obliged to submit their respective Memoranda.

WHEREFORE, premises considered, the Court finds no grave abuse of

discretion on the part of respondent judge in issuing the assailed order.
Hence, the petition is dismissed.

ISSUES
The petitioner raises the following issues for the resolution of
this Court:

Main Issue - WHETHER OR NOT THE COURT OF APPEALS COMMITTED

REVERSIBLE ERROR IN AFFIRMING THE 31 MARCH 2000 ORDER OF
PUBLIC RESPONDENT JUDGE WHICH ALLOWED EXECUTION ON THE
COUNTER-BOND ISSUED BY THE PETITIONER.
Corollary Issues (1) WHETHER OR NOT THE COURT OF APPEALS
CORRECTLY RULED THAT THE ATTACHMENT ON THE PROPERTY OF
VILLALUZ WAS DISCHARGED WITHOUT NEED OF COURT APPROVAL OF
THE COUNTER-BOND POSTED; and (2) WHETHER OR NOT THE COURT
OF APPEALS CORRECTLY RULED THAT THE ATTACHMENT ON THE
PROPERTY OF VILLALUZ WAS DISCHARGED BY THE MERE ACT OF
POSTING THE COUNTER-BOND.

P2,500,000.00 to answer for any adverse judgment/decision against

Villaluz.
Petitioner filed a Reply dated 09 May 2001 to private respondents
Comment, admitting the binding effect of the bond as between the
parties thereto. What it did not subscribe to was the theory that the
attachment was ipso facto or automatically discharged by the mere
filing of the bond in court. Such theory, according to petitioner, has no
foundation. Without an order of discharge of attachment and approval
of the bond, petitioner submits that its stipulated liability on said bond,
premised on their occurrence, could not possibly arise, for to hold
otherwise would be to trample upon the statutorily guaranteed right of
the parties to contractual autonomy.

THE COURTS RULING

Petitioner seeks to escape liability by contending, in the main,
that the writ of attachment which was earlier issued against the real
properties of Villaluz was not discharged. Since the writ was not
discharged, then its liability did not accrue. The alleged failure of this
Court in G.R. No. 106214 to approve the counter-bond and to cause the
discharge of the attachment against Villaluz prevented the happening
of a condition upon which the counter-bonds issuance was premised,
such that petitioner should not be held liable thereon.
Petitioner further asserts that the agreement between it and
Villaluz is not a suretyship agreement in the sense that petitioner has
become an additional debtor in relation to private respondents. It is
merely waiving its right of excussion that would ordinarily apply to
counter-bond guarantors as originally contemplated in Section 12, Rule
57 of the 1997 Rules.
In their Comment, the private respondents assert that the filing
of the counter-bond by Villaluz had already ipso facto discharged the
attachment on the properties and made the petitioner liable on the
bond. Upon acceptance of the premium, there was already an express
contract for surety between Villaluz and petitioner in the amount of

Based on the circumstances present in this case, we find no compelling

reason to reverse the ruling of the Court of Appeals.
Over the years, in a number of cases, we have made certain
pronouncements about counter-bonds.
In Tijam v. Sibonghanoy, as reiterated in Vanguard Assurance Corp. v.
Court of Appeals,[36] we held:
. . . [A]fter the judgment for the plaintiff has become executory
and the execution is returned unsatisfied, as in this case, the liability
of the bond automatically attaches and, in failure of the surety to
satisfy the judgment against the defendant despite demand therefore,
writ of execution may issue against the surety to enforce the obligation
of the bond.
In Luzon Steel Coporation v. Sia, et al.:
. . . [C]ounterbonds posted to obtain the lifting of a writ of
attachment is due to these bonds being security for the payment of
any judgment that the attaching party may obtain; they are thus mere
replacements of the property formerly attached, and just as the latter
may be levied upon after final judgment in the case in order to realize
the amount adjudged, so is the liability of the countersureties
ascertainable after the judgment has become final. . . .

In Imperial Insurance, Inc. v. De Los Angeles, we ruled:

. . . 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 may
not amend the substantive law expressed in the Civil Code, and further
would nullify the express stipulation of the parties that the suretys
obligation should be solidary with that of the defendant.

In Philippine British Assurance Co., Inc. v. Intermediate Appellate

Court,[39] we further held that the counterbond is intended to secure
the payment of any judgment that the attaching creditor may recover
in the action.
Petitioner does not deny that the contract between it and Villaluz
is one of surety. However, it points out that the kind of surety
agreement between them is one that merely waives its right of
excussion. This cannot be so. The counter-bond itself states that the
parties jointly and severally bind themselves to secure the payment of
any judgment that the plaintiff may recover against the defendant in
the action. A surety is considered in law as being the same party as
the debtor in relation to whatever is adjudged touching the obligation
of the latter, and their liabilities are interwoven as to be inseparable.
Suretyship is a contractual relation resulting from an agreement
whereby one person, the surety, engages to be answerable for the
debt, default or miscarriage of another, known as the principal. The
suretys obligation is not an original and direct one for the performance
of his own act, but merely accessory or collateral to the obligation
contracted by the principal. Nevertheless, although the contract of a
surety is in essence secondary only to a valid principal obligation, his
liability to the creditor or promise of the principal is said to be direct,
primary and absolute; in other words, he is directly and equally bound
with the principal. The surety therefore becomes liable for the debt or

duty of another although he possesses no direct or personal interest

over the obligations nor does he receive any benefit therefrom.
In view of the nature and purpose of a surety agreement,
petitioner, thus, is barred from disclaiming liability.
Petitioners argument that the mere filing of a counter-bond in
this case cannot automatically discharge the attachment without first
an order of discharge and approval of the bond, is lame.
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. The first applies in the instant case. Section 12, Rule 57,
provides:
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. Should such
counter-bond for any reason be found to be or become insufficient, and

the party furnishing the same fail to file an additional counter-bond,

the attaching party may apply for a new order of attachment.
It should be noted that in G.R. No. 106214, per our Resolution dated 15
January 1997, we permitted Villaluz to file a counter-attachment bond.
On 17 February 1997, we required the private respondents to comment
on the sufficiency of the counter-bond posted by Villaluz.
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.
Thus:
During the pendency of this petition, a counter-attachment bond was
filed by petitioner Villaluz before this Court to discharge the
attachment earlier issued by the trial court. Said bond amounting to
P2.5 million was furnished by Security Pacific Assurance, Corp. which
agreed to bind itself jointly and severally with petitioner for any
judgment that may be recovered by private respondent against the
former.
We are not unmindful of our ruling in the case of Belisle
Investment and Finance Co., Inc. v. State Investment House, Inc.,
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.
The ruling in Belisle, at first glance, would suggest an error in the
assailed ruling of the Court of Appeals because there was no specific
resolution discharging the attachment and approving the counter-bond.

As above-explained, however, consideration of our decision in G.R. No.

106214 in its entirety will readily show that this Court has virtually
discharged the attachment after all the parties therein have been
heard on the matter.
On this score, we hew to the pertinent ratiocination of the Court of
Appeals as regards the heretofore cited provision of Section 12, Rule
57 of the 1997 Rules of Civil Procedure, on the discharge of attachment
upon giving counter-bond:
. . . The filing of the counter-attachment bond by petitioner
Villaluz has discharged the attachment on the properties and made the
petitioner corporation liable on the counter-attachment bond. This can
be gleaned from the DEFENDANTS BOND FOR THE DISSOLUTION OF
ATTACHMENT, which states that Security Pacific Assurance
Corporation, as surety, in consideration of the dissolution of the said
attachment jointly and severally, binds itself with petitioner Villaluz for
any judgment that may be recovered by private respondent Anzures
against petitioner Villaluz.
The contract of surety is only between petitioner Villaluz and
petitioner corporation. The petitioner corporation cannot escape
liability by stating that a court approval is needed before it can be
made liable. This defense can only be availed by petitioner corporation
against petitioner Villaluz but not against third persons who are not
parties to the contract of surety. The petitioners hold themselves out as
jointly and severally liable without any conditions in the counterattachment bond. The petitioner corporation cannot impose requisites
before it can be made liable when the law clearly does not require such
requisites to be fulfilled. (Emphases supplied.)

Verily, a judgment must be read in its entirety, and it must be

construed as a whole so as to bring all of its parts into harmony as far
as this can be done by fair and reasonable interpretation and so as to
give effect to every word and part, if possible, and to effectuate the

intention and purpose of the Court, consistent with the provisions of

the organic law.
Insurance companies are prone to invent excuses to avoid their just
obligation. It seems that this statement very well fits the instant case.
WHEREFORE, in view of all the foregoing, the Decision and
Resolution of the Court of Appeals dated 16 June 2000 and 22 August
2000, respectively, are both AFFIRMED. Costs against petitioner.
SO ORDERED.

NARVASA, J.:

In December, 1981, Learjet Phil. Inc. commenced suit in the Regional

Trial Court at Pasig against Gates Learjet Corporation and Gates Learjet
Export Corporation. 1 On said plaintiffs application, and upon the
posting of an attachment bond in its behalf by Philippine Charter
Insurance Corporation (then known as Phil-Am Assurance Co., Inc.), the
Court issued a writ of preliminary attachment directed against the
defendants' properties. On the strength of the writ, the sheriff seized a
twin engine airplane, a Learjet 35-A-3799, belonging to the defendants.
After due proceedings, judgment was rendered by the Trial Court in
plaintiffs' favor, sentencing the defendants to pay US$2,250,000.00 as
actual damages, P200,000.00 as moral damages, P100,000.00 as
exemplary damages, as well as attorney's fees and costs. On appeal to
the Court of Appeals by the defendants, 2 however, this judgment was
reversed. The decision of the Appellate Tribunal, promulgated on
December 10, 1986, disposed as follows:
WHEREFORE, the decision appealed from is hereby REVERSED and SET
ASIDE, and Civil Case No. 43874 of the Regional Trial Court of Pasig is
DISMISSED for lack of merit. For the wrongful attachment of Learjet
aircraft 35A-44 owned by defendant-appellant Gates Learjet
Corporation, plaintiff-appellee Learjet Philippines, Inc. is hereby
ordered to pay to the former by way of actual damages the amount of
$73,179-36, P50,000.00 as exemplary damages, and the costs of the
suit.

FIRST DIVISION
G.R. No. 88379 November 15, 1989
PHILIPPINE CHARTER INSURANCE CORPORATION, petitioner, vs.
COURT OF APPEALS, GATES LEARJET CORPORATION and GATES LEARJET
EXPORT CORPORATION, respondents.

On December 16, 1986 four days after notice of the judgment was
served on the defendants, they filed with the Court of Appeals an
"Urgent Petition to have Damages Awarded on Account of Illegal
Attachment Executed Against Attachment Bond Issued by the T.J.
Philippine American Assurance Co., Inc., Now Pan-Philippines General
Insurance Corporation." The petition adverted to the attachment bond
posted by the surety firm in the amount of P2,000,000.00, and asked
that the "damages awarded defendants- appellants by reason of the
wrongful attachment be enforced, after proper notice to plaintiff and its
bondsman and hearing of ... (the) application, jointly and severally

against both the plaintiff and the bonds-man-surety ... ." A copy of the
petition was furnished the surety. The plaintiff, in its turn, filed a motion
for reconsideration of the decision of December 10, 1986.
By Resolution dated March 10, 1987, the Court of Appeals: 3 (1) denied
the plaintiffs motion for reconsideration for lack of merit; and (2)
NOTED "defendants-appellants' application or claim for damages
against the surety" and RESOLVED "to refer the Said claim or
application to the trial court and allow the latter to hear and decide the
same pursuant to Section 20, Rule 57 of the Rules of Court."
The plaintiff tried to have the Appellate Court's decision reviewed and
reversed by us, but failed. 4 We denied its petition for review by
resolution dated August 10, 1987; and entry of the resolution was
made on February 26, 1988.
On remand of the case to the Trial Court, the defendants filed an
"Urgent Petition to Have Damages Awarded on Account of Illegal
Attachment Executed Against Attachment Bond Issued by the Surety
Philippine American Assurance Co., Inc., now Pan-Philippines General
Insurance Corporation" dated December 16, 1986. The Court ordered
execution of the judgment "against the plaintiff at Suite 10 Prescon
Strata 100 Emerald Avenue, Pasig, Metro Manila" in accordance with
the Rules. The writ issued on April 8, 1988.
Evidently, the sheriff sought to enforce the writ also against the surety,
"Philippine Charter Insurance Corporation ... (formerly Pan-Philippines
General Insurance Corporation)." Said surety thereupon filed with the
Trial Court an "Urgent Motion to Recall against Nullify Sheriffs Notice of
Enforcement of Writ of Execution, and for Issuance of Restraining
Order/Writ of Restraining Injunction." It contended that there was in
truth no judgment against it "due to the wrongful attachment of ... (the
defendants') Learjet Aircraft 35A-44," that since neither Section 20,
Rule 57 of the Rules of Court nor the Resolution of the Court of Appeals
of March 10, 1987 had been complied with, there existed no award of
damages against it under its attachment bond, and enforcement of
execution against said bond would be contrary to due process.

The Trial Court forthwith restrained enforcement of the writ of

execution against the surety and set the surety's motion for hearing in
the morning of May 27, 1988. After receiving the parties' arguments,
the Court promulgated an Order on June 14, 1988 overruling the
movant surety's argument that it (the Court) had lost competence to
hear and determine the application or damages against the
attachment bond because the judgment of the Court of Appeals had
become final and executory. The Court observed that:
What is contemplated under Section 20, Rule 57, is that if no
application for damages is made before the entry of the final judgment
the surety on the bond is relieved from liability therefor. (Visayan
Surety and Insurance Corporation v. Pascual [85 Phil. 779], citing
Facundo vs. Tan and Facundo vs. Lim). In the case at bar, an
application was made before the entry of final judgment ... . What was
merely deferred was the hearing of said application before the trial
court. In fact, said application was duly noted by the Honorable Court
of Appeals in its resolution. Hence, an application for damages was
filed in time.
Considering the foregoing, and in order to determine the extent of the
liability of both principal and surety on the attachment bond, a hearing
is necessary.
The Court also resolved to issue, upon a bond of Pl,000,000.00, a writ
of preliminary injunction restraining the sheriffs from enforcing the writ
of execution or otherwise executing the judgment against the surety
"until the application for damages on the attachment bond is heard
and decided;" and set the hearing on the matter on August 9, 1988.
The surety moved for reconsideration, but its motion was denied by
Order handed down on October 13, 1988. The surety then went to the
Court of Appeals again, where it sought annulment of the Trial Court's
Orders of June 14, 1988 and October 13, 1988. Its petition for
certiorari, prohibition and preliminary injunction, filed on November 3,

1988, was docketed as CA-G.R. No. SP No. 15987. In it the surety

argued that it had been denied its day in court when, without its being
present at the trial, the defendants had "adduced evidence in support
of ... (the) damages" eventually awarded by the Court of Appeals; that
said defendants had "fatally failed to file an application for damages on
account of the wrongful attachment," and consequently, the Court had
"no more jurisdiction to set for hearing ... (the) urgent petition" (to
have damages awarded on account of illegal attachment executed
against attachment bond, etc.).
The Appellate Court's verdict however again went against the surety.
By Decision promulgated on March 8, 1 989, 5 the petition was
"DENIED DUE COURSE." According to the Court, (1) the "general
prayer" in the petition (to hold surety liable on its bond) dated
December 16,1986 "for such further reliefs justified in the premises"
was "broad enough to include and embrace an application or claim for
whatever damages movants sustained during the pendency of the
appeal, by reason of ... "the wrongful attachment ...", (2) such a finding
was consistent with "Supreme Court rulings' and the earlier "Resolution
of March 10, 1987" noting "defendants-appellants' application or claim
for damages against the surety" and referring it "to the, trial court ...
pursuant to Section 20, Rule 57 of the Rules of Court;" and (3) "what
must have been contemplated ... (in said application or claim for
damages) were not the damages awarded in CA-G.R. CV No. 08585, 6
but the damages which applicants or claimants could have suffered
during the pendency of said appeal, as a consequence of the wrongful
attachment found by final judgment," for otherwise "there would have
been no need for this Court to allow and, in effect, direct the trial court
a quo 'to hear and decide' subject post-judgment petition in CA-G.R. CV
No. 08585." The surety's motion for reconsideration dated March 28,
1989 was denied by Resolution dated May 17, 1989.
The surety is once again before us, 7 this time praying for reversal of
the Appellate Tribunal's aforesaid judgment of March 8, 1989. Once
again it will fail, no merit being discerned in its petition for review on
certiorari.

By settled rule a writ of preliminary attachment may issue once the

Court is satisfied, on consideration ex parte of the application and its
supporting affidavits and documents, 8 or after healing, as the court
may in its discretion consider proper, that any of the grounds specified
by law exists, and an acceptable bond is given by the applicant 9
... executed to the adverse party in an amount ... fixed by the judge,
not exceeding the applicant's claim, conditioned that the latter will pay
all the costs which may be adjudged to the adverse party and all
damages which he may sustain by reason of the attachment, if the
court shall finally adjudge that the applicant was not entitled thereto.
The filing of the attachment bond by a surety undoubtedly connotes
and operates as a voluntary submission by it to the Court's jurisdiction,
and of course binds it to faithfully comply with its specific obligations
under its bond.
The surety does not, to be sure, become liable on its bond simply
because judgment is subsequently rendered against the party who
obtained the preliminary attachment. The surety becomes liable only
when and if "the court shall finally adjudge that the applicant was not
entitled to the attachment." This is so regardless of the nature and
character of the judgment on the merits of the principal claims,
counterclaims or cross-claims, etc. asserted by the parties against
each other. Indeed, since an applicant's cause of action may be
entirely different from the ground relied upon by him for a preliminary
attachment, 10 it may well be that although the evidence warrants
judgment in favor of said applicant, the proofs may nevertheless also
establish that said applicant's proferred ground for attachment was
inexistent or specious and hence, the writ should not have issued at
all; i.e., he was not entitled thereto in the first place. In that event, the
final verdict should logically award to the applicant the relief sought in
his basic pleading, but at the same time sentence him usually on
the basis of a counterclaim to pay damages caused to his adversary
by the wronful attachment. 11

When the final judgment declares that the party at whose instance an
attachment had issued was not entitled thereto, there is no question
about the eminent propriety of condemning that party to the payment
of all the damages that the wrongful attachment had caused to the
party whose property had been seized under the attachment writ.
But what of the surety's liability? The surety on an attachment bond, as
already pointed out, assures that the applicant "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." 12 In other words
the surety, by submitting its attachment bond, binds itself solidarily to
make the same payments which its principal the party at whose
instance the attachment issues may be condemned to make, to
compensate for the damages resulting from the wrongful attachment,
although unlike its principal, its liability is limited to the amount stated
in its bond.
The final adjudication "that the applicant was not entitled" to the
attachment, standing alone, does not suffice to make the surety liable.
It is necessary, in addition, that the surety be accorded due process,
i.e., that it be given an opportunity to be heard on the question of its
solidarily liability for damages arising from wrongful attachment. This,
by established rule and practice, is accorded to the surety at a
summary hearing, scheduled after, judgment on presentation of an
application to hold it answerable on its bond. Evidently, such a
summary hearing is not rendered unnecessary or superfluous by the
fact that the matter of damages was among the issues tried during the
hearings on the merits, unless of course, the surety had previously
been duly impleaded as a party, or otherwise earlier notified and given
opportunity to be present and ventilate its side on the matter during
the trial. The procedure for the rendition of a binding directive on the
surety upon its solidarily liability for damages for wrongful attachment
is indicated in Section 20, Rule 5'7 of the Rules of Court. The section
reads as follows:

Sec. 20. Claim for damages on account of illegal attachment. If the

judgment on the action be in favor of the party against whom
attachment was issued, he may recover upon the bond given or
deposit made by the attaching creditor,, any damages resulting from
the attachment. Such damages may be awarded only upon application
and after proper hearing, and shall be included in the final judgment.
The application must be filed before the trial or before appeal is
perfected or before the judgment becomes executory, with due notice
to the attaching creditor and his surety or sureties, setting forth the
facts showing his right to damages and the amount thereof.
If the judgment of the appellate court be favorable to the party against
whom the attachment was issued, he must claim damages sustained
during the pendency of the appeal by filing an application with notice
to the party in whose favor the attachment was issued or his surety or
sureties. before the judgment of the appellate court becomes
executory. The appellate court may allow the application to be heard
and decided by the trial court.
Certain principles are derived from this provision of the Rules. A party
against whom a writ of preliminary attachment issues may impugn the
writ by alleging and proving inter alia that the applicant was not
entitled thereto, i.e., that the asserted ground for attachment was
inexistent, or the amount for which the writ was sought was excessive,
etc., this, by appropriate motion. He may also claim damages on
account of the wrongful attachment through an appropriate pleading,
such as a counterclaim, or other form of application. What is important
is that the "application must be filed before the trial or before appeal is
perfected or before the judgment becomes executory, with due notice
to the attaching creditor and his surety or sureties, setting forth the
facts showing his right to damages and the amount thereof."
In the case at bar, since the Trial Court's decision had gone against the
defendants, and no irregularity had been adjudged as regards the
preliminary attachment, the latter obviously had no occasion to apply
for damages from wrongful attachment although they could have so
applied therefor because, as already pointed out, it is entirely possible

under the law that an applicant for preliminary attachment be

adjudged entitled to relief on his basic claim and at the same time
pronounced as not entitled to the attachment.
As things turned out, the Trial Court's judgment was reversed by the
Court of Appeals; the latter dismissed the complaint, declared the
plaintiff not entitled to the attachment and sentenced it to pay to the
defendants damages on account thereof And it was only at this time
that the defendants could have presented and did actually present
their petition to enforce the surety's liability on its bond. This petition,
as aforestated, the Court of Appeals (a) noted and (b) referred to the
Trial Court with instructions "to hear and decide ... pursuant to Section
20, Rule 57 of the Rules of Court." Under the circumstances, and in the
light of the explicit provisions of said Section 20, Rule 57, there can be
no debate about the seasonablenes of the defendants' application for
damages and the correctness of the referral by the Court of Appeals of
the application for damages to the Trial Court for hearing and
determination.
Under the circumstances, too, there can be no gainsaying the surety's
full awareness of its undertakings under its bond: that, as the law puts
it: "the plaintiff will pay all costs which may be adjudged to the
defendant(s), and all damages which may be sustained by reason of
the attachment, if the same shall finally be adjudged to have been
wrongful and without cause," and that those damages plainly
comprehended not only those sustained during the trial of the action
but also those during the pendency of the appeal. This is the law, 13
and this is how the surety's liability should be understood. The surety's
liability may be enforced whether the application for damages for
wrongful attachment be submitted in the original proceedings before
the Trial Court, or on appeal, so long as the judgment has not become
executory. The surety's liability is not and cannot be limited to the
damages caused by the improper attachment only during the
pendency of the appeal. That would be absurb. The plain and patent
intendment of the law is that the surety shall answer for all damages
that the party may suffer as a result of the illicit attachment, for all the
time that the attachment was in force; from levy to dissolution. The

fact that the attachment was initially (and erroneously) deemed correct
by the Trial Court, and it was only on appeal that it was pronounced
improper, cannot restrict recovery on the bond only to such damages
as might have been sustained during the appeal. The declaration by
the appellate court that the applicant for attachment "was not entitled
thereto," signifies that the attachment should not have issued in the
first place, that somehow the Trial Court had been misled into issuing
the writ although no proper ground existed therefor. The logical and
inevitable conclusion is that the applicant for attachment and the
surety on the attachment bond are solidarily liable for all the damages
suffered by the party against whom the writ is enforced, except only
that the surety's liability is limited to the amount set forth in its bond.
The fact that the second paragraph of the rule speaks only of
"damages sustained during the pendency of the appeal" is of no
moment; it obviously proceeds from the assumption in the first
paragraph that the award for the damages suffered during the
pendency of the case in the trial court was in fact "included in the final
judgment" (or applied for therein before the appeal was perfected or
the judgment became executory); hence, it states that the damages
additionally suffered thereafter, i.e., during the pendency of the
appeal, should be claimed before the judgment of the appellate
tribunal becomes executory. It however bears repeating that where, as
in the case at bar, the judgment of the Trial Court has expressly or
impliedly sustained the attachment and thus has given rise to no
occasion to speak of, much less, file an application for damages for
wrongful attachment, and it is only in the decision of the Court of
Appeals that the attachment is declared wrongful and that the
applicant "was not entitled thereto," the rule is, as it should be, that it
is entirely proper at this time for the application for damages for such
wrongful attachment to be filed i.e., for all the damages sustained
thereby, during all the time that it was in force, not only during the
pendency of the appeal. And the application must be filed "with notice
to the party in whose favor the attachment was issued or his surety or
sureties, before the judgment of the appellate court becomes
executory." In such a situation, the appellate court may resolve the

application itself or allow it "to be heard and decided by the trial

court."
WHEREFORE, the petition is DISMISSED for lack of merit, the costs
against the petitioner.
SO ORDERED.
THIRD DIVISION
G.R. No. 166759 November 25, 2009
SOFIA TORRES, FRUCTOSA TORRES, HEIRS OF MARIO TORRES and
SOLAR RESOURCES, INC., vs.
NICANOR SATSATIN, EMILINDA AUSTRIA SATSATIN, NIKKI NORMEL
SATSATIN and NIKKI NORLIN SATSATIN,
DECISION
PERALTA, J.:

This is a petition for review on certiorari assailing the Decision[1] dated

November 23, 2004 of the Court of Appeals (CA) in CA-G.R. SP No.
83595, and its Resolution[2] dated January 18, 2005, denying
petitioners motion for reconsideration.
The factual and procedural antecedents are as follows:
The siblings Sofia Torres (Sofia), Fructosa Torres (Fructosa), and
Mario Torres (Mario) each own adjacent 20,000 square meters track of
land situated at Barrio Lankaan, Dasmarias, Cavite, covered by
Transfer Certificate of Title (TCT) Nos. 251267,[3] 251266,[4] and
251265,[5] respectively.
Sometime in 1997, Nicanor Satsatin (Nicanor) asked petitioners
mother, Agripina Aledia, if she wanted to sell their lands. After
consultation with her daughters, daughter-in-law, and grandchildren,
Agripina agreed to sell the properties. Petitioners, thus, authorized
Nicanor, through a Special Power of Attorney, to negotiate for the sale
of the properties.[6]
Sometime in 1999, Nicanor offered to sell the properties to Solar
Resources, Inc. (Solar). Solar allegedly agreed to purchase the three
parcels of land, together with the 10,000-square-meter property owned

by a certain Rustica Aledia, for P35,000,000.00. Petitioners alleged

that Nicanor was supposed to remit to them the total amount of
P28,000,000.00 or P9,333,333.00 each to Sofia, Fructosa, and the heirs
of Mario.
Petitioners claimed that Solar has already paid the entire
purchase price of P35,000,000.00 to Nicanor in Thirty-Two (32) postdated checks which the latter encashed/deposited on their respective
due dates. Petitioners added that they also learned that during the
period from January 2000 to April 2002, Nicanor allegedly acquired a
house and lot at Vista Grande BF Resort Village, Las Pias City and a
car, which he registered in the names of his unemployed children, Nikki
Normel Satsatin and Nikki Norlin Satsatin. However, notwithstanding
the receipt of the entire payment for the subject property, Nicanor only
remitted the total amount of P9,000,000.00, leaving an unremitted
balance of P19,000,000.00. Despite repeated verbal and written
demands, Nicanor failed to remit to them the balance of
P19,000,000.00.
Consequently, on October 25, 2002, petitioners filed before the
regional trial court (RTC) a Complaint[7] for sum of money and
damages, against Nicanor, Ermilinda Satsatin, Nikki Normel Satsatin,
and Nikki Norlin Satsatin. The case was docketed as Civil Case No.
2694-02, and raffled to RTC, Branch 90, Dasmarias, Cavite.
On October 30, 2002, petitioners filed an Ex-Parte Motion for the
Issuance of a Writ of Attachment,[8] alleging among other things: that
respondents are about to depart the Philippines; that they have
properties, real and personal in Metro Manila and in the nearby
provinces; that the amount due them is P19,000,000.00 above all other
claims; that there is no other sufficient security for the claim sought to
be enforced; and that they are willing to post a bond fixed by the court
to answer for all costs which may be adjudged to the respondents and
all damages which respondents may sustain by reason of the
attachment prayed for, if it shall be finally adjudged that petitioners
are not entitled thereto.

On October 30, 2002, the trial court issued an Order[9] directing

the petitioners to post a bond in the amount of P7,000,000.00 before
the court issues the writ of attachment, the dispositive portion of which
reads as follows:
WHEREFORE, premises considered, and finding the present complaint
and motion sufficient in form and substance, this Court hereby directs
the herein plaintiffs to post a bond, pursuant to Section 3, Rule 57 of
the 1997 Rules of Civil Procedure, in the amount of Seven Million Pesos
(P7,000,000.00), before the Writ of Attachment issues.[10]
On November 15, 2002, petitioners filed a Motion for Deputation
of Sheriff,[11] informing the court that they have already filed an
attachment bond. They also prayed that a sheriff be deputized to
serve the writ of attachment that would be issued by the court.
In the Order[12] dated November 15, 2002, the RTC granted the above
motion and deputized the sheriff, together with police security
assistance, to serve the writ of attachment.
Thereafter, the RTC issued a Writ of Attachment[13] dated November
15, 2002, directing the sheriff to attach the estate, real or personal, of
the respondents, the decretal portion of which reads:
WE, THEREFORE, command you to attach the estate, real or personal,
not exempt from execution, of the said defendants, in your province, to
the value of said demands, and that you safely keep the same
according to the said Rule, unless the defendants give security to pay
such judgment as may be recovered on the said action, in the manner
provided by the said Rule, provided that your legal fees and all
necessary expenses are fully paid.
You shall return this writ with your proceedings indorsed hereon within
twenty (20) days from the date of receipt hereof.
GIVEN UNDER MY HAND AND SEAL of this Court, this 15th day of
November, 2002, at Imus for Dasmarias, Cavite, Philippines.[14]

On November 19, 2002, a copy of the writ of attachment was served

upon the respondents. On the same date, the sheriff levied the real
and personal properties of the respondent, including household
appliances, cars, and a parcel of land located at Las Pias, Manila.[15]
On November 21, 2002, summons, together with a copy of the
complaint, was served upon the respondents.[16]
On November 29, 2002, respondents filed their Answer.[17]
On the same day respondents filed their answer, they also filed a
Motion to Discharge Writ of Attachment[18] anchored on the following
grounds: the bond was issued before the issuance of the writ of
attachment; the writ of attachment was issued before the summons
was received by the respondents; the sheriff did not serve copies of
the application for attachment, order of attachment, plaintiffs
affidavit, and attachment bond, to the respondents; the sheriff did not
submit a sheriffs return in violation of the Rules; and the grounds cited
for the issuance of the writ are baseless and devoid of merit. In the
alternative, respondents offered to post a counter-bond for the lifting of
the writ of attachment.[19]
On March 11, 2003, after the parties filed their respective pleadings,
the RTC issued an Order[20] denying the motion, but at the same time,
directing the respondents to file a counter-bond, to wit:
WHEREFORE, premises considered, after the pertinent pleadings of the
parties have been taken into account, the herein defendants are
hereby directed to file a counter-bond executed to the attaching party,
in the amount of Seven Million Pesos (P7,000,000.00), to secure the
payment of any judgment that the attaching party may recover in the
action, with notice on the attaching party, whereas, the Motion to
Discharge Writ of Attachment is DENIED.
SO ORDERED.[21]

Thereafter, respondents filed a motion for reconsideration and/or

motion for clarification of the above order. On April 3, 2003, the RTC
issued another Order[22] which reads:
In view of the Urgent Motion For Reconsideration And/Or Motion For
Clarification of the Order of this Court dated March 11, 2003, denying
their Motion to Discharge Writ of Attachment filed by the defendants
through counsel Atty. Franco L. Loyola, the Motion to Discharge Writ of
Attachment is denied until after the defendants have posted the
counter-bond in the amount of Seven Million Pesos (P7,000,000.00).
The defendants, once again, is directed to file their counter-bond of
Seven Million Pesos (P7,000,000.00), if it so desires, in order to
discharge the Writ of Attachment.
SO ORDERED.
On December 15, 2003, respondents filed an Urgent Motion to Lift/Set
Aside Order Dated March [11], 2003,[23] which the RTC denied in an
Order[24] of even date, the dispositive portion of which reads:
WHEREFORE, premises considered, defendants Urgent Motion to
Lift/Set Aside Order Dated March 23, 2003 (With Manifestation to
Dissolve Writ of Attachment) is hereby DENIED for lack of Merit.

court has no jurisdiction over the person and subject matter of the
complaint when the subject Writ of Attachment was issued;
(2) public respondents committed grave abuse of discretion amounting
to lack of or in excess of jurisdiction in granting the issuance of the
Writ of Attachment despite non-compliance with the formal requisites
for the issuance of the bond and the Writ of Attachment.[28]
Respondents argued that the subject writ was improper and irregular
having been issued and enforced without the lower court acquiring
jurisdiction over the persons of the respondents. They maintained that
the writ of attachment was implemented without serving upon them
the summons together with the complaint. They also argued that the
bond issued in favor of the petitioners was defective, because the
bonding company failed to obtain the proper clearance that it can
transact business with the RTC of Dasmarias, Cavite. They added that
the various clearances which were issued in favor of the bonding
company were applicable only in the courts of the cities of Pasay,
Pasig, Manila, and Makati, but not in the RTC, Imus, Cavite.[29]
On November 23, 2003, the CA rendered the assailed Decision in favor
of the respondents, finding grave abuse of discretion amounting to lack
of or in excess of jurisdiction on the part of the RTC in issuing the
Orders dated December 15, 2003 and March 3, 2004. The decretal
portion of the Decision reads:

SO ORDERED.
Respondents filed an Urgent Motion for Reconsideration,[25] but it was
denied in the Order[26] dated March 3, 2004.
Aggrieved, respondents filed before the CA a Petition for Certiorari,
Mandamus and Prohibition with Preliminary Injunction and Temporary
Restraining Order[27] under Rule 65 of the Rules of Court, docketed as
CA-G.R. SP No. 83595, anchored on the following grounds:
(1) public respondents committed grave abuse of discretion amounting
to lack of or in excess of jurisdiction in failing to notice that the lower

WHEREFORE, the instant petition is hereby GRANTED. Accordingly, the

assailed Orders are hereby nullified and set aside. The levy on the
properties of the petitioners pursuant to the Writ of Attachment issued
by the lower court is hereby LIFTED.
SO ORDERED.[30]
Petitioners filed a Motion for Reconsideration,[31] but it was denied in
the Resolution[32] dated January 18, 2005.
Hence, this petition assigning the following errors:

I.

THE HONORABLE COURT OF APPEALS ERRED IN ORDERING

THE LIFTING OF THE WRIT OF ATTACHMENT PURSUANT TO
SECTION 13, RULE 57 OF THE REVISED RULES OF CIVIL
PROCEDURE.

II.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING

THAT PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF OR IN EXCESS OF
JURISDICTION IN GRANTING THE WRIT OF ATTACHMENT
DESPITE THE BOND BEING INSUFFICIENT AND HAVING BEEN
IMPROPERLY ISSUED.

III.

IV.

THE HONORABLE COURT OF APPEALS ERRED IN NOT

DISMISSING THE PETITION BY REASON OF ESTOPPEL, LACHES
AND PRESCRIPTION AND IN HOLDING THAT THE WRIT OF
ATTACHMENT
WAS
IMPROPERLY
AND
IRREGULARLY
ENFORCED IN VIOLATION OF SECTION 5, RULE 57 OF THE
REVISED RULES OF COURT.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING
THAT THE PRINCIPLE OF ESTOPPEL WILL NOT LIE AGAINST
RESPONDENTS.

Petitioners maintain that in the case at bar, as in the case of FCY

Construction Group, Inc. v. Court of Appeals,[33] the only way the
subject writ of attachment can be dissolved is by a counter-bond. They
claim that the respondents are not allowed to file a motion to dissolve
the attachment under Section 13, Rule 57 of the Rules of Court.
Otherwise, the hearing on the motion for the dissolution of the writ
would be tantamount to a trial on the merits, considering that the writ
of preliminary attachment was issued upon a ground which is, at the
same time, the applicants cause of action.
Petitioners insist that the determination of the existence of grounds to
discharge a writ of attachment rests in the sound discretion of the
lower court. They argue that the Certification[34] issued by the Office

of the Administrator and the Certifications[35] issued by the clerks of

court of the RTCs of Dasmarias and Imus, Cavite, would show that the
bonds offered by Western Guaranty Corporation, the bonding company
which issued the bond, may be accepted by the RTCs of Dasmarias
and Imus, Cavite, and that the said bonding company has no pending
liability with the government.
Petitioners contend that respondents are barred by estoppel, laches,
and prescription from questioning the orders of the RTC issuing the writ
of attachment. They also maintain that the issue whether there was
impropriety or irregularity in the issuance of the orders is moot and
academic, considering that the attachment bond questioned by the
respondent had already expired on November 14, 2003 and petitioners
have renewed the attachment bond covering the period from
November 14, 2003 to November 14, 2004, and further renewed to
cover the period of November 14, 2004 to November 14, 2005.
The petition is bereft of merit.
A writ of preliminary attachment is defined as a provisional remedy
issued upon order of the court where an action is pending to be levied
upon the property or properties of the defendant therein, the same to
be held thereafter by the sheriff as security for the satisfaction of
whatever judgment that might be secured in the said action by the
attaching creditor against the defendant.[36]
In the case at bar, the CA correctly found that there was grave abuse
of discretion amounting to lack of or in excess of jurisdiction on the
part of the trial court in approving the bond posted by petitioners
despite the fact that not all the requisites for its approval were
complied with. In accepting a surety bond, it is necessary that all the
requisites for its approval are met; otherwise, the bond should be
rejected.[37]
Every bond should be accompanied by a clearance from the Supreme
Court showing that the company concerned is qualified to transact
business which is valid only for thirty (30) days from the date of its

issuance.[38] However, it is apparent that the Certification[39] issued

by the Office of the Court Administrator (OCA) at the time the bond
was issued would clearly show that the bonds offered by Western
Guaranty Corporation may be accepted only in the RTCs of the cities of
Makati, Pasay, and Pasig. Therefore, the surety bond issued by the
bonding company should not have been accepted by the RTC of
Dasmarias, Branch 90, since the certification secured by the bonding
company from the OCA at the time of the issuance of the bond
certified that it may only be accepted in the above-mentioned cities.
Thus, the trial court acted with grave abuse of discretion amounting to
lack of or in excess of jurisdiction when it issued the writ of attachment
founded on the said bond.
Moreover, in provisional remedies, particularly that of preliminary
attachment, the distinction between the issuance and the
implementation of the writ of attachment is of utmost importance to
the validity of the writ. The distinction is indispensably necessary to
determine when jurisdiction over the person of the defendant should
be acquired in order to validly implement the writ of attachment upon
his person.
This Court has long put to rest the issue of when jurisdiction over the
person of the defendant should be acquired in cases where a party
resorts to provisional remedies. A party to a suit may, at any time
after filing the complaint, avail of the provisional remedies under the
Rules of Court. Specifically, Rule 57 on preliminary attachment speaks
of the grant of the remedy at the commencement of the action or at
any time before entry of judgment.[40] This phrase refers to the date
of the filing of the complaint, which is the moment that marks the
commencement of the action. The reference plainly is to a time
before summons is served on the defendant, or even before summons
issues.[41]
In Davao Light & Power Co., Inc. v. Court of Appeals,[42] this Court
clarified the actual time when jurisdiction should be had:

It goes without saying that whatever be the acts done by the Court
prior to the acquisition of jurisdiction over the person of defendant x x
x issuance of summons, order of attachment and writ of attachment x
x x these do not and cannot bind and affect the defendant until and
unless jurisdiction over his person is eventually obtained by the court,
either by service on him of summons or other coercive process or his
voluntary submission to the courts authority. Hence, when the sheriff
or other proper officer commences implementation of the writ of
attachment, it is essential that he serve on the defendant not only a
copy of the applicants affidavit and attachment bond, and of the order
of attachment, as explicitly required by Section 5 of Rule 57, but also
the summons addressed to said defendant as well as a copy of the
complaint x x x. (Emphasis supplied.)
In Cuartero v. Court of Appeals,[43] this Court held that the grant of
the provisional remedy of attachment involves three stages: first, the
court issues the order granting the application; second, the writ of
attachment issues pursuant to the order granting the writ; and third,
the writ is implemented. For the initial two stages, it is not necessary
that jurisdiction over the person of the defendant be first obtained.
However, once the implementation of the writ commences, the court
must have acquired jurisdiction over the defendant, for without such
jurisdiction, the court has no power and authority to act in any manner
against the defendant. Any order issuing from the Court will not bind
the defendant.[44]
Thus, it is indispensable not only for the acquisition of jurisdiction over
the person of the defendant, but also upon consideration of fairness, to
apprise the defendant of the complaint against him and the issuance of
a writ of preliminary attachment and the grounds therefor that prior or
contemporaneously to the serving of the writ of attachment, service of
summons, together with a copy of the complaint, the application for
attachment, the applicants affidavit and bond, and the order must be
served upon him.
In the instant case, assuming arguendo that the trial court validly
issued the writ of attachment on November 15, 2002, which was

implemented on November 19, 2002, it is to be noted that the

summons, together with a copy of the complaint, was served only on
November 21, 2002.
At the time the trial court issued the writ of attachment on November
15, 2002, it can validly to do so since the motion for its issuance can
be filed at the commencement of the action or at any time before
entry of judgment. However, at the time the writ was implemented,
the trial court has not acquired jurisdiction over the persons of the
respondent since no summons was yet served upon them. The proper
officer should have previously or simultaneously with the
implementation of the writ of attachment, served a copy of the
summons upon the respondents in order for the trial court to have
acquired jurisdiction upon them and for the writ to have binding effect.
Consequently, even if the writ of attachment was validly issued, it was
improperly or irregularly enforced and, therefore, cannot bind and
affect the respondents.
Moreover, although there is truth in the petitioners contention that an
attachment may not be dissolved by a showing of its irregular or
improper issuance if it is upon a ground which is at the same time the
applicants cause of action in the main case, since an anomalous
situation would result if the issues of the main case would be
ventilated and resolved in a mere hearing of a motion. However, the
same is not applicable in the case bar. It is clear from the respondents
pleadings that the grounds on which they base the lifting of the writ of
attachment are the irregularities in its issuance and in the service of
the writ; not petitioners cause of action.
Further, petitioners contention that respondents are barred by
estoppel, laches, and prescription from questioning the orders of the
RTC issuing the writ of attachment and that the issue has become moot
and academic by the renewal of the attachment bond covering after its
expiration, is devoid of merit. As correctly held by the CA:

There are two ways of discharging the attachment. First, to file a

counter-bond in accordance with Section 12 of Rule 57. Second[,] [t]o
quash the attachment on the ground that it was irregularly or
improvidently issued, as provided for in Section 13 of the same rule.
Whether the attachment was discharged by either of the two ways
indicated in the law, the attachment debtor cannot be deemed to have
waived any defect in the issuance of the attachment writ by simply
availing himself of one way of discharging the attachment writ, instead
of the other. The filing of a counter-bond is merely a speedier way of
discharging the attachment writ instead of the other way.[45]
Moreover, again assuming arguendo that the writ of attachment was
validly issued, although the trial court later acquired jurisdiction over
the respondents by service of the summons upon them, such belated
service of summons on respondents cannot be deemed to have cured
the fatal defect in the enforcement of the writ. The trial court cannot
enforce such a coercive process on respondents without first obtaining
jurisdiction over their person. The preliminary writ of attachment must
be served after or simultaneous with the service of summons on the
defendant whether by personal service, substituted service or by
publication as warranted by the circumstances of the case. The
subsequent service of summons does not confer a retroactive
acquisition of jurisdiction over her person because the law does not
allow for retroactivity of a belated service.[46]
WHEREFORE, premises considered, the petition is DENIED.
The
Decision and Resolution of the Court of Appeals dated November 23,
2004 and January 18, 2005, respectively, in CA-G.R. SP No. 83595 are
AFFIRMED.
SO ORDERED.