Phil-AirCon v RCJ Lines

Summary: Phil Air sold 4 AC units to RCJ, who failed to pay upon demand as evidenced by the
fact that Phil Air was not able to encash the 3 checks issued to them by RCJ. Phil Air filed a
complaint in court for the issuance of preliminary attachment to recover what was due to them.
RTC granted this, but lifted said writ upon the posting of RCJ of a counter bond. CA held Phil Air
liable for the premiums paid by RCJ through its filing of the counter bond.

Doctrine: Phil Air is not liable to pay RCJ for the premiums it paid when it issued the counter bond
because that is exactly what the writ of preliminary attachment is for. The counter bond does not
have any effect on the preliminary attachment. The counter-bond serves as a substitute for the
property attached. The Attachment bond answers for all damages incurred by the party against
whom attachment was issued.

Facts:
 Petition for Review on Certiorari assailing CA decision
 Phil Air sold to RCJ Lines (4) Carrier Paris 240 Air Con units for RCJ busses
o Cost Php1.24M BUT RCJ only paid P400K  Bal of Php840k
 RCJ had accepted the delivery of the units, which were inspected by RCJ President Abadilla
o Phil Air performed regular maintenance on the units pursuant to the 1yr warranty
o When Phil Air tried to encash 3 postdated checks issued to it by RCJ, they could
not because of insufficient funds, and because payments were stopped
 Phil Air demanded the payment of the balance plus interest  Filed a complaint for sum
of money with prayer for the issuance of preliminary attachment
o RCJ refused to pay bec Phil Air allegedly breached its warranty  units did not
cool buses
 RTC  granted the app for the issuance of a writ of preliminary attachment in the amt of
Php 1.656M
o This writ was later lifted because RTC granted RCJ urgent motion to discharge said
writ upon the posting of RCJ of a counter bond in the same amount as the
attachment
 CA  Ordered Phil Air to reimburse premium on counter bond amounting to Php 82,274
bec the writ was improvidently issued

Issues:
W/N Phil Air is not directly liable for the counter-bond premium and RCJ’s alleged unrealized
profits? NO they are not directly liable
 Writ of preliminary attachment = provisional remedy issued by the court when an action
is pending to be levied upon the property or properties of the defendant
o Prop is held by sheriff as security for the satisfaction of judgement secured by the
attaching party against the defendant
o Conditions for issuance: 1.) Valid Ground 2.) Applicant must post a bond in the
amount fixed by the court (R57 S4)
 o Party whose property is attached has different modes for relief to have said writ
lifted using the ff.  These reliefs do not have any effect on the attachment bond,
The dissolution of the preliminary attachment does not result into the dissolution
of the attachment bond, what happens here is that the applicant for relief
promises to pay what is due to the adverse part due to the attachment
 R57 S12 by depositing case or posting counter-bond
 Amount must be equal to that fixed by the court for writ of
preliminary attachment
 This mode only applies when there has already been a seizure of
the prop by the sheriff + motion to lift writ was already made
 Court orders discharge of attachment after 1.) movant makes
deposit or posts counter bond 2.) Court hears motion to discharge
with due notice to adverse party
 Counter-bond stands in place of prop released  Takes effect
upon posting of bond or the making of deposit
 R57 S13  by showing that attachment is excessive, by proving that the
attachment bond was improperly or irregularly issued or enforced or that
the bond is insufficient
 Takes effect upon showing of “improperness”, irregularity,
insufficiency
 R57 S2  by claiming prop is exempt from execution
 RCJ used 1st mode (cash bond) here
o Attachment bond answers for all damages incurred by the party against whom
attachment was issued
o Phil Air not directly liable for costs sustained by RCJ due to attachment bec R57
states that the attachment bond will pay all costs which may be adjudged to the
adverse party