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CASE RELEVANT FACTS/ ISSUE RULING/ SC ANSWER TO ISSUE

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

It is quite palpable that the necessary steps in


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

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

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

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– and since there was a mutual agreement
between the parties that the amount be divided
equally pending the outcome of the arbitration,
that amount should be the basis for the
computation of the counter-bond.
Issue: W/N the Court of Appeals erred in not ruling
that the TC committed GAD in denying petitioner’s
motion to discharge attachment by counterbond?

57.9 REPUBLIC V. MEGA PACIFIC Background: RA 8436 authorized COMELEC to use Yes.
eSOLUTIONS, INC. an automated election system for the May 1998 1. Fraud on the part of respondent MPEI was
elections but was not materialized during the 1998 sufficiently established by the factual findings of
and 2001 elections. this Court in its 2004 Decision and subsequent
- During the 2004 elections, MPC was awarded the pronouncements.
automation project. - To sustain an attachment on this ground, it
- Despite the award to MPC, the COMELEC must be shown that the debtor in contracting
and MPEI executed on 2 June 2003 the Automated the debt or incurring the obligation intended to
Counting and Canvassing Project Contract defraud the creditor. The fraud must relate to
(automation contract), but the same contract was the execution of the agreement and must have
declared null and void by the SC in their 2004 been the reason which induced the other party
Decision. into giving consent which he would not have
- Upon the finality of the declaration of nullity of otherwise given. To constitute a ground for
the automation contract, respondent MPEI filed a attachment in Section 1(d), Rule 57 of the Rules
Complaint for Damages before the RTC Makati, of Court, fraud should be committed upon
arguing that, notwithstanding the nullification of contracting the obligation sued upon. A debt is
the automation contract, the COMELEC was still fraudulently contracted if at the time of
bound to pay the amount of P200,165,681.89. contracting it the debtor has a preconceived plan
- By way of a counterclaim, petitioner demanded or intention not to pay, as it is in this case.
from respondents the return of the payments - Proofs of fraud:
made pursuant to the automation contract. i. Respondent MPEI had perpetrated a scheme
Subsequently, the trial court denied the prayer for against petitioner to secure the automation
the issuance of a writ of preliminary attachment. contract by using MPC as supposed bidder and
(CA: decided the case according to the 2004 eventually succeeding in signing the automation
Decision regarding nullity of the automation contract as MPEI alone, an entity which was
contract) ineligible to bid in the first place.
Counter-argument: A writ of preliminary ii. Fraud on the part of respondent MPEI was
attachment cannot be issued, considering that they further shown by the fact that despite the failure
are not parties to the 2004 case. of its ACMs to pass the tests conducted by the
ISSUE: DOST, respondent still acceded to being awarded
1. W/N a preliminary attachment can be the automation contract.
issued?
2. W/N a preliminary attachment can be 2. YES. Through the application of the piercing
issued as against the respondent’s doctrine which justifies the issuance of a writ of
individual properties? preliminary attachment over the properties of
the individual respondents.
- Veil-piercing in fraud cases requires that the
legal fiction of separate juridical personality is
used for fraudulent or wrongful ends.

57. 10. SECURITY BANK CORP. V. Subject of the case: LOAN (credit facility) covered YES.
GREAT WALL COMMERCIAL PRESS by trust receipts. - Security Bank's complaint stated that Great
COMPANY -Herein respondents failed to pay their obligations Wall, through its Vice President Fredino Cheng
despite several demands. However, the Atienza, executed various trust receipt
respondents offered a repayment proposal and agreements in relation to its loan transactions.
thereafter requested a loan restructure. The trust receipts stated that in consideration of
Case: Collection of Sum of Money the delivery to the entrustee (Great Wall) of the
Counter-argument: there was insufficient basis for possession of the goods, it obligates itself to hold
the issuance of the writ of preliminary attachment in trust for the bank the goods, to sell the goods
against them; that the mere failure to pay their for the benefit of the bank, to turn over the
obligation was not an act of fraud; that the proceeds of the sale to the bank, and to return
application for the issuance of the writ of the goods to the bank in the event of non-sale.
preliminary attachment, the affidavit of merit and By signing the trust receipt agreements,
judicial affidavit merely cited general allegations of respondents fully acknowledged the
fraud and Security Bank failed to sufficiently show consequences under the law once they failed to
the factual circumstances constituting fraud. abide by their obligations therein. Upon the
Moreover, respondents claimed that they did not maturity date, however, respondents failed to
commit fraud because they were earnestly deliver the proceeds of the sale to Security Bank
negotiating with Security Bank for a loan or to return the goods in case of non-sale.
restructuring. Security Bank sent a final demand letter to
ISSUE: W/N THE ISSUANCE OF RTC OF A respondents, which was also attached to the
PRELIMINARY ATTACHMENT IS PROPER? complaint, but it was unheeded.
- The Court is of the view that Security Bank's
allegations of violation of the trust receipts in its
complaint was specific and sufficient to assert
fraud on the part of respondents.
- Hence, the issuance of the writ of preliminary
injunction being proper.

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NOTE!! While the Court finds that Security Bank
has substantiated its allegation of fraud against
respondents to warrant the issuance of writ or
preliminary attachment, this finding should not
in any manner affect the merits of the principal
case. The writ of preliminary attachment is only a
provisional remedy, which is not a cause of
action in itself but is merely adjunct to a main
suit.

57. 11. TSUNEISHI HEAVY - MIS Corp. contracted the services of Tsuneishi to 1. NO.
INDUSTRIES, INC. V. MIS MARITIME dry dock and repair its vessel M/T MIS-1. The latter In Quasha Asperilla Ancheta Valmonte Peña &
CORP. performed the required services. Marcos v. Juan, we held:
- However, about a month later and while the An attachment proceeding is for the purpose of
vessel was still dry docked, Tsuneishi conducted an creating a lien on the property to serve as
engine test on M/T MIS-1. The vessel's engine security for the payment of the creditors' claim.
emitted smoke. The parties eventually discovered Hence, where a lien already exists, as in this case
that this was caused by a burnt crank journal. The a maritime lien, the same is already equivalent to
crankpin also showed hairline cracks due to an attachment.
defective lubrication or deterioration, Tsuneishi - To be clear, we repeat that when a lien already
insists that the damage was not its fault while MIS exists, this is already equivalent to an
insists on the contrary. Nevertheless, as an act of attachment. This is where Tsuneishi's argument
good will, Tsuneishi paid for the vessel's new fails.
engine crankshaft, crankpin, and main bearings.
- When Tsuneishi demanded the payment of its 2. YES.
services, MIS demanded a set off of its claim - An examination of the Bitera Affidavit reveals
against Tsuneishi contending that they have lost that it failed to allege the existence of fraud with
income for the past few months when the ship was sufficient specificity. The affidavit merely states
in dry dock. that MIS refused to pay its obligation because it
- Tsuneishi rejected MIS' demands. It delivered the demanded a set off between its obligation to
vessel to MIS in September 2006.8 On November Tsuneishi and Tsuneishi's liability for MIS' losses
6, 2006, MIS signed an Agreement for Final caused by the delay in the turn-over of the
Price. However, despite repeated demands, MIS vessel. The affidavit insists that this demand for
refused to pay Tsuneishi the amount billed under set off was not legally possible. Clearly, there is
their contract. nothing in the affidavit that even approximates
- On April 10, 2008, Tsuneishi filed a any act of fraud which MIS committed in the
complaint12 against MIS before the RTC. This performance of its obligation. MIS' position was
complaint stated that it is invoking the admiralty clear: Tsuneishi caused the damage in the
jurisdiction of the RTC to enforce a maritime lien vessel's engine which delayed its trip and should
under Section 21 of the Ship Mortgage Decree of thus be liable for its losses. There is no showing
197813 (Ship Mortgage Decree). The complaint that MIS performed any act to deceive or
included a prayer for the issuance of arrest defraud Tsuneishi.
order/writ of preliminary attachment. To support - Even assuming that MIS is wrong in refusing to
this prayer, the complaint alleged that Section 21 pay Tsuneishi, this is nevertheless not the fraud
of the Ship Mortgage Decree as well as Rule 57 of contemplated in Section 1(d), Rule 57 of the
the Rules of Court on attachment authorize the Rules of Court. Civil law grants Tsuneishi various
issuance of an order of arrest of vessel and/or writ remedies in the event that the trial court rules in
of preliminary attachment. its favor such as the payment of the obligation,
damages and legal interest. The issuance of a
Issue: 1) whether a maritime lien under Section 21 writ of preliminary attachment is not one of
of the Ship Mortgage Decree may be enforced those remedies.
through a writ of preliminary attachment under - There is a reason why a writ of preliminary
Rule 57 of the Rules of Court attachment is available only in specific cases
enumerated under Section 1 of Rule 57. As it
2) whether the CA correctly ruled that Tsuneishi entails interfering with property prior to a
failed to comply with the requirements for the determination of actual liability, it is issued with
issuance of a writ of preliminary injunction. great caution and only when warranted by the
circumstances. As we said in Ng Wee v.
Tankiansee, the rules on the issuance of the writ
of preliminary attachment as a provisional
remedy are strictly construed against the
applicant because it exposes the debtor to
humiliation and annoyance.
57.12. PHILIPPINE COMMERIAL Alejandro, a resident of Hongkong, executed in NO. (YES, as to damages)
INTERNATIONAL BANK V. ALEJANDRO favor of petitioner a promissory note obligating - There is no merit in petitioner’s contention that
himself to payP249,828,588.90 plus interest. In respondent can be considered a resident who is
view of the fluctuations in the foreign exchange temporarily out of the Philippines upon whom
rates which resulted in the insufficiency of the service of summons may be effected by
deposits assigned by respondent as security for the publication, and therefore qualifies as among
loan, petitioner requested the latter to put up those against whom a writ of attachment may be
additional security for the loan. issued under Section 1, paragraph (f), Rule 57 of
- In praying for the issuance of a writ of preliminary the Rules of Court which provides:
attachment under Section 1 paragraphs (e) and (f) f) In an action against a party x x x on whom
of Rule 57 of the Rules of Court, petitioner alleged summons may be served by publication.
that (1) respondent fraudulently withdrew his
unassigned deposits notwithstanding his verbal SEC. 1. Grounds upon which attachment may
promise to PCIB Assistant Vice President Corazon issue. — At the commencement of the action or at
B. Nepomuceno not to withdraw the same prior to any time before entry of judgment, a plaintiff or

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their assignment as security for the loan; and (2) any proper party may have the property of the
that respondent is not a resident of the adverse party attached as security for the
Philippines. The application for the issuance of a satisfaction of any judgment that may be
writ was supported with the affidavit of recovered in the following cases:
Nepomuceno. (f) In an action against a party who
Counter-argument: resides out of the Philippines, or on
The withdrawal of his unassigned deposits was not whom summons may be served by
fraudulent as it was approved by petitioner. He publication.
also alleged that petitioner knew that he maintains - The purposes of preliminary attachment are: (1)
a permanent residence at Calle Victoria, Ciudad to seize the property of the debtor in advance of
Regina, Batasan Hills, Quezon City, and an office final judgment and to hold it for purposes of
address in Makati City at the Law Firm Romulo satisfying said judgment, as in the grounds stated
Mabanta Buenaventura Sayoc & De los in paragraphs (a) to (e) of Section 1, Rule 57 of the
Angeles, 10 where he is a partner. In both Rules of Court; or (2) to acquire jurisdiction over
addresses, petitioner regularly communicated with the action by actual or constructive seizure of the
him through its representatives. Respondent added property in those instances where personal or
that he is the managing partner of the Hong Kong substituted service of summons on the defendant
branch of said Law Firm; that his stay in Hong Kong cannot be effected…
is only temporary; and that he frequently travels - as in paragraph (f) of the same provision In case
back to the Philippines. the defendant does not reside and is not found in
ISSUE: IS THE ISSUANCE OF A PRELIMINARY the Philippines (and hence personal and
ATTACHMENT PROPER? IS ALEJANDRO ENTITLED substituted service cannot be effected), the
TO DAMAGES? remedy of the plaintiff in order for the court to
acquire jurisdiction to try the case is to convert
the action into a proceeding in rem or quasi in
rem by attaching the property of the
defendant. Thus, in order to acquire jurisdiction
in actions in personam where defendant resides
out of and is not found in the Philippines, it
becomes a matter of course for the court to
convert the action into a proceeding in rem or
quasi in rem by attaching the defendant’s
property. The service of summons in this case
(which may be by publication coupled with the
sending by registered mail of the copy of the
summons and the court order to the last known
address of the defendant), is no longer for the
purpose of acquiring jurisdiction but for
compliance with the requirements of due
process.
However, where the defendant is a resident who
is temporarily out of the Philippines, attachment
of his/her property in an action in personam, is
not always necessary in order for the court to
acquire jurisdiction to hear the case.
Section 16, Rule 14 of the Rules of Court reads:
Sec. 16. Residents temporarily out of the
Philippines. – When an action is commenced
against a defendant who ordinarily resides within
the Philippines, but who is temporarily out of it,
service may, by leave of court, be also effected
out of the Philippines, as under the preceding
section.
The preceding section referred to in the above
provision is Section 15 which provides for
extraterritorial service – (a) personal service out
of the Philippines, (b) publication coupled with
the sending by registered mail of the copy of the
summons and the court order to the last known
address of the defendant; or (c) in any other
manner which the court may deem sufficient.
Application: It is clear from the foregoing that
even on the allegation that respondent is a
resident temporarily out of the Philippines,
petitioner is still not entitled to a writ of
attachment because the trial court could acquire
jurisdiction over the case by substituted service
instead of attaching the property of the
defendant. The misrepresentation of petitioner
that respondent does not reside in the Philippines
and its omission of his local addresses was thus a
deliberate move to ensure that the application for
the writ will be granted.

57.13. CHINA BANKING - On July 24, 1996, China Bank granted respondent 1. NO, it was not proven that the
CORPORATION V. ASIAN Asian Construction and Development Corporation attached properties though exposed to
CONSTRUCTION AND DEV’T CORP. (ACDC) an Omnibus Credit Line in the amount heat and possible corrosion is
of P90,000,000.00. “perishable”.

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- For the failure of ACDC to comply with their - PERISHABLE: In McCreery, the Supreme Court of
obligation, China Bank filed a Complaint4 for Alabama rejected the argument that the sale of
recovery of sum of money and damages with the attached property was void because the term
prayer for the issuance of writ of preliminary "perishable" property, as used in the statute,
attachment before the Regional Trial Court (RTC) meant only such property as contained in itself
of Makati wherein the writ was granted. the elements of speedy decay, such as fruits, fish,
- Consequently, as shown in the Sheriff’s fresh meats, etc. The Supreme Court of Alabama
Report dated June 14, 1999, the writ of preliminary held that whatever may be the character of the
attachment was implemented levying personal property, if the court is satisfied that, either by
properties of ACDC, i.e., vans, dump trucks, cement reason of its perishable nature, or because of the
mixers, cargo trucks, utility vehicles, machinery, expense of keeping it until the termination of the
equipment and office machines and fixtures. litigation, it will prove, or be likely to prove,
- China Bank filed a Motion for Leave for Grant of fruitless to the creditor, and that the purpose of
Authority to Sell Attached Properties which the CA its original seizure will probably be frustrated, the
denied. sale of the attached property is justified.
Counter-argument: Thus, China Bank argues, that Thus, an attached property may be sold after levy
should the attached properties be allowed to on attachment and before entry of judgment
depreciate, perish or rot while the main case is whenever it shall be made to appear to the court
pending, the attached properties will continue in which the action is pending, upon hearing with
losing their worth thereby rendering the rules on notice to both parties, that the attached property
preliminary attachment nugatory. is perishable or that the interests of all the
parties to the action will be subserved by the sale
ISSUE: of the attached property.
1. W/N THE ATTACHED PROPERTIES CAN BE 2. NO.
SOLD EVEN BEFORE ENTRY OF FINAL Section 4, Rule 57 of the Rules of Court provides:
JUDGMENT? Condition of applicant’s bond. - The party
2. W/N ACDC CAN PROCEED WITH THE applying for the order must thereafter give a bond
ATTACHMENT BOND POSTED BY CHINA executed to the adverse party in the amount fixed
BANK? 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.
57.14. LUZON DEVELOPMENT BANK, -Respondent Erlinda claimed that she is a client of NO.
ET.AL V. KRISHNAN respondent bank wherein she maintained several Section 2, Rule 57 of the Rules of Court explicitly
accounts including time deposits. On several states that "[a]n order of attachment may be
occasions, when respondent Erlinda presented her issued either ex parte or upon motion with notice
Time Deposits Certificates amounting and hearing by the court in which the action is
to P28,597,472.70 for payment because they have pending, or by the Court of Appeals or the
become due, petitioners refused to honor them for Supreme Court, and must require the sheriff of the
the reason that they were fraudulent. court to attach so much of the property in the
- Because of the several occasions of dishonor, on Philippines of the party against whom it is issued,
February 7, 2001, Erlinda filed a complaint for not exempt from execution, as may be sufficient
collection of sum of money and damages against to satisfy the applicant’s demand, unless such
herein petitioners Luzon Development Bank, party makes deposit or gives a bond as
Tomas Clemente, and Oscar Ramirez. She likewise hereinafter provided in an amount equal to that
applied for a Preliminary Writ of Attachment which fixed in the order, which may be the amount
the RTC granted on February 27, 2001. sufficient to satisfy the applicant’s demand or
- Meanwhile, on July 3, 2009, petitioners filed an the value of the property to be attached as
Omnibus Motion praying that a hearing be held to stated by the applicant, exclusive of costs."
determine the sufficiency of the attachment bond - Plainly, in construing said words, it can be safely
and they be allowed to deposit Certificates of Title concluded that Section 5 requires the deposit of
of real property, and the issuance of the writ of money as the word "amount" commonly refers to
attachment be held in abeyance. However, to no or is regularly associated with a sum of money.
avail, their motion was denied.
ISSUE: W/N BANK PROPERTY MAY BE DEPOSITED IN
LIEU OF CASH OR COUNTERBOND?

57. 15. FORT BONIFACIO DEV’T CORP. Tirreno leased the premises of FBDC. Upon default YES.
V. YLLAS LENDING CORPORATION in payments, FBDC occupied the premises and Pursuant to Section 14 of Rule 57, the sheriff is
acquired the equipments of Tirreno as partial not obligated to turn over to respondents the

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payment of the latter’s obligation pursuant to the properties subject of this case in view of
agreement in the lease contract. respondents' failure to file a bond. The bond in
- Tirreno filed an action for forcible entry against Section 14 of Rule 57 (proceedings where
FBDC before the Municipal Trial Court of Taguig. property is claimed by third person) is different
Tirreno also filed a complaint for specific from the bond in Section 3 of the same rule
performance with a prayer for the issuance of a (affidavit and bond). Under Section 14 of Rule 57,
temporary restraining order and/or a writ of the purpose of the bond is to indemnify the sheriff
preliminary injunction against FBDC before the against any claim by the intervenor to the
Regional Trial Court (RTC) of Pasig City. property seized or for damages arising from such
- An obligee of Tirreno, Yllas Lending Corporation, seizure, which the sheriff was making and for
caused the sheriff of Branch 59 of the trial court to which the sheriff was directly responsible to the
serve an alias writ of seizure against FBDC. third party. Section 3, Rule 57, on the other hand,
- Despite FBDC's service upon him of an affidavit of refers to the attachment bond to assure the
title and third party claim, the sheriff proceeded return of defendant's personal property or the
with the seizure of certain items from FBDC's payment of damages to the defendant if the
premises. plaintiff's action to recover possession of the
Counter-argument: FBDC questioned the propriety same property fails, in order to protect the
of the seizure and delivery of the properties to plaintiff's right of possession of said property, or
respondents without an indemnity bond before the prevent the defendant from destroying the same
trial court. FBDC argued that when respondents and during the pendency of the suit.
Tirreno entered into the chattel mortgage Because of the absence of the indemnity bond in
agreement on 9 November 2000, Tirreno no longer the present case, FBDC may also hold the sheriff
owned the mortgaged properties as FBDC already for damages for the taking or keeping of the
enforced its lien on 29 September 2000. properties seized from FBDC.
ISSUE: W/N THE FILING OF AN INDEMNITY BOND
SHOULD HAVE BEEN REQUIRED BY THE TRIAL
COURT?

57.16. PHILIPPINE OVERSEAS Pursuant to EO 1 and 2 (during the time of Pres. NO.
TELECOMMUNICATIONS CORP. Corazon Aquino), the PCGG was ordered to - Sequestration is akin to the provisional remedy
(POTC), PHILCOMSAT V. sequester immediately the POTC and of preliminary attachment, or receivership.
SANDIGANBAYAN, ET. AL. PHILCOMSAT. Similarly, in attachment, the property of the
- On 22 July 1987, the Office of the Solicitor defendant is seized as a security for the
General (OSG), on behalf of the Republic of the satisfaction of any judgment that may be
Philippines, filed a Complaint for Reconveyance, obtained, and not disposed of, or dissipated, or
Reversion, Accounting and Restitution, and lost intentionally or otherwise, pending litigation.
Damages alleging that the wealth that is supposed XXX
to go to the gov’t went into their own individual In sequestration, the same principle holds true.
accounts (Enrile and L.A Africa, involved) The sequestered properties are placed under the
ISSUE: W/N THE CONTINUED SEQUESTRATION IS control of the PCGG, subject to the final
NECESSARY? determination of whether the property was in
truth ill--gotten.
As sequestration is a provisional remedy, a
transitional state of affairs, in order to prevent the
disappearance or dissipation of the property
pending the final disposition of the property, the
ultimate purpose of sequestration is to bring an
intended permanent effect while the PCGG
investigates in pursuit of a judicial proceeding —
to dispose of the sequestered properties. Tersely
put, the ultimate purpose of sequestration is to
recover the sequestered properties in favor of the
government in case they turn out to be ill-gotten.
This function to dispose of the property is
reserved to the Sandiganbayan. Until the
Sandiganbayan determines whether the property
was in truth and in fact “ill-gotten,” the
sequestration shall subsist. In case of a finding
that the sequestered properties are ill-gotten,
the property shall be returned to the lawful
owner, to the people, through the government;
otherwise, the sequestered property shall be
returned to the previous owner.
On a final note, while sequestration is the means
to revert the amassed ill-gotten wealth back to
the coffers of our government, we must still
safeguard the protection of property rights from
overzealousness. Sequestration as statutorily
and constitutionally recognized is not
permanent. It must be lifted when the law and
proven facts warrant, or when the purpose has
been accomplished.

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