of LBC.
Neither did Calderon prove his sworn charges
[ R U L E 5 7 ] S EC T I O N 2 0
JOSE D. CALDERON vs.IAC, GEORGE SCHULZE JR., ANTONIO C.
AMOR, MANUEL A. MOZO and VICTOR M. NALUZ.
Calderon purchased from the private respondents the following: LBC
and its (5) affiliate companies, namely, Luzon Air Freight, Inc., Luzon
Port Terminals Services, Inc., Luzon Warehousing Corporation, GS
Industrial Mgt Corp, and GS Luzon Trucking Corp.
The Bureau of Customs suspended the operations of LBC for failure to
pay the amount of P1,475,840.00 representing customs taxes and
duties incurred prior to the execution of the sale. In order to lift the
suspension Calderon paid the sum of P606,430.00.
Calderon filed a complaint against private respondents to recover
said amount of P1,475,840.00, with damages by reason of breach of
warranty. He also prayed for a preliminary attachment, alleging: that
Schulze et. al. had deliberately and willfully concealed from his
knowledge such staggering liability of the LBC for the purpose of
misleading him into buying the six aforesaid companies; and that
Schulze is about to depart from the Philippines in order to defraud his
creditors. Calderon posted a surety bond of P1,475,840.00.
The trial court issued a writ of preliminary attachment, whereupon
properties of the private respondents were attached and their bank
deposits were garnished.
Calderon filed an amended complaint, alleging that while the
liabilities of LBC are reflected in its books, the amount was
fraudulently withdrawn and misappropriated by Schulze.
Schulze claimed: that the amount of P1,475,840.00 due to the Bureau
of Customs represents the duties and taxes payable out of the
advanced payments made by LBC's client, PRC, after Calderon himself
had taken control of the management of LBC; that these deposit
payments were properly recorded in the books of the corporation and
existing as part of the corporate funds; that Schulze fully disclose and
explained to Calderon that these customer's advanced deposit
payments (including those of the PRC) are to be paid to the Bureau of
Customs when their corresponding customs taxes and duties become
due; that during this phase of the negotiation, Calderon and his
representatives inspected and studied the corporate books and
records at will and learned the daily operations and management of
LBC; that the petitioner did not pay out of his own pocket but out of
the LBC funds the said amount of P606,430,30 demanded by the
Bureau of Customs, as evidenced by a manager's check No. FEBTC
25092 and another facility negotiated with the Insular Bank of Asia
and America; and that Schulze et al are setting up a counterclaim for
actual, moral and exemplary damages as well as attorney's fees, as a
consequence of the filing of the baseless suit and the wrongful and
malicious attachment of their properties.
Schulze et al filed a counterbond.
The trial court issued an order directing the sheriff to return all real
and personal properties already levied upon and to lift the notices of
garnishment issued in connection with the said attachment. It
dismissed the complaint, holding Calderon and his surety First
integrated Bonding and Insurance Co., Inc., jointly and severally liable
to pay the damages.
ISSUE
Whether the writ of preliminary attachment was maliciously and
wrongfully sued out. YES
RULING
a) Calderon failed to produce any evidence in support of his
sworn charge that Schulze willfully concealed the liabilities
that Schulze had maliciously and fraudulently
withdrawn and misappropriated the amount of
Pl,475,840.00 and that defendants had fraudulently
concealed and withheld from him this alleged liability of
LBC in breach of the contract-warranty; that said
corporation had no obligations or liabilities except those
appearing in the books and records. Indeed, Calderon never
appeared in the trial court to substantiate the charges in his
verified complaints and in his affidavit to support his
petition for the issuance of a writ of attachment.
THE LIABILITY ON THE ATTACHMENT BOND IS LIMITED TO ACTUAL
DAMAGES, MORAL AND EXEMPLARY DAMAGES may be recovered
where the attachment was alleged to be maliciously sued out and
established to be so.
In the instant case, the issues of wrongful and malicious suing out of
the writ of preliminary attachment were joined not only in private
respondents' motion to discharge the attachment but also in their
answer to the amended complaint. The trial court observed that the
books and records of LBC disclose that the liabilities of the said
corporation in the total amount of P4,574,498.32 appear under the
heading "Customs Deposit" and this amount includes the deposit of
Philippine Refining Co., Inc. in the sum of P1,475,840.00. On the other
hand, plaintiff never appeared in court, and failed to produce any
evidence to substantiate his charges.
Petitioner surety contends that the dissolution of the attachment
extinguishes its obligation under the bond, for the basis of its liability,
which is wrongful attachment, no longer exists, the attachment bond
having been rendered void and ineffective, by virtue of Section 12,
Rule 57 of the Rules of Court.
While Section 12, Rule 57 of the Rules of Court provides that upon the
filing of a counterbond, the attachment is discharged or dissolved,
nowhere is it provided that the attachment bond is rendered void and
ineffective upon the filing of counterbond.
THE LIABILITY OF THE ATTACHMENT BOND IS CLEAR FROM
SECTION 4, RULE 57 that the responsibility of the surety arises "if the
court shall finally adjudge that the plaintiff was not entitled
thereto." In Rocco vs. Meads, we held that 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. It is, therefore, evident that upon the dismissal of an
attachment wrongfully issued, the surety is liable for damages as a
direct result of said attachment.
Equally untenable is the Surety's contention that by filing a
counterbond, private respondents waived any defect or flaw in the
issuance of the attachment writ, for they could have sought, without
need of filing any counterbond, the discharge of the attachment if the
same was improperly or irregularly issued, as provided in Section 13,
Rule 57 of the Rules of Court.
Whether the attachment was discharged by either of the two (2) ways
indicated in the law, i.e., by filing a counterbond or by showing that
the order of attachment was improperly or irregularly issued, the
liability of the surety on the attachment bond subsists because the
final reckoning is when "the Court shall finally adjudge that the
attaching creditor was not entitled" to the issuance of the attachment
writ in the first place.
Moreover, the filing of a counterbond is a speedier way of discharging
the attachment writ maliciously sought out by the attaching creditor
instead of the other way, which, in most instances like in the present
case, would require presentation of evidence in a full-blown trial on
6 3 8 | 13
the merits and cannot easily be settled in a pending incident of the
case.
The damages awarded by the IAC are rather excessive. They must be
reduced. Both petitioner Calderon and petitioner First Integrated
Bonding and Insurance Company, Inc. are hereby ordered to give
jointly and severally.
PIONEER INSURANCE & SURETY CORP. AND HADJI
LUCMAN vs. THE HON. AGAPITO HONTANOSAS AND
SPOUSES BEN UY RODRIGUEZ
Allied Overseas Commercial Co., Ltd., a foreign corporation domiciled
in Hongkong, filed a complaint against the Ben Uy Rodriguez for the
collection of a sum of money arising out of a transaction between
them in the amount of P450,533.00, the agreed peso equivalent of the
HK$418,279.60 balance unpaid. It prayed for the issuance of a writ of
preliminary attachment which was granted by the Court against
Rodriguez upon the filing by said plaintiff of a bond in the amount of
P450,000.00, which Pioneer Insurance & Surety Corp. duly posted. The
corresponding levy in attachment was made by annotation on the
properties of Rodriguez which consisted of 4 pieces of lots; notices of
garnishment on different Cebu banks turned out negative, while
personal properties found at the Rodriguez residence, although
attached, were, however, not removed therefrom.
A motion to dismiss the complaint was filed by Rodriguez, followed
by an application for damages against the bond, praying that he be
permitted to present evidence of damages he sustained by reason of
the wrongful attachment, and to enforce said claim against the surety
on its bond, alleging further that otherwise his claim against the bond
will forever be barred as said claim cannot be the subject of an
independent civil action under Sec. 20, Rule 57 of the Rules of Court.
The court dismissed the complaint on the ground of improper venue
since Rodriguez was a resident of Cebu, and lifted the writ of
preliminary attachment, setting the hearing on the claim for damages
against the bond.
Rodriguez withdrew his claim for damages against Pioneer Insurance
and Surety Corp., which was granted. Thereafter, Rodriguez spouses
filed a complaint for damages against Pioneer Insurance & Surety
Corp. and Allied Overseas (the Hongkong-based corporation). They
prayed that Rodriguez be declared as not in any manner indebted to
the Allied Overseas and that Pioneer be held liable for damages,
attorney's fees and expenses of litigation by reason of the wrongful
and malicious attachment issued by the Manila Court.
An amended complaint was submitted to and admitted by the Court
by impleading Hadji Esmayaten Lucman as additional defendant,
making allegations tending to show confabulation between Lucman
and the foreign-based corporation to collect a non-existent debt.
Hon. Hontanosas (CFI CEBU) declared that Rodriguez is not in any
manner indebted to Lucman or to Allied; that the personal check of
Rodriguez is a forgery; that the attachment of the properties of
plaintiff in the Manila case was wrongful and malicious, and ordering
Pioneer Insurance to pay P350k as moral damages, P50k as exemplary
damages and P50k for expenses of litigation in Manila. Lucman was
also ordered to pay Rodriguez damages.
Pioneer et al assail the jurisdiction of the CFI of Cebu in a civil case
filed by the Rodriguez spouses, seeking damages for the alleged
malicious and unlawful issuance of the writ of preliminary
attachment against the latter's properties granted by the CFI of Manila
upon the posting of a security bond in the amount of P450K given by
the Pioneer Insurance & Surety Corp. They contend that under Sec. 20,
Rule 57, the claim for damages against a bond in an alleged wrongful
attachment can only be prosecuted in the same court where the
bond was filed and the attachment issued.
Spouses Rodriguez argued that the above rule is not applicable, citing
Moran,"the rule that a claim for damages arising from the issuance of
a writ of attachment, injunction, receivership and replevin should be
presented in the same action is not applicable where the principal
case has been dismissed for lack of jurisdiction and no claim for
damages could therefore have been presented in said case ."
ISSUE
Whether Section 20 of Rule 57 is applicable. YES
RULING
THE CLAIM FOR DAMAGES AGAINST A BOND IN AN ALLEGED
WRONGFUL ATTACHMENT CAN ONLY BE PROSECUTED IN THE
SAME COURT WHERE THE BOND WAS FILED AND THE
ATTACHMENT ISSUED. No claim for damages against the surety bond
in support of a preliminary attachment was ever presented or filed .
Rodriguez filed an Application for Damages Against Bond dated
December 3, 1970. The CFI of Manila, after dismissing the complaint
and lifting the writ of preliminary attachment, ordered that the
hearing of the application for damages against the bond be set aside.
RODRIGUEZ WAIVED THE LACK OF JURISDICTION. Rodriguez sought
that judgment be rendered against the surety for such amount of
damages as may be proved or established by him, and was granted by
the court the opportunity to prove damages against the bond of the
surety company. He even cited the very provision of the Revised Rules
of Court, Rule 57, Sec. 20 to justify his application, and the cases
supporting his application, for otherwise his claim will forever be
barred. In effect, Rodriguez waived the lack of jurisdiction on his
person, by seeking an affirmative relief from the court, which he
cannot now complain before this Court.
"Objections to lack of jurisdiction of the person, and other
objections to jurisdiction not based on the contention that
there is an absolute want of jurisdiction of the subject
matter, are waived by invoking the court's jurisdiction, as by
a counterclaim, consent, or voluntary submission, to
jurisdiction, or conduct amounting to a general appearance.
In Soriano v. Palacio , even if jurisdiction was not originally acquired
by the Court over the defendant due to allegedly defective services of
summons, still when the latter filed a motion for reconsideration of
the judgment by default, he is considered to have submitted to said
court's jurisdiction.
Thus, CA erred in not dismissing the complaint with respect to the
Pioneer Insurance & Surety Corp., over which the Judge had not
acquired jurisdiction pursuant to Sec. 20, Rule 57.
STRONGHOLD INSURANCE CO. INC. vs. HON. COURT OF
APPEALS, HON. CLEMENTE M. SORIANO, Sheriff JAIME K.
DEL ROSARIO, and JOSE OROSA
FCP Credit Corporation prayed that a writ of replevin be issued against
Jose Orosa ordering the seizure of the motor vehicle covered by a
chattel mortgage executed in favor of said plaintiff. Upon the filing of
an affidavit of merit and a replevin bond put up by Stronghold
Insurance Co., Inc. in the amount of P210K a writ of replevin was
issued by the court a quo.
The trial court declared that FCP was not entitled to the Writ of
Replevin and is now liable to Orosa for actual damages under the
Replevin bond it filed. The plaintiff was also ordered to return the
6 3 8 | 14
subject 1983 Ford Laser Sedan or its equivalent, in kind or value, in
cash as of this date and to pay the costs
Orosa filed a motion for execution of the judgment pending appeal ,
alleging that the judgment may be rendered ineffective because FCP
Credit Corporation was already liquidating its business affairs. He
expressed his willingness to file a bond for such purpose.
Stronghold opposed said motion on the following grounds:
1. It was adjudged liable in the decision without the benefit of
hearing in violation of Rule 57, Section 20 in relation to
Section 10, Rule 60, Rules of Court;
2. It was not a party to the proceedings, judgment against it
could not be rendered without violating the elementary
rules of procedure;
Orosa filed an application for judgment on the bond. Stronghold
oppoed contending that the appeal had been perfected hence the trial
court had already lost jurisdiction to hear therein defendant's motion;
that the application for damages does not set forth the facts showing
his right thereto and the amount thereof; and that the motion is fatally
defective for lack of the requisite three (3) days notice.
The trial court ordered the issuance of a writ of execution pending
appeal upon respondent Orosa's filing of a bond in the amount of
P500k, reason that (1) "defendant is willing to file a required bond to
answer for damages in the case of reversal of the judgment" and (2)
"the plaintiff is in imminent danger of insolvency or dissolution."
It also ordered Stronghold jointly and severally with the FCP, to return
the Sedan involved…and to pay him the damages specified in the
decision, to the extent of the value of the replevin bond (P210K).
Deputy Sheriff Jaime Del Rosario levied upon the properties of
Stronghold and garnished its funds with FEB and UCPB.
The trial court directed the enforcement of the writ of execution
pending appeal against FCP and Stronghold. Stronghold moved for
the reconsideration of said order and in the hearing of said motion, its
counsel adduced additional arguments in support thereof.
The application for a writ of injunction referred to by Stronghold was
granted by CA. Nevertheless, the same writ was lifted and set aside.
ISSUE
Whether the claim for damages against the bond is proper. YES.
Whether the grant of the writ of execution pending appeal against
FCP and Stronghold is proper. NO
RULING
The rule is clear that where the judgment in an action is in favor of
the party against whom the writ of replevin was issued, he may
recover damages resulting therefrom and the replevin bond required
under Section 2, Rule 60 of the Rules of Court may be held to answer
for this purpose. The procedure to hold the surety liable upon the
replevin bond is provided for under Section 10 of the same rule in
relation to Section 20 of Rule 57. Compliance with the following
requisites is essential:
(1) the filing of an application therefor with the Court having
jurisdiction of the action;
(2) the presentation thereof before the judgment becomes
executory (or before the trial or before appeal is perfected);
(3) the statement in said application of the facts showing the
applicant's right to damages and the amount thereof;
(4) the giving of due notice of the application to the attaching
creditor and his surety or sureties and
(5) the holding of a proper hearing at which the attaching
creditor and sureties may be heard on the application.
These requisites apply not only in cases of seizure or delivery
under Rule 60, but also in cases of preliminary injunctions under
Rule 58, and receiverships under Rule 59.
THE APPLICATION MUST BE FILED IN THE SAME COURT. To avoid
multiplicity of suits, all incidents arising from the same controversy
must be settled in the same court having jurisdiction of the main
action. Thus, the application for damages must be filed in the court
which took cognizance of the case, with due notice to the other
parties.
The timeliness of the application for judgment on the bond in this
case, as well as the motion for immediate execution, is apparent
because it was filed before the appeal was perfected. The fact that one
of the parties had filed a notice of appeal does not perfect such appeal.
An appeal is perfected upon the lapse of the last day for all parties to
appeal.
It should also be noted that the filing of the application for judgment
on the bond by Orosa was in the nature of a motion for
reconsideration under Section 1 (c), Rule 37 of the Rules of Court,
which consequently had the effect of interrupting the period to
appeal. This being so, the order holding in abeyance plaintiff's notice
of appeal was not even necessary and was an apparent superfluity.
Stronghold claims that there was failure to hold a proper hearing.
SUMMARY HEARING. Such requirement has been held to mean that
"the hearing will be summary and will be limited to such new
defenses, not previously set up by the principal, as the surety may
allege and offer to prove. The oral proof of damages already adduced
by the claimant may be reproduced without the necessity of retaking
the testimony, but the surety should be given an opportunity to cross-
examine the witness or witnesses if he so desires."
In the present case, Stronghold did not allege and offer to prove any
new defense not previously set up by the principal. Furthermore, the
grounds relied upon in its opposition to the application requires no
hearing for their proper consideration by the court a quo, aside from
the fact that the trial court adequately and particularly resolved them.
If Stronghold really had additional defenses, it should have asked for
the opportunity to present the same when the motion to dismiss the
application for judgment on the bond was denied. This is also true
with respect to the cross-examination of the witnesses which is now
belatedly asked for. While there was no one to cross-examine during
the hearing of the application for judgment on the bond because of
Orosa's absence. Stronghold could have invoked and insisted on such
right. Further, even if Orosa had appeared during the hearing, it could
reasonably be expected that no witnesses would be presented since
the application for judgment on the bond relied mainly on the same
grounds that were already presented in court and were subject of the
trial on the merits, or were at least already of record.
The application for judgment on the bond was in the nature of a
motion for reconsideration , hence the resolution thereof constitutes
a final and appealable order. Appeal being the proper and then
available remedy, the original action for certiorari does not lie and
cannot substitute for the remedy of appeal that was thereafter lost.
THE EXECUTION PENDING APPEAL WAS NOT PROPER.The mere
filing of a bond does not warrant execution pending appeal. To
consider the mere filing of a bond a good reason would precisely make
immediate execution of a judgment pending appeal routinary, the rule
rather than the exception.
The alleged imminent danger of insolvency of plaintiff FCP Credit
Corporation does not also constitute a good reason for immediate
execution. Where there are two or more parties who are held to be
solidarily or subsidiarily liable for the judgment account, the
insolvency of one will not justify immediate execution where the
others are capable of paying the obligation. The obligation of FCP and
6 3 8 | 15
Stronghold is in solidum. Their agreement states that the principal
and the surety therein jointly and severally bound themselves "in the
sum of P210kfor the prosecution of the action, for the return of the
property to defendant, if the return thereof be adjudged, and for the
payment . . . of such sum as may in the cause be recovered against the
plaintiff, and costs of the action."
THE HEIRS OF THE LATE SANTIAGO MANINGO vs. IAC,
NEVILLE V. LAMIS ENTERPRISES and NEVILLE V. LAMIS
Neville Lamis Enterprises through its proprietor Neville Lamis, filed a
complaint for specific performance with damages against Santiago
Maningo to enforce a Memorandum Agreement entered into by them.
During the pendency of the case, Maningo instituted a complaint
against Lamis for collection of a sum of money with preliminary
attachment before the RTC-Tagum. The court issued a writ of
preliminary attachment upon a bond of P100,000.00 issued by
Paramount Insurance Corporation. Deputy Provincial Sheriff levied
upon certain personal properties of Lamis.
Lamis filed an ex-parte manifestation with the Provincial Sheriff for
the suspension of the levy on the ground that Civil Case No. 1395 was
merely a duplicity of Civil Case No. 35199 which was pending in the
CFI of Pasig. Lamis further moved for the dismissal of Civil Case No.
1395 based on lis pendens and for improper venue. (Denied)
Lamis went on certiorari which was granted and ordered the
dismissal of Civil Case No. 1395.
Lamis filed an urgent ex-parte motion in Civil Case No. 1395 for the
confiscation of Maningo's attachment bond.
The lower court issued an order setting for hearing the issue of
damages. At the said hearing for the reception of evidence on
damages suffered by Lamis, both the surety, Paramount Insurance
Corp. and Maningo objected to the hearing.
Maningo filed a petition for certiorari and prohibition alleging the
following: That Lamis failed to comply with Section 20, Rule 57, which
provides that the application for damages must be made before entry
of judgment in the subject case ; that Lamis filed his application for
damages only after final judgment; that Lamis' claim for damages
could not by law, exceed the attachment bond; and that in G.R. No.
57250, Lamis is not entitled to the possession of the tractor unit, which
is one of properties attached. The petition was dismisse..
Lamis filed a motion for the execution of this Court's resolution and a
motion in Civil Case No. 1395 to be allowed to present evidence for the
confiscation of Maningo's attachment bond and for damages.
Santiago Maningo died intestate and his counsel moved for the
dismissal of Case No. 1395 on the ground that the heirs are no longer
interested in the prosecution of the case (denied).
The court issued an order requiring the sheriffs to take into custody
in favor of Lamis all attached properties still unreleased by Maningo.
The lower court issued two orders: 1) an order requiring the surety to
pay Lamis the sum of P100,000.00 as the total claim for damages by
reason of the unlawful attachment; and 2) another order for the
issuance of a writ of execution against the surety.
AC-G.R. No. 04480
Maningo filed with the RTC of Tagum a complaint for Foreclosure of
Chattel Mortgage, interest, damages and attorney's fees with prayer
for attachment against Neville Lamis Enterprises, Neville Lamis and
others. The complaint was later amended to Replevin, damages and
attorney's fees.
The court issued an order for the seizure of a bulldozer, upon a
replevin bond of P340,000 by Paramount Insurance Corporation.
Lamis moved for the dismissal of Civil Case No. 147 and to
cite Maningo for contempt on the ground of multiplicity of suits; that
the said case is barred by the pendency of his Civil Case No. 35199 then
pending with RTC of Pasig and also by the prior judgment in G.R. No.
57250 dismissing Civil Case No. 1395 filed by Maningo. SC ordered the
dismissal of Civil Case No. 147.
Lamis filed a motion in Civil Case No. 147 for the reception of evidence
on the damages he sustained by reason of the issuance of the writ of
replevin (granted). The lower court required the Estate of Maningo to
pay to Lamis, compensatory damages by reason of the unlawful
issuance of replevin.
SP-04377
RTC in Civil Case No. 147 awarded Lamis, et al. the amount of
P7,677,177.00 as compensatory damages by reason of the issuance of
the writ of replevin. Writs of execution were issued by the court and
the cash deposits of Santiago Maningo, now deceased, with the PNB,
and BPI were ordered garnished.
Lamis filed an ex-parte application in SpePro No. 248, for the release
of Maningo estate's garnished deposits which was granted, and an
order was issued directing the banks concerned to release to the
sheriff the cash deposits of Maningo.
Prior to the issuance of the above-stated order, however, the court had
authorized the Special Administratrix of Maningo's estate to
withdraw in cash from PNB the amounts of P654,963.03 and
P90,829.45 (this was set aside).
ISSUE
Whether Lamis is entitled to damages. NO
RULING
Section 10 of Rule 60 of the Rules of Court provides that in the
recovery of damages against the bond posted by the applicant in
replevin cases, the procedure shall follow that what is laid down
in Section 20 of Rule 57.
As may be gathered from Section 20, Rule 57, the claim for damages
resulting from wrongful seizure of personal property must be filed in
the same action in which the writ of attachment or the writ of replevin
was issued; otherwise, it is barred. It may be presented, before trial in
the answer by way of counterclaim. In the discretion of the court, it
may also be made at any other time even after the rendition of final
judgment if the court has still jurisdiction over the case.
If the application for damages is not made in compliance with the
procedure laid down in the rules, even the surety on the bond is
relieved from liability therefor. The remedy provided by law is
exclusive and by failing to file a motion for the determination of the
damages on time and while the judgment is still under the control of
the court, the claimant loses his right to damages.
NO TIMELY FILING OF CLAIM FOR DAMAGES BY LAMIS. In the case
at bar, there is no showing that Lamis had timely filed his claim for
damages arising from the wrongful issuance of the writ of replevin in
Civil Case No. 147, or prior to the dismissal on December 15, 1982, of
the replevin case, upon Lamis' petition for certiorari. It was only years
later on June 11, 1984 that Lamis applied for damages on the replevin
bond, after the case had long been dismissed. The trial court no longer
had jurisdiction and control over the case when it awarded damages
after it was dismissed and thrown out of court in the certiorari case
filed by Lamis himself. Thus, the judgment of the trial court awarding
damages against the estate of Maningo in the replevin case is null and
void.
6 3 8 | 16
PARAMOUNT INSURANCE CORP SHOULD BE RELEASED FROM ITS
LIABILITY UNDER THE BOND. Notwithstanding, the dismissal of the
petition seeking review on certiorari of the same decision of the
appellate court on July 2, 1986, upholding the award of damages to
Lamis, SC released said surety from liability based on the same
principles We have pronounced in the foregoing discussion.
OFRECINO T. SANTOS vs. THE COURT OF APPEALS ET AL.
Ofrecino T. Santos filed in the Court of First Instance of Cotabato an
action for the recovery of the sum of P1,628 against Teodulo M. Cruz
and Valentin C. Garcia. Santos secured a writ of preliminary
attachment which was levied upon a tractor which was believed to
belong to Cruz and Garcia. However, it was owned by the Philippine
Reconstruction Corporation Inc. which in due time filed a third party
claim.
Santos filed an amended complaint including PRCI as a defendant,
but upon motion filed by Teodulo M. Cruz and Valentin C. Garcia, Civil
Case No. 241 was dismissed for lack of jurisdiction, the amount
involved being less than P2,000. Santos filed a similar action in the
Justice of the Peace Court of Buayan, Cotabato, against the
respondent as sole defendant, wherein the Santos was awarded the
sum of P1,638.10, with interest and costs, but this decision is still the
subject matter of a pending certiorari proceeding in the Court of First
Instance of Cotabato instituted by PRCI.
PRCI filed in the Court of First Instance of Manila Civil Case No. 13778
against Santos, for damages resulting from the levy of its tractor; that
due to the said wrongful and malicious attachment and their
subsequent refusal to release the same from attachment as above
stated plaintiff was consequently forced to violate its contractual
undertaking with a certain Mr. Tomas Gonzales as stated in the sworn
third party claim so that it was compelled to pay a liquidated damages
in the sum of P3,000 aside from having lost a sure income from rent
on said tractor in the sum of P1,500.
The case was set for hearing on February 28th, and on the following
day decision was rendered in favor of the PRCI, ordering Santos to pay
the sum of P4,500 with legal rate of interest from the date of the filing
of the complaint and to further pay the sum of P1k as attorney's fees
and costs of the suit.
Santos moved for the reconsideration of the decision (denied).
Santos alleged that the CFI of Manila acted without jurisdiction, the
cause of action in Civil Case No. 13778 having arisen from a supposed
wrongful attachment ordered by the Court of First Instance of
Cotabato in Civil Case No. 241, and for that reason, that the latter court
has exclusive jurisdiction to determine whether its legal processes
are wrongful or not; and even granting that the Court of First Instance
of Manila had proper jurisdiction, the particular cause of action in said
Civil Case No. 13778 is banned by the decision of the Justice of the
Peace Court of Buayan, Cotabato."
ISSUE
Whether the Court of First Instance of Manila may take cognizance of
the action for damages filed by PRCI against Santos. YES
RULING
On the issue of jurisdiction, it is to be recalled that, when PRCI's tractor
was levied upon, it was not a party in Civil Case No. 241, and although
an amended complaint was filed, no new writ of attachment was
issued so as to cover PRCI's properties. It is also significant that Civil
Case No. 241 was dismissed by the Court of First Instance of Cotabato
for lack of jurisdiction.
The CFI of Manila correctly took cognizance of Civil Case No. 13778,
because the PRCI sought damages, not on the allegation that the writ
of attachment was illegally or wrongfully issued by the Court of
First Instance of Cotabato in Civil Case No. 241, but on theory that
said writ was caused by Santos to be levied upon the tractor of the
respondent which was not a party defendant. The filing of the
amended complaint did not cure the defect, since the seizure
continued to be in virtue of the original writ, none having been issued
under the amended complaint.
Santos is invoking the following pronouncement in our decision in
Cruz vs. Manila Surety & Fidelity Co., Inc., et al.:
"The procedure for recovery of damages on account of the issuance
of a writ of attachment, injunction, receivership, and replevin
proceedings, as interpreted in the cases adverted to, requires that the
claim for damages should be presented in the same action which
gave rise to the special proceeding in order that it may be included
in the final judgment of the case, and it cannot be the subject of a
separate action. The philosophy of the ruling seems to be that the
court that had acted on the special proceeding which occasioned the
damages has the exclusive jurisdiction to assess them because of its
control of the case. This ruling is sound and tends to avoid
multiplicity of action."
The citation is not controlling because apart from the circumstance
that the PRCI has never claimed that the writ of attachment was
wrongfully issued in Civil Case No. 241, it appears that the latter case
was dismissed for lack of jurisdiction, and no claim for damages could
therefore properly have been presented in said case, because the
Court of First Instance of Cotabato, thus lacking jurisdiction, was in
fact prevented from rendering any final judgment therein which
could include such damages. Avoidance of multiplicity of suite
presupposes the competence of the court in the first or earlier case.
ZACARIAS C. AQUINO vs. FRANCISCO SOCORRO and CA
CA, upon petition of Francisco Socorro in CA-G.R. 33560-R, issued a
writ of preliminary injunction in his favor upon his posting a P1,000
bond. The writ of preliminary injunction, among others, restrained
Zacarias Aquino "from entering, cutting, hauling, selling and/or
exporting logs or other forest products from the forest area" subject of
litigation. Aquino, however, filed a counterbond in the amount of
P2,000, effecting the immediate dissolution of the writ.
CA dismissed Socorro's petition re the main action, for lack of
jurisdiction to entertain the same. Socorro subsequently appealed the
decision of the appellate court to this Court. The latter affirmed CA’s
decision.
Before the appellate court's decision dismissing Socorro's petition
became final, Aquino filed with the appellate court his claim for
damages in the amount of P199,000 on account of the wrongful
issuance of the writ of preliminary injunction.
The appellate court denied Aquino's claim, for want of bad faith and
malice on the part of Socorro in filing his petition and securing the
issuance of the writ of preliminary injunction.
Aquino points out that Section 9, Rule 58 in relation to Section 20, Rule
57, of the Rules of Court do not require a claimant who seeks to recover
damages on account of the wrongful issuance of a writ of preliminary
injunction, to prove bad faith and malice on the part of the party who
obtained the issuance of the writ. To reinforce his contention, he
invokes the provisions of Section 4(b) of Rule 58 of the Rules of Court.
This rule, Aquino avers, makes the party applying for an injunction
liable for all damages sustained by the other party if the court finally
decides the party applicant as not entitled thereto. He maintains that,
in the case at bar, the dissolution of the writ of preliminary injunction
by the respondent appellate court clearly demonstrates that the
respondent Socorro was not entitled thereto.
6 3 8 | 17
Socorro, on the other hand, prays for the dismissal of the present
petition on the following grounds: (1) The petitioner "refused to
prosecute his claim for damages in the main action then already on
appeal to this Court;" (2) The petitioner "failed to state in his motion
claiming for damages the facts upon which his rights thereto are
based;" (3) The petitioner, if "suing on the bond . . . has no more cause
of action as the said bond had already been dissolved upon motion by
the petitioner Aquino;" and (4) The petitioner, if "suing beyond the
bond failed to show, or there is no showing that Socorro," in securing
the issuance of the writ of preliminary injunction, "was motivated by
malice or bad faith."
ISSUE
Whether the denial of Aquino’s claim for damages was proper. YES
RULING
Pacis vs COMELEC: "Damages sustained as a result of a wrongfully
obtained injunction may be recovered upon the injunction bond
required to be filed with the court." The same provisions permitting
the issuance of the writ of preliminary injunction require the filing of
a bond before the grant of the writ. "The statutory undertaking of the
bond is that it shall answer for all damages which the party to be
restrained may sustain by reason of the injunction if the court should
finally decide that the plaintiff was not entitled thereto. Malice or lack
of good faith is not an element of recovery on the bond. This must be
so, because to require malice as a prerequisite would make the filing
of the bond a useless formality."
This Court said that "the dissolution of the injunction, even if the
injunction was obtained in good faith, amounts to a determination
that the injunction was wrongfully obtained and a right of action on
the injunction bond immediately accrues." Thus, for the purpose of
recovery upon the injunction bond, "the dissolution of the injunction
because of the failure of petitioner's main cause of action" provides
the "actionable wrong" for the purpose of recovery upon the bond.
This Court also stressed that "there is nothing in the Rules of Court
which allows recovery of damages other than upon the bond pledged
by the party suing for an injunction. Section 9, Rule 58, limits recovery
only upon the bond, and it specifically states that xxx 'the amount of
damages to be awarded to the plaintiff, or to the defendant, as the case
may be, upon the bond of the other party, shall be claimed,
ascertained, and awarded under the same procedure as prescribed in
Section 20 of Rule 57.'" Under this provision, the party restrained, if he
can recover anything, can recover only by reason of and upon the
bond — the only security and protection conceded to him by the rules.
Consequently, the rule limits the amount of recovery in a suit on an
injunction bond to the sum thus fixed, the amount measuring the
extent of the assumed liability.
Molina vs. Somes:"An action for damages for the improper suing out
of an injunction must be maintained upon the same principles which
govern an action for the wrongful bringing of an action."
This rule, however, applies only when the party restrained pursues his
claim for damages not upon the injunction bond. In such a case where
the party restrained sues not on the injunction bond, the rules accord
him no relief by way of a claim for damages unless he can establish
that the party applicant secured the issuance of the writ maliciously
and without probable cause. This Court stated that "when the process
has been sued out maliciously there may be a right of action in favor
of the defendant. But this right depends upon the law governing
malicious prosecutions, and has no relation to the claim for damages
urged by the defendant in this case.”
Palmer vs. Foley: "It seems that, without some security given before
the granting of an injunction order, or without some order of the court
or a judge, requiring some act on the part of the plaintiff, which is
equivalent to the giving of security — such as a deposit of money in
court — the defendant has no remedy for any damages which he may
sustain from the issuing of the injunction, unless the conduct of
the plaintiff has been such as to give ground for an action for
malicious prosecution.
In the case at bar, Aquino, in the proceedings before the respondent
appellate court, filed a counterbond in the amount of P2,000 and
opposed the injunction bond filed by the Socorro on the ground of its
insufficiency. In effect, these brought about the immediate
dissolution of the writ of preliminary injunction.
Thus, Aquino pursues his claim for damages in the amount of
P199,000 no longer upon the injunction bond in the amount of P1,000
filed by Socorro with the respondent appellate court.
Applicable here is the holding in Molina vs. Somes, supra, that an
application for damages on account of the improvident issuance of a
preliminary injunction writ must be governed by the same principles
applicable to an action for the wrongful bringing of an action.
ABSENCE OF MALICIOUS PROSECUTION AND LACK OF PROBABLE
CAUSE. Before the respondent's liability can attach, it must appear
that he filed his petition for certiorari re the main action and obtained
the issuance of the writ of preliminary injunction maliciously and
without probable cause. These two essential requisites, malicious
prosecution and lack of probable cause, are neither alleged nor proved
in this case before us. Nothing in the record tends to establish the
liability of the Socorro.
HANIL DEVELOPMENT CO. LTD. vs. IAC and M. R.
ESCOBAR EXPLOSIVES ENGINEERS INC.
A complaint for recovery of a sum of money with damages was filed
by Escobar Explosives Engineers, Inc., against Hanil Development Co.,
Ltd.. Hanil is a foreign corporation organized under the laws of the
Republic of Korea and doing business in the Philippines. The
complaint docketed as Civil Case No. 35966 sought to compel Hanil to
pay for the blasting services rendered by the EEEI in connection with
the former's contract with the Ministry of Public Highways to
construct the 200 Km. Oro - Butuan Road Project in Mindanao.
The trial court rendered a decision in favor of EEEI. Hanil was ordered
to pay the sum of P1,341,727.40 corresponding to the value of the rocks
blasted by EEEI…
EEEI filed a petition for the issuance of a preliminary attachment
(granted). The motion was set for hearing. It filed its notice of appeal
and cash appeal bond with the trial court.
EEEI moved for the appointment of Deputy Sheriff Felix Honoracion
as special sheriff to serve the writ of attachment/garnishment.
Consequently, the writ of attachment was enforced and the bank
accounts of the Hanil were garnished and its equipment attached.
Hanil then filed a motion for reconsideration.
While this motion was pending, EEEI filed an 'Ex-Parte Motion to
Deposit Cash" praying that an order be issued directing the Finance
Manager of NAPOCOR to withdraw available funds of the Hanil from
the NAPOCOR and deposit them with the clerk of court of the Court of
First Instance of Rizal. This motion was granted.
Hanil filed with IAC a petition for certiorari with prayer for prohibition,
injunction and preliminary restraining order. The appellate court
temporarily restrained the enforcement of the challenged orders and
after a hearing issued a preliminary injunction enjoining the
implementation of said orders upon the filing of a P50,000.00 cash
bond by the Hanil.
The appellate court granted the petition and declared the challenged
orders null and void, having been issued with grave abuse of
discretion.
6 3 8 | 18
While the above-mentioned petition was pending before the appellate
court and despite the writ of injunction issued by it, other
developments continued to unfold in the trial court. The trial court
disapproved the petitioner's amended record on appeal on the ground
that it was "filed beyond the reglementary period and the extension
granted." The appeal was dismissed. The petitioner filed a motion for
reconsideration of the dismissal while the private respondent filed a
motion for execution of judgment.
The trial court issued an order denying the Hanil's motion for
reconsideration and at the same time granting the EEEI's motion for
execution of judgment.
Hanil filed a petition for certiorari and mandamus with prayer for
prohibition with the IAC assailing the trial court's orders dated August
23, 1982 and October 19, 1982 (granted). Hence, the Hanil's appeal in
Civil Case No. 35966 was reinstated and the trial court was ordered to
elevate the entire records of the case to the appellate court.
On March 13, 1985, and within the reglementary period to file
appellant's brief, Hanil filed an "Application for Judgment against
Attachment Bond" and "Motion to Defer Filing of Appellant's Brief"
praying for a hearing before the appellate court so it could prove the
damages it sustained as a result of the illegal writ of attachment
issued by the trial court. It wanted a judgment against the attachment
bond posted by EEEI and its insurer Sanpiro Insurance Corporation to
be included in the final decision in the main case. (DENIED)
ISSUE
Whether the denial of Hanil's application for judgment against the
attachment bond was proper. NO
RULING
Hanil contends that its application for judgment against the
attachment bond was pursuant to Section 20, Rule 57 of the Revised
Rules of Court.
In the instant case, the initial writ of attachment issued by the trial
court in the main case — Civil Case No. 35966 which is the subject of
appeal — was declared null and void by the appellate court in CA-G.R.
No. 14512. This present writ of attachment was issued and
subsequently enforced after the trial court's decision in Civil Case No.
35966 had been rendered and after the petitioner had already
perfected its appeal. Hanil, therefore, argues that the applica tion for
judgment against the attachment bond was properly lodged with the
appellate court pursuant to Section 9, of the Judiciary Reorganization
Act of 1980 (Batas Pambansa Blg. 129) which grants the Intermediate
Appellate Court "power to try cases and conduct hearings, receive
evidence and perform any and all acts necessary to resolve factual
issues . . ." It contends that it is only in the appellate court that these
damages could well be ventilated because they occurred during the
pendency of the appeal in AC-G.R. No. 15050.
The application for judgment against attachment bond was filed to
prove the damages sustained by Hanil as a result of the illegal writ of
attachment issued by the trial court so that the judgment against the
attachment bond posted by EEEI and its insurer could be included in
the final judgment of the main case. The assessment and award of
such damages could not have been made in CA-G.R. No. 14512 as
alleged by the private respondent because the question therein was
whether or not the writ of attachment in Civil Case No. 35966 should
have been issued.
The object was to set aside the preliminary attachment immediately.
It was a preventive measure.
The private respondent, in its petition for writ of attachment filed with
the trial court, posted an attachment bond issued by the Sanpiro
Insurance Corporation in the amount of P1,341,727.40.
Contrary to the claim of EEEI, this writ of attachment issued by
the trial court was executed. Hanil's equipment and bank
accounts were garnished pursuant to the writ. In fact, the EEEI's
opposition to the petitioner's MR of the trial court's order which issued
the writ of attachment stated that the same should be denied for being
moot and academic "because the writ of attachment and/or
garnishment have already been executed."
Considering that the writ of attachment was declared null and void,
Hanil had the right to ask for whatever damages it may have incurred
as a result of its issuance pursuant to Section 20, Rule 57.
Malayan Insurance Co., Inc. v. Salas lays down the procedure
regarding claims for damages against an illegal attachment.
"Under section 20, in order to recover damages on a replevin
bond (or on a bond for preliminary attachment, injunction
or receivership) it is necessary (1) that the defendant-
claimant has secured a favorable judgment in the main
action, meaning that the plaintiff has no cause of action and
was not, therefore, entitled to the provisional remedy of
replevin; (2) that the application for damages, showing
claimant's right thereto and the amount thereof, be filed in
the same action before trial or before appeal is perfected or
before the judgment becomes executory; (3) that due notice
be given to the other party and his surety or sureties, notice
to the principal not being sufficient and (4) that there should
be a proper hearing and the award for damages should be
included in the final judgment.
The application for damages against the surety must be filed (with
notice to the surety) in the Court of First Instance before the trial or
before appeal is perfected or before the judgment becomes executory.
If an appeal is taken, the application must be filed in the appellate
court but always before the judgment of that court becomes executory
so that the award may be included in its judgment. But it is not always
mandatory that the appellate court should include in its judgment the
award of damages against the surety. Thus, it was held that where the
application for damages against the surety is seasonably made in the
appellate court, `the latter must either proceed to hear and decide the
application or refer `it' to the trial court and allow it to hear and decide
the same.
Note that under the second paragraph of section 20, Rule 57 of the
present Rules of Court, the damages suffered during the pendency of
an appeal in a case where the writs of attachment, injunction and
replevin or an order of receivership were issued should be claimed in
the appellate court.
In the instant case, the application for judgment against the
attachment bond was filed under the following circumstances:
(1) the writ of attachment was issued by the trial court after it
had rendered its decision and after Hanil had already
perfected its appeal;
(2) EEEI posted a surety bond to answer for any damages that
may be adjudged to Hanil if the writ is later found to be
illegal;
(3) the writ of attachment was declared illegal; and
(4) the application for Judgment against the attachment bond
was made with notice to the insurer, Sanpiro Insurance
Corp.
THE APPELLATE COURT COMMITTED GRAVE ABUSE OF
DISCRETION IN DENYING THE APPLICATION FOR JUDGMENT
AGAINST ATTACHMENT BOND. The appellate court's error in this
case is more pronounced considering that under Section 9 of the
Judiciary Reorganization Act of 1980 (Batas Pambansa Blg. 129) the
Intermediate Appellate Court is now empowered to try cases and
conduct hearings, receive evidence and perform acts necessary to
resolve factual issues in cases falling within its original and appellate
6 3 8 | 19
jurisdiction. Certainly, the amount of damages, if any, suffered by
Hanil as a result of the issuance of the illegal attachment during the
pendency of the appeal is a factual issue.
The application for judgment against the bond seasonably filed by
Hanil in the appellate court would avoid multiplicity of suits. We have
earlier ruled that "the explicit provision of Section 20 of Rule 57,
Revised Rules of Court that the judgment against the surety should be
included in the final judgment is to avoid additional proceedings.
The appellate court should not have dismissed Hanil's appeal.
BA FINANCE CORP vs. CA, AUGUSTO and LILY YULO
Augusto Yulo secured a loan from the BA Finance in the
amount of P591,003.59 as evidenced by a PN he signed in his own
behalf and as representative of the A & L Industries. Yulo presented
an alleged SPA executed by Lily Yulo, who manages A & L Industries
and under whose name the said business is registered, purportedly
authorizing Augusto to procure the loan and sign the PN. About two
months prior to the loan, however, Augusto Yulo had already left their
conjugal home. When the obligation became due and demandable,
Augusto failed to pay the same.
BA Finance filed its amended complaint against the spouses Yulo on
the basis of the promissory note. It also prayed for the issuance of a
writ of attachment alleging that the said spouses were guilty of fraud
in contracting the debt upon which the action was brought and that
the fraud consisted of the spouses' inducing the BAF to enter into a
contract with them by executing a DoA, assigning all their rights, titles
and interests over a construction contract executed by and between
the spouses and A. Soriano Corporation when, in truth, the spouses
did not have any intention of remitting the proceeds of the said
construction contract despite the provisions in the DoA that the
spouses shall, without compensation or costs, collect and receive in
trust for BA Finance all payments made upon the construction
contract and shall remit to the same all collections therefrom, the said
spouses failed and refused to remit the collections and instead,
misappropriated the proceeds for their own use and benefit, without
the knowledge or consent.
The trial court issued the writ of attachment prayed for thereby
enabling BA Finance to attach the properties of A & L Industries.
BA Finance filed another motion for the examination of attachment
debtor, alleging that the properties attached by the sheriff were not
sufficient to secure the satisfaction of any judgment that may be
recovered by it in the case (granted)
Lily Yulo filed her answer with counterclaim, alleging that they were
already separated when the PN was executed; that her signature in
the SPA was forged; and that as a resultof the illegal attachment of her
properties, which constituted the assets of the A & L Industries, the
latter closed its business and was taken over by the new owner.
The trial court dismissed BA's complaint against Lily Yulo and A & L
Industries and ordering the petitioner to pay Lily Yulo P660k as actual
damages; P500k as unrealized profits; P300k as exemplary damages;
P30k as and for attorney's fees; and to pay the costs.
CA affirmed the trial court's decision except for the exemplary
damages which it reduced P150kand the attorney's fees which were
reduced to P20k and that the signature of Lily was a forgery. CA also
affirmed that there was bad faith on the part of BA Finance as to
entitle Lily to damages as shown not only by the fact that BAF did not
present the DoA or the construction agreement or any evidence
whatsoever to support its claim of fraud on the part of Lily and to
justify the issuance of a preliminary attachment.
ISSUE
Whether the attachment of the properties of A & L Industries was
wrongful and was made in bad faith and with malice to warrant
the award of other kinds of damages. NO, actual damages only
RULING
BAF CANNOT ENFORCE THE OBLIGATION CONTRACTED BY
AUGUSTO AGAINST HIS CONJUGAL PROPERTIES WITH LILY YULO
There is no dispute that A & L Industries was established during the
marriage of Augusto and Lily Yulo and therefore the same is
presumed conjugal and the fact that it was registered in the
name of only one of the spouses does not destroy its conjugal nature.
However, for the said property to be held liable, the obligation
contracted by the husband must have redounded to the benefit of the
conjugal partnership under Article 161 of the Civil Code.
In the present case, the obligation which the petitioner is seeking to
enforce against the conjugal property managed by Lily Yulo was
undoubtedly contracted by Augusto Yulo for his own benefit because
at the time he incurred the obligation he had already abandoned his
family and had left their conjugal home. Worse, he made it appear that
he was duly authorized by his wife in behalf of A & L Industries, to
procure such loan from the petitioner. Clearly, to make A & L
Industries liable now for the said loan would be unjust and contrary
to the express provision of the Civil Code.
THE WRIT OF ATTACHMENT CANNOT ISSUE AGAINST THE
PROPERTIES OF A&L INDUSTRIES
BAF: Both the lower court and the appellate court overlooked the fact
that the properties referred to are still subject to a levy on attachment.
They are, therefore, still under custodia legis and thus, the assailed
decision should have included a declaration as to who is entitled to
the attached properties and assuming that the attachment was
erroneous, the lower court should have ordered the sheriff to return to
the Lily the attached properties instead of condemning BAF to pay the
value thereof by way of actual damages.
Lazatin v. Twaño: "It should be observed that Sec. 4 of Rule 59, does
not prescribe the remedies available to the attachment defendant in
case of a wrongful attachment, but merely provides an action for
recovery upon the bond, based on the undertaking therein made and
not upon the liability arising from a tortious act, like the malicious
suing out of an attachment. Under the first, where malice is not
essential, the attachment defendant, is entitled to recover only the
actual damages sustained by him by reason of the attachment. Under
the second, where the attachment is maliciously sued out, the
damages recoverable may include a compensation for every injury to
his credit, business or feelings"
An attachment may be said to be wrongful when, for instance, the
plaintiff has no cause of action, or that there is no true ground
therefor, or that the plaintiff has a sufficient security other than the
property attached, which is tantamount to saying that the plaintiff is
not entitled to attachment because the requirements of entitling him
to the writ are wanting.
THERE WAS NO BAD FAITH ON THE PART OF BAF. Although BAF
failed to prove the ground relied upon for the issuance of the
writ of attachment, this failure cannot be equated with bad faith or
malicious intent. The steps which were taken by the petitioner to
ensure the security of its claim were premised on the firm belief that
the properties involved could be made answerable for the unpaid
obligation due it.
BAF IS ONLY LIABLE FOR ACTUAL DAMAGES, not for exemplary
damages and attorney's fees. Lily Yulo has manifested before this
Court that she no longer desires the return of the attached properties
since the said attachment caused her to close down the business.
From that time she has become a mere employee of the new
owner of the premises. She has grave doubts as to the running
6 3 8 | 20
condition of the attached machineries and equipments considering
that the attachment was effected way back in 1975. She states as a
matter of fact that the petitioner has already caused the sale of the
machineries for fear that they might be destroyed due to prolonged
litigation. It is just and equitable to allow private Lily Yulo to recover
actual damages based on the valueof the attached properties as
proven in the trial court, in the amount of P660,000.00. In turn, if there
are any remaining attached properties, they should be permanently
released to BAF.
AWARD OF UNREALIZED PROFITS NOT PROPER. The basis of the
alleged unearned profits is too speculative and conjectural to show
actual damages for a future period. Lily Yulo failed to present reports
on the average actual profits earned by her business and other
evidence of profitability which are necessary to prove her claim for
the said amount.
MALAYAN INSURANCE CO. INC. vs. HON. EMILIO V. SALAS,
ROSENDO FERNANDO and JOHN DOE
Makati Motor Sales, Inc., as vendor mortgagee, sued Rosendo
Fernando for the recovery of four diesel trucks and the collection of
the balance of his obligation plus damages . To obtain immediate
possession of the trucks pending trial, Makati Motors Sales, Inc.
posted a replevin bond executed by the Malayan Insurance Co., Inc. In
that bond the surety bound itself to pay P362,775.92 "for the return of
the property to the defendant, if the return thereof be adjudged, and
for the payment of such sum as may in the cause be recovered against
the plaintiff". Pursuant to the order of the court, the sheriff seized the
four trucks. Later, two of the trucks were returned to Fernando.
The the lower court rendered judgment ordering Makati Motor Sales,
Inc. to return to Fernando the other two trucks and to pay him, for the
seizure of each of them, damages in the sum of P300 daily from
September 25 and 26, 1970 until their return to Fernando plus P26,000
as actual and moral damages.
Fernando was ordered to pay Makati Motor Sales, Inc. the sum of
P66,998.34, as the balance of the price of the two trucks, with twelve
percent interest and the further sum of P15,730.20 as the cost of the
repair with six percent interest.
Fernando filed in the trial court an application for damages against
the replevin bond. It was opposed by the surety on the ground that the
trial court had lost jurisdiction over the case because of the perfection
of the appeal. The trial court denied the application. He filed in the CA
his claim for damages against the replevin bond. He prayed that the
same be included in the judgment.
CA observed that Fernando's motion or claim "was correct" and it
ordered that his claim against Malayan Insurance Co., Inc. "be heard
before the trial court".
After the remand of the record to the trial court, Fernando filed a
motion to set for hearing his application for damages against the
surety on its replevin bond. Malayan Insurance Co., Inc. moved to
quash the proceeding regarding the claim for damages. It assails the
trial court's competence to render judgment against the surety after
the decision of the CA against the surety's principal had become final
and executory.
ISSUE
Whether the trial court has jurisdiction. YES
RULING
Sec 10, Rule 60 of the Rules of Court provides that in replevin cases, as
in receivership and injunction cases, the damages "to be awarded to
either party upon any bond filed by the other" "shall be claimed,
ascertained, and granted" in accordance with section 20 of Rule 57.
Under section 20, in order to recover damages on a replevin bond
(or on a bond for preliminary attachment, injunction or
receivership) it is necessary (1) that the defendant-claimant has
secured a favorable judgment in the main action, meaning that the
plaintiff has no cause of action and was not, therefore, entitled to the
provisional remedy of replevin; (2) that the application for damages,
showing claimant's right thereto and the amount thereof, be filed in
the same action before trial or before appeal is perfected or before the
judgment becomes executory; (3) that due notice be given to the other
party and his surety or sureties, notice to the principal not being
sufficient and (4) that there should be a proper hearing and the award
for damages should be included in the final judgment.
THE TRIAL COURT HAS JURISDICTION TO PASS UPON FERNANDO'S
APPLICATION FOR THE RECOVERY OF DAMAGES ON THE SURETY'S
REPLEVIN BOND. Fernando seasonably filed his application for
damages in CA. It was not his fault that the damages claimed by him
against the surety were not included in the judgment of CA affirming
the trial court's award of damages to Fernando payable by the
principal in the replevin bond. The peculiar factual situation of this
case makes it an exception to the settled rule that the surety's liability
for damages should be included in the final judgment to prevent
duplicity of suits or proceedings.
The application for damages against the surety must be filed (with
notice to the surety) in the CFI before the trial or before appeal is
perfected or before the judgment becomes executory.
If an appeal is taken, the application must be filed in the appellate
court but always before the judgment of that court becomes executory
so that the award may be included in its judgment. But it is not always
mandatory that the appellate court should include in its judgment the
award of damages against the surety. Thus, it was held that where the
application for damages against the surety is seasonably made in the
appellate court, "the latter must either proceed to hear and decide the
application or refer "it" to the trial court and allow it to hear and decide
the same.”
The lower court has no choice but to implement that directive which
is the law of the case. However, the trial court's implementation of
that directive was incorrect. It set the claim for hearing but the surety
assailed its jurisdiction and did not consider itself bound by the
mandate of the appellate court. The merits of the claim for damages
were not threshed out at the hearing because the surety stood pat on
its contention that the trial court has no jurisdiction to allow the claim
in view of the finality of the decision of the Court of Appeals.
If the surety was not given notice when the claim for damages against
the principal in the replevin bond was heard, then as a matter of
procedural due process the surety is entitled to be heard when the
judgment for damages against the principal is sought to be enforced
against the surety's replevin bond.
SUMMARY HEARING. "The hearing will be summary and will be
limited to such new defense, not previously set up by the principal, as
the surety may allege and offer to prove. The oral proof of damages
already adduced by the claimant may be reproduced without the
necessity of retaking the testimony, but the surety should be given an
opportunity to cross-examine the witness or witnesses if it so
desires." That procedure would forestall the perpetration of fraud or
collusion against the surety.
Inasmuch as in this case appellant Malayan Insurance Co., Inc. was
not given the summary hearing during which it could contest the
reality or reasonableness of Fernando's claim for damages, we have
to set aside the trial court's order awarding damages against it and, in
the interest of justice, give it another opportunity to be heard on the
merits of Fernando's claim for damages.
(*see full text for further discussion of Section 20, jurisprudence)
6 3 8 | 21
 PHILIPPINE CHARTER INSURANCE CORPORATION vs. CA, GATES
LEARJET CORP and GATES LEARJET EXPORT CORP
In December, 1981, Learjet Phil. Inc. commenced suit in the Regional
Trial Court at Pasig against Gates Learjet Corporation and Gates
Learjet Export Corporation. On said Learjet’s application, and upon the
posting of an attachment bond in its behalf
by Philippine Charter Insurance Corporation, the Court issued a entitled to the attachment." This is so regardless ofthe nature and
writ of preliminary attachment directed against Gates et al'
properties. The sheriff seized a twin engine airplane, a Learjet 35-A-
3799.
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. CA reversed the judgment.
On December 16, 1986 four days after notice of the judgment was
served on the defendants, they filed with CA 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.,." 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 bondsman-surety . . ."
CA (1) denied the MR 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 pursuant to Section 20, Rule 57."
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.,. The
Court ordered execution of the judgment against Learjety. The writ
issued. The sheriff sought to enforce the writ also against the surety,
Philippine Charter Insurance Corporation.
PCIC filed with the Trial Court an "Urgent Motion to Recall and Nullify
Sheriff's Notice of Enforcement of Writ of Execution, and for
Issuance of Restraining Order/Writ of Preliminary Injunction." It
contended that there was in truth no judgment against it "due to the
wrongful attachment; that since neither Section 20, Rule 57 of the
Rules of Court nor the Resolution of the Court of Appeals 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 restrained enforcement of the writ of execution
against the surety. Later, it overruled the movant surety's argument
that it (the Court) had lost competence to hear and determine the
application for damages against the attachment bond because the
judgment of the Court of Appeals had become final and executory. it
ruled 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. 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 CA. Hence, an application for damages was filed in time.
ISSUE
Whether
RULING
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 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
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, 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 wrongful attachment.
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.
The surety on an attachment bond 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." 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 57 of the Rules of Court.
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."
6 3 8 | 22
In the case at bar, since the Trial Court's decision had gone against
Gates et al, 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.
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. Under the circumstances, and in the
light of the explicit provisions of said Section 20, Rule 57, there can be
no debate about the seasonableness 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.
The surety is aware 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.
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.
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 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."
ANTONIO ZARAGOZA vs. MARIA ANGELA FIDELINO and MABINI
INSURANCE & FIDELITY CO. INC
RULING
The appellant surety posits, quite correctly, that the situation at bar is
governed by Section 10, Rule 60, in relation to Section 20, Rule 57, of
the Rules of Court.
It would seem at first blush that Section 20, Rule 57 above quoted is
not relevant. Its title and first sentence speak [1] of
an illegal attachment, and [2] of a judgment "in favor of the party
against whom (said illegal) attachment was issued."
THE WRIT OF DELIVERY WAS NOT ILLEGAL; THE JUDGMENT WAS
FOR, NOT AGAINST, THE PARTY IN WHOSE FAVOR THE WRIT OF
DELIVERY WAS ISSUED. In other words, it would appear that for
Section 20, Rule 57 to apply to the instant action, the judgment should
have been "in favor of " defendant Fidelino (the party "against whom"
the writ of delivery was issued). This however was not the case. The
judgment was in fact against, NOT in favor of Fidelino.
It thus seems indeed that the first sentence of Section 20 precludes
recovery of damages by a party against whom an attachment is
issued and enforced if the judgment be adverse to him. This is not
however correct. Although a party be adjudged liable to another, if it
be established that the attachment issued at the latter's instance was
wrongful and the former had suffered injury thereby, recovery for
damages may be had by the party thus prejudiced by the wrongful
attachment, even if the judgment be adverse to him. Slight reflection
will show the validity of this proposition. For it is entirely possible for
a plaintiff to have a meritorious cause of action against a defendant
but have no proper ground for a preliminary attachment. In such a
case, if the plaintiff nevertheless applies for and somehow succeeds
in obtaining an attachment, but is subsequently declared by final
judgment as not entitled thereto, and the defendant shows that he has
suffered damages by reason of the attachment, there can be no
gainsaying that indemnification is justly due the latter.
Be all this as it may, the second and third sentences of Section 20, Rule
57, in relation to Section 10, Rule 60, are unquestionably relevant to the
matter of the surety's liability upon a counter-bond for the discharge
of a writ of delivery in a replevin suit. Under Section 10, Rule 60 (which
makes reference "to either party upon any bond filed by the other in
accordance with the provisions of this rule"), the surety's liability for
damages upon its counter-bond should "be claimed, ascertained, and
granted under the same procedure as prescribed in section 20 of Rule
57;" and said section 20 pertinently decrees that "(s)uch damages may
be awarded only upon application and after proper hearing, and shall
be included in the final judgment . . . (which means 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 ."
To hold a surety on a counter-bond liable, what is entailed is (1) the
filing of an application therefor with the Court having jurisdiction of
the action; (2) the presentation thereof before the judgment becomes
executory (or before the trial or before appeal is perfected); (3) the
statement in said application of the facts showing the applicant's
right to damages and the amount thereof; (4) the giving of due notice
6 3 8 | 23
of the application to the attaching creditor and his surety or sureties;
and (5) the holding of a proper hearing at which the attaching creditor
and the sureties may be heard on the application.
These requisites apply not only in cases of seizure or delivery under
Rule 60, but also in cases of preliminary injunctions under Rule
58, and receiverships under Rule 59.
It should be stressed, however, that enforcement of a surety's liability
on a counter-bond given for the release of property seized under a writ
of preliminary attachmentis governed, not by said Section 20, but by
another specifically and specially dealing with the matter; Section 17
of Rule 57.
ZENITH INSURANCE CORP vs. CA, HON. RICARDO J.
FRANCISCO, JEZZER BOTE and PEDRO F. MEJORADA
William B. Murphy filed a case for collection of a sum of money,
accounting and damages, in CFI of Rizal against Pedro Mejorada (Civil
Case No. 9490). Murphy likewise prayed for a Writ of Preliminary
Attachment, which the TrialCourt granted upon a bond of P250,000.00
issued by Zenith Insurance Corporation in favor of Murphy.
The Trial Court dismissed the complaint and ordered Murphy and
the Zenith Insurance Corporation to pay the defendant, jointly and
severally against the attachment bond.
Murphy and Zenith, as surety, appealed to the CA. Pending appeal,
judgment was partially executed in the amount of P115,680.55.
CA rendered judgment affirming in toto the Decision of the
Trial Court. Murphy moved for reconsideration (denied). Murphy then
appealed by way of Certiorari to this Court which was also deined.
Mejorada proceeded against the balance of Zenith's attachment bond
coverage, and collected P80,000.00 on July 24, 1980 and P54,319.45 on
August 15, 1980, adding up to the full value of the bond of P250,000.00,
including the amount of P115,680.55 already partially executed.
Mejorada acknowledged the last payment on August 15, 1980 to be "in
full satisfaction of the writ of execution issued."
Mejorada filed a Motion for the Issuance of an Alias Writ of Execution
to enforce the judgment award. The Trial Court denied alias execution
reasoning that, in executing the judgment, only the dispositive
portion is to be looked into in the absence of such ambiguity as would
justify resort to the body of the Decision, and that as the judgment is
clear, the liability of Zenith is confined to the amount of the bond.
Mejorada moved for reconsideration. The Trial Court issued the
questioned Order reconsidered the Motion for the issuance of an Alias
Writ of Execution, Zenith's liability "not (being) limited to the
amount of the bond it has put up but includes all the actual and
consequential damages suffered by private respondent, there having
intervened malice and bad faith" on Zenith's part. Alias Writ was
issued and served. The latter's cash deposit at the Commercial Bank
and Trust Company and at the Philippine Bank of Communications
were garnished.
CA upheld Alias Writ of Execution, Zenith's "solidary liability (having)
been clearly pronounced by this Court in case CA-G.R. No. 53497-R"
when it held that petitioner is equally liable for the damages that
resulted from the wrongful issuance of the writ (of attachment)."
Zenith moved for reconsideration arguing that liability on the
attachment bond is not to be founded with liability on the judgment,
and that its liability cannot exceed the amount of the attachment
bond (denied). It now argues that:
"1) Mejorada has been paid the full value of the P250,000.00
attachment bond posted by Zenith for Murphy;
2) the alias writ of execution would have Zenith surety
company satisfy, not the judgment with respect to the
damages resulting from the wrongful issuance of the
writ of attachment, but the judgment on the
causes of action asserted by Mejorada in his counterclaims
against Murphy;
3) the alias writ of execution would have petitioner surety
company pay more than the value of the attachment bond."
ISSUE
Whether Zenith Insurance is liable as surety by virtue of the alias writ
of execution. NO
RULING
The trial court’s decision is clear and correct. There is no ambiguity
that would "justify resort to the entire contents of the decision in
order to determine the extent of the liability of a party litigant". The
liability of Zentih is expressly limited to P250k, the amount of the
attachment bond. "A guaranty is not presumed, it must be express and
cannot extend to more than what is stipulated therein."
It is true that Zenith was pronounced "equally liable with its principal
for all damages sustained resulting from the wrongful issuance of the
Writ (of Preliminary Attachment)". The phrase "all damages" refers to
those resulting from the undertaking itself. It does not mean that the
surety is answerable for all costs and damages that may be adjudged
against its principal over the above what is adjudged against it in the
dispositive portion of the Decision, as it would be unreasonable to
expand petitioner's liability for any and all amounts arising from the
case as if it were a "solidary judgment debtor."
When a surety executes a bond, it does not guarantee that the
plaintiff's cause of action is meritorious, and that it will be responsible
for all the costs that may be adjudicated against principal in case the
action fails. The extent of a surety's liability is determined only by the
clause of the contract suretyship. It cannot be extended by
implication, beyond the terms of the contract.
Rocco vs. Meads: "Liability on the bond is contractual in nature, and is
ordinarily restricted to the obligation expressly assumed therein.
Liability an attachment bond is created by, and rests on, its
stipulations obligor has a right to stand on the very terms of his
contract, and his liability will not be extended beyond the fair
importof the, words used; his liability is one not to be extended by
implication, and it will not be inferred that he agreed to do more than
that which is fairly expressed in the bond."
The ruling in PNB vs. Luzon Surety Co., Inc, which increased the
surety's liability beyond the maximum of the bond by making it liable
to pay interest because of its failure to pay its obligation on demand,
does not apply in this case, because Zenith has settled its obligation,
and its liability had already been fully satisfied, unlike in the cited
case where the increased liability was "not because of the contract
but because of the default and the necessity of judicial collection."
FRANCISCO L. LAZATIN vs. ANGEL C. TWAÑO and
GREGORIO T. CASTRO
The case at bar had its genesis in Civil Case No. 213, CFI, Manila
entitled "Angel C. Twaño and Gregorio T. Castro, plaintiffs, versus F. L.
Lazatin, et al., defendants, Dionisio P. Tanglao, Intervenor", for the
recovery of P35k, plus interest, realized in connection with the
purchase by them from the U.S. government, and the subsequent sale,
of some 225 auto-trucks.
CFI of Manila dismissed the complaint as well as the intervention.
The order of dismissal was taken to the CA which rendered judgment
reversing the said order and declaring that plaintiffs and defendants
6 3 8 | 24
were co-owners in the business of buying and selling surplus auto-
trucks, and ordered the defendants (one of them Lazatin) to pay to the
plaintiffs therein, the sum of P10k, with legal interest from the filing
of the complaint. The said decision became final; it was executed,
with the levy of the properties of Lazatin and their subsequent sale at
public auction, wherein the Twaño and Castro were the purchasers.
Before the expiration of the redemption period, Lazatin deposited
with the Sheriff of Pampanga, the sum of P13,849.88, redemption price.
Francisco Lazatin filed the present action to recover from the same
Twaño and Castro, the sum of P19,676.09, supposedly a balance of the
proceeds of auto-trucks, sold directly to purchasers by said
defendants. Lazatin, alleging that "there is no security whatsoever for
the payment of the amount claimed in the complaint and that the
defendants are moving or are about to remove or dispose of their
property with intent to defraud their creditors, particularly the
plaintiff", secured a writ of attachment in the amount he deposited.
Sheriff of Pampanga refused to deliver the sum of P13,849.88 which
should have been paid to the Twano and Castro.
Twano and Castro filed an Urgent Motion to Dissolve the Writ of
Preliminary Attachment, on the following grounds:
1. That the plaintiff has no cause of action because (a) the
right of action, if any, has prescribed, and (b) the cause of
action is barred by a prior judgment; and
2. That the allegations in the petition for the issuance of the
writ and in the affidavit in support thereof are false.
The lower court dissolved the writ.
Twano and Castro filed their answer and after the customary
admissions and denials, interposed as special defenses, the same
grounds averred in the motion to lift the writ and counterclaimed:
1. That Lazatin has filed a clearly unfounded civil action as
a result of which the latter had suffered actual or
compensatory damages by way of attorney's fees in the sum
of P3,000.00.
2. That as a result of the wrongful attachment and the false
statements in support of his Ex-Parte Petition for the Writ
the defendants have suffered moral damages to the amount
of P10,000.00, the sum of P13,849.88 as actual damages…
Lazatin died and Gil Gotiangco was appointed and qualified as
administrator of plaintiff's estate.
The lower court dismissed the complaint on the ground that it was
barred by a prior judgment and by the statute of limitations. It also
ordered the estate of Lazatin to pay the defendants. Central Surety
and Insurance Co. was held solidarily liable with the Estate of
Francisco L. Lazatin on its bond for the sum of P20,000.00, filed by said
Company for the issuance of the writ of attachment.
Twano and Castro invoke Section of Rule 59. They claim that malice
and want of probable cause are not essential; and the element of
malice cannot be implied from the terms thereof. It is argued that as
the attachment-plaintiff, according to the rule, should pay "all the
damages" which the attachment defendant might sustain by reason
of the attachment, if the court shall finally adjudge that the plaintiff
was not entitled thereto, the ruling of the trial court that the appellant
should pay the appellees moral damages, is correct.
ISSUE
Whether the award of moral damages is proper. NO
RULING
Article 2219 provides that moral damages may be recovered in
the following and analogous cases . . . (3) malicious prosecution.
There is an abundance of cases holding that the action to recover
damages from the attachment plaintiff, for the wrongful
issuance and levy of an attachment (malicious attachment) is
identical or is analogous to the ordinary action for malicious
prosecution. In order that moral damages may be recovered in
connection with the writ of attachment under consideration, malice
is an essential ingredient thereof.
Sec. 4 of Rule 59, does not prescribe the remedies available to the
attachment defendant in case of a wrongful attachment, but merely
provides an action for recovery upon the bond, based on the
undertaking therein made and not upon the liability arising from a
tortious act, like the malicious suing out of an attachment. Under the
first, where malice is not essential, the attachment defendant, is
entitled to recover only the actual damages sustained by him, by
reason of the attachment. Under the second, where the attachment is
maliciously sued out, the damages recoverable may include a
compensation for every injury to his credit, business or feelings. And
considering the fact that the Rules of Court are of older vintage than
the new Civil Code, the matter of damages in the said rules should he
encompassed within the framework of the Civil Code. It is quite true
that said section 4 employs the expression "all damages", but this
should be understood to refer to the damages resulting from the
undertaking itself, the recovery of which is subject to "the principles
of the general law on damages", earlier discussed.
The trial court did not make any express ruling that the writ of
attachment was maliciously sued out. The decision does not make
any finding that the defendants-appellees did in fact suffer mental
anguish or injury to their credit or reputation. The decision simply
states: "Coming now to the moral damages which defendants have
suffered consisting of mental anguish, serious anxiety and
besmirched reputation, it is believed that being businessmen of good
commercial standing and reputation, each of them should be awarded
at least P2,500.00."
The dissolution of the writ was due to a technicality. No moral
damages can be inferred from the mere fact that the redemption price
to which defendants were entitled, had been retained by the
provincial sheriff for a period of 38 days. The trial court held that the
present action was already investigated and adjudged in CA-G. R. No.
4533-R and the right of action was barred by the statute of limitations,
and that since the writ of attachment was only a remedy adjunct to
the main suit, plaintiff-appellant was not entitled to the writ. While
the lower court declared that the defendants-appellees had an
outstanding balance of P171,947.80 in the bank and that they were not
disposing their property in fraud of creditors or of the plaintiff, as
alleged in the petition for the issuance of the writ, still the said court
did not make any finding that the petition was maliciously sued out.
There is no showing in the decision appealed from that plaintiffs'
action is "clearly unfounded". Plaintiffs-appellants' complaint was not
dismissed because the facts alleged therein were found untrue, but on
purely technical grounds the special defenses of prescription of the
action and res adjudicata.
Twano and Castro were drawn into this litigation by plaintiff-
appellant and were compelled to hire an attorney to protect and
defend them, we deem it just and equitable to award attorney's fees
for defendants-appellees (3k).
MC ENGINEERING INC. vs. CA, GERENT BUILDERS INC.
and STRONGHOLD INSURANCE CO. INC.
Mc Engineering, Inc. and Sucodeco signed a contract for the
restoration of the latter's building, land improvement, electrical, and
mechanical equipment located which was damaged by typhoon
Nitang. The agreed consideration was P5,150,000.00 * of which
P2,500,000.00 ** was for the restoration of the damaged buildings and
6 3 8 | 25
land improvement, while the P3,000,000.00 was for the
restoration of the electrical and mechanical works.
Mc Engineering and Gerent Builders, Inc., entered into an agreement
wherein MC subcontracted to Gerent the restoration of the buildings
and land improvement phase of its contract with Sucodeco but MC
retained for itself the restoration of the electrical and mechanical
works. The subcontracted work covered the restoration of the
buildings and improvement for P1,665,000.00.
Sucodeco and Mc Engineering entered into an agreement amending
provision No. VII, par 1 of their contract by increasing the price of the
civil works by P854,851.51, with the express proviso that 'except for the
amendment above specified, all the other provisions of the original
contract shall remain the same.
The civil work aspect consisting of the building restoration and land
improvement from which plaintiff would get P1,665,000.00 was
completed and the corresponding certificate of acceptance was
executed but the electrical works were cancelled.
Gerent received from MC the amount of P1,339,720.00 * as full
payment of the sub-contract price, after deducting earlier payments
as evidenced by the affidavit executed by Mr. Narciso C. Roque,
wherein the latter acknowledged complete satisfaction for such
payment on the basis of the Statement of Account.
Gerent is still claiming the sum of P632,590.13 as its share in the
adjusted contract cost in the amount of P854,851.51, alleging that the
sub- contract is subject to the readjustment provided for in Section
VII of the agreement, and also the sum of P166,252.00 in payment for
additional electrical and civil works outside the scope of the sub-
contract."
MC refused to pay respondent Gerent. Gerent filed the complaint
against petitioner.
The trial court issued a writ of preliminary attachment upon the filing
by Gerent of a P632,590.13 bond issued by Stronghold. MC moved to
quash the writ on the ground that it was improperly issued (denied).
CA declared the issued writ of attachment null and void. The Sheriff
is directed to restore ownership of the properties heretofore seized
and attached to MC. However, sheriff Florendo reported to
the court that he never seized a single property of petitioner but
merely conducted a "paper levy."
MC filed an application against the attachment bond to recover
damages it suffered due to the wrongful issuance of the
writ ofattachment.
The trial court ordered the Gerent and Stronghold Surety And
Insurance Company to pay defendant M.C. Engineering, Inc., jointly
and severally, the sum of P70,000.00 as moral damages; P30,000.00 as
exemplary damages; and P50,000.00 as attorney's fees, plus costs.
Gerent and Stronghold filed separate notices of appeal.
CA ruled respondent Gerent's claim meritorious, declaring that
Gerent is entitled to share 74% of the price increase in the civil works
portionof the main contract. Second, the CA noted that the price
increase preceded the cancellation of petitioner's electrical and
mechanical works portion of the main contract. Third, CA did not
consider the absence of an itemized listing of material and labor
costs relevant to respondent Gerent's right to a share in the price
increase. Fourth, CA found no evidence that petitioner spent
substantial amounts on the electrical and mechanical portion of the
main contract to justify petitioner's claim to the entire price increase.
ISSUE
Whether MC is entitled to actual, moral, and exemplary damages due
to the wrongful issuance of the writ ofpreliminary attachment.
The CA ruled that appellee failed to establish bad faith and
malice against plaintiff-appellant when it sought to attach the
former's properties. The lowercourt itself in its decision did not make
any express pronouncement as to the existence of malice and bad
faith in the procurement of the writ of attachment. Instead the
trial court concluded that 'as a result of such attachment, the
defendant's business operation and credit standing have been
prejudiced and damaged' and 'the defendant is entitled to recover
moral and exemplary damages by reason of the irregular
issuance of the writ of attachment.' Such conclusions do not
immediately warrant the award of moral damages. It is true that the
attachment was wrongful. But in the absence of proof of bad faith or
malice, plaintiff-appellant's application cannot be said to be
harassing or oppressing but merely an act done to assert and protect
a legal right.
THE GRANT OF EXEMPLARY DAMAGES IS IMPROPER. Since no
moral damages is due to appellee and it appearing that no actual
damages was awarded by the lower court, the grant of exemplary
damages has no leg on which to stand (Art. 2234, Civil Code).
If at all, the wrongful issuance of the writ of attachment, as ruled out
by this Court, merely resulted in actual damages to appellee. But such
is not automatically awarded for it is subject to proof.
ACTUAL DAMAGES CANNOT ALSO BE AWARDED. Appellee's claim
that it lost major contracts after a credit investigation revealed that
its accounts were garnished is a bare allegation not merely
unsupported by solid evidence but is also speculative. The alleged
$35,000.00 remittance refused by the Hongkong and Shanghai Bank
does not inspire belief for failure of appellee to produce documentary
proof to buttress its claim."
THE TRIAL COURT ERRED IN AWARDING MORAL AND EXEMPLARY
DAMAGES. The mere fact that a complaint is dismissed for
lack of legal basis will not justify an award of moral damages to the
prevailing party. Even the dismissal of a "clearly unfounded civil
action or proceeding" will not entitle the winning party to moral
damages. For moral damages to be awarded, the case must fall within
the instances enumerated in Article 2219, or under Article 2220, of the
Civil Code. Moreover, in the absence of fraud, malice, wanton
recklessness or oppressiveness, exemplary damages cannot be
awarded.
D.M. WENCESLAO and ASSOCIATES INC. and/or
DOMINADOR S. DAYRIT vs. READYCON TRADING AND
CONSTRUCTION CORP
WENCESLAO had a contract with the PEA for the improvement of the
main expressway in the R-1 Toll Project along the Coastal Road in
Parañaque City. To fulfill its obligations to the
PEA, WENCESLAO entered into a contract with READYCON.
READYCON agreed to sell to WENCESLAO asphalt materials valued at
P1,178,308.75. The contract bore the signature of co-petitioner
Dominador Dayrit, as signatory officer for WENCESLAO in this
agreement. Under the contract, WENCESLAO was bound to pay
READYCON a (20%) downpayment, or P235,661.75, upon delivery of the
materials contracted for. The balance of the contract price, amounting
to P942,647, was to be paid within (15) days thereof. It was further
stipulated by the parties that READYCON was to furnish, deliver, lay,
roll the asphalt, and if necessary, make the needed corrections on a
prepared base at the jobsite.
READYCON delivered the assorted asphalt materials worth
P1,150,531.75. Accordingly, WENCESLAO paid the downpayment of
P235,661.75. Thereafter, READYCON performed its obligation to lay
and roll the asphalt materials on the jobsite.
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(15) days after performance of said work, READYCON demanded
that WENCESLAO pay the balance of the contract price. WENCESLAO,
however, ignored said demand. READYCON wrote a demand letter
to WENCESLAO asking that it make good on the balance it owed.
Again, WENCESLAO failed to heed the demand.
READYCON filed a complaint with the RTC of Pasig City for collection
of a sum of money and damages, with prayer for writ of preliminary
attachment against D.M. Wenceslao and/or Dominador
Dayrit. As READYCON timely posted the required bond of P1,150,000,
its application for the writ of preliminary attachment was granted.
RTC Sheriff attached certain assets of WENCESLAO, particularly, the
following heavy equipments: One (1) asphalt paver, one (1) bulldozer,
one (1) dozer and one (1) grader.
WENCESLAO moved for the release of the attached equipments and
posted its counter-bond. The trial court granted the motion and
directed the RTC Sheriff to return the attached equipments.
WENCESLAO admitted that it owed READYCON P1,014,110.45 indeed.
However, it alleged that their contract was not merely one of sale but
also of service, namely, that respondent shall lay the asphalt in
accordance with the specifications and standards imposed by and
acceptable to the government.WENCESLAO also alleged that since
the contract did not indicate this condition with respect to the period
within which the balance must be paid, the contract failed to reflect
the true intention of the parties. It alleged READYCON agreed that the
balance in the payments would be settled only after the government
had acceptedREADYCON's work as to its quality in laying the asphalt.
By way of counterclaim, WENCESLAO prayed for the payment of
damages caused by the filing of READYCON's complaint and the
issuance of the writ of attachment despite lack of cause.
RTC rendered judgment ordering D.M. Wenceslao & Associates, Inc. to
pay plaintiff.
CA found that contrary to WENCESLAO's assertion, malice and bad
faith in obtaining a writ of attachment must be proved before a claim
for damages on account of wrongful attachment will prosper. The CA
stressed that the trial court found neither malice nor bad faith relative
to the filing of the complaint and the obtaining of the writ of
attachment. Also, according to the CA, petitioners did not adduce
evidence to show that the attachment caused damage to the cited
pieces of heavy equipment.
ISSUE
Whether READYCON is liable for compensatory damages for the
wrongful issuance of the writ of preliminary attachment.
RULING
WENCESLAO contend that Lazatin applies in the instant case
because the wrongful attachment of WENCESLAO's equipment
resulted in a paralysis of its operations, causing it to sustain a loss of
P100k per day in terms of accomplishment of work. Since the
attachment lasted 19 days it suffered a total loss of P1.9M. Aside from
that, it had to spend P50k on the pullout of the equipment and another
P100k to repair and restore them to their former working condition.
READYCON counters that inasmuch as a preliminary attachment is
an available ancillary remedy under the rules, a penalty cannot be
meted out for the enforcement of a right, such as in this case when it
sought such relief. It stresses that the writ was legally issued by the
RTC, upon a finding that READYCON sought the relief without malice
or bad faith. Furthermore, WENCESLAO failed to show concrete and
credible proof of the damages it suffered.
The posting of a counter-bond is not tantamount to a waiver of the
right to damages arising from a wrongful attachment. (Calderon vs
IAC)
There is no hard and fast rule that bad faith or malice must be
proved to recover any form of damages.
AWARD OF ACTUAL OR COMPENSATORY DAMAGES, NOT PROPER.
Petitioners cite Lazatin and MC Engineering insofar as proof of bad
faith and malice as prerequisite to the claim of actual damages is
dispensed with. Otherwise stated, proof of malice and bad faith are
unnecessary because, just like in Lazatin and MC Engineering, what
is involved here is the issue of actual and compensatory damages.
Nonetheless, we find that petitioner is not entitled to an award of
actual or compensatory damages. Unlike Lazatin and MC
Engineering, wherein the respective complaints were dismissed for
being unmeritorious, the writs of attachment were found to be
wrongfully issued, in the present case, both the trial and the appellate
courts held that the complaint had merit. The two courts
found READYCON entitled to a writ of preliminary attachment as a
provisional remedy by which the property of the defendant is taken
into custody of the law as a security for the satisfaction of any
judgment which the plaintiff may recover.
READYCON was 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.
On the second issue, WENCESLAO admits that it indeed
owed READYCON the amount being claimed by the latter. However, it
contends that while the contract provided that the balance was
payable within fifteen (15) days, said agreement did not specify when
the period begins to run. Therefore, according to petitioner, the
appellate court erred when it held the contract clear enough to be
understood on its face. WENCESLAO insists that the balance of the
purchase price was payable only "upon acceptance of the work by the
government." In other words, the real intent of the parties was that it
shall be due and demandable only fifteen days after acceptance by the
government of the work. This is common practice, according to
petitioner.
SPOUSES GREGORIO and JOSEFA YU vs. NGO YET TE,
doing business under the name and style, ESSENTIAL
MANUFACTURING
Spouses Yu purchased from Ngo Yet Te bars of detergent soap worth
P594,240.00, and issued to the latter three postdated checks as
payment of the purchase price. When Te presented the checks at
maturity for encashment, said checks were returned dishonored and
stamped "ACCOUNT CLOSED". Te demanded payment from Spouses
Yu but the latter did not heed her demands.
Te filed a Complaint for Collection of Sum of Money and Damages
with Prayer for Preliminary Attachment . Te attached to her Complaint
an Affidavit executed by Sy that Spouses Yu were guilty of fraud in
entering into the purchase agreement for they never intended to pay
the contract price, and that, based on reliable information, they were
about to move or dispose of their properties to defraud their creditors.
Upon Te's posting of an attachment bond, RTC issued an Order of
Attachment/Levy on the basis of which Sheriff Constancio
Alimurung of RTC, Branch 19, Cebu City levied and attached Spouses
Yu's properties in Cebu City consisting of one parcel of land and four
units of motor vehicle, specifically, a Toyota Ford Fierra, a jeep, a
Canter delivery van, and a passenger bus.
Spouses Yu filed an Answer with counterclaim for damages arising
from the wrongful attachment of their properties, specifically, actual
damages amounting to P1,500.00 per day; moral damages,
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P1,000,000.00; and exemplary damages, P50,000.00. They also sought
payment of P120,000.00 as attorney's fees and P80,000.00 as litigation
expenses. Spouses Yu filed an Urgent Motion to Dissolve Writ of
Preliminary Attachment. They also filed a Claim Against Surety
Bond in which they demanded payment from Visayan Surety, the
surety which issued the attachment bond, of the sum of P594,240.00,
representing the damages they allegedly sustained as a consequence
of the wrongful attachment of their properties.
RTC dischared from attachment the Toyota Ford Fierra, jeep, and
Canter delivery van on humanitarian grounds, but maintaining
custody of Lot No. 11 and the passenger bus.
CA lifted the RTC Order of Attachment on their remaining properties.
At the hearing on the motion to discharge the order of attachment,
petitioners presented evidence showing that private respondent has
been extending multi-million peso credit facilities to the petitioners
for the past seven years and that the latter have consistently settled
their obligations. This was not denied by private respondent. Neither
does the private respondent contest the petitioners' allegations that
they have been recently robbed of properties of substantial value,
hence their inability to pay on time. By the respondent court's own
pronouncements, it appears that the order of attachment was upheld
because of the admitted financial reverses the petitioner is
undergoing.
RTC, apparently not informed of the SC Decision, rendered a decision
ordering to pay the plaintiff the sum of P549,404.00, with interest from
the date of the filing of this case and granting damages to the plaintiff.
Spouses Yu contend that they are entitled to their counterclaim for
damages as a matter of right in view of the finality of our Resolution
in G.R. No. 114700 which affirmed the finding of the CA that Te had
wrongfully caused the attachment of their properties. They argue that
they should be awarded damages based solely on the CA finding that
the attachment was illegal for it already suggests that Te acted with
malice when she applied for attachment. And even if we were to
assume that Te did not act with malice, still she should be held liable
for the aggravation she inflicted when she applied for attachment
even when she was clearly not entitled to it.
ISSUE
Whether the writ of attachment was procured in bad faith, entitling
Spouses Yu to actual, moral and exemplary damages. NO
RULING
Lazatin v. Twaño: where there is wrongful attachment, the
attachment defendant may recover actual damages even without
proof that the attachment plaintiff acted in bad faith in obtaining the
attachment. However, if it is alleged and established that the
attachment was not merely wrongful but also malicious, the
attachment defendant may recover moral damages and exemplary
damages as well. Either way, the wrongfulness of the attachment
does not warrant the automatic award of damages to the attachment
defendant; the latter must first discharge the burden of proving the
nature and extent of the loss or injury incurred by reason of the
wrongful attachment.
The CA finding that the attachment of the properties of Spouses Yu
was wrongful did not relieve Spouses Yu of the burden of proving the
factual basis of their counterclaim for damages.
To merit an award of actual damages arising from a wrongful
attachment, the attachment defendant must prove, with the best
evidence obtainable, the fact of loss or injury suffered and the amount
thereof. Such loss or injury must be of the kind which is not only
capable of proof but must actually be proved with a reasonable degree
of certainty. As to its amount, the same must be measurable based on
specific facts, and not on guesswork or speculation. In particular, if
the claim for actual damages covers unrealized profits, the
amount of unrealized profits must be established and supported
by independent evidence of the mean income of the business
undertaking interrupted by the illegal seizure.
Spouses Yu insist that the evidence they presented met the foregoing
standards. They point to the lists of their daily net income from the
operation of said passenger bus based on used ticket stubs issued to
their passengers. They also cite unused ticket stubs as proof of
income foregone when the bus was wrongfully seized. They further
cite the unrebutted testimony of Josefa Yu that, in the day-to-day
operation of their passenger bus, they use up at least three ticket stubs
and earn a minimum daily income of P1,500.00.
SPOUSES YU FAILED TO PROVE THEIR COUNTERCLAIM. Spouses
Yu's claim for unrealized income of P1,500.00 per day was based on
their computation of their average daily income for the year 1992. Said
computation in turn is based on the value of three ticket stubs sold
over only five separate days in 1992. By no stretch of the imagination
can we consider ticket sales for five days sufficient evidence of the
average daily income of the passenger bus, much less its mean
income. Not even the unrebutted testimony of Josefa Yu can add
credence to such evidence for the testimony itself lacks
corroboration.
Long before the passenger bus was placed under preliminary
attachment, the same had been previously attached by the Sheriff of
Mandaue City in connection with another case and that it was placed
in the Cebu Bonded Warehousing Corporation, Cebu City. Thus,
Spouses Yu cannot complain that they were unreasonably deprived
of the use of the passenger bus by reason of the subsequent wrongful
attachment issued in Civil Case No. 4061-V-93. Nor can they also
attribute to the wrongful attachment their failure to earn income or
profit from the operation of the passenger bus.
TEMPERATE DAMAGES, PROPER. Spouses Yu did not present
evidence as to the damages they suffered by reason of the wrongful
attachment of Lot No. 11. However, Spouses Yu suffered some form of
pecuniary loss when their properties were wrongfully seized,
although the amount thereof cannot be definitively ascertained.
Hence, an award of temperate or moderate damages in the amount of
P50,000.00 is in order.
MORAL AND EXEMPLARY DAMAGES, NOT PROPER. As to moral and
exemplary damages, to merit an award thereof, it must be shown that
the wrongful attachment was obtained by the attachment plaintiff
with malice or bad faith, such as by appending a false affidavit to his
application.
Spouses Yu argue that malice attended the issuance of the
attachment bond as shown by the fact that Te deliberately appended
to her application for preliminary attachment an Affidavit where Sy
perjured himself by stating that they had no intention to pay their
obligations even when he knew this to be untrue given that they had
always paid their obligations; and by accusing them of disposing of
their properties to defraud their creditors even when he knew this to
be false, considering that the location of said properties was known to
him.
It is not difficult to understand why Te concluded that Spouses Yu
never intended to pay their obligation for they had available funds in
their bank but chose to transfer said funds instead of cover the checks
they issued. Thus, we cannot attribute malice nor bad faith to Te in
applying for the attachment writ.
ATTORNEY’S FEES, PROPER. Attorney's fees cannot be awarded when
moral and exemplary damages are not granted, the exception
however is when a party incurred expenses to lift a wrongfully issued
writ of attachment. It is only just and equitable that they be awarded
reasonable attorney's fees in the amount of P30,000.00.
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