PROVISIONAL REMEDIES (Rule 57)
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PROVISIONAL REMEDIES
We are going to review the concept of Provisional Remedies from Rule 57 to Rule 61.
First of all, the word provisional is suggestive. It is something temporary. Provisional
Remedies are remedies which are temporary and is defined by the Supreme Court as
remedies which parties litigants may resort for the preservation of protection of their
rights and interests and for no other purpose, during the pendency of the litigation. So,
just to preserve the rights while the case is pending.
Q: What are the known Provisional Remedies?
A: There are five (5).
[1] Rule 57- Preliminary Attachment;
[2] Rule 58- Preliminary Injunction;
[3] Rule 59- Receivership;
[4] Rule 60- Replevin; (used to be known as Delivery of Personal Property) and
[5] Rule 61- Support Pendente Lite
BASIC PRINCIPLES ABOUT PROVISIONAL REMEDIES
FIRST: A provisional remedy is not a civil action.
It is just incidental or attached to an action. There is no such thing as an action for
attachment. You cannot file a case for attachment. You can file a case to collect a sum
of money coupled with a petition or application for preliminary attachment. So, it must
be attached. It is not a remedy by itself but a remedy attached to a main action.
That is why the Supreme Court said in one case, "it is an ancillary remedy, it is not
sought for its own sake but rather to enable the other party to seek relief from the
main action."
SECOND: If you have a good cause of action, it does not follow that
you can have a ground for a provisional remedy, that you can
attach immediately.
For example, I will sue a debtor who has not paid me and I believe he has no defense.
So, I believe that my chance of losing is zero. I am a sure winner, and even my lawyer
agrees that the other party has no defense.
Q: Can I attach his properties?
A: No. In order to attach, let us say preliminary attachment, let us find out whether we
have the grounds. If none, we will just file a case.
Thus, it does not follow that everytime you file a case for collection, you always file for
attachment. As a matter of fact, under Section 20, the plaintiff may win the case but he
is held liable for damages for attaching without a ground- illegal attachment.
THIRD: If the provisional remedy is granted, it does not mean that
you are already the winner. You still have to win the main case.
Q: So, what happens if it turns out that you have no cause of action, the main action is
dismissed?
A: You are not just a loser, you can also be held liable for damages. For how in the world
were you able to get the right to attach when you have no cause of action in the
first place? In other words, even if your application for provisional remedies is granted, it
is not a guaranty that you will win the case. You still have to prove the existence of a
valid cause of action.
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RULE 57
PRELIMINARY ATTACHMENT
Section 1. Grounds upon which attachment may issue.- At
the commencement of the action or at any time before
entry of judgment, a plaintiff or any proper party may
have the property of the adverse party attached as
security for the satisfaction of any judgment that may be
recovered in the following cases:
In an action for the recovery of a specified amount of money
or damages, other than moral and exemplary, on a cause
of action arising from law, contract, quasi-contract, delict
or quasi-delict against a party who is about to depart from
the Philippines with intent to defraud his creditors;
In an action for money or property embezzled or
fraudulently misapplied or converted to his own use by a
public officer, or an officer of a corporation, or an attorney,
factor, broker, agent, or clerk, in the course of his
employment as such, or by any other person in a
fiduciary capacity, or for a willful violation of duty;
In an action to recover possession of property unjustly
or fraudulently taken, detained or converted, when the
property, or any part thereof, has been concealed, removed,
or disposed of to prevent its being found or taken by
applicant or an authorized person;
In an action against a party who has been guilty of a fraud
in contracting the debt or incurring the obligation upon
which the action is brought, or in the performance thereof;
In an action against a party who has removed or disposed
of his property, or is about to do so, with intent to defraud
his creditors; or
In an action against a party who does not reside and is not
found in the Philippines, or on whom summons may be
served by publication. (1a)
PRELIMINARY ATTACHMENT – a remedy by which the property of the defendant is
taken into the custody of law either at the commencement of action or at anytime before
the entry of judgment as security.
Q: What are the changes under the new rule?
A: The new rule states "At the commencement of the action or at any time before entry
of judgment". The old rule's language is "at any time during the progress of the same".
Meaning, while the case is going on. Actually, this is the same, but now it is clearer,
"before entry of judgment, a plaintiff or any proper party may have the property of the
adverse party attached".
"A plaintiff or any proper party."
Q: Who is this proper party?
A: The plaintiff, the defendant can attach in the counterclaim. The cross-claimant, 3rdparty defendant, they are also plaintiffs within the meaning of the law.
TYPES OF ATTACHMENT:
[1] Preliminary Attachment (under rule 57);
[2] Final Attachment/ Levy in Execution
[3] Garnishment.
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Preliminary Attachment contemplates Rule 57. You attach the property while the case
is going on, before judgment, or at the commencement, as security for the satisfaction of
any judgment that you may recover.
Final attachment is an attachment issued to enforce a judgment or to satisfy a judgment,
which has become final and executory. Meaning, we will attach the property of the
defendant to be sold at a public auction for the purpose of satisfying a judgment.The
other name for final attachment is levy on execution governed by Rule 39.
Garnishment is actually a variation of either attachment or execution. It is a species/type
of attachment or execution for reaching credits belonging to a judgment debtor owing to
him by a third person, stranger to the litigation. This is similar to sequestration.
Example of garnishment: when you garnish the bank account of a depositor. You attach
it. It is a credit since the bank is a debtor of the depositor.
The concept of garnishment is explained clearly by the Supreme Court in the case of
Perla Compana de Seguros v. Ramolete, 203 SCRA 487. According to
the SC, "Garnishment has been defined as a species of attachment for reaching
any property or credits pertaining or payable to a judgment debtor. In legal
contemplation, it is a forced novation by the substitution of creditors; the
judgment debtor, who is the original creditor of the garnishee is, through the
service of the writ of garnishment, substituted by the judgment creditor who
thereby becomes the creditor of the garnishee." So, I owe you, you owe him, so by
garnishment it is not with you that I am indebted with, it is with him already. In effect,
there is a change of creditor.
Garnishment has also been described as a warning to a person having in his
possession, property or credits of the judgment debtor, not to pay the money or deliver
the property to the latter but rather to appear and answer the plaintiff's suits.
Q: How does the court acquire jurisdiction over the person of the garnishee? Do you
have to serve him with summons?
A: The SC said (in the Perla Compania case) NO. It is not necessary that summons be
served upon him. The Rules of Court themselves does not require that the garnishee
be served with summons or impleaded in the case to make him liable. The trial court
actually acquired jurisdiction over the garnishee when it was served with the writ of
garnishment, which is the equivalent of summons. The garnishee becomes a “virtual
party” to or a “forced intervenor” in the case and the trial court thereby acquires
jurisdiction to bind him to compliance with all orders and processes of the trial court with
a view to the complete satisfaction of the judgment of the court. That is the concept of
garnishment.
Q: How do you distinguish a normal preliminary attachment from garnishment, although
as I have said, garnishment could also be a variation of preliminary attachment or
execution ?
GARNISHMENT
PRELIMINARY ATTACHMENT
Normally directed to intangible properties
(e.g. credits, collectibles, bank accounts).
Refers to tangibles (e.g. a car or a house).
Involves three (3) parties, namely: the
creditor, debtor and garnishee.
Involves only two (2) parties, the creditor and
the debtor.
In
garnishment
by
preliminary
attachment, there is no actual seizure of
property but in garnishment by final
attachment there is already a seizure. In
other words, if I will garnish your account
in the bank, the money would still be
there. Nobody can withdraw from it. The
sheriff cannot get the money. It is in the
bank.
In attachment, which is even preliminary, there
is seizure of property and it will be placed under
custodia legis. There is actual seizure.
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Q: What is the nature of attachment proceedings?
A: In rem or at least quasi in rem.(Ching Liu & Co. vs. Mercado, 67 Phil. 409). Even if
the action is in personam, once there is an attachment, it is now converted into quasi in
rem because a lien is acquired over a specific property of the defendant.(Banco Español
vs. Palanca, 37 Phil. 921)
Q: What is the duration of the attachment?
A: It is indefinite. It continues until the case is terminated, until the account is fully paid
(assuming plaintiff wins), or until such time that the court will order it terminated or
dissolved in accordance with certain grounds under the law.(Chunaco vs. Alano, Jan.
23, 1952)
Q: What are the GROUNDS FOR ATTACHMENT?
a) In an action for the recovery of a specified amount of money or damages, other than
moral and exemplary, on a cause of action arising from law, contract, quasi-contract, delict
or quasi-delict against a party who is about to depart from the Philippines with intent to
defraud his creditors.
So, the defendant is about to run away, with intent to defraud his creditors. Now, what is
the change?
The old law says "in an action for recovery of money". Now, "for a specified amount of
money or damages". This supports the ruling of the Supreme Court that for a ground for
attachment to exist, the damages must be liquidated. So, if the damages are
unliquidated, there can be no attachment.
That is why the law is clearer now. In moral and exemplary damages, there could be
no preliminary attachment. Liquidated or actual, ok.
Q: What is the reason why in moral and exemplary damages there could be no
attachment?
A: Because the amount can’t be determined.
"On a cause of action arising from law, contract, quasi-contract, delict or quasi-delict
against a party who is about to depart from the Philippines with intent to defraud his
creditors." What is the old law? Cause of action arising from contract“ only as compared
to the new law, which includes all the five sources of obligation. That is why there is a
need to compare this new rule with the old rule.
b) In an action for money or property embezzled or fraudulently misapplied or converted to
his own use by a public officer, or an officer of a corporation, or an attorney, factor, broker,
agent, or clerk, in the course of his employment as such, or by any other person in a
fiduciary capacity, or for a willful violation of duty;
The main action here was based on the act of malversation or estafa.
Q: Suppose you file a criminal case but not able to reserve the civil action, can you file a
preliminary attachment?
A: YES. Under Rule 127, Section 2 – “At the commencement of a criminal action xxx
when the civil action for the recovery of civil liability arising from the offense charged is
not expressly waived or the right to institute such civil action separately is not reserved,
the offended party may have the property of the accused attached as security for the
satisfaction of any judgment that may be recovered from the accused xxx”.
c) In an action to recover possession of property unjustly or fraudulently taken, detained
or converted, when the property, or any part thereof, has been concealed, removed, or
disposed of to prevent its being found or taken by applicant or an authorized person;
The prior law speaks of personal property. Now, the word personal is removed.
“Property“ (may refer to real or personal) unjustly or fraudulently taken xxx to prevent its
being found or taken by applicant or an authorized person." That is inserted because
the authorized person may be the sheriff or an attorney-in-fact.
d) In an action against a party who has been guilty of a fraud in contracting the debt or
incurring the obligation upon which the action is brought, or in the performance thereof;
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The old rule does not contain "in the performance thereof." Before, it is "guilty of fraud
in contracting the debt." Meaning, the defendant exercised fraud from the very start of
the obligation, in contracting. So, it is fraud in contracting the debt under the old rule. It
is not fraud in the performance of an obligation.
Now, it is the same. Whether it is fraud in contracting the debt or in the performance of
an obligation, both are grounds for attachment. Whether it’s dolo causante or dolo
incidente. The law is broader.
Q: What does “in the performance thereof” mean?
A: Meaning, the person was in good faith when he borrowed it but in the performance of
the obligation, he contracted fraud. Ayaw na nyang magbayad!
e) In an action against a party who has removed or disposed of his property, or is about to
do so, with intent to defraud his creditors; or
Example: You file a case against B. Si B, dahan-dahan, he sold his assets. In this case,
you can attach.
f) In an action against a party who does not reside and is not found in the Philippines, or
on whom summons may be served by publication.
The party does not reside and is not found in the Philippines, or on whom summons may
be served by publication. You connect this with summons. You cannot sue by
publication when the action is in personam. So, you need to convert your action to in
rem or quasi in rem.
Q: How do you convert an action in personam to action in rem or quasi- in rem?
A: You attach the property. After attaching it, you now apply service of summons by
publication under Rule 14. That is exactly the situation contemplated in the case of
Magdalena Estate and all those modes of summons by publication.
Q: Are the grounds for attachment strictly construed?
A: Yes. The SC said they are. The grounds enumerated are exclusive. In other words,
what is not enumerated is not included. So, in case of doubt, the doubt is resolved in
favor of the attached debtor.
To borrow the language of the Supreme Court in the case of
SIEVERT vs. COURT OF APPEALS
December 22, 1988
HELD: "the requirements of the rule in the issuance of preliminary attachment must be
strictly and faithfully complied with in view of the nature of this provisional remedy
which exposes the debtor to humiliation and annoyance."
ABOITIZ vs. COTABATO BUS LINE CO.(CBLC)
June 17, 1981
FACTS: Defendant Cotabato Bus Line Company (CLBC) was on the verge of
bankruptcy. The creditor Aboitiz Marketing was afraid since CLBC has many debts.
Thus, they (Aboitiz) filed a case for preliminary attachment. Ground: the defendant is
already in the verge of insolvency. It was granted by the lower court.
ISSUE: W/N the attachment was valid.
HELD: It was not a ground for preliminary attachment. You cannot find it in the Rules.
So, attachment was illegal. Even if he is on the verge of insolvency but he is not
running away from his creditors, you cannot attach. You cite another ground.
Section 2. Issuance and contents of order.- An order of
attachment may be issued either ex parte or upon motion
with notice and hearing by the court in which the action
is pending, or by the Court of Appeals or the Supreme
Court, and must require the sheriff of the court to attach so
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much of the property in the Philippines of the party against
whom it is issued, not exempt from execution, as may
be sufficient to satisfy the applicant's demand, unless such
party makes deposit or gives a bond as hereinafter provided
in the amount equal to that fixed in the order, which may
be the amount sufficient to satisfy the applicant's demand
or the value of the property to be attached as stated by the
applicant, exclusive of costs. Several writs may be issued
at the same time to the sheriffs of the court of different
judicial regions. (2a)
Q: How is an order of attachment issued?
A: 1. ex parte
2. upon motion with notice and hearing.
Q: Can a writ of preliminary attachment be issued ex parte on the application of the
plaintiff without the defendant required to be heard? Meaning, upon the filing of the
complaint, you ask for attachment. Is this allowed?
A: YES.
1.) According to Filinvest v. Relova, 117 SCRA 420, the Supreme Court said:
“Nothing in the Rules makes notice and hearing indispensable and mandatory requisites
for the issuance of a writ of attachment. A writ of attachment may be issued ex parte”.
There are only two (2) requirements under the law, in Sections 2 and 3. The Affidavit and
Bond. There is no third requirement of a hearing.
The Relova Doctrine is now enshrined in section 2. So, it is now for the court to
determine whether to issue immediately or not yet. But it can issue ex parte based on
Sec. 2.
2.) Another reason why it is sometimes necessary to attach without an hearing is
because of the urgency of the situation specially if your ground is that the defendant is
departing from the country, or he is disposing of his assets. If a hearing will be
conducted, it will give the defendant more time to conceal or dispose of his assets.
Also, in the case of
CUARTERO vs. CA
212 SCRA 260
The SC said: No notice to the adverse party or hearing of the application
for preliminary attachment is required in as much as the time that the
hearing will take, will be enough to enable the defendant to abscond or
dispose of his property before a writ of attachment is issued. In such
a case, a hearing would render nugatory the purpose of the provisional
remedies.
Q: Which court can issue an order of attachment?
A: 1. Court where the action is pending,
2. Court of Appeals,
3. Supreme Court.
The CA and the SC can issue the writ anywhere in the Philippines.
Section 3. Affidavit and bond required.- An order of
attachment shall be granted only when it appears by the
affidavit of the applicant, or some other person who
personally knows the facts, that a sufficient cause of
action exists, that the case is one of those mentioned in
section 1 hereof, that there is no sufficient security for the
claim sought to be enforced by the action, and that the
amount due to the applicant, or the value of the property
the possession of which he is entitled to recover, is as
much as the sum for which the order is granted above all
legal counterclaims. The affidavit, and the bond required
by the next succeeding section, must be duly filed with the
court before the order issues. (3a)
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There are TWO REQUIREMENTS: AFFIDAVIT + BOND.
The affidavit requirement. There must be a sworn/verified application and there must be
an attachment bond to answer for the damages that the defendant may suffer.
Q: What are the allegations in the affidavit?
A: Section 3.
1. That a sufficient cause of action exists.
2. That the case is one of those mentioned in Section 1.
3. That there is no other sufficient security for the claim sought to be enforced.
This is an important allegation. Therefore, if an account is secured by a mortgage,
you cannot attach. You already have a security.
BAR Q: What are the instances where the creditor, plaintiff, can still apply for a
writ of preliminary attachment despite the fact that there is a mortgage to secure
the debt?
A: There are two (2) :
1) When the mortgage creditor abandons the mortgage and brings an ordinary
action to collect the principal loan or he simply applies for collection of sum of
money. He is now an unsecured creditor and there is a ground for attachment. The
creditor can now apply for attachment and he is not limited to attaching only the
mortgage property, any property. So, that is all he has to do.
2) Even if the creditor will not abandon the mortgage, if he will foreclose the mortgage
and in the action for foreclosure, there is a showing that the possible proceeds of
the mortgage property are not sufficient to pay the entire debt and in the meantime
the debtor is also trying to dispose of his assets.
4. That the amount due to the applicant, or the value of the property is as much as
the sum for which the order is granted.
Q: Are these grounds for attachment, the affidavit, a strict requirement ?
A: Yes, the SC said in the case of Jardine (Manila) v, CA, 171 SCRA 639, that the
authority to issue an attachment must be strictly construed. Failure to allege in the
affidavit the requisites required in the issuance of the writ of attachment renders the writ
fatally defective.
The affidavit is the foundation of the writ and if none be filed, or if filed but fails to set out
some facts required by law to be stated therein, there is no jurisdiction and the
proceedings are null and void.
Another illustration is in the case of
TING vs. VILLARIN
August 17, 1989
FACTS: There was a writ of attachment. The allegation of the plaintiff
says, "defendants are guilty of fraud in contracting the obligation, more
specifically illustrated by their violation if the Trust Receipt Agreement."
HELD: There is no ground for attachment because to say that there is
fraud is not enough. You must recite how the fraud as committed. It
cannot be issued on a general averment such as one ceremoniously
quoting a pertinent rule.
The need for a recitation of factual
circumstances to support the application becomes more compelling
considering that the ground relied upon is fraud. Fraud cannot be
presumed. In civil procedure, fraud must be made with particularity.
Section 4. Condition of applicant's bond.The party
applying for the order must thereafter give a bond
executed to the adverse party in the amount fixed by the
court in its order granting the issuance of the writ,
conditioned that the latter will pay all the costs which
may be adjudged to the adverse party and all damages
which he may sustain by reason of the attachment, if the
court shall finally adjudge that the applicant was not
entitled thereto. (4a)
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Let us go to Section 5. How to attach property, the procedure.
Section 5. Manner of attaching property.The sheriff
enforcing the writ shall without delay and with all
reasonable diligence attach, to await judgment and
execution in the action, only so much of the property in the
Philippines of the party against whom the writ is issued, not
exempt from execution, as may be sufficient to satisfy the
applicant's demand, unless the former makes a deposit
with the court from which the writ is issued, or gives a
counter-bond executed to the applicant, in an amount equal
to the bond fixed by the court in the order of attachment or
to the value of the property to be attached, exclusive of
costs. No levy on attachment pursuant to the writ issued
under section 2 hereof shall be enforced unless it is
preceded, or contemporaneously accompanied, by service of
summons,
together
with
a
copy
of
the
complaint, the application for attachment, the applicant's
affidavit and bond, and the order and writ of attachment,
on the defendant within the Philippines.
The requirement of prior or contemporaneous service of
summons shall not apply where the summons could not be
served personally or by substituted service despite diligent
efforts, or the defendant is a resident of the Philippines
temporarily absent therefrom, or the defendant is a nonresident of the Philippines, or the action is one in rem or
quasi in rem. (5a)
Take note of the last sentence of the first paragraph of Section 5. "xxx No levy on
attachment pursuant to the writ issued under section 2 hereof shall be enforced unless it
is preceded, or contemporaneously accompanied, by service of summons, together with
a copy of the complaint, the application for attachment, the applicant's affidavit and
bond, and the order and writ of attachment on the defendant within the Philippines."
Q: Did you notice that (underlined provisions)?
A: That is the Davao Light Doctrine. DLPC v. CA, 204 SCRA. The leading case on
attachment. It is now incorporated in the Rules of Court.
The attachment can be issued ex parte without even acquiring jurisdiction. The order of
the writ of attachment can be issued even before the court has acquired jurisdiction, but
to enforce it (the writ), summons must be served ahead or simultaneously. Otherwise,
the writ of attachment will not be valid. That is the ruling in Sievert and DLPC.
As stated in the case of Cuartero, the grounds for attachment involve 3 stages:
1. The court issues order granting application.
2. The writ of attachment is issued pursuant to the order granting the writ.
3. The writ is implemented.
For the first two stages, it is not necessary that jurisdiction over the person of the
defendant must be obtained.
However, once implementation commences (third stage), it is required that the court must
have acquired jurisdiction over the person of the defendant, for without such jurisdiction,
the court has no power or authority to act in any manner against the defendant. The
order issued by the court will not bind the defendant.
So, there must be a prior or contemporaneous service of summons, BUT as explained by
the SC in the 1994 case of
Zachry Company Int'l. v. CA
232 SCRA 329
The writ of attachment even if contemporaneously served to the
defendant with summons, does not bind the latter if the service of
summons is not valid.
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HELD: The validity then of the order granting the application for a writ of preliminary
attachment on 21 March 1990 and of the issuance of the writ of preliminary attachment
on 26 March 1990 is beyond dispute. However, the enforcement of the preliminary
attachment on 27 March 1990, although simultaneous with the service of the summons
and a copy of the complaint, did not bind Zachry because the service of the summons
was not validly made. When a foreign corporation has designated a person to receive
service of summons pursuant to the Corporation Code, that designation is exclusive
and service of summons on any other person is inefficacious. The valid service of
summons and a copy of the amended complaint was only made upon it on 24 April
1990, and it was only then that the trial court acquired jurisdiction over Zachry's
person. Accordingly, the levy on attachment made by the sheriff on 27 April 1990 was
invalid. However, the writ of preliminary attachment may be validly served anew.
So, it also requires that the service of summons be valid.
Now, let us go to the last paragraph of section 5, which is also new:
"The requirement of prior or contemporaneous service of summons shall not apply where
the summons could not be served personally or by substituted service despite diligent
efforts, or the defendant is a resident of the Philippines temporarily absent therefrom, or
the defendant is a non-resident of the Philippines, or the action is one in rem or quasi in
rem."
Q: Which will come first, the attachment or service of summons?
A: Under the Davao Light Doctrine, service of summons comes first. Because first of all,
jurisdiction over the person of defendant must be acquired before attachment. You must
bind the person first.
Two (2) years ago (1996), when this provision in the new rule was not yet in existence,
one student who is now a lawyer, asked me how to reconcile this provision with provision
on resident defendant on summons by publication because according to the SC, if the
action is in personam you convert in first to in rem after which you proceed with summons
by publication.
Q: How do you reconcile this, where in this section, summons must come first before
publication. In the case of Magdalena Estate, attachment first before summons by
publication, which is confirmed by section 1 [f] of Rule 57, one of the grounds for
attachment. I cannot serve summons by publication without attaching first. That is
paragraph [f] of section 1, which is the exact opposite of the Davao Light Ruling.
A: Obviously, that is the exception to the Davao Light Doctrine. That exception is now
provided under Section 5, last paragraph as read:
"The requirement of prior or contemporaneous service of summons shall not apply
where the summons could not be served personally or by substituted service despite
diligent efforts," so, that is by publication only. "Or the defendant is a resident of the
Philippines temporarily absent therefrom, or the defendant is a non-resident of the
Philippines, or the action is one in rem or quasi in rem."
In this provision, the purpose of summons by publication is not to acquire jurisdiction over
the person but only for the purpose of due process and that exception is now
incorporated in the Rules. That is not covered by the DLPC case.
Take Note: The GENERAL RULE is Service of Summons first before Attachment (Davao
Light case)
Exception: Section 5, last paragraph. There must first be an attachment before service of
summons.
Section 6. Sheriff's return.- After enforcing the writ, the
sheriff must likewise without delay make a return thereon
to the court from which the writ is sued, with a full
statement of his proceedings under the writ and a
complete inventory of the property attached, together with
any counter-bond given by the party against whom
attachment is issued, and serve copies thereof on the
applicant. (6a)
Sheriff makes a report after the implementation of the writ.
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Section 7.
Attachment of real and personal property;
recording thereof.- Real and personal property shall be
attached by the sheriff executing the writ in the following
manner:
(a) Real property, or growing crops thereon, or any interest
therein, standing upon the record of the registry of deeds
of the province in the name of the party against whom
attachment is issued, or not appearing at all upon such
records, or belonging to the party against whom the
attachment is issued and held by any other person, or
standing in the records of the registry of deeds in the name
of any other person, by filing with the registry of deeds a
copy of the order, together with a description of the
property attached, and a notice that it is attached, or
that such real property and any interest therein held by or
standing in the name of such other person are attached,
and by leaving a copy of such order, description, and
notice with the occupant of the property, if any, or with
such other person or his agent if found
within the
province. Where the property has been brought under the
operation of either the Land Registration Act or the
Property Registration Decree, the notice shall contain a
reference to the number of the certificate of title, the
volume and page in the registration book where the
certificate is registered, and the registered owner or
owners thereof.
The registrar of deeds must index attachments filed under
this section in the names of the applicant, the adverse
party, or the person by whom the property is held or in
whose name it stands in the record. If the attachment is
not claimed on the entire area of the land covered by the
certificate of title, a description sufficiently accurate for
the identification of the land or interest to be affected
shall be included in the registration of such attachment;
(b) Personal property capable of manual delivery, by taking
and safely keeping it in his custody, after issuing the
corresponding receipt therefor;
(c) Stocks or shares, or an interest in stock or shares, of any
corporation or company, by leaving with the president or
managing agent thereof, a copy of the writ, and a notice
stating that the stock or interest of the party against whom
the attachment is issued is attached in pursuance of such
writ;
(d) Debts and credits, including bank deposits, financial
interest, royalties, commissions and other personal
property not capable of manual delivery, by leaving with
the person owing such debts, or having in his possession or
under his control, such credits or other personal property,
or with his agent, a copy of the writ, and notice that the
debts owing by him to the party against whom attachment
is issued, and the credits and other personal property in
his possession, or
under
his control, belonging to
said party, are attached in pursuance of such writ;
(e) The interest of the party against whom attachment is
issued in property belonging to the estate of the decedent,
whether as heir, legatee, or devisee, by serving the
executor or administrator or other personal representative
of the decedent with a copy of the writ and notice that
said interest is attached.
A copy of said writ of
attachment and of said notice shall also be filed in the
office of the clerk of the court in which said estate is
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being settled and served upon the heir, legatee or devisee
concerned.
If the property sought to be attached is in custodia legis,
a copy of the writ of attachment shall be filed with the
proper court or quasi-judicial agency, and notice of the
attachment served upon the custodian of such property. (7a)
Q: With respect to the manner of serving the writ of attachment, how do you do it?
A: It depends on what you are going to attach.
If it is real property, i.e. parcel of land, refer to paragraph [a].
If it is a refrigerator, capable of manual delivery, refer to paragraph [b]. This is also the
manner of execution. How to levy on execution has the same procedure.
If it is shares of stocks, refer to paragraph [c].
There is one recent case regarding section 7[c]. The 1995 case of Phil. Export and
Import Corp. v. CA, 251 SCRA 257, which is also related to Corporation Code.
Q: When you attach shares of stock under Section 7, is it necessary to record or
annotate it in the corporation's stock and transfer book? Suppose there is no annotation,
is there a valid attachment?
A: The Court said: It is not necessary. Both the Rules of Court and the Corporation
Code does not require annotation in the corporation's stock and transfer book for the
attachment of shares of stock to be valid and binding on the corporation and third
parties. Attachment of shares of stock is not included in the term "transfer" as provided
in Section 63 of the Corporation Code. There is no transfer. You are just acquiring a
lien. The debtor is still the owner. There is no need for said annotation.
On Section 7(d)- Debts and credits, including bank deposits, financial interest, royalties,
commissions and other personal property not capable of manual delivery, by leaving
with the person owing such debts, or having in his possession or under his control, such
credits or other personal property, or with his agent, a copy of the writ, and notice that the
debts owing by him to the party against whom attachment is issued, and the credits
and other personal property in his possession, or under his control, belonging to said
party, are attached in pursuance of such writ.
This is what we call GARNISHMENT. The new rule includes bank deposits, financial
interest, royalties, commissions. In the case of
DE LA VICTORIA vs. BURGOS
245 SCRA 374 (1995)
Q: Can you garnish the funds of the government?
A: No, it is prohibited.
FACTS: In this case, what was garnished was the salary check of an
assistant prosecutor. Maybe he does not want to pay his debt. Since his
salary is taken from the DOJ, they have checks which will be given to the
prosecutor to distribute. In this case, the check was in the hands of the
City Prosecutor. It was garnished. “Do not give it to the assistant
prosecutor because he has a debt”.
ISSUE: Was there a valid attachment?
HELD: No. In as much as the said check was not yet delivered to the
payee (prosecutor), it did not belong to him and it still had the character
of public funds. And as a necessary consequence, the check cannot be
garnished.
The rationale behind this doctrine is the obvious consideration of
public policy. Public funds cannot be garnished. It is only after the check
has been given to the payee that you can garnish it.
Q: Can I attach your share in the estate of the deceased although no specific property
yet?
A: Yes. Under Section 7(e).You just serve the executor or administrator a copy of the writ
and notice .The same shall also be filed in the office of the Clerk of Court where the
estate is being settled.
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Q: Can property which is already attached be attached all over again?
A: Yes. Last paragraph of section 7. "If the property sought to be attached is in custodia
legis, a copy of the writ of attachment shall be filed with the proper court or quasi-judicial
agency, and notice of the attachment served upon the custodian of such property."
So, a property attached may be attached again but you must inform the court which
already attached it.
Q: What is the amendment under the new Rules?
A: "xxx filed with the proper court or quasi-judicial agency xxx". Thus, it may
be attached not only by the court but also by NLRC, etc. You can attach it but you must
inform them of the attachment of the property already attached.
Section 8. Effect of attachment of debts, credits and all
other similar personal property.- All persons having in their
possession or under their control any credits or other
similar personal property belonging to the party against
whom attachment is issued, or owing any debts to him, at
the time of service upon them of the copy of the writ of
attachment and notice as provided in the last preceding
section, shall be liable to the applicant for the amount of
such credits, debts or other similar personal property,
until the attachment is discharged, or any judgment
recovered by him is satisfied, unless such personal property
is delivered or transferred, or such debts are paid, to the
clerk, sheriff, or other proper officer of the court issuing
the attachment. (8a)
Section 9. Effect of attachment of interest in property
belonging to the estate of a decedent.The attachment
of the interest of an heir, legatee, or devisee in the
property belonging to the estate of a decedent shall not
impair the powers of the executor, administrator, or other
personal representative of the decedent over such property
for the purpose of administration.
Such personal
representative, however, shall report the attachment to the
court when any petition for distribution is filed, and in the
order made upon such petition, distribution may be
awarded to such heir, legatee, or devotee, but the property
attached shall be ordered delivered to the sheriff making
the levy, subject to the claim of such heir, legatee, or
devisee, or any person claiming under him.
Section 10.
Examination of party whose property is
attached and persons indebted to him or controlling his
property; delivery of property to sheriff.- Any person owing
debts to the party whose property is attached or having
in his possession or under his control any credit or other
personal property belonging to such party may be required
to attend before the court in which the action is pending, or
before a commissioner appointed by the court, and be
examined on oath respecting the same. The party whose
property is attached may also be required to attend for the
purpose of giving information respecting his property, and
may be examined on oath. The court may, after such
examination, order personal property capable of manual
delivery belonging to him, in the possession of the person so
required to attend before the court, to the delivered to the
clerk of the court or sheriff on such terms as may be just,
having reference to any lien thereon or claim against the
same, to await the judgment in the action. (10a)
You can be required to appear before the court for further questioning. So, the rules
under Rule 39, Sections 36 & 37 with respect to the examination of judgment obligor is
available also in preliminary attachment.
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Section 11. When attached property may be sold after levy
on attachment and before entry of judgment.- Whenever
it shall be made to appear to the court in which the action
is pending, upon hearing with notice to both parties, that
the property attached is perishable, or that the interests of
all the parties to the action will be subserved by the sale
thereof, the court may order such property to be sold at
public auction in such manner as it may direct, and the
proceeds of such sale to be deposited in court to abide the
judgment in the action. (11a)
Normally, in Preliminary Attachment, property is not sold. It is just a security.
Exception: Section 11.
1. If it is perishable. E.g. rice
2. If the interest of the parties to the action will be subserved by the sale thereof.
E.g. A piece of land. Somebody wants to buy it five times higher than the assessed
value. Makakabenefit ang parties!
Q: What are the remedies of a defendant whose property has been attached? Is there a
way of helping him?
A: Yes. Look at Sections 12 and 13.
Section 12. Discharge of attachment upon giving counterbond.- After a writ of attachment has been enforced, the
party whose property haw been attached, or the person
appearing on his befalf, may move for the discharge of the
attachment wholly or in part on the security given. The
court shall, after due notice and hearing, order the
discharge of the attachment if the movant makes a cash
deposit, or files a counter-bond executed tot he attaching
party with the clerk of the court where the application is
made, in an amount equal to that fixed by the court in the
order of attachment, exclusive of costs.
But if the
attachment is sought to be discharged with respect to a
particular property, the counter- bond shall be equal to the
value of that property as determined by the court. In
either case, the cash deposit or the counter- bond shall
secure the payment of any judgment that the attaching
party may recover in the action. A notice of the deposit
shall forthwith be served on the attaching party. Upon the
discharge of an attachment in accordance with the
provisions of this section, the property attached, or the
proceeds of any sale thereof, shall be delivered to the party
making the deposit or giving the counter-bond, or to the
person appearing on his behalf, the deposit or counter-bond
aforesaid standing in place of the property so released.
Should such counter-bond for any reason be found to be or
become insufficient, and the party furnishing the same fail
to file an additional counter- bond, the attaching party
may apply for a new order of attachment.
Section 13.
Discharge of attachment on other grounds.The party whose property has been ordered attached may
file a motion with the court in which the action is pending,
before or after levy or even after the release of the attached
property, for an order to set aside or discharge the
attachment on the ground that the same was improperly or
irregularly issued or enforced, or that the bond is
insufficient. If the attachment is excessive, the discharge
shall be limited to the excess. If the motion be made on
affidavits on the part of the movant but not otherwise, the
attaching party may oppose the motion by counteraffidavits or other evidence in addition to that on which
the attachment was made.
After due notice and
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hearing, the court shall order the setting aside
or
the corresponding discharge of the attachment of it
appears that it was improperly or irregularly issued or
enforced, or that the bond is insufficient, or that the
attachment is excessive, and the defect is not cured
forthwith. (13a)
REMEDIES:
First remedy is for the defendant to put up a counter-bond to dissolve the attachment.
So, the counterbond will take the place of the attached property. Or, a cash deposit
equal to the claim of the plaintiff.
Second remedy is Section 13. The defendant will file a motion to discharge the
attachment.
Grounds:
1. that it was improperly or irregularly issued.
2. that it was improperly or irregularly enforced.
3. that the bond of the plaintiff is insufficient.
Q: What is the amendment?
A: The phrase, or enforced. Before, it was improperly or irregularly issued. Now, it is
with "or enforced, or that the bond is insufficient." That is another ground to move to
discharge an attachment.
Let us go to Section 12.
Q: Is there such a thing as partial discharge ?
For example, I will attach five (5) parcels of land. The defendant will say, because
somebody wants to buy one of them, "I am moving to discharge only one of them and I
will put up a counterbond equal to the value of one only." In effect, he is asking for a
partial discharge based on a partial counterbond. Is this allowed ?
A: Yes, it is now allowed in the new law, which is not found in the old law. Look at
section 12, 3rd sentence, starting with the word "but": "But if the attachment is sought to
be discharged with respect to a particular property, the counter-bond shall be equal to the
value of that property as determined by the court."
So, it is allowed. Like an installment, partial discharge by the partial counter-bond.
Before, it was all or nothing.
Q: When a defendant puts up a counter-bond under section 12, is the attachment earlier
made automatically discharged?
A: No, according to the case of Belisle Finance vs. State Investment House, (151
SCRA 360) it is only after hearing and the judge has ordered the discharged of the
attachment can it be valid. There must be an order, mere filing would not suffice.
Q: Can a person file a counter-bond and at the same time move to discharge?
Meaning, I will file a counter-bond to discharge under section12 and then I will move to
discharge under section 13. Can you do that, avail of the two (2) sections?
A: Well, if you will follow the ruling in the case of
CALDERON vs. IAC
155 SCRA 531
The answer is YES. The Court said: Well, the defendant would like to
question the legality of the attachment but he is in a hurry, because there
would be a hearing, which would delay him. So, what should he do?
He can file a counter-bond without waiving his right to hearing or he will
file a counter-bond with respect to only one property and continue the
hearing under Section 13 with respect to the other property. You do not
waive Section 13 because you applied Section 12.
BUT there was this contrary ruling in the case of
MINDANAO SAVINGS AND LOAN ASSOCIATION vs. CA
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172 SCRA 480
HELD: Objection to the impropriety or irregularity of writ of attachment may no longer be
invoked once a counter-bond is filed. By filing a counter-bond under Section 12, he may
not file another motion under Section 13 to quash the writ for impropriety or irregularity.
Why? The writ had already been quashed by filing a counter-bond, hence, another
motion to quash would be pointless. That is also logical.
But it would seem that there is something wrong about the case especially where there is
only a partial counter-bond under Section 13.
Let us read the first sentence of Section 13. "The party whose property has been
ordered attached may file a motion with the court in which the action is pending,
before or after levy or even after the release of the attached property, for an
order to set aside or discharge the attachment on the ground that the same was
improperly or irregularly issued or enforced, or that the bond is insufficient."
Did you notice that phrase? (underlined one)
That is not present under the old law. You can file a motion to the court to discharge
attachment before or after levy or even after they released the attached property.
So, why will I file a motion to discharge it when it is already released? Obviously, it must
have been released by virtue of a counter-bond. In other words, this amendment seems
to support the CALDERON DOCTRINE that you can avail of the discharge under Section
13 and have the property discharged without waiving your right to question the
validity/correctness of attachment. These are the phrases found in the new law not
found in the old law.
Q: Who has the burden of proof? Is it the burden of the defendant to prove that the
attachment is improper or irregular, or is it the burden on the part of the plaintiff to show
that the attachment is proper?
A: Based on decided cases, it is the plaintiff who has the burden to prove the regularity
on the challenge made by the defendant. In the case of FILINVEST where the
attachment was on the ground of fraud - that the defendant committed fraud in
contracting the obligation. It is not the duty of the defendant to prove the lack of fraud. It
should be the plaintiff who will prove the regularity because fraud is not presumed.
Same message in the case of
BENITEZ VS. IAC
154 SCRA 41
HELD: For the purpose of securing the attachment, the affidavit of the
plaintiff is sufficient, but for purposes of determining whether the
allegations therein are true or not, there must be a hearing.
The denial of the writ of preliminary attachment under Section 13 without
conducting a hearing and requiring substantiation of the allegation of
fraud and the allegation is tantamount to grave abuse of discretion on
the part of the judge.
Meaning, affidavit supporting the application for issuance of preliminary attachment may
be sufficient to justify the issuance of the preliminary attachment writ. But it cannot be
considered as proof of the allegation therein.
So, these are merely conclusions of law, not statement of facts.
A writ of attachment may be discharged without filing a cash bond or counter-bond
pursuant to section 13. However, there is also a limitation which is laid down in the
case of MINDANAO SAVINGS and also in the case of CUARTERO vs. CA, and
the situation is something like this:
Suppose, I am the defendant and I will move to discharge the attachment because it was
improperly issued. Why? Because the plaintiff has no cause of action against me.
Meaning, if he has no cause of action, then the case is dismissible. and if the case is
dismissible, then there is no basis for a writ of preliminary attachment.
Q: Should the court act on that kind of motion?
A: The SC said: You cannot! Kasi, yung ground mo na " there is no cause of action" is
now going to the merits of the case if you will require the plaintiff to prove his cause of
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action. It is no longer a hearing on a motion to discharge an attachment but is already a
trial on the main action.
The SC said in MINDANAO SAVINGS and in CUARTERO : “An attachment may not be
resolved by showing of its irregular of improper issuance which is upon a ground which
at the same time the adverse cause of action in the main case. Since an anomalous
situation will arise when the issues in the main case will be ventilated and resolved in a
mere hearing of a motion.”
OLIB VS. PASTORAL
188 SCRA 692
Suppose,the main action has already been decided by the court and
appealed to the CA. Tapos merong nang attachment. At the same time,
the defendant would like to discharge the attachment either under
Sections 13 or 12.
Q: Where should the defendant file the motion to discharge the writ, RTC
or CA?
SC: It is the CA and no longer the RTC where the main action is
appealed. The attachment which may have been issued as an incident of
the action is also considered appealed and so removed from the
jurisdiction of the RTC.
In the case of:
CHEMICAL EXPORT AND IMPORT VS. IAC
FACTS: Plaintiff filed a case against defendant. And the plaintiff secured
a preliminary attachment. So the defendant's property is attached. So,
the case is pending while there was an attachment. While the case is
pending, they entered into compromise agreement and therefore there
was judgment based on the compromise agreement.
ISSUE: Is the attachment lien over the property of the defendant
dissolved or vacated because of the compromise agreement?
HELD: It is not deemed vacated. An attachment lien continues until the
debt is paid or until judgment is satisfied or the attachment is discharged
or vacated in the same manner provided by law. The parties to the
compromise agreement would not be deprived of the protection provided
by the attachment lien especially in an instance where one remedy is
bases on the obligation of the contract or agreement.
If we were to rule otherwise, you would in effect create a back door by
which debtors can easily escape its creditors. Consequently, we would
be faced with an anomalous situation where a debtor in order to have
time in order to dispose of his property would enter into a compromise
agreement in which he has no intention of honoring in the first place -the purpose of provisional remedy or attachment would does be lost. It
would become by analogy a toothless tiger.
So, let us wait for the judgment to be satisfied until attachment is discharged.
Q: Is there partial discharge of attachment, where I will move to discharge not the entire
property but only a certain portion ?
A: That is allowed under Section 13 which is not found under the Old Law.
This is found in the second sentence, " If the attachment is excessive, the discharge
shall be limited to the excess."
Example, my obligation is one million and the attachment is 1.5 million. So, I can ask for
partial discharge of P500, 000. Before, under the Old Law it is not allowed. But now, it is
allowed.
Section 14. Proceedings where property claimed by third
person - If the property attached is claimed by
any
person other than the party against whom attachment had
been issued or his agent, and such person makes an
affidavit of his title thereto, or right to the possession
thereof, stating the grounds of such right or title, and
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serves such affidavit upon the sheriff while the latter has
possession of the attached property, and a copy thereof
upon the attaching party, the sheriff shall not be bound to
keep the property under attachment, unless the attaching
party or his agent, on demand of the sheriff, shall file a
bond approved by the court to indemnify the third-party
claimant in a sum not less than the value of the property
levied upon. In case of disagreement as to such value, the
same shall be decided by the court issuing the writ of
attachment. No claim for damages for the taking or keeping
of the property may be enforced against the bond unless the
action therefor is filed within 120 days from the date of
filing of the bond.
The sheriff shall not be liable for damages for the taking or
keeping of such property to any such third-party claimant,
if such bond shall be filed. Nothing herein contained shall
prevent such claimant or any third person from vindicating
his claim to the property or prevent the attaching party
from claiming damages against a third-party claimant who
filed a frivolous or plainly spurious claim, in the same or
separate action.
When the writ of attachment is issued in favor of the
Republic of the Philippines, or
any
officer duly
representing it, the filing of such bond shall not be
required ,and in case the sheriff is sued for damages as a
result of the attachment, he shall be represented by the
Solicitor General, and if held liable therefor, the actual
damage adjudged by the court shall be paid by the National
Treasurer out of the funds to be appropriated for the
purpose.
Section 14 is almost a word for word reproduction of Rule 39, Section 16 which is
Terceria or third party claim. In Rule 39, the property levied belongs to a third person
who is not the defendant of the case, so the remedy is TERCERIA.
Ito naman (Section 14), the property attached by way of preliminary writ of attachment
does not belong to the defendant. So, you can file a third-party claim.
Q: Can the 3rd-party question the attachment in the same case? Can he file his
objection, ask for the discharge of the attached property in the same case where he is not
a party ?
A: YES, that is allowed!
That is a ground for intervention, remember?
Q: What is the fourth ground for intervention?
A: That the intervenor is so situated that he is adversely affected by the property in the
custody of the court. So, it is a ground for intervention that the property attached is not
owned by the defendant.
Q: Suppose there is already a writ of execution under Rule 39-- there is already a
decision and writ of execution and your property is erroneously levied in the same
situation, can you question the unlawful levy under the same case?
A: As a general rule, NO! Because there could be no intervention---since there is
already a judgment. The remedy is a separate action.
In the former example, intervention is proper because there is yet no judgment. But in
the latter--- there is a judgment already. Kung meron nang judgment, wala nang
intervention.
REMEDIES OF THIRD PERSONS:
1. File an independent action under Section 14
2. File a 3rd-party claim.
3. File a motion for intervention.
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Section 15.Satisfaction of judgment out of property attached;
return of the sheriff. - If judgment be recovered by the
attaching party and execution issue thereon, the sheriff may
cause the judgment to be satisfied out of the property
attached, if it be sufficient for that purpose in the following
manner:
(a)
By paying to the judgment obligee the proceeds of all
sales of perishable or other property sold in pursuance of
the order of the court, or so much as shall be necessary
to judgment;
(b)
If any balance remains due, by selling so much of the
property, real or personal, as may be necessary to
satisfy the balance, if enough for that purpose remain in
the sheriff's hands or in those of the clerk of the court;
(c)
by collection from all the persons having in their
possessions credits belonging to the judgment obligor, or
owing debts to the latter at the time of the attachment
of such credits debts, the amount of such credits and
debts as determined by the court in the action stated in
the judgment, and paying the proceeds of such
collection over to the judgment obligee.
The sheriff shall forthwith make a return in writing to the
court of his proceeding under this section and furnish the
parties with copies thereof.
Well, there is no problem if a property is attached and when the defendant loses,
wala ng problemang maghanap pa ng property to levy because under Section
15, the judgment can be satisfied out of the property attached. So, it is more of a
security.
Section 16. Balance due collected upon an execution;
excess delivered to judgment obligor. - If after realizing
upon all the property attached, including the proceeds of
any debts or credits collected, and applying the proceeds
to the satisfaction of the judgment, less the expenses of
proceeding upon the judgment, any balance shall remain
due, the sheriff must proceed to collect such balance as
upon ordinary execution. Whenever the judgment shall have
been paid, the sheriff upon
reasonable demand, must
return to the judgment obligor the attached property
remaining in his hands, and any proceeds of the sale of
property attached not applied to the judgment.
Section 17. Recovery upon the counter-bond. - When the
judgment has become executory, the surety or sureties on
any counter-bond given pursuant to the provisions of this
Rule to secure the payment of the judgment shall become
charged counter-bond and bound to pay the judgment
obligee upon demand the amount due under the judgment,
which amount may be recovered from such surety or
sureties after notice and summary hearing in the same
action.
Now, suppose the property is released from attachment because of the counter bond
under section 17 the plaintiff will have to enforce the judgment against the sureties of
the counter bond. Did you notice that under section 17, it starts with a phrase: " When
the judgment has become executory, the surety or sureties will be held liable for the
counter bond."
Q: Suppose, the judgment is not yet final and executory and there is no execution
pending appeal under Rule 39,Section 2. Is the surety of the counter-bond liable for the
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judgment in an execution pending appeal ?
A: Under the present Rule, NO MORE! It can be applied to execution pending appeal.
This is the reversal of the case PHILIPPINE BRITISH ASSURANCE
CORPORATION vs. IAC, 15O SCRA 530. In this case, the SC said: A counter bond
can be liable for any judgment whether final or executory or execution pending appeal
because Section 17 does not distinguish hat kind of judgment.
But now, iba na ang ruling---dahil ang wording ngayon "when the judgment has
become executory".
So, the ruling in PHIL. BRITISH ASSURANCE is deemed abandoned.
Section 18. Disposition of money deposited. -Where the
party against whom attachment had been issued has
deposited money instead of giving counter-bond, it shall be
applied under the direction of the court to the satisfaction
of any judgment rendered in favor of the attaching party,
and after satisfying the judgment , the balance shall be
refunded to the depositor or his assignee. If the judgment is
in favor of the party against whom attachment was
issued, the whole sum deposited must be refunded to
him or his assignee.
Section 19. Disposition of attached property where
judgment is for party against whom attachment was
issued. - If judgment be rendered against the attaching
party, all the proceeds of sales and money collected or
received by the sheriff, under the order of attachment, and
all property attached remaining in any such officer's
hands, shall be delivered to the party against whom
attachment was issued, and the order of attachment
discharged.
Under this Section (19), when the judgment for the defendant-- so nanalo ang defendant,
what happened to the attached property? Well, of course, it will be ordered released.
Q: Is the release automatic or must there be an order of release ?
A: There must be an order for the release. This was taken from the case of OLIB vs.
PASTORAL. The order of attachment is not deemed dissolved upon the rendition of
judgment upon the defendant. The order of attachment is deemed discharged when the
judgment becomes final and executory and which is not deemed on appeal.
Section 20. Claim for damages on account of improper,
irregular or excessive attachment. - An application for
damages on account of improper, irregular or excessive
attachment must be filed before the trial or before appeal
is perfected or before the judgment becomes executory, to
the attaching party and his surety or sureties, setting forth
the facts showing his right to damages and the amount
thereof. Such damages may be awarded only after proper
hearing and shall be included in the judgment on the same
case.
If the judgment of the appellate court be favorable to the
party against whom the attachment was issued, he must
claim damages sustained during of the appeal by filing an
application in the appellate court to the party in whose
favor the attachment was issued or his surety or sureties,
before the judgment of the appellate court becomes
executory. The appellate court may allow the application to
be heard and decided by the trial court.
Nothing herein contained shall prevent the party against
whom the attachment was issued from recovering in the
same action the damages awarded to him from any property
Property of
LAKAS ATENISTA
PROVISIONAL REMEDIES (Rule 57)
20
of the attaching party not exempt from execution should the
bond or deposit given by the latter be insufficient or fail to
fully satisfy the award.
Q: Is it possible for the plaintiff to win the case and for the defendant to win the case for
the counterclaim? Can the plaintiff win the case but still liable for unlawful attachment?
A: YES! With more reason if the plaintiff lost the case for he will now answer for all the
damages suffered by the defendant while the attachment was going on. That is why
there could be an application for improper, irregular or excessive attachment.
Take note that under the new case--- the attachment was improper, irregular or
excessive.
Now, do not confuse Section 20 with Section 17. Section 17 is recovery upon the
counter bond---here the defendant lost the case. In Section 20, it is the claim for
damages against the attachment but also claimed by the defendant.
Q: When are you going to file your claim for damages?
A: Before the trial or before the appeal is perfected or before the judgment becomes
final and executory. Ibig sabihin niyan, you must file your claim for damages in the
same case. Notify the surety.
Q: Can you file another case for damages ?
A: NO, it is prohibited. It must be claimed and resolved in the same action.
Q: How do you file a claim for damages where the attachment was filed before trial?
A: Simple, by way of counterclaim by the defendant in his answer.
Q: Is the attachment bond posted by the surety liable when actually according to the
surety the plaintiff stops paying his premium years ago?
A: Yes, a bond is not deemed extinguished by reason alone of such non-payment.
Otherwise, the party can diminish his liability by simply not paying the bond.
CALDERON vs. IAC
155 SCRA 531
FACTS: The defendant posted a counter-bond and then later on the defendant is
running against the attachment bond. I put a counter bond but I'm still holding you liable
for the attachment bond. Sabi ng Surety Company, “NO MORE! The attachment bond
was deemed automatically dissolved when you posted your counter bond---so walang
attachment bond--- so ano pa ang liability namin?”
HELD: You are wrong again. What is dissolved is the attachment and not the bond. The
bond continues to be liable until the end of the case. What is dissolved or discharged is
the writ of attachment not the attachment bond. It could be used to be held liable. The
liability of the surety in proper or regular attachment subsists despite the counter bond
posted by the defendant.
Now, this last paragraph of Section 20 is not found in the Old Law--Q: If the attachment bond is not enough---can you hold the plaintiff liable for his personal
property?
A: Yes. That is allowed and it is to be recovered in the same action. There is no need of
filing another case against him. If the attachment bond is not sufficient, you can run
against the property of the attached property not exempt from execution and you
recover them in the same action.
-oOo-
Property of
LAKAS ATENISTA