Case Summary (G.R. No. 144740)
Factual Background
Reynaldo Anzures filed a criminal complaint against Teresita Villaluz for violation of Batas Pambansa Blg. 22. The case was docketed before the RTC Manila Branch 9. An ex-parte motion for preliminary attachment was granted, leading to the posting of an attachment bond by Anzures and the eventual attachment of Villaluz's properties. Subsequently, Villaluz was acquitted criminally but held civilly liable to pay Anzures ₱2,123,400 plus attorney’s fees and costs. The Court of Appeals affirmed the civil liability, and the case was appealed to the Supreme Court.
Posting of Counter-Bond and Discharge of Attachment
During the pendency of the Supreme Court appeal, Villaluz posted a counter-attachment bond amounting to ₱2,500,000, issued by Security Pacific Assurance Corporation (the petitioner). Villaluz also filed a motion for discharge of attachment based on this bond. The Supreme Court, in its decision, affirmed the Court of Appeals ruling on civil liability and recognized that the counter-bond was posted during the appeal process.
Enforcement of Judgment and Execution Proceedings
Following the finality of the Supreme Court judgment, execution was initiated. The sheriff attempted to serve writs on Villaluz but could not locate her residence. Consequently, the sheriff directed garnishment proceedings toward the petitioner based on the counter-bond posted. The petitioner refused to honor the bond claiming it was not approved by the Supreme Court and that no court order discharged the attachment, thus denying liability.
Trial Court and Court of Appeals Rulings
The RTC, under Judge Amelia Tria-Infante, issued an order allowing execution on the counter-bond, which the petitioner challenged before the Court of Appeals through a petition for certiorari. The Court of Appeals found no grave abuse of discretion in the RTC's order and dismissed the petition. The petitioner’s motion for reconsideration was likewise denied.
Issues Presented
- Whether the Court of Appeals erred in affirming the order allowing execution on the counter-bond.
- Whether the attachment on Villaluz’s property was discharged without court approval of the counter-bond.
- Whether the attachment was discharged by the mere filing of the counter-bond.
Petitioner’s Argument
The petitioner asserted that the writ of attachment was never discharged since there was no formal court order approving the counter-bond or discharging the attachment. Thus, it contended that its liability under the bond had not yet matured. Moreover, petitioner argued that the suretyship contract merely waived the right of excussion and did not make it directly liable to private respondents outside the principal obligation of Villaluz.
Private Respondents’ Argument
The private respondents contended that the mere filing of the counter-bond itself ipso facto discharged the attachment, making petitioner liable for any adverse judgment. They argued that by accepting the premium and issuing the bond, petitioner entered into a surety contract guaranteeing payment of any judgment against Villaluz.
Supreme Court’s Analysis on Suretyship and Liability
The Court ruled that the counter-bond posted by Villaluz, secured by petitioner, was a suretyship contract wherein the surety (petitioner) was solidarily bound with the principal obligor (Villaluz). The nature of suretyship entails that the surety’s obligation is secondary but direct, primary, and absolute with respect to the creditor, and the surety becomes liable for the debtor’s obligation without needing to first exhaust the debtor’s assets under the right of excussion.
Legal Basis for Discharge of Attachment by Counter-Bond
Section 12, Rule 57 of the 1997 Rules of Civil Procedure stipulates two ways to discharge attachment: (1) posting security by the affected party or person appearing on their behalf, or (2) showing the writ of attachment was improperly issued. The Court clarified that the posting of a sufficient counter-bond, which in this case was duly filed and accepted, effectually discharged the attachment. The Court highlighted that the Supreme Court, in prior resolutions during the pendency of the appeal, permitted the filing of the counter-bond and treated it as effective for the discharge of attachment without requiring a separate order on discharge.
Precedential Citations on Counter-Bonds and Suretyship
The Court reaffirmed past decisions (e.g., Tijam v. Sibonghanoy, Vanguard Assurance Corp. v. Court of Appeals, Imperial Insurance, Inc. v. De Los Angeles, and Philippine British Assurance Co., Inc. v. Intermediate Appellate Court) which declare that:
- Liability on counter-bonds attaches automatically once judgment against the principal obligor becomes executory and unsatisfied.
- Counter-bonds serve as replacements for attached properties and secure payment of any judgment the attaching party may recover.
- The surety’s obligation is solidary and may be enforced immediately, without the necessity of first exhausting all remedies against the principal debtor.
Rejection of Petitioner’s Claims
The Court rejected the petitioner’s claim that the bond’s liability was conditional upon a court’s approval for discharge of attachment. It held that the approved counter-bond filed during the appeal process satisfied the lawful requisites for discharge
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Background and Factual Context
- The case originates from a criminal complaint filed on 26 August 1988 by Reynaldo Anzures against Teresita Villaluz for violation of Batas Pambansa Blg. 22, docketed as Criminal Case No. 89-69257 before the Regional Trial Court (RTC), Branch 9, Manila.
- Reynaldo Anzures filed an Ex-Parte Motion for Preliminary Attachment on 6 March 1989, seeking to attach Villaluz’s properties pending trial.
- On 3 July 1989, the RTC ordered the issuance of a writ of preliminary attachment, conditioned upon posting a bond fixed at P2,123,400.00, which was posted and approved.
- The sheriff effected the attachment of Villaluz’s properties, duly annotating such on the certificates of title.
- On 25 May 1990, the RTC acquitted Villaluz of the criminal charge but held her civilly liable to pay P2,123,400.00 plus interests, attorney's fees, and costs to Anzures.
- Villaluz appealed the civil judgment; the Court of Appeals affirmed the RTC decision on 30 April 1992.
- The case was elevated to the Supreme Court (G.R. No. 106214), during which Villaluz posted a counter-bond amounting to P2,500,000.00 issued by petitioner Security Pacific Assurance Corporation.
- Villaluz then filed an Urgent Motion to Discharge Attachment on the same date of the counter-bond.
- On 5 September 1997, the Supreme Court affirmed the Court of Appeals decision in toto, finalizing the judgment.
- Anzures moved for execution; on 7 May 1999, the RTC issued a writ of execution.
- Sheriff Buazon attempted to serve the writ on Villaluz but was unsuccessful due to her change of residence; a Notice of Garnishment was sent to Security Pacific Assurance Corporation as the counter-bond surety.
- Petitioner refused to pay on the counter-bond; the private prosecutor moved for the continuation of garnishment, which the trial court granted on 31 March 2000.
- Petitioner filed a petition for certiorari with the Court of Appeals to Nullify the garnishment order, which was denied; the present petition for review on certiorari challenges these rulings.
Procedural History and Legal Motions
- The trial court’s order dated 31 March 2000 permitted garnishment against petitioner under the counter-bond posted by Villaluz.
- Petitioner challenged this order before the Court of Appeals on grounds of alleged grave abuse of discretion, asserting the bond was not approved by the Supreme Court, and that the condition for its liability had not occurred.
- The Court of Appeals affirmed the trial court’s order, finding no grave abuse of discretion.
- Petitioner’s Motion for Reconsideration was denied.
- Petitioner then filed a Rule 45 petition for review on certiorari with the Supreme Court with an urgent application for preliminary injunction or temporary restraining order.
- A Memorandum of Understanding (MOU) was executed in January 2001 between petitioner and the Anzures spouses acknowledging partial payments under the garnishment and allowing installments for the balance of the counter-bond amount.
- The parties agreed that the execution and garnishment would continue, pending final adjudication, with a proviso that the MOU does not waive appellate rights or affect the pending Supreme Court review.
Issues Presented for Resolution
- Main Issue: Whether the Court of Appeals committed reversible error in affirming the trial court’s order allowing execution on the counter-bond issued by petitioner.
- Corollary Issues:
- Whether the Court of Appeals correctly ruled that the attachment on Villaluz’s property was discharged despite