After procuring the dissolution of the attachment by filing a counterbond, the attachment debtor is not precluded from

moving for the discharge of the attachment on the ground of improper issuance (Rule 57)
Mindanao Savings & Loan Association v. Court of Appeals
G.R. 84481
GRIOAQUINO, J.

CASE SUMMARY
This case illustrates the exception to the general rule that the attachment debtor is not precluded from moving for the
discharge of the attachment on the ground of improper attachment. The Mercados (herein private respondents) filed with the
RTC of Davao City a complaint against D.S. Homes, Inc. and its directors for rescission of contract plus damages with a prayer
for preliminary attachment. Judge Dinopol of the RTC granted ex parte the application for attachment. The Mercados amended
their complaint to include herein petitioners Davao Savings & Loan Association (later renamed to Mindanao Savings & Loan
Association or MSLA) and Francisco Villamor, and to drop one of the directors. Judge Dinopol thus issued ex parte an
amended order of attachment to reflect the said amendments. D.S. Homes et.al., MSLA, and Villamor filed separate motions to
quash the writ of attachment (WOA) which were denied. D.S. Homes et. al. thus offered a counterbond which the lower court
accepted resulting in the lifting of the WOA. MSLA and Villamor then filed with the CA a petition for certiorari to annul the order
of attachment and the denial of their MTQ the same alleging that the RTC acted in excess of its jurisdiction. The CA denied
such petition, holding that in this case, where the grounds invoked for the issuance of the writ form the core of the complaint and
therefore a trial on the merits is necessary, objections against the writ may no longer be invoked once a counterbond is
filed for its lifting or dissolution.

DOCTRINES

There are two ways to discharge an attachment as per Rule 57:

o SEC. 12. Discharge of attachment upon giving counterbond.At any time after an order of attachment has
been granted, the party whose property has been attached, or the person appearing in his behalf, may, upon
reasonable notice to the applicant, apply to the judge who granted the order, or to the judge of the court in
which the action is pending, for an order discharging the attachment wholly or in part on the security given x x x
in an amount equal to the value of the property attached as determined by the judge to secure the payment of
any judgment that the attaching creditor may recover in the action. x x x.
o SEC. 13. Discharge of attachment for improper or irregular issuance.The party whose property has been
attached may also, at any time either before or after the release of the attached property, or before any
attachment shall have been actually levied, upon reasonable notice to the attaching creditor, apply to the
judge who granted the order, or to the judge of the court in which the action is pending, for an order to
discharge the attachment on the ground that the same was improperly or irregularly issued. If the motion be
made on affidavits on the part of the party whose property has been attached, but not otherwise, the attaching
creditor may oppose the same by counteraffidavits or other evidence in addition to that on which the
attachment was made. x x x.
General Rule (which Justice Narvasa clarified in his Separate Opinion and is in line with the topic at hand): The
attachment debtor cannot be deemed to have waived any defect in the issuance of the attachment writ by simply
availing himself of one way of discharging the attachment writ, instead of the other (in other words, the attachment
debtor is not prevented from filing a motion to dissolve the attachment through Section 13 of Rule 57 even though
he/ she has already availed of dissolving the attachment through filing a counterbond under Section 12 Rule 57).
Exception: when the preliminary attachment is issued upon a ground which is at the same time the applicants
cause of action e.g., 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,
or an action against a party who has been guilty of fraud in contracting the debt or incurring the obligation upon
which the action is brought, the defendant is not allowed to file a motion to dissolve the attachment under Section
13 of Rule 57 because doing so would mean that the merits of the main action will be tried in a simple motion to
discharge an attachment.

IMPORTANT PEOPLE
Mindanao Savings and Loan Association - petitioner in SC case formerly known as Davao Savings and Loan
(MSLA) Association was added as a defendant in the RTC case through an
amendment filed by the Mercados
Poly and Juan Mercado (Mercados) - Private respondent in SC case plaintiffs in the RTC case

D.S. Homes, Inc. et. al. (DSH et.al.) - Original defendants in the RTC case (before the amendment) its
directors were also impleaded, but Director Eugenio delos Santos was
later dropped
Francisco Villamor (Villamor) - President of MSLA added as a defendant in the RTC case through an
amendment
FACTS
1. REGIONAL TRIAL COURT
a. The Mercados filed in the RTC of Davao a Complaint for Rescission of Contract and Damages with a
prayer for the issuance of a writ of preliminary attachment against defendants D.S. Homes, Inc. and its
directors1
b. Judge Dinopol of the RTC issued an order granting ex parte the application for the writ of attachment and
subsequently issued ex parte an amended order of attachment to reflect the defendants included in the second
amended complaint of the Mercados, namely: Davao Savings & Loan Association (later renamed as MSLA)
and Villamor (in addition, Dir. Eugenio delos Santos was dropped from the defendants)
c. DSH et.al., MSLA and Villamor filed separate motions to quash the writ of attachments which were all denied
by the RTC.
d. DSH et.al.. thus offered a counterbond (Certificate of Time Deposit) issued by Land Bank (which was a banking
partner of MSLA) in the amount of PHP 1,752,861.41.
e. The RTC accepted the said counterbond and thus lifted the writ of attachment.

2. COURT OF APPEALS
a. MSLA and Villamor filed in the CA a petition for certiorari to annul the order of attachment and the denial of
their MTQs alleging that the RTC acted in excess of its jurisdiction. DSH et.al. did not join them.
b. The CA dismissed their petition and remanded the case to the RTC for expeditious proceedings holding that:
i. Objections against the writ may no longer be invoked once a counterbond is filed for its lifting or
dissolution.
ii. The grounds invoked for the issuance of the writ form the core of the complaint and thus a trial on
the merits is necessary.
iii. The merits of a main action are not triable in a motion to discharge an attachment otherwise an
applicant for dissolution could force a trial on the merits of the case on his motion.

3. SUPREME COURT
a. Dissatisfied, petitioners appeal to the SC.

ISSUES AND RULING

Whether or not the CA ruling was correct.

YES, the CA was correct. The CA did not err in holding that objections to the impropriety or irregularity of the writ of
attachment may no longer be invoked once a counterbond is filed, when the ground for the issuance of the writ forms the
core of the complaint.

The only requisites for the issuance of a writ of preliminary attachment under Section 3, Rule 57 of the Rules of
Court are the affidavit and bond of the applicant. No notice to the adverse party or hearing of the application
of the writ of attachment is required.
o A hearing would defeat the purpose of the provisional remedy because of the lengthy time it would take.
The defendant could dispose of his/her property during that period and the plaintiff would be left with
nothing to attach.
Notice and hearing, however, is required for a motion to quash the writ of attachment.
[Digesters note: the following statement was included by the SC in its main ponencia in addition to what the CA
held. This is probably the statement that our friend Justice Narvasa wanted to clarify because it can be easily
construed differently.]
o After the defendant has obtained the discharge of the writ of attachment through a counterbond he may
not file another motion under Section 13 Rule 57 to quash the same writ because the writ has already
been quashed by filing the counterbond, hence another motion to quash it is pointless.
[Digesters note: the next statement is where the SC reiterated what the CA held, however, it is preceded by the
word moreover which means that the SC considers its statement above to be correct which is weird (I think!)
because Section 13 clearly states: The party whose property has been attached may also, at any time either
BEFORE OR AFTER the release of the attached property, or before any attachment shall have been
actually levied. xxx]
o Moreover, as the CA correctly observed, when the ground for the issuance of the writ is also the core
of the complaint, the question of whether the plaintiff was entitled to the writ can only be
determined AFTER a full-blown trial on the merits of the case.

1 Laurentino G. Cuevas, Saturnino R. Petalcorin, Engr. Uldarico D. Dumdum. Aurora P. De Leon, Ramon D. Basa, Francisco D.
Villamor, Richard F. Magallanes, Geronimo S. Palermo, Felicisimo V. Ramos and Eugenio M. De los Santos
 o Differently put, the merits of a main action are not triable in a motion to discharge an attachment, thus the
defendant cannot file another motion under Section 13 to move for the discharge of the attachment on the
ground of improper issuance as this would mean that an applicant for the dissolution of the writ could
force a trial on the merits of the case during the hearing of his/her motion.
[Digesters note: weirdly enough, the SC adds the following statement, which seems to contradict what they
earlier held in addition to the CA ruling.]
o May the defendant, after procuring the dissolution of the attachment by filing a counterbond, ask
for the cancellation of the counterbond on the ground that the order of attachment was improperly
issued? That question was answered by this Court when it ruled in Uy Kimpang vs.
Javier, 65 Phil. 170, that the obligors in the bond are absolutely liable for the amount of any judgment
that the plaintiff may recover in the action without reference to the question of whether
the attachment was rightfully or wrongfully issued.
o [Digesters note: my reading (which could be incorrect, so take this with a grain of salt!) is that while the
counterbond will be liable for the amount that the plaintiff may claim based on a favorable judgement, the
question of whether or not the attachment was correctly issued is a totally different and separate
matter altogether which could be resolved separately if warranted.]
DISPOSITIVE

WHEREFORE, finding no reversible error in the decision of the Court of Appeals in CAG.R. SP No. 12467, the petition for
review is denied for lack of merit with costs against the petitioners.
SO ORDERED.
NARVASA, J. CONCURRING AND DISSENTING OPINION

Agrees that the decision of the CA should be affirmed

Only wrote the separate opinion simply to stress certain principles relative to the discharge of preliminary
attachments so that the said decision by the SC be not applied to juridical situations beyond their intendment.
Justice Narvasa specifically cited the following statement from the main ponencia as potentially misleading: after
the defendant has obtained the discharge of the writ of attachment by filing a counterbond under Section 12, Rule
57 of the Rules of Court, he may not file another motion under Section 13, Rule 57 to quash the writ for
impropriety or irregularity in issuing it.
He identifies the two modes of discharging an attachment (as quoted under DOCTRINE). Rule 57 specifies in
clear terms the modes by which a preliminary attachment may be discharged at the instance of the party against
whom it has been issued. The first is by the submission of a counterbond or security. The second is by a
demonstration of the attachments improper or irregular issuance.
A party need not wait until his property has been seized before seeking its dissolution. He may prevent the seizure
of his property by giving security in an amount to satisfy the claims against him.
Like the first, the second mode of assailing the propriety of the issuance of the attachment may be availed of even
before any property has been actually attached. It may even be resorted to after the property has already been
released from the levy on attachment as per Section 13 of Rule 57.
As pointed out in Calderon v. I.A.C., 155 SCRA 531 (1987), The attachment debtor cannot be deemed to have
waived any defect in the issuance of the attachment writ by simply availing himself of one way of discharging the
attachment writ, instead of the other. xxx
HOWEVER, when the preliminary attachment is issued upon a ground which is at the same time the
applicants cause of action e.g., 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, or an action against a party who has been guilty of fraud in contracting the debt or incurring the
obligation upon which the action is brought, the defendant is not allowed to file a motion to dissolve the
attachment under Section 13 of Rule 57.
o The reason is that the hearing on such a motion for dissolution of the writ would be tantamount to a trial
of the merits of the action. In other words, the merits of the action would be ventilated at a mere hearing
of a motion, instead of at the regular trial. Therefore, when the writ of attachment is of this nature, the
only way it can be dissolved is by a counterbond.
OTHER NOTES

RULE 57, SEC. 3. Affidavit and bond required.An order of attachment shall be granted only when it is made to
appear by the affidavit of the applicant, or of 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
other 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 clerk or judge of the court before the order issues.

Digester: Kim