Luzon Development Bank vs. Krishman – G.R. No. 203530, April 13, 2015

Facts:
Respondent Erlinda claimed that she is a client of respondent bank wherein she maintained several accounts including time deposits. On several occasions, when respondent Erlinda presented her Time Deposits Certificates amounting to P28,597,472.70 for payment because they have become due, petitioners refused to honor them for the reason that they were fraudulent. Respondent Erlinda likewise applied for a Preliminary Writ of Attachment which the RTC granted.

By virtue of the writ, petitioner bank’s accounts in BPI Family Bank, Calamba, Laguna in the amount of P28,597,472.70 and its account amounting to P49,000,000.00 in the Central Bank were garnished.

On March 9, 2001, petitioners filed an urgent ex-parte Motion to Recall Quash and/or Lift Attachment or Garnishment (in excess of amounts in the writ). Respondent Erlinda opposed the motion.

On August 15, 2001, petitioners filed an Omnibus Motion seeking the substitution of their garnished account with government securities and the immediate resolution of their motion to discharge attachment and setting the motion for hearing, which respondent Erlinda opposed.

On September 8, 2003, the RTC issued an order lifting the attachment to which respondent Erlinda filed a motion for reconsideration. Respondent Erlinda also filed a Motion for Inhibition. On December 18, 2003, the RTC denied the motion for reconsideration but granted the motion for inhibition. The said Order was questioned by respondent Erlinda by way of Petition for Certiorari before the 7th Division which rendered a decision granting the certiorari in favor of the respondent and seting aside the decision of the RTC to lift the attachment.

On May 09, 2008, respondent judge issued an Order directing respondent Erlinda to file a new attachment bond in the amount of P35,000,000.00 and petitioners to file a counterbond within ten days from notice of the filing and approval of the bond of respondent Erlinda. Petitioners moved for the reconsideration of the said Order which respondent judge denied and granted a period of fifteen days for respondent Erlinda to file an attachment bond.

Respondent Erlinda filed her attachment bond in the amount of P35,000,000.00 through Visayan Surety and Insurance Corporation which was approved by respondent on July 7, 2009.

Meanwhile, on July 3, 2009, petitioners filed an Omnibus Motion praying that a hearing be held to determine the sufficiency of the attachment bond and they be allowed to deposit Certificates of Title of real property, and the issuance of the writ of attachment be held in abeyance.

Petitioners filed a motion to admit bank property in lieu of counterbond which was opposed by respondent Erlinda. Respondent judge denied petitioners’ motion in the assailed Order. Their subsequent motion for reconsideration was denied. Respondent judge issued an Order reinstating the Writ of Attachment for failure of petitioners to file the required counterbond.

Petitioners filed an urgent motion to recall, suspend or hold in abeyance and re-examination of the amended reinstated writ of preliminary attachment which was opposed by respondent Erlinda.

Thereafter, petitioners filed this petition for certiorari to the CA who dismissed the petition and affirmed the implementation of the writ of attachment.

Hence this case.

Issue:
Whether the CA erred in affirming the RTC’s decision which denied petitioners’ motion praying that bank property be deposited in lieu of cash or a counter-bond.

Held:
No, Section 2, Rule 57 of the Rules of Court explicitly states that “[a]n 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 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 an 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.”

Section 5 of the same Rule likewise states that “[t]he 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.”

From the foregoing, it is evidently clear that once the writ of attachment has been issued, the only remedy of the petitioners in lifting the same is through a cash deposit or the filing of the counter-bond. Thus, the Court holds that petitioner’s argument that it has the option to deposit real property instead of depositing cash or filing a counter-bond to discharge the attachment or stay the implementation thereof is unmeritorious.

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