Primary Holding
The "proper hearing" requirement under Section 20, Rule 57 for claims of damages on account of wrongful attachment does not mandate full-blown open-court hearings, especially in appellate courts; it requires only that the adverse party and the surety be duly notified and given the opportunity to be heard, present evidence, and rebut opposing submissions. The award of damages on the attachment bond need not await the main judgment where the wrongfulness of the attachment has already been conclusively determined by final judgment, and procedural rules should be liberally construed to promote just, speedy, and inexpensive disposition of cases.
Background
Juan de Dios Carlos was the sole surviving compulsory heir of his parents, Felix B. Carlos and Felipa Elemia, who acquired six parcels of land during their marriage. His brother Teofilo died intestate in 1992, apparently married to respondent Felicidad Sandoval, with whom he had a child, respondent Teofilo Carlos II. Carlos claimed that Teofilo and Sandoval were never validly married for lack of a marriage license, and that Teofilo II was not Teofilo's child. Prior to their father Felix's death in 1963, Teofilo had devised a scheme to transfer the father's properties to himself to save the estate from inheritance taxes, with the understanding that the shares of legal heirs would be protected. After Teofilo's death, Carlos entered into agreements with Sandoval regarding the subject properties, believing she was Teofilo's lawful wife. SIDDCOR Insurance Corporation (now Mega Pacific Insurance Corporation) issued the attachment bond in the amount of ₱20,000,000.
History
1995 – 2005-
Sep 7, 1995
RTC of Muntinlupa City, Branch 256
Granted Carlos's prayer for preliminary attachment; writ issued Sept. 15, 1995, with ₱20,000,000 bond posted by SIDDCOR.
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2 mos 27 days later
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Dec 4, 1995
RTC
Denied respondents' Urgent Motion to Discharge the Writ of Attachment.
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2 mos 23 days later
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Feb 27, 1996
Court of Appeals (CA-G.R. SP No. 39267)
Granted respondents' Petition for Certiorari, ordered discharge and dissolution of the Writ of Attachment and Notice of Garnishment, finding no sufficient cause of action for preliminary attachment.
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41 days later
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Apr 8, 1996
RTC
Rendered summary judgment in favor of Carlos, declaring the marriage void ab initio, declaring Teofilo II not Teofilo's child, ordering Sandoval to restitute ₱18,924,800.00, and declaring Carlos sole owner of the subject properties.
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6 mos 13 days later
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Oct 21, 1996
Supreme Court (G.R. No. L-125717)
Denied Carlos's Petition for Review on Certiorari, making the CA decision in CA-G.R. SP No. 39267 final.
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50 days later
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Dec 10, 1996
CA (CA-G.R. CV No. 53229)
Respondents filed Motion for Judgment on the Attachment Bond seeking damages under Section 20, Rule 57.
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1 yr 6 mos later
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Jun 26, 1998
CA Former Special Fourth Division
Issued two resolutions: (1) denied Carlos's motion to dismiss appeal on forum-shopping ground; (2) granted Motion for Judgment on Attachment Bond, awarding ₱15,384,509.98 with 12% interest from June 27, 1996, and ₱1,000,000 as attorney's fees.
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3 mos 14 days later
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Oct 10, 1998
CA
Denied motions for reconsideration and granted Motion for Immediate Execution of the award on the attachment bond.
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2 mos 12 days later
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Dec 22, 1998
CA
Denied SIDDCOR's motion for reconsideration of the grant of immediate execution.
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5 mos 18 days later
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Jun 9, 1999
Supreme Court First Division
Issued Temporary Restraining Order enjoining enforcement of the Writ of Execution on the attachment bond.
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3 yrs 4 mos later
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Oct 15, 2002
CA First Division
Rendered decision on merits of CA-G.R. CV No. 53229, setting aside the summary judgment and remanding the case for further proceedings.
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2 yrs 11 mos later
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Sep 30, 2005
Supreme Court Second Division
Dismissed the consolidated petitions; affirmed CA resolution with modifications on interest commencement date and attorney's fees.
Facts
Juan de Dios Carlos was the sole surviving compulsory heir of his parents, Felix B. Carlos and Felipa Elemia, who had acquired six parcels of land during their marriage. His brother Teofilo died intestate in 1992. At the time of Teofilo's death, he was apparently married to Felicidad Sandoval, with whom he cohabited and had a child, Teofilo Carlos II. Carlos alleged that Teofilo and Sandoval were never validly married, having contracted their marriage without a marriage license, and that Teofilo II could not be considered Teofilo's child. Carlos further claimed that before their father Felix's death in 1963, Teofilo devised a scheme to save the elder Carlos's estate from inheritance taxes by transferring the father's properties to Teofilo, who would in turn protect and deliver the shares of the legal heirs. Felix assented to the plan, and the subject properties were transferred to Teofilo's name.
After Teofilo's death, Carlos entered into certain agreements with Sandoval in connection with the subject properties, believing she was the lawful wife of his brother. Carlos subsequently discovered that Sandoval and Teofilo were never validly married. He filed a complaint before the RTC of Muntinlupa City, docketed as Civil Case No. 95-135, seeking to nullify the marriage void ab initio, declare himself sole heir of both his parents and his brother, order new titles in his name, and require Sandoval to restitute ₱18,924,800.00. He likewise prayed for preliminary attachment.
The RTC granted the prayer for preliminary attachment on September 7, 1995, and issued the writ on September 15, 1995. Carlos posted a bond of ₱20,000,000 issued by SIDDCOR Insurance Corporation. A Notice of Garnishment was thereafter served on the Philippine National Bank (PNB) over deposit accounts maintained by respondents, including a savings account with ₱546,121.98, a time deposit of ₱10,000,000, and treasury bills worth ₱5,000,000. Respondents moved to discharge the writ, but the RTC denied the motion on December 4, 1995. Respondents elevated the matter to the Court of Appeals via certiorari, docketed as CA-G.R. SP No. 39267. On February 27, 1996, the CA granted the petition and ordered the discharge and dissolution of the writ, finding no sufficient cause of action to warrant the preliminary attachment. Carlos's petition for review before the Supreme Court was denied on October 21, 1996, making the CA ruling final.
Meanwhile, the RTC rendered a summary judgment on April 8, 1996, wholesale in favor of Carlos, declaring the marriage void ab initio, declaring Teofilo II not Teofilo's child, ordering Sandoval to restitute ₱18,924,800.00 with interest, and declaring Carlos sole owner of the subject properties with cancellation of existing titles. The RTC granted execution pending appeal and issued a writ of execution on May 27, 1996. Pursuant to the writ, PNB delivered ₱15,384,509.98 from Sandoval's garnished accounts to the RTC sheriff on June 27, 1996. Respondents appealed the summary judgment to the CA, docketed as CA-G.R. CV No. 53229, and separately filed a petition for certiorari with TRO attacking the allowance of execution pending appeal.
On December 10, 1996, respondents filed a Motion for Judgment on the Attachment Bond before the CA, invoking Section 20, Rule 57 of the Rules of Court. They argued that the CA had already ruled the writ of preliminary attachment was improperly granted, and that said ruling, as affirmed by the Supreme Court, had attained finality. They presented evidence of the garnishment and delivery of ₱15,384,509.98 from Sandoval's PNB accounts, supported by PNB's manifestation confirming the delivery. After the parties filed their respective comments and oppositions, the CA Former Special Fourth Division issued two resolutions on June 26, 1998. The first denied Carlos's motion to dismiss the appeal on the ground of forum-shopping. The second granted the Motion for Judgment on the Attachment Bond, awarding respondents ₱15,384,509.98 with 12% interest per annum from June 27, 1996, and ₱1,000,000 as attorney's fees with 6% interest from the trial court's decision. The CA found no malice in pursuing the attachment and declined to award moral and exemplary damages. On October 10, 1998, the CA denied the motions for reconsideration and granted respondents' Motion for Immediate Execution, citing the finality of the wrongful attachment finding, the absence of material defenses, Sandoval's advanced age and infirmity, and the prolonged deprivation of her funds. SIDDCOR's motion for reconsideration of the immediate execution was denied on December 22, 1998. On October 15, 2002, the CA First Division rendered a decision on the merits of CA-G.R. CV No. 53229, setting aside the summary judgment and remanding the case for further proceedings.
Arguments of the Petitioners
- Jurisdiction and Raffle System (Carlos): Carlos argued that the CA, through the Former Special Fourth Division, could not have resolved the Motion for Judgment on the Attachment Bond since the case had not yet been re-raffled under the two-raffle system for study and report as required by the RIRCA.
- Hearing Requirement (Carlos and SIDDCOR): Both petitioners argued that the CA erred in resolving the motion for damages without conducting any hearing, asserting that Section 20, Rule 57 requires a "proper hearing" before damages may be awarded.
- Docket Fees (Carlos): Carlos contended that the CA had no jurisdiction over the motion as docketing fees had not yet been paid, characterizing the motion as an initiatory proceeding because it claimed damages for the first time.
- Certification Against Forum Shopping (Carlos): Carlos argued that the absence of a certification against forum shopping attached to the Motion for Judgment on the Attachment Bond rendered it fatal, as initiatory pleadings must contain such certification.
- Insufficiency of Evidence (Carlos): Carlos asserted that there was no concrete or supporting evidence to justify the amount of actual damages awarded.
- Grave Abuse of Discretion (Carlos): Carlos ascribed grave abuse of discretion to the CA in denying his motion for reconsideration without adverting to specific reasons for the denial of each issue.
- Forum Shopping in Main Case (Carlos): Carlos argued that the CA should have deferred resolution of the Motion for Judgment on the Attachment Bond considering the prejudicial question raised in his motion to dismiss the main case on the ground of forum-shopping, allegedly because respondents had filed two cases before the CA.
- Premature Resolution (SIDDCOR): SIDDCOR argued that the CA erred in ruling on the motion for damages without awaiting judgment in the main case.
- Scope of Damages (SIDDCOR): SIDDCOR contended that any damages awardable should encompass only those incurred during the pendency of the appeal, not from the time the attachment was issued.
- Immediate Execution (SIDDCOR): SIDDCOR argued that Section 2, Rule 39 requires execution pending appeal only on motion of the prevailing party with "good reasons" stated in a "special order" after "due hearing," and that no hearing was conducted on the Motion for Immediate Execution.
- Change of Theory (SIDDCOR): SIDDCOR contended that respondents had changed their theory from characterizing the judgment on the attachment bond as interlocutory to supporting immediate execution under Section 2, Rule 39, which SIDDCOR argued was an inconsistent and fatal change of theory.
- Due Process in Immediate Execution (SIDDCOR): SIDDCOR claimed that the grant of immediate execution in the very same resolution denying the motion for reconsideration constituted a denial of procedural due process, as the resolution it intended to appeal from was already subject of immediate execution.
Arguments of the Respondents
- Pending Incidents Before Re-Raffle: Respondents argued that under the RIRCA, the case could not be re-raffled for assignment for study and report until all pending incidents, including the Motion for Judgment on the Attachment Bond, were resolved.
- Immediate Execution: Respondents argued that the judgment on the attachment bond was interlocutory and not appealable, citing rulings on execution pending appeal under Section 2, Rule 39 in support of their Motion for Immediate Execution.
- Good Reasons for Immediate Execution: Respondents cited Sandoval's advanced age, sickness, lack of means of livelihood, the wrongfulness of the attachment, and the length of time they had been deprived of their money as justifications for immediate execution.
Issues
- Timing of Award: Whether the judgment on the attachment bond could have been rendered prior to the adjudication of the main case.
- Hearing Requirement: Whether the Court of Appeals properly complied with the hearing requirement under Section 20, Rule 57 prior to its judgment on the attachment bond.
- Amount of Damages: Whether the Court of Appeals properly ascertained the amount of damages it awarded in the judgment on the attachment bond.
- Docket Fees and Certification Against Forum Shopping: Whether the Motion for Judgment on the Attachment Bond required the payment of docket fees and the attachment of a certification against forum shopping.
- Forum Shopping in Main Case: Whether respondents engaged in forum shopping by filing two separate petitions before the Court of Appeals.
- Immediate Execution: Whether the Court of Appeals properly allowed immediate execution of the award of damages on the attachment bond.
Ruling
- Timing of Award: Yes, with qualifications. The premature award of damages—rendered before the main judgment—was not fatal given the finality of the wrongful attachment finding and the parties' full opportunity to be heard, the Court applying a liberal construction of procedural rules to promote just, speedy, and inexpensive disposition.
- Hearing Requirement: Yes. The "proper hearing" under Section 20, Rule 57 was satisfied through the parties' submission of comments and oppositions; full-blown open-court hearings are not mandatory, especially in appellate courts which are not triers of fact.
- Amount of Damages: Yes, with modifications. The actual damages of ₱15,384,509.98 were proper, but legal interest should commence from the date the CA decision in CA-G.R. SP No. 39267 became final, not from the date of garnishment. Attorney's fees were reduced to ₱500,000, and the interest imposed thereon was deleted.
- Docket Fees and Certification Against Forum Shopping: No. The Motion for Judgment on the Attachment Bond is not an initiatory pleading but an auxiliary application that cannot be independently set up from the main action; accordingly, neither docket fees nor a certification against forum shopping was required.
- Forum Shopping in Main Case: No. The two petitions before the CA—CA-G.R. CV No. 53229 (appeal from the summary judgment) and the petition for certiorari attacking execution pending appeal—involved different causes of action, precluding a finding of forum shopping.
- Immediate Execution: Yes. The CA properly allowed execution pending appeal based on good reasons including Sandoval's advanced age, the wrongfulness of the attachment, and the prolonged deprivation of respondents' funds; the "due hearing" requirement was satisfied by SIDDCOR's opportunity to file its opposition.
Ruling Rationale
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Timing of Award: Section 20, Rule 57 explicitly provides that the award of damages "shall be included in the judgment on the main case," which necessarily implies that it should be rendered only after the case has been re-raffled for study and report and decided concurrently with the ponencia in the main case. The CA thus failed to comply with Section 20 when it acted upon the application before the second raffle. However, this error was not mortal to the award. The right of respondents to damages had been conclusively affirmed by the Supreme Court's denial of Carlos's petition, making the wrongfulness of the attachment no longer subject to review. The only matter left for adjudication was the amount of damages, which was likewise indubitable from the official case records. Any ruling voiding the award solely for prematurity and remanding for proper adjudication together with the main case would exhibit fealty to the letter of the procedural rule but not its avowed aims of promoting a just, speedy disposition. The case had been with the CA for more than nine years, and the CA would examine exactly the same evidence and apply exactly the same rules as it already did. Section 6, Rule 1 requires liberal construction of procedural rules to secure a just, speedy, and inexpensive disposition of every action and proceeding.
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Hearing Requirement: Section 20, Rule 57 requires a "proper hearing" before an application for damages on the attachment bond may be granted, tied to the indispensable demand of procedural due process. Due notice to the adverse party and its surety setting forth the facts supporting the right to damages and the amount thereof is essential. In Paramount Insurance vs. Court of Appeals, the Court held that it was neither mandatory nor fatal that there be a separate hearing; what is necessary is for the attaching party and his surety to be duly notified and given the opportunity to be heard. In this case, both Carlos and SIDDCOR were duly notified and required to file their comments, which they did in opposition. There is no express requirement under the rule that the hearing be done in open court or that parties be allowed to confront adverse witnesses. The "proper hearing" encompasses the right to submit positions, present evidence, and rebut the submissions and evidence of the adverse party. The demands of a "proper hearing" were satisfied because the judicial finding on the wrongfulness of the attachment was already conclusive and beyond review, and the amount of actual damages was indubitable from the official case records. Petitioners would have been precluded from raising defenses that the attachment was valid or disputing the amount of actual damages. The only potentially litigable matter—moral and exemplary damages—was appropriately not awarded. To impose mandatory open-court hearings on the CA or the Supreme Court would be supremely unwise, as these courts are generally not triers of fact and rarely conduct open-court hearings. Section 20, Rule 57 itself authorizes appellate courts to refer applications to the trial court, but such reference is discretionary. No existing statute, rule, or jurisprudence mandates open-court hearings in appellate courts for any matter, including death penalty cases, so there is no basis for imposing such a requirement for the relatively insignificant application for damages on the attachment bond.
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Amount of Damages: The actual pecuniary loss sustained by respondents was well established. By virtue of the writ of preliminary attachment, a Notice of Garnishment was served on PNB over respondents' deposit accounts, placing them under the control of the RTC and preventing transfer or disposition. The subsequent Writ of Execution ordered the delivery of ₱15,384,509.98 to Carlos, confirmed by PNB's manifestation. The burden of proving damages was considerably lessened by the final judgment that the attachment was wrongful; all that was necessary to prove was the amount of damage actually sustained. SIDDCOR's contention that damages should cover only those incurred during the pendency of the appeal was belied by Section 4, Rule 57, which provides that the bond answers for "all damages which he may sustain by reason of the attachment, if the court shall finally adjudge that the applicant was not entitled thereto." In Philippine Charter Insurance Corp. vs. Court of Appeals, the Court ruled that the surety's liability covers all damages sustained for all the time the attachment was in force—from levy to dissolution—not merely those during the pendency of the appeal. However, interest should not be counted from the date of the unlawful garnishment but from the moment it was finally determined that the attachment was unlawful, as it is on that basis that the right to damages comes into existence. Legal interest thus commences from the date the CA decision in CA-G.R. SP No. 39267 became final by reason of its affirmation by the Supreme Court. As for attorney's fees, while the general rule is that attorney's fees should be deleted where moral and exemplary damages are eliminated, attorney's fees may be awarded under Article 2208(11) of the Civil Code where the court deems it just and equitable, even if moral and exemplary damages are unavailing. The amount of money garnished and the length of time respondents were deprived of its use militate toward a finding that attorney's fees are just and equitable. However, ₱1,000,000 was deemed excessive and reduced to ₱500,000, representing approximately three percent of the actual damages. The interest imposed on attorney's fees was deleted.
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Docket Fees and Certification Against Forum Shopping: In Santo Tomas University Hospital vs. Surla, the Court ruled that the certification against forum shopping requirement covers initiatory pleadings or incipient applications asserting a claim for relief, and does not include a claim which cannot be independently set up. Since the application for damages on the attachment bond under Section 20, Rule 57 cannot be independently set up but must be filed in the main case before the judgment becomes final and executory, no certification against forum shopping was required. The same reasoning sustains the ruling that no legal fees were required, as Section 1, Rule 141 prescribes legal fees upon the filing of a pleading that initiates an action or proceeding; since the motion is not an initiatory pleading, it is not chargeable with legal fees.
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Forum Shopping in Main Case: Forum-shopping allegedly existed because respondents had filed two cases before the CA: CA-G.R. CV No. 53229 (appeal from the summary judgment) and the petition for certiorari with TRO attacking the allowance of execution pending appeal. Evidently, the two causes of action in these petitions are different—one being an appeal from the summary judgment and the other assailing the subsequent allowance of execution pending appeal. There is no identity between these two causes of action that would warrant a finding of forum shopping.
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Immediate Execution: A judgment on the attachment bond is a final and appealable order, as it is normally included in the main judgment which is itself final and appealable. Respondents erred in earlier characterizing it as interlocutory, but they were not estopped from changing their legal theory because the rule on estoppel applies to questions of fact, not questions of law. Courts are empowered to decide cases on legal rationales other than those urged by the movant. The standard under Section 2(a), Rule 39 requires "good reasons," a "special order," and "due hearing." Due hearing does not require open-court proceedings but simply the right to be heard, which SIDDCOR availed of by filing its opposition. The CA's resolution satisfies the "special order" requirement and enumerates "good reasons" at length. The advanced age of Sandoval alone would have sufficiently justified execution pending appeal, pursuant to well-settled jurisprudence. The wrongfulness of the attachment and the length of time respondents were deprived of their money further justified immediate execution.
Doctrines
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Proper Hearing Under Section 20, Rule 57 — The "proper hearing" requirement for an application for damages on account of improper, irregular, or excessive attachment does not mandate a full-blown open-court hearing. What is required is that the attaching party and the surety be duly notified and given the opportunity to be heard, to present evidence, and to rebut the submissions and evidence of the adverse party. The modality of hearing remains within the discretion of the court having jurisdiction. In appellate courts, which are not triers of fact and rarely conduct open-court hearings, imposing mandatory open-court hearings would be unduly disruptive and beyond the demands of the rule. The Court applied this doctrine by finding that the submission of comments and oppositions by Carlos and SIDDCOR, coupled with the conclusive finality of the wrongful attachment finding and the indubitable amount of actual damages from the official records, satisfied the demands of due process.
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Scope of Surety's Liability on Attachment Bond — The bond issued upon an application for preliminary attachment answers for all damages, incurred at whatever stage, which are sustained by reason of the attachment—from levy to dissolution. The surety's liability is not limited to damages caused only during the pendency of the appeal. The Court relied on Philippine Charter Insurance Corp. vs. Court of Appeals in holding that the surety's liability comprehends all damages sustained during all the time the attachment was in force.
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Application for Damages as Auxiliary, Not Initiatory Pleading — An application for damages on the attachment bond under Section 20, Rule 57 cannot be independently set up from the main action but must be filed in the same case before the judgment becomes executory. As such, it is not an initiatory pleading and requires neither the payment of docket fees nor a certification against forum shopping. The Court applied this doctrine by ruling that Carlos's objections based on the absence of docket fees and certification against forum shopping were unmeritorious.
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Liberal Construction of Procedural Rules — Procedural rules are designed to give effect to lawful and valid claims, not to frustrate them. Where the right to damages has been conclusively established by final judgment and the amount is indubitable from the records, strict adherence to the requirement that damages be included in the main judgment would serve only to prolong the resolution of a long-pending case without any substantive purpose. The Court invoked Section 6, Rule 1 to justify affirming the premature award of damages.
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Execution Pending Appeal Based on Advanced Age — The advanced age of the prevailing party alone sufficiently constitutes a "good reason" for allowing execution pending appeal under Section 2(a), Rule 39. The Court applied this doctrine by upholding the CA's grant of immediate execution, citing Sandoval's advanced age, the wrongfulness of the attachment, and the prolonged deprivation of respondents' funds.
Key Excerpts
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"Plainly, there is no express requirement under the rule that the hearing be done in open court, or that the parties be allowed to confront adverse witnesses to the claim of damages on the bond." — This passage articulates the Court's interpretation of the "proper hearing" requirement under Section 20, Rule 57, distinguishing it from a full-blown trial-type hearing and establishing that the modality of hearing is within the court's discretion.
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"The surety's liability is not and cannot be limited to the damages caused by the improper attachment only during the pendency of the appeal. That would be absurd. The plain and patent intendment of the law is that the surety shall answer for all damages that the party may suffer as a result of the illicit attachment, for all the time that the attachment was in force; from levy to dissolution." — This quotation, drawn from Philippine Charter Insurance Corp. vs. Court of Appeals and adopted by the Court, defines the comprehensive scope of the surety's liability on the attachment bond, covering all damages from the issuance of the writ to its dissolution.
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"Procedural rules are designed, and must therefore be so interpreted as, to give effect to lawful and valid claims and not to frustrate them." — This passage states the governing principle for the liberal construction of procedural rules, invoked to affirm the premature award of damages rather than remand for redundant proceedings.
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"If no such mandatory rule for hearing is imposed on the appellate courts when the supreme penalty of death is involved, why then should an exceptional rule be imposed in the case for the relatively insignificant application for damages on the attachment bond?" — This rhetorical comparison underscores the Court's reasoning that imposing mandatory open-court hearings on appellate courts for applications for damages on attachment bonds would be unwarranted and inconsistent with existing practice even in more serious matters.
Precedents Cited
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Paramount Insurance Corp. vs. Court of Appeals, 369 Phil. 641 (1999) — Followed. The Court relied on this case for the proposition that a separate hearing is neither mandatory nor fatal for claims of damages on the attachment bond; what is necessary is that the attaching party and surety be duly notified and given the opportunity to be heard.
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Philippine Charter Insurance Corp. vs. Court of Appeals, 179 SCRA 468 (1989) — Followed. The Court adopted its ruling that the surety's liability on the attachment bond covers all damages sustained for all the time the attachment was in force—from levy to dissolution—and not merely those incurred during the pendency of the appeal.
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Peroxide Philippines Corp. vs. Court of Appeals, 199 SCRA 882 (1991) — Followed. The Court cited this case to explain the scope of the "proper hearing" requirement, encompassing the right to submit positions, present evidence, and rebut adverse submissions.
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Hanil Development Co., Ltd. vs. IAC, 228 Phil. 529 (1986) — Distinguished. Carlos interpreted this case as requiring the CA to conduct a proper hearing, but the Court clarified that Hanil merely reinstated the application for damages and did not lay down a general rule mandating open-court hearings in appellate courts.
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Santo Tomas University Hospital vs. Surla, 355 Phil. 804 (1998) — Followed. The Court applied its ruling that the certification against forum shopping requirement does not cover claims which cannot be independently set up, such as an application for damages on the attachment bond.
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Stronghold Insurance Co., Inc. vs. Court of Appeals, 179 SCRA 117 (1989) — Followed. Cited by SIDDCOR for the proposition that a judgment on the attachment bond constitutes a final and appealable order, a characterization the Court accepted.
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Zaragosa vs. Fidelino, 163 SCRA 443 (1988) — Followed. The Court cited this case for the principle that recovery for damages may be had by a party prejudiced by wrongful attachment even if the judgment in the main case is adverse to him.
Provisions
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Section 20, Rule 57, Rules of Court — Governs claims for damages on account of improper, irregular, or excessive attachment. The provision requires that the application be filed before trial, before appeal is perfected, or before judgment becomes executory, with due notice to the attaching obligee or surety. It provides that damages "may be awarded only after proper hearing and shall be included in the judgment on the main case." The Court interpreted the "proper hearing" requirement as not mandating open-court hearings and held that the premature award of damages was not fatal where the wrongfulness of the attachment had been conclusively established.
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Section 4, Rule 57, Rules of Court — Provides that the bond issued for preliminary attachment is conditioned on the applicant paying "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." The Court relied on this provision to hold that the surety's liability covers all damages sustained during the entire period the attachment was in force.
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Section 2(a), Rule 39, Rules of Court — Governs execution pending appeal, requiring "good reasons" stated in a "special order" after "due hearing." The Court upheld the CA's grant of immediate execution, finding that Sandoval's advanced age, the wrongfulness of the attachment, and the prolonged deprivation of funds constituted sufficient "good reasons."
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Section 5, Rule 7, 1997 Rules of Civil Procedure — Requires certification against forum shopping for initiatory pleadings. The Court held this provision inapplicable to the Motion for Judgment on the Attachment Bond, which is an auxiliary application that cannot be independently set up.
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Section 1, Rule 141, Rules of Court — Prescribes legal fees upon filing of pleadings that initiate an action or proceeding. The Court held that since the motion for judgment on the attachment bond is not an initiatory pleading, no legal fees were required.
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Section 6, Rule 1, 1997 Rules of Civil Procedure — Mandates liberal construction of the rules to promote the objective of securing a just, speedy, and inexpensive disposition of every action and proceeding. The Court invoked this provision to justify affirming the premature award of damages rather than remanding for redundant proceedings.
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Article 2208(11), Civil Code — Authorizes the award of attorney's fees where the court deems it just and equitable that they be recovered. The Court applied this provision to sustain the award of attorney's fees despite the absence of moral and exemplary damages, though the amount was reduced to ₱500,000.
Notable Concurring Opinions
Reynato S. Puno (Chairman), Ma. Alicia Austria-Martinez, Romeo J. Callejo, Sr., and Minita V. Chico-Nazario concurred in the decision. No separate concurring opinions were noted.