Luzon Development Bank vs. Krishnan

Under Section 5 of Rule 57 of the 1997 Rules of Civil Procedure, the discharge of a writ of preliminary attachment can only be effected through a cash deposit or the filing of a counterbond in an amount equal to that fixed by the court; real property cannot be deposited in lieu of cash or a counterbond to discharge the attachment or stay its implementation.

Erlinda Krishnan maintained several time deposit accounts with Luzon Development Bank. When she presented Time Deposit Certificates amounting to P28,597,472.70 for payment upon maturity, the bank refused to honor them, claiming the certificates were fraudulent. Krishnan subsequently filed a complaint for Collection of Sum of Money and Damages against the bank and its officers, obtaining a Preliminary Writ of Attachment that led to the garnishment of the bank's accounts.

• Erlinda Krishnan filed a complaint for Collection of Sum of Money and Damages against Luzon Development Bank, Tomas Clemente, Jr., and Oscar Ramirez on February 7, 2001, claiming the bank refused to honor her Time Deposit Certificates amounting to P28,597,472.70 on the ground that they were fraudulent.
• On February 27, 2001, the RTC granted Krishnan's application for a Preliminary Writ of Attachment, leading to the garnishment of the bank's accounts in BPI Family Bank, Calamba, Laguna (P28,597,472.70) and in the Central Bank (P49,000,000.00).
• The petitioners filed various motions to recall, quash, or lift the attachment, and to substitute the garnished accounts with government securities, which were opposed by Krishnan.
• On September 8, 2003, the RTC issued an order lifting the attachment, but this was nullified by the Court of Appeals (7th Division) on November 15, 2006, which ordered the petitioners to file a counterbond in accordance with Section 12, Rule 57 within 10 days from finality, otherwise the writ would be reinstated.
• The petitioners' motion for reconsideration and subsequent petition before the Supreme Court were denied.
• On May 9, 2008, the RTC ordered Krishnan to file a new attachment bond of P35,000,000.00 and directed the petitioners to file a counterbond within ten days from notice of the filing and approval of Krishnan's bond.
• Krishnan filed her attachment bond on June 25, 2009 through Visayan Surety and Insurance Corporation, which was approved on July 7, 2009.
• On January 28, 2010, the petitioners filed a motion to admit bank property in lieu of counterbond, which was opposed by Krishnan and denied by the RTC in its Orders dated September 24, 2010 and May 26, 2011.
• On June 27, 2011, the RTC reinstated the Writ of Attachment for failure of the petitioners to file the required counterbond, and issued an amended writ directing the sheriff to attach properties of the petitioners amounting to P28,597,472.70.
• The Court of Appeals dismissed the petitioners' certiorari petition on March 27, 2012, affirming the RTC orders, and denied the motion for reconsideration on September 11, 2012.

• The petitioners contend that they have the option to deposit real property, in lieu of cash or a counterbond, to secure any contingent lien on their property in the event the respondent wins the case.
• They argue that Section 2 of Rule 57 only mentions the term "deposit," thus, it cannot be confined or construed to refer only to cash, and should be interpreted broadly to include real property.

• The respondent opposed the motion to admit bank property in lieu of counterbond, maintaining that the proper procedure for discharging a writ of attachment requires either a cash deposit or a counterbond, not real property.
• The respondent argued that the RTC and Court of Appeals correctly applied Section 5 of Rule 57 in denying the petitioners' motion.

• Procedural Issues: N/A
• Substantive Issues: Whether the Court of Appeals erred in affirming the Regional Trial Court's decision which denied the petitioners' motion praying that bank property be deposited in lieu of cash or a counterbond to discharge the writ of preliminary attachment.

• Procedural: N/A
• Substantive: The Supreme Court denied the petition and affirmed the Court of Appeals' decision. The Court held that under Section 5 of Rule 57 of the Rules of Civil Procedure, once a writ of attachment has been issued, the only remedies available to a party to lift the same are through a cash deposit or the filing of a counterbond in an amount equal to that fixed by the court. The Court ruled that the argument that real property may be deposited instead of cash or a counterbond is unmeritorious. Citing the proximate relation of the word "deposit" and "amount" in Section 5, the Court concluded that the law requires the deposit of money, as the word "amount" commonly refers to a sum of money. The Court applied the rule of statutory construction that words should be given their plain, ordinary, and common usage meaning, and held that petitioners cannot give a special or technical interpretation to broaden the signification of "deposit" to include real properties.

• Plain Meaning Rule / Verba Legis — In construing words and phrases used in a statute, they should be given their plain, ordinary, and common usage meaning in the absence of legislative intent to the contrary. The words should be read in their natural, ordinary, commonly-accepted, and most obvious signification. In this case, the Court applied this doctrine to determine that "deposit" in Section 5, Rule 57 refers to money, not real property, especially when read in conjunction with the word "amount."
• Discharge of Attachment by Counterbond or Deposit — One of the ways to secure the discharge of an attachment is for the party whose property has been attached to post a counterbond or make the requisite cash deposit in an amount equal to that fixed by the court in the order of attachment. Real property is not an acceptable substitute for cash or a bond in discharging a writ of attachment.

• "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."
• "Plainly, in construing said words, it can be safely concluded that Section 5 requires the deposit of money as the word 'amount' commonly refers to or is regularly associated with a sum of money."
• "Thus, petitioners should not give a special or technical interpretation to a word which is otherwise construed in its ordinary sense by the law and broaden the signification of the term 'deposit' to include that of real properties."

• Security Pacific Assurance Corporation v. Tria-Infante — Cited as precedent establishing that one of the ways to secure the discharge of an attachment is for the party whose property has been attached to post a counterbond or make the requisite cash deposit in an amount equal to that fixed by the court in the order of attachment.
• Alcazar v. Arante — Cited for the rule of statutory construction that words and phrases should be given their plain, ordinary, and common usage meaning, and that words are presumed to have been employed by the lawmaker in their ordinary and common use and acceptation.

• Section 2, Rule 57 of the 1997 Rules of Civil Procedure — Provides that an order of attachment may be issued requiring the sheriff to attach property sufficient to satisfy the demand unless the party makes a deposit or gives a bond in an amount equal to that fixed in the order.
• Section 5, Rule 57 of the 1997 Rules of Civil Procedure — States that the sheriff shall attach property sufficient to satisfy the demand unless the party makes a deposit with the court or gives a counter-bond in an amount equal to the bond fixed by the court. The Court interpreted "deposit" here to mean cash deposit, not real property, based on its association with the word "amount."
• Section 12, Rule 57 of the 1997 Rules of Civil Procedure — Cited in the procedural history regarding the Court of Appeals' earlier decision ordering the filing of a counterbond.