January 2007 - Philippine Supreme Court Resolutions
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[G.R. No. 157439 : January 15, 2007] MULTI-VENTURES CAPITAL AND MANAGEMENT CORPORATION V. STALWART MANAGEMENT SERVICES CORP., ET AL. :
[G.R. No. 157439 : January 15, 2007]
MULTI-VENTURES CAPITAL AND MANAGEMENT CORPORATION V. STALWART MANAGEMENT SERVICES CORP., ET AL.
Sirs/Mesdames:
Quoted hereunder, for your information is a resolution of the Third Division of this Court dated 15 JANUARY 2007
G.R. No. 157439 - (Multi-Ventures Capital and Management Corporation v. Stalwart Management Services Corp., et al.)
Before the Court are respondents' Motion to Lift Attachment, petitioner's Comment thereto, and respondents' Reply.
Respondents seek the lifting of the Writ of Attachment dated July 12, 1991 issued by the Regional Trial Court of Makati City, Branch 134 (RTC) upon petitioner's filing of a bond in the amount of P2,000,000.00 issued by Stronghold Insurance Company, Inc.. It is alleged that several of respondents' properties were levied upon, i.e., two lots covered by Transfer Certificate of Title (TCT) Nos. 2416 and 2417 in the name of respondents Spouses Cesar and Marian Tajo with appraised value of P10,046,000.00, and one lot covered by TCT No. 35236 in the name of respondent Aniana Galang with appraised value of P8,306,000.00.
As grounds for the lifting of the Writ of Attachment, respondents claim that (1) the bond petitioner posted for the issuance of the Writ of Attachment is no longer subsisting as petitioner has not paid the premiums therefor, and (2) the attachment is excessive because as of March 2006, the appraised value of respondents' properties levied upon totals P18,352,000.00, while the principal claim of petitioner is only P11,557,972.60. Respondents pray that an order be issued totally discharging the attachment or, in the alternative, lifting the attachment only with respect to the property covered by TCT No. 35236 whose appraised value is P8,306,000.00.
In its Comment, petitioner did not deny respondents' allegation that the premiums for the bond it posted have not been paid. Neither did it refute respondents' valuation of the properties levied upon. Petitioner merely argued that since the Decision of the Court of Appeals dated February 24, 2003 in favor of respondents has not yet become final and executory, then the order of attachment cannot be considered discharged.
Petitioner's failure to deny respondents' material allegations amount to an implied admission[1] that, indeed, the premiums for its bond has not been paid and that the value of respondents' properties levied upon is P10,046,000.00 and P8,306,000.00 which totals P18,352,000.00, while the principal claim of petitioner is only P11,557,972.60.
However, mere failure of petitioner to pay the premiums for the bond does not automatically mean that the bond has become invalid and unenforceable. Bonds issued by a surety doing an insurance business are considered insurance contracts governed by the Insurance Code. Section 177 of the same Code provides that if the obligee has accepted the bond, then the bond becomes valid and enforceable irrespective of whether or not the premium has been paid by the obligor to the surety. Thus, in Palmares v. Court of Appeals,[2] the Court explained that the contract of suretyship is of a peculiar nature as it holds the surety liable despite the absence of any direct consideration received from either the principal obligor or the creditor.
In the case of an attachment bond, it is the court which requires the posting of such bond for the protection of the party whose property is to be attached. Such being the case, the court's approval of the bond should be deemed as the obligee's acceptance of such bond. The same section of the Insurance Code also states that in the case of a continuing bond, the obligor (in this case, petitioner) shall pay the subsequent annual premiums as it falls due until the contract of suretyship is cancelled by a court of competent jurisdiction. The Court reiterated in Carlos v. Sandoval[3] its ruling in Philippine Charter Insurance Corporation v. Court of Appeals[4] that 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. Thus, whether or not the premiums have been paid, the surety's bond subsists and remains valid and enforceable until the court orders the cancellation of the bond or the release of the surety. Respondents, therefore, have no ground in alleging that the P2,000,000.00 bond has become ineffectual merely because petitioner has not been paying premiums for it.
Petitioner should nevertheless be ordered to update its premium payments on its bond to ensure that respondents would not encounter difficulties in the event that the court shall finally adjudge that petitioner was not entitled to the issuance of the attachment writ in the first place.
There is, however, excessive attachment in this case considering that petitioner is deemed to have admitted the total valuation of P18,352,000.00 for the attached properties and the principal claim of petitioner in the amount of P11,557,972.60. In Insular Savings Bank v. Court of Appeals[5] the Court made the pronouncement that the attached property should as much as possible correspond in value to, or approximately match the attaching creditor's principal claim because excessive attachment should be avoided at all times. Section 13, Rule 57 of the 1997 Rules of Civil Procedure provides that if the attachment is excessive, discharge may be had but limited to the excess. Verily, therefore, respondents are entitled to a partial discharge of the attachment.
Since the appraised value of the properties attached amount to a total of P18,352,000.00, [levied upon were two lots covered by TCT Nos. 2416 and 2417 in the name of respondents Spouses Tajo with admitted appraised value of P10,046,000.00, and one lot covered by TCT No. 35236 in the name of respondent Aniana Galang with admitted appraised value of P8,306,000.00], but the principal claim of petitioner is only P11,557,972.60, there is excessive attachment to the extent of P6,794,027.40. If the attachment on the property covered by TCT No. 35236, valued at P8,306,000.00, is lifted, then the value of the remaining attached properties would be deficient by P1,511,972.60.
Section 12, Rule 57 of the 1997 Rules of Civil Procedure provides that "x x x the party whose property has been attached may move for the discharge of the attachment wholly or in part on the security given. The court shall, after due notice and hearing, order the discharge of the attachment if the movant makes a cash deposit or files a counter-bond executed to the attaching party x x x. But if the attachment is sought to be discharged with respect to a particular property, the counter-bond shall be equal to the value of that property as determined by the court." Pursuant to the foregoing rule, respondents may be granted a discharge of the attachment with respect to the lot covered by TCT No. 35236, upon filing of a counter-bond.
As explained above, the attached properties covered by TCT Nos. 2416 and 2417 already amount to P10,046,000.00. Thus, if the attachment on TCT No. 35236 is discharged, then only the amount of P1,511,972.60 of petitioner's claim would not be covered by the value of the remaining attached properties. The counter-bond to be filed by respondents should then be equal only to the difference between petitioner's principal claim of P11,557,972.60 and the appraised value of the properties (lots covered by TCT Nos. 2416 and 2417) that would remain attached, or P1,511,972.60.
IN VIEW OF THE FOREGOING, the attachment on only one of the levied properties, specifically, the lot covered by TCT No. 35236, is DISCHARGED upon respondents' filing of cash deposit or a counter-bond to be approved by the Court, in the amount of P1,511,972.60.
Petitioner is ORDERED to update its premium payments on the P2,000,000.00 bond and SUBMIT PROOF thereof within 10 days from receipt hereof, failing which, the attachment shall be totally discharged.
Let a copy of herein Resolution be furnished Stronghold Insurance Company, Inc..
SO ORDERED.
G.R. No. 157439 - (Multi-Ventures Capital and Management Corporation v. Stalwart Management Services Corp., et al.)
R E S O L U T I O N
Before the Court are respondents' Motion to Lift Attachment, petitioner's Comment thereto, and respondents' Reply.
Respondents seek the lifting of the Writ of Attachment dated July 12, 1991 issued by the Regional Trial Court of Makati City, Branch 134 (RTC) upon petitioner's filing of a bond in the amount of P2,000,000.00 issued by Stronghold Insurance Company, Inc.. It is alleged that several of respondents' properties were levied upon, i.e., two lots covered by Transfer Certificate of Title (TCT) Nos. 2416 and 2417 in the name of respondents Spouses Cesar and Marian Tajo with appraised value of P10,046,000.00, and one lot covered by TCT No. 35236 in the name of respondent Aniana Galang with appraised value of P8,306,000.00.
As grounds for the lifting of the Writ of Attachment, respondents claim that (1) the bond petitioner posted for the issuance of the Writ of Attachment is no longer subsisting as petitioner has not paid the premiums therefor, and (2) the attachment is excessive because as of March 2006, the appraised value of respondents' properties levied upon totals P18,352,000.00, while the principal claim of petitioner is only P11,557,972.60. Respondents pray that an order be issued totally discharging the attachment or, in the alternative, lifting the attachment only with respect to the property covered by TCT No. 35236 whose appraised value is P8,306,000.00.
In its Comment, petitioner did not deny respondents' allegation that the premiums for the bond it posted have not been paid. Neither did it refute respondents' valuation of the properties levied upon. Petitioner merely argued that since the Decision of the Court of Appeals dated February 24, 2003 in favor of respondents has not yet become final and executory, then the order of attachment cannot be considered discharged.
Petitioner's failure to deny respondents' material allegations amount to an implied admission[1] that, indeed, the premiums for its bond has not been paid and that the value of respondents' properties levied upon is P10,046,000.00 and P8,306,000.00 which totals P18,352,000.00, while the principal claim of petitioner is only P11,557,972.60.
However, mere failure of petitioner to pay the premiums for the bond does not automatically mean that the bond has become invalid and unenforceable. Bonds issued by a surety doing an insurance business are considered insurance contracts governed by the Insurance Code. Section 177 of the same Code provides that if the obligee has accepted the bond, then the bond becomes valid and enforceable irrespective of whether or not the premium has been paid by the obligor to the surety. Thus, in Palmares v. Court of Appeals,[2] the Court explained that the contract of suretyship is of a peculiar nature as it holds the surety liable despite the absence of any direct consideration received from either the principal obligor or the creditor.
In the case of an attachment bond, it is the court which requires the posting of such bond for the protection of the party whose property is to be attached. Such being the case, the court's approval of the bond should be deemed as the obligee's acceptance of such bond. The same section of the Insurance Code also states that in the case of a continuing bond, the obligor (in this case, petitioner) shall pay the subsequent annual premiums as it falls due until the contract of suretyship is cancelled by a court of competent jurisdiction. The Court reiterated in Carlos v. Sandoval[3] its ruling in Philippine Charter Insurance Corporation v. Court of Appeals[4] that 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. Thus, whether or not the premiums have been paid, the surety's bond subsists and remains valid and enforceable until the court orders the cancellation of the bond or the release of the surety. Respondents, therefore, have no ground in alleging that the P2,000,000.00 bond has become ineffectual merely because petitioner has not been paying premiums for it.
Petitioner should nevertheless be ordered to update its premium payments on its bond to ensure that respondents would not encounter difficulties in the event that the court shall finally adjudge that petitioner was not entitled to the issuance of the attachment writ in the first place.
There is, however, excessive attachment in this case considering that petitioner is deemed to have admitted the total valuation of P18,352,000.00 for the attached properties and the principal claim of petitioner in the amount of P11,557,972.60. In Insular Savings Bank v. Court of Appeals[5] the Court made the pronouncement that the attached property should as much as possible correspond in value to, or approximately match the attaching creditor's principal claim because excessive attachment should be avoided at all times. Section 13, Rule 57 of the 1997 Rules of Civil Procedure provides that if the attachment is excessive, discharge may be had but limited to the excess. Verily, therefore, respondents are entitled to a partial discharge of the attachment.
Since the appraised value of the properties attached amount to a total of P18,352,000.00, [levied upon were two lots covered by TCT Nos. 2416 and 2417 in the name of respondents Spouses Tajo with admitted appraised value of P10,046,000.00, and one lot covered by TCT No. 35236 in the name of respondent Aniana Galang with admitted appraised value of P8,306,000.00], but the principal claim of petitioner is only P11,557,972.60, there is excessive attachment to the extent of P6,794,027.40. If the attachment on the property covered by TCT No. 35236, valued at P8,306,000.00, is lifted, then the value of the remaining attached properties would be deficient by P1,511,972.60.
Section 12, Rule 57 of the 1997 Rules of Civil Procedure provides that "x x x the party whose property has been attached may move for the discharge of the attachment wholly or in part on the security given. The court shall, after due notice and hearing, order the discharge of the attachment if the movant makes a cash deposit or files a counter-bond executed to the attaching party x x x. But if the attachment is sought to be discharged with respect to a particular property, the counter-bond shall be equal to the value of that property as determined by the court." Pursuant to the foregoing rule, respondents may be granted a discharge of the attachment with respect to the lot covered by TCT No. 35236, upon filing of a counter-bond.
As explained above, the attached properties covered by TCT Nos. 2416 and 2417 already amount to P10,046,000.00. Thus, if the attachment on TCT No. 35236 is discharged, then only the amount of P1,511,972.60 of petitioner's claim would not be covered by the value of the remaining attached properties. The counter-bond to be filed by respondents should then be equal only to the difference between petitioner's principal claim of P11,557,972.60 and the appraised value of the properties (lots covered by TCT Nos. 2416 and 2417) that would remain attached, or P1,511,972.60.
IN VIEW OF THE FOREGOING, the attachment on only one of the levied properties, specifically, the lot covered by TCT No. 35236, is DISCHARGED upon respondents' filing of cash deposit or a counter-bond to be approved by the Court, in the amount of P1,511,972.60.
Petitioner is ORDERED to update its premium payments on the P2,000,000.00 bond and SUBMIT PROOF thereof within 10 days from receipt hereof, failing which, the attachment shall be totally discharged.
Let a copy of herein Resolution be furnished Stronghold Insurance Company, Inc..
SO ORDERED.
Very truly yours,
(Sgd.) LUCITA ABJELINA-SORIANO
Clerk of Court
(Sgd.) LUCITA ABJELINA-SORIANO
Clerk of Court
Endnotes:
[1] RULES OF COURT, Rule 130, Sec. 32; See also Grefaldeo v. Lacson, 355 Phil. 266, 271 (1998).
[2] 351 Phil. 664, 680(1998).
[3] G.R. No. 135830, September 30, 2005, 471 SCRA 266, 298.
[4] G.R. No. 88379, November 15, 1989, 179 SCRA 468, 478.
[5] G.R. No. 123638, June 15, 2005, 460 SCRA 122, 128-129.
