Lim vs Lazaro GR 185734 July 3, 2013
Facts:
On August 22, 2005, Lim, Jr. filed a complaint for sum of money with prayer for the issuance of a writ of preliminary
attachment before the RTC, seeking to recover from respondents-spouses Tito S. Lazaro and Carmen T. Lazaro the sum of
₱2,160,000.00, which represented the amounts stated in several dishonored checks issued by the latter to the former, as well
as interests, attorney’s fees, and costs.
The RTC granted the writ of preliminary attachment application and upon the posting of the required ₱2,160,000.00 bond,
issued the corresponding writ on October 14, 2005.
o 3 parcels of land situated in Bulacan, covered by TCT Nos. T-64940, T-64939, and T-86369 (subject TCTs),
registered in the names of Sps. Lazaro, were levied upon.
In their Answer with Counterclaim, Sps. Lazaro averred, among others, that Lim, Jr. had no cause of action against them
since:
o (a) Colim Merchandise (Colim), and not Lim, Jr., was the payee of the 15 Metrobank checks; and
o (b) the PNB and Real Bank checks were not drawn by them, but by Virgilio Arcinas and Elizabeth Ramos,
respectively.
While they admit their indebtedness to Colim, Sps. Lazaro alleged that the same had already been substantially reduced on
account of previous payments which were apparently misapplied. They sought for an accounting and reconciliation of records
to determine the actual amount due. They likewise argued that no fraud should be imputed against them as the aforesaid
checks issued to Colim were merely intended as a form of collateral. Hinged on the same grounds, Sps. Lazaro equally
opposed the issuance of a writ of preliminary attachment.
the parties entered into a Compromise Agreement whereby Sps. Lazaro agreed to pay Lim, Jr. the amount of ₱2,351,064.80
on an installment basis, following a schedule of payments covering the period from September 2006 until October 2013, under
the following terms:
o (a) that should the financial condition of Sps. Lazaro improve, the monthly installments shall be increased in order to
hasten the full payment of the entire obligation; and
o (b) that Sps. Lazaro’s failure to pay any installment due or the dishonor of any of the postdated checks delivered in
payment thereof shall make the whole obligation immediately due and demandable.
The compromise agreement was approved by the RTC.
Sps. Lazaro filed an Omnibus Motion, seeking to lift the writ of preliminary attachment annotated on the subject TCTs, which
the RTC granted on March 29, 2007.
o It ruled that a writ of preliminary attachment is a mere provisional or ancillary remedy, resorted to by a litigant to
protect and preserve certain rights and interests pending final judgment. Considering that the case had already been
considered closed and terminated by the rendition of the January 5, 2007 Amended Decision on the basis of the
September 22, 2006 compromise agreement, the writ of preliminary attachment should be lifted and quashed.
o it ordered the Registry of Deeds of Bulacan to cancel the writ’s annotation on the subject TCTs.
Lim, Jr filed MR, but it was denied. A petition for certiorari was filed before the CA
o The CA rendered the assailed decision, finding no grave abuse of discretion on the RTC’s part.
o It observed that a writ of preliminary attachment may only be issued at the commencement of the action or at any
time before entry of judgment.
o Thus, since the principal cause of action had already been declared closed and terminated by the RTC, the
provisional or ancillary remedy of preliminary attachment would have no leg to stand on, necessitating its discharge.
Lim, Jr filed MR but was denied. Hence, this petition.
Issue: WON the writ of preliminary attachment was properly lifted?
Ruling: NO. writ of attachment is not extinguished by the execution of a compromise agreement between the parties.
By its nature, preliminary attachment, under Rule 57, is an ancillary remedy applied for not for its own sake but to enable the
attaching party to realize upon the relief sought and expected to be granted in the main or principal action; it is a measure
auxiliary or incidental to the main action.
As such, it is available during its pendency which may be resorted to by a litigant to preserve and protect certain rights and
interests during the interim, awaiting the ultimate effects of a final judgment in the case. In addition, attachment is also availed
of in order to acquire jurisdiction over the action by actual or constructive seizure of the property in those instances where
personal or substituted service of summons on the defendant cannot be effected.
In this relation, while the provisions of Rule 57 are silent on the length of time within which an attachment lien shall continue to
subsist after the rendition of a final judgment, jurisprudence dictates that the said lien continues until the debt is paid, or the
sale is had under execution issued on the judgment or until the judgment is satisfied, or the attachment discharged or vacated
in the same manner provided by law.
Application
Applying these principles, the Court finds that the discharge of the writ of preliminary attachment against the properties of Sps.
Lazaro was improper.
Records indicate that while the parties have entered into a compromise agreement which had already been approved by the
RTC in its January 5, 2007 Amended Decision, the obligations thereunder have yet to be fully complied with – particularly, the
payment of the total compromise amount of ₱2,351,064.80. Hence, given that the foregoing debt remains unpaid, the
attachment of Sps. Lazaro’s properties should have continued to subsist.
In Chemphil Export & Import Corporation v. CA, the Court pronounced that a writ of attachment is not extinguished by the
execution of a compromise agreement between the parties, viz:
Did the compromise agreement between Antonio Garcia and the consortium discharge the latter’s
attachment lien over the disputed shares?
CEIC argues that a writ of attachment is a mere auxiliary remedy which, upon the dismissal of the case, dies
a natural death. Thus, when the consortium entered into a compromise agreement, which resulted in the termination
of their case, the disputed shares were released from garnishment.
We disagree. To subscribe to CEIC’s contentions would be to totally disregard the concept and purpose of a
preliminary attachment.
xxxx
The case at bench admits of peculiar character in the sense that it involves a compromise agreement.
Nonetheless, x x x. The parties to the compromise agreement should not be deprived of the protection provided by an
attachment lien especially in an instance where one reneges on his obligations under the agreement, as in the case
at bench, where Antonio Garcia failed to hold up his own end of the deal, so to speak.
xxxx
If we were to rule otherwise, we would in effect create a back door by which a debtor can easily escape his
creditors. Consequently, we would be faced with an anomalous situation where a debtor, in order to buy time to
dispose of his properties, would enter into a compromise agreement he has no intention of honoring in the first place.
The purpose of the provisional remedy of attachment would thus be lost. It would become, in analogy, a declawed
and toothless tiger.
In fine, the Court holds that the writ of preliminary attachment subject of this case should be restored and its annotation
revived in the subject TCTs, re-vesting unto Lim, Jr. his preferential lien over the properties covered by the same as it were
before the cancellation of the said writ. Lest it be misunderstood, the lien or security obtained by an attachment even before
judgment, is in the nature of a vested interest which affords specific security for the satisfaction of the debt put in suit.
Verily, the lifting of the attachment lien would be tantamount to an abdication of Lim, Jr.’s rights over Sps. Lazaro’s properties
which the Court, absent any justifiable ground therefor, cannot allow.
Petition is granted
