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SECURITY PACIFIC ASSURANCE CORPORATION v. AMELIA TRIA-INFANTE

FACTS:

Reynaldo Anzures filed a complaint against Teresita Villaluz for violation of Batas Pambansa Blg. 22. The trial court issued an order for the issuance of a writ of preliminary attachment, and certain properties of Villaluz were attached. The trial court later rendered a decision acquitting Villaluz of the crime charged but held her civilly liable. Villaluz appealed to the Court of Appeals, which affirmed the decision. The case was elevated to the Supreme Court, and during its pendency, Villaluz posted a counter-bond. After the Supreme Court affirmed the decision, Anzures moved for execution of judgment before the trial court. The trial court issued a writ of execution, but the sheriff could not serve it on Villaluz as she no longer resided at her given address. The sheriff sent a Notice of Garnishment to the insurance company that issued the counter-bond, but the company refused to assume its obligation. Anzures filed a Motion to Proceed with Garnishment, which was granted by the trial court. The insurance company filed a petition for certiorari with the Court of Appeals, seeking to nullify the order granting the motion to proceed with garnishment. The Court of Appeals upheld the trial court's order, and its decision was affirmed on reconsideration. The insurance company filed a petition for review on certiorari before the Supreme Court, raising the issue of whether the Court of Appeals erred in affirming the order allowing execution on the counter-bond.

ISSUES:

  1. Whether the failure to discharge the writ of attachment prevents the accrual of liability on the counter-bond.

  2. Whether the agreement between petitioner and Villaluz is a suretyship agreement.

  3. Whether the attachment was automatically discharged by the filing of the counter-bond.

  4. Whether a specific order for the discharge of the attachment is required when a counter-bond has been filed.

  5. Whether the attachment has been properly discharged.

  6. Whether or not the RTC committed grave abuse of discretion in granting petitioner's motion for extension to file comment.

  7. Whether or not the CA erred in affirming the RTC's decision granting petitioner's motion for extension to file comment.

RULING:

  1. The failure to discharge the writ of attachment does not prevent the accrual of liability on the counter-bond. Once the judgment in favor of the plaintiff becomes executory and the execution is returned unsatisfied, the liability of the bond automatically attaches.

  2. The agreement between petitioner and Villaluz is a suretyship agreement. The counter-bond itself states that the parties jointly and severally bind themselves to secure the payment of any judgment that the plaintiff may recover against the defendant in the action.

  3. The attachment was automatically discharged by the filing of the counter-bond. The filing of the counter-bond acts as security for the payment of any judgment that the attaching party may obtain and serves as a replacement for the attached properties.

  4. A specific order for the discharge of the attachment is not required when a counter-bond has been filed. The court has already declared that the petitioner is solidarily bound with the party who filed the counter-bond, therefore, a separate order for discharge would be unnecessary.

  5. The attachment has been properly discharged upon the filing of the counter-attachment bond. The counter-attachment bond made the petitioner corporation liable for any judgment that may be recovered by the party who sought attachment.

  6. No. The RTC did not commit grave abuse of discretion in granting petitioner's motion for extension to file comment. The court has the discretion to allow a motion for extension of time to file pleadings and other documents.

  7. No. The CA did not err in affirming the RTC's decision granting petitioner's motion for extension to file comment. The CA explained that the petitioner had a valid reason for the delay and that the interest of justice would be better served by allowing the extension.

PRINCIPLES:

  • The liability on a counter-bond automatically attaches once the judgment for the plaintiff becomes executory and the execution is returned unsatisfied.

  • Counter-bonds posted to obtain the lifting of a writ of attachment serve as security for the payment of any judgment that the attaching party may obtain.

  • The liability of the surety in a suretyship agreement is direct, primary, and absolute.

  • Suretyship is a contractual relation where one person, the surety, engages to be answerable for the debt, default, or miscarriage of another, known as the principal. The surety's obligation is collateral to the obligation contracted by the principal.

  • The filing of a counter-bond automatically discharges the attachment and acts as security for the judgment that the plaintiff may recover.

  • Section 12, Rule 57 of the Rules of Court provides for the discharge of attachment upon giving counter-bond.

  • The posting of a counter-bond does not automatically discharge the writ of attachment. It is after a hearing and after the judge has ordered the discharge of the attachment that it is properly discharged.

  • A judgment must be read in its entirety and construed as a whole to give effect to every word and part, if possible, and to effectuate the intention and purpose of the Court.

  • The court has the discretion to grant or deny a motion for extension of time to file pleadings and other documents.

  • The interest of justice should be considered in deciding whether to grant or deny a motion for extension.