G.R. No. 123638 ; June 15, 2005
INSULAR SAVINGS BANK, Petitioner, vs. COURT OF APPEALS, JUDGE OMAR U. AMIN, in his capacity as Presiding Judge of Branch 135 of the Regional Trial Court of Makati, and FAR EAST BANK AND TRUST COMPANY, Respondents.

FACTS

Far East Bank and Trust Company (FEBTC) filed a civil case against Insular Savings Bank (ISB) to recover ₱25.2 million related to unfunded checks. The trial court granted FEBTC’s application and issued a writ of preliminary attachment for the said amount. During the pendency of a parallel arbitration proceeding, ISB and FEBTC agreed to temporarily divide the disputed ₱25.2 million equally, with each holding ₱12.6 million. Subsequently, ISB filed a motion to discharge the writ of attachment by posting a counter-bond. It offered a counter-bond in the amount of ₱12.6 million, representing the portion of the claim currently held by FEBTC.
The Regional Trial Court (RTC) denied ISB’s motion. It ruled that the counter-bond must be based on FEBTC’s total claim in its complaint, which included not only the principal amount but also unliquidated claims for actual damages, exemplary damages, attorney’s fees, and litigation expenses. The RTC computed the required counter-bond at ₱27,237,700.00. The Court of Appeals dismissed ISB’s certiorari petition, finding no grave abuse of discretion in the RTC’s order, even while acknowledging a possible error in computation.

ISSUE

Whether the Court of Appeals erred in not ruling that the trial court committed grave abuse of discretion in denying ISB’s motion to discharge the attachment via a counter-bond of ₱12.6 million.

RULING

The Supreme Court ruled for ISB and reversed the appellate court’s decision. The legal logic centers on the proper interpretation of Section 12, Rule 57 of the Rules of Court on discharging an attachment by counter-bond. The Court clarified that the amount of the counter-bond should be based on the amount for which the order of attachment was issued, which is the value of the attached property or the amount sufficient to satisfy the applicant’s demand, exclusive of costs. The “demand” refers to the principal claim stated in the application for attachment, not to unliquidated damages.
In this case, the writ of preliminary attachment was issued specifically for the principal sum of ₱25.2 million. The claims for actual damages, exemplary damages, and attorney’s fees are unliquidated and contingent upon the outcome of the trial; they cannot be included in computing the counter-bond. Furthermore, given the parties’ agreement to split the principal amount, the actual claim secured by the attachment at the time of ISB’s motion was only ₱12.6 million—the portion held by FEBTC. Therefore, ISB’s offer of a counter-bond in that amount was sufficient to secure the attached claim. The RTC’s insistence on a bond covering unliquidated claims constituted a grave abuse of discretion. The Supreme Court ordered the discharge of the attachment upon ISB’s posting of the ₱12.6 million counter-bond.