GR 135548; (September, 2000) (Digest)
G.R. No. 135548 ; September 29, 2000
FAR EAST BANK AND TRUST COMPANY, petitioner, vs. COURT OF APPEALS and SMP, INC., respondents.
FACTS
Far East Bank and Trust Company (FEBTC) filed a collection suit against Clothespak Manufacturing Phils., Inc. and obtained a writ of preliminary attachment. The sheriff levied on properties found at Clothespak’s premises. Respondent SMP, Inc. filed a third-party claim over 4,000 bags of polystyrene products among the attached properties, asserting ownership based on a sales agreement where it retained title until full payment, which did not occur as Clothespak’s checks were dishonored. FEBTC posted an indemnity bond, and the trial court handling the main case advised SMP to file a separate vindicatory action.
SMP subsequently filed a complaint for damages against FEBTC, the sheriff, and the surety (Siddcor Insurance) before the Quezon City RTC. FEBTC moved to dismiss, arguing SMP failed to file its action within 120 days from the bond’s posting as purportedly required by Rule 39, Section 17 of the Rules of Court. The trial court denied FEBTC’s motion, a decision affirmed by the Court of Appeals. FEBTC elevated the case to the Supreme Court via petition for review.
ISSUE
Whether the Court of Appeals erred in affirming the trial court’s denial of FEBTC’s motion to dismiss, specifically on the ground that SMP’s action was not filed within the 120-day period under Rule 39, Section 17.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals. The legal logic is that Rule 39, Section 17 applies specifically to third-party claims arising from execution of a final judgment, not from preliminary attachment issued at the commencement of an action. The provision cited by FEBTC governs claims against a sheriff’s indemnity bond posted after a third-party claim is made during execution to enforce a final judgment.
In this case, the attachment was preliminary and issued at the inception of FEBTC’s collection suit, long before any final judgment and writ of execution. The applicable rule for such pre-judgment attachment is Rule 57, which contains no 120-day filing requirement for a separate damages action. Therefore, SMP’s complaint for damages, filed as a separate vindicatory action after the main case was decided and the properties were sold at auction, was timely. The trial court correctly denied the motion to dismiss, and the Court of Appeals committed no reversible error in its affirmance.