G.R. No. 185734 ; July 3, 2013
ALFREDO C. LIM, JR., PETITIONER, vs. SPOUSES TITO S. LAZARO AND CARMEN T. LAZARO, RESPONDENTS.

FACTS

Petitioner Alfredo C. Lim, Jr. filed a complaint for sum of money with a prayer for a writ of preliminary attachment against respondents Spouses Lazaro to recover amounts from several dishonored checks. The Regional Trial Court (RTC) granted the writ, and three parcels of land owned by the spouses were levied upon. The spouses, in their answer, contested the cause of action and the imputation of fraud. Subsequently, the parties entered into a Compromise Agreement, whereby the spouses agreed to pay the petitioner a specified sum on an installment basis until October 2013. The RTC approved this agreement in an Amended Decision.
Following the approval of the compromise, the respondents filed an Omnibus Motion to lift the writ of preliminary attachment annotated on their property titles. The RTC granted the motion, ruling that the writ, being a provisional remedy, had no more leg to stand on since the principal action was deemed closed and terminated by the compromise judgment. The Court of Appeals affirmed this ruling, prompting the petitioner to elevate the case to the Supreme Court.

ISSUE

Whether the writ of preliminary attachment was properly lifted by the lower courts following the approval of the Compromise Agreement.

RULING

The Supreme Court ruled that the discharge of the writ was improper. The Court clarified that a writ of preliminary attachment is an ancillary remedy intended to preserve and protect a party’s rights pending the final settlement of the obligation. Crucially, the attachment lien continues until the debt is paid, the judgment is satisfied, or the attachment is properly discharged.
The legal logic is that a compromise agreement, once approved by the court, has the force of res judicata and is immediately executory. However, it does not automatically extinguish an existing attachment lien. The lien persists as security for the fulfillment of the very obligation stipulated in the compromise. Since the Compromise Agreement in this case established a future installment plan extending to 2013, the respondents’ debt was not yet fully paid at the time they sought to lift the writ. Therefore, the attachment should have remained to secure the complete satisfaction of the judgment obligation. The provisional purpose of the writ transforms into a security for the executory judgment. The lower courts erred in treating the compromise judgment as a terminal point that nullified the ancillary remedy, overlooking the continuing function of the attachment lien to ensure the enforcement of the unpaid judgment debt.