G.R. No. L-12736; July 31, 1961
FRANCISCO L. LAZATIN, plaintiff-appellant, vs. ANGEL C. TWAÑO and GREGORIO T. CASTRO, defendants-appellees.

FACTS

This case originated from a prior litigation (Civil Case No. 213) where the Court of Appeals declared Twaño, Castro, and Lazatin as co-owners in a surplus truck business and ordered Lazatin to pay Twaño and Castro P10,000. The decision was executed, leading to the levy and auction sale of Lazatin’s properties, purchased by Twaño and Castro. Before the redemption period expired, Lazatin deposited the redemption price with the sheriff. However, on the same day he filed this present action to recover a separate sum from Twaño and Castro, he also secured a writ of attachment against the very redemption money he had deposited, causing the sheriff to withhold its release to the defendants.
The defendants successfully moved to dissolve the writ and filed an answer with counterclaims for damages. After Lazatin’s death and the substitution of his estate, the trial court dismissed his complaint on the grounds of res judicata and prescription. The court then proceeded to award damages on the counterclaim, ordering Lazatin’s estate to pay attorney’s fees, moral damages, and interest on the withheld redemption money. The estate appealed the award of damages.

ISSUE

The primary issue is whether the trial court correctly awarded moral damages and attorney’s fees to the defendants-appellees based on the wrongful issuance of the writ of attachment.

RULING

The Supreme Court modified the trial court’s decision. It held that moral damages were improperly awarded. For moral damages to be recoverable in cases involving a writ of attachment, the attachment must be maliciously sued out, analogous to an action for malicious prosecution. The record contained no finding that Lazatin acted with malice in seeking the attachment. The mere fact that the attachment was wrongfully issued is insufficient; there must be evidence of ill will or a sinister intent to vex or harass. Without such a showing of malice, the award for moral damages cannot stand.
However, the Court affirmed the award of attorney’s fees, albeit on a different legal basis than the trial court’s. The lower court awarded fees under Article 2208(4) of the Civil Code, which requires a “clearly unfounded” action. The Supreme Court found that while Lazatin’s complaint was dismissed on technical grounds (res judicata and prescription), this did not necessarily render the suit “clearly unfounded,” as such defenses involve complex legal questions. Nevertheless, the Court upheld the P3,000.00 attorney’s fees award under Article 2208(11), which allows recovery when deemed just and equitable. The defendants were compelled to incur legal expenses to defend against the suit initiated by Lazatin, and the amount was reasonable for the legal services rendered. The award of interest on the wrongfully withheld redemption money was not contested on appeal and was thus affirmed.