G.R. No. L-71917. June 30, 1987.
BELISLE INVESTMENT & FINANCE CO., INC. and SMITH, BELL & CO., INC., petitioners, vs. STATE INVESTMENT HOUSE, INC. and THE INTERMEDIATE APPELLATE COURT, respondents.

FACTS

State Investment House, Inc. (STATE) extended financial assistance to Belisle Investment and Finance Co., Inc. (BELISLE), with Smith, Bell & Co., Inc. (SMITH BELL) acting as a surety. Upon BELISLE’s default on its obligations amounting to over P6.8 million, STATE filed a complaint with a prayer for a writ of preliminary attachment in the Regional Trial Court. The trial court granted the application ex parte and issued the writ, leading to the levy on properties of both BELISLE and SMITH BELL.
The petitioners promptly filed a motion to discharge the attachment and posted a counterbond in the full amount claimed. The trial court heard arguments on the motion but allowed the parties several days to submit further pleadings before it would resolve the matter. However, before the trial court could issue its ruling on the motion to discharge, the petitioners filed a petition for certiorari, prohibition, and mandamus with the Supreme Court, seeking to restrain the enforcement of the attachment. The Supreme Court referred the case to the Intermediate Appellate Court (IAC), which denied the petition. The IAC’s denial was subsequently appealed to the Supreme Court.

ISSUE

Whether the Intermediate Appellate Court erred in denying the petition for certiorari, which sought to nullify the writ of attachment and restrain its enforcement despite the posting of a counterbond.

RULING

The Supreme Court affirmed the IAC’s decision and denied the petition. The Court held that the petitioners’ recourse to certiorari was premature. The mere posting of a counterbond does not automatically dissolve a writ of preliminary attachment. Under Section 12, Rule 57 of the Rules of Court, the discharge of an attachment via a counterbond requires a hearing and a subsequent court order. Here, the trial court had already conducted a hearing on the motion to discharge and was in the process of receiving the parties’ final pleadings before rendering its decision. The petitioners filed their certiorari petition while the matter was still pending resolution before the trial court.
The Supreme Court emphasized the doctrine of exhaustion of judicial remedies, which requires that a lower court be given the full opportunity to correct its own alleged errors before a party resorts to extraordinary writs in a higher court. The petitioners did not allow the trial court to complete its deliberative process and rule on the motion to discharge. Consequently, the certiorari petition was filed prematurely. The case was remanded to the trial court for further proceedings, including the resolution of the pending motion to discharge the attachment and for trial on the merits. The Court also noted that preliminary injunctions and attachments are extraordinary remedies to be granted with caution, and ex parte issuances are generally discouraged in favor of hearing both sides.