Lim vs Lazaro

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

FACTS: Petitioner Lim Jr filed a complaint for a sum of money with a prayer for the issuance of a writ of preliminary attachment against the respondent Sps Lazaro. The RTC granted the writ of preliminary attachment application and upon the posting of the required bond issued the corresponding writ on October 14, 2005. 3 parcels of land owned by the respondent spouses were levied upon.

The parties later entered into a Compromise Agreement whereby Sps. Lazaro agreed to pay Lim, Jr. the amount of P2,351,064.80 on an installment basis, following a schedule of payments covering the period from September 2006 until October 2013. The RTC rendered a decision on the basis of the compromise.

Sps. Lazaro then filed an Omnibus Motion, seeking to lift the writ of preliminary attachment annotated on the subject TCTs.

In granting the Motion, the RTC ruled that a writ of preliminary attachment is a mere provisional or ancillary remedy, resorted to by a litigant to protect and preserve certain rights and interests pending final judgment. Considering that the case had already been considered closed and terminated by the rendition of the decision based on the compromise agreement, the writ of preliminary attachment should be lifted and quashed.

ISSUE: Whether or not the writ of preliminary attachment was properly lifted.

HELD: NO. By its nature, preliminary attachment, under Rule 57 of the Rules of Court (Rule 57), is an ancillary remedy applied for not for its own sake but to enable the attaching party to realize upon the relief sought and expected to be granted in the main or principal action; it is a measure auxiliary or incidental to the main action. As such, it is available during its pendency which may be resorted to by a litigant to preserve and protect certain rights and interests during the interim, awaiting the ultimate effects of a final judgment in the case. In addition, attachment is also availed of in order to acquire jurisdiction over the action by actual or constructive seizure of the property in those instances where personal or substituted service of summons on the defendant cannot be effected.
In this relation, while the provisions of Rule 57 are silent on the length of time within which an attachment lien shall continue to subsist after the rendition of a final judgment, jurisprudence dictates that the said lien continues until the debt is paid, or the sale is had under execution issued on the judgment or until the judgment is satisfied, or the attachment discharged or vacated in the same manner provided by law.
Applying these principles, the Court finds that the discharge of the writ of preliminary attachment against the properties of Sps. Lazaro was improper.
Records indicate that while the parties have entered into a compromise agreement which had already been approved by the RTC in its January 5, 2007 Amended Decision, the obligations thereunder have yet to be fully complied with – particularly, the payment of the total compromise amount of P2,351,064.80. Hence, given that the foregoing debt remains unpaid, the attachment of Sps. Lazaro’s properties should have continued to subsist.
In the earlier case of Chemphil Export & Import Corporation v. CA, the Court ruled that a writ of attachment is not extinguished by the execution of a compromise agreement between the parties. In that case the Court held thus:

x x x x
The case at bench admits of peculiar character in the sense that it involves a compromise agreement. Nonetheless, x x x. The parties to the compromise agreement should not be deprived of the protection provided by an attachment lien especially in an instance where one reneges on his obligations under the agreement, as in the case at bench, where Antonio Garcia failed to hold up his own end of the deal, so to speak.
x x x x

If we were to rule otherwise, we would in effect create a back door by which a debtor can easily escape his creditors. Consequently, we would be faced with an anomalous situation where a debtor, in order to buy time to dispose of his properties, would enter into a compromise agreement he has no intention of honoring in the first place. The purpose of the provisional remedy of attachment would thus be lost. It would become, in analogy, a declawed and toothless tiger. (Emphasis and underscoring supplied; citations omitted)

In fine, the Court holds that the writ of preliminary attachment subject of this case should be restored and its annotation revived in the subject TCTs, re-vesting unto Lim, Jr. his preferential lien over the properties covered by the same as it were before the cancellation of the said writ. Lest it be misunderstood, the lien or security obtained by an attachment even before judgment, is in the nature of a vested interest which affords specific security for the satisfaction of the debt put in suit.30 Verily, the lifting of the attachment lien would be tantamount to an abdication of Lim, Jr.’s rights over Sps. Lazaro’s properties which the Court, absent any justifiable ground therefor, cannot allow.