China Banking Corporation v. Asian Construction and Development corporation engaged in the construction business.

If
Corporation RTC’s decision of granting the WPA is reversed and a
G.R. No. 158271 | April 8, 2008 | Austria-Martinez, J. | Rule 57, Secs. 4 & 11 final judgment will be rendered in favor of ACDC, great
prejudice will result to the latter.
Nature: Petition for review on certiorari d. China Bank filed a Motion for Reconsideration, which was
denied.
Facts: 5. China Bank filed a Rule 45 petition and attached allegedly recent
1. Petitioner China Banking Corporation granted an Omnibus Credit line of pictures of the levied properties. It argued that
P90 million to Respondent Asian Construction and Development a. If CA allowed the attached properties to be sold, whatever
Corporation (ACDC). monetary value which the attached properties still have will be
2. ACDC failed to comply with its obligations under the credit line, so China realized and saved for both parties;
Bank filed a complaint for sum of money and damages with prayer b. If ACDC were to prevail in the final judgment of the collection
for the issuance of writ of preliminary attachment (WPA) before suit, ACDC can proceed with the bond posted by China Bank.
RTC Makati Br. 138.
a. RTC granted the WPA. Issues:
b. Sheriff’s Report showed that the WPA was implemented by 1. WON R45 petition was proper – NO.
levying on ACDC’s personal properties, which included vans, a. The assailed CA Resolutions are interlocutory in nature since
dump trucks, cement mixers, cargo trucks, utility vehicles, they don’t completely dispose of the case but leave something to
machinery, equipment and office machines and fixtures. be done upon the merits.
c. China Bank filed a motion for summary judgment, which was b. Proper remedy should have been R65 because under R41,
granted. Sec. 1(b) as amended by A.M. No. 07-7-12-SC 1 does not
d. ACDC filed its Notice of Appeal. allow an appeal for an interlocutory order.
3. China Bank filed a Motion to Take Custody of Attached Properties c. China Bank’s petition should have been dismissed outright, but
with Motion for Grant of Authority to Sell to the Branch Sheriff with SC, in the past, has treated R45 petitions as R65 petitions if the
the RTC. petitions were grounded on question of jurisdiction or the act
a. ACDC filed its Opposition and argued that no sale of the levied complained of was committed by a court with grave abuse of
properties may be had if there is no final and executory discretion amounting to lack or excess of jurisdiction.
judgment against it. 2. WON the R45 petition should be treated as a R65 petition – NO.
4. China Bank partially appealed RTC’s judgment for its failure to award a. The present petition does not involve any issue on jurisdiction,
interest on one of the promissory notes with the CA. nor does it show that CA committed GAOD when it denied the
a. Records of the case were elevated to the CA. motion to sell the attached property.
b. China Bank filed a Motion for Leave for Grant of Authority to
Sell Attached Properties with the CA.
i. It argued that the levied properties located in ACDC’s 1 Section 1. Subject of appeal.·An appeal may be taken from a judgment or final order
stockyard located at Silang, Cavite, and its branch office that completely disposes of the case, or of a particular matter therein when declared by
in Mayamot, Antipolo City, were exposed to the natural these Rules to be appealable.
elements and adverse weather, making it perishable in
nature. No appeal may be taken from:
c. CA denied the Motion and ruled that the selling of the attached
properties is premature since x xx x
i. The attached properties are not perishable in nature; (b) An interlocutory order;
ii. It only serves the interest of China Bank, and not of x xx x
ACDC. The preservation of the properties was of In any of the foregoing instances, the aggrieved party may file an appropriate special
paramount importance for ACDC given that it was a civil action as provided in Rule 65. (Emphasis supplied).
3. WON CA committed GAOD in denying the motion to sell the attached
property – NO.
a. Sec. 11, R57 2 provides that an attached property may be
sold after levy on attachment and before entry of judgment
whenever it shall be made to appear to the court in which
the action is pending, upon hearing with notice to both
parties, that the attached property is perishable or that the
interests of all the parties to the action will be subserved by
the sale of the attached property.
4. WON the levied properties (see fact 2b) were perishable in nature under
R57, Sec. 11 – NO.
a. China Bank: The levied properties were perishable in nature
because to allow said properties to depreciate, perish or rot
while the main case is pending, the attached properties will
continue losing their worth, rendering the rules on preliminary
attachment nugatory. SC of California defined “perishable
property” in Witherspoon v. Cross as goods which decay and
lose their value if not speedily put up to their intended use; but
where the time contemplated is necessarily long, the term may
embrace property liable merely to material depreciation in value
from other cause than such decay.
b. SC had to look at US jurisprudence because no local
jurisprudence or authoritative work has touched upon this
question and PH laws were patterned after US laws.
i. Mossler Acceptance Co. v. Denmark discussed if cars
and airplanes were perishable because the tires tend to
dry-rot in storage, batteries to deteriorate, crankcases to
become damaged, paint and upholstery to fade, that
generally cars tend to depreciate while in storage. SC of
Louisiana held that while there might be an economic
depreciation in the value of cars during storage, there is
no material deterioration of the cars or its accessories if
it were properly taken care of.
ii. McCreery v. Berney National Bank discussed the
perishable nature of office furniture, office equipment,
accessories, and supplies. SC of Alabama discussed
2 Sec. 11. When attached property may be sold after levy on attachment and before
entry of judgment.· Whenever it shall be made to appear to the court in which the action
is pending, upon hearing with notice to both parties, that the property attached is
perishable, or that the interests of all the parties to the action will be subserved by
the sale thereof, the court may order such property to be sold at public auction in such
manner as it may direct, and the proceeds of such sale to be deposited in court to abide
the judgment in the action. (Emphasis supplied)
that whatever may be the character of the property, if the
court is satisfied that, either by reason of its perishable
nature, or because of the expense of keeping it until the
termination of the litigation, it will prove, or be likely to
prove, fruitless to the creditor, and the purpose of its
original seizure will probably frustrated, the sale of the
attached property is justified.
c. There was no evidence submitted to support and substantiate
China Bank’s argument before the CA regarding the
deterioration of the levied properties. China Bank attached
pictures for the first time in its appeal before the SC in order to
convince the SC of the deteriorated condition.
d. The determination on whether the attached properties were
properly cared for is a question of fact, which SC cannot do in a
R65 petition. Furthermore, SC does not make findings of facts
specially on evidence raised for the first time on appeal.
5. WON ACDC could claim from China Bank’s bond if the sale were to
push through, but eventually ACDC will prevail in the final judgment –
NO.
a. China Bank’s argument (fact 5b) is specious and misplaced.
b. Sec. 4, R573 provides that the bond posted by the applicant
answers for the damages the adverse party may sustain if
the court finally adjudges that the applicant was not entitled
to the attachment.
c. ACDC may only claim from the bond for the damages resulting
from the attachment itself and not from the sale prior to final
judgment.
d. Sale of attached property before final judgment is an
equitable remedy provided for the convenience of the
parties and preservation of the property.
Dispositive: WHEREFORE, the petition is DENIED. The assailed
Resolutions of the Court of Appeals dated October 14, 2002 and May 16,
2003 in CA-G.R. CV No. 72175 are hereby AFFIRMED.
3 Section 4. Condition of applicant’s bond.· The party applying for the order must
thereafter give a bond executed to the adverse party in the amount fixed by the court in
its order granting the issuance of the writ, conditioned that the latter will pay all the costs
which may be adjudged to the adverse party and all the damages which he may sustain
by reason of the attachment, if the court shall finally adjudge that the applicant was not
entitled thereto.