provisional remedies

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FIRST DIVISION [G.R. No. 123358. February 1, 2000] FCY CONSTRUCTION GROUP, INC., and FRANCIS C. YU, petitioners, vs. THE COURT OF APPEALS, THE HON. JOSE C. DE LA RAMA, Presiding Judge, Branch 139, Regional Trial Court, NCJR, Makati City, Metro Manila, and LEY CONSTRUCTION AND DEVELOPMENT CORPORATION, respondents. D E C I S I O N YNARES_SANTIAGO, J.: On June 29, 1993, private respondent Ley Construction and Development Corporation filed a Complaint for collection of a sum of money with application for preliminary attachment against petitioner FCY Construction Group, Inc. and Francis C. Yu with the Makati Regional Trial Court which was docketed as Civil Case No. 93-2112. Private respondent alleged that it had a joint venture agreement with petitioner FCY Construction Group, Inc. (wherein petitioner Francis C. Yu served as President) over the Tandang Sora Commonwealth Flyover government project for which it had provided funds and construction materials. The Complaint was filed in order to compel petitioners to pay its half share in the collections received in the project as well as those yet to be received therein. In support of its application for a writ of attachment, private respondent alleged that petitioners were guilty of fraud in incurring the obligation and had fraudulently misapplied or converted the money paid them, to which it had an equal share. On July 6, 1993, following an ex-parte hearing, the lower court issued an Order for the issuance of a writ of preliminary attachment, conditioned upon the filing of a P7,000,000.00 attachment bond. Petitioners moved for the lifting of the writ of preliminary attachment on the following grounds: (1) the attachment was heard, issued and implemented even before service of summons upon them; (2) failure of the attaching officer to serve a copy of the affidavit of merit upon them; and (3) that there was no fraud in incurring the obligation. As an alternative prayer in their Motion, petitioners prayed that the attachment be limited to their receivables with the Department of Public Works and Highways. This alternative prayer was later withdrawn by petitioners in a Manifestation and Motion. On May 25, 1994, the lower court issued another Order denying petitioners' Motion to Lift Attachment. [1] It, however, reduced and confined the attachment to receivables due petitioners from the Tandang Sora commonwealth Flyover project. Subsequently, petitioners filed a Motion for Reconsideration [2] as well as an Omnibus Motion for Leave to file Amended Answer and/or to delete Francis C. Yu as party- defendant. [3]

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Provisional Remedies Cases

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FIRST DIVISION[G.R. No. 123358. February 1, 2000]FCY CONSTRUCTION GROUP, INC., and FRANCIS C. YU,petitioners,vs. THE COURT OF APPEALS, THE HON. JOSE C. DE LA RAMA, Presiding Judge, Branch 139, Regional Trial Court, NCJR, Makati City, Metro Manila, and LEY CONSTRUCTION AND DEVELOPMENT CORPORATION,respondents.D E C I S I O NYNARES_SANTIAGO,J.:On June 29, 1993, private respondent Ley Construction and Development Corporation filed a Complaint for collection of a sum of money with application for preliminary attachment against petitioner FCY Construction Group, Inc. and Francis C. Yu with the Makati Regional Trial Court which was docketed as Civil Case No. 93-2112. Private respondent alleged that it had a joint venture agreement with petitioner FCY Construction Group, Inc. (wherein petitioner Francis C. Yu served as President) over the Tandang Sora Commonwealth Flyover government project for which it had provided funds and construction materials. The Complaint was filed in order to compel petitioners to pay its half share in the collections received in the project as well as those yet to be received therein. In support of its application for a writ of attachment, private respondent alleged that petitioners were guilty of fraud in incurring the obligation and had fraudulently misapplied or converted the money paid them, to which it had an equal share.On July 6, 1993, following anex-partehearing, the lower court issued an Order for the issuance of a writ of preliminary attachment, conditioned upon the filing of a P7,000,000.00 attachment bond.Petitioners moved for the lifting of the writ of preliminary attachment on the following grounds: (1) the attachment was heard, issued and implemented even before service of summons upon them; (2) failure of the attaching officer to serve a copy of the affidavit of merit upon them; and (3) that there was no fraud in incurring the obligation. As an alternative prayer in their Motion, petitioners prayed that the attachment be limited to their receivables with the Department of Public Works and Highways. This alternative prayer was later withdrawn by petitioners in a Manifestation and Motion.On May 25, 1994, the lower court issued another Order denying petitioners' Motion to Lift Attachment.[1]It, however, reduced and confined the attachment to receivables due petitioners from the Tandang Sora commonwealth Flyover project.Subsequently, petitioners filed a Motion for Reconsideration[2]as well as an Omnibus Motion for Leave to file Amended Answer and/or to delete Francis C. Yu as party-defendant.[3]With the denial of both Motions by the lower court on September 4, 1994,[4]petitioners filed a Petition forCertioraribefore the Court of Appeals on September 16, 1994.[5]The Petition was, however, denied on July 31, 1995;[6]so was petitioners' Motion for Reconsideration.[7]Hence, the instant Petition.It is evident that the questioned writ of attachment was anchored uponSection 1(d),Rule 57of the Revised Rules of Court,to wit -"SECTION 1. Grounds upon which attachment may issue. - A plaintiff or any proper party may, at the commencement of the action or at any time thereafter, have the property of the adverse party attached as security for the satisfaction of any judgment that may be recovered in the following cases:x x xx x xx x x.(d) In an action against a party who has been guilty of a fraud in contracting the debt or incurring the obligation upon which the action is brought, or in concealing or disposing of the property for the taking, detention or conversion of which the action is brought;x x xx x xx x x."Petitioners, however, insist that the writ of preliminary attachment was irregularly issued inasmuch as there was no evidence of fraud in incurring the obligations sued upon.In support of their stand, petitioners alleged that private respondent's principal witness admitted that it was the Department of Public Works and Highways (DPWH) that induced it to deliver materials and cash for the Tandang Sora Commonwealth Flyover project, to wit -COURT: Now . . . as of January 5, 1993 you delivered to him (referring to defendant FCY corporation) in cash and in kind amounting to Fifteen Million Pesos (P15,000,000.00), now why did you keep on delivering cash and materials to him if you were not paid a single centavo?ABecause of every need for the project, and the Public Works official assured me that I will be given a new project after the Tandang Sora will be finished.QWho is this public official that promised you?ADirector Pendosa, Teodoro Encarnacion and Secretary de Jesus your Honor.(TSN, 6 July 1993,pp. 47-48)x x xx x xx x xQWhat about these officials of the Department of Public Highways, what would they do to project their sub alleged project?ASecretary de Jesus is no longer connected there, your Honor.QAt the time?AAt that time, he resigned.QBefore he resigned.AHe gave me assurance that they will soon give assurance, they will soon give me another project . . .(TSN, 6 July 1993, p. 55)[8]A cursory reading of the above-cited testimony, however, readily shows that said reassurance from the DPWH officials came, not at the inception of the obligation or contract, but during its performance. On the other hand, the fraud of which petitioners are accused of and which was the basis for the issuance of the questioned attachment, is fraud alleged to have been committed upon contracting the obligation sued upon. Thus, petitioners argument that "the inducement was the mouth-watering temptation of a DPWH promise of a 'new project after the Tandang Sora Flyover project will be finished"' is clearly off-tangent as such inducement, if any, came not at the inception of the obligation.Similarly, petitioners' arguments that it was private respondent who admittedly prepared the letter embodying the alleged joint venture agreement[9]and had petitioner Francis Yu sign it must fail. The written agreement referred to was signed by petitioner Francis Yu only on January 5, 1993, long after the project had commenced. Thus, It was only a written confirmation of an arrangement that had already been existing and operational. Similarly then, such written confirmation did not occur at the inception of the obligation sued upon.InLiberty Insurance Corporation vs. Court of Appeals,[10]this Court, discussingSection 1(d), Rule57, cautioned as follows--To sustain an attachment on this ground, it must be shown that the debtor in contracting the debt or incurring the obligation intended to defraud the creditor.The fraud must relate to the execution of the agreement and must have been the reason which induced the other party into giving consent which he would not have otherwise given. To constitute a ground for attachment in Section 1 (d), Rule 57 of the Rules of Court, fraud should be committed upon contracting the obligation sued upon. A debt is fraudulently contracted if at the time of contracting it the debtor has a preconceived plan or intention not to pay, as it is in this case. Fraud is a state of mind and need not be proved by direct evidence but may be inferred from the circumstances attendant in each case.(Republic v.Gonzales, 13SCRA 633).From the foregoing, therefore, the alleged inducement by the DPWH officials upon private respondent as well as the circumstances surrounding the execution of the joint venture agreement, both appear immaterial as they were not committed upon contracting the obligation sued upon but occurred long after the obligation has been established.The fact that petitioners have paid a substantial amount of money to private respondent cannot save the day for them either. As per their own accounting, such payments were for accounts payable for labor supplied, construction materials and cash advances.[11]It is not denied that no payment of profits has been given to private respondent, which is precisely what it is suing for.Finally, considering that the writ of preliminary attachment has been issued on account of allegations of fraud in contracting the obligation upon which the action is brought petitioners' efforts to have the writ of preliminary attachment dissolved on the ground that it was improperly or irregularly issued is in vain. Indeed, inLiberty Insurance Corporation, supra,which citedMindanao Savings and Loan Assoc. vs. Court of Appeals (172 SCRA 480), we ruled -"x x x, when the preliminary attachment is issued upon a ground which is at the same time the applicant's cause of action: e.g., x x x an action against a party who has been guilty of fraud in contracting the debt or incurring the obligation upon which the action is brought, the defendant is not allowed to file a motion to dissolve the attachment under Section 13 of Rule 57 by offering to show the falsity of the factual averments in the plaintiffs application and affidavits on which the writ was based and consequently that the writ based therein had been improperly or irregularly issued - the reason being that the hearing on such motion for dissolution of the writ would be tantamount to a trial on the merits. In other words, the merits of the action would be ventilated at a mere hearing of a motion; instead of the regular trial. Therefore, when the writ of attachment is of this nature, the only way it can be dissolved is by a counterbond."We now come to the issue of whether or not petitioner Francis Yu should remain as party-defendant. Petitioners argue that since the transactions were corporation to corporation only, petitioner Francis Yu should be dropped as party-defendant considering the hornbook law that corporate personality is a shield against personal liability of its officers. We agree that petitioner Francis Yu cannot be made liable in his individual capacity if he indeed entered into and signed the contract in his official capacity as President, in the absence of stipulation to that effect, due to the personality of the corporation being separate and distinct from the persons composing it.[12]However, while we agree that petitioner Francis Yu cannot be held solidarily liable with petitioner corporation merely because he is the President thereof and was involved in the transactions with private corporation, we also note that there exists instances when corporate officers may be held personally liable for corporate acts. Such exceptions were outlined inTramat Mercantile, Inc. vs. Court of Appeals,[13]as follows --"Personal liability of a corporate director, trustee or officer along (although not necessarily) with the corporation may so validly attach, as a rule, only when -1. He assents (a) to a patently unlawful act of the corporation, or (b) for bad faith or gross negligence in directing its affairs, or (c) for conflict of interest, resulting in damages to the corporation, its stockholders or other persons;2. He consents to the issuance of watered down stocks or who, having knowledge thereof, does not forthwith file with the corporate secretary his written objection thereto;3. He agrees to hold himself personally and solidarily liable with the corporation; or4. He is made, by a specific provision of law, to personally answer for his corporate action."The attendance of these circumstances, however, cannot be determined at this stage and should properly be threshed out during the trial on the merits. Stated differently, whether or not petitioner Francis Yu should be held personally and solidarily liable with petitioner corporation is a matter that should be left to the trial court's discretion, dependent as it is on evidence during trial.WHEREFORE, in view of the foregoing, the instant Petition is hereby DISMISSED. No pronouncement as to costs.SO ORDERED.Davide, Jr., C.J., (Chairman), Puno, Kapunan,andPardo, JJ.,concur.Republic of thePhilippinesSupreme CourtBaguioCityTHIRD DIVISIONCHINA BANKING CORPORATION,G.R. No. 158271

Petitioner,

Present:

AUSTRIA-MARTINEZ,J.,

Acting Chairperson,

- versus -TINGA,*

CHICO-NAZARIO,

NACHURA,and

REYES,JJ.

ASIAN CONSTRUCTION and

DEVELOPMENT CORPORATION,Promulgated:

Respondent.April 8, 2008

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - xD E C I S I O NAUSTRIA-MARTINEZ,J.:Before the Court is a Petition for Review onCertiorariunder Rule 45 of the Rules of Court filed by petitioner China Banking Corporation (China Bank) seeking to annul the Resolution[1]datedOctober 14, 2002and the Resolution[2]datedMay 16, 2003of the Court of Appeals (CA) in CA-G.R. CV No. 72175.The facts of the case:On July 24, 1996, China Bank granted respondent Asian Construction and DevelopmentCorporation(ACDC)anOmnibusCreditLineintheamountofP90,000,000.00.[3]OnApril 12, 1999, alleging that ACDC failed to comply with its obligations under the Omnibus Credit Line, China Bank filed a Complaint[4]for recovery of sum of money and damages with prayer for the issuance of writ of preliminary attachment before the Regional Trial Court (RTC) ofMakati, Branch 138, docketed as Civil Case No. 99-796.In the Complaint, China Bank claimed that ACDC, after collecting and receiving the proceeds or receivables from the various construction contracts and purportedly holding them in trust for China Bank under several Deeds of Assignment, misappropriated, converted, and used the funds for its own purpose and benefit, instead of remitting or delivering them to China Bank.[5]OnApril 22, 1999, the RTC issued an Order[6]granting China Banks prayer for writ of preliminary attachment.Consequently, as shown in the Sheriffs Report[7]datedJune 14, 1999, the writ of preliminary attachment was implemented levying personal properties of ACDC,i.e., vans, dump trucks, cement mixers, cargo trucks, utility vehicles, machinery, equipment and office machines and fixtures.OnMarch 27, 2000, upon motion of China Bank, the RTC issued a Summary Judgment[8]in favor of China Bank.ACDC filed its Notice of Appeal[9]datedApril 24, 2000.OnJune 15, 2000, China Bank filed a Motion to Take Custody of Attached Properties with Motion for Grant of Authority toSellto the Branch Sheriff[10]with the RTC, praying that it be allowed to take custody ofACDCsproperties for the purpose of selling them in an auction.[11]On June 20, 2000, ACDC filed its Opposition[12]to the June 15, 2000 Motion arguing that there can be no sale of the latters attached properties in the absence of a final andexecutoryjudgment against ACDC.OnAugust 25, 2000,China Bank partially appealed the Summary Judgment for not awarding interest on one of its promissory notes.[13]Records of the case were elevated to the CA.[14]OnApril 18, 2002, China Bank filed a Motion for Leave for Grant of Authority to Sell Attached Properties[15]which the CA denied in the herein assailed Resolution datedOctober 14, 2002.According to the CA, selling the attached properties prior to final judgment of the appealed case is premature and contrary to the intent and purpose of preliminary attachment for the following reasons:first,the records reveal that the attached properties subject of the motion are not perishable in nature; andsecond,while the sale of the attached properties may serve the interest of China Bank, it will not be so for ACDC.The CA recognized China Banks apprehension that by the time a final judgment is rendered, the attached properties would be worthless. However, the CA also acknowledged that since ACDC is a corporation engaged in a construction business, the preservation of the properties is of paramount importance; and that in the event that the decision of the lower court is reversed and a final judgment rendered in favor ACDC, great prejudice will result if the attached properties were already sold.China Bank filed a Motion for Reconsideration[16]which was denied in the herein assailed CA Resolution[17]datedMay 16, 2003.Hence, the present petition for review oncertiorari, on the following ground:THE HONORABLE COURT OF APPEALS RENDERED THE QUESTIONED RESOLUTIONS (ANNEXES A and B)IN A MANNER NOT IN ACCORD WITH THE PROVISIONS OF SECTION 11, RULE 57 OF THE RULES OF CIVIL PROCEDURE, AS IT SHELVED THE DEMANDS OF EQUITY BY ARBITRARILY DISALLOWING THE SALE OF THE ATTACHED PROPERTIES, UPHOLDING ONLY THE INTEREST OF RESPONDENT, IN UTTER PARTIALITY.[18]Considering that the herein assailed CA Resolutions are interlocutory in nature as they do not dispose of the case completely but leave something to be done upon the merits,[19]the proper remedy should have been by way of petition forcertiorariunder Rule 65, as provided for in Section 1 (b), Rule 41 of the Rules of Court, as amended by A.M. No. 07-7-12-SC,[20]which provides:Section 1.Subject of appeal.-An appeal may be taken from a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by these Rulestobeappealable.No appeal may be taken from:xxxx(b)An interlocutory order;xxxxIn any of the foregoing instances, the aggrieved party may file anappropriate special civil action as provided in Rule 65.(Emphasis supplied).The present petition for review oncertiorarishould have been dismissed outright.However, in many instances, the Court has treated a petition for review oncertiorariunder Rule 45 as a petition forcertiorariunder Rule 65 of the Rules of Court, such as in cases where the subject of the recourse was one of jurisdiction, or the act complained of was perpetrated by a court with grave abuse of discretion amounting to lack or excess of jurisdiction.[21]The present petition does not involve any issue on jurisdiction, neither does it show that the CA committed grave abuse of discretion in denying the motion to sell the attached property.Section 11, Rule 57 of the Rules of Court provides: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 actionwill besubservedby 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)Thus, 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, thatthe attached property is perishableorthat the interests of all the parties to the action will besubservedby the sale of the attached property.In its Memorandum,[22]China Bank argues that the CAs notion of perishable property, which pertains only to those goods which rot and decay and lose their value if not speedily put to their intended use,[23]is a strict and stringent interpretation that would betray the purpose for which the preliminary attachment was engrafted.[24]CitingWitherspoon v. Cross,[25]China Bank invokes the definition of perishable property laid down by the Supreme Court of California as goods which decay and lose their value if not speedily put 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 causes than such decay.Asstatedin the Sheriffs Report[26]and Notices of Levy on Properties,[27]all ofACDCsproperties which were levied are personal properties consisting of used vehicles,i.e.,vans, dump trucks, cement mixers, cargo trucks, utility vehicles, machinery, equipment and office machines and fixtures. China Bank insists that the attached properties, all placed insideACDCsstockyard located atSilang,Caviteand the branch office inMayamot,AntipoloCity, are totally exposed to natural elements and adverse weather conditions.[28]Thus, China Bank argues, that should the attached properties be allowed to depreciate, perish or rot while the main case is pending, the attached properties will continue losing their worth thereby rendering the rules on preliminary attachment nugatory.The issue hinges on the determination whether the vehicles, office machines and fixtures are perishable property under Section 11, Rules 57 of the Rules of Court, which is actually one of first impression.No local jurisprudence or authoritative work has touched upon this matter.This being so, an examination of foreign laws and jurisprudence, particularly those of theUnited Stateswhere some of our laws and rules were patterned after, is in order.[29]InMosslerAcceptance Co. v. Denmark,[30]an order of the lower court in directing the sale of attached properties, consisting of 20 automobiles and 2 airplanes, was reversed by the Supreme Court of Louisiana.In support of its contention that automobiles are perishable,Mossleroffered testimony to the effect that automobile tires tend to dry-rot in storage, batteries to deteriorate, crankcases to become damaged, paint and upholstery to fade, that generally automobiles tend to depreciate while in storage.[31]Rejecting these arguments, the Supreme Court of Louisiana held that while there might be a depreciation in the value of a car during storage, depending largely on existing economic conditions, there would be no material deterioration of the car itself or any of its appurtenances if the car was properly cared for, and therefore it could not be said that automobiles were of a perishable nature within the intendment of the statute, which could only be invoked when the property attached and seized was of a perishable nature.[32]With respect to the determination of the question on whether the attached office furniture, office equipment, accessories and supplies are perishable properties, the Supreme Court of Alabama inMcCreeryv.BerneyNational Bank[33]discussed the perishable nature of the attached properties, consisting of shelving, stock ofdrygoodsand a complete set of store fixtures, consisting of counters iron safe, desk and showcases, to be within the meaning of perishable property under the Alabama Code which authorizes a court, on motion of either party, to order the sale, in advance of judgment, of perishable property which had been levied on by a writ of attachment.[34]InMcCreery,the Supreme Court of Alabama rejected the argument that the sale of the attached property was void because the term perishable property, as used in the statute, meant only such property as contained in itself the elements of speedy decay, such as fruits, fish, fresh meats,etc.[35]The Supreme Court of Alabama held 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 that the purpose of its original seizure will probably be frustrated, the sale of the attached property is justified.McCreeryapplied the doctrine inMillardsAdmrs. v. Hall[36]where the Supreme Court of Alabama held that an attached property is perishable if it is shown that, by keeping the article, it will necessarily become, or is likely to become, worthless to the creditor, and by consequence to the debtor, then it is embraced by the statute.It matters not, in our opinion, what the subject matter is.It may be cotton bales, live stock, hardware provisions or dry goods.Although the statute under whichMillardswas decided used the words likely to waste or be destroyed by keeping, instead of the word perishable, the reasons given for the construction placed on the statute apply equally to the Alabama Code which uses the term perishable.[37]In the Motion for Leave for Grant of Authority to Sell Attached Properties[38]filed before the CA, China Bank alleged that the attached properties are placed in locations where they are totally exposed to the natural elements and adverse weather conditions since their attachment in 1999;[39]that as a result, the attached properties have gravely deteriorated with corrosions eating them up, with weeds germinating and growing thereon and their engines and motors stock up;[40]and that the same holds true to the office furniture, office equipment, accessories and supplies.[41]No evidence, however, were submitted by China Bank to support and substantiate these claims before the CA.Notably, in the Petition filed before the Court, China Bank, for the first time, included as annexes,[42]photographs of the attached properties which were alleged to be recently taken, in an attempt to convince the Court of the deteriorated condition of the attached properties.The determination on whether the attached vehicles are properly cared for, and the burden to show that, by keeping the attached office furniture, office equipment and supplies, it will necessarily become, or is likely to become, worthless to China Bank, and by consequence to ACDC, are factual issues requiring reception of evidence which the Court cannot do in a petition forcertiorari.Factual issues arebeyondthescopeofcertioraribecausetheydonotinvolveanyjurisdictionalissue.[43]As a rule, only jurisdictional questions may be raised in a petition forcertiorari,including matters of grave abuse of discretion which are equivalent to lack of jurisdiction.[44]The office of the writ ofcertiorarihas been reduced to the correction of defects ofjurisdictionsolely and cannot legally be used for any other purpose.[45]Certiorariis truly an extraordinary remedy and, in this jurisdiction, its use is restricted to truly extraordinary cases - cases in which the action of the inferior court is wholly void; where any further steps in the case would result in a waste of time and money and would produce no result whatever; where the parties, or their privies, would be utterly deceived; where a final judgment or decree would benoughtbut a snare and delusion, deciding nothing, protecting nobody, a judicial pretension, a recorded falsehood, a standing menace. It is only to avoid such results as these that a writ ofcertiorariisissuable; and even here an appeal will lie if the aggrieved party prefers to prosecute it.[46]Moreover, the Courtheld inJAM Transportation Co., Inc. v. Flores[47]that it is well-settled, too well-settled to require a citation of jurisprudence, that this Court does not make findings of facts specially on evidence raised for the first time on appeal.[48]The Court will not make an exception in the case at bar.Hence, the photographs of the attached properties presented before the Court, for the first time on appeal, cannot be considered by the Court.China Bank argues that if the CA allowed the attached properties to be sold, whatever monetary value which the attached properties still have will be realized and saved for both parties.[49]China Bank further claims that should ACDC prevail in the final judgment[50]of the collection suit, ACDC can proceed with the bond posted by China Bank.[51]The Court finds said arguments to be specious and misplaced.Section 4, Rule 57 of the Rules of Court provides:Section 4.Condition of applicants 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.It is clear from the foregoing provision that the bond posted by China Bank answers only for the payment of all damages which ACDC may sustain if the court shall finally adjudge that China Bank was not entitled to attachment.The liability attaches if the plaintiff is not entitled to the attachment because the requirements entitling him to the writ are wanting, or if the plaintiff has no right to the attachment because the facts stated in his affidavit, or some of them are untrue.[52]Clearly, ACDC can only claim from the bond for all the damages which it may sustain by reason of the attachment and not because of the sale of the attached properties prior to final judgment.Saleof attached property before final judgment is an equitable remedy provided for the convenience of the parties and preservation of the property.[53]To repeat, the Court finds that the issue of whether the sale of attached properties is for the convenience of the parties and that the interests of all the parties will besubservedby the said sale is a question of fact.Again, the foregoing issue can only be resolved upon examination of the evidence presented by both parties which the Court cannot do in a petition forcertiorariunder Rule 65 of the Rules of Court.WHEREFORE,the petition isDENIED.The assailed Resolutions of the Court of Appeals datedOctober 14, 2002andMay 16, 2003in CA-G.R. CV No. 72175 are herebyAFFIRMED.SO ORDERED.

SECOND DIVISIONSECURITY PACIFIC ASSURANCE CORPORATION,Petitioner,- versus -THE HON. AMELIA TRIA-INFANTE, In her official capacity as Presiding Judge, Regional Trial Court, Branch 9, Manila; THE PEOPLE OF THE PHILIPPINES, represented by Spouses REYNALDO and ZENAIDA ANZURES; and REYNALDO R. BUAZON, In his official capacity as Sheriff IV, Regional Trial Court, Branch 9, Manila,Respondents.G.R. No. 144740Present:PUNO,Chairman,AUSTRIA-MARTINEZ,CALLEJO, SR.,TINGA, andCHICO-NAZARIO,JJ.Promulgated:August 31, 2005

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -xD E C I S I O NCHICO-NAZARIO,J.:Before Us is a petition for review oncertiorari, assailing the Decision[1]and Resolution[2]of the Court of Appeals in CA-G.R. SP No. 58147, dated16 June 2000and22 August 2000, respectively. The said Decision and Resolution declared that there was no grave abuse of discretion on the part of respondent Judge in issuing the assailed order dated31 March 2000, which was the subject in CA-G.R. SP No. 58147.THE FACTSThe factual milieu of the instant case can be traced from this Courts decision in G.R. No. 106214 promulgated on05 September 1997.On26 August 1988, Reynaldo Anzures instituted a complaint against Teresita Villaluz (Villaluz) for violation of Batas Pambansa Blg. 22. The criminal information was brought before the Regional Trial Court, City ofManila, and raffled off to Branch 9, then presided over by Judge Edilberto G. Sandoval, docketed as Criminal Case No. 89-69257.AnEx-ParteMotion for Preliminary Attachment[3]dated06 March 1989was filed by Reynaldo Anzures praying that pending the hearing on the merits of the case, a Writ of Preliminary Attachment be issued ordering the sheriff to attach the properties of Villaluz in accordance with the Rules.On03 July 1989, the trial court issued an Order[4]for the issuance of a writ of preliminary attachment upon complainants posting of a bond which is hereby fixed atP2,123,400.00 and the Courts approval of the same under the condition prescribed by Sec. 4 of Rule 57 of the Rules of Court.An attachment bond[5]was thereafter posted by Reynaldo Anzures and approved by the court. Thereafter, the sheriff attached certain properties of Villaluz, which were duly annotated on the corresponding certificates of title.On25 May 1990, the trial court rendered a Decision[6]on the case acquitting Villaluz of the crime charged, but held her civilly liable. The dispositive portion of the said decision is reproduced hereunder:WHEREFORE, premises considered, judgment is hereby rendered ACQUITTING the accused TERESITA E. VILLALUZ withcost de oficio. As to the civil aspect of the case however, accused is ordered to pay complainant Reynaldo Anzures the sum of TWO MILLION ONE HUNDRED TWENTY THREE THOUSAND FOUR HUNDRED (P2,123,400.00) PESOS with legal rate of interest from December 18, 1987 until fully paid, the sum of P50,000.00 as attorneys fees and the cost of suit.[7]Villaluz interposed an appeal with the Court of Appeals, and on30 April 1992, the latter rendered its Decision,[8]the dispositive portion of which partly reads:WHEREFORE, in CA-G.R. CV No. 28780, the Decision of the Regional Trial Court of Manila, Branch 9, datedMay 25, 1990, as to the civil aspect of Criminal Case No. 89-69257, is hereby AFFIRMED, in all respects.The case was elevated to the Supreme Court (G.R. No. 106214), and during its pendency, Villaluz posted a counter-bond in the amount ofP2,500,000.00 issued by petitioner Security Pacific Assurance Corporation.[9]Villaluz, on the same date[10]of the counter-bond, filed an Urgent Motion to Discharge Attachment.[11]On05 September 1997, we promulgated our decision in G.R. No. 106214, affirmingin totothe decision of the Court of Appeals.In view of the finality of this Courts decision in G.R. No. 106214, the private complainant moved for execution of judgment before the trial court.[12]On07 May 1999, the trial court, now presided over by respondent Judge, issued a Writ of Execution.[13]Sheriff Reynaldo R. Buazon tried to serve the writ of execution upon Villaluz, but the latter no longer resided in her given address. This being the case, the sheriff sent a Notice of Garnishment upon petitioner at its office in Makati City, by virtue of the counter-bond posted by Villaluz with said insurance corporation in the amount ofP2,500,000.00. As reported by the sheriff, petitioner refused to assume its obligation on the counter-bond it posted for the discharge of the attachment made by Villaluz.[14]Reynaldo Anzures, through the private prosecutor, filed a Motion to Proceed with Garnishment,[15]which was opposed by petitioner[16]contending that it should not be held liable on the counter-attachment bond.The trial court, in its Order dated31 March 2000,[17]granted the Motion to Proceed with Garnishment. The sheriff issued a Follow-Up of Garnishment[18]addressed to the President/General Manager of petitioner dated03 April 2000.On07 April 2000, petitioner filed a Petition forCertiorariwith Preliminary Injunction and/or Temporary Restraining Order[19]with the Court of Appeals, seeking the nullification of the trial courts order dated31 March 2000granting the motion to proceed with garnishment. Villaluz was also named as petitioner. The petitioners contended that the respondent Judge, in issuing the order dated 31 March 2000, and the sheriff committed grave abuse of discretion and grave errors of law in proceeding against the petitioner corporation on its counter-attachment bond, despite the fact that said bond was not approved by the Supreme Court, and that the condition by which said bond was issued did not happen.[20]On16 June 2000, the Court of Appeals rendered a Decision,[21]the dispositive portion of which reads:WHEREFORE, premises considered, the Court finds no grave abuse of discretion on the part of respondent judge in issuing the assailed order. Hence, the petition is dismissed.A Motion for Reconsideration[22]was filed by petitioner, but was denied for lack of merit by the Court of Appeals in its Resolution[23]dated22 August 2000.Undeterred, petitioner filed the instant petition under Rule 45 of the 1997 Rules of Civil Procedure, with Urgent Application for a Writ of Preliminary Injunction and/or Temporary Restraining Order.[24]On13 December 2000, this Court issued a Resolution[25]requiring the private respondents to file their Comment to the Petition, which they did. Petitioner was required to file its Reply[26]thereafter.Meanwhile, on17 January 2001, petitioner and the spouses Reynaldo and Zenaida Anzures executed a Memorandum of Understanding (MOU).[27]In it, it was stipulated that as of said date, the total amount garnished from petitioner had amounted toP1,541,063.85, and so the remaining amount still sought to be executed wasP958,936.15.[28]Petitioner tendered and paid the amount ofP300,000.00 upon signing of the MOU, and the balance ofP658,936.15 was to be paid in installment atP100,000.00 at the end of each month from February 2001 up to July 2001. At the end of August 2001, the amount ofP58,936.00 would have to be paid. This would make the aggregate amount paid to the private respondentsP2,500,000.00.[29]There was, however, a proviso in the MOU which states that this contract shall not be construed as a waiver or abandonment of the appellate review pending before the Supreme Court and that it will be subject to all such interim orders and final outcome of said case.On13 August 2001, the instant petition was given due course, and the parties were obliged to submit their respective Memoranda.[30]ISSUESThe petitioner raises the following issues for the resolution of this Court:Main Issue- WHETHER OR NOT THE COURT OFAPPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING THE 31 MARCH 2000 ORDER OF PUBLIC RESPONDENT JUDGE WHICH ALLOWED EXECUTION ON THE COUNTER-BOND ISSUED BY THE PETITIONER.Corollary Issues(1) WHETHER OR NOT THE COURT OF APPEALS CORRECTLY RULED THAT THE ATTACHMENT ON THE PROPERTY OF VILLALUZ WAS DISCHARGED WITHOUT NEED OF COURT APPROVAL OF THE COUNTER-BOND POSTED; and (2) WHETHER OR NOT THE COURT OF APPEALS CORRECTLY RULED THAT THE ATTACHMENT ON THE PROPERTY OF VILLALUZ WAS DISCHARGED BY THE MERE ACT OF POSTING THE COUNTER-BOND.THE COURTS RULINGPetitioner seeks to escape liability by contending, in the main, that the writ of attachment which was earlier issued against the real properties of Villaluz was not discharged. Since the writ was not discharged, then its liability did not accrue. The alleged failure of this Court in G.R. No. 106214 to approve the counter-bond and to cause the discharge of the attachment against Villaluz prevented the happening of a condition upon which the counter-bonds issuance was premised, such that petitioner should not be held liable thereon.[31]Petitioner further asserts that the agreement between it and Villaluz is not a suretyship agreement in the sense that petitioner has become an additional debtor in relation to private respondents. It is merely waiving its right of excussion[32]that would ordinarily apply to counter-bond guarantors as originally contemplated in Section 12, Rule 57 of the 1997 Rules.In their Comment,[33]the private respondents assert that the filing of the counter-bond by Villaluz had alreadyipso factodischarged the attachment on the properties and made the petitioner liable on the bond. Upon acceptance of the premium, there was already an express contract for surety between Villaluz and petitioner in the amount ofP2,500,000.00 to answer for any adverse judgment/decision against Villaluz.Petitioner filed a Reply[34]dated09 May 2001to private respondents Comment, admitting the binding effect of the bond as between the parties thereto. What it did not subscribe to was the theory that the attachment wasipso factoor automatically discharged by the mere filing of the bond in court. Such theory, according to petitioner, has no foundation. Without an order of discharge of attachment and approval of the bond, petitioner submits that its stipulated liability on said bond, premised on their occurrence, could not possibly arise, for to hold otherwise would be to trample upon the statutorily guaranteed right of the parties to contractual autonomy.Based on the circumstances present in this case, we find no compelling reason to reverse the ruling of the Court of Appeals.Over the years, in a number of cases, we have made certain pronouncements about counter-bonds.InTijam v. Sibonghanoy,[35]as reiterated inVanguard Assurance Corp. v. Court of Appeals,[36]we held:. . . [A]fter the judgment for the plaintiff has become executory and the execution is returned unsatisfied, as in this case, the liability of the bond automatically attaches and, in failure of the surety to satisfy the judgment against the defendant despite demand therefore, writ of execution may issue against the surety to enforce the obligation of the bond.InLuzonSteel Coporation v. Sia, et al.:[37]. . . [C]ounterbonds posted to obtain the lifting of a writ of attachment is due to these bonds being security for the payment of any judgment that the attaching party may obtain; they are thus mere replacements of the property formerly attached, and just as the latter may be levied upon after final judgment in the case in order to realize the amount adjudged, so is the liability of the countersureties ascertainable after the judgment has become final. . . .InImperial Insurance, Inc. v. De Los Angeles,[38]we ruled:. . .Section 17, Rule 57 of the Rules of Court cannot be construed that an execution against the debtor be first returned unsatisfied even if the bond were a solidary one, for a procedural may not amend the substantive law expressed in the Civil Code, and further would nullify the express stipulation of the parties that the suretys obligation should be solidary with that of the defendant.In PhilippineBritish Assurance Co., Inc. v. Intermediate Appellate Court,[39]we further held that the counterbond is intended to secure the payment ofany judgmentthat the attaching creditor may recover in the action.Petitioner does not deny that the contract between it and Villaluz is one of surety. However, it points out that the kind of surety agreement between them is one that merely waives its right of excussion. This cannot be so. The counter-bond itself states that the parties jointly and severally bind themselves to secure the payment of any judgment that the plaintiff may recover against the defendant in the action. A surety is considered in law as being the same party as the debtor in relation to whatever is adjudged touching the obligation of the latter, and their liabilities are interwoven as to be inseparable.[40]Suretyship is a contractual relation resulting from an agreement whereby one person, the surety, engages to be answerable for the debt, default or miscarriage of another, known as the principal. The suretys obligation is not an original and direct one for the performance of his own act, but merely accessory or collateral to the obligation contracted by the principal. Nevertheless, although the contract of a surety is in essence secondary only to a valid principal obligation, his liability to the creditor or promise of the principal is said to be direct, primary and absolute; in other words, he is directly and equally bound with the principal. The surety therefore becomes liable for the debt or duty of another although he possesses no direct or personal interest over the obligations nor does he receive any benefit therefrom.[41]In view of the nature and purpose of a surety agreement, petitioner, thus, is barred from disclaiming liability.Petitioners argument that the mere filing of a counter-bond in this case cannot automatically discharge the attachment without first an order of discharge and approval of the bond, is lame.Under the Rules, there are two (2) ways to secure the discharge of an attachment. First, the party whose property has been attached or a person appearing on his behalf may post a security. Second, said party may show that the order of attachment was improperly or irregularly issued.[42]The first applies in the instant case. Section 12, Rule 57,[43]provides:SEC. 12.Discharge of attachment upon giving counter-bond.After a writ of attachment has been enforced, the party whose property has been attached, or the person appearing on his behalf, may move for the discharge of the attachment wholly or in part on the security given. The court shall, after due notice and hearing, order the discharge of the attachment if the movant makes a cash deposit, or files a counter-bond executed to the attaching party with the clerk of the court where the application is made, in an amount equal to that fixed by the court in the order of attachment, exclusive of costs. But if the attachment is sought to be discharged with respect to a particular property, the counter-bond shall be equal to the value of that property as determined by the court. In either case, the cash deposit or the counter-bond shall secure the payment of any judgment that the attaching party may recover in the action. A notice of the deposit shall forthwith be served on the attaching party. Upon the discharge of an attachment in accordance with the provisions of this section, the property attached, or the proceeds of any sale thereof, shall be delivered to the party making the deposit or giving the counter-bond, or to the person appearing on his behalf, the deposit or counter-bond aforesaid standing in place of the property so released. Should such counter-bond for any reason be found to be or become insufficient, and the party furnishing the same fail to file an additional counter-bond, the attaching party may apply for a new order of attachment.It should be noted that in G.R. No. 106214, per our Resolution dated15 January 1997,[44]we permitted Villaluz to file a counter-attachment bond. On17 February 1997,[45]we required the private respondents to comment on the sufficiency of the counter-bond posted by Villaluz.It is quite palpable that the necessary steps in the discharge of an attachment upon giving counter-bond have been taken. To require a specific order for the discharge of the attachment when this Court, in our decision in G.R. No. 106214, had already declared that the petitioner is solidarily bound with Villaluz would be mere surplusage. Thus:During the pendency of this petition, a counter-attachment bond was filed by petitioner Villaluz before this Court to discharge the attachment earlier issued by the trial court. Said bond amounting to P2.5 million was furnished by Security Pacific Assurance, Corp. which agreed to bind itself jointly and severally with petitioner for any judgment that may be recovered by private respondent against the former.[46]We are not unmindful of our ruling in the case ofBelisle Investment and Finance Co., Inc. v. State Investment House, Inc.,[47]where we held:. . . [T]he Court of Appeals correctly ruled that the mere posting of a counterbond does not automatically discharge the writ of attachment. It is only after hearing and after the judge has ordered the discharge of the attachment if a cash deposit is made or a counterbond is executed to the attaching creditor is filed, that the writ of attachment is properly discharged under Section 12, Rule 57 of the Rules of Court.The ruling inBelisle, at first glance, would suggest an error in the assailed ruling of the Court of Appeals because there was no specific resolution discharging the attachment and approving the counter-bond. As above-explained, however, consideration of our decision in G.R. No. 106214 in its entirety will readily show that this Court has virtually discharged the attachment after all the parties therein have been heard on the matter.On this score, we hew to the pertinent ratiocination of the Court of Appeals as regards the heretofore cited provision of Section 12, Rule 57 of the 1997 Rules of Civil Procedure, on the discharge of attachment upon giving counter-bond:. . . The filing of the counter-attachment bond by petitioner Villaluz has discharged the attachment on the properties and made the petitioner corporation liable on the counter-attachment bond. This can be gleaned from the DEFENDANTS BOND FOR THE DISSOLUTION OF ATTACHMENT, which states that Security Pacific Assurance Corporation, as surety,in consideration of the dissolution of the said attachmentjointly and severally, binds itself with petitioner Villaluz for any judgment that may be recovered by private respondent Anzures against petitioner Villaluz.The contract of surety is only between petitioner Villaluz and petitioner corporation. The petitioner corporation cannot escape liability by stating that a court approval is needed before it can be made liable. This defense can only be availed by petitioner corporation against petitioner Villaluz but not against third persons who are not parties to the contract of surety. The petitioners hold themselves out as jointly and severally liable without any conditions in the counter-attachment bond.The petitioner corporation cannot impose requisites before it can be made liable when the law clearly does not require such requisites to be fulfilled.[48](Emphases supplied.)Verily, a judgment must be read in its entirety, and it must be construed as a whole so as to bring all of its parts into harmony as far as this can be done by fair and reasonable interpretation and so as to give effect to every word and part, if possible, and to effectuate the intention and purpose of the Court, consistent with the provisions of the organic law.[49]Insurance companies are prone to invent excuses to avoid their just obligation.[50]It seems that this statement very well fits the instant case.WHEREFORE, in view of all the foregoing, the Decision and Resolution of the Court of Appeals dated16 June 2000and22 August 2000, respectively, are both AFFIRMED. Costs against petitioner.SO ORDERED.VICENTE B. CHUIDIAN,petitioner, vs.SANDIGANBAYAN (Fifth Division) and the REPUBLIC OF THE PHILIPPINES,respondents.D E C I S I O NYNARES-SANTIAGO,J.:The instant petition arises from transactions that were entered into by the government in the penultimate days of the Marcos administration.Petitioner Vicente B. Chuidian was alleged to be a dummy or nominee of Ferdinand and Imelda Marcos in several companies said to have been illegally acquired by the Marcos spouses.As a favored business associate of the Marcoses, Chuidian allegedly used false pretenses to induce the officers of the Philippine Export and Foreign Loan Guarantee Corporation (PHILGUARANTEE), the Board of Investments (BOI) and the Central Bank, to facilitate the procurement and issuance of a loan guarantee in favor of the Asian Reliability Company, Incorporated (ARCI) sometime in September 1980.ARCI, 98% of which was allegedly owned by Chuidian, was granted a loan guarantee of Twenty-Five Million U.S. Dollars (US$25,000,000.00).While ARCI represented to Philguarantee that the loan proceeds would be used to establish five inter-related projects in the Philippines, Chuidian reneged on the approved business plan and instead invested the proceeds of the loan in corporations operating in the United States, more particularly Dynetics, Incorporated and Interlek, Incorporated.Although ARCI had received the proceeds of the loan guaranteed by Philguarantee, the former defaulted in the payments thereof, compelling Philguarantee to undertake payments for the same.Consequently, in June 1985, Philguarantee sued Chuidian before the Santa Clara County Superior Court,[1]charging that in violation of the terms of the loan, Chuidian not only defaulted in payment, but also misused the funds by investing them in Silicon Valley corporations and using them for his personal benefit.For his part, Chuidian claimed that he himself was a victim of the systematic plunder perpetrated by the Marcoses as he was the true owner of these companies, and that he had in fact instituted an action before the Federal Courts of the United States to recover the companies which the Marcoses had illegally wrested from him.[2]On November 27, 1985, or three (3) months before the successful peoples revolt that toppled the Marcos dictatorship, Philguarantee entered into a compromise agreement with Chuidian whereby petitioner Chuidian shall assign and surrender title to all his companies in favor of the Philippine government.In return, Philguarantee shall absolve Chuidian from all civil and criminal liability, and in so doing, desist from pursuing any suit against Chuidian concerning the payments Philguarantee had made on Chuidians defaulted loans.It was further stipulated that instead of Chuidian reimbursing the payments made by Philguarantee arising from Chuidians default, the Philippine government shall pay Chuidian the amount of Five Million Three Hundred Thousand Dollars (US$5,300,000.00).Initial payment of Five Hundred Thousand Dollars (US$500,000.00) was actually received by Chuidian, as well as succeeding payment of Two Hundred Thousand Dollars (US$200,000.00).The remaining balance of Four Million Six Hundred Thousand Dollars (US$4,600,000.00) was to be paid through an irrevocable Letter of Credit (L/C) from which Chuidian would draw One Hundred Thousand Dollars (US$100,000.00) monthly.[3]Accordingly, on December 12, 1985, L/C No. SSD-005-85 was issued for the said amount by the Philippine National Bank (PNB).Subsequently, Chuidian was able to make two (2) monthly drawings from said L/C at the Los Angeles branch of the PNB.[4]With the advent of the Aquino administration, the newly-established Presidential Commission on Good Government (PCGG) exerted earnest efforts to search and recover money, gold, properties, stocks and other assets suspected as having been illegally acquired by the Marcoses, their relatives and cronies.Petitioner Chuidian was among those whose assets were sequestered by the PCGG.On May 30, 1986, the PCGG issued a Sequestration Order[5]directing the PNB to place under its custody, for and in behalf of the PCGG, the irrevocable L/C (No. SSD-005-85).Although Chuidian was then residing in the United States, his name was placed in the Department of Foreign Affairs Hold Order list.[6]In the meantime, Philguarantee filed a motion before the Superior Court of Santa Clara County of California in Civil Case Nos. 575867 and 577697 seeking to vacate the stipulated judgment containing the settlement between Philguarantee and Chuidian on the grounds that:(a) Philguarantee was compelled by the Marcos administration to agree to the terms of the settlement which was highly unfavorable to Philguarantee and grossly disadvantageous to the government; (b) Chuidian blackmailed Marcos into pursuing and concluding the settlement agreement by threatening to expose the fact that the Marcoses made investments in Chuidians American enterprises; and (c) the Aquino administration had ordered Philguarantee not to make further payments on the L/C to Chuidian.After considering the factual matters before it, the said court concluded that Philguarantee had not carried its burden of showing that the settlement between the parties should be set aside.[7]On appeal, the Sixth Appellate District of the Court of Appeal of the State of California affirmed the judgment of the Superior Court of Sta. Clara County denying Philguarantees motion to vacate the stipulated judgment based on the settlement agreement.[8]After payment on the L/C was frozen by the PCGG, Chuidian filed before the United States District Court, Central District of California, an action against PNB seeking, among others, to compel PNB to pay the proceeds of the L/C.PNB countered that it cannot be held liable for a breach of contract under principles of illegality, international comity and act of state, and thus it is excused from payment of the L/C.Philguarantee intervened in said action, raising the same issues and arguments it had earlier raised in the action before the Santa Clara Superior Court, alleging that PNB was excused from making payments on the L/C since the settlement was void due to illegality, duress and fraud.[9]The Federal Court rendered judgment ruling:(1) in favor of PNB excusing the said bank from making payment on the L/C; and (2) in Chuidians favor by denying intervenor Philguarantees action to set aside the settlement agreement.[10]Meanwhile, on February 27, 1987, a Deed of Transfer[11]was executed between then Secretary of Finance Jaime V. Ongpin and then PNB President Edgardo B. Espiritu, to facilitate the rehabilitation of PNB, among others, as part of the governments economic recovery program.The said Deed of Transfer provided for the transfer to the government of certain assets of PNB in exchange for which the government would assume certain liabilities of PNB.[12]Among those liabilities which the government assumed were unused commercial L/Cs and Deferred L/Cs, including SSD-005-85 listed under Dynetics, Incorporated in favor of Chuidian in the amount of Four Million Four Hundred Thousand Dollars (US$4,400,000.00).[13]On July 30, 1987, the government filed before the Sandiganbayan Civil Case No. 0027 against the Marcos spouses, several government officials who served under the Marcos administration, and a number of individuals known to be cronies of the Marcoses, including Chuidian.The complaint sought the reconveyance, reversion, accounting and restitution of all forms of wealth allegedly procured illegally and stashed away by the defendants.In particular, the complaint charged that Chuidian, by himself and/or in conspiracy with the Marcos spouses, engaged in devices, schemes and stratagems by:(1) forming corporations for the purpose of hiding and avoiding discovery of illegally obtained assets; (2) pillaging the coffers of government financial institutions such as the Philguarantee; and (3) executing the court settlement between Philguarantee and Chuidian which was grossly disadvantageous to the government and theFILIPINOpeople.In fine, the PCGG averred that the above-stated acts of Chuidian committed in unlawful concert with the other defendants constituted gross abuse of official position of authority, flagrant breach of public trust and fiduciary obligations, brazen abuse of right and power, unjust enrichment, violation of the Constitution and laws of the land.[14]While the case was pending, on March 17, 1993, the Republic of the Philippines filed a motion for issuance of a writ of attachment[15]over the L/C, citing as grounds therefor the following:(1)Chuidian embezzled or fraudulently misapplied the funds of ARCI acting in a fiduciary capacity, justifying issuance of the writ under Section 1(b), Rule 57 of the Rules of Court;(2)The writ is justified under Section 1(d) of the same rule as Chuidian is guilty of fraud in contracting the debt or incurring the obligation upon which the action was brought, or that he concealed or disposed of the property that is the subject of the action;(3)Chuidian has removed or disposed of his property with the intent of defrauding the plaintiff as justified under Section 1(c) of Rule 57; and(4)Chuidian is residing out of the country or one on whom summons may be served by publication, which justifies the writ of attachment prayed for under Section 1(e) of the same rule.The Republic also averred that should the action brought by Chuidian before the U.S. District Court of California to compel payment of the L/C prosper, inspite of the sequestration of the said L/C, Chuidian can ask the said foreign court to compel the PNB Los Angeles branch to pay the proceeds of the L/C.Eventually, Philguarantee will be made to shoulder the expense resulting in further damage to the government.Thus, there was an urgent need for the writ of attachment to place the L/C under the custody of the Sandiganbayan so the same may be preserved as security for the satisfaction of judgment in the case before said court.Chuidian opposed the motion for issuance of the writ of attachment, contending that:(1)The plaintiffs affidavit appended to the motion was in form and substance fatally defective;(2)Section 1(b) of Rule 57 does not apply since there was no fiduciary relationship between the plaintiff and Chuidian;(3)While Chuidian does not admit fraud on his part, if ever there was breach of contract, such fraud must be present at the time the contract is entered into;(4)Chuidian has not removed or disposed of his property in the absence of any intent to defraud plaintiff;(5)Chuidians absence from the country does not necessarily make him a non-resident; and(6)Service of summons by publication cannot be used to justify the issuance of the writ since Chuidian had already submitted to the jurisdiction of the Court by way of a motion to lift the freeze order filed through his counsel.On July 14, 1993, the Sandiganbayan issued a Resolution ordering the issuance of a writ of attachment against L/C No. SSD-005-85 as security for the satisfaction of judgment.[16]The Sandiganbayans ruling was based on its disquisition of the five points of contention raised by the parties.On the first issue, the Sandiganbayan found that although no separate affidavit was attached to the motion, the motion itself contained all the requisites of an affidavit, and the verification thereof is deemed a substantial compliance of Rule 57, Section 3 of the Rules of Court.Anent the second contention, the Sandiganbayan ruled that there was no fiduciary relationship existing between Chuidian and the Republic, but only between Chuidian and ARCI.Since the Republic is not privy to the fiduciary relationship between Chuidian and ARCI, it cannot invoke Section 1(b) of Rule 57.On the third issue of fraud on the part of Chuidian in contracting the loan, or in concealing or disposing of the subject property, the Sandiganbayan held that there was aprima faciecase of fraud committed by Chuidian, justifying the issuance of the writ of attachment.The Sandiganbayan also adopted the Republics position that since it was compelled to pay, through Philguarantee, the bank loans taken out by Chuidian, the proceeds of which were fraudulently diverted, it is entitled to the issuance of the writ of attachment to protect its rights as creditor.Assuming that there is truth to the governments allegation that Chuidian has removed or disposed of his property with the intent to defraud, the Sandiganbayan held that the writ of attachment is warranted, applying Section 1(e) of Rule 57.Besides, the Rules provide for sufficient security should the owner of the property attached suffer damage or prejudice caused by the attachment.[17]Chuidians absence from the country was considered by the Sandiganbayan to be the most potent insofar as the relief being sought is concerned.[18]Taking judicial notice of the admitted fact that Chuidian was residing outside of the country, the Sandiganbayan observed that:x x x no explanation whatsoever was given by him as to his absence from the country, or as to his homecoming plans in the future.It may be added, moreover, that he has no definite or clearcut plan to return to the country at this juncture given the manner by which he has submitted himself to the jurisdiction of the court.[19]Thus, the Sandiganbayan ruled that even if Chuidian is one who ordinarily resides in the Philippines, but is temporarily living outside, he is still subject to the provisional remedy of attachment.Accordingly, an order of attachment[20]was issued by the Sandiganbayan on July 19, 1993, ordering the Sandiganbayan Sheriff to attach PNB L/C No. SSD-005-85 for safekeeping pursuant to the Rules of Court as security for the satisfaction of judgment in Sandiganbayan Civil Case No. 0027.On August 11, 1997, or almost four (4) years after the issuance of the order of attachment, Chuidian filed a motion to lift the attachment based on the following grounds:First, he had returned to the Philippines; hence, the Sandiganbayans most potent ground for the issuance of the writ of preliminary attachment no longer existed.Since his absence in the past was the very foundation of the Sandiganbayans writ of preliminary attachment, his presence in the country warrants the immediate lifting thereof.Second, there was no evidence at all of initial fraud or subsequent concealment except for the affidavit submitted by the PCGG Chairman citing mere belief and information and not on knowledge of the facts. Moreover, this statement is hearsay sincethe PCGG Chairman was not a witness to the litigated incidents, was never presented as a witness by the Republic and thus was not subject to cross-examination.Third, Chuidian denies that he ever disposed of his assets to defraud the Republic, and there is nothing in the records that support the Sandiganbayans erroneous conclusion on the matter.Fourth, Chuidian belied the allegation that he was also a defendant in other related criminal action, for in fact, he had never been a defendant in any prosecution of any sort in the Philippines.[21]Moreover, he could not have personally appeared in any other action because he had been deprived of his right to a travel document by the government.Fifth, the preliminary attachment was, in the first place, unwarranted because he was not guilty of fraud in contracting the debt or incurring the obligation.In fact, the L/C was not a product of fraudulent transactions, but was the result of a US Court-approved settlement.Although he was accused of employing blackmail tactics to procure the settlement, the California Supreme Court ruled otherwise.And in relation thereto, he cites as a sixth ground the fact that all these allegations of fraud and wrongdoing had already been dealt with in actions before the State and Federal Courts of California.While it cannot technically be considered as forum shopping, it is nevertheless a form of suit multiplicity over the same issues, parties and subject matter.[22]These foreign judgments constituteres judicatawhich warrant the dismissal of the case itself.Chuidian further contends that should the attachment be allowed to continue, he will be deprived of his property without due process.The L/C was payment to Chuidian in exchange for the assets he turned over to the Republic pursuant to the terms of the settlement in Case No. 575867.Said assets, however, had already been sold by the Republic and cannot be returned to Chuidian should the government succeed in depriving him of the proceeds of the L/C.Since said assets were disposed of without his or the Sandiganbayans consent, it is the Republic who is fraudulently disposing of assets.Finally, Chuidian stressed that throughout the four (4) years that the preliminary attachment had been in effect, the government had not set the case for hearing.Under Rule 17, Section 3, the case itself should be dismissed for laches owing to the Republics failure to prosecute its action for an unreasonable length of time.Accordingly, the preliminary attachment, being only a temporary or ancillary remedy, must be lifted and the PNB ordered to immediately pay the proceeds of the L/C to Chuidian.Subsequently, on August 20, 1997, Chuidian filed a motion to require the Republic to deposit the L/C in an interest bearing account.[23]He pointed out to the Sandiganbayan that the face amount of the L/C had, since its attachment, become fully demandable and payable.However, since the amount is just lying dormant in the PNB, without earning any interest, he proposed that it would be to the benefit of all if the Sandiganbayan requires PNB to deposit the full amount to a Sandiganbayan trust account at any bank in order to earn interest while awaiting judgment of the action.The Republic opposed Chuidians motion to lift attachment, alleging that Chuidians absence was not the only ground for the attachment and, therefore, his belated appearance before the Sandiganbayan is not a sufficient reason to lift the attachment.Moreover, allowing the foreign judgment as a basis for the lifting of the attachment would essentially amount to an abdication of the jurisdiction of the Sandiganbayan to hear and decide the ill gotten wealth casesLODGEDbefore it in deference to the judgment of foreign courts.In a Resolution promulgated on November 13, 1998, the Sandiganbayan denied Chuidians motion to lift attachment.[24]On the same day, the Sandiganbayan issued another Resolution denying Chuidians motion to require deposit of the attached L/C in an interest bearing account.[25]In a motion seeking a reconsideration of the first resolution, Chuidian assailed the Sandiganbayans finding that the issues raised in his motion to lift attachment had already been dealt with in the earlier resolution dated July 14, 1993 granting the application for the writ of preliminary attachment based on the following grounds:First, Chuidian was out of the country in 1993, but is now presently residing in the country.Second, the Sandiganbayan could not have known then that his absence was due to the non-renewal of his passport at the instance of the PCGG.Neither was it revealed that the Republic had already disposed of Chuidians assets ceded to the Republic in exchange for the L/C.The foreign judgment was not an issue then because at that time, said judgment had not yet been issued and much less final.Furthermore, the authority of the PCGG Commissioner to subscribe as a knowledgeable witness relative to the issuance of the writ of preliminary attachment was raised for the first time in the motion to lift the attachment.Finally, the issue of laches could not have been raised then because it was the Republics subsequent neglect or failure to prosecute despite the passing of the years that gave rise to laches.[26]Chuidian also moved for a reconsideration of the Sandiganbayan resolution denying the motion to require deposit of the L/C into an interest bearing account.He argued that contrary to the Sandiganbayans pronouncement, allowing the deposit would not amount to a virtual recognition of his right over the L/C, for he is not asking for payment but simply requesting that it be deposited in an account under the control of the Sandiganbayan.He further stressed that the Sandiganbayan abdicated its bounden duty to rule on an issue when it found that his motion will render nugatory the purpose of sequestration and freeze orders over the L/C. Considering that his assets had already been sold by the Republic, he claimed that the Sandiganbayans refusal to exercise its fiduciary duty over attached assets will cause him irreparable injury.Lastly, the Sandiganbayans position that Chuidian was not the owner but a mere payee-beneficiary of the L/C issued in his favor negates overwhelming jurisprudence on the Negotiable Instruments Law, while at the same time obliterating his rights of ownership under the Civil Code.[27]On July 13, 1999, the Sandiganbayan gave due course to Chuidians plea for the attached L/C to be deposited in an interest-bearing account, on the ground that it will redound to the benefit of both parties.The Sandiganbayan declared the national government as the principal obligor of the L/C even though the liability remained in the books of the PNB for accounting and monitoring purposes.The Sandiganbayan, however, denied Chuidians motion for reconsideration of the denial of his motion to lift attachment, agreeing in full with the governments apriorisms that:x x x(1) it is a matter of record that the Court granted the application for writ of attachment upon grounds other than defendants absence in the Philippine territory.In its Resolution dated July 14, 1993, the Court found a prima facie case of fraud committed by defendant Chuidian, and that defendant has recovered or disposed of his property with the intent of defrauding plaintiff; (2) Chuidians belated presence in the Philippines cannot be invoked to secure the lifting of attachment.The rule is specific that it applies to a party who is about to depart from the Philippines with intent to defraud his creditors.Chuidians stay in the country is uncertain and he may leave at will because he holds a foreign passport; and (3) Chuidians other ground, sufficiency of former PCGG Chairman Gunigundos verification of the complaint, has been met fairly and squarely in the Resolution of July 14, 1993.[28]Hence, the instant petition forcertioraricontending that the respondent Sandiganbayan committed grave abuse of discretion amounting to lack or excess of jurisdiction when it ruled that:1)Most of the issues raised in the motion to lift attachment had been substantially addressed in the previous resolutions dated July 14, 1993 and August 26, 1998, while the rest were of no imperative relevance as to affect the Sandiganbayans disposition; and2)PNB was relieved of the obligation to pay on its own L/C by virtue of Presidential Proclamation No. 50.The Rules of Court specifically provide for the remedies of a defendant whose property or asset has been attached.As has been consistently ruled by this Court, the determination of the existence of grounds to discharge a writ of attachment rests in the sound discretion of the lower courts.[29]The question in this case is:What can the herein petitioner do to quash the attachment of the L/C?There are two courses of action available to the petitioner:First.To file a counterbond in accordance with Rule 57, Section 12, which provides:SEC. 12.Discharge of attachment upon giving counterbond.At anytime after an order of attachment has been granted, the party whose property has been attached, or the person appearing on his behalf, may, upon reasonable notice to the applicant, apply to the judge who granted the order, or to the judge of the court in which the action is pending, for an order discharging the attachment wholly or in part on the security given.The judge shall, after hearing, order the discharge of the attachment if a cash deposit is made, or a counterbond executed to the attaching creditor is filed, on behalf of the adverse party, with the clerk or judge of the court where the application is made, in an amount equal to the value of the property attached as determined by the judge, to secure the payment of any judgment that the attaching creditor may recover in the action.Upon the filing of such counter-bond, copy thereof shall forthwith be served on the attaching creditor or his lawyer.Upon the discharge of an attachment in accordance with the provisions of this section the property attached, or the proceeds of any sale thereof, shall be delivered to the party making the deposit or giving the counter-bond, or the person appearing on his behalf, the deposit or counter-bond aforesaid standing in place of the property so released.Should such counterbond for any reason be found to be, or become, insufficient, and the party furnishing the same fail to file an additional counter-bond, the attaching creditor may apply for a new order of attachment.orSecond.To quash the attachment on the ground that it was irregularly or improvidently issued, as provided for in Section 13 of the same Rule:SEC. 13.Discharge of attachment for improper or irregular issuance. -The party whose property has been attached may also, at any time either before or after the release of the attached property, or before any attachment shall have been actually levied, upon reasonable notice to the attaching creditor, apply to the judge who granted the order, or to the judge of the court in which the action is pending, for an order to discharge the attachment on the ground that the same was improperly or irregularly issued.If the motion be made on affidavits on the part of the party whose property has been attached, but not otherwise, the attaching creditor may oppose the same by counter-affidavits or other evidence in addition to that on which the attachment was made.After hearing, the judge shall order the discharge of the attachment if it appears that it was improperly or irregularly issued and the defect is not cured forthwith.It would appear that petitioner chose the latter because the grounds he raised assail the propriety of the issuance of the writ of attachment.By his own admission, however, he repeatedly acknowledged that his justifications to warrant the lifting of the attachment are facts or events that came to light or took place after the writ of attachment had already been implemented.More particularly, petitioner emphasized that four (4) years after the writ was issued, he had returned to the Philippines.Yet while he noted that he would have returned earlier but for the cancellation of his passport by the PCGG, he was not barred from returning to the Philippines. Then he informed the Sandiganbayan that while the case against him was pending, but after the attachment had already been executed, the government lost two (2) cases for fraudLODGEDagainst him before the U.S. Courts, thus invokingres judicata.Next, he also pointed out that the government is estopped from pursuing the case against him for failing to prosecute for the number of years that it had been pending litigation.It is clear that these grounds have nothing to do with the issuance of the writ of attachment.Much less do they attack the issuance of the writ at that time as improper or irregular.And yet, the rule contemplates that the defect must be in the very issuance of the attachment writ.For instance, the attachment may be discharged under Section 13 of Rule 57 when it is proven that the allegations of the complaint were deceptively framed,[30]or when the complaint fails to state a cause of action.[31]Supervening events which may or may not justify the discharge of the writ are not within the purview of this particular rule.In the instant case, there is no showing that the issuance of the writ of attachment was attended by impropriety or irregularity.APARTfrom seeking a reconsideration of the resolution granting the application for the writ, petitioner no longer questioned the writ itself.For four (4) long years he kept silent and did not exercise any of the remedies available to a defendant whose property or asset has been attached.It is rather too late in the day for petitioner to question the propriety of the issuance of the writ.Petitioner also makes capital of the two foreign judgments which he claims warrant the application of the principle ofres judicata.The first judgment, in Civil Case Nos. 575867 and 577697 brought by Philguarantee before the Santa Clara Country Superior Court, denied Philguarantees prayer to set aside the stipulated judgment wherein Philguarantee and Chuidian agreed on the subject attached L/C.On March 14, 1990, the Court of Appeal of the State of California affirmed the Superior Courts judgment.The said judgment became the subject of a petition for review by the California Supreme Court.There is no showing, however, of any final judgment by the California Supreme Court.The records, including petitioners pleadings, are bereft of any evidence to show that there is a final foreign judgment which the Philippine courts must defer to.Hence,res judicatafinds no application in this instance because it is a requisite that the former judgment or order must be final.[32]Second, petitioner cites the judgment of the United States District Court in Civil Case 86-2255 RSWL brought by petitioner Chuidian against PNB to compel the latter to pay the L/C.The said Courts judgment, while it ruled in favor of petitioner on the matter of Philguarantees action-in-intervention to set aside the settlement agreement, also ruled in favor of PNB, to wit:Under Executive Order No. 1, the PCGG is vested by the Philippine President with the power to enforce its directives and orders by contempt proceedings.Under Executive Order No. 2, the PCGG is empowered to freeze any, and all assets, funds and property illegally acquired by former President Marcos or his close friends and business associates.On March 11, 1986, PNB/Manila received an order from the PCGG ordering PNB to freeze any further drawings on the L/C.The freeze order has remained in effect and was followed by a sequestration order issued by the PCGG.Subsequently, Chuidians Philippine counsel filed a series of challenges to the freeze and sequestration orders, which challenges were unsuccessful as the orders were found valid by the Philippine Supreme Court.The freeze and sequestration orders are presently in effect.Thus, under the PCGG order and Executive Orders Nos. 1 and 2, performance by PNB would be illegal under Philippine Law.Therefore PNB is excused from performance of the L/C agreement as long as the freeze and sequestration orders remain in effect.(Underscoring ours)x x xx x xx x xChuidian argues that the fact that the L/C was issued pursuant to a settlement in California, that the negotiations for which occurred in California, and that two of the payments were made at PNB/LA, compels the conclusion that the act of prohibiting payment of the L/C occurred in Los Angeles.However, the majority of the evidence andTchacoshandSabbatinocompel the opposite conclusion.The L/C was issued in Manila, such was done at the request of a Philippine government instrumentality for the benefit of a Philippine citizen, the L/C was to be performed in the Philippines, all significant events relating to the issuance and implementation of the L/C occurred in the Philippines, the L/C agreement provided that the L/C was to be construed according to laws of the Philippines, and the Philippine government certainly has an interest in preventing the L/C from being remitted in that it would be the release of funds that are potentially illgotten gains.Accordingly, the Court finds that the PCGG orders are acts of state that must be respected by this Court, and thus PNB is excused from making payment on the L/C as long as the freeze and sequestration orders remain in effect.[33](Underscoring ours)Petitioners own evidence strengthens the governments position that the L/C is under the jurisdiction of the Philippine government and that the U.S. Courts recognize the authority of the Republic to sequester and freeze said L/C.Hence, the foreign judgments relied upon by petitioner do not constitute a bar to the Republics action to recover whatever alleged ill-gotten wealth petitioner may have acquired.Petitioner may argue, albeit belatedly, that he also raised the issue that there was no evidence of fraud on record other than the affidavit of PCGG Chairman Gunigundo.This issue of fraud, however, touches on the very merits of the main case which accuses petitioner of committing fraudulent acts in his dealings with the government.Moreover, this alleged fraud was one of the grounds for the application of the writ, and the Sandiganbayan granted said application after it found aprima faciecase of fraud committed by petitioner.In fine, fraud was not only one of the grounds for the issuance of the preliminary attachment, it was at the same time the governments cause of action in the main case.We have uniformly held that:x x xwhen the preliminary attachment is issued upon a ground which is at the same time the applicants cause of action; e.g.,an action for moneyor property embezzled orfraudulently misappliedor converted to his own use by a public officer, or an officer of a corporation, or an attorney, factor, broker, agent, or clerk, in the course of his employment as such, or by any other person in a fiduciary capacity, or for a willful violation of duty, or an action against a party who has been guilty of fraud in contracting the debt or incurring the obligation upon which the action is brought,the defendant is not allowed to file a motion to dissolve the attachment under Section 13 of Rule 57 by offering to show the falsity of the factual averments in the plaintiffs application and affidavits on which the writ was based and consequently that the writ based thereon had been improperly or irregularly issued the reason being that the hearing on such a motion for dissolution of the writ would be tantamount to a trial of the merits of the action.In other words, the merits of the action would be ventilated at a mere hearing of a motion, instead of at the regular trial.[34](Underscoring ours)Thus, this Court has time and again ruled that the merits of the action in which a writ of preliminary attachment has been issued are not triable on a motion for dissolution of the attachment, otherwise an applicant for the lifting of the writ could force a trial of the merits of the case on a mere motion.[35]It is not the Republics fault that the litigation has been protracted.There is as yet no evidence of fraud on the part of petitioner.Petitioner is only one of the twenty-three (23) defendants in the main action.As such, the litigation would take longer than most cases.Petitioner cannot invoke this delay in the proceedings as an excuse for not seeking the proper recourse in having the writ of attachment lifted in due time.If ever laches set in, it was petitioner, not the government, who failed to take action within a reasonable time period.Challenging the issuance of the writ of attachment four (4) years after its implementation showed petitioners apparent indifference towards the proceedings before the Sandiganbayan.In sum, petitioner has failed to convince this Court that the Sandiganbayan gravely abused its discretion in a whimsical, capricious and arbitrary manner.There are no compelling reasons to warrant the immediate lifting of the attachment even as the main case is still pending.On the other hand, allowing the discharge of the attachment at this stage of the proceedings would put in jeopardy the right of the attaching party to realize upon the relief sought and expected to be granted in the main or principal action.It would have the effect of prejudging the main case.The attachment is a mere provisional remedy to ensure the safety and preservation of the thing attached until the plaintiff can, by appropriate proceedings, obtain a judgment and have such property applied to its satisfaction.[36]To discharge the attachment at this stage of the proceedings would render inutile any favorable judgment should the government prevail in the principal action against petitioner.Thus, the Sandiganbayan, in issuing the questioned resolutions, which are interlocutory in nature, committed no grave abuse of discretion amounting to lack or excess of jurisdiction.As long as the Sandiganbayan acted within its jurisdiction, any alleged errors committed in the exercise of its jurisdiction will amount to nothing more than errors of judgment which are reviewable by timely appeal and not by special civil action ofcertiorari.[37]Moreover, we have held that when the writ of attachment is issued upon a ground which is at the same time the applicants cause of action, the only other way the writ can be lifted or dissolved is by a counterbond, in accordance with Section 12 of the same rule.[38]This recourse, however, was not availed of by petitioner, as noted by the Solicitor General in his comment.[39]To reiterate, there are only two ways of quashing a writ of attachment:(a) by filing a counterbond immediately; or (b) by moving to quash on the ground of improper and irregular issuance.[40]These grounds for the dissolution of an attachment are fixed in Rule 57 of the Rules of Court and the power of the Court to dissolve an attachment is circumscribed by the grounds specified therein.[41]Petitioners motion to lift attachment failed to demonstrate any infirmity or defect in the issuance of the writ of attachment; neither did he file a counterbond.Finally, we come to the matter of depositing the Letter of Credit in an interest-bearing account.We agree with the Sandiganbayan that any interest that the proceeds of the L/C may earn while the case is being litigated would redound to the benefit of whichever party will prevail, the Philippine government included.Thus, we affirm the Sandiganbayans ruling that the proceeds of the L/C should be deposited in an interest bearing account with the Land Bank of the Philippines for the account of the Sandiganbayan in escrow until ordered released by the said Court.We find no legal reason, however, to release the PNB from any liability thereunder.The Deed of Transfer, whereby certain liabilities of PNB were transferred to the national government, cannot affect the said L/C since there was no valid substitution of debtor.Article 1293 of the New Civil Code provides:Novation which consists in substituting a new debtor in the place of the original one, may be made without the knowledge or against the will of the latter, but not without the consent of the creditor.Payment by the new debtor gives him the rights mentioned in Articles 1236 and 1237.Accordingly, any substitution of debtor must be with the consent of the creditor, whose consent thereto cannot just be presumed.Even though Presidential Proclamation No. 50 can be considered an insuperable cause, it does not necessarily make the contracts and obligations affected thereby exceptions to the above-quoted law, such that the substitution of debtor can be validly made even without the consent of the creditor.Presidential Proclamation No. 50 was not intended to set aside laws that govern the very lifeblood of the nations commerce and economy.In fact, the Deed of Transfer that was executed between PNB and the government pursuant to the said Presidential Proclamation specifically stated that it shall be deemed effective only upon compliance with several conditions, one of which requires that:(b)the BANK shall have secured such governmental and creditors approvals as may be necessary to establish the consummation, legality and enforceability of the transactions contemplated hereby.The validity of this Deed of Transfer is not disputed.Thus, PNB is estopped from denying its liability thereunder considering that neither the PNB nor the government bothered to secure petitioners consent to the substitution of debtors.We are not unmindful that any effort to secure petitioners consent at that time would, in effect, be deemed an admission that the L/C is valid and binding.Even the Sandiganbayan found that:xxxMovant has basis in pointing out that inasmuch as the L/C was issued in his favor, he is presumed to be the lawful payee-beneficiary of the L/C until such time that the plaintiff successfully proves that said L/C is ill-gotten and he has no right over the same.[42]InRepublic v. Sandiganbayan,[43]we held that the provisional remedies, such as freeze orders and sequestration, were not meant to deprive the owner or possessor of his title or any right to the property sequestered, frozen or taken over and vest it in the sequestering agency, the Government or other person.Thus, until such time that the government is able to successfully prove that petitioner has no right to claim