China Banking Corp. v.

Asian Construction and Dev Corp

FACTS:

 China Bank granted respondent an Omnibus Credit Line in an amount of 90M. Alleging
respondent’s failure to comply with its obligations, CBC filed a complaint for recovery of
sum of money and damages with prayer for the issuance of a Writ of Preliminary
Attachment before the RTC Makati.
 In the Complaint, CBC alleged that respondent misappropriated the proceeds received
by the latter from various construction contracts.
 The RTC issued an Order granting CBC’s writ of PA, and thus was implemented levying
respondent’s properties (vans, dump truck, cement mixers, cargo trucks, utility
vehicles, machinery, equipment and office machine and fixtures)
 RTC issued a Summary judgment. Respondent filed its Notice of Appeal. CBC filed a
motion to take custody of the attached properties with Motion to Grant Authority to Sell
the properties in a public auction.
 Respondent filed its Opposition arguing that there can be no sale of the latter’s attached
properties in the absence of a final and executory judgment against it.
 The CA denied CBC’s motion to grant authority to sell stating that:
- Selling the attached properties prior to final judgment is premature and contrary to
the intent and purpose of PA.:
1. The subject properties are NOT perishable; and
2. The sale of them may serve the interest of CBC but not that of respondent’s
 The CA acknowledged the fact that respondent is a corporation engaged in construction
business, the preservation of its properties is of paramount importance, and in the event
the decision of the lower court is reversed, great prejudice will result if the attached
properties were already sold.
ISSUE Whether or not the CA erred in disallowing the sale of the attached properties in
contravention of Section 11 Rule 57?
HELD: No. Although Section 11 of Rule 57 allows an attached property be sold after levy on
attachment and before entry of judgment whenever it shall made to appear to the court in which
the action is pending, upon hearing with notice to both parties, it is required that the property be
perishable or that the interests of all the parties to the action will be subserved by the sale of the
attached property.
Contrary to CBC’s contention that the bond posted by it can be claimed by ACDC in case the
latter prevails, under Sec 4 Rule 57 of the ROC, the bond posted by CBC answers only for the
payment of all damages which ACDC may sustain if the court shall finally adjudge that CBC 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.”
Clearly, ACDC can only claim from the bond for 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.
As to the issue of whether the attached properties are perishable under Sec 11 Rule 57, the
Court did not dwell on it. It reasoned out that such determination requires reception of evidence
which the Court cannot do in a petition for Certiorari. It is a factual issue beyond the scope of
certiorari.
Side note:
Mossler v Denmark- I20 automobiles and 2 airplanes) there would be no material derioration of
the car itself or any of its appurtenances if the car was properly cared for.
Mcreey case- the SC 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 proven, fruitless to the
creditor and that the purpose of its original seizure will be frustrated, the sale of attached
property is justified.