Presumed solvent

In forfeiture cases of ill gotten wealth by public officials, the issuance of a preliminary writ of attachment is a necessary incident. It is needed to protect and prevent the removal, concealment and disposition of properties in the hands of unscrupulous public officers. Under the rules (Section 3 and 4, Rule 57 of the Rules of Court), the party applying for the attachment must put up a bond executed to the adverse party in an amount fixed by the court in its order granting the issuance of the writ of attachment. But if the party applying for the writ is the government, shall it still put up a bond? This is the issue raised in this case of a military Major General (CFG) and his family.

CFG and family were the respondents in the petition filed by the Republic of the Philippines (RP) for forfeiture of unlawfully acquired properties before the Sandiganbayan (SB). In said petition RP also filed a verified urgent ex-parte application for the issuance of a writ of preliminary attachment against CFG and his family. In asking for the issuance of the preliminary attachment, RP maintained that, as a sovereign political entity, it is exempt from filing the required attachment bond as provided by the Rules of Court.

Acting on this petition, the SB ordered the issuance of a writ of preliminary attachment against the properties of CFG and family but required RP to file a P1 million attachment bond. To avoid delay and to promptly protect and secure its claim, RP posted the required attachment bond. Subsequently however, it asked the SB for the release of the bond claiming that it was exempt from filing said bond. RP invoked the case of Tolentino vs. Carlos which was decided under the old Code of Civil Procedure.

The SB however denied RP’s motion. It declared that there is nothing in the Rules of Court that exempts RP from filing an attachment bond. SB reexamined the Tolentino case cited by RP and ruled that said case is no longer applicable as it was decided under the old Code of Civil Procedure. Was the SB correct?

No. The attachment bond is contingent on and answerable for all costs which may be adjudged to the adverse party and all damages which he may sustain by reason of the attachment should the court finally rule that the applicant is not entitled to the writ of attachment. Thus it is a security for the payment of the costs and damages to which the adverse party may be entitled in case there is a subsequent finding that the applicant is not entitled to the writ. The RP need not give this security as it is presumed to be always solvent and able to meet its obligations.

The Sandiganbayan thus erred when it disregarded the foregoing presumption and instead ruled that the Republic should file an attachment bond. It is clearly contrary to the ruling in the Tolentino case which has not been superseded or reversed. Thus it is the existing jurisprudence and continues to form an important part of our legal system. Under the Constitution, only the SC sitting en banc may modify or reverse a doctrine or principle of law it has laid down en banc or in division.

In fact in Badillo vs. Tayag, a fairly recent case, it was decided that when the State litigates, it is not required to put up a bond for damages or even an appeal bond because it is presumed to be solvent. In other words, the State is not required to file a bond because it is capable of paying its obligations. The pronouncement in said case is general enough to encompass attachment bonds since the purpose of the bonds in said case and in this case is essentially the same (Republic vs. Garcia et.al., G.R. 167741, July 12, 2007).

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