Santos vs. Hon. Aquino, Finasia Invenvestments Finance Corp. et al.

Facts: Herein petitioners filed an action to recover a specific amount of money against the the defendant. The petitioners alleged that through the defendants' fraudulent misrepresentations, they were lured to make the money placements with FINASIA. The petitioners thereafter filed an application for preliminary attachment against the property of the defendant, filed their bond and the same was granted by the court. Defendant filed a counterbond but the petitioner opposed the filing of the same and they claim such bond was insufficient and the bonding company of the defendant was unreliable. Defendant filed a motion to substitute the attached properties on the ground that the property being attached was excessive to act as a security for the outcome of the trial. Due to the negligence of the counsel of the petitioner and the motions filed by the defendant with an apprasial report of a private appraiser claiming that the property being substituted is enough to cover as a security for the outcome of the trial. The judge thereafter discharged all the attached properties and substituted the 8 small lots owned by FINASIA and for which under receivership. Aggrieved by the decision, the petitioner now seeks to annul the said order on the ground that they were denied due process and that the order of substitution was issued in excess of the court's jurisdiction. Issue: Whether or not the petitioners claim was meritorious. Held It was held by the SC that the petitioners claim is of merit. Dissolution of atttachment as provided by law can only be made upon security of a counterbond offered by the defendant upon application to the court, with notice to, and after hearing, the attaching creditor or if it appears that the attachment was improperly or irregularly issued. If an attachment is excessive, the remedy of the defendant is to apply to the court for a reduction or partial discharge of the attachment, not the total discharge and substitution of the attached properties. The reason for this is that the lien acquired by the plaintiff-creditor as of the date of the original levy would be lost. It would in effect constitute a deprivation without due process of law of the attaching creditors' interest in the attached property as security for the satisfaction of the judgment which he may obtain in the action