PACC Vs RCJ

G.R.
193821 | NOV 23, 2015

PHIL-AIR CONDITIONING CENTER
vs.
RCJ LINES AND ROLAND ABADILLA, JR.
Brion, J.:
FACTS:
On various dates between March 5, 1990, and Aug 29, 1990, petitioner sold to respondent 4
Carrier Paris 240 air conditioning units for buses. The total purchases amounted to Php
1,240,000.00 as shown on a sales invoice dated Nov 5, 1990. RCJ has only paid Php 400,000.00,
leaving a balance of Php 840,000.00
RCJ lines issued 3 post-dated checks in favor of Phil-Air. However, all post-dated checks were
dishonored when the petitioner presented them for payment. Before presenting the third check
for payment, Phil-Air sent a demand letter to Rolando Abadilla, Sr., asking him to fund the
post-dated checks. Because of RCJ’s inaction despite demand, Phil-Air filed a complaint for a
sum of money with prayer for the issuance of preliminary attachment.
In its answer with compulsory counterclaim, RCJ Lines admitted that it purchased the units in
the total amount of Php 1,240,00.00 and that it had only paid Php 400,00.00. It refused to pay the
balance because Phil-Air allegedly breached its warranty. Respondent averred that the units did
not sufficiently cool the uses despite repeated repairs. The price quotation provided that full
payment should be made upon the units' complete installation. Complete installation, according
to RCJ Lines, is equivalent to being in operational condition.
As it turned out, the Carrier Paris 240 model was not suited to the 45 to 49-seater buses
operated by RCJ Lines. The units, according to RCJ Lines, were defective and did not attain full
operational condition.
RTC RULING: It granted for the issuance of a writ of preliminary attachment after Phil-Air posted
an attachment bond in the amount of Php 1,656,000.00. 2 Buses of RCJ Lines were attached
pursuant to the writ. The attachment, however, was later lifted when the RTC granted RCJ Lines'
urgent motion to discharge the writ of attachment. RCJ Lines posted a counter-bond in the same
amount as the attachment bond. The RTC found that Phil-Air was guilty of laches and estopped
from pursuing its claim.
CA RULING: It affirmed the decision of the RTC. CA held that Phil-Air’s cause of action was
barred by laches. It also held that Phil-Air branched its warranty and ordered Phil-Air to
reimburse the premium on the counter-bond amounting to Php 82,274.00 since the writ was
improvidently issued.
Hence, this petition.

ISSUE/S:
Whether the petitioner’s claim is barred by laches, and
Whether Phil-Air should reimburse RCJ Lines for the counter-bond premium and its alleged
unrealized profits.
RULING:
NO. The Supreme Court granted the petition. For the 1st issue, the court held that there is
no room to apply the concept of laches when the law provides the period within which to enforce
a claim or file an action in court. Phil-Air's complaint for a sum of money is based on a written
contract of sale. The ten-year prescriptive period under Article 1144 of the Civil Code thus
applies. The court noted that Phil-Air filed the complaint with the RTC on April 1, 1998. Counting
from the date of the sales invoice, or from the date of the delivery receipts, or even from the date
of the price quotation, it is clear that the complaint was filed within the ten-year prescriptive
period. Contrary to the CA's ruling, laches does not apply.
As for the 2nd issue, the court held that Phil-Air is not directly liable for the counter-bond
premium and RCJ Lines’ alleged unrealized profits. A writ of preliminary attachment is a
provisional remedy issued by the court where an action is pending to be levied upon the property
or properties of the defendant. The property is held by the sheriff as security for the satisfaction
of whatever judgment that might be secured by the attaching party against the defendant.The
grant of the writ is conditioned not only on the finding of the court that there exists a valid
ground for its issuance. The Rules also require the applicant to post a bond.
“Section 4 of Rule 57 of the Rules of Civil Procedure (Rules) provides that "the party
applying for the order must...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 that may be adjudged to the adverse party and all damages that he
may sustain by reason of the attachment, if the court shall finally adjudge that the
applicant was not entitled thereto.”
Thus, Phil-Air cannot be liable to pay RCJ for the premiums it paid when it issued the
counter-bond because that is exactly what the writ of preliminary attachment is for. The
counter-bind does not have any effect on the preliminary attachment. The counter-bond serves
as a substitute for the property attached. The attachment bond answers for all damages
incurred by the party against whom attachment was issued.
The RTC, instead of declaring Phil-Air liable for the alleged unrealized profits and
counter-bond premium, should have ordered the execution of the judgment award on the
attachment bond. To impose direct liability to Phil-Air would defeat the purpose of the
attachment bond, which was not dissolved despite the lifting of the writ of preliminary
attachment.
Wherefore, petition is granted and the decision of CA is reversed and set aside.

PACC Vs RCJ

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PACC Vs RCJ

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G.R.

193821 | NOV 23, 2015

Hence, this petition.

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