[G.R. No. 115678. February 23, 2001] PHILIPPINE BANK F ! ""#NI!A$I N%, petitioner, vs. H N. ! #R$ APPEAL% a&' BERNAR(IN )ILLAN#E)A, respondents. *G.R. No. 11+723.

February 23, 2001] PHILIPPINE BANK F ! ""#NI!A$I N%, petitioner, vs. H N. ! #R$ APPEAL% a&' FILIPINA% $E,$ILE "ILL%, IN!., respondents. (E!I%I N

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-NARE%.%AN$IAG , J./ Before us are consolidated petitions for review both filed by Philippine Bank of Communications; one against the May 24 !""4 #ecision of respondent Court of $ppeals in C$%&'(' )P *o' +2,-+ [!. and the other against its March +! !""/ #ecision in C$%&'(' )P *o' +20-2'[2. Both #ecisions set aside and nullified the $ugust !! !""+ 1rder[+. of the (egional 2rial Court of Manila Branch 0 granting the issuance of a writ of preliminary attachment in Civil Case *o' "!%/-0!!' 2he case commenced with the filing by petitioner on $pril , !""! of a Complaint against private respondent Bernardino 3illanueva private respondent 4ilipinas 2e5tile Mills and one )ochi 3illanueva 6now deceased7 before the (egional 2rial Court of Manila' 8n the said Complaint petitioner sought the payment of P2 244 "2-'+9 representing the proceeds or value of various te5tile goods the purchase of which was covered by irrevocable letters of credit and trust receipts e5ecuted by petitioner with private respondent 4ilipinas 2e5tile Mills as obligor; which in turn were covered by surety agreements e5ecuted by private respondent Bernardino 3illanueva and )ochi 3illanueva' 8n their $nswer private respondents admitted the e5istence of the surety agreements and trust receipts but countered that they had already made payments on the amount demanded and that the interest and other charges imposed by petitioner were onerous' 1n May +! !""+ petitioner filed a Motion for $ttachment [4. contending that violation of the trust receipts law constitutes estafa thus providing ground for the issuance of a writ of preliminary attachment; specifically under paragraphs :b; and :d ; )ection ! (ule /0 of the (evised (ules of Court' Petitioner further claimed that attachment was necessary since private respondents were disposing of their properties to its detriment as a creditor' 4inally petitioner offered to post a bond for the issuance of such writ of attachment' 2he Motion was duly opposed by private respondents and after the filing of a (eply thereto by petitioner the lower court issued its $ugust !! !""+ 1rder for the issuance of a writ of preliminary attachment conditioned upon the filing of an attachment bond' 4ollowing the denial of the Motion for (econsideration filed by private respondent 4ilipinas 2e5tile Mills both private respondents filed separate petitions for certioraribefore respondent Court assailing the order granting the writ of preliminary attachment' Both petitions were granted albeit on different grounds' 8n C$%&'(' )P *o' +20-2 respondent Court of $ppeals ruled that the lower court was guilty of grave abuse of discretion in not conducting a hearing on the application for a writ of preliminary attachment and not re<uiring petitioner to substantiate its allegations of fraud embe==lement or misappropriation' 1n the other hand in C$%&'(' )P *o' +2,-+ respondent Court of $ppeals found that the grounds cited by petitioner in its Motion do not provide sufficient basis for the issuance of a writ of preliminary attachment they being mere general averments' (espondent Court of $ppeals held that neither embe==lement misappropriation nor incipient fraud may be presumed; they must be established in order for a writ of preliminary attachment to issue' >ence the instant consolidated[/. petitions charging that respondent Court of $ppeals erred in ? :!' >olding that there was no sufficient basis for the issuance of the writ of preliminary attachment in spite of the allegations of fraud embe==lement and misappropriation of the proceeds or goods entrusted to the private respondents;

2' #isregarding the fact that that the failure of 42M8 and 3illanueva to remit the proceeds or return the goods entrusted in violation of private respondents@ fiduciary duty as entrustee constitute embe==lement or misappropriation which is a valid ground for the issuance of a writ of preliminary attachment'; [-. Ae find no merit in the instant petitions' 2o begin with we are in accord with respondent Court of $ppeals in C$%&'(' )P *o' +2,-+ that the Motion for $ttachment filed by petitioner and its supporting affidavit did not sufficiently establish the grounds relied upon in applying for the writ of preliminary attachment' 2he Motion for $ttachment of petitioner states that ? !' 2he instant case is based on the failure of defendants as entrustee to pay or remit the proceeds of the goods entrusted by plaintiff to defendant as evidenced by the trust receipts 6$nne5es :B; :C; and :#; of the complaint7 nor to return the goods entrusted thereto in violation of their fiduciary duty as agent or entrustee; 2' Bnder )ection !+ of P'#' !!/ as amended violation of the trust receipt law constitute6s7 estafa 6fraud andCor deceit7 punishable under $rticle +!/ par' ![b. of the (evised Penal Code; +' 1n account of the foregoing there e5ist6s7 valid ground for the issuance of a writ of preliminary attachment under )ection ! of (ule /0 of the (evised (ules of Court particularly under sub%paragraphs :b; and :d; i'e' for embe==lement or fraudulent misapplication or conversion of money 6proceeds7 or property 6goods entrusted7 by an agent 6entrustee7 in violation of his fiduciary duty as such and against a party who has been guilty of fraud in contracting or incurring the debt or obligation; 4' 2he issuance of a writ of preliminary attachment is likewise urgently necessary as there e5ist6s7 no sufficient security for the satisfaction of any Dudgment that may be rendered against the defendants as the latter appears to have disposed of their properties to the detriment of the creditors like the herein plaintiff; /' >erein plaintiff is willing to post a bond in the amount fi5ed by this >onorable Court as a condition to the issuance of a writ of preliminary attachment against the properties of the defendants' )ection !6b7 and 6d7 (ule /0 of the then controlling (evised (ules of Court provides to wit ? )EC281* !' Grounds upon which attachment may issue ' ? $ 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 Dudgment that may be recovered in the following casesF 555 555 555

6b7 8n an action for money or property embe==led or fraudulently misapplied or converted to his 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; 555 555 555

6d7 8n 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 or in concealing or disposing of the property for the taking detention or conversion of which the action is brought; 555 555 555

Ahile the Motion refers to the transaction complained of as involving trust receipts the violation of the terms of which is <ualified by law as constituting estafa it does not follow that a writ of attachment can and should automatically issue' Petitioner cannot merely cite )ection !6b7 and 6d7 (ule /0 of the (evised (ules of Court as mere reproduction of the rules without more cannot serve as good ground for issuing a writ of attachment' $n order of attachment cannot be issued on a general averment such as one ceremoniously <uoting from a pertinent rule' [0. 2he supporting $ffidavit is even less instructive' 8t merely states as follows %% 8 #1M8*&1 )' $B(E of legal age married with address at *o' 2!4%2!- Guan Huna )treet Binondo Manila after having been sworn in accordance with law do hereby depose and say 2>$2F !' 8 am the $ssistant Manager for Central Collection Bnits $c<uired $ssets )ection of the plaintiff Philippine Bank of Communications and as such 8 have caused the preparation of the above motion for issuance of a writ of preliminary attachment; 2' 8 have read and understood its contents which are true and correct of my own knowledge; +' 2here e5ist6s7 sufficient cause of action against the defendants in the instant case; 4' 2he instant case is one of those mentioned in )ection ! of (ule /0 of the (evised (ules of Court wherein a writ of preliminary attachment may be issued against the defendants particularly sub%paragraphs :b; and :d; of said section; /' 2here is no other sufficient security for the claim sought to be enforced by the instant case and the amount due to herein plaintiff or the value of the property sought to be recovered is as much as the sum for which the order for attachment is granted above all legal counterclaims' $gain it lacks particulars upon which the court can discern whether or not a writ of attachment should issue' Petitioner cannot insist that its allegation that private respondents failed to remit the proceeds of the sale of the entrusted goods nor to return the same is sufficient for attachment to issue' Ae note that petitioner anchors its application upon )ection !6d7 (ule /0' 2his particular provision was ade<uately e5plained in Liberty Insurance Corporation v. Court of Appeals [,. as follows ? 2o sustain an attachment on this ground it must be shown that the debtor in contracting the debt or incurring the obligation intended to defraud the creditor' 2he fraud must relate to the e5ecution of the agreement and must have been the reason which induced the other party into giving consent which he would not have otherwise given' 2o constitute a ground for attachment in )ection ! 6d7 (ule /0 of the (ules of Court fraud should be committed upon contracting the obligation sued upon' A 'eb0 12 3rau'u4e&04y 5o&0ra50e' 13 a0 06e 017e o3 5o&0ra501&8 10 06e 'eb0or 6a2 a 9re5o&5e1:e' 94a& or 1&0e&01o& &o0 0o 9ay as it is in this case' 4raud is a state of mind and need not be proved by direct evidence but may be inferred from the circumstances attendant in each case (Republic v. Gonzales, ! "CRA #!!$' 6Emphasis ours7 Ae find an absence of factual allegations as to how the fraud alleged by petitioner was committed' $s correctly held by respondent Court of $ppeals such fraudulent intent not to honor the admitted obligation cannot be inferred from the debtor@s inability to pay or to comply with the obligations' [". 1n the other hand as stressed above fraud may be gleaned from a preconceived plan or intention not to pay' 2his does not appear to be so in the case at bar' 8n fact it is alleged by private respondents that out of the total P4!" -!+'"- covered by the subDect trust receipts the amount of P499 999'99 had already been paid leaving only P!" -!+'"- as balance' >ence regardless of the arguments regarding penalty and interest it can hardly be said that private respondents harbored a preconceived plan or intention not to pay petitioner'

2he Court of $ppeals was correct therefore in its finding in C$%&'(' )P *o' +2,-+ that neither petitioner@s Motion or its supporting $ffidavit provides sufficient basis for the issuance of the writ of attachment prayed for' Ae also agree with respondent Court of $ppeals in C$%&'(' )P *o' +20-2 that the lower court should have conducted a hearing and re<uired private petitioner to substantiate its allegations of fraud embe==lement and misappropriation' 2o reiterate petitioner@s Motion for $ttachment fails to meet the standard set forth in %.&. Lub 'il (ar)etin* Center, Inc. v. +icolas [!9. in applications for attachment' 8n the said case this Court cautioned %% 2he petitioner@s prayer for a writ of preliminary attachment hinges on the allegations in paragraph !- of the complaint and paragraph 4 of the affidavit of #aniel Pe which are couched in general terms devoid of particulars of time persons and places to support such a serious assertion that :defendants are disposing of their properties in fraud of creditors'; 2here is thus the necessity of giving to the private respondents an opportunity to ventilate their side in a hearing in accordance with due process in order to determine the truthfulness of the allegations' But no hearing was afforded to the private respondents the writ having been issued e, parte' $ writ of attachment can only be granted on concrete and specific grounds and not on general averments merely <uoting the words of the rules' $s was frowned upon in %.&. Lub 'il (ar)etin* Center, Inc. [!!. not only was petitioner@s application defective for having merely given general averments; what is worse there was no hearing to afford private respondents an opportunity to ventilate their side in accordance with due process in order to determine the truthfulness of the allegations of petitioner' $s already mentioned private respondents claimed that substantial payments were made on the proceeds of the trust receipts sued upon' 2hey also refuted the allegations of fraud embe==lement and misappropriation by averring that private respondent 4ilipinas 2e5tile Mills could not have done these as it had ceased its operations starting in Gune of !",4 due to workers@ strike' 2hese are matters which should have been addressed in a preliminary hearing to guide the lower court to a Dudicious e5ercise of its discretion regarding the attachment prayed for' 1n this score respondent Court of $ppeals was correct in setting aside the issued writ of preliminary attachment' 2ime and again we have held that the rules on the issuance of a writ of attachment must be construed strictly against the applicants' 2his stringency is re<uired because the remedy of attachment is harsh e5traordinary and summary in nature' 8f all the re<uisites for the granting of the writ are not present then the court which issues it acts in e5cess of its Durisdiction'[!2. ;HEREF RE for the foregoing reasons the instant petitions are #E*8E#' 2he decision of the Court of $ppeals in C$%&'(' )P *o' +2,-+ and C$%&'(' )P *o' +20-2 are $448(ME#' *o pronouncement as to costs' % R(ERE(.

-parte hearing the lower court issued an 1rder for the issuance of a writ of preliminary attachment conditioned upon the filing of a P0 999 999'99 attachment bond' Petitioners moved for the lifting of the writ of preliminary attachment on the following groundsF 6!7 the attachment was heard issued and implemented even before service of summons upon them. vs. petitioners. respondents. J.! N%$R#!$I N GR #P. < %E !. 8t however reduced and confined the attachment to receivables due petitioners from the 2andang )ora commonwealth 4lyover proDect' )ubse<uently petitioners filed a Motion for (econsideration [2. a&' FRAN!I% !. $HE ! #R$ F APPEAL%.*G. 123358. -#.!""4' [/. "e0ro "a&14a.R. "a=a01 !10y. February 1. $HE H N. (E LA RA"A. N!<R. Re81o&a4 $r1a4 !our0.!""+ following an e.. Pre21'1&8 <u'8e. and 6+7 that there was no fraud in incurring the obligation' $s an alternative prayer in their Motion petitioners prayed that the attachment be limited to their receivables with the #epartment of Public Aorks and >ighways' 2his alternative prayer was later withdrawn by petitioners in a Manifestation and Motion' 1n May 2/ !""4 the lower court issued another 1rder denying petitionersJ Motion to Hift $ttachment'[!. 2000] F!. petitioners filed a Petition for Certiorari before the Court of $ppeals on )eptember !. IN!. as well as an 1mnibus Motion for Heave to file $mended $nswer andCor to delete 4rancis C' Iu as party% defendant'[+. 2he ./ 1n Gune 2" !""+ private respondent Hey Construction and #evelopment Corporation filed a Complaint for collection of a sum of money with application for preliminary attachment against petitioner 4CI Construction &roup 8nc' and 4rancis C' Iu with the Makati (egional 2rial Court which was docketed as Civil Case *o' "+%2!!2' Private respondent alleged that it had a Doint venture agreement with petitioner 4CI Construction &roup 8nc' 6wherein petitioner 4rancis C' Iu served as President7 over the 2andang )ora Commonwealth 4lyover government proDect for which it had provided funds and construction materials' 2he Complaint was filed in order to compel petitioners to pay its half share in the collections received in the proDect as well as those yet to be received therein' 8n support of its application for a writ of attachment private respondent alleged that petitioners were guilty of fraud in incurring the obligation and had fraudulently misapplied or converted the money paid them to which it had an e<ual share' 1n Guly . a&' LE! N%$R#!$I N AN( (E)EL P"EN$ ! RP RA$I N. (E!I%I N -NARE%>%AN$IAG . Bra&56 13+. Aith the denial of both Motions by the lower court on )eptember 4 !""4 [4. No. 627 failure of the attaching officer to serve a copy of the affidavit of merit upon them.

Petition was however denied on Guly +! !""/. p. 12-137 555 555 555 M Ahat about these officials of the #epartment of Public >ighways what would they do to proDect their sub alleged proDectL $ M $ M )ecretary de Gesus is no longer connected there your >onor' $t the timeL $t that time he resigned' Before he resigned' $ >e gave me assurance that they will soon give assurance they will soon give me another proDect ' ' ' (. [-. 44$[.. >ence the instant Petition' 8t is evident that the <uestioned writ of attachment was anchored upon Section 1(d). to wit % K)EC281* !' &rounds upon which attachment may issue' % $ 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 Dudgment that may be recovered in the following casesF 555 555 5 5 5' 6d7 8n 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. 555 555 5 5 5'K 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' 8n support of their stand petitioners alleged that private respondentJs principal witness admitted that it was the #epartment of Public Aorks and >ighways 6#PA>7 that induced it to deliver materials and cash for the 2andang )ora Commonwealth 4lyover proDect to wit % C1B(2F *ow ' ' ' as of Ganuary / !""+ you delivered to him 6referring to defendant 4CI corporation7 in cash and in kind amounting to 4ifteen Million Pesos 6P!/ 999 999'997 now why did you keep on delivering cash and materials to him if you were not paid a single centavoL $ Because of every need for the proDect and the Public Aorks official assured me that 8 will be given a new proDect after the 2andang )ora will be finished' M Aho is this public official that promised youL $ #irector Pendosa 2eodoro Encarnacion and )ecretary de Gesus your >onor' (. # /uly 00! pp."+. . # /uly 00!. so was petitionersJ Motion for (econsideration'[0."+. Rule 57 of the Revised Rules of Court.

supr . 8t is not denied that no payment of profits has been given to private respondent which is precisely what it is suing for' 4inally 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 petitionersJ efforts to have the writ of preliminary attachment dissolved on the ground that it was improperly or irregularly issued is in vain' 8ndeed in Liberty Insur nce Corpor tion. Rule 57 cautioned as follows -!ppe ls. and had petitioner 4rancis Iu sign it must fail' 2he written agreement referred to was signed by petitioner 4rancis Iu only on Ganuary / !""+ long after the proDect had commenced' 2hus 8t was only a written confirmation of an arrangement that had already been e5isting and operational' )imilarly then such written confirmation did not occur at the inception of the obligation sued upon' 8n Liberty Insur nce Corpor tion vs. Court of discussing Section 1(d). this Court 2o 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' 2he fraud must relate to the e5ecution of the agreement and must have been the reason which induced the other party into giving consent which he would not have otherwise given' 2o constitute a ground for attachment in )ection ! 6d7 (ule /0 of the (ules of Court fraud should be committed upon contracting the obligation sued upon' $ 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' 4raud 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.$ cursory reading of the above%cited testimony however readily shows that said reassurance from the #PA> officials came not at the inception of the obligation or contract but during its performance' 1n the other hand the fraud of which petitioners are accused of and which was the basis for the issuance of the <uestioned attachment is fraud alleged to have been committed upon contracting the obligation sued upon' 2hus petitioners@ argument that Kthe inducement was the mouth%watering temptation of a #PA> promise of a Jnew proDect after the 2andang )ora 4lyover proDect will be finishedKJ is clearly off%tangent as such inducement if any came not at the inception of the obligation' )imilarly petitionersJ arguments that it was private respondent who admittedly prepared the letter embodying the alleged Doint venture agreement [". which cited "ind n o S vin#s nd Lo n !ssoc. ! "CRA #!!7' 4rom the foregoing therefore the alleged inducement by the #PA> officials upon private respondent as well as the circumstances surrounding the e5ecution of the Doint 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' 2he fact that petitioners have paid a substantial amount of money to private respondent cannot save the day for them either' $s per their own accounting such payments were for accounts payable for labor supplied construction materials and cash advances' [!!. vs. Court of !ppe ls (17$ SCR! %&') we ruled % K5 5 5 when the preliminary attachment is issued upon a ground which is at the same time the applicantJs cause of actionF e'g' 5 5 5 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 )ection !+ of (ule /0 by offering to show the falsity of the factual averments in the plaintiff@s application and affidavits on which the writ was based and conse<uently that the writ based therein had been improperly or irregularly issued % the reason being that the hearing on such motion for dissolution . [!9.

Court of !ppe ls. >owever while we agree that petitioner 4rancis Iu 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 e5ists instances when corporate officers may be held personally liable for corporate acts' )uch e5ceptions were outlined in (r ) t "erc ntile. Inc. or 4' >e is made by a specific provision of law to personally answer for his corporate action'K 2he attendance of these circumstances however cannot be determined at this stage and should properly be threshed out during the trial on the merits' )tated differently whether or not petitioner 4rancis Iu should be held personally and solidarily liable with petitioner corporation is a matter that should be left to the trial courtJs discretion dependent as it is on evidence during trial' .HEREF RE in view of the foregoing the instant Petition is hereby #8)M8))E#' *o pronouncement as to costs' % R(ERE(. . +' >e agrees to hold himself personally and solidarily liable with the corporation. 2' >e consents to the issuance of watered down stocks or who having knowledge thereof does not forthwith file with the corporate secretary his written obDection thereto.of the writ would be tantamount to a trial on the merits' 8n other words the merits of the action would be ventilated at a mere hearing of a motion. vs. as follows %% KPersonal liability of a corporate director trustee or officer along 6although not necessarily7 with the corporation may so validly attach as a rule only when % !' >e assents 6a7 to a patently unlawful act of the corporation or 6b7 for bad faith or gross negligence in directing its affairs or 6c7 for conflict of interest resulting in damages to the corporation its stockholders or other persons. [!+. instead of the regular trial' 2herefore when the writ of attachment is of this nature the only way it can be dissolved is by a counterbond'K Ae now come to the issue of whether or not petitioner 4rancis Iu should remain as party%defendant' Petitioners argue that since the transactions were corporation to corporation only petitioner 4rancis Iu should be dropped as party%defendant considering the hornbook law that corporate personality is a shield against personal liability of its officers' Ae agree that petitioner 4rancis Iu 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' [!2.

parte application for attachment the E5ecutive Gudge of the Court of 4irst 8nstance of Cebu issued on May !4 !".+ of respondent Gudge (amon $m' 2orres of the (egional 2rial Court Branch .AN a&' ELENA %.2 an order directing the issuance of the . a2 Pre21'1&8 <u'8e o3 Bra&56 6. and 6+7 the unpaid installments of the e<uipment provided by respondent $boiti= to petitioners 6Rollo p' +07'chanroblesvirtualawlibrary chanrobles virtual law library $cting on the e.which granted the motion for the issuance of writs of preliminary attachment for the sei=ure of the property of petitioners by respondent Provincial )heriffs.R. AB I$I@ A ! "PAN-.!".. &etitioners vs' Ho&. Respondents' B#IA% N.AN. (A)A ./ and the 1rder dated )eptember 2. No2. A(LA.58 <u4y 5.-' 8 8n a complaint dated $pril 24 !".G. Re29e501:e4y. A(LA. 627 technical and managerial services rendered.2 filed with the Court of 4irst 8nstance of Cebu now (egional 2rial Court 6Civil Case *o' (%2!0-!7 respondent $boiti= and Company 8nc' 6$boiti=7 sought to collect from petitioners a sum of money representing payments forF 6!7 the unpaid amorti=ations of a loan. 65+57. IN!.+ of Gudge Emilio $' Gacinto of Branch 2+ of the same court in Civil Case *o' CEB%!!.Cebu City in Civil Case *o' CEB% !!. No.* chanrobles virtual law library 2his is a petitioner for certiorari and mandamus with preliminary inDunction or restraining order to nullifyF 6!7 the 1rder dated )eptember !4 !"./ and Civil Case *o' CEB%!!. J. RI@AL a&' "E$R "ANILA. a&' $HE PR )IN!IAL %HERIFF% F !EB#. 1++? ELEA@AR ). and 627 the 1rder dated #ecember !2 !". Re81o&a4 $r1a4 !our0 !ebu !10y.+ of respondent Gudge (amon $m' 2orres in the consolidated cases Civil Case *o' CEB% !!. $ RRE%. <u'8e RA" N A".

ordered the sei=ure and delivery of the property described in the complaint' )aid property were later delivered by the provincial sheriff to respondent $boiti=' $lleging that while his office was situated in Cebu City $dlawan was a resident of Minglanilla and therefore the Hapu%lapu City court should not entertain the action for replevin' Petitioner Elea=ar $dlawan filed an omnibus motion praying for the reconsideration and dissolution of the writ of sei=ure the retrieval of the property sei=ed and the dismissal of the complaint' >e also averred that the property sei=ed were in custodia le*is by virtue of the writ of attachment issued by Branch !!' >is omnibus motion was denied' )ubse<uently he filed a motion for reconsideration which was not granted'chanroblesvirtualawlibrary chanrobles virtual law library 2he denial of his omnibus motion led petitioner Elea=ar $dlawan to file a petition for certiorari and mandamus in the )upreme Court 6&'(' *o' -+22/7' 2he 2hird #ivision of this Court ruled on $pril + !""9 that since attachment is an ancillary remedy the withdrawal of the complaint left it with no leg to stand on' 2hus the Court disposed of the case as followsF A>E(E41(E in view of the foregoing this Court rules that the attached properties left in the custody of private respondent $boiti= and Company 8nc' be returned to petitioner Elea=ar 3' $dlawan without preDudice to the outcome of the cases filed by both parties 6Rollo p' +247' (espondent $boiti= filed a motion for reconsideration of the decision contending that the replevin case was distinct and separate from the case where the writ of attachment . parte motion praying for the stay of the Guly !".writ of preliminary attachment against the property of petitioners upon the filing by respondent $boiti= of an attachment bond'chanroblesvirtualawlibrary chanrobles virtual law library )ubse<uently the case was raffled to Branch !! of the Court of 4irst 8nstance of Cebu which issued a writ of attachment addressed to the Provincial )heriffs of Cebu and the City )heriff of #avao City' 8t was the )heriff of #avao City who enforced the writ of attachment resulting in the sei=ure of heavy construction e<uipment motor vehicle spare parts and other personal property with the aggregate value of P!/ 999 999'99' 2he said court also granted the motion of respondent $boiti= to take possession and custody of the attached property of petitioners and ordered the Provincial )heriff of #avao to deliver the property to respondent $boiti='chanroblesvirtualawlibrary chanrobles virtual law library Petitioners moved for a bill of particulars and to set aside the e. and considering all pending incidents in the case as moot and academic'chanroblesvirtualawlibrary chanrobles virtual law library Petitioner Elea=ar $dlawan filed a motion praying that the Guly .of the Court of 4irst 8nstance of Cebu in Hapu%lapu City of an action for delivery of personal property 6Civil Case *o' -!"%H7 and the filing by petitioner Elea=ar $dlawan before Branch !9 of the same court of an action for damages in connection with the sei=ure of his property under the writ of attachment'chanroblesvirtualawlibrary chanrobles virtual law library 8n the replevin suit Branch !. parte writ of attachment' 4inding merit in the motion to set aside the writ Branch !! ordered on Guly .2 the lifting of the writ and conse<uently the discharge of the property levied upon'chanroblesvirtualawlibrary chanrobles virtual law library (espondent $boiti= filed an urgent e.2 1rder for a period of !/ days for it to be able to appeal the order' 2he motion was favorably acted upon'chanroblesvirtualawlibrary chanrobles virtual law library >owever on Guly !+ !".!".2 1rder be implemented and enforced' 1n #ecember 29 however Branch !! denied the motion on account of the filing by respondent $boiti= before Branch !.!".2 respondent $boiti= filed a notice of dismissal of its complaint in accordance with )ection ! (ule !0 of the (evised (ules of Court' Conse<uently Branch !! issued an order confirming the notice of dismissal emphasi=ing that all orders of the court issued prior to the filing of said notice of dismissal had been rendered functus oficio.

../ alleged that petitioner Elea=ar $dlawan 6defendant therein7 was awarded a contract for the construction of the 2ago #iversion Aorks for the 2ago (iver 8rrigation ProDect by the *ational 8rrigation $dministration and that respondent $boiti= 6plaintiff therein7 loaned him money and e<uipment which indebtedness as of Gune +9 !".+ respondent Gudge ordered the issuance of a writ of attachment upon respondent $boiti=J filing of a bond of P/ 999 999'99' )imilarly in Civil Case *o' CEB%!!.' Paragraph !/ of the complaint is similarly worded as paragraph !of the complaint in Civil Case *o' CEB% !!.was issued' 8t argued that the writ of replevin therefore remained in force as the 2hird #ivision of the )upreme Court had not found it illegal' 2he motion was however denied with finality in the (esolution of Guly !! !""9'chanroblesvirtualawlibrary chanrobles virtual law library Bndaunted respondent $boiti= filed a second motion for reconsideration with a prayer that the dispositive portion of the decision be clarified' 8t asserted that because the writ of preliminary attachment was different from the writ of replevin we should rule that the property subDect of the latter writ should remain in custodia le*is of the court issuing the said writ'chanroblesvirtualawlibrarychanrobles virtual law library 8n the (esolution dated )eptember !9 !""9 the 2hird #ivision stated that Kthe properties to be returned to petitioner are only those held by private respondent 6$boiti=7 by virtue of the writ of attachment which has been declared non%e5istent'K $ccordingly the dispositive portion of the $pril + !""9 decision of the 2hird #ivision of this Court was modified to read as followsF A>E(E41(E in view of the foregoing this Court rules that the properties in the custody of the private respondent $boiti= N Company by virtue of the writ of attachment issued in Civil Case *o' (%2!0-! be returned to the petitioner but properties in the custody of the private respondent by virtue of the writ of replevin issued in Civil Case *o' -!"%H be continued in custodia le*is of said court pending litigation therein' 2he #ecision in &'(' *o' -+22/ having become final and e5ecutory entry of Dudgment was made on *ovember !/ !""9' 2his should have terminated the controversy between petitioners and respondent $boiti= insofar as the )upreme Court was concerned but that was not to be' 1n )eptember " !"./ and CEB%!!./'chanroblesvirtualawlibrary chanrobles virtual law library Civil Case *o' CEB%!!.+ totalled P/ +09 -02'9.which was raffled to Branch 2+ presiding Gudge Emilio $' Gacinto ordered the issuance of a writ of attachment upon the filing of a bond of P2 /99 999'99' $ccordingly in Civil Case *o' CEB%!!.-' 2he complaint in Civil Case *o' CEB%!!.!".of the complaint statesF !-' 2hat in view of the enormous liabilities which the defendants have with the plaintiff defendants e5ecuted a real estate mortgage covering eleven 6!!7 parcels of land in favor of Philippine Commercial and 8ndustrial Bank 6PC8B7 to secure a P! 999 999'99 loan with said bank and was able to remove conceal and dispose of their properties obviously to defraud the plaintiff ' ' ' 6Rollo pp' -/%--7' 2he complaint in Civil Case *o' CEB%!!.+ totaled P!+ 4+9 2/"'!4' Paragraph !.presided by respondent Gudge (amon $m' 2orres' 1n )eptember !4 !"./ the $cting Provincial )heriff of Cebu issued separate writs dated )eptember 2.+ respondent $boiti= filed against petitioners two complaints for collection of sums of money with prayers for the issuance of writs of attachment in the (egional 2rail Court Branch 2+ Cebu City docketed as Civil Cases *os' CEB%!!.-'chanroblesvirtualawlibrary chanrobles virtual law library .alleged that petitioner Elea=ar $dlawan 6defendant therein7 was awarded a contract for the construction of the Hasang (iver 8rrigation ProDect by the *ational 8rrigation $dministration and that respondent $boiti= 6plaintiff therein7 loaned him money and e<uipment which indebtedness as of Gune +9 !"./ was raffled to the (egional 2rial Court Branch .+ addressed to the )heriffs of Cebu #avao and Metro Manila' *o writ of preliminary attachment was however issued in Civil Case *o' CEB%!!.

/ and CEB%!!.of Civil Case *o' CEB%!!..+ respondent Gudge issued an order finding no merit in petitionersJ motion for reconsideration and directing the sheriffs of Cebu #avao and Metro Manila Kto proceed with the enforcement and implementation of the writs of preliminary attachment'K (espondent Gudge ruled that the writs of attachment were issued on the basis of the supporting affidavits alleging that petitioner had removed or disposed of their property with intent to defraud respondent $boiti= 6 Rollo pp' !9"% !!+7'chanroblesvirtualawlibrary chanrobles virtual law library 1n #ecember !/ petitioners filed an e. 627 that they be given !/ days within which to either file a motion for reconsideration or elevate the matter to this Court or the then 8ntermediate $ppellate Court.urgent motions to hold in abeyance the enforcement of the writs of attachments' 2hey alleged in the main that since their property had been previously attached and said attachment was being <uestioned before the )upreme Court in &'(' *o' -+22/ the filing of the two cases as well as the issuance of the writs of attachment constituted undue interference with the processes of this court in the then pending petition involving the same property'chanroblesvirtualawlibrary chanrobles virtual law library Bpon motion of respondent $boiti= Branch 2+ issued on 1ctober !+ !".for consolidation with Civil Case *o' CEB%!!.+ 1rder be set for hearing..+ an order directing the transfer to Branch . parte motion prayingF 6!7 that the #ecember !2 !". and 6+7 that within the same !/%day period the implementation or enforcement of the writs of attachment be held in abeyance'chanroblesvirtualawlibrary chanrobles virtual law library 1n the same day respondent Gudge issued an order holding in abeyance the enforcement of the writs of preliminary attachment in order to afford petitioners an opportunity to seek their other remedies 6 Rollo p' !!-7'chanroblesvirtualawlibrary chanrobles virtual law library 1n #ecember 20 petitioners filed the instant petition for certiorari and mandamus' 2hey alleged that respondent Gudge gravely abused his discretion in ordering the issuance of the writs of preliminary attachment inasmuch as the real estate mortgage e5ecuted by them in favor of PC8B did not constitute fraudulent removal concealment or disposition of property' 2hey argued that granting the mortgage constituted removal or disposition of property it was not per se a ground for attachment lacking proof of intent to defraud the creditors of the defendant'chanroblesvirtualawlibrary chanrobles virtual law library Petitioners contended that in Civil Case *o' 2!0-! Branch !! had ruled that the loan for which the mortgage was e5ecuted was contracted in good faith as it was necessary for them to continue their business operations even after respondent $boiti= had stopped giving them financial aid'chanroblesvirtualawlibrary chanrobles virtual law library .Petitioners then filed in Civil Cases *os' CEB%!!./'chanroblesvirtualawlibrary chanrobles virtual law library Meanwhile in its comment on petitionersJ motion to withhold the enforcement of the writs of attachment respondent $boiti= alleged that the voluntary dismissal of Civil Case *o' (%2!0-! under )ection ! (ule !0 of the (evised (ules of Court was without preDudice to the institution of another action based on the same subDect matter' 8t averred that the issuance of the writ of attachment was Dustified because petitioners were intending to defraud respondent $boiti= by mortgaging !! parcels of land to the Philippine Commercial and 8ndustrial Bank 6PC8B7 in consideration of the loan of P! !99 999'99 thereby making PC8B a preferred creditor to the preDudice of respondent $boiti= which had an e5posure amounting to P!+ 4+9 2/"'!4'chanroblesvirtualawlibrary chanrobles virtual law library Petitioners then filed a reDoinder to said comment contending that since the property subDect of the writ of attachment have earlier been attached or replevied the same property were under custodia le*is and therefore could not be the subDect of other writs of attachment'chanroblesvirtualawlibrary chanrobles virtual law library 1n #ecember !2 !".

(acadae* " )C($ //2 6!"-+7 to Dustify a preliminary attachment the removal or disposal must have been made with intent to defraud defendantJs creditors' Proof of fraud is mandated by paragraphs 6d7 and 6e7 of )ection ! (ule /0 of the (evised (ules of Court on the grounds upon which attachment may issue' 2hus the factual basis on defendantJs intent to defraud must be clearly alleged in the affidavit in support of the prayer for the writ of attachment if not so specifically alleged in the verified complaint' 2he affidavit submitted by respondent $boiti= statesF (EPBBH8C 14 2>E P>8H8PP8*E) C82I 14 CEBB '''''''''''''''7 )')'chanroblesvirtualawlibrary chanrobles virtual law library 8 (1M$* )' (1*MB8HH1 of legal age married and a resident of Cebu City after being sworn in accordance with law hereby depose and sayF chanrobles virtual law library 2hat 8 am the 3ice%President of the plaintiff corporation in the above%entitled case./ and !!. chanrobles virtual law library 2hat the total amount due to the plaintiff in the above%entitled case is P!+ 4+9 2/"'!4 e5cluding interests and claim for damages and is as much the sum for which an order of attachment is herein sought to be granted.+ and issued in Civil Cases *os' CEB !!. chanrobles virtual law library 2hat there is no sufficient security for the claims sought to be enforced by the present action.Petitioners also contended that respondent Gudge e5ceeded his Durisdiction when he issued the 1rder of #ecember !2 !". above all legal counter%claims on the part of the defendants'chanroblesvirtualawlibrary chanrobles virtual law library . chanrobles virtual law library 2hat a sufficient cause of action e5ists against the defendants named therein because the said defendants are indebted to the plaintiffs in the amount of P!+ 4+9 2/"'!4 e5clusive of interests thereon and damages claimed.!".-K 6Rollo p' !!. chanrobles virtual law library 2hat this action is one of those specifically mentioned in )ection ! (ule /0 of the (ules of Court whereby a writ preliminary attachment may lawfully issue because the action therein is one against parties who have removed or disposed of their properties with intent to defraud their creditor plaintiff herein.4 KenDoining the respondents from enforcing or implementing the writs of preliminary attachment against the property of petitioners all dated )eptember 2. chanrobles virtual law library 2hat the defendants have removed or disposed of their properties with intent to defraud the plaintiff their creditor because on May 20 !".+ without first hearing the parties on the motion for attachment and the motion to dissolve the attachment' Moreover they argued that respondent Gudge gravely abused his discretion in proceeding with the case notwithstanding that his attention had been called with regard to the pendency of &'(' *o' -+22/ in this Court'chanroblesvirtualawlibrary chanrobles virtual law library $s prayed for by petitioners we issued a temporary restraining order on Ganuary !".7' 88 2he resolution of this case centers on the issue of the legality of the writ of attachment issued by respondent Gudge in the consolidated cases for collection of sums of money'chanroblesvirtualawlibrary chanrobles virtual law library 2he affidavit submitted by respondent $boiti= in support of its prayer for the writ of attachment does not meet the re<uirements of (ule /0 of the (evised (ules of Court regarding the allegations on impending fraudulent removal concealment and disposition of defendantJs property' $s held in Carpio v.2 they e5ecuted a real estate mortgage in favor of Philippine Commercial and 8ndustrial Bank 6PC8B7 covering eleven 6!!7 of their fifteen 6!/7 parcels of land in Cebu to secure a P! 999 999'99 loan with the same bank.

+ at Cebu City Philippines' 6)gd'7 ($M1* $ffiant !027 8t is evident from said affidavit that the prayer for attachment rests on the mortgage by petitioners of !! parcels of land in Cebu which encumbrance respondent $boiti= considered as fraudulent concealment of property to its preDudice' Ae find however that there is no factual allegation which may constitute as a valid basis for the contention that the mortgage was in fraud of respondent $boiti=' $s this Court said in /ardine-(anila 5inance.... !0! )C($ -+.6!". v..he general rule is that the affidavit is the foundation of the writ and if none be filed or one be filed which wholly fails to set out some facts re<uired by law to be stated therein there is no Durisdiction and the proceedings are null and void'K chanrobles virtual law library Bare allegation that an encumbrance of a property is in fraud of the creditor does not suffice' 4actual bases for such conclusion must be clearly averred'chanroblesvirtualawlibrary chanrobles virtual law library 2he e5ecution of a mortgage in favor of another creditor is not conceived by the (ules as one of the means of fraudulently disposing of oneJs property' By mortgaging a piece of property a debtor merely subDects it to a lien but ownership thereof is not parted with'chanroblesvirtualawlibrary chanrobles virtual law library 4urthermore the inability to pay oneJs creditors is not necessarily synonymous with fraudulent intent not to honor an obligation 68nsular Bank of $sia N $merica 8nc' v' Court of $ppeals !"9 )C($ -2" [!""9.8* 38EA A>E(E14 8 hereunto set my hand this 24th day of $ugust !". Inc.7'chanroblesvirtualawlibrary chanrobles virtual law library Ae need not discuss the issue of whether or not Civil Cases *os' CEB%!!./ and CEB% !!.7'chanroblesvirtualawlibrary chanrobles virtual law library Conse<uently when petitioners filed a motion for the reconsideration of the order directing the issuance of the writ of attachment respondent Gudge should have considered it as a motion for the discharge of the attachment and should have conducted a hearing or re<uired submission of counter%affidavits from the petitioners if only to gather facts in support of the allegation of fraud 6Gopillo Gr' v' Court of $ppeals !-0 )C($ 240 [!"."7 K[2.7'chanroblesvirtualawlibrary chanrobles virtual law library 2he Dudge before whom the application is made e5ercises full discretion in considering the supporting evidence proffered by the applicant' 1ne overriding consideration is that a writ of attachment is substantially a writ of e5ecution e5cept that it emanates at the beginning instead of at the termination of the suit 6)antos v' $<uino Gr' 29/ )C($ !20 [!""2. Court of Appeals.7' 2his is what )ection !+ of (ule /0 mandates'chanroblesvirtualawlibrary chanrobles virtual law library 2his procedure should be followed because as the Court has time and again said attachment is a harsh e5traordinary and summary remedy and the rules governing its issuance must be construed strictly against the applicant' 3erily a writ of attachment can only be granted on concrete and specific grounds and not on general averments <uoting perfunctorily the words of the (ules 6#'P' Hub 1il Marketing Center 8nc' v' *icolas !"! )C($ 42+ [!""9.constituted undue interference with the proceedings in &'(' *o' -+22/ in view of the entry of Dudgment in the latter case'chanroblesvirtualawlibrary chanrobles virtual law library )' (1*MB8HH1 6Rollo pp' !0!% . 2ay Chun )uy v' Court of $ppeals 2!2 )C($ 0!+ [!""2.

. &etitioner vs' ! #R$ F APPEAL%.%44+4-' Petitioner had not previously received any summons and any copy of a complaint against him in Civil Case *o' . May !". <#(GE AR$E" N (.!".A>E(E41(E the petition is &($*2E# and the 2emporary (estraining 1rder issued on Ganuary .. 8?03? (e5e7ber 22. H N. petitioner $lberto )ievert a citi=en and resident of the Philippines received by mail a Petition for 8ssuance of a Preliminary $ttachment filed with the (egional 2rial Court of Manila Branch +2 in Civil Case *o' . No..R.%44+4-'chanroblesvirtualawlibrary chanrobles virtual law library 1n the day set for hearing of the Petition for a Preliminary Arit of $ttachment petitionerJs counsel went before the trial court and entered a special appearance for the limited purpose of obDecting to the Durisdiction of the court' >e simultaneously filed a written obDection to the Durisdiction of the trial court to hear or act upon the Petition for 8ssuance of a Preliminary Arit of $ttachment' 8n this written obDection petitioner prayed for denial of that Petition for lack of Durisdiction over the person of the petitioner 6defendant therein7 upon the ground that since no summons had been served upon him in the main case no Durisdiction over the person of the petitioner had been ac<uired by the trial court'chanroblesvirtualawlibrary chanrobles virtual law library 2he trial court denied the petitionerJs obDection and issued in open court an order which in relevant part read as followsF Bnder )ection ! (ule /0 (ules of Court it is clear that a plaintiff or any proper party may K''' at the commencement of the action or at any time thereafter have the property of the adverse party attached as the security for the satisfaction of any Dudgment '''K .with deliberate dispatch' % R(ERE(. Respondents' FELI!IAN ./ and CEB%!!.4 is made PE(M$*E*2' (espondent Gudge or whoever is the presiding Dudge of the (egional 2rial Court Branch ./ 1n !. 1+88 ALBER$ %IE)ER$..Cebu City is #8(EC2E# to P(1CEE# with the resolution of Civil Cases *os' CEB%!!. G. L#NA a&' A#RELI !A"P %AN . <.

the respondent appellate court rendered a decision notable principally for its brevity dismissing the Petition' 2he relevant portion of the Court of $ppealsJ decision is <uoted belowF 2he grounds raised in this petition state that the court a 6uo had not ac<uired Durisdiction over defendant 6now petitioner7 since no summons had been served on him and that respondent Gudge had committed a grave abuse of discretion in issuing the <uestioned order without Durisdiction'chanroblesvirtualawlibrary chanrobles virtual law library 8n short the issue presented to us is whether respondent /ud*e may issue a writ of preliminary attachment a*ainst petitioner before summons is served on the latter. Ae rule for respondent Gudge'chanroblesvirtualawlibrary chanrobles virtual law library Bnder )ec' ! (ule /0 it is clear that at the commencement of the action a party may have the property of the adverse party attached as security' 2he resolution of this issue depends therefore on what is meant by KCommencement of the action'K Moran citing $merican Durisprudence on this point stated thusF KCommencement of action' % $ction is commenced by filing of the complaint even though summons is not issued until a later date'K 6Comment on the (ules of Court 3ol' 8 p' !/9 !"0"7' 2hus a writ of preliminary attachment may issue upon filin* of the complaint even before issuance of the summons'chanroblesvirtualawlibrary chanrobles virtual law library A>E(E41(E for lack of merit the petition is hereby denied and accordingly dismissed' 6Emphasis supplied7 2 chanrobles virtual law library 2he petitioner is now before this Court on a Petition for (eview on Certiorari assailing the above%<uoted decision of the Court of $ppeals' 2he petitioner assigns two 627 errorsF !' 2he proceedings taken and the order issued on plaintiffs petition for attachment prior to the service of summons on the defendant were contrary to law and Durisprudence and violated the defendantJs right to due process'chanroblesvirtualawlibrary chanrobles virtual law library 2' 2he Court of $ppeals committed a grave abuse of discretion amounting to lack of Durisdiction in ruling that a writ of preliminary attachment may issue upon filing of the complaint even prior to issuance of the summons' 3 chanrobles virtual law library 2he two 627 assignments of error relate to the single issue which we perceive to be at stake here that is whether a court which has not ac<uired Durisdiction over the person of the defendant in the main case may bind such defendant or his property by issuing a writ of preliminary attachment'chanroblesvirtualawlibrary chanrobles virtual law library Both the trial court and the Court of $ppeals held that the defendant may be bound by a writ of preliminary attachment even before summons together with a copy of the complaint in the main case has been validly served upon him'chanroblesvirtualawlibrary chanrobles virtual law library Ae are unable to agree with courts'chanroblesvirtualawlibrary chanrobles virtual law library the respondent 2here is no <uestion that a writ of preliminary attachment may be applied for a plaintiff Kat the commencement of the action or at any time thereafterK in the cases enumerated ..2his rule would overrule the contention that this Court has no Durisdiction to act on the application although if counsel for defendant so desire she is given five 6/7 days from today within which to submit her further position why the writ should not be issued upon the receipt of which or e5piration of the period the pending incident shall be considered submitted for resolution' 6Bnderscoring in the original7 1 chanrobles virtual law library 2hereupon on the same day petitioner filed a Petition for certiorari with the Court of $ppeals' 1n !+ Guly !".

poses the debtor to humiliation and annoyance such [that. Adil 5 this Court described preliminary attachment as % a ri*orous remedy which e. otherwise the Dudge acts in e5cess of his Durisdiction and the writ so issued shall be null and void' 6Emphasis supplied 7 6 chanrobles virtual law library 2he above words apply with greater force in respect of that most fundamental of re<uisites the Durisdiction of the court issuing attachment over the person of the defendant'chanroblesvirtualawlibrary chanrobles virtual law library 8n the case at bar the want of Durisdiction of the trial court to proceed in the main case against the defendant is <uite clear' 8t is not disputed that neither service of summons with a copy of the complaint nor voluntary appearance of petitioner )ievert was had in this case' Iet the trial court proceeded to hear the petition for issuance of the writ' 2his is reversible error and must be corrected on certiorari'chanroblesvirtualawlibrary chanrobles virtual law library A>E(E41(E the Petition for (eview on certiorari is &($*2E# due course and the 1rder of the trial court dated 29 May !". therefore8 the duty of the court.. before issuin* the writ. it should not be abused as to cause unnecessary preDudice' It is. to ensure that all the re6uisites of the law have been complied with.in )ection ! of (ule /0 of the (evised (ules of Court' 2he issue posed in this case however is not to be resolved by determining when an action may be regarded as having been commenced a point in time which in any case is notnecessarily fi5ed and 8dentical regardless of the specific purpose for which the deter' nation is to be made' 2he critical time which must be 8dentified is rather when the trial court ac<uires authority under law to act coercively against the defendant or his property in a proceeding in attachment' Ae believe and so hold that critical time is the time of the vesting of Durisdiction in the court over the person of the defendant in the main case' $ttachment is an ancillary remedy' 8t is not sought for its own sake but rather to enable the attaching party to reali=e upon relief sought and e5pected to be granted in the main or principal action ' ? $ court which has not ac<uired Durisdiction over the person of defendant cannot bind that defendant whether in the main case or in any ancillary proceeding such as attachment proceedings' 2he service of a petition for preliminary attachment without the prior or simultaneous service of summons and a copy of the complaint in the main case % and that is what happened in this case % does not of course confer Durisdiction upon the issuing court over the person of the defendant' 1rdinarily the prayer in a petition for a writ of preliminary attachment is embodied or incorporated in the main complaint itself as one of the forms of relief sought in such complaint' 2hus valid service of summons and a copy of the complaint will in such case vest Durisdiction in the court over the defendant both for purposes of the main case and for purposes of the ancillary remedy of attachment' 8n such case notice of the main case is at the same time notice of the au5iliary proceeding in attachment' Ahere however the petition for a writ of preliminary attachment is embodied in a discrete pleading such petition must be served either simultaneously with service of summonsand a copy of the main complaint or after 7urisdiction over the defendant has already been ac6uired by such service of summons' *otice of the separate attachment petition is not notice of the main action' Put a little differently Durisdiction whether ratione personae or ratione materiae in an attachment proceeding is ancillary to Durisdiction ratione personae or ratione materiae in the main action against the defendant' 8f a court has no Durisdiction over the subDect matter or over the person of the defendant in the principal action it simply has no Durisdiction to issue a writ of preliminary attachment against the defendant or his property'chanroblesvirtualawlibrary chanrobles virtual law library 8t is basic that the re<uirements of the (ules of Court for issuance of preliminary attachment must be strictly and faithfully complied with in view of the nature of this provisional remedy' 8n "alas v. and the #ecision of the Court of $ppeals .

1+8+ <AR(INE. G.R. respondents' An*ara. IN!. Concepcion. (E LE N a&' . 55272 A9r14 10.. Re*ala 9 Cruz for petitioner. I"PA!$ ! RP RA$I N.dated !+ Guly !". Abello. No. are hereby )E2 $)8#E and $**BHHE#' *o pronouncement as to costs'chanroblesvirtualawlibrary chanrobles virtual law library % R(ERE(. RI!AR( E(#AR( (E LE N."ANILA FINAN!E. petitioner vs' ! #R$ F APPEAL%..

et al. Inc. etc.!"0" and 2/ O of the aforesaid amount as attorneyJs fees e5emplary damages and other e5penses of litigation' Hikewise contained in said complaint is petitionerJs application for a writ of preliminary attachment against private respondents' 2he allegations in support of said petition for a writ of preliminary attachment are <uoted in fullF )pecial $llegations for Preliminary $ttachment $' 2he foregoing allegations are hereby repleaded and made integral parts hereof' B' 2he defendant corporation at the time of the e5ecution of the aforesaid deeds of assignment had reservation not to remit to plaintiff the proceeds of the receivables assigned to plaintiff as confirmed by their refusal to remit the same to plaintiff although the issuers of the receivables assigned to plaintiff had already paid to defendant corporation their obligations on said receivables to the latter' C' #efendants (icardo de Heon and Eduardo de Heon who are likewise officers of defendant corporation in order to elicit plaintiffs approval to enter into said deeds of assignment with defendant corporation e5ecuted the aforesaid surety agreement 6$nne5 H7 likewise with reservation in their minds not to honor their obligations under the same as what they actually did when they refused to pay the obligations of defendant corporation to plaintiff pursuant to the provisions of said surety agreement' 6$nne5 H7 . v.J.. !"0" petitioner Gardine%Manila 4inance 8nc' 6G$(#8*E7 filed a complaint in the then Court of 4irst 8nstance 6C487 of (i=al docketed as Civil Case *o' +4-!0 against private respondents 8mpact Corporation 68MP$C27 (icardo de Heon and Eduardo de Heon to collect various sums of money allegedly due from therein defendant 8MP$C2 under a credit accomodation by way of a discounting line agreement' ? >erein private respondents (icardo de Heon and Eduardo de Heon were included as defendants by virtue of their undertaking covered by a )urety $greement under which they bound themselves Dointly and severally with defendant 8MP$C2 to pay herein petitioner all of 8MP$C2Js obligations under the aforesaid agreement' 5 8t was alleged that in $pril and May !"0" 8MP$C2 assigned its receivables to G$(#8*E on the condition that 8MP$C2 was to collect them on their due dates from their issuers and remit the collected amounts to G$(#8*E andCor repurchase the assigned receivables.* 2his is a petition for review on certiorari seeking to reverse and set asideF 6a7 the $ugust 2" !".K 2 and 6b7 the (esolution dated 1ctober 0 !". /r. .9 decision of the Court of $ppeals 1 in )pecial Proceedings C$%&'(' *o' )P% 9""02%( entitled KImpact Corporation. 6 but despite the fact that 8MP$C2 had collected the amounts due on said receivables it failed or refused to turn over the amounts so collected to G$(#8*E' G$(#8*E thus demanded payment of P ! 999 2!2'-4 the total amount due under said various deeds of assignment plus interest of P !. C. et al. et al.Ramon :uisumbin*. 9 Associates for private respondents.on. Impact Corporation.-!4'-4 as of )eptember .9 denying herein petitioners motion for reconsideration' 3 1n )eptember 2. FERNAN. v. <uenaventura Guerrero.K annulling the order and the writ of attachment issued by the Court of 4irst 8nstance of (i=al in Civil Case *o' +4-!0 entitled K /ardine-(anila 5inance.

that such fraud was further confirmed by the fact that defendants actually failed to remit the proceeds of the collection of receivables assigned by them. that there was no affidavit of merit to support the application for attachment as re<uired by )ection + of (ule /0 and that the verification of the complaint was defective as it did not state that the amount due to the plaintiff above all legal set%ups or counterclaims is as much as the sum for which the order is sought' + G$(#8*E opposed the motion arguing that the mental reservation of defendants at the time of the e5ecution of the deeds of assignment constituted fraud. &rovince of +ueva =ci7a or elsewhere' 6Emphasis supplied7 E' Plaintiffs action against defendant corporation is based upon documents and therefrom a sufficient cause of action e5ists' 4' Plaintiff is willing to post a bond in an amount to be fi5ed by the >onorable Court not e5ceeding plaintiffs claim which will be conditioned to the effect that plaintiff will pay all the costs which may be adDudged to the adverse party and all damages which they may sustain by reason of attachment if the >onorable Court should finally adDudge that the applicant plaintiff is not entitled thereto'7 1n the basis of the foregoing allegations the lower court granted G$(#8*EJs petition for the issuance of a writ of preliminary attachment on 1ctober !.!"0"' 8 1n 1ctober !" !"0" therein defendants filed a motion to set aside the writ of preliminary attachment' 2hey also submitted to the court a 6uo a memorandum in support of their motion to dissolve the attachment contending that the grounds alleged by the plaintiff in its application for a writ of attachment are not among the grounds specified under )ection ! of (ule /0. that the amounts collected by defendant corporation were received by defendants in trust for plaintiff and defendant corporation appropriated for itself said collection' 10 1n *ovember 0 !"0" the trial court denied defendantJs motion to annul the writ of preliminary attachment' 2hereupon defendant 8mpact Corporation went to the appellate court on a petition for certiorari seeking to annul said writ' 11 2he findings of the Court of $ppeals are as followsF 2o our mind there is no <uestion that the allegations of the complaint proper which were repleaded and made integral part of the application for preliminary attachment 6paragraph $7 made out a case of conversion or misappropriation of property held in trust which is the subDect of the complaint for the allegations stated that 8MP$C2 had assigned to G$(#8*E certain receivables with the understanding that it was to collect the same from the issuers of said receivables and deliver the amounts collected to G$(#8*E but in spite of the fact that 8MP$C2 had actually collected said amounts it failed to turn over said receivables to G$(#8*E' 2here was therefore in the allegations of said complaint true conversion of the amounts received by defendant in trust for plaintiff' #efendants in their motion to discharge the attachment and the memorandum filed by them in support of said motion had in effect admitted the conversion of the amounts collected by defendant 8MP$C2 but Dustified the use of said amounts to meet its operational e5penses to prevent a complete shutdown of its operations' . that defendants failed to disclose to the plaintiff the fact that they had already collected the receivables assigned by them. that the defendants have other sufficient security.#' #efendant corporation (icardo de Heon and Eduardo de Heon have no visible other sufficient security for the claim sought to be enforced by this action of plaintiff other than their real and personal properties which are located in (etro (anila and in the province of Rizal.

Ahile we find that the grounds alleged by plaintiff the herein private respondent to support its application for preliminary attachment are among those enumerated in )ection ! of (ule /0 as grounds upon which an attachment may be issued we are constrained nonetheless to rule against the regularity or legality of the attachment issued by respondent Court because there was no allegation made by plaintiff in its application for the issuance of a writ of attachment to the effect Jthat there is no sufficient security for the claim sought to be enforced by the action and the amount due to the applicant or the value of the property on the basis of which is entitled to recover is as much as the sum for which the order is granted above all legal counterclaims a re<uirement for the granting of an order of attachment under )ection + of (ule /0' 12 2hus on $ugust 2" !". and second%while it did not specifically state that the sum due is above all legal counterclaims such conclusion of fact is no longer necessary in the face of actual proof in the answer which did not carry any counterclaim' 8n fine petitioner stresses that mere forms must not be given more weight than substance' 1? 8n e5cusing the deficiencies of its application for a writ of preliminary attachment petitioner relies heavily on the case of %e <or7a v.9 the Court of $ppeals annulled the assailed writ of attachment for having been issued improperly and irregularly the dispositive portion of which readsF 8* 38EA 14 2>E 41(E&18*& the petition to annul the order and the writ of attachment issued by respondent Court is hereby &($*2E# and Dudgment is rendered declaring said order and writ of attachment null and void for having been issued improperly and regularly' 2he restraining order issued by this Court on *ovember " !"0" restraining respondents from enforcing the writ of attachment issued by respondent Gudge on 1ctober !. and 627 that the amount due to the applicant or the value of the property on the basis of which he is entitled to recover is as much as the sum for which the order is granted above all legal counterclaims'K Bltimately the issue therefore is whether or not non%compliance with the formal re<uirements invalidate the writ of attachment' 1n both counts petitioner admits not having used the e5act words of the (ules in making the re<uisite allegations but nonetheless it alleged that it presented ultimate and specific facts first%in showing that there is indeed no other sufficient security for the claim sought to be enforced as shown in paragraph # of the Complaint earlier <uoted.!"0" is hereby made PE(M$*E*2' Aith costs against private respondents' 13 >ence this recourse' (educed to bare essentials the records show that in the e5ercise of its discretion the lower court found Dustification in the issuance of the attachment' 1n the other hand the Court of $ppeals while in accord with the lower court that a sufficient cause of action e5ists for petitioner and that the ground for its application for attachment is one of those mentioned in )ection ! (ule /0 of the (ules of Court found the issuance of the attachment irregular or illegal in the absence of the following allegations in the application for attachmentF 6!7 that Kthere is no sufficient security for the claim sought to be enforced by the action. &laton 15 where this Court sustained the writ of attachment issued by the lower court in favor of the defendants based on the counterclaim of the latter despite the lack of allegations in the affidavit attached to the petition for the issuance of the writ of attachment that the amount due the counterclaim was as much as the sum for which the order is granted above all legal counterclaims' 8t will be noted however that the trial court found that the counterclaim of the defendants e5ceeded the claims of the plaintiff' 2hus this Court held that Kas the trial court had before it the evidence adduced by both sides the petition for a writ of preliminary attachment having been filed four years after the trial court had begun we .

1+ 647 the answer of defendant 8MP$C2 dated 1ctober +9 !"0" 20 was received by the (2C Pasig only on *ovember / !"0" 21 it is evident that the <uestioned writ was issued e5 parte.presume that the lower court having in mind such evidence ordered the attachment accordingly'K 16 8n sharp contrast in the case at bar where the records undeniably reveal thatF 6!7 the complaint was filed on )eptember 2. Inc.!"0". Glass Construction Co. 17 627 the writ of preliminary attachment was issued on 1ctober !. that there is no other sufficient security for the .'. !"0". 18 6+7 the motion to annul preliminary attachment dated 1ctober !" !"0" was filed on the same day. ?alenzuela 25 wherein the writ of preliminary attachment issued was annulled and set aside on the findings that while the plaintiff Kmay have stated in his affidavit that a sufficient cause of action e5ists against the defendant Penneth 1' &lass he did not state therein that the case is one of those mentioned in )ection ! hereof. and at a time when the Court a 6uo had yet no basis for concluding that the amount due to petitioner is as much as the sum for which the order is granted above all legal counterclaims' 8t is therefore readily apparent that the conclusions in the %e <or7a case cannot be applied to the case at bar' 8n fact even petitionerJs plea for liberality as it vigorously invokes the doctrine on said case which refused Kto sanction that formalism and that technicality which are discountenanced by the modern laws of procedureK is an obvious misreading of the ruling of this Court which statesF 1n the first point we believe a writ of preliminary attachment may be issued in favor of a defendant who sets up a counterclaim' 4or the purpose of the protection afforded by such attachment it is immaterial whether the defendants BorDa and wife simply presented a counterclaim or brought a separate civil action against Gose de BorDa plaintiff in the previous case and petitioner herein' 2o lay down a subtle distinction would be to sanction that formalism and that technicality which are discountenanced by the modern laws of procedure for the sake of speedy and substantial Dustice' ' ' ' 22 as a liberal approach to the re<uired allegations in the application for a writ of preliminary attachment when what this Court actually allowed was the presentation of a counterclaim by the defendant instead of a separate civil action in compliance with one of the basic re<uirements for the issuance of said writ' 2he authority to issue an attachment like the Durisdiction of the court over such proceedings rests on e5press statutory provisions and unless there is authority in the statute there is no power to issue the writ and such authority as the statute confers must be strictly construed'23 8n fact K6E7ven where liberal construction is the rule the statute or the right to attachment thereby granted may not be e5tended by Dudicial interpretation beyond the meaning conveyed by the words of the statute'K 2? PetitionerJs application for a writ of preliminary attachment must therefore be scrutini=ed and assessed by the re<uisites and conditions specifically prescribed by law for the issuance of such writ' )ection + (ule /0 of the (evised (ules of Court governs the issuance of a writ of attachment to witF )ec' +' Affidavit and bond re6uired'%$n order of attachment shall be granted only when it is made to appear by the affidavit of the applicant or some other person who personally knows of the facts that a sufficient cause of action e5ists that the case is one of those mentioned in section ! hereof that there is no sufficient security for the claim sought to be enforced by the action and that the amount due to applicant or the value of the property the possession of which he is entitled to recover is as much as the sum for which the order is granted above all legal counterclaims' 2he stringent conditions for the issuance of the writ have been echoed in all subse<uent cases even as late as>. vs.

(e9u0y %6er133.+3. No. R$!. R$<.".C L#!IN < )E. 1++? $ERE%I$A P. Respondents' (E)1HB281* . &etitioner vs' <#(GE NAP LE N R. HER"INI (EL !A%$ILL . and that the amount due to the applicant is as much as the sum for which the order is granted above all legal counterclaims'K More specifically it has been held that the failure to allege in the affidavit the re<uisites prescribed for the issuance of the writ of preliminary attachment renders the writ of preliminary attachment issued against the property of the defendant fatally defective and the Dudge issuing it is deemed to have acted in e5cess of his Durisdiction' 26 8n fact in such cases the defect cannot even be cured by amendment' 27 )ince the attachment is a harsh and rigorous remedy which e5poses the debtor to humiliation and annoyance the rule authori=ing its issuance must be strictly construed in favor of defendant' 8t is the duty of the court before issuing the writ to ensure that all the re<uisites of the law have been complied with' 28 1therwise a Dudge ac<uires no Durisdiction to issue the writ' 2he general rule is that the affidavit is the foundation of the writ and if none be filed or one be filed which wholly fails to set out some facts re<uired by law to be stated therein there is no Durisdiction and the proceedings are null and void' 2hus while not unmindful of the fact that the property sei=ed under the writ and brought into court is what the court finally e5ercises Durisdiction over the court cannot subscribe to the proposition that the steps pointed out by statutes to obtain such writ are inconse<uential and in no sense Durisdictional' 2+ Considering that petitionerJs application for the subDect writ of preliminary attachment did not fully comply with the re<uisites prescribed by law said writ is as it is hereby declared null and void and of no effect whatsoever' 2his conclusion renders a discussion of petitionerJs other argument unnecessary' A>E(E41(E the decision of the Court of $ppeals dated $ugust 2" !". !!.1008 No:e7ber 1?. FELIN BANGALAN. FL < .9 is hereby $448(ME#' Costs against petitioner' )1 1(#E(E#' A. ARELLAN . !4er= o3 !our0 III.claim sought to be enforced by the action.

0 the instant complaint against him was likewise dismissed in the resolution of the Court dated *ovember . J.. and (ariano Retreta ."EL . !""+ as he did not appear to have had any participation in the issuance and service of summons on the defendant in the aforementioned civil case 6pp' 42%4+ Rollo'7 chanrobles virtual law library Aith respect to Gudge *apoleon (' 4loDo inasmuch as the charges against him were mere reiterations of the charges filed by the same complainant in A'(' Case +o' R. having caused the implementation through )heriff Gove of the said writ of attachment on Ganuary 2+ !". !""+ 6p' .* chanrobles virtual law library 2eresita P' $rellano defendant in Civil Case *o' !!%!94! then pending before Branch of the (egional 2rial Court of the )econd Gudicial (egion and stationed in $parri Cagayan filed a verified complaint for neglect of duty misconduct bias and partiality against % chanrobles virtual law library 6a7 Gudge *apoleon (' 4loDo then Presiding Gudge of the aforementioned Branch now assigned as Presiding Gudge of Branch 2 of the (egional 2rial Court of Manila for having irregularly issued an order dated Ganuary 2! !". Rule 42 of the Rules of Court and "ection !.for the issuance of a writ of attachment in the said case on the same date despite the lack of legal basis therefor'chanroblesvirtualawlibrary chanrobles virtual law library 6b7 4elino Bangalan then $cting Clerk of Court 888 of the $parri (2C 6now Presiding Gudge M2C Branch ! $parri Cagayan7 for issuing the writ of attachment in the said case despite the failure of the plaintiffs to post the re<uired attachment bond of P!99 999'99 and for deliberately delaying the issuance of service of summons to the defendant in that although the case was filed on Ganuary 2! !". Rule 1 of the same rules 'chanroblesvirtualawlibrary chanrobles virtual law library . Andres Lan*aman...knowingly fully well that no summons had as yet been issued and served as of said date upon defendant therein in violation of "ection 4.+ Rollo7'chanroblesvirtualawlibrary chanrobles virtual law library 2hereafter the case was referred to Gustice (amon $' Barcelona of the Court of $ppeals for investigation report and recommendation in regard to the remaining respondents'chanroblesvirtualawlibrary chanrobles virtual law library Gustice Barcelona finds Gudge Bangalan 6then Clerk of Court 8887 guilty of negligence for 6!7 having issued the writ of attachment on Ganuary 2! !".in spite of the applicantsJ failure to post an acceptable bond as re<uired under )ection 4 (ule /0 of the (ules of Court for what appears in the record is only a promissory note in the form of an affidavit e5ecuted by ?ictor "u*uitan.the defendant 6complainant herein7 was served summons only on May !+ !".or four 647 months thereafter and that she was not even furnished a copy of the 1rder authori=ing the issuance of a writ of attachment the so%called attachment bond as well as the writ of attachment itself'chanroblesvirtualawlibrary chanrobles virtual law library 6c7 >erminio del Castillo Branch Clerk of Court of the $parri (2C for deliberately delaying the issuance of service of summons on the defendant'chanroblesvirtualawlibrary chanrobles virtual law library 6d7 Huciano Gove #eputy )heriff $parri Cagayan % for sei=ing a vehicle not owned by the defendant and entrusting the custody thereof to )heriff &uards (odolfo $uringan and #ioniso Co' Gr' instead of personally keeping it under his custody resulting in the said vehicle being cannibali=ed to the damage and preDudice of the complainant and the heirs of the late (uperto $rellano'chanroblesvirtualawlibrary chanrobles virtual law library 2he complaint against Clerk of Court >erminio del Castillo was dismissed for lack of merit by the Court in its (esolution dated Gune 2./3#-4@ which had been earlier dismissed for lack of merit by the Court en banc on March 24 !"...

" 6 Rollo pp' 2/ to 4!7 as the property attached does not belong to the Dudgment debtor but to her father (uperto $rellano' $ sheriff incurs liability if he wrongfully levies upon the property of a third person 640 $m Gr ." 6 Rollo pp' !!9 to !!!7 holding the two 627 sheriff guards liable for the cannibalism of the truck'chanroblesvirtualawlibrary chanrobles virtual law library 6pp' !+2%!++' Rollo7 A>E(E41(E premises considered Gudge 4elino Bangalan and )heriff Hucinio Gove are hereby each fined the amount of 483E 2>1B)$*# PE)1) 6P/ 999'997 with the . Phil' "927' 2he sheriff maybe liable for enforcing e5ecution on property belonging to a third party 6)ec' !0 (ule +" (ules of Court7' >owever he cannot be faulted for entrusting the custody thereof to the sheriff guards considering that he can not physically keep the cargo truck under his custody' >is stand is sustained by the Court in its 1rder of 1ctober !9 !".%!"7 no bond can be confiscated to answer for the damages sustained by defendants' >e discovered that only a promissory note in the form of an affidavit e5ecuted by the bondsmen denominated as an attachment bond appears on the record' >ad respondent Bangalan carefully e5amined the undertaking filed before he issued the writ of attachment such a situation could have been obviated' Ahere a statute authori=ing attachment re<uires as a condition to the issuance of the writ that a bond shall be given by plaintiff to indemnify defendant for any loss or inDury resulting from the attachment in case it proves to be wrongful a failure to give such bond is fatal and an attachment issued without the necessary bond is invalid 60 C'G')' +2-7' >owever we do not find that the delay in the issuance and service of summons was deliberately done to preDudice the defendant' Bad faith cannot be inferred by the mere fact of delay considering that it was issued by the 1ffice of the Clerk of Court and not by the branch clerk to whom the case was already assigned'chanroblesvirtualawlibrary chanrobles virtual law library 4or sei=ing a vehicle which is not owned by the defendant respondent )heriff Gove may be held administratively liable' $lthough his actuation may not have been tainted with bad faith or malice he failed to e5ercise due prudence in attaching the truck' >e should have verified first if the truck he sei=ed was owned by the Dudgment debtor especially in this case where it was found in the possession of a person other than its real owner' Conse<uently the writ of attachment was ordered dissolved in the #ecision of Gudge 2umacder dated $ugust " !".$s for )heriff Gove Gustice Barcelona found that in serving the writ of attachment the sheriff did not serve the same on the defendant but on somebody whom he suspected only as holding the property of the complainant' >e failed to verify the ownership of the cargo truck he attached' 2o compound the sheriffJs failure to e5ercise diligence in the e5ecution of the writ of attachment he surrendered the custody of the property to the two alleged guards instead of depositing the same in a bonded warehouse'chanroblesvirtualawlibrary chanrobles virtual law library 4inding both Gudge Bangalan and )heriff Gove remiss in the performance of their duties Gustice Barcelona recommends that they each be suspended for one 6!7 month 6not chargeable to their accumulated leave7 without pay' >owever this Court is of the opinion and thus hereby holds that a fine of P/ 999'99 each for Gudge Bangalan and )heriff Gove is the commensurate penalty for the irregularity that attended the civil case below' 8n this respect we agree with the factual findings and analysis of the 1ffice of the Court $dministrator thusF 8ndeed he issued the Arit of $ttachment although the plaintiffs have not yet posted the re<uired attachment bond' 8t is e5plicitly stated in his Comment that what was filed was merely an undertaking' 2he fact that the KBndertakingK was subscribed by the branch clerk of court does not necessarily follow that it carried the imprimatur of the presiding Dudge thereof' $s a lawyer respondent Bangalan who is now a Gudge should have known the glaring distinctions between a plain undertaking and a real attachment bond' 2he difference between the two is not that hard to discern' $s ruled by Gudge Ernesto $' 2alamayan in his order of $pril 2+ !""+ 6 Rollo pp' !./07' $ sheriff has no authority to attach the property of any person under e5ecution e5cept that of the Dudgment debtor' 8f he does so the writ of e5ecution affords him no Dustification for the action is not in obedience to the mandate of the writ 6Codesal and 1campo vs' $scue +.

severe warning that a repetition of the same or similar acts in the future will be dealt with more severely'chanroblesvirtualawlibrary chanrobles virtual law library )1 1(#E(E#' G. E)ANGELI%$A a&' FELI!IA E)ANGELI%$A. 1++2 RI!AR( !#AR$ER .. &etitioner vs' ! #R$ F APPEAL%. and (icardo Cuartero K which nullified the orders of the trial court dated $ugust 24 !""9 and 1ctober 4 !""9 and cancelled the writ of preliminary attachment issued on )eptember !" !""9'chanroblesvirtualawlibrary chanrobles virtual law library 4ollowing are the series of events giving rise to controversy'chanroblesvirtualawlibrary chanrobles virtual law library the present R BER$ 1n $ugust 29 !""9 petitioner (icardo Cuartero filed a complaint before the (egional 2rial Court of Mue=on City against the private respondents Evangelista spouses for a sum of money plus damages with a prayer for the issuance of a writ of preliminary attachment' 2he complaint was docketed as Civil Case *o' M%"9% -40!'chanroblesvirtualawlibrary chanrobles virtual law library 1n $ugust 24 !""9 the lower court issued an order granting e. 102??8 Au8u20 5. Respondents' G#$IERRE@. No.* chanrobles virtual law library 2his is a petition for review on certiorari seeking to annul the decision of the Court of $ppeals promulgated on Gune 20 !""! as well as the subse<uent resolution dated 1ctober 22 !""! denying the motion for reconsideration in C$%&'(' )P *o' 2+!"" entitled K)pouses (oberto and 4elicia Evangelista v' >onorable Ce=ar C' PeraleDo Presiding Gudge (egional 2rial Court of Mue=on City Branch ".R. <R. J.-parte the petitionerJs prayer for the issuance of a writ of preliminary attachment'chanroblesvirtualawlibrary chanrobles virtual law library 1n )eptember !" !""9 the writ of preliminary attachment was issued pursuant to the trial courtJs order dated $ugust 24 !""9' 1n the same day the summons for the spouses Evangelista was likewise prepared'chanroblesvirtualawlibrary chanrobles virtual law library 2he following day that is on )eptember 29 !""9 a copy of the writ of preliminary attachment the order dated $ugust 24 !""9 the summons and the complaint were all .

.7 in arriving at the foregoing conclusion' 8t stated thatF 3alid service of summons and a copy of the complaint vest Durisdiction in the court over the defendant both for the purpose of the main case and for purposes of the ancillary remedy of attachment and a court which has not ac<uired Durisdiction over the person of . Court of Appeals !-. )C($ -"2 6!".simultaneously served upon the private respondents at their residence' 8mmediately thereafter #eputy )heriff Ernesto H' )ula levied attached and pulled out the properties in compliance with the courtJs directive to attach all the properties of private respondents not e5empt from e5ecution or so much thereof as may be sufficient to satisfy the petitionerJs principal claim in the amount of P2 !0! 0"4'"!'chanroblesvirtualawlibrary chanrobles virtual law library )ubse<uently the spouses Evangelista filed motion to set aside the order dated $ugust 24 !""9 and discharge the writ of preliminary attachment for having been irregularly and improperly issued' 1n 1ctober 4 !""9 the lower court denied the motion for lack of merit'chanroblesvirtualawlibrary chanrobles virtual law library Private respondents then filed a special civil action for certiorari with the Court of $ppeals <uestioning the orders of the lower court dated $ugust 24 !""9 and 1ctober 4 !""9 with a prayer for a restraining order or writ of preliminary inDunction to enDoin the Dudge from taking further proceedings below'chanroblesvirtualawlibrary chanrobles virtual law library 8n a (esolution dated 1ctober +! !""9 the Court of $ppeals resolved not to grant the prayer for restraining order or writ of preliminary inDunction there being no clear showing that the spouses Evangelista were entitled thereto'chanroblesvirtualawlibrary chanrobles virtual law library 1n Gune 20 !""! the Court of $ppeals granted the petition for certiorari and rendered the <uestioned decision' 2he motion for reconsideration filed by herein petitioner Cuartero was denied for lack of merit in a resolution dated 1ctober 22 !""!' >ence the present recourse to this Court'chanroblesvirtualawlibrary chanrobles virtual law library 2he petitioner raises the following assignment of errorsF 8 chanrobles virtual law library 2>E C1B(2 14 $PPE$H) E((E# $*# C1MM822E# $ &($3E $BB)E 14 #8)C(E281* $M1B*28*& 21 H$CP 14 GB(8)#8C281* A>E* 82 >EH# 2>$2 2>E (E&81*$H 2(8$H C1B(2 #8# *12 $CMB8(E GB(8)#8C281* 13E( (E)P1*#E*2 )P1B)E)' 88 chanrobles virtual law library 2>E C1B(2 14 $PPE$H) E((E# $*# $C2E# A82> &($3E $BB)E 14 #8)C(E281* A>E* 82 >EH# 2>$2 2>E (E&81*$H 2(8$H C1B(2 C1BH# *12 3$H8#HI 8))BE 2>E )BBGEC2 A(82 14 P(EH8M8*$(I $22$C>ME*2 A>8C> 8) $* $*C8HH$(I (EME#I' 6Rollo p' !+7 2he Court of $ppealsJ decision is grounded on its finding that the trial court did not ac<uire any Durisdiction over the person of the defendants 6private respondents herein7' 8t declared thatF ' ' ' the want of Durisdiction of the trial court to proceed in the main case as well as the ancillary remedy of attachment is <uite clear' 8t is not disputed that neither service of summons with a copy of the complaint nor voluntary appearance of petitioners was had in this case before the trial court issued the assailed order dated $ugust 24 !""9 as well as the writ of preliminary attachment dated )eptember !" !""9' 2his is reversible error and must be corrected on certiorari' 6Rollo p' 247 2he appellate tribunal relied on the case of "ievert v.

Court of Appeals.9 6!". Inc. citing 3irata v' $<uino /+ )C($ +9%+! [!"0+. Inc. Court of Appeals !02 )C($ 4. supra the phrase Kat the commencement of the actionK is interpreted as referring to the date of the filing of the complaint which is a time before summons is served on the defendant or even before summons issues' 2he Court added that % ' ' ' after an action is properly commenced % by filing of the complaint and the payment of all re<uisite docket and other fees % the plaintiff may apply and obtain a writ of preliminary attachment upon the fulfillment of the pertinent re<uisites laid down by law and that he may do so at any time either before or after service of summons on the defendant' $nd this indeed has been the immemorial practice sanctioned by the courtsF for the plaintiff or other proper party to incorporate the application for attachment in the complaint or other appropriate pleading 6counter%claim cross%claim third%party% .defendant cannot bind the defendant whether in the main case or in any ancillary proceeding such as attachment proceedings 6)ievert v' Court of $ppeals !-. Court of Appeals &'(' *o' "+2-2 *ovember 2" !""! we had occasion to deal with certain misconceptions which may have arisen from our "ievert ruling' 2he <uestion which was resolved in the %avao Li*ht case is whether or not a writ of preliminary attachment may issue e. Co. v. v."7 no notice to the adverse party or hearing of the application is re<uired inasmuch as the time which the hearing will take could be enough to enable the defendant to abscond or dispose of his property before a writ of attachment issues' 8n such a case a hearing would render nugatory the purpose of this provisional remedy' 2he ruling remains good law' 2here is thus no merit in the private respondentsJ claim of violation of their constitutionally guaranteed right to due process'chanroblesvirtualawlibrary chanrobles virtual law library 2he writ of preliminary attachment can be applied for and granted at the commencement of the action or at any time thereafter 6)ection ! (ule /0 (ules of Court7' 8n %avao Li*ht and &ower. v.-parte against a defendant before the court ac<uires Durisdiction over the latterJs person by service of summons or his voluntary submission to the courtJs authority' 2he Court answered in the affirmative' 2his should have clarified the matter but apparently another ruling is necessary'chanroblesvirtualawlibrary chanrobles virtual law library $ writ of preliminary attachment is defined as a provisional remedy issued upon order of the court where an action is pending to be levied upon the property or properties of the defendant therein the same to be held thereafter by the sheriff as security for the satisfaction of whatever Dudgment might be secured in said action by the attaching creditor against the defendant 6$dlawan v' 2omol !. Court of Appeals !"9 )C($ 2-2 6!""97 citing (indanao "avin*s and Loan Association. Inc.7'chanroblesvirtualawlibrary chanrobles virtual law library Bnder section + (ule /0 of the (ules of Court the only re<uisites for the issuance of the writ are the affidavit and bond of the applicant' $s has been e5pressly ruled in <5 . )C($ -"27' 6Rollo p' 247 2he private respondents in their comment adopted and reiterated the aforementioned ruling of the Court of $ppeals' 2hey added that aside from the want of Durisdiction no proper ground also e5isted for the issuance of the writ of preliminary attachment' 2hey stress that the fraud in contracting the debt or incurring the obligation upon which the action is brought which comprises a ground for attachment must have already been intended at the inception of the contract' $ccording to them there was no intent to defraud the petitioner when the postdated checks were issued inasmuch as the latter was aware that the same were not yet funded and that they were issued only for purposes of creating an evidence to prove a pre%e5isting obligation'chanroblesvirtualawlibrary chanrobles virtual law library $nother point which the private respondents raised in their comment is the alleged violation of their constitutionally guaranteed right to due process when the writ was issued without notice and hearing'chanroblesvirtualawlibrary chanrobles virtual law library 8n the later case of %avao Li*ht and &ower Co.omes..4 )C($ +! [!""9.. Inc. v.

-parte provided that the Court is satisfied that the relevant re<uisites therefore have been fulfilled by the applicant although it may in its discretion re<uire prior hearing on the application with notice to the defendant but that levy on property pursuant to the writ thus issued may not be validly effected unless preceded or contemporaneously accompanied by service on the defendant of summons a copy of the complaint 6and of the appointment of guardian ad litem if any7 the application for attachment 6if not incorporated in but submitted separately from the complaint7 the order of attachment and the plaintiffJs attachment bond' 2he <uestion as to whether a proper ground e5isted for the issuance of the writ is a <uestion of fact the determination of which can only be had in appropriate proceedings conducted for the purpose 6Pero5ide Philippines Corporation 3' Court of $ppeals !"" )C($ .2 [!""!.-parte at the commencement of the action if it finds the application otherwise sufficient in form and substance' 2he Court also pointed out thatF ' ' ' 8t is incorrect to theori=e that after an action or proceeding has been commenced and Durisdiction over the person of the plaintiff has been vested in the Court but before ac6uisition of 7urisdiction over the person of the defendant 6either by service of summons or his voluntary submission to the CourtAs authority 7 nothing can be validly done by the plaintiff or the Court' 8t is wrong to assume that the validity of acts done during the period should be dependent on or held in suspension until the actual obtention of Durisdiction over the defendants person' 2he obtention by the court of Durisdiction over the person of the defendant is one thing.claim7 and for the 2rial Court to issue the writ e.-parte was struck down because when the writ of attachment was being implemented no Durisdiction over the person of the defendant had as yet been obtained' 2he court had failed to serve the summons to the defendant'chanroblesvirtualawlibrary chanrobles virtual law library 2he circumstances in "ievert are different from those in the case at bar' Ahen the writ of attachment was served on the spouses Evangelista the summons and copy of the complaint were also simultaneously served'chanroblesvirtualawlibrary chanrobles virtual law library 8t is appropriate to reiterate this CourtJs e5position in the %avao Li*ht and &ower case cited earlier to witF ' ' ' writs of attachment may properly issue e.7' 8t must be noted that the spouses EvangelistaJs motion to discharge . <uite another is the ac<uisition of Durisdiction over the person of the plaintiff or over the subDect matter or nature of the action or the res or obDect thereof' 8t is clear from our pronouncements that a writ of preliminary attachment may issue even before summons is served upon the defendant' >owever we have likewise ruled that the writ cannot bind and affect the defendant' >owever we have likewise ruled that the writ cannot bind and affect the defendant until Durisdiction over his person is eventually obtained' 2herefore it is re<uired that when the proper officer commences implementation of the writ of attachment service of summons should be simultaneously made'chanroblesvirtualawlibrary chanrobles virtual law library 8t must be emphasi=ed that the grant of the provisional remedy of attachment practically involves three stagesF first the court issues the order granting the application. Court of Appeals. supra cited by the Court of $ppeals in its <uestioned decision the writ of attachment issued e. second the writ of attachment issues pursuant to the order granting the writ.. and third the writ is implemented' 4or the initial two stages it is not necessary that Durisdiction over the person of the defendant should first be obtained' >owever once the implementation commences it is re<uired that the court must have ac<uired Durisdiction over the defendant for without such Durisdiction the court has no power and authority to act in any manner against the defendant' $ny order issuing from the Court will not bind the defendant'chanroblesvirtualawlibrary chanrobles virtual law library 8n "ievert v.

and that petitioner in bad faith F APPEAL% . !""4 to $pril !4 !""4 petitioner purchased and received from it various printing ink materials with a total value ofP/94 "9-'99 payable within +9 days from the respective dates of invoices. &etitioner. v' $6e ! #R$ a&' A%A !o4or A !6e715a4 I&'u20r1e2. Respondents.* 2his resolves the petition for certiorari seeking the reversal of the #ecision! of the Court of $ppeals 6C$7 promulgated on 4ebruary 2! 299! which affirmed the #ecision of the (egional 2rial Court 6(2C7 of Mue=on City Branch 22-..the writ of preliminary attachment was denied by the lower court for lack of merit' 2here is no showing that there was an abuse of discretion on the part of the lower court in denying the motion'chanroblesvirtualawlibrary chanrobles virtual law library Moreover an attachment may not be dissolved by a showing of its irregular or improper issuance if it is upon a ground which is at the same time the applicantJs cause of action in the main case since an anomalous situation would result if the issues of the main case would be ventilated and resolved in a mere hearing of a motion 6#avao Hight and Power Co' 8nc' v' Court of $ppeals supra 2he Consolidated Bank and 2rust Corp' 6)olidbank7 v' Court of $ppeals !"0 )C($ --+ [!""!. and the C$ (esolution dated May " 299! denying petitionerJs motion for reconsideration' 2he antecedent facts are as followsFcraFnad 1n 1ctober !9 !""/ private respondent filed a complaint with the (2C for )um of Money with Preliminary $ttachment against herein petitioner' Private respondent claims that during the period from Ganuary !. No. J."AR$INE@. 1?7+70 / "ar56 31. (egional 2rial Court of Mue=on City against spouses Evangelista are hereby (E8*)2$2E#' *o pronouncement as to costs'chanroblesvirtualawlibrary chanrobles virtual law library )1 1(#E(E#' G. I&5.R. #EC8)81* A#%$RIA.7'chanroblesvirtualawlibrary chanrobles virtual law library 8n the present case one of the allegations in petitionerJs complaint below is that the defendant spouses induced the plaintiff to grant the loan by issuing postdated checks to cover the installment payments and a separate set of postdated cheeks for payment of the stipulated interest 6$nne5 KBK7' 2he issue of fraud then is clearly within the competence of the lower court in the main action'chanroblesvirtualawlibrary chanrobles virtual law library A>E(E41(E premises considered the Court hereby &($*2) the petition' 2he challenged decision of the Court of $ppeals is (E3E()E# and the order and writ of attachment issued by >on' Ce=ar C' PeraleDo Presiding Gudge of Branch ". 2006 P!L I&'u20r1e2 "a&u3a50ur1&8 !or9ora01o&.

27 2/O of the above amount as and for attorneyJs fees.!""/ that private respondent should pick up at its plant the remaining unused defective ink materials and re<uested to meet with private respondent to thresh out the matter' *o meeting was ever held' Petitioner further claims that it suffered damages in the amount of P! /"2 0"4'/9 because its customers reDected the finished plastic products it delivered complaining of the bad smell which according to petitioner was caused by the defective ink materials supplied by private respondent' $fter trial on the merits the trial court rendered its #ecision dated Ganuary . !""" the dispositive portion of which reads thusFcraFnad A>E(E41(E premises considered Dudgment is hereby rendered in favor of plaintiff' #efendant PCH 8ndustries Manufacturing Corporation is hereby ordered to pay plaintiffF !7 P/94 "9-'99 plus 29O interest per annum from $pril !""4 until fully paid. however insists that the ink materials delivered by private respondent in !""4 were also defective and they made known their complaints to 4rankie the authori=ed representative of private respondent' 8n a letter dated Gune +9 !""/ petitioner informed private respondent that it had been complaining to its 6private respondentJs7 representative about the <uality of the ink materials but nothing was done to solve the matter' Private respondent replied through a letter dated Guly !!""/ that it was giving petitioner the option to return the products delivered Ksealed and unusedK within one week from receipt of said letter or pay the full amount of its obligation' Petitioner answered in a letter dated )eptember 2.failed to comply with the terms of the sale and failed to pay its obligations despite repeated verbal and written demands' Petitioner was served with summons together with the Arit of Preliminary $ttachment on 1ctober 29 !""/' 1n 1ctober 2+ !""/ petitioner filed a Motion to #issolve andCor #ischarge Arit of Preliminary $ttachment' 1n *ovember 29 !""/ the trial court issued an 1rder denying petitionerJs motion to dissolve the writ of preliminary attachment' PetitionerJs motion for reconsideration of said order was also denied per 1rder dated Ganuary 2 !""-' Petitioner no longer elevated to the higher courts the matter of the propriety of the issuance of the writ of preliminary attachment' 8n the meantime on 1ctober +9 !""/ petitioner filed its $nswer with Counterclaim' Petitioner claims that the various printing ink materials delivered to it by private respondent were defective and sometime in $ugust 1ctober and *ovember of !""+ they have returned ink materials to private respondent as shown by several 2ransmittal )lips' *evertheless petitioner admits that it continued to buy ink materials from private respondent in !""4 despite having reDected ink materials delivered by private respondent in !""+' &etitioner. and +7 cost of suit' 2he counterclaim of defendant is hereby dismissed for insufficiency of evidence' )1 1(#E(E#'2 cra 2he (2C #ecision was appealed by herein petitioner to the C$' 1n 4ebruary 2! 299! the C$ promulgated its #ecision affirming the (2C Dudgment' 2he C$ held that there was sufficient evidence to prove that herein petitioner had the intention of defrauding private respondent when it contracted the obligation because it agreed to pay within +9 days from the date of purchase but once the merchandise was in its possession it refused to pay' 4urthermore the C$ ruled that the issue on the propriety of the issuance of the writ of preliminary attachment should be laid to rest since petitioner no longer <uestioned the trial courtJs orders before the higher courts' $s to the alleged defect of the ink delivered by private respondent both the trial court and the C$ found that the evidence presented by petitioner was insufficient to prove that it was indeed the ink from private respondent which caused the unwanted smell in .

' 555 $ closer look at these three transmittal receipts would readily show that they are all for deliveries made in !""+ whereas the items admittedly received by defendant and listed in paragraph 2 of the Complaint are all delivered and dated from Ganuary !. 2he appellant tried to convince us that the subDect ink materials were the same ink delivered by the appellee and used in the products that were returned because of the unwanted smell' >owever its evidence fails to impress us' $6ere 12 &o 1&'15a01o& 06a0 06e 94a20151Fe' 9ou56e2 9r1&0e' by 06e 'e3e&'a&0. !o&:er2e4y.a99e44ee.efendant presented transmittal receipts which allegedly represent the items returned by defendant [herein petitioner. 06e a99e44a&0 5o&01&ue' u21&8 06e 2a7e 1& 06e1r 9ro'u501o& o3 94a2015 7a0er1a42 D6156 Dou4' o&4y 26oD 06a0 06e 5au2e o3 06e a44e8e' 201&=1&8 27e44 5a&&o0 be a00r1bu0e' 0o 06e 2ubEe50 1&= 7a0er1a42 u2e'. !""4 to $pril !4 !""4' 2he items therefore returned for being defective and communicated by defendant to plaintiff are for those printing ink materials delivered in !""+ and these are not the items left unpaid and in issue in this present Complaint' 2here is no other proof of demand made by defendant to plaintiff corporation as to communicate to plaintiff any defect in the printing ink materials delivered in !""4 e5cept the demand letter 6E5hibit K42K7 which is dated )eptember 2.or2e. a99e44a&0 a&' re0ur&e' by 102 5u20o7er2 Dere 9r1&0e' D106 06e u2e o3 06e 9a1&0 'e41:ere' by 06e 94a1&0133.2er:1&8 or u&re41ab4e. 06e a99e44a&0 3a14e' 0o 5o&:1&51&84y 26oD 06a0 06e a99e44a&0 20o99e' u21&8 06e 2ubEe50 1&= 7a0er1a42 u9o& &o015e o3 102 5u20o7er2 o3 06e a44e8e' u&Da&0e' 27e44 o3 06e 9ro'u502. or 0o0a44y u&Dor06y o3 5re'e&5e as shown by the followingF !7 $6e HDor= 9ro5e22H 3or72 5o&0a1& 06e &a7e2 o3 0Do I2J or 06ree I3J 2u9941er2 as shown by the followingFcraFnad E5h' K!2K % )21CPC$)$ K!+K % )8MC1(C$)$ . to plaintiff [herein respondent. $6e 3or7erG2 e:1'e&5e o& 0612 9o1&0 are e106er 2e43.petitionerJs finished plastic products' 2he trial courtJs analysis of the evidence led it to the following conclusions to witFcraFnad [#.!""/' $s admitted by defendantJs witness Eleno Cayabyab the demands made by Mr' Govencio Him to plaintiff had been oral or verbal only and made only on two occasions' 8n fact said witness cannot remember e5actly when these oral demands were made by Mr' Govencio Him 5 5 5 555 $s regards the testimony of defendantJs witness Govencio Him that defendantJs end% users returned the plastic packaging materials to defendant and defendant had to reimburse its clients of the amount paid by them and defendant allegedly suffered damages defendant failed to present sufficient evidence of this allegation' 5 5 5 + cra $ffirming the foregoing findings of the trial court the C$ further noted thatFcraFnad $s may be observed as early as Ganuary +! !""4 the appellant [herein petitioner. had received complaints from its customers about the alleged unwanted smell of their plastic products' >owever no steps were taken to investigate which of its several suppliers delivered the defective ink and if indeed the appelleeJs ink materials were the cause of the smell no immediate communications were sent to the latter' 1n the contrary it 6appellant7 continued to place orders and receive deliveries from the appellee' .

b:1ou24y. otherwise they will be held liable for the value thereof' /7 2he defendant%appellant never made any written or formal complaint about the alleged inferior <uality ink and no steps were taken to demand restitution or rectification' I02 4e00er 'a0e' <u&e 30.K!4K % )8MC1(C$)$ K!/K % )8MC1(C$)$ K!-K % )I*P$CC$)$ K!0K % )I*P$CC$)$ K!. 06e a99e44a&0G2 4e00er Da2 Dr100e& 0o 2er:e a2 a& eK5u2e 3or 102 3a14ure 0o 9ay 3or 102 5o&0ra50ua4 ob418a01o&2. $612 4e00er Da2 102 a&2Der 0o 06e a99e44eeG2 4e00er o3 'e7a&' 3or 9ay7e&0.!""/' 1bviously no such return was made'4 6Emphasis supplied7 Petitioner then filed the present petition for review on certiorarion the following groundsF 8' . +7 E5hibits K+9K K+!K and K+2K are supposedly memos from 4rank 4' 2anos of the 1mega Manufacturing 6one of the appellantJs customers7 alleging that they have reDected certain printed materials due to Kunwanted smellK' $gain these memos do not indicate the source of such unwanted smell' 8n any case the memos were respectively dated Gune !/ !""4 Guly !/ !""4 and March +9 !""/ % % which dates are too far away from the deliveries made by the appellee' 47 2he defendant%appellant made returns of ink products to the appellee much earlier on $ugust + !""+ $ugust .or= Pro5e22H 26ee02 Da2 9re2e&0e' 0o eK94a1& 06e e&0r1e2 06ereo&.!""+ 1ctober !+ !""+ and *ovember + !""+ as shown by the delivery receiptsCreturn slips of such dates' $ccording to the appellee these were samples that were really returnable if not acceptable' 2his e5planation appears to be plausible since the <uantity involved appears to be unusually low compared to the <uestioned and unpaid deliveries' $t any rate no similar delivery receipts or return slips were presented to show that the subDect ink materials were indeed reDected and returned by the appellant to the appellee' 1n the contrary the appellant admits that they still have them in their possession for the reason that they were not picked up by the appelleeJs representative' )uch reasoning appears to be shallow and unworthy of credence' 4or if the materials were indeed not picked up within a reasonable time by the appelleeJs representative the appellant should have taken steps to return them. No0 e:e& 06e 9er2o& D6o 9re9are' 06e 2a1' H. 8n any case as a reaction to such letter the appellee dared the appellant to return the materials within one week through its letter of Guly !. No D10&e22 3ro7 06e a99e44a&0G2 Pro'u501o& (e9ar07e&0 Da2 9re2e&0e' 0o a00e20 06a0 06e 1&= 2u9941e' by 06e a99e44ee Da2 3ou&' 'e3e501:e.K % )I*P$CC$)$ K!"K % )I*P$CC$)$ K29K % )I*P$CC$)$CC#8 K2!K % )I*P$CC$)$ 2his is an indication that 06e 2u9941er o3 06e ob&oK1ou2 9a1&0 7a0er1a42 6a2 &o0 bee& 9ro9er4y 1'e&0131e' or 91&9o1&0e'' 27 $6e H"e7ora&'u7H 0o 06e a99e44a&0G2 Pro'u501o& (e9ar07e&0 3ro7 102 Re5or'2LRe5e1:1&8 %e501o& 12 a& 1&0er&a4 7e7o 06a0 'oe2 &o0 1&'15a0e D6156 o3 06e1r 2e:era4 2u9941er2 'e41:ere' 06e H1&3er1or Mua410y o3 1&=H. 1++5 Da2 06e 31r20 017e 10 7a'e a 5o77u&15a01o& 0o 06e a99e44ee abou0 06e a44e8e' 1&3er1or Mua410y o3 06e 1&= 'e41:ere' by 06e 4a00er.

the Court held thusFcraFnad Pe0101o&er 5a&&o0 1&2120 06a0 102 a44e8a01o& 06a0 9r1:a0e re29o&'e&02 3a14e' 0o re710 06e 9ro5ee'2 o3 06e 2a4e o3 06e e&0ru20e' 8oo'2 &or 0o re0ur& 06e 2a7e 12 2u33151e&0 3or a00a567e&0 0o 122ue' Ae note that petitioner anchors its application upon )ection !6d7 (ule /0' 2his particular provision was ade<uately e5plained in Liberty Insurance Corporation v. Court of Appeals .2>E (E)P1*#E*2 C1B(2 14 $PPE$H) $C2E# A82> &($3E $BB)E 14 #8)C(E281* 8* 8))B8*& $ A(82 14 P(EH8M8*$(I $22$C>ME*2 EQ P$(2E A82>1B2 $*I HE&$H B$)8) $*# 1* &(1B*#) *12 $B2>1(8RE# B*#E( (BHE /0 14 2>E (BHE) 14 C1B(2 88' 2>E (E)P1*#E*2 C1B(2 14 $PPE$H) $C2E# A82> &($3E $BB)E 14 #8)C(E281* $) 82) GB#&ME*2 A$) B$)E# 1* $ M8)$PP(E>E*)81* 14 4$C2) $*# 82) 48*#8*&) $(E *12 )BPP1(2E# BI 2>E E38#E*CE EQ2$*2 8* 2>E (EC1(#) 14 2>8) C$)E 888' 2>E >1*1($BHE C1B(2 14 $PPE$H) C1MM822E# &($3E $BB)E 14 #8)C(E281* 8* *12 (E3E()8*& 2>E (BH8*& 14 2>E 2(8$H C1B(2 / 4irst of all although the petition states that it is one for certiorariunder (ule -/ of the (ules of Court as it imputes grave abuse of discretion committed by the C$ the Court shall treat the petition as one for review on certiorariunder (ule 4/ considering that it was filed within the reglementary period for filing a petition for review on certiorariand the issues and arguments raised basically seek the review of the C$ Dudgment' )econdly it should be pointed out that petitioner mistakenly stated that it was the C$ that issued the writ of preliminary attachment' )aid writ was issued by the trial court' 1n appeal the C$ merely upheld the trial courtJs order ruling that the applicantJs 6herein private respondentJs7 affidavit was sufficient basis for the issuance of the writ because it stated that petitioner had the intention of defrauding private respondent by agreeing to pay its purchases within +9 days but then refused to pay the same once in possession of the merchandise' 2he Court however finds the issuance of the Arit of Preliminary $ttachment to be improper' 8n &hilippine <an) of Communications v. %y. Gonzales. . Court of Appeals as follows % 2o sustain an attachment on this ground it must be shown that the debtor in contracting the debt or incurring the obligation intended to defraud the creditor' 2he fraud must relate to the e5ecution of the agreement and must have been the reason which induced the other party into giving consent which he would not have otherwise given' 2o constitute a ground for attachment in )ection ! 6d7 (ule /0 of the (ules of Court fraud should be committed upon contracting the obligation sued upon' A 'eb0 12 3rau'u4e&04y 5o&0ra50e' 13 a0 06e 017e o3 5o&0ra501&8 10 06e 'eb0or 6a2 a 9re5o&5e1:e' 94a& or 1&0e&01o& &o0 0o 9ay as it is in this case' 4raud is a state of mind and need not be proved by direct evidence but may be inferred from the circumstances attendant in each case (Republic v. ! "CRA #!!$' 6Emphasis ours7 Ae find an absence of factual allegations as to how the fraud alleged by petitioner was committed' $s correctly held by respondent Court of $ppeals 2u56 3rau'u4e&0 1&0e&0 &o0 0o 6o&or 06e a'7100e' ob418a01o& 5a&&o0 be 1&3erre' 3ro7 06e 'eb0orG2 1&ab1410y 0o 9ay or 0o 5o794y D106 06e ob418a01o&2 '0 6Emphasis supplied7 More recently in &hilippine +ational Construction Corporation v. the Court ruled that the following allegations in an affidavit to support the application for a Arit of Preliminary $ttachment is insufficient to witFcraFnad .

(adstock grounded its application for a Arit of Preliminary $ttachment on )ection ! 6d7 and 6e7 of (ule /0 of the (ules of Court which providesFcraFnad )EC281* !' Grounds upon which attachment may issue ' % $ 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 Dudgment that may be recovered in the following casesF ''' 6d7 8n 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 or in the performance thereof. A42o. &o 3rau' 5a& be 'e'u5e' 3ro7 06e2e a502.Billion its interests and penalties within three 6+7 days from demand in writing and in the case of credit obligation for P29 999 999 which P*CC had agreed to punctually li<uidate the said advances to its subsidiary P*CC failed to pay and honor its obligations herein stated' 555 /' 2hat P*CC knowing that it is bankrupt and that it does not have enough assets to meet its e5isting obligations is now offering for sale its assets as shown in the reports published in newspapers of general circulation' -' 2hat the above series of acts as enumerated in paragraphs + 4 and /[ . Marubeni believes constitute fraud on the part of P*CC in contracting the obligations mentioned herein and will surely preDudice its creditors' 555 Ae do not see how the above allegations even on the assumption they are all true can be considered as falling within sub%paragraphs 6d7 and 6e7' 2he first three assert in essence that P*CC has failed to pay its debt and is offering for sale its assets knowing that it does not have enough to pay its obligations' A2 9re:1ou24y 6e4'. $lso that the 4inancial )tatements do not reflect the loan obligation cannot be construed as a scheme to defraud creditors' $s to the last two paragraphs 06e2e 7ere4y 20a0e' 06a0 D614e PN!! 5o&01&ue' 0o re5e1:e re:e&ue2 3ro7 0o44 56ar8e2 a&' o06er 4oa& ob418a01o&2 06e 'eb0 0o "arube&1 re7a1&e' u&9a1'. ''' 8n support of these grounds the affidavit of merit alleged the followingFcraFnad +' #espite repeated demands and periodic statements of accounts sent to P*CC for the settlement of the credit obligation Ien /'4. 3rau'u4e&0 1&0e&0 5a&&o0 be 1&3erre' 3ro7 a 'eb0orG2 1&ab1410y 0o 9ay or 5o794y D106 ob418a01o&2. 6Emphasis supplied7 )imilarly in this case the bare allegations in the applicantJs affidavit to witFcraFnad . "arube&1 Dou4' &o0 be 1& a Dor2e 9o2101o& 06a& be3ore a2 06e a22e02 D144 20144 be 06ere bu0 Eu20 41Mu1'a0e'. Ahile these may be sufficient averments to be awarded damages once substantiated by competent evidence and for which a writ of e5ecution will issue 06ey are &o0 2u33151e&0 0o ob0a1& 06e 6ar26 9ro:121o&a4 re7e'y o3 9re4171&ary a00a567e&0 D6156 reMu1re2 7ore 06a& 7ere 'e41bera0e 3a14ure 0o 9ay a 'eb0. A8a1&. 06e 3a50 06a0 PN!! 6a2 1&2u33151e&0 a22e02 0o 5o:er 102 ob418a01o&2 12 &o 1&'15a01o& o3 3rau' e:e& 13 PN!! a00e7902 0o 2e44 06e7 be5au2e 10 12 Mu10e 9o221b4e 06a0 PN!! Da2 e&0er1&8 1&0o a bon fide 8oo' 3a106 2a4e D6ere a0 4ea20 3a1r 7ar=e0 :a4ue 3or 06e a22e02 D144 be re5e1:e'. 6e7 8n an action against a party who has removed or disposed of his property or is about to do so with intent to defraud his creditors. I& 2u56 a 210ua01o&.

agreed to pay the purchases within +9 days from date of purchases but once in possession of the merchandise refused to pay his Dust and valid obligation thereby using the capital of plaintiff [herein private respondent. and 6"7 when the findings of fact of the Court of $ppeals are premised on the absence of evidence and are contradicted by the evidence on record' 6Emphasis supplied7 Petitioner insists that the C$ should have given weight to its evidence i. v. 6/7 when the findings of fact are conflicting. 6. Inc. 6-7 when the Court of $ppeals in making its findings went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee.-' PCH 8ndustries Manufacturing Corporation after receiving the above printing ink materials acted in bad faith when it failed to comply with the terms and conditions of the sale thereby preDudicing the interest of $sa Color N Chemical 8ndustries 8nc' 555 !9' #efendant [herein petitioner.' "cra are insufficient to prove that petitioner was guilty of fraud in contracting the debt or incurring the obligation' 2he affidavit does not contain statements of other factual circumstances to show that petitioner at the time of contracting the obligation had a preconceived plan or intention not to pay' 3erily in this case the mere fact that petitioner failed to pay its purchases upon falling due and despite several demands made by private respondent is not enough to warrant the issuance of the harsh provisional remedy of preliminary attachment' >owever with regard to the other issues raised in this petition the Court finds the same unmeritorious' 2his Court reiterated in Child Learnin* Center. 6+7 when the findings are grounded entirely on speculations surmises or conDectures. 627 when there is grave abuse of discretion. . a331r7e' by 06e !our0 o3 A99ea42.e' the work processes 6E5hibits K!2K to K2!K7 which supposedly proved that respondent $)$ supplied the ink that caused the unpleasant smell of petitionerJs finished products' Petitioner argues that the C$ erred in concluding that the work processes failed to prove that the defective ink definitely came from respondent because said documents showed not only the name of respondent $)$ Color as supplier but also the names of several other suppliers' Petitioner now tries to e5plain that the other names of suppliers appearing on the work processes were suppliers of plastic materials so the only supplier of ink appearing on said documents is respondent $)$' 8t is further pointed out that as testified by Govencio Him 6Him7 petitionerJs President during the period covered by the Aork Processes they had only two suppliers of ink C#8 )akada and respondent $)$ Color' 2he Court subDected the records of this case to close scrutiny but found that petitionerJs allegation that the C$ Dudgment is based on misapprehension of facts is absolutely unfounded' $6ere 12 &o 0e2017o&1a4 e:1'e&5e D6a02oe:er 0o 2u99or0 9e0101o&erG2 be4a0e' eK94a&a01o& 06a0 06e o06er &a7e2 o3 2u9941er2 a99ear1&8 o& 06e Dor= 9ro5e22e2 are 2u9941er2 o3 94a2015 7a0er1a42 a&' &o0 1&= ' Moreover petitionerJs witnesses contradict each other' Him claims that during the period covered by the work processes .a*ario thatFcraFnad !9 the well%settled rule &enerally 3a50ua4 31&'1&82 o3 06e 0r1a4 5our0. 2he established e5ceptions areF 6!7 when the inference made is manifestly mistaken absurd or impossible.7 when the Court of $ppeals manifestly overlooked certain relevant facts not disputed by the parties and which if properly considered would Dustify a different conclusion. 607 when the findings of fact are conclusions without citation of specific evidence on which they are based. was guilty of fraud in contracting the obligation when he [sic. are 31&a4 a&' 5o&54u21:e a&' 7ay &o0 be re:1eDe' o& a99ea4. 647 when the Dudgment of the Court of $ppeals is based on misapprehension of facts. to the latterJs preDudices [sic.

they had only 2 suppliers of ink namely C#8 )akada and $)$ Color' !! 1n the other hand contrary to HimJs claim 3ictor MontaSe= petitionerJs >ead of the $ccounting #epartment testified that at that time they had three or four suppliers of ink materials'!2 2he work process form dated $pril 2" !""4 marked as E5hibit K29K also listed the suppliers as K)I*P$CC$)$C C#8 K and the colors used as KBrown%$)$K and KIellow%C#8'K >ence petitionerJs own evidence reveals that there were at least two suppliers of ink for that batch of production as Him has stated that both $)$ and C#8 are suppliers of ink materials'!+ >ence the C$ was correct in ruling that petitionerJs evidence failed to prove that it was indeed respondent $)$ Color who supplied the defective ink' >aving failed to prove that the ink materials delivered by respondent were defective petitioner does not have any basis for claiming the right to return and not pay for the materials it purchased from respondent' 8t is therefore no longer necessary to discuss whether it was the obligation of respondent to pick%up the ink from petitionerJs warehouse' Petitioner is likewise wrong in assuming that the C$ totally disregarded the testimony of 4rank 2anos 62anos7 who withdrew his testimony on 4ebruary 24 !"". 8nsofar as the issuance of the Arit of $ttachment is concerned the Court finds the same improper hence the attachment over any property of petitioner by the writ of preliminary attachment is ordered LIF$E( effective upon the finality of this #ecision' 8n all other respects the #ecision of the Court of $ppeals dated 4ebruary 2! 299! and its (esolution dated May " 299! are AFFIR"E(. % R(ERE(. or almost a year after testifying that petitionerJs plastic products were reDected by customers due to the bad smell of paint' 2he C$ made no ruling on the admissibility of 2anosJ testimony' 2he appellate court merely stated that the memos 6E5hibits K+9K%K+2K7 from said witness also do not prove the source of the unwanted smell' 2hus the C$ obviously considered 2anosJ testimony and the documents he identified for whatever they were worth but still found them unconvincing to prove petitionerJs claim that it was respondent who delivered defective ink materials' Clearly the findings of fact of both the trial court and the C$ as <uoted above are strongly rooted on testimonial and documentary evidence submitted by both parties' 2his case evidently does not fall under any of the enumerated e5ceptions to the general rule that factual findings of the trial court affirmed by the C$ are final and conclusive and may not be reviewed on appeal' IN )IE. F $HE F REG ING the petition is 9ar04y GRAN$E(. .

and that there is no sufficient security for his claim against the defendant in the event a Dudgment is rendered in his favor' 1 chanrobles virtual law library 4inding the petition to be sufficient in form and substance the respondent Gudge ordered the issuance of a writ of attachment against the properties of the defendant upon the plaintiffJs filing of a bond in the amount of P+0 !"9'99' 2 chanrobles virtual law library 2hereupon on *ovember 22 !"00 the defendant Penneth 1' &lass moved to <uash the writ of attachment on the grounds that there is no cause of action against him since the transactions or claims of the plaintiff were entered into by and between the plaintiff and the P'1' &lass Construction Co' 8nc' a corporation duly organi=ed and e5isting under Philippine laws. Ara*ones for petitioner. GLA%% ! N%$R#!$I N ! . No. PIN@ N. that he has sufficient cause of action against the said defendant.G. &etitioner vs' $HE H N RABLE "AN#EL )ALEN@#ELA. ! N!EP!I N. and >enneth '. Respondents' Guillermo =.* chanrobles virtual law library Petition for certiorari to annul and set aside the writ of preliminary attachment issued by the respondent Gudge in Civil Case *o' /"92%P of the Court of 4irst 8nstance of (i=al entitledF Antonio %. that there is no ground for the issuance of the writ of preliminary attachment as defendant Penneth 1' &lass never intended to leave the Philippines and ... L. Inc. IN!. &inzon.R. <R. <u'8e o3 06e !our0 o3 F1r20 I&20a&5e o3 R1Fa4. a&' AN$ NI (... &inzon plaintiff. defendants. versus >. Glass.. . and for the release of the amount of P+0 !"9'99 which had been deposited with the Clerk of Court to the petitioner'chanroblesvirtualawlibrary chanrobles virtual law library 1n 1ctober .!"00 an action was instituted in the Court of 4irst 8nstance of (i=al by $ntonio #' Pin=on to recover from Penneth 1' &lass the sum of P+0 !"9'99 alleged to be the agreed rentals of his truck as well as the value of spare parts which have not been returned to him upon termination of the lease' 8n his verified complaint the plaintiff asked for an attachment against the property of the defendant consisting of collectibles and payables with the Philippine &eothermal 8nc' on the grounds that the defendant is a foreigner.'.chanrobles virtual law library Ruben ?. Lopez for respondent Antonio %. J.?8756 %e90e7ber 11. 1+82 K. Glass Construction Co.

627 the affidavit did not state that there is no other sufficient security for the claim sought to be recovered by the action as also re<uired by said )ec' +. and that the money being garnished belongs to the P'1' &lass Corporation Co' 8nc' and not to defendant Penneth 1' &lass' 3 chanrobles virtual law library By reason thereof Pin=on amended his complaint to include P'1' &lass Construction Co' 8nc' as co%defendant of Penneth 1' &lass' ? chanrobles virtual law library 1n Ganuary 2. chanrobles virtual law library 6b7 8n an action for money or property embe==led or fraudulently misapplied or 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. chanrobles virtual law library 6c7 8n an action to recover the possession of personal property unDustly detained when the property or any part thereof has been concealed removed or disposed of to prevent its being found or taken by the applicant or an officer. and 6+7 the affidavit did not specify any of the grounds enumerated in )ec' ! of (ule /0 5 but the respondent Gudge denied the motion and ordered the Philippine &eothermal 8nc' to deliver and deposit with the Clerk of Court the amount of P+0 !"9'99 immediately upon receipt of the order which amount shall remain so deposited to await the Dudgment to be rendered in the case' 6 chanrobles virtual law library 1n Gune !" !"0.even if he does plaintiff can not be preDudiced thereby because his claims are against a corporation which has sufficient funds and property to satisfy his claim.!"0. the defendants therein filed a supplementary motion to discharge andCor dissolve the writ of preliminary attachment upon the ground that the affidavit filed in support of the motion for preliminary attachment was not sufficient or wanting in law for the reason thatF 6!7 the affidavit did not state that the amount of plaintiffJs claim was above all legal set%offs or counterclaims as re<uired by )ec' + (ule /0 of the (evised (ules of Court. chanrobles virtual law library 6d7 8n an action against the 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 . the defendants therein filed a bond in the amount of P+0 !"9'99 and asked the court for the release of the same amount deposited with the Clerk of Court 7 but the respondent Gudge did not order the release of the money deposited' 8 chanrobles virtual law library >ence the present recourse' $s prayed for the Court issued a temporary restraining order restraining the respondent Gudge from further proceeding with the trial of the case' + chanrobles virtual law library Ae find merit in the petition' 2he respondent Gudge gravely abused his discretion in issuing the writ of preliminary attachment and in not ordering the release of the money which had been deposited with the Clerk of Court for the following reasonsF 5irst there was no ground for the issuance of the writ of preliminary attachment' )ection ! (ule /0 of the (evised (ules of Court which enumerates the grounds for the issuance of a writ of preliminary attachment reads as followsF chanrobles virtual law library )ec' !' Grounds upon which attachment may issue ' %$ 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 Dudgment that may be recovered in the following casesF chanrobles virtual law library 6a7 8n an action for the recovery of money or damages on a cause of action arising from contract e5press or implied against a party who is about to depart from the Philippines with intent to defraud his creditor.

chanrobles virtual law library 6f7 8n an action against a party who resides out of the Philippines or on whom summons may be served by publication' 8n ordering the issuance of the controversial writ of preliminary attachment the respondent Gudge said and Ae <uoteF chanrobles virtual law library 2he plaintiff filed a complaint for a sum of money with prayer for Arit of Preliminary $ttachment dated )eptember !4 !"00 alleging that the defendant who is a foreigner may at any time depart from the Philippines with intent to defraud his creditors including the plaintiff herein. chanrobles virtual law library 6e7 8n an action against a party who has removed or disposed of his property or is about to do so with intent to defraud his creditors. 6ii7 rentals for the lease of plaintiffJs 8su=u Cargo truck and 6iii7 total cost of the missingCdestroyed spare parts of said leased unit. that there is no sufficient security for the claim sought to be enforced by this action. that the amount due the plaintiff is as much as the sum for which an order of attachment is sought to be granted. and that defendant has sufficient leviable assets in the Philippines consisting of collectibles and payables due from Philippine &eothermal 8nc' which may be disposed of at any time by defendant if no Arit of Preliminary $ttachment may be issued' 4inding said motion and petition to be sufficient in form and substance' 10 chanrobles virtual law library Pin=on however did not allege that the defendant Penneth 1' &lass Kis a foreigner 6who7 may at any time depart from the Philippines with intent to defraud his creditors including the plaintiff'K >e merely stated that the defendant Penneth 1' &lass is a foreigner' 2he pertinent portion of the complaint reads as followsF chanrobles virtual law library !/' Plaintiff hereby avers under oath that defendant is a foreigner and that said defendant has a valid and Dust obligation to plaintiff in the total sum of P+2 2"9'99 arising out from his failure to pay 6i7 service charges for the hauling of construction materials. hence a sufficient cause of action e5ists against said defendant' Plaintiff also avers under oath that there is no sufficient security for his claim against the defendant in the event a Dudgment be rendered in favor of the plaintiff' however defendant has sufficient assets in the Philippines in the form of collectible and payables due from the Philippine &eothermal 8nc' with office address at Citibank Center Paseo de (o5as Makati Metro Manila but which properties if not timely attached may be disposed of by defendants and would render ineffectual the reliefs prayed for by plaintiff in this Complaint' 11 8n his $mended Complaint Pin=on alleged the followingF chanrobles virtual law library !/' Plaintiff hereby avers under oath that defendant &H$)) is an $merican citi=en who controls most if not all the affairs of defendant C1(P1($281*' #efendants C1(P1($281* and &H$)) have a valid and Dust obligation to plaintiff in the total sum of P+2 2"9'99 arising out for their failure to pay 6i7 service charges for hauling of construction materials 6ii7 rentals for the lease of plaintiffJs 8su=u Cargo truck and 6iii7 total cost of the missingCdestroyed spare parts of said leased unitF hence a sufficient cause of action e5ist against said defendants' Plaintiff also avers under oath that there is no sufficient security for his claim against the defendants in the event a Dudgment be rendered in favor of the plaintiff' however defendant C1(P1($281* has sufficient assets in the Philippines in the form of collectibles and payables due from the Philippine &eothermal' 8nc' with office address at Citibank Center Paseo de (o5as Makati Metro Manila but which properties if not timely attached may be disposed of by defendants and would render ineffectual the reliefs prayed for by plaintiff in this Complaint' 12 2here being no showing much less an allegation that the defendants are about to depart from the Philippines with intent to defraud their creditor or that they are non% resident aliens the attachment of their properties is not Dustified' .disposing of the property for the taking detention or conversion of which the action is brought.

chanrobles virtual law library 4' 8 am e5ecuting this $ffidavit to attest to the truthfulness of the foregoing and in compliance with the provisions of (ule /0 of the (evised (ules of Court' 13 chanrobles virtual law library Ahile Pin=on may have stated in his affidavit that a sufficient cause of action e5ists against the defendant Penneth 1' &lass he did not state therein that Kthe case is one of those mentioned in )ection ! hereof. chanrobles virtual law library 6iii7 1n )eptember 0 !"00 after making use of my 8su=u truck he surrendered the same without paying the monthly rentals for the leased 8su=u truck and the peso e<uivalent of the spare parts that were either destroyed or misappropriated by him. 6c7 there is no other sufficient security Jor the claim sought to be enforced by the action and 6d7 the amount due to the applicant for attachment or the value of the property the possession of which he is entitled to recover is as much as the sum for which the order is granted above all legal counterclaims' )ection + (ule /0 of the (evised (ules of Court reads' as followsF chanrobles virtual law library )ection +' Affidavit and bond re6uired'%$n order of attachment shall be granted only when it is made to appear by the affidavit of the applicant or of some person who personally knows the facts that a sufficient cause of action e5ists that the case is one of those mentioned in )ection ! hereof."econd the affidavit submitted by Pin=on does not comply with the (ules' Bnder the (ules an affidavit for attachment must state that 6a7 sufficient cause of action e5ists 6b7 the case is one of those mentioned in )ection 8 6a7 of (ule /0. chanrobles virtual law library +' $s of today 1ctober !! !"00 Mr' Penneth 9' &lass still owes me the total sum of P+2 2"9'99 representing his obligation arising from the hauling of his construction materials monthly rentals for the lease 8su=u truck and the peso e<uivalent of the spare parts that were either destroyed or misappropriated by him. !"00 we entered into a separate agreement whereby my 8su=u cargo truck will be leased to him for a consideration of P4 999'99 a month payable on the !/th day of each month. chanrobles virtual law library 6ii7 $lso on Gune !. that there is no other sufficient security for the claim sought to be enforced by the action and that the amount due to the applicant or the value of the property the possession of which he is entitled to recover is as much as the sum for which the order is granted above all legal counterclaims' 2he affidavit and the bond re<uired by the ne5t succeeding section must be duly filed with the clerk or Dudge of the court before the order issues' 8n his affidavit Pin=on stated the followingF chanrobles virtual law library 8 $*21*81 #' P8*R1* 4ilipino of legal age married and with residence and postal address at !422 $' Mabini )treet Ermita Manila subscribing under oath depose and states that'chanroblesvirtualawlibrary chanrobles virtual law library !' 1n 1ctober . that there is no other sufficient security for the claim sought to be enforced by the action. chanrobles virtual law library 2' My Complaint against Penneth 1' &lass is based on several causes of action namelyF chanrobles virtual law library 6i7 1n 4ebruary !/ !"00 we mutually agreed that 8 undertake to haul his construction materials from Manila to his construction proDect in Bulalo Bay Haguna and vice%versa for a consideration of P/9'99 per hour. and that the amount due to the applicant is as much as the sum for which the order granted above all legal counter%claims'K 8t has been held that the failure to allege in the affidavit the re<uisites prescribed for the issuance of a writ of preliminary attachment renders the writ of preliminary attachment .!"00 8 filed with the Court of 4irst 8nstance of (i=al Pasay City Branch a case against Penneth 1' &lass entitled J$*21*81 #' P8*R1* vs' PE**E2> 1' &H$))J docketed as Civil Case *o' /"92%P.

issued against the property of the defendant fatally defective and the Dudge issuing it is deemed to have acted in e5cess of his Durisdiction' 1? 5inally it appears that the petitioner has filed a counterbond in the amount of P+0 !"9'99 to answer for any Dudgment that may be rendered against the defendant' Bpon receipt of the counter%bond the respondent Gudge should have discharged the attachment pursuant to )ection !2 (ule /0 of the (evised (ules of Court which reads as followsF chanrobles virtual law library )ection !2' %ischar*e of attachment upon *ivin* counterbond '%$t any time after an order of attachment has been granted the party whose property has been attached or the person appearing on his behalf may upon reasonable notice to the applicant apply to the Dudge who granted the order or to the Dudge of the court in which the action is pending for an order discharging the attachment wholly or in part on the security given' 2he Dudge shall after hearing order the discharge of the attachment if a cash deposit is made or a counterbond e5ecuted to the attaching creditor is filed on behalf of the adverse party with the clerk or Dudge of the court where the application is made in an amount e<ual to the value of the property attached as determined by the Dudge to secure the payment of any Dudgment that the attaching creditor may recover in the action' Bpon the filing of such counter%bond copy thereof shall forthwith be served on the attaching creditor or his lawyer' Bpon the discharge of an attachment in accordance with the provisions of this section the property attached or the proceeds of any sale thereof shall be delivered to the party making the deposit or giving the counter%bond or the person appearing on his behalf the deposit or counter%bond aforesaid standing in the place of the property so released' )hould such counter%bond for any reason be found to be or become insufficient and the party furnishing the same fail to file an additional counter%bond the attaching creditor may apply for a new order of attachment' 2he filing of the counter%bond will serve the purpose of preserving the defendantJs property and at the same time give the plaintiff security for any Dudgment that may be obtained against the defendant' 15 chanrobles virtual law library A>E(E41(E the petition is &($*2E# and the writ prayed for is issued' 2he orders issued by the respondent Gudge on 1ctober !! !"0!" Ganuary 2.!"0. in Civil Case *o' /"92%P of the Court of 4irst 8nstance of (i=al insofar as they relate to the issuance of the writ of preliminary attachment should be as they are hereby $**BHHE# and )E2 $)8#E and the respondents are hereby ordered to forthwith release the garnished amount of P+0 !"9'99 to the petitioner' 2he temporary restraining order heretofore issued is hereby lifted and set aside' Costs against the private respondent $ntonio #' Pin=on'chanroblesvirtualawlibrary chanrobles virtual law library )1 1(#E(E#' . and 4ebruary + !"0.