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Roderick C. Dela Cruz, 3rd Year

PCL Industries vs. CA
GRN 147970 March 31, 2006
J. Austria-Martinez
Facts: Private respondent filed a complaint with the RTC for Sum of
Money with Preliminary Attachment against herein petitioner for the latter's
failure to comply with the terms of the sale of various ink materials, and to
pay its obligations despite repeated verbal and written demands.
Apparently thereafter, petitioner was served with summons together with the
Writ of Preliminary Attachment which propriety of its issuance attachment
stood as it was as the motion to discharge the writ was denied.
In the meantime, petitioner filed its Answer with Counterclaim claiming that
the various printing ink materials delivered to it by private respondent were
defective but nothing was done to solve the matter.
After trial on the merits, the trial court rendered its Decision favoring herein
appellee, which judgment was appealed to the CA. The appellate court
affirmed the RTC judgment, holding 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
30 days from the date of purchase but once the merchandise was in its
possession, it refused to pay.
Thus, this petition.
Whether the mere failure to pay an obligation upon falling
due and despite several demands is enough to warrant the issuance of the
harsh provisional remedy of preliminary attachment under Section 1(d), Rule
57 of the Rules of Court.
The issuance of the Writ of Preliminary Attachment was
improper. To sustain an attachment on Section 1(d), Rule 57, it must be
shown that the debtor in contracting the debt or incurring the obligation
intended to defraud the creditor. The fraud must relate to the execution of
the agreement and must have been the reason which induced the other
party into giving consent which he would not have otherwise given. To
constitute a ground for attachment in Section 1 (d), Rule 57 of the Rules of
Court, fraud should be committed upon contracting the obligation sued upon.
A debt is fraudulently contracted if at the time of contracting it the debtor
has a preconceived plan or intention not to pay. Fraud is a state of mind and

need not be proved by direct evidence but may be inferred from the
circumstances attendant in each case .
Fraudulent intent not to honor the admitted obligation cannot be inferred
from the debtor's inability to pay or to comply with the obligations.
Petition partly GRANTED. Writ of Preliminary Attachment is ordered LIFTED.
In all other respects, the CA Decision and Resolution are AFFIRMED.