Professional Documents
Culture Documents
Attachment
n Provisional Remedies
n 1. Nature of provisional remedies
n 2. Jurisdiction over provisional remedies
n 3. Preliminary Attachment
n a. Grounds for issuance of writ of attachment
n b. Requisites
n c. Issuance and contents of order of attachment;
n affidavit and bond
n d. Rule on prior or contemporaneous service of
n summons
n e. Manner of attaching real and personal property;
n when property attached is claimed by third person
n f. Discharge of attachment and the counter-bond
n g. Satisfaction of judgment out of property attached
Supreme Court Outline (2)
n 4. Preliminary Injunction
n a. Definitions and Differences: Preliminary Injunction and Temporary
Restraining Order
n b. Requisites
n c. Kinds of Injunction
n 5. Receivership
n a. Cases when receiver may be appointed
n b. Requisites
n f. Termination of receivership
n 6. Replevin
n a. When may writ be issued
n b. Requisites
n WHAT may be attached: may have the property of the adverse party
attached
n What is the PURPOSE: as security for the satisfaction of any judgment that
may be recovered in the following cases:
n WHERE can you apply:
n at the court where the action is pending
n CA
n SC
n BOND
Purpose
n Attachment lien continues until the debt is paid, or the sale is had under
execution issued on the judgment or until the judgment is satisfied, or the
attachment discharged or vacated in the same manner provided by law.
n Facts: The creditor obtained a writ of attachment over the properties of the
debtor. In the course of the trial between the creditor and the debtor, a
compromise agreement was reached and approved by the court. The
debtor then moved for the lifting of the attachment, which the court granted.
n ISSUE: WON the writ of preliminary attachment was properly lifted.
n HELD: NO. Although the compromise agreement had already been
approved, the obligations thereunder have yet to be fully complied with,
particularly the payment of the total compromise amount. Since the debt
remains unpaid, the attachment should have continued to subsist.
Torres v. Satsatin, G.R. No. 166759, 25 November 2009
n The grant of the provisional remedy of attachment involves three stages: first, the court issues the
order granting the application; second, the writ of attachment issues pursuant to the order granting
the writ; and third, the writ is implemented. For the initial two stages, it is not necessary that
jurisdiction over the person of the defendant be first obtained. However, once the implementation
of the writ commences, the court must have acquired jurisdiction over the defendant, for without
such jurisdiction, the court has no power and authority to act in any manner against the defendant.
Any order issuing from the Court will not bind the defendant.
n
n Thus, it is indispensable not only for the acquisition of jurisdiction over the person of the
defendant, but also upon consideration of fairness, to apprise the defendant of the complaint
against him and the issuance of a writ of preliminary attachment and the grounds therefor that
prior or contemporaneously to the serving of the writ of attachment, service of summons, together
with a copy of the complaint, the application for attachment, the applicants affidavit and bond, and
the order must be served upon him.
Can the order granting a writ of attachment be subject of an
appeal?
n When to file:
n At the commencement of the action or
n at any time before entry of judgment (before judgment become final and
executory)
n Who could file:
n a plaintiff
n against a party
n who is about to depart from the Philippines
n HELD:
n TESDA s funds are public in character, hence exempt from attachment
or garnishment. TESDA s funds are still public in nature and, thus,
cannot be the valid subject of a writ of garnishment or attachment.
Public funds cannot be the object of garnishment proceedings even if
the consent to be sued had been previously granted and the state
liability adjudged.
Grounds (1)
n Exceptions:
n Funds of public corporations are not exempt from garnishment (PNB v.
Pabalan, L-33112, June 15, 1978)
n When the government enters into commercial business (PNB v. CIR, L-
32667, January 1978)
Grounds (1)
n Type of Damages
n Insular Savings Bank vs CA, 460 SCRA 122
n A writ of attachment cannot be issued for moral and exemplary
damages and other unliquidated or contingent claims.
Grounds (2)
n In an action for
n money or
n property
n embezzled or fraudulently misapplied or converted to his own use
n by a
n public officer,
n or an officer of a corporation,
n or an attorney,
n factor,
n broker,
n agent or
n clerk,
n in the course of his employment as such,
n Issue: whether the facts narrated be a ground for the issuance of a writ of preliminary
attachment.
n Ruling: Yes. The facts narrated falls within sec. 1 (b) rule 57, hence, a writ of
preliminary attachment may issue.
n Furthermore, the defendant appellant has almost an exclusive control over the
function of the corporation and its funds on account of his triple capacity as president,
treasurer and general manager must be very scrupulous in the application of the
funds of said corporation to his own use. The act of taking money of the corporation
for his personal use without being duly authorized therefor constitutes such an
irregularity that, while it does not amount to a criminal fraud, is undoubtedly a fraud of
a civil character, because it is an abuse of confidence and constitutes a ground for
the issuance of a preliminary attachment.
Grounds (3)
n In an action
n to recover the possession of property
n unjustly or
n fraudulently taken,
n detained or
n converted,
n In action
n against a party
n who has been guilty of
n a fraud in contracting the debt or
n incurring the obligation upon which the action is brought,
n or in the performance thereof;
Grounds (4)
n FCY Construction Group, Inc. v. Court of Appeals, 381 Phil. 282 (2000).
n A cursory reading of the above-cited testimony, however, readily shows
that said reassurance from the DPWH officials came, not at the
inception of the obligation or contract, but during its performance. On
the other hand, the fraud of which petitioners are accused of and which
was the basis for the issuance of the questioned attachment, is fraud
alleged to have been committed upon contracting the obligation sued
upon. Thus, petitioners argument that "the inducement was the
mouth-watering temptation of a DPWH promise of a 'new project after
the Tandang Sora Flyover project will be finished"' is clearly off-tangent
as such inducement, if any, came not at the inception of the obligation.
Grounds (4)
n Metro, Inc. v. Lara, 381 Phil. 282 (2000). The rule that when the writ of
attachment is issued upon a ground which is at the same time the
applicants cause of action, the only other way the writ can be lifted or
dissolved is by a counter-bondis applicable in this case. It is clear that in
respondents amended complaint of fraud is not only alleged as a ground for
the issuance of the writ of preliminary attachment, but it is also the core of
respondents complaint. The fear of the Court of Appeals that petitioners
could force a trial on the merits of the case on the strength of a mere motion
to dissolve the attachment has a basis.
Grounds (4)
n In an action
n against a party
n who has removed or
n dispose of his property
n or is about to do so,
n with intent to defraud his creditors;
Grounds (5)
n In an action
n against a party
n who does not reside and
n is not found in the Philippines,
n or
n on whom summons may be served by publications.
Grounds (6)
n of the applicant, or
n Bond
n The bond shall answer for all damages incurred by the party against
whom the attachment is issued and sustained by him by reason of the
attachment, If it be finally adjudged that the party applying for
attachment was not entitled thereto.
Bonds required under attachment:
n Counter-bond
n Executed to the applicant
n Shall secure the payment of the any judgment that the attaching party
may recover in the action.
n To discharge attachment
n PBC vs CA, 352 SCRA 616
n An order of attachment cannot be issued on a general averment, such as
one ceremoniously quoting from a pertinent rule.
n Rules on the issuance of a writ of attachment must be construed strictly
against the applicant.
Sec.4. Condition of applicant s bond –
n The party applying for the order must thereafter give a bond executed
to the adverse party in the amount fixed by the court in its order
granting the issuance of the writ, conditioned that the latter will pay all
the costs which may be adjudged to the adverse party and all
damages which he may sustain by reason of the attachment, if the
court shall finally adjudge that the applicant was not entitled thereto.
Republic v. Garcia, G.R. No. 167741, 12 July 2007
n The attachment bond is contingent on and answerable for all costs which
may be adjudged to the adverse party and all damages which he may
sustain by reason of the attachment should the court finally rule that the
applicant is not entitled to the writ of attachment. Thus, it is a security for the
payment of the costs and damages to which the adverse party may be
entitled in case there is a subsequent finding that the applicant is not
entitled to the writ. The Republic of the Philippines need not give this
security as it is presumed to be always solvent and able to meet its
obligations.
n Carlos vs Sandoval, 471 SCRA 266
n This bond answers for all damages incurred by the party against whom
that attachment was issued and sustained by him by reason of the
attachment, if it shall be finally adjudged that the party applying for
attachment was not entitled thereto.
n Sec.5. Manner of attaching property –
n When can the sheriff enforce a writ of preliminary attachment –
n After summons have been duly served upon the person of the
defendant; otherwise the implementation is null and void
n It presupposes from the situation that an order of writ has been issued
to, received by, the sheriff, together with the complaint and
application for attachment
How should the sheriff implement the writ:
n (sec.6. Sheriff s return) after enforcing the writ, the sheriff must:
n Without delay make a return to the court which issued the writ
n By law, sheriffs are obligated to maintain possession of the seized properties absent any instruction to the
contrary. In this case, the writ of preliminary attachment authorizing the trial court to legally hold the attached items
was set aside by the RTC Order dated July 8, 2010 specifically ordering Sheriff Villar to immediately release the
seized items to Spouses Tiu. Pertinently, Rule 57, Section 19 of the Rules of Civil Procedure provides:
n SEC. 19. Disposition of attached property where judgment is for party against whom attachment was issued.If
judgment be rendered against the attaching party, all the proceeds of sales and money collected or received by
the sheriff, under the order of attachment, and all property attached remaining in any such officers hands, shall be
delivered to the party against whom attachment was issued, and the order of attachment discharged.
n
n The instruction of the trial court was clear and simple. Sheriff Villar was to return the seized properties to Spouses
Tiu. He should have followed the courts order immediately. He had no discretion to wait for the finality of the courts
order of dismissal before discharging the order of attachment. Nevertheless, Sheriff Villar showed no deliberate
defiance of, or disobedience to, the courts order of release. Records show that he took the proper step under the
circumstances. He filed with the trial court his Sheriffs Report with Urgent Prayer for the Issuance of a Clarificatory
Order. The Court perceives nothing amiss in consulting the judge before taking action on a matter of which he is
not an expert.
n Sec.7. Attachment of real and personal property; recording thereof –
n How attachment of the following shall be made:
n Real property
n standing on the records of the registry of deeds in the name of any other
person
Real Property –
n Manner of attaching:
n By filing a copy of the order, description of the property attached, and a
notice that it is attached with the REGISTRY OF DEEDS; and
n By leaving a copy of such order, description, and notice with the
OCCUPANT of the property, if any, or with such other person or his
agent if found within the province.
n If the property subject to attachment has been brought under the
operation of either LAND REGISTRATION ACT or PROPERTY
REGISTRATION DECREE:
n The NOTICE shall contain a reference to the number of:
n The certificate of title, volume and page in the registration book where the
certificate is registered, and the registered owner or owners thereof
Personal Property
n Capable of manual delivery
n By taking and safely keeping it in his (sheriff) custody, after issuing the
corresponding receipt therefor
n STOCKS and SHARES of any corporation or company
n By leaving WITH the PRESIDENT and MANAGING AGENT:
n Financial interest
n Royalties
n Notice that the debts owing by him to the party against whom attachment
is issued and the credits and other personal property in his possession, or
under his control, belonging to said party, are attached
Personal Property Effects of attaching:
n The third person having in their possession and control of the credits
and any other similar property belonging to the party whom
attachment is issued, SHALL BE LIABLE to the APPLICANT for the
amount of such credits, debts or other similar personal property,
UNTIL:
n The attachment is discharged, or
n Any judgment is satisfied
n The third person in possession and control of the property not capable of
manual delivery belonging to the party whom attachment is issued is NO
LONGER liable to the applicant WHEN:
n Such property is delivered or transferred, or such
n Debts are paid, to the clerk, sheriff, or other proper officer of the court
issuing the attachment
Interest in Estate of Decedent
n In case where a petition for distribution is filed, the court where such
petition is filed may award the distribution to the HEIR, LEGATEE, or
DEVISEE, but the PROPERTY ATTACHED shall be ORDERED
delivered to the SHERIFF making the levy, subject to the claim of such
heir, legatee or devisee or any person claiming under him
Examination of Party
n any person having in his possession or under his control any creditor
or other personal property belonging to the adverse party
n the party whose property is attached
n purpose of appearance:
n purpose of giving information respecting the property concerned and the
testimony shall be under oath
Examination of Party
n those that the interest of all parties to the action will be subserved by the
sale thereof
n when can it be sold:
n after levy and before entry of judgment; and
n how is it sold:
n the court may order such property to be sold at PUBLIC AUCTION in
such manner as it may direct, and the proceeds of such sale to be deposited
in court to abide the judgment in the action.
Sale of attached property
n II. After Entry of Judgment sec.15 (judgment has become final and
executory) –
n Judgment is in favor of the attaching party and execution is issued
thereon, the sheriff may cause the judgment to be satisfied out of the
property attached.
Sale of attached property
n after realizing upon all the property attached, including the proceeds
of any debts or credits collected, and
n applying the proceeds to the satisfaction of the judgment, less the
expenses of proceedings upon the judgment.
Sec.16. Balance due collected upon an execution;
n any proceeds of the sale of the property attached not applied to the
judgment whenever judgment shall have been paid.
Discharge of attachment – requires notice and hearing
n The court shall, after due notice and hearing, order the discharge of the
attachment if the movant makes a cash deposit, or files a counter-
bond executed to the attaching party with the clerk of the court where
the application is made.
Sec.12. discharge of attachment upon giving counter-bond
n Now, petitioner filed a complaint against respondent Chuidian for the collection of his
indebtedness based on his Agreement to Sell with a prayer asking for the issuance ex parte of
a writ of preliminary attachment on the ground that:
n Respondent converted to his own use the land which he bought in a fiduciary capacity
n Guilty of fraud in contracting his debt and incurring the obligations upon which the action is
brought
n Before the issues have been joined (respondent not having as yet filed his answer to the
complaint), respondent filed a motion to discharge attachment on the ground that the
attachment was improperly issued. After hearing of the motion to discharge attachment,
respondent Judge issued an order granting respondent s motion to discharge attachment.
Sec.12. discharge of attachment upon giving counter-bond
n GB inc vs Sanchez 98 Phil 886
n The merits of the main action are not triable in a motion to discharge
an attachment; otherwise an applicant for the dissolution could force a
trial of the merits of the case on this motion.
n The merits of the main action are not triable in a motion to discharge an
attachment, otherwise an applicant for the dissolution could force a trial of
the merits of the case on this motion.
Recovery upon the counter bond –
n bound to pay the judgment oblige upon demand amount due under the
judgment
n When shall the amount of counter-bond be recovered from the surety:
n after notice and summary hearing in the same action.
Recovery upon the counter bond –
n Where to file:
n to the court in which the action is pending
n Note: there shall be due notice and hearing before the court shall order the
setting aside or the corresponding discharge of the attachment if it appears
that it was improperly or irregularly issued or enforced, or that the bond
is insufficient, or that the attachment is excessive, and the defect is not
cured forthwith.
Recovery upon the counter bond –
n Serve such affidavit upon the sheriff while the latter has possession of the
attached property
n serve a copy thereof upon the attaching party
n Upon receipt, the sheriff shall not be bound to KEEP the property
under attachment, UNLESS:
n the attaching party or his agent, on demand of the sheriff, shall file a
BOND to indemnify the third-party claimant
Third party Claim
n Sheriff shall not be liable for damages for taking or keeping if:
n bond is filed
n however, nothing shall prevent such claimant or any third person from
vindicating his claim to the property, or prevent the attaching party from
claiming damages against a third-party claimant who filed a frivolous or
plainly spurious claim, in the same or a separate action.
n when the writ of attachment is in favor of the RP, or any duly officer
representing it;
n in the above situation, the filing of such bond is not be required;
n and in case the sheriff is sued for damages as a result of attachment, HE
SHALL be represented by the Solicitor General, and if held liable
therefore, the actual damages adjudged by the court shall be paid by the
National Treasure out of the funds to be appropriated for the purpose.
Rural Bank of Sta. Barbara v. Manila Mission of Church of Jesus
Christ, August 19,
2009
n The filing by respondent of the Motion to Release Property from Attachment was made on the
advice of the Sheriff upon whom respondent served its Affidavit of Title and Ownership.
Respondent should not be faulted for merely heeding the Sheriffs advice. Apparently, the Sheriff,
instead of acting upon the third-party claim of respondent on his own, would rather have some
direction from the RTC. Indeed, the Sheriff is an officer of the RTC and may be directed by the
said court to allow the third-party claim of respondent. Therefore, the filing of the Motion in
question can be deemed as a mere continuation of the third-party claim of respondent, in the form
of its Affidavit of Title and Ownership, served upon the Sheriff, in accord with the first paragraph of
Section 14, Rule 57 of the Rules of Court.
n
n Alternatively, we may also consider the Motion to Release Property from Attachment, filed by
respondent before the RTC, as a Motion for Intervention in Civil Case No. D-10583, pursuant to
the second paragraph of Section 14, Rule 56, in relation to Rule 19 of the Rules of Court.
Respondent, to vindicate its claim to the subject property, may intervene in the same case, i.e.,
Civil Case No. D-10583, instituted by petitioner against the spouses Soliven, in which the said
property was attached. Respondent has the personality to intervene, as it is so situated as to be
adversely affected by a distribution or other disposition of property in the custody of the court or of
an officer thereof.[if !supportFootnotes][5][endif] The RTC, in acting upon and granting the Motion to
Release Property from Attachment in its Order dated 9 October 1995, is deemed to have allowed
respondent to intervene in Civil Case No. D-10583.
Disposition
n proper hearing
n The appellate court may allow the application to be heard and decided by
the trial court.
Sec.20. Claim for damages on account of improper, irregular or
excess attachment –
n For such wrongful preliminary attachment, plaintiffs may be held liable for
damages. However, Equitable is entitled only to such damages as its
evidence would allow, for the wrongfulness of an attachment does not
automatically warrant the award of damages. The debtor still has the burden
of proving the nature and extent of the injury that it suffered by reason of the
wrongful attachment.
n The Court has gone over the records and found that Equitable has duly
proved its claim for, and is entitled to recover, actual damages. In order to
lift the wrongful attachment of Equitables properties, the bank was
compelled to pay the total amount of P30,204.26 in premiums for a counter-
bond.
n Can Z secure such an attachment granting that the averments of his petition
are sufficient? Reasons.
n Suggested answer:
n The attachment cannot be obtained. The property sought to be attached is
actually the property of the corporation which is not the defendant in the case.
The corporation has a personality separate and distinct from that of its
stockholders.
n Under the rules, a plaintiff or any proper party may have the PROPERTY OF
THE ADVERSE PARTY attached as security for the satisfaction of any
judgment that may be recovered later.
Bar 1982 –
n Edward filed a complaint for accounting against Liza for accounting of the
money received by her as administratix of Edward s hacienda. In his
complaint, Edward prayed for preliminary attachment, alleging that Liza was
about to depart from the philippines. Attached to the complaint was an
affidavit executed by Marilyn to the effect that Liza told her that she, Liza,
was planning to leave for Singapore in a few days. If you were the judge, would
you grant the prayer for preliminary attachment?
Bar 1982 –
Suggested answer:
n Not grant the prayer for preliminary attachment. The application should show
that the defendant s departure from the Philippines must be with the
corresponding intent to defraud the creditors. This fact was not alleged in the
application for the issuance of the writ of preliminary attachment.
n Would grant the prayer for preliminary attachment because this would fall
under property embezzled by a person in a fiduciary capacity under sec.1(b) of
rule 57. Here, intent to defraud need not be shown because the act of Liza is
already fraudulent.c
Bar 1983 –
n Daniel Chan owns a house and lot at Forbes Park, Makati, where his wife and
children reside, he is the chief executive officer of various family corporation
where he owns 20% of the respective capital stocks. These family corporations
owe several banks the total sum of 2.5 billion, with Chan as a solidary co-
debtor.
n After Chan has carefully manipulated the finances of the family corporations
and diverted their funds to his account in a swiss bank, he flees from the
philippines and now resident at 127 Rue Duphine, Zurich, Switzerland. The
banks concerned now retains the services of Atty. Ramon Castillo for the
purpose of filing a suit in the Philippines against Daniel Chan on his
obligations as a solidiary co-debtor on the loans of the family corporations.
One of the procedural problems facing Atty. Castillo is the method of effecting
a valid service of summons upon Daniel Chan, now residing in Switzerland, to
enable the Philippine courts to acquire jurisdiction over his person.
n Describe the remedies and procedure, and the supporting grounds thereof that
Atty. Castillo should follow as would enable him to effect a valid service
summons on Daniel Chan.
Bar 1983 –
n Suggested answer:
n Atty. Castillo should file an action against Daniel Chan for collection of a
sum of money with an application for a writ of preliminary attachment if
he has properties in the Philippines. The writ of attachment is required in
order to convert the action in personam into an action quasi in rem. In this
kind of action, jurisdiction over the person of the defendant is not
required. What is required is jurisdiction over the res which could be
obtained by the attachment. Summons by publication or other modes of
exterritorial service of summons would then be served upon him with
leave of court following the procedure under Sec. 15 of Rule 14 of the
Rules of court.
Bar 1999 –
n GARNISHMENT –
n is a levy on debts due the judgment obligor or defendant and other credits,
including bank deposits, royalties and other personal property not capable
of manual delivery under a writ of execution or a writ of attachment.
n Kind of attachment in which plaintiff seeks to subject either property of
the defendant in the hands of a third person called the garnishee, to his
claim or the money which said third person owes the defendant
n Services of summons is not required to bind the garnishee
Bar 1999; 1975 – kinds of attachment
n Levy on execution –
n Is a writ issued by the court after judgment by which the property of the
judgment obligor is taken into the custody of the court before the sale of
the property on execution for the satisfaction of a final judgment.
n It is the preliminary step to the sale on execution of the property of the
judgment debtor
Bar 2000 –
n Suggested Answer:
n He may avail of the remedy called terceria by making an affidavit of his
title thereto or his right to possession thereof, stating the grounds of such
right or title. The affidavit must be served upon the sheriff and the
attaching party (sec.16, Rule 57)
n Upon service of the affidavit upon him, the sheriff shall not be bound to
keep the property under attachment except if the attaching party files a
bond approved by the court. The sheriif shall not be liable for damages for
the taking or keeping of the property, if such bond shall be filed (sec.14,
Rule 57)
n The third party claimant is not precluded under sec.14 of rule 57 from
vindicating his claim to the property in the same or in a separate action.
Thus, he may file a separate action to nullify the levy with damages
resulting from the unlawful levy and seizure. This action may be totally
distinct action from the former case.
Bar 1991 –
n May the court issue the writ immediately upon filing of the complaint and
before the service of summons?
n If service of summons is indispensable before the writ is issued, is hearing
on the application necessary?
n If the writ is issued and X filed a motion to quash the attachment, may the
motion be granted ex parte?
Bar 1991 –
n Suggested Answer
n The writ may be issued upon the filing of the complaint and even before
the service of summons upon the defendant (sec. 1 Rule 57)
n A hearing on the application is not necessary. The application for the writ
need not be heard. It may be issued ex parte. The issuance of summons is
not even indispensable before the writ is issued.
n The motion to quash may not be granted ex part. A hearing is necessary
(sec.12,13, rule 57)
Bar 1978
n X filed a complaint in the CFI against Y for the recovery of a sum of
money. X at the same time also prayed for the issuance of an order of
preliminary attachment against Y, and included in his affidavit, among
others, that Y was disposing of his properties with intent to defraud X. the
court immediately issued the writ of preliminary attachment ex parte. Y
move to discharge the attachment on the ground that it was irregularly
issued, in that Y was not notified at all of such application or about the
time and place of the hearing thereof, in gross violation of the Rules and
his right to due process of law.
n Suggested answer:
n Y s motion to discharge the attachment must be denied. A writ of
preliminary attachment may be issued at the commencement of the action
and can be issued ex parte.