Republic of the Philippines financial institutions, and levied on attachment a condominium
SUPREME COURT unit and a real property belonging to petitioner Oñate.
Manila
SECOND DIVISION
G.R. No. 107303 February 21, 1994
EMMANUEL C. OÑATE and ECON HOLDINGS CORPORATION,
petitioners,
vs.
HON. ZUES C. ABROGAR, as Presiding Judge of Branch 150 of
the Regional Trial Court of Makati, and SUN LIFE ASSURANCE
COMPANY OF CANADA, respondents.
G.R. No. 107491 February 21, 1994
BRUNNER DEVELOPMENT CORPORATION, petitioner,
vs.
HON. ZUES C. ABROGAR, as Presiding Judge of Branch 150 of
the Regional Trial Court of Makati, and SUN LIFE ASSURANCE
COMPANY OF CANADA, respondents.
Florante A. Bautista for petitioner in G.R. No. 107303.
Andin & Andin Law Offices for Brunner Development Corporation.
Quasha, Asperilla, Ancheta, Pena & Nolasco for Sun Life Assurance
Company of Canada.
NOCON, J.:
These are separate petitions for certiorari with a prayer for
temporary restraining order filed by Emmanuel C. Oñate and
Econ Holdings Corporation (in G.R. No. 107303), and Brunner
Development Corporation (in G.R. No. 107491), both of which
assail several orders issued by respondent Judge Zues C.
Abrogar in Civil Case No. 91-3506.
The pertinent facts are as follows: On December 23, 1991,
respondent Sun Life Assurance Company of Canada (Sun Life,
for brevity) filed a complaint for a sum of money with a prayer
for the immediate issuance of a writ of attachment against
petitioners, and Noel L. Diño, which was docketed as Civil Case
No. 91-3506 and raffled to Branch 150 of the RTC Makati,
presided over by respondent Judge. The following day,
December 24, 1991, respondent Judge issued an order granting
the issuance of a writ of attachment, and the writ was actually
issued on December 27, 1991.
On January 3, 1992, upon Sun Life's ex-parte motion, the trial
court amended the writ of attachment to reflect the alleged
amount of the indebtedness. That same day, Deputy Sheriff
Arturo C. Flores, accompanied by a representative of Sun Life,
attempted to serve summons and a copy of the amended writ
of attachment upon petitioners at their known office address at
108 Aguirre St., Makati but was not able to do so since there
was no responsible officer to receive the same.1 Nonetheless,
Sheriff Flores proceeded, over a period of several days, to serve
notices of garnishment upon several commercial banks and
Summons was eventually served upon petitioners on January 9,
1992, while defendant Diño was served with summons on
January 16, 1992.
On January 21, 1992, petitioners filed an "Urgent Motion to
Discharge/Dissolve Writ of Attachment." That same day, Sun
Life filed an ex-parte motion to examine the books of accounts
and ledgers of petitioner Brunner Development Corporation
(Brunner, for brevity) at the Urban Bank, Legaspi Village Branch,
and to obtain copies thereof, which motion was granted by
respondent Judge. The examination of said account took place
on January 23, 1992. Petitioners filed a motion to nullify the
proceedings taken thereat since they were not present.
On January 30, 1992, petitioners and their co-defendants filed a
memorandum in support of the motion to discharge
attachment. Also on that same day, Sun Life filed another
motion for examination of bank accounts, this time seeking the
examination of Account No. 0041-0277-03 with the Bank of
Philippine Islands (BPI) — which, incidentally, petitioners claim
not to be owned by them — and the records of Philippine
National Bank (PNB) with regard to checks payable to Brunner.
Sun Life asked the court to order both banks to comply with the
notice of garnishment.
On February 6, 1992, respondent Judge issued an order (1)
denying petitioners' and the co-defendants' motion to
discharge the amended writ of attachment, (2) approving Sun
Life's additional attachment, (3) granting Sun Life's motion to
examine the BPI account, and (4) denying petitioners' motion
to nullify the proceedings of January 23, 1992.
On March 12, 1992, petitioners filed a motion for reconsideration
of the February 6, 1992 order. On September 6, 1992,
respondent Judge denied the motion for reconsideration.
Hence, the instant petitions. Petitioners' basic argument is that
respondent Judge had acted with grave abuse of discretion
amounting to lack or in excess of jurisdiction in (1) issuing ex
parte the original and amended writs of preliminary attachment
and the corresponding notices of garnishment and levy on
attachment since the trial court had not yet acquired
jurisdiction over them; and (2) allowing the examination of the
bank records though no notice was given to them.
We find both petitions unmeritorious.
Petitioners initially argue that respondent Judge erred in
granting Sun Life's prayer for a writ of preliminary attachment
on the ground that the trial court had not acquired jurisdiction
over them. This argument is clearly unavailing since it is well-
settled that a writ of preliminary attachment may be validly
applied for and granted even before the defendant is
summoned or is heard from.2 The rationale behind this rule was
stated by the Court in this wise:
A preliminary attachment may be defined, paraphrasing the
Rules of Court, as the provisional remedy in virtue of which a
plaintiff or other proper party may, at the commencement of
the action or any time thereafter, have the property of the
adverse party taken into the custody of the court as security for
the satisfaction of any judgment that may be recovered. It is a
remedy which is purely statutory in respect of which the law
requires a strict construction of the provisions granting it.
Withal no principle, statutory or jurisprudential, prohibits its
issuance by any court before acquisition of jurisdiction over the
person of the defendant.
Rule 57 in fact speaks of the grant of the remedy "at the
commencement of the action or at any time thereafter." The
phrase "at the commencement of the action," obviously refers
to the date of the filing of the complaint — which, as
abovepointed out, its the date that marks "the commencement
of the action;" and the reference plainly is to a time before
summons is served on the defendant or even before summons
issues. What the rule is saying quite clearly is that after an
action is properly
commenced — by the filing of the complaint and the payment
of all requisite docket and other fees — the plaintiff may apply
for and obtain a writ of preliminary attachment upon fulfillment
of the pertinent requisites laid down by law, and that he may do
so at any time, either before or after service of summons on the
defendant. And this indeed, has been the immemorial practice
sanctioned by the courts: for the plaintiff or other proper party
to incorporate the application for attachment in the complaint
or other appropriate pleading (counterclaim, cross-claim, third-
party claim) and for the Trial Court to issue the writ ex-parte at
the commencement of the action if it finds the application
otherwise sufficient in form and substance.3
Petitioners then contended that the writ should have been
discharged since the ground on which it was issued — fraud in
contracting the obligation — was not present. This cannot be
considered a ground for lifting the writ since this delves into the
very complaint of the Sun Life. As this Court stated in Cuatro v.
Court of Appeals:4
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 applicant's 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 the motion (Davao Light and Power Co., Inc. vs.
Court of Appeals, supra, The Consolidated Bank and Trust Corp.
(Solidbank) vs. Court of Appeals, 197 SCRA 663 [1991]).
In the present case, one of the allegation in petitioner's
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
checks for payment of the stipulated interest (Annex "B"). The
issue of fraud, then, is clearly within the competence of the
lower court in the main action.5
The fact that a criminal complaint for estafa filed by Sun Life
against the petitioners was dismissed by the Provincial
Prosecutor of Rizal for Makati on April 21, 1992 and was upheld
by the Provincial Prosecutor on July 13, 1992 is of no moment
since the same can be indicative only of the absence of criminal
liability, but not of civil liability. Besides, Sun Life had elevated
the case for review to the Department of Justice, where the
case is presently pending.
Finally, petitioners argue that the enforcement of the writ was
invalid since it undisputedly preceded the actual service of
summons by six days at most. Petitioners cite the decisions in
Sievert vs. Court of Appeals, et al.6 and BAC Manufacturing and
Sales Corp. vs. Court of Appeals, et al.,7 wherein this Court held
that enforcement of the writ of attachment can not bind the
defendant in view of the failure of the trial court to acquire
jurisdiction over the defendant through either summons or his
voluntary appearance.
We do not agree entirely with petitioners. True, this Court had
held in a recent decision that the enforcement of writ of
attachment may not validly be effected until and unless
proceeded or contemporaneously accompanied by service of
summons.8
But we must distinguish the case at bar from the Sievert and
BAC Manufacturing cases. In those two cases, summons was
never served upon the defendants. The plaintiffs therein did not
even attempt to cause service of summons upon the
defendants, right up to the time the cases went up to this
Court. This is not true in the case at bar. The records reveal that
Sheriff Flores and Sun Life did attempt a contemporaneous
service of both summons and the writ of attachment on
January 3, 1992, but we stymied by the absence of a responsible
officer in petitioners' offices. Note is taken of the fact that
petitioners Oñate and Econ Holdings admitted in their answer9
that the offices of both Brunner Development Corporation and
Econ Holdings were located at the same address and that
petitioner Oñate is the President of Econ Holdings while
petitioner Diño is the President of Brunner Development
Corporation as well as a stockholder and director of Econ
Holdings.
Thus, an exception to the established rule on the enforcement
of the writ of attachment can be made where a previous
attempt to serve the summons and the writ of attachment
failed due to factors beyond the control of either the plaintiff or
the process server, provided that such service is effected within
a reasonable period thereafter.
Several reasons can be given for the exception. First, there is a
possibility that a defendant, having been alerted of plaintiffs
action by the attempted service of summons and the writ of
attachment, would put his properties beyond the reach of the
plaintiff while the latter is trying to serve the summons and the
writ anew. By the time the plaintiff may have caused the service
of summons and the writ, there might not be any property of
the defendant left to attach.
Second, the court eventually acquired jurisdiction over the
petitioners six days later. To nullify the notices of garnishment
issued prior thereto would again open the possibility that
petitioners would transfer the garnished monies while Sun Life
applied for new notices of garnishment.
Third, the ease by which a writ of attachment can be obtained is SO ORDERED.
counter-balanced by the ease by which the same can be
discharged: the defendant can either make a cash deposit or Narvasa, C.J., Padilla, Regalado and Puno, JJ., concur.
post a counter-bond equivalent to the value of the property
attached. 10 The petitioners herein tried to have the writ of
attachment discharged by posting a counter-bond, the same
was denied by respondent Judge on the ground that the
#Footnotes
amount of the counter-bond was less than that of Sun Life's
bond.
1 Sheriffs Return, Rollo in G.R. No. 107303, pp. 47-48.
II.
2 Davao Light & Power., Inc. vs. Court of Appeals, et al., G.R. No.
93262, 204 SCRA 343 (1991); Cuartero vs. Court of Appeals, et
Petitioners' second ground assail the acts of respondent Judge
al., G.R. No. 102448, 212 SCRA 260 (1992).
in allowing the examination of Urban Banks' records and in
ordering that the examination of the bank records of BPI and
3 Davao Light & Power Co., Inc. vs. Court of Appeals, supra, 204
PNB as invalid since no notice of said examinations were ever
given them. Sun Life grounded its requests for the examination SCRA 343, 349-350. Citations omitted.
of the bank accounts on Section 10, Rule 57 of the Rules of
Court, which provided, to wit: 4 212 SCRA 260.

Sec. 10. Examination of party whose property is attached and 5 Id., at 267.
persons indebted to him or controlling his property; delivery of
property to officer. — Any person owing debts to the party 6 G.R. No. L-84034, 168 SCRA 692 (1988).
whose property is attached or having in his possession or under
his control any credit or other personal property belonging to 7 G.R. No. 96748, 200 SCRA 130 (1991).
such party, may be required to attend before the court in which
the action is pending, or before a commissioner appointed by 8 Id., p. 357.
the court and be examined on oath respecting the same. The
party whose property is attached may also be required to 9 Rollo in G.R. No. 107303, p. 90.
attend for the purpose of giving information respecting his
property, and may be examined on oath. The court may, after
10 Rule 57, sec. 12, Rules of Court.
such examination, order personal property capable of manual
delivery belonging to him, in the possession of the person so
required to attend before the court, to be delivered to the clerk
or court, sheriff, or other proper officer on such terms as may
be just, having reference to any lien thereon or claim against
the same, to await the judgment in the action.

It is clear from the foregoing provision that notice need only be

given to the garnishee, but the person who is holding property
or credits belonging to the defendant. The provision does not
require that notice be furnished the defendant himself, except
when there is a need to examine said defendant "for the
purpose of giving information respecting his property.

Furthermore, Section 10 Rule 57 is not incompatible with

Republic Act No. 1405, as amended, "An Act Prohibiting
Disclosure or Inquiry Into, Deposits With Any Banking
Institution and Providing Penalty Therefore," for Section 2
therefore provides an exception "in cases where the money
deposited or invested is the subject matter of the litigation."

The examination of the bank records is not a fishing expedition,

but rather a method by which Sun Life could trace the proceeds
of the check it paid to petitioners.

WHEREFORE, the instant petitions are hereby DISMISSED. The

temporary restraining order issued on June 28, 1993 is hereby
lifted.