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DAVAO LIGHT AND POWER VS CA "an action for money or property

embezzled or fraudulently misapplied or


 ample modes of recourse against a preliminary converted to his own use by a public
attachment are secured by law to the defendant. officer, or an officer of a corporation, or an
 The relative ease with which a preliminary attorney, factor, broker, agent, or clerk, in
attachment may be obtained is matched and the course of his employment as such, or
paralleled by the relative facility with which the by any other person in a fiduciary capacity,
attachment may legitimately be prevented or or for a willful violation of duty." (Sec. 1
frustrated. [b], Rule 57), or "an action against a party
who has been guilty of fraud m contracting
the debt or incurring the obligation upon
 These modes of recourse against preliminary
which the action is brought" (Sec. 1 [d],
attachments granted by Rule 57 were discussed at
Rule 57), the defendant is not allowed to
some length by the separate opinion in Mindanao file a motion to dissolve the attachment
Savings & Loans Asso. Inc. v. CA., supra. under Section 13 of Rule 57 by offering to
show the falsity of the factual averments in
 That separate opinion stressed that there are two the plaintiff's application and affidavits on
(2) ways of discharging an attachment:  first, by which the writ was based — and
the posting of a counterbond; and second, by a consequently that the writ based thereon
showing of its improper or irregular issuance. had been improperly or irregularly issued
(SEE Benitez v. I.A.C., 154 SCRA 41) —
o 1.0. The submission of a counterbond is an the reason being that the hearing on such
efficacious mode of lifting an attachment a motion for dissolution of the writ would
already enforced against property, or even be tantamount to a trial of the merits of
of preventing its enforcement altogether. the action.
 In other words, the merits of the action
o 1.1. When property has already been seized would be ventilated at a mere hearing of a
under attachment, the attachment may be motion, instead of at the regular trial.
discharged upon counterbond in accordance Therefore, when the writ of attachment is
with Section 12 of Rule 57. of this nature, the only way it can be
dissolved is by a counterbond
o 1.2. But even before actual levy on property, (b) Effect of the dissolution of a preliminary
seizure under attachment may be prevented attachment on the plaintiffs attachment bond:
also upon counterbond. The defendant need
not wait until his property is seized before  The dissolution of the preliminary attachment
seeking the discharge of the attachment by a upon security given, or a showing of its
counterbond. This is made possible by Section irregular or improper issuance, does not of
5 of Rule 57. course operate to discharge the sureties on
plaintiff's own attachment bond.
 The reason is simple. That bond is "executed
o 2.0. Aside from the filing of a counterbond, a
to the adverse party, conditioned that the
preliminary attachment may also be lifted or (applicant) will pay all the costs which may be
discharged on the ground that it has been adjudged to the adverse party and all damages
irregularly or improperly issued, in accordance which he may sustain by reason of the
with Section 13 of Rule 57. Like the first, this attachment, if the court shall finally adjudge
second mode of lifting an attachment may be that the applicant was not entitled thereto"
resorted to even before any property has (SEC. 4, Rule 57).
been levied on. Indeed, it may be availed  Hence, until that determination is made, as to
of after property has been released from a the applicant's entitlement to the attachment,
levy on attachment,  as is made clear by said his bond must stand and cannot be with-
Section 13
drawn.

 This is so because "(a)s pointed out in Calderon  It goes without saying that whatever be the acts
v. I.A.C, The attachment debtor cannot be deemed done by the Court prior to the acquisition of
to have waived any defect in the issuance of the jurisdiction over the person of defendant, as above
attachment writ by simply availing himself of one indicated — issuance of summons, order of
way of discharging the attachment writ, instead of attachment and writ of attachment (and/or
the other. appointments of guardian ad litem, or grant of
authority to the plaintiff to prosecute the suit as a
 Moreover, the filing of a counterbond is a speedier pauper litigant, or amendment of the complaint by
way of discharging the attachment writ maliciously the plaintiff as a matter of right without leave of
sought out by the attaching creditor instead of the court  — and however valid and proper they might
other way, which, in most instances would require otherwise be, these do not and cannot bind and
presentation of evidence in a fullblown trial on the affect the defendant until and unless jurisdiction
merits, and cannot easily be settled in a pending over his person is eventually obtained by the court,
incident of the case."  either by service on him of summons or other
coercive process or his voluntary submission to the
 It may not be amiss here to reiterate other related court's authority.
principles dealt with in Mindanao Savings & Loans  Hence, when the sheriff or other proper officer
Asso. Inc. v.C.A, to wit: commences implementation of the writ of
attachment, it is essential that he serve on the
(a) When an attachment may not be dissolved defendant not only a copy of the applicant's
by a showing of its irregular or improper affidavit and attachment bond, and of the order of
issuance: attachment, as explicity required by Section 5 of
Rule 57, but also the summons addressed to said
 (W)hen the preliminary attachment is
defendant as well as a copy of the complaint and
issued upon a ground which is at the same
order for appointment of guardian ad litem, if any,
time the applicant's cause of action; e.g.,
as also explicity directed by Section 3, Rule 14 of  The execution of a mortgage in favor of another
the Rules of Court. creditor is not conceived by the Rules as one of the
 Service of all such documents is indispensable not means of fraudulently disposing of one's property.
only for the acquisition of jurisdiction over the  By mortgaging a piece of property, a debtor
person of the defendant, but also upon merely subjects it to a lien but ownership thereof
considerations of fairness, to apprise the defendant is not parted with.
of the complaint against him, of the issuance of a  Furthermore, the inability to pay one's creditors is
writ of preliminary attachment and the grounds not necessarily synonymous with fraudulent intent
therefor and thus accord him the opportunity to not to honor an obligation
prevent attachment of his property by the posting
of a counterbond in an amount equal to the  Consequently, when petitioners filed a motion for
plaintiff's claim in the complaint pursuant to the reconsideration of the order directing the
Section 5 (or Section 12), Rule 57, or dissolving it issuance of the writ of attachment, respondent
by causing dismissal of the complaint itself on any Judge should have considered it as a motion for
of the grounds set forth in Rule 16, or the discharge of the attachment and should have
demonstrating the insufficiency of the applicant's conducted a hearing or required submission of
affidavit or bond in accordance with Section 13, counter-affidavits from the petitioners, if only to
Rule 57.
gather facts in support of the allegation of fraud
(Jopillo, Jr. v. Court of Appeals. This is what
Section 13 of Rule 57 mandates.
ADLAWAN VS TORRES  This procedure should be followed because, as the
Court has time and again said, attachment is a
 petitioners alleged that respondent Judge gravely harsh, extraordinary and summary remedy and the
abused his discretion in ordering the issuance of rules governing its issuance must be construed
the writs of preliminary attachment inasmuch as strictly against the applicant.
the real estate mortgage executed by them in  Verily, a writ of attachment can only be granted on
favor of PCIB did not constitute fraudulent concrete and specific grounds and not on general
removal, concealment or disposition of property. averments quoting perfunctorily the words of the
 They argued that granting the mortgage Rules
constituted removal or disposition of property, it  The judge before whom the application is made
was not per se a ground for attachment lacking exercises full discretion in considering the
proof of intent to defraud the creditors of the supporting evidence proffered by the applicant.
defendant.  One overriding consideration is that a writ of
attachment is substantially a writ of execution
except that it emanates at the beginning, instead
 Petitioners contended that in Civil Case No. 21761, of at the termination of the suit 
Branch 11 had ruled that the loan for which the
mortgage was executed was contracted in good
faith, as it was necessary for them to continue
their business operations even after respondent
Aboitiz had stopped giving them financial aid.

 Petitioners also contended that respondent Judge


exceeded his jurisdiction when he issued the Order
of December 12, 1983, without first hearing the
parties on the motion for attachment and the
motion to dissolve the attachment. ‘

 Moreover, they argued that respondent Judge


gravely abused his discretion in proceeding with
the case, notwithstanding that his attention had
been called with regard to the pendency of G.R.
No. 63225 in this Court

HELD
 It is evident from said affidavit that the prayer for
attachment rests on the mortgage by petitioners of
11 parcels of land in Cebu, which encumbrance
respondent Aboitiz considered as fraudulent
concealment of property to its prejudice.
 We 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 Aboitiz.
 "[T]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
required by law to be stated therein, there is no
jurisdiction and the proceedings are null and void."
 Bare allegation that an encumbrance of a property
is in fraud of the creditor does not suffice.
 Factual bases for such conclusion must be clearly
averred.

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