Scarp Digests

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

*G.R. No. 11+723. February 23, 2001]

PHILIPPINE BANK F ! ""#NI!A$I N%, petitioner , vs . H N. ! #R$ FAPPEAL% a&' FILIPINA% $E $ILE "ILL%, IN!., respondents .

( E ! I % I N

-NARE% %AN$IAG , J ./

Before us are consolidated petitions for review both filed by Philippine Bank ofCommunications; one against the May 24 !""4 #ecision of respondent Court of

$ppeals in C$%&'(' )P *o' +2,-+ [!. and the other against its March +! !""/ #ecisionin C$%&'(' )P *o' +20-2' [2. Both #ecisions set aside and nullified the $ugust !! !""+1rder [+. of the (egional rial Court of Manila Branch 0 granting the issuance of a writof preliminary attachment in Civil Case *o' "!%/-0!!'

he case commenced with the filing by petitioner on $pril , !""! of a Complaintagainst private respondent Bernardino 3illanueva private respondent ilipinas e5tileMills and one )ochi 3illanueva 6now deceased7 before the (egional rial Court ofManila' 8n the said Complaint petitioner sought the payment of P2 244 "2-'+9representing the proceeds or value of various te5tile goods the purchase of which wascovered by irrevocable letters of credit and trust receipts e5ecuted by petitioner withprivate respondent ilipinas e5tile Mills as obligor; which in turn were covered bysurety agreements e5ecuted by private respondent Bernardino 3illanueva and )ochi3illanueva' 8n their $nswer private respondents admitted the e5istence of the surety

agreements and trust receipts but countered that they had already made payments onthe amount demanded and that the interest and other charges imposed by petitionerwere onerous'

1n May +! !""+ petitioner filed a Motion for $ttachment [4. contending thatviolation of the trust receipts law constitutes estafa thus providing ground for theissuance of a writ of preliminary attachment; specifically under paragraphs :b and :d)ection ! (ule /0 of the (evised (ules of Court' Petitioner further claimed thatattachment was necessary since private respondents were disposing of their propertiesto its detriment as a creditor' inally petitioner offered to post a bond for the issuanceof such writ of attachment'

he Motion was duly opposed by private respondents and after the filing of a (eplythereto by petitioner the lower court issued its $ugust !! !""+ 1rder for the issuanceof a writ of preliminary attachment conditioned upon the filing of an attachmentbond' ollowing the denial of the Motion for (econsideration filed by private respondent

ilipinas e5tile Mills both private respondents filed separate petitionsfor certiorari before respondent Court assailing the order granting the writ of preliminaryattachment'

Both petitions were granted albeit on different grounds' 8n C$%&'(' )P *o' +20-2respondent Court of $ppeals ruled that the lower court was guilty of grave abuse ofdiscretion in not conducting a hearing on the application for a writ of preliminaryattachment and not reence 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 preliminaryattachment in spite of the allegations of fraud embe==lement and misappropriation ofthe proceeds or goods entrusted to the private respondents;
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2' #isregarding the fact that that the failure of M8 and 3illanueva to remit theproceeds or return the goods entrusted in violation of private respondents@ fiduciaryduty as entrustee constitute embe==lement or misappropriation which is a valid groundfor the issuance of a writ of preliminary attachment' [-.

Ae find no merit in the instant petitions'o 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 affidavitdid not sufficiently establish the grounds relied upon in applying for the writ ofpreliminary attachment'

he Motion for $ttachment of petitioner states that ?

!' he instant case is based on the failure of defendants as entrustee to pay or remitthe proceeds of the goods entrusted by plaintiff to defendant as evidenced by the trustreceipts 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' nder )ection !+ of P'#' !!/ as amended violation of the trust receipt lawconstitute6s7 estafa 6fraud and or 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 ofpreliminary attachment under )ection ! of (ule /0 of the (evised (ules of Courtparticularly under sub%paragraphs :b and :d i'e' for embe==lement or fraudulentmisapplication or conversion of money 6proceeds7 or property 6goods entrusted7 by anagent 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' he issuance of a writ of preliminary attachment is likewise urgently necessary asthere e5ist6s7 no sufficient security for the satisfaction of any Dudgment that may berendered against the defendants as the latter appears to have disposed of theirproperties 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 Courtas a condition to the issuance of a writ of preliminary attachment against the propertiesof the defendants'

)ection !6b7 and 6d7 (ule /0 of the then controlling (evised (ules of Courtprovides to wit ?

)EC 81* !' Grounds upon which attachment may issue ' ? $ plaintiff or any properparty may at the commencement of the action or at any time thereafter have theproperty of the adverse party attached as security for the satisfaction of any Dudgmentthat may be recovered in the following casesF

5 5 5 5 5 5 5 5 5

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 attorneyfactor broker agent or clerk in the course of his employment as such or by any otherperson in a fiduciary capacity or for a willful violation of duty;

5 5 5 5 5 5 5 5 5

6d7 8n an action against a party who has been guilty of fraud in contracting the debt orincurring the obligation upon which the action is brought or in concealing or disposingof the property for the taking detention or conversion of which the action is brought;

5 5 5 5 5 5 5 5 5
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Ahile the Motion refers to the transaction complained of as involving trust receiptsthe violation of the terms of which is $ F

!' 8 am the $ssistant Manager for Central Collection nits $c


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he 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 theissuance of the writ of attachment prayed for'

Ae also agree with respondent Court of $ppeals in C$%&'(' )P *o' +20-2 that thelower court should have conducted a hearing and re


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*G.R. No. 123358. February 1, 2000]

F!- ! N%$R#!$I N GR #P, IN!., a&' FRAN!I% !. -#, petitioners , vs . $HE! #R$ F APPEAL%, $HE H N. < %E !. (E LA RA"A, Pre ' & ighways' his 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 toHift $ttachment' [!. 8t however reduced and confined the attachment to receivables duepetitioners from the andang )ora commonwealth lyover proDect'

)ubse


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Petition was however denied on Guly +! !""/; [-. so was petitionersJ Motion for(econsideration' [0.

>ence the instant Petition'

8t is evident that the onor' ( "+, # /uly 00! pp. 12-13 7

5 5 5 5 5 5 5 5 5

Ahat about these officials of the #epartment of Public >ighwayswhat would they do to proDect their sub alleged proDectL

$ )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 theywill soon give me another proDect ' ' ' ( "+, # /uly 00!, p. 44$ [,.
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$ cursory reading of the above%cited testimony however readily shows that saidreassurance from the #PA> officials came not at the inception of the obligation orcontract but during its performance' 1n the other hand the fraud of which petitionersare accused of and which was the basis for the issuance of the


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of the writ would be tantamount to a trial on the merits' 8n other words themerits of the action would be ventilated at a mere hearing of a motion;instead of the regular trial' herefore when the writ of attachment is of thisnature the only way it can be dissolved is by a counterbond'K

Ae now come to the issue of whether or not petitioner rancis Iu should remain asparty%defendant' Petitioners argue that since the transactions were corporation tocorporation only petitioner rancis Iu should be dropped as party%defendantconsidering the hornbook law that corporate personality is a shield against personalliability of its officers' Ae agree that petitioner rancis Iu cannot be made liable in hisindividual capacity if he indeed entered into and signed the contract in his officialcapacity as President in the absence of stipulation to that effect due to the personalityof the corporation being separate and distinct from the persons composing it'[!2. >owever while we agree that petitioner rancis Iu cannot be held solidarily liablewith petitioner corporation merely because he is the President thereof and was involvedin the transactions with private corporation we also note that there e5ists instances

when corporate officers may be held personally liable for corporate acts' )uche5ceptions were outlined in r t "erc ntile, Inc. vs. Court of !ppe ls, [!+. asfollows %%

KPersonal liability of a corporate director trustee or officer along 6althoughnot necessarily7 with the corporation may so validly attach as a rule onlywhen %

!' >e assents 6a7 to a patently unlawful act of the corporation or 6b7 forbad faith or gross negligence in directing its affairs or 6c7 for conflict ofinterest resulting in damages to the corporation its stockholders or other

persons;2' >e consents to the issuance of watered down stocks or who havingknowledge thereof does not forthwith file with the corporate secretary hiswritten obDection thereto;

+' >e agrees to hold himself personally and solidarily liable with thecorporation; or

4' >e is made by a specific provision of law to personally answer for hiscorporate action'K

he attendance of these circumstances however cannot be determined at this stageand should properly be threshed out during the trial on the merits' )tated differentlywhether or not petitioner rancis Iu should be held personally and solidarily liable withpetitioner corporation is a matter that should be left to the trial courtJs discretiondependent as it is on evidence during trial'

;HEREF RE in view of the foregoing the instant Petition is hereby #8)M8))E#' *opronouncement as to costs'

% R(ERE(.
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G.R. No. No . 65+57 58


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writ of preliminary attachment against the property of petitioners upon the filing byrespondent $boiti= of an attachment bond'chanroblesvirtualawlibrary chanrobles virtuallaw library

)ubseis omnibus motion was denied' )ubseE(E 1(E in view of the foregoing this Court rules that the attached properties leftin the custody of private respondent $boiti= and Company 8nc' be returned to petitionerElea=ar 3' $dlawan without preDudice to the outcome of the cases filed by both parties6Rollo p' +247'

(espondent $boiti= filed a motion for reconsideration of the decision contending thatthe replevin case was distinct and separate from the case where the writ of attachment


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was issued' 8t argued that the writ of replevin therefore remained in force as the hird#ivision of the )upreme Court had not found it illegal' he motion was however deniedwith finality in the (esolution of Guly !! !""9'chanroblesvirtualawlibrary chanroblesvirtual law library

ndaunted respondent $boiti= filed a second motion for reconsideration with a prayerthat the dispositive portion of the decision be clarified' 8t asserted that because the writof preliminary attachment was different from the writ of replevin we should rule that theproperty subDect of the latter writ should remain in custodia le*is of the court issuing thesaid writ'chanroblesvirtualawlibrarychanrobles virtual law library

8n the (esolution dated )eptember !9 !""9 the hird #ivision stated that Ktheproperties to be returned to petitioner are only those held by private respondent6$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 hird #ivision ofthis Court was modified to read as followsF

A>E(E 1(E in view of the foregoing this Court rules that the properties in thecustody of the private respondent $boiti= N Company by virtue of the writ of attachmentissued in Civil Case *o' (%2!0-! be returned to the petitioner but properties in thecustody 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'

he #ecision in &'(' *o' -+22/ having become final and e5ecutory entry of Dudgmentwas made on *ovember !/ !""9' his should have terminated the controversybetween petitioners and respondent $boiti= insofar as the )upreme Court wasconcerned but that was not to be' 1n )eptember " !",+ respondent $boiti= filed

against petitioners two complaints for collection of sums of money with prayers for theissuance of writs of attachment in the (egional rail Court Branch 2+ Cebu Citydocketed as Civil Cases *os' CEB%!!,/ and CEB%!!,-' he complaint in Civil Case*o' CEB%!!,/ alleged that petitioner Elea=ar $dlawan 6defendant therein7 was awardeda contract for the construction of the ago #iversion Aorks for the ago (iver 8rrigationProDect by the *ational 8rrigation $dministration and that respondent $boiti= 6plaintifftherein7 loaned him money and e


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Petitioners then filed in Civil Cases *os' CEB%!!,/ and CEB%!!,- urgent motions tohold in abeyance the enforcement of the writs of attachments' hey alleged in the mainthat since their property had been previously attached and said attachment was being


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8* 38EA A>E(E1 8 hereunto set my hand this 24th day of $ugust !",+ at CebuCity Philippines'

6)gd'7($M1* )' (1* 8HH1

$ffiant

6Rollo pp' !0!%!027

8t is evident from said affidavit that the prayer for attachment rests on the mortgage bypetitioners of !! parcels of land in Cebu which encumbrance respondent $boiti=considered as fraudulent concealment of property to its preDudice' Ae find howeverthat there is no factual allegation which may constitute as a valid basis for thecontention that the mortgage was in fraud of respondent $boiti=' $s this Court saidin /ardine- anila 5inance, Inc. v. Court of Appeals, !0! )C($ -+- 6!","7 K[ .he

general rule is that the affidavit is the foundation of the writ and if none be filed or onebe filed which wholly fails to set out some facts re


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A>E(E 1(E the petition is &($* E# and the emporary (estraining 1rder issuedon Ganuary - !",4 is made PE(M$*E* ' (espondent Gudge or whoever is thepresiding Dudge of the (egional rial Court Branch - Cebu City is #8(EC E# toP(1CEE# with the resolution of Civil Cases *os' CEB%!!,/ and CEB%!!,- withdeliberate dispatch'

% R(ERE(.

G.R. No. 8?03? (e e ber 22, 1+88

ALBER$ %IE)ER$, &etitioner vs' ! #R$ F APPEAL%, H N. e simultaneously filed a

written obDection to the Durisdiction of the trial court to hear or act upon the Petition for8ssuance of a Preliminary Arit of $ttachment' 8n this written obDection petitioner prayedfor denial of that Petition for lack of Durisdiction over the person of the petitioner6defendant therein7 upon the ground that since no summons had been served upon himin the main case no Durisdiction over the person of the petitioner had been ac


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his rule would overrule the contention that this Court has no Durisdiction to act on theapplication although if counsel for defendant so desire she is given five 6/7 days fromtoday within which to submit her further position why the writ should not be issued uponthe receipt of which or e5piration of the period the pending incident shall be consideredsubmitted for resolution' 6 nderscoring in the original7 1 chanrobles virtual law library

hereupon on the same day petitioner filed a Petition for certiorari with the Court of $ppeals' 1n !+ Guly !",, the respondent appellate court rendered a decision notableprincipally for its brevity dismissing the Petition' he relevant portion of the Court of

$ppealsJ decision is


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in )ection ! of (ule /0 of the (evised (ules of Court' he issue posed in this casehowever is not to be resolved by determining when an action may be regarded ashaving been commenced a point in time which in any case is not necessarily fi5ed and8dentical regardless of the specific purpose for which the deter' nation is to be made'

he critical time which must be 8dentified is rather when the trial court

ac


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dated !+ Guly !",, are hereby )E $)8#E and $** HHE#' *o pronouncement as tocosts'chanroblesvirtualawlibrary chanrobles virtual law library

% R(ERE(.

G.R. No. 55272 A9r 4 10, 1+8+


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Ramon :uisumbin*, /r. 9 Associates for private respondents.

FERNAN, C.J.*

his is a petition for review on certiorari seeking to reverse and set asideF 6a7 the $ugust2" !",9 decision of the Court of $ppeals 1 in )pecial Proceedings C$%&'(' *o' )P%9""02%( entitled K Impact Corporation, et al. v. ;on.


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#' #efendant corporation (icardo de Heon and Eduardo deHeon have no visible other sufficient security for the claimsought to be enforced by this action of plaintiff other thantheir real and personal properties which are located in etro

anila and in the province of Rizal, &rovince of +ueva =ci7a

or elsewhere ' 6Emphasis supplied7

E' Plaintiffs action against defendant corporation is basedupon documents and therefrom a sufficient cause of actione5ists'

' Plaintiff is willing to post a bond in an amount to be fi5edby the >onorable Court not e5ceeding plaintiffs claim whichwill be conditioned to the effect that plaintiff will pay all thecosts which may be adDudged to the adverse party and alldamages which they may sustain by reason of attachment if

the >onorable Court should finally adDudge that the applicantplaintiff is not entitled thereto' 7

1n the basis of the foregoing allegations the lower court granted G$(#8*EJs petition forthe issuance of a writ of preliminary attachment on 1ctober !- !"0"' 8

1n 1ctober !" !"0" therein defendants filed a motion to set aside the writ ofpreliminary attachment' hey also submitted to the court a 6uo a memorandum insupport of their motion to dissolve the attachment contending that the grounds allegedby the plaintiff in its application for a writ of attachment are not among the groundsspecified under )ection ! of (ule /0; that the defendants have other sufficient security;

that there was no affidavit of merit to support the application for attachment as re


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Ahile we find that the grounds alleged by plaintiff the herein privaterespondent to support its application for preliminary attachment areamong those enumerated in )ection ! of (ule /0 as grounds upon whichan attachment may be issued we are constrained nonetheless to ruleagainst the regularity or legality of the attachment issued by respondent

Court because there was no allegation made by plaintiff in its applicationfor the issuance of a writ of attachment to the effect Jthat there is nosufficient security for the claim sought to be enforced by the action andthe amount due to the applicant or the value of the property on the basisof which is entitled to recover is as much as the sum for which the order isgranted above all legal counterclaims a re


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presume that the lower court having in mind such evidence ordered the attachmentaccordingly'K 16

8n sharp contrast in the case at bar where the records undeniably reveal thatF 6!7 thecomplaint was filed on )eptember 2, !"0"; 17 627 the writ of preliminary attachment

was issued on 1ctober !- !"0"; 18 6+7 the motion to annul preliminary attachmentdated 1ctober !" !"0" was filed on the same day; 1+ 647 the answer of defendant8MP$C dated 1ctober +9 !"0" 20 was received by the ( C Pasig only on *ovember/ !"0" 21 it is evident that the


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claim sought to be enforced by the action; and that the amount due to the applicant isas 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


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"EL , J.* chanrobles virtual law library

eresita P' $rellano defendant in Civil Case *o' !!%!94! then pending before Branch -of the (egional rial Court of the )econd Gudicial (egion and stationed in $parriCagayan filed a verified complaint for neglect of duty misconduct bias and partiality

against % chanrobles virtual law library

6a7 Gudge *apoleon (' loDo then Presiding Gudge of the aforementioned Branch -now assigned as Presiding Gudge of Branch 2 of the (egional rial Court of Manila forhaving irregularly issued an order dated Ganuary 2! !",- for the issuance of a writ ofattachment in the said case on the same date despite the lack of legal basistherefor'chanroblesvirtualawlibrary chanrobles virtual law library

6b7 elino Bangalan then $cting Clerk of Court 888 of the $parri ( C 6now PresidingGudge M C Branch ! $parri Cagayan7 for issuing the writ of attachment in the saidcase despite the failure of the plaintiffs to post the reerminio del Castillo Branch Clerk of Court of the $parri ( C for deliberatelydelaying the issuance of service of summons on thedefendant'chanroblesvirtualawlibrary chanrobles virtual law library

6d7 Huciano Gove #eputy )heriff $parri Cagayan % for sei=ing a vehicle not owned bythe defendant and entrusting the custody thereof to )heriff &uards (odolfo $uringanand #ioniso Co' Gr' instead of personally keeping it under his custody resulting in thesaid vehicle being cannibali=ed to the damage and preDudice of the complainant and theheirs of the late (uperto $rellano'chanroblesvirtualawlibrary chanrobles virtual lawlibrary

he complaint against Clerk of Court >erminio del Castillo was dismissed for lack ofmerit by the Court in its (esolution dated Gune 2, !""+ as he did not appear to havehad any participation in the issuance and service of summons on the defendant in theaforementioned civil case 6pp' 42%4+ Rollo '7 chanrobles virtual law library

Aith respect to Gudge *apoleon (' loDo inasmuch as the charges against him weremere reiterations of the charges filed by the same complainant in A ' ' Case +o ' R /-3#-4@ which had been earlier dismissed for lack of merit by the Court en banc on March24 !",0 the instant complaint against him was likewise dismissed in the resolution ofthe Court dated *ovember , !""+6p' ,+ Rollo 7'chanroblesvirtualawlibrary chanrobles virtual law library

hereafter the case was referred to Gustice (amon $' Barcelona of the Court of $ppeals for investigation report and recommendation in regard to the remainingrespondents'chanroblesvirtualawlibrary chanrobles virtual law library

Gustice Barcelona finds Gudge Bangalan 6then Clerk of Court 8887 guilty of negligence for6!7 having issued the writ of attachment on Ganuary 2! !",- in spite of the applicantsJfailure to post an acceptable bond as re


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$s for )heriff Gove Gustice Barcelona found that in serving the writ of attachment thesheriff did not serve the same on the defendant but on somebody whom he suspectedonly as holding the property of the complainant' >e failed to verify the ownership of thecargo truck he attached' o compound the sheriffJs failure to e5ercise diligence in thee5ecution of the writ of attachment he surrendered the custody of the property to the

two alleged guards instead of depositing the same in a bondedwarehouse'chanroblesvirtualawlibrary chanrobles virtual law library

inding both Gudge Bangalan and )heriff Gove remiss in the performance of their dutiesGustice Barcelona recommends that they each be suspended for one 6!7 month 6notchargeable to their accumulated leave7 without pay' >owever this Court is of theopinion 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 casebelow' 8n this respect we agree with the factual findings and analysis of the 1ffice ofthe Court $dministrator thusF

8ndeed he issued the Arit of $ttachment although the plaintiffs have not yet posted theree discovered that only apromissory note in the form of an affidavit e5ecuted by the bondsmen denominated asan attachment bond appears on the record' >ad respondent Bangalan carefully

e5amined the undertaking filed before he issued the writ of attachment such a situationcould have been obviated' Ahere a statute authori=ing attachment reowever we do not find that the delay in theissuance 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 bythe 1ffice of the Clerk of Court and not by the branch clerk to whom the case wasalready assigned'chanroblesvirtualawlibrary chanrobles virtual law library

or sei=ing a vehicle which is not owned by the defendant respondent )heriff Gove maybe held administratively liable' $lthough his actuation may not have been tainted withbad faith or malice he failed to e5ercise due prudence in attaching the truck' >e shouldhave verified first if the truck he sei=ed was owned by the Dudgment debtor especially inthis case where it was found in the possession of a person other than its real owner'Conse


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severe warning that a repetition of the same or similar acts in the future will be dealtwith more severely'chanroblesvirtualawlibrary chanrobles virtual law library

)1 1(#E(E#'

G.R. No. 102??8 Au u 5, 1++2

RI!AR( !#AR$ER , &etitioner vs' ! #R$ F APPEAL%, R BER$E)ANGELI%$A a&' FELI!IA E)ANGELI%$A, Respondents '

G#$IERRE@,


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simultaneously served upon the private respondents at their residence' 8mmediatelythereafter #eputy )heriff Ernesto H' )ula levied attached and pulled out the propertiesin compliance with the courtJs directive to attach all the properties of private respondentsnot e5empt from e5ecution or so much thereof as may be sufficient to satisfy thepetitionerJs principal claim in the amount of

P2 !0! 0"4'"!'chanroblesvirtualawlibrary chanrobles virtual law library

)ubseE C1 ( 1 $PPE$H) E((E# $*# $C E# A8 > &($3E $B )E 1

#8)C(E 81* A>E* 8 >EH# >$ >E (E&81*$H (8$H C1 ( C1 H# *13$H8#HI 8)) E >E ) BGEC A(8 1 P(EH8M8*$(I $ $C>ME* A>8C> 8)

$* $*C8HH$(I (EME#I' 6 Rollo p' !+7

he Court of $ppealsJ decision is grounded on its finding that the trial court did notac


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claim7 and for the rial Court to issue the writ e -parte at the commencement of theaction if it finds the application otherwise sufficient in form and substance'

he Court also pointed out thatF

' ' ' 8t is incorrect to theori=e that after an action or proceeding has been commencedand Durisdiction over the person of the plaintiff has been vested in the Court but beforeac6uisition of 7urisdiction over the person of the defendant 6either by service ofsummons or his voluntary submission to the Court s authority 7 nothing can be validlydone by the plaintiff or the Court' 8t is wrong to assume that the validity of acts doneduring the period should be dependent on or held in suspension until the actualobtention of Durisdiction over the defendants person' he obtention by the court of

Durisdiction over the person of the defendant is one thing; owever we have likewise ruledthat the writ cannot bind and affect the defendant' >owever we have likewise ruled thatthe writ cannot bind and affect the defendant until Durisdiction over his person iseventually obtained' herefore it is re


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the writ of preliminary attachment was denied by the lower court for lack of merit' hereis no showing that there was an abuse of discretion on the part of the lower court indenying 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 actionin the main case since an anomalous situation would result if the issues of the maincase would be ventilated and resolved in a mere hearing of a motion 6#avao Hight andPower Co' 8nc' v' Court of $ppeals supra he Consolidated Bank and rust Corp'6)olidbank7 v' Court of $ppeals !"0 )C($ --+[!""!.7'chanroblesvirtualawlibrary chanrobles virtual law library

8n the present case one of the allegations in petitionerJs complaint below is that thedefendant spouses induced the plaintiff to grant the loan by issuing postdated checks tocover the installment payments and a separate set of postdated cheeks for payment ofthe stipulated interest 6$nne5 KBK7' he issue of fraud then is clearly within the

competence of the lower court in the main action'chanroblesvirtualawlibrary chanroblesvirtual law library

A>E(E 1(E premises considered the Court hereby &($* ) the petition' hechallenged decision of the Court of $ppeals is (E3E()E# and the order and writ ofattachment issued by >on' Ce=ar C' PeraleDo Presiding Gudge of Branch ", (egional

rial Court of ue=on City against spouses Evangelista are hereby (E8*) $ E#' *opronouncement as to costs'chanroblesvirtualawlibrary chanrobles virtual law library

)1 1(#E(E#'

G.R. No. 1?7+70 / "ar 31, 2006

P!L I&'u r e "a&u a ur & !or9ora o&, &etitioner, v ' $ e ! #R$ F APPEAL%a&' A%A !o4or ! e a4 I&'u r e , I& ., Respondents.

# E C 8 ) 8 1 *

A#%$RIA "AR$INE@, J.*

his resolves the petition for certiorari seeking the reversal of the #ecision!

of the Courtof $ppeals 6C$7 promulgated on ebruary 2! 299! which affirmed the #ecision of the(egional rial Court 6( C7 of ue=on City Branch 22-; and the C$ (esolution datedMay " 299! denying petitionerJs motion for reconsideration'

he antecedent facts are as followsFcraFnad

1n 1ctober !9 !""/ private respondent filed a complaint with the ( C for )um ofMoney with Preliminary $ttachment against herein petitioner' Private respondent claimsthat during the period from Ganuary !, !""4 to $pril !4 !""4 petitioner purchased andreceived from it various printing ink materials with a total value ofP/94 "9-'99 payable

within +9 days from the respective dates of invoices; and that petitioner in bad faith
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failed to comply with the terms of the sale and failed to pay its obligations despiterepeated verbal and written demands'

Petitioner was served with summons together with the Arit of Preliminary $ttachmenton 1ctober 29 !""/' 1n 1ctober 2+ !""/ petitioner filed a Motion to #issolve and or

#ischarge Arit of Preliminary $ttachment' 1n *ovember 29 !""/ the trial court issuedan 1rder denying petitionerJs motion to dissolve the writ of preliminary attachment'PetitionerJs motion for reconsideration of said order was also denied per 1rder datedGanuary 2 !""-' Petitioner no longer elevated to the higher courts the matter of thepropriety 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 privaterespondent were defective and sometime in $ugust 1ctober and *ovember of !""+they have returned ink materials to private respondent as shown by several ransmittal)lips' *evertheless petitioner admits that it continued to buy ink materials from private

respondent in !""4 despite having reDected ink materials delivered by privaterespondent in !""+' &etitioner, however insists that the ink materials delivered byprivate respondent in !""4 were also defective and they made known their complaintsto rankie the authori=ed representative of private respondent' 8n a letter dated Gune+9 !""/ petitioner informed private respondent that it had been complaining to its6private respondentJs7 representative about the


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petitionerJs finished plastic products' he trial courtJs analysis of the evidence led it tothe following conclusions to witFcraFnad

[#.efendant presented transmittal receipts which allegedly represent the items returnedby defendant [herein petitioner. to plaintiff [herein respondent.'

5 5 5

$ closer look at these three transmittal receipts would readily show that they are all fordeliveries made in !""+ whereas the items admittedly received by defendant and listedin paragraph 2 of the Complaint are all delivered and dated from Ganuary !, !""4 to

$pril !4 !""4'

he items therefore returned for being defective and communicated by defendant toplaintiff are for those printing ink materials delivered in !""+ and these are not the itemsleft unpaid and in issue in this present Complaint'

here is no other proof of demand made by defendant to plaintiff corporation as tocommunicate to plaintiff any defect in the printing ink materials delivered in !""4 e5ceptthe demand letter 6E5hibit K42K7 which is dated )eptember 2- !""/'

$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 byMr' Govencio Him 5 5 5

5 5 5

$s regards the testimony of defendantJs witness Govencio Him that defendantJs end%users returned the plastic packaging materials to defendant and defendant had toreimburse its clients of the amount paid by them and defendant allegedly suffereddamages 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. hadreceived complaints from its customers about the alleged unwanted smell of their plasticproducts' >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 ofthe smell no immediate communications were sent to the latter' 1n the contrary it6appellant7 continued to place orders and receive deliveries from the appellee' ;or e,

e a99e44a& a 4e' o o&: & & 4y oD a e a99e44a& o99e' u & eub e &= a er a4 u9o& &o e o u o er o e a44e e' u&Da& e' e44

o e 9ro'u . !o&:er e4y, e a99e44a& o& &ue' u & e a e & e r9ro'u o& o 94a a er a4 D Dou4' o&4y oD a e au e o ea44e e' &= & e44 a&&o be a r bu e' o e ub e &= a er a4 u e'. heappellant tried to convince us that the subDect ink materials were the same ink deliveredby the appellee and used in the products that were returned because of the unwantedsmell' >owever its evidence fails to impress us'

$ ere &o &' a o& a e 94a e' 9ou e 9r & e' by e 'e e&'a&a99e44a& a&' re ur&e' by u o er Dere 9r & e' D e u e o e 9a &'e4 :ere' by e 94a & a99e44ee. $ e or er e: 'e& e o& 9o & are e er

e4 er: & or u&re4 ab4e, or o a44y u&Dor y o re'e& e as shown by thefollowingF

!7 $ e Dor= 9ro e or o& a & e &a e o Do 2J or ree 3J u994 eras shown by the followingFcraFnad

E5h' K!2K % ) 1C $)$

K!+K % )8MC1( $)$
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K!4K % )8MC1( $)$

K!/K % )8MC1( $)$

K!-K % )I*P$C $)$

K!0K % )I*P$C $)$

K!,K % )I*P$C $)$

K!"K % )I*P$C $)$

K29K % )I*P$C $)$ C#8

K2!K % )I*P$C $)$

his is an indication that e u994 er o e ob&o ou 9a & a er a4 a &o bee&9ro9er4y 'e& e' or 9 &9o & e' '

27 $ e "e ora&'u o e a99e44a& Pro'u o& (e9ar e& ro Re or' Re e : & %e o& a& & er&a4 e o a 'oe &o &' a e D o

e r e:era4 u994 er 'e4 :ere' e & er or Mua4 y o &= . No D &e ro ea99e44a& Pro'u o& (e9ar e& Da 9re e& e' o a e a e &= u994 e'by e a99e44ee Da ou&' 'e e :e. No e:e& e 9er o& D o 9re9are' e a '

;or= Pro e ee Da 9re e& e' o e 94a & e e& r e ereo&.

+7 E5hibits K+9K K+!K and K+2K are supposedly memos from rank ' anos of the

1mega Manufacturing 6one of the appellantJs customers7 alleging that they havereDected certain printed materials due to Kunwanted smellK' $gain these memos do notindicate the source of such unwanted smell' 8n any case the memos were respectivelydated Gune !/ !""4 Guly !/ !""4 and March +9 !""/ % % which dates are too faraway from the deliveries made by the appellee'

47 he defendant%appellant made returns of ink products to the appellee much earlier on $ugust + !""+ $ugust - !""+ 1ctober !+ !""+ and *ovember + !""+ as shown bythe delivery receipts return slips of such dates' $ccording to the appellee these weresamples that were really returnable if not acceptable' his e5planation appears to beplausible since the


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>E (E)P1*#E* C1 ( 1 $PPE$H) $C E# A8 > &($3E $B )E 1#8)C(E 81* 8* 8)) 8*& $ A(8 1 P(EH8M8*$(I

$ $C>ME* EQ P$( E A8 >1 $*I HE&$H B$)8) $*# 1* &(1 *#) *1 $ >1(8RE# *#E( ( HE /0 1 >E ( HE) 1 C1 (

88'

>E (E)P1*#E* C1 ( 1 $PPE$H) $C E# A8 > &($3E $B )E 1#8)C(E 81* $) 8 ) G #&ME* A$) B$)E# 1* $ M8)$PP(E>E*)81* 1

$C ) $*# 8 ) 8*#8*&) $(E *1 ) PP1( E# BI >E E38#E*CE EQ $* 8*>E (EC1(#) 1 >8) C$)E

888'

>E >1*1($BHE C1 ( 1 $PPE$H) C1MM8 E# &($3E $B )E 1#8)C(E 81* 8* *1 (E3E()8*& >E ( H8*& 1 >E (8$H C1 ( /

irst of all although the petition states that it is one for certiorari under (ule -/ of the(ules of Court as it imputes grave abuse of discretion committed by the C$ the Courtshall treat the petition as one for review on certiorari under (ule 4/ considering that itwas filed within the reglementary period for filing a petition for review on certiorari andthe 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$that issued the writ of preliminary attachment' )aid writ was issued by the trial court' 1nappeal the C$ merely upheld the trial courtJs order ruling that the applicantJs 6hereinprivate 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 topay its purchases within +9 days but then refused to pay the same once in possessionof the merchandise'

he Court however finds the issuance of the Arit of Preliminary $ttachment to beimproper' 8n &hilippine


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36/42

-' PCH 8ndustries Manufacturing Corporation after receiving the above printing inkmaterials acted in bad faith when it failed to comply with the terms and conditions of thesale thereby preDudicing the interest of $sa Color N Chemical 8ndustries 8nc'

5 5 5

!9' #efendant [herein petitioner. was guilty of fraud in contracting the obligation whenhe [sic. agreed to pay the purchases within +9 days from date of purchases but once inpossession of the merchandise refused to pay his Dust and valid obligation therebyusing the capital of plaintiff [herein private respondent. to the latterJs preDudices[sic.' " cra

are insufficient to prove that petitioner was guilty of fraud in contracting the debt orincurring the obligation' he affidavit does not contain statements of other factualcircumstances to show that petitioner at the time of contracting the obligation had apreconceived 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 demandsmade by private respondent is not enough to warrant the issuance of the harshprovisional remedy of preliminary attachment'

>owever with regard to the other issues raised in this petition the Court finds the sameunmeritorious'

his Court reiterated in Child Learnin* Center, Inc. v. a*ario !9 the well%settled rulethatFcraFnad

&enerally a ua4 &' & o e r a4 our , a r e' by e !our o A99ea4 , are

&a4 a&' o& 4u :e a&' ay &o be re: eDe' o& a99ea4. he establishede5ceptions areF 6!7 when the inference made is manifestly mistaken absurd orimpossible; 627 when there is grave abuse of discretion; 6+7 when the findings aregrounded entirely on speculations surmises or conDectures; 647 when the Dudgment ofthe Court of $ppeals is based on misapprehension of facts; 6/7 when the findings of factare conflicting; 6-7 when the Court of $ppeals in making its findings went beyond theissues of the case and the same is contrary to the admissions of both appellant andappellee; 607 when the findings of fact are conclusions without citation of specificevidence on which they are based; 6,7 when the Court of $ppeals manifestly overlookedcertain relevant facts not disputed by the parties and which if properly consideredwould Dustify a different conclusion; 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 evidenceon record' 6Emphasis supplied7

Petitioner insists that the C$ should have given weight to its evidence i.e ' the workprocesses 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 provethat the defective ink definitely came from respondent because said documents showednot only the name of respondent $)$ Color as supplier but also the names of severalother suppliers' Petitioner now tries to e5plain that the other names of suppliersappearing on the work processes were suppliers of plastic materials so the onlysupplier of ink appearing on said documents is respondent $)$' 8t is further pointed outthat as testified by Govencio Him 6Him7 petitionerJs President during the period coveredby the Aork Processes they had only two suppliers of ink C#8 )akada and respondent

$)$ Color'

he Court subDected the records of this case to close scrutiny but found that petitionerJsallegation that the C$ Dudgment is based on misapprehension of facts is absolutelyunfounded'

$ ere &o e o& a4 e: 'e& e D a oe:er o u99or 9e o&er be4a e'e 94a&a o& a e o er &a e o u994 er a99ear & o& e Dor= 9ro e eare u994 er o 94a a er a4 a&' &o &= ' Moreover petitionerJs witnessescontradict each other' Him claims that during the period covered by the work processes
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37/42

they had only 2 suppliers of ink namely C#8 )akada and $)$ Color' !! 1n the otherhand contrary to HimJs claim 3ictor MontaSe= petitionerJs >ead of the $ccounting#epartment testified that at that time they had three or four suppliers of inkmaterials' !2 he work process form dated $pril 2" !""4 marked as E5hibit K29K alsolisted the suppliers as K)I*P$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 twosuppliers of ink for that batch of production as Him has stated that both $)$ and C#8are suppliers of ink materials' !+ >ence the C$ was correct in ruling that petitionerJsevidence failed to prove that it was indeed respondent $)$ Color who supplied thedefective ink'

>aving failed to prove that the ink materials delivered by respondent were defectivepetitioner does not have any basis for claiming the right to return and not pay for thematerials it purchased from respondent' 8t is therefore no longer necessary to discusswhether it was the obligation of respondent to pick%up the ink from petitionerJswarehouse'

Petitioner is likewise wrong in assuming that the C$ totally disregarded the testimony ofrank anos 6 anos7 who withdrew his testimony on ebruary 24 !"", or almost a

year after testifying that petitionerJs plastic products were reDected by customers due tothe bad smell of paint' he C$ made no ruling on the admissibility of anosJ testimony'

he appellate court merely stated that the memos 6E5hibits K+9K%K+2K7 from said witnessalso do not prove the source of the unwanted smell' hus the C$ obviously considered

anosJ testimony and the documents he identified for whatever they were worth but stillfound them unconvincing to prove petitionerJs claim that it was respondent whodelivered defective ink materials'

Clearly the findings of fact of both the trial court and the C$ as


38/42

G.R. No. L ?8756 %e9 e ber 11, 1+82

K. . GLA%% ! N%$R#!$I N ! ., IN!., &etitioner vs' $HE H N RABLE "AN#EL)ALEN@#ELA,


39/42

even if he does plaintiff can not be preDudiced thereby because his claims are against acorporation which has sufficient funds and property to satisfy his claim; and that themoney being garnished belongs to the '1' &lass Corporation Co' 8nc' and not todefendant enneth 1' &lass' 3 chanrobles virtual law library

By reason thereof Pin=on amended his complaint to include '1' &lass ConstructionCo' 8nc' as co%defendant of enneth 1' &lass' ? chanrobles virtual law library

1n Ganuary 2- !"0, the defendants therein filed a supplementary motion to dischargeand or dissolve the writ of preliminary attachment upon the ground that the affidavit filedin support of the motion for preliminary attachment was not sufficient or wanting in lawfor the reason thatF 6!7 the affidavit did not state that the amount of plaintiffJs claim wasabove all legal set%offs or counterclaims as reence the present recourse' $s prayed for the Court issued a temporary restraining

order restraining the respondent Gudge from further proceeding with the trial of thecase' + chanrobles virtual law library

Ae find merit in the petition' he respondent Gudge gravely abused his discretion inissuing the writ of preliminary attachment and in not ordering the release of the moneywhich 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 theissuance of a writ of preliminary attachment reads as followsF chanrobles virtual lawlibrary

)ec' !' Grounds upon which attachment may issue ' %$ plaintiff or any proper party mayat the commencement of the action or at any time thereafter have the property of theadverse party attached as security for the satisfaction of any Dudgment that may berecovered 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 fromcontract e5press or implied against a party who is about to depart from the Philippineswith intent to defraud his creditor; chanrobles virtual law library

6b7 8n an action for money or property embe==led or fraudulently misapplied orconverted to his own use by a public officer or an officer of a corporation or anattorney factor broker agent or clerk in the course of his employment as such or byany other person in a fiduciary capacity or for a willful violation of duty; chanroblesvirtual law library

6c7 8n an action to recover the possession of personal property unDustly detained whenthe property or any part thereof has been concealed removed or disposed of toprevent its being found or taken by the applicant or an officer; chanrobles virtual lawlibrary

6d7 8n an action against the party who has been guilty of a fraud in contracting the debtor incurring the obligation upon which the action is brought or in concealing or


40/42

disposing of the property for the taking detention or conversion of which the action isbrought; chanrobles virtual law library

6e7 8n an action against a party who has removed or disposed of his property or is aboutto do so with intent to defraud his creditors; chanrobles virtual law library

6f7 8n an action against a party who resides out of the Philippines or on whom summonsmay be served by publication'

8n ordering the issuance of the controversial writ of preliminary attachment therespondent Gudge said and Ae


41/42

"econd the affidavit submitted by Pin=on does not comply with the (ules' nder the(ules an affidavit for attachment must state that 6a7 sufficient cause of action e5ists 6b7the case is one of those mentioned in )ection 8 6a7 of (ule /0; 6c7 there is no othersufficient security Jor the claim sought to be enforced by the action and 6d7 the amountdue 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 alllegal counterclaims' )ection + (ule /0 of the (evised (ules of Court reads' asfollowsF chanrobles virtual law library

)ection +' Affidavit and bond re6uired '%$n order of attachment shall be granted onlywhen it is made to appear by the affidavit of the applicant or of some person whopersonally knows the facts that a sufficient cause of action e5ists that the case is one ofthose mentioned in )ection ! hereof; that there is no other sufficient security for theclaim sought to be enforced by the action and that the amount due to the applicant orthe value of the property the possession of which he is entitled to recover is as much asthe sum for which the order is granted above all legal counterclaims' he affidavit and

the bond re 1'

&H$))J docketed as Civil Case *o' /"92%P; chanrobles virtual law library2' My Complaint against enneth 1' &lass is based on several causes of actionnamelyF chanrobles virtual law library

6i7 1n ebruary !/ !"00 we mutually agreed that 8 undertake to haul his constructionmaterials from Manila to his construction proDect in Bulalo Bay Haguna and vice%versafor a consideration of P/9'99 per hour; chanrobles virtual law library

6ii7 $lso on Gune !, !"00 we entered into a separate agreement whereby my 8su=ucargo 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 library6iii7 1n )eptember 0 !"00 after making use of my 8su=u truck he surrendered thesame without paying the monthly rentals for the leased 8su=u truck and the pesoe


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issued against the property of the defendant fatally defective and the Dudge issuing it isdeemed to have acted in e5cess of his Durisdiction' 1?

5inally it appears that the petitioner has filed a counterbond in the amount ofP+0 !"9'99 to answer for any Dudgment that may be rendered against the defendant'

pon receipt of the counter%bond the respondent Gudge should have discharged theattachment pursuant to )ection !2 (ule /0 of the (evised (ules of Court which readsas followsF chanrobles virtual law library

)ection !2' %ischar*e of attachment upon *ivin* counterbond '%$t any time after anorder of attachment has been granted the party whose property has been attached orthe person appearing on his behalf may upon reasonable notice to the applicant applyto the Dudge who granted the order or to the Dudge of the court in which the action ispending for an order discharging the attachment wholly or in part on the security given'

he Dudge shall after hearing order the discharge of the attachment if a cash deposit ismade 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 anamount e

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