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of Davao City to desist and/or stop the enforcement or implementation of the order lifting the

attachment and to grant them fifteen (15) days to elevate the matter to the Appellate Court.
a.
Consequently, respondent Judge Tomol issued on the same day an Orders granting the
motion prayed for by private respondent Aboitiz and Company, Inc. Thus, the July 6,
1982 Order was stayed.
6. In the meantime, three Deputy Sheriffs of Cebu implemented the Order lifting the Writ of
Attachment and were able to pull out some personal properties of petitioner Adlawan. They were
not able to take out all the attached properties in view of the subsequent Order of respondent judge
to stay its implementation.
7. As petitioner's Motion for a Bill of Particulars was not immediately acted upon, he was not able to
file an answer or interpose any counterclaim. For this reason, petitioner filed an Application for
Award of Damage asking for a reasonable rental on the attached heavy construction equipment,
machineries and other properties at the rate of P30,000.00 per day from the date of seizure until
said properties are actually returned to his possession and control.
8. Before the court a quo could act on the motions of petitioner Adlawan, and before he could file an
answer, his motion for a bill of particulars not having been acted upon, private respondent Aboitiz
and Company, Inc., filed a Notice of Dismissal or Withdrawal of Complaint as a matter of right in
accordance with Section 1, Rule 17 of the Rules of Court.
a.
Respondent Judge Tomol issued an Order confirming the termination of the case upon
the notice of dismissal voluntarily filed by the plaintiff. Further, it provided that, For
emphasis, all orders of this Court issued prior to the filing of said notice of dismissal
are each and all rendered functus officio. By the same token, all pending incidents,
particularly the defendant's motion for a bill of particulars and their petition for
damages against the Plaintiffs attachment bond, are now beyond the competence of this
Court to consider for being moot and academic.
9. Petitioner Adlawan filed a Motion praying for the issuance of an order to the Provincial Sheriff of
Cebu to implement and enforce the Order of respondent Judge dated July 6, 1982 dissolving the
writ of preliminary attachment and to secure the delivery of the attached properties to the
petitioner.
a.
Respondent Judge issued an Order denying the Motion in view of the institution by
private respondent Aboitiz and Company, Inc. of a civil case for delivery of Personal
Properties with Replevin and Damages before the Court of First Instance of Cebu,
Branch XVI in Lapu-Lapu City and the filing of petitioner Adlawan of a case for
damages before the Court of First Instance of Cebu, Branch X, in connection with the
seizure of his properties under the writ of preliminary attachment.
10. With regard to the replevin case filed by private respondent Aboitiz and Company, Inc., the Court
of First Instance of Cebu, Branch XVI, Lapu-Lapu City, issued an Order for the seizure and
delivery of the properties described therein to the private respondent.
a.
The seized properties were thus delivered to private respondent by the Clerk of Court
and Ex-officio Provincial Sheriff.
11. Petitioner filed an Omnibus Motion to reconsider, dissolve and set aside the Writ of Seizure and
Replevin and to direct that the properties seized be returned to petitioner as well as to dismiss the
complaint. In support of this motion, petitioner alleged, among others, that private respondent's
office is situated in Cebu City while petitioner is a resident of mainland Cebu, particularly
Minglanilla therefore the Court of First Instance of Cebu stationed in Lapu-Lapu should not accept
the case. Furthermore, he alleged that the same personal properties seized are in custodia legis by
virtue of a writ of preliminary attachment issued by the Court of First Instance of Cebu, Branch
XI, presided by respondent Judge Tomol.
a.
The Court of First Instance of Cebu, Branch XVI in Lapu-Lapu City, presided by Judge
Ceferino E. Dulay denied the Omnibus Motion for lack of merit.
12. Petitioner Adlawan filed a Motion for Reconsideration but the same was denied.

Provisional Remedies Case Digests


RULE 57: ATTACHMENT
WHAT IS A WRIT OF ATTACHMENT: NATURE AND PURPOSE
1. Adlawan v. Tomol (What is a writ of attachment? Nature, purpose?)
Shortened version of pertinent facts:
Petitioner's properties were attached on the strength of the writs of preliminary attachment issued without
notice and hearing by the executive judge. These attached properties were given to the custody of private
respondent, Aboitiz and Company, Inc. Petitioner then filed a Motion to Dissolve the Writ of Attachment
which was granted by respondent Judge Tomol. Thus, petitioner was able to recover some of his properties.
But on the following day, this order was stayed by the same respondent judge leaving the rest of petitioner's
properties with private respondent. Later, private respondent withdrew its complaint which was confirmed by
respondent Judge Tomol. Petitioner Adlawan filed a motion to have the rest of his properties returned but
respondent judge refused to act on said motion due to cases filed by both parties in the different branches of
the Court of First Instance of Cebu relating to the same case.
Long version:
1.

2.

3.

4.

5.

Petitioner Eleazar A. Adlawan, a private contractor, was awarded by the National Irrigation
Administration and the Bureau of Public Highways contracts for the construction of various
infrastructure projects of the government to perform his obligations thereunder, petitioner sought
financial assistance and support from private respondent Aboitiz and Company, Inc.
For failure of petitioner to pay the installments and amortizations, private respondent filed before
the Court of First Instance of Cebu a complaint for the collection of a sum of money and damages
including an ex-parte application for the issuance of a writ of preliminary attachment against the
property of petitioner as defendant therein.
a.
The Executive Judge without notice and hearing issued an order directing the issuance
of a writ of preliminary attachment against all the properties of petitioner, real and
personal, upon the filing of an attachment bond for Four Million Pesos.
b. Writs of preliminary attachment were issued addressed to the Sheriffs of Cebu, Davao
City, Quezon City, Davao del Sur and Davao del Norte, directing them to attach the
real and personal properties of petitioner within their respective jurisdictions.
c.
On the strength of the writ of preliminary attachment, the bulk of petitioner's property
in Davao City was attached.
Subsequently, private respondent filed an Urgent Ex-parte Motion asking the court that it be
allowed to take possession and custody of the attached properties to protect its interest and to
avoid any damage or deterioration considering that the sheriff has no proper place to store or
deposit said properties.
a.
This was granted.
Meanwhile, petitioner before submitting an answer to the complaint, filed a Motion for a Bill of
Particulars and to Set Aside the Ex-Parte Writ of Preliminary Attachment which was opposed by
private respondent.
a.
Finding that the discharge of the writ of attachment is unavoidable on the ground that it
was issued ex-parte, without notice and hearing, based principally on the alleged
removal or disposition by the defendants of their properties with intent to defraud the
plaintiff, which allegation was limited to a bare assertion and not persuasively
substantial, respondent Judge issued an Order granting lifting and vacating the Order
which granted the writ of preliminary attachment. It provided that the writs issued on
are dissolved and recalled and the properties levied and seized by the Sheriffs of Cebu
and Davao City are discharged and released.
In view of the foregoing, private respondent Aboitiz and Company, Inc. filed an Urgent Ex-Parte
Motion praying for a stay of the July 6, 1982 Order dissolving the writ of preliminary attachment,
thus maintaining the status quo. Private respondent further prayed for the court to direct the sheriff

We rule in favor of petitioner Adlawan. Go to Part II for pertinent discussion.


I.
The order dated July 6, 1982 of respondent Judge Valeriano P. Tomol, Jr. lifting and vacating the order
granting the writ of preliminary attachment is a valid order, issued while he had jurisdiction over the case.

The execution of aforesaid order of July 6, 1982 was stayed for a period of fifteen (15) days on motion of the
plaintiff to enable the latter to question the propriety or impropriety of the same in the appellate court.
Instead, plaintiff filed a civil case for delivery of Personal Properties with Replevin and Damages with
another branch of the CFI of Cebu. Accordingly, having failed to appeal or question the aforementioned order
in the appellate court as originally manifested, the same became final and executory.
Section 1, Rule 39 of the Revised Rules of Court provides: Execution upon final
judgment or orders. Execution shall issue upon a judgment or order that finally
disposes of the action or proceeding. Such execution shall issue as a matter of right
upon the expiration of the period to appeal therefrom if no appeal has been perfected.
Once a judgment becomes final, the prevailing party is entitled as a matter of right to a Writ of Execution, and
the issuance thereof is the Court's ministerial duty.
the reasons advanced by respondent Judge Tomol for denying the enforcement of his order dated July 6, 1982
which lifted the writ of attachment and the restoration of the seized properties to the defendant petitioner
herein are: [a] the filing by private respondent of Civil Case No. 619-L with Branch XVI of CFI-Lapu-Lapu
City for delivery of Personal Properties with Replevin and Damages which as a consequence, the same
properties involved in this case were seized under a writ of replevin upon order of aforesaid court and [b] the
filing by petitioner of Civil Case No. 22265 before Branch X of the Court of First Instance of Cebu, for
damages.
Hence, the issues in this case center on the nature and purpose of the writ of attachment.
II.
A writ of preliminary attachment is a provisional remedy issued upon order of the court where an action is
pending to be levied upon the property or properties of the defendant therein, the same to be held thereafter
by the sheriff as security for the satisfaction of whatever judgment might be secured in said action by the
attaching creditor against the defendant.
The provisional remedy of attachment is available in order that the defendant may not dispose of his property
attached, and thus secure the satisfaction of any judgment that may be secured by plaintiff from defendant.
The purpose and function of an attachment or garnishment is two-fold.
1. First, it seizes upon property of an alleged debtor in advance of final judgment and holds it subject
to appropriation thus prevents the loss or dissipation of the property by fraud or otherwise.
2. Second, it subjects to the payment of a creditor's claim property of the debtor in those cases where
personal service cannot be obtained upon the debtor.
This remedy is to secure a contingent lien on defendant's property until plaintiff can, by appropriate
proceedings, obtain a judgment and have such property applied to its satisfaction, or to make some provision
for unsecured debts in cases where the means of satisfaction thereof are liable to be removed beyond the
jurisdiction, or improperly disposed of or concealed, or otherwise placed beyond the reach of creditors.
Attachment is an ancillary remedy. It is not sought for its own sake but rather to enable the attaching party to
realize upon relief sought and expected to be granted in the main or principal action.
The remedy of attachment is adjunct to the main suit, therefore, it can have no independent existence apart
from a suit on a claim of the plaintiff against the defendant. In other words, an attachment or garnishment is
generally ancillary to, and dependent on, a principal proceeding, either at law or in equity, which has for its
purpose a determination of the justice of creditor's demand.
Upon levy by attachment of the property in question by order of the Court, said property fell into custodia
legis of that court for purposes of that civil case only. Any relief against such attachment and the execution an
issuance of a writ of possession that ensued subsequently could be disposed of only in that case.

Courts have no jurisdiction to order the delivery of personal property (replevin) to the plaintiff if the property
is under attachment. Only courts having supervisory control or superior jurisdiction in the premises, have the
right to interfere with and change possession of property in custodia legis.
The garnishment of property to satisfy a writ of execution operates as an attachment and fastens upon the
property a lien by which the property is brought under the jurisdiction of the court issuing the writ. It is
brought into custodia legis under the sole control of such court.
During the life of the attachment, the attached property continues in the custody of the law, the attaching
officer being entitled to its possession and liability for its safe keeping.
Based on the above-cited principles, it is obvious that the writ of preliminary attachment issued is already
dissolved and rendered non-existent in view of the withdrawal of the complaint by Aboitiz and Company, Inc.
More importantly, even if the writ of attachment can be considered independently of the main case, the same,
having been improperly issued as found by respondent Judge Tomol himself, is null and void and cannot be a
justification for holding petitioners' properties in custodia legis any longer.
To reiterate, an attachment is but an incident to a suit; and unless the suit can be maintained, the attachment
must fall.
When Aboitiz and Company, Inc. withdrew its complaint, the attachment ceased to have a leg to stand on.
The attached properties of petitioner Adlawan which are in the custody of private respondent Aboitiz should
be returned to petitioner. This is only proper and equitable and in consonance with the rules and principles of
law. The parties, by the withdrawal of the complaint, should be placed in the same standing as they were
before the filing of the same.
III.
Petitioner also questions the jurisdiction of the CFI of Cebu stationed in Lapu-Lapu City to hear the replevin
case filed by private respondent in view of the fact that petitioner is a resident of Minglanilla, Cebu while
private respondent's principal place of business is in Cebu City. Obviously, the question posed by petitioner is
venue.
A reading of the Omnibus Motion filed by petitioner, then defendant therein, would reveal that he not only
questioned the jurisdiction of the court but likewise alleged non-jurisdictional grounds for dismissing the
replevin case, such as the amount of the bond put up by Aboitiz & Co. as grossly insufficient and that the
same properties are involved both in the replevin case and in the original collection case with preliminary
attachment. Thus, in so doing, the court acquired jurisdiction over him.
Even though the defendant objects to the jurisdiction of the court, if at the same time he alleges any nonjurisdictional ground for dismissing the action, the court acquires jurisdiction over him.
IV.
Finally, the employment by counsel for private respondent of dubious procedural maneuvers as what
transpired in the case at bar obviously to continue the wrongful and illegal possession and custody of
petitioner's properties even after the dissolution of the attachment is to say the least, hardly commendable if
not a form of "forum shopping", to seek the court where he may possibly obtain favorable judgment. The
right to come before the Courts to redress a grievance or right a wrong should be exercised with prudence and
good faith.
Dispositive Portion:
The attached properties left in the custody of private respondent Aboitiz and Company, Inc. be returned to
petitioner Eleazar V. Adlawan without prejudice to the outcome of the cases filed by both parties.

WHEN CAN THE COURT ISSUE A WRIT OF ATTACHMENT


2. Davao Light v. CA
Facts:
1. Davao Light filed a verified complaint for recovery of a sum of money and damages against
defendants Queensland Hotel, etc. and Adarna. The complaint contained an ex parte application
for a writ of preliminary attachment. Application was granted. Writ of attachment was issued upon
payment of P4.6M bond.
2. Upon service of summons, complaint, writ of attachment, and a copy of the attachment bond,
sheriff seized properties belonging to the latter.
3. Defendants filed a motion to discharge the attachment for lack of jurisdiction to issue the same
because at the time the order of attachment was promulgated and the attachment writ issued, the
Trial Court had not yet acquired jurisdiction over the cause and over the persons of the defendants:
denied.
4. SCA instituted by defendants in the CA: declared order null and void and ordered attachment
discharged.
a.
Court does not acquire jurisdiction over the person of the defendant until he is duly
summoned or voluntarily appears, and adding the phrase that it be issued ex parte
does not confer said jurisdiction before actual summons had been made, nor retroact
jurisdiction upon summons being made.
Issue/Held: Whether or not a writ of preliminary attachment may issue ex parte against a defendant before
acquisition of jurisdiction of the latters person by service of summons or his voluntary submission to the
Courts authority --- YES.
Ratio:
A distinction must be made between issuance and implementation of the writ. Jurisdiction over the person is
necessary in the implementation (levy) but not in the issuance.
It is wrong to assume that the validity of acts done during this period should be dependent on, or held in
suspension until, the actual obtention of jurisdiction over the defendants person. The obtention by the court
of jurisdiction over the person of the defendant is one thing; quite another is the acquisition of jurisdiction
over the person of the plaintiff or over the subject matter or nature of the action, or the res or object thereof.
An action or proceeding is commenced by the filing of the complaint or other initiatory pleading. On the
other hand, jurisdiction over the person of the defendant is obtained by the service of summons or other
coercive process upon him or by his voluntary submission to the authority of the court. There is thus
ordinarily some appreciable interval of time between the day of the filing of the complaint and the day of
service of summons of the defendant. During this period, different acts may be done by the plaintiff or by the
Court, which are of unquestionable validity and propriety. Among these, for example, are the appointment of
a guardian ad litem, the grant of authority to the plaintiff to prosecute the suit as a pauper litigant, the
amendment of the complaint by the plaintiff as a matter of right without leave of court, authorization by the
Court of service of summons by publication, the dismissal of the action by the plaintiff on mere notice. This,
too, is true with regard to the provisional remedies of preliminary attachment, preliminary injunction,
receivership or replevin. They may be validly and properly applied for and granted even before the
defendant is summoned or is heard from.
A preliminary attachment, as the provisional remedy in virtue of which a plaintiff or other proper party
may, at the commencement of the action or at 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.16 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 complaintwhich, as above pointed out, is 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 commencedby the filing of the
complaint and the payment of all requisite docket and other feesthe 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.
Whatever be the acts done by the Court prior to the acquisition of jurisdiction over the person of the
defendant, and however valid and proper they might otherwise be, these do not and cannot bind and
affect the defendant until and unless jurisdiction over his person is eventually obtained by the court,
either by service on him of summons or other coercive process or his voluntary submission to the
courts authority. Hence, when the sheriff or other proper officer commences implementation of the
writ of attachment, it is essential that he serve on the defendant not only a copy of the applicants
affidavit and attachment bond, and of the order of attachment, as explicitly required by Section 5 of
Rule 57, but also the summons addressed to said defendant as well as a copy of the complaint and order
for appointment of guardian ad litem, if any, as also explicitly directed by Section 3, Rule 14 of the
Rules of Court.
Service of all such documents is indispensable not only for the acquisition of jurisdiction over the person of
the defendant, but also upon considerations of fairness, to apprise the defendant of the complaint against him,
of the issuance of a writ of preliminary attachment and the grounds therefor and thus accord him the
opportunity to prevent attachment of his property by the posting of a counter-bond in an amount equal to the
plaintiffs claim in the complaint pursuant to Section 5 (or Section 12), Rule 57, or dissolving it by causing
dismissal of the complaint itself on any of the grounds set forth in Rule 16, or demonstrating the insufficiency
of the applicants affidavit or bond in accordance with Section 13, Rule 57.
It was on account of the failure to comply with this fundamental requirement of service of summons and the
other documents above indicated that writs of attachment issued by the Trial Court ex parte were struck down
by this Courts Third Division in two (2) cases, namely: Sievert v. Court of Appeals, and BAC Manufacturing
and Sales Corporation v. Court of Appeals, et al.
In contrast to the case at barwhere the summons and a copy of the complaint, as well as the order and writ
of attachment and the attachment bond were served on the defendantin Sievert, levy on attachment was
attempted notwithstanding that only the petition for issuance of the writ of preliminary attachment was
served on the defendant, without any prior or accompanying summons and copy of the complaint; in BAC
Manufacturing and Sales Corporation, neither the summons nor the order granting the preliminary attachment
or the writ of attachment itself was served on the defendant before or at the time the levy was made.
For the guidance of all concerned, the Court reiterates and reaffirms the proposition that writs of
attachment may properly issue ex parte provided that the Court is satisfied that the relevant requisites
therefor have been fulfilled by the applicant, although it may, in its discretion, require prior hearing on
the application with notice to the defendant; but that levy on property pursuant to the writ thus issued
may not be validly effected unless preceded, or contemporaneously accompanied, by service on the
defendant of summons, a copy of the complaint (and of the appointment of guardian ad litem, if any),
the application for attachment (if not incorporated in but submitted separately from the complaint),
the order of attachment, and the plaintiffs attachment bond.
Other discussions on Preliminary Attachment:
On the requirement of hearing
Filinvest Credit Corporation v. Relova: Nothing in the Rules of Court makes notice and hearing indispensable
and mandatory requisites for the issuance of a writ of attachment. The only pre-requisite is that the Court be
satisfied, upon consideration of the affidavit of the applicant or of some other person who personally knows
the facts, that a sufficient cause of action exists, that the case is one of those mentioned in Section 1 xx (Rule
57), that there is no other sufficient security for the claim sought to be enforced by the action, and that the
amount due to the applicant, 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 (of attachment) is granted above all legal counterclaims."

No hearing is required on an application for preliminary attachment, with notice to the defendant, for the
reason that this would defeat the objective of the remedy xx (since the) time which such a hearing would
take, could be enough to enable the defendant to abscond or dispose of his property before a writ of
attachment issues. Such a procedure would warn absconding debtors-defendants of the commencement of the
suit against them and the probable seizure of their properties, and thus give them the advantage of time to
hide their assets, leaving the creditor-plaintiff holding the proverbial empty bag; it would place the
creditor-applicant in danger of losing any security for a favorable judgment and thus give him only an illusory
victory.
Two ways of discharging an attachment: (1) by the posting of a counterbond; and (2) by a showing of its
improper or irregular issuance.
(1) By posting of a counter-bond
The submission of a counter-bond is an efficacious mode of lifting an attachment already enforced against
property (Section 12 of Rule 57), or even of preventing its enforcement altogether (Section 5 of Rule 57).
(2) By a showing of its improper or irregular issuance
A preliminary attachment may also be lifted or discharged on the ground that it has been irregularly or
improperly issued (Section 13 of Rule 57). Like the first, this second mode of lifting an attachment may be
resorted to even before any property has been levied on. Indeed, it may be availed of after property has been
released from a levy on attachment.
The attachment debtor cannot be deemed to have waived any defect in the issuance of the attachment writ by
simply availing himself of one way of discharging the attachment writ, instead of the other. Moreover, the
filing of a counter-bond is a speedier way of discharging the attachment writ maliciously sought out by the
attaching creditor instead of the other way, which, in most instances would require presentation of evidence in
a full-blown trial on the merits, and cannot easily be settled in a pending incident of the case.
When an attachment may not be dissolved by a showing of its irregular or improper issuance
When the preliminary attachment is issued upon a ground which is at the same time the applicants cause of
action, the defendant is not allowed to file a motion to dissolve the attachment under Section 13 of Rule 57 by
offering to show the falsity of the factual averments in the plaintiffs application and affidavits on which the
writ was basedand consequently that the writ based thereon had been improperly or irregularly issued, the
reason being that the hearing on such a motion for dissolution of the writ would be tantamount to a trial of the
merits of the action.
Effect of the dissolution of a preliminary attachment on the plaintiffs attachment bond
The dissolution of the preliminary attachment upon security given, or a showing of its irregular or improper
issuance, does not of course operate to discharge the sureties on plaintiffs own attachment bond.
That bond is executed to the adverse party, conditioned that the applicant 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 (SEC. 4, Rule 57) Until that determination is
made, as to the applicants entitlement to the attachment, his bond must stand and cannot be withdrawn.
With respect to the other provisional remedies, i.e., preliminary injunction (Rule 58), receivership (Rule 59),
replevin or delivery of personal property (Rule 60), the rule is the same: they may also issue ex parte
whatever be the acts done by the Court prior to the acquisition of jurisdiction over the person of the
defendant, as above indicated

Overarching issue: who is the rightful owner of the disputed shares?


Facts:
1.

2.

3.

4.

5.

6.

7.

8.

9.
10.

11.

12.

13.

14.
3. Chemphil Export and Import Corp. v. CA (When can the court issue a writ of attachment?)
Intro: Before us is a legal tug-of-war between the Chemphil Export and Import Corporation (CEIC) on one
side, and the PISO and Jaime Gonzales as assignee of the Bank of the Philippine Islands (BPI), Rizal
Commercial Banking Corporation (RCBC), Land Bank of the Philippines (LBP) and Philippine Commercial
International Bank (PCIB), on the other (the consortium), over 1,717,678 shares of stock in the Chemical
Industries of the Philippines (Chemphil/CIP).

15.

Dynetics, Inc. and Antonio M. Garcia filed a complaint for declaratory relief and/or injunction
against the PISO, BPI, LBP, PCIB and RCBC or the consortium with the Regional Trial Court of
Makati, Branch 45 (Civil Case No. 8527), seeking judicial declaration, construction and
interpretation of the validity of the surety agreement that Dynetics and Garcia had entered into
with the consortium and to perpetually enjoin the latter from claiming, collecting and enforcing
any purported obligations which Dynetics and Garcia might have undertaken in said agreement.
The consortium filed their respective answers with counterclaims alleging that the surety
agreement in question was valid and binding and that Dynetics and Garcia were liable under the
terms of the said agreement. It likewise applied for the issuance of a writ of preliminary
attachment against Dynetics and Garcia.
Dynetics, Antonio Garcia and Matrix Management & Trading Corporation filed a complaint for
declaratory relief and/or injunction against the Security Bank & Trust Co. (SBTC case) before the
Regional Trial Court.
The trial court granted SBTC's prayer for the issuance of a writ of preliminary attachment and a
notice of garnishment covering Garcia's shares in CIP/Chemphil was served on Chemphil through
its then President. The notice of garnishment was duly annotated in the stock and transfer books of
Chemphil on the same date.
The Regional Trial Court in Civil Case No. 8527 (the consortium case) denied the application of
Dynetics and Garcia for preliminary injunction and instead granted the consortium's prayer for a
consolidated writ of preliminary attachment.
After the consortium had filed the required bond, a writ of attachment was issued and various real
and personal properties of Dynetics and Garcia were garnished, including the disputed shares. This
garnishment, however, was not annotated in Chemphil's stock and transfer book.
PCIB filed a motion to dismiss the complaint of Dynetics and Garcia for lack of interest to
prosecute and to submit its counterclaims for decision, adopting the evidence it had adduced at the
hearing of its application for preliminary attachment.
The Regional Trial Court dismissed the complaint of Dynetics and Garcia in Civil Case No. 8527,
as well as the counterclaims of the consortium
a.
The motions for reconsideration filed by the consortium were, likewise, denied by the
trial court.
The consortium appealed to the Court of Appeals.
During the pendency of consortium's appeal Antonio Garcia and the consortium entered into a
Compromise Agreement which the Court of Appeals approved nd became the basis of its
judgment by compromise. Antonio Garcia was dropped as a party to the appeal leaving the
consortium to proceed solely against Dynetics, Inc.
Antonio Garcia under a Deed of Sale transferred to Ferro Chemicals, Inc. (FCI) the disputed
shares and other properties for P79,207,331.28. It was agreed upon that part of the purchase price
shall be paid by FCI directly to SBTC for whatever judgment credits that may be adjudged in the
latter's favor and against Antonio Garcia in the aforementioned SBTC case.
FCI, through its President Antonio M. Garcia, issued a Bank of America Check in favor of SBTC
in the amount of P35,462,869.62. SBTC refused to accept the check claiming that the amount was
not sufficient to discharge the debt. The check was thus consigned by Antonio Garcia and
Dynetics with the Regional Trial Court as payment of their judgment debt in the SBTC case.
FCI assigned its 4,119,614 shares in Chemphil, which included the disputed shares, to petitioner
CEIC. The shares were registered and recorded in the corporate books of Chemphil in CEIC's
name and the corresponding stock certificates were issued to it.
Meanwhile, Antonio Garcia, in the consortium case, failed to comply with the terms of the
compromise agreement he entered into with the consortium. As a result, the consortium filed a
motion for execution which was granted by the trial court. Among Garcia's properties that were
levied upon on execution were his 1,717,678 shares in Chemphil previously garnished.
The consortium acquired the disputed shares of stock at the public auction sale conducted by the
sheriff for P85,000,000.00. 20 On same day, a Certificate of Sale covering the disputed shares was
issued to it.

16. The consortium filed a motion to order the corporate secretary of Chemphil to enter in its stock
and transfer books the sheriff's certificate of sale and to issue new certificates of stock in the name
of the banks concerned. The trial court granted said motion.
17. CEIC filed a motion to intervene in the consortium case seeking the recall of the abovementioned
order on grounds that it is the rightful owner of the disputed shares. It further alleged that the
disputed shares were previously owned by Antonio M. Garcia but subsequently sold by him to
Ferro Chemicals, Inc. (FCI) which in turn assigned the same to CEIC in an agreement.
18. The trial court granted CEIC's motion allowing it to intervene, but limited only to the incidents
covered by the order dated 4 September 1989. In the same order, the trial court directed
Chemphil's corporate secretary to temporarily refrain from implementing the 4 September 1989
order.
19. The consortium filed their opposition to CEIC's motion for intervention alleging that their
attachment lien over the disputed shares of stocks must prevail over the private sale in favor of the
CEIC considering that said shares of stock were garnished in the consortium's favor as early as 19
July 1985.
20. The consortium filed their opposition to CEIC's motion to set aside the 4 September 1989 order
and moved to lift the 27 September 1989 order.
21. The consortium filed a manifestation and motion to lift the 27 September 1989 order, to reinstate
the 4 September 1989 order and to direct CEIC to surrender the disputed stock certificates of
Chemphil in its possession within twenty-four (24) hours, failing in which the President,
Corporate Secretary and stock and transfer agent of Chemphil be directed to register the names of
the banks making up the consortium as owners of said shares, sign the new certificates of stocks
evidencing their ownership over said shares and to immediately deliver the stock certificates to
them.
22. The trial court rendered an order granting the Urgent Motion dated September 25 filed by SEIC,
setting aside the September 4 order, and denying the Consortiums motions dated October 3 and
October 11.
a.
The consortium and PCIB filed separate motions for reconsideration of the aforestated
order which were opposed by petitioner CEIC, which the trial court denied.
23. The consortium appealed to the Court of Appeals. The PCIB separately filed with the Court of
Appeals a petition for certiorari, prohibition and mandamus with a prayer for the issuance of a writ
of preliminary injunction
24. The Court of Appeals (Twelfth Division) in CA-G.R. No. 26511 and CA-G.R. No. 20467 rendered
a decision reversing the orders of the trial court and confirming the ownership of the consortium
over the disputed shares. CEIC's motion for reconsideration was denied.
25. The Court of Appeals (Special Ninth Division) in CA-G.R. No. SP 20474 rendered a decision
denying due course to and dismissing PCIB's petition for certiorari.
a.
PCIB's motion for reconsideration was denied.
26. The consortium, with the exception of PISO, assigned without recourse all its rights and interests
in the disputed shares to Jaime Gonzales.
27. CEIC filed the instant petition for review. PCIB filed its own petition for review.
Whether or not the consortium has indeed a prior valid and existing attachment lien over the disputed shares.
CEIC vigorously argues that the consortium's writ of attachment over the disputed shares of Chemphil is null
and void, insisting as it does, that the notice of garnishment was not validly served on the designated officers
on 19 July 1985. To support its contention, CEIC presented the sheriff's notice of garnishment dated 19 July
1985 which showed on its face that said notice was received by one Thelly Ruiz who was neither the president
nor managing agent of Chemphil. It makes no difference, CEIC further avers, that Thelly Ruiz was the
secretary of the President of Chemphil, for under the above-quoted provision she is not among the officers so
authorized or designated to be served with the notice of garnishment.
We cannot subscribe to such a narrow view of the rule on proper service of writs of attachment.
A secretary's major function is to assist his or her superior. He/she is in effect an extension of the latter.
Obviously, as such, one of her duties is to receive letters and notices for and in behalf of her superior, as in
the case at bench. The notice of garnishment was addressed to and was actually received by Chemphil's

president through his secretary who formally received it for him. Thus, in one case, we ruled that the
secretary of the president may be considered an "agent" of the corporation and held that service of summons
on him is binding on the corporation.
Moreover, the service and receipt of the notice of garnishment on 19 July 1985 was duly acknowledged and
confirmed by the corporate secretary of Chemphil, Rolando Navarro and his successor Avelino Cruz through
their respective certifications.
We rule, therefore, that there was substantial compliance with Sec. 7(d), Rule 57 of the Rules of Court.
Did the compromise agreement between Antonio Garcia and the consortium discharge the latter's attachment
lien over the disputed shares?
CEIC argues that a writ of attachment is a mere auxiliary remedy which, upon the dismissal of the case, dies
a natural death. Thus, when the consortium entered into a compromise agreement, which resulted in the
termination of their case, the disputed shares were released from garnishment.
We disagree. To subscribe to CEIC's contentions would be to totally disregard the concept and purpose of a
preliminary attachment.
A writ of preliminary attachment is a provisional remedy issued upon order of the court where an action is
pending to be levied upon the property or properties of the defendant therein, the same to be held thereafter
by the Sheriff as security for the satisfaction of whatever judgment might be secured in said action by the
attaching creditor against the defendant.
Attachment is a juridical institution which has for its purpose to secure the outcome of the trial, that is, the
satisfaction of the pecuniary obligation really contracted by a person or believed to have been contracted by
him, either by virtue of a civil obligation emanating from contract or from law, or by virtue of some crime or
misdemeanor that he might have committed, and the writ issued, granted it, is executed by attaching and
safely keeping all the movable property of the defendant, or so much thereof may be sufficient to satisfy the
plaintiff's demands
The chief purpose of the remedy of attachment is to secure a contingent lien on defendant's property until
plaintiff can, by appropriate proceedings, obtain a judgment and have such property applied to its satisfaction,
or to make some provision for unsecured debts in cases where the means of satisfaction thereof are liable to
be removed beyond the jurisdiction, or improperly disposed of or concealed, or otherwise placed beyond the
reach of creditors.
As held in another case -- An attachment lien continues until the debt is paid, or sale is had under execution
issued on the judgment or until judgment is satisfied, or the attachment discharged or vacated in the same
manner provided by law:
The appointment of a rehabilitation receiver who took control and custody of BF has
not necessarily secured the claims of Roa and Mendoza. In the event that the
receivership is terminated with such claims not having been satisfied, the creditors may
also find themselves without security therefor in the civil action because of the
dissolution of the attachment. This should not be permitted. Having previously
obtained the issuance of the writ in good faith, they should not be deprived of its
protection if the rehabilitation plan does not succeed and the civil action is resumed.
Attachment is in the nature of a proceeding in rem. It is against the particular property. The attaching creditor
thereby acquires specific lien upon the attached property which ripens into a judgment against the res when
the order of sale is made. Such a proceeding is in effect a finding that the property attached is an indebted
thing and a virtual condemnation of it to pay the owner's debt. The law does not provide the length of time an
attachment lien shall continue after the rendition of judgment, and it must therefore necessarily continue until
the debt is paid, or sale is had under execution issued on the judgment or until judgment is satisfied, or the
attachment discharged or vacated in some manner provided by law. It has been held that the lien obtained by
attachment stands upon as high equitable grounds as a mortgage lien: The lien or security obtained by an

attachment even before judgment, is a fixed and positive security, a specific lien, and, although whether it
will ever be made available to the creditor depends on contingencies, its existence is in no way contingent,
conditioned or inchoate. It is a vested interest, an actual and substantial security, affording specific security
for satisfaction of the debt put in suit, which constitutes a cloud on the legal title, and is as specific as if
created by virtue of a voluntary act of the debtor and stands upon as high equitable grounds as a mortgage.
4. Citizens Surety v. Melencio-Herrera
Facts:
1. Petitioner had filed its complaint alleging that at request of defendant Dacanay, it issued its Surety
Bonds first, in favor of Fajardo to guarantee payment of a P5k promissory note executed by said
Dacanay, second, in favor of Manufacturers Bank, to guarantee payment of another promissory
note in like amount. In consideration of said bonds, Santiago and Dacanay executed Indemnity
Agreements, binding themselves jointly and severally. As additional security, the Dacanays
mortgaged to plaintiff a parcel of land in Baguio City.
2. Promissory notes were not paid and as a result plaintiff Surety was compelled to pay. Dacanays
failed to reimburse the Surety for such payments. Plaintiff caused the extrajudicial foreclosure of
the mortgage to pay its claim. At the foreclosure sale, the land mortgaged was sold to plaintiff,
leaving an unsatisfied balance of P10k.
3. Respondent Judge caused summons to be made by publication in the newspaper Philippines
Herald. Judge dismissed the case for failure of defendants to appear, the suit being in personam.

Facts:
1.

2.

3.
4.

Issue/Held: Whether or not jurisdiction on the person was validly acquired --- NO.
5.
Ratio:
We agree with respondent Judge that the action of plaintiff petitioner, being in personam, the Court could not
validly acquire jurisdiction on a non-appearing defendant, absent a personal service of summons within the
forum. Without such personal service, any judgment on a non-appearing defendant would be violative of due
process.
It is well-settled principle of Constitutional Law that, in an action strictly in personam, like the one at bar,
personal service of summons, within the forum, is essential to the acquisition of jurisdiction over the person
of the defendant, who does not voluntarily submit himself to the authority of the court. In other words,
summons by publication cannotconsistently with the due process clause in the Bill of Rightsconfer upon
the court jurisdiction over said defendants.
Due process of law requires personal service to support a personal judgment, and, when the proceeding is
strictly in personam brought to determine the personal rights and obligations of the parties, personal service
within the state or a voluntary appearance in the case is essential to the acquisition of jurisdiction so as to
constitute compliance with the constitutional requirement of due process in actions in personam. The service
by publication on resident defendants, who are personally within the state and can be found therein is
not due process of law, and a statute allowing it is unconstitutional.
The proper recourse for a creditor in the same situation as petitioner is to locate properties, real or
personal, of the resident defendant debtor with unknown address and cause them to be attached under
Rule 57, section 1(f), in which case, the attachment converts the action into a proceeding in rem or
quasi in rem and the summons by publication may then accordingly be deemed valid and effective.
But because debtors who abscond and conceal themselves are also quite adept at concealing their
properties, the dismissal of the case below by respondent Judge should be set aside and the case held
pending in the courts archives, until petitioner as plaintiff succeeds in determining the whereabouts of
the defendants person or properties and causes valid summons to be served personally or by
publication as the case may be. The tolling of the period of prescription for as long as the debtor
remains in hiding would properly be a matter of court record, and he can not emerge after a sufficient
lapse of time from the dismissal of the case to profit from his own misdeed and claim prescription of his
just debt.
5. Gruenberg v. CA (When can the court issue a writ of attachment?)

6.

7.

8.

9.

Petitioners are the defendants and private respondent is the plaintiff in Civil Case No. Q-18444,
for annulment of sale, recovery of ownership and possession of the house and lot situated at No.
24 Scout Limbaga, Diliman, Quezon City, the same, allegedly, having been sold in fraud of
creditors.
Private respondent filed the complaint in Civil Case No. Q18444, in her capacity as the
administratrix of the intestate estate of the late William Gruenberg.
a.
It is alleged in the complaint in Civil Case No. Q-18444 that the house and lot in
question, which were sold to defendant Albert Gruenberg (one of the petitioners), form
part of the conjugal partnership of the Gruenberg spouses, which must answer for the
obligations that deceased William Gruenberg might have incurred during his lifetime in
his capacity as manager and administrator of the conjugal partnership; and that the sale
of the house and lot before the death of William Gruenberg, when at that time two
creditors had already filed suits against him for collection of unpaid obligations, and
the latter had unpaid obligation to plaintiff Elda R, Flores (private respondent) in the
amount of P13,000.00, exclusive of interest and collection charges, patently and clearly
can no longer be paid or liquidated.
Petitioners filed their answer to the complaint.
Private respondent filed a 'Motion for Issuance of Writ of Preliminary Attachment' against the
properties of petitioners, alleging, among others, that the latter are indebted to her in the principal
amount of P13,000.00, which, according to her, she seeks to recover in Civil Case No. Q-18444.
Petitioners filed their opposition to the motion for the issuance of writ of preliminary attachment,
alleging among others, that Civil Case No. Q-18444 is an action for annulment of sale and
recovery of the house and lot mentioned therein, and not for recovery of sum of money. It is
contended that a writ of preliminary attachment is not the proper remedy for the protection of the
rights of the estate. In the same opposition, petitioners refuted the allegations of private respondent
in her motion that the complaint in Civil Case No. Q-18444 is one for collection of a sum of
money allegedly contracted fraudulently by petitioners.
Respondent Judge issued an order, granting the motion of private respondent and issuing a writ of
preliminary attachment against the properties of petitioners, respondent Judge stating that no
opposition had been filed to the motion.
a.
Respondent Sheriff and/or his deputies served on petitioners and the managers of the
Hollywood Theater, Palace Theater and Illusion Theatre a writ of preliminary
attachment and notice of garnishment against petitioners and personally in favor of
respondent Flores.
It is alleged that the order of respondent Judge was not received by petitioners' new counsel but
upon being informed by petitioners of the writ of preliminary attachment and notice of
garnishment, petitioners'new counsel promptly went to the court of respondent Judge and then and
there he discovered that petitioners' opposition to the motion was not attached to the record,
because the same was forwarded to Branch XVIII to which Civil Case No. Q-18444 was originally
assigned,
Petitioners filed (a) a motion for reconsideration of the order granting the motion for the issuance
of a writ of preliminary attachment, and (b) a motion to recall the writ of preliminary attachment
and notice of garnishment, on the ground that it is not true that petitioners did not oppose the
motion of private respondent, and that there is no valid basis to grant the motion.
a.
Respondent Judge issued an order, denying the motions of petitioners.
Respondent Judge issued an order, requiring petitioners to appear before his court to explain why
they should not be punished for contempt for denying or disobeying the lawful processes of the
court.
a.
The issuance of the "show cause" order prompted the petitioners to file a petition for
certiorari with writ of preliminary injunction in the Court of Appeals. The petition was
dismissed. Hence, the instant petition.

Issue: Propriety of the writ of attachment and garnishment against the petitioners' properties issued by the
trial court and affirmed by the appellate court.

Held: Improper issuance of writ of attachment and garnishment. Petition granted.


Ratio:
In her affidavit supporting the motion for a writ of preliminary attachment, the private respondent stated that
her case "... is one of the situations covered by Section 1 (d), Rule 57 of the Rules of Court whereby a writ of
preliminary attachment may issue."
Section 1 (d), Rule 57 provides: Grounds upon which attachment may issue.A
plaintiff or any proper party may, at the commencement of the action or at any time
thereafter, have the property of the adverse party attached as security for the
satisfaction of any judgment that may be recovered in the following cases:
(d) In an action against a party who has been guilty of a fraud in contracting the debt or
incurring the obligation upon which the action is brought, or in concealing or disposing
of the property for the taking, detention or conversion of which the action is brought.
There are various reasons why this petition should prosper.
Private respondent Elda R. Flores, as a claimant for P13,000.00 against the estate of William Gruenberg, Sr.,
was appointed administratrix of the estate of the deceased. In her capacity as administratrix, she filed Civil
Case No. Q- 18444 against the petitioners. This main case was for the annulment of a deed of sale executed
by the late William Gruenberg, Sr., in favor of Albert Gruenberg and for the recovery of possession and
ownership of the house and lot involved in that sale.
The motion for a writ of preliminary attachment filed by Flores, however, states:
1. Defendants are indebted to plaintiff in the amount of P13,000.00 exclusive of accrued interest and
collection charges, which plaintiff seeks to recover in the instant action; and
2. Defendants are guilty of fraud in contracting the debt or incurring the obligation due plaintiff in that they
conspired and confederated with each other as mother End son to defraud other creditors one of whom is
plaintiff, by simulating the sale of house and lot situated at No. 24 Scout Limbaga Street, Quezon City
While the respondent filed the motion in her capacity as administratrix of the Gruenberg estate, the motion for
a writ of attachment and its supporting affidavit show that the attachment was intended to secure only her
P13,000.00 claim against the estate.

A court order which violates the Rules constitutes grave abuse of discretion as it wrecks the orderly procedure
prescribed for the settlement of claims against deceased persons designed to protect the interests of the
creditors of the decedent. Allowing the private respondent in the annulment case to attach the petitioners'
properties for the benefit of her P13,000.00 claim against the estate would give her an undue advantage over
other creditors against the estate.
Moreover, the P13,000.00 claim of the respondent cannot be settled in the case for annulment of the deed of
sale, wherein the writ of attachment is sought. What she seeks to be secured is not the judgment in the main
case but a mere claim against the estate which is still to be considered and adjudicated by the court.
The rules on the issuance of a writ of attachment must be construed strictly in favor of the defendant. The
remedy of attachment is harsh, extraordinary, and summary in nature. If all the requisites for the issuance of
the writ are not present, the court which issues it acts in excess of its jurisdiction.
A preliminary attachment is a rigorous remedy, which exposes the debtor to humiliation and annoyance, such
it should not be abused as to cause unnecessary prejudice. It is, therefore, the duty of the court, before issuing
the writ, to ensure that all the requisites of the law have been complied with; otherwise the judge acts in
excess of his jurisdiction and the writ so issued shall be null and void.
Following the principle of strict compliance with all requisites, this Court has also ruled that "when the facts,
or some of them, stated in the plaintiff's affidavit are shown by the defendant to be untrue, the writ may be
considered as improperly or irregularly issued."
The February 7, 1976 motion for issuance of a writ of preliminary attachment and the affidavit of preliminary
attachment are misleading. First, the private respondent states that the "defendants are indebted to plaintiff in
the amount of P13,000.00" exclusive of interests and collection charges. Then, she avers that the "defendants
are guilty of fraud in contracting the debt or incurring the obligation due plaintiff ".
The facts in the motion and the affidavit are deceptively framed. The obligation which the respondent seeks to
secure by an attachment was between her and the late William Gruenberg, Sr. What she seeks to establish as
fraudulent was the sale between the late Mr. Gruenberg and his son. These are two entirely distinct
transactions.

A writ of attachment is a remedy ancillary to the principal proceeding.

One of the reasons for granting the motion for the issuance of a writ of preliminary attachment was the court's
finding that the petitioners' failed to file an opposition thereto. It turns out, however, that the petitioners filed
a timely opposition to the motion but it was filed in another branch of the court where the case had earlier
been assigned. Nevertheless, despite this timely opposition, the motion for reconsideration of the order for the
issuance of a writ of preliminary attachment, was summarily denied for lack of merit.

Attachment is a juridical institution which has for its purpose to secure the outcome of the trial, that is, the
satisfaction of the pecuniary obligation really contracted by a person or believed to have been contracted by
him, either by virtue of a civil obligation emanating from contract or from law, or by virtue of some crime or
misdemeanor that he might have committed, and the writ issued, granted it, is executed by attaching and
safely keeping all the movable property of the defendant, or so much thereof as may be sufficient to satisfy
the plaintiff's demands

The order which directed the issuance of a writ of preliminary attachment merely recited the grounds alleged
in the private respondent's motion without any specific details as to the supposed fraud committed by the
petitioners when they contracted the debt and the alleged disposition or concealment by the petitioners of
their properties. The order of the trial court disregards the rule that attachment being a harsh remedy, it must
be issued on concrete and specific grounds and not on general averments merely quoting the words of the
pertinent rules.

The purpose behind the filing of the complaint was to recover a piece of property allegedly belonging to the
intestate estate of the deceased. Hence, any writ of attachment necessary to secure the judgment must be
related to the protection of the estate. The writ may not issue if only to protect the personal interests of the
private respondent as a creditor of that estate.

The absence of specific grounds highlights the fact that the petitioners are not indebted to respondent Flores.
It was the late William Gruenberg who incurred the alleged indebtedness and it is his estate which owes
Flores. The validity of the claim of Flores will have to be threshed out in the special proceedings, not in the
case for annulment of the deed of sale.

The records show that the private respondent's interest in the estate is to recover a debt based on a contract
with the deceased Gruenberg, For this reason, she instituted the special proceedings for the settlement of the
intestate estate resulting to her appointment as administratrix. Under these circumstances, the private
respondent's remedy to recover the outstanding debt of the deceased is to follow the procedure in Rule 86 on
claims against an estate. As a matter of fact, if an administrator has a claim against an estate, Section 8 of
Rule 86 calls for the appointment of a special administrator to defend the estate against such claim.

Finally, the transaction sought to be annulled in the main case refers to a questioned sale of a house and lot. It
would have been sufficient to annotate a notice of lis pendens in the title to that property. Assuming the trial
court could validly attach the house and lot involved in the sale, we see no justification why the attachment
should reach out to the petitioners' interests in the Hollywood Theatre, the Palace Theatre, and the Illusion
Theatre. The petitioners also point out that there is no showing of any attempt on their part to conceal or to
dispose of the house and lot nor of any change in the title or condition of the property. Considering all the
foregoing, we find the writ of preliminary attachment to have been improvidently issued.

Obviously, this cannot be done.

6. Sievert v. CA
Facts:
1. Sievert, a citizen and resident of the Philippines, received by mail a Petition for Issuance of a
Preliminary Attachment. Petitioner had not previously received any summons and any copy of a
complaint against him in the Civil Case.
2. On the day set for hearing of the Petition for a Preliminary Writ of Attachment, petitioners
counsel went before the trial court and entered a special appearance for the limited purpose of
objecting to the jurisdiction of the court and simultaneously filed a written objection to the
jurisdiction of the trial court to hear or act upon the Petition for Issuance of a Preliminary Writ of
Attachment: Lack of jurisdiction over the person of the petitioner (defendant therein) upon the
ground that since no summons had been served upon him in the main case, no jurisdiction over the
person of the petitioner had been acquired by the trial court --- RTC denied. CA denied.

A preliminary attachment is a rigorous remedy which exposes the debtor to humiliation and annoyance, such
[that] it should not be abused as to cause unnecessary prejudice. It is, therefore; the duty of the court, before
issuing the writ, to ensure that all the requisites of the law have been complied with; otherwise the judge acts
in excess of his jurisdiction and the writ so issued shall be null and void. The above words apply with greater
force in respect of that most fundamental of requisites, the jurisdiction of the court issuing attachment over
the person of the defendant.
In the case at bar, the want of jurisdiction of the trial court to proceed in the main case against the defendant
is quite clear. It is not disputed that neither service of summons with a copy of the complaint nor voluntary
appearance of petitioner Sievert was had in this case. Yet, the trial court proceeded to hear the petition for
issuance of the writ. This is reversible error and must be corrected on certiorari.
GROUNDS FOR ISSUANCE OF A WRIT OF ATTACHMENT

Issue/Held: Whether a court which has not acquired jurisdiction over the person of the defendant in the main
case, may bind such defendant or his property by issuing a writ of preliminary attachment --- NO.
Ratio:
Trial court and the Court of Appeals held that the defendant may be bound by a writ of preliminary
attachment even before summons together with a copy of the complaint in the main case has been validly
served upon him. We are unable to agree with the respondent courts.
There is no question that a writ of preliminary attachment may be applied for a plaintiff at the
commencement of the action or at any time thereafter in the cases enumerated in Section 1 of Rule 57 of the
Revised Rules of Court. The issue posed in this case, however, is not to be resolved by determining when an
action may be regarded as having been commenced, a point in time which, in any case, is not necessarily
fixed and identical regardless of the specific purpose for which the determination is to be made critical time.
What must be identified is, rather, when the trial court acquires authority under law to act coercively
against the defendant or his property in a proceeding in attachment. We believe and so hold that that
critical time is the time of the vesting of jurisdiction in the court over the person of the defendant in the
main case.

7. K.O. Glass Const. Inc. v. Valenzuela (Grounds for issuance of a writ of attachment)
Facts:
1.

2.

3.

Attachment is an ancillary remedy. It is not sought for its own sake but rather to enable the attaching
party to realize upon relief sought and expected to be granted in the main or principal action. A court
which has not acquired jurisdiction over the person of defendant, cannot bind that defendant whether
in the main case or in any ancillary proceeding such as attachment proceedings
The service of a petition for preliminary attachment without the prior or simultaneous service of
summons and a copy of the complaint in the main caseand that is what happened in this casedoes
not of course confer jurisdiction upon the issuing court over the person of the defendant.

4.
5.

Ordinarily, the prayer in a petition for a writ of preliminary attachment is embodied or incorporated in the
main complaint itself as one of the forms of relief sought in such complaint. Thus, valid service of summons
and a copy of the complaint will in such case vest jurisdiction in the court over the defendant both for
purposes of the main case and for purposes of the ancillary remedy of attachment. In such case, notice of the
main case is at the same time notice of the auxiliary proceeding in attachment.
Where, however, the petition for a writ of preliminary attachment is embodied in a discrete pleading, such
petition must be served either simultaneously with service of summons and a copy of the main complaint, or
after jurisdiction over the defendant has already been acquired by such service of summons. Notice of the
separate attachment petition is not notice of the main action. Put a little differently, jurisdiction whether
ratione personae or ratione materiae in an attachment proceeding is ancillary to jurisdiction ratione personae
or ratione materiae in the main action against the defendant.
6.
If a court has no jurisdiction over the subject matter or over the person of the defendant in the
principal action, it simply has no jurisdiction to issue a writ of preliminary attachment against the
defendant or his property. It is basic that the requirements of the Rules of Court for issuance of preliminary
attachment must be strictly and faithfully complied with in view of the nature of this provisional remedy

An action was instituted in the Court of First Instance of Rizal by Antonio D. Pinzon to recover
from Kenneth O. Glass the sum of P37,190.00, alleged to be the agreed rentals of his truck, as well
as the value of spare parts which have not been returned to him upon termination of the lease.
a.
In his verified complaint, the plaintiff asked for an attachment against the property of
the defendant consisting of collectibles and payables with the Philippine Geothermal,
Inc., on the grounds that the defendant is a foreigner; that he has sufficient cause of
action against the said defendant; and that there is no sufficient security for his claim
against the defendant in the event a judgment is rendered in his favor.
Finding the petition to be sufficient in form and substance, the respondent Judge ordered the
issuance of a writ of attachment against the properties of the defendant upon the plaintiff's filing of
a bond in the amount of P37,190.00.
The defendant Kenneth O. Glass moved to quash the writ of attachment on the grounds that there
is no cause of action against him since the transactions or claims of the plaintiff were entered into
by and between the plaintiff and the K.O. Glass Construction Co., Inc., a corporation duly
organized and existing under Philippine laws; that there is no ground for the issuance of the writ of
preliminary attachment as defendant Kenneth O. Glass never intended to leave the Philippines,
and even if he does, plaintiff can not be prejudiced thereby because his claims are against a
corporation which has sufficient funds and property to satisfy his claim; and that the money being
garnished belongs to the K.O. Glass Corporation Co., Inc. and not to defendant Kenneth O. Glass.
By reason thereof, Pinzon amended his complaint to include K.O. Glass Construction Co., Inc. as
co-defendant of Kenneth O. Glass.
The defendants therein filed a supplementary motion to discharge and/or dissolve the writ of
preliminary attachment upon the ground that the affidavit filed in support of the motion for
preliminary attachment was not sufficient or wanting in law for the reason that: (1) the affidavit
did not state that the amount of plaintiff's claim was above all legal set-offs or counterclaims, as
required by Sec. 3, Rule 57 of the Revised Rules of Court; (2) the affidavit did not state that there
is no other sufficient security for the claim sought to be recovered by the action as also required by
said Sec. 3; and (3) the affidavit did not specify any of the grounds enumerated in Sec. 1 of Rule
57.
a.
The respondent Judge denied the motion and ordered the Philippine Geothermal, Inc. to
deliver and deposit with the Clerk of Court the amount of P37,190.00 immediately
upon receipt of the order which amount shall remain so deposited to await the
judgment to be rendered in the case.
The defendants therein filed a bond in the amount of P37,190.00 and asked the court for the
release of the same amount deposited with the Clerk of Court.
a.
The respondent Judge did not order the release of the money deposited.

Issue: Whether the writ of preliminary attachment was proper.

arising out from his failure to pay (i) service charges for the hauling of construction
materials;; (ii) rentals for the lease of plaintiff's Isuzu Cargo truck, and (iii) total cost of
the missing/destroyed spare parts of said leased unit;; hence, a sufficient cause of
action exists against said defendant. Plaintiff also avers under oath that there is no
sufficient security for his claim against the defendant in the event a judgment be
rendered in favor of the plaintiff.

Held: No, it was not.


The respondent Judge gravely abused his discretion in issuing the writ of preliminary attachment and in not
ordering the release of the money which had been deposited with the Clerk of Court for the following
reasons:
I.

There was no ground for the issuance of the writ of preliminary attachment.

Section 1, Rule 57 of the Revised Rules of Court, which enumerates the grounds for the issuance of a writ of
preliminary attachment, reads, as follows:
Sec. 1. Grounds upon which attachment may issue. A plaintiff or any proper party
may, at the commencement of the action or at any time thereafter, have the property of
the adverse party attached as security for the satisfaction of any judgment that may be
recovered in the following cases:
(a) In an action for the recovery of money or damages on a cause of action arising from
contract, express or implied, against a party who is about to depart from the Philippines
with intent to defraud his creditor;
(b) In an action for money or property embezzled or fraudulently misapplied or
converted to his own use by a public officer, or an officer of a corporation, or an
attorney, factor, broker, agent, or clerk, in the course of his employment as such, or by
any other person in a fiduciary capacity, or for a willful violation of duty;
(c) In an action to recover the possession of personal property unjustly detained, when
the property, or any part thereof, has been concealed, removed, or disposed of to
prevent its being found or taken by the applicant or an officer;
(d) In an action against the party who has been guilty of a fraud in contracting the debt
or incurring the obligation upon which the action is brought, or in concealing or
disposing of the property for the taking, detention or conversion of which the action is
brought;
(e) In an action against a party who has removed or disposed of his property, or is
about to do so, with intent to defraud his creditors;
(f) In an action against a party who resides out of the Philippines, or on whom
summons may be served by publication.
In ordering the issuance of the controversial writ of preliminary attachment, the respondent Judge said and
We quote:
The plaintiff filed a complaint for a sum of money with prayer for Writ of Preliminary
Attachment dated September 14, 1977, alleging that the defendant who is a foreigner
may, at any time, depart from the Philippines with intent to defraud his creditors
including the plaintiff herein; that there is no sufficient security for the claim sought to
be enforced by this action; that the amount due the plaintiff is as much as the sum for
which an order of attachment is sought to be granted; and that defendant has sufficient
leviable assets in the Philippines consisting of collectibles and payables due from
Philippine Geothermal, Inc., which may be disposed of at any time, by defendant if no
Writ of Preliminary Attachment may be issued. Finding said motion and petition to be
sufficient in form and substance.
Pinzon however, did not allege that the defendant Kenneth O. Glass "is a foreigner (who) may, at any time,
depart from the Philippines with intent to defraud his creditors including the plaintiff." He merely stated that
the defendant Kenneth O. Glass is a foreigner.
The pertinent portion of the complaint reads, as follows:
15. Plaintiff hereby avers under oath that defendant is a foreigner and that said
defendant has a valid and just obligation to plaintiff in the total sum of P32,290.00

However, defendant has sufficient assets in the Philippines in the form of collectible and payables due from
the Philippine Geothermal, Inc. with office address at Citibank Center, Paseo de Roxas, Makati, Metro
Manila, but which properties, if not timely attached, may be disposed of by defendants and would render
ineffectual the reliefs prayed for by plaintiff in this Complaint.
In his Amended Complaint, Pinzon alleged the following:
15. Plaintiff hereby avers under oath that defendant GLASS is an American citizen who controls
most, if not all, the affairs of defendant CORPORATION. Defendants CORPORATION and
GLASS have a valid and just obligation to plaintiff in the total sum of P32,290.00 arising out for
their failure to pay (i) service charges for hauling of construction materials, (ii) rentals for the
lease of plaintiff's Isuzu Cargo truck, and (iii) total cost of the missing/destroyed spare parts of
said leased unit: hence, a sufficient cause of action exist against said defendants. Plaintiff also
avers under oath that there is no sufficient security for his claim against the defendants in the event
a judgment be rendered in favor of the plaintiff. however, defendant CORPORATION has
sufficient assets in the Philippines in the form of collectibles and payables due from the Philippine
Geothermal., Inc. with office address at Citibank Center, Paseo de Roxas, Makati, Metro Manila,
but which properties, if not timely attached, may be disposed of by defendants and would render
ineffectual the reliefs prayed for by plaintiff in this Complaint.
There being no showing, much less an allegation, that the defendants are about to depart from the Philippines
with intent to defraud their creditor, or that they are non-resident aliens, the attachment of their properties is
not justified.
II.

The affidavit submitted by Pinzon does not comply with the Rules.

Under the Rules, an affidavit for attachment must state that (a) sufficient cause of action exists; (b) the case is
one of those mentioned in Section I (a) of Rule 57; (c) there is no other sufficient security 'or the claim sought
to be enforced by the action; and (d) the amount due 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 all legal counterclaims.
Section 3, Rule 57 of the Revised Rules of Court reads. as follows:
Section 3. Affidavit and bond required.An order of attachment shall be granted only
when it is made to appear by the affidavit of the applicant, or of some person who
personally knows the facts, that a sufficient cause of action exists that the case is one of
those mentioned in Section 1 hereof;; that there is no other sufficient security for the
claim sought to be enforced by the action, and that the amount due to the applicant, 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 all legal counterclaims. The affidavit, and
the bond required by the next succeeding section, must be duly filed with the clerk or
judge of the court before the order issues.
In his affidavit, Pinzon stated the following:
I, ANTONIO D. PINZON Filipino, of legal age, married and with residence and postal
address at 1422 A. Mabini Street, Ermita, Manila, subscribing under oath, depose and
states that.

1. On October 6,1977,I filed with the Court of First Instance of Rizal, Pasay City
Branch, a case against Kenneth O. Glass entitled 'ANTONIO D. PINZON vs.
KENNETH O. GLASS', docketed as Civil Case No. 5902-P;
2. My Complaint against Kenneth O. Glass is based on several causes of action,
namely: (i) On February 15, 1977, we mutually agreed that I undertake to haul his
construction materials from Manila to his construction project in Bulalo, Bay, Laguna
and vice-versa, for a consideration of P50.00 per hour; (ii) Also, on June 18, 1977, we
entered into a separate agreement whereby my Isuzu cargo truck will be leased to him
for a consideration of P4,000.00 a month payable on the 15th day of each month; (iii)
On September 7, 1977, after making use of my Isuzu truck, he surrendered the same
without paying the monthly rentals for the leased Isuzu truck and the peso equivalent of
the spare parts that were either destroyed or misappropriated by him;
3. As of today, October 11, 1977, Mr. Kenneth 0. Glass still owes me the total sum of
P32,290.00 representing his obligation arising from the hauling of his construction
materials, monthly rentals for the lease Isuzu truck and the peso equivalent of the spare
parts that were either destroyed or misappropriated by him;
4. I am executing this Affidavit to attest to the truthfulness of the foregoing and in
compliance with the provisions of Rule 57 of the Revised Rules of Court.
While Pinzon may have stated in his affidavit that a sufficient cause of action exists against the defendant
Kenneth O. Glass, he did not state therein that "the case is one of those mentioned in Section 1 hereof; that
there is no other sufficient security for the claim sought to be enforced by the action; and that the amount due
to the applicant is as much as the sum for which the order granted above all legal counter-claims."
It has been held that the failure to allege in the affidavit the requisites prescribed for the issuance of a writ of
preliminary attachment, renders the writ of preliminary attachment issued against the property of the
defendant fatally defective, and the judge issuing it is deemed to have acted in excess of his jurisdiction.
III.

It appears that the petitioner has filed a counterbond in the amount of P37,190.00 to answer
for any judgment that may be rendered against the defendant.

Upon receipt of the counter-bond the respondent Judge should have discharged the attachment pursuant to
Section 12, Rule 57 of the Revised Rules of Court which reads, as follows:
Section 12. Discharge of attachment upon giving counterbond.At any time after an
order of attachment has been granted, the party whose property has been attached, or
the person appearing on his behalf, may upon reasonable notice to the applicant, apply
to the judge who granted the order, or to the judge of the court in which the action is
pending, for an order discharging the attachment wholly or in part on the security
given. The judge shall, after hearing, order the discharge of the attachment if a cash
deposit is made or a counterbond executed to the attaching creditor is filed, on behalf
of the adverse party, with the clerk or judge of the court where the application is made,
in an amount equal to the value of the property attached as determined by the judge, to
secure the payment of any judgment that the attaching creditor may recover in the
action. Upon the filing of such counter-bond, copy thereof shall forthwith be served on
the attaching creditor or his lawyer. Upon the discharge of an attachment in accordance
with the provisions of this section the property attached, or the proceeds of any sale
thereof, shall be delivered to the party making the deposit or giving the counter-bond,
or the person appearing on his behalf, the deposit or counter-bond aforesaid standing in
the place of the property so released. Should such counter-bond for any reason be
found to be, or become, insufficient, and the party furnishing the same fail to file an
additional counter-bond the attaching creditor may apply for a new order of
attachment.

The filing of the counter-bond will serve the purpose of preserving the defendant's property and at the same
time give the plaintiff security for any judgment that may be obtained against the defendant.
8. Olsen & Co. v. Olsen
Facts:
1. Defendant-appellant admits that he is indebted to the plaintiff-appellee corporation in the sum of
P66k, but denies that he has contracted said debt fraudulently.
2. Evidence shows that the defendant-appellant was president-treasurer and general manager of the
corporation and exercised direct and almost exclusive supervision over its function, funds and
books of account.
3. During that time he has been taking money of the corporation without being duly authorized to do
so either by the board of directors or by the by-laws, the money taken by him having amounted to
the considerable sum of P66k. Of this sum, P19k was invested in the purchase of the house and
lot now under attachment in this case, and P50k in the purchase of 500 shares of stock of
Prising at the price of P100 per share for himself and Marker.
4. A few days afterwards he began to sell the ordinary shares of the corporation for P430 each. The
defendant-appellant attempted to justify his conduct, alleging that the withdrawal of the funds of
the corporation for his personal use was made in his current account with said corporation, in
whose treasury he deposited his own money and the certificates of title of his shares, as well as of
his estate, and that at the first meeting of the stockholders, a statement of his account with a debit
balance was submitted and approved.
5. This is an appeal taken by the defendant from a judgment of the Court of First Instance of Manila,
sentencing him to pay plaintiff corporation.
Issue/Held: Whether or not the trial court committed error in denying the motion for the annulment of the
preliminary attachment levied upon the property of the defendant-appellant --- NO.
Ratio:
The preliminary attachment is an auxiliary remedy the granting of which lies within the sound discretion of
the judge taking cognizance of the principal case upon whose existence it depends. The order of the judge
denying a motion for the annulment of a writ of preliminary attachment, being of an incidental or
interlocutory and auxiliary character, cannot be the subject of an appeal independently from the principal
case, because our procedural law now in force authorizes an appeal only from a final judgment which gives
an end to the litigation. While it is true that an order denying a motion for the annulment of a preliminary
attachment is not subject to review through an appeal independently from the principal case, it not
constituting a final order, yet when the writ of preliminary attachment becomes final by virtue of a final
judgment rendered in the principal case, said writ is subject to review jointly with the judgment rendered in
the principal case through an ordinary appeal. The appellate court has the power to revoke or confirm said
order, in like manner as a judgment on the merits; because it is a ruling to which an exception may be taken,
and therefore is subject to review in an appeal by bill of exceptions.
Having, as he had, absolute and almost exclusive control over the function of the corporation and its funds by
virtue of his triple capacity as president, treasurer and general manager, the defendant-appellant should have
been more scrupulous in the application of the funds of said corporation to his own use. As a trustee of said
corporation, it was his duty to see by all legal means possible that the interests of the stockholders were
protected, and should not abuse the extraordinary opportunity which his triple position offered him to dispose
of the fund. The approval of his account at the first meeting of the stockholders cannot be considered as a
justification of his conduct, nor does it remove every suspicion of bad faith, because the corporation was
constituted exclusively by the defendant-appellant himself and his cospeculator, Marker, and nothing else
could be expected from it.
As to the debt he owed to the corporation, Walter E. Olsen was in effect a lender and a borrower at the same
time. The conduct of the defendant-appellant in connection with the funds of the corporation he
represented was more than an irregularity. While it is not sufficiently serious to constitute a criminal
fraud, it is undoubtedly a fraud of a civil character, because it is an abuse of confidence to the damage
of the corporation and its stockholders and constitutes one of the grounds enumerated in section 424, in
connection with section 412, of the Code of Civil Procedure for the issuance of a preliminary

attachment, and the order of the Court of First Instance of Manila, denying the motion for the
annulment of the injunction in question, is in accordance with law.
9. Aboitiz v. Cotabato Bus Co. (Grounds for issuance of a writ of attachment)
Facts:
1.

2.

3.

4.
5.

The instant petition stemmed from Civil Case No. 7329 of the Court of First Instance of Davao in
which a writ of preliminary attachment was issued ex-parte by the court on the strength of an
affidavit of merit attached to the verified complaint filed by petitioner herein, Aboitiz & Co., Inc.
as plaintiff in said case, for the collection of money in the sum of P 155,739.41, which defendant
therein, the respondent in the instant case, Cotabato Bus Co., owed the said petitioner.
By virtue of the writ of preliminary attachment, the provincial sheriff attached personal properties
of the defendant bus company consisting of some buses, machinery and equipment. The ground
for the issuance of the writ is, as alleged in the complaint and the affidavit of merit executed by the
Assistant Manager of petitioner, that the defendant "has removed or disposed of its properties or
assets, or is about to do so, with intent to defraud its creditors."
Respondent company filed in the lower court an "Urgent Motion to Dissolve or Quash Writ of
Attachment" to which was attached an affidavit executed by its Assistant Manager, Baldovino
Lagbao, alleging among other things that "the Cotabato Bus Company has not been selling or
disposing of its properties, neither does it intend to do so, much less to defraud its creditors; that
also the Cotabato Bus Company, Inc. has been acquiring and buying more assets".
a.
An opposition and a supplemental opposition were filed to the urgent motion.
b. The lower court denied the motion stating in its Order that "the testimony of Baldovino
Lagbao, witness for the defendant, corroborates the facts in the plaintiff's affidavit
instead of disproving or showing them to be untrue."
A motion for reconsideration was filed by the defendant bus company but the lower court denied
it.
Hence, the defendant went to the Court of Appeals on a petition for certiorari.
a.
On giving due course to the petition, the Court of Appeals issued a restraining order
restraining the trial court from enforcing further the writ of attachment and from
proceeding with the hearing of Civil Case No. 7329. In its decision, the Court of
Appeals declared "null and void the order/writ of attachment, ordered the release of the
attached properties, and made the restraining order originally issued permanent.

Whether the writ of attachment was properly issued upon a showing that defendant is on the verge of
insolvency and may no longer satisfy its just debts without issuing the writ (this may be inferred from the
emphasis laid by petitioner on the fact that even for the measly amount of P 634.00 payment thereof was
made with a personal check of the respondent company's president and majority stockholder, and its debts to
several creditors, including secured ones like the DBP, have remained unpaid, despite its supposed daily
income of an average of P 12,000.00, as declared by its assistant manager, Baldovino Lagbao).
Issue: Whether insolvency, which petitioners in effect claims to have been proven by the evidence,
particularly by company's bank account which has been reduced to nil, may be a ground for the issuance of a
writ of attachment.
Held: No.
Ratio:
Petitioner, however, disclaims any intention of advancing the theory that insolvency is a ground for the
issuance of a writ of attachment , and insists that its evidence is intended to prove his assertion that
respondent company has disposed, or is about to dispose, of its properties, in fraud of its creditors. Aside
from the reference petitioner had made to respondent company's "nil" bank account, as if to show removal of
company's funds, petitioner also cited the alleged non- payment of its other creditors, including secured
creditors like the DBP to which all its buses have been mortgaged, despite its daily income averaging
P12,000.00, and the rescue and removal of five attached buses.

It is an undisputed fact that, as averred by petitioner itself, the several buses attached are nearly junks.
However, upon permission by the sheriff, five of them were repaired, but they were substituted with five
buses which were also in the same condition as the five repaired ones before the repair. This cannot be the
removal intended as ground for the issuance of a writ of attachment under section 1 (e), Rule 57, of the Rules
of Court. The repair of the five buses was evidently motivated by a desire to serve the interest of the riding
public, clearly not to defraud its creditors, as there is no showing that they were not put on the run after their
repairs, as was the obvious purpose of their substitution to be placed in running condition.
Moreover, as the buses were mortgaged to the DBP, their removal or disposal as alleged by petitioner to
provide the basis for its prayer for the issuance of a writ of attachment should be very remote, if not nil. If
removal of the buses had in fact been committed, which seems to exist only in petitioner's apprehensive
imagination, the DBP should not have failed to take proper court action, both civil and criminal, which
apparently has not been done.
The dwindling of respondent's bank account despite its daily income of from P10,000.00 to P14,000.00 is
easily explained by its having to meet heavy operating expenses, which include salaries and wages of
employees and workers. If, indeed the income of the company were sufficiently profitable, it should not allow
its buses to fall into disuse by lack of repairs. It should also maintain a good credit standing with its suppliers
of equipment, and other needs of the company to keep its business a going concern. Petitioner is only one of
the suppliers.
It is, indeed, extremely hard to remove the buses, machinery, and other equipment which respondent
company have to own and keep to be able to engage and continue in the operation of its transportation
business. The sale or other form of disposition of any of this kind of property is not difficult of detection or
discovery, and strangely, petitioner, has adduced no proof of any sale or transfer of any of them, which should
have been easily obtainable.
10. Carpio v. Macadaeg
Facts:
1. Carpio filed this petition for certiorari and prohibition to annul and stop implementation of
respondent Judges orders, directing the sale of five racehorses and goods previously attached
upon motion of respondent Oscar Abaya.
2. Court issued a writ of preliminary injunction to restrain the sale, with instructions to respondent
Sheriff of Rizal to allow the daily training of the said horses and their participation in races
whenever they were included in the racing programs.
3. Oscar Abaya filed a complaint against petitioner for the recovery of various sums aggregating
P25k. Before summons was served, and upon ex parte motion of respondent Abaya, respondent
Judge issued two orders of attachment. Sheriff of Manila garnished goods consisting of hardware
imported by petitioner, Sheriff of Rizal seized petitioners five racing horses.
4. Petitioner filed an urgent petition to discharge the orders of attachment. Judge gave an order to set
aside the two orders. Upon two motions of respondent, judge set aside the previous order. Sheriff
of Manila garnished the aforementioned goods and respondent Sheriff of Rizal attached the five
racing horses. Judge issued an order directing the sale at public auction of the five racing horses.
5. Sale was halted by petitioners putting up a bond of P4k and the horses were released to him by
respondent Sheriff. Upon motion of respondent Abaya, respondent Judge ordered the increase of
the bond to P10k and ordered respondent Sheriff of Rizal to proceed with the sale of the horses
should petitioner failed to file the additional bond. MRs denied. Judge issued an order authorizing
the sale of the garnished goods.
Issue/Held: Whether or not respondent judge had the authority to issue the two writs of preliminary
attachment --- NO.
Ratio:
Judge should not have issued the two writs of preliminary attachment on Abayas simple allegation
that the petitioner was about to dispose of his property, thereby leaving no security for the satisfaction
of any judgment. Mere removal or disposal of property, by itself, is not ground for issuance of
preliminary attachment, notwithstanding absence of any security for the satisfaction of any judgment

a.

against the defendant. Removal or disposal, to justify preliminary attachment, must have been made
with intent to defraud defendants creditors
Respondent Judge in fact corrected himself. Acting on petitioners motion to discharge attachment and
apparently believing the correctness of the grounds alleged therein, he set aside the orders of attachment. But
reversing himself again, he set aside his order. This he did apparently on Abayas contention that petitioner
was about to remove or dispose of his property in order to defraud his creditors, as examples of which
disposals he pointed to the alleged sale of the horses and of petitioners office furniture. These averments of
fraudulent disposals were controverted by petitioner who, in his opposition to Abayas motions for
reconsideration reiterated the defenses against preliminary attachment which he had previously enumerated in
his petition to discharge the two orders of attachment. Thus the question of fraudulent disposal was put in
issue; and respondent Judge, before issuing the preliminary attachment anew, should have given the
parties opportunity to prove their respective claims or, at the very least, should have provided
petitioner with the chance to show that he had not been disposing of his property in fraud of creditors.
But for much more than the above reason, respondent Judge should not have again ordered the issuance of the
writ of preliminary attachment since Abaya never made any affidavit as required by Rule 59, Rules of Court.
WHEREFORE, the order and all succeeding orders of respondent Judge with respect to said preliminary
attachment, are hereby declared null and void; the attached properties are ordered released; and the
preliminary injunction issued by this Court is made permanent.

7.

11. Tanchan v. Allied Banking Corporation (Grounds for issuance of a writ of attachment)
8.
Facts:
1.

2.

3.

4.
5.

6.

For value received, Cebu Foremost Construction, Inc. through its Chairman and President Henry
Tanchan and his spouse, Vice-President and Treasurer Ma. Julie Ann Tanchan executed and
delivered to Allied Banking Corporation (respondent) seven US$ promissory notes, for
US$379,000.00. Foremost also issued to respondent several Philippine peso promissory notes
covering various loans in the aggregate amount of Php28,900,000.00.
All the foregoing promissory notes are secured by two Continuing Guaranty/ Comprehensive
Surety Agreements executed in the personal capacities of spouses and Henrys brother, herein
petitioner Santiago Tanchan for himself and as attorney-in-fact of his wife and co-petitioner
Rufina Tanchan under a Special Power of Attorney. The liability of the sureties under both
CG/CSAs is limited to Php150,000,000.00.
a.
The promissory notes are secured not only by the two CG/CSAs but also by a Real
Estate Mortgage executed by Henry, for himself and as the legal guardian of the minors
Henry Paul L. Tanchan and Don Henry L. Tanchan; his wife Ma. Julie Ann;; and
Spouses Pablo and Milagros Lim, over real properties registered in their names in Cebu
City.
In separate final demand letters, respondent sought from Foremost payment of US$1,054,000.00,
as the outstanding principal balance, exclusive of interest and charges, of its obligations. Separate
demands for payment were also made upon Spouses Tanchan and the petitioners as sureties.
Foremost offered to cede to respondent, by way of dacion en pago, the mortgaged real properties
in full payment of its loan obligations.
Respondent instituted the extra-judicial foreclosure of the real estate mortgage to satisfy its claim
against Foremost in the aggregate amount of Php55,578,826.77, inclusive of interest, other
charges and attorney's fees, equivalent to 10% of the total amount due plus the costs and expenses
of foreclosure. At the public auction sale, respondents bid of only Php37,745,283.67 for all the
mortgaged properties, including the buildings and improvements thereon, was adjudged the sole
and highest bid.
Respondent filed with the RTC a Complaint for Collection of Sum of Money with Petition for
Issuance of Writ of Preliminary Injunction against Foremost, Spouses Tanchan and herein
petitioners (collectively referred to as Foremost, et al.), praying that they be ordered to pay, jointly
and severally.

9.

In support of its application for issuance of a writ of preliminary attachment,


respondent submitted an Affidavit executed by Elmer Elumbaring, Branch
Cashier/Loans Supervisor, Cebu, Jakosalem Branch, stating that:
i. 4. Defendants [Foremost, et al.] committed fraud in contracting the
obligations upon which the action is brought in that: a) to induce plaintiff
[respondent] to grant the credit accommodation they represented to the
plaintiff [respondent] that they were in a financial position to pay their
obligations on maturity date in consideration of which plaintiff [respondent]
granted the credit accommodations. It turned out, however, that they were
not in such financial position when they failed to pay their obligations on
maturity date; b) they falsely represented that the proceeds of the Loan
would be used as additional working capital in consideration of which,
plaintiff [respondent] granted the loans but when defendants [Foremost, et
al.] received the said proceeds, they diverted the same to a purpose other
than that for which they were intended as shown by the fact that defendants
[Foremost, et al.] were not able to fully pay the obligations at its maturity
date;
ii. 5. There is no security whatsoever for the claim plaintiff [respondent] seeks
to enforce by this action, and only by the issuance of a writ of preliminary
attachment can its interest be protected.
The application for writ of preliminary attachment was granted by the RTC. Thus, armed with a
writ of attachment, the sheriff levied several parcels of land registered in the name of Foremost, et
al.
In their Amended Answer with Counterclaim, Foremost, et al. acknowledged the authenticity and
due execution of the promissory notes but denied liability for the amounts alleged in the
Complaint, the computation of which they dispute due to the arbitrariness of the imposition of new
interest rates. They impugned the cause of action of respondent to collect the amount due in view
of the bank's prior extra-judicial foreclosure of the securities thereon, which recourse bars
collection of the amounts due on the same promissory notes.
a.
Foremost, et al. questioned the inclusion of Rufina as a party-defendant even when she
was not bound by the CG/CSAs which her husband Santiago signed in excess of his
authority under the special power of attorney to contract loans for the family but not to
guarantee loans obtained by third persons.
b. The issuance of the writ of preliminary attachment was likewise objected to by
Foremost on the ground that it contracted the loans in good faith but was prevented
from paying the same only because of the economic crisis that beset the country.
On the part of Spouses Tanchan and herein petitioners, they claim that they had no personal
participation or influence in the loan transactions except to ensure its payment; hence, they could
not have practiced fraud upon respondent because they did not personally contract the loans with
it. respondent in causing the unwarranted preliminary attachment of their properties.

10. The RTC rendered a decision ordering defendants Cebu Foremost Construction, Inc., Santiago
Tanchan, Jr., Rufina C. Tanchan, Henry Tanchan and Ma. Julie Ann Tanchan, solidarily, [to] pay
plaintiff Allied Banking Corporation.
11. Foremost, et al. filed a Motion for Partial Reconsideration of Decision on the ground that
respondent failed to state a cause of action for the payment of any deficiency account under
Exhibit G and Exhibit H. Its Complaint does not contain any allegation regarding a deficiency
account; nor even an allusion to the foreclosure sale conducted in partial satisfaction of said
promissory notes. Although in its Amended Pre-trial Brief, respondent mentioned that a deficiency
account remained after the foreclosure of the real estate mortgage, such statement did not have the
effect of amending the Complaint itself. Neither did the testimonies of Bandilla and Elumbaring
about a deficiency account take the place of a specific allegation of such cause of action in the
Complaint. Thus, in the absence of an allegation in the Complaint of a cause of action for the
payment of a deficiency account, the RTC had no factual or legal basis to grant such claim.
a.
Spouses Tanchan and herein petitioners also filed a Motion to Lift the Writ of
Preliminary Attachment.

12. The RTC denied the Motion to Lift the Writ of Attachment and the Motion for Partial
Reconsideration.
13. Foremost, et al. appealed to the CA, which was dismissed.

unpaid; that defendants are disposing/concealing their properties with intent to defraud the plaintiff and/or are
guilty of fraud in the performance of their obligations; and that there is no security whatsoever for the claim
sought to be enforced.

The issues involve the validity of the writ of preliminary attachment as against the properties of petitioners
only, but not as against the properties of Foremost and Spouses Tanchan, neither of whom appealed before
the Court.

Petitioners argue that the foregoing allegations are not sufficient to justify issuance of the writ, especially in
the absence of findings that they, as sureties, participated in specific fraudulent acts in the execution and
performance of the loan agreements with respondent.

One of the grounds cited by the CA in refusing to discharge the writ of attachment is that it is now too late
for [petitioners] to question the validity of the writ because they waited three long years to have it lifted or
discharged.

In refusing to lift the writ, the RTC held that the lack of a specific factual finding of fraud in its decision is not
among the grounds provided under Sections 12 and 13, Rule 57 of the Rules of Court for the discharge of the
writ. The CA agreed for the reason that the RTC's affirmative action on the complaint filed by respondent
signifies its agreement with the allegations found therein that Foremost, et al., including herein petitioners,
committed fraudulent acts in procuring loansfromrespondent.

Under Section 13, Rule 57 of the Rules of Court, a party whose property has been ordered attached may file a
motion with the court in which the action is pending for the discharge of the attachment on the ground that
it has been improperly issued or enforced. In addition, said party may file, under Section 20, Rule 57, a claim
for damages on account of improper attachment within the following periods:
Sec. 20. Claim for damages on account of improper, irregular or excessive attachment.
- An application for damages on account of improper, irregular or excessive attachment
must be filed before the trial or before appeal is perfected or before the judgment
becomes executory, with due notice to the attaching obligee or his surety or sureties,
setting forth the facts showing his right to damages and the amount thereof. Such
damages may be awarded only after proper hearing and shall be included in the
judgment on the main case. If the judgment of the appellate court be favorable to the
party against whom the attachment was issued, he must claim damages sustained
during the pendency of the appeal by filing an application in the appellate court with
notice to the party in whose favor the attachment was issued or his surety or sureties,
before the judgment of the appellate court becomes executory. The appellate court may
allow the application to be heard and decided by the trialcourt.
Records reveal that the RTC issued the writ of preliminary attachment on November 3, 1998, and as early as
March 23, 1999, in their Amended Answer with Counterclaim, petitioners already sought the discharge of the
writ. Moreover, after the RTC rendered its Decision on August 3, 2001 but before appeal therefrom was
perfected, petitioners filed on August 23, 2001 a Motion to Lift the Writ of Preliminary Attachment,
reiterating their objection to the writ and seeking payment of damages for its wrongful issuance.
Clearly, petitioners' opposition to the writ was timely.
Issue: Whether petitioner has a valid reason to have the writ discharged and to claim damages.
Held: There was no factual basis for the issuance of a writ of preliminary attachment against the properties of
petitioners. The immediate dissolution of the writ is called for. In so ruling, however, the Court does not go so
far as to grant petitioners' claim for moral damages.
The questioned writ of preliminary attachment was issued by the RTC under Section 1(d), Rule 57 of the
Rules of Court, to wit,:
Sec. 1. Grounds upon which attachment may issue. - A plaintiff or any proper party
may, at the commencement of the action or at any time thereafter, have the property of
the adverse party attached as security for the satisfaction of any judgment that may be
recovered in the following cases:

Both courts are in error.


The present case fits perfectly into the mold of Allied Banking Corporation v. South Pacific Sugar
Corporation, where a writ of preliminary attachment issued in favor of Allied Banking Corporation was
discharged by the lower courts for lack of evidence of fraud. In sustaining the discharge of the writ, the Court
held Such general averment will not suffice to support the issuance of the writ of preliminary attachment.
It is necessary to recite in what particular manner an applicant for the writ of attachment was defrauded.
In the aforecited case -- as in the present case -- the bank presented the testimony of its account officer who
processed the loan application, but the Court discarded her testimony for it did not detail how the corporation
induced or deceived the bank into granting the loans
Also apropos is Ng Wee v. Tankiansee where the appellate court was questioned for discharging a writ of
preliminary attachment to the extent that it affected the properties of respondent Tankiansee, a corporate
officer of Wincorp, both defendants in the complaint for damages which petitioner Ng Wee had filed with the
trial court. In holding that the appellate court correctly spared respondent Tankiansee from the writ of
preliminary attachment, the Court cited the following basis: As to the participation of respondent in the
said transaction, the affidavit merely states that respondent, an officer and director of Wincorp, connived with
the other defendants in the civil case to defraud petitioner of his money placements. No other factual
averment or circumstance details how respondent committed a fraud or how he connived with the other
defendants to commit a fraud in the transaction sued upon. In other words, petitioner has not shown any
specific act or deed to support the allegation that respondent is guilty of fraud. Verily, the mere fact that
respondent is an officer and director of the company does not necessarily give rise to the inference that he
committed a fraud or that he connived with the other defendants to commit a fraud. While under certain
circumstances, courts may treat a corporation as a mere aggroupment (ano yan???) of persons, to whom
liability will directly attach, this is only done when the wrongdoing has been clearly and convincingly
established.
Indeed, a writ of preliminary attachment is too harsh a provisional remedy to be issued based on mere
abstractions of fraud. Rather, the rules require that for the writ to issue, there must be a recitation of clear and
concrete factual circumstances manifesting that the debtor practiced fraud upon the creditor at the time of the
execution of their agreement in that said debtor had a pre-conceived plan or intention not to pay the creditor.
Being a state of mind, fraud cannot be merely inferred from a bare allegation of non-payment of debt or nonperformance of obligation.

(d) In an action against a party who has been guilty of a fraud in contracting the debt or
incurring the obligation upon which the action is brought, or in concealing or disposing
of the property for the taking, detention or conversion of which the action is brought;

As shown in Ng Wee, the requirement becomes all the more stringent when the application for preliminary
attachment is directed against a defendant officer of a defendant corporation, for it will not be inferred from
the affiliation of one to the other that the officer participated in or facilitated in any fraudulent practice
attributed to the corporation. There must be evidence clear and convincing that the officer committed a fraud
or connived with the corporation to commit a fraud; only then may the properties of said officer, along with
those of the corporation, be held under a writ of preliminary attachment.

and on the basis solely of respondent's allegations in its Complaint that defendants [Foremost, et al.] failed to
pay their obligations on maturity dates, with the amount of US$1,054,000.00 and Php7,466795.69 remaining

There is every reason to extend the foregoing rule, by analogy, to a mere surety of the defendant. A surety's
involvement is marginal to the principal agreement between the defendant and the plaintiff; hence, in order

for the surety to be subject to a proceeding for issuance of a writ of preliminary attachment, it must be shown
that said surety participated in or facilitated the fraudulent practice of the defendant, such as by offering a
security solely to induce the plaintiff to enter into the agreement with the defendant.
There is neither allegation nor innuendo in the Complaint of respondent or the Affidavit of Elumbaring that
petitioners as sureties or officers of Foremost participated in or facilitated the commission of fraud by
Foremost, et al. against respondent. In fact, there is no mention of petitioners, much less a recital of their role
or influence in the execution of the loan agreements. The RTC cited an allegation that petitioners are
disposing/concealing their properties with intent to defraud respondent, but there is no hint of such scheme in
the five paragraphs of the Complaint or in the four corners of the Affidavit of Elumbaring. All that is alleged
is that Foremost obtained loans from respondent but failed to pay the same, but as the Court has repeatedly
held, no fraud can be inferred from a mere failure to pay a loan.
There was no factual basis for the issuance of a writ of preliminary attachment against the properties
of petitioners. The immediate dissolution of the writ is called for.

denied. Order for issuance of an alias writ of garnishment was subsequently issued. More than two
(2) years later, the present Petition for Certiorari and Prohibition was filed for grave abuse of
discretion.
Issue: Whether or not Judge Ramolete acted with grave abuse of discretion --- NO.
Ratio:
We find no grave abuse of discretion or act in excess of or without jurisdiction on the part of respondent
Judge Ramolete in ordering the garnishment of the judgment debtors thirdparty liability insurance.
Garnishment is a species of attachment for reaching any property or credits pertaining or payable to a
judgment debtor. In legal contemplation, it is a forced novation by the substitution of creditors: the judgment
debtor, who is the original creditor of the garnishee is, through service of the writ of garnishment, substituted
by the judgment creditor who thereby becomes creditor of the garnishee also been described as a warning to a
person having in his possession property or credits of the judgment debtor, not to pay the money or deliver
the property to the latter, but rather to appear and answer the plaintiffs suit.

In so ruling, however, the Court does not go so far as to grant petitioners' claim for moral damages.
A wrongful attachment may give rise to liability for moral damages but evidence must be adduced not only of
the torment and humiliation brought upon the defendant by the attaching party but also of the latter's bad faith
or malice in causing the wrongful attachment, such as evidence that the latter deliberately made false
statements in its application for attachment. Absent such evidence of malice, the attaching party cannot be
held liable for moral damages.
In the present case, petitioners cite the allegations made by respondent in its application for attachment as
evidence of bad faith. However, the allegations in question contain nothing but the stark truth that Foremost
obtained loans and that it failed to pay. The Court fails to see any malice in such bare allegations as would
make respondent liable to petitioners for moral damages.
To recapitulate, the Court partly dissolves the writ of preliminary attachment for having wrongfully issued
against the properties of petitioners who were not shown to have committed fraud in the execution of the loan
agreements between Foremost and respondent, but declines to award moral damages to petitioners in the
absence of evidence that respondent acted with malice in causing the wrongful issuance of the writ.
12. Perla Compania v. Ramolete
Facts:
1. Cimarron PUJ owned and registered in the name of Enriquez, and driven by Casas, collided with a
private jeep owned by the late Palmes. The impact of the collision was such that the private jeep
was flung away to a distance of about thirty (30) feet and then fell on its right side pinning down
Palmes who was then driving the private jeep. Palmes died and Borbon who was only 2 years old
suffered physical injuries.
2. Widow of Calixto Palmes and the father of minor Adeudatus Borbon filed a complaint against
Cosme Casas and Nelia Enriquez before the CFI of Cebu claiming damages as a result of the
accident. Judge Ramolete ordered the Borbon claim excluded from the complaint, without
prejudice to its being filed with the proper inferior court.
3. CFI rendered a Decision in favor of private respondent Primitiva Palmes, ordering common carrier
Nelia Enriquez to pay. The judgment of the trial court became final and executory and a writ of
execution was thereafter issued. The writ of execution was, however, returned unsatisfied. The
judgment debtor Nelia Enriquez was summoned before the trial court for examination. She
declared under oath that the Cimarron PUJ registered in her name was covered by a third-party
liability insurance policy issued by petitioner Perla.
4. Private respondent Palmes filed a motion for garnishment praying that an order of garnishment be
issued against the insurance policy issued by petitioner in favor of the judgment debtor. Judge
issued an Order directing the Provincial Sheriff or his deputy to garnish the third-party liability
insurance policy.
5. Petitioner moved for reconsideration and for quashal of the writ of garnishment, alleging that the
writ was void on the ground that it (Perla) was not a party to the case and that jurisdiction over its
person had never been acquired by the trial court by service of summons or by any process:

In order that the trial court may validly acquire jurisdiction to bind the person of the garnishee, it is not
necessary that summons be served upon him. The garnishee need not be impleaded as a party to the case. All
that is necessary for the trial court lawfully to bind the person of the garnishee or any person who has in his
possession credits belonging to the judgment debtor is service upon him of the writ of garnishment.
Rules of Court themselves do not require that the garnishee be served with summons or impleaded in the case
in order to make him liable.
Rule 39, Section 15 provides: Sec. 15. Execution of money judgments. xxxReal property, stocks, shares,
debts, credits, and other personal property, or any interest in either real or personal property, may be levied on
in like manner and with like effect as under a writ of attachment.
Rule 57, Section 7(e) in turn reads: Sec. 7. Attachment of real and personal property; recording thereof.
Properties shall be attached by the officer executing the order in the following manner: xxx xxx xxx (e) Debts
and credits, and other personal property not capable of manual delivery, by leaving with the person owing
such debts, or having his possession or under his control such credits or other personal property, or with his
agent, a copy of the order, and 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 in pursuance of such order; xxx xxx xxx
Through service of the writ of garnishment, the garnishee becomes a virtual party to, or a forced
intervenor in, the case and the trial court thereby acquires jurisdiction to bind him to compliance with all
orders and processes of the trial court with a view to the complete satisfaction of the judgment of the court.
Proceeding by garnishment is a species of attachment for reaching credits belonging to the judgment debtor
and owing to him from a stranger to the litigationBy means of the citation, the stranger becomes a forced
intervenor; and the court, having acquired jurisdiction over him by means of the citation, requires him to pay
his debt, not to his former creditor, but to the new creditor, who is creditor in the main litigation.
The garnishment of property to satisfy a writ of execution operates as an attachment and fastens upon the
property a lien by which the property is brought under the jurisdiction of the court issuing the writ. It is
brought into custodia legis, under the sole control of such court.
In the present case, there can be no doubt, therefore, that the trial court actually acquired jurisdiction over
petitioner Perla when it was served with the writ of garnishment of the third-party liability insurance policy it
had issued in favor of judgment debtor Nelia Enriquez. Perla cannot successfully evade liability thereon by
such a contention.
Every interest which the judgment debtor may have in property may be subjected to execution. In the instant
case, the judgment debtor Nelia Enriquez clearly had an interest in the proceeds of the third-party liability

insurance contract. In a third-party liability insurance contract, the insurer assumes the obligation of paying
the injured third party to whom the insured is liable.
The insurer becomes liable as soon as the liability of the insured to the injured third person attaches. Prior
payment by the insured to the injured third person is not necessary in order that the obligation of the insurer
may arise. From the moment that the insured became liable to the third person, the insured acquired an
interest in the insurance contract, which interest may be garnished like any other credit.
Petitioner also contends that in order that it may be held liable under the third-party liability insurance, a
separate action should have been commenced by private respondents to establish petitioners liability. The
Court there held that a separate action needs to be commenced when the garnishee claims an interest in the
property adverse to him (judgment debtor) or denies the debt. In the instant case, petitioner Perla did not
deny before the trial court that it had indeed issued a third- party liability insurance policy in favor of the
judgment debtor. Petitioner moreover refrained from setting up any substantive defense which it might have
against the insured-judgment debtor. The only ground asserted by petitioner was lack of jurisdiction.
Accordingly, Rule 39, Section 45 of the Rules of Court is not applicable in the instant case, and we see no
need to require a separate action against Perla: a writ of garnishment suffices to hold petitioner answerable to
the judgment creditor.
Dismissed.
13. Mindanao Savings and Loan Assoc. v. CA (Grounds for issuance of a writ of attachment)
Facts:
1.

2.

3.

4.

5.

Private respondents filed in the Regional Trial Court of Davao City, a complaint against
defendants D.S. Homes, Inc., and its directors, Laurentino G. Cuevas, Saturnino R. Petalcorin,
Engr. Uldarico D. Dumdum, Aurora P. De Leon, Ramon D. Basa, Francisco D. Villamor, Richard
F. Magallanes, Geronimo S. Palermo Felicisima V. Ramos and Eugenio M. De los Santos
(hereinafter referred to as D.S. Homes, et al.) for "Rescission of Contract and Damages" with a
prayer for the issuance of a writ of preliminary attachment, docketed as Civil Case No. 18263.
a.
Judge Dinopol issued an order granting ex parte the application for a writ of
preliminary attachment.
The private respondents amended their complaint and filed a second amended complaint
impleading as additional defendants herein petitioners Davao Savings & Loan Association, Inc.
and its president, Francisco Villamor, but dropping Eugenio M. De los Santos.
a.
Judge Dinopol issued ex parte an amended order of attachment against all the
defendants named in the second amended complaint, including the petitioners but
excluding Eugenio C. de los Santos.
D. S. Homes. Inc., et al. and the Davao Savings & Loan Association (later renamed Mindanao
Savings & Loan Association, Inc. or "MSLA") and Francisco Villamor filed separate motions to
quash the writ of attachment.
When their motions were denied by the Court, D.S. Homes, Inc., et al. offered a counterbond in
the amount of P 1,752,861.41 per certificate issued by the Land Bank of the Philippines, a banking
partner of petitioner MSLA
a.
The lower court accepted the Land Bank Certificate of Deposit for P1,752,861.41 as
counterbond and lifted the writ of preliminary attachment
MSLA and Villamor filed in the Court of Appeals a petition for certiorari to annul the order of
attachment and the denial of their motion to quash the same.
a.
The Court of Appeals dismissed the petition for certiorari and remanded the records of
Civil Case No. 18263 to the Regional Trial Court of Davao City, Branch 13, for
expeditious proceedings

The only requisites for the issuance of a writ of preliminary attachment under Section 3, Rule 57 of the Rules
of Court are the affidavit and bond of the applicant.
SEC. 3. Affidavit and bond required . An order of attachment shall be granted only
when it is made to appear by the affidavit of the applicant, or of some other person who

personally knows the facts, that a sufficient cause of action exists that the case is one of
those mentioned in section 1 hereof, that there is no other sufficient security for the
claim sought to be enforced by the action, and that the amount due to the applicant, 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 all legal counterclaims. The affidavit,
and the bond required by the next succeeding section must be duly filed with the clerk
or judge of the court before the order issues.
No notice to the adverse party or hearing of the application is required. As a matter of fact a hearing would
defeat the purpose of this provisional remedy. The time which such a hearing would take, could be enough to
enable the defendant to abscond or dispose of his property before a writ of attachment issues. Nevertheless,
while no hearing is required by the Rules of Court for the issuance of an attachment, a motion to quash the
writ may not be granted without "reasonable notice to the applicant" and only "after hearing."
Objections to the impropriety or irregularity of the writ of attachment "may no longer be invoked once a
counterbond is filed," when the ground for the issuance of the writ forms the core of the complaint.
Indeed, after the defendant has obtained the discharge of the writ of attachment by filing a counterbond under
Section 12, Rule 57 of the Rules of Court, he may not file another motion under Section 13, Rule 57 to quash
the writ for impropriety or irregularity in issuing it.
The writ had already been quashed by filing a counterbond, hence, another motion to quash it would be
pointless. Moreover, as the Court of Appeals correctly observed, when the ground for the issuance of the writ
is also the core of the complaint, the question of whether the plaintiff was entitled to the writ can only be
determined after, not before, a full-blown trial on the merits of the case. The merits of a main action are not
triable in a motion to discharge an attachment, otherwise an applicant for the dissolution could force a trial on
the merits of the case on this motion."
May the defendant, after procuring the dissolution of the attachment by filing a counterbond, ask for the
cancellation of the counterbond on the ground that the order of attachment was improperly issued? The
obligors in the bond are absolutely liable for the amount of any judgment that the plaintiff may recover in the
action without reference to the question of whether the attachment was rightfully or wrongfully issued.
The liability of the surety on the counterbond subsists until the Court shall have finally absolved the
defendant from the plaintiff s claims. Only then may the counterbond be released. The same rule applies to
the plaintiffs attachment bond. The liability of the surety on the bond subsists because the final reckoning is
when the Court shall finally adjudge that the attaching creditor was not entitled to the issuance of the
attachment writ.
14. Leelin Marketing v. C&S Agro
Facts:
1. Action originally for a sum of money filed by plaintiff eelin Marketing Corp. against defendants
Mario Santos and Aurelio Carta o doing business under the name and style of C
S Agro
Development Company in the CFI of Camarines Sur.
2. Leelin procured a writ of preliminary attachment upon its filing of a bond, the amount of its claim,
by virtue of which the merchandise in the stores of defendants in Tabaco and Legazpi, Albay, one
panel car and one sedan car were attached.
3. Upon presentation by defendants of a P20k counter-bond executed by Belfast Surety and
Insurance Co., the attachment was dissolved.
4. Defendants having failed to appear for trial, decision was rendered ordering defendants to pay
jointly and severally to Leelin. The decision having become final and executory, a writ of
execution was issued but the same was returned unsatisfied.
5. Leelin moved to charge the Surety on its counterbond, setting the motion for hearing. Surety filed
an opposition denying all liability for payment of the monetary judgment. Trial Court held that the
Surety cannot be held liable for the judgment under the terms and conditions set forth in the bond:
Plaintiff should have notified the surety when it presented its evidence during the trial, in the spirit
of fairness and to comply with the strict requirements of due process: before trial or before entry
of the final judgment, i.e. not later than the date when the judgment becomes final and executory.

Issue/Held: Whether or not the counterbond put up by a surety company for the discharge of an attachment is
liable for the money judgment in favor of the judgment creditor --- YES.
Ratio:
There is an apparent confusion between a bond put up by an attaching creditor for the issuance of writs of
attachment covered by Section 4 of Rule 57 of the Rules of Court, and the counterbond given by the adverse
party for the discharge of writs of attachment already issued covered by Section 12 of the same Rule 57. It is
the bond posted by the attaching creditor under Section 4, Rule 57, in an amount not exceeding its
claim, that answers for costs and all damages which may be sustained by the adverse party by reason of
the attachment, if the Court shall finally adjudge that the attaching creditor was not entitled thereto.

The Surety should be held estopped from denying that the purpose and intent of the bond was for the lifting of
the attachment for that would be allowing it to enrich itself by its own bad faith. By the very wording of its
bond, the same was issued in consideration of the lifting of (the) attachment. A modification of the bond is
declared and the provision of section 12 of Rule 57 of the Rules of Court considered read into and embodied
in the bond in question. It is not the terms of the bond that control but the provisions of the law requiring the
filing of such bond
Order appealed from is reversed, and the Court of origin is hereby ordered to proceed with the execution
against Belfast Surety and Insurance Co., Inc., to the extent of the amount of the counterbond.
15. Calderon v. IAC (Grounds for issuance of a writ of attachment)

And, it is the claim for damages on account of illegal attachment that may be awarded only after the
proper hearing and which shall be included in the final judgment. The claim must be filed before the
trial or before appeal is perfected or before the judgment becomes executory, with due notice to the
attaching creditor and his surety, pursuant to Section 20 of Rule 57 of the Rules of Court, reading: Sec.
20. Claim for damages on account of illegal attachment.xxx Such damages may be awarded only upon
application and after proper hearing, and shall be included in the final judgment. The application must be
filed before the trial or before appeal is perfected or before the judgment becomes executory, with due notice
to the attaching creditor and his surety or sureties, setting forth the facts showing his right to damages and the
amount thereof.
On the other hand, a counterbond under Section 12 of Rule 57 of the Rules of Court is filed by the
party whose property has been attached, equal to the value of the property attached, in order to secure
the payment of any judgment that the attaching creditor may recover in the action. To discharge
attachment upon said counterbond, said Rule explicitly provides: Sec. 12. Discharge of attachment upon
giving counterbond.At any time after an order of attachment has been judge shall, after hearing, order the
discharge of the attachment if a cash deposit is made, or a counterbond executed to the attaching creditor is
filed, xxx in an amount equal to the value of the property attached as determined by the judge, to secure the
payment of any judgment that the attaching creditor may recover in the action. xxx
And, when execution against the principal debtor is returned unsatisfied, Section 17 of Rule 57 allows
recovery upon the bond as follows: Sec. 17. When execution returned unsatisfied, recovery had upon
bond. xxx the surety or sureties on any counterbond given pursuant to the provisions of this rule to
secure the payment of the judgment shall become charged on such counter-bond, and bound to pay to
the judgment creditor upon demand, the amount due under the judgment.xxx
It is thus clear that the cases cited by the Surety requiring notice of hearing before the finality of the
judgment in regards the claim of damages have no applicability in the case at bar. The application by
the Trial Court of Section 20, Rule 57, is likewise misplaced.
Under Section 17 of Rule 57, in order that the judgment creditor may recover from the Surety on the
counterbond, it is necessary (1) that execution be first issued against the principal debtor and that such
execution was returned unsatisfied in whole or in part; (2) that the creditor made a demand upon the
surety for the satisfaction of the judgment; and (3) the surety be given notice and a summary hearing in
the same action as to his liability for the judgment under his counterbond.
In the case at bar, we find that Leelin had substantially complied with the foregoing requisites. A writ
of execution had been issued and had been returned unsatisfied. It had filed a motion to charge the
Surety on its counterbond. A notice for the hearing of the motion had been served on the Surety and
summary hearing was held. It must be conceded that there is nothing in the language or terms of the
bond executed by the Surety under which it could be held liable for the amount of the judgment.
Leelin did not contest the words of the bond but remained silent with respect thereto at the time it was
presented. As good faith is presumed, we assume that the parties had committed a mutual mistake
believing that its terms correctly reflected the purpose for which it had been filed, that is, to secure the
discharge of the writ of attachment. Mutual mistake and good faith having attended the execution of
the bond, the reformation of the instrument is in order.

Facts:
Petitioner Calderon purchased from the private respondents the following: the Luzon Brokerage Corporation
(LBC) and its five affiliate companies, namely, Luzon Air Freight, Inc., Luzon Port Terminals Services, Inc.,
Luzon (GS) Warehousing Corporation, GS Industrial Management Corporation, and GS Luzon Trucking
Corporation.
Twenty one (21) days thereafter, the Bureau of Customs suspended the operations of LBC for failure to pay
the amount of P1,475,840.00 representing customs taxes and duties incurred prior to the execution of the sale.
In order to lift the suspension Calderon paid the sum of P606,430.00 to the Bureau of Customs.
Calderon filed a complaint against private respondents to recover said amount of P1,475,840.00, with
damages by reason of breach of warranty.
In the same complaint, the petitioner prayed for a preliminary attachment, alleging: that private respondents
had deliberately and willfully concealed from his knowledge such staggering liability of the LBC for the
purpose of misleading him into buying the six aforesaid companies; and that private respondent Schulze is
about to depart from the Philippines in order to defraud his creditors.
To support the petition for preliminary attachment, the petitioner posted a surety bond of P1,475,840.00.
The trial court issued a writ of preliminary attachment, whereupon properties of the private respondents were
attached and their bank deposits were garnished.
Petitioner Calderon filed an amended complaint, alleging that while the liabilities of LBC are reflected in its
books, the aforesaid amount was fraudulently withdrawn and misappropriated by private respondent Schulze.
On the other hand, private respondents claimed: that the amount of P1,475,840.00 due to the Bureau of
Customs represents the duties and taxes payable out of the advanced payments made by LBC's client,
Philippine Refining Company (PRC) in August, September and October, 1976, and in the first and second
weeks of November 1976, after Calderon himself had taken control of the management of BC; that these
deposit payments were properly recorded in the books of the corporation and existing as part of the corporate
funds; that from the first week of June, 1976 up to October 30, 1976, private respondent Schulze fully
disclose and explained to Calderon that these customer's advanced deposit payments (including those of the
PRC) are to be paid to the Bureau of Customs when their corresponding customs taxes and duties become
due; that during this phase of the negotiation, Calderon and his representatives inspected and studied the
corporate books and records at will and learned the daily operations and management of LBC; that the
petitioner did not pay out of his own pocket but out of the LBC funds the said amount of P606,430,30
demanded by the Bureau of Customs, as evidenced by a manager's check and another facility negotiated with
the Insular Bank of Asia and America; and that private respondents are setting up a counterclaim for actual,
moral and exemplary damages as well as attorney's fees, as a consequence of the filing of the baseless suit
and the wrongful and malicious attachment of their properties,

Private respondents filed a counterbond, whereupon the trial court issued an order directing the sheriff to
return all real and personal properties already levied upon and to lift the notices of garnishment issued in
connection with the said attachment.
After trial, the trial court dismissed the complaint, holding Calderon and his surety First integrated Bonding
and Insurance Co., Inc., jointly and severally liable to pay the damages prayed for by the private respondents.
Said decision was affirmed on appeal, although slightly modified in that the award of moral and exemplary
damages in favor of private respondents Schulze and Amor was reduced.
Held: Petition is devoid of merit.

As stated above, the amount of customers' deposits in the sum of P4,574,498.32


includes the deposits of Philippine Refining Co., Inc. The amounts deposited by
Philippine Refining Co., Inc. on various dates with Luzon Brokerage Corporation made
before the execution of the sale were all entered in three other corporate books of
Luzon Brokerage Corporation namely, the Cash Receipts Register, the Journal
Vouchers, and the Customer's Deposit Ledger.
Thus, the claim of appellant Calderon that the deposits made by Philippine Refining
Co., Inc. with Luzon Brokerage Corporation of P406,430.00, P406,430.00,
P199,508.00, P52,738.00, and P264,436.00 were not entered in the books of Luzon
Brokerage Corporation, is completely without merit.

Ratio:
Whether or not the amount of P1,475,840.00 was duly disclosed as an outstanding liability of LBC or was
misappropriated by private respondent Schulze is purely a factual issue. That Calderon was clearly in bad
faith when he asked for the attachment is indicated by the fact that he failed to appear in court to support his
charge of misappropriation by Schulze, and in effect, preventing his being cross-examined, no document on
the charges was presented by him.
The Appellate Court ruled:
The record shows that appellant Calderon failed to produce any evidence in support of
his sworn charge that appellee Schulze had deliberately and willfully concealed the
liabilities of Luzon Brokerage Corporation. Neither did appellant Calderon prove his
sworn charges that appellee Schulze had maliciously and fraudulently withdrawn and
misappropriated the amount of Pl,475,840.00 and that an the defendants had
maliciously and fraudulently concealed and withheld from him this alleged liability of
Luzon Brokerage Corporation in breach of the contract-warranty that said corporation
had no obligations or liabilities except those appearing in the books and records of the
said corporation. Indeed, appellant Calderon never appeared in the trial court to
substantiate the charges in his verified complaints and in his affidavit to support his
petition for the issuance of a writ of attachment. He distanced himself from the
appellees and avoided cross-examination regarding his sworn allegations.
But even though appellant Calderon failed to prove his serious charges of fraud, malice
and bad faith, the appellees took it upon themselves to show that they did not conceal
or withhold from appellant's knowledge the deposits made by Philippine Refining Co.,
Inc. with Luzon Brokerage Corporation and that they did not withdraw and
misappropriate the deposits made by Philippine Refining Co., Inc. with Luzon
Brokerage Corporation.

It is evident from the foregoing that the attachment was maliciously sued out and that as already pointed out
Schulze was not in bad faith.
While as a general rule, the liability on the attachment bond is limited to actual damages, moral and
exemplary damages may be recovered where the attachment was alleged to be maliciously sued out and
established to be so.
In the instant case, the issues of wrongful and malicious suing out of the writ of preliminary attachment were
joined not only in private respondents' motion to discharge the attachment but also in their answer to the
amended complaint. The trial court observed that the books and records of Luzon Brokerage Corporation
disclose that the liabilities of the said corporation in the total amount of P4,574,498.32 appear under the
heading "Customs Deposit" and this amount includes the deposit of Philippine Refining Co., Inc. in the sum
of P1,475,840.00. On the other hand, plaintiff never appeared in court, and failed to produce any evidence to
substantiate his charges
The factual findings of the trial court are entitled to great weight and respect on appeal, especially when
established by unrebutted testimonial and documentary evidence, as in this case.
Suretys Petition
Specifically, petitioner surety contends that the dissolution of the attachment extinguishes its obligation under
the bond, for the basis of its liability, which is wrongful attachment, no longer exists, the attachment bond
having been rendered void and ineffective, by virtue of Section 12, Rule 57 of the Rules of Court.
While Section 12, Rule 57 of the Rules of Court provides that upon the filing of a counterbond, the
attachment is discharged or dissolved, nowhere is it provided that the attachment bond is rendered void and
ineffective upon the filing of counterbond.
The liability of the attachment bond is defined in Section 4, Rule 57 of the Rules of Court, as follows:

The books and records of Luzon Brokerage Corporation on which the Financial
Statement of Luzon Brokerage Corporation, as of October 31, 1976 was prepared by
the auditing firm retained by appellant Calderon himself, disclose that the liabilities of
Luzon Brokerage Corporation in the total amount of P4,574,498.32 appear under the
heading 'Customers Deposit' this amount includes the deposit of Philippine Refining
Co., Inc. in the sum of Pl,475,840.00.
But appellant Calderon contends that this financial statement was dated February 4,
1977. There is nothing commendable in this argument because the bases of the
financial statement were the books, records and documents of Luzon Brokerage
Corporation for the period ending October 31, 1976, which were all turned over to and
examined by appellant Calderon and his executive, legal and financial staffs. There is
also no merit in the contention of appellant Calderon that the appellees have tampered
the books of Luzon Brokerage Corporation because there is no proof to back this
charge, let alone the fact that appellant Calderon did not even present the said books to
support his charge.

Sec. 4. Condition of applicant's bond. The party applying for the order must give a
bond executed to the adverse party in an amount to be fixed by the judge, not
exceeding the applicant's claim, 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.
It is clear from the above provision that the responsibility of the surety arises "if the court shall finally
adjudge that the plaintiff was not entitled thereto."
The liability attaches if the plaintiff is not entitled to the attachment because the requirements entitling him to
the writ are wanting, or if the plaintiff has no right to the attachment because the facts stated in his affidavit,
or some of them, are untrue. It is, therefore, evident that upon the dismissal of an attachment wrongfully
issued, the surety is liable for damages as a direct result of said attachment.

Equally untenable is the Surety's contention that by filing a counterbond, private respondents waived any
defect or flaw in the issuance of the attachment writ, for they could have sought, without need of filing any
counterbond, the discharge of the attachment if the same was improperly or irregularly issued, as provided in
Section 13, Rule 57 of the Rules of Court.
Whether the attachment was discharged by either of the two (2) ways indicated in the law, i.e., by filing a
counterbond or by showing that the order of attachment was improperly or irregularly issued, the liability of
the surety on the attachment bond subsists because the final reckoning is when "the Court shall finally
adjudge that the attaching creditor was not entitled" to the issuance of the attachment writ in the first place.
The attachment debtor cannot be deemed to have waived any defect in the issuance of the attachment writ by
simply availing himself of one way of discharging the attachment writ, instead of the other. Moreover, the
filing of a counterbond is a speedier way of discharging the attachment writ maliciously sought out by the
attaching creditor instead of the other way, which, in most instances like in the present case, would require
presentation of evidence in a full-blown trial on the merits and cannot easily be settled in a pending incident
of the case.
The damages awarded by the Intermediate Appellate Court are rather excessive and thus must be reduced.
Both petitioner Calderon and petitioner First Integrated Bonding and Insurance Company, Inc. are hereby
ordered to give jointly and severally: 1. Respondent George Schulze, P250,000.00 as moral damages and
P50,000.00 as exemplary damages; and 2. Respondent Antonio C. Amor, P50,000.00 as moral damages and
P10,000.00 as exemplary damages.
16. Towers Assurance v. Ororama Supermart
Facts:
The case is about the liability of a surety in a counterbond for the lifting of a writ of preliminary attachment.
1. The proprietor of Ororama Supermart in Cagayan de Oro City, sued the spouses Ernesto Ong and
Conching Ong in the CFI of Misamis Oriental for the collection of litigation expenses and
attorneys fees. See Hong asked for a writ of preliminary attachment. The lower court issued an
order of attachment. Deputy sheriff attached the properties of the Ong spouses in Valencia,
Bukidnon and in Cagayan de Oro City.
2. To lift the attachment, the Ong spouses filed a counterbond in the amount of P58,400 with Towers
Assurance Corporation as surety. Ong spouses and Towers Assurance Corporation bound
themselves to pay solidarily to See Hong. Ong spouses were declared in default for nonappearance. The lower court rendered a decision, ordering not only the Ong spouses but also their
surety, Towers Assurance Corporation, to pay solidarily to See Hong. A writ of execution was
issued.
3. Towers Assurance Corporation filed the instant petition for certiorari where it assails the decision
and writ of execution.
Issue/Held: Whether or not the lower court acted with grave abuse of discretion in issuing a writ of execution
against the surety without first giving it an opportunity to be heard --- YES.
Ratio:
We hold that the lower court acted with grave abuse of discretion in issuing a writ of execution against the
surety without first giving it an opportunity to be heard as required in Rule 57 of the Rules of Court which
provides: SEC. 17. When execution returned unsatisfied, recovery had upon bond. If the execution be
returned unsatisfied in whole or in part, surety or sureties on any counterbond given pursuant to the
provisions of this rule to secure the payment of the judgment shall become charged on such counterbond, and
bound to pay to the judgment creditor upon demand, the amount due under the judgment, which amount may
be recovered from such surety or sureties after notice and summary hearing in the same action.
Under section 17, in order that the judgment creditor might recover from the surety on the counterbond, it is
necessary (1) that execution be first issued against the principal debtor and that such execution was returned
unsatisfied in whole or in part; (2) that the creditor made a demand upon the surety for the satisfaction of the
judgment, and (3) that the surety be given notice and a summary hearing in the same action as to his liability
for the judgment under his counterbond.

The first requisite mentioned above is not applicable to this case because Towers Assurance Corporation
assumed a solidary liability for the satisfaction of the judgment. A surety is not entitled to the exhaustion of
the properties of the principal debtor.
But certainly, the surety is entitled to be heard before an execution can be issued against him since he is not a
party in the case involving his principal. Notice and hearing constitute the essence of procedural due process.
WHEREFORE, the order and writ of execution, insofar as they concern Towers Assurance Corporation, are
set aside.
17. Manila Herald Publishing v. Ramos (Grounds for issuance of a writ of attachment)
Facts:
1.

Respondent Antonio Quirino filed a libel suit, docketed as civil case No. 11531, against
Aproniano G. Borres, Pedro Padilla, and Loreto Pastor, editor, managing editor, and reporter,
respectively, of the Daily Record, a daily newspaper published in Manila, asking damages
aggregating P90,000.
2. With the filing of this suit, the plaintiff secured a writ of preliminary attachment upon putting up a
P50,000 bond, and the Sheriff of the City of Manila levied an attachment upon certain office and
printing equipment found in the premises of the Daily Record.
3. Thereafter the Manila Herald Publishing Co. Inc. and Printers, Inc., filed with the sheriff separate
third-party claims, alleging that they were the owners of the property attached.
4. Whereupon, the sheriff required of Quirino a counter bound of P41,500 to meet the claim of the
Manila Herald Publishing Co., Inc., and another bond of P59,500 to meet the claim of Printers,
Inc. These amounts, upon Quirino's motion filed under Section 13, Rule 59, of the Rules of Court,
were reduced by the court to P11,000 and P10,000 respectively.
5. Unsuccessful in their attempt to quash the attachment, the Manila Herald Publishing Co., Inc. and
Printers, Inc. commenced a joint suit against the sheriff, Quirino and Alto Surety and Insurance
Co. Inc., in which the former sought (1) to enjoin the defendants from proceeding with the
attachment of the properties above mentioned and (2) P45,000 damages. This suit was docketed as
civil case No. 12263.
6. Whereas case No. 11531 was being handled by Judge Sanchez or pending in the branch of the
Court presided by him, case No. 12263 fell in the branch of Judge Pecson.
7. On the same date, in virtue of an ex parte motion in case No. 12263 by the Manila Herald
Publishing Co. Inc., and Printers, Inc., Judge Pecson issued a writ of preliminary injunction to the
sheriff directing him to desist from proceeding with the attachment of the said properties.
8. After the issuance of that preliminary injunction, Antonio Quirino filed an ex parte petition for its
dissolution, and Judge Simeon Ramos, to whom case No. 12263 had in the meanwhile been
transferred, granted the petition on a bond of P21,000.
9. However Judge Ramos soon set aside the order just mentioned on a motion for reconsideration by
the Manila Herald Publishing Co. Inc. and Printer, Inc. and set the matter for hearing.
10. Upon the conclusion of that hearing, Judge Ramos required the parties to submit memoranda on
the question whether "the subject matter of civil case No. 12263 should be ventilated in an
independent action or by means of a complaint in intervention in civil case No. 11531."
11. Memoranda having been filed, His Honor declared that the suit, in case No. 12263, was
"unnecessary, superfluous and illegal" and so dismissed the same. He held that what Manila
Herald Publishing Co., Inc., and Printers, Inc., should do was intervene in Case No. 11531.

Issues/Held:
1.
2.

Did Judge Ramos have authority to dismiss case No. 12263 at the stage when it was thrown out of
court? No.
Should the Manila Herald Publishing Co., Inc., and Printers, Inc., come as intervernors into the
case for libel instead of bringing an independent action? No.

3.

And did Judge Pecson or Judge Ramos have jurisdiction in case No. 12263 to quash the
attachment levied in case No. 11531? Yes.

Ratio:
1.
The court acted with grave abuse of discretion if not in excess of its jurisdiction in dismissing the case
without any formal motion to dismiss.
In case No. 12263, it should be recalled, neither a motion to dismiss nor an answer had been made when the
decision under consideration was handed down. The matter then before the court was a motion seeking a
provisional or collateral remedy, connected with and incidental to the principal action. It was a motion to
dissolve the preliminary injunction granted by Judge Pecson restraining the sheriff from proceeding with the
attachment in case No. 11531. The question of dismissal was suggested by Judge Ramos on a ground
perceived by His Honor. To all intents and purposes, the dismissal was decreed by the court on its own
initiative.
Section 1 Rule 8 enumerates the grounds upon which an action may be dismissed, and it specifically ordains
that a motion to this end be filed. In the light of this express requirement we do not believe that the court had
power to dismiss the case without the requisite motion duly presented. The fact that the parties filed
memoranda upon the court's indication or order in which they discussed the proposition that the action was
unnecessary and was improperly brought outside and independently of the case for libel did not supply
deficiency. Rule 30 of the Rules of Court provides for the cases in which an action may be dismissed, and the
inclusion of those therein provided excludes any other, under the familiar maxim, inclusio unius est exclusio
alterius. The only instance in which, according to said Rules, the court may dismiss upon the court's own
motion an action is, when the "plaintiff fails to appear at the time of the trial or to prosecute his action for an
unreasonable length of time or to comply with the Rules or any order of the court."
The Rules of Court are devised as a matter of necessity, intended to be observed with diligence by the courts
as well as by the parties for the orderly conduct of litigation and judicial business. In general, it is compliance
with these rules which gives the court jurisdiction to act.
2.
Section 14 of rule 59, which treats of the steps to betaken when property attached is claimed by the other
person than that defendant or his agent, contains the proviso that "Nothing herein contained shall prevent such
third person from vindicating his claim to the property by any proper action."
What is "proper action"? Section 1 of Rule 2 defines action as "an ordinary suit in court of justice, by which
one party prosecutes another for the enforcement or protection of a right, or the prevention or redress of a
wrong," while section 2, entitled "Commencement of Action," says that "civil action may be commenced by
filing a complaint with the court."
"Action" has acquired a well-define, technical meaning, and it is in this restricted sense that the word "action"
is used in the above rule. In employing the word "commencement" the rule clearly indicates an action which
originates an entire proceeding and puts in motion the instruments of the court calling for summons, answer,
etc, and not any intermediary step taken in the course of the proceeding whether by the parties themselves or
by a stranger. It would be strange indeed if the framers of the Rules of Court or the Legislature should have
employed the term "proper action" instead of "intervention" or equivalent expression if the intention had been
just that. It was all the easier, simplier and the more natural to say intervention if that had been the purpose,
since the asserted right of the third- party claimant necessarily grows out of the pending suit, the suit in which
the order of attachment was issued.
The most liberal view that can be taken in favor of the respondents' position is that intervention as a means of
protecting the third-party claimants' right is not exclusive but cumulative and suppletory to the right to bring a
new, independent suit. It is significant that there are courts which go so far as to take the view that even
where the statute expressly grants the right of intervention is such cases as this, the statute does not extend to

owners of property attached, for, under this view, "it is considered that the ownership is not one of the
essential questions to be determined in the litigation between plaintiff and defendant;" that "whether the
property belongs to defendant or claimant, if determined, is considered as shedding no light upon the question
in controversy, namely, that defendant is indebted to plaintiff."
Separate action was indeed said to be the correct and only procedure contemplated by Act No. 190,
intervention addition to, but not in substitution of, the old process. The new Rules adopted section 121 of Act
No. 190 and added thereto Rule 24 (a) of the Federal Rules of Procedure. Combined, the two modes of
redress are now section 1 of Rule 13,1 the last clause of which is the newly added provision. The result is
that, whereas, "under the old procedure, the third person could not intervene, he having no interest in the debt
(or damages) sued upon by the plaintiff," under the present Rules, "a third person claiming to be the owner of
such property may, not only file a third-party claim with the sheriff, but also intervene in the action to ask that
the writ of attachment be quashed
Yet, the right to inetervene, unlike the right to bring a new action, is not absolute but left to the sound
discretion of the court to allow. This qualification makes intervention less preferable to an independent action
from the standpoint of the claimants, at least. Because availability of intervention depends upon the court in
which Case No. 11531 is pending, there would be assurance for the herein petitioners that they would be
permitted to come into that case.
Little reflection should disabuse the mind from the assumption that an independent action creates a
multiplicity of suits. There can be no multiplicity of suits when the parties in the suit where the attachment
was levied are different from the parties in the new action, and so are the issues in the two cases entirely
different. In the circumstances, separate action might, indeed, be the more convenient of the two competing
modes of redress, in that intervention is more likely to inject confusion into the issues between the parties in
the case for debt or damages with which the third-party claimant has nothing to do and thereby retard instead
of facilitate the prompt dispatch of the controversy which is underlying objective of the rules of pleading and
practice. That is why intervention is subject to the court's discretion.
3.
The objection that at once suggests itself entertaining in Case No. 12263 the motion to discharge the
preliminary attachment levied in case No. 11531 is that by so doing one judge would intefere with another
judge's actuations. The objection is superficial and will not bear analysis.
A separate action by the third party who claims to be the owner of the property attached is appropriate. If this
is so, it must be admitted that the judge trying such action may render judgment ordering the sheriff of
whoever has in possession the attached property to deliver it to the plaintiff-claimant or desist from seizing it.
It follows further that the court may make an interlocutory order, upon the filing of such bond as may be
necessary, to release the property pending final adjudication of the title. Jurisdiction over an action includes
jurisdiction over a interlocutory matter incidental to the cause and deemed necessary to preserve the subject
matter of the suit or protect the parties' interests.
The fault with the respondents' argument is that it assumes that the Sheriff is holding the property in question
by order of the court handling the case for libel. In reality this is true only to limited extent. That court did not
direct the sheriff to attach the particular property in dispute. The order was for the sheriff to attach Borres',
Padilla's, and Pastor's property. He was not supposed to touch any property other than that of these
defendants', and if he did, he acted beyond the limits of his authority and upon his personal responsibility.
It is true of course that property in custody of the law can not be interfered with without the permission of the
proper court, and property legally attached is property in custodia legis. But for the reason just stated, this rule
is confined to cases where the property belongs to the defendant or one in which the defendant has proprietary
interest. When the sheriff acting beyond the bounds of his office seizes a stranger's property, the rule does not
apply and interference with his custody is not interference with another court's order of attachment.
It may be argued that the third-party claim may be unfounded; but so may it be meritorious, for the matter.
Speculations are however beside the point. The title is the very issue in the case for the recovery of property

or the dissolution of the attachment, and pending final decision, the court may enter any interlocutory order
calculated to preserve the property in litigation and protect the parties' rights and interests.

was erroneous, the lower court should have ordered the sheriff to return to the private respondent the attached
properties instead of condemning the petitioner to pay the value thereof by way of actual damages.

None of what has been said is to be construed as implying that the setting aside of the attachment prayed for
by the plaintiffs in Case No. 12263 should be granted. The preceding discussion is intended merely to point
out that the court has jurisdiction to act in the premises, not the way the jurisdiction should be exercised. The
granting or denial, as the case may be, of the prayer for the dissolution of the attachment would be a proper
subject of a new proceeding if the party adversely affected should be dissatisfied.

See. 4 of Rule 59, does not prescribe the remedies available to the attachment defendant in case of a
wrongful attachment, but merely provides an action for recovery upon the bond, based on the
undertaking therein made and not upon the liability arising from a tortious act, like the malicious suing
out of an attachment.

18. BA Finance v. CA
Facts:
1. Private respondent Augusto Yulo secured a loan from the petitioner in the amount of P591k as
evidenced by a promissory note he signed in his own behalf and as representative of the A & L
Industries. He presented an alleged special power of attorney executed by his wife, purportedly
authorizing Augusto Yulo to procure the loan and sign the promissory note.
2. The obligation became due and demandable, Augusto Yulo failed to pay the same. Petitioner filed
its amended complaint against the spouses Augusto and Lily Yulo on the basis of the promissory
note. It also prayed for the issuance of a writ of attachment alleging that the said spouses were
guilty of fraud and that the fraud consisted of the spouses inducing the petitioner to enter into a
contract with them by executing a Deed of Assignment in favor of the petitioner, assigning all
their rights, titles and interests over a construction contract executed by and between the spouses
and A. Soriano Corporation on June 19, 1974 for a consideration when, in truth, the spouses did
not have any intention of remitting the proceeds of the said construction contract to the petitioner.
3. Trial court issued the writ of attachment prayed for thereby enabling the petitioner to attach the
properties of A & L Industries.
4. Not contented with the order, the petitioner filed another motion for the examination of attachment
debtor, alleging that the properties attached by the sheriff were not sufficient to secure the
satisfaction of any judgment that may be recovered by it in the case.
5. Private respondent Lily Yulo filed her answer alleging that they were already separated when the
promissory note was executed; that her signature in the special power of attorney was forged; that
she had never authorized Augusto Yulo in any capacity to transact any business for and in behalf
of A & L Industries owned by her as a single proprietor; that she never got a single centavo from
the proceeds of the loan mentioned in the promissory note; that as a result of the illegal attachment
of her properties, which constituted the assets of the A & L Industries, the latter closed its business
and was taken over by the new owner.
6. Trial court dismissed complaint and ordered petitioner to pay the respondent Lily Yulo. CA
affirmed.
Issue/Held: Whether or not the attachment of the properties of A & L Industries was wrongful so as to entitle
the petitioner to actual damages only or whether the said attachment was made in bad faith and with malice to
warrant the award of other kinds of damages --- NO.
Ratio:
The Court of Appeals affirmed the findings of the trial court that there was bad faith on the part of the
petitioner because of the following reasons:
1. Petitioner did not present the Deed of Assignment or the construction agreement or any evidence
whatsoever to support its claim of fraud
2. Not satisfied with the order of attachment, petitioner tried to foreclose the remaining properties on
the strength of the same promissory note.
3. Deed of Chattel Mortgage shows that the mortgagor is Augusto Yulo only.
4. Inspite of the knowledge and the filing of this Motion to Suspend Proceedings seeking the
annulment of the promissory note, Plaintiff still filed a Motion for the Issuance of a Writ of
Attachment.
5. BAs officer did not even bother to demand the production of at least the duplicate original of the
Special Power of Attorney (SPA) and merely contended himself with a mere xerox.
BA also assails the award of actual damages. According to the petitioner, both the lower court and the
appellate court overlooked the fact that the properties referred to are still subject to a levy on attachment.
They are, therefore, still under custodia legis and thus, the assailed decision should have included a
declaration as to who is entitled to the attached properties and that assuming arguendo that the attachment

Under the first, where malice is not essential, the attachment defendant, is entitled to recover only the
actual damages sustained by him by reason of the attachment. Under the second, where the attachment is
maliciously sued out, the damages recoverable may include a compensation for every injury to his credit,
business or feelings.
Both the trial and appellate courts found that there was bad faith on the part of the petitioner in
securing the writ of attachment. We do not think so. An attachment may be said to be wrongful when,
for instance, the plaintiff has no cause of action, or that there is no true ground therefor, or that the
plaintiff has a sufficient security other than the property attached, which is tantamout to saying that
the plaintiff is not entitled to attachment because the requirements of entitling him to the writ are
wanting. Although the petitioner failed to prove the ground relied upon for the issuance of the writ of
attachment, this failure cannot be equated with bad faith or malicious intent.
The steps which were taken by the petitioner to ensure the security of its claim were premised on the
firm belief that the properties involved could be made answerable for the unpaid obligation due it.
There is no question that a loan in the amount of P591k was borrowed from the bank. We, thus, find
that the petitioner is liable only for actual damages and not for exemplary damages and attorneys fees.
Respondent Lily Yulo has manifested before this Court that she no longer desires the return of the
attached properties since the said attachment caused her to close down the business, From that time
she has become a mere employee of the new owner of the premises. She has grave doubts as to the
running condition of the attached machineries and equipment considering that the attachment was
effected way back in 1975.
The Court deems it just and equitable to allow private respondent Lily Yulo to recover actual damages based
on the value of the attached properties as proven in the trial court, in the amount of P660k. In turn, if there are
any remaining attached properties, they should be permanently released to herein petitioner. We cannot,
however, sustain the award of P500,000.00 representing unrealized profits because this amount was not
proved or justified before the trial court.
WHEREFORE, the decision of the CA is set aside and the petitioner is ordered to pay the private respondent
Lily Yulo
19. Torres v. Satsatin (Grounds for issuance of a writ of attachment)
Facts:
1.

The siblings Sofia Torres, Fructosa Torres, and Mario Torres each own adjacent 20,000 square
meters track of land situated at Barrio ankaan, Dasmari as, Cavite.
a.
Nicanor Satsatin asked petitioners mother, Agripina Aledia, if she wanted to sell their
lands. After consultation with her daughters, daughter-in-law, and grandchildren,
Agripina agreed to sell the properties. Petitioners, thus, authorized Nicanor, through a
Special Power of Attorney, to negotiate for the sale of the properties.
b. Nicanor offered to sell the properties to Solar Resources, Inc. Solar allegedly agreed to
purchase the three parcels of land, together with the 10,000-square- meter property
owned by a certain Rustica Aledia, for P35,000,000.00. Petitioners alleged that Nicanor
was supposed to remit to them the total amount of P28,000,000.00 or P9,333,333.00
each to Sofia, Fructosa, and the heirs of Mario.
c.
Petitioners claimed that Solar has already paid the entire purchase price of
P35,000,000.00 to Nicanor in 32 post-dated checks which the latter encashed/deposited
on their respective due dates. Petitioners added that they also learned that during the

2.
3.

4.

5.
6.

7.

8.
9.

period from January 2000 to April 2002, Nicanor allegedly acquired a house and lot at
Vista Grande BF Resort Village, as Pi as City and a car, which he registered in the
names of his unemployed children, Nikki Normel Satsatin and Nikki Norlin Satsatin.
However, notwithstanding the receipt of the entire payment for the subject property,
Nicanor only remitted the total amount of P9,000,000.00, leaving an unremitted
balance of P19,000,000.00. Despite repeated verbal and written demands, Nicanor
failed to remit to them the balance of P19,000,000.00.
Petitioners filed before the regional trial court a Complaint for sum of money and damages,
against Nicanor, Ermilinda Satsatin, Nikki Normel Satsatin, and Nikki Norlin Satsatin.
They also filed an Ex-Parte Motion for the Issuance of a Writ of Attachment, alleging among other
things: that respondents are about to depart the Philippines; that they have properties, real and
personal in Metro Manila and in the nearby provinces; that the amount due them is
P19,000,000.00 above all other claims; that there is no other sufficient security for the claim
sought to be enforced; and that they are willing to post a bond fixed by the court to answer for all
costs which may be adjudged to the respondents and all damages which respondents may sustain
by reason of the attachment prayed for, if it shall be finally adjudged that petitioners are not
entitled thereto.
a.
The trial court issued an Order directing the petitioners to post a bond in the amount of
P7,000,000.00 before the court issues the writ of attachment.
Petitioners filed a Motion for Deputation of Sheriff, informing the court that they have already
filed an attachment bond. They also prayed that a sheriff be deputized to serve the writ of
attachment that would be issued by the court.
a.
The RTC granted the above motion and deputized the sheriff, together with police
security assistance, to serve the writ of attachment.
b. The RTC issued a Writ of Attachment, directing the sheriff to attach the estate, real or
personal, of the respondents.
c.
A copy of the writ of attachment was served upon the respondents. On the same date,
the sheriff levied the real and personal properties of the respondent, including
household appliances, cars, and a parcel of land located at as Pi as, Manila.
d. Summons, together with a copy of the complaint, was served upon the respondents.
Respondents filed their Answer.
On the same day respondents filed their answer, they also filed a Motion to Discharge Writ of
Attachment anchored on the following grounds: the bond was issued before the issuance of the
writ of attachment; the writ of attachment was issued before the summons was received by the
respondents; the sheriff did not serve copies of the application for attachment, order of attachment,
plaintiffs affidavit, and attachment bond, to the respondents; the sheriff did not submit a sheriffs
return in violation of the Rules; and the grounds cited for the issuance of the writ are baseless and
devoid of merit. In the alternative, respondents offered to post a counter-bond for the lifting of the
writ of attachment.
a.
After the parties filed their respective pleadings, the RTC issued an Order denying the
motion, but at the same time, directing the respondents to file a counter- bond.
Respondents filed a motion for reconsideration and/or motion for clarification of the above order.
a.
The RTC issued another Order which reads: In view of the Urgent Motion For
Reconsideration And/Or Motion For Clarification of the Order of this Court dated
March 11, 2003, denying their Motion to Discharge Writ of Attachment filed by the
defendants through counsel Atty. Franco L. Loyola, the Motion to Discharge Writ of
Attachment is denied until after the defendants have posted the counter-bond in the
amount of Seven Million Pesos (P7,000,000.00). The defendants, once again, is
directed to file their counter-bond of Seven Million Pesos (P7,000,000.00), if it so
desires, in order to discharge the Writ of Attachment.
Respondents filed an Urgent Motion to Lift/Set Aside Order, which the RTC denied.
Respondents filed an Urgent Motion for Reconsideration, but it was also denied.

10. Aggrieved, respondents filed before the CA a Petition for Certiorari, Mandamus and Prohibition
with Preliminary Injunction and Temporary Restraining Order. Respondents argued that the
subject writ was improper and irregular having been issued and enforced without the lower court
acquiring jurisdiction over the persons of the respondents. They maintained that the writ of

attachment was implemented without serving upon them the summons together with the
complaint. They also argued that the bond issued in favor of the petitioners was defective, because
the bonding company failed to obtain the proper clearance that it can transact business with the
RTC of Dasmari as, Cavite. They added that the various clearances which were issued in favor of
the bonding company were applicable only in the courts of the cities of Pasay, Pasig, Manila, and
Makati, but not in the RTC, Imus, Cavite.
a.
The CA rendered the assailed Decision in favor of the respondents.
11. Petitioners filed a Motion for Reconsideration but it was denied.
Petitioners maintain that in the case at bar that the only way the subject writ of attachment can be dissolved
is by a counter-bond. They claim that the respondents are not allowed to file a motion to dissolve the
attachment under Section 13, Rule 57 of the Rules of Court. Otherwise, the hearing on the motion for the
dissolution of the writ would be tantamount to a trial on the merits, considering that the writ of preliminary
attachment was issued upon a ground which is, at the same time, the applicants cause of action.
Petitioners insist that the determination of the existence of grounds to discharge a writ of attachment rests in
the sound discretion of the lower court. They argue that the Certification issued by the Office of the
Administrator and the Certifications issued by the cler s of court of the
s of asmari as and mus,
avite, would show that the onds offered
estern uarant orporation, the onding compan which
issued the ond, ma e accepted
the
s of asmari as and mus, avite, and that the said onding
company has no pending liability with the government.
Petitioners contend that respondents are barred by estoppel, laches, and prescription from questioning the
orders of the RTC issuing the writ of attachment. They also maintain that the issue whether there was
impropriety or irregularity in the issuance of the orders is moot and academic, considering that the
attachment bond questioned by the respondent had already expired on November 14, 2003 and petitioners
have renewed the attachment bond covering the period from November 14, 2003 to November 14, 2004, and
further renewed to cover the period of November 14, 2004 to November 14, 2005.
The petition is bereft of merit.
A writ of preliminary attachment is defined as a provisional remedy issued upon order of the court where an
action is pending to be levied upon the property or properties of the defendant therein, the same to be held
thereafter by the sheriff as security for the satisfaction of whatever judgment that might be secured in the said
action by the attaching creditor against the defendant.
In the case at bar, the CA correctly found that there was grave abuse of discretion amounting to lack of or in
excess of jurisdiction on the part of the trial court in approving the bond posted by petitioners despite the fact
that not all the requisites for its approval were complied with. In accepting a surety bond, it is necessary that
all the requisites for its approval are met; otherwise, the bond should be rejected.
Every bond should be accompanied by a clearance from the Supreme Court showing that the company
concerned is qualified to transact business which is valid only for 30 days from the date of its issuance.
However, it is apparent that the Certification issued by the Office of the Court Administrator (OCA) at the
time the bond was issued would clearly show that the bonds offered by Western Guaranty Corporation may
be accepted only in the RTCs of the cities of Makati, Pasay, and Pasig. Therefore, the surety bond issued by
the bonding company should not have been accepted by the RTC of Dasmari as, Branch 90, since the
certification secured by the bonding company from the OCA at the time of the issuance of the bond certified
that it may only be accepted in the above-mentioned cities. Thus, the trial court acted with grave abuse of
discretion amounting to lack of or in excess of jurisdiction when it issued the writ of attachment founded on
the said bond.
Moreover, in provisional remedies, particularly that of preliminary attachment, the distinction between the
issuance and the implementation of the writ of attachment is of utmost importance to the validity of the writ.
The distinction is indispensably necessary to determine when jurisdiction over the person of the defendant
should be acquired in order to validly implement the writ of attachment upon his person.

This Court has long put to rest the issue of when jurisdiction over the person of the defendant should be
acquired in cases where a party resorts to provisional remedies. A party to a suit may, at any time after filing
the complaint, avail of the provisional remedies under the Rules of Court. Specifically, Rule 57 on
preliminary attachment speaks of the grant of the remedy at the commencement of the action or at any time
before entry of judgment. This phrase refers to the date of the filing of the complaint, which is the moment
that marks the commencement of the action. The reference plainly is to a time before summons is served on
the defendant, or even before summons issues.
Whatever be the acts done by the Court prior to the acquisition of jurisdiction over the person of defendant
issuance of summons, order of attachment and writ of attachment these do not and cannot bind and affect the
defendant until and unless jurisdiction over his person is eventually obtained by the court, either by service on
him of summons or other coercive process or his voluntary submission to the courts authority. Hence, when
the sheriff or other proper officer commences implementation of the writ of attachment, it is essential that he
serve on the defendant not only a copy of the applicants affidavit and attachment bond, and of the order of
attachment, as explicitly required by Section 5 of Rule 57, but also the summons addressed to said defendant
as well as a copy of the complaint.
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.
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.
In the instant case, assuming arguendo that the trial court validly issued the writ of attachment on November
15, 2002, which was implemented on November 19, 2002, it is to be noted that the summons, together with a
copy of the complaint, was served only on November 21, 2002.
At the time the trial court issued the writ of attachment on November 15, 2002, it can validly to do so since
the motion for its issuance can be filed at the commencement of the action or at any time before entry of
judgment. However, at the time the writ was implemented, the trial court has not acquired jurisdiction over
the persons of the respondent since no summons was yet served upon them. The proper officer should have
previously or simultaneously with the implementation of the writ of attachment, served a copy of the
summons upon the respondents in order for the trial court to have acquired jurisdiction upon them and for the
writ to have binding effect. Consequently, even if the writ of attachment was validly issued, it was improperly
or irregularly enforced and, therefore, cannot bind and affect the respondents.
Moreover, although there is truth in the petitioners contention that 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 applicants
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 a motion. However, the same is not applicable in the
case bar. It is clear from the respondents pleadings that the grounds on which they base the lifting of the writ
of attachment are the irregularities in its issuance and in the service of the writ; not petitioners cause of
action.
Further, petitioners contention that respondents are arred
estoppel, laches, and prescription from
questioning the orders of the RTC issuing the writ of attachment and that the issue has become moot and
academic by the renewal of the attachment bond covering after its expiration, is devoid of merit.
There are two ways of discharging the attachment. First, to file a counter-bond in accordance with Section 12
of Rule 57. Second[,] [t]o quash the attachment on the ground that it was irregularly or improvidently issued,

as provided for in Section 13 of the same rule. Whether the attachment was discharged by either of the two
ways indicated in the law, the attachment debtor cannot be deemed to have waived any defect in the issuance
of the attachment writ by simply availing himself of one way of discharging the attachment writ, instead of
the other. The filing of a counter-bond is merely a speedier way of discharging the attachment writ instead of
the other way.
The attachment was discharged by either of the two ways indicated in the law, the attachment debtor cannot
be deemed to have waived any defect in the issuance of the attachment writ by simply availing himself of one
way of discharging the attachment writ, instead of the other. The filing of a counter-bond is merely a speedier
way of discharging the attachment writ instead of the other way.
Moreover, again assuming arguendo that the writ of attachment was validly issued, although the trial court
later acquired jurisdiction over the respondents by service of the summons upon them, such belated service of
summons on respondents cannot be deemed to have cured the fatal defect in the enforcement of the writ. The
trial court cannot enforce such a coercive process on respondents without first obtaining jurisdiction over
their person. The preliminary writ of attachment must be served after or simultaneous with the service of
summons on the defendant whether by personal service, substituted service or by publication as warranted by
the circumstances of the case. The subsequent service of summons does not confer a retroactive acquisition of
jurisdiction over her person because the law does not allow for retroactivity of a belated service
20. Carlos v. Sandoval
Facts:
1. Carlos filed a complaint alleging that: He was the sole surviving compulsory heir of his parents,
who owns six parcels of land; that his brother Teofilo died intestate; that his brother and Sandoval
were not validly married as they had not obtained any marriage license and therefore Teofilo II
could not be considered as Teofilos child.
2. Carlos claimed that Teofilo developed a scheme to save their fathers estate from inheritance taxes
by transferring the properties to Teofilo. After Teofilos death, Carlos entered into certain
agreements with Sandoval in connection with the subject properties believing that the latter was
the lawful wife of his brother.
3. Finding that Sandoval and his brother were not validly married, Carlos now sought to nullify these
agreements for want of consideration. Carlos likewise prayed for the issuance of the provisional
relief of preliminary attachment.
4. RTC issued an Order granting the prayer for preliminary attachment. Carlos posted a bond for
P20,000,000 issued by herein petitioner SIDDCOR Insurance Corporation and a writ of
preliminary attachment was issued. A Notice of Garnishment was served upon the PNB over the
deposit accounts maintained by respondents Sandoval and Teofilo II.
5. Respondents filed an Urgent Motion to Discharge the Writ of Attachment. RTC denied. CA on
petition for certiorari ordered the discharge and dissolution of the Writ of Attachment and Notice
of Garnishment, finding that that there was no sufficient cause of action to warrant the preliminary
attachment, since Carlos had merely alleged general averments in order to support his prayer. On
petition for review on certiorari, SC denied and CA order became final.
6. The hearing on Carloss Complaint ensued before the RTC. RTC rendered a summary judgment in
favor of Carlos, declaring plaintiff as the sole and exclusive owner of the parcel of land, and
declaring the agreements null and void. RTC granted the motion for execution pending appeal
upon the filing of a bond.
7. Respondents filed a Petition for Certiorari with Temporary Restraining Order and primarily
attacked the allowance of execution pending appeal, and prayed for the annulment of the Order
granting execution pending appeal, and of the Writ of Execution. They also filed a Motion for
Judgment On the Attachment Bond, noting that the Court of Appeals had already ruled that the
Writ of Preliminary Attachment issued by the RTC was improperly granted and that its Decision,
as affirmed by the Supreme Court, had attained finality. Accordingly, they were entitled to
damages under Section 20, Rule 57 of the then Rules of Civil Procedure, which governed claims
for damages on account of unlawful attachment.
8. CA decided in favor of respondents and granted the motion for immediate execution. After issuing
a writ of execution, a TRO was granted and ordered the remand of the case for further
proceedings.

Issues/Held: Whether or not Carlos was entitled to the preliminary attachment --- NO. (Case is under Grounds
for issuance of a writ of attachment but the discussion is about the consequences of a wrongful or groundless
attachment)
(1) Whether the CA properly complied with the hearing requirement under Section 20, Rule 57 prior
to its judgment on the attachment bond --- YES.
(2) Whether the assailed judgment on the attachment bond could have been rendered, as it was, prior
to the adjudication of the main case --- YES.
Ratio:
While the factual background may be complicated, the court need only concern itself with the propriety of the
judgment on the attachment bond and the subsequent moves to secure immediate execution of such judgment.
On the Hearing Requirement
20, Rule 57 reads: Such damages may be awarded only after proper hearing and shall be included in the
judgment on the main case. Petitioners assert that there was no proper hearing on the application for
damages and that the Court of Appeals had wrongfully acted on the application in that it resolved it prior to
the rendition of the main judgment. Due notice to the adverse party and its surety setting forth the facts
supporting the applicants right to damages and the amount thereof under the bond is essential. No judgment
for damages may be entered and executed against the surety without giving it an opportunity to be heard as to
the reality or reasonableness of the damages resulting from the wrongful issuance of the writ.
Court held that under the rule, it was neither mandatory nor fatal that there should be a separate hearing
in order that damages upon the bond can be claimed, ascertained and awarded. What is necessary only
is for the attaching party and his surety or sureties to be duly notified and given the opportunity to be
heard. There is no express requirement under the rule that the hearing be done in open court, or that
the parties be allowed to confront adverse witnesses to the claim of damages on the bond. That hearing
embraces not only the right to present evidence but also a reasonable opportunity to know the claims of the
opposing parties and meet them. The right to submit arguments implies that opportunity, otherwise the right
would be a barren one. It means a fair and open hearing. The proper hearing contemplated would not
merely encompass the right of the parties to submit their respective positions, but also to present
evidence in support of their claims, and to rebut the submissions and evidence of the adverse party.
This is especially crucial considering that the necessary elements to be established in an application for
damages are essentially factual: namely, the fact of damage or injury, and the quantifiable amount of damages
sustained. Such matters cannot be established on the mere say-so of the applicant, but require evidentiary
support.
In this case, we rule that the demands of a proper hearing were satisfied as of the time the Court of
Appeals rendered its assailed judgment on the attachment bond. The circumstances in this case that we
consider particularly telling are the settled premises that the judicial finding on the wrongfulness of the
attachment was then already conclusive and beyond review, and that the amount of actual damages
sustained was likewise indubitable as it indeed could be found in the official case record. As a result,
petitioners would have been precluded from either raising the defenses that the preliminary
attachment was valid or disputing the amount of actual damages sustained by reason of the
garnishment. Moreover, petitioners were afforded the opportunity to counter the arguments extended
by the respondents. They fully availed of that right by submitting their respective
comments/oppositions. In fine, the due process guarantee has been satisfied in this case.
It should be noted that this case poses a situation different from what is normally contemplated under Section
20, Rule 57wherein the very wrongfulness of the attachment remains one of the issues in contention in the
main case. In such a case, there would be a greater demand for a more extensive hearing on the application of
damages. The modality of hearing should remain within the discretion of the court having jurisdiction to hear
the application for damages. The only demand, concordant to due process, would be the satisfaction of the
right to be heard, to present evidence, and to rebut the evidence and arguments of the opposing party. Some
disquisition is necessary on whether or not, as petitioners submit, a full-blown hearing in open court is
compulsory under Section 20, Rule 57. To impose this as a mandatory requirement would ultimately prove
too onerous to our judicial system.
Perhaps such a demand would be less burdensome on the regional trial courts which, as a matter of routine,
receive testimonial or documentary evidence offered de novo, and to formulate conclusions on the

admissibility and credibility of the same. To impose as mandatory on the Court of Appeals or the Supreme
Court to hear the application for damages through full-blown hearings in open court is supremely unwise and
beyond the demands of Section 20, Rule 57. If no such mandatory rule for hearing is imposed on the appellate
courts when the supreme penalty of death is involved, why then should an exceptional rule be imposed in the
case for the relatively insignificant application for damages on the attachment bond?
On the necessity of prior adjudication on the main case before judgment on the attachment bond
Under Section 20, Rule 57 of the 1964 Rules of Court, it was provided that there must be first a
judgment on the action in favor of the party against whom attachment was issued before damages can
be claimed by such party. The Court however subsequently clarified that under the rule, recovery for
damages may be had by the party thus prejudiced by the wrongful attachment, even if the judgment be
adverse to him. The language used in the 1997 revision of the Rules of Civil Procedure leaves no doubt that
there is no longer need for a favorable judgment in favor of the party against whom attachment was issued in
order that damages may be awarded. It is indubitable that even a party who loses the action in main but is able
to establish a right to damages by reason of improper, irregular, or excessive attachment may be entitled to
damages. This bolsters the notion that the claim for damages arising from such wrongful attachment may
arise and be decided separately from the merits of the main action.
Indeed, since an applicants cause of action may be entirely different from the ground relied upon by
him for a preliminary attachment, it may well be that although the evidence warrants judgment in
favor of said applicant, the proofs may nevertheless also establish that said applicants proferred
ground for attachment was inexistent or specious and hence, the writ should not have issued at all.
Respondents may be generally correct on the point that a case can only be deemed submitted for decision
only after all pending incidents are resolved. Yet since Section 20, Rule 57 provides that their application
for damages on the attachment bond shall be included in the judgment on the main case, it is clear
that the award for damages need not be resolved before the case is submitted for decision, but should
instead be resolved and included in the judgment on the main case, or the decision on the Appeal by
Certiorari filed by the respondents.
Thus, the action of the Court of Appeals in resolving the application for damages even before the main
judgment was issued does not conform to Section 20, Rule 57. However, the special particular circumstances
of this case lead us to rule that such error is not mortal to the award of damages. As noted earlier, the award
of damages was made after a proper hearing had occurred wherein all the concerned parties had been
given the opportunity to present their arguments and evidence in support and in rebuttal of the
application for damages. The premature award of damages does not negate the fact that the parties
were accorded due process, and indeed availed of their right to be heard
Moreover, we are compelled to appreciate the particular circumstance in this case that the right of private
respondents to acquire relief through the award of damages on account of the wrongful preliminary
attachment has been conclusively affirmed by the highest court of the land. This differs from the normal
situation under Section 20, Rule 57 wherein the court having jurisdiction over the main action is still required
to ascertain whether the applicant actually has a right to damages. To mandatorily require that the award of
damages be included in the judgment in the main case makes all the sense if the right to damages would be
ascertained at the same time the main judgment is made. However, when the said right is already made viable
by reason of a final judgment which is no longer subject to review, there should be no unnecessary
impediments to its immediate implementation.
WHEREFORE, the petitions are DISMISSED. The Temporary Restraining Order issued is LIFTED. The
assailed Resolution of the Court of Appeals Special Fourth Division dated 26 June 1998 is AFFIRMED.