INSULAR SAVINGS vs. COURT OF APPEALS G.R. NO.

123638 June 15, 2005 FACTS: Far East Bank and Trust Company instituted an Arbitration Case against petitioner Insular Savings Bank, the dispute arising from three unfunded checks with a total value of P25M. While the dispute was pending arbitration, on January 17, 1992, respondent Bank instituted Civil Case No. 92-145 in the Regional Trial Court of Makati and prayed for the issuance of a writ of preliminary attachment. RTC issued an Order granting the application for preliminary attachment upon posting by respondent Bank of an attachment bond in the amount of P6M. Far East and Insular agreed to temporarily divide between them the disputed amount of P25M while the dispute has not yet been resolved. As a result, the sum of P12.6M is in the possession of Insular. It filed a motion to discharge attachment by counter-bond in the amount ofP12.6M. RTC denied the motion. Insular assails the order of RTC judge when he factored in unliquidated claim items, such as actual and exemplary damages, legal interest, attorneys fees and expenses of litigation in the calculation of the proper amount of counterbond. Insular argues that the starting point in computing the amount of counterbond is the amount of the Far Easts demand or claim only. ISSUE: WON unliquidated claim items, such as actual and exemplary damages, legal interest, attorneys fees and expenses of litigation are included in determination of the amount of counterbond? HELD: No. The amount of the counter-attachment bond is to be measured against the value of the attached property, as determined by the judge to secure the payment of any judgment that the attaching creditor may recover in the action. The counter-bond necessary to discharge the lien on such property - should as much as possible correspond in value to, or approximately match the attaching creditors principal claim. The records show that the principal claim of respondent, as plaintiff a quo, is in the amount of P25M representing 3 unfunded checks drawn against, and presented for clearing to, respondent bank. Jurisprudence teaches that a writ of attachment cannot be issued for moral and exemplary damages, and other unliquidated or contingent claim. Far East did not pray for attachment on its other claims, contingent and unliquidated as they were. Then, too, the attaching writ rightly excluded such claims. While the records do not indicate, let alone provide a clear answer as to the actual value of the property levied upon, it may reasonably be assumed that it is equal to respondents principal claim.

PCIB vs. ALEJANDRO G.R. No. 175587 September 21, 2007 FACTS: PCIB filed against Alejandro a complaint for sum of money with prayer for the issuance of a writ of preliminary attachment. Said complaint alleged Alejandro, a resident of Hong Kong, executed in favor of PCIB a promissory note. In praying for the issuance of a writ of preliminary attachment under Section 1 paragraphs (e) and (f) of Rule 57 of the Rules of Court, petitioner alleged that (1) respondent fraudulently withdrew his unassigned deposits notwithstanding his verbal promise to PCIB Asst VP Nepomuceno not to withdraw the same prior to their assignment as security for the loan; and (2) that respondent is not a resident of the Philippines. The application for the issuance of a writ was supported with the affidavit of Nepomuceno. RTC granted and issued the writ. Sheriff garnished Alejandros bank accounts. Alejandro moved to quash the writ, contending that the withdrawal of his unassigned deposits was not fraudulent as it was approved by petitioner. He also alleged that petitioner knew that he maintains a permanent residence at Quezon City. RTC granted. So, Alejandro filed a case for damages against PCIB on the attachment bond. PCIBs defense is good faith. It also contends that even if Alejandro is considered a resident of the Philippines, attachment is still proper under Section 1, paragraph (f), Rule 57 of the Rules of Court since he (respondent) is a resident who is temporarily out of the Philippines upon whom service of summons may be effected by publication. ISSUE: WON PCIB is liable for damages for the improper issuance of the writ of attachment against Alejandro? HELD: Yes. In the hearings of the motion, and oral arguments of counsels before the Court, it appears that plaintiff BANK through its contracting officers Vice President CORAZON B. NEPOMUCENO and Executive Vice President JOSE RAMON F. REVILLA, personally transacted with defendant mainly through defendants permanent residence in METRO-MANILA, either in defendants home address in Quezon City or his main business address at the ROMULO MABANTA BUENAVENTURA SAYOC & DELOS ANGELES in MAKATI and while at times follow ups were made through defendants temporary home and business addresses in Hongkong. It is therefore clear that plaintiff could not deny their personal and official knowledge that defendants permanent and official residence for purposes of service of summons is in the Philippines. Corollarily, in actions in personam, such as the instant case for collection of sum of money, summons must be served by personal or substituted service, otherwise the court will not acquire jurisdiction over the defendant. In case the defendant does not reside and is not found in the Philippines (and hence personal and substituted service cannot be effected), the remedy of the plaintiff in order for the court to acquire jurisdiction to try the case is to convert the action into a proceeding in rem or quasi in rem by attaching the property of the defendant. Thus, in order to acquire jurisdiction in actions in personam where defendant resides out of and is not found in the Philippines, it becomes a matter of course for the court to convert the action into a proceeding in rem or quasi in rem by attaching the defendants property. The service of summons in this case (which may be by publication coupled with the sending by registered mail of the copy of the summons and the court order to the last known address of the defendant), is no longer for the purpose of acquiring jurisdiction but for compliance with the requirements of due process. However, where the defendant is a resident who is temporarily out of the Philippines, attachment of his/her property in an action in personam, is not always necessary in order for the court to acquire jurisdiction to hear the case. Substituted service of summons (under the present Section 7, Rule 14 of the Rules of Court) is the normal mode of service of summons that will confer jurisdiction on the court over the person of residents temporarily out of the Philippines. Meaning, service of summons may be effected by (a) leaving copies of the summons at the defendants residence with some person of suitable discretion residing therein, or (b)

by leaving copies at the defendants office or regular place of business with some competent person in charge thereof. Hence, the court may acquire jurisdiction over an action in personam by mere substituted service without need of attaching the property of the defendant. It is clear from the foregoing that even on the allegation that respondent is a resident temporarily out of the Philippines, petitioner is still not entitled to a writ of attachment because the trial court could acquire jurisdiction over the case by substituted service instead of attaching the property of the defendant. The misrepresentation of petitioner that respondent does not reside in the Philippines and its omission of his local addresses was thus a deliberate move to ensure that the application for the writ will be granted.

CARLOS vs. SANDOVAL G.R. No. 135830 September 30, 2005 FACTS: Carlos is the brother of Teofilo, who is married to Sandoval. He avers that the marriage of Teofilo with Sandoval was void since there was no obtention of any marriage license. Also, he asserts that Teofilo II could not be considered as Teofilos son. During their marriage, Teofilo conveyed to Sandoval properties belonging to their parents estate. Carlos now sought to nullify these agreements with Sandoval for want of consideration, the premise for these contracts being non-existent. Thus, Carlos prayed of the RTC to declare the alleged marriage between Teofilo and Sandoval void ab initio, provided that Teofilo died without issue, order that new titles covering the subject properties be issued in the name of Carlos, and require Sandoval to restitute Carlos in the amount of P18,924,800.00. Carlos likewise prayed for the issuance of the provisional relief of preliminary attachment. The RTC issued an Order granting the prayer for preliminary attachment. Carlos posted a bond for P20M issued by herein petitioner. Sandovals bank accounts were garnished. Sandoval opposes this as the complaint was founded on general averments. ISSUE: WON general averments may serve as ground for the issuance of a writ of attachment? HELD: No. The Court of Appeals found 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. The Court of Appeals Decision ordering the dissolution of the Writ of Attachment and Notice of Garnishment became final. 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.

RAVANERA vs. IMPERIAL G.R. No. L-34657 October 23, 1979 FACTS: Roman Catholic Archbishop of Caceres filed an action for Rescission of Contract and Recovery of Possession against Imperial. RTC decided the case in favour of Roman Catholic Archbishop. Archbishop filed a motion for the issuance of a writ of execution. Archbishop posted the required bond of P20,000.00 and a writ of execution was issued. Said writ was not enforced upon instance of the counsel for plaintiff as an amicable settlement was proposed. Sheriff made a return. Upon request of counsel for the plaintiff let this writ be returned and an alias writ be issued for the proposed amicable settlement abovestated failed to materialize. Clerk of Court of the respondent Court, issued an alias writ of execution. The alias writ was personally served by the Sheriff upon the petitioner. the public auction sale was held, and the Ravanera being the highest bidder a Provisional Deed of Sale was issued in her favor. Within the one-year period of redemption, the petitioner redeemed some of the properties bought at auction sale, but he failed to redeem some others on account of which at the end of the redemption period, the Sheriff executed a Definite Deed of Sale of said unredeemed properties in the name of Ravanera. Ravanera filed a motion for a writ of possession of the properties covered by the Definite Deed of Sale, to which motion petitioner filed his opposition alleging that the notice of levy was null and void and hence the provisional as well as the definite deed of sale were likewise void, and that respondent Ravanera had no personality in the case, she not being a party thereto. ISSUE: 1. WON there was a valid levy upon the properties of Imperial? 2. WON the requirements under Rule 57 Section 7 that XXX the nonce shall contain a reference to the number of the certificate of title and the volume and page in the registration book where the certificate is registered XXX ? HELD: 1. Yes. It appears in this case that the notice of levy was registered with the Register of Deeds on September 29, 1969. From a certification of the Postmaster at Naga City, it also appears that registered letter No. 13681 containing the notice of levy and the notice of auction sale addressed to respondent Felipe Imperial was delivered on October 15, 1969 to Pelaguia Comba, member of the household of the addressee. Respondent Imperial was, therefore, notified by registered mail of the levy and the auction sale long before November 3, 1969, the date of the auction sale. What is required is that the judgment debtor must be notified of the auction sale before the actual date of sale which was done in the case at bar. It cannot be gainsaid that if it were only to afford an opportunity to respondent Imperial to avoid the auction sale, he had ample opportunity to file his objection to such sale because the auction sale took place on November 3, 1969. The respondent had nineteen days after he received the notice of levy and the notice of auction sale on October 15, 1969 and thirty-nine (39) days from September 25, 1969 when he was served personally by the Sheriff a copy of the writ of execution to avoid the sale had he wanted to. Moreover, he had exactly one year from November 27, 1969 when the provisional Deed of Sale executed in favor of the petitioner was registered with the Register of Deeds to redeem the property. Were the requirements under Rule 57 Section 7 that XXX the nonce shall contain a reference to the number of the certificate of title and the volume and page in the registration book where the certificate is registered XXX ? 2. Yes. Section 7 (paragraph a) of Rule 57 is so explicit that only as to property which has been brought under the operation of the Land Registration Act should the notice of levy contain the volume and page in the registration book where the certificate is registered, impliedly, the requirement does not apply to property not registered under the said Act. It is enough that the notice of levy upon unregistered land be registered under Act 3344, as was done in this case.

From the records of the case, the notice of levy made by the sheriff as regards the registered land contains reference to the number of its certificate of title but not to the volume and page in the registry book where the title is registered. Nevertheless from what was stated in the case of Siari Valley Estate vs. Lucasan, supra, it would seem that the purpose of the requirement of Section 7(a), Rule 39 of the Revised Rules of Court is substantially complied with. From the fact that respondent Imperial was able to exercise his right of redemption with reference to three registered parcels of land, it can be easily deduced that insofar as respondent Imperial is concerned, the purpose of the requirement of reference having to be made to the number of the certificate of title, and also the volume and page in the registration book where the certificate is registered, has been fully served or attained. It may also be pertinent to note that in the Siari Valley case, heavily relied upon by the respondent court in voiding the notice of levy in the instant case, the land involved which was actually registered with OCT No. 2492 was described in the notice of levy as unregistered land, which was thus a misleading information. We, therefore, find no substantial defect in the notice of levy on all the properties levied upon and sold to petitioners in the auction sale, that should be a basis, as the respondent court deemed it to be, for annulling the sale made pursuant to the levy.

ROQUE vs. COURT OF APPEALS G.R. No. L-42594 October 18, 1979 FACTS: Associated Banking Corporation instituted an action in CFI Manila against Fil-Eastern Wood Industries, Inc. for recovery of a sum of money. Upon ex-parte application by the Associate for a Writ of Preliminary Attachment, an Order of Attachment commanding the Sheriff to attach the estate, real and personal, of FilEastern. February 7, 1974: Levy was made on a sea vessel or barge named Fil-Eastern V. Prior to the issuance of said Writ of Attachment, Fil-Eastern had delivered the barge to the Cotabato Visayan Development Corporation sometime in April, 1973, for repair. The job was completed in June 1973, but Fil-Eastern failed to pay the cost of repairs of P261,190.59. Pursuant to a mechanics lien, Cotabato Visayan Development Corporation proceeded before Notary Public to the sale of said barge. April 24, 1974: In the public auction sale, Roque acquired the barge as the highest bidder, and was accordingly issued a Certificate of Sale by the Notary Public. March 7, 1975: respondent Judge issued a Writ of Execution and ordered the sale of the barge at public auction. Roque is now the new owner of the barge having acquired the same at a public auction sale arising from a mechanic's lien. ISSUE: WON there was proper levy in favour of Associated? HELD: Yes. It is a fact that respondent Sheriff could not effect seizure immediately, first, because the barge could nowhere be found in this vicinity, and subsequently when found, because petitioners would not deliver possession to the Sheriff. It was not until the trial Court granted the Sheriff's Motion praying for an Order directing petitioners or their agents to surrender the barge to the custody of the Court, that the Sheriff was able to take physical custody. As a general rule, however, a levy of an attachment upon personal property may be either actual or constructive. 17 In this case, levy had been constructively made by the registration of the same with the Philippine Coast Guard on February 7, 1974. Constructive possession should be held sufficient where actual possession is not feasible, 18 particularly when it was followed up by the actual seizure of the property as soon as that could possibly be effected. The Rules do not provide any lifetime for a Writ of Attachment unlike a Writ of Execution. But even granting that a Writ of Attachment is valid for only sixty days, yet, since there was constructive levy within that period the fact that actual seizure was effected only thereafter cannot affect the validity of that levy.

PERLA COMPANIA vs. RAMOLETE G.R. No. L-60887 November 13, 1991 FACTS: Enriquezs vehicle collided with the vehicle of Palmes, causing his death and injuries to Borbon. Palmes widow filed a complaint against Nelia Enriquez before CFI Cebu, claiming actual, moral, nominal and exemplary damages as a result of the accident. Judgment was rendered in favour of Palmes. 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. Enriquez declared under oath that the Cimarron PUJ registered in her name was covered by a third-party liability insurance policy issued by petitioner Perla. Palmes filed a motion for garnishment praying that an order of garnishment be issued against the insurance policy issued by Perla in favor of Enriquez. Court issued an Order directing the Provincial Sheriff or his deputy to garnish the third-party liability insurance policy. Perla moved for the quashal of the writ of garnishment, contending that it 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. ISSUE: WON the insurance contract can be subjected to garnishment or execution to satisfy the judgment in a case where the garnishee was not a party to the case and the trial court did not acquire jurisdiction over garnishee's person? HELD: Yes. 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. Garnishment has been defined as 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. Garnishment has 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 plaintiff's suit. The 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. 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. 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. On the contention that a separate civil case has to be instituted against Perla:

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.