Rule 57 Digests

RULE 57 CASE DIGESTS
CALO VS. ROLDAN After the hearing, Judge Rilloraza, then presiding over the Court of
First Instance of Laguna, denied the petition on the ground that the
FACTS: Regino Relova and Teodula Bartolome (plaintiffs-respondents) defendants were in actual possession of said lands. A motion for
reconsideration was filed by plaintiffs on August 20, 1945, but said
filed an action for injunction against Tranquilino Calo and Doroteo San
motion had not yet, up to the hearing of the present case, been
Jose (defendants-petitioners). They alleged in their complaint: decided either by Judge Rilloraza, who was assigned to another court,
or by the respondent judge.
2. That the plaintiff spouses are the owners and the
possessors of the following described parcels of land, to wit:. The plaintiffs (respondents) filed on September 4, 1945, a reply to
defendants' answer in which, among others, they reiterate their
xxx xxx xxx allegation in the complaint that they are possessors in good faith of
the properties in question.
4. That the defendants, without any legal right whatsoever
and in connivance with each other, through the use of force, ISSUE: Can the plaintiff attach a property in his possession? NO.
stealth, threats and intimidation, intend or are intending to
enter and work or harvest whatever existing fruits may now Can a preliminary attachment be applied for in a main action for
be found in the lands above-mentioned in violation of injunction? NO.
plaintiff's in this case ineffectual..
HELD 1: In the present case wherein plaintiffs alleged that they are
5. That unless defendants are barred, restrained, enjoined, the owners and were in actual possession of the lands described in the
and prohibited from entering or harvesting the lands or complaint and their fruits, the action of injunction filed by them is the
working therein through ex-parte injunction, the plaintiffs proper and adequate remedy in law, for a judgment in favor of
will suffer injustice, damages and irreparable injury to their plaintiffs would quiet their title to said lands..
great prejudice..
Attachment may be issued only in the case or actions specifically

6. That the plaintiffs are offering a bond in their application stated in section 1, Rule 59, in order that the defendant may not
for ex-parte injunction in the amount of P2,000, subject to dispose of his property attached, and thus secure the satisfaction of
the approval of this Hon. Court, which bond is attached any judgment that may be recovered by plaintiff from defendant. For
hereto marked as Annex A and made an integral part of this that reason a property subject of litigation between the
complaint.. parties, or claimed by plaintiff as his, can not be attached
upon motion of the same plaintiff..
Xxx
HELD 2: The provisional remedies denominated attachment,
Wherefore, it is respectfully prayed:. preliminary injunction, receivership, and delivery of personal property,
provided in Rules 59, 60, 61, and 62 of the Rules of Court,
respectively, are remedies to which parties litigant may resort for the
(a) That the accompanying bond in the amount of P2,000 be
preservation or protection of their rights or interest, and for no other
approved;
purpose, during the pendency of the principal action. If an action, by
its nature, does not require such protection or preservation, said
(b) That a writ of preliminary injunction be issued ex- remedies can not be applied for and granted. To each kind of action
parte immediately restraining, enjoining and prohibiting the or actions a proper provisional remedy is provided for by law.
defendants, their agents, servants, representatives, The Rules of Court clearly specify the case in which they may
attorneys, and, (or) other persons acting for and in their be properly granted. .
behalf, from entering in, interfering with and/or in any wise
taking any participation in the harvest of the lands belonging
Attachment may be issued only in the case or actions
to the plaintiffs; or in any wise working the lands above-
specifically stated in section 1, Rule 59, in order that the
described;
defendant may not dispose of his property attached, and thus
secure the satisfaction of any judgment that may be
(c) That judgment be rendered, after due hearing, declaring recovered by plaintiff from defendant. For that reason a property
the preliminary injunction final;. subject of litigation between the parties, or claimed by plaintiff as his,
can not be attached upon motion of the same plaintiff..
(d) That the defendants be condemned jointly and severally
to pay the plaintiffs the sum of P200 as damages; and. The special remedy of preliminary prohibitory injunction lies when the
plaintiff's principal action is an ordinary action of injunction, that is,
(e) That plaintiffs be given such other and further relief just when the relief demanded in the plaintiff's complaint consists in
and equitable with costs of suit to the defendants. restraining the commission or continuance of the act complained of,
either perpetually or for a limited period, and the other conditions
required by section 3 of Rule 60 are present. The purpose of this
The defendants filed an opposition dated August 8, 1945, to the provisional remedy is to preserve the status quo of the things subject
issuance of the writ of preliminary injunction prayed for in the above- of the action or the relation between the parties, in order to protect
quoted complaint, on the ground that they are owners of the lands the rights of the plaintiff respecting the subject of the action during
and have been in actual possession thereof since the year 1925; and the pendency of the suit. Because, otherwise or if no preliminary
their answer to the complaint filed on August 14, 1945, they reiterate prohibition injunction were issued, the defendant may, before final
that they are the owners and were then in actual possession of said judgment, do or continue the doing of the act which the plaintiff asks
property, and that the plaintiffs have never been in possession thereof. the court to restrain, and thus make ineffectual the final judgment
rendered afterwards granting the relief sought by the plaintiff. But, as
The hearing of the petition for preliminary injunction was held on this court has repeatedly held, a writ of preliminary injunction should
August 9, 1945, at which evidence was introduced by both parties. not be granted to take the property out of the possession of one party
1
SIGMA LEGIS FRATERNITY AND SORORITY
to place it in the hands of another whose title has not been clearly
established..
A receiver may be appointed to take charge of personal or real

property which is the subject of an ordinary civil action, when it
appears that the party applying for the appointment of a receiver has
an interest in the property or fund which is the subject of the action or
litigation, and that such property or fund is in danger of being lost,
removed or materially injured unless a receiver is appointed to guard
and preserve it (section 1 [b], Rule 61); or when it appears that the
appointment of a receiver is the most convenient and feasible means
of preserving, administering or disposing of the property in litigation
(section 1 [e] of said Rule). The property or fund must, therefore be in
litigation according to the allegations of the complaint, and the object
of appointing a receiver is to secure and preserve the property or thing
in controversy pending the litigation. Of course, if it is not in litigation
and is in actual possession of the plaintiff, the latter can not apply for
and obtain the appointment of a receiver thereof, for there would be
no reason for such appointment.
Delivery of personal property as a provisional remedy consists in the

delivery, by order of the court, of a personal property by the defendant
to the plaintiff, who shall give a bond to assure the return thereof or
the payment of damages to the defendant in the plaintiff's action to
recover possession of the same property fails, in order to protect the
plaintiff's right of possession of said property, or prevent the defendant
from damaging, destroying or disposing of the same during the
pendency of the suit.
Undoubtedly, according to law, the provisional remedy proper

to plaintiffs' action of injunction is a preliminary prohibitory
injunction, if plaintiff's theory, as set forth in the complaint,
that he is the owner and in actual possession of the premises
is correct. But as the lower court found at the hearing of the
said petition for preliminary injunction that the defendants
were in possession of the lands, the lower court acted in
accordance with law in denying the petition, although their
motion for reconsideration, which was still pending at the
time the petition in the present case was heard in this court,
plaintiffs insist that they are in actual possession of the lands
and, therefore, of the fruits thereof.
2
KO GLASS CONSTRUCTION VS. VALENZUELA (a) In an action for the recovery of money or
damages on a cause of action arising from
FACTS: On October 6, 1977, an action was instituted in the Court of contract, express or implied, against a party who
is about to depart from the Philippines with intent
First Instance of Rizal by Antonio D. Pinzon to recover from Kenneth O.
to defraud his creditor;
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
(b) In an action for money or property embezzled
returned to him upon termination of the lease. In his verified
or fraudulently misapplied or converted to his own
complaint, the plaintiff asked for an attachment against the property of use by a public officer, or an officer of a
the defendant consisting of collectibles and payables with the corporation, or an attorney, factor, broker, agent,
Philippine Geothermal, Inc., on the grounds that the defendant is a or clerk, in the course of his employment as such,
foreigner; that he has sufficient cause of action against the said or by any other person in a fiduciary capacity, or
defendant; and that there is no sufficient security for his claim against for a willful violation of duty;
the defendant in the event a judgment is rendered in his favor.
(c) In an action to recover the possession of
personal property unjustly detained, when the
Finding the petition to be sufficient in form and substance, the
property, or any part thereof, has been concealed,
respondent Judge ordered the issuance of a writ of attachment against
removed, or disposed of to prevent its being found
the properties of the defendant upon the plaintiff's filing of a bond in
or taken by the applicant or an officer;
the amount of P37,190.00. 2
(d) In an action against the party who has been

Thereupon, on November 22, 1977, the defendant Kenneth O. Glass
guilty of a fraud in contracting the debt or
moved to quash the writ of attachment on the grounds that there is no
incurring the obligation upon which the action is
cause of action against him since the transactions or claims of the
brought, or in concealing or disposing of the
plaintiff were entered into by and between the plaintiff and the K.O.
property for the taking, detention or conversion of
Glass Construction Co., Inc., a corporation duly organized and existing
which the action is brought;
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 (e) In an action against a party who has removed
be prejudiced thereby because his claims are against a corporation or disposed of his property, or is about to do so,
which has sufficient funds and property to satisfy his claim; and that with intent to defraud his creditors;
the money being garnished belongs to the K.O. Glass Corporation Co.,
Inc. and not to defendant Kenneth O. Glass. 3 (f) In an action against a party who resides out of
the Philippines, or on whom summons may be
By reason thereof, Pinzon amended his complaint to include K.O. Glass served by publication.
Construction Co., Inc. as co-defendant of Kenneth O. Glass. 4
Pinzon however, did not allege that the defendant Kenneth O. Glass "is
On January 26, 1978, the defendants therein filed a supplementary a foreigner (who) may, at any time, depart from the Philippines with
motion to discharge and/or dissolve the writ of preliminary attachment intent to defraud his creditors including the plaintiff." He merely stated
upon the ground that the affidavit filed in support of the motion for that the defendant Kenneth O. Glass is a foreigner. The pertinent
preliminary attachment was not sufficient or wanting in law for the portion of the complaint reads, as follows:
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. 15. Plaintiff hereby avers under oath that
3, Rule 57 of the Revised Rules of Court; (2) the affidavit did not state defendant is a foreigner and that said defendant
that there is no other sufficient security for the claim sought to be has a valid and just obligation to plaintiff in the
recovered by the action as also required by said Sec. 3; and (3) the total sum of P32,290.00 arising out from his
affidavit did not specify any of the grounds enumerated in Sec. 1 of failure to pay (i) service charges for the hauling of
Rule 57, 5 but, the respondent Judge denied the motion and ordered construction materials; (ii) rentals for the lease of
the Philippine Geothermal, Inc. to deliver and deposit with the Clerk of plaintiff's Isuzu Cargo truck, and (iii) total cost of
Court the amount of P37,190.00 immediately upon receipt of the order the missing/destroyed spare parts of said leased
which amount shall remain so deposited to await the judgment to be unit; hence, a sufficient cause of action exists
rendered in the case. 6 against saiddefendant. Plaintiff also avers under
oath that there is no sufficient security for his
ISSUE: Is it enough to allege that defendant is a ―foreigner‖? NO. claim against the defendantin the event a
judgment be rendered in favor of the plaintiff.
however, defendant has sufficient assets in the
HELD: there was no ground for the issuance of the writ of preliminary Philippines in the form of collectible and payables
attachment. Section 1, Rule 57 of the Revised Rules of Court, which due from the Philippine Geothermal, Inc. with
enumerates the grounds for the issuance of a writ of preliminary office address at Citibank Center, Paseo de Roxas,
attachment, reads, as follows: Makati, Metro Manila, but which properties, if not
timely attached, may be disposed of
Sec. 1. Grounds upon which attachment may by defendants and would render ineffectual the
issue. —A plaintiff or any proper party may, at the reliefs prayed for by plaintiff in this Complaint. 11
commencement of the action or at any time
thereafter, have the property of the adverse party In his Amended Complaint, Pinzon alleged the following:
attached as security for the satisfaction of any
judgment that may be recovered in the following
cases: 15. Plaintiff hereby avers under oath that
defendant GLASS is an American citizen who
controls most, if not all, the affairs of defendant
3
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. 12
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.
4
GENERAL VS. DEVENECIA
FACTS: A complaint was filed by Ruedas against Luis General. That

complaint was filed on June 4, 1946, to recover the value of a
promissory note.
It prayed additionally for preliminary attachment of defendant's

property, upon the allegation that the latter was about to dispose of
his assets to defraud creditors. Two days later, the writ of attachment
was issued upon the filing of a suitable bond.
Having been served with summons, the defendant therein, Luis F.

General, submitted, on June 11, 1946, a motion praying for dismissal
of the complaint and dissolution of the attachment. He claimed it was
premature, in view of the provisions of the debt moratorium orders of
the President of the Philippines (Executive Orders Nos. 25 and 32 of
1945). Denial of this motion and of the subsequent plea for
reconsideration, prompted the institution of this special civil action,
which we find to be meritorious, for the reason that the attachment
was improvidently permitted, the debt being within the terms of the
decree of moratorium (Executive Order No. 32).
ISSUE: Can an attachment issue when the demand is not yet due and
demandable? NO.
HELD: It is our view that, upon objection by the debtor, no court may
now proceed to hear a complaint that seeks to compel payment of a
monetary obligation coming within the purview of the moratorium. And
the issuance of a writ of attachment upon such complaint may not, of
course, be allowed. Such levy is necessarily one step in the
enforcement of the obligation, enforcement which, as stated in the
order, is suspended temporarily, pending action by the Government.
But the case for petitioner is stronger when we reflect that his promise
is to pay P4,000 "within six months after peace has been declared." It
being a matter of contemporary history that the peace treaty between
the United States and Japan has not even been drafted, and that no
competent official has formally declared the advent of peace (see
Raquiza vs. Bardford, 75 Phil., 50), it is obvious that the six-month
period has not begun; and Luis F. General has at present and in June,
1946, no demandable duty to make payment to plaintiffs,
independently of the moratorium directive.
On the question of validity of the attachment, "the general

rule is that, unless the statute expressly so provides, the
remedy by attachment is not available in respect to a demand
which is not due and payable, and if an attachment is issued
upon such a demand without statutory authority it is void." (7
C.J.S., p. 204.)
It must be observed that under our rules governing the matter the
person seeking a preliminary attachment must show that "a sufficient
cause of action exists" and that the amount due him is as much as the
sum for which the order of attachment is granted" (sec. 3, Rule 59).
Inasmuch as the commitment of Luis F. General has not as yet
become demandable, there existed no cause of action against him,
and the complaint should have been dismissed and the attachment
lifted.
5
MIALHE VS. DE LENCQUESAING or by any other person in a fiduciary capacity, or

for a willful violation of duty;
FACTS: On February 28, 1983, respondent Elaine filed a criminal
complaint for estafa against petitioner William Alain, with the office of
(c) In an action to recover the possession of
the City Fiscal of Manila, alleging in her supporting affidavit that on the
personal property unjustly detained, when the
face of the very account submitted by him as Administrator, he had
property, or any part thereof, has been concealed.
misappropriated considerable amounts, which should have been
removed, or disposed of to prevent its being found
turned over to her as her share in the net rentals of the common
or taken by the applicant or an officer;
properties. Two days after filing the complaint, respondent flew back
to Paris, the City of her residence. Likewise, a few days after the filing
of the criminal complaint, an extensive news item about it appeared (d) In an action against a party who has been
prominently in the Bulletin Today, March 4, 1983 issue, stating guilty of a fraud in contracting the debt or
substantially that Alain Miailhe, a consul of the Philippines in the incurring the obligation upon which the action is
Republic of France, had been charged with Estafa of several million brought, or in concealing or disposing of the
pesos by his own sister with the office of the City Fiscal of Manila. property for the taking, detention or conversion of
which the action is brought;
On April 12, 1983, petitioner Alain filed a verified complaint against
respondent Elaine, for Damages in the amount of P2,000,000.00 and (e) In an action against a party who has removed
attorney's fees of P250,000.00 allegedly sustained by him by reason of or disposed of his property, or is about to do so,
the filing by respondent (then defendant) of a criminal complaint for with intent to defraud his creditors;
estafa, solely for the purpose of embarrassing petitioner (then plaintiff)
and besmirching his honor and reputation as a private person and as (f) In an action against a party who resides out of
an Honorary Consul of the Republic of the Philippine's in the City of the Philippines, or on whom summons may be
Bordeaux, France. Petitioner further charged respondent with having served by publication. (emphasis supplied)
caused the publication in the March 4, 1983 issue of the Bulletin
Today, of a libelous news item. In his verified complaint, petitioner
prayed for the issuance of a writ of preliminary attachment of the While it is true that from the aforequoted provision
properties of respondent consisting of 1/6 undivided interests in attachment may issue "in an action against a party who
certain real properties in the City of Manila on the ground that resides out of the Philippines, " irrespective of the nature of
"respondent-defendant is a non-resident of the Philippines", pursuant the action or suit, and while it is also true that in the case of
to paragraph (f), Section 1, Rule 57, in relation to Section 17, Rule 14 Cu Unjieng, et al vs. Albert, 58 Phil. 495, it was held that
of the Revised Rules of Court.
"each of the six grounds treated ante is independent of the
others," still it is imperative that the amount sought be
On April 14, 1983, Judge Barbers granted petitioner's application for liquidated.
preliminary attachment upon a bond to be filed by petitioner in the
amount of P2,000,000.00. Petitioner filed said bond and upon its
approval, the Writ of Preliminary Attachment was issued on April 18,
1983 which was served on the Deputy Clerk of Court of Branch XXX
before whom the action for Partition was pending.
On May 17, 1983, respondent thru counsel filed a motion to lift or

dissolve the writ of attachment on the ground that the complaint did
not comply with the provisions of Sec. 3 of Rule 57, Rules of Court and
that petitioner's claim was for unliquidated damages.
ISSUE: Can an attachment issue based on unliquidated damages?

NO.
HELD: Section 1 of Rule 57 of the Rules of Court provides —
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
fromcontract, express or implied, against a party
who is about to depart from the Philippines with
intent to defraud his creditors;
(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,
6
INSULAR SAVINGS BANK VS. CA
FACTS: On December 11, 1991, respondent Bank [Far East Bank and
Trust Company] instituted Arbitration Case No. 91-069 against
petitioner [Insular Savings Bank] before the Arbitration Committee of
the Philippine Clearing House Corporation [PCHC]. The dispute
between the parties involved three [unfunded] checks with a total
value ofP25,200,000.00. The checks were drawn against respondent
Bank and were presented by petitioner for clearing. As respondent
Bank returned the checks beyond the reglementary period, [but after
petitioner‘s account with PCHC was credited with the amount of
P25,200,000.00] petitioner refused to refund the money to respondent
Bank.
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. On January 22, 1992, Branch 133 of the
Regional Trial Court of Makati issued an Order granting the application
for preliminary attachment upon posting by respondent Bank of an
attachment bond in the amount of P6,000,000.00. On January 27,
1992, Branch 133 of the Regional Trial Court of Makati issued a writ of
preliminary attachment for the amount of P25,200,000.00.
During the hearing on February 11, 1992 before the Arbitration

Committee of the Philippine Clearing House Corporation, petitioner and
respondent Bank agreed to temporarily divide between them the
disputed amount of P25,200,000.00 while the dispute has not yet been
resolved. As a result, the sum ofP12,600,000.00 is in the possession of
respondent Bank. On March 9, 1994, petitioner filed a motion to
discharge attachment by counter-bond in the amount
of P12,600,000.00. On June 13, 1994, respondent Judge issued
the first assailed order denying the motion. On June 27, 1994,
petitioner filed a motion for reconsideration which was denied
in the second assailed order dated July 20, 1994"
ISSUE: Should exemplary damages, legal interest, attorney‘s fees and

expenses of litigation be factored in the determination of the
defendant‘s counterbond?
HELD: NO. Turning to the case at bar, the records show that the
principal claim of respondent, as plaintiff a quo, is in the amount
of P25,200,000.00,6 representing the three (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.
We refer to the fact that the attachment respondent applied for and
the corresponding writ issued was only for the amount of P25.2
Million. Respondent, it bears to stress, did not pray for attachment on
its other claims, contingent and unliquidated as they were. Then, too,
the attaching writ rightly excluded such claims.
7
TAN VS. ZANDUETA
FACTS: The respondent Tiu Chay (alias Tan Kia) sued the petitioner
Isidro Tan (alias Tan Lit) in civil case No. 47826 of the Court of First
Instance of Manila, to recover from him the amount of P22,500 which
he alleged to be the half corresponding to him of the P45,000 which
they won as a prize in the last drawing of the sweepstakes with ticket
No. 228619 which they purchased with a part of the capital invested in
a sari-sari store. Simultaneously with his complaint, said Tiu Chay
(alias Tan Kia) asked and obtained from the respondent judge the
attachment of the property of the petitioner Isidro Tan (alias Tan Lit)
upon filing a bond in the amount of P5,000.
ISSUE: Is an attachment proper in this situation? YES.
HELD: We find that the writ of preliminary attachment was issued in

strict conformity to the law, because the complaint wherein the said
attachment was issued alleged that the petitioner, after collecting the
prize of a ticket in the last sweepstakes, consisting of the amount of
P50,000, belonging to the two, that is the petitioner and the
respondent Tiu Chay (alias Tan Kia), appropriated the entire prize
exclusively for himself, in complete disregard of said Tiu Chay
(alias Tan Kia), knowing that one-half thereof did not belong to him to
said respondent; that he was merely a depository or agent of the latter
as to said half, and that the petitioner acted in the manner stated
notwithstanding the fact that he was required to turn over to the
respondent the part of the prize won corresponding to the latter.
8
WALTER E. OLSON AD CO. VS. OLSEN the Code of Civil Procedure for the issuance of a preliminary
attachment, and the order of the Court of First Instance of
FACTS: defendant-appellant was president-treasurer and general Manila, denying the motion for the annulment of the injunction in
manager of the plaintiff-appellee corporation and exercised direct and question, is in accordance with law.
almost exclusive supervision over its function, funds and books of
account until about the month of August, 1921. 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
P66,207.62. Of this sum, P19,000 was invested in the purchase of the
house and lot now under attachment in this case, and P50,000 in the
purchase of 500 shares of stock of Prising at the price of P100 per
share for himself and Marker. 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, which took
place on February 1, 1919, a statement of his account with a debit
balance was submitted and approved.
ISSUE: Can officers of the corporation be held liable for spending

money of the corporation without the authority of the Board of
Directors? YES.
HELD: 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 funds of the
corporation. Ordinary delicacy required that in the disposition of the
funds of the corporation for his personal use, he should be very
careful, so as to do it in such a way as would be compatible with the
interest of the stockholders and his fiduciary character. And let it not
also be said that he did everything openly and with the security of his
shares of stock, because as he could dispose of the funds of the
corporation so he could dispose of his own shares and with greater
freedom. And let it not also be said that other officers of the
corporation, such as the vice-president, the secretary and other chiefs
and employees, were doing the same thing, because that does not
show but that his bad example had spread among his subordinates
and all believed themselves with the same right as their chief to
dispose of the funds of the corporation for their personal use, although
it were merely by way of loan, without any security of whatever kind
of course. 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;
and 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
9
SANTOS VS. BERNABE
FACTS: On March 20, 1928, there were deposited in Jose C. Bernabe's

warehouse by the plaintiff Urbano Santos 778 cavans and 38 kilos of
palay and by Pablo Tiongson 1,026 cavans and 9 kilos of the same
grain.
On said date, March 20, 1928, Pablo Tiongson filed with the Court of
First Instance of Bulacan a complaint against Jose C. Bernabe, to
recover from the latter the 1,026 cavans and 9 kilos of palay deposited
in the defendant's warehouse. At the same time, the application of
Pablo Tiongson for a writ of attachment was granted, and the
attachable property of Jose C. Bernabe, including 924 cavans and 31
1/2 kilos of palay found by the sheriff in his warehouse, were attached,
sold at public auction, and the proceeds thereof delivered to said
defendant Pablo Tiongson, who obtained judgment in said case.
The plaintiff-appellee Urbano Santos contends that Pablo Tiongson

cannot claim the 924 cavans and 31 ½ kilos of palay attached by the
defendant sheriff as part of those deposited by him in Jose C.
Bernabe's warehouse, because, in asking for the attachment thereof,
he impliedly acknowledged that the same belonged to Jose C. Bernabe
and not to him.
ISSUE: Can you attach your own property?
HELD: NO, in such case, REPLEVIN would be the proper

remedy, not attachment.
It will be seen that the action brought by Pablo Tiongson against Jose
C. Bernabe is that provided in section 262 of the Code of Civil
Procedure for the delivery of personal property. Although it is true that
the plaintiff and his attorney did not follow strictly the procedure
provided in said section for claiming the delivery of said personal
property nevertheless, the procedure followed by him may be
construed as equivalent thereto, considering the provisions of section 2
of the Code of Civil Procedure of the effect that "the provisions of this
Code, and the proceedings under it, shall be liberally construed, in
order to promote its object and assist the parties in obtaining speedy
justice."
Liberally construing, therefore, the above cited provisions of section

262 of the Code of Civil Procedure, the writ of attachment applied for
by Pablo Tiongson against the property of Jose C. Bernabe may be
construed as a claim for the delivery of the sacks of palay deposited by
the former with the latter.
There being no means of separating form said 924 cavans and 31 1/2
of palay belonging to Urbano Santos and those belonging to Pablo
Tiongson, the following rule prescribed in article 381 of the Civil Code
for cases of this nature, is applicable:
Art. 381. If, by the will of their owners, two things of

identical or dissimilar nature are mixed, or if the mixture
occurs accidentally, if in the latter case the things cannot be
separated without injury, each owner shall acquire a right in
the mixture proportionate to the part belonging to him,
according to the value of the things mixed or commingled.
The number of kilos in a cavan not having been determined, we will

take the proportion only of the 924 cavans of palay which were
attached and sold, thereby giving Urbano Santos, who deposited 778
cavans, 398.49 thereof, and Pablo Tiongson, who deposited 1,026
cavans, 525.51, or the value thereof at the rate of P3 per cavan.
10
STATE INVESTMENT HOUSE, INC. VS. CA petitioners cannot claim to have been deceived or deluded by them
because it knew, or should have known , that the issuer of the checks,
FACTS: On September 30 and October 31,1977, Pedro 0. Valdez and Pedro O. Valdez, was not a "buyer" of the "merchandise and
Rudy H. Sales executed two Comprehensive Surety Agreements to personalities made in the ordinary course of business" by P.O. Valdez,
secure any and all loans of P.O. Valdez, Inc. not exceeding the sums of Inc. of which he was the president.
P500,000 (Annex C) and P4,934,000 (Annex D) from the petitioner
State Investment House, Inc., a domestic corporation engaged in quasi
Since the petitioner failed to prove during the hearing of private
banking.
respondents' motion to lift the preliminary writ of attachment, that
P.O. Valdez, Inc. received from it independent consideration for the
Four years later, on July 30, 1981, petitioner and P.O. Valdez, Inc. "sale" of Pedro Valdez' checks to it, apart from the loans previously
entered into an agreement for discounting with the petitioner the extended to the corporations, We are constrained to affirm the finding
receivables of P.O. Valdez, Inc. The other details of the transactions of the court of Appeals that Valdez's checks are "mere evidence of the
between the petitioner and P.O. Valdez, Inc. are as follows: outstanding obligation of P.O. Valdez, Inc. to the petitioner." The
petitioner was not defrauded by their issuance for the loans had been
At the time the basic loan agreement (which is contracted and released to P.O. Valdez, Inc. long before the checks
the Agreement dated July 30, 1981) was entered were issued.
into, respondent P.O. Valdez, Inc. was required
to provide collateral security for the loan. And
NOTE: In the old Rules, “fraud in the performance of the
pursuant thereto, private respondents turned
obligation” was not a ground for preliminary attachment.
over to the petitioner various certificates of stock
of several corporations. In addition, private
respondents executed an REM in favor of the
petitioner covering two (2) parcels of land
located outside Baguio City. Later, private
respondents were also made to execute a Deed
of Sale dated December 29, 1982 covering the
proceeds of a postdated check for
P4,066,410.20, another Deed of Sale dated
January 4, 1983, covering the proceeds as a
postdated check for P197,010.31 and a Deed of
Assignment dated January 4, 1983, covering P.O.
Valdez, Inc.'s construction receivables from the
Development Academy of the Philippines to the
extent of P100,000.00.
When Pedro Valdez' two checks were deposited by the petitioner upon
maturity, they bounced for insufficient funds. Despite demands,
respondent corporation failed to pay its obligations to petitioner
amounting to P6,342,855.70 as of April 11, 1985.
Petitioner foreclosed its real estate mortgage on the two lots in

Benguet of Pedro and Remedios Valdez on April 11, 1985 and acquired
them as the highest bidder in the foreclosure sale. Presumably
because the proceeds of the foreclosure were insufficient to satisfy the
debt, petitioner also filed a collection suit, with a prayer for preliminary
attachment.
The court, through Judge Antonio Martinez, issued a writ of

preliminary attachment against the defendants' properties. Pursuant
thereto, certain real and personal properties of the defendants were
attached.
On June 24, 1986, P.O. Valdez, Inc. and Pedro Valdez filed a motion to
discharge the attachment on the ground that there was no fraud in
contracting the loans, and if any fraud existed, it was in the
performance of the obligations.
ISSUE: Can you ask for attachment on the basis of the fraud in
the security given for the obligation?
HELD: NO. The main thrust of the prayer for preliminary attachment
is the alleged misrepresentation of the debtor P.O. Valdez, Inc., in the
Agreement for Discounting Receivables and in the deeds of sale of said
receivables; that the two checks or receivables" issued by Pedro Valdez
were payment for "actual sales of its merchandise and/or personalities
made to its customers or otherwise arising from its other legitimate
business transactions" and "that the receivables . . . were genuine,
valid and subsisting and represent bona fide sales of merchandise
and/or personalities made in the ordinary course of business."
It can hardly be doubted that those representations in petitioner's

printed deeds of sale were false. But false though they were, the
11
ABOITIZ VS. COTABATO BUS CO. business. The sale or other form of disposition of any of this kind of
property is not difficult of detection or discovery, and strangely,
FACTS: The instant petition stemmed from Civil Case No. 7329 of the petitioner, has adduced no proof of any sale or transfer of any of
Court of First Instance of Davao (Branch 1) in which a writ of
them, which should have been easily obtainable.
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., on November 2, 1971, 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."
Petitioner alleges 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.
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.
ISSUE: WON insolvency may be a ground for the issuance of a writ of

preliminary attachment. NO.
WON the removal of the five buses for purposes of repair is the
―removal‖ contemplated under Rule 57, Sec.1 (e)? NO.
HELD: 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 equipments which respondent company have to own and keep to
be able to engage and continue in the operation of its transportation
12
PEOPLE‟S BANK & TRUST CO. VS. SYVEL‟S INC.
FACTS: This is an action for foreclosure of chattel mortgage executed

in favor of the plaintiff by the defendant Syvel's Incorporated on its
stocks of goods, personal properties and other materials owned by it.
However, because of an attempt to have the matter settled, the extra-

judicial foreclosure was not pushed thru. As no payment had been
paid, this case was even actually filed in this Court.
On petition of the plaintiff based on the affidavits executed by Mr.

Leopoldo R. Rivera, Assistant Vice President of the plaintiff bank and
Atty. Eduardo J. Berenguer on January 12, 1967, to the effect, among
others, that the defendants are disposing of their properties with intent
to defraud their creditors, particularly the plaintiff herein, a preliminary
writ of attachment was issued.
ISSUE: How do you determine intent to defraud?
HELD: The actuations of appellants (Syvel‘s Inc) were clearly seen by

the witnesses who "saw a Fiat Bantam Car-Fiat Car, a small car and
about three or four persons hurrying; they were carrying goods
coming from the back portion of this store of Syvels at the Escolta,
between 5:30 and 6:00 o'clock in the evening." Therefore, "the act of
debtor (appellant) in taking his stock of goods from the rear of his
store at night, is sufficient to support an attachment upon the ground
of the fraudulent concealment of property for the purpose of delaying
and defrauding creditors."
In any case, intent to defraud may be and usually is inferred from the
facts and circumstances of the case; it can rarely be proved by direct
evidence. It may be gleaned also from the statements and conduct of
the debtor, and in this connection, the principle may be applied that
every person is presumed to intend the natural consequences of his
acts. In fact the trial court is impressed "that not only has the plaintiff
acted in perfect good faith but also on facts sufficient in themselves to
convince an ordinary man that the defendants were obviously trying to
spirit away a port;.on of the stocks of Syvel's Incorporated in order to
render ineffectual at least partially anyjudgment that may be rendered
in favor of the plaintiff."
13
ADLAWAN VS. TORRES The judge before whom the application is made exercises full
discretion in considering the supporting evidence proffered by the
FACTS: On September 9, 1983 respondent Aboitiz filed against applicant. One overriding consideration is that a writ of attachment is
petitioners two complaints for collection of sums of money with
substantially a writ of execution except that it emanates at the
prayers for the issuance of writs of attachment in the Regional Trail
Court, Branch 23, Cebu City. beginning, instead of at the termination of the suit.
The complaint in Civil Case No. CEB-1185 alleged that petitioner

Eleazar Adlawan (defendant therein) was awarded a contract for the
construction of the Tago Diversion Works for the Tago River Irrigation
Project by the National Irrigation Administration and that respondent
Aboitiz (plaintiff therein) loaned him money and equipment, which
indebtedness as of June 30, 1983 totaled P13,430,259.14. Paragraph
16 of the complaint states:
16. That, in view of the enormous liabilities which the defendants have
with the plaintiff, defendants executed a real estate mortgage covering
eleven (11) parcels of land in favor of Philippine Commercial and
Industrial Bank (PCIB) to secure a P1,000,000.00 loan with said bank
and was able to remove, conceal and dispose of their properties,
obviously to defraud the plaintiff, . . .
It is evident from said affidavit that the prayer for attachment rests on
the mortgage by petitioners of 11 parcels of land in Cebu, which
encumbrance respondent Aboitiz considered as fraudulent concealment
of property to its prejudice.
ISSUE: Can you infer „intent to defraud creditors‟ by a mere

encumbrance of properties?
HELD: NO. We find, however, that there is no factual allegation which

may constitute as a valid basis for the contention that the mortgage
was in fraud of respondent Aboitiz. As this Court said in Jardine-Manila
Finance, Inc. v. Court of Appeals, 171 SCRA 636 (1989), "[T]he
general rule is that the affidavit is the foundation of the writ, and if
none be filed or one be filed which wholly fails to set out some facts
required by law to be stated therein, there is no jurisdiction and the
proceedings are null and void."
Bare allegation that an encumbrance of a property is in fraud of the

creditor does not suffice. Factual bases for such conclusion must be
clearly averred.
The execution of a mortgage in favor of another creditor is not

conceived by the Rules as one of the means of fraudulently disposing
of one's property. By mortgaging a piece of property, a debtor merely
subjects it to a lien but ownership thereof is not parted with.
Furthermore, the inability to pay one's creditors is not necessarily

synonymous with fraudulent intent not to honor an obligation
Consequently, when petitioners filed a motion for the reconsideration

of the order directing the issuance of the writ of attachment,
respondent Judge should have considered it as a motion for the
discharge of the attachment and should have conducted a hearing or
required submission of counter-affidavits from the petitioners, if only
to gather facts in support of the allegation of fraud (Jopillo, Jr. v. Court
of Appeals, 167 SCRA 247 [1988]). This is what Section 13 of Rule 57
mandates.
This procedure should be followed because, as the Court has time and
again said, attachment is a harsh, extraordinary and summary remedy
and the rules governing its issuance must be construed strictly against
the applicant. Verily, a writ of attachment can only be granted on
concrete and specific grounds and not on general averments quoting
perfunctorily the words of the Rules.
14
CLAUDE NEON LIGHTS VS. PHIL ADVERTISING CORP. If, as we believe, section 424, paragraph 2, should not be held
applicable to foreign corporations duly licensed to do business in the
FACTS: On April 5, 1932, the respondent Philippine Advertising Philippine Islands both because the language and the reason of the
Corporation filed suit against the petitioner in the Court of First statute limit it to natural persons, we sustain and reinforce the
Instance of Manila, claiming P300,000 as damages for alleged breach provisions of section 71 of the Corporation Law, Act No. 1459, which
of the agency contract existing between the said respondent and the provides in substance that if the Secretary of Finance or the Secretary
petitioner. At the same time, said respondent filed in said court an of Commerce and Communications and the Governor-General find a
application for writ of attachment duly verified in which it is stated that duly licensed foreign corporation to be insolvent or that its continuance
the defendant (petitioner herein) is a foreign corporation having its in business will involve probable loss to its creditors, they may revoke
principal place of business in the City of Washington, District of its license and "the Attorney-General shall take such proceedings as
Columbia. It is not alleged in said application that the defendant, may be proper to protect creditors and the public". Section 71, supra,
Claude Neon Lights, Inc. (the petitioner herein) was about to depart contemplates that the proceedings instituted by the Attorney-General
from the Philippine Islands with intent to defraud its creditors or that it shall effect the protection of all creditors and the public equally.
was insolvent or had removed or disposed of its property or was about Obviously, the benefit of that section will be minimized, if not entirely
to do so with intent to defraud its creditors. defeated, if a creditor or a few creditors can obtain privileged liens by
writs of attachment based on the sole allegation, which is easily and
ISSUE: Is par. f applicable to a foreign corp doing business in the safely made, that the corporation is "not residing in the Philippine
Phil? Islands".
HELD: NO. Section 242 of the Code of Civil Procedure under which Paragraph 2 of section 424, supra does not apply to a
the petitioner's property was attached, reads as follows: domestic corporation. Our laws and jurisprudence indicate a
purpose to assimilate foreign corporations, duly licensed to do
Attachment. — A plaintiff may, at the commencement business here, to the status of domestic corporations.
of his action, or at any time afterwards, have the property of
the defendant attached as security for the satisfaction of any
judgment that may be recovered, unless the defendant gives
security to pay such judgment, in the manner hereinafter
provided, in the following cases.
1. In all the cases mentioned in section four hundred and

twelve, providing for the arrest of a defendant. But the
plaintiff must make an election as to whether he will ask for
an order of arrest or an order of attachment; he shall not be
entitled to both orders;
2. In an action against a defendant not residing in the

Philippine Islands.
It may be observed at the outset that the words of section 424, supra,
taken in their literal sense seem to refer to a physical defendant who is
capable of being "arrested" or who is "not residing in the Philippine
Islands". It is only by a fiction that it can be held that a corporation is
"not residing in the Philippine Islands". A corporation has no home or
residence in the sense in which those terms are applied to natural
persons. For practical purposes, a corporation is sometimes said, in a
metaphorical sense, to be "a resident" of a certain state or a "citizen"
of a certain country, which is usually the state or country by which or
under the laws of which it was created. But that fiction or analogy
between corporations and natural persons by no means extends so far
that it can be said that every statute applicable to natural persons is
applicable to corporations. Indeed, within the same jurisdiction a
corporation has been held to be a "citizen" of the state of its creation
for the purpose of determining the jurisdiction of the Federal courts
but not a "citizen" within the meaning of section 2 of article 4 of the
Constitution of the United States which provides that the citizens of
each state shall be entitled to all the privileges and immunities of
citizens of the several states.
Corporations, as a rule, are less mobile than individuals. This is a

specially true of foreign corporations that are carrying on business by
proper authority in these Islands. They possess, as a rule, great capital
which is seeking lucrative and more or less permanent investment in
young and developing countries like our Philippines. Some of them
came here as far back as the Spanish regime and are still important
factors in our financial and industrial life. They are anything but "fly-
by-night" concerns. The latter, we believe, are effectually excluded
from our Islands both by our laws and by our geographical and
economic situation.
15
STATE INVESTMENT HOUSE, INC. VS. CITIBANK, N.A.
FACTS: The foreign banks involved in the controversy are Bank of

America NT and SA, Citibank N.A. and Hongkong and Shanghai
Banking Corporation. On December 11, 1981, they jointly filed with the
Court of First Instance of Rizal a petition for involuntary insolvency of
Consolidated Mines, Inc. (CMI).
The petition was opposed by State Investment House, Inc. (SIHI) and
State Financing Center, Inc. (SFCI). 3 It claimed that: the Court had
no jurisdiction to take cognizance of the petition for insolvency
because petitioners are notresident creditors of CMI in contemplation
of the Insolvency Law.
ISSUE: whether or not foreign banks licensed to do business in the

Philippines, may be considered "residents of the Philippine
Islands" within the meaning of Section 20 of the Insolvency Law
HELD: This Court itself has already had occasion to hold that a
foreign corporation licitly doing business in the Philippines, which is a
defendant in a civil suit, may not be considered a non-resident within
the scope of the legal provision authorizing attachment against a
defendant not residing in the Philippine Islands;" in other words, a
preliminary attachment may not be applied for and granted solely on
the asserted fact that the defendant is a foreign corporation authorized
to do business in the Philippines — and is consequently and
necessarily, "a party who resides out of the Philippines."
Parenthetically, if it may not be considered as a party not residing in
the Philippines, or as a party who resides out of the country, then,
logically, it must be considered a party who does reside in the
Philippines, who is a resident of the country. Be this as it may, this
Court pointed out that:
. . . Our laws and jurisprudence indicate a purpose

to assimilate foreign corporations, duly licensed to
do business here, to the status of domestic
corporations. (Cf. Section 73, Act No. 1459, and
Marshall Wells Co. vs. Henry W. Elser & Co., 46
Phil. 70, 76; Yu; Cong Eng vs. Trinidad, 47 Phil.
385, 411) We think it would be entirely out of line
with this policy should we make a discrimination
against a foreign corporation, like the petitioner,
and subject its property to the harsh writ of
seizure by attachment when it has complied not
only with every requirement of law made specially
of foreign corporations, but in addition with every
requirement of law made of domestic
corporations. . . . .
Obviously, the assimilation of foreign corporations authorized

to do business in the Philippines "to the status of
domestic corporations," subsumes their being found and
operating as corporations, hence, residing, in the country.
16
MABANAG VS. GALLEMORE Tested by the foregoing decisions and authorities, the Court has
acquired jurisdiction of the case at bar by virtue of the attachment of
FACTS: The purpose of the action is to recover P735.18, an amount the defendant's credit.
said to have been paid by the plaintiff to the defendant for two parcels
of land whose sale was afterward annulled. The defendant is said to
be residing in Los Angeles, California, U. S. A. He has no property in
the Philippine except an alleged debt owing him by a resident of the
municipality of Occidental Misamis. This debt, upon petition of the
plaintiff, after the filing of the complaint and before the suit was
dismissed, was attached to the extent of plaintiff's claim for the
payment of which the action was brought.
ISSUE: May the court render judgment in a case where it

failed to obtain personal jurisdiction over a non-resident
defendant?
HELD: YES. In an ordinary attachment proceeding, if the defendant is

not personally served, the preliminary seizure is to be considered
necessary in order to confer jurisdiction upon the court. In this case
the lien on the property is acquired by the seizure; and the purpose of
the proceeding is to subject the property to that lien. If a lien already
exists, whether created by mortgage, contract, or statute, the
preliminary seizure is not necessary; and the court proceeds to enforce
such lien in the manner provided by law precisely as though the
property had been seized upon attachment.
A fuller statement of the principle whereunder attachment or

garnishment of property of a non-resident defendant confers
jurisdiction on the court in an otherwise personal action, appears in
two well known and authoritative works:
The main action in an attachment or garnishment suit is in rem until

jurisdiction of the defendant is secured. Thereafter, it is in
personam and also in rem, unless jurisdiction of the res is lost as by
dissolution of the attachment. If jurisdiction of the defendant is
acquired but jurisdiction of the res is lost, it is then purely in
personam. . . a proceeding against property without jurisdiction of the
person of the defendant is in substance a proceeding in rem; and
where there is jurisdiction of the defendant, but the proceedings
against the property continues, that proceedings is none the less
necessarily in rem, although in form there is but a single proceeding.
As the remedy is administered in some states, the theory of

an attachment, whether it is by process against or to subject
the property or effects of a resident or non-resident of the
state, is that it partakes essentially of the nature and
character of the proceeding in personam and not of a
proceeding in rem. And if the defendant appears the action
proceeds in accordance with the practice governing
proceedings in personam. But were the defendant fails to
appear in the action, the proceeding is to be considered as
one in the nature of a proceeding in rem. And where the
court acts directly on the property, the title thereof being
charged by the court without the intervention of the party,
the proceeding unquestionably is one in rem in the fullest
meaning of the term.
In attachment proceedings against a non-resident defendant where

personal service on him is lacking, it is elementary that the court must
obtain jurisdiction of the property of the defendant. If no steps have
been taken to acquire jurisdiction of the defendant's person, and he
has not appeared and answered or otherwise submitted himself to the
jurisdiction of the court, the court is without jurisdiction to render
judgment until there has been a lawful seizure of property owned by
him within the jurisdiction of the court.
17
PCIB VS. ALEJANDRO 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
FACTS: On October 23, 1997, petitioner filed against respondent a the defendant), is no longer for the purpose of acquiring jurisdiction
complaint3 for sum of money with prayer for the issuance of a writ of but for compliance with the requirements of due process.30
preliminary attachment. Said complaint alleged that on September 10,
1997, respondent, a resident of Hong Kong, executed in favor of
However, where the defendant is a resident who is temporarily out of
petitioner a promissory note obligating himself to payP249,828,588.90
the Philippines, attachment of his/her property in an action in
plus interest.
personam, is not always necessary in order for the court to acquire
jurisdiction to hear the case.
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 Section 16, Rule 14 of the Rules of Court reads:
unassigned deposits notwithstanding his verbal promise to PCIB
Assistant Vice President Corazon B. Nepomuceno not to withdraw the Sec. 16. Residents temporarily out of the Philippines. – When an action
same prior to their assignment as security for the loan; and (2) that is commenced against a defendant who ordinarily resides within the
respondent is not a resident of the Philippines. The application for the Philippines, but who is temporarily out of it, service may, by leave of
issuance of a writ was supported with the affidavit of Nepomuceno. court, be also effected out of the Philippines, as under the preceding
section.
Petitioner also contends that even if respondent 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 The preceding section referred to in the above provision is Section 15
resident who is temporarily out of the Philippines upon whom service which provides for extraterritorial service – (a) personal service out of
of summons may be effected by publication. the Philippines, (b) 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; or (c) in any other manner which the court
ISSUE: WON attachment is proper in this case may deem sufficient.
HELD: NO. In the hearings of the motion, and oral arguments of
counsels before the Court, it appears that plaintiff BANK through its In Montalban v. Maximo,31 however, the Court held that substituted
contracting officers Vice President Corazon B. Nepomuceno and service of summons (under the present Section 7, Rule 14 of the Rules
Executive Vice President Jose Ramon F. Revilla, personally transacted of Court) is the normal mode of service of summons that will confer
with defendant mainly through defendant‘s permanent residence in jurisdiction on the court over the person of residents temporarily out of
METRO-MANILA, either in defendant‘s home address in Quezon City or the Philippines. Meaning, service of summons may be effected by (a)
his main business address at the Romulo Mabanta Buenaventura Sayoc leaving copies of the summons at the defendant‘s residence with some
& Delos Angeles in MAKATI and while at times follow ups were made person of suitable discretion residing therein, or (b) by leaving copies
through defendant‘s temporary home and business addresses in at the defendant‘s office or regular place of business with some
Hongkong. It is therefore clear that plaintiff could not deny their competent person in charge thereof.32 Hence, the court may acquire
personal and official knowledge that defendant‘s permanent and jurisdiction over an action in personam by mere substituted service
official residence for purposes of service of summons is in the without need of attaching the property of the defendant.
Philippines.
The rationale in providing for substituted service as the
On the above findings, it is obvious that plaintiff already knew from the normal mode of service for residents temporarily out of the
beginning the deficiency of its second ground for attachment [i.e.,] Philippines, was expounded in Montalban v. Maximo,33 in this
wise:
disposing properties with intent to defraud his creditors, and therefore
plaintiff had to resort to this misrepresentation that defendant was
residing out of the Philippines and suppressed the fact that defendant‘s A man temporarily absent from this country leaves a definite
place of residence, a dwelling where he lives, a local base, so
permanent residence is in METRO MANILA where he could be served
to speak, to which any inquiry about him may be directed and
with summons. where he is bound to return. Where one temporarily absents
himself, he leaves his affairs in the hands of one who may be
The purposes of preliminary attachment are: (1) to seize the property reasonably expected to act in his place and stead; to do all
of the debtor in advance of final judgment and to hold it for purposes that is necessary to protect his interests; and to communicate
of satisfying said judgment, as in the grounds stated in paragraphs (a) with him from time to time any incident of importance that
to (e) of Section 1, Rule 57 of the Rules of Court; or (2) to acquire may affect him or his business or his affairs. It is usual for
jurisdiction over the action by actual or constructive seizure of the such a man to leave at his home or with his business
property in those instances where personal or substituted service of associates information as to where he may be contacted in the
summons on the defendant cannot be effected, as in paragraph (f) of event a question that affects him crops up.
the same provision.27
Thus, in actions in personam against residents temporarily out
Corollarily, in actions in personam, such as the instant case for of the Philippines, the court need not always attach the
collection of sum of money,28 summons must be served by personal defendant‟s property in order to have authority to try the
or substituted service, otherwise the court will not acquire jurisdiction case. Where the plaintiff seeks to attach the defendant‟s
over the defendant. In case the defendant does not reside and is not property and to resort to the concomitant service of summons
found in the Philippines (and hence personal and substituted service by publication, the same must be with prior leave, precisely
cannot be effected), the remedy of the plaintiff in order for the court because, if the sole purpose of the attachment is for the court
to acquire jurisdiction to try the case is to convert the action into a to acquire jurisdiction, the latter must determine whether
proceeding in rem or quasi in rem by attaching the property of the from the allegations in the complaint, substituted service (to
defendant.29 Thus, in order to acquire jurisdiction in actions in persons of suitable discretion at the defendant‟s residence or
personam where defendant resides out of and is not found in the to a competent person in charge of his office or regular place
Philippines, it becomes a matter of course for the court to convert the of business) will suffice, or whether there is a need to attach
action into a proceeding in rem or quasi in rem by attaching the the property of the defendant and resort to service of
defendant‘s property. The service of summons in this case (which may summons by publication in order for the court to acquire
18
jurisdiction over the case and to comply with the

requirements of due process.
In the instant case, it must be stressed that the writ was issued by the
trial court mainly on the representation of petitioner that respondent is
not a resident of the Philippines.34 Obviously, the trial court‘s issuance
of the writ was for the sole purpose of acquiring jurisdiction to hear
and decide the case. Had the allegations in the complaint disclosed
that respondent has a residence in Quezon City and an office in Makati
City, the trial court, if only for the purpose of acquiring jurisdiction,
could have served summons by substituted service on the said
addresses, instead of attaching the property of the defendant. The
rules on the application of a writ of attachment must be strictly
construed in favor of the defendant. For attachment is harsh,
extraordinary, and summary in nature; it is a rigorous remedy which
exposes the debtor to humiliation and annoyance.35 It should be
resorted to only when necessary and as a last remedy.
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.
19
WEE VS. TANKIANSEE (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 the performance thereof.
FACTS: Petitioner Alejandro Ng Wee, a valued client of Westmont
Bank (now United Overseas Bank), made several money placements
totaling P210,595,991.62 with the bank's affiliate, Westmont For a writ of attachment to issue under this rule, the applicant must
Investment Corporation (Wincorp), a domestic entity engaged in the sufficiently show the factual circumstances of the alleged fraud
business of an investment house with the authority and license to because fraudulent intent cannot be inferred from the debtor's mere
extend credit.3 non-payment of the debt or failure to comply with his
obligation.30 The applicant must then be able to demonstrate that the
debtor has intended to defraud the creditor.31 In Liberty Insurance
Sometime in February 2000, petitioner received disturbing news on
Corporation v. Court of Appeals,32 we explained as follows:
Wincorp's financial condition prompting him to inquire about and
investigate the company's operations and transactions with its
borrowers. He then discovered that the company extended a loan To sustain an attachment on this ground, it must be shown
equal to his total money placement to a corporation [Power Merge] that the debtor in contracting the debt or incurring the
with a subscribed capital of only P37.5M. This credit facility originated obligation intended to defraud the creditor. The fraud must
from another loan of about P1.5B extended by Wincorp to another relate to the execution of the agreement and must have
corporation [Hottick Holdings]. When the latter defaulted in its been the reason which induced the other party into giving
obligation, Wincorp instituted a case against it and its surety. consent which he would not have otherwise given. To
Settlement was, however, reached in which Hottick's president, Luis constitute a ground for attachment in Section 1 (d), Rule 57
Juan L. Virata (Virata), assumed the obligation of the surety.4 of the Rules of Court, fraud should be committed upon
contracting the obligation sued upon. A debt is fraudulently
contracted if at the time of contracting it the debtor has a
Under the scheme agreed upon by Wincorp and Hottick's president,
preconceived plan or intention not to pay, as it is in this
petitioner's money placements were transferred without his knowledge
case. Fraud is a state of mind and need not be proved by
and consent to the loan account of Power Merge through an
direct evidence but may be inferred from the circumstances
agreement that virtually freed the latter of any liability. Allegedly,
attendant in each case.33
through the false representations of Wincorp and its officers and
directors, petitioner was enticed to roll over his placements so that
Wincorp could loan the same to Virata/Power Merge.5 In the instant case, petitioner's October 12, 2000 Affidavit is bereft of
any factual statement that respondent committed a fraud. The affidavit
narrated only the alleged fraudulent transaction between Wincorp and
Finding that Virata purportedly used Power Merge as a conduit and
Virata and/or Power Merge, which, by the way, explains why this
connived with Wincorp's officers and directors to fraudulently obtain
Court, in G.R. No. 162928, affirmed the writ of attachment issued
for his benefit without any intention of paying the said placements,
against the latter. As to the participation of respondent in the said
petitioner instituted, on October 19, 2000, Civil Case No. 00-99006 for
transaction, the affidavit merely states that respondent, an officer and
damages with the Regional Trial Court (RTC) of Manila.6 One of the
director of Wincorp, connived with the other defendants in the civil
defendants impleaded in the complaint is herein respondent Manuel
case to defraud petitioner of his money placements. No other factual
Tankiansee, Vice-Chairman and Director of Wincorp.7
averment or circumstance details how respondent committed a fraud
or how he connived with the other defendants to commit a fraud in the
On October 26, 2000, on the basis of the allegations in the complaint transaction sued upon. In other words, petitioner has not shown any
and the October 12, 2000 Affidavit8 of petitioner, the trial court specific act or deed to support the allegation that respondent is guilty
ordered the issuance of a writ of preliminary attachment against the of fraud.
properties not exempt from execution of all the defendants in the civil
case subject, among others, to petitioner's filing of a P50M-bond.9The
The affidavit, being the foundation of the writ, must contain such
writ was, consequently, issued on November 6, 2000.
particulars as to how the fraud imputed to respondent was committed
for the court to decide whether or not to issue the writ.36 Absent any
Respondent for his part counters that a writ of attachment can only be
statement of other factual circumstances to show that respondent, at
granted on concrete and specific grounds and not on general
averments quoting perfunctorily the words of the Rules. Connivance the time of contracting the obligation, had a preconceived plan or
cannot also be based on mere association but must be particularly intention not to pay, or without any showing of how respondent
alleged and established as a fact. committed the alleged fraud, the general averment in the affidavit that
respondent is an officer and director of Wincorp who allegedly
ISSUE: WON attachment is proper in this case connived with the other defendants to commit a fraud, is insufficient to
support the issuance of a writ of preliminary attachment.37 In the
HELD: NO. In the case at bench, the basis of petitioner's application application for the writ under the said ground, compelling is the need
for the issuance of the writ of preliminary attachment against the to give a hint about what constituted the fraud and how it was
properties of respondent is Section 1(d) of Rule 57 of the Rules of perpetrated38 because established is the rule that fraud is never
Court which pertinently reads: presumed.39 Verily, the mere fact that respondent is an officer and
director of the company does not necessarily give rise to the inference
Section 1. Grounds upon which attachment may issue.-At that he committed a fraud or that he connived with the other
the commencement of the action or at any time before entry defendants to commit a fraud. While under certain circumstances,
of judgment, a plaintiff or any proper party may have the courts may treat a corporation as a mere aggroupment of persons, to
property of the adverse party attached as security for the
whom liability will directly attach, this is only done when the
satisfaction of any judgment that may be recovered in the
following cases: wrongdoing has been clearly and convincingly established.
xxxx
20
METRO INC VS. LARA‟S GIFT

a. That plaintiffs transfer and endorse to defendant Metro
some of the Purchase Orders (PO‘s) they will receive from their
FACTS: In May 2003, respondents filed with the Regional Trial Court,
US buyers;
Branch 197, Las Piñas City (trial court) a complaint against petitioners
for sum of money and damages with a prayer for the issuance of a b. That defendants will sell exclusively
writ of preliminary attachment. Subsequently, respondents filed an and “only thru” plaintiffs for their US
amended complaint and alleged that, as of July 2002, petitioners buyer;
defrauded them in the amount of $521,841.62. Respondents also
prayed for P1,000,000 as moral damages, P1,000,000 as exemplary xxx
damages and 10% of the judgment award as attorney‘s
6. After several discussions on the matter
fees. Respondents also prayed for the issuance of a writ of preliminary and further inducement on the part of defendant
attachment. spouses, plaintiff spouses agreed. Thus, on April
21, 2001, defendant spouses confirmed and
In its 23 June 2003 Order, the trial court granted respondents‘ finalized the agreement in a letter-document
prayer and issued the writ of attachment against the properties and entitled ―2001 Agreement‖ they emailed to
assets of petitioners. plaintiff spouses, a copy of which is hereto
attached as Annex “A”.
ISSUE: WON attachment is proper
xxx
HELD: YES. In this case, the basis of respondents‘ application for the
issuance of a writ of preliminary attachment is Section 1(d), Rule 57 of 20. Defendants are guilty of fraud
the Rules of Court which provides: committed both at the inception of the agreement
and in the performance of the
obligation. Through machinations and schemes,
SEC. 1. Grounds upon which attachment
defendants successfully enticed plaintiffs to enter
may issue. — At the commencement of the action
into the 2001 Agreement. In order to secure
or at any time before entry of judgment, a plaintiff
plaintiffs‘ full trust in them and lure plaintiffs to
or any proper party may have the property of the
endorse more POs and increase the volume of
adverse party attached as security for the
the orders, defendants during the early part,
satisfaction of any judgment that maybe
remitted to plaintiffs shares under the Agreement.
recovered in the following cases: x x x
21. However, soon thereafter, just when the orders increased
and the amount involved likewise increased, defendants suddenly,
(d) In an action against a party who has been guilty of fraud
without any justifiable reasons and in pure bad faith and fraud,
in contracting the debt or incurring the obligation upon which the
abandoned their contractual obligations to remit to plaintiffs their
action is brought, or in the performance thereof; x x x
shares. And worse, defendants transacted directly with
In Liberty Insurance Corporation v. Court of Appeals,[14] we plaintiffs‟ foreign buyer to the latter‟s exclusion and
damage. Clearly, defendants planned everything from the beginning,
explained: employed ploy and machinations to defraud plaintiffs, and
consequently take from them a valuable client.
To sustain an attachment on this ground, it
must be shown that the debtor in contracting the 22. Defendants are likewise guilty of fraud by violating
debt or incurring the obligation intended to the trust and confidence reposed upon them by
defraud the creditor. The fraud must relate to the plaintiffs. Defendants received the proceeds of plaintiffs‟
execution of the agreement and must have been LCs with the clear obligation of remitting 15% thereof to the
the reason which induced the other party into plaintiffs. Their refusal and failure to remit the said amount
giving consent which he would not have otherwise despite demand constitutes a breach of trust amounting to
given. To constitute a ground for attachment malice and fraud.
in Section 1(d), Rule 57 of the Rules of Court,
fraud should be committed upon contracting the We rule that respondents‘ allegation that petitioners undertook
obligation sued upon. A debt is fraudulently
to sell exclusively and only through JRP/LGD for Target Stores
contracted if at the time of contracting it the
debtor has a preconceived plan or intention not to Corporation but that petitioners transacted directly with respondents‘
pay, as it is in this case.[15] foreign buyer is sufficient allegation of fraud to support their
application for a writ of preliminary attachment.
The applicant for a writ of preliminary attachment must sufficiently
show the factual circumstances of the alleged fraud because
fraudulent intent cannot be inferred from the debtor‘s mere non-
payment of the debt or failure to comply with his obligation.[16]
In their amended complaint, respondents alleged the following in

support of their prayer for a writ of preliminary attachment:
5. Sometime in early 2001, defendant

Frederick Juan approached plaintiff spouses and
asked them to help defendants‘ export
business. Defendants enticed plaintiffs to enter
into a business deal. He proposed to plaintiff
spouses the following:
21
SECTION 2 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
SIEVERT VS. CA December 22, 1988 writ of preliminary attachment is embodied in a discrete pleading, such
petition must be served either simultaneously with service of
FACTS: On 18 May 1988 petitioner Alberto Sievert a citizen and summons and a copy of the main complaint, or after jurisdiction over
resident of the Philippines received by mail a Petition for Issuance of a
the defendant has already been acquired by such service of summons.
Preliminary Attachment filed with the Regional Trial Court of Manila Notice of the separate attachment petition is not notice of the main
action. Put a little differently, jurisdiction whether ratione personae or
Branch 32 in Civil Case No. 88-44346. Petitioner had not
previously received any summons and any copy of a complaint ratione materiae in an attachment proceeding is ancillary to jurisdiction
ratione personae or ratione materiae in the main action against the
against him in Civil Case No. 88-44346.
defendant. If a court has no jurisdiction over the subject matter or
over the person of the defendant in the principal action, it simply has
On the day set for hearing of the Petition for a Preliminary Writ of
no jurisdiction to issue a writ of preliminary attachment against the
Attachment, petitioner's counsel went before the trial court and
defendant or his property.
entered a special appearance for the limited purpose of objecting to
the jurisdiction of the court. He simultaneously filed a written objection
to the jurisdiction of the trial court to hear or act upon the Petition for 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
Issuance of a Preliminary Writ of Attachment. In this written objection,
petitioner prayed for denial of that Petition for lack of jurisdiction over that neither service of summons with a copy of the complaint nor
voluntary appearance of petitioner Sievert was had in this case. Yet,
the person of the petitioner (defendant therein) upon the ground that
since no summons had been served upon him in the main case, no the trial court proceeded to hear the petition for issuance of the writ.
jurisdiction over the person of the petitioner had been acquired by the
trial court.
ISSUE: WON 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.
HELD: NO. 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 deter. nation is to be made. The critical time
which 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 critical time is the time of the vesting of jurisdiction in the court
over the person of the defendant in the main case.
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 . 4 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
case — and that is what happened in this case — does not of
course confer jurisdiction upon the issuing court over the
person of the defendant.
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
22
DAVAO LIGHT AND POWER CO. VS. CA December 29, 1991 service of the summons is effected on the defendant in any of the
ways authorized by the Rules of Court. There is thus ordinarily some
FACTS: On May 2, 1989 Davao Light & Power Co., Inc. (hereafter, appreciable interval of time between the day of the filing of the
simply Davao Light) filed a verified complaint for recovery of a sum of complaint and the day of service of summons of the defendant. During
money and damages against Queensland Hotel, etc. and Teodorico this period, different acts may be done by the plaintiff or by the Court,
which are unquestionable validity and propriety. Among these, for
Adarna (docketed as Civil Case No. 19513-89). The complaint
contained an ex parte application for a writ of preliminary attachment. 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
On May 3, 1989 Judge Nartatez, to whose branch the case was
without leave of court, authorization by the Court of service of
assigned by raffle, issued an Order granting theex parte application
summons by publication, the dismissal of the action by the plaintiff on
and fixing the attachment bond at P4,600,513.37.
mere notice.
On May 11, 1989 the attachment bond having been submitted by

This, too, is true with regard to the provisional remedies of preliminary
Davao Light, the writ of attachment issued.
attachment, preliminary injunction, receivership or replevin. They may
be validly and properly applied for and granted even before the
On May 12, 1989, the summons and a copy of the complaint, as well defendant is summoned or is heard from.
as the writ of attachment and a copy of the attachment bond, were
served on defendants Queensland and Adarna; and pursuant to the
It was on account of the failure to comply with this
writ, the sheriff seized properties belonging to the latter.
fundamental requirement of service of summons and the
other documents above indicated that writs of attachment
On September 6, 1989, defendants Queensland and Adarna filed a issued by the Trial Court ex parte were struck down by this
motion to discharge the attachment for lack of jurisdiction to issue the Court's Third Division in two (2) cases, namely: Sievert
same because at the time the order of attachment was promulgated v. Court of Appeals, 31 and BAC Manufacturing and Sales
(May 3, 1989) and the attachment writ issued (May 11, 1989), the Corporation v. Court of Appeals, et al. 32 In contrast to the
Trial Court had not yet acquired jurisdiction over the cause and over case at bar — where the summons and a copy of the
the persons of the defendants. complaint, as well as the order and writ of attachment and the
attachment bond were served on the defendant — in Sievert,
ISSUE: whether or not a writ of preliminary attachment may issue ex levy on attachment was attempted notwithstanding that only
parte against a defendant before acquisition of jurisdiction of the the petition for issuance of the writ of preliminary attachment
latter's person by service of summons or his voluntary submission to was served on the defendant, without any prior or
the Court's authority. accompanying summons and copy of the complaint; and
in BAC Manufacturing and Sales Corporation, neither the
summons nor the order granting the preliminary attachment
HELD: YES. It is incorrect to theorize that after an action or
or the writ of attachment itself was served on the defendant
proceeding has been commenced and jurisdiction over the person of
"before or at the time the levy was made."
the plaintiff has been vested in the court, but before the acquisition of
jurisdiction over the person of the defendant (either by service of
summons or his voluntary submission to the court's authority), nothing For the guidance of all concerned, the Court reiterates and
can be validly done by the plaintiff or the court. It is wrong to assume reaffirms the proposition that writs of attachment may
that the validity of acts done during this period should be defendant properly issue ex parte provided that the Court is satisfied
on, or held in suspension until, the actual obtention of jurisdiction over that the relevant requisites therefor have been fulfilled by the
the defendant's person. The obtention by the court of jurisdiction over applicant, although it may, in its discretion, require prior
the person of the defendant is one thing; quite another is the hearing on the application with notice to the defendant; but
acquisition of jurisdiction over the person of the plaintiff or over the that levy on property pursuant to the writ thus issued may not
subject-matter or nature of the action, or the res or object hereof. 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
An action or proceeding is commenced by the filing of the complaint or
litem, if any), the application for attachment (if not
other initiatory pleading. By that act, the jurisdiction of the court over
incorporated in but submitted separately from the complaint),
the subject matter or nature of the action or proceeding is invoked or
the order of attachment, and the plaintiff's attachment bond.
called into activity; and it is thus that the court acquires jurisdiction
over said subject matter or nature of the action. And it is by that self-
same act of the plaintiff (or petitioner) of filing the complaint (or other
appropriate pleading) — by which he signifies his submission to the
court's power and authority — that jurisdiction is acquired by the court
over his person. On the other hand, jurisdiction over the person of the
defendant is obtained, as above stated, by the service of summons or
other coercive process upon him or by his voluntary submission to the
authority of the court.
The events that follow the filing of the complaint as a matter of routine
are well known. After the complaint is filed, summons issues to the
defendant, the summons is then transmitted to the sheriff, and finally,
23
CUARTERO VS. CA August 5, 1992 of Appeals, supra, the phrase "at the commencement of the action" is
interpreted as referring to the date of the filing of the complaint which
FACTS: On August 20, 1990, petitioner Ricardo Cuartero filed a is a time before summons is served on the defendant or even before
complaint before the Regional Trial Court of Quezon City against the summons issues.
private respondents, Evangelista spouses, for a sum of money plus
damages with a prayer for the issuance of a writ of preliminary It is clear from our pronouncements that a writ of preliminary
attachment. attachment may issue even before summons is served upon the
defendant. However, we have likewise ruled that the writ cannot bind
On August 24, 1990, the lower court issued an order granting ex- and affect the defendant. However, we have likewise ruled that the
parte the petitioner's prayer for the issuance of a writ of preliminary writ cannot bind and affect the defendant until jurisdiction over his
attachment. person is eventually obtained. Therefore, it is required that when the
proper officer commences implementation of the writ of attachment,
On September 19, 1990, the writ of preliminary attachment was issued service of summons should be simultaneously made.
pursuant to the trial court's order dated August 24, 1990. On the same
day, the summons for the spouses Evangelista was likewise prepared. It must be emphasized that the grant of the provisional
remedy of attachment practically involves three stages: first,
The following day, that is, on September 20, 1990, a copy of the writ the court issues the order granting the application; second,
of preliminary attachment, the order dated August 24, 1990, the the writ of attachment issues pursuant to the order granting
summons and the complaint were all simultaneously served upon the the writ; and third, the writ is implemented. For the initial two
private respondents at their residence. Immediately thereafter, Deputy stages, it is not necessary that jurisdiction over the person of
Sheriff Ernesto L. Sula levied, attached and pulled out the properties in the defendant should first be obtained. However, once the
compliance with the court's directive to attach all the properties of implementation commences, it is required that the court must
private respondents not exempt from execution, or so much thereof as have acquired jurisdiction over the defendant for without such
may be sufficient to satisfy the petitioner's principal claim in the jurisdiction, the court has no power and authority to act in
amount of P2,171,794.91. any manner against the defendant. Any order issuing from the
Court will not bind the defendant.
Subsequently, the spouses Evangelista filed motion to set aside the
order dated August 24, 1990 and discharge the writ of preliminary In Sievert v. Court of Appeals, supra, cited by the Court of Appeals in
attachment for having been irregularly and improperly issued. On its questioned decision, the writ of attachment issued ex-parte was
October 4, 1990, the lower court denied the motion for lack of merit. struck down because when the writ of attachment was being
implemented, no jurisdiction over the person of the defendant had as
yet been obtained. The court had failed to serve the summons to the
ISSUE: WON attachment is proper defendant.
HELD: YES. In the later case of Davao Light and Power Co., Inc. v. The circumstances in Sievert are different from those in the case at
Court of Appeals, G.R. No. 93262, November 29, 1991, we had bar. When the writ of attachment was served on the spouses
occasion to deal with certain misconceptions which may have arisen
Evangelista, the summons and copy of the complaint were also
from our Sievert ruling. The question which was resolved in the Davao
Light case is whether or not a writ of preliminary attachment may simultaneously served.
issue ex-parte against a defendant before the court acquires
jurisdiction over the latter's person by service of summons or his
voluntary submission to the court's authority. The Court answered in
the affirmative. This should have clarified the matter but apparently
another ruling is necessary.
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 might be secured in said action by the attaching
creditor against the defendant.
Under section 3, Rule 57 of the Rules of Court, the only requisites for
the issuance of the writ are the affidavit and bond of the applicant. As
has been expressly ruled in BF Homes, Inc. v. Court of Appeals, 190
SCRA 262 (1990), citing Mindanao Savings and Loan Association, Inc.
v. Court of Appeals, 172 SCRA 480 (1989), no notice to the adverse
party or hearing of the application is required inasmuch as the time
which the hearing will take could be enough to enable the defendant
to abscond or dispose of his property before a writ of attachment
issues. In such a case, a hearing would render nugatory the purpose
of this provisional remedy. The ruling remains good law. There is,
thus, no merit in the private respondents' claim of violation of their
constitutionally guaranteed right to due process.
The writ of preliminary attachment can be applied for and granted at

the commencement of the action or at any time thereafter (Section 1,
Rule 57, Rules of Court). In Davao Light and Power, Co., Inc. v. Court
24
SALAS VS. ADIL May 14, 1979
FACTS: On September 10, 1976, respondents Rosita Bedro and Benita

Yu filed the afore-mentioned civil action with the Court of First
Instance of Iloilo against herein petitioners Ricardo T. Salas and Maria
Salas, the Philippine Commercial & Industrial Bank, in its capacity as
Administrator of the Testate Estate of the deceased Charles Newton
Hodges, and Avelina A. Magno, in her capacity as Administratrix of the
Testate Estate of the deceased Linnie Jane Hodge to annul the deed of
sale of Lot No. 5 executed by administrators of the Hodges Estate in
favor of the Spouses Ricardo T. Salas and Maria Salas and for
damages.
In a motion dated May 12, 1977, private respondents filed a Motion for
Attachment, alleging, among others, that the case was "for annulment
of a deed of sale and recovery of damages" and that the defendants
have removed or disposed of their properties or are about to do so
with intent to defraud their creditors especially the plaintiffs in this
case.
On May 13, 1977, respondent Judge issued ex-parte a Writ of

Attachment "against the properties of the defendants particularly Lots
Nos. 1 and 4 of Psc-2157 less the building standing thereon upon the
plaintiffs filing a bond in the amount of P200,000.00 subject to the
approval of this Court." After a surety bond in the amount of
P200,000.00, executed on May 11, 1977 by the Central Surety and
Insurance Company as surety was filed, the writ itself was issued by
respondent Judge on May 16, 1977, directing the Sheriff to attach the
properties above-mentioned. On May 17, 1977, the Deputy Sheriff of
Iloilo levied upon the aforesaid properties of petitioners.
ISSUE: in what instance is the hearing of writ required?

HELD: Considering the gravity of the allegation that herein petitioners
have removed or disposed of their properties or are about to do so
with intent to defraud their creditors, and further considering that the
affidavit in support of the pre attachment merely states such ground in
general terms, without specific allegations of lances to show the
reason why plaintiffs believe that defendants are disposing of their
properties in fraud of creditors, it was incumbent upon respondent
Judge to give notice to petitioners and to allow wherein evidence is
them to present their position at a to be received. Moreover, it appears
from the records that private respondents are claiming unliquidated
damages, including moral damages, from petitioners. The authorities
agree that the writ of attachment is not available 'm a suit for
damages where the amount claimed is contingent or unliquidated.
25
LA GRANJA INC VS. SAMSON September 14, 1933
FACTS: On July 5, 1932, the petitioner herein, La Granja, Inc., filed a

complaint in the Court of First Instance of Cagayan, against Chua Bian,
Chua Yu Lee and Chua Ki, for the recovery of the sum of P2,418.18
with interest thereon at the rate of 12 per cent per annum, which case
was docketed as civil case No. 1888. The plaintiff at the same time,
also prayed for the issuance of an order of attachment against the
aforementioned defendants' property and accompanied said complaint
with an affidavit of the manager of the aforesaid petitioner, La Granja,
Inc., wherein it was alleged among other essential things, that the said
defendants have disposed or are disposing of their properties in favor
of the Asiatic Petroleum Co., with intent to defraud their creditors. The
respondent judge, wishing to ascertain or convince himself of the truth
of the alleged disposal, required the petitioner herein to present
evidence to substantiate its allegation, before granting its petition.
Inasmuch as the petitioner refused to comply with the court's
requirement, alleging as its ground that was not obliged to do so, the
respondent judge dismissed said petition for an order of attachment.
ISSUE: whether or not the mere filing of an affidavit executed in due

form is sufficient to compel a judge to issue an order of attachment.
HELD: NO. Although the law requires nothing more than the affidavit
as a means of establishing the existence of such facts, nevertheless,
such affidavit must be sufficient to convince the court of their
existence, the court being justified in rejecting the affidavit if it does
not serve this purpose and in denying the petition for an order of
attachment. The affidavit filed by the petitioner, La Granja, Inc., must
not have satisfied the respondent judge inasmuch as he desired to
ascertain or convince himself of the truth of the facts alleged therein
by requiring evidence to substantiate them. The sufficiency or
insufficiency of an affidavit depends upon the amount of credit given it
by the judge, and its acceptance or rejection, upon his sound
discretion.
Hence, the respondent judge, in requiring the presentation of evidence

to establish the truth of the allegation of the affidavit that the
defendants had disposed or were disposing of their property to
defraud their creditors, has done nothing more than exercise his sound
discretion in determining the sufficiency of the affidavit.
In view of the foregoing considerations, we are of the opinion and so

hold that the mere filing of an affidavit executed in due form is not
sufficient to compel a judge to issue an order of attachment, but it is
necessary that by such affidavit it be made to appear to the court that
there exists sufficient cause for the issuance thereof, the determination
of such sufficiency being discretionary on the part of the court.
26
SECTION 3
KO GLASS CO VS. VALENZUELA
FACTS: On October 6, 1977, an action was instituted in the Court of

Glass the sum of P37,190.00. 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.
On January 26, 1978, the defendants therein filed a 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
ISSUE: WON affidavit is valid
HELD: NO. 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.
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.
27
GUZMAN VS. CATOLICO
FACTS: On March 8, 1937, the respondent Alfredo Catolico brought an

action against the herein petitioner Ventura Guzman in the Court of
First Instance of Isabela, for the recovery from the latter of the
amount of his fees for services rendered by him as attorney, praying,
at the same time, for the issuance of a writ of preliminary attachment
against all of the properties adjudicated to said petitioner in special
proceedings No. 179 of said court. As grounds for the issuance of said
writ of preliminary attachment, he alleged: "That the herein defendant
is trying to sell and dispose of the properties adjudicated to him, with
intention to defraud his creditors, particularly the herein plaintiff,
thereby rendering illusory the judgment that may be rendered against
him, inasmuch as he has no other properties outside the same to
answer for the fees the court may fix in favor of the plaintiff, this case
being one of those mentioned by the Code of Civil Procedure
warranting the issuance of a writ of preliminary attachment"
In view of the said complaint and affidavit, the respondent judge, on

March 10, 1937, issued an order granting the petition and ordering the
issuance of a writ of preliminary attachment, after the filing of the
corresponding bond by the plaintiff.
On April 15, 1937, said defendant Ventura Guzman filed a motion for
the cancellation of said writ of preliminary attachment on the ground
that it had been improperly, irregularly and illegally issued, there being
no allegation, either in the complaint or in the affidavit solemnizing it,
that there is no other sufficient security for the claim sought to be
enforced by the action; that the amount due to the plaintiff, above the
legal set-off and counterclaim, is as much as the sum of which the
preliminary attachment has been granted, and that the affidavit of the
plaintiff is base in mere information and belief.
ISSUE: whether or not the requisites prescribed by law for the

issuance of a writ of preliminary attachment have been complied with.
HELD: NO. This court is of the opinion and so holds that failure to
allege in a complaint or in the affidavit solemnizing it, or in a separate
one, the requisites prescribed by section 426 of the Code of Civil
Procedure for the issuance of a writ of preliminary attachment that
there is no other sufficient security for the claim sought to be enforced
by the action, and that the amount due to the plaintiff above all legal
set-offs or counterclaims is as much as the sum for which the order is
sought, renders a writ of preliminary attachments issued against the
property of a defendant fatally defective, and the judge issuing it acts
in excess of his jurisdiction.
28
JARDINE-MANILA FINANCE, INC., petitioner, prescribed by law, said writ is, as it is hereby declared null and void
vs. and of no effect whatsoever.
COURT OF APPEALS, IMPACT CORPORATION, RICARDO DE
LEON and EDUARDO DE LEON
FACTS: On September 28, 1979, petitioner Jardine-Manila Finance,

Inc. (JARDINE) filed a complaint in the then Court of First Instance
(CFI) of Rizal, docketed as Civil Case No. 34617, against private
respondents Impact Corporation (IMPACT), Ricardo de Leon and
Eduardo de Leon, to collect various sums of money allegedly due from
therein defendant IMPACT under a credit accommodation by way of a
discounting line agreement.
Likewise contained in said complaint is petitioner's application for a

writ of preliminary attachment against private respondents.
On October 19, 1979, therein defendants filed a motion to set aside

the writ of preliminary attachment. They also submitted to the court a
quo a memorandum in support of their motion to dissolve the
attachment contending that the grounds alleged by the plaintiff in its
application for a writ of attachment are not among the grounds
specified under Section 1 of Rule 57; that the defendants have other
sufficient security; that there was no affidavit of merit to support the
application for attachment as required by Section 3 of Rule 57 and that
the verification of the complaint was defective as it did not state that
the amount due to the plaintiff above all legal set-ups or counterclaims
is as much as the sum for which the order is sought
ISSUE: whether or not non-compliance with the formal requirements

invalidate the writ of attachment
HELD: YES. The stringent conditions for the issuance of the writ have
been echoed in all subsequent cases, even as late as K.O. Glass
Construction Co. Inc. vs. Valenzuela, wherein the writ of preliminary
attachment issued was annulled and set aside on the findings that
while the plaintiff "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 is granted above all legal
counterclaims."
More specifically, it has been held that the failure to allege in the
affidavit the requisites prescribed for the issuance of the 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. In fact, in such cases, the defect cannot even be cured by
amendment.
Since the attachment is a harsh and rigorous remedy which exposes

the debtor to humiliation and annoyance, the rule authorizing its
issuance must be strictly construed in favor of defendant. It is the duty
of the court before issuing the writ to ensure that all the requisites of
the law have been complied with. Otherwise, a judge acquires no
jurisdiction to issue the writ.
The general rule is that the affidavit is the foundation of the writ, and
if none be filed or one be filed which wholly fails to set out some facts
required by law to be stated therein, there is no jurisdiction and the
proceedings are null and void. Thus, while not unmindful of the fact
that the property seized under the writ and brought into court is what
the court finally exercises jurisdiction over, the court cannot subscribe
to the proposition that the steps pointed out by statutes to obtain such
writ are inconsequential, and in no sense jurisdictional.
Considering that petitioner's application for the subject writ of

preliminary attachment did not fully comply with the requisites
29
ROBERTO TING, and DOLORES TING, petitioners,

vs.
HON. AUGUSTO E. VILLARIN, FELICIANO GERVACIO,
FERDINAND J. GUERRERO, and CONSOLIDATED BANK &
TRUST COMPANY
FACTS: On September 17, 1981, private respondent Consolidated

Bank and Trust Company (hereinafter "Consolidated Bank") filed a
complaint 1 for a sum of money with prayer for a writ of preliminary
attachment against Perlon Textile Mills and its directors.
In support of the application for preliminary attachment, Consolidated

Bank averred the ground of "fraud in contracting an obligation" thus —
16. Defendants are guilty of fraud in contracting their obligations more

specifically illustrated by their violation of the trust receipt agreement
which is a ground defined under Sec. 1, Rule 57 of the Rules of Court
for the issuance of a writ of preliminary attachment.
ISSUE: If the ground for the application for writ of attachment

is FRAUD, what is the requirement for the affidavit?
HELD: The complaint did not provide for a sufficient basis for the
issuance of a writ of preliminary attachment. It is not enough for the
complaint to ritualistic ally cite, as here, that the defendants are "guilty
of fraud in contracting an obligation." An order of attachment cannot
be issued on a general averment, such as one ceremoniously quoting
from a pertinent rule. The need for a recitation of factual
circumstances that support the application becomes more compelling
here considering that the ground relied upon is "fraud in contracting
an obligation." The complaint utterly failed to even give a hint about
what constituted the fraud and how it was perpetrated. Fraud cannot
be presumed.
The respondent judge thus failed in this duty to ensure that, before
issuing the writ of preliminary attachment, all the requisites of the law
have been complied with. He acted in excess of his jurisdiction and the
writ he so issued is thus null and void.
30
GUILLERMO A. CU UNJIENG and MARIANO CU At the time sections 110 and 114 were adopted, the similar provisions
UNJIENG, petitioners, of the California Code had already been construed by the Supreme
vs. Court of California. In Winters vs. Pearson (72 Cal., 553), that court
LEONARD S. GODDARD
used the following language:
FACTS: In that civil action it was alleged in substance that the On a motion to discharge a writ of attachment, on the
defendants, the petitioners in this proceeding, entered into a ground that it was improperly or irregularly issued, the
fraudulent conspiracy or combination with one Fernandez, by which affidavit on which the writ was issued is not amendable.
the conspirators would hypothecate and pledge forged securities of This, in our opinion, is in accordance with section 558 of the
various kinds with the various banking institutions and other Code of Civil Procedure, which provides that the writ was
commercial firms of the City of Manila, and pursuant to said fraudulent improperly or irregularly issued, it must be discharged.
conspiracy, secured credit with the bank, and the plaintiff was
defrauded by the defendants and Fernandez in the sum of To allow the affidavit to be made good by amendment, and
P1,411,312.80. Simultaneously with the filing of the complaint, upon such action refused to discharge the writ, would, in our
plaintiffs asked for a writ of attachment, which was granted. judgment, violate the requirements of the section just above
cited.
About one week thereafter, on October 20, 1931, petitioners herein
filed a motion to discharge the attachment on the ground that it had The facts that California in 1909 changed the law by
been improperly and irregularly issued, which motion contains eight permitting amendments of a defective affidavit for
paragraphs. attachment under certain specified circumstances, does not
affect this case, as our Legislature has allowed the law to
Paragraph (4) alleges that the affidavit was defective in that it fails to stand unchanged.
state that there is no other sufficient security for the claim sought to
be enforced by the action and that the amount due the plaintiff It therefore allows that where the affidavit for attachment is
involves as much as the sum for which the order of attachment was fatally defective, the attachment must be held to have been
granted, while paragraph (5) alleges that the affidavit for attachment improperly or irregularly issued and must be discharged, and
fails to estate that the allegations contained in the unverified complaint such fatal defect cannot be cured by amendment. The writ of
to which it refers are true and that likewise the affidavit fails to estate attachment in this case should therefore have been
that affiant knows the facts. discharged.
Shortly after the hearing to discharge the attachment had begun,

plaintiff asked leave to file an amended affidavit in support of its
petition for a writ of attachment.
After oral and written arguments, the respondent judge on November

25, 1931, entered an order admitting the amended affidavit of
attachment.
Further proceedings were had in the trial court, and on March 4 and
April 11, 1932, it entered an order refusing on the showing so far
made to dissolve the attachment. On October 4, 1932, these
proceedings were instituted, based on the two propositions (1) that an
affidavit of attachment cannot be amended and (2) that if a cause of
action arises ex delicto, it is not within the terms of our attachment
statutes.
ISSUE: Supposing you have a defective affidavit, can you cure

it by amending it?
HELD: NO. In the original affidavit, affiant did not swear on

information and relief but expressly on knowledge. It is also clear from
the affidavit that the ground on which the attachment was sought to
be secured, is paragraph 4 of section 412 of the Code of Civil
Procedure. It is defective in (a) that there is no allegation, either in the
affidavit or the complaint, that there was no other sufficient security
for the claim sought to be enforced by the action and ( b) that the
amount due to the plaintiff above all legal set-offs or counterclaims is
as much as the sum for which the order is granted. The claim of
petitioners that the original affidavit is defective is virtually admitted by
respondents by their having filed a amended affidavit and by their
insistence upon their right to amend.
31
SPOUSES JULIETA SALGADO and JOSE SALGADO, Petitioners, The reason for the rule prohibiting attachment where indebtedness
v. HON. COURT OF APPEALS and PHILIPPINE COMMERCIAL & was already secured is to prevent the secured creditors from attaching
INDUSTRIAL BANK, Respondents. additional property and thus tying up more of the debtor‘s property
than was necessary to secure the indebtedness. 2 Thus, to sustain an
FACTS: On May 8, 1978, the Philippine Commercial and Industrial order of attachment, "it is incumbent upon plaintiff to establish either
Bank, hereinafter referred to as the Bank, filed an action against of these two facts, to wit: (a) that the obligation had not been secured
petitioners, docketed as Civil Case No. 29392 of the then Court of First originally, or (b) that, if secured at its beginning, the security later
Instance of Rizal, to recover on a promissory note in the amount of became valueless."
P1,510,905.96.
In the instant case, the allegation in the affidavit of the Bank‘s Credit
In its verified complaint, the Bank further prayed for the issuance of a Division Manager, Mrs. Helen Osias, to the effect that "there is no
writ of attachment. As grounds therefor it alleged that petitioners had sufficient security for the claim sought to be enforced by this action"
fraudulently misappropriated and/or converted to their own personal has been shown to be false. It is undisputed that the note sued upon
use and benefit the sugar proceeds given as security for the payment "is fully secured by a series of valid and existing real estate mortgages
of the indebtedness; that petitioners are guilty of fraud in contracting duly registered and annotated in the titles of the affected real property
their obligation and have concealed, removed or disposed of the in favor of the plaintiff Bank."
properties mortgaged or assigned to the plaintiff, or are concealing,
removing or disposing or about to do so, with intent to defraud their
creditor; that the obligation sought to be enforced is genuine and,
therefore, a sufficient cause of action exists; and that there is no
sufficient security for the claim sought to be enforced by the action.
Attached to the complaint was the affidavit of Mrs. Helen Osias, Senior
Branch Credit Division Manager of the Bank, wherein she stated,
among others, "that there is no sufficient security for the claim sought
to be enforced by this action.
On May 9, 1978, the trial court issued an order granting the Bank‘s
prayer for preliminary attachment upon a bond in the sum of
P1,510,905.96. Upon the filing of said bond, the Deputy Provincial
Sheriff levied upon several parcels of land of petitioners situated in the
province of Negros Occidental.
On September 15, 1978, petitioners Salgado moved to quash the writ

of attachment on the ground that respondent Bank made fraudulent
misrepresentation in securing the writ by deleting the words "R E M" or
"Real Estate Mortgage" from the xerox copy of the promissory note
attached to the complaint, thereby "making it appear that the note
was unsecured when in truth and in fact it was fully secured by a
series of valid and existing real estate mortgages duly registered and
annotated in the titles of the affected real properties in favor of the
plaintiff Bank." In the same motion, petitioners stressed the lack of
factual basis of the Bank‘s claim as to their alleged fraudulent
misappropriation or conversion of the sugar proceeds given as security
for their obligation.
ISSUE: Was there a valid affidavit?
HELD: NO. 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. 1
The grounds upon which attachment may issue are set forth in Section
1, Rule 57 of the Rules of Court. But quite apart from the grounds
stated therein, it is further provided in Section 3 of Rule 57 that "an
order of attachment shall be granted only when it is made to appear
by the affidavit of the applicant or some other person who personally
knows the facts, that . . . there is no other sufficient security for the
claim sought to be enforced by the action." library
32
PCIB VS ALEJADRO All the aforementioned weighed, and considering the short period of
time it took to have the writ lifted, the favorable decisions of the
FACTS: (See Facts Above) courts below, the absence of evidence as to the professional character
and the social standing of the attorney handling the case and the
ISSUE: How much damages were awarded by reason of the amount garnished, the award of attorney‘s fees should be fixed not
misrepresentation? at P1 Million, but only at P200,000.00.
HELD: It is clear from the foregoing that even on the allegation that The courts below correctly awarded moral damages on
respondent is a resident temporarily out of the Philippines, petitioner is account of petitioner‟s misrepresentation and bad faith;
still not entitled to a writ of attachment because the trial court could however, we find the award in the amount of P5 Million
acquire jurisdiction over the case by substituted service instead of excessive. Moral damages are to be fixed upon the discretion
attaching the property of the defendant. The misrepresentation of of the court taking into consideration the educational, social
petitioner that respondent does not reside in the Philippines and its and financial standing of the parties.41Moral damages are not
omission of his local addresses was thus a deliberate move to ensure intended to enrich a complainant at the expense of a
that the application for the writ will be granted. defendant.42 They are awarded only to enable the injured
party to obtain means, diversion or amusements that will
In light of the foregoing, the Court of Appeals properly sustained the serve to obviate the moral suffering he has undergone, by
finding of the trial court that petitioner is liable for damages for the reason of petitioner‟s culpable action. Moral damages must be
wrongful issuance of a writ of attachment against respondent. commensurate with the loss or injury suffered. Hence, the
award of moral damages is reduced to P500,000.00.
Anent the actual damages, the Court of Appeals is correct in not
awarding the same inasmuch as the respondent failed to establish the Considering petitioner‟s bad faith in securing the writ of
amount garnished by petitioner. It is a well settled rule that one who attachment, we sustain the award of exemplary damages by
has been injured by a wrongful attachment can recover damages for way of example or correction for public good. This should
the actual loss resulting therefrom. But for such losses to be deter parties in litigations from resorting to baseless and
recoverable, they must constitute actual damages duly established by preposterous allegations to obtain writs of attachments. While
competent proofs, which are, however, wanting in the present case.36 as a general rule, the liability on the attachment bond is
limited to actual (or in some cases, temperate or nominal)
Nevertheless, nominal damages may be awarded to a plaintiff whose damages, exemplary damages may be recovered where the
right has been violated or invaded by the defendant, for the purpose attachment was established to be maliciously sued
of vindicating or recognizing that right, and not for indemnifying the out.43 Nevertheless, the award of exemplary damages in this
plaintiff for any loss suffered by him. Its award is thus not for the case should be reduced from P5M to P500,000.00.
purpose of indemnification for a loss but for the recognition and
vindication of a right. Indeed, nominal damages are damages in name Finally, contrary to the claim of petitioner, the instant case for
only and not in fact.37 They are recoverable where some injury has damages by reason of the invalid issuance of the writ, survives the
been done but the pecuniary value of the damage is not shown by dismissal of the main case for sum of money. Suffice it to state that
evidence and are thus subject to the discretion of the court according the claim for damages arising from such wrongful attachment may
to the circumstances of the case.38 arise and be decided separately from the merits of the main action.44
In this case, the award of nominal damages is proper considering that

the right of respondent to use his money has been violated by its
garnishment. The amount of nominal damages must, however, be
reduced from P2 million to P50,000.00 considering the short period of
2 months during which the writ was in effect as well as the lack of
evidence as to the amount garnished.1âwphi1
Likewise, the award of attorney‘s fees is proper when a party is

compelled to incur expenses to lift a wrongfully issued writ of
attachment. The basis of the award thereof is also the amount of
money garnished, and the length of time respondents have been
deprived of the use of their money by reason of the wrongful
attachment.39 It may also be based upon (1) the amount and the
character of the services rendered; (2) the labor, time and trouble
involved; (3) the nature and importance of the litigation and business
in which the services were rendered; (4) the responsibility imposed;
(5) the amount of money and the value of the property affected by the
controversy or involved in the employment; (6) the skill and the
experience called for in the performance of the services; (7) the
professional character and the social standing of the attorney; (8) the
results secured, it being a recognized rule that an attorney may
properly charge a much larger fee when it is contingent than when it is
not.40
33
REPUBLIC VS. FLORES, ET AL

The attachment bond is contingent on and answerable for all costs
FACTS: Civil Case No. 0193 was a petition for forfeiture of unlawfully which may be adjudged to the adverse party and all damages which
acquired properties, with a verified urgent ex-parte application for the he may sustain by reason of the attachment should the court finally
issuance of a writ of preliminary attachment, filed by the Republic of rule that the applicant is not entitled to the writ of attachment. Thus, it
the Philippines against Maj. Gen. Carlos F. Garcia, his wife[3] and is a security for the payment of the costs and damages to which the
children[4] in the Sandiganbayan on October 27, 2004. In praying for adverse party may be entitled in case there is a subsequent finding
the issuance of a writ of preliminary attachment, the Republic that the applicant is not entitled to the writ. The Republic of the
maintained that, as a sovereign political entity, it was exempt from Philippines need not give this security as it is presumed to be always
filing the required attachment bond. solvent and able to meet its obligations.
On December 7, 2004, the Republic filed a motion for partial The Constitution mandates that only this Court sitting en banc may
reconsideration of the October 29, 2004 resolution claiming that it was modify or reverse a doctrine or principle of law laid down by the Court
exempt from filing an attachment bond and praying for the release in a decision rendered en banc or in division. Any court, the
thereof. Sandiganbayan included, which renders a decision in violation of this
constitutional precept exceeds its jurisdiction.
In a resolution dated January 14, 2005, the Sandiganbayan ruled that
there was nothing in the Rules of Court that exempted the Republic
from filing an attachment bond. It reexamined Tolentino v.
Carlos[6] which was invoked by the Republic to justify its claimed
exemption. That case was decided under the old Code of Civil
Procedure enacted more than a century ago.
ISSUE: Did the Sandiganbayan commit grave abuse of discretion

when it rejected the Republic‘s claim of exemption from the filing of an
attachment bond?
HELD: YES. Sections 3 and 4, Rule 57 of the Rules of Court provide:
Sec. 3. Affidavit and bond required. –

An order of attachment shall be granted only
when it appears 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 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 court before the
order issues.
Sec. 4. Condition of applicant‘s bond. –

The party applying for the order must
thereafter give a bond executed to the
adverse party in the amount fixed by the
court in its order granting the issuance of
the writ, 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. (emphasis supplied)
Under these provisions, before a writ of attachment may issue, a bond

must first be filed to answer for all costs which may be adjudged to
the adverse party and for the damages he may sustain by reason of
the attachment. However, this rule does not cover the State.
In Tolentino,[7]this Court declared that the State as represented by
the government is exempt from filing an attachment bond on the
theory that it is always solvent.
34
SECTION 4
ARELLANO VS. FLOJO
FACTS: Teresita P. Arellano, defendant in Civil Case No. 11-1041 then

pending before Branch 6 of the Regional Trial Court of the Second
Judicial Region and stationed in Aparri, Cagayan, filed a verified
complaint for neglect of duty, misconduct, bias, and partiality against
Felino Bangalan, then Acting Clerk of Court III, of the Aparri RTC (now
Presiding Judge, MTC, Branch 1, Aparri, Cagayan) for issuing the writ
of attachment in the said case despite the failure of the plaintiffs to
post the required attachment bond of P100,000.00 and for deliberately
delaying the issuance of service of summons to the defendant in that
although the case was filed on January 21, 1986, the defendant
(complainant herein) was served summons only on May 13, 1986 or
four (4) months thereafter, and that she was not even furnished a
copy of the Order authorizing the issuance of a writ of attachment, the
so-called attachment bond, as well as the writ of attachment itself.
Justice Barcelona finds Judge Bangalan (then Clerk of Court III) guilty
of negligence for (1) having issued the writ of attachment on January
21, 1986 in spite of the applicants' failure to post an acceptable bond
as required under Section 4, Rule 57 of the Rules of Court for what
appears in the record is only a promissory note in the form of an
affidavit executed by Victor Suguitan, Andres Langaman, and Mariano
Retreta.
ISSUE: Can the bond be substituted by an undertaking?
HELD: NO. Indeed, he issued the Writ of Attachment although the

plaintiffs have not yet posted the required attachment bond. It is
explicitly stated in his Comment that what was filed was merely an
undertaking. The fact that the "Undertaking" was subscribed by the
branch clerk of court does not necessarily follow that it carried the
imprimatur of the presiding judge thereof. As a lawyer, respondent
Bangalan, who is now a Judge should have known the glaring
distinctions between a plain undertaking and a real attachment bond.
The difference between the two is not that hard to discern. As ruled by
Judge Ernesto A. Talamayan in his order of April 23, 1993, no bond
can be confiscated to answer for the damages sustained by
defendants. He discovered that only a promissory note in the form of
an affidavit executed by the bondsmen denominated as an attachment
bond appears on the record. Had respondent Bangalan carefully
examined the undertaking filed before he issued the writ of
attachment, such a situation could have been obviated. Where a
statute authorizing attachment requires, as a condition to the issuance
of the writ, that a bond shall be given by plaintiff to indemnify
defendant for any loss or injury resulting from the attachment in case
it proves to be wrongful, a failure to give such bond is fatal, and an
attachment issued without the necessary bond is invalid.
35
CALDERON VS. IAC 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
FACTS: On November 2, 1976, petitioner Calderon purchased from wrongfully issued, the surety is liable for damages as a direct
GEORGE SCHULZE, GEORGE SCHULZE, JR., ANTONIO C. AMOR, result of said attachment.
MANUEL A. MOZO, and VICTOR M. NALUZ (the private
respondents) the following: the Luzon Brokerage Corporation (LBC for
brevity) and its five (5) affiliate companies, namely, Luzon Air Freight, ISSUE 2: Is the liability of the attachment bond waived when
Inc., Luzon Port Terminals Services, Inc., Luzon (GS) Warehousing the adverse party posts a counterbond?
Corporation, GS Industrial Management Corporation, and GS Luzon
Trucking Corporation. Twenty one (21) days thereafter or on HELD 2: NO. Equally untenable is the Surety's contention that by
November 23, 1976, the Bureau of Customs suspended the operations filing a counterbond, private respondents waived any defect or flaw in
of LBC for failure to pay the amount of P1,475,840.00 representing the issuance of the attachment writ, for they could have sought,
customs taxes and duties incurred prior to the execution of the sale. In without need of filing any counterbond, the discharge of the
order to lift the suspension Calderon paid the sum of P606,430.00 to attachment if the same was improperly or irregularly issued, as
the Bureau of Customs. provided in Section 13, Rule 57 of the Rules of Court.
On October 27, 1977, Calderon filed a complaint against private Whether the attachment was discharged by either of the two
respondents to recover said amount of P1,475,840.00, with damages (2) ways indicated in the law, i.e., by filing a counterbond or
by reason of breach of warranty. In the same complaint, the petitioner by showing that the order of attachment was improperly or
prayed for a preliminary attachment, alleging: that private respondents irregularly issued, the liability of the surety on the attachment
had deliberately and willfully concealed from his knowledge such bond subsists because the final reckoning is when "the Court
staggering liability of the LBC for the purpose of misleading him into shall finally adjudge that the attaching creditor was not
buying the six aforesaid companies; and that private respondent entitled" to the issuance of the attachment writ in the first
Schulze is about to depart from the Philippines in order to defraud his place.
creditors.
The attachment debtor cannot be deemed to have waived any
To support the petition for preliminary attachment, the petitioner defect in the issuance of the attachment writ by simply
posted a surety bond of P1,475,840.00. availing himself of one way of discharging the attachment
writ, instead of the other. Moreover, the filing of a
On November 17, 1977, private respondents filed a counterbond, counterbond is a speedier way of discharging the attachment
writ maliciously sought out by the attaching creditor instead
whereupon the trial court issued an order directing the sheriff to return
of the other way, which, in most instances like in the present
all real and personal properties already levied upon and to lift the case, would require presentation of evidence in a full-blown
notices of garnishment issued in connection with the said attachment trial on the merits and cannot easily be settled in a pending
incident of the case.
After trial, the trial court dismissed the complaint, holding Calderon
and his surety First integrated Bonding and Insurance Co., Inc., jointly ISSUE 3: Does the filing of the counterbond render the attachment
and severally liable to pay the damages prayed for by the private bond void?
respondents.
HELD 3: NO. While Section 12, Rule 57 of the Rules of Court provides
Specifically, petitioner surety contends that the dissolution of the that upon the filing of a counterbond, the attachment is discharged or
attachment extinguishes its obligation under the bond, for the basis of dissolved, nowhere is it provided that the attachment bond is rendered
its liability, which is wrongful attachment, no longer exists, the void and ineffective upon the filing of counterbond.
attachment bond having been rendered void and ineffective, by virtue
of Section 12, Rule 57 of the Rules of Court. ISSUE 4: Was there a valid issuance of the writ?
ISSUE 1: When does the liability of the surety arise? HELD 4: NO. The record shows that appellant Calderon failed to
produce any evidence in support of his sworn charge that appellee
HELD: The liability of the attachment bond is defined in Section 4, Schulze had deliberately and willfully concealed the liabilities of Luzon
Rule 57 of the Rules of Court, as follows: Brokerage Corporation. Neither did appellant Calderon prove his sworn
charges that appellee Schulze had maliciously and fraudulently
Sec. 4. Condition of applicant's bond. The party withdrawn and misappropriated the amount of Pl,475,840.00 and that
applying for the order must give a bond executed an the defendants had maliciously and fraudulently concealed and
to the adverse party in an amount to be fixed by withheld from him this alleged liability of Luzon Brokerage Corporation
the judge, not exceeding the applicant's claim, in breach of the contract-warranty that said corporation had no
conditioned that the latter will pay all the costs obligations or liabilities except those appearing in the books and
which may be adjudged to the adverse party and
records of the said corporation. Indeed, appellant Calderon never
all damages which he may sustain by reason of
the attachment, if the court shall finally adjudge appeared in the trial court to substantiate the charges in his verified
that the applicant was not entitled thereto. complaints and in his affidavit to support his petition for the issuance
of a writ of attachment. He distanced himself from the appellees and
It is clear from the above provision that the responsibility of avoided cross-examination regarding his sworn allegations.
the surety arises "if the court shall finally adjudge that the
plaintiff was not entitled thereto." In Rocco vs. Meads, 96
Phil. Reports 884, we held that the liability attaches if the
plaintiff is not entitled to the attachment because the
36
SECTION 5 Development Corporation as well as a stockholder and director of Econ

Holdings.
OñATE VS. ABROGAR (2ND DIVISION) February 21, 1994
Thus, an exception to the established rule on the enforcement of the
FACTS: On December 23, 1991, respondent Sun Life Assurance writ of attachment can be made where a previous attempt to serve the
Company of Canada (Sun Life, for brevity) filed a complaint for a sum summons and the writ of attachment failed due to factors beyond the
of money with a prayer for the immediate issuance of a writ of control of either the plaintiff or the process server, provided that such
attachment against petitioners, and Noel L. Diño, which was docketed service is effected within a reasonable period thereafter.
as Civil Case No. 91-3506 and raffled to Branch 150 of the RTC Makati,
presided over by respondent Judge. The following day, December 24,
Several reasons can be given for the exception. First, there is a
1991, respondent Judge issued an order granting the issuance of a possibility that a defendant, having been alerted of plaintiffs action by
writ of attachment, and the writ was actually issued on December 27,
the attempted service of summons and the writ of attachment, would
1991. put his properties beyond the reach of the plaintiff while the latter is
trying to serve the summons and the writ anew. By the time the
On January 3, 1992, upon Sun Life's ex-parte motion, the trial court plaintiff may have caused the service of summons and the writ, there
amended the writ of attachment to reflect the alleged amount of the might not be any property of the defendant left to attach.
indebtedness. That same day, Deputy Sheriff Arturo C. Flores,
accompanied by a representative of Sun Life, attempted to serve Second, the court eventually acquired jurisdiction over the petitioners
summons and a copy of the amended writ of attachment upon
six days later. To nullify the notices of garnishment issued prior thereto
petitioners at their known office address at 108 Aguirre St., Makati but would again open the possibility that petitioners would transfer the
was not able to do so since there was no responsible officer to receive
garnished monies while Sun Life applied for new notices of
the same. 1 Nonetheless, Sheriff Flores proceeded, over a period of garnishment.
several days, to serve notices of garnishment upon several commercial
banks and financial institutions, and levied on attachment a
Third, the ease by which a writ of attachment can be obtained is
condominium unit and a real property belonging to petitioner Oñate.
counter-balanced by the ease by which the same can be discharged:
the defendant can either make a cash deposit or post a counter-bond
Summons was eventually served upon petitioners on January 9, 1992, equivalent to the value of the property attached. 10 The petitioners
while defendant Diño was served with summons on January 16, 1992.
herein tried to have the writ of attachment discharged by posting a
counter-bond, the same was denied by respondent Judge on the
On January 21, 1992, petitioners filed an "Urgent Motion to ground that the amount of the counter-bond was less than that of Sun
Discharge/Dissolve Writ of Attachment." Life's bond.
Petitioners argue that the enforcement of the writ was invalid since it
undisputedly preceded the actual service of summons by six days at
most. Petitioners cite the decisions in Sievert vs. Court of Appeals, et
al. 6 and BAC Manufacturing and Sales Corp. vs. Court of Appeals, et
al., 7 wherein this Court held that enforcement of the writ of
attachment cannot bind the defendant in view of the failure of the trial
court to acquire jurisdiction over the defendant through either
summons or his voluntary appearance.
ISSUE: WON the writ was validly enforced
HELD: YES. True, this Court had held in a recent decision that the
enforcement of writ of attachment may not validly be effected until
and unless proceeded or contemporaneously accompanied by service
of summons. 8
But we must distinguish the case at bar from the Sievert and BAC
Manufacturing cases. In those two cases,summons was never served
upon the defendants. The plaintiffs therein did not even attempt to
cause service of summons upon the defendants, right up to the time
the cases went up to this Court. This is not true in the case at bar. The
records reveal that Sheriff Flores and Sun Life did attempt a
contemporaneous service of both summons and the writ of attachment
on January 3, 1992, but we stymied by the absence of a responsible
officer in petitioners' offices. Note is taken of the fact that petitioners
Oñate and Econ Holdings admitted in their answer 9that the offices of
both Brunner Development Corporation and Econ Holdings were
located at the same address and that petitioner Oñate is the President
of Econ Holdings while petitioner Diño is the President of Brunner
37
OÑATE VS ABROGAR (EN BANC) February 23, 1995 The Rules of Court do not require that issuance of the writ be kept a
secret until it can be enforced. Otherwise in no case may the service of
FACTS: Petitioners maintain that, in accordance with prior decisions of summons on the defendant precede the levy on attachment. To the
this Court, the attachment of their properties was void because the contrary, Rule 57, § 13 allows the defendant to move to discharge the
trial court had not at that time acquired jurisdiction over them and that attachment even before any attachment is actually levied upon, thus
the subsequent service of summons on them did not cure the invalidity negating any inference that before its enforcement, the issuance of the
of the levy. writ must be kept secret.
On the other hand private respondent Sun Life stresses the fact that It is indeed true that proceedings for the issuance of a writ of
the trial court eventually acquired jurisdiction over petitioners and attachment are generally ex parte. In Mindanao Savings and Loans
contends that this cured the invalidity of the attachment of petitioners' Ass'n v. Court of Appeals 16 it was held that no hearing is required for
properties. the issuance of a writ of attachment because this "would defeat the
objective of the remedy [because] the time which such hearing would
ISSUE: WON the enforcement of the writ without prior or take could be enough to enable the defendant to abscond or dispose
contemporaneous service of summons can be cured by the subsequent of his property before a writ of attachment issues." It is not, however,
acquisition of jurisdiction over the defendant. notice to defendant that is sought to be avoided but the "time which
such hearing would take" because of the possibility that defendant
HELD: NO. However, we find petitioners' contention respecting the may delay the hearing to be able to dispose of his properties. On the
validity of the attachment of their properties to be well taken. We hold contrary there may in fact be a need for a hearing before the writ is
that the attachment of petitioners' properties prior to the acquisition of issued as where the issue of fraudulent disposal of property is
jurisdiction by the respondent court is void and that the subsequent raised. 17 It is not true that there should be no hearing lest a
service of summons on petitioners did not cure the invalidity of such defendant learns of the application for attachment and he remove's his
attachment. The records show that before the summons and the properties before the writ can be enforced.
complaint were served on petitioners Oñate and Econ Holdings
Corporation (Econ) on January 9, 1992, Deputy Sheriff Arturo C. Flores On the other hand, to authorize the attachment of property even
had already served on January 3, 1992 notices of garnishment on the before jurisdiction over the person of the defendant is acquired
PNB Head office 2 and on all its Metro Manila branches and an A.B through the service of summons or his voluntary appearance could
capital. lead to abuse. It is entirely possible that the defendant may not know
of the filing of a case against him and consequently may not be able to
Second. Private respondent invokes the ruling in Davao Light & Power take steps to protect his interests.
Co. v. Court of Appeals 9 in support of its contention that the
subsequent acquisition of jurisdiction by the court cured the defect in
Nor may sheriff's failure to abide by the law be excused on the pretext
the proceedings for attachment. It cites the following portion of the
that after all the court later acquired jurisdiction over petitioners. More
decision in Davao Light and Power: X X X
important than the need for insuring success in the enforcement of the
writ is the need for affirming a principle by insisting on that "most
It is clear from the above excerpt, however, that while the petition for
fundamental of all requisites — the jurisdiction of the court issuing
a writ of preliminary attachment may be granted and the writ
attachment over the person of the defendant." 18It may be that the
itself issued before the defendant is summoned, the writ of attachment
same result would follow from requiring that a new writ be served all
cannot be implemented until jurisdiction over the person of the
over again. The symbolic significance of such an act, however, is that
defendant is obtained. As this Court explained, "levy on property
it would affirm our commitment to the rule of law.
pursuant to the writ thus issued may not be validly effected unless
preceded, or contemporaneously accompanied, by service on the
NOTE: The service of summons after the enforcement of the
defendant of summons, a copy of the complaint (and of the
levy on attachment does not cure the irregularities that
appointment of guardian ad litem, if any), the application for
attended such enforcement. The writ of attachment should be
attachment (if not incorporated in but submitted separately from the
re-served after the services of the summons.
complaint), the order of attachment, and the plaintiff's attachment
bond."
Indeed, as this Court through its First Division has ruled on facts
similar to those in these cases, the attachment of properties before the
service of summons on the defendant is invalid, even though the court
later acquires jurisdiction over the defendant. 14 At the very least,
then, the writ of attachment must be served simultaneously with the
service of summons before the writ may be enforced. As the properties
of the petitioners were attached by the sheriff before he had served
the summons on them, the levies made must be considered void.
Third. Nor can the attachment of petitioners' properties before the

service of summons on them was made be justified an the ground that
unless the writ was then enforced, petitioners would be alerted and
might dispose of their properties before summons could be served on
them.
38
HB ZACHARY VS. CA May 10, 1994 pointed out and, in the alternative, to dismiss the case or suspend the
proceedings therein for failure of the plaintiff to submit the controversy
FACTS: On 20 March 1990, VBC filed a Complaint 11 with the in question to arbitration as provided for in its contract with Zachry;
Regional Trial Court (RTC) of Makati against Zachry for the collection and (b) to dissolve the writ of attachment of 26 March 1990 "for
of the payments due it with a prayer for a writ of preliminary having been issued without jurisdiction, having been issued prior to
attachment over Zachry's bank account in Subic Base and over the the service of summons."
remaining thirty-one undelivered housing units which were to be
turned over to the US Navy by Zachry on 30 March 1990. Paragraph 2 ISSUE: Was there a valid enforcement of the writ?
of the Complaint alleges that defendant Zachry "is a foreign
corporation with address at 527 Longwood Street, San Antonio, Texas, HELD: NO. The validity then of the order granting the application for
U.S.A. and has some of its officers working at U.S. Naval Base, Subic a writ of preliminary attachment on 21 March 1990 and of the issuance
Bay, Zambales where it may be served with summons." of the writ of preliminary attachment on 26 March 1990 is beyond
dispute. However, the enforcement of the preliminary
On 21 March 1990, the trial court issued an order granting the attachment on 27 March 1990, although simultaneous with
application for the issuance of the writ of preliminary attachment and the service of the summons and a copy of the complaint, did
fixing the attachment bond at P24,266,000.00. 12 VBC put up the not bind Zachry because the service of the summons was not
required bond and on 26 March 1990, the trial court issued the writ of validly made. When a foreign corporation has designated a
attachment, 13 which was served, together with the summons, a copy person to receive service of summons pursuant to the
of the complaint with annexes, the bond, and a copy of the order of Corporation Code, that designation is exclusive and service of
attachment, on 27 March 1990 in the manner described in the Sheriff's summons on any other person is inefficacious. 49 The valid
Partial Return 14 of 29 March 1990: service of summons and a copy of the amended complaint was
only made upon it on 24 April 1990, and it was only then that
upon defendant H.B. Zachry Company the trial court acquired jurisdiction over Zachry's person.
(International) at its field office in U.S. Naval Base, Accordingly, the levy on attachment made by the sheriff on 27
Subic Bay, Zambales thru Ruby Apostol who April 1990 was invalid. However, the writ of preliminary
acknowledged receipt thereof. Mr. James M. Cupit, attachment may be validly served anew.
defendant's authorized officer was in their Manila
office at the time of service.
The return further states:
That on March 28, 1990, the undersigned sheriff

went to the office of defendant H. B. Zachry
Company (International) at c/o A.M. Oreta & Co.
at 5th Floor, Ermita Building, Arquiza corner
Alhambra streets, Ermita, Manila to serve the
Court's processes but was informed by Atty. Felix
Lobiro of A.M. Oreta & Co., that defendant H.B.
Zachry Company has its own office at Room 600,
6th Floor of the same building (Ermita Building).
However, said defendant's office was closed and
defendant company (ZACHRY) only holds office
during Mondays and Tuesdays of the week as per
information gathered from the adjacent office.
On 6 April 1990, Zachry filed a motion to dismiss the complaint 17 on

the ground of lack of jurisdiction over its person because the summons
was not validly served on it. It alleges that it is a foreign corporation
duly licensed on 13 November 1989 by the Securities and Exchange
Commission to do business in the Philippines 18 and, pursuant to
Section 128 of the Corporation Code of the Philippines, had appointed
Atty. Lucas Nunag 19 as its resident agent on whom any summons and
legal processes against it may be served. Atty. Nunag's address is at
the 10th Floor, Shell House, 156 Valero St., Makati, Metro Manila.
Summons and a copy of the Amended Complaint were served on 24

April 1990 on Zachry through Atty. Nunag as shown in the sheriff's
return dated 24 April 1990.
On 24 May 1990, Zachry filed an Omnibus Motion 22 (a) to dismiss the

complaint for lack of jurisdiction over its person since the subsequent
service of summons did not cure the jurisdictional defect it earlier
39
SECTION 6
HELD: The Rules do not provide any lifetime for a Writ of Attachment
ROQUE VS. CA 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
FACTS: On January 31, 1973, respondent Associated Banking that period the fact that actual seizure was effected only thereafter
Corporation (the Bank, for short) instituted an action, Civil Case No. cannot affect the validity of that levy.
89692, in the Court of First Instance of Manila, Branch XXVIII,
respondent Judge, presiding, against private respondent Fil-Eastern
Wood Industries, Inc. (Fil-Eastern, for brevity), a domestic corporation,
for recovery of a sum of money.
Upon ex-parte application by the Bank for a Writ of Preliminary

Attachment, respondent Judge, after the filing and approval of the
required bond of P220,000.00, issued, on February 4, 1974, an Order
of Attachment commanding the Sheriff to attach the estate, real and
personal, of Fil-Eastern.
On February 7, 1974, the Sheriff's "Notice of Levy Pursuant to the Writ

of Attachment" was registered in the Office of the Commander of the
First Coast Guard, District of Manila, 2 pursuant to Sec. 805 of the
Tariff and Customs Code, as amended by Presidential Decree No. 34,
requiring the registration of documents affecting titles of vessels with
that entity. The said notice read, "levy is hereby made upon all the
rights, titles, interest, shares and participation which the defendant Fil-
Eastern Wood Industries, Inc. has or might have over a sea vessel or
barge named Fil-Eastern V.
It appears that 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.
Pursuant to the provisions of Article 2112 3in relation to Article

1731 4 of the Civil Code, the Cotabato Visayan Development
Corporation proceeded before Notary Public Clemente R. Gonzales of
Manila to the sale of said barge. In the public auction sale conducted
by said Notary Public on April 24, 1974, petitioner Eligio Roque
acquired the barge as the highest bidder, and was accordingly issued a
Certificate of Sale by the Notary Public.
On August 29, 1974, the Bank filed a "Motion for the Issuance of
Another Writ of Attachment" stating that at the time of the issuance of
the Writ on February 4, 1974, the barge in question could not be
located within the jurisdiction of the trial Court. having been anchored
somewhere in the Visayas, and that actual levy on the barge could not
be made as "the original Order of attachment is allegedly in the
possession of the Branch Deputy Sheriff appointed by the Honorable
Court, who has not reported to the office since August 26, 1974, and,
therefore, could not implement the writ." 10 On the same date,
August 29, 1974, the trial Court (Judge Rafael S. Sison, presiding)
denied the issuance of another Writ (apparently ' v because it was
deemed unnecessary), but instead ordered the Deputy Sheriff of
Branch XXVIII to coordinate with the City Sheriff of Manila in the
implementation of the Writ previously issued. 11 On August 30, 1974,
Deputy Sheriff Garvida actually seized and levied upon the vessel.
Petitioners argue that the levy was illegal because the Writ was
implemented more than sixty days after its issuance so that they need
not have complied with Section 14, Rule 57.
ISSUE: WON a writ of attachment has a lifetime
40
BILAG-RIVERA VS. FLORA HELD: NO. As deputy sheriff, respondent could not be unaware of
Rule 57, section 6 of the rules of Court which provides that:
FACTS: On 5 August 1990, Elsie V. Tacay bought an Isuzu Jitney on
installment basis from Panda Automotive Corporation (PANDA), Immediately after executing the order of the officer must
Dagupan City, represented by Charlie Q. Carlos, for the amount of make a return thereon to the clerk or judge of the court
P256,000.00. On 23 March 1992, Tacay registered the vehicle in her from which the order issued, with a full statement of his
name with the Land Transportation Office (LTO) in Lingayen. On 10 proceeding under the order and a complete inventory of the
May 1992, Tacay tendered a check for P100,000.00 to cover part of property attached, together with any counter-bond given by
the P120,000.00 balance still due PANDA. Upon presentment by the party against whom attachment is issued, and serve a
PANDA with the drawee bank, the check for P100,000.00 was copy of any such counter-bond on the applicant or his
dishonored as the same was allegedly forged. When confronted by lawyer.
PANDA about the check's dishonor, Tacay promised to pay the balance
of P120,000.00 on or before 23 June 1992. Section (7) (c) of the same Rule also mandates that:
On 8 July 1992, however, Tacay sold the Isuzu jitney to complainant Properties shall be attached by the officer executing the
Florentina Bilag-Rivera for the amount of P250,000.00, covered by an order in the following manner:
Absolute Deed of Sale. 2 Hence, possession of the vehicle and its LTO
registration papers were turned over to complainant.
xxx xxx xxx
In September 1992, with Tacay still in default on her outstanding

obligation to Panda Corporation, the latter, thru its manager Charlie (c) Personal property capable of manual delivery, by taking
and safely keeping it in his capacity, after issuing the
Carlos, filed a complaint for specific performance, replevin, and
corresponding receipt therefor.
damages with the RTC of Dagupan City.
Chapter VIII (e) (4) of the Manual for Clerks of Court similarly states
Complainant requested the City Sheriff of the RTC, Baguio City to hold that:
the vehicle for a few days as she would prepare the amount of
P20,000.00 as counterbond to discharge the attachment. Since there
was no bonded warehouse in the City of Baguio, the office of the City All sheriffs and deputy sheriffs shall submit a report to the
Sheriff requested complainant to pay P1,000.00 to justify their holding judge concerned on the action taken on all writs and
on to said vehicle until she could post the counterbond. Complainant processes assigned to them within (10) days from receipt of
paid the amount of P1,000.00 and was duly receipted for said said process or writ. Said report shall form part of the
payment. 4 records.
On 23 December 1992, however, the RTC of Dagupan City issued an Respondent could not evade the positive duty of serving the attaching
order in Civil Case No. D-10285 for the issuance of an alias writ of creditor's affidavit, bond, and the order of attachment on
attachment as prayed for by Panda Motors. The writ was again complainant's representative (Camiwet) by now alleging that it was the
addressed to the office of the City Sheriff, RTC of Baguio City with an fault of complainant and her representative in refusing to sign the
order to attach the same motor vehicle in possession of complainant. receipt that he allegedly issued on 15 March 1993.
Respondent received the alias writ on 23 February 1993.
The records of the investigation reveal otherwise-that complainant
The alias writ was not served immediately by respondent because the could not have signed the acknowledgment receipt because she was
whereabouts of the said vehicle could not be ascertained. It was only not present when the vehicle was attached. In the same vein, her
on 15 March 1993 when Charlie Carlos, the manager of Panda Motors, cousin Camiwet refused to sign the receipt because, as he testified,
came personally to the office of respondent and informed him; that the the same was misleading as he was being forced to sign a receipt
vehicle to be attached was in the possession of Carlos Camiwet, a which indicated that complainant and Elsie Tacay surrendered the
cousin of complainant.
vehicle to respondent by virtue of the said alias writ of attachment.
Forthwith, respondent together with Charlie Carlos, proceeded to the

residence of Carlos Camiwet and served the alias writ of attachment
on the latter with an attachment bond of P120,000.00. Complainant
avers that this time, respondent sheriff did not issue any receipt to
cover for his re-possession of the said vehicle. Worse, complainant
maintains that at the time of the levy, various tools worth P50,000.00,
which were not integral to the motor vehicle, were also taken by
respondent sheriff.
The following day, complainant accompanied by her lawyer, went to

the office of respondent to inquire about the motor vehicle and to
request for a receipt. According to complainant, respondent told her
not to worry and that the issuance of a receipt was no longer
necessary because the vehicle and its tools were being kept in a safe
place.
ISSUE: WON the sheriff regularly attached the property
41
SECTION 7
SIARI VALLEY ESTATES, INC VS. LUCASAN ET AL. August 31,

1960
FACTS: It appears that parcel 1 is a registered land covered by

Certificate of Title No. OCT-2492, Patent No. 50967, duly registered in
the Office of the Register of Deeds of Zamboanga del Norte in the
name of Filemon Lucasan. On this land stands a big house of mixed
materials which is asserted in the amount of P23,270.00 as evidenced
by Tax Declaration No. 7653. It also 37 3 appears that Filemon
Lucasan and his wife constituted this house and the lot on which
stands into a family home, the pertinent document having been
registered in the office of the register of deeds on June 21, 1955. In
opposing the petition of the corporation for a writ of possession insofar
as this property is concerned, Lucasan contended that said lot and
house having been constituted as a family home are beyond the reach
of judicial execution. He contended that the levy made by the sheriff
on said property is legally ineffective because it was not effected in
accordance with what is prescribed in Section 14, Rule 39, in relation
to Section 7, Rule 59, of the Rules of Court.
The evidence shows that when this property was levied on execution
by the sheriff to satisfy the judgment rendered against Filemon
Lucasan in favor of petitioner corporation the notice of levy merely
described the property as unregistered land and the same was
registered under Act 3344 in the office of the register of deeds. It also
appears that in the notice of sale the property was merely described
according to the boundaries and area appearing in the tax declaration
and not according to what appears in the certificate of title.
ISSUE: WON there was proper attachment of real property
HELD: NO. the rule provides that real property shall "be levied on in
like manner and with like effect as under an order of attachment"
(Section 14, Rule 39), and the provision regarding attachment of real
property postulates that the attachment shall be made "by filing with
the register of deeds a copy of the order, together with the description
of the property attached, and a notice that it is attached, and by
leaving a copy of said order, description, and notice with the occupant
of the property, if any there be," and that "Where the property has
been brought under the operation of the Land Registration Act, the
notice 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" (Section 7 [a], Rule 59).
These provisions should be strictly construed if their purpose has to be

accomplished. The requirement that the notice of levy should 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 is
made in order that the debtor as well as a third person may be
properly informed of the particular land or property that is under the
custody of the court. This can only be accomplished by making a
reference to the certificate of title covering the property. The situation
differs if the land is unregistered in which case it is enough that the
notice be registered under Act 3344. This conclusion finds support in
the following authorities:
Since the notice of levy made by the sheriff as regards parcel

number 1 which is a registered land contains no reference to
the number of its certificate of title and the volume and page
in the registry book where the title is registered, it follows
that said notice is legally ineffective and as such did not have
the effect of binding the property for purposes of execution.
Consequently, the sale carried out by virtue of said levy is also
invalid and of no legal effect.
42
RAVENERA VS. IMPERIAL property is brought to the custody of the court, as is the purpose of
the aforecited provision of the Rules of Court. Incidentally, no third
FACTS: October 17, 1961 the Roman Catholic Archbishop of Caceres person appears, to be interested in the matter now before this Court.
filed an action for Rescission of Contract and Recovery of Possession From the fact that respondent Imperial was able to exercise his right
against the herein petitioner before the respondent court. Said case of redemption with reference to three registered parcels of land, it can
was decided by the respondent court in favor of the plaintiff on be easily deduced that insofar as respondent Imperial is concerned,
January 28, 1966. 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
The Clerk of Court of the respondent Court, issued an alias writ of
served or attained.
execution on August 24, 1969. On September 24, 1969 the Sheriff
issued a notice of Levy by which certain properties of the petitioner
were attached or levied upon. Respondent Imperial also brands the levy as irregular for failure of the
occupants of the attached or levied properties to be left with copy of
Private respondent alleges that copies of the Notice of Levy and the the order, notice of levy and description of the properties. The finding
Notice of Sale were sent by Registered Mail which according to the of facts of the respondent Court of Appeals which was quoted in full
certificate of the Postmaster was received on October 15, 1969. above, fails to disclose the existence of occupants of the properties
Receipt of the Notice of Levy is denied by petitioner. levied upon other than the owner, respondent Imperial. It was
incumbent on said respondent to prove by evidence duly submitted to
the Court a fact that would tend to support his claim that the levy is
On November 7, 1969 the public auction sale was held, and the
void or otherwise illegal. The levy being an official act of a government
respondent Erlinda Ravanera being the highest bidder a Provisional
functionary its regularity is presumed.
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 It appears in this case that the notice of levy was registered with the
at the end of the redemption period or on December 8, 1970 the Register of Deeds on September 29, 1969. From a certification of the
Sheriff executed a Definite Deed of Sale of said unredeemed properties Postmaster at Naga City, it also appears that registered letter No.
in the name of respondent Erlinda Ravanera.
13681 containing the notice of levy and the notice of auction sale
The Court of Appeals annulled the levy and all the proceedings addressed to respondent Felipe Imperial was delivered on October 15,
subsequent thereto on two grounds, to wit: 1) The occupants or 1969 to Pelaguia Comba, member of the household of the addressee.
possessors of the properties levied upon were not furnished with a Respondent Imperial was, therefore, notified by registered mail of the
notice of levy and as Section 7 of Rule 57, paragraph (a) makes this a levy and the auction sale long before November 3, 1969, the date of
requirement for the validity of the levy, non-compliance therewith has the auction sale. What is required is that the judgment debtor must be
made the levy ineffective, and 2) The Notice of levy made by the notified of the auction sale before the actual date of sale which was
sheriff did not contain the volume and the page in the
done in the case at bar.
Registry where the certificates registered.
ISSUE: whether or not there was a valid levy upon the properties of
respondent Felipe I. Imperial.
HELD: 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. This is more so where as
in this case, there appears in the notice of levy the following
certification:
It is hereby certified that this instrument has been

duly registered proper memorandum hereof made
on transfer Certificate of Title No. 257 & 258 and
on its owner's duplicate Reg. Book No. 3; File No.
1-248.
Naga City, Sept. 29, 1969.
Reference to the number of the certificate of title of every

registered land in the notice of levy, together with the
technical description thereof, would certainly suffice to inform
the debtor, as well as third persons what particular land or
43
OBAÑA VS. CA beginning. The action in personam which required personal service
was never converted into an action in rem where service by publication
FACTS: Records show that defendant-appellant (Rafael G. Suntay) would have been valid.
was the former counsel of Liberty H. Dizon and her minor children. On
August 24, 1972, appellant filed in the same proceedings a 'Motion to
There are certain facts overlooked by the Court of Appeals which call
Order the Guardian To Pay The Attorney's Fees,' with prayer that the
for the setting aside of its decision.
guardian be ordered to pay immediately the amount of P5,000.00 out
of the ward's guardianship estate.
Civil Case No. 4238-M was an action for sum of money filed by Atty.
It would appear that the above order was not complied with by Liberty Suntay against liberty Dizon and her minor children in an effort to
H. Dizon because on November 9, 1972, defendant-appellant Atty. collect attorney's fees in the guardianship case he handled for them.
Suntay, filed with the defunct CFI of Bulacan an action for a sum of The guardianship court authorized the payment of P5,000.00.
money (Civil Case No. 4238-M) against said Liberty M. Dizon. In his According to the Court of Appeals, the collection case was between
complaint, defendant-appellant averred among others: that his Suntay on one hand and Dizon and her children on the other. It ruled
attorney's fees in Sp. Proceedings Nos. C-412. and QC-00565 was (sic) that petitioner Obaña the buyer of the lot, is not a party in interest and
not paid by his former clients, despite repeated demands. In had neither personality nor cause of action to ask for the annulment of
connection with said complaint, appellant moved for the issuance of an the judgment in that case.
order of attachment upon a certain parcel of land covered by TCT No.
173792 together with the improvements belonging to Liberty H. Dizon This may be so, if the facts end there. However, the judgment in Civil
and her wards. Case No. 4238-M, while against Dizon and her children was executed
against property belonging to petitioner Obaña.
On December 1, 1972, by virtue of the Writ of Attachment issued in
Civil Case No. 4238-M, a levy was made on said property, which levy
was annotated at the back of TCT No. 173792 of the Register of Deeds The house and lot in Quezon City which Dizon sold to Obaña for
of Quezon City. P150,000.00 was executed upon by the Sheriff to satisfy the
P10,000.00 attorney's fees in the Dizon guardianship case and another
Due to the failure of the sheriff to serve the summonses issued in Civil P5,000.00 awarded to Suntay for his fees in prosecuting his own
Case 4238 for the reason that Mrs. Dizon and her wards no longer collection case. The house and lot were sold for P17,402.90 to
resided at the last known address at 34-H Road, Cypress Village, respondent Suntay.
Quezon City, and that their present address cannot be ascertained
appellant as plaintiff in said civil case filed a Motion for Service of The sheriffs sale was affected without any personal notice to Liberty H.
Summons by Publication which was granted by the court in its Order Dizon on the ground that she had moved out of her old address and
dated February 12, 1973. Accordingly, summons were served upon her "present address" was unknown. No notice was served on Obaña
Mrs. Dizon and her wards through publication. because she was not a party in the collection case. All notices and
summonses in the collection case filed on November 9, 1972 including
the copy of the complaint, the original summons, the alias summons,
Meanwhile, pursuant to a Deed of Absolute Sale dated May 16, 1973 the notice of levy on attachment of the disputed property, the notice
executed by and between Liberty H. Dizon, et al., and appellee of levy on execution and the notice of sheriffs sale were served
Leonora Obaña involving the attached property the register of deeds of through mail to defendant Dizon at 34-H Caingin Road, Cypress
Quezon City cancelled TCT No. 173792 in the name of Liberty H. Dizon Village, Quezon City. As earlier stated, because the Sheriff could not
and her wards, and, in lieu thereof, executed in favor of Leonora serve the complaint and the summons on Dizon who had moved out of
Obaña a new TCT No. 191069 necessarily transferring in the process the above address, service by publication upon Dizon was authorized
the encumbrance consisting of notice of levy in favor of appellant. by the court in the collection case.
A decision was rendered on September 28, 1973 awarding to appellant The Court of Appeals reversed the trial court principally on the ground
Atty. Suntay the amount of P10,000.00 representing his claim for that Leonora Obaña was neither a defendant nor a party-in-interest in
attorney's fees relative to the prosecution of said case. Pursuant to the collection case. It ignored the fact that property already sold to her
said decision, a writ of execution was issued per order of the court, was attached and then bedded out to Atty. Suntay without any notice
and then followed by a Notice of Levy on Execution dated August 7, to her. And because the notice of lis pendens in the collection case
1974, issued by the sheriff of Quezon City. Thereafter, a certificate of was secured ex-parte without the defendant Dizon and petitioner
sale over the subject property (now covered by TCT 191059 in the Obaña who were never brought to court, having any inkling about it,
name of Leonora Obaña) was issued in favor of the appellant, being the notice was not annotated on the owner's duplicate copy of
the highest bidder. Transfer Certificate of Title No. 173792.
Appellee claimed that the proceedings before the sheriff were
defective in that the sheriff failed to comply with the jurisdictional Respondent Suntay cannot claim ignorance of the sale to petitioner
requirements on the manner of service of notice in the New Rules of Obaña as a ground for not bringing her into the picture. As stressed by
Court thus rendering the proceedings void ab initio. the petitioner, Liberty Dizon filed her motion for the approval of the
sale of the disputed house and lot in the guardianship case SP-C-
00565 through her counsel, herein private respondent Suntay (Exh. Q,
Defendant-appellant countered that insofar as the plaintiff is original records). He could not have been unaware that the house and
concerned, when she bought the property in question and title was lot he was attaching had been sold to Obaña because the sale of the
transferred to her on July 2, 1973, she is charged with knowledge of Dalmar property was authorized by the guardianship court in the case
the pendency of Civil Case No. 4238-M thru the annotation at the back where he was counsel for the guardian.
of TCT No. 173792 of the Registry of Deeds of Quezon City
ISSUE: WON there was a valid levy of property
HELD: NO. It should be noted that Section 7 of Rule 57 requires that

in attaching real property a copy of the order, description, and
notice must be served on the occupant, in this case the occupant at 48
Damortiz Street, Damar Village, Quezon City. The trial court in the
annulment case ruled that the attachment was void from the
44
The preference created by the levy on attachment is not diminished

even by the subsequent registration of the prior sale. This is so
VALDEVIESO VS. DAMALERIO because an attachment is a proceeding in rem.19 It is against the
particular property, enforceable against the whole world. The attaching
FACTS: On 05 December 1995, Bernardo Valdevieso (petitioner) creditor acquires a specific lien on the attached property which nothing
bought from spouses Lorenzo and Elenita Uy a parcel of land can subsequently destroy except the very dissolution of the
consisting of 10,000 square meters, more or less, located at Bo.
attachment or levy itself.20 Such a proceeding, in effect, means that
Tambler, General Santos City, and covered by Transfer Certificate of
Title (TCT) No. T-30586.2 the property attached is an indebted thing and a virtual condemnation
of it to pay the owner‘s debt.21 The lien continues until the debt is
paid, or sale is had under execution issued on the judgment, or until
The deed of sale was not registered, nor was the title of the land
transferred to petitioner. the judgment is satisfied, or the attachment discharged or vacated in
some manner provided by law.
It came to pass that on 19 April 1996, spouses Candelario and Aurea
Damalerio (respondents) filed with the Regional Trial Court (RTC) of
General Santos City, a complaint for a sum of money against spouses
Lorenzo and Elenita Uy docketed as Civil Case No. 5748 with
application for the issuance of a Writ of Preliminary Attachment.
On 23 April 1996, the trial court issued a Writ of Preliminary

Attachment by virtue of which the property, then still in the name of
Lorenzo Uy but which had already been sold to petitioner, was levied.
The levy was duly recorded in the Register of Deeds of General Santos
City and annotated upon TCT No. T-30586.
On 06 June 1996, TCT No. T-30586 in the name of Lorenzo Uy was

cancelled and, in lieu thereof, TCT No. T-74439 was issued in the
name of petitioner.7 This new TCT carried with it the attachment in
favor of respondents.
On 14 August 1996, petitioner filed a third-party claim in Civil Case No.

5748 to discharge or annul the attachment levied on the property
covered by TCT No. T-74439 on the ground that the said property
belongs to him and no longer to Lorenzo and Elenita Uy.
ISSUE: whether or not a registered writ of attachment on the land is

a superior lien over that of an earlier unregistered deed of sale.
HELD: YES. The act of registration shall be the operative act to

convey or affect the land insofar as third persons are concerned, and
in all cases under this Decree, the registration shall be made in the
office of the Register of Deeds for the province or city where the land
lies.
It is to be noted that though the subject land was deeded to petitioner

as early as 05 December 1995, it was not until 06 June 1996 that the
conveyance was registered, and, during that interregnum, the land
was subjected to a levy on attachment. It should also be observed
that, at the time of the attachment of the property on 23 April 1996,
the spouses Uy were still the registered owners of said property. Under
the cited law, the execution of the deed of sale in favor of petitioner
was not enough as a succeeding step had to be taken, which was the
registration of the sale from the spouses Uy to him. Insofar as third
persons are concerned, what validly transfers or conveys a person‘s
interest in real property is the registration of the deed. Thus, when
petitioner bought the property on 05 December 1995, it was, at that
point, no more than a private transaction between him and the
spouses Uy. It needed to be registered before it could bind third
parties, including respondents. When the registration finally took place
on 06 June 1996, it was already too late because, by then, the levy in
favor of respondents, pursuant to the preliminary attachment ordered
by the General Santos City RTC, had already been annotated on the
title.
The settled rule is that levy on attachment, duly registered, takes

preference over a prior unregistered sale.17This result is a necessary
consequence of the fact that the property involved was duly covered
by the Torrens system which works under the fundamental principle
that registration is the operative act which gives validity to the transfer
or creates a lien upon the land.18
45
LUZ DU VS STRONGHOLD CO, INC stipulation of facts shows that Stronghold had already registered its
levy on attachment before petitioner annotated her notice of lis
pendens. As in Capistrano, she invokes the alleged superior right of a
FACTS: Aurora Olarte de Leon was the registered owner of Lot No.
prior unregistered buyer to overcome respondent‘s lien.
10-A (LRC Psd 336366) per Transfer Certificate of Title No. 582/T-
3. Sometime in January 1989, De Leon sold the property to Luz Du If either the third-party claim or the subsequent registration of the
under a ‗Conditional Deed of Sale‘ wherein said vendee paid a down
prior sale was insufficient to defeat the previously registered
payment of P75,000.00 leaving a balance of P95,000.00.
attachment lien, as ruled by the Court in Capistrano, it follows that a
notice of lis pendens is likewise insufficient for the same
―Then again, on April 28, 1989, Aurora de Leon sold [the] same
purpose. Such notice does not establish a lien or an encumbrance on
property to spouses Enrique and Rosita Caliwag without prior notice to
Luz Du. As a result, Transfer Certificate of Title No. 582/T-3 was the property affected.[18] As the name suggests, a notice of lis
cancelled and Transfer Certificate of Title No. 2200 was issued in favor pendens with respect to a disputed property is intended merely to
of the Caliwag spouses. inform third persons that any of their transactions in connection
therewith -- if entered into subsequent to the notation -- would be
―Meanwhile, Stronghold Insurance Corp., Inc. x x x commenced Civil subject to the result of the suit.
Case No. 90-1848 against spouses Rosita and Enrique Caliwag et al.,
for allegedly defrauding Stronghold and misappropriating the
company‘s fund by falsifying and simulating purchases of documentary
stamps. The action was accompanied by a prayer for a writ of
preliminary attachment duly annotated at the back of Transfer
Certificate of Title No. 2200 on August 7, 1990.
―On her part, on December 21, 1990, Luz Du initiated Civil Case No.
60319 against Aurora de Leon and the spouses Caliwag for the
annulment of the sale by De Leon in favor of the Caliwags, anchored
on the earlier mentioned Deed of Conditional Sale.
―On January 3, 1991, Luz Du caused the annotation of a Notice Of Lis

Pendens at the back of Transfer Certificate of Title No. 2200.
ISSUE: Whether a Notice of Levy on Attachment on the property is a

superior lien over that of the unregistered right of a buyer of a
property in possession pursuant to a Deed of Conditional Sale.
HELD: The preference given to a duly registered levy on attachment

or execution over a prior unregistered sale is well-settled in our
jurisdiction. As early as Gomez v. Levy Hermanos,[9] this Court has
held that an attachment that is duly annotated on a certificate of title
is superior to the right of a prior but unregistered buyer.
Indeed, the subsequent sale of the property to the attaching creditor

must, of necessity, retroact to the date of the levy. Otherwise, the
preference created by the levy would be meaningless and illusory, as
reiterated in Defensor v. Brillo:[11]
―x x x. The doctrine is well-settled that a levy on execution duly

registered takes preference over a prior unregistered sale; and that
even if the prior sale is subsequently registered before the sale in
execution but after the levy was duly made, the validity of the
execution sale should be maintained, because it retroacts to the date
of the levy; otherwise, the preference created by the levy would be
meaningless and illusory.
As the property in this case was covered by the torrens system, the
registration of Stronghold‘s attachment[14] was the operative act that
gave validity to the transfer and created a lien upon the land in favor
of respondent.
The preference created by the levy on attachment is not

diminished even by the subsequent registration of the prior
sale.[16] That was the import of Capistrano v. PNB,[17] which held
that precedence should be given to a levy on attachment or execution,
whose registration was before that of the prior sale.
In Capistrano, the sale of the land in question -- though made as far

back as 1946 -- was registered only in 1953, after the property had
already been subjected to a levy on execution by the Philippine
National Bank. The present case is not much different. The
46
WALKER VS McMICKING
FACTS: The plaintiff, Walker, was the owner of a Filipino carriage

factory.lawphi1.net The building in which the factory was operated and
its contents were, on the 30th of June, 1908, sold to a partnership
known as "Arenas & Co. The said company paid the installment due on
the 15th of July, 1908, but failed to pay said installments due in
September and December.
On the 5th day of February, 1909, the plaintiff commenced an action

in the Court of First Instance of the city of Manila to recover the
possession of certain personal property.
It appears, however, that on or about the 16th of December, 1908,

the defendant, acting as sheriff of the city of Manila, levied an
attachment upon the said factory and its contents, by virtue of a
judgment theretofore rendered against the said Arenas & Co. The
record does not disclose fully just what was done in effecting said
attachment. It appears, however, by an indorsement upon said alleged
writ of attachment, or perhaps by a stipulation between the parties (to
the attachment), that the goods attached "shall remain in the
possession of the same defendants, relieving the sheriff of all
responsibility as regards the care and custody thereof."
The pretension of the plaintiff is that the defendant, Jose McMicking,

took possession of certain personal property, and retains the
possession of the same, which belongs to them. Even admitting that
the defendant did, by virtue of an attachment, as sheriff, pretend to
take possession of the property in question, the plaintiffs contend that
the attachment was void for the reason that the defendant, as sheriff,
did not comply with the law in levying the said attachment.
ISSUE: WON the sheriff properly attached the personal property
HELD: We are of the opinion, and so hold, that the attachment was
not properly made in accordance with the provisions of the Code of the
Procedure in Civil Actions.
It will be noted, even admitting that the defendant is here sued as

sheriff, and that his responsibility in this action is as sheriff, that he did
not comply with said section 428, in making said attachment. He did
not attach and safely keep the movable property attached. A
verbal declaration of seizure of service of a writ of attachment
is not sufficient. There must be an actual taking of possession
and placing the attached property under the control of the
officer or someone representing him.
We believe that under said section 428 to constitute a valid levy of an

attachment, the officer levying it must take actual possession of the
property attached as far as under the circumstances is practicable. He
must put himself in position to, and must assert and, in fact, enforce a
dominion over the property adverse to and exclusive of the attachment
debtor, and such property must be in substantial presence and
possession. Of course, this does not mean that the attaching officer
may not, under an arrangement satisfactory to himself, put anyone in
possession of the property for the purpose of guarding it, but he can
not in this way relieve himself from liability to the parties interested in
said attachment.
47
NBI VS. TULIAO xxx xxx xxx
FACTS: A complaint against Respondent Deputy Provincial Sheriff

Clearly, respondent's act of leaving the passenger jeep in the
Rodolfo G. Tuliao was filed by Santiago N. Salvador.
possession and control of the creditor did not satisfy the foregoing
requirements of the Rules; neither did it conform to the plainly worded
Complainant Salvador bought a passenger jeep from Lito G. Ignacio to
RTC order. The note in the receipt that imposed on Ignacio the
be paid in monthly installments of P7,000.00 with a down payment of
obligation to produce the same whenever required by the court was no
P50,000.00. After remitting the down payment, complainant diligently
compliance either, because it did not establish that the property was in
paid all monthly amortizations until March 1994 when, in the absence
respondent sheriff's substantial presence and possession. Respondent
of Ignacio, the complainant was forced to pay to an unnamed brother
fell short of his obligation to take and safely keep the attached
of the seller the amounts due for the months of April and May 1994.
property "in his capacity
However, the brother failed to remit said amount to the seller; thus,
the latter filed with the Regional Trial Court of Cauayan, Isabela,
That Ignacio was able to move the passenger jeep to an unknown
Branch 20 9 a suit for collection docketed as Civil Case No. 20-757.
location is further proof that respondent sheriff had not taken and
safely kept it in his substantial presence, possession and control.
Subsequently, an order was issued by the RTC directing respondent
sheriff to attach the passenger jeep. Complainant, through counsel,
His claim that the regional trial court did not have any storage facility
filed a motion to discharge attachment upon filing of a counterbond for
to house said property is no justification. He could have deposited it in
the release of the vehicle in his favor. Due to some defects in the
a bonded warehouse. 17
aforementioned motion, a second motion with counterbond was filed.
On July 13, 1994, the trial court issued an order approving the
counterbond Contrary to respondent sheriff's contention, compelling the attaching
and the Sheriff is hereby ordered to release to the defendant the creditor to release the property in question was not in order, because
attached vehicle. the proper remedy provided by the Rules of Court was for the party
whose property had been attached to apply for the discharge of the
Respondent refused to comply with the said order. Instead, he
attachment by filing a counterbond. 18 The effect of this remedy is
released the passenger jeep to Ignacio after the latter had executed a
receipt therefor together with an undertaking that he would produce the delivery of possession of the attached property to the party giving
the jeep whenever required by the court. Respondent justified such the counterbond. The attaching creditor was not authorized to have
release by saying that the court had no storage building that would possession of the attached property, contrary to the insistence of
protect the jeep from damage or loss. respondent sheriff.
Respondent sheriff contends that his act of not taking into his official Leaving the attached property in the possession of the attaching
custody the attached property was not unlawful but was in fact
creditor makes a farce of the attachment. This is not compliance with
reasonable because the court had no facility for its storage. That it
could no longer be returned to complainant's possession in accordance the issuing court's order. When a writ is placed in the hands of a
with the court's order was not his fault but that of the attaching sheriff, it is his duty, in the absence of any instructions to the contrary,
creditor who had violated his obligation to produce the same whenever to proceed with reasonable celerity and promptness to execute it
required by the court. He offers "to pay a fine in the discretion of the according to its mandate. 21 He is supposed to execute the order of
Honorable Court as he has not benefited any pecuniary interest the court strictly to the letter. 22 If he fails to comply, he is liable to
the person in whose favor the process or writ runs.
ISSUE: Can the sheriff levy the property by just leaving it to
the defendants? Such as when the defendants will just issue
an „undertaking?
HELD: NO. This Court finds respondent sheriff's manner of

attachment irregular and his reason therefor totally unacceptable.
Rule 57 of the Rules of Court provides:
Sec. 5. Manner of attaching property. — The

officer executing the order shall without delay
attach, to await judgment and execution in the
action, all the properties of the party against
whom the order is issued in the province, . . .
xxx xxx xxx
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
(c) Personal property capable of manual

delivery, by taking and safely keeping it in his
capacity, after issuing the corresponding receipt
therefor;
48
VILLANUEVA-FABELLA VS. JUDGE RALPH LEE
FACTS: The complainants are counsels for the defendants in Civil

Case No. [38]-28457 entitled ‗Star Paper Corporation vs. Society of St.
Paul and Fr. Leonardo Eleazar‘ for Sum of Money with Prayer for
Preliminary Attachment. They narrated that on 19 June 2002, their
clients were served a copy of the complaint and a Writ of Attachment
by Sheriff Dela Cruz based on the plaintiff‘s allegation that the
defendants contracted a debt in bad faith with no intention of paying
the same.
"On the aforementioned day, a printing machine was levied and

delivered to the plaintiff‘s warehouse, although there was an offer by
the defendants to pay right there and then P223,457.75, the amount
fixed in the order of attachment, but the plaintiff denied the
defendants‘ plea not to attach the machine, saying that [it] had
already set [its] mind on attaching the same.
The complainants claim[ed] that Sheriff Dela Cruz violated x x x Rule

57, Section 7, 1997 Rules of Civil Procedure which provide[d] that in
the attachment of personal property capable of manual delivery, [the
property should] be taken and safely kept in the sheriff‘s custody. The
machinery, according to complainants, [was] brought to [the]
plaintiff‘s warehouse in San Francisco del Monte, Quezon City.
Respondent sheriff added that it was in his own belief and best
judgment to temporarily place the delicate printing machine in the
warehouse of the plaintiff for safekeeping. The machine was
eventually returned to the defendants by virtue of the Order
discharging the Writ. In fact, one of the complainants personally
acknowledged receipt of the machine.
ISSUE: WON there was a valid attachment
HELD: NO. We find that the charges against respondent sheriff have
bases. Verily, he blatantly violated Section 7(b) of Rule 57 of the Rules
of Court when he deposited the machine in the warehouse of the
plaintiff. In enforcing a writ of attachment, a sheriff who takes
personal property capable of manual delivery shall safely keep it in
custody after issuing the corresponding receipt therefor.54 Respondent
sheriff failed to do so.
To constitute a valid levy of attachment, the officer levying it must

have "actual possession of the property attached."55 "He must put
himself in [a] position to, and must assert and, in fact, enforce a
dominion over the property adverse to and exclusive of the attachment
debtor."56 To this rule we add that the officer cannot even deliver the
property to the attachment creditor, as the parties must await the
judgment in the action. The levied property must be in the "substantial
presence and possession"57 of the levying officer, who "cannot act as
special deputy sheriff of any party litigant."58 The officer may put
someone "in possession of the property for the purpose of guarding
it," but the former cannot be "relieve[d] x x x from liability to the
parties interested in said attachment."
The duty of sheriffs to execute a writ issued by a court is purely

ministerial,66 not discretionary.67 Clearly, they must keep the levied
property safely in their custody, not in that of any of the parties. They
exercise no discretion in this regard, for attachment is harsh,
extraordinary and summary in nature -- a "rigorous remedy which
exposes the debtor to humiliation and annoyance."68 Contrary to the
claim of respondent sheriff, his unusual zeal and precipitate decision to
give possession of the machine to the plaintiff effectively destroys, the
presumption of regularity in his performance of official duties.69 "Any
method of execution falling short of the requirement of the law
deserves reproach and should not be countenanced."
49
SEBASTIAN VS. VALINO
FACTS: On March 3, 1989, Private Development Corporation of the

Philippines (PDCP) filed a replevin suit against Marblecraft, Inc., in Civil
Case No. 89-3368, in order to foreclose the chattels mortgaged by
Marblecraft. On March 30, 1989, the Regional Trial Court, Makati,
issued a writ of seizure directed against Marblecraft covering the
chattels sought to be replevied.
On November 9, 1990, at around 10:37 A.M., respondent,

accompanied by several policemen and PDCP employees, went to the
office of Marblecraft at Barrio Santolan, Pasig, to implement the writ of
seizure. Respondent and his companions forcibly opened the lockers
and desk drawers of the employees of complainant and took their
personal belongings, as well as some office equipment issued to them.
Respondent only showed to complainant's counsel a copy of the writ

but did not furnish him with a copy of the application for the writ, the
supporting affidavit and the bond.
In the course of the implementation of the writ, which lasted for four
days, several pieces of machinery and equipment were destroyed or
taken away by respondent.
Respondent turned over the seized articles to the counsel of PDCP and
allowed these items to be stored in PDCP's warehouse in Taguig,
Metro Manila.
ISSUE: WON the implementation was proper
HELD: NO. Under the Revised Rules of Court, the property seized
under a writ of replevin is not to be delivered immediately to the
plaintiff. The sheriff must retain it in his custody for five days and shall
return it to the defendant, If the latter, as in the case, requires its
return and files a counterbond (Sec. 4, Rule 60, Revised Rules of
Court). In violation of said Rule, respondent immediately turned over
the seized articles to PDCP. His claim that the Office of the Regional
Sheriff did not have a place to store the seized items, cannot justify his
violation of the Rule. As aptly noted by the Investigating Judge, the
articles could have been deposited in a bonded warehouse.
Respondent must serve on Marblecraft not only a copy of the order of

seizure but also a copy of the application, affidavit and bond (Sec. 4,
Rule 60, Revised Rules of Court). Respondent did not furnish
defendant with a copy of the application, affidavit and bond. By his
own admission, he only served it with a copy of the order of seizure.
50
VILLAREAL VS. RARAMA
FACTS: It appears that an action for collection of a sum of money was

filed by the Cooperative Rural Bank of Davao City against the spouses
Marianette (herein complainant) and Roy Villareal, Lito Lacorda and
Felimon Cangrejo before the MTCC. The records show that summons
was served upon respondent Cangrejo who, however, failed to file his
answer, as a consequence of which he was declared in default. On
April 19, 1989, judgment 6 was rendered against him in favor of the
plaintiff bank without prejudice to his right to proceed against his co-
debtors. On March 29, 1994, an alias writ of execution 7 was issued by
the trial court against Cangrejo.
According to complainant, at around 1:30 P.M. of April 25, 1994,

respondent Rarama arrived at her house in Digos, Davao del Sur,
together with the other respondents and three employees of the
Cooperative Rural Bank of Davao City, Inc., including one Vic Belo who
is a collector of the bank. Respondent Rarama introduced himself as a
sheriff of Davao City and informed her that they were going to attach
her properties because she lost in a case. Complainant denied having
been charged in court, much more of having lost in a case, and that
she did not owe anything to the bank. When respondent Rarama
persisted in getting her properties, she demanded and was shown the
writ of execution. She objected thereto, claiming that the same was
not addressed to her but to Felimon Cangrejo and that the writ was
being served after more than five years from the date the decision was
rendered. The reply given her was that she is the principal borrower
and the only one who is solvent.
ISSUE: Can you levy on a property that does not belong to the
defendant? Can the sheriff exercise discretion in the levy of
the properties?
HELD: NO. While there is evidence to show that indeed complainant

Marianette Villareal is the principal debtor while Felimon Cangrejo is
merely a co-maker, the fact remains that Cangrejo was the sole debtor
adjuged liable for the loan obtained from the Cooperative Rural Bank
of Davao City, Inc. and the alias writ of execution was directed only
against him. Hence, respondent Rarama had no authority to implement
the same against herein complainant considering that, although she
was named as a defendant in the collection case, there was no
judgment against her as of the date of the incident.
A sheriff has no authority to levy on execution upon the property of

any person other than that of the judgment debtor. If he does so, the
writ of execution affords him no justification, for such act is not in
obedience to the mandate of the writ. 10 As long as the sheriff
confines his acts to the authority of the process, he is not liable, but all
of his acts which are not justified by the writ are without authority of
law. This is so because if an execution against one man would excuse
the sheriff for taking the property of another, every citizen would be at
his mercy and none could call his estate his own.
51
BALANTES VS. OCAMPO
FACTS: Records show that complainant is the defendant in an

ejectment case (Civil Case No. 8339) filed by plaintiff Roberto Roco but
which was decided by respondent judge against complainant.
On motion of the plaintiff-appellee, the RTC, on October 23, 1989

issued a Writ of Execution and Demolition pending appeal, ordering
the removal of one-half (1/2) portion of complainant's residential
house found to be built inside the titled property of the plaintiff.
Subsequently, the decision on appeal was affirmed by the same
Regional Trial Court and the records of the case were remanded to
respondent's sala for execution of the judgment. On November 25,
1991, respondent Judge issued a writ ordering the demolition of the
remaining half portion of complainant's residential house found
standing on a public property (legal easement). Complainant filed a
motion for reconsideration of the demolition order but the same was
denied on December 5, 1991.
ISSUE: What is the nature of the implementation of the writ

by the sheriff?
HELD: MINISTERIAL. As regards the charge against respondent
Clerk of Court and Ex-Officio Sheriff Lilia S. Buena, the same is
dismissed, it appearing from the certification she issued that the
Temporary Restraining Order issued by the RTC, Branch 27, Naga City
was received by her on September 2, 1992 at 2:15 p.m., after the
demolition had been completely effected and the premises delivered to
the plaintiff at 1:30 p.m. of same date. It appears that respondent
Buena was not aware of the existing TRO which she received within
the hour after the demolition had taken place, thus rendering said
restraining order a fait accompli. The rule is that when a writ is
placed in the hands of a sheriff, it is his duty, in the absence of
instructions, to proceed with reasonable celerity and
promptness to execute it according to its mandate. He may
not apply his discretion as to whether to execute it or not.
52
ELIPE VS. FABRE
FACTS: The record discloses that on June 19, 1992, the MTCC, Branch
3, at Cagayan de Oro issued a writ of execution for the enforcement of
a barangay agreement in Case No. 91-144 for collection of unpaid
rentals and construction materials amounting to P100,000.00.
Complainant testified that on June 25, 1992, at nine o'clock in the
morning, respondent served the writ or judgment debtors Michael dela
Cerna and his wife but the respondent was able to levy only upon a
dilapidated vehicle and an old piano. 1 Complainant stated that at ten
o'clock in the evening of the same day, the judgment debtors
surreptitiously removed several pieces of furniture from the house
which they rented. 2 On June 26 and 30 and again on July 4, 11, 38
and 19, 1992, they removed appliances and other personal properties
and destroyed building fixtures on the property owned by
complainant. 3 On these occasions, according to the complainant,
respondent did not make any effort to prevent the judgment debtors
from removing leviable properties to implement the writ, despite the
fact that he had been told by complainant of the judgment debtors'
activities.
Respondent Fabre denied the complainant's allegation. He claimed that

he levied on several properties of the judgment debtors, but
unfortunately the bid price paid for them at the public auction was only
P10,000.00. 4 He justified his action in levying only on the personal
properties which he found at the business establishment and in
desisting from enforcing the writ with respect to properties on the
second floor of the residence of the judgment debtors on two grounds:
(1) the judgment debtors refused to let him in; and (2) he did not
have any order from the MTCC to force open the door which had been
locked.
ISSUE: Suppose the sheriff fails to execute the writ, what

liability if there is any, will he incur?
HELD: Indeed, as clearly stated in the Manual for Clerks of Court, a

sheriff, to whom a valid writ or process is delivered to be levied upon a
property within his jurisdiction, is liable to the person in whose favor
the process or writ runs if he fails to make a levy upon property owned
by the judgment debtor within his jurisdiction and by reason thereof
the judgment creditor is injured. It is omission not dependent upon
intentional wrong or negligent omission to seize property of judgment
debtor.
Respondent ought to have known the correct procedure to be followed

in order to ensure proper administration of justice, especially in its
concluding stage. He failed observe that degree of dedication to the
duties and responsibilities required of him as a sheriff. He is bound to
discharge his duties with prudence, caution and attention which careful
men usually exercise in the management of their affairs. The sheriff,
an officer of the court upon whom the execution of a final judgment
depends, must be circumspect and proper in his behavior. Execution is
the fruit and end of the suit and is the life of the law.
In the case at bar, it is not that respondent did not know what he
should do, given the problem that he was confronted with. In his
answer 9 respondent tried to excuse himself from what was his duty,
claiming that he did not force his way into the second floor where the
judgment debtors resided because a special court order was needed to
enable him to do this. Knowing this to be the case, it was his duty to
see to it that such an order was secured from the court.
53
ROQUE VS CA HELD: 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
FACTS: On January 31, 1973, respondent Associated Banking
cannot affect the validity of that levy.
Corporation (the Bank, for short) instituted an action, Civil Case No.
89692, in the Court of First Instance of Manila, Branch XXVIII, ISSUE 2: Is a vessel capable of manual delivery?
respondent Judge, presiding, against private respondent Fil-Eastern
Wood Industries, Inc. (Fil-Eastern, for brevity), a domestic corporation, As a general rule, however, a levy of an attachment upon personal
for recovery of a sum of money. property may be either actual or constructive. 17 In this case, levy
had been constructively made by the registration of the same with the
Upon ex-parte application by the Bank for a Writ of Preliminary Philippine Coast Guard on February 7, 1974. Constructive possession
should be held sufficient where actual possession is not
Attachment, respondent Judge, after the filing and approval of the
feasible, 18particularly when it was followed up by the actual seizure
required bond of P220,000.00, issued, on February 4, 1974, an Order of the property as soon as that could possibly be effected.
of Attachment commanding the Sheriff to attach the estate, real and
personal, of Fil-Eastern.
On February 7, 1974, the Sheriff's "Notice of Levy Pursuant to the Writ

of Attachment" was registered in the Office of the Commander of the
First Coast Guard, District of Manila, 2 pursuant to Sec. 805 of the
Tariff and Customs Code, as amended by Presidential Decree No. 34,
requiring the registration of documents affecting titles of vessels with
that entity. The said notice read, "levy is hereby made upon all the
rights, titles, interest, shares and participation which the defendant Fil-
Eastern Wood Industries, Inc. has or might have over a sea vessel or
barge named Fil-Eastern V.
It appears that 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.
Pursuant to the provisions of Article 2112 3in relation to Article

1731 4 of the Civil Code, the Cotabato Visayan Development
Corporation proceeded before Notary Public Clemente R. Gonzales of
Manila to the sale of said barge. In the public auction sale conducted
by said Notary Public on April 24, 1974, petitioner Eligio Roque
acquired the barge as the highest bidder, and was accordingly issued a
Certificate of Sale by the Notary Public.
On August 29, 1974, the Bank filed a "Motion for the Issuance of
Another Writ of Attachment" stating that at the time of the issuance of
the Writ on February 4, 1974, the barge in question could not be
located within the jurisdiction of the trial Court. having been anchored
somewhere in the Visayas, and that actual levy on the barge could not
be made as "the original Order of attachment is allegedly in the
possession of the Branch Deputy Sheriff appointed by the Honorable
Court, who has not reported to the office since August 26, 1974, and,
therefore, could not implement the writ." 10 On the same date,
August 29, 1974, the trial Court (Judge Rafael S. Sison, presiding)
denied the issuance of another Writ (apparently ' v because it was
deemed unnecessary), but instead ordered the Deputy Sheriff of
Branch XXVIII to coordinate with the City Sheriff of Manila in the
implementation of the Writ previously issued. 11 On August 30, 1974,
Deputy Sheriff Garvida actually seized and levied upon the vessel.
Petitioners argue that the levy was illegal because the Writ was
implemented more than sixty days after its issuance so that they need
not have complied with Section 14, Rule 57.
ISSUE: Is there a specific period that the sheriff will enforce

the writ such that if that period lapses, then he can be made
liable?
54
SUMMIT TRADING & DEV‟T CORP VS. AVENDANO March 18, that particular officer. But, as already stated, under the facts of this
1985 case, the president's secretary may be regarded as the "agent" within
the meaning of section 13 since service upon her of the judgment itself
FACTS: Segundo Pilipinia and Edgardo Mindo in 1973 acquired under came to the notice of Summit Trading.
Land Authority Administrative Order No. 4 two registered lots with a
total area of 2 ½ hectares located at Barrio San Vicente, San Pedro,
Laguna.
NOTE: This was decided in 1985 under the old Rules. Now,
“agent” is not in the list on who may be validly served with
The titles of the lots contain the annotation that should Pilipinia and summons with respect to domestic corporations.
Mindo sell the same, they have the right to redeem the lots within five
years from the date of the sale
Pilipinia and Mindo sold the lots for P16,000 and P12,000 to Gavino
Ortega on February 14 and April 19, 1977. They have retained
possession of the lots which are ricelands. They became tenants
thereof.
Ortega resold the two lots on November 14, 1979 for P16,000 and
P11,000 to Summit Trading through its president, Virgilio P. Balaguer.
On August 10, 1981, or within the five-year period, Pilipinia and Mindo
filed a complaint against Ortega and Summit Trading for the
redemption or repurchase of the two lots.
Ortega was duly summoned. He failed to answer the complaint. He

was declared in default. Summit Trading was also declared in default.
The default judgment was rendered on the assumption that Summit
Trading was duly summoned through Marina Saquilayan as secretary
of Summit Trading. She received the summons on August 28, 1981. A
copy of the judgment was also served on her on November 13, 1981.
Actually, Saquilayan received the summons as secretary of Balaguer,

already mentioned as the president of Summit Trading which
purchased the lots from Ortega. Bonifacio Tiongson was the corporate
secretary.
Nineteen days after Saquilayan received a copy of the decision,

Summit Trading filed a motion for reconsideration on the ground that
the trial court did not acquire jurisdiction over it because summons
was not served upon it in accordance with Rule 14 of the Rules of
Court
ISSUE: WON summons was validly served to Summit Trading
HELD: YES. It is true that Saquilayan is not among the persons

mentioned in section 13. However, she, being under the control of
Summit Trading, has not explained what she has done with the
summons and complaint. The logical assumption is that she delivered
it to her boss, the president of Summit Trading. As already stated, she
received a copy of the decision and Summit Trading became aware of
it. Summit Trading's motion for reconsideration was denied.
While Summit Trading is technically correct in contending that there

was no strict compliance with section 13, we cannot close our eyes to
the realities of the situation. Under the facts of this case, Saquilayan,
being the secretary of the president (whose contact with the outside
world is normally through his secretary), may be regarded as an
"agent" within the meaning of section 13.
Hence summons was validly served upon Summit Trading. Its

negligence in not answering the complaint was inexcusable. In fact, up
to this time, Summit Trading has not bothered to state its defenses to
the action nor stated whether it has a meritorious case warranting the
setting aside of the default judgment.
We are not saying that service on such a secretary is always proper.

Generally, it is improper. The president himself must be served
personally with the summons if it is desired to effect the service on
55
CHEMPHIL EXPORT AND IMPORT CORP. VS. CA garnishment was addressed to and was actually received by
Chemphil's president through his secretary who formally received it for
FACTS: On September 25, 1984, Dynetics, Inc. and Antonio M. Garcia him. Thus, in one case, 56 we ruled that the secretary of the president
filed a complaint for declaratory relief and/or injunction against the may be considered an "agent" of the corporation and held that service
PISO, BPI, LBP, PCIB and RCBC or the consortium with the Regional of summons on him is binding on the corporation.
Trial Court of Makati, Branch 45 (Civil Case No. 8527), seeking judicial
declaration, construction and interpretation of the validity of the surety
Moreover, the service and receipt of the notice of garnishment on 19
agreement that Dynetics and Garcia had entered into with the
July 1985 was duly acknowledged and confirmed by the corporate
consortium and to perpetually enjoin the latter from claiming,
secretary of Chemphil, Rolando Navarro and his successor Avelino Cruz
collecting and enforcing any purported obligations which Dynetics and
through their respective certifications dated 15 August 1989 57 and 21
Garcia might have undertaken in said agreement.
August 1989. 58
The consortium filed their respective answers with counterclaims
alleging that the surety agreement in question was valid and binding We rule, therefore, that there was substantial compliance with Sec.
and that Dynetics and Garcia were liable under the terms of the said 7(d), Rule 57 of the Rules of Court.
agreement. It likewise applied for the issuance of a writ of preliminary
attachment against Dynetics and Garcia.
On 2 July 1985, the trial court granted SBTC's prayer for the issuance
of a writ of preliminary attachment and on 9 July 1985, a notice of
garnishment covering Garcia's shares in CIP/Chemphil (including the
disputed shares) 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.
In the meantime, on 12 July 1985, 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.
Hence, on 19 July 1985, 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. 8 This garnishment, however, was not annotated in
Chemphil's stock and transfer book.
CEIC, argues that the consortium's attachment lien over the disputed
Chemphil shares is null and void and not binding on third parties due
to the latter's failure to register said lien in the stock and transfer
books of Chemphil as mandated by the rule laid down by
the Samahang Magsasaka v. Chua Guan.
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.
ISSUE 1: Must the levy on shares be recorded in the book of the

corporation?
HELD 1: NO. The attachment lien acquired by the consortium is valid

and effective. Both the Revised Rules of Court and the Corporation
Code do not require annotation in the corporation's stock and transfer
books for the attachment of shares of stock to be valid and binding on
the corporation and third party.
As succinctly declared in the case of Monserrat v. Ceron, 49 "chattel

mortgage over shares of stock need not be registered in the
corporation's stock and transfer book inasmuch as chattel mortgage
over shares of stock does not involve a "transfer of shares," and that
only absolute transfers of shares of stock are required to be recorded
in the corporation's stock and transfer book in order to have "force and
effect as against third persons."
ISSUE 2: Was there a valid service of notice of garnishment?
HELD 2: YES. 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
56
TAYABAS LAND CO. VS. SHARRUF litigation. It is merely a case of involuntary novation by the substitution
of one creditor for another. Upon principle the remedy is a species of
FACTS: On December 10, 1914, one Salvador Farre recovered a joint attachment or execution for reaching any property pertaining to a
and several judgment against Salomon M. Sharruf and Farham M. judgment debtor which may be found owing to such debtor by a third
Sharruf in the Court of First Instance of the city of Manila for the sum person.
of P1,300, with legal interest from September 5, 1914, and with costs.
This judgment having remained unsatisfied, and execution was upon
The situation involved supposes the existence of at least three
April 3, 1916, issued thereon at the instance of the plaintiff.
persons, to wit, a judgment creditor, a judgment debtor, and the
garnishee, or person cited, who in turn is supposed to be indebted to
Meanwhile on March 27, 1915, Salomon M. Sharruf had himself the first debtor (i.e., judgment debtor).
recovered a judgment, also in the Court of First Instance of the city of
Manila, against the Tayabas Land Company and A.M. Ginainati, for the
To proceed a little further with the barest details of the process of
sum of P6,841.36, with interest and costs; and as there seems to have
garnishment, we note that a citation issues from the court having
been no visible property belonging to Salomon M. Sharruf and Farham
jurisdiction of the principal litigations, notifying the garnishee that the
M. Sharruf subject to seizure by the sheriff to satisfy the execution in
property and credits of the judgment debtor have been levied upon or
favor of Salvador Farre, it became important for Farre to subject the
attached in the hands of such garnishee, and enjoining him not to
judgment in favor of Salomon M. Sharruf against the Tayabas Land
deliver, transfer, or otherwise dispose of any effects or credits
Company and A.M. Ginainati to the payment of his own claim.
belonging to that person, and requiring him furthermore to make a
statement to the court of the property of the judgment debtor in his
To this end process of garnishment (notification de embargo) was, on hands and of the debts owing by the garnishee to such debtor.
April 6, 1916, issued at the instance of Salvador Farre in aid of his
execution against the Sharrufs and was on the same or succeeding day
Enough has now been said to show clearly that the action of
duly served upon the Tayabas Land Company. By this process the
the sheriff in exposing to public sale the judgment which had
Tayabas Land Company was informed that levy had, by virtue of the
been procured by Salomon M. Sharruf in the action against the
execution aforesaid, been made upon all the property of S. M. Sharruf
Tayabas Land Company, et al., was wholly unauthorized, and
in the possession of said Tayabas Land Company and upon all debts
said sale must be considered void. The proper step would have
owing by the latter to said Sharruf, and in particular upon all
been for the court to require the Tayabas Land Company, after
participation and interest of S. M. Sharruf in the judgment rendered in
the judgment against it had become final, to pay into court, in
his favor in the action prosecuted by him against the Tayabas Land
the cause wherein Salvador Farre was plaintiff, a sufficient
Company and others.
amount of money to satisfy Farre's claim against Sharruf; and
if the judgment against the Tayabas Land Company had been
In pursuance of the levy thus effected upon the judgment in favor of permitted to go to the stage of execution, the proceeds in the
Salomon M. Sharruf against the Tayabas Land Company, the sheriff of hands of the sheriff would have been applied, under the
the city of Manila, as in ordinary cases of levy upon chattels of real direction of the court, to the payment of Farre's claim before
property, proceeded upon April 15, 1916, to expose to sale all right, any part would have been payable to Sharruf.
title, and interest of said Sharruf in the judgment aforesaid. At this sale
Salvador Farre, the execution creditor himself, became the purchaser
Our conclusion that the sale of the judgment in question under process
of the judgment in question for the sum of P200.
of execution was void is supported by the decisions of the Supreme
Court of California, construing the very section of the California Code
ISSUE 1: Can a judgment debt be the subject of garnishment?
of Civil Procedure from which section 450 of the Code of Civil
Procedure of the Philippine Islands was taken.
HELD 1: YES. In the first place, we have no hesitancy in saying that a
judgment for a sum of money, that is, the interest of the plaintiff in
such a judgment, is liable to execution. A judgment for a sum of
money is, as to the party entitled to payment, a credit; and as to the Reflection upon this feature of the case, however, confirms the opinion
party who ought to pay the money, a debt. Furthermore, the interest that our lawmakers acted wisely in requiring that debts and credits
of the creditor in such a judgment is clearly property, though not should be executed by means of the process of garnishment rather
capable of manual delivery. All of these elements of value — "debts." than by exposing them to public sale. In the case before us a
"credits," and "all other property not capable of manual delivery" —
judgment for a large amount was sold for a merely nominal sum, and
are expressly declared, in section 450 of the Code of Civil Procedure,
to be liable to execution. such would generally be the case at a sale under similar conditions.
This cannot fail to be highly prejudicial to the debtor who is under
ISSUE 2: Was there a proper execution of garnishment? immediate execution. The proceeding by garnishment, on the contrary,
enables all parties to realize their rights without unduly disturbing the
HELD 2: NO. It will be noted, however, that under the section just position of any.
cited, debts, credits, and other property not capable of manual delivery
are to be dealt with in a different manner from that prescribed in case
of the execution of tangible property; for while tangible property is
proceeded with by seizure and sale under execution, debts and credits
are to be attached by the citation of the debtor.
The proceeding thus indicated as proper, in order to subject a debt or

credit is known in American civil procedure as the process of
garnishment; and it may be truly said that garnishment is one of the
simplest processes, and the least involved in technicalities, of any
proceeding known to the law. It consists in the citation of some
stranger to the litigation, who is debtor to one of the parties to the
action. By this means such debtor stranger becomes a forced
intervenor; and the court, having acquired jurisdiction over his person
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
57
RURAL BANK VS. STA. BARBARA ISSUE 1: WON respondents availed of the wrong remedy?
FACTS: Spouses Tomas and Maria Soliven (spouses Soliven) were the HELD 1: NO. The filing by respondent of the Motion to Release
registered owners, under Transfer Certificate of Title (TCT) No. T- Property from Attachment was made on the advice of the Sheriff upon
125213, of a parcel of land located in Barangay Maninding, Sta. whom respondent served its Affidavit of Title and
Barbara, Pangasinan (subject property). On 18 May 1992, the spouses Ownership. Respondent should not be faulted for merely heeding the
Soliven sold the subject property to respondent Manila Mission of the Sheriff‘s advice. Apparently, the Sheriff, instead of acting upon the
Church of Jesus Christ of Latter Day Saints, Inc. (Manila third-party claim of respondent on his own, would rather have some
Mission). However, it was only on 28 April 1994 when TCT No. T- direction from the RTC. Indeed, the Sheriff is an officer of the RTC
125213 in the name of the spouses Soliven was cancelled, and TCT and may be directed by the said court to allow the third-party claim of
No. 195616 was issued in the name of respondent. respondent. Therefore, the filing of the Motion in question can be
deemed as a mere continuation of the third-party claim of respondent,
In the meantime, on 15 April 1993, petitioner Rural Bank of Sta. in the form of its Affidavit of Title and Ownership, served upon the
Barbara (Pangasinan), Inc. filed with the RTC a Complaint against the Sheriff, in accord with the first paragraph of Section 14, Rule 57 of the
spouses Soliven for a sum of money, docketed as Civil Case No. D- Rules of Court.
10583. The Complaint of petitioner included a prayer for the issuance
of a Writ of Preliminary Attachment. Alternatively, we may also consider the Motion to Release Property
from Attachment, filed by respondent before the RTC, as a Motion for
In an Order dated 7 May 1993, the RTC ordered the issuance of the Intervention in Civil Case No. D-10583, pursuant to the second
Writ of Attachment petitioner prayed for. paragraph of Section 14, Rule 56, in relation to Rule 19 of the Rules of
Court. Respondent, to vindicate its claim to the subject property, may
Upon the filing by petitioner of the required bond, the RTC issued the intervene in the same case, i.e., Civil Case No. D-10583, instituted by
Writ of Attachment on 21 May 1993. Acting on the authority of said petitioner against the spouses Soliven, in which the said property was
Writ, Sheriff Reynaldo C. Daray attached the subject property, which attached. Respondent has the personality to intervene, as it ―is so
was then still covered by TCT No. T-125213 in the name of the situated as to be adversely affected by a distribution or other
spouses Soliven. The Writ of Attachment was annotated on TCT No. disposition of property in the custody of the court or of an officer
T-125213 on 24 May 1993. Thus, when TCT No. T-125213 of the thereof.‖[5] The RTC, in acting upon and granting the Motion to
spouses Soliven was cancelled and TCT No. 195616 of petitioner was Release Property from Attachment in its Order dated 9 October 1995,
issued on 28 April 1994, the annotation on the Writ of Attachment was is deemed to have allowed respondent to intervene in Civil Case No. D-
carried from the former to the latter. 10583.
While Civil Case No. D-10583 was still pending before the RTC, ISSUE 2: WON petitioners have a better right
respondent executed an Affidavit claiming title and ownership over the
subject property, and requested the Ex-Officio Provincial and City HELD 2: YES. It is settled, therefore, that a duly registered levy on
Sheriff to release the said property from attachment. The Sheriff, attachment takes preference over a prior unregistered sale.
however, advised respondent to file a motion directly with the RTC.
Nonetheless, respondent argues that there is a special circumstance in
On 16 March 1995, respondent filed with the RTC, in Civil Case No. D- the case at bar, which should be deemed a constructive registration of
10583, a Motion to Release Property from Attachment, to which the sale of the subject property in its favor, preceding the attachment
petitioner, in turn, filed an Opposition. of the same property by petitioner.
Petitioner argues that, pursuant to Sec. 14, Rule 57, the remedy of a In Ruiz, the very case cited by petitioner, we made a qualification of
third person claiming to be the owner of an attached property are the general rule that a duly annotated attachment is superior to an
limited to the following: (1) filing with the Sheriff a third-party claim, in unregistered prior sale. In fact, we resolved Ruiz in favor of the
the form of an affidavit, per the first paragraph of Section 14; (2) vendee in the unregistered prior sale, because knowledge of the
intervening in the main action, with prior leave of court, per the second unregistered sale by the attaching creditor is deemed equivalent to
paragraph of Section 14, which allows a third person to vindicate registration. We explained in Ruiz:
his/her claim to the attached property in the ―same x x x action‖; and
(3) filing a separate and independent action, per the second paragraph But where a party has knowledge of a
of Section 14, which allows a third person to vindicate his/her claim to prior existing interest which is unregistered at that
the attached property in a ―separate action.‖ time he acquired a right to the same land, his
knowledge of that prior unregistered
Respondent explains that it tried to pursue the first remedy, i.e., filing interest has the effect of registration as to
a third-party claim with the Sheriff. Respondent did file an Affidavit of him. Knowledge of an unregistered sale is
Title and Ownership with the Sheriff, but said officer advised equivalent to registration.
respondent to file a motion directly with the RTC in the main
case. Respondent heeded the Sheriff‘s advice by filing with the RTC, If the allegation of respondent Manila Mission anent the building of the
in Civil Case No. D-10583, a Motion to Release Property from chapel even before the issuance of the writ of attachment is true, this
Attachment. The Court of Appeals recognized and allowed said case would be similar to Ruizwhere the vendee of the subject property
Motion, construing the same as an invocation by respondent of the was able to introduce improvements. However, respondent Manila
power of control and supervision of the RTC over its officers, which Mission presented no evidence of the building of the chapel other than
includes the Sheriff. its bare allegation thereof. More importantly, even assuming for the
58
sake of argument that the chapel was indeed being built at the time of
the attachment of the property, we cannot simply apply Ruiz and
conclude that this confirms knowledge of a previous conveyance of the
property at that time.
Neither did respondent Manila Mission present any evidence of

knowledge on the part of petitioner Rural Bank of the prior existing
interest of the former at the time of the attachment. Respondent
Manila Mission merely argues that there was a tacit recognition on the
part of petitioner Rural Bank of the construction of the chapel when
the latter did not deny this allegation in its Opposition to the Motion to
Discharge Property from Attachment.
The Motion, however, merely mentions the construction of the chapel

and does not charge petitioner Rural Bank with knowledge of the
construction. There was, therefore, nothing to deny on the part of
petitioner Rural Bank, as the mere existence of such construction at
that time would not affect the right of petitioner Rural Bank to its lien
over the subject property. Also, the mention in the Motion of the
construction of the chapel would have the effect of being a notice of
an adverse third-party claim only at the time of such Motion. Since
such notice, which was deemed in Ruiz as constructive registration of
the sale, was effected only after the attachment of the subject
property, it could not affect the validity of the attachment lien.
59
SECTION 8 having in his possession or under his control any credits or other
personal property be, longing to the defendant, ..., if such property be
ENGINEERING CONSTRUCTION VS. NPC delivered or transferred, ..., to the clerk, sheriff, or other officer of the
court in which the action is pending." 12
FACTS: On August 29, 1968, ECI filed a complaint for damages
against the NPC in the then Court of First Instance of Manila, Branch
Applying the foregoing to the case at bar, MERALCO, as garnishee,
15, alleging that it suffered damages to its facilities and equipment due
to the inundation of its campsite in Ipo, Norzagaray, Bulacan, as a after having been judicially compelled to pay the amount of the
direct result of the improper and careless opening by NPC of the judgment represented by funds in its possession belonging to the
spillway gates of Angat Dam at the height of typhoon "Welming" on judgment debtor or NPC, should be released from all responsibilities
November 4,1967. over such amount after delivery thereof to the sheriff. The reason for
the rule is self-evident. To expose garnishees to risks for obeying court
On December 23, 1970, the trial court found NPC guilty of gross orders and processes would only undermine the administration of
negligence. ECI moved for and was granted execution pending appeal.
justice.
Subsequently, Deputy Sheriff Restituto R. Quemada who was assigned
to enforce the writ of execution, garnished in favor of ECI all amounts
due and payable to NPC which were then in possession
of MERALCO and sufficient to cover the judgment sum of
P1,108,985.31.
NPC filed with the Appellate Court a petition for certiorari.
On November 11, 1971, MERALCO sought from the Appellate Court a

clarification and reconsideration of the aforesaid decision on the
ground, among others, that the decision was being used by NPC to
compel MERALCOto return the amount of P1,114,545.23 (inclusive of
sheriff's fees) in two checks which it had already entrusted to the
deputy sheriff on February 23, 1971, who then indorsed and delivered
the same to ECI.
ISSUE: Supposing the garnishee has complied with the notice

of garnishment then later on, the notice was lifted for having
been proved futile, what will be the liability or is there is still a
liability on the garnishee?
HELD: NO. But while partial restitution is warranted in favor of NPC,

we find that the Appellate Court erred in not absolvingMERALCO, the
garnishee, from its obligations to NPC with respect to the payment
to ECI of P1,114,543.23, thus in effect subjecting MERALCO to double
liability. MERALCO should not have been faulted for its prompt
obedience to a writ of garnishment. Unless there are compelling
reasons such as: a defect on the face of the writ or actual knowledge
on the part of the garnishee of lack of entitlement on the part of the
garnisher, it is not incumbent upon the garnishee to inquire or to
judge for itself whether or not the order for the advance execution of a
judgment is valid.
Section 8, Rule 57 of the Rules of Court provides,
Effect of attachment of debts and credits.-All

persons having in their possession or under their
control any credits or other similar personal
property belonging to the party against whom
attachment is issued, or owing any debts to the
same, at the time of service upon them of a copy
of the order of attachment and notice as provided
in the last preceding section, shall be liable to the
applicant for the amount of such credits, debts or
other property, until the attachment be
discharged, or any judgment recovered by him be
satisfied, unless such property be delivered or
transferred, or such debts be paid, to the clerk,
sheriff or other proper officer of the court issuing
the attachment.
Garnishment is considered as a specie of attachment for reaching

credits belonging to the judgment debtor and owing to him from a
stranger to the litigation. Under the above-cited rule, the garnishee
[the third person] is obliged to deliver the credits, etc. to the proper
officer issuing the writ and "the law exempts from liability the person
60
RCBC VS. JUDGE CASTRO make any payment, for the law mandates that delivery of a check does
not produce the effect of payment until it has been cashed. [Article
FACTS: In Civil Case No. Q-12785 of the Court of First Instance of 1249, Civil Code.]
Rizal, Quezon City Branch IX entitled "Badoc Planters, Inc. versus
Philippine Virginia Tobacco Administration, et al.," which was an action
Moreover, by virtue of the order of garnishment, the same was placed
for recovery of unpaid tobacco deliveries, an Order (Partial Judgment)
in custodia legis and therefore, from that time on, RCBC was holding
was issued on January 15, 1970 by the Hon. Lourdes P. San Diego,
the funds subject to the orders of the court a quo. That the sheriff,
then Presiding Judge, ordering the defendants therein to pay jointly
upon delivery of the check to him by RCBC encashed it and turned
and severally, the plaintiff Badoc Planters, Inc. (hereinafter referred to
over the proceeds thereof to the plaintiff was no longer the concern of
as "BADOC") within 48 hours the aggregate amount of P206,916.76,
RCBC as the responsibility over the garnished funds passed to the
with legal interests thereon.
court. Thus, no breach of trust or dereliction of duty can be attributed
to RCBC in delivering its depositor's funds pursuant to a court order
On January 26,1970, BADOC filed an Urgent Ex-Parte Motion for a Writ which was merely in the exercise of its power of control over such
of Execution of the said Partial Judgment which was granted on the funds.
same day by the herein respondent judge. Accordingly, the Branch
Clerk of Court on the very same day, issued a Writ of Execution
As stated earlier, the order directing the bank to deliver the
addressed to Special Sheriff Faustino Rigor, who then issued a Notice
amount to the sheriff was distinct and separate from the order
of Garnishment addressed to the General Manager and/or Cashier of
directing the sheriff to encash the said check. The bank had no
Rizal Commercial Banking Corporation (hereinafter referred to as
choice but to comply with the order demanding delivery of the
RCBC), the petitioner in this case, requesting a reply within five (5)
garnished amount in check. The very tenor of the order called
days to said garnishment as to any property which the Philippine
for immediate compliance therewith. On the other hand, the
Virginia Tobacco Administration (hereinafter referred to as "PVTA")
bank cannot be held liable for the subsequent encashment of
might have in the possession or control of petitioner or of any debts
the check as this was upon order of the court in the exercise
owing by the petitioner to said defendant. Upon receipt of such Notice,
of its power of control over the funds placed in custodia
RCBC notified PVTA thereof to enable the PVTA to take the necessary
legis by virtue of the garnishment.
steps for the protection of its own interest
Section 8, Rule 57 of the Rules of Court provides:

Upon an Urgent Ex-Parte Motion dated January 27, 1970 filed by
BADOC, the respondent Judge issued an Order granting the Ex-Parte
Motion and directing the herein petitioner "to deliver in check the Effect of attachment of debts and credits.—All persons
amount garnished to Sheriff Faustino Rigor and Sheriff Rigor in turn is having in their possession or under their control any
ordered to cash the check and deliver the amount to the plaintiff's credits or other similar personal property belonging to
representative and/or counsel on record." In compliance with said the party against whom attachment is issued, or owing
Order, petitioner delivered to Sheriff Rigor a certified check in the sum any debts to the same, all the time of service upon them
of P 206,916.76. of a copy of the order of attachment and notice as
provided in the last preceding section, shall be liable to
the applicant for the amount of such credits, debts or
Respondent PVTA filed a Motion for Reconsideration dated February
other property, until the attachment be discharged, or
26,1970 which was granted in an Order dated April 6,1970, setting
any judgment recovered by him be satisfied, unless such
aside the Orders of Execution and of Payment and the Writ of
property be delivered or transferred, or such debts be
Execution and ordering petitioner and BADOC "to restore, jointly and
paid, to the clerk, sheriff or other proper officer of the
severally, the account of PVTA with the said bank in the same
court issuing the attachment.
condition and state it was before the issuance of the aforesaid Orders
by reimbursing the PVTA of the amount of P 206, 916.76 with interests
at the legal rate from January 27, 1970 until fully paid to the account Garnishment is considered as a specie of
of the PVTA attachment for reaching credits belonging to the
judgment debtor and owing to him from a
stranger to the litigation. Under the above-cited
ISSUE 1: Whether or not the respondent Judge correctly ordered the
rule, the garnishee [the third person] is obliged to
herein petitioner to reimburse the amount paid to the Special Sheriff
deliver the credits, etc. to the proper officer
by virtue of the execution issued pursuant to the Order/Partial
issuing the writ and "the law exempts from liability
Judgment dated January 15, 1970.
the person having in his possession or under his
control any credits or other personal property
HELD 1: NO. The petitioner merely obeyed a mandatory directive belonging to the defendant, ..., if such property be
from the respondent Judge dated January 27, 1970, ordering delivered or transferred, ..., to the clerk, sheriff, or
petitioner 94 "to deliver in check the amount garnished to Sheriff other officer of the court in which the action is
Faustino Rigor and Sheriff Rigor is in turn ordered to cash the check pending. [3 Moran, Comments on the Rules of
and deliver the amount to the plaintiffs representative and/or counsel Court 34 (1970 ed.)]
on record."
RCBC cannot therefore be compelled to make restitution solidarily with
ISSUE 2: WON the petitioner can be comepelled to make a resititution
after it already delivered to the sheriff the check the plaintiff BADOC. Plaintiff BADOC alone was responsible for the
issuance of the Writ of Execution and Order of Payment and so, the
HELD 2: NO. It is important to stress, at this juncture, that there was plaintiff alone should bear the consequences of a subsequent
nothing irregular in the delivery of the funds of PVTA by check to the annulment of such court orders; hence, only the plaintiff can be
sheriff, whose custody is equivalent to the custody of the court, he ordered to restore the account of the PVTA.
being a court officer. The order of the court dated January 27, 1970
was composed of two parts, requiring: 1) RCBC to deliver in check the
amount garnished to the designated sheriff and 2) the sheriff in turn to
cash the check and deliver the amount to the plaintiffs representative
and/or counsel on record. It must be noted that in delivering the
garnished amount in check to the sheriff, the RCBC did not thereby
61
MANILA REMNANT CO. VS. CA (a) the party whose accounts have been
garnished has posted a counterbond or has
FACTS: That case involved parcels of land in Quezon City which were made the requisite cash deposit; 5
owned by petitioner MRCI and became the subject of its agreement
with A.U. Valencia and Co., Inc., (AUVCI) by virtue of which the latter
(b) the order was improperly or irregularly
was to act as the petitioner's agent in the development and sale of the
issued 6 as where there is no ground for
property. For a stipulated fee, AUVCI was to convert the lands into a
garnishment 7 or the affidavit and/or bond
subdivision, manage the sale of the lots, execute contracts and issue
filed therefor are defective or insufficient; 8
official receipts to the lot buyers. At the time of the agreement, the
president of both MRCI and AUVCI was Artemio U. Valencia.
(c) the property attached is exempt from
execution, hence exempt from preliminary
Pursuant to the above agreement, AUVCI executed two contracts to
attachment 9 or
sell dated March 3, 1970, covering Lots 1 and 2, Block 17, in favor of
spouses Oscar C. Ventanilla and Carmen Gloria Diaz for the combined
contract price of P66,571.00, payable monthly in ten years. After ten (d) the judgment is rendered against the
days and without the knowledge of the Ventanilla couple, Valencia, as attaching or garnishing creditor. 10
president of MRCI, resold the same parcels to Carlos Crisostomo, one
of his sales agents, without any consideration. Partial execution of the judgment is not included in the above
enumeration of the legal grounds for the discharge of a
On November 21, 1978, the Ventanilla spouses, having learned of the
supposed sale of their lots to Crisostomo, commenced an action for garnishment order. Neither does the petitioner's willingness
specific performance, annulment of deeds, and damages against to reimburse render the garnishment order unnecessary. As
Manila Remnant Co., Inc., A.U. Valencia and Co., Inc., and Carlos for the counterbond, the lower court did not err when it fixed
Crisostomo. the same at P500,000.00. As correctly pointed out by the
respondent court, that amount corresponds to the current fair
On November 17, 1980, the trial court rendered a decision declaring market value of the property in litigation and was a
the contracts to sell in favor of the Ventanillas valid and subsisting,
reasonable basis for determining the amount of the
and annulling the contract to sell in favor of Crisostomo. It ordered the
MRCI to execute an absolute deed of sale in favor of the Ventanillas, counterbond.
free from all liens and encumbrances. This was affirmed by both CA
and SC and became final and executory.
On January 25, 1991, the spouses Ventanilla filed with the trial court a
motion for the issuance of a writ of execution in Civil Case No. 26411.
The writ was issued on May 3, 1991, and served upon MRCI on May 9,
1991.
In a manifestation and motion filed by MRCI with the trial court on

May 24, 1991, the petitioner alleged that the subject properties could
not be delivered to the Ventanillas because they had already been sold
to Samuel Marquez on February 7, 1990, while their petition was
pending in this Court. Nevertheless, MRCI offered to reimburse the
amount paid by the respondents, including legal interest plus the
aforestated damages. MRCI also prayed that its tender of payment be
accepted and all garnishments on their accounts lifted.
The Ventanillas accepted the amount of P210,000.00 as damages and

attorney's fees but opposed the reimbursement offered by MRCI in lieu
of the execution of the absolute deed of sale.
ISSUE: Is partial execution a ground for the discharge of the

attachment?
HELD: NO. While the petitioners have readily complied with the order
of the trial court for the payment of damages to the Ventanillas, they
have, however, refused to execute the absolute deed of sale. It was
for the purpose of ensuring their compliance with this portion of the
judgment that the trial court issued the garnishment order which by its
term could be lifted only upon the filling of a cash bond of
P500,000.00.
The petitioner questions the propriety of this order on the ground that
it has already partially complied with the judgment and that it has
always expressed its willingness to reimburse the amount paid by the
respondents. It says that there is no need for a garnishment order
because it is willing to reimburse the Ventanillas in lieu of execution of
the absolute deed of sale.
A garnishment order shall be lifted if it established that:
62
ABINUJAR VS. CA debtor not exempt from execution, or on a

sufficient amount of such property, if there be
FACTS: On October 10, 1987, petitioners executed a Deed of Sale sufficient, and selling the same, and paying to the
with Right to Repurchase in favor of private respondents, involving a judgment creditor, or his attorney, so much of the
residential house. Due to serious financial and business reverses, proceeds as will satisfy the judgment. Any excess
petitioners were not able to redeem the property within four months in the proceeds over the judgment and accruing
as agreed upon. costs must be delivered to the judgment debtor,
unless otherwise directed by the judgment or
order of the court. When there is more property of
On October 24, 1989, private respondents filed a complaint for
the judgment debtor than is sufficient to satisfy
ejectment in the Metropolitan Trial Court of the City of Manila,
the judgment and accruing costs, within the view
docketed as Civil Case No. 130352-CV against petitioners.
of the officer, he must levy only on such part of
the property as is amply sufficient to satisfy the
On December 27, 1989, the parties, assisted by their counsels, judgment and costs.
executed a compromise agreement. In an order dated March 15, 1990,
the Metropolitan Trial Court approved the compromise agreement. The
Real property, stocks, shares, debts, credits, and
order reproduced the agreement as follows:
other personal property, or any interest in either
real or personal property, may be levied on in like
1. That defendants [petitioners herein] agree to pay plaintiffs manner and with like effect as under a writ of
[private respondents herein] in the amounts and on the dates attachment.
specifically indicated herein below:
On the other hand, Section 13, Rule 39 provides:
XXX
How execution for the delivery or restitution of property enforced. —
2. That failure on the part of the defendants to pay three (3) The officer must enforce an execution for the delivery or restitution of
consecutive payments, plaintiffs will be entitled to a writ of property by ousting therefrom the person against whom the judgment
execution, unless the parties agree to extend the period of
is rendered and placing the judgment creditor in possession of such
entitlement to a writ of execution in writing to be submitted
and/or approved by this Honorable Court property, and by levying as hereinafter provided upon so much of the
property of the judgment debtor as will satisfy the amount of the
judgment and costs included in the writ of execution.
On April 15, 1990, private respondents filed a motion for execution on
the ground that petitioners failed to pay the first three installments
stipulated in the compromise agreement
ISSUE: Is a compromise agreement a ground for the discharge of the

attachment?
HELD: NO. As a contract, a compromise agreement is perfected by

mutual consent (Rovero v. Amparo, 91 Phil. 228 [1952]). A judicial
compromise, however, while binding between the parties upon its
execution, is not executory until it is approved by the court and
reduced to a judgment.
Article 2037 of the Civil Code of the Philippines provides:
A compromise has upon the parties the effect and

authority of res judicata; but there shall be no
execution except in compliance with a judicial
compromise.
The non-fulfillment of the terms and conditions of a

compromise agreement approved by the court justifies
execution thereof and the issuance of the writ for said
purpose is the court's ministerial duty enforceable
by mandamus
As petitioners' obligation under the compromise agreement as

approved by the court was monetary in nature, private respondents
can avail only of the writ of execution provided in Section 15, Rule 39
of the Revised Rules of Court, and not that provided in Section 13.
Section 15, Rule 39 provides:
Execution of money judgments. — The officer

must enforce an execution of a money judgment
by levying on all the property, real and personal of
every name and nature whatsoever, and which
may be disposed of for value, of the judgment
63
PHILIPPINE NATIONAL BANK VS. OLUTANGA

HELD: NO. The general rule is that, where attached properties
FACTS: In civil case entitled the Bank of the Philippine Islands, belonging to the principal debtor are taken out of the hands of a
plaintiff and appellee, vs. Olutanga Lumber Company, defendant and person by legal process, after he had been notified of the order of
appellant, G. R. No. 27045,1 said plaintiff and appellee was ordered by attachment, said person cannot be made to answer for the properties
this court to pay to the aforesaid defendant and appellant a certain in a proceeding to carry out said attachment.
sum amounting to P31,242.11, Philippine currency. Upon the return of
the case to the Court of First Instance of Zamboanga, the
In the present case, the fact that the funds attached in the possession
corresponding writ of execution was issued, which was complied with
of the Bank of the Philippine Islands, belonging to the Olutanga
by the sheriff of said province by presenting it to the manager of the
Lumber Company, had been deposited with the sheriff of the City of
branch of the Bank of the Philippine Islands in the City of
Manila by order of said officer, does not change the juridical situation
Zamboanga, on January 10, 1928, but without levying execution on
of said funds as attached in the possession of the Bank of the Philipine
any property belonging to the execution debtor. On the same date, the
Islands, and, according to the above-quoted rule, the aforesaid Bank
aforesaid sheriff addressed to the central office of said bank at Manila
of the Philippine Islands, having been judicially compelled to pay the
the following telegram:
amount of the judgment represented by said funds to the Olutanga
Lumber Company, after having employed all the legal means to avoid
Execution Bank Philippine Islands versus Olutanga Lumber Company it, is released from all responsibility to the Philippine National Bank in
served today manager Zamboanga branch. Please authorize him pay whose favor the writ of attachment was issued.
amount due defendant Olutanga Lumber plus sheriff fees otherwise
levy will be made on your Zamboaga office.
For the foregoing considerations, we are of the opinion, and so hold,
The central office of the Bank of the Philippine Islands in Manila was that when a person has funds in his possession belonging to a debtor,
notified by the sheriff of the City of Manila that all the credits and and said funds are attached by a creditor of the latter, said person is
debts contracted by it with the Olutanga Lumber Company, amounting relieved from all responsibility to said creditor if he is judicially
to P16,656.30, plus the interest at the rate of 12 per cent per annum compelled to deliver said funds to the aforesaid debtor.
from April 19, 1922 until fully paid, were levied upon in the name of
the Philippine National Rank by virtue of a writ of attachment issued in
civil case No. 32936 of the Court of First Instance of Manila.
On the same date, January 11, 1928, the sheriff of the City of Manila
sent a letter to the Bank of the Philippine Islands at Manila, requiring
the latter to deliver to him the sum of P32,109,45, theretofore
attached, belonging to the Olutanga Lumber Company.
After the delivery to the sheriff of the City of Manila of the amount of
the judgment in favor of the Olutanga Lumber Company, rendered in
civil case No. 1176 of the Court of First Instance of Zamboanga, G. R.
No. 27045 of this court, the Bank of the Philippine Islands notified the
provincial sheriff of Zamboanga by telegram, on January 12, 1928,
that the amount of the judgment in favor of the Olutanga Lumber
Company against said bank had been delivered to the sheriff of the
City of Manila, and that any question on that subject should be taken
up with him.
On January 14, 1928, the sheriff of the City of Manila sent a telegram
to the sheriff of the Province of Zamboanga, telling him that the
amount of the judgment against the Bank of the Philippine Islands and
in favor of the Olutanga Lumber Company, which had been attached
by virtue of two writs of attachment issued by the Philippine National
Bank and the Standard Oil company of New York against the Olutanga
Lumber Company, had been deposited with him by said Bank of the
Philippine Islands.
Notwithstanding the fact that the provincial sheriff of Zamboanga had

been duly informed of the levy made by the sheriff of the City of
Manila upon the funds of the Olutanga Lumber Company in possession
of the herein appellee, the Bank of the Philippine Islands, and of the
delivery of said funds to said judicial officer of the City of Manila, he
attempted to collect from the branch of said Bank of the Philippine
Islands at Zamboanga the amount of the judgment in favor of the
Olutanga Lumber Company, threatening to levy, and in fact did levy,
an attachment against said branch.
ISSUE: Supposing in a case of a bank, a writ of garnishment

had already been satisfied by another branch office other than
the one stated in the writ, can the garnishment still be
enforced against the garnishee because it was a different
branch that paid or complied with the order?
64
PERLA COMPANIA DE SEGUROS, INC. VS REMOLETE by the officer executing the order in the following
manner:
FACTS: In the afternoon of 1 June 1976, a Cimarron PUJ owned and
registered in the name of Nelia Enriquez, and driven by Cosme Casas,
xxx xxx xxx
was travelling from Cebu City to Danao City. While passing through
Liloan, Cebu, the Cimarron PUJ collided with a private jeep owned by
the late Calixto Palmes (husband of private respondent Primitiva (e) Debts and credits, and other personal property
Palmes) who was then driving the private jeep. not capable of manual delivery, by leaving with
the person owing such debts, or having his
On 25 June 1976, private respondents Primitiva Palmes (widow of possession or under his control such credits or
Calixto Palmes) and Honorato Borbon, Sr. (father of minor Adeudatus other personal property, or with his agent, a copy
Borbon) filed a complaint 5 against Cosme Casas and Nelia Enriquez of the order, and notice that the debts owing by
(assisted by her husband Leonardo Enriquez) before the then Court of him to the party against whom attachment is
First Instance of Cebu, Branch 3, claiming actual, moral, nominal and issued, and the credits and other personal
exemplary damages as a result of the accident. property in his possession, or under his control,
belonging to said party, are attached in pursuance
of such order;
On 4 April 1977, the Court of First Instance rendered a Decision 6 in
favor of private respondent Primitiva Palmes
Through service of the writ of garnishment, the garnishee becomes a
The judgment of the trial court became final and executory and a writ "virtual party" to, or a "forced intervenor" in, the case and the trial
of execution was thereafter issued. The writ of execution was, court thereby acquires jurisdiction to bind him to compliance with all
however, returned unsatisfied. Consequently, the judgment debtor orders and processes of the trial court with a view to the complete
Nelia Enriquez was summoned before the trial court for examination satisfaction of the judgment of the court
on 23 July 1979. She declared under oath that the Cimarron PUJ
registered in her name was covered by a third-party liability insurance ISSUE 2: Petitioner also contends that in order that it may be held
policy issued by petitioner Perla. liable under the third-party liability insurance, a separate action should
have been commenced by private respondents to establish petitioner's
liability.
Thus, on 31 July 1979, private respondent Palmes filed a motion for
garnishment 7 praying that an order of garnishment be issued against
HELD 2: The Court held that a separate action needs to be
the insurance policy issued by petitioner in favor of the judgment
commenced when the garnishee "claims an interest in the property
debtor.
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
In this Petition, petitioner Perla reiterates its contention that its
indeed issued a third-party liability insurance policy in favor of the
insurance contract cannot be subjected to garnishment or execution to
judgment debtor. Petitioner moreover refrained from setting up any
satisfy the judgment in Civil Case No. R-15391 because petitioner was
substantive defense which it might have against the insured-judgment
not a party to the case and the trial court did not acquire jurisdiction
debtor. The only ground asserted by petitioner in its "Motion for
over petitioner's person.
Reconsideration of the Order dated August 6, 1979 and to Quash
Notice of Garnishment" was lack of jurisdiction of the trial court for
ISSUE: WON the garnishee has to be impleaded as a party to the
failure to implead it in the case by serving it with summons.
case?
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
HELD: NO. Garnishment has been defined as a species of attachment
against Perla: a writ of garnishment suffices to hold petitioner
for reaching any property or credits pertaining or payable to a
answerable to the judgment creditor.
judgment debtor. 13 In legal contemplation, it is a forced novation by
the substitution of creditors: 14the 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. 15
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.
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.
Rule 57, Section 7(e) in turn reads:
Sec. 7. Attachment of real and personal property;

recording thereof. — Properties shall be attached
65
CONSOLIDATED BANK AND TRUST CORPORATION VS. IAC It has been held that "an attaching creditor may succeed to the
incidental rights to which the debtor was entitled by reason of his
FACTS: Originally, petitioner Consolidated Bank and Trust Corporation ownership of the property, as for example, a right to redeem from a
(SOLIDBANK) loaned private respondent NICOS Industrial Corporation prior mortgage."
(NICOS) sums of money in the total amount of FOUR MILLION
SEVENTY SIX THOUSAND FIVE HUNDRED EIGHTEEN AND 64/100
The fact that respondent NICOS executed a waiver of right of
PESOS (P4,076,518.64).
redemption in favor of respondent GOLDEN STAR on October 5, 1983
is of no moment as by that time it had no more right which it may
Subsequently, NICOS failed to pay back the loan prompting
waive in favor of another.
SOLIDBANK to file a collection case before the Court of First Instance
of Manila, Branch XXIX. The case was docketed as Civil Case No. 82-
11611.
On August 30, 1982, the court in the aforecited case issued an order
of attachment " ... upon the rights, interests and participation of which
defendants NICOS Industrial Corporation ... may have in Transfer
Certificate of Title No. T-210581 (T-32.505 M) and Transfer Certificate
of Title No. T-10580 (T-32.504 M).
On September 1, 1982, pursuant to the writ of attachment issued by

the Court and upon petitioner's posting of sufficient bond, the Sheriff
of Manila levied and attached the two real properties described by the
foregoing order of attachment, including the buildings and other
improvements thereon. Afterwards, the Sheriff sent separate Notices
of Levy Upon Realty to the Registrar of Deeds of Malolos, Bulacan,
dated September 1, 1982 requesting him "to make the proper
annotation in the books of your office" by virtue of the order of
attachment dated August 30,1982 issued by the Manila Court in Civil
Case No. 82-11611.
Accordingly, on September 7, 1982, the Registrar of Deeds of Malolos,

Bulacan, pursuant to the request of the Manila Sheriff, inscribed and
annotated the Notices of Levy Upon Real Property at the back of
Transfer Certificates of Title Nos. T-210581 (T-32.505 M) and T-
210580 (T-32.504 M).
A year later, however, on July 11, 1983, the attached properties which
had been mortgaged by NICOS to the United Coconut Planters Bank
(UCPB) on March 11, 1982, were extrajudicially foreclosed by the
latter. As the highest bidder therein, a certificate of sale was issued to
it by the Sheriff of Bulacan over the subject realties including the
buildings and improvements thereon.
Barely a month later, on October 5, 1983, respondent NICOS, though

fully aware that it still had the right to redeem the auctioned properties
within the one year period of redemption from July 11, 1983, suddenly
executed a document entitled "Waiver of Right of Redemption" in favor
of respondent GOLDEN STAR.
On November 21, 1983, petitioner SOLIDBANK, on the strength of its

prior attachment over the lands in question filed with the Malolos court
an omnibus motion to annul the writ of possession issued to GOLDEN
STAR
ISSUE: whether or not an attaching creditor acquires the right of

redemption of a debtor over the attached properties of the latter which
are subsequently extrajudicially foreclosed by third parties.
HELD: YES. It follows that the petitioner has acquired by operation of

law the right of redemption over the foreclosed properties pursuant to
Sec. 6 of Act No. 3135, to wit:
In all such cases in which an extrajudicial sale is

made ... any person having a lien on the property
subsequent to the mortgage ... may redeem the
same at any time within the term of one year from
and after the date of sale.
66
BF HOMES INC VS. CA Under the Rules of Court, a writ of attachment may be dissolved only
upon the filing of a counter-bond or upon proof of its improper or
FACTS: BF Homes, Inc. is a domestic corporation previously engaged irregular issuance. Neither ground has been established in the case at
in the business of developing and selling residential lots and houses bar to warrant the discharge of the writ. No counter-bond has been
and other related realty matters. given. As for the contention that the writ was improperly issued for
lack of notice to BF on the application for the writ, it suffices to
cite Mindanao Savings & Loan Association, Inc.v. Court of Appeals,
On July 19, 1984, BF contracted a loan from Rosalinda R. Roa and
where we held: 7
Vicente Mendoza in the amount of P250,000.00 with interest at the
rate of 33% per annum payable after 32 days. The obligation was
embodied in a promissory note and secured by two post-dated checks The only requisites for the issuance of a writ of
issued by BF in favor of the lenders. preliminary attachment under Section 3, Rule 57
of the Rules of Court are the affidavit and bond of
the applicant.
On September 25, 1984, BF filed a Petition for Rehabilitation and for a
Declaration in a State of Suspension of Payments under Sec. 5(d) of
P.D. No. 902-A with a prayer that upon the filing of the petition and in
the meantime, all claims against it for any and all accounts or
indebtedness be suspended, but allowing petitioner to continue with its
normal operations. It also asked for the approval of the proposed
rehabilitation plan.
On October 17, 1984, Roa and Mendoza filed a complaint against BF

with the Regional Trial Court of Quezon City, docketed as Civil Case
No. Q-43104, for the recovery of the loan of P250,000.00, with interest
and attorney's fees. The complaint also prayed for the issuance of a
writ of preliminary attachment against the properties of BF.
October 22, 1984, the trial court issued the writ against properties of
BF sufficient to satisfy the principal claim in the amount of
P257,333.33.
In a motion dated October 25, 1984, BF moved for the dismissal of the
case for lack of jurisdiction, or at least for its suspension in view of the
pendency of SEC Case No. 002693. it also asked for the lifting of the
writ of preliminary attachment.
ISSUE: Will the appointment of a rehabilitation receiver

defeat a prior attachment which was made on record?
HELD: NO. 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.
If there is an attachment or sequestration of the goods or estate of the

defendant in an action which is removed to a bankruptcy court, such
an attachment or sequestration will continue in existence and hold the
goods or estate to answer the final judgment or decree in the same
manner as they would have been held to answer the final judgment or
decree rendered by the Court from which the action was removed,
unless the attachment or sequestration is invalidated under applicable
law.
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.
67
REPUBLIC OF THE PHIL. VS. SALUDARES The holding in Peña which confers exclusive jurisdiction on the
Sandiganbayan in sequestration cases cannot also be relied upon by
FACTS: The facts on record show that on April 2, 1986, the PCGG petitioner in this case. We hold that the Regional Trial Court has
issued a writ of sequestration. The writ of sequestration was based on jurisdiction over the complaint for payment of money allegedly averred
the ground that the shares of stocks in LBLC owned by Peter A. Sabido by LBLC to private respondent.
formed part of "illegally acquired wealth." On July 27, 1987, the
Republic of the Philippines through the PCGG and the Office of the
ISSUE 2: whether or not the provisional remedy of attachment issued
Solicitor General filed before the Sandiganbayan a complaint[3] for
by the trial court in favor of the private respondent is valid.
reconveyance, reversion, accounting, restitution and damages against,
among others, Peter A. Sabido.
HELD 2: In our view, the disputed properties of LBLC were already
under custodia legis by virtue of a valid writ of
In the meantime, on February 11, 1993, private respondent Hung Ming
sequestration[15] issued by the PCGG on April 2, 1986, when
Kuk filed a complaint[5] for sum of money against LBLC, with a prayer
respondent Judge Saludares issued the assailed writ of attachment in
for a writ of preliminary attachment, with the Regional Trial Court,
favor of private respondent Hung Ming Kuk. At that time the writ of
Branch 28, of Lianga, Surigao del Sur. The PCGG was not impleaded
sequestration issued by PCGG against LBLC was subsisting. Said writ of
by Hung Ming Kuk as party-defendant nor was the sequestration case
the PCGG could not be interfered with by the RTC of Lianga, because
referred to the RTC's proceedings.
the PCGG is a coordinate and co-equal body. The PCGG had acquired
by operation of law the right of redemption over the property until
On February 17, 1993, the trial court granted the writ of preliminary after the final determination of the case or until its dissolution.
attachment in favor of Hung Ming Kuk.
In BASECO vs. PCGG, 150 SCRA 181, 182 (1987), sequestration is
In the meantime, on January 23, 1995, the Supreme Court en defined as the process, which may be employed as a conservatory writ
banc issued its decision in the consolidated cases of Republic vs. whenever the right of the property is involved, to preserve, pending
Sandiganbayan (First Division), 240 SCRA 376 (1995). The decision litigation, specific property subject to conflicting claims of ownership or
included the nullification of the resolution of the Sandiganbayan that liens and privileges.[11]
lifted the writ of sequestration of LBLC properties in G.R. No. 109314.
Hence, the Court effectively confirmed the validity of the writ of
The Court also noted the relationship between attachment and
sequestration over said properties.
receivership, on one hand, and sequestration, freeze order and
provisional takeover on the other. The latter there are ancillary
Petitioner contends that the RTC of Lianga has no jurisdiction over the remedies in prosecuting the ill-gotten wealth of the previous Marcos
subject matter of the case inasmuch as the same are under regime. The Court observed that sequestration, freezing and
sequestration by the PCGG. Citing Baseco vs. PCGG, 150SCRA 181 provisional takeover are akin to the provisional remedy of preliminary
(1987), petitioner asserts that the sequestered assets have been attachment or receivership.
placed under custodia legis of the PCGG pending the final
determination by the Sandiganbayan that said assets are in fact ill-
By an order of attachment, a sheriff seizes property of a defendant in
gotten. Hence, the RTC has no jurisdiction to order the attachment of
a civil suit so that it may stand as security for the satisfaction of any
said sequestered properties.
judgment that may be obtained, and not disposed of, or dissipated, or
lost intentionally, or otherwise, pending the action.[12] When a writ of
Private respondent further claims that the attachment order of the trial attachment has been levied on real property or any interest therein
court was issued after the Sandiganbayan had lifted the writ of belonging to the judgment debtor, the levy creates a lien which
sequestration against LBLC. But petitioner asserts that this order of the nothing can destroy but its dissolution.[13] This well-settled rule is
Sandiganbayan was reversed by the Supreme Court in likewise applicable to a writ of sequestration.
a banc decision[8] dated January 23, 1995, resolving several
consolidated cases for which G.R. No. 109314 was included. Petitioner
stresses that said reversal had become final and executory on April 22,
1997.
ISSUE: WHETHER, THE TRIAL COURT FAULTED IN DECIDING THE

CLAIM OF PRIVATE RESPONDENT WHICH INVOLVED THE
PROPERTIES OF LIANGA BAY LOGGING CO. INC.
HELD: the case now before us concerns receivables of the private

respondent arising out of a legitimate business contract to supply
goods and services in favor of LBLC. When a collection suit was filed
against LBLC by its supplier, Hung Ming Kuk, evidently PCGG could not
be the proper party to defend against such claim. More so, because
when PCGG had not taken over the LBLC's business
operations. Sppedscâ
We note that PCGG is not an owner but a conservator. It can exercise

only powers of administration over property sequestered, frozen or
provisionally taken over. Even resort to the provisional remedies
should entail the least possible interference with business operations
or activities so that, in the event that the accusation that the business
enterprise is "ill-gotten" be not proven, it may be returned to its
rightful owner as far as possible in the same condition as it was at the
time of sequestration.[9]
68
SECTION 12 As may be noted, the amount of the counter-attachment bond is,

under the terms of the aforequoted Section 12, to be measured
INSULAR SAVINGS BANK VS. CA June 15, 2005 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. Albeit not explicitly stated in the same
FACTS: On December 11, 1991, respondent Bank [Far East Bank and
section and without necessarily diminishing the sound discretion of the
Trust Company] instituted Arbitration Case No. 91-069 against
issuing judge on matters of bond approval, there can be no serious
petitioner [Insular Savings Bank] before the Arbitration Committee of
objection, in turn, to the proposition that the attached property - and
the Philippine Clearing House Corporation [PCHC]. The dispute
logically the counter-bond necessary to discharge the lien on such
between the parties involved three [unfunded] checks with a total
property - should as much as possible correspond in value to, or
value ofP25,200,000.00. The checks were drawn against respondent
approximately match the attaching creditor‘s principal claim. Else,
Bank and were presented by petitioner for clearing. As respondent
excessive attachment, which ought to be avoided at all times, shall
Bank returned the checks beyond the reglementary period, [but after
ensue.
petitioner‘s account with PCHC was credited with the amount of
P25,200,000.00] petitioner refused to refund the money to respondent
"The sheriff is required to attach only so much of the property of the
Bank.
party against whom the order is issued as may be sufficient to satisfy
the applicant‟s demand, the amount of which is stated in the
While the dispute was pending arbitration, on January 17, 1992,
order, unless a deposit is made or a counter-bond is given
respondent Bank instituted Civil Case No. 92-145 in the Regional
equal to said amount. However, if the value of the property to be
Trial Court of Makati and prayed for the issuance of a writ of
attached is less than the amount of the demand, the amount of the
preliminary attachment. On January 22, 1992, Branch 133 of the
applicant‘s bond may be equal to the value of said property, and the
Regional Trial Court of Makati issued an Order granting the application
amount of the adverse party‟s deposit or counter-bond may be
for preliminary attachment upon posting by respondent Bank of an
equal to the applicant‟s bond. The writ of preliminary attachment
attachment bond in the amount of P6,000,000.00. On January 27,
is issued upon approval of the requisite bond".
1992, Branch 133 of the Regional Trial Court of Makati issued a writ of
preliminary attachment for the amount of P25,200,000.00.
As things stood, therefore, respondent‟s principal claim
against petitioner immediately prior to the filing of the motion
During the hearing on February 11, 1992 before the Arbitration
to discharge attachment has effectively been pruned down
Committee of the Philippine Clearing House Corporation, petitioner and
to P12,600,000.00. The trial court was fully aware of this
respondent Bank agreed to temporarily divide between them the
reality. Accordingly, it should have allowed a total discharge
disputed amount of P25,200,000.00 while the dispute has not yet been
of the attachment on a counter-bond based on the reduced
resolved. As a result, the sum ofP12,600,000.00 is in the possession of
claim of respondent. If a portion of the claim is already
respondent Bank. On March 9, 1994, petitioner filed a motion to
secured, we see no justifiable reason why such portion should
discharge attachment by counter-bond in the amount
still be subject of counter-bond. It may be that a counter-
of P12,600,000.00. On June 13, 1994, respondent Judge issued
bond is intended to secure the payment of any judgment that
the first assailed order denying the motion. On June 27, 1994,
the attaching party may recover in the main action. Simple
petitioner filed a motion for reconsideration which was denied
common sense, if not consideration of fair play, however,
in the second assailed order dated July 20, 1994"
dictates that a part of a possible judgment that has veritably
been preemptively satisfied or secured need not be covered by
Petitioner argues that the starting point in computing the amount of
the counter-bond.
counter-bond is the amount of the respondent‘s demand or claim only,
in this case P25,200,000.00, excluding contingent expenses and
unliquidated amount of damages. And since there was a mutual With the view we take of this case, the trial court, in requiring
agreement between the parties to temporarily, but equally, divide petitioner to post a counter-bond in the amount
between themselves the said amount pending and subject to the final ofP27,237,700.00, obviously glossed over one certain
outcome of the arbitration, the amount of P12,600,000.00 should, so fundamental. We refer to the fact that the attachment
petitioner argues, be the basis for computing the amount of the respondent applied for and the corresponding writ issued was
counter-bond. only for the amount of P25.2 Million. Respondent, it bears to
stress, did not pray for attachment on its other claims,
contingent and unliquidated as they were. Then, too, the
ISSUE: What should be the basis for computing the amount of the
attaching writ rightly excluded such claims. While the records
counterbond?
do not indicate, let alone provide a clear answer as to the
actual value of the property levied upon, it may reasonably be
HELD: 12.6M. The then pertinent provision of Rule 57 (Preliminary
assumed that it is equal to respondent‟s principal claim. Be
Attachment) of the Rules of Court under which the appellate court
that as it may, it was simply unjust for the trial court to base
issued its assailed decision and resolution, provides as follows:
the amount of the counter-bond on a figure beyond
the P25,200,000.00 threshold, as later reduced
"SEC. 12. Discharge of attachment upon giving counter-bond. – At any to P12,600,200.00.
time after an order of attachment has been granted, the party whose
property has been attached, . . . may upon reasonable notice to the
The trial court, therefore, committed grave abuse of discretion when it
applicant, apply to the judge who granted the order or to the judge of
the court which the action is pending, for an order discharging the denied petitioner‘s motion to discharge attachment by counter-bond in
attachment wholly or in part on the security given. The judge shall, the amount of P12,600,000.00, an amount more than double the
after hearing, order the discharge of the attachment if a cash deposit attachment bond required of, and given by, respondent.
is made, or a counter-bond executed to the attaching creditor is filed,
on behalf of the adverse party, with the clerk or judge of the court NOTE: The case was filed in 1992. The OLD RULES was
where the application is made in an amount equal to the value of applied. Take note of the change in the present Rules as to the
the property attached as determined by the judge, to secure
basis of computing the amount of counterbond 
the payment of any judgment that the attaching creditor may
recover in the action. x x x . 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 party
may apply for a new order of attachment"4 (Emphasis supplied).4
69
The filing of the counter-bond will serve the purpose of preserving the
KO GLASS CO. INC. VS. VALENZUELA defendant's property and at the same time give the plaintiff security
for any judgment that may be obtained against the defendant. 15
FACTS: On October 6, 1977, an action was instituted in the Court of
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. 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. 1
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.
On June 19, 1978, 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, 7 but, the respondent Judge did not
order the release of the money deposited.
ISSUE: WON the judge should release the same amount deposited
with the Clerk.
HELD: YES. 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.
70
SECURITY PACIFIC ASSURANCE CORP. VS. TRIA-INFANTE files a counter-bond executed to the attaching party with the clerk of
the court where the application is made, in an amount equal to that
FACTS: On 26 August 1988, Reynaldo Anzures instituted a complaint fixed by the court in the order of attachment, exclusive of costs. But if
against Teresita Villaluz (Villaluz) for violation of Batas Pambansa Blg. the attachment is sought to be discharged with respect to a particular
22. The criminal information was brought before the Regional Trial property, the counter-bond shall be equal to the value of that property
Court, City of Manila. as determined by the court. In either case, the cash deposit or the
counter-bond shall secure the payment of any judgment that the
An Ex-Parte Motion for Preliminary Attachment3 dated 06 March 1989 attaching party may recover in the action. A notice of the deposit shall
was filed by Reynaldo Anzures praying that pending the hearing on the forthwith be served on the attaching party. Upon the discharge of an
merits of the case, a Writ of Preliminary Attachment be issued ordering attachment in accordance with the provisions of this section, the
the sheriff to attach the properties of Villaluz in accordance with the property attached, or the proceeds of any sale thereof, shall be
Rules. delivered to the party making the deposit or giving the counter-bond,
or to the person appearing on his behalf, the deposit or counter-bond
aforesaid standing in place of the property so released. Should such
An attachment bond in the amount of P2,123,400.00 was thereafter
counter-bond for any reason be found to be or become insufficient,
posted by Reynaldo Anzures and approved by the court. Thereafter,
and the party furnishing the same fail to file an additional counter-
the sheriff attached certain properties of Villaluz, which were duly
bond, the attaching party may apply for a new order of attachment.
annotated on the corresponding certificates of title.
It should be noted that in G.R. No. 106214, per our Resolution dated
On 25 May 1990, the trial court rendered a Decision6 on the case
15 January 1997,44 we permitted Villaluz to file a counter-attachment
acquitting Villaluz of the crime charged, but held her civilly liable.
bond. On 17 February 1997,45 we required the private respondents to
comment on the sufficiency of the counter-bond posted by Villaluz.
The case was elevated to the Supreme Court (G.R. No. 106214), and
during its pendency, Villaluz posted a counter-bond in the amount
of P2,500,000.00 issued by petitioner Security Pacific Assurance It is quite palpable that the necessary steps in the discharge of an
Corporation.9Villaluz, on the same date10 of the counter-bond, filed an attachment upon giving counter-bond have been taken. To require a
Urgent Motion to Discharge Attachment. SC affirmed Villaluz‘s civil specific order for the discharge of the attachment when this Court, in
liability. our decision in G.R. No. 106214, had already declared that the
petitioner is solidarily bound with Villaluz would be mere surplusage.
Petitioner seeks to escape liability by contending, in the main, that the Thus:
writ of attachment which was earlier issued against the real properties
of Villaluz was not discharged. Since the writ was not discharged, then
During the pendency of this petition, a counter-attachment bond was
its liability did not accrue. The alleged failure of this Court in G.R. No.
filed by petitioner Villaluz before this Court to discharge the
106214 to approve the counter-bond and to cause the discharge of the
attachment earlier issued by the trial court. Said bond amounting to
attachment against Villaluz prevented the happening of a condition
P2.5 million was furnished by Security Pacific Assurance, Corp. which
upon which the counter-bond‘s issuance was premised, such that
agreed to bind itself "jointly and severally" with petitioner for "any
petitioner should not be held liable thereon.
judgment" that may be recovered by private respondent against the
former.46
Petitioner further asserts that the agreement between it and Villaluz is
not a suretyship agreement in the sense that petitioner has become an
additional debtor in relation to private respondents. It is merely We are not unmindful of our ruling in the case of Belisle Investment
waiving its right of excussion32 that would ordinarily apply to counter- and Finance Co., Inc. v. State Investment House, Inc.,47 where we
bond guarantors as originally contemplated in Section 12, Rule 57 of held:
the 1997 Rules.
. . . [T]he Court of Appeals correctly ruled that the mere posting of a
In their Comment,33 the private respondents assert that the filing of counterbond does not automatically discharge the writ of attachment.
the counter-bond by Villaluz had already ipso facto discharged the It is only after hearing and after the judge has ordered the discharge
attachment on the properties and made the petitioner liable on the of the attachment if a cash deposit is made or a counterbond is
bond. executed to the attaching creditor is filed, that the writ of attachment
is properly discharged under Section 12, Rule 57 of the Rules of Court.
ISSUE: WON the posting of a counterbond ipso facto discharges the
attachment The ruling in Belisle, at first glance, would suggest an error in
the assailed ruling of the Court of Appeals because there was
HELD: AS A GENERAL RULE, NO. However, in this case, Petitioner‘s no specific resolution discharging the attachment and
argument that the mere filing of a counter-bond in this case cannot approving the counter-bond. As above-explained, however,
automatically discharge the attachment without first an order of
consideration of our decision in G.R. No. 106214 in its entirety
discharge and approval of the bond, is lame.
will readily show that this Court has virtually discharged the
attachment after all the parties therein have been heard on
Under the Rules, there are two (2) ways to secure the discharge of an
the matter.
attachment. First, the party whose property has been attached or a
person appearing on his behalf may post a security. Second, said party
may show that the order of attachment was improperly or irregularly
issued.42 The first applies in the instant case. Section 12, Rule
57,43 provides:
SEC. 12. Discharge of attachment upon giving counter-bond. – After a

writ of attachment has been enforced, the party whose property has
been attached, or the person appearing on his behalf, may move for
the discharge of the attachment wholly or in part on the security
given. The court shall, after due notice and hearing, order the
discharge of the attachment if the movant makes a cash deposit, or
71
CALDERON VS. IAC counterbond is a speedier way of discharging the attachment

FACTS: On November 2, 1976, petitioner Calderon purchased from of the other way, which, in most instances like in the present
GEORGE SCHULZE, GEORGE SCHULZE, JR., ANTONIO C. AMOR, case, would require presentation of evidence in a full-blown
MANUEL A. MOZO, and VICTOR M. NALUZ (the private trial on the merits and cannot easily be settled in a pending
respondents) the following: the Luzon Brokerage Corporation (LBC for incident of the case.
brevity) and its five (5) affiliate companies, namely, Luzon Air Freight,
Inc., Luzon Port Terminals Services, Inc., Luzon (GS) Warehousing
ISSUE 2: Does the filing of the counterbond render the attachment
Corporation, GS Industrial Management Corporation, and GS Luzon
bond void?
Trucking Corporation. Twenty one (21) days thereafter or on
November 23, 1976, the Bureau of Customs suspended the operations
of LBC for failure to pay the amount of P1,475,840.00 representing HELD 2: NO. While Section 12, Rule 57 of the Rules of Court provides
customs taxes and duties incurred prior to the execution of the sale. In that upon the filing of a counterbond, the attachment is discharged or
order to lift the suspension Calderon paid the sum of P606,430.00 to dissolved, nowhere is it provided that the attachment bond is rendered
the Bureau of Customs. void and ineffective upon the filing of counterbond.
On October 27, 1977, 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.
On November 17, 1977, 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.
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.
ISSUE 1: Is the liability of the attachment bond waived when

the adverse party posts a counterbond?
HELD 1: NO. 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.

defect in the issuance of the attachment writ by simply
availing himself of one way of discharging the attachment
72
METRO INC VS. LARA‟S GIFT & DECOR
FACTS: (SEE OTHER FACTS IN THE PREVIOUS DIGEST) Petitioners

contend that the writ of attachment was improperly issued because
respondents‘ amended complaint failed to allege specific acts or
circumstances constitutive of fraud. Petitioners insist that the
improperly issued writ of attachment may be discharged without the
necessity of filing a counter-bond. Petitioners also argue that
respondents failed to show that the writ of attachment was issued
upon a ground which is at the same time also respondents‘ cause of
action. Petitioners maintain that respondents‘ amended complaint was
not an action based on fraud but was a simple case for collection of
sum of money plus damages.
On the other hand, respondents argue that the Court of Appeals

did not err in ruling that the writ of attachment can only be discharged
by filing a counter-bond. According to respondents, petitioners cannot
avail of Section 13,[13] Rule 57 of the Rules of Court to have the
attachment set aside because the ground for the issuance of the writ
of attachment is also the basis of respondents‘ amended
complaint. Respondents assert that the amended complaint is a
complaint for damages for the breach of obligation and acts of fraud
committed by petitioners.
ISSUE: whether the writ of attachment issued by the trial court was
improperly issued such that it may be discharged without the filing of a
counter-bond.
HELD: NO. We rule that respondents‘ allegation that petitioners

undertook to sell exclusively and only through JRP/LGD for Target
Stores Corporation but that petitioners transacted directly with
respondents‘ foreign buyer is sufficient allegation of fraud to support
their application for a writ of preliminary attachment. Since the writ
of preliminary attachment was properly issued, the only way it
can be dissolved is by filing a counter-bond in accordance with
Section 12, Rule 57 of the Rules of Court.
Moreover, the reliance of the Court of Appeals in the cases

of Chuidian v. Sandiganbayan, FCY Construction Group, Inc. v. Court
of Appeals, and Liberty Insurance Corporation v. Court of Appeals is
proper. The rule that ―when the writ of attachment is issued upon a
ground which is at the same time the applicant‘s cause of action, the
only other way the writ can be lifted or dissolved is by a counter-bond‖
is applicable in this case. It is clear that in respondents‘ amended
complaint of fraud is not only alleged as a ground for the issuance of
the writ of preliminary attachment, but it is also the core of
respondents‘ complaint. The fear of the Court of Appeals that
petitioners could force a trial on the merits of the case on the strength
of a mere motion to dissolve the attachment has a basis.
73
SECTION 13 attachment on the ground that the same was

improperly or irregularly issued. If the motion be
JOPILLO, JR. VS CA made on affidavits on the part of the party whose
property has been attached, but not otherwise,
FACTS: On October 18, 1985, private respondent Raymond Lim filed a the attaching creditor may oppose the same by
complaint for the collection of a sum of money in the amount of about counter-affidavits or other evidence in addition to
P100,000.00 with a prayer for preliminary attachment in the Regional that on which the attachment was made. After
Trial Court of Pasay City. It is alleged in the complaint that petitioner hearing, the judge shall order the discharge of the
was, among others, guilty of fraud in contracting the obligation in that attachment if it appears that it was improperly or
from the very beginning he had no intention to pay the same and that irregularly issued and the defect is not cured
he is disposing of the scrap materials subject of their agreement to forthwith. (Emphasis supplied.)
defraud private respondent.
A motion to discharge a writ of attachment on the ground that the
On October 21, 1985, the trial court granted ex-parte the prayer for a same was improperly or irregularly issued may be established by the
writ of preliminary attachment having found sufficient cause therefor affidavits submitted by the party whose property has been attached or
based on the verified complaint and the affidavit of merit executed by such other evidence presented at the hearing of the motion. The
private respondent. The court, however, required the private attaching creditor may oppose the same by counter-affidavits or other
respondent to file a bond in the amount of P100,000.00. Pursuant to evidence in addition to that with which the attachment was made.
the said order respondent sheriff Arsenio de Guzman attached a
Chevrolet truck owned by petitioner. If the movant establishes that the facts stated in the plaintiffs affidavit
or some of them, are shown to be false or untrue, the writ of
On October 25, 1985, petitioner filed an urgent motion to discharge attachment may be considered as improperly or irregularly
the writ of attachment in accordance with Section 13, Rule 57 of the issued. 5 The determination of the existence of said grounds to
Rules of Court alleging therein that the issuance of the writ was discharge a writ of attachment rests in the sound discretion of
irregular and improper. At the hearing of the motion, petitioner the lower court.
testified that their agreement was for simple loans which have been
fully paid by way of off-set when he delivered scrap materials to In the present case, although the evidence submitted by petitioner
private respondent on various occasions. In support thereof, petitioner tended to show payment of the obligation subject of the complaint, it
presented receipts purportedly signed by the secretary of private appears that the genuineness of the alleged receipt of the scrap
respondent accepting deliveries of the scrap materials. materials which petitioner claims to have delivered to private
respondent to offset his obligation is in issue. Besides, the nature of
ISSUE: WON the attachment should be discharged under Sec. 13 the agreement and the actual deliveries made of the scrap materials,
among others, are factual issues that must be resolved at the trial on
HELD: NO. A perusal of the records shows that in order to resolve the the merits and not at the hearing of the motion to discharge the writ
issue as to whether petitioner's evidence proves the falsity of private of attachment. If the private respondent did not present any counter-
respondent's allegations, respondent Court would have to go into the affidavit or evidence to counteract what has been adduced by
merits of the case aside from the evidence introduced in support of the petitioner at the hearing of the motion, it must be because private
motion to discharge the attachment. More particularly, the respondent respondent believed that it was not necessary. As it is, the trial
Court would have to resolve whether the alleged receipts of deliveries court was apparently not persuaded by the evidence
are really genuine, that two (2) truckloads of scrap materials worth presented by petitioner so it ordered that the writ of
P30,000.00 was actually delivered and whether the amount of attachment be maintained and directed that if petitioner
P100,000.00 covered by the "Agreement" was a loan or advance wants a discharge of the writ, he must put up a bond in
payment for scrap iron that petitioner promised to deliver. The merits accordance with Section 12, Rule 57 of the Rules.
of the action in which a writ of preliminary attachment has been issued
are not triable on a motion for dissolution of the attachment, otherwise
an applicant for the dissolution could force a trial of the merits of the
case in motion. Accordingly, while it is competent for the Court to
decide whether the affidavits submitted show the existence of a cause
of action against the defendant, this gives no general right to a trial on
such motion of the merits of such cause.
Section 13, Rule 57 of the Rules of Court provides:
SEC. 13. Discharge of a attachmnet for improper

or irregular issuance.—The party whose property
has been may also, at any tame either before or
after the release of the-attached property, or
before any attachment shall have been actually
levied, upon reasonable notice to the attaching
creditor, apply to the judge who granted the
order, or to the judge of the court in which the
action is pending, for an order to discharge the
74
MINDANAO SAVINGS LOAN ASSO., INC. VS. CA HELD 3: NO. "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
FACTS: On September 10, 1986, private respondents (Mercado) filed was rightfully or wrongfully issued."
in the Regional Trial Court of Davao City, a complaint against
defendants D.S. Homes, Inc. et al. for "Rescission of Contract and
Damages" with a prayer for the issuance of a writ of preliminary The liability of the surety on the counterbond subsists until the Court
attachment, docketed as Civil Case No. 18263. shall have finally absolved the defendant from the plaintiff s claims.
Only then may the counterbond be released. The same rule applies to
On September 28, 1986, Judge Dinopol issued an order granting ex the plaintiffs attachment bond. "The liability of the surety on the
parte the application for a writ of preliminary attachment. bond subsists because the final reckoning is when the Court
shall finally adjudge that the attaching creditor was not entitled to the
On September 22, 1986, the private respondents amended their issuance of the attachment writ," (Calderon vs. Intermediate Appellate
complaint and on October 10, 1986, filed a second amended complaint Court, 155 SCRA 531.)
impleading as additional defendants herein petitioners Davao Savings
& Loan Association, Inc. and its president, Francisco Villamor, but
dropping Eugenio M. De los Santos.
On November 5, 1986, 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
("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
Pl,752,861.41 per certificate issued by the Land Bank of the
Philippines, a banking partner of petitioner MSLA The lower court
accepted the Land Bank Certificate of . Deposit for Pl,752,861.41 as
counterbond and lifted the writ of preliminary attachment on June 5,
1987.
ISSUE 1: May an attachment be quashed without notice and hearing?
HELD 1: NO. 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" (Secs. 12 and 13, Rule 57, Rules of Court).
ISSUE 2: WON the objections to the impropriety or irregularity of the

writ of attachment "may no longer be invoked once a counterbond is
filed
HELD 2: YES. 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 reason is simple. 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. This accords with our ruling G.B. Inc. vs. Sanchez, 98 Phil. 886
that: "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."
ISSUE 3: 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?
75
CALDERON VS. IAC
ISSUE: Is the liability of the attachment bond waived when

the adverse party posts a counterbond?
HELD: NO. 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.

defect in the issuance of the attachment writ by simply
availing himself of one way of discharging the attachment
counterbond is a speedier way of discharging the attachment
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.
76
BENITEZ VS. IAC
FACTS: The records show that on December 6, 1984, private

respondent Casa Filipina Development Corporation (Casa Filipina for
brevity) filed a complaint against herein petitioner Helena T. Benitez
for recission of contract, plus damages, with a prayer for preliminary
attachment.
The attachment was granted by the lower court ex-parte under Section
1 (b), Rule 57, Rules of Court, upon the allegation of respondent Casa
Filipina, that petitioner Helena Benitez, the defendant, had violated
their alleged fiduciary relationship and had unlawfully converted the
amount of P1,000,000.00 for her own use. Petitioner promptly filed an
urgent motion to discharge writ of preliminary attachment for improper
or irregular issuance, supported by the affidavit of Virginia Real, who
alleged that there was no fiduciary relationship between the plaintiff
and defendant inasmuch as the transaction between them was one of
sale of real property. Thus, in effect, the petitioner claims that the
private respondent's allegation of fraud was false, that hence there
was no ground for the attachment, and that consequently, the
attachment order was improperly or irregularly issued.
ISSUE: Is a hearing necessary to determing the propriety of issuance

of the writ under Section 13?
HELD: YES. The petitioner's Urgent Motion to Discharge Writ of

Preliminary Attachment was filed under Section 13, Rule 57. The last
sentence of said provision indicates that a hearing must be conducted
by the judge for the purpose of determining whether or not there
really was a defect in the issuance of the attachment.
It appears from the records that no hearing was conducted by the

lower court. Indeed, when the case was called for hearing, the plaintiff
(private respondent herein), failed to appear and the petitioner's
motion was considered submitted for resolution.
It was grave abuse of discretion on the part of respondent Judge

Rosario Veloso to deny petitioner's Urgent Motion to Discharge Writ of
Preliminary Attachment, without conducting a hearing and requiring
the plaintiff to substantiate its allegation of fraud. Neither can
respondent Judge avoid deciding the issue raised in petitioner's urgent
motion by ruling that "the issue cannot be determined without
adducing evidence at the same time going into the merits of the case."
Having issued the writ of preliminary attachment ex parte, it was
incumbent on the respondent court, upon proper challenge of its
order, to determine whether or not the same was improvidently
issued. A preliminary attachment is a rigorous remedy which exposes
the debtor to humiliation and annoyance, such that it should not be
abused to cause unnecessary prejudice and, if wrongfully issued on
the basis of false allegation, should at once be corrected.
We agree with petitioner that a writ of attachment may be discharged

pursuant to Section 13, Rule 57, without the necessity of filing a cash
deposit or counterbond. The provisions of the aforesaid section grants
an aggrieved party relief from baseless and unjustifiable attachments
procured, among others, upon false allegations, without having to file
any cash deposit or counterbond.
77
UY KIMPANG VS. JAVIER the issuance of the writ of attachment against the defendants,
it is now too late and futile to allege that the said obligation is
FACTS: On December 20, 1925 the plaintiff filed in the Court of First invalid for lack of approval by the judge. They are estopped
Instance of Antique a verified complaint in which it alleged among
from doing so by their own acts, inasmuch as their failure to
other things that the defendant were indebted to it in the sum of
P9,352 plus interest from May, 1918, at the rate of 12 per cent per question the said obligation at the proper time constitutes a
annum; that the defendants were disposing or about to dispose of waiver of their right. One who has any objection to the
their properties with intent to defraud their creditors and the plaintiff; sufficiency or validity of an obligation in attachment
that in order to secure plaintiff's rights, it was necessary to attach the proceedings, should record the same before executing the
properties of said defendants, unless they were willing to execute an counterobligation required for the discharge of the
obligation as guaranty for their solvency; and that to obtain such attachment; otherwise, it will be understood that he does not
remedy, it was ready to execute the requisite obligation. Four days
question, or that he renounces his right to question, the
later, or on December 24, 1925, the plaintiff filed a motion in which,
after reiterating the allegations of its complaint, it was prayed that a sufficiency or validity of the said obligation.
writ of attachment be issued against the defendant. The justice of the
peace of the capital of Antique, acting in the place of the Judge of the
Court of First Instance of said province, ruled favorably on the
plaintiff's motion and stated the following in his order of December 24,
1925.
The provincial sheriff, upon receipt of the writ, attached the properties
belonging to defendants and enumerated in the sheriff's return, the
assessed value of which was noted at the bottom of said return. On
the same day, December 29, 1925, the defendants executed a
counterobligation in the sum of P9,500 with a view to dissolving the
attachment levied upon their properties. Said counterbond, which was
approved on the same date by the justice of the peace who issued the
order of attachment, was signed by all the defendant and their sureties
Juan Autajay and Severino Magbanua who bound themselves jointly
and severally thereunder.
In view of the fact that this sum was not sufficient to cover the full
value of the judgment and that the defendants failed to deliver to the
sheriff the properties which were released from the attachment by the
virtue of the obligation which, on December 29, 1925 and the approval
of the court, they executed jointly with their sureties Severino
Magbanua and Juan Autajay, the plaintiff in its motion of January 23,
1934 moved the court to again order the execution of the aforesaid
judgement, but this time against the properties of two sureties.
The surety Juan Autajay objected to the plaintiff's motion on the

grounds: (1) That the attachment of the properties of the defendants
was null and void because it does not appear that they were served
with a copy of the writ ordering the same; (2) that said attachment
was not inscribed in the registry of properties; (3) that he (Autajay)
was released from his obligation as surety because his undertaking
had been cancelled when the court, in its order of February 15, 1930,
permitted him to withdraw therefrom; (4)that the undertaking should
in any event be enforced exclusively against the other surety (Severino
Magbanua) inasmuch as he did not withdraw therefrom.
ISSUE: WON the sureties can assail the validity of the attachment
after filing of the counterbond
HELD: NO. It is noteworthy that in their counterobligation they made

it understood that they were aware of the issuance of a writ of
attachment against the defendants; that the properties of the latter
had been attached by the sheriff; that all wanted or at least prayed
that said attachment be discharged; and that they offered to execute,
as in fact they immediately did execute, the counterobligation
required. The general rule is that "irregularities and defects in
attachment or garnishment proceedings which render the attachment
merely voidable and not void, are deemed to be waived unless
promptly taken advantage of by appropriate mode of raising objection
thereto."
Inasmuch as both the defendants and the sureties-appellees,

by executing the counterobligation required by law for the
discharge of the attachment, had accepted the obligation filed
by the plaintiff with the justice of the peace of the capital for
78
FILINVEST CREDIT CORPORATION VS. RELOVA ISSUE 2: WON a writ of attachment may be discharged without the
necessity of filing the cash deposit or counter-bond required by Section
FACTS: On August 2, 1977, Filinvest Credit Corporation (hereinafter 12, Rule 57, cited by petitioner.
referred to as FILINVEST) filed a complaint in the lower court against
defendants Rallye Motor Co., Inc. (hereinafter referred to as RALLYE) HELD 2: YES. Sec. 13. Discharge of attachment for improper or
and Emesto Salazar for the collection of a sum of money with damages irregular issuance.—The party whose property has been attached may
and preliminary writ of attachment. also, at any time either before or after the release of the attached
property, or before any attachment shall have been actually levied,
The specific provision adverted to in the above Affidavit is Section 1(d) upon reasonable notice to the attaching creditor, apply to the judge
of Rule 57 which includes "an action against a party who has been who granted the order, or to the judge of the court in which the action
guilty of fraud in contracting the debt or incurring the obligation upon is pending, for an order to discharge the attachment on the ground
which the action is brought, or in concealing or disposing of the that the same was improperly or irregularly issued. If the motion be
property for the taking, detention or conversion of which the action is made on affidavits on the part of the party whose property has been
brought" as one of the cases in which a "plaintiff or any proper party attached, but not otherwise, the attaching creditor may oppose the
may, at the commencement of the action or at any time thereafter, same by counter-affidavits or other evidence in addition to that on
have the property of the adverse party attached as security for the which the attachment was made. After hearing, the judge shall order
satisfaction of any judgment that may be recovered." the discharge of the attachment if it appears that it was improperly or
irregularly issued and the defect is not cured forthwith."(Emphasis
supplied)
Judge Jorge R. Coquia (now Justice of the Court of Appeals), then
presiding Judge of the lower court, granted the prayer for a writ of
attachment in an Order dated August 17, 1977. The foregoing provision grants an aggrieved party relief from baseless
and unjustifiable attachments procured, among others, upon false
More than a year later, in an Urgent Motion dated December 11, allegations, without having to file any cash deposit or counter-bond.
1978, 4 defendant Salazar prayed that the writ of preliminary
attachment issued ex parte and implemented solely against his
In the instant case the order of attachment was granted upon the
property be recalled and/or quashed. He argued that when he signed
allegation of petitioner, as plaintiff in the court below, that private
the promissory note and chattel mortgage on May 5, 1977 in favor of
respondent RALLYE, the defendants, had committed "fraud in
RALLYE, FILINVEST was hot vet his creditor or obligee, therefore, he
contracting the debt or incurring the obligation upon which the action
could not be said to have committed fraud when he contracted the
is brought," covered by Section i(d), Rule 57, earlier quoted.
obligation on May 5, 1977. Salazar added that as the motor vehicle
Subsequent to the issuance of the attachment order on August 17,
which was the object of the chattel mortgage and the consideration for
1977, private respondent filed in the lower court an "Urgent Motion for
the promissory note had admittedly not been delivered to him by
the Recall and Quashal of the Writ of Preliminary Attachment on (his
RALLYE, his repudiation of the loan and mortgage is more justifiable.
property)" dated December 11, 1978 11 precisely upon the assertion
that there was "absolutely no fraud on (his) part" in contracting the
Judge dissolved the writ of attachment. obligation sued upon by petitioner. Private respondent was in effect
claiming that petitioner's allegation of fraud was false, that hence
there was no ground for attachment, and that therefore the
It is urged in petitioner's first assignment of error that the writ of
attachment order was "improperly or irregularly issued." This Court
preliminary attachment having been validly and properly issued by the
was held that "(i)f the grounds upon which the attachment was issued
lower court on August 17, 1977, the same may only be dissolved,
were not true ..., the defendant has his remedy by immediately
quashed or recalled by the posting of a counter-replevin bond under
presenting a motion for the dissolution of the same. 12 We find that
Section 12, Rule 57 of the Revised Rules of Court.
private respondent's abovementioned Urgent Motion was filed under
option 13, Rule 57.
Citing the above provision, petitioner contends that the court below
should not have dissolved the writ for failure of private respondent
ISSUE 3: The last sentence of the said provision, however, indicates
Salazar to make a cash deposit or to file a counter-bond.
that a hearing must be conducted by the judge for the purpose of
determining whether or not there reality was a defect in the issuance
On the other hand, private respondent counters that the subject writ of the attachment. The question is: At this hearing, on whom does the
of preliminary attachment was improperly or irregularly issued in the burden of proof lie?
first place, in that it was issued ex parte without notice to him and
without hearing.
HELD 3: Under the circumstances of the present case, We sustain the
ISSUE 1: WON the writ was improperly issued in that it was issued ex ruling of the court a quo in its questioned Order dated February 2,
parte without notice and hearing 1979 that it should be the plaintiff (attaching creditor), who should
prove his allegation of fraud. This pronouncement finds support in the
HELD 1: NO. A writ of attachment may be issued ex parte. Sections 3
and 4, Rule 57, merely require that an applicant for an order of first sentence of Section 1, Rule 131, which states that: "Each party
attachment file an affidavit and a bond: the affidavit to be executed by must prove his own affirmative allegations." The last part of the same
the applicant himself or some other person who personally knows the provision also provides that: "The burden of proof lies on the party
facts and to show that (1) there is a sufficient cause of action, (2) the who would be defeated if no evidence were given on either side." It
case is one of those mentioned in Section 1 of Rule 57, (3) there is no must be borne in mind that in this jurisdiction, fraud is never
other sufficient security for the claim sought to be enforced, and (4)
presumed.
the amount claimed in the action is as much as the sum for which the
order is granted above all legal counterclaims;and the bond to be
"executed to the adverse party in an amount 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."
79
ADLAWAN VS. TORRES
HELD: Consequently, when petitioners filed a motion for the

reconsideration of the order directing the issuance of the writ of
attachment, respondent Judge should have considered it as a motion
for the discharge of the attachment and should have conducted a
hearing or required submission of counter-affidavits from the
petitioners, if only to gather facts in support of the allegation of fraud
(Jopillo, Jr. v. Court of Appeals, 167 SCRA 247 [1988]). This is what
Section 13 of Rule 57 mandates.
80
PEROXIDE PHILIPPINES CORP VS. CA
FACTS: On December 6, 1982, herein private respondent Bank of the

Philippine Islands (BPI) sued herein petitioners Peroxide Philippines
Corporation (Peroxide), Eastman Chemical Industries, Inc. (Eastman),
and the spouses Edmund O. Mapua and Rose U. Mapua (Mapuas) in
Civil Case No. 48849 of the then Court of First Instance of Pasig, Metro
Manila for the collection of an indebtedness of Peroxide wherein
Eastman and the Mapuas bound themselves to be solidarily liable.
Upon the filing of said action, the trial court, then presided over by
Judge Gregorio G. Pineda, ordered the issuance of a writ of preliminary
attachment which was actually done on January 7, 1983 after BPI filed
an attachment bond in the amount of P32,700,000.00. Petitioners'
properties were accordingly attached by the sheriff.
On January 11, 1983, Eastman and the Mapuas moved to lift the
attachment, which motion was set for hearing on January 14, 1983.
On said date and on motion of BPI, it was granted up to January 17,
1983 to file a written opposition to the motion to lift the writ of
attachment. BPI also filed a motion to set for hearing the said motion
to lift attachment and its opposition thereto.
However, on January 17, 1983, Judge Pineda issued two (2) orders,
the first, denying BPI's motion for a hearing, and, the second, lifting
the writ of attachment as prayed for by Eastman and the Mapuas.
BPI asserts that the discharge is illegal and void because the order
lifting the same is violative of Section 13, Rule 57 of the Rules of Court
which requires, among others, a prior hearing before the judge may
order the discharge of the attachment upon proof adduced therein of
the impropriety or irregularity in the issuance of the writ and the
defect is not cured forthwith.
ISSUE: What kind of hearing is required?
HELD: Now, it is undeniable that when the attachment is challenged

for having been illegally or improperly issued, there must be a hearing
with the burden of proof to sustain the writ being on the attaching
creditor. 18 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. 19 And, as provided by the aforecited
Section 13 of Rule 57, the attaching creditor should be allowed to
oppose the application for the discharge of the attachment by counter-
affidavit or other evidence, in addition to that on which the attachment
was made.
81
SECTION 14 or one in which the defendant has proprietary interests. But when the
Sheriff, acting beyond the bounds of his office seizes a stranger's
UY VS CA property, the rule does not apply and interference with his custody is
not interference with another court's order of attachment.
FACTS: On March 24, 1982, Esteban B. Uy, Jr. (herein petitioner) filed
a complaint against Sy Yuk Tat for sum of money, damages, with In like manner, the sale of the disputed properties at the public
preliminary attachment in the then Court of First Instance of Rizal, auction, in satisfaction of a judgment of a co-equal court does not
Branch LII, Quezon City. render the case moot and academic. The undeviating ruling of this
Court in such cases is that attachment and sale of properties belonging
On the same day, upon plaintiff filing a bond of P232,780.00 said court to a third person is void because such properties cannot be attached
issued a writ of preliminary attachment and appointed Deputy Sheriff and sold at public auction for the purpose of enforcing a judgment
Nilo S. Cabang (co-petitioner herein) as Special Sheriff to implement against the judgment debtor. (Orosco v. Nepomuceno, 57 Phil. 1007
the writ. [1932-33]).
On April 12, 1982, a third party claim was filed by Wilson Ting and Yu
Hon (private respondents herein) in the same Civil Case No. Q-34782,
addressed to petitioner Cabang asserting ownership over the
properties attached at No. 65 Speaker Perez St., Quezon City (other
than those attached at No. 296 Palanca St., Manila).
On the same day that petitioner Cabang filed his Partial Sheriffs Return
(April 19, 1982) the third party claimants and Yu filed a motion to
dissolve the aforementioned writ of preliminary attachment in the
same Civil Case No. Q-34782; alleging among others, that being the
absolute owners of the personal properties listed in their third party
claim which were illegally seized from them they were willing to file a
counterbond for the return thereof; which motion was opposed by
plaintiff Uy.
On April 29, 1982, then CFI Judge Jose P. Castro rendered judgment
by default in said Civil Case No. Q-34782 in favor of plaintiff Uy.
Meanwhile, on May 5, 1982, third party claimants Wilson Ting and Yu

Hon filed a complaint for Damages with application for preliminary
injunction against Esteban Uy and Nilo Cabang (co-petitioners herein)
in the then Court of First Instance of Rizal, Branch 52, Quezon City
('the court a quo' for short) which case was docketed as Civil Case No.
Q-35128 ('the second case' for short). The complaint alleged inter
alia that the plaintiffs are the owners of the personal properties
reflected in the Partial Sheriffs Return dated April 13, 1983 which have
been attached and seized by defendant Cabang. The judge rendered a
status quo order.
On the same day (June 7, 1982) that plaintiff Uy filed his exparte
motion for writ of execution he and Cabang filed a motion to quash or
dissolve status quo order in the case a quo as defendants therein on
the ground that the court "has no jurisdiction to interfere with
properties under custodia legis on orders of a court of co-equal and
co-ordinate jurisdiction" and that plaintiffs' complaint is not for
recovery of properties in question.
ISSUE: The main issue in this case is whether or not properties levied
and seized by virtue of a writ of attachment and later by a writ of
execution, were under custodia legis and therefore not subject to the
jurisdiction of another co-equal court where a third party claimant
claimed ownership of the same properties.
HELD: The issue has long been laid to rest in the case of Manila
Herald Publishing Co. Inc. v. Ramos (88 Phil. 94 [1951]) where the
Court filed that while it is true that property in custody of the law may
not be interfered with, without the permission of the proper court, this
rule is confined to cases where the property belongs to the defendant
82
MANILA HERALD PUBLISHING CO. INC. VS. RAMOS 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
FACTS: Respondent Antonio Quirino filed a libel suit, docketed as civil Procedure. Combined, the two modes of redress are now section 1 of
case No. 11531, against Aproniano G. Borres, Pedro Padilla and Loreto Rule 13,1 the last clause of which is the newly added provision. The
Pastor, editor, managing editor and reporter, respectively, of the Daily result is that, whereas, "under the old procedure, the third person
Record, a daily newspaper published in Manila, asking damages could not intervene, he having no interest in the debt (or damages)
aggregating P90,000. With the filing of this suit, the plaintiff secured a sued upon by the plaintiff," under the present Rules, "a third person
writ of preliminary attachment upon putting up a P50,000 bond, and claiming to be the owner of such property may, not only file a third-
the Sheriff of the City of Manila levied an attachment upon certain party claim with the sheriff, but also intervene in the action to ask that
office and printing equipment found in the premises of the Daily the writ of attachment be quashed." (I Moran's Comments on the
Record. Rules of Court, 3rd Ed., 238, 239.) 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
Thereafter the Manila Herald Publishing Co. Inc. and Printers, Inc.,
less preferable to an independent action from the standpoint of the
filed with the sheriff separate third-party claims, alleging that they
claimants, at least. Because availability of intervention depends upon
were the owners of the property attached. Whereupon, the sheriff
the court in which Case No. 11531 is pending, there would be
required of Quirino a counter bound of P41,500 to meet the claim of
assurance for the herein petitioners that they would be permitted to
the Manila Herald Publishing Co., Inc., and another bond of P59,500 to
come into that case.
meet the claim of Printers, Inc.
Little reflection should disabuse the mind from the assumption that an
Unsuccessful in their attempt to quash the attachment, on October 7,
independent action creates a multiplicity of suits. There can be no
1950, the Manila Herald Publishing Co., Inc. and Printers, Inc.
multiplicity of suits when the parties in the suit where the attachment
commenced a joint suit against the sheriff, Quirino and Alto Surety and
was levied are different from the parties in the new action, and so are
Insurance Co. Inc., in which the former sought (1) to enjoin the
the issues in the two cases entirely different. In the circumstances,
defendants from proceeding with the attachment of the properties
separate action might, indeed, be the more convenient of the
above mentioned and (2) P45,000 damages. This suit was docketed as
two competing modes of redress, in that intervention is more
civil case No. 12263.
likely to inject confusion into the issues between the parties
in the case for debt or damages with which the third-party
ISSUE: Should the Manila Herald Publishing Co., Inc., and Printers, claimant has nothing to do and thereby retard instead of
Inc., come as intervernors into the case for libel instead of bringing an facilitate the prompt dispatch of the controversy which is
independent action? underlying objective of the rules of pleading and practice.
That is why intervention is subject to the court's discretion.
HELD: SEPARATE ACTION. INTERVENTION DEPENDS ON THE
DISCRETION OF THE JUDGE IN THE LIBEL CASE.
ISSUE 2: Does the judge have jurisdiction in case No. 12263 to quash
the attachment levied in case No. 11531?
Section 14 of rule 59, which treats of the steps to betaken when
property attached is claimed by the other person than that defendant
HELD 3: YES. The fault with the respondents' argument is that it
or his agent, contains the proviso that "Nothing herein contained shall
assumes that the Sheriff is holding the property in question by order of
prevent such third person from vindicating his claim to the property by
the court handling the case for libel. In reality this is true only to
any proper action." What is "proper action"? Section 1 of Rule 2
limited extent. That court did not direct the sheriff to attach the
defines action as "an ordinary suit in court of justice, by which one
particular property in dispute. The order was for the sheriff to attach
party prosecutes another for the enforcement or protection of a right,
Borres', Padilla's and Pastor's property. He was not supposed to touch
or the prevention or redress of a wrong," while section 2, entitled
any property other than that of these defendants', and if he did, he
"Commencement of Action," says that "civil action may be commenced
acted beyond the limits of his authority and upon his personal
by filing a complaint with the court."
responsibility.
"Action" has acquired a well-define, technical meaning, and it is in this

It is true of course that property in custody of the law can not
restricted sense that the word "action" is used in the above rule. In
employing the word "commencement" the rule clearly indicates an be interferred with without the permission of the proper
action which originates an entire proceeding and puts in motion the court, and property legally attached is property in custodia
instruments of the court calling for summons, answer, etc, and not any legis. But for the reason just stated, this rule is confined to
intermediary step taken in the course of the proceeding whether by cases where the property belongs to the defendant or one in
the parties themselves or by a stranger. which the defendant has proprietary interest. When the
sheriff acting beyond the bounds of his office seizes a
The most liberal view that can be taken in favor of the
respondents' position is that intervention as a means of stranger's property, the rule does not apply and interference
protecting the third-party claimants' right is not exclusive but with his custody is not interference with another court's order
cumulative and suppletory to the right to bring a new, of attachment.
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
83
TRADERS ROYAL BANK VS. IAC bound to keep the property under the attachment, unless
the attaching creditor or his agent, on demand of said
FACTS: Sometime on March 18, 1983 herein petitioner Traders Royal officer, secures aim against such claim by a bond in a sum
Bank instituted a suit against the Remco Alcohol Distillery, Inc. REMCO not greater than the value of the property attached. In case
before the Regional Trial Court, Branch CX, Pasay City, in Civil Case of disagreement as to such value, the same shall be decided
No. 9894-P, for the recovery of the sum of Two Million Three Hundred by the court issuing the writ of attachment. The officer shall
Eighty Two Thousand Two Hundred Fifty Eight & 71/100 Pesos not be liable for damages, for the taking or keeping of such
(P2,382,258.71) obtaining therein a writ of pre attachment directed property, to any such third-party claimant, unless such a
against the assets and properties of Remco Alcohol Distillery, Inc. claim is so made and the action upon the bond brought
within one hundred and twenty (120) days from the date of
the filing of said bond. But nothing herein contained shall
Pursuant to said writ of attachment issued in Civil Case No. 9894-P,
prevent such third person from vindicating his claim to the
Deputy Sheriff Edilberto Santiago levied among others about 4,600
property by proper action ...
barrels of aged or rectified alcohol found within the premises of said
Remco Distillery Inc. A third party claim was filed with the Deputy
Sheriff by herein respondent La Tondeña, Inc. on April 1, 1982 The foregoing rule explicitly sets forth the remedy that may be availed
claiming ownership over said attached property of by a person who claims to be the owner of property levied upon by
attachment, viz: to lodge a third- party claim with the sheriff, and if
On May 12, 1982, private respondent La Tondeña, Inc. filed a the attaching creditor posts an indemnity bond in favor of the sheriff,
complaint-in- intervention in said Civil Case No. 9894, alleging among to file a separate and independent action to vindicate his claim (Abiera
others, that 'it had made advances to Remco Distillery Inc. which vs. Court of Appeals, 45 SCRA 314). And this precisely was the remedy
totalled P3M and which remains outstanding as of date' and that the resorted to by private respondent La Tondeña when it filed the
'attached properties are owned by La Tondeña, Inc. vindicatory action before the Bulacan Court.
Subsequently, private respondent La Tondeña, Inc., without the

ISSUE 2: It is further argued that since private respondent La
foregoing complaint-in- intervention having been passed upon by the
Tondeña, Inc., had voluntarily submitted itself to the jurisdiction of the
Regional Trial Court, Branch CX, (Pasay City), filed in Civil Case No.
Pasay Court by filing a motion to intervene in Civil Case No. 9894-P,
9894-P a "Motion to Withdraw" dated October 8, 1983, praying that it
the denial or dismissal thereof constitutes a bar to the present action
be allowed to withdraw alcohol and molasses from the Remco Distillery
filed before the Bulacan Court.
Plant
This motion has not been resolved (p. 4, Petition) up to July 18, 1983 HELD 2: We cannot sustain the petitioner's view. Suffice it to state
when a manifestation that it was withdrawing its motion for that intervention as a means of protecting the third-party claimant's
reconsideration was filed by respondent La Tondeña Inc. right in an attachment proceeding is not exclusive but cumulative and
suppletory to the right to bring an independent suit. 3 The denial or
On July 19, 1983, private respondent La Tondeña Inc. instituted before dismissal of a third-party claim to property levied upon cannot operate
the Regional Trial Court, Branch IX, Malolos, Bulacan presided over by to bar a subsequent independent action by the claimant to establish
Respondent Judge, Civil Case No. 7003-M, in which it asserted its claim his right to the property even if he failed to appeal from the order
of ownership over the properties attached in Civil Case No. 9894-P, denying his original third-party claim.
and likewise prayed for the issuance of a writ of Preliminary Mandatory
and Prohibitory Injunction which was granted by the said court.
Petitioner contends that respondent Judge of the Regional T- trial

Court of Bulacan acted without jurisdiction in entertaining Civil Case
No. 7003-M (separate action filed by La Tondena), in authorizing the
issuance of a writ of preliminary mandatory and prohibitory injunction,
which enjoined the sheriff of Pasay City from interferring with La
Tondeña's right to enter and withdraw the barrels of alcohol and
molasses from Remco's ageing warehouse and from conducting the
sale thereof, said merchandise having been previously levied upon
pursuant to the attachment writ issued by the Regional Trial Court of
Pasay City in Civil Case No. 9894-P. It is submitted that such order of
the Bulacan Court constitutes undue and illegal interference with the
exercise by the Pasay Court of its coordinate and co-equal authority on
matters properly brought before it.
ISSUE: WON La Tondena can vindicate its claim in a separate action.
HELD: YES. There is no question that the action filed by private

respondent La Tondeña, Inc., as third-party claimant, before the
Regional Trial Court of Bulacan in Civil Case No. 7003-M wherein it
claimed ownership over the property levied upon by Pasay City Deputy
Sheriff Edilberto Santiago is sanctioned by Section 14, Rule 57 of the
Rules of Court. Thus —
If property taken be claimed by any person other than the

party against whom attachment had been issued or his
agent, and such person makes an affidavit of his title thereto
or right to the possession thereof, stating the grounds of
such right or title, and serves such affidavit upon the officer
while the latter has possession of the property, and a copy
thereof upon the attaching creditor, the officer shall not be
84
CHING VS. CA The above-mentioned remedies are cumulative and any one of them
may be resorted to by one third-party claimant without availing of the
FACTS: on August 21, 1981, the ABC filed a complaint for sum of other remedies.50
money with prayer for a writ of preliminary attachment against the
PBMCI to collect the P12,612,972.88 exclusive of interests, penalties
In this case, the petitioner-wife filed her motion to set aside the levy
and other bank charges. Impleaded as co-defendants in the complaint
were Alfredo Ching, Emilio Tañedo and Chung Kiat Hua in their on attachment of the 100,000 shares of stocks in the name of
capacity as sureties of the PBMCI. petitioner-husband claiming that the said shares of stocks were
conjugal in nature; hence, not liable for the account of her husband
The case was docketed as Civil Case No. 142729 in the Regional Trial under his continuing guaranty and suretyship agreement with the
Court of Manila, Branch XVIII.10 In its application for a writ of PBMCI. The petitioner-wife had the right to file the motion for said
preliminary attachment, the ABC averred that the "defendants are relief.
guilty of fraud in incurring the obligations upon which the present
action is brought11 in that they falsely represented themselves to be in
a financial position to pay their obligation upon maturity thereof."12 Its
supporting affidavit stated, inter alia, that the "[d]efendants have
removed or disposed of their properties, or [are] ABOUT to do so, with
intent to defraud their creditors." The writ was granted.
In the meantime, on July 26, 1983, the deputy sheriff of the trial court
levied on attachment the 100,000 common shares of Citycorp stocks in
the name of Alfredo Ching.
On November 16, 1993, Encarnacion T. Ching, assisted by her

husband Alfredo Ching, filed a Motion to Set Aside the levy on
attachment. She alleged inter alia that the 100,000 shares of stocks
levied on by the sheriff were acquired by her and her husband during
their marriage out of conjugal funds after the Citycorp Investment
Philippines was established in 1974. Furthermore, the indebtedness
covered by the continuing guaranty/comprehensive suretyship contract
executed by petitioner Alfredo Ching for the account of PBMCI did not
redound to the benefit of the conjugal partnership. She, likewise,
alleged that being the wife of Alfredo Ching, she was a third-party
claimant entitled to file a motion for the release of the
properties.32 She attached therewith a copy of her marriage contract
with Alfredo Ching.
ISSUE 1: whether the petitioner-wife has the right to file the motion
to quash the levy on attachment on the 100,000 shares of stocks in
the Citycorp Investment Philippines
HELD 1: YES. In Ong v. Tating,49 we held that the sheriff may attach
only those properties of the defendant against whom a writ of
attachment has been issued by the court. When the sheriff erroneously
levies on attachment and seizes the property of a third person in which
the said defendant holds no right or interest, the superior authority of
the court which has authorized the execution may be invoked by the
aggrieved third person in the same case.
Upon application of the third person, the court shall order a summary
hearing for the purpose of determining whether the sheriff has acted
rightly or wrongly in the performance of his duties in the execution of
the writ of attachment, more specifically if he has indeed levied on
attachment and taken hold of property not belonging to the plaintiff. If
so, the court may then order the sheriff to release the property from
the erroneous levy and to return the same to the third person. In
resolving the motion of the third party, the court does not and cannot
pass upon the question of the title to the property with any character
of finality. It can treat the matter only insofar as may be necessary to
decide if the sheriff has acted correctly or not. If the claimant‘s proof
does not persuade the court of the validity of the title, or right of
possession thereto, the claim will be denied by the court.
The aggrieved third party may also avail himself of the remedy of
"terceria" by executing an affidavit of his title or right of possession
over the property levied on attachment and serving the same to the
office making the levy and the adverse party.
Such party may also file an action to nullify the levy with damages
resulting from the unlawful levy and seizure, which should be a totally
separate and distinct action from the former case.
85
SECTION 15
PNB VS. VASQUEZ
FACTS: PNB acquired a favorable judgment in its favor in a complaint

for recovery of sum of money against Vasquez which judgment
became final and executory.
But the said judgment not having years enforced by writ of execution
and the period of five years having elapsed, the plaintiff bank, on July
22, 1937, filed a complaint.
The plaintiff's appeal is limited to the portion of the decision which

orders the deduction of the sum mentioned therein from the amount
adjudicated to the plaintiff. In the aforementioned civil case No. 4031,
the plaintiff bank prayed for and obtained an order of preliminary
attachment, by virtue of which 500 piculs of sugar belonging to the
defendant Vazquez was levied upon by the sheriff and sold at public
auction at the rate of P10.75 per picul, the proceeds therefrom
amounting to P5,250.13. This amount was deposited with the plaintiff
bank, upon its own petition, in the name of one Andres Covacha
personally, then a deputy of the Provincial Sheriff of Occidental
Negros. On August 14, 1928, a deposit of P5,250.13, was made in the
name of the Provincial Sheriff of Occidental Negros with the bank, by
virtue of another petition of the plaintiff approved by the court to
transfer the deposit in the name of the provincial sheriff proper. It
appears, however, that the Provincial Sheriff made other deposits on
this current account, and that he has been making withdrawals
therefrom until it was closed on January 6, 1932.
The plaintiff Bank contends that the amount of P5,250.13 should not
have been deducted from the judgment awarded to it, for the reason
that the defendant, despite the attachment, is still the owner of the
500 piculs of sugar and of its proceeds after the public auction sale,
and loss or misappropriation thereof should be for his account.
ISSUE: WON the loss should fall on the defendant on account of the
Porivincial sheriff‘s embezzlement
HELD: LOSS SHOULD FALL ON THE PLAINTIFF. "Personal

property may have levied upon under attachment and left in the
possession of the sheriff or other officer levying the writ to secure the
payment of such judgment as may be recovered in the action. Where
execution issues, it is the duty of such officer to apply towards its
satisfaction the property so attached and left in his hands; but he may
have embezzled or otherwise misappropriated it, or allowed it to be
lost by his negligence. When such is the case, we think the better
opinion is, that it must, as between the plaintiff and defendant, and
persons claiming under defendant, be treated as though it had been
levied upon under execution as well as under attachment, and
therefore as satisfying the judgment to the extent of its value."
It should be observed that affirmative acts of the plaintiff

Bank have resulted in the attachment and subsequent sale of
the property of the defendant. It seems fair that plaintiff
having put defendant's property into the hands of the sheriff,
the loss should fall on him and not on defendant. When a
sheriff takes property or goods in execution or by attachment,
he becomes the bailee for the benefit of all parties interested,
and certainly for the party who set him in motion. After
obtaining the judgment, plaintiff at once was entitled to have
the proceeds of the sale applied to the satisfaction of his
judgment and it was the duty of the sheriff to pay the
proceeds over. The money collected or paid the sheriff on the
sale of the goods or property may be regarded just like money
in the hands of a sheriff collected on execution. If the sheriff
collects money from a judgment debtor, and then fails to pay
it over, the debtor cannot be compelled to pay it again.
86
PAL VS. CA Article 1249 of the Civil Code provides:
FACTS: The petition involving the alias writ of execution had its
The payment of debts in money shall be made in
beginnings on November 8, 1967, when respondent Amelia Tan, under
the currency stipulated, and if it is not possible to
the name and style of Able Printing Press commenced a complaint for
deliver such currency, then in the currency which
damages before the Court of First Instance of Manila. The case was
is legal tender in the Philippines.
docketed as Civil Case No. 71307, entitled Amelia Tan, et al. v.
Philippine Airlines, Inc.
The delivery of promissory notes payable to order,
or bills of exchange or other mercantile documents
After trial, the Court of First Instance of Manila, Branch 13, then
shall produce the effect of payment only when
presided over by the late Judge Jesus P. Morfe rendered judgment on
they have been cashed, or when through the fault
June 29, 1972, in favor of private respondent..
of the creditor they have been impaired.
On September 2,1977, respondent Amelia Tan filed a motion praying
for the issuance of a writ of execution of the judgment. On October In the meantime, the action derived from the
11, 1977, the trial court, presided over by Judge Galano, issued its original obligation shall be held in abeyance.
order of execution with the corresponding writ in favor of the
respondent. The writ was duly referred to Deputy Sheriff Emilio Z. In the absence of an agreement, either express or implied, payment
Reyes of Branch 13 of the Court of First Instance of Manila for means the discharge of a debt or obligation in money and unless the
enforcement. parties so agree, a debtor has no rights, except at his own peril, to
substitute something in lieu of cash as medium of payment of his debt.
Four months later, on February 11, 1978, respondent Amelia Tan Consequently, unless authorized to do so by law or by consent of the
moved for the issuance of an alias writ of execution stating that the obligee a public officer has no authority to accept anything other than
judgment rendered by the lower court, and affirmed with modification money in payment of an obligation under a judgment being executed.
by the Court of Appeals, remained unsatisfied. Strictly speaking, the acceptance by the sheriff of the petitioner's
checks, in the case at bar, does not, per se, operate as a discharge of
the judgment debt.
On March 1, 1978, the petitioner filed an opposition to the motion for
the issuance of an alias writ of execution stating that it had already
fully paid its obligation to plaintiff through the deputy sheriff of the ISSUE 3: It is argued that if PAL had paid in cash to Sheriff Reyes,
respondent court, Emilio Z. Reyes, as evidenced by cash vouchers there would have been payment in full legal contemplation. The
properly signed and receipted by said Emilio Z. Reyes. reasoning is logical but is it valid and proper?
ISSUE: did the payment made to the absconding sheriff by check in HELD 3: Logic has its limits in decision making. We should not follow
his name operate to satisfy the judgment debt? rulings to their logical extremes if in doing so we arrive at unjust or
absurd results.
HELD: NO. Under the peculiar circumstances of this case, the
payment to the absconding sheriff by check in his name did not In the first place, PAL did not pay in cash. It paid in cheeks. Having
operate as a satisfaction of the judgment debt. paid with checks, PAL should have done so properly.
In general, a payment, in order to be effective to discharge an Payment in money or cash to the implementing officer may be deemed
obligation, must be made to the proper person. Article 1240 of the absolute payment of the judgment debt but the Court has never, in
Civil Code provides: the least bit, suggested that judgment debtors should settle their
obligations by turning over huge amounts of cash or legal tender to
Payment shall be made to the person in whose sheriffs and other executing officers. Payment in cash would result in
favor the obligation has been constituted, or his damage or interminable litigations each time a sheriff with huge
successor in interest, or any person authorized to amounts of cash in his hands decides to abscond.
receive it. (Emphasis supplied)
As a protective measure, therefore, the courts encourage the practice
Thus, payment must be made to the obligee himself or to an agent of payments by cheek provided adequate controls are instituted to
having authority, express or implied, to receive the particular payment. prevent wrongful payment and illegal withdrawal or disbursement of
Payment made to one having apparent authority to receive the money funds. If particularly big amounts are involved, escrow arrangements
will, as a rule, be treated as though actual authority had been given with a bank and carefully supervised by the court would be the safer
for its receipt. Likewise, if payment is made to one who by law is procedure. Actual transfer of funds takes place within the safety of
authorized to act for the creditor, it will work a discharge. The receipt bank premises. These practices are perfectly legal. The object is
of money due on a judgment by an officer authorized by law to accept always the safe and incorrupt execution of the judgment.
it will, therefore, satisfy the.
It is, indeed, out of the ordinary that checks intended for a particular
There are circumstances in this case, however, which compel a payee are made out in the name of another. Making the checks
different conclusion. payable to the judgment creditor would have prevented the
encashment or the taking of undue advantage by the sheriff, or any
person into whose hands the checks may have fallen, whether
The payment made by the petitioner to the absconding sheriff was not
wrongfully or in behalf of the creditor. The issuance of the checks in
in cash or legal tender but in checks. The checks were not payable to
the name of the sheriff clearly made possible the misappropriation of
Amelia Tan or Able Printing Press but to the absconding sheriff.
the funds that were withdrawn.
ISSUE 2: Did such payments extinguish the judgment debt?

Having failed to employ the proper safeguards to protect itself, the
judgment debtor whose act made possible the loss had but itself to
HELD 2: NO. Did such payments extinguish the judgment debt? blame.
87
SECTION 17 part, the surety or sureties on any counterbond given pursuant to the
provisions of this rule to secure the payment of the judgment shall
LUZON STEEL VS. SIA become charged on such counter-bond, and bound to pay to the
judgment creditor upon demand, the amount due under the judgment,
FACTS: Luzon Steel Corporation has sued Metal Manufacturing of the which amount may be recovered from such surety or sureties after
Philippines and Jose O. Sia, the former's manager, for breach of notice and summary hearing in the same action.
contract and damages. It obtained a writ of preliminary attachment of
the properties of the defendants, but the attachment was lifted upon a The surety's contention is untenable. The counterbond contemplated
P25,000.00 counterbond executed by the defendant Sia, as principal, in the rule is evidently an ordinary guaranty where the sureties assume
and the Times Surety & Insurance Co., Inc. a subsidiary liability. This is not the case here, because the surety in
the present case bound itself "jointly and severally" (in solidum) with
Issues having been joined, plaintiff and defendant (without
the defendant; and it is prescribed in Article 2059, paragraph 2, of the
intervention of the surety) entered into a compromise whereby Civil Code of the Philippines that excusion (previous exhaustion of the
defendant Sia agreed to settle the plaintiff's claim. The
property of the debtor) shall not take place "if he (the guarantor) has
compromise was submitted to the court and the latter approved it, bound himself solidarily with the debtor". The rule heretofore quoted
rendered judgment in conformity therewith, and directed the parties to
cannot be construed as requiring that an execution against the debtor
comply with the same. be first returned unsatisfied even if the bond were a solidary one; for a
procedural rule may not amend the substantive law expressed in the
Defendant having failed to comply, plaintiff moved for and obtained a Civil Code, and further would nullify the express stipulation of the
writ of execution against defendant and the joint and several parties that the surety's obligation should be solidary with that of the
counterbond. The surety, however, moved to quash the writ of defendant.
execution against it, averring that it was not a party to the
compromise, and that the writ was issued without giving the surety
Under the rule and its own terms, the counter-bond is only conditioned
notice and hearing.
upon the rendition of the judgment. Payment under the bond is not
made to depend upon the delivery or availability of the property
ISSUE 1: whether the judgment upon the compromise discharged the
previously attached, as it was under Section 440 of the old Code of
surety from its obligation under its attachment counterbond
Civil Procedure. Where under the rule and the bond the undertaking is
to pay the judgment, the liability of the surety or sureties attaches
HELD 1: Squarely on the point, and rebutting the appellee's
upon the rendition of the judgment, and the issue of an execution and
apprehension that the compromise could be the result of a collusion its return nulla bonais not, and should not be, a condition to the right
between the parties to injure the surety, is our decision in Anzures vs. to resort to the bond. 3
Alto Surety & Insurance Co., Inc., et al., 92 Phil. 742, where this Court,
through former Chief Justice Paras, ruled as follows:
It is true that under Section 17 recovery from the surety or sureties
should be "after notice and summary hearing in the same action". But
Under section 12, Rule 59, of the Rules of Court, the this requirement has been substantially complied with from the time
bond filed, as in this case, for the discharge of an
the surety was allowed to move for the quashal of the writ of
attachment is "to secure the payment to the plaintiff of any execution and for the cancellation of their obligation.
judgment he may recover in the action," and stands "in
place of the property so released". It follows that the order
of cancellation issued by the respondent judge is erroneous.
Indeed, judgment had already been rendered by the Court
of First Instance of Manila in civil case No. 11748,
sentencing Benjamin Aguilar to pay the sum of P3,500.00 to
the petitioner; and it is not pretended that said judgment is
a nullity. There is no point in the contention of the
respondent Surety Company that the compromise was
entered into without its knowledge and consent, thus
becoming as to it essentially fraudulent. The Surety is not a
party to civil case No. 11748 and, therefore, need not be
served with notice of the petition for judgment. As against
the conjecture of said respondent that the parties may easily
connive by means of a compromise to prejudice it, there is
also the likelihood that the same end may be attained by
parties acting in bad faith through a simulated trial. At any
rate, it is within the power of the Surety Company to protect
itself against a risk of the kind.
ISSUE 2: whether the writ of execution could be issued against the

surety without previous exhaustion of the debtor's properties.
HELD 2: SEC. 17. When execution returned unsatisfied, recovery had

upon bond. — If the execution be returned unsatisfied in whole or in
88
PHIL BRITISH ASSURANCE CO. VS. IAC executory judgement but also the execution of a judgment pending
appeal.
FACTS: The records disclose that private respondent Sycwin Coating
& Wires, Inc., filed a complaint for collection of a sum of money
against Varian Industrial Corporation before the Regional Trial Court of
Quezon City. During the pendency of the suit, private respondent
succeeded in attaching some of the properties of Varian Industrial
Corporation upon the posting of a supersedeas bond. 3 The latter in
turn posted a counterbond in the sum of P1,400, 000.00 4 thru
petitioner Philippine British Assurance Co., Inc., so the attached
properties were released.
Varian Industrial Corporation appealed the decision to the respondent

Court. Sycwin then filed a petition for execution pending appeal
against the properties of Varian in respondent Court. Varian was
required to file its comment but none was filed. In the Resolution of
July 5, 1985, respondent Court ordered the execution pending appeal
as prayed for. 6 However, the writ of execution was returned
unsatisfied as Varian failed to deliver the previously attached personal
properties upon demand. In a Petition dated August 13, 1985 filed
with respondent Court Sycwin prayed that the surety (herein
petitioner) be ordered to pay the value of its bond.
ISSUE: whether an order of execution pending appeal of a judgment

maybe enforced on the said bond
HELD: YES. Under Sections 5 and 12, Rule 57 above reproduced it is

provided that the counterbond is intended to secure the payment
of "any judgment" that the attaching creditor may recover in the
action. Under Section 17 of same rule it provides that when "the
execution be returned unsatisfied in whole or in part" it is only then
that "payment of the judgment shall become charged on such
counterbond."
The counterbond was issued in accordance with the provisions of

Section 5, Rule 57 of the Rules of Court as provided in the second
paragraph aforecited which is deemed reproduced as part of the
counterbond. In the third paragraph it is also stipulated that the
counterbond is to be "applied for the payment of the judgment."
Neither the rules nor the provisions of the counterbond limited its
application to a final and executory judgment. Indeed, it is specified
that it applies to the payment of any judgment that maybe recovered
by plaintiff. Thus, the only logical conclusion is that an execution of
any judgment including one pending appeal if returned unsatisfied
maybe charged against such a counterbond.
It is well recognized rule that where the law does not distinguish,
courts should not distinguish.
All that is required is that the conditions provided for by law are
complied with, as outlined in the case of Towers Assurance
Corporation v. Ororama Supermart, 20
Under Section 17, in order that the judgment

creditor might recover from the surety on the
counterbond, it is necessary (1) that the execution
be first issued against the principal debtor and
that such execution was returned unsatisfied in
whole or in part; (2) that the creditor make a
demand upon the surety for the satisfaction of the
judgment, and (3) that the surety be given notice
and a summary hearing on the same action as to
his liability for the judgment under his
counterbond.
The rule therefore, is that the counterbond to lift attachment that is

issued in accordance with the provisions of Section 5, Rule 57, of the
Rules of Court, shall be charged with the payment of any
judgment that is returned unsatisfied. It covers not only a final and
89
DIZON VS. VALDEZ damages was premature. And the lower court thus correctly ruled out
plaintiff's motion. For, Section 17 contemplates of proceedings on
FACTS: Plaintiff Ramon Dizon obtained a favorable judgment for the execution after judgment. And, it is only thereafter that liability upon
recovery of sum of money against defendants Lorenzo J. Valdes, the surety's bond may be determined. The key term in Section 17 is
Valleson, Inc., and Augusto J. Valdes. the phrase "[i]f the execution be returned unsatisfied in whole or in
part." Until such proceeding shall have taken place and unless
On January 11, 1961, Valleson, Inc. filed its notice of appeal. Its unsatisfied liability under the judgment still exists, no action upon the
appeal was perfected on February 11, 1961. counter-bond may be taken against the surety.
Meanwhile, on January 10, 1961, one day before Valleson's notice of ISSUE 2: Plaintiff argues that Sec. 20 is applicable
appeal, plaintiff petitioned for and the trial court directed the issuance
of a writ of preliminary attachment against the properties, real and
personal, of defendants Augusto J. Valdes and Valleson, Inc. upon an HELD 2: Plaintiff is wrong. By its very terms, Sec 20 obviously refers
P11,730-bond. On January 11, said bond having been filed, the to the recovery of damages by a party against whom attachment was
corresponding writ was issued. Pursuant thereto, garnishment notices issued. This is a remedy available to the defendants here, not the
were served by the Manila Sheriff on one Restituto Sibal and the plaintiff.
Philippine Guaranty Co.
It is therefore not to be doubted that, upon the applicable rules, the
On February 9, 1961, the judgment debtors moved to dissolve the writ counter-bond does not answer for damages on account of the lifting of
of attachment, upon an P11,730-counterbond subscribed by the the attachment, but for the payment of the amount due under the
Capital Insurance & Surety Co., Inc. The following day, February 10, judgment that may be recovered by an attaching creditor.
1961, the trial court dissolved the writ.
ISSUE 3: WON plaintiff is entitled to damages on the counterbond for
On February 24, 1961, plaintiff registered a motion to admit its "Claim the reason that the dissolution of the attachment "put out of the reach
for Damages" attached thereto. Plaintiff's claim was that the
of the plaintiff the properties and assets which may be held to answer
dissolution of the attachment "put out of the reach of the plaintiff the
properties and assets which may be held to answer for the adjudged for the adjudged claim
claim"; and that, by reason thereof, "plaintiff suffered and will suffer
damages. HELD 3: NO. The counter-bond, it should be emphasized, precisely
stands "in place of the properties so released."7 Thus, the release of
On March 1, 1961, the surety, Capitol Insurance & Surety Co., Inc., such property cannot really "prejudice the rights of the attaching
opposed. Assertion was made that pursuant to the Rules of Court party."
(then, Section 17, Rule 59; now Section 17, Rule 57), the surety on
any counter-bond shall only become charged and bound to pay
plaintiff upon demand, the amount due under the judgment; and that
such amount may be recovered from the surety after notice and
summary hearing in the same action — only if execution be returned
unsatisfied in whole or in part.
The trial court, in its order of May 16, 1961, ruled that plaintiff's claim
for damages was premature, since the main case was then still
pending appeal.
ISSUE: can plaintiff's claim for damages on defendants' counter-bond

prosper?
HELD: NO. By the terms of the counter-bond itself,1 liability

thereunder attaches only "in case the plaintiff recovers judgment in
the action." Indeed, by Section 12 of Rule 59 of the old Rules, 2 the law
in force at the time the counterbond was executed, the statutory
counter-bond was made "to secure the payment to the plaintiff of any
judgment he may recover in the action." Complementary to this legal
precept is Section 17 of the same Rule 59 of the old Rules 3 — which
should be deemed as read into the bond — viz:
Sec. 17. When execution returned unsatisfied, recovery had

upon bond. — If the execution be returned unsatisfied in
whole or in part, the surety or sureties on any bond given
pursuant to the provisions of this rule to secure the payment
of the judgment shall become finally charged on such bond,
and bound to pay to the plaintiff 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.
Since at the time the claim for damages was registered, the case was
still pending appeal, it is quite obvious that the motion for the claim for
90
SECTION 20.
91

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RULE 57 CASE DIGESTS

Attachment may be issued only in the case or actions specifically

A receiver may be appointed to take charge of personal or real

Delivery of personal property as a provisional remedy consists in the

Undoubtedly, according to law, the provisional remedy proper

(d) In an action against the party who has been

CORPORATION. Defendants CORPORATION and

There being no showing, much less an allegation, that the defendants

GENERAL VS. DEVENECIA

FACTS: A complaint was filed by Ruedas against Luis General. That

It prayed additionally for preliminary attachment of defendant's

Having been served with summons, the defendant therein, Luis F.

On the question of validity of the attachment, "the general

MIALHE VS. DE LENCQUESAING or by any other person in a fiduciary capacity, or

On May 17, 1983, respondent thru counsel filed a motion to lift or

ISSUE: Can an attachment issue based on unliquidated damages?

HELD: Section 1 of Rule 57 of the Rules of Court provides —

SEC. 1. Grounds upon which attachment may

(a) In an action for the recovery of money or

(b) In an action for money or property embezzled

INSULAR SAVINGS BANK VS. CA

While the dispute was pending arbitration, on January 17, 1992,

During the hearing on February 11, 1992 before the Arbitration

ISSUE: Should exemplary damages, legal interest, attorney‘s fees and

TAN VS. ZANDUETA

ISSUE: Is an attachment proper in this situation? YES.

HELD: We find that the writ of preliminary attachment was issued in

ISSUE: Can officers of the corporation be held liable for spending

HELD: Having, as he had, absolute and almost exclusive control over

SANTOS VS. BERNABE

FACTS: On March 20, 1928, there were deposited in Jose C. Bernabe's

The plaintiff-appellee Urbano Santos contends that Pablo Tiongson

ISSUE: Can you attach your own property?

HELD: NO, in such case, REPLEVIN would be the proper

Liberally construing, therefore, the above cited provisions of section

Art. 381. If, by the will of their owners, two things of

The number of kilos in a cavan not having been determined, we will

Petitioner foreclosed its real estate mortgage on the two lots in

The court, through Judge Antonio Martinez, issued a writ of

It can hardly be doubted that those representations in petitioner's

By virtue of the writ of preliminary attachment, the provincial sheriff

Petitioner alleges that defendant is on the verge of insolvency and may

It is an undisputed fact that, as averred by petitioner itself, the several

ISSUE: WON insolvency may be a ground for the issuance of a writ of

HELD: This cannot be the removal intended as ground for the

Moreover, as the buses were mortgaged to the DBP, their removal or

The dwindling of respondent's bank account despite its daily income of

It is, indeed, extremely hard to remove the buses, machinery and

PEOPLE‟S BANK & TRUST CO. VS. SYVEL‟S INC.

FACTS: This is an action for foreclosure of chattel mortgage executed

However, because of an attempt to have the matter settled, the extra-

On petition of the plaintiff based on the affidavits executed by Mr.

ISSUE: How do you determine intent to defraud?

HELD: The actuations of appellants (Syvel‘s Inc) were clearly seen by

The complaint in Civil Case No. CEB-1185 alleged that petitioner

ISSUE: Can you infer „intent to defraud creditors‟ by a mere

HELD: NO. We find, however, that there is no factual allegation which

Bare allegation that an encumbrance of a property is in fraud of the

The execution of a mortgage in favor of another creditor is not

Furthermore, the inability to pay one's creditors is not necessarily