1.

PHILIPPINE BANK OF COMMUNICATIONS vs. HON. COURT OF APPEALS and BERNARDINO VILLANUEVA

G.R. No. 115678. February 23, 2001

PHILIPPINE BANK OF COMMUNICATIONS vs. HON. COURT OF APPEALS and FILIPINAS TEXTILE MILLS, INC.

G.R. No. 119723. February 23, 2001

FACTS:

Petitioner filed Complaint against private respondent Bernardino Villanueva, private respondent Filipinas Textile
Mills and one Sochi Villanueva (now deceased) before the Regional Trial Court of Manila seeking for the payment of
P2,244,926.30 representing the proceeds or value of various textile goods, the purchase of which was covered by
irrevocable letters of credit and trust receipts executed by petitioner with private respondent Filipinas Textile Mills as
obligor; which, in turn, were covered by surety agreements executed by private respondent Bernardino Villanueva and
Sochi Villanueva. In their Answer, private respondents admitted the existence of the surety agreements and trust
receipts but countered that they had already made payments on the amount demanded and that the interest and other
charges imposed by petitioner were onerous.

Thus, petitioner filed a Motion for Attachment, contending that violation of the trust receipts law constitutes
estafa, thus providing ground for the issuance of a writ of preliminary attachment; specifically under paragraphs “b” and
“d,” Section 1, Rule 57 of the Revised Rules of Court. Petitioner further claimed that attachment was necessary since
private respondents were disposing of their properties to its detriment as a creditor. Finally, petitioner offered to post a
bond for the issuance of such writ of attachment. The lower court ordered for the issuance of a writ of preliminary
attachment, conditioned upon the filing of an attachment bond. Hence, private respondents filed separate petitions for
certiorari before respondent Court assailing the order granting the writ of preliminary attachment.

Both petitions were granted. Respondent Court of Appeals ruled that the lower court was guilty of grave abuse
of discretion in not conducting a hearing on the application for a writ of preliminary attachment and not requiring
petitioner to substantiate its allegations of fraud, embezzlement or misappropriation. In the other case, CA found that
the grounds cited by petitioner in its Motion do not provide sufficient basis for the issuance of a writ of preliminary
attachment, they being mere general averments. Respondent Court of Appeals held that neither embezzlement,
misappropriation nor incipient fraud may be presumed; they must be established in order for a writ of preliminary
attachment to issue. Hence, this petition.

ISSUE/S:

1. Whether or not there was no sufficient basis for the issuance of the writ of preliminary attachment in spite
of the allegations of fraud, embezzlement and misappropriation of the proceeds or goods entrusted to the
private respondents.
2. Whether or not failure of FTMI and Villanueva to remit the proceeds or return the goods entrusted, in
violation of private respondents’ fiduciary duty as entrustee, constitute embezzlement or misappropriation
which is a valid ground for the issuance of a writ of preliminary attachment.
RULING:

The petitions are denied and the CA decisions are affirmed.

It was held that the Motion for Attachment filed by petitioner and its supporting affidavit did not sufficiently
establish the grounds relied upon in applying for the writ of preliminary attachment. Section 1(b) and (d), Rule 57 of the
then controlling Revised Rules of Court, provides, to wit –

SECTION 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:

xxx xxx xxx

(b) In an action for money or property embezzled or fraudulently misapplied or converted to his use by a public
officer, or an officer of a corporation, or an attorney, factor, broker, agent or clerk, in the course of his employment as
such, or by any other person in a fiduciary capacity, or for a willful violation of duty;

xxx xxx xxx

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

xxx xxx xxx

While the Motion refers to the transaction complained of as involving trust receipts, the violation of the terms
of which is qualified by law as constituting estafa, it does not follow that a writ of attachment can and should
automatically issue. Petitioner cannot merely cite Section 1(b) and (d), Rule 57, of the Revised Rules of Court, as mere
reproduction of the rules, without more, cannot serve as good ground for issuing a writ of attachment. An order of
attachment cannot be issued on a general averment, such as one ceremoniously quoting from a pertinent rule.

Furthermore, this particular provision was adequately explained in Liberty Insurance Corporation v. Court of
Appeals, as follows: x x x To constitute a ground for attachment in Section 1 (d), Rule 57 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 preconceived plan or intention not to pay. Fraud is a state of mind and need not be
proved by direct evidence but may be inferred from the circumstances attendant in each case.”

Time and again, SC had held that the rules on the issuance of a writ of attachment must be construed strictly
against the applicants. This stringency is required because the remedy of attachment is harsh, extraordinary and
summary in nature. If all the requisites for the granting of the writ are not present, then the court which issues it acts in
excess of its jurisdiction.
2.

FCY CONSTRUCTION GROUP, INC., and FRANCIS C. YU vs. THE COURT OF APPEALS, THE HON. JOSE C. DE LA RAMA,
Presiding Judge, Branch 139, Regional Trial Court, NCJR, Makati City, Metro Manila, and LEY CONSTRUCTION AND
DEVELOPMENT CORPORATION

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

FACTS:

Private respondent Ley Construction and Development Corporation filed a Complaint for collection of a sum of
money with application for preliminary attachment against petitioner FCY Construction Group, Inc. and Francis C. Yu
with the Makati Regional Trial Court. It alleged that it had a joint venture agreement with petitioner FCY Construction
Group, Inc. (wherein petitioner Francis C. Yu served as President) over the Tandang Sora Commonwealth Flyover
government project for which it had provided funds and construction materials. The Complaint was filed in order to
compel petitioners to pay its half share in the collections received in the project as well as those yet to be received
therein. In support of its application for a writ of attachment, private respondent alleged that petitioners were guilty of
fraud in incurring the obligation and had fraudulently misapplied or converted the money paid them, to which it had an
equal share.

Following an ex-parte hearing, the lower court issued an Order for the issuance of a writ of preliminary
attachment, conditioned upon the filing of a P7,000,000.00 attachment bond. Thus, petitioners moved for the lifting of
the writ of preliminary attachment on the following grounds: (1) the attachment was heard, issued and implemented
even before service of summons upon them; (2) failure of the attaching officer to serve a copy of the affidavit of merit
upon them; and (3) that there was no fraud in incurring the obligation. However, said Motion to Lift was denied.
Subsequently, petitioners filed a Motion for Reconsideration as well as an Omnibus Motion for Leave to file Amended
Answer and/or to delete Francis C. Yu as party-defendant.

Petitioners filed a Petition for Certiorari before the Court of Appeals which was, however, denied. Hence, the
Petition.

ISSUE/S:

Whether or not the writ of preliminary attachment was regularly issued despite absence of evidence of fraud in
incurring the obligations sued upon.

RULING:

The petition was DISMISSED.

It was held that the questioned writ of attachment was anchored upon Section 1(d), Rule 57 of the Revised
Rules of Court, to wit -

"SECTION 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:

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

xxx xxx x x x."

In Liberty Insurance Corporation vs. Court of Appeals, this Court, discussing Section 1(d), Rule 57, cautioned as
follows --

“ x x x The fraud must relate to the execution of the agreement and must have been the reason which induced the other
party into giving consent which he would not have otherwise given. To constitute a ground for attachment in Section 1
(d), Rule 57 of the Rules of Court, fraud should be committed upon contracting the obligation sued upon.x x x “

Furthermore, it was ruled that as held in the case of Mindanao Savings and Loan Assoc. vs. Court of Appeals
(172 SCRA 480): "x x x, when the preliminary attachment is issued upon a ground which is at the same time the
applicant's cause of action: e.g., x x x an action against a party who has been guilty of fraud in contracting the debt or
incurring the obligation upon which the action is brought, the defendant is not allowed to file a motion to dissolve the
attachment under Section 13 of Rule 57 by offering to show the falsity of the factual averments in the plaintiff’s
application and affidavits on which the writ was based and consequently that the writ based therein had been
improperly or irregularly issued - the reason being that the hearing on such motion for dissolution of the writ would be
tantamount to a trial on the merits. In other words, the merits of the action would be ventilated at a mere hearing of a
motion; instead of the regular trial. Therefore, when the writ of attachment is of this nature, the only way it can be
dissolved is by a counterbond."
3.

DAVAO LIGHT & POWER CO., INC. vs.THE COURT OF APPEALS, QUEENSLAND HOTEL or MOTEL or QUEENSLAND
TOURIST INN, and TEODORICO ADARNA

G.R. No. 93262 December 29, 1991

FACTS:

Petitioner Davao Light and Power Inc, Co. filed a complaint for recovery of sum of money and damages against
Queensland Tourist Inn and Teodorico Adarna. The complaint contained an ex-parte application for a writ of preliminary
attachment.

Judge Nartatez granted the writ and fixed the attachment bond at around P4Million. The summons, copy of
complaint, writ of attachment, copy of attachment bond were served upon Queensland and Adarna. Pursuant to the
writ, the Sheriff seized the properties of the latter.

Respondents Queensland and Adarna filed a motion to discharge the attachment for lack of jurisdiction to issue
the same because at the time the order of attachment was promulgated (May 3, 1989) and the attachment writ issued
(May 11,1989), the Trial Court had not yet acquired jurisdiction over cause and person of defendants.

Trial Court denied the motion to discharge. CA annulled the Trial Court’s Order. Hence, petitioner seeks to
reverse CA’s order.

ISSUE/S:

Whether or not preliminary attachment may be issued ex-parte against a defendant before acquiring jurisdiction
over his person.

RULING:
Yes. Rule 57 speaks of the grant of the remedy “at the commencement of the action or at any time thereafter”
What the rule is saying is that after an action is properly commenced (by filing of the complaint and payment of all
requisite docket and other fees), the plaintiff may apply for and obtain a writ of preliminary attachment. This he may do
so, before or after, the summons to the defendant.
The CA decision is reversed and the writ of attachment issued by Judge Nartatez is reinstated.

**
Preliminary Attachment – provisional remedy in virtue of which a plaintiff or other party may, at the commencement of
the action or at any time thereafter, have the property of the adverse party taken into custody of court as security for
satisfaction of judgment to be recovered.

Nature of Attachment: a remedy which is purely statutory in respect of which the law requires a strict of construction of
the provisions granting it. No principle, whether statutory or through jurisprudence, prohibits its issuance by any court
before the acquisition of jurisdiction over the person.
4.

ELEAZAR V. ADLAWAN and ELENA S. ADLAWAN vs. Hon. Judge RAMON AM. TORRES, as Presiding Judge of Branch 6,
Regional Trial Court Cebu City, ABOITIZ & COMPANY, INC. and THE PROVINCIAL SHERIFFS OF CEBU, DAVAO, RIZAL and
METRO MANILA, Respectively

G.R. Nos. 65957-58 July 5, 1994

FACTS:
Respondent Aboitiz and Company, Inc. sought to collect from petitioners a sum of money representing
payments for: (1) the unpaid amortizations of a loan; (2) technical and managerial services rendered; and (3) the unpaid
installments of the equipment provided by respondent Aboitiz to petitioners. Series of motions were filed by both
parties. However, the main action being questioned in this case is the writ of preliminary attachment for the seizure of
the property of petitioners by respondent Provincial Sheriffs issued by respondent Judge Ramon AM. Torres.

ISSUE/S:
Whether or not the writ of attachment issued by respondent judge in the consolidated cases for sums of money
filed by Aboitiz and Company against the Spouses Adlawan is legal.

RULING:

The petition was granted. The affidavit submitted by respondent Aboitiz in support of its prayer for the writ of
attachment does not meet the requirements of Rule 57 of the Revised Rules of Court regarding the allegations on
impending fraudulent removal, concealment and disposition of defendant's property. As held in Carpio v. Macadaeg, 9
SCRA 552 (1963), to justify a preliminary attachment, the removal or disposal must have been made with intent to
defraud defendant's creditors. Proof of fraud is mandated by paragraphs (d) and (e) of Section 1, Rule 57 of the Revised
Rules of Court on the grounds upon which attachment may issue. Thus, the factual basis on defendant's intent to
defraud must be clearly alleged in the affidavit in support of the prayer for the writ of attachment if not so specifically
alleged in the verified complaint.

It is evident from said affidavit that the prayer for attachment rests on the mortgage by petitioners of 11 parcels of land
in Cebu, which encumbrance respondent Aboitiz considered as fraudulent concealment of property to its prejudice. We
find, however, that there is no factual allegation which may constitute as a valid basis for the contention that the
mortgage was in fraud of respondent Aboitiz. 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 (Insular Bank of Asia & America, Inc. v. Court of Appeals, 190 SCRA 629 [1990]).

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 (D.P. Lub Oil Marketing Center, Inc. v. Nicolas, 191 SCRA 423 [1990]).
5.

RICARDO CUARTERO vs. COURT OF APPEALS, ROBERTO EVANGELISTA and FELICIA EVANGELISTA

G.R. No. 102448 August 5, 1992

FACTS:

Cuartero filed a complaint before the RTC of QC against the spouses Evangelista for a sum of money plus
damages with a prayer for the issuance of a writ of preliminary attachment. The writ of preliminary attachment was
issued pursuant to the trial court’s order. A copy of the writ of preliminary attachment, the order, the summons and the
complaint were all simultaneously served upon the spouses Evangelista at their residence. Immediately thereafter,
Deputy Sheriff Sila levied, attached and pulled out the properties in compliance with the court's directive to attach all
the properties of the spouses not exempt from execution, or so much thereof as may be sufficient to satisfy the
Cuartero's principal claim in the amount of P2,171,794.91.
Subsequently, the spouses filed motion to set aside the order and discharge the writ of preliminary attachment
for having been irregularly and improperly issued. RTC denied the motion for lack of merit. Spouses Evangelista then
filed a special civil action for certiorari with the CA questioning the orders of the lower court with a prayer for a
restraining order or writ of preliminary injunction to enjoin the judge from taking further proceedings below.
CA nullified the orders of the RTC and cancelled the writ of preliminary attachment. It grounded its decision on
its finding that the RTC did not acquire any jurisdiction over the person of the private respondents: “It is not disputed
that neither service of summons with a copy of the complaint nor voluntary appearance of petitioners was had in this
case before the trial court issued the assailed order, as well as the writ of preliminary attachment.” MR filed by Cuartero
was denied for lack of merit. Hence, this petition.

ISSUE/S:
1. Whether or not issuance of writ of preliminary attachment is valid.
2. Whether or not notice to the adverse party or hearing of the application for the writ is required.
3. When can one file a writ of preliminary attachment.
4. Whether or not summons must be served first before issuance of the writ.

RULING:
Petition granted. CA decision is reversed. Order and writ of attachment issued by the RTC Judge are reinstated.

1. Yes. 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.
2. As has been expressly ruled in BF Homes, Inc. v. Court of Appeals, citing Mindanao Savings and Loan Association,
Inc. v. Court of Appeals, 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.  No merit in the spouses’ claim of violation of their constitutionally guaranteed right to
due process.
3. 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).
a. In Davao Light and Power, Co., Inc. v. Court of Appeals, the phrase "at the commencement of the action"
is interpreted as referring to the date of the filing of the complaint which is a time before summons is
served on the defendant or even before summons issues.
4. A writ of preliminary attachment may issue even before summons is served upon the defendant. However, we
have likewise ruled that the writ cannot bind and affect the defendant until jurisdiction over his person is
eventually obtained. Therefore, it is required that when the proper officer commences implementation of the
writ of attachment, service of summons should be simultaneously made.
a. In Davao Light and Power, Co., Inc. v. Court of Appeals, the Court said it is incorrect to theorize that after
an action or proceeding has been commenced and jurisdiction over the person of the plaintiff has been
 vested in the Court, but before acquisition of jurisdiction over the person of the defendant (either by
service of summons or his voluntary submission to the Court's authority), nothing can be validly done by
the plaintiff or the Court. It is wrong to assume that the validity of acts done during the period should be
dependent on, or held in suspension until, the actual obtention of jurisdiction over the defendants
person. The obtention by the court of jurisdiction over the person of the defendant is one thing; quite
another is the acquisition of jurisdiction over the person of the plaintiff or over the subject matter or
nature of the action, or the res or object thereof.
b. It must be emphasized that the grant of the provisional remedy of attachment practically involves three
stages: first, the court issues the order granting the application; second, the writ of attachment issues
pursuant to the order granting the writ; and third, the writ is implemented. For the initial two stages, it
is not necessary that jurisdiction over the person of the defendant should first be obtained. However,
once the implementation commences, it is required that the court must have acquired jurisdiction over
the defendant for without such jurisdiction, the court has no power and authority to act in any manner
against the defendant. Any order issuing from the Court will not bind the defendant.
c. NOTE: In the case at bar, when the writ of attachment was served on the spouses Evangelista, the
summons and copy of the complaint were also simultaneously served.

Furthermore, the question as to whether a proper ground existed for the issuance of the writ is a question of fact
the determination of which can only be had in appropriate proceedings conducted for the purpose. It must be noted
that the spouses Evangelista's motion to discharge the writ of preliminary attachment was denied by the lower court for
lack of merit. There is no showing that there was an abuse of discretion on the part of the lower court in denying the
motion. Moreover, an attachment may not be dissolved by a showing of its irregular or improper issuance if it is upon a
ground which is at the same time the applicant's cause of action in the main case. Re issue of fraud is within the
competence of the lower court in the main action.
6.
ALBERTO SIEVERT vs. COURT OF APPEALS, HON. JUDGE ARTEMON D. LUNA and AURELIO CAMPOSANO

G.R. No. 84034 December 22, 1988

FACTS:

Petitioner Alberto Sievert, a citizen and resident of the Philippines received by mail a Petition for Issuance of a
Preliminary Attachment filed with the Regional Trial Court of Manila Branch 32. Petitioner had not previously received
any summons and any copy of a complaint against him in a civil case. Petitioner prayed for denial of that Petition for lack
of jurisdiction over the person of the petitioner (defendant therein) upon the ground that since no summons had been
served upon him in the main case, no jurisdiction over the person of the petitioner had been acquired by the trial court.

The trial court denied the petitioner's objection and issued in open court an order. Thereupon, on the same day,
petitioner filed a Petition for certiorari with the Court of Appeals. The respondent appellate court rendered a decision
dismissing the Petition. Hence, the petition.

ISSUE/S:

Whether or not a court which has not acquired jurisdiction over the person of the defendant in the main case,
may bind such defendant or his property by issuing a writ of preliminary attachment.

RULING:

The petition is granted. The Supreme Court disagreed with the decisions of the two lower courts. It was held
that 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. 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.

The prayer in a petition for a writ of preliminary attachment is embodied or incorporated in the main complaint
itself as one of the forms of relief sought in such complaint. Thus, valid service of summons and a copy of the complaint
will in such case vest jurisdiction in the court over the defendant both for purposes of the main case and for purposes of
the ancillary remedy of attachment. In such case, notice of the main case is at the same time notice of the auxiliary
proceeding in attachment. Where, however, the petition for a writ of preliminary attachment is embodied in a discrete
pleading, such petition must be served either simultaneously with service of summons and a copy of the main complaint,
or after jurisdiction over the defendant has already been acquired by such service of summons.
7.
K.O. GLASS CONSTRUCTION CO., INC. vs.THE HONORABLE MANUEL VALENZUELA, Judge of the Court of First Instance
of Rizal, and ANTONIO D. PINZON

G.R. No. L-48756 September 11, 1982

FACTS:

An action was instituted in the Court of First Instance of Rizal by Antonio D. Pinzon to recover from Kenneth O.
Glass the sum of P37,190.00, alleged to be the agreed rentals of his truck, as well as the value of spare parts which have
not been returned to him upon termination of the lease. In his verified complaint, the plaintiff asked for an attachment
against the property of the defendant consisting of collectibles and payables with the Philippine Geothermal, Inc., on the
grounds that the defendant is a foreigner; that he has sufficient cause of action against the said defendant; and that
there is no sufficient security for his claim against the defendant in the event a judgment is rendered in his favor. Finding
the petition to be sufficient in form and substance, the respondent Judge ordered the issuance of a writ of attachment
against the properties of the defendant upon the plaintiff's filing of a bond in the amount of P37,190.00.

The defendant Kenneth O. Glass moved to quash the writ of attachment on the grounds that there is no cause of
action against him since the transactions or claims of the plaintiff were entered into by and between the plaintiff and
the K.O. Glass Construction Co., Inc., a corporation duly organized and existing under Philippine laws; that there is no
ground for the issuance of the writ of preliminary attachment as defendant Kenneth O. Glass never intended to leave
the Philippines, and even if he does, plaintiff can not be prejudiced thereby because his claims are against a corporation
which has sufficient funds and property to satisfy his claim; and that the money being garnished belongs to the K.O.
Glass Corporation Co., Inc. and not to defendant Kenneth O. Glass. By reason thereof, Pinzon amended his complaint to
include K.O. Glass Construction Co., Inc. as co-defendant of Kenneth O. Glass.

Consequently, herein petitioner filed a supplementary motion to discharge and/or dissolve the writ of
preliminary attachment upon the ground that the affidavit filed in support of the motion for preliminary attachment was
not sufficient or wanting in law; but, the respondent Judge denied the motion and ordered the Philippine Geothermal,
Inc. to deliver and deposit with the Clerk of Court the amount of P37,190.00 immediately upon receipt of the order
which amount shall remain so deposited to await the judgment to be rendered in the case.

The petitioner 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; but, the respondent Judge did not order the release of the money deposited.
Hence, the present recourse.

ISSUE/S:

Whether or not respondent Judge gravely abused his discretion in issuing the writ of preliminary attachment
and in not ordering the release of the money which had been deposited with the Clerk of Court.

RULING:

The petition was granted. It was held that in pleading for attachment against a foreigner, allegation must not be
merely that defendant is a foreigner; there must also be a showing that defendant is about to leave the Philippines with
intent to defraud their creditor, or that he is a non-resident alien.

Requisites for issuance of writ of attachment:

1. a sufficient cause of action exists;

2. case is one of those mentioned in Sec 1(a) of Rule 57;

3. there is no other sufficient security for the claim sought to be enforced by the action;

4. the amount due to the applicant for attachment or the value of the property of which he is entitled to recover is as
much as the sum for which the order is granted above all legal counterclaims.

Besides, once defendant files a counter-bond, the writ of attachment should be dissolved.
8.

JARDINE-MANILA FINANCE, INC. vs. COURT OF APPEALS, IMPACT CORPORATION, RICARDO DE LEON and EDUARDO
DE LEON

G.R. No. 55272 April 10, 1989

FACTS:

Petitioner Jardine-Manila Finance, Inc. (JARDINE) filed a complaint in the then Court of First Instance (CFI) of
Rizal 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. Herein private respondents Ricardo de Leon and Eduardo de Leon were included as defendants by
virtue of their undertaking covered by a Surety Agreement under which they bound themselves jointly and severally
with defendant IMPACT to pay herein petitioner all of IMPACT's obligations under the aforesaid agreement.

JARDINE demanded payment of P 1,000,212.64, the total amount due under said various deeds of assignment,
plus interest of P 16,614.64 as of September 6, 1979 and 25 % of the aforesaid amount as attorney's fees, exemplary
damages and other expenses of litigation. Likewise contained in said complaint is petitioner's application for a writ of
preliminary attachment against private respondents.

The lower court granted JARDINE's petition for the issuance of a writ of preliminary attachment. 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.

The trial court denied defendant's motion to annul the writ of preliminary attachment. Thereupon, defendant
Impact Corporation went to the appellate court on a petition for certiorari seeking to annul said writ.

The Court of Appeals annulled the assailed writ of attachment for having been issued improperly and irregularly.
Hence this recourse.

ISSUE/S:

Whether or not non-compliance with the formal requirements invalidate the writ of attachment.

RULING:

Petition is DENIED. CA decision is AFFIRMED.

The authority to issue an attachment, like the jurisdiction of the court over such proceedings rests on express
statutory provisions and unless there is authority in the statute, there is no power to issue the writ, and such authority
as the statute confers must be strictly construed. In fact, "(E)ven where liberal construction is the rule, the statute or the
right to attachment thereby granted may not be extended by judicial interpretation beyond the meaning conveyed by
the words of the statute." Petitioner's application for a writ of preliminary attachment must therefore be scrutinized and
assessed by the requisites and conditions specifically prescribed by law for the issuance of such writ.
 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 prescribed by law, said writ is, as it is hereby declared null and void and of no effect whatsoever.
9.

TERESITA P. ARELLANO vs. JUDGE NAPOLEON R. FLOJO, FELINO BANGALAN, Clerk of Court III, HERMINIO DEL
CASTILLO, RTC-OCC.; LUCINO JOVE, Deputy Sheriff

A.M. No. RTJ-93-1008 November 14, 1994

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 —

(a) Judge Napoleon R. Flojo, then Presiding Judge of the aforementioned Branch 6, now assigned as Presiding Judge of
Branch 2 of the Regional Trial Court of Manila, for having irregularly issued an order dated January 21, 1986 for the
issuance of a writ of attachment in the said case on the same date despite the lack of legal basis therefor.

(b) 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.

(c) Herminio del Castillo, Branch Clerk of Court of the Aparri RTC for deliberately delaying the issuance of service of
summons on the defendant.

(d) Luciano Jove, Deputy Sheriff, Aparri, Cagayan — for seizing a vehicle not owned by the defendant and entrusting the
custody thereof to Sheriff Guards Rodolfo Auringan and Dioniso Co., Jr., instead of personally keeping it under his
custody, resulting in the said vehicle being cannibalized to the damage and prejudice of the complainant and the heirs of
the late Ruperto Arellano.

The complaint against Clerk of Court Herminio del Castillo was dismissed for lack of merit by the Court in its Resolution
dated June 28, 1993, as he did not appear to have had any participation in the issuance and service of summons on the
defendant in the aforementioned civil case (pp. 42-43, Rollo.)

With respect to Judge Napoleon R. Flojo, inasmuch as the charges against him were mere reiterations of the charges
filed by the same complainant in A.M. Case No. RTJ-86-52 which had been earlier dismissed for lack of merit by the Court
en banc on March 24, 1987, the instant complaint against him was likewise dismissed.

Thereafter, the case was referred to Justice Ramon A. Barcelona of the Court of Appeals, for investigation, report, and
recommendation in regard to the remaining respondents.

ISSUE/S:

Whether or not Bangalan and Jove erred in the performance of their duties with regards the issuance and
execution of the writ.
RULING:

The Court found Judge Felino Bangalan and Sheriff Lucinio Jove are hereby each fined the amount of FIVE
THOUSAND PESOS (P5,000.00), with the severe warning that a repetition of the same or similar acts in the future will be
dealt with more severely.

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; having caused the implementation through Sheriff Jove, of the said
writ of attachment on January 23, 1986, knowingly fully well that no summons had as yet been issued and served as of
said date upon defendant therein in violation of Section 5, Rule 57 of the Rules of Court and Section 3, Rule 14 of the
same rules.

As for Sheriff Jove, Justice Barcelona found that in serving the writ of attachment, the sheriff did not serve the same on
the defendant but on somebody whom he suspected only as holding the property of the complainant. He failed to verify
the ownership of the cargo truck he attached. To compound the sheriff's failure to exercise diligence in the execution of
the writ of attachment, he surrendered the custody of the property to the two alleged guards instead of depositing the
same in a bonded warehouse.
10.
H.B. ZACHRY COMPANY INTERNATIONAL vs.HON. COURT OF and VINNEL-BELVOIR CORPORATION

G.R. No. 106989 May 10, 1994

VINNEL-BELVOIR CORPORATION vs.THE COURT OF APPEALS and H.B. ZACHRY COMPANY INTERNATIONAL

G.R. No. 107124 May 10, 1994

FACTS:

VBC filed a Complaint with the Regional Trial Court (RTC) of Makati against Zachry for the collection of
the payments due it with a prayer for a writ of preliminary attachment over Zachry's bank account in Subic Base and
over the remaining thirty-one undelivered housing units which were to be turned over to the US Navy by Zachry.
Paragraph 2 of the Complaint alleges that defendant Zachry "is a foreign corporation with address at 527 Longwood
Street, San Antonio, Texas, U.S.A. and has some of its officers working at U.S. Naval Base, Subic Bay, Zambales where it
may be served with summons."
The trial court issued an order granting the application for the issuance of the writ of preliminary attachment
and fixing the attachment bond at P24,266,000.00. VBC put up the required bond and the trial court issued the writ of
attachment, which was served, together with the summons, a copy of the complaint with annexes, the bond, and a copy
of the order of attachment.

Zachry filed a motion to dismiss the complaint 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 and, pursuant to Section 128 of the
Corporation Code of the Philippines, it had appointed Atty. Lucas Nunag 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.

Zachry filed an Omnibus Motion (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 pointed out; and (b) to dissolve the writ
of attachment of "for having been issued without jurisdiction, having been issued prior to the service of summons."

The trial court denied the motion. Later, MR was also denied. As a result, Zachry filed a petition with the CA
which dissolved the writ of preliminary attachment but decided the other issues in favour of VBC. Hence, the petitions
filed by both parties.

ISSUE/S:

Whether or not the issuance of the writ of preliminary attachment prior to the service of the summons is valid.

RULING:

The Court found for petitioner VBC.

It was ruled that the writ of attachment cannot be validly enforced through the levy of Zachry's property before
the court had acquired jurisdiction over Zachry's person either through its voluntary appearance or the valid service of
summons upon it. To put it in another way, a distinction should be made between the issuance and the enforcement of
the writ. The trial court has unlimited power to issue the writ upon the commencement of the action even before it
acquires jurisdiction over the person of the defendant, but enforcement thereof can only be validly done after it shall
have acquired such jurisdiction.
11.

PCL Industries Manufacturing Corporation vs. The COURT OF APPEALS and ASA Color & Chemical Industries, Inc.

G.R. No. 147970. March 31, 2006

FACTS:

Private respondent filed a complaint with the RTC for Sum of Money with Preliminary Attachment against herein
petitioner. Private respondent claims that during the period from January 18, 1994 to April 14, 1994, petitioner
purchased and received from it various printing ink materials with a total value of P504,906.00, payable within 30 days
from the respective dates of invoices; and that petitioner, in bad faith, failed to comply with the terms of the sale and
failed to pay its obligations despite repeated verbal and written demands.

Petitioner was served with summons together with the Writ of Preliminary Attachment on October 20, 1995. On
October 23, 1995, petitioner filed a Motion to Dissolve and/or Discharge Writ of Preliminary Attachment. On November
20, 1995, the trial court issued an Order denying petitioner’s motion to dissolve the writ of preliminary attachment.
Petitioner’s motion for reconsideration of said order was also denied per Order dated January 2, 1996. Petitioner no
longer elevated to the higher courts the matter of the propriety of the issuance of the writ of preliminary attachment.

The trial court ruled in favor of herein private respondent. The RTC Decision was appealed by herein petitioner
to the CA. The latter affirmed the decision of the former. Hence, the petition.

ISSUE/S:

Whether or not Court of Appeals acted with grave abuse of discretion in issuing a writ of preliminary attachment
ex-parte without any legal basis and on the grounds not authorized under Rule 57 of the Rules of Court.

RULING:

It was held that it should be pointed out that petitioner mistakenly stated that it was the CA that issued the writ of
preliminary attachment. Said writ was issued by the trial court. On appeal, the CA merely upheld the trial court’s order,
ruling that herein private respondent’s affidavit was sufficient basis for the issuance of the writ because it stated that
petitioner had the intention of defrauding private respondent by agreeing to pay its purchases within 30 days but then
refused to pay the same once in possession of the merchandise.

The Court, however, finds the issuance of the Writ of Preliminary Attachment to be improper. It has been
repeatedly ruled that “To constitute a ground for attachment in Section 1 (d), Rule 57 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 preconceived plan or intention not to pay, as it is in this case. Fraud is a state of mind and need not
be proved by direct evidence but may be inferred from the circumstances attendant in each case (Republic v. Gonzales,
13 SCRA 633).”

The Court found that there is an absence of factual allegations as to how the fraud alleged by petitioner was
committed. As correctly held by respondent Court of Appeals, such fraudulent intent not to honor the admitted
obligation cannot be inferred from the debtor’s inability to pay or to comply with the obligations.

Hence, the Court finds the writ improper, therefore, the attachment over any property of petitioner by
the writ of preliminary attachment is ordered LIFTED by the Supreme Court.