Preliminary attachment not binding until jurisdiction over the person of the defendant is acquired.
The writ of preliminary
1. DAVAO LIGHT VS. CA
Davao Light & Power Co., Inc. (hereafter, simply Davao Light) filed a verified complaint for recovery of a sum of money and
damages against Queensland Hotel, etc. and Teodorico Adarna (docketed as Civil Case No. 19513-89). The complaint contained
an ex parte application for a writ of preliminary attachment.
Judge Nartatez, to whose branch the case was assigned by raffle, issued an Order granting the ex parte application and fixing
the attachment bond at P4,600,513.37.
Thereafter, the attachment bond having been submitted by Davao Light, the writ of attachment issued. The summons and a
copy of the complaint, as well as the writ of attachment and a copy of the attachment bond, were served on defendants
Queensland and Adarna; and pursuant to the writ, the sheriff seized properties belonging to the latter.
On September 6, 1989, defendants 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 the cause and over the persons of the defendants.
Trial court denied the motion to discharge.
CA annulled the RTCs order. Davao light seeks to reverse CAs order.
ISSUE: Whether or not the writ of preliminary attachment was validly issued.
RULING: YES.
A writ of preliminary attachment may be issued before the court acquires jurisdiction over the person of the defendant.
The court may validly issue a writ of preliminary injunction prior to the acquisition of jurisdiction over the person of the
defendant. There is an appreciable period of time between the commencement of the action (takes place upon the filing of an
initiatory pleading) and the service of summons to the defendant. In the meanwhile, there are a number of actions which the
plaintiff or the court may validly take, including the application for and grant of the provisional remedy of preliminary
attachment. There is nothing in the law which prohibits the court from granting the remedy prior to the acquisition of
jurisdiction over the person of the defendant.
In fact, Rule 57 of the Rules of Court allows the granting of a writ of preliminary injunction at the commencement of the suit. In
the cases of Toledo v. Burgos and Filinvest Credit Corporation v. Relova, it was held that notice and hearing are not
prerequisites to the issuance of a writ of preliminary attachment. Further, in the case of Mindanao Savings & Loan Association,
Inc. v. Court of Appeals, it was ruled that giving notice to the defendant would defeat the purpose of the remedy by affording
him or her the opportunity to dispose of his properties before the writ can be issued.
A preliminary attachment may be discharged with the same ease as obtaining it. In any case, the ease of availing the
provisional remedy of preliminary attachment is matched by the ease with which it can be remedied by either the posting of a
counterbond, or by a showing of its improper or irregular issuance. The second means of defeating a preliminary attachement,
however, may not be availed of if the writ was issued upon a ground which is at the same time the applicant's cause of action.
Provrem digests
attachment, however, even though validly issued, is not binding upon the defendant until jurisdiction over his person is first
acquired.
2. CHEMPHIL EXPORT & IMPORT CORPORATION vs. Court of Appeals, December 12, 1995G.R. Nos. 112438-39
Dynetics, Inc. and Antonio M. Garcia filed a complaint for declaratory relief and/or injunction against the PISO, BPI, LBP, PCIB
and RCBC or the consortium with the Regional Trial Court seeking judicial declaration, construction and interpretation of the
validity of the surety agreement that Dynetics and Garcia had entered into with the consortium and to perpetually enjoin the
latter from claiming, collecting and enforcing any purported obligations which Dynetics and Garcia might have undertaken in
said agreement.
The consortium filed their respective answers with counterclaims alleging that the surety agreement in question was valid and
binding and that Dynetics and Garcia were liable under the terms of the said agreement.
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.
The trial court 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, 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. 8This garnishment, however, was not annotated in Chemphil's stock and transfer book.
The Court holds that the CONSORTIUM has admitted that the writ of attachment/garnishment issued on the shares of stock
belonging to plaintiff Antonio M. Garcia was not annotated and registered in the stock and transfer books of CHEMPHIL. On the
other hand, the prior attachment issued in favor of SBTC against the same CHEMPHIL shares of Antonio M. Garcia, was duly
registered and annotated in the stock and transfer books of CHEMPHIL.
ISSUE: Whether or not the attachment of shares of stock, in order to bind third persons, must be recorded in the stock and
transfer book of the corporation.
RULING: NO.
The Court of Appeals agreed with the consortium's position that the attachment of shares of stock in a corporation need not
be recorded in the corporation's stock and transfer book in order to bind third persons.Section 7(d), Rule 57 of the Rules of
Court was complied with by the consortium (through the Sheriff of the trial court) when the notice of garnishment over the
Chemphil shares of Garcia was served on the president of Chemphil. Indeed, to bind third persons, no law requires that an
attachment of shares of stock be recorded in the stock and transfer book of a corporation.
Therefore, ruled the Court of Appeals, the attachment made over the Chemphil shares in the name of Garcia was made in
accordance with law and the lien created thereby remained valid and subsisting at the time Garcia sold those shares to FCI
(predecessor-in-interest of appellee CEIC) in 1988.
A secretary's major function is to assist his or her superior. He/she is in effect an extension of the latter. Obviously, as such,
one of her duties is to receive letters and notices for and in behalf of her superior, as in the case at bench. The notice of
garnishment was addressed to and was actually received by Chemphil's president through his secretary who formally received
1
it for him. Thus, in one case, 56 we ruled that the secretary of the president may be considered an "agent" of the corporation
and held that service of summons on him is binding on the corporation.
Moreover, the service and receipt of the notice of garnishment was duly acknowledged and confirmed by the corporate
secretary of Chemphil, Rolando Navarro and his successor Avelino Cruz through their respective certifications.We rule,
therefore, that there was substantial compliance with Sec. 7 (d), Rule 57 of the Rules of Court.
3. GUZMAN VS. CATOLICO
On March 8, 1937, the respondent Alfredo Catolico brought an action against the herein petitioner Ventura Guzman 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.
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" (paragraph 8 of the complaint there appears the
following affidavits: "I, Alfredo Catolico, of age, married and resident of Tuguegarao, Cagayan, after being duly sworn, declare:
That I am the same plaintiff in this case; that I have prepared and read the same (complaint) and that all the allegations thereof
are certain and true, to the best of knowledge and belief."
In view of the said complaint and affidavit, the respondent judge 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.
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.
RULING: NO.
There is no allegation, either in the complaint or in affidavit solemnizing it, to the effect that there is no other sufficient
security for the claim which the plaintiff seeks to enforce by his action, and that the amount due him from the defendant,
above all legal set-offs and counterclaims, is as much as the sum for which the writ of preliminary attachment has been
granted. Now then, does the omission of these two requisites constitute a defect preventing a judge of the Court of First
Instance from issuing a writ of preliminary attachment?
The law authorizing the issuance of a writ of preliminary attachment should, therefore, be construed strictly in favor of the
judge should require that all the requisites prescribed by law be complied with, without which a judge acquires no jurisdiction
to issue the writ. If he does so in spite of noncompliance with said requisites, he acts in excess of his jurisdiction and with the
writ so issued by him will be null and void.
The jurisdiction of attachment proceedings being a special one, it cannot be legitimately exercised unless the
attaching creditor pursues substantially the essential requirements of the statute, and the court can act only under
Provrem digests
the special power limited by the statute and according to the forms of procedures it prescribes. . . . (6 C. J., 88,
paragraph 121.)
Where the statutes requires the affidavit to show that defendant is indebted to plaintiff in an amount specified, or
that the latter is entitled to recover such an amount, over and above all legal payments, set-offs, or counterclaims,
compliance with this requirement is essential to confer jurisdiction to issue the writ. (6 C. J., 132,
paragraph 201.)
An affidavit is fatally defective where it fails to comply, at least substantially, with a statutory requirement that is
shall state that the indebtedness for which the action is brought has not been secured by any mortgage or lien upon
real or personal property, or any pledge of personal property, or, if so secured, that the security has become
valueless. . . . (6 C. J., 146, paragraph 231.)
For the foregoing consideration, 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.
4. G.R. No. 175587 September 21, 2007
PHILIPPINE COMMERCIAL INTERNATIONAL BANK, Petitioner,
vs.
JOSEPH ANTHONY M. ALEJANDRO, Respondent.
Petitioner filed against respondent Alejandro a complaint for sum of money with prayer for the issuance of a writ of
preliminary attachment. Said complaint alleged that respondent, a resident of Hong Kong, executed in favor of petitioner a
promissory note obligating himself to pay P249,828,588.90 plus interest.
In view of the fluctuations in the foreign exchange rates which resulted in the insufficiency of the deposits assigned by
respondent as security for the loan, petitioner requested the latter to put up additional security for the loan.
In praying for the issuance of a writ of preliminary attachment under Section 1 paragraphs (e) and (f) of Rule 57 of the Rules of
Court, petitioner alleged that (1) respondent fraudulently withdrew his unassigned deposits notwithstanding his verbal
promise to PCIB Assistant Vice-president Corazon B. Nepomuceno not to withdraw the same prior to their assignment as
security for the loan; and (2) that respondent is not a resident of the Philippines.
The trial court granted the application and issued the writ ex parte. Subsequently, respondent filed a motion to quash the writ
contending that the withdrawal of his unassigned deposits was not fraudulent as it was approved by petitioner. He also alleged
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that petitioner knew that he maintains a permanent residence and an office address here in the Philippines. In both addresses,
petitioner regularly communicated with him through its representatives. The trial court issued an order quashing the writ. With
the denialof petitionersmotion for reconsideration, it elevated the case to the CA via a petition for certiorari. The CA dismissed
the case.
ISSUE: Whether the issuance of the writ of attachment was proper.
RULING: No.
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.
In actions in personam against residents temporarily out of the Philippines, the court need not always attach the defendants
property in order to have authority to try the case. Where the plaintiff seeks to attach the defendants property and to resort
to the concomitant service of summons by publication, the same must be with prior leave, precisely because, if the sole
purpose of the attachment is for the court to acquire jurisdiction, the latter must determine whether from the allegations in
the complaint, substituted service (to persons of suitable discretion at the defendants residence or to a competent person in
charge of his office or regular place of business) will suffice, or whether there is a need to attach the property of the defendant
and resort to service of summons by publication in order for the court to acquire jurisdiction over the case and to comply with
the requirements of due process.
Obviously, the trial courts 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. 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.
Provrem digests
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.
5. CALO VS. ROLDAN
G.R. No. L-252, March 30, 1946
Plaintiff spouses, as owners and possessors of certain parcels of land in Laguna, filed against defendants a complaint, alleging
that defendants, through the use of force, stealth, strategy and intimidation, intend or are INTENDING TO ENTER and work or
HARVEST whatever EXISTING FRUITS found on the land. Together with the complaint, they prayed for the issuance of a writ of
preliminary injunction to be issued ex parte to restrain, enjoin and prohibit defendants from entering, interfering with or
harvesting the lands belonging to plaintiff spouses. An accompanying bond in the amount of P200 was also filed.
Defendants OPPOSED the issuance of the writ of preliminary injunction on the ground that THEY ARE THE OWNERS of the lands
and have BEEN IN ACTUAL POSSESSION since 1925.
After the hearing on the petition for preliminary injunction, Judge Rilloraza DENIED the petition on the ground that the
defendants were in actual possession of the lands. MR has yet to be decided upon the writing of this decision.
Plaintiffs filed an urgent petition exparte praying that their MR of the order denying their petition for preliminary injunction
be granted and/or FOR THE APPOINTMENT OF A RECEIVER of the properties involved, on the ground that the plaintiffs have an
interest in the properties and fruits and that the APPOINTMENT OF A RECEIVER was the most convenient and feasible means of
preserving, administering and disposing of the properties in litigation.
Judge Roldan, who was then the judge appointed, replacing Rilloraza, granted the petition for appointment of AND APPOINTED
A RECEIVER in the case.
ISSUE: Whether it was proper for the Judge to grant the petition for the appointment of a receiverNO
RULING:
Based on the complaint filed, the plaintiffs action is one of ORDINARY INJUNCTION for the they ALLEGED THAT THEY ARE THE
OWNERS OF THE LANDS INVOLVED AND WERE IN ACTUAL POSSESSION thereof and that the defendants without any legal
right, through the use of FISTS, intend or are intending to enter and work or harvest whatever existing fruits may be found
thereon and prays that the defendants be restrained, enjoined and prohibited from entering in, interfering with or harvesting
the lands.
The provisional remedies (attachment, preliminary injunction, receivership, delivery of personal property) are remedies to
which parties litigant may resort for the PRESERVATION OR PROTECTION OF THEIR RIGHTS OR INTEREST, and for no other
purpose, during the pendency of the principal action. If an action, by its nature, does not require such protection or
preservation, said remedies cannot be applied for and granted.
To each kind of action/s, a proper provisional remedy is provided for by law.
Attachment: issued only in the cases specifically stated in Section 1, Rule 59, in order that the defendant MAY NOT
DISPOSE of his attached property and thus SECURE THE SATISFACTION OF ANY JUDGMENT that may be recovered
by plaintiff from defendant.
3
 For that reason, a property subject of litigation between the parties, or claimed by plaintiff as his, CANNOT BE
ATTACHED UPON A MOTION of the same plaintiff.
Preliminary prohibitory injunction: lies when the relief demanded in the complaint consists in RESTRAINING THE
COMMISSION/CONTINUANCE of the act complained of, either perpetually or for a limited period, and the other
conditions required by sec 3 of Rule 60. Purpose is to PRESERVE THE STATUS QUO OF THE THINGS subject of the
action or the relation between the parties, in order to PROTECT THE RIGHTS OF PLAINTIFF respecting the subject of
the action during the pendency of the suit.
Receiver: may be appointed to take charge of personal/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. The property or
fund must 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.
Delivery of personal property: consists in the delivery, by order of court, OF A PERSONAL PROPERTY by the
defendant to the plaintiff, who shall give a bond to assure its return or payment of damages to the defendant in the
plaintiffs action to recover possession of the same property fails, in order to PROTECT THE PLAINTIFFS RIGHT OF
POSSESSION over said property, or PREVENT THE DEFENDANT FROM DAMAGING, DESTROYING OR DISPOSING OF
THE SAME during the pendency of the suit.
Considering these, the provisional remedy proper to plaintiffs action of injunction is a PRELIMINARY PROHIBITORY
INJUNCTION, if plaintiffs theory, as set forth in the complaint, is that he is the owner and in actual possession of the land is
correct.
However, as the lower court found during the hearing that the defendants were in possession of the lands, the lower court
acted in accordance with law in denying the petition, although in their MR, which was still pending at the time of the petition in
this case was heard in this court, plaintiffs insist that they are in actual possession of the lands and of its fruits.
Judge acted in excess of his jurisdiction in appointing a receiver. The APPOINTMENT OF A RECEIVER is NOT PROPER or does not
lie IN AN ACTION FOR INJUNCTION SUCH AS THIS CASE. The petition for appointment of a receiver filed by plaintiffs is based on
the ground that it is the most convenient and feasible means of preserving, administering and disposing of the properties;
NEITHER the lands nor the palay harvested were IN LITIGATION.
The litigation or issue raised is whether or not defendants intend or were intending to enter or work or harvest whatever
existing fruits could then be found in the lands described in the complaint, alleged to be the exclusive property and in the
actual possession of the plaintiffs. It is a matter not only of law but of plain common sense that a plaintiff will not and legally
cannot ask for the appointment or receiver of property which he alleges to belong to him and to be actually in his possession.
For the owner and possessor of a property is more interested than persons in preserving and administering it.
6. KO GLASS CONSTRUCTION VS. VALENZUELA
Pinzon instituted an action against Kenneth O. Glass for the recovery of P37K 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. He asked for an
attachment of the property of K.O Glass consisting of collectibles and payables with the Philippine Geothermal Inc on the
Provrem digests
grounds that the K.O. Glass is a foreigner, that he has sufficient cause of action, and that there is no sufficient security for his
claim against K.O. Glass in the event a judgment is rendered in his favor.
Judge Valenzuela ordered the issuance of a writ of attachment against the properties of K.O. Glass upon the filing
of a bond of P37K.
K.O. Glass moved to quash the writ on the grounds that there is no ground for the issuance of the writ since K.O. Glass never
intended to leave the Philippines, and even if he does, Pinzon cannot be prejudiced since his claims are against the corporation
which has sufficient funds and property to satisfy his claim, and that the money garnished belongs to K.O. Glass Construction
Inc. and not to Kenneth O. Glass. Because of this, Pinzon amended his complaint to include K.O. Glass Construction as
codefendant.
K.O. Glass and the company filed a motion to discharge/dissolve the writ upon the ground that the affidavit filed in
support of the motion for preliminary attachment was not sufficient or wanting in law because
(1) the affidavit did not state that the amount of Pinzons claim was above all legal setoffs or counterclaims as
required by Sec. 3, Rule 57 of RoC;
(2) the affidavit did not state that there is no other sufficient security for the claim sought to be recovered by the
action, also required by Sec. 3; and
(3) the affidavit did not specify any of the grounds enumerated in Sec. 1, Rule 57 of RoC.
Judge Valenzuela denied the motion and ordered Phil. Geothermal to deliver and deposit with the Clerk of Court
the amount of P37K immediately upon receipt of the order.
K.O Glass and the company filed a counterbond in the amount of P37K and asked the court for the release of the same amount
deposited by Phil. Geothermal with the Clerk of Court, but Judge Valenzuela did not order the release.
ISSUE: Whether it was proper for Judge Valenzuela to issue the writ of preliminary attachment and in not ordering the release
of the money deposited with the Clerk of CourtNO.
RULING
Judge Valenzuela commited GADLEJ in issuing the writ and in not ordering the release of the money because
1. There was no ground for the issuance of the writ of preliminary attachment.
Sec. 1. Grounds upon which attachment may issue. A plaintiff or any proper party may, at the commencement of the action
or at any time thereafter, have the property of the adverse party attached as security for the satisfaction of any judgment that
may be recovered in the following cases: (a) In an action for the recovery of money or damages on a cause of action arising
from contract, express or implied, against a party who is about to depart from the Philippines with intent to defraud his
creditor; (b) In an action for money or property embezzled or fraudulently misapplied or converted to his own use by a public
officer, or an officer of a corporation, or an attorney, factor, broker, agent, or clerk, in the course of his employment as such, or
by any other person in a fiduciary capacity, or for a willful violation of duty;
(c) In an action to recover the possession of personal property unjustly detained, when the property, or any part thereof, has
been concealed, removed, or disposed of to prevent its being found or taken by the applicant or an officer; (d) In an action
against the party who has been guilty of a fraud in contracting the debt or incurring the obligation upon which the action is
brought, or in concealing or disposing of the property for the taking, detention or conversion of which the action is brought; (e)
In an action against a party who has removed or disposed of his property, or is about to do so, with intent to defraud his
4
creditors; (f) In an action against a party who resides out of the Philippines, or on whom summons may be served by
publication. In issuing the writ, Judge Valenzuela said that Pinzon alleged that K.O. Glass who is a foreigner may at any time
depart from the Philippines with intent to defraud the creditors. Pinzon, however, did NOT alleged that Kenneth O. Glass was a
foreigner, who may at any time depart from the Philippines with intent to defraud his creditors. He merely stated that Kenneth
O. Glass is a foreigner. Without the allegation that Kenneth O. Glass is about to depart the Philippines with intent to defraud
the creditors, or that they are nonresident aliens, the attachment of the properies is NOT justified.
2. The affidavit submitted by Pinzon does NOT comply with the Rules.
Under the Rules (Sec. 3), an affidavit for attachment must state that
(a) Sufficient cause of action exists
(b) Case is one of those mentioned in Sec. 1 (a) of Rule 57
(c) There is no sufficient security for the claim sought to be enforced by the action
(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.
The affidavit of Pinzon lacked (b), (c) and (d). Failure to allege in the affidavit the requisites prescribed for the issuance of a writ
of preliminary attachment renders the writ issued against the property fatally defective, and the judge issuing it is deemed to
have acted in excess of his jurisdiction.
3. K.O. Glass and the company filed a counterbond P37K to answer for any judgment that may be rendered
against them.
Upon receipt of the counterbond, Judge Valenzuela should have discharged the attachment pursuant to Sec. 12, Rule 57 of the
RoC. The filing of the counterbond will serve the purpose of preserving the property and at the same time give Pinzon security
for any judgment that may be obtained against K.O. Glass.
7. G.R. No. L-894 July 30, 1947
LUIS F. GENERAL, petitioner, vs. JOSE R. DE VENECIA, Judge of First Instance of Camarines Sur, and PETRA VDA. DE RUEDAS,
also representing Ernesto, Armando and Gracia (minors), respondents.
FACTS: In 1946, Gregorio Ruedas filed a complaint for the recovery of a debt evidenced by a promissory note wherein the
debtor, Luis General, promised to pay 4k within 6 months after peace has been declared. The complaint also contained a
petition for the issuance of preliminary attachment, which Judge de Venecia granted.
General argued that attachment was improper since the amount was not yet demandable, and that there was a
debt moratorium ordered by the President.
ISSUE: WON the Judge erred in permitting the issuance of attachment. YES
HELD:
There was no valid cause for allowing attachment since the debt had not yet become demandable
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.
Provrem digests
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." 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.
8. G.R. No. L-67715 July 11, 1986
WILLIAM ALAIN MIAILHE and THE HON. FELIX V. BARBERS, in his capacity as Presiding Judge, RTC of Manila, Branch XXXIII,
petitioners-appellants, vs.
ELAINE M. DE LENCQUESAING and HERVE DE LENCQUESAING, respondents-appellees.
FACTS: A criminal complaint for estafa was filed by Elaine Mialhe against William Alain. Elaine alleged that Alain, as
administrator of common property, had misappropriated considerable amounts, which should have been turned over to her as
her share in the net rentals of the common properties.
Alain countered with a complaint for damages because of the embarrassment caused by the estafa suit. He prayed
for the issuance of a writ of preliminary attachment of Elaines properties consisting of 1/6 undivided interests in certain real
properties in the City of Manila on the ground that Elaine Mialhe is a non-resident of the Philippines"
The judge granted the petition and after the filing of a 2m bond, ordered the attachment. Elaine filed a motion to
lift or dissolve the writ, alleging that it did not comply with the provisions of Sec. 3 of Rule 57, Rules of Court and that Alain's
claim was for unliquidated damages.
ISSUE: WON attachment may be issued for unliquidated damages. NO
HELD:
Amount sought for purposes of attachment must be liquidated
While it is true that from the aforequoted provision attachment may issue "in an action against a party who resides out of the
Philippines, " irrespective of the nature of the action or suit it was held that "each of the six grounds treated ante is
independent of the others," still it is imperative that the amount sought be liquidated.
Reasoning: certainty as to amount related to a requisite in the issuance of proliminary attachment
Uncertainty in the amount claimed makes it impossible to say that said claim is over and above all legal counterclaims that
defendant may have against plaintiff, which is one of the indispensable requirements for the issuance of a writ of attachment
which should be stated in the affidavit of applicant as required in Sec. 3 of Rule 57 or alleged in the verified complaint of
plaintiff.
9. G.R. NO. 123638 June 15, 2005
INSULAR SAVINGS BANK, Petitioner, vs. COURT OF APPEALS, JUDGE OMAR U. AMIN, in his capacity as Presiding Judge of
Branch 135 of the Regional Trial Court of Makati, and FAR EAST BANK AND TRUST COMPANY, Respondents.
FACTS: In 1991, Far East instituted arbitration proceedings against Insular before the PCHC. Insular was refusing to refund 25m
resulting from 3 unfunded checks.
Pending arbitration in 1992, Far East instituted a civil case with the RTC and prayed for the issuance of preliminary
attachment. After Far East posted a 6m bond, the RTC issued the writ for 25.2m.
Meanwhile, pending arbitration results, Far East and Insular agreed to temporarily divide among themselves the
amount. Insular thus released 12.6m to Far East. Later, Insular filed a motion to discharge the attachment by posting a
counterbond of 12.6m.
5
 HELD:
However, the judge denied the order, stating that the counterbond should be 27.2m, which is the principal amount 1st preliminary attachment was issued in conformity with law
+ contingent expenses and unliquidated damages. The Court held so because apparently all the requisites for its issuance had been complied with.
Unsecured amount - 12.6m
Actual damages 25%/annum 7.8m Judge lost jurisdiction over the property when he allowed the initial counterbond of 5k
Legal interest 3.8m From the moment the Judge authorized the Tan Lit to put up the counter bond of P5,000 and from the moment Tan Lit filed
Exemplary damages 2m said counter bond in order to be able to withdraw his deposit in the Philippine National Bank, it can be said that Judge lost
Attorneys fees and costs 1m jurisdiction over the said property.

However, the judge retained jurisdiction to resolve the principal question of WON Tan Kia was entitled to the relief
ISSUE: WON the judge was correct in holding that the counterbond should be the principal amount + unliquidated expenses? prayed for in his complaint.
NO Note: this ruling is found in G.R No. L-43772 which is a simultaneous sequel to the case

HELD: Purpose of the bond

The Court should have allowed a discharge of the attachment on a counterbond based on the reduced claim
If a portion of the claim is already secured, we see no justifiable reason why such portion should still be subject of counter-
bond. It may be that a counter-bond is intended to secure the payment of any judgment that the attaching party may recover
in the main action. Simple common sense, if not consideration of fair play, however, dictates that a part of a possible judgment
that has veritably been preemptively satisfied or secured need not be covered by the counter-bond.
Contingent and unliquidated claims may not be included in an attaching writ.
Far East did not pray for attachment on its contingent and unliquidated claims. Then, too, the attaching writ rightly excluded
such claims.
Section 12 of Rule 57 is less stringent
Old rules - the value of the property attached shall be the defining measure in the computation of the discharging counter-
attachment bond
New rules - the court shall order the discharge of attachment if the movant "makes a cash deposit, or files a counter-bond . . .
in an amount equal to that fixed by the court in the order of attachment, exclusive of costs.
10. G.R. No. L-43721 June 15, 1935
ISIDRO TAN (alias TAN LIT), petitioner, vs. FRANCISCO ZANDUETA, Judge, of First Instance of Manila, and TIU CHAY (alias
TAN KIA), respondents.
FACTS: Tan Lit and Tan Kia won 50k in a sweepstakes. However, Tan Lit kept the whole amount to himself. Thus, Kia filed a
recovery suit for the 22.5k. After filing a 5k bond, Kia obtained an attachment from the Judge.
Tan Lit later managed to have the writ dissolved by posting a counter-bond of 5k. After the attachment was
dissolved, he withdrew 23,500 from PNB (most this amount was previously attached).
When the property release from an attachment cannot be returned by the party who secured its release upon the filing of a
bond, the bond takes the place of said property, that is, answers therefor, because the law on the points is couched in the
following language: "the obligation aforesaid standing in place of the property so released."
11. G.R. No. L-23237 November 14, 1925
WALTER E. OLSEN & CO., plaintiff-appellee, vs. WALTER E. OLSEN, defendant-appellant.
FACTS: Walter Olsen was president-treasurer and general manager of the WEO corporation and exercised direct and almost
exclusive supervision over its function, funds and books of account. He has embezzled about 66k. 19k of that was used to buy a
house and lot. The said house and lot was attached. Olsens motion to have the writ dissolved was denied.
ISSUE: WON the denial of the writ to dissolve the preliminary attachment was proper.
WON an order denying a motion for annulment of preliminary attachment may be questioned on appeal. NO exc. YES
HELD:
Order denying a motion for annulment and appeals
General rule: not appealable, it being an interlocutory order
Exception: when the writ of preliminary attachment becomes final by virtue of a final judgment rendered in the principal case,
said writ is subject to review jointly with the judgment rendered in the principal case through an ordinary appeal.
Issuance of preliminary attachment proper
Olsens conduct 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 [Section
424 amd 412] of the [old] Code of Civil Procedure for the issuance of a for the issuance of. Thus the order denying the motion
for the annulment of the injunction is in accordance with law.

After an application by Kia, the judge again issued another order requiring Tan Lit to pay an additional 12k
counterbond. Failing to do this, Tan Lit was held in contempt and was held in confinement until he posted the 12k. 12. G.R. No. L-31163 November 6, 1929
Tan Lit now argues that: URBANO SANTOS, plaintiff-appellee, vs. JOSE C. BERNABE, ET AL., defendants.
1. the preliminary attachment was irregular and illegal PABLO TIONGSON and THE PROVINCIAL SHERIFF OF BULACAN, appellants.
2. the Judges order to pay an additional counterbond was also illegal, being a sequel to the first

ISSUE: WON the preliminary attachment was proper. YES FACTS: Urbano Santos deposited 778 cavans of palay in Jose Bernabes warehouse. Meanwhile, Pablo Tiongson deposited
WON the order to pay an additional counterbond was proper. NO 1026 cavans in the same warehouse. In 1928, Tiongson filed a complaint against Bernabe to recover the palay he deposited. A
writ of attachment was granted on 924 cavans of rice that were found on the warehouse. Urbano Santos intervened, claiming
that part of the attached palay belonged to him.
6
Provrem digests

Santos further claims that Pablo Tiongson cannot claim the 924 cavans and 31 kilos of palay attached by the
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: WON the attachment was proper? YES
HELD:
The Court considered the attachment as equivalent to the delivery of personal property (replevin), which was the proper
remedy
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.
Forced co-ownership under Art. 381
Because the palay of Santos and Tiongson were mixed, they each acquired proportionate share in the mixture.
13. STATE INVESTMENT HOUSE vs. CA
G.R. No. 82446 July 29, 1988
Issue: WON the impairment of the ff collaterals is sufficient for the issuance of a writ:
[1] shares of stock pledged as security and their subsequent decline in value ;
[2] parcels of land mortgaged to creditor who were worth less their supposed value ;
[3] postdated checks which bounced ;
Held:
[1] With respect to the shares of stock which the respondents pledged as additional security for the loan, the decline in their
value did not mean that the private respondents entered into the loan transaction in bad faith or with fraudulent intent. For
the private respondents could not have foreseen how the stocks would fare in the market. And if the petitioner thought they
were worthless at the time, it should have rejected them as collateral.
[2] With respect to the two parcels of land which were mortgaged to the petitioner, the latter should also have declined to
accept them as collateral if it believed they were worth less than their supposed value.
[3] With respect to the two postdated checks which bounced, the Court of Appeals observed that since they were "sold" to the
petitioner after the loan had been granted to private respondents, their issuance did not fraudulently induce the petitioner to
grant the loan applied for. They were "mere evidence of the private respondents" standing loan obligation to the petitioner" or
"mere collaterals for the loan granted by the petitioner to the private respondents" State Investment failed to prove during the
hearing of private respondents' motion to lift the preliminary writ of attachment, that P.O. Valdez, Inc. received from it
independent consideration for the "sale" of Pedro Valdez' checks to it, apart from the loans previously extended to the
corporations.

FACTS:

On September 30 and October 31,1977, Pedro 0. Valdez and Rudy H. Sales executed two Comprehensive Surety Agreements to
secure any and all loans of P.O. Valdez, Inc. not exceeding the sums of P500,000 and P4,934,000 from the petitioner State
Investment House, Inc., a domestic corporation engaged in quasi banking.

Four years later, on July 30, 1981, petitioner and P.O. Valdez, Inc. entered into an agreement for discounting with the
petitioner the receivables of P.O. Valdez, Inc.

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. 14. ABOITIZ vs. COTABATO BUS COMPANY

G.R. No. L-35990 June 17, 1981

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. It was docketed in the Regional Trial Court of Manila as Civil Case No. 8533050
entitled "STATE INVESTMENT HOUSE, INC. vs. P.O. VALDEZ, INC., PEDRO 0. VALDEZ and RUDY H. SALES." FACTS:

The instant petition stemmed from civil case in which a writ of preliminary attachment was issued ex-parte by the Court on the
strength of ana ffidavit of merit attached to the verified complaint filed by petitioner herein, Aboitiz & Co., Inc., on November

7
Provrem digests
2,1971, as plaintiff in said case, for the collection of money in the sum of P155,739.41 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 attacjed personal properties of thr defendant bus
company consisting of some buses, machinery and equipment. He 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 assets, or is
about to do so, with intent to defraud its creditors.
Respondent company filed in the lower court an Urgent Motion to Dissolve or Quash Writ of Attachment to which was
attached an affidavit executed by its Assistant Manager, Baldovino Lagbao, alleging among other things that the Cotabato Bus
Company has not been selling or disposing of its properties, neither does it intend to do so, much less to defraud its creditors;
that also the Cotabato Bus Company, Inc. has been acquiring and buying more assets.
The Lower Court denied its motion stating in its Order that the testimony of Baldovino Lagbao, witness for the defendant,
corroborates the facts in the plaintiffs affidavit instead of disproving or showing them to be untrue. A motion for
reconsideration was filed by the defendant bus company but the lower court denied it hence, the defendant wnt to court for
certiorari alleging grave abuse of discretion on the part of herein respondent Hon. Vicente R. Cusi Jr. on giving due course to
the petition, the Court of Appeals issued a restraining order restraining the trial court from enforcing further the writ of
attachment and from proceeding with the hearing of Civil Case No 7329.
ISSUE: Is insolvency a ground for the issuance of the writ?
Held: No. 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.
The several buses attached are nearly junks. However, upon permission by the sheriff, five of them were repaired, but they
were substituted with five buses which were also in the same condition as the five repaired ones before the repair. This cannot
be the removal intended as ground for the issuance of a writ of attachment under section 1 (e), Rule 57, of the Rules of Court.
The repair of the five buses was evidently motivated by a desire to serve the interest of the riding public, clearly not to defraud
its creditors, as there is no showing that they were not put on the run after their repairs, as was the obvious purpose of their
substitution to be placed in running condition.
15. PEOPLES BANK and TRUST COMPANY vs. SYVEL
G.R. No. L-29280 August 11, 1988
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 and located at its stores or warehouses. The chattel
mortgage was duly registered in the corresponding registry of deeds of Manila and Pasay City. The chattel mortgage was in
Provrem digests
connection with a credit commercial line in the amount of P900,000.00 granted the said defendant corporation, the expiry
date of which was May 20, 1966. On May 20, 1965, defendants Antonio V. Syyap and Angel Y. Syyap executed an undertaking
in favor of the plaintiff whereby they both agreed to guarantee absolutely and unconditionally and without the benefit of
excussion the full and prompt payment of any indebtedness to be incurred on account of the said credit line. Against the credit
line granted the defendant Syvel's Incorporated the latter drew advances in the form of promissory notes which are attached
to the complaint." In view of the failure of the defendant corporation to make payment in accordance with the terms and
conditions agreed upon in the Commercial Credit Agreement the plaintiff started to foreclose extrajudicially the chattel
mortgage. 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. As a consequence of the issuance of the writ of attachment, the defendants, in their answer to the complaint set up a
compulsory counterclaim for damages.
After the filing of this case in this court and during its pendency defendant Antonio v. Syyap proposed to have the case settled
amicably and to that end a conference was held in which Mr. Antonio de las Alas, Jr., Vice President of the Bank, plaintiff,
defendant Antonio V. Syyap and Atty. Mendoza were present. Mr. Syyap requested that the plaintiff dismiss this case because
he did not want to have the goodwill of Syvel's Incorporated impaired, and offered to execute a real estate mortgage on his
real property located in Bacoor, Cavite. Mr. De las Alas consented, and so the Real Estate Mortgage, marked as Exhibit A, was
executed by the defendant Antonio V. Syyap and his wife Margarita Bengco Syyap on June 22, 1967. In that deed of mortgage,
defendant Syyap admitted that as of June 16, 1967, the indebtedness of Syvel's Incorporated was P601,633.01, the breakdown
of which is as follows: P568,577.76 as principal and P33,055.25 as interest. Complying with the promise of the plaintiff thru its
Vice President to ask for the dismissal of this case, a motion to dismiss this case without prejudice was prepared, Exhibit C, but
the defendants did not want to agree if the dismissal would mean also the dismissal of their counterclaim Against the plaintiff.
Hence, trial proceeded.
ISSUE: How do you prove intent to defraud?
Held: 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.
The act of debtor 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. The 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 any judgment that may be rendered in favor of the plaintiff.
16. ADLAWAN vs. TORRES
G.R. Nos. 65957-58 July 5, 1994
8
 Petitioner Adlawan was indebted to Respodet company Aboitiz for construction projects the former was awarded with.
However, due to inability to pay, Aboitiz filed for collection of sum of money against petitioner in the CFI Cebu. It also moved
for preliminary attachment on some of Adlawans properties after filing a bond.
Aboitiz filed a notice of dismissal for the above mention case. When Adlawan moved for the enforcement of the dismissal, it
was denied by the court on account of the filing by Respondent Aboitiz an action or delivery of personal property before the
CFI Lapu-lapu and petitioner Adlawans filing for damages in the same court for the seizure of his property by virtue of the
preliminary attachment.
Respondent Aboitiz alleged that the voluntary dismissal of the previous case was without prejudice to the institution of
another action based on the same subject matter and that the issuance of the writ was justified because the petitioners were
intending to defraud Aboitiz by mortgaging 11 parcels of land to PCIB thereby making PCIB a preferred creditor to the prejudice
of Aboitiz.
ISSUE: WON the execution of mortgage of the debtor in favour of another
person constitutes fraud sufficient for the issuance of a writ?
Held: No. 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.
17. CLAUDE NEON LIGHTS vs. PHIL ADVERTISING
G.R. No. L-37682 November 26, 1932
Respondent Philippine Advertising Corporation (agent) filed suit agains the petitioner (principal) in the CFI Manila, claiming
P300,000 as damages for alleged breach of the agency contract existing between the said respondent and the petitioner. At
the same time, respondent filed an application for the writ attachment duly verified in which it is stated that the petitioner is a
foreign corporation havng its principal place of business in the City of Washington, District of Columbia. It is not alleged in said
application that petitioner was about to depat from the Philippine Islands with intent to defraud its creditors or that it was
insolvent or had removed or disposed of its property or was about to do so with intent to defraud its creditors. The only
statutory ground relied upon is paragraph 2 of section 424 of the Code of Civil Procedure, which provides that plaintiff may
have the property of the defendant attached in an action against a defendant not residing in the Philippine Islands.
The petitioner is a corporation duly organized under the laws of the District of Columbia; it had complied with all the
requirements of the Philippine laws and was duly licensed to do business in the Philippine Islands on the date said writ of
attachment was issued.
CFI issued the writ of attachment and the sheriff has attached all the properties of the petitioner in the Philippine Islands. CFI
also appointed Manuel C. Grey as receiver of said properties of the petitioner.
Provrem digests
ISSUE: WON petitioner, a foreign corporation, shall, in a metaphorical sense, be deemed as "not residing in the Philippine
Islands" in the sense in which that expression would apply to a natural person?
Held: No. Our laws and jurisprudence indicate a purpose to assimilate foreign corporations, duly licensed to do business here,
to the status of domestic corporations. 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 especially of foreign corporations, but in
addition with every requirement of law made of domestic corporations.
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.
18. STATE INVESTMENT vs. CITIBANK
G.R. Nos. 79926-27 October 17, 1991
FACTS:
The foreign banks involved in the case are the Bank of America, Citibank, and Hongkong and Shanghai Banking Corp., all of
whom are creditors of Consolidated Mines, Inc. (CMI).
On December 11.1981, the three banks jointly filed with the RTC of Rizal a petition for involuntary insolvency of CMI. Among
the grounds alleged by the foreign banks is CMIS commission of specifc acts of insolvency, i.e. that CMI suffered its property to
remain under attachment for three days for the purpose of hindering or delaying or defrauding its creditors and that CMI has
defaulted in the payment of its current obligations for a period of thirty days.
The petition for involuntary insolvency was opposed by herein petitioners State Investment House Inc. (SIHI) and State
Financing Center Inc. (SFCI). Both claimed among others, that court had no jurisdiction to take cognizance of the petition for
insolvency because the foreign banks are not resident creditors of CMI as required under Insolvency Law.
The RTC rendered judgment in favor of SIHI and SFCI for lack of jurisdiction over the subject matter. The court ruled that the
insolvency court could not acquire jurisdiction to adjudicate the debtor as insolvent because the foreign banks are not
residents of the Philippines.
On petition for review, the CA rendered order reversing judgment of the rtc. The CA ruled that the three banks are residents of
the Philippines for the purpose of doing business in the Philippines, and that Insolvency Law was designed for the benefit of
both the creditors and debtors. The CA also reiterated that authority granted to the three banks by the SEC covers not only
transacting banking business but also maintaining suits for the recovery of any debt and claims. Hence, SIHI and SFCI brought
their appeal before the SC.
9
ISSUE: Whether foreign banks licensed to do business in the Philipppines, may be considered residents of the Philippine
Islands as contemplated in Sec 20 of Insolvency Law. NO
HELD: 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. 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.
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.
19. PCIB vs. ALEJANDRO
G.R. No. 175587 September 21, 2007
Petitioner filed against respondent Alejandro a complaint for the sum of money with prayer for the issuance of a writ of
preliminary attachment. Said complaint alleged that respondent, a resident of Hong Kong executed in favor of the petitioner a
promissory note obligating himself to pay P249,828,588.90 plus interest.
In view of the fluctuations in the foreign exchange rates which resulted in the insufficiency of the deposits assigned by
respondent as security for the loan, petitioner requested the later to put up additional security for the loan.
In praying for the issuance of a writ of preliminary attachment under Sec 1 paragraphs and (f) of Rule 57 of the Rules of
Court, petitioner alleged that (1) respondent fraudulently withdrew his unassigned deposits notwithstanding his verbal
promise to PCIB Assistant Vice-president Corazon Nepomuceno not to withdraw the same prior to their assignment as security
for the loan; and (2) that respondent is not a resident of the Philippines.
The trial court granted the application and issued the writ ex parte. Subsequently, respondent filed a motion to quash the writ
contending that the withdrawal of his unassigned deposits was not fraudulent as it was approved by the petitioner. He also
alleged that petitioner knew that he maintains a permanent residence office address here in the Philippines. In Both addresses,
petitioner regularly communicated with him through its representatives. The trial court issued an order quashing the writ. With
the denial of PETs motion for reconsideration, it elevated the case to the CA via a petition for certiorari which dismissed the
case.
ISSUE: WON a plaintiff suing an action in personam may be granted the issuance of the writ on the premise that the defendant
is temporarily out of the Philippines?
Provrem digests
Held: Where the defendant is a resident who is temporarily out of the Philippines, attachment of his/her property in an action
in personam, is not always necessary in order for the court to acquire jurisdiction to hear the case.
In actions in personam against residents temporarily out of the Philippines, the court need not always attach the defendants
property in order to have authority to try the case. Where the plaintiff seeks to attach the defendants property and to resort
to the concomitant service of summons by publication, the same must be with prior leave, precisely because, if the sole
purpose of the attachment is for the court to acquire jurisdiction, the latter must determine whether from the allegations in
the complaint, substituted service (to persons of suitable discretion at the defendants residence or to a competent person in
charge of his office or regular place of business) will suffice, or whether there is a need to attach the property of the defendant
and resort to service of summons by publication in order for the court to acquire jurisdiction over the case and to comply with
the requirements of due process.
20. SIEVERT vs. CA
G.R. No. 84034 December 22, 1988
Facts
On 18 May 1988 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 in Civil Case No. 88-44346. Petitioner had not
previously received any summons and any copy of a complaint against him in Civil Case No. 88-44346.
On the day set for hearing of the Petition for a Preliminary Writ of Attachment, petitioner's counsel went before the trial court
and 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 Issuance of a Preliminary Writ of
Attachment. In this written objection, 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.
ISSUE: May the judge may issue a writ of preliminary attachment against defendant before summons is served?
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 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.
Valid service of summons and a copy of the complaint will in such case vest jurisdiction in the court over the defendant both
for purposes of the main case and for purposes of the ancillary remedy of attachment. In such case, notice of the main case is
at the same time notice of the auxiliary proceeding in attachment.
Where, however, the petition for a writ of preliminary attachment is embodied in a discrete pleading, such petition must be
served either simultaneously with service of summons and a copy of the main complaint, or after jurisdiction over the
defendant has already been acquired by such service of summons. Notice of the
10
separate attachment petition is not notice of the main action.
21. DAVAO LIGHT vs. CA
G.R. No. 93262 December 29, 1991
FACTS:
1. On May 2, 1989 Davao Light & Power Co., Inc. (hereafter, simply Davao Light) filed a verified complaint for recovery of a sum
of money and damages against Queensland Hotel, etc. and Teodorico Adarna (docketed as Civil Case No. 19513-89). The
complaint contained an ex parte application for a writ of preliminary attachment.
2. On May 3, 1989 Judge Nartatez, to whose branch the case was assigned by raffle, issued an Order granting the ex
parte application and fixing the attachment bond at P4,600,513.37.
3. On May 11, 1989 the attachment bond having been submitted by Davao Light, the writ of attachment issued.
4. On May 12, 1989, the summons and a copy of the complaint, as well as the writ of attachment and a copy of the attachment
bond, were served on defendants Queensland and Adarna; and pursuant to the writ, the sheriff seized properties belonging to
the latter.
5. On September 6, 1989, defendants 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 the cause and over the persons of the
defendants.
6. On September 14, 1989, Davao Light filed an opposition to the motion to discharge attachment.
7. On September 19, 1989, the Trial Court issued an Order denying the motion to discharge.
ISSUE:
Whether a writ of preliminary attachment may issue ex parte against a defendant before acquisition of jurisdiction of the
latter's person by service of summons or his voluntary submission to the Court's authority.
HELD:
No principle, statutory or jurisprudential, prohibits its issuance by any court before acquisition of jurisdiction over the person
of the defendant.
Whatever be the acts done by the Court prior to the acquisition of jurisdiction over the person of defendant, as above
indicated issuance of summons, order of attachment and writ of attachment (and/or appointments of guardian ad litem, or
grant of authority to the plaintiff to prosecute the suit as a pauper litigant, or amendment of the complaint by the plaintiff as a
Provrem digests
matter of right without leave of court and however valid and proper they might otherwise be, these do not and cannot bind
and affect the defendant until and unless jurisdiction over his person is eventually obtained by the court, either by service on
him of summons or other coercive process or his voluntary submission to the court's authority.
When the sheriff or other proper officer commences implementation of the writ of attachment, it is essential that he serve on
the defendant not only a copy of the applicant's affidavit and attachment bond, and of the order of attachment, as explicitly
required by Section 5 of Rule 57, but also the summons addressed to said defendant as well as a copy of the complaint and
order for appointment of guardian ad litem, if any, as also explicitly directed by Section 3, Rule 14 of the Rules of Court.
22. CUARTERO vs. CA
G.R. No. 102448 August 5, 1992
FACTS:
On August 20, 1990, petitioner Ricardo Cuartero filed a complaint before the Regional Trial Court of Quezon City against the
private respondents, Evangelista spouses, for a sum of money plus damages with a prayer for the issuance of a writ of
preliminary attachment. The complaint was docketed as Civil Case No. Q-90-6471.
On August 24, 1990, the lower court issued an order granting ex-parte the petitioner's prayer for the issuance of a writ of
preliminary attachment.
On September 19, 1990, the writ of preliminary attachment was issued pursuant to the trial court's order dated August 24,
1990. On the same day, the summons for the spouses Evangelista was likewise prepared.
The following day, that is, on September 20, 1990, a copy of the writ of preliminary attachment, the order dated August 24,
1990, the summons and the complaint were all simultaneously served upon the private respondents at their residence.
Immediately thereafter, Deputy Sheriff Ernesto L. Sula levied, attached and pulled out the properties in compliance with the
court's directive to attach all the properties of private respondents not exempt from execution, or so much thereof as may be
sufficient to satisfy the petitioner's principal claim in the amount of P2,171,794.91.
Subsequently, the spouses Evangelista filed motion to set aside the order dated August 24, 1990 and discharge the writ of
preliminary attachment for having been irregularly and improperly issued which the lower court denied for lack of merit.
Private respondents, then, filed a special civil action for certiorari with the Court of Appeals questioning the orders of the lower
court dated August 24, 1990 and October 4, 1990 with a prayer for a restraining order or writ of preliminary injunction to
enjoin the judge from taking further proceedings below.
In a Resolution dated October 31, 1990, the Court of Appeals resolved not to grant the prayer for restraining order or writ of
preliminary injunction, there being no clear showing that the spouses Evangelista were entitled thereto.
On June 27, 1991, the Court of Appeals granted the petition for certiorari and rendered the questioned decision. The motion
for reconsideration filed by herein petitioner Cuartero was denied for lack of merit in a resolution dated October 22, 1991.
Hence, the present recourse to this Court.
ISSUE:
11
Whether there is a proper ground existed for the issuance of the writ.
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.
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. 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.
23. SALAS vs. ADIL
G.R. No. L-46009 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: May the judge issue an writ ex parte when the plaintiff-applicant alleges that fraud has been committed?
Provrem digests
Held: No. 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.
24. LA GRANJA vs. SAMSON
G.R. No. 40054 September 14, 1933
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: Is the mere filing of an affidavit executed in due form sufficient to compel a judge to issue an order of attachment?
Held: No! 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.
Section 5. Manner of attaching property. The sheriff enforcing the writ shall without delay and with all reasonable diligence
attach, to await judgment and execution in the action, only so much of the property in the Philippines of the party against
whom the writ is issued, not exempt from execution, as may be sufficient to satisfy the applicant's demand, unless the former
makes a deposit with the court from which the writ is issued, or gives a counter-bond executed to the applicant, in an amount
equal to the bond fixed by the court in the order of attachment or to the value of the property to be attached, exclusive of
costs. No levy on attachment pursuant to the writ issued under section 2 hereof shall be enforced unless it is preceded, or
contemporaneously accompanied, by service of summons, together with a copy of the complaint, the application for
attachment the applicant's affidavit and bond, and the order and writ of attachment, on the defendant within the Philippines.
The requirement of prior or contemporaneous service of summons shall not apply where the summons could not be served
personally or by substituted service despite diligent efforts, or the defendant is a resident of the Philippines temporarily absent
therefrom, or the defendant is a non-resident of the Philippines, or the action is one in rem or quasi in rem. (5a)
12
36. Sievert v. Court of Appeals
Facts
Alberto Sievert ("Sievert") received by mail a Petition for Issuance of a Preliminary Attachment, despite not having previously
received any summons or any copy of a complaint. Sievert's counsel appeared before the court to question its jurisdiction over
Sievert's person. The trial court denied Sievert's objections and proceeded to hear the application.
Issue
Whether or not the trial court acquired jurisdiction over the person of Sievert.
Held
No.
Ratio Decidendi
A preliminary attachment is an ancillary remedy. Hence, the court's lack of jurisdiction over the person of the defendant in the
principal action would necessarily mean that it likewise lacks such jurisdiction in the ancillary proceeding. In this case,
jurisdiction has not been acquired over Sievert in the principal action as no summons has been served upon him. Hence, it was
an error for the trial court to proceed with the hearing on the application for writ of preliminary attachment.
37. Davao Light v. Court of Appeals
Facts
The Davao Light and Power Co., Inc. ("Davao Light") filed a collection suit against Queensland Hotel ("Queensland") and
Teodorico Adarna ("Adarna") with an ex parte application for a writ of preliminary attachment. On 3 May 1989, the trial court
issued an Order of Attachment, and the corresponding Writ of Attachment on 11 May 1989. On 12 May 1989, the summons, a
copy of the complaint, and the writ of attachment was served upon Queensland and Adarna. Queensland and Adarna filed a
motion to discharge the attachment on the ground that at the time the Order of Attachment and Writ of Attachment were
issued, the trial court has yet to acquire jurisdiction over the cause of action and over the persons of the defendants.
Issue
Whether or not the writ of preliminary attachment was validly issued.
Held
Yes. A writ of preliminary attachment may be issued before the court acquires jurisdiction over the person of the defendant.
Provrem digests
Ratio Decidendi
The court may validly issue a writ of preliminary injunction prior to the acquisition of jurisdiction over the person of the
defendant. There is an appreciable period of time between the commencement of the action (takes place upon the filing of an
initiatory pleading) and the service of summons to the defendant. In the meanwhile, there are a number of actions which the
plaintiff or the court may validly take, including the application for and grant of the provisional remedy of preliminary
attachment. There is nothing in the law which prohibits the court from granting the remedy prior to the acquisition of
jurisdiction over the person of the defendant. In fact, Rule 57 of the Rules of Court allows the granting of a writ of preliminary
injunction at the commencement of the suit. In the cases of Toledo v. Burgos and Filinvest Credit Corporation v. Relova, it was
held that notice and hearing are not prerequisites to the issuance of a writ of preliminary attachment. Further, in the case
of Mindanao Savings & Loan Association, Inc. v. Court of Appeals, it was ruled that giving notice to the defendant would defeat
the purpose of the remedy by affording him or her the opportunity to dispose of his properties before the writ can be issued.
A preliminary attachment may be discharged with the same ease as obtaining it. In any case, the ease of availing the
provisional remedy of preliminary attachment is matched by the ease with which it can be remedied by either the posting of a
counterbond, or by a showing of its improper or irregular issuance. The second means of defeating a preliminary attachement,
however, may not be availed of if the writ was issued upon a ground which is at the same time the applicant's cause of action.
Preliminary attachment not binding until jurisdiction over the person of the defendant is acquired. The writ of preliminary
attachment, however, even though validly issued, is not binding upon the defendant until jurisdiction over his person is first
acquired.
38. .Du vs Stronghold Insurance (Remedial Law)
DU V. STRONGHOLD INSURANCE
G.R. No. 156580 | JUNE 14, 2004
FACTS:
Sometime in January 1989, Aurora De Leon sold a parcel of land registered in her name to Luz Du under a Conditional Deed of
Sale for a down payment of P75,000.00 leaving a balance of P95,000.00.
On April 28, 1989, Aurora de Leon sold the same property to spouses Enrique and Rosita Caliwag without prior notice to Luz
Du. As a result, Transfer Certificate of Title No. 2200 was issued in favor of the Caliwag spouses.
Meanwhile, Stronghold Insurance Corp., Inc. filed a civil case against the Caliwag spouses and other persons, for allegedly
defrauding Stronghold and misappropriating the companys 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 an action 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 TCT No. 2200.
On February 11, 1991, the court where the Stronghold case was filed ruled in favor of Stronghold, ordering the spouses Caliwag
jointly and severally to pay the plaintiff P8,691,681.60, among others. When the decision became final and executory,
on March 12, 1991, a notice of levy on execution was annotated on TCT No. 2200 and the attached property was sold in a
public auction. On August 5, 1991, the certificate of sale and the final Deed of Sale in favor of Stronghold were inscribed and
annotated leading to the TCT No. 6444 in the name of Stronghold.
13
It came to pass that on August 5, 1992, Luz Du too was able to secure a favorable judgment in Civil Case No. 60319 and which
became final and executory sometime in 1993, as well. Thus, Luz Du commenced the present action to cancel the TCT No. 6444
with damages claiming priority rights over the property by virtue of her Notice Of Lis Pendens under Entry No. 13305 and
inscribed on January 3, 1991, and the final and executory decision in he civil case she filed against spouses Caliwag.
According to Luz Du, despite her said notice of lis pendens annotated, Stronghold still proceeded with the execution of the
decision in the other civil case against the subject lot and ultimately the issuance of Transfer Certificate of Title No. 6444 in its
(Strongholds) name.
The trial court ruled that Stronghold had superior rights over the property because of the prior registration of the latters
notice of levy on attachment on Transfer Certificate of Title (TCT) No. 2200. For this reason, it found no basis to nullify TCT No.
6444, which was issued in the name of respondent after the latter had purchased the property in a public auction.
The CA affirmed the RTC Decision in toto and held thatnotice of levy on attachment had been registered almost 5
months before petitioners notice of lis pendens.
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
WON the acquisition of the subject property by Respondent Stronghold was tainted with bad faith
HELD:
1) Yes.
*Preference is given to a duly registered attachment over a subsequent notice of lis pendens, even if the beneficiary of the
notice acquired the subject property before the registration of the attachment. Under the torrens system, the auction sale of
an attached realty retroacts to the date the levy was registered. In this case ofTambao v. Suy, 52 Phil. 237, it has been held that
Where a preliminary attachment in favour of A was recorded earlier, and the private sale of the attached property in favour
of B was executed a year later, the attachment lien has priority over the private sale, which means that the purchaser took
the property subject to such attachment lien and to all of its consequences, one of which is the subsequent sale on execution.
The preference created by the levy on attachment is not diminished even by the subsequent registration of the prior
sale. In Capistrano v. PNB, if the attachment or levy of execution, though posterior to the sale, is registered before the sale is
registered, it takes a precedence over the latter. The rule is not altered by the fact that at the time of the execution sale the
Philippine National Bank had information that the land levied upon had already been deeded by the judgment debtor and his
wife to Capistrano. The auction sale being necessary sequel to the levy, for this was effected precisely to carry out the sale, the
purchase made by the bank at said auction should enjoy the same legal priority that the levy had over the sale in favour of
Provrem digests
plaintiff. In other words, the auction sale retroacts to the date of the levy. Were the rule otherwise, the preference enjoyed by
the levy of execution in a case like the present would be meaningless and illusory.
2) No
*Good faith: Defense in registration of attachment. It is settled that a person dealing with registered property may rely on the
title and be charged with notice of only such burdens and claims as are annotated thereon. This principle applies with more
force to this case, absent any allegation or proof that Stronghold had actual knowledge of the sale to petitioner before the
registration of its attachment. Thus, the annotation of respondents notice of attachment was a registration in good faith, the
kind that made its prior right enforceable.
39. Gotauco vs Registry of Deeds
Facts:
On August 12, 1932, when Exhibits A and B were presented to the register, by which a levy of execution against the judgment
debtor, Rafael Vilar was made on fifteen contracts of land described in Exhibit B and registered in the name of Florentino Vilar,
the register properly denied the inscription of said levy of execution because the title to the lands was in the name of
Florentino Vilar and no evidence was submitted that Rafael Vilar had any present or possible future interest in the land. On
September 17, 1932, there was presented to him a copy of a petition filed in the Court of First Instance of the province,
entitled, "Intestado del Finado Florentino Vilar", from which he could properly infer that Florentino Vilar was dead and that the
judgment debtor Rafael Vilar is one of the heirs of the deceased Florentino Vilar. Although the value of the participation of
Rafael Vilar in the estate of Florentino Vilar was indeterminable before the final liquidation of the estate, nevertheless, the
right of participation in the estate and the lands thereof may be attached and sold.
Issue: WON the indeterminable share of an heir in an estate be attached?
Ruling : Yes the Registry of Deeds could levy the indeterminable share of an heir in the estate of the decedent so as to protect
judgment creditors from being unable to recover from the debtor and preven
40. HB Zachary vs. Ca
On 17 July 1987, VBC entered into a written Subcontract Agreement[5]with Zachry, a foreign corporation. The latter had been
engaged by the United States Navy to design and construct 264 Family Housing Units at the US Naval Base at Subic, Zambales.
Under the agreement, specifically under Section 3 on Payment, VBC was to perform all the construction work on the housing
project and would be paid "for the performance of the work the sum of Six Million Four Hundred Sixty-eight Thousand U.S.
Dollars (U.S.$6,468,000.00), subject to additions and deductions for changes as hereinafter provided." This "lump sum price is
based on CONTRACTOR'S proposal, dated 21 May 1987 (including drawings), submitted to OWNER for Alternate Design-
Apartments.
In accordance with the above conditions, VBC submitted to Zachry on 10 January 1990 a detailed computation of the cost to
complete the subcontract on the housing project. According to VBC's computation, there remains a balance of $1,103,000.00
due in its favor as of 18 January 1990. This amount includes the sum of $200,000.00 allegedly withheld by Zachry and the labor
escalation adjustment granted earlier by the US Navy in the amount of $282,000.00 due VBC. Zachry, however, not only
refused to acknowledge the indebtedness but continually failed to submit to VBC a statement of accumulated costs, as a result
14
of which VBC was prevented from checking the accuracy of the said costs. On 2 March 1990, VBC wrote Zachry a letter
demanding compliance with its obligations.[9]Zachry still failed to do so. VBC made representations to pursue its claim,
including a formal claim with the Officer-in-Charge of Construction, NAVFAC Contracts, Southwest Pacific,[10] which also failed.
Hence, on 20 March 1990, VBC filed a Complaint[11] 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 on 30
March 1990. The case was docketed as Civil Case No. 90-772 and was raffled to Branch 142 of the said court presided over by
Judge Salvador P. de Guzman, Jr. 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."

On 21 March 1990, 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.[12] VBC put up the required bond and on 26 March 1990, the
trial court issued the writ of attachment,[13] which was served, together with the summon. Upon appeal the CA set aside the
Writ of Attachment.

Issue: WON the CA erred in setting the Writ of attachment aside?

Ruling:

Yes the CA erred in setting aside the writ of attachment.

For the guidance of all concerned, the Court reiterates and reaffirms the proposition that writs of attachment may properly
issue ex parte provided that the Court is satisfied that the relevant requisites therefor have been fulfilled by the applicant,
although it may, in it's discretion, require prior hearing on the application with notice to the defendant; but that levy on
property pursuant to the writ thus issued may not be validly effected unless preceded, or contemporaneously accompanied, by
service on the defendant of summons, a copy of the complaint (and of the appointment of guardian ad litem,if any), the
application for attachment (if not incorporated in but submitted separately from the complaint), the order of attachment, and
the plaintiff's attachment bond."[47]q

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 person of 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."

15
Provrem digests