LMMAnuLL C. CRA1L and LCCn PCLulnCS CC8C8A1lCn, peLlLloners, vs. PCn. ZLuS C. A88CCA8, as resldlng !udge of 8ranch 130 of Lhe 8eglonal 1rlal CourL of MakaLl, and Sun LllL ASSu8AnCL CCMAn? Cl CAnAuA, respondenLs.
88unnL8 uLvLLCMLn1 CC8C8A1lCn, peLlLloner, vs. PCn. ZLuS C. A88CCA8, as resldlng !udge of 8ranch 130 of Lhe 8eglonal 1rlal CourL of MakaLl, and Sun LllL ASSu8AnCL CCMAn? Cl CAnAuA, respondenLs.
8 L S C L u 1 l C n
MLnuCZA, !.:
1hese are moLlons separaLely flled by peLlLloners, seeklng reconslderaLlon of Lhe declslon of Lhe Second ulvlslon holdlng LhaL alLhough Lhe levy on aLLachmenL of peLlLloners' properLles had been made before Lhe Lrlal courL acqulred [urlsdlcLlon over Lhem, Lhe subsequenL servlce of summons on Lhem cured Lhe lnvalldlLy of Lhe aLLachmenL.
1he moLlons were referred Lo Lhe CourL en banc ln vlew of Lhe facL LhaL ln anoLher declslon rendered by Lhe 1hlrd ulvlslon on Lhe same quesLlon, lL was held LhaL Lhe subsequenL acqulslLlon of [urlsdlcLlon over Lhe person of a defendanL does noL render valld Lhe prevlous aLLachmenL of hls properLy. 1 1he CourL en banc accepLed Lhe referral and now lssues Lhls resoluLlon.
eLlLloners malnLaln LhaL, ln accordance wlLh prlor declslons of Lhls CourL, Lhe aLLachmenL of Lhelr properLles was vold because Lhe Lrlal courL had noL aL LhaL Llme acqulred [urlsdlcLlon over Lhem and LhaL Lhe subsequenL servlce of summons on Lhem dld noL cure Lhe lnvalldlLy of Lhe levy. 1hey furLher conLend LhaL Lhe examlnaLlon of Lhe books and ledgers of Lhe 8ank of Lhe hlllpplne lslands (8l), Lhe hlllpplne naLlonal 8ank (n8) and Lhe urban 8ank was a "flshlng expedlLlon" whlch Lhe Lrlal courL should noL have auLhorlzed because peLlLloner Lmmanuel C. CnaLe, whose accounLs were examlned, was noL a slgnaLory Lo any of Lhe documenLs evldenclng Lhe LransacLlon beLween Sun Llfe Assurance of Canada (Sun Llfe) and 8runner uevelopmenL CorporaLlon (8runner).
Cn Lhe oLher hand prlvaLe respondenL Sun Llfe sLresses Lhe facL LhaL Lhe Lrlal courL evenLually acqulred [urlsdlcLlon over peLlLloners and conLends LhaL Lhls cured Lhe lnvalldlLy of Lhe aLLachmenL of peLlLloners' properLles. WlLh respecL Lo Lhe second conLenLlon of peLlLloners, prlvaLe respondenL argues LhaL Lhe examlnaLlon of peLlLloner CnaLe's bank accounL was [usLlfled because lL was he who slgned checks Lransferrlng huge amounLs from 8runner's accounL ln Lhe urban 8ank Lo Lhe n8 and Lhe 8l.
l
AL Lhe ouLseL, lL should be sLaLed LhaL Lhe CourL does noL ln Lhe leasL doubL Lhe valldlLy of Lhe wrlL of aLLachmenL lssued ln Lhese cases. 1he facL LhaL a crlmlnal complalnL for esLafa whlch Sun Llfe had flled agalnsL peLlLloner CnaLe and noel L. ulno, presldenL of 8runner, was dlsmlssed by Lhe Cfflce of Lhe rovlnclal rosecuLor ls lmmaLerlal Lo Lhe resoluLlon of Lhe moLlons for reconslderaLlon. ln Lhe flrsL place, Lhe dlsmlssal, alLhough laLer afflrmed by Lhe ueparLmenL of !usLlce, ls pendlng reconslderaLlon. ln Lhe second place, slnce Lhe lssue ln Lhe case below ls preclsely wheLher peLlLloners were gullLy of fraud ln conLracLlng Lhelr obllgaLlon, resoluLlon of Lhe quesLlon musL awalL Lhe Lrlal of Lhe maln case.
Powever, we flnd peLlLloners' conLenLlon respecLlng Lhe valldlLy of Lhe aLLachmenL of Lhelr properLles Lo be well Laken. We hold LhaL Lhe aLLachmenL of peLlLloners' properLles prlor Lo Lhe acqulslLlon of [urlsdlcLlon by Lhe respondenL courL ls vold and LhaL Lhe subsequenL servlce of summons on peLlLloners dld noL cure Lhe lnvalldlLy of such aLLachmenL. 1he records show LhaL before Lhe summons and Lhe complalnL were served on peLlLloners CnaLe and Lcon Poldlngs CorporaLlon (Lcon) on !anuary 9, 1992, uepuLy Sherlff ArLuro C. llores had already served on !anuary 3, 1992 noLlces of garnlshmenL on Lhe n8 Pead offlce 2 and on all lLs MeLro Manlla branches and an A.8 caplLal. 3 ln addlLlon he made oLher levles before Lhe servlce of summons on peLlLloners, Lo wlL:
- Cn !anuary 6, 1992, he served noLlces of garnlshmenL on Lhe urban 8ank Pead Cfflce and all lLs MeLro Manlla branches, 4 and on Lhe 8l. 3
- Cn Lhe same day, he levled on aLLachmenL CnaLe's condomlnlum unlL aL Lhe Amorsolo AparLmenLs Condomlnlum ro[ecL, covered by Condomlnlum CerLlflcaLe of 1lLle no. S-1738. 6
- Cn !anuary 7, 1992, he served noLlce of garnlshmenL on Lhe unlon 8ank of Lhe hlllpplnes. 7
- Cn !anuary 8, 1992, he aLLached CnaLe's loL, conslsLlng of 1,236 square meLers, aL Lhe Ayala-Alabang Subdlvlslon, Alabang, MunLlnlupa, covered by 1C1 no. 112673. 8
llrsL. 1he uepuLy Sherlff clalms LhaL he had Lrled Lo serve Lhe summons wlLh a copy of Lhe complalnL on peLlLloners on !anuary 3, 1992 buL LhaL Lhere was no one ln Lhe offlces of peLlLloners on whom he could make a servlce. 1hls ls denled by peLlLloners who clalm LhaL Lhelr offlce was always open and LhaL Adellza M. !aranllla, Lcon's Chlef AccounLanL who evenLually recelved summons on behalf of CnaLe and Lcon, was presenL LhaL day. WhaLever Lhe LruLh ls, Lhe facL ls LhaL no oLher aLLempL was made by Lhe sherlff Lo serve Lhe summons excepL on !anuary 9, 1992, ln Lhe case of CnaLe and Lcon, and on !anuary 16, 1992, ln Lhe case of ulno. MeanLlme, he made several levles, whlch lndlcaLes a predlsposlLlon Lo serve Lhe wrlL of aLLachmenL ln anLlclpaLlon of Lhe evenLual acqulslLlon by Lhe courL of [urlsdlcLlon over peLlLloners.
Second. rlvaLe respondenL lnvokes Lhe rullng ln uavao LlghL & ower Co. v. CourL of Appeals 9 ln supporL of lLs conLenLlon LhaL Lhe subsequenL acqulslLlon of [urlsdlcLlon by Lhe courL cured Lhe defecL ln Lhe proceedlngs for aLLachmenL. lL clLes Lhe followlng porLlon of Lhe declslon ln uavao LlghL and ower, wrlLLen by !usLlce, now Chlef !usLlce, narvasa:
lL goes wlLhouL saylng LhaL whaLever be Lhe acLs done by Lhe CourL prlor Lo Lhe acqulslLlon of [urlsdlcLlon over Lhe person of Lhe defendanL, as above lndlcaLed - lssuance of summons, order of aLLachmenL and wrlL of aLLachmenL (and/or appolnLmenL of guardlan ad llLem, or granL of auLhorlLy Lo Lhe plalnLlff Lo prosecuLe Lhe sulL as a pauper llLlganL, or amendmenL of Lhe complalnL by Lhe plalnLlff as a maLLer of rlghL wlLhouL leave of courL - and however valld and proper Lhey mlghL oLherwlse be, Lhese do noL and cannoL blnd and affecL Lhe defendanL unLll and unless [urlsdlcLlon over hls person ls evenLually obLalned by Lhe courL, elLher by servlce on hlm of summons or oLher coerclve process or hls volunLary submlsslon Lo Lhe courL's auLhorlLy. Pence, when Lhe sherlff or oLher proper offlcer commences lmplemenLaLlon of Lhe wrlL of aLLachmenL, lL ls essenLlal LhaL he serve on Lhe defendanL noL only a copy of Lhe appllcanL's affldavlL and aLLachmenL bond, and of Lhe order of aLLachmenL, as expllclLly requlred by SecLlon 3 of 8ule 37, buL also Lhe summons addressed Lo sald defendanL as well as a copy of Lhe complalnL and order for appolnLmenL of guardlan ad llLem, lf any, as also expllclLly dlrecLed by SecLlon 3, 8ule 14 of Lhe 8ules of CourL. 10
lL ls clear from Lhe above excerpL, however, LhaL whlle Lhe peLlLlon for a wrlL of prellmlnary aLLachmenL may be granLed and Lhe wrlL lLself lssued before Lhe defendanL ls summoned, Lhe wrlL of aLLachmenL cannoL be lmplemenLed unLll [urlsdlcLlon over Lhe person of Lhe defendanL ls obLalned. As Lhls CourL explalned, "levy on properLy pursuanL Lo Lhe wrlL Lhus lssued may noL be valldly effecLed unless preceded, or conLemporaneously accompanled, by servlce on Lhe defendanL of summons, a copy of Lhe complalnL (and of Lhe appolnLmenL of guardlan ad llLem, lf any), Lhe appllcaLlon for aLLachmenL (lf noL lncorporaLed ln buL submlLLed separaLely from Lhe complalnL), Lhe order of aLLachmenL, and Lhe plalnLlff's aLLachmenL bond." 11
lurLher clarlflcaLlon on Lhls polnL was made ln CuarLero v. CourL of Appeals, 12 ln whlch lL was held:
lL musL be emphaslzed LhaL Lhe granL of Lhe provlslonal remedy of aLLachmenL pracLlcally lnvolves Lhree sLages, flrsL, Lhe courL lssues Lhe order granLlng Lhe appllcaLlon, second, Lhe wrlL of aLLachmenL lssues pursuanL Lo Lhe order granLlng Lhe wrlL, and Lhlrd, Lhe wrlL ls lmplemenLed. lor Lhe lnlLlal Lwo sLages, lL ls noL necessary LhaL [urlsdlcLlon over Lhe person of Lhe defendanL should flrsL be obLalned. Powever, once Lhe lmplemenLaLlon commences, lL ls requlred LhaL Lhe courL musL have acqulred [urlsdlcLlon over Lhe defendanL for wlLhouL such [urlsdlcLlon, Lhe courL has no power and auLhorlLy Lo acL ln any manner agalnsL Lhe defendanL. Any order lssulng from Lhe CourL wlll noL blnd Lhe defendanL.
rlvaLe respondenL argues LhaL Lhe case of CuarLero lLself provldes for an excepLlon as shown ln Lhe sLaLemenL LhaL "Lhe courL [ln lssulng Lhe wrlL of prellmlnary aLLachmenL] cannoL blnd and affecL Lhe defendanL unLll [urlsdlcLlon ls evenLually obLalned" and LhaL slnce peLlLloners were subsequenLly served wlLh summons, no quesLlon can be ralsed agalnsL Lhe valldlLy of Lhe aLLachmenL of peLlLloners' properLles before such servlce.
1he sLaLemenL ln quesLlon has been Laken ouL of conLexL. 1he full sLaLemenL reads:
lL ls clear from our pronouncemenLs LhaL a wrlL of prellmlnary aLLachmenL may lssue even before summons ls served upon Lhe defendanL. Powever, we have llkewlse ruled LhaL Lhe wrlL cannoL blnd and affecL Lhe defendanL unLll [urlsdlcLlon over hls person ls evenLually obLalned. 1herefore, lL ls requlred LhaL when proper offlcer commences lmplemenLaLlon of Lhe wrlL of aLLachmenL servlce of summons should be slmulLaneously made. 13
lndeed, as Lhls CourL Lhrough lLs llrsL ulvlslon has ruled on facLs slmllar Lo Lhose ln Lhese cases, Lhe aLLachmenL of properLles before Lhe servlce of summons on Lhe defendanL ls lnvalld, even Lhough Lhe courL laLer acqulres [urlsdlcLlon over Lhe defendanL. 14 AL Lhe very leasL, Lhen, Lhe wrlL of aLLachmenL musL be served slmulLaneously wlLh Lhe servlce of summons before Lhe wrlL may be enforced. As Lhe properLles of Lhe peLlLloners were aLLached by Lhe sherlff before he had served Lhe summons on Lhem, Lhe levles made musL be consldered vold.
1hlrd. nor can Lhe aLLachmenL of peLlLloners' properLles before Lhe servlce of summons on Lhem was made be [usLlfled an Lhe ground LhaL unless Lhe wrlL was Lhen enforced, peLlLloners would be alerLed and mlghL dlspose of Lhelr properLles before summons could be served on Lhem.
1he 8ules of CourL do noL requlre LhaL lssuance of Lhe wrlL be kepL a secreL unLll lL can be enforced. CLherwlse ln no case may Lhe servlce of summons on Lhe defendanL precede Lhe levy on aLLachmenL. 1o Lhe conLrary, 8ule 37, 13 allows Lhe defendanL Lo move Lo dlscharge Lhe aLLachmenL even before any aLLachmenL ls acLually levled upon, Lhus negaLlng any lnference LhaL before lLs enforcemenL, Lhe lssuance of Lhe wrlL musL be kepL secreL. 8ule 37, 13 provldes:
Sec. 13. ulscharge of aLLachmenL for lmproper or lrregular lssuance. - 1he parLy whose properLy has been aLLached may also, aL any Llme elLher before or afLer Lhe release of Lhe aLLached properLy, or before any aLLachmenL shall have been acLually levled, upon reasonable noLlce Lo Lhe aLLachlng credlLor, apply Lo Lhe [udge who granLed Lhe order, or Lo Lhe [udge of Lhe courL ln whlch Lhe acLlon ls pendlng, for an order Lo dlscharge Lhe aLLachmenL on Lhe ground LhaL Lhe same was lmproperly or lrregularly lssued. . . . (Lmphasls added).
As Lhls CourL polnLed ouL ln uavao LlghL and ower, 13 Lhe llfLlng of an aLLachmenL "may be resorLed Lo even before any properLy has been levled on."
lL ls lndeed Lrue LhaL proceedlngs for Lhe lssuance of a wrlL of aLLachmenL are generally ex parLe. ln Mlndanao Savlngs and Loans Ass'n v. CourL of Appeals 16 lL was held LhaL no hearlng ls requlred for Lhe lssuance of a wrlL of aLLachmenL because Lhls "would defeaL Lhe ob[ecLlve of Lhe remedy [because] Lhe Llme whlch such hearlng would Lake could be enough Lo enable Lhe defendanL Lo abscond or dlspose of hls properLy before a wrlL of aLLachmenL lssues." lL ls noL, however, noLlce Lo defendanL LhaL ls soughL Lo be avolded buL Lhe "Llme whlch such hearlng would Lake" because of Lhe posslblllLy LhaL defendanL may delay Lhe hearlng Lo be able Lo dlspose of hls properLles. Cn Lhe conLrary Lhere may ln facL be a need for a hearlng before Lhe wrlL ls lssued as where Lhe lssue of fraudulenL dlsposal of properLy ls ralsed. 17 lL ls noL Lrue LhaL Lhere should be no hearlng lesL a defendanL learns of Lhe appllcaLlon for aLLachmenL and he remove's hls properLles before Lhe wrlL can be enforced.
Cn Lhe oLher hand, Lo auLhorlze Lhe aLLachmenL of properLy even before [urlsdlcLlon over Lhe person of Lhe defendanL ls acqulred Lhrough Lhe servlce of summons or hls volunLary appearance could lead Lo abuse. lL ls enLlrely posslble LhaL Lhe defendanL may noL know of Lhe flllng of a case agalnsL hlm and consequenLly may noL be able Lo Lake sLeps Lo proLecL hls lnLeresLs.
nor may sherlff's fallure Lo ablde by Lhe law be excused on Lhe preLexL LhaL afLer all Lhe courL laLer acqulred [urlsdlcLlon over peLlLloners. More lmporLanL Lhan Lhe need for lnsurlng success ln Lhe enforcemenL of Lhe wrlL ls Lhe need for afflrmlng a prlnclple by lnslsLlng on LhaL "mosL fundamenLal of all requlslLes - Lhe [urlsdlcLlon of Lhe courL lssulng aLLachmenL over Lhe person of Lhe defendanL." 18 lL may be LhaL Lhe same resulL would follow from requlrlng LhaL a new wrlL be served all over agaln. 1he symbollc slgnlflcance of such an acL, however, ls LhaL lL would afflrm our commlLmenL Lo Lhe rule of law. 19
ll
We llkewlse flnd peLlLloners' second conLenLlon Lo be merlLorlous. 1he records show LhaL, on !anuary 21, 1992, respondenL [udge ordered Lhe examlnaLlon of Lhe books of accounLs and ledgers of 8runner aL Lhe urban 8ank, Legaspl vlllage branch, and on !anuary 30, 199 Lhe records of accounL of peLlLloner CnaLe aL Lhe 8l, even as he ordered Lhe n8 Lo produce Lhe records regardlng cerLaln checks deposlLed ln lL.
llrsL. Sun Llfe defends Lhese courL orders on Lhe ground LhaL Lhe money pald by lL Lo 8runner was subsequenLly wlLhdrawn from Lhe urban 8ank afLer lL had been deposlLed by 8runner and Lhen Lransferred Lo 8l and Lo Lhe unnamed accounL ln Lhe peLlLloner CnaLe's accounL ln Lhe 8l and Lo Lhe unnamed accounL ln Lhe n8.
1he lssue before Lhe Lrlal courL, however, concerns Lhe naLure of Lhe LransacLlon beLween peLlLloner 8runner and Sun Llfe. ln lLs complalnL, Sun Llfe alleges LhaL CnaLe, ln hls personal capaclLy and as presldenL of Lcon, offered Lo sell Lo Sun Llfe 46,990,000.00 worLh of Lreasury bllls owned by Lcon and 8runner aL Lhe dlscounLed prlce of 39,326,300.82, LhaL on november 27, 1991, Sun Llfe pald Lhe prlce by means of a check payable Lo 8runner, LhaL 8runner, Lhrough lLs presldenL noel L. ulno, lssued Lo lL a recelpL wlLh underLaklng Lo dellver Lhe Lreasury bllls Lo Sun Llfe, and LhaL on uecember 4, 1991, 8runner and ulno dellvered lnsLead a promlssory noLe, daLed november 27, 1991, ln whlch lL was made Lo appear LhaL Lhe LransacLlon was a money placemenL lnsLead of sale of Lreasury bllls.
1hus Lhe lssue ls wheLher Lhe money pald Lo 8runner was Lhe conslderaLlon for Lhe sale of Lreasury bllls, as Sun Llfe clalms, or wheLher lL was money lnLended for placemenL, as peLlLloners allege. eLlLloners do noL deny recelpL of 39,326,300.82 from Sun Llfe. Pence, wheLher Lhe LransacLlon ls consldered a sale or money placemenL does noL make Lhe money Lhe "sub[ecL maLLer of llLlgaLlon" wlLhln Lhe meanlng of 2 of 8epubllc AcL no. 1403 whlch prohlblLs Lhe dlsclosure or lnqulry lnLo bank deposlLs excepL "ln cases where Lhe money deposlLed or lnvesLed ls Lhe sub[ecL maLLer of llLlgaLlon." nor wlll lL maLLer wheLher Lhe money was "swlndled" as Sun Llfe conLends.
Second. 1he examlnaLlon of bank books and records cannoL be [usLlfled under 8ule 37, 10. 1hls provlslon sLaLes:
Sec. 10. LxamlnaLlon of parLy whose properLy ls aLLached and persons lndebLed Lo hlm or conLrolllng hls properLy, dellvery of properLy Lo offlcer. - Any person owlng debLs Lo Lhe parLy whose properLy ls aLLached or havlng ln hls possesslon or under hls conLrol any credlL or oLher personal properLy belonglng Lo such parLy, may be requlred Lo aLLend before Lhe courL ln whlch Lhe acLlon ls pendlng, or before a commlssloner appolnLed by Lhe courL, and be examlned on oaLh respecLlng Lhe same. 1he parLy whose properLy ls aLLached may also be requlred Lo aLLend for Lhe purpose of glvlng lnformaLlon respecLlng hls properLy, and may be examlned on oaLh. 1he courL may, afLer such examlnaLlon, order personal properLy capable of manual dellvery belonglng Lo hlm, ln Lhe possesslon of Lhe person so requlred Lo aLLend before Lhe courL, Lo be dellvered Lo Lhe clerk of Lhe courL, sherlff, or oLher proper offlcer on such Lerms as may be [usL, havlng reference Lo any llen Lhereon or clalms agalnsL Lhe same, Lo awalL Lhe [udgmenL ln Lhe acLlon.
Slnce, as already sLaLed, Lhe aLLachmenL of peLlLloners' properLles was lnvalld, Lhe examlnaLlon ordered ln connecLlon wlLh such aLLachmenL musL llkewlse be consldered lnvalld. under 8ule 37, 10, as quoLed above, such examlnaLlon ls only proper where Lhe properLy of Lhe person examlned has been valldly aLLached.
WPL8LlC8L, Lhe declslon daLed lebruary 21, 1994 ls 8LCCnSluL8Lu and SL1 ASluL and anoLher one ls rendered C8An1lnC Lhe peLlLlons for cerLlorarl and SL11lnC ASluL Lhe orders daLed lebruary 26, 1992 and SepLember 9, 1992, lnsofar as Lhey auLhorlze Lhe aLLachmenL of peLlLloners' properLles and Lhe examlnaLlon of bank books and records perLalnlng Lo Lhelr accounLs, and C8uL8lnC respondenL !udge Zeus C. Abrogar -
(1) forLhwlLh Lo lssue an allas wrlL of aLLachmenL upon Lhe same bond furnlshed by respondenL Sun Llfe Assurance Company of Canada,
(2) dlrecL Lhe sherlff Lo llfL Lhe levy under Lhe orlglnal wrlL of aLLachmenL and slmulLaneously levy on Lhe same properLles pursuanL Lo Lhe allas wrlL so lssued, and
(3) Lake such sLeps as may be necessary Lo lnsure LhaL Lhere wlll be no lnLervenlng perlod beLween Lhe llfLlng of Lhe orlglnal aLLachmenL and Lhe subsequenL levy under Lhe allas wrlL.
eLlLloners may flle Lhe necessary counLerbond Lo prevenL subsequenL levy or Lo dlssolve Lhe aLLachmenL afLer such levy.