CALO V. ROLDAN GR no.

FACTS:
Regino Relova and Teodula Bartolome filed a complaint against Tranquilino Calo
and Doroteo San Jose for conniving with each other, and through the use of force,
stealth, threats, and intimidation, intend to enter and work or harvest existing fruits may
be found in the lands allegedly owned and possessed by the Relova.
Calo prayed for the issuance of the preliminary injunction (PI) to be issued ex
parte to immediately restrain, enjoin, and prohibit the defendants and their agents from
entering and interfering with the harvest of the lands belonging to the plaintiffs.
Relova opposed the PI on the ground that they are owners of the lands and have
been in actual possession thereof since 1925.
The Judge Roldan denied the petition for the PI on the ground that Calo were in
actual possession of said lands.
Motion for Reconsideration (MR) was filed but was not decided by the CFI.
Calo then filed an urgent petition ex-parte praying that the MR of the order
denying their petition for PI be granted and/or for the appointment of the receiver of the
properties on the ground that:
a) Calo have interest in properties in question and the fruits were in danger of being
lost unless a receiver is appointed
b) The appointment of a receiver was the most convenient and feasible means of
preserving, administering, and or disposing of the properties in litigation which
included their fruits
Judge Roldan decided to consider the MR and granted the appointment of a
receiver.
ISSUE:
WON it is proper for the plaintiffs to apply and be granted of the preliminary
attachment.
HELD:
Calo alleged that they are the owners and were in actual possession of the lands
described in the complaint and their fruits, the action of injunction filed by them is the
proper and adequate remedy in law, for a judgment in favor of plaintiffs would quiet their
title to said lands.
The provisional remedies (PRs) denominated attachment, preliminary
injunction, receivership, and delivery of personal property, provided in Rules 59,
60, 61, and 62 of the ROC, 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 by the nature of such action does not require such protection or
preservation, said remedies cannot be applied for and granted. To each kind of
action, a proper provisional remedy is provided by law. The Rules of Court clearly
specify the case in which they may be properly granted.
According to law, the Provisional Remedy proper to Calos action of injunction is
a petition for preliminary injunction, if Calos theory as set forth in the complaint, that he
is the owner and in actual possession of the premises is correct. But as the lower court
found at the hearing of the petition for preliminary injunction that the defendants were in
possession of the lands, the lower court acted in accordance with law in denying the
petition.
It appears evident that the respondent judge acted in excess of his jurisdiction in
appointing a receiver.
The litigation or issue raised by Calo in their complaint is not the ownership or
possession of the lands and their fruits. It 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.

Adlawan vs Tomol G.R. No. L-63225

Facts:
Eleazar A. Adlawan, a private contractor, was awarded by the NIA and
BPH for the construction of various infrastructure projects of the government.
Petitioner sought financial assistance and support from private respondent
Aboitiz and Company, Inc. and for failure to pay the his obligations to Aboitiz the latter
filed a case1 for the collection of a sum of money and damages including an ex-parte
application for the issuance of a writ of preliminary attachment against his property.
The Executive Judge without notice and hearing issued an order directing
the issuance of a writ of preliminary attachment against all the properties of Adlawan.
Thereafter, the case was raffled to the sala of Judge Tomol. The writs of
preliminary attachment were issued addressed to the Sheriffs directing them to attach
the real and personal properties of Adlawan. The properties of Adlawan were attached
on the strength of writ of preliminary attachment and given to the custody of Aboitiz.

Judge Tomol issued an order lifting and setting aside the writ of
preliminary attachment and ordered the return of the property attached and levied.
Thus, petitioner was able to recover some of his properties
In view of the foregoing, Aboitiz and Company, Inc. filed an Urgent ExParte Motion, praying for the stay of the Order dissolving the writ of preliminary
attachment, thus maintaining the status quo.
Consequently, respondent Judge Tomol issued on the same day an
Orders 8granting the motion prayed for by private respondent Aboitiz and Company,
Inc. Thus, the Order was stayed.
But on the following day, this order was stayed by the same respondent
judge leaving the rest of petitioner's properties with private respondent. Later, private
respondent withdrew its complaint which was confirmed by respondent Judge Tomol.
Petitioner Adlawan filed a motion to have the rest of his properties returned but
respondent judge refused to act on said motion due to cases filed by both parties in the
different branches of the Court of First Instance of Cebu relating to the same case
Respondent Judge Tomol issued an Order terminating the case.
Hence, the present petition for certiorari and mandamus impleading
respondent Judge Valeriano P. Tomol Judge Ceferino E. Dulay and private respondent
Aboitiz and Company.

ISSUE:
WON the Judge exercise grave abuse of discretion in setting aside the writ of
preliminary attachment subsequently lifting it and terminating the case.
Ruling:
We rule in favor of petitioner Adlawan.
There is no question that the order of respondent Judge Valeriano P. Tomol, Jr.
lifting and vacating the order granting the writ of preliminary attachment is a valid order,
issued while he had jurisdiction over the case. The execution of aforesaid order was
stayed for a period of fifteen (15) days on motion of the plaintiff(Adlawan) to enable the
latter to question the propriety or impropriety of the same in the appellate court. Instead,
plaintiff filed a civil case for delivery of Personal Properties with Replevin and Damages
with another branch of the CFI of Cebu. Accordingly, having failed to appeal or question
the aforementioned order in the appellate court as originally manifested, the same
became final and executory.
It is basic that once a judgment becomes final, the prevailing party is entitled as a
matter of right to a Writ of Execution, and the issuance thereof is the Court's ministerial
duty."17

The reasons advanced by respondent Judge Tomol for denying the enforcement
of his order which lifted the writ of attachment and the restoration of the seized
properties to the defendant petitioner herein are: [a] the filing by private respondent of
Civil Case in CFI-Lapu-Lapu City for delivery of Personal Properties with Replevin and
Damages which as a consequence, the same properties involved in this case were
seized under a writ of replevin upon order of aforesaid court and [b] the filing by
petitioner of Civil Case of the Court of First Instance of Cebu, for damages.
Hence, the issues in this case center on the nature and purpose of the writ of
attachment.
A writ of preliminary attachment is a provisional remedy issued upon order of the
court where an action is pending to be levied upon the property or properties of the
defendant therein, the same to be held thereafter by the Sheriff as security for the
satisfaction of whatever judgment might be secured in said action by the attaching
creditor against the defendant. 18
The provisional remedy of attachment is available in order that the defendant
may not dispose of his property attached, and thus secure the satisfaction of any
judgment that may be secured by plaintiff from defendant. 19 The purpose and function
of an attachment or garnishment is two-fold. First, it seizes upon property of an alleged
debtor in advance of final judgment and holds it subject to appropriation thus prevents
the loss or dissipation of the property by fraud or otherwise. Second, it subjects to the
payment of a creditor's claim property of the debtor in those cases where personal
service cannot be obtained upon the debtor. 20 This remedy is to secure a contingent
lien on defendant's property until plaintiff can, by appropriate proceedings, obtain a
judgment and have such property applied to its satisfaction, or to make some provision
for unsecured debts in cases where the means of satisfaction thereof are liable to be
removed beyond the jurisdiction, or improperly disposed of or concealed, or otherwise
placed beyond the reach of creditors. 21
Attachment is an ancillary remedy. It is not sought for its own sake but rather to
enable the attaching party to realize upon relief sought and expected to be granted in
the main or principal pal action. 22
The remedy of attachment is adjunct to the main suit, therefore, it can have no
independent existence apart from a suit on a claim of the plaintiff against the defendant.
In other words, an attachment or garnishment is generally ancillary to, and dependent
on, a principal proceeding, either at law or in equity, which has for its purpose a
determination of the justice of creditor's demand. 23
Thus, this Court ruled that upon levy by attachment of the property in question by
order of the Court, said property fell into custodia legis of that court for purposes of that
civil case only. Any relief against such attachment and the execution an issuance of a
writ of possession that ensued subsequently could be disposed of only in that case. 24

More specifically, it was held that courts have no jurisdiction to order the delivery
of personal property (replevin) to the plaintiff if the property is under attachment. 25
Only courts having supervisory control or superior jurisdiction in the premises, have the
right to interfere with and change possession of property in custodia legis. 26
More recently, this Court ruled that the garnishment of property to satisfy a writ of
execution operates as an attachment and fastens upon the property a lien by which the
property is brought under the jurisdiction of the court issuing the writ. It is brought into
custodia legis under the sole control of such court. 27
During the life of the attachment, the attached property continues in the custody
of the law, the attaching officer being entitled to its possession and liability for its safe
keeping. 28
Based on the above-cited principles, it is obvious that the writ of preliminary
attachment issued is already dissolved and trendered non-existent in view of the
withdrawal of the complaint by Aboitiz and Company, Inc. More importantly, even if the
writ of attachment can be considered independently of the main case, the same, having
been improperly issued as found by respondent Judge Tomol himself, is null and void
and cannot be a justification for holding petitioners' properties in custodia legis any
longer.
To reiterate, an attachment is but an incident to a suit; and unless the suit can be
maintained, the attachment must fall.
When Aboitiz and Company, Inc. withdrew its complaint, the attachment ceased
to have a leg to stand on. The attached properties of petitioner Adlawan which are in the
custody of private respondent Aboitiz should be returned to petitioner. This is only
proper and equitable and in consonance with the rules and principles of law. The
parties, by the withdrawal of the complaint, should be placed in the same standing as
they were before the filing of the same.
Finally, the employment by counsel for private respondent of dubious procedural
maneuvers as what transpired in the case at bar obviously to continue the wrongful and
illegal possession and custody of petitioner's properties even after the dissolution of the
attachment is to say the least, hardly commendable if not a form of "forum shopping", to
seek the court where he may possibly obtain favorable judgment. 31
It may therefore be stated that the right to come before the Courts to redress a
grievance or right a wrong should be exercised with prudence and good faith. In the
case of Indianapolis v. Chase National Bank, Trustee, 314 U.S. 69, it is opined that
"Litigation is the pursuit of practical ends, not a game of chess."
WHEREFORE, in view of the foregoing, this Court rules that the attached
properties left in the custody of private respondent Aboitiz and Company, Inc. be
returned to petitioner Eleazar V. Adlawan without prejudice to the outcome of the cases
filed by both parties.

GUZMAN vs.CATOLICO G.R. No. L-45720

Facts:
On March 8, 1937, the respondent Alfredo Catolico brought an action against the
herein petitioner Ventura Guzman in the Court of First Instance of Isabela, for the
recovery from the latter of the amount of his fees for services rendered by him as
attorney, praying, at the same time, for the issuance of a writ of preliminary attachment
against all of the properties adjudicated to said petitioner in special proceedings No. 179
of said court. As grounds for the issuance of said writ of preliminary attachment, he
alleged: "That the herein defendant is trying to sell and dispose of the properties
adjudicated to him, with intention to defraud his creditors, particularly the herein plaintiff,
thereby rendering illusory the judgment that may be rendered against him, inasmuch as
he has no other properties outside the same to answer for the fees the court may fix in
favor of the plaintiff, this case being one of those mentioned by the Code of Civil
Procedure warranting the issuance of a writ of preliminary attachment"
In view of the said complaint and affidavit, the respondent judge, on March 10,
1937, issued an order granting the petition and ordering the issuance of a writ of
preliminary attachment, after the filing of the corresponding bond by the plaintiff.
On April 15, 1937, said defendant Ventura Guzman filed a motion for the
cancellation of said writ of preliminary attachment on the ground that it had been
improperly, irregularly and illegally issued, there being no allegation, either in the
complaint or in the affidavit solemnizing it, that there is no other sufficient security for
the claim sought to be enforced by the action; that the amount due to the plaintiff, above
the legal set-off and counterclaim, is as much as the sum of which the preliminary
attachment has been granted, and that the affidavit of the plaintiff is base in mere
information and belief.

Issue:
whether or not the requisites prescribed by law for the issuance of a writ of
preliminary attachment have been complied with.

Held:
No. Section 426 of the Code of the Civil Procedure provides that "A judge or
justice of the peace shall grant an order of attachment when it is made to appear to the
judge or justice of the peace by the affidavit of the plaintiff, or of some other person who
knows the facts, that a sufficient cause of action exists, and that the case is one of
those mentioned in section four hundred and twenty-four, and 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 granted."
With respect to the last requisites just stated above, the affidavit is not defective
because in it the therein plaintiff and herein respondent Alfredo Catolico states "that all
the allegations thereof are certain and true, to the best of my knowledge and belief", and
not that they are so according to his information and belief.
As to the other two requisites, 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?lawphil.net
Attachment is a juridical institution which has for its purpose to secure the
outcome of the trial, that is, the satisfaction of the pecuniary obligation really contracted
by a person or believed to have been contracted by him, either by virtue of a civil
obligation emanating from contract or law, or by virtue of some crime or misdemeanor
that he might have committed, and the writ issued, granting it, is executed by attaching
and safely keeping all the movable property of the defendant, or so much thereof as
may be sufficient to satisfy the plaintiff's demands (sec. 428, Act No. 190), or by filing a
copy of said writ with the register of deeds for the province in which the real property is
situated, whether standing upon the records in the name of the defendant or not
appearing at all upon the record, which constitutes a limitation of ownership or the right
to enjoy or dispose of a thing without further limitations than those established by law
(art. 348, Civil Code), since the owner of the property attached cannot dispose of the
same free of all liens and encumbrances. 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.
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.

Spouses Salgado vs CA G.R. No. 55381

Facts:
On May 8, 1978, the Philippine Commercial and Industrial Bank,
hereinafter referred to as the Bank, filed an action against petitioners, docketed as Civil
Case No. 29392 of the then Court of First Instance of Rizal, to recover on a promissory
note in the amount of P1,510,905.96, inclusive of interest and other bank charges.
The Bank further prayed for the issuance of a writ of attachment.
As grounds therefor it alleged that:
1.
petitioners had fraudulently misappropriated and/or converted to their own
personal use and benefit the sugar proceeds given as security for the payment of the
indebtedness;

2.
that petitioners are guilty of fraud in contracting their obligation and have
concealed, removed or disposed of the properties mortgaged or assigned to the plaintiff,
or are concealing, removing or disposing or about to do so, with intent to defraud their
creditor; that the obligation sought to be enforced is genuine and, therefore, a sufficient
cause of action exists;
3.
the action.

That there is no sufficient security for the claim sought to be enforced by

Attached to the complaint was the affidavit of Mrs. Helen Osias, Senior Branch
Credit Division Manager of the Bank, wherein she stated, among others, "that there is
no sufficient security for the claim sought to be enforced by this action."
The trial court issued an order granting the Banks prayer for preliminary
attachment upon a bond in the sum of P1,510,905.96. Upon the filing of said bond, the
Deputy Provincial Sheriff levied upon several parcels of land of petitioners situated in
the province of Negros Occidental. Then petitioners Salgado moved to quash the writ of
attachment on the ground that respondent Bank made fraudulent misrepresentation in
securing the writ by deleting the words "R E M" or "Real Estate Mortgage" from the
xerox copy of the promissory note attached to the complaint, thereby "making it appear
that the note was unsecured when in truth and in fact it was fully secured by a series of
valid and existing real estate mortgages duly registered and annotated in the titles of the
affected real properties in favor of the plaintiff Bank."
After due hearing, the trial court issued an order dated January 31, 1979 granting
petitioners motion and lifting the writ of attachment previously issued.
The Bank went to the Court of Appeals on a petition for certiorari to annul the
order of the trial court lifting the writ of attachment.

On motion of the Bank, the respondent Court reconsidered its decision of

November 29, 1979 and issued the questioned resolution dated September 18, 1980,
which authorized the issuance of a writ of attachment.
Issue:
WON Attachment was issued correctly
Held:
No, issuance of the writ of attachment was not proper.
The chief purpose of the remedy of attachment is to secure a contingent lien on
defendants property until plaintiff can, by appropriate proceedings, obtain a judgment
and have such property applied to its satisfaction, or to make some provision for
unsecured debts in cases where the means of satisfaction thereof are liable to be
removed beyond the jurisdiction, or improperly disposed of or concealed, or otherwise
placed beyond the reach of creditors.
In the instant case, the allegation in the affidavit of the Banks Credit Division
Manager, Mrs. Helen Osias, to the effect that "there is no sufficient security for the claim
sought to be enforced by this action" has been shown to be false. It is undisputed that
the note sued upon "is fully secured by a series of valid and existing real estate
mortgages duly registered and annotated in the titles of the affected real property in
favor of the plaintiff Bank.
Since attachment is a harsh and rigorous remedy which exposes the debtor to
humiliation and annoyance, the rule authorizing its issuance must be strictly construed
in favor of the defendant. It should not be abused as to cause unnecessary prejudice. It
is the duty of the court before issuing the writ to ensure that all the requisites of the law
has been complied with.

U.S vs NAMIT
FACTS:
> This is a case of qualified homicide wherein while the case is pending, an
attachment was filed upon the property of the accused to secure the satisfaction of the
civil liability incident to the commission of the homicide. An attorney appeared in the
capacity of private prosecutor, representing the widow of the deceased and presented
an affidavit showing that the accused was selling his property in order to elude the
payment of any indemnity to which he would be liable in case of conviction. It was
accordingly requested that an attachment should be issued against his property.
> Court authorized the attachment
ISSUE:
Whether or not the attachment was proper?

RULING:
NO. The affidavit made in this case states substantially, we think, that the
accused was selling his property with the intent to defraud the persons interested in the
enforcement of the civil liability; but the affidavit was in several respects defective.
Disregarding these informalities, however, we are of the opinion that the remedy of
attachment there provided is not available as an aid to the enforcement of the civil
liability incident to prosecution for crime. These provisions contemplate the pendency of
a civil action, and the remedy of attachment is merely an auxiliary to such action.
Section 795 of the Code of Civil Procedure, in its first paragraph, declares that the
procedure in all civil actions shall be in accordance with the provisions of said Code;
and it is quite evident that the Legislature in adopting this Code could not have intended
to make its provisions in any respect applicable to the proceedings in a criminal
prosecution. The mere circumstance that a civil liability can be made the subject of
recovery in a criminal prosecution is in our opinion no sufficient reason for holding that
the remedy of attachment as designated for use in a civil action is available in the
criminal proceeding.
From what has been said it results that the attachment effected under the order
of the Court must be considered to have been improvidently granted. The same is
hereby declared to be of no effect, but this declaration will of course in no wise prejudice
the right of the widow and children of the deceased to enforce the payment of the
indemnity for which judgment was rendered against the accused.

LUIS F. GENERAL vs. JOSE R. DE VENECIA

Facts:
Complaint was filed by Ruedas against General to recover the value of a
promissory note worth P4,000.00. It prayed additionally for preliminary attachment of
petitioners property, upon the allegation that the General was about to dispose of his
assets to defraud creditors. Writ of attachment was issued upon the filing of a suitable
bond.
Petitioner General submitted a motion praying for dismissal of the complaint and
dissolution of the attachment. He claimed it was premature, in view of the provisions of
the debt moratorium orders of the President of the Philippines (Executive Orders Nos.
25 and 32 of 1945). Motion to dismiss and reconsideration was denied which prompted
the institution of this special civil action. Petitioner contend that his promise is to pay the
said amount within six months after peace has been declared and government is
established in the Philippines. Since no competent official has formally declared the
advent of peace, the six month period has not begun. Hence, he has no duty to make
payment to plaintiffs, independently of the moratorium directive.
Issue:
W/N attachment was valid.

Ruling:
No. 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.
It must be observed that under our rules governing the matter the person seeking
a preliminary attachment must show that "a sufficient cause of action exists" and that
the amount due him is as much as the sum for which the order of attachment is granted"
(sec. 3, Rule 59). Inasmuch as the commitment of Luis F. General has not as yet
become demandable, there existed no cause of action against him, and the complaint
should have been dismissed and the attachment lifted.

GRUENBERG, vs. COURT OF APPEALS G. R. No. L-45948

FACTS:

a petition to review the decision of CA (now IAC) which affirmed the order for the
issuance of a writ of preliminary attachment & other related orders of the trial.

Flores filed for annulment of sale, recovery of ownership and possession of the
house and lot situated in Diliman, QC, as the administratrix of the intestate estate of the
late William Gruenberg.

Alleged that:

the house & lot (sold to defendant Albert Gruenberg) form part of the conjugal
partnership of the Gruenberg spouses, which must answer for the obligations that
deceased William Gruenberg might have incurred during his lifetime as manager &
administrator of the conjugal partnership;
the sale was before the death of William Gruenberg, when two creditors had
already filed suits against him for collection of unpaid obligations, and the latter had
unpaid obligation to Flores in the amount of P13k, exclusive of interest and collection
charges, patently and clearly can no longer be paid or liquidated.

Ps filed their answer to the complaint.

Flores filed a 'Motion for Issuance of Writ of Preliminary Attachment' against the
properties of Ps, that the latter are indebted to her in the principal amount of P1k which
she seeks to recover.


Ps opposed the motion for the issuance of writ of preliminary attachment alleging
that this is an action for annulment of sale and recovery of the house and lot & not for
recovery of sum of money; that a writ of preliminary attachment is not the proper
remedy for the protection of the rights of the estate.

Trial court -> a writ of preliminary attachment against the properties of Ps &
served by sheriff (respondent)

Allegedly the order of respondent Judge was not received by Ps' new counsel but
upon being informed by Ps of the writ of preliminary attachment and notice of
garnishment, petitioners' new counsel promptly went to the trial court & then and there
he discovered that Ps' opposition to the motion was not attached to the record, because
the same was forwarded to Branch XVIII to which this case was originally assigned.

Ps filed an MR and motion to recall the writ of preliminary attachment and notice
of garnishment, on the ground that it is not true that Ps did not oppose the motion of
Flores, and that there is no valid basis to grant the motion

Respondent Judge denied the motions of Ps.

Respondent Judge required Ps to appear before his court to explain why they
should not be punished for contempt for denying/disobeying the lawful processes of the
court ("show cause" order).

This prompted the Ps to file a petition for certiorari w/ writ of preliminary

injunction in the CA.

The petition was dismissed.

Hence, the instant petition

ISSUE:
the proprietary of the writ of attachment and garnishment against the Ps' properties
issued by the trial court and affirmed by the appellate court.
HELD:
IT WAS NOT PROPERLY ISSUED.

Flores stated that her case "... is one of the situations covered by Section 1 (d),
Rule 57 of the Rules of Court whereby a writ of preliminary attachment may issue."

Section 1 (d), Rule 57 provides:

Grounds upon which attachment may issue.A plaintiff or any proper party may,
at the commencement of the action or at any time thereafter, have the property of the
adverse party attached as security for the satisfaction of any judgment that may be
recovered in the following cases:
xxx xxx xxx
(d) In an action against a party who has been guilty of a fraud in contracting the
debt or incurring the obligation upon which the action is brought, or in concealing or
disposing of the property for the taking, detention or conversion of which the action is
brought.
xxx xxx xxx

While the R filed the motion as administratrix of the Gruenberg estate, the
motion for a writ of attachment & its supporting affidavit show that the attachment was
intended to secure only her 13k claim against the estate.

Obviously, this cannot be done.

A writ of attachment is a remedy ancillary to the principal proceeding.

Attachment - a juridical institution which has for its purpose to secure the
outcome of the trial -> the satisfaction of the pecuniary obligation really contracted by a
person or believed to have been contracted by him, either by virtue of a civil obligation
emanating from contract or from law, or by virtue of some crime or misdemeanor that he
might have committed, and the writ issued, granted it, is executed by attaching and
safely keeping all the movable property of the defendant, or so much thereof as may be
sufficient to satisfy the plaintiff's demands ... . (Guzman v. Catolico, et al., 65 Phil. 257).
Purpose was to recover a piece of property allegedly belonging to the intestate
estate of the deceased.
-

Hence, must be related to the protection of the estate.

may not issue if only to protect the personal interests of the private respondent
as a creditor of that estate.


Flores' remedy to recover the outstanding debt of the deceased is to follow the
procedure in Rule 86 on claims against an estate. Section 8 of Rule 86 calls for the
appointment of a special administrator to defend the estate against such claim.

Allowing Flores in the annulment case to attach the Ps' properties for the benefit
of her 13k claim against the estate would give her an undue advantage over other
creditors against the estate,

Moreover, 13k claim of Flores cannot be settled in the case for annulment of the
deed of sale, wherein the writ of attachment is sought. What she seeks to be secured is
not the judgment in the main case but a mere claim against the estate which is still to be
considered and adjudicated by the court.

The rules on the issuance of a writ of attachment must be construed strictly in

favor of the defendant. The remedy of attachment is harsh, extraordinary, and summary
in nature. If all the requisites for the issuance of the writ are not present, the court which
issues it acts in excess of its jurisdiction.

Following the principle of strict compliance with all requisites, this Court ruled that
"when the facts, or some of them, stated in the plaintiff's affidavit are shown by the
defendant to be untrue, the writ may be considered as improperly or irregularly issued."
(National Coconut Corporation V. Pecson, et al., 90 Phil. 809).

The motion for issuance of a writ of preliminary attachment & the affidavit of
preliminary attachment are misleading.
Flores states that the "defendants are indebted to plaintiff in the amount of
P13,000.00" exclusive of interests and collection charges.
Then, she avers that the "defendants are guilty of fraud in contracting the debt or
incurring the obligation due plaintiff ".

The facts in the motion and the affidavit are deceptively framed.

The obligation which the respondent seeks to secure by an attachment was

between her and the late William Gruenberg, Sr.

What she seeks to establish as fraudulent was the sale between the late Mr.
Gruenberg and his son. These are two entirely distinct transactions.

One of the reasons for granting the motion for the issuance of a writ of
preliminary attachment was the court's finding that the Ps' failed to file an opposition
thereto.
Ps filed a timely opposition to the motion but in another branch where this case
had earlier been assigned. Despite this timely opposition, the MR of the order for the
issuance of a writ of preliminary attachment, was summarily denied for lack of merit.

Then order-> issuance of a writ of preliminary attachment => merely recited the
grounds alleged in Flores motion w/o any specific details as to the supposed fraud
committed by the Ps when they contracted the debt & the alleged
disposition/concealment by the Ps of their properties.

disregards the rule that attachment being a harsh remedy, it must be issued on
concrete and specific grounds and not on general averments merely quoting the words
of the pertinent rules. (Dy v. Enage, supra).

The absence of specific grounds highlights that Ps are not indebted to Flores.

It was the late William Gruenberg who incurred the alleged indebtedness & it is
his estate which owes Flores.
The validity of the claim of Flores will have to be threshed out in the special
proceedings, not in the case for annulment of the deed of sale.

Finally, the transaction sought to be annulled refers to a questioned sale of a

house and lot. It would have been sufficient to annotate a notice of lis pendens in the
title to that property.

Assuming the trial court could validly attach the house and lot involved in the
sale, we see no justification why the attachment should reach out to the Ps' interests in
the Hollywood Theatre, the Palace Theatre & the Illusion Theatre. There is no showing
of any attempt on their part to conceal or to dispose of the house and lot nor of any
change in the title or condition of the property.


So the Court found the writ of preliminary attachment to have been improvidently
issued.

The petition is hereby GRANTED. The decision of the former Court of Appeals is
SET ASIDE. The writ of preliminary attachment and the notice of garnishment are
DISSOLVED. The other related orders issued in connection with the writ of attachment
are SET ASIDE.

DY v. ENAGE
Facts:
Petitioners filed before the court a quo against respondents predecessor-in-interest an
action for collection of sum of money, annulment of supposed contract of agency, and
damages. Pleadings were filed and trial was conducted but before the defendant therein
had completed the formal presentation of his evidence in support of his counterclaim, he
died. After the proper substitution of parties, Respondents, through counsel, filed a
"Jurisdictional Motion for Dismissal of Plaintiffs Complaint" asking that notwithstanding
the dismissal of the complaint prayed for, the court proceed with the trial and final
disposition of the counterclaims. The motion was based on the ground that inasmuch as
plaintiffs case was a claim for money, under Section 21 of Rule 3 of the Rules of Court,
it should be dismissed as an action and filed as claim in the special proceedings for the
settlement of the estate of the deceased defendant.

Petitioners opposed the motion contending that the second cause of action was for
damages and that their defense to the counterclaims of the defendant was in their
complaint. Respondent judge denied the motion to dismiss and proceed with the trial.

Thereafter, petitioners withdrew their opposition to the Jurisdictional Motion and

manifested that they no longer will present rebuttal evidence, reserving the same to be
adduced instead in the proper probate court. Respondents filed their CounterManifestation and Opposition to petitioners motion and reiterated their prayer to have
the complaint against them dismissed to declare the case, as far as their counterclaim is
concerned, submitted for decision. Both motions were denied.

On November 14, 1971, the defendant Tolentino died. This was before he had
completed the formal presentation of his evidence in support of his counterclaims.
Whereupon, Atty. Vicente Jayme for the respondents, after their proper substitution as

heirs of defendant Tolentino, filed a so-called "Jurisdictional Motion for Dismissal of

Plaintiffs Complaint" on December 13, 1971, asking however that notwithstanding the
dismissal of the complaint prayed for, the court proceed with the trial and final
disposition of the counterclaims. The motion was based on the ground that inasmuch as
the plaintiffs case was a claim for money, under Section 21 of Rule 3, it should be
dismissed as an action and filed as a claim in the special proceedings for the settlement
of the estate of the deceased defendant. Petitioners opposed said motion contending
that the second cause of action was for damages and that their defense to the
counterclaims of the defendant was in their complaint and citing the case of Javier v.
Araneta, L-4369, August 31, 1953, in support of their opposition. On January 5, 1972,
respondent judge denied the motion to dismiss.

Issue:
-------- respondent judge violate the Rule of court in refusing to dismiss petitioners
complaint contend constitutes a money claim?

Ruling:
The Supreme Court ruled that respondent court deviated from the course laid down by
the provisions of the Rules when it refused to dismissed petitioners complaint insofar as
their first cause of action was concerned. It enjoined the same to dismiss the subject
case before it without prejudice to its being filed as money claim in special proceedings
for the settlement of the estate of respondents deceased predecessor and ordered it to
proceed with the trial of respondents their evidence in defense thereto, after which
another decision should be rendered as the facts and the law may warrant.
The principal ground of the petition is the alleged violation by respondent court of
Section 21 of Rule 3 of the Rules of Court in refusing to dismiss petitioners complaint,
which they contend constitutes a money claim, notwithstanding the death of the
defendant, private respondents predecessor in interest, before final judgment could be
rendered. While respondents do not seem to seriously deny the basis of petitioners
gripe, they maintain that inasmuch as petitioners had apparently abided with the earlier
adverse ruling of the court by taking part in the trial which, in fact, is almost through
except for the presentation of the "rebuttal" evidence of petitioners, the latter are in
estoppel to question the action of the court. Moreover, it is respondents position that
since they have alleged counterclaims in their answer and have actually completed
proving the same, it would be against the rules to dismiss the subject complaint.
It results, therefore, that as of the time the orders of attachment complained of were
issued, respondent court acted with grave abuse of discretion, and the writs issued
thereunder and all subsequent proceedings related thereto must consequently be as
they are hereby set aside.

ROMAN MABANAG vs. JOSEPH M. GALLEMORE

Facts:
This case, here on appeal from an order dismissal by the Court of First Instance of
Occidental Misamis, raises the question of the court's jurisdiction. More specifically, the
question is whether the action is in personam or one in rem. The trial court opined that it
is the first and that it "has no authority nor jurisdiction to render judgment against the
herein defendant, Joseph M. Gallemore for being a non-resident.
The purpose of the action is to recover P735.18, an amount said to have been paid by
Mabanag to Gallemore for two parcels of land whose sale was afterward annulled.
Gallemore is said to be residing in Los Angeles, California, U. S. A. He has no property
in the Philippine except an alleged debt owing him by a resident of the municipality of
Occidental Misamis. This debt, upon petition of the Mabanag, after the filing of the
complaint and before the suit was dismissed, was attached to the extent of plaintiff's
claim for the payment of which the action was brought. But the attachment was
dissolved in the same order dismissing the case.
It was Atty. Valeriano S. Kaamino who has amicus curi filed the motion to dismiss and
to set aside the attachment. There is no appearance before this Court to oppose the
appeal.
Issue:
Whether or Not the court has jurisdiction to try and hear the case?
Ruling:
Yes, as a general rule, when the defendant is not residing and is not found in the
Philippines, the Philippine courts cannot try any case against him because of the
impossibility of acquiring jurisdiction over his person, unless he voluntarily appears in
court. But, when the action affects the personal status of the plaintiff residing in the
Philippines, or is intended to seize or dispose of any property, real or personal, of the
defendant, located in the Philippines, it may be validly tried by the Philippine courts, for
then, they have jurisdiction over the res, i.e., the personal status of the plaintiff or the
property of the defendant, and their jurisdiction over the person of the non-resident
defendant is not essential. Venue in such cases may be laid in the province where the
plaintiff whose personal status is in question resides, or where the property of the
defendant or a part thereof involved in the litigation is located.
Tested by the foregoing decisions and authorities, the Court has acquired jurisdiction of
the case at bar by virtue of the attachment of the defendant's credit. Though no
jurisdiction is obtained over the debtor's person, the case may proceed to judgment if
there is property in the custody of the court that can be applied to its satisfaction.
It is our judgment that the court below erred in dismissing the case and dissolving the
attachment; and it is ordered that, upon petition of the plaintiff, it issue a new writ of

attachment and then proceed to trial. The costs of this appeal will be charged to
defendant and appellee.

CUARTERO, vs. COURT OF APPEALS G.R. No. 102448

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.
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.
Thereafter, on the following day, a copy of the writ of preliminary attachment, the
order granting the writ, and the summons and the complaint were all simultaneously
served upon the private respondents at their residence. The 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.
Subsequently, the spouses Evangelista filed motion to set aside the order
granting the writ and to discharge the writ of preliminary attachment for having been
irregularly and improperly issued.
The lower court denied the motion for lack of merit.
The respondents, Sps Evangelista filed a special action for certiorari with the
Court of Appeals questioning the order of writ of preliminary attachment with restraining
order or writ of preliminary injunction.
CAs finding is grounded that the trial court did not acquire any jurisdiction over
the person of the defendants, that the trial court have no jurisdiction to proceed in the
main case as the ancillary remedy of attachment.
CA relied in the case of Sievert vs. CA that valid service of summons and a copy
of the complaint vest jurisdiction in the court over the defendant.

ISSUE:
WON the granting of writ of preliminary attachment, and the issuance of the writ proper.

RULING:
In the later case of Davao Light and Power Co., Inc. v. Court of Appeals, G.R. No.
93262, November 29, 1991, we had occasion to deal with certain misconceptions which
may have arisen from our Sievert ruling. The question which was resolved in the Davao
Light case is whether or not a writ of preliminary attachment may issue ex-parte against
a defendant before the court acquires jurisdiction over the latter's person by service of
summons or his voluntary submission to the court's authority. The Court answered in
the affirmative. This should have clarified the matter but apparently another ruling is
necessary.
A writ of preliminary attachment is defined as a provisional remedy issued upon order of
the court where an action is pending to be levied upon the property or properties of the
defendant therein, the same to be held thereafter by the sheriff as security for the
satisfaction of whatever judgment might be secured in said action by the attaching
creditor against the defendant (Adlawan v. Tomol, 184 SCRA 31 [1990] citing Virata v.
Aquino, 53 SCRA 30-31 [1973]).
Under section 3, Rule 57 of the Rules of Court, the only requisites for the issuance of
the writ are the affidavit and bond of the applicant. As has been expressly ruled in BF
Homes, Inc. v. Court of Appeals, 190 SCRA 262 (1990), citing Mindanao Savings and
Loan Association, Inc. v. Court of Appeals, 172 SCRA 480 (1989), no notice to the
adverse party or hearing of the application is required inasmuch as the time which the
hearing will take could be enough to enable the defendant to abscond or dispose of his
property before a writ of attachment issues. In such a case, a hearing would render
nugatory the purpose of this provisional remedy. The ruling remains good law. There is,
thus, no merit in the private respondents' claim of violation of their constitutionally
guaranteed right to due process.
The writ of preliminary attachment can be applied for and granted at the
commencement of the action or at any time thereafter (Section 1, Rule 57, Rules of
Court). In Davao Light and Power, Co., Inc. v. Court of Appeals, supra, the phrase "at
the commencement of the action" is interpreted as referring to the date of the filing of
the complaint which is a time before summons is served on the defendant or even
before summons issues. The Court added that
. . . after an action is properly commenced by filing of the complaint and the payment
of all requisite docket and other fees the plaintiff may apply and obtain a writ of
preliminary attachment upon the fulfillment of the pertinent requisites laid down by law,
and that he may do so at any time, either before or after service of summons on the
defendant. And this, indeed, has been the immemorial practice sanctioned by the
courts: for the plaintiff or other proper party to incorporate the application for attachment
in the complaint or other appropriate pleading (counter-claim, cross-claim, third-partyclaim) and for the Trial Court to issue the writ ex-parte at the commencement of the
action if it finds the application otherwise sufficient in form and substance.

The Court also pointed out that:

. . . It is incorrect to theorize that after an action or proceeding has been commenced
and jurisdiction over the person of the plaintiff has been vested in the Court, but before
acquisition of jurisdiction over the person of the defendant (either by service of
summons or his voluntary submission to the Court's authority), nothing can be validly
done by the plaintiff or the Court. It is wrong to assume that the validity of acts done
during the period should be dependent on, or held in suspension until, the actual
obtention of jurisdiction over the defendants person. The obtention by the court of
jurisdiction over the person of the defendant is one thing; quite another is the acquisition
of jurisdiction over the person of the plaintiff or over the subject matter or nature of the
action, or the res or object thereof.
It is clear from our pronouncements that 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.
It must be emphasized that the grant of the provisional remedy of attachment practically
involves three stages: first, the court issues the order granting the application; second,
the writ of attachment issues pursuant to the order granting the writ; and third, the writ is
implemented. For the initial two stages, it is not necessary that jurisdiction over the
person of the defendant should first be obtained. However, once the implementation
commences, it is required that the court must have acquired jurisdiction over the
defendant for without such jurisdiction, the court has no power and authority to act in
any manner against the defendant. Any order issuing from the Court will not bind the
defendant.
In Sievert v. Court of Appeals, supra, cited by the Court of Appeals in its questioned
decision, the writ of attachment issued ex-parte was struck down because when the writ
of attachment was being implemented, no jurisdiction over the person of the defendant
had as yet been obtained. The court had failed to serve the summons to the defendant.
The circumstances in Sievert are different from those in the case at bar. When the writ
of attachment was served on the spouses Evangelista, the summons and copy of the
complaint were also simultaneously served.
The question as to whether a proper ground existed for the issuance of the writ is a
question of fact the determination of which can only be had in appropriate proceedings
conducted for the purpose (Peroxide Philippines Corporation V. Court of Appeals, 199
SCRA 882 [1991]). It must be noted that the spouses Evangelista's motion to discharge
the writ of preliminary attachment was denied by the lower court for lack of merit. There

is no showing that there was an abuse of discretion on the part of the lower court in
denying the motion.
WHEREFORE, premises considered, the Court hereby GRANTS the petition. The
challenged decision of the Court of Appeals is REVERSED, and the order and writ of
attachment issued by Hon. Cezar C. Peralejo, Presiding Judge of Branch 98, Regional
Trial Court of Quezon City against spouses Evangelista are hereby REINSTATED. No
pronouncement as to costs.
SO ORDERED.

SALAS, vs. ADIL G.R. No. L-46009

Facts:
On September 10, 1976, respondents Rosita Bedro and Benita Yu filed the aforementioned 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. The action for annulment was predicated upon the averment
that Lot No. 5, being a subdivision road, is intend for public use and cannot be sold or
disposed of by the Hodges Estate. The claim for damages was based on the assertion
that after defendant spouses purchased Lots Nos. 2 and 3, they also purchased Lot No.
5 and thereafter "erected wooden posts, laid and plastered at the door of the house on
Lot No. 3, with braces of hardwood, lumber and plywood nailed to the post", thereby
preventing Rosita Bedro and Benita Yu from using the road on the afore-mentioned lot,
Lot No. 5, and that as a result of such obstruction, private respondents Rosita Bedro
and Benita Yu sustained actual damages due to the stoppage in the construction of
their commercial buildings on Lot No. 3.
In their answer to the complaint, the Salas spouses, after specifically denying the
material allegations in the complaint, stated that Lot No. 5 had been registered in the
name of the C. N. Hodges as their exclusive private property and was never subjected
to any servitude or easement of right of way in favor of any person; that any occupants
of Lots Nos. 2 and 3 have direct access to Bonifacio Drive, a National Highway, hence,
Lot No. 5 is neither needed nor required for the egress or ingress of the occupants
thereof.
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.

Respondent Judge issued ex-parte a Writ of Attachment "against the properties of the
defendants
Issue:
WON respondent Judge gravely abused his discretion in issuing the said Writ of
Attachment
Held:
In certiorari proceedings, the cardinal rule is that the court must be given the opportunity
to correct itself, Thus, for the special civil action of certiorari to prosper, there must be
no appeal nor any plain, speedy and adequate remedy in the ordinary course of law.
Petitioners, therefore, must exhaust all available remedies in the lower court before
filing a petition for certiorari, otherwise the petition shall be held to be premature.
In the instant case, it appears that petitioners have adequate remedy under the law.
They could have filed an application with the court a quo for the discharge of the
attachment for improper or irregular issuance under section 13, Rule 57, of the Revised
Rules of Court.
Considering that petitioners have not availed of this remedy, the instant petition is
premature.
We deem it necessary, however, for the guidance of respondent Court and of the
parties, to stress herein the nature of attachment as an extraordinary provisional
remedy.
A preliminary attachment is a rigorous remedy, which exposes the debtor to humiliation
and annoyance, such it should not be abused as to cause unnecessary prejudice. It is,
therefore, the duty of the court, before issuing the writ, to ensure that all the requisites of
the law have been complied with; otherwise the judge acts in excess of his jurisdiction
and the so issued shall be null and void . 1

And in Garcia v. Reyes, 3 considering the allegation that the debtors were removing or
disposing of some of their properties with intent to defraud their creditors, 'this Court
said that "(a)ll in all due process would seem to require that both parties further ventilate
their respective contentions in a hearing that could indeed reveal the truth. Fairness
would be served thereby, the demand of reason satisfied."
Considering the gravity of the allegation that herein petitioners have removed or
disposed of their properties or are about to do so with intent to defraud their creditors,
and further considering that the affidavit in support of the pre attachment merely states
such ground in general terms, without specific allegations of lances to show the reason
why plaintiffs believe that defendants are disposing of their properties in fraud of
creditors, it was incumbent upon respondent Judge to give notice to petitioners and to

allow wherein evidence is them to present their position at a to be received. Moreover, it

appears from the records that private respondents are claiming unliquidated damages,
including moral damages, from petitioners. The authorities agree that the writ of
attachment is not available 'm a suit for damages where the amount claimed is
contingent or unliquidated.
Jardine Manila Finance vs CA G.R. No. 55272
Facts:
Petitioner Jardine-Manila Finance, Inc. (JARDINE) filed a complaint in the then Court of
First Instance (CFI) of Rizal, against private respondents Impact Corporation (IMPACT),
Ricardo de Leon and Eduardo de Leon, to collect various sums of money allegedly due
from therein defendant IMPACT under a credit accomodation by way of a discounting
line agreement.
IMPACT assigned its receivables to JARDINE on the condition that IMPACT was to
collect them on their due dates from their issuers and remit the collected amounts to
JARDINE and/or repurchase the assigned receivables; but despite the fact that IMPACT
had collected the amounts due on said receivables, it failed or refused to turn over the
amounts so collected to JARDINE.
Likewise contained in said complaint is petitioner's application for a writ of preliminary
attachment against private respondents. On the basis of the foregoing allegations, the
lower court granted JARDINE's petition for the issuance of a writ of preliminary
attachment on October 16, 1979.
Defendants filed a motion to set aside the writ of preliminary attachment, contending
that the grounds alleged by the plaintiff in its application for a writ of attachment are not
among the grounds specified under Section 1 of Rule 57; that the defendants have
other sufficient security; that there was no affidavit of merit to support the application for
attachment as required by Section 3 of Rule 57 and that the verification of the complaint
was defective as it did not state that the amount due to the plaintiff above all legal setups or counterclaims is as much as the sum for which the order is sought.
JARDINE opposed the motion arguing that the mental reservation of defendants at the
time of the execution of the deeds of assignment constituted fraud;
On November 7, 1979, the trial court denied defendant's motion to annul the writ of
preliminary attachment. Thereupon, defendant Impact Corporation went to the appellate
court on a petition for certiorari seeking to annul said writ.
On August 29, 1980, the Court of Appeals annulled the assailed writ of attachment for
having been issued improperly and irregularly

Issue:
WON non-compliance with the formal requirements invalidate the writ of
attachment.
Held:
The general rule is that the affidavit is the foundation of the writ, and if none be filed or
one be filed which wholly fails to set out some facts required by law to be stated therein,
there is no jurisdiction and the proceedings are null and void. Thus, while not unmindful
of the fact that the property seized under the writ and brought into court is what the
court finally exercises jurisdiction over, the court cannot subscribe to the proposition that
the steps pointed out by statutes to obtain such writ are inconsequential, and in no
sense jurisdictional.
Since the attachment is a harsh and rigorous remedy which exposes the debtor to
humiliation and annoyance, the rule authorizing its issuance must be strictly construed
in favor of defendant. It is the duty of the court before issuing the writ to ensure that all
the requisites of the law have been complied with. Otherwise, a judge acquires no
jurisdiction to issue the writ.
Considering that petitioner's application for the subject writ of preliminary attachment did
not fully comply with the requisites prescribed by law, said writ is, as it is hereby
declared null and void and of no effect whatsoever.

LA GRANJA, INC. vs SAMSON

FACTS:
> Petitioner La Granja, Inc., filed a complaint in the Court of First Instance against Chua
Bian, Chua Yu Lee and Chua Ki, for the recovery of the sum of money with interest
thereon at the rate of 12 per cent per annum.
> The plaintiff also prayed for the issuance of an order of attachment against the
aforementioned defendants' property.
> La Granja, Inc., wherein it was alleged 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 but petitioner refused to comply the respondent judge dismissed said
petition for an order of attachment.
ISSUE:
Whether or not the mere filing of an affidavit executed in due form is sufficient to
compel a judge to issue an order of attachment?

RULING:
NO. SEC. 426. Granting order of attachment. A judge or justice of the peace
shall grant an order of attachment when it is made to appear to the judge or justice of
the peace by the affidavit of the plaintiff, or of some other person who knows the facts,
that a sufficient cause of action exists, and that the case is one of those mentioned in
section four hundred and twenty-four, and 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
granted.
It will be seen that the legal provision just cited orders the granting of a writ of
attachment when it has been made to appear by affidavit that the facts mentioned by
law as sufficient to warrant the issuance thereof, exist. Although the law requires
nothing more than the affidavit as a means of establishing the existence of such facts,
nevertheless, such affidavit must be sufficient to convince the court of their existence,
the court being justified in rejecting the affidavit if it does not serve this purpose and in
denying the petition for an order of attachment. The affidavit filed by the petitioner, La
Granja, Inc., must not have satisfied the respondent judge inasmuch as he desired to
ascertain or convince himself of the truth of the facts alleged therein by requiring
evidence to substantiate them. The sufficiency or insufficiency of an affidavit depends
upon the amount of credit given it by the judge, and its acceptance or rejection, upon his
sound discretion.
Hence, the respondent judge, in requiring the presentation of evidence to establish the
truth of the allegation of the affidavit that the defendants had disposed or were
disposing of their property to defraud their creditors, has done nothing more than
exercise his sound discretion in determining the sufficiency of the affidavit.
In view of the foregoing considerations, we are of the opinion and so hold that the mere
filing of an affidavit executed in due form is not sufficient to compel a judge to issue an
order of attachment, but it is necessary that by such affidavit it be made to appear to the
court that there exists sufficient cause for the issuance thereof, the determination of
such sufficiency being discretionary on the part of the court.

EL BANCO ESPAOL-FILIPINO vs. VICENTE PALANCA

Facts:
Engracio Palanca entered a contract of loan with El Banco Espanol-Filipino. Contract of
mortgage was also executed covering various parcels of land located in the city of
Manila which serves as a security for the loan. After execution of the instrument by the
mortgagor, he returned to China which appears to have been his native country, and he
there died without again returning to the Philippines. For failure to pay the amount
loaned, petitioner El Banco instituted an action to foreclose the mortgage property.

As the defendant was a nonresident at the time of the institution of the present action an
order for publication was accordingly obtained from the court, and publication was made
in due form in a newspaper of the city of Manila. At the same time that the order of the
court should deposit in the post office in a stamped envelope a copy of the summons
and complaint directed to the defendant at his last place of residence, the city of Amoy,
in the Empire of China.
As defendant not having appeared, judgment was taken against him by default. A
decision was rendered in favor of the plaintiff. The court ordered that the defendant
should deliver said amount to the clerk of the court to be applied to the satisfaction of
the judgment, and it was declared that in case of the failure of the defendant to satisfy
the judgment within such period, the mortgage property located in the city of Manila
should be exposed to public sale. The payment was never made; and the court ordered
the sale of the property. The property was bought in by the bank in a much lesser price.
About seven years after the confirmation of this sale, a motion was made in this cause
by Vicente Palanca, as administrator of the estate of the original defendant, Engracio
Palanca Tanquinyeng y Limquingco, wherein the applicant requested the court to set
aside the order of default and the judgment rendered, and to vacate all the proceedings
subsequent thereto. The basis of this application, as set forth in the motion itself, was
that the order of default and the judgment rendered thereon were void because the
court had never acquired jurisdiction over the defendant or over the subject of the
action.
The application to vacate the judgment was denied, and from this action of the court
Vicente Planca, as administrator of the estate of the original defendant, has appealed.
Issue:
W/N the court acquired the jurisdiction to proceed with the foreclosure of the mortgage.
Ruling:
YES. Palanca is a non-resident and having refused to appear in court voluntarily, the
court never acquired jurisdiction over him. This is, however, not essential since the
foreclosed of mortgage is an action quasi in rem and what is essential is the courts
jurisdiction over the res.
Jurisdiction over the property is based on the following:
1. That the property is located within the district;
2. That the purpose of the litigation is to subject the property by sale to an obligation
fixed upon it by the mortgage; and
3. That the court at the proper stage of the proceedings takes the property into custody
if necessary, and it exposed it to sale for the purpose of satisfying the mortgage debt.

And since jurisdiction is exclusively over the property, the relief granted by the court
must be limited only to that which can be enforced against the property itself. Therefore,
whatever maybe the effect in other respects of the failure of the clerk of court to mail the
proper papers to the defendant in Amoy, China, such irregularity could impair or defeat
the jurisdiction of the court.

QUASHA vs. JUAN G.R. No. L-49140

FACTS:

A petition for certiorari and prohibition with preliminary injunction

P seeks the annulment of the order of trial court Judge of Manila which approved
the sale of the cargo & prays instead that the writ of preliminary attachment over the
same property issued by trial court judge of Rizal be allowed to remain in force.

Filcar filed a complaint for sum of money, enforcement of lien & damages w/ CFI
Manila (was assigned to Branch X presided by respondent Judge) against AB Charles
Thorburn & Co., thru its receiver Sjoegren and Winstrand; Estero Shipping and Trading;
Bank of Melli of Iran, Jeddah Branch; Perstorp AB; Skogshgarnas Industries; Ekman
and Company AB; and Abdullah Baroom.

Filcar alleged that it is the owner of a vessel (MV San Vicente) duly regd w/ RP;

defendant Carles Thorburn & Co. chartered said vessel by time charter for 2 or 3
months for a voyage from Sweden to Jeddah, Saudi Arabia at US $3,200.00 a day,

Abdullah Baroom was impleaded as defendant for being the agent of Charles
Thorburn & Co. at Jeddah AND Sjoegren & Winstrand of Sweden for being the receiver
of Charles Thorburn & Co.;

The vessel left Sweden w/ construction materials as cargoes belonging to the ff

shippers & consignees: banks-defendants;

after the 2nd month, Thorburn failed to pay the daily hire


the charter party has expired but the vessel has not yet discharged the cargoes
due to inadequate port facilities & failure of the shippers, consignees & charterer to pay
the charter hire;

Filcar demanded from Thorburn the payment of the charter hire but failed to pay
& instead declared bankruptcy -> now under receivership in Sweden;

On demand, Baroom (agent of Thorburn in Jeddah) and the consignees &

shippers -> refused to pay;

So Filcar was forced to exercise its lien on the cargoes consistent w/ Clause 18
of the Charter Party, notice of which was sent to defendants.

Plaintiff prayed that the defendants pay the daily charter hire from the time they
were in arrears until payment is made and that the Court allows the sale of the cargoes
to satisfy its claims.

Sierra Madre (alleged owner, end-user and operator of MV San Vicente) filed a
motion to intervene in the CFI Manila for enforcing its lien over the cargo, claiming that it
had chartered the vessel to Filcar for 6 months renewable every 6 months at agreed
charter hire fee (US $825,000.00 per year) -> allowed as plaintiff-intervenor.

Filcar filed an extra-parte motion to sell the goods subject of lien

alleging that they were in danger of deteriorating & losing their market value & if
the goods were not sold immediately, the plaintiff would have to pay a staggering
amount for warehousing so that the value of the goods would not even be enough to
pay for warehousing expenses.

Respondent Judge -> conducted hearings & ocular inspection of the vessel &
was convinced that the vessel & the cargoes were in a very bad condition,


He approved the sale of the cargo to Bengzon's Industries & the Deed of
Absolute Sale of the cargo was approved.

Quasha (Petitioner law firm) contested the Court's jurisdiction over Baroom's
person & property & a Motion to Dismiss on the ground that the Court had not acquired
jurisdiction over Baroom's person/property aboard the MV San Vicente.

Respondent Judge -> directed Quasha law firm to show on/before September 20,
1977 a written authorization signed by its client, Baroom, "since the latter is a foreigner".
3

Quasha (as Baroom's counsel) filed an answer w/ compulsory counterclaim,

claiming that defendant Baroom is not an agent of Thorburn since the cargoes belong to
him & denying the validity of plaintiff's lien over the cargo.

Baroom (through Quasha) prayed that plaintiff be directed to deliver the cargoes
to Jeddah, pay damages corresponding to the full value of the goods & to the lost
income and profits he could have realized had plaintiff delivered the cargo to him AND
filed a cross-claim against Sierra Madre, plaintiff-intervenor.
(TWIST IN THE CASE)

Quasha filed with respondent Judge to withdraw from this case & charging lien
be recorded against the properties of Mr. Baroom (now aboard MV San Vicente the
cargoes) for unpaid professional fees and reimbursement expenses. "

Then Quasha filed a complaint w/ a prayer for a writ of preliminary attachment for
the recovery of professional fees and reimbursement of expenses against Baroom
before another court (CFI Riza)l

Judge Pineda ->ordered Quasha to obtain a writ of preliminary attachment

against Baroom's alleged cargoes

In the previous Civil Case, respondent Judge gave Attys. Quasha and Valmonte
w/in 10 days from receipt of order ->to explain why they should not be held in contempt

of court for filing a new case obtaining a writ of preliminary attachment over the cargoes,
which they knew to be subject matter of a pending Civil Case before his sala."

Quasha alleged that their cause of action against Baroom was for payment of
professional fees & reimbursement of expenses while the pending civil Case was for
alleged unpaid charter hire fees.

Respondent Judge approved the sale of the cargo -> Apollo Kokin Trading Co.,
Ltd., directed the deposit of the sale proceeds with a banking institution to be approved
by the Court & its disposition only on orders of the Court.

Filcar filed-> CFI Rizal ->an urgent omnibus motion to be allowed to appear, to
dismiss the case & to lift the writ of preliminary attachment & set aside the order to
auction the cargo, the proceeds of which after deducting all expenses shall be
deposited with the court.

Thus, Quasha filed before this Court the instant petition -> assailing the order
approving the sale (grave abuse of discretion) considering that subject cargo was
allegedly earlier attached by CFI Rizal.

This Court issued a TRO enjoining respondents to immediately cease and desist
from taking, unloading, transferring, conveying, transporting or disposing of the cargoes
or any part thereof aboard the MC San Vicente and Dong Myung, * or from taking the
cargoes away

But MV Don Myung (w/ the cargo aboard) left surreptitiously at midnight of
October 24, 1978 w/o the assistance of any pilot in violation of Harbor rules. The goods
were then allegedly sold for US $220,200.43 under irrevocable letters of credit issued
by the Fuji Bank of Osaka, Japan.

Quasha prayed that several persons be cited for contempt (defendants:

president, operations manager, etc.)


A compromise agreement was executed -> Filcar assigned its interests & rights
in the proceeds of the sale of the subject cargoes to Sierra Madre w/c the latter
accepted & approved by the respondent court in its decision.

An amended petition was thus filed in this Court impleading Sierra Madre as
partly respondent in his case with prayer that a writ of garnishment be issued on the
proceeds of the sale of the cargoes which are in the possession of Sierra Madre, and an
order be issued directing Sierra Madre & all those to whom such proceeds may
subsequently be reassigned to deliver to Quasha such portion of the proceeds of the
sale as would satisfy the atty's lien in the interest of justice.

Said court dismissed P's case & lifted the preliminary attachment issued therein.

Upon MR, the said preliminary attachment was reinstated by CFI Rizal

After several pleading were filed, COURT gave due course to the petition.

ISSUE:
1) W/N garnishment on the proceeds of the sale of the cargoes be granted.

HELD:
NO, it cannot be granted.

To allow the same, there must first be a determination of the ownership of the
cargoes.

But the court was not in the position to do so.

Petitioner should have filed its claim for professional fees in respondent's court
for said court has the exclusive jurisdiction to determine the real owner of the cargoes.


The action should not be for a charging lien, but a simple complaint in
intervention for recovery of professional services and reimbursement of expenses, thus
avoiding multiplicity of suits.

Then P failed to file MR to the order approving the sale of the cargoes & it
abandoned its own case b4 the respondent judge.

Its negligence (allowing considerable period to lapse b4 claiming right over the
cargoes) & resorting to injunctive relief & the instant petition must be dismissed.

B4 the TRO could be served by this Court in the other case everything was
already fait accompli.

that.

Fait accompli making the situation irreversible & other people have to live with

Adlawan vs. Judge Torres, Aboitiz

Facts:
Petitioner Adlawan was indebted to Respondent 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 of 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 of LapuLapu 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:
Was the writ of attachment legal or valid?

Held:
Negative. The affidavit submitted by Aboitiz in support of its prayer for the writ of
attachment does NOT meet the requirements of Rule 57 of the Rules of Court regarding
allegations on impending fraudulent removal, concealment and disposition of
defendants property. To justify a preliminary attachment, the removal or disposal must
have been made withintent to defraud defendants creditors.The factual basis must be
alleged in the affidavit in support of the prayer for the writ of attachment if not so
specifically alleged in the verified complaint. (See full text for the copy of the
affidavit)The Supreme Court has found that there is no factual allegation which may
constitute as a valid basis for the contention that the mortgage was in fraud of Aboitiz.
The affidavit is the foundation of the writ and if none be filed or one be filed which wholly
fails to set out some facts required by law to be stated therein, there is no jurisdiction
and the proceedings are null and void. Bare allegation that an encumbrance of a
property is in fraud of the creditor does NOT suffice. Factual bases for such conclusion
must be clearly averred.By mortgaging a piece of property, a debtor merely subjects it
to a lien but ownership thereof is not parted with.The Inability to pay ones creditors is
no necessarily synonymous with fraudulent intent not to honor an obligation.

CONSOLIDATED BANK vs.INTERMEDIATE APPELLATE COURT

Facts:
Petitioner Consolidated Bank and Trust Corporation (SOLIDBANK) loaned private
respondent NICOS Industrial Corporation (NICOS) sums of money. Subsequently,
NICOS failed to pay back the loan prompting SOLIDBANK to file a collection case
before the Court of First Instance of Manila, Branch XXIX.
the court in the aforecited case issued an order of attachment " ... upon the rights,
interests and participation of which defendants NICOS Industrial Corporation ... may
have in Transfer Certificate of Title No. T-210581 (T-32.505 M) and Transfer Certificate
of Title No. T-10580 (T-32.504 M) (Annexes "B", "B-1", "B-2" and "B-3" of petition).
The Sheriff of Manila levied and attached the two real properties described by the
foregoing order of attachment, including the buildings and other improvements thereon.
Afterwards, the Sheriff sent separate Notices of Levy Upon Realty to the Registrar of
Deeds of Malolos, Bulacan, A year later, however, on July 11, 1983, the attached
properties which had been mortgaged by NICOS to the United Coconut Planters Bank
(UCPB) on March 11, 1982, were extrajudicially foreclosed by the latter. As the highest
bidder therein, a certificate of sale was issued to it by the Sheriff of Bulacan over the
subject realties including the buildings and improvements thereon.
Surprisingly, two transactions occurred soon thereafter, both on August 29, 1983. First,
UCPB sold all of its rights, interests, and participation over the properties in question to
a certain Manuel Go; Second, Manuel Go sold all the rights he acquired from UCPB

over the same lots on that very same day to private respondent Golden Star Industrial
Corporation (GOLDEN STAR).
Respondent NICOS, though fully aware that it still had the right to redeem the auctioned
properties within the one year period of redemption from July 11, 1983, suddenly
executed a document entitled "Waiver of Right of Redemption" in favor of respondent
GOLDEN STAR.
GOLDEN STAR filed a petition for the issuance of a writ of possession over the subject
realties before the Regional Trial Court, Branch VI of Malolos, Bulacan.
The Malolos Court granted GOLDEN STAR's petition for a writ of possession and
issued the writ. In accordance with these orders, armed men of GOLDEN STAR forcibly
took over the possession of the properties in dispute from the guards deputized by the
Sheriff of Manila to secure the premises.
Petitioner SOLIDBANK, on the strength of its prior attachment over the lands in
question filed with the Malolos court an omnibus motion to annul the writ of possession
issued to GOLDEN STAR and to punish for contempt of court the persons who
implemented the writ of possession with the use of force and intimidation.

The respondents NICOS and GOLDEN STAR, filed oppositions to the foregoing
omnibus motion, the former on the basis of the waiver of its right of redemption to
GOLDEN STAR, and the latter on its alleged ignorance that the lands in question were
under custodia legis, having been attached by the Sheriff of Manila.
The Malolos Court issued an order denying the omnibus motion.
The Intermediate Appellate Court rendered its assailed decision "finding no merit in this
appeal and affirming in toto the appealed ruling that "the properties in issue ... were not
in custodia legis at the time of the extrajudicial foreclosure."
Issue:
Whether or Not the subject properties were under custodia legis by virtue of the prior
annotation of a writ of attachment in petitioner's favor at the time the properties were
extrajudicially foreclosed?
Ruling:
Yes, Based on the foregoing evidence on record, the conclusion is clear that the
disputed real properties were under custodia legis by virtue of a valid attachment at the
time the same were extrajudicially foreclosed by a third party mortgagee.
The rule is well settled that when a writ of attachment has been levied on real property
or any interest therein belonging to the judgment debtor, the levy thus effected creates a

lien which nothing can destroy but its dissolution (Chua Pua Hermanos v. Register of
Deeds of Batangas, 50 Phil. 670; Government, et. al. v. Mercado, 67 Phil. 409).
The foregoing conclusion has two necessary consequences.
Firstly, it follows that the writ of possession issued by the Malolos court in favor of
respondent GOLDEN STAR is null and void ab initio because it interfered with the
jurisdiction of a co-ordinate and co-equal court (See De Leon v. Salvador, 36 SCRA
567):
While property or money is in custodia legis, the officer holding it is the mere hand of
the court, his possession is the possession of the court, and to interfere with it is to
invade the jurisdiction of the court itself (Gende v. Fleming, 371 N.E. 2d. 191; Bishop v.
Atlantic Smokeless Coal Co., 88F. Supp. 27, 7 CJS 320).
Secondly, it likewise follows that the petitioner has acquired by operation of law the right
of redemption over the foreclosed properties pursuant to Sec. 6 of Act No. 3135, to wit:
In all such cases in which an extrajudicial sale is made ... any person having a lien on
the property subsequent to the mortgage ... may redeem the same at any time within
the term of one year from and after the date of sale.
It has been held that "an attaching creditor may succeed to the incidental rights to which
the debtor was entitled by reason of his ownership of the property, as for example, a
right to redeem from a prior mortgage" (Lyon v. Stanford, 5 Conn. 541, 7 SJS 505).
The fact that respondent NICOS executed a waiver of right of redemption in favor of
respondent GOLDEN STAR on October 5, 1983 is of no moment as by that time it had
no more right which it may waive in favor of another.

CLAUDE NEON LIGHTS vs.PHILIPPINE ADVERTISING CORPORATION

The petition sets up two causes of action: one attacking the validity of a writ of
attachment issued by the respondent judge on the petition and affidavit of the
respondent Philippine Advertising Corporation, on April 6, 1932; the second, attacking
the validity of the order of the respondent judge issued the same day on the petition of
the respondent Philippine Advertising Corporation, appointing a receiver of the property
which was seized by the sheriff under said writ of attachment.
FACTS:
On April 5, 1932, the respondent Philippine Advertising Corporation filed suit
against the petitioner in the Court of Manila, claiming damages for alleged breach of the
agency contract existing between the said respondent and the petitioner. At the same
time, said respondent filed an application for writ of attachment stating that Claude
Neon Lights is a foreign corporation having its principal place of business in the City of
Washington, District of Columbia. It is not alleged in said application that Claude Neon
Lights, Inc. (the petitioner herein) was about to depart 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 in the court below and in this court for the issuance of the writ of
attachment against Claude Neon 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".
On April 6, 1932, the respondent judge issued the writ of attachment as prayed
for, and the sheriff has attached all the properties of the petitioner in the Philippine
Islands. On the same date, on the ex parte petition and nomination of the respondent,
the respondent judge appointed Manuel C. Grey receiver of said properties of the
petitioner, fixing his bond at P3,000.
Motions to dissolve said writ of attachment and receivership were filed in the
court, supported by affidavits of the attorney in fact in which it is recited, that Claude
Neon is not indebted to the Phil Advertising in any sum whatever nor has it in any way
breached any contracts and that the attachment of the machinery and plants of the
petitioner, as well as its other assets, is highly prejudicial to it as it is unable to proceed
with its business in the Philippine Islands and irreparable loss will result to it unless such
attachment be raised; that the filing of said suit was malicious, without foundation, and
intended only to injure the petitioner and to depreciate the value of its holdings in the
Philippine Islands. It does not appear that any answer was made to said motion in which
said allegations were denied or that any refuting evidence was offered.
On June 20 1932, the court denied said motions to vacate the attachment and
receivership, declaring that the writ of attachment conforms to section 424 of the Code
of Civil Procedure.
Claude Neon filed a petition for certiorari and prays for annulment of the writ of
attachment as well as the appointment of receiver.
ISSUE:
WON the issuance of writ of preliminary attachment and the appointment of a
receiver valid.

RULING:
No. Claude Neon Lights 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
the was duly licensed to do business in the Philippine Islands on the date said writ of
attachment was issued. It was actively engaged in doing business in the Philippine
Islands and had considerable property, which consisted to its manufacturing plant,
machinery, merchandise and a large income under valuable contracts, all of which
property was in the possession and under the control and management of the

respondent Philippine Advertising Corporation, as the agent of the Claude Neon, on the
date said attachment was levied. Considered from a practical and economic viewpoint,
its position in the business community was indistinguishable from that of a domestic
corporation.
The question arises whether Claude Neon , a foreign corporation, shall, be deemed as
"not residing in the Philippine Islands" in the sense in which that expression would apply
to a natural person.
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.
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.
A particularly monstrous result has followed as a consequence of the granting of the writ
attaching all of the property of the petitioner on the sole allegation that it "is not residing
in the Philippine Islands".
Yes. As the petitioner's business was a going concern, which the sheriff, who levied the
writ, obviously could not manage, it became necessary on the same day for the court to
appoint a receiver. This receiver, as the demurrer admits, "was and is an employee
working under the president of the respondent Philippine Advertising Corporation, so
that to all intents and purposes, all the property of the petitioner in the Philippine Islands
was seized and delivered into the hands of the respondent Philippine Advertising
Corporation."
The prayer of the petitioner is granted. The order and writ of attachment complained of
are annulled and set aside and the court below is directed to vacate the order
appointing Manuel C. Grey receiver of the property of the petitioner and to require said
Manuel C. Grey to submit his final report at the earliest practicable date.
G.R. No. L-35990 June 17, 1981

ABOITIZ & COMPANY, INC.vs. COTABATO BUS COMPANY, INC

Facts:
The instant petition stemmed from Civil Case No. 7329 of the Court of First Instance of
Davao (Branch 1) in which a writ of preliminary attachment was issued ex-parte by the
Court on the strength of an affidavit of merit attached to the verified complaint filed by

petitioner herein, Aboitiz & Co., Inc., on November 2, 1971, as plaintiff in said case, for
the collection of money in the sum of P 155,739.41, which defendant therein, the
respondent in the instant case, Cotabato Bus Co., owed the said petitioner.
By virtue of the writ of preliminary attachment, the provincial sheriff attached personal
properties of the defendant bus company consisting of some buses, machinery and
equipment. The ground for the issuance of the writ is, as alleged in the complaint and
the affidavit of merit executed by the Assistant Manager of petitioner, that the defendant
"has removed or disposed of its properties or assets, or is about to do so, with intent to
defraud its creditors."
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 the motion stating in its Order that "the testimony of Baldovino
Lagbao, witness for the defendant, corroborates the facts in the plaintiff's 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.
Court of Appeals declared "null and void the order/writ of attachment dated November
3, 1971 and the orders of December 2, 1971, as well as that of December 11, 1971,
ordered the release of the attached properties, and made the restraining order originally
issued permanent.

Issue:
whether the writ of attachment was properly issued upon a showing that defendant is on
the verge of insolvency and may no longer satisfy its just debts without issuing the writ.

Held:
NO. Petitioner, however, disclaims any intention of advancing the theory that insolvency
is a ground for the issuance of a writ of attachment , 3 and insists that its evidence -is
intended to prove his assertion that respondent company has disposed, or is about to
dispose, of its properties, in fraud of its creditors. Aside from the reference petitioner
had made to respondent company's "nil" bank account, as if to show removal of
company's funds, petitioner also cited the alleged non-payment of its other creditors,
including secured creditors like the DBP to which all its buses have been mortgaged,

despite its daily income averaging P12,000.00, and the rescue and removal of five
attached buses.
It is an undisputed fact that, as averred by petitioner itself, the several buses attached
are nearly junks. However, upon permission by the sheriff, five of them were repaired,
but they were substituted with five buses which were also in the same condition as the
five repaired ones before the repair. 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.
It is, indeed, extremely hard to remove the buses, machinery and other equipments
which respondent company have to own and keep to be able to engage and continue in
the operation of its transportation business. The sale or other form of disposition of any
of this kind of property is not difficult of detection or discovery, and strangely, petitioner,
has adduced no proof of any sale or transfer of any of them, which should have been
easily obtainable.

PNB V. PABALAN
FACTS:
Judge Javier Pabalan rendered a Decision against Philippine Virginia Tobacco
Administration (PVTA). Consequently, a writ of execution and a notice of garnishment
on the funds of Philippine Virginia Tobacco Administration (PVTA) deposited with the
Philippine National Bank in La Union was issued. PNB, however, filed a petition for
certiorari and prohibition against Judge Pabalan, invoking the doctrine of non-suability
of a state, it being alleged that such funds are public in character.

ISSUE:
WON the funds of PVTA deposited with the PNB exempt from garnishment
HELD:
No. Under the present Constitution, what was formerly implicit as a fundamental
doctrine in constitutional law has been set forth in express terms: The State may not be
sued without its consent. If the funds appertained to one of the regular departments or
offices in the government, then, certainly, such provision would be a bar to garnishment.
But funds of public corporations which can sue and be sued are not exempt from
garnishment. As PVTA is likewise a public corporation possessed of the same
attributes, its funds that are deposited with PNB are not exempt from garnishment. The
government has entered with them into a commercial business hence it has abandoned
its sovereign capacity and has stepped down to the level of a corporation. Therefore, it

is subject to rules governing ordinary corporations and in effect can be sued. Therefore,
the petition of PNB La Union is denied.