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CARPIO, J.:
Reyes is seeking rescission of the Contract to Sell. In his amended answer, Lim is
also seeking cancellation of the Contract to Sell. The trial court then ordered Reyes
to deposit in court the P10 million down payment that Lim made under the Contract
to Sell. Reyes admits receipt of the P10 million down payment but opposes the
order to deposit the amount in court. Reyes contends that prior to a judgment
annulling the Contract to Sell, he has the right to use, possess and enjoy the P10
million as its owner unless the court orders its preliminary attachment. The instant
case is precisely one where there is a hiatus in the law and in the Rules of Court. If
left alone, the hiatus will result in unjust enrichment to Reyes at the expense of Lim.
Thus, the trial court in the exercise of its equity jurisdiction may validly order the
deposit of the P10 million down payment in court. The principle that no person may
unjustly enrich himself at the expense of another is embodied in Article 22 of the
Civil Code. This principle applies not only to substantive rights but also to
procedural remedies. One condition for invoking this principle is that the aggrieved
party has no other action based on contract, quasi-contract, crime, quasi-delict or
any other provision of law. Courts can extend this condition to the hiatus in the
Rules of Court where the aggrieved party, during the pendency of the case, has no
other recourse based on the provisional remedies of the Rules of Court.
RULE 57: PRELIMINARY ATTACHMENT
Davao Light vs. CA (G.R. No. 93262)
NARVASA, J.:p
Whether or not a writ of preliminary attachment may issue ex parte against a
defendant before acquisition of jurisdiction of the latter's person. YES.
A preliminary attachment may be defined, paraphrasing the Rules of Court, as the
provisional remedy in virtue of which a plaintiff or other party may, at the
commencement of the action or at any time thereafter, have the property of the
adverse party taken into the custody of the court as security for the satisfaction of
any judgment that may be recovered. It is a remedy which is purely statutory in
respect of which the law requires a strict construction of the provisions granting it.
Withal no principle, statutory or jurisprudential, prohibits its issuance by any court
before acquisition of jurisdiction over the person of the defendant. Rule 57 in fact
speaks of the grant of the remedy "at the commencement of the action or at any
time thereafter." The phrase, "at the commencement of the action," obviously
refers to the date of the filing of the complaint which, as above pointed out, is the
date that marks "the commencement of the action;" and the reference plainly is to
a time before summons is served on the defendant, or even before summons
issues. What the rule is saying quite clearly is that after an action is properly
commenced by the filing of the complaint and the payment of all requisite docket
and other fees the plaintiff may apply for and obtain a writ of preliminary
attachment upon 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.
The Court reiterates and reaffirms the proposition that writs of
attachment may properly issue ex parte provided that the Court is satisfied that
the relevant requisites therefor have been fulfilled by the applicant, although it
may, in its discretion, require prior hearing on the application with notice to the
defendant; BUT that levy on property pursuant to the writ thus issued may not be
validly effected unless preceded, or contemporaneously accompanied, by service on
the defendant of summons, a copy of the complaint (and of the appointment of
guardian ad litem, if any), the application for attachment (if not incorporated in but
submitted separately from the complaint), the order of attachment, and the
plaintiff's attachment bond.
Borja vs. Platon (G.R. No. L-48080)
BOCOBO, J.:
The order for preliminary attachment is questioned upon several grounds, among
which are: (1) that no writ of attachment can be issued in favor of a defendant who
presents a counterclaim; (2) and the defendants' affidavit was fatally defective.
On the first point, we believe a writ of preliminary attachment may be issued in
favor of a defendant who sets up a counterclaim. For the purpose of the protection
afforded by such attachment, it is immaterial whether the defendants Borja and
wife simply presented a counterclaim or brought a separate civil action against Jose
de Borja, plaintiff in the previous case and petitioner herein. To lay down a subtle
distinction would be to sanction that formalism and that technicality which are
discountenanced by the modern laws of procedure for the sake of speedy and
substantial justice.
As to be the second objection of petitioner, his counsel strenuously advances the
theory that the affidavit attached to the petition for a writ of preliminary attachment
was fatally defective because it failed to allege that "the amount due to the plaintiff
is as much as the sum for which the order is granted above all legal counterclaims"
as required in section 426, Code of Civil Procedure and section 3, Rule 59, Rules of
Court. The trial court found, however, that the counterclaim of Francisco de Borja
and wife exceed those of the petitioner Jose de Borja. It should be borne in mind
that the aggregate counterclaims of Francisco de Borja and wife amounted to
P869,000, which exceeds petitioner's counterclaim by P769,000 in round figures.
Moreover, as the trial court had before it the evidence adduce by both sides, the
petition for a writ of preliminary attachment having been filed four years after the
trial had begun, we presume that the lower court, having in mind such evidence,
ordered the attachment accordingly.
Corollarily, in actions in personam, such as the instant case for collection of sum of
money, summons must be served by personal or substituted service, otherwise the
court will not acquire jurisdiction over the defendant. In case the defendant does
not reside and is not found in the Philippines (and hence personal and substituted
service cannot be effected), the remedy of the plaintiff in order for the court to
acquire jurisdiction to try the case is to convert the action into a proceeding in rem
or quasi in rem by attaching the property of the defendant.
However, where the defendant is a resident who is temporarily out of the
Philippines, attachment of his/her property in an action in personam, is not always
necessary in order for the court to acquire jurisdiction to hear the case.
In the instant case, it must be stressed that the writ was issued by the trial court
mainly on the representation of petitioner that respondent is not a resident of the
Philippines. Obviously, the trial courts issuance of the writ was for the sole purpose
of acquiring jurisdiction to hear and decide the case. Had the allegations in the
complaint disclosed that respondent has a residence in Quezon City and an office in
Makati City, the trial court, if only for the purpose of acquiring jurisdiction, could
have served summons by substituted service on the said addresses, instead of
attaching the property of the defendant. The rules on the application of a writ of
attachment must be strictly construed in favor of the defendant. For attachment is
harsh, extraordinary, and summary in nature; it is a rigorous remedy which exposes
the debtor to humiliation and annoyance. It should be resorted to only when
necessary and as a last remedy.
It is clear from the foregoing that even on the allegation that respondent is a
resident temporarily out of the Philippines, petitioner is still not entitled to a writ of
attachment because the trial court could acquire jurisdiction over the case by
substituted service instead of attaching the property of the defendant. The
misrepresentation of petitioner that respondent does not reside in the Philippines
and its omission of his local addresses was thus a deliberate move to ensure that
the application for the writ will be granted.
RCBC vs. Hon. Pacifico de Castro (G.R. No. L-34548)
CORTES, J.:
The government funds and properties may not be seized under writs of execution or
garnishment to satisfy judgement. However, in this case, the Philippine Virginia
Tobacco Administration (PVTA) has been endowed with a personality distinct and
separate from the government which owns and controls it. RA 2265 created PVTA as
an ordinary corporation with all the attributes of a corporate entity subject to the
provisions of the Corporation Law. Thus, it possesses the power "to sue and be
sued" and "to acquire and hold such assets and incur such liabilites resulting
directly from operations authorized by the provisions of this Act or as essential to
the proper conduct of such operations." Here, the Court declared that the funds of
PVTA can be garnished since "funds of public corporation which can sue and be
sued were not exempt from garnishment" (PNB vs. Pabalan).
Valdevieso vs. Damalerio (G.R. No. 133303)
CHICO-NAZARIO, J.:
The settled rule is that levy on attachment, duly registered, takes preference over a
prior unregistered sale. The preference created by the levy on the attachment is not
diminished even by the subsequent registration of the prior sale.
Biaco vs. Phil. Countryside Rural Bank (G.R. No. 161417)
TINGA,J.:
Petitioner asserted that the trial court failed to acquire jurisdiction because
summons were served on her through her husband without any explanation as to
why personal service could not be made.
The question of whether the trial court has jurisdiction depends on the nature of the
action, whether the action is in personam, in rem or quasi in rem.