G.R. No.

L-252             March 30, 1946 injustice, damages and irreparable injury to their
great prejudice..
TRANQUILINO CALO and DOROTEO SAN
JOSE, petitioners,  6. That the plaintiffs are offering a bond in their
vs. application for ex-parte injunction in the amount
ARSENIO C. ROLDAN, Judge of First Instance of of P2,000, subject to the approval of this Hon.
Laguna, REGINO RELOVA and TEODULA Court, which bond is attached hereto marked as
BARTOLOME, respondents. Annex A and made an integral part of this
complaint..
Zosimo D. Tanalega for petitioners.
Estanislao A. Fernandez for respondents Relova and 7. That on or about June 26, 1945, the
Bartolome. defendants, through force, destroyed and took
No appearance for respondent Judge. away the madre-cacao fencer, and barbed wires
built on the northwestern portion of the land
FERIA, J.: designated as parcel No. (b) of this complaint to
the damage and prejudice of the plaintiffs in the
amount of at least P200..
This is a petition for writ of certiorari against the
respondent Judge Arsenio C. Roldan of the Court First
Instance of Laguna, on the ground that the latter has Wherefore, it is respectfully prayed:.
exceeded his jurisdiction or acted with grave abuse of
discretion in appointing a receiver of certain lands and their (a) That the accompanying bond in the amount of
fruits which, according to the complainant filed by the P2,000 be approved;
other respondents, as plaintiffs, against petitioners, as
defendants, in case No. 7951, were in the actual possession (b) That a writ of preliminary injunction be
of and belong to said plaintiffs. issued ex-parte immediately restraining,
enjoining and prohibiting the defendants, their
The complaint filed by plaintiffs and respondents against agents, servants, representatives, attorneys, and,
defendants and petitioners in the Court of First Instance of (or) other persons acting for and in their behalf,
Laguna reads as follows: from entering in, interfering with and/or in any
wise taking any participation in the harvest of the
1. That the plaintiffs and the defendants are all of lands belonging to the plaintiffs; or in any wise
legal age, Filipino citizens, and residents of Pila, working the lands above-described;
Laguna; the plaintiffs are husband and wife..
(c) That judgment be rendered, after due hearing,
2. That the plaintiff spouses are the owners and declaring the preliminary injunction final;.
the possessors of the following described parcels
of land, to wit:. (d) That the defendants be condemned jointly and
severally to pay the plaintiffs the sum of P200 as
xxx     xxx     xxx damages; and.

3. That parcel No. (a) described above is now an (e) That plaintiffs be given such other and further
unplanted rice land and parcel No. (b) described relief just and equitable with costs of suit to the
in the complaint is a coconut land, both under the defendants.
possession of the plaintiffs..
The defendants filed an opposition dated August 8, 1945, to
4. That the defendants, without any legal right the issuance of the writ of preliminary injunction prayed for
whatsoever and in connivance with each other, in the above-quoted complaint, on the ground that they are
through the use of force, stealth, threats and owners of the lands and have been in actual possession
intimidation, intend or are intending to enter and thereof since the year 1925; and their answer to the
work or harvest whatever existing fruits may now complaint filed on August 14, 1945, they reiterate that they
be found in the lands above-mentioned in are the owners and were then in actual possession of said
violation of plaintiff's in this case ineffectual.. property, and that the plaintiffs have never been in
possession thereof.
5. That unless defendants are barred, restrained,
enjoined, and prohibited from entering or The hearing of the petition for preliminary injunction was
harvesting the lands or working therein through held on August 9, 1945, at which evidence was introduced
ex-parte injunction, the plaintiffs will suffer by both parties. After the hearing, Judge Rilloraza, then
presiding over the Court of First Instance of Laguna, denied
the petition on the ground that the defendants were in actual
possession of said lands. A motion for reconsideration was persons acting for or in their behalf, be restrained, enjoined
filed by plaintiffs on August 20, 1945, but said motion had and prohibited from entering in, interfering with, or in any
not yet, up to the hearing of the present case, been decided way taking any participation in the harvest of the lands
either by Judge Rilloraza, who was assigned to another above describe belonging to the plaintiffs."
court, or by the respondent judge.
That this is the nature of plaintiffs' action corroborated by
The plaintiffs (respondents) filed on September 4, 1945, a the fact that they petitioned in the same complaint for a
reply to defendants' answer in which, among others, they preliminary prohibitory injunction, which was denied by
reiterate their allegation in the complaint that they are the court in its order dated August 17, 1945, and that the
possessors in good faith of the properties in question. plaintiffs, in their motion for reconsideration of said order
filed on August 20 of the same year, and in their urgent
And on December 17, plaintiffs filed an urgent petition ex- petition dated December 17, moving the court to grant said
parte praying that plaintiffs' motion for reconsideration of motion for reconsideration, reiterated that they were actual
the order denying their petition for preliminary injunction possessors of the land in question.
be granted and or for the appointment of a receiver of the
properties described in the complaint, on the ground that (a) The fact that plaintiffs, in their reply dated September 4,
the plaintiffs have an interest in the properties in question, after reiterating their allegation or claim that they are the
and the fruits thereof were in danger of being lost unless a owners in fee simple and possessors in good faith of the
receiver was appointed; and that (b) the appointment of a properties in question, pray that they be declared the
receiver was the most convenient and feasible means of owners in fee simple, has not changed the nature of the
preserving, administering and or disposing of the properties action alleged in the complaint or added a new cause of
in litigation which included their fruits. Respondents Judge action thereto; because the allegations in plaintiffs' reply
Roldan, on the same date, December 17, 1945, decided that were in answer to defendants' defenses, and the nature of
the court would consider the motion for reconsideration in plaintiffs' cause of action, as set forth in their complaint,
due time, and granted the petition for appointment of and was not and could not be amended or changed by the reply,
appointed a receiver in the case. which plaintiffs had the right to present as a matter of
course. A plaintiff can not, after defendant's answer, amend
The question to be determined in the present special civil his complaint by changing the cause of action or adding a
action of certiorari is, whether or not the respondent judge new one without previously obtaining leave of court
acted in excess of his jurisdiction or with grave abuse of (section 2, Rule 17)..
discretion in issuing the order appointing a receiver in the
case No. 7951 of the Court of First Instance of Laguna; for Respondents' contention in paragraph I of their answer that
it is evident that there is no appeal or any other plain, the action filed by them against petitioners in the case No.
speedy, and adequate remedy in the ordinary course of the 7951 of the Court of First Instance of Laguna is not only
law against the said order, which is an incidental or for injunction, but also to quiet title over the two parcels of
interlocutory one. land described in the complaint, is untenable for the reasons
stated in the previous paragraph. Besides, an equitable
It is a truism in legal procedure that what determines the action to quiet title, in order to prevent harrassment by
nature of an action filed in the courts are the facts alleged in continued assertion of adverse title, or to protect the
the complaint as constituting the cause of the action. The plaintiff's legal title and possession, may be filed in courts
facts averred as a defense in the defendant's answer do not of equity (and our courts are also of equity), only where no
and can not determine or change the nature of the plaintiff's other remedy at law exists or where the legal remedy
action. The theory adopted by the plaintiff in his complaint invokable would not afford adequate remedy (32 Cyc.,
is one thing, and that of the defendant in his answer is 1306, 1307). In the present case wherein plaintiffs alleged
another. The plaintiff has to establish or prove his theory or that they are the owners and were in actual possession of
cause of action in order to obtain the remedy he prays for; the lands described in the complaint and their fruits, the
and the defendant his theory, if necessary, in order to defeat action of injunction filed by them is the proper and
the claim or action of the plaintiff.. adequate remedy in law, for a judgment in favor of
plaintiffs would quiet their title to said lands..
According to the complaint filed in the said case No. 7951,
the plaintiff's action is one of ordinary injunction, for the The provisional remedies denominated attachment,
plaintiffs allege that they are the owners of the lands therein preliminary injunction, receivership, and delivery of
described, and were in actual possession thereof, and that personal property, provided in Rules 59, 60, 61, and 62 of
"the defendants without any legal right whatever and in the Rules of Court, respectively, are remedies to which
connivance with each other, through the use of force, parties litigant may resort for the preservation or protection
stealth, threat and intimidation, intend or are intending to of their rights or interest, and for no other purpose, during
enter and work or harvest whatever existing fruits may be the pendency of the principal action. If an action, by its
found in the lands above mentioned in violation of nature, does not require such protection or preservation,
plaintiffs' proprietary rights thereto;" and prays "that the said remedies can not be applied for and granted. To each
defendants, their agents, servants, representatives, and other kind of action or actions a proper provisional remedy is
provided for by law. The Rules of Court clearly specify the the defendant from damaging, destroying or disposing of
case in which they may be properly granted. . the same during the pendency of the suit.

Attachment may be issued only in the case or actions Undoubtedly, according to law, the provisional remedy
specifically stated in section 1, Rule 59, in order that the proper to plaintiffs' action of injunction is a preliminary
defendant may not dispose of his property attached, and prohibitory injunction, if plaintiff's theory, as set forth in
thus secure the satisfaction of any judgment that may be the complaint, that he is the owner and in actual possession
recovered by plaintiff from defendant. For that reason a of the premises is correct. But as the lower court found at
property subject of litigation between the parties, or the hearing of the said petition for preliminary injunction
claimed by plaintiff as his, can not be attached upon motion that the defendants were in possession of the lands, the
of the same plaintiff.. lower court acted in accordance with law in denying the
petition, although their motion for reconsideration, which
The special remedy of preliminary prohibitory injunction was still pending at the time the petition in the present case
lies when the plaintiff's principal action is an ordinary was heard in this court, plaintiffs insist that they are in
action of injunction, that is, when the relief demanded in actual possession of the lands and, therefore, of the fruits
the plaintiff's complaint consists in restraining the thereof.
commission or continuance of the act complained of, either
perpetually or for a limited period, and the other conditions From the foregoing it appears evident that the respondent
required by section 3 of Rule 60 are present. The purpose judge acted in excess of his jurisdiction in appointing a
of this provisional remedy is to preserve the status quo of receiver in case No. 7951 of the Court of First Instance of
the things subject of the action or the relation between the Laguna. Appointment of a receiver is not proper or does
parties, in order to protect the rights of the plaintiff not lie in an action of injunction such as the one filed by the
respecting the subject of the action during the pendency of plaintiff. The petition for appointment of a receiver filed by
the suit. Because, otherwise or if no preliminary prohibition the plaintiffs (Exhibit I of the petition) is based on the
injunction were issued, the defendant may, before final ground that it is the most convenient and feasible means of
judgment, do or continue the doing of the act which the preserving, administering and disposing of the properties in
plaintiff asks the court to restrain, and thus make litigation; and according to plaintiffs' theory or allegations
ineffectual the final judgment rendered afterwards granting in their complaint, neither the lands nor the palay harvested
the relief sought by the plaintiff. But, as this court has therein, are in litigation. The litigation or issue raised by
repeatedly held, a writ of preliminary injunction should not plaintiffs in their complaint is not the ownership or
be granted to take the property out of the possession of one possession of the lands and their fruits. It is whether or not
party to place it in the hands of another whose title has not defendants intend or were intending to enter or work or
been clearly established.. harvest whatever existing fruits could then be found in the
lands described in the complaint, alleged to be the
A receiver may be appointed to take charge of personal or exclusive property and in the actual possession of the
real property which is the subject of an ordinary civil plaintiffs. It is a matter not only of law but of plain
action, when it appears that the party applying for the common sense that a plaintiff will not and legally can not
appointment of a receiver has an interest in the property or ask for the appointment or receiver of property which he
fund which is the subject of the action or litigation, and that alleges to belong to him and to be actually in his
such property or fund is in danger of being lost, removed or possession. For the owner and possessor of a property is
materially injured unless a receiver is appointed to guard more interested than persons in preserving and
and preserve it (section 1 [b], Rule 61); or when it appears administering it.
that the appointment of a receiver is the most convenient
and feasible means of preserving, administering or Besides, even if the plaintiffs had amended their complaint
disposing of the property in litigation (section 1 [e] of said and alleged that the lands and palay harvested therein are
Rule). The property or fund must, therefore be in litigation being claimed by the defendants, and consequently the
according to the allegations of the complaint, and the object ownership and possession thereof were in litigation, it
of appointing a receiver is to secure and preserve the appearing that the defendants (now petitioners) were in
property or thing in controversy pending the litigation. Of possession of the lands and had planted the crop or palay
course, if it is not in litigation and is in actual possession of harvested therein, as alleged in paragraph 6 (a) and (b) of
the plaintiff, the latter can not apply for and obtain the the petition filed in this court and not denied by the
appointment of a receiver thereof, for there would be no respondent in paragraph 2 of his answer, the respondent
reason for such appointment. judge would have acted in excess of his jurisdiction or with
a grave abuse of discretion in appointing a receiver thereof.
Delivery of personal property as a provisional remedy Because relief by way of receivership is equitable in nature,
consists in the delivery, by order of the court, of a personal and a court of equity will not ordinarily appoint a receiver
property by the defendant to the plaintiff, who shall give a where the rights of the parties depend on the determination
bond to assure the return thereof or the payment of of adverse claims of legal title to real property and one
damages to the defendant in the plaintiff's action to recover party is in possession (53 C. J., p. 26). The present case
possession of the same property fails, in order to protect the falls within this rule..
plaintiff's right of possession of said property, or prevent
In the case of Mendoza vs. Arellano and B. de Arellano,
this court said:

Appointments of receivers of real estate in cases

of this kind lie largely in the sound discretion of
the court, and where the effect of such an
appointment is to take real estate out of the
possession of the defendant before the final
adjudication of the rights of the parties, the
appointment should be made only in extreme
cases and on a clear showing of necessity therefor
in order to save the plaintiff from grave and
irremediable loss or damage. (34 Cyc., 51, and
cases there cited.) No such showing has been
made in this case as would justify us in
interfering with the exercise by trial judge of his
discretion in denying the application for receiver.
(36 Phil., 59, 63, 64.).

Although the petition is silent on the matter, as the

respondents in their answer allege that the Court of First
Instance of Laguna has appointed a receiver in another case
No. 7989 of said court, instituted by the respondents
Relova against Roberto Calo and his brothers and sisters,
children of Sofia de Oca and Tranquilino Calo (petitioner
in this case), and submitted copy of the complaint filed by
the plaintiffs (now respondents) in case No. 7989 (Exhibit 9
of the respondents' answer), we may properly express and
do hereby express here our opinion, in order to avoid
multiplicity of suits, that as the cause of action alleged in
the in the complaint filed by the respondents Relova in the
other case is substantially the same as the cause of action
averred in the complaint filed in the present case, the order
of the Court of First Instance of Laguna appointing a
receiver in said case No. 7989 was issued in excess of its
jurisdiction, and is therefore null and void.

In view of all the foregoing, we hold that the respondent

Judge Arsenio C. Roldan of the Court of First Instance of
Laguna has exceeded his jurisdiction in appointing a
receiver in the present case, and therefore the order of said
respondent judge appointing the receiver, as well as all
other orders and proceedings of the court presided over by
said judge in connection with the receivership, are null and
void.

As to the petitioners' petition that respondents Relova be

punished for contempt of court for having disobeyed the
injunction issued by this court against the respondents
requiring them to desist and refrain from enforcing the
order of receivership and entering the palay therein, it
appearing from the evidence in the record that the palay
was harvested by the receiver and not by said respondents,
the petition for contempt of court is denied. So ordered,
with costs against the respondents.

Moran, C. J., Ozaeta, Jaranilla, De Joya, Pablo, Perfecto,

Hilado, and Bengzon, JJ., concur.
ELEAZAR V. ADLAWAN, petitioner,  them to attach the real and personal properties of petitioner
vs. within their respective jurisdictions. On the strength of the
HON. JUDGE VALERIANO P. TOMOL, as Presiding writ of preliminary attachment, the bulk of petitioner's
Judge of Branch XI of RTC-Cebu (formerly Branch XI, property in Davao City was attached.
CFI-Cebu), Branch XXVII of RTC-Cebu, with Station
in Lapu-Lapu City (formerly Branch XVI, CFI-Cebu, Subsequently, private respondent filed an Urgent Ex-
Presided over by former Judge Ceferino E. Dulay), and parte Motions 3 asking the court that it be allowed to take
ABOITIZ COMPANY, INC., respondents. possession and custody of the attached properties to protect
its interest and to avoid any damage or deterioration
Pablo P. Garcia for petitioner. considering that the sheriff has no proper place to store or
Angara, Concepcion, Regala & Cruz for private deposit said properties. This was granted by respondent
respondent. Judge on May 28, 1982 for being meritorious.

Meanwhile, petitioner before submitting an answer to the

complaint, filed a Motion for a Bill of Particulars 4 and to
Set Aside the Ex-Parte Writ of Preliminary
Attachment 5 which was opposed by private respondent.
FERNAN, C.J.: Finding that the discharge of the writ of attachment is
unavoidable on the ground that it was issued ex-parte,
This is a special civil action without notice and hearing, based principally on the alleged
for certiorari and mandamus seeking to annul : [a] the removal or disposition by the defendants of their properties
Order dated December 20, 1982 of respondent Judge with intent to defraud the plaintiff, which allegation was
Valeriano P. Tomol, Branch XI of CFI-Cebu, now Branch limited to a bare assertion and not persuasively substantial,
XI, RTC-Cebu, in Civil Case No. R-21761, entitled respondent Judge issued an Orders 6 dated July 6, 1982, the
"Aboitiz and Company, Inc. v. Adlawan, et al" denying the dispositive portion of which reads:
motion of the defendant to require the Provincial Sheriff of
Cebu to deliver to him the properties seized by the Sheriff Accordingly, the Order of May 14, 1982 granting
of Davao City and [b] the Order dated September 4, 1982 the writ of preliminary attachment
of Judge Ceferino F. Dulay, Branch XVI of the Court of is lifted and vacated. The writs issued on 26 May
First Instance of Cebu, now Branch XXVII, RTC-Cebu, 1982, are dissolved and recalled and the
Lapu-Lapu City, in Civil Case No. 619-L between the same properties levied and seized by the Sheriffs of
parties, denying for lack of merit petitioner's Omnibus Cebu and Davao City
Motion to reconsider, dissolve and set aside the Writ of are discharged and released.
seizure and Replevin.
SO ORDERED. (Emphasis supplied)
The antecedent facts are as follows:
In view of the foregoing, private respondent Aboitiz and
Petitioner Eleazar A. Adlawan, a private contractor, was Company, Inc. filed an Urgent Ex-Parte Motion 7 dated
awarded by the National Irrigation Administration (NIA) July 7, 1982 praying for a stay of the July 6, 1982 Order
and the Bureau of Public Highways (BPH) contracts for the dissolving the writ of preliminary attachment, thus
construction of various infrastructure projects of the maintaining the status quo. Private respondent further
government to perform his obligations thereunder, prayed for the court to direct the sheriff of Davao City to
petitioner sought financial assistance and support from desist and/or stop the enforcement or implementation of the
private respondent Aboitiz and Company, Inc. For failure order lifting the attachment and to grant them fifteen (15)
of petitioner to pay the installments and amortizations, days to elevate the matter to the Appellate Court.
private respondent filed on May 13, 1982 before the Court Consequently, respondent Judge Tomol issued on the same
of First Instance of Cebu a complaint 1 for the collection of day an Orders 8 granting the motion prayed for by private
a sum of money and damages including an ex- respondent Aboitiz and Company, Inc. Thus, the July 6,
parte application for the issuance of a writ of preliminary 1982 Order was stayed.
attachment against the property of petitioner as defendant
therein. The Executive Judge without notice and hearing
issued an order 2 on May 14, 1982 directing the issuance of In the meantime, three (3) Deputy Sheriffs of Cebu
a writ of preliminary attachment against all the properties implemented the Order lifting the Writ of Attachment and
of petitioner, real and personal, upon the filing of an were able to pull out some personal properties of petitioner
attachment bond for Four Million Pesos. The case, Adlawan. They were not able to take out all the attached
docketed as Civil Case No. R21761 was raffled and later properties in view of the subsequent Order of respondent
assigned to Branch XI of the Court of First Instance of judge to stay its implementation.
Cebu, presided by respondent Judge Valeriano P. Tomol.
On May 26, 1982, writs of preliminary attachment were As petitioner's Motion for a Bill of Particulars was not
issued addressed to the Sheriffs of Cebu, Davao City, immediately acted upon, he was not able to file an answer
Quezon City, Davao del Sur and Davao del Norte, directing or interpose any counterclaim. For this reason, petitioner
filed an Application for Award of Damages dated July 9, private respondent's office is situated in Cebu City while
1982 asking for a reasonable rental on the attached heavy petitioner is a resident of mainland Cebu, particularly
construction equipment, machineries and other properties at Minglanilla therefore the Court of First Instance of Cebu
the rate of P30,000.00 per day from the date of seizure until stationed in Lapu-Lapu should not accept the case.
said properties are actually returned to his possession and Furthermore, he alleged that the same personal properties
control.9 seized are in custodia legis by virtue of a writ of
preliminary attachment issued by the Court of First
Before the court a quo could act on the motions of Instance of Cebu, Branch XI, presided by respondent Judge
petitioner Adlawan, and before he could file an answer, his Tomol. The Court of First Instance of Cebu, Branch XVI in
motion for a bill of particulars not having been acted upon, Lapu-Lapu City, presided by Judge Ceferino E. Dulay
private respondent Aboitiz and Company, Inc., filed on denied the Omnibus Motion for lack of merit on September
July 13, 1982 a Notice of Dismissal or Withdrawal of 4, 1982. Petitioner Adlawan filed a Motion for
Complaint 10 as a matter of right in accordance with Section Reconsideration but the same was denied.
1, Rule 17 of the Rules of Court. Respondent Judge Tomol
issued an Order 11 dated July 15, 1982, the dispositive Hence, the present petition
portion of which reads: for certiorari and mandamus impleading respondent Judge
Valeriano P. Tomol as Presiding Judge of Branch XI of the
Accordingly, the termination of this case upon Court of First Instance of Cebu (now Branch XI, RTC-
the notice of dismissal voluntarily filed by the Cebu) and Branch XVI, CFI-Cebu presided by Judge
plaintiff is hereby confirmed. For emphasis, all Ceferino E. Dulay in Lapu-Lapu City (now Branch XXVII
orders of this Court issued prior to the filing of of RTC Cebu in Lapu-Lapu) and private respondent
said notice of dismissal are each and all Aboitiz and Company, Inc.
rendered functus officio. By the same token, all
pending incidents, particularly the defendant's The issues raised by petitioner Adlawan are the following,
motion for a bill of particulars and their petition to wit:
for damages against the Plaintiffs attachment
bond, are now beyond the competence of this 1) After the attachment of petitioner's properties
Court to consider for being moot and academic. was dissolved and discharged because it was
found by respondent Judge to be wrongful and
SO ORDERED illegal, does it not constitute grave and manifest
abuse of discretion on the part of the same
Petitioner Adlawan filed a Motion 12 dated July 28, 1982 respondent judge TO REFUSE to implement his
praying for the issuance of an order to the Provincial own order for the return of the attached properties
Sheriff of Cebu to implement and enforce the Order of to petitioner simply because private respondent
respondent Judge dated July 6, 1982 dissolving the writ of suddenly dismissed its complaint?
preliminary attachment and to secure the delivery of the
attached properties to the petitioner. Respondent Judge 2) On the other hand, the court, after having
issued an Order 13 dated December 20, 1982 denying the deprived petitioner possession and enjoyment of
Motion in view of the institution by private respondent his properties, by reason of an attachment which,
Aboitiz and Company, Inc. of a civil case (No. 619-L) for subsequently, was dissolved and discharged, was
delivery of Personal Properties with Replevin and Damages it not the clear, specific and inescapable duty of
before the Court of First Instance of Cebu, Branch XVI in that same court, to order that said properties be
Lapu-Lapu City on July 13, 1982 and the filing of returned and restored to the possession and
petitioner Adlawan of a case for damages (Civil Case No. enjoyment of petitioner?
22265) before the Court of First Instance of Cebu, Branch
X, in connection with the seizure of his properties under the 3) Are not the attached properties of petitioner
writ of preliminary attachment. under the custodia legis of the attaching court —
Branch XI, CFI-Cebu (now Branch XI, RTC-
With regard to the replevin case filed by private respondent Cebu) and, therefore, subject to its jurisdiction
Aboitiz and Company, Inc., the Court of First Instance of and control? If so, does it not constitute grave and
Cebu, Branch XVI, Lapu-Lapu City, issued an Order 14 for manifest abuse of discretion on the part of the
the seizure and delivery of the properties described therein attaching court to literally wash his (sic) hands
to the private respondent. The seized properties were thus off any duty or responsibility by considering
delivered to private respondent by the Clerk of Court and himself (sic) as having been divested of authority
Ex-officio Provincial Sheriff on July 24, 1982. Petitioner to deal with such properties?
filed an Omnibus Motion 15 dated July 17, 1982 to
reconsider, dissolve and set aside the Writ of Seizure and 4) Did not the Lapu-Lapu Branch of CFI-Cebu
Replevin and to direct that the properties seized be returned act, without or in excess of his (sic) jurisdiction
to petitioner as well as to dismiss the complaint. In support or, at least, with grave abuse of discretion, in
of this motion, petitioner alleged, among others, that taking cognizance of the replevin case which
 involves properties already in custodia legis of upon the expiration of the period to appeal
Branch XI of CFI-Cebu? therefrom if no appeal has been perfected.

5) On the other hand, was it not the clear, specific It is basic that once a judgment becomes final, the
and inescapable duty of the Lapu-Lapu Branch of prevailing party is entitled as a matter of right to a Writ of
CFI-Cebu, to dismiss the replevin case and Execution, and the issuance thereof is the Court's
dissolve the writ of replevin, not only because of ministerial duty."17
the principle of custodia legis but also because it
was in clear violation of Adm. Order No. 6 of this But as earlier stated, the reasons advanced by respondent
Honorable Supreme Court, which amends Adm. Judge Tomol for denying the enforcement of his order
Orders No. 147 and 328 of the Department (now dated July 6, 1982 which lifted the writ of attachment and
Ministry) of Justice? 16 the restoration of the seized properties to the defendant
petitioner herein are: [a] the filing by private respondent of
From the recital of facts may be gleamed a series of Civil Case No. 619-L with Branch XVI of CFI-Lapu-Lapu
peculiar events and circumstances requiring examination City for delivery of Personal Properties with Replevin and
and looking into in order that justice and equity may be Damages which as a consequence, the same properties
subserved. involved in this case were seized under a writ of replevin
upon order of aforesaid court and [b] the filing by petitioner
Petitioner's properties were attached on the strength of the of Civil Case No. 22265 before Branch X of the Court of
writs of preliminary attachment issued without notice and First Instance of Cebu, for damages.
hearing by the executive judge. These attached properties
were given to the custody of private respondent, Aboitiz Hence, the issues in this case center on the nature and
and Company, Inc. Petitioner then filed a Motion to purpose of the writ of attachment.
Dissolve the Writ of Attachment which was granted by
respondent Judge Tomol. Thus, petitioner was able to A writ of preliminary attachment is a provisional remedy
recover some of his properties. But on the following day, issued upon order of the court where an action is pending to
this order was stayed by the same respondent judge leaving be levied upon the property or properties of the defendant
the rest of petitioner's properties with private respondent. therein, the same to be held thereafter by the Sheriff as
Later, private respondent withdrew its complaint which was security for the satisfaction of whatever judgment might be
confirmed by respondent Judge Tomol. Petitioner Adlawan secured in said action by the attaching creditor against the
filed a motion to have the rest of his properties returned but defendant. 18
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. 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
After a careful examination of the records of the case We be secured by plaintiff from defendant. 19 The purpose and
rule in favor of petitioner Adlawan. function of an attachment or garnishment is two-fold. First,
it seizes upon property of an alleged debtor in advance of
There is no question that the order dated July 6, 1982 of final judgment and holds it subject to appropriation thus
respondent Judge Valeriano P. Tomol, Jr. lifting and prevents the loss or dissipation of the property by fraud or
vacating the order granting the writ of preliminary otherwise. Second, it subjects to the payment of a creditor's
attachment is a valid order, issued while he had jurisdiction claim property of the debtor in those cases where personal
over the case. The execution of aforesaid order of July 6, service cannot be obtained upon the debtor. 20 This remedy
1982 was stayed for a period of fifteen (15) days on motion is to secure a contingent lien on defendant's property until
of the plaintiff to enable the latter to question the propriety plaintiff can, by appropriate proceedings, obtain a judgment
or impropriety of the same in the appellate court. Instead, and have such property applied to its satisfaction, or to
plaintiff filed a civil case for delivery of Personal make some provision for unsecured debts in cases where
Properties with Replevin and Damages with another branch the means of satisfaction thereof are liable to be removed
of the CFI of Cebu. Accordingly, having failed to appeal or beyond the jurisdiction, or improperly disposed of or
question the aforementioned order in the appellate court as concealed, or otherwise placed beyond the reach of
originally manifested, the same became final and creditors. 21
executory.
Attachment is an ancillary remedy. It is not sought for its
Section 1, Rule 39 of the Revised Rules of Court provides: own sake but rather to enable the attaching party to realize
upon relief sought and expected to be granted in the main
Execution upon final judgment or orders. — or principal pal action. 22
Execution shall issue upon a judgment or order
that finally disposes of the action or proceeding. The remedy of attachment is adjunct to the main suit,
Such execution shall issue as a matter of right therefore, it can have no independent existence apart from a
suit on a claim of the plaintiff against the defendant. In
other words, a attachment or garnishment is generally principal place of business is in Cebu City. Obviously, the
ancillary to, and dependent on, a principal proceeding, question posed by petitioner is venue.
either at law or in equity, which has for its purpose a
determination of the justice of creditor's demand. 23 A reading of the Omnibus Motion filed by petitioner, then
defendant therein, would reveal that he not only questioned
Thus, this Court ruled that upon levy by attachment of the the jurisdiction of the court but likewise alleged non-
property in question by order of the Court, said property jurisdictional grounds for dismissing the replevin case, such
fell into custodia legis of that court for purposes of that as the amount of the bond put up by Aboitiz & Co. as
civil case only. Any relief against such attachment and the grossly insufficient and that the same properties are
execution an issuance of a writ of possession that ensued involved both in the replevin case and in the original
subsequently could be disposed of only in that case. 24 collection case with preliminary attachment. Thus, in so
doing, the court acquired jurisdiction over him. In the case
More specifically, it was held that courts have no of Wang Laboratories, Inc. vs. Mendoza  29 this Court held:
jurisdiction to order the delivery of personal property
(replevin) to the plaintiff if the property is under Even though the defendant objects to the
attachment. 25 Only courts having supervisory control or jurisdiction of the court, if at the same time he
superior jurisdiction in the premises, have the right to alleges any non-jurisdictional ground for
interfere with and change possession of property dismissing the action, the court acquires
in custodia legis. 26 jurisdiction over him.

More recently, this Court ruled that the garnishment of Furthermore, in the case of City of Cebu
property to satisfy a writ of execution operates as an v. Consolacion, 30 We held that:
attachment and fastens upon the property a lien by which
the property is brought under the jurisdiction of the court . . . any of the branches of the Court of First
issuing the writ. It is brought into custodia legis under the Instance of the Province of Cebu, whether
sole control of such court. 27 stationed in the city of the same name or in any
of the municipalities of the province would be
During the life of the attachment, the attached property proper venue for its trial and determination, it
continues in the custody of the law, the attaching officer being admitted that the parties are residents of the
being entitled to its possession and liability for its safe Province of Cebu . . .
keeping. 28
Finally, the employment by counsel for private respondent
Based on the above-cited principles, it is obvious that the of dubious procedural maneuvers as what transpired in the
writ of preliminary attachment issued is already dissolved case at bar obviously to continue the wrongful and illegal
and rendered non-existent in view of the withdrawal of the possession and custody of petitioner's properties even after
complaint by Aboitiz and Company, Inc. More importantly, the dissolution of the attachment is to say the least, hardly
even if the writ of attachment can be considered commendable if not a form of "forum shopping", to seek
independently of the main case, the same, having been the court where he may possibly obtain favorable
improperly issued as found by respondent Judge Tomol judgment. 31
himself, is null and void and cannot be a justification for
holding petitioners' properties in custodia legis any longer. It may therefore be stated that the right to come before the
Courts to redress a grievance or right a wrong should be
To reiterate, an attachment is but an incident to a suit; and exercised with prudence and good faith. In the case
unless the suit can be maintained, the attachment must fall. of Indianapolis v. Chase National Bank, Trustee, 314 U.S.
69, it is opined that "Litigation is the pursuit of practical
When Aboitiz and Company, Inc. withdrew its complaint, ends, not a game of chess."
the attachment ceased to have a leg to stand on. The
attached properties of petitioner Adlawan which are in the WHEREFORE, in view of the foregoing, this Court rules
custody of private respondent Aboitiz should be returned to that the attached properties left in the custody of private
petitioner. This is only proper and equitable and in respondent Aboitiz and Company, Inc. be returned to
consonance with the rules and principles of law. The petitioner Eleazar V. Adlawan without prejudice to the
parties, by the withdrawal of the complaint, should be outcome of the cases filed by both parties.
placed in the same standing as they were before the filing
of the same. SO ORDERED.

Petitioner also questions the jurisdiction of the CFI of Cebu

stationed in Lapu-Lapu City to hear the replevin case filed
by private respondent in view of the fact that petitioner is a
resident of Minglanilla, Cebu while private respondent's
SPOUSES JULIETA SALGADO and JOSE authorizing its issuance must be strictly construed in favor
SALGADO, Petitioners, v. HON. COURT OF of the defendant. It should not be abused as to cause
APPEALS and PHILIPPINE COMMERCIAL & unnecessary prejudice. It is the duty of the court before
INDUSTRIAL BANK, Respondents. issuing the writ to ensure that all the requisites of the law
has been complied with (Guzman v. Catolico, 65 Phil. 257;
Reyes & Reyes Law Office, for Petitioners. Salas v. Adil, 90 SCRA 125).

San Juan Africa, Gonzales & San Agustin Law Office AQUINO, J., dissenting:chanrob1es virtual 1aw library
for Private Respondent.
1. REMEDIAL LAW; PROVISIONAL REMEDY;
ATTACHMENT; MAY ISSUE EVEN IF DEBT IS
SYLLABUS SECURED; CASE AT BAR. — A writ of attachment may
be validly issued although the debt sued upon is secured by
mortgages where such mortgages covered not only the debt
sued upon but also the debtors’ other obligations; where the
1. REMEDIAL LAW; PROVISIONAL REMEDIES; debtors failed to assign to the creditor bank their sugar
ATTACHMENT; PURPOSE. — The chief purpose of the proceeds which they had given as security for their loan;
remedy of attachment is to secure a contingent lien on and where the writ is supported by a sufficient bond.
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 DECISION
thereof are liable to be removed beyond the jurisdiction, or
improperly disposed of or concealed, or otherwise placed
beyond the reach of creditors (7 C.J.S. 190). ESCOLIN, J.:

2. ID.; ID.; ID.; REQUISITES FOR ISSUANCE SHALL

NOT ISSUE WHERE DEBTS SUFFICIENTLY This is a petition for review filed by the spouses Jose
SECURED; REASON. — The grounds upon which Salgado and Julieta Salgado to set aside the resolution of
attachment may issue are set forth in Section 1, Rule 57 of the then Court of Appeals in CA-G.R. No. SP-09407-R,
the Rules of Court. But quite apart from the grounds stated dated September 18, 1980, which authorized the issuance
therein, it is further provided in Section 3 of Rule 57 that of a writ of attachment against the property of said
"an order of attachment shall be granted only when it is petitioners.
made to appear by the affidavit of the applicant or some
other person who personally knows the facts, that . . . there The pertinent facts that gave rise to this petition are as
is no other sufficient security for the claim sought to be follows: On May 8, 1978, the Philippine Commercial and
enforced by the action." The reason for the rule prohibiting Industrial Bank, hereinafter referred to as the Bank, filed an
attachment where indebtedness was already secured is to action against petitioners, docketed as Civil Case No.
prevent the secured creditors from attaching additional 29392 of the then Court of First Instance of Rizal, to
property and thus tying up more of the debtor’s property recover on a promissory note in the amount of
than was necessary to secure the indebtedness (Blankenship P1,510,905.96, inclusive of interest and other bank charges.
v. Myers, 54 P. 2d 314, 316; 97 Idaho 356 [1975]). Thus, to In its verified complaint, the Bank further prayed for the
sustain an order of attachment, "it is incumbent upon issuance of a writ of attachment. As grounds therefor it
plaintiff to establish either of these two facts, to wit: (a) that alleged that petitioners had fraudulently misappropriated
the obligation had not been secured originally, or (b) that, if and/or converted to their own personal use and benefit the
secured at its beginning, the security later became sugar proceeds given as security for the payment of the
valueless." (Giandini v. Ramirez, 54 Pacific Reporter [2d] indebtedness; that petitioners are guilty of fraud in
91-92). contracting their obligation and have concealed, removed
or disposed of the properties mortgaged or assigned to the
3. ID.; ID.; ID.; DISCHARGE THEREOF, WHEN plaintiff, or are concealing, removing or disposing or about
PROPER. — Section 13, Rule 57 of the Rules of Court to do so, with intent to defraud their creditor; that the
authorizes the discharge of an attachment where the same obligation sought to be enforced is genuine and, therefore,
had been improperly or irregularly issued. In National a sufficient cause of action exists; and that there is no
Coconut Corporation v. Hon. Potenciano Pecson, 90 Phil. sufficient security for the claim sought to be enforced by
809, this Court ruled that when the facts or some of them, the action. Attached to the complaint was the affidavit of
stated in the plaintiff’s affidavit, are shown by the Mrs. Helen Osias, Senior Branch Credit Division Manager
defendant to be untrue, the writ of attachment may be of the Bank, wherein she stated, among others, "that there
considered as improperly or irregularly issued. is no sufficient security for the claim sought to be enforced
by this action."cralaw virtua1aw library
4. ID.; ID.; ID.; ISSUANCE THEREOF STRICTLY
CONSTRUED IN FAVOR OF DEFENDANT. — Since On May 9, 1978, the trial court issued an order granting the
attachment is a harsh and rigorous remedy which exposes Bank’s prayer for preliminary attachment upon a bond in
the debtor to humiliation and annoyance, the rule
the sum of P1,510,905.96. Upon the filing of said bond, the creditors from attaching additional property and thus tying
Deputy Provincial Sheriff levied upon several parcels of up more of the debtor’s property than was necessary to
land of petitioners situated in the province of Negros secure the indebtedness. 2 Thus, to sustain an order of
Occidental. attachment, "it is incumbent upon plaintiff to establish
either of these two facts, to wit: (a) that the obligation had
On September 15, 1978, petitioners Salgado moved to not been secured originally, or (b) that, if secured at its
quash the writ of attachment on the ground that respondent beginning, the security later became valueless." 3 
Bank made fraudulent misrepresentation in securing the
writ by deleting the words "R E M" or "Real Estate In the instant case, the allegation in the affidavit of the
Mortgage" from the xerox copy of the promissory note Bank’s Credit Division Manager, Mrs. Helen Osias, to the
attached to the complaint, thereby "making it appear that effect that "there is no sufficient security for the claim
the note was unsecured when in truth and in fact it was sought to be enforced by this action" has been shown to be
fully secured by a series of valid and existing real estate false. It is undisputed that the note sued upon "is fully
mortgages duly registered and annotated in the titles of the secured by a series of valid and existing real estate
affected real properties in favor of the plaintiff Bank." In mortgages duly registered and annotated in the titles of the
the same motion, petitioners stressed the lack of factual affected real property in favor of the plaintiff Bank."cralaw
basis of the Bank’s claim as to their alleged fraudulent virtua1aw library
misappropriation or conversion of the sugar proceeds given
as security for their obligation. Section 13, Rule 57 of the Rules of Court authorizes the
discharge of an attachment where the same had been
After due hearing, the trial court issued an order dated improperly or irregularly issued. In National Coconut
January 31, 1979 granting petitioners’ motion and lifting Corporation v. Hon. Potenciano Pecson, 4 this Court ruled
the writ of attachment previously issued. that when the facts or some of them, stated in the plaintiff’s
affidavit, are shown by the defendant to be untrue, the writ
Upon denial of its motion for reconsideration the Bank of attachment may be considered as improperly or
went to the Court of Appeals on a petition for certiorari to irregularly issued.
annul the order of the trial court lifting the writ of
attachment.cralawnad Since attachment is a harsh and rigorous remedy which
exposes the debtor to humiliation and annoyance, the rule
On November 29, 1979, the respondent Court of Appeals, authorizing its issuance must be strictly construed in favor
finding that the order of the trial court was not arbitrarily of the defendant. It should not be abused as to cause
issued, dismissed the petition for lack of merit. unnecessary prejudice. It is the duty of the court before
issuing the writ to ensure that all the requisites of the law
However, on motion of the Bank, the respondent Court has been complied with. 5 
reconsidered its decision of November 29, 1979 and issued
the questioned resolution dated September 18, 1980, which Accordingly, the resolution of the respondent Court of
authorized the issuance of a writ of attachment. Appeals, now the Intermediate Appellate Court, dated
September 18, 1980, is hereby set aside. No costs.
Hence, the present recourse.
SO ORDERED.
We find the petition impressed with merit, The chief
purpose of the remedy of attachment is to secure a Concepcion, Jr., Guerrero, Abad Santos and De Castro, JJ.,
contingent lien on defendant’s property until plaintiff can, concur.
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. 1 

The grounds upon which attachment may issue are set forth
in Section 1, Rule 57 of the Rules of Court. But quite apart
from the grounds stated therein, it is further provided in
Section 3 of Rule 57 that "an order of attachment shall be
granted only when it is made to appear by the affidavit of
the applicant or some other person who personally knows
the facts, that . . . there is no other sufficient security for the
claim sought to be enforced by the action."cralaw
virtua1aw library

The reason for the rule prohibiting attachment where

indebtedness was already secured is to prevent the secured
 proved, though there is a suggestion in the evidence that
Ponciano may have been drinking.
THE UNITED STATES, plaintiffs-appellee, 
vs. After a careful review of the evidence we see no reason for
PONCIANO NAMIT, defendant-appellant. discrediting the testimony of the two eyewitnesses for the
prosecution. We find no material contradiction in their
statements made either at the trial of this case or at the time
Ramon Maza for appellant.
of the commission of the crime. The story told by the wife
Acting Attorney-General Paredes for appellee.
of the deceased Bonifacia Tubigon, appears to be a simple
and truthful narrative. The same may be said with regard to
  the testimony of Fernando Martinez. Both witness
apparently evidence a desire to tell what happened without
STREET, J.: exaggeration or distortion. Another witness for the
prosecution. Aurelio Sildo, testified that on the night in
question the accused admitted that he had the misfortune to
This appeal is brought to this Court to reverse a judgment strike Damiano Jordan.
of the Court of First Instance of the Province of Antique,
adjudging the defendant guilty of the crime of murder and
sentencing him to cadena perpetua, with the accessories At the trial the accused did not directly admit having struck
provided by law, and requiring him to indemnify the heirs the fatal blow to Damiano; but he claimed that on the night
of the deceased in the sum of P1,000 and to pay the costs. in question he was passing the place of this occurrence and
was there assaulted by some unknown person with the
stick. He says that the and the assailant struggled for the
It appears in evidence that between 6 and 7 o'clock in the possession of the stick and that finally he, Ponciano, kicked
evening of February 24, 1917, the deceased Damiano
his adversary, who fell down, whereupon Ponciano
Jordan, and a neighbor, one Fernando Martinez, were departed. We consider this story unlikely; and the judge as
talking with each other while standing in the street
he did, that the accused is the person who caused the death
immediately in front of Jordan's house in the municipality o of Damiano Jordan.
Sibalom, Province of Antique. While they were so engaged
in conversation they were approached by the accused,
Ponciano Namit. The latter was at the time apparently Although the complaint charges alevosia as a qualifying
entering upon a duty as guard for the round in the capacity circumstance in the commission of the crime, thus
of substitute for a son whose turn fell upon this night. elevating the offense to the degree of murder, and although
the judge of the trial court found that this element was
present in the commission of the offense, we are not
As Ponciano Namit came up he stopped and asked satisfied with his conclusion on this point. It is true the two
Fernando Martinez if he was on guard that night. Upon
principal witness testify that the blow was given after
receiving an affirmative reply, he asked Damiano Jordan if Damiano Jordan had turned his bask to the accused; but the
he too was on guard, and Damiano replied that he was not
blow was truck, evidently with great force, upon the left
as it was not his turn. Ponciano thereupon at once ordered frontal side of the head of Damiano, and it is manifest that
Damiano to go up into his house, and as Damiano did not
this could have been done only if the accused is a left-
instantly obey, Ponciano in a few moments repeated the handed person, supposing him to be standing behind his
command. Damiano in a few moments repeated the
victim. There is no evidence, however, that Ponciano
command. Damiano then replied that he was going and
Namit is left handed; and inasmuch as right handedness
suiting his actions to his words, turned to start for his
prevails among the great majority, it is to be presumed in
house. As he was turning, Ponciano struck him a blow on the absence of the evidence to the contrary, that the accused
the left frontal part of the head with a heavy stick.
is right-handed.

The end of this stick was supplied with a hatchet-shaped This circumstance raises in our mind a reasonable doubt as
object, possibly of metal, and the knob of this instrument
to whether the parties may not have been facing each other
crushed into the head of Damiano and penetrating into the when the blow was delivered. If such were the case, it
brain, there momentarily remained. Ponciano by giving the
would be improper to find that the offense was qualified
stick a jerk succeeded in freeing it and immediately left the by alevosia. It must be admitted that the attack was sudden
scene of the crime. When he pulled the stick out, Damiano
and unexpected to Damiano Jordan, and it would perhaps
fell to the ground. Damiano's wife who was sitting in the be possible to found upon this the conclusion that the attack
door of their house only a short distance away, saw what
was characterized by surprise in such sense as to
had happened and immediately ran down to her husband constitute alevosia. However, in considering a question of
and told Fernando to aid her in carrying him to the house,
this kind, every case must be judged by its particular facts;
which he did. The injured person lived for about six days and we find nothing in the evidence to show with certainty
and died as a result of the wound. It was shown by an
that the aggressor consciously adopted a mode of attack
autopsy performed on the body that a hole was made in the intended to facilitate the perpetration of a homicide without
skull about as large as a half of peso coin. No motive
risk to himself. a more reasonable, though still doubtful,
sufficient to account for this unjustifiable attack was
inference would possibly be that he did not in fact intend to ART 589. When from the record of a cause
kill Damiano at all. appear circumstances tending to establish the
guilt of a person, the judge shall require him to
In this connection it is worth while to note that Bonifacia give a bond sufficient to secure the pecuniary
Tubigon declares that immediately after the blow was truck liabilities which may be finally adjudged,
Ponciano Namit exclaimed I have long desired to strike ordering in the same decree the attachment of
some one and I have done so." This would seen to indicate, sufficient property to cover such liabilities,
in the absence of proof of other motive, that the accused should he fail to give bond.
was moved by a sudden desire to use his stick and that he
struck in obedience to this unreasoning impulse, without The amount of the bond shall be fixed in the
thinking of the conditions under which he was acting. Upon same decree and it shall not be less than one third
the whole we incline to the opinion that the fatal blow was of provable amount of the pecuniary liabilities.
the result of a casual encounter under conditions not
sufficiently defined to enable us to say that alevosia was We are of the opinion that this provisions and those related
certainly present in the case.1awph!l.net to it in the Spanish Code of Criminal Procedure were
abrogated by necessary implication upon the enactment of
The offense committed is, in our opinion, to be qualified as General Orders No. 58. It is true that section 107 of this law
homicide, under article 404 of the Penal Code , in the recognizes the existence of the civil liability connected with
estimation of which no generic circumstance either of an the commission of crime and reserves the privileges
aggravating or attenuating nature should be taken into previously secured by law to the person injured by the
consideration; and the proper penalty is reclusion commission of an offense to take part in the prosecution
temporal in its medium degree. The accused should and to recover damages. Nevertheless, we think that the
accordingly be sentence to 14 years 8 months and 1 commission of an offense to the procedure contained in the
day, reclusion temporal with the accessories prescribed in Spanish Code of Criminal Procedure relating to the
article 59 of the Penal Code. attachment of property and giving of bond.

Another feature of the case of some importance is Upon reading the entire section 107 of General Orders No.
presented in connection with an attachment levied upon the 58, it appears obvious that the right which was intended to
property of the accused to secure the satisfaction of the be saved by the reservation therein made was the right of
civil liability incident to the commission of the homicide. It the party injured to appear and to be heard in all stages of
appears that while the cause was pending in the Court of the case with reference to such liability and to obtain a
First Instance an attorney appeared in the capacity of judgment for the damages occasioned by the wrongful act,
private prosecutor, representing the widow of the deceased, as well as the further right to appeal from any decision of
and presented an affidavit showing that the accused was the court denying any legal right connected therewith.
selling his property in order to elude the payment of any
indemnity to which he would be liable in case of It is to be noted that while the "sumario" of Spanish
conviction. It was accordingly requested that an attachment criminal procedure is in many respects similar to the
should be issued against his property. an order was preliminary hearing before a committing magistrate
thereupon made by the court upon April 25, 1917, conducted pursuant to section 13 and 14 of General Orders
authorizing an attachment of property to the value of No. 58, there is nevertheless an important difference, which
P1,500 unless he should give bond to answer in that is that the "sumario" constitutes a preliminary stage in the
amount. The clerk of the court issued the order of criminal prosecution, and is not merely a step preparatory
attachment upon the same date, and three days later the tot he initiation of the proceedings. The evidence taken in
court rendered its decision finding the accused guilty and the "sumario" therefore, capable for being used in the
ordering him to indemnify the widow and children of the plenary stage of the prosecution and if ratification was not
deceased in the sum of P1,000. The attachment was not required, served as the basis of judgment. (Ley de 18 de
immediately levied; but after an appeal had been taken, the junio de 1870 — Law of June 18, 1870.) On the contrary,
sheriff, on November 28, 1917, levied the same upon five the proceedings in the preliminary hearing never constitute
parcels of land and a house belonging to the accused. It a basis for a subsequent judicial declaration of guilt. The
does not appear from the record in this case whether the "sumario" has been abrogated by the enactment of General
accused has ever given the bond necessary to procure the Orders No. 58 above referred to; and the ground expressed
dissolution of this attachment, although upon December 19, in article 589 of the Spanish Code of Criminal Procedure
1917, after the cause had been brought to this Court by for the attachments of the property of the accused therefore
appeal, an order was here entered authorizing the Court of no longer here exists.
First Instance to act in the latter of dissolving the
attachment, if bond should be given.
With the adoption of General Orders No. 58, there was
necessarily introduced into these Islands a system of
It is argued that the attachment granted in this case is criminal procedure embodying the principles recognized in
sustainable under article 589 of the Law of Criminal the system of criminal procedure generally in vogue in the
Procedure of Spain, which is to the following effect: United States; and any characteristics or rule of the former
system inconsistent with these principles must be held to
have been abrogated. Attachment in American law is a
purely statutory remedy. It does not exist unless expressly
given by statute and as it is an extraordinary and summary
remedy, it is unavailable except in those cases where the
statute expressly permits its issuance.

It remains to consider whether or not the attachment can be

sustained under the provisions of section 424, in connection
with subsection 5 of section 412 of Code of Civil
Procedure. 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 considered as an
application for an attachment under the provisions above
cited, in connection with section 426 for the same Code, the
affidavit was several respect defective. Disregarding these
informalities, however, we are of the opinion that the
remedy of attachment there provided is not available as an
aide 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 declared that the
procedure in all civil actions shall be in accordance with the
provisions of the 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 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 result that the attachment effected
under the order of the Court of First Instance dated April
25, 1917. must be considered to have been improvidently
granted. The same is hereby declared to be of no effect, by
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. The judgment of the trial court in
respect to the penalty imposed upon the accused, is
modified by subsisting 14 years 8 months and 1
day, reclusion temporal, with accessories prescribed in
article 59 of the Penal Code for so much thereof as imposes
the penalty of cadena perpetua, with the accessories
prescribed in article 54 of the same Code. As thus modified
the judgment of the lower court is affirmed, with costs
against the appellant. So ordered.

 
LUIS F. GENERAL, petitioner,  in the order, is suspended temporarily, pending action by
vs. the Government.
JOSE R. DE VENECIA, Judge of First Instance of
Camarines Sur, and PETRA VDA. DE RUEDAS, also But the case for petitioner is stronger when we reflect that
representing Ernesto, Armando and Gracia his promise is to pay P4,000 "within six months after peace
(minors), respondents. has been declared." It being a matter of contemporary
history that the peace treaty between the United States and
Cea, Blancaflor and Cea for petitioner. Japan has not even been drafted, and that no competent
Jose M. Peñas for respondents Ruedas. official has formally declared the advent of peace (see
No appearance for the respondent judge. Raquiza vs. Bardford, 75 Phil., 50), it is obvious that the
six-month period has not begun; and Luis F. General has at
BENGZON, J.: present and in June, 1946, no demandable duty to make
payment to plaintiffs, independently of the moratorium
directive.
Petition for certiorari to annul the order of the Court of
First Instance of Camarines Sur denying the motion to
dismiss the complaint, and to vacate the attachment issued, On the question of validity of the attachment, "the general
in civil case No. 364 therein entitled, "Ruedas vs. Luis F. rule is that, unless the statute expressly so provides, the
General." 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
That complaint was filed on June 4, 1946, to recover the is void." (7 C.J.S., p. 204.)
value of a promissory note, worded as follows:
It must be observed that under our rules governing the
For value received, I promise to pay Mr. matter the person seeking a preliminary attachment must
Gregorio Ruedas the amount of four thousand show that "a sufficient cause of action exists" and that the
pesos (P4,000), in Philippine currency within six amount due him is as much as the sum for which the order
(6) months after peace has been declared and of attachment is granted" (sec. 3, Rule 59). Inasmuch as the
government established in the Philippines. commitment of Luis F. General has not as yet become
demandable, there existed no cause of action against him,
Naga, Camarines Sur, September 25, 1944. and the complaint should have been dismissed and the
attachment lifted. (Orbeta vs. Sotto, 58 Phil., 505.)

(Sgd.) LUIS F. GENERAL And although it is the general principle that certiorari is not
available to correct judicial errors that could be
It prayed additionally for preliminary attachment of straightened out in an appeal, we have adopted the course
defendant's property, upon the allegation that the latter was that where an attachment has been wrongly levied the writ
about to dispose of his assets to defraud creditors. Two may be applied for, because the remedy by appeal is either
days later, the writ of attachment was issued upon the filing unavailable or inadequate. (Leung Ben vs. O'Brien, 38
of a suitable bond. Phil., 182; Director of Commerce and
Industry vs. Concepcion, 43 Phil., 384;
Orbeta vs. Sotto, supra.)
Having been served with summons, the defendant therein,
Luis F. General, submitted, on June 11, 1946, a motion
praying for dismissal of the complaint and dissolution of Wherefore, the writ of attachment is quashed and the
the attachment. He claimed it was premature, in view of the complaint is dismissed. Costs for petitioner. So ordered.
provisions of the debt moratorium orders of the President
of the Philippines (Executive Orders Nos. 25 and 32 of Moran, C.J., Paras, Feria, Pablo, Hilado, Padilla, and
1945). Denial of this motion and of the subsequent plea for Tuason, JJ., concur.
reconsideration, prompted the institution of this special Perfecto, J., concurs in the result.
civil action, which we find to be meritorious, for the reason
that the attachment was improvidently permitted, the debt
being within the terms of the decree of moratorium
(Executive Order No. 32).

It is our view that, upon objection by the debtor, no court

may now proceed to hear a complaint that seeks to compel
payment of a monetary obligation coming within the
purview of the moratorium. And the issuance of a writ of
attachment upon such complaint may not, of course, be
allowed. Such levy is necessarily one step in the
enforcement of the obligation, enforcement which, as stated
MERCEDES GRUENBERG and ALBERT interest and collection charges, patently
GRUENBERG, petitioners,  and clearly can no longer be paid or
vs. liquidated.
HONORABLE COURT OF APPEALS, HONORABLE
LINO L. AÑOVER and ELDA R. On March 1, 1974, petitioners filed
FLORES, respondents. their answer to the complaint.

Perlas, Joven & Associate Law Office for private Under date of February 7, 1976, private
respondent. respondent filed a 'Motion for Issuance
of Writ of Preliminary Attachment'
  against the properties of petitioners,
alleging, among others, that the latter
GUTIERREZ, JR., J.: are indebted to her in the principal
amount of P13,000.00, which,
according to her, she seeks to recover
This is a petition to review the decision of the Court of in Civil Case No. Q-18444.
Appeals, now Intermediate Appellate Court, which
affirmed the order for the issuance of a writ of preliminary
attachment, and other related orders of the then Court of On March 1, 1976, petitioners filed
First Instance of Rizal in Civil Case No. Q-18444. their opposition to the motion for the
issuance of writ of preliminary
attachment, alleging among others, that
The antecedent facts are summarized by the appellate court Civil Case No. Q-18444 is an action for
as follows: annulment of sale and recovery of the
house and lot mentioned therein, and
Petitioners are the defendants and not for recovery of sum of money. It is
private respondent is the plaintiff in contended that a writ of preliminary
Civil Case No. Q-18444, Court of First attachment is not the proper remedy for
Instance of Rizal, Branch XVII-B- the protection of the rights of the estate.
Quezon City, for annulment of sale, In the same opposition, petitioners
recovery of ownership and possession refuted the allegations of private
of the house and lot situated at No. 24 respondent in her motion that the
Scout Limbaga, Diliman, Quezon City, complaint in Civil Case No. Q-18444 is
the same, allegedly, having been sold in one for collection of a sum of money
fraud of creditors. allegedly contracted fraudulently by
petitioners.
Private respondent filed the complaint
in Civil Case No. Q18444, in her On March 26, 1976, respondent Judge
capacity as the administratrix of the issued an order, granting the motion of
intestate estate of the late William private respondent and issuing a writ of
Gruenberg. preliminary attachment against the
properties of petitioners, respondent
It is alleged in the complaint in Civil Judge stating that no opposition had
Case No. Q-18444 that the house and been filed to the motion.
lot in question, which were sold to
defendant Albert Gruenberg (one of the In the latter part of July, 1976,
petitioners), form part of the conjugal respondent Sheriff and/or his deputies
partnership of the Gruenberg spouses, served on petitioners and the managers
which must answer for the obligations of the Hollywood Theater, Palace
that deceased William Gruenberg might Theater and Illusion Theatre a writ of
have incurred during his lifetime in his preliminary attachment and notice of
capacity as manager and administrator garnishment against petitioners and
of the conjugal partnership; and that the personally in favor of respondent
sale of the house and lot before the Flores.
death of William Gruenberg, when at
that time two creditors had already filed It is alleged that the order of respondent
suits against him for collection of Judge was not received by petitioners'
unpaid obligations, and the latter had new counsel but upon being informed
unpaid obligation to plaintiff Elda R, by petitioners of the writ of preliminary
Flores (private respondent) in the attachment and notice of garnishment,
amount of P13,000.00, exclusive of petitioners'new counsel promptly went
 to the court of respondent Judge and ESTATE OF THE LATE WILLIAM
then and there he discovered that GRUENBERG, SR.;
petitioners' opposition to the motion
was not attached to the record, because III. THE COURT OF APPEALS
the same was forwarded to Branch ERRED IN RULING THAT
XVIII to which Civil Case No. Q- PETITIONERS CAN BE CITED FOR
18444 was originally assigned, CONTEMPT FOR THE ALLEGED
FAILURE TO COMPLY WITH THE
On July 30, 1976, petitioners filed (a) a NOTICE OF GARNISHMENT
motion for reconsideration of the order ADDRESSED TO THIRD PARTIES.
granting the motion for the issuance of
a writ of preliminary attachment, and The issues are interrelated and may be discussed together.
(b) a motion to recall the writ of They all focus on the proprietary of the writ of attachment
preliminary attachment and notice of and garnishment against the petitioners' properties issued
garnishment, on the ground that it is not by the trial court and affirmed by the appellate court.
true that petitioners did not oppose the
motion of private respondent, and that
there is no valid basis to grant the In her affidavit supporting the motion for a writ of
motion. preliminary attachment, the private respondent 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
On August 16, 1976, respondent Judge preliminary attachment may issue." Section 1 (d), Rule 57
issued an order, denying the motions of provides:
petitioners.
Grounds upon which attachment may
On October 28, 1976, respondent Judge issue.—A plaintiff or any proper party
issued an order, requiring petitioners to may, at the commencement of the
appear before his court to explain why action or at any time thereafter, have
they should not be punished for the property of the adverse party
contempt for denying or disobeying the attached as security for the satisfaction
lawful processes of the court. of any judgment that may be recovered
in the following cases:
The issuance of the "show cause" order prompted the
petitioners to file a petition for certiorari with writ of xxx xxx xxx
preliminary injunction in the Court of Appeals. The petition
was dismissed. Hence, the instant petition
(d) In an action against a party who has
been guilty of a fraud in contracting the
The issues raised to us are embodied in the petitioners' debt or incurring the obligation upon
assignments of errors as follows: which the action is brought, or in
concealing or disposing of the property
I. THE COURT OF APPEALS for the taking, detention or conversion
ERRED IN OVERLOOKING THE of which the action is brought.
FACT THAT WRIT OF
PRELIMINARY ATTACHMENT xxx xxx xxx
COULD ONLY BE GRANTED TO
SECURE THE SATISFACTION OF A
JUDGMENT IN A CASE IN WHICH There are various reasons why this petition should prosper.
SAID WRIT IS PRAYED FOR;
Private respondent Elda R. Flores, as a claimant for
II. THE COURT ERRED IN P13,000.00 against the estate of William Gruenberg, Sr.,
SUSTAINING THE ISSUANCE OF was appointed administratrix of the estate of the deceased.
THE WRIT OF PRELIMINARY In her capacity as administratrix, she filed Civil Case No.
ATTACHMENT FOR THE Q-18444 against the petitioners. This main case was for the
PERSONAL BENEFIT OF PRIVATE annulment of a deed of sale executed by the late William
RESPONDENT IN CIVIL CASE NO. Gruenberg, Sr., in favor of Albert Gruenberg and for the
Q-18444, NOTWITHSTANDING recovery of possession and ownership of the house and lot
THE FACT THAT SAID involved in that sale.
RESPONDENT INSTITUTED SAID
ACTION NOT IN HER PERSONAL The motion for a writ of preliminary attachment filed by
CAPACITY, BUT AS Flores, however, states:
ADMINISTRATRIX OF THE
 1. Defendants are indebted to plaintiff estate, Section 8 of Rule 86 calls for the appointment of a
in the amount of P13,000.00 exclusive special administrator to defend the estate against such
of accrued interest and collection claim.
charges, which plaintiff seeks to
recover in the instant action; and A court order which violates the Rules constitutes grave
abuse of discretion as it wrecks the orderly procedure
2. Defendants are guilty of fraud in prescribed for the settlement of claims against deceased
contracting the debt or incurring the persons designed to protect the interests of the creditors of
obligation due plaintiff in that they the decedent. (See Dy v. Enage, 70 SCRA 96). Allowing
conspired and confederated with each the private respondent in the annulment case to attach the
other as mother End son to defraud petitioners' properties for the benefit of her P13,000.00
other creditors one of whom is plaintiff, claim against the estate would give her an undue advantage
by simulating the sale of house and lot over other creditors against the estate,
situated at No. 24 Scout Limbaga
Street, Quezon City ... . Moreover, the P13,000.00 claim of the respondent cannot
be settled in the case for annulment of the deed of sale,
While the respondent filed the motion in her capacity as wherein the writ of attachment is sought. What she seeks to
administratrix of the Gruenberg estate, the motion for a writ be secured is not the judgment in the main case but a mere
of attachment and its supporting affidavit show that the claim against the estate which is still to be considered and
attachment was intended to secure only her P13,000.00 adjudicated by the court.
claim against the estate. Obviously, this cannot be done.
The rules on the issuance of a writ of attachment must be
A writ of attachment is a remedy ancillary to the principal construed strictly in favor of the defendant. The remedy of
proceeding. The well-entrenched principle is that: attachment is harsh, extraordinary, and summary in nature.
If all the requisites for the issuance of the writ are not
Attachment is a juridical institution present, the court which issues it acts in excess of its
which has for its purpose to secure the jurisdiction.
outcome of the trial, that is, the
satisfaction of the pecuniary obligation In Salas v. Adil (90 SCRA 121), we stated:
really contracted by a person or
believed to have been contracted by A preliminary attachment is a rigorous
him, either by virtue of a civil remedy, which exposes the debtor to
obligation emanating from contract or humiliation and annoyance, such it
from law, or by virtue of some crime or should not be abused as to cause
misdemeanor that he might have unnecessary prejudice. It is, therefore,
committed, and the writ issued, granted the duty of the court, before issuing the
it, is executed by attaching and safely writ, to ensure that all the requisites of
keeping all the movable property of the the law have been complied with;
defendant, or so much thereof as may otherwise the judge acts in excess of
be sufficient to satisfy the plaintiff's his jurisdiction and the writ so issued
demands ... . (Guzman v. Catolico, et shall be null and void. (Guzman v.
al., 65 Phil. 257). Catolico, 65 Phil. 257, 261).

The purpose behind the filing of the complaint was to xxx xxx xxx
recover a piece of property allegedly belonging to the
intestate estate of the deceased. Hence, any writ of
attachment necessary to secure the judgment must be Considering the gravity of the
related to the protection of the estate. The writ may not allegation that herein petitioners have
issue if only to protect the personal interests of the private removed or disposed of their properties
respondent as a creditor of that estate. or are about to do so with intent to
defraud their creditors, and further
considering that the affidavit in support
The records show that the private respondent's interest in of the preliminary attachment merely
the estate is to recover a debt based on a contract with the states such ground in general terms,
deceased Gruenberg, For this reason, she instituted the without specific allegations of
special proceedings for the settlement of the intestate estate circumstances to show the reason why
resulting to her appointment as administratrix. Under these plaintiffs believe that defendants are
circumstances, the private respondent's remedy to recover disposing of their properties in fraud of
the outstanding debt of the deceased is to follow the creditors, it was incumbent upon
procedure in Rule 86 on claims against an estate. As a respondent Judge to give notice to
matter of fact, if an administrator has a claim against an petitioners and to allow them to present
 their position at a hearing wherein no justification why the attachment should reach out to the
evidence is to be received. petitioners' interests in the Hollywood Theatre, the Palace
Theatre, and the Illusion Theatre. The petitioners also point
Following the principle of strict compliance with all out that there is no showing of any attempt on their part to
requisites, this Court has also ruled that "when the facts, or conceal or to dispose of the house and lot nor of any change
some of them, stated in the plaintiff's affidavit are shown in the title or condition of the property. Considering all the
by the defendant to be untrue, the writ may be considered foregoing, we find the writ of preliminary attachment to
as improperly or irregularly issued." (National Coconut have been improvidently issued.
Corporation V. Pecson, et al., 90 Phil. 809).
WHEREFORE, the petition is hereby GRANTED. The
The February 7, 1976 motion for issuance of a writ of decision of the former Court of Appeals is SET ASIDE.
preliminary attachment and the affidavit of preliminary The writ of preliminary attachment and the notice of
attachment are misleading. First, the private respondent garnishment issued in Civil Case No. Q-18444 are
states that the "defendants are indebted to plaintiff in the DISSOLVED. The other related orders issued in
amount of P13,000.00" exclusive of interests and collection connection with the writ of attachment are SET ASIDE.
charges. Then, she avers that the "defendants are guilty of
fraud in contracting the debt or incurring the obligation due SO ORDERED.
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 petitioners' failed to file an opposition thereto. It
turns out, however, that the petitioners filed a timely
opposition to the motion but it was filed in another branch
of the court where the case had earlier been assigned.
Nevertheless, despite this timely opposition, the motion for
reconsideration of the order for the issuance of a writ of
preliminary attachment, was summarily denied for lack of
merit.

We also note that the order which directed the issuance of a

writ of preliminary attachment merely recited the grounds
alleged in the private respondent's motion without any
specific details as to the supposed fraud committed by the
petitioners when they contracted the debt and the alleged
disposition or concealment by the petitioners of their
properties. The order of the trial court 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
the fact that the petitioners are not indebted to respondent
Flores. It was the late William Gruenberg who incurred the
alleged indebtedness and 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 in the main

case 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
G.R. No. L-35351 March 17, 1976 issue a TEMPORARY
RESTRAINING ORDER effective
ROGELIO DY, SY JIAN AND DY CHING immediately and until further orders
ENG, petitioners,  from this Court, and (b) to require both
vs. the petitioners and private respondents
THE HONORABLE JUDGE MANUEL LOPEZ within ten (10) days from notice hereof,
ENAGE AND HEIRS OF EMMANUEL O. to file such pleadings as may be
TOLENTINO, represented by MARIA DUGOS VDA. necessary so as to properly implead the
DE TOLENTINO, respondents. Court of First Instance of Cebu City
taking cognizance of Civil Case No. R-
13062. (Page 562, Record.)
Elias Q. Tan for petitioners.
Voluminous representations have been filed by the parties
Arturo M. de Castro & Soledad Cagampang-de Castro for relative to this resolution but none of them adequately
respondent Maria Dugos Vda. de Tolentino. amounts to any of the pleadings called for by the situation
and required by the resolution. And considering that the
Cataluña, Buñol & Yebes also for respondents. matters treated in said motion of February 10, 1973 are not
procedurally related to the petition in this case, the Court
  will not resolve the merits of said motion, without prejudice
to the private respondents filing the proper separate petition
so that issues may be regularly joined and resolved albeit
BARREDO, J.: the restraining order issued by the Court shall continue in
force until the court in which respondents might file their
Petition for "certiorari, prohibition and mandamus, with action acts one way or the other in the premises, but if no
preliminary injunction" asking the Court to declare null and such separate action is filed by respondents within ten (10)
void the orders of respondent judge of July 18, 1972 and days from notice hereof, the said restraining order shall be
July 25, 1972 in Civil Case No. 1251 of the Court of First deemed automatically lifted. In other words, this decision
Instance of Agusan del Norte and Butuan City and to enjoin will deal exclusively on the original and supplemental
said respondent from further taking cognizance of the case petitions herein.
except to dismiss the same by command of this Court,
which prayer was enlarged in a supplemental petition to It appears that on October 10, 1968, petitioners filed with
include the order of attachment of September 28, 1972 and respondent court Civil Case No. 1251 against one
the decision of September 20, 1972, and all implementing Emmanuel O. Tolentino, predecessor in interest of private
orders thereof, among the actuations sought to be annulled. respondents. Pertinently, the complaint alleged as follows:
Later, a second supplemental petition was filed to impugn
other subsequent orders of respondent judge to be
specifically referred to later in this decision. After issues FOR FIRST CAUSE OF ACTION
were joined, a special motion dated February 10, 1973 was
filed by private respondents praying that the Court of First 1 — That plaintiffs are of legal ages
Instance of Cebu, Branch XIV, be enjoined to dismiss Civil and residents of the municipality of
Case No. R-13062 therein filed by Atty. Elias Q. Tan, Cabadbaran, province of Agusan,
counsel of herein petitioners in the above-mentioned case Philippines and the defendant is
in Agusan del Norte, against said respondents, for damages, likewise of legal age and a resident of
and that the writ of preliminary attachment issued therein sgd municipality and province where
be quashed, and after comment thereon was filed by he may be served with summons.
petitioners, the Court issued the following' resolution on
May 4, 1973: 2 — That after the liberation plaintiffs
spouses Dy Ching Eng and Sy Jean
L-35351 (Rogelio Dy, et al. vs. Hon. resumed their general merchandise and
Manuel Lopez Enage, etc., et al.). — copra business in the municipality of
Considering the urgent motion of the Cabadbaran, province of Agusan,
respondents for the issuance of a continued their aforesaid general
temporary restraining order to enjoin merchandise business until the present
the Court of First Instance of Cebu time and closed their copra business in
from taking further proceedings in the year 1966, will their son, plaintiff
Civil Case No. R13062 during the Rogelio Dy engaged in the copra
pendency in this Court of respondents' business in said municipality and
motion to dismiss said civil case or for province beginning 1966 and continues
the issuance of injunction or restraining it until the present time.
order with quashal of preliminary
attachment, the Court Resolved: (a) to
3 —That the defendant who is the P16,000.00, thereby leaving an unpaid
younger brother of plaintiff Sy Jean is balance of P15,104.30, and despite
likewise engaged in the general earnest efforts exerted by plaintiffs
merchandise and copra business in said spouses towards a compromise and
municipality and province and during extra-judicial amicable settlement of
the period from 1960 or thereabouts said defendant's indebtedness, the same
until 1964 bought from plaintiffs Dy have failed and despite repeated
Ching Eng and Sy Jean copra on credit demands made by said plaintiffs upon
basis and the said plaintiffs Dy Ching the defendant to pay said unpaid
Eng and Sy Jian delivered on credit balance, the latter failed and refused
basis to the defendant on July 24, 1964, and still continues to do so without
288 sacks of copra weighing 11,679 valid and justifiable cause therefore,
kilos net at P48.00 per 100 kilos worth thereby committing breach of contract
P5,605-92; on July 26, 1964, 146 sacks in evident bad faith and fraudulently for
of copra weighing 5,749 kilos net at which defendant should be held liable
P48.00 per 100 kilos, worth P2,759.52; to said plaintiffs for actual damages in
on July 31, 1964, 144 sacks of copra the amount of P3,3562.03 until the
weighing 5,716 kilos net at P48.00 per present time and for moral damages in
100 kilos worth P2,858.00; on August the amount of P5,000.00
6, 1964, 343 sacks of copra weighing
14,187 kilos net at P48.00 per 100 kilos FOR SECOND CAUSE OF ACTION
worth P5,296.00; on August 14, 1964,
126 SACKS OF COPRA WEIGHING
5,296 KILOS net at P46.00 per 100 Plaintiffs respectfully allege:
kilos worth P5,296.00; on August 14,
1964, 75 sacks of copra weighing 2,867 1 — That the plaintiffs hereby
kilos net at P46.00 per 100 kilos worth reproduce and incorporate as part
P1,318.82; on August 20, 1964, 225 hereof the averments contained in
sacks of copra weighing 8,659 kilos net paragraphs 1, 2, 3, and 4 under the first
at P44.00 per 100 kilos worth cause of action hereof.
P3,809.96; and on August 27, 1964 303
sacks of copra wishing 12,514 Idlos net 2 — That in 1966 to 1967 defendant
at P44-00 per 100 kilos worth used to buy from plaintiff Rogelio Dy
P5,506.16, as shown by corresponding copra at most at P68.00 per kilo, but
Statements of deliveries, copies of considering that the current market
which are hereto attached, marked as price of copra at that time was much
annex "A", "B", "C", "D", "E", "P", higher than the price per kilo paid by
"G", and "H" and made integral parts the defendant for said plaintiffs copra,
hereof, valued in all at P31,104.30. the said plaintiff Rogelio Dy stopped in
1967 to sell his copra to the defendant.
4 — That the defendant made partial
payments for said plaintiffs' copra in 3 — That by reason of plaintiff Rogelio
checks drawn against the Philippine Dy's refused to continue selling his
Bank of Communications, Cebu copra to the defendant, the defendant
Branch, Cebu in the total sum of on or about November 22, 1967 after
P10,000.00, among which was check plaintiff Sy Jean had received from him
No. T-W253 dated November 13, 1967 the amount of P6,000.00 shown in the
for P2,000.00 which check could not be receipt, Annex 'J' sent for plaintiffs Sy
collected and cashed by plaintiffs Jean and Rogelio Dy to go his store at
spouse for the reason that defendant Cabadbaran, Agusan; that while
stopped payment of the same, n shown plaintiff Sy Jian was in the said store
on the face and reverse sides of said ahead of Rogelio Dy, the defendant
check No. T-445253, photostat copies scolded her on account of their failure
of which face and reverse sides are to sell copra to him; that when Sy Jean
hereto attached, marked as Annexes "I" explained that she could not interfere
and "A" and made integral parts hereof, and control her son Rogelio Dy in
and also in cash for P6,000.00 as connection with the management of his
shown by a "vale" dated November 18, business, the defendant threated to
1967 signed by plaintiff Sy Jean, copy cause bodily harm to her and sent for
of which is hereto attached as Annex plaintiff Rogelio Dy to go to his store;
"J" and made an integral part hereof, all that once the said plaintiff Rogelio Dy
which partial payments amounted to
was in defendant's store and saw his wounded feelings in the amount that
mother being treated by the defendant, the court may fix.
the defendant began to scold plaintiff
Rogelio Dy for not having continued to 7 — That despite earnest efforts
sell copra to him, threatened to kill him exerted by the plaintiffs towards a
and under threats and intimidation with compromise, the same have failed and
a pistol compelled without any lawful despite repeated demands made by
authority the said plaintiff Rogelio Dy plaintiff Rogelio Dy to cancel the
to sign a blank form on said date, the supposed contract of agency and to
printed recitals of which blank form desist from enforcing it in any manner,
tend to show that plaintiff Rogelio Dy the defendant refused to do so and
supposedly received from the defendant continues to threaten to to prosecute
on the date stated therein the amount of plaintiff Rogelio Dy for supposed
P16,000.00 in trust for the purpose of estafa for the purpose of harrassing,
buying copra with the supposed oppressing and humiliating the said
obligation of delivering to him the plaintiff Rogelio Dy in particular and
copra and or of returning the said his parents in general. (Pages 137-141,
amount, when in truth and in fact, the Record.)
said plaintiff Rogelio Dy never at all
prior to the date mentioned in said
defendants printed form received from In his answer, the defendant made specific denials and
the defendant the sum of P16,000.00 alleged affirmative defenses and in addition interposed
nor did said plaintiff Rogelio Dy ever counterclaims as follows:
act as supposed purchasing agent for
copra for the defendant; that by reason COMES NOW the defendant in the
of the threats and intimidation made by above-entitled case, thru counsel, and
the defendant to kill not only Sy Jean in answer to the complaint, to this
but also him, the plaintiff Rogelio Dy Honorable Court most respectfully
by reason of fear was compelled to alleges:
affix against his will his signature on
the said printed form. 1. That defendant admits the allegation
contained in paragraph 1 for the fust
4 — That the supposed contract of cause of action in the complaint.
agency prepared by the defendant
without the intervention, consent or 2. That defendant has no infomation as
authority of any one of herein to the truth of the allegations contained
plaintiffs, mentioned the sum of in paragraph 2 of the complaint (first
P16,000.00 which was the partial cause of action). But whether plaintiffs
payments made by the defendant for had license to engage in the copra
the said deliveries of copra belonging business or not the fact is that plaintiffs
to the plaintiffs spouses; that, as a were acting only as copra purchasing
matter of fact and in truth, after the agents for the defendant.
defendant had succeeded through
threats and intimidation to make
plaintiff Rogelio Dy sign the said 3. That defendant admits that he is
supposed contract of agency, the engaged in the general merchandise
defendant delivered to Sy Jean the and copra business in the municipality
receipt for P6,000.00 annex X hereof. of Cabadbaran and province of Agusan;
but specifically denies the information
that he is a younger brother of plaintiff
5 — That the said supposes contract of Sy Jean; the truth of the matter is Sy
agency is null and void, illegal and Jean was an adopted daughter of
invalid, is fraudulent and constitutes a defendant's father and coincidentally
falcification of a private document. when they happened to reside together
in Agusan they considered themselves
6 — That by reason of the unlawful, as brother and sister, and 0 they were
malicious, wrongful, and fraudulent known as such in the community of
acts of the defendant, the plaintiffs Agusan. Defendant further denies that
have suffered actual damages in the he had business relation on credit basis
amount of P16,000.00 and moral with plaintiffs' son. The truth being that
damages for mental anguish, serious all the plaintiffs were merely copra
anxiety, social humiliation and purchasing agents of the defendant.
And the defendant has no knowledge or special and affirmative defeses With
information to form a belief as to the respect to the receipt for P6,000.00
truth of the matter alleged in the marked in the complaint at Annex "J"
remaining Portion of paragraph 3 of the is admitted that it was returned to Sy
fust cause of action of the complaint, Jean together with another receipt for
and, therefore denies the same, and P10,000.00 after the receipt for
further denies under oath the P16,000.00 was signed by plaintiff
selfserving annexes attached to the Rogelio Dy who appeared to have in
complaint and marked as annexes "A", his ion the P16,000.00 and who was the
"B", "C", "D", "E", "F", "G", and "H" licensed copra dealer. And the truth of
which apparently are tally saheets for the matter further is hereinafter alleged
being manufactured documents and in the special and affirmative defenses.
inadmissible evidence.
9. That the allegations contained in
4. That the allegation contained in paragraph 5 am conclusions of law. But
paragraph 4 are hereby denied. The it is denied that the contract agency is
truth of the matter is hereinafter alleged null and void, illegal and invalid, much
in the special and affirmative defenses. less, fraudulent and constitutes a
falsification of private document. The
5. That the allegations contained in trust of the matter is that said contract
paragraph 5 are hereby denied. The of agency is legal and valid, not
truth of the matter is hereinafter alleged fraudulent nor falsification, it having
in the special and affirmative defenses, been executed in due course and for
and that further defendant is not value.
obligated in anyway to pay any amount
of actual damages, much less is 10. That the allegations contained in
defendant liable for moral damages. paragraph 6 of the second cause of
action are again conclusions of fact and
6. That Paragraph 1 of the second cause consclusions of law. But if plaintiffs
of action, being a mere reproduction of have suffered actual damages in the
the previous allegations, is also hereby amount of P16,000.00 and
denied and the allegations contained in undetermined moral damages plaintiffs
the previous paragraph i of this answer alone are responsible therefor and
are hereby reproduced and replead. defendant is not liable of the same.

7. That the allegations contained in 11. That the allegations contained in

paragraph 2 of the sand cause of action paragraph 7 of the second cause of
are hereby denied. The truth of the action are hereby denied. The truth of
matter being that in no time as far as the matter is that it was the defendant
defendants recollection is concerned who exerted earnest efforts to secure
the exagerated price of P68 per kilo of payment of plaintiffs' obligations, but
copra has ever been obtaining in despite such efforts exerted by
Agusan or elsewhere. And further it is defendant plaintiffs have remained
denied that defendant has ever adamant and entirely disregarded the
purchased copra from the plaintiff repeated request of the defendant, and
Rogelio Dy. The truth being that due to this refusal of the plaintiff
plaintiff Rogelio Dy has been a copra Rogelio Dy to pay his obligation to the
purchasing agent for the defendant. defendant the latter was compelled to
seek the intervention of the Office of
the Provincial Fiscal in order to legally
8. That the allegations contained in enforce the agency contract sometime
paragraphs 3 and 4 of the second cause in August 18, 1968. But until now no
of action of the complaint are hereby payment was effected by said plaintiff.
denied. It is specifically denied that And the truth of the matter further is
plaintiffs Sy Jean and Rogelio Dy were that in sinking the intervention of the
ever threatened of bodily harm much Provincial Fiscal of Agusan it was not
less threatening Rogelio Dy to be the purpose of defendant to harass,
killed. It is further specifically denied oppress and humiliate plaintiff Rogelio
that Rogelio Dy was compelled to sign Dy but merely in the legitimate
a blank form. The truth of the matter exercise of legal rights of the
further is hereinafter alleged in the defendant.
 12. That as to the allegations common pressed for payment of their total
to first and sand causes of action, outstanding account in the sum of
particularly paragraph 7 and 8 affecting P12,368.69 leaving the matter for
petition for injunction, said allegations future liquidation at their own request.
are untenable. because merits of the
criminal action involved are to be 18. That sometime in 1966 plaintiff Dy
determined by proper authorities vested Ching Eng transferred his copra
with powers and jurisdiction to act on business to his son Rogelio Dy who
the matter. If criminal action has merits eventually took over the business of his
and at least PRIMA FACIE evidence parents from that time on until now,
shown, the exercise of such power is although plaintiffs Dy Ching Eng and
vested with the Provincial Fiscal in this Sy Jean continued to help their son
particular case; and with respect to the Rogelio Dy in running the copra
civil action involved the same is business.
hereinafter incorporated in a
counterclaim. Both criminal and civil
action cannot be prevented by 19. That on two (2) occasions,
injunction. particularly November 13 and 17, 967
plaintiff Sy Jean came to defendant's
store and requested for advance amount
SPECIAL AND AFFIRMATIVEE of P10,000.00, and P6,000.00
DEFENSES respectively. She specifically requested
and so the defendant accommodated
defendant respectfully alleges: that the amounts be covered by checks
of P2,000.00 each to facilitate her and
13. That prior to August 26, 1964, Mr. her son Rogelio Dy's purchases of
and Mrs. Dy Ching Eng of Cabadbaran, copra as agent of defendant. The
Agusan had been copra purchasing November 13 checks were five (5) in
agents of the defendant, by virtue of number for the total amount of
which agency they were accorded by P10,000.00 and the November 17
the defendant cash advances. checks were three (3) in number for a
total of P6,000,00.
14. That the liquidation of cash
advances and value of copra delivered 20. That the above eight (8) checks
were effected at the end of every were covered by two (2) provincial
month. receipts or values, one dated November
13, 1967 and the other dated November
18, 1967. The latter value is now
15. That on August 26, 1964 a Annex "J" of the complaint.
liquidation of cash advances and value
of copra delivered was made, and
plaintiffs spouses Dy Ching Eng and Sy 21. That late in the afternoon of
Jean had an outstanding balance November 18, 1967 plaintiff Rogelio
payable to the defendant in the amount Dy came to the store and after
of P10,386.69. confirming the values of plaintiff Sy
Jean he prepared in his own
handwriting a cash advance receipt
16. That sometime on September 1, which is partly printed and partly
1964 a big fire occured in Cabadbaran, handwritten receipt for P16,000.00.
Agusan in which the spouses Dy Ching This is a requisite which had to be
Eng and Sy Jean suffered heavy losses. effected in view of the fat, that it was
plaintiff Rogelio Dy who was and still
17. That due to the losses suffered by is the licensed copra dealer
said spouses Dy Ching Eng and Sy
Jean both spouses were not required to 22. That after preparing the partly
liquidate immediately their account of printed and partly handwritten cash
P10,368.69, and on the contrary they advance receipt for P16,000.00, and
were further given Pl,000.00 on after the same was handed over by
September 3, 1964 covered by mere Rogelio Dy to the defendant and in turn
vales signed in chinese characters by defendant returned to Sy Jian thru
Sy Jean, and in order to further help Rogelio Dy two previous values signed
them rehabilitate themselves from the by Sy Jean.
fire losses both spouses were not
23. That during that period of time As
between November 13 up to and
including November 18, 1967 FIRST COUNTER-CLAIM
defendant noticed that there were
accumulations of the stock of copra in
the bodega of the plaintiffs, which Defendant respectfully alleges:
bodega incidentally is located just
across the street where defendant's 29. That for the sake of brevity
store is situated. defendant hereby reproduces and
repleads all the allegations contained in
24. That on the 19th of November 1967 the previous paragraphs of this answer
defendant came to Cebu and had only and special and affirmative defense.
returned to Cabadbaran on the 22nd
day of November 1967. 30. That defendant has ascertained that
out of the eight (8) checks at the rate of
25. That upon his return to Cabadbaran, P2,000.00 each, four (4) checks were
Agusan he noticed that the bodega of already cashed, particularly cheeks
plaintiffs was already empty. So, he Nos. 
went to confront Plaintiff Rogelio Dy T-445251, T-445255 and T-445269 or
and his mother Sy Jean why was it that a total amount of P8,000.00, and the
their bodega was empty. They replied other four (4) cheeks totalling
to the defendant that the copra was sold P8,000.00 were not effectively cashed
to a purchaser in Surigao because because payment of the same was
according to them said purchaser paid a accordingly stopped.
better price for the copra.
31. That the cash advance receipt of
26. That defendant told plaintiffs P16,000.00 is therefore reduced to only
Rogelio Dy and Sy Jean that at least P8,000.00 if and when the four (4)
they should have advised the defendant other checks shall be returned by the
because defendant was also willing to plaintiffs to the defendant.
pay an increased price. But both
plaintiffs answered that the matter is As
already closed and there was nothing
they could do about it. So, defendant SECOND COUNTER-CLAIM
asked for the return of his money. But
plaintiffs could not readily do it. So,
defendant wired the Philippine Bank of Defendant respectfully alleges:
Communications of Cebu City to stop
payment of the eight (8) checks above- 32. That for the sake of brevity
mentioned, but unfortunately four (4) defendant hereby reproduces and
checks were already cashed and repleads all the allegations contained in
stopping paying was only effected on the previous paragraphs of this answer
the other four (4) checks. and special and affirmative defenses,
including the allegations contained in
27. That in view of the fact that no the first counterclaim.
payment of the amount was made,
much less a delivery of copra effected . 33. That plaintiffs are indebted to the
despite the lapse of considerable length defendant in the total sum of
of time and notwithstanding repeated P12,368.69 as acknowledged by Sy
demands, defendant was compelled to Jean, particularly in her cash advance
seek the intervention of the Provincial of August 26, 1964 and values of
Fiscal, but still no payment was September 2 and September 3, 1964
effected until now. respectively, which account totalling
P12,868.69 remains unpaid and
28. That the filing of the present case is outstanding until now, despite repeated
a plain harassment and a clear demands subsequently made by the
retaliation for what defendant has done defendant for its payment.
in seeking the intervention of the
Provincial Fiscal. As
 THIRD COUNTER-CLAIM substitution as heris of defendant Tolentino, filed a so-
called "Jurisdictional Motion for Dismissal of Plaintiffs'
Defendant respectfully alleges: 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
34. That for the sake of brevity cournterclaims. The motin was based on the ground that
defendant hereby reproduces and inasmuch as the plaintiff's case was a claimfor money,
repleads all the allegations contained in under Section 21 of Rule 3, it should be dismissed as an
the previous paragraphs of this answer action and filed as a claim inthe special proceedings for the
and special and affirmative defenses settlement of the estate of the deceased defendant.
including the allegations contained in Petitioners opposed said motion contending that the second
the first and second counterclaims. cause of action was for damages and that their defense to
the counterclaims of the defendant was in the complaint
35. That defendant is a businessman of and citing the case of Javier vs. Araneta, L-4369, August
good standing in the Municipality of 31, 1953, in support of their opposition. On January 5,
Cabadbaran and Province of Agusan 1972, respondent judge denied the motion to dismiss thus:
with quite a considerable gross
negotiations every year. "For not being well-founded, the motion filed by Atty.
Vicente Jayme, counsel for the defendants, dated Decembr
36. That defendant also enjoys good 13, 1971 based onthe grounds threin stated (See: pp. 470-
standing in the community of 471, Recods) is hreby ordered DENIED.
Cabadbaran, Agusan having been
President since 1966 and he is still SO ORDERED." (Page 9, Record.)
President of the Cabadbaran Lions
Club until now.
Threeafter, the court porceeded with the trial and on May 4
1972 ordered the admission of the documentary evidence of
37. That defendant has been maligned defendants listed inthe order of even date, and upon
by the plaintiffs by 'bringing this manifestationof plaintiffs that they have rebuttal evidence
clearly unfounded civil action against to present, set the case for hearing for the purpose of
him in gross and bad faith, and as a receiving the same, but instead of agreeing to thedats
consequence defendant suffered actual porposed by them: July 11, 12 and 13, 1972, the court, in
losses in his business and also suffered its order of May 22, 1972, set the reception of said
moral damages, and in view of the fact evidence on July 3, 1972, only to change this later or on
that plaintiffs have acted in gross bad June 28, 1972, to July 5, 1972 for fear that July 3, 1972
faith and evident malice in filing the might be declared a public holiday, and still later to July
complaint they should be made to pay 25, 1972 might be declared a public holiday, and still later
actual, moral and exemplary damages to July 25, 1972 upon motion of plaintiffs' counsel.
in such amount as to this Honorable
court may determine in the exercise of
its sound discretion. In the meanwhile, on June 27, 1972, plaintiffs filed the
following motion, which they set for hearing on July 3,
1972, albeit no hearing appears to have beenheld onsaid
38. That plaintiffs, by maliciously date:
filing the instant complaint against the
defendant, have compelled the latter,
for the protection of his interest, to "COME NOW the plaintiffs, thorugh counsels, and to this
incur litigation expenses, and engage Honorable Court respectully allege:
the services of undersigned counsel
with whom he has agrhe time the 1. That the reception of plaintiffs' rebuttal evidence inthe
orders of attachment complained of above-entitled case has been set for July 3rd, 1972, at 8:30
were issued, respondent court acted A.M.
with grave abuse of discretion, and the
writs issued thereunder and all 2. That as defendant Emmanuel O. Tolentino died before
subsequent proceedings related thereto completion of plaintiffs' cross-examination and before
must consequently be as they are finality of judgment on plaintiffs' respective money claims
hereby set aside. against him, and as the substituted defendants have filed
jurisdictional motion for dismissal of this case, the ;laintiffs
On November 14, 1971, the defendant Tolentino died. This hreby withdreaw their opposition to said jurisdictional
was before he had completed the formal presentation of his motion by reason of the fact that, as pointed out therein,
evidence in support of his counterclaims. Whereupon, Atty. this Honorable Court is divested of jurisdiction to
Vicentey Jayme for the respondents, after their proper continuetaking cognizance of plaintiffs' money claim and
Vicente Jayme for the respondents, after their proper
said money claim should be filed with the proper probate MOTION FOR DISMISSAL OF PLAINTIFFS'
court. COMPLAINT' dated December 29, 1971.

3. That in the interest of justice and in order not to render 5. That an order dated January 5, 1972 was issued by this
judgment on said money claim null and void for lack of Honorable Court denying our motion.
jurisdiction, the plaintiffs desire to present completely
competent, relevant and material evidence before the 6. That in the meantime and in due course continuation of
proper probate court to substantiate their aforesaid money the trial was held and the formal offer in evidence of all the
claims and for this reason they are constrained to move this exhibits of the defendants was effected under date of
Honorable Court to dismiss provisionally this case to move February 19, 1972, which exhibits were admited by the
this Honorable Court to dismiss provisionally this case Court inits order of May 4, 1972.
without prejudice of refiling same with the proper probate
court and of reproducing therein the evidence and
presenting rebuttal evidence according as the nature of 7. That as it is the case of the defendants is completed with
defendants' evidence may demand. their counterclaim duly substantiated.

4. That in view of the foregoing considerations, the 8. That the counterclaim is in itself an independent action,
plaintiffs hereby manifest that they no longer will present not subject to suspension or dismissal because it survives
rebuttal evidence resrving same to be adduced instead in the deceased Don Emmanuel O. Tolentino.
the proper probate court.
9. That as a matter of fact is is now deemed submitted to
WHEREFORE, this Honorable Court is most respectfully the decision of the Honorable Court without any strings
prayed to dismiss provisionally the above-entitled case attached to said counterclaim.
without prejudice of refiing same with the proper probate
court and of presenting and reproducing therein plaintiffs' WHEREFORE, in reiteration, this Honorable Court is most
evidence for final determination and decision by said respectfully prayed to grant the motion to dismiss plaintiffs'
probate court." complaint, and to declare the case of the defendants as far
as their counterclaim is concerned, submitted for the
On Juy 13, 1972, defendants filed the following: decisionof this Honorable Court." (Pp. 12-13, Recod.)

DEFENDANTS COUNTER-MANIDFESTATION AND And on July 18, 1972, the court issued the following order:
OPPOSITION TO THE MOTION DATED JUNE 27, 1972
"For lack of merit, the manifestation and motion filed by
  Atty. Cipriano C. Alvizo, Sr. for the plaintiffs (See: pp.
543-544, Records), and the counter-manifestation and
opposition filed by Atty. Vicente Jayme for the defendants
COME the defendants in the above-entitled case, thru the (See: pp. 547-548 Records) are hereby ordered DENIED.
undersigned counsel, and to this Honorable Court most
respectfully manifest and submit an opposition to the
dismissal of defendants' counterclaim on the following ASprayed of (for) by Atty. Alvizo, Sr., set this case for the
grounds: reception of the rebuttal and surrebuttal evidence on July
25, 1972 from 8:30 A.M. to P.M. with due notice to all
counsel." (Page 14, Record.)
1. That copy of plaintiffs' Manifestation and Motion dated
June 27, 1972 appears to have been mailed from Butuan
City on June 28, 1972, and received by us after July 3, A motion dated July 23, 1972 for reconsideration of thir
1972. order was filed by plaintiffs but on July 25, 1972, what
happened is narrated in the order of the court of said date as
follows:
2. That as far back as December 13, 1971 we have
submitted to this Honorable Court a pleading entitled
"JURISDICTIONAL MOTION FOR DISMISSAL OF "When this case was called for the reception of plaintiffs'
PLAINTIFFS' COMPLAINT (PRIVILEGED AND rebuttal evidence for the second time at exactly 11:23 A.M.
URGENT)'. today, Atty. Cipriano C. Alvizo, Sr., counsel for the
plaintiffs, together with all the plaintiffs themeslves, failed
to appear in court despite due notice to them in open court
3. What our grounds therein alleged are hereto replead and the first time this case was called at 8:30 A.M., and in spite
reproduced IN TOTO. of the two personal notices given to said Atty. Alvizo, Sr.,
who was by then withinthe sala of Branch 1 of this court
4. That said motionhas beenopposed by the plaintiffs under sitting, whre no sessions were yet had, first by Court Proces
a pleaing entitled 'OPPOSITION TO JURISDICTIONAL Server Rodrigo T. Macion and second, by CIC Raymundo
C. Morgadez minutes before the second call as above said.
The reception of plantiffs reguttal evidence was previously concerned, without prejudice to its being filed as a money
set by the court, upon previous prayer of plaintiffs, thru claim in special proceedings for the settlement of the estate
counsel, in their Manifestaion and Motion dated May 15, of the deceased Emmanuel O. Tolentino. Respondent court
1972 (See: p. 537, Records), on July 3, 1972 in anorder is further ordered to proceed with the trial of respondents'
dated May 22, 1972 (See: p. 541, Records). Later, counter-claims by allowing the petitioners to present their
plaintiffs, thru counsel, prayed the court again in their evidence in defense thereto, after which another decision
Urgent Ex Parte Motion dated June 30, 1972 — should be rendered as the facts and the law may warrant.

'to reset for July 25, 1972 the hearing of this case.' (See: p. The incident of contempt shall be continued upon
545, Records.) appropriate motion of the interested parties. With respect to
the matter of alleged irregular and illegal attachment
Again plaintiffs' above said motion was granted by the secured by Atty. Elias Q. Tan from the Court of First
court as prayed for by them in an Order dated July 18, 1972 Instance of Cebu, the Court rules that it should be made the
resetting the reception of plaintiffs' rebuttal evidence today, subject of a separate action, albeit the restraining order
July 25, 1972 from 8:30 A.M. to 7:00 P.M., with due notice issued by this Court on May 4, 1973 is hereby maintained
to said Atty. Cipriano C. Alvizo, Sr. by personal service on until such appropriate action is filed, in which event, the
July 22, 1972 (See: p. 550, Records). court taking cognizance thereof may act as it may deem
proper in regard to said restraining order which was issued
only to maintain the status quo, for the purpose of avoiding
First call of the case was had Atty. Alvizo, Sr. appeared and that the controversy between the parties should be more
presented plaintiffs' Urgent Motion for Reconsideratio complicated in the instant proceeding.
dated July 23, 1972 but only filed today 25 minutes before
the first call. The court intimated to said Atty. Alvizo, Sr.
that it could not entertain the said motion on grounds which Costs against respondents.
the court would give in an Order to be issued later and
insisted on plaintiffs' presentationof their promised rebuttal
evidence. The court, however, in fairness to plaintifs who
were absent in court, gave said Atty. Alvizo, Sr. until 11:00
A.M. to present his rebuttal witnesses. The the second call
came at exactly 11:23 A.M. as above said and what
happened was what was already narrated by the court at the
opening of this Order.

By reason of all the foregoing, it is the sense of the court

that plaintiffs have elected to waive their right to present
rebuttal evidence, prompting the cort to consider, as it
hereby HOLDS that this case is now considered
reglementarily submitted fo rdecisonon the merits. There
being no rebuttal evidence to sur-rebt, a Atty. Lydio J.
Cataluna, counsel for the defendants, presented no
objection to the foregoing.

Plaintiffs' Urgent Motion for Reconsideration filed only

today, 25, minutes before 8:30 A.M. (See: p. 553, Recods)
when this case was caled for the reception of their promised
rebuttall evidence as prayed for them thru said Atty.
Alvizo, Sr. as above said (See: pp. 553-555, Records), is
hreby ordered, for bieng unreglementary and dilatory in
nature andtiming, DENIED, pursuant to Section 4, Rule 15
of the Revised Rules of Court." (Pp. 18-20, Record.)

On July 29, 1972, plaintiffs

PREMISES CONSIDERED, judgment is hereby rendered

granting the instant petition. The trial court's decision of
September 20, 1972 as well as its orders of July 18 and 25,
1972, together with all its orders of preliminary attachment
against the properties of the petitioners are hereby set aside
and rendered without force and effect. Respondent court is
enjoined to dismiss the subject case before it (Civil Case
No. 1251) in so far as petitioners' first cause of action is
 Section 2, Rule 5, of the Rules of Court provides:

If any of the defendants does not reside and is not

found in the Philippines, and the action effects
the personal status of the plaintiff, or any
property of the defendant located in the
Philippines, the action may be commenced and
tried in the province where the plaintiff resides or
the property, or any portion thereof, is situated or
found.

The Philippine leading cases in which this Rule, or its

counterpart in the former Code of Civil Procedure, section
377 and 395, were cited and applied, are Banco Español-
Filipino vs. Palanca, 37 Phil. 921, and Slade Perkins vs.
Dizon, 40 Off. Gaz., [3d Suppl.], No. 7, p. 216. The gist of
this Court's ruling in these cases, in so far as it is relevant to
the present issues, is given in I Moran's Comments on the
Rules of Court, 2d Ed., 105:

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
ROMAN MABANAG, plaintiff-appellant,  appears in court. But, when the action affects the
vs. personal status of the plaintiff residing in the
JOSEPH M. GALLEMORE, defendant-appellee. Philippines, or is intended to seize or dispose of
any property, real or personal, of the defendant,
Santiago Catane for appellant. located in the Philippines, it may be validly tried
No appearance for appellee. by the Philippine courts, for then, they have
jurisdiction over the res, i.e., the personal status
TUASON, J.: 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
This case, here on appeal from an order dismissal by the cases may be laid in the province where the
Court of First Instance of Occidental Misamis, raises the plaintiff whose personal status is in question
question of the court's jurisdiction. More specifically, the resides, or where the property of the defendant or
question is whether the action is in personam or one in rem. a part thereof involved in the litigation is located.
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- Literally this Court said:
resident.
Jurisdiction over the property which is the subject
The purpose of the action is to recover P735.18, an amount of litigation may result either from a seizure of
said to have been paid by the plaintiff to the defendant for the property under legal process, whereby it is
two parcels of land whose sale was afterward annulled. The brought into the actual custody of the law, or it
defendant is said to be residing in Los Angeles, California, may result from the institution of legal
U. S. A. He has no property in the Philippine except an proceedings wherein, under special provisions of
alleged debt owing him by a resident of the municipality of law, the power of the court over the property is
Occidental Misamis. This debt, upon petition of the recognized and made effective. In the latter case
plaintiff, after the filing of the complaint and before the suit the property, though at all times within the
was dismissed, was attached to the extent of plaintiff's potential power of the court, may never be taken
claim for the payment of which the action was brought. But into actual custody at all. An illustration of the
the attachment was dissolved in the same order dismissing jurisdiction acquired by actual seizure is found in
the case. attachment proceedings, where the property is
seized at the beginning of the action, or some
subsequent stage of its progress, and held to
It was Atty. Valeriano S. Kaamino who has amicus abide the final event of the litigation. An
curiæ filed the motion to dismiss and to set aside the illustration of what we term potential jurisdiction
attachment. There is no appearance before this Court to over the res, is found in the proceeding to register
oppose the appeal.
 the title of land under our system for the confers jurisdiction on the court in an otherwise personal
registration of land. Here the court, without action, appears in two well known and authoritative works:
taking actual physical control over the property
assumes, at the instance of some person claiming The main action in an attachment or garnishment
to be owner, to exercise a jurisdiction in rem over suit is in rem until jurisdiction of the defendant is
the property and to adjudicate the title in favor of secured. Thereafter, it is in personam and also in
the petitioner against all the world. (Banco rem, unless jurisdiction of the res is lost as by
Español-Filipino vs. Palanca, supra, 927-928.). dissolution of the attachment. If jurisdiction of
the defendant is acquired but jurisdiction of the
In an ordinary attachment proceeding, if the res is lost, it is then purely in personam. . . a
defendant is not personally served, the proceeding against property without jurisdiction
preliminary seizure is to be considered necessary of the person of the defendant is in substance a
in order to confer jurisdiction upon the court. In proceeding in rem; and where there is jurisdiction
this case the lien on the property is acquired by of the defendant, but the proceedings against the
the seizure; and the purpose of the proceeding is property continues, that proceedings is none the
to subject the property to that lien. If a lien less necessarily in rem, although in form there is
already exists, whether created by mortgage, but a single proceeding. (4 Am. Jur., 556-557.)
contract, or statute, the preliminary seizure is not
necessary; and the court proceeds to enforce such As the remedy is administered in some states, the
lien in the manner provided by law precisely as theory of an attachment, whether it is by process
though the property had been seized upon against or to subject the property or effects of a
attachment. (Roller vs. Holly, 176 U.S., 398, 405; resident or non-resident of the state, is that it
44 Law. ed., 520.) It results that the mere partakes essentially of the nature and character of
circumstance that in an attachment the property the proceeding in personam and not of a
may be seized at the inception of the proceedings, proceeding in rem. And if the defendant appears
while in the foreclosure suit it is not taken into the action proceeds in accordance with the
legal custody until the time comes for the sale, practice governing proceedings in personam. But
does not materially affect the fundamental were the defendant fails to appear in the action,
principle involved in both cases, which is that the the proceeding is to be considered as one in the
court is here exercising a jurisdiction over the nature of a proceeding in rem. And where the
property in a proceeding directed essentially in court acts directly on the property, the title
rem. (Id., 929-930.). thereof being charged by the court without the
intervention of the party, the proceeding
When, however, the action relates to property unquestionably is one in rem in the fullest
located in the Philippines, the Philippine courts meaning of the term.
may validly try the case, upon the principles that
a "State, through its tribunals, may subject In attachment proceedings against a non-resident
property situated within its limit owned by non- defendant where personal service on him is
residents to the payment of the demand of its own lacking, it is elementary that the court must
citizens against them; and the exercise of this obtain jurisdiction of the property of the
jurisdiction in no respect infringes upon the defendant. If no steps have been taken to acquire
sovereignty of the State were the owners are jurisdiction of the defendant's person, and he has
domiciled. Every State owes protection to its own not appeared and answered or otherwise
citizens; and, when non-residents deal with them, submitted himself to the jurisdiction of the court,
it is a legitimate and just exercise of authority to the court is without jurisdiction to render
hold any appropriate any property owned by such judgment until there has been a lawful seizure of
non-residents to satisfy the claims of its citizens. property owned by him within the jurisdiction of
It is in virtue of the State's jurisdiction over the the court. (2 R. C. L., 800-804.).
property of the non-resident situated within its
limits that its tribunals can inquire into the non-
resident's obligations to its own citizens, and the Tested by the foregoing decisions and authorities, the Court
inquiry can then be carried only to the extent has acquired jurisdiction of the case at bar by virtue of the
necessary to control disposition of the property. If attachment of the defendant's credit. Those authorities and
the non-resident has no property in the State, decisions, so plain and comprehensive as to make any
there is nothing upon which the tribunals can discussion unnecessary, are in agreement that though no
adjudicate. (Slade Perkins vs. Dizon, 40 Off. Gaz. jurisdiction is obtained over the debtor's person, the case
[3d Supplement], No. 7, p. 216.). may proceed to judgment if there is property in the custody
of the court that can be applied to its satisfaction.
A fuller statement of the principle whereunder attachment
or garnishment of property of a non-resident defendant 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.

Paras, Feria, Pablo, Perfecto, Bengzon, Briones and

Padilla, JJ., concur.
G.R. No. 102448 August 5, 1992 Subsequently, the spouses Evangelista filed motion to set
aside the order dated August 24, 1990 and discharge the
RICARDO CUARTERO, petitioner,  writ of preliminary attachment for having been irregularly
vs. and improperly issued. On October 4, 1990, the lower court
COURT OF APPEALS, ROBERTO EVANGELISTA denied the motion for lack of merit.
and FELICIA EVANGELISTA, respondents.
Private respondents, then, filed a special civil action
Abesamis, Medialdea & Abesamis for petitioner. for certiorari with the Court of Appeals questioning the
orders of the lower court dated August 24, 1990 and
October 4, 1990 with a prayer for a restraining order or writ
Eufemio Law Offices for private respondent. of preliminary injunction to enjoin the judge from taking
further proceedings below.
 
In a Resolution dated October 31, 1990, the Court of
GUTIERREZ, JR., J.: Appeals resolved not to grant the prayer for restraining
order or writ of preliminary injunction, there being no clear
This is a petition for review on certiorari seeking to annul showing that the spouses Evangelista were entitled thereto.
the decision of the Court of Appeals promulgated on June
27, 1991 as well as the subsequent resolution dated October On June 27, 1991, the Court of Appeals granted the petition
22, 1991 denying the motion for reconsideration in CA- for certiorari and rendered the questioned decision. The
G.R. SP No. 23199 entitled "Spouses Roberto and Felicia motion for reconsideration filed by herein petitioner
Evangelista v. Honorable Cezar C. Peralejo, Presiding Cuartero was denied for lack of merit in a resolution dated
Judge Regional Trial Court of Quezon City, Branch 98, and October 22, 1991. Hence, the present recourse to this
Ricardo Cuartero," which nullified the orders of the trial Court.
court dated August 24, 1990 and October 4, 1990 and
cancelled the writ of preliminary attachment issued on The petitioner raises the following assignment of errors:
September 19, 1990.
I
Following are the series of events giving rise to the present
controversy.
THE COURT OF APPEALS ERRED
AND COMMITTED A GRAVE
On August 20, 1990, petitioner Ricardo Cuartero filed a ABUSE OF DISCRETION,
complaint before the Regional Trial Court of Quezon City AMOUNTING TO LACK OF
against the private respondents, Evangelista spouses, for a JURISDICTION WHEN IT HELD
sum of money plus damages with a prayer for the issuance THAT THE REGIONAL TRIAL
of a writ of preliminary attachment. The complaint was COURT DID NOT ACQUIRE
docketed as Civil Case No. Q-90-6471. JURISDICTION OVER
RESPONDENT SPOUSES.
On August 24, 1990, the lower court issued an order
granting ex-parte the petitioner's prayer for the issuance of II
a writ of preliminary attachment.
THE COURT OF APPEALS ERRED
On September 19, 1990, the writ of preliminary attachment AND ACTED WITH GRAVE ABUSE
was issued pursuant to the trial court's order dated August OF DISCRETION WHEN IT HELD
24, 1990. On the same day, the summons for the spouses THAT THE REGIONAL TRIAL
Evangelista was likewise prepared. COURT COULD NOT VALIDLY
ISSUE THE SUBJECT WRIT OF
The following day, that is, on September 20, 1990, a copy PRELIMINARY ATTACHMENT
of the writ of preliminary attachment, the order dated WHICH IS AN ANCILLARY
August 24, 1990, the summons and the complaint were all REMEDY. (Rollo, p. 13)
simultaneously served upon the private respondents at their
residence. Immediately thereafter, Deputy Sheriff Ernesto The Court of Appeals' decision is grounded on its finding
L. Sula levied, attached and pulled out the properties in that the trial court did not acquire any jurisdiction over the
compliance with the court's directive to attach all the person of the defendants (private respondents herein). It
properties of private respondents not exempt from declared that:
execution, or so much thereof as may be sufficient to
satisfy the petitioner's principal claim in the amount of
P2,171,794.91. . . . the want of jurisdiction of the trial
court to proceed in the main case as
well as the ancillary remedy of
 attachment is quite clear. It is not clarified the matter but apparently another ruling is
disputed that neither service of necessary.
summons with a copy of the complaint
nor voluntary appearance of petitioners A writ of preliminary attachment is defined as a provisional
was had in this case before the trial remedy issued upon order of the court where an action is
court issued the assailed order dated pending to be levied upon the property or properties of the
August 24, 1990, as well as the writ of defendant therein, the same to be held thereafter by the
preliminary attachment dated sheriff as security for the satisfaction of whatever judgment
September 19, 1990. This is reversible might be secured in said action by the attaching creditor
error and must be corrected against the defendant (Adlawan v. Tomol, 184 SCRA 31
on certiorari. (Rollo, p. 24) [1990] citing Virata v. Aquino, 53 SCRA 30-31 [1973]).

The appellate tribunal relied on the case of Sievert v. Court Under section 3, Rule 57 of the Rules of Court, the only
of Appeals, 168 SCRA 692 (1988) in arriving at the requisites for the issuance of the writ are the affidavit and
foregoing conclusion. It stated that: bond of the applicant. As has been expressly ruled in BF
Homes, Inc. v. Court of Appeals, 190 SCRA 262 (1990),
Valid service of summons and a copy citing Mindanao Savings and Loan Association, Inc. v.
of the complaint vest jurisdiction in the Court of Appeals, 172 SCRA 480 (1989), no notice to the
court over the defendant both for the adverse party or hearing of the application is required
purpose of the main case and for inasmuch as the time which the hearing will take could be
purposes of the ancillary remedy of enough to enable the defendant to abscond or dispose of his
attachment and a court which has not property before a writ of attachment issues. In such a case,
acquired jurisdiction over the person of a hearing would render nugatory the purpose of this
defendant, cannot bind the defendant provisional remedy. The ruling remains good law. There is,
whether in the main case or in any thus, no merit in the private respondents' claim of violation
ancillary proceeding such as attachment of their constitutionally guaranteed right to due process.
proceedings (Sievert v. Court of
Appeals, 168 SCRA 692). (Rollo, p. The writ of preliminary attachment can be applied for and
24) granted at the commencement of the action or at any time
thereafter (Section 1, Rule 57, Rules of Court). In Davao
The private respondents, in their comment, adopted and Light and Power, Co., Inc. v. Court of Appeals, supra, the
reiterated the aforementioned ruling of the Court of phrase "at the commencement of the action" is interpreted
Appeals. They added that aside from the want of as referring to the date of the filing of the complaint which
jurisdiction, no proper ground also existed for the issuance is a time before summons is served on the defendant or
of the writ of preliminary attachment. They stress that the even before summons issues. The Court added that —
fraud in contracting the debt or incurring the obligation
upon which the action is brought which comprises a ground . . . after an action is properly
for attachment must have already been intended at the commenced — by filing of the
inception of the contract. According to them, there was no complaint and the payment of all
intent to defraud the petitioner when the postdated checks requisite docket and other fees — the
were issued inasmuch as the latter was aware that the same plaintiff may apply and obtain a writ of
were not yet funded and that they were issued only for preliminary attachment upon the
purposes of creating an evidence to prove a pre-existing fulfillment of the pertinent requisites
obligation. laid down by law, and that he may do
so at any time, either before or after
Another point which the private respondents raised in their service of summons on the defendant.
comment is the alleged violation of their constitutionally And this, indeed, has been the
guaranteed right to due process when the writ was issued immemorial practice sanctioned by the
without notice and hearing. courts: for the plaintiff or other proper
party to incorporate the application for
In the later case of Davao Light and Power Co., Inc. v. attachment in the complaint or other
Court of Appeals, G.R. No. 93262, November 29, 1991, we appropriate pleading (counter-claim,
had occasion to deal with certain misconceptions which cross-claim, third-party-claim) and for
may have arisen from our Sievert ruling. The question the Trial Court to issue the writ ex-
which was resolved in the Davao Light case is whether or parte at the commencement of the
not a writ of preliminary attachment may issue ex- action if it finds the application
parte against a defendant before the court acquires otherwise sufficient in form and
jurisdiction over the latter's person by service of summons substance.
or his voluntary submission to the court's authority. The
Court answered in the affirmative. This should have The Court also pointed out that:
 . . . It is incorrect to theorize that after It is appropriate to reiterate this Court's exposition in
an action or proceeding has been the Davao Light and Power case cited earlier, to wit:
commenced and jurisdiction over the
person of the plaintiff has been vested . . . writs of attachment may properly
in the Court, but before acquisition of issue ex-parte provided that the Court
jurisdiction over the person of the is satisfied that the relevant requisites
defendant (either by service of therefore have been fulfilled by the
summons or his voluntary submission applicant, although it may, in its
to the Court's authority), nothing can discretion, require prior hearing on the
be validly done by the plaintiff or the application with notice to the
Court. It is wrong to assume that the defendant, but that levy on property
validity of acts done during the period pursuant to the writ thus issued may not
should be dependent on, or held in be validly effected unless preceded, or
suspension until, the actual obtention of contemporaneously accompanied by
jurisdiction over the defendants person. service on the defendant of summons, a
The obtention by the court of copy of the complaint (and of the
jurisdiction over the person of the appointment of guardian ad litem, if
defendant is one thing; quite another is any), the application for attachment (if
the acquisition of jurisdiction over the not incorporated in but submitted
person of the plaintiff or over the separately from the complaint), the
subject matter or nature of the action, order of attachment, and the plaintiff's
or the res or object thereof. attachment bond.

It is clear from our pronouncements that a writ of The question as to whether a proper ground existed for the
preliminary attachment may issue even before summons is issuance of the writ is a question of fact the determination
served upon the defendant. However, we have likewise of which can only be had in appropriate proceedings
ruled that the writ cannot bind and affect the defendant. conducted for the purpose (Peroxide Philippines
However, we have likewise ruled that the writ cannot bind Corporation V. Court of Appeals, 199 SCRA 882 [1991]).
and affect the defendant until jurisdiction over his person is It must be noted that the spouses Evangelista's motion to
eventually obtained. Therefore, it is required that when the discharge the writ of preliminary attachment was denied by
proper officer commences implementation of the writ of the lower court for lack of merit. There is no showing that
attachment, service of summons should be simultaneously there was an abuse of discretion on the part of the lower
made. court in denying the motion.

It must be emphasized that the grant of the provisional Moreover, an attachment may not be dissolved by a
remedy of attachment practically involves three stages: showing of its irregular or improper issuance if it is upon a
first, the court issues the order granting the application; ground which is at the same time the applicant's cause of
second, the writ of attachment issues pursuant to the order action in the main case since an anomalous situation would
granting the writ; and third, the writ is implemented. For result if the issues of the main case would be ventilated and
the initial two stages, it is not necessary that jurisdiction resolved in a mere hearing of a motion (Davao Light and
over the person of the defendant should first be obtained. Power Co., Inc. v. Court of Appeals, supra, The
However, once the implementation commences, it is Consolidated Bank and Trust Corp. (Solidbank) v. Court of
required that the court must have acquired jurisdiction over Appeals, 197 SCRA 663 [1991]).
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 In the present case, one of the allegations in petitioner's
the defendant. complaint below is that the defendant spouses induced the
plaintiff to grant the loan by issuing postdated checks to
cover the installment payments and a separate set of
In Sievert v. Court of Appeals, supra, cited by the Court of postdated cheeks for payment of the stipulated interest
Appeals in its questioned decision, the writ of attachment (Annex "B"). The issue of fraud, then, is clearly within the
issued ex-parte was struck down because when the writ of competence of the lower court in the main action.
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. 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
The circumstances in Sievert are different from those in the attachment issued by Hon. Cezar C. Peralejo, Presiding
case at bar. When the writ of attachment was served on the Judge of Branch 98, Regional Trial Court of Quezon City
spouses Evangelista, the summons and copy of the against spouses Evangelista are hereby REINSTATED. No
complaint were also simultaneously served. pronouncement as to costs.
.R. No. L-46009 May 14, 1979 occupants of Lots Nos. 2 and 3 have direct access to
Bonifacio Drive, a National Highway, hence, Lot No. 5 is
RICARDO T. SALAS and MARIA SALAS, petitioners,  neither needed nor required for the egress or ingress of the
vs. occupants thereof; and that private respondents, as a matter
HON. MIDPANTAO L. ADIL, as Judge of Branch II, of fact, since 1964 had excluded and separated completely
Court of First Instance of Iloilo, ROSITA BEDRO and their property (Lots Nos. 2 and 3) from Lot No. 5 by
BENITA YU, respondents. building a concrete wall on the boundary thereon without
providing any gate as entrance or exit towards Lot No. 5;
and that private respondents have no personality to question
Castro Law Office for petitioners. the validity of the deed of sale over Lot No. 5 since they
were not parties to the same and the sale was duly approved
Tirso Espelete and Fortunato A. Padilla for private by the probate court.
respondents.
In a motion dated May 12, 1977, private respondents filed a
  Motion for Attachment, alleging, among others, that the
case was "for annulment of a deed of sale and recovery of
ANTONIO, J.: 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
Certiorari to nullify the Order of Attachment of May 13, case.
1977, as well as the Writ of Attachment dated May 16,
1977, issued by respondent Judge in Civil Case No. 10770
of the Court of First Instance of Iloilo, entitled "Rosita On May 13, 1977, respondent Judge issued ex-parte a Writ
Bedro and Benita Yu v. Spouses Ricardo T. Salas and of Attachment "against the properties of the defendants
Maria Salas, et al. particularly Lots Nos. 1 and 4 of Psc-2157 less the building
standing thereon upon the plaintiffs filing a bond in the
amount of P200,000.00 subject to the approval of this
On September 10, 1976, respondents Rosita Bedro and Court." After a surety bond in the amount of P200,000.00,
Benita Yu filed the afore-mentioned civil action with the executed on May 11, 1977 by the Central Surety and
Court of First Instance of Iloilo against herein petitioners Insurance Company as surety was filed, the writ itself was
Ricardo T. Salas and Maria Salas, the Philippine issued by respondent Judge on May 16, 1977, directing the
Commercial & Industrial Bank, in its capacity as Sheriff to attach the properties above-mentioned. On May
Administrator of the Testate Estate of the deceased Charles 17, 1977, the Deputy Sheriff of Iloilo levied upon the
Newton Hodges, and Avelina A. Magno, in her capacity as aforesaid properties of petitioners.
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 Contending that respondent Judge gravely abused his
Spouses Ricardo T. Salas and Maria Salas and for damages. discretion in issuing the said Writ of Attachment,
The action for annulment was predicated upon the petitioners filed the present petition.
averment that Lot No. 5, being a subdivision road, is intend
for public use and cannot be sold or disposed of by the In certiorari proceedings, the cardinal rule is that the court
Hodges Estate. The claim for damages was based on the must be given the opportunity to correct itself, Thus, for the
assertion that after defendant spouses purchased Lots Nos. special civil action of certiorari to prosper, there must be no
2 and 3, they also purchased Lot No. 5 and thereafter appeal nor any plain, speedy and adequate remedy in the
"erected wooden posts, laid and plastered at the door of the ordinary course of law. Petitioners, therefore, must exhaust
house on Lot No. 3, with braces of hardwood, lumber and all available remedies in the lower court before filing a
plywood nailed to the post", thereby preventing Rosita petition for certiorari, otherwise the petition shall be held to
Bedro and Benita Yu from using the road on the afore- be premature.
mentioned lot, Lot No. 5, and that as a result of such
obstruction, private respondents Rosita Bedro and Benita In the instant case, it appears that petitioners have adequate
Yu sustained actual damages in the amount of P114,000.00, remedy under the law. They could have filed an application
plus the sum of Pl,000.00 as damages daily from June 30, with the court a quo for the discharge of the attachment for
1976 due to the stoppage in the construction of their improper or irregular issuance under section 13, Rule 57, of
commercial buildings on Lot No. 3, and moral damages in the Revised Rules of Court, which provides the following
the amount of P200,000.00.
SEC. 13. Discharge of attachment for
In their answer to the complaint, the Salas spouses, after improper or irregular issuance. — The
specifically denying the material allegations in the party whose property has been attached
complaint, stated that Lot No. 5 had been registered in the may also, at any time either before or
name of the C. N. Hodges as their exclusive private after the release of the attached
property and was never subjected to any servitude or property, or before any attachment shall
easement of right of way in favor of any person; that any have been actually levied, upon
 reasonable notice to the attaching of attachment (Order of March 11,
creditor, apply to the judge who Salas 1960, Annex F)
vs. Adil granted the order, or to the
judge of the court in which the action is But reversing himself again, he set
pending, for an order to discharge the aside his order of March 11, 1960
attachment on the ground that the same (Annex K, dated March 29, 1960). This
was improperly or irregularly issued. If he did apparently on Abaya's
the motion be made on affidavits on the contention that petitioner was about to
part of the party whose property has remove or dispose of his property in
been attached, but not otherwise, the order to defraud his creditors, as
attaching creditor may oppose the same examples of which disposals he pointed
by counter-affidavits or other evidence to the alleged sale of the horses and of
in addition to that on which the petitioner's office furniture. ... These
attachment was made. After hearing, averments of fraudulent disposals were
the judge shall order the discharge of controverted by petitioner who ...
the attachment if it appears that it was reiterated the defenses against
improperly or irregularly issued and the preliminary attachment which he had
defect is not cured forthwith. previously enumerated in his petition to
discharge the two orders of attachment.
Considering that petitioners have not availed of this Thus the question of fraudulent
remedy, the instant petition is premature. disposal was put in issue; and
respondent Judge, before issuing the
We deem it necessary, however, for the guidance of pre attachment anew, should have
respondent Court and of the parties, to stress herein the given the parties opportunity to prove
nature of attachment as an extraordinary provisional their respective claims or, at the very
remedy. least should have provided petitioner
with the chance to show that he had not
been disposing of his property in fraud
A preliminary attachment is a rigorous remedy, which of creditors. (citing National Coconut
exposes the debtor to humiliation and annoyance, such it Corporation v. Pecson L-4296, Feb.
should not be abused as to cause unnecessary prejudice. It 25, 1952, Villongco v. Panlilio, 6214,
is, therefore, the duty of the court, before issuing the writ, Nov. 20, 1953).
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
In Carpio v. Macadaeg, 2 this Court said: said that "(a)ll in all due process would seem to require that
both parties further ventilate their respective contentions in
Respondent Judge should not have a hearing that could indeed reveal the truth. Fairness would
issued the two writs of preliminary be served thereby, the demand of reason satisfied."
attachment (Annexes C and C-1) on
Abaya's simple allegation that the Considering the gravity of the allegation that herein
petitioner was about to dispose of his petitioners have removed or disposed of their properties or
property, thereby leaving no security are about to do so with intent to defraud their creditors, and
for the satisfaction of any judgment. further considering that the affidavit in support of the pre
Mere removal or disposal of property, attachment merely states such ground in general terms,
by itself, is not ground for issuance of without specific allegations of lances to show the reason
preliminary attachment, why plaintiffs believe that defendants are disposing of their
notwithstanding absence of any properties in fraud of creditors, it was incumbent upon
security for the satisfaction of any respondent Judge to give notice to petitioners and to allow
judgment against the defendant. The wherein evidence is them to present their position at a to be
removal or disposal, to justify received. Moreover, it appears from the records that private
preliminary attachment, must have respondents are claiming unliquidated damages, including
been made with intent to defraud moral damages, from petitioners. The authorities agree that
defendant's creditors. the writ of attachment is not available 'm a suit for damages
where the amount claimed is contingent or unliquidated.
Respondent Judge in fact corrected
himself. Acting on petitioner's motion We think, however, that a rule
to discharge attachment and apparently sufficient for the determination of this
believing the correctness of the grounds case has been suggested and acted
alleged therein, he set aside the orders upon, and that the remedy does not
 exist where unliquidated damages were
demanded. ... In Warwick v. Chase, 23
Md 161, it is said: 'It is necessary that
the standard for ascertaining the
amount of damages claimed should not
only appear, but that it should be fixed
and certain, and in no degree dependent
on facts either speculative or
Uncertain ... The general rule is, that
unliquidated damages, ... cannot be
recovered by attachment, unless the
contract affords a certain measure or
standard for ascertaining the amount of
the damages ... 4

Further.

The statute authorizing the issuance of

the writ of garnishment and that
relating to the issuance of the writ of
attachment ... have not been construed
as authorizing the writs to be issued
when the plaintiff's suit is technically
an action for debt. Neither of the writs
may be issued when the suit is for
damages for tort, but they may be
issued when the plaintiff's claim arises
out of contract either express or
implied, and the demand is liquidated,
that is, the amount of the claim is not
contingent, is capable of being
definitely ascertained by the usual
means of evidence, and does not rest in
the discretion of the jury. 5
G.R. No. 55272 April 10, 1989
WHEREFORE, the instant petition is hereby DENIED, in
order to enable petitioners to move before respondent Court
for the discharge of the attachment on the ground of its JARDINE-MANILA FINANCE, INC., petitioner, 
improper and irregular issuance, pursuant to section 13, vs.
Rule 57, of the Revised Rules of Court, and for the COURT OF APPEALS, IMPACT CORPORATION,
aforesaid Court to act thereon in accordance with the RICARDO DE LEON and EDUARDO DE
foregoing. LEON, respondents.

Angara, Abello, Concepcion, Regala & Cruz for petitioner.

Ramon Quisumbing, Jr. & Associates for private

respondents.

FERNAN, C.J.:

This is a petition for review on certiorari seeking to reverse

and set aside: (a) the August 29, 1980 decision of the Court
of Appeals 1 in Special Proceedings CA-G.R. No. SP-
09972-R entitled "Impact Corporation, et al. v. Hon.
Buenaventura Guerrero, etc., et al." annulling the order
and the writ of attachment issued by the Court of First
Instance of Rizal in Civil Case No. 34617 entitled
"Jardine-Manila Finance, Inc. v. Impact Corporation, et
al." 2 and (b) the Resolution dated October 7, 1980 denying their refusal to
herein petitioners motion for reconsideration. 3 remit the same to
plaintiff although
On September 28, 1979, petitioner Jardine-Manila Finance, the issuers of the
Inc. (JARDINE) filed a complaint in the then Court of First receivables
Instance (CFI) of Rizal, docketed as Civil Case No. 34617, assigned to plaintiff
against private respondents Impact Corporation (IMPACT), had already paid to
Ricardo de Leon and Eduardo de Leon, to collect various defendant
sums of money allegedly due from therein defendant corporation their
IMPACT under a credit accomodation by way of a obligations on said
discounting line agreement. 4 Herein private respondents receivables to the
Ricardo de Leon and Eduardo de Leon were included as latter.
defendants by virtue of their undertaking covered by a
Surety Agreement under which they bound themselves C. Defendants
jointly and severally with defendant IMPACT to pay herein Ricardo de Leon
petitioner all of IMPACT's obligations under the aforesaid and Eduardo de
agreement. 5 Leon who are
likewise officers of
It was alleged that in April and May 1979, IMPACT defendant
assigned its receivables to JARDINE on the condition that corporation in order
IMPACT was to collect them on their due dates from their to elicit plaintiffs
issuers and remit the collected amounts to JARDINE and/or approval to enter
repurchase the assigned receivables; 6 but despite the fact into said deeds of
that IMPACT had collected the amounts due on said assignment with
receivables, it failed or refused to turn over the amounts so defendant
collected to JARDINE. corporation,
executed the
aforesaid surety
JARDINE thus demanded payment of P 1,000,212.64, the agreement (Annex
total amount due under said various deeds of assignment, L), likewise, with
plus interest of P 16,614.64 as of September 6, 1979 and 25 reservation in their
% of the aforesaid amount as attorney's fees, exemplary minds not to honor
damages and other expenses of litigation. their obligations
under the same as
Likewise contained in said complaint is petitioner's what they actually
application for a writ of preliminary attachment against did when they
private respondents. The allegations in support of said refused to pay the
petition for a writ of preliminary attachment are quoted in obligations of
full: defendant
corporation to
Special Allegations for Preliminary plaintiff pursuant to
Attachment the provisions of
said surety
agreement. (Annex
A. The foregoing L)
allegations are
hereby repleaded
and made integral D. Defendant
parts hereof. corporation,
Ricardo de Leon
and Eduardo de
B. The defendant Leon have no
corporation at the visible other
time of the sufficient security
execution of the for the claim
aforesaid deeds of sought to be
assignment had enforced by this
reservation not to action of
remit to plaintiff plaintiff other than
the proceeds of the their real and
receivables personal properties
assigned to plaintiff which are located
as confirmed by
 in Metro Manila JARDINE opposed the motion arguing that the mental
and in the province reservation of defendants at the time of the execution of the
of Rizal, Province deeds of assignment constituted fraud; that such fraud was
of Nueva Ecija or further confirmed by the fact that defendants actually failed
elsewhere. to remit the proceeds of the collection of receivables
(Emphasis assigned by them; that defendants failed to disclose to the
supplied) plaintiff the fact that they had already collected the
receivables assigned by them; that the amounts collected by
E. Plaintiffs action defendant corporation were received by defendants in trust
against defendant for plaintiff and defendant corporation appropriated for
corporation is itself said collection. 10
based upon
documents and On November 7, 1979, the trial court denied defendant's
therefrom a motion to annul the writ of preliminary attachment.
sufficient cause of Thereupon, defendant Impact Corporation went to the
action exists. appellate court on a petition for certiorari seeking to annul
said writ. 11
F. Plaintiff is
willing to post a The findings of the Court of Appeals are as follows:
bond in an amount
to be fixed by the To our mind there is no question that
Honorable Court, the allegations of the complaint proper
not exceeding which were repleaded and made
plaintiffs claim integral part of the application for
which will be preliminary attachment (paragraph A)
conditioned to the made out a case of conversion or
effect that plaintiff misappropriation of property held in
will pay all the trust which is the subject of the
costs which may be complaint for the allegations stated that
adjudged to the IMPACT had assigned to JARDINE
adverse party and certain receivables with the
all damages which understanding that it was to collect the
they may sustain by same from the issuers of said
reason of receivables and deliver the amounts
attachment, if the collected to JARDINE, but in spite of
Honorable Court the fact that IMPACT had actually
should finally collected said amounts, it failed to turn
adjudge that the over said receivables to JARDINE.
applicant plaintiff There was, therefore, in the allegations
is not entitled of said complaint true conversion of the
thereto.7 amounts received by defendant in trust
for plaintiff. Defendants in their motion
On the basis of the foregoing allegations, the lower court to discharge the attachment and the
granted JARDINE's petition for the issuance of a writ of memorandum filed by them in support
preliminary attachment on October 16, 1979. 8 of said motion had in effect, admitted
the conversion of the amounts collected
On October 19, 1979, therein defendants filed a motion to by defendant IMPACT, but justified the
set aside the writ of preliminary attachment. They also use of said amounts to meet its
submitted to the court a quo a memorandum in support of operational expenses to prevent a
their motion to dissolve the attachment contending that the complete shutdown of its operations.
grounds alleged by the plaintiff in its application for a writ
of attachment are not among the grounds specified under While we find that the grounds alleged
Section 1 of Rule 57; that the defendants have other by plaintiff, the herein private
sufficient security; that there was no affidavit of merit to respondent, to support its application
support the application for attachment as required by for preliminary attachment are among
Section 3 of Rule 57 and that the verification of the those enumerated in Section 1 of Rule
complaint was defective as it did not state that the amount 57 as grounds upon which an
due to the plaintiff above all legal set-ups or counterclaims attachment may be issued, we are
is as much as the sum for which the order is sought. 9 constrained nonetheless to rule against
the regularity or legality of the
attachment issued by respondent Court
 because there was no allegation made nonetheless it alleged that it presented ultimate and specific
by plaintiff in its application for the facts, first-in showing that there is indeed no other
issuance of a writ of attachment to the sufficient security for the claim sought to be enforced as
effect 'that there is no sufficient shown in paragraph D of the Complaint earlier quoted; and
security for the claim sought to be second-while it did not specifically state that the sum due is
enforced, by the action, and the amount above all legal counterclaims, such conclusion of fact is no
due to the applicant or the value of the longer necessary in the face of actual proof in the answer
property on the basis of which is which did not carry any counterclaim. In fine, petitioner
entitled to recover, is as much as the stresses that mere forms must not be given more weight
sum for which the order is granted than substance. 14
above all legal counterclaims, a
requirement for the granting of an order In excusing the deficiencies of its application for a writ of
of attachment under Section 3 of Rule preliminary attachment, petitioner relies heavily on the case
57. 12 of De Borja v. Platon, 15 where this Court sustained the
writ of attachment issued by the lower court in favor of the
Thus, on August 29, 1980, the Court of Appeals annulled defendants based on the counterclaim of the latter despite
the assailed writ of attachment for having been issued the lack of allegations in the affidavit attached to the
improperly and irregularly, the dispositive portion of which petition for the issuance of the writ of attachment that the
reads: amount due the counterclaim was as much as the sum for
which the order is granted above all legal counterclaims.
IN VIEW OF THE FOREGOING, the
petition to annul the order and the writ It will be noted however, that the trial court found that the
of attachment issued by respondent counterclaim of the defendants exceeded the claims of the
Court is hereby GRANTED and plaintiff. Thus, this Court held that "as the trial court had
judgment is rendered declaring said before it the evidence adduced by both sides, the petition
order and writ of attachment null and for a writ of preliminary attachment having been filed four
void for having been issued improperly years after the trial court had begun, we presume that the
and regularly. The restraining order lower court having in mind such evidence, ordered the
issued by this Court on November 9, attachment accordingly." 16
1979 restraining respondents from
enforcing the writ of attachment issued In sharp contrast, in the case at bar, where the records
by respondent Judge on October 16, undeniably reveal that: (1) the complaint was filed on
1979 is hereby made PERMANENT. September 28, 1979; 17 (2) the writ of preliminary
With costs against private attachment was issued on October 16, 1979; 18 (3) the
respondents. 13 motion to annul preliminary attachment dated October 19,
1979 was filed on the same day; 19 (4) the answer of
Hence this recourse. defendant IMPACT dated October 30, 1979 20 was
received by the RTC Pasig only on November 5,
Reduced to bare essentials, the records show that in the 1979, 21 it is evident that the questioned writ was issued ex
exercise of its discretion, the lower court found justification parte; and at a time when the Court a quo had yet no basis
in the issuance of the attachment. On the other hand, the for concluding that the amount due to petitioner is as much
Court of Appeals while in accord with the lower court that as the sum for which the order is granted above all legal
a sufficient cause of action exists for petitioner and that the counterclaims.
ground for its application for attachment is one of those
mentioned in Section 1, Rule 57 of the Rules of Court, It is therefore, readily apparent that the conclusions in
found the issuance of the attachment irregular or illegal in the De Borja case cannot be applied to the case at bar. In
the absence of the following allegations in the application fact even petitioner's plea for liberality as it vigorously
for attachment: (1) that "there is no sufficient security for invokes the doctrine on said case which refused "to
the claim sought to be enforced by the action; and (2) that sanction that formalism and that technicality which are
the amount due to the applicant or the value of the property discountenanced by the modern laws of procedure" is an
on the basis of which he is entitled to recover, is as much as obvious misreading of the ruling of this Court which states:
the sum for which the order is granted above all legal
counterclaims." On the first point, we believe a writ of
preliminary attachment may be issued
Ultimately, the issue therefore, is whether or not non- in favor of a defendant who sets up a
compliance with the formal requirements invalidate the counterclaim. For the purpose of the
writ of attachment. protection afforded by such attachment,
it is immaterial whether the defendants
On both counts, petitioner admits not having used the exact Borja and wife simply presented a
words of the Rules in making the requisite allegations, but counterclaim or brought a separate civil
 action against Jose de Borja, plaintiff in amount due to the applicant is as much as the sum for
the previous case and petitioner herein. which the order is granted above all legal counterclaims."
To lay down a subtle distinction would
be to sanction that formalism and that More specifically, it has been held that the failure to allege
technicality which are discountenanced in the affidavit the requisites prescribed for the issuance of
by the modern laws of procedure for the writ of preliminary attachment, renders the writ of
the sake of speedy and substantial preliminary attachment issued against the property of the
justice. . . . 22 defendant fatally defective, and the judge issuing it is
deemed to have acted in excess of his jurisdiction. 26 In
as a liberal approach to the required allegations in the fact, in such cases, the defect cannot even be cured by
application for a writ of preliminary attachment when what amendment. 27
this Court actually allowed was the presentation of a
counterclaim by the defendant instead of a separate civil Since the attachment is a harsh and rigorous remedy which
action in compliance with one of the basic requirements for exposes the debtor to humiliation and annoyance, the rule
the issuance of said writ. authorizing its issuance must be strictly construed in favor
of defendant. It is the duty of the court before issuing the
The authority to issue an attachment, like the jurisdiction of writ to ensure that all the requisites of the law have been
the court over such proceedings rests on express statutory complied with. 28 Otherwise, a judge acquires no
provisions and unless there is authority in the statute, there jurisdiction to issue the writ.
is no power to issue the writ, and such authority as the
statute confers must be strictly construed.23 In fact, The general rule is that the affidavit is the foundation of the
"(E)ven where liberal construction is the rule, the statute or writ, and if none be filed or one be filed which wholly fails
the right to attachment thereby granted may not be to set out some facts required by law to be stated therein,
extended by judicial interpretation beyond the meaning there is no jurisdiction and the proceedings are null and
conveyed by the words of the statute." 24 Petitioner's void. Thus, while not unmindful of the fact that the
application for a writ of preliminary attachment must property seized under the writ and brought into court is
therefore be scrutinized and assessed by the requisites and what the court finally exercises jurisdiction over, the court
conditions specifically prescribed by law for the issuance of cannot subscribe to the proposition that the steps pointed
such writ. out by statutes to obtain such writ are inconsequential, and
in no sense jurisdictional. 29
Section 3, Rule 57 of the Revised Rules of Court governs
the issuance of a writ of attachment, to wit: Considering that petitioner's application for the subject writ
of preliminary attachment did not fully comply with the
Sec. 3. Affidavit and bond required.-An requisites prescribed by law, said writ is, as it is hereby
order of attachment shall be granted declared null and void and of no effect whatsoever.
only when it is made to appear by the
affidavit of the applicant or some other This conclusion renders a discussion of petitioner's other
person who personally knows of the argument unnecessary.
facts, that a sufficient cause of action
exists, that the case is one of those
mentioned in section 1 hereof, that WHEREFORE, the decision of the Court of Appeals dated
there is no sufficient security for the August 29, 1980 is hereby AFFIRMED. Costs against
claim sought to be enforced by the petitioner.
action, and that the amount due to
applicant or the value of the property SO ORDERED.
the possession of which he is entitled to
recover is as much as the sum for Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.
which the order is granted above all
legal counterclaims.
 
The stringent conditions for the issuance of the writ have
been echoed in all subsequent cases, even as late as K.O.
Glass Construction Co. Inc. vs. Valenzuela, 25 wherein the
writ of preliminary attachment issued was annulled and set
aside on the findings that while the plaintiff "may have
stated in his affidavit that a sufficient cause of action exists
against the defendant Kenneth O. Glass, he did not state
therein that the case is one of those mentioned in Section 1
hereof; that there is no other sufficient security for the
claim sought to be enforced by the action; and that the
LA GRANJA, INC., petitioner,  the facts, that a sufficient cause of action exists,
vs. and that the case is one of those mentioned in
FELIX SAMSON, Judge of First Instance of Cagayan, section four hundred and twenty-four, and that
CHUA BIAN, CHUA YU LEE and CHUA there is no other sufficient security for the claim
KI, respondents. sought to be enforced by the action, and that the
amount due to the plaintiff above all legal set-offs
Miguel P. Pio for petitioner. or counterclaims is as much as the sum for which
The Respondent Judge in his own behalf. the order is granted.
No appearance for other respondents.
It will be seen that the legal provision just cited orders the
VILLA-REAL, J.: 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
In this original petition for mandamus filed by the the law requires nothing more than the affidavit as a means
corporate entity, La Granja, Inc., against Felix Samson, as of establishing the existence of such facts, nevertheless,
Judge of the Court of First Instance of Cagayan, Chua Bian, such affidavit must be sufficient to convince the court of
Chua Yu Lee and Chua Ki, the petitioner herein, for the their existence, the court being justified in rejecting the
reasons stated in its petition, prays that a writ affidavit if it does not serve this purpose and in denying the
of mandamus be issued against the respondent Judge petition for an order of attachment. The affidavit filed by
compelling him to issue a writ of attachment against the the petitioner, La Granja, Inc., must not have satisfied the
properties of the other respondents herein, who are respondent judge inasmuch as he desired to ascertain or
defendants in civil case No. 1888 of the Court of First convince himself of the truth of the facts alleged therein by
Instance of Cagayan. The pertinent facts necessary for the requiring evidence to substantiate them. The sufficiency or
solution of the questions raised in the present case are as insufficiency of an affidavit depends upon the amount of
follows: credit given it by the judge, and its acceptance or rejection,
upon his sound discretion.
On July 5, 1932, the petitioner herein, La Granja, Inc., filed
a complaint in the Court of First Instance of Cagayan, Hence, the respondent judge, in requiring the presentation
against Chua Bian, Chua Yu Lee and Chua Ki, for the of evidence to establish the truth of the allegation of the
recovery of the sum of P2,418.18 with interest thereon at affidavit that the defendants had disposed or were disposing
the rate of 12 per cent per annum, which case was docketed of their property to defraud their creditors, has done
as civil case No. 1888. The plaintiff at the same time, also nothing more than exercise his sound discretion in
prayed for the issuance of an order of attachment against determining the sufficiency of the affidavit.
the aforementioned defendants' property and accompanied
said complaint with an affidavit of the manager of the
aforesaid petitioner, La Granja, Inc., wherein it was alleged In view of the foregoing considerations, we are of the
among other essential things, that the said defendants have opinion and so hold that the mere filing of an affidavit
disposed or are disposing of their properties in favor of the executed in due form is not sufficient to compel a judge to
Asiatic Petroleum Co., with intent to defraud their issue an order of attachment, but it is necessary that by such
creditors. The respondent judge, wishing to ascertain or affidavit it be made to appear to the court that there exists
convince himself of the truth of the alleged disposal, sufficient cause for the issuance thereof, the determination
required the petitioner herein to present evidence to of such sufficiency being discretionary on the part of the
substantiate its allegation, before granting its petition. court.
Inasmuch as the petitioner refused to comply with the
court's requirement, alleging as its ground that was not Wherefore, the petition for a writ of mandamus is hereby
obliged to do so, the respondent judge dismissed said denied and the same is dismissed, with costs against the
petition for an order of attachment. petitioner. So ordered.

The only question to decide in the present case is whether Malcolm, Abad Santos, Hull, and Imperial, JJ., concur.
or not the mere filing of an affidavit executed in due form
is sufficient to compel a judge to issue an order of
attachment.

Section 426 of the Code of Civil procedure provides the

following:
EL BANCO ESPAÑOL-FILIPINO, plaintiff-appellant, 
vs.
SEC. 426. Granting order of attachment. — A VICENTE PALANCA, administrator of the estate of
judge or justice of the peace shall grant an order Engracio Palanca Tanquinyeng, defendant-appellant.
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
Aitken and DeSelms for appellant.  was, upon July 2, 1908, taken against him by default. Upon
Hartigan and Welch for appellee. July 3, 1908, a decision was rendered in favor of the
plaintiff. In this decision it was recited that publication had
STREET, J.: been properly made in a periodical, but nothing was said
about this notice having been given mail. The court, upon
this occasion, found that the indebtedness of the defendant
This action was instituted upon March 31, 1908, by "El amounted to P249,355. 32, with interest from March 31,
Banco Espanol-Filipino" to foreclose a mortgage upon 1908. Accordingly it was ordered that the defendant should,
various parcels of real property situated in the city of on or before July 6, 1908, deliver said amount to the clerk
Manila. The mortgage in question is dated June 16, 1906, of the court to be applied to the satisfaction of the
and was executed by the original defendant herein, judgment, and it was declared that in case of the failure of
Engracio Palanca Tanquinyeng y Limquingco, as security the defendant to satisfy the judgment within such period,
for a debt owing by him to the bank. Upon March 31, 1906, the mortgage property located in the city of Manila should
the debt amounted to P218,294.10 and was drawing interest be exposed to public sale. The payment contemplated in
at the rate of 8 per centum per annum, payable at the end of said order was never made; and upon July 8, 1908, the
each quarter. It appears that the parties to this mortgage at court ordered the sale of the property. The sale took place
that time estimated the value of the property in question at upon July 30, 1908, and the property was bought in by the
P292,558, which was about P75,000 in excess of the bank for the sum of P110,200. Upon August 7, 1908, this
indebtedness. After the execution of this instrument by the sale was confirmed by the court.
mortgagor, he returned to China which appears to have
been his native country; and he there died, upon January
29, 1810, without again returning to the Philippine Islands. About seven years after the confirmation of this sale, or to
the precise, upon June 25, 1915, a motion was made in this
cause by Vicente Palanca, as administrator of the estate of
As the defendant was a nonresident at the time of the the original defendant, Engracio Palanca Tanquinyeng y
institution of the present action, it was necessary for the Limquingco, wherein the applicant requested the court to
plaintiff in the foreclosure proceeding to give notice to the set aside the order of default of July 2, 1908, and the
defendant by publication pursuant to section 399 of the judgment rendered upon July 3, 1908, and to vacate all the
Code of Civil Procedure. An order for publication was proceedings subsequent thereto. The basis of this
accordingly obtained from the court, and publication was application, as set forth in the motion itself, was that the
made in due form in a newspaper of the city of Manila. At order of default and the judgment rendered thereon were
the same time that the order of the court should deposit in void because the court had never acquired jurisdiction over
the post office in a stamped envelope a copy of the the defendant or over the subject of the action.
summons and complaint directed to the defendant at his last
place of residence, to wit, the city of Amoy, in the Empire
of China. This order was made pursuant to the following At the hearing in the court below the application to vacate
provision contained in section 399 of the Code of Civil the judgment was denied, and from this action of the court
Procedure: Vicente Planca, as administrator of the estate of the original
defendant, has appealed. No other feature of the case is
here under consideration than such as related to the action
In case of publication, where the residence of a of the court upon said motion.
nonresident or absent defendant is known, the
judge must direct a copy of the summons and
complaint to be forthwith deposited by the clerk The case presents several questions of importance, which
in the post-office, postage prepaid, directed to the will be discussed in what appears to be the sequence of
person to be served, at his place of residence most convenient development. In the first part of this
opinion we shall, for the purpose of argument, assume that
the clerk of the Court of First Instance did not obey the
Whether the clerk complied with this order does not order of the court in the matter of mailing the papers which
affirmatively appear. There is, however, among the papers he was directed to send to the defendant in Amoy; and in
pertaining to this case, an affidavit, dated April 4, 1908, this connection we shall consider, first, whether the court
signed by Bernardo Chan y Garcia, an employee of the acquired the necessary jurisdiction to enable it to proceed
attorneys of the bank, showing that upon that date he had with the foreclosure of the mortgage and, secondly,
deposited in the Manila post-office a registered letter, whether those proceedings were conducted in such manner
addressed to Engracio Palanca Tanquinyeng, at Manila, as to constitute due process of law.
containing copies of the complaint, the plaintiff's affidavit,
the summons, and the order of the court directing
publication as aforesaid. It appears from the postmaster's The word "jurisdiction," as applied to the faculty of
receipt that Bernardo probably used an envelope obtained exercising judicial power, is used in several different,
from the clerk's office, as the receipt purports to show that though related, senses since it may have reference (1) to the
the letter emanated from the office. authority of the court to entertain a particular kind of action
or to administer a particular kind of relief, or it may refer to
the power of the court over the parties, or (2) over the
The cause proceeded in usual course in the Court of First property which is the subject to the litigation.
Instance; and the defendant not having appeared, judgment
The sovereign authority which organizes a court determines object is the enforcement of the lien against
the nature and extent of its powers in general and thus fixes the res; in the common law, they would be
its competency or jurisdiction with reference to the actions different in chancery did not treat the conditional
which it may entertain and the relief it may grant. conveyance as a mere hypothecation, and the
creditor's right ass an equitable lien; so, in both,
Jurisdiction over the person is acquired by the voluntary the suit is real action so far as it is against
appearance of a party in court and his submission to its property, and seeks the judicial recognition of a
authority, or it is acquired by the coercive power of legal property debt, and an order for the sale of
process exerted over the person. the res. (Waples, Proceedings In Rem. sec. 607.)

Jurisdiction over the property which is the subject of the It is true that in proceedings of this character, if the
litigation may result either from a seizure of the property defendant for whom publication is made appears, the action
under legal process, whereby it is brought into the actual becomes as to him a personal action and is conducted as
custody of the law, or it may result from the institution of such. This, however, does not affect the proposition that
legal proceedings wherein, under special provisions of law, where the defendant fails to appear the action is quasi in
the power of the court over the property is recognized and rem; and it should therefore be considered with reference to
made effective. In the latter case the property, though at all the principles governing actions in rem.
times within the potential power of the court, may never be
taken into actual custody at all. An illustration of the There is an instructive analogy between the foreclosure
jurisdiction acquired by actual seizure is found in proceeding and an action of attachment, concerning which
attachment proceedings, where the property is seized at the the Supreme Court of the United States has used the
beginning of the action, or some subsequent stage of its following language:
progress, and held to abide the final event of the litigation.
An illustration of what we term potential jurisdiction over If the defendant appears, the cause becomes
the res, is found in the proceeding to register the title of mainly a suit in personam, with the added
land under our system for the registration of land. Here the incident, that the property attached remains
court, without taking actual physical control over the liable, under the control of the court, to answer to
property assumes, at the instance of some person claiming any demand which may be established against the
to be owner, to exercise a jurisdiction in rem over the defendant by the final judgment of the court. But,
property and to adjudicate the title in favor of the petitioner if there is no appearance of the defendant, and no
against all the world. service of process on him, the case becomes, in
its essential nature, a proceeding in rem, the only
In the terminology of American law the action to foreclose effect of which is to subject the property attached
a mortgage is said to be a proceeding quasi in rem, by to the payment of the defendant which the court
which is expressed the idea that while it is not strictly may find to be due to the plaintiff. (Cooper vs.
speaking an action in rem yet it partakes of that nature and Reynolds, 10 Wall., 308.)
is substantially such. The expression "action in rem" is, in
its narrow application, used only with reference to certain In an ordinary attachment proceeding, if the defendant is
proceedings in courts of admiralty wherein the property not personally served, the preliminary seizure is to, be
alone is treated as responsible for the claim or obligation considered necessary in order to confer jurisdiction upon
upon which the proceedings are based. The action quasi the court. In this case the lien on the property is acquired by
rem differs from the true action in rem in the circumstance the seizure; and the purpose of the proceedings is to subject
that in the former an individual is named as defendant, and the property to that lien. If a lien already exists, whether
the purpose of the proceeding is to subject his interest created by mortgage, contract, or statute, the preliminary
therein to the obligation or lien burdening the property. All seizure is not necessary; and the court proceeds to enforce
proceedings having for their sole object the sale or other such lien in the manner provided by law precisely as
disposition of the property of the defendant, whether by though the property had been seized upon attachment.
attachment, foreclosure, or other form of remedy, are in a (Roller vs. Holly, 176 U. S., 398, 405; 44 L. ed., 520.) It
general way thus designated. The judgment entered in these results that the mere circumstance that in an attachment the
proceedings is conclusive only between the parties. property may be seized at the inception of the proceedings,
while in the foreclosure suit it is not taken into legal
In speaking of the proceeding to foreclose a mortgage the custody until the time comes for the sale, does not
author of a well known treaties, has said: materially affect the fundamental principle involved in both
cases, which is that the court is here exercising a
Though nominally against person, such suits are jurisdiction over the property in a proceeding directed
to vindicate liens; they proceed upon seizure; essentially in rem.
they treat property as primarily indebted; and,
with the qualification above-mentioned, they are Passing now to a consideration of the jurisdiction of the
substantially property actions. In the civil law, Court of First Instance in a mortgage foreclosure, it is
they are styled hypothecary actions, and their sole evident that the court derives its authority to entertain the
action primarily from the statutes organizing the court. The process, including service by publication and personal
jurisdiction of the court, in this most general sense, over the service outside of the jurisdiction in which the judgment is
cause of action is obvious and requires no comment. rendered; and the only exception seems to be found in the
Jurisdiction over the person of the defendant, if acquired at case where the nonresident defendant has expressly or
all in such an action, is obtained by the voluntary impliedly consented to the mode of service. (Note to Raher
submission of the defendant or by the personal service of vs. Raher, 35 L. R. A. [N. S. ], 292; see also 50 L .R. A.,
process upon him within the territory where the process is 585; 35 L. R. A. [N. S.], 312
valid. If, however, the defendant is a nonresident and,
remaining beyond the range of the personal process of the The idea upon which the decision in Pennoyer vs. Neff
court, refuses to come in voluntarily, the court never (supra) proceeds is that the process from the tribunals of
acquires jurisdiction over the person at all. Here the one State cannot run into other States or countries and that
property itself is in fact the sole thing which is impleaded due process of law requires that the defendant shall be
and is the responsible object which is the subject of the brought under the power of the court by service of process
exercise of judicial power. It follows that the jurisdiction of within the State, or by his voluntary appearance, in order to
the court in such case is based exclusively on the power authorize the court to pass upon the question of his personal
which, under the law, it possesses over the property; and liability. The doctrine established by the Supreme Court of
any discussion relative to the jurisdiction of the court over the United States on this point, being based upon the
the person of the defendant is entirely apart from the case. constitutional conception of due process of law, is binding
The jurisdiction of the court over the property, considered upon the courts of the Philippine Islands. Involved in this
as the exclusive object of such action, is evidently based decision is the principle that in proceedings in rem or quasi
upon the following conditions and considerations, namely: in rem against a nonresident who is not served personally
(1) that the property is located within the district; (2) that within the state, and who does not appear, the relief must
the purpose of the litigation is to subject the property by be confined to the res, and the court cannot lawfully render
sale to an obligation fixed upon it by the mortgage; and (3) a personal judgment against him. (Dewey vs. Des Moines,
that the court at a proper stage of the proceedings takes the 173 U. S., 193; 43 L. ed., 665; Heidritter vs. Elizabeth Oil
property into custody, if necessary, and expose it to sale for Cloth Co., 112 U. S., 294; 28 L. ed., 729.) Therefore in an
the purpose of satisfying the mortgage debt. An obvious action to foreclose a mortgage against a nonresident, upon
corollary is that no other relief can be granted in this whom service has been effected exclusively by publication,
proceeding than such as can be enforced against the no personal judgment for the deficiency can be entered.
property. (Latta vs. Tutton, 122 Cal., 279; Blumberg vs. Birch, 99
Cal., 416.)
We may then, from what has been stated, formulated the
following proposition relative to the foreclosure proceeding It is suggested in the brief of the appellant that the
against the property of a nonresident mortgagor who fails judgment entered in the court below offends against the
to come in and submit himself personally to the jurisdiction principle just stated and that this judgment is void because
of the court: (I) That the jurisdiction of the court is derived the court in fact entered a personal judgment against the
from the power which it possesses over the property; (II) absent debtor for the full amount of the indebtedness
that jurisdiction over the person is not acquired and is secured by the mortgage. We do not so interpret the
nonessential; (III) that the relief granted by the court must judgment.
be limited to such as can be enforced against the property
itself.
In a foreclosure proceeding against a nonresident owner it
is necessary for the court, as in all cases of foreclosure, to
It is important that the bearing of these propositions be ascertain the amount due, as prescribed in section 256 of
clearly apprehended, for there are many expressions in the the Code of Civil Procedure, and to make an order
American reports from which it might be inferred that the requiring the defendant to pay the money into court. This
court acquires personal jurisdiction over the person of the step is a necessary precursor of the order of sale. In the
defendant by publication and notice; but such is not the present case the judgment which was entered contains the
case. In truth the proposition that jurisdiction over the following words:
person of a nonresident cannot be acquired by publication
and notice was never clearly understood even in the
American courts until after the decision had been rendered Because it is declared that the said defendant
by the Supreme Court of the United States in the leading Engracio Palanca Tanquinyeng y Limquingco, is
case of Pennoyer vs. Neff (95 U. S. 714; 24 L. ed., 565). In indebted in the amount of P249,355.32, plus the
the light of that decision, and of other decisions which have interest, to the 'Banco Espanol-Filipino' . . .
subsequently been rendered in that and other courts, the therefore said appellant is ordered to deliver the
proposition that jurisdiction over the person cannot be thus above amount etc., etc.
acquired by publication and notice is no longer open to
question; and it is now fully established that a personal This is not the language of a personal judgment. Instead it
judgment upon constructive or substituted service against a is clearly intended merely as a compliance with the
nonresident who does not appear is wholly invalid. This requirement that the amount due shall be ascertained and
doctrine applies to all kinds of constructive or substituted that the evidence of this it may be observed that according
to the Code of Civil Procedure a personal judgment against appearance must be made, is everywhere recognized as
the debtor for the deficiency is not to be rendered until after essential. To answer this necessity the statutes generally
the property has been sold and the proceeds applied to the provide for publication, and usually in addition thereto, for
mortgage debt. (sec. 260). the mailing of notice to the defendant, if his residence is
known. Though commonly called constructive, or
The conclusion upon this phase of the case is that whatever substituted service of process in any true sense. It is merely
may be the effect in other respects of the failure of the clerk a means provided by law whereby the owner may be
of the Court of First Instance to mail the proper papers to admonished that his property is the subject of judicial
the defendant in Amoy, China, such irregularity could in no proceedings and that it is incumbent upon him to take such
wise impair or defeat the jurisdiction of the court, for in our steps as he sees fit to protect it. In speaking of notice of this
opinion that jurisdiction rest upon a basis much more character a distinguish master of constitutional law has
secure than would be supplied by any form of notice that used the following language:
could be given to a resident of a foreign country.
. . . if the owners are named in the proceedings,
Before leaving this branch of the case, we wish to observe and personal notice is provided for, it is rather
that we are fully aware that many reported cases can be from tenderness to their interests, and in order to
cited in which it is assumed that the question of the make sure that the opportunity for a hearing shall
sufficiency of publication or notice in a case of this kind is not be lost to them, than from any necessity that
a question affecting the jurisdiction of the court, and the the case shall assume that form. (Cooley on
court is sometimes said to acquire jurisdiction by virtue of Taxation [2d. ed.], 527, quoted in Leigh vs.
the publication. This phraseology was undoubtedly Green, 193 U. S., 79, 80.)
originally adopted by the court because of the analogy
between service by the publication and personal service of It will be observed that this mode of notification does not
process upon the defendant; and, as has already been involve any absolute assurance that the absent owner shall
suggested, prior to the decision of Pennoyer vs. Neff thereby receive actual notice. The periodical containing the
(supra) the difference between the legal effects of the two publication may never in fact come to his hands, and the
forms of service was obscure. It is accordingly not chances that he should discover the notice may often be
surprising that the modes of expression which had already very slight. Even where notice is sent by mail the
been molded into legal tradition before that case was probability of his receiving it, though much increased, is
decided have been brought down to the present day. But it dependent upon the correctness of the address to which it is
is clear that the legal principle here involved is not effected forwarded as well as upon the regularity and security of the
by the peculiar language in which the courts have mail service. It will be noted, furthermore, that the
expounded their ideas. provision of our law relative to the mailing of notice does
not absolutely require the mailing of notice unconditionally
We now proceed to a discussion of the question whether and in every event, but only in the case where the
the supposed irregularity in the proceedings was of such defendant's residence is known. In the light of all these
gravity as to amount to a denial of that "due process of law" facts, it is evident that actual notice to the defendant in
which was secured by the Act of Congress in force in these cases of this kind is not, under the law, to be considered
Islands at the time this mortgage was foreclosed. (Act of absolutely necessary.
July 1, 1902, sec. 5.) In dealing with questions involving
the application of the constitutional provisions relating to The idea upon which the law proceeds in recognizing the
due process of law the Supreme Court of the United States efficacy of a means of notification which may fall short of
has refrained from attempting to define with precision the actual notice is apparently this: Property is always assumed
meaning of that expression, the reason being that the idea to be in the possession of its owner, in person or by agent;
expressed therein is applicable under so many diverse and he may be safely held, under certain conditions, to be
conditions as to make any attempt ay precise definition affected with knowledge that proceedings have been
hazardous and unprofitable. As applied to a judicial instituted for its condemnation and sale.
proceeding, however, it may be laid down with certainty
that the requirement of due process is satisfied if the It is the duty of the owner of real estate, who is a
following conditions are present, namely; (1) There must nonresident, to take measures that in some way
be a court or tribunal clothed with judicial power to hear he shall be represented when his property is
and determine the matter before it; (2) jurisdiction must be called into requisition, and if he fails to do this,
lawfully acquired over the person of the defendant or over and fails to get notice by the ordinary
the property which is the subject of the proceeding; (3) the publications which have usually been required in
defendant must be given an opportunity to be heard; and (4) such cases, it is his misfortune, and he must abide
judgment must be rendered upon lawful hearing. the consequences. (6 R. C. L., sec. 445 [p. 450]).

Passing at once to the requisite that the defendant shall It has been well said by an American court:
have an opportunity to be heard, we observe that in a
foreclosure case some notification of the proceedings to the
nonresident owner, prescribing the time within which
 If property of a nonresident cannot be reached by It will be observed that in considering the effect of this
legal process upon the constructive notice, then irregularity, it makes a difference whether it be viewed as a
our statutes were passed in vain, and are mere question involving jurisdiction or as a question involving
empty legislative declarations, without either due process of law. In the matter of jurisdiction there can
force, or meaning; for if the person is not within be no distinction between the much and the little. The court
the jurisdiction of the court, no personal either has jurisdiction or it has not; and if the requirement
judgment can be rendered, and if the judgment as to the mailing of notice should be considered as a step
cannot operate upon the property, then no antecedent to the acquiring of jurisdiction, there could be
effective judgment at all can be rendered, so that no escape from the conclusion that the failure to take that
the result would be that the courts would be step was fatal to the validity of the judgment. In the
powerless to assist a citizen against a nonresident. application of the idea of due process of law, on the other
Such a result would be a deplorable one. (Quarl hand, it is clearly unnecessary to be so rigorous. The
vs. Abbett, 102 Ind., 233; 52 Am. Rep., 662, jurisdiction being once established, all that due process of
667.) law thereafter requires is an opportunity for the defendant
to be heard; and as publication was duly made in the
It is, of course universally recognized that the statutory newspaper, it would seem highly unreasonable to hold that
provisions relative to publication or other form of notice failure to mail the notice was fatal. We think that in
against a nonresident owner should be complied with; and applying the requirement of due process of law, it is
in respect to the publication of notice in the newspaper it permissible to reflect upon the purposes of the provision
may be stated that strict compliance with the requirements which is supposed to have been violated and the principle
of the law has been held to be essential. In Guaranty Trust underlying the exercise of judicial power in these
etc. Co. vs. Green Cove etc., Railroad Co. (139 U. S., 137, proceedings. Judge in the light of these conceptions, we
138), it was held that where newspaper publication was think that the provision of Act of Congress declaring that
made for 19 weeks, when the statute required 20, the no person shall be deprived of his property without due
publication was insufficient. process of law has not been infringed.

With respect to the provisions of our own statute, relative In the progress of this discussion we have stated the two
to the sending of notice by mail, the requirement is that the conclusions; (1) that the failure of the clerk to send the
judge shall direct that the notice be deposited in the mail by notice to the defendant by mail did not destroy the
the clerk of the court, and it is not in terms declared that the jurisdiction of the court and (2) that such irregularity did
notice must be deposited in the mail. We consider this to be not infringe the requirement of due process of law. As a
of some significance; and it seems to us that, having due consequence of these conclusions the irregularity in
regard to the principles upon which the giving of such question is in some measure shorn of its potency. It is still
notice is required, the absent owner of the mortgaged necessary, however, to consider its effect considered as a
property must, so far as the due process of law is simple irregularity of procedure; and it would be idle to
concerned, take the risk incident to the possible failure of pretend that even in this aspect the irregularity is not grave
the clerk to perform his duty, somewhat as he takes the risk enough. From this point of view, however, it is obvious that
that the mail clerk or the mail carrier might possibly lose or any motion to vacate the judgment on the ground of the
destroy the parcel or envelope containing the notice before irregularity in question must fail unless it shows that the
it should reach its destination and be delivered to him. This defendant was prejudiced by that irregularity. The least,
idea seems to be strengthened by the consideration that therefore, that can be required of the proponent of such a
placing upon the clerk the duty of sending notice by mail, motion is to show that he had a good defense against the
the performance of that act is put effectually beyond the action to foreclose the mortgage. Nothing of the kind is,
control of the plaintiff in the litigation. At any rate it is however, shown either in the motion or in the affidavit
obvious that so much of section 399 of the Code of Civil which accompanies the motion.
Procedure as relates to the sending of notice by mail was
complied with when the court made the order. The question An application to open or vacate a judgment because of an
as to what may be the consequences of the failure of the irregularity or defect in the proceedings is usually required
record to show the proof of compliance with that to be supported by an affidavit showing the grounds on
requirement will be discussed by us further on. which the relief is sought, and in addition to this showing
also a meritorious defense to the action. It is held that a
The observations which have just been made lead to the general statement that a party has a good defense to the
conclusion that the failure of the clerk to mail the notice, if action is insufficient. The necessary facts must be averred.
in fact he did so fail in his duty, is not such an irregularity, Of course if a judgment is void upon its face a showing of
as amounts to a denial of due process of law; and hence in the existence of a meritorious defense is not necessary. (10
our opinion that irregularity, if proved, would not avoid the R. C. L., 718.)
judgment in this case. Notice was given by publication in a
newspaper and this is the only form of notice which the law The lapse of time is also a circumstance deeply affecting
unconditionally requires. This in our opinion is all that was this aspect of the case. In this connection we quote the
absolutely necessary to sustain the proceedings. following passage from the encyclopedic treatise now in
course of publication:
 Where, however, the judgment is not void on its returned by the postal officials as undelivered. And if it was
face, and may therefore be enforced if permitted delivered in Manila, instead of being forwarded to Amoy,
to stand on the record, courts in many instances China, there is a probability that the recipient was a person
refuse to exercise their quasi equitable powers to sufficiently interested in his affairs to send it or
vacate a judgement after the lapse of the term ay communicate its contents to him.
which it was entered, except in clear cases, to
promote the ends of justice, and where it appears Of course if the jurisdiction of the court or the sufficiency
that the party making the application is himself of the process of law depended upon the mailing of the
without fault and has acted in good faith and with notice by the clerk, the reflections in which we are now
ordinary diligence. Laches on the part of the indulging would be idle and frivolous; but the
applicant, if unexplained, is deemed sufficient considerations mentioned are introduced in order to show
ground for refusing the relief to which he might the propriety of applying to this situation the legal
otherwise be entitled. Something is due to the presumption to which allusion has been made. Upon that
finality of judgments, and acquiescence or presumption, supported by the circumstances of this
unnecessary delay is fatal to motions of this case, ,we do not hesitate to found the conclusion that the
character, since courts are always reluctant to defendant voluntarily abandoned all thought of saving his
interfere with judgments, and especially where property from the obligation which he had placed upon it;
they have been executed or satisfied. The moving that knowledge of the proceedings should be imputed to
party has the burden of showing diligence, and him; and that he acquiesced in the consequences of those
unless it is shown affirmatively the court will not proceedings after they had been accomplished. Under these
ordinarily exercise its discretion in his favor. (15 circumstances it is clear that the merit of this motion is, as
R. C. L., 694, 695.) we have already stated, adversely affected in a high degree
by the delay in asking for relief. Nor is it an adequate reply
It is stated in the affidavit that the defendant, Engracio to say that the proponent of this motion is an administrator
Palanca Tanquinyeng y Limquingco, died January 29, who only qualified a few months before this motion was
1910. The mortgage under which the property was sold was made. No disability on the part of the defendant himself
executed far back in 1906; and the proceedings in the existed from the time when the foreclosure was effected
foreclosure were closed by the order of court confirming until his death; and we believe that the delay in the
the sale dated August 7, 1908. It passes the rational bounds appointment of the administrator and institution of this
of human credulity to suppose that a man who had placed a action is a circumstance which is imputable to the parties in
mortgage upon property worth nearly P300,000 and had interest whoever they may have been. Of course if the
then gone away from the scene of his life activities to end minor heirs had instituted an action in their own right to
his days in the city of Amoy, China, should have long recover the property, it would have been different.
remained in ignorance of the fact that the mortgage had
been foreclosed and the property sold, even supposing that It is, however, argued that the defendant has suffered
he had no knowledge of those proceedings while they were prejudice by reason of the fact that the bank became the
being conducted. It is more in keeping with the ordinary purchaser of the property at the foreclosure sale for a price
course of things that he should have acquired information greatly below that which had been agreed upon in the
as to what was transpiring in his affairs at Manila; and upon mortgage as the upset price of the property. In this
the basis of this rational assumption we are authorized, in connection, it appears that in article nine of the mortgage
the absence of proof to the contrary, to presume that he did which was the subject of this foreclosure, as amended by
have, or soon acquired, information as to the sale of his the notarial document of July 19, 1906, the parties to this
property. mortgage made a stipulation to the effect that the value
therein placed upon the mortgaged properties should serve
The Code of Civil Procedure, indeed, expressly declares as a basis of sale in case the debt should remain unpaid and
that there is a presumption that things have happened the bank should proceed to a foreclosure. The upset price
according to the ordinary habits of life (sec. 334 [26]); and stated in that stipulation for all the parcels involved in this
we cannot conceive of a situation more appropriate than foreclosure was P286,000. It is said in behalf of the
this for applying the presumption thus defined by the appellant that when the bank bought in the property for the
lawgiver. In support of this presumption, as applied to the sum of P110,200 it violated that stipulation.
present case, it is permissible to consider the probability
that the defendant may have received actual notice of these It has been held by this court that a clause in a mortgage
proceedings from the unofficial notice addressed to him in providing for a tipo, or upset price, does not prevent a
Manila which was mailed by an employee of the bank's foreclosure, nor affect the validity of a sale made in the
attorneys. Adopting almost the exact words used by the foreclosure proceedings. (Yangco vs. Cruz Herrera and Wy
Supreme Court of the United States in Grannis vs. Ordeans Piaco, 11 Phil. Rep., 402; Banco-Español Filipino vs.
(234 U. S., 385; 58 L. ed., 1363), we may say that in view Donaldson, Sim and Co., 5 Phil. Rep., 418.) In both the
of the well-known skill of postal officials and employees in cases here cited the property was purchased at the
making proper delivery of letters defectively addressed, we foreclosure sale, not by the creditor or mortgagee, but by a
think the presumption is clear and strong that this notice third party. Whether the same rule should be applied in a
reached the defendant, there being no proof that it was ever case where the mortgagee himself becomes the purchaser
has apparently not been decided by this court in any In subsection 14 of section 334 of the Code of Civil
reported decision, and this question need not here be Procedure it is declared that there is a presumption "that
considered, since it is evident that if any liability was official duty has been regularly performed;" and in
incurred by the bank by purchasing for a price below that subsection 18 it is declared that there is a presumption "that
fixed in the stipulation, its liability was a personal liability the ordinary course of business has been followed." These
derived from the contract of mortgage; and as we have presumptions are of course in no sense novelties, as they
already demonstrated such a liability could not be the express ideas which have always been recognized. Omnia
subject of adjudication in an action where the court had no presumuntur rite et solemniter esse acta donec probetur in
jurisdiction over the person of the defendant. If the plaintiff contrarium. There is therefore clearly a legal presumption
bank became liable to account for the difference between that the clerk performed his duty about mailing this notice;
the upset price and the price at which in bought in the and we think that strong considerations of policy require
property, that liability remains unaffected by the disposition that this presumption should be allowed to operate with full
which the court made of this case; and the fact that the bank force under the circumstances of this case. A party to an
may have violated such an obligation can in no wise affect action has no control over the clerk of the court; and has no
the validity of the judgment entered in the Court of First right to meddle unduly with the business of the clerk in the
Instance. performance of his duties. Having no control over this
officer, the litigant must depend upon the court to see that
In connection with the entire failure of the motion to show the duties imposed on the clerk are performed.
either a meritorious defense to the action or that the
defendant had suffered any prejudice of which the law can Other considerations no less potent contribute to strengthen
take notice, we may be permitted to add that in our opinion the conclusion just stated. There is no principle of law
a motion of this kind, which proposes to unsettle judicial better settled than that after jurisdiction has once been
proceedings long ago closed, can not be considered with required, every act of a court of general jurisdiction shall be
favor, unless based upon grounds which appeal to the presumed to have been rightly done. This rule is applied to
conscience of the court. Public policy requires that judicial every judgment or decree rendered in the various stages of
proceedings be upheld. The maximum here applicable is the proceedings from their initiation to their completion
non quieta movere. As was once said by Judge Brewer, (Voorhees vs. United States Bank, 10 Pet., 314; 35 U. S.,
afterwards a member of the Supreme Court of the United 449); and if the record is silent with respect to any fact
States: which must have been established before the court could
have rightly acted, it will be presumed that such fact was
Public policy requires that judicial proceedings properly brought to its knowledge. (The Lessee of Grignon
be upheld, and that titles obtained in those vs. Astor, 2 How., 319; 11 L. ed., 283.)
proceedings be safe from the ruthless hand of
collateral attack. If technical defects are adjudged In making the order of sale [of the real state of a
potent to destroy such titles, a judicial sale will decedent] the court are presumed to have
never realize that value of the property, for no adjudged every question necessary to justify such
prudent man will risk his money in bidding for order or decree, viz: The death of the owners; that
and buying that title which he has reason to fear the petitioners were his administrators; that the
may years thereafter be swept away through personal estate was insufficient to pay the debts
some occult and not readily discoverable defect. of the deceased; that the private acts of
(Martin vs. Pond, 30 Fed., 15.) Assembly, as to the manner of sale, were within
the constitutional power of the Legislature, and
In the case where that language was used an attempt was that all the provisions of the law as to notices
made to annul certain foreclosure proceedings on the which are directory to the administrators have
ground that the affidavit upon which the order of been complied with. . . . The court is not bound to
publication was based erroneously stated that the State of enter upon the record the evidence on which any
Kansas, when he was in fact residing in another State. It fact was decided. (Florentine vs. Barton, 2 Wall.,
was held that this mistake did not affect the validity of the 210; 17 L. ed., 785.) Especially does all this
proceedings. apply after long lapse of time.

In the preceding discussion we have assumed that the clerk Applegate vs. Lexington and Carter County Mining Co.
failed to send the notice by post as required by the order of (117 U. S., 255) contains an instructive discussion in a case
the court. We now proceed to consider whether this is a analogous to that which is now before us. It there appeared
proper assumption; and the proposition which we propose that in order to foreclose a mortgage in the State of
to establish is that there is a legal presumption that the clerk Kentucky against a nonresident debtor it was necessary that
performed his duty as the ministerial officer of the court, publication should be made in a newspaper for a specified
which presumption is not overcome by any other facts period of time, also be posted at the front door of the court
appearing in the cause. house and be published on some Sunday, immediately after
divine service, in such church as the court should direct. In
a certain action judgment had been entered against a
nonresident, after publication in pursuance of these
provisions. Many years later the validity of the proceedings In this connection it is important to bear in mind that under
was called in question in another action. It was proved from the practice prevailing in the Philippine Islands the word
the files of an ancient periodical that publication had been "record" is used in a loose and broad sense, as indicating
made in its columns as required by law; but no proof was the collective mass of papers which contain the history of
offered to show the publication of the order at the church, all the successive steps taken in a case and which are
or the posting of it at the front door of the court-house. It finally deposited in the archives of the clerk's office as a
was insisted by one of the parties that the judgment of the memorial of the litigation. It is a matter of general
court was void for lack of jurisdiction. But the Supreme information that no judgment roll, or book of final record,
Court of the United States said: is commonly kept in our courts for the purpose of recording
the pleadings and principal proceedings in actions which
The court which made the decree . . . was a court have been terminated; and in particular, no such record is
of general jurisdiction. Therefore every kept in the Court of First Instance of the city of Manila.
presumption not inconsistent with the record is to There is, indeed, a section of the Code of Civil Procedure
be indulged in favor of its jurisdiction. . . . It is to which directs that such a book of final record shall be kept;
be presumed that the court before making its but this provision has, as a matter of common knowledge,
decree took care of to see that its order for been generally ignored. The result is that in the present case
constructive service, on which its right to make we do not have the assistance of the recitals of such a
the decree depended, had been obeyed. record to enable us to pass upon the validity of this
judgment and as already stated the question must be
determined by examining the papers contained in the entire
It is true that in this case the former judgment was the file.
subject of collateral , or indirect attack, while in the case at
bar the motion to vacate the judgment is direct proceeding
for relief against it. The same general presumption, But it is insisted by counsel for this motion that the
however, is indulged in favor of the judgment of a court of affidavit of Bernardo Chan y Garcia showing that upon
general jurisdiction, whether it is the subject of direct or April 4, 1908, he sent a notification through the mail
indirect attack the only difference being that in case of addressed to the defendant at Manila, Philippine Islands,
indirect attack the judgment is conclusively presumed to be should be accepted as affirmative proof that the clerk of the
valid unless the record affirmatively shows it to be void, court failed in his duty and that, instead of himself sending
while in case of direct attack the presumption in favor of its the requisite notice through the mail, he relied upon
validity may in certain cases be overcome by proof Bernardo to send it for him. We do not think that this is by
extrinsic to the record. any means a necessary inference. Of course if it had
affirmatively appeared that the clerk himself had attempted
to comply with this order and had directed the notification
The presumption that the clerk performed his duty and that to Manila when he should have directed it to Amoy, this
the court made its decree with the knowledge that the would be conclusive that he had failed to comply with the
requirements of law had been complied with appear to be exact terms of the order; but such is not this case. That the
amply sufficient to support the conclusion that the notice clerk of the attorneys for the plaintiff erroneously sent a
was sent by the clerk as required by the order. It is true that notification to the defendant at a mistaken address affords
there ought to be found among the papers on file in this in our opinion very slight basis for supposing that the clerk
cause an affidavit, as required by section 400 of the Code may not have sent notice to the right address.
of Civil Procedure, showing that the order was in fact so
sent by the clerk; and no such affidavit appears. The record
is therefore silent where it ought to speak. But the very There is undoubtedly good authority to support the position
purpose of the law in recognizing these presumptions is to that when the record states the evidence or makes an
enable the court to sustain a prior judgment in the face of averment with reference to a jurisdictional fact, it will not
such an omission. If we were to hold that the judgment in be presumed that there was other or different evidence
this case is void because the proper affidavit is not present respecting the fact, or that the fact was otherwise than
in the file of papers which we call the record, the result stated. If, to give an illustration, it appears from the return
would be that in the future every title in the Islands resting of the officer that the summons was served at a particular
upon a judgment like that now before us would depend, for place or in a particular manner, it will not be presumed that
its continued security, upon the presence of such affidavit service was also made at another place or in a different
among the papers and would be liable at any moment to be manner; or if it appears that service was made upon a
destroyed by the disappearance of that piece of paper. We person other than the defendant, it will not be presumed, in
think that no court, with a proper regard for the security of the silence of the record, that it was made upon the
judicial proceedings and for the interests which have by defendant also (Galpin vs. Page, 18 Wall., 350, 366;
law been confided to the courts, would incline to favor such Settlemier vs. Sullivan, 97 U. S., 444, 449). While we
a conclusion. In our opinion the proper course in a case of believe that these propositions are entirely correct as
this kind is to hold that the legal presumption that the clerk applied to the case where the person making the return is
performed his duty still maintains notwithstanding the the officer who is by law required to make the return, we
absence from the record of the proper proof of that fact. do not think that it is properly applicable where, as in the
present case, the affidavit was made by a person who, so
far as the provisions of law are concerned, was a mere with precision the method of beginning, conducting, and
intermeddler. concluding the civil action of whatever species; and by
section 795 of the same Code it is declared that the
The last question of importance which we propose to procedure in all civil action shall be in accordance with the
consider is whether a motion in the cause is admissible as a provisions of this Code. We are therefore of the opinion
proceeding to obtain relief in such a case as this. If the that the remedies prescribed in sections 113 and 513 are
motion prevails the judgment of July 2, 1908, and all exclusive of all others, so far as relates to the opening and
subsequent proceedings will be set aside, and the litigation continuation of a litigation which has been once concluded.
will be renewed, proceeding again from the date mentioned
as if the progress of the action had not been interrupted. The motion in the present case does not conform to the
The proponent of the motion does not ask the favor of requirements of either of these provisions; and the
being permitted to interpose a defense. His purpose is consequence is that in our opinion the action of the Court
merely to annul the effective judgment of the court, to the of First Instance in dismissing the motion was proper.
end that the litigation may again resume its regular course.
If the question were admittedly one relating merely to an
There is only one section of the Code of Civil Procedure irregularity of procedure, we cannot suppose that this
which expressly recognizes the authority of a Court of First proceeding would have taken the form of a motion in the
Instance to set aside a final judgment and permit a renewal cause, since it is clear that, if based on such an error, the
of the litigation in the same cause. This is as follows: came to late for relief in the Court of First Instance. But as
we have already seen, the motion attacks the judgment of
SEC. 113. Upon such terms as may be just the the court as void for want of jurisdiction over the
court may relieve a party or legal representative defendant. The idea underlying the motion therefore is that
from the judgment, order, or other proceeding inasmuch as the judgment is a nullity it can be attacked in
taken against him through his mistake, any way and at any time. If the judgment were in fact void
inadvertence, surprise, or excusable neglect; upon its face, that is, if it were shown to be a nullity by
Provided, That application thereof be made virtue of its own recitals, there might possibly be something
within a reasonable time, but in no case in this. Where a judgment or judicial order is void in this
exceeding six months after such judgment, order, sense it may be said to be a lawless thing, which can be
or proceeding was taken. treated as an outlaw and slain at sight, or ignored wherever
and whenever it exhibits its head.
An additional remedy by petition to the Supreme Court is
supplied by section 513 of the same Code. The first But the judgment in question is not void in any such sense.
paragraph of this section, in so far as pertinent to this It is entirely regular in form, and the alleged defect is one
discussion, provides as follows: which is not apparent upon its face. It follows that even if
the judgment could be shown to be void for want of
jurisdiction, or for lack of due process of law, the party
When a judgment is rendered by a Court of First aggrieved thereby is bound to resort to some appropriate
Instance upon default, and a party thereto is proceeding to obtain relief. Under accepted principles of
unjustly deprived of a hearing by fraud, accident, law and practice, long recognized in American courts, a
mistake or excusable negligence, and the Court of proper remedy in such case, after the time for appeal or
First Instance which rendered the judgment has review has passed, is for the aggrieved party to bring an
finally adjourned so that no adequate remedy action to enjoin the judgment, if not already carried into
exists in that court, the party so deprived of a effect; or if the property has already been disposed of he
hearing may present his petition to the Supreme may institute suit to recover it. In every situation of this
Court within sixty days after he first learns of the character an appropriate remedy is at hand; and if property
rendition of such judgment, and not thereafter, has been taken without due process, the law concedes due
setting forth the facts and praying to have process to recover it. We accordingly old that, assuming the
judgment set aside. . . . judgment to have been void as alleged by the proponent of
this motion, the proper remedy was by an original
It is evident that the proceeding contemplated in this proceeding and not by motion in the cause. As we have
section is intended to supplement the remedy provided by already seen our Code of Civil Procedure defines the
section 113; and we believe the conclusion irresistible that conditions under which relief against a judgment may be
there is no other means recognized by law whereby a productive of conclusion for this court to recognize such a
defeated party can, by a proceeding in the same cause, proceeding as proper under conditions different from those
procure a judgment to be set aside, with a view to the defined by law. Upon the point of procedure here involved,
renewal of the litigation. we refer to the case of People vs. Harrison (84 Cal., 607)
wherein it was held that a motion will not lie to vacate a
The Code of Civil Procedure purports to be a complete judgment after the lapse of the time limited by statute if the
system of practice in civil causes, and it contains provisions judgment is not void on its face; and in all cases, after the
describing with much fullness the various steps to be taken lapse of the time limited by statute if the judgment is not
in the conduct of such proceedings. To this end it defines void on its face; and all cases, after the lapse of such time,
when an attempt is made to vacate the judgment by a
proceeding in court for that purpose an action regularly
brought is preferable, and should be required. It will be
noted taken verbatim from the California Code (sec. 473).

The conclusions stated in this opinion indicate that the

judgment appealed from is without error, and the same is
accordingly affirmed, with costs. So ordered.

Arellano, C.J., Torres, Carson, and Avanceña, JJ., concur.

G.R. No. L-49140 November 19, 1982  the vessel's captain; that the charter party has expired but
QUASHA ASPERILLA ANCHETA VALMONTE the vessel has not yet discharged the cargoes due to
PEÑA & MARCOS, petitioner,  inadequate port facilities and failure of the shippers,
vs. consignees and charterer to pay the charter hire; that Filcar
THE HONORABLE CELESTINO P. JUAN, demanded from Charles Thorburn the payment of the
FILIPINAS CARRIERS, INC., represented by its charter hire but Thorburn failed to pay and instead declared
President, FEDERICO TABORA, JR., APOLLO bankruptcy and is now under receivership in Sweden; that
KOKIN TRADING CO., LTD., et al., respondents. on demand, Baroom, the agent of Thorburn in Jeddah, and
the consignees and shippers refused to pay; that
Quasha, Asperilla, Ancheta, Valmonte, Peña and Marcos consequently, Filcar was forced to exercise its lien on the
Law Offices for petitioner. cargoes consistent with Clause 18 of the Charter Party,
notice of which was sent to defendants. The plaintiff thus
prayed, among others, that the defendants pay the daily
Antonio V. Raquiza & Assoc. for respondent Eugene A. charter hire from the time they were in arrears until
Tan. payment is made and that the Court allow the sale of the
cargoes to satisfy its claims.
 
On November 25, 1976, Sierra Madre Wood Industries,
DE CASTRO, J.: Inc., hereinafter called Sierra Madre, the alleged owner,
end-user and operator of MV San Vicente filed a motion to
In this petition for certiorari and prohibition with intervene in the Court of First Instance of Manila (Civil
preliminary injunction, petitioner seeks the annulment of Case No. 105048) for the purpose of enforcing its lien over
the order of respondent Judge of the Court of First Instance the cargo, claiming that it had chartered the vessel to Filcar
of Manila in Civil Case No. 105048 dated August 25, 1978 for six months renewable every six months at agreed
which approved the sale of the subject cargo and prays charter hire fee (US $825,000.00 per year). Respondent
instead that the writ of preliminary attachment over the Judge allowed the intervention of Sierra Madre as plaintiff-
same property issued by Hon. Gregorio Pineda of the Court intervenor.
of First Instance of Rizal in Civil Case No. 28710 be
allowed to remain in force. On December 2, 1976, Filcar filed an extra-parte motion to
sell the goods subject of lien, alleging among others, that
It appears that on October 22, 1976, respondent Filipinas the MV San Vicente had arrived in the Philippines, and was
Carriers, hereinafter referred to as Filcar, filed a complaint due for dry-docking and needed urgent repairs; and that the
for sum of money, enforcement of lien and damages with goods subject of its lien were in danger of deteriorating and
the Court of First Instance of Manila, and the same was losing their market value and if the goods were not sold
assigned to Branch X, which was presided by respondent immediately, the plaintiff would have to pay a staggering
Judge, against AB Charles Thorburn & Co., through its amount for warehousing so that the value of the goods
receiver Sjoegren and Winstrand; Estero Shipping and would not even be enough to pay for warehousing
Trading; Bank of Melli of Iran, Jeddah Branch; Perstorp expenses.
AB; Skogshgarnas Industries; Ekman and Company AB;
and Abdullah Baroom. In the complaint which was Thereafter, respondent Judge conducted hearings in Civil
docketed as Civil Case No. 105048, Filcar alleged that it is Case No. 105048 and an ocular inspection of the vessel. On
the disponent owner of a vessel, MV San Vicente, which April 18, 1977, respondent Judge, convinced that the vessel
was duly registered with the Republic of the Philippines; as well as the cargoes were in a very bad condition, issued
that on April 2, 1976, defendant Carles Thorburn & Co. an order, the dispositive portion of which reads:
chartered said vessel by time charter for two or three
months for a voyage from Sweden to Jeddah, Saudi Arabia WHEREFORE, in view of all the
at three thousand two hundred US dollars (US $3,200.00) a above and due to the condition of the
day, that Abdullah Baroom was impleaded as defendant for vessel and/or its cargo, while we are
being the agent of Charles Thorburn & Co. at Jeddah and not convinced as asserted that Section
Sjoegren and Winstrand of Sweden for being the receiver 17, Rule 14 and 15 of the Rules of
of Charles Thorburn & Co.; that the vessel left Sweden Court, do not apply, for we still believe
with construction materials as cargoes belonging to the that one of the four modes of service
following shippers and consignees, namely, defendants must at least be observed, yet on the
Bank of Melli of Iran, Jeddah Branch; the National ground of extreme necessity, this Court
Commercial Bank, Jeddah Branch; Perstorp AB of believes that somehow, somebody must
Perstorp, Sweden; Skogshgarnas Industries of Sweden; act boldly in order to protect the
Ekman and Company of Sweden; that after the second interest of parties and of the owner of
month, Charles Thorburn failed to pay the daily hire, that the vessel which is believed to be the
the vessel has been in Jeddah since May 19, 1976 and is government of the Philippines. On the
now in international waters; that in view of Thorburn's ground of extreme necessity and partly
failure to pay the charter hire, it had struck a lien through by virtue of the provisions of Rule 57,
 Section 1 1, the cargo on board the MV On November 15, 1977, petitioner, as Baroom's counsel,
San Vicente, is ordered sold privately, filed an answer with compulsory counterclaim, claiming
so that the vessel may immediately be that defendant Baroom is not an agent of Charles Thorburn
sent for drydock, subject to the since the cargoes belong to him, and denying the validity of
following conditions: plaintiff's lien over the cargo. Petitioner reiterates the
defense that plaintiff's action being in personam involving
l. That the negotiations for the sale of defendant who is not a resident within the territorial
the cargo shall be the sole jurisdiction of the Court, and there is no showing in the
responsibility of plaintiff Filcar subject records that the provisions of Section 17, Rule 14 in
to the supervision by this Court and the relation to Section 1, Rule 57, of the Rules of Court have
intervention of plaintiff-intervenor, the been complied with to convert the action in rem, the Court
Sierra Madre Wood Industries, Inc.; had no jurisdiction over the case. Baroom, through
petitioner, prayed that plaintiff be directed to deliver the
cargoes to Jeddah, pay damages corresponding to the full
2. That the Court and the plaintiff- value of the goods and to the lost income and profits he
intervenor be fully informed regarding could have realized had plaintiff delivered the cargo to him.
the progress of the negotiations and that Baroom, likewise, filed a cross-claim against Sierra Madre,
the sale shall not be finalized without plaintiff-intervenor.
first securing the approval of this Court
is to the selling price;
On January 23, 1978, petitioner filed with respondent Judge
a manifestation and motion that it be "allowed to withdraw
3. The proceeds of the sale shall be from this case and charging lien be recorded against the
deposited with a banking institution as properties of Mr. Baroom now aboard MV San Vicente for
approved by this Court and shall be unpaid professional fees and reimbursement expenses. " 4
disposed of only upon order of this
Court, subject to the first lien of
plaintiff-intervenor; and Thereafter, on February 17, 1978, petitioner filed before the
Court of First Instance of Rizal a complaint with a prayer
for a writ of preliminary attachment for the recovery of
4. Defendant AB Charles Thorburn & professional fees and reimbursement of expenses against
Co., etc. shall be notified of the Order Baroom whom it alleged to have represented in Civil Case
of this Court together with a copy of No. 105048, CFI, Manila. The case was docketed as Civil
the amended complaint and the Case No. 28710 and the same was assigned to Branch XXI
complaint in intervention, thru the presided over by Judge Gregorio C. Pineda.
Department of Foreign Affairs, and the
Philippine Embassy at Jeddah, Saudi
Arabia. Proof of Service shall be By virtue of the order dated February 28, 1978 issued by
submitted to this Court. After such time Judge Pineda in the new case, petitioner obtained a writ of
afforded the defendant, in order to preliminary attachment against Baroom's alleged cargoes
enable them to answer or appear in this which is the subject matter in Civil Case No. 105048.
Court or make any claim whatsoever,
and still they fail to make any Meanwhile, in Civil Case No. 105048, on August 2, 1978,
manifestation, hearing of this case shall respondent Judge gave Attys. Quasha and Valmonte ten
resume regarding the final disposition (10) days from receipt of order within which to explain
of the proceeds to all concerned. why they should not be held in contempt of court for filing
a case entitled "Quasha Asperilla Ancheta Valmonte Peña
On June 27, 1977, respondent Judge approved tentatively and Marcos vs. AlSayed Abdullah Mohammed Baroom"
the sale of the cargo to Bengzon's Industries. This Order docketed as Civil Case No. 28710 in the Court of First
was followed by another dated July 19, 1977, approving the Instance of Rizal, Branch XXI, where they obtained a writ
Deed of Absolute Sale of the cargo. 1 of preliminary attachment over the cargoes, which they
knew to be subject matter of Civil Case No. 105048
pending before his sala." 5 A compliance with said order
On August 15, 1977, petitioner law firm filed with was filed on August 24, 1978, with petitioner alleging that
respondent Judge a special appearance for defendant their cause of action against Baroom was for payment of
Ahmed Baroom contesting the Court's jurisdiction over professional fees and reimbursement of expenses while
Baroom's person and property and a Motion to Dismiss on Case No. 105048 before Judge Juan was for alleged unpaid
the ground that the Court had not acquired jurisdiction over charter hire fees.
Baroom's 'person or property aboard the MV San Vicente. 2
On August 25, 1978, respondent Judge issued an order
On August 29, 1977, respondent Judge issued an Order approving the sale of the cargo in question to Apollo Kokin
directing petitioner law firm to show on or before Trading Co., Ltd. In accordance with the earlier order of
September 20, 1977 a written authorization signed by its April 28, 1977, respondent Judge directed the deposit of the
client, Baroom, "since the latter is a foreigner". 3
sale proceeds with a banking institution to be approved by thus filed in this Court impleading Sierra Madre as partly
the Court and its disposition only on orders of the Court. 6 respondent in his case with prayer that a writ of
garnishment be issued on the proceeds of the sale of the
On September 8, 1978, Filcar filed with the Court of First cargoes which are in the possession of Sierra Madre, and an
Instance of Rizal an urgent omnibus motion to be allowed order be issued directing Sierra Madre and all those to
to appear and to dismiss the case and to lift the writ of whom such proceeds may subsequently be reassigned to
preliminary attachment and set aside the order to auction deliver to petitioner such portion of the proceeds of the sale
the cargo, attaching thereto the order of respondent Judge as would satisfy the attorney's lien in the interest of justice.
dated August 25, 1978, approving the sale in favor of
Apollo Kokin Trading Co., Ltd. of the subject cargo, the Coming back to the omnibus motion of Filcar for the lifting
proceeds of which after deducting all expenses shall be of the preliminary attachment issued by the Court of First
deposited with the court. Instance of Rizal, the said court on December 7, 1978
dismissed petitioner's case and lifted the preliminary
Thus, petitioner, on October 23, 1978, filed before this attachment issued therein. Upon motion for reconsideration
Court the instant petition. Petitioner assails the order of dated April 7, 1979, the said preliminary attachment was
August 25, 1978, not the earlier order of April 28, 1977 reinstated by the Court of First Instance of Rizal in its order
approving the sale in favor of Apollo Kokin Trading Co., dated July 5, 1979. 8
Ltd. of the questioned cargo for having been issued in
grave abuse of discretion considering that subject cargo After several pleading were filed in this Court, We gave
was allegedly earlier attached by the Court of First Instance due course to the petition. 9
of Rizal.
Petitioner contends that respondent court did not acquire
Without giving due course to the petition and pending the jurisdiction neither over any of the defendants as they have
filing of comments by respondents, this Court issued on not voluntarily submitted themselves to the jurisdiction of
October 24, 1978 a temporary restraining order, respondent court, nor over the res, since there had been no
seizure of the property under a legal process, as by a writ of
enjoining respondents to immediately attachment or other process of similar effect. The instant
cease and desist from taking, case is allegedly neither a proceeding in rem as would place
unloading, transferring, conveying, the property under its potential power citing the leading
transporting or disposing of the cargoes case of Banco Español v. Palanca 10 which held:
or any part thereof aboard the MC San
Vicente and Dong Myung, * or from Jurisdiction over the property which is
taking the cargoes away, subject matter the subject of litigation may result
of Civil Case No. 105048 entitled either from a seizure of the property
'Filipinas Carriers, Inc. vs. AB Charles under legal process, whereby it is
Thorburn & Co., et al.' of the Court of brought into the actual custody of the
First Instance of Manila, Branch X." 7 law, or it may result from the institution
of legal proceedings wherein under
On October 30, 1978, petitioner filed a manifestation and special provisions of law, the power of
motion informing this Court that notwithstanding the the court over the property is
restraining order, the MV Don Myung, with the cargo recognized and made effective. In the
aboard left surreptitiously at midnight of October 24, 1978 latter case the property, though at all
without the assistance of any pilot in violation of Harbor times within the potential power of the
rules. The goods were then allegedly sold for US court, may never be taken into actual
$220,200.43 under irrevocable letters of credit issued by custody at all. An illustration of the
the Fuji Bank of Osaka, Japan. Petitioner, thus, prayed that jurisdiction acquired by actual seizure
several persons, namely, Mr. Federico Tabora, Jr., is found in attachment proceedings,
President of Filipinas Carriers, Inc., Mr. Gregorio where the property is seized at the
Gatchalian, allegedly operations manager of the American beginning of the action, or some
Steamship Agencies, Inc. being the agent representing the subsequent stage of its progress and
MV Dong Myung, Lt. JG Godofredo Orcullo of the held to abide the final event of the
Operations Center and Seaman 1st Class Avelino Lontoc of litigation. An illustration of what we
the Philippine Coast Guard be cited for contempt. term potential jurisdiction over
the res is found in the proceeding to
register the title of land under our
In the meanwhile, a compromise agreement dated October system for the registration of land. Here
16, 1978 and filed on November 2, 1978 wherein Filcar the court, without taking actual
assigned its interests and rights in the proceeds of the sale physical control over the property
of the subject cargoes to Sierra Madre which the latter assumes, at the instance of some person
accepted was approved by the respondent court in its claiming to be the owner, to exercise a
decision of November 3, 1978. An amended petition was jurisdiction in rem over the property
 and to adjudicate the title in favor of Philippines, the Philippine courts
the petitioner against all the world. cannot try any case against him because
of impossibility of acquiring
Claiming that it was the Court of First Instance of Pasig jurisdiction over his person, unless he
that first acquired jurisdiction over the res to the exclusion voluntarily appears in court. But when
of respondent court, petitioner insists that the latter court's the action ... is intended to seize or
act is undue interference which cannot be countenanced. dispose of any property, real or
personal, of the defendant, located in
the Philippines, it may validly be tried
There is no pretense that respondent court has jurisdiction by the Philippine courts, for then, they
over the cause of action. It is much too obvious to merit a have jurisdiction over the res, i.e. ... the
fuller discussion. Suffice it to say that an action based upon property of the defendant, and their
an oral contract of transportation of goods by water is an jurisdiction over the person of the non-
action in admiralty which comes under the original and resident is not essential ... . (Citing I
exclusive jurisdiction of the Court of First Instance Moran's Comments on the Rules of
irrespective of the value of the cargo. 11 Court, 2d Ed., 105).

As to the person of Baroom, it is to be conceded that at the At any rate, defendant Baroom filed later, aside from a
initial stage of the proceeding in the Court of First Instance motion to dismiss, an answer with counterclaim praying
of Manila prior to the issuance of the order of April 28, that plaintiff be directed to deliver the cargoes of defendant
1977 directing the sale of the property and petitioner's Baroom to Jeddah and to pay damages, etc. and a cross-
firing of various pleadings, said court did not have claim against Sierra Madre, thereby abandoning any
jurisdiction over Baroom. Baroom was a non-resident alien question on jurisdiction over the person and submitting
and he was beyond the reach of the court's legal processes. himself to the jurisdiction of the court. In Tenchavez vs.
But since the action is brought principally for the Escaño, 13 this Court quoted with approval the ruling
enforcement of maritime lien against the property of in Merchant's Heat and Light Co. vs. Clow & Sons, 204 U.
defendants who failed to pay the charter hire fee, and S. 286, 51 Law Ed. 488:
therefore the same is in the nature and character of a
proceeding quasi in rem, jurisdiction over defendant
Baroom is not essential. An action quasi in rem has been We assume that the defendant lost no
defined as "an action between parties where the direct rights by pleading to the merits, as
object is to reach and dispose of property owned by them or required, after saving its rights.
of some interest therein." As such the properties allegedly Harkness vs. Hyde, 98 U.S. 476, 25 L.
owned by him are primarily made liable. In elucidating the ed. 237; Southern P. Co. vs. Denton,
characteristic of a proceeding where a non-resident 146 U.S. 202, 36 L. ed. 943, 13 Sup.
defendant fails to appear, this Court in the aforecited Ct. Rep. 44. But by setting up its
leading case of Banco Español Filipino v. Palanca said: counterclaim the defendant became a
plaintiff in its turn, invoked the
jurisdiction of the court in same action,
If however, the defendant is a non- and, by invoking submitted to it. It is
resident and, remaining beyond the true that the counterclaim seems to
range of the personal process of the have arisen wholly out of the same
court, refuses to come in voluntarily, transaction that the plaintiff sued upon,
the court never acquires jurisdiction and so to have been in recoupment
over the person at all. Here the property rather than in set-off proper. But, even
itself is in fact the sole thing which is at common law, since the doctrine has
impleaded and is the responsible object been developed, as demand in
which is the subject of the exercise of recoupment is recognized as a cross
judicial power. It follows that the demand, as distinguished from a
jurisdiction of the court in such case is defense. Therefore, although there has
based exclusively on the power which, been a difference of opinion as to
under the law, it possesses over the whether a defendant, by pleading it, is
property; and any discussion relative to concluded by the judgment from
the jurisdiction of the court over the bringing a subsequent suit for the
person of the defendant is entirely apart residue of his claim, a judgment in his
from the case. favor being impossible at common law,
the authorities agree that he is not
The foregoing ruling was applied in Mabanag vs. concluded by the judgment if he does
Ganimore: 12 not plead his cross demand, and that
whether he shall do so or not is left
As a general rule, when the defendant wholly to his choice. Davis vs. Hedges,
is not residing and is not found in the L.R. 6 Q.B. 687; Mondel vs. Steel, 8
 Mees & W. 858, 872; O'Connor vs. Where a party in actual possession of
Varney, 10 Gray, 231. This single fact the res subject to the lien is before the
shows that the defendant, if he elects to court, the res is within the jurisdiction
sue upon his claim in the action against of the court for the enforcement of the
him, assumes the position of an actor lien A suit may be maintained to
and must take the consequence. The foreclose a lien on property within the
right to do so is of modern growth, and jurisdiction of the court, although some
is merely a convenience that saves interest or claim therein is held by a
bringing another suit, not a necessity of non-resident. 15
the defense.
The other argument posed by petitioner to challenge
In the aforecited case, the Court explains that the rule is respondents' right over the property is that there is no
such because "it cannot look with favor upon a party privity of contract between Baroom and respondents. It
adopting not merely inconsistent, but actually avers that Baroom is not merely the agent of Thorburn but
contradictory; positions in one and the same suit, claiming himself the owner of some of the cargoes and whose
that a court has no jurisdiction to render judgment against contract to ship the same is with sub-charterer Thorburn. It
it, but has such jurisdiction to give a decision its favor. 14 avers further that neither Thorburn could attach a lien on
the property since Baroom had allegedly paid fully for the
It may be noted that if the defendant voluntarily appears, shipment even before the vessel sailed, as evidenced by the
the action becomes as to him a personal action and is clean freight pre-paid bills of lading.
conducted as such. Even then, the court does not lose its
jurisdiction over the res, assuming that it has indeed Claiming right over the cargo to answer for the unpaid
jurisdiction over the res. The res still remains under its professional fees, petitioner submits to this Court the
control and disposition. required written authority from Baroom claiming that due
to snag in communication and unreliability of the mailing
As regards jurisdiction over the res, We hold that system it did not receive the documents from its client on
respondent acquires jurisdiction over it. Where a property time.
is burdened by a lien, a writ of attachment is no longer
necessary in order that jurisdiction over the property may The foregoing entails determination of facts. It would be
be obtained by the court. In the same cited case by highly irregular if this Court would have to resolve those
petitioner, in the Banco Español case, it was clarified: questions, this Court not being a trier of facts. The several
documents mentioned by petitioner and attached to its
In an ordinary attachment proceeding, pleadings before this Court were never presented before the
if the defendant is not personally lower court. After Baroom had abandoned his defense
served, the preliminary seizure is to be which created the presumption that he had no defense, that
considered necessary in order to confer he is not the owner of the cargo, petitioner should have
jurisdiction upon the court. In this case pursued the same argument before respondent court in
the lien on the property is acquired by claiming the alleged professional fee. This is in accordance
seizure; and the purpose of the with Article 1177 of the New Civil Code which provides:
proceeding is to subject the property to
that lien. If a lien already exists, Art. 1177. The creditors having
whether created by mortgage, contract, pursued the property in possession of
or statute, the preliminary seizure is not the debtor to satisfy their claims may
necessary, and the court proceeds to exercise all the rights and bring all the
enforce such lien in the manner actions of the latter for the same
provided by law precisely as though the purpose, save those which are inherent
property had been seized upon in his person, they may also impugn the
attachment. (Roller v. Holly, 176 U.S. acts which the debtor may have done to
398, 405; 44 L. ed. 520). defraud them.

The reason for the rule is obvious. An attachment Indeed, petitioner should have maintained its action in
proceeding is for the purpose of creating a lien on the respondent's court. After all, a court which has in its
property to serve as security for the payment of the possession, control or equivalent dominion, property or
creditors' claim. Hence, where a lien already exists, as in funds involved in litigation may exercise exclusive
this case a maritime lien, the same is already equivalent to jurisdiction over such property or funds to determine the
an attachment. Moreover, since the property subject of the rights therein, such as questions respecting the title,
action for the enforcement of the maritime liens was possession or control, management and disposition thereof
already in the possession of private respondent, there is no and another court of concurrent or coordinate jurisdiction
need for seizure for the court to obtain jurisdiction over the cannot interfere with such possession or control. 16 The
rest. rights to be determined by said court necessarily include
the attorney's fees due to the lawyers who represented the 4. The pre-paid freight representation
parties. Significantly, the lower court which undoubtedly of Baroom is false because the
has in its favor the presumption of regularity and which condition of the L/C issued by the 3
was never restrained by this Court from proceeding with consignee banks provides a C/F
the ease issued an order dated January 25, 1979 17 making arrangement which means payment of
the following findings of fact: the goods, insurance and freight can
only be made upon physical delivery of
1. Thorburn fails to pay the freight so the goods in Jeddah.
that respondent Filcar had the right to
impose its lien on the cargo including 5. Baroom intervened in the case
sub-freights. (before respondent court) using the
Quasha law office. He later withdrew
Paragraph 16 of the upon knowing he has no defense. In
time charter fact, he did not even give Quasha
contract provides: written authority to appear for him as
his lawyer.
That the owners
shall have a lien 6. The court of respondent Judge "has
upon all cargoes jurisdiction over the person of
and all sub-freights defendant and subject cargo of the
for any amounts vessel.
due under this
Charter including 7. The Quasha law office is not entitled
General Average to any claim for attorney's lien
contributions and
the charterers to Prescinding from the foregoing, We find no abuse of
have a lien on the discretion in issuing the questioned order of August 25,
ship for all monies 1978, and therefore the instant petition should be
paid in advance and dismissed. It could not be claimed that the act of
not earned, and respondent Judge in issuing the said order amounts to
any'overpaid hire interference with the writ of attachment dated February 28,
or excess deposit to 1978 issued by Judge Pineda, for by the time the said writ
be returned at once. was issued, respondent Judge had already control and
Charterers will not disposition of the case. The order of August 25, 1978 was
suffer nor permit to but an implementation of the earlier order of April 28, 1977
be continued, any directing the sale of the cargoes on the ground of extreme
lien or necessity as the cargoes as found by respondent Judge upon
encumbrance ocular inspection were in danger of deteriorating and losing
incurred by them or their market value and the vessel was also in danger of
their agents, which sinking. By then, respondent Judge had also issued the
might have priority order dated July 19, 1977 approving a Deed of Sale of
over the title and subject cargoes.
interest of the
owners of the
vessel. It should be noted that at the time petitioner filed the action
before Judge Pineda, it has already submitted itself to the
jurisdiction of respondent court and in fact its "charging
2. Thorburn executed a liner term lien" which is the same cause of action before Judge Pineda
contract with Baroom who was playing was still pending before respondent court. Pending also
the double role of agent of said before respondent Judge were petitioner's answer with
Thorburn and agent of three consignee counterclaim, cross claim, motion to dismiss and motion to
banks in Jeddah. withdraw from the case.

3. Baroom appealed to Filcar to be its Petitioner may not enforce its attorney's lien, which
agent, but when it was discovered that accordingly is based on Section 37 of Rule 138 which
he was the agent of Charles Thorburn provides:
and the three (3) consignee banks, the
application was rejected due to conflict
of interest. Sec. 37. Attorney's lien.— An attorney
shall have a lien upon the funds,
documents and papers of his client
which have lawfully come into his
 possession and may retain the same sold, everything became fait accompli and the case before
until his lawful fees and disbursements Us moot and academic.
have been paid and may apply such
funds to the satisfaction thereof. He Petitioner prays for the garnishment of the proceeds, but to
shall also have a lien to the same extent allow the same, there must first be a determination of the
upon all judgments for the payment of ownership of the cargo. Again, We say We are not in a
money, and executions issued in position to do so. Petitioner failed to file motion for
pursuance of such judgments, which he reconsideration of the order of August 25, 1978 approving
has secured in a litigation of his client, the sale of the cargo, and it abandoned its own case before
from and after the time when he shall respondent Judge. The result of its negligence in allowing
have caused a statement's of his claim considerable period to lapse before claiming right over the
of such lien to be entered upon the cargo, and resorting to injunctive relief must be borne by it.
records of the court rendering such Petitioner is not entitled to any relief and the instant
judgment, or issuing such execution, petition must be dismissed. We shall also dismiss
and shad have caused written notice petitioner's charge of contempt against respondent since as
thereof to be delivered to his client and We said before, before the temporary restraining or order
to the adverse party; and he shall have could be served everything was already fait accompli .
the same right and power over such
judgments and executions as his client
would have to enforce his lien and Likewise, We also dismiss the respondents' charge against
secure the payment of his just fees and petitioner for direct contempt for allegedly omitting
disbursements. material facts vital to the fun appreciation of this Court. In
De Midgely vs. Ferandos, 18 this Court ruled that such tactic
is generally tolerated because understandably lawyers are
Based on the foregoing provision, the liens for attorney's apt to slant the presentation of their clients' case so that
fees and expenses apply only on the funds or documents of they would have favorable judgments. "Courts are not
clients which lawfully come to the possession of the deceived by the exaggerations and distortions in a counsel's
counsel (called retaining lien) and to all judgments secured lopsided submission of his client's case especially where, as
by the counsel (called charging lien). In his manifestation in this case, the alert opposing counsel calls the court's
and motion before respondent Judge, petitioner is claiming attention to that fact. "
for his charging lien But it should be noted that at the time
of its filing, the orders of April 27, 1977 ordering the sale
of the cargoes and July 19, 1977 approving the Deed of Indeed, "contempt of court presupposes a contumacious
Sale of cargoes were already in existence and both were in attitude, a flouting of arrogant belligerence, a defiance of
fact in favor of private respondent. It is curious to note that the court. 19 It is an offense against the authority and dignity
petitioner never questioned said orders on appeal or by a of the court.
special civil action. Petitioner's client in fact even
abandoned its case. Hence, having no favorable judgment WHEREFORE, the petition is hereby dismissed.
that could be anticipated, the charging lien has no leg to
stand on. Perhaps because it was aware of its predicament SO ORDERED.
that petitioner filed an independent action for recovery of
its professional fees and for reimbursement of expenses
which would have been proper, except that the ownership Makasiar (Chairman), Aquino, Concepcion, Jr. and
of the property sought to be attached was questionable and Guerrero, JJ., concur.
the same was already sold by respondent court. But just as
We had said before, 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. We hasten to add, however, that 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.

On October 24, 1978, We issued a temporary restraining

order enjoining the disposition or unloading of the cargoes.
It turned out, however, that before the said order could be
served upon the private respondents, all the cargoes subject
of the petition had been loaded into the M.V. Dong Myung,
of which this Court has no jurisdiction being a foreign
vessel. When the vessel sailed and the cargoes eventually
G.R. Nos. 65957-58 July 5, 1994 spare parts, and other personal property with the aggregate
value of P15,000,000.00. The said court also granted the
ELEAZAR V. ADLAWAN and ELENA S. motion of respondent Aboitiz to take possession and
ADLAWAN, petitioners,  custody of the attached property of petitioners and ordered
vs. the Provincial Sheriff of Davao to deliver the property to
Hon. Judge RAMON AM. TORRES, as Presiding respondent Aboitiz.
Judge of Branch 6, Regional Trial Court Cebu City,
ABOITIZ & COMPANY, INC. and THE Petitioners moved for a bill of particulars and to set aside
PROVINCIAL SHERIFFS OF CEBU, DAVAO, the ex parte writ of attachment. Finding merit in the motion
RIZAL and METRO MANILA, to set aside the writ, Branch 11 ordered on July 6, 1982 the
Respectively, respondents. lifting of the writ and, consequently, the discharge of the
property levied upon.
Pablo P. Garcia for petitioners.
Respondent Aboitiz filed an urgent ex parte motion,
Isaias P. Dicdican and Sylva G. Aguirre-Paderanga for praying for the stay of the July 6, 1982 Order for a period
Aboitiz & Co., Inc. of 15 days for it to be able to appeal the order. The motion
was favorably acted upon.
 
However, on July 13, 1982, respondent Aboitiz filed a
notice of dismissal of its complaint in accordance with
QUIASON, J.: Section 1, Rule 17 of the Revised Rules of Court.
Consequently, Branch 11 issued an order confirming the
This is a petitioner for certiorari and mandamus with notice of dismissal, emphasizing that all orders of the court
preliminary injunction or restraining order to nullify: (1) issued prior to the filing of said notice of dismissal had
the Order dated September 14, 1983 of respondent Judge been rendered functus oficio, and considering all pending
Ramon Am. Torres of the Regional Trial Court, Branch 6, incidents in the case as moot and academic.
Cebu City, in Civil Case No. CEB-1185 and the Order
dated September 26, 1983 of Judge Emilio A. Jacinto of Petitioner Eleazar Adlawan filed a motion praying that the
Branch 23 of the same court in Civil Case No. CEB-1186, July 6, 1982 Order be implemented and enforced. On
which granted the motion for the issuance of writs of December 20, however, Branch 11 denied the motion on
preliminary attachment for the seizure of the property of account of the filing by respondent Aboitiz before Branch
petitioners by respondent Provincial Sheriffs; and (2) the 16 of the Court of First Instance of Cebu in Lapu-lapu City
Order dated December 12, 1983 of respondent Judge of an action for delivery of personal property (Civil Case
Ramon Am. Torres in the consolidated cases, Civil Case No. 619-L), and the filing by petitioner Eleazar Adlawan
No. CEB-1185 and Civil Case No. CEB-1186. before Branch 10 of the same court of an action for
damages in connection with the seizure of his property
I under the writ of attachment.

In a complaint dated April 24, 1982 filed with the Court of In the replevin suit, Branch 16 ordered the seizure and
First Instance of Cebu, now Regional Trial Court, (Civil delivery of the property described in the complaint. Said
Case No. R-21761), respondent Aboitiz and Company, Inc. property were later delivered by the provincial sheriff to
(Aboitiz) sought to collect from petitioners a sum of money respondent Aboitiz. Alleging that while his office was
representing payments for: (1) the unpaid amortizations of situated in Cebu City, Adlawan was a resident of
a loan; (2) technical and managerial services rendered; and Minglanilla, and therefore, the Lapu-lapu City court should
(3) the unpaid installments of the equipment provided by not entertain the action for replevin. Petitioner Eleazar
respondent Aboitiz to petitioners (Rollo, p. 37). Adlawan filed an omnibus motion praying for the
reconsideration and dissolution of the writ of seizure, the
Acting on the ex parte application for attachment, the retrieval of the property seized, and the dismissal of the
Executive Judge of the Court of First Instance of Cebu, complaint. He also averred that the property seized were
issued on May 14, 1982, an order directing the issuance of in custodia legis by virtue of the writ of attachment issued
the writ of preliminary attachment against the property of by Branch 11. His omnibus motion was denied.
petitioners upon the filing by respondent Aboitiz of an Subsequently, he filed a motion for reconsideration which
attachment bond. was not granted.

Subsequently, the case was raffled to Branch 11 of the The denial of his omnibus motion led petitioner Eleazar
Court of First Instance of Cebu, which issued a writ of Adlawan to file a petition for certiorari and mandamus in
attachment addressed to the Provincial Sheriffs of Cebu and the Supreme Court (G.R. No. 63225). The Third Division
the City Sheriff of Davao City. It was the Sheriff of Davao of this Court ruled on April 3, 1990 that since attachment is
City who enforced the writ of attachment, resulting in the an ancillary remedy, the withdrawal of the complaint left it
seizure of heavy construction equipment, motor vehicle
with no leg to stand on. Thus, the Court disposed of the (defendant therein) was awarded a contract for the
case as follows: construction of the Tago Diversion Works for the Tago
River Irrigation Project by the National Irrigation
WHEREFORE, in view of the Administration and that respondent Aboitiz (plaintiff
foregoing, this Court rules that the therein) loaned him money and equipment, which
attached properties left in the custody indebtedness as of June 30, 1983 totaled P13,430,259.14.
of private respondent Aboitiz and Paragraph 16 of the complaint states:
Company, Inc. be returned to petitioner
Eleazar V. Adlawan without prejudice 16. That, in view of the enormous
to the outcome of the cases filed by liabilities which the defendants have
both parties (Rollo, p. 324). with the plaintiff, defendants executed
a real estate mortgage covering eleven
Respondent Aboitiz filed a motion for reconsideration of (11) parcels of land in favor of
the decision, contending that the replevin case was distinct Philippine Commercial and Industrial
and separate from the case where the writ of attachment Bank (PCIB) to secure a P1,000,000.00
was issued. It argued that the writ of replevin, therefore, loan with said bank and was able to
remained in force as the Third Division of the Supreme remove, conceal and dispose of their
Court had not found it illegal. The motion was, however, properties, obviously to defraud the
denied with finality in the Resolution of July 11, 1990. plaintiff, . . . (Rollo, pp. 65-66).

Undaunted, respondent Aboitiz filed a second motion for The complaint in Civil Case No. CEB-1186 alleged that
reconsideration with a prayer that the dispositive portion of petitioner Eleazar Adlawan (defendant therein) was
the decision be clarified. It asserted that because the writ of awarded a contract for the construction of the Lasang River
preliminary attachment was different from the writ of Irrigation Project by the National Irrigation Administration
replevin, we should rule that the property subject of the and that respondent Aboitiz (plaintiff therein) loaned him
latter writ should remain in custodia legis of the court money and equipment, which indebtedness as of June 30,
issuing the said writ. 1983 totalled P5,370,672.08. Paragraph 15 of the complaint
is similarly worded as paragraph 16 of the complaint in
Civil Case No. CEB-1185.
In the Resolution dated September 10, 1990, the Third
Division stated that "the properties to be returned to
petitioner are only those held by private respondent Civil Case No. CEB-1185 was raffled to the Regional Trial
(Aboitiz) by virtue of the writ of attachment which has Court, Branch 6, presided by respondent Judge Ramon Am.
been declared non-existent." Accordingly, the dispositive Torres. On September 14, 1983, respondent Judge ordered
portion of the April 3, 1990 decision of the Third Division the issuance of a writ of attachment upon respondent
of this Court was modified to read as follows: Aboitiz' filing of a bond of P5,000,000.00. Similarly, in
Civil Case No. CEB-1186, which was raffled to Branch 23,
presiding Judge Emilio A. Jacinto ordered the issuance of a
WHEREFORE, in view of the writ of attachment upon the filing of a bond of
foregoing, this Court rules that the P2,500,000.00. Accordingly, in Civil Case No. CEB-1185,
properties in the custody of the private the Acting Provincial Sheriff of Cebu issued separate writs
respondent Aboitiz & Company by dated September 26, 1983 addressed to the Sheriffs of
virtue of the writ of attachment issued Cebu, Davao and Metro Manila. No writ of preliminary
in Civil Case No. R-21761 be returned attachment was, however, issued in Civil Case No. CEB-
to the petitioner, but properties in the 1186.
custody of the private respondent by
virtue of the writ of replevin issued in
Civil Case No. 619-L be continued Petitioners then filed in Civil Cases Nos. CEB-1185 and
in custodia legis of said court pending CEB-1186 urgent motions to hold in abeyance the
litigation therein. enforcement of the writs of attachments. They alleged in
the main that since their property had been previously
attached and said attachment was being questioned before
The Decision in G.R. No. 63225 having become final and the Supreme Court in G.R. No. 63225, the filing of the two
executory, entry of judgment was made on November 15, cases, as well as the issuance of the writs of attachment,
1990. This should have terminated the controversy between constituted undue interference with the processes of this
petitioners and respondent Aboitiz insofar as the Supreme court in the then pending petition involving the same
Court was concerned, but that was not to be. On September property.
9, 1983 respondent Aboitiz filed against petitioners two
complaints for collection of sums of money with prayers
for the issuance of writs of attachment in the Regional Trail Upon motion of respondent Aboitiz, Branch 23 issued on
Court, Branch 23, Cebu City, docketed as Civil Cases Nos. October 13, 1983, an order directing the transfer to Branch
CEB-1185 and CEB-1186. The complaint in Civil Case No. 6 of Civil Case No. CEB-1186 for consolidation with Civil
CEB-1185 alleged that petitioner Eleazar Adlawan Case No. CEB-1185.
Meanwhile, in its comment on petitioners' motion to for them to continue their business operations even after
withhold the enforcement of the writs of attachment, respondent Aboitiz had stopped giving them financial aid.
respondent Aboitiz alleged that the voluntary dismissal of
Civil Case No. R-21761 under Section 1, Rule 17 of the Petitioners also contended that respondent Judge exceeded
Revised Rules of Court was without prejudice to the his jurisdiction when he issued the Order of December 12,
institution of another action based on the same subject 1983, without first hearing the parties on the motion for
matter. It averred that the issuance of the writ of attachment attachment and the motion to dissolve the attachment.
was justified because petitioners were intending to defraud Moreover, they argued that respondent Judge gravely
respondent Aboitiz by mortgaging 11 parcels of land to the abused his discretion in proceeding with the case,
Philippine Commercial and Industrial Bank (PCIB) in notwithstanding that his attention had been called with
consideration of the loan of P1,100,000.00, thereby making regard to the pendency of G.R. No. 63225 in this Court.
PCIB a preferred creditor to the prejudice of respondent
Aboitiz, which had an exposure amounting to
P13,430,259.14. As prayed for by petitioners, we issued a temporary
restraining order on January 6, 1984 "enjoining the
respondents from enforcing or implementing the writs of
Petitioners then filed a rejoinder to said comment, preliminary attachment against the property of petitioners,
contending that since the property subject of the writ of all dated September 26, 1983 and issued in Civil Cases
attachment have earlier been attached or replevied, the Nos. CEB 1185 and 1186" (Rollo, p. 118).
same property were under custodia legis and therefore
could not be the subject of other writs of attachment.
II
On December 12, 1983, respondent Judge issued an order
finding no merit in petitioners' motion for reconsideration The resolution of this case centers on the issue of the
and directing the sheriffs of Cebu, Davao and Metro Manila legality of the writ of attachment issued by respondent
"to proceed with the enforcement and implementation of Judge in the consolidated cases for collection of sums of
the writs of preliminary attachment." Respondent Judge money.
ruled that the writs of attachment were issued on the basis
of the supporting affidavits alleging that petitioner had The affidavit submitted by respondent Aboitiz in support of
removed or disposed of their property with intent to its prayer for the writ of attachment does not meet the
defraud respondent Aboitiz (Rollo, pp. 109-113). requirements of Rule 57 of the Revised Rules of Court
regarding the allegations on impending fraudulent removal,
On December 15, petitioners filed an ex parte motion concealment and disposition of defendant's property. As
praying: (1) that the December 12, 1983 Order be set for held in Carpio v. Macadaeg, 9 SCRA 552 (1963), to justify
hearing; (2) that they be given 15 days within which to a preliminary attachment, the removal or disposal must
either file a motion for reconsideration or elevate the matter have been made with intent to defraud defendant's
to this Court or the then Intermediate Appellate Court; and creditors. Proof of fraud is mandated by paragraphs (d) and
(3) that within the same 15-day period the implementation (e) of Section 1, Rule 57 of the Revised Rules of Court on
or enforcement of the writs of attachment be held in the grounds upon which attachment may issue. Thus, the
abeyance. factual basis on defendant's intent to defraud must be
clearly alleged in the affidavit in support of the prayer for
the writ of attachment if not so specifically alleged in the
On the same day, respondent Judge issued an order holding verified complaint. The affidavit submitted by respondent
in abeyance the enforcement of the writs of preliminary Aboitiz states:
attachment in order to afford petitioners an opportunity to
seek their other remedies (Rollo, p. 116).
REPUBLIC OF THE PHILIPPINES
CITY OF CEBU ...............) S.S.
On December 27, petitioners filed the instant petition
for certiorari and mandamus. They alleged that respondent
Judge gravely abused his discretion in ordering the issuance I, ROMAN S. RONQUILLO, of legal
of the writs of preliminary attachment inasmuch as the real age, married and a resident of Cebu
estate mortgage executed by them in favor of PCIB did not City, after being sworn in accordance
constitute fraudulent removal, concealment or disposition with law, hereby depose and say:
of property. They argued that granting the mortgage
constituted removal or disposition of property, it was That I am the Vice-President of the
not per se a ground for attachment lacking proof of intent plaintiff corporation in the above-
to defraud the creditors of the defendant. entitled case;

Petitioners contended that in Civil Case No. 21761, Branch That a sufficient cause of action exists
11 had ruled that the loan for which the mortgage was against the defendants named therein
executed was contracted in good faith, as it was necessary because the said defendants are
indebted to the plaintiffs in the amount
 of P13,430,259.14 exclusive of some facts required by law to be stated therein, there is no
interests thereon and damages claimed; jurisdiction and the proceedings are null and void."

That the defendants have removed or Bare allegation that an encumbrance of a property is in
disposed of their properties with intent fraud of the creditor does not suffice. Factual bases for such
to defraud the plaintiff, their creditor, conclusion must be clearly averred.
because on May 27, 1982 they
executed a real estate mortgage in favor The execution of a mortgage in favor of another creditor is
of Philippine Commercial and not conceived by the Rules as one of the means of
Industrial Bank (PCIB) covering eleven fraudulently disposing of one's property. By mortgaging a
(11) of their fifteen (15) parcels of land piece of property, a debtor merely subjects it to a lien but
in Cebu to secure a P1,000,000.00 loan ownership thereof is not parted with.
with the same bank;
Furthermore, the inability to pay one's creditors is not
That this action is one of those necessarily synonymous with fraudulent intent not to honor
specifically mentioned in Section 1, an obligation (Insular Bank of Asia & America, Inc. v.
Rule 57 of the Rules of Court, whereby Court of Appeals, 190 SCRA 629 [1990]).
a writ preliminary attachment may
lawfully issue because the action
therein is one against parties who have Consequently, when petitioners filed a motion for the
removed or disposed of their properties reconsideration of the order directing the issuance of the
with intent to defraud their creditor, writ of attachment, respondent Judge should have
plaintiff herein; considered it as a motion for the discharge of the
attachment and should have conducted a hearing or
required submission of counter-affidavits from the
That there is no sufficient security for petitioners, if only to gather facts in support of the
the claims sought to be enforced by the allegation of fraud (Jopillo, Jr. v. Court of Appeals, 167
present action; SCRA 247 [1988]). This is what Section 13 of Rule 57
mandates.
That the total amount due to the
plaintiff in the above-entitled case is This procedure should be followed because, as the Court
P13,430,259.14, excluding interests has time and again said, attachment is a harsh,
and claim for damages and is as much extraordinary and summary remedy and the rules governing
the sum for which an order of its issuance must be construed strictly against the applicant.
attachment is herein sought to be Verily, a writ of attachment can only be granted on
granted; above all legal counter-claims concrete and specific grounds and not on general averments
on the part of the defendants. quoting perfunctorily the words of the Rules (D.P. Lub Oil
Marketing Center, Inc. v. Nicolas, 191 SCRA 423 [1990]).
IN VIEW WHEREOF, I hereunto set
my hand this 24th day of August 1983 The judge before whom the application is made exercises
at Cebu City, Philippines. full discretion in considering the supporting evidence
proffered by the applicant. One overriding consideration is
(Sgd.) that a writ of attachment is substantially a writ of execution
RAMON except that it emanates atS.the beginning, instead of atRONQUILLO
the
Affiant termination of the suit (Santos v. Aquino, Jr., 205 SCRA
127 [1992]; Tay Chun Suy v. Court of Appeals, 212 SCRA
(Rollo, pp. 171-172) 713 [1992]).

It is evident from said affidavit that the prayer for We need not discuss the issue of whether or not Civil Cases
attachment rests on the mortgage by petitioners of 11 Nos. CEB-1185 and CEB-1186 constituted undue
parcels of land in Cebu, which encumbrance respondent interference with the proceedings in G.R. No. 63225 in
Aboitiz considered as fraudulent concealment of property view of the entry of judgment in the latter case.
to its prejudice. We find, however, that there is no factual
allegation which may constitute as a valid basis for the WHEREFORE, the petition is GRANTED and the
contention that the mortgage was in fraud of respondent Temporary Restraining Order issued on January 6, 1984 is
Aboitiz. As this Court said in Jardine-Manila Finance, Inc. made PERMANENT. Respondent Judge or whoever is the
v. Court of Appeals, 171 SCRA 636 (1989), "[T]he general presiding judge of the Regional Trial Court, Branch 6,
rule is that the affidavit is the foundation of the writ, and if Cebu City, is DIRECTED to PROCEED with the
none be filed or one be filed which wholly fails to set out resolution of Civil Cases Nos. CEB-1185 and CEB-1186
with deliberate dispatch.
SO ORDERED. GOLDEN STAR INDUSTRIAL CORPORATION,
NICOS INDUSTRIAL CORPORATION and THE
PROVINCIAL SHERIFF OF BULACAN, respondents.

C.M. Delos Reyes and Associates for petitioner.

Magtanggol C. Gunigundo and Fajardo Law office for

respondents.

GUTIERREZ, JR., J.:

The basic issue for resolution in this petition for review of

the December 13, 1985 decision of the Intermediate
Appellate Court, now the Court of Appeals, as well as the
resolution of March 13, 1986 denying the motion for
reconsideration, is whether or not an attaching creditor
acquires the right of redemption of a debtor over the
attached properties of the latter which are subsequently
extrajudicially foreclosed by third parties.

Briefly, the facts are as follows: Originally, petitioner

Consolidated Bank and Trust Corporation (SOLIDBANK)
loaned private respondent NICOS Industrial Corporation
(NICOS) sums of money in the total amount of FOUR
MILLION SEVENTY SIX THOUSAND FIVE
HUNDRED EIGHTEEN AND 64/100 PESOS
(P4,076,518.64).

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 case
was docketed as Civil Case No. 82-11611.

On August 30, 1982, 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).

On September 1, 1982, pursuant to the writ of attachment

issued by the Court and upon petitioner's posting of
sufficient bond, 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, dated September 1, 1982
requesting him "to make the proper annotation in the books
of your office" by virtue of the order of attachment dated
August 30,1982 issued by the Manila Court in Civil Case
No. 82-11611.
THE CONSOLIDATED BANK and TRUST
CORPORATION (SOLIDBANK), petitioner, 
vs. Accordingly, on September 7, 1982, the Registrar of Deeds
HON. INTERMEDIATE APPELLATE COURT, of Malolos, Bulacan, pursuant to the request of the Manila
Sheriff, inscribed and annotated the Notices of Levy Upon
Real Property at the back of Transfer Certificates of Title On June 9, 1984, the Malolos Court issued an order
Nos. T-210581 (T-32.505 M) and T-210580 (T-32.504 M). denying the omnibus motion, the decretal portion of which
is as follows:
Pursuant to the foregoing ng inscription and annotations,
guards were deputized by the Manila Sheriff to secure the WHEREFORE, the Omnibus Motion
premises of the two attached realties. of movant Consolidated Bank and
Trust Corporation to annul the writ of
A year later, however, on July 11, 1983, the attached possession issued by this Court in favor
properties which had been mortgaged by NICOS to the of Golden Star Industrial Corporation
United Coconut Planters Bank (UCPB) on March 11, 1982, and to cite for contempt those who
were extrajudicially foreclosed by the latter. As the highest fraudulently secured and unlawfully
bidder therein, a certificate of sale was issued to it by the implemented the writ of possession is
Sheriff of Bulacan over the subject realties including the hereby DENIED for lack of merit. (p. 8
buildings and improvements thereon. of the Brief for the Complainant-
Oppositor-Appellant in AC-G.R. CV
No. 04398 [p.118, Rollo])
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 The petitioner SOLIDBANK forthwith interposed an
to a certain Manuel Go; Second, Manuel Go sold all the appeal before the Intermediate Appellate Court
rights he acquired from UCPB over the same lots on that arguing inter alia that the properties were under custodia
very same day to private respondent Golden Star Industrial legis, hence the extrajudicial foreclosure and the writ of
Corporation (GOLDEN STAR). possession were null and void, and that the right of NICOS
to redeem the auctioned properties had been acquired by
SOLIDBANK.
Barely a month later, on October 5, 1983, respondent
NICOS, though fully aware that it still had the right to
redeem the auctioned properties within the one year period On December 13, 1985, the Intermediate Appellate Court
of redemption from July 11, 1983, suddenly executed a rendered its assailed decision "finding no merit in this
document entitled "Waiver of Right of Redemption" in appeal and affirming in toto the appealed order of June 9,
favor of respondent GOLDEN STAR. 1984, ruling that "the properties in issue ... were not
in custodia legis at the time of the extrajudicial
foreclosure."
On September 15, 1983, 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 The petitioner moved for reconsideration, arguing that its
Malolos, Bulacan. writ of attachment over the properties in question was duly
registered in the Register of Deeds of Malolos, Bulacan,
and that the right to redeem said properties should be
On November 4, 1983, the Malolos Court granted retained or given back to SOLIDBANK as attaching
GOLDEN STAR's petition for a writ of possession and creditor.
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 On March 13, 1986, the Intermediate Appellate Court
Sheriff of Manila to secure the premises. promulgated its resolution denying the motion for
reconsideration for lack of merit.
Thus on November 21, 1983, petitioner SOLIDBANK, on
the strength of its prior attachment over the lands in Hence this petition for review, on the grounds that
question filed with the Malolos court an omnibus motion to respondent appellate court decided the case contrary to law
annul the writ of possession issued to GOLDEN STAR and and applicable decisions of the Supreme Court, and has
to punish for contempt of court the persons who departed from the accepted and usual course of judicial
implemented the writ of possession with the use of force proceedings as to call for an exercise of the power of
and intimidation. supervision of this Court.

The respondents NICOS and GOLDEN STAR, filed The fundamental question herein, which is determinative of
oppositions to the foregoing omnibus motion, the former on the other issues, is whether or not the subject properties
the basis of the waiver of its right of redemption to were under custodia legis by virtue of the prior annotation
GOLDEN STAR, and the latter on its alleged ignorance of a writ of attachment in petitioner's favor at the time the
that the lands in question were under custodia legis, having properties were extrajudicially foreclosed.
been attached by the Sheriff of Manila.
We rule in the affirmative on the following grounds:
First of all, the records show (specifically Annexes "B," BANK AND TRUST
"B-1" to "B-3" of the petition) that on September 1, 1982, CORPORATION (SOLIDBANK) —
the Sheriff of Branch XXIX of the Court of First Instance Plaintiff; Conditions: Notice is hereby
of Manila, sent separate Notices of Levy Upon Realty to given that by virtue of an Order of
the Registrar of Deeds of Malolos Bulacan, requesting him Attachment issued by the C.F.I. of
"to make the proper annotation in the books of your office," Manila, Branch XXIX, in Civil Case
"by virtue of an order of attachment issued in Civil Case No. 82-11611, all the rights, interest
No. 82-11611 dated August 30, 1982, ... upon the rights, and participation of NICOS
interests, and participation of which defendant NICOS INDUSTRIAL CORPORATION —
Industrial Corporation in this case may have Defendants over the herein described
in ... ."Transfer Certificate of Title No. T-210581 (T-32.505 lot is hereby levied upon attached.;
M) and Transfer Certificate of Title No. T-210580 (T- Date of Instrument; September 1, 1982;
32,505 M). Date of Inscription: September 7, 1982
at 2:35.
Secondly, and more significant, the records clearly show
(page 4, Annex "D" of petition) that the Registrar of Deeds Meycauayan, Bulacan.
of Malolos, Bulacan, on September 7, 1982, inscribed and
annotated the foregoing Notices of Levy at the back of (SGD.) VIOLETA
Transfer Certificate of Title Nos. 210580 and 210581, to GARCIA
wit:
Branch Register of D
TRANSFER CERTIFICATE OF
TITLE
(pp. 91-92, Rollo)
No. T-210580 (T-32.504 M)
Based on the foregoing evidence on record, the conclusion
is clear that the disputed real properties were
Entry No. 79524 (M): Kind; NOTICE under custodia legis by virtue of a valid attachment at the
OF LEVY UPON REALTY, Executed time the same were extrajudicially foreclosed by a third
in favor of the CONSOLIDATED party mortgagee.
BANK AND TRUST
CORPORATION (SOLIDBANK);-
Plaintiff; Conditions: Notice is hereby The rule is well settled that when a writ of attachment has
given that by virtue of an Order of been levied on real property or any interest therein
Attachment issued by the C.F.I. of belonging to the judgment debtor, the levy thus effected
Manila, Branch XXIX, in Civil Case creates a lien which nothing can destroy but its dissolution
No. 82-11611, all the rights, interest (Chua Pua Hermanos v. Register of Deeds of Batangas, 50
and participation of NICOS Phil. 670; Government, et. al. v. Mercado, 67 Phil. 409).
INDUSTRIAL CORPORATION-
Defendant over the herein described lot The foregoing conclusion has two necessary consequences.
is hereby levied upon attached.; Date of
Instrument: September 1, 1982; Date of Firstly, it follows that the writ of possession issued by the
Inscription: September 7, 1982 at 2:35. Malolos court in favor of respondent GOLDEN STAR is
nun and void ab initio because it interfered with the
Meycauayan, Bulacan. jurisdiction of a co-ordinate and co-equal court (See De
Leon v. Salvador, 36 SCRA 567):
(SGD.) VIOLETA
R. LINCALLO While property or money is in custodia
GARCIA legis, the officer holding it is the mere
hand of the court, his possession is the
Branch Register of Deeds possession of the court, and to interfere
with it is to invade the jurisdiction of
the court itself (Gende v. Fleming, 371
TRANSFER CERTIFICATE OF N.E. 2d. 191; Bishop v. Atlantic
TITLE Smokeless Coal Co., 88F. Supp. 27, 7
CJS 320).
No. T-210581 (T-32.505 M)
Of equal importance is the fact that the transactions on
Entry No. 79524 (M); Kind: NOTICE which respondent GOLDEN STAR's right to a writ of
OF LEVY UPON REALTY, Executed possession are based are highly irregular and questionable,
in favor of THE CONSOLIDATED to say the least, considering the following circumstances:
On July 11, 1983, the Sheriff of Bulacan executed a without the petitioner bank ever exercising any right of
certificate of sale over the two lots in question in favor of redemption.
UCPB.
This argument is untenable. Well settled is the rule that the
On August 29, 1983, or about a month and a half later, pendency of an action tolls the term of the right of
UCPB sold its rights, interests and participation over the redemption. Specifically, tills Court in Ong Chua v. Carr,
lands to Manuel Go. (53 Phil. 975, 983) categorically ruled that:

On that very same day, August 29, 1983, Manuel Go sold xxx xxx xxx
the same properties to respondent GOLDEN STAR.
... Neither was it error on the part of the
On October 5, 1983, respondent NICOS which had a one court to hold that the pendency of the
year right of redemption over the lands in question action tolled the term for the right of
executed a "Waiver of Right of Redemption in favor of redemption; that is an old and well
respondent GOLDEN STAR." The attempts to bring the established rule.
disputed properties out of the petitioner's reach, inspite of
the attachment, are plain and apparent. This was reiterated in Fernandez v. Suplido (96 Phil. 541,
543), as follows:
Based on the foregoing facts, we find that respondents
NICOS and GOLDEN STAR conspired to defeat xxx xxx xxx
petitioner's lien on the attached properties and to deny the
latter its right of redemption.
... As pointed out in Ong Chua v. Carr,
53 Phil. 975, the pendency of an action
It appears that in issuing the writ of possession, the Malolos brought in good faith and relating to the
court relied on copies of documents (which did not show validity of a sale with pacto de
the memorandum of encumbrance) submitted to it by retro tolls the term for the right of
GOLDEN STAR. It was thus led into the error of ruling redemption. ...
that the petitioner's attachment was not properly annotated.
Not only that. It has been held that "under a statute limiting
Secondly, it likewise follows that the petitioner has the time for redemption ... the right of redemption
acquired by operation of law the right of redemption over continues after perfection of an appeal ... until the decision
the foreclosed properties pursuant to Sec. 6 of Act No. of the appeal (Philadelphia Mortgage Co. v. Gustus, 75
3135, to wit: N.W. 1107).

In all such cases in which an In the case at bar, the petitioner commenced the instant
extrajudicial sale is made ... any person action by way of an omnibus motion before the Bulacan
having a lien on the property Court on November 21, 1983 or barely two months after
subsequent to the mortgage ... may the certificate of sale was registered on September 6, 1983,
redeem the same at any time within the well within the one year period of redemption.
term of one year from and after the date
of sale.
WHEREFORE, IN VIEW OF THE FOREGOING, the
petition is granted and judgment is hereby rendered:
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 1) declaring as valid and binding the levy and attachment
right to redeem from a prior mortgage" (Lyon v. Stanford, by the Manila Sheriff on the two realties in question
5 Conn. 541, 7 SJS 505). including the buildings and improvements thereon;

The fact that respondent NICOS executed a waiver of right 2) declaring that petitioner has acquired the right of
of redemption in favor of respondent GOLDEN STAR on redemption over the aforesaid properties which it may
October 5, 1983 is of no moment as by that time it had no exercise within one year from notice of entry of judgment
more right which it may waive in favor of another, in this case; and

Finally, GOLDEN STAR argues that even if the attachment 3) declaring as null and void (a) the order of the Bulacan
in issue was duly registered and the petitioner has a right of Court dated November 4, 1983 granting the writ of
redemption, the certificate of sale of the lands in question possession to respondent GOLDEN STAR, (b) its order of
was registered on September 6, 1983. It claims that the June 9, 1984 denying the petitioner's omnibus motion, and
period to redeem therefore lapsed on September 6, 1984 (c) the Waiver of Right of Redemption executed by
respondent NICOS in favor of respondent GOLDEN
STAR.

SO ORDERED.

G.R. No. L-37682             November 26, 1932

CLAUDE NEON LIGHTS, FEDERAL INC., U. S.

A., petitioner, 
vs.
PHILIPPINE ADVERTISING CORPORATION and
FRANCISCO SANTAMARIA, Judge of First Instance
of Manila, respondents.

Gibbs & McDonough for petitioner.

Courtney Whitney for respondents.

BUTTE, J.:

This case is to be determined upon the petition for writ

of certiorari and the demurrer thereto filed by the
respondents. 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 The petitioner for certiorari prays that the writ of
a receiver of the property which was seized by the sheriff attachment issued by the respondent judge on April 6,
under said writ of attachment. 1932, as well as the order of the same date, appointing
Manuel C. Grey receiver of the property of the petitioner,
On April 5, 1932, the respondent Philippine Advertising be annulled.
Corporation filed suit against the petitioner in the Court of
First Instance of Manila, claiming P300,000 as damages for The sufficiency of the application for the writ of attachment
alleged breach of the agency contract existing between the assailed by the petitioner upon several grounds but we shall
said respondent and the petitioner. At the same time, said confine ourselves to the consideration of the question
respondent filed in said court an application for writ of whether or not paragraph 2 of section 424 of the Code of
attachment duly verified in which it is stated that the Civil Procedure is applicable to this petitioner.
defendant (petitioner herein) is a foreign corporation
having its principal place of business in the City of The petitioner is a corporation duly organized under the
Washington, District of Columbia. It is not alleged in said laws of the District of Columbia; it had complied with all
application that the defendant, Claude Neon Lights, Inc. the requirements of the Philippine laws and the was duly
(the petitioner herein) was about to depart from the licensed to do business in the Philippine Islands on the date
Philippine Islands with intent to defraud its creditors or that said writ of attachment was issues. The petitioner was
it was insolvent or had removed or disposed of its property actively engaged in doing business in the Philippine Islands
or was about to do so with intent to defraud its creditors. and had considerable property therein, which consisted to
The only statutory ground relied upon in the court below its manufacturing plant, machinery, merchandise and a
and in this court for the issuance of the writ of attachment large income under valuable contracts, all of which
against the petitioner is paragraph 2 of section 424 of the property was in the possession and under the control and
Code of Civil Procedure, which provides that plaintiff may management of the respondent Philippine Advertising
have the property of the defendant attached "in an action Corporation, as the agent of the petitioner, on the date said
against a defendant not residing in the Philippine Islands". attachment was levied. Considered from a practical and
economic viewpoint, its position in the business community
On April 6, 1932, the respondent judge issued the writ of was indistinguishable from that of a domestic corporation.
attachment as prayed for, and the sheriff has attached all
the properties of the petitioner in the Philippine Islands. On Section 242 of the Code of Civil Procedure under which the
the same date, on the ex parte petition and nomination of petitioner's property was attached, reads as follows:
the respondent, the respondent judge appointed Manuel C.
Grey receiver of said properties of the petitioner, fixing his
bond at P3,000. Attachment. — A plaintiff may, at the
commencement of his action, or at any time
afterwards, have the property of the defendant
Motions to dissolve said writ of attachment and attached as security for the satisfaction of any
receivership were fled in the court below, supported by judgment that may be recovered, unless the
affidavits of the attorney in fact for the petitioner in which defendant gives security to pay such judgment, in
it is recited, among other things, that the petitioner is not the manner hereinafter provided, in the following
indebted to the respondent in any sum whatever nor has it cases.
in any way breached any contracts with the respondent or at
any time interfered in the management of its business in the
Philippine Islands as carried on by its agent, the 1. In all the cases mentioned in section four
respondent, and it has faithfully complied with every hundred and twelve, providing for the arrest of a
condition of said contract; that the attachment of the defendant. But the plaintiff must make an
machinery and plants of the petitioner, as well as its other election as to whether he will ask for an order of
assets, is highly prejudicial to it as it is unable to proceed arrest or an order of attachment; he shall not be
with its business in the Philippine Islands and irreparable entitled to both orders;
loss will result to it unless such attachment be raised; that
the filing of said suit was malicious, without foundation, 2. In an action against a defendant not residing in
and intended only to injure the petitioner and to depreciate the Philippine Islands.
the value of its holdings in the Philippine Islands. It does
not appear that any answer was made to said motion in It may be observed at the outset that the words of section
which said allegations were denied or that any refuting 424, supra, taken in their literal sense seem to refer to a
evidence was offered. physical defendant who is capable of being "arrested" or
who is "not residing in the Philippine Islands". It is only by
On June 20 1932, the court denied said motions to vacate a fiction that it can be held that a corporation is "not
the attachment and receivership, declaring that the writ of residing in the Philippine Islands". A corporation has no
attachment conforms to section 424 of the Code of Civil home or residence in the sense in which those terms are
Procedure. applied to natural persons. For practical purposes, a
corporation is sometimes said, in a metaphorical sense, to
be "a resident" of a certain state or a "citizen" of a certain
country, which is usually the state or country by which or If, as we believe, section 424, paragraph 2, should not be
under the laws of which it was created. But that fiction or held applicable to foreign corporations duly licensed to do
analogy between corporations and natural persons by no business in the Philippine Islands both because the
means extends so far that it can be said that every statute language and the reason of the statute limit it to natural
applicable to natural persons is applicable to corporations. persons, we sustain and reinforce the provisions of section
Indeed, within the same jurisdiction a corporation has been 71 of the Corporation Law, Act No. 1459, which provides
held to be a "citizen" of the state of its creation for the in substance that if the Secretary of Finance or the
purpose of determining the jurisdiction of the Federal Secretary of Commerce and Communications and the
courts (Wisconsin vs. Pelican Insurance Co., 127 U. S., Governor-General find a duly licensed foreign corporation
265) but not a "citizen" within the meaning of section 2 of to be insolvent or that its continuance in business will
article 4 of the Constitution of the United States which involve probable loss to its creditors, they may revoke its
provides that the citizens of each state shall be entitled to license and "the Attorney-General shall take such
all the privileges and immunities of citizens of the several proceedings as may be proper to protect creditors and the
states (Paul vs. Virginia, 8 Wall., 169). public". Section 71, supra, contemplates that the
proceedings instituted by the Attorney-General shall effect
The question arises whether this petitioner, a foreign the protection of all creditors and the public equally.
corporation, shall, in a metaphorical sense, be deemed as Obviously, the benefit of that section will be minimized, if
"not residing in the Philippine Islands" in the sense in not entirely defeated, if a creditor or a few creditors can
which that expression would apply to a natural person. obtain privileged liens by writs of attachment based on the
sole allegation, which is easily and safely made, that the
corporation is "not residing in the Philippine Islands". (Cf.
Having regard to the reason for the statute which is the Kuenzle & Streiff vs. Villanueva, 41 Phil., 611.)lawphil.net
protection of the creditors of a non-resident, we are of the
opinion that there is not the same reason for subjecting a
duly licensed foreign corporation to the attachment of its Paragraph 2 of section 424, supra does not apply to a
property by a plaintiff under section 424, paragraph 2, as domestic corporation. Our laws and jurisprudence indicate
may exist in the case of a natural person not residing in the a purpose to assimilate foreign corporations, duly licensed
Philippine Islands. The law does not require the latter, as it to do business here, to the status of domestic corporations.
does the former, to appoint a resident agent for service of (Cf. Section 73, Act No. 1459, and Marshall Wells
process; nor to prove to the satisfaction of the Government Co. vs. Henry W. Elser & Co., 46 Phil., 70, 76; Yu Cong
before he does business here, as the foreign corporation Eng vs. Trinidad, 47 Phil., 385, 411.) We think it would be
must prove, that he "is solvent and in sound financial entirely out of line with this policy should we make a
condition" (section 68, Act No. 1459, as amended, the discrimination against a foreign corporation, like the
Corporation Law), or to produce evidence of "fair dealing" petitioner, and subject its property to the harsh writ of
(ibid.). He pays no license fee nor is his business subject at seizure by attachment when it has complied not only with
any time to investigation by the Secretary of Finance and every requirement of law made especially of foreign
the Governor-General; nor is his right to continue to do corporations, but in addition with every requirement of law
business revocable by the Government (Cf. section 71, Act made of domestic corporations. (Section 73, supra.)
No. 1459 of the Corporation Law). His books and papers
are not liable to examination "at any time" by the Attorney- It is true that the majority of the states in the American
General, the Insular Auditor, the Insular Treasurer, "or any Union hold the contrary rule. But our situation is obviously
other officer of the Government" on the order of the very dissimilar from that of a state in the American Union.
Governor-General (section 54, ibid.). He is not, like a There forty-eight states and the central government, all
foreign corporation "bound by all laws, rules and creating corporations which do a tremendous interstate
regulations applicable to domestic corporations" . . . business, are contiguous and separated by imaginary lines.
(section 73, ibid.), which are designed to protect creditors A higher degree of protection against irresponsible
and the public. He can evade service of summons and other corporations may be more necessary there than here. We
legal process, the foreign corporation never. (Section have no interstate business. Only the central government
72, ibid.) grants charters to corporations. But even in the American
Union there is a minority rule which we regard as the better
Corporations, as a rule, are less mobile than individuals. reasoned and the better suited to our conditions, both
This is a specially true of foreign corporations that are geographical and economical, and more nearly in harmony
carrying on business by proper authority in these Islands. with the policy of our law both under the Spanish regime
They possess, as a rule, great capital which is seeking and since the American occupation. This minority rule is
lucrative and more or less permanent investment in young supported by the following authorities: Brand vs. Auto
and developing countries like our Philippines. Some of Service Co. (New Jersey, 1907), 67 Atl., 19, 20;
them came here as far back as the Spanish regime and are Mellor vs. Edward V. Hartford, Inc. (New Jersey, 1929),
still important factors in our financial and industrial life. 146 Atl., 206; Charles Friend & Co. vs. Gold Smith & Co.
They are anything but "fly-by-night" concerns. The latter, (Illinois, 1923), 138 N. E., 185; Fullilove vs. Central State
we believe, are effectually excluded from our Islands both Bank (Louisiana, 1926), 107 So., 590.
by our laws and by our geographical and economic
situation.
In the present instance, a particularly monstrous result has
followed as s 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".
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. Costs in both
instances to be borne by the respondent, Philippine
Advertising Corporation. So ordered.

Avanceña, C.J., Street, Malcolm, Villamor, Ostrand, Villa-

Real, Abad Santos, Vickers and Imperial, JJ., concur.

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

ABOITIZ & COMPANY, INC., HONORABLE

VICENTE N. CUSI JR., Judge of the Court of First
Instance of Davao, and the PROVINCIAL SHERIFF
OF DAVAO DEL SUR, petitioners, 
vs.
COTABATO BUS COMPANY, INC., respondent.

DE CASTRO, J.:

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 l) EVEN AN IMPORTANT FACT,
provincial sheriff attached personal properties of the ESTABLISHED BY
defendant bus company consisting of some buses, DOCUMENTARY EVIDENCE AND
machinery and equipment. The ground for the NOT DENIED BY RESPONDENT,
issuance of the writ is, as alleged in the complaint and IS MENTIONED ONLY AS A
the affidavit of merit executed by the Assistant "CLAIM" OF PETITIONER
Manager of petitioner, that the defendant "has COMPANY;
removed or disposed of its properties or assets, or is
about to do so, with intent to defraud its creditors." 2) THE DECISION CONTAINS NO
DISCUSSION AND
Respondent company filed in the lower court an APPRECIATION OF THE FACTS
"Urgent Motion to Dissolve or Quash Writ of AS PROVED, ASSEMBLED AND
Attachment" to which was attached an affidavit PRESENTED BY PETITIONER
executed by its Assistant Manager, Baldovino COMPANY SHOWING IN —
Lagbao, alleging among other things that "the THEIR TOTALITY — THAT
Cotabato Bus Company has not been selling or RESPONDENT HAS REMOVED,
disposing of its properties, neither does it intend to do DIVERTED OR DISPOSED OF ITS
so, much less to defraud its creditors; that also the BANK DEPOSITS, INCOME AND
Cotabato Bus Company, Inc. has been acquiring and OTHER LIQUID ASSETS WITH
buying more assets". An opposition and a INTENT TO DEFRAUD ITS
supplemental opposition were filed to the urgent CREDITORS, ESPECIALLY ITS
motion. The lower court denied the motion stating in UNSECURED SUPPLIERS;
its Order that "the testimony of Baldovino Lagbao,
witness for the defendant, corroborates the facts in 3) THE DECISION IGNORES THE
the plaintiff's affidavit instead of disproving or showing SIGNIFICANCE OF THE REFUSAL
them to be untrue." OF RESPONDENT TO PERMIT,
UNDER REP. ACT NO. 1405, THE
A motion for reconsideration was filed by the METROPOLITAN BANK & TRUST
defendant bus company but the lower court denied it. CO. TO BRING, IN COMPLIANCE
Hence, the defendant went to the Court of Appeals on WITH A subpoena DUCES TECUM
a petition for certiorari alleging grave abuse of TO THE TRIAL COURT ALL THE
discretion on the part of herein respondent Judge, RECORDS OF RESPONDENT'S
Hon. Vicente R. Cusi Jr. On giving due course to the DEPOSITS AND WITHDRAWALS
petition, the Court of Appeals issued a restraining UNDER ITS CURRENT AND
order restraining the trial court from enforcing further SAVINGS ACCOUNTS (NOW NIL)
the writ of attachment and from proceeding with the FOR EXAMINATION BY
hearing of Civil Case No. 7329. In its decision PETITIONER COMPANY FOR THE
promulgated on October 3, 1971, the Court of PURPOSE OF SHOWING
Appeals declared "null and void the order/writ of DIRECTLY THE REMOVAL,
attachment dated November 3, 1971 and the orders DIVERSION OR DISPOSAL OF
of December 2, 1971, as well as that of December 11, RESPONDENT'S DEPOSITS AND
1971, ordered the release of the attached properties, INCOME WITH INTENT TO
and made the restraining order originally issued DEFRAUD ITS CREDITORS.
permanent.
ERROR II
The present recourse is an appeal by certiorari from
the decision of the Court of Appeals reversing the THE COURT OF APPEALS
assailed orders of the Court of First Instance of ERRED IN NOT APPRECIATING
Davao, (Branch I), petitioner assigning against the THE FACTS THAT
lower court the following errors: RESPONDENT'S BANK
DEPOSITS ARE NIL AS PROOF
ERROR I WHICH - TOGETHER WITH
RESPONDENT'S ADMISSION OF
THE COURT OF APPEALS AN INCOME OF FROM P10,000.00
ERRED IN HASTILY AND to P 14,000.00 A DAY AND THE
PERFUNCTORILY RENDERING, EVIDENCE THAT IT CANNOT
ON OCTOBER 3, 1971, A PRODUCE P 634.00 WITHOUT
DECISION WITHOUT USING A PERSONAL CHECK OF
CONSIDERING MOST OF THE ITS PRESIDENT AND MAJORITY
EVIDENCE SUCH THAT — STOCKHOLDER, AND OTHER
EVIDENCE — SHOWS THE
 REMOVAL OR CHANNELING OF Aside from the reference petitioner had made to
ITS INCOME TO THE LATTER. respondent company's "nil" bank account, as if to
show removal of company's funds, petitioner also
ERROR III 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
THE COURT OF APPEALS income averaging P12,000.00, and the rescue and
ERRED IN NOT APPRECIATING removal of five attached buses.
THE RESCUE AND REMOVAL BY
RESPONDENT OF FIVE
ATTACHED BUSES, DURING THE It is an undisputed fact that, as averred by petitioner
DEPENDENCY OF ITS MOTION itself, the several buses attached are nearly junks.
TO DISSOLVE THE However, upon permission by the sheriff, five of them
ATTACHMENT IN THE, TRIAL were repaired, but they were substituted with five
COURT, AS A FURTHER ACT OF buses which were also in the same condition as the
REMOVAL OF PROPERTIES BY five repaired ones before the repair. This cannot be
RESPONDENT WITH INTENT TO the removal intended as ground for the issuance of a
DEFRAUD PETITIONER writ of attachment under section 1 (e), Rule 57, of the
COMPANY, FOR WHOSE Rules of Court. The repair of the five buses was
BENEFIT SAID BUSES HAD BEEN evidently motivated by a desire to serve the interest of
ATTACHED. 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
The questions raised are mainly, if not solely, factual substitution to be placed in running condition.
revolving on whether respondent bus company has in
fact removed its properties, or is about to do so, in
fraud of its creditors. This being so, the findings of the Moreover, as the buses were mortgaged to the DBP,
Court of Appeals on said issues of facts are generally their removal or disposal as alleged by petitioner to
considered conclusive and final, and should no longer provide the basis for its prayer for the issuance of a
be disturbed. However, We gave due course to the writ of attachment should be very remote, if not nil. If
petition because it raises also a legal question of removal of the buses had in fact been committed,
whether the writ of attachment was properly issued which seems to exist only in petitioner's apprehensive
upon a showing that defendant is on the verge of imagination, the DBP should not have failed to take
insolvency and may no longer satisfy its just debts proper court action, both civil and criminal, which
without issuing the writ. This may be inferred from the apparently has not been done.
emphasis laid by petitioner on the fact that even for
the measly amount of P 634.00 payment thereof was The dwindling of respondent's bank account despite
made with a personal check of the respondent its daily income of from P10,000.00 to P14,000.00 is
company's president and majority stockholder, and its easily explained by its having to meet heavy operating
debts to several creditors, including secured ones like expenses, which include salaries and wages of
the DBP, have remained unpaid, despite its supposed employees and workers. If, indeed the income of the
daily income of an average of P 12,000.00, as company were sufficiently profitable, it should not
declared by its assistant manager, Baldovino allow its buses to fall into disuse by lack of repairs. It
Lagbao. 1 should also maintain a good credit standing with its
suppliers of equipment, and other needs of the
Going forthwith to this question of whether insolvency, company to keep its business a going concern.
which petitioners in effect claims to have been proven Petitioner is only one of the suppliers.
by the evidence, particularly by company's bank
account which has been reduced to nil, may be a It is, indeed, extremely hard to remove the buses,
ground for the issuance of a writ of attachment, the machinery and other equipments which respondent
respondent Court of Appeals correctly took its position company have to own and keep to be able to engage
in the negative on the strength of the explicit ruling of and continue in the operation of its transportation
this Court in Max Chamorro & Co. vs. Philippine business. The sale or other form of disposition of any
Ready Mix Concrete Company, Inc. and Hon. Manuel of this kind of property is not difficult of detection or
P. Barcelona. 2 discovery, and strangely, petitioner, has adduced no
proof of any sale or transfer of any of them, which
Petitioner, however, disclaims any intention of should have been easily obtainable.
advancing the theory that insolvency is a ground for
the issuance of a writ of attachment , 3 and insists that In the main, therefore, We find that the respondent
its evidence -is intended to prove his assertion that Court of Appeals has not committed any reversible
respondent company has disposed, or is about to error, much less grave abuse of discretion, except
dispose, of its properties, in fraud of its creditors. that the restraining order issued by it should not have
included restraining the trial court from hearing the
case, altogether. Accordingly, the instant petition is
hereby denied, but the trial court is hereby ordered to
immediately proceed with the hearing of Civil Case
No. 7329 and decide it in accordance with the law and
the evidence. No special pronouncement as to costs.

SO ORDERED.

Barredo (Chairman), Guerrero *, and Abad Santos,

JJ., concur.

Aquino, J., concurs in the result.

Concepcion Jr., J., took no part.

G.R. No. L-33112 June 15, 1978

PHILIPPINE NATIONAL BANK, petitioner, 

vs.
HON. JUDGE JAVIER PABALAN, Judge of the
Court of First Instance, Branch III, La Union,
AGOO TOBACCO PLANTERS ASSOCIATION,
INC., PHILIPPINE VIRGINIA TOBACCO
ADMINISTRATION, and PANFILO P. JIMENEZ,
Deputy Sheriff, La Union, respondents.

Conrado E. Medina, Edgardo M. Magtalas & Walfrido

Climaco for petitioner.

Felimon A. Aspirin fit respondent Agoo 'Tobacco

Planters Association, Inc.

Virgilio C. Abejo for respondent Phil. Virginia Tobacco

Administration.

 
FERNANDO, Acting C.J.: paragraph of this decision, this Court, in a case
brought by the same petitioner precisely invoking
The reliance of petitioner Philippine National Bank in such a doctrine, left no doubt that the funds of public
this certiorari and prohibition proceeding against corporations could properly be made the object of a
respondent Judge Javier Pabalan who issued a writ of notice of garnishment. Accordingly, this petition must
execution, 1 followed thereafter by a notice of fail.
garnishment of the funds of respondent Philippine
Virginia Tobacco Administration, 2 deposited with it, is 1. The alleged grave abuse of discretion, the basis of
on the fundamental constitutional law doctrine of non- this certiorari proceeding, was sought to be justified
suability of a state, it being alleged that such funds on the failure of respondent Judge to set aside the
are public in character. This is not the first time notice of garnishment of funds belonging to
petitioner raised that issue. It did so before in respondent Philippine Virginia Tobacco
Philippine National Bank v. Court of industrial Administration. This excerpt from the aforecited
Relations, 3 decided only last January. It did not meet decision of Philippine National Bank v. Court of
with success, this Court ruling in accordance with the Industrial Relations makes manifest why such an
two previous cases of National Shipyard and Steel argument is far from persuasive. "The premise that
Corporation 4and Manila Hotel Employees Association the funds could be spoken as public character may be
v. Manila Hotel Company, 5 that funds of public accepted in the sense that the People Homesite and
corporations which can sue and be sued were not Housing Corporation was a government-owned entity.
exempt from garnishment. As respondent Philippine It does not follow though that they were exempt. from
Virginia Tobacco Administration is likewise a public garnishment. National Shipyard and Steel Corporation
corporation possessed of the same attributes, 6 a v. Court of Industrial Relations is squarely in point. As
similar outcome is indicated. This petition must be was explicitly stated in the opinion of the then Justice,
dismissed. later Chief Justice, Concepcion: "The allegation to the
effect that the funds of the NASSCO are public funds
It is undisputed that the judgment against respondent of the government, and that, as such, the same may
Philippine Virginia Tobacco Administration had not be garnished, attached or levied upon, is
reached the stage of finality. A writ of execution was, untenable for, as a government owned and controlled
therefore, in order. It was accordingly issued on corporation, the NASSCO has a personality of its
December 17, 1970. 7There was a notice of own. distinct and separate from that of the
garnishment for the full amount mentioned in such Government. It has — pursuant to Section 2 of
writ of execution in the sum of P12,724,66. 8 In view Executive Order No. 356, dated October 23, 1950 ... ,
of the objection, however, by petitioner Philippine pursuant to which The NASSCO has been
National Bank on the above ground, coupled with an established — all the powers of a corporation under
inquiry as to whether or not respondent Philippine the Corporation Law ... ." Accordingly, it may be sue
Virginia Tobacco Administration had funds deposited and be sued and may be subjected to court
with petitioner's La Union branch, it was not until processes just like any other corporation (Section 13,
January 25, 1971 that the order sought to be set Act No. 1459, as amended.)" ... To repeat, the ruling
aside in this certiorari proceeding was issued by was the appropriate remedy for the prevailing party
respondent Judge. 9 Its dispositive portion reads as which could proceed against the funds of a corporate
follows: Conformably with the foregoing, it is now entity even if owned or controlled by the
ordered, in accordance with law, that sufficient funds government." 12
of the Philippine Virginia Tobacco Administration now
deposited with the Philippine National Bank, La Union 2. The National Shipyard and Steel Corporation
Branch, shall be garnished and delivered to the decision was not the first of its kind. The ruling therein
plaintiff immediately to satisfy the Writ of Execution for could be inferred from the judgment announced in
one-half of the amount awarded in the decision of Manila Hotel Employees Association v. Manila Hotel
November 16, 1970." 10 Hence this certiorari and Company, decided as far back as 1941. 13 In the
prohibition proceeding. language of its ponente Justice Ozaeta "On the other
hand, it is well-settled that when the government
As noted at the outset, petitioner Philippine National enters into commercial business, it abandons its
Bank would invoke the doctrine of non-suability. It is sovereign capacity and is to be treated like any other
to be admitted that under the present Constitution, corporation. (Bank of the United States v. Planters'
what was formerly implicit as a fundamental doctrine Bank, 9 Wheat. 904, 6 L.ed. 244). By engaging in a
in constitutional law has been set forth in express particular business thru the instrumentality of a
terms: "The State may not be sued without its corporation, the government divests itself pro hac
consent." 11 If the funds appertained to one of the vice of its sovereign character, so as to render the
regular departments or offices in the government, corporation subject to the rules of law governing
then, certainly, such a provision would be a bar to private corporations." 14 It is worth mentioning that
garnishment. Such is not the case here. Garnishment Justice Ozaeta could find support for such a
would lie. Only last January, as noted in the opening pronouncement from the leading American Supreme
Court case of united States v. Planters' Bank, 15 with
the opinion coming from the illustrious Chief Justice
Marshall. It was handed down more than one hundred
fifty years ago, 1824 to be exact. It is apparent,
therefore, that petitioner Bank could it legally set forth
as a bar or impediment to a notice of garnishment the
doctrine of non-suability.

WHEREFORE, this petition for certiorari and

prohibition is dismissed. No costs.

Barredo, Antonio, Aquino, and Santos, JJ., concur.

Concepcion, Jr., J., is on leave.