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VOL. 219, MARCH 1, 1993 321

Master Tours and Travel Corporation vs. Court of Appeals

*
G.R. No. 105409. March 1, 1993.

MASTER TOURS and TRAVEL CORPORATION,

petitioner, vs. HON. COURT OF APPEALS, (Twelfth
Division), HON. LEONARDO I. CRUZ, Presiding Judge of
the Regional Trial Court of Manila, Branch 25,
FRANCISCO SALVADOR, Deputy Sheriff, RTC of Manila,
Branch 25, and CATHAY PACIFIC AIRWAYS, LTD.,
respondents.

Remedial Law; Provisional Remedies; Attachment; There is no

principle statutory or jurisprudential which prohibits the issuance
of a writ of preliminary attachment by any court before acquisition
of jurisdiction over the person of the defendant.—"A preliminary
attachment may be defined, paraphrasing the Rules of Court, as
the provisional remedy in virtue of which a plaintiff or other
proper party may, at the commencement of the action or at any
time thereafter, have the property of the adverse party taken into
the custody of the court as security for the satisfaction of any
judgment that may be recovered. It is a remedy which is purely
statutory in respect of which the law requires a strict construction
of the provisions granting it. Withal no principle, statutory or
jurisprudential, prohibits its issuance by any court before
acquisition of jurisdiction over the person of the defendant.
Same; Same; Same; The phrase "at the commencement of the
action" obviously refers to the date of the filing of the complaint.—
Rule 57 in fact speaks of the grant of the remedy 'at the
commencement of the action or at any time thereafter.' The
phrase, 'at the commencement of the action,' obviously refers to
the date of the filing of the complaint—which, as above pointed
out, is the date that marks 'the commencement of the action;' and
the reference plainly is to a time before summons is served on the
defendant, or even before summons issues. What the rule is
saying quite clearly is that after an action is properly commenced
—by the filing of the complaint and the payment of all requisite
docket and other fees—the plaintiff may apply for and obtain a
writ of preliminary attachment upon fulfillment of the pertinent
requisites laid down by law, and that he may do so at any time,
either before or after service of summons on the defendant. And
this indeed, has been the immemorial practice sanctioned by the
courts: for the plaintiff or other proper party to incorporate

_________________

* SECOND DIVISION.

322

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Master Tours and Travel Corporation vs. Court of Appeals

the application for attachment in the complaint or other

appropriate pleading (counter-claim, cross-claim, third-party
claim) and for the Trial Court to issue the writ ex-parte at the
commencement of the action if it finds the application otherwise
sufficient in form and substance."
Same; Compromise; Execution; The rule is that a judgment
rendered in accordance with a compromise agreement is
immediately executory unless a motion is filed to set aside the
agreement on the ground of fraud, mistake or duress in which case
an appeal may be taken against the order denying the motion.—
Petitioner likewise raises the issue of the permissibility of
withdrawing a compromise agreement which has not been
approved by the court. The rule is that a judgment rendered in
accordance with a compromise agreement is immediately
executory unless a motion is filed to set aside the agreement on
the ground of fraud, mistake or duress in which case an appeal
may be taken against the order denying the motion.

PETITION for review of the decision of the Court of

Appeals.
The facts are stated in the resolution of the Court.
     Charles Dimaano for petitioner.
          Chua and Associates Law Office for Cathay Pacific
Airways.

RESOLUTION

PADILLA, J.:

Basically, the question here involved is the propriety of a

writ of preliminary attachment issued by the trial court ex
parte, prior to notice and hearing but served on the
defendant simultaneously with the summons.

The Facts:
On 28 February 1991, summons together with a copy of the
complaint for sum of money filed by the private respondent
Cathay Pacific Airways Ltd. (Cathay) and an Order of
Attachment dated 21 February 1991 were served upon and
received by the petitioner. Pursuant to the Order of
Attachment, the sheriff immediately levied upon properties
of the petitioner,

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Master Tours and Travel Corporation vs. Court of Appeals

with value equivalent to Cathay's claim.

On 25 March 1991, defendant therein (herein petitioner)
moved to set aside the order of attachment on the grounds
that there had been no prior notice or hearng before the
issuance of the writ and that the averments of the
complaint failed to satisfactorily allege the basis for

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attachment as required by the Rules of Court. Pending

resolution of this motion, petitioner filed its answer to
Cathay's complaint. On 29 April 1991, the trial court issued
an order denying the petitioner's motion to set aside or
discharge the attachment writ; petitioner thereupon moved
for reconsideration.
However, pending resolution of the incident, the
respondent sheriff and Cathay's counsel, allegedly thru
coercion and harassment, compelled the petitioner, thru its
counsel and vice-president, to enter into a compromise
agreement. Petitioner subsequently moved to withdraw the
said compromise agreement before the trial court could
approve the same. On 7 June 1991, petitioner's aforesaid
motion for reconsideration and motion to withdraw
compromise agreement were jointly heard and later
submitted for resolution. Pending said resolution,
respondent sheriff and Cathay's counsel allegedly
continued to harass the petitioner and were able to effect
garnishment of certain bank deposits of petitioner.
Faced with this predicament, the petitioner resorted to
the petition for certiorari with the Court of Appeals, but
the latter court denied due course to the same as the trial
court had yet to rule on petitioner's twin motions for
reconsideration and withdrawal of compromise agreement.
Finally, on 17 October 1991, the trial court issued an
order denying petitioner's twin motions. Petitioner again
took recourse to the respondent appellate court, but after
hearing both parties, the appellate court ruled to dismiss
the petition. Hence, this petition for review.
Petitioner principally contends that the respondent
Court of Appeals committed a grave reversible error in not
holding that the trial court had not yet acquired
jurisdiction over the person of the petitioner for lack of
notice and hearing when it issued ex-parte the writ of
preliminary attachment, hence, this was a denial of due
process.
Davao Light and Power, Co., Inc. vs. Court of Appeals,
G.R.

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Master Tours and Travel Corporation vs. Court of Appeals

No. 93262, November 29, 1991, 204 SCRA 343) lays down
the rules on the issuance of writs of attachment ex-parte:

"A preliminary attachment may be defined, paraphrasing the

Rules of Court, as the provisional remedy in virtue of which a
plaintiff or other proper party may, at the commencement of the
action or at any time, thereafter, have the property of the adverse
party taken into the custody of the court as security for the
satisfaction of any judgment that may be recovered. It is a remedy
which is purely statutory in respect of which the law requires a
strict construction of the provisions granting it. Withal no
principle, statutory or jurisprudential; prohibits its issuance by
any court before acquisition of jurisdiction over the person of the
defendant,
Rule 57 in fact speaks of the grant of the remedy 'at the
commencement of the action or at any time thereafter.' The

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phrase, 'at the commencement of the action,' obviously refers to

the date of the filing of the complaint—which, as above pointed
out, is the date that marks 'the commencement of the action;' and
the reference plainly is to a time before summons is served on the
defendant, or even before summons issues. What the rule is
saying quite clearly is that after an action is properly commenced
—by the filing of the complaint and the payment of all requisite
docket and other fees—the plaintiff may apply for and obtain a
writ of preliminary attachment upon fulfillment of the pertinent
requisites laid down by law, and that he may do so at any time,
either before or after service of summons on the defendant. And
this indeed, has been the immemorial practice sanctioned by the
courts: for the plaintiff or other proper party to incorporate the
application for attachment in the complaint or other appropriate
pleading (counter-claim, cross-claim, third-party claim) and for
the Trial Court to issue the writ ex-parte at the commencement of
the action if it finds the application otherwise sufficient in form
and substance."
"x x x The only pre-requisite is that the Court be satisfied,
upon consideration of 'the affidavit of the applicant or of some
other person who personally knows the facts, that a sufficient
cause of action exists, that the case is one of those mentioned in
Section 1 xx (Rule 57), that there is no other sufficient security for
the claim sought to be enforced by the action, and that the
amount due to the applicant, or the value of the property the
possession of which he is entitled to recover, is as much as the
sum for which the order (of attachment) is granted above all legal
counterclaims.' If the court be so satisfied, the 'order of
attachment shall be granted/ and the writ shall issue upon the
applicant's posting of 'a bond executed to the adverse party in an
amount to be fixed by the judge, not exceeding

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Master Tours and Travel Corporation vs. Court of Appeals

the plaintiff s claim, conditioned that the latter will pay all the
costs which may be adjudged to the adverse party and all
damages which he may sustain by reason of the attachment, if the
court shall finally adjudge that the applicant was not entitled
thereto.'"

Petitioner likewise raises the issue of the permissibility of

withdrawing a compromise agreement which has not been
approved by the court. The rule is that a judgment
rendered in accordance with a compromise agreement is
immediately executory unless a motion is filed to set aside
the agreement on the ground of fraud, mistake or duress in
which case an appeal may be taken against the order
denying the motion. (Arkoncel, Jr. v. Lagamon, G.R. No.
50526, December 4, 1991, 204 SCRA 560)
In its order of 17 October 1991 (p. 249, Rollo), the
Regional Trial Court said:

"The Court does not believe, so to speak, that the Executive Vice
President, who signed the compromise agreement cannot bind the
defendant for if it were otherwise, the defendant corporation's
board as portrayed above, would have been on guard.

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The compromise agreement, to say the least, in the

contemplation of the law, is a valid document binding not only on
the Executive Vice President, but also on the defendant
corporation itself. It is not vitiated by what the Executive Vice
President of the defendant corporation and the lawyer
representing both call—lack of authority and threat and
intimidation—that compelled them (Executive Vice President and
counsel) to sign it. This protestation, is amply refuted in the
plaintiff s opposition . . . x x x"

The propriety or impropriety of withdrawing the

compromise agreement is more a question of fact than of
law in this particular case.
ACCORDINGLY, the petition is DENIED, there being
no reversible error committed by respondent appellate
court.
SO ORDERED.

          Narvasa (C.J., Chairman), Regalado, Nocon and

Campos, Jr., JJ., concur.

Petition denied.
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Guingona, Jr. vs. Gonzales

Note.—Courts should avoid issuing a writ of

preliminary injunction which in effect would dispose of the
main case without trial (Rivas vs. Securities and Exchange
Commission, 190 SCRA 295).

——oOo——

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