Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
SUPREME COURT
Manila
THIRD DIVISION
Petitioner,
- versus -
Present:
Respondent.
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DECISION
In this Petition for Certiorari under Rule 65, the Republic of the Philippines
assails and seeks to nullify the Resolution1[1] dated March 28, 2003 of the
Sandiganbayan, as effectively reiterated in another resolution of June 18, 2004,
which denied petitioners motion for the issuance of a writ of preliminary
attachment in Civil Case No. 0030, entitled Republic v. Alfonso Lim, et al.,2[2] a
suit to recover ill-gotten or unexplained wealth.
The Facts
2[2] Specifically, the amended complaint named as defendants, apart from Lim, Sr., the
following: Lim, Jr., Teodoro Q. Pena, Ferdinand E. Marcos (now deceased and represented by
his Estate/Heirs), Imelda R. Marcos, Taggat Industries, Inc., Pamplona Redwood Veneer, Inc.,
Southern Plywood, Western Cagayan Lumber, Acme Plywood, Veteran Woodwork, Inc., Sierra
Madre Wood Industries, Inc., and Tropical Philippines Wood Industries, Inc.
in unlawful collusion with Ferdinand E. Marcos and Imelda R. Marcos, and taking
undue advantage of their relationship, influence, and connection with the latter,
embarked upon devices and stratagems to unjustly enrich themselves at the
expense of the Republic and the Filipino people. Among other acts, the Lims were
alleged to have:
(a) actively solicited and obtained, upon the personal behest of [the
Marcoses], with the active collaboration of Teodoro Q. Pea, who was then
Minister of Natural Resources, additional timber concession in favor of
Taggat Industries, Inc. (TAGGAT) and Pamplona Redwood Veneer, Inc.
(PAMPLONA), corporations beneficially held and controlled by Alfonso
Lim and Alfonso Lim, Jr., which, in addition to other areas already
awarded to TAGGAT and PAMPLONA, resulted in their concession
holdings in excess of the allowable limits prescribed under Section 11,
Article XIV of the 1973 Constitution;
(b) actively solicited and obtained, upon the personal behest of [the
Marcoses], a management contract in favor of TAGGAT to operate and
manage the logging concessions of Veterans Woodwork, Inc.
(VETERANS), Sierra Madre Wood Industries, Inc. (SIERRA MADRE),
and Tropical Philippines Wood Industries, Inc. (TROPICAL) over and
above the objections of VETERANS;
(c) obtained a permit to cut down a certain number of Narra and Amaciga
trees, and, on the very same day, was likewise given an authorization by
Ferdinand E. Marcos to export the same, in violation of existing ban
against cutting and export of the aforesaid trees;
(d) obtained, in favor of PAMPLONA, a syndicated loan in the amount of
millions of US dollars from a consortium of international banks, secured
by the guarantee of the National Investment and Development Corporation
(NIDC), a subsidiary of the Philippine National Bank; and in view of the
default by PAMPLONA in the payment of its principal and/or interest
amortizations, the loan was converted, under the debt rescheduling
arrangement between Republic and its foreign creditor banks, into a public
sector obligation of Republic, to the grave and irreparable damage of the
Republic and the Filipino people.
The Republic also alleged that the foregoing acts, singly or collectively,
constituted grave and gross abuse of official position and authority, flagrant breach
of public trust and fiduciary obligations, brazen abuse of right and power, unjust
enrichment, and violation of the Constitution and laws of the Republic to the grave
and irreparable damage to it and its citizens.
As its main prayer, the Republic asked for the reconveyance of all funds and
property impressed with constructive trust in favor of the Republic and the Filipino
people, as well as funds and other property acquired with [respondents] abuse of
right and power and through unjust enrichment, including but not limited to the
properties listed in Annex A of the Complaint together with the accruing income or
increment from date of acquisition until final judgment.
The properties listed in the said Annex A3[3] consistbesides the Lims assets
sequestered in accordance wth Executive Order Nos. 1 and 2, Series of 1986of the
assets and other properties of Lim, Sr., as follows:
1. a parcel of land with TCT No. 2981 (Lot A), located at Barrio Birinayan,
Talisay, Batangas;
2. a parcel of raw land with TCT No. 11750 (Lot 8-C-53) located at Muzon,
San Isidro, Angono, Rizal;
3. a parcel of raw land with TCT No. 11749 (Lot 8-C-51) located at Muzon,
San Isidro, Angono. Rizal;
4. a parcel of land with TCT No. 11728 (Lot 8-C-9) located at Muzon, San
Isidro, Angono, Rizal;
5. a parcel of land with TCT No. 11732 (Lot 8-C-17) located at Muzon, San
Isidro, Angono, Rizal;
6. a parcel of agricultural land with TCT No. 11728 (Lot 8-C-9) located at
Muzon, San Isidro, Angono, Rizal;
7. a parcel of agricultural land with TCT No. 11727 (Lot 8-C-7) located at
Muzon, San Isidro, Angono, Rizal;
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13. a parcel of agricultural land in the name of TAGGAT with OCT No. O-
1108 (S) Lot No. 1195;
14. a parcel of commercial land in the name of TAGGAT with TCT No.
78732 located at Romualdez Street, Paco, Manila;
15. buildings and improvements in the name of TAGGAT erected on OCT
No. 0-1104, 0-11017, 0-1109;
16. buildings in the name of TAGGAT erected on TCT No. 78732; Paco,
Manila.
[OTHER PROPERTIES]
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C. Aircraft [2 units]
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E. Investments and Other Assets
F. Bank Accounts
1. PAMPLONA Accounts
2. TAGGAT Acccounts
G. Other
1. Frozen Bank Accounts and Other Assets of Alfonso Lim, Sr., Alfonso
Lim, Jr. and Lawrence Lim
Meanwhile, Lim, Sr. passed away. On June 22, 1998, his estate filed a
motion to lift the sequestration4[4] over certain real properties5[5] contending that
To the motion to lift, the Republic interposed an opposition, alleging that the sequestered lots
and titles stand as security for the satisfaction of any judgment the Republic may obtain against
the estate of Lim, Sr., his family, or his group of companies.
In time, the Republic sought but was later denied reconsideration of the
sequestration-lifting resolution of the Sandiganbayan.7[7]
Meanwhile, after presenting its evidence in the main case, the Republic filed
its Formal Offer of Evidence dated October 8, 2001.8[8] On December 5, 2001, the
5[5] The Estate of Alfonso Sr. moved for the lifting of sequestration over lands covered
by TCT Nos. 11727, 11728, 11732, 11748, 11749, and 11750 issued on December 15, 1948 by
the Register of Deeds of Rizal, and TCT No. 315 issued on November 25, 1948 issued by
Register of Deeds of Tagaytay City in the name of Lim, Sr.
(1) Sometime in January 2002, the estate of Lim, Sr., Ruthie Lim, and two
others, as defendants a quo, filed a Demurrer to Evidence10[10] dated January 14,
2002, on the ground of either irrelevancy or immateriality of the Republics
evidence. As argued, the same evidence did not prove or disprove that the
demurring defendants, on their own or in concert with the Marcoses, amassed ill-
gotten wealth. Lim, Jr. later filed a Manifestation11[11] adopting the demurrer to
evidence of the estate of Lim, Sr., et al.
(2) On July 4, 2002, the Sandiganbayan denied the Republics motion for
(3) In an obvious bid to counter the effects of the lifting of the sequestration,
the Republic, on September 9, 2002, filed a Motion for the Issuance of a Writ of
Preliminary Attachment13[13] against respondents in the amount of its claim. The
Republic alleged that respondent Lims were guilty of fraud in incurring various
legal obligations which the present action has been brought, by taking undue
Except for one, all the other respondents belonging to the Lim group filed
their respective comment or opposition to the Republics motion for a writ of
attachment.
(4) On March 28, 2003, the Sandiganbayan, stating that bare allegations of
the commission of fraud by respondents in incurring the aforesaid obligations are
not sufficient for the granting of the writ of preliminary attachment, denied, via a
Resolution,14[14] the corresponding motion.
Forthwith, the estate of Lim, Sr., Taggat Industries, Inc. (TAGGAT), and
Pamplona Redwood Veneer, Inc. (PAMPLONA), followed later by Lim, Jr.,
respectfully moved for reconsideration of the July 17, 2003 Resolution.
(6) On June 18, 2004, the Sandiganbayan resolved to affirm the denial of the
respondents demurrer to evidence. It also denied in its March 28, 2003 resolution
the Republics motion for the issuance of a writ of preliminary attachment.17[17]
The Issues
The two interrelated issues petitioner Republic tenders boils down to:
whether the Sandiganbayan, in the light of the denial of respondents demurrer to
evidence, acted with grave abuse of discretion amounting to lack or excess of
jurisdiction in not considering that the evidence already on record support the
issuance of a writ or preliminary attachment.
The Republic contends that the pieces of evidence offered before and
admitted by the Sandiganbayan provide sufficient basis for the issuance of a writ of
preliminary attachment. Thus, the graft court, as the Republic argues, committed
grave abuse of discretion amounting to excess of jurisdiction in denying the writ of
preliminary injunction by not considering the evidence already on record and in
ruling contrary to its findings and conclusions when it denied respondents
demurrer to evidence.
Attachment is an ancillary remedy applied for not for its own sake but to
enable the attaching party to realize upon relief sought and expected to be granted
in the main or principal action;19[19] it is a measure auxiliary or incidental to the
main action. As such, it is available during the pendency of the action which may
be resorted to by a litigant to preserve and protect certain rights and interests
therein pending rendition, and for purposes of the ultimate effects, of a final
judgment in the case. As a corollary proposition, an order granting an application
for a writ of preliminary attachment cannot, owing to the incidental or auxiliary
nature of such order, be the subject of an appeal independently of the main
action.20[20]
19[19] BAC Manufacturing and Sales Corporation v. Court of Appeals, G.R. No. 96784,
August 2, 1991, 200 SCRA 130, 139; citing Sievert v. CA, No. L-84034, December 22, 1988,
168 SCRA 692.
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(d) In an action against a party who has been guilty of fraud in contracting
the debt or incurring the obligation upon which the action is brought, or in
concealing or disposing of the property for the taking, detention or conversion of
which the action is brought;
For a writ of attachment to issue under the above-quoted rule, the applicant
must sufficiently show the factual circumstances of the alleged fraud.
21[21] Legaspi Oil Co., Inc. v. Court of Appeals, G.R. No. 96505, July 1, 1993, 224
SCRA 213, 216.
22[22] Garcia v. People, G. R. No. 144785, September 11, 2003, 410 SCRA 582, 589;
Commissioner of Internal Revenue v. CA, G.R. No. 119322, June 4, 1996, 257 SCRA 200.
suggestions or by suppression of truth and includes all surprise, trick, cunning,
dissembling, and any unfair way by which another is cheated.23[23] Fraudulent,
on the other hand, connotes intentionally wrongful, dishonest, or unfair.24[24]
In the case at bar, the Republic has, to us, sufficiently discharged the burden
of demonstrating the commission of fraud committed by respondents Lims as a
condition sine qua non for the issuance of a writ of preliminary attachment. The
main supporting proving document is the Republics Exhibit B which the
Sandiganbayan unqualifiedly admitted in evidence. And the fraud or fraudulent
scheme principally came in the form of Lim, Sr. holding and/or operating logging
concessions which far exceeded the allowable area prescribed under the 1973
Constitution.
23[23] People v. Balasa, G.R. No. 106357, September 3, 1998, 295 SCRA 49, 71-72; citing Alleje v. CA, G.R.
No. 107152, January 25, 1995, 240 SCRA 495.
26[26] In part the cancellation decision reads: All the timber concessions of Alfonso Lim, Sr., namely: TLA
No. 071 (Taggat Industries, Inc.), TLA No. 074 (Pamplona Redwood Veneer Co., Inc.); TLA No. 321 (Southern
Plywood Corp.); and TLA No. 073 (Western Cagayan Lumber, Inc.) and TLA No. 075 (Acme Plywood & Veneer Co.,
Inc.) are hereby ordered REVOKED/CANCELLED, and the areas respectively covered thereby be reverted to the
mass of public forest. The District Foresters or the WIDA area Managers concerned, as the case may be, are hereby
(1) Lim, Sr., through the seven (7) respondent corporations, had been
holding/operating/managing several timber concessions with a total area of
533,880 hectares, more or less, which was far in excess of the 100,000 hectares
allowed in the 1973 Constitution;27[27]
(2) Since a wide expanse of forest lands were in between the different Lim
concessions, the Lims had effectively access to a total of 633,880 hectares of
forests; and
(3) Other violation of the constitutional prohibition applies also to three (3)
corporations (Acme Plywood Co., Inc., Western Cagayan Lumber Co., Inc., and
Southern Plywood Corporation).
directed to conduct inventories of the logs cut prior to these cancellation orders and to cause the removal of
logging equipments from the production areas of the licensee within thirty (30) days from date hereof.
27[27] Art. XIV, Sec. 11 of the 1973 Constitution provides that [N]o private corporation
or association may hold by lease, concession, license or permit, timber or forest lands and other
timber or forest resources in excess of one hundred hectares.
28[28] The canceled TLAs were those pertaining to TAGGAT, PAMPLONA, Southern
Plywood Corp., Western Cagayan Lumber, Inc., and Acme Plywood & Veneer Co., Inc.
Sec. 11 of Article XIV of the governing 1973 Constitution states that no private
corporation or association may hold by lease, concession, license, or permit,
timber or forest lands and other timber or forest resources in excess of one
hundred thousand hectares. Complementing this provision was Chapter I, No.
3(e) of Forestry Administrative Order (FAO) No. 11 prohibiting any individual,
corporation, partnership, or association from acquiring a timber license or license
agreement covering an area in excess of 100,000 hectares. Likewise, Chapter I, No.
3(d) of FAO No. 11 states that no individual corporation, partnership, or
association who is already a holder of an ordinary timber license or license
agreement nor any member of the family, incorporator, director, stockholder, or
member of such individual, corporation, partnership, or association shall be
allowed to acquire a new timber license or license agreement or any interest or
participation in it.
The Maceda decision stressed that Lim, Sr. had one share each in the three
corporations, namely: (1) Acme Plywood and Veneer Co., Inc. (ACME); (2)
Western Cagayan Lumber Co., Inc. (WESTERN); and (3) Southern Plywood
Corporation (SPC). These corporations, the decision added, likewise violated the
Constitution considering that Lim, Sr. had control over them as owner-founder. To
cover the constitutional violation, Lim, Jr. was used as a front and made to appear
as President of the mentioned three corporations.32[32]
33[33] Rivera v. People, G.R. No. 163996, June 9, 2005, 460 SCRA 85, 91; citing Gutib
v. Court of Appeals, G.R. No. 131209, August 13, 1999, 312 SCRA 365, 371.
34[34] Id.; citing Ong v. People, G.R. No. 140904, October 9, 2000, 342 SCRA 372, 383.
sufficient proof to sustain the indictment or to support a verdict of guilt.35[35] And
when the court denies the demurrer, the defendant has to present countervailing
evidence against the evidence adduced by the plaintiff.36[36]
Given the circumstances, this Court cannot simply brush aside the foregoing considering that
what the defendants-movants proffer are mere blanket denial of the charges. In demurrer to
evidence, the party demurring challenges the sufficiency of the whole evidence to sustain a
verdict. The court, in passing upon the sufficiency of the evidence raised in a demurrer, is merely
required to ascertain whether there is competent or sufficient evidence to sustain the indictment.
35[35] Id.; citing Choa v. Choa, G.R. No. 143376, November 26, 2002, 392 SCRA 641,
648.
A scrutiny of the above-quoted July 17, 2003 Resolution readily shows that
the Sandiganbayan indeed considered the evidence presented and offered by the
Republic, specifically Exhibits B and E which convincingly show the finding that
respondents acts were tainted with fraud in the acquisition of the logging
concessions due to their close association with the Marcoses.
38[38] Godinez v. Alano, A.M. No. RTJ-98-1409, February 18, 1999, 303 SCRA 259,
271.
based its findings and conclusions in denying the demurrer to evidence were the
same ones which demonstrate the propriety of the writ of preliminary attachment.
Clearly, the Republic has complied with and satisfied the legal obligation to show
the specific acts constitutive of the alleged fraud committed by respondents. The
denial of the prayed writ, thus, evidently constitutes grave abuse of discretion on
the part of Sandiganbayan. After all, attachment is a mere provisional remedy to
ensure the safety and preservation of the thing attached until the plaintiff can, by
appropriate proceedings, obtain a judgment and have such property applied to its
satisfaction.39[39] Indeed, the properties of respondents sought to be subjected to
the ancillary writ of preliminary attachment are not only in danger of being lost but
should be placed under custodia legis to answer for any liabilities that may be
adjudged against them in the instant case.
SO ORDERED.
FIRST DIVISION
INC., Petitioner,
Respondents.
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DECISION
CORONA, J.:
On separate dates, petitioner Foundation Specialists, Inc. (FSI) and respondent Betonval Ready
Concrete, Inc. (Betonval) executed three contracts40[1] for the delivery of ready mixed concrete by
Betonval to FSI. The basic stipulations were: (a) for FSI to supply the cement to be made into ready
40[1] Individually denominated as "Contract Proposals and Agreements" dated July 23, 1991,
September 18, 1991 and March 26, 1992, respectively. Rollo, pp. 86-91.
mixed concrete; (b) for FSI to pay Betonval within seven days after presentation of the invoices plus 30%
interest p.a. in case of overdue payments and (c) a credit limit of P600,000 for FSI.
Betonval delivered the ready mixed concrete pursuant to the contracts but FSI failed to pay its
outstanding balances starting January 1992. As an accommodation to FSI, Betonval extended the seven
On September 1, 1992, Betonval demanded from FSI its balance of P2,349,460.42[3] Betonval informed
FSI that further defaults would leave it no other choice but to impose the stipulated interest for late
payments and take appropriate legal action to protect its interest.43[4] While maintaining that it was
still verifying the correctness of Betonvals claims, FSI sent Betonval a proposed schedule of payments
41[2] Records, Vol. I, pp. 143-145. The extension of the credit term from seven days to 45 days
was made in a letter dated March 6, 1992. Attached to this letter was a detailed summary
of payments based on invoices not paid or covered by postdated checks issued by FSI for
various deliveries made or to be made by Betonval between January 14, 1992 to August
18, 1992. The 45-day credit extension was likewise reflected in the various invoices
dated between March 31, 1992 to September 3, 1992, all duly received by FSI. Id., pp.
16-66.
42[3] Records, Vol. I, pp. 68-69. This amount included the previously unpaid amount and new
billings.
44[5] Id., pp. 72-73. FSIs proposed schedule of payments had reference to the statement of
account of Betonval. Of particular note in this statement of account is Betonvals
computation of interest at 24% computed from due date of the invoices, to which FSI
acceded per its September 3, 1992 letter.
Thereafter, FSI paid Betonval according to the terms of its proposed schedule of payments. It was able
to reduce its debt to P1,114,203.34 as of July 1993, inclusive of the 24% annual interest computed from
the due date of the invoices.45[6] Nevertheless, it failed to fully settle its obligation.
Betonval thereafter filed an action for sum of money and damages in the Regional Trial Court
(RTC).46[7] It also applied for the issuance of a writ of preliminary attachment alleging that FSI
employed fraud when it contracted with Betonval and that it was disposing of its assets in fraud of its
creditors.
FSI denied Betonvals allegations and moved for the dismissal of the complaint. The amount
claimed was allegedly not due and demandable because they were still reconciling their respective
records. FSI also filed a counterclaim and prayed for actual damages, alleging that its other projects
were delayed when Betonval attached its properties and garnished its bank accounts. It likewise prayed
The RTC issued a writ of preliminary attachment and approved the P500,000 bond of respondent
Stronghold Insurance Co., Inc. (Stronghold). FSI filed a counterbond of P500,000 thereby discharging the
writ of preliminary attachment, except with respect to FSIs excavator, crawler crane and Isuzu pick-up
truck, which remained in custodia legis.47[8] An additional counterbond of P350,000 lifted the
garnishment of FSIs receivables from the Department of Public Works and Highways.
46[7] Makati City, Branch 125. The action was docketed as Civil Case No. 93-2430. Id., p. 59.
compensatory damages to FSI on the ground that the attachment of its properties was improper.49[10]
FSI and Stronghold separately filed motions for reconsideration while Betonval filed a motion for
clarification and reconsideration. In an order dated May 19, 1999, the RTC denied the motions for
48[9] Penned by then Acting Presiding Judge Oscar B. Pimentel. Id., pp. 214-221.
49[10] Id., pp. 214-221. The dispositive portion of the January 29, 1999 decision stated:
WHEREFORE, premises considered, judgment is hereby rendered, ordering the defendant to pay
plaintiff the sum of P1,114,203.34, plus legal interest at the rate of 12% per annum from date of
judicial demand or filing of this complaint until the full amount is paid; and, the sum of
On defendants counterclaim, the award of moral and exemplary damages as prayed for is denied
However, plaintiff and surety are held jointly and severally liable on their attachment bond for
actual damages to defendant and are hereby ordered to pay defendant P200,000.00 as
reasonable compensatory damages arising from the improper attachment caused by the
negligence of plaintiff.
The writ of attachment having been improperly issued, is hereby ordered dissolved and the
SO ORDERED.
reconsideration of Betonval and Stronghold. However, the January 29, 1999 decision was modified in
that the award of actual or compensatory damages to FSI was increased to P1.5 million.50[11]
WHEREFORE, premises considered, finding merit on the motion of defendant the same is hereby
given DUE COURSE. Consequently, the dispositive portion of the decision of this Court dated 29
defendant to pay plaintiff the sum of P1,114,203.34, plus legal interest at the rate of
12% per annum from date of judicial demand or filing of this complaint until the full
amount is paid; and, the sum of P50,000.00 as and by way of reasonable attorneys fees,
and costs.
On defendants counterclaim, the award of moral and exemplary damages as prayed for
However, plaintiff is hereby held liable on its attachment bond for actual damages to
Company, Inc. the same is hereby held jointly and severally liable with the plaintiff for
the aforesaid liability and is ordered to pay the defendant in the amount of P500,000.00
Stronghold were given due course because FSIs appeal was dismissed for nonpayment of the appellate
docket fees.51[12]
In its appeal, Betonval assailed the award of actual damages as well as the imposition of legal interest at
only 12%, instead of 24% as agreed on. Stronghold, on the other hand, averred that the attachment was
proper.
In its decision52[13] dated January 20, 2005, the CA upheld the May 19, 1999 RTC order with
modification. The CA held that FSI should pay Betonval the value of unpaid ready mixed concrete at 24%
p.a. interest plus legal interest at 12%. The CA, however, reduced the award to FSI of actual and
WHEREFORE, premises considered, the appealed Order dated May 19, 1999 is
P1,114,203.34 awarded to appellant Betonval from 12% to 24% per annum, with the
The writ of attachment having been improperly issued, is hereby ordered dissolved and
The motion for reconsideration filed by the plaintiff as well as that of Stronghold
decision, until full payment; (b) to reduce the award of actual damages in favor of
appellee from P1,500,000.00 to P200,000.00; (c) to hold both appellants jointly and
severally liable to pay said amount; and (d) to hold appellant Betonval liable for
whatever appellant surety may be held liable under the attachment bond. The rest is
AFFIRMED in toto.
In this petition for review on certiorari,54[15] FSI prays for the following:
(a) decrease the rate of imposable interest on the P1,114,203.34 award to Betonval, from
12% to 6% p.a. from date of judicial demand or filing of the complaint until the full
amount is paid;
(b) deduct [from the award to Betonval] the cost or value of unused cement based on [its]
(d) hold Betonval and Stronghold jointly and severally liable to pay such actual and
compensatory damages;
(e) hold Betonval liable for whatever Stronghold may be held liable under the attachment
bond and
BETONVALS COMPLAINT
FSI argues that Betonvals complaint was prematurely filed. There was allegedly a need to
reconcile accounts, particularly with respect to the value of the unused cement supplied by FSI, totaling
2,801.2 bags56[17] which supposedly should have been deducted from FSIs outstanding obligation.
FSIs repeated requests for reconciliation of accounts were allegedly not heeded by Betonvals
representatives.
FSIs contention is untenable. It neither alleged any discrepancies in nor objected to the
accounts within a reasonable time.57[18] As held by the RTC, FSI was deemed to have admitted the
[N]o attempts were made to reconcile [FSIs] own record with [Betonval] until after the
filing of the complaint, inspite of claims in [FSIs] Answer about its significance, and
despite having had plenty of opportunity to do so from the time of receipt of the
invoices or demand letters from [Betonval]. [FSIs] excuse that it was impractical to
reconcile accounts during the middle of transactions is defeated by the absence of any
showing on record that a formal request to reconcile was issued to [Betonval] despite
56[17] As reflected in FSIs record of Bulk Cement Status as opposed to Betonvals last invoice
which only reflected 1,307.45 bags. Id., p. 20.
its failure to initiate any meeting with [Betonval], including one which the parties
were directed to hold for that purpose by the Court. Since [FSI] failed to prove the
correctness of its entries against those in [Betonvals] invoices, its record is self-serving.
In view of FSIs failure to dispute this finding of the RTC because of its failure to perfect its appeal, FSI is
now estopped from raising this issue. There is no cogent reason to depart from the RTCs finding.
Undaunted, FSI retracts. Instead of claiming the balance of the unused cement as reflected in its
records, it now bases its claim on the invoices of Betonval. FSI relies on the RTCs statement in the May
Still it can claim the cost of the balance of unused cement based on [Betonvals] invoices,
notwithstanding its admission of the obligation in the letter, as it neither expressed nor
FSI contends that this declaration has become final and executory and must be implemented in the
name of substantial justice. Betonval, however, avers that that the issue on the alleged unused cement
was never raised as an affirmative defense in its answer or in its motion for reconsideration to the
January 29, 1999 decision. Neither was this issue raised in the CA. Hence, FSI must not be allowed to
Furthermore, defenses and objections not pleaded either in a motion to dismiss or in the answer are
deemed waived.58[19]
More importantly, the portion of a decision that becomes the subject of an execution is that ordained or
decreed in the dispositive portion.59[20] In this case, there was no award in favor of FSI of the value of
There is no dispute that FSI and Betonval stipulated the payment of a 30% p.a. interest in case of
overdue payments. There is likewise no doubt that FSI failed to pay Betonval on time.
FSI acknowledged its indebtedness to Betonval in the principal amount of P1,114,203.34. However, FSI
opposed the CAs imposition of a 24% p.a. interest on the award to Betonval allegedly because: (a) the
grant to FSI of a 45-day credit extension novated the contracts insofar as FSIs obligation to pay any
interest was concerned; (b) Betonval waived its right to enforce the payment of the 30% p.a. interest
when it granted FSI a new credit term and (c) Betonvals prayer for a 24% p.a. interest instead of 30%,
resulted in a situation where, in effect, no interest rate was supposedly stipulated, thus necessitating
the imposition only of the legal interest rate of 6% p.a. from judicial demand.
change of the obligation by a subsequent one which extinguishes the first, either by changing the object
59[20] Davao Light and Power Company, Inc. v. Diaz, G.R. No. 150253, 30 November 2006,
509 SCRA 152, 169.
or principal conditions, or by substituting the person of the debtor, or by subrogating a third person in
change and the intention of the parties. Extinctive novation is never presumed; there
must be an express intention to novate; in cases where it is implied, the acts of the
parties must clearly demonstrate their intent to dissolve the old obligation as the
moving consideration for the emergence of the new one. Implied novation necessitates
that the incompatibility between the old and new obligation be total on every point
such that the old obligation is completely superceded by the new one. The test of
incompatibility is whether they can stand together, each one having an independent
existence; if they cannot and are irreconcilable, the subsequent obligation would also
An extinctive novation would thus have the twin effects of, first, extinguishing an
existing obligation and, second, creating a new one in its stead. This kind of novation
presupposes a confluence of four essential requisites: (1) a previous valid obligation, (2)
an agreement of all parties concerned to a new contract, (3) the extinguishment of the
old obligation, and (4) the birth of a valid new obligation. Novation is merely
modificatory where the change brought about by any subsequent agreement is merely
incidental to the main obligation (e.g., a change in interest rates or an extension of time
to pay; in this instance, the new agreement will not have the effect of extinguishing the
provisions.)62[23]
The obligation to pay a sum of money is not novated by an instrument that expressly recognizes
the old, changes only the terms of payment, adds other obligations not incompatible with the old ones
The grant by Betonval to FSI of a 45-day credit extension did not novate the contracts so as to extinguish
the latter. There was no incompatibility between them. There was no intention by the parties to
supersede the obligations under the contracts. In fact, the intention of the 45-day credit extension was
precisely to revive the old obligation after the original period expired with the obligation unfulfilled. The
grant of a 45-day credit period merely modified the contracts by extending the period within which FSI
was allowed to settle its obligation. Since the contracts remained the source of FSIs obligation to
Obviously, the extension given to FSI was triggered by its own request, to help it through its financial
difficulties. FSI would now want to take advantage of that generous accommodation by claiming that its
Neither did Betonval waive the stipulated interest rate of 30% p.a., as FSI erroneously claims. A waiver is
waiver must be couched in clear and unequivocal terms which leave no doubt as to the intention of a
62[23] Iloilo Traders Finance, Inc. v. Heirs of Oscar Soriano, Jr., 452 Phil. 82, 89-90 (2003).
63[24] Spouses Reyes v. BPI Family Savings Bank, G.R. Nos. 149840-41, 31 March 2006, 486
SCRA 276, 282.
64[25] R.B. Michael Press and Escobia v. Galit, G.R. No. 153510, 13 February 2008, 545
SCRA 23, 31.
party to give up a right or benefit which legally pertains to him.65[26] FSI did not adduce proof that a
Parties are bound by the express stipulations of their contract as well as by what is required by the
nature of the obligation in keeping with good faith, usage and law.66[27] Corollarily, if parties to a
contract expressly provide for a particular rate of interest, then that interest shall be applied.67[28]
It is clear that Betonval and FSI agreed on the payment of interest. It is beyond comprehension how
Betonvals prayer for a 24% interest on FSIs balance could have resulted in a situation as if no interest
rate had been agreed upon. Besides, FSIs proposed schedule of payments (September 3, 1992),68[29]
referring to Betonvals statement of account,69[30] contained computations of FSIs arrears and billings
There can be no other conclusion but that Betonval had reduced the imposable interest rate from 30%
to 24% p.a. and this reduced interest rate was accepted, albeit impliedly, by FSI when it proposed a new
schedule of payments and, in fact, actually made payments to Betonval with 24% p.a. interest. By its
own actions, therefore, FSI is estopped from questioning the imposable rate of interest.
65[26] Id.
66[27] Spouses Quiamco v. Capital Insurance & Surety Co., Inc., G.R. No. 170852, 12
September 2008.
67[28] Casa Filipino Development Corporation v. Deputy Executive Secretary, G.R. No. 96494,
28 May 1992, 209 SCRA 399, 405.
24% p.a. interest) in the assailed judgment is proper. When the judgment of the court awarding a sum of
money becomes final and executory, the rate of legal interest shall be 12% p.a. from such finality until
its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of
credit.70[31]
was based on Section 1(d) and (e), Rule 57 of the Rules of Court.71[32] However,
the CA affirmed the RTCs factual findings that there was improper attachment of
FSIs properties. In debunking FSIs claim for actual damages, respondents insist
that the attachment was proper and that Betonval was able to sufficiently prove
the existence of the grounds for attachment. However, these are factual matters
70[31] Eastern Shipping Lines, Inc. v. CA, G.R. No. 97412, 12 July 1994, 234 SCRA 78, 97.
71[32] SECTION 1. Grounds upon which attachment may issue. At the commencement of the action or at any
time before entry of judgment, a plaintiff or any proper party may have the property of the adverse party
attached as security for the satisfaction of any judgment that may be recovered in the following cases:
(a) xxx
(d) In an action against a party who has been guilty of a fraud in contracting the debt or
incurring the obligation upon which the action is brought, or in the performance
thereof;
(e) In an action against a party who has removed or disposed of his property, or is about
to do so, with intent to defraud his creditors; xxx
that have been duly passed upon by the RTC and the CA and which are
Moreover, we agree with the RTC and the CA that FSIs properties were
improperly attached. Betonval was not able to sufficiently show the factual
from FSIs mere nonpayment of the debt or failure to comply with its obligation. In
The fraud must relate to the execution of the agreement and must have been
the reason which induced the other party into giving consent which he would not have
otherwise given. To constitute a ground for attachment in Section 1 (d), Rule 57 of the
Rules of Court, fraud should be committed upon contracting the obligation sued upon. A
debt is fraudulently contracted if at the time of contracting it the debtor has a
preconceived plan or intention not to pay, as it is in this case. Fraud is a state of mind
and need not be proved by direct evidence but may be inferred from the circumstances
attendant in each case.73[34]
In other words, mere failure to pay its debt is, of and by itself, not enough
to justify an attachment of the debtors properties. A fraudulent intention not to
pay (or not to comply with the obligation) must be present.
72[33] G.R. No. 171124, 13 February 2008, 545 SCRA 263, 272-273.
73[34] Id., citing Liberty Insurance Corporation v. Court of Appeals, G.R. No. 104405, 13 May 1993, 222 SCRA 37.
PETITIONER IS NOT ENTITLED TO THE AMOUNT OF ACTUAL DAMAGES PRAYED FOR
In its bid for a bigger award for actual damages it allegedly suffered from
the wrongful attachment of its properties, FSI enumerates the standby costs of
grant FSIs prayer. FSI did not pursue its appeal to the CA as shown by its failure to
pay the appellate docket fees. It is well-settled that a party who does not appeal
from the decision may not obtain any affirmative relief from the appellate court
other than what he has obtained from the lower court whose decision is brought
up on appeal.76[37]
SO ORDERED.
74[35] Standby cost of equipment for its EDSA/Boni/Pioneer Interchange project amounted to
P2,353,952.29. For its Bulacan Bridge project, the standby equipment cost was pegged at
P98,154.
75[36] Manpower standby costs for its EDSA/Boni/Pioneer Interchange project was P312,312
and P478,344 for its Perla Mansion project.
76[37] Bank of the Philippine Islands v. Lifetime Marketing Corp., G.R. No. 176434, 25 June 2008, 555 SCRA 373,
382.
FOUNDATION SPECIALISTS, INC., vs. BETONVAL READY CONCRETE INC. and
STRONGHOLD INSURANCE CO., INC.,
G.R. No. 170674
August 24, 2009
FACTS: On separate dates, petitioner FSI and respondent Betonval executed three contracts for
the delivery of ready mixed concrete by Betonval to FSI. Betonval delivered the ready mixed
concrete pursuant to the contracts but FSI failed to pay its outstanding balance. As an
accommodation to FSI, Betonval extended the seven day credit period to 45 days.
Betonval demanded from FSI its balance. Betonval informed FSI that further defaults would
leave it no other choice but to impose the stipulated interest for late payments and take
appropriate legal action to protect its interest. While maintaining that it was still verifying the
correctness of Betonvals claims, FSI sent Betonval a proposed schedule of payments devised
with a liability for late payments fixed at 24% p.a.
Thereafter, FSI paid Betonval according to the terms of its proposed schedule of payments. It
was able to reduce its debt, inclusive of the annual interest. Nevertheless, it failed to fully settle
its obligation.
Betonval thereafter filed an action for sum of money and damages in the RTC. It also applied for
the issuance of a writ of preliminary attachment alleging that FSI employed fraud when it
contracted with Betonval and that it was disposing of its assets in fraud of its creditors.
FSI denied Betonvals allegations and moved for the dismissal of the complaint. FSI also filed a
counterclaim and prayed for AD, MD, ED and AF.
The RTC issued a writ of preliminary attachment and approved the P500,000 bond of
Stronghold.
The RTC ruled for Betonval. However, it awarded compensatory damages to FSI on the ground
that the attachment of its properties was improper.
FSI and Stronghold separately filed MRs while Betonval filed a motion for clarification and
reconsideration. The RTC denied both MRs.. All parties appealed to the CA. However, only the
respective appeals of Betonval and Stronghold were given due course because FSIs appeal was
dismissed for nonpayment of the appellate docket fees.
the CA upheld the RTC order with modification. FSIs MR was denied, hence this petition for
review on certiorari
ISSUE:
YES; Betonvals application for the issuance of the writ of preliminary attachment was based on
Section 1(d) and (e), Rule 57 of the ROC. However, the CA affirmed the RTCs factual findings
that there was improper attachment of FSIs properties.. However, these are factual matters that
have been duly passed upon by the RTC and the CA and which are inappropriate in a petition for
review.
Moreover, we agree with the RTC and the CA that FSIs properties were improperly attached.
Betonval was not able to sufficiently show the factual circumstances of the alleged fraud because
fraudulent intent cannot be inferred from FSIs mere nonpayment of the debt or failure to comply
with its obligation. In Ng Wee v. Tankiansee, we held that the applicant must be able to
demonstrate that the debtor intended to defraud the creditor. Furthermore:
The fraud must relate to the execution of the agreement and must have been the reason which
induced the other party into giving consent which he would not have otherwise given. To
constitute a ground for attachment in Section 1 (d), Rule 57 of the ROC, fraud should be
committed upon contracting the obligation sued upon. A debt is fraudulently contracted if at the
time of contracting it the debtor has a preconceived plan or intention not to pay, as it is in this
case. Fraud is a state of mind and need not be proved by direct evidence but may be inferred
from the circumstances attendant in each case.
In other words, mere failure to pay its debt is, of and by itself, not enough to justify an
attachment of the debtors properties. A fraudulent intention not to pay (or not to comply with
the obligation) must be present.
NO; In its bid for a bigger award for actual damages it allegedly suffered from the wrongful
attachment of its properties, FSI enumerates the standby costs of equipment and manpower
standby costs it allegedly lost. We cannot grant FSIs prayer. FSI did not pursue its appeal to the
CA as shown by its failure to pay the appellate docket fees. It is well-settled that a party who
does not appeal from the decision may not obtain any affirmative relief from the appellate court
other than what he has obtained from the lower court whose decision is brought up on appeal.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
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.
The present recourse is an appeal by certiorari from the decision of the Court
of Appeals reversing the assailed orders of the Court of First Instance of
Davao, (Branch I), petitioner assigning against the lower court the following
errors:
ERROR I
ERROR II
ERROR III
The questions raised are mainly, if not solely, factual 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 Court of Appeals
on said issues of facts are generally considered conclusive and final, and
should no longer be disturbed. However, We gave due course to the petition
because it raises also a legal question of whether the writ of attachment was
properly issued upon a showing that defendant is on the verge of insolvency
and may no longer satisfy its just debts without issuing the writ. This may be
inferred from the emphasis laid by petitioner on the fact that even for the
measly amount of P 634.00 payment thereof was made with a personal check
of the respondent company's president and majority stockholder, and its debts
to several creditors, including secured ones like the DBP, have remained
unpaid, despite its supposed daily income of an average of P 12,000.00, as
declared by its assistant manager, Baldovino Lagbao. 1
Going forthwith to this question of whether insolvency, which petitioners in effect claims to have been
proven by the evidence, particularly by company's bank account which has been reduced to nil, may be a
ground for the issuance of a writ of attachment, the respondent Court of Appeals correctly took its position
in the negative on the strength of the explicit ruling of this Court in Max Chamorro & Co. vs. Philippine
Ready Mix Concrete Company, Inc. and Hon. Manuel P. Barcelona. 2
Petitioner, however, disclaims any intention of advancing the theory that insolvency is a ground for the
issuance of a writ of attachment , 3 and insists that its evidence -is intended to prove his assertion that
respondent company has disposed, or is about to dispose, of its properties, in fraud of its creditors. Aside
from the reference petitioner had made to respondent company's "nil" bank account, as if to show
removal of company's funds, petitioner also cited the alleged non-payment of its other creditors, including
secured creditors like the DBP to which all its buses have been mortgaged, despite its daily income
averaging P12,000.00, and the rescue and removal of five attached buses.
It is an undisputed fact that, as averred by petitioner itself, the several buses attached are nearly junks.
However, upon permission by the sheriff, five of them were repaired, but they were substituted with five
buses which were also in the same condition as the five repaired ones before the repair. This cannot be
the removal intended as ground for the issuance of a writ of attachment under section 1 (e), Rule 57, of
the Rules of Court. The repair of the five buses was evidently motivated by a desire to serve the interest
of the riding public, clearly not to defraud its creditors, as there is no showing that they were not put on
the run after their repairs, as was the obvious purpose of their substitution to be placed in running
condition.
Moreover, as the buses were mortgaged to the DBP, their removal or disposal as alleged by petitioner to
provide the basis for its prayer for the issuance of a writ of attachment should be very remote, if not nil. If
removal of the buses had in fact been committed, which seems to exist only in petitioner's apprehensive
imagination, the DBP should not have failed to take proper court action, both civil and criminal, which
apparently has not been done.
The dwindling of respondent's bank account despite its daily income of from P10,000.00 to P14,000.00 is
easily explained by its having to meet heavy operating expenses, which include salaries and wages of
employees and workers. If, indeed the income of the company were sufficiently profitable, it should not
allow its buses to fall into disuse by lack of repairs. It should also maintain a good credit standing with its
suppliers of equipment, and other needs of the company to keep its business a going concern. Petitioner
is only one of the suppliers.
It is, indeed, extremely hard to remove the buses, machinery and other equipments which respondent
company have to own and keep to be able to engage and continue in the operation of its transportation
business. The sale or other form of disposition of any of this kind of property is not difficult of detection or
discovery, and strangely, petitioner, has adduced no proof of any sale or transfer of any of them, which
should have been easily obtainable.
In the main, therefore, We find that the respondent Court of Appeals has not committed any reversible
error, much less grave abuse of discretion, except 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.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
WILLIAM ALAIN MIAILHE and THE HON. FELIX V. BARBERS, in his capacity as Presiding
Judge, RTC of Manila, Branch XXXIII, petitioners-appellants,
vs.
ELAINE M. DE LENCQUESAING and HERVE DE LENCQUESAING, respondents-appellees.
PARAS, J.:
This petition is an appeal by certiorari from the Decision of the Intermediate Appellate Court in
AC-G.R. SP. No. 01914 which declared null-and void, the Order of the Hon. Judge Felix V.
Barbers, issued in Civil Case No. 83-16829, dated April 14, 1983, granting petitioner's
application for the issuance of a writ of preliminary attachment and the Order dated September
13, 1983 denying respondent's motion to lift said attachment.
The pertinent facts that gave rise to the instant petition are as follows: Petitioner William Alain
Miailhe, his sisters Monique Miailhe Sichere, Elaine Miailhe de Lencquesaing and their mother,
Madame Victoria D. Miailhe are co-owners of several registered real properties located in Metro
Manila. By common consent of the said co-owners, petitioner William Alain has been
administering said properties since 1960. As Madame Victoria D. Miailhe, her daughter Monique
and son William Alain (herein petitioner) failed to secure an out-of court partition thereof due to
the unwillingness or opposition of respondent Elaine, they filed in the Court of First Instance of
Manila (now Regional Trial Court) an action for Partition, which was docketed as Civil Case No.
105774 and assigned to Branch . . . thereof, presided over by Judge Pedro Ramirez. Among the
issues presented in the partition case was the matter of petitioner's account as administrator of
the properties sought to be partitioned. But while the said administrator's account was still being
examined, respondent Elaine filed a motion praying that the sum of P203,167.36 which
allegedly appeared as a cash balance in her favor as of December 31, 1982, be ordered
delivered to her by petitioner William Alain. Against the opposition of petitioner and the other co-
owners, Judge Pedro Ramirez granted the motion in his Order dated December 19, 1983 which
order is now the subject of a certiorari proceeding in the Intermediate Appellate Court under AC-
G.R. No. SP-03070.
Meanwhile however, and more specifically on February 28, 1983, respondent Elaine filed a
criminal complaint for estafa against petitioner William Alain, with the office of the City Fiscal of
Manila, alleging in her supporting affidavit that on the face of the very account submitted by him
as Administrator, he had misappropriated considerable amounts, which should have been
turned over to her as her share in the net rentals of the common properties. Two days after filing
the complaint, respondent flew back to Paris, the City of her residence. Likewise, a few days
after the filing of the criminal complaint, an extensive news item about it appeared prominently
in the Bulletin Today, March 4, 1983 issue, stating substantially that Alain Miailhe, a consul of
the Philippines in the Republic of France, had been charged with Estafa of several million pesos
by his own sister with the office of the City Fiscal of Manila.
On April 12, 1983, petitioner Alain filed a verified complaint against respondent Elaine, for
Damages in the amount of P2,000,000.00 and attorney's fees of P250,000.00 allegedly
sustained by him by reason of the filing by respondent (then defendant) of a criminal complaint
for estafa, solely for the purpose of embarrassing petitioner (then plaintiff) and besmirching his
honor and reputation as a private person and as an Honorary Consul of the Republic of the
Philippine's in the City of Bordeaux, France. Petitioner further charged respondent with having
caused the publication in the March 4, 1983 issue of the Bulletin Today, of a libelous news item.
In his verified complaint, petitioner prayed for the issuance of a writ of preliminary attachment of
the properties of respondent consisting of 1/6 undivided interests in certain real properties in the
City of Manila on the ground that "respondent-defendant is a non-resident of the Philippines",
pursuant to paragraph (f), Section 1, Rule 57, in relation to Section 17, Rule 14 of the Revised
Rules of Court.
This case for Damages was docketed as Civil Case No. 83-16829 of the Regional Trial Court of
Manila, Branch XXXIII presided over by the Honorable Felix V. Barbers.
On April 14, 1983, Judge Barbers granted petitioner's application for preliminary attachment
upon a bond to be filed by petitioner in the amount of P2,000,000.00. Petitioner filed said bond
and upon its approval, the Writ of Preliminary Attachment was issued on April 18, 1983 which
was served on the Deputy Clerk of Court of Branch XXX before whom the action for Partition
was pending.
On May 17, 1983, respondent thru counsel filed a motion to lift or dissolve the writ of attachment
on the ground that the complaint did not comply with the provisions of Sec. 3 of Rule 57, Rules
of Court and that petitioner's claim was for unliquidated damages. The motion to lift attachment
having been denied, respondent filed with the Intermediate Appellate Court a special action for
certiorari under AC-G.R. SP No. 01914 alleging that Judge Barbers had acted with grave abuse
of discretion in the premises. On April 4, 1984, the IAC issued its now assailed Decision
declaring null and void the aforesaid Writ of preliminary attachment. Petitioner filed a motion for
the reconsideration of the Decision but it was denied hence, this present petition which was
given due course in the Resolution of this Court dated February 6, 1985.
We find the petition meritless. The most important issue raised by petitioner is whether or not
the Intermediate Appellate Court erred in construing Section 1 par. (f) Rule 57 of the Rules of
Court to be applicable only in case the claim of the plaintiff is for liquidated damages (and
therefore not where he seeks to recover unliquidated damages arising from a crime or tort).
We find, therefore, and so hold that respondent court had exceeded its
jurisdiction in issuing the writ of attachment on a claim based on an action for
damages arising from delict and quasi delict the amount of which is uncertain
and had not been reduced to judgment just because the defendant is not a
resident of the Philippines. Because of the uncertainty of the amount of plaintiff's
claim it cannot be said that said claim is over and above all legal counterclaims
that defendant may have against plaintiff, one of the indispensable requirements
for the issuance of a writ of attachment which should be stated in the affidavit of
applicant as required in Sec. 3 of Rule 57 or alleged in the verified complaint of
plaintiff. The attachment issued in the case was therefore null and void.
We agree.
SEC. 1. Grounds upon which attachment may issue. A plaintiff or any proper
party may, at the commencement of the action or at any time thereafter, have the
property of the adverse party attached as security for the satisfaction of any
judgment that may be recovered in the following cases:
(d) In an action against a party who has been guilty of a fraud in contracting the
debt or incurring the obligation upon which the action is brought, or in concealing
or disposing of the property for the taking, detention or conversion of which the
action is brought;
(e) In an action against a party who has removed or disposed of his property, or
is about to do so, with intent to defraud his creditors;
(f) In an action against a party who resides out of the Philippines, or on whom
summons may be served by publication. (emphasis supplied)
While it is true that from the aforequoted provision attachment may issue "in an action against a
party who resides out of the Philippines, " irrespective of the nature of the action or suit, and
while it is also true that in the case of Cu Unjieng, et al vs. Albert, 58 Phil. 495, it was held that
"each of the six grounds treated ante is independent of the others," still it is imperative that the
amount sought be liquidated.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
PARAS, J.:
This is a petition for certiorari and mandamus with a prayer for the issuance of a writ of
preliminary prohibitory injunction, questioning the respondent judge's denial of
petitioner's "Application for Issuance of a Writ of Preliminary Attachment" and the latter's
subsequent "Motion for Reconsideration", in his orders dated 6 June 1986 and 23 June
1986, respectively.
As can be gleaned from the parties' memoranda, the following material facts have been
established:
On 17 June 1986, petitioner moved to reconsider the above denial. Once more, counsel
for petitioner requested that the consideration of said motion be scheduled in the
morning session of 23 June 1986 "without need of argument or appearance of counsel"
(p. 35, Rollo). But like before, petitioner and his counsel failed to appear. On said date,
respondent Castro manifested that the two (2) vehicles, alleged to have been offered for
sale by her, were needed in her retail merchandising business, thus, had no intention of
disposing of them. The respondent judge then issued another order dated 23 June 1986
denying petitioner's motion. Hence, this present petition was filed on 12 August 1986.
In a minute resolution dated 25 August 1986 (p. 90, Rollo), this Court denied the instant
petition for being without merit. And after respondent Castro had filed her answer and
petitioner his motion for reconsideration, this Court reconsidered the aforesaid
resolution in a subsequent one dated 5 January 1987 (p. 94, Rollo) and ordered the
parties to submit their respective memoranda.
The sole issue in this case concerns the propriety of the respondent judge's denial of
petitioner's application for a writ of attachment. In branding the denial as improper,
petitioner accuses respondent judge of having made it "with undue haste and without
proper notice of hearing" and with disregard of the "(strong) evidence in support of the
application". (Petition, p. 8, Rollo)
We disagree With the petitioner's accusations. Contrary to his claims, the respondent
judge acted well within his powers and in the highest regard for justice. Respondent
judge acted correctly in denying petitioner's "Application for Issuance of a Writ of
Preliminary attachment". There was no need for him to, as against petitioner's claim, set
a hearing on the said application. This is because the issuance of a writ of preliminary
attachment may be made by the Court ex parte. As We held in the case of Filinvest
Credit Corporation vs. Relova, 117 SCRA 420, and reiterated in Belisle Investment and
Finance Co., Inc. vs. State Investment House, Inc., 151 SCRA 630:
Nothing in the Rules of Court makes notice and hearing indispensable and
mandatory requisites for the issuance of a writ of attachment. The
statement in the case Blue Green Waters, Inc. vs. Hon. Sundiam and Tan
cited by private respondent, to the effect that the order of attachment
issued without notice to therein petitioner Blue Green Waters, Inc. and
without giving it a chance to prove that it was not fraudulently disposing of
its properties is irregular, gives the wrong implication. As clarified in the
separate opinion of Mr. Justice Claudio Teehankee in the same cited
case, a writ of attachment may be issued ex parte.
And even if said notice is indeed necessary, petitioner can only blame himself for failing
to attend the scheduled hearing of 6 June 1986. This is because it was he, through his
counsel, who requested that the application be set for consideration and approval by the
Court on the said date. It was, therefore, his duty to be present in Court on that date.
Inasmuch as a writ of preliminary attachment may be issued without hearing, the judge
before whom the application is made has full discretion in considering the supporting
evidence proffered by the applicant. And in dealing with the affidavit of Mr. Inot, the
respondent judge was empowered to decide whether or not such should be given credit.
As We enunciated in the early case of La Grande vs. Samson (58 Phil. 578); "the
sufficiency or insufficiency of an affidavit depends upon the amount of credit given to it
by the judge, and its acceptance of rejection upon his sound discretion."
It is unfortunate that counsel for petitioner, in his motion for reconsideration dated 13
October 1986, has made a hasty accusation against the Honorable Judge Jose Burgos,
the public respondent, as having "shown manifest partiality towards private
respondents, making statements and actions which clearly intimate that the private
respondents would win the case handsdown This is indeed unfortunate, improper and
an affront to the dignity of the judiciary." (p. 79, Rollo). We do not find any cogent and
valid ground in the records of this case which justify such a grave imputation upon a
member of the Bench. Counsel for petitioner is hereby reminded of his duties to the
Court. And the attorney's duty of prime importance is to observe and maintain the
respect due the courts of justice and judicial officers (Rule 138, Sec. 20(b); Rheem of
the Phil. vs. Ferrer, 60 SCRA 234). His arguments, written or oral, should be gracious to
both the court and opposing counsel and be of such words as may be properly
addressed by one gentleman to another (National Surety Co. v. Jarvis, 278 US 610
(1928).
WHEREFORE, premises considered, this petition is hereby DENIED with costs against
petitioner.
SO ORDERED.
[G.R. No. 115678. February 23, 2001]
DECISION
YNARES-SANTIAGO, J.:
Before us are consolidated petitions for review both filed by Philippine Bank of
Communications; one against the May 24, 1994 Decision of respondent Court of Appeals in CA-
G.R. SP No. 32863i[1] and the other against its March 31, 1995 Decision in CA-G.R. SP No.
32762.ii[2] Both Decisions set aside and nullified the August 11, 1993 Orderiii[3] of the
Regional Trial Court of Manila, Branch 7, granting the issuance of a writ of preliminary
attachment in Civil Case No. 91-56711.
The case commenced with the filing by petitioner, on April 8, 1991, of a Complaint against
private respondent Bernardino Villanueva, private respondent Filipinas Textile Mills and one
Sochi Villanueva (now deceased) before the Regional Trial Court of Manila. In the said
Complaint, petitioner sought the payment of P2,244,926.30 representing the proceeds or value of
various textile goods, the purchase of which was covered by irrevocable letters of credit and trust
receipts executed by petitioner with private respondent Filipinas Textile Mills as obligor; which,
in turn, were covered by surety agreements executed by private respondent Bernardino
Villanueva and Sochi Villanueva. In their Answer, private respondents admitted the existence of
the surety agreements and trust receipts but countered that they had already made payments on
the amount demanded and that the interest and other charges imposed by petitioner were
onerous.
On May 31, 1993, petitioner filed a Motion for Attachment,iv[4] contending that violation of the
trust receipts law constitutes estafa, thus providing ground for the issuance of a writ of
preliminary attachment; specifically under paragraphs b and d, Section 1, Rule 57 of the Revised
Rules of Court. Petitioner further claimed that attachment was necessary since private
respondents were disposing of their properties to its detriment as a creditor. Finally, petitioner
offered to post a bond for the issuance of such writ of attachment.
The Motion was duly opposed by private respondents and, after the filing of a Reply thereto by
petitioner, the lower court issued its August 11, 1993 Order for the issuance of a writ of
preliminary attachment, conditioned upon the filing of an attachment bond. Following the denial
of the Motion for Reconsideration filed by private respondent Filipinas Textile Mills, both
private respondents filed separate petitions for certiorari before respondent Court assailing the
order granting the writ of preliminary attachment.
Both petitions were granted, albeit on different grounds. In CA-G.R. SP No. 32762, respondent
Court of Appeals ruled that the lower court was guilty of grave abuse of discretion in not
conducting a hearing on the application for a writ of preliminary attachment and not requiring
petitioner to substantiate its allegations of fraud, embezzlement or misappropriation. On the other
hand, in CA-G.R. SP No. 32863, respondent Court of Appeals found that the grounds cited by
petitioner in its Motion do not provide sufficient basis for the issuance of a writ of preliminary
attachment, they being mere general averments. Respondent Court of Appeals held that neither
embezzlement, misappropriation nor incipient fraud may be presumed; they must be established
in order for a writ of preliminary attachment to issue.
Hence, the instant consolidatedv[5] petitions charging that respondent Court of Appeals erred in
1. Holding that there was no sufficient basis for the issuance of the writ of preliminary
attachment in spite of the allegations of fraud, embezzlement and misappropriation of the
proceeds or goods entrusted to the private respondents;
2. Disregarding the fact that that the failure of FTMI and Villanueva to remit the proceeds or
return the goods entrusted, in violation of private respondents fiduciary duty as entrustee,
constitute embezzlement or misappropriation which is a valid ground for the issuance of a writ of
preliminary attachment.vi[6]
To begin with, we are in accord with respondent Court of Appeals in CA-G.R. SP No. 32863 that
the Motion for Attachment filed by petitioner and its supporting affidavit did not sufficiently
establish the grounds relied upon in applying for the writ of preliminary attachment.
1. The instant case is based on the failure of defendants as entrustee to pay or remit the
proceeds of the goods entrusted by plaintiff to defendant as evidenced by the trust receipts
(Annexes B, C and D of the complaint), nor to return the goods entrusted thereto, in violation of
their fiduciary duty as agent or entrustee;
2. Under Section 13 of P.D. 115, as amended, violation of the trust receipt law constitute(s)
estafa (fraud and/or deceit) punishable under Article 315 par. 1[b] of the Revised Penal Code;
3. On account of the foregoing, there exist(s) valid ground for the issuance of a writ of
preliminary attachment under Section 1 of Rule 57 of the Revised Rules of Court particularly
under sub-paragraphs b and d, i.e. for embezzlement or fraudulent misapplication or conversion
of money (proceeds) or property (goods entrusted) by an agent (entrustee) in violation of his
fiduciary duty as such, and against a party who has been guilty of fraud in contracting or
incurring the debt or obligation;
5. Herein plaintiff is willing to post a bond in the amount fixed by this Honorable Court as a
condition to the issuance of a writ of preliminary attachment against the properties of the
defendants.
Section 1(b) and (d), Rule 57 of the then controlling Revised Rules of Court, provides, to wit
SECTION 1. Grounds upon which attachment may issue. A plaintiff or any proper party may, at
the commencement of the action or at any time thereafter, have the property of the adverse party
attached as security for the satisfaction of any judgment that may be recovered in the following
cases:
(d) In an action against a party who has been guilty of fraud in contracting the debt or
incurring the obligation upon which the action is brought, or in concealing or disposing of the
property for the taking, detention or conversion of which the action is brought;
While the Motion refers to the transaction complained of as involving trust receipts, the violation
of the terms of which is qualified by law as constituting estafa, it does not follow that a writ of
attachment can and should automatically issue. Petitioner cannot merely cite Section 1(b) and
(d), Rule 57, of the Revised Rules of Court, as mere reproduction of the rules, without more,
cannot serve as good ground for issuing a writ of attachment. An order of attachment cannot be
issued on a general averment, such as one ceremoniously quoting from a pertinent rule.vii[7]
I, DOMINGO S. AURE, of legal age, married, with address at No. 214-216 Juan Luna Street,
Binondo, Manila, after having been sworn in accordance with law, do hereby depose and say,
THAT:
1. I am the Assistant Manager for Central Collection Units Acquired Assets Section of the
plaintiff, Philippine Bank of Communications, and as such I have caused the preparation of the
above motion for issuance of a writ of preliminary attachment;
2. I have read and understood its contents which are true and correct of my own knowledge;
3. There exist(s) sufficient cause of action against the defendants in the instant case;
4. The instant case is one of those mentioned in Section 1 of Rule 57 of the Revised Rules
of Court wherein a writ of preliminary attachment may be issued against the defendants,
particularly sub-paragraphs b and d of said section;
5. There is no other sufficient security for the claim sought to be enforced by the instant
case and the amount due to herein plaintiff or the value of the property sought to be recovered is
as much as the sum for which the order for attachment is granted, above all legal counterclaims.
Again, it lacks particulars upon which the court can discern whether or not a writ of attachment
should issue.
Petitioner cannot insist that its allegation that private respondents failed to remit the proceeds of
the sale of the entrusted goods nor to return the same is sufficient for attachment to issue. We
note that petitioner anchors its application upon Section 1(d), Rule 57. This particular provision
was adequately explained in Liberty Insurance Corporation v. Court of Appeals,viii[8] as
follows
To sustain an attachment on this ground, it must be shown that the debtor in contracting the debt
or incurring the obligation intended to defraud the creditor. The fraud must relate to the
execution of the agreement and must have been the reason which induced the other party into
giving consent which he would not have otherwise given. To constitute a ground for attachment
in Section 1 (d), Rule 57 of the Rules of Court, fraud should be committed upon contracting the
obligation sued upon. A debt is fraudulently contracted if at the time of contracting it the
debtor has a preconceived plan or intention not to pay, as it is in this case. Fraud is a state of
mind and need not be proved by direct evidence but may be inferred from the circumstances
attendant in each case (Republic v. Gonzales, 13 SCRA 633). (Emphasis ours)
We find an absence of factual allegations as to how the fraud alleged by petitioner was
committed. As correctly held by respondent Court of Appeals, such fraudulent intent not to
honor the admitted obligation cannot be inferred from the debtors inability to pay or to comply
with the obligations.ix[9] On the other hand, as stressed, above, fraud may be gleaned from a
preconceived plan or intention not to pay. This does not appear to be so in the case at bar. In fact,
it is alleged by private respondents that out of the total P419,613.96 covered by the subject trust
receipts, the amount of P400,000.00 had already been paid, leaving only P19,613.96 as balance.
Hence, regardless of the arguments regarding penalty and interest, it can hardly be said that
private respondents harbored a preconceived plan or intention not to pay petitioner.
The Court of Appeals was correct, therefore, in its finding in CA-G.R. SP No. 32863 that neither
petitioners Motion or its supporting Affidavit provides sufficient basis for the issuance of the
writ of attachment prayed for.
We also agree with respondent Court of Appeals in CA-G.R. SP No. 32762 that the lower court
should have conducted a hearing and required private petitioner to substantiate its allegations of
fraud, embezzlement and misappropriation.
To reiterate, petitioners Motion for Attachment fails to meet the standard set forth in D.P. Lub
Oil Marketing Center, Inc. v. Nicolas,x[10] in applications for attachment. In the said case, this
Court cautioned --
The petitioners prayer for a writ of preliminary attachment hinges on the allegations in paragraph
16 of the complaint and paragraph 4 of the affidavit of Daniel Pe which are couched in general
terms devoid of particulars of time, persons and places to support such a serious assertion that
defendants are disposing of their properties in fraud of creditors. There is thus the necessity of
giving to the private respondents an opportunity to ventilate their side in a hearing, in accordance
with due process, in order to determine the truthfulness of the allegations. But no hearing was
afforded to the private respondents the writ having been issued ex parte. A writ of attachment
can only be granted on concrete and specific grounds and not on general averments merely
quoting the words of the rules.
As was frowned upon in D.P. Lub Oil Marketing Center, Inc.,xi[11] not only was petitioners
application defective for having merely given general averments; what is worse, there was no
hearing to afford private respondents an opportunity to ventilate their side, in accordance with
due process, in order to determine the truthfulness of the allegations of petitioner. As already
mentioned, private respondents claimed that substantial payments were made on the proceeds of
the trust receipts sued upon. They also refuted the allegations of fraud, embezzlement and
misappropriation by averring that private respondent Filipinas Textile Mills could not have done
these as it had ceased its operations starting in June of 1984 due to workers strike. These are
matters which should have been addressed in a preliminary hearing to guide the lower court to a
judicious exercise of its discretion regarding the attachment prayed for. On this score, respondent
Court of Appeals was correct in setting aside the issued writ of preliminary attachment.
Time and again, we have held that the rules on the issuance of a writ of attachment must be
construed strictly against the applicants. This stringency is required because the remedy of
attachment is harsh, extraordinary and summary in nature. If all the requisites for the granting of
the writ are not present, then the court which issues it acts in excess of its jurisdiction.xii[12]
WHEREFORE, for the foregoing reasons, the instant petitions are DENIED. The decision of
the Court of Appeals in CA-G.R. SP No. 32863 and CA-G.R. SP No. 32762 are AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
FIRST DIVISION
Petitioner,
Present:
SANDOVAL-GUTIERREZ,*
-versus- CORONA,
AZCUNA and
GARCIA, JJ.
THE SANDIGANBAYAN
(FOURTH DIVISION),
Respondents. Promulgated:
x------------------------------------------x
DECISION
CORONA, J.:
claim.
On December 7, 2004, the Republic filed a motion for partial
was exempt from filing an attachment bond and praying for the
release thereof.
ruled that there was nothing in the Rules of Court that exempted
its claimed exemption. That case was decided under the old Code of
2005.
Sec. 4. Condition of applicants bond. The party applying for the order
must thereafter give a bond executed to the adverse party in the amount
fixed by the court in its order granting the issuance of the writ, 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. (emphasis
supplied)
Under these provisions, before a writ of attachment may issue,
a bond must first be filed to answer for all costs which may be
adjudged to the adverse party and for the damages he may sustain
by reason of the attachment. However, this rule does not cover the
2. Section 427 of the Code of Civil Procedure provides that before the
issuance of a writ of attachment, the applicant therefor or any person in his
name, should file a bond in favor of the defendant for an amount not less than
P400 nor more than the amount of the claim, answerable for damages in case it
is shown that the attachment was obtained illegally or without sufficient cause;
but in the case at bar the one who applied for and obtained the attachment
is the Commonwealth of the Philippines, as plaintiff, and under the theory
that the State is always solvent it was not bound to post the required bond
and the respondent judge did not exceed his jurisdiction in exempting it from
such requirement. x x xiv[8] (emphasis supplied)
Where the State is the applicant, the filing of the attachment bond
is excused.iv[9]
The attachment bond is contingent on and answerable for all
costs which may be adjudged to the adverse party and all damages
contrary to Tolentino.
arrogated upon itself a power that it did not by law possess. All
courts must take their bearings from the decisions and rulings of
[Tolentino] was decided by the Supreme Court employing the old Code
of Civil Procedure (Act No. 190) which was enacted by the Philippine
Commission on August 7, 1901 or more than a century ago.
That was then, this is now. The provisions of the old Code of Civil
Procedure governing attachment have been substantially modified in the
subsequent Rules of Court. In fact, Rule 57 of the present 1997 Rules of Civil
Procedure is an expanded modification of the provisions of the old Code of Civil
Procedure governing attachment. Unlike the old Code of Civil Procedure, the
present 1997 Rules of Civil Procedure is noticeably explicit in its requirement
that the party applying for an order of attachment should file a bond.
On this, Article VIII, Section 4(3) of the Constitution provides:
(3) Cases or matters heard by a division shall be decided or resolved with the
concurrence of majority of the Members who actually took part in the
deliberations on the issues in the case and voted thereon, and in no case
without the concurrence of at least three of such Members. When the required
number is not obtained, the case shall be decided en banc; Provided, that no
doctrine or principle of law laid down by the court in a decision rendered
en banc or in division may be modified or reversed except by the court
sitting en banc. (emphasis supplied)
issued.
Sec. 3. Order issued only when affidavit and bond filed. An order of
attachment shall be granted only when it is made to appear by the affidavit of the
plaintiff, or of some other person who personally knows the facts, 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 amount
due to the plaintiff, or the value of the property which he is entitled to recover
possession of, is as much as the sum for which the order is granted above all
legal counterclaims; which affidavit, and the bond required by the next
succeeding section, must be duly filed with the clerk or judge of the court
before the order issues. (emphasis supplied)
Sec. 4. Bond required from plaintiff. The party applying for the order
must give a bond executed to the defendant in an amount to be fixed by the
judge, not exceeding the plaintiffs claim, that the plaintiff will pay all the costs
which may be adjudged to the defendant and all damages which he may sustain
by reason of the attachment, if the court shall finally adjudge that the plaintiff
was not entitled thereto.
And with the promulgation of the 1964 Rules of Court, the
Sec. 4. Condition of applicants bond. The party applying for the order
must thereafter give a bond executed to the adverse party in an amount to be
fixed by the judge, not exceeding the applicants 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.
When plaintiff is the Republic of the Philippines, it need not file a bond
when it applies for a preliminary attachment. This is on the premise that the
State is solvent.iv[17]
case, this Court declared that, when the State litigates, it is not
obligations.iv[20]
The pronouncement in Spouses Badillo applies in this case
attachment bond (to answer for all costs and damages which the
finally rules that the applicant is not entitled to the writ) and a
SO ORDERED.
Republic of the Philippines
Supreme Court
Manila
THIRD DIVISION
SPOUSES RAINER TIU A.M. No. P-11-2986
Complainants,
Present:
- versus - ABAD,
VILLARAMA, JR.,
MENDOZA, and
PERLAS-BERNABE, JJ.
VIRGILIO F. VILLAR,
Respondent.
June 13, 2012
x -----------------------------------------------------------------------------------------------------x
DECISION
MENDOZA, J.:
On February 17, 2010, Henry Sia (Sia) and Hankook Industrial Sales Co. filed
a Complaint for Sum of Money and Damages with prayer for Preliminary
Attachment against Classique Concept International Corporation (Classique), First
Global Ventures, Inc. (First Global) and herein complainants, spouses Rainer and
Jennifer Tiu (Spouses Tiu), before the Regional Trial Court, Pasay City, Branch 115
(RTC). In its Orderxii[2] dated February 25, 2010, the RTC granted the prayer for
the issuance of a writ of preliminary attachment. Accordingly, on March 8, 2010,
the Writ of Preliminary Attachment addressed to Sheriff Carlos G. Tadeo and
Sheriff Virgilio Villar was issued. Preliminarily, on March 17, 2010, Sheriff Villar
served copies of the summons, complaint and the writ of preliminary attachment
to Spouses Tiu in the office of First Global at Unit 1905 Raffles Corporate Center,
Emerald Avenue, Ortigas Center, Pasig City. The copies were received by Grace
Tan Bauco (Bauco), who introduced herself as the companys General Manager
and Caretaker, after efforts to personally serve them to Spouses Tiu failed.
Thereafter, Sheriff Villar attached the personal properties found in said address.
Unperturbed, Spouses Tiu moved to have the case against them dismissed
on the ground of improper venue.xii[3]
In its Orderxii[4] dated July 8, 2010, the RTC granted the motion and
ordered the release of the attached properties in favor of Spouses Tiu. The
decretal portion of the order reads:
SO ORDERED.xii[5]
The motion for reconsideration filed by the group of Sia was denied by the
RTC in a subsequent orderxii[6] dated July 16, 2010. The RTC reiterated its
previous order to return the attached items to Spouses Tiu. The fallo reads:
Acting on the RTCs directive, Sheriff Villar submitted his Sheriffs Report
with Urgent Prayer for Issuance of Clarificatory Order.xii[8] He wanted to be
clarified on whether or not he should wait for the trial courts order to attain
finality before returning the attached personal properties.
In the meantime, Sia filed his Notice of Appeal and Very Urgent Motion to
Stay Enforcement of Order to Return Seized Properties while Spouses Tiu filed an
Urgent Ex-Parte Motion to Cite Sheriff Virgilio Villar in Contempt of Court.xii[9]
Not contented with the motion, Spouses Tiu also lodged the present
administrative complaintxii[10] against Sheriff Villar for his alleged questionable
actions regarding the implementation of the writ of attachment against them.
First, Spouses Tui alleged that there was no proper service of summons
upon them by Sheriff Villar before the writ of attachment was implemented. They
claimed that Sheriff Villar merely left a copy of the summons with one of their
employees in violation of the rule on personal service of summons to the parties
concerned as required by the Rules of Court. Second, they averred that Sheriff
Villar improperly implemented the writ against them without prior coordination
with the Sheriffs Office of Pasig City. Third, they insinuated that Sheriff Villar
asked for money for the release of their seized properties. Fourth, they charged
that Sheriff Villar maliciously refused to return their attached properties despite
the RTCs clear directive after the case against them was dismissed.
In his Comment,xii[11] Sheriff Villar denied all the charges against him. He
denied the allegation of Spouses Tiu that there was no valid service of summons
for the writ of preliminary attachment. He explained that he effected a
substituted service after several unsuccessful attempts to personally serve the
summons on them. He also added that he made the proper coordination with the
Sheriffs office of Pasig City before implementing the writ of preliminary
attachment against them. He denied receiving P35,000.00 from their driver in
exchange for the release of the couples seized properties. He asserted that he had
no ill-motive against the return of the seized properties to them and even sought
clarification from the RTC.
Incidentally, the RTC, in its Orderxii[12] dated August 17, 2010, gave due
course to the Notice of Appeal and stated that by virtue of Sias timely appeal it
had no recourse but to elevate the entire records of the case, including the issue
of the return of Spouses Tius attached properties, to the Court of Appeals.
The Office of the Court Administrator (OCA), in its Reportxii[13] dated June
22, 2011, stated that the factual and conflicting allegations of the parties must be
threshed out in an appropriate investigation considering the seriousness of the
charge being imputed against Sheriff Villar. Accordingly, the OCA made the
following recommendations:
RECOMMENDATION: We respectfully submit for the consideration of
the Honorable Court the recommendation that the instant administrative
complaint against Virgilio F. Villar, Sheriff IV, Office of the Clerk of Court,
Regional Trial Court, Pasay City, be RE-DOCKETED as a regular administrative
matter and REFERRED to the Executive Judge of the Regional Trial Court, Pasay
City for investigation. The report and recommendation relative to the
investigation shall be submitted within sixty (60) days from receipt of the records
of the administrative complaint.xii[14]
In its Resolutionxii[15] dated September 12, 2011, the Court resolved to re-
docket the administrative complaint into a regular administrative matter and
referred the same to the Executive Judge of the Regional Trial Court, Pasay City
for investigation, report and recommendation.
Judge Ramizo found that Sheriff Villar complied with the instruction
embodied in Administrative Circular No. 12 requiring a sheriff to notify in writing
the sheriff of the place where the execution of a writ is to take place. He likewise
found nothing irregular in the substituted service of summons effected by Sheriff
Villar as the same complied with the requisites mandated by the Rules of Court.
Furthermore, the investigating judge saw no bad faith when Sheriff Villar failed to
return the attached properties after the dismissal of the case and the issuance of
the RTC order to release the seized properties. According to him, Sheriff Villar
merely retained the properties because he was uncertain whether or not he
should wait for the finality of the order dismissing the case. Judge Ramizo gave no
weight to Spouses Tius allegation that Sheriff Villar demanded money from them
to regain possession of their seized properties.
After a careful examination of the records, the Court agrees with the
recommendation of Judge Ramizo that the complaint against Sheriff Villar be
dismissed.
On the charge that Sheriff Villar did not comply with the requirement of
prior coordination as mandated in Administrative Circular No. 12, Judge Ramizo
found it baseless and stated that the sheriff properly complied with the circular.
Administrative Circular No. 12xii[19] lays down the guidelines and procedure in
the service and execution of court writs and processes in the reorganized courts.
In particular, paragraph 2 thereof states:
xxxx
2. All Clerks of Court of the Metropolitan Trial Court and Municipal Trial
Courts in Cities, and/or their deputy sheriffs shall serve all court processes and
execute all writs of their respective courts within their territorial jurisdiction;
[Emphasis ours]
xxxx
The instruction of the trial court was clear and simple. Sheriff Villar was to
return the seized properties to Spouses Tiu. He should have followed the courts
order immediately. He had no discretion to wait for the finality of the courts order
of dismissal before discharging the order of attachment. Nevertheless, Sheriff
Villar showed no deliberate defiance of, or disobedience to, the courts order of
release. Records show that he took the proper step under the circumstances. He
filed with the trial court his Sheriffs Report with Urgent Prayer for the Issuance of
a Clarificatory Order. The Court perceives nothing amiss in consulting the judge
before taking action on a matter of which he is not an expert.
As to the allegation of grave misconduct for supposedly asking P35,000.00
to facilitate the return of the attached items, the records bear out that it was a
baseless charge. In administrative proceedings, the complainant bears the onus of
establishing, by substantial evidence, the averments of his complaint.xii[22] Other
than the bare allegations of Spouses Tiu, no evidence showing that Sheriff Villar
surreptitiously demanded money from them for the release of their attached
properties was adduced. Mere suspicion without proof cannot be the basis of
conviction.xii[23]
SO ORDERED.