Case Digest

China banking Corporation vs Asian Construction Development Corporation

G.R. 158271

Facts:

China Banking Corporation granted a omnibus credit line to the herein respondent Asian Construction
Development Corporation (ACDC) in the amount of Ninety Million Pesos. Upon failure of the respondent to
comply on the Omnibus Credit Line herein petitioner filed a complaint for recovery of sum of money and
damages with prayer for the issuance of writ of preliminary attachment to the properties of ACDC consisting
of construction equipment before the Regional Trial Court (RTC) of Makati, Branch 138 which was
subsequently granted. Upon motion of the petitioner the RTC issued a Summary Judgement in favor of the
petitioner which was appealed by the herein respondent to the CA.

The petitioner then filed a motion to take Custody of Attached Properties with Motion for Grant of Authority
to Sell to the Branch Sheriff with the RTC, praying that it be allowed to take custody of ACDCs properties for
the purpose of selling them in an auction since the value of said properties have started to deteriorate. On
June 20, 2000, ACDC filed its Opposition t arguing that there can be no sale of the latter’s attached properties
in the absence of a final and executory judgment against ACDC.

According to the CA, selling the attached properties prior to final judgment of the appealed case is premature
and contrary to the intent and purpose of preliminary attachment for the following reasons: first, the records
reveal that the attached properties subject of the motion are not perishable in nature; and second, while
the sale of the attached properties may serve the interest of China Bank, it will not be so for ACDC. Further
it recognized that since ACDC is a corporation engaged in a construction business, the
preservation of the properties is of paramount importance; and that in the event that the decision
of the lower court is reversed and a final judgment rendered in favor ACDC, great prejudice will
result if the attached properties were already sold. A motion for reconsideration was filed but was
denied hence the petition for certiorari.

Issues:
 Whether the attached properties of ACDC could be sold in an auction under Section 11
of Rule 57 of the Rules of Court

Laws:
Section 11, Rule 57 of the Rules of Court provides:

Sec. 11. When attached property may be sold after levy on attachment and before entry of
judgment.- Whenever it shall be made to appear to the court in which the action is pending, upon hearing
with notice to both parties, that the property attached is perishable, or that the interests of all the parties
to the action will be subserved by the sale thereof, the court may order such property to be sold at public
auction in such manner as it may direct, and the proceeds of such sale to be deposited in court to abide the
judgment in the action. (Emphasis supplied)

Thus, an attached property may be sold after levy on attachment and before entry of judgment whenever it
shall be made to appear to the court in which the action is pending, upon hearing with notice to both parties,
that the attached property is perishable or that the interests of all the parties to the action will
be subserved by the sale of the attached property.

Decision
The petition for certiorari was denied and the decision of the Court of Appeals was Affirmed.

In the Motion for Leave for Grant of Authority to Sell Attached Properties filed before the CA, China Bank
alleged that the attached properties are placed in locations where they are totally exposed to the natural
elements and adverse weather conditions since their attachment in 1999; that as a result, the attached
properties have gravely deteriorated with corrosions eating them up, with weeds germinating and growing
thereon and their engines and motors stock up; and that the same holds true to the office furniture, office
equipment, accessories and supplies. No evidence, however, were submitted by China Bank to support
and substantiate these claims before the CA.

Dissenting Opinion

None

Ponente:

Ma. Alicia Austria-Martinez

Associate Justice

Davao Light and Power Co Inc. vs. CA et.al

G.R. 932262

Facts:

The appellate proceedings at bar is the decision of the Court of Appeals in CA-G.R. Sp. No. 1967
entitled "Queensland Hotel, Inc., etc. and Adarna v. Davao Light & Power Co., Inc.," promulgated
on May 4, 1990. That decision nullified and set aside the writ of preliminary attachment issued
by the Regional Trial Court of Davao City on application of the plaintiff (Davao Light & Power
Co.), before the service of summons on the defendants (herein respondents Queensland Co.,
Inc. and Adarna).

The Davao Light and Power Co., Inc. ("Davao Light") filed a collection suit against Queensland
Hotel ("Queensland") and Teodorico Adarna ("Adarna") with an ex parte application for a writ of
preliminary attachment. On 3 May 1989, the trial court issued an Order of Attachment, and the
corresponding Writ of Attachment on 11 May 1989. On 12 May 1989, the summons, a copy of the
complaint, and the writ of attachment was served upon Queensland and Adarna. Queensland and
Adarna filed a motion to discharge the attachment on the ground that at the time the Order of
Attachment and Writ of Attachment were issued, the trial court has yet to acquire jurisdiction over
the cause of action and over the persons of the defendants.

Issue:
 Whether or not the writ of preliminary attachment was validly issued.

Laws:

The Court reiterated and reaffirms the proposition in this case that writs of attachment may
properly issue ex parte provided that the Court is satisfied that the relevant requisites therefor
have been fulfilled by the applicant, although it may, in its discretion, require prior hearing on the
application with notice to the defendant; but that levy on property pursuant to the writ thus issued
may not be validly effected unless preceded, or contemporaneously accompanied, by service
on the defendant of summons, a copy of the complaint (and of the appointment of guardian ad
litem, if any), the application for attachment (if not incorporated in but submitted separately from
the complaint), the order of attachment, and the plaintiff's attachment bond.

Decision:

Yes. A writ of preliminary attachment may be issued before the court acquires jurisdiction over
the person of the defendant.

The petition was granted, the decision of the Court of Appeals was reversed, and the order and
writ of attachment Branch 8, Regional Trial Court of Davao City against Queensland Hotel or
Motel or Queensland Tourist Inn and Teodorico Adarna was reinstated

Dissenting Opinion:

None

Ponente
Chief Justice Andres Dela Rosa Narvasa.

Anita Mangila vs Court of Appeals

G.R. 125027

Facts:

This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to set aside
the Decision[1] of the Court of Appeals affirming the Decision] of the Regional Trial Court, Branch
108, Pasay City. The trial court upheld the writ of attachment and the declaration of default on
petitioner while ordering her to pay private respondent P109,376.95 plus 18 percent interest per
annum, 25 percent attorney’s fees and costs of suit.
Private respondent filed a complaint for collection of sum of money against herein petitioner. On
August 1, 1988, the sheriff filed his Sheriff’s Return showing that summons was not served on
petitioner. A woman found at petitioner’s house informed the sheriff that petitioner transferred her
residence to Sto. Niño, Guagua, Pampanga. The sheriff found out further that petitioner had left
the Philippines for Guam. Thus, on September 13, 1988, construing petitioner’s departure from
the Philippines as done with intent to defraud her creditors, private respondent filed a Motion for
Preliminary Attachment. On September 26, 1988, the trial court issued an Order of Preliminary
Attachment against petitioner. The following day, the trial court issued a Writ of Preliminary
Attachment. The trial court granted the request of its sheriff for assistance from their counterparts
in RTC, Pampanga. Thus, on October 28, 1988, Sheriff Alfredo San Miguel of RTC Pampanga
served on petitioner’s household help in San Fernando, Pampanga, the Notice of Levy with the
Order, Affidavit and Bond. Petitioner now filed a motion to discharge attachment claiming that the
court had not acquired jurisdiction over her person. The trial court granted the Motion to Discharge
Attachment on January 13, 1989 upon filing of petitioner’s counter-bond. The trial court, however,
did not rule on the question of jurisdiction and on the validity of the writ of preliminary
attachment. Thereafter private respondent applied for an alias summons which was granted by
the court.

Issue:

 Whether or nor the writ of preliminary attachment was validly implemented.

Laws:

The grant of the provisional remedy of attachment involves three stages: first, the court issues the
order granting the application; second, the writ of attachment issues pursuant to the order granting
the writ; and third, the writ is implemented. For the initial two stages, it is not necessary that
jurisdiction over the person of the defendant be first obtained. However, once the implementation
of the writ commences, the court must have acquired jurisdiction over the defendant for without
such jurisdiction, the court has no power and authority to act in any manner against the defendant.
Any order issuing from the Court will not bind the defendant

In the instant case, the Writ of Preliminary Attachment was issued on September 27, 1988 and
implemented on October 28, 1988. However, the alias summons was served only on January 26,
1989 or almost three months after the implementation of the writ of attachment.
The trial court had the authority to issue the Writ of Attachment on September 27 since a motion
for its issuance can be filed “at the commencement of the action.” However, on the day the writ
was implemented, the trial court should have, previously or simultaneously with the
implementation of the writ, acquired jurisdiction over the petitioner. Yet, as was shown in the
records of the case, the summons was actually served on petitioner several months after the writ
had been implemented.

Private respondent never showed that she effected substituted service on petitioner after her
personal service failed. Likewise, if it were true that private respondent could not ascertain the
whereabouts of petitioner after a diligent inquiry, still she had some other recourse under the
Rules of Civil Procedure.
In conclusion, we hold that the alias summons belatedly served on petitioner cannot be deemed
to have cured the fatal defect in the enforcement of the writ. The trial court cannot enforce such
a coercive process on petitioner without first obtaining jurisdiction over her person. The
preliminary writ of attachment must be served after or simultaneous with the service of
summons on the defendant whether by personal service, substituted service or by
publication as warranted by the circumstances of the case. The subsequent service of
summons does not confer a retroactive acquisition of jurisdiction over her person because the
law does not allow for retroactivity of a belated service.

Decision

The petition was granted on the grounds of improper venue and invalidity of the service of the
writ of attachment. The decision of the Court of Appeals and the order of respondent judge
denying the motion to dismissed and set aside.

Ponente

Justice Carpio

Dissenting Opinion

None

Belise Investment and Finance Co vs. State Investment House Inc.

G.R. No. 71917

Facts:

Issue:

Laws:

Decision:

Ponente:

Dissenting Opinion: