158271 April 8, 2008 implemented levying personal properties of
ACDC, i.e., vans, dump trucks, cement mixers, CHINA BANKING CORPORATION, petitioner, cargo trucks, utility vehicles, machinery, vs. equipment and office machines and fixtures. ASIAN CONSTRUCTION and DEVELOPMENT CORPORATION, respondent. On March 27, 2000, upon motion of China Bank, the RTC issued a Summary Judgment8 in favor of DECISION China Bank. ACDC filed its Notice of Appeal9 dated April 24, 2000. AUSTRIA-MARTINEZ, J.: On June 15, 2000, China Bank filed a Motion to Before the Court is a Petition for Review on Take Custody of Attached Properties with Certiorari under Rule 45 of the Rules of Court Motion for Grant of Authority to Sell to the filed by petitioner China Banking Corporation Branch Sheriff10 with the RTC, praying that it be (China Bank) seeking to annul the Resolution1 allowed to take custody of ACDC’s properties for dated October 14, 2002 and the Resolution2 the purpose of selling them in an auction.11 On dated May 16, 2003 of the Court of Appeals (CA) June 20, 2000, ACDC filed its Opposition12 to the in CA-G.R. CV No. 72175. June 15, 2000 Motion arguing that there can be no sale of the latter’s attached properties in the The facts of the case: absence of a final and executory judgment against ACDC. On July 24, 1996, China Bank granted respondent Asian Construction and Development On August 25, 2000, China Bank partially Corporation (ACDC) an Omnibus Credit Line in appealed the Summary Judgment for not the amount of P90,000,000.00.3 awarding interest on one of its promissory notes.13 Records of the case were elevated to On April 12, 1999, alleging that ACDC failed to the CA.14 comply with its obligations under the Omnibus Credit Line, China Bank filed a Complaint4 for On April 18, 2002, China Bank filed a Motion for recovery of sum of money and damages with Leave for Grant of Authority to Sell Attached prayer for the issuance of writ of preliminary Properties15 which the CA denied in the herein attachment before the Regional Trial Court (RTC) assailed Resolution dated October 14, 2002. of Makati, Branch 138, docketed as Civil Case No. 99-796. In the Complaint, China Bank claimed According to the CA, selling the attached that ACDC, after collecting and receiving the properties prior to final judgment of the proceeds or receivables from the various appealed case is premature and contrary to the construction contracts and purportedly holding intent and purpose of preliminary attachment them in trust for China Bank under several Deeds for the following reasons: first, the records of Assignment, misappropriated, converted, and reveal that the attached properties subject of used the funds for its own purpose and benefit, the motion are not perishable in nature; and instead of remitting or delivering them to China second, while the sale of the attached properties Bank.5 may serve the interest of China Bank, it will not be so for ACDC. The CA recognized China Bank’s On April 22, 1999, the RTC issued an Order6 apprehension that by the time a final judgment granting China Bank’s prayer for writ of is rendered, the attached properties would be preliminary attachment. Consequently, as worthless. However, the CA also acknowledged shown in the Sheriff’s Report7 dated June 14, that since ACDC is a corporation engaged in a 1999, the writ of preliminary attachment was construction business, the preservation of the properties is of paramount importance; and that In any of the foregoing instances, the aggrieved in the event that the decision of the lower court party may file an appropriate special civil action is reversed and a final judgment rendered in as provided in Rule 65. (Emphasis supplied). favor ACDC, great prejudice will result if the attached properties were already sold. The present petition for review on certiorari should have been dismissed outright. However, China Bank filed a Motion for Reconsideration16 in many instances, the Court has treated a which was denied in the herein assailed CA petition for review on certiorari under Rule 45 as Resolution17 dated May 16, 2003. a petition for certiorari under Rule 65 of the Rules of Court, such as in cases where the subject Hence, the present petition for review on of the recourse was one of jurisdiction, or the act certiorari, on the following ground: complained of was perpetrated by a court with grave abuse of discretion amounting to lack or THE HONORABLE COURT OF APPEALS RENDERED excess of jurisdiction.21 The present petition THE QUESTIONED RESOLUTIONS (ANNEXES "A" does not involve any issue on jurisdiction, and "B") IN A MANNER NOT IN ACCORD WITH neither does it show that the CA committed THE PROVISIONS OF SECTION 11, RULE 57 OF grave abuse of discretion in denying the motion THE RULES OF CIVIL PROCEDURE, AS IT SHELVED to sell the attached property. THE DEMANDS OF EQUITY BY ARBITRARILY DISALLOWING THE SALE OF THE ATTACHED Section 11, Rule 57 of the Rules of Court PROPERTIES, UPHOLDING ONLY THE INTEREST provides: OF RESPONDENT, IN UTTER PARTIALITY.18 Sec. 11. When attached property may be sold Considering that the herein assailed CA after levy on attachment and before entry of Resolutions are interlocutory in nature as they judgment.- Whenever it shall be made to appear do not dispose of the case completely but leave to the court in which the action is pending, upon something to be done upon the merits,19 the hearing with notice to both parties, that the proper remedy should have been by way of property attached is perishable, or that the petition for certiorari under Rule 65, as provided interests of all the parties to the action will be for in Section 1 (b), Rule 41 of the Rules of Court, subserved by the sale thereof, the court may as amended by A.M. No. 07-7-12-SC,20 which order such property to be sold at public auction provides: in such manner as it may direct, and the proceeds of such sale to be deposited in court to Section 1. Subject of appeal. - An appeal may be abide the judgment in the action. (Emphasis taken from a judgment or final order that supplied) completely disposes of the case, or of a particular matter therein when declared by Thus, an attached property may be sold after these Rules to be appealable. levy on attachment and before entry of judgment whenever it shall be made to appear No appeal may be taken from: to the court in which the action is pending, upon hearing with notice to both parties, that the xxxx attached property is perishable or that the interests of all the parties to the action will be (b) An interlocutory order; subserved by the sale of the attached property.
xxxx In its Memorandum,22 China Bank argues that
the CA’s notion of perishable property, which pertains only to those goods which rot and decay and lose their value if not speedily put to their automobiles and 2 airplanes, was reversed by intended use,23 is a strict and stringent the Supreme Court of Louisiana. In support of its interpretation that would betray the purpose for contention that automobiles are perishable, which the preliminary attachment was Mossler offered testimony to the effect that engrafted.24 Citing Witherspoon v. Cross,25 automobile tires tend to dry-rot in storage, China Bank invokes the definition of "perishable batteries to deteriorate, crankcases to become property" laid down by the Supreme Court of damaged, paint and upholstery to fade, that California as goods which decay and lose their generally automobiles tend to depreciate while value if not speedily put to their intended use; in storage.31 Rejecting these arguments, the but where the time contemplated is necessarily Supreme Court of Louisiana held that while there long, the term may embrace property liable might be a depreciation in the value of a car merely to material depreciation in value from during storage, depending largely on existing other causes than such decay. economic conditions, there would be no material deterioration of the car itself or any of As stated in the Sheriff’s Report26 and Notices of its appurtenances if the car was properly cared Levy on Properties,27 all of for, and therefore it could not be said that automobiles were of a perishable nature within ACDC’s properties which were levied are the intendment of the statute, which could only personal properties consisting of used vehicles, be invoked when the property attached and i.e., vans, dump trucks, cement mixers, cargo seized was of a perishable nature.32 trucks, utility vehicles, machinery, equipment and office machines and fixtures. China Bank With respect to the determination of the insists that the attached properties, all placed question on whether the attached office inside ACDC’s stockyard located at Silang, Cavite furniture, office equipment, accessories and and the branch office in Mayamot, Antipolo City, supplies are perishable properties, the Supreme are totally exposed to natural elements and Court of Alabama in McCreery v. Berney National adverse weather conditions.28 Thus, China Bank Bank33 discussed the "perishable" nature of the argues, that should the attached properties be attached properties, consisting of shelving, stock allowed to depreciate, perish or rot while the of drygoods and a complete set of store fixtures, main case is pending, the attached properties consisting of counters iron safe, desk and will continue losing their worth thereby showcases, to be within the meaning of rendering the rules on preliminary attachment "perishable" property under the Alabama Code nugatory. which authorizes a court, on motion of either party, to order the sale, in advance of judgment, The issue hinges on the determination whether of perishable property which had been levied on the vehicles, office machines and fixtures are by a writ of attachment.34 "perishable property" under Section 11, Rules 57 of the Rules of Court, which is actually one of first In McCreery, the Supreme Court of Alabama impression. No local jurisprudence or rejected the argument that the sale of the authoritative work has touched upon this attached property was void because the term matter. This being so, an examination of foreign "perishable" property, as used in the statute, laws and jurisprudence, particularly those of the meant only such property as contained in itself United States where some of our laws and rules the elements of speedy decay, such as fruits, were patterned after, is in order.29 fish, fresh meats, etc.35 The Supreme Court of Alabama held that whatever may be the In Mossler Acceptance Co. v. Denmark,30 an character of the property, if the court is satisfied order of the lower court in directing the sale of that, either by reason of its perishable nature, or attached properties, consisting of 20 because of the expense of keeping it until the termination of the litigation, it will prove, or be The determination on whether the attached likely to prove, fruitless to the creditor, and that vehicles are properly cared for, and the burden the purpose of its original seizure will probably to show that, by keeping the attached office be frustrated, the sale of the attached property furniture, office equipment and supplies, it will is justified. necessarily become, or is likely to become, worthless to China Bank, and by consequence to McCreery applied the doctrine in Millard’s ACDC, are factual issues requiring reception of Admrs. v. Hall36 where the Supreme Court of evidence which the Court cannot do in a petition Alabama held that an attached property is for certiorari. Factual issues are beyond the perishable "if it is shown that, by keeping the scope of certiorari because they do not involve article, it will necessarily become, or is likely to any jurisdictional issue.43 become, worthless to the creditor, and by consequence to the debtor, then it is embraced As a rule, only jurisdictional questions may be by the statute. It matters not, in our opinion, raised in a petition for certiorari, including what the subject matter is. It may be cotton matters of grave abuse of discretion which are bales, live stock, hardware provisions or dry equivalent to lack of jurisdiction.44 The office of goods." Although the statute under which the writ of certiorari has been reduced to the Millard’s was decided used the words "likely to correction of defects of jurisdiction solely and waste or be destroyed by keeping," instead of cannot legally be used for any other purpose.45 the word "perishable," the reasons given for the construction placed on the statute apply equally Certiorari is truly an extraordinary remedy and, to the Alabama Code which uses the term in this jurisdiction, its use is restricted to truly "perishable."37 extraordinary cases - cases in which the action of the inferior court is wholly void; where any In the Motion for Leave for Grant of Authority to further steps in the case would result in a waste Sell Attached Properties38 filed before the CA, of time and money and would produce no result China Bank alleged that the attached properties whatever; where the parties, or their privies, are placed in locations where they are totally would be utterly deceived; where a final exposed to the natural elements and adverse judgment or decree would be nought but a snare weather conditions since their attachment in and delusion, deciding nothing, protecting 1999;39 that as a result, the attached properties nobody, a judicial pretension, a recorded have gravely deteriorated with corrosions eating falsehood, a standing menace. It is only to avoid them up, with weeds germinating and growing such results as these that a writ of certiorari is thereon and their engines and motors stock issuable; and even here an appeal will lie if the up;40 and that the same holds true to the office aggrieved party prefers to prosecute it.46 furniture, office equipment, accessories and supplies.41 No evidence, however, were Moreover, the Court held in JAM Transportation submitted by China Bank to support and Co., Inc. v. Flores47 that it is well-settled, too substantiate these claims before the CA. well-settled to require a citation of jurisprudence, that this Court does not make Notably, in the Petition filed before the Court, findings of facts specially on evidence raised for China Bank, for the first time, included as the first time on appeal.48 The Court will not annexes,42 photographs of the attached make an exception in the case at bar. Hence, the properties which were alleged to be recently photographs of the attached properties taken, in an attempt to convince the Court of the presented before the Court, for the first time on deteriorated condition of the attached appeal, cannot be considered by the Court. properties. China Bank argues that if the CA allowed the upon examination of the evidence presented by attached properties to be sold, whatever both parties which the Court cannot do in a monetary value which the attached properties petition for certiorari under Rule 65 of the Rules still have will be realized and saved for both of Court. parties.49 China Bank further claims that should ACDC prevail in the final judgment50 of the WHEREFORE, the petition is DENIED. The collection suit, ACDC can proceed with the bond assailed Resolutions of the Court of Appeals posted by China Bank.51 The Court finds said dated October 14, 2002 and May 16, 2003 in CA- arguments to be specious and misplaced. G.R. CV No. 72175 are hereby AFFIRMED.
Section 4, Rule 57 of the Rules of Court provides: SO ORDERED.
Section 4. Condition of applicant’s 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 the damages which he may sustain by reason of the attachment, if the court shall finally adjudge that the applicant was not entitled thereto.
It is clear from the foregoing provision that the
bond posted by China Bank answers only for the payment of all damages which ACDC may sustain if the court shall finally adjudge that China Bank was not entitled to attachment. The liability attaches if "the plaintiff is not entitled to the attachment because the requirements entitling him to the writ are wanting," or "if the plaintiff has no right to the attachment because the facts stated in his affidavit, or some of them are untrue."52 Clearly, ACDC can only claim from the bond for all the damages which it may sustain by reason of the attachment and not because of the sale of the attached properties prior to final judgment.
Sale of attached property before final judgment
is an equitable remedy provided for the convenience of the parties and preservation of the property.53 To repeat, the Court finds that the issue of whether the sale of attached properties is for the convenience of the parties and that the interests of all the parties will be subserved by the said sale is a question of fact. Again, the foregoing issue can only be resolved Rule 51 Judgment Exception: In criminal cases where the penalty imposed is life imprisonment, or when a lesser Memorandum decisions are permitted in the CA. penalty is imposed but involving offenses After judgment or final resolution of the CA and committed on the same occasion or arising out dissenting or separate opinions if any, are signed of the same occurrence which gave rise to the by the Justices taking part, they shall be more serious offense for which the penalty of delivered for filing to the clerk who shall indicate death or life imprisonment is imposed (Section 3, thereon the date of promulgation and cause true Rule 122) copies to be served upon parties or counsel. Date when judgment or final resolution becomes Appeal by certiorari from RTC to SC submitting executory shall be deemed as date of entry. issues of fact may be referred to the CA for decision or appropriate action, without RULE 56 Procedure in the Supreme prejudice to considerations on whether or not to give due course to the appeal as provided in Rule Court 45. 1. Original cases cognizable – exclusive list: Petitions for certiorari, prohibition, mandamus, Provisional Remedies quo warranto, habeas corpus; Disciplinary proceedings against judges and Provisional remedies (ancillary/auxiliary) attorneys; Cases affecting ambassadors, other public à Writs and processes available during the ministers, and consuls. pendency of the action which may be resorted to 2. An appeal to SC can only be taken by petition by a litigant to preserve and protect rights and for review on certiorari, except in criminal cases interests therein pending rendition, and for the where the penalty imposed is death, reclusion purpose of ultimately affecting a final judgment perpetua, or life imprisonment. in the case. 3. Grounds for dismissal of appeal by SC à PROVISIONAL – constituting temporary measures availed of during the pendency of the Failure to take appeal within the reglementary action. period; Lack of merit in the petition; à ANCILLIARY – incidents in and dependent on Failure to pay the requisite docket fee and other the result of the main action. lawful fees or to make deposit for costs; Failure to comply with the requirements regarding proof of service and contents of and Rule 57 Preliminary Attachment the documents which should accompany the petition; 1. Preliminary Attachment Failure to comply with any circular, directive or Available even if the recovery of personal order of the SC without justifiable cause; property is only an incidental relief sought in the Error in choice or mode of appeal action; Case is not appealable to the SC. May be resorted to even if the personal property Discretionary upon SC (and CA) to call for is in the custody of a third person; preliminary conference similar to pre-trial. Extends to all kinds of property, real or personal General Rule: Appeal to SC by notice of appeal or incorporeal; shall be dismissed. To recover possession of personal property unjustly detained, presupposes that the same is being concealed, removed, or disposed of to prevent its being found or taken by the discharged is with respect to particular property, applicant; counterbond or deposit shall be equal to the Can still be resorted to even if the property is in value of the property as determined by the custodia legis, as long as the property belongs to court; in all other cases, amount of counterbond the defendant, or is one in which he has should be equal to the amount fixed in the order proprietary interests, AND with permission of of attachment. the court à CASH DEPOSIT OR COUNTERBOND SHALL 2. Grounds SECURE THE PAYMENT OF ANY JUDGMENT THAT ATTACHING PARTY MAY RECOVER Recovery of specified amount of money and damages, except moral or exemplary, where b. Applicant’s bond is insufficient or party is about to depart from the Phils with sureties fail to justify; intent to defraud creditors; c. Attachment was improperly or Action for money or property embezzled or for irregularly issued; willful violation of duty by public officers, officers d. Property attached is exempt from of corporation, agent, or fiduciary; execution; Recovery of possession of property (both real e. Judgment is rendered against attaching and personal) unjustly detained, when the party; property is concealed or disposed of to prevent f. Attachment is excessive – discharge is is being found or taken; with respect to the excess Action against party guilty of fraud in contracting 5. Application for discharge may only be filed the debt or incurring the obligation or in the with the court where the action is pending and performance thereof; may be filed even before enforcement of the Action against party who is concealing or writ so long as there has been an order of disposing of property, or is about to do so, with attachment. intent to defraud creditors; Action against party who is not a resident of the 6. When to apply for damages against the Phils and cannot be found therein or upon who attachment bond service by publication can be made. 3. PRINCIPLE OF PRIOR OR CONTEMPORARY Before trial; JURISDICTION: Before appeal perfected; Before judgment becomes executory; Enforcement of writ of preliminary attachment In the appellate court for damages pending must be preceded by or simultaneously appeal, before judgment becomes executory. accompanied by service of summons, copy of 7. When judgment becomes executory, complaint, application and affidavits for the sureties on counterbond to lift attachment are attachment and the bond upon the adverse charged and can be held liable for the amount of party; BUT the requirement of prior or judgment and costs upon notice and summary contemporaneous service of summons shall not hearing. There is no need to first execute apply where the summons could not be served judgment against the judgment obligor before despite diligent efforts, or the defendant is a proceeding against sureties. resident of the Phils temporarily absent 8. Claims for damages cannot be subject of therefrom, or the defendant is a non-resident of independent action except: the Phils or the action is in rem or quasi in rem. a. When principal case is dismissed by the trial court for lack of jurisdiction without giving 4. When preliminary attachment is discharged the claiming party opportunity to prove claim for a. Debtor posts a counterbond or makes damages; requisite cash deposit- if attachment to be b. When damages sustained by a third person not a party to the action. à When an application for a writ of preliminary Rule 58 Preliminary Injunction injunction or a temporary restraining order is included in a complaint or any initiatory 1. Preliminary injunction distinguished from pleading, the case, if filed in a multiple-sala Prohibition court, shall be raffled only after NOTICE to and IN THE PRESENCE of the adverse party or the Preliminary Injunction person to be enjoined. In any event, such notice - Generally directed against party to the action shall be preceded, or contemporaneously but may be against any person accompanied by service of summons, together - Does NOT involve the jurisdiction of the court with a copy of the complaint and the applicant’s - May be main action itself or just a provisional affidavit and bond, upon the adverse party in the remedy in the main action Phils; BUT the requirement of prior or Prohibition contemporaneous service of summons shall NOT - Directed against a court, tribunal, or person apply where the summons could not be served exercising judicial powers despite diligent efforts, or the defendant is a - May be on the ground that the court against resident of the Phils temporarily absent whom the writ is sought acted without or in therefrom, or the defendant is a non-resident of excess of jurisdiction; the Phils - Always a main action à Difference with principle in preliminary 2. Grounds for Preliminary Injunction attachment – In attachment, the principle applies only in the implementation of the writ, Plaintiff is entitled to relief sought which consists while in applications for injunction or TRO, this in restraining or requiring the performance of principle applies before the raffle and issuance acts (latter is preliminary mandatory injunction); of the writs or TRO. The commission of acts or non-performance during pendency of litigation would probably 6. TRO good for only 20 days from service; 60 work injustice to the plaintiff; days for CA; until further orders from SC. Defendant is doing or about to do an act violating plaintiff’s rights respecting the subject of the 7. TRO can be issued ex parte only if matter of action and tending to render judgment grave urgency and plaintiff will suffer grave ineffectual. injustice and irreparable injury. Good for 72 3. Injunction may be refused or dissolved when: hours from issuance, within which judge must comply with service of summons, complaint, Complaint is insufficient; affidavit and bond, and hold summary hearing to Defendant is permitted to post a counterbond it determine whether TRO should be extended for appearing that he would sustain great and 20 days. In no case can TRO be longer than 20 irreparable injury if injunction granted or days including 72 hours. continued while plaintiff can be fully compensated; 8. No TRO, preliminary injunction or preliminary Plaintiff’s bond is insufficient or defective mandatory injunction may issue against the 4. No Preliminary Injunction or TRO may be government in cases involving implementation issued without posting of bond and notice to of government infrastructure projects. (Garcia adverse party and hearing. vs. Burgos, reiterated in Administrative Circular no. 7-99, promulgated June 25,1999) 5. PRINCIPLE OF PRIOR OR CONTEMPORARY JURISDICTION: Rule 59 Receivership Available only where the principal relief sought in the action is the recovery of possession of 1. When receiver may be appointed: personal property; 2. When receivership may be denied/lifted Can be sought only where the defendant is in the Party has an interest in the property or fund actual or constructive possession of the personal subject of the action and such is in danger of property involved. being lost, removed, or materially injured; Extends only to personal property capable of Action by mortgagee for foreclosure of mortgage manual delivery; when the property is in danger of being wasted Available to recover personal property even if or materially injured and that its value is the same is NOT being concealed, removed, or probably insufficient to discharge the mortgage disposed of; debt, OR that the parties have stipulated in the Cannot be availed of if property is in custodia contract of mortgage; legis, as where is it under attachment, or was After judgment, to preserve the property during seized under a search warrant or distrained for the pendency of the appeal, or to dispose of it, tax assessment. or to aid in execution when execution has been He seasonably posts redelivery bond returned unsatisfied or the judgment debtor Plaintiff’s bond is insufficient or defective refuses to apply his property to satisfy judgment, Property is not delivered to plaintiff for any or to carry out the judgment. reason. When appointing one is the most convenient à Replevin bond is only intended to indemnify and feasible means to preserve, administer, or defendant against any loss that he may suffer by dispose of the property in litigation. being compelled to surrender the possession of Appointment sought is without sufficient cause; the disputed property pending trial of the action. Adverse party files sufficient bond for damages; Thus, surety not liable for payment of judgment Applicant or receiver’s bond is insufficient. for damages rendered against plaintiff on a 3. Both the applicant for the receivership and counterclaim for punitive damages for the receiver appointed must file separate bonds. fraudulent or wrongful acts committed by the plaintiffs which are unconnected with the 4. In claims against the bond, it shall be filed, defendant’s deprivation of possession by the ascertained and granted under the same plaintiff. procedure as Section 20, Rule 57, whether is be damages against the applicant’s bond for the Special Civil Actions unlawful appointment of the receiver or for enforcing the liability of the sureties of the 1. Types of Special Civil Actions receiver’s bond by reason of the receiver’s management (in the latter case, no longer need Mandamus to file a separate action). Interpleader Certiorari Contempt Prohibition Rule 60 Replevin Eminent Domain Declaratory Relief 1. Replevin Quo warranto 2. Defendant entitled to return of property Partition of real estate taken under writ if: Foreclosure of mortgage Unlawful detainer Forcible Entry