G.R. No.
L-252 March 30, 1946
TRANQUILINO CALO and DOROTEO SAN
JOSE, petitioners,
vs.
ARSENIO C. ROLDAN, Judge of First Instance of
Laguna, REGINO RELOVA and TEODULA
BARTOLOME, respondents.
Zosimo D. Tanalega for petitioners.
Estanislao A. Fernandez for respondents Relova and
Bartolome.
No appearance for respondent Judge.
FERIA, J.:
This is a petition for writ of certiorari against the
respondent Judge Arsenio C. Roldan of the Court First
Instance of Laguna, on the ground that the latter has
exceeded his jurisdiction or acted with grave abuse of
discretion in appointing a receiver of certain lands and their
fruits which, according to the complainant filed by the
other respondents, as plaintiffs, against petitioners, as
defendants, in case No. 7951, were in the actual possession
of and belong to said plaintiffs.
The complaint filed by plaintiffs and respondents against
defendants and petitioners in the Court of First Instance of
Laguna reads as follows:
1. That the plaintiffs and the defendants are all of
legal age, Filipino citizens, and residents of Pila,
Laguna; the plaintiffs are husband and wife..
2. That the plaintiff spouses are the owners and
the possessors of the following described parcels
of land, to wit:.
xxx xxx xxx
3. That parcel No. (a) described above is now an
unplanted rice land and parcel No. (b) described
in the complaint is a coconut land, both under the
possession of the plaintiffs..
4. That the defendants, without any legal right
whatsoever and in connivance with each other,
through the use of force, stealth, threats and
intimidation, intend or are intending to enter and
work or harvest whatever existing fruits may now
be found in the lands above-mentioned in
violation of plaintiff's in this case ineffectual..
5. That unless defendants are barred, restrained,
enjoined, and prohibited from entering or
harvesting the lands or working therein through
ex-parte injunction, the plaintiffs will suffer
injustice, damages and irreparable injury to their
great prejudice..
6. That the plaintiffs are offering a bond in their
application for ex-parte injunction in the amount
of P2,000, subject to the approval of this Hon.
Court, which bond is attached hereto marked as
Annex A and made an integral part of this
complaint..
7. That on or about June 26, 1945, the
defendants, through force, destroyed and took
away the madre-cacao fencer, and barbed wires
built on the northwestern portion of the land
designated as parcel No. (b) of this complaint to
the damage and prejudice of the plaintiffs in the
amount of at least P200..
Wherefore, it is respectfully prayed:.
(a) That the accompanying bond in the amount of
P2,000 be approved;
(b) That a writ of preliminary injunction be
issued ex-parte immediately restraining,
enjoining and prohibiting the defendants, their
agents, servants, representatives, attorneys, and,
(or) other persons acting for and in their behalf,
from entering in, interfering with and/or in any
wise taking any participation in the harvest of the
lands belonging to the plaintiffs; or in any wise
working the lands above-described;
(c) That judgment be rendered, after due hearing,
declaring the preliminary injunction final;.
(d) That the defendants be condemned jointly and
severally to pay the plaintiffs the sum of P200 as
damages; and.
(e) That plaintiffs be given such other and further
relief just and equitable with costs of suit to the
defendants.
The defendants filed an opposition dated August 8, 1945, to
the issuance of the writ of preliminary injunction prayed for
in the above-quoted complaint, on the ground that they are
owners of the lands and have been in actual possession
thereof since the year 1925; and their answer to the
complaint filed on August 14, 1945, they reiterate that they
are the owners and were then in actual possession of said
property, and that the plaintiffs have never been in
possession thereof.
The hearing of the petition for preliminary injunction was
held on August 9, 1945, at which evidence was introduced
by both parties. After the hearing, Judge Rilloraza, then
presiding over the Court of First Instance of Laguna, denied
the petition on the ground that the defendants were in actual
possession of said lands. A motion for reconsideration was
filed by plaintiffs on August 20, 1945, but said motion had
not yet, up to the hearing of the present case, been decided
either by Judge Rilloraza, who was assigned to another
court, or by the respondent judge.
The plaintiffs (respondents) filed on September 4, 1945, a
reply to defendants' answer in which, among others, they
reiterate their allegation in the complaint that they are
possessors in good faith of the properties in question.
And on December 17, plaintiffs filed an urgent petition ex-
parte praying that plaintiffs' motion for reconsideration of
the order denying their petition for preliminary injunction
be granted and or for the appointment of a receiver of the
properties described in the complaint, on the ground that (a)
the plaintiffs have an interest in the properties in question,
and the fruits thereof were in danger of being lost unless a
receiver was appointed; and that (b) the appointment of a
receiver was the most convenient and feasible means of
preserving, administering and or disposing of the properties
in litigation which included their fruits. Respondents Judge
Roldan, on the same date, December 17, 1945, decided that
the court would consider the motion for reconsideration in
due time, and granted the petition for appointment of and
appointed a receiver in the case.
The question to be determined in the present special civil
action of certiorari is, whether or not the respondent judge
acted in excess of his jurisdiction or with grave abuse of
discretion in issuing the order appointing a receiver in the
case No. 7951 of the Court of First Instance of Laguna; for
it is evident that there is no appeal or any other plain,
speedy, and adequate remedy in the ordinary course of the
law against the said order, which is an incidental or
interlocutory one.
It is a truism in legal procedure that what determines the
nature of an action filed in the courts are the facts alleged in
the complaint as constituting the cause of the action. The
facts averred as a defense in the defendant's answer do not
and can not determine or change the nature of the plaintiff's
action. The theory adopted by the plaintiff in his complaint
is one thing, and that of the defendant in his answer is
another. The plaintiff has to establish or prove his theory or
cause of action in order to obtain the remedy he prays for;
and the defendant his theory, if necessary, in order to defeat
the claim or action of the plaintiff..
According to the complaint filed in the said case No. 7951,
the plaintiff's action is one of ordinary injunction, for the
plaintiffs allege that they are the owners of the lands therein
described, and were in actual possession thereof, and that
"the defendants without any legal right whatever and in
connivance with each other, through the use of force,
stealth, threat and intimidation, intend or are intending to
enter and work or harvest whatever existing fruits may be
found in the lands above mentioned in violation of
plaintiffs' proprietary rights thereto;" and prays "that the
defendants, their agents, servants, representatives, and other
persons acting for or in their behalf, be restrained, enjoined
and prohibited from entering in, interfering with, or in any
way taking any participation in the harvest of the lands
above describe belonging to the plaintiffs."
That this is the nature of plaintiffs' action corroborated by
the fact that they petitioned in the same complaint for a
preliminary prohibitory injunction, which was denied by
the court in its order dated August 17, 1945, and that the
plaintiffs, in their motion for reconsideration of said order
filed on August 20 of the same year, and in their urgent
petition dated December 17, moving the court to grant said
motion for reconsideration, reiterated that they were actual
possessors of the land in question.
The fact that plaintiffs, in their reply dated September 4,
after reiterating their allegation or claim that they are the
owners in fee simple and possessors in good faith of the
properties in question, pray that they be declared the
owners in fee simple, has not changed the nature of the
action alleged in the complaint or added a new cause of
action thereto; because the allegations in plaintiffs' reply
were in answer to defendants' defenses, and the nature of
plaintiffs' cause of action, as set forth in their complaint,
was not and could not be amended or changed by the reply,
which plaintiffs had the right to present as a matter of
course. A plaintiff can not, after defendant's answer, amend
his complaint by changing the cause of action or adding a
new one without previously obtaining leave of court
(section 2, Rule 17)..
Respondents' contention in paragraph I of their answer that
the action filed by them against petitioners in the case No.
7951 of the Court of First Instance of Laguna is not only
for injunction, but also to quiet title over the two parcels of
land described in the complaint, is untenable for the reasons
stated in the previous paragraph. Besides, an equitable
action to quiet title, in order to prevent harrassment by
continued assertion of adverse title, or to protect the
plaintiff's legal title and possession, may be filed in courts
of equity (and our courts are also of equity), only where no
other remedy at law exists or where the legal remedy
invokable would not afford adequate remedy (32 Cyc.,
1306, 1307). In the present case wherein plaintiffs alleged
that they are the owners and were in actual possession of
the lands described in the complaint and their fruits, the
action of injunction filed by them is the proper and
adequate remedy in law, for a judgment in favor of
plaintiffs would quiet their title to said lands..
The provisional remedies denominated attachment,
preliminary injunction, receivership, and delivery of
personal property, provided in Rules 59, 60, 61, and 62 of
the Rules of Court, respectively, are remedies to which
parties litigant may resort for the preservation or protection
of their rights or interest, and for no other purpose, during
the pendency of the principal action. If an action, by its
nature, does not require such protection or preservation,
said remedies can not be applied for and granted. To each
kind of action or actions a proper provisional remedy is
provided for by law. The Rules of Court clearly specify the
case in which they may be properly granted. .
Attachment may be issued only in the case or actions
specifically stated in section 1, Rule 59, in order that the
defendant may not dispose of his property attached, and
thus secure the satisfaction of any judgment that may be
recovered by plaintiff from defendant. For that reason a
property subject of litigation between the parties, or
claimed by plaintiff as his, can not be attached upon motion
of the same plaintiff..
The special remedy of preliminary prohibitory injunction
lies when the plaintiff's principal action is an ordinary
action of injunction, that is, when the relief demanded in
the plaintiff's complaint consists in restraining the
commission or continuance of the act complained of, either
perpetually or for a limited period, and the other conditions
required by section 3 of Rule 60 are present. The purpose
of this provisional remedy is to preserve the status quo of
the things subject of the action or the relation between the
parties, in order to protect the rights of the plaintiff
respecting the subject of the action during the pendency of
the suit. Because, otherwise or if no preliminary prohibition
injunction were issued, the defendant may, before final
judgment, do or continue the doing of the act which the
plaintiff asks the court to restrain, and thus make
ineffectual the final judgment rendered afterwards granting
the relief sought by the plaintiff. But, as this court has
repeatedly held, a writ of preliminary injunction should not
be granted to take the property out of the possession of one
party to place it in the hands of another whose title has not
been clearly established..
A receiver may be appointed to take charge of personal or
real property which is the subject of an ordinary civil
action, when it appears that the party applying for the
appointment of a receiver has an interest in the property or
fund which is the subject of the action or litigation, and that
such property or fund is in danger of being lost, removed or
materially injured unless a receiver is appointed to guard
and preserve it (section 1 [b], Rule 61); or when it appears
that the appointment of a receiver is the most convenient
and feasible means of preserving, administering or
disposing of the property in litigation (section 1 [e] of said
Rule). The property or fund must, therefore be in litigation
according to the allegations of the complaint, and the object
of appointing a receiver is to secure and preserve the
property or thing in controversy pending the litigation. Of
course, if it is not in litigation and is in actual possession of
the plaintiff, the latter can not apply for and obtain the
appointment of a receiver thereof, for there would be no
reason for such appointment.
Delivery of personal property as a provisional remedy
consists in the delivery, by order of the court, of a personal
property by the defendant to the plaintiff, who shall give a
bond to assure the return thereof or the payment of
damages to the defendant in the plaintiff's action to recover
possession of the same property fails, in order to protect the
plaintiff's right of possession of said property, or prevent
the defendant from damaging, destroying or disposing of
the same during the pendency of the suit.
Undoubtedly, according to law, the provisional remedy
proper to plaintiffs' action of injunction is a preliminary
prohibitory injunction, if plaintiff's theory, as set forth in
the complaint, that he is the owner and in actual possession
of the premises is correct. But as the lower court found at
the hearing of the said petition for preliminary injunction
that the defendants were in possession of the lands, the
lower court acted in accordance with law in denying the
petition, although their motion for reconsideration, which
was still pending at the time the petition in the present case
was heard in this court, plaintiffs insist that they are in
actual possession of the lands and, therefore, of the fruits
thereof.
From the foregoing it appears evident that the respondent
judge acted in excess of his jurisdiction in appointing a
receiver in case No. 7951 of the Court of First Instance of
Laguna. Appointment of a receiver is not proper or does
not lie in an action of injunction such as the one filed by the
plaintiff. The petition for appointment of a receiver filed by
the plaintiffs (Exhibit I of the petition) is based on the
ground that it is the most convenient and feasible means of
preserving, administering and disposing of the properties in
litigation; and according to plaintiffs' theory or allegations
in their complaint, neither the lands nor the palay harvested
therein, are in litigation. The litigation or issue raised by
plaintiffs in their complaint is not the ownership or
possession of the lands and their fruits. It is whether or not
defendants intend or were intending to enter or work or
harvest whatever existing fruits could then be found in the
lands described in the complaint, alleged to be the
exclusive property and in the actual possession of the
plaintiffs. It is a matter not only of law but of plain
common sense that a plaintiff will not and legally can not
ask for the appointment or receiver of property which he
alleges to belong to him and to be actually in his
possession. For the owner and possessor of a property is
more interested than persons in preserving and
administering it.
Besides, even if the plaintiffs had amended their complaint
and alleged that the lands and palay harvested therein are
being claimed by the defendants, and consequently the
ownership and possession thereof were in litigation, it
appearing that the defendants (now petitioners) were in
possession of the lands and had planted the crop or palay
harvested therein, as alleged in paragraph 6 (a) and (b) of
the petition filed in this court and not denied by the
respondent in paragraph 2 of his answer, the respondent
judge would have acted in excess of his jurisdiction or with
a grave abuse of discretion in appointing a receiver thereof.
Because relief by way of receivership is equitable in nature,
and a court of equity will not ordinarily appoint a receiver
where the rights of the parties depend on the determination
of adverse claims of legal title to real property and one
party is in possession (53 C. J., p. 26). The present case
falls within this rule..
In the case of Mendoza vs. Arellano and B. de Arellano,
this court said:

Appointments of receivers of real estate in cases

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

Although the petition is silent on the matter, as the

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

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

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

As to the petitioners' petition that respondents Relova be

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

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

Hilado, and Bengzon, JJ., concur.
ELEAZAR V. ADLAWAN, petitioner,
vs.
HON. JUDGE VALERIANO P. TOMOL, as Presiding
Judge of Branch XI of RTC-Cebu (formerly Branch XI,
CFI-Cebu), Branch XXVII of RTC-Cebu, with Station
in Lapu-Lapu City (formerly Branch XVI, CFI-Cebu,
Presided over by former Judge Ceferino E. Dulay), and
ABOITIZ COMPANY, INC., respondents.
Pablo P. Garcia for petitioner.
Angara, Concepcion, Regala & Cruz for private
respondent.
FERNAN, C.J.:
This is a special civil action
for certiorari and mandamus seeking to annul : [a] the
Order dated December 20, 1982 of respondent Judge
Valeriano P. Tomol, Branch XI of CFI-Cebu, now Branch
XI, RTC-Cebu, in Civil Case No. R-21761, entitled
"Aboitiz and Company, Inc. v. Adlawan, et al" denying the
motion of the defendant to require the Provincial Sheriff of
Cebu to deliver to him the properties seized by the Sheriff
of Davao City and [b] the Order dated September 4, 1982
of Judge Ceferino F. Dulay, Branch XVI of the Court of
First Instance of Cebu, now Branch XXVII, RTC-Cebu,
Lapu-Lapu City, in Civil Case No. 619-L between the same
parties, denying for lack of merit petitioner's Omnibus
Motion to reconsider, dissolve and set aside the Writ of
seizure and Replevin.
The antecedent facts are as follows:
Petitioner Eleazar A. Adlawan, a private contractor, was
awarded by the National Irrigation Administration (NIA)
and the Bureau of Public Highways (BPH) contracts for the
construction of various infrastructure projects of the
government to perform his obligations thereunder,
petitioner sought financial assistance and support from
private respondent Aboitiz and Company, Inc. For failure
of petitioner to pay the installments and amortizations,
private respondent filed on May 13, 1982 before the Court
of First Instance of Cebu a complaint 1 for the collection of
a sum of money and damages including an ex-
parte application for the issuance of a writ of preliminary
attachment against the property of petitioner as defendant
therein. The Executive Judge without notice and hearing
issued an order 2 on May 14, 1982 directing the issuance of
a writ of preliminary attachment against all the properties
of petitioner, real and personal, upon the filing of an
attachment bond for Four Million Pesos. The case,
docketed as Civil Case No. R21761 was raffled and later
assigned to Branch XI of the Court of First Instance of
Cebu, presided by respondent Judge Valeriano P. Tomol.
On May 26, 1982, writs of preliminary attachment were
issued addressed to the Sheriffs of Cebu, Davao City,
Quezon City, Davao del Sur and Davao del Norte, directing
them to attach the real and personal properties of petitioner
within their respective jurisdictions. On the strength of the
writ of preliminary attachment, the bulk of petitioner's
property in Davao City was attached.
Subsequently, private respondent filed an Urgent Ex-
parte Motions 3 asking the court that it be allowed to take
possession and custody of the attached properties to protect
its interest and to avoid any damage or deterioration
considering that the sheriff has no proper place to store or
deposit said properties. This was granted by respondent
Judge on May 28, 1982 for being meritorious.
Meanwhile, petitioner before submitting an answer to the
complaint, filed a Motion for a Bill of Particulars 4 and to
Set Aside the Ex-Parte Writ of Preliminary
Attachment 5 which was opposed by private respondent.
Finding that the discharge of the writ of attachment is
unavoidable on the ground that it was issued ex-parte,
without notice and hearing, based principally on the alleged
removal or disposition by the defendants of their properties
with intent to defraud the plaintiff, which allegation was
limited to a bare assertion and not persuasively substantial,
respondent Judge issued an Orders 6 dated July 6, 1982, the
dispositive portion of which reads:
Accordingly, the Order of May 14, 1982 granting
the writ of preliminary attachment
is lifted and vacated. The writs issued on 26 May
1982, are dissolved and recalled and the
properties levied and seized by the Sheriffs of
Cebu and Davao City
are discharged and released.
SO ORDERED. (Emphasis supplied)
In view of the foregoing, private respondent Aboitiz and
Company, Inc. filed an Urgent Ex-Parte Motion 7 dated
July 7, 1982 praying for a stay of the July 6, 1982 Order
dissolving the writ of preliminary attachment, thus
maintaining the status quo. Private respondent further
prayed for the court to direct the sheriff of Davao City to
desist and/or stop the enforcement or implementation of the
order lifting the attachment and to grant them fifteen (15)
days to elevate the matter to the Appellate Court.
Consequently, respondent Judge Tomol issued on the same
day an Orders 8 granting the motion prayed for by private
respondent Aboitiz and Company, Inc. Thus, the July 6,
1982 Order was stayed.
In the meantime, three (3) Deputy Sheriffs of Cebu
implemented the Order lifting the Writ of Attachment and
were able to pull out some personal properties of petitioner
Adlawan. They were not able to take out all the attached
properties in view of the subsequent Order of respondent
judge to stay its implementation.
As petitioner's Motion for a Bill of Particulars was not
immediately acted upon, he was not able to file an answer
or interpose any counterclaim. For this reason, petitioner
filed an Application for Award of Damages dated July 9,
1982 asking for a reasonable rental on the attached heavy
construction equipment, machineries and other properties at
the rate of P30,000.00 per day from the date of seizure until
said properties are actually returned to his possession and
control.9
Before the court a quo could act on the motions of
petitioner Adlawan, and before he could file an answer, his
motion for a bill of particulars not having been acted upon,
private respondent Aboitiz and Company, Inc., filed on
July 13, 1982 a Notice of Dismissal or Withdrawal of
Complaint 10 as a matter of right in accordance with Section
1, Rule 17 of the Rules of Court. Respondent Judge Tomol
issued an Order 11 dated July 15, 1982, the dispositive
portion of which reads:
Accordingly, the termination of this case upon
the notice of dismissal voluntarily filed by the
plaintiff is hereby confirmed. For emphasis, all
orders of this Court issued prior to the filing of
said notice of dismissal are each and all
rendered functus officio. By the same token, all
pending incidents, particularly the defendant's
motion for a bill of particulars and their petition
for damages against the Plaintiffs attachment
bond, are now beyond the competence of this
Court to consider for being moot and academic.
SO ORDERED
Petitioner Adlawan filed a Motion 12 dated July 28, 1982
praying for the issuance of an order to the Provincial
Sheriff of Cebu to implement and enforce the Order of
respondent Judge dated July 6, 1982 dissolving the writ of
preliminary attachment and to secure the delivery of the
attached properties to the petitioner. Respondent Judge
issued an Order 13 dated December 20, 1982 denying the
Motion in view of the institution by private respondent
Aboitiz and Company, Inc. of a civil case (No. 619-L) for
delivery of Personal Properties with Replevin and Damages
before the Court of First Instance of Cebu, Branch XVI in
Lapu-Lapu City on July 13, 1982 and the filing of
petitioner Adlawan of a case for damages (Civil Case No.
22265) before the Court of First Instance of Cebu, Branch
X, in connection with the seizure of his properties under the
writ of preliminary attachment.
With regard to the replevin case filed by private respondent
Aboitiz and Company, Inc., the Court of First Instance of
Cebu, Branch XVI, Lapu-Lapu City, issued an Order 14 for
the seizure and delivery of the properties described therein
to the private respondent. The seized properties were thus
delivered to private respondent by the Clerk of Court and
Ex-officio Provincial Sheriff on July 24, 1982. Petitioner
filed an Omnibus Motion 15 dated July 17, 1982 to
reconsider, dissolve and set aside the Writ of Seizure and
Replevin and to direct that the properties seized be returned
to petitioner as well as to dismiss the complaint. In support
of this motion, petitioner alleged, among others, that
private respondent's office is situated in Cebu City while
petitioner is a resident of mainland Cebu, particularly
Minglanilla therefore the Court of First Instance of Cebu
stationed in Lapu-Lapu should not accept the case.
Furthermore, he alleged that the same personal properties
seized are in custodia legis by virtue of a writ of
preliminary attachment issued by the Court of First
Instance of Cebu, Branch XI, presided by respondent Judge
Tomol. The Court of First Instance of Cebu, Branch XVI in
Lapu-Lapu City, presided by Judge Ceferino E. Dulay
denied the Omnibus Motion for lack of merit on September
4, 1982. Petitioner Adlawan filed a Motion for
Reconsideration but the same was denied.
Hence, the present petition
for certiorari and mandamus impleading respondent Judge
Valeriano P. Tomol as Presiding Judge of Branch XI of the
Court of First Instance of Cebu (now Branch XI, RTC-
Cebu) and Branch XVI, CFI-Cebu presided by Judge
Ceferino E. Dulay in Lapu-Lapu City (now Branch XXVII
of RTC Cebu in Lapu-Lapu) and private respondent
Aboitiz and Company, Inc.
The issues raised by petitioner Adlawan are the following,
to wit:
1) After the attachment of petitioner's properties
was dissolved and discharged because it was
found by respondent Judge to be wrongful and
illegal, does it not constitute grave and manifest
abuse of discretion on the part of the same
respondent judge TO REFUSE to implement his
own order for the return of the attached properties
to petitioner simply because private respondent
suddenly dismissed its complaint?
2) On the other hand, the court, after having
deprived petitioner possession and enjoyment of
his properties, by reason of an attachment which,
subsequently, was dissolved and discharged, was
it not the clear, specific and inescapable duty of
that same court, to order that said properties be
returned and restored to the possession and
enjoyment of petitioner?
3) Are not the attached properties of petitioner
under the custodia legis of the attaching court
Branch XI, CFI-Cebu (now Branch XI, RTC-
Cebu) and, therefore, subject to its jurisdiction
and control? If so, does it not constitute grave and
manifest abuse of discretion on the part of the
attaching court to literally wash his (sic) hands
off any duty or responsibility by considering
himself (sic) as having been divested of authority
to deal with such properties?
4) Did not the Lapu-Lapu Branch of CFI-Cebu
act, without or in excess of his (sic) jurisdiction
or, at least, with grave abuse of discretion, in
taking cognizance of the replevin case which
 involves properties already in custodia legis of
Branch XI of CFI-Cebu?
5) On the other hand, was it not the clear, specific
and inescapable duty of the Lapu-Lapu Branch of
CFI-Cebu, to dismiss the replevin case and
dissolve the writ of replevin, not only because of
the principle of custodia legis but also because it
was in clear violation of Adm. Order No. 6 of this
Honorable Supreme Court, which amends Adm.
Orders No. 147 and 328 of the Department (now
Ministry) of Justice? 16
From the recital of facts may be gleamed a series of
peculiar events and circumstances requiring examination
and looking into in order that justice and equity may be
subserved.
Petitioner's properties were attached on the strength of the
writs of preliminary attachment issued without notice and
hearing by the executive judge. These attached properties
were given to the custody of private respondent, Aboitiz
and Company, Inc. Petitioner then filed a Motion to
Dissolve the Writ of Attachment which was granted by
respondent Judge Tomol. Thus, petitioner was able to
recover some of his properties. But on the following day,
this order was stayed by the same respondent judge leaving
the rest of petitioner's properties with private respondent.
Later, private respondent withdrew its complaint which was
confirmed by respondent Judge Tomol. Petitioner Adlawan
filed a motion to have the rest of his properties returned but
respondent judge refused to act on said motion due to cases
filed by both parties in the different branches of the Court
of First Instance of Cebu relating to the same case.
After a careful examination of the records of the case We
rule in favor of petitioner Adlawan.
There is no question that the order dated July 6, 1982 of
respondent Judge Valeriano P. Tomol, Jr. lifting and
vacating the order granting the writ of preliminary
attachment is a valid order, issued while he had jurisdiction
over the case. The execution of aforesaid order of July 6,
1982 was stayed for a period of fifteen (15) days on motion
of the plaintiff to enable the latter to question the propriety
or impropriety of the same in the appellate court. Instead,
plaintiff filed a civil case for delivery of Personal
Properties with Replevin and Damages with another branch
of the CFI of Cebu. Accordingly, having failed to appeal or
question the aforementioned order in the appellate court as
originally manifested, the same became final and
executory.
Section 1, Rule 39 of the Revised Rules of Court provides:
Execution upon final judgment or orders.
Execution shall issue upon a judgment or order
that finally disposes of the action or proceeding.
Such execution shall issue as a matter of right
upon the expiration of the period to appeal
therefrom if no appeal has been perfected.
It is basic that once a judgment becomes final, the
prevailing party is entitled as a matter of right to a Writ of
Execution, and the issuance thereof is the Court's
ministerial duty."17
But as earlier stated, the reasons advanced by respondent
Judge Tomol for denying the enforcement of his order
dated July 6, 1982 which lifted the writ of attachment and
the restoration of the seized properties to the defendant
petitioner herein are: [a] the filing by private respondent of
Civil Case No. 619-L with Branch XVI of CFI-Lapu-Lapu
City for delivery of Personal Properties with Replevin and
Damages which as a consequence, the same properties
involved in this case were seized under a writ of replevin
upon order of aforesaid court and [b] the filing by petitioner
of Civil Case No. 22265 before Branch X of the Court of
First Instance of Cebu, for damages.
Hence, the issues in this case center on the nature and
purpose of the writ of attachment.
A writ of preliminary attachment is a provisional remedy
issued upon order of the court where an action is pending to
be levied upon the property or properties of the defendant
therein, the same to be held thereafter by the Sheriff as
security for the satisfaction of whatever judgment might be
secured in said action by the attaching creditor against the
defendant. 18
The provisional remedy of attachment is available in order
that the defendant may not dispose of his property attached,
and thus secure the satisfaction of any judgment that may
be secured by plaintiff from defendant. 19 The purpose and
function of an attachment or garnishment is two-fold. First,
it seizes upon property of an alleged debtor in advance of
final judgment and holds it subject to appropriation thus
prevents the loss or dissipation of the property by fraud or
otherwise. Second, it subjects to the payment of a creditor's
claim property of the debtor in those cases where personal
service cannot be obtained upon the debtor. 20 This remedy
is to secure a contingent lien on defendant's property until
plaintiff can, by appropriate proceedings, obtain a judgment
and have such property applied to its satisfaction, or to
make some provision for unsecured debts in cases where
the means of satisfaction thereof are liable to be removed
beyond the jurisdiction, or improperly disposed of or
concealed, or otherwise placed beyond the reach of
creditors. 21
Attachment is an ancillary remedy. It is not sought for its
own sake but rather to enable the attaching party to realize
upon relief sought and expected to be granted in the main
or principal pal action. 22
The remedy of attachment is adjunct to the main suit,
therefore, it can have no independent existence apart from a
suit on a claim of the plaintiff against the defendant. In
other words, a attachment or garnishment is generally
ancillary to, and dependent on, a principal proceeding,
either at law or in equity, which has for its purpose a
determination of the justice of creditor's demand. 23
Thus, this Court ruled that upon levy by attachment of the
property in question by order of the Court, said property
fell into custodia legis of that court for purposes of that
civil case only. Any relief against such attachment and the
execution an issuance of a writ of possession that ensued
subsequently could be disposed of only in that case. 24
More specifically, it was held that courts have no
jurisdiction to order the delivery of personal property
(replevin) to the plaintiff if the property is under
attachment. 25 Only courts having supervisory control or
superior jurisdiction in the premises, have the right to
interfere with and change possession of property
in custodia legis. 26
More recently, this Court ruled that the garnishment of
property to satisfy a writ of execution operates as an
attachment and fastens upon the property a lien by which
the property is brought under the jurisdiction of the court
issuing the writ. It is brought into custodia legis under the
sole control of such court. 27
During the life of the attachment, the attached property
continues in the custody of the law, the attaching officer
being entitled to its possession and liability for its safe
keeping. 28
Based on the above-cited principles, it is obvious that the
writ of preliminary attachment issued is already dissolved
and rendered non-existent in view of the withdrawal of the
complaint by Aboitiz and Company, Inc. More importantly,
even if the writ of attachment can be considered
independently of the main case, the same, having been
improperly issued as found by respondent Judge Tomol
himself, is null and void and cannot be a justification for
holding petitioners' properties in custodia legis any longer.
To reiterate, an attachment is but an incident to a suit; and
unless the suit can be maintained, the attachment must fall.
When Aboitiz and Company, Inc. withdrew its complaint,
the attachment ceased to have a leg to stand on. The
attached properties of petitioner Adlawan which are in the
custody of private respondent Aboitiz should be returned to
petitioner. This is only proper and equitable and in
consonance with the rules and principles of law. The
parties, by the withdrawal of the complaint, should be
placed in the same standing as they were before the filing
of the same.
Petitioner also questions the jurisdiction of the CFI of Cebu
stationed in Lapu-Lapu City to hear the replevin case filed
by private respondent in view of the fact that petitioner is a
resident of Minglanilla, Cebu while private respondent's
principal place of business is in Cebu City. Obviously, the
question posed by petitioner is venue.
A reading of the Omnibus Motion filed by petitioner, then
defendant therein, would reveal that he not only questioned
the jurisdiction of the court but likewise alleged non-
jurisdictional grounds for dismissing the replevin case, such
as the amount of the bond put up by Aboitiz & Co. as
grossly insufficient and that the same properties are
involved both in the replevin case and in the original
collection case with preliminary attachment. Thus, in so
doing, the court acquired jurisdiction over him. In the case
of Wang Laboratories, Inc. vs. Mendoza 29 this Court held:
Even though the defendant objects to the
jurisdiction of the court, if at the same time he
alleges any non-jurisdictional ground for
dismissing the action, the court acquires
jurisdiction over him.
Furthermore, in the case of City of Cebu
v. Consolacion, 30 We held that:
. . . any of the branches of the Court of First
Instance of the Province of Cebu, whether
stationed in the city of the same name or in any
of the municipalities of the province would be
proper venue for its trial and determination, it
being admitted that the parties are residents of the
Province of Cebu . . .
Finally, the employment by counsel for private respondent
of dubious procedural maneuvers as what transpired in the
case at bar obviously to continue the wrongful and illegal
possession and custody of petitioner's properties even after
the dissolution of the attachment is to say the least, hardly
commendable if not a form of "forum shopping", to seek
the court where he may possibly obtain favorable
judgment. 31
It may therefore be stated that the right to come before the
Courts to redress a grievance or right a wrong should be
exercised with prudence and good faith. In the case
of Indianapolis v. Chase National Bank, Trustee, 314 U.S.
69, it is opined that "Litigation is the pursuit of practical
ends, not a game of chess."
WHEREFORE, in view of the foregoing, this Court rules
that the attached properties left in the custody of private
respondent Aboitiz and Company, Inc. be returned to
petitioner Eleazar V. Adlawan without prejudice to the
outcome of the cases filed by both parties.
SO ORDERED.
SPOUSES JULIETA SALGADO and JOSE
SALGADO, Petitioners, v. HON. COURT OF
APPEALS and PHILIPPINE COMMERCIAL &
INDUSTRIAL BANK, Respondents.
Reyes & Reyes Law Office, for Petitioners.
San Juan Africa, Gonzales & San Agustin Law Office
for Private Respondent.
SYLLABUS
1. REMEDIAL LAW; PROVISIONAL REMEDIES;
ATTACHMENT; PURPOSE. The chief purpose of the
remedy of attachment is to secure a contingent lien on
defendants property until plaintiff can, by appropriate
proceedings, obtain a judgment and have such property
applied to its satisfaction, or to make some provision for
unsecured debts in cases where the means of satisfaction
thereof are liable to be removed beyond the jurisdiction, or
improperly disposed of or concealed, or otherwise placed
beyond the reach of creditors (7 C.J.S. 190).
2. ID.; ID.; ID.; REQUISITES FOR ISSUANCE SHALL
NOT ISSUE WHERE DEBTS SUFFICIENTLY
SECURED; REASON. The grounds upon which
attachment may issue are set forth in Section 1, Rule 57 of
the Rules of Court. But quite apart from the grounds stated
therein, it is further provided in Section 3 of Rule 57 that
"an order of attachment shall be granted only when it is
made to appear by the affidavit of the applicant or some
other person who personally knows the facts, that . . . there
is no other sufficient security for the claim sought to be
enforced by the action." The reason for the rule prohibiting
attachment where indebtedness was already secured is to
prevent the secured creditors from attaching additional
property and thus tying up more of the debtors property
than was necessary to secure the indebtedness (Blankenship
v. Myers, 54 P. 2d 314, 316; 97 Idaho 356 [1975]). Thus, to
sustain an order of attachment, "it is incumbent upon
plaintiff to establish either of these two facts, to wit: (a) that
the obligation had not been secured originally, or (b) that, if
secured at its beginning, the security later became
valueless." (Giandini v. Ramirez, 54 Pacific Reporter [2d]
91-92).
3. ID.; ID.; ID.; DISCHARGE THEREOF, WHEN
PROPER. Section 13, Rule 57 of the Rules of Court
authorizes the discharge of an attachment where the same
had been improperly or irregularly issued. In National
Coconut Corporation v. Hon. Potenciano Pecson, 90 Phil.
809, this Court ruled that when the facts or some of them,
stated in the plaintiffs affidavit, are shown by the
defendant to be untrue, the writ of attachment may be
considered as improperly or irregularly issued.
4. ID.; ID.; ID.; ISSUANCE THEREOF STRICTLY
CONSTRUED IN FAVOR OF DEFENDANT. Since
attachment is a harsh and rigorous remedy which exposes
the debtor to humiliation and annoyance, the rule
authorizing its issuance must be strictly construed in favor
of the defendant. It should not be abused as to cause
unnecessary prejudice. It is the duty of the court before
issuing the writ to ensure that all the requisites of the law
has been complied with (Guzman v. Catolico, 65 Phil. 257;
Salas v. Adil, 90 SCRA 125).
AQUINO, J., dissenting:chanrob1es virtual 1aw library
1. REMEDIAL LAW; PROVISIONAL REMEDY;
ATTACHMENT; MAY ISSUE EVEN IF DEBT IS
SECURED; CASE AT BAR. A writ of attachment may
be validly issued although the debt sued upon is secured by
mortgages where such mortgages covered not only the debt
sued upon but also the debtors other obligations; where the
debtors failed to assign to the creditor bank their sugar
proceeds which they had given as security for their loan;
and where the writ is supported by a sufficient bond.
DECISION
ESCOLIN, J.:
This is a petition for review filed by the spouses Jose
Salgado and Julieta Salgado to set aside the resolution of
the then Court of Appeals in CA-G.R. No. SP-09407-R,
dated September 18, 1980, which authorized the issuance
of a writ of attachment against the property of said
petitioners.
The pertinent facts that gave rise to this petition are as
follows: On May 8, 1978, the Philippine Commercial and
Industrial Bank, hereinafter referred to as the Bank, filed an
action against petitioners, docketed as Civil Case No.
29392 of the then Court of First Instance of Rizal, to
recover on a promissory note in the amount of
P1,510,905.96, inclusive of interest and other bank charges.
In its verified complaint, the Bank further prayed for the
issuance of a writ of attachment. As grounds therefor it
alleged that petitioners had fraudulently misappropriated
and/or converted to their own personal use and benefit the
sugar proceeds given as security for the payment of the
indebtedness; that petitioners are guilty of fraud in
contracting their obligation and have concealed, removed
or disposed of the properties mortgaged or assigned to the
plaintiff, or are concealing, removing or disposing or about
to do so, with intent to defraud their creditor; that the
obligation sought to be enforced is genuine and, therefore,
a sufficient cause of action exists; and that there is no
sufficient security for the claim sought to be enforced by
the action. Attached to the complaint was the affidavit of
Mrs. Helen Osias, Senior Branch Credit Division Manager
of the Bank, wherein she stated, among others, "that there
is no sufficient security for the claim sought to be enforced
by this action."cralaw virtua1aw library
On May 9, 1978, the trial court issued an order granting the
Banks prayer for preliminary attachment upon a bond in
the sum of P1,510,905.96. Upon the filing of said bond, the
Deputy Provincial Sheriff levied upon several parcels of
land of petitioners situated in the province of Negros
Occidental.
On September 15, 1978, petitioners Salgado moved to
quash the writ of attachment on the ground that respondent
Bank made fraudulent misrepresentation in securing the
writ by deleting the words "R E M" or "Real Estate
Mortgage" from the xerox copy of the promissory note
attached to the complaint, thereby "making it appear that
the note was unsecured when in truth and in fact it was
fully secured by a series of valid and existing real estate
mortgages duly registered and annotated in the titles of the
affected real properties in favor of the plaintiff Bank." In
the same motion, petitioners stressed the lack of factual
basis of the Banks claim as to their alleged fraudulent
misappropriation or conversion of the sugar proceeds given
as security for their obligation.
After due hearing, the trial court issued an order dated
January 31, 1979 granting petitioners motion and lifting
the writ of attachment previously issued.
Upon denial of its motion for reconsideration the Bank
went to the Court of Appeals on a petition for certiorari to
annul the order of the trial court lifting the writ of
attachment.cralawnad
On November 29, 1979, the respondent Court of Appeals,
finding that the order of the trial court was not arbitrarily
issued, dismissed the petition for lack of merit.
However, on motion of the Bank, the respondent Court
reconsidered its decision of November 29, 1979 and issued
the questioned resolution dated September 18, 1980, which
authorized the issuance of a writ of attachment.
Hence, the present recourse.
We find the petition impressed with merit, The chief
purpose of the remedy of attachment is to secure a
contingent lien on defendants property until plaintiff can,
by appropriate proceedings, obtain a judgment and have
such property applied to its satisfaction, or to make some
provision for unsecured debts in cases where the means of
satisfaction thereof are liable to be removed beyond the
jurisdiction, or improperly disposed of or concealed, or
otherwise placed beyond the reach of creditors. 1
The grounds upon which attachment may issue are set forth
in Section 1, Rule 57 of the Rules of Court. But quite apart
from the grounds stated therein, it is further provided in
Section 3 of Rule 57 that "an order of attachment shall be
granted only when it is made to appear by the affidavit of
the applicant or some other person who personally knows
the facts, that . . . there is no other sufficient security for the
claim sought to be enforced by the action."cralaw
virtua1aw library
The reason for the rule prohibiting attachment where
indebtedness was already secured is to prevent the secured
creditors from attaching additional property and thus tying
up more of the debtors property than was necessary to
secure the indebtedness. 2 Thus, to sustain an order of
attachment, "it is incumbent upon plaintiff to establish
either of these two facts, to wit: (a) that the obligation had
not been secured originally, or (b) that, if secured at its
beginning, the security later became valueless." 3
In the instant case, the allegation in the affidavit of the
Banks Credit Division Manager, Mrs. Helen Osias, to the
effect that "there is no sufficient security for the claim
sought to be enforced by this action" has been shown to be
false. It is undisputed that the note sued upon "is fully
secured by a series of valid and existing real estate
mortgages duly registered and annotated in the titles of the
affected real property in favor of the plaintiff Bank."cralaw
virtua1aw library
Section 13, Rule 57 of the Rules of Court authorizes the
discharge of an attachment where the same had been
improperly or irregularly issued. In National Coconut
Corporation v. Hon. Potenciano Pecson, 4 this Court ruled
that when the facts or some of them, stated in the plaintiffs
affidavit, are shown by the defendant to be untrue, the writ
of attachment may be considered as improperly or
irregularly issued.
Since attachment is a harsh and rigorous remedy which
exposes the debtor to humiliation and annoyance, the rule
authorizing its issuance must be strictly construed in favor
of the defendant. It should not be abused as to cause
unnecessary prejudice. It is the duty of the court before
issuing the writ to ensure that all the requisites of the law
has been complied with. 5
Accordingly, the resolution of the respondent Court of
Appeals, now the Intermediate Appellate Court, dated
September 18, 1980, is hereby set aside. No costs.
SO ORDERED.
Concepcion, Jr., Guerrero, Abad Santos and De Castro, JJ.,
concur.
THE UNITED STATES, plaintiffs-appellee,
vs.
PONCIANO NAMIT, defendant-appellant.
Ramon Maza for appellant.
Acting Attorney-General Paredes for appellee.
STREET, J.:
This appeal is brought to this Court to reverse a judgment
of the Court of First Instance of the Province of Antique,
adjudging the defendant guilty of the crime of murder and
sentencing him to cadena perpetua, with the accessories
provided by law, and requiring him to indemnify the heirs
of the deceased in the sum of P1,000 and to pay the costs.
It appears in evidence that between 6 and 7 o'clock in the
evening of February 24, 1917, the deceased Damiano
Jordan, and a neighbor, one Fernando Martinez, were
talking with each other while standing in the street
immediately in front of Jordan's house in the municipality o
Sibalom, Province of Antique. While they were so engaged
in conversation they were approached by the accused,
Ponciano Namit. The latter was at the time apparently
entering upon a duty as guard for the round in the capacity
of substitute for a son whose turn fell upon this night.
As Ponciano Namit came up he stopped and asked
Fernando Martinez if he was on guard that night. Upon
receiving an affirmative reply, he asked Damiano Jordan if
he too was on guard, and Damiano replied that he was not
as it was not his turn. Ponciano thereupon at once ordered
Damiano to go up into his house, and as Damiano did not
instantly obey, Ponciano in a few moments repeated the
command. Damiano in a few moments repeated the
command. Damiano then replied that he was going and
suiting his actions to his words, turned to start for his
house. As he was turning, Ponciano struck him a blow on
the left frontal part of the head with a heavy stick.
The end of this stick was supplied with a hatchet-shaped
object, possibly of metal, and the knob of this instrument
crushed into the head of Damiano and penetrating into the
brain, there momentarily remained. Ponciano by giving the
stick a jerk succeeded in freeing it and immediately left the
scene of the crime. When he pulled the stick out, Damiano
fell to the ground. Damiano's wife who was sitting in the
door of their house only a short distance away, saw what
had happened and immediately ran down to her husband
and told Fernando to aid her in carrying him to the house,
which he did. The injured person lived for about six days
and died as a result of the wound. It was shown by an
autopsy performed on the body that a hole was made in the
skull about as large as a half of peso coin. No motive
sufficient to account for this unjustifiable attack was
proved, though there is a suggestion in the evidence that
Ponciano may have been drinking.
After a careful review of the evidence we see no reason for
discrediting the testimony of the two eyewitnesses for the
prosecution. We find no material contradiction in their
statements made either at the trial of this case or at the time
of the commission of the crime. The story told by the wife
of the deceased Bonifacia Tubigon, appears to be a simple
and truthful narrative. The same may be said with regard to
the testimony of Fernando Martinez. Both witness
apparently evidence a desire to tell what happened without
exaggeration or distortion. Another witness for the
prosecution. Aurelio Sildo, testified that on the night in
question the accused admitted that he had the misfortune to
strike Damiano Jordan.
At the trial the accused did not directly admit having struck
the fatal blow to Damiano; but he claimed that on the night
in question he was passing the place of this occurrence and
was there assaulted by some unknown person with the
stick. He says that the and the assailant struggled for the
possession of the stick and that finally he, Ponciano, kicked
his adversary, who fell down, whereupon Ponciano
departed. We consider this story unlikely; and the judge as
he did, that the accused is the person who caused the death
of Damiano Jordan.
Although the complaint charges alevosia as a qualifying
circumstance in the commission of the crime, thus
elevating the offense to the degree of murder, and although
the judge of the trial court found that this element was
present in the commission of the offense, we are not
satisfied with his conclusion on this point. It is true the two
principal witness testify that the blow was given after
Damiano Jordan had turned his bask to the accused; but the
blow was truck, evidently with great force, upon the left
frontal side of the head of Damiano, and it is manifest that
this could have been done only if the accused is a left-
handed person, supposing him to be standing behind his
victim. There is no evidence, however, that Ponciano
Namit is left handed; and inasmuch as right handedness
prevails among the great majority, it is to be presumed in
the absence of the evidence to the contrary, that the accused
is right-handed.
This circumstance raises in our mind a reasonable doubt as
to whether the parties may not have been facing each other
when the blow was delivered. If such were the case, it
would be improper to find that the offense was qualified
by alevosia. It must be admitted that the attack was sudden
and unexpected to Damiano Jordan, and it would perhaps
be possible to found upon this the conclusion that the attack
was characterized by surprise in such sense as to
constitute alevosia. However, in considering a question of
this kind, every case must be judged by its particular facts;
and we find nothing in the evidence to show with certainty
that the aggressor consciously adopted a mode of attack
intended to facilitate the perpetration of a homicide without
risk to himself. a more reasonable, though still doubtful,
inference would possibly be that he did not in fact intend to
kill Damiano at all.
In this connection it is worth while to note that Bonifacia
Tubigon declares that immediately after the blow was truck
Ponciano Namit exclaimed I have long desired to strike
some one and I have done so." This would seen to indicate,
in the absence of proof of other motive, that the accused
was moved by a sudden desire to use his stick and that he
struck in obedience to this unreasoning impulse, without
thinking of the conditions under which he was acting. Upon
the whole we incline to the opinion that the fatal blow was
the result of a casual encounter under conditions not
sufficiently defined to enable us to say that alevosia was
certainly present in the case.1awph!l.net
The offense committed is, in our opinion, to be qualified as
homicide, under article 404 of the Penal Code , in the
estimation of which no generic circumstance either of an
aggravating or attenuating nature should be taken into
consideration; and the proper penalty is reclusion
temporal in its medium degree. The accused should
accordingly be sentence to 14 years 8 months and 1
day, reclusion temporal with the accessories prescribed in
article 59 of the Penal Code.
Another feature of the case of some importance is
presented in connection with an attachment levied upon the
property of the accused to secure the satisfaction of the
civil liability incident to the commission of the homicide. It
appears that while the cause was pending in the Court of
First Instance an attorney appeared in the capacity of
private prosecutor, representing the widow of the deceased,
and presented an affidavit showing that the accused was
selling his property in order to elude the payment of any
indemnity to which he would be liable in case of
conviction. It was accordingly requested that an attachment
should be issued against his property. an order was
thereupon made by the court upon April 25, 1917,
authorizing an attachment of property to the value of
P1,500 unless he should give bond to answer in that
amount. The clerk of the court issued the order of
attachment upon the same date, and three days later the
court rendered its decision finding the accused guilty and
ordering him to indemnify the widow and children of the
deceased in the sum of P1,000. The attachment was not
immediately levied; but after an appeal had been taken, the
sheriff, on November 28, 1917, levied the same upon five
parcels of land and a house belonging to the accused. It
does not appear from the record in this case whether the
accused has ever given the bond necessary to procure the
dissolution of this attachment, although upon December 19,
1917, after the cause had been brought to this Court by
appeal, an order was here entered authorizing the Court of
First Instance to act in the latter of dissolving the
attachment, if bond should be given.
It is argued that the attachment granted in this case is
sustainable under article 589 of the Law of Criminal
Procedure of Spain, which is to the following effect:
ART 589. When from the record of a cause
appear circumstances tending to establish the
guilt of a person, the judge shall require him to
give a bond sufficient to secure the pecuniary
liabilities which may be finally adjudged,
ordering in the same decree the attachment of
sufficient property to cover such liabilities,
should he fail to give bond.
The amount of the bond shall be fixed in the
same decree and it shall not be less than one third
of provable amount of the pecuniary liabilities.
We are of the opinion that this provisions and those related
to it in the Spanish Code of Criminal Procedure were
abrogated by necessary implication upon the enactment of
General Orders No. 58. It is true that section 107 of this law
recognizes the existence of the civil liability connected with
the commission of crime and reserves the privileges
previously secured by law to the person injured by the
commission of an offense to take part in the prosecution
and to recover damages. Nevertheless, we think that the
commission of an offense to the procedure contained in the
Spanish Code of Criminal Procedure relating to the
attachment of property and giving of bond.
Upon reading the entire section 107 of General Orders No.
58, it appears obvious that the right which was intended to
be saved by the reservation therein made was the right of
the party injured to appear and to be heard in all stages of
the case with reference to such liability and to obtain a
judgment for the damages occasioned by the wrongful act,
as well as the further right to appeal from any decision of
the court denying any legal right connected therewith.
It is to be noted that while the "sumario" of Spanish
criminal procedure is in many respects similar to the
preliminary hearing before a committing magistrate
conducted pursuant to section 13 and 14 of General Orders
No. 58, there is nevertheless an important difference, which
is that the "sumario" constitutes a preliminary stage in the
criminal prosecution, and is not merely a step preparatory
tot he initiation of the proceedings. The evidence taken in
the "sumario" therefore, capable for being used in the
plenary stage of the prosecution and if ratification was not
required, served as the basis of judgment. (Ley de 18 de
junio de 1870 Law of June 18, 1870.) On the contrary,
the proceedings in the preliminary hearing never constitute
a basis for a subsequent judicial declaration of guilt. The
"sumario" has been abrogated by the enactment of General
Orders No. 58 above referred to; and the ground expressed
in article 589 of the Spanish Code of Criminal Procedure
for the attachments of the property of the accused therefore
no longer here exists.
With the adoption of General Orders No. 58, there was
necessarily introduced into these Islands a system of
criminal procedure embodying the principles recognized in
the system of criminal procedure generally in vogue in the
United States; and any characteristics or rule of the former
system inconsistent with these principles must be held to
have been abrogated. Attachment in American law is a
purely statutory remedy. It does not exist unless expressly
given by statute and as it is an extraordinary and summary
remedy, it is unavailable except in those cases where the
statute expressly permits its issuance.

It remains to consider whether or not the attachment can be

sustained under the provisions of section 424, in connection
with subsection 5 of section 412 of Code of Civil
Procedure. The affidavit made in this case states
substantially, we think, that the accused was selling his
property with the intent to defraud the persons interested in
the enforcement of the civil liability but considered as an
application for an attachment under the provisions above
cited, in connection with section 426 for the same Code, the
affidavit was several respect defective. Disregarding these
informalities, however, we are of the opinion that the
remedy of attachment there provided is not available as an
aide to the enforcement of the civil liability incident to
prosecution for crime. These provisions contemplate the
pendency of a civil action, and the remedy of attachment is
merely an auxiliary to such action. Section 795 of the Code
of Civil Procedure in its first paragraph declared that the
procedure in all civil actions shall be in accordance with the
provisions of the said Code and it is quite evident that the
legislature in adopting this Code could not have intended to
make its provisions in any respect applicable to the
proceedings in a criminal prosecution. The mere
circumstance that a civil prosecution is in our opinion no
sufficient reason for holding that the remedy of attachment
as designated for use in a civil action is available in the
criminal proceeding.

From what has been said result that the attachment effected
under the order of the Court of First Instance dated April
25, 1917. must be considered to have been improvidently
granted. The same is hereby declared to be of no effect, by
this declaration will of course in no wise prejudice the right
of the widow and children of the deceased to enforce the
payment of the indemnity for which judgment was rendered
against the accused. The judgment of the trial court in
respect to the penalty imposed upon the accused, is
modified by subsisting 14 years 8 months and 1
day, reclusion temporal, with accessories prescribed in
article 59 of the Penal Code for so much thereof as imposes
the penalty of cadena perpetua, with the accessories
prescribed in article 54 of the same Code. As thus modified
the judgment of the lower court is affirmed, with costs
against the appellant. So ordered.
LUIS F. GENERAL, petitioner,
vs.
JOSE R. DE VENECIA, Judge of First Instance of
Camarines Sur, and PETRA VDA. DE RUEDAS, also
representing Ernesto, Armando and Gracia
(minors), respondents.
Cea, Blancaflor and Cea for petitioner.
Jose M. Peas for respondents Ruedas.
No appearance for the respondent judge.
BENGZON, J.:
Petition for certiorari to annul the order of the Court of
First Instance of Camarines Sur denying the motion to
dismiss the complaint, and to vacate the attachment issued,
in civil case No. 364 therein entitled, "Ruedas vs. Luis F.
General."
That complaint was filed on June 4, 1946, to recover the
value of a promissory note, worded as follows:
For value received, I promise to pay Mr.
Gregorio Ruedas the amount of four thousand
pesos (P4,000), in Philippine currency within six
(6) months after peace has been declared and
government established in the Philippines.
Naga, Camarines Sur, September 25, 1944.
(Sgd.) LUIS F. GENERAL
It prayed additionally for preliminary attachment of
defendant's property, upon the allegation that the latter was
about to dispose of his assets to defraud creditors. Two
days later, the writ of attachment was issued upon the filing
of a suitable bond.
Having been served with summons, the defendant therein,
Luis F. General, submitted, on June 11, 1946, a motion
praying for dismissal of the complaint and dissolution of
the attachment. He claimed it was premature, in view of the
provisions of the debt moratorium orders of the President
of the Philippines (Executive Orders Nos. 25 and 32 of
1945). Denial of this motion and of the subsequent plea for
reconsideration, prompted the institution of this special
civil action, which we find to be meritorious, for the reason
that the attachment was improvidently permitted, the debt
being within the terms of the decree of moratorium
(Executive Order No. 32).
It is our view that, upon objection by the debtor, no court
may now proceed to hear a complaint that seeks to compel
payment of a monetary obligation coming within the
purview of the moratorium. And the issuance of a writ of
attachment upon such complaint may not, of course, be
allowed. Such levy is necessarily one step in the
enforcement of the obligation, enforcement which, as stated
in the order, is suspended temporarily, pending action by
the Government.
But the case for petitioner is stronger when we reflect that
his promise is to pay P4,000 "within six months after peace
has been declared." It being a matter of contemporary
history that the peace treaty between the United States and
Japan has not even been drafted, and that no competent
official has formally declared the advent of peace (see
Raquiza vs. Bardford, 75 Phil., 50), it is obvious that the
six-month period has not begun; and Luis F. General has at
present and in June, 1946, no demandable duty to make
payment to plaintiffs, independently of the moratorium
directive.
On the question of validity of the attachment, "the general
rule is that, unless the statute expressly so provides, the
remedy by attachment is not available in respect to a
demand which is not due and payable, and if an attachment
is issued upon such a demand without statutory authority it
is void." (7 C.J.S., p. 204.)
It must be observed that under our rules governing the
matter the person seeking a preliminary attachment must
show that "a sufficient cause of action exists" and that the
amount due him is as much as the sum for which the order
of attachment is granted" (sec. 3, Rule 59). Inasmuch as the
commitment of Luis F. General has not as yet become
demandable, there existed no cause of action against him,
and the complaint should have been dismissed and the
attachment lifted. (Orbeta vs. Sotto, 58 Phil., 505.)
And although it is the general principle that certiorari is not
available to correct judicial errors that could be
straightened out in an appeal, we have adopted the course
that where an attachment has been wrongly levied the writ
may be applied for, because the remedy by appeal is either
unavailable or inadequate. (Leung Ben vs. O'Brien, 38
Phil., 182; Director of Commerce and
Industry vs. Concepcion, 43 Phil., 384;
Orbeta vs. Sotto, supra.)
Wherefore, the writ of attachment is quashed and the
complaint is dismissed. Costs for petitioner. So ordered.
Moran, C.J., Paras, Feria, Pablo, Hilado, Padilla, and
Tuason, JJ., concur.
Perfecto, J., concurs in the result.
MERCEDES GRUENBERG and ALBERT
GRUENBERG, petitioners,
vs.
HONORABLE COURT OF APPEALS, HONORABLE
LINO L. AOVER and ELDA R.
FLORES, respondents.
Perlas, Joven & Associate Law Office for private
respondent.
GUTIERREZ, JR., J.:
This is a petition to review the decision of the Court of
Appeals, now Intermediate Appellate Court, which
affirmed the order for the issuance of a writ of preliminary
attachment, and other related orders of the then Court of
First Instance of Rizal in Civil Case No. Q-18444.
The antecedent facts are summarized by the appellate court
as follows:
Petitioners are the defendants and
private respondent is the plaintiff in
Civil Case No. Q-18444, Court of First
Instance of Rizal, Branch XVII-B-
Quezon City, for annulment of sale,
recovery of ownership and possession
of the house and lot situated at No. 24
Scout Limbaga, Diliman, Quezon City,
the same, allegedly, having been sold in
fraud of creditors.
Private respondent filed the complaint
in Civil Case No. Q18444, in her
capacity as the administratrix of the
intestate estate of the late William
Gruenberg.
It is alleged in the complaint in Civil
Case No. Q-18444 that the house and
lot in question, which were sold to
defendant Albert Gruenberg (one of the
petitioners), form part of the conjugal
partnership of the Gruenberg spouses,
which must answer for the obligations
that deceased William Gruenberg might
have incurred during his lifetime in his
capacity as manager and administrator
of the conjugal partnership; and that the
sale of the house and lot before the
death of William Gruenberg, when at
that time two creditors had already filed
suits against him for collection of
unpaid obligations, and the latter had
unpaid obligation to plaintiff Elda R,
Flores (private respondent) in the
amount of P13,000.00, exclusive of
interest and collection charges, patently
and clearly can no longer be paid or
liquidated.
On March 1, 1974, petitioners filed
their answer to the complaint.
Under date of February 7, 1976, private
respondent filed a 'Motion for Issuance
of Writ of Preliminary Attachment'
against the properties of petitioners,
alleging, among others, that the latter
are indebted to her in the principal
amount of P13,000.00, which,
according to her, she seeks to recover
in Civil Case No. Q-18444.
On March 1, 1976, petitioners filed
their opposition to the motion for the
issuance of writ of preliminary
attachment, alleging among others, that
Civil Case No. Q-18444 is an action for
annulment of sale and recovery of the
house and lot mentioned therein, and
not for recovery of sum of money. It is
contended that a writ of preliminary
attachment is not the proper remedy for
the protection of the rights of the estate.
In the same opposition, petitioners
refuted the allegations of private
respondent in her motion that the
complaint in Civil Case No. Q-18444 is
one for collection of a sum of money
allegedly contracted fraudulently by
petitioners.
On March 26, 1976, respondent Judge
issued an order, granting the motion of
private respondent and issuing a writ of
preliminary attachment against the
properties of petitioners, respondent
Judge stating that no opposition had
been filed to the motion.
In the latter part of July, 1976,
respondent Sheriff and/or his deputies
served on petitioners and the managers
of the Hollywood Theater, Palace
Theater and Illusion Theatre a writ of
preliminary attachment and notice of
garnishment against petitioners and
personally in favor of respondent
Flores.
It is alleged that the order of respondent
Judge was not received by petitioners'
new counsel but upon being informed
by petitioners of the writ of preliminary
attachment and notice of garnishment,
petitioners'new counsel promptly went
 to the court of respondent Judge and
then and there he discovered that
petitioners' opposition to the motion
was not attached to the record, because
the same was forwarded to Branch
XVIII to which Civil Case No. Q-
18444 was originally assigned,
On July 30, 1976, petitioners filed (a) a
motion for reconsideration of the order
granting the motion for the issuance of
a writ of preliminary attachment, and
(b) a motion to recall the writ of
preliminary attachment and notice of
garnishment, on the ground that it is not
true that petitioners did not oppose the
motion of private respondent, and that
there is no valid basis to grant the
motion.
On August 16, 1976, respondent Judge
issued an order, denying the motions of
petitioners.
On October 28, 1976, respondent Judge
issued an order, requiring petitioners to
appear before his court to explain why
they should not be punished for
contempt for denying or disobeying the
lawful processes of the court.
The issuance of the "show cause" order prompted the
petitioners to file a petition for certiorari with writ of
preliminary injunction in the Court of Appeals. The petition
was dismissed. Hence, the instant petition
The issues raised to us are embodied in the petitioners'
assignments of errors as follows:
I. THE COURT OF APPEALS
ERRED IN OVERLOOKING THE
FACT THAT WRIT OF
PRELIMINARY ATTACHMENT
COULD ONLY BE GRANTED TO
SECURE THE SATISFACTION OF A
JUDGMENT IN A CASE IN WHICH
SAID WRIT IS PRAYED FOR;
II. THE COURT ERRED IN
SUSTAINING THE ISSUANCE OF
THE WRIT OF PRELIMINARY
ATTACHMENT FOR THE
PERSONAL BENEFIT OF PRIVATE
RESPONDENT IN CIVIL CASE NO.
Q-18444, NOTWITHSTANDING
THE FACT THAT SAID
RESPONDENT INSTITUTED SAID
ACTION NOT IN HER PERSONAL
CAPACITY, BUT AS
ADMINISTRATRIX OF THE
ESTATE OF THE LATE WILLIAM
GRUENBERG, SR.;
III. THE COURT OF APPEALS
ERRED IN RULING THAT
PETITIONERS CAN BE CITED FOR
CONTEMPT FOR THE ALLEGED
FAILURE TO COMPLY WITH THE
NOTICE OF GARNISHMENT
ADDRESSED TO THIRD PARTIES.
The issues are interrelated and may be discussed together.
They all focus on the proprietary of the writ of attachment
and garnishment against the petitioners' properties issued
by the trial court and affirmed by the appellate court.
In her affidavit supporting the motion for a writ of
preliminary attachment, the private respondent stated that
her case "... is one of the situations covered by Section 1
(d), Rule 57 of the Rules of Court whereby a writ of
preliminary attachment may issue." Section 1 (d), Rule 57
provides:
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:
xxx xxx 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
concealing or disposing of the property
for the taking, detention or conversion
of which the action is brought.
xxx xxx xxx
There are various reasons why this petition should prosper.
Private respondent Elda R. Flores, as a claimant for
P13,000.00 against the estate of William Gruenberg, Sr.,
was appointed administratrix of the estate of the deceased.
In her capacity as administratrix, she filed Civil Case No.
Q-18444 against the petitioners. This main case was for the
annulment of a deed of sale executed by the late William
Gruenberg, Sr., in favor of Albert Gruenberg and for the
recovery of possession and ownership of the house and lot
involved in that sale.
The motion for a writ of preliminary attachment filed by
Flores, however, states:
 1. Defendants are indebted to plaintiff
in the amount of P13,000.00 exclusive
of accrued interest and collection
charges, which plaintiff seeks to
recover in the instant action; and
2. Defendants are guilty of fraud in
contracting the debt or incurring the
obligation due plaintiff in that they
conspired and confederated with each
other as mother End son to defraud
other creditors one of whom is plaintiff,
by simulating the sale of house and lot
situated at No. 24 Scout Limbaga
Street, Quezon City ... .
While the respondent filed the motion in her capacity as
administratrix of the Gruenberg estate, the motion for a writ
of attachment and its supporting affidavit show that the
attachment was intended to secure only her P13,000.00
claim against the estate. Obviously, this cannot be done.
A writ of attachment is a remedy ancillary to the principal
proceeding. The well-entrenched principle is that:
Attachment is a juridical institution
which has for its purpose to secure the
outcome of the trial, that is, the
satisfaction of the pecuniary obligation
really contracted by a person or
believed to have been contracted by
him, either by virtue of a civil
obligation emanating from contract or
from law, or by virtue of some crime or
misdemeanor that he might have
committed, and the writ issued, granted
it, is executed by attaching and safely
keeping all the movable property of the
defendant, or so much thereof as may
be sufficient to satisfy the plaintiff's
demands ... . (Guzman v. Catolico, et
al., 65 Phil. 257).
The purpose behind the filing of the complaint was to
recover a piece of property allegedly belonging to the
intestate estate of the deceased. Hence, any writ of
attachment necessary to secure the judgment must be
related to the protection of the estate. The writ may not
issue if only to protect the personal interests of the private
respondent as a creditor of that estate.
The records show that the private respondent's interest in
the estate is to recover a debt based on a contract with the
deceased Gruenberg, For this reason, she instituted the
special proceedings for the settlement of the intestate estate
resulting to her appointment as administratrix. Under these
circumstances, the private respondent's remedy to recover
the outstanding debt of the deceased is to follow the
procedure in Rule 86 on claims against an estate. As a
matter of fact, if an administrator has a claim against an
estate, Section 8 of Rule 86 calls for the appointment of a
special administrator to defend the estate against such
claim.
A court order which violates the Rules constitutes grave
abuse of discretion as it wrecks the orderly procedure
prescribed for the settlement of claims against deceased
persons designed to protect the interests of the creditors of
the decedent. (See Dy v. Enage, 70 SCRA 96). Allowing
the private respondent in the annulment case to attach the
petitioners' properties for the benefit of her P13,000.00
claim against the estate would give her an undue advantage
over other creditors against the estate,
Moreover, the P13,000.00 claim of the respondent cannot
be settled in the case for annulment of the deed of sale,
wherein the writ of attachment is sought. What she seeks to
be secured is not the judgment in the main case but a mere
claim against the estate which is still to be considered and
adjudicated by the court.
The rules on the issuance of a writ of attachment must be
construed strictly in favor of the defendant. The remedy of
attachment is harsh, extraordinary, and summary in nature.
If all the requisites for the issuance of the writ are not
present, the court which issues it acts in excess of its
jurisdiction.
In Salas v. Adil (90 SCRA 121), we stated:
A preliminary attachment is a rigorous
remedy, which exposes the debtor to
humiliation and annoyance, such it
should not be abused as to cause
unnecessary prejudice. It is, therefore,
the duty of the court, before issuing the
writ, to ensure that all the requisites of
the law have been complied with;
otherwise the judge acts in excess of
his jurisdiction and the writ so issued
shall be null and void. (Guzman v.
Catolico, 65 Phil. 257, 261).
xxx xxx xxx
Considering the gravity of the
allegation that herein petitioners have
removed or disposed of their properties
or are about to do so with intent to
defraud their creditors, and further
considering that the affidavit in support
of the preliminary attachment merely
states such ground in general terms,
without specific allegations of
circumstances to show the reason why
plaintiffs believe that defendants are
disposing of their properties in fraud of
creditors, it was incumbent upon
respondent Judge to give notice to
petitioners and to allow them to present
 their position at a hearing wherein
evidence is to be received.
Following the principle of strict compliance with all
requisites, this Court has also ruled that "when the facts, or
some of them, stated in the plaintiff's affidavit are shown
by the defendant to be untrue, the writ may be considered
as improperly or irregularly issued." (National Coconut
Corporation V. Pecson, et al., 90 Phil. 809).
The February 7, 1976 motion for issuance of a writ of
preliminary attachment and the affidavit of preliminary
attachment are misleading. First, the private respondent
states that the "defendants are indebted to plaintiff in the
amount of P13,000.00" exclusive of interests and collection
charges. Then, she avers that the "defendants are guilty of
fraud in contracting the debt or incurring the obligation due
plaintiff ".
no justification why the attachment should reach out to the
petitioners' interests in the Hollywood Theatre, the Palace
Theatre, and the Illusion Theatre. The petitioners also point
out that there is no showing of any attempt on their part to
conceal or to dispose of the house and lot nor of any change
in the title or condition of the property. Considering all the
foregoing, we find the writ of preliminary attachment to
have been improvidently issued.
WHEREFORE, the petition is hereby GRANTED. The
decision of the former Court of Appeals is SET ASIDE.
The writ of preliminary attachment and the notice of
garnishment issued in Civil Case No. Q-18444 are
DISSOLVED. The other related orders issued in
connection with the writ of attachment are SET ASIDE.
SO ORDERED.

The facts in the motion and the affidavit are deceptively

framed. The obligation which the respondent seeks to
secure by an attachment was between her and the late
William Gruenberg, Sr. What she seeks to establish as
fraudulent was the sale between the late Mr. Gruenberg and
his son. These are two entirely distinct transactions.

One of the reasons for granting the motion for the issuance
of a writ of preliminary attachment was the court's finding
that the petitioners' failed to file an opposition thereto. It
turns out, however, that the petitioners filed a timely
opposition to the motion but it was filed in another branch
of the court where the case had earlier been assigned.
Nevertheless, despite this timely opposition, the motion for
reconsideration of the order for the issuance of a writ of
preliminary attachment, was summarily denied for lack of
merit.

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

writ of preliminary attachment merely recited the grounds
alleged in the private respondent's motion without any
specific details as to the supposed fraud committed by the
petitioners when they contracted the debt and the alleged
disposition or concealment by the petitioners of their
properties. The order of the trial court disregards the rule
that attachment being a harsh remedy, it must be issued on
concrete and specific grounds and not on general averments
merely quoting the words of the pertinent rules. (Dy v.
Enage, supra). The absence of specific grounds highlights
the fact that the petitioners are not indebted to respondent
Flores. It was the late William Gruenberg who incurred the
alleged indebtedness and it is his estate which owes Flores.
The validity of the claim of Flores will have to be threshed
out in the special proceedings, not in the case for
annulment of the deed of sale.

Finally, the transaction sought to be annulled in the main

case refers to a questioned sale of a house and lot. It would
have been sufficient to annotate a notice of lis pendens in
the title to that property. Assuming the trial court could
validly attach the house and lot involved in the sale, we see
G.R. No. L-35351 March 17, 1976
ROGELIO DY, SY JIAN AND DY CHING
ENG, petitioners,
vs.
THE HONORABLE JUDGE MANUEL LOPEZ
ENAGE AND HEIRS OF EMMANUEL O.
TOLENTINO, represented by MARIA DUGOS VDA.
DE TOLENTINO, respondents.
Elias Q. Tan for petitioners.
Arturo M. de Castro & Soledad Cagampang-de Castro for
respondent Maria Dugos Vda. de Tolentino.
Catalua, Buol & Yebes also for respondents.
BARREDO, J.:
Petition for "certiorari, prohibition and mandamus, with
preliminary injunction" asking the Court to declare null and
void the orders of respondent judge of July 18, 1972 and
July 25, 1972 in Civil Case No. 1251 of the Court of First
Instance of Agusan del Norte and Butuan City and to enjoin
said respondent from further taking cognizance of the case
except to dismiss the same by command of this Court,
which prayer was enlarged in a supplemental petition to
include the order of attachment of September 28, 1972 and
the decision of September 20, 1972, and all implementing
orders thereof, among the actuations sought to be annulled.
Later, a second supplemental petition was filed to impugn
other subsequent orders of respondent judge to be
specifically referred to later in this decision. After issues
were joined, a special motion dated February 10, 1973 was
filed by private respondents praying that the Court of First
Instance of Cebu, Branch XIV, be enjoined to dismiss Civil
Case No. R-13062 therein filed by Atty. Elias Q. Tan,
counsel of herein petitioners in the above-mentioned case
in Agusan del Norte, against said respondents, for damages,
and that the writ of preliminary attachment issued therein
be quashed, and after comment thereon was filed by
petitioners, the Court issued the following' resolution on
May 4, 1973:
L-35351 (Rogelio Dy, et al. vs. Hon.
Manuel Lopez Enage, etc., et al.).
Considering the urgent motion of the
respondents for the issuance of a
temporary restraining order to enjoin
the Court of First Instance of Cebu
from taking further proceedings in
Civil Case No. R13062 during the
pendency in this Court of respondents'
motion to dismiss said civil case or for
the issuance of injunction or restraining
order with quashal of preliminary
attachment, the Court Resolved: (a) to
issue a TEMPORARY
RESTRAINING ORDER effective
immediately and until further orders
from this Court, and (b) to require both
the petitioners and private respondents
within ten (10) days from notice hereof,
to file such pleadings as may be
necessary so as to properly implead the
Court of First Instance of Cebu City
taking cognizance of Civil Case No. R-
13062. (Page 562, Record.)
Voluminous representations have been filed by the parties
relative to this resolution but none of them adequately
amounts to any of the pleadings called for by the situation
and required by the resolution. And considering that the
matters treated in said motion of February 10, 1973 are not
procedurally related to the petition in this case, the Court
will not resolve the merits of said motion, without prejudice
to the private respondents filing the proper separate petition
so that issues may be regularly joined and resolved albeit
the restraining order issued by the Court shall continue in
force until the court in which respondents might file their
action acts one way or the other in the premises, but if no
such separate action is filed by respondents within ten (10)
days from notice hereof, the said restraining order shall be
deemed automatically lifted. In other words, this decision
will deal exclusively on the original and supplemental
petitions herein.
It appears that on October 10, 1968, petitioners filed with
respondent court Civil Case No. 1251 against one
Emmanuel O. Tolentino, predecessor in interest of private
respondents. Pertinently, the complaint alleged as follows:
FOR FIRST CAUSE OF ACTION
1 That plaintiffs are of legal ages
and residents of the municipality of
Cabadbaran, province of Agusan,
Philippines and the defendant is
likewise of legal age and a resident of
sgd municipality and province where
he may be served with summons.
2 That after the liberation plaintiffs
spouses Dy Ching Eng and Sy Jean
resumed their general merchandise and
copra business in the municipality of
Cabadbaran, province of Agusan,
continued their aforesaid general
merchandise business until the present
time and closed their copra business in
the year 1966, will their son, plaintiff
Rogelio Dy engaged in the copra
business in said municipality and
province beginning 1966 and continues
it until the present time.
3 That the defendant who is the
younger brother of plaintiff Sy Jean is
likewise engaged in the general
merchandise and copra business in said
municipality and province and during
the period from 1960 or thereabouts
until 1964 bought from plaintiffs Dy
Ching Eng and Sy Jean copra on credit
basis and the said plaintiffs Dy Ching
Eng and Sy Jian delivered on credit
basis to the defendant on July 24, 1964,
288 sacks of copra weighing 11,679
kilos net at P48.00 per 100 kilos worth
P5,605-92; on July 26, 1964, 146 sacks
of copra weighing 5,749 kilos net at
P48.00 per 100 kilos, worth P2,759.52;
on July 31, 1964, 144 sacks of copra
weighing 5,716 kilos net at P48.00 per
100 kilos worth P2,858.00; on August
6, 1964, 343 sacks of copra weighing
14,187 kilos net at P48.00 per 100 kilos
worth P5,296.00; on August 14, 1964,
126 SACKS OF COPRA WEIGHING
5,296 KILOS net at P46.00 per 100
kilos worth P5,296.00; on August 14,
1964, 75 sacks of copra weighing 2,867
kilos net at P46.00 per 100 kilos worth
P1,318.82; on August 20, 1964, 225
sacks of copra weighing 8,659 kilos net
at P44.00 per 100 kilos worth
P3,809.96; and on August 27, 1964 303
sacks of copra wishing 12,514 Idlos net
at P44-00 per 100 kilos worth
P5,506.16, as shown by corresponding
Statements of deliveries, copies of
which are hereto attached, marked as
annex "A", "B", "C", "D", "E", "P",
"G", and "H" and made integral parts
hereof, valued in all at P31,104.30.
4 That the defendant made partial
payments for said plaintiffs' copra in
checks drawn against the Philippine
Bank of Communications, Cebu
Branch, Cebu in the total sum of
P10,000.00, among which was check
No. T-W253 dated November 13, 1967
for P2,000.00 which check could not be
collected and cashed by plaintiffs
spouse for the reason that defendant
stopped payment of the same, n shown
on the face and reverse sides of said
check No. T-445253, photostat copies
of which face and reverse sides are
hereto attached, marked as Annexes "I"
and "A" and made integral parts hereof,
and also in cash for P6,000.00 as
shown by a "vale" dated November 18,
1967 signed by plaintiff Sy Jean, copy
of which is hereto attached as Annex
"J" and made an integral part hereof, all
which partial payments amounted to
P16,000.00, thereby leaving an unpaid
balance of P15,104.30, and despite
earnest efforts exerted by plaintiffs
spouses towards a compromise and
extra-judicial amicable settlement of
said defendant's indebtedness, the same
have failed and despite repeated
demands made by said plaintiffs upon
the defendant to pay said unpaid
balance, the latter failed and refused
and still continues to do so without
valid and justifiable cause therefore,
thereby committing breach of contract
in evident bad faith and fraudulently for
which defendant should be held liable
to said plaintiffs for actual damages in
the amount of P3,3562.03 until the
present time and for moral damages in
the amount of P5,000.00
FOR SECOND CAUSE OF ACTION
Plaintiffs respectfully allege:
1 That the plaintiffs hereby
reproduce and incorporate as part
hereof the averments contained in
paragraphs 1, 2, 3, and 4 under the first
cause of action hereof.
2 That in 1966 to 1967 defendant
used to buy from plaintiff Rogelio Dy
copra at most at P68.00 per kilo, but
considering that the current market
price of copra at that time was much
higher than the price per kilo paid by
the defendant for said plaintiffs copra,
the said plaintiff Rogelio Dy stopped in
1967 to sell his copra to the defendant.
3 That by reason of plaintiff Rogelio
Dy's refused to continue selling his
copra to the defendant, the defendant
on or about November 22, 1967 after
plaintiff Sy Jean had received from him
the amount of P6,000.00 shown in the
receipt, Annex 'J' sent for plaintiffs Sy
Jean and Rogelio Dy to go his store at
Cabadbaran, Agusan; that while
plaintiff Sy Jian was in the said store
ahead of Rogelio Dy, the defendant
scolded her on account of their failure
to sell copra to him; that when Sy Jean
explained that she could not interfere
and control her son Rogelio Dy in
connection with the management of his
business, the defendant threated to
cause bodily harm to her and sent for
plaintiff Rogelio Dy to go to his store;
that once the said plaintiff Rogelio Dy
was in defendant's store and saw his
mother being treated by the defendant,
the defendant began to scold plaintiff
Rogelio Dy for not having continued to
sell copra to him, threatened to kill him
and under threats and intimidation with
a pistol compelled without any lawful
authority the said plaintiff Rogelio Dy
to sign a blank form on said date, the
printed recitals of which blank form
tend to show that plaintiff Rogelio Dy
supposedly received from the defendant
on the date stated therein the amount of
P16,000.00 in trust for the purpose of
buying copra with the supposed
obligation of delivering to him the
copra and or of returning the said
amount, when in truth and in fact, the
said plaintiff Rogelio Dy never at all
prior to the date mentioned in said
defendants printed form received from
the defendant the sum of P16,000.00
nor did said plaintiff Rogelio Dy ever
act as supposed purchasing agent for
copra for the defendant; that by reason
of the threats and intimidation made by
the defendant to kill not only Sy Jean
but also him, the plaintiff Rogelio Dy
by reason of fear was compelled to
affix against his will his signature on
the said printed form.
4 That the supposed contract of
agency prepared by the defendant
without the intervention, consent or
authority of any one of herein
plaintiffs, mentioned the sum of
P16,000.00 which was the partial
payments made by the defendant for
the said deliveries of copra belonging
to the plaintiffs spouses; that, as a
matter of fact and in truth, after the
defendant had succeeded through
threats and intimidation to make
plaintiff Rogelio Dy sign the said
supposed contract of agency, the
defendant delivered to Sy Jean the
receipt for P6,000.00 annex X hereof.
5 That the said supposes contract of
agency is null and void, illegal and
invalid, is fraudulent and constitutes a
falcification of a private document.
6 That by reason of the unlawful,
malicious, wrongful, and fraudulent
acts of the defendant, the plaintiffs
have suffered actual damages in the
amount of P16,000.00 and moral
damages for mental anguish, serious
anxiety, social humiliation and
wounded feelings in the amount that
the court may fix.
7 That despite earnest efforts
exerted by the plaintiffs towards a
compromise, the same have failed and
despite repeated demands made by
plaintiff Rogelio Dy to cancel the
supposed contract of agency and to
desist from enforcing it in any manner,
the defendant refused to do so and
continues to threaten to to prosecute
plaintiff Rogelio Dy for supposed
estafa for the purpose of harrassing,
oppressing and humiliating the said
plaintiff Rogelio Dy in particular and
his parents in general. (Pages 137-141,
Record.)
In his answer, the defendant made specific denials and
alleged affirmative defenses and in addition interposed
counterclaims as follows:
COMES NOW the defendant in the
above-entitled case, thru counsel, and
in answer to the complaint, to this
Honorable Court most respectfully
alleges:
1. That defendant admits the allegation
contained in paragraph 1 for the fust
cause of action in the complaint.
2. That defendant has no infomation as
to the truth of the allegations contained
in paragraph 2 of the complaint (first
cause of action). But whether plaintiffs
had license to engage in the copra
business or not the fact is that plaintiffs
were acting only as copra purchasing
agents for the defendant.
3. That defendant admits that he is
engaged in the general merchandise
and copra business in the municipality
of Cabadbaran and province of Agusan;
but specifically denies the information
that he is a younger brother of plaintiff
Sy Jean; the truth of the matter is Sy
Jean was an adopted daughter of
defendant's father and coincidentally
when they happened to reside together
in Agusan they considered themselves
as brother and sister, and 0 they were
known as such in the community of
Agusan. Defendant further denies that
he had business relation on credit basis
with plaintiffs' son. The truth being that
all the plaintiffs were merely copra
purchasing agents of the defendant.
And the defendant has no knowledge or
information to form a belief as to the
truth of the matter alleged in the
remaining Portion of paragraph 3 of the
fust cause of action of the complaint,
and, therefore denies the same, and
further denies under oath the
selfserving annexes attached to the
complaint and marked as annexes "A",
"B", "C", "D", "E", "F", "G", and "H"
which apparently are tally saheets for
being manufactured documents and
inadmissible evidence.
4. That the allegation contained in
paragraph 4 are hereby denied. The
truth of the matter is hereinafter alleged
in the special and affirmative defenses.
5. That the allegations contained in
paragraph 5 are hereby denied. The
truth of the matter is hereinafter alleged
in the special and affirmative defenses,
and that further defendant is not
obligated in anyway to pay any amount
of actual damages, much less is
defendant liable for moral damages.
6. That Paragraph 1 of the second cause
of action, being a mere reproduction of
the previous allegations, is also hereby
denied and the allegations contained in
the previous paragraph i of this answer
are hereby reproduced and replead.
7. That the allegations contained in
paragraph 2 of the sand cause of action
are hereby denied. The truth of the
matter being that in no time as far as
defendants recollection is concerned
the exagerated price of P68 per kilo of
copra has ever been obtaining in
Agusan or elsewhere. And further it is
denied that defendant has ever
purchased copra from the plaintiff
Rogelio Dy. The truth being that
plaintiff Rogelio Dy has been a copra
purchasing agent for the defendant.
8. That the allegations contained in
paragraphs 3 and 4 of the second cause
of action of the complaint are hereby
denied. It is specifically denied that
plaintiffs Sy Jean and Rogelio Dy were
ever threatened of bodily harm much
less threatening Rogelio Dy to be
killed. It is further specifically denied
that Rogelio Dy was compelled to sign
a blank form. The truth of the matter
further is hereinafter alleged in the
special and affirmative defeses With
respect to the receipt for P6,000.00
marked in the complaint at Annex "J"
is admitted that it was returned to Sy
Jean together with another receipt for
P10,000.00 after the receipt for
P16,000.00 was signed by plaintiff
Rogelio Dy who appeared to have in
his ion the P16,000.00 and who was the
licensed copra dealer. And the truth of
the matter further is hereinafter alleged
in the special and affirmative defenses.
9. That the allegations contained in
paragraph 5 am conclusions of law. But
it is denied that the contract agency is
null and void, illegal and invalid, much
less, fraudulent and constitutes a
falsification of private document. The
trust of the matter is that said contract
of agency is legal and valid, not
fraudulent nor falsification, it having
been executed in due course and for
value.
10. That the allegations contained in
paragraph 6 of the second cause of
action are again conclusions of fact and
consclusions of law. But if plaintiffs
have suffered actual damages in the
amount of P16,000.00 and
undetermined moral damages plaintiffs
alone are responsible therefor and
defendant is not liable of the same.
11. That the allegations contained in
paragraph 7 of the second cause of
action are hereby denied. The truth of
the matter is that it was the defendant
who exerted earnest efforts to secure
payment of plaintiffs' obligations, but
despite such efforts exerted by
defendant plaintiffs have remained
adamant and entirely disregarded the
repeated request of the defendant, and
due to this refusal of the plaintiff
Rogelio Dy to pay his obligation to the
defendant the latter was compelled to
seek the intervention of the Office of
the Provincial Fiscal in order to legally
enforce the agency contract sometime
in August 18, 1968. But until now no
payment was effected by said plaintiff.
And the truth of the matter further is
that in sinking the intervention of the
Provincial Fiscal of Agusan it was not
the purpose of defendant to harass,
oppress and humiliate plaintiff Rogelio
Dy but merely in the legitimate
exercise of legal rights of the
defendant.
 12. That as to the allegations common
to first and sand causes of action,
particularly paragraph 7 and 8 affecting
petition for injunction, said allegations
are untenable. because merits of the
criminal action involved are to be
determined by proper authorities vested
with powers and jurisdiction to act on
the matter. If criminal action has merits
and at least PRIMA FACIE evidence
shown, the exercise of such power is
vested with the Provincial Fiscal in this
particular case; and with respect to the
civil action involved the same is
hereinafter incorporated in a
counterclaim. Both criminal and civil
action cannot be prevented by
injunction.
SPECIAL AND AFFIRMATIVEE
DEFENSES
defendant respectfully alleges:
13. That prior to August 26, 1964, Mr.
and Mrs. Dy Ching Eng of Cabadbaran,
Agusan had been copra purchasing
agents of the defendant, by virtue of
which agency they were accorded by
the defendant cash advances.
14. That the liquidation of cash
advances and value of copra delivered
were effected at the end of every
month.
15. That on August 26, 1964 a
liquidation of cash advances and value
of copra delivered was made, and
plaintiffs spouses Dy Ching Eng and Sy
Jean had an outstanding balance
payable to the defendant in the amount
of P10,386.69.
16. That sometime on September 1,
1964 a big fire occured in Cabadbaran,
Agusan in which the spouses Dy Ching
Eng and Sy Jean suffered heavy losses.
17. That due to the losses suffered by
said spouses Dy Ching Eng and Sy
Jean both spouses were not required to
liquidate immediately their account of
P10,368.69, and on the contrary they
were further given Pl,000.00 on
September 3, 1964 covered by mere
vales signed in chinese characters by
Sy Jean, and in order to further help
them rehabilitate themselves from the
fire losses both spouses were not
pressed for payment of their total
outstanding account in the sum of
P12,368.69 leaving the matter for
future liquidation at their own request.
18. That sometime in 1966 plaintiff Dy
Ching Eng transferred his copra
business to his son Rogelio Dy who
eventually took over the business of his
parents from that time on until now,
although plaintiffs Dy Ching Eng and
Sy Jean continued to help their son
Rogelio Dy in running the copra
business.
19. That on two (2) occasions,
particularly November 13 and 17, 967
plaintiff Sy Jean came to defendant's
store and requested for advance amount
of P10,000.00, and P6,000.00
respectively. She specifically requested
and so the defendant accommodated
that the amounts be covered by checks
of P2,000.00 each to facilitate her and
her son Rogelio Dy's purchases of
copra as agent of defendant. The
November 13 checks were five (5) in
number for the total amount of
P10,000.00 and the November 17
checks were three (3) in number for a
total of P6,000,00.
20. That the above eight (8) checks
were covered by two (2) provincial
receipts or values, one dated November
13, 1967 and the other dated November
18, 1967. The latter value is now
Annex "J" of the complaint.
21. That late in the afternoon of
November 18, 1967 plaintiff Rogelio
Dy came to the store and after
confirming the values of plaintiff Sy
Jean he prepared in his own
handwriting a cash advance receipt
which is partly printed and partly
handwritten receipt for P16,000.00.
This is a requisite which had to be
effected in view of the fat, that it was
plaintiff Rogelio Dy who was and still
is the licensed copra dealer
22. That after preparing the partly
printed and partly handwritten cash
advance receipt for P16,000.00, and
after the same was handed over by
Rogelio Dy to the defendant and in turn
defendant returned to Sy Jian thru
Rogelio Dy two previous values signed
by Sy Jean.
23. That during that period of time
between November 13 up to and
including November 18, 1967
defendant noticed that there were
accumulations of the stock of copra in
the bodega of the plaintiffs, which
bodega incidentally is located just
across the street where defendant's
store is situated.
24. That on the 19th of November 1967
defendant came to Cebu and had only
returned to Cabadbaran on the 22nd
day of November 1967.
25. That upon his return to Cabadbaran,
Agusan he noticed that the bodega of
plaintiffs was already empty. So, he
went to confront Plaintiff Rogelio Dy
and his mother Sy Jean why was it that
their bodega was empty. They replied
to the defendant that the copra was sold
to a purchaser in Surigao because
according to them said purchaser paid a
better price for the copra.
26. That defendant told plaintiffs
Rogelio Dy and Sy Jean that at least
they should have advised the defendant
because defendant was also willing to
pay an increased price. But both
plaintiffs answered that the matter is
already closed and there was nothing
they could do about it. So, defendant
asked for the return of his money. But
plaintiffs could not readily do it. So,
defendant wired the Philippine Bank of
Communications of Cebu City to stop
payment of the eight (8) checks above-
mentioned, but unfortunately four (4)
checks were already cashed and
stopping paying was only effected on
the other four (4) checks.
27. That in view of the fact that no
payment of the amount was made,
much less a delivery of copra effected .
despite the lapse of considerable length
of time and notwithstanding repeated
demands, defendant was compelled to
seek the intervention of the Provincial
Fiscal, but still no payment was
effected until now.
28. That the filing of the present case is
a plain harassment and a clear
retaliation for what defendant has done
in seeking the intervention of the
Provincial Fiscal.
As
FIRST COUNTER-CLAIM
Defendant respectfully alleges:
29. That for the sake of brevity
defendant hereby reproduces and
repleads all the allegations contained in
the previous paragraphs of this answer
and special and affirmative defense.
30. That defendant has ascertained that
out of the eight (8) checks at the rate of
P2,000.00 each, four (4) checks were
already cashed, particularly cheeks
Nos.
T-445251, T-445255 and T-445269 or
a total amount of P8,000.00, and the
other four (4) cheeks totalling
P8,000.00 were not effectively cashed
because payment of the same was
accordingly stopped.
31. That the cash advance receipt of
P16,000.00 is therefore reduced to only
P8,000.00 if and when the four (4)
other checks shall be returned by the
plaintiffs to the defendant.
As
SECOND COUNTER-CLAIM
Defendant respectfully alleges:
32. That for the sake of brevity
defendant hereby reproduces and
repleads all the allegations contained in
the previous paragraphs of this answer
and special and affirmative defenses,
including the allegations contained in
the first counterclaim.
33. That plaintiffs are indebted to the
defendant in the total sum of
P12,368.69 as acknowledged by Sy
Jean, particularly in her cash advance
of August 26, 1964 and values of
September 2 and September 3, 1964
respectively, which account totalling
P12,868.69 remains unpaid and
outstanding until now, despite repeated
demands subsequently made by the
defendant for its payment.
As
 THIRD COUNTER-CLAIM
Defendant respectfully alleges:
34. That for the sake of brevity
defendant hereby reproduces and
repleads all the allegations contained in
the previous paragraphs of this answer
and special and affirmative defenses
including the allegations contained in
the first and second counterclaims.
35. That defendant is a businessman of
good standing in the Municipality of
Cabadbaran and Province of Agusan
with quite a considerable gross
negotiations every year.
36. That defendant also enjoys good
standing in the community of
Cabadbaran, Agusan having been
President since 1966 and he is still
President of the Cabadbaran Lions
Club until now.
37. That defendant has been maligned
by the plaintiffs by 'bringing this
clearly unfounded civil action against
him in gross and bad faith, and as a
consequence defendant suffered actual
losses in his business and also suffered
moral damages, and in view of the fact
that plaintiffs have acted in gross bad
faith and evident malice in filing the
complaint they should be made to pay
actual, moral and exemplary damages
in such amount as to this Honorable
court may determine in the exercise of
its sound discretion.
38. That plaintiffs, by maliciously
filing the instant complaint against the
defendant, have compelled the latter,
for the protection of his interest, to
incur litigation expenses, and engage
the services of undersigned counsel
with whom he has agrhe time the
orders of attachment complained of
were issued, respondent court acted
with grave abuse of discretion, and the
writs issued thereunder and all
subsequent proceedings related thereto
must consequently be as they are
hereby set aside.
On November 14, 1971, the defendant Tolentino died. This
was before he had completed the formal presentation of his
evidence in support of his counterclaims. Whereupon, Atty.
Vicentey Jayme for the respondents, after their proper
Vicente Jayme for the respondents, after their proper
substitution as heris of defendant Tolentino, filed a so-
called "Jurisdictional Motion for Dismissal of Plaintiffs'
Complaint" on December 13, 1971, asking however that
notwithstanding the dismissal of the complaint prayed for,
the court proceed with the trial and final disposition of the
cournterclaims. The motin was based on the ground that
inasmuch as the plaintiff's case was a claimfor money,
under Section 21 of Rule 3, it should be dismissed as an
action and filed as a claim inthe special proceedings for the
settlement of the estate of the deceased defendant.
Petitioners opposed said motion contending that the second
cause of action was for damages and that their defense to
the counterclaims of the defendant was in the complaint
and citing the case of Javier vs. Araneta, L-4369, August
31, 1953, in support of their opposition. On January 5,
1972, respondent judge denied the motion to dismiss thus:
"For not being well-founded, the motion filed by Atty.
Vicente Jayme, counsel for the defendants, dated Decembr
13, 1971 based onthe grounds threin stated (See: pp. 470-
471, Recods) is hreby ordered DENIED.
SO ORDERED." (Page 9, Record.)
Threeafter, the court porceeded with the trial and on May 4
1972 ordered the admission of the documentary evidence of
defendants listed inthe order of even date, and upon
manifestationof plaintiffs that they have rebuttal evidence
to present, set the case for hearing for the purpose of
receiving the same, but instead of agreeing to thedats
porposed by them: July 11, 12 and 13, 1972, the court, in
its order of May 22, 1972, set the reception of said
evidence on July 3, 1972, only to change this later or on
June 28, 1972, to July 5, 1972 for fear that July 3, 1972
might be declared a public holiday, and still later to July
25, 1972 might be declared a public holiday, and still later
to July 25, 1972 upon motion of plaintiffs' counsel.
In the meanwhile, on June 27, 1972, plaintiffs filed the
following motion, which they set for hearing on July 3,
1972, albeit no hearing appears to have beenheld onsaid
date:
"COME NOW the plaintiffs, thorugh counsels, and to this
Honorable Court respectully allege:
1. That the reception of plaintiffs' rebuttal evidence inthe
above-entitled case has been set for July 3rd, 1972, at 8:30
A.M.
2. That as defendant Emmanuel O. Tolentino died before
completion of plaintiffs' cross-examination and before
finality of judgment on plaintiffs' respective money claims
against him, and as the substituted defendants have filed
jurisdictional motion for dismissal of this case, the ;laintiffs
hreby withdreaw their opposition to said jurisdictional
motion by reason of the fact that, as pointed out therein,
this Honorable Court is divested of jurisdiction to
continuetaking cognizance of plaintiffs' money claim and
said money claim should be filed with the proper probate
court.
3. That in the interest of justice and in order not to render
judgment on said money claim null and void for lack of
jurisdiction, the plaintiffs desire to present completely
competent, relevant and material evidence before the
proper probate court to substantiate their aforesaid money
claims and for this reason they are constrained to move this
Honorable Court to dismiss provisionally this case to move
this Honorable Court to dismiss provisionally this case
without prejudice of refiling same with the proper probate
court and of reproducing therein the evidence and
presenting rebuttal evidence according as the nature of
defendants' evidence may demand.
4. That in view of the foregoing considerations, the
plaintiffs hereby manifest that they no longer will present
rebuttal evidence resrving same to be adduced instead in
the proper probate court.
WHEREFORE, this Honorable Court is most respectfully
prayed to dismiss provisionally the above-entitled case
without prejudice of refiing same with the proper probate
court and of presenting and reproducing therein plaintiffs'
evidence for final determination and decision by said
probate court."
On Juy 13, 1972, defendants filed the following:
DEFENDANTS COUNTER-MANIDFESTATION AND
OPPOSITION TO THE MOTION DATED JUNE 27, 1972
COME the defendants in the above-entitled case, thru the
undersigned counsel, and to this Honorable Court most
respectfully manifest and submit an opposition to the
dismissal of defendants' counterclaim on the following
grounds:
1. That copy of plaintiffs' Manifestation and Motion dated
June 27, 1972 appears to have been mailed from Butuan
City on June 28, 1972, and received by us after July 3,
1972.
2. That as far back as December 13, 1971 we have
submitted to this Honorable Court a pleading entitled
"JURISDICTIONAL MOTION FOR DISMISSAL OF
PLAINTIFFS' COMPLAINT (PRIVILEGED AND
URGENT)'.
3. What our grounds therein alleged are hereto replead and
reproduced IN TOTO.
4. That said motionhas beenopposed by the plaintiffs under
a pleaing entitled 'OPPOSITION TO JURISDICTIONAL
MOTION FOR DISMISSAL OF PLAINTIFFS'
COMPLAINT' dated December 29, 1971.
5. That an order dated January 5, 1972 was issued by this
Honorable Court denying our motion.
6. That in the meantime and in due course continuation of
the trial was held and the formal offer in evidence of all the
exhibits of the defendants was effected under date of
February 19, 1972, which exhibits were admited by the
Court inits order of May 4, 1972.
7. That as it is the case of the defendants is completed with
their counterclaim duly substantiated.
8. That the counterclaim is in itself an independent action,
not subject to suspension or dismissal because it survives
the deceased Don Emmanuel O. Tolentino.
9. That as a matter of fact is is now deemed submitted to
the decision of the Honorable Court without any strings
attached to said counterclaim.
WHEREFORE, in reiteration, this Honorable Court is most
respectfully prayed to grant the motion to dismiss plaintiffs'
complaint, and to declare the case of the defendants as far
as their counterclaim is concerned, submitted for the
decisionof this Honorable Court." (Pp. 12-13, Recod.)
And on July 18, 1972, the court issued the following order:
"For lack of merit, the manifestation and motion filed by
Atty. Cipriano C. Alvizo, Sr. for the plaintiffs (See: pp.
543-544, Records), and the counter-manifestation and
opposition filed by Atty. Vicente Jayme for the defendants
(See: pp. 547-548 Records) are hereby ordered DENIED.
ASprayed of (for) by Atty. Alvizo, Sr., set this case for the
reception of the rebuttal and surrebuttal evidence on July
25, 1972 from 8:30 A.M. to P.M. with due notice to all
counsel." (Page 14, Record.)
A motion dated July 23, 1972 for reconsideration of thir
order was filed by plaintiffs but on July 25, 1972, what
happened is narrated in the order of the court of said date as
follows:
"When this case was called for the reception of plaintiffs'
rebuttal evidence for the second time at exactly 11:23 A.M.
today, Atty. Cipriano C. Alvizo, Sr., counsel for the
plaintiffs, together with all the plaintiffs themeslves, failed
to appear in court despite due notice to them in open court
the first time this case was called at 8:30 A.M., and in spite
of the two personal notices given to said Atty. Alvizo, Sr.,
who was by then withinthe sala of Branch 1 of this court
sitting, whre no sessions were yet had, first by Court Proces
Server Rodrigo T. Macion and second, by CIC Raymundo
C. Morgadez minutes before the second call as above said.
The reception of plantiffs reguttal evidence was previously
set by the court, upon previous prayer of plaintiffs, thru
counsel, in their Manifestaion and Motion dated May 15,
1972 (See: p. 537, Records), on July 3, 1972 in anorder
dated May 22, 1972 (See: p. 541, Records). Later,
plaintiffs, thru counsel, prayed the court again in their
Urgent Ex Parte Motion dated June 30, 1972
concerned, without prejudice to its being filed as a money
claim in special proceedings for the settlement of the estate
of the deceased Emmanuel O. Tolentino. Respondent court
is further ordered to proceed with the trial of respondents'
counter-claims by allowing the petitioners to present their
evidence in defense thereto, after which another decision
should be rendered as the facts and the law may warrant.

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

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

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

Plaintiffs' Urgent Motion for Reconsideration filed only

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

On July 29, 1972, plaintiffs

PREMISES CONSIDERED, judgment is hereby rendered

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

If any of the defendants does not reside and is not

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

The Philippine leading cases in which this Rule, or its

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

As a general rule, when the defendant is not

ROMAN MABANAG, plaintiff-appellant,
vs.
JOSEPH M. GALLEMORE, defendant-appellee.
Santiago Catane for appellant.
No appearance for appellee.
TUASON, J.:
This case, here on appeal from an order dismissal by the
Court of First Instance of Occidental Misamis, raises the
question of the court's jurisdiction. More specifically, the
question is whether the action is in personam or one in rem.
The trial court opined that it is the first and that it "has no
authority nor jurisdiction to render judgment against the
Literally this Court said:
herein defendant, Joseph M. Gallemore for being a non-
resident.
The purpose of the action is to recover P735.18, an amount
said to have been paid by the plaintiff to the defendant for
two parcels of land whose sale was afterward annulled. The
defendant is said to be residing in Los Angeles, California,
U. S. A. He has no property in the Philippine except an
alleged debt owing him by a resident of the municipality of
Occidental Misamis. This debt, upon petition of the
plaintiff, after the filing of the complaint and before the suit
was dismissed, was attached to the extent of plaintiff's
claim for the payment of which the action was brought. But
the attachment was dissolved in the same order dismissing
the case.
It was Atty. Valeriano S. Kaamino who has amicus
curi filed the motion to dismiss and to set aside the
attachment. There is no appearance before this Court to
oppose the appeal.
residing and is not found in the Philippines, the
Philippine courts cannot try any case against him
because of the impossibility of acquiring
jurisdiction over his person, unless he voluntarily
appears in court. But, when the action affects the
personal status of the plaintiff residing in the
Philippines, or is intended to seize or dispose of
any property, real or personal, of the defendant,
located in the Philippines, it may be validly tried
by the Philippine courts, for then, they have
jurisdiction over the res, i.e., the personal status
of the plaintiff or the property of the defendant,
and their jurisdiction over the person of the non-
resident defendant is not essential. Venue in such
cases may be laid in the province where the
plaintiff whose personal status is in question
resides, or where the property of the defendant or
a part thereof involved in the litigation is located.
Jurisdiction over the property which is the subject
of litigation may result either from a seizure of
the property under legal process, whereby it is
brought into the actual custody of the law, or it
may result from the institution of legal
proceedings wherein, under special provisions of
law, the power of the court over the property is
recognized and made effective. In the latter case
the property, though at all times within the
potential power of the court, may never be taken
into actual custody at all. An illustration of the
jurisdiction acquired by actual seizure is found in
attachment proceedings, where the property is
seized at the beginning of the action, or some
subsequent stage of its progress, and held to
abide the final event of the litigation. An
illustration of what we term potential jurisdiction
over the res, is found in the proceeding to register
 the title of land under our system for the
registration of land. Here the court, without
taking actual physical control over the property
assumes, at the instance of some person claiming
to be owner, to exercise a jurisdiction in rem over
the property and to adjudicate the title in favor of
the petitioner against all the world. (Banco
Espaol-Filipino vs. Palanca, supra, 927-928.).
In an ordinary attachment proceeding, if the
defendant is not personally served, the
preliminary seizure is to be considered necessary
in order to confer jurisdiction upon the court. In
this case the lien on the property is acquired by
the seizure; and the purpose of the proceeding is
to subject the property to that lien. If a lien
already exists, whether created by mortgage,
contract, or statute, the preliminary seizure is not
necessary; and the court proceeds to enforce such
lien in the manner provided by law precisely as
though the property had been seized upon
attachment. (Roller vs. Holly, 176 U.S., 398, 405;
44 Law. ed., 520.) It results that the mere
circumstance that in an attachment the property
may be seized at the inception of the proceedings,
while in the foreclosure suit it is not taken into
legal custody until the time comes for the sale,
does not materially affect the fundamental
principle involved in both cases, which is that the
court is here exercising a jurisdiction over the
property in a proceeding directed essentially in
rem. (Id., 929-930.).
When, however, the action relates to property
located in the Philippines, the Philippine courts
may validly try the case, upon the principles that
a "State, through its tribunals, may subject
property situated within its limit owned by non-
residents to the payment of the demand of its own
citizens against them; and the exercise of this
jurisdiction in no respect infringes upon the
sovereignty of the State were the owners are
domiciled. Every State owes protection to its own
citizens; and, when non-residents deal with them,
it is a legitimate and just exercise of authority to
hold any appropriate any property owned by such
non-residents to satisfy the claims of its citizens.
It is in virtue of the State's jurisdiction over the
property of the non-resident situated within its
limits that its tribunals can inquire into the non-
resident's obligations to its own citizens, and the
inquiry can then be carried only to the extent
necessary to control disposition of the property. If
the non-resident has no property in the State,
there is nothing upon which the tribunals can
adjudicate. (Slade Perkins vs. Dizon, 40 Off. Gaz.
[3d Supplement], No. 7, p. 216.).
A fuller statement of the principle whereunder attachment
or garnishment of property of a non-resident defendant
confers jurisdiction on the court in an otherwise personal
action, appears in two well known and authoritative works:
The main action in an attachment or garnishment
suit is in rem until jurisdiction of the defendant is
secured. Thereafter, it is in personam and also in
rem, unless jurisdiction of the res is lost as by
dissolution of the attachment. If jurisdiction of
the defendant is acquired but jurisdiction of the
res is lost, it is then purely in personam. . . a
proceeding against property without jurisdiction
of the person of the defendant is in substance a
proceeding in rem; and where there is jurisdiction
of the defendant, but the proceedings against the
property continues, that proceedings is none the
less necessarily in rem, although in form there is
but a single proceeding. (4 Am. Jur., 556-557.)
As the remedy is administered in some states, the
theory of an attachment, whether it is by process
against or to subject the property or effects of a
resident or non-resident of the state, is that it
partakes essentially of the nature and character of
the proceeding in personam and not of a
proceeding in rem. And if the defendant appears
the action proceeds in accordance with the
practice governing proceedings in personam. But
were the defendant fails to appear in the action,
the proceeding is to be considered as one in the
nature of a proceeding in rem. And where the
court acts directly on the property, the title
thereof being charged by the court without the
intervention of the party, the proceeding
unquestionably is one in rem in the fullest
meaning of the term.
In attachment proceedings against a non-resident
defendant where personal service on him is
lacking, it is elementary that the court must
obtain jurisdiction of the property of the
defendant. If no steps have been taken to acquire
jurisdiction of the defendant's person, and he has
not appeared and answered or otherwise
submitted himself to the jurisdiction of the court,
the court is without jurisdiction to render
judgment until there has been a lawful seizure of
property owned by him within the jurisdiction of
the court. (2 R. C. L., 800-804.).
Tested by the foregoing decisions and authorities, the Court
has acquired jurisdiction of the case at bar by virtue of the
attachment of the defendant's credit. Those authorities and
decisions, so plain and comprehensive as to make any
discussion unnecessary, are in agreement that though no
jurisdiction is obtained over the debtor's person, the case
may proceed to judgment if there is property in the custody
of the court that can be applied to its satisfaction.
It is our judgment that the court below erred in dismissing
the case and dissolving the attachment; and it is ordered
that, upon petition of the plaintiff, it issue a new writ of
attachment and then proceed to trial. The costs of this
appeal will be charged to defendant and appellee.

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

Padilla, JJ., concur.
G.R. No. 102448 August 5, 1992
RICARDO CUARTERO, petitioner,
vs.
COURT OF APPEALS, ROBERTO EVANGELISTA
and FELICIA EVANGELISTA, respondents.
Abesamis, Medialdea & Abesamis for petitioner.
Eufemio Law Offices for private respondent.
Subsequently, the spouses Evangelista filed motion to set
aside the order dated August 24, 1990 and discharge the
writ of preliminary attachment for having been irregularly
and improperly issued. On October 4, 1990, the lower court
denied the motion for lack of merit.
Private respondents, then, filed a special civil action
for certiorari with the Court of Appeals questioning the
orders of the lower court dated August 24, 1990 and
October 4, 1990 with a prayer for a restraining order or writ
of preliminary injunction to enjoin the judge from taking
further proceedings below.

In a Resolution dated October 31, 1990, the Court of

GUTIERREZ, JR., J.: Appeals resolved not to grant the prayer for restraining
order or writ of preliminary injunction, there being no clear
This is a petition for review on certiorari seeking to annul showing that the spouses Evangelista were entitled thereto.
the decision of the Court of Appeals promulgated on June
27, 1991 as well as the subsequent resolution dated October On June 27, 1991, the Court of Appeals granted the petition
22, 1991 denying the motion for reconsideration in CA- for certiorari and rendered the questioned decision. The
G.R. SP No. 23199 entitled "Spouses Roberto and Felicia motion for reconsideration filed by herein petitioner
Evangelista v. Honorable Cezar C. Peralejo, Presiding Cuartero was denied for lack of merit in a resolution dated
Judge Regional Trial Court of Quezon City, Branch 98, and October 22, 1991. Hence, the present recourse to this
Ricardo Cuartero," which nullified the orders of the trial Court.
court dated August 24, 1990 and October 4, 1990 and
cancelled the writ of preliminary attachment issued on The petitioner raises the following assignment of errors:
September 19, 1990.
I
Following are the series of events giving rise to the present
controversy.
THE COURT OF APPEALS ERRED
AND COMMITTED A GRAVE
On August 20, 1990, petitioner Ricardo Cuartero filed a ABUSE OF DISCRETION,
complaint before the Regional Trial Court of Quezon City AMOUNTING TO LACK OF
against the private respondents, Evangelista spouses, for a JURISDICTION WHEN IT HELD
sum of money plus damages with a prayer for the issuance THAT THE REGIONAL TRIAL
of a writ of preliminary attachment. The complaint was COURT DID NOT ACQUIRE
docketed as Civil Case No. Q-90-6471. JURISDICTION OVER
RESPONDENT SPOUSES.
On August 24, 1990, the lower court issued an order
granting ex-parte the petitioner's prayer for the issuance of II
a writ of preliminary attachment.
THE COURT OF APPEALS ERRED
On September 19, 1990, the writ of preliminary attachment AND ACTED WITH GRAVE ABUSE
was issued pursuant to the trial court's order dated August OF DISCRETION WHEN IT HELD
24, 1990. On the same day, the summons for the spouses THAT THE REGIONAL TRIAL
Evangelista was likewise prepared. COURT COULD NOT VALIDLY
ISSUE THE SUBJECT WRIT OF
The following day, that is, on September 20, 1990, a copy PRELIMINARY ATTACHMENT
of the writ of preliminary attachment, the order dated WHICH IS AN ANCILLARY
August 24, 1990, the summons and the complaint were all REMEDY. (Rollo, p. 13)
simultaneously served upon the private respondents at their
residence. Immediately thereafter, Deputy Sheriff Ernesto The Court of Appeals' decision is grounded on its finding
L. Sula levied, attached and pulled out the properties in that the trial court did not acquire any jurisdiction over the
compliance with the court's directive to attach all the person of the defendants (private respondents herein). It
properties of private respondents not exempt from declared that:
execution, or so much thereof as may be sufficient to
satisfy the petitioner's principal claim in the amount of
P2,171,794.91. . . . the want of jurisdiction of the trial
court to proceed in the main case as
well as the ancillary remedy of
 attachment is quite clear. It is not
disputed that neither service of
summons with a copy of the complaint
nor voluntary appearance of petitioners
was had in this case before the trial
court issued the assailed order dated
August 24, 1990, as well as the writ of
preliminary attachment dated
September 19, 1990. This is reversible
error and must be corrected
on certiorari. (Rollo, p. 24)
The appellate tribunal relied on the case of Sievert v. Court
of Appeals, 168 SCRA 692 (1988) in arriving at the
foregoing conclusion. It stated that:
Valid service of summons and a copy
of the complaint vest jurisdiction in the
court over the defendant both for the
purpose of the main case and for
purposes of the ancillary remedy of
attachment and a court which has not
acquired jurisdiction over the person of
defendant, cannot bind the defendant
whether in the main case or in any
ancillary proceeding such as attachment
proceedings (Sievert v. Court of
Appeals, 168 SCRA 692). (Rollo, p.
24)
The private respondents, in their comment, adopted and
reiterated the aforementioned ruling of the Court of
Appeals. They added that aside from the want of
jurisdiction, no proper ground also existed for the issuance
of the writ of preliminary attachment. They stress that the
fraud in contracting the debt or incurring the obligation
upon which the action is brought which comprises a ground
for attachment must have already been intended at the
inception of the contract. According to them, there was no
intent to defraud the petitioner when the postdated checks
were issued inasmuch as the latter was aware that the same
were not yet funded and that they were issued only for
purposes of creating an evidence to prove a pre-existing
obligation.
Another point which the private respondents raised in their
comment is the alleged violation of their constitutionally
guaranteed right to due process when the writ was issued
without notice and hearing.
In the later case of Davao Light and Power Co., Inc. v.
Court of Appeals, G.R. No. 93262, November 29, 1991, we
had occasion to deal with certain misconceptions which
may have arisen from our Sievert ruling. The question
which was resolved in the Davao Light case is whether or
not a writ of preliminary attachment may issue ex-
parte against a defendant before the court acquires
jurisdiction over the latter's person by service of summons
or his voluntary submission to the court's authority. The
Court answered in the affirmative. This should have
clarified the matter but apparently another ruling is
necessary.
A writ of preliminary attachment is defined as a provisional
remedy issued upon order of the court where an action is
pending to be levied upon the property or properties of the
defendant therein, the same to be held thereafter by the
sheriff as security for the satisfaction of whatever judgment
might be secured in said action by the attaching creditor
against the defendant (Adlawan v. Tomol, 184 SCRA 31
[1990] citing Virata v. Aquino, 53 SCRA 30-31 [1973]).
Under section 3, Rule 57 of the Rules of Court, the only
requisites for the issuance of the writ are the affidavit and
bond of the applicant. As has been expressly ruled in BF
Homes, Inc. v. Court of Appeals, 190 SCRA 262 (1990),
citing Mindanao Savings and Loan Association, Inc. v.
Court of Appeals, 172 SCRA 480 (1989), no notice to the
adverse party or hearing of the application is required
inasmuch as the time which the hearing will take could be
enough to enable the defendant to abscond or dispose of his
property before a writ of attachment issues. In such a case,
a hearing would render nugatory the purpose of this
provisional remedy. The ruling remains good law. There is,
thus, no merit in the private respondents' claim of violation
of their constitutionally guaranteed right to due process.
The writ of preliminary attachment can be applied for and
granted at the commencement of the action or at any time
thereafter (Section 1, Rule 57, Rules of Court). In Davao
Light and Power, Co., Inc. v. Court of Appeals, supra, the
phrase "at the commencement of the action" is interpreted
as referring to the date of the filing of the complaint which
is a time before summons is served on the defendant or
even before summons issues. The Court added that
. . . after an action is properly
commenced by filing of the
complaint and the payment of all
requisite docket and other fees the
plaintiff may apply and obtain a writ of
preliminary attachment upon the
fulfillment of the pertinent requisites
laid down by law, and that he may do
so at any time, either before or after
service of summons on the defendant.
And this, indeed, has been the
immemorial practice sanctioned by the
courts: for the plaintiff or other proper
party to incorporate the application for
attachment in the complaint or other
appropriate pleading (counter-claim,
cross-claim, third-party-claim) and for
the Trial Court to issue the writ ex-
parte at the commencement of the
action if it finds the application
otherwise sufficient in form and
substance.
The Court also pointed out that:
 . . . It is incorrect to theorize that after
an action or proceeding has been
commenced and jurisdiction over the
person of the plaintiff has been vested
in the Court, but before acquisition of
jurisdiction over the person of the
defendant (either by service of
summons or his voluntary submission
to the Court's authority), nothing can
be validly done by the plaintiff or the
Court. It is wrong to assume that the
validity of acts done during the period
should be dependent on, or held in
suspension until, the actual obtention of
jurisdiction over the defendants person.
The obtention by the court of
jurisdiction over the person of the
defendant is one thing; quite another is
the acquisition of jurisdiction over the
person of the plaintiff or over the
subject matter or nature of the action,
or the res or object thereof.
It is clear from our pronouncements that a writ of
preliminary attachment may issue even before summons is
served upon the defendant. However, we have likewise
ruled that the writ cannot bind and affect the defendant.
However, we have likewise ruled that the writ cannot bind
and affect the defendant until jurisdiction over his person is
eventually obtained. Therefore, it is required that when the
proper officer commences implementation of the writ of
attachment, service of summons should be simultaneously
made.
It must be emphasized that the grant of the provisional
remedy of attachment practically 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 should first be obtained.
However, once the implementation commences, it is
required that 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 Sievert v. Court of Appeals, supra, cited by the Court of
Appeals in its questioned decision, the writ of attachment
issued ex-parte was struck down because when the writ of
attachment was being implemented, no jurisdiction over the
person of the defendant had as yet been obtained. The court
had failed to serve the summons to the defendant.
The circumstances in Sievert are different from those in the
case at bar. When the writ of attachment was served on the
spouses Evangelista, the summons and copy of the
complaint were also simultaneously served.
It is appropriate to reiterate this Court's exposition in
the Davao Light and Power case cited earlier, to wit:
. . . writs of attachment may properly
issue ex-parte provided that the Court
is satisfied that the relevant requisites
therefore 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.
The question as to whether a proper ground existed for the
issuance of the writ is a question of fact the determination
of which can only be had in appropriate proceedings
conducted for the purpose (Peroxide Philippines
Corporation V. Court of Appeals, 199 SCRA 882 [1991]).
It must be noted that the spouses Evangelista's motion to
discharge the writ of preliminary attachment was denied by
the lower court for lack of merit. There is no showing that
there was an abuse of discretion on the part of the lower
court in denying the motion.
Moreover, an attachment may not be dissolved by a
showing of its irregular or improper issuance if it is upon a
ground which is at the same time the applicant's cause of
action in the main case since an anomalous situation would
result if the issues of the main case would be ventilated and
resolved in a mere hearing of a motion (Davao Light and
Power Co., Inc. v. Court of Appeals, supra, The
Consolidated Bank and Trust Corp. (Solidbank) v. Court of
Appeals, 197 SCRA 663 [1991]).
In the present case, one of the allegations in petitioner's
complaint below is that the defendant spouses induced the
plaintiff to grant the loan by issuing postdated checks to
cover the installment payments and a separate set of
postdated cheeks for payment of the stipulated interest
(Annex "B"). The issue of fraud, then, is clearly within the
competence of the lower court in the main action.
WHEREFORE, premises considered, the Court hereby
GRANTS the petition. The challenged decision of the
Court of Appeals is REVERSED, and the order and writ of
attachment issued by Hon. Cezar C. Peralejo, Presiding
Judge of Branch 98, Regional Trial Court of Quezon City
against spouses Evangelista are hereby REINSTATED. No
pronouncement as to costs.
.R. No. L-46009 May 14, 1979
RICARDO T. SALAS and MARIA SALAS, petitioners,
vs.
HON. MIDPANTAO L. ADIL, as Judge of Branch II,
Court of First Instance of Iloilo, ROSITA BEDRO and
BENITA YU, respondents.
Castro Law Office for petitioners.
Tirso Espelete and Fortunato A. Padilla for private
respondents.
ANTONIO, J.:
Certiorari to nullify the Order of Attachment of May 13,
1977, as well as the Writ of Attachment dated May 16,
1977, issued by respondent Judge in Civil Case No. 10770
of the Court of First Instance of Iloilo, entitled "Rosita
Bedro and Benita Yu v. Spouses Ricardo T. Salas and
Maria Salas, et al.
On September 10, 1976, respondents Rosita Bedro and
Benita Yu filed the afore-mentioned civil action with the
Court of First Instance of Iloilo against herein petitioners
Ricardo T. Salas and Maria Salas, the Philippine
Commercial & Industrial Bank, in its capacity as
Administrator of the Testate Estate of the deceased Charles
Newton Hodges, and Avelina A. Magno, in her capacity as
Administratrix of the Testate Estate of the deceased Linnie
Jane Hodge to annul the deed of sale of Lot No. 5 executed
by administrators of the Hodges Estate in favor of the
Spouses Ricardo T. Salas and Maria Salas and for damages.
The action for annulment was predicated upon the
averment that Lot No. 5, being a subdivision road, is intend
for public use and cannot be sold or disposed of by the
Hodges Estate. The claim for damages was based on the
assertion that after defendant spouses purchased Lots Nos.
2 and 3, they also purchased Lot No. 5 and thereafter
"erected wooden posts, laid and plastered at the door of the
house on Lot No. 3, with braces of hardwood, lumber and
plywood nailed to the post", thereby preventing Rosita
Bedro and Benita Yu from using the road on the afore-
mentioned lot, Lot No. 5, and that as a result of such
obstruction, private respondents Rosita Bedro and Benita
Yu sustained actual damages in the amount of P114,000.00,
plus the sum of Pl,000.00 as damages daily from June 30,
1976 due to the stoppage in the construction of their
commercial buildings on Lot No. 3, and moral damages in
the amount of P200,000.00.
In their answer to the complaint, the Salas spouses, after
specifically denying the material allegations in the
complaint, stated that Lot No. 5 had been registered in the
name of the C. N. Hodges as their exclusive private
property and was never subjected to any servitude or
easement of right of way in favor of any person; that any
occupants of Lots Nos. 2 and 3 have direct access to
Bonifacio Drive, a National Highway, hence, Lot No. 5 is
neither needed nor required for the egress or ingress of the
occupants thereof; and that private respondents, as a matter
of fact, since 1964 had excluded and separated completely
their property (Lots Nos. 2 and 3) from Lot No. 5 by
building a concrete wall on the boundary thereon without
providing any gate as entrance or exit towards Lot No. 5;
and that private respondents have no personality to question
the validity of the deed of sale over Lot No. 5 since they
were not parties to the same and the sale was duly approved
by the probate court.
In a motion dated May 12, 1977, private respondents filed a
Motion for Attachment, alleging, among others, that the
case was "for annulment of a deed of sale and recovery of
damages" and that the defendants have removed or
disposed of their properties or are about to do so with intent
to defraud their creditors especially the plaintiffs in this
case.
On May 13, 1977, respondent Judge issued ex-parte a Writ
of Attachment "against the properties of the defendants
particularly Lots Nos. 1 and 4 of Psc-2157 less the building
standing thereon upon the plaintiffs filing a bond in the
amount of P200,000.00 subject to the approval of this
Court." After a surety bond in the amount of P200,000.00,
executed on May 11, 1977 by the Central Surety and
Insurance Company as surety was filed, the writ itself was
issued by respondent Judge on May 16, 1977, directing the
Sheriff to attach the properties above-mentioned. On May
17, 1977, the Deputy Sheriff of Iloilo levied upon the
aforesaid properties of petitioners.
Contending that respondent Judge gravely abused his
discretion in issuing the said Writ of Attachment,
petitioners filed the present petition.
In certiorari proceedings, the cardinal rule is that the court
must be given the opportunity to correct itself, Thus, for the
special civil action of certiorari to prosper, there must be no
appeal nor any plain, speedy and adequate remedy in the
ordinary course of law. Petitioners, therefore, must exhaust
all available remedies in the lower court before filing a
petition for certiorari, otherwise the petition shall be held to
be premature.
In the instant case, it appears that petitioners have adequate
remedy under the law. They could have filed an application
with the court a quo for the discharge of the attachment for
improper or irregular issuance under section 13, Rule 57, of
the Revised Rules of Court, which provides the following
SEC. 13. Discharge of attachment for
improper or irregular issuance. The
party whose property has been attached
may also, at any time either before or
after the release of the attached
property, or before any attachment shall
have been actually levied, upon
 reasonable notice to the attaching
creditor, apply to the judge who Salas
vs. Adil granted the order, or to the
judge of the court in which the action is
pending, for an order to discharge the
attachment on the ground that the same
was improperly or irregularly issued. If
the motion be made on affidavits on the
part of the party whose property has
been attached, but not otherwise, the
attaching creditor may oppose the same
by counter-affidavits or other evidence
in addition to that on which the
attachment was made. After hearing,
the judge shall order the discharge of
the attachment if it appears that it was
improperly or irregularly issued and the
defect is not cured forthwith.
Considering that petitioners have not availed of this
remedy, the instant petition is premature.
We deem it necessary, however, for the guidance of
respondent Court and of the parties, to stress herein the
nature of attachment as an extraordinary provisional
remedy.
A preliminary attachment is a rigorous remedy, which
exposes the debtor to humiliation and annoyance, such it
should not be abused as to cause unnecessary prejudice. It
is, therefore, the duty of the court, before issuing the writ,
to ensure that all the requisites of the law have been
complied with; otherwise the judge acts in excess of his
jurisdiction and the so issued shall be null and void . 1
In Carpio v. Macadaeg, 2 this Court said:
Respondent Judge should not have
issued the two writs of preliminary
attachment (Annexes C and C-1) on
Abaya's simple allegation that the
petitioner was about to dispose of his
property, thereby leaving no security
for the satisfaction of any judgment.
Mere removal or disposal of property,
by itself, is not ground for issuance of
preliminary attachment,
notwithstanding absence of any
security for the satisfaction of any
judgment against the defendant. The
removal or disposal, to justify
preliminary attachment, must have
been made with intent to defraud
defendant's creditors.
Respondent Judge in fact corrected
himself. Acting on petitioner's motion
to discharge attachment and apparently
believing the correctness of the grounds
alleged therein, he set aside the orders
of attachment (Order of March 11,
1960, Annex F)
But reversing himself again, he set
aside his order of March 11, 1960
(Annex K, dated March 29, 1960). This
he did apparently on Abaya's
contention that petitioner was about to
remove or dispose of his property in
order to defraud his creditors, as
examples of which disposals he pointed
to the alleged sale of the horses and of
petitioner's office furniture. ... These
averments of fraudulent disposals were
controverted by petitioner who ...
reiterated the defenses against
preliminary attachment which he had
previously enumerated in his petition to
discharge the two orders of attachment.
Thus the question of fraudulent
disposal was put in issue; and
respondent Judge, before issuing the
pre attachment anew, should have
given the parties opportunity to prove
their respective claims or, at the very
least should have provided petitioner
with the chance to show that he had not
been disposing of his property in fraud
of creditors. (citing National Coconut
Corporation v. Pecson L-4296, Feb.
25, 1952, Villongco v. Panlilio, 6214,
Nov. 20, 1953).
And in Garcia v. Reyes, 3 considering the allegation that the
debtors were removing or disposing of some of their
properties with intent to defraud their creditors, 'this Court
said that "(a)ll in all due process would seem to require that
both parties further ventilate their respective contentions in
a hearing that could indeed reveal the truth. Fairness would
be served thereby, the demand of reason satisfied."
Considering the gravity of the allegation that herein
petitioners have removed or disposed of their properties or
are about to do so with intent to defraud their creditors, and
further considering that the affidavit in support of the pre
attachment merely states such ground in general terms,
without specific allegations of lances to show the reason
why plaintiffs believe that defendants are disposing of their
properties in fraud of creditors, it was incumbent upon
respondent Judge to give notice to petitioners and to allow
wherein evidence is them to present their position at a to be
received. Moreover, it appears from the records that private
respondents are claiming unliquidated damages, including
moral damages, from petitioners. The authorities agree that
the writ of attachment is not available 'm a suit for damages
where the amount claimed is contingent or unliquidated.
We think, however, that a rule
sufficient for the determination of this
case has been suggested and acted
upon, and that the remedy does not
 exist where unliquidated damages were
demanded. ... In Warwick v. Chase, 23
Md 161, it is said: 'It is necessary that
the standard for ascertaining the
amount of damages claimed should not
only appear, but that it should be fixed
and certain, and in no degree dependent
on facts either speculative or Uncertain
... The general rule is, that unliquidated
damages, ... cannot be recovered by
attachment, unless the contract affords
a certain measure or standard for
ascertaining the amount of the damages
... 4

Further.

The statute authorizing the issuance of

the writ of garnishment and that
relating to the issuance of the writ of
attachment ... have not been construed
as authorizing the writs to be issued
when the plaintiff's suit is technically
an action for debt. Neither of the writs
may be issued when the suit is for
damages for tort, but they may be
issued when the plaintiff's claim arises
out of contract either express or
implied, and the demand is liquidated,
that is, the amount of the claim is not
contingent, is capable of being
definitely ascertained by the usual
means of evidence, and does not rest in
the discretion of the jury. 5

WHEREFORE, the instant petition is hereby DENIED, in

order to enable petitioners to move before respondent Court
for the discharge of the attachment on the ground of its
improper and irregular issuance, pursuant to section 13,
Rule 57, of the Revised Rules of Court, and for the
aforesaid Court to act thereon in accordance with the
foregoing.
G.R. No. 55272 April 10, 1989 Likewise contained in said complaint is petitioner's
application for a writ of preliminary attachment against
JARDINE-MANILA FINANCE, INC., petitioner, private respondents. The allegations in support of said
vs. petition for a writ of preliminary attachment are quoted in
COURT OF APPEALS, IMPACT CORPORATION, full:
RICARDO DE LEON and EDUARDO DE
LEON, respondents. Special Allegations for Preliminary
Attachment
Angara, Abello, Concepcion, Regala & Cruz for petitioner.
A. The foregoing
Ramon Quisumbing, Jr. & Associates for private allegations are
respondents. hereby repleaded
and made integral
parts hereof.

B. The defendant
FERNAN, C.J.: corporation at the
time of the
This is a petition for review on certiorari seeking to reverse execution of the
and set aside: (a) the August 29, 1980 decision of the Court aforesaid deeds of
of Appeals 1 in Special Proceedings CA-G.R. No. SP- assignment had
09972-R entitled "Impact Corporation, et al. v. Hon. reservation not to
Buenaventura Guerrero, etc., et al." annulling the order remit to plaintiff
and the writ of attachment issued by the Court of First the proceeds of the
Instance of Rizal in Civil Case No. 34617 entitled receivables
"Jardine-Manila Finance, Inc. v. Impact Corporation, et assigned to plaintiff
al." 2 and (b) the Resolution dated October 7, 1980 denying as confirmed by
herein petitioners motion for reconsideration. 3 their refusal to
remit the same to
On September 28, 1979, petitioner Jardine-Manila Finance, plaintiff although
Inc. (JARDINE) filed a complaint in the then Court of First the issuers of the
Instance (CFI) of Rizal, docketed as Civil Case No. 34617, receivables
against private respondents Impact Corporation (IMPACT), assigned to plaintiff
Ricardo de Leon and Eduardo de Leon, to collect various had already paid to
sums of money allegedly due from therein defendant defendant
IMPACT under a credit accomodation by way of a corporation their
discounting line agreement. 4 Herein private respondents obligations on said
Ricardo de Leon and Eduardo de Leon were included as receivables to the
defendants by virtue of their undertaking covered by a latter.
Surety Agreement under which they bound themselves
jointly and severally with defendant IMPACT to pay herein C. Defendants
petitioner all of IMPACT's obligations under the aforesaid Ricardo de Leon
agreement. 5 and Eduardo de
Leon who are
It was alleged that in April and May 1979, IMPACT likewise officers of
assigned its receivables to JARDINE on the condition that defendant
IMPACT was to collect them on their due dates from their corporation in order
issuers and remit the collected amounts to JARDINE and/or to elicit plaintiffs
repurchase the assigned receivables; 6 but despite the fact approval to enter
that IMPACT had collected the amounts due on said into said deeds of
receivables, it failed or refused to turn over the amounts so assignment with
collected to JARDINE. defendant
corporation,
executed the
JARDINE thus demanded payment of P 1,000,212.64, the aforesaid surety
total amount due under said various deeds of assignment, agreement (Annex
plus interest of P 16,614.64 as of September 6, 1979 and 25 L), likewise, with
% of the aforesaid amount as attorney's fees, exemplary reservation in their
damages and other expenses of litigation. minds not to honor
their obligations
under the same as
what they actually attachment, if the
did when they Honorable Court
refused to pay the should finally
obligations of adjudge that the
defendant applicant plaintiff
corporation to is not entitled
plaintiff pursuant to thereto.7
the provisions of
said surety On the basis of the foregoing allegations, the lower court
agreement. (Annex granted JARDINE's petition for the issuance of a writ of
L) preliminary attachment on October 16, 1979. 8

D. Defendant On October 19, 1979, therein defendants filed a motion to

corporation, set aside the writ of preliminary attachment. They also
Ricardo de Leon submitted to the court a quo a memorandum in support of
and Eduardo de their motion to dissolve the attachment contending that the
Leon have no grounds alleged by the plaintiff in its application for a writ
visible other of attachment are not among the grounds specified under
sufficient security Section 1 of Rule 57; that the defendants have other
for the claim sufficient security; that there was no affidavit of merit to
sought to be support the application for attachment as required by
enforced by this Section 3 of Rule 57 and that the verification of the
action of complaint was defective as it did not state that the amount
plaintiff other than due to the plaintiff above all legal set-ups or counterclaims
their real and is as much as the sum for which the order is sought. 9
personal properties
which are located
in Metro Manila JARDINE opposed the motion arguing that the mental
and in the province reservation of defendants at the time of the execution of the
of Rizal, Province deeds of assignment constituted fraud; that such fraud was
of Nueva Ecija or further confirmed by the fact that defendants actually failed
elsewhere. to remit the proceeds of the collection of receivables
(Emphasis assigned by them; that defendants failed to disclose to the
supplied) plaintiff the fact that they had already collected the
receivables assigned by them; that the amounts collected by
defendant corporation were received by defendants in trust
E. Plaintiffs action for plaintiff and defendant corporation appropriated for
against defendant itself said collection. 10
corporation is
based upon
documents and On November 7, 1979, the trial court denied defendant's
therefrom a motion to annul the writ of preliminary attachment.
sufficient cause of Thereupon, defendant Impact Corporation went to the
action exists. appellate court on a petition for certiorari seeking to annul
said writ. 11
F. Plaintiff is
willing to post a The findings of the Court of Appeals are as follows:
bond in an amount
to be fixed by the To our mind there is no question that
Honorable Court, the allegations of the complaint proper
not exceeding which were repleaded and made
plaintiffs claim integral part of the application for
which will be preliminary attachment (paragraph A)
conditioned to the made out a case of conversion or
effect that plaintiff misappropriation of property held in
will pay all the trust which is the subject of the
costs which may be complaint for the allegations stated that
adjudged to the IMPACT had assigned to JARDINE
adverse party and certain receivables with the
all damages which understanding that it was to collect the
they may sustain by same from the issuers of said
reason of receivables and deliver the amounts
 collected to JARDINE, but in spite of
the fact that IMPACT had actually
collected said amounts, it failed to turn
over said receivables to JARDINE.
There was, therefore, in the allegations
of said complaint true conversion of the
amounts received by defendant in trust
for plaintiff. Defendants in their motion
to discharge the attachment and the
memorandum filed by them in support
of said motion had in effect, admitted
the conversion of the amounts collected
by defendant IMPACT, but justified the
use of said amounts to meet its
operational expenses to prevent a
complete shutdown of its operations.
While we find that the grounds alleged
by plaintiff, the herein private
respondent, to support its application
for preliminary attachment are among
those enumerated in Section 1 of Rule
57 as grounds upon which an
attachment may be issued, we are
constrained nonetheless to rule against
the regularity or legality of the
attachment issued by respondent Court
because there was no allegation made
by plaintiff in its application for the
issuance of a writ of attachment to the
effect 'that there is no sufficient
security for the claim sought to be
enforced, by the action, and the amount
due to the applicant or the value of the
property on the basis of which is
entitled to recover, is as much as the
sum for which the order is granted
above all legal counterclaims, a
requirement for the granting of an order
of attachment under Section 3 of Rule
57. 12
Thus, on August 29, 1980, the Court of Appeals annulled
the assailed writ of attachment for having been issued
improperly and irregularly, the dispositive portion of which
reads:
IN VIEW OF THE FOREGOING, the
petition to annul the order and the writ
of attachment issued by respondent
Court is hereby GRANTED and
judgment is rendered declaring said
order and writ of attachment null and
void for having been issued improperly
and regularly. The restraining order
issued by this Court on November 9,
1979 restraining respondents from
enforcing the writ of attachment issued
by respondent Judge on October 16,
1979 is hereby made PERMANENT.
With costs against private
respondents. 13
Hence this recourse.
Reduced to bare essentials, the records show that in the
exercise of its discretion, the lower court found justification
in the issuance of the attachment. On the other hand, the
Court of Appeals while in accord with the lower court that
a sufficient cause of action exists for petitioner and that the
ground for its application for attachment is one of those
mentioned in Section 1, Rule 57 of the Rules of Court,
found the issuance of the attachment irregular or illegal in
the absence of the following allegations in the application
for attachment: (1) that "there is no sufficient security for
the claim sought to be enforced by the action; and (2) that
the amount due to the applicant or the value of the property
on the basis of which he is entitled to recover, is as much as
the sum for which the order is granted above all legal
counterclaims."
Ultimately, the issue therefore, is whether or not non-
compliance with the formal requirements invalidate the
writ of attachment.
On both counts, petitioner admits not having used the exact
words of the Rules in making the requisite allegations, but
nonetheless it alleged that it presented ultimate and specific
facts, first-in showing that there is indeed no other
sufficient security for the claim sought to be enforced as
shown in paragraph D of the Complaint earlier quoted; and
second-while it did not specifically state that the sum due is
above all legal counterclaims, such conclusion of fact is no
longer necessary in the face of actual proof in the answer
which did not carry any counterclaim. In fine, petitioner
stresses that mere forms must not be given more weight
than substance. 14
In excusing the deficiencies of its application for a writ of
preliminary attachment, petitioner relies heavily on the case
of De Borja v. Platon, 15 where this Court sustained the
writ of attachment issued by the lower court in favor of the
defendants based on the counterclaim of the latter despite
the lack of allegations in the affidavit attached to the
petition for the issuance of the writ of attachment that the
amount due the counterclaim was as much as the sum for
which the order is granted above all legal counterclaims.
It will be noted however, that the trial court found that the
counterclaim of the defendants exceeded the claims of the
plaintiff. Thus, this Court held that "as the trial court had
before it the evidence adduced by both sides, the petition
for a writ of preliminary attachment having been filed four
years after the trial court had begun, we presume that the
lower court having in mind such evidence, ordered the
attachment accordingly." 16
In sharp contrast, in the case at bar, where the records
undeniably reveal that: (1) the complaint was filed on
September 28, 1979; 17 (2) the writ of preliminary
attachment was issued on October 16, 1979; 18 (3) the
motion to annul preliminary attachment dated October 19,
1979 was filed on the same day; 19 (4) the answer of
defendant IMPACT dated October 30, 1979 20 was
received by the RTC Pasig only on November 5,
1979, 21 it is evident that the questioned writ was issued ex
parte; and at a time when the Court a quo had yet no basis
for concluding that the amount due to petitioner is as much
as the sum for which the order is granted above all legal
counterclaims.
It is therefore, readily apparent that the conclusions in
the De Borja case cannot be applied to the case at bar. In
fact even petitioner's plea for liberality as it vigorously
invokes the doctrine on said case which refused "to
sanction that formalism and that technicality which are
discountenanced by the modern laws of procedure" is an
obvious misreading of the ruling of this Court which states:
On the first point, we believe a writ of
preliminary attachment may be issued
in favor of a defendant who sets up a
counterclaim. For the purpose of the
protection afforded by such attachment,
it is immaterial whether the defendants
Borja and wife simply presented a
counterclaim or brought a separate civil
action against Jose de Borja, plaintiff in
the previous case and petitioner herein.
To lay down a subtle distinction would
be to sanction that formalism and that
technicality which are discountenanced
by the modern laws of procedure for
the sake of speedy and substantial
justice. . . . 22
as a liberal approach to the required allegations in the
application for a writ of preliminary attachment when what
this Court actually allowed was the presentation of a
counterclaim by the defendant instead of a separate civil
action in compliance with one of the basic requirements for
the issuance of said writ.
The authority to issue an attachment, like the jurisdiction of
the court over such proceedings rests on express statutory
provisions and unless there is authority in the statute, there
is no power to issue the writ, and such authority as the
statute confers must be strictly construed.23 In fact,
"(E)ven where liberal construction is the rule, the statute or
the right to attachment thereby granted may not be
extended by judicial interpretation beyond the meaning
conveyed by the words of the statute." 24 Petitioner's
application for a writ of preliminary attachment must
therefore be scrutinized and assessed by the requisites and
conditions specifically prescribed by law for the issuance of
such writ.
Section 3, Rule 57 of the Revised Rules of Court governs
the issuance of a writ of attachment, to wit:
Sec. 3. Affidavit and bond required.-An
order of attachment shall be granted
only when it is made to appear by the
affidavit of the applicant or some other
person who personally knows of the
facts, that a sufficient cause of action
exists, that the case is one of those
mentioned in section 1 hereof, that
there is no sufficient security for the
claim sought to be enforced by the
action, and that the amount due to
applicant or the value of the property
the possession of which he is entitled to
recover is as much as the sum for
which the order is granted above all
legal counterclaims.
The stringent conditions for the issuance of the writ have
been echoed in all subsequent cases, even as late as K.O.
Glass Construction Co. Inc. vs. Valenzuela, 25 wherein the
writ of preliminary attachment issued was annulled and set
aside on the findings that while the plaintiff "may have
stated in his affidavit that a sufficient cause of action exists
against the defendant Kenneth O. Glass, he did not state
therein that the case is one of those mentioned in Section 1
hereof; that there is no other sufficient security for the
claim sought to be enforced by the action; and that the
amount due to the applicant is as much as the sum for
which the order is granted above all legal counterclaims."
More specifically, it has been held that the failure to allege
in the affidavit the requisites prescribed for the issuance of
the writ of preliminary attachment, renders the writ of
preliminary attachment issued against the property of the
defendant fatally defective, and the judge issuing it is
deemed to have acted in excess of his jurisdiction. 26 In
fact, in such cases, the defect cannot even be cured by
amendment. 27
Since the attachment is a harsh and rigorous remedy which
exposes the debtor to humiliation and annoyance, the rule
authorizing its issuance must be strictly construed in favor
of defendant. It is the duty of the court before issuing the
writ to ensure that all the requisites of the law have been
complied with. 28 Otherwise, a judge acquires no
jurisdiction to issue the writ.
The general rule is that the affidavit is the foundation of the
writ, and if none be filed or one be filed which wholly fails
to set out some facts required by law to be stated therein,
there is no jurisdiction and the proceedings are null and
void. Thus, while not unmindful of the fact that the
property seized under the writ and brought into court is
what the court finally exercises jurisdiction over, the court
cannot subscribe to the proposition that the steps pointed
out by statutes to obtain such writ are inconsequential, and
in no sense jurisdictional. 29
Considering that petitioner's application for the subject writ
of preliminary attachment did not fully comply with the
requisites prescribed by law, said writ is, as it is hereby
declared null and void and of no effect whatsoever.

This conclusion renders a discussion of petitioner's other

argument unnecessary.

WHEREFORE, the decision of the Court of Appeals dated

August 29, 1980 is hereby AFFIRMED. Costs against
petitioner.

SO ORDERED.

Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.

LA GRANJA, INC., petitioner,
vs.
FELIX SAMSON, Judge of First Instance of Cagayan,
CHUA BIAN, CHUA YU LEE and CHUA
KI, respondents.
Miguel P. Pio for petitioner.
The Respondent Judge in his own behalf.
No appearance for other respondents.
VILLA-REAL, J.:
In this original petition for mandamus filed by the
corporate entity, La Granja, Inc., against Felix Samson, as
Judge of the Court of First Instance of Cagayan, Chua Bian,
Chua Yu Lee and Chua Ki, the petitioner herein, for the
reasons stated in its petition, prays that a writ
of mandamus be issued against the respondent Judge
compelling him to issue a writ of attachment against the
properties of the other respondents herein, who are
defendants in civil case No. 1888 of the Court of First
Instance of Cagayan. The pertinent facts necessary for the
solution of the questions raised in the present case are as
follows:
On July 5, 1932, the petitioner herein, La Granja, Inc., filed
a complaint in the Court of First Instance of Cagayan,
against Chua Bian, Chua Yu Lee and Chua Ki, for the
recovery of the sum of P2,418.18 with interest thereon at
the rate of 12 per cent per annum, which case was docketed
as civil case No. 1888. The plaintiff at the same time, also
prayed for the issuance of an order of attachment against
the aforementioned defendants' property and accompanied
said complaint with an affidavit of the manager of the
aforesaid petitioner, La Granja, Inc., wherein it was alleged
among other essential things, that the said defendants have
disposed or are disposing of their properties in favor of the
Asiatic Petroleum Co., with intent to defraud their
creditors. The respondent judge, wishing to ascertain or
convince himself of the truth of the alleged disposal,
required the petitioner herein to present evidence to
substantiate its allegation, before granting its petition.
Inasmuch as the petitioner refused to comply with the
court's requirement, alleging as its ground that was not
obliged to do so, the respondent judge dismissed said
petition for an order of attachment.
The only question to decide in the present case is whether
or not the mere filing of an affidavit executed in due form
is sufficient to compel a judge to issue an order of
attachment.
Section 426 of the Code of Civil procedure provides the
following:
SEC. 426. Granting order of attachment. A
judge or justice of the peace shall grant an order
of attachment when it is made to appear to the
judge or justice of the peace by the affidavit of
the plaintiff, or of some other person who knows
the facts, that a sufficient cause of action exists,
and that the case is one of those mentioned in
section four hundred and twenty-four, and 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 above all legal set-offs
or counterclaims is as much as the sum for which
the order is granted.
It will be seen that the legal provision just cited orders the
granting of a writ of attachment when it has been made to
appear by affidavit that the facts mentioned by law as
sufficient to warrant the issuance thereof, exist. Although
the law requires nothing more than the affidavit as a means
of establishing the existence of such facts, nevertheless,
such affidavit must be sufficient to convince the court of
their existence, the court being justified in rejecting the
affidavit if it does not serve this purpose and in denying the
petition for an order of attachment. The affidavit filed by
the petitioner, La Granja, Inc., must not have satisfied the
respondent judge inasmuch as he desired to ascertain or
convince himself of the truth of the facts alleged therein by
requiring evidence to substantiate them. The sufficiency or
insufficiency of an affidavit depends upon the amount of
credit given it by the judge, and its acceptance or rejection,
upon his sound discretion.
Hence, the respondent judge, in requiring the presentation
of evidence to establish the truth of the allegation of the
affidavit that the defendants had disposed or were disposing
of their property to defraud their creditors, has done
nothing more than exercise his sound discretion in
determining the sufficiency of the affidavit.
In view of the foregoing considerations, we are of the
opinion and so hold that the mere filing of an affidavit
executed in due form is not sufficient to compel a judge to
issue an order of attachment, but it is necessary that by such
affidavit it be made to appear to the court that there exists
sufficient cause for the issuance thereof, the determination
of such sufficiency being discretionary on the part of the
court.
Wherefore, the petition for a writ of mandamus is hereby
denied and the same is dismissed, with costs against the
petitioner. So ordered.
Malcolm, Abad Santos, Hull, and Imperial, JJ., concur.
EL BANCO ESPAOL-FILIPINO, plaintiff-appellant,
vs.
VICENTE PALANCA, administrator of the estate of
Engracio Palanca Tanquinyeng, defendant-appellant.
Aitken and DeSelms for appellant.
Hartigan and Welch for appellee.
STREET, J.:
This action was instituted upon March 31, 1908, by "El
Banco Espanol-Filipino" to foreclose a mortgage upon
various parcels of real property situated in the city of
Manila. The mortgage in question is dated June 16, 1906,
and was executed by the original defendant herein,
Engracio Palanca Tanquinyeng y Limquingco, as security
for a debt owing by him to the bank. Upon March 31, 1906,
the debt amounted to P218,294.10 and was drawing interest
at the rate of 8 per centum per annum, payable at the end of
each quarter. It appears that the parties to this mortgage at
that time estimated the value of the property in question at
P292,558, which was about P75,000 in excess of the
indebtedness. After the execution of this instrument by the
mortgagor, he returned to China which appears to have
been his native country; and he there died, upon January
29, 1810, without again returning to the Philippine Islands.
As the defendant was a nonresident at the time of the
institution of the present action, it was necessary for the
plaintiff in the foreclosure proceeding to give notice to the
defendant by publication pursuant to section 399 of the
Code of Civil Procedure. An order for publication was
accordingly obtained from the court, and publication was
made in due form in a newspaper of the city of Manila. At
the same time that the order of the court should deposit in
the post office in a stamped envelope a copy of the
summons and complaint directed to the defendant at his last
place of residence, to wit, the city of Amoy, in the Empire
of China. This order was made pursuant to the following
provision contained in section 399 of the Code of Civil
Procedure:
In case of publication, where the residence of a
nonresident or absent defendant is known, the
judge must direct a copy of the summons and
complaint to be forthwith deposited by the clerk
in the post-office, postage prepaid, directed to the
person to be served, at his place of residence
Whether the clerk complied with this order does not
affirmatively appear. There is, however, among the papers
pertaining to this case, an affidavit, dated April 4, 1908,
signed by Bernardo Chan y Garcia, an employee of the
attorneys of the bank, showing that upon that date he had
deposited in the Manila post-office a registered letter,
addressed to Engracio Palanca Tanquinyeng, at Manila,
containing copies of the complaint, the plaintiff's affidavit,
the summons, and the order of the court directing
publication as aforesaid. It appears from the postmaster's
receipt that Bernardo probably used an envelope obtained
from the clerk's office, as the receipt purports to show that
the letter emanated from the office.
The cause proceeded in usual course in the Court of First
Instance; and the defendant not having appeared, judgment
was, upon July 2, 1908, taken against him by default. Upon
July 3, 1908, a decision was rendered in favor of the
plaintiff. In this decision it was recited that publication had
been properly made in a periodical, but nothing was said
about this notice having been given mail. The court, upon
this occasion, found that the indebtedness of the defendant
amounted to P249,355. 32, with interest from March 31,
1908. Accordingly it was ordered that the defendant should,
on or before July 6, 1908, deliver said amount to the clerk
of the court to be applied to the satisfaction of the
judgment, and it was declared that in case of the failure of
the defendant to satisfy the judgment within such period,
the mortgage property located in the city of Manila should
be exposed to public sale. The payment contemplated in
said order was never made; and upon July 8, 1908, the
court ordered the sale of the property. The sale took place
upon July 30, 1908, and the property was bought in by the
bank for the sum of P110,200. Upon August 7, 1908, this
sale was confirmed by the court.
About seven years after the confirmation of this sale, or to
the precise, upon June 25, 1915, a motion was made in this
cause by Vicente Palanca, as administrator of the estate of
the original defendant, Engracio Palanca Tanquinyeng y
Limquingco, wherein the applicant requested the court to
set aside the order of default of July 2, 1908, and the
judgment rendered upon July 3, 1908, and to vacate all the
proceedings subsequent thereto. The basis of this
application, as set forth in the motion itself, was that the
order of default and the judgment rendered thereon were
void because the court had never acquired jurisdiction over
the defendant or over the subject of the action.
At the hearing in the court below the application to vacate
the judgment was denied, and from this action of the court
Vicente Planca, as administrator of the estate of the original
defendant, has appealed. No other feature of the case is
here under consideration than such as related to the action
of the court upon said motion.
The case presents several questions of importance, which
will be discussed in what appears to be the sequence of
most convenient development. In the first part of this
opinion we shall, for the purpose of argument, assume that
the clerk of the Court of First Instance did not obey the
order of the court in the matter of mailing the papers which
he was directed to send to the defendant in Amoy; and in
this connection we shall consider, first, whether the court
acquired the necessary jurisdiction to enable it to proceed
with the foreclosure of the mortgage and, secondly,
whether those proceedings were conducted in such manner
as to constitute due process of law.
The word "jurisdiction," as applied to the faculty of
exercising judicial power, is used in several different,
though related, senses since it may have reference (1) to the
authority of the court to entertain a particular kind of action
or to administer a particular kind of relief, or it may refer to
the power of the court over the parties, or (2) over the
property which is the subject to the litigation.
The sovereign authority which organizes a court determines
the nature and extent of its powers in general and thus fixes
its competency or jurisdiction with reference to the actions
which it may entertain and the relief it may grant.
Jurisdiction over the person is acquired by the voluntary
appearance of a party in court and his submission to its
authority, or it is acquired by the coercive power of legal
process exerted over the person.
Jurisdiction over the property which is the subject of the
litigation may result either from a seizure of the property
under legal process, whereby it is brought into the actual
custody of the law, or it may result from the institution of
legal proceedings wherein, under special provisions of law,
the power of the court over the property is recognized and
made effective. In the latter case the property, though at all
times within the potential power of the court, may never be
taken into actual custody at all. An illustration of the
jurisdiction acquired by actual seizure is found in
attachment proceedings, where the property is seized at the
beginning of the action, or some subsequent stage of its
progress, and held to abide the final event of the litigation.
An illustration of what we term potential jurisdiction over
the res, is found in the proceeding to register the title of
land under our system for the registration of land. Here the
court, without taking actual physical control over the
property assumes, at the instance of some person claiming
to be owner, to exercise a jurisdiction in rem over the
property and to adjudicate the title in favor of the petitioner
against all the world.
In the terminology of American law the action to foreclose
a mortgage is said to be a proceeding quasi in rem, by
which is expressed the idea that while it is not strictly
speaking an action in rem yet it partakes of that nature and
is substantially such. The expression "action in rem" is, in
its narrow application, used only with reference to certain
proceedings in courts of admiralty wherein the property
alone is treated as responsible for the claim or obligation
upon which the proceedings are based. The action quasi
rem differs from the true action in rem in the circumstance
that in the former an individual is named as defendant, and
the purpose of the proceeding is to subject his interest
therein to the obligation or lien burdening the property. All
proceedings having for their sole object the sale or other
disposition of the property of the defendant, whether by
attachment, foreclosure, or other form of remedy, are in a
general way thus designated. The judgment entered in these
proceedings is conclusive only between the parties.
In speaking of the proceeding to foreclose a mortgage the
author of a well known treaties, has said:
Though nominally against person, such suits are
to vindicate liens; they proceed upon seizure;
they treat property as primarily indebted; and,
with the qualification above-mentioned, they are
substantially property actions. In the civil law,
they are styled hypothecary actions, and their sole
object is the enforcement of the lien against
the res; in the common law, they would be
different in chancery did not treat the conditional
conveyance as a mere hypothecation, and the
creditor's right ass an equitable lien; so, in both,
the suit is real action so far as it is against
property, and seeks the judicial recognition of a
property debt, and an order for the sale of
the res. (Waples, Proceedings In Rem. sec. 607.)
It is true that in proceedings of this character, if the
defendant for whom publication is made appears, the action
becomes as to him a personal action and is conducted as
such. This, however, does not affect the proposition that
where the defendant fails to appear the action is quasi in
rem; and it should therefore be considered with reference to
the principles governing actions in rem.
There is an instructive analogy between the foreclosure
proceeding and an action of attachment, concerning which
the Supreme Court of the United States has used the
following language:
If the defendant appears, the cause becomes
mainly a suit in personam, with the added
incident, that the property attached remains
liable, under the control of the court, to answer to
any demand which may be established against the
defendant by the final judgment of the court. But,
if there is no appearance of the defendant, and no
service of process on him, the case becomes, in
its essential nature, a proceeding in rem, the only
effect of which is to subject the property attached
to the payment of the defendant which the court
may find to be due to the plaintiff. (Cooper vs.
Reynolds, 10 Wall., 308.)
In an ordinary attachment proceeding, if the defendant is
not personally served, the preliminary seizure is to, be
considered necessary in order to confer jurisdiction upon
the court. In this case the lien on the property is acquired by
the seizure; and the purpose of the proceedings is to subject
the property to that lien. If a lien already exists, whether
created by mortgage, contract, or statute, the preliminary
seizure is not necessary; and the court proceeds to enforce
such lien in the manner provided by law precisely as
though the property had been seized upon attachment.
(Roller vs. Holly, 176 U. S., 398, 405; 44 L. ed., 520.) It
results that the mere circumstance that in an attachment the
property may be seized at the inception of the proceedings,
while in the foreclosure suit it is not taken into legal
custody until the time comes for the sale, does not
materially affect the fundamental principle involved in both
cases, which is that the court is here exercising a
jurisdiction over the property in a proceeding directed
essentially in rem.
Passing now to a consideration of the jurisdiction of the
Court of First Instance in a mortgage foreclosure, it is
evident that the court derives its authority to entertain the
action primarily from the statutes organizing the court. The
jurisdiction of the court, in this most general sense, over the
cause of action is obvious and requires no comment.
Jurisdiction over the person of the defendant, if acquired at
all in such an action, is obtained by the voluntary
submission of the defendant or by the personal service of
process upon him within the territory where the process is
valid. If, however, the defendant is a nonresident and,
remaining beyond the range of the personal process of the
court, refuses to come in voluntarily, the court never
acquires jurisdiction over the person at all. Here the
property itself is in fact the sole thing which is impleaded
and is the responsible object which is the subject of the
exercise of judicial power. It follows that the jurisdiction of
the court in such case is based exclusively on the power
which, under the law, it possesses over the property; and
any discussion relative to the jurisdiction of the court over
the person of the defendant is entirely apart from the case.
The jurisdiction of the court over the property, considered
as the exclusive object of such action, is evidently based
upon the following conditions and considerations, namely:
(1) that the property is located within the district; (2) that
the purpose of the litigation is to subject the property by
sale to an obligation fixed upon it by the mortgage; and (3)
that the court at a proper stage of the proceedings takes the
property into custody, if necessary, and expose it to sale for
the purpose of satisfying the mortgage debt. An obvious
corollary is that no other relief can be granted in this
proceeding than such as can be enforced against the
property.
We may then, from what has been stated, formulated the
following proposition relative to the foreclosure proceeding
against the property of a nonresident mortgagor who fails
to come in and submit himself personally to the jurisdiction
of the court: (I) That the jurisdiction of the court is derived
from the power which it possesses over the property; (II)
that jurisdiction over the person is not acquired and is
nonessential; (III) that the relief granted by the court must
be limited to such as can be enforced against the property
itself.
It is important that the bearing of these propositions be
clearly apprehended, for there are many expressions in the
American reports from which it might be inferred that the
court acquires personal jurisdiction over the person of the
defendant by publication and notice; but such is not the
case. In truth the proposition that jurisdiction over the
person of a nonresident cannot be acquired by publication
and notice was never clearly understood even in the
American courts until after the decision had been rendered
by the Supreme Court of the United States in the leading
case of Pennoyer vs. Neff (95 U. S. 714; 24 L. ed., 565). In
the light of that decision, and of other decisions which have
subsequently been rendered in that and other courts, the
proposition that jurisdiction over the person cannot be thus
acquired by publication and notice is no longer open to
question; and it is now fully established that a personal
judgment upon constructive or substituted service against a
nonresident who does not appear is wholly invalid. This
doctrine applies to all kinds of constructive or substituted
process, including service by publication and personal
service outside of the jurisdiction in which the judgment is
rendered; and the only exception seems to be found in the
case where the nonresident defendant has expressly or
impliedly consented to the mode of service. (Note to Raher
vs. Raher, 35 L. R. A. [N. S. ], 292; see also 50 L .R. A.,
585; 35 L. R. A. [N. S.], 312
The idea upon which the decision in Pennoyer vs. Neff
(supra) proceeds is that the process from the tribunals of
one State cannot run into other States or countries and that
due process of law requires that the defendant shall be
brought under the power of the court by service of process
within the State, or by his voluntary appearance, in order to
authorize the court to pass upon the question of his personal
liability. The doctrine established by the Supreme Court of
the United States on this point, being based upon the
constitutional conception of due process of law, is binding
upon the courts of the Philippine Islands. Involved in this
decision is the principle that in proceedings in rem or quasi
in rem against a nonresident who is not served personally
within the state, and who does not appear, the relief must
be confined to the res, and the court cannot lawfully render
a personal judgment against him. (Dewey vs. Des Moines,
173 U. S., 193; 43 L. ed., 665; Heidritter vs. Elizabeth Oil
Cloth Co., 112 U. S., 294; 28 L. ed., 729.) Therefore in an
action to foreclose a mortgage against a nonresident, upon
whom service has been effected exclusively by publication,
no personal judgment for the deficiency can be entered.
(Latta vs. Tutton, 122 Cal., 279; Blumberg vs. Birch, 99
Cal., 416.)
It is suggested in the brief of the appellant that the
judgment entered in the court below offends against the
principle just stated and that this judgment is void because
the court in fact entered a personal judgment against the
absent debtor for the full amount of the indebtedness
secured by the mortgage. We do not so interpret the
judgment.
In a foreclosure proceeding against a nonresident owner it
is necessary for the court, as in all cases of foreclosure, to
ascertain the amount due, as prescribed in section 256 of
the Code of Civil Procedure, and to make an order
requiring the defendant to pay the money into court. This
step is a necessary precursor of the order of sale. In the
present case the judgment which was entered contains the
following words:
Because it is declared that the said defendant
Engracio Palanca Tanquinyeng y Limquingco, is
indebted in the amount of P249,355.32, plus the
interest, to the 'Banco Espanol-Filipino' . . .
therefore said appellant is ordered to deliver the
above amount etc., etc.
This is not the language of a personal judgment. Instead it
is clearly intended merely as a compliance with the
requirement that the amount due shall be ascertained and
that the evidence of this it may be observed that according
to the Code of Civil Procedure a personal judgment against
the debtor for the deficiency is not to be rendered until after
the property has been sold and the proceeds applied to the
mortgage debt. (sec. 260).
The conclusion upon this phase of the case is that whatever
may be the effect in other respects of the failure of the clerk
of the Court of First Instance to mail the proper papers to
the defendant in Amoy, China, such irregularity could in no
wise impair or defeat the jurisdiction of the court, for in our
opinion that jurisdiction rest upon a basis much more
secure than would be supplied by any form of notice that
could be given to a resident of a foreign country.
Before leaving this branch of the case, we wish to observe
that we are fully aware that many reported cases can be
cited in which it is assumed that the question of the
sufficiency of publication or notice in a case of this kind is
a question affecting the jurisdiction of the court, and the
court is sometimes said to acquire jurisdiction by virtue of
the publication. This phraseology was undoubtedly
originally adopted by the court because of the analogy
between service by the publication and personal service of
process upon the defendant; and, as has already been
suggested, prior to the decision of Pennoyer vs. Neff
(supra) the difference between the legal effects of the two
forms of service was obscure. It is accordingly not
surprising that the modes of expression which had already
been molded into legal tradition before that case was
decided have been brought down to the present day. But it
is clear that the legal principle here involved is not effected
by the peculiar language in which the courts have
expounded their ideas.
We now proceed to a discussion of the question whether
the supposed irregularity in the proceedings was of such
gravity as to amount to a denial of that "due process of law"
which was secured by the Act of Congress in force in these
Islands at the time this mortgage was foreclosed. (Act of
July 1, 1902, sec. 5.) In dealing with questions involving
the application of the constitutional provisions relating to
due process of law the Supreme Court of the United States
has refrained from attempting to define with precision the
meaning of that expression, the reason being that the idea
expressed therein is applicable under so many diverse
conditions as to make any attempt ay precise definition
hazardous and unprofitable. As applied to a judicial
proceeding, however, it may be laid down with certainty
that the requirement of due process is satisfied if the
following conditions are present, namely; (1) There must
be a court or tribunal clothed with judicial power to hear
and determine the matter before it; (2) jurisdiction must be
lawfully acquired over the person of the defendant or over
the property which is the subject of the proceeding; (3) the
defendant must be given an opportunity to be heard; and (4)
judgment must be rendered upon lawful hearing.
Passing at once to the requisite that the defendant shall
have an opportunity to be heard, we observe that in a
foreclosure case some notification of the proceedings to the
nonresident owner, prescribing the time within which
appearance must be made, is everywhere recognized as
essential. To answer this necessity the statutes generally
provide for publication, and usually in addition thereto, for
the mailing of notice to the defendant, if his residence is
known. Though commonly called constructive, or
substituted service of process in any true sense. It is merely
a means provided by law whereby the owner may be
admonished that his property is the subject of judicial
proceedings and that it is incumbent upon him to take such
steps as he sees fit to protect it. In speaking of notice of this
character a distinguish master of constitutional law has
used the following language:
. . . if the owners are named in the proceedings,
and personal notice is provided for, it is rather
from tenderness to their interests, and in order to
make sure that the opportunity for a hearing shall
not be lost to them, than from any necessity that
the case shall assume that form. (Cooley on
Taxation [2d. ed.], 527, quoted in Leigh vs.
Green, 193 U. S., 79, 80.)
It will be observed that this mode of notification does not
involve any absolute assurance that the absent owner shall
thereby receive actual notice. The periodical containing the
publication may never in fact come to his hands, and the
chances that he should discover the notice may often be
very slight. Even where notice is sent by mail the
probability of his receiving it, though much increased, is
dependent upon the correctness of the address to which it is
forwarded as well as upon the regularity and security of the
mail service. It will be noted, furthermore, that the
provision of our law relative to the mailing of notice does
not absolutely require the mailing of notice unconditionally
and in every event, but only in the case where the
defendant's residence is known. In the light of all these
facts, it is evident that actual notice to the defendant in
cases of this kind is not, under the law, to be considered
absolutely necessary.
The idea upon which the law proceeds in recognizing the
efficacy of a means of notification which may fall short of
actual notice is apparently this: Property is always assumed
to be in the possession of its owner, in person or by agent;
and he may be safely held, under certain conditions, to be
affected with knowledge that proceedings have been
instituted for its condemnation and sale.
It is the duty of the owner of real estate, who is a
nonresident, to take measures that in some way
he shall be represented when his property is
called into requisition, and if he fails to do this,
and fails to get notice by the ordinary
publications which have usually been required in
such cases, it is his misfortune, and he must abide
the consequences. (6 R. C. L., sec. 445 [p. 450]).
It has been well said by an American court:
If property of a nonresident cannot be reached by
legal process upon the constructive notice, then
our statutes were passed in vain, and are mere
empty legislative declarations, without either
force, or meaning; for if the person is not within
the jurisdiction of the court, no personal
judgment can be rendered, and if the judgment
cannot operate upon the property, then no
effective judgment at all can be rendered, so that
the result would be that the courts would be
powerless to assist a citizen against a nonresident.
Such a result would be a deplorable one. (Quarl
vs. Abbett, 102 Ind., 233; 52 Am. Rep., 662,
667.)
It is, of course universally recognized that the statutory
provisions relative to publication or other form of notice
against a nonresident owner should be complied with; and
in respect to the publication of notice in the newspaper it
may be stated that strict compliance with the requirements
of the law has been held to be essential. In Guaranty Trust
etc. Co. vs. Green Cove etc., Railroad Co. (139 U. S., 137,
138), it was held that where newspaper publication was
made for 19 weeks, when the statute required 20, the
publication was insufficient.
With respect to the provisions of our own statute, relative
to the sending of notice by mail, the requirement is that the
judge shall direct that the notice be deposited in the mail by
the clerk of the court, and it is not in terms declared that the
notice must be deposited in the mail. We consider this to be
of some significance; and it seems to us that, having due
regard to the principles upon which the giving of such
notice is required, the absent owner of the mortgaged
property must, so far as the due process of law is
concerned, take the risk incident to the possible failure of
the clerk to perform his duty, somewhat as he takes the risk
that the mail clerk or the mail carrier might possibly lose or
destroy the parcel or envelope containing the notice before
it should reach its destination and be delivered to him. This
idea seems to be strengthened by the consideration that
placing upon the clerk the duty of sending notice by mail,
the performance of that act is put effectually beyond the
control of the plaintiff in the litigation. At any rate it is
obvious that so much of section 399 of the Code of Civil
Procedure as relates to the sending of notice by mail was
complied with when the court made the order. The question
as to what may be the consequences of the failure of the
record to show the proof of compliance with that
requirement will be discussed by us further on.
The observations which have just been made lead to the
conclusion that the failure of the clerk to mail the notice, if
in fact he did so fail in his duty, is not such an irregularity,
as amounts to a denial of due process of law; and hence in
our opinion that irregularity, if proved, would not avoid the
judgment in this case. Notice was given by publication in a
newspaper and this is the only form of notice which the law
unconditionally requires. This in our opinion is all that was
absolutely necessary to sustain the proceedings.
It will be observed that in considering the effect of this
irregularity, it makes a difference whether it be viewed as a
question involving jurisdiction or as a question involving
due process of law. In the matter of jurisdiction there can
be no distinction between the much and the little. The court
either has jurisdiction or it has not; and if the requirement
as to the mailing of notice should be considered as a step
antecedent to the acquiring of jurisdiction, there could be
no escape from the conclusion that the failure to take that
step was fatal to the validity of the judgment. In the
application of the idea of due process of law, on the other
hand, it is clearly unnecessary to be so rigorous. The
jurisdiction being once established, all that due process of
law thereafter requires is an opportunity for the defendant
to be heard; and as publication was duly made in the
newspaper, it would seem highly unreasonable to hold that
failure to mail the notice was fatal. We think that in
applying the requirement of due process of law, it is
permissible to reflect upon the purposes of the provision
which is supposed to have been violated and the principle
underlying the exercise of judicial power in these
proceedings. Judge in the light of these conceptions, we
think that the provision of Act of Congress declaring that
no person shall be deprived of his property without due
process of law has not been infringed.
In the progress of this discussion we have stated the two
conclusions; (1) that the failure of the clerk to send the
notice to the defendant by mail did not destroy the
jurisdiction of the court and (2) that such irregularity did
not infringe the requirement of due process of law. As a
consequence of these conclusions the irregularity in
question is in some measure shorn of its potency. It is still
necessary, however, to consider its effect considered as a
simple irregularity of procedure; and it would be idle to
pretend that even in this aspect the irregularity is not grave
enough. From this point of view, however, it is obvious that
any motion to vacate the judgment on the ground of the
irregularity in question must fail unless it shows that the
defendant was prejudiced by that irregularity. The least,
therefore, that can be required of the proponent of such a
motion is to show that he had a good defense against the
action to foreclose the mortgage. Nothing of the kind is,
however, shown either in the motion or in the affidavit
which accompanies the motion.
An application to open or vacate a judgment because of an
irregularity or defect in the proceedings is usually required
to be supported by an affidavit showing the grounds on
which the relief is sought, and in addition to this showing
also a meritorious defense to the action. It is held that a
general statement that a party has a good defense to the
action is insufficient. The necessary facts must be averred.
Of course if a judgment is void upon its face a showing of
the existence of a meritorious defense is not necessary. (10
R. C. L., 718.)
The lapse of time is also a circumstance deeply affecting
this aspect of the case. In this connection we quote the
following passage from the encyclopedic treatise now in
course of publication:
Where, however, the judgment is not void on its
face, and may therefore be enforced if permitted
to stand on the record, courts in many instances
refuse to exercise their quasi equitable powers to
vacate a judgement after the lapse of the term ay
which it was entered, except in clear cases, to
promote the ends of justice, and where it appears
that the party making the application is himself
without fault and has acted in good faith and with
ordinary diligence. Laches on the part of the
applicant, if unexplained, is deemed sufficient
ground for refusing the relief to which he might
otherwise be entitled. Something is due to the
finality of judgments, and acquiescence or
unnecessary delay is fatal to motions of this
character, since courts are always reluctant to
interfere with judgments, and especially where
they have been executed or satisfied. The moving
party has the burden of showing diligence, and
unless it is shown affirmatively the court will not
ordinarily exercise its discretion in his favor. (15
R. C. L., 694, 695.)
It is stated in the affidavit that the defendant, Engracio
Palanca Tanquinyeng y Limquingco, died January 29,
1910. The mortgage under which the property was sold was
executed far back in 1906; and the proceedings in the
foreclosure were closed by the order of court confirming
the sale dated August 7, 1908. It passes the rational bounds
of human credulity to suppose that a man who had placed a
mortgage upon property worth nearly P300,000 and had
then gone away from the scene of his life activities to end
his days in the city of Amoy, China, should have long
remained in ignorance of the fact that the mortgage had
been foreclosed and the property sold, even supposing that
he had no knowledge of those proceedings while they were
being conducted. It is more in keeping with the ordinary
course of things that he should have acquired information
as to what was transpiring in his affairs at Manila; and upon
the basis of this rational assumption we are authorized, in
the absence of proof to the contrary, to presume that he did
have, or soon acquired, information as to the sale of his
property.
The Code of Civil Procedure, indeed, expressly declares
that there is a presumption that things have happened
according to the ordinary habits of life (sec. 334 [26]); and
we cannot conceive of a situation more appropriate than
this for applying the presumption thus defined by the
lawgiver. In support of this presumption, as applied to the
present case, it is permissible to consider the probability
that the defendant may have received actual notice of these
proceedings from the unofficial notice addressed to him in
Manila which was mailed by an employee of the bank's
attorneys. Adopting almost the exact words used by the
Supreme Court of the United States in Grannis vs. Ordeans
(234 U. S., 385; 58 L. ed., 1363), we may say that in view
of the well-known skill of postal officials and employees in
making proper delivery of letters defectively addressed, we
think the presumption is clear and strong that this notice
reached the defendant, there being no proof that it was ever
returned by the postal officials as undelivered. And if it was
delivered in Manila, instead of being forwarded to Amoy,
China, there is a probability that the recipient was a person
sufficiently interested in his affairs to send it or
communicate its contents to him.
Of course if the jurisdiction of the court or the sufficiency
of the process of law depended upon the mailing of the
notice by the clerk, the reflections in which we are now
indulging would be idle and frivolous; but the
considerations mentioned are introduced in order to show
the propriety of applying to this situation the legal
presumption to which allusion has been made. Upon that
presumption, supported by the circumstances of this case,
,we do not hesitate to found the conclusion that the
defendant voluntarily abandoned all thought of saving his
property from the obligation which he had placed upon it;
that knowledge of the proceedings should be imputed to
him; and that he acquiesced in the consequences of those
proceedings after they had been accomplished. Under these
circumstances it is clear that the merit of this motion is, as
we have already stated, adversely affected in a high degree
by the delay in asking for relief. Nor is it an adequate reply
to say that the proponent of this motion is an administrator
who only qualified a few months before this motion was
made. No disability on the part of the defendant himself
existed from the time when the foreclosure was effected
until his death; and we believe that the delay in the
appointment of the administrator and institution of this
action is a circumstance which is imputable to the parties in
interest whoever they may have been. Of course if the
minor heirs had instituted an action in their own right to
recover the property, it would have been different.
It is, however, argued that the defendant has suffered
prejudice by reason of the fact that the bank became the
purchaser of the property at the foreclosure sale for a price
greatly below that which had been agreed upon in the
mortgage as the upset price of the property. In this
connection, it appears that in article nine of the mortgage
which was the subject of this foreclosure, as amended by
the notarial document of July 19, 1906, the parties to this
mortgage made a stipulation to the effect that the value
therein placed upon the mortgaged properties should serve
as a basis of sale in case the debt should remain unpaid and
the bank should proceed to a foreclosure. The upset price
stated in that stipulation for all the parcels involved in this
foreclosure was P286,000. It is said in behalf of the
appellant that when the bank bought in the property for the
sum of P110,200 it violated that stipulation.
It has been held by this court that a clause in a mortgage
providing for a tipo, or upset price, does not prevent a
foreclosure, nor affect the validity of a sale made in the
foreclosure proceedings. (Yangco vs. Cruz Herrera and Wy
Piaco, 11 Phil. Rep., 402; Banco-Espaol Filipino vs.
Donaldson, Sim and Co., 5 Phil. Rep., 418.) In both the
cases here cited the property was purchased at the
foreclosure sale, not by the creditor or mortgagee, but by a
third party. Whether the same rule should be applied in a
case where the mortgagee himself becomes the purchaser
has apparently not been decided by this court in any
reported decision, and this question need not here be
considered, since it is evident that if any liability was
incurred by the bank by purchasing for a price below that
fixed in the stipulation, its liability was a personal liability
derived from the contract of mortgage; and as we have
already demonstrated such a liability could not be the
subject of adjudication in an action where the court had no
jurisdiction over the person of the defendant. If the plaintiff
bank became liable to account for the difference between
the upset price and the price at which in bought in the
property, that liability remains unaffected by the disposition
which the court made of this case; and the fact that the bank
may have violated such an obligation can in no wise affect
the validity of the judgment entered in the Court of First
Instance.
In connection with the entire failure of the motion to show
either a meritorious defense to the action or that the
defendant had suffered any prejudice of which the law can
take notice, we may be permitted to add that in our opinion
a motion of this kind, which proposes to unsettle judicial
proceedings long ago closed, can not be considered with
favor, unless based upon grounds which appeal to the
conscience of the court. Public policy requires that judicial
proceedings be upheld. The maximum here applicable is
non quieta movere. As was once said by Judge Brewer,
afterwards a member of the Supreme Court of the United
States:
Public policy requires that judicial proceedings
be upheld, and that titles obtained in those
proceedings be safe from the ruthless hand of
collateral attack. If technical defects are adjudged
potent to destroy such titles, a judicial sale will
never realize that value of the property, for no
prudent man will risk his money in bidding for
and buying that title which he has reason to fear
may years thereafter be swept away through
some occult and not readily discoverable defect.
(Martin vs. Pond, 30 Fed., 15.)
In the case where that language was used an attempt was
made to annul certain foreclosure proceedings on the
ground that the affidavit upon which the order of
publication was based erroneously stated that the State of
Kansas, when he was in fact residing in another State. It
was held that this mistake did not affect the validity of the
proceedings.
In the preceding discussion we have assumed that the clerk
failed to send the notice by post as required by the order of
the court. We now proceed to consider whether this is a
proper assumption; and the proposition which we propose
to establish is that there is a legal presumption that the clerk
performed his duty as the ministerial officer of the court,
which presumption is not overcome by any other facts
appearing in the cause.
In subsection 14 of section 334 of the Code of Civil
Procedure it is declared that there is a presumption "that
official duty has been regularly performed;" and in
subsection 18 it is declared that there is a presumption "that
the ordinary course of business has been followed." These
presumptions are of course in no sense novelties, as they
express ideas which have always been recognized. Omnia
presumuntur rite et solemniter esse acta donec probetur in
contrarium. There is therefore clearly a legal presumption
that the clerk performed his duty about mailing this notice;
and we think that strong considerations of policy require
that this presumption should be allowed to operate with full
force under the circumstances of this case. A party to an
action has no control over the clerk of the court; and has no
right to meddle unduly with the business of the clerk in the
performance of his duties. Having no control over this
officer, the litigant must depend upon the court to see that
the duties imposed on the clerk are performed.
Other considerations no less potent contribute to strengthen
the conclusion just stated. There is no principle of law
better settled than that after jurisdiction has once been
required, every act of a court of general jurisdiction shall be
presumed to have been rightly done. This rule is applied to
every judgment or decree rendered in the various stages of
the proceedings from their initiation to their completion
(Voorhees vs. United States Bank, 10 Pet., 314; 35 U. S.,
449); and if the record is silent with respect to any fact
which must have been established before the court could
have rightly acted, it will be presumed that such fact was
properly brought to its knowledge. (The Lessee of Grignon
vs. Astor, 2 How., 319; 11 L. ed., 283.)
In making the order of sale [of the real state of a
decedent] the court are presumed to have
adjudged every question necessary to justify such
order or decree, viz: The death of the owners; that
the petitioners were his administrators; that the
personal estate was insufficient to pay the debts
of the deceased; that the private acts of
Assembly, as to the manner of sale, were within
the constitutional power of the Legislature, and
that all the provisions of the law as to notices
which are directory to the administrators have
been complied with. . . . The court is not bound to
enter upon the record the evidence on which any
fact was decided. (Florentine vs. Barton, 2 Wall.,
210; 17 L. ed., 785.) Especially does all this
apply after long lapse of time.
Applegate vs. Lexington and Carter County Mining Co.
(117 U. S., 255) contains an instructive discussion in a case
analogous to that which is now before us. It there appeared
that in order to foreclose a mortgage in the State of
Kentucky against a nonresident debtor it was necessary that
publication should be made in a newspaper for a specified
period of time, also be posted at the front door of the court
house and be published on some Sunday, immediately after
divine service, in such church as the court should direct. In
a certain action judgment had been entered against a
nonresident, after publication in pursuance of these
provisions. Many years later the validity of the proceedings
was called in question in another action. It was proved from
the files of an ancient periodical that publication had been
made in its columns as required by law; but no proof was
offered to show the publication of the order at the church,
or the posting of it at the front door of the court-house. It
was insisted by one of the parties that the judgment of the
court was void for lack of jurisdiction. But the Supreme
Court of the United States said:
The court which made the decree . . . was a court
of general jurisdiction. Therefore every
presumption not inconsistent with the record is to
be indulged in favor of its jurisdiction. . . . It is to
be presumed that the court before making its
decree took care of to see that its order for
constructive service, on which its right to make
the decree depended, had been obeyed.
It is true that in this case the former judgment was the
subject of collateral , or indirect attack, while in the case at
bar the motion to vacate the judgment is direct proceeding
for relief against it. The same general presumption,
however, is indulged in favor of the judgment of a court of
general jurisdiction, whether it is the subject of direct or
indirect attack the only difference being that in case of
indirect attack the judgment is conclusively presumed to be
valid unless the record affirmatively shows it to be void,
while in case of direct attack the presumption in favor of its
validity may in certain cases be overcome by proof
extrinsic to the record.
The presumption that the clerk performed his duty and that
the court made its decree with the knowledge that the
requirements of law had been complied with appear to be
amply sufficient to support the conclusion that the notice
was sent by the clerk as required by the order. It is true that
there ought to be found among the papers on file in this
cause an affidavit, as required by section 400 of the Code
of Civil Procedure, showing that the order was in fact so
sent by the clerk; and no such affidavit appears. The record
is therefore silent where it ought to speak. But the very
purpose of the law in recognizing these presumptions is to
enable the court to sustain a prior judgment in the face of
such an omission. If we were to hold that the judgment in
this case is void because the proper affidavit is not present
in the file of papers which we call the record, the result
would be that in the future every title in the Islands resting
upon a judgment like that now before us would depend, for
its continued security, upon the presence of such affidavit
among the papers and would be liable at any moment to be
destroyed by the disappearance of that piece of paper. We
think that no court, with a proper regard for the security of
judicial proceedings and for the interests which have by
law been confided to the courts, would incline to favor such
a conclusion. In our opinion the proper course in a case of
this kind is to hold that the legal presumption that the clerk
performed his duty still maintains notwithstanding the
absence from the record of the proper proof of that fact.
In this connection it is important to bear in mind that under
the practice prevailing in the Philippine Islands the word
"record" is used in a loose and broad sense, as indicating
the collective mass of papers which contain the history of
all the successive steps taken in a case and which are
finally deposited in the archives of the clerk's office as a
memorial of the litigation. It is a matter of general
information that no judgment roll, or book of final record,
is commonly kept in our courts for the purpose of recording
the pleadings and principal proceedings in actions which
have been terminated; and in particular, no such record is
kept in the Court of First Instance of the city of Manila.
There is, indeed, a section of the Code of Civil Procedure
which directs that such a book of final record shall be kept;
but this provision has, as a matter of common knowledge,
been generally ignored. The result is that in the present case
we do not have the assistance of the recitals of such a
record to enable us to pass upon the validity of this
judgment and as already stated the question must be
determined by examining the papers contained in the entire
file.
But it is insisted by counsel for this motion that the
affidavit of Bernardo Chan y Garcia showing that upon
April 4, 1908, he sent a notification through the mail
addressed to the defendant at Manila, Philippine Islands,
should be accepted as affirmative proof that the clerk of the
court failed in his duty and that, instead of himself sending
the requisite notice through the mail, he relied upon
Bernardo to send it for him. We do not think that this is by
any means a necessary inference. Of course if it had
affirmatively appeared that the clerk himself had attempted
to comply with this order and had directed the notification
to Manila when he should have directed it to Amoy, this
would be conclusive that he had failed to comply with the
exact terms of the order; but such is not this case. That the
clerk of the attorneys for the plaintiff erroneously sent a
notification to the defendant at a mistaken address affords
in our opinion very slight basis for supposing that the clerk
may not have sent notice to the right address.
There is undoubtedly good authority to support the position
that when the record states the evidence or makes an
averment with reference to a jurisdictional fact, it will not
be presumed that there was other or different evidence
respecting the fact, or that the fact was otherwise than
stated. If, to give an illustration, it appears from the return
of the officer that the summons was served at a particular
place or in a particular manner, it will not be presumed that
service was also made at another place or in a different
manner; or if it appears that service was made upon a
person other than the defendant, it will not be presumed, in
the silence of the record, that it was made upon the
defendant also (Galpin vs. Page, 18 Wall., 350, 366;
Settlemier vs. Sullivan, 97 U. S., 444, 449). While we
believe that these propositions are entirely correct as
applied to the case where the person making the return is
the officer who is by law required to make the return, we
do not think that it is properly applicable where, as in the
present case, the affidavit was made by a person who, so
far as the provisions of law are concerned, was a mere
intermeddler.
The last question of importance which we propose to
consider is whether a motion in the cause is admissible as a
proceeding to obtain relief in such a case as this. If the
motion prevails the judgment of July 2, 1908, and all
subsequent proceedings will be set aside, and the litigation
will be renewed, proceeding again from the date mentioned
as if the progress of the action had not been interrupted.
The proponent of the motion does not ask the favor of
being permitted to interpose a defense. His purpose is
merely to annul the effective judgment of the court, to the
end that the litigation may again resume its regular course.
There is only one section of the Code of Civil Procedure
which expressly recognizes the authority of a Court of First
Instance to set aside a final judgment and permit a renewal
of the litigation in the same cause. This is as follows:
SEC. 113. Upon such terms as may be just the
court may relieve a party or legal representative
from the judgment, order, or other proceeding
taken against him through his mistake,
inadvertence, surprise, or excusable neglect;
Provided, That application thereof be made
within a reasonable time, but in no case
exceeding six months after such judgment, order,
or proceeding was taken.
An additional remedy by petition to the Supreme Court is
supplied by section 513 of the same Code. The first
paragraph of this section, in so far as pertinent to this
discussion, provides as follows:
When a judgment is rendered by a Court of First
Instance upon default, and a party thereto is
unjustly deprived of a hearing by fraud, accident,
mistake or excusable negligence, and the Court of
First Instance which rendered the judgment has
finally adjourned so that no adequate remedy
exists in that court, the party so deprived of a
hearing may present his petition to the Supreme
Court within sixty days after he first learns of the
rendition of such judgment, and not thereafter,
setting forth the facts and praying to have
judgment set aside. . . .
It is evident that the proceeding contemplated in this
section is intended to supplement the remedy provided by
section 113; and we believe the conclusion irresistible that
there is no other means recognized by law whereby a
defeated party can, by a proceeding in the same cause,
procure a judgment to be set aside, with a view to the
renewal of the litigation.
The Code of Civil Procedure purports to be a complete
system of practice in civil causes, and it contains provisions
describing with much fullness the various steps to be taken
in the conduct of such proceedings. To this end it defines
with precision the method of beginning, conducting, and
concluding the civil action of whatever species; and by
section 795 of the same Code it is declared that the
procedure in all civil action shall be in accordance with the
provisions of this Code. We are therefore of the opinion
that the remedies prescribed in sections 113 and 513 are
exclusive of all others, so far as relates to the opening and
continuation of a litigation which has been once concluded.
The motion in the present case does not conform to the
requirements of either of these provisions; and the
consequence is that in our opinion the action of the Court
of First Instance in dismissing the motion was proper.
If the question were admittedly one relating merely to an
irregularity of procedure, we cannot suppose that this
proceeding would have taken the form of a motion in the
cause, since it is clear that, if based on such an error, the
came to late for relief in the Court of First Instance. But as
we have already seen, the motion attacks the judgment of
the court as void for want of jurisdiction over the
defendant. The idea underlying the motion therefore is that
inasmuch as the judgment is a nullity it can be attacked in
any way and at any time. If the judgment were in fact void
upon its face, that is, if it were shown to be a nullity by
virtue of its own recitals, there might possibly be something
in this. Where a judgment or judicial order is void in this
sense it may be said to be a lawless thing, which can be
treated as an outlaw and slain at sight, or ignored wherever
and whenever it exhibits its head.
But the judgment in question is not void in any such sense.
It is entirely regular in form, and the alleged defect is one
which is not apparent upon its face. It follows that even if
the judgment could be shown to be void for want of
jurisdiction, or for lack of due process of law, the party
aggrieved thereby is bound to resort to some appropriate
proceeding to obtain relief. Under accepted principles of
law and practice, long recognized in American courts, a
proper remedy in such case, after the time for appeal or
review has passed, is for the aggrieved party to bring an
action to enjoin the judgment, if not already carried into
effect; or if the property has already been disposed of he
may institute suit to recover it. In every situation of this
character an appropriate remedy is at hand; and if property
has been taken without due process, the law concedes due
process to recover it. We accordingly old that, assuming the
judgment to have been void as alleged by the proponent of
this motion, the proper remedy was by an original
proceeding and not by motion in the cause. As we have
already seen our Code of Civil Procedure defines the
conditions under which relief against a judgment may be
productive of conclusion for this court to recognize such a
proceeding as proper under conditions different from those
defined by law. Upon the point of procedure here involved,
we refer to the case of People vs. Harrison (84 Cal., 607)
wherein it was held that a motion will not lie to vacate a
judgment after the lapse of the time limited by statute if the
judgment is not void on its face; and in all cases, after the
lapse of the time limited by statute if the judgment is not
void on its face; and all cases, after the lapse of such time,
when an attempt is made to vacate the judgment by a
proceeding in court for that purpose an action regularly
brought is preferable, and should be required. It will be
noted taken verbatim from the California Code (sec. 473).

The conclusions stated in this opinion indicate that the

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

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


G.R. No. L-49140 November 19, 1982
QUASHA ASPERILLA ANCHETA VALMONTE
PEA & MARCOS, petitioner,
vs.
THE HONORABLE CELESTINO P. JUAN,
FILIPINAS CARRIERS, INC., represented by its
President, FEDERICO TABORA, JR., APOLLO
KOKIN TRADING CO., LTD., et al., respondents.
Quasha, Asperilla, Ancheta, Valmonte, Pea and Marcos
Law Offices for petitioner.
Antonio V. Raquiza & Assoc. for respondent Eugene A.
Tan.
DE CASTRO, J.:
In this petition for certiorari and prohibition with
preliminary injunction, petitioner seeks the annulment of
the order of respondent Judge of the Court of First Instance
of Manila in Civil Case No. 105048 dated August 25, 1978
which approved the sale of the subject cargo and prays
instead that the writ of preliminary attachment over the
same property issued by Hon. Gregorio Pineda of the Court
of First Instance of Rizal in Civil Case No. 28710 be
allowed to remain in force.
It appears that on October 22, 1976, respondent Filipinas
Carriers, hereinafter referred to as Filcar, filed a complaint
for sum of money, enforcement of lien and damages with
the Court of First Instance of Manila, and the same was
assigned to Branch X, which was presided by respondent
Judge, against AB Charles Thorburn & Co., through its
receiver Sjoegren and Winstrand; Estero Shipping and
Trading; Bank of Melli of Iran, Jeddah Branch; Perstorp
AB; Skogshgarnas Industries; Ekman and Company AB;
and Abdullah Baroom. In the complaint which was
docketed as Civil Case No. 105048, Filcar alleged that it is
the disponent owner of a vessel, MV San Vicente, which
was duly registered with the Republic of the Philippines;
that on April 2, 1976, defendant Carles Thorburn & Co.
chartered said vessel by time charter for two or three
months for a voyage from Sweden to Jeddah, Saudi Arabia
at three thousand two hundred US dollars (US $3,200.00) a
day, that Abdullah Baroom was impleaded as defendant for
being the agent of Charles Thorburn & Co. at Jeddah and
Sjoegren and Winstrand of Sweden for being the receiver
of Charles Thorburn & Co.; that the vessel left Sweden
with construction materials as cargoes belonging to the
following shippers and consignees, namely, defendants
Bank of Melli of Iran, Jeddah Branch; the National
Commercial Bank, Jeddah Branch; Perstorp AB of
Perstorp, Sweden; Skogshgarnas Industries of Sweden;
Ekman and Company of Sweden; that after the second
month, Charles Thorburn failed to pay the daily hire, that
the vessel has been in Jeddah since May 19, 1976 and is
now in international waters; that in view of Thorburn's
failure to pay the charter hire, it had struck a lien through
the vessel's captain; that the charter party has expired but
the vessel has not yet discharged the cargoes due to
inadequate port facilities and failure of the shippers,
consignees and charterer to pay the charter hire; that Filcar
demanded from Charles Thorburn the payment of the
charter hire but Thorburn failed to pay and instead declared
bankruptcy and is now under receivership in Sweden; that
on demand, Baroom, the agent of Thorburn in Jeddah, and
the consignees and shippers refused to pay; that
consequently, Filcar was forced to exercise its lien on the
cargoes consistent with Clause 18 of the Charter Party,
notice of which was sent to defendants. The plaintiff thus
prayed, among others, that the defendants pay the daily
charter hire from the time they were in arrears until
payment is made and that the Court allow the sale of the
cargoes to satisfy its claims.
On November 25, 1976, Sierra Madre Wood Industries,
Inc., hereinafter called Sierra Madre, the alleged owner,
end-user and operator of MV San Vicente filed a motion to
intervene in the Court of First Instance of Manila (Civil
Case No. 105048) for the purpose of enforcing its lien over
the cargo, claiming that it had chartered the vessel to Filcar
for six months renewable every six months at agreed
charter hire fee (US $825,000.00 per year). Respondent
Judge allowed the intervention of Sierra Madre as plaintiff-
intervenor.
On December 2, 1976, Filcar filed an extra-parte motion to
sell the goods subject of lien, alleging among others, that
the MV San Vicente had arrived in the Philippines, and was
due for dry-docking and needed urgent repairs; and that the
goods subject of its lien were in danger of deteriorating and
losing their market value and if the goods were not sold
immediately, the plaintiff would have to pay a staggering
amount for warehousing so that the value of the goods
would not even be enough to pay for warehousing
expenses.
Thereafter, respondent Judge conducted hearings in Civil
Case No. 105048 and an ocular inspection of the vessel. On
April 18, 1977, respondent Judge, convinced that the vessel
as well as the cargoes were in a very bad condition, issued
an order, the dispositive portion of which reads:
WHEREFORE, in view of all the
above and due to the condition of the
vessel and/or its cargo, while we are
not convinced as asserted that Section
17, Rule 14 and 15 of the Rules of
Court, do not apply, for we still believe
that one of the four modes of service
must at least be observed, yet on the
ground of extreme necessity, this Court
believes that somehow, somebody must
act boldly in order to protect the
interest of parties and of the owner of
the vessel which is believed to be the
 government of the Philippines. On the
ground of extreme necessity and partly
by virtue of the provisions of Rule 57,
Section 1 1, the cargo on board the MV
San Vicente, is ordered sold privately,
so that the vessel may immediately be
sent for drydock, subject to the
following conditions:
l. That the negotiations for the sale of
the cargo shall be the sole
responsibility of plaintiff Filcar subject
to the supervision by this Court and the
intervention of plaintiff-intervenor, the
Sierra Madre Wood Industries, Inc.;
2. That the Court and the plaintiff-
intervenor be fully informed regarding
the progress of the negotiations and that
the sale shall not be finalized without
first securing the approval of this Court
is to the selling price;
3. The proceeds of the sale shall be
deposited with a banking institution as
approved by this Court and shall be
disposed of only upon order of this
Court, subject to the first lien of
plaintiff-intervenor; and
4. Defendant AB Charles Thorburn &
Co., etc. shall be notified of the Order
of this Court together with a copy of
the amended complaint and the
complaint in intervention, thru the
Department of Foreign Affairs, and the
Philippine Embassy at Jeddah, Saudi
Arabia. Proof of Service shall be
submitted to this Court. After such time
afforded the defendant, in order to
enable them to answer or appear in this
Court or make any claim whatsoever,
and still they fail to make any
manifestation, hearing of this case shall
resume regarding the final disposition
of the proceeds to all concerned.
On June 27, 1977, respondent Judge approved tentatively
the sale of the cargo to Bengzon's Industries. This Order
was followed by another dated July 19, 1977, approving the
Deed of Absolute Sale of the cargo. 1
On August 15, 1977, petitioner law firm filed with
respondent Judge a special appearance for defendant
Ahmed Baroom contesting the Court's jurisdiction over
Baroom's person and property and a Motion to Dismiss on
the ground that the Court had not acquired jurisdiction over
Baroom's 'person or property aboard the MV San Vicente. 2
On August 29, 1977, respondent Judge issued an Order
directing petitioner law firm to show on or before
September 20, 1977 a written authorization signed by its
client, Baroom, "since the latter is a foreigner". 3
On November 15, 1977, petitioner, as Baroom's counsel,
filed an answer with compulsory counterclaim, claiming
that defendant Baroom is not an agent of Charles Thorburn
since the cargoes belong to him, and denying the validity of
plaintiff's lien over the cargo. Petitioner reiterates the
defense that plaintiff's action being in personam involving
defendant who is not a resident within the territorial
jurisdiction of the Court, and there is no showing in the
records that the provisions of Section 17, Rule 14 in
relation to Section 1, Rule 57, of the Rules of Court have
been complied with to convert the action in rem, the Court
had no jurisdiction over the case. Baroom, through
petitioner, prayed that plaintiff be directed to deliver the
cargoes to Jeddah, pay damages corresponding to the full
value of the goods and to the lost income and profits he
could have realized had plaintiff delivered the cargo to him.
Baroom, likewise, filed a cross-claim against Sierra Madre,
plaintiff-intervenor.
On January 23, 1978, petitioner filed with respondent Judge
a manifestation and motion that it be "allowed to withdraw
from this case and charging lien be recorded against the
properties of Mr. Baroom now aboard MV San Vicente for
unpaid professional fees and reimbursement expenses. " 4
Thereafter, on February 17, 1978, petitioner filed before the
Court of First Instance of Rizal a complaint with a prayer
for a writ of preliminary attachment for the recovery of
professional fees and reimbursement of expenses against
Baroom whom it alleged to have represented in Civil Case
No. 105048, CFI, Manila. The case was docketed as Civil
Case No. 28710 and the same was assigned to Branch XXI
presided over by Judge Gregorio C. Pineda.
By virtue of the order dated February 28, 1978 issued by
Judge Pineda in the new case, petitioner obtained a writ of
preliminary attachment against Baroom's alleged cargoes
which is the subject matter in Civil Case No. 105048.
Meanwhile, in Civil Case No. 105048, on August 2, 1978,
respondent Judge gave Attys. Quasha and Valmonte ten
(10) days from receipt of order within which to explain
why they should not be held in contempt of court for filing
a case entitled "Quasha Asperilla Ancheta Valmonte Pea
and Marcos vs. AlSayed Abdullah Mohammed Baroom"
docketed as Civil Case No. 28710 in the Court of First
Instance of Rizal, Branch XXI, where they obtained a writ
of preliminary attachment over the cargoes, which they
knew to be subject matter of Civil Case No. 105048
pending before his sala." 5 A compliance with said order
was filed on August 24, 1978, with petitioner alleging that
their cause of action against Baroom was for payment of
professional fees and reimbursement of expenses while
Case No. 105048 before Judge Juan was for alleged unpaid
charter hire fees.
On August 25, 1978, respondent Judge issued an order
approving the sale of the cargo in question to Apollo Kokin
Trading Co., Ltd. In accordance with the earlier order of
April 28, 1977, respondent Judge directed the deposit of the
sale proceeds with a banking institution to be approved by
the Court and its disposition only on orders of the Court. 6
On September 8, 1978, Filcar filed with the Court of First
Instance of Rizal an urgent omnibus motion to be allowed
to appear and to dismiss the case and to lift the writ of
preliminary attachment and set aside the order to auction
the cargo, attaching thereto the order of respondent Judge
dated August 25, 1978, approving the sale in favor of
Apollo Kokin Trading Co., Ltd. of the subject cargo, the
proceeds of which after deducting all expenses shall be
deposited with the court.
Thus, petitioner, on October 23, 1978, filed before this
Court the instant petition. Petitioner assails the order of
August 25, 1978, not the earlier order of April 28, 1977
approving the sale in favor of Apollo Kokin Trading Co.,
Ltd. of the questioned cargo for having been issued in
grave abuse of discretion considering that subject cargo
was allegedly earlier attached by the Court of First Instance
of Rizal.
Without giving due course to the petition and pending the
filing of comments by respondents, this Court issued on
October 24, 1978 a temporary restraining order,
enjoining respondents to immediately
cease and desist from taking,
unloading, transferring, conveying,
transporting or disposing of the cargoes
or any part thereof aboard the MC San
Vicente and Dong Myung, * or from
taking the cargoes away, subject matter
of Civil Case No. 105048 entitled
'Filipinas Carriers, Inc. vs. AB Charles
Thorburn & Co., et al.' of the Court of
First Instance of Manila, Branch X." 7
On October 30, 1978, petitioner filed a manifestation and
motion informing this Court that notwithstanding the
restraining order, the MV Don Myung, with the cargo
aboard left surreptitiously at midnight of October 24, 1978
without the assistance of any pilot in violation of Harbor
rules. The goods were then allegedly sold for US
$220,200.43 under irrevocable letters of credit issued by
the Fuji Bank of Osaka, Japan. Petitioner, thus, prayed that
several persons, namely, Mr. Federico Tabora, Jr.,
President of Filipinas Carriers, Inc., Mr. Gregorio
Gatchalian, allegedly operations manager of the American
Steamship Agencies, Inc. being the agent representing the
MV Dong Myung, Lt. JG Godofredo Orcullo of the
Operations Center and Seaman 1st Class Avelino Lontoc of
the Philippine Coast Guard be cited for contempt.
In the meanwhile, a compromise agreement dated October
16, 1978 and filed on November 2, 1978 wherein Filcar
assigned its interests and rights in the proceeds of the sale
of the subject cargoes to Sierra Madre which the latter
accepted was approved by the respondent court in its
decision of November 3, 1978. An amended petition was
thus filed in this Court impleading Sierra Madre as partly
respondent in his case with prayer that a writ of
garnishment be issued on the proceeds of the sale of the
cargoes which are in the possession of Sierra Madre, and an
order be issued directing Sierra Madre and all those to
whom such proceeds may subsequently be reassigned to
deliver to petitioner such portion of the proceeds of the sale
as would satisfy the attorney's lien in the interest of justice.
Coming back to the omnibus motion of Filcar for the lifting
of the preliminary attachment issued by the Court of First
Instance of Rizal, the said court on December 7, 1978
dismissed petitioner's case and lifted the preliminary
attachment issued therein. Upon motion for reconsideration
dated April 7, 1979, the said preliminary attachment was
reinstated by the Court of First Instance of Rizal in its order
dated July 5, 1979. 8
After several pleading were filed in this Court, We gave
due course to the petition. 9
Petitioner contends that respondent court did not acquire
jurisdiction neither over any of the defendants as they have
not voluntarily submitted themselves to the jurisdiction of
respondent court, nor over the res, since there had been no
seizure of the property under a legal process, as by a writ of
attachment or other process of similar effect. The instant
case is allegedly neither a proceeding in rem as would place
the property under its potential power citing the leading
case of Banco Espaol v. Palanca 10 which held:
Jurisdiction over the property which is
the subject of litigation may result
either from a seizure of the property
under legal process, whereby it is
brought into the actual custody of the
law, or it may result from the institution
of legal proceedings wherein under
special provisions of law, the power of
the court over the property is
recognized and made effective. In the
latter case the property, though at all
times within the potential power of the
court, may never be taken into actual
custody at all. An illustration of the
jurisdiction acquired by actual seizure
is found in attachment proceedings,
where the property is seized at the
beginning of the action, or some
subsequent stage of its progress and
held to abide the final event of the
litigation. An illustration of what we
term potential jurisdiction over
the res is found in the proceeding to
register the title of land under our
system for the registration of land. Here
the court, without taking actual
 physical control over the property
assumes, at the instance of some person
claiming to be the owner, to exercise a
jurisdiction in rem over the property
and to adjudicate the title in favor of
the petitioner against all the world.
Claiming that it was the Court of First Instance of Pasig
that first acquired jurisdiction over the res to the exclusion
of respondent court, petitioner insists that the latter court's
act is undue interference which cannot be countenanced.
There is no pretense that respondent court has jurisdiction
over the cause of action. It is much too obvious to merit a
fuller discussion. Suffice it to say that an action based upon
an oral contract of transportation of goods by water is an
action in admiralty which comes under the original and
exclusive jurisdiction of the Court of First Instance
irrespective of the value of the cargo. 11
As to the person of Baroom, it is to be conceded that at the
initial stage of the proceeding in the Court of First Instance
of Manila prior to the issuance of the order of April 28,
1977 directing the sale of the property and petitioner's
firing of various pleadings, said court did not have
jurisdiction over Baroom. Baroom was a non-resident alien
and he was beyond the reach of the court's legal processes.
But since the action is brought principally for the
enforcement of maritime lien against the property of
defendants who failed to pay the charter hire fee, and
therefore the same is in the nature and character of a
proceeding quasi in rem, jurisdiction over defendant
Baroom is not essential. An action quasi in rem has been
defined as "an action between parties where the direct
object is to reach and dispose of property owned by them or
of some interest therein." As such the properties allegedly
owned by him are primarily made liable. In elucidating the
characteristic of a proceeding where a non-resident
defendant fails to appear, this Court in the aforecited
leading case of Banco Espaol Filipino v. Palanca said:
If however, the defendant is a non-
resident and, remaining beyond the
range of the personal process of the
court, refuses to come in voluntarily,
the court never acquires jurisdiction
over the person at all. Here the property
itself is in fact the sole thing which is
impleaded and is the responsible object
which is the subject of the exercise of
judicial power. It follows that the
jurisdiction of the court in such case is
based exclusively on the power which,
under the law, it possesses over the
property; and any discussion relative to
the jurisdiction of the court over the
person of the defendant is entirely apart
from the case.
The foregoing ruling was applied in Mabanag vs.
Ganimore: 12
As a general rule, when the defendant
is not residing and is not found in the
Philippines, the Philippine courts
cannot try any case against him because
of impossibility of acquiring
jurisdiction over his person, unless he
voluntarily appears in court. But when
the action ... is intended to seize or
dispose of any property, real or
personal, of the defendant, located in
the Philippines, it may validly be tried
by the Philippine courts, for then, they
have jurisdiction over the res, i.e. ... the
property of the defendant, and their
jurisdiction over the person of the non-
resident is not essential ... . (Citing I
Moran's Comments on the Rules of
Court, 2d Ed., 105).
At any rate, defendant Baroom filed later, aside from a
motion to dismiss, an answer with counterclaim praying
that plaintiff be directed to deliver the cargoes of defendant
Baroom to Jeddah and to pay damages, etc. and a cross-
claim against Sierra Madre, thereby abandoning any
question on jurisdiction over the person and submitting
himself to the jurisdiction of the court. In Tenchavez vs.
Escao, 13 this Court quoted with approval the ruling
in Merchant's Heat and Light Co. vs. Clow & Sons, 204 U.
S. 286, 51 Law Ed. 488:
We assume that the defendant lost no
rights by pleading to the merits, as
required, after saving its rights.
Harkness vs. Hyde, 98 U.S. 476, 25 L.
ed. 237; Southern P. Co. vs. Denton,
146 U.S. 202, 36 L. ed. 943, 13 Sup.
Ct. Rep. 44. But by setting up its
counterclaim the defendant became a
plaintiff in its turn, invoked the
jurisdiction of the court in same action,
and, by invoking submitted to it. It is
true that the counterclaim seems to
have arisen wholly out of the same
transaction that the plaintiff sued upon,
and so to have been in recoupment
rather than in set-off proper. But, even
at common law, since the doctrine has
been developed, as demand in
recoupment is recognized as a cross
demand, as distinguished from a
defense. Therefore, although there has
been a difference of opinion as to
whether a defendant, by pleading it, is
concluded by the judgment from
bringing a subsequent suit for the
residue of his claim, a judgment in his
favor being impossible at common law,
the authorities agree that he is not
 concluded by the judgment if he does
not plead his cross demand, and that
whether he shall do so or not is left
wholly to his choice. Davis vs. Hedges,
L.R. 6 Q.B. 687; Mondel vs. Steel, 8
Mees & W. 858, 872; O'Connor vs.
Varney, 10 Gray, 231. This single fact
shows that the defendant, if he elects to
sue upon his claim in the action against
him, assumes the position of an actor
and must take the consequence. The
right to do so is of modern growth, and
is merely a convenience that saves
bringing another suit, not a necessity of
the defense.
In the aforecited case, the Court explains that the rule is
such because "it cannot look with favor upon a party
adopting not merely inconsistent, but actually
contradictory; positions in one and the same suit, claiming
that a court has no jurisdiction to render judgment against
it, but has such jurisdiction to give a decision its favor. 14
It may be noted that if the defendant voluntarily appears,
the action becomes as to him a personal action and is
conducted as such. Even then, the court does not lose its
jurisdiction over the res, assuming that it has indeed
jurisdiction over the res. The res still remains under its
control and disposition.
As regards jurisdiction over the res, We hold that
respondent acquires jurisdiction over it. Where a property
is burdened by a lien, a writ of attachment is no longer
necessary in order that jurisdiction over the property may
be obtained by the court. In the same cited case by
petitioner, in the Banco Espaol case, it was clarified:
In an ordinary attachment proceeding,
if the defendant is not personally
served, the preliminary seizure is to be
considered necessary in order to confer
jurisdiction upon the court. In this case
the lien on the property is acquired by
seizure; and the purpose of the
proceeding is to subject the property to
that lien. If a lien already exists,
whether created by mortgage, contract,
or statute, the preliminary seizure is not
necessary, and the court proceeds to
enforce such lien in the manner
provided by law precisely as though the
property had been seized upon
attachment. (Roller v. Holly, 176 U.S.
398, 405; 44 L. ed. 520).
The reason for the rule is obvious. An attachment
proceeding is for the purpose of creating a lien on the
property to serve as security for the payment of the
creditors' claim. Hence, where a lien already exists, as in
this case a maritime lien, the same is already equivalent to
an attachment. Moreover, since the property subject of the
action for the enforcement of the maritime liens was
already in the possession of private respondent, there is no
need for seizure for the court to obtain jurisdiction over the
rest.
Where a party in actual possession of
the res subject to the lien is before the
court, the res is within the jurisdiction
of the court for the enforcement of the
lien A suit may be maintained to
foreclose a lien on property within the
jurisdiction of the court, although some
interest or claim therein is held by a
non-resident. 15
The other argument posed by petitioner to challenge
respondents' right over the property is that there is no
privity of contract between Baroom and respondents. It
avers that Baroom is not merely the agent of Thorburn but
himself the owner of some of the cargoes and whose
contract to ship the same is with sub-charterer Thorburn. It
avers further that neither Thorburn could attach a lien on
the property since Baroom had allegedly paid fully for the
shipment even before the vessel sailed, as evidenced by the
clean freight pre-paid bills of lading.
Claiming right over the cargo to answer for the unpaid
professional fees, petitioner submits to this Court the
required written authority from Baroom claiming that due
to snag in communication and unreliability of the mailing
system it did not receive the documents from its client on
time.
The foregoing entails determination of facts. It would be
highly irregular if this Court would have to resolve those
questions, this Court not being a trier of facts. The several
documents mentioned by petitioner and attached to its
pleadings before this Court were never presented before the
lower court. After Baroom had abandoned his defense
which created the presumption that he had no defense, that
he is not the owner of the cargo, petitioner should have
pursued the same argument before respondent court in
claiming the alleged professional fee. This is in accordance
with Article 1177 of the New Civil Code which provides:
Art. 1177. The creditors having
pursued the property in possession of
the debtor to satisfy their claims may
exercise all the rights and bring all the
actions of the latter for the same
purpose, save those which are inherent
in his person, they may also impugn the
acts which the debtor may have done to
defraud them.
Indeed, petitioner should have maintained its action in
respondent's court. After all, a court which has in its
possession, control or equivalent dominion, property or
funds involved in litigation may exercise exclusive
jurisdiction over such property or funds to determine the he was the agent of Charles Thorburn
rights therein, such as questions respecting the title, and the three (3) consignee banks, the
possession or control, management and disposition thereof application was rejected due to conflict
and another court of concurrent or coordinate jurisdiction of interest.
cannot interfere with such possession or control. 16 The
rights to be determined by said court necessarily include 4. The pre-paid freight representation
the attorney's fees due to the lawyers who represented the of Baroom is false because the
parties. Significantly, the lower court which undoubtedly condition of the L/C issued by the 3
has in its favor the presumption of regularity and which consignee banks provides a C/F
was never restrained by this Court from proceeding with arrangement which means payment of
the ease issued an order dated January 25, 1979 17 making the goods, insurance and freight can
the following findings of fact: only be made upon physical delivery of
the goods in Jeddah.
1. Thorburn fails to pay the freight so
that respondent Filcar had the right to 5. Baroom intervened in the case
impose its lien on the cargo including (before respondent court) using the
sub-freights. Quasha law office. He later withdrew
upon knowing he has no defense. In
Paragraph 16 of the fact, he did not even give Quasha
time charter written authority to appear for him as
contract provides: his lawyer.

That the owners 6. The court of respondent Judge "has

shall have a lien jurisdiction over the person of
upon all cargoes defendant and subject cargo of the
and all sub-freights vessel.
for any amounts
due under this 7. The Quasha law office is not entitled
Charter including to any claim for attorney's lien
General Average
contributions and
the charterers to Prescinding from the foregoing, We find no abuse of
have a lien on the discretion in issuing the questioned order of August 25,
ship for all monies 1978, and therefore the instant petition should be
paid in advance and dismissed. It could not be claimed that the act of
not earned, and respondent Judge in issuing the said order amounts to
any'overpaid hire interference with the writ of attachment dated February 28,
or excess deposit to 1978 issued by Judge Pineda, for by the time the said writ
be returned at once. was issued, respondent Judge had already control and
Charterers will not disposition of the case. The order of August 25, 1978 was
suffer nor permit to but an implementation of the earlier order of April 28, 1977
be continued, any directing the sale of the cargoes on the ground of extreme
lien or necessity as the cargoes as found by respondent Judge upon
encumbrance ocular inspection were in danger of deteriorating and losing
incurred by them or their market value and the vessel was also in danger of
their agents, which sinking. By then, respondent Judge had also issued the
might have priority order dated July 19, 1977 approving a Deed of Sale of
over the title and subject cargoes.
interest of the
owners of the It should be noted that at the time petitioner filed the action
vessel. before Judge Pineda, it has already submitted itself to the
jurisdiction of respondent court and in fact its "charging
2. Thorburn executed a liner term lien" which is the same cause of action before Judge Pineda
contract with Baroom who was playing was still pending before respondent court. Pending also
the double role of agent of said before respondent Judge were petitioner's answer with
Thorburn and agent of three consignee counterclaim, cross claim, motion to dismiss and motion to
banks in Jeddah. withdraw from the case.

3. Baroom appealed to Filcar to be its Petitioner may not enforce its attorney's lien, which
agent, but when it was discovered that accordingly is based on Section 37 of Rule 138 which
provides:
 Sec. 37. Attorney's lien. An attorney
shall have a lien upon the funds,
documents and papers of his client
which have lawfully come into his
possession and may retain the same
until his lawful fees and disbursements
have been paid and may apply such
funds to the satisfaction thereof. He
shall also have a lien to the same extent
upon all judgments for the payment of
money, and executions issued in
pursuance of such judgments, which he
has secured in a litigation of his client,
from and after the time when he shall
have caused a statement's of his claim
of such lien to be entered upon the
records of the court rendering such
judgment, or issuing such execution,
and shad have caused written notice
thereof to be delivered to his client and
to the adverse party; and he shall have
the same right and power over such
judgments and executions as his client
would have to enforce his lien and
secure the payment of his just fees and
disbursements.
Based on the foregoing provision, the liens for attorney's
fees and expenses apply only on the funds or documents of
clients which lawfully come to the possession of the
counsel (called retaining lien) and to all judgments secured
by the counsel (called charging lien). In his manifestation
and motion before respondent Judge, petitioner is claiming
for his charging lien But it should be noted that at the time
of its filing, the orders of April 27, 1977 ordering the sale
of the cargoes and July 19, 1977 approving the Deed of
Sale of cargoes were already in existence and both were in
fact in favor of private respondent. It is curious to note that
petitioner never questioned said orders on appeal or by a
special civil action. Petitioner's client in fact even
abandoned its case. Hence, having no favorable judgment
that could be anticipated, the charging lien has no leg to
stand on. Perhaps because it was aware of its predicament
that petitioner filed an independent action for recovery of
its professional fees and for reimbursement of expenses
which would have been proper, except that the ownership
of the property sought to be attached was questionable and
the same was already sold by respondent court. But just as
We had said before, petitioner should have filed its claim
for professional fees in respondent's court for said court has
the exclusive jurisdiction to determine the real owner of the
cargoes. We hasten to add, however, that the action should
not be for a charging lien, but a simple complaint in
intervention for recovery of professional services and
reimbursement of expenses, thus avoiding multiplicity of
suits.
On October 24, 1978, We issued a temporary restraining
order enjoining the disposition or unloading of the cargoes.
It turned out, however, that before the said order could be
served upon the private respondents, all the cargoes subject
of the petition had been loaded into the M.V. Dong Myung,
of which this Court has no jurisdiction being a foreign
vessel. When the vessel sailed and the cargoes eventually
sold, everything became fait accompli and the case before
Us moot and academic.
Petitioner prays for the garnishment of the proceeds, but to
allow the same, there must first be a determination of the
ownership of the cargo. Again, We say We are not in a
position to do so. Petitioner failed to file motion for
reconsideration of the order of August 25, 1978 approving
the sale of the cargo, and it abandoned its own case before
respondent Judge. The result of its negligence in allowing
considerable period to lapse before claiming right over the
cargo, and resorting to injunctive relief must be borne by it.
Petitioner is not entitled to any relief and the instant
petition must be dismissed. We shall also dismiss
petitioner's charge of contempt against respondent since as
We said before, before the temporary restraining or order
could be served everything was already fait accompli .
Likewise, We also dismiss the respondents' charge against
petitioner for direct contempt for allegedly omitting
material facts vital to the fun appreciation of this Court. In
De Midgely vs. Ferandos, 18 this Court ruled that such
tactic is generally tolerated because understandably lawyers
are apt to slant the presentation of their clients' case so that
they would have favorable judgments. "Courts are not
deceived by the exaggerations and distortions in a counsel's
lopsided submission of his client's case especially where, as
in this case, the alert opposing counsel calls the court's
attention to that fact. "
Indeed, "contempt of court presupposes a contumacious
attitude, a flouting of arrogant belligerence, a defiance of
the court. 19 It is an offense against the authority and
dignity of the court.
WHEREFORE, the petition is hereby dismissed.
SO ORDERED.
Makasiar (Chairman), Aquino, Concepcion, Jr. and
Guerrero, JJ., concur.

G.R. Nos. 65957-58 July 5, 1994
ELEAZAR V. ADLAWAN and ELENA S.
ADLAWAN, petitioners,
vs.
Hon. Judge RAMON AM. TORRES, as Presiding
Judge of Branch 6, Regional Trial Court Cebu City,
ABOITIZ & COMPANY, INC. and THE
PROVINCIAL SHERIFFS OF CEBU, DAVAO,
RIZAL and METRO MANILA,
Respectively, respondents.
Pablo P. Garcia for petitioners.
Isaias P. Dicdican and Sylva G. Aguirre-Paderanga for
Aboitiz & Co., Inc.
QUIASON, J.:
This is a petitioner for certiorari and mandamus with
preliminary injunction or restraining order to nullify: (1)
the Order dated September 14, 1983 of respondent Judge
Ramon Am. Torres of the Regional Trial Court, Branch 6,
Cebu City, in Civil Case No. CEB-1185 and the Order
dated September 26, 1983 of Judge Emilio A. Jacinto of
Branch 23 of the same court in Civil Case No. CEB-1186,
which granted the motion for the issuance of writs of
preliminary attachment for the seizure of the property of
petitioners by respondent Provincial Sheriffs; and (2) the
Order dated December 12, 1983 of respondent Judge
Ramon Am. Torres in the consolidated cases, Civil Case
No. CEB-1185 and Civil Case No. CEB-1186.
I damages in connection with the seizure of his property
In a complaint dated April 24, 1982 filed with the Court of
First Instance of Cebu, now Regional Trial Court, (Civil
Case No. R-21761), respondent Aboitiz and Company, Inc.
(Aboitiz) sought to collect from petitioners a sum of money
representing payments for: (1) the unpaid amortizations of
a loan; (2) technical and managerial services rendered; and
(3) the unpaid installments of the equipment provided by
respondent Aboitiz to petitioners (Rollo, p. 37).
Acting on the ex parte application for attachment, the
Executive Judge of the Court of First Instance of Cebu,
issued on May 14, 1982, an order directing the issuance of
the writ of preliminary attachment against the property of
petitioners upon the filing by respondent Aboitiz of an
attachment bond.
Subsequently, the case was raffled to Branch 11 of the
Court of First Instance of Cebu, which issued a writ of
attachment addressed to the Provincial Sheriffs of Cebu and
the City Sheriff of Davao City. It was the Sheriff of Davao
City who enforced the writ of attachment, resulting in the
seizure of heavy construction equipment, motor vehicle
spare parts, and other personal property with the aggregate
value of P15,000,000.00. The said court also granted the
motion of respondent Aboitiz to take possession and
custody of the attached property of petitioners and ordered
the Provincial Sheriff of Davao to deliver the property to
respondent Aboitiz.
Petitioners moved for a bill of particulars and to set aside
the ex parte writ of attachment. Finding merit in the motion
to set aside the writ, Branch 11 ordered on July 6, 1982 the
lifting of the writ and, consequently, the discharge of the
property levied upon.
Respondent Aboitiz filed an urgent ex parte motion,
praying for the stay of the July 6, 1982 Order for a period
of 15 days for it to be able to appeal the order. The motion
was favorably acted upon.
However, on July 13, 1982, respondent Aboitiz filed a
notice of dismissal of its complaint in accordance with
Section 1, Rule 17 of the Revised Rules of Court.
Consequently, Branch 11 issued an order confirming the
notice of dismissal, emphasizing that all orders of the court
issued prior to the filing of said notice of dismissal had
been rendered functus oficio, and considering all pending
incidents in the case as moot and academic.
Petitioner Eleazar Adlawan filed a motion praying that the
July 6, 1982 Order be implemented and enforced. On
December 20, however, Branch 11 denied the motion on
account of the filing by respondent Aboitiz before Branch
16 of the Court of First Instance of Cebu in Lapu-lapu City
of an action for delivery of personal property (Civil Case
No. 619-L), and the filing by petitioner Eleazar Adlawan
before Branch 10 of the same court of an action for
under the writ of attachment.
In the replevin suit, Branch 16 ordered the seizure and
delivery of the property described in the complaint. Said
property were later delivered by the provincial sheriff to
respondent Aboitiz. Alleging that while his office was
situated in Cebu City, Adlawan was a resident of
Minglanilla, and therefore, the Lapu-lapu City court should
not entertain the action for replevin. Petitioner Eleazar
Adlawan filed an omnibus motion praying for the
reconsideration and dissolution of the writ of seizure, the
retrieval of the property seized, and the dismissal of the
complaint. He also averred that the property seized were
in custodia legis by virtue of the writ of attachment issued
by Branch 11. His omnibus motion was denied.
Subsequently, he filed a motion for reconsideration which
was not granted.
The denial of his omnibus motion led petitioner Eleazar
Adlawan to file a petition for certiorari and mandamus in
the Supreme Court (G.R. No. 63225). The Third Division
of this Court ruled on April 3, 1990 that since attachment is
an ancillary remedy, the withdrawal of the complaint left it
with no leg to stand on. Thus, the Court disposed of the
case as follows:
WHEREFORE, in view of the
foregoing, this Court rules that the
attached properties left in the custody
of private respondent Aboitiz and
Company, Inc. be returned to petitioner
Eleazar V. Adlawan without prejudice
to the outcome of the cases filed by
both parties (Rollo, p. 324).
Respondent Aboitiz filed a motion for reconsideration of
the decision, contending that the replevin case was distinct
and separate from the case where the writ of attachment
was issued. It argued that the writ of replevin, therefore,
remained in force as the Third Division of the Supreme
Court had not found it illegal. The motion was, however,
denied with finality in the Resolution of July 11, 1990.
Undaunted, respondent Aboitiz filed a second motion for
reconsideration with a prayer that the dispositive portion of
the decision be clarified. It asserted that because the writ of
preliminary attachment was different from the writ of
replevin, we should rule that the property subject of the
latter writ should remain in custodia legis of the court
issuing the said writ.
In the Resolution dated September 10, 1990, the Third
Division stated that "the properties to be returned to
petitioner are only those held by private respondent
(Aboitiz) by virtue of the writ of attachment which has
been declared non-existent." Accordingly, the dispositive
portion of the April 3, 1990 decision of the Third Division
of this Court was modified to read as follows:
WHEREFORE, in view of the
foregoing, this Court rules that the
properties in the custody of the private
respondent Aboitiz & Company by
virtue of the writ of attachment issued
in Civil Case No. R-21761 be returned
to the petitioner, but properties in the
custody of the private respondent by
virtue of the writ of replevin issued in
Civil Case No. 619-L be continued
in custodia legis of said court pending
litigation therein.
The Decision in G.R. No. 63225 having become final and
executory, entry of judgment was made on November 15,
1990. This should have terminated the controversy between
petitioners and respondent Aboitiz insofar as the Supreme
Court was concerned, but that was not to be. On September
9, 1983 respondent Aboitiz filed against petitioners two
complaints for collection of sums of money with prayers
for the issuance of writs of attachment in the Regional Trail
Court, Branch 23, Cebu City, docketed as Civil Cases Nos.
CEB-1185 and CEB-1186. The complaint in Civil Case No.
CEB-1185 alleged that petitioner Eleazar Adlawan
(defendant therein) was awarded a contract for the
construction of the Tago Diversion Works for the Tago
River Irrigation Project by the National Irrigation
Administration and that respondent Aboitiz (plaintiff
therein) loaned him money and equipment, which
indebtedness as of June 30, 1983 totaled P13,430,259.14.
Paragraph 16 of the complaint states:
16. That, in view of the enormous
liabilities which the defendants have
with the plaintiff, defendants executed
a real estate mortgage covering eleven
(11) parcels of land in favor of
Philippine Commercial and Industrial
Bank (PCIB) to secure a P1,000,000.00
loan with said bank and was able to
remove, conceal and dispose of their
properties, obviously to defraud the
plaintiff, . . . (Rollo, pp. 65-66).
The complaint in Civil Case No. CEB-1186 alleged that
petitioner Eleazar Adlawan (defendant therein) was
awarded a contract for the construction of the Lasang River
Irrigation Project by the National Irrigation Administration
and that respondent Aboitiz (plaintiff therein) loaned him
money and equipment, which indebtedness as of June 30,
1983 totalled P5,370,672.08. Paragraph 15 of the complaint
is similarly worded as paragraph 16 of the complaint in
Civil Case No. CEB-1185.
Civil Case No. CEB-1185 was raffled to the Regional Trial
Court, Branch 6, presided by respondent Judge Ramon Am.
Torres. On September 14, 1983, respondent Judge ordered
the issuance of a writ of attachment upon respondent
Aboitiz' filing of a bond of P5,000,000.00. Similarly, in
Civil Case No. CEB-1186, which was raffled to Branch 23,
presiding Judge Emilio A. Jacinto ordered the issuance of a
writ of attachment upon the filing of a bond of
P2,500,000.00. Accordingly, in Civil Case No. CEB-1185,
the Acting Provincial Sheriff of Cebu issued separate writs
dated September 26, 1983 addressed to the Sheriffs of
Cebu, Davao and Metro Manila. No writ of preliminary
attachment was, however, issued in Civil Case No. CEB-
1186.
Petitioners then filed in Civil Cases Nos. CEB-1185 and
CEB-1186 urgent motions to hold in abeyance the
enforcement of the writs of attachments. They alleged in
the main that since their property had been previously
attached and said attachment was being questioned before
the Supreme Court in G.R. No. 63225, the filing of the two
cases, as well as the issuance of the writs of attachment,
constituted undue interference with the processes of this
court in the then pending petition involving the same
property.
Upon motion of respondent Aboitiz, Branch 23 issued on
October 13, 1983, an order directing the transfer to Branch
6 of Civil Case No. CEB-1186 for consolidation with Civil
Case No. CEB-1185.
Meanwhile, in its comment on petitioners' motion to
withhold the enforcement of the writs of attachment,
respondent Aboitiz alleged that the voluntary dismissal of
Civil Case No. R-21761 under Section 1, Rule 17 of the
Revised Rules of Court was without prejudice to the
institution of another action based on the same subject
matter. It averred that the issuance of the writ of attachment
was justified because petitioners were intending to defraud
respondent Aboitiz by mortgaging 11 parcels of land to the
Philippine Commercial and Industrial Bank (PCIB) in
consideration of the loan of P1,100,000.00, thereby making
PCIB a preferred creditor to the prejudice of respondent
Aboitiz, which had an exposure amounting to
P13,430,259.14.
Petitioners then filed a rejoinder to said comment,
contending that since the property subject of the writ of
attachment have earlier been attached or replevied, the
same property were under custodia legis and therefore
could not be the subject of other writs of attachment.
On December 12, 1983, respondent Judge issued an order
finding no merit in petitioners' motion for reconsideration
and directing the sheriffs of Cebu, Davao and Metro Manila
"to proceed with the enforcement and implementation of
the writs of preliminary attachment." Respondent Judge
ruled that the writs of attachment were issued on the basis
of the supporting affidavits alleging that petitioner had
removed or disposed of their property with intent to
defraud respondent Aboitiz (Rollo, pp. 109-113).
On December 15, petitioners filed an ex parte motion
praying: (1) that the December 12, 1983 Order be set for
hearing; (2) that they be given 15 days within which to
either file a motion for reconsideration or elevate the matter
to this Court or the then Intermediate Appellate Court; and
(3) that within the same 15-day period the implementation
or enforcement of the writs of attachment be held in
abeyance.
On the same day, respondent Judge issued an order holding
in abeyance the enforcement of the writs of preliminary
attachment in order to afford petitioners an opportunity to
seek their other remedies (Rollo, p. 116).
On December 27, petitioners filed the instant petition
for certiorari and mandamus. They alleged that respondent
Judge gravely abused his discretion in ordering the issuance
of the writs of preliminary attachment inasmuch as the real
estate mortgage executed by them in favor of PCIB did not
constitute fraudulent removal, concealment or disposition
of property. They argued that granting the mortgage
constituted removal or disposition of property, it was
not per se a ground for attachment lacking proof of intent
to defraud the creditors of the defendant.
Petitioners contended that in Civil Case No. 21761, Branch
11 had ruled that the loan for which the mortgage was
executed was contracted in good faith, as it was necessary
for them to continue their business operations even after
respondent Aboitiz had stopped giving them financial aid.
Petitioners also contended that respondent Judge exceeded
his jurisdiction when he issued the Order of December 12,
1983, without first hearing the parties on the motion for
attachment and the motion to dissolve the attachment.
Moreover, they argued that respondent Judge gravely
abused his discretion in proceeding with the case,
notwithstanding that his attention had been called with
regard to the pendency of G.R. No. 63225 in this Court.
As prayed for by petitioners, we issued a temporary
restraining order on January 6, 1984 "enjoining the
respondents from enforcing or implementing the writs of
preliminary attachment against the property of petitioners,
all dated September 26, 1983 and issued in Civil Cases
Nos. CEB 1185 and 1186" (Rollo, p. 118).
II
The resolution of this case centers on the issue of the
legality of the writ of attachment issued by respondent
Judge in the consolidated cases for collection of sums of
money.
The affidavit submitted by respondent Aboitiz in support of
its prayer for the writ of attachment does not meet the
requirements of Rule 57 of the Revised Rules of Court
regarding the allegations on impending fraudulent removal,
concealment and disposition of defendant's property. As
held in Carpio v. Macadaeg, 9 SCRA 552 (1963), to justify
a preliminary attachment, the removal or disposal must
have been made with intent to defraud defendant's
creditors. Proof of fraud is mandated by paragraphs (d) and
(e) of Section 1, Rule 57 of the Revised Rules of Court on
the grounds upon which attachment may issue. Thus, the
factual basis on defendant's intent to defraud must be
clearly alleged in the affidavit in support of the prayer for
the writ of attachment if not so specifically alleged in the
verified complaint. The affidavit submitted by respondent
Aboitiz states:
REPUBLIC OF THE PHILIPPINES
CITY OF CEBU ...............) S.S.
I, ROMAN S. RONQUILLO, of legal
age, married and a resident of Cebu
City, after being sworn in accordance
with law, hereby depose and say:
That I am the Vice-President of the
plaintiff corporation in the above-
entitled case;
That a sufficient cause of action exists
against the defendants named therein
because the said defendants are
indebted to the plaintiffs in the amount
of P13,430,259.14 exclusive of
interests thereon and damages claimed;
That the defendants have removed or
disposed of their properties with intent
to defraud the plaintiff, their creditor,
because on May 27, 1982 they
executed a real estate mortgage in favor
of Philippine Commercial and
Industrial Bank (PCIB) covering eleven
(11) of their fifteen (15) parcels of land
in Cebu to secure a P1,000,000.00 loan
with the same bank;
That this action is one of those
specifically mentioned in Section 1,
Rule 57 of the Rules of Court, whereby
a writ preliminary attachment may
lawfully issue because the action
therein is one against parties who have
removed or disposed of their properties
with intent to defraud their creditor,
plaintiff herein;
That there is no sufficient security for
the claims sought to be enforced by the
present action;
That the total amount due to the
plaintiff in the above-entitled case is
P13,430,259.14, excluding interests
and claim for damages and is as much
the sum for which an order of
attachment is herein sought to be
granted; above all legal counter-claims
on the part of the defendants.
IN VIEW WHEREOF, I hereunto set
my hand this 24th day of August 1983
at Cebu City, Philippines.
(Rollo, pp. 171-172)
It is evident from said affidavit that the prayer for
attachment rests on the mortgage by petitioners of 11
parcels of land in Cebu, which encumbrance respondent
Aboitiz considered as fraudulent concealment of property
to its prejudice. We find, however, that there is no factual
allegation which may constitute as a valid basis for the
contention that the mortgage was in fraud of respondent
Aboitiz. As this Court said in Jardine-Manila Finance, Inc.
v. Court of Appeals, 171 SCRA 636 (1989), "[T]he general
rule is that the affidavit is the foundation of the writ, and if
none be filed or one be filed which wholly fails to set out
some facts required by law to be stated therein, there is no
jurisdiction and the proceedings are null and void."
Bare allegation that an encumbrance of a property is in
fraud of the creditor does not suffice. Factual bases for such
conclusion must be clearly averred.
The execution of a mortgage in favor of another creditor is
not conceived by the Rules as one of the means of
fraudulently disposing of one's property. By mortgaging a
piece of property, a debtor merely subjects it to a lien but
ownership thereof is not parted with.
Furthermore, the inability to pay one's creditors is not (
necessarily synonymous with fraudulent intent not to honor S
an obligation (Insular Bank of Asia & America, Inc. v. g
Court of Appeals, 190 SCRA 629 [1990]). d
.
Consequently, when petitioners filed a motion for the )
reconsideration of the order directing the issuance of the
writ of attachment, respondent Judge should have R
considered it as a motion for the discharge of the A
attachment and should have conducted a hearing or M
required submission of counter-affidavits from the O
petitioners, if only to gather facts in support of the N
allegation of fraud (Jopillo, Jr. v. Court of Appeals, 167
SCRA 247 [1988]). This is what Section 13 of Rule 57 S
mandates. .
This procedure should be followed because, as the Court
has time and again said, attachment is a harsh,
extraordinary and summary remedy and the rules governing
its issuance must be construed strictly against the applicant.
Verily, a writ of attachment can only be granted on
concrete and specific grounds and not on general averments
quoting perfunctorily the words of the Rules (D.P. Lub Oil
Marketing Center, Inc. v. Nicolas, 191 SCRA 423 [1990]).

The judge before whom the application is made exercises

full discretion in considering the supporting evidence
proffered by the applicant. One overriding consideration is
that a writ of attachment is substantially a writ of execution
except that it emanates at the beginning, instead of at the
termination of the suit (Santos v. Aquino, Jr., 205 SCRA
127 [1992]; Tay Chun Suy v. Court of Appeals, 212 SCRA
713 [1992]).

We need not discuss the issue of whether or not Civil Cases

Nos. CEB-1185 and CEB-1186 constituted undue
interference with the proceedings in G.R. No. 63225 in
view of the entry of judgment in the latter case.

WHEREFORE, the petition is GRANTED and the

Temporary Restraining Order issued on January 6, 1984 is
made PERMANENT. Respondent Judge or whoever is the
presiding judge of the Regional Trial Court, Branch 6,
Cebu City, is DIRECTED to PROCEED with the
resolution of Civil Cases Nos. CEB-1185 and CEB-1186
with deliberate dispatch.

SO ORDERED.

THE CONSOLIDATED BANK and TRUST
CORPORATION (SOLIDBANK), petitioner,
vs.
HON. INTERMEDIATE APPELLATE COURT,
GOLDEN STAR INDUSTRIAL CORPORATION,
NICOS INDUSTRIAL CORPORATION and THE
PROVINCIAL SHERIFF OF BULACAN, respondents.
C.M. Delos Reyes and Associates for petitioner.
Magtanggol C. Gunigundo and Fajardo Law office for
respondents.
GUTIERREZ, JR., J.:
The basic issue for resolution in this petition for review of
the December 13, 1985 decision of the Intermediate
Appellate Court, now the Court of Appeals, as well as the
resolution of March 13, 1986 denying the motion for
reconsideration, is whether or not an attaching creditor
acquires the right of redemption of a debtor over the
attached properties of the latter which are subsequently
extrajudicially foreclosed by third parties.
Briefly, the facts are as follows: Originally, petitioner
Consolidated Bank and Trust Corporation (SOLIDBANK)
loaned private respondent NICOS Industrial Corporation
(NICOS) sums of money in the total amount of FOUR
MILLION SEVENTY SIX THOUSAND FIVE
HUNDRED EIGHTEEN AND 64/100 PESOS
(P4,076,518.64).
Subsequently, NICOS failed to pay back the loan
prompting SOLIDBANK to file a collection case before the
Court of First Instance of Manila, Branch XXIX. The case
was docketed as Civil Case No. 82-11611.
On August 30, 1982, the court in the aforecited case issued
an order of attachment " ... upon the rights, interests and
participation of which defendants NICOS Industrial
Corporation ... may have in Transfer Certificate of Title
No. T-210581 (T-32.505 M) and Transfer Certificate of
Title No. T-10580 (T-32.504 M) (Annexes "B", "B-1", "B-
2" and "B-3" of petition).
On September 1, 1982, pursuant to the writ of attachment
issued by the Court and upon petitioner's posting of
sufficient bond, the Sheriff of Manila levied and attached
the two real properties described by the foregoing order of
attachment, including the buildings and other
improvements thereon. Afterwards, the Sheriff sent
separate Notices of Levy Upon Realty to the Registrar of
Deeds of Malolos, Bulacan, dated September 1, 1982
requesting him "to make the proper annotation in the books
of your office" by virtue of the order of attachment dated
August 30,1982 issued by the Manila Court in Civil Case
No. 82-11611.
Accordingly, on September 7, 1982, the Registrar of Deeds
of Malolos, Bulacan, pursuant to the request of the Manila
Sheriff, inscribed and annotated the Notices of Levy Upon
Real Property at the back of Transfer Certificates of Title
Nos. T-210581 (T-32.505 M) and T-210580 (T-32.504 M).
Pursuant to the foregoing ng inscription and annotations,
guards were deputized by the Manila Sheriff to secure the
premises of the two attached realties.
A year later, however, on July 11, 1983, the attached
properties which had been mortgaged by NICOS to the
United Coconut Planters Bank (UCPB) on March 11, 1982,
were extrajudicially foreclosed by the latter. As the highest
bidder therein, a certificate of sale was issued to it by the
Sheriff of Bulacan over the subject realties including the
buildings and improvements thereon.
Surprisingly, two transactions occurred soon thereafter,
both on August 29, 1983. First, UCPB sold all of its rights,
interests, and participation over the properties in question
to a certain Manuel Go; Second, Manuel Go sold all the
rights he acquired from UCPB over the same lots on that
very same day to private respondent Golden Star Industrial
Corporation (GOLDEN STAR).
Barely a month later, on October 5, 1983, respondent
NICOS, though fully aware that it still had the right to
redeem the auctioned properties within the one year period
of redemption from July 11, 1983, suddenly executed a
document entitled "Waiver of Right of Redemption" in
favor of respondent GOLDEN STAR.
On September 15, 1983, GOLDEN STAR filed a petition
for the issuance of a writ of possession over the subject
realties before the Regional Trial Court, Branch VI of
Malolos, Bulacan.
On November 4, 1983, the Malolos Court granted
GOLDEN STAR's petition for a writ of possession and
issued the writ. In accordance with these orders, armed men
of GOLDEN STAR forcibly took over the possession of
the properties in dispute from the guards deputized by the
Sheriff of Manila to secure the premises.
Thus on November 21, 1983, petitioner SOLIDBANK, on
the strength of its prior attachment over the lands in
question filed with the Malolos court an omnibus motion to
annul the writ of possession issued to GOLDEN STAR and
to punish for contempt of court the persons who
implemented the writ of possession with the use of force
and intimidation.
The respondents NICOS and GOLDEN STAR, filed
oppositions to the foregoing omnibus motion, the former on
the basis of the waiver of its right of redemption to
GOLDEN STAR, and the latter on its alleged ignorance
that the lands in question were under custodia legis, having
been attached by the Sheriff of Manila.
On June 9, 1984, the Malolos Court issued an order
denying the omnibus motion, the decretal portion of which
is as follows:
WHEREFORE, the Omnibus Motion
of movant Consolidated Bank and
Trust Corporation to annul the writ of
possession issued by this Court in favor
of Golden Star Industrial Corporation
and to cite for contempt those who
fraudulently secured and unlawfully
implemented the writ of possession is
hereby DENIED for lack of merit. (p. 8
of the Brief for the Complainant-
Oppositor-Appellant in AC-G.R. CV
No. 04398 [p.118, Rollo])
The petitioner SOLIDBANK forthwith interposed an
appeal before the Intermediate Appellate Court
arguing inter alia that the properties were under custodia
legis, hence the extrajudicial foreclosure and the writ of
possession were null and void, and that the right of NICOS
to redeem the auctioned properties had been acquired by
SOLIDBANK.
On December 13, 1985, the Intermediate Appellate Court
rendered its assailed decision "finding no merit in this
appeal and affirming in toto the appealed order of June 9,
1984, ruling that "the properties in issue ... were not
in custodia legis at the time of the extrajudicial
foreclosure."
The petitioner moved for reconsideration, arguing that its
writ of attachment over the properties in question was duly
registered in the Register of Deeds of Malolos, Bulacan,
and that the right to redeem said properties should be
retained or given back to SOLIDBANK as attaching
creditor.
On March 13, 1986, the Intermediate Appellate Court
promulgated its resolution denying the motion for
reconsideration for lack of merit.
Hence this petition for review, on the grounds that
respondent appellate court decided the case contrary to law
and applicable decisions of the Supreme Court, and has
departed from the accepted and usual course of judicial
proceedings as to call for an exercise of the power of
supervision of this Court.
The fundamental question herein, which is determinative of
the other issues, is whether or not the subject properties
were under custodia legis by virtue of the prior annotation
of a writ of attachment in petitioner's favor at the time the
properties were extrajudicially foreclosed.
We rule in the affirmative on the following grounds:
First of all, the records show (specifically Annexes "B,"
"B-1" to "B-3" of the petition) that on September 1, 1982,
the Sheriff of Branch XXIX of the Court of First Instance
of Manila, sent separate Notices of Levy Upon Realty to
the Registrar of Deeds of Malolos Bulacan, requesting him
"to make the proper annotation in the books of your office,"
"by virtue of an order of attachment issued in Civil Case
No. 82-11611 dated August 30, 1982, ... upon the rights,
interests, and participation of which defendant NICOS
Industrial Corporation in this case may have in ...
."Transfer Certificate of Title No. T-210581 (T-32.505 M)
and Transfer Certificate of Title No. T-210580 (T-32,505
M).
Secondly, and more significant, the records clearly show
(page 4, Annex "D" of petition) that the Registrar of Deeds
of Malolos, Bulacan, on September 7, 1982, inscribed and
annotated the foregoing Notices of Levy at the back of
Transfer Certificate of Title Nos. 210580 and 210581, to
wit:
TRANSFER CERTIFICATE OF
TITLE
No. T-210580 (T-32.504 M)
Entry No. 79524 (M): Kind; NOTICE
OF LEVY UPON REALTY, Executed
in favor of the CONSOLIDATED
BANK AND TRUST
CORPORATION (SOLIDBANK);-
Plaintiff; Conditions: Notice is hereby
given that by virtue of an Order of
Attachment issued by the C.F.I. of
Manila, Branch XXIX, in Civil Case
No. 82-11611, all the rights, interest
and participation of NICOS
INDUSTRIAL CORPORATION-
Defendant over the herein described lot
is hereby levied upon attached.; Date of
Instrument: September 1, 1982; Date of
Inscription: September 7, 1982 at 2:35.
Meycauayan, Bulacan.
TRANSFER CERTIFICATE OF TITLE
No. T-210581 (T-32.505 M)
Entry No. 79524 (M); Kind: NOTICE
OF LEVY UPON REALTY, Executed
in favor of THE CONSOLIDATED
BANK AND TRUST
CORPORATION (SOLIDBANK)
Plaintiff; Conditions: Notice is hereby
given that by virtue of an Order of
Attachment issued by the C.F.I. of
 Manila, Branch XXIX, in Civil Case
No. 82-11611, all the rights, interest
and participation of NICOS
INDUSTRIAL CORPORATION
Defendants over the herein described
lot is hereby levied upon attached.;
Date of Instrument; September 1, 1982;
Date of Inscription: September 7, 1982
at 2:35.
Meycauayan, Bulacan.
Based on the foregoing evidence on
record, the conclusion is clear that the
disputed real properties were
under custodia legis by virtue of a valid
attachment at the time the same were
extrajudicially foreclosed by a third
party mortgagee.
The rule is well settled that when a writ of attachment has
been levied on real property or any interest therein
belonging to the judgment debtor, the levy thus effected
creates a lien which nothing can destroy but its dissolution
(Chua Pua Hermanos v. Register of Deeds of Batangas, 50
Phil. 670; Government, et. al. v. Mercado, 67 Phil. 409).
The foregoing conclusion has two necessary consequences.
Firstly, it follows that the writ of possession issued by the
Malolos court in favor of respondent GOLDEN STAR is
nun and void ab initio because it interfered with the
jurisdiction of a co-ordinate and co-equal court (See De
Leon v. Salvador, 36 SCRA 567):
While property or money is in custodia
legis, the officer holding it is the mere
hand of the court, his possession is the
possession of the court, and to interfere
with it is to invade the jurisdiction of
the court itself (Gende v. Fleming, 371
N.E. 2d. 191; Bishop v. Atlantic
Smokeless Coal Co., 88F. Supp. 27, 7
CJS 320).
Of equal importance is the fact that the transactions on
which respondent GOLDEN STAR's right to a writ of
possession are based are highly irregular and questionable,
to say the least, considering the following circumstances:
On July 11, 1983, the Sheriff of Bulacan executed a
certificate of sale over the two lots in question in favor of
UCPB.
On August 29, 1983, or about a month and a half later,
UCPB sold its rights, interests and participation over the
lands to Manuel Go.
On that very same day, August 29, 1983, Manuel Go sold
the same properties to respondent GOLDEN STAR.
On October 5, 1983, respondent NICOS which had a one
year right of redemption over the lands in question
executed a "Waiver of Right of Redemption in favor of
respondent GOLDEN STAR." The attempts to bring the
disputed properties out of the petitioner's reach, inspite of
the attachment, are plain and apparent.
Based on the foregoing facts, we find that respondents
NICOS and GOLDEN STAR conspired to defeat
petitioner's lien on the attached properties and to deny the
latter its right of redemption.
It appears that in issuing the writ of possession, the Malolos
court relied on copies of documents (which did not show
the memorandum of encumbrance) submitted to it by
GOLDEN STAR. It was thus led into the error of ruling
that the petitioner's attachment was not properly annotated.
Secondly, it likewise follows that the petitioner has
acquired by operation of law the right of redemption over
the foreclosed properties pursuant to Sec. 6 of Act No.
3135, to wit:
In all such cases in which an
extrajudicial sale is made ... any person
having a lien on the property
subsequent to the mortgage ... may
redeem the same at any time within the
term of one year from and after the date
of sale.
It has been held that "an attaching creditor may succeed to
the incidental rights to which the debtor was entitled by
reason of his ownership of the property, as for example, a
right to redeem from a prior mortgage" (Lyon v. Stanford,
5 Conn. 541, 7 SJS 505).
The fact that respondent NICOS executed a waiver of right
of redemption in favor of respondent GOLDEN STAR on
October 5, 1983 is of no moment as by that time it had no
more right which it may waive in favor of another,
Finally, GOLDEN STAR argues that even if the attachment
in issue was duly registered and the petitioner has a right of
redemption, the certificate of sale of the lands in question
was registered on September 6, 1983. It claims that the
period to redeem therefore lapsed on September 6, 1984
without the petitioner bank ever exercising any right of
redemption.
This argument is untenable. Well settled is the rule that the
pendency of an action tolls the term of the right of
redemption. Specifically, tills Court in Ong Chua v. Carr,
(53 Phil. 975, 983) categorically ruled that:
xxx xxx xxx
 ... Neither was it error on the part of the
court to hold that the pendency of the
action tolled the term for the right of
redemption; that is an old and well
established rule.

This was reiterated in Fernandez v. Suplido (96 Phil. 541,

543), as follows:

xxx xxx xxx

... As pointed out in Ong Chua v. Carr,

53 Phil. 975, the pendency of an action
brought in good faith and relating to the
validity of a sale with pacto de
retro tolls the term for the right of
redemption. ...

Not only that. It has been held that "under a statute limiting
the time for redemption ... the right of redemption
continues after perfection of an appeal ... until the decision
of the appeal (Philadelphia Mortgage Co. v. Gustus, 75
N.W. 1107).

In the case at bar, the petitioner commenced the instant

action by way of an omnibus motion before the Bulacan
Court on November 21, 1983 or barely two months after
the certificate of sale was registered on September 6, 1983,
well within the one year period of redemption.

WHEREFORE, IN VIEW OF THE FOREGOING, the

petition is granted and judgment is hereby rendered:

1) declaring as valid and binding the levy and attachment

by the Manila Sheriff on the two realties in question
including the buildings and improvements thereon;

2) declaring that petitioner has acquired the right of

redemption over the aforesaid properties which it may
exercise within one year from notice of entry of judgment
in this case; and

3) declaring as null and void (a) the order of the Bulacan

Court dated November 4, 1983 granting the writ of
possession to respondent GOLDEN STAR, (b) its order of
June 9, 1984 denying the petitioner's omnibus motion, and
(c) the Waiver of Right of Redemption executed by
respondent NICOS in favor of respondent GOLDEN
STAR.

SO ORDERED.

G.R. No. L-37682 November 26, 1932
CLAUDE NEON LIGHTS, FEDERAL INC., U. S.
A., petitioner,
vs.
PHILIPPINE ADVERTISING CORPORATION and
FRANCISCO SANTAMARIA, Judge of First Instance
of Manila, respondents.
Gibbs & McDonough for petitioner.
Courtney Whitney for respondents.
BUTTE, J.:
This case is to be determined upon the petition for writ
of certiorari and the demurrer thereto filed by the
respondents. The petition sets up two causes of action: one
attacking the validity of a writ of attachment issued by the
respondent judge on the petition and affidavit of the
respondent Philippine Advertising Corporation, on April 6,
1932; the second, attacking the validity of the order of the
respondent judge issued the same day on the petition of the
respondent Philippine Advertising Corporation, appointing
a receiver of the property which was seized by the sheriff
under said writ of attachment.
On April 5, 1932, the respondent Philippine Advertising
Corporation filed suit against the petitioner in the Court of
First Instance of Manila, claiming P300,000 as damages for
alleged breach of the agency contract existing between the
said respondent and the petitioner. At the same time, said
respondent filed in said court an application for writ of
attachment duly verified in which it is stated that the
defendant (petitioner herein) is a foreign corporation
having its principal place of business in the City of
Washington, District of Columbia. It is not alleged in said
application that the defendant, Claude Neon Lights, Inc.
(the petitioner herein) was about to depart from the
Philippine Islands with intent to defraud its creditors or that
it was insolvent or had removed or disposed of its property
or was about to do so with intent to defraud its creditors.
The only statutory ground relied upon in the court below
and in this court for the issuance of the writ of attachment
against the petitioner is paragraph 2 of section 424 of the
Code of Civil Procedure, which provides that plaintiff may
have the property of the defendant attached "in an action
against a defendant not residing in the Philippine Islands".
On April 6, 1932, the respondent judge issued the writ of
attachment as prayed for, and the sheriff has attached all
the properties of the petitioner in the Philippine Islands. On
the same date, on the ex parte petition and nomination of
the respondent, the respondent judge appointed Manuel C.
Grey receiver of said properties of the petitioner, fixing his
bond at P3,000.
Motions to dissolve said writ of attachment and
receivership were fled in the court below, supported by
affidavits of the attorney in fact for the petitioner in which
it is recited, among other things, that the petitioner is not
indebted to the respondent in any sum whatever nor has it
in any way breached any contracts with the respondent or at
any time interfered in the management of its business in the
Philippine Islands as carried on by its agent, the
respondent, and it has faithfully complied with every
condition of said contract; that the attachment of the
machinery and plants of the petitioner, as well as its other
assets, is highly prejudicial to it as it is unable to proceed
with its business in the Philippine Islands and irreparable
loss will result to it unless such attachment be raised; that
the filing of said suit was malicious, without foundation,
and intended only to injure the petitioner and to depreciate
the value of its holdings in the Philippine Islands. It does
not appear that any answer was made to said motion in
which said allegations were denied or that any refuting
evidence was offered.
On June 20 1932, the court denied said motions to vacate
the attachment and receivership, declaring that the writ of
attachment conforms to section 424 of the Code of Civil
Procedure.
The petitioner for certiorari prays that the writ of
attachment issued by the respondent judge on April 6,
1932, as well as the order of the same date, appointing
Manuel C. Grey receiver of the property of the petitioner,
be annulled.
The sufficiency of the application for the writ of attachment
assailed by the petitioner upon several grounds but we shall
confine ourselves to the consideration of the question
whether or not paragraph 2 of section 424 of the Code of
Civil Procedure is applicable to this petitioner.
The petitioner is a corporation duly organized under the
laws of the District of Columbia; it had complied with all
the requirements of the Philippine laws and the was duly
licensed to do business in the Philippine Islands on the date
said writ of attachment was issues. The petitioner was
actively engaged in doing business in the Philippine Islands
and had considerable property therein, which consisted to
its manufacturing plant, machinery, merchandise and a
large income under valuable contracts, all of which
property was in the possession and under the control and
management of the respondent Philippine Advertising
Corporation, as the agent of the petitioner, on the date said
attachment was levied. Considered from a practical and
economic viewpoint, its position in the business community
was indistinguishable from that of a domestic corporation.
Section 242 of the Code of Civil Procedure under which the
petitioner's property was attached, reads as follows:
Attachment. A plaintiff may, at the
commencement of his action, or at any time
afterwards, have the property of the defendant
 attached as security for the satisfaction of any
judgment that may be recovered, unless the
defendant gives security to pay such judgment, in
the manner hereinafter provided, in the following
cases.
1. In all the cases mentioned in section four
hundred and twelve, providing for the arrest of a
defendant. But the plaintiff must make an
election as to whether he will ask for an order of
arrest or an order of attachment; he shall not be
entitled to both orders;
2. In an action against a defendant not residing in
the Philippine Islands.
It may be observed at the outset that the words of section
424, supra, taken in their literal sense seem to refer to a
physical defendant who is capable of being "arrested" or
who is "not residing in the Philippine Islands". It is only by
a fiction that it can be held that a corporation is "not
residing in the Philippine Islands". A corporation has no
home or residence in the sense in which those terms are
applied to natural persons. For practical purposes, a
corporation is sometimes said, in a metaphorical sense, to
be "a resident" of a certain state or a "citizen" of a certain
country, which is usually the state or country by which or
under the laws of which it was created. But that fiction or
analogy between corporations and natural persons by no
means extends so far that it can be said that every statute
applicable to natural persons is applicable to corporations.
Indeed, within the same jurisdiction a corporation has been
held to be a "citizen" of the state of its creation for the
purpose of determining the jurisdiction of the Federal
courts (Wisconsin vs. Pelican Insurance Co., 127 U. S.,
265) but not a "citizen" within the meaning of section 2 of
article 4 of the Constitution of the United States which
provides that the citizens of each state shall be entitled to
all the privileges and immunities of citizens of the several
states (Paul vs. Virginia, 8 Wall., 169).
The question arises whether this petitioner, a foreign
corporation, shall, in a metaphorical sense, be deemed as
"not residing in the Philippine Islands" in the sense in
which that expression would apply to a natural person.
Having regard to the reason for the statute which is the
protection of the creditors of a non-resident, we are of the
opinion that there is not the same reason for subjecting a
duly licensed foreign corporation to the attachment of its
property by a plaintiff under section 424, paragraph 2, as
may exist in the case of a natural person not residing in the
Philippine Islands. The law does not require the latter, as it
does the former, to appoint a resident agent for service of
process; nor to prove to the satisfaction of the Government
before he does business here, as the foreign corporation
must prove, that he "is solvent and in sound financial
condition" (section 68, Act No. 1459, as amended, the
Corporation Law), or to produce evidence of "fair dealing"
(ibid.). He pays no license fee nor is his business subject at
any time to investigation by the Secretary of Finance and
the Governor-General; nor is his right to continue to do
business revocable by the Government (Cf. section 71, Act
No. 1459 of the Corporation Law). His books and papers
are not liable to examination "at any time" by the Attorney-
General, the Insular Auditor, the Insular Treasurer, "or any
other officer of the Government" on the order of the
Governor-General (section 54, ibid.). He is not, like a
foreign corporation "bound by all laws, rules and
regulations applicable to domestic corporations" . . .
(section 73, ibid.), which are designed to protect creditors
and the public. He can evade service of summons and other
legal process, the foreign corporation never. (Section
72, ibid.)
Corporations, as a rule, are less mobile than individuals.
This is a specially true of foreign corporations that are
carrying on business by proper authority in these Islands.
They possess, as a rule, great capital which is seeking
lucrative and more or less permanent investment in young
and developing countries like our Philippines. Some of
them came here as far back as the Spanish regime and are
still important factors in our financial and industrial life.
They are anything but "fly-by-night" concerns. The latter,
we believe, are effectually excluded from our Islands both
by our laws and by our geographical and economic
situation.
If, as we believe, section 424, paragraph 2, should not be
held applicable to foreign corporations duly licensed to do
business in the Philippine Islands both because the
language and the reason of the statute limit it to natural
persons, we sustain and reinforce the provisions of section
71 of the Corporation Law, Act No. 1459, which provides
in substance that if the Secretary of Finance or the
Secretary of Commerce and Communications and the
Governor-General find a duly licensed foreign corporation
to be insolvent or that its continuance in business will
involve probable loss to its creditors, they may revoke its
license and "the Attorney-General shall take such
proceedings as may be proper to protect creditors and the
public". Section 71, supra, contemplates that the
proceedings instituted by the Attorney-General shall effect
the protection of all creditors and the public equally.
Obviously, the benefit of that section will be minimized, if
not entirely defeated, if a creditor or a few creditors can
obtain privileged liens by writs of attachment based on the
sole allegation, which is easily and safely made, that the
corporation is "not residing in the Philippine Islands". (Cf.
Kuenzle & Streiff vs. Villanueva, 41 Phil., 611.)lawphil.net
Paragraph 2 of section 424, supra does not apply to a
domestic corporation. Our laws and jurisprudence indicate
a purpose to assimilate foreign corporations, duly licensed
to do business here, to the status of domestic corporations.
(Cf. Section 73, Act No. 1459, and Marshall Wells
Co. vs. Henry W. Elser & Co., 46 Phil., 70, 76; Yu Cong
Eng vs. Trinidad, 47 Phil., 385, 411.) We think it would be
entirely out of line with this policy should we make a
discrimination against a foreign corporation, like the
petitioner, and subject its property to the harsh writ of
seizure by attachment when it has complied not only with
every requirement of law made especially of foreign
corporations, but in addition with every requirement of law
made of domestic corporations. (Section 73, supra.)

It is true that the majority of the states in the American

Union hold the contrary rule. But our situation is obviously
very dissimilar from that of a state in the American Union.
There forty-eight states and the central government, all
creating corporations which do a tremendous interstate
business, are contiguous and separated by imaginary lines.
A higher degree of protection against irresponsible
corporations may be more necessary there than here. We
have no interstate business. Only the central government
grants charters to corporations. But even in the American
Union there is a minority rule which we regard as the better
reasoned and the better suited to our conditions, both
geographical and economical, and more nearly in harmony
with the policy of our law both under the Spanish regime
and since the American occupation. This minority rule is
supported by the following authorities: Brand vs. Auto
Service Co. (New Jersey, 1907), 67 Atl., 19, 20;
Mellor vs. Edward V. Hartford, Inc. (New Jersey, 1929),
146 Atl., 206; Charles Friend & Co. vs. Gold Smith & Co.
(Illinois, 1923), 138 N. E., 185; Fullilove vs. Central State
Bank (Louisiana, 1926), 107 So., 590.

In the present instance, a particularly monstrous result has

followed as s consequence of the granting of the writ
attaching all of the property of the petitioner on the sole
allegation that it "is not residing in the Philippine Islands".
As the petitioner's business was a going concern, which the
sheriff, who levied the writ, obviously could not manage, it
became necessary on the same day for the court to appoint
a receiver. This receiver, as the demurrer admits, "was and
is an employee working under the president of the
respondent Philippine Advertising Corporation, so that to
all intents and purposes, all the property of the petitioner in
the Philippine Islands was seized and delivered into the
hands of the respondent Philippine Advertising
Corporation."

The prayer of the petitioner is granted. The order and writ

of attachment complained of are annulled and set aside and
the court below is directed to vacate the order appointing
Manuel C. Grey receiver of the property of the petitioner
and to require said Manuel C. Grey to submit his final
report at the earliest practicable date. Costs in both
instances to be borne by the respondent, Philippine
Advertising Corporation. So ordered.

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

Real, Abad Santos, Vickers and Imperial, JJ., concur.
G.R. No. L-35990 June 17, 1981 hearing of Civil Case No. 7329. In its decision
promulgated on October 3, 1971, the Court of
ABOITIZ & COMPANY, INC., HONORABLE Appeals declared "null and void the order/writ of
VICENTE N. CUSI JR., Judge of the Court of First attachment dated November 3, 1971 and the orders
Instance of Davao, and the PROVINCIAL SHERIFF of December 2, 1971, as well as that of December 11,
OF DAVAO DEL SUR, petitioners, 1971, ordered the release of the attached properties,
vs. and made the restraining order originally issued
COTABATO BUS COMPANY, INC., respondent. permanent.

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
DE CASTRO, J.: Davao, (Branch I), petitioner assigning against the
lower court the following errors:
The instant petition stemmed from Civil Case No.
7329 of the Court of First Instance of Davao (Branch ERROR I
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 THE COURT OF APPEALS
filed by petitioner herein, Aboitiz & Co., Inc., on ERRED IN HASTILY AND
November 2, 1971, as plaintiff in said case, for the PERFUNCTORILY RENDERING,
collection of money in the sum of P 155,739.41, which ON OCTOBER 3, 1971, A
defendant therein, the respondent in the instant case, DECISION WITHOUT
Cotabato Bus Co., owed the said petitioner. CONSIDERING MOST OF THE
EVIDENCE SUCH THAT
By virtue of the writ of preliminary attachment, the
provincial sheriff attached personal properties of the l) EVEN AN IMPORTANT FACT,
defendant bus company consisting of some buses, ESTABLISHED BY
machinery and equipment. The ground for the DOCUMENTARY EVIDENCE AND
issuance of the writ is, as alleged in the complaint and NOT DENIED BY RESPONDENT,
the affidavit of merit executed by the Assistant IS MENTIONED ONLY AS A
Manager of petitioner, that the defendant "has "CLAIM" OF PETITIONER
removed or disposed of its properties or assets, or is COMPANY;
about to do so, with intent to defraud its creditors."
2) THE DECISION CONTAINS NO
Respondent company filed in the lower court an DISCUSSION AND
"Urgent Motion to Dissolve or Quash Writ of APPRECIATION OF THE FACTS
Attachment" to which was attached an affidavit AS PROVED, ASSEMBLED AND
executed by its Assistant Manager, Baldovino PRESENTED BY PETITIONER
Lagbao, alleging among other things that "the COMPANY SHOWING IN
Cotabato Bus Company has not been selling or THEIR TOTALITY THAT
disposing of its properties, neither does it intend to do RESPONDENT HAS REMOVED,
so, much less to defraud its creditors; that also the DIVERTED OR DISPOSED OF ITS
Cotabato Bus Company, Inc. has been acquiring and BANK DEPOSITS, INCOME AND
buying more assets". An opposition and a OTHER LIQUID ASSETS WITH
supplemental opposition were filed to the urgent INTENT TO DEFRAUD ITS
motion. The lower court denied the motion stating in CREDITORS, ESPECIALLY ITS
its Order that "the testimony of Baldovino Lagbao, UNSECURED SUPPLIERS;
witness for the defendant, corroborates the facts in
the plaintiff's affidavit instead of disproving or showing 3) THE DECISION IGNORES THE
them to be untrue." SIGNIFICANCE OF THE REFUSAL
OF RESPONDENT TO PERMIT,
A motion for reconsideration was filed by the UNDER REP. ACT NO. 1405, THE
defendant bus company but the lower court denied it. METROPOLITAN BANK & TRUST
Hence, the defendant went to the Court of Appeals on CO. TO BRING, IN COMPLIANCE
a petition for certiorari alleging grave abuse of WITH A subpoena DUCES TECUM
discretion on the part of herein respondent Judge, TO THE TRIAL COURT ALL THE
Hon. Vicente R. Cusi Jr. On giving due course to the RECORDS OF RESPONDENT'S
petition, the Court of Appeals issued a restraining DEPOSITS AND WITHDRAWALS
order restraining the trial court from enforcing further UNDER ITS CURRENT AND
the writ of attachment and from proceeding with the SAVINGS ACCOUNTS (NOW NIL)
 FOR EXAMINATION BY
PETITIONER COMPANY FOR
THE PURPOSE OF SHOWING
DIRECTLY THE REMOVAL,
DIVERSION OR DISPOSAL OF
RESPONDENT'S DEPOSITS AND
INCOME WITH INTENT TO
DEFRAUD ITS CREDITORS.
ERROR II
THE COURT OF APPEALS
ERRED IN NOT APPRECIATING
THE FACTS THAT
RESPONDENT'S BANK
DEPOSITS ARE NIL AS PROOF
WHICH - TOGETHER WITH
RESPONDENT'S ADMISSION OF
AN INCOME OF FROM P10,000.00
to P 14,000.00 A DAY AND THE
EVIDENCE THAT IT CANNOT
PRODUCE P 634.00 WITHOUT
USING A PERSONAL CHECK OF
ITS PRESIDENT AND MAJORITY
STOCKHOLDER, AND OTHER
EVIDENCE SHOWS THE
REMOVAL OR CHANNELING OF
ITS INCOME TO THE LATTER.
ERROR III
THE COURT OF APPEALS
ERRED IN NOT APPRECIATING
THE RESCUE AND REMOVAL BY
RESPONDENT OF FIVE
ATTACHED BUSES, DURING THE
DEPENDENCY OF ITS MOTION
TO DISSOLVE THE
ATTACHMENT IN THE, TRIAL
COURT, AS A FURTHER ACT OF
REMOVAL OF PROPERTIES BY
RESPONDENT WITH INTENT TO
DEFRAUD PETITIONER
COMPANY, FOR WHOSE
BENEFIT SAID BUSES HAD BEEN
ATTACHED.
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.

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

JJ., concur.

Aquino, J., concurs in the result.

Concepcion Jr., J., took no part.

G.R. No. L-33112 June 15, 1978
PHILIPPINE NATIONAL BANK, petitioner,
vs.
HON. JUDGE JAVIER PABALAN, Judge of the
Court of First Instance, Branch III, La Union,
AGOO TOBACCO PLANTERS ASSOCIATION,
INC., PHILIPPINE VIRGINIA TOBACCO
ADMINISTRATION, and PANFILO P. JIMENEZ,
Deputy Sheriff, La Union, respondents.
Conrado E. Medina, Edgardo M. Magtalas & Walfrido
Climaco for petitioner.
Felimon A. Aspirin fit respondent Agoo 'Tobacco
Planters Association, Inc.
Virgilio C. Abejo for respondent Phil. Virginia Tobacco
Administration.
FERNANDO, Acting C.J.:
The reliance of petitioner Philippine National Bank in
this certiorari and prohibition proceeding against
respondent Judge Javier Pabalan who issued a writ of
execution, 1 followed thereafter by a notice of
garnishment of the funds of respondent Philippine
Virginia Tobacco Administration, 2 deposited with it, is
on the fundamental constitutional law doctrine of non-
suability of a state, it being alleged that such funds
are public in character. This is not the first time
petitioner raised that issue. It did so before in
Philippine National Bank v. Court of industrial
Relations, 3 decided only last January. It did not meet
with success, this Court ruling in accordance with the
two previous cases of National Shipyard and Steel
Corporation 4and Manila Hotel Employees Association
v. Manila Hotel Company, 5 that funds of public
corporations which can sue and be sued were not
exempt from garnishment. As respondent Philippine
Virginia Tobacco Administration is likewise a public
corporation possessed of the same attributes, 6 a
similar outcome is indicated. This petition must be
dismissed.
It is undisputed that the judgment against respondent
Philippine Virginia Tobacco Administration had
reached the stage of finality. A writ of execution was,
therefore, in order. It was accordingly issued on
December 17, 1970. 7There was a notice of
garnishment for the full amount mentioned in such
writ of execution in the sum of P12,724,66. 8 In view
of the objection, however, by petitioner Philippine
National Bank on the above ground, coupled with an
inquiry as to whether or not respondent Philippine
Virginia Tobacco Administration had funds deposited
with petitioner's La Union branch, it was not until
January 25, 1971 that the order sought to be set
aside in this certiorari proceeding was issued by
respondent Judge. 9 Its dispositive portion reads as
follows: Conformably with the foregoing, it is now
ordered, in accordance with law, that sufficient funds
of the Philippine Virginia Tobacco Administration now
deposited with the Philippine National Bank, La Union
Branch, shall be garnished and delivered to the
plaintiff immediately to satisfy the Writ of Execution for
one-half of the amount awarded in the decision of
November 16, 1970." 10 Hence this certiorari and
prohibition proceeding.
As noted at the outset, petitioner Philippine National
Bank would invoke the doctrine of non-suability. It is
to be admitted that under the present Constitution,
what was formerly implicit as a fundamental doctrine
in constitutional law has been set forth in express
terms: "The State may not be sued without its
consent." 11 If the funds appertained to one of the
regular departments or offices in the government,
then, certainly, such a provision would be a bar to
garnishment. Such is not the case here. Garnishment
would lie. Only last January, as noted in the opening
paragraph of this decision, this Court, in a case
brought by the same petitioner precisely invoking
such a doctrine, left no doubt that the funds of public
corporations could properly be made the object of a
notice of garnishment. Accordingly, this petition must
fail.
1. The alleged grave abuse of discretion, the basis of
this certiorari proceeding, was sought to be justified
on the failure of respondent Judge to set aside the
notice of garnishment of funds belonging to
respondent Philippine Virginia Tobacco
Administration. This excerpt from the aforecited
decision of Philippine National Bank v. Court of
Industrial Relations makes manifest why such an
argument is far from persuasive. "The premise that
the funds could be spoken as public character may be
accepted in the sense that the People Homesite and
Housing Corporation was a government-owned entity.
It does not follow though that they were exempt. from
garnishment. National Shipyard and Steel Corporation
v. Court of Industrial Relations is squarely in point. As
was explicitly stated in the opinion of the then Justice,
later Chief Justice, Concepcion: "The allegation to the
effect that the funds of the NASSCO are public funds
of the government, and that, as such, the same may
not be garnished, attached or levied upon, is
untenable for, as a government owned and controlled
corporation, the NASSCO has a personality of its
own. distinct and separate from that of the
Government. It has pursuant to Section 2 of
Executive Order No. 356, dated October 23, 1950 ... ,
pursuant to which The NASSCO has been
established all the powers of a corporation under
the Corporation Law ... ." Accordingly, it may be sue
and be sued and may be subjected to court
processes just like any other corporation (Section 13,
Act No. 1459, as amended.)" ... To repeat, the ruling
was the appropriate remedy for the prevailing party
which could proceed against the funds of a corporate
entity even if owned or controlled by the
government." 12

2. The National Shipyard and Steel Corporation

decision was not the first of its kind. The ruling therein
could be inferred from the judgment announced in
Manila Hotel Employees Association v. Manila Hotel
Company, decided as far back as 1941. 13 In the
language of its ponente Justice Ozaeta "On the other
hand, it is well-settled that when the government
enters into commercial business, it abandons its
sovereign capacity and is to be treated like any other
corporation. (Bank of the United States v. Planters'
Bank, 9 Wheat. 904, 6 L.ed. 244). By engaging in a
particular business thru the instrumentality of a
corporation, the government divests itself pro hac
vice of its sovereign character, so as to render the
corporation subject to the rules of law governing
private corporations." 14 It is worth mentioning that
Justice Ozaeta could find support for such a
pronouncement from the leading American Supreme
Court case of united States v. Planters' Bank, 15 with
the opinion coming from the illustrious Chief Justice
Marshall. It was handed down more than one hundred
fifty years ago, 1824 to be exact. It is apparent,
therefore, that petitioner Bank could it legally set forth
as a bar or impediment to a notice of garnishment the
doctrine of non-suability.

WHEREFORE, this petition for certiorari and

prohibition is dismissed. No costs.

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

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