pro rem case

8/18/2019 Pro Rem Case

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[G.R. No. 115678. February 23, 2001]

PHILIPPINE BAN !F "!##$NI"A%I!N&, petitioner, vs. H!N. "!$R% !F APPEAL& a'(

BERNAR)IN! *ILLAN$E*A, respondents.

[G.R. No. 11+723. February 23, 2001]

PHILIPPINE BAN !F "!##$NI"A%I!N&, petitioner , vs. H!N. "!$R% !F APPEAL& a'(

FILIPINA& %E%ILE #ILL&, IN"., respondents.

) E " I & I ! N

-NARE&&AN%IAG!, J ./

Before us are consolidated petitions for review both filed by Philippine Bank of Communications; one

against the May 24, !!4 "ecision of respondent Court of #ppeals in C#$%&'& (P )o& *2+* -. and the other

against its March *, !!/ "ecision in C#$%&'& (P )o& *202& -2. Both "ecisions set aside and nullified the#ugust , !!* 1rder -*. of the 'egional rial Court of Manila, Branch 0, granting the issuance of a writ of

preliminary attachment in Civil Case )o& !$/0&

he case commenced with the filing by petitioner, on #pril +, !!, of a Complaint against private

respondent Bernardino 3illanueva, private respondent ilipinas e5tile Mills and one (ochi 3illanueva 6now

deceased7 before the 'egional rial Court of Manila& 8n the said Complaint, petitioner sought the payment of

P2,244,!2&*9 representing the proceeds or value of various te5tile goods, the purchase of which was

covered by irrevocable letters of credit and trust receipts e5ecuted by petitioner with private respondent

ilipinas e5tile Mills as obligor; which, in turn, were covered by surety agreements e5ecuted by private

respondent Bernardino 3illanueva and (ochi 3illanueva& 8n their #nswer, private respondents admitted the

e5istence of the surety agreements and trust receipts but countered that they had already made payments on

the amount demanded and that the interest and other charges imposed by petitioner were onerous&

1n May *, !!*, petitioner filed a Motion for #ttachment,-4. contending that violation of the trust

receipts law constitutes estafa, thus providing ground for the issuance of a writ of preliminary attachment;

specifically under paragraphs b and d, (ection , 'ule /0 of the 'evised 'ules of Court& Petitioner further

claimed that attachment was necessary since private respondents were disposing of their properties to its

detriment as a creditor& inally, petitioner offered to post a bond for the issuance of such writ of attachment&

he Motion was duly opposed by private respondents and, after the filing of a 'eply thereto by

petitioner, the lower court issued its #ugust , !!* 1rder for the issuance of a writ of preliminary

attachment, conditioned upon the filing of an attachment bond& ollowing the denial of the Motion for

'econsideration filed by private respondent ilipinas e5tile Mills, both private respondents filed separate

petitions for certiorari before respondent Court assailing the order granting the writ of preliminary

attachment&

Both petitions were granted, albeit on different grounds& 8n C#$%&'& (P )o& *202, respondent Court of

#ppeals ruled that the lower court was guilty of grave abuse of discretion in not conducting a hearing on the

application for a writ of preliminary attachment and not re:uiring petitioner to substantiate its allegations of fraud, embelement or misappropriation& 1n the other hand, in C#$%&'& (P )o& *2+*, respondent Court of

#ppeals found that the grounds cited by petitioner in its Motion do not provide sufficient basis for the

issuance of a writ of preliminary attachment, they being mere general averments& 'espondent Court of

#ppeals held that neither embelement, misappropriation nor incipient fraud may be presumed; they must

be established in order for a writ of preliminary attachment to issue&


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& nder (ection * of P&"& /, as amended, violation of the trust receipt law constitute6s7 estafa 6fraud

and?or deceit7 punishable under #rticle */ par& -b. of the 'evised Penal Code;

*& 1n account of the foregoing, there e5ist6s7 valid ground for the issuance of a writ of preliminary

attachment under (ection of 'ule /0 of the 'evised 'ules of Court particularly under sub$paragraphs b and

d, i&e& for embelement or fraudulent misapplication or conversion of money 6proceeds7 or property 6goods

entrusted7 by an agent 6entrustee7 in violation of his fiduciary duty as such, and against a party who has been

guilty of fraud in contracting or incurring the debt or obligation;

4& he issuance of a writ of preliminary attachment is likewise urgently necessary as there e5ist6s7 no

sufficient security for the satisfaction of any @udgment that may be rendered against the defendants as the

latter appears to have disposed of their properties to the detriment of the creditors like the herein plaintiff;

/&


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=hile the Motion refers to the transaction complained of as involving trust receipts, the violation of the

terms of which is :ualified by law as constituting estafa, it does not follow that a writ of attachment can and

should automatically issue& Petitioner cannot merely cite (ection 6b7 and 6d7, 'ule /0, of the 'evised 'ules

of Court, as mere reproduction of the rules, without more, cannot serve as good ground for issuing a writ of

attachment& #n order of attachment cannot be issued on a general averment, such as one ceremoniously

:uoting from a pertinent rule&-0.

he supporting #ffidavit is even less instructive& 8t merely states, as follows $$

8, "1M8)%1 (& #>'A, of legal age, married, with address at )o& 24$2 uan Duna (treet, Binondo,

Manila, after having been sworn in accordance with law, do hereby depose and say, nits #c:uired #ssets (ection of the plaintiff,

Philippine Bank of Communications, and as such 8 have caused the preparation of the above motion for

issuance of a writ of preliminary attachment;

2& 8 have read and understood its contents which are true and correct of my own knowledge;

*& here e5ist6s7 sufficient cause of action against the defendants in the instant case;

4& he instant case is one of those mentioned in (ection of 'ule /0 of the 'evised 'ules of Court wherein a

writ of preliminary attachment may be issued against the defendants, particularly sub$paragraphs b and d of

said section;

/& here is no other sufficient security for the claim sought to be enforced by the instant case and the amount

due to herein plaintiff or the value of the property sought to be recovered is as much as the sum for which the

order for attachment is granted, above all legal counterclaims&

#gain, it lacks particulars upon which the court can discern whether or not a writ of attachment should

issue&

Petitioner cannot insist that its allegation that private respondents failed to remit the proceeds of the sale

of the entrusted goods nor to return the same is sufficient for attachment to issue& =e note that petitioner

anchors its application upon (ection 6d7, 'ule /0& his particular provision was ade:uately e5plained

in Liberty Insurance Corporation v. Court of Appeals,-+. as follows

o sustain an attachment on this ground, it must be shown that the debtor in contracting the debt or incurring

the obligation intended to defraud the creditor& he fraud must relate to the e5ecution of the agreement and

must have been the reason which induced the other party into giving consent which he would not have

otherwise given& o constitute a ground for attachment in (ection 6d7, 'ule /0 of the 'ules of Court, fraud

should be committed upon contracting the obligation sued upon& A (eb rau(u4e'4y o'rae( a e

e o o'ra' e (ebor a a 9reo'e:e( 94a' or 'e'o' 'o o 9ay , as it is in this

case& raud is a state of mind and need not be proved by direct evidence but may be inferred from the

circumstances attendant in each case (Republic v. Gonzales, ! "CRA #!!$& 6Amphasis ours7

=e find an absence of factual allegations as to how the fraud alleged by petitioner was committed& #s

correctly held by respondent Court of #ppeals, such fraudulent intent not to honor the admitted obligationcannot be inferred from the debtors inability to pay or to comply with the obligations&-!. 1n the other hand, as

stressed, above, fraud may be gleaned from a preconceived plan or intention not to pay& his does not appear

to be so in the case at bar& 8n fact, it is alleged by private respondents that out of the total P4!,*&!

covered by the sub@ect trust receipts, the amount of P499,999&99 had already been paid, leaving only

P!,*&! as balance&


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he Court of #ppeals was correct, therefore, in its finding in C#$%&'& (P )o& *2+* that neither

petitioners Motion or its supporting #ffidavit provides sufficient basis for the issuance of the writ of

attachment prayed for&

=e also agree with respondent Court of #ppeals in C#$%&'& (P )o& *202 that the lower court should

have conducted a hearing and re:uired private petitioner to substantiate its allegations of fraud,

embelement and misappropriation&

o reiterate, petitioners Motion for #ttachment fails to meet the standard set forth in %.&. Lub 'il

ar)etin* Center, Inc. v. +icolas,-9. in applications for attachment& 8n the said case, this Court cautioned $$

he petitioners prayer for a writ of preliminary attachment hinges on the allegations in paragraph of the

complaint and paragraph 4 of the affidavit of "aniel Pe which are couched in general terms devoid of

particulars of time, persons and places to support such a serious assertion that defendants are disposing of

their properties in fraud of creditors& here is thus the necessity of giving to the private respondents an

opportunity to ventilate their side in a hearing, in accordance with due process, in order to determine the

truthfulness of the allegations& But no hearing was afforded to the private respondents the writ having been

issuede parte& # writ of attachment can only be granted on concrete and specific grounds and not on general

averments merely :uoting the words of the rules&

#s was frowned upon in %.&. Lub 'il ar)etin* Center, Inc.,-. not only was petitioners application

defective for having merely given general averments; what is worse, there was no hearing to afford private

respondents an opportunity to ventilate their side, in accordance with due process, in order to determine the

truthfulness of the allegations of petitioner& #s already mentioned, private respondents claimed that

substantial payments were made on the proceeds of the trust receipts sued upon& hey also refuted the

allegations of fraud, embelement and misappropriation by averring that private respondent ilipinas

e5tile Mills could not have done these as it had ceased its operations starting in une of !+4 due to workersstrike& hese are matters which should have been addressed in a preliminary hearing to guide the lower court

to a @udicious e5ercise of its discretion regarding the attachment prayed for& 1n this score, respondent Court

of #ppeals was correct in setting aside the issued writ of preliminary attachment&

ime and again, we have held that the rules on the issuance of a writ of attachment must be construed

strictly against the applicants& his stringency is re:uired because the remedy of attachment is harsh,

e5traordinary and summary in nature& 8f all the re:uisites for the granting of the writ are not present, then the

court which issues it acts in e5cess of its @urisdiction&-2.

;HEREF!RE, for the foregoing reasons, the instant petitions are "A)8A"& he decision of the Courtof #ppeals in C#$%&'& (P )o& *2+* and C#$%&'& (P )o& *202 are #8'MA"& )o pronouncement as to

costs&

&! !R)ERE).
http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/115678.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/115678.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/115678.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/115678.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/115678.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/115678.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/2001/feb2001/115678.htm#_edn12

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