PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU PROVISIONAL REMEDIES RULE 57 Jurisprudential Doctrines SECTION 1 1. PCIB V.

ALEJANDRO FACTS: Sum of money case filed by PCIB v. Alejandro PCIB asked for issuance of WPA on the ground that: a. Alejandro is a resident of Hongkong (thus falling under Section 1 (f) where he is a party and is not found in the Philippines) b. Alejandro fraudulently withdrew his unassigned deposits which was supposedly to be used as security for the loan granted by PCIB RTC issued WPA Issue: was there a ground to issue WPA? NO. HELD: Alejandro is a resident of the Philippines. PCIB misrepresented that Alejandro was residing out of the Philippines and its omission of his local address was a deliberate move to ensure that the application for the writ will be granted. Rationale: 1. PCIB personally transacted with Alejandro through its Metro Manila residence, Alejandros home address in QC or main business address at the Romulo Mabanta Buenaventura Sayoc and delos Angeles in Makati. PCIB has personal and official knowledge that Alejandros residence for purposes of service of summons is in the Philippines. Writ was issued by the RTC mainly on the representation of PCIB that Alejandro is not a resident of the Philippines. RTCs issuance was for the sole purpose of acquiring jurisdiction to hear the case. If only for that, RTC could have served summons by substituted service on its residence in QC and office in Makati City instead of attaching Alejandros property. 2. There was no fraud in the withdrawal of deposits because PCIB approved and allowed the same.

RIZADA, RESCI ANGELLI stated by the applicant exclusive of costs. Several writs may be issued at the same time, to the sheriffs of the courts of different judicial regions. CASES ON THE ISSUANCE OF THE ORDER OF ATTACHMENT 1. SIEVERT V. CA FACTS: RTC and CA both held that the defendant may be bound by a writ of preliminary attachment even before summons together with a copy of the complaint in the main case has been validly served upon him In this case, Sievert received by mail a Petition for Issuance of PA; he has not received any summons and complaint against him in the main civil case On the hearing for the petition, his counsel appeared and objected to the jurisdiction of the court alleging that since no summons had been served on main case, no jurisdiction on person of defendant, no jurisdiction over the case RTC and CA justified in this manner: "Commencement of action. Action is commenced by filing of the complaint, even though summons is not issued until a later date." Thus, a writ of

preliminary attachment may issue upon filing of the complaint even before issuance of the summons.

HELD: WPA NOT PROPERLY ISSUED. The service of a petition for preliminary attachment without the PRIOR or SIMULTANEOUS service of summons and a copy of the complaint in main case does NOT confer jurisdiction upon the issuing court over the person of the defendant. Rationale: 1. PRAYER FOR WPA embodied in the main complaint as one of the forms of relief sought valid service of summons and a copy of the complaint will in such case vest jurisdiction in the court over the defendant both for purposes of the main case and for purposes of the ancillary remedy of attachment. In such case, notice of the main case is at the same time notice of the auxiliary proceeding in attachment. 2. PETITION FOR A WRIT OF PRELIMINARY ATTACHMENT IS EMBODIED IN A DISCRETE PLEADING such petition must be served either simultaneously with service of summons and a copy of the main complaint, or after jurisdiction over the defendant has already been acquired by such service of summons. Notice of the separate attachment petition is not notice of the main action. Put a little differently, jurisdiction whether ratione personae or ratione materiae in an attachment proceeding is ancillary to jurisdiction ratione personae or ratione materiae in the main action against the defendant. If a court has no jurisdiction over the subject matter or over the person of the defendant in the principal action, it simply has no jurisdiction to issue a writ of preliminary attachment against the defendant or his property. 2. DAVAO LIGHT V. CA ISSUE: at the time order of attachment was promulgated and the WPA issued, RTC had no jurisdiction over the person yet, no summons served. However, summons and WPA was simultaneously given VALID FACTS: Sum of money case filed by DLPC v. Queensland Hotel and Teodeorico Adarna;

RULE: if defendant is a resident who is temporaily out the Philippines, attachment of property in an action in personam, is NOT always necessary in order for the court to acquire jurisdiction over the case.

SECTION 2ISSUANCE AND CONTENTS OF ORDER OF ATTACHMENT May be issued ex-parte OR upon motion with notice and hearing Who: 1. By the court in which action is pending 2. By CA or 3. SC Order must require the sheriff of the court to attach so much of the property in the Philippines of the party against whom it is issued Property must one not exempt from execution Attachment must be as it is sufficient to satisfy the applicants demand Except: such party makes a deposit or gives a bond in: 1. an amount equal to that fixed in the ordersufficient to satisfy the applicants demand OR 2. equal to the value of the property to be attached as

Sharing is Good Karma Page 1

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU compalitn contained an ex-parte application for WPA RTC: Granted WPA and fixed attachment bond summons, copy of complaint, WPA, copy of attachment bond SERVED SIMULTANEOUSLY to Queensland sheriff seized properties MOTION TO DISCHARGE WPA Lack of jurisdiction because at the time order of attachment was promulgated and WPA issued, RTC had no jurisdiction over the person of defendant yet. ORDER may 3, 1989 WPA issued May 11, 1989 Summons May 12, 1989 HELD: WPA VALID Rationale: 1. Before acquisition of jurisdiction over the person of defendant, application for provisional remedies can be done. 2. RULE: after action is properly commenced by filing of by the filing of the complaint and the payment of all requisite docket and other fees the plaintiff may apply for and obtain a writ of preliminary attachment upon 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. 3. PRACTICE SANCTIONED BY 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 exparte at the commencement of the action if it finds the application otherwise sufficient in form and substance. 4. GENERAL RULE: whatever be the acts done by the Court prior to the acquisition of jurisdiction over the person of defendant, as above indicated issuance of summons, order of attachment and writ of attachment (and/or appointments of guardian ad litem, or grant of authority to the plaintiff to prosecute the suit as a pauper litigant, or amendment of the complaint by the plaintiff as a matter of right without leave of court 30 and however valid and proper they might otherwise be, these do not and cannot bind and affect the defendant until and unless jurisdiction over his person is eventually obtained by the court, either by service on him of summons or other coercive process or his voluntary submission to the court's authority.

RIZADA, RESCI ANGELLI 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)

Note: RTC denied motion to discharge writ on the ground of irregular issuance because it is at the same time applicants cause of action in the MAIN case; this cannot be resolved on a mere motion. Hearing on the matter must be had on the trial court.

ORDER issued August 20, 1990 WPA issued September 19 Summons + order + WPA September 20 at Evangelistas residence MOTION TO DISCHARGE WRIT want of jurisdiction over the person of the Spouses Evangelista HELD: WPA VALID; JURISDICTION OVER PERSON OF THE DEFENDANT NOT NECESSARY IN THE ISSUANCE OF THE WRIT OF PRELIMINARY ATTACHMENT Rationale: 1. The ONLY requisite for the ISSUANCE of the writ is the AFFIDAVIT and BOND of the applicant. 2. SC cited the case of DLPC v. CA 3. It is clear that WPA may issue even before summons is served upon defendant although the writ CANNOT BIND and affect him until jurisdiction over his person is eventually obtained. Therefore, when sheriff commences implementation of the WPA, service of summons should be simultaneously made. 4. THREE STAGES: a. Court issues the ORDER granting the application b. WPA issued pursuant to the order granting the writ c. Writ is Implemented. For the initial 2 stages, jurisdiction over person of defendant NOT necessary but once implementation commences, court must have acquired jurisdiction over the defendant because without such, court has no power and authority to act in any manner against defendant.

4.

3.

CURATERO V. CA Sum of money case filed by Cuartero V. Spouses Evangelista with prayer for WPA Ground for WPA: fraud in contracting the debt or incurring the obligation upon which the action is brought which comprises a ground for attachment. Cuartero alleges that Spouses Evangelista induced him to grant loan by issuing postdated checks to cover the installment payments a separate sset of postdated checks for payment of the stipulated interest. (Evangelista countered that: fraud 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 Sharing is Good Karma Page 2

SALAS V. ADIL Civil case for annulment of deed of sale and damages filed by Spouses YU v. spouses Salas Ground for WPA Spouses Salas have removed or disposed of their properties or are about to do so with intent to defraud their creditors especially the Yus RTC: Issued WPA ex-parte against the properties of Spouses salas upon filing of attachment bond of P200K HELD; WPA NOT VALID. The affidavit in support of the preliminary attachment was stated in general terms without specific allegations of instances to show the reason by plaintiffs believe that defendants are disposing of their properties in fraud of creditors. It was incumbent upon Judge Adil to give notice to Spouses Salas and to allow them to present their position and allow evidence to be received. Rationale:

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU 1. RULE: PA is a rigorous remedy which exposes the debtor to humiliation and annoyance, such it should not be abused as to cause unnecessary prejudice. DUTY OF THE COURT Ensure that all the requisites of the law have been complied with; otherwise judge acts in excess of his jurisdiction and the WPA so issued shall be null and void. CLAIM FOR UNLIQUIDATED DAMAGES Writ of attachment is not available in a suit for damages where amount claimed is contingent or unliquidated. 2.

RIZADA, RESCI ANGELLI The AFFIDAVIT and BOND required by next preceding section, must be duly filed with the court before the order issues. KO GLASS CO, INC. V. VALENZUELA FACTS: Antonio Pinzon filed a recovery of sum of money case v. KO Glass. Ground for WPA: 1. Defendant is a foreginder 2. That he has sufficient cuase of action against the said defendant 3. And that there is no sufficient security for his claim against the defendant in the event a judgment is rendered in his favor. KO GLASS MOTION TO QUASH THE WRIT: 1. Affidavit did nto state that the amount of plaintiffs claim was above all legal set offs or counterclaims, as required by Section 3, rule 57; 2. Did not state that there is no other sufficient security for the lcaim sought to be recovred by the action; 3. Affidavit did not specify any of the grounds enumerated in section 1. RTC issued still the WPA HELD: ISSUANCE OF WPA NOT VALID. Affidavit of plaintiff failed to allege the requisites prescribed for the issuance of a writ of preliminary attachment, which 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. Rationale: 1. Requirements for issuance preliminary attachment: of writ of

2.

1.

3.

5.

LA GRANJA V. SAMSON FACTS: Case of recovery of sum of money filed by La Granja Inc v. Chua Bian, Chua Yu lee and Chua Ki with prayer for issuance of wPA Ground for WPA: complaint was accompanied with an AFFIDAVIT of the manager of La Granja Inc, wherein it alleged that said defendants have disposed or are disposing of their properties in favor of Asiatic Petroleum Co., with intent to defraud their creditors. RTC judge required La Granja to present evidence to substantiate his allegation before granting the petition BUT La Granja refused to comply RTC dimissed petition for an order of attachment La granja filed case for MANDAMUS to compel the court to issue the WPA ISSUE: Will Mandamus lie? NO. HELD: mere filing of an affidavit executed in due form is NOT SUFFICIETN to compel a judge to issue an order of attachment. 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 is discretionary on the part of the court. Rationale: 1. Affidavit filed by la Granja must not have satisfied Judge Samson in as much as he desired to 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 credit given to it by the judge and its acceptance or rejection, upon his sound discretion. 2. So when he required presentation of evdice, he has done nothing more than an exercise of sound discretion in determining the sufficiency of the affidavit. 3. PETITION OF MANDAMUS IS DENIED.

Affidavit of the applicant, or some other person who personally knows the facts, showing that: a. sufficient cause of action exists b. the case is one of those mentioned in Section 1, Rule 57 c. there is no other sufficient security for the claim sought to be enforced by the action, and that d. the amount due the 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 garanted above all legal counterclaims. While Pinzon 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

SECTION 3AFFIDAVIT AND BOND REQUIRED ORDER OF ATTACHMENT granted only 1. When it appears by AFFIDAVIT of applicant OR some other person who personally knows the facts that: a. A sufficient cause of actions exists b. The case is one of those mentioned in Section 1 hereof; c. That there is no other sufficient security for the claim sought to be enforced by the action AND d. That the amount due to the 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.

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 granted above all legal counter-claims." It has been held that the failure to allege in

the affidavit the requisites prescribed for the issuance of a 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. 2. GUZMAN V. CATOLICO FACTS: Recovery of sum of money case filed by Catolico v. Guzman as his fees for services rendered as the lawyer of Guzman with prayer for WPA

Sharing is Good Karma Page 3

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU Ground for WPA: "That the herein defendant is

RIZADA, RESCI ANGELLI FACTS: Sum of money case filed by Jardine v. Impact ground for WPA: XXXXD. Defendant corporation, Ricardo de Leon and Eduardo de Leon have no visible other sufficient security for the claim sought to be enforced by this action of plaintiff other than their real and personal

trying to sell and dispose of the properties adjudicated to him, with intention to defraud his creditors, particularly the herein plaintiff, thereby rendering illusory the judgment that may be rendered against him, inasmuch as he has no other properties outside the same to answer for the fees the court may fix in favor of the plaintiff, this case being one of those mentioned by the Code of Civil Procedure warranting the issuance of a writ of preliminary attachment

properties which are located in Metro Manila and in the province of Rizal, Province of Nueva Ecija or elsewhere.

1. 2.

3.

MOTION TO CANCEL WRIT: on the ground that it had been improperly, irregularly and illegally issued, there being no allegation, either in the complaint or in the affidavit solemnizing it, that: there is no other sufficient security for the claim sought to be enforced by the action; that the amount due to the plaintiff, above the legal set-off and counterclaim, is as much as the sum of which the preliminary attachment has been granted, and that the affidavit of the plaintiff is base in mere information and belief. RTC still upheld the validity of the WPA HELD: WPA ISSUED IS NO VALID. 2 requisites were omitted in the affidavit. there is no allegation, either in the complaint or in affidavit solemnizing it, to the effect that there is no other sufficient security for the claim which the plaintiff seeks to enforce by his action, and that the amount due him from the defendant, above all legal set-offs and counterclaims, is as much as the sum for which the writ of preliminary attachment has been granted. Rationale: 1. Where the statutes requires the affidavit to show that defendant is indebted to plaintiff in an amount specified, or that the latter is entitled to recover such an amount, over and above all legal payments, set-offs, or counterclaims, compliance with this requirement is essential to confer jurisdiction to issue the writ. 2. An affidavit is fatally defective where it fails to comply, at least substantially, with a statutory requirement that is shall state that the indebtedness for which the action is brought has not been secured by any mortgage or lien upon real or personal property, or any pledge of personal property, or, if so secured, that the security has become valueless. 3. failure to allege in a complaint or in the affidavit solemnizing it, or in a separate one, the requisites for the issuance of a writ of preliminary attachment 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 sought, renders a writ of preliminary attachments issued against the property of a defendant fatally defective, and the judge issuing it acts in excess of his jurisdiction.

E. Plaintiffs action against defendant corporation is based upon documents and therefrom a sufficient cause of action exists. MOTION TO SET ASIDE WRIT: contending that: 1. the grounds alleged by the plaintiff in its application for a writ of attachment are not among the grounds specified under Section 1 of Rule 57; 2. that the defendants have other sufficient security; 3. that there was no affidavit of merit to support the application for attachment as required by Section 3 of Rule 57 and that 4. the verification of the complaint was defective as it did not state that the amount due to the plaintiff above all legal set-ups or counterclaims is as much as the sum for which the order is sought. RTC issued WPA but CA annulled it; hence, jardines recourse to the SC. HELD: WPA ISSUED IS INVALID due to the absence of the ff. allegations: (1) that there is no sufficient security for the claim sought to be enroced 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 Rationale: 1. Jardine 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. In the case at bar, where the records undeniably reveal that: the complaint was filed on September 28, 1979; the writ of preliminary attachment was issued on October 16, 1979; the motion to annul preliminary attachment dated October 19, 1979 was filed on the same day; the answer of defendant IMPACT dated October 30, 1979 was received by the RTC Pasig only on November 5, 1979, 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.

(1) (2) (3) (4)

3.

JARDINE MANILA FINANCE INC. V. CA

Sharing is Good Karma Page 4

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU 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. 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." 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, 3. 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. In fact, in such cases, the defect cannot even be cured by amendment. 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. 5. 2.

RIZADA, RESCI ANGELLI

RTC: issued WPA HELD: The complaint did not provide for a sufficient basis for the issuance of a writ of preliminary attachment. It is not enough for the

Rules of Court for the issuance of a writ of preliminary attachment.

complaint to ritualistic ally cite, as here, that the defendants are "guilty of fraud in contracting an obligation." An order of attachment cannot be
issued on a general averment, such as one ceremoniously quoting from a pertinent rule.6 The need for a recitation of factual circumstances that support the application becomes more compelling here considering that the ground relied upon is "fraud in contracting an obligation." The complaint utterly failed to even give a hint about what constituted the fraud and how it was perpetrated. Fraud cannot be presumed. The respondent judge thus failed in this duty to ensure that, before issuing the writ of preliminary attachment, all the requisites of the law have been complied with. He acted in excess of his jurisdiction and the writ he so issued is thus null and void. Spouses Ting privy only to the 1st cause of action: What is more, the respondent judge plainly ignored that the application for preliminary attachment rests on "fraud in contracting" the trust receipt agreements. The complaint itself, save for the unwarranted sweeping reference to "defendants," alleged that only Consolidated Bank, as principals, and Liu Suy Lin Angelo Leonar, and Lu Cheng Peng, as guarantors, were privy to the trust receipt agreements under the second cause of action. Petitioner Roberto Ting's involvement is limited only to the promissory notes under the first cause of action. two (2) causes of action had been misproperly joined: Here, the two causes of action arose from different transactions. There was no "series of transactions" to speak of. But above all, the complaint can conceivably affect adversely petitioner Roberto Ting under the first cause of action only but not in the second cause of action. CU UNJIENG V. GODDARD Doctrine: a fatally defective writ of attachment is NOT amendable FACTS: HSBC V. Cu unjieng: it alleged that Cu Unjieng entered into a fraudulent conspiracy or combination with one Fernandez, by which the conspirators would hypothecate and pledge forged securities of various kinds with the various banking institutions and other commercial firms of the City of Manila, and pursuant to said fraudulent conspiracy, secured credit with the bank, and the plaintiff was defrauded by the defendants and Fernandez in the sum of P1,411,312.80. Simultaneously with the filing of the complaint, plaintiffs asked for a writ of attachment, which was granted. Ground for WPA: The affidavit filed at the time reads: AFFIDAVIT B.C.M. Johnston, of legal age and resident of the City of Manila, being duly sworn, states: That he is the Manager of the Hongkong and Shanghai Banking Corporation, the plaintiff in the above-entitled cause, and that he knows that there exists a cause of

4.

4.

TING V. VILLARIN Doctrine: an order of attachment cannot be issued ona general averment, such as one ceremoniously quoting from a pertinent rule. FACTS: Consolidated Bank and Trust Company filed a complaint for a sum of money with prayer for a writ of preliminary attachment against Perlon Textile Mills and its directors. Consolidated Bank actually sued on two (2) causes of action: 1. 1st Recovery on several promissory notes allegedly obtained for the defendant corporation by its duly authorized officers Lu Cheng Peng, Teng See, and Roberto Ting who signed the promissory notes in their personal and official capacities thereby binding themselves jointly and severally to Consolidated Bank for the payment of the promissory notes. 2. 2nd dwells on several violations of trust receipt agreements which Perlon Textile executed in favor of Consolidated Bank. Ground for WPA: "fraud in contracting an obligation" thus 16. Defendants are guilty of fraud in contracting

their obligations more specifically illustrated by their violation of the trust receipt agreement which is a ground defined under Sec. 1, Rule 57 of the

action in favor of said plaintiff and against the defendants, as appears in the complaint on file in this

case, reference to which is hereby made as an integral part of this affidavit;

Sharing is Good Karma Page 5

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU

RIZADA, RESCI ANGELLI ORDER issued September 7, 1995 WPA issued September 15, 1995 (ONLY AFTER WPA was issued that Carlos filed a bond of 20M with SIDDCOR as surety) CA dissolved writ: there was no sufficient cause of action to warrant the WPA; Carlos only alleged general averments in order to support his prayer SC affirmed. WRONGFUL ATTACHMENT HELD: Accordingly, they were entitled to damages under Section 20, Rule 57 of the then Rules of Civil Procedure, which governed claims for damages on account of unlawful attachment.

That the complaint is one for the recovery of money on a cause of action arising from a fraud; and That, as set out in the complaint, the defendants in

said cause have been guilty of fraud in contracting the debt in incurring the obligation upon which this action is brought.
(Sgd.) B.C.M. JOHNSTON MOTION TO DISCHARGE: on the ground that it had been improperly and irregularly issued: 1. Affidavit fails to state that there is no other sufficient security for the claim sought to be enforced by the action and that 2. the amount due the plaintiff involves as much as the sum for which the order of attachment was granted, Shortly after the hearing to discharge the attachment had begun, plaintiff asked leave to file an amended affidavit in support of its petition for a writ of attachment. RTC: After oral and written arguments, the respondent judge entered an order admitting the amended affidavit of attachment. RTC:upheld validity of the WPA HELD: AFFIDAVIT WAS FATALLY DEFECTIVE. WRIT OF ATTACHMENT INVALID. It is defective in (a) that there is no allegation, either in the affidavit or the complaint, that there was no other sufficient security for the claim sought to be enforced by the action and (b) that the amount due to the plaintiff above all legal setoffs or counterclaims is as much as the sum for which the order is granted. Rationale: 1. In Winters vs. Pearson (72 Cal., 553), that court used the following language: On a motion to discharge a writ of attachment, on the ground that it was improperly or irregularly issued, the affidavit on which the writ was issued is not amendable. If the writ was improperly or irregularly issued, it must be discharged. Reason: To allow the affidavit to be made good by amendment, and upon such action refused to discharge the writ, would, in our judgment, violate the requirements of the section just above cited. 2. It therefore allows that where the affidavit for attachment is fatally defective, the attachment must be held to have been improperly or irregularly issued and must be discharged, and such fatal defect cannot be cured by amendment. The writ of attachment in this case should therefore have been discharged.

by the affidavit of the applicant or SOME OTHER PERSON who personally knows the facts xxx there is no other sufficient security for the claim sought to be enforced by the action 7. SALGADO V. CA Doctrine: affidavit was shown to be false. WPA is invalid. FACTS: PCIB filed a case against Spouses Salgado to recover on a promissory note of 1.5M with prayer for preliminary attachment Ground for WPA: 1. Spouses salgado 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; 2. Salgado spouses are guilty of fraud in contracting their obligation and 3. Have concealed, removed or disposed of the properties mortgaged or assigned to plaintiff or are concealing, removing or disposing or about to do so, with intent to defraud creditor; 4. That the obligation sought to be enforced is genuine and therefore, a sufficient cause of action exists and that 5. There no sufficient security for the claim sought to be enforced by the action. ATTACHED to complaint was the AFFIDAVIT of Mrs. Helen osias, senior branch credit division manager of PCIB where she stated that, THERE IS NO SUFFICEN SECURITY FOR THE CLAIM SOUGHT TO BE ENFROCED BY THE ACTION RTC issued WPA upon filing of the bond MOTION TO QUASH WRIT: 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, Spouses salgado 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. HELD: 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

affidavit and bond must be duly filed with the court BEFORE the order issues 6. CARLOS V. SANDOVAL FACTS: carlos is the sole surviving compulsory heir of his parents. His brother, Teofilo died intestate and at the time of his death, he cohabited with Felicidad Sandoval and had Teofilo II as child. This marriage turned out to be false. Case arose because Carlos entered into agreements regarding properties left by decedent Teofilo and since he discovered that Teofilo and Felicidad was never married he filed a complaint for nullification of these agreements Ground for WPA: _________ Sharing is Good Karma Page 6

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU 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. NOTE: 1. The CHIEF PURPOSE of the remedy of attachment is: a. 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 b. 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. 2. 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

RIZADA, RESCI ANGELLI thereof to post the required bond of 100K as required by section 4 HELD: NO COMPLIANCE WITH SECTION 4. JUDGE ISSUED THE WPA although plaintiffs have not yet posted the required attachment bond. What was filed was merely an UNDERTAKING. It was only a promissory note in the form of an affidavit executed by the bondsman victor, Andres and Mariano, further denominated as an attachment bond this is NOT the attachment bond required by law. Failure to give such bond is FATAL and attachment issued on the truck of Arellano without the necessary bond is INVALID. 2. CALDERON V. IAC DOCTRINE: The liability of the surety on the bond subsists because the final reckoning is when the Court shall finally adjudge that the attaching creditor was not entitled to the issuance of the attachment writ," Nature of the case: LBC is filing a case for damages against Calderon for malicious filing of a writ of preliminary attachment. To guarantee that, LBC filed a counterbond. Upon such filing, is the attachment bond of Calderon automatically dismissed from liability? On the ground that by filing a counterbond, it had waived any defect in the issuance of the writ? NO. attachment bond still liable.

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 x x x there is no other sufficient security for the claim sought to be enforced by the action.

3.

The REASON FOR THE RULE prohibiting attachment where indebtedness was already secured i 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. 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.

4.

affidavit must show that case is one of those mentioned under section 1 8. PCIB V. ALEJANDRO Check prior case and summary It isnt among the cases in section 1 because there was NO FRAUD in contracting the obligation nor were defendants non-residents of the Philippines SECTION 4CONDITION OF APPLICANTS BOND Who: Party applying for the ORDER must thereafter: 1. Give a bond executed to the adverse party in the amount fixed by the court in its order granting issuance of the writ, 2. BOND conditioned that: a. the applicant will pay all the costs which may be adjudged to the adverse party AND b. all damages which he may sustain by reason of the attachment when: if the court shall finally adjudge that the applicant was not entitled thereto. 1. ARELLANO V. FLOJO FACTS: Arellano filed an administrative case against Judge flojo,et.al. for issuing a writ of attachment despite the failure of the applicant

FACTS: Calderon bought from Schulze the following: LBC and 5 affiliate companies. Now, Bureau of Customs suspended the operations of LBC for failure to pay the amount of P1,475,840.00 representing customs taxes and duties incurred prior to the execution of the sale. In order to lift the suspension Calderon paid the sum of P606,430.00 to the Bureau of Customs. GROUND FOR WPA: Calderon filed a complaint against Schulze to recover said amount of P1,475,840.00, with damages by reason of breach of warranty. In the same complaint, the petitioner prayed for a preliminary attachment, alleging: that private respondents had deliberately and wilfully concealed from his knowledge such staggering liability of the LBC for the purpose of misleading him into buying the six aforesaid companies; and that private respondent Schulze is about to depart from the Philippines in order to defraud his creditors. ATTACHMENT BOND: To support the petition for preliminary attachment, the petitioner posted a surety bond of P1,475,840.00. RTC: issued a writ of preliminary attachment, whereupon properties of the private respondents were attached and their bank deposits were garnished. CALDERON: filed an amended complaint, alleging that while the liabilities of LBC are reflected in its books, the aforesaid amount was fraudulently withdrawn and misappropriated by private respondent Schulze. SCHULZE: 1. the amount of P1,475,840.00 due to the Bureau of Customs represents the duties and taxes payable out of the advanced payments made by LBC's client, Philippine Refining Company after Calderon himself had taken control of the management of LBC; 2. That these deposit payments were properly recorded in the books of the corporation and existing as part of the corporate funds; 3. that Schulze fully disclose and explained to Calderon that these customer's advanced deposit payments (including those of the PRC) are to be paid to the

Sharing is Good Karma Page 7

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU Bureau of Customs when their corresponding customs taxes and duties become due; 4. that during this phase of the negotiation, Calderon and his representatives inspected and studied the corporate books and records at will and learned the daily operations and management of LBC; 5. that the petitioner did not pay out of his own pocket but out of the LBC funds the said amount of P606,430,30 demanded by the Bureau of Customs, as evidenced by a manager's check No. FEBTC 25092 and another facility negotiated with the Insular Bank of Asia and America; and 6. that private respondents are setting up a counterclaim for actual, moral and exemplary damages as well as attorney's fees, as a consequence of the filing of the baseless suit and the wrongful and malicious attachment of their properties COUNTERBOND OF SHULZE RTC: WPA discharged RTC: dismissed Calderons complaint and held him and his surety liable to pay damages CA: affirmed RTC; amount of damages reduced

RIZADA, RESCI ANGELLI to the adverse party in an amount to be fixed by the judge, not exceeding the applicant's claim, conditioned that the latter will pay all the costs which may be adjudged to the adverse party and all damages which he may sustain by reason of the attachment, if the court shall finally adjudge that the applicant was not entitled thereto. It is clear from the above provision that the responsibility of the surety arises "if the court shall finally adjudge that the plaintiff was not entitled thereto."

In Rocco vs. Meads, 96 Phil. Reports 884, we held that the liability
attaches if the plaintiff is not entitled to the attachment because the requirements entitling him to the writ are wanting, or if the plaintiff has no right to the attachment because the facts stated in his affidavit, or some of them, are untrue. It is, therefore, evident that upon the dismissal of an attachment wrongfully issued, the surety is liable for damages as a direct result of said attachment.

ISSUE: WON there was a ground for attachment. NONE RATIONALE: Whether or not the amount of P1,475,840.00 was duly disclosed as an outstanding liability of LBC or was misappropriated by private respondent Schulze is purely a factual issue. That Calderon was clearly in bad faith when he asked for the attachment is indicated by the fact that he failed to appear in court to support his charge of misappropriation by Schulze, and in effect, preventing his being crossexamined, no document on the charges was presented by him. SCHULZE: they took it upon themselves to prove that they did not conceal or withhold form Calderons knowledge the deposits made by PRC with LBC and they did nto withdrew and misappropriate the same: 1. Financial statement of LBC disclosed that liabilities of LBC as 4.5M under the heading Customers Deposit which includes PRCs 1.4M 2. All these financial statements were turned over, examined by Calderon and his staffs 3. No proof of tampering Attachment was maliciously sued out. LIABLITY FOR DAMAGES: While as a general rule, the liability on the attachment bond is limited to actual damages, moral and exemplary damages may be recovered where the attachment was alleged to be maliciously sued out and established to be so. ISSUE: WON surety is liable for damages on its contracted suretyship notwithstanding the dissolution of the writ of preliminary attachment, as a consequence of the filing of the defendant's counter- bond, whereby levied properties were ordered by the court returned to private respondents and the notices of garnishment issued in connection therewith ordered lifted. YES CONTENTION OF SURETY: It contends that the dissolution of the attachment extinguishes its obligation under the bond, for the basis of its liability, which is wrongful attachment, no longer exists, the attachment bond having been rendered void and ineffective, by virtue of Section 12, Rule 57 of the Rules of Court HELD: While Section 12, Rule 57 of the Rules of Court provides that upon the filing of a counterbond, the attachment is discharged or dissolved, nowhere is it provided that the attachment bond is rendered void and ineffective upon the filing of counterbond. The liability of the attachment bond is defined in Section 4, Rule 57 of the Rules of Court, as follows: Sec. 4. Condition of applicant's bond. The party applying for the order must give a bond executed

ISSUE: WON the subsequent filing by private respondents of a counter-bond to discharge the writ of preliminary attachment constitute a waiver on any defect in the issuance of the attachment writ. NO HELD: Equally untenable is the Surety's contention that by filing a counterbond, private respondents waived any defect or flaw in the issuance of the attachment writ, for they could have sought, without need of filing any counterbond, the discharge of the attachment if the same was improperly or irregularly issued, as provided in Section 13, Rule 57 of the Rules of Court. Whether the attachment was discharged by either of the two (2) ways indicated in the law, i.e., by filing a counterbond or by showing that the order of attachment was improperly or irregularly issued, the liability of the surety on the attachment bond subsists because the final reckoning is when "the Court shall finally adjudge that the attaching creditor was not entitled" to the issuance of the attachment writ in the first place. The attachment debtor cannot be deemed to have waived any defect in the issuance of the attachment writ by simply availing himself of one way of discharging the attachment writ, instead of the other. Moreover, the filing of a counterbond is a speedier way of discharging the attachment writ maliciously sought out by the attaching creditor instead of the other way, which, in most instances like in the present case, would require presentation of evidence in a full-blown trial on the merits and cannot easily be settled in a pending incident of the case. SECTION 5MANNER OF ATTACHIGN PROPERTY The sheriff enforcing the writ shall, without delay and with all reasonable diligence: 1. Attach, to await judgment and execution in the action, only so much of the property in the Philippines of the party against whom the writ is issued 2. Attach Property NOT EXEMPT from execution 3. Attach only as may be sufficient to satisfy the applicant demand, unless the former makes a deposit with the court from which the writ was issued OR gives a counterbond executed to the applicant 4. Attachment must be in an amount equal to the bond fixed by the court in the order of attachment OR to the value of the property to be attached, exclusive of costs.

(principle of prior or contemporaneous service of summons)

NO LEVY ON ATTACHMENT pursuant to the writ issued under section 2 hereof shall be enforced, unless: 1. It is preceded OR contemporaneously accompanied by: a. Service of summons b. Copy of complaint c. Application for attachment

Sharing is Good Karma Page 8

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU d. Applicants affidavit and bond AND e. The order and writ of attachment Whom: on the defendant WITHIN the Philippines. The requirement of prior or contemporaneous service of summons shall NOT APPLY where: 1. Summons could not be served personally or by substituted service despite diligent efforts OR 2. Defendant is a resident of the Philippines temporarily absent there from OR 3. Defendant is a non-resident of the Philippines OR 4. Action is one in rem or quasi in rem. Principle: Properties which cannot be attached are: 1. those statutorily exempt from attachment 2. title is not in the name of the defendant, unless it is shown that he has beneficial interest in property. G.R. No. L-39596 March 23, 1934 "CONSULTA" No. 1013 OF THE REGISTER OF DEEDS OF TAYABAS. GOTAUCO & CO., applicant-appellant, vs. THE REGISTER OF DEEDS OF TAYABAS, oppositor-appellee Doctrine: Register of deeds denied to accept the property of a judgment debtor, which is his share as heir in the decedents estate, on the ground that the same land was not in the debtors name but that of the decedent. Was this proper? NO. register should have accepted and inscribed it upon levy on execution in order not to deprive the judgment creditor fo the benefit of lawful execution. FACTS: Exhibits A and B were presented to the register, by which a levy of execution against the judgment debtor, Rafael Vilar

RIZADA, RESCI ANGELLI factors beyond the control of either plaintiff or the process server, provided that such service is effected within a reasonable period thereafter. G.R. No. 107303 February 21, 1994 EMMANUEL C. OATE v. ABRUGAR 2ND DIVISION OF SC DECISION Nature of the case: Money in the banks were garnished even before the WPA and summons were received by the defendant. Reason why WPA was given effect: sheriff failed to give the summons to the defendant because there was no person of sufficient age and discretion there. Summons and WPA were given 6 days later but before that, money had already been garnished. Proper? YES. Although the levy on attachment of properties had been made before the trial court acquired jurisdiction over them, the subsequent service of summons on them cured the invalidity of the attachment. FACTS: Sun Life filed a complaint for a sum of money with a prayer for the immediate issuance of a writ of attachment against Onate and Noel L. Dio RTC: issued WPA GROUND: fraud in contracting their obligations Onate and dino offered to sell to Sun Life 46.9M worth of treasury bills at the discounted price of 39.5M. Sun life paid the price by means of check but Onate and Dino delivered instead a promissory note in which it was made to appear that transaction was a money placement instead of sale of treasury bills. Sun life alleged this 39.5M was withdrawn from Urban Bank to BPI to the uunnamed account in BPI and PNB. January 3: RTC amended WPA: upon Sun Life's exparte motion, the trial court amended the writ of attachment to reflect the alleged amount of the indebtedness. That same day, Deputy Sheriff Arturo C. Flores, accompanied by a

was made on fifteen contracts of land described in Exhibit B and registered in the name of Florentino Vilar, the register

properly denied the inscription of said levy of execution because the title to the lands was in the name of Florentino Vilar and no evidence was submitted that Rafael Vilar had any present or possible future interest in the land. Register of Deeds was then presented to a copy of a petition filed in the Court of First Instance of the province, entitled, "Intestado del Finado Florentino Vilar", from which he could

representative of Sun Life, attempted to serve summons and a copy of the amended writ of attachment upon petitioners

properly infer that Florentino Vilar was dead and that the judgment debtor Rafael Vilar is one of the heirs of the deceased Florentino Vilar.

Although the value of the participation of Rafael Vilar in the estate of Florentino Vilar was indeterminable before the final liquidation of the estate, nevertheless, the right of participation in the estate and the lands thereof may be attached and sold. The real test: Does the judgment debtor hold such a beneficial interest in the property that he can sell or otherwise dispose of it for value?

HELD: Nothing appears in this record to indicate that Rafael Vilar being sui juris could not dispose of his interest or share as heir in the estate of Florentina Vilar. Having this right, he could by a conveyance defeat pro tanto the provisions of section 450 of the Code of Civil Procedure and thus deprive the judgment creditor of the benefit of a lawful execution. with the knowledge which he them had, the register should have accepted and inscribed Exhibit A, B and D. ------o0o-------Principle: Jurisdiction over Person at time of implementation of the writ. 2nd division of the SC held that an EXCEPTION to the established rule on the enforcement fo the writ can be made where a previous attempt to serve the summons and the Writ of attachment failed d/t

at their known office address at 108 Aguirre St., Makati but was not able to do so since there was no responsible officer to receive the same. 1 Nonetheless, Sheriff Flores proceeded, over a period of several days, to serve notices of garnishment upon several commercial banks and financial institutions, and levied on attachment a condominium unit and a real property belonging to petitioner Oate. January 9: Summons was eventually served Onate and Dino: filed an "Urgent Motion to Discharge/Dissolve Writ of Attachment." Sun Life: filed several motions to examine books of accounts and ledgers of both defendants which were granted by the RTC judge RTC: Judge issued an order (1) denying petitioners' and the co-defendants' motion to discharge the amended writ of attachment, (2) approving Sun Life's additional attachment, (3) granting Sun Life's motion to examine the BPI account, and (4) denying petitioners' motion to nullify the proceedings of January 23, 1992. CONTENTION OF ONATE: Judge Abrogar had acted with grave abuse of discretion amounting to lack or in excess of jurisdiction in: (1) issuing ex parte the original and amended writs of preliminary attachment and the corresponding notices of garnishment and levy on attachment since the trial court had not yet acquired jurisdiction over them; and (2) allowing the examination of the bank records though no notice was given to them.

ISSUE: WON WPA and notices of garnishment and levy on attachment be given effect even if court had not yet acquired jurisdiction over the person of defendants? YES. (it is one of the exceptions; since it wasnt

Sharing is Good Karma Page 9

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU

RIZADA, RESCI ANGELLI in Sievert vs. Court of Appeals, et al. 6 and BAC Manufacturing and Sales Corp. vs. Court of Appeals, et al., 7 wherein decisions this Court held that enforcement of the writ of attachment cannot bind the defendant in view of the failure of the trial court to acquire jurisdiction over the defendant through either summons or his voluntary appearance.

the sheriffs fault why summons was not contemporaneously served with the WPA)
HELD: We find both petitions unmeritorious. Petitioners initially argue that respondent Judge erred in granting Sun Life's prayer for a writ of preliminary attachment on the ground that the trial court had not acquired jurisdiction over them. This argument is clearly unavailing since it is well-settled that a writ of preliminary attachment may be validly applied for and granted even before the defendant is summoned or is heard from. 2 The rationale behind this rule was stated by the Court in this wise: A preliminary attachment may be defined, paraphrasing the Rules of Court, as the provisional remedy in virtue of which a plaintiff or other proper party may, at the commencement of the action or any time thereafter, have the property of the adverse party taken into the custody of the court as security for the satisfaction of any judgment that may be recovered. It is a remedy which is purely statutory in respect of which the law requires a strict construction of the provisions granting it. Withal no principle, statutory or jurisprudential, prohibits its issuance by any court before acquisition of jurisdiction over the person of the defendant. Rule 57 in fact speaks of the grant of the remedy "at the commencement of the action or at any time thereafter." The phrase "at the commencement of the action," obviously refers to the date of the filing of the complaint which, as above pointed out, its the date that marks "the commencement of the action;" and the reference plainly is to a time before summons is served on the defendant or even before summons issues. What the rule is saying quite clearly is that after an action is properly commenced by the filing of the complaint and the payment of all requisite docket and other fees the plaintiff may apply for and obtain a writ of preliminary attachment upon fulfilment 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 (counterclaim, cross-claim, third-party claim) and for the Trial Court to issue the writ exparte at the commencement of the action if it finds the application otherwise sufficient in form and substance. 3 ISSUE: Petitioners then contended that the writ should have been discharged since the ground on which it was issued fraud in contracting the obligation was not present. HELD: This cannot be considered a ground for lifting the writ since this delves into the very complaint of the Sun Life. As this Court stated in Cuatro v. Court of Appeals: 4 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 the motion ISSUE: Finally, petitioners argue that the enforcement of the writ was invalid since it undisputedly preceded the actual service of summons by six days at most. Petitioners cite the

HELD: We do not agree entirely with petitioners. True, this Court had held in a recent decision that the enforcement of writ of attachment may not validly be effected until and unless proceeded or contemporaneously accompanied by service of summons. 8 But we must distinguish the case at bar from the Sievert and BAC Manufacturing cases. In those two cases,summons was never served upon the defendants. The plaintiffs therein did not even attempt to cause service of summons upon the defendants, right up to the time the cases went up to this Court. This is not true in the case at bar. The records reveal that Sheriff Flores and Sun Life did attempt a contemporaneous service of both summons and the writ of attachment on January 3, 1992, but we stymied by the absence of a responsible officer in petitioners' offices. Note is taken of the fact that petitioners Oate and Econ Holdings admitted in their answer 9 that the offices of both Brunner Development Corporation and Econ Holdings were located at the same address and that petitioner Oate is the President of Econ Holdings while petitioner Dio is the President of Brunner Development Corporation as well as a stockholder and director of Econ Holdings. Thus, an exception to the established rule on the enforcement of the writ of attachment can be made where a previous attempt to serve the summons and the writ of attachment failed due to factors beyond the control of either the plaintiff or the process server, provided that such service is effected within a reasonable period thereafter. REASONS: 1. First, there is a possibility that a defendant, having been alerted of plaintiffs action by the attempted service of summons and the writ of attachment, would put his properties beyond the reach of the plaintiff while the latter is trying to serve the summons and the writ anew. By the time the plaintiff may have caused the service of summons and the writ, there might not be any property of the defendant left to attach. 2. Second, the court eventually acquired jurisdiction over the petitioners six days later. To nullify the notices of garnishment issued prior thereto would again open the possibility that petitioners would transfer the garnished monies while Sun Life applied for new notices of garnishment. 3. Third, the ease by which a writ of attachment can be obtained is counter-balanced by the ease by which the same can be discharged: the defendant can either make a cash deposit or post a counter-bond equivalent to the value of the property attached. 10 The petitioners herein tried to have the writ of attachment discharged by posting a counter-bond, the same was denied by respondent Judge on the ground that the amount of the counter-bond was less than that of Sun Life's bond. ISSUE: Petitioners' second ground assail the acts of respondent Judge in allowing the examination of Urban Banks' records and in ordering that the examination of the bank records of BPI and PNB as invalid since no notice of said examinations were ever given them. Sun Life grounded its requests for the examination of the bank accounts on Section 10, Rule 57 of the Rules of Court HELD: It is clear from the foregoing provision that notice need only be given to the garnishee, but the person who is holding property or credits belonging to the defendant. The provision does not require that notice be furnished the defendant himself, except when there is a

Sharing is Good Karma Page 10

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU need to examine said defendant "for the purpose of giving information respecting his property. Furthermore, Section 10 Rule 57 is not incompatible with Republic Act No. 1405, as amended, "An Act Prohibiting Disclosure or Inquiry Into, Deposits With Any Banking Institution and Providing Penalty Therefore," for Section 2 therefore provides an exception "in cases where the money deposited or invested is the subject matter of the litigation." The examination of the bank records is not a fishing expedition, but rather a method by which Sun Life could trace the proceeds of the check it paid to petitioners. 2.

RIZADA, RESCI ANGELLI Oate and Econ, was present that day. Whatever the truth is, the fact is that no other attempt was made by the sheriff to serve the summons except on January 9, 1992, in the case of Oate and Econ, and on January 16, 1992, in the case of Dio. Meantime, he made several levies, which indicates a predisposition to serve the writ of attachment in anticipation of the eventual acquisition by the court of jurisdiction over petitioners.

Second. while the petition for a writ of preliminary attachment may be granted and the writ itself issued before
the defendant is summoned, the writ of attachment cannot be implemented until jurisdiction over the person of the defendant is obtained. As this Court explained, "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."

Principle: Court en back ruled that the attachment of the property before the service of summons on the defendant is INVALID even though the court later acquires jurisdiction over the defendant. At the very least, then the writ of attachment must be served SIMULTANEOUSLY with the service of summons before the writ may be enforced. As the properties were attached by the sherriff before he had served summons on them, the levies must be considered VOID. The decision of Feb. 21, 1994 was therefore reconsidered and set aside. Present rule: 1. requirement of prior or contemporaneous service of summons shall Not apply: a. where the summons could not be served personally or by substituted service despite diligent efforts, or b. the defendant is a resident of the Philippines temporarily absent therefrom; or c. the defendant is a non-resident of the Philippines or d. the action is in rem or quasi in rem. (this rule only applies to an action in personam) Service of summons after the enforcement of the levy on attachment does NOT cure the irregularities that attended such enforcement. The writ of attachment should be reserved after the service of summons. G.R. No. 107303 February 23, 1995 EMMANUEL C. OATE and ECON HOLDINGS CORPORATION, petitioners, vs. HON. ZEUS C. ABROGAR, as Presiding Judge of Branch 150 of the Regional Trial Court of Makati, and SUN LIFE ASSURANCE COMPANY OF CANADA, respondents. BRUNNER DEVELOPMENT CORPORATION, petitioner, vs. HON. ZEUS C. ABROGAR, as Presiding Judge of Branch 150 of the Regional Trial Court of Makati, and SUN LIFE ASSURANCE COMPANY OF CANADA, respondents. UPON RECONSIDERATION: Why referred to en banc? in view of the fact that in another decision rendered by the Third Division on the same question, it was held that the subsequent acquisition of jurisdiction over the person of a defendant does not render valid the previous attachment of his property. 1 The Court en banc accepted the referral and now issues this resolution. HELD: We hold that the attachment of petitioners' properties prior to the acquisition of jurisdiction by the respondent court is void and that the subsequent service of summons on petitioners did not cure the invalidity of such attachment. 1. No one in the offices to make a service? NOT CORRECT. This is denied by petitioners who claim that their office was always open and that Adeliza M. Jaranilla, Econ's Chief Accountant who eventually received summons on behalf of

3.

Third. Nor can the attachment of petitioners' properties

before the service of summons on them was made be justified on the ground that unless the writ was then enforced, petitioners would be alerted and might dispose of their properties before summons could be served on them. The Rules of Court do not require that issuance of the writ be kept a secret until it can be enforced. Otherwise in no case may the service of summons on the defendant precede the levy on attachment. To the contrary, Rule 57, 13 allows the defendant to move to discharge the attachment even before any attachment is actually levied upon, thus negating any inference that before its enforcement, the issuance of the writ must be kept secret. Note: a. the lifting of an attachment "may be resorted to even before any property has been levied on." b. proceedings for the issuance of a writ of attachment are generally ex parte. c. no hearing is required for the issuance of a writ of attachment because this "would defeat the objective of the remedy [because] the time which such hearing would take could be enough to enable the defendant to abscond or dispose of his property before a writ of attachment issues." It is not, however, notice to defendant that is sought to be avoided but the "time which such hearing would take" because of the possibility that defendant may delay the hearing to be able to dispose of his properties. On the contrary there may in fact be a need for a hearing before the writ is issued as where the issue of fraudulent disposal of property is raised. 17 It is not true that there should be no hearing lest a defendant learns of the application for attachment and he remove's his properties before the writ can be enforced. d. On the other hand, to authorize the attachment of property even before jurisdiction over the person of the defendant is acquired through the service of summons or his voluntary appearance could lead to abuse. It is entirely possible that the defendant may not know of the filing of a case against him and consequently may not be able to take steps to protect his interests.

Nor may sheriff's failure to abide by the law be excused on the pretext that after all the court later acquired jurisdiction over petitioners. More important than the need for insuring success in the enforcement of the writ is the need for affirming a principle by insisting on that "most fundamental of all requisites the jurisdiction of the court issuing

Sharing is Good Karma Page 11

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU attachment over the person of the defendant." 18 It may be that the same result would follow from requiring that a new writ be served all over again. The symbolic significance of such an act, however, is that it would affirm our commitment to the rule of law. 19 ISSUE: on the matter of examining the bank accounts; this concerns the nature of the transaction between petitioner Brunner and Sun Life. Money placement or sale of treasury bills? Is the money withdrawn and transferred, makes it fall under subject matter in litigation? NO. HELD: 1. The money is NOT in litigation. Petitioners do not deny receipt of P39,526,500.82 from Sun Life. Hence, whether the transaction is considered a sale or money placement does not make the money the "subject matter of litigation" within the meaning of 2 of Republic Act No. 1405 which prohibits the disclosure or inquiry into bank deposits except "in cases where the money deposited or invested is the subject matter of litigation." Nor will it matter whether the money was "swindled" as Sun Life contends.

RIZADA, RESCI ANGELLI Zachry, however, not only refused to acknowledge the indebtedness but continually failed to submit to VBC a statement of accumulated costs, as a result of which VBC was prevented from checking the accuracy of the said costs VBC wrote Zachry a letter demanding compliance with its obligations. 9 Zachry still failed to do so. VBC made representations to pursue its claim, including a formal claim with the Officer-in-Charge of Construction, NAVFAC Contracts, Southwest Pacific, 10 which also failed. Hence, on 20 March 1990, VBC filed a Complaint against Zachry for the collection of the payments due it with a prayer for a writ of preliminary attachment over Zachry's bank account in Subic Base and over the remaining thirtyone undelivered housing units which were to be turned over to the US Navy by Zachry on 30 March 1990. FIRST COMPLAINT: Complaint alleges that defendant Zachry "is a foreign corporation with address at 527 Longwood Street, San Antonio, Texas, U.S.A. and has some of its officers working at U.S. Naval Base, Subic Bay, Zambales where it may be served with summons." RTC: order to issue WPA made and attachment bond fixed March 26 WPA issued March 27 WPA served, together with the summons, a copy of the complaint with annexes, the bond, and a copy of the order of attachment, SHERIFFS RETURN: upon defendant H.B. Zachry Company (International) at its field office in U.S. Naval Base, Subic Bay, Zambales thru Ruby Apostol who acknowledged receipt thereof. Mr. James M. Cupit, defendant's authorized officer was in their Manila office at the time of service. MARCH 27 VBC filed an Amended Complaint to implead as additional defendants the US Navy Treasury Office-Subic Naval Base and Captain A.L. Wynn, an officer of the US Navy, against whom VBC prayed for a restraining order or preliminary injunction to restrain the latter from preparing the treasury warrant checks to be paid to Zachry and the former from signing the said checks and to restrain both from making any further payments to Zachry. It also amended paragraph 2 on the status and circumstances of Zachry as follows: Defendant, H.B. Zachry Co. (International) . . . is a foreign corporation with address at 527 Longwood Street, San Antonio, Texas, U.S.A. and may be

2.

Second. The examination of bank books and records cannot

be justified under Rule 57, 10. Since, as already stated, the attachment of petitioners' properties was invalid, the examination ordered in connection with such attachment must likewise be considered invalid. Under Rule 57, 10, as quoted above, such examination is only proper where the property of the person examined has been validly attached.

G.R. No. 106989 May 10, 1994 H.B. ZACHRY COMPANY INTERNATIONAL, petitioner, vs. HON. COURT OF and VINNEL-BELVOIR CORPORATION, respondents G.R. No. 107124 May 10, 1994 VINNEL-BELVOIR CORPORATION, petitioner, vs. THE COURT OF APPEALS and H.B. ZACHRY COMPANY INTERNATIONAL, respondents Doctrine: a distinction should be made between the issuance and the enforcement of the writ. The trial court has unlimited power to issue the writ upon commencement of the action even before it acquires jurisdiction over the person of the defendant, but enforcement thereof can only be validly done after it shall have acquired jurisdiction. FACTS: Ground for dissolution of the writ of preliminary attachment: it was issued prior to the service of summons and a copy of the complaint on petitioner. VBC entered into a written Subcontract Agreement 5 with Zachry, a foreign corporation. The latter had been engaged by the United States Navy to design and construct 264 Family Housing Units at the US Naval Base at Subic, Zambales. VBC was to perform all the construction work on the housing project. When VBC had almost completed the project, Zachry complained of the quality of work, making it a reason for its decision to take over the management of the project, which paragraph c, Section 7 of the Subcontract Agreement authorized. However, prior to such take-over, the parties executed on a Supplemental Agreement, In accordance with the conditions in the supplemental agreement, VBC submitted to Zachry on a detailed computation of the cost to complete the subcontract on the housing project. According to VBC's computation, there remains a balance of $1,103,000.00 due in its favor as of 18 January 1990. This amount includes the sum of $200,000.00 allegedly withheld by Zachry and the labor escalation adjustment granted earlier by the US Navy in the amount of $282,000.00 due VBC.

APRIL 6 Zachry filed a motion to dismiss the complaint 17 on the ground of lack of jurisdiction over its person because the summons was not validly served on it. It alleges that it is a foreign corporation duly licensed by the Securities and Exchange Commission to do business in the Philippines18 and, pursuant to Section 128 of the Corporation Code of the Philippines, had appointed Atty. Lucas Nunag19 as its resident agent on whom any summons and legal processes against it may be served. Atty. Nunag's address is at the 10th Floor, Shell House, 156 Valero St., Makati, Metro Manila. APRIL 24 Summons and a copy of the Amended Complaint were served on Zachry through Atty. Nunag as shown in the sheriff's return dated 24 April 1990. 20 ZACHARY: filed an Omnibus Motion to dissolve the writ of attachment of 26 March 1990 "for having been issued without jurisdiction, having been issued prior to the service of summons." RTC: upheld validity of WPA CA: dissolved WPA; CA held that summons was served on Zachry only on 24 April 1990; hence, applying Sievert vs.

served with summons and all other legal processes at the following addresses: a) H.B. Zachry Company (International), U.S. Naval Base, Subic Bay, Zambales; and b) H.B. Zachry Company (International) c/o A.M. Oreta & Co., 5th Floor Ermita Building, Arquiza corner Alhambra Streets, Ermita, Manila, through its authorized officer James C. Cupit.

Sharing is Good Karma Page 12

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU

RIZADA, RESCI ANGELLI

Court of Appeals, 32 the trial court "had no authority yet to

act coercively against the defendant" when it issued the writ of attachment on 21 March 1990 SECTION 6SHERIFFS RETURN After enforcing the writ, the sheriff must, likewise without delay: 1. Make a return thereon to the court from which the writ was issued 2. Return must be with a full statement of his proceedings under the writ 3. Return must contain a complete inventory of the property attached, together with any counter bond given by the party against whom attachment is issued 4. Serve copies thereof on the applicant. Principle: a writ of attachment has no lifetime as distinguished from a writ of execution.(roque case) The new Rule fixes the lifetime of a writ of execution at 5 years from the date of entry of judgment (rule 39, section 6) ROQUE V. CA 93 scra 540 FACTS: Associated Banking Corporation instituted an action, against Fil-Eastern Wood Industries, Inc., a domestic corporation, for recovery of a sum of money. RTC: Upon ex-parte application by the Bank for a Writ of Preliminary Attachment, respondent Judge, after the filing and approval of the required bond of P220,000.00, issued, on February 4, 1974, an Order of Attachment commanding the Sheriff to attach the estate, real and personal, of Fil-Eastern. LEVY MADE ON BARGE: On February 7, 1974, the Sheriff's "Notice of Levy Pursuant to the Writ of Attachment" was registered in the Office of the Commander of the First Coast Guard, District of Manila, 2 pursuant to Sec. 805 of the Tariff and Customs Code, as amended by Presidential Decree No. 34, requiring the registration of documents affecting titles of vessels with that entity. The said notice read, "levy is hereby made upon all the rights, titles, interest, shares and participation which the defendant Fil-Eastern Wood Industries, Inc. has or might have over a sea vessel or barge named Fil-Eastern V. It appears that prior to the issuance of said Writ of Attachment, Fil-Eastern had delivered the barge to the Cotabato Visayan Development Corporation sometime in April, 1973, for repair. The job was completed in June 1973, but Fil-Eastern failed to pay the cost of repairs of P261,190.59. Cotabato Visayan Development Corporation proceeded for the sale of said barge Eligio Roque acquired barge as highest bidder on April 24, 1974On the same date, the Cotabato Visayan Development Corporation issued an Affidavit of Release of mechanic's lien against Fil-Eastern. The Certificate of Sale was received in the office of the Philippine Coast Guard on May 3, 1974. 5 It was not until December 24, 1974, however, that Certificate of Ownership No. 8647, a Certificate. of Philippine Register, a Certificate of Change of Name of Vessel from Fil-Eastern V" to "Satellite I I, " as well as a Coastwise License, were issued to Roque by the Philippine Coast Guard. 6 These muniments of title were issued only after counsel for Eligio Roque had assured the Philippine Coast Guard, in a letter dated November 13, 1974, that "without touching on the merit of the preference of our client's claim in relation to the levy registered by other claimants, such levy is not in any manner a legal obstacle to the registration of the vessels in our client's name." 7 Acting thereon, the Acting Commandant of the Philippine Coast Guard in a letter dated November 23, 1974, authorized the issuance of a new certificate of registration annotating thereon any levy validly registered against said vessel(s)." 8 However, neither the Certificate of Ownership nor the Certificate of Philippine Register appended as

ISSUE: WHETHER THE ISSUANCE OF THE WRIT OF PRELIMINARY ATTACHMENT PRIOR TO THE SERVICE OF THE SUMMONS AND A COPY OF THE AMENDED COMPLAINT ON THE RESPONDENT IS VALID. HELD: YES IT IS VALID. CONTENTION OF VBC: As to the first issue, VBC takes refuge in the ruling in Davao Light & Power Co. vs. Court of Appeals 38 and argues that the issuance of the writ of attachment on 21 March 1990, although before the service of the summons, was valid. Its issuance and implementation are two different and separate things; the first is not affected by any defect in the implementation which may be corrected. Moreover, assuming arguendo that the initial service of summons was defective, it was cured by the numerous pleadings thereafter filed. Finally, whatever doubts existed on the effectiveness of the implementation of the writ was erased by its re-service on the resident agent of Zachry. CONTENTION OF ZACHARY: Zachry, in its Comment, 39 contends that pursuant to the Sievert and Davao Light rulings, the issuance of the writ of attachment before the service of summons on Zachry's resident agent was invalid and that the various pleadings filed by the parties did not cure its invalidity. SUPREME COURT: It was error for the Court of Appeals to declare, on the ground of grave abuse of discretion, the nullity of the writ of attachment issued by the trial court on 21 March 1990. In the first place, the writ was in fact issued only on 26 March 1990 and served, together with the summons, copy of the complaint, the Order of 21 March 1990, and the bond, on 27 March 1990 on Zachry at its field office in Subic Bay, Zambales, through one Ruby Apostol. What the Court of Appeals referred to as having been issued on 21 March 1990 is the order granting the application for the issuance of a writ of preliminary attachment upon the posting of a bond of P24,266,000.00. 41 In the second place, even granting arguendo that the Court of Appeals had indeed in mind the 26 March 1990 writ of attachment, its issuance, as well as the issuance of the 21 March 1990 Order, did not suffer from any procedural or jurisdictional defect; the trial court could validly issue both. However, the writ of attachment cannot be validly enforced through the levy of Zachry's property before the court had acquired jurisdiction over Zachry's person either through its voluntary appearance or the valid service of summons upon it. 42 To put it in another way, a distinction should be made between the issuanceand the enforcement of the writ. The trial court has unlimited power to issue the writ upon the commencement of the action even before it acquires jurisdiction over the person of the defendant, but enforcement thereof can only be validly done after it shall have acquired such jurisdiction. This is the rule enunciated in Davao Light &

Power Co. vs. Court Appeals. In that case, this Court stated:XXXXXXXXXXXXXX

of

The validity then of the order granting the application for a writ of preliminary attachment on 21 March 1990 and of the issuance of the writ of preliminary attachment on 26 March 1990 is beyond dispute. However, the enforcement of the preliminary attachment on 27 March 1990, although simultaneous with the service of the summons and a copy of the complaint, did not bind Zachry because the service of the summons was not validly made. When a foreign corporation has designated a person to receive service of summons pursuant to the Corporation Code, that designation is exclusive and service of summons on any other person is inefficacious. 49 The valid service of summons and a copy of the amended complaint was only made upon it on 24 April 1990, and it was only then that the trial court acquired jurisdiction over Zachary's person. Accordingly, the levy on attachment made by the sheriff on 27 April 1990 was invalid. However, the writ of preliminary attachment may be validly served anew.

Sharing is Good Karma Page 13

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU Annexes "C" and "D", respectively, to petitioners' Urgent Manifestation and Motion filed before the lower Court 9 carry that annotation. On August 29, 1974, the Bank filed a "Motion for the Issuance of Another Writ of Attachment" stating that at the time of the issuance of the Writ on February 4, 1974, the barge in question could not be located within the jurisdiction of the trial Court. having been anchored somewhere in the Visayas, and that actual levy on the barge could not be made as "the original Order of attachment is allegedly in the possession of the Branch Deputy Sheriff appointed by the Honorable Court, who has not reported to the office since August 26, 1974, and, therefore, could not implement the writ." On the same date, August 29, 1974, the trial Court (Judge Rafael S. Sison, presiding) denied the issuance of another Writ (apparently ' v because it was deemed unnecessary), but instead ordered the Deputy Sheriff of Branch XXVIII to coordinate with the City Sheriff of Manila in the implementation of the Writ previously issued. On August 30, 1974, Deputy Sheriff Garvida actually

RIZADA, RESCI ANGELLI On July 16, 1975, respondent Deputy Sheriff Adriel V. Garcia submitted a report informing the Court that the barge in question had been turned over to him and was anchored along Pasig River, under guard.

ISSUE: If the levy and/or attachment by the sheriff of the barge in question are illegal, will herein petitioner be required to avail of Section 14, Rule 57 and/or Section 17, Rule 39 of the Revised Rules of Court? HELD: On July 19, 1976, we issued a Restraining Order enjoining respondents from proceeding with the projected sale at public auction of the barge, subject of this litigation. We also declared the case submitted for decision. On January 18, 1977, the Bank filed a Motion for Authority to Sell the barge under attachment. This was opposed, however, by petitioners and we resolved to defer resolution until decision on the merits is rendered. MOTION FOR EARLY RESOLUTION: We take note of the BANK's contention that ever since the Sheriff took custody of the vessel on July 16, 1975, the same has been lying Idle, moored at the Muelle de la Industrial, Pasig River, exposed to the elements, and has deteriorated rapidly, hence the need for early resolution. We agree with the findings of the Court of Appeals that petitioners were not without any plain, speedy and adequate remedy in the ordinary course of law. For one, upon the issuance of the Order, dated August 29, 1974, commanding the implementation of the Writ of Attachment, petitioners could have availed themselves of the remedy provided for in Section 14, Rule 57 of the Rules of Court, which reads: If the property taken be claimed by any person other than the party against whom attachment had been issued or his agent, and such person makes an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serves such affidavit upon the officer while the latter has possession of the property, and a copy thereof upon the attaching creditor, the officer shall not be bound to keep the property under attachment, unless the attaching creditor or his agent, on demand of the said officer, secures him against such claim by a bond in a sum not greater than the value of the property attached. ... For another, when respondent Sheriff seized the vessel in question to be sold at public auction in accordance with the Order of execution of March 7, 1975, petitioner could have availed of the remedy under Section 17, Rule 39 of the Rules of Court which provides: If the property levied on be claimed by any other person than the Judgment debtor or his agent, and such person make an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serve the same upon the officer making the levy, and a copy thereof upon the judgment creditor, the officer shall not be bound to keep the property, unless such judgment creditor or his agent, on demand of the officer, indemnify the officer against such claim by a bond in a sum not greater than the value of the property levied on. ... Petitioner Eligio Roque argues, however, that he could not avail of the foregoing Rules inasmuch as the vessel was not in the actual custody of the Sheriff nor of the Court, since the supposed levy by the Sheriff on February 7, 1974 was a mere paper levy which, in legal contemplation, is no levy at an. It is a fact that respondent Sheriff could not effect seizure immediately, first, because the barge could nowhere be found in this vicinity, and subsequently when found, because petitioners would not deliver possession to the Sheriff. It was not until the trial Court granted the Sheriff's Motion praying for an Order directing petitioners or their agents to surrender the barge to the custody of the Court, that the Sheriff was able to take physical

seized and levied upon the vessel.

On October 7, 1974, respondent Bank and respondent FilEastern submitted a Compromise Agreement whereby FilEastern bound itself to pay to the Bank the principal amount of P200,000.00, with 1417,9 interest, plus other amounts stated therein. On October 9, 1974, respondent Judge approved the Agreement and rendered judgment accordingly. On November 6, 1974, the Bank moved for the issuance of a Writ of Execution for failure of Fil-Eastern to make payments within the period stipulated in the Compromise Agreement. Meanwhile, without prior authority from Deputy Sheriff Garvida the barge in question was "spirited away" to Bacolod City by a certain Captain Marcelino Agito, who claimed to have been given the right to use the same by Fil-Eastern. 12 On January 6, 1975, respondent Judge issued an Order requiring Capt. Marcelino Agito, in coordination with Deputy Sheriff Benjamin E. Garvida to bring back to Manila the barge in question. 13 On March 7, 1975, respondent Judge issued a Writ of Execution and ordered the sale of the barge at public auction, as follows: ORDER The Decision rendered by this Court under date of October 9, 1974 having already become final and executory, let a Writ of Execution be issued to be enforced by Sheriff Adriel V. Garcia by conducting an auction sale on the vessel placed under attachment. The satisfaction of the judgment in this case shall be given preference and the payment of the third party claim of Alfredo H. Maligaya for and in behalf of Leonardo M. Canoso shall be satisfied from whatever remaining proceeds of the auction sale on the aforedsaid vessel, if there be any. ROQUE: refused to-surrender the barge on the ground I d that Eligio Roque is now the new owner, having acquired the same by purchase at public auction, and praying that petitioners, and all persons claiming under them, be directed to surrender the barge to the custody of the Court through its duly authorized representative. RTC: Roque was cited in contempt; there was absence of formal claim relative to the barge subject of the WPA On April 24, 1975, petitioners filed before the trial Court an Urgent Manifestation and Motion seeking to set aside the Order of April 14, 1975, claiming that Roque is now the new owner of the barge having acquired the same at a public auction sale arising from a mechanic's lien. The Motion was denied by respondent Judge on the ground that the records belied petitioners' claim that the auction sale occurred very much ahead of the notice of levy.

Sharing is Good Karma Page 14

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU custody. As a general rule, however, a levy of an attachment upon personal property may be either actual or constructive. 17 In this case, levy had been constructively made by the registration of the same with the Philippine Coast Guard on February 7, 1974. Constructive possession should be held sufficient where actual possession is not feasible, 18 particularly when it was followed up by the actual seizure of the property as soon as that could possibly be effected. ISSUE: Petitioners further argue that the levy was illegal because the Writ was implemented more than sixty days after its issuance so that they need not have complied with Section 14, Rule 57, supra. HELD: The Rules do not provide any lifetime for a Writ of Attachment unlike a Writ of Execution. But even granting that a Writ of Attachment is valid for only sixty days, yet, since there was constructive levy within that period the fact that actual seizure was effected only thereafter cannot affect the validity of that levy. On the matter of immediate implementation of the order of Execution: Neither can it be said that respondent Judge committed grave abuse of discretion in issuing the challenged Order of April 14, 1975, supra, whereby it commanded the immediate implementation of the Order of execution of March 7, 1975 and ordered petitioners to surrender possession of the barge to the Sheriff under pain of contempt. A trial Court is enjoined by law to bring about a prompt dispatch of the controversy pending before it. As it was, it took the trial Court more than a year to cause the enforcement of its Writs and processes. Moreover, its Decision of October 9, 1974 had become final and executory, and execution then became purely a ministerial phase of adjudication. It had no jurisdiction to pass upon petitioners' claim of ownership not only because trial in that, case had already been terminated but also considering that petitioners were not parties in the case below nor had they filed any third-party claim for the enforcement of their rights. Proper remedy of Roque: Verily, petitioners' remedy was to ventilate their claims of ownership in a separate and independent reivindicatory action, as even then suggested by the Court of Appeals. That was the arena where the question of preferential rights, if any, impliedly raised in the first assigned error, could have been fully threshed out. ...a third person claiming to be the owner of the property attached or levied upon is required to file a separate or independent action to determine whether the property should answer for the claim of the attaching or judgment creditor instead of being allowed to raise that issue in the case where the writ of attachment or execution was issued In the interest of justice, petitioners can still file an independent civil action to establish their ownership over the barge, if they have not yet done so. SECTION 7ATTACHMENT OF REAL AD PERSONAL PROPERTY; RECORDING THEREOFreal and personal property shall be attached by the sheriff executing the writ in the following manner: a. Real property OR growing crops thereon OR any interest therein Standing upon the record of the registry of deeds of the province in the name of the party against whom attachment is issued OR Not appearing at all upon such records OR Belonging to the party against whom attachment is issued and held by any other person OR Standing on the records of the ROD in the name of any other person HOW: By filing with the ROD: 1. A copy of the order 2. Description of the property attached AND 3. A notice that is attached

RIZADA, RESCI ANGELLI

Such real property and any interest therein held by or standing in the name of such other person are attached and by: 1. Leaving a copy of such order, description and notice with the occupant of the property, if any OR with such other person or his agent if found within the province.

Where the property has been brought under the operation of either the Land Registration Act or the Property Registration Decree, NOTICE shall contain: 1. A reference to the number of the certificate of title; 2. The volume and page in the registration book where the certificate is registered AND 3. The registered owners thereof. Registrar 1. 2. 3. 4. of Deeds must index attachment filed under this section: In the names of the applicant, The adverse party OR The person by whom the property is held OR In whose name it stands in the records.

If the attachment is NOT claimed on the entire area of the land covered by the certificate of title a description sufficiently accurate for the identification of the land or interest to be affected shall be included in the registration of such attachment. Principle: the requirement that the notice of levy should contain a reference to the number of the certificate of title and the volume and page in the registration book where the certificate is registered is made in order that the debtor as well as a 3rd person may be properly be informed of the particular land or property that is under the custody of the this can only be accompanied by making a reference to the certificate of title covering the property. The situation differs if the land is unregistered, in which case, it is enough that the notice be registered under act 3344. A notice of levy as regards a registered land which contains no reference to the number of its certificate of title and the volume and page in the registry book where the title is registered is LEGALLY INEFFECTIVE and as such does not have the effect of binding the property for purposes of execution. Consequently, a sale carried out by virtue of said levy is invalid and of no legal effect. SIARI VALLEY ESTATES V. LUCASAN 109 PHIL 294 FACTS: January 30, 1952A final and executory decision was rendered against Lucasan to deliver to Siari valley Estates the cattle inside its pasture or pay its value AND damages. Writ of execution was issued Sheriff levied certain parcels of land sold at public auction to Siari Estates on January 14, 1956 February 16, 1957, upon petition of the corporation, a writ of possession was issued directing the sheriff to place said corporation in possession thereof. Notwithstanding said writ, however, the corporation failed to take possession of the lands, hence it filed a motion reiterating its petition that it be placed in their possession. Opposition of Lucasan: It appears that parcel 1 is a registered land covered by Certificate of Title No. OCT-2492, Patent No. 50967, duly registered in the Office of the Register of Deeds of Zamboanga del Norte in the name of Filemon Lucasan. On this land stands a big house of mixed materials which is asserted in the amount of P23,270.00 as evidenced by Tax Declaration No. 7653. It also 37 3 appears that Filemon Lucasan and his wife constituted this house and the lot on which stands into a family home, the pertinent document having been registered in the office of the register of deeds on June 21, 1955. In opposing the petition of the

Sharing is Good Karma Page 15

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU corporation for a writ of possession insofar as this property is concerned, Lucasan contended that said lot and house having been constituted as a family home are beyond the reach of judicial execution. He contended that the levy made by the sheriff on said property is legally ineffective because it was not effected in accordance with what is prescribed in Section 14, Rule 39, in relation to Section 7, Rule 59, of the Rules of Court.

RIZADA, RESCI ANGELLI

-------o0o--------Principle: a judgment debtor is entitled to notice of levy if he is the occupant of the land. What is required is that the judgment debtor be notified of the auction sale before the actual date of the sale. RAVANERA V. IMPERIAL 93 SCRA 589 FACTS: Roman Catholic archbishop of Caceres filed an action for Rescission of Contract and Recovery of Possession against Imperial. January 28, 1966RTC rendered a decision in favor of the Roman Catholic Archbishop November 20, 1968Archbishop filed a motion for the issuance of a writ of execution. Archbishop posted the required bond of P20,000.00 February 14, 1969writ of execution was issued. Said writ was not enforced upon instance of the counsel for plaintiff as an amicable settlement was proposed and after the 60 days period had lapsed the Sheriff made a return of the writ stating therein that Upon request of counsel for the plaintiff let this writ be returned and an alias writ be issued for the proposed amicable settlement above-stated failed to materialize. August 24, 1969 Pursuant to this return, the Clerk of Court of the respondent Court, issued an alias writ of execution On September 24, 1969 the Sheriff issued a notice of Levy by which certain properties of the petitioner were attached or levied upon. On September 25, 1969 the alias writ was personally served by the Sheriff upon the petitioner. September 29, 1969 notice of levy Registered On October 7, 1969, the Sheriff issued a Notice of Public Auction sale of the properties levied upon which was published in the "Bicol Star" a weekly newspaper of general circulation on October 11, 18 and 25, 1969. Contention of IMPERIAL: Private respondent alleges that copies of the Notice of Levy and the Notice of Sale were sent by Registered Mail which according to the certificate of the Postmaster was received on October 15, 1969. Receipt of the Notice of Levy is denied by Imperial. November 3, 1969the public auction sale was held, and the Ravanera being the highest bidder a Provisional Deed of Sale was issued in her favor. Within the one-year period of redemption, Imperial redeemed some of the properties bought at auction sale, but he failed to redeem some others on account of which at the end of the redemption period, the Sheriff executed a Definite Deed of Sale of said unredeemed properties in the name of Ravanera. Ravanera filed a motion for a writ of possession of the properties covered by the Definite Deed of Sale. Opposition of IMPERIAL: Imperial filed his opposition

a.

one of the parcels of land sold at public auction was the one where he erected a house and lot which he has extra judicially constituted as a family home; therefore, being a family home, it is beyond the reach of judicial execution. The notice of levy on parcel number 1 which is a registered land contains no reference to the number of its certificate of title and the volume and page in the registry book where the title is registered,

b.

RTC issued order that Siari estates may take possession on all lands sold EXCEPT the parcel of land on which the family home was constituted, levy and sale made by sheriff to said parcel not made in accordance with law NULL and VOID. Note: a. b. Parcel 1 is a registered land in the name of lucasan Family home constituted only on June 21, 1955

ISSUE: was real property validly attached? HELD: NO. Since the notice of levy made by the sheriff as regards parcel number 1 which is a registered land contains no reference to the number of its certificate of title and the volume and page in the registry book where the title is registered, it follows that said notice is legally ineffective and as such did not have the effect of binding the property for purposes of execution. Consequently, the sale carried out by virtue of said levy is also invalid and of no legal effect. Rationale: 1. when this property was levied on execution by the sheriff to satisfy the judgment rendered against Filemon Lucasan in favor of Siari Valley estates the notice of levy merely described the property as unregistered land and the same was registered under Act 3344 in the office of the register of deeds. It also appears that in the notice of sale the property was merely described according to the boundaries and area appearing in the tax declaration and not according to what appears in the certificate of title. 2. RULE: the rule provides that real property shall "be levied on in like manner and with like effect as under an order of attachment" (Section 14, Rule 39), and the provision regarding attachment of real property postulates that the attachment shall be made "by filing with the register of deeds a copy of the order, together with the description of the property attached, and a notice that it is attached, and by leaving a copy of said order, description, and notice with the occupant of the property, if any there be," and that "Where the property has been brought under the operation of the Land Registration Act, the notice shall contain a

alleging that the notice of levy was null and void and hence the provisional as well as the definite deed of sale were likewise void, and that respondent Ravanera had no personality in the case, she not being a party thereto.

reference to the number of the certificate of title and the volume and page in the registration book where the certificate is registered" (Section 7 [a], Rule 59).

Reason for the rule: in order that debtor as well as a 3rd person may be properly informed of the particular land or property that it is under the custody of the court. This can only be accomplished by making a reference to the certificate of title covering the property. The situation differs if the land is unregistered in which case it is enough that the notice be registered under Act 3344. Sharing is Good Karma Page 16

RTC: Granted writ of possession in favor of ravanera CA: reversed. annulled the levy and all the proceedings subsequent thereto on two grounds, to wit: 1) The occupants or possessors of the properties levied upon were not furnished with a notice of levy and as Section 7 of Rule 57, paragraph (a) makes this a requirement for the validity of the levy, non-compliance therewith has made the levy ineffective, and 2) The Notice of levy made by the sheriff did not contain the volume and the page in the Registry where the certificates registered.

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU 3.

RIZADA, RESCI ANGELLI A parcel of residential land located at Naga City not registered under Act 496 but covered by Tax Declaration No. 8732.

In the case at bar, no notice of the levy was given to the occupant of the land. There was, therefore, no valid levy on the land, and its registration in the registry of deeds and

annotation in the title were invalid and ineffective. The fact that the person in whose name the land was registered was duly notified of the attachment does not cure the defect, because personal service of the copy of the writ, description of the property and notice to the owner, who is not the occupant, does not constitute compliance with the statute. The evident purpose of the law in imposing these requirements is to make the levy public and notorious, to prevent liens from attaching secretly and by surreptitious entries and endorsements, and to enable the affected party to inquire into the date and circumstances surrounding the creation of the encumbrance, as well as to give him ample opportunity to file timely claims to the property levied upon. Hence, ravaneras recourse to the SC. ISSUE: WON there was a valid levy upon the properties of Imperial? HELD: YES. It appears in this case that the notice of levy was registered with the Register of Deeds on September 29, 1969. From a certification of the Postmaster at Naga City, it also appears that registered letter No. 13681 containing the notice of levy and the notice of auction sale addressed to respondent Felipe Imperial was delivered on October 15, 1969 to Pelaguia Comba, member of the household of the addressee. Respondent Imperial was, therefore, notified by registered mail of the levy and the auction sale long before November 3, 1969, the date of the auction sale. What is required is that the

From the records of the case, the notice of levy made by the sheriff as regards the registered land contains reference to the number of its certificate of title but not to the volume and page in the registry book where the title is registered. Nevertheless from what was stated in the case of Siari Valley Estate vs. Lucasan, supra, it would seem that the purpose of the requirement of Section 7(a), Rule 39 of the Revised Rules of Court is substantially complied with. This is more so where as in this case, there appears in the notice of levy the following certification: It is hereby certified that this instrument has been duly registered proper memorandum hereof made on transfer Certificate of Title No. 257 & 258 and on its owner's duplicate Reg. Book No. 3; File No. 1-248. Naga City, Sept. 29, 1969. Reference to the number of the certificate of title of every registered land in the notice of levy, together with the technical description thereof, would certainly suffice to inform the debtor, as well as third persons what particular land or property is brought to the custody of the court, as is the purpose of the aforecited provision of the Rules of Court. Incidentally, no third person appears, to be interested in the matter now before this Court. From the fact that respondent Imperial was able to exercise his right

judgment debtor must be notified of the auction sale before the actual date of sale which was done in the case at bar.

It cannot be gainsaid that if it were only to afford an opportunity to respondent Imperial to avoid the auction sale, he had ample opportunity to file his objection to such sale because the auction sale took place on November 3, 1969. The respondent had nineteen days after he received the notice of levy and the notice of auction sale on October 15, 1969 and thirty-nine (39) days from September 25, 1969 when he was served personally by the Sheriff a copy of the writ of execution to avoid the sale had he wanted to. Moreover, he had exactly one year from November 27, 1969 when the provisional Deed of Sale executed in favor of the petitioner was registered with the Register of Deeds to redeem the property. ISSUE: WON the requirements under Rule 57 Section 7 that XXX the notice shall contain a reference to the number of the certificate of title and the volume and page in the registration book where the certificate is registered XXX ? HELD: YES. Section 7 (paragraph a) of Rule 57 is so explicit that only as to property which has been brought under the operation of the Land Registration Act should the notice of levy contain the volume and page in the registration book where the certificate is registered, impliedly, the requirement does not apply to property not registered under the said Act. It is enough that the notice of levy upon unregistered land be registered under Act 3344, as was done in this case. The properties which were acquired by the petitioners as the highest bidders in the auction sale on November 3, 1969 are as follows: 1. 2. A parcel of land located at Naga City registered under Act 496 and covered by Transfer Certificate of Title No. 257; A two-storey residential house located at Naga City not registered under Act 496 but covered by Tax Declaration No. 14276; and

of redemption with reference to three registered parcels of land, it can be easily deduced that insofar as respondent Imperial is concerned, the purpose of the requirement of reference having to be made to the number of the certificate of title, and also the volume and page in the registration book where the certificate is registered, has been fully served or attained.
It may also be pertinent to note that in the Siari Valley case, heavily relied upon by the respondent court in voiding the notice of levy in the instant case, the land involved which was actually registered with OCT No. 2492 was described in the notice of levy as unregistered land, which was thus a misleading information. DISPOSITION: We, therefore, find no substantial defect in the notice of levy on all the properties levied upon and sold to petitioners in the auction sale, that should be a basis, as the respondent court deemed it to be, for annulling the sale made pursuant to the levy. --------o0o-------Principle: Section 7 of rule 57 requires that in attaching real property, a copy of the order, description and notice must be served on OCCUPANT xxxx OBANA V. COURT OF APPEALS 172 sra 866 (1989) Nature: levy on execution was nullified because attached property was no longer owned by defendant Dizon when the levy on execution was had. FACTS: 1st caseguardianship case before JRDC QC were attorneys fees for Suntay were initially awarded 2nd case Collection caseAtty. Suntay filed a sum of money case against Liberty Dizon and her minor children to collect her attorneys fees in the guardianship case he handled for them guardianship court authorized payment of 5K no payment despite repeated demands. December 1, 1972, by virtue of the Writ of Attachment issued in this collection case, a levy was made on said

Sharing is Good Karma Page 17

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU property, which levy was annotated at the back of TCT No. 173792 of the Register of Deeds of Quezon City Feb. 13, 1973: Motion for service of summons by publication sheriff failed to serve summons to Mrs. Dizon and her wards for they no longer resided at their last known address in QC and present address cannot be ascertained; RTC granted motion to serve summons by PUBLICATION. MEANWHILEMay 16, 1973Sale of the disputed land between by Mrs. Dizon to Obana new TCT issued in favor of Obana and transferred in the process the encumbrance consisting of levy in favor of Atty. Suntay August 10, 1973 Atty. Suntay secured a favorable judgment where Dizon and her wards declared in default grant of 10K awarded Writ of execution Notice of levy on execution on August 7, 1974 (against the property, sale issued to Atty. Suntay now, both certificates of sale in favor of Obana and atty. Suntay were registered in ROD Suntay filed cancellation of Obanas TCT RTC Quezon city cancelled that of Obana favored Suntay 3rd case: OBANAto stop registration of the subject land, ObaMa filed annulment of judgment of the decision of the court awarding 10k attorneys fees to Suntay. Grounds: 1. Decision of RTC awarding attys fees to suntay was null and void because court did not acquire jurisdiction over Dizon and her wards, since they were not properly served with summons; 2. proceedings before sheriff were defective because it failed to comply with jurisdiction requirements on the manner of service of notice, thus rendering the proceedings void defense of SUNTAY: 1. When Obana bought the property and title transferred to her on July 2, 1973, she is charged with the knowledge of the pendency of the sum of money case through the annotation at the back of the TCT 2. No extrinsic fraud committed by Suntay that may constitute ground to nullify judgment. RTC: attachment and levy of property in the annulment case was VOID: 1. court held no jurisdiction was acquired over the persons of defendants Dizon, the action being strictly in personam and summons by publication is insufficient; 2. no valid attachment and levy were made by sheriff as not served on Obana Atty. Suntay appealed to the CA CA: Dismissed Obanas complaint for annulment of judgment the collection case was between Suntay on one hand and Dizon and her children on the other. It ruled that petitioner Obaa the buyer of the lot, is not a party in interest and had neither personality nor cause of action to ask for the annulment of the judgment in that case.

RIZADA, RESCI ANGELLI notice must be served on the occupant, in this case the occupant at 48 Damortiz Street, Damar Village, Quezon City. Obana, was at the time of the levy on execution, was the occupant of said property. Notice of levy must have been made to him. The sheriffs sale was affected without any personal notice to Liberty H. Dizon on the ground that she had moved out of her old address and her "present address" was unknown. No notice was served on Obaa because she was not a party in the collection case. All notices and summonses in the collection case filed on November 9, 1972 including the copy of the complaint, the original summons, the alias summons, the notice of levy on attachment of the disputed property, the notice of levy on execution and the notice of sheriffs sale were served through mail to defendant Dizon at 34-H Caingin Road, Cypress Village, Quezon City. As earlier stated, because the Sheriff could not serve the complaint and the summons on Dizon who had moved out of the above address, service by publication upon Dizon was authorized by the court in the collection case. HOWEVER, Respondent Suntay cannot claim ignorance of the sale to petitioner Obaa as a ground for not bringing her into the picture. As stressed by the petitioner, Liberty Dizon filed her motion for the

then in the name of Obana already; house and lot he was attaching had already been sold to Obana); certificate of

approval of the sale of the disputed house and lot in the guardianship case through her counsel, herein private respondent Suntay. He could not have been unaware that the house and lot he was attaching had been sold to Obaa because the sale of the Dalmar property was authorized by the guardianship court in the case where he was counsel for the guardian.

ab initio

NOTES: The trial court in the annulment case ruled that the attachment was void from the beginning. The action in personam which required personal service was never converted into an action in rem where service by publication would have been valid. The Court of Appeals reversed the trial court principally on the ground that Leonora Obaa was neither a defendant nor a party-in-interest in the collection case. Obana is a party in interest in the collection case Court of appeals ignored the fact that property already sold to her was attached and then bedded out to Atty. Suntay without any notice to her. And because the notice of lis pendens in the collection case was secured ex-parte without the defendant Dizon and petitioner Obaa who were never brought to court, having any inkling about it, the notice was not annotated on the owner's duplicate copy of Transfer Certificate of Title No. 173792. OTHER MATTERS: Civil Case No. 4238-M was an action for sum of money filed by Atty. Suntay against liberty Dizon and her minor children in an effort to collect attorney's fees in the guardianship case he handled for them. The guardianship court authorized the payment of P5,000.00. According to the Court of Appeals, the collection case was between Suntay on one hand and Dizon and her children on the other. It ruled that petitioner Obaa the buyer of the lot, is not a party in interest and had neither personality nor cause of action to ask for the annulment of the judgment in that case. This may be so, if the facts end there. However, the judgment in Civil Case No. 4238-M, while against Dizon and her children was executed against property belonging to petitioner Obaa. The house and lot in Quezon City which Dizon sold to Obaa for P150,000.00 was executed upon by the Sheriff to satisfy the P10,000.00 attorney's fees in the Dizon guardianship case and another P5,000.00 awarded to Suntay for his fees in prosecuting his own collection case. The house and lot were sold for P17,402.90 to respondent Suntay. According to

no personal service of the copy of the notice to the occupant of the property was made.--> notice of levy

NOTE: The action was in personam recourse can be had to acquire jurisdiction attaching properties to convert such action to in rem or quasi in rem and summons by publication may then be deemed valid and effective. However, validity of levy on execution challenged because NOTICE OF LEVY were defective and invalid for not having been in accord to Rule 57. Notice not served on occupant. (no notice to Obana since she was not a party to the collection case) Since attachment not valid, service by publication not valid too. ISSUE: WON there was valid attachment of the real property HELD: NO. It should be noted that Section 7 of Rule 57 requires that in attaching real property a copy of the order, description, and

Sharing is Good Karma Page 18

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU the petitioner, the Property she purchased for P150,000.00 on May 16, 1973 is now worth over Pl,000,000.00. Considering all the foregoing circumstances, the order in LRC 750 which is based on irregular proceedings in the prior case and which directed the cancellation of Obaa's transfer certificate of title cannot assume finality. The respondent court committed reversible error in using it as a basis for res judicata. There is the added factor that a land registration court in a cancellation of title case could not possibly inquire into the controversial matters raised in the annulment of judgment case. On the matter of impleading dizon and wards in the action for annulment of judgment in the collection case This ruling ignores the fact that Dizon could not even be summoned in the collection case; her whereabouts are unknown: the judgment against her was a default judgment; she has apparently no more interest whatsoever in the house and lot she sold to Obaa and she still owes Atty. Suntay P10,000.00.

RIZADA, RESCI ANGELLI executory decision in Civil Case No. 60319 she filed against spouses Enrique and Rosita Caliwag. According to Luz Du, despite her said notice of lis pendens annotated, Stronghold still proceeded with the execution of the decision in Civil Case No. 90-1848 against the subject lot and ultimately the issuance of Transfer Certificate of Title No. 6444 in its (Strongholds) name. RTC: Stronghold had superior rights over the property because of the prior registration of the latters notice of levy on attachment on Transfer Certificate of Title (TCT) No. 2200. For this reason, it found no basis to nullify TCT No. 6444, which was issued in the name of respondent after the latter had purchased the property in a public auction. CA: Sustaining the trial court in toto, the CA held that Strongholds notice of levy on attachment had been registered almost five (5) months before petitioners notice of lis pendens. Hence, respondent enjoyed priority in time. Such registration, the appellate court added, constituted constructive notice to petitioner and all third persons from the time of Strongholds entry, as provided under the Land Registration Act -- now the Property Registration Decree.

Disposition: we cannot close our eyes to the rank injustice whereby the owner of a minion peso house and lot is compelled to give up her property to answer for a P10,000.00 attorney's fee incurred by its former owner and which the lawyer cannot apparently collect from his own client. Collection case, proceedings, orders, notices, WPA, levy and execution sale NULL AND VOID. -------------o0o---------------Principle: Preference of Preliminary Attachment to Lis Pendens Doctrine: Preference is given to a duly-registered attachment over a subsequent notice of lis pendens, even if the beneficiary of the notice acquired the subject property before the registration of the attachment. Under the Torrens system, the auction sale of an attached realty retroacts to the date the levy was registered. DU V. STRONGHOLD INSURANCE CO. INC 433 ra 43 FACTS: January 1989 De leon sold subject property to Luz du conditional contract of saledownpayment of 75K with balance of 95K Sale UNREGISTERED April 28, 1989 De leon sold same property to spouses caliwag TCT issued to Caliwag spouses August 7, 1990 Stronghold filed case against Spouses Caliwag for defrauding Stornghold and misappropriating companys funds WPA issued and was ANNOTATED at the back of the TCT December 21, 1990 Luz Du filed case against de Leon and spouses caliwag for annulment of sale by de leon in favor of caliwag January 3, 1991 Notice of lis pendens annotated at the back of the TCT Febuary 11, 1991 RTC favored stronghold; spouses caliwag made to pay March 12 notice of levy on execution annotated on TCT attached property sold in public auction August 5, 1991 certificate of sale issued in favor of Stronghold. August 5, 1992 Luz Du able to secure a favorable judgment too and became F/E CONTENTION OF LUZ DU: Under the above historical backdrop, Luz Du commenced the present case to cancel TCT in the name of Stronghold with damages claiming priority rights over the property by virtue of her Notice Of Lis Pendens and inscribed on January 3, 1991, and the final and

ISSUE: Whether a Notice of Levy on Attachment on the property is a superior lien over that of the unregistered right of a buyer of a property in possession pursuant to a Deed of Conditional Sale. HELD: YES. attachment that is duly annotated on a certificate of title is superior to the right of a prior but unregistered buyer. Main Issue: Superiority of Right The preference given to a duly registered levy on attachment or execution over a prior unregistered sale is well-settled in our jurisdiction. An attachment that is duly annotated on a certificate of title is superior to the right of a prior but unregistered buyer and the subsequent sale of the property to the attaching creditor must, of necessity, retroact to the date of the levy. Otherwise, the preference created by the levy would be meaningless and illusory. The Court has steadfastly adhered to the governing principle set forth in Sections 51 and 52 of Presidential Decree No. 1529: SEC. 51. Conveyance and other dealings by registered owner. - An owner of registered land may convey, mortgage, lease, charge or otherwise deal with the same in accordance with existing laws. He may use such forms of deeds, mortgages, leases or other voluntary instruments as are sufficient in law. But no deed, mortgage, lease, or other voluntary instrument, except a will purporting to convey or affect registered land shall take effect as a conveyance or bind the land, but shall operate only as a contract between the parties and as evidence of authority to the Registry of Deeds to make registration.

The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned, and in all cases under this Decree, the registration shall be made in the office of the Register of Deeds for the province or the city where the land lies.
SEC. 52. Constructive notice upon registration. - Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land shall, if registered, filed or entered in the office of the Register of Deeds for the province or city where the land to which it relates lies, be constructive notice to all persons from the time of such registering, filing or entering.(Italics supplied) As the property in this case was covered by the Torrens system, the registration of Strongholds attachment was the operative act that gave validity to the transfer and created a lien upon the land in favor of respondent. Capistrano Ruling Correctly Applied The preference created by the levy on attachment is not diminished even by the subsequent registration of the prior sale. That was the import of Capistrano v. PNB

Sharing is Good Karma Page 19

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU which held that precedence should be given to a levy on attachment or execution, whose registration was before that of the prior sale. In Capistrano, the sale of the land in question -- though made as far back as 1946 -- was registered only in 1953, after the property had already been subjected to a levy on execution by the Philippine National Bank. The present case is not much different. The stipulation of facts shows that Stronghold had already registered its levy on attachment before petitioner annotated her notice of lis pendens. As in Capistrano, she invokes the alleged superior right of a prior unregistered buyer to overcome respondents lien. If either the third-party claim or the subsequent registration of the prior sale was insufficient to defeat the previously registered attachment lien, as ruled by the Court in Capistrano, it follows that a notice of lis pendens is likewise insufficient for the same purpose. Such notice does not establish a lien or an encumbrance on the property affected. As the name suggests, a notice of lis pendens with respect to a disputed property is intended merely to inform third persons that any of their transactions in connection therewith -- if entered into subsequent to the notation -- would be subject to the result of the suit. Second Issue: Taking in Bad Faith We now tackle the next question of petitioner: whether Stronghold was a purchaser in good faith. Suffice it to say that when Stronghold registered its notice of attachment, it did not know that the land being attached had been sold to petitioner. It had no such knowledge precisely because the sale, unlike the attachment, had not been registered. It is settled that a person dealing with registered property may rely on the title and be charged with notice of only such burdens and claims as are annotated thereon. This principle applies with more force to this case, absent any allegation or proof that Stronghold had actual knowledge of the sale to petitioner before the registration of its attachment. Thus, the annotation of respondents notice of attachment was a registration in good faith, the kind that made its prior right enforceable. Moreover, it is only after the notice of lis pendens is inscribed in the Office of the Register of Deeds that purchasers of the property become bound by the judgment in the case. As Stronghold is deemed to have acquired the property -- not at the time of actual purchase but at the time of the attachment -- it was an innocent purchaser for value and in good faith. -------o0o----------Principle: levy on attachment duly registered takes preference over a prior unregistered sale VALDEVIESO V. DAMALERIO GR 133303, February 17, 2005 FACTS: 05 December 1995 Bernardo Valdevieso bought from spouses Lorenzo and Elenita Uy a parcel of land and the deed of sale was not registered, nor was the title of the land transferred to petitioner. on 19 April 1996, spouses Candelario and Aurea Damalerio filed a complaint for a sum of money against spouses Lorenzo and Elenita Uy with application for the issuance of a WPA. On 23 April 1996 the trial court issued a WPA by virtue of which the property, then still in the name of Lorenzo Uy but which had already been sold to Valdevieso, was levied. The levy was duly recorded in the Register of Deeds of General Santos City and annotated upon TCT No. T-30586. 6 June 1996 Sale of Uy to Valdevieso was registered. TCT in the name of Lorenzo Uy was cancelled and, in lieu thereof, new TCT was issued in the name of valdevieso. This new TCT carried with it the attachment in favor of spouses Damalerio.

RIZADA, RESCI ANGELLI Action filed by VALDEVIESO: he filed a third-party claim to discharge or annul the attachment levied on the property on the ground that the said property belongs to him and no longer to Lorenzo and Elenita Uy. Contention of Valdevieso: 1. he has a superior right over the questioned property because when the same was attached on 23 April 1996, this property was no longer owned by spouses Uy against whom attachment was issued as it was already sold to him on 05 December 1995. 2. The slight delay in the registration, he claims was not due to his fault but attributable to the process involved in the registration of property such as the issuance of the Department of Agrarian Reform clearance which was effected only after compliance with several requirements. Contention of Damalerio: registration of a deed of sale is the operative act which binds the land and creates a lien thereon. Before the registration of the deed, the property is not bound insofar as third persons are concerned. Since the

writ of attachment in favor of respondents was registered earlier than the deed of sale to petitioner, respondents were of the belief that their registered writ of attachment on the subject property enjoys preference and priority over petitioners earlier unregistered deed of sale over the same property.

RTC ruled for Valdevieso. It held that the levy of the property by virtue of attachment is lawful only when the levied property indubitably belongs to the defendant. Applying the rulings in the cited cases, it opined that although Lorenzo Uy remained the registered owner of the property attached, yet the fact was that he was no longer the owner thereof as it was already sold earlier to petitioner, hence, the writ of attachment was unlawful. CA: reversed RTC resolution and declared that an attachment or levy of execution, though posterior to the sale, but if registered before the sale is registered, takes precedence over the sale. The writ of attachment in favor of the respondents, being recorded ahead of the sale to petitioner, will therefore take precedence.

ISSUE: whether or not a registered writ of attachment on the land is a superior lien over that of an earlier unregistered deed of sale. HELD: We agree with DAMALERIO. levy on attachment duly registered takes preference over a prior unregistered sale The law applicable to the facts of this case is Section 51 of P.D. No. 1529. Said Section provides: Sec. 51. Conveyance and other dealings by registered owner. - An owner of registered land may convey, mortgage, lease, charge, or otherwise deal with the same in accordance with existing laws. He may use such forms of deeds, mortgages, leases or other voluntary instruments as are sufficient in law. But no deed, mortgage, lease, or other voluntary instrument, except a will purporting to convey or affect registered land, shall take effect as a conveyance or bind the land, but shall operate only as a contract between the parties and as evidence of authority to the Register of Deeds to make registration. The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned, and in all cases under this Decree, the registration shall be made in the office of the Register of Deeds for the province or city where the land lies. It is to be noted that though the subject land was deeded to petitioner as early as 05 December 1995, it was not until 06 June 1996 that the conveyance was registered, and, during that interregnum, the land

Sharing is Good Karma Page 20

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU was subjected to a levy on attachment. It should also be observed

RIZADA, RESCI ANGELLI possession of building, business and all the goods.--> Arenas & Co. FAILED to pay the 2nd and 3rd installment It was discovered that on December 16, 1908 McMicking, acting as sheriff of Manila, levied an attachment upon the factory, by virtue of a judgment rendered against Arenas &Co The indorsement further recites that the

that, at the time of the attachment of the property on 23 April 1996, the spouses Uy were still the registered owners of said property.

Under the cited law, the execution of the deed of sale in favor of petitioner was not enough as a succeeding step had to be taken, which was the registration of the sale from the spouses Uy to him. Insofar as third persons are concerned, what validly transfers or conveys a persons interest in real property is the registration of the deed. Thus, when petitioner bought the property on 05 December 1995, it was, at that point, no more than a private transaction between him and the spouses Uy. It needed to be registered before it could bind third parties, including respondents. When the registration finally took place on 06 June 1996, it was already too late because, by then, the levy in favor of respondents, pursuant to the preliminary attachment ordered by the General Santos City RTC, had already been annotated on the title. The settled rule is that levy on attachment, duly registered, takes preference over a prior unregistered sale. This result is a necessary consequence of the fact that the property involved was duly covered by the Torrens system which works under the fundamental principle that registration is the operative act which gives validity to the transfer or creates a lien upon the land. Attachment in in the nature of a proceeding in rem: The preference created by the levy on attachment is not diminished even by the subsequent registration of the prior sale. This is so because an attachment is a proceeding in rem.[19] It is against the particular property, enforceable against the whole world. The attaching creditor acquires a specific lien on the attached property which nothing can subsequently destroy except the very dissolution of the attachment or levy itself. Such a proceeding, in effect, means that the property attached is an indebted thing and a virtual condemnation of it to pay the owners debt. The lien continues until the debt is paid, or sale is had under execution issued on the judgment, or until the judgment is satisfied, or the attachment discharged or vacated in some manner provided by law. Thus, in the registry, the attachment in favor of respondents appeared in the nature of a real lien when petitioner had his purchase recorded. The effect of the notation of said lien was to subject and subordinate the right of petitioner, as purchaser, to the lien. Petitioner acquired ownership of the land only from the date of the recording of his title in the register, and the right of ownership which he inscribed was not absolute but a limited right, subject to a prior registered lien of respondents, a right which is preferred and superior to that of petitioner. -----------------o0o---------------(b) Personal property capable of manual delivery, by taking and safely keeping it in his custody, after issuing the corresponding receipt therefore; Principle: how levy on personal property made. To constitute a valid levy, the officer must take ACTUAL possession and ACTUAL custody of the property attached as far as practicable under the circumstances. Such property must be in his substantial presence and possessionadverse to and exclusive of the attachment debtor. WALKER V. MCMIKING 14 phil 668 (1909) FACTS: Walker was the owner of a Filipino carriage factory and Rohde is the owner of the land June 30, 1908 Walker sold the building to Arenas &Co to which the latter will pay it in 3 installments; failure to pay shall result to rescission of the contractreconveyance of

goods are found deposited . . . in the possession of the same defendants according to a stipulation signed by both parties which is attached to this writ. The attached stipulation recites that all the goods attached shall remain in the possession of the same defendants, relieving the sheriff of all responsibility as regards the care and custody thereof.
January 1909 Walker rescinded the sale and since the company failed to pay the rents for the land, Rohde, as owner of the land, took possession of said property with its contents. Mr. Rohde testified that at the time he took possession of said factory, representing himself and the said Walker, there was no one in possession of said property except the said Arenas & Co., and that Arenas & Co. turned said property over to him without any objection whatever, in fact, that the delivery was made by mutual consent and agreement. February 1909 It appears in the record, that in some way, McMicking obtained possession of the articles mentioned in paragraph 1 of the complaint, and that some time early in the month of February, 1909, they were sold for the sum of P191, and a few cents. Contention of WALKER The pretension of the plaintiff is that the defendant, Jose McMicking, took possession of certain personal property, and retains the possession of the same, which belongs to them. Even admitting that the defendant did, by virtue of an attachment, as sheriff, pretend to take possession of the property in question, the plaintiffs contend that the attachment was void for the reason that the defendant, as sheriff, did not comply with the law in levying the said attachment NO ACTUAL CUSTODY was made. Contention of SHERIFF MCMICKING In the case filed against him, he filed a GENERAL DENIAL; he denied he has the properties. The evident theory of the defendant and appellant is that the attachment had the effect of defeating the right of the plaintiffs in said factory and its contents. It appears in the record, that in some way the defendant obtained possession of the articles mentioned in paragraph 1 of the complaint, and that sometime early in the month of February, 1909, they were sold for the sum of P191, and a few cents. It is not suggested in the record that the defendant, McMicking, is sued as sheriff. The defendant does not pretend that what he did was done as sheriff. The plaintiff does not attempt to recover of the defendant as sheriff. February 5 Walker filed a complaint to recover the possession of certain personal properties or in default thereof the sum of P1,500, its value, and costs. The defendant filed a general denial. Contention of Walker and Rohde they have a preferred claim against the factory and its contents RTC: Attachment was NULL AND VOID. McMickign did not comply with the proper manner of attaching property. He did not attach and safely keep the movable property attached. A verbal declaration of seizure of service of a writ of attachment and placing the attached property under the control of the officer or someone representing him.

ISSUE: WON there was a proper levy of personal propertyNO HELD: NO. the attachment was not properly made. Rule: to constitute a valid levy of an attachment, the officer levying it must take actual possession of the property attached as far as under the circumstances is practicable. He must put himself in position to,

Sharing is Good Karma Page 21

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU and must assert and, in fact, enforce a dominion over the property adverse to and exclusive of the attachment debtor, and such property must be in substantial presence and possession. Of course, this does not mean that the attaching officer may not, under an arrangement satisfactory to himself, put anyone in possession of the property for the purpose of guarding it, but he cannot in this way relieve himself from liability to the parties interested in said attachment. IN THE PRESENT CASE He did not attach and safely keep the movable property attached. A verbal declaration of seizure of service of a writ of attachment is not sufficient. There must be an actual taking of possession and placing the attached property under the control of the officer or someone representing him. First. The defendant attached certain property under a writ of execution issued by one of the courts of the city of Manila, which attachment, however, was levied upon the property in question. This attachment, however, was rendered invalid and of no effect for the reason that the defendant did not maintain his control over the same, either personally or by his representatives. The attachment became invalid the moment the sheriff lost either his actual or constructive control over the property. Second. The plaintiffs herein, innocently and in good faith and under a right, acquired possession of the property in question. Third. That subsequent to the acquisition of the possession by the plaintiffs, the defendant, in some way which does not appear of record, acquired possession of the property in question, and admits that he subsequently sold it. Fourth. The plaintiffs allege that the defendant is in possession of property belonging to them, and prays that the same may be returned or its value. The defendant denies (general denial) that he has the possession of the property. The evidence clearly shows that the defendant did take possession of property which was rightfully in possession of the plaintiffs. He is therefore liable, either to return said property or its value. OTHER MATTERS: 1. Attachment was not properly made in accordance with the provisions of the Code of the Procedure in Civil Actions. There is no pretension, however, in record, on the part of the defendant, that he attached said property and held the same by virtue of such attachment. Even though this defense had been made by the defendant, which is only made by his attorney, it would be an admission of the principal facts alleged by the plaintiffs in their complaint to wit, that he had taken possession of personal property belonging to them. The defense made by the defendant is new matter to which no reference whatever was made in the pleadings, and it is, therefore, upon the whole, inadmissible. Facts not alleged in the pleadings but offered as evidence, which admit the facts alleged, but tend to confess and avoid the facts alleged, are not admissible in evidence. 2. On the matter of rescission The fourth clause of the contract of sale gave the vendor of said factory and contents the right to rescind the sale for a failure to pay any of the subsequent installments. The plaintiffs testified during the trial that the second installment had not been paid, in accordance with the terms of the contract and that he, therefore, rescinded the contract of sale, to which rescission, the said company (the purchaser) acceded and delivered to the plaintiff Walker the said carriage factory and its contents. No allegation is made by the defendant that either the contract or the rescission of the contract was corruptly made, or for the purpose of defrauding any of the creditors. 3. On the matter of return of money; without it, no rescission can be had? NO. Arenas & Co. have made no claim for the return of the money which they paid on said contract. If they have a right to a return of the money which they paid on said contract upon a rescission by Walker, a question

RIZADA, RESCI ANGELLI which we do not now decide, they are the only ones which can insist upon it. No such claim is here made. It is not a right which the defendant in this action can insist upon. --------------------o0o0------------------Principle: DUTY of sheriff: a sheriffs prerogative does not, however, give him the liberty to determine who among the parties is entitled to the possession of the attached property. The sheriffs act of leaving the passenger jeep in the possession and control of the creditor did not statisfy the rule on levy on personal property under the Rules of court; neither did it conform to the plainly worded RTC order. The note in the receipt that imposed on Ignacio the obligation to produce the same whenever required by the court was no compliance either, because it did not establish that the property was in respondent sheriffs substantial presence and possession. Respondent fell short of his obligation to take and safely keep the attached property in his capacity. He cannot feign ignorance on his duty as sheriff in a case for attachment. NBI V. TULIAO 270 SCRA 351, MARCH 24, 1997 FACTS: Owner of passenger jeep: Lito Ignacio Buyer: Salvador Salvador bought a passenger jeep from Lito Ignacio to be paid in installments of 7K after paying a down of 50K Salvador diligently paid until in March 1994, in the absence of Ignacio, Salvador was forced to pay to unnamed brother of Ignacio for the amount due for 2 months brother failed to remit the amount to Ignacio Ignacio filed a suit for collection of sum of money WPA issued attachment of the passenger jeep Motion to discharge WPA filed by Salvador upon filing of a counterbond for the release of the vehicle Sheriff Tuliao ordered to release the vehicle Sheriff Tuliao REFUSED To comply with the said order. Instead, he released the passenger jeep to Ignacio after the latter had executed a receipt therefore together with an undertaking that he would produce the jeep whenever required by the court. Sheriff contends that his act of not taking into his official custody the attached property was not unlawful but was in fact reasonable because the court had no facility for its storage. That it could no longer be returned to complainants possession in accordance with the courts order was not his fault but that of the attaching creditor who had violated his obligation to produce the same whenever required by the court. He offers to pay a fine in the discretion of the Honorable Court as he has not benefited any pecuniary interest. ISSUE: whether respondent sheriff is administratively liable for failing to release the property under custodia legis to the complainant in accordance with the order of the regional trial court. HELD: YES. Sheriffs manner of attachment is irregular and his reason is totally unacceptable. respondents act of leaving the passenger jeep in the possession and control of the creditor did not satisfy the foregoing requirements of the Rules; neither did it conform to the plainly worded RTC order. The

note in the receipt that imposed on Ignacio the obligation to produce the same whenever required by the court was no compliance either, because it did not establish that the property was in respondent sheriffs substantial presence and possession. Respondent fell short of
his obligation to take and safely keep the attached property in his capacity. He cannot feign ignorance of this duty as he himself

Sharing is Good Karma Page 22

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU correctly cited an early decision of this Court explaining a sheriffs duty in attachment, as follows: x x x A verbal declaration of seizure or service of a writ of attachment is not sufficient. There must be an actual taking of possession and placing of the attached property under the control of the officer or someone representing him. We believe that to constitute a valid levy of an attachment, the officer levying it must take actual possession of the property attached as far as practicable (under the circumstances). He must put himself in a position to, and must assert and, in fact, enforce a dominion over the property adverse to and exclusive of the attachment debtor, and such property must be in his substantial presence and possession. Of course, this does not mean that the attaching officer may not, under an arrangement satisfactory to himself, put anyone in possession of the property for the purpose of guarding it, but he cannot in this way relieve himself from liability to the parties interested in said attachment. On removing it to unknown location That Ignacio was able to move the passenger jeep to an unknown location is further proof that respondent sheriff had not taken and safely kept it in his substantial presence, possession and control. His claim that the regional trial court did not have any storage facility to house said property is no justification. He could have deposited it in a bonded warehouse. ISSUE: Sheriff contended that in order to recover possession of the jeep, Salvador should have compelled the attaching creditor, Ignacio, to release the same. HELD: Contrary to respondent sheriffs contention, compelling the attaching creditor to release the property in question was not in order, because the proper remedy provided by the Rules of Court was for the party whose property had been attached to apply for the discharge of the attachment by filing a counterbond. The effect of this remedy is the delivery of possession of the attached property to the party giving the counterbond. The attaching creditor was not authorized to have

RIZADA, RESCI ANGELLI foregoing shows that the implementation of the writ of attachment was marred by excessiveness, irregularity and oppressiveness. June 19, 2002 Motion to discharge attachment by filing of counterbond was granted. Writ of Attachment was DISCHARGED and machine was returned. Thereafter, on 9 July 2002, an Urgent Ex-Parte Motion to Withdraw Cash Deposit was filed, without notice to the defendants and despite failure of the plaintiff to set such litigious motion for hearing and contrary to existing laws and jurisprudence. (Cash deposit was withdrawn and given to Star Paper even without judgment having been rendered against them!) Judge Lee granted the same in his Order of 17 July 2002. Defendants only learned of the withdrawal when they received a copy of the said Order. Contention of defendants Defendants stressed that the Motion to Withdraw Cash Deposit has no basis, shows no urgency, lacks notice and hearing, and is already a prejudgment of the case even before the pre-trial stage which is tantamount to the taking of property without due process of law. Contention of Judge Lee judge admitted that he had committed a procedural error when he released the counterbond to the plaintiff in the said civil case. However, when the defendants therein, through their Motion for Reconsideration, called his attention to the mistake, he

immediately ordered the return of the counter-bond to the custody of the Office of the Clerk of Court. He cited

possession of the attached property, contrary to the insistence of respondent sheriff.

----------------------o0o------------------VILLANUEVA-FABELLA V. JUDGE RALPH LEE 419 scra 440 (2004)

jurisprudence to defend his acts and asserted his good faith and lack of malice. Moreover, he averred that he had not delayed the resolution of the Motion. Finally, he urged the Court to dismiss the instant Complaint outright for being instituted without basis and merely to harass him. Contention of Sheriff: sheriff claimed that after receiving the Writ of Preliminary Attachment, he sought its implementation; He allowed the parties in the civil case to negotiate for a settlement, but when the negotiations bogged down, he attached a printing machine that was not in use at the time. He denied that there was abuse in the

levy, claiming that the machine was an old 1970 model. Moreover, he said that, contrary to complainants

allegation that the machine was valuable, no receipt to prove its true value was ever shown. Respondent sheriff added that it was in his own belief and best judgment to

temporarily place the delicate printing machine in the warehouse of the plaintiff for safekeeping. The machine

Nature of the case: admin complaint against Judge Lee for manifest partiality, incompetence and gross ignorance of the law and Sheriff de la cruz for unjust, oppressive, irregular and excessive enforcement of a writ of attachment FACTS: Star paper filed a case for sum of money against the Society of st. paul and Fr. Eleazer; Atty. Villanueva and Arugay were their counsels WPA issued against Society of St. paul ground: defendants contracted debt in bad faith and with no intention of paying the same June 19, 2002 printing machine was levied delivered to Star Papers warehouse there was an offer by the priests to pay right then and there in the amount fixed in the order of attachment but Star Paper denied their plea Contention of the lawyers Sheriff Dela Cruz violated x x x Rule 57, Section 7, 1997 Rules of Civil Procedure which provides that in the attachment of personal property capable of manual delivery, [the property should] be taken and safely kept in the sheriffs custody. The machinery, according to complainants, [was] brought to [the] plaintiffs warehouse in San Francisco del Monte, Quezon City. The

was eventually returned to the defendants by virtue of the Order discharging the Writ. In fact, one of the complainants personally acknowledged receipt of the machine. OCA findings: The OCA found that respondent sheriff had erred when he deposited the plaintiffs levied property in the warehouse and thereby lost actual or constructive possession thereof. The OCA said that this legal violation could not be justified by the weight and the condition of the machine, which could have been deposited in a rented private warehouse where it could have been guarded under his strict supervision.

ISSUE: WON Sheriff is liable for erroneous levy of personal property. HELD: YES. He blatantly violated Section 7(b) of Rule 57 of the Rules of Court when he deposited the machine in the warehouse of the plaintiff. Rationale: In enforcing a writ of attachment, a sheriff who takes personal property capable of manual delivery shall safely keep it in custody after issuing the corresponding receipt therefor. Respondent

sheriff failed to do so.

To constitute a valid levy of attachment, the officer levying it must have actual possession of the property attached. He must put himself in [a] position to, and must assert and, in fact, enforce a

Sharing is Good Karma Page 23

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU dominion over the property adverse to and exclusive of the attachment debtor. To this rule we add that the officer cannot even deliver the property to the attachment creditor, as the parties must await the judgment in the action. The levied property must be in the substantial presence and possession of the levying officer, who cannot act as special deputy sheriff of any party litigant. The officer may put someone in possession of the property for the purpose of guarding it, but the former cannot be relieve[d] xx x from liability to the parties interested in said attachment. The duty of sheriffs to execute a writ issued by a court is purely ministerial, not discretionary. Clearly, they must keep the levied property safely in their custody, not in that of any of the parties. They exercise no discretion in this regard, for attachment is harsh, extraordinary and summary in nature -- a rigorous remedy which exposes the debtor to humiliation and annoyance. Contrary to the claim of respondent sheriff, his unusual zeal and precipitate decision to give possession of the machine to the plaintiff effectively destroys, the presumption of regularity in his performance of official duties. Any method of execution falling short of the requirement of the law deserves reproach and should not be countenanced. In implementing the Writ, respondent sheriff cannot afford to err without adversely affecting the proper dispensation of justice. sheriff guilty of simple neglect of duty for violating Section 7(b) of Rule 57 of the Rules of Court. ISSUE: WON Judge Lee is liable for issuing an order granting the withdrawal of cash deposit HELD: his grant of the withdrawal of the cash deposit -- an Order he later reversed by ruling that the deposit be returned to the clerk of court -- was a mere error of judgment, not an act revealing gross ignorance of the law or procedure. Rationale: Attachment is a juridical institution intended to secure the outcome of a trial -- specifically, the satisfaction of a pecuniary obligation. Such order is enforced through a writ that may be issued at the commencement of an action, commanding the sheriff to attach property, rights, credits or effects of a defendant to satisfy the plaintiffs demand. Hence, the property of a defendant, when taken, is put in custodia legis. 2 WAYS OF DISCHARING WPA: 1. In order to prevent the sheriff from levying an attachment on property, the defendant (also called the adverse party) may make a deposit or give a counter-bond in an amount equal to that fixed in the order of attachment. Such deposit or counter-bond is intended to secure the payment of any judgment that the plaintiff (also called the attaching party or the applicant to the writ) may recover in the action. 2. After a writ has been enforced, however, the adverse party may still move for the discharge of the attachment, wholly or in part, by also making a deposit or giving a counterbond to secure the payment of any judgment the attaching party may recover in the action. The property attached shall

RIZADA, RESCI ANGELLI

First, he rectified himself within the period given for deciding motions. Second, respondent judge owned up to his mistake in his
Comment. His July 17, 2002 Order was merely an honest mistake of judgment -- an innocent error in the exercise of discretion -- but not a display of gross incompetence or unfaithfulness to the law.

We have already ruled that as long as the judgment remains unsatisfied, it would be erroneous to order the cancellation of a bond filed for the discharge of a writ of attachment. In like manner, it would be erroneous to order the withdrawal of a cash deposit before judgment is rendered. For liability to attach for ignorance of the law, the assailed order of a judge must not only be erroneous; more important, it must be motivated by bad faith, dishonesty, hatred or some other similar motive. Certainly, mere error of judgment is not a ground for disciplinary proceedings. On the grant of the Ex-Parte Motion to Withdraw Cash deposit The Rules mandate that, except for motions that the court may act upon without prejudicing the rights of the adverse party, every written motion shall be set for hearing by the applicant. The notice of hearing shall be addressed to the defendants therein and shall specify the time and date of the hearing, which must not be later than ten (10) days after the filing of the motion. The motion and notice shall be served at least three days before the date of hearing. Without proof of its service, the court cannot act upon it. Indeed, the plaintiffs Motion to withdraw the cash deposit lacked notice of hearing and proof of service. Respondent judge should not have acted upon it. However, because he had erroneously thought that the rights of the defendants would not be prejudiced thereby, he took action. His poor judgment obviously resulted in his issuance of the erroneous Order that granted the release of the deposit. --------------o0o--------------Principle: Respondent Sheriffs claim that the RTC did not have any storage facility to house said property is no justification. He could have deposited it in a bonded warehouse. SEBASTIAN V. VALINO 224 scra 256, july 5, 1993 Nature of the Case: Marblecraft, Inc., represented by its Assistant General Manager, Reynaldo Sebastian, charges Alberto A. Valino, Senior Deputy Sheriff, with (1) gross abuse of authority committed in connection with the implementation of the writ and (2) refusal to enforce the trial court's for the return of the seized items. FACTS: On March 3, 1989, Private Development Corporation of the Philippines (PDCP) filed a replevin suit against Marblecraft, Inc., in order to foreclose the chattels mortgaged by Marblecraft. On March 30, 1989, the Regional Trial Court, Makati, issued a writ of seizure directed against Marblecraft covering the chattels sought to be replevied. The enforcement of the writ of seizure was delayed because of the writ of preliminary injunction enjoining PDCP from proceeding with the foreclosure sale issued by the Regional Trial Court, Pasig, Metro Manila It was only on October 31,1990, when the Regional Trial Court, Pasig, dissolved the writ of preliminary injunction. On November 9, 1990, at around 10:37 A.M., Sheriff Valino, accompanied by several policemen and PDCP employees, went to the office of Marblecraft at Barrio Santolan, Pasig, to implement the writ of seizure. a. They forcibly opened the lockers and desk drawers of the employees of complainant and took their personal belongings, as well as some office equipment issued to them. The employees filed with the Office of the Provincial Prosecutor of Rizal

then be released and delivered to the adverse party; and the money deposited shall be applied under the direction of the court to the satisfaction of any judgment that may be rendered in favor of the prevailing party.

In the instant case, respondent judge had ordered the withdrawal of the cash deposit of the defendant and released it in favor of the plaintiff, even before judgment was rendered. This action was clearly in violation of the Rules mandating that after the discharge of an attachment, the money deposited shall stand in place of the property released. However, the inadvertence of respondent judge was not gross enough to merit sanction.

Sharing is Good Karma Page 24

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU two criminal complaints for robbery against respondent and his companions. Sheriff Valino only showed to complainant's counsel a copy of the writ but did not furnish him with a copy of the application for the writ, the supporting affidavit and the bond. In the course of the implementation of the writ, which lasted for four days, several pieces of machinery and equipment were destroyed or taken away by respondent.

RIZADA, RESCI ANGELLI The only action taken by respondent to implement the Order dated December 11, 1990 was to write a letter on December 12, 1990, addressed to the counsel of PDCP, requesting the turnover of seized articles. As expected, PDCP's counsel refused to part with the possession of the seized articles and to issue a letter of authorization to withdraw the same from the warehouse. Instead of taking

b.

c.

d.

Counterbond was filed by Sebastian RTC approved the bond and directed the immediate return of the seized items. Sheriff Valino DID NOT implement the orders. Contention of the sheriff he branded the administrative complaint against him as pure harassment filed by Marblecraft after he had refused to defer the implementation of the writ of seizure. He said that if he did not implement the writ, he would have been accused by PDCP of nonperformance of his duties as a sheriff. He pointed out that the criminal complaints for theft filed against him by the employees of complainant were dismissed by the Provincial Prosecutor of Rizal.

Respondent turned over the seized articles to the counsel of PDCP and allowed these items to be stored in PDCP's warehouse in Taguig, Metro Manila.

possession of the articles, respondent merely reported to the Regional Trial Court that "[i]t is now clear that the undersigned cannot implement the Court order dated December 11, 1990 by reason of the refusal of PDCP to accept or to honor said Court order"

Respondent could have avoided getting into his present predicament had he not turned over the possession of the seized goods prematurely to the PDCP.

The complainant cannot be blamed if it harbored the suspicion that respondent was beholden to PDCP. The zeal with which respondent
enforced the order of seizure in favor of PDCP was in sharp contrast with his inaction in enforcing the three orders of the trial court directing him to return the seized items to complainant.

ISSUE: WON there was proper levy of personal property. HELD: NO. Under the Revised Rules of Court, the property seized under a writ of replevin is not to be delivered immediately to the plaintiff. The sheriff must retain it in his custody for five days and shall return it to the defendant, If the latter, as in the case, requires its return and files a counterbond. In violation of said Rule, respondent immediately turned over the seized articles to PDCP. His claim that the Office of the Regional Sheriff did not have a place to store the seized items, cannot justify his violation of the Rule. As aptly noted by the Investigating Judge, the

RULE FOR DUTY OF SHERIFFS It is not for respondent to question the validity of the orders of the trial court. It is for him to execute them. As observed by the Investigating Judge, "[t]here is therefore no excuse for respondent's wilfull refusal to implement the Order of the Court. Disobedience by court employees of orders of the court is not conducive to the orderly administration of justice. The display of partially in favor of a party as against the other party erodes public confidence in the integrity of the courts. Hence, sheriff Valino is guilty of serious misconduct. ---------------------o0o------------------Principle: leaving the attached property in the possession of the attaching creditor makes a farce of the attachment. This is not in compliance with the issuing courts order. When a writ is placed in the hands of a sheriff, it is his duty, in the absence of any instructions to the contrary, to proceed with reasonable celerity and promptness to execute it according to its mandate. He is to execute the directives of the court therein strictly in accordance with the letter thereof and without any deviation therefrom. VILLAREAL V. sheriff RARAMA 247 SCRA 493 Nature of the case: arose from a sworn complaint filed by Marianette Villareal against respondents Rolando T. Rarama, Restituto Madrazo, Fidel Casuyon, and Aguinaldo del Campo who are all serving as Sheriff III in Branches V, VII, II, and III, respectively, of the Municipal Trial Courts in cities (MTCC), Davao City, for allegedly "conniving and confederating in maliciously serving a writ of execution intended for another person who is living in another place." FACTS: An action for collection of a sum of money was filed by the Cooperative Rural Bank of Davao City against the spouses Marianette and Roy Villareal, Lito Lacorda and Felimon Cangrejo summons was served upon Felimon Cangrejo who, however, failed to file his answer, as a consequence of which he was declared in default. April 19, 1989, judgment was rendered against Cangrejo in favor of the plaintiff bank without prejudice to his right to proceed against his co-debtors. March 29, 1994 an alias writ of execution was issued by the trial court against Cangrejo. Testimony of Marianette Villareal at around 1:30 P.M. of April 25, 1994, respondent Rarama arrived at her house in Digos, Davao del Sur, together with the other respondents and three employees of the Cooperative Rural Bank of

articles could have been deposited in a bonded warehouse.

OTHER INFRACTIONS OF SHERIFF:

1.

Respondent must serve on Marblecraft not only a copy of the order of seizure but also a copy of the application, affidavit and bond (Sec. 4, Rule 60, Revised Rules of Court).
Respondent did not furnish defendant with a copy of the application, affidavit and bond. By his own admission, he only served it with a copy of the order of seizure

2.

The more serious infraction of respondent is his refusal to

implement the order of the Regional Trial Court, Makati for him to return to complainant the articles seized pursuant to the writ of seizure dated March 30, 1990.

The Order dated November 14, 1990 directed him "to immediately return to defendant all its properties seized and taken from its premises pursuant to the writ of seizure of March 30, 1989, from receipt of this Order The Order dated November 26, 1990 directed him "to implement the Order of this Court dated November 14, 1990 and to immediately return to defendant all its properties seized and taken from its premises pursuant to the writ of seizure dated March 30, 1989 from receipt of this Order The Order dated December 11, 1990 directed him "to implement the Order of this Court dated November 26, 1990, within three (3) days from the receipt hereof, otherwise this Court will be constrained to appoint and deputize another sheriff to implement the order dated November 26, 1990"

Sharing is Good Karma Page 25

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU Davao City, Inc., including one Vic Belo who is a collector of the bank. Manner of implementing writ is as follows: a. Rarama introduced himself as a sheriff of Davao City and informed her that they were going to attach her properties because she lost in a case.

RIZADA, RESCI ANGELLI Respondents further allege that complainant requested Rarama not to implement the writ against Cangrejo because he was merely her co-maker who never benefited from the loan extended to her by the Rural Bank of Davao, after which she offered to pay her obligations in monthly installments. Respondent Rarama did not agree to the proposal since he was not authorized to enter into that compromise but, at the same time, he suggested that complainant deposit some of her personal properties as security for the settlement of her obligation, and the latter allegedly agreed. Much later, the properties hereinbefore mentioned were released to complainant by virtue of a letter from the creditor bank. Respondents controvert the claims of complainant that they forcibly entered her house and took possession of her personal properties without her consent. On the contrary, they insist that complainant deposited her personal properties voluntarily and of her own free will. They likewise contend that it is not true that complainant has never been charged in court for in fact there was a pending criminal case for violation of the law on bouncing checks, as well as a civil case for collection of a sum of money, filed against her. VILLAREAL maintains her original stand that she did not voluntarily deposit her personal properties with respondents and declares as untrue respondents' claim that they merely came to see her to ask for the address of Felimon Cangrejo. FINDINGS OF INVESTIGATING RTC JUDGE that he along with the representatives of the plaintiff bank went to the house of the complainant only to ask for the address of Felimon Cangrejo; that the four items taken by them were offered as deposit by the complainant after requesting Rarama not to implement the alias writ against Cangrejo as it was her loan and Cangrejo was only her co-maker; and that two days after, she got the items back upon making a partial payment of P10,000.00 to said bank and promising in writing to pay the balance within sixty days cannot be accepted as true in view of the followings points of the evidence: 1. The alias writ of execution although directed against Felimon Cangrejo only, was actually served by Sheriff Rarama on the complainant as evidenced by her signature at the bottom thereof along with the date "425-94", the date of the taking of the four items. Service of the writ on her was indicative of the intent to implement it against her personal interests. The RECEIPT issued by Rarama to the complainant, for the four items, positively shows that it was prepared in advance. The opening paragraph is typewritten and reads: "Received from defendants MARIANETTE & ROY VILLAREAL the personal properties mentioned and particularly described below, to wit:" Thus the fact that the names "MARIANETTE & ROY VLLLAREAL" had already been typewritten beforehand is a further indication of said intent, otherwise their names would have been handwritten like the descriptions of the four items appearing therein. There is nothing in the RECEIPT showing that the items were only deposited. On the contrary, it contains a typewritten paragraph which reads: "That the abovementioned personal property/ies was/were levied and attached by virtue of the Writ of Execution issued by Honorable ROBERTO Q. CANETE, Presiding Judge, MTCC, Branch 5, Davao City, dated March 29, 1994". The four items were not brought to the plaintiff bank (which would have been the case if they were merely deposited by private arrangement) but to the MTCC which issued the alias writ and from which the

b.

Complainant denied having been charged in court, much more of having lost in a case, and that she did not owe anything to the bank.

When respondent Rarama persisted in getting her properties, she demanded and was shown the writ of execution. She objected thereto, claiming that the same was not addressed to her but to Felimon Cangrejo and that the writ was being served after the principal borrower and the only one who is solvent. Despite the pleas of complainant and a neighbor for the postponement of the implementation of the writ until she shall have consulted her lawyer, one VHS player, one Singer sewing machine, one Chinese cabinet, and another Chinese cabinet with glass shelves 4 items were brought to Rural cooperative Bank

more than five years from the date the decision was rendered. The reply given her was that she is
c.

respondents immediately proceeded to pull out from complainant's house the following items, viz.:

d.

Allegedly, Villareal was forced to sign an inventory receipt because she would otherwise not be able to get back her things. She hastened to add that

e.

f.

g.

when she signed the receipt, the words "with my conformity" were not written thereon. The following day, complainant and her husband went to the bank to inquire about the status of her loan and she was informed that, unless she settled her account, her properties would not be released. Complainant avers that because of this she was constrained to pay the amount of P10,000.00 despite earlier representations made with the bank that she had fully paid her loan to the bank collector. She further asserts that she was thereafter forced to write a promissory note as dictated by the assistant manager of the bank, Gerry Alag, and the bank's lawyer, Atty. Herbert Arteg. Eventually, after she presented the receipt of payment and the promissory note to respondent Rarama, the attached properties were released to herein complainant.

Contention of Rarama he claims that on April 25, 1994, he went to Digos, together with Vic Belo and Bading dela Fuente, employees of the bank, to coordinate with Provincial Sheriff Andres regarding the implementation of the alias writ of execution issued in the aforementioned Civil Case. However, he was informed that he would have to implement the writ on his own because the other sheriffs were not available. On their way out of the Hall of Justice, they met respondents Madrazo, Casuyon and del Campo who, upon learning that Rarama's group was going to Digos where they all lived, decided to join the group so they could get a free ride. Upon the suggestion of Vic Belo, the bank collector, the group first went to the house of complainant purportedly to ask for the exact address of Felimon Cangrejo against whom the writ was issued. When they reached the house of complainant, respondent Rarama introduced himself and his other companions, and then inquired from the former about the address of Cangrejo. When complainant asked why they were asking her, Rarama showed her the writ of execution and the court decision. It was then that complainant stated that she was the principal defendant in the case. Sharing is Good Karma Page 26

2.

3.

4.

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU complainant recovered them after paying P10,000.00 to the bank. Vic Belo the collector of the bank, when asked in the course of his testimony in this case why he did not inquire before proceeding to Digos on April 25, 1994, (about) the address of Felimon Cangrejo from the NFA in Davao City, where the latter had been employed answered ". . . my perception is that since Mrs. Villareal is the principal borrower I focused more my attention on her"

RIZADA, RESCI ANGELLI remanded to respondent's sala for execution of the judgment. November 25, 1991 Judge ocampo issued a writ ordering the demolition of the remaining half portion of complainant's residential house found standing on a public property (legal easement). It further appears that on August 19, 1992, a second writ of demolition was issued by the respondent Judge, followed by a third one dated February 3, 1993. However, it was only of SEPTEMBER 2, 1992, 1:30PM that it was implemented. September 2, 1992, 2:15 PM TRO was issued to stop the implementation of the writ of demolition. Contention of BALANTES: 1. Complaint against judge respondent judge issued the orders granting plaintiff's motion for issuance of writ of demolition with precipitate haste, hence, he was deprived of his right to oppose the same, that the effect of these writs of demolition is to demolish complainant's entire house, notwithstanding that the appellate court's 3 writ of execution and demolition issued pending appeal ordered the demolition only of the half portion of his house found standing on plaintiff's land. 2. On the complaint against Sheriff complainant alleges that she immediately proceeded to implement the writs of demolition without giving him a chance to move for a reconsideration of the order granting issuance thereof. Contention of Judge Julian Ocampo III: 1. He explained that after a series of appeals and the remand of records to court a quo, he issued the questioned writs of demolition with respect to the remaining portion of complainant's house situated inside the property which court a quo found to be owned by the plaintiff by right of accretion. 2. he argues that a writ of demolition, being merely incidental to the execution of a final judgment, is immediately enforceable after hearing the arguments of both parties; that though the writ of demolition was issued on the same day the court issued its order of August 19, 1992, the writ was implemented only on September 2, 1992; that a motion for reconsideration was filed by herein complainant on August 29, 1992 to forestall its implementation but the same was submitted for the court's consideration only on September 3, 1992 and by that time the writ had already been implemented. 3. Respondent Judge further argues that the restraining order issued on September 2, 1992 cannot be complied with because by the time it was received by the City Sheriff, the writ of demolition had already been effected and the premises delivered to the plaintiff.

5.

ISSUE: WON there was proper levy of personal property HELD: NO. While there is evidence to show that indeed complainant Marianette Villareal is the principal debtor while Felimon Cangrejo is merely a co-maker, the fact remains that Cangrejo was the sole debtor adjuged liable for the loan obtained from the Cooperative Rural Bank of Davao City, Inc. and the alias writ of execution was directed only against him. Hence, respondent Rarama had no authority to implement the same against herein complainant considering that, although she was named as a defendant in the collection case, there was no judgment against her as of the date of the incident. Rationale:The sheriff, as an officer of the court upon whom the execution of a final judgment depends, must necessarily be circumspect and proper in his behavior. Execution is the fruit and end of the suit and is the life of the law. 9 Thus, when a writ is placed in

the hands of a sheriff it is his duty, in the absence of any instructions to the contrary, to proceed with reasonable celerity and promptness to execute it according to its mandate. He is to execute the directives of the court therein strictly in accordance with the letter thereof and without any deviation therefrom.

Hence, a sheriff has no authority to levy on execution upon the property of any person other than that of the judgment debtor. If he does so, the writ of execution affords him no justification, for such act is not in obedience to the mandate of the writ. 10 As long as the sheriff confines his acts to the authority of the process, he is not liable, but all of his acts which are not justified by the writ are without authority of law. This is so because if an execution against one man would excuse the sheriff for taking the property of another, every citizen would be at his mercy and none could call his estate his own. Respondent Rarama's improvidence in enforcing a judgment against complainant who is not the judgment debtor in the case calls for disciplinary action. Considering the ministerial nature of his duty in enforcing writs of execution, it is incumbent upon him to ensure that only that part of a decision ordained or decreed in the dispositive portion should be the subject of execution, no more and no less. ON THE MATTER THAT VILLAREAL WAS ONE OF THE DEFENDANTS IN THE CASE That the title of the case specifically names complainant as one of the defendants is of no moment as execution must conform to that which is directed in the dispositive portion and not what appears in the title of the case. ---------------o0o------------BALANTES V. OCAMPO III and Sheriff Buena 242 scra 327, March 14, 1995 FACTS: Roco filed a case for ejectment against Balantes. RTC judge Ocampo rendered a decision against Balantes. RTC issued a Writ of Execution and Demolition pending appeal, ordering the removal of one-half (1/2) portion of Balantes residential house found to be built inside the titled property of Roco Subsequently, the decision on appeal was affirmed by same RTC nd the records of the case were

ISSUE: WON sheriff was administratively liable. HELD: NO. As regards the charge against respondent Clerk of Court and Ex-Officio Sheriff Lilia S. Buena, the same is dismissed. Rationale: it appearing from the certification she issued that the Temporary Restraining Order issued by the RTC, Branch 27, Naga City was received by her on September 2, 1992 at 2:15 p.m., after the demolition had been completely effected and the premises delivered to the plaintiff at 1:30 p.m. of same date. It appears that respondent Buena was not aware of the existing TRO which she received within the hour after the demolition had taken place, thus rendering said restraining order a fait accompli.

Sharing is Good Karma Page 27

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU The rule is that when a writ is placed in the hands of duty, in the absence of instructions, to proceed celerity and promptness to execute it according to may not apply his discretion as to whether to execute a sheriff, it is his with reasonable its mandate. He it or not. 2. 3.

RIZADA, RESCI ANGELLI 10PM of the same day, the judgment debtors surreptitiously removed several pieces of furniture from the house which they rented. On June 26 and 30 and again on July 4, 11, 38 and 19, 1992, they removed appliances and other personal properties and destroyed building fixtures on the property owned by complainant. On these occasions, according to the complainant,

ISSUE: WON respondent judge is administratively liable. HELD: YES. We find respondent judge to have grossly abused his authority in issuing the questioned writs of demolition. Rationale: A precise determination of the total land area encroached upon by complainant over subject property in Civil Case No. 8339 has been ordered by Judge Gregorio Manio, RTC, Branch 23, Naga City in the course of the appeal thereof. Records show that previous to the issuance of the writ of execution and demolition pending appeal, said judge ordered the deputy sheriff with the assistance of a geodetic engineer to determine the metes and bounds of the plaintiff's property. The Sheriff's Return clearly showed that two (2) meters of plaintiff's property had been more or less encroached upon by complainant's house while it occupied three (3) meters, more or less, of the legal easement formed by accretion. The writ of demolition thus issued by the appellate court contained specifications in accordance with such findings and was returned fully satisfied on January 20, 1990. Moreover, the decision of the RTC, Branch 23, Naga City which incorporated such findings was successively affirmed by the Court of Appeals and the Supreme Court. Respondent Judge, therefore, was fully aware of the previous delineation of the property of the plaintiff. Nevertheless, when the records were remanded to him and upon motion of the plaintiff's counsel, he issued another writ of demolition which sought to demolish the remaining portion of the defendant's house which, as already found by the appellate court(s), was standing upon a public property. The order of demolition dated November 20, 1991 which he issued, in fact, was the subject of a petition for certiorari before the same RTC, Branch 23, Naga City where Judge Gregorio A. Manio declared said order of demolition and the writ issued pursuant thereto as null and void, having been issued with grave abuse of discretion and enjoined respondent Judge from issuing any further writs of demolition in Civil Case No. 8339. Despite this directive, respondent Judge exhibited a defiant attitude by issuing another writ of demolition dated August 19, 1992. Said order was the subject of another petition for certiorari/ prohibition wherein Judge Antonio N. Gerona of Branch 27, RTC, Naga City issued an order dated September 2, 1992 restraining the implementation of the aforesaid writ of demolition by the sheriff of MTC, Naga City. ------------------------o0o---------------Principle: Sheriff is supposed to execute the order of the court strictly to the letter. If he fails to comply, he is liable to the person in whose favor the process or writ runs. ELIPE V. FABRE 241 SCRA 249, February 13, 1995 Nature of the case: administrative complaint filed against Honesto G. Fabre, charging him with nonfeasance and incompetence in the performance of his duties as Deputy Sheriff FACTS: June 19, 1992, the MTCC issued a writ of execution for the enforcement of a barangay agreement in for collection of unpaid rentals and construction materials amounting to P100,000.00 filed by Elipe against Spouses dela Cerna Testimony of Victor Elipe: 1. June 25, 1992, 9:00Am Sheriff Fabre served the writ or judgment debtors Michael dela Cerna and his wife but he was able to levy only upon a dilapidated vehicle 4.

respondent did not make any effort to prevent the judgment debtors from removing leviable properties to implement the writ, despite the fact that he had been told by complainant of the judgment debtors' activities.

Contention of Sheriff Fabre he claimed that he levied on several properties of the judgment debtors, but unfortunately the bid price paid for them at the public auction was only P10,000.00. He justified his action in levying only on the personal properties which he found at the business establishment and in desisting from enforcing the writ with respect to properties on the second floor of the residence of the judgment debtors on two grounds: (1) the judgment debtors refused to let him in; and (2) he did not have any order from the MTCC to force open the door which had been locked. July 10, 1992 Sheriff sold to Victor Elipe, as the highest bidder at public auction, personal properties of the judgment debtors for P10,000.00. July 13, 1992, respondent levied on a parcel of land owned by the judgment debtors which on August 14, 1992 was also sold to complainant for P15,006.00 On December 17, 1992, personal properties of the judgment debtors which had been levied upon were sold, also to the complainant as the highest bidder, for P2,001.00. 6 The result is that the judgment debt of P100,000.00 was only

partially satisfied to the extent of P27,007.00.

Elipe filed this present case against Sheriff charging him with nonfeasance and incompetence in the performance of his duties as Deputy Sheriff

ISSUE: WON sheriff is administratively liable HELD: YES. SHERIFF IS ADMINISTRATIVELY LIABLE. because of respondent's inaction and lack of diligence in enforcing the writ of execution, the judgment debtors were able to cart away properties which he could have levied upon execution. Rationale: Deputy Sheriff correctly argued that he was not directed by any Judge by court orders to stop the carting away of properties or the demolition of the fixtures. But respondent Sheriff should understand

that by virtue of the writ of execution issued in favor of herein complainant, he (respondent Sheriff) was mandated to levy upon properties of judgment debtor to satisfy an obligation amounting to P100,000.00. However, in disregard of this Order, respondent Sheriff
chose to levy the properties of the judgment debtor which amounted only to P27,000.00. If indeed respondent Sheriff is dedicated in his work, respondent

Sheriff could have chosen to stop the carting away of the valuable properties of judgment debtor for the very purpose of levying it and for the purpose of complying with the Order.

If the arguments of respondent Sheriff will be sustained, all judgment debtors can easily circumvent the orders of the court by carting away their properties thinking that sheriffs have no authority to stop them. This line of thinking and reasoning will create chaos and instability in the administration of justice. SHERIFFS FAILURE TO INFORM ELIPE ON LEVY OF THE PROPERTIES IN THE 2ND FLOOR Furthermore, respondent Sheriff exhibited an utter disregard of what is incumbent upon him when he failed to inform the complainant that in order to levy properties of the defendant on the second floor of the establishment, a special order of

and an old piano.

Sharing is Good Karma Page 28

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU the court is necessary to force or break-open the closed door in accordance with Section 14, Rule 39 of the Rules of Court. The

RIZADA, RESCI ANGELLI LEVY MADE ON BARGE: On February 7, 1974, the Sheriff's "Notice of Levy Pursuant to the Writ of Attachment" was registered in the Office of the Commander of the First Coast Guard, District of Manila, 2 pursuant to Sec. 805 of the Tariff and Customs Code, as amended by Presidential Decree No. 34, requiring the registration of documents affecting titles of vessels with that entity. The said notice read, "levy is hereby made upon all the rights, titles, interest, shares and participation which the defendant Fil-Eastern Wood Industries, Inc. has or might have over a sea vessel or barge named Fil-Eastern V. It appears that prior to the issuance of said Writ of Attachment, Fil-Eastern had delivered the barge to the Cotabato Visayan Development Corporation sometime in April, 1973, for repair. The job was completed in June 1973, but Fil-Eastern failed to pay the cost of repairs of P261,190.59. Cotabato Visayan Development Corporation proceeded for the sale of said barge Eligio Roque acquired barge as highest bidder on April 24, 1974On the same date, the Cotabato Visayan Development Corporation issued an Affidavit of Release of mechanic's lien against Fil-Eastern. The Certificate of Sale was received in the office of the Philippine Coast Guard on May 3, 1974. 5 It was not until December 24, 1974, however, that Certificate of Ownership No. 8647, a Certificate. of Philippine Register, a Certificate of Change of Name of Vessel from Fil-Eastern V" to "Satellite I I, " as well as a Coastwise License, were issued to Roque by the Philippine Coast Guard. 6 These muniments of title were issued only after counsel for Eligio Roque had assured the Philippine Coast Guard, in a letter dated November 13, 1974, that "without touching on the merit of the preference of our client's claim in relation to the levy registered by other claimants, such levy is not in any manner a legal obstacle to the registration of the vessels in our client's name." 7 Acting thereon, the Acting Commandant of the Philippine Coast Guard in a letter dated November 23, 1974, authorized the issuance of a new certificate of registration annotating thereon any levy validly registered against said vessel(s)." 8 However, neither the Certificate of Ownership nor the Certificate of Philippine Register appended as Annexes "C" and "D", respectively, to petitioners' Urgent Manifestation and Motion filed before the lower Court 9 carry that annotation. On August 29, 1974, the Bank filed a "Motion for the Issuance of Another Writ of Attachment" stating that at the time of the issuance of the Writ on February 4, 1974, the barge in question could not be located within the jurisdiction of the trial Court. having been anchored somewhere in the Visayas, and that actual levy on the barge could not be made as "the original Order of attachment is allegedly in the possession of the Branch Deputy Sheriff appointed by the Honorable Court, who has not reported to the office since August 26, 1974, and, therefore, could not implement the writ." On the same date, August 29, 1974, the trial Court (Judge Rafael S. Sison, presiding) denied the issuance of another Writ (apparently ' v because it was deemed unnecessary), but instead ordered the Deputy Sheriff of Branch XXVIII to coordinate with the City Sheriff of Manila in the implementation of the Writ previously issued. On August 30, 1974, Deputy Sheriff Garvida actually

respondent Sheriff's duty was apparent but he did not comply with it as he should have. The attack on the complainant's moral character

was not necessary in this case, as it would not justify the nonperformance of his duties. When a writ is placed in the hands of a sheriff, it is his duty, in the absence of instructions, to proceed with reasonable celerity and promptness to execute it according to its mandate. He has no discretion whether to execute it or not LIABILITY OF THE SHERIFF Indeed, as clearly stated in the Manual for Clerks of Court, a sheriff, to whom a valid writ or process is delivered to be levied upon a property within his jurisdiction, is liable to the person in whose favor the process or writ runs if he fails to make a levy upon property owned by the judgment debtor within his jurisdiction and by reason thereof the judgment creditor is injured. It is omission not dependent upon intentional wrong or negligent omission to seize property of judgment debtor. 7 Respondent ought to have known the correct procedure to be followed in order to ensure proper administration of justice, especially in its concluding stage. He failed observe that degree of dedication to the duties and responsibilities required of him as a sheriff. He is bound to discharge his duties with prudence, caution and attention which careful men usually exercise in the management of their affairs. The sheriff, an officer of the court upon whom the execution of a final judgment depends, must be circumspect and proper in his behavior. Execution is the fruit and end of the suit and is the life of the law. In the case at bar, it is not that respondent did not know what he should do, given the problem that he was confronted with. In his answer respondent tried to excuse himself from what was his duty, claiming that he did not force his way into the second floor where the judgment debtors resided because a special court order was needed to enable him to do this. Knowing this to be the case, it was his duty to see to it that such an order was secured from the court. DISPOSITION: The fact is that he has shown himself to be less than energetic and zealous in the performance of his duty. His lackadaisical attitude betrays his inefficiency and incompetence which in accordance with sec. 46(b)(8) of the Civil Service Law is a ground for disciplinary action. 10 -------------------o0o---------------Principle: Mere guarding of the personal property is allowed but the sheriff is liable for the loss of the property. Constructive possession should be held sufficient where actual possession is not feasible, particularly when ti was followed up by the actual seizure of the property as soon as that could possibly be effected. Principle: in case of a vessel, levy is constructively made by the registration of the same with the PHilppine Coast Guard. ROQUE V. CA 93 scra 540 FACTS: Associated Banking Corporation instituted an action, against Fil-Eastern Wood Industries, Inc., a domestic corporation, for recovery of a sum of money. RTC: Upon ex-parte application by the Bank for a Writ of Preliminary Attachment, respondent Judge, after the filing and approval of the required bond of P220,000.00, issued, on February 4, 1974, an Order of Attachment commanding the Sheriff to attach the estate, real and personal, of Fil-Eastern.

seized and levied upon the vessel.

On October 7, 1974, respondent Bank and respondent FilEastern submitted a Compromise Agreement whereby FilEastern bound itself to pay to the Bank the principal amount of P200,000.00, with 1417,9 interest, plus other amounts stated therein. On October 9, 1974, respondent Judge approved the Agreement and rendered judgment accordingly. On November 6, 1974, the Bank moved for the issuance of a Writ of Execution for failure of Fil-Eastern to make payments within the period stipulated in the Compromise Agreement.

Sharing is Good Karma Page 29

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU Meanwhile, without prior authority from Deputy Sheriff Garvida the barge in question was "spirited away" to Bacolod City by a certain Captain Marcelino Agito, who claimed to have been given the right to use the same by Fil-Eastern. 12 On January 6, 1975, respondent Judge issued an Order requiring Capt. Marcelino Agito, in coordination with Deputy Sheriff Benjamin E. Garvida to bring back to Manila the barge in question. 13 On March 7, 1975, respondent Judge issued a Writ of Execution and ordered the sale of the barge at public auction, as follows: ORDER The Decision rendered by this Court under date of October 9, 1974 having already become final and executory, let a Writ of Execution be issued to be enforced by Sheriff Adriel V. Garcia by conducting an auction sale on the vessel placed under attachment. The satisfaction of the judgment in this case shall be given preference and the payment of the third party claim of Alfredo H. Maligaya for and in behalf of Leonardo M. Canoso shall be satisfied from whatever remaining proceeds of the auction sale on the aforedsaid vessel, if there be any. ROQUE: refused to-surrender the barge on the ground I d that Eligio Roque is now the new owner, having acquired the same by purchase at public auction, and praying that petitioners, and all persons claiming under them, be directed to surrender the barge to the custody of the Court through its duly authorized representative. RTC: Roque was cited in contempt; there was absence of formal claim relative to the barge subject of the WPA On April 24, 1975, petitioners filed before the trial Court an Urgent Manifestation and Motion seeking to set aside the Order of April 14, 1975, claiming that Roque is now the new owner of the barge having acquired the same at a public auction sale arising from a mechanic's lien. The Motion was denied by respondent Judge on the ground that the records belied petitioners' claim that the auction sale occurred very much ahead of the notice of levy. On July 16, 1975, respondent Deputy Sheriff Adriel V. Garcia submitted a report informing the Court that the barge in question had been turned over to him and was anchored along Pasig River, under guard.

RIZADA, RESCI ANGELLI makes an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serves such affidavit upon the officer while the latter has possession of the property, and a copy thereof upon the attaching creditor, the officer shall not be bound to keep the property under attachment, unless the attaching creditor or his agent, on demand of the said officer, secures him against such claim by a bond in a sum not greater than the value of the property attached. ... For another, when respondent Sheriff seized the vessel in question to be sold at public auction in accordance with the Order of execution of March 7, 1975, petitioner could have availed of the remedy under Section 17, Rule 39 of the Rules of Court which provides: If the property levied on be claimed by any other person than the Judgment debtor or his agent, and such person make an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serve the same upon the officer making the levy, and a copy thereof upon the judgment creditor, the officer shall not be bound to keep the property, unless such judgment creditor or his agent, on demand of the officer, indemnify the officer against such claim by a bond in a sum not greater than the value of the property levied on. ... Petitioner Eligio Roque argues, however, that he could not avail of the foregoing Rules inasmuch as the vessel was not in the actual custody of the Sheriff nor of the Court, since the supposed levy by the Sheriff on February 7, 1974 was a mere paper levy which, in legal contemplation, is no levy at an. It is a fact that respondent Sheriff could not effect seizure immediately, first, because the barge could nowhere be found in this vicinity, and subsequently when found, because petitioners would not deliver possession to the Sheriff. It was not until the trial Court granted the Sheriff's Motion praying for an Order directing petitioners or their agents to surrender the barge to the custody of the Court, that the Sheriff was able to take physical custody. As a general rule, however, a levy of an attachment upon personal property may be either actual or constructive. 17 In this case, levy had been constructively made by the registration of the same with the Philippine Coast Guard on February 7, 1974. Constructive possession should be held sufficient where actual possession is not feasible, 18 particularly when it was followed up by the actual seizure of the property as soon as that could possibly be effected. ISSUE: Petitioners further argue that the levy was illegal because the Writ was implemented more than sixty days after its issuance so that they need not have complied with Section 14, Rule 57, supra. HELD: The Rules do not provide any lifetime for a Writ of Attachment unlike a Writ of Execution. But even granting that a Writ of Attachment is valid for only sixty days, yet, since there was constructive levy within that period the fact that actual seizure was effected only thereafter cannot affect the validity of that levy. On the matter of immediate implementation of the order of Execution: Neither can it be said that respondent Judge committed grave abuse of discretion in issuing the challenged Order of April 14, 1975, supra, whereby it commanded the immediate implementation of the Order of execution of March 7, 1975 and ordered petitioners to surrender possession of the barge to the Sheriff under pain of contempt. A trial Court is enjoined by law to bring about a prompt dispatch of the controversy pending before it. As it was, it took the trial Court more than a year to cause the enforcement of its Writs and processes. Moreover, its Decision of October 9, 1974 had become final and executory, and execution then became purely a ministerial phase of adjudication. It had no jurisdiction to pass upon petitioners' claim of ownership not only because trial in that, case had already been terminated but also considering that petitioners were not parties in the

ISSUE: If the levy and/or attachment by the sheriff of the barge in question are illegal, will herein petitioner be required to avail of Section 14, Rule 57 and/or Section 17, Rule 39 of the Revised Rules of Court? HELD: On July 19, 1976, we issued a Restraining Order enjoining respondents from proceeding with the projected sale at public auction of the barge, subject of this litigation. We also declared the case submitted for decision. On January 18, 1977, the Bank filed a Motion for Authority to Sell the barge under attachment. This was opposed, however, by petitioners and we resolved to defer resolution until decision on the merits is rendered. MOTION FOR EARLY RESOLUTION: We take note of the BANK's contention that ever since the Sheriff took custody of the vessel on July 16, 1975, the same has been lying Idle, moored at the Muelle de la Industrial, Pasig River, exposed to the elements, and has deteriorated rapidly, hence the need for early resolution. We agree with the findings of the Court of Appeals that petitioners were not without any plain, speedy and adequate remedy in the ordinary course of law. For one, upon the issuance of the Order, dated August 29, 1974, commanding the implementation of the Writ of Attachment, petitioners could have availed themselves of the remedy provided for in Section 14, Rule 57 of the Rules of Court, which reads: If the property taken be claimed by any person other than the party against whom attachment had been issued or his agent, and such person

Sharing is Good Karma Page 30

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU case below nor had they filed any third-party claim for the enforcement of their rights. Proper remedy of Roque: Verily, petitioners' remedy was to ventilate their claims of ownership in a separate and independent reivindicatory action, as even then suggested by the Court of Appeals. That was the arena where the question of preferential rights, if any, impliedly raised in the first assigned error, could have been fully threshed out. ...a third person claiming to be the owner of the property attached or levied upon is required to file a separate or independent action to determine whether the property should answer for the claim of the attaching or judgment creditor instead of being allowed to raise that issue in the case where the writ of attachment or execution was issued In the interest of justice, petitioners can still file an independent civil action to establish their ownership over the barge, if they have not yet done so. -----------------------o0o--------------(c) stocks or shares, or an interest in stocks or shares, of any corporation or company, by leaving with the president or managing agent thereof, a copy of the writ, and a notice stating that the stock or interest of the party against whom the attachment is issued is attached in pursuance of such writ; ------------------------o0o----------------Principle: the secretary of the President may be considered an agent of the corporation and held that service of summons on him is binding on the corporation. SUMMIT TRADING & DEVELOPMENT CORP V. AVENDANO 135 scra 397 (1985) Nature of the case about the summons intended for Summit Trading and Development Corporation. Which was received by the Presidents secretary FACTS: Segundo Pilipinia and Edgardo Mindo in acquired a parcel of land The titles of the lots contain the annotation that should Pilipinia and Mindo sell the same, they have the right to redeem the lots within five years from the date of the sale SALE TO ORTEGA Pilipinia and Mindo sold the lots to Gavino Ortega on February 14 and April 19, 1977. They have retained possession of the lots which are ricelands. They became tenants thereof. RESOLD TO SUMMIT TRADINGOrtega resold the two lots on November 14, 1979 to Summit Trading through its president, Virgilio P. Balaguer August 10, 1981, or within the five-year period, Pilipinia and Mindo filed a COMPLAINT AGAINST ORTEGA AND SUMMIT TRADING FOR THE REDEMPTION OR REPURCHASE OF THE

RIZADA, RESCI ANGELLI corporation organized under the laws of the Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its directors. ISSUE: WON summons may be received by the Presidents secretary HELD: YES. It is true that Saquilayan is not among the persons mentioned in section 13. However, she, being under the control of Summit Trading, has not explained what she has done with the summons and complaint. The logical assumption is that she delivered it to her boss, the president of Summit Trading. As already stated, she

received a copy of the decision and Summit Trading became aware of it. Summit Trading's motion for reconsideration was denied.

While Summit Trading is technically correct in contending that there was no strict compliance with section 13, we cannot close our eyes to the realities of the situation. Under the facts of this case, Saquilayan, being the secretary of the president (whose contact with the outside world is normally through his secretary), may be regarded as an "agent" within the meaning of section 13 Hence summons was validly served upon Summit Trading. Its negligence in not answering the complaint was inexcusable. In fact, up to this time, Summit Trading has not bothered to state its defenses to the action nor stated whether it has ameritorious case warranting the setting aside of the default judgment. In the instant case, service was made on the president's secretary who could have easily notified the president that an action was filed against the corporation just as she had apprised him of the judgment in this case. We are not saying that service on such a secretary is always proper. Generally, it is improper. The president himself must be served personally with the summons if it is desired to effect the service on that particular officer. But, as already stated, under the facts of this case, the president's secretary may be regarded as the "agent" within the meaning of section 13 since service upon her of the judgment itself came to the notice of Summit Trading. ----------------------------o0o-------------------CHEMPHIL EXPORT AND IMPORT V. CA 251 scra 286 Nature of the case: who is the rightful owner of the 1,717 678 share in Chemphil? CEIC or the Consortium? FACTS: SBTC CASE: b. SBTC filed issuance for WPA against Dynetics and Garcia c. July 2, 1985WPA issued d. July 9, 1985 notice of garnishment covering garcias shares (including the disputed shares) was served on Chemphil through its then President. Notice of garnishment was duly annotated in the stock and transfer books of Chemphil on the same date. e. July 15, 1988 Garcia SOLD the disputed shares to Ferro Chemicals with the agreement that part of the purchase price will be paid directly to SSBTC f. June 26, 1989 FCI assigned its shares in Chemphil to petitioner CEIC. Shares were registered and recorded in the corporate books of Chemphil in CEICs name and corresponding stock certificates were issued to it. CONSORTIUM CASE:

TWO LOTS.

Ortega was duly summoned. He failed to answer the complaint. He was declared in default. Summit Trading was also declared in default. RTC Summit trading was defaulted; The default judgment was rendered on the assumption that Summit

Trading was duly summoned through Marina Saquilayan as secretary of Summit Trading. She
received the summons on August 28, 1981. A copy of the judgment was also served on her on November 13, 1981 Contention of Summit the trial court did not acquire jurisdiction over it because summons was not served upon it in accordance with Rule 14 of the Rules of Court which provides: SEC. 13. Service upon private domestic corporation or partnership.-If the defendant is a

Sharing is Good Karma Page 31

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU a. July 19, 1985 WPA issued and various real and personal properties of Dynetics and Garcia were garnished, including the disputed shares. This garnishment was NOT annotated in Chemphils stock and transfer book. January 17, 1989 Garcia and the consortium entered into a compromise agreement Garcia failed to comply with the terms of the compromise agreement July 18, 1989 consortium filed motion for execution August 11 rTC granted the execution and among Garcias properties that were levied were his shares in chemphil previously garnished on july 19, 1985. August 22, 1989 consortium acquired the disputed shares of stock at the public auction

RIZADA, RESCI ANGELLI (2) CEIC lien was duly recorded in the stock and transfer books of Chemphil. (3) the Consortium's attachment over the disputed Chemphil shares did not vest any priority right in its favor and cannot bind third parties since admittedly its attachment on 19 July 1985 was not recorded in the stock and transfer books of Chemphil, and subordinate to the attachment of SBTC which SBTC registered and annotated in the stock and transfer books of Chemphil on 2 July 1985, and (4) that the Consortium's attachment failed to comply with Sec. 7(d), Rule 57 of the Rules as evidenced by the notice of garnishment of the deputy sheriff of the trial court dated 19 July 1985 which the sheriff served on a certain Thelly Ruiz who was neither President nor managing agent of Chemphil; (5) that as between two attaching creditors, the one whose claim was registered first in the books of the corporation enjoys priority, (6) the finality of the compromise agreement which ended the litigation between the Consortium and Antonio M. Garcia in theDynetics case had ipso jure discharged the Consortium's purported attachment over the disputed shares. CONTENTION OF THE CONSORTIUM Their attachment lien over the disputed shares of stocks must prevail over the private sale in favor of the CEIC considering that said shares of stock were garnished in the consortium's favor as early as 19 July 1985.

b. c. d. e.

f.

Contention of CEIC CEIC vigorously argues that the consortiums wirt of attachment over the disputed shares of Chemphil is null and void, insisting as it does, that the notice of garnishment was not validly served on the designated officers. To support its contention, CEIC presented the sheriffs notice of garnishment which showed on its face that said notice was received by one Telly Ruiz who was neither the president nor managing agent of Chemphil. It makes no difference, CEIC avers, that Thelly Ruiz was the secretary of the President of Chemphil, for under the rules, she is not among the officers so authorized or designated to be served with notice of garnishment.

ISSUE: WON secretary of President may receive the notice of garnishment. HELD: YES. We cannot subscribe to such a narrow view of the rule on proper service of writs of attachment. A secretary's major function is to assist his or her superior. He/she is in effect an extension of the latter. Obviously, as such, one of her duties is to receive letters and notices for and in behalf of her superior, as in the case at bench. The notice of garnishment was addressed to and was actually received by Chemphil's president through his secretary who formally received it for him. Thus, in one case, 56 we ruled that the secretary of the president may be considered an "agent" of the corporation and held that service of summons on him is binding on the corporation. Moreover, the service and receipt of the notice of garnishment on 19 July 1985 was duly acknowledged and confirmed by the corporate secretary of Chemphil, Rolando Navarro and his successor Avelino Cruz through their respective certifications dated 15 August 1989 57 and 21 August 1989. We rule, therefore, that there was substantial compliance with Sec. 7(d), Rule 57 of the Rules of Court. OTHER MATTERS: CONTENTION OF THE CEIC: CEIC traces its claim over the disputed shares to the attachment lien obtained by SBTC on 2 July 1985 against Antonio Garcia. It avers that when FCI, CEIC's predecessor-in-interest, paid SBTC the due obligations of Garcia to the said bank pursuant to the Deed of Absolute Sale and Purchase of Shares of Stock, 41 FCI, and later CEIC, was subrogated to the rights of SBTC, particularly to the latter's aforementioned attachment lien over the disputed shares. (1) SBTC's attachment lien is superior as it was obtained on 2 July 1985, ahead of the consortium's purported attachment on 19 July 1985.

HELD: on the matter of CEIC's claim; are they subrogated to the

rights of SBTC on the matter of its attachment lien over the purported shares? NO.

CEIC's subrogation theory is unavailing. Antonio Garcia sold the disputed shares to FCI for a consideration of P79,207,331.28. FCI, however, did not pay the entire amount to Garcia as it was obligated to deliver part of the purchase price directly to SBTC. The foregoing amount shall be paid within fifteen (15) days from the date the decision of the Supreme Court in the case entitled "Antonio M. Garcia, et al. vs. Court of Appeals, et al." becomes final and executory. Hence, when FCI issued the BA check to SBTC to pay Garcia's indebtedness to the said bank, it was in effect paying with Garcia's money, no longer with its own, because said amount was part of the purchase price which FCI owed Garcia in payment for the sale of the disputed shares by the latter to the former. The money "paid" by FCI to SBTC, thus properly belonged to Garcia. It is as if Garcia himself paid his own debt to SBTC but through a third party FCI. It is, therefore, of no consequence that what was used to pay SBTC was a corporate check of FCI. As we have earlier stated, said check no longer represented FCI funds but Garcia's money, being as it was part of FCI's payment for the acquisition of the disputed shares. The FCI check should not be taken at face value, the attendant circumstances must also be considered. The aforequoted contractual stipulation in the Deed of Sale dated 15 July 1988 between Antonio Garcia and FCI is nothing more but an arrangement for the sake of convenience. Payment was to be effected in the aforesaid manner so as to prevent money from changing hands needlessly. Besides, the very purpose of Garcia in selling the disputed shares and his other properties was to "settle certain civil suits filed against him." Since the money used to discharge Garcia's debt rightfully belonged to him, FCI cannot be considered a third party payor under Art. 1302 (2). It was but a conduit, or as aptly categorized

Sharing is Good Karma Page 32

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU by respondents, merely an agent as defined in Art. 1868 of the Civil Code. Payment of the judgment debt to SBTC resulted in the discharge of the attachment lien on the disputed shares purchased by FCI. The latter would then have a free and "clean" title to said shares. In sum, CEIC, for its failure to fulfill the requirements of Art. 1302 (2), was not subrogated to the rights of SBTC against Antonio Garcia and did not acquire SBTC's attachment lien over the disputed shares which, in turn, had already been lifted or discharged upon satisfaction by Garcia, through FCI, of his debt to the said bank. since CEIC was not subrogated to SBTC's right as attaching creditor, which right in turn, had already terminated after Garcia paid his debt to SBTC, it cannot, therefore, be categorized as an attaching creditor in the present controversy. CEIC cannot resurrect and claim a right which no longer exists. Nature of the dispute: priority between an attaching creditor (the consortium) and a purchaser (FCI/CEIC) of the disputed shares of stock and not between two attaching creditors ISSUE: CEIC argues that the consortium's attachment lien over the disputed Chemphil shares is null and void and not binding on third parties due to the latter's failure to register said lien in the stock and transfer books of Chemphil HELD: The attachment lien acquired by the consortium is valid and effective. Both the Revised Rules of Court and the Corporation Code do not require annotation in the corporation's stock and transfer books for the attachment of shares of stock to be valid and binding on the corporation and third party. 2. The requirement that the transfer shall be recorded in the books of the corporation to be valid as against third persons has reference only to absolute transfers or absolute conveyance of the ownership or title to a share. 3. Consequently, the entry or notation on the books of the corporation of pledges and chattel mortgages on shares is not necessary to their validity (although it is advisable to do so) since they do not involve absolute alienation of ownership of stock. To affect third persons, it is enough that the date and description of the shares pledged appear in a public instrument. (Art. 2096, Civil Code.) With respect to a chattel mortgage constituted on shares of stock, what is necessary is its registration in the Chattel Mortgage Registry. (Act No. 1508 and Art. 2140, Civil Code.) ISSUE: Did the compromise agreement between Antonio Garcia and the consortium discharge the latter's attachment lien over the disputed shares? Contention of CEIC: CEIC argues that a writ of attachment is a mere auxiliary remedy which, upon the dismissal of the case, dies a natural death. Thus, when the consortium entered into a compromise agreement, 59 which resulted in the termination of their case, the disputed shares were released from garnishment. HELD: We disagree. To subscribe to CEIC's contentions would be to totally disregard the concept and purpose of a preliminary attachment. The case at bench admits of a peculiar character in the sense that it involves a compromise agreement. The parties to the compromise agreement should not be deprived of the protection provided by an attachment lien especially in an instance where one reneges on his obligations under the agreement, as in the case at bench, where Antonio Garcia failed to hold up his own end of the deal, so to speak. 1.

RIZADA, RESCI ANGELLI Moreover, a violation of the terms and conditions of a compromise agreement entitles the aggrieved party to a writ of execution. A judicial compromise may be enforced by a writ of execution. If a party fails or refuses to abide by the compromise, the other party may enforce the compromise or regard it as rescinded and insist upon his original demand. If we were to rule otherwise, we would in effect create a back door by which a debtor can easily escape his creditors. Consequently, we would be faced with an anomalous situation where a debtor, in order to buy time to dispose of his properties, would enter into a compromise agreement he has no intention of honoring in the first place. The purpose of the provisional remedy of attachment would thus be lost. It would become, in analogy, a declawed and toothless tiger. From the foregoing, it is clear that the consortium and/or its assignee Jaime Gonzales have the better right over the disputed shares. When CEIC purchased the disputed shares from Antonio Garcia on 15 July 1988, it took the shares subject to the prior, valid and existing attachment lien in favor of and obtained by the consortium. ----------------------------o0o----------------------(d) debts and credits, including bank deposits, financial interest, royalties, commissions and other personal property not capable of manual delivery, by leaving with the person owing such debts, or having in his possession or under his control, such credits or other personal property, or with his agent, a copy of the writ, and notice that the debts owing by him to the party against whom attachment is issued, and the credits and other personal property in his possession, or under his control, belonging to said party, are attached in pursuance of such writ; RULE: attachment of debts and credits including bank deposits, financial interest, royalties, commissions and other personal property not capable of manual delivery, by LEAVING a COPY OF THE WRIT: 1. with the person owing such debts or 2. Person having in his possession or under his control, such credits or other personal property, or 3. With his agent What are attached in pursuance of the writ? 1. Notice that the: a. debts owing by him to the party against whom attachment is issued and b. the credits and other personal property in his possession, or under his control, belonging to said party, ------------------------o0o----------------------Principle: OBLIGATION OF THE GARNISHEE: by means of the citation the stranger becomes a forced intervenor required to pay his debt not to his former creditor, but to the new creditor, who is creditor in the main litigation. The garnishee has no choice but to obey the garnishment. TAYABAS LAND CO. V. SHARRUF 41 PHIL 382 Judgment creditor: Farre Judgment debtor: Sharuff Garnishee: Tayabas land FACTS: FIRST CASE: a. December 10, 1914Salvador Farre recovered a joint and several judgment against Salomon M.

Sharing is Good Karma Page 33

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU Sharruf and Farham M. Sharruf for P1,300. This judgment having remained unsatisfied, and execution was upon April 3, 1916, issued thereon at the instance of the plaintiff. SECOND CASE: 2. March 27, 1915Salomon M. Sharruf had a favourable judgment against the Tayabas Land Company and A.M. Ginainati in the amount of P6,841.36, Contention of the Sheriff in the Farres case as there seems to have been no visible property belonging to Salomon M. Sharruf and Farham M. Sharruf subject to seizure by the sheriff to satisfy the execution in favor of Salvador Farre, it became important for Farre to subject the judgment in favor of Salomon M. Sharruf against the Tayabas Land Company and A.M. Ginainati to the payment of his own claim.

RIZADA, RESCI ANGELLI Proceeding upon this conception of the case, Messrs. Crossfield and O'Brien, as attorneys for the plaintiff in that action, procured an execution to be issued on August 30, 1918, upon said judgment for the entire amount of the recovery, including accrued interest and costs, less the sum of P13.21, which had been secured in a garnishment proceeding against one of the local banks. Being thus menaced with the levy of an execution upon its property, the Tayabas Land Company instituted the present action against Salomon M. Sharruf and others, including the sheriff of the Province of Tayabas, to obtain an order restraining the threatened levy of execution and perpetually enjoining all proceedings for the enforcement of the judgment against it. RTC while recognizing the validity of the claims of O'Brien & Company and of Crossfield and O'Brien, held that all other

interest in said judgment pertaining to Salomon M. Sharruf had passed by virtue of the execution sale to Salvador Farre

and thence by transfer through Francisco Alvarez to the Tayabas Land Company. ISSUE: The principal question in the case relates to the validity of the

ENFORCEMENT OF THE WRIT/LEVY ON EXECUTION: a. April 6, 1916 To this end process of garnishment (notification de embargo) was, on April 6, 1916, issued at the instance of Salvador Farre in aid of his execution against the Sharrufs and was on the same or succeeding day duly served upon the Tayabas Land Company. By this process the Tayabas Land Company

proceedings whereby the judgment against the Tayabas Land Company and A.M. Ginainati in favor of Salomon M. Sharruf was, on April 15, 1916, exposed to sale by the sheriff under the execution issued in the action of Salvador Farre against the two Sharrufs; and we
believe it will be conducive to clarity in the discussion for us to proceed at once to consider the manner in which, under the provisions of our Code of Civil Procedure, a judgment for a sum of money entered in favor of the plaintiff in one case can be reached and applied to the payment of a judgment in another case against the party who occupies the position of creditor in the former. HELD: the sale made by sheriff of the judgment in favour of Sharruf was WHOLLY UNAUTHORIZED and hence, null and void. We have no hesitancy in saying that a judgment for a sum of money, that is, the interest of the plaintiff in such a judgment, is liable to execution. A judgment for a sum of money is, as to the party entitled

was informed that levy had, by virtue of the execution aforesaid, been made upon all the property of S. M. Sharruf in the possession of said Tayabas Land Company and upon all debts owing by the latter to said Sharruf, and in particular upon all participation and

b.

c.

interest of S. M. Sharruf in the judgment rendered in his favor in the action prosecuted by him against the Tayabas Land Company and others. in pursuance of the levy thus effected upon the judgment in favor of Salomon M. Sharruf against the Tayabas Land Company, the sheriff of the city of Manila, as in ordinary cases of levy upon chattels of real property, proceeded upon April 15, 1916, to expose to SALE all right, title, and interest of said Sharruf in the judgment aforesaid. At this sale, Salvador Farre, the execution creditor himself, became the purchaser of the judgment in question for the sum of P200; but the Tayabas Land Company stepped in, and purchased from Farre, on October 6, 1917, the judgment of Salomon M. Sharruf against itself, paying to Farre the full amount due him

to payment, a credit; and as to the party who ought to pay the money, a debt. Furthermore, the interest of the creditor in such a

judgment is clearly property, though not capable of manual delivery. For while tangible property is proceeded with by seizure and sale under execution, debts and credits are to be attached by the citation of the debtor. PROCEDURE FOR GARNISHMENTThe proceeding thus indicated as proper, in order to subject a debt or credit is known in American civil procedure as the process of garnishment; and it may be truly said that garnishment is one of the simplest processes, and the least involved in technicalities, of any proceeding known to the law. It consists in the citation of some stranger to the litigation, who is debtor to one of the parties to the action. By this means such debtor stranger becomes a forced intervenor; and the court, having acquired jurisdiction over his person by means of the citation, requires him to pay his debt, not to his former creditor, but to the new creditor, who is creditor in the main litigation. It is merely a case of involuntary novation by the substitution of one creditor for another. Upon principle the remedy is a species of attachment or execution for reaching any property pertaining to a judgment debtor which may be found owing to such debtor by a third person. The situation involved supposes the existence of at least three persons, to wit, a judgment creditor, a judgment debtor, and the garnishee, or person cited, who in turn is supposed to be indebted to the first debtor (i.e., judgment debtor). To proceed a little further with the barest details of the process of garnishment, we note that a citation issues from the court having jurisdiction of the principal litigations, notifying the garnishee that the property and credits of the judgment debtor have been levied upon or attached in the hands of such garnishee, and enjoining him not to

NOTEApril 4, 1916Salomon M. Sharruf, sold and transferred unto O'Brien & Company, a corporation, his right, title, and interest in the judgment aforesaid to the extent necessary to satisfy a debt for P988.14, owing to O'Brien & Company, for merchandise purchased from said entity by Sharruf; and upon the same date Messrs. Crossfield & O'Brien, as attorneys, filed a memorandum of an attorney's lien in their favor to the extent of 25 per cent of the amount of the judgment. These transactions, as will be seen, had the result of reducing in a considerable degree the apparent beneficial interest of Salomon M. Sharruf in the result of the litigation, but they do not affect the fundamentals of the case. Contention of TAYABAS: As a consequence of the facts above narrated the Tayabas Land Company supposes that the judgment obtained by Salomon M. Sharruf against it and A.M. Ginainati has been wholly satisfied Contention of Sharuff: the execution sale of the judgment in question was void and that as a consequence said judgment remains wholly unsatisfied.

Sharing is Good Karma Page 34

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU deliver, transfer, or otherwise dispose of any effects or credits belonging to that person, and requiring him furthermore to make a statement to the court of the property of the judgment debtor in his hands and of the debts owing by the garnishee to such debtor. In cases where indebtedness is admitted, as not infrequently occurs, the payment of the money by the garnishee to the judgment creditor or into court, brings the proceeding to a close, so far as the garnishee is concerned; but if the garnishee fails to answer, or does not admit the indebtedness, he may be required to attend before the court in which the action is pending to be examined on oath respecting the same. Finally, if the liability of the garnishee is made manifest, the officer of the court may, under paragraph No. 3 of section 436 of the Code of Civil Procedure, collect the money and pay it to the person entitled. IN THE PRESENT CASE enough has now been said to show clearly that the action of the sheriff in exposing to public sale the judgment which had been procured by Salomon M. Sharruf in the action against the Tayabas Land Company, et al., was wholly unauthorized, and said sale must be considered void. The proper step would have been: 1. for the court to require the Tayabas Land Company, after the judgment against it had become final, to pay into court, in the case wherein Salvador Farre was plaintiff, a sufficient amount of money to satisfy Farre's claim against Sharruf; and 2. if the judgment against the Tayabas Land Company had been permitted to go to the stage of execution, the proceeds in the hands of the sheriff would have been applied, under the direction of the court, to the payment of Farre's claim before any part would have been payable to Sharruf. In dealing with the problems which have from time to time arisen in connection with garnishment proceedings, courts have sometimes been perplexed over the matter of protecting the garnishee from the danger of having to pay his debt twice; and it goes without saying that the procedure must be so adjusted as not to subject the garnishee to this risk. Otherwise it is a fatal obstacle to the garnishment. No such difficulty would arise in a case like this, where the two judgments are both of record in the same court, and where consequently that court has control over the process in both cases. NOTE: In order to avoid misunderstanding, we wish to say that we

RIZADA, RESCI ANGELLI the contrary, enables all parties to realize their rights without unduly disturbing the position of any. ------------------------O0O-----------------------(e) The interest of the party against whom attachment is issued in property belonging to the estate of the decedent, whether as heir, legatee, or devisee, by serving the executor or administrator or other personal representative of the decedent with a copy of the writ and notice that said interest is attached. A copy of said writ of attachment and of said notice shall also be filed in the office of the clerk of the court in which said estate is being settled and served upon the heir, legatee or devisee concerned. If the property sought to be attached is in custodia legis, a copy of the writ of attachment shall be filed with the proper court or quasi-judicial agency, and notice of the attachment served upon the custodian of such property. ----------------------o0o---------------------Principle: .A copy of said writ of attachment and of said notice shall also be filed in the office of the clerk of the court in which said estate is being settled and served upon the heir, legatee or devisee concerned G.R. No. L-39596 March 23, 1934 "CONSULTA" No. 1013 OF THE REGISTER OF DEEDS OF TAYABAS. GOTAUCO & CO., applicant-appellant, vs. THE REGISTER OF DEEDS OF TAYABAS, oppositor-appellee Doctrine: Register of deeds denied to accept the property of a judgment debtor, which is his share as heir in the decedents estate, on the ground that the same land was not in the debtors name but that of the decedent. Was this proper? NO. register should have accepted and inscribed it upon levy on execution in order not to deprive the judgment creditor of the benefit of lawful execution. FACTS: Exhibits A and B were presented to the register, by which a levy of execution against the judgment debtor, Rafael Vilar

was made on fifteen contracts of land described in Exhibit B and registered in the name of Florentino Vilar..

make no question as to the propriety of the proceedings up to the time when the judgment in question was advertised and exposed to sale by the sheriff. The issuance of the execution and the service of the garnishment were appropriate; and the garnishment was effective for the purpose of preventing the garnishee, the Tayabas Land Company, from paying the judgment to Salomon M. Sharruf. Moreover, the garnishment was effective for the purpose of conferring upon the Tayabas Land Company the right to pay off the judgment which Farre had obtained against Sharruf. and by satisfying Farre's

the register properly denied the inscription of said levy of execution because the title to the lands was in the name of Florentino Vilar and no evidence was submitted that Rafael Vilar had any present or possible future interest in the land. Register of Deeds was then presented to a copy of a petition filed in the Court of First Instance of the province, entitled, "Intestado del Finado Florentino Vilar", from which he could

properly infer that Florentino Vilar was dead and that the judgment debtor Rafael Vilar is one of the heirs of the deceased Florentino Vilar.

claim, regardless of the manner in which it was accomplished, the Tayabas Land Company absolved itself pro tanto from its indebtedness to Sharruf. It results that, although the judgment against the Tayabas Land Company has not yet been satisfied in full, said company is entitled to be credited with the sum of P1,588.24, said by it, through Francisco Alvarez, to Farre on October 6, 1917, with interest. DISPOSITION: Reflection upon this feature of the case, however, confirms the opinion that our lawmakers acted wisely in requiring that debts and credits should be executed by means of the process of garnishment rather than by exposing them to public sale. In the case before us a judgment for a large amount was sold for a merely nominal sum, and such would generally be the case at a sale under similar conditions. This cannot fail to be highly prejudicial to the debtor who is under immediate execution. The proceeding by garnishment, on

Although the value of the participation of Rafael Vilar in the estate of Florentino Vilar was indeterminable before the final liquidation of the estate, nevertheless, the right of participation in the estate and the lands thereof may be attached and sold. The real test: Does the judgment debtor hold such a beneficial interest in the property that he can sell or otherwise dispose of it for value?

ISSUE: WON it was proper for the register of deeds to have declined in accepting the levy on execution on Rafaels share in the estate of the deceased. HELD: NO. Nothing appears in this record to indicate that Rafael Vilar being sui juris could not dispose of his interest or share as heir in the estate of Florentina Vilar. Having this right, he could by a conveyance defeat pro tanto the provisions of section 450 of the Code of Civil Procedure and thus deprive the judgment creditor of the benefit of a lawful execution.

Sharing is Good Karma Page 35

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU

RIZADA, RESCI ANGELLI fees (1,108,985.31). in other words, ECIs bond is liable to NPC for P384,000. Rationale: it was erroneous for the RTC to award consequential, exemplary damages and attorneys fees when the case was still pending appeal. Execution should have been postponed until such time as the merits of the case have been finally determined in the regular appeal. Execution of any award for moral and exemplary damages is dependent on the outcome of the main case. ON THE MATTER OF ABSOLVING MERALCO: MERALCO, as garnishee must be ABSOLVED from its obligations to NPC with respect to payment to ECI of 1,114,543.33. otherwise, it would subject meralco to double liability. MERALCO should not have been faulted for its prompt obedience to a writ of garnishment. Unless there are compelling reasons such as: 1. Defect on the face of the writ or 2. Actual knowledge on the part of the garnishee of lack of entitlement on the part of the garnisher. It is not incumbent upon the garnishee to inquire or to judge for itself WON the order for the advance execution of a judgment is valid. Garnishment is considered as a specie of attachment for reaching credits belonging to the judgment debtor and owing to him from a stranger to a litigation. Under the above-cited rule, the garnishee (3rd person) is obliged to deliver credits, to the proper officer issuing the writ and the law exempts from liability the person having in his possession or under his control any credits or other personal property belonging to the defendant, if such property be delivered or transferred to the clerk, sheriff or other officer of the court in which the action is pending. DISPOSITION: MERALCO, as garnishee, after having been judicially compelled to pay the amount of the judgment represented by funds in its possession belonging to the judgment debtor or NPC, should be released from all responsibilities over such amount after delivery thereof to the sheriff. The reason for the rule is self-evident. To expose garnishees to risks for obeying court orders and processes would only undermine the administration of justice. ------------------o0o---------------------Principle: the garnishee has no choice but to obey the garnishment. RCBC V. CASTRO 169 SCRA 49 (1988) Nature of the case: The crux of the instant controversy dwells on the liability of a bank for releasing its depositor's funds upon orders of the court, pursuant to a writ of garnishment. If in compliance with the court order, the bank delivered the garnished amount to the sheriff, who in turn delivered it to the judgment creditor, but subsequently, the order of the court directing payment was set aside by the same judge, should the bank be held solidarily liable with the judgment creditor to its depositor for reimbursement of the garnished funds? NO. FACTS: Badoc filed an action for recovery of unpaid tobacco deliveries against Philippine Virginia Tobacco Admistration RTC issued Partial judgment ordering the defendants therein to pay jointly and severally, the plaintiff Badoc Planters, Inc. within 48 hours the aggregate amount of P206,916.76, with legal interests thereon. (case later on dismissed for failure to prosecute) On January 26,1970, BADOC filed an Urgent Ex-Parte Motion for a Writ of Execution of the said Partial Judgment which was granted on the same day Branch Clerk of Court on

with the knowledge which he them had, the register should have accepted and inscribed Exhibit A, B and D. ------o0o-------Section 8. Effect of attachment of debts, credits and all other similar personal property. All persons having in their possession or under their control any credits or other similar personal property belonging to the party against whom attachment is issued, or owing any debts to him, at the time of service upon them of the copy of the writ of attachment and notice as provided in the last preceding section, shall be liable to the applicant for the amount of such credits, debts or other similar personal property, until the attachment is discharged, or any judgment recovered by him is satisfied, unless such property is delivered or transferred, or such debts are paid, to the clerk, sheriff, or other proper officer of the court issuing the attachment. ------o0o-------Principle: Garnishment is a specie of attachment by means of which plaintiff seeks to subject to his claim property of the defendant in the hands of a stranger to the litigation or money owned by such stranger to the defendant. Such stranger is called the garnishee. Garnishees liability for debts and credits: a garnishee after having been judicially compelled to pay the amount of the judgment represented by the funds in its possession belonging to the judmgetn debtor should be released from all responsibilities over such amount after delivery thereof to the sheriff. The property attached is brought in custodia legis. ENGINEERING CONSRUCTION V. NPC 163 scra 9 FACTS: ECI filed a complaint for damages against NPC for the damages it suffered on its facilities and equipment d/t inundation of its campsite as a direct result of NPCs careless opening of the spillway gates of angat dam at the height of Typhoon welming. RTC found NPC guilty of gross negligence and awarded P1,108,935.31actual/compensatory damages, consequential damages, exemplary damages and attorneys fees ECI moved for execution pending appeal after filing a bond of 1.109M to answer for any damages NPC might incur for this premature execution of the RTC decision RTC granted the writ of execution Sheriff garnished all the amounts due and payable to NPC which were then in the possession of MERALCO, which was sufficient to cover the amount of the judgment sum NPC appealed to CA which nullified the execution pending appeal as well all issued writs and process in connection therewith CA ordered ECI and MERALCO to return the

amount garnished to NPC

MERALCO it sought clarification on the CA decision because if that is so, NPC is using such decision to compel Meralco to deliver the amount of 1,114,545 which it had already entrusted to the sheriff and the same was already delivered to ECI.

ISSUE: WON partial restitution is proper in favor of NPC WON Meralco and ECI is liable to restitute the garnished funds to NPC HELD: NO. NPC is authorized to proceed against the covering bond filed by ECI but only to the extent of the difference between the amount finally adjudicated by the court in the main cases (724,985.31) and the amount originally decreed by RTC r/t consequential and exemplary damages and attys

Sharing is Good Karma Page 36

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU the very same day, issued a Writ of Execution addressed to Special Sheriff Faustino Rigor, who then issued a Notice of Garnishment addressed to the General Manager and/or Cashier of Rizal Commercial Banking Corporation, requesting a reply within five (5) days to said garnishment as to any property which the Philippine Virginia Tobacco Administration might have in the possession or control of petitioner or of any debts owing by the petitioner to said defendant. Upon receipt of such Notice, RCBC notified PVTA thereof to enable the PVTA to take the necessary steps for the protection of its own interest Upon an Urgent Ex-Parte Motion dated January 27, 1970 filed by BADOC, the respondent Judge issued an Order granting the Ex-Parte Motion and directing the herein petitioner "to deliver in check the amount garnished to Sheriff Faustino Rigor and Sheriff Rigor in turn is ordered to cash the check and deliver the amount to the plaintiff's representative and/or counsel on record." In compliance with said Order, RCBC delivered to Sheriff Rigor a certified check in the sum of P 206,916.76. Respondent PVTA filed a Motion for Reconsideration dated February 26,1970 which was granted in an Order dated April 6,1970, setting aside the Orders of Execution and of Payment and the Writ of Execution and ordering RCBC

RIZADA, RESCI ANGELLI ordered to cash the check and deliver the amount to the plaintiffs representative and/or counsel on record." it should be pointed out that RCBC did not deliver the amount on the strength solely of a Notice of Garnishment; rather, the release of the funds was made pursuant to the aforesaid Order of January 27, 1970. While the Notice of Garnishment dated January 26, 1970 contained no demand of payment as it was a mere request for petitioner to withhold any funds of the PVTA then in its possession, the Order of January 27, 1970 categorically required the delivery in check of the amount garnished to the special sheriff, Faustino Rigor. In the second place, the bank had already filed a reply to the Notice of Garnishment stating that it had in its custody funds belonging to the PVTA, which, in fact was the basis of the plaintiff in filing a motion to secure delivery of the garnished amount to the sheriff. Lastly, the bank, upon the receipt of the Notice of Garnishment, duly informed PVTA thereof to enable the latter to take the necessary steps for the protection of its own interest It is important to stress, at this juncture, that there was nothing irregular in the delivery of the funds of PVTA by check to the sheriff, whose custody is equivalent to the custody of the court, he being a court officer. The order of the court dated January 27, 1970 was composed of two parts, requiring: 1) RCBC to deliver in check the amount garnished to the designated sheriff and 2) the sheriff in turn to cash the check and deliver the amount to the plaintiffs representative and/or counsel on record. It must be noted that in delivering the garnished amount in check to the sheriff, the RCBC did not thereby make any payment, for the law mandates that delivery of a check does not produce the effect of payment until it has been cashed. Moreover, by virtue of the order of garnishment, the same was placed in custodia legis and therefore, from that time on, RCBC was holding the funds subject to the orders of the court a quo. That the sheriff,

and BADOC "to restore, jointly and severally, the account of PVTA with the said bank in the same condition and state it was before the issuance of the aforesaid Orders by reimbursing the PVTA of the amount
of P 206, 916.76 with interests at the legal rate from January 27, 1970 until fully paid to the account of the PVTA This is without prejudice to the right of plaintiff to move for the execution of the partial judgment pending appeal in case the motion for reconsideration is denied and appeal is taken from the said partial judgment."

Contention of PVTA PVTA however claims that the manner in which the bank complied with the Sheriffs Notice of Garnishment indicated breach of trust and dereliction of duty on the part of the bank as custodian of government funds. It insistently urges that the premature delivery of the garnished amount by RCBC to the special sheriff even in the absence of a demand to deliver made by the latter, before the expiration of the five-day period given to reply to the Notice of Garnishment, without any reply having been given thereto nor any prior authorization from its depositor, PVTA and even if the court's order of January 27, 1970 did not require the bank to immediately deliver the garnished amount constitutes such lack of prudence as to make it answerable jointly and severally with the plaintiff for the wrongful release of the money from the deposit of the PVTA. The respondent Judge in his controverted Order sustained such contention and blamed RCBC for the supposed "hasty release of the amount from the deposit of the PVTA without giving PVTA a chance to take proper steps by informing it of the action being taken against its deposit, thereby observing with prudence the five-day period given to it by the sheriff."

upon delivery of the check to him by RCBC encashed it and turned over the proceeds thereof to the plaintiff was no longer the concern of RCBC as the responsibility over the garnished funds passed to the court. Thus, no breach of trust or dereliction of duty can be attributed

to RCBC in delivering its depositor's funds pursuant to a court order which was merely in the exercise of its power of control over such funds. DISPOSITION: RCBC cannot therefore be compelled to make restitution solidarily with the plaintiff BADOC. Plaintiff BADOC alone was responsible for the issuance of the Writ of Execution and Order of Payment and so, the plaintiff alone should bear the consequences of a subsequent annulment of such court orders; hence, only the plaintiff can be ordered to restore the account of the PVTA. OTHER MATTERS: 1. ISSUE: The respondent judge however, censured the petitioner for having released the funds "simply on the strength of the Order of the court which. far from ordering an immediate release of the amount involved, merely serves as a standing authority to make the release at the proper time as prescribed by the rules." HELD: This argument deserves no serious consideration. As stated earlier, the order directing the bank to deliver the amount to the sheriff was distinct and separate from the order directing the sheriff to encash the said check. The

ISSUE: Whether or not the respondent Judge correctly ordered RCBC to reimburse the amount paid to the Special Sheriff by virtue of the execution issued pursuant to the Order/Partial Judgment dated January 15, 1970. HELD: NO. RCBC is not liable to reimburse PVTA. RCBC merely obeyed a mandatory directive from the respondent Judge dated January 27, 1970, ordering petitioner 94 "to deliver in check the amount garnished to Sheriff Faustino Rigor and Sheriff Rigor is in turn

bank had no choice but to comply with the order demanding delivery of the garnished amount in check. The very tenor of the order called for immediate compliance therewith. On the other hand, the bank cannot be held liable for the subsequent encashment of the check as this was upon order of the court in the exercise of its power of control over the funds placed in custodia legis by virtue of the garnishment.

Sharing is Good Karma Page 37

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU Applying the foregoing to the case at bar, MERALCO, as garnishee, after having been judicially compelled to pay the amount of the judgment represented by funds in its possession belonging to the judgment debtor or NPC, should be released from all responsibilities over such amount after delivery thereof to the sheriff. The reason for the rule is self

RIZADA, RESCI ANGELLI

The Present Case spouses Ventanilla filed with the trial

evident. To expose garnishees to risks for obeying court orders and processes would only undermine the administration of justice.

court a motion for the issuance of a writ of execution. The writ was issued on May 3, 1991, and served upon MRCI on May 9, 1991. Contention of MRCI In a manifestation and motion filed by MRCI with the trial court on May 24, 1991, the petitioner

alleged that the subject properties could not be delivered to the Ventanillas because they had already been sold to Samuel Marquez on February 7, 1990, while their petition

The aforequoted ruling thus bolsters RCBC's stand that its immediate compliance with the lower court's order should not have been met with the harsh penalty of joint and several liability. Nor can its liability to reimburse PVTA of the amount delivered in check be premised upon the subsequent declaration of nullity of the order of delivery. From the foregoing, it may be concluded that the charge of breach of trust and/or dereliction of duty as well as lack of prudence in effecting the immediate payment of the garnished amount is totally unfounded. Upon receipt of the Notice of Garnishment, RCBC duly informed PVTA thereof to enable the latter to take the necessary steps for its protection. However, right on the very next day after its receipt of such notice, RCBC was already served with the Order requiring delivery of the garnished amount. Confronted as it was with a mandatory directive, disobedience to which exposed it to a contempt order, it had no choice but to comply. 2. RCBC cannot be charged with lack of prudence for immediately complying with the order to deliver the garnished amount. Since the funds in its custody are precisely meant for the payment of lawfully-incurred obligations, RCBC cannot rightfully resist a court order to enforce payment of such obligations. That such court order subsequently turned out to have been erroneously issued should not operate to the detriment of one who complied with its clear order. ISSUE: it is contended that RCBC was bound to inquire into

was pending in this Court. Nevertheless, MRCI offered to reimburse the amount paid by the respondents, including legal interest plus the aforestated damages. MRCI also prayed that its tender of payment be accepted and all garnishments on their accounts lifted. Contention of Ventanillas The Ventanillas accepted the

amount of P210,000.00 as damages and attorney's fees but opposed the reimbursement offered by MRCI in lieu of the execution of the absolute deed of sale. They contended that

the alleged sale to Samuel Marquez was void, fraudulent, and in contempt of court and that no claim of ownership over the properties in question had ever been made by Marquez. On July 19, 1991, Judge Elsie Ligot-Telan issued the following order: To ensure that there is enough amount to cover the value of the lots involved if transfer thereof to plaintiff may no longer be effected, pending litigation of said issue, the garnishment made by

3.

the legality and propriety of the Writ of Execution and Notice of Garnishment issued against the funds of the PVTA

deposited with said bank. HELD: But the bank was in no position to question the legality of the garnishment since it was not even a party to the case. As correctly pointed out by the petitioner, it had neither the personality nor the interest to assail or controvert the orders of respondent Judge. It had no choice but to obey the same inasmuch as it had no standing at all to impugn the validity of the partial judgment rendered in favor of the plaintiff or of the processes issued in execution of such judgment. ------------------o0o---------------------Principle: garnishment as a remedy is intended to secure the payment of a judgment when a well-founded belief exist that the erring party will abscond or deliberately render the execution of the judgment nugatory. The rule on attachment also applies to garnishment proceedings. MANILA REMNANT CO. V. CA G.R. No. 107282 March 16, 1994 FACTS: The present petition is an offshoot of our decision in Manila Remnant Co., Inc., (MRCI) v. Court of Appeals, promulgated on November 22, 1990 where MRCI, AUVCI and Crisostomo where held solidarily liable to execute the final absolute sale to ventanilla and for the payment of damages and attorneys fees to spouses Ventanilla.

MRCI then filed a manifestation and motion for reconsideration praying that it be ordered to reimburse the Ventanillas in the amount of P263,074.10 and that the garnishment of its bank deposit be lifted denied by the RTC CA The Court of Appeals ruled that the contract to sell in favor of Marquez did not constitute a legal impediment to the immediate execution of the judgment. Furthermore, the cash bond fixed by the trial court for the lifting of the garnishment was fair and reasonable because the value of the lot in question had increased considerably. The appellate court also set aside the show-cause order and held that the trial court should have proceeded under Section 10, Rule 39 of the Rules of Court and not Section 9 thereof. Contention of MRCI: 1. Contends that the trial court may not enforce it

the Sheriff upon the bank account of Manila Remnant may be lifted only upon the deposit to the Court of the amount of P500,000.00 in cash.

garnishment order after the monetary judgment for damages had already been satisfied and the amount for reimbursement had already been deposited with the sheriff. Garnishment as a remedy is intended to secure

2.

3.

4.

the payment of a judgment debt when a well-founded belief exists that the erring party will abscond or deliberately render the execution of the judgment nugatory. As there is no such situation in this case, there is no need for a garnishment order. It is also averred that the trial court gravely abused its discretion when it arbitrarily fixed the amount of the cash bond for the lifting of the garnishment order at P500,000.00. sale to Samuel Marquez was valid and constitutes a legal impediment to the execution of the absolute deed of sale to the Ventanillas. At the time of the sale to Marquez, the issue of the validity of the sale to the Ventanillas had not yet been resolved. Furthermore, there was no specific injunction against the petitioner re-selling the property. Lastly, the petitioner insists that Marquez was a buyer in good faith and had a right to rely on the recitals in the certificate of title. The subject matter of the controversy having passed to an innocent purchaser for value, the respondent court erred in ordering the

Sharing is Good Karma Page 38

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU execution of the absolute deed of sale in favor of the Ventanillas. Contention of Ventanilla they argue that the validity of the sale to them had already been established even while the previous petition was still pending resolution. That petition only questioned the solidary liability of MRCI to the Ventanillas. The portion of the decision ordering the MRCI to execute an absolute deed of sale in favor of the Ventanillas became final and executory when the petitioner failed to appeal it to the Supreme Court. There was no need then for an order enjoining the petitioner from re-selling the property in litigation. They also point to the unusual lack of interest of Marquez in protecting and asserting his right to the disputed property, a clear indication that the alleged sale to him was merely a ploy of the petitioner to evade the execution of the absolute deed of sale in their favor. ISSUE: WON the order of garnishment may still be enforced. HELD: YES. HELD: While MRCI have readily complied with the order of the trial court for the payment of damages to the Ventanillas, they have, however, refused to execute the absolute deed of sale. It was for the purpose of ensuring their compliance with this portion of the judgment that the trial court issued the garnishment order which by its term could be lifted only upon the filling of a cash bond of P500,000.00. The petitioner questions the propriety of this order on the ground that it has already partially complied with the judgment and that it has always expressed its willingness to reimburse the amount paid by the respondents. It says that there is no need for a garnishment order 3.

RIZADA, RESCI ANGELLI OTHER MATTERS: 1. The validity of the contract to sell in favor of the Ventanilla spouses is not disputed by the parties. Even in the previous petition, the recognition of that contract was not assigned as error of either the trial court or appellate court. The fact that the MRCI did not question the legality of the award for damages to the Ventanillas also shows that it even then already acknowledged the validity of the contract to sell in favor of the private respondents. On top of all this, there are other circumstances that cast suspicion on the validity, not to say the very existence, of the contract with Marquez. 1. First, the contract to sell in favor of Marquez was entered into after the lapse of almost ten years from the rendition of the judgment of the trial court upholding the sale to the Ventanillas. Second, the petitioner did not invoke the contract with Marquez during the hearing on the motion for the issuance of the writ of execution filed by the private respondents. It disclosed the contract only after the writ of execution had been served upon it. Third, in its manifestation and motion dated December 21, 1990, the petitioner said it was ready to deliver the titles to the Ventanillas provided that their counterclaims against private respondents were paid or offset first. There was no mention of the contract to sell with Marquez on February 7, 1990. Fourth, Marquez has not intervened in any of these proceedings to assert and protect his rights to the subject property as an alleged purchaser in good faith.

2.

4.

because it is willing to reimburse the Ventanillas in lieu of execution of the absolute deed of sale.

The alternative judgment of reimbursement is applicable only if the conveyance of the lots is not possible, but it has not been shown that there is an obstacle to such conveyance. As the main obligation of the petitioner is to execute the absolute deed of sale in favor of the Ventanillas, its unjustified refusal to do so warranted the issuance of the garnishment order. Garnishment is a species of attachment for reaching credits belonging to the judgment debtor and owing to him from a stranger to the litigation. 3 It is an attachment by means of which the plaintiff seeks to subject to his claim property of the defendant in the hands of a third person or money owed by such third person or garnishee to the defendant. 4 The rules on attachment also apply to garnishment proceedings. A garnishment order shall be lifted if it established that: a. the party whose accounts have been garnished has posted a counterbond or has made the requisite cash deposit; b. the order was improperly or irregularly issued as where there is no ground for garnishment 7 or the affidavit and/or bond filed therefor are defective or insufficient; c. the property attached is exempt from execution, hence exempt from preliminary attachment or d. the judgment is rendered against the attaching or garnishing creditor. Partial execution of the judgment is not included in the above enumeration of the legal grounds for the discharge of a garnishment order. Neither does the petitioner's willingness to reimburse render the garnishment order unnecessary. As for the counterbond, the lower court did not err when it fixed the same at P500,000.00. As correctly pointed out by the respondent court, that amount corresponds to the current fair market value of the property in litigation and was a reasonable basis for determining the amount of the counterbond.

At any rate, even if it be assumed that the contract to sell in favor of Marquez is valid, it cannot prevail over the final and executory judgment ordering MRCI to execute an absolute deed of sale in favor of the Ventanillas. No less importantly, the records do not show that Marquez has already paid the supposed balance amounting to P616,000.00 of the original price of over P800,000.00. 2 The Court notes that the petitioner stands to benefit more from the supposed contract with Marquez than from the contract with the Ventanillas with the agreed price of only P66,571.00. Even if it paid the P210,000.00 damages to the private respondents as decreed by the trial court, the petitioner would still earn more profit if the Marquez contract were to be sustained. ISSUE: Regarding the refusal of the petitioner to execute the absolute deed of sale Section 10 of Rule 39 of the Rules of Court reads as follows: Sec. 10. Judgment for specific act; vesting title If a judgment directs a party to execute a conveyance of land, or to deliver deeds or other documents, or to perform any other specific act, and the party fails to comply within the time specified, the court may direct the act to be done at the cost of the disobedient party by some other person appointed by the court and the act when so done shall have like effect as if done by the party. If real or personal property is within the Philippines, the court in lieu of directing a conveyance thereof may enter judgment divesting the title of any party and vesting it in others and such judgment shall have the force and effect of a conveyance executed in due form of law. Against the unjustified refusal of the petitioner to accept payment of the balance of the contract price, the remedy of the respondents is consignation, Accordingly, upon consignation by the Ventanillas of the sum due, the trial court may enter judgment canceling the title of the petitioner over the property and transferring the same to the respondents. This judgment shall have the same force and effect as conveyance duly executed in accordance with the requirements of the law.

Sharing is Good Karma Page 39

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU

RIZADA, RESCI ANGELLI

In sum, we find that: 1. No legal impediment exists to the execution, either by the petitioner or the trial court, of an absolute deed of sale of the subject property in favor of the respondent Ventanillas; and 2. The lower court did not abuse its discretion when it required the posting of a P500,000.00 cash bond for the lifting of the garnishment order. BACKGROUND OF THE FIRST CASE: FACTS: That case involved parcels of land in Quezon City which were owned by petitioner MRCI and became the subject of its agreement with A.U. Valencia and Co., Inc., (AUVCI) by virtue of which the latter was to act as the petitioner's agent in the development and sale of the property. For a stipulated fee, AUVCI was to convert the lands into a subdivision, manage the sale of the lots, execute contracts and issue official receipts to the lot buyers. At the time of the agreement, the president of both MRCI and AUVCI was Artemio U. Valencia. Pursuant to the above agreement, AUVCI executed two contracts to sell in favor of spouses Oscar C. Ventanilla and Carmen Gloria Diaz After ten days and without the knowledge of the Ventanilla couple, Valencia, as president of MRCI, resold the same parcels to Carlos Crisostomo, one of his sales agents, without any consideration. Upon orders of Valencia, the monthly payments of the Ventanillas were remitted to the MRCI as payments of Crisostomo, for which receipts were issued in his name. The receipts were kept by Valencia without the knowledge of the Ventanillas and Crisostomo. The Ventanillas continued paying their monthly installments. On May 30, 1973, MRCI informed AUVCI that it was terminating their agreement because of discrepancies discovered in the latter's collections and remittances. On June 6, 1973, Valencia was removed by the board of directors of MRCI as its president. On November 21, 1978, the Ventanilla spouses, having learned of the supposed sale of their lots to Crisostomo, commenced an action for specific performance, annulment of deeds, and damages against Manila Remnant Co., Inc., A.U. Valencia and Co., Inc., and Carlos Crisostomo. RTC & CA rendered a decision declaring the contracts to sell in favor of the Ventanillas valid and subsisting, and annulling the contract to sell in favor of Crisostomo. It ordered the MRCI to execute an absolute deed of sale in favor of the Ventanillas, free from all liens and encumbrances. Damages and attorney's fees in the

Principle: Compromise Agreement does not dissolve the Writ of Preliminary Attachment Even in cases where there is a compromise agreement, the rule established in the aforequoted cases still applies, even more so since the terms of the agreement have to be complied with in full by the parties thereto. The parties to the compromise agreement should not be deprived of the protection provided by an attachment lien especially in an instance where on reneges on his obligations under the agreement. Moreover, wrote the court, a violation of the terms and conditions of a compromise agreement entitles the aggrieved party to a writ of execution. CHEMPHIL EXPORT AND IMPORT V. CA 251 scra 286 Nature of the case: who is the rightful owner of the 1,717 678 share in Chemphil? CEIC or the Consortium? FACTS: SBTC CASE: g. SBTC filed issuance for WPA against Dynetics and Garcia h. July 2, 1985WPA issued i. July 9, 1985 notice of garnishment covering garcias shares (including the disputed shares) was served on Chemphil through its then President. Notice of garnishment was duly annotated in the stock and transfer books of Chemphil on the same date. j. July 15, 1988 Garcia SOLD the disputed shares to Ferro Chemicals with the agreement that part of the purchase price will be paid directly to SSBTC k. June 26, 1989 FCI assigned its shares in Chemphil to petitioner CEIC. Shares were registered and recorded in the corporate books of Chemphil in CEICs name and corresponding stock certificates were issued to it. CONSORTIUM CASE: g. July 19, 1985 WPA issued and various real and personal properties of Dynetics and Garcia were garnished, including the disputed shares. This garnishment was NOT annotated in Chemphils stock and transfer book. h. January 17, 1989 Garcia and the consortium entered into a compromise agreement i. Garcia failed to comply with the terms of the compromise agreement j. July 18, 1989 consortium filed motion for execution k. August 11 rTC granted the execution and among Garcias properties that were levied were his shares in chemphil previously garnished on july 19, 1985. l. August 22, 1989 consortium acquired the disputed shares of stock at the public auction Contention of CEIC CEIC vigorously argues that the consortiums wirt of attachment over the disputed shares of Chemphil is null and void, insisting as it does, that the notice of garnishment was not validly served on the designated officers. To support its contention, CEIC presented the sheriffs notice of garnishment which showed on its face that said notice was received by one Telly Ruiz who was neither the president nor managing agent of Chemphil. It makes no difference, CEIC avers, that Thelly Ruiz was the secretary of

total amount of P210,000.00 were also awarded to the Ventanillas for which the MRCI, AUVCI, and Crisostomo were held solidarily liable. The lower court
ruled further that if for any reason the transfer of the lots could not be effected, the defendants would be solidarily

liable to the Ventanillas for reimbursement of the sum of P73,122.35, representing the amount paid for the two lots,

and legal interest thereon from March 1970, plus the decreed damages and attorney's fees. Valencia was also held liable to MRCI for moral and exemplary damages and attorney's fees. Contention of MRCI filed before this Court a petition for certiorari to review the portion of the decision of the Court of Appeals upholding the solidary liability of MRCI,

AUVCI and Carlos Crisostomo for the payment of moral and exemplary damages and attorney's fees to the Ventanillas. On November 22, 1990, this Court affirmed the decision by the Court of Appeals and declared the judgment of the trial court immediately executory.
------------------o0o----------------------

Sharing is Good Karma Page 40

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU the President of Chemphil, for under the rules, she is not among the officers so authorized or designated to be served with notice of garnishment. ISSUE: WON secretary of President may receive the notice of garnishment. HELD: YES. We cannot subscribe to such a narrow view of the rule on proper service of writs of attachment. A secretary's major function is to assist his or her superior. He/she is in effect an extension of the latter. Obviously, as such, one of her duties is to receive letters and notices for and in behalf of her superior, as in the case at bench. The notice of garnishment was addressed to and was actually received by Chemphil's president through his secretary who formally received it for him. Thus, in one case, 56 we ruled that the secretary of the president may be considered an "agent" of the corporation and held that service of summons on him is binding on the corporation. Moreover, the service and receipt of the notice of garnishment on 19 July 1985 was duly acknowledged and confirmed by the corporate secretary of Chemphil, Rolando Navarro and his successor Avelino Cruz through their respective certifications dated 15 August 1989 57 and 21 August 1989. We rule, therefore, that there was substantial compliance with Sec. 7(d), Rule 57 of the Rules of Court. OTHER MATTERS: CONTENTION OF THE CEIC: CEIC traces its claim over the disputed shares to the attachment lien obtained by SBTC on 2 July 1985 against Antonio Garcia. It avers that when FCI, CEIC's predecessor-in-interest, paid SBTC the due obligations of Garcia to the said bank pursuant to the Deed of Absolute Sale and Purchase of Shares of Stock, 41 FCI, and later CEIC, was subrogated to the rights of SBTC, particularly to the latter's aforementioned attachment lien over the disputed shares. (7) SBTC's attachment lien is superior as it was obtained on 2 July 1985, ahead of the consortium's purported attachment on 19 July 1985. (8) CEIC lien was duly recorded in the stock and transfer books of Chemphil. (9) the Consortium's attachment over the disputed Chemphil shares did not vest any priority right in its favor and cannot bind third parties since admittedly its attachment on 19 July 1985 was not recorded in the stock and transfer books of Chemphil, and subordinate to the attachment of SBTC which SBTC registered and annotated in the stock and transfer books of Chemphil on 2 July 1985, and (10) that the Consortium's attachment failed to comply with Sec. 7(d), Rule 57 of the Rules as evidenced by the notice of garnishment of the deputy sheriff of the trial court dated 19 July 1985 which the sheriff served on a certain Thelly Ruiz who was neither President nor managing agent of Chemphil; (11) that as between two attaching creditors, the one whose claim was registered first in the books of the corporation enjoys priority, (12) the finality of the compromise agreement which ended the litigation between the Consortium and Antonio M. Garcia in theDynetics case had ipso jure discharged the

RIZADA, RESCI ANGELLI Consortium's purported attachment over the disputed shares. CONTENTION OF THE CONSORTIUM Their attachment lien over the disputed shares of stocks must prevail over the private sale in favor of the CEIC considering that said shares of stock were garnished in the consortium's favor as early as 19 July 1985.

HELD: on the matter of CEIC's claim; are they subrogated to the

rights of SBTC on the matter of its attachment lien over the purported shares? NO.

CEIC's subrogation theory is unavailing. Antonio Garcia sold the disputed shares to FCI for a consideration of P79,207,331.28. FCI, however, did not pay the entire amount to Garcia as it was obligated to deliver part of the purchase price directly to SBTC. The foregoing amount shall be paid within fifteen (15) days from the date the decision of the Supreme Court in the case entitled "Antonio M. Garcia, et al. vs. Court of Appeals, et al." becomes final and executory. Hence, when FCI issued the BA check to SBTC to pay Garcia's indebtedness to the said bank, it was in effect paying with Garcia's money, no longer with its own, because said amount was part of the purchase price which FCI owed Garcia in payment for the sale of the disputed shares by the latter to the former. The money "paid" by FCI to SBTC, thus properly belonged to Garcia. It is as if Garcia himself paid his own debt to SBTC but through a third party FCI. It is, therefore, of no consequence that what was used to pay SBTC was a corporate check of FCI. As we have earlier stated, said check no longer represented FCI funds but Garcia's money, being as it was part of FCI's payment for the acquisition of the disputed shares. The FCI check should not be taken at face value, the attendant circumstances must also be considered. The aforequoted contractual stipulation in the Deed of Sale dated 15 July 1988 between Antonio Garcia and FCI is nothing more but an arrangement for the sake of convenience. Payment was to be effected in the aforesaid manner so as to prevent money from changing hands needlessly. Besides, the very purpose of Garcia in selling the disputed shares and his other properties was to "settle certain civil suits filed against him." Since the money used to discharge Garcia's debt rightfully belonged to him, FCI cannot be considered a third party payor under Art. 1302 (2). It was but a conduit, or as aptly categorized by respondents, merely an agent as defined in Art. 1868 of the Civil Code. Payment of the judgment debt to SBTC resulted in the discharge of the attachment lien on the disputed shares purchased by FCI. The latter would then have a free and "clean" title to said shares. In sum, CEIC, for its failure to fulfill the requirements of Art. 1302 (2), was not subrogated to the rights of SBTC against Antonio Garcia and did not acquire SBTC's attachment lien over the disputed shares which, in turn, had already been lifted or discharged upon satisfaction by Garcia, through FCI, of his debt to the said bank. since CEIC was not subrogated to SBTC's right as attaching creditor, which right in turn, had already terminated after Garcia paid his debt to SBTC, it cannot, therefore, be categorized as an attaching creditor in the present controversy. CEIC cannot resurrect and claim a right which no longer exists. Nature of the dispute: priority between an attaching creditor (the consortium) and a purchaser (FCI/CEIC) of the disputed shares of stock and not between two attaching creditors ISSUE: CEIC argues that the consortium's attachment lien over the disputed Chemphil shares is null and void and not binding on third parties due to the latter's failure to register said lien in the stock and transfer books of Chemphil

Sharing is Good Karma Page 41

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU

RIZADA, RESCI ANGELLI other party may enforce the compromise or regard it as a rescinded and insist upon his original demand.

HELD: 4. The attachment lien acquired by the consortium is valid and effective. Both the Revised Rules of Court and the Corporation Code do not require annotation in the corporation's stock and transfer books for the attachment of shares of stock to be valid and binding on the corporation and third party. The requirement that the transfer shall be recorded in the books of the corporation to be valid as against third persons has reference only to absolute transfers or absolute conveyance of the ownership or title to a share. Consequently, the entry or notation on the books of the corporation of pledges and chattel mortgages on shares is not necessary to their validity (although it is advisable to do so) since they do not involve absolute alienation of ownership of stock. To affect third persons, it is enough that the date and description of the shares pledged appear in a public instrument. (Art. 2096, Civil Code.) With respect to a chattel mortgage constituted on shares of stock, what is necessary is its registration in the Chattel Mortgage Registry. (Act No. 1508 and Art. 2140, Civil Code.)

The non-fulfilment of the terms and conditions of a compromise agreement approved by the court justifies the execution thereof and the issuance of the writ for said purpose is the courts ministerial duty enforceable by mandamus ABINUJAR V. CA APRIL 18, 1995 FACTS: October 10, 1987, Spouses Abinujar executed a Deed of Sale with Right to Repurchase in favor of spouses ramiro, involving a residential house but due to serious financial and business reverses, petitioners were not able to redeem the property within four months as agreed upon. October 24, 1989, Spouses ramiro filed a complaint for ejectment against Abiujar December 27, 1989, the parties, assisted by their counsels, executed a compromise agreement. In an order dated March 15, 1990, the MTC approved the compromise agreement. The compromise agreement provided that for failure of the spouses Abinujar to pay 3 consecutive payments, spouses Ramiro will be entitled to a writ of execution unless the parties agree to extend the period of entitlement to a writ of execution in writing to be submitted and/or approved by this Honorable Court; March 26 they received the decision of the MtC approving the compromise agreement. April 15, 1990, spouses Ramiro filed a motion for execution on the ground that petitioners failed to pay the first three installments stipulated in the compromise agreement, On April 6, 1990, petitioners filed an Urgent Ex-Parte Motion for Reconsideration and/or Correct Order of this Court calling attention to a typographical error in the Order dated March 15, 1990, and asking that the amount of P10,000.00 payable on September 30, 1990 be corrected and changed to the agreed amount of P5,000.00. April 25, 1990, the Metropolitan Trial Court issued an order granting the motion for correction of the typographical error in the decision. August 17, 1990, petitioners filed an ex-parte motion asking that the check payments previously deposited by them with the court, be accepted and be given to respondents in compliance with their compromise agreement. august 23, 1990, respondents opposed petitioners ex-parte motion and stated that they would not renew the compromise agreement with petitioners. MTC denied private respondents motion for execution On October 12, 1990 SO, spouses Ramiro filed a petition for mandamus with the SC and SC referred it back to the RTC RTC commanded MTC to issue a writ of execution of the decision approving the compromise agreement between the parties. On April 11, 1991, a Sheriffs Notice to Voluntarily Vacate the Premises was served on Spouses Abinujar (error!

5.

6.

ISSUE: Did the COMPROMISE AGREEMENT between Antonio Garcia and the consortium discharge the latter's attachment lien over the disputed shares? Contention of CEIC: CEIC argues that a writ of attachment is a mere auxiliary remedy which, upon the dismissal of the case, dies a natural death. Thus, when the consortium entered into a compromise agreement, 59 which resulted in the termination of their case, the disputed shares were released from garnishment. HELD: We disagree. To subscribe to CEIC's contentions would be to totally disregard the concept and purpose of a preliminary attachment. The case at bench admits of a peculiar character in the sense that it involves a compromise agreement. The parties to the compromise agreement should not be deprived of the protection provided by an attachment lien especially in an instance where one reneges on his obligations under the agreement, as in the case at bench, where Antonio Garcia failed to hold up his own end of the deal, so to speak. Moreover, a violation of the terms and conditions of a compromise agreement entitles the aggrieved party to a writ of execution. A judicial compromise may be enforced by a writ of execution. If a party fails or refuses to abide by the compromise, the other party may enforce the compromise or regard it as rescinded and insist upon his original demand. If we were to rule otherwise, we would in effect create a back door by which a debtor can easily escape his creditors. Consequently, we would be faced with an anomalous situation where a debtor, in order to buy time to dispose of his properties, would enter into a compromise agreement he has no intention of honoring in the first place. The purpose of the provisional remedy of attachment would thus be lost. It would become, in analogy, a declawed and toothless tiger. From the foregoing, it is clear that the consortium and/or its assignee Jaime Gonzales have the better right over the disputed shares. When CEIC purchased the disputed shares from Antonio Garcia on 15 July 1988, it took the shares subject to the prior, valid and existing attachment lien in favor of and obtained by the consortium. ----------------------------o0o----------------------Principle: a judicial compromise may be enforced by a writ of execution. If a party fails or refuses to abide by the compromise, the

Monetary naman ang obligation ng parties; ejectment case was novated)

Contention of Abinujar Petitioners contend that both the Regional Trial Court and Metropolitan Trial Court acted with grave abuse of discretion, the former in issuing a resolution directing the Metropolitan Trial Court to issue a writ of execution against petitioners herein, and the latter, in issuing said writ of execution.

ISSUE: WON the failure to abide by the compromise agreement enforceable by a writ of execution. HELD: YES.

Sharing is Good Karma Page 42

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU NATURE: A compromise agreement is a contract between the parties, which if not contrary to law, morals or public policy, is valid and enforceable between them. There are two kinds of compromise agreements, the judicial, which puts an end to a pending litigation, and the extrajudicial, which is to avoid a litigation As a contract, a compromise agreement is perfected by mutual consent. A judicial compromise, however, while binding between the parties upon its execution, is not executory until it is approved by the court and reduced to a judgment. The non-fulfillment of the terms and conditions of a compromise agreement approved by the court justifies execution thereof and the issuance of the writ for said purpose is the courts ministerial duty enforceable by mandamus IN THE PRESENT CASE In the compromise agreement, Abinujar obligated themselves to pay private respondents the amount of P50,000.00 on January 31, 1990, P10,000.00 on February 28, 1990, and P10,000.00 on March 31, 1990. Petitioners received a copy of the decision of the Metropolitan Trial Court approving the compromise agreement on March 26, 1990. Clearly, there was a breach, for it was only on August 17, 1990 that petitioners attempted to pay by means of nine postdated checks the amounts agreed upon. In effect, the first installment payment of P50,000.00 due on January 31, 1990 was moved to August 31, 1990, the second installment of P10,000.00 due on February 28, 1990 was moved to September 30, 1990 and so forth, thereby making the last installment of P5,000.00 due on September 30, 1990 moved to April 30, 1991. This is tantamount to novating the original agreement entered into by the parties without the consent of private respondents. Inasmuch as a judicial compromise becomes binding between the parties upon its execution, petitioners should have paid the installments falling due even before the approval thereof by the trial court. But assuming that a judicial compromise is not perfected until it is approved by the court, still petitioner should have paid the installments due on March 31, 1990, together with the installments due on January 31 and February 28, 1990 on or before March 31, 1990. ON THE MATTER OF THE EXECUTION OF THE JUDGMENT: ISSUE: The obligation of Abinujar was monetary in nature but the Sheriff issued a notice to voluntarily vacate the premises by way of enforcing the decision approving the compromise agreement. Is this proper? HELD: NO. When the parties entered into a compromise agreement, the original action for ejectment was set aside and the action was changed to a monetary obligation. A perusal of the compromise agreement signed by the parties and approved by the inferior court merely provided that in case the spouses Abinujar failed to pay three monthly installments, the spouses Ramiro would be entitled to a writ of execution, without specifying what the subject of execution would be. Said agreement did not state that petitioners would be evicted from the premises subject of the suit in case of any default in complying with their obligation thereunder. This was the result of the careless drafting thereof for which only private respondents were to be blamed. A judgment is the foundation of a writ of execution which draws its vitality therefrom. An officer issuing a writ of execution is required to look to the judgment for his immediate authority An execution must conform to and be warranted by the judgment on which it was issued. There should not be a substantial variance between the judgment and the writ of execution. Thus, an execution is fatally defective if the judgment was for a sum of money and the writ of execution was for the sale of mortgaged property.

RIZADA, RESCI ANGELLI As petitioners obligation under the compromise agreement as approved by the court was monetary in nature, private respondents can avail only of the writ of execution provided in Section 15, Rule 39 of the Revised Rules of Court, and not that provided in Section 13.

Section 15, Rule 39 provides: Execution of money judgments.

The officer must enforce an execution of a money judgment by levying on all the property, real and personal of every name and nature whatsoever, and which may be disposed of for value, of the judgment debtor not exempt from execution, or on a sufficient amount of such property, if there be sufficient, and selling the same, and paying to the judgment creditor, or his attorney, so much of the proceeds as will satisfy the judgment. Any excess in the proceeds over the judgment and accruing costs must be delivered to the judgment debtor, unless otherwise directed by the judgment or order of the court. When there is more property of the judgment debtor than is sufficient to satisfy the judgment and accruing costs, within the view of the officer, he must levy only on such part of the property as is amply sufficient to satisfy the judgment and costs. Real property, stocks, shares, debts, credits, and other personal property, or any interest in either real or personal property, may be levied on in like manner and with like effect as under a writ of attachment. On the other hand, Section 13, Rule 39 provides: How execution for the delivery or restitution of property enforced.- The officer must enforce an execution for the delivery or restitution of property by ousting therefrom the person against whom the judgment is rendered and placing the judgment creditor in possession of such property, and by levying as hereinafter provided upon so much of the property of the judgment debtor as will satisfy the amount of the judgment and costs included in the writ of execution. DISPOSITION: Sheriff is directed to enforce the execution only of the money judgment in accordance with Section 15, Rule 39 of the Revised Rules of Court. ------------------o0o---------------------Principle: When a person has funds in his possession belong to a debtor, and said funds are attached by a creditor of the latter, said person is relieved from all responsibility to said creditor if he is judicially compelled to deliver said funds to the aforesaid debtor. Where attached properties belonging to the principal debtor are taken out fo the hands of a person by legal process after he had been notified of the order of attachment, said person cannot be made to answer for the properties in a proceeding to carry out said attachment. PHILIPPINE NATIONAL BANK V. OLUTANGA LUMBER 54 PHIL 346 FACTS: Case: BPI V. OLUTANGA (Olutanga wonBPI is the

garnishee; judgment in favour of Olutanga in the hands of BPI was garnished by creditor PNB binigay ni BPI kay PNB now, Olutanga wants to claim it)
a.

BPI was ordered to pay to Olutanga Lumber a certain sum amounting to P31,242.11 Upon the return of the case to the RTC Zamboanga, the corresponding writ of execution was issued, which was complied with by the sheriff presented writ to manager of BPI Zamboanga on Jan. 10, 1928 BUT without levying execution on any property belonging to the execution debtor. On the same date, the aforesaid sheriff addressed to the central office of said bank at Manila the following telegram: Execution Bank Philippine Islands versus Olutanga Lumber Company served today manager

Sharing is Good Karma Page 43

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU Zamboanga branch. Please authorize him pay amount due defendant Olutanga Lumber plus sheriff fees otherwise levy will be made on your Zamboaga office. LUIS PANAGUITON, Provincial

RIZADA, RESCI ANGELLI

h.

Sheriff.

Case: PNB v. OLUTANGA (PNB won it used the judgment in favour of Olutanga v. BPI to secure its judgment) b. On the same date, January 10, 1928, before receiving the foregoing telegram, the central office of the Bank of the Philippine Islands in Manila was

Notwithstanding the fact that the provincial sheriff of Zamboanga had been duly informed of the levy made by the sheriff of the City of Manila upon the funds of the Olutanga Lumber Company in possession of the herein appellee, the Bank of the Philippine Islands, and of the delivery of said funds to said judicial officer of the City of Manila,

notified by the sheriff of the City of Manila that all the credits and debts contracted by it with the Olutanga Lumber Company, amounting to
P16,656.30, plus the interest at the rate of 12 per cent per annum from April 19, 1922 until fully paid, were levied upon in the name of the Court of First Instance of Manila.

Philippine National Rank by virtue of a writ of attachment issued in civil case No. 32936 of the
c. On the following day, January 11, 1928, BPI, in reply to said notice, addressed a letter to the sheriff of the City of Manila, notifying the latter that, pursuant to his notice of attachment, it retained at the disposal of said sheriff the aforesaid sum of P16,656.30.. On the same date, January 11, 1928, the sheriff of the City of Manila sent a letter to the Bank of the Philippine Islands at Manila, requiring the latter to deliver to him the sum of P32,109,45, theretofore attached, belonging to the Olutanga Lumber Company. After the delivery to the sheriff of the City of Manila of the amount of the judgment in favor of the Olutanga Lumber Company, rendered in civil case No. 1176 of the Court of First Instance of Zamboanga, G. R. No. 27045 of this court the BPI notified the provincial sheriff of Zamboanga by telegram, on January 12, 1928, that the amount of the judgment in favor of the Olutanga Lumber Company against said bank had been delivered to the sheriff of the City of Manila, and that any question on that subject should be taken up with him. On January 14, 1928, the provincial sheriff of Zamboanga sent a communication to the manager of BPI, notifying him that all the money he had in his possession or control, belonging to the Bank of the Philippine Islands, was levied upon by virtue of an order of execution issued by the Court of First Instance of Zamboanga in civil case No. 1176, entitled Bank of the Philippine Islands vs. Olutanga Lumber Company, G. R. No. 27045 of this court, copy of which order of execution was served upon him on January 10, 1928. January 14, 1928, the sheriff of the City of Manila sent a telegram to the sheriff of the Province of Zamboanga, telling him that the amount of the judgment against the Bank of the Philippine Islands and in favor of the Olutanga Lumber Company, which had been attached by virtue of two writs of attachment issued by the Philippine National Bank and the Standard Oil company of New York against the Olutanga Lumber Company, had been deposited with him by said Bank of the Philippine Islands.

d.

e.

f.

In view of this act of the provincial sheriff of Zamboanga BPI had to file a petition for prohibition with this court against the Judge of the Court of First Instance of Zamboanga, the provincial sheriff of said province and the Olutanga Lumber Company, docketed as G. R. No. 29043 of this court. RTC xxxx it appearing that the writ of execution complained of was issued and served upon the petitioner before the latter received notice by the garnishment, and two days before he was required by the sheriff of Manila to deliver the amount mentioned in the said garnishment proceedings, wherefore, the respondent judge did not exceed its jurisdiction in issuing the aforesaid writ of execution, it is ordered that the petition for a writ of prohibition be and is hereby denied, with costs against the petitioner SC also denied the writ of prohibition Sheriff of Zamboanga was ordered to proceed with the execution judgment against BPI BPI Zamboanga had no other remedy than to deliver to the sheriff of Zamboanga the sum of P31,596.83. BPI now filed a case ordering the sheriff of Manila to return to it the amount deposited earlier RTC The Philippine National Bank having appeared as an ordinary creditor in the involuntary insolvency of the Olutanga Lumber Company, civil case No. 33048 of this court, claiming the sum attached by the sheriff, it thereby renounced its preferred right acquired through garnishment issued in the present case; and for that reason, the motion of the Bank of the Philippine Islands is hereby granted, and the sheriff of the City of Manila is hereby ordered to return to it the sum deposited by virtue of the garnishment, after deducting therefrom his legal fees to which he has a perfect right notwithstanding the result arrived at. Contention of PNB: 2. It did not waive its lien acquired by garnishment in the present case by joining as an unsecured creditor the petition for the involuntary insolvency of the Olutanga Lumber Company. 3. The lower court erred in holding, in its said order of March 31, 1928, that the garnishment issued in the present case referred only to P16,656.30, and in ordering the difference between said sum and the amount of P30,092.11 deposited with the sheriff of Manila to be returned to the Bank of the Philippine Islands after deducting the sheriff's fees therefrom.

he attempted to collect from the branch of said Bank of the Philippine Islands at Zamboanga the amount of the judgment in favor of the Olutanga Lumber Company, threatening to levy, and in fact did levy, an attachment against said branch.

g.

ISSUE: whether the funds placed by the Bank of the Philippine Islands in possession of the sheriff of the City of Manila, which had been attached in the name of the Philippine National Bank and against the Olutanga Lumber Company, had been released from said attachment when the aforesaid Bank of the Philippine Islands, by judicial order, paid the judgment rendered by this court against the said Bank of the Philippine Islands and in favor of the Olutanga Lumber Company. HELD: YES. Sheriff of Manila must return the said amount to BPI by virtue fo a judicial order compelling BPI to pay the same to Olutanga. SUMMARY: We have seen that after the central office of the Bank of the Philippine Islands in the City of Manila had deposited with the sheriff of the City of Manila the sum of P32,109.45, by virtue of a

Sharing is Good Karma Page 44

PROVISIONAL REMEDIES Prof: ATTY. GERALDINE QUIMOSING-TIU demand made upon it by the latter in compliance with an order of attachment issued by the Court of First Instance of Manila in civil case No. 32936, wherein the Philippine National Bank was and still is the plaintiff and the Olutanga Lumber Company was and still is the defendant, which sum of P32,109.45 was the amount of the judgment rendered in civil case No. 1176 of the Court of First Instance of Zamboanga, G. R. No. 27045 of this court, in favor of the Olutanga Lumber Company and against the Bank of the Philippine Islands, said central office of the Bank of the Philippine Islands notified the provincial sheriff of Zamboanga of said consignation; but the latter,

RIZADA, RESCI ANGELLI

notwithstanding the attachment of said amount by the sheriff of the City of Manila, tried to collect from the branch office in Zamboanga of the Bank of the Philippine Islands the amount of said judgment.

Under the circumstances the Zamboanga branch had to resort to this court for a remedy to prevent execution of said judgment. This court denied the remedy prayed for, and upon receipt of notice of said denial the provincial sheriff of Zamboanga insisted in collecting from the Zamboanga branch of the Bank of the Philippine Islands the amount of said judgment, which said bank had to pay. HELD: The general rule is that, where attached properties belonging to the principal debtor are taken out of the hands of a person by legal process, after he had been notified of the order of attachment, said

person cannot be made to answer for the properties in a proceeding to carry out said attachment .
IN THE PRESENT CASE, the fact that the funds attached in the possession of the Bank of the Philippine Islands, belonging to the Olutanga Lumber Company, had been deposited with the sheriff of the City of Manila by order of said officer, does not change the juridical situation of said funds as attached in the possession of the Bank of the Philipine Islands, and, according to the above-quoted rule, the aforesaid Bank of the Philippine Islands, having been judicially compelled to pay the amount of the judgment represented by said funds to the Olutanga Lumber Company, after having employed all the legal means to avoid it, is released from all responsibility to the

Philippine National Bank in whose favor the writ of attachment was issued.

For the foregoing considerations, we are of the opinion, and so hold, that when a person has funds in his possession belonging to a debtor, and said funds are attached by a creditor of the latter, said person is relieved from all responsibility to said creditor if he is judicially compelled to deliver said funds to the aforesaid debtor. DISPOSITION: Wherefore, the dispositive part of the order appealed from is affirmed in so far as it grants the motion of the Bank of the Philippine Islands, and the sheriff of the City of Manila is hereby ordered to return to said bank the amount deposited by virtue of the writ of attachment, after deducting his legal fees, with costs against the appellant. So ordered.

Sharing is Good Karma Page 45