K.O. Glass Construction Co., Inc. v. Valenzuela
REITERATIONFacts
The Antecedents: Antonio D. Pinzon filed an action against Kenneth O. Glass to recover P37,190.00 for alleged truck rentals and unreturned spare parts. Pinzon sought a writ of preliminary attachment against Kenneth O. Glass's properties, specifically collectibles and payables with Philippine Geothermal, Inc., on the grounds that Kenneth O. Glass was a foreigner, had a sufficient cause of action, and lacked sufficient security for the claim. Procedural History: The respondent Judge issued the writ of preliminary attachment. Kenneth O. Glass moved to quash the writ, arguing that the transactions were with K.O. Glass Construction Co., Inc., a corporation, not with him personally, and that he had no intent to defraud creditors. Pinzon amended his complaint to include K.O. Glass Construction Co., Inc. as a co-defendant. The defendants filed a supplementary motion to dissolve the attachment, citing deficiencies in the supporting affidavit, specifically that it failed to state that the claim was above all legal set-offs or counterclaims, that there was no other sufficient security, and that it did not specify grounds under Section 1 of Rule 57. The respondent Judge denied this motion and ordered Philippine Geothermal, Inc. to deposit P37,190.00 with the Clerk of Court. Subsequently, the defendants filed a counterbond for P37,190.00 and requested the release of the deposited amount, which the respondent Judge did not order. The Petition: K.O. Glass Construction Co., Inc. filed a petition for certiorari to annul the writ of preliminary attachment and to secure the release of the deposited amount.
Issue(s)
Whether the respondent Judge gravely abused his discretion in issuing the writ of preliminary attachment. Whether the respondent Judge gravely abused his discretion in not ordering the release of the deposited money after a counterbond was filed.
Ruling
The petition is GRANTED. The orders of the respondent Judge issuing the writ of preliminary attachment and denying the release of the deposited amount are ANNULLED and SET ASIDE. The respondents are ordered to forthwith release the garnished amount of P37,190.00 to the petitioner.
Ratio Decidendi
On the first issue of whether the respondent Judge gravely abused his discretion in issuing the writ of preliminary attachment: The Court found merit in the petition, holding that there was no ground for the issuance of the writ of preliminary attachment. Section 1 of Rule 57 of the Revised Rules of Court enumerates the specific grounds for attachment, including a party departing the Philippines with intent to defraud creditors, embezzlement, fraud, or removal of property to defraud creditors, or residing out of the Philippines. The original complaint merely stated that Kenneth O. Glass was a foreigner, but did not allege that he was about to depart the Philippines with intent to defraud his creditors. The amended complaint also failed to establish this crucial element. Therefore, the attachment of their properties was not justified based on the grounds provided by law. Furthermore, the Court held that the affidavit submitted by Pinzon did not comply with the requirements of Section 3, Rule 57 of the Revised Rules of Court. This section mandates that the affidavit must state that a sufficient cause of action exists, that the case is one of those mentioned in Section 1 of Rule 57, that there is no other sufficient security for the claim, and that the amount due is as much as the sum for which the order is granted above all legal counterclaims. The affidavit in this case failed to state these essential requisites. The Court reiterated that the failure to allege these prescribed requisites renders the writ of preliminary attachment fatally defective and the judge issuing it acts in excess of jurisdiction, citing Guzman vs. Catolico. On the second issue of whether the respondent Judge gravely abused his discretion in not ordering the release of the deposited money after a counterbond was filed: The Court found that the petitioner had filed a counterbond in the amount of P37,190.00. According to Section 12, Rule 57 of the Revised Rules of Court, upon the filing of a counterbond, the judge should discharge the attachment. The purpose of the counterbond is to serve as security for any judgment that may be rendered, thereby preserving the defendant's property while providing the plaintiff with adequate recourse. The respondent Judge's failure to order the release of the deposited money upon the filing of the counterbond constituted grave abuse of discretion, as it contravened the clear mandate of the Rules.
Main Doctrine
A writ of preliminary attachment may be annulled and set aside if there is no ground for its issuance, if the supporting affidavit does not comply with the requirements of the Rules of Court, or if a counterbond has been filed and accepted by the court.