Ting v. Villarín
REITERATIONFacts
1. The Antecedents: Consolidated Bank and Trust Company (Consolidated Bank) filed a complaint for a sum of money with a prayer for a writ of preliminary attachment against Perlon Textile Mills and its directors, including Roberto Ting and his wife, Dolores Lim Ting. The wife was impleaded to bind their conjugal partnership. The complaint had two causes of action: the first sought recovery on promissory notes amounting to P2,972,955.51, allegedly obtained by the corporation through its officers Lu Cheng Peng, Teng See, and Roberto Ting, who signed jointly and severally. The second cause of action concerned violations of trust receipt agreements, secured by a continuing guaranty from Liu Suy Lin, Angelo Leonar, and Lu Cheng Peng. 2. Procedural History: Consolidated Bank applied for a writ of preliminary attachment, alleging "fraud in contracting an obligation" under Section 1, Rule 57 of the Rules of Court. On September 23, 1981, the respondent judge issued an order commanding the attachment of the estates of various defendants, including Spouses Roberto Ting and Dolores Lim Ting. On March 3, 1982, the respondent judge denied petitioners' Motion to Quash Attachment, finding the motion without sufficient merit and noting that the alleged fraud was effected through the collective action of the defendants. On July 19, 1982, the respondent judge denied petitioners' motion for reconsideration. 3. The Petition: Petitioners filed a petition for certiorari, questioning the writ of preliminary attachment. They argued that the application for attachment was based on "fraud in contracting" the trust receipt agreements, to which petitioner Roberto Ting was not a party, his involvement being limited to the promissory notes under the first cause of action. They also contended that the writ pierced the veil of corporate fiction, as the corporation alone should be liable for the trust receipt violations. Finally, they challenged the attachment of their conjugal partnership property.
Issue(s)
Whether the complaint provided a sufficient basis for the issuance of a writ of preliminary attachment based on "fraud in contracting an obligation." Whether the writ of preliminary attachment improperly pierced the veil of corporate fiction and improperly joined causes of action. Whether the conjugal partnership property of the petitioners could be validly subjected to attachment.
Ruling
The petition is GRANTED. The questioned Orders dated September 23, 1981, March 3, 1982, and July 19, 1982, of the respondent judge, and the levy on attachment made by the deputy sheriffs against the parcel of land covered by TCT No. T-7232 and registered in the names of the petitioners, are declared NULL AND VOID.
Ratio Decidendi
On the sufficiency of the basis for the writ of preliminary attachment: The Court held that a writ of attachment cannot be issued on a general averment of fraud. The complaint must recite specific factual circumstances that support the application, especially when the ground relied upon is "fraud in contracting an obligation." The Court found that the complaint utterly failed to provide any hint about what constituted the fraud or how it was perpetrated, and fraud cannot be presumed. The respondent judge's failure to ensure that all legal requisites were complied with constituted an excess of jurisdiction, rendering the writ null and void. The Court cited Dy v. Enage and Filinvest Credit Corp. vs. Relova in support of this principle. On piercing the corporate veil and joinder of causes of action: The Court noted that the application for preliminary attachment rested on "fraud in contracting" the trust receipt agreements, which were part of the second cause of action. However, the complaint itself indicated that only Consolidated Bank, Liu Suy Lin, Angelo Leonar, and Lu Cheng Peng were privy to these agreements. Petitioner Roberto Ting's involvement was limited to the promissory notes under the first cause of action. The Court found that the two causes of action arose from different transactions and that the complaint could only adversely affect petitioner Roberto Ting under the first cause of action, not the second. Therefore, the joinder of causes of action was improper, and the attachment order, which swept broadly across all defendants, was based on a flawed premise. The Court referenced Section 6, Rule 3 of the Revised Rules of Court on permissive joinder of parties and Gacula vs. Martinez, et al.. On the attachment of conjugal partnership property: The Court found the attachment order void because it included the conjugal partnership property of the spouses Ting. The wife, Dolores, was impleaded merely because she was the spouse of Roberto. The Court reiterated that a conjugal partnership cannot be benefited by an obligation incurred by the husband as a guarantor, as such an act does not conserve or augment conjugal funds but instead risks dissipating them. When the husband assumes the obligation of a guarantor, the presumption that he acts for the benefit of the conjugal partnership is lost. The Court cited Luzon Surety Co., Inc. v. De Garcia.
Main Doctrine
A writ of preliminary attachment cannot be issued on a general averment of fraud; specific factual circumstances supporting the claim of fraud must be alleged. Furthermore, a writ of attachment improperly issued against conjugal partnership property when the obligation was incurred by only one spouse and did not benefit the partnership is void.