Master Tours & Travel Corp. v. Court of Appeals
REITERATIONFacts
1. The Antecedents: The underlying dispute involves a claim for a sum of money filed by Cathay Pacific Airways, Ltd. (Cathay) against Master Tours and Travel Corporation (Master Tours). As part of initiating the legal action, Cathay sought and obtained a writ of preliminary attachment against Master Tours' properties. 2. Procedural History: Cathay filed a complaint for a sum of money, and simultaneously, a writ of preliminary attachment was issued ex parte by the Regional Trial Court (RTC) and served on Master Tours along with the summons. Master Tours moved to set aside the attachment, arguing lack of prior notice and hearing and insufficient grounds. While this motion was pending, Master Tours entered into a compromise agreement under alleged coercion, which it later sought to withdraw. The RTC denied both the motion to set aside the attachment and the motion to withdraw the compromise agreement. Master Tours' subsequent petitions to the Court of Appeals were dismissed, leading to the present petition before the Supreme Court. 3. The Petition: Master Tours filed a petition for review on certiorari with the Supreme Court, principally arguing that the Court of Appeals erred in upholding the trial court's issuance of the writ of preliminary attachment ex parte without prior notice and hearing, thereby denying due process. Master Tours also raised the issue of the permissibility of withdrawing a compromise agreement not yet approved by the court, contending it was entered into under duress.
Issue(s)
Whether the trial court committed a grave reversible error in not holding that it had not yet acquired jurisdiction over the person of the petitioner for lack of notice and hearing when it issued ex parte the writ of preliminary attachment. Whether the compromise agreement entered into by the petitioner's Executive Vice President was valid and binding.
Ruling
The petition is DENIED. The Court of Appeals did not commit any reversible error.
Ratio Decidendi
On the issuance of the writ of preliminary attachment: The Court reiterated the rules laid down in Davao Light and Power Co., Inc. vs. Court of Appeals. A preliminary attachment is a statutory remedy that can be issued ex parte at the commencement of an action or any time thereafter, even before service of summons or acquisition of jurisdiction over the person of the defendant. The rule clearly states that after an action is properly commenced by filing the complaint and paying fees, a plaintiff may apply for and obtain a writ of preliminary attachment upon fulfillment of legal requisites. The sole prerequisite is that the court must be satisfied, based on an affidavit, that a sufficient cause of action exists, the case falls under Section 1 of Rule 57, there is no other sufficient security, and the amount due is as claimed above all counterclaims. If satisfied, the court grants the order and issues the writ upon posting of a bond. On the validity and withdrawal of the compromise agreement: The Court affirmed the general rule that a judgment rendered in accordance with a compromise agreement is immediately executory. An exception exists if a motion to set aside the agreement is filed on grounds of fraud, mistake, or duress. In this case, the trial court found that the Executive Vice President had the authority to bind the corporation and that the compromise agreement was not vitiated by lack of authority, threat, or intimidation, as alleged by the petitioner. The trial court's finding that the compromise agreement was a valid document binding on the corporation was not sufficiently refuted by the petitioner. Therefore, the petitioner's motion to withdraw the agreement was correctly denied.
Main Doctrine
A writ of preliminary attachment may be issued ex parte at the commencement of an action or any time thereafter, even before acquisition of jurisdiction over the person of the defendant, provided the statutory requisites are met. A compromise agreement, once validly entered into, is binding and immediately executory unless set aside on grounds of fraud, mistake, or duress.