Oñate v. Abrogar
MODIFICATIONFacts
The Antecedents: Respondent Sun Life Assurance Company of Canada (Sun Life) filed a complaint for a sum of money with a prayer for a writ of attachment against petitioners Emmanuel C. Oñate, Econ Holdings Corporation, Brunner Development Corporation, and Noel L. Diño. The following day, the trial court issued an order granting the writ of attachment, which was subsequently amended to reflect the alleged amount of indebtedness. Sheriff Flores attempted to serve summons and the amended writ of attachment but was unable to do so due to the absence of a responsible officer. Nonetheless, notices of garnishment were served upon several banks, and a condominium unit and real property belonging to petitioner Oñate were levied upon. Summons was eventually served on petitioners on January 9, 1992, and on defendant Diño on January 16, 1992. Procedural History: Petitioners filed an urgent motion to discharge/dissolve the writ of attachment. Sun Life filed an ex-parte motion to examine the books of accounts and ledgers of petitioner Brunner Development Corporation, which was granted. Petitioners filed a motion to nullify the proceedings, alleging they were not present. Sun Life then filed another motion for examination of bank accounts with BPI and PNB, seeking compliance with the notice of garnishment. The trial court denied petitioners' motion to discharge the writ, approved Sun Life's additional attachment, granted the motion to examine BPI accounts, and denied petitioners' motion to nullify the January 23, 1992 proceedings. Petitioners' motion for reconsideration was also denied. The Petition: Petitioners assail the orders of the respondent Judge, arguing that he acted with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the writs of preliminary attachment and notices of garnishment ex parte before jurisdiction was acquired over them, and in allowing the examination of bank records without notice.
Issue(s)
Whether the trial court erred in granting the writ of preliminary attachment ex parte before acquiring jurisdiction over the petitioners. Whether the writ of attachment should have been discharged on the ground of absence of fraud. Whether the enforcement of the writ of attachment was invalid due to its enforcement preceding the service of summons. Whether the respondent Judge erred in allowing the examination of bank records without notice to the petitioners.
Ruling
The petitions are unmeritorious and are hereby dismissed. The temporary restraining order issued is lifted.
Ratio Decidendi
On the issuance of the writ of preliminary attachment ex parte before acquiring jurisdiction: The Court reiterated the well-settled rule that a writ of preliminary attachment may be validly applied for and granted even before the defendant is summoned or is heard from, as long as the action has been properly commenced by the filing of the complaint and payment of requisite fees. Rule 57 of the Rules of Court explicitly allows for the grant of the remedy "at the commencement of the action or at any time thereafter," indicating that it can be obtained before service of summons. The rationale is to secure the satisfaction of any judgment that may be recovered, and the law does not prohibit its issuance prior to acquiring jurisdiction over the person of the defendant. The practice sanctioned by courts allows for the incorporation of the application for attachment in the complaint, and for the trial court to issue the writ ex parte if the application is sufficient in form and substance. On the discharge of the writ due to absence of fraud: The Court held that an attachment may not be dissolved by a showing of its irregular or improper issuance if the ground for attachment is also the applicant's cause of action in the main case. To do so would result in an anomalous situation where the issues of the main case would be ventilated and resolved in a mere hearing of the motion to discharge. In this case, the issue of fraud was alleged in Sun Life's complaint, making it a matter for the lower court to resolve in the main action. The dismissal of a criminal complaint for estafa does not preclude a finding of civil liability. On the validity of the enforcement of the writ preceding service of summons: While acknowledging that enforcement of a writ of attachment generally cannot bind the defendant until jurisdiction is acquired through summons or voluntary appearance, the Court distinguished the present case from prior rulings where summons was never served. In this case, there was an attempt at contemporaneous service of both summons and the writ, which was thwarted by factors beyond the control of the plaintiff or process server (absence of a responsible officer). The Court found an exception to the rule, stating that enforcement may be validly effected if a previous attempt to serve both failed due to such circumstances, provided service is effected within a reasonable period thereafter. This exception is justified to prevent defendants from transferring their properties while new attempts at service are made, and because jurisdiction was eventually acquired six days later. Nullifying prior garnishments would create further possibilities of asset transfer. The ease of obtaining an attachment is counterbalanced by the ease of discharging it via cash deposit or counter-bond, which petitioners attempted but failed due to an insufficient bond amount. On the examination of bank records without notice: The Court clarified that Section 10, Rule 57 of the Rules of Court, which governs the examination of parties whose property is attached and persons indebted to them, requires notice only to the garnishee (the person holding property or credits belonging to the defendant), not necessarily to the defendant himself, unless the defendant is to be examined regarding his property. The provision is not incompatible with Republic Act No. 1405, as amended, as Section 2 thereof provides an exception for cases where the deposited money is the subject matter of the litigation. The examination of bank records was deemed a necessary method for Sun Life to trace the proceeds of the check it paid to petitioners, not a "fishing expedition."
Main Doctrine
A writ of preliminary attachment may be validly applied for and granted even before the defendant is summoned or is heard from, provided the action has been properly commenced. Enforcement of the writ may be validly effected even if it precedes the actual service of summons, provided there was a prior attempt to serve both summons and writ due to factors beyond the control of the plaintiff or process server, and service is effected within a reasonable period thereafter. Examination of bank records under Section 10, Rule 57 of the Rules of Court does not require notice to the defendant.