Philippine Commercial International Bank v. Alejandro
REITERATIONFacts
The Antecedents: Petitioner Philippine Commercial International Bank (PCIB) filed a complaint for sum of money against respondent Joseph Anthony M. Alejandro, alleging he executed a promissory note for over ₱249 million. PCIB requested additional security due to fluctuations in foreign exchange rates affecting assigned deposits. Respondent countered, citing PCIB's alleged mishandling of his account and failure to close it as instructed. Procedural History: PCIB sought a writ of preliminary attachment, alleging respondent fraudulently withdrew unassigned deposits and was not a resident of the Philippines. The trial court granted the writ ex parte. Respondent moved to quash, asserting the withdrawal was approved and that he maintained permanent residences and an office in the Philippines. The trial court quashed the writ, finding no intent to defraud and that PCIB had knowledge of respondent's Philippine addresses, thus constituting misrepresentation and suppression of facts. PCIB's petition for certiorari was dismissed by the Court of Appeals and subsequently by the Supreme Court. Meanwhile, respondent filed a claim for damages on the attachment bond due to wrongful garnishment. The trial court awarded ₱25 million in damages, ordering the surety and PCIB to pay. The Court of Appeals modified this, awarding ₱2 million in nominal damages, ₱5 million in moral damages, and ₱1 million in attorney's fees against the bond. The Court of Appeals later granted respondent's motion for reconsideration, adding ₱5 million in exemplary damages. The Petition: PCIB filed a petition for review assailing the Court of Appeals' decision affirming the trial court's grant of damages for invalid garnishment.
Issue(s)
Whether petitioner bank is liable for damages for the improper issuance of a writ of attachment against respondent. Whether petitioner acted in good faith in applying for the writ of attachment. Whether respondent, as a resident temporarily out of the Philippines, could still be subject to attachment under Section 1(f), Rule 57 of the Rules of Court.
Ruling
The Supreme Court ruled in the affirmative, holding petitioner bank liable for damages for the improper issuance of the writ of attachment. The Court affirmed the Court of Appeals' decision with modifications, reducing the awarded damages. Petitioner PCIB was ordered to pay respondent Joseph Anthony M. Alejandro ₱50,000.00 as nominal damages, ₱200,000.00 as attorney's fees, ₱500,000.00 as moral damages, and ₱500,000.00 as exemplary damages, to be satisfied against the attachment bond.
Ratio Decidendi
On the liability for improper issuance of writ of attachment: The Court affirmed the liability of petitioner bank for damages due to the improper issuance of the writ of attachment. The principle of conclusiveness of judgment barred petitioner from relitigating the issues of misrepresentation and suppression of material facts regarding respondent's residence, as these were already determined in a prior final and executory order. The Court emphasized that the trial court's order quashing the writ clearly indicated bad faith on the part of the bank in deliberately misleading the court. The Court cited Hanil Development Co., Ltd. v. Court of Appeals to support the proposition that a party's bad faith in procuring a writ of attachment, once determined in a final decision, cannot be doubted. On the issue of good faith: Petitioner's contention of good faith was deemed without merit. The Court reiterated that the principle of conclusiveness of judgment precluded petitioner from invoking good faith, as the prior final order had already established its misrepresentation and suppression of material facts. The factual backdrop, including the bank's personal and official knowledge of respondent's Philippine addresses, further undermined any claim of good faith. The Court noted that the omitted facts were highly material and relevant to the grant or denial of the writ. On attachment of property of a resident temporarily out of the Philippines: The Court found no merit in petitioner's argument that respondent, as a resident temporarily out of the Philippines, could still be subject to attachment under Section 1(f), Rule 57 of the Rules of Court. The Court clarified that the purpose of attachment under this provision is to acquire jurisdiction when personal or substituted service cannot be effected. However, for residents temporarily out of the Philippines, substituted service is the normal mode of service that confers jurisdiction, as provided under Section 16, Rule 14 of the Rules of Court. The Court explained that if the sole purpose of attachment is to acquire jurisdiction, the court must determine if substituted service would suffice. In this case, since respondent had known residences and an office in the Philippines, substituted service could have been effected, making attachment unnecessary for acquiring jurisdiction. The Court stressed that the rules on attachment must be strictly construed in favor of the defendant, as it is a harsh and extraordinary remedy. Therefore, even on the alternative ground, petitioner was not entitled to the writ.
Main Doctrine
A bank is liable for damages for the improper issuance of a writ of attachment when it misrepresents or suppresses material facts regarding the respondent's residence to secure the writ, even if the respondent is a resident temporarily out of the Philippines, as jurisdiction can be acquired through substituted service.