88 Mart Duty Free v. Juan
REITERATIONFacts
The Antecedents: Petitioner 88 Mart Duty Free, Inc. (petitioner), through its CEO Jean Lui, expressed interest in purchasing assorted imported food items and other non-perishable goods owned by respondent Fernando U. Juan for US$39,165. Respondent delivered the invoices, shipping documents, and packing list to Lui's employee. The shipment was subsequently transferred to petitioner's name, and petitioner applied for its entry into the SBMA. Respondent demanded payment, but petitioner refused. Procedural History: Respondent filed a complaint for sum of money and damages with a prayer for a writ of preliminary attachment. The Regional Trial Court (RTC) granted several motions, including the issuance of a writ of preliminary attachment and the sale of perishable goods at public auction for P165,000. The RTC ruled in favor of respondent, finding a perfected contract of sale not subject to a suspensive condition, and held petitioner and Lui solidarily liable. The Court of Appeals (CA) affirmed the RTC's decision with modifications, holding that the turnover of documents constituted constructive delivery and transfer of ownership. However, the CA excluded Lui from solidary liability and reduced petitioner's liability to the deficiency after the resale of goods. The Petition: Petitioner sought to set aside the CA decision, raising issues on the existence of a perfected contract of sale and the propriety of the writ of preliminary attachment.
Issue(s)
Whether or not there was a perfected contract of sale. Whether or not the issuance of the writ of preliminary attachment by the RTC was proper.
Ruling
The petition is partly meritorious. The Supreme Court affirmed the CA's finding of a perfected contract of sale but modified the decision by declaring the writ of preliminary attachment improper and ordering its discharge.
Ratio Decidendi
On the issue of a perfected contract of sale: The Supreme Court held that this was a question of fact that had already been satisfactorily established by the RTC and the CA. The Court reiterated that its jurisdiction in a petition for review on certiorari under Rule 45 is limited to questions of law, and no exceptions were present in this case. The Court found no reason to disturb the lower courts' findings on the existence of a perfected contract of sale, noting that the petition was more about disagreeing with the lower courts' appreciation of facts rather than overlooked facts. On the issue of the propriety of the writ of preliminary attachment: The Supreme Court found that the CA erred in holding that the writ was properly issued. While this could be considered a question of fact, it fell within the exceptions to the general rule because the CA's inference was manifestly mistaken. The Court noted that there was nothing in the RTC and CA decisions that justified the issuance of the writ. In fact, both lower courts ruled that there was no fraud on petitioner's part in incurring the obligation or in its performance. Therefore, petitioner's liability was predicated solely on the non-fulfillment of its obligation under the contract of sale, making the writ of attachment improper. Consequently, the Court granted petitioner's motion to discharge the writ.
Main Doctrine
A writ of preliminary attachment is improperly issued when there is no fraud on the part of the debtor in incurring the obligation or in its performance, and the liability is predicated solely on the non-fulfillment of the contractual obligation.