“A preliminary attachment may be applied either ex parte (as part of the complaint or initiatory pleading) or upon motion with notice and hearing in the court where the action is pending”
A writ of preliminary attachment is a provisional remedy issued by the court where an action is pending.
“[It]… allows the levy of a property which shall then be held by the sheriff… as security for the satisfaction of the judgment that the court may render in favor of the attaching party” (Tsuneishi Heavy Industries (Cebu), Inc. (Tsuneishi) v. MIS Maritime Corporation, G.R. 193572, April 4, 2018).
The intention is to “seize [the] property of an alleged debtor in advance of final judgment and holds it subject to appropriation, thereby preventing the loss or dissipation of the property through fraud or other means.
This is also availed of to prevent the properties from “being removed beyond the jurisdiction [of the court], or improperly disposed of or concealed” (G.R. 193572, April 4, 2018).
A preliminary attachment may be applied either ex parte (as part of the complaint or initiatory pleading) or upon motion with notice and hearing in the court where the action is pending.
An order of attachment shall be granted only when the applicant or a person who personally knows the facts submits an affidavit and a bond corresponding to an amount fixed by the court (Sections 2 and 3, Rule 57, Rules of Civil Procedure).
The affidavit supporting the application for preliminary attachment must show that: (a) a sufficient cause of action exists; (b) the case is one of those mentioned in Section 1, Rule 57; (c) there is no other sufficient security for the claim sought to be enforced by the action; and (d) the amount due to the applicant, or the value of the property he is entitled to recover, is as much as the sum for which the order is granted above all legal counterclaims (Section 3, Rule 57).
Essentially, the property levied on attachment is placed in the custody of the court. However, the nature of the court’s custody would vary depending on the property sought to be attached.
A real property is placed in the custody of the court, by filing with the registry of deeds a copy of the order, together with a description of the property attached, and a notice that it is attached (Section 7(a), Rule 57).
On the other hand, a personal property is placed in the court’s custody by “taking and safely keeping it in his [sheriff’s] custody, after issuing the corresponding receipt thereof” (Section 7(b), Rule 57). Stocks or shares are placed in the court’s custody “by leaving with the president or managing agent [of the company], a copy of the writ, and a notice [of attachment]” (Section 7 (c), Rule 57).
Custody over “debts and credits, including bank deposits, financial interest, royalties, commissions and other personal property not capable of manual delivery, [is transferred to the courts] by leaving with the person owing such debts, or having in his possession or under his control, such credits or other personal property, or with his agent, a copy of the writ, and notice [of attachment]” (Section 7 (d), Rule 57).
While the Supreme Court has “time and again held that the rules on the issuance of a writ of attachment must be construed strictly against the applicants,” it must be granted if the grounds for its issuance are present.
Absent the grounds, the court issuing it will be acting in excess of its jurisdiction (G.R. 193572, April 4, 2018).
An examination of the grounds under Section 1, Rule 57 of the Rules of Civil Procedure, will reveal that except for one, all of the grounds require some element of fraud.
For example, “an action for the recovery of a specified amount of money or damages… [can be made] against a party who is about to depart from the Philippines with intent to defraud his creditors” (Section 1(a), Rule 57).
There are also such grounds as: “[an] action for money or property embezzled or fraudulently misapplied or converted,” or “an action to recover the possession of property unjustly or fraudulently taken… when the property…has been concealed, removed, or disposed of to prevent its being found or taken by the applicant” (Section 1(b)(c), Rule 57).
The significance of fraud as grounds for preliminary attachment is made even more evident when “an action [is] against a party who has been guilty of a fraud in contracting the debt or incurring the obligation upon which the action is brought, or in the performance thereof,” or “an action against a party who has removed or disposed of his property, or is about to do so, with intent to defraud his creditors” (Section 1(d)(e), Rule 57).
Hence, “[w]hen fraud is invoked as a ground for the issuance of a writ of preliminary attachment… there must be evidence clearly showing the factual circumstances of the alleged fraud. Fraud cannot be presumed from a party’s mere failure to comply with his or her obligation” (G.R. 193572, April 4, 2018).
The Rules of Court require that in all averments of fraud, the circumstances constituting them must be stated with particularity.
“[F]raud is… anything calculated to deceive — including all acts and omission… involving a breach of legal or equitable duty, trust, or confidence justly reposed — resulting in damage to or in undue advantage over another” (G.R. 193572, April 4, 2018).
In the case of Tsuneishi v. MIS Maritime Corporation, the record shows that Tsuneishi released the vessel in September 2006 while MIS signed the Agreement only in November 2006.
Hence, Tsuneishi’s release of the vessel even before MIS signed the document was not the act which induced the former to turn over the vessel to the latter (G.R. No. 193572, April 4, 2018).
The refusal of MIS to pay is rooted on its claim that its obligation should be set off against Tsuneishi’s liability for the losses that the former incurred for the unwarranted delay in the turn-over of the vessel.
“MIS insists that Tsuneishi is liable for the damage on the vessel… [which] is not an act of fraud” (G.R. No. 193572, April 4, 2018).
According to the Supreme Court, “[e]ven assuming that MIS is wrong in refusing to pay Tsuneishi, this is nevertheless not the fraud contemplated in Section 1(d), Rule 57 of the Rules of Court.
Civil law grants Tsuneishi various remedies in the event that the trial court rules in its favor such as the payment of the obligation, damages and legal interest.
The issuance of a writ of preliminary attachment is not one of those remedies” (G.R. 193572, April 4, 2018).
In the case of Wee v. Tankiansee, “the affidavit merely states that respondent [Tankiansee], an officer and director of Wincorp, connived with the other defendants in the civil case to defraud petitioner [Wee] of his money placements.”
There were no other factual averments detailing how Tankiansee committed fraud or how he connived with the rest of the defendants to commit it (G.R. 171124, February 13, 2008).
“In other words, petitioner [Wee] has not shown any specific act or deed to support the allegation that respondent [Tankiansee] is guilty of fraud. The affidavit, being the foundation of the writ, must contain such particulars as to how the fraud imputed to respondent [Tankiansee] was committed for the court to decide whether or not to issue the writ” (G.R. 171124, February 13, 2008).
Absent the statements in the affidavit showing that the respondent (Tankiansee), at the time of contracting the obligation, had a preconceived plan not to pay or that he committed the alleged fraud — the general allegation of him being an officer and director of Wincorp who allegedly connived with the other defendants — is insufficient to support the issuance of a writ of preliminary attachment (G.R. 171124, February 13, 2008).