Provisional Remedies Attachment: Abraham Rey Montecillo Acosta

Provisional Remedies Attachment Abraham Rey Montecillo Acosta

Supreme Court Outline n n n n

Provisional Remedies 1. Nature of provisional remedies 2. Jurisdiction over provisional remedies 3. Preliminary Attachment n a. Grounds for issuance of writ of attachment n b. Requisites n c. Issuance and contents of order of attachment; n affidavit and bond n d. Rule on prior or contemporaneous service of n summons n e. Manner of attaching real and personal property; n when property attached is claimed by third person n f. Discharge of attachment and the counter-bond n g. Satisfaction of judgment out of property attached

Supreme Court Outline (2)

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4. Preliminary Injunction n a. Definitions and Differences: Preliminary Injunction and Temporary Restraining Order n b. Requisites n c. Kinds of Injunction n d. When writ may be issued n e. Grounds for issuance of preliminary injunction n f. Grounds for objection to, or for the dissolution of injunction or restraining order n g. Duration of TRO n h. In relation to RA 8975, Ban on issuance of TRO or Writ of Injunction in cases involving government infrastructure projects n i. Rule on prior or contemporaneous service of summons in relation to attachment

Supreme Court Outline (3)

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5. Receivership n a. Cases when receiver may be appointed n b. Requisites n c. Requirements before issuance of an Order n d. General powers of a receiver n e. Two (2) kinds of bonds n f. Termination of receivership 6. Replevin n a. When may writ be issued n b. Requisites n c. Affidavit and bond; Redelivery Bond n d. Sheriff s duty in the implementation of the writ; n when property is claimed by third party

Nature of Provisional Remedies

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Provisional Remedies are remedies to which parties litigant may resort for the preservation or protection of their rights or interest, and for no other purpose, during the pendency of the principal action. If an action, by its nature, does not require such protection or preservation, said remedies can not be applied for and granted. To each kind of action or actions a proper provisional remedy is provided for by law. The Rules of Court clearly specify the case in which they may be properly granted.

RULE 57 - PRELIMINARY ATTACHMENTS

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Nature of preliminary attachment Provisional remedy issued by the court placing the property under custodial legis as security for the satisfaction of whatever judgment may be rendered in the case. Not a separate and distinct proceeding; accessory to the principal action. Nature of proceeding is quasi-in rem; jurisdiction over the person of the defendant is not required so long as the court acquires jurisdiction over the res Attachment is purely statutory remedy Availed by both the plaintiff and defendant

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Section 1. Grounds upon which attachment may issue.

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WHEN can I apply: At the commencement of the action or at any time before entry of judgment, WHO can apply: a plaintiff or any proper party n Who is a proper party? Defendant who has a claim. WHAT may be attached: may have the property of the adverse party attached What is the PURPOSE: as security for the satisfaction of any judgment that may be recovered in the following cases: WHERE can you apply: n at the court where the action is pending n CA n SC What are the requirements/ n AFFIDAVIT n BOND

Purpose

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Preliminary attachment is designed to: Seize the property of the debtor before final judgment and put the same in custodia legis even while the action is pending for the satisfaction of a later judgment; To enable the court to acquire jurisdiction over the res of the action in cases where service in person or any other service to acquire jurisdiction over the defendant cannot be effected.

Lim v. Lazaro, G.R. No. 185734, 3 July 2013

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Attachment lien continues until the debt is paid, or the sale is had under execution issued on the judgment or until the judgment is satisfied, or the attachment discharged or vacated in the same manner provided by law. Facts: The creditor obtained a writ of attachment over the properties of the debtor. In the course of the trial between the creditor and the debtor, a compromise agreement was reached and approved by the court. The debtor then moved for the lifting of the attachment, which the court granted. ISSUE: WON the writ of preliminary attachment was properly lifted. HELD: NO. Although the compromise agreement had already been approved, the obligations thereunder have yet to be fully complied with, particularly the payment of the total compromise amount. Since the debt remains unpaid, the attachment should have continued to subsist.

Torres v. Satsatin, G.R. No. 166759, 25 November 2009

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The grant of the provisional remedy of attachment involves three stages: first, the court issues the order granting the application; second, the writ of attachment issues pursuant to the order granting the writ; and third, the writ is implemented. For the initial two stages, it is not necessary that jurisdiction over the person of the defendant be first obtained. However, once the implementation of the writ commences, the court must have acquired jurisdiction over the defendant, for without such jurisdiction, the court has no power and authority to act in any manner against the defendant. Any order issuing from the Court will not bind the defendant.

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Thus, it is indispensable not only for the acquisition of jurisdiction over the person of the defendant, but also upon consideration of fairness, to apprise the defendant of the complaint against him and the issuance of a writ of preliminary attachment and the grounds therefor that prior or contemporaneously to the serving of the writ of attachment, service of summons, together with a copy of the complaint, the application for attachment, the applicants affidavit and bond, and the order must be served upon him.

Can the order granting a writ of attachment be subject of an appeal? n

Olsen vs Olsen 48 SCRA 238 – n An order denying a motion for the annulment of a preliminary attachment may be reviewed in an appeal taken from the final judgment rendered in the principal case; thus: n the order of the judge denying a motion for annulment of a writ of preliminary attachment, being of an incident or interlocutory and auxiliary character, cannot be the subject of an appeal independently from the principal case, because our procedural law now in force authorizes an appeal only from a final judgment. n Exception: when the writ of preliminary attachment becomes final by virtue of a final judgment rendered in the principal case, said writ is subject to review jointly with the judgment rendered in the principal case through an ordinary appeal.

Who and When to file, What will they get

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When to file: n At the commencement of the action or n at any time before entry of judgment (before judgment become final and executory) Who could file: n a plaintiff n or any proper party What can these persons do: n They may have the property of the adverse party attached as security for the satisfaction of any judgment that may be recovered

Proper Party

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Borja vs Platon 73 Phil 659 – A writ of preliminary attachment may be issued in favor of a defendant who sets up a counterclaim. n Facts: Petitioner brought a civil action in the CFI to annul a second sale by Francisco de Borja to Romero and to recover damages. Defendant filed an answer with counterclaims. Based on their counterclaims, defendant also applied for a writ of preliminary attachment. Petitioner contends that no writ of attachment can be issued in favor of a defendant who presents a counterclaim. n Issue: whether a defendant who presents a counterclaim can apply for a writ of preliminary attachment. n Ruling: n The SC finds plaintiff s contention without merit. A writ of preliminary attachment may be issued in favor of a defendant who sets up a counterclaim. Under the Rule, a plaintiff or any proper party may have the property of the adverse party attached as security for the satisfaction of any judgment. thus, it is immaterial whether defendants simply presented a counterclaim or brought a separate civil action against plaintiff herein.

Grounds (a) In an action for the recovery of a specified amount of money or damages, other than moral and exemplary, on a cause of action arising from law, contract, quasi-contract, delict or quasi-delict against a party who is about to depart from the Philippines which intent to defraud his creditors; (b) In an action for money or property embezzled or fraudulently misapplied or converted to his own use by a public officer, or an officer of a corporation, or an attorney, factor, broker agent, or clerk, in the course of his employment as such, or by other person in a fiduciary capacity, or for a willful violation of duty; (c) In an action to recover the possession of property unjustly or fraudulently taken, detained or converted, when the property, or any part thereof, has been concealed, removed, or disposed of to prevent its being found or taken by the applicant or an authorized person; (d) In an action 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; (e) In 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; or (f) In an action against a party who does not reside and is not found in the Philippines, or on whom summons may be served by publication.

Grounds (1)

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Grounds (exclusive in nature): In an action for the recovery of n a specified amount of money or n damages, other than moral and exemplary, on a cause of action arising from n law, contract, quasi-contract, delict or quasi-delict against a party n who is about to depart from the Philippines n with intent to defraud his creditors; Professional Video vs TESDA 591 SCRA 83 – n Principle: Funds public in nature cannot be the valid subject of a writ of garnishment proceedings even if the consent to be sued had been previously granted and the state liability adjudged.

Grounds (1)

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Facts: Petitioner PROVI entered into a negotiated contract with TESDA supplying the latter materials for the production Identification Cards. Due to an outstanding unpaid balance, petitioner filed a case with the RTC for the recovery of a sum of money with damages and additionally prayed for a writ of preliminary attachment/garnishment against TESDA. Petitioner contends that TESDA is no longer immune from suit because it entered into a contract in its private capacity. The RTC granted and issued the writ of preliminary attachment against TESDA. TESDA on the other hand moves for the quashal of writ of attachment on the ground that public funds cannot be subject of garnishment and that it entered into the agreement in the performance of its governmental function. ISSUE: whether TESDA s funds be exempt from execution, attachment or garnishment.

Grounds (1)

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HELD: n TESDA s funds are public in character, hence exempt from attachment or garnishment. TESDA s funds are still public in nature and, thus, cannot be the valid subject of a writ of garnishment or attachment. Public funds cannot be the object of garnishment proceedings even if the consent to be sued had been previously granted and the state liability adjudged.

Grounds (1)

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Exceptions: n Funds of public corporations are not exempt from garnishment (PNB v. Pabalan, L-33112, June 15, 1978) n When the government enters into commercial business (PNB v. CIR, L32667, January 1978)

Grounds (1)

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Type of Damages Insular Savings Bank vs CA, 460 SCRA 122 n A writ of attachment cannot be issued for moral and exemplary damages and other unliquidated or contingent claims.

Grounds (2)

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In an action for n money or n property n embezzled or fraudulently misapplied or converted to his own use by a n public officer, n or an officer of a corporation, n or an attorney, n factor, n broker, n agent or n clerk, n in the course of his employment as such, n or by any other person in a fiduciary capacity, n or for a willful violation of duty;

Grounds (2)

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Olsen vs Olsen, 48 Phil 238 Abuse of confidence by a corporate officer shown by his act of taking money of the corporation for his personal use without being duly authorized therefor constitutes a ground for the issuance of a preliminary attachment. Facts: Defendant-appellant Water Olsen was President-Treasurer and general manager of the Plaintiff-appellee corporation (Walter E. Olsen &Co.) and exercised direct and almost exclusive supervision over its function, funds and books of account untile about the month of August, 1921. During that time he has been taking money of the corporation without being duly authorized to do so. He invested some amount in the purchase of the house and lot now under attachment in this case, and in the purchase of some shares of stock for himself and another person. He justified his conduct, alleging that the withdrawal of the funds of the corporation for his personal use was made in his current account with said corporation, in whose treasury he deposited his own money and the certificates of title of his shares, as well as of his estate, and that at the that at the first meeting of the stockholders, a statement of his account with a debit balance was submitted and approved.

Grounds (2)

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Olsen vs Olsen, 48 Phil 238 Abuse of confidence by a corporate officer shown by his act of taking money of the corporation for his personal use without being duly authorized therefor constitutes a ground for the issuance of a preliminary attachment. Issue: whether the facts narrated be a ground for the issuance of a writ of preliminary attachment. Ruling: Yes. The facts narrated falls within sec. 1 (b) rule 57, hence, a writ of preliminary attachment may issue. Furthermore, the defendant appellant has almost an exclusive control over the function of the corporation and its funds on account of his triple capacity as president, treasurer and general manager must be very scrupulous in the application of the funds of said corporation to his own use. The act of taking money of the corporation for his personal use without being duly authorized therefor constitutes such an irregularity that, while it does not amount to a criminal fraud, is undoubtedly a fraud of a civil character, because it is an abuse of confidence and constitutes a ground for the issuance of a preliminary attachment.

Grounds (3)

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In an action n to recover the possession of property n unjustly or n fraudulently taken, n detained or n converted, n when the property, or any party thereof, n has been concealed, removed or disposed of n to prevent its being found or taken n by the applicant or an authorized person;

Grounds (3)

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This ground compared to replevin: In replevin, the objective is to recover the possession of personal property only; That the personal property was WRONGFULLY detained by the adverse party That the personal property has not been placed under custodia legis

Grounds (4)

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In action n against a party n who has been guilty of n a fraud in contracting the debt or n incurring the obligation upon which the action is brought, n or in the performance thereof;

Grounds (4)

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Liberty Insurance Corp vs C, February 23, 2001 – To sustain an attachment on the ground that a party is guilty of fraud in contracting the debt (sec.1(d) Rule 57) to defraud the creditor. The fraud must: n Relate to the execution of the agreement n Must have been the reason which induced the other party into giving consent which he would not have otherwise given n Be committed upon contracting the obligation sued upon To constitute a ground for attachment in Section 1 (d), Rule 57 of the Rules of Court, fraud should be committed upon contracting the obligation sued upon. A debt is fraudulently contracted if at the time of contracting it the debtor has a preconceived plan or intention not to pay.

Grounds (4)

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Ng Wee v. Tankiansee, G.R. No. 171124, February 13, 2008 n Fraud is never presumed. n For a writ of attachment to issue under this rule, the applicant must sufficiently show the factual circumstances of the alleged fraud because fraudulent intent cannot be inferred from the debtor s mere non-payment of the debt or failure to comply with his obligation. The applicant must then be able to demonstrate that the debtor has intended to defraud the creditor.

Grounds (4)

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FCY Construction Group, Inc. v. Court of Appeals, 381 Phil. 282 (2000). n A cursory reading of the above-cited testimony, however, readily shows that said reassurance from the DPWH officials came, not at the inception of the obligation or contract, but during its performance. On the other hand, the fraud of which petitioners are accused of and which was the basis for the issuance of the questioned attachment, is fraud alleged to have been committed upon contracting the obligation sued upon. Thus, petitioners argument that "the inducement was the mouth-watering temptation of a DPWH promise of a 'new project after the Tandang Sora Flyover project will be finished"' is clearly off-tangent as such inducement, if any, came not at the inception of the obligation.

Grounds (4)

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Fondation Specialists v. Betonval. n Mere failure to pay its debt is, of and by itself, not enough to justify an attachment of the debtors properties. A fraudulent intention not to pay (or not to comply with the obligation) must be present.

Grounds (4)

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Metro, Inc. v. Lara, 381 Phil. 282 (2000). The rule that when the writ of attachment is issued upon a ground which is at the same time the applicants cause of action, the only other way the writ can be lifted or dissolved is by a counter-bondis applicable in this case. It is clear that in respondents amended complaint of fraud is not only alleged as a ground for the issuance of the writ of preliminary attachment, but it is also the core of respondents complaint. The fear of the Court of Appeals that petitioners could force a trial on the merits of the case on the strength of a mere motion to dissolve the attachment has a basis.

Grounds (4)

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Republic v. Estate of Lim. Given the foregoing pronouncement from the Sandiganbayan, the Court is completely at a loss to understand the graft courts denial of the Republics plea for the ancillary remedy of preliminary attachment. The wrongful actthe fraud perpetuated by Lim Sr. and/or his corporations on the Republicis written over or easily deducible from the adverted Maceda decision and Exhibit E. While fraud cannot be presumed, it need not be proved by direct evidence and it can well be inferred from attendant circumstances.Withal, we cannot but agree with the Republics contention that the Sandiganbayans denial of its motion for a writ of preliminary attachment constitutes grave and patent abuse of discretion amounting to lack or excess of jurisdiction.

Grounds (5)

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In an action against a party n who has removed or n dispose of his property n or is about to do so, n with intent to defraud his creditors;

Grounds (5)

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Aboitiz vs Cotabato, 105 SCRA 88 Insolvency is not a proper ground for issuance of a writ of attachment. Facts: A verified complaint was filed by petitioner Abotiz for the collection of money with a corresponding writ of preliminary attachment. The writ of attachment was issued by the trial court on the ground that the defendant has removed or disposed of its properties or assets, or is about to do so, with intent to defraud its creditors. But the SC found out that insolvency is the ground for the issuance of the writ of attachment which can be inferred form the emphasis laid by petitioner particularly from the bank account which has been reduced to nil (zero). The trial court issued the writ of attachment. The appellate court declared the writ of attachment null and void. Issue: whether the issuance of writ of attachment is proper.

Grounds (5) n n

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Aboitiz vs Cotabato, 105 SCRA 88 Insolvency is not a proper ground for issuance of a writ of attachment. The SC court denied the petition, saying: Insolvency is not a proper ground for issuance of a writ of attachment. The facts of the case do not warrant the issuance of the writ of attachment. It is an undisputed fact that, as averred by petitioner itself, the several buses attached are nearly junks. However, upon permission by the sheriff, five of them were repaired, but they were substituted with five buses which were also in the same condition as the five repaired ones before the repair. This cannot be the removal intended as ground for the issuance of a writ of attachment under sec.1(e), Rule 57 of the Rules of Court. The repair of the five buses was evidently motivated by a desire to serve the interest of the riding public, clearly not to defraud its creditors, as there is no showing that they were not put on the runt after their repairs, as was the obvious purpose of their substitution to be place in running condition.

Grounds (6)

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In an action against a party n who does not reside and n is not found in the Philippines, or n on whom summons may be served by publications.

Grounds (6) Miailhe vs De Lencquesaing 142 SCRA 694 n Sec.1 (f) of Rule 57 of the Rules of court applies where plaintiff s claim is for liquidated damages, not to unliquidated damages. n Facts: Petitioner Alian filed a complaint against respondent Elaine, for damages and attorneys fees allegedly sustained by him by reason of the filing by respondent of the criminal complaint for estafa, solely for the purpose of embarrassing his honor and reputation. In the complaint, petitioner prayed for the issuance of a writ of preliminary attachment of the properties of respondent on the ground that respondent is a non-resident of the Philippines. Respondent move to dissolve or lift the writ of attachment on the ground that petitioner s claim was for unliquidated damages. n Issue: whether writ of attachments covers unliquidated damages. n Ruling: n The attachment issued is null and void. Application for attachment on the ground that a party does not reside and is not found in the Philippines or on whom summons may be served by publication, applies where plaintiff s claim is for liquidated damages, not to unliquidated damages.

Grounds (6) Miailhe vs De Lencquesaing 142 SCRA 694 n Sec.1 (f) of Rule 57 of the Rules of court applies where plaintiff s claim is for liquidated damages, not to unliquidated damages. n Facts: Petitioner Alian filed a complaint against respondent Elaine, for damages and attorneys fees allegedly sustained by him by reason of the filing by respondent of the criminal complaint for estafa, solely for the purpose of embarrassing his honor and reputation. In the complaint, petitioner prayed for the issuance of a writ of preliminary attachment of the properties of respondent on the ground that respondent is a non-resident of the Philippines. Respondent move to dissolve or lift the writ of attachment on the ground that petitioner s claim was for unliquidated damages. n Issue: whether writ of attachments covers unliquidated damages. n Ruling: n The attachment issued is null and void. Application for attachment on the ground that a party does not reside and is not found in the Philippines or on whom summons may be served by publication, applies where plaintiff s claim is for liquidated damages, not to unliquidated damages.

Sec.2. Issuance and contents of order –

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How writ of attachment issued: An order of attachment may be issued either n ex parte or n upon motion with notice and hearing. Who issues a writ of attachment: n By the court in which the action is pending n By the court of appeals, or n By the Supreme Court

What are the contents of the order of attachment: n

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Require the sheriff to attached: n The property in the Philippines of the party against whom the order is issued, n not exempt from execution, n sufficient to satisfy the applicant s demand Properties exempt from execution: n Public funds n Family home n Professional libraries not exceeding the value of 300,000 n And those mentioned in sec.13 rule 39 of the rules of court The sheriff may not attach the property if: n the adverse party makes deposits or n gives a bond in amount equal to that fixed in the order, exclusive of cost.

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Toledo vs Burgos 168 SCRA 513 n There is no need for a judge to set a hearing on the application for a writ of attachment because the issuance of a writ of preliminary attachment may be made by the Court ex parte. Moreover, the judge before whom the application is made has full discretion in considering the supporting evidence proferred by the applicant. n Facts: n An action for delivery of personal property was filed by petitioner against respondent but was subsequently denied. Petitioner, subsequently applied for a writ of attachment alleging that respondent has removed and has deposed or is about depose of her property within intent to defraud Toledo petitioner herein. To support the allegation, an affidavit of Rudolfo Inot was attached to the application stating that respondent offered to sell to him 2 motor vehicles. The Trial Court Judge denied the application without prior hearing and notice. n

Issue: Whether the denial of the application is proper.

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Respondent Judge acted correctly in denying petitioner s Application for Issuance of a Writ of Preliminary Attachment. There was no need for him to set a hearing on the said application. This is because the issuance of a writ of preliminary attachment may be made by the Court ex parte.

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Davao Light vs CA, 204 SCRA 343 n Attachment may be issued ex parte and even before summons is served upon the defendant. However, the writ may not be enforced unless preceded by a service of summons upon the defendant. Implementation of a writ of attachment without the required jurisdiction over his person is null and void.

Sec.3. Affidavit and bond required –

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Requirement before the issuance of an order of a writ of attachment by the court: n Affidavit n of the applicant, or n of some other person who personally knows the facts n Bond n conditioned to recompense the adverse party all the costs of litigation and all damages which he may sustain by reason of the attachment, if the court shall finally adjudge that the applicant was not entitled thereto.

Contents of the affidavit:

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That a sufficient cause of action exists The case is one of those mentioned on the grounds No other sufficient security for the claim sought to be enforced by the action That the amount due to the applicant, or the value of the property the possession of which he is entitled to recover, is as much as the sum for which the order is granted above all legal counterclaims

Bonds required under attachment:

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Attachment or applicants bond n For the issuance of the writ of PA n Executed to the adverse party n In the amount fixed by the court n The bond shall answer for all damages incurred by the party against whom the attachment is issued and sustained by him by reason of the attachment, If it be finally adjudged that the party applying for attachment was not entitled thereto.

Bonds required under attachment:

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Counter-bond n Executed to the applicant n In an amount equal to the bond fixed by the court in the order of attachment, or to the value of the property attached, exclusive of cost n Purpose: n Shall secure the payment of the any judgment that the attaching party may recover in the action. n To discharge attachment

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PBC vs CA, 352 SCRA 616 n An order of attachment cannot be issued on a general averment, such as one ceremoniously quoting from a pertinent rule. n Rules on the issuance of a writ of attachment must be construed strictly against the applicant.

Sec.4. Condition of applicant s bond –

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The party applying for the order must thereafter give a bond executed to the adverse party in the amount fixed by the court in its order granting the issuance of the writ, conditioned that the latter will pay all the costs which may be adjudged to the adverse party and all damages which he may sustain by reason of the attachment, if the court shall finally adjudge that the applicant was not entitled thereto.

Republic v. Garcia, G.R. No. 167741, 12 July 2007

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The issuance of a writ of preliminary attachment is conditioned on the filing of a bond unless the applicant is the State. Where the State is the applicant, the filing of the attachment bond is excused.

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The attachment bond is contingent on and answerable for all costs which may be adjudged to the adverse party and all damages which he may sustain by reason of the attachment should the court finally rule that the applicant is not entitled to the writ of attachment. Thus, it is a security for the payment of the costs and damages to which the adverse party may be entitled in case there is a subsequent finding that the applicant is not entitled to the writ. The Republic of the Philippines need not give this security as it is presumed to be always solvent and able to meet its obligations.

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Carlos vs Sandoval, 471 SCRA 266 n This bond answers for all damages incurred by the party against whom that attachment was issued and sustained by him by reason of the attachment, if it shall be finally adjudged that the party applying for attachment was not entitled thereto.

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Sec.5. Manner of attaching property – n When can the sheriff enforce a writ of preliminary attachment – n After summons have been duly served upon the person of the defendant; otherwise the implementation is null and void n It presupposes from the situation that an order of writ has been issued to, received by, the sheriff, together with the complaint and application for attachment

How should the sheriff implement the writ:

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Shall without delay and with all reasonable diligence attach only the property of the adverse party that are: n In the Philippines n Not exempt from execution n Sufficient to satisfy the claim

How should the sheriff implement the writ:

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The sheriff will not attach if the adverse party: n Makes a deposit with the court from which the writ is issued in the amount equal to the bond fixed by the court, exclusive of cost, or n Gives a counter-bond executed to the applicant in the amount equal to the value of the property to be attached, exclusive of costs.

How should the sheriff implement the writ:

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(sec.6. Sheriff s return) after enforcing the writ, the sheriff must: n Without delay make a return to the court which issued the writ n The return shall have a full statement of: n Proceedings under the writ n Complete inventory of the property attached n Any counter-bound given by the adverse party n The sheriffs shall serve copies of the return on the applicant

No Summons, No implementation of attachment n

The requirement of prior or contemporaneous service of summons shall not apply where: n The summons could not be served personally or by substituted service of summons despite diligent efforts; n Personal service – by handing a copy thereof to the defendant in person or if he refuses to receive and sign for it, by tendering it to him n Substituted service – by leaving copies of the summons at the defendant s residence with some person of suitable age and discretion then residing therein, or by leaving a copies at defendant s office or regular place of business with some competent person in charge thereof; if for justifiable causes, the defendant cannot be served within reasonable time n

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The defendant is a resident of the Philippines temporarily absent therefrom Defendant is a non-resident of the Philippines Action is one in rem or quasi-in rem

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Sec.6. Sheriff s return – n After enforcing the writ, the sheriff must without delay make a return to the court from which the writ issued n The return shall include: n Full statement of his proceedings n Complete inventory of the property attached n Any counter-bond given by the party against whom attachment is issued n The sheriff shall serve copies of the return on the applicant

Spouses Tiu v. Villar, A.M. No. P-11-2986, 13 June 2012

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By law, sheriffs are obligated to maintain possession of the seized properties absent any instruction to the contrary. In this case, the writ of preliminary attachment authorizing the trial court to legally hold the attached items was set aside by the RTC Order dated July 8, 2010 specifically ordering Sheriff Villar to immediately release the seized items to Spouses Tiu. Pertinently, Rule 57, Section 19 of the Rules of Civil Procedure provides: SEC. 19. Disposition of attached property where judgment is for party against whom attachment was issued.If judgment be rendered against the attaching party, all the proceeds of sales and money collected or received by the sheriff, under the order of attachment, and all property attached remaining in any such officers hands, shall be delivered to the party against whom attachment was issued, and the order of attachment discharged.

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The instruction of the trial court was clear and simple. Sheriff Villar was to return the seized properties to Spouses Tiu. He should have followed the courts order immediately. He had no discretion to wait for the finality of the courts order of dismissal before discharging the order of attachment. Nevertheless, Sheriff Villar showed no deliberate defiance of, or disobedience to, the courts order of release. Records show that he took the proper step under the circumstances. He filed with the trial court his Sheriffs Report with Urgent Prayer for the Issuance of a Clarificatory Order. The Court perceives nothing amiss in consulting the judge before taking action on a matter of which he is not an expert.

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Sec.7. Attachment of real and personal property; recording thereof – n How attachment of the following shall be made: n Real property n Personal property capable of manual delivery n Debts and credits n Interest in estate of decedent

Real Property –

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Includes the following: n Those upon the record of the registry of deeds in the name of adverse party n Growing crops or any interest thereon n Those not appearing at all upon the records, or n belonging to the adverse party and held by any other person, or n standing on the records of the registry of deeds in the name of any other person

Real Property –

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Manner of attaching: n By filing a copy of the order, description of the property attached, and a notice that it is attached with the REGISTRY OF DEEDS; and n By leaving a copy of such order, description, and notice with the OCCUPANT of the property, if any, or with such other person or his agent if found within the province. If the property subject to attachment has been brought under the operation of either LAND REGISTRATION ACT or PROPERTY REGISTRATION DECREE: n The NOTICE shall contain a reference to the number of: n The certificate of title, volume and page in the registration book where the certificate is registered, and the registered owner or owners thereof

Personal Property n

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Capable of manual delivery n By taking and safely keeping it in his (sheriff) custody, after issuing the corresponding receipt therefor STOCKS and SHARES of any corporation or company n By leaving WITH the PRESIDENT and MANAGING AGENT: n a copy of the order and n notice, that such STOCK or Interest of the adverse party is attached DEBTS and CREDITS n Bank deposits n Financial interest n Royalties n Commission and other personal property not capable of manual delivery n By leaving WITH the person owing such debts, or in his possession or under his control, such credits or other personal property, or with his agent: n A copy of the writ, and n Notice that the debts owing by him to the party against whom attachment is issued and the credits and other personal property in his possession, or under his control, belonging to said party, are attached

Personal Property Effects of attaching:

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The third person having in their possession and control of the credits and any other similar property belonging to the party whom attachment is issued, SHALL BE LIABLE to the APPLICANT for the amount of such credits, debts or other similar personal property, UNTIL: The attachment is discharged, or Any judgment is satisfied n The third person in possession and control of the property not capable of manual delivery belonging to the party whom attachment is issued is NO LONGER liable to the applicant WHEN: n Such property is delivered or transferred, or such n Debts are paid, to the clerk, sheriff, or other proper officer of the court issuing the attachment

Interest in Estate of Decedent

n

n

By serving the EXECUTOR or ADMINISTRATOR or other PERSONAL REPRESENTATIVE of the decedent with a copy of the writ and notice that said interest is attached; And By filing a copy of such order and notice with the OFFICE of the CLERK of COURT (clerk of the probate court) in which said estate is being settled; and notice shall be served upon the heir, legatee, or devisee

Bar question:

n n

n

If the property sought to be attached is in CUSTODIA LEGIS – By filing a copy of the writ with the PROPER COURT, or QUASIJUDICIAL agency, and And By SERVING the notice of attachment upon the custodian of such property.

Interest in Estate of Decedent Effects of attaching:

n

SHALL not impair the powers of the executor, administrator, or other personal representative of the decedent over such property for the purpose of administration

n

In case where a petition for distribution is filed, the court where such petition is filed may award the distribution to the HEIR, LEGATEE, or DEVISEE, but the PROPERTY ATTACHED shall be ORDERED delivered to the SHERIFF making the levy, subject to the claim of such heir, legatee or devisee or any person claiming under him

Examination of Party

n

n

n

Sec.10. Examination of party whose property is attached and persons indebted to him or controlling his property; delivery of property to sheriff – n Who are the persons may be required to attend for examination on oath: n any person owing debts to the party whose property attached n any person having in his possession or under his control any creditor or other personal property belonging to the adverse party n the party whose property is attached Before whom should they appear? n before the court in which the action is pending n before a commissioner appointed by the court purpose of appearance: n purpose of giving information respecting the property concerned and the testimony shall be under oath

Examination of Party

n

The court may order personal property capable of manual delivery belonging to adverse party, in the possession of a third person who is require to attend before the court, TO BE DELIVERED to the CLERK OF COURT or SHERIFF on such terms as may be just, having reference to any lien thereon or claim against the same, to await judgment in the action.

Sale of attached property

n

n

n

n

What are the attached Properties that can be sold: n perishable ones n those that the interest of all parties to the action will be subserved by the sale thereof when can it be sold: n after levy and before entry of judgment; and n upon hearing with notice to both parties who orders for the sale of the attached property n the court in which the action is pending how is it sold: n the court may order such property to be sold at PUBLIC AUCTION in such manner as it may direct, and the proceeds of such sale to be deposited in court to abide the judgment in the action.

Sale of attached property

n

II. After Entry of Judgment sec.15 (judgment has become final and executory) – n Judgment is in favor of the attaching party and execution is issued thereon, the sheriff may cause the judgment to be satisfied out of the property attached.

Sale of attached property n

How judgment satisfied: n in case there has been a public auction before entry of judgment: n

n

in case there is a remaining balance due n

n

by selling so much of the property, real or personal, as may be necessary to satisfy the balance, if enough for that purpose remain in the sheriff s hands, or in those of the clerk of court

in case property is in the possession and control of third person n

n

n

By paying to the judgment oblige the proceeds of all sales of perishables or other property sold in pursuance of the order of the court, or so much as shall be necessary to satisfy the judgment

by collecting from all persons having in possession credits belonging to the judgment obligor, or owing debts to the latter at the time of the attachment of such credits or debts, n the amount of such credits and debts as determined y the court in the action, and stated in the judgment and paying the proceeds of such collection over the judgment oblige

Note: the sheriff shall forthwith make a return in writing to the court of his proceedings and furnish parties with copies thereof.

Sec.16. Balance due collected upon an execution;

n

The sheriff must proceed to collect such balance as upon ordinary execution, if: n any balance shall remain due n after realizing upon all the property attached, including the proceeds of any debts or credits collected, and n applying the proceeds to the satisfaction of the judgment, less the expenses of proceedings upon the judgment.

Sec.16. Balance due collected upon an execution;

n

excess delivered to judgment obligor n The sheriff shall, upon reasonable demand, must return to the judgment obligor n the attached property remaining in his hands, and n any proceeds of the sale of the property attached not applied to the judgment whenever judgment shall have been paid.

Discharge of attachment – requires notice and hearing

n

n

Period to file a motion to discharge and corresponding grounds: n before or after levy or even after the release of the attached property upon the following grounds (sec.13): n writ of attachment was n improperly or irregularly issued or enforced n applicant s bond is insufficient and defect is not cured n attachment is excessive and defect is not cured Party who should file: n the party whose property has been ordered attached

Discharge of attachment – requires notice and hearing

n

n

after a writ of attachment is enforced upon (sec.12): n making a cash deposit in an amount equal to that fixed by the court in the order of attachment or equal to the value of the property as determined by the court. n filing a counter-bond in an amount equal to that fixed by the court in the order of attachment, or equal to the value of the property as determined by the court. Party who should file the motion: n the party whose property has been attached, or n the person appearing on his behalf

Discharge of attachment – requires notice and hearing

n

Before whom should the motion be filed: n the motion shall be filed with the court in which the action is pending

Sec.12. discharge of attachment upon giving counter-bond

n

n

n

when to file a motion to discharge of attachment upon counterbond n after a writ of attachment is enforced who may move for the discharge of attachment wholly or in part n the party whose property has been attached, or n the person appearing on his behalf The court shall, after due notice and hearing, order the discharge of the attachment if the movant makes a cash deposit, or files a counterbond executed to the attaching party with the clerk of the court where the application is made.

Sec.12. discharge of attachment upon giving counter-bond

n

n

How much should the amount of the counter-bond n In an amount equal to that fixed by the court in the order of attachment, exclusive of cost n If the attachment is sought to be discharged with respect to a particular property, the counter-bond shall be equal to the value of that property as determined by the court. purpose of the cash deposit or the counter-bond n shall secure the payment of any judgment that the attaching party may recover in the action

Sec.12. discharge of attachment upon giving counter-bond Upon the discharged of an attachment, the property attached, or the proceeds of any sale thereof, shall be delivered to the party making the deposit or giving the counter-bond, or to the person appearing on his behalf. When can the attaching party may apply for new order of attachment n The counter-bound for any reason be found to be, or become insufficient and the party furnishing the same fail to file an additional counter-bond n

n

Sec.12. discharge of attachment upon giving counter-bond

n

Insular Savings vs CA, 460 SCRA 122 n Issue: Whether the denial of the motion to discharge attachment over secured portion is proper. n The denial of the motion to discharge attachment is not proper. If a portion of a claim is already secure, there is no justifiable reason why such portion should still be subject of counter-bond – simple common sense, if not consideration of fair play, dictates that a part of a possible judgment that has veritably been preemptively satisfied or secured need not be covered by the counter-bond.

Sec.12. discharge of attachment upon giving counter-bond n n

GB inc vs Sanchez 98 Phil 886 The merits of the main action are not triable in a motion to discharge an attachment; otherwise an applicant for the dissolution could force a trial of the merits of the case on this motion. n Facts: Respondent Chuidian secured a loan from Juan Luna Subdivision, Inc. and promised, under an agreement to sell , to transfer within 60 days to Juan Luna Subdivision, Inc. the land which he bought from one Florence Shuter. Instead of conveying the land, respondent sold the same to Elenita Hernandez for 25,000 in order to pay his wife s gambling debt. n

n n

Now, petitioner filed a complaint against respondent Chuidian for the collection of his indebtedness based on his Agreement to Sell with a prayer asking for the issuance ex parte of a writ of preliminary attachment on the ground that: Respondent converted to his own use the land which he bought in a fiduciary capacity Guilty of fraud in contracting his debt and incurring the obligations upon which the action is brought

n

Subsequently, the court granted a ex parte writ of preliminary attachment.

n

Before the issues have been joined (respondent not having as yet filed his answer to the complaint), respondent filed a motion to discharge attachment on the ground that the attachment was improperly issued. After hearing of the motion to discharge attachment, respondent Judge issued an order granting respondent s motion to discharge attachment.

Sec.12. discharge of attachment upon giving counter-bond n n

GB inc vs Sanchez 98 Phil 886 The merits of the main action are not triable in a motion to discharge an attachment; otherwise an applicant for the dissolution could force a trial of the merits of the case on this motion. n

Issue: whether the respondent judge correct in granting the motion to discharge attachment.

n

Ruling: The judge is not correct in granting the motion to discharge attachment. In the case at bar the hearings of motion to discharge attachment were held before the issues have been joined (respondent not having yet filed his answer to the complaint), and the order issued thereby discharging the attachment would have the effect of deciding or prejudicing the main action.

n

The merits of the main action are not triable in a motion to discharge an attachment, otherwise an applicant for the dissolution could force a trial of the merits of the case on this motion.

Recovery upon the counter bond –

n

n

when the judgment has become executory n the surety or sureties on any counter-bond given to secure the payment of the judgment shall: n become charged on such counter-bond, and n bound to pay the judgment oblige upon demand amount due under the judgment When shall the amount of counter-bond be recovered from the surety: n after notice and summary hearing in the same action.

Recovery upon the counter bond –

n n

II. On Other Grounds Sec.13. Discharge of attachment on other grounds – requires notice and hearing n Period to file a motion to discharge: n before or after levy n or even after the release of the attached property n

Where to file: n to the court in which the action is pending

n

Who may file: n the party whose property has been ordered attached

Recovery upon the counter bond –

n

grounds for an order to set aside or discharge the attachment: n the attachment was improperly or irregularly issued or enforced and the defect is not cured n the applicant s bond is insufficient and the defect is not cured n attachment is excessive and the defect is not cured n if the attachment is excessive, the discharge shall be limited to the excess n

Note: there shall be due notice and hearing before the court shall order the setting aside or the corresponding discharge of the attachment if it appears that it was improperly or irregularly issued or enforced, or that the bond is insufficient, or that the attachment is excessive, and the defect is not cured forthwith.

Recovery upon the counter bond –

n

Can the attaching party file a counter-affidavit to oppose the discharge? n Yes. Under the rules, if the motion to discharge be made on affidavits, the attaching party may oppose the motion by counter-affidavits or other evidence in addition to that on which the attachment was made.

Third party Claim

n n

Sec.14. Proceedings where property claimed by third person – If the property attached is claimed by any person other than the party against whom attachment had been issued or his agent, Such THIRD Person shall: n make an AFFIDAVIT n Serve such affidavit upon the sheriff while the latter has possession of the attached property n serve a copy thereof upon the attaching party n

the Affidavit shall contain: n title to the property or right to the possession thereof n grounds of such right or title

Third party Claim

n

Upon receipt, the sheriff shall not be bound to KEEP the property under attachment, UNLESS: n the attaching party or his agent, on demand of the sheriff, shall file a BOND to indemnify the third-party claimant

Third party Claim

n

Amount and purpose of the bond: n the bond must be approved by the court to indemnify the third party claimant n the bond should in a sum NOT LESS THAN the value of the property levied upon n In case of disagreement as to such value, the same shall be decided by the court issuing the writ of attachment. n NOTE: No claim for damages for the taking or keeping of the property may be enforced against the bond unless the action (for claim of damages) thereof is filed within 120 days from the date of the filing of the bond.

Third party Claim

n

Sheriff shall not be liable for damages for taking or keeping if: n bond is filed n however, nothing shall prevent such claimant or any third person from vindicating his claim to the property, or prevent the attaching party from claiming damages against a third-party claimant who filed a frivolous or plainly spurious claim, in the same or a separate action. n

n n

when the writ of attachment is in favor of the RP, or any duly officer representing it; in the above situation, the filing of such bond is not be required; and in case the sheriff is sued for damages as a result of attachment, HE SHALL be represented by the Solicitor General, and if held liable therefore, the actual damages adjudged by the court shall be paid by the National Treasure out of the funds to be appropriated for the purpose.

Rural Bank of Sta. Barbara v. Manila Mission of Church of Jesus Christ, August 19, 2009 n

The filing by respondent of the Motion to Release Property from Attachment was made on the advice of the Sheriff upon whom respondent served its Affidavit of Title and Ownership. Respondent should not be faulted for merely heeding the Sheriffs advice. Apparently, the Sheriff, instead of acting upon the third-party claim of respondent on his own, would rather have some direction from the RTC. Indeed, the Sheriff is an officer of the RTC and may be directed by the said court to allow the third-party claim of respondent. Therefore, the filing of the Motion in question can be deemed as a mere continuation of the third-party claim of respondent, in the form of its Affidavit of Title and Ownership, served upon the Sheriff, in accord with the first paragraph of Section 14, Rule 57 of the Rules of Court.

n n

Alternatively, we may also consider the Motion to Release Property from Attachment, filed by respondent before the RTC, as a Motion for Intervention in Civil Case No. D-10583, pursuant to the second paragraph of Section 14, Rule 56, in relation to Rule 19 of the Rules of Court. Respondent, to vindicate its claim to the subject property, may intervene in the same case, i.e., Civil Case No. D-10583, instituted by petitioner against the spouses Soliven, in which the said property was attached. Respondent has the personality to intervene, as it is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof.[if !supportFootnotes][5][endif] The RTC, in acting upon and granting the Motion to Release Property from Attachment in its Order dated 9 October 1995, is deemed to have allowed respondent to intervene in Civil Case No. D-10583.

Disposition

n

n

n

Situation: the party against whom attachment is issued deposited money instead of giving a counter-bond. If judgment rendered in favor of the attaching party: n the money deposited shall be applied under the direction of the court to the satisfaction of the judgment rendered n and after satisfying the judgment the balance shall be refunded to the depositor or his assignee. if judgment is in favor of the party against whom attachment is issued: n the whole sum deposited must be refunded to him or his assignee

Disposition

n n

judgment is rendered against the attaching party Obligation of the sheriff: n Shall deliver to the party against whom attachment issued all the proceeds of sales and money collected or received by the sheriff, under the order of attachment, and all property attached remaining in any such sheriff s hands, n And the order of attachment discharged

Sec.20. Claim for damages on account of improper, irregular or excess attachment – n

When to file application for damages: n must be filed before the trial, or n must be filed before appeal is perfected; or n before the judgment becomes executory

Sec.20. Claim for damages on account of improper, irregular or excess attachment – n

On what grounds should it be filed: n improper, irregular or excessive attachment n insufficiency and failed to cure the same

Sec.20. Claim for damages on account of improper, irregular or excess attachment – n

Judgment on such application shall not be rendered without: n setting forth the facts showing his right to damages and the amount thereof in the application n notices to the attaching party and his surety or sureties n proper hearing n Compliance thereof, such damages may be awarded only after proper hearing and shall be included in the judgment on the main case.

Sec.20. Claim for damages on account of improper, irregular or excess attachment – n

If the judgment of the appellate court be favorable to the party against whom the attachment is issued, when should he file a claim for it (note: applicable on the grounds of improper, irregular, or excessive attachments): n he must claim damages sustained during the pendency of appeal but before judgment of the appellate court becomes executory by: n filing an application in the appellate court and n giving notice to the attaching party and his surety or sureties n The appellate court may allow the application to be heard and decided by the trial court.

Sec.20. Claim for damages on account of improper, irregular or excess attachment – n

For the grounds of insufficiency of bond or deposit given by the attaching party, the following rule shall be observed: n Nothing shall prevent the party against whom the attachment was issued from recovering in the same action the damages awarded to him from any property of the attaching party not exempt from execution should the bond or deposit given by the latter be insufficient or fail to fully satisfy the award.

Stronghold Insurance Company, Inc. v. Cuenca, G.R. No. 173297, 6 March 2013 n

There is no dispute that the properties subject to the levy on attachment belonged to Arc Cuisine, Inc. alone, not to the Cuencas and Tayactac in their own right. They were only stockholders of Arc Cuisine, Inc., which had a personality distinct and separate from that of any or all of them.42 The damages occasioned to the properties by the levy on attachment, wrongful or not, prejudiced Arc Cuisine, Inc., not them. As such, only Arc Cuisine, Inc. had the right under the substantive law to claim and recover such damages. This right could not also be asserted by the Cuencas and Tayactac unless they did so in the name of the corporation itself. But that did not happen herein, because Arc Cuisine, Inc. was not even joined in the action either as an original party or as an intervenor.

Equitable Banking Corporation v. Special Steel Products, Inc., G.R. No. 175350, 13 June 2012

n

For such wrongful preliminary attachment, plaintiffs may be held liable for damages. However, Equitable is entitled only to such damages as its evidence would allow, for the wrongfulness of an attachment does not automatically warrant the award of damages. The debtor still has the burden of proving the nature and extent of the injury that it suffered by reason of the wrongful attachment.

n

The Court has gone over the records and found that Equitable has duly proved its claim for, and is entitled to recover, actual damages. In order to lift the wrongful attachment of Equitables properties, the bank was compelled to pay the total amount of P30,204.26 in premiums for a counterbond.

n

However, Equitable failed to prove that it sustained damage to its goodwill and business credit in consequence of the alleged wrongful attachment. There was no proof of Equitables contention that respondents actions caused it public embarrassment and a bank run.

Bar 1981 – n

Y is a stockholder of a local corporation. Y owns 20% of the shares of the said corporation. Y defaults on a manufacturing contract with Z. Z sues for specific performance and damages and, on the ground that Y is fleeing from the country to avoid his creditors, seeks to attach 20% of a parcel of land that belongs to the corporation.

n

Can Z secure such an attachment granting that the averments of his petition are sufficient? Reasons.

n n

n

Suggested answer: The attachment cannot be obtained. The property sought to be attached is actually the property of the corporation which is not the defendant in the case. The corporation has a personality separate and distinct from that of its stockholders. Under the rules, a plaintiff or any proper party may have the PROPERTY OF THE ADVERSE PARTY attached as security for the satisfaction of any judgment that may be recovered later.

Bar 1982 – n

Edward filed a complaint for accounting against Liza for accounting of the money received by her as administratix of Edward s hacienda. In his complaint, Edward prayed for preliminary attachment, alleging that Liza was about to depart from the philippines. Attached to the complaint was an affidavit executed by Marilyn to the effect that Liza told her that she, Liza, was planning to leave for Singapore in a few days. If you were the judge, would you grant the prayer for preliminary attachment?

Bar 1982 – Suggested answer: n Not grant the prayer for preliminary attachment. The application should show that the defendant s departure from the Philippines must be with the corresponding intent to defraud the creditors. This fact was not alleged in the application for the issuance of the writ of preliminary attachment. n

Would grant the prayer for preliminary attachment because this would fall under property embezzled by a person in a fiduciary capacity under sec.1(b) of rule 57. Here, intent to defraud need not be shown because the act of Liza is already fraudulent.c

Bar 1983 – n

Daniel Chan owns a house and lot at Forbes Park, Makati, where his wife and children reside, he is the chief executive officer of various family corporation where he owns 20% of the respective capital stocks. These family corporations owe several banks the total sum of 2.5 billion, with Chan as a solidary codebtor.

n

After Chan has carefully manipulated the finances of the family corporations and diverted their funds to his account in a swiss bank, he flees from the philippines and now resident at 127 Rue Duphine, Zurich, Switzerland. The banks concerned now retains the services of Atty. Ramon Castillo for the purpose of filing a suit in the Philippines against Daniel Chan on his obligations as a solidiary co-debtor on the loans of the family corporations. One of the procedural problems facing Atty. Castillo is the method of effecting a valid service of summons upon Daniel Chan, now residing in Switzerland, to enable the Philippine courts to acquire jurisdiction over his person.

n

Describe the remedies and procedure, and the supporting grounds thereof that Atty. Castillo should follow as would enable him to effect a valid service summons on Daniel Chan.

Bar 1983 –

n n

Suggested answer: Atty. Castillo should file an action against Daniel Chan for collection of a sum of money with an application for a writ of preliminary attachment if he has properties in the Philippines. The writ of attachment is required in order to convert the action in personam into an action quasi in rem. In this kind of action, jurisdiction over the person of the defendant is not required. What is required is jurisdiction over the res which could be obtained by the attachment. Summons by publication or other modes of exterritorial service of summons would then be served upon him with leave of court following the procedure under Sec. 15 of Rule 14 of the Rules of court.

Bar 1999 – n

n n

n

n

n

n n

In a case, the property of an incompetent under guardianship was in custodial egis. Can it be attached? Explain. Suggested answer: Yes. Property placed under custodia legis can be attached. Under the rules, (Sec.7, rule 57) if the property sought to be attached is in custodia legis,: A copy of the writ of attachment shall be filed with the proper court or quasi-judicial agency, and Notice of the attachment served upon the custodian of such property May damages be claimed by a party prejudiced by a wrongful attachment even if the judgment is adverse to him? Exlpain. Suggested answer: Yes. Damages may be claimed even by the losing party, where the attachment was improper, irregular or excessive. The claim for damages shall be heard with notice to the adverse party and his surety or sureties. An improper, irregular or excessive attachment is not validated by the fact that the attaching party prevailed in the main action.

Bar 1999; 1975 – kinds of attachment

n n n n

n

n n

n

n

Attachment vs Garnishment vs levy on execution – Attachment and garnishment are distinguished from each other as follows: ATTACHMENT – is a provisional remedy that effects a levy on property of a party as security for the satisfaction of any judgment that may be recovered, the implementation must be preceded by service of summons

GARNISHMENT – is a levy on debts due the judgment obligor or defendant and other credits, including bank deposits, royalties and other personal property not capable of manual delivery under a writ of execution or a writ of attachment. Kind of attachment in which plaintiff seeks to subject either property of the defendant in the hands of a third person called the garnishee, to his claim or the money which said third person owes the defendant Services of summons is not required to bind the garnishee

Bar 1999; 1975 – kinds of attachment

n n

n

Levy on execution – Is a writ issued by the court after judgment by which the property of the judgment obligor is taken into the custody of the court before the sale of the property on execution for the satisfaction of a final judgment. It is the preliminary step to the sale on execution of the property of the judgment debtor

Bar 2000 –

n

JK s Real property is being attached by the sheriff in a civil action for damages against LM. JK claims that he is not party to the case; that his property is not involved in the said case; and that he is the sole or registered owner of the said property. Under the rules of court, what must JK do to prevent the sheriff from attaching his property?

Bar 2000 – n n

Suggested Answer: He may avail of the remedy called terceria by making an affidavit of his title thereto or his right to possession thereof, stating the grounds of such right or title. The affidavit must be served upon the sheriff and the attaching party (sec.16, Rule 57)

n

Upon service of the affidavit upon him, the sheriff shall not be bound to keep the property under attachment except if the attaching party files a bond approved by the court. The sheriif shall not be liable for damages for the taking or keeping of the property, if such bond shall be filed (sec.14, Rule 57)

n

The third party claimant is not precluded under sec.14 of rule 57 from vindicating his claim to the property in the same or in a separate action. Thus, he may file a separate action to nullify the levy with damages resulting from the unlawful levy and seizure. This action may be totally distinct action from the former case.

Bar 1991 –

n

Upon failure of X to pay the promissory note for 100,000 which he executed in favor of Y, the latter filed the complaint for a sum of money with application for the issuance of a writ of preliminary attachment alleging therein that X is about to dispose of his properties in fraud of his creditors.

n

May the court issue the writ immediately upon filing of the complaint and before the service of summons? If service of summons is indispensable before the writ is issued, is hearing on the application necessary? If the writ is issued and X filed a motion to quash the attachment, may the motion be granted ex parte?

n

n

Bar 1991 –

n n

n

n

Suggested Answer The writ may be issued upon the filing of the complaint and even before the service of summons upon the defendant (sec. 1 Rule 57) A hearing on the application is not necessary. The application for the writ need not be heard. It may be issued ex parte. The issuance of summons is not even indispensable before the writ is issued. The motion to quash may not be granted ex part. A hearing is necessary (sec.12,13, rule 57)

Bar 1978 n

X filed a complaint in the CFI against Y for the recovery of a sum of money. X at the same time also prayed for the issuance of an order of preliminary attachment against Y, and included in his affidavit, among others, that Y was disposing of his properties with intent to defraud X. the court immediately issued the writ of preliminary attachment ex parte. Y move to discharge the attachment on the ground that it was irregularly issued, in that Y was not notified at all of such application or about the time and place of the hearing thereof, in gross violation of the Rules and his right to due process of law.

n

As counsel for X prepare an opposition of Y s motion to discharge the attachment.

n

Suggested answer:

n

Y s motion to discharge the attachment must be denied. A writ of preliminary attachment may be issued at the commencement of the action and can be issued ex parte.