Security Bank Corporation vs. Great
Wall Commercial Press Company, Inc., Alfredo Buriel Atienza, Fredino Cheng
Atienza, and Sps. Frederick Cheng Atienza, and Monica Cu Atienza
G.R. No. 219345
Second Division
January 30, 2017
Ponente: Mendoza, J.
Gist:
The 1997 Rules of Court now conspicuously includes the phrase
“in the performance thereof” in Section 1(d) of Rule 57. Hence, the fraud
committed in the performance of the obligation (dolo incidente) is now included as a ground for the issuance of a
writ of preliminary attachment, together with the fraud committed in
contracting an obligation (dolo causante).
Facts:
In May 2013, Security Bank filed a
complaint for Sum of Money (with Application for Issuance of a Writ of
Preliminary Attachment) against respondents Great Wall Commercial Press
Company, Inc. (Great Wall) and its sureties, Alfrefo Buriel Atienza, Fredino Cheng
Atienza and Monica Cu Atienza (respondents), before the RTC. The complaint
sought to recover from respondents their unpaid obligations under a credit
facility covered by several trust receipts and surety agreements. The total
principal amount sought was PHP 10,000,000.00.
After due hearing, the RTC granted
the application for a writ of preliminary attachment of Security Bank, which
then posted a bond in the amount of PHP 10,000,000.00.
On June 2013, respondents filed their
Motion to Lift Writ of Preliminary Attachment Ad Cautelam, claiming that the writ was issued with grave abuse of
discretion based on the following grounds: (1) Security Bank’s allegations in
its application did not show a prima
facie basis therefor; (2) the application and the accompanying affidavits
failed to allege at least one circumstance which would show fraudulent intent
on their part; and (3) the general
imputation of fraud was contradicted by their efforts to secure an approval for
a loan restructure.
On July 2013, the RTC denied
respondents’ motion to lift. Respondents’ motion for reconsideration was
likewise denied.
Respondents filed a petition for certiorari before the CA. The appellate
court lifted the writ of preliminary
attachment. It explained that the allegations of Security Bank were
insufficient to warrant the provisional remedy of preliminary attachment. It
pointed out that fraudulent intent could not be inferred from a debtor’s
inability to pay or comply with its obligations. The CA opined that the
non-return of the proceeds of the sale and/or the goods subject of the trust
receipts did not, by itself, constitute fraud. It held that fraud must be
present at the time of contracting the obligation, not thereafter. Security Bank
moved for reconsideration but its motion was denied by the CA.
Issue:
Whether or not the CA erred in
nullifying the writ of preliminary attachment issued by the trial court
Ruling:
The petition is meritorious. The
Court finds that that Security Bank was able to substantiate its factual
allegation of fraud, particularly, the violation of the trust receipt
agreements, to warrant the issuance of the writ of preliminary attachment.
A writ of preliminary attachment is a
provisional remedy issued upon the order of the court where an action is
pending. Through the writ, the property or properties of the defendant may be
levied upon and held thereafter by the sheriff as security for the satisfaction
of whatever judgment might be secured by the attaching creditor against the
defendant. The provisional remedy of attachment is available in order that the
defendant may not dispose of the property attached, and thus prevent the
satisfaction of any judgment that may be secured by the plaintiff from the
former.
For a writ of preliminary attachment
to issue under Sec. 1(d), Rule 57 of the Rules of Court, the applicant must
sufficiently show the factual circumstances of the alleged fraud. It is settled
that fraudulent intent cannot be inferred from the debtor’s mere non-payment of
the debt or failure to comply with his obligation.
Fraud by its nature is not a thing
susceptible of ocular observation or readily demonstrable physically; it must
of necessity be proved in many cases by inferences from circumstances shown to
have been involved in the transaction in question.
There were violations of the
trust receipt agreements
A trust receipt transaction is one where the entrustee has
the obligation to deliver to the entruster the price of the sale, or if the
merchandise is not sold, to return the merchandise to the entruster. There are,
therefore, two obligations in a trust receipt transaction: the first refers to
money received under the obligation involving the duty to turn it over (entregaria) to the owner of the
merchandise sold, while the second refers to the merchandise received under the
obligation to “return” it (devolvera)
to the owner. The obligations under the trust receipts are governed by a
special law, Presidential Decree (P.D.) No. 115, and non-compliance have
particular legal consequences. The offense punished under P.D. No. 115 is in
the nature of malum prohibitum.
The present case only deals with the civil fraud in the
non-compliance with the trust receipts to warrant the issuance of a writ of
preliminary attachment. A fortiori,
in a civil case involving a trust receipt, the entrustee’s failure to comply
with its obligations under the trust receipt constitute as civil fraud provided
that it is alleged, and substantiated with specificity, in the complaint, its
attachments and supporting evidence.
Fraud in the performance of
the obligation must be
considered
Previously, in the 1964 Rules of
Court, the fraud that justified the issuance of a writ of preliminary
attachment then was only fraud committed in contracting an obligation (dolo causante). When the 1997 Rules of
Civil Procedure was issued by the Court, Section 1(d) of Rule 57 conspicuously
included the phrase “in the performance thereof”. Hence, the fraud committed in
the performance of the obligation (dolo
incidente) was included as a ground for the issuance of a writ of
preliminary attachment.
While the Court finds that Security
Bank has substantiated its allegation of fraud against respondents to warrant
the issuance of writ or preliminary attachment, this finding should not in any
manner affect the merits of the principal case. The writ of preliminary
attachment is only a provisional remedy, which is not a cause of action in
itself, but is merely adjunct to a main suit.
