Civil Procedure: Rule 57 Preliminary Attachment
Posted by Magz
Sec. 1. Grounds upon which attachment may issue. – At the commencement of the action or at any time before entry of judgment, 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 in the following cases:
(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 with 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 any 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.
If prayer for writ of attachment is included in a Complaint, verification in the Complaint is sufficient, separate affidavit is not necessary.
Sec. 2. Issuance and contents of order. – An order of attachment may be issued either ex-parte or upon motion with notice and hearing by the court in which the action is pending, or by the Court of Appeals or the Supreme Court, and must require the sheriff of the court to attach so much of the property in the Philippines of the party against whom it is issued, not exempt from execution, as may be sufficient to satisfy the applicant’s demand, unless such party makes deposit or gives a bond as hereinafter provided in an amount equal to that fixed in the order, which may be the amount sufficient to satisfy the applicant’s demand or the value of the property to be attached as stated by the applicant, exclusive of costs. Several writs may be issued at the same time to the sheriffs of the courts of different judicial regions.
Consolidated Bank and Trust Company v. Court of Appeals
Where the basis for the application of a writ of attachment is embezzlement of money or property committed by a defendant who is an officer of a corporation, a public officer, or an atorney, factor, broker or agent or clerk of the plaintiff, it is not necessary to establish his fiduciary capacity before the writ is granted as such fiduciary capacity is assumed from the nature of his position. it is only when the misappropriation was committed by any other person that his fiduciary relationship with the plaintiff will have to be established. Such relationship does not have to be shown because it suffices that the questioned acts of employing illegal machinations in obtaining enormous credit facilities for the corporation were committed by the officers of UPLFC in the course of their duties and not by “any other person in a fiduciary capacity.”
Sec. 3. Affidavit and bond required. – An order of attachment shall be granted only when it appears by the affidavit of the applicant, or some other person who personally knows the facts, that a sufficient cause of action exists, that the case is one of those mentioned in section 1 hereof, that there is no other sufficient security for the claim sought to be enforced by the action, and 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. The affidavit, and the bond required by the next succeeding section, must be duly filed with the court before the order issues.
K.O. Glass Const. Co., Inc. v. Valenzuela
Held: In pleading for attachment against a foreigner, allegation must not be merely that defendant is a foreigner; there must also be a showing that defendant is about to leave the Philippines with intent to defraud their creditor, or that he is a non-resident alien.
Requisites for issuance of writ of attachment:
1. a sufficient cause of action exists;
2. case is one of those mentioned in Sec 1(a) of Rule 57;
3. there is no other sufficient security for the claim sought to be enforced by the action;
4. the amount due to the applicant for attachment or the value of the property of which he is entitled to recover is as much as the sum for which the order is granted above all legal counterclaims.
Once defendant files a counter-bond, the writ of attachment should be dissolved.
Sec. 4. – Condition of applicant’s bond. – 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.
Bond – undertaking done by the surety that it will pay the damages in case the party guaranteed does not comply with the orders of the court.
Sec. 5. Manner of attaching property. – The sheriff enforcing the writ shall without delay and with all reasonable diligence attach, to await judgment and execution in the action, only so much of the property in the Philippines of the party against whom the writ is issued, not exempt from execution, as may be sufficient to satisfy the applicant’s demand, unless the former makes a deposit with the court from which the writ is issued, or gives a counter-bond executed to the applicant, in an amount equal to the bond fixed by the court in the order of attachment or to the value of the property to be attached, exclusive of costs. No levy on attachment pursuant to the writ issued under section 2 hereof shall be enforced unless it is preceded, or contemporaneously accompanied, by service of summons, together with a copy of the complaint, the application for attachment, the applicant’s affidavit and bond, and the order and writ of attachment, on the defendant within the Philippines.
The requirement of prior contemporaneous service of summons shall not apply where the summons could not be served personally or by substituted service despite diligent efforts, or the defendant is a resident of the Philippines temporarily absent therefrom, or the defendant is a non-resident of the Philippines, or the action is one in rem or quasi in rem.
Oñate v. Abrogar
230 SCRA 181
Held: Writ of preliminary attachment may be validly applied for and granted even before the defendant is summoned or is heard from.
Enforcement of the preliminary attachment is valid even if it preceded the actual service of summons where a previous attempt to serve the summons and the writ of attachment failed due to factors beyond the control of either the plaintiff or the process server.
1. Defendant may put his property beyond the reach of the plaintiff while the latter is trying to serve the summons and the writ anew.
2. Court eventually acquired jurisdiction over the plaintiffs (6 days later).
3. Ease by which a writ of attachment can be obtained is counter-balanced by the ease with which the same can be discharged. To discharge writ of preliminary attachment, defendant simply has to make a cash deposit or post a counter-bond equivalent to the value of the property attached.
Sec. 6. Sheriff’s return. – After enforcing the writ, the sheriff must likewise without delay make a return thereon to the court from which the writ issued, with a full statement of his proceedings under the writ, and a complete inventory of the property attached, together with any counter-bond given by the party against whom attachment is issued, and serve copies thereof on the applicant.
Sec. 7. Attachment of real and personal property; recording thereof. – Real and personal property shall be attached by the sheriff executing the writ in the following manner:
(a) Real property, or growing crops thereon, or any interest therein, standing upon the records of the registry of deeds of the province in the name of the party against whom attachment is issued, or not appearing at all upon such records, or belonging to the party against whom attachment is issued and held by any other person, or standing on the records of the registry of deeds in the name of any other person, 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, or that such real property and any interest therein held by or standing in the name of such other person are attached, and 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. Where the Land Registration Act or the Property Registration Decree, the notice shall contain a reference to the number of the certificate of title, the volume and page in the registration book where the certificate is registered, and the registered owner or owners thereof.
The registrar of deeds must index attachments filed under this section in the names of the applicant, the adverse party, or the person by whom the property is held or in whose name it stands in the records. If the attachment is not claimed on the entire area of the land covered by the certificate of title, a description sufficiently accurate for the identification of the land or interest to be affected shall be included in the registration of such attachment;
(b) Personal property capable of manual delivery, by taking and safely keeping it in his custody, after issuing the corresponding receipt therefor;
(c) Stocks or shares, or an interest in stocks or shares, of any corporation or company, by leaving with the president or managing agent thereof, a copy of the writ, and a notice stating that the stock or interest of the party against whom the attachment is issued is attached in pursuance of such writ;
(d) Debts and credits, including bank deposits, financial interest, royalties, commissions and other personal property not capable of manual delivery, 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 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 in pursuance of such writ;
(e) The interest of the party against whom attachment is issued in the property belonging to the estate of the decedent, whether as heir, legatee, or devisee, 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. A copy of said writ of attachment and of said notice shall also be filed in the office of the clerk of court in which said estate is being settled and served upon the heir, legatee or devisee concerned.
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.
|Properties subject to attachment||Manner of attachment|
Real property, growing crops thereon, any interest in such real property
|File with register of deeds a copy of the order of attachment with notice that it is attached and a description of the property being attachedLeave copy of attachment order, description and notice with the occupant of the property|
|Personal property capable of manual delivery||Serve attachment order, issue receipt for the property being attached and take property in his custody|
|Stocks or shares, interest in such stocks or shares||Leave with president or managing agent copy of the writ and notice that said stocks or shares or any interest therein is attached|
|Debts and credits (bank deposits, financial interest, royalties,commissions)
Other personal property not capable of manual delivery
|Leave with person owing such debts or credits a copy of the writ and a notice that such debts or credits are attached|
Interest of an heir, legatee or devisee in the property of a decedent
|Serve executor or administrator with a copy of the writ and a notice that said interest is attached.File copy of the writ and notice of attachment with clerk of court where estate is being settled.|
Sec. 8. Effect of attachment of debts, credits and all other similar personal property. – All persons having in their possession or under their control any credits or other similar personal property belonging to the party against whom attachment is issued, or owing any debts to him, at the time of service upon them of the copy of the writ of attachment and notice as provided in the last preceding section, 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 recovered by him is satisfied, unless such property is delivered or transferred, or such debts are paid, to the clerk, sheriff, or other proper officer of the court issuing the attachment.
Garnishment – is a species of attachment for reaching any property or credits pertaining or payable to a judgment debtor. It is a forced novation by the substitution of creditors: the judgment debtor, who is the original creditor of the garnishee, is, through the service of the writ of garnishment, substituted by the judgment creditor who thereby becomes creditor of the garnishee. It serves as a warning to a person having in his possession property or credits of the judgment debtor, not to pay the money or deliver the property to the latter, but rather to appear and answer the plaintiff’s suit.
Perla Compania de Seguros, Inc. v. Ramolete
Held: Service of summons upon the person of the garnishee is not necessary to acquire jurisdiction over his person, all that is necessary is the service of the writ of garnishment. Through the service of the writ of garnishment, the person who has in his possession credits belonging to the judgment debtor becomes a “virtual party” to or a “forced intervenor” in, the case and the trial court thereby acquires jurisdiction over his person. Such person is, therefore, bound to comply with all orders and processes of the trial court with a view to the complete satisfaction of the judgment of the court.
Garnishment of third party liability insurance contract may be effected from the moment the insured became liable to the third person for it is also at that moment that the insured acquired an interest in the insurance contract. Such interest may be garnished like any other credit. It is not necessary that the insured has effected payment to the injured third person in order that the obligation of the insurer may arise.
Sec. 9. Effect of attachment of interest in property belonging to the estate of a decedent. – The attachment of the interest of an heir, legatee, or devisee in the property belonging to the estate of a decedent shall not impair the powers of the executor, administrator, or other personal representative of the decedent over such property for the purpose of administration. Such personal representative, however, shall report the attachment to the court when any petition for distribution is filed, and in the order made upon such petition, distribution may be awarded to such 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.
Sec. 10. Examination of party whose property is attached and persons indebted to him or controlling his property; delivery of property to sheriff. – Any person owing debts to the party whose property is attached or having in his possession or under his control any credit or other personal property belonging to such party, may be required to attend before the court in which the action is pending, or before a commissioner appointed by the court, and be examined on oath respecting the same. The party whose property is attached may also be required to attend for the purpose of giving information respecting his property, and may be examined on oath. The court may, after such examination, order personal property capable of manual delivery belonging to him, in the possession of the person so required to attend before the court, to be delivered to the clerk of court of sheriff on such terms as may be just, having reference to any lien thereon or claim against the same, to await the judgment in the action.
Sec. 11. When attached property may be sold after levy on attachment and before entry of judgment. – Whenever it shall be made to appear to the court in which the action is pending, upon hearing with notice to both parties, that the property attached is perishable, or that the interests of all the parties to the action will be subserved by the sale thereof, 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.
Sec. 12. Discharge of attachment upon giving counter-bond. – After a writ of attachment has been enforced, the party whose property has been attached or the person appearing on his behalf, may move for the discharge of the attachment wholly or in part on the security given. The court shall, after due notice and hearing, order the discharge of the attachment if the movant makes a cash deposit, or files a counter-bond executed to the attaching party with the clerk of the court where the application is made an amount equal to that fixed by the court in the order of attachment, exclusive of costs. But 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. In either case, the cash deposit or the counter-bond shall secure the payment of any judgment that the attaching party may recover in the action. A notice of the deposit shall forthwith be served on the attaching party. Upon the discharge of the attachment in accordance with the provisions of this section, 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, the deposit or counter-bond aforesaid standing in place of the property so released. Should such counter-bond for any reason be found to be or become insufficient, and the party furnishing the same fail to file an additional counter-bond, the attaching party may apply for a new order of attachment.
Motion to Discharge cannot be acted upon ex-parte – must be accompanied by hearing.
Sec. 13. Discharge of attachment on other grounds. – The party whose property has been ordered attached may file a motion with the court in which the action is pending, before or after levy or even after the release of the attached property, for an order to set aside or discharge the attachment on the ground that the same was improperly or irregularly issued or enforced, or that the bond is insufficient. If the attachment is excessive, the discharge shall be limited to the excess. If the motion be made on affidavits on the part of the movant but not otherwise, the attaching party may oppose the motion by counter-affidavits or other evidence in addition to that on which the attachment was made. After due notice and hearing, 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.
Peroxide Philippines Corp. v. Court of Appeals
Where the order lifting of the writ of attachment was improperly issued as the attaching creditor was not allowed to oppose the application for the discharge of the attachment by counter-affidavit or other evidence, such order is void and does not have any effect at all to the writ of attachment. The writ continued to be valid from its issuance since the judgment had not been satisfied , nor has there been a valid discharge thereof either by the filing of a counter-bond or for improper or irregular issuance.
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, and such person makes an affidavit of his title thereto, or right to the possession thereof, stating the grounds of such right or title, and serves such affidavit upon the sheriff while the latter has possession of the attached property, and a copy thereof upon the attaching party, the sheriff shall not be bound to keep the property under attachment, unless the attaching party or his agent, on demand of the sheriff, shall file a bond approved by the court to indemnify the third-party claimant in a sum not less than the value of the property levied upon. In case of disagreement as to such value, the same shall be decided by the court issuing the writ of attachment. No claim for damages for the taking or keeping of the property may be enforced against the bond unless the action therefor is filed within one hundred twenty (120) days from the date of the filing of the bond.
The sheriff shall not be liable for damages for the taking or keeping of such property, to any such third-party claimant, if such bond shall be filed. Nothing herein contained 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 separate action.
When the writ of attachment is issued in favor of the Republic of the Philippines, or any officer duly representing it, the filing of such bond shall not be required, and in case the sheriff is sued for damages as a result of the attachment, he shall be represented by the Solicitor General, and if held liable therefor, the actual damages adjudged by the court shall be paid by the National Treasurer out of the funds to be appropriated for the purpose.
Sec. 15. Satisfaction of judgment out of property attached; return of sheriff. – If judgment be recovered by the attaching party and execution issue thereon, the sheriff may cause the judgment to be satisfied out of the property attached, if it be sufficient for that purpose in the following manner:
(a) By paying to the judgment obligee the proceeds of all sales of perishable or other property sold in pursuance of the order of the court or so much as shall be necessary to satisfy the judgment;
(b) If any balance remains due, 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 the court;
(c) By collecting from all persons having in their possession credits belonging to the judgment obligor, or owing debts to the latter at the time of the attachment of such credits or debts, the amount of such credits and debts as determined by the court in the action, and stated in the judgment, and paying the proceeds of such collection over to the judgment obligee.
The sheriff shall forthwith make a return in writing to the court of his proceedings under this section and furnish the parties with copies thereof.
Sec. 16. Balance due collected upon execution; excess delivered to judgment obligor. – If after realizing upon all the property attached, including the proceeds of any debts or credits collected, and applying the proceeds of any debts or credits collected, and applying the proceeds to the satisfaction of the judgment, less the expenses of proceedings upon the judgment, less the expenses of proceedings upon the judgment, any balance shall remain due, the sheriff must proceed to collect such balance as upon ordinary execution. Whenever the judgment shall have been paid, the sheriff, upon reasonable demand, must return to the judgment obligor the attached property remaining in his hands, and any proceeds of the sale of the property attached not applied to the judgment.
Sec. 17. Recovery upon the counter-bond. – When the judgment has become executory, the surety or sureties on any counter-bond given pursuant to the provisions of this Rule to secure the payment of the judgment shall become charged on such counter-bond and bound to pay the judgment obligee upon demand the amount due under the judgment, which amount may be recovered from such surety or sureties after notice and summary hearing in the same action.
Towers Assurance Co. v. Ororama Supermart
In order that the judgment creditor might recover from the surety on the counterbond, it is necessary (1) that execution be first issued against the principal debtor and that such execution was returned unsatisfied in whole or in part; (2) that the creditor made a demand upon the surety for the satisfaction of the judgment; and (3) that the surety be given notice and a summary hearing in the same action as to his liability for the judgment under his counterbond.
Sec. 18. Disposition of money deposited. – Where the party against whom attachment had been issued has deposited money instead of giving counter-bond, it shall be applied under the direction of the court to the satisfaction of any judgment rendered in favor of the attaching party, and after satisfying the judgment the balance shall be refunded to the depositor or his assignee. If the judgment is in favor of the party against whom attachment was issued, the whole sum deposited must be refunded to him or his assignee.
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 officer’s hands, shall be delivered to the party against whom attachment was issued, and the order of attachment discharged.
Sec. 20. Claim for damages on account of improper, irregular or excessive attachment. – An application for damages on account of improper, irregular, or excessive attachment must be filed before the trial or before appeal is perfected or before the judgment becomes executory, with due notice to the attaching party and his surety or sureties, setting forth the facts showing his right to damages and the amount thereof. Such damages may be awarded only after proper hearing and shall be included in the judgment on the main case.
If the judgment of the appellate court be favorable to the party against whom attachment was issued, he must claim damages sustained during the pendency of the appeal by filing an application in the appellate court, with notice to the party in whose favor the attachment was issued or his surety or sureties, before judgment of the appellate court becomes executory. The appellate court may allow the application to be heard and decided by the trial court.
Nothing herein contained 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.
Santos v. Court of Appeals
95 Phil 360
Where a writ of attachment was issued and levied upon a property belonging to a third person not party to the main action, said third person may file a separate action for damages. The rule that recovery of damages on account of the issuance of a writ of attachment cannot be subject of a separate action, is not applicable where damages are sought not because the writ of attachment was illegally or wrongfully issued by the court, but because said writ was caused to levied upon the property of the plaintiff which was not a party in the case where the attachment was issued.
Rule on Third party Claim & §20, Rule 57, important.
Status quo ante – refers to a legal situtation
Preliminary writ of injunction – status quo
Final injunction – change in legal relationship, Bacolod Milling
Grave & irreparable injury – no fair or reasonable orders can be granted by the court
Right in esse and clear for a writ of preliminary mandatory injunction
Reference: University of the Philippines