TOPIC:
Grounds for issuance of preliminary attachment
EQUITABLE
BANKING CORPORATION, PETITIONER, VS. SPECIAL STEEL PRODUCTS, INC. AND AUGUSTO
L. PARDO, RESPONDENTSG.R. No. 175350
FACTS:
In payment
for the purchase of welding electrodes, Interco issued 3 checks payable to the
order of SSPI. Each check was crossed with the notation "account payee
only" and was drawn against Equitable.
Uy,
Interco’s purchasing officer, presented each crossed check to Equitable on the
day of its issuance and claimed that he had good title thereto. He demanded the deposit of the checks in his
personal accounts in Equitable.
Equitable
acceded to Uy's demands on the assumption that Uy, as the son-in-law of Interco's
majority stockholder, was acting pursuant to Interco's orders. The bank also relied on Uy's status as a
valued client.
In October
1991, SSPI reminded Interco of the unpaid welding electrodes, amounting to
P985,234.98. Interco replied that it had already issued three checks payable to
SSPI and drawn against Equitable. SSPI
denied receipt of these checks.
On August
6, 1992, SSPI requested information from Equitable regarding the three
checks. The bank refused to give any
information invoking the confidentiality of deposits.
It was
later determined that Uy, not SSPI, received the proceeds of the three checks
that were payable to SSPI. Thus, 23 months
after the issuance of the three checks, Interco finally paid the value of the
three checks to SSPI, plus a portion of the accrued interests. Interco refused to pay the entire accrued
interest of P767,345.64 on the ground that it was not responsible for the
delay. Thus, SSPI was unable to collect
P437,040.35 in interest income.
SSPI and
its president, Pardo, filed a complaint for damages with application for a writ
of preliminary attachment against Uy and Equitable Bank.
In support
of their application for preliminary attachment, the plaintiffs alleged that
the defendants are guilty of fraud in incurring the obligation upon which the
action was brought and that there is no sufficient security for the claim
sought to be enforced in this action.
The trial court
granted plaintiffs' application. It issued the writ of preliminary attachment
on September 20, 1993, upon the filing of plaintiffs' bond.
Upon
Equitable's motion and filing of a counter-bond, however, the trial court
eventually discharged the attachment against it.
The trial
court ruled in favour of SSPI and Pardo. Equitable’s counter-claim for wrongful
attachment, however, was dismissed by the trial court for lack of factual and
legal basis.
ISSUE:
Whether the
attachment of Equitable’s personal properties were wrongful
RULING:
WHEREFORE,
premises considered, the Petition is PARTIALLY GRANTED. The assailed October 13, 2006 Decision of the
Court of Appeals in CA-G.R. CV No. 62425 is MODIFIED by:
1. REDUCING
the award of actual damages to respondents to the rate of 6% per annum of the
value of the three checks from July 1991 to June 1993 or a period of
twenty-three months;
2. REDUCING
the award of moral damages in favor of Augusto L. Pardo from P3,000,000.00 to P
50,000.00; and
3.
REVERSING the dismissal of Equitable Banking Corporation's cross-claim against
Jose Isidoro Uy, alias Jolly Uy. Jolly
Uy is hereby ORDERED to REIMBURSE Equitable Banking Corporation the amounts
that the latter will pay to respondents.
Additionally,
the Court hereby REVERSES the dismissal of Equitable Banking Corporation's
counterclaim for damages against Special Steel Products, Inc. This Court ORDERS Special Steel Products,
Inc. to PAY Equitable Banking Corporation actual damages in the total amount of
P30,204.36, for the wrongful preliminary attachment of its properties.
The rest of
the assailed Decision is AFFIRMED.
RATIO:
The
affidavit submitted by SSPI in support of its application for a writ of
preliminary attachment and the allegations of the complaint are bereft of
specific and definite allegations of fraud against Equitable that would justify
the attachment of its properties. In
fact, SSPI admits its uncertainty whether Equitable's participation in the
transactions involved fraud or was a result of its negligence. Despite such uncertainty with respect to
Equitable's participation, SSPI applied for and obtained a preliminary
attachment of Equitable's properties on the ground of fraud. Such preliminary
attachment was wrongful. "[A] writ
of preliminary attachment is too harsh a provisional remedy to be issued based
on mere abstractions of fraud. Rather,
the rules require that for the writ to issue, there must be a recitation of
clear and concrete factual circumstances manifesting that the debtor practiced
fraud upon the creditor at the time of the execution of their agreement in that
said debtor had a preconceived plan or intention not to pay the creditor." No proof was adduced tending to show that
Equitable had a preconceived plan not to pay SSPI or had knowingly participated
in Uy's scheme.
That the
plaintiffs eventually obtained a judgment in their favor does not detract from
the wrongfulness of the preliminary attachment.
While "the evidence warrants [a] judgment in favor of [the]
applicant, the proofs may nevertheless also establish that said applicant's
proffered ground for attachment was inexistent or specious, and hence, the writ
should not have issued at all.
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