Title
Asuncion vs. Court of Appeals
Case
G.R. No. 82173
Decision Date
Sep 28, 1988
Petitioner sought loan collection via writ of attachment; RTC granted, CA annulled, SC reinstated with reduced bond, citing procedural lapses and insufficient fraud evidence.
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Case Digest (G.R. No. 82173)

Facts:

  1. Filing of the Complaint and Application for Writ of Attachment:

    • On September 17, 1987, petitioner Edgar S. Asuncion filed a complaint against private respondent Peninsula Natural Resources Corporation (Peninsula) in the Regional Trial Court (RTC) of Pasig. The complaint sought the collection of a loan based on a promissory note executed by Peninsula and signed by its president, Lorenzo Palao.
    • The complaint was accompanied by an application for the issuance ex parte of a writ of preliminary attachment, supported by an affidavit from former Court of Appeals Justice Elias B. Asuncion, the petitioner's father and former chairman of Peninsula's board of directors. The affidavit alleged fraudulent removal, concealment, or disposition of Peninsula's properties.
  2. Issuance of the Writ of Attachment:

    • On September 24, 1987, the RTC granted the application for the writ of attachment after the petitioner posted a bond of P80,000.00.
  3. Motion to Lift the Attachment:

    • On October 14, 1987, Peninsula filed an unverified motion to lift the attachment, claiming that the allegations of fraud were baseless. The motion was supported by an affidavit from Leoncio Fonacier, a former board member of Peninsula, who alleged that the amount claimed by the petitioner was actually an investment converted into a loan through fraudulent means.
    • The petitioner opposed the motion, and the RTC denied it on November 4, 1987.
  4. Reconsideration and Counter-Attachment Bond:

    • Peninsula moved for reconsideration and offered to post a counter-attachment bond. The RTC denied the motion and required Peninsula to post a counterbond of P301,935.41 by December 4, 1987, failing which the attached properties would be pulled out.
  5. Appeal to the Court of Appeals:

    • Peninsula filed a petition for certiorari, prohibition, and mandamus with the Court of Appeals (CA), which granted the petition on January 22, 1988, annulling the RTC's orders. The CA denied the petitioner's motion for reconsideration on February 23, 1988.

Issue:

  1. Whether the Court of Appeals erred in annulling the RTC's orders granting the writ of preliminary attachment and denying the motion to lift the attachment.
  2. Whether the RTC committed grave abuse of discretion in issuing the writ of attachment and denying Peninsula's motion to lift it.
  3. Whether the counter-attachment bond required by the RTC was excessive.

Ruling:

The Supreme Court granted the petition, reversing the Court of Appeals' decision and reinstating the RTC's orders with the modification that the counter-attachment bond be reduced to P185,685.00.

Ratio:

  1. Validity of the Writ of Attachment:

    • The Supreme Court held that the RTC did not commit grave abuse of discretion in issuing the writ of preliminary attachment. The petitioner's complaint was an action against a party alleged to have removed or disposed of its property with intent to defraud creditors, which is a valid ground for attachment under Section 1(e), Rule 57 of the Revised Rules of Court.
  2. Failure to Substantiate Claims of Fraud:

    • The Court found that Peninsula failed to provide sufficient evidence to support its claim that the allegations of fraud were baseless. Unlike in the cited case of Benitez vs. Intermediate Appellate Court, Peninsula did not present compelling evidence to lift the attachment.
  3. Procedural Lapses by Peninsula:

    • Peninsula failed to comply with procedural requirements, such as furnishing the petitioner with a copy of the motion to lift the attachment and attaching certified true copies of the assailed RTC orders in its petition to the CA. These lapses were deemed serious and prejudicial to the petitioner's rights.
  4. Excessive Counter-Attachment Bond:

    • The Court found the counter-attachment bond of P301,935.41 excessive, considering that the principal amount claimed by the petitioner was only P185,685.00. The bond was reduced to P185,685.00 to align with the claimed amount.


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