G.R. No. 224097 - Keng Hua Paper Products Co., Inc. vs. Ainza

Case Summary (G.R. No. 224097)

Key Dates and Procedural Posture

Complaint filed in RTC: August 20, 1990 (Civil Case No. Q-90-6471). RTC order granting ex-parte attachment: August 24, 1990. Writ of preliminary attachment issued: September 19, 1990; simultaneously served with summons and complaint on September 20, 1990, and levy executed. RTC denied motion to set aside/discharge writ: October 4, 1990. CA initially denied injunctive relief (Resolution, October 31, 1990), but later granted certiorari and annulled RTC orders and cancelled the writ (decision June 27, 1991; motion for reconsideration denied October 22, 1991). Petition for review on certiorari to the Supreme Court followed.

Relief Sought and Nature of Controversy

Petitioner sought annulment of the CA decision that nullified the RTC’s orders and cancelled the writ of preliminary attachment. The litigation concerns the validity of an ex-parte writ of preliminary attachment, whether jurisdiction over defendants was required before issuing or implementing such writ, and whether defendants’ due process rights were violated.

Applicable Law and Precedents Relied Upon

Primary procedural provision: Rule 57, Rules of Court (Sections 1 and 3 referenced regarding timing and requisites for preliminary attachment and affidavit and bond requirements). Relevant Supreme Court precedents cited in the record: Sievert v. Court of Appeals; Davao Light and Power Co., Inc. v. Court of Appeals; BF Homes, Inc. v. Court of Appeals; Mindanao Savings and Loan Association, Inc. v. Court of Appeals; Adlawan v. Tomol; Virata v. Aquino; Peroxide Philippines Corporation v. Court of Appeals; The Consolidated Bank and Trust Corp. (Solidbank) v. Court of Appeals.

Court of Appeals’ Rationale

The CA concluded the RTC lacked jurisdiction over the spouses because the CA believed neither valid service of summons with a copy of the complaint nor voluntary appearance occurred before the RTC issued its August 24, 1990 order and before the writ issued September 19, 1990. Citing Sievert, the CA held that a court which has not acquired jurisdiction over the defendant cannot bind the defendant either in the main case or in ancillary proceedings such as attachment, and therefore struck down the attachment.

Issues Presented to the Supreme Court

Whether the RTC acquired jurisdiction over the spouses such that the writ of preliminary attachment and its implementation were valid. 2) Whether the writ of preliminary attachment, as an ancillary remedy issued ex parte, violated the spouses’ constitutional right to due process in the circumstances described.

Supreme Court’s Analysis on Ex-parte Attachment and Jurisdiction

The Court reiterated that a writ of preliminary attachment is a provisional remedy and that under Section 3, Rule 57 the requisites for issuance are the applicant’s affidavit and bond. The Court confirmed its prior rulings (notably Davao Light and Power Co., Inc.) that a writ of preliminary attachment may issue ex parte after an action is properly commenced by filing the complaint and paying requisite fees — i.e., the writ may be granted before service of summons on the defendant. The Court clarified the three-stage nature of attachment: (1) judicial order granting the application, (2) issuance of the writ pursuant to that order, and (3) implementation (levy/attachment). Jurisdiction over the defendant is not required for stages (1) and (2), but jurisdiction over the person of the defendant is required at the time the writ is implemented; absent such jurisdiction, acts binding the defendant are invalid.

Distinction from Sievert and Application to the Present Facts

Sievert was distinguished: in Sievert the writ was implemented without any service of summons to the defendant, so the defendant was bound without the court having acquired jurisdiction over the person at implementation. In the present case, when the writ was implemented the sheriff served summons and a copy of the complaint contemporaneously with service of the writ and effectuated the levy. Because service of summons and complaint was made simultaneously with implementation, the condition for valid implementation—acquisition of jurisdiction over the defendant at the time of levy—was satisfied.

Due Process and Notice Considerations

The Court held that no prior hearing or notice to the defendant is required before issuing a writ of preliminary attachment because such a hearing could enable the defendant to abscond or dispose of property to defeat the remedy. The procedural scheme permitting ex parte issuance is consistent with due process; however, implementation must be accompanied by service of the requisite process documents (summons, complaint, order, application or bond as applicable) so that the defendant’s rights are

Case Syllabus (G.R. No. 224097)

Procedural History

Petition for review on certiorari filed with the Supreme Court seeking annulment of the Court of Appeals decision promulgated June 27, 1991 and its resolution dated October 22, 1991 denying motion for reconsideration in CA-G.R. SP No. 23199.
Trial court proceedings: Complaint filed by petitioner Ricardo Cuartero on August 20, 1990 in the Regional Trial Court (RTC) of Quezon City, docketed as Civil Case No. Q-90-6471; order granting ex parte application for writ of preliminary attachment issued August 24, 1990; writ of preliminary attachment issued September 19, 1990; writ, summons, complaint and order served on respondents on September 20, 1990; levy and attachment effected immediately thereafter by Deputy Sheriff Ernesto L. Sula.
Respondents (spouses Evangelista) moved to set aside the August 24, 1990 order and to discharge the writ of attachment; RTC denied the motion on October 4, 1990 for lack of merit.
Respondents filed a special civil action for certiorari with the Court of Appeals (CA), initially seeking a restraining order/preliminary injunction; in a resolution dated October 31, 1990, CA denied the prayer for restraining order or injunction.
On June 27, 1991, CA granted the petition for certiorari, nullified the trial court orders dated August 24 and October 4, 1990 and cancelled the writ of preliminary attachment; petitioner’s motion for reconsideration was denied by CA on October 22, 1991.
Petitioner elevated the case to the Supreme Court by petition for review on certiorari (G.R. No. 102448); the Supreme Court rendered decision on August 5, 1992 reversing the CA decision and reinstating the trial court’s order and writ of attachment.

Relevant Facts

Petitioner filed a complaint for sum of money plus damages and prayed for issuance of writ of preliminary attachment.
Complaint was filed on August 20, 1990; ex parte order granting the prayer was entered August 24, 1990.
Writ of preliminary attachment was issued on September 19, 1990 pursuant to the August 24, 1990 order.
On September 19, 1990, the summons for spouses Evangelista was prepared; on September 20, 1990 the following were simultaneously served at respondents’ residence: a copy of the writ of preliminary attachment, the order dated August 24, the summons, and the complaint.
Deputy Sheriff Ernesto L. Sula then levied, attached and pulled out the properties of the spouses Evangelista to secure petitioner’s claim in the principal amount of P2,171,794.91, attaching all non-exempt properties or so much thereof as may be sufficient to satisfy the claim.
Respondents moved to set aside the order and to discharge the writ alleging irregularity/improper issuance, lack of proper ground for issuance (e.g., lack of intent to defraud regarding postdated checks), and violation of due process because the writ was issued without notice and hearing.
RTC denied respondents’ motion to discharge the writ for lack of merit on October 4, 1990.

Issues Presented to the Supreme Court

Whether the Court of Appeals gravely abused its discretion and lacked jurisdiction in holding that the RTC did not acquire jurisdiction over the person of the respondents.
Whether the Court of Appeals gravely abused its discretion in holding that the RTC could not validly issue the writ of preliminary attachment as an ancillary remedy.
Ancillary issues addressed: whether issuance and implementation of the writ violated due process; whether there was proper ground (fraud) for issuance of the writ; whether the writ issued ex parte may be implemented without prior service of summons.

Assignments of Error (as raised by Petitioner)

I: The Court of Appeals erred and committed grave abuse of discretion, amounting to lack of jurisdiction, when it held that the RTC did not acquire jurisdiction over respondents.
II: The Court of Appeals erred and acted with grave abuse of discretion when it held that the RTC could not validly issue the writ of preliminary attachment, an ancillary remedy.

Ruling of the Court of Appeals (as described in the source)

CA found that trial court lacked jurisdiction over respondents because there was neither service of summons with a copy of the complaint nor voluntary appearance before the trial court issued the August 24, 1990 order and the writ issued September 19, 1990.
CA held that this want of jurisdiction rendered the issuance and implementation of the writ reversible error, quoting and relying on Sievert v. Court of Appeals, 168 SCRA 692 (1988).
CA therefore nullified the trial court orders and cancelled the writ of preliminary attachment.

Parties’ Arguments (as presented in the record)

Petitioner’s position (implicit in petition): trial court properly issued the ex parte order and writ of preliminary attachment; service of writ, summons and complaint was made con