Title
Peroxide Philippines Corp. vs. Court of Appeals
Case
G.R. No. 92813
Decision Date
Jul 31, 1991
BPI's attachment against Peroxide, Eastman, and the Mapuas was upheld as valid, with cash dividends subject to garnishment; ex parte orders lifting it were void due to lack of due process.

Case Summary (G.R. No. 92813)

Procedural Background and Issuance of the Writ of Preliminary Attachment

On December 6, 1982, BPI filed Civil Case No. 48849 for collection. Judge Pineda granted a writ of preliminary attachment on January 7, 1983, upon BPI’s P32.7 million bond, directing sheriff attachment of petitioners’ properties to preserve assets pending litigation.

Initial Challenge and Orders by Judge Pineda

Eastman and the Mapuas moved on January 11, 1983 to lift the attachment. At the January 14 hearing, Judge Pineda allowed BPI to file written opposition by January 17 but denied its motion for hearing and then, on January 17, issued orders lifting the attachment without a hearing—denied for lack of due process.

Reinstatement of Attachment by Judges Reyes and Acosta

After judicial reorganization, Judge Reyes on November 28, 1983 found the attachment proper—holding petitioners had fraudulently disposed of assets—and directed its implementation upon finality. On December 17, 1984, Judge Acosta granted BPI’s partial reconsideration, declared the writ “immediately executory,” and ordered its execution despite lapsing more than a year since Reyes’s order.

Intermediate Appellate Court Proceedings and Supreme Court Review (G.R. No. 74558)

Petitioners sought certiorari in the Intermediate Appellate Court (AC-G.R. SP No. 05043), which issued a temporary restraining order but later, on March 14, 1986, dismissed the petition and upheld attachment validity. Supreme Court review in G.R. No. 74558 led to denial of BPI’s petition on October 27, 1986 and final denial of reconsideration on October 6, 1987, affirming that the attachment was lawful.

Motion for Delivery of Dividends and Order by Judge Gerona

On July 30, 1987 BPI moved to garnish and compel Bataan Pulp and Paper Mills, Inc. (Bataan) to deliver dividends on petitioners’ shares. On December 16, 1987, Judge Gerona granted the motion: dividends declared post-garnishment were deemed part of the attached property. He denied contempt charges against Bataan officers and held the May 29, 1986 order of suspension by Judge Acosta void for lack of notice and hearing.

Order of Judge Rasul and Subsequent Motions

After Gerona inhibited, Judge Rasul on August 23, 1988 concluded that the Acosta suspension order was still in effect and that dividends paid under it were valid. He further held that the propriety of attachment against Eastman and the Mapuas involved questions of fact to be determined later and directed their properties not to be re-attached pending such determination. BPI’s motion for reconsideration of that order and for suspension of its effects was denied on September 19, 1988.

Petition for Certiorari in the Court of Appeals

BPI filed CA-G.R. SP No. 15672, invoking grave abuse of discretion by the trial court in: denying suspension of Rasul’s order; moot-ring BPI’s motions; treating the writ as suspended or lifted by earlier orders; nullifying attachment as to certain petitioners; and diverging from Supreme Court resolutions.

Court of Appeals Decision and Reliefs Granted

On September 4, 1989, the Court of Appeals granted certiorari, holding: (a) attachment against Eastman and the Mapuas valid from inception; (b) Rasul’s August 23, 1988 order set aside as to dividends; (c) Bataan and petitioners jointly and severally ordered to deliver future dividends to the sheriff; (d) Rasul’s September 19, 1988 order set aside.

Issues on the Validity and Continuity of the Attachment

Central question: whether the writ remained valid and enforceable or was voided by ex parte orders dated January 17, 1983 and May 29, 1986. Related is whether dividends declared on garnished shares post-notice of garnishment formed part of the attached property.

Due Process Requirements under Rule 57, Section 13

Section 13, Rule 57 of the Rules of Court mandates that an attachment may be discharged or suspended only after hearing, notice, and evidence that the writ was improperly issued. Ex parte lifting or suspension orders, without opportunity for the attaching creditor to oppose, violate due process and are void for want of jurisdiction.

Effect of Ex Parte Orders Lifting or Suspending the Writ

Judge Pineda’s January 17, 1983 lifting and Judge Acosta’s May 29, 1986 suspension were issued without the required hearing and therefore were void. Such void orders cannot interrupt the continuous effectiveness of a valid prelimina

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