G.R. No. 206563 - UEM Mara Philippines Corp. vs. Ng Wee

Case Summary (G.R. No. 206563)

Relevant Dates and Procedural Posture

Writ of preliminary attachment issued by RTC: November 6–7, 2000 (notice of garnishment served on PRA on November 7, 2000).
Trial court orders on motions to discharge and counter-bond: various orders between 2010–2011 (including May 20, 2010 and May 26, 2011).
CA reinstated the writ: August 29, 2012 Decision and March 27, 2013 Resolution (CA-G.R. SP No. 120695).
Supreme Court resolution on certiorari: October 14, 2020 (G.R. No. 206563), reversing the CA and deeming the writ lifted after final disposition of the main case.

Applicable Law and Precedents Cited

Rule 57, Revised Rules of Court (preliminary attachment).
Jurisprudence on the nature and effect of attachment: Lorenzo Shipping v. Villarin; Adlawan v. Judge Tomol; Yu v. Miranda.
The Supreme Court’s 2017 and 2018 decisions in Virata et al. v. Ng Wee (disposed Civil Case No. 00-99006 with finality and absolved UEM MARA of liability).

Summary of Factual Allegations in the Complaint

Ng Wee alleged that he was induced by officers of Westmont Bank and Wincorp to place investments which were subsequently loaned to Power Merge Corporation (beneficially owned by Virata). Ng Wee claimed the loans were part of a fraudulent scheme: Power Merge lacked capacity and obligation to repay; Wincorp allegedly agreed to side arrangements rendering Power Merge non-liable; and the credit facilities (including the Power Merge Credit Line Facility) originated from fraudulent transactions involving Hottick Line Credit Facility. The damages sought totaled P210,595,991.62.

Issuance and Scope of the writ of preliminary attachment

On November 6, 2000, the RTC granted the application for a writ of attachment. The sheriff served a Notice of Garnishment dated November 7, 2000, on, among others, the PRA, seeking to garnish “the proportionate share of [UEM MARA] in the Project Income of the Tollway Project which are collected by the Public Estates Authority and/or any of its subsidiaries, affiliates, agents and/or entities or persons acting on its behalf.”

PRA’s Responses and PRA’s Position on Garnishable Income

By letter dated November 13, 2000, the PRA informed the sheriff that as of November 7, 2000 there was no income allocable to UEM MARA because the Joint Venture Project Committee had not approved distribution of net revenue; thus, no income could be garnished. PRA also referred the notices to the Office of the Government Corporate Counsel (OGCC) and maintained that the contract for the Tollway Project was with UEM-MARA, not UEM Development Phils., Inc., and that Virata was not a party to the Toll Operation Agreement.

Procedural Challenges by UEM MARA and Virata

UEM MARA and Virata filed motions to dismiss (and motions to discharge the writ), arguing lack of real party in interest and failure to state a cause of action; these motions were denied by the trial court (Omnibus Order of October 23, 2001; Order of October 14, 2002). They pursued certiorari relief to the Supreme Court and had petitions denied in 2003–2004.

Discovery, Audited Financial Statements, and Subpoena Issues

Ng Wee produced UEM MARA’s audited financial statements for 2000 and 2001 reflecting UEM MARA’s share in toll fees (P171,535,275.00 and P166,192,476.00 respectively). Ng Wee sought issuance (and re-issuance) of a subpoena duces tecum and ad testificandum to the PRA’s General Manager (for documents and testimony regarding the November 7, 2000 garnishment and subsequent distributions). PRA reiterated its 2000 stance that no net revenue had been approved for distribution as of that date. The trial court granted Ng Wee’s motion for re-issuance of the subpoena (Order dated February 2, 2011), over UEM MARA and Virata’s objections that the subpoena was unnecessary and oppressive given PRA’s prior statements.

Trial Court Orders on Counter-bond and on Lifting Attachment

May 20, 2010: RTC granted Virata’s urgent motion to discharge attachment conditionally (subject to a counter-bond) but initially only as to the Forbes Park property (TCT No. 133645).
June 29, 2010: RTC held abeyance on reconsideration and set hearing to determine property value.
May 26, 2011: RTC modified counter-bond amount for Virata’s Forbes Park property from P60,000,000.00 to P174,100,000.00, and lifted and set aside the writ of attachment on UEM MARA’s project income. The May 26, 2011 order provided that upon posting the counter-bond of P174,100,000.00, the writ over the Forbes Park property would also be lifted.

Court of Appeals’ Ruling Reinstating the Attachment

The CA (August 29, 2012 Decision and March 27, 2013 Resolution) annulled the RTC’s May 26, 2011 order insofar as it discharged the writ of attachment on UEM MARA’s project income and restored the preliminary attachment. The CA reasoned that the RTC had gravely misapprehended the facts by giving full credence to PRA’s claim of nonexistence of distributable income without testing that claim against Ng Wee’s audited financial statements which reflected UEM MARA’s project income. The CA held the RTC should have conducted a hearing to resolve the factual conflict before lifting the attachment.

Grounds of UEM MARA’s Petition to the Supreme Court

UEM MARA contended that the CA erred by: (1) finding grave abuse of discretion by the RTC for alleged factual misapprehension; (2) failing to consider that the lifting of the preliminary attachment was justified despite the absence of counter-bond; and (3) granting certiorari over mere errors of judgment.

Supreme Court’s Legal Framework on Preliminary Attachment

The Supreme Court reiterated the settled nature of preliminary attachment as a provisional, ancillary remedy under Rule 57 designed to preserve property for satisfaction of any judgment—preventing disposal of assets and subjecting property to a creditor’s claim during pendency of the main action (citing Lorenzo Shipping; Adlawan; Yu). The Court emphasized that an attachment is incident to and dependent upon the main suit, and that the attachment ceases to exist upon final adjudication of that principal action.

Final Disposition of the Main Case and Its Effect on the Attachment

Civil

Case Syllabus (G.R. No. 206563)

Case Citation and Panel

Reported in 888 Phil. 88, Third Division; G.R. No. 206563, October 14, 2020.
Decision penned by Justice Gaerlan.
Concurrence by Justices Gesmundo (Acting Chairperson), Carandang, and Zalameda; Justice Leonen (Chairperson) on official leave.

Nature of the Proceeding

Petition for review on certiorari under Rule 45 of the Revised Rules of Court.
Petitioner: UEM Mara Philippines Corporation (referred to in source as UEM MARA and now known as Cavitex Infrastructure Corporation).
Respondent: Alejandro Ng Wee (referred to in source as Ng Wee).
Subject: Review of Court of Appeals (CA) Decision dated August 29, 2012 and Resolution dated March 27, 2013 in CA-G.R. SP No. 120695 that reinstated a writ of preliminary attachment on UEM MARA’s share in the income of the Manila–Cavite Tollway Project.
The writ of preliminary attachment was originally issued by the Regional Trial Court (RTC) of Manila, Branch 39, in Civil Case No. 00-99006, an action for sum of money.

Antecedent Facts (Overview of Plaintiff’s Claims and Defendant Parties)

Civil Case No. 00-99006 originated in a Complaint for sum of money filed by Alejandro Ng Wee that included an application for issuance of a writ of preliminary attachment.
Defendants named included: UEM MARA; Luis Juan L. Virata; Power Merge Corporation; UEM Development Phils., Inc.; United Engineers (Malaysia) Berhad; Majlis Amanah Rakyat; Renong Berhad; Wesmont Investment Corporation; Antonio T. Ong; Anthony A. T. Reyes; Simeon S. Cua; Manuel N. Tan Kian See; Mariza Santos-Tan; Vicente T. Cualoping; Henry T. Cualoping; Manuel A. Estrella; and John Anthony B. Espiritu.
Ng Wee sought joint and several liability against the defendants for P210,595,991.62 (as the original claim seeking recovery of investment proceeds).

Allegations Regarding Westmont Investment Corporation (Wincorp) and Power Merge

Ng Wee alleged that through enticement by officers of Westmont Bank and Westmont Investment Corporation (Wincorp) with promises of high yield and no risk, he placed sizable funds with Wincorp.
Ng Wee alleged that Wincorp loaned most of his placements to Power Merge Corporation, whose entire shareholdings were beneficially owned by Luis Juan Virata.
Ng Wee alleged he discovered that Power Merge was a relatively new corporation with subscribed capitalization of P37,000,000.00, no track record, and not an ongoing business concern, yet was given a credit line facility of over P2,500,000,000.00 by Wincorp.
Ng Wee alleged the existence of a side agreement that absolved Power Merge from liability to repay amounts under the Power Merge Credit Line Facility and that this credit line was part of a fraudulent scheme involving Wincorp, its directors, and Mr. Virata, tracing origins to the Hottick Line Credit Facility.

Issuance of Writ of Preliminary Attachment and Garnishment

On November 6, 2000, the trial court granted Ng Wee’s application for issuance of a writ of preliminary attachment.
Sheriff served a Notice of Garnishment dated November 7, 2000, on several entities, including the then Public Estates Authority (PEA), now Philippine Reclamation Authority (PRA).
The Notice of Garnishment sought to garnish “the proportionate share of [UEM MARA] in the Project Income of the Tollway Project which are collected by the Public Estates Authority and/or any of its subsidiaries, affiliates, agents and/or entities or persons acting on its behalf.”

PRA’s Initial Response and Allegation of No Garnishable Income

In a Letter dated November 13, 2000, the PRA advised the court sheriff that as of November 7, 2000, there was no income allocable to UEM MARA that could be garnished because net revenue between the parties had not yet been distributed.
PRA informed the sheriff that (a) it referred the notices of garnishment to the Office of the Government Corporate Counsel (OGCC) for legal advice; (b) OGCC informed the sheriff that the Notice of Garnishment cannot be affected because the contract for the Tollway Project was with UEM-MARA and not with UEM Development Phils., Inc.; and (c) PRA reiterated that its joint venture in the Tollway Project was with UEM-MARA and that no income allocable to Mr. Virata or UEM-MARA could be garnished at that time.

Additional Attachments Obtained by Ng Wee

Ng Wee was able to attach a house and lot of Mr. Virata in Forbes Park, Makati City, covered under TCT No. 133645.

Motions to Dismiss and Early Pleadings by Defendants

UEM MARA and Virata filed a Motion to Dismiss with an Urgent Motion to Discharge the Writ of Attachment on grounds that: (1) the complaint was not prosecuted in the name of the real party in interest; and (2) the complaint failed to state a cause of action.
The trial court denied the Motion to Dismiss in an Omnibus Order dated October 23, 2001 and an Order dated October 14, 2002.

Early Appeals and Proceedings Before the Supreme Court (Prior to Final Adjudication)

UEM MARA and Virata elevated the denials to this Court by certiorari. On August 21, 2003, the Supreme Court (Special Ninth Division) denied their petition (CA-G.R. SP No. 74610) for lack of merit and denied their motion for reconsideration.
They filed a petition for review before the Supreme Court docketed as G.R. No. 162928, which was denied by this Court in Resolutions dated May 19, 2004 and August 23, 2004.

Motions to Discharge and Counter-Bond Proceedings (2010–2011)

In 2010, Virata and UEM MARA filed an Urgent Motion to Discharge Writ of Attachment, offering to post a counter-bond to discharge the writ against their properties; Ng Wee opposed.
Trial court on May 20, 2010 issued an Order granting Virata’s urgent motion to discharge, subject to posting of a counter-bond, but only insofar as the property covered by TCT No. 133645 (Virata’s Forbes Park lot).
Motions for reconsideration were filed by both parties. The trial court held in abeyance resolution of the motions and set the case for hearing to determine the value of the Forbes Park property (order dated June 29, 2010).
The court issued a Subpoena Duces Tecum Ad Testificandum to the General Manager of PRA to testify and bring documents pertaining to the November 7, 2000 notice of garnishment and PRA’s compliance, for the July 22, 2010 hearing.

PRA’s Subsequent Manifestations Regarding Non-Compliance and Lack of Income

In a Letter dated July 20, 2010, PR