G.R. No. 171124 - Wee vs. Tankiansee

Case Summary (G.R. No. 171124)

Factual Background

Alejandro Ng Wee placed several money placements with Westmont Investment Corporation (Wincorp) which, he later discovered, had been used to fund loans to Power Merge Corporation and to satisfy obligations linked to Hottick Holdings and its president Luis Juan L. Virata. Petitioner alleged that his placements were transferred without his knowledge and that Wincorp officers and directors induced him to roll over placements through false representations; petitioner asserted that Virata used Power Merge as a conduit and that the corporate defendants connived to defraud him of his placements which had become past due.

Trial Court Proceedings

Petitioner filed Civil Case No. 00-99006 in the Regional Trial Court of Manila seeking damages and, on October 26, 2000, moved for issuance of a writ of preliminary attachment supported by an October 12, 2000 affidavit. The trial court ordered the issuance of a writ of preliminary attachment on November 6, 2000, subject to a P50,000,000 bond. Manuel Tankiansee and other defendants moved to discharge the attachment; the RTC denied the motions in an Omnibus Order dated October 23, 2001 and denied motions for reconsideration on October 14, 2002. Respondent filed a subsequent Motion to Discharge Attachment on September 30, 2004, which the trial court denied in its January 6, 2005 Order.

Interlocutory and Appellate History

Co-defendants Virata and UEM-MARA Philippines Corporation sought certiorari relief before the Court of Appeals in CA-G.R. SP No. 74610, which the CA denied on August 21, 2003; this Court likewise denied review in G.R. No. 162928 on May 19, 2004 and subsequently with finality on August 23, 2004. Manuel Tankiansee filed a certiorari petition in the Court of Appeals docketed as CA-G.R. SP No. 90130 challenging the trial court’s denial of his motion to discharge the attachment; the CA, in a Decision dated September 14, 2005, reversed and set aside the trial court orders and lifted the writ of preliminary attachment insofar as it concerned respondent’s properties, and denied petitioner’s motion for reconsideration in a January 6, 2006 Resolution. Petitioner invoked this Court’s review under Rule 45.

The Parties’ Contentions

Petitioner contended that the CA erred in entertaining a certiorari petition that merely raised errors in judgment and in discharging the attachment on grounds that went to the merits of Civil Case No. 00-99006; petitioner argued that the writ was properly issued under Rule 57, Section 1(d) because the affidavit and complaint established fraud and that the CA’s ruling contradicted the finality of earlier orders. Respondent maintained that the affidavit supporting the attachment contained only a general allegation that he, as an officer and director of Wincorp, connived in the fraudulent scheme, without any specific factual averment showing his particular acts or intent to defraud; respondent argued that general and sweeping allegations could not justify the harsh provisional remedy of attachment and that the trial court should examine only the complaint and supporting affidavit in determining whether grounds for attachment exist.

Issues Presented

The core legal questions were whether the issuance and maintenance of the writ of preliminary attachment against Manuel Tankiansee exceeded the trial court’s jurisdiction because the supporting affidavit failed to allege specific facts showing respondent’s fraudulent intent at the time of contracting the obligation, and whether the Court of Appeals properly entertained and resolved respondent’s certiorari petition under Rule 65 given the nature of the grounds raised.

Ruling of the Supreme Court

The Supreme Court denied the petition for review and affirmed the Court of Appeals Decision dated September 14, 2005 and its January 6, 2006 Resolution. The Court held that the writ of preliminary attachment issued against respondent’s properties was improperly issued because the affidavit upon which it rested did not contain particularized facts that established respondent’s fraudulent intent or specific acts of connivance at the time the obligation was contracted.

Legal Basis and Reasoning

The Court reiterated that a writ of attachment under Rule 57, Section 1(d) issues only when the applicant sufficiently shows the factual circumstances of the alleged fraud because fraudulent intent cannot be inferred from mere nonpayment. The Court relied on precedent, notably Liberty Insurance Corporation v. Court of Appeals, for the proposition that fraud must relate to the execution of the agreement and must be shown to have induced consent. The October 12, 2000 affidavit recited in detail the alleged fraudulent scheme involving Virata and Power Merge, but with respect to Manuel Tankiansee it contained only a bare allegation that he, as an officer and director, connived with others. The Court emphasized that fraud is never presumed and that the affidavit, being the foundation of the writ, must contain particulars sufficient to permit the court to determine whether the requisites for attachment are satisfied. The trial court therefore acted in excess of jurisdiction in issuing the writ against respondent because petitioner failed to show that respondent had a preconceived plan or intention not to pay at the time of contracting or any specific acts establishing his personal participation in the alleg

Case Syllabus (G.R. No. 171124)

Parties and Procedural Posture

Alejandro Ng Wee filed a Rule 45 petition assailing the September 14, 2005 Decision and January 6, 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 90130.
Manuel Tankiansee was impleaded as a defendant in Civil Case No. 00-99006 and was the subject of a writ of preliminary attachment issued by the Regional Trial Court of Manila.
The Court of Appeals reversed the trial court and lifted the writ of preliminary attachment insofar as it concerned respondent's properties.
The Supreme Court resolved the petition by denying relief and affirming the Court of Appeals' rulings.

Key Factual Allegations

Alejandro Ng Wee alleged that he made money placements totaling P210,595,991.62 with Westmont Investment Corporation (Wincorp) and that these placements were transferred without his consent to loans made to Power Merge Corporation and Luis Juan L. Virata.
The complaint alleged that Wincorp and its officers and directors induced rolls-over of placements through false representations and that Virata/Power Merge were used as conduits to appropriate the funds.
The October 12, 2000 affidavit accompanying the attachment application detailed the scheme as to Virata/Power Merge but contained only a general averment that respondent, as an officer and director of Wincorp, connived in the fraud.
The writ of preliminary attachment was issued on November 6, 2000 subject to a P50,000,000 bond requirement.

Procedural History

The trial court granted the attachment and denied defendants' motions to discharge the attachment in an Omnibus Order dated October 23, 2001 and denied reconsideration on October 14, 2002.
Co-defendants Virata and UEM-MARA Philippines Corporation sought certiorari before the Court of Appeals in CA-G.R. SP No. 74610, which the appellate court denied on August 21, 2003.
The Supreme Court denied the petition in G.R. No. 162928 and later denied the petition with finality.
Respondent filed a second motion to discharge attachment which the trial court denied on January 6, 2005, and the Court of Appeals subsequently granted certiorari and lifted the attachment as to respondent on September 14, 2005.
The Court of Appeals denied petitioner’s motion for reconsideration on January 6, 2006, prompting the immediate Rule 45 petition to the Supreme Court.

Issues Presented

Whether the Court of Appeals erred in entertaining and granting certiorari under Rule 65 to discharge the writ of preliminary attachment.
Whether the writ of preliminary attachment issued against respondent’s properties was properly supported by factual averments of fraud as required by Section 1(d) of Rule 57.
Whether petitioner's reliance on appellate and Supreme Court rulings in related proceedings involving other parties could sustain attachment against respondent.

Contentions of the Parties

Petitioner contended that the Court of Appeals should not have entertained a certiorari peti