G.R. No. 47586, June 28, 1941
LIM BONFING Y HERMANOS, INC., plaintiff and appellant, vs. TEODORICO RODRIGUEZ, defendant and appellee.

FACTS

The plaintiff corporation, Lim Bonfing y Hermanos, Inc., appealed an order of the Court of First Instance of Cebu dated March 30, 1940, which lifted a preliminary attachment issued in the case. The lower court ordered the dissolution of the attachment on the ground that the affidavit executed by the corporation’s general manager, Lim Yok Su, concerning the facts alleged in the complaint did not indicate personal knowledge of those facts. The pertinent part of the affidavit stated: “That the statements contained in the foregoing complaint are true and correct to the best of my knowledge and belief.” The defendant, relying on the same reason and additionally alleging that there was a novation of the contract due to a stipulation of facts submitted to the court by the parties, supported the court’s action in ordering the dissolution of the attachment. The facts leading to the complaint were: prior to 1932, the defendant received from the plaintiff various sums of money as advance payment for sugar he agreed to deliver and sell. After the defendant failed to deliver all the sugar promised, a liquidation of accounts was made on February 16, 1932, wherein the defendant acknowledged in a document a debt to the plaintiff amounting to P9,150, with interest at 12% per annum, payable in three installments, the last falling due in 1934. The defendant failed to pay any of the installments despite repeated demands. The plaintiff filed a complaint alleging, among other things, that the defendant was about to sell and dispose of his properties to defraud his creditors, particularly the plaintiff, and sought a writ of preliminary attachment. For this purpose, Lim Yok Su, the general manager, executed an affidavit which included the statement: “That the statements contained in the foregoing complaint are true and correct to the best of my knowledge and belief.”

ISSUE

1. Whether the affidavit executed by the corporation’s general manager for the issuance of a writ of preliminary attachment was sufficient, specifically if it indicated his personal knowledge of the facts sworn to.
2. Whether the stipulation of facts submitted by the parties to the court constituted a novation of the defendant’s obligation.

RULING

1. On the sufficiency of the affidavit: The Supreme Court held that the lower court’s conclusion was erroneous. The affidavit, particularly the phrase “to the best of my knowledge and belief,” positively affirmed the defendant’s intent to dispose of properties to defraud creditors and the truth of the complaint’s statements. The Court emphasized that the affidavit did not state “to the best of my information,” and as worded, it indicated the affiant’s personal knowledge and belief.
2. On the alleged novation: The Supreme Court found the proposition untenable. The obligation of the defendant to pay the debt resulting from the account liquidation remained exactly the same; it had not changed in the least. The only modification, by agreement of the parties, was the manner of paying the debt, not the obligation or the debt itself. Citing Inchausti & Co. v. Yulo (34 Phil. 1027), the Court distinguished modification of payment terms from novation of the obligation.
DISPOSITIVE PORTION:
The appealed orders were revoked, and costs were charged to the appellee (defendant).