G.R. No. 202004 , November 04, 2020
Gil G. Chua, Petitioner, vs. China Banking Corporation, Respondent.

FACTS

China Banking Corporation (China Bank) filed a Complaint for Sum of Money with an Application for a Writ of Preliminary Attachment against Gil G. Chua and others, alleging they acted as sureties for Interbrand Logistics & Distribution, Inc. China Bank claimed Interbrand, with the sureties’ knowledge, committed fraud in contracting obligations under trust receipts and surety agreements, with no intent to pay. The Regional Trial Court (RTC) initially granted the writ. Chua moved to lift it, arguing he was not a debtor and was neither an officer nor stockholder of Interbrand during the relevant period (September to December 2009). The RTC lifted the writ against Chua, finding China Bank’s evidence—including corporate documents showing Chua as a former incorporator/director and the surety agreement he signed—insufficient to prove his current corporate role and the alleged fraud at the time the obligations were incurred.
China Bank filed a Petition for Certiorari and Mandamus with the Court of Appeals (CA). The CA granted the petition, reinstating the writ of attachment. It ruled that Chua voluntarily signed the Surety Agreement, making him personally liable as a surety irrespective of his corporate position. The CA declined to rule on the fraud issue to avoid prejudging the main case. Chua’s motion for reconsideration was denied.

ISSUE

Whether the Court of Appeals erred in reinstating the writ of preliminary attachment against petitioner Gil G. Chua.

RULING

No, the Court of Appeals did not err. The Supreme Court affirmed the CA’s decision, emphasizing the nature of a surety’s obligation and the limited scope of a preliminary attachment proceeding. A writ of preliminary attachment is a provisional remedy issued at the commencement of an action to secure a potential judgment. Its issuance requires only a prima facie showing of a ground under Rule 57, Section 1 of the Rules of Court, such as that the defendant is guilty of fraud in contracting the obligation. A full-blown trial on the merits is not required at this stage.
The Court found that China Bank sufficiently established a prima facie case for attachment against Chua. By executing the Surety Agreement, Chua bound himself solidarily with the principal debtor, Interbrand. His liability as a surety is direct, primary, and absolute; it is not contingent upon his contemporaneous status as a corporate officer or stockholder. His defense that he was no longer connected with Interbrand during the transaction period pertains to the merits of the main case regarding the validity of his surety contract, which is not determinative in the summary attachment proceeding. The alleged fraud in incurring the obligation, supported by the surety agreement and the default, was sufficiently alleged to warrant the provisional remedy. The CA correctly avoided delving into the ultimate validity of the fraud claim, as doing so would prematurely adjudicate the main action.