GR L 4296; (February, 1952) (2) (Digest)
G.R. No. L-4296 February 25, 1952
NATIONAL COCONUT CORPORATION, petitioner, vs. THE HONORABLE POTENCIANO PECSON, Judge of the Court of First Instance of Manila and FRANCISCO SYCIP, respondents.
FACTS
On April 17, 1947, respondent Francisco Sycip filed a complaint for recovery of a sum of money against petitioner National Coconut Corporation in the Court of First Instance of Manila (Civil Case No. 2293). On September 4, 1950, Sycip filed an ex parte petition for a writ of preliminary attachment, alleging that the petitioner “has disposed of and is in the process of disposing its properties with intent to defraud its creditors.” He supported this by citing an advertisement in the Manila Chronicles of June 10, 1950, for the sale of “one complete oil mill” and newspaper reports that certain government officials were advocating the dissolution of the corporation. The respondent Judge issued the writ on September 6, 1950.
On September 13, 1950, the petitioner filed a motion to discharge the attachment, attaching an affidavit from its Officer-in-Charge stating that the ground for the writ was false; the advertised sale was to prevent deterioration of the oil mill, not to defraud creditors; and the sale was never consummated due to lack of satisfactory bids. The motion was denied on September 20, 1950. The petitioner filed a motion for reconsideration on September 29, 1950, arguing that under Rule 59, it is essential that the removal or disposition of property be with intent to defraud creditors, and since this intent was controverted, the petitioner should be allowed to prove its absence in a preliminary hearing. This motion was also denied, prompting the petition for certiorari.
ISSUE
Whether the respondent Judge committed a grave abuse of discretion in denying the petitioner’s motion to discharge the writ of preliminary attachment and in refusing to allow the petitioner to present evidence to prove the absence of intent to defraud creditors.
RULING
Yes, the respondent Judge committed a grave abuse of discretion. The Supreme Court set aside the order dated September 20, 1950, and remanded the case to the court of origin for the presentation of evidence on the motion to discharge the attachment.
The Court held that under Section 13, Rule 59 of the Rules of Court, an attachment may be discharged on the ground that it was improperly or irregularly issued. Precedents establish that when the facts in the plaintiff’s affidavit are shown to be untrue, the writ is considered improperly issued. Here, the petitioner’s affidavit showed that the alleged intent to defraud was not true, as the advertised sale was intended to prevent deterioration, not to defraud creditors, and the sale was not consummated. This fact was undisputed. Even if the fact were controverted, the petitioner had the right to introduce evidence to support its claim, as established in Miller, Sloss and Scott v. Jones. The lower court’s denial of this right and reliance solely on Sycip’s affidavit constituted an abuse of discretion. Costs were imposed on respondent Francisco Sycip.