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 money against petitioner National Coconut Corporation. On September 4, 1950, Sycip filed an ex parte petition for a writ of preliminary attachment, alleging the petitioner “has disposed of and is in the process of disposing its properties with intent to defraud its creditors,” supported by an advertisement in the Manila Chronicle of June 10, 1950, for the sale of “one complete oil mill” and newspaper reports about officials advocating the corporation’s dissolution. The respondent Judge issued the writ on September 6, 1950. The petitioner filed a motion to discharge the attachment on September 13, 1950, with an affidavit from its Officer-in-Charge stating the ground was false, that the advertised sale was to prevent deterioration, that it was not consummated due to lack of satisfactory bids, and that the attachment based on newspaper reports was improper. This motion was denied on September 20, 1950. A motion for reconsideration was filed on September 29, 1950, arguing that under the Rules, intent to defraud is essential and that petitioner should be allowed to prove its absence in a hearing. This was also denied, prompting this certiorari petition.

ISSUE

Whether the respondent Judge committed a grave abuse of discretion in denying the motion to discharge the preliminary attachment and in refusing to allow the petitioner to present evidence to prove the absence of intent to defraud its creditors.

RULING

Yes. The Supreme Court set aside the order denying 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 if improperly or irregularly issued, such as when facts in the plaintiff’s affidavit are shown to be untrue. Here, the petitioner’s affidavit sufficiently controverted the allegation of intent to defraud, showing the sale was advertised to prevent deterioration and was not consummated. Even if the facts were disputed, the petitioner had the right to introduce evidence to prove the falsity of the affidavit, as established in precedent (Miller, Sloss and Scott v. Jones). The lower court’s denial of this opportunity constituted an abuse of discretion. The case was remanded to the trial court for the presentation of evidence on the motion to discharge the attachment, with costs against Sycip.