G.R. No. L-82173 September 28, 1988
EDGAR S. ASUNCION, petitioner, vs. THE HONORABLE COURT OF APPEALS and PENINSULA NATURAL RESOURCES CORPORATION, respondents.

FACTS

Petitioner Edgar S. Asuncion filed a complaint for collection of a loan based on a promissory note against private respondent Peninsula Natural Resources Corporation (Peninsula) before the Regional Trial Court (RTC) of Pasig. The complaint was accompanied by an application for the ex parte issuance of a writ of preliminary attachment, supported by an affidavit of former Court of Appeals Justice Elias B. Asuncion, alleging that Peninsula was fraudulently removing or concealing its properties to defraud creditors. The RTC granted the application and issued the writ. Peninsula filed an unverified motion to lift the attachment, claiming the allegations of fraud existed only in the petitioner’s mind and attaching an affidavit alleging the loan was actually a converted investment. The motion was not furnished to the petitioner. The RTC denied the motion to lift and, upon Peninsula’s motion for reconsideration, ordered it to post a counter-attachment bond of P301,935.41.
Instead of posting the bond, Peninsula filed a petition for certiorari, prohibition, and mandamus with the Court of Appeals (CA). The CA granted the petition, annulling the RTC’s orders for issuing and refusing to lift the writ of attachment. The CA cited Benitez v. Intermediate Appellate Court as basis, finding the RTC committed grave abuse of discretion. Asuncion’s motion for reconsideration was denied, prompting this petition for review.

ISSUE

Whether the Court of Appeals erred in annulling the RTC’s orders granting the writ of preliminary attachment and denying its discharge.

RULING

Yes, the Court of Appeals committed reversible error. The Supreme Court reinstated the RTC’s orders, finding no grave abuse of discretion in the issuance and maintenance of the writ of preliminary attachment. The petitioner’s action fell squarely under Section 1(e), Rule 57 of the Rules of Court, as an action against a party who has removed or disposed of property with intent to defraud creditors, sufficiently supported by an affidavit alleging specific fraudulent acts. The CA erroneously applied the Benitez case, which is materially different as the defendant therein presented sufficient evidence to lift the attachment, a step the private respondent here failed to take.
Furthermore, the private respondent’s procedural lapses were fatal. Its motion to lift the attachment was unverified and, crucially, not furnished to the petitioner, denying him due process and the opportunity to contest it. Its petition for certiorari before the CA was also procedurally infirm for failing to attach relevant pleadings as required by Rule 65. These unexplained non-compliances with the Rules of Court should not be countenanced. However, the Supreme Court modified the RTC’s order by reducing the excessive counter-attachment bond from P301,935.41 to P185,685.00, aligning it with the total principal claim and the petitioner’s own attachment bond of P80,000.00. The petition was granted, the CA decision reversed, and the RTC orders reinstated with the stated modification.