G.R. No. 115678

PHILIPPINES BANK OF COMMUNICATIONS, petitioner,
vs.
HON. COURT OF APPEALS and BERNARDINOVILLANUEVA,
respondents.
G.R. No. 115678 February 23, 2001
NATURE:
Consolidated petitions for review filed by Philippine Bank of
Communications against the Decisions of respondent Court of Appeals
seting aside and nullifying the Order of the Regional Trial Court of
Manila, Branch 7, granting the issuance of a writ of preliminary
attachment in Civil Case No. 91-56711.
FACTS:
Petitioner filed in 1991 a Complaint against private respondent
Bernardino Villanueva, Filipinas Textile Mills and one Sochi
Villanueva (now deceased) before the Regional Trial Court of Manila.
Petitioner sought the payment of P2,244,926.30 representing the
proceeds or value of various textile goods, the purchase of which was
covered by irrevocable letters of credit and trust receipts executed by
petitioner with private respondent Filipinas Textile Mills as obligor;
which, in turn, were covered by surety agreements executed by private
respondent Bernardino Villanueva and Sochi Villanueva. Private
respondents admitted the existence of the surety agreements and trust
receipts but countered that they had already made payments on the
amount demanded and that the interest and other charges imposed by
petitioner were onerous.
On May 31, 1993, petitioner filed a Motion for Attachment, contending

that violation of the trust receipts law constitutes estafa, thus providing
ground for the issuance of a writ of preliminary attachment; specifically
under paragraphs "b" and "d," Section 1, Rule 57 of the Revised Rules
of Court. Petitioner further claimed that attachment was necessary
since private respondents were disposing of their properties to its
detriment as a creditor. Finally, petitioner offered to post a bond for the
issuance of such writ of attachment. The Motion was duly opposed by
private respondents and, after the filing of a Reply thereto by petitioner,
the lower court issued its Order for the issuance of a writ of preliminary
attachment, conditioned upon the filing of an attachment bond. Private
respondents filed separate petitions for certiorari before respondent
Court assailing the order. Both petitions were granted, albeit on
different grounds.
In CA-G.R. SP No. 32762, respondent Court of Appeals ruled that the
lower court was guilty of grave abuse of discretion in not conducting a
hearing on the application for a writ of preliminary attachment and not
requiring petitioner to substantiate its allegations of fraud,
embezzlement or misappropriation. On the other hand, in CA-G.R. SP
No. 32863, respondent Court of Appeals found that the grounds cited
by petitioner in its Motion do not provide sufficient basis for the
issuance of a writ of preliminary attachment, they being mere general
averments. Respondent Court of appeals held that neither
embezzlement, misappropriation nor incipient fraud may be presumed;
they must be established in order for a writ of preliminary attachment to
issue.
ISSUE :
Whether or not the issuance of Preliminary Attachment has sufficient

basis in spite of the allegations of fraud, embezzlement and
misappropriation of the proceeds or goods entrusted to the private
respondents = NO SUFFICIENT BASIS.
HELD:
We find no merit in the instant petitions.
The Motion for Attachment filed by petitioner and its supporting

affidavit did not sufficiently establish the grounds relied upon in
applying for the writ of preliminary attachment.
Section 1 (b) and (d), Rule 57 of the then controlling Revised Rules of
Court, provides the Grounds upon which attachment may issue.
(b) In an action for money or property embezzled or fraudulently
misapplied or converted to his us by a public officer, or an officer of a
corporation, or an attorney, factor, broker, agent or clerk, in the course
of his employment as such, or by any other person in a fiduciary
capacity, or for a willful violation of duty;
(d) In an action against a party who has been guilty of fraud in
contracting the debt or incurring the obligation upon which the action is
brought, or in concealing or disposing of the property for the taking,
detention or conversion of which the action is brought;
While the Motion refers to the transaction complained of as involving
trust receipts, the violation of the terms of which is qualified by law as
constituting estafa, it does not follow that a writ of attachment can and
should automatically issue.
The lower court should have conducted a hearing and required private
petitioner to substantiate its allegations of fraud, embezzlement and
misappropriation. A writ of attachment can only be granted on concrete
and specific grounds and not on general averments merely quoting the
words of the rules. There is a necessity of giving to the private
respondents an opportunity to ventilate their side in a hearing, in
accordance with due process, in order to determine the truthfulness of
the allegations.
Further, petitioner cannot insist that its allegation that private

respondents failed to remit the proceeds of the sale of the entrusted
goods nor to return the same is sufficient for attachment to issue.
To sustain an attachment on this ground, it must be shown that the
debtor in contracting the debt or incurring the obligation intended to
defraud the creditor.
The fraudulent intent not to honor the admitted obligation cannot be
inferred from the debtor's inability to pay or to comply with the
obligations. On the other hand, fraud may be gleaned from a
preconceived plan or intention not to pay. This does not appear to be so
in the case at bar. In fact, it is alleged by private respondents that out of
the total P419,613.96 covered by the subject trust receipts, the amount
of P400,000.00 had already been paid, leaving only P19,613.96 as
balance. Hence, regardless of the arguments regarding penalty and
interest, it can hardly be said that private respondents harbored a
preconceived plan or intention not to pay petitioner.
Respondent Court of Appeals was correct in setting aside the issued
writ of preliminary attachment.
Time and again, we have held that the rules on the issuance of a writ of
attachment must be construed strictly against the applicants. This
stringency is required because the remedy of attachment is harsh,
extraordinary and summary in nature. If all the requisites for the
granting of the writ are not present, then the court which issues it acts in
excess of its jurisdiction.
DISPOSITION: The instant petitions are DENIED.

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PHILIPPINES BANK OF COMMUNICATIONS, petitioner,

On May 31, 1993, petitioner filed a Motion for Attachment, contending

Whether or not the issuance of Preliminary Attachment has sufficient

The Motion for Attachment filed by petitioner and its supporting

Further, petitioner cannot insist that its allegation that private

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