GUILLERMO F. GARCIA AND PILAR D GARCIA, PETITIONERS, VS. THE HON. JUDGE ANDRES REYES, MOBIL OIL (PHIL.) INCORPORATED, PROVINCIAL SHERIFF OF RIZAL AND SHERIFF OF THE CITY OF MANI…

The affliction visited on petitioner-spouses, Guillermo F. Garcia
and Pilar D. Garcia, by the asserted arbitrariness of
the then respondent Judge, now Justice of the Court of Appeals, the Honorable
Andres Reyes of the Court of First Instance of Rizal,
Branch VI, consisting of the unwarranted issuance of a preliminary writ of
attachment, the failure to discharge such writ upon motion of petitioners, the
denial of opportunity on their part to present evidence on the impropriety of
the issuance thereof and his order granting a motion to sell on the part of
private respondent Mobil Oil (Phil.) Incorporated, at whose instance the writ
of preliminary attachment was issued, allegations of improvident exercise of
authority sufficient to.  Raise a due process
question, sufficed to evoke an affirmative response from this Tribunal.  Consequently, the petition for certiorari and mandamus with preliminary injunction filed on April 7, 1967 was
given due course by us in a resolution of April 12, 1967 requiring respondents
to answer the petition, a temporary restraining order likewise being issued.^[1]

More specifically, in the petition, it was alleged that
respondent Mobil Oil (Phil.) Incorporated, hereinafter referred to as Mobil,
filed a complaint, with petitioners as defendants, on September 21, 1966 for
the collection of an amount of P189,335.21 plus 12% interest and 25% of their
indebtedness by way of attorney’s fees, “representing [their] supposed
unpaid account under their dealership agreement.” In such complaint,
respondent Mobil, as plaintiff, likewise sought the issuance of a preliminary
writ of attachment on the ground that petitioner Guillermo F. Garcia was guilty
of fraud in contracting the debt or incurring the obligation, that petitioners
had removed or disposed of some of their properties, or were about to do so,
with the intent to defraud their creditors, and that there was no other
sufficient security for the claim sought to be enforced.^[2] It was then stated in the petition that on
September 22, 1966 respondent Judge did issue an order for a preliminary writ
of attachment, copies of which were served on two of the other respondents, the
Provincial Sheriff of Rizal and the City Sheriff of
Manila, the former attaching household furnitures and
home appliances of petitioner-spouses in their residence at Quezon
City, and the latter attaching a motor boat, “Triple Ten”, owned by
petitioners and moored along the Pasig River, Manila.^[3]

After which, petitioners, according to the petition, filed on
September 30, 1966 a motion for a discharge of the attachment coupled with a
motion to dismiss, premised on the grounds that petitioner Guillermo F. Garcia
was not guilty of fraud in contracting the obligation, the contracts he was
made to sign when appointed dealer by Mobil being prepared by its legal panel,
that neither he nor his wife had disposed or was about to dispose of their
properties and that the allegations contained in the complaint of Mobil as to
the lack of sufficient security for the claim sought to be enforced was false
as the alleged indebtedness of P189,335.21 was sufficiently secured with
chattel mortgages on three vessels with an aggregate value of P375,000.00, plus
a guaranty payment bond of P25,000.00, totaling in all P400,000.00.  The aforesaid motion to discharge like­wise
contained a dare on the part of petitioner Garcia to present specific proof of
fraud attributed to him.  It stressed
what it considered the failure to show that the amount which Mobil was suing
for was above all legal counterclaims and hence lacked one of the funda­mental
requisites for the issuance of a preliminary writ of attachment.  Such an allegation, according to petitioners,
could not be made as eight days before the complaint of respondent Mobil,
petitioners, as plaintiffs, filed in the Court of First Instance of Manila an
action for specific performance with claims in the sum of P363,000.00.^[4] It is petitioners’ contention that
respondent Judge ought to have sustained the motion to discharge the writ of
attachment, especially so in the absence of any counter-affidavits on the part
of Mobil.  It was then recited that
petitioners sought to present evidence on the im­propriety of the issuance of
the writ of preliminary attachment, a motion to that effect being filed on December 3, 1966.  It was denied by respondent Judge in an order
of March 13, 1967, which
likewise granted a motion on the part of Mobil to sell the properties attached
on the ground of their being perishable.^[5]

Petitioners would conclude that respondent Judge acted with grave
abuse of discretion amounting to lack of jurisdiction in issuing the
preliminary writ of attachment, in denying the petitioners’ motion to lift the
same as well as their motion for the presentation of evidence and in granting
the motion of respondent Mobil to sell the chattels that were thus attached.

The answer of respondent Mobil filed on May 4, 1967 attempted to throw a different light
on the matter, as could have been expected. 
It cannot be said that it fully succeeded in its appointed task.  There were still doubts left unresolved.

On the question of fraud, which was one of the grounds relied
upon for the issuance of the writ of attachment, reliance was had on respondent
Mobil’s subsequently discovering that petitioner Garcia’s ownership of the
motor boat, “Triple Ten”, dated only on August 22, 1966, by virtue of
a bill of sale executed in his favor by one Isabelo Magat, when the contract was entered into on May 22, 1964,
at which time he represented that he was already the owner of the same.  Moreover, there was a failure to surrender
such mortgaged vessel pursuant to the above contract on demand of respondent
Mobil.  In such pleading reference was
likewise made to the above vessel and to another vessel named “Emmanuel
I”, likewise the subject of the chattel mortgage intended as security for
the initial credit line of P75,000.00, allegedly having been fraudulently
concealed, removed or disposed. 
Considering, moreover, that the aggregate value of the alleged
securities would not exceed P150,000.00 and the claims of respondent Mobil
outside of the principal in the amount of P189,335.21 would likewise include
accrued interest at 12% per annum and an amount equivalent to 25% by way of
attorney’s fees as well as other damages, the answer alleged that there was no
sufficient security over and above all legal counterclaims for the amounts
sought to be collected in the complaint before respondent judge.  Thus respondent Judge acted correctly in
denying the motion to discharge such writ of preliminary attachment, there
being, moreover, contrary to the allegation of petitioners, counter-affidavits
on the part of respondent Mobil.^[6]

The answer also attempted to present in the strongest possible
light respondent Mobil’s side as to the alleged failure to grant petitioners an
opportunity to present evidence to justify the lifting of the writ of
attachment.  The point raised by them
centered not on the lack of any merit in the evidence that could be offered but
on petitioners having waived such right at the hearing scheduled for October 22, 1966.  Respondent Mobil appeared on that date
through counsel with its witnesses. 
Petitioners, however, were absent, contenting themselves with a
manifestation in a letter of their counsel, who alleged that he “was not
feeling very well and * * * that [he would] submit a memorandum [within] five
days in lieu of oral argument after which the motion be considered
submitted.” Under the circumstances, respondent Mobil would contend that
there was no need to present further testimonial witnesses, the case being
submitted instead on the basis of counter-affidavits and other documents.  In the light of the above, the reiteration in
another urgent motion to present evidence filed on December 3, 1966, when such a question had already been
submitted for decision, was considered by respondent Mobil as being pro forma
and dilatory.^[7]

On the question of the justification under the order of sale,
reliance was based by respondent Mobil on a Rules of Court provision to the
effect that where the property attached is perishable or that the interests of
all the parties to the action will be subserved by
the sale thereof, the judge may, on motion, order such property to be sold at
public auction, in such manner as he may direct, the proceeds to be deposited
in court to abide the judgment in the action.^[8]
It was then noted that respondent Judge was justified on both grounds to issue
such order to sell.^[9]

The prayer of the answer was for the dismissal of the petition as
well as the denial of the writ of preliminary injunction prayed for.

The case was submitted for decision after both parties, peti­tioners
and respondent Mobil, submitted their respective memo­randa in lieu of oral
argument.  With the controversy thus
receiving further clarification and a careful study of the matter, we have
decided to sustain petitioners and issue the writs of certiorari and mandamus
prayed for.  This we do, not on the
ground of the improper issuance of the preliminary writ of attachment nor on
the failure to discharge such writ upon motion of petitioners, but on the
denial of the opportunity on their part to be heard so that they could present
evidence that could justify the lifting thereof, a denial which, to our mind
and in the light of the peculiar circumstances of this case, did raise a
serious due process question.

1.  We start with a
reiteration of a principle constantly adhered to by this Court that the
validity of the issuance of a writ of attachment is dependent on the due and
careful observance of the procedural requirements as set forth in the Rules of
Court.  Such a view was given expression
in the appropriate language of former Chief Justice Moran thus:   “The remedy by attachment is purely a
statutory remedy, and the provisions thereof must be strictly construed.  Courts have consistently held that no court
has authority to issue a writ of attachment without express statutory
permission.  Consequently, where a Court
of First Instance issues an attachment for which there is no statutory
authority, it is acting irregularly and in excess of jurisdiction in the sense
necessary to justify the Supreme Court in entertaining an application for a
writ of certiorari and the quashal of the statement. 
In this connection, there is a clear distinction to be noted between the
jurisdiction of the Court of First Instance with respect to the principal cause
of action and its jurisdiction to grant an auxiliary remedy, like
attachment.  A court, although it may
have unquestioned jurisdiction over the principal cause of action, may,
nevertheless, act irregularly or in excess of its jurisdiction in granting the
auxiliary remedy.  In such case, the
party aggrieved may prosecute a proceeding by writ of certiorari in the Supreme Court.”^[10]

It is to be admitted of course, that the discretion of the lower
court in granting a writ of attachment prayed for is not to be arbitrarily
interfered with.  There is no
justification for viewing with suspicion each and every exercise thereof.  The presumption may even be indulged in that
the judge had in mind considerations of weight and influence, sufficiently
persuasive, thus resulting in the action taken. 
Nonetheless, in view of the perturbation in property rights and the
ever-present possibility that the creditor, as is to be expected by what it considers
a legitimate defense of its interest, would betray no hesitancy or reluctance
in availing itself of this remedy, it becomes unavoidable in the exercise of
our supervisory authority to subject to critical and rigorous scrutiny such an
exercise of power whenever appropriately challenged as in this case.  So our decisions have indicated with
unfailing uniformity.^[11]

2.  The above controlling
principle did not appear to have been ignored or disregarded when on the
pleadings then before respondent Judge, he issued the writ of attachment and,
thereafter, did not grant petitioners’ motion to discharge such writ of course,
it does not offend reason if on the same pleadings, another judge could have
been more exacting in his appraisal of the grounds relied upon by respondent
Mobil and more sympathetic to the plea of petitioners when they sought to
discharge such a writ of attachment. 
Since, as pointed out, the discretion primarily belongs to the lower
court, a difference of view as to how it is to be appropriately exercised
certainly does not suffice for a finding that there was a grave abuse thereof.

3.  It is an entirely
different matter, however, for respondent Judge, considering all the
circumstances, to refuse to accord a hearing to petitioners to enable them to
present evidence that would, in their opinion, suffice for the discharge of the
writ of attachment.  This is so
particularly because the principal grounds relied upon is the imputation of the
alleged fraud on the part of petitioner Guillermo F. Garcia in contracting the
debt or incurring the obligation as well as the alleged removal, or disposition
by petitioners of some of their properties again with intent to defraud their
creditor, respondent Mobil.  It must be remembered
that the complaint limited itself to a bare assertion that such was the
case.  Another court might have required
more particularity and a certain degree of precision, consider­ing the
seriousness of the imputation.  Moreover,
in the motion to discharge the writ of attachment by petitioners, reference was
mad to the long existing business relationship between petitioner Guillermo F.
Garcia and respondent Mobil that dated back to June 10, 1963, additional
contracts being executed on April 1, 1964 and May 22, 1964, respondent Mobil
during all the while being conspicuously silent as to any alleged fraud being
perpetrated upon it or any misrepresentation made.

It would not appear entirely reasonable to assume without more
just because of a statement in the complaint filed on September 20, 1966, after the lapse of three
years, that petitioner entered into such business arrangement with deceit and
duplicity in mind.  Nor did the filing of
an opposition to such a motion to discharge attachment by respondent Mobil,
wherein reference was made to an investigation thereafter conducted by one in
its employ who was unaware of the original circumstances, his services having
been availed of much later and who found what for him was an evident case of
fraud committed upon by his employer, suffice to erase all doubts about the
inherent weakness of the claim it is to he expected that its personnel, even if
they did not so consciously intend, would, in the ordinary course of events and
out of loyalty, not be disappointed if perchance the right kind of evidence
would make its appearance.  Thereby, the
collection of its credit would be further assured, unfortunately at the cost of
the debtor’s reputation being seriously impaired.

Since the allegation of fraud would refer to the state of mind of
the parties, not as of the date of the litigation but of a period dating back
to the past, here three years back, it would not be too much for the debtor to
insist that he be fully heard so that the truth could be ascertained.  Otherwise, it may happen that for business reverses
suffered, the badge of infamy would be attached.  The same observation applies to the other
ground relied upon which is the alleged disposal or attempt to dispose of the
personal properties on the part of petitioner-spouses, again with intent to defraud,
although perhaps to a lesser degree.  It
could be that respondent Mobil did attempt to spin too tight a web on gossamer
filigrees.  It is not to be lost sight of
either that the lower court was thereafter informed that there was, prior to
the filing of the complaint by respondent Mobil before it, a case filed by
petitioner-spouses, as plaintiffs, against re­spondent Mobil, wherein they
sought damages much greater in amount than that sought to be collected in the
action before re­spondent Judge.  All in
all due process would seem to require that both parties further ventilate their
respective contentions in a hearing that could indeed reveal the truth.  Fairness would be served thereby, the demands
of reason satisfied.

We are not to be understood as intimating that we lend credence
and belief to what petitioners assert. 
We do no more hold that because of the facts alleged that they should be
heard.  Nor do we intimate that in each
and every case such a right to a hearing must be granted.  That is not so.  Here, however, to repeat, enough has been
shown to our mind to call for such an opportunity being granted petitioners as
persistently sought by them to enable them to justify their plea for the
lifting of the writ of attachment.

4.  It is alleged, however,
that there was a waiver on their part of the right to a hearing.  The lower court, as noted in the answer did
set a date for such purpose, but counsel for petitioners did not come as he was
ill, as noted in his manifestation, which likewise stated that he would submit
a memorandum within five days in lieu of oral argument on the motion for the
lifting of such attachment.  A waiver
could indeed have been predicated, if that were all that is to be considered.  The memorandum of petitioners, however, made
clear that he did submit such a pleading on October 27, 1966, “but in the
last paragraph of the said memorandum, he called the attention of the Hon.
Judge Andres Reyes to the need of receiving evidence on the truth or falsity of
the grounds relied on by respondent [Mobil Oil] in its application for a writ
of attachment.”^[12] It is to be noted that in the
reply-memorandum of respondent Mobil filed with us, there is no such denial of
the above allegation.  It would seem,
therefore, that under the circumstances no waiver of this right to a hearing
was in fact made by petitioners.

5.  It is our considered
view, therefore, again only because of the unique situation that this
litigation presents, that the challenged order of March 13, 1967 by respondent
Judge which denied the urgent motion of petitioners to allow the presentation
of evidence in support of their plea to discharge the writ of attachment and
which granted the motion to sell the attached properties on the part of
respondent Mobil, was issued with grave abuse of discretion.  To repeat, such a conclusion would not
ordinarily be called for as the discretion of the lower court, while not
unconfined, is sufficiently broad. 
Nonetheless, the specific facts presented by this litigation as
appraised in the light of the fundamental doctrine that the exercise of this
power to issue a writ of attachment is subject to its strict conformity with
all procedural requirements upon pain of its being annulled in an appropriate certiorari proceeding compel the
conclusion that due process would not be satisfied unless petitioners be
granted the opportunity to be heard.

WHEREFORE, the writ of certiorari
is granted, setting aside and annulling the challenged order of March 13, 1967,
and a writ of mandamus is likewise
granted addressed to whoever is acting in the place and stead of the Hon.
Andres Reyes, the respondent Judge, now a Justice of the Court of Appeals, to
hear evidence on the motion of petitioners to discharge the writ of
attachment.  With costs against
respondent Mobil.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Castro, and Teehankee, JJ., concur.

Dizon and
Sanchez, JJ., did not take part.

Barredo, J., concurs in the result.  The writ
of preliminary attachment should have been lifted even without the need of any
formal presentation of evidence.

^[1]
The Acting Clerk of Court and Provincial Sheriff
ex officio of Rizal, Eliseo
S. Zari as
well as the Clerk of Court and Sheriff ex officio of Manila,
Jose San Agustin, were included as respondents.

^[2]
Petition, pars. 2 & 3.  There was
likewise an allegation in the complaint that the amount allegedly due Mobil,
exclusive of interest, was above all counterclaims.

^[3]
Ibid, pars. 4 & 5.

^[4]
Ibid, pars. 6 & 7.

^[5]
Ibid, pars. 8 to 11.

^[6]
Answer, pp. 6-12.

^[7]
Ibid, pp. 13 to 18.

^[8]
Sec. 11, Rule 57, Rules of Court.

^[9]
Answer, pp. 18 to 20.

^[10]
3 Moran, Rules of Court, pp. 14-15.

^[11]
Cf. La Compania General de Tabacos
v. Trinchera, 7 Phil. 708 (1907); Leung Ben v.
O’Brien, 38 Phil. 182 (1918); Olsen & Co. v. Olsen, 48 Phil. 238
(1925); La Granja, Inc. v. Samson, 58 Phil.
378 (1933); General v. De Venecia, 78 Phil.
780 (1947); Carpio v. Macadaeg,
9 SCRA 552 (1963).

^[12]
Memorandum for the Petitioners, p. 5.