Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=50669:gr-163692-2008&amp;catid=1502&amp;Itemid=566
Timestamp: 2019-04-19 08:55:28+00:00

Document:
G.R. No. 163692 - ALLIED BANKING CORPORATION v. SOUTH PACIFIC SUGAR CORPORATION, ET AL.
ALLIED BANKING CORPORATION, Petitioner, v. SOUTH PACIFIC SUGAR CORPORATION, MARGARITA CHUA SIA, AGOSTO SIA, LIN FAR CHUA, GERRY CHUA, SIU DY CHUA, and ANTONIO CHUA, Respondents.
The instant petition assails the Decision1 dated February 3, 2004 and the Resolution2 dated May 13, 2004 of the Court of Appeals in CA-G.R. SP No. 68619. The appellate court had found no grave abuse of discretion on the part of the Regional Trial Court (RTC) of Makati City, Branch 148, in discharging the writ of preliminary attachment it previously granted, and dismissed the petition for certiorari . The motion for reconsideration was denied.
South Pacific Sugar Corporation (South Pacific), on March 23, 1999, issued three promissory notes totaling P96,000,0003 to the petitioner, Allied Banking Corporation (hereafter Allied Bank), to secure payment of loans contracted during the same period. Respondents Margarita Chua Sia, Agosto Sia, Lin Far Chua, Gerry Chua, Siu Dy Chua, and Antonio Chua (guarantors) executed continuing guaranty/comprehensive surety agreements binding themselves solidarily with the corporation. On maturity, South Pacific and its guarantors failed to honor their respective covenants.
On January 26, 2001, Allied Bank filed a complaint for collection of a sum of money with a prayer for the issuance of a writ of preliminary attachment against respondents. Allied Bank prayed in its complaint (1) that upon its filing, a writ of preliminary attachment be issued ex parte against all leviable properties of the respondents as may be sufficient to satisfy petitioner's claim; and (2) that the respondents be ordered to pay petitioner P90,000,000 plus interest and charges, as well as attorney's fees and costs of suit.
Thereafter, the trial court granted the attachment and Allied Bank posted the requisite bond.
On certiorari, Allied Bank averred that the trial court acted with precipitate haste in deciding the motion to discharge the attachment without its written opposition, and with grave abuse of discretion in dissolving the writ without requiring the guarantors to post a counter-bond. Finally, it asserted that the trial court failed to appreciate evidence of respondents' fraud.
On the issue of discharge of the writ notwithstanding fraud, the Court of Appeals held that the inability of respondents to pay does not amount to a fraudulent intent. The Court of Appeals stated that Allied Bank failed to justify the grant of a writ of attachment. Essentially, it found wanting such evidence as would establish fraud as required before a writ of attachment may be granted under Section 1,9 Rule 57 of the 1997 Rules of Civil Procedure. It found that "the core of the prayer for the attachment was the failure of the respondents to pay their obligations on maturity date," not fraudulent intent to evade their commitments; and that the "inability to pay one's creditors is not necessarily synonymous with fraudulent intent not to honor an obligation."10 The appellate court added that Allied Bank was aware of the corporation's financial standing and capacity to pay its loans when Allied Bank granted credit facilities to it. The appellate court noted that respondents had disclosed their financial standing through the Information Memorandum they submitted. The trial court, therefore, committed no grave error, said the appellate court.
THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THERE WAS NO INTENTION ON [THE] PART OF RESPONDENTS TO DEFRAUD THE PETITIONER.
THE HONORABLE COURT OF APPEALS ERRED IN NOT FINDING THAT A COUNTER-BOND WAS NECESSARY FOR THE DISCHARGE OF THE WRIT OF PRELIMINARY ATTACHMENT.
The ultimate issue raised in this petition is whether there was fraud committed by respondents against petitioner bank such that a writ of attachment may be issued against respondents.
Allied Bank contends that respondents were guilty of fraud in contracting for their loan amounting to about P90 million and in performing their obligations under said loan, as sufficiently testified to by its lone witness. Respondents counter that they had no fraudulent intent in such contract for loan nor in the performance of obligations thereunder.
Next, the witness of petitioner, Marilou Go, cited a project study prepared by a certain consulting firm, Seed Capital Ventures, Inc.. According to petitioner, the project study suggested that only about 60% of South Pacific's mill and refinery was being utilized to capacity, leading Allied Bank to suspect that the loan was being diverted to other purposes. Yet, again, the project study was neither presented nor offered in evidence, hence testimony on it is just hearsay.
The same witness also testified that South Pacific was indebted in millions of pesos to several other banks, but then again, no documentary evidence or other proof was presented to establish such fact. Hence, the witness' testimony remains uncorroborated.
In our considered view, without presenting the documents adverted to by petitioner's lone witness, Allied Bank's allegations of fraud amount to no more than mere conjectures. Yet there is no showing why Allied Bank, being in the business of loans, could not obtain and present the necessary documents in support of its allegations. Thus, we are in agreement that the Court of Appeals was correct in finding that the testimony of Allied Bank's witness failed to show that respondents' indebtedness was incurred fraudulently.
We need not tarry further to discuss the other issues raised in the petition for being moot on account of the foregoing pronouncement.
WHEREFORE, the instant petition is DENIED for lack of merit. The Decision dated February 3, 2004 and the Resolution dated May 13, 2004 of the Court of Appeals in CA-G.R. SP No. 68619 are AFFIRMED. The Order23 dated May 23, 2001 of the Regional Trial Court of Makati City, Branch 148, discharging the writ of preliminary attachment in Civil Case No. 01-121 is UPHELD. No pronouncement as to costs.
1 Rollo, pp. 55-65. Penned by Associate Justice Delilah Vidallon-Magtolis, with Associate Justices Jose L. Sabio, Jr. and Hakim S. Abdulwahid concurring.
4 Id. at 41-42, 63-64, 111-112.
12 Rules of Court, Rule 132.
SEC. 34. Offer of evidence. ' The court shall consider no evidence which has not been formally offered. The purpose for which the evidence is offered must be specified.
14 Ting v. Villarin, G.R. No. 61754, August 17, 1989, 176 SCRA 532, 535.
15 SECTION 1. Burden of proof. - Burden of proof is the duty of a party to present evidence on the facts in issue necessary to establish his claim or defense by the amount of evidence required by law.
16 Filinvest Credit Corporation v. Relova, No. L-50378, September 30, 1982, 117 SCRA 420, 430-431.
17 Rollo, pp. 116 and 123.
19 Salgado v. Court of Appeals, No. L-55381, March 26, 1984, 128 SCRA 395, 400.
20 No. L-27419, October 31, 1969, 30 SCRA 162.
22 Valgosons Realty, Inc. v. Court of Appeals, G.R. No. 126233, September 11, 1998, 295 SCRA 449, 461.
23 Rollo, pp. 129-131. Penned by Judge Oscar B. Pimentel.

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