Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=50176:gr-175587-2007&amp;catid=1496&amp;Itemid=566
Timestamp: 2019-04-20 00:13:19+00:00

Document:
This Petition for Review assails the May 31, 2006 Decision1 of the Court of Appeals in CA-G.R. CV No. 78200 affirming the August 30, 2000 Decision2 of the Regional Trial Court of Makati, which granted respondent Joseph Anthony M. Alejandro's claim for damages arising from petitioner Philippine Commercial International Bank's (PCIB) invalid garnishment of respondent's deposits.
Subsequently, respondent filed a motion to quash9 the writ contending that the withdrawal of his unassigned deposits was not fraudulent as it was approved by petitioner. He also alleged that petitioner knew that he maintains a permanent residence at Calle Victoria, Ciudad Regina, Batasan Hills, Quezon City, and an office address in Makati City at the Law Firm Romulo Mabanta Buenaventura Sayoc & De los Angeles, 10 where he is a partner. In both addresses, petitioner regularly communicated with him through its representatives. Respondent added that he is the managing partner of the Hong Kong branch of said Law Firm; that his stay in Hong Kong is only temporary; and that he frequently travels back to the Philippines.
WHEREFORE, the URGENT MOTION TO QUASH, being meritorious, is hereby GRANTED, and the ORDER of 24 October 1997 is hereby RECONSIDERED and SET ASIDE and the WRIT OF attachment of the same is hereby DISCHARGED.
WHEREFORE, premises above considered, and defendant having duly established his claim in the amount of P25,000,000.00, judgment is hereby rendered ordering Prudential Guarantee & [Assurance] Co., which is solidarily liable with plaintiff to pay defendant the full amount of bond under Prudential Guarantee & Assurance, Inc. JCL(4) No. 01081, [Bond No. HO-46764-97], dated 24 October 1997 in the amount of P18,798,734.69. And, considering that the amount of the bond is insufficient to fully satisfy the award for damages, plaintiff is hereby ordered to pay defendant the amount of P6,201,265.31.
Petitioner elevated the case to the Court of Appeals which affirmed the findings of the trial court. It held that in claiming that respondent was not a resident of the Philippines, petitioner cannot be said to have been in good faith considering that its knowledge of respondent's Philippine residence and office address goes into the very issue of the trial court's jurisdiction which would have been defective had respondent not voluntarily appeared before it.
WHEREFORE, the appeal is PARTIALLY GRANTED and the decision appealed from is hereby MODIFIED. The award of damages in the amount of P25,000,000.00 is deleted. In lieu thereof, Prudential Guarantee & [Assurance, Inc.], which is solidarily liable with appellant [herein petitioner], is ORDERED to pay appellee [herein respondent] P2,000,000.00 as nominal damages; P5,000,000.00 as moral damages; and P1,000,000.00 as attorney's fees, to be satisfied against the attachment bond under Prudential Guarantee & Assurance, Inc. JCL (4) No. 01081.
At the outset, it must be noted that the ruling of the trial court that petitioner is not entitled to a writ of attachment because respondent is a resident of the Philippines and that his act of withdrawing his deposits with petitioner was without intent to defraud, can no longer be passed upon by this Court. More importantly, the conclusions of the court that petitioner bank misrepresented that respondent was residing out of the Philippines and suppressed the fact that respondent has a permanent residence in Metro Manila where he may be served with summons, are now beyond the power of this Court to review having been the subject of a final and executory order. Said findings were sustained by the Court of Appeals in CA-G.R. SP No. 50784 and by this Court in G.R. No. 140605. The rule on conclusiveness of judgment, which obtains under the premises, precludes the relitigation of a particular fact or issue in another action between the same parties even if based on a different claim or cause of action. The judgment in the prior action operates as estoppel as to those matters in issue or points controverted, upon the determination of which the finding or judgment was rendered. The previous judgment is conclusive in the second case, as to those matters actually and directly controverted and determined.24 Hence, the issues of misrepresentation by petitioner and the residence of respondent for purposes of service of summons can no longer be questioned by petitioner in this case.
The core issue for resolution is whether petitioner bank is liable for damages for the improper issuance of the writ of attachment against respondent.
Notwithstanding the final judgment that petitioner is guilty of misrepresentation and suppression of a material fact, the latter contends that it acted in good faith. Petitioner also contends that even if respondent is considered a resident of the Philippines, attachment is still proper under Section 1, paragraph (f), Rule 57 of the Rules of Court since he (respondent) is a resident who is temporarily out of the Philippines upon whom service of summons may be effected by publication.
Petitioner's contentions are without merit.
In the hearings of the motion, and oral arguments of counsels before the Court, it appears that plaintiff BANK through its contracting officers Vice President Corazon B. Nepomuceno and Executive Vice President Jose Ramon F. Revilla, personally transacted with defendant mainly through defendant's permanent residence in METRO-MANILA, either in defendant's home address in Quezon City or his main business address at the Romulo Mabanta Buenaventura Sayoc & Delos Angeles in MAKATI and while at times follow ups were made through defendant's temporary home and business addresses in Hongkong. It is therefore clear that plaintiff could not deny their personal and official knowledge that defendant's permanent and official residence for purposes of service of summons is in the Philippines. In fact, this finding is further confirmed by the letter of Mr. JOHN GOKONGWEI, JR. Chairman, Executive Committee of plaintiff BANK, in his letter dated 6 October 1997 on the subject loan to defendant of the same law firm was addressed to the ROMULO LAW FIRM in MAKATI.
[Anent the] second ground of attachment x x x [t]he Court finds that the amount withdrawn was not part of defendant's peso deposits assigned with the bank to secure the loan and as proof that the withdrawal was not intended to defraud plaintiff as creditor is that plaintiff approved and allowed said withdrawals. It is even noted that when the Court granted the prayer for attachment it was mainly on the first ground under Section 1(f) of Rule 57 of the 1997 Rules of Civil Procedure, that defendant resides out of the Philippines.
On the above findings, it is obvious that plaintiff already knew from the beginning the deficiency of its second ground for attachment [i.e.,] disposing properties with intent to defraud his creditors, and therefore plaintiff had to resort to this misrepresentation that defendant was residing out of the Philippines and suppressed the fact that defendant's permanent residence is in METRO MANILA where he could be served with summons.
Apropos the Application for Judgment on the Attachment Bond, Escobar claims in its petition that the award of attorney's fees and injunction bond premium in favor of Hanil is [contrary] to law and jurisprudence. It contends that no malice or bad faith may be imputed to it in procuring the writ.
Escobar's protestation is now too late in the day. The question of the illegality of the attachment and Escobar's bad faith in obtaining it has long been settled in one of the earlier incidents of this case. The Court of Appeals, in its decision rendered on February 3, 1983 in C.A.-G.R. No. SP-14512, voided the challenged writ, having been issued with grave abuse of discretion. Escobar's bad faith in procuring the writ cannot be doubted. Its Petition for the Issuance of Preliminary Attachment made such damning allegations that: Hanil was already able to secure a complete release of its final collection from the MPWH; it has moved out some of its heavy equipments for unknown destination, and it may leave the country anytime. Worse, its Ex Parte Motion to Resolve Petition alleged that "after personal verification by (Escobar) of (Hanil's) equipment in Cagayan de Oro City, it appears that the equipments were no longer existing from their compound." All these allegations of Escobar were found to be totally baseless and untrue.
Even assuming that the trial court did not make a categorical pronouncement of misrepresentation and suppression of material facts on the part of petitioner, the factual backdrop of this case does not support petitioner's claim of good faith. The facts and circumstances omitted are highly material and relevant to the grant or denial of writ of attachment applied for.
(f) In an action against a party x x x on whom summons may be served by publication.
In so arguing, petitioner attempts to give the impression that although it erroneously invoked the ground that respondent does not reside in the Philippines, it should not be made to pay damages because it is in fact entitled to a writ of attachment had it invoked the proper ground under Rule 57. However, even on this alternative ground, petitioner is still not entitled to the issuance of a writ of attachment.
(f) In an action against a party who resides out of the Philippines, or on whom summons may be served by publication.
However, where the defendant is a resident who is temporarily out of the Philippines, attachment of his/her property in an action in personam, is not always necessary in order for the court to acquire jurisdiction to hear the case.
Sec. 16. Residents temporarily out of the Philippines. - When an action is commenced against a defendant who ordinarily resides within the Philippines, but who is temporarily out of it, service may, by leave of court, be also effected out of the Philippines, as under the preceding section.
The preceding section referred to in the above provision is Section 15 which provides for extraterritorial service - (a) personal service out of the Philippines, (b) publication coupled with the sending by registered mail of the copy of the summons and the court order to the last known address of the defendant; or (c) in any other manner which the court may deem sufficient.
In Montalban v. Maximo,31 however, the Court held that substituted service of summons (under the present Section 7, Rule 14 of the Rules of Court) is the normal mode of service of summons that will confer jurisdiction on the court over the person of residents temporarily out of the Philippines. Meaning, service of summons may be effected by (a) leaving copies of the summons at the defendant's residence with some person of suitable discretion residing therein, or (b) by leaving copies at the defendant's office or regular place of business with some competent person in charge thereof.32 Hence, the court may acquire jurisdiction over an action in personam by mere substituted service without need of attaching the property of the defendant.
A man temporarily absent from this country leaves a definite place of residence, a dwelling where he lives, a local base, so to speak, to which any inquiry about him may be directed and where he is bound to return. Where one temporarily absents himself, he leaves his affairs in the hands of one who may be reasonably expected to act in his place and stead; to do all that is necessary to protect his interests; and to communicate with him from time to time any incident of importance that may affect him or his business or his affairs. It is usual for such a man to leave at his home or with his business associates information as to where he may be contacted in the event a question that affects him crops up.
Thus, in actions in personam against residents temporarily out of the Philippines, the court need not always attach the defendant's property in order to have authority to try the case. Where the plaintiff seeks to attach the defendant's property and to resort to the concomitant service of summons by publication, the same must be with prior leave, precisely because, if the sole purpose of the attachment is for the court to acquire jurisdiction, the latter must determine whether from the allegations in the complaint, substituted service (to persons of suitable discretion at the defendant's residence or to a competent person in charge of his office or regular place of business) will suffice, or whether there is a need to attach the property of the defendant and resort to service of summons by publication in order for the court to acquire jurisdiction over the case and to comply with the requirements of due process.
In the instant case, it must be stressed that the writ was issued by the trial court mainly on the representation of petitioner that respondent is not a resident of the Philippines.34 Obviously, the trial court's issuance of the writ was for the sole purpose of acquiring jurisdiction to hear and decide the case. Had the allegations in the complaint disclosed that respondent has a residence in Quezon City and an office in Makati City, the trial court, if only for the purpose of acquiring jurisdiction, could have served summons by substituted service on the said addresses, instead of attaching the property of the defendant. The rules on the application of a writ of attachment must be strictly construed in favor of the defendant. For attachment is harsh, extraordinary, and summary in nature; it is a rigorous remedy which exposes the debtor to humiliation and annoyance.35 It should be resorted to only when necessary and as a last remedy.
It is clear from the foregoing that even on the allegation that respondent is a resident temporarily out of the Philippines, petitioner is still not entitled to a writ of attachment because the trial court could acquire jurisdiction over the case by substituted service instead of attaching the property of the defendant. The misrepresentation of petitioner that respondent does not reside in the Philippines and its omission of his local addresses was thus a deliberate move to ensure that the application for the writ will be granted.
In light of the foregoing, the Court of Appeals properly sustained the finding of the trial court that petitioner is liable for damages for the wrongful issuance of a writ of attachment against respondent.
All the aforementioned weighed, and considering the short period of time it took to have the writ lifted, the favorable decisions of the courts below, the absence of evidence as to the professional character and the social standing of the attorney handling the case and the amount garnished, the award of attorney's fees should be fixed not at P1 Million, but only at P200,000.00.
The courts below correctly awarded moral damages on account of petitioner's misrepresentation and bad faith; however, we find the award in the amount of P5 Million excessive. Moral damages are to be fixed upon the discretion of the court taking into consideration the educational, social and financial standing of the parties.41 Moral damages are not intended to enrich a complainant at the expense of a defendant.42 They are awarded only to enable the injured party to obtain means, diversion or amusements that will serve to obviate the moral suffering he has undergone, by reason of petitioner's culpable action. Moral damages must be commensurate with the loss or injury suffered. Hence, the award of moral damages is reduced to P500,000.00.
Considering petitioner's bad faith in securing the writ of attachment, we sustain the award of exemplary damages by way of example or correction for public good. This should deter parties in litigations from resorting to baseless and preposterous allegations to obtain writs of attachments. While as a general rule, the liability on the attachment bond is limited to actual (or in some cases, temperate or nominal) damages, exemplary damages may be recovered where the attachment was established to be maliciously sued out.43 Nevertheless, the award of exemplary damages in this case should be reduced from P5M to P500,000.00.
WHEREFORE, the petition is PARTIALLY GRANTED. The May 31, 2006 Decision of the Court of Appeals in CA-G.R. CV No. 78200 is AFFIRMED with MODIFICATIONS. As modified, petitioner Philippine Commercial International Bank is ordered to pay respondent Joseph Anthony M. Alejandro the following amounts: P50,000.00 as nominal damages, P200,000.00 as attorney's fees; and P500,000.00 as moral damages, and P500,000.00 as exemplary damages, to be satisfied against the attachment bond issued by Prudential Guarantee & Assurance Inc.,45 under JCL (4) No. 01081, Bond No. HO-46764-97.
1 Rollo, pp. 199-220. Penned by Associate Justice Magdangal M. De Leon and concurred in by Associate Justices Conrado M. Vasquez, Jr. and Mariano C. Del Castillo.
2 Record on appeal, vol. 1, pp. 357-365.
8 TSN, vol. II, set I, pp. 633-639.
9 Record on appeal, vol. I, pp. 30-38.
10 Also spelled as Delos Angeles in some parts of the records and rollo.
11 Id. at 67-69. Penned by Judge Fernando V. Gorospe, Jr.
13 Rollo, pp. 328-334. The Decision was penned by Associate Justice Hector L. HofileÃ±a and concurred in by Associate Justices Bernardo P. Abesamis and Presbitero J. Velasco, Jr. (now a member of this Court).
17 Record on appeal, vol. I, pp. 73-78.
20 Id. at 365. Penned by Judge Fernando V. Gorospe, Jr.
24 Tan v. Court of Appeals, G.R. No. 142401, August 20, 2001, 363 SCRA 444, 445 and 449-450.
25 Record on appeal, Vol. II, pp. 67-68.
26 G.R. NOS. 113176 & 113342, July 30, 2001, 362 SCRA 1, 15.
27 Herrera, Remedial Law, vol. III, pp. 2 and 8; Regalado, Remedial Law Compendium, vol. I, ninth revised edition, p. 678.
28 ObaÃ±a v. Court of Appeals, G.R. No. 78635, April 27, 1989, 172 SCRA 866, 874.
29 Consolidated Plywood Industries, Inc. v. Breva, G.R. No. L-82811, October 18, 1988, 166 SCRA 589, 593-594; ObaÃ±a v. Court of Appeals, supra at 874.
30 Sahagun v. Court of Appeals, G.R. No. 78328, June 3, 1991, 198 SCRA 44, 54.
31 131 Phil. 154, 165-166 (1968).
32 The pronouncement of the Court in Castillo v. Court of First Instance of Bulacan, Branch IV (G.R. No. L-55869, February 20, 1984, 127 SCRA 632) that with respect to residents temporarily out of the Philippines, non-compliance with the modes of service under Section 17 (now Section 15, i.e., service of summons out of the Philippines by personal service, or by publication in a newspaper of general circulation), is a denial of due process and renders the proceedings void, does not mean that said modes of service are exclusive. Substituted service of summons is still the normal mode of service for residents temporarily out of the Philippines. The declaration of nullity of the proceedings in the said case was by reason of the defective substituted service of summons to a person not authorized to receive the same being a mere overseer of the lessee in the conjugal property of the defendant, and not because substituted service of summons per se is not among the valid modes of service upon a resident temporarily out of the country.
"It is even noted that when the Court granted the prayer for attachment it was mainly on the first ground under Section 1(f) of Rule 57 of the 1997 Rules of Civil Procedure, that defendant resides out of the Philippines."
36 Philippine Commercial International Bank v. Intermediate Appellate Court, G.R. No. 73610, April 19, 1991, 196 SCRA 29, 36-37.
37 Almeda v. CariÃ±o, G.R. No. 152143, January 13, 2003, 395 SCRA 144, 149-150.
38 Robes-Francisco Realty & Development Corporation v. Court of First Instance of Rizal, (Branch XXXIV), G.R. No. L-41093, October 30, 1978, 86 SCRA 59, 64; Pedrosa v. Court of Appeals, G.R. No. 118680, March 5, 2001, 353 SCRA 620, 630-631.
39 Carlos v. Sandoval, G.R. No. 135830, September 30, 2005, 471 SCRA 266, 300.
40 Prudential Bank v. Court of Appeals, G.R. No. 125536, March 16, 2000, 328 SCRA 264, 272.
41 Philippine Commercial International Bank v. Intermediate Appellate Court, supra at 38-39.
42 Filinvest Credit Coporation v. Intermediate Appellate Court, G.R. No. L-65935, September 30, 1988, 166 scra 155, 165-166.
43 Hanil Development Co., Ltd. v. Court of Appeals, supra note 26 at 16.
44 Carlos v. Sandoval, supra at 290-291.
45 The surety, Prudential Guarantee & Assurance, Inc., was duly notified of respondent's application for damages (Record on appeal, p. 78) pursuant to Section 20, Rule 57 of the Rules of Court.

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