Alejandro Ng Wee vs. Manuel Tankiansee – G.R. No. 171124, February 13, 2008

Petitioner Alejandro Ng Wee, a valued client of Westmont Bank (now United Overseas Bank), made several money placements with the bank’s affiliate, Westmont Investment Corporation (Wincorp), a domestic entity engaged in the business of an investment house with the authority and license to extend credit. Petitioner received disturbing news on Wincorp’s financial condition prompting him to inquire about and investigate the company’s operations and transactions with its borrowers. He then discovered that the company extended a loan equal to his total money placement to a corporation [Power Merge]. This credit facility originated from another loan extended by Wincorp to another corporation [Hottick Holdings]. When the latter defaulted in its obligation, Wincorp instituted a case against it and its surety. Settlement was, however, reached in which Hottick’s president, Luis Juan L. Virata (Virata), assumed the obligation of the surety.

Finding that Virata purportedly used Power Merge as a conduit and connived with Wincorp’s officers and directors to fraudulently obtain for his benefit without any intention of paying the said placements, petitioner instituted, on October 19, 2000, Civil Case No. 00-99006 for damages with the Regional Trial Court (RTC) of Manila. One of the defendants impleaded in the complaint is herein respondent Manuel Tankiansee, Vice-Chairman and Director of Wincorp.

On September 30, 2004, respondent filed before the trial court another Motion to Discharge Attachment, re-pleading the grounds he raised in his first motion but raising the following additional grounds: (1) that he was not present in Wincorp’s board meetings approving the questionable transactions;21 and (2) that he could not have connived with Wincorp and the other defendants because he and Pearlbank Securities, Inc., in which he is a major stockholder, filed cases against the company as they were also victimized by its fraudulent schemes. The trial court denied the motion. Respondent filed a certiorari petition before the CA. The appellate court rendered the assailed Decision reversing and setting aside the aforementioned orders of the trial court and lifting the Writ of Preliminary Attachment to the extent that it concerned respondent’s properties. Petitioner moved for the reconsideration of the said ruling, but the CA denied the same. Hence this case.

Whether the Petitioner sufficiently alleged the participation of the Respondent in defrauding the former in the instant case to be entitled for the Writ of Preliminary Attachment.

No, for a writ of attachment to issue under this rule, the applicant must sufficiently show the factual circumstances of the alleged fraud because fraudulent intent cannot be inferred from the debtor’s mere non-payment of the debt or failure to comply with his obligation. The applicant must then be able to demonstrate that the debtor has intended to defraud the creditor.

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 fraud must relate to the execution of the agreement and must have been the reason which induced the other party into giving consent which he would not have otherwise given. To constitute a ground for attachment in Section 1 (d), Rule 57 of the Rules of Court, fraud should be committed upon contracting the obligation sued upon. A debt is fraudulently contracted if at the time of contracting it the debtor has a preconceived plan or intention not to pay, as it is in this case. Fraud is a state of mind and need not be proved by direct evidence but may be inferred from the circumstances attendant in each case.

Let it be stressed that the provisional remedy of preliminary attachment is harsh and rigorous for it exposes the debtor to humiliation and annoyance. The rules governing its issuance are, therefore, strictly construed against the applicant, such that if the requisites for its grant are not shown to be all present, the court shall refrain from issuing it, for, otherwise, the court which issues it acts in excess of its jurisdiction. Likewise, the writ should not be abused to cause unnecessary prejudice. If it is wrongfully issued on the basis of false or insufficient allegations, it should at once be corrected.


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