J. Uy Kimpang & Co. vs. Javier

Sureties who execute a counterbond to discharge an attachment are estopped from subsequently questioning the validity of the attachment proceedings, because irregularities in attachment proceedings that render the attachment merely voidable—not void—are deemed waived unless promptly taken advantage of by appropriate objection before or at the time of executing the counterbond.

J. Uy Kimpang & Co. was a commercial entity that had extended credit to Vicente Javier and several co-defendants in Antique. When the defendants allegedly began disposing of their properties to defraud creditors, the plaintiff sought attachment to secure its claim. The attachment proceedings were conducted before the justice of the peace of the capital of Antique, acting in the absence of the Judge of the Court of First Instance. The defendants posted a counterbond with sureties Juan Autajay and Severino Magbanua to discharge the attachment. The dispute arose after judgment was rendered in the plaintiff's favor in the main case (G.R. No. 36414) and execution against the defendants' properties proved insufficient to satisfy the judgment, prompting the plaintiff to seek execution against the sureties under their counterbond obligation.

On December 20, 1925, J. Uy Kimpang & Co. filed a verified complaint in the Court of First Instance of Antique against Vicente Javier, Ramon Majandog, Zenon Javier, Paz Javier and her husband Hugo Mabaquiao, and Ramon Maza, alleging that the defendants were indebted to it in the sum of P9,352 plus interest at 12 per cent per annum from May 1918. The complaint further alleged that the defendants were disposing or about to dispose of their properties with intent to defraud creditors, and prayed for attachment of their properties unless they executed an obligation as guaranty for their solvency. Four days later, on December 24, 1925, the plaintiff filed a motion reiterating its prayer for a writ of attachment. The Judge of the Court of First Instance was absent from the province at the time, and the justice of the peace of the capital of Antique, Delfin Hofileña, acting in his place, issued an order directing the clerk of court to issue a writ of attachment upon the plaintiff's execution of an obligation in the sum of P9,500.

On December 29, 1925, the plaintiff executed the P9,500 obligation, and the clerk issued the writ of attachment notwithstanding that the obligation had not yet been approved by the court. The provincial sheriff attached the defendants' properties, the assessed values of which were noted in the sheriff's return. On the same day, the defendants executed a counterobligation in the sum of P9,500 to dissolve the attachment, signed by all defendants and their sureties Juan Autajay and Severino Magbanua, who bound themselves jointly and severally. The counterbond was approved the same day by the justice of the peace who had issued the order of attachment. The counterobligation provided that should judgment be favorable to the plaintiff, the defendants would redeliver the properties released from attachment to the court officer for application to the judgment, and in case of failure, the defendants and their sureties would pay the plaintiff the full value of the attached property.

Thereafter, Autajay sought to withdraw as surety. His first motion, filed on March 29, 1926, was denied by the trial court on April 17, 1926, unless the defendant Vicente Javier executed a new obligation within thirty days. Two further motions were filed by Autajay and Magbanua on November 21 and December 17, 1927, but were not acted upon for lack of prosecution. On January 31, 1930, Autajay filed another motion; the plaintiff objected, but the trial court granted the withdrawal on February 15, 1930, conditioned on the defendants submitting a new obligation within sixty days. The defendants never executed the required substitute obligation.

Judgment was eventually rendered in the plaintiff's favor in the main case (G.R. No. 36414), sentencing the defendants to pay P6,678.84 plus interest and costs. On August 8, 1933, a writ of execution was issued, and the sheriff levied upon seven parcels of land belonging to defendant Ramona Majandog, selling them at public auction to Uy Cay Ju, manager of the plaintiff entity, for only P1,730—an amount insufficient to satisfy the judgment. Because the defendants failed to deliver the properties released from attachment, and at least three of those properties had been sold after their release, the plaintiff moved on January 23, 1934 for execution against the sureties' properties. Autajay objected, contending that the attachment was void for lack of service of the writ, that the attachment was not inscribed in the registry of properties, that he had been released from his surety obligation by the court's order of February 15, 1930, and that the undertaking should be enforced exclusively against the other surety Magbanua. The lower court denied the plaintiff's motion on July 18, 1934, on grounds that the justice of the peace lacked authority to issue the writ given the amount in litigation, that the clerk's issuance of the writ was illegal, that the attachment was invalid because the writ was not signed by a judge and the plaintiff's obligation was not court-approved, and that the discharge of attachment violated Section 440 of Act No. 190. The plaintiff appealed.

• Authority of the Justice of the Peace: Petitioner argued that the lower court erred in holding that the justice of the peace of the capital of Antique could not issue the writ of attachment on the ground that the amount sued for exceeded the jurisdictional limit for justices of the peace, citing Wise & Co. vs. Larion for the proposition that a justice of the peace acting in the absence of the Judge of First Instance may exercise interlocutory jurisdiction including attachment orders.
• Issuance of the Writ by the Clerk: Petitioner contended that the writ of attachment was not a mere capricious act of the clerk but was issued in strict compliance with a valid order from a competent judge, and that the law does not require that the writ be signed by the very judge who authorized it.
• Validity of the Attachment: Petitioner maintained that the omission of the judge's signature on the writ was not fatal, as the writ was issued pursuant to a valid judicial order, and that any defect was waived by the defendants and sureties when they executed the counterbond without objection.
• Validity of the Plaintiff's Obligation: Petitioner argued that the defendants and sureties, having accepted the plaintiff's obligation by executing the counterbond to discharge the attachment, were estopped from later questioning the obligation's validity for lack of court approval.
• Enforceability of the Counterobligation: Petitioner asserted that the counterobligation was enforceable under Section 440 of Act No. 190 because the defendants could not redeliver the attached properties—several having been sold after release—and the sureties failed to prove the defendants had other properties susceptible of attachment and execution.
• Autajay's Release: Petitioner contended that Autajay was never released from his surety obligation because the defendants never executed the new obligation required by the court's order of February 15, 1930.
• Motion for Reconsideration: Petitioner argued that the lower court erred in denying its motion for reconsideration and motion for new trial.

• Void Attachment for Lack of Service: Respondent Autajay argued that the attachment of the defendants' properties was null and void because it did not appear that the defendants were served with a copy of the writ ordering the attachment.
• Non-Registration of Attachment: Respondent Autajay contended that the attachment was not inscribed in the registry of properties.
• Release from Surety Obligation: Respondent Autajay maintained that he was released from his obligation as surety because his undertaking had been cancelled when the court, in its order of February 15, 1930, permitted him to withdraw therefrom.
• Exclusive Liability of Co-Surety: Respondent Autajay argued that the undertaking should in any event be enforced exclusively against the other surety, Severino Magbanua, inasmuch as Magbanua did not withdraw therefrom.

• Jurisdiction of the Justice of the Peace: Whether the justice of the peace of the capital of Antique had authority to issue the order of attachment when the amount in litigation exceeded the jurisdictional limit for ordinary cases before justices of the peace.
• Validity of the Clerk-Issued Writ: Whether the writ of attachment was illegal because it was issued by the clerk rather than by the judge, and whether the judge's power to authorize attachment could be delegated to the clerk.
• Validity of the Attachment: Whether the attachment was invalid because the writ was not signed by a judge.
• Validity of the Plaintiff's Obligation: Whether the plaintiff's obligation was invalid for lack of court approval.
• Effect of the Counterobligation: Whether the counterobligation executed by the defendants and their sureties was without legal effect.
• Enforceability Against Sureties: Whether the plaintiff had the right to enforce the counterobligation against the sureties, and whether the lower court erred in denying the plaintiff's motion for enforcement.
• Denial of Motions: Whether the lower court erred in denying the plaintiff's motion for reconsideration and motion for new trial.

• Jurisdiction of the Justice of the Peace: Yes. The justice of the peace of the capital, acting in the absence of the Judge of First Instance, had full authority to issue the order of attachment pursuant to Section 1, paragraph 4 of Act No. 2131, which grants interlocutory jurisdiction including attachment orders regardless of the amount in litigation.
• Validity of the Clerk-Issued Writ: No error. The writ was issued by the clerk in strict compliance with a valid judicial order; the law determines which judicial authority may grant attachment but does not require that the writ itself be signed by that authority.
• Validity of the Attachment: Valid. Any defect in the writ was waived by the defendants and sureties, who executed the counterbond without promptly objecting to the procedure, and irregularities rendering the attachment merely voidable are deemed waived.
• Validity of the Plaintiff's Obligation: Valid. The defendants and sureties, having accepted the plaintiff's obligation by executing the counterbond, were estopped from later questioning its validity for lack of court approval.
• Effect of the Counterobligation: Enforceable. The counterobligation was valid and binding, and the attachment must be presumed to have been discharged upon its approval.
• Enforceability Against Sureties: Yes. The counterobligation is enforceable under Section 440 of Act No. 190, because the defendants could not redeliver the attached properties—several having been sold—and the sureties failed to prove the defendants had other attachable properties.
• Denial of Motions: Yes, the lower court erred. The denial of the motion for reconsideration and new trial was a necessary consequence of the preceding errors.

• Jurisdiction of the Justice of the Peace: Section 1, paragraph 4 of Act No. 2131, in force on December 24, 1925, provides that the justice of the peace in the capitals of provinces, in the absence of the judge of the province, may exercise like interlocutory jurisdiction as the judge, including the issuance of orders that are final and do not involve a decision on the merits—such as attachment. The defendants failed to prove that the Judge of the Court of First Instance of Antique was present in the province on that date. Under the legal presumption that official duty has been regularly performed (Section 334, No. 14, Act No. 190), it must be held that the judge was absent. The justice of the peace therefore acted in full conformity with law. This ruling followed Wise & Co. vs. Larion, 45 Phil. 314, where the Court held that the justice of the peace of the capital acting in the absence of the Justice of First Instance has the power to issue an order of attachment even when the amount litigated exceeds the limit for his ordinary jurisdiction.

• Validity of the Clerk-Issued Writ: Sections 425, 426, and 427 of Act No. 190 vest the power to grant attachment in justices, judges of First Instance, and justices of the peace or municipal judges, provided the legal requisites are present. All requirements were complied with here. The order of December 24, 1925 was entered by a competent judge; the writ issued by the clerk was in strict compliance with that valid order. The law does not state that writs of attachment must be issued by the very justice or judge who authorized it—it simply determines which judicial authority has the power to grant attachment. Even assuming the writ was defective for lack of the judge's signature, it was too late to raise the question after the defendants and their sureties accepted and acted upon it as valid. The general rule is that irregularities and defects in attachment proceedings that render the attachment merely voidable—not void—are deemed waived unless promptly taken advantage of. The sureties, by executing the counterbond, demonstrated awareness of the attachment and sought to discharge it, thereby waiving any procedural defects.

• Validity of the Attachment: The omission of the judge's signature on the writ was not fatal because the writ was issued by the clerk in compliance with a valid order from the justice of the peace, who was authorized by Act No. 2131 to issue it. The defendants and sureties were notified of the order, as evidenced by the language of their counterobligation, which recited that "the defendant having prayed for the discharge of the attachment levied upon his properties." The contention that the plaintiff's motion for attachment was not sworn to was also disposed of: the motion was merely a repetition of what was already prayed for in the verified complaint, and it was unnecessary that it be separately under oath. Technicalities should be disregarded when there has been substantial compliance, and the Code of Civil Procedure should be liberally construed to promote its object and assist parties in obtaining speedy justice (Section 2, Act No. 190; Garcia vs. Ambler and Sweeney, 4 Phil. 81).

• Validity of the Plaintiff's Obligation: Both the defendants and the sureties, by executing the counterbond required by law for discharge of the attachment, accepted the plaintiff's obligation filed with the justice of the peace. It was therefore too late and futile to allege that the obligation was invalid for lack of approval by the judge. They were estopped by their own acts, as their failure to question the obligation at the proper time constituted a waiver. One who has any objection to the sufficiency or validity of an obligation in attachment proceedings should record the objection before executing the counterbond; otherwise, it is understood that he does not question or renounces the right to question the obligation's sufficiency or validity.

• Effect of the Counterobligation: The fact that the record does not show the court formally dissolved the attachment after approving the counterbond was of no importance. It must be assumed that the court discharged the attachment by virtue of the counterbond; otherwise, the reason for approving it could not be explained and the approval would have no finality. In Rosenthal (123 Cal. 240), where a similar question was involved, the court held that where goods were in fact released as a consequence of the bond being given, it must be presumed that an order discharging the attachment was made and that the officer regularly performed his duty in releasing the goods.

• Enforceability Against Sureties: The counterobligation is enforceable under Section 440 of Act No. 190 (Bautista vs. Joaquin, 46 Phil. 885). When the defendants were required to deliver to the sheriff the properties released from attachment, they could not do so, as at least three of those properties had been sold after their release. The sureties failed to prove that the defendants had other properties susceptible of attachment and execution. Autajay's contention that he was released from his obligation was without basis: the order of February 15, 1930 granted his withdrawal only on the condition that the defendants execute a new obligation within sixty days, which they never did. The sureties' subsequent motions were confined to requests for withdrawal on grounds of self-interest, never raising objections to the attachment's validity, further confirming waiver.

• Denial of Motions: Because the lower court committed the preceding five errors, it necessarily also committed errors 6 and 7, which were necessary consequences thereof.

• Waiver and Estoppel in Attachment Proceedings — Irregularities and defects in attachment or garnishment proceedings that render the attachment merely voidable—not void—are deemed waived unless promptly taken advantage of by appropriate mode of raising objection thereto. A party who executes a counterbond to discharge an attachment, without first objecting to the sufficiency or validity of the attachment proceedings, waives all such objections and is estopped from subsequently questioning the attachment's validity. The Court applied this doctrine to hold that the sureties Autajay and Magbanua, who voluntarily executed the counterbond and sought only to withdraw from their obligation on grounds of self-interest, could not later challenge the attachment's validity.

• Interlocutory Jurisdiction of the Justice of the Peace — Under Section 1, paragraph 4 of Act No. 2131, the justice of the peace of the capital of a province, acting in the absence of the Judge of First Instance, may exercise the same interlocutory jurisdiction as the judge, including the issuance of attachment orders, regardless of the amount in litigation. The Court applied this doctrine to uphold the validity of the order of December 24, 1925, issued by Justice of the Peace Hofileña.

• Liberal Construction of the Code of Civil Procedure — The provisions of the Code of Civil Procedure shall be liberally construed to promote its object and assist the parties in obtaining speedy justice, bearing in mind the spirit and purpose of the provisions rather than their strict letter (Section 2, Act No. 190). The Court applied this principle to hold that the plaintiff's motion for attachment, though not separately sworn to, was valid because it merely reiterated the prayer in the verified complaint, constituting substantial compliance.

• Presumption of Regular Performance of Official Duty — Under Section 334, No. 14 of Act No. 190, there is a legal presumption that official duty has been regularly performed. The Court applied this presumption to conclude that the Judge of the Court of First Instance of Antique was absent from his district on December 24, 1925, in the absence of proof to the contrary, thereby validating the justice of the peace's exercise of interlocutory jurisdiction.

• "The general rule is that 'irregularities and defects in attachment or garnishment proceedings which render the attachment merely voidable and not void, are deemed to be waived unless promptly taken advantage of by appropriate mode of raising objection thereto.'" — This passage articulates the controlling doctrine on waiver of attachment irregularities, forming the ratio decidendi for the Court's holding that the sureties were estopped from challenging the attachment after executing the counterbond.

• "One who has any objection to the sufficiency or validity of an obligation in attachment proceedings, should record the same before executing the counterobligation required for the discharge of the attachment; otherwise, it will be understood that he does not question, or that he renounces his right to question, the sufficiency or validity of the said obligation." — This formulation establishes the procedural rule governing when objections to attachment bonds must be raised, and is the canonical statement of the estoppel principle applied against the sureties.

• "In order not to nullify the purposes of the law, technicalities should be disregarded, especially when, as in the case under advisement, there was substantial compliance therewith." — This passage reflects the Court's liberal construction doctrine under Section 2 of Act No. 190, applied to uphold the validity of the plaintiff's unsworn motion for attachment as a repetition of the verified complaint's prayer.

• Wise & Co. vs. Larion, 45 Phil. 314 — Controlling precedent followed. The Court relied on this case to hold that the justice of the peace of the capital, acting in the absence of the Judge of First Instance, has the power to issue an order of attachment even when the amount litigated exceeds the limit for his ordinary jurisdiction.

• Bautista vs. Joaquin, 46 Phil. 885 — Followed. The Court cited this case for the proposition that the counterobligation executed by the sureties is enforceable under Section 440 of Act No. 190.

• Garcia vs. Ambler and Sweeney, 4 Phil. 81 — Followed. Cited in support of the principle that the Code of Civil Procedure should be liberally construed to promote its object and assist parties in obtaining speedy justice.

• Hammond vs. Starr, 79 Cal. 556, 21 Pac. 971 — Persuasive foreign authority. The Court cited this California case for the proposition that irregularities in attachment proceedings, if waived in the attachment suit, cannot be taken advantage of by sureties in collateral proceedings on the undertaking given to secure release of the attachment.

• Moffitt vs. Garrett, 100 Pac. Rep. 533 (Oklahoma) — Persuasive foreign authority. The Court cited this case, along with decisions from numerous other states, for the rule that execution of a bond under attachment statutes estops the defendant from controverting the attachment and renders the obligors absolutely liable for the judgment amount.

• Rosenthal, 123 Cal. 240 — Persuasive foreign authority. Cited for the presumption that where goods were released as a consequence of a bond being given, it must be presumed that an order discharging the attachment was made and that the officer regularly performed his duty.

• Section 1, paragraph 4, Act No. 2131 — Provides that the justice of the peace in the capitals of provinces, in the absence of the judge of the province, may exercise like interlocutory jurisdiction as the judge, including the appointment of receivers and the issuance of all other orders which are final and do not involve a decision on the merits. Applied to uphold the justice of the peace's authority to issue the attachment order on December 24, 1925.

• Sections 425, 426, and 427, Act No. 190 (Code of Civil Procedure) — Vest the power to grant attachment in justices, judges of First Instance, and justices of the peace or municipal judges, provided the legal requisites are present. Applied to confirm that the order of December 24, 1925 was entered by a competent judicial authority.

• Section 429, Act No. 190 — Requires that defendants be served with a copy of the order of attachment. The Court found this requirement was satisfied, inferring notice from the defendants' own recital in their counterobligation that they prayed for discharge of the attachment.

• Section 440, Act No. 190 — Governs the discharge of attachment upon execution of a counterbond and the liability of sureties thereunder. Applied to hold the counterobligation enforceable against the sureties when the defendants failed to redeliver the attached properties.

• Section 334, No. 14, Act No. 190 — Establishes the legal presumption that official duty has been regularly performed. Applied to presume the absence of the CFI Judge from his district on December 24, 1925, in the absence of contrary proof.

• Section 2, Act No. 190 — Mandates liberal construction of the Code of Civil Procedure to promote its object and assist parties in obtaining speedy justice. Applied to uphold the validity of the plaintiff's unsworn motion for attachment as substantial compliance.

Villa-Real, Abad Santos, Imperial, Laurel, and Concepcion, JJ., concurred.