Oñate vs. Abrogar

A levy on attachment implemented before the court acquires jurisdiction over the person of the defendant is void, and the subsequent service of summons does not cure this invalidity. The implementation of the writ must be preceded or contemporaneously accompanied by the service of summons, a copy of the complaint, and other required documents.

Sun Life Assurance Company of Canada (Sun Life) filed a complaint for sum of money and damages with an application for a writ of preliminary attachment against Brunner Development Corporation (Brunner), its president Noel L. Diño, Emmanuel C. Oñate, and Econ Holdings Corporation (Econ). Sun Life alleged that it paid P39,526,500.82 for treasury bills, but the defendants delivered a promissory note instead, misrepresenting the transaction as a money placement. The trial court granted the ex parte application for a writ of attachment. The sheriff implemented the writ by garnishing bank accounts and levying on real properties of Oñate and Econ before serving the summons and complaint upon them.

• Nature of the Action: Sun Life sued for recovery of a sum of money and damages, alleging fraud in the inducement of a contract for the sale of treasury bills.
• The Writ and Its Implementation: The RTC issued a writ of preliminary attachment. Deputy Sheriff Arturo C. Flores served notices of garnishment on banks (PNB, Urban Bank, BPI, Union Bank) and levied on Oñate's real properties on January 3, 6, 7, and 8, 1992.
• Service of Summons: Summons and the complaint were served on Oñate and Econ on January 9, 1992, and on Diño on January 16, 1992—after all the aforementioned levies had been completed.
• Subsequent Proceedings: The RTC also issued orders authorizing the examination of bank books and ledgers of Brunner and Oñate at several banks.
• Petitioners' Position: Petitioners claimed their office was open and capable of receiving summons on January 3, 1992, contradicting the sheriff's report of a failed attempt.

• Invalidity of Attachment: Petitioners argued that the attachment was void ab initio because the trial court had not acquired jurisdiction over their persons at the time of the levy. They contended that the subsequent service of summons did not cure this jurisdictional defect.
• Improper Bank Examination: Petitioners maintained that the examination of bank books and ledgers was an unauthorized "fishing expedition," especially since Oñate was not a signatory to the transaction documents between Sun Life and Brunner.

• Curative Effect of Subsequent Jurisdiction: Respondent Sun Life countered that the trial court's eventual acquisition of jurisdiction over the petitioners cured the initial irregularity in the attachment proceedings.
• Justification for Bank Examination: Sun Life argued that the examination was justified because petitioner Oñate had signed checks transferring large sums from Brunner's account to other banks, tracing the subject funds.

• Validity of the Levy on Attachment: Whether the levy on attachment implemented before the service of summons on the defendants is valid, and whether the subsequent service of summons cures such invalidity.
• Propriety of Bank Examination: Whether the examination of bank books and records pursuant to the (invalid) attachment was proper.

• Validity of the Levy on Attachment: The levy was void. The writ of preliminary attachment may be granted and issued before the defendant is summoned, but it cannot be implemented (i.e., levy cannot be made) until jurisdiction over the person of the defendant is obtained. Implementation must be preceded or contemporaneously accompanied by service of summons and other documents. The subsequent acquisition of jurisdiction does not retroactively validate the prior, jurisdictionally-defective levy.
• Propriety of Bank Examination: The examination was improper. Under Rule 57, § 10 of the Rules of Court, such an examination is only proper in connection with a valid attachment. Since the attachment was invalid, the ancillary order for examination was likewise invalid.

• Three-Stage Process for Attachment and Jurisdictional Requirement — The grant of a writ of preliminary attachment involves three stages: (1) the court issues the order granting the application; (2) the writ of attachment issues pursuant to the order; and (3) the writ is implemented. Jurisdiction over the person of the defendant is not required for the first two stages. However, for the third stage—implementation—the court must have already acquired jurisdiction over the defendant. Any levy made without such jurisdiction is void.
• Simultaneity Requirement — When the sheriff commences implementation of the writ of attachment, it is essential that he serve on the defendant not only the attachment bond and order but also the summons and a copy of the complaint. Service of these documents must be simultaneous with, or precede, the actual levy on property.

• "It is clear from the above excerpt... that while the petition for a writ of preliminary attachment may be granted and the writ itself issued before the defendant is summoned, the writ of attachment cannot be implemented until jurisdiction over the person of the defendant is obtained." — This passage clarifies the critical distinction between the issuance and the implementation of the writ.
• "More important than the need for insuring success in the enforcement of the writ is the need for affirming a principle by insisting on that 'most fundamental of all requisites — the jurisdiction of the court issuing attachment over the person of the defendant.'" — This underscores the primacy of jurisdictional due process over mere expediency in enforcement.

• Davao Light & Power Co. v. Court of Appeals, 204 SCRA 343 (1991) — Cited by respondent but distinguished. The Court clarified that this case supports the rule that implementation of the writ must be accompanied by service of summons, not that subsequent service cures a prior levy.
• Cuartero v. Court of Appeals, 212 SCRA 260 (1992) — Applied and followed. This case explicitly articulated the three-stage process for attachment and the jurisdictional requirement for the implementation stage.
• H.B. Zachry Co. v. Court of Appeals, 232 SCRA 329 (1994) — Cited as a precedent with similar facts, where an attachment made before service of summons was held invalid despite later acquisition of jurisdiction.

• Rule 57, § 5 and § 10, Rules of Court — Section 5 lists the requisites for the issuance of a writ of attachment. Section 10 provides for the examination of a party whose property is attached, which was held to be unavailable where the attachment itself is void.
• Rule 57, § 13, Rules of Court — Cited to rebut the argument that the writ must be kept secret; this provision allows a defendant to move for discharge of an attachment even before any levy is made.
• Republic Act No. 1405 (Law on Secrecy of Bank Deposits), § 2 — Discussed in relation to the bank examination. The Court found the "subject matter of litigation" exception inapplicable because the nature of the transaction (sale vs. placement) did not change the fact that the money itself was the object of the dispute.

Chief Justice Narvasa, and Justices Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason, Puno, Vitug, Kapunan, and Francisco.

N/A — The decision was unanimous.