One-liner: the property attached is an indebted thing and a virtual
condemnation of it to pay the owner's debt
Doctrine/s:
Attachment is defined as a provisional remedy by which the property
of an adverse party is taken into legal custody, either at the
commencement of an action or at any time thereafter, as a security
for the satisfaction of any judgment that may be recovered by the
plaintiff or any proper party
The attaching creditor acquires a specific lien on the attached
property which nothing can subsequently destroy except the very
dissolution of the attachment or levy itself
Attachment binds the property itself, and, hence, continues until the
judgment debt is satisfied, or the attachment discharged or vacated in
some manner provided by law
FACTS:
RTC Quezon City case
Petitioner Leticia P. Ligon (Ligon) filed a complaint for collection of
sum of money and damages, rescission of contract, and nullification
of title with prayer for the issuance of a writ of preliminary attachment
against Sps. Baladjay [Link].
Ligon alleged that Rosario Baladjay (Rosario) enticed her to extend a
short-term loan in the amount of P3,000,000.00, payable in a month's
time and secured by an Allied Bank post-dated check for the same
amount.
Ligon also claimed that Rosario represented that she and her
husband Saturnino were in the process of selling their property in
Ayala Alabang Village, Muntinlupa City (subject property, TCT No.
8502).
The Allied Bank check was dishonored upon presentment and,
despite assurances to replace it with cash, Rosario failed to do so.
Ligon discovered that the subject property had already been
transferred to Polished Arrow, alleged to be a dummy corporation of
Sps. Baladjay and the individual defendants. The TCT was then
cancelled and replaced in the name of Polished Arrow.
Asserting that the transfer of the subject property to Polished Arrow
was made in fraud of Sps. Baladjay's creditors, Ligon also prayed
that the said transfer be nullified, and that a writ of preliminary
attachment be issued in the interim against defendants' assets,
including the subject property.
Subsequently, an Amended Writ of Preliminary Attachment was
issued on November 26, 2002, and annotated on the dorsal portion of
TCT No. 9273 on December 3, 2002 (December 3, 2002 attachment
annotation).
RTC Makati case
A similar complaint was lodged by Spouses Vicente against Sps.
Baladjay where it was established that the latter solicited millions of
pesos in investments from Sps. Vicente using conduit companies that
were controlled by Rosario, as President and Chairperson.
A writ of preliminary attachment also against the subject property was
issued and annotated on the dorsal portion of TCT No. 9273 on
March 12, 2003.
Before the Quezon City Case was concluded, the Makati City RTC
rendered a decision (Makati RTC Decision), rescinding the transfer of
the subject property from Sps. Baladjay to Polished Arrow upon a
finding that the same was made in fraud of creditors.
Makati RTC ordered the RD of Muntinlupa to issue a new title in the
name of Ting, free from any liens and encumbrances.
Decisions
Quezon City RTC rendered a decision (QC RTC Decision), directing
Sps. Baladjay to pay Ligon the amount of P3,000,000.00 with
interest, as well as attorney's fees and costs of suit.
When Ligon sought the execution of the QC RTC Decision, she
discovered that the December 3, 2002 attachment annotation had
been deleted from the TCT when the subject property was sold by
way of public auction on September 9, 2005 to the highest bidder,
respondent Ting, for the amount of P9,000,000.00 during the
execution proceedings in the Makati City Case.
A new title was issued in the name of Ting free of liens and
encumbrances
Issue: WON Ligon’s prior attachment lien over the subject property should
be carried over to any subsequent certificate of title until the judgment debt
is satisfied
Ruling:
YES. Notwithstanding the subsequent cancellation of TCT No. 9273
due to the Makati City RTC's December 9, 2004 Decision rescinding
the transfer of the subject property from Sps. Baladjay to Polished
Arrow, Ligon's attachment lien over the subject property
continued to subsist since the attachment she had earlier secured
binds the property itself, and, hence, continues until the judgment
debt of Sps. Baladjay to Ligon as adjudged in the Quezon City Case
is satisfied, or the attachment discharged or vacated in some manner
provided by law.
An attachment is a proceeding in rem, and, hence, is against the
particular property, enforceable against the whole world.
The lien continues until the debt is paid, or sale is had under
execution issued on the judgment, or until the judgment is satisfied,
or the attachment discharged or vacated in some manner provided by
law
Thus, a prior registration of an attachment lien creates a
preference, such that when an attachment has been duly levied
upon a property, a purchaser thereof subsequent to the attachment
takes the property subject to the said attachment. As provided under
PD 1529, said registration operates as a form of constructive notice
to all persons.
Ligon, in order to secure the satisfaction of a favorable judgment in
the Quezon City Case, applied for and was eventually able to secure
a writ of preliminary attachment over the subject property which was
later annotated on the dorsal portion of the TCT
Ligon's claim, secured by the aforesaid attachment, is against Sps.
Baladjay whose ownership over the subject property had been
effectively restored in view of the RTC's rescission of the property's
previous sale to Polished Arrow.
Thus, Sps. Ligon's attachment lien against Sps. Baladjay as well
as their successors-in-interest should have been preserved, and
the annotation thereof carried over to any subsequent certificate
of title, the most recent of which as it appears on record is TCT No.
31001 in the name of Techico, without prejudice to the latter's right to
protect his own ownership interest over the subject property
