Atty. Julius Gregory Delgado
DUMARAN VS. LLAMEDO, ET AL., G.R. NO. 217583 (04 AUGUST 2021):
NON-PAYMENT OF OBLIGATION DOES NOT AMOUNT TO FRAUD IN THE PERFORMANCE OF OBLIGATION AS WOULD JUSTIFY ISSUANCE OF A WRIT OF PRELIMINARY ATTACHMENT
First of a Two-Part Series
The Supreme Court issued a Decision dated 04 August 2021 in G.R. No. 217583 entitled “Ignacio Dumaran vs. Teresa Llamedo, Sharon Magallanes and Ginalyn Cubeta”. In the said case, petitioner Ignacio Dumaran owns two fuel dealerships of Pilipinas Shell within General Santos City. Sometime in September 2009, Sharon Magallanes, a former employee of petitioner Dumaran, introduced Teresa Llamedo and Ginalyn Cubeta who proposed for Dumaran to supply them diesel and gasoline fuel and that they will pay in cash. Although they initially paid in cash, they subsequently paid for the purchase of the fuel using Llamedo’s personal checks.
On 23 November 2009, petitioner Dumaran filed a Complaint for Sum of Money, Damages and Attorney’s Fees with a Prayer for the Ex-Parte Issuance of a Writ of Preliminary Attachment against Llamedo, Magallanes and Cubeta alleging among others,: that Llamedo, Magallanes and Cubeta opened a joint account in Peninsula Rural Bank and with post-dated checks from that account, purchased on credit diesel and gasoline fuel from him; that they incurred an outstanding obligation of Php7,416,918.55 in October and November 2009 alone; that the post-dated checks Llamedo, Magallanes and Cubeta issued to pay the obligation were dishonored for insufficient funds/account closed; and despite demands, they failed to pay the total outstanding obligation. Petitioner Dumaran alleged in his Affidavit of Support of Prayer for Writ of Preliminary Attachment that Llamedo, Magallanes and Cubeta could not be located or contacted and were about to dispose of their properties, with intend to defraud Dumaran.
The trial court granted the Writ of Preliminary Attachment and Notice of Levy on Attachment. Llamedo, Magallanes and Cubeta filed a Motion to Lift Writ of Preliminary Attachment which was denied by the trial court. On a Petition for Certiorari, the Court of Appeals reversed the ruling of the trial court and lifted the Writ of Preliminary Attachment, hence, petitioner Dumaran filed a Petition for Review on Certiorari before the Supreme Court which led to the issuance of the Decision.
In the Decision, the Supreme Court, penned by Justice Paul Hernando, affirmed the Court of Appeals, and held that the appellate court correctly held that petitioner Dumaran failed to allege in both his Complaint and Affidavit of Support that he was defrauded into accepting the offer of the respondents intended from the beginning not to pay their obligations:
“The CA rightfully held that Dumaran’s allegations in both his Complaint and Affidavit failed to show that Dumaran was defrauded into accepting the offer of Llamedo, Magallanes and Cubeta; and that Llamedo, Magallanes and Cubeta intended from the beginning to not pay their obligations. The Complaint and Affidavit did not specifically show wrongful acts or willful omissions that Llamedo, Magallanes and Cubeta knowingly committed to deceive Dumaran to enter into the contract or to perform the obligation. The pleadings filed lacked the particulars of time, persons and places to support the serious assertions that Llamedo, Magallanes and Cubeta were disposing of their properties to defraud Dumaran.”
The Supreme Court also held that mere non-payment of obligation does not automatically equate to a fraudulent act as would justify the issuance of a Writ of Preliminary Attachment:
x x x x x x x x x
The case at bar is akin to the latter case. Non-payment of a debt or nonperformance of an obligation does not automatically equate to a fraudulent act. Being a state of mind, fraud cannot be merely inferred from a bare allegation of non-payment of debt or non-performance of obligation. Dumaran failed to prove with sufficient specificity the alleged fraudulent acts of Llamedo, Magallanes and Cubeta.”
Thus, it is not enough that it will be alleged in the Complaint that fraud was committed just because the intended check for payment became worthless or bounced due to insufficient funds or closed account. Other than the default in the performance of obligation, specific acts of deceit must be shown in both Complaint and Affidavit as would entitle a litigant to apply for and secure an ancillary remedy Writ of Preliminary Attachment to prevent and forestall assets of the defendant/s from being dissipated which will result into pyrrhic, paper, or empty victory at the end. (To be continued in the next part)