By Atty. Julius Gregory B. Delgado
“PILIPINAS SHELL PETROLEUM CORPORATION VS. ANGEL Y. POBRE AND GINO NICHOLAS POBRE”, G.R. NO. 259709 (AUGUST 30, 2023): RESTATEMENT OF THE REQUISITES OF A VALID ISSUANCE OF A WRIT OF PRELIMINARY ATTACHMENT AND THE DOCTRINE THAT AN ATTACHMENT SHOULD CONFINED TO THE PRINCIPAL CLAIM EXCLUDING UNLIQUIDATED AND CONTINGENT CLAIMS
This case stems from a Complaint for Specific Performance and Collection of Sum of Money with application for the issuance of a Writ of Preliminary Attachment filed by petitioner Pilipinas Shell Petroleum Corporation (“PSPC”) against respondents Angel Y. Pobre (“Angel”), in his capacity as a retailer of Shell gas stations, and Gino Nicholas Pobre (“Gino”), who assumed over the said stations after Angel retired.
As a background, petitioner PSPC entered into three Retailer Supply Agreements (“RSAs”) with Angel, wherein they agreed that the former would supply Shell brand fuel and lubricants which the latter would then sell through three Shell stations in Buntun, Carigana and Libag, Tuguegarao City, Cagayan. On October 26, 2017, Angel informed petitioner PSPC that he was resigned as Shell dealer/operator effective December 16, 2017, owing to declining health and other conditions which require constant medical attention. On December 15, 2017, he made one last purchase of Shell products in the amount of Php4,846,555.84. The next day, he sent another letter to petitioner reiterating his resignation and requesting that the payment for the last purchase be set off with the receivables due him for some promotional programs he conducted on behalf of petitioner PSPC.
As it happened, petitioner PSPC sent on March 9, 2018, a reconciliation of accounting records to Angel and requested that his outstanding balance, net of accounts payable to him, amounted to Php2,787,529.33. Notably, on the same day, Gino sent his own letter to petitioner requesting that it dismantle and remove all Shell signages at the three Shell stations as he had already assumed ownership of the properties.
On March 13, 2018, petitioner demanded that Angel abide by his obligations under the RSAs and that he pays his outstanding balance of Php4,846,555.84. Petitioner PSPC also demanded the respondents to cease and desist from using competitor brand products in the gas stations. It likewise rejected Gino’s request as the removal of the Shell signages thereon would be a violation of the subsisting RSAs.
In response, Angel acknowledged the reconciliation and manifested his willingness to pay the outstanding balance of Php2,787,529.33 less the amount charged to the installation of Globe Telecom EDC terminal which was never installed in any of the three sites. Angel also reiterated that he already resigned as dealer/operator due to his deteriorating health, and that he could not be forced to continue operating the Shell sites since the RSAs were effectively terminated by his resignation. He also denied selling competitor brand products. Gino for his part denied being the owner or lessor of the properties and that he merely supplied Shell products to Angel.
The Regional Trial Court of Makati City issued an Order granting the prayer for the issuance of a Writ of Preliminary Attachment in the amount of Php92,846,555.84. As respondents’ motion for reconsideration was denied, they filed a Petition for Certiorari before the Court of Appeals. The Court of Appeals set aside the challenged orders of the trial court and directed the immediate lifting and dissolution of the Writ of Preliminary Attachment ruling that petitioner PSPC failed to prove that respondents were guilty of fraud and that they did not have sufficient security to cover the monetary claims. Hence, petitioner PSPC filed a Petition for Review on Certiorari.
The Supreme Court denied petitioner PSPC’s Petition for Review on Certiorari and upheld the ruling of the Court of Appeals. The Court restated the requisites for the issuance of a Writ of Preliminary Attachment: (1) that a sufficient cause of action exists; (2) that the case is one of those mentioned in Section 1 hereof; (3) that there is no other sufficient security for the claim sought to be enforced by the action; and (4) that the amount due to the applicant, or the value of the property the possession of which he/she is entitled to recover, is as much as the sum for which the order is granted above all legal counterclaims. The Court held that the trial court failed to determine of the second and third requisites are present.
On the second requisite, the Supreme Court held that fraud alleged must be of sufficient specificity and must rest on concrete grounds. Fraud, being a state of mind, cannot be inferred from bare allegations of non-payment or non-performance of obligation. The Court sustained the findings of the Court of Appeals and held: “Nowhere in the foregoing allegations it may be inferred that Angel employed such multifarious means to defraud petitioner. As the CA correctly pointed out, up until the RSAs were terminated, Angel had the right to place purchase orders for Shell products to sell at the stations. Petitioner was apprised beforehand of his intent to resign but still acceded to the purchase requests. Indeed, this circumstance per se, without more, is not indicative of fraud. As to his purported refusal to pay a ‘single centavo’ to petitioner when the dispute arose, the Court holds that non-payment of a debt, by itself, cannot constitute fraud under Section 1(d), Rule 57 of the Rules of Court.” With respect to respondent Gino, the Court also held that there is nothing in the averments of any fraudulent act on his part.
On the third requisite, the Supreme Court agreed with the Court of Appeals when it held that petitioner PSPC failed to establish that respondents had insufficient security to answer the claim. The Court held: “Indeed, petitioner uses the fact that Angel never posted a security for the RSAs as proof that that he could not post a security for the amounts claimed in its complaint. However, this reasoning is illogical and simply does not follow. By petitioner’s own admission, the reason Angel never posted a security was not because of his inability, but because of their ‘harmonious contractual relations.’ Thence, this could not serve as basis to comply with the third requisite.”
Finally, the Supreme Court held that the issuance of the Writ of Preliminary Attachment is excessive as it should be limited to the principal claim of Php4,846,555.84 excluding actual, compensatory, moral, exemplary, and nominal damages. The Court held: “The Court takes this occasion to sternly remind the lower courts that a writ of attachment should not be issued for unliquidated or contingent claims and should, as a general rule, be confined to the principal claim. The rationale is to avoid excessive attachments that would unduly prejudice and, in some cases, financially cripple the debtor or defendant even before the main issues of the controversy have been resolved.”